Results for Second Quarter of the Fiscal Year Ending March 31, 2024
The shortage of semiconductors, which had long cast a shadow over the automotive industry, was resolved with each passing year and had virtually no impact on the industry in 2023. Accordingly, automobile production in Japan was streamlined. Automobile sales in North America continue to be strong. In China, automobile sales recovered significantly in 2022; however, Japanese, European and American automakers continue to experience sluggish sales due to the rapid spread of electric vehicles. We see an urgent need to shift our product portfolio to focus on electric vehicles at our bases in China as well. Sales increased 16.9% compared to the same period of the previous year due to the generally recovering market environment, the depreciation of the yen in the foreign exchange market and other factors.
In terms of profitability, the cost structure reforms focusing on the break-even point, which we have been promoting since the COVID-19 pandemic occurred, are bearing fruit. We have been minimizing the number of people involved in a single product by improving work procedures in the production process, reviewing layouts and division of work, and utilizing karakuri mechanisms and automation systems. We have also been working to reduce investment by diverting equipment currently owned by the Group. The decrease in the break-even point through these activities, coupled with the increase in sales, enabled the Group to record positive operating income, recurring income, and net income in the first half of this fiscal year.
Progress of “2224 Medium-Term Management Plan”
We have established the “10-year Business Plan,” a long-term management plan with the target year of 2030 as a milestone toward the realization of the “2040 Vision,” as well as business, financial, and human resource strategies to realize the Plan. As an action plan for these three strategies, we are promoting the “2224 Medium-Term Management Plan.” One of the major themes of the “2224 Medium-Term Management Plan” is “shifting the business portfolio to predominantly parts for electric vehicles” in light of changes in the external environment. Currently, the sales ratio of parts for electric vehicles is approximately 19%. We are carrying out sales activities with the goal of increasing the ratio to 55% by FY2030. The Ahresty Group has plants in China, where the electric vehicle market is expanding remarkably, and in North America, where market expansion is expected. We will strive to meet customer needs by producing quality parts for electric vehicles for these two major markets simultaneously and with short delivery times, thereby increasing the sales ratio of parts for electric vehicles as planned to approximately 30% by FY2025 and 36% by FY2026.
Expansion of the Range of Products Made by Die Casting
We are proceeding with the die casting of vehicle body components in two major directions. The first is the integrated production of the underbody using an ultra-large die casting machine, which has been adopted by Tesla and Toyota Motor Corporation. We are continuing to mature the technology required for ultra-large die castings, cooperate with manufacturers in their development efforts, and conduct surveys to determine when aluminum die casting will be adopted for car body components. We will identify customer trends to assess the necessity, timing and locations of its introduction. The second is a multi-material body where steel and aluminum stamping parts and die cast parts are used in the respective most appropriate areas. Die cast parts and stamping parts have different functions, and we believe that if they can be successfully combined, functional improvement and reduction of weight and environmental burden of the vehicle body can be achieved. In the joint development project with G-TEKT Corporation that started in July 2022, development is underway to propose concept products to customers. In both directions, it is necessary to join aluminum die castings with other materials, and we have completed development of related technology for joining dissimilar materials and heat treatment technology using lasers. From multiple angles, we are working to expand the range of automobile parts made by die casting.
Although the business environment is changing rapidly, we will continue to strive to enhance our corporate value.
We would like to ask our stakeholders for their further support.
President ＆COO
Shinichi Takahashi
