To our shareholders/Investors

During the interim consolidated accounting period under review, the global economy remained generally resilient, although uncertainties persisted due to factors such as developments in trade policies. In China, demand remained firm, supported by continued vehicle replacement incentives and expanding exports to regions other than the United States. In Japan, while the employment and income environment improved, the recovery was moderate, with weakness remaining mainly in export-related sectors due to uncertainty in the trade environment. In the United States, personal consumption remained solid, although upward pressure on prices persisted. 

In the automotive sector, which is the primary market for our Group, domestic sales and exports in China continued to perform strongly. In contrast, demand growth slowed in the ASEAN region, leading to sluggish sales. In the United States, some European and American manufacturers experienced weak sales performance. 

In this business environment, our group’s performance in the current interim consolidated accounting period declined year on year in terms of net sales, mainly due to a decrease in the automotive exterior business. Operating income and ordinary income also decreased year on year due to the impact of the product mix. Meanwhile, as gains on the sale of assets were recorded as extraordinary income, profit attributable to owners of the parent increased year on year.

We are steadily advancing our 2026 Medium-Term Management Plan, which is based on a two-wheeled management strategy combining our existing Powertrain Business and the Frontier Business as a new growth area.

In the Powertrain Business, we are strengthening production capacity in markets where demand for engine-equipped vehicles is expected to grow. At the same time, we are systematically introducing high-efficiency production lines to streamline our global manufacturing structure.

In the Frontier Business, in order to address the growing demand for lightweight solutions driven by the shift toward EVs, we have decided that one of our consolidated subsidiaries will acquire an equity stake in a company possessing aluminum die-casting technology, with the aim of expanding our aluminum business. Furthermore, we have been selected as one of five major participating companies in the Tokyo Metropolitan Government’s “Open Innovation Promotion Program Utilizing Assets Held by Large Corporations (Tokyo Cross Lab),” and we expect to collaborate with startup companies in next-generation mobility and advanced industrial sectors going forward.

In addition, to create a more accessible environment for investors to hold and trade our shares, we implemented a stock split and strived to improve capital efficiency and enhance shareholder returns through measures such as reducing low-profitability assets and share repurchases. Going forward, we will continue to strengthen our earning capacity and further improve capital efficiency, while placing ongoing emphasis on dialogue and communication with our shareholders and investors.

We sincerely appreciate the continued support and patronage of our shareholders.