Financial Results Briefing for FY2020
April 30, 2020
AISIN SEIKI Co., Ltd.

Q1. What is the situation regarding the decrease in the number of ATs sold in 4Q due to theimpact of COVID-19 by region and customer compared to the plan in January? In the Chinese
market, the decline in the number of ATs sold is milder than the decline in the sales of newcars. Is this the result of a sales expansion or is it an increase in inventories at finished car
manufacturers?
A1. The COVID-19 impact in 4Q was a decrease of 250,000. By market, the decrease was 150,000in China, 50,000 in Europe, and 40,000 in North America. By customer, the decrease was 80,000 atVW-G, also 80,000 at other European OEMs including PSA and VOLVO, 60,000 at the Toyota Group,and 30,000 at Chinese OEMs. We believe that inventory levels have risen at some of the local
Chinese manufacturers due to COVID-19 but this is not excessive since manufacturers tookappropriate measures quickly. We will continue to watch the situation carefully. Products have
temporarily been stored as inventory for European and American customers due to a decrease indemand in late March. Most are exports from Japan, and we will make adjustments accordingly.
Q2. Your results forecast has not been disclosed, but what are your thoughts on capital
expenditure for next year?
A2. We are not yet at a stage where we can say anything specific, but we are reviewing our plan in
the direction of restricting nonessential and nonurgent expenditure. Of course, we will make sure tomaintain dialogue with clients so as not to be late for their launch plans. The impact of COVID-19 ishuge, but we will strive to maintain a good balance and make solid investments in future growth,such as in CASE.
Q3. How is the improvement in profitability of 8-speed ATs progressing? Also, how do you
view the inventory in China, in consideration of the government’s incentive?
A3. We have achieved an improvement of 3% year on year in 8-speed ATs. With regard to inventory,
the impact of COVID-19 was until February and March, and shipments were roughly as planned inApril, which was up 25% year on year.

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Q4. Is the 25% increase for China as a whole? Is it right to think that it includes exports fromJapan?
A4. It is for the Chinese market, including exports from Japan. In the period that ended, of the 9.04
million AT sales, 2.12 million units were for the Chinese market.
Q5. What is the situation of your internal discussions on additional cost reduction measuresin the event of a prolonged COVID-19 pandemic? In particular, will the integration with AW
have an impact on structural reforms?
A5. We are carrying out activities for structural reforms aimed at 2023. As President Ise says, we will
carry them out ahead of schedule. The same goes with the effect of the integration with AW.
Furthermore, we are making company-wide profit improvement measures against the rapid
deterioration of the business environment due to the pandemic. Workstyles are changing, as seen in
the spread of telework, for example. We will view this as an opportunity to push forward with bold
structural reforms.
Q6. Do you mean that you will carry out or make additions to the structural reforms of 36
billion yen ahead of schedule in 2023?
A6. We will first aim to realize our initial plan quickly. We are taking advantage of the pandemic toreview items for reform in areas that we could not stick the knife into before.
Q7. What is the regional breakdown and the breakdown by Group company of the 32 billion
yen in business disposal costs ?
A7. We had said it was 32 billion yen and it ended as planned. Impairment loss was 15 billion yen,which is broken down into 13 billion yen in North America, 0.9 billion yen in Europe, and 1.1 billion
yen in Indonesia. There are AT-related costs of 10 billion yen in China. There are also write-downsfor AMT in China.
Q8. Is the increase in AT sales in China between April and June a greater recovery of sales
than the decrease seen between January and March? Is there any difference betweencustomers?
A8. We are currently scrutinizing the situation, which is changing on a daily basis, and will disclose
our findings once we have them.
Q9. On the other hand, do you think there will be a situation where shipments in April–June

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will not be on time?
A9. We are making preparations to flexibly adapt to changes in the situation, but I’m afraid we cannot
make any affirmative comments on what might happen in the future.
Q10. The 30 billion yen impact of COVID-19 is large compared to the decrease in sales, but is
it due to the number of operating days?
A10. Of the 30 billion yen, 24 billion was in China, 4 billion was in North America, and 2 billion was inJapan. Of the 24 billion yen in China, impairment loss was 8 billion. This was triggered by thereduced operations due to COVID-19. There are other production losses as well, but the impact ofthe sales decline in China amounts to 16 billion yen.
Q11. Is the impairment loss of 8 billion yen in China separate from the 32 billion yen ofbusiness disposal costs?
A11. Yes, that is correct.
Q12. How do you view the production capacity of ATs?
A12. Although there has been a temporary leveling-off due to the switch to a new model, theproduction capacity as of March 2020 is about 11 million units worldwide. We will make every effort tomeet customer needs, including those for 6-speed ATs, 8-speed ATs, CVTs, and HVs.
Q13. In the recovery phase from COVID-19 in China, will 6-speed ATs recover or will 8-speed
ATs recover?
A13. The results for this period were split evenly between 6-speed ATs and 8-speed ATs. We will
disclose information about the future as soon as we have a better grasp of what might happen.
Q14. With regard to production capacity, will there be a significant change in the strategy
following these results?
A14. There is no change in strategy. The environment is changing concerning the specific number ofunits and the breakdown of the 13 million units. We are currently reconsidering our future moves. We
will let you know when the COVID-19 situation has settled down.
Q15. Does the 8 billion yen impairment loss in China correspond to the decline in theoperation rate due to COVID-19?
A15. What we had expected to be in the black turned into a loss due to COVID-19. It has nothing to
do with the AT strategy.
Q16. What is your future FCF situation? What about the aspects of financing and investing,

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such as the costs related to the acquisition of AW shares? Will it have an impact on
capitalization ratio management?
A16. We acquired AW shares on April 1. We had cash as of the end of the period, but currently weare buying back our holdings from Toyota. Cash flows had been improving due to a review of capital
expenditure, and we thought additional funding would be unnecessary this term if it hadn’t been for
COVID-19. We would like to explain further after we have determined the impact of COVID-19.
Q17. Will there be any difference between clients in the recovery of AT sales in China? Has
there been any progress in the launch plans of your two local joint ventures?
A17. We have just started to get a picture of the performance in April. The future outlook changes by
the minute. We will inform you as soon as we know the full situation. About the joint venture, we aretalking with the counterparties to consider the optimal production capacity and launch timing.
Q18. Has there been any progress in sales concerning electrification?
A18. We have received many inquiries from clients and are reviewing them, but we are having
difficulty communicating with them due in part to the impact of COVID-19. We hope to talk with themonce the impact has abated.
Q19. What are your thoughts on the dividend payout ratio?
A19. Our view has not changed. We consider the range to maintain safety and efficiency to be 25–
30% in terms of the capitalization ratio. We have aggressively carried out share buybacks when thelevel dropped below 20%. We intend to continue to produce stable returns through dividends andshare buybacks, while watching the capitalization ratio.
Q20. Can you give a specific example of a contingency plan you have? Perhaps you can takethis opportunity to do something more drastic than other companies? Let us know what you
have been considering.
A20. We are further accelerating our overhaul of fixed costs. The overlapping of functions caused bybeing a separate company from AW was something that other companies would have already solved.
An example is that we had arranged cleaning services for the building separately at each company.
By becoming integrated, we will have a clear picture of the appropriate vendor, frequency, and unit
price. Most things will have to be reduced over time, but we are accelerating our efforts in the area ofpurchasing, which we integrated in advance and includes variable costs.
Q21. China is introducing incentives for internal-combustion engines. Is there any
information on economic stimulus measures in other regions?
A21. We have not heard such news outside of China yet, but we would appreciate it if there were4/5

such incentives in other regions. Although CO2 restrictions must be taken into consideration, webelieve there are grounds for a re-evaluation of internal-combustion engines due to the current fall inoil prices.
Q22. There is talk of an extension of CO2 restrictions in Europe and of a review of CAFE inNorth America. Is there anything else?
A22. We have not heard anything else at this moment.

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