Outlook of Japanese Automotive Industry The 39th KAICA-JAPIA meeting in Seoul March 29, 2017 Masashi Oshita, Vice President & Executive Managing Director Japan Auto Parts Industries Association = JAPIA 1 1. OEMs 2. JAPIA members 3. Topic - Mexico 2 1. OEMs 3 Vehicle monthly sales in Japan aren’t stable (thousand unit) (%) 800 10.0 Registered car Micro car % to the previous year 7.4 7.6 700 5.0 2.9 600 1.6 The sales of vehicles in 0.0 277 -0.5 -0.4 Japan are recovering -1.2 -2.2 -1.9 231 -2.2 from the bottom in the 500 -4.1 past few months. -4.6 -4.9 -5.0 -6.6 -6.4 400 -7.5 -7.6 -7.6 174 -7.6 160 194 -8.6 163 176 143 133 134 145 -10.0 133 164 300 -11.2 139 149 130 145 136 126 108 113 121 116 112 But, total sales in CY -14.7 -14.5 -15.0 2016 was ▲1.5% to 200 418 405 317 the previous year. 288 306 -19.1 279 282 275 288 282 273 265 237 241 240 239 238 224 223 243 -20.0 100 198 210 211 213 0 -25.0 Jul-15 Jul-16 Jan-15 Jan-16 Jun-15 Jun-16 Oct-15 Oct-16 Apr-15 Apr-16 Feb-15 Sep-15 Feb-16 Sep-16 Dec-16 Dec-15 Aug-15 Aug-16 Nov-15 Nov-16 Mar-15 Mar-16 May-16 May-15 Source: JAMA 4 Production, sales, export and import of Japan (thousand unit) (%) 12,000 5.0 4.7 Domestic vehicle 9,943 10,000 9,628 9,630 9,774 4.0 production and 9,278 9,204 sales in 2016 were less than 2015. 8,398 8,000 3.0 6,000 5,369 5,562 2.0 4,956 1.7 5,375 5,046 4,841 4,970 4,464 4,674 4,634 4,803 1.4 4,465 4,578 4,210 Export in 2016 was 4,000 1.0 better than domestic sales, but not so vivid. 0.5 0.5 2,000 0.0 0.0 -0.5 182 205 241 280 290 285 294 0 -1.0 2010 2011 2012 2013 2014 2015 2016 Production Sales Export Import GDP Note: GDP 2016 is estimated by IMF Source: IMF, Cabinet Office & JAMA 5 Population pyramid & driver’s license holders Ｍａｌｅ Female Ｍａｌｅ Female Ｍａｌｅ Female Ｊａｐａｎ ＵＳＡ Ｆｒａｎｃｅ Driver’s License holders of young generation in Japan 30,000 16-19 old 20-24 old 25-29 old 30-34 old In accordance with decrease 25,000 8,842 of young generation, 9,157 20,000 9,247 8,823 license holders are also 8,133 falling. Who buy vehicle ! 15,000 7,560 7,156 6,868 8,917 8,323 7,696 10,000 7,216 6,886 5,578 6,217 5,798 6,872 5,000 6,410 6,143 5,848 5,406 5,056 4,820 4,764 1,727 Source: UN & NPA of Japan 0 1,574 1,410 1,276 1,128 1,064 1,040 974 2001 2003 2005 2007 2009 2011 2013 2015 6 Young generation buys vehicles ? JAMA’s questionnaire for young generation in 2016 said... (Young generation= 30 years old or less, engaged and no vehicle) ➢ Are you interested in Vehicles ? = None and little interest are 69% ! ➢ Do you want a vehicle ? = None and little interest are 59% ! Visitors of Tokyo motor show & vehicle sales (thousand unit) (thousand people) 8,000 7,524 2,500 6,865 6,725 7,000 6,467 5,861 5,906 5,828 5,852 2,000 6,000 5,354 5,376 2,019 5,046 1,811 4,609 5,000 4,210 1,500 1,523 1,515 1,512 4,000 1,386 1,420 1,426 1,277 3,000 1,000 Vehicle sales 903 2,000 843 813 No. of visitors 500 614 1,000 0 0 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 7 Source: JAMA OEMs export by region Export depend on U.S. Market… (thousand unit) 6,000 Total 4,841 5,000 4,803 4,464 4,674 4,465 4,578 4,614 425 448 407 390 393 188 379 375 168 179 134 4,000 396 148 346 183 168 362 309 358 306 293 3,000 1,727 1,886 1,585 1,887 1,662 1,749 1,898 2,000 936 995 848 709 744 737 818 1,000 583 419 525 584 625 684 500 576 572 572 540 560 529 586 0 2010 2011 2012 2013 2014 2015 2016 Asia Middle East Europe US & Canada M. & S. America Africa Oceania Source: JAMA 8 OEMs overseas production by region (thousand unit) Productions in Asia & U.S. are expanding stably 25,000 Asia Middle East Europe US & Canada M. & S. America Africa Oceania Production in Japan 18,890 18,094 92 20,000 17,476 91 180 90 16,756 217 242 1,876 106 1,820 15,823 1,591 101 232 248 1,284 15,000 13,181 13,382 1,234 5,021 119 93 4,786 4,823 206 233 1,029 4,540 982 4,253 9,630 1,705 9,943 1,668 3,390 3,068 1,654 515 10,000 1,537 437 8,398 1,484 0 596 9,628 0 9,774 1,410 9,278 9,204 1,356 0 0 5,000 9,472 10,012 8,500 9,056 9,112 7,127 7,547 0 2010 2011 2012 2013 2014 2015 2016 Note: Overseas production 2016 is estimated by growth rate between Jan. and Jun., 2016 Source: JAMA 9 No. of productions of Japanese OEMs by major countries (CY 2016) Total No. of Production of Japanese OEMs in 2016 = 28,183 thousand units (1.6% increased to CY 2015) in Europe Oversea production = 18,979 thousand units 1.6 million in North America 6.4 million Russia: 158 TOYOTA is planning new U.K.: 826 plant Canada: 1,014 Czech: 86 Hungary: 138 China: 3,910 Japan: 9,204 Spain: 155 U.S.A.: 3,979 Turkey: 137 Pakistan: 213 France: 255 S. Korea: 136 Mexico: 1,390 India:2,003 Taiwan: 264 Thailand: 1,670 Philippine: 96 TOYOTA is Venezuela: 5 planning new plant Malaysia: 230 Indonesia: 1,095 in Asia 9.6 million Brazil: 354 S. Africa: 106 Argentina: 105 in South America Unit: thousand 0.5 million Source: JAMA & MarkLines Data: CY 2016 Note: Data of S. Africa and Venezuela are of CY 2015 10 2. JAPIA members 11 Production of JAPIA members in Japan & overseas (trillion JP yen) Overseas production will overtake domestic production 25.0 in the near future. Overseas 19.8 20.0 18.9 Production 18.3 17.8 17.8 4.1 3.8 3.4 3.3 3.3 15.0 13.9 10.0 10.2 8.9 15.7 14.5 14.9 14.5 15.1 6.2 6.1 5.0 0.0 2010 2011 2012 2013 2014 Production for Domestic Market Production for Export Overseas Productuin Data: in FY Source: JAPIA 12 Operating profits of JAPIA members by region Profits from domestic production are going (billion JP yen) down and overseas productions are much more important for the members. 1200 1000 331.4 344.1 800 25.7 28 70.2 236.5 130.6 600 273.7 6.2 304 47.4 10.6 400 220.2 17.8 133.1 13.4 665.2 73 584.7 17.1 461 200 296.2 272.3 260.6 0 2010 2011 2012 2013 2014 2015 Japan N. & S. America Europe Asia Data: FY 2015, as of March 2016 Source: JAPIA Note: Figures are by inquiries from consolidated accounts of listed members and percentage of reply is about 55% to 65% 13 Overseas production of JAPIA members by region (trillion JP yen) 18 16.4 ASEAN China Other Asia U.S. & Canada & Mexico Europe Others 16 0.4 1.5 13.6 14 Production in the U.S., Canada & 0.4 Mexico are expanding more than 1.4 12 that of in China and in ASEAN. 10.1 6.4 10 9.0 0.5 5.0 1.1 0.4 8 1.0 1.4 5.9 6.0 5.8 3.2 6 3.1 1.2 0.2 0.4 0.3 0.7 0.6 0.6 0.5 3.5 0.5 2.7 2.0 2.0 1.7 4 2.1 1.7 0.3 0.3 0.3 2 1.4 1.4 1.6 2.9 3.2 2.3 2.7 1.3 1.3 1.3 0 2009 2010 2011 2012 2013 2014 2015 Data: FY, as of March 2016 Source: JAPIA 14 No. of overseas production sites of JAPIA ｍembers As No. of production sites, China is No. 1 country. Because not only large companies, but In 52 countries (No. of companies) also middle and small sized member 1,989 companies are manufacturing in this country. 1,949 1,986 2000 1,857 103 103 Asean 1,752 99 90 1,645 213 210 215 China 1,598 86 199 76 Other Asia 1,425 74 190 1500 182 390 393 177 370 U.S. & Canada & Mexico 62 345 326 163 Europe 1,075 319 335 219 213 209 214 42 208 1000 Others 351 109 194 187 700 527 535 534 311 182 513 21 482 69 444 462 416 177 294 500 245 3223 121 152 184 145 496 519 535 537 19 430 460 9 31 373 409 25 118 315 2 189 47 103 0 52 0 1984 1989 1994 1999 2004 2009 2010 2011 2012 2013 2014 2015 Data: FY 2015, as of March 2016 Source: JAPIA Note: Total includes other regions 15 No.