Midterm Strategy and Target towards Sustainable GrowthApril 26, 2019

Kiyotaka Ise,
President of Aisin Seiki Co., Ltd.

１. Midterm Target for FY2024
FY2020 at the bottom, We will target for 7% and more Operating Profit Rate on FY2024（100Million Yen）

50,000

売上12.0%
営業利益率
11.0%

40,00010.0%
9.0%

30,0008.0%
20,000
7.0%
6.0%
10,000
5.0%
04.0%
2016
2017

2017
2018

2018
2019

2019
2020

2020
2021

2021
2022

2022
2023

2023
2024

(FY）

1

２．Strategy ①Powertrain【1】 Forecast of Powertrain Global market
Although the growth of Powertrain global market is expected to delay 2 to 3years from forecast of last year, It shall reach 13Million Units on FY2024.
(1)Forecast of Global market(2)Forecast of Aisin Group（AT, HV Transmission, eAxle）(Note)Does not include licensed production

Market growth slowdown, especially China→Resulting in a two year delay from lastyear forecast〔10K Units/Year〕〔10K Units/Year〕

Forecast of Mar 2018;
FY2020 1,290(Including licensed prod.1,320)

1,300

Forecast of Mar 2019
Forecast of Mar 2018

1,100 1,150
10,100 10,300

9991,0202019
20182020
2019

9,800
9,400 9,300 9,5002019

2020

2021

Data from Research Institute

2022

2023

2024 〔FY〕

2021
2020

2022
2021

2024
2023 〔FY〕

2

2. Strategy ①Powertrain【2】 Production Plan of each region
Production plan of each region is revised following the change in market trend.
Production Vol. by region(10K Units/Year ）(10K Units/Year）（ Forecast of FY2020 on Mar 2018）

1,150
1,100

China

North America（240）

180 220

1,020

200
200

999

（60）

90 11746 60 60 70
00'19'20'21'22'19'20'21'22

Japan

ASEAN（960）

100
1000

851 827 830 830

（30）

1620

20

12'19'20'21'2202019

2020202102022(FY）'19'20'21'223

2. Strategy ①Powertrain【3】 Change of Electrification Products composition
Electrification Products (i.e HV Transmission, eAxle)will be launched assertively,in order to meet the growing demand.
Ratio of Electrification
Products

20.0%
Vs FY2019
+15％

9.0%
5.0%

6.0%

(10K Units/Year）

1,300
1,150999

1,020

Electrification Products

2019202020222024(FY）4

2. Strategy ②Product Lineup to meet CASE demand
For further development, Product Lineup responding for CASE will be expanded.

Electrification

Automated Driving

Connected
Sharing & Service・1 Motor ＨＶ Transmission

・Vehicle Dynamics Control

・Body components for MaaS・2 Motor ＨＶ Transmission

・Electronically Controlled
Brake System

・Smart Safety Door・eAxle series

・Smart Seating Arrangement
・Driver Monitoring System・Electric Pump

・Cabin Monitoring System・Parking Assist System

・Cooperative Regenerative
Brake System

・Logistics Support Service
・Automated Valet Parking

・・・・・・・・・5

2. Strategy ③Resource shift onto CASE Products and increase of sales
For further sales increase, We will shift our resource on CASE Products
CASE Ratio

27％R&D2019

2024

2031 (FY）2024

2031 (FY） 6CASE Ratio

Sales

11％

2019

3. Strengthening Company Structure
Achievement ofSustainable
Growth Strategy

Scrap＆build
work with noexceptions

Shifting our Resource for CASE isnecessary

Concentrate the group’s resourceson growth products and change theprofit structure by scrapping
unprofitable products
Establish a lean management structure

Saving up
Fixed Cost-From federal management to integrated groupmanagement-

Improving productivity in Indirect
division –Workstyle Reform7

3. Strengthening Company Structure①Scrap & build work with no exceptions

Major Scrap of Business□Sewing Machine Business which contributed toour profit during the foundation period□Bed Business started as TOYOTA Bedon 1966
□Deficit Automotive parts BusinessScrap with noexceptions

Shift the resource for CASE products

83. Strengthening Company Structure②Saving up Fixed Cost
Fixed cost increase due to sales inc. will be under control,and level of fixed cost will below FY2019
Establish a lean management structure

Fixed cost
（Except R&D, Depreciation）

Save up More than 10%
Fixed cost inc.
Due to Sales inc.

【From federal management to integrated
group management】】
・Integrate subsidiaries and management
Reduce duplicated cost. Efficient resources use.
・Aggregate management to Group Headquarter
Reduce the number of indirect workforce.

Improving Productivity in Indirect Division

・Workstyle Reform to achieve 20%
improvement in productivity(Business reform, RPA, IoT, MBD..)

2020

2024
(on course)

2024

(FY）
(FY）

9

3. Strengthening Company Structure②Saving up Fixed Cost Establish a lean management structure- From federal management to integrated group management-

Integration of subsidiaries

Integration of management factors
between subsidiaries

Integration of AW and AI-A

Image of Business integration
Kyushu Casting

Aisin Kyushu

Unification of President, BoD
Headquarter
Sales, Purchase

Headquarter
Integrate

Sales, PurchaseIntegration of 2 software companies

PresentAfterEngine
Components Plant

Body Parts Plant

ICT & Electronic Products VC

New Company
Software outsources

Software outsources10

3. Strengthening Company Structure②Saving up Fixed Cost Establish a lean management structure- From federal management to integrated group management-

Accelerate Integration of subsidiaries and management at all regions
218 Companies of Aisin Group （134 Overseas, 84 Domestic）

Europe11China
40

Asia & other43
Africa1Japan84North America
36

Starting integration ofsubsidiaries is on target for
50 companies worldwide
SouthAmerica31111

3. Strengthening Company Structure②Saving up Fixed Cost Establish a lean management structure- From federal management to integrated group management-

By aggregating the function to Group Headquarter, enhancement ofmanagement and saving up of fixed cost will be achieved.

123. Strengthening Company Structure②Saving up Fixed Cost

Improving productivity in Indirect division-Workstyle Reform-

Workstyle Reform
Digitalize
Introducing
IoT, MBD, RPA・・・＋

Kaizen overcoming
the precedent＝Scrap of time
consuming work

Scrap of unimportant paper work
Reduce of meeting hours…

Improvement of Worker’s
motivation

Reduce of total working hours
Increase of work is offset by productivity
improvement. No additional working hours for
Indirect division

20％ Improvement in Productivity
13Midterm Target for FY2024
FY2020 at the bottom, We will target for 7% and more Operating Profit Rate on FY2024（100Million Yen）

50,000

売上Sales
Operating Profit Rate
営業利益率ROE

12.0%
11.0%

40,00010.0%
9.0%

30,0008.0%
20,000
7.0%
6.0%
10,000
Sales of CASE

5.0%

04.0%
2016
2017

20172018

2018
2019

2019
20202020
2021

2021
2022

2022
2023

2023
2024
（FY）

14

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