Introducing Our Achievements in Enhancing Competitiveness, Developing Innovative Technologies and Bolstering Our Manufacturing Capabilities

Review of FY2018

In fiscal 2018, revenue amounted to a record high ¥3,908.9 billion, an increase of ¥346.3 billion in comparison with fiscal 2017, due primarily to brisk sales worldwide of automatic transmissions (AT) and automotive body parts, coupled with contributions from the newly consolidated Art Metal Mfg.
A record high was also posted for operating profit, with a result of ¥253.8 billion, an increase of ¥25.2 billion in comparison with fiscal 2017. This was due to a growth in sales, the effects of activities to strengthen the Group’s earnings structure and foreign currency transaction gains, despite unfavorable factors that included a rise in raw material cost prices and an increase in depreciation and amortization costs.
In fiscal 2019, we are working to achieve our targets of revenue of ¥3,980 billion, an increase of ¥71.1 billion in comparison with fiscal 2018, and operating profit of ¥255 billion, an increase of ¥1.2 billion.

Revenue
Revenue
Consolidated Revenue Breakdown by Product
Consolidated Revenue Breakdown by Product

Consolidating the Total Capabilities of the Group with the Virtual Company (VC) System

The automotive industry is currently experiencing various changes, including the progressive evolution of zero emission and automated driving technologies, as well as the widespread popularization of connected cars. Consumer lifestyles are also changing, with cars shifting from being viewed as something you “own” to something you “use.” Competitors and rules in the industry are also changing drastically. Companies with no previous connection to the automotive industry, such as IT and electrical appliance manufacturers, have now entered the shared automotive marketplace. Another major challenge is the continued tightening of regulations on fuel economy and exhaust gas emissions.
Amid these environmental changes, in April 2017, we introduced a Virtual Company (VC) System as a means of enhancing the competitiveness of the Group as a whole. Using this system, we are consolidating various Group companies according to business lines, concentrating the technological capabilities developed by each of them, and engaging in product development, production and sales as if each line of business were a single unified company. As our four virtual business companies work to improve the competitiveness of our existing business operations, we are also advancing development efforts in three areas of focus: zero emissions, automated driving and connected cars, while aiming to make further leaps ahead.

Overview of VC System
Overview of VC System

Auto Parts Business

Powertrain

Responding to the increase in demand for AT and increasing production capabilities to 13.2 million units

In our Powertrain business, given the fact that demand for automatic transmissions (AT) is expected to continue increasing through 2020, we made the decision to carry out 10 projects to augment our production capabilities, primarily in Japan and China. Efforts are now underway in these projects, with a view to achieving a production capacity of 13.2 million units in order to meet the global increase in demand for AT.
From 2020 onward, we believe that accelerating our response to vehicle electrification—the shift toward electric vehicles (EV)—will become an urgent priority due to the major toughening of regulations on fuel economy and exhaust gas emissions in countries around the world. To that end, we are working to enhance our product lineup, such as by accelerating the development of EV-oriented technologies including our 1-Motor Hybrid Transmission and eAxle.

▶For more details regarding AISIN’s Powertrain Business Growth Strategies, please refer to pages.

Chassis & Vehicle Safety System

Enhancing the competitiveness of our brake-related products business

In our Chassis & Vehicle Safety System business, in order to build an efficient development and production framework for our brake-related business, we have reorganized our operations into a business operating structure centered mainly around ADVICS and seek to build optimal production capabilities to enhance our competitiveness.
With regard to electronically controlled brake systems, we have transferred development and production functionality from DENSO Corporation to ADVICS and consolidated Aisin Seiki’s production capabilities with ADVICS. With regard to basic braking systems, in August 2017 the decisions were made for Hosei Brake Industry to become a consolidated subsidiary of ADVICS, and for ADVICS to acquire Nisshinbo Brake Inc.’s drum brake operations. We are also consolidating our disk brake and passenger car drum brake operations.
Meanwhile, looking to the future, aside from the increase in demand for technologies such as cooperative regenerative brake systems (accompanying the shift toward EV) and electronically controlled brake systems used in automated driving, it will also be necessary for us to respond to an increase in demand for motors and electronic devices such as electronic control units (ECU). Therefore, from a perspective also including our ICT & Electronics business operations, the decision was made to expand the ADVICS Handa Plant, which manufactures brakes, and to carry out the simultaneous reorganization of Aisin Seiki’s Handa Plant and Handa Electronics Plant, which produce vehicle safety system and electronics-related products. In this way, we are working to achieve medium-to-long-term growth with respect to future market expansion.

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Technological development case study: The evolution of our parking assist systems

Working toward the goal of resolving parking-related issues such general inconvenience, waiting times and accidents, we are advancing the development of systems for achieving completely unmanned parking. This system can be controlled by remote from the user’s home, and is achieved through increasing the precision of our parking assist systems and the evolution of route learning.
Through the further advancement of these basic technologies, we are also developing automated valet parking systems, which will automatically drive the car to a parking space and park it after the driver and passengers have exited the vehicle at the parking entrance.

Automated valet parking in a dedicated parking space
Automated valet parking in a dedicated parking space

Body

Enhancing the competitiveness of our body-related products business

In our Body business at Aisin Seiki, Aisin Sin’ei and Shiroki Corporation—the three companies that make up our Body Product VC—we are working to increase the efficiency of our production framework using the advantage of scale and to rebuild our supply network, seeking to make maximum effective use of the resources and capabilities of each individual company. We are also conducting “best mix” activities, in which we thoroughly compare the equipment and production processes at each company to create the best possible combination, as well as working to enhance our competitiveness by achieving further cost reductions. For example, in the production of door frames, we have combined Aisin Seiki’s high-speed fabrication with Shiroki’s parts conveyance technologies to develop an automated production line which has enabled us to improve and double our production speed and to achieve space and cost reductions of 10% and 15%, respectively. Moving forward, we will continue working to further increase the efficiency and sophistication of our production processes.

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Systems development toward achieving the realization of hospitality services

AISIN Group is working to achieve the goal of providing automotive hospitality services by combining technologies in which it has advanced the electrification of various car body-related products (such as power slide doors) with internal and external recognition technologies and navigation and positioning information. We are currently developing safety door technologies, such as door systems that protect passengers by blocking door operation when a hazard (such as another vehicle approaching from the rear) is detected as the passenger is trying to exit the vehicle, and door systems that automatically control the opening and closing of doors to prevent collisions by detecting the proximity of neighboring vehicles or obstacles.

ICT & Electronics

Enhancing competitiveness through innovation in production

In our ICT & Electronics business we are developing and manufacturing ECUs, sensors, actuators and other electronic components to control car navigation systems, AT, braking systems, power sliding door systems and various other systems to support comfortable lifestyles for car users. The fundamental electronic technologies that support the development of systems for car electrification, automated driving, hospitality services and similar technologies are expected to become even more important in the future, and the numbers of electronic components installed in cars are expected to increase.
In view of these market trends, and as a step toward shared standardization of electronic components, we have developed and introduced a “simple-slim” assembly line by condensing our existing 30m-long assembly line (comprised of various generalpurpose equipment) into a highly-compact 1.5m line. The new assembly line achieves four times the production capacity for the investment, along with major space-saving benefits, enabling us to enhance the competitiveness of our ECU production capabilities.

Conventional assembly line comprised of general-purpose equipment
Conventional assembly line comprised of general-purpose equipment

Strengthening our foundation with a view to next-generation development

As a means of strengthening our development foundation to support our future competitiveness, we have established the Daiba Development Center, located in the Tokyo Waterfront City district. The center serves as base of operations for advanced development, with a primary focus on AI technologies, as well as information gathering and public relations activities.
We have also formed a capital partnership agreement with Idein Inc., a company engaged in the development of image recognition technologies in the field of AI. Additionally, we have established Fenox Venture Company XX, L.P., in Silicon Valley in the United States as a fund for seeking out and discovering start-up companies from around the world.
In the field of advanced development for automated driving, we have invested in Toyota Research Institute Advanced-Development. Moving forward, we plan to pursue collaborative technological development efforts together with Toyota and DENSO.

Daiba Development Center
Daiba Development Center
Fenox Venture Company XX, L.P.
Fenox Venture Company XX, L.P.,

Main products adopted by car manufacturers

Toyota LEXUS LS500, LS500h
Rapid Vehicle Height Adjustment Air Suspension System

This system adjusts the height of the vehicle when people get in and out, an example of AISIN “hospitality services” that offer users greater comfort and a more pleasant driving experience. We have also improved the durability of the system and implemented noise reduction technology during adjustment operations.

Pneumatic Seat Systems

With 28 seat support adjustment variations, the system contributes to improving hold and user comfort. The seats also include a “refresh” function, in which high-performance air bladders are inflated to apply pressure and support the user’s body.

Toyota Camry
TNGA FF 8-Speed Automatic Transmission

Multistage structure and the adoption of a compact, highperformance torque convertor help to achieve a direct-feeling driving experience. The transition also contributes to improving fuel economy due to its reduced weight and compact size.

Renault Megane RS
Active Rear Steering System

The system provides support by actively steering the rear wheels, enabling accurate cornering when driving at high speeds and easy handling when driving at lower speeds.

Sunroofs

AISIN Group is expanding its sales of products aimed at Chinese domestic automobile manufacturers, offering products with the appropriate external appearance to cater to local needs, as well as reducing the numbers of components and overall weight.

Guangzhou Automobile GS8
Panoramic Sunroof
Geely Automobile Emgrand GS / JAC Motors Refine R3
Tilted and Inner Sunroof

Lifestyle & Energy Related Business

Supporting enriched lifestyles

In our Life & Amenity business, we have opened the COCON AOYAMA concept shop on Aoyama Street, Tokyo, in order to further increase recognition of our ASLEEP brand of beds and bedding. The shop introduces new products including our FINE REVO & Airweave mattresses.
In our energy-related business, we have focused our attention on the extent to which we can optimize energy costs. As part of this effort, we have developed a hybrid air-conditioning system combining a gas heat pump and electric motor-powered heat pump in a joint development effort together with Tokyo Gas Co., Ltd., Osaka Gas Co., Ltd. and Daikin Industries, Ltd. Moving forward, we will continue to contribute to energy saving and reducing environmental impact through the widespread popularization of these air conditioning systems.

COCON AOYAMA concept shop
COCON AOYAMA concept shop
Smart Multi hybrid air-conditioning system
Smart Multi hybrid air-conditioning system