Financial Results Briefing for 2Q FY2021
October 29, 2020
AISIN SEIKI Co., Ltd.
Q1. You have not changed your full-year forecast, but what is your impression of the second
half compared to your initial plan?
A1. It means that we are committed to achieving operating profit of at least ¥50 billion. Looking at 2Q,
while we felt there was progress in emergency measures and structural reforms, there are still
uncertainties due to COVID-19. There has been no deterioration in our corporate structure or any
new risks after July. We have kept our full-year forecast unchanged due to uncertainties that include
the impact of COVID-19. We intend to carry out structural reforms that we can maintain control of,
instead of depending on the external environment.
Q2. Hybrid vehicles will increase in the next 25 to 30 years. How will it affect your revenue
structure?
A2. Currently, electric driving units account for around 7% of the total. A year ago we said that we
hoped to increase the ratio to 30% by 2025, and we will accelerate this effort. In both China andEurope, the gap created by the restrictions on gasoline vehicles will be filled by EVs or hybrids.
OEMs’ revenues come from gasoline cars, hybrid cars and EVs, in this order. Therefore, an increaseof hybrids is expected. This will be a business opportunity for us since we can meet customers’
needs with our full lineup of hybrids, which include both FF and FR for 1MHVs and 2MHVs. There
are actually talks that PSA will increase their standard number of 1MHVs. We are currently
considering switching from the existing 8-speed and will provide a strategic update after the turn of
the year.
SQ2. If you have a competitive edge in hybrids, perhaps you will enjoy high profitability
like you did with the 6-speed AT in the Chinese market?
SA2. We are not sure if things will turn out the way they did with the 6-speed AT, but we willcontinue to increase our competitiveness through efforts such as manufacturing motors
internally.
Q3. How is the recovery of AT sales by market and customer? What is the breakdown of the
100,000-unit increase for the full year?
A3. In the first half, sales in Asia and Others were -500,000 units, in North America -330,000 units, inEurope -230,000 units, and in China +180,000 units, which add up to -910,000 units in total. By

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customer, sales for the Toyota Group were -500,000 units, for European manufacturers -290,000units, for other Japanese companies -100,000 units, and for GMFCA -60,000 units, which add up to-910,000 units in total. The increment of 100,000 units for the full year is due to the relatively strong
recovery in ASEAN, while it was difficult to foresee increases at individual customers last time.

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Q4. What is the progress of your emergency measures, structural reforms and corporate
structure improvement efforts? How much of the progress do you think will continue after
next year?
A4. Six months have passed since we began our emergency measures and structural reforms, andwe feel that the precision of our efforts has improved. The ¥30 billion reduction in costs, which wehave been saying from the start is due to the structural reforms, is mainly attributable to theintegration of AW and subsidiaries and will remain after next year. We also feel that half of the ¥60billion reduction due to reduced overtime pay, which began as an emergency measure, will remain in
the future. Of the ¥92 billion reduction, ¥60 billion in reductions will continue to be effective next year.
We have determined the necessary fixed costs, and we will manage the costs within this limit.
Q5. What is the breakdown of the -¥27.6 billion due to fixed costs and others for the full year?
How accurate is this forecast?
A5. Although it is not based on any specific event, we expect -¥10 billion for quality-related risks andaround -¥7 billion for costs related to the integration with AW. Other costs include depreciation andpreproduction costs. Although the accuracy is high except for quality-related risks, we will scrutinize
the costs related to the integration.
Q6. Is there room for growth of AW’s installation rate even if the sales volume of China’s local
manufacturers do not increase?
A6. I will refrain from commenting since it has to do with customer information, but we will provide
quality products that satisfy customers’ expectations. Sales have been recovering recently due to therecovery of sales volumes. We will make sure to increase our sales when consumers switch to newcars.
Q7. Last time you did not disclose regional forecasts, but is there anything you can disclosein terms of changes to the previous forecast announcement?
A7. Last time we could not assume regional figures due to the uncertainties surrounding COVID-19.
The situation in Asia is severe, but we have received news that IMV is recovering in Thailand, and weare hopeful there. Indonesia continues to be difficult. North America is seeing the effects of corporate
structure improvement. We will make sure to reap profits there.
Q8. What are the percentage mixes and profitability of 6-speed and 8-speed AT?
A8. 8-speed AT saw a 3% year-on-year improvement in profitability by reviewing the design andspecifications, leveraging existing equipment, and selecting suppliers. As we continued our cost

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reduction efforts in the period under review, 8-speed has reached a level similar to that of the general
6-speed. As for percentage mix, we do not expect a large difference from last year on an annualbasis.
Q9. How are orders looking for each electric product, including hybrids and eAxle?
A9. We have secured new orders for several vehicles with BlueE. I cannot disclose customer details,
but they are a local manufacturer in China. The product is a hybrid.
Q10. How is the profitability of eAxle for BEVs? What will be the sales per unit ultimately?
A10. We intend to propose entire systems of electrification and EV, including thermalheat
management and the cooperative regenerative brake system, instead of a simple comparison
between AT and eAxle. We will strive to achieve per unit sales and profit that are comparable to thoseof gasoline vehicles. e-Four is a product that has a similar structure to eAxle. Most of its sales havebeen to Toyota, but inquiries from other manufacturers have been increasing. It is a motor
mechanism for the rear wheels of hybrid vehicles, such as SUVs, and is delivered in units. WithBlueE, we are considering strengthening our competitiveness and increasing sales.
Q11. How do your electric products compare with competitors’ for similar car types?
A11. Profitability is generally the highest with gasoline vehicles, followed by hybrids and EVs, in thisorder. This can be said for competitors too. Hybrids have a greater added value than gasoline
vehicles and are equivalent in terms of profitability. EVs are still low in profitability due in part to thesmall number of vehicles. We intend to improve their profitability.
Q12. What is your approach to dividends? Is there a possibility that they will increasedepending on second-half results, or will the current amount be the final level, considering
the payout ratio?
A12. We sought to achieve a balance with financial soundness due to the procurement of treasury
share purchase funds at AW. Our policy of maintaining a consolidated payout ratio of 30% and stabledividends has not changed. We expect year-end dividends to be ¥40 per share but will decide theamount in consideration of operating results.
Q13. What is the reason for the expected drop in sales to VW in the second half?
A13. It is due to car GPSes being replaced by systems and the wearing off of the new model effect of
the low-price brand.
<Final note>
We will launch our medium/long-term strategies after the turn of the year. We appreciate your

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continued support.

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