Financial Results Briefing for 3Q FY2021
February 2, 2021
AISIN SEIKI Co., Ltd.
Q1. In the 3Q results, are there any one-off factors that boosted profits in terms of both SG&Aand productivity, such as a temporary improvement due to an increase in production?
A1. We manage our fixed costs strictly as emergency and structural measures. For example, wehave been promoting the integration of functions that not only includes companies in Japan but
also overseas regional supervisory companies and research companies. These efforts arebeginning to produce results. In terms of corporate structure improvement, we have seen areduction in costs for 8-speed AT and have achieved profitability in North America, which hadlong struggled in terms of productivity. Our steady efforts have begun to appear in the figures.
Q2. How much semiconductor risk have you incorporated in your forecasts? If the situation
returns to normal next term, how will you do against the annual operating profit of 200
billion yen, which you have mentioned before?
A2. In addition to semiconductors, we have incorporated risks such as uncertainties in customers’plans, including a reactionary drop after the Chinese New Year and the shortage of containers.
As a result, we assume annual AT sales of 8.7 million.
We will make 60 billion yen of the 95 billion yen of emergency measures and structural reforms
permanent. Some of the remainder are fixed costs that were reduced in an emergency, so they
will disappear, but we believe we have enough structural strength to achieve 200 billion.
Q3. What is the breakdown of the +38.1 billion in sales fluctuation and +7.5 billion in fixed
costs & others of your full-year forecasts against the previous forecast?
A3. +28.1 billion in net sales, a little less than +4.0 billion in product mix, and +7.0 billion in production
on the back of full operation at production sites. For fixed costs & others, +3.0 billion is quality
costs, which is 7.0 billion compared to the 10.0 billion buffer in the previous forecast. There arealso reductions in integration-related costs.
SQ3. Are there any specific items estimated in quality-related costs?
SA3. We hope there will be no more of these.

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Q4. Is ADVICS seeing progress in quality improvement? Their presence should increase due
to electrification, but what is the situation?
A4. The quality side is beginning to settle as a result of incorporating manpower to introduce solidmeasures. In terms of margin, the transfer of control brakes has virtually completed, resulting in
an improvement in added value in internal manufacturing. We hope to maintain this level.
Cooperative regenerative brake systems and electric-assisted parking brake are the products weare looking forward to with electrification.
Q5. What is the fluctuation by market and customer of the +200,000 full-year AT sales (from8.5 million to 8.7 million)? Does the container risk specifically refer to Aisin’s containers?
A5. By market, Europe is +90,000, Asia and others +60,000, China +40,000, North America +20,000,
and Japan ±0. By customer, China’s local manufacturers are +90,000, other European
manufacturers +70,000, and VW +60,000. As for risks, we do not reflect individual risks but take
into account the reactionary drop after the Chinese New Year, the semiconductor impact and thecontainer shortage, among others.
Q6. What is the relationship between the 90 billion yen in structural reforms and the 45 billion
yen that you mentioned before for the integration with AW, etc.?
A6. 45 billion yen is the 15 billion yen which we expect to achieve this term ahead of schedule plus
the 30 billion we expect to achieve in and after FY2021. There is no change in this portion of thetarget. We hope to cover the emergency reductions and the resources for CASE with the 30billion yen integration effect in and after 2021. When we announced the figure of 45 billion yen,COVID-19 had not yet appeared. We had been implementing workstyle reforms and theutilization of digital technologies then, but they were somewhat challenging. As a result ofreviewing our work completely in the wake of the pandemic, we feel confident that we can domore than we assumed.
Q7. How fast do you think you can achieve the 30 billion yen integration effect in and after
FY2021?
A7. We hope to achieve it in 1 or 2 years. We will reduce overlapping fixed costs between AI and AW
not only through integration in Japan but also at overseas supervisory companies and researchcompanies. Since we cannot reduce fixed personnel costs in Japan rapidly, we will reduce themsystematically through measures such as refraining from replacing employees who haveretired.

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Q8. What specific efforts are you making in terms of additional improvements in 8-speed ATand North America?
A8. To thoroughly carry out the basics such as the “5 Ss.” We are beginning to see the results of theactivities we have been working on since around two years ago as the 3 core activities, which
include thorough enforcement of standard work. These have led to a reduction in costs oflosses.
Our costs were high initially at start-up due to specification changes in response to customers’
requests. We have been making cost reduction efforts by reviewing items to be improved indesign and production engineering. We have now achieved similar profitability as for the regular6-speed AT.
Q9. How do you calculate the percentage of sales of electrification products that contribute to
CO2 reduction, which is 13% in 2020 and more than 50% in 2030? What is the actual
amount of the 50% in 2030?
A9. The numerator is the sales of electrification products such as electric drivetrain units, electricWPs and regenerative brakes. The denominator is the total sales of related areas, which are thepowertrain, chassis & vehicle safety systems, and ICT & electronics businesses. We will specify
the actual amount of the 50% in 2030 and the sales mix in our medium-term plan going forward.
Q10. How should we view margins and fixed costs in considering AT for the next year andonward?
A10. In terms of fixed costs, we have been increasing the injection of resources into CASE while
reducing total fixed costs through emergency and structural measures. We expect to makeinvestments following the switch to 8-speed, HV, and EV. We will reduce administrative costs
through our integration with AW, all the while making investments for the future at the sametime. In terms of development costs, the costs for CASE are expected to increase from 30% in2018 to 50% in 2020. As for capital expenditure, we will increase investment with a focus oncooperative regenerative brake systems, electric driving units and motors going forward.
Q11. How do you view the future of China’s local manufacturers, based on the merger
situation, the progress of electrification, and internal manufacturing by customers?
A11. Since peaking in 2018, they have experienced the U.S.-China trade friction and the impact of
the coronavirus. We expect current levels to continue for some time, but we have been making
proposals to customers continuously such as on the timing of new vehicles. We believe it isimportant to bring our costs down to a level that can compete with internally manufacturedproducts.

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Q12. Can you achieve sales of electrification products that contribute to CO 2 reduction of 50%
while maintaining a 7% operating margin?
A12. In the near term, we will reap the benefits of the reduction in fixed costs, which is the result ofstructural reforms. 7% is the target for FY2023. In addition to drivetrain units, we will provide awide range of electrification products, such as electric WPs and cooperative regenerative brakesystems.

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