Initiatives for Strengthening
Competitiveness of Powertrain Business
April 27, 2018

Yasumori Ihara,
President of Aisin Seiki Co., Ltd.

Basic Stance of Powertrain Business Strategies

I

Initiatives toIncreased Demands
for AutomaticTransmissions

Global initiative to rise capability
for the increased demands for
Automatic Transmissions

II

Development Strategy
for Electrification

Development strategy for improving
lineup of electrified products

Market Trend andSales Targets

Forecast of global market trend
Powertrain business’s sales volumetargets (quantity and amount)

III1

I Initiatives to Increased Demands for Automatic Transmissions
1. Global Initiative to Rise Capability for Increased
Demands for Automatic Transmissions
Production volume of AutomaticTransmissions (incl. HVs)
◇17%
16%
Production volume of◆◆

Production volume of each area(incl. license production)[Units: 10 thousand
units a year]

China

Automatic Transmissions

Market share

The number of automated devices+ HVs in market[Units: 10 thousand units a year]

869

90

1,320

220 Determined
this time980

2000'16[Units: 10 thousand
120 Determined
last timeunits a year]

100090'17[Units: 10 thousand
units a year]240
80
4030'17'20 [FY]6060

'16'17'20960

1000'20719ASEAN

Japan820

7070'17'20(4) Increased capability of AW
Mizunami: 30(5) Automatic Transmission
production in the Group’s
production bases: 40
Increase in capability ofexisting plant: 30
Establishment of AW
Mizunami: 40

Increased capability ofAW (Thailand): 20

1000

Increased capability of Tianjin
AW: 3060'20200'17(2) Tangshan AutomaticTransmission production: 40

30'16

North America200

licenseEurope (3) PSA
production: 30 [Units: 10 thousand
units a year]
30[Units: 10 thousand unitsa year]'16(1)Joint Venture with Chinese OEMs
[1] Guangzhou Automobile: 40[2] Geely Automobile: 401030
20'16'17'200'16

Description in red: Added this time.

2(1) Joint Venture with Chinese OEMs
We decided two Joint ventures for establishment of long-term partnershipwith Chinese OEMs.
Joint VenturePartner

Guangzhou Automobile

Geely Automobile

Capital

117 million USD

117 million USD

Total
investment

350 million USD

350 million USD

Investment
ratio

Aisin AW 60%
Guangzhou Automobile 40%

Aisin AW 60%
Geely Automobile 40%Items
produced

6-speed automatic transmissions

6-speed automatic transmissions

Capacity

400,000 units per year

400,000 units per year

Location

Guangzhou, Guangdong
Province(TBD)

Zhejiang Province (TBD)

Start ofproduction

2020 (scheduled)2020 (scheduled)3(2) Production of Automatic Transmissionin Tangshan Aisin Gear Co., Ltd.
Saving investment by utilizing the existing production base efficiently.

Tangshan Aisin Gear Co., Ltd.
LocationTangshan, Hebei, People's Republicof China

Establishment inApril 1996

Number of employees

Approximately 2,200

Items produced

Manual transmission
AMT(Automated ManualTransmission) etc.

Major customers

Tianjin FAW Toyota, Sichuan FAW Toyota, GACToyota, SAIC-GM-Wuling Automobile, GeelyAutomobile, Guangzhou Automobile, etc.

« Automatic Transmission Production Plan »Assembly of FF 6-speed Automatic Transmission (Annually 400,000

Newly installed line units per line). Machining the Automatic Transmission components.
Capital investment 20 billion yen
Start of production Planned to start in August 20194

(3) License Production in the Peugeot
Citroën GroupWe decided the license production for the purpose of saving ininvestment and human resources.
« Automatic Transmission Production Plan »Place ofproduction
Valenciennes

FranceItems
ProducedRelevant
brandsPSA
Valenciennes Plant(France)
FF 6-speed AutomaticTransmission(Annually 300,000units per line)
Peugeot, Citroën, DS5

(4) Increased Assembling Capability of
AW Mizunami
AW Mizunami Co., Ltd.
Location

Mizunami, Gifu Prefecture

Established in

November 2017

Mizunami, Gifu Prefecture[First project (determined in October 2017)]
Newlyinstalledline

Assembly of FF 8-speed AutomaticTransmission (400,000 units per line)
Machining the Automatic Transmission
components

Capitalinvestment

21.4 billion yen

Start ofproductionAssembly of Automatic Transmission: Feb.2019
Machining of components: Dec. 2018

Further increase of capability is planned.
Expandedsection

Newly installed line

Planned to produce 300,000 units

Capital investment

9 billion yen

Start of production

Planned to start in 20196II Development Strategy for Electrification
1. Development Strategy for Improving Lineup ofElectrified Products
We will advance product development omnidirectionally by utilizing the technological bases
which were developed for Automatic Transmission and the 2-motor HV.

MarketFeatures

EV unitBeing
developedeAxle

Being mass
produced /Being
developed• Small-capacity type for Prius was high-powered forthe large cars and SUVs.
• Change to the PHV is possible by adding on the rear
section later.

Being mass
produced• Advantageous for the small and medium-sized carssuch as Prius.
• Excellent in cost performance and fuel efficiency
when driving urban areas.

1-motor HV
Transmission

Being
prepared formass
production• Torque converter was replaced with a combinationof a motor and a clutch.
• Advantageous for the high-torque vehicles such as
the large cars, SUVs, etc.
• Fuel efficiency when cruising at high speed andhigh torque at the time of starting acceleration.
• Possible to reduce investment by using the existing
facilities for production of Automatic Transmissions.

Mild HV

AutomaticTransmission

Beingconsidered• Mild HVs can be produced by adding belts,
alternators and starters to the AutomaticTransmissions and they can be sold also in themarket for 48V.

Gasolinepowered vehicle

AutomaticTransmission

Being mass
produced• Main products that take a global market share of17%.

PHV
Strong HVElectrified vehicle

Status ofdevelopment• Unitized for EVs by increasing power of the eAxle
and adding the system control.
• Developed by the driving and braking control
system containing steering and regenerative
cooperating braking system.

EV/FCV

Conventional

Product lineup

2-motor HVTransmission

PHV・HV7

2. Initiatives for Development of 1-motor HV
Conventional AutomaticTransmission unit

1-motor HV unit
Added

Motor
T/A

8-speedAutomatic
Transmission

T/A

8-speed AutomaticTransmission

Added
Abolished

Torque converter

Enginedisconnection
clutch• Sporty drive style that provides a feeling of direct operation and good fuelefficiency when driving at high speed.
• A combination of “Automatic Transmission + motor + engine disconnection
clutch” improves fuel efficiency drastically at the time of EV driving.
• Existing production facilities can be utilized for production of the AutomaticTransmission section.

8

3. Initiative for Development of eAxle< Structure of eAxle >Maximum torque: 2400 Nm
Maximum generating power: 106 kW

Motor(High-efficiency watercooled IPM motor)

Speed reducer(Compact speed reducer
based on the strength design
dedicated to motors)

4WDHighperformance< Concept of development of the series >Largecapacity Highly functional4WD
 Development ofPHVIntermediatecapacity
Small capacity(Already massproduced)
Compact carMid-size
SUVpassenger car Mini-van
Compact SUV< Example of Installation of the System >• As a PHV: It can be used as the electric-powered system for PHVs byadding to the rear section.
• As a 4-wheel drive: Contributing to powerful and high-quality drive ofpremium SUVs.

9

III Market Trend and Sales Targets

1. Forecast of Global Market Trend of Powertrain
Precondition

Progress of the CAFE standards in various countries is asplanned and compliance with the standards has been achieved.

Pattern 1 (Ratio of EVs: 10%)

Pattern 2 (Ratio of EVs: 20%)(Source: Surveys by Deloitte, IHS and Aisin Seiki )Pattern 3 (Ratio of EVs: 30%)
Ratio of conventional AutomaticTransmissions increases.

Ratio of strong HVs increases.
(10 million units)(10 million units)

Strong HV(10 million units)

Strong HVStrong HV
Mild HV

Mild HVBlue frames:
Automatic
Transmissionbased
powertrains

Mild HV

[FY]

[FY]

[FY]

Market for the Automatic Transmission-based powertrains does not change largely
regardless of the changes in the ratio of Evs in 2030.
102. Sales Plan for Powertrain Business
Steadily shifting the business structure to electrification and growing furtherPrecondition

Pattern 2 (Ratio of EVs: 20%)

(10,000 units)

EV/FCV

1,320

Strong HV

980

Launching the EV units early
onto the market by utilizing theelemental technologies for HVs.
Capturing demands bylaunching the 1-motor HVs inaddition to the 2-motor HVs.

AutomaticTransmission(Mild HV)

Automatic
Transmission/CVT

'17

'20

Maintaining the market sharesof Automatic Transmissions
and CVTs in FY2020.

[FY]
‘25
‘30
（年度）'25見込'30見込
forecast forecast

113. Powertrain Business’s Sales Targets
For the powertrain business, the production system has been established and thedevelopment strategies have been oriented.
We will attain achievements steadily from now.
Consolidated sales /Sales target of the powertrain business
operating profit ratio(trillion yen)(trillion yen)

2.2

6.5%

6.4%

3.9

4.0

'17'182.5

2.1
Others
Body
Chassis& Safety
Powertrain

'17

'18

'20

'25

'30

[FY]
（年度）

'20

'30 [FY]（年度）

12