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Business Strategy of Automotive SystemsBusiness Strategy of Automotive Systems-- Actions for 2010 Actions for 2010 --
December 17, 2003Taiji HasegawaExecutive OfficerPresident & Chief Executive Officer, Automotive SystemsHitachi, Ltd.
-1-
Automotive SystemsAll Rights Reserved, Copyright (C) 2003, Hitachi, Ltd. -2-
1 Automotive Products Business in Hitachi
2 Market Environment & Hitachi’s Business Strategy
3 Actions for Future Growth Market
4 Summary
Table of Contents
Automotive SystemsAll Rights Reserved, Copyright (C) 2003, Hitachi, Ltd. -3-
1 Automotive Products Business in Hitachi
2
3 Actions for Future Growth Market
4 Summary
Table of Contents
Market Environment & Hitachi’s Business Strategy
Automotive products business is one of the targeted businesses.
New Era Lifeline SupportSolutions
New Era Lifeline SupportSolutions
Global Products IncorporatingAdvanced Technology
Global Products IncorporatingAdvanced Technology
April 2003: The group name was changed from “Automotive Products”to “Automotive Systems.”
Automotive Products Business in HitachiExamples of Targeted Businesses in “i.e. HITACHI Plan II ”
SAN/NAS storage solutionsbusinessBiomedical business
Urban redevelopment business
Strategic outsourcing business
Railway systems business
µ-chip solutions business
HDD business
Automotive products businessAutomotive products business
Semiconductor productionequipment business
Battery business(lithium-ion batteries for automobiles,fuel cells for mobile devices, etc.)
Automotive SystemsAll Rights Reserved, Copyright (C) 2003, Hitachi, Ltd. -4-
Hitachi has more than 70 years experience in automotive products business.1930Began developmentof electrical equipmentfor vehicles
1964 1968Electronic Fuel Injection System(Response to emissions regulations)
1970s 1985-
Automotive SystemsAll Rights Reserved, Copyright (C) 2003, Hitachi, Ltd. -5-
Reasons to Focus on Automotive Products Business
Founded Automotive Products Div.Established Sawa Works
Began overseasproduction
Reasons to now focus on automotive products business
Tighter Regulations onEnvironment & Safety
Further Development ofElectric-Powered & Computerized Vehicles
Engine PowertrainMechanical/Hydraulic ControlUnidirectional Communications
Electric PowertrainElectronic Control (X-By-Wire)High-Speed/Large-Capacity, Interactive Communications
Motor and inverter controls, semiconductors, IT, Motor and inverter controls, semiconductors, IT, HDDsHDDs, new materials, etc., new materials, etc.
We will combine our technologies and know-how for hardware and software to provide system solutions for technical issues related to the automotive industry.
Automotive SystemsAll Rights Reserved, Copyright (C) 2003, Hitachi, Ltd. -6-
1 Automotive Products Business in Hitachi
2
3 Actions for Future Growth Market
4 Summary
Table of Contents
Market Environment & Hitachi’s Business Strategy
Automotive SystemsAll Rights Reserved, Copyright(C) 2003, Hitachi, Ltd. Automotive SystemsAll Rights Reserved, Copyright (C) 2003, Hitachi, Ltd. -7-
(million units/year)
1995 20102000 2005
50.057.4 60.7
65.7
Japan
North America
Europe
Others
China
Source: “Automotive Years Hand Book 2002-03” and Hitachi estimates from several production forecasts
Vehicle Production Trend by 2010
CAAGR*(1995 2010)1.8%1.8%
Due to the market growth in China, production isexpected to reach 65.7million units in 2010.
(million units/year)
1995-2010CAAGR
Total 50.0 57.4 60.7 65.7 1.8%Others 6.8 7.7 9.5 11.3 3.4%China 1.4 2.1 5.0 6.2 10.4%
Europe 17.3 19.8 20.2 21.2 1.4%N. America 14.4 17.7 16.1 17.2 1.2%
Japan 10.1 10.1 9.9 9.8 -0.2%
20101995 2000 2005
CAAGR*(1995→2010)
3.4%3.4%
10.4%10.4%
1.4%1.4%
1.2%1.2%
--0.2%0.2%
Growing Worldwide Vehicle Production
*CAAGR:Compound AverageAnnual Growth Rate
Automotive SystemsAll Rights Reserved, Copyright(C) 2003, Hitachi, Ltd.
Targeted Areas of Hitachiapprox. 37 trillion yen
Automotive Products Market (Worldwide)
Our business areas will expand in the near future through the further development of electric-powered & computerizedvehicles.
Engine-RelatedComponents
Electrical Equipment& Electronic Parts
Wire Harnesses/AutomotiveInstrumentation
Drive Trains,Transmissions& Steering Gears
Suspensions& BrakesCar Audios
Auto Bodies
Air Conditioners
(trillion yen/year) Others
19.1
10.8 5.1
12.7
5.0
11.3
1.42.9
1.8
(2002)70 trillion yen
Automotive Products Market and Targeted Areas of Hitachi
Automotive SystemsAll Rights Reserved, Copyright (C) 2003, Hitachi, Ltd. -8-Source: “Japanese Automotive Parts Industry ’01/02” and Hitachi estimates from several reports
Automotive Systems
2006-
InformationEnvironment
Safety&Comfort
DIG
SULEV
Clean EnvironmentClean Environment
2004
2002
2000
42V
Auto MT
X-by-Wire
Reduction of COReduction of CO22
ACC
Telematics
ITSITSLarge-CapacityCommunications
Hybrid Electric Vehicle
Electric Vehicle
Fuel CellElectric Vehicle
AT
VICSCar Navi.゙VDCABS
BBWSBW
ABS: Anti-Lock Brake System AT: Automatic Transmission ACC: Adaptive Cruise Control BBW: Brake By WireMT: Manual Transmission SBW: Steer By WireSULEV: Super Ultra-Low Emission Vehicle VDC: Vehicle Dynamics ControlVICS: Vehicle Information and Communication System
All Rights Reserved, Copyright(C) 2003, Hitachi, Ltd.
ITS Advanced Vehicle Control
LAN
Source: Hitachi estimates from several reportsAutomotive SystemsAll Rights Reserved, Copyright(C) 2003, Hitachi, Ltd.
Market Needs and Technology TrendsE
nviro
nmen
tS
afet
yIn
form
atio
n
Market Needs Technology Trends
Exhaust Emissions
Fuel Consumption
vs Reg. in 1983HC: 1/40NOx: 1/20
1995 201023% improvement
SafetyPrecautions
Fatal Accidents-50%
Convenience& Comfort
・Heavy Traffic1/5
・AdvancedCruise Assist
・Ubiquitous
Collision AvoidanceCollision Avoidance
Automotive SystemsAll Rights Reserved, Copyright (C) 2003, Hitachi, Ltd. -9-
Reduction of Braking DistanceReduction of Braking Distance
Regeneration/CooperationRegeneration/Cooperation
(year)
Vehicle InformationSystem
Drive Control System
Electric PowertrainSystem
Engine ManagementSystem
Engine ControlDirect Injection forGasoline & Diesel Engines
Automotive Systems
1
2
3
4
Focusing Area: - “3 Segments / 4 System Businesses”En
viro
nmen
tSa
fety
Info
rmat
ion
Market Needs
Exhaust Emissions
Fuel Consumption
vs Reg. in 1983HC: 1/40NOx: 1/20
1995 201023% improvement
Safety Precautions
Fatal Accidents-50%
Convenience & ComfortHeavy Traffic 1/5Advanced
Cruise AssistUbiquitous
Automotive SystemsAll Rights Reserved, Copyright (C) 2003, Hitachi, Ltd. -10-
Technologies to Meet Needs
Hybrid ElectricVehicles
Fuel CellElectricVehicles
Motors,Inverters,Batteries,etc.
Adaptive Cruise Control,Lane Keeping
Electro Mechanical BrakeElectric Power Steering,Suspensions
Onboard NavigationSystems, VICS
Telematics, InteractiveCommunications
Hitachi’s Activities
ITS Advanced Vehicle C
ontrol
Source: Hitachi estimates from several reports
Automotive SystemsAll Rights Reserved, Copyright(C) 2003, Hitachi, Ltd.
Automotive Parts Suppliers Electronic ManufacturersEnvironment
Automotive Parts Suppliers IT CompaniesSafety
Information
1 2
3 4
Semiconductors, Functional Materials & Components
Players in Each Business Areas
Automotive SystemsAll Rights Reserved, Copyright (C) 2003, Hitachi, Ltd. -11-
Automotive SystemsAll Rights Reserved, Copyright(C) 2003, Hitachi, Ltd.
Safety
1 2
3 4
Semiconductors, Functional Materials & Components
Business Operation System for ITS Advanced Vehicle Control
Automotive SystemsAll Rights Reserved, Copyright (C) 2003, Hitachi, Ltd. -12-
ITS AdvancedVehicle Control
Information
Hitachi Hanshin ElectricHitachi UnisiaAutomotive
Hitachi Shin-KobeElectric Machinery
RenesasTechnology
Hitachi UnisiaAutomotive
Tokico HitachiXanavi
InformaticsHitachi
Hitachi GlobalStorage Technologies
HitachiCable
Hitachi PowderedMetals
HitachiMetals
HitachiChemical
:Hitachi, Ltd. and Automotive systems’ subsidiary and affiliated companies
Environment
Automotive SystemsAll Rights Reserved, Copyright(C) 2003, Hitachi, Ltd.
Hitachi, Ltd.Research &
Development Group
Advanced Research Laboratory
Leading-Edge BasicStudies
SystemsDevelopmentLaboratory
SystemsSoftware
Research and Development
Production EngineeringResearch Laboratory
Production Engineering
Mechanical EngineeringResearch Laboratory
Mechatronics
Hitachi ResearchLaboratory
Energy, Industrial Engineering,Environment,Materials
Central Research Laboratory
Information andTelecommunications
Automotive SystemsAll Rights Reserved, Copyright (C) 2003, Hitachi, Ltd. -13-
Holding of “Strategic Business Meeting” on regular basis[Aim] To promote strategically important products to be developed and commercialized as a project
Holding of “Automotive Workshop” on regular basis by Hitachi Research Laboratory and Mechanical Engineering Research Laboratory[Aim] To exploit the possibility of collaboration among the laboratories for more efficient investment
and competitive differentiation
Automotive SystemsAll Rights Reserved, Copyright(C) 2003, Hitachi, Ltd. Automotive SystemsAll Rights Reserved, Copyright (C) 2003, Hitachi, Ltd. -14-
1 Automotive Products Business in Hitachi
2
3 Actions for Future Growth Market
4 Summary
Table of Contents
Market Environment & Hitachi’s Business Strategy
Including the consolidated sales and operating profit of “automotive related business” of Shin-Kobe Electric Machinery(subsidiary of Hitachi Chemical) and Tokico(equity method affiliate).Therefore, the definition is different from that in segment information of Hitachi’s consolidated accounting.
MissionOur mission is to create new value for people, vehicles and society, and we aim to make this dream come true.
We will achieve our missions for the future one by one;a world with clean air, a safe society with no accidents, and convenient living space even in transit through our system solutions for auto manufacturers.Strategic Goal (Fiscal 2010):
Automotive SystemsAll Rights Reserved, Copyright(C) 2003, Hitachi, Ltd.
Sales of 1 Trillion Yen, Operating Profit Margin of More Than 7%
Automotive Systems’ Mission and Vision
Vision
Automotive SystemsAll Rights Reserved, Copyright (C) 2003, Hitachi, Ltd. -15-
Automotive SystemsAll Rights Reserved, Copyright(C) 2003, Hitachi, Ltd.
Electronic Fuel Injection Systems: No. 2No. 2**
(Engine Control Units, Injectors, Fuel Pumps Electronic Throttle Bodies, Air Flow Sensors, etc)
Hydraulic Power Steering: No. 3No. 3**
Variable Valve Timing Units: No. 22 **
Collision Warning Systems: No. 2No. 2**
Starters, Alternators: No. 3No. 3**
Market Position (Fiscal 2002)
Engine Management Systems: Engine Management Systems: 22nd nd in domestic marketin domestic market
Pistons: No. 2 No. 2 **
Top share in theglobal market
Source:Hitachi estimates from several research reportsAutomotive SystemsAll Rights Reserved, Copyright (C) 2003, Hitachi, Ltd. -16-
Navigation Systems: No. 3No. 3**
(OEM market)
* In Domestic Market
(EP 250)
[250]
[330]
[250][170]
All Rights Reserved, Copyright(C) 2003, Hitachi, Ltd. Automotive Systems
Strategic Goals for 2010[[Fiscal 2010 Sales ofFiscal 2010 Sales of11 Trillion Yen, Operating Profit Margin of More Than 7Trillion Yen, Operating Profit Margin of More Than 7%%](*2)](*2)
Automotive SystemsAll Rights Reserved, Copyright (C) 2003, Hitachi, Ltd. -17-
Sales
(billion yen/year)
3 Segments / 4 System Businesses
FY2002(Results)
FY2003(Forecast)
FY2005(Plan)
FY2010(Goal)
290(365) (370)(*1)
(*2)[500]
(*2)[1 trillion yen]
Vehicle Information Systems
Electric Power TrainSystems/ElectricalEquipment
Drive Control Systems
Engine ManagementSystems
(*1): From 2nd half of fiscal 2002, Hitachi Unisia sales are included.(*2): Including the consolidated sales and operating profit of “automotive related business” of Shin-Kobe Electric
Machinery (subsidiary of Hitachi Chemical) and Tokico(equity method affiliate).Therefore, the definition is different that in segment information of Hitachi’s consolidated accounting.
Automotive SystemsAll Rights Reserved, Copyright(C) 2003, Hitachi, Ltd.
MPI Systems(Port Injection)
Direct Injection Systems
Reduction of exhaust emissions: Euro VReduction of CO2
Environmental Regulations
(1) Engine Management Systems
Automotive SystemsAll Rights Reserved, Copyright (C) 2003, Hitachi, Ltd. -18-
Strategy Focusing on Direct Injection Gasoline Control SystemFocusing on Direct Injection Gasoline Control System
Gasoline Engine SystemsGasoline Engine Systems
1
2
02002
0.5
1.5
2005 2010(year)
Source: Hitachi estimates from several research reports
(trillion yen/year)
1.65
24.6%
CAAGR(2002 2010)
Utilization of simulation and combustionanalysis from nuclear power generationand gas turbines
HitachiHitachi’’s Core Competences Core Competence
Proposal of optimized Proposal of optimized combustion conceptcombustion concept
Improvement ofImprovement of developmentdevelopmentspeed by 30%speed by 30%
Mixture FlameFuel Spray
Spark Plug Intake Port
CombustionChamber
Injector
Strategy by Business(Product)
MarketTrend
Business(Product)
RegionCustomer
Automotive SystemsAll Rights Reserved, Copyright(C) 2003, Hitachi, Ltd.
(1) Engine Management SystemMain ProductsMain Products
InjectorEngine ControlUnit
High-PressureFuel Pump
ElectronicThrottle Body
Air Flow Sensor
Automotive SystemsAll Rights Reserved, Copyright (C) 2003, Hitachi, Ltd. -19-
NOx Catalyst
Piston
Valve TimingControl
No. 1 ShareWorldwide
Strategy by Business(Product)Business(Product)
RegionCustomer
Automotive SystemsAll Rights Reserved, Copyright(C) 2003, Hitachi, Ltd. Automotive Systems
500
02002
250
2005
Hybrid Electric Vehicle
Electric Vehicle Fuel CellElectric Vehicle
509Ratio of total vehicleproduction in 2010: 7.7%
2010
ULEV, SULEV, ZEVUltra-Low Emission VehicleSuper Ultra-Low Emission VehicleZero Emission Vehicle
(2) Electric Powertrain SystemStrategy
Automotive SystemsAll Rights Reserved, Copyright (C) 2003, Hitachi, Ltd. -20-Source: Hitachi estimates from several research reports
NextNext--GenerationGenerationEco Friendly AutomobileEco Friendly Automobile HitachiHitachi’’s Core Competences Core Competence
Global Expansion of Products for Hybrid Electric VehicleGlobal Expansion of Products for Hybrid Electric Vehicle
(year)
(10kilo units/year)
Environmental RegulationsAbility to incorporate both Ability to incorporate both engine control and motor controlengine control and motor control
Ability to provide motor, inverterAbility to provide motor, inverterand battery (land battery (lithium-ion secondarybattery) as a SYSTEM) as a SYSTEM
Application of motor technologies since Hitachi’s formation and inverter technologies for bullet trains
EngineEngineControlControl
Motor Motor ControlControl
EnergyEnergyManagementManagement
Strategy by Business(Product)
MarketTrend
Business(Product)
Business(Product)
RegionCustomer
Automotive SystemsAll Rights Reserved, Copyright(C) 2003, Hitachi, Ltd.
Drive System for Next-Generation Hybrid Electric VehicleDrive System for Next-Generation Hybrid Electric Vehicle
(2) Electric Powertrain System
Automotive SystemsAll Rights Reserved, Copyright (C) 2003, Hitachi, Ltd. -21-
Lithium-ion SSecondary BatteryMotor InverterCollaboration betweenCollaboration betweenHitachi Research LaboratoryHitachi Research Laboratory& & ShinShin--Kobe Electric MachineryKobe Electric MachineryKnowKnow--how for structure/controlhow for structure/controlMaterial technologyMaterial technology(positive electrode/(positive electrode/
battery electrolyte, etc.)battery electrolyte, etc.)
Small & compactSmall & compactDevelopment & production Development & production of exclusive semiof exclusive semi--conductor componentconductor componentsuch as such as ““power devicepower device””and and ““IGBTIGBT”” withinwithinHitachi GroupHitachi Group
Small & compactSmall & compactHighHigh--density wiredensity wire
Lithium-ion secondary battery: decided to construct the pilot line(production at Sawa Works(Japan) which produces motors & inverters)
Strategy by Business(Product)Business(Product)
Business(Product)
RegionCustomer
Main ProductsMain ProductsMain Products
Battery-LessElectric 4WD SystemBattery-LessElectric 4WD System
Lithium-Ion Secondary BatteryLithium-Ion Secondary Battery
Automotive Systems
Main ProductsMain ProductsMain Products2002
mass production
All Rights Reserved, Copyright(C) 2003, Hitachi, Ltd. Automotive SystemsAll Rights Reserved, Copyright (C) 2003, Hitachi, Ltd. -22-
(2) Electric Powertrain System
Water-Cooled Alternator
Controller Motor
2002:Yamaha Motor “Passol”
2000:Nissan “Tino Hybrid”
2003:Mazda “DEMIO”
2002:Nissan “MARCH”
Belted Alternator Starterwith Integrated Inverter
2002mass production
Strategy by Business(Product)Business(Product)
Business(Product)
RegionCustomer
Simplified Hybrid System for idle-stoppingSimplified Hybrid System for idle-stopping
Automotive SystemsAll Rights Reserved, Copyright(C) 2003, Hitachi, Ltd.
Strategy
(3) Drive Control System
Advancing R&D to Realize Advancing R&D to Realize ““XX--ByBy--WireWire””HitachiHitachi’’s Core Competences Core Competence
・・Sensor FusionSensor Fusion(Millimeter wave radar & Camera)(Millimeter wave radar & Camera)
・・Integrated Circuit for Integrated Circuit for Millimeter Wave RadarMillimeter Wave Radar
・・Communication Software for Communication Software for XX--ByBy--WireWire
Applying highly dependable control technologyfostered in railway business and semiconductortechnology attaining high-speed communications to automotive business
・・Drive Control Technology and Drive Control Technology and Actuation Technology for Realizing Actuation Technology for Realizing BrakeBrake--ByBy--Wire and SteerWire and Steer--ByBy--WireWire
MarketTrend
NextNext--GenerationGenerationDrive Control SystemDrive Control System
Strategy by Business(Product)
1
2
2002
0.5
1.5
(trillion yen/year)
Suspension
Brake
Steering
FailSafe Equipment
20050
2010
CAAGR*(2002→2010) 12.3%1.79
-23- Automotive SystemsAll Rights Reserved, Copyright (C) 2003, Hitachi, Ltd.
Business(Product)
RegionCustomer
(*)CAAGR:Compound Average Annual Growth RateSource: Hitachi estimates from several research reports
Automotive SystemsAll Rights Reserved, Copyright(C) 2003, Hitachi, Ltd.
Millimeter WaveRadar (76GHz) Hitachi
Main ProductsMain ProductsMain Products
Image Processing Camera Hitachi
Electric Power SteeringHitachi Unisia
Automotive
EMB (Electro-Mechanical Brake)Hitachi, Hitachi Unisia Automotive, Tokico,Hitachi Cable
ABSHitachi Unisia
Automotive
Electronic BoosterTokico
:under development
All Rights Reserved, Copyright (C) 2003, Hitachi, Ltd.
Wide Angle Short Range Radar[For pre-crash](76GHz)Hitachi
Semi-Active SuspensionTokico
(3) Drive Control System
Business(Product)
RegionCustomer
Automotive Systems-24-
Strategy by Business(Product)
ACC(Adaptive Cruise Control)Unit Hitachi
Automotive Systems
Application ExamplesApplication Examples
All Rights Reserved, Copyright(C) 2003, Hitachi, Ltd.
In 2003: Isuzu“GIGA”
In 2002: Nissan “CIMA”
Future Vehicle ConceptFuture Vehicle Concept
76GHzMillimeter Wave Radar
ImageProcessing Camera
Electronic Booster
In 2003: Subaru “LEGACY”
All Rights Reserved, Copyright (C) 2003, Hitachi, Ltd.
(3) Drive Control System
76GHzMillimeter WaveRadar
Business(Product)
RegionCustomer
Automotive Systems-25-
Strategy by Business(Product)
ACC Unit
Automotive Systems
(4) Vehicle Information SystemVehicle Information System
2001 2005 2010
298
(billion yen/year)
7471,388
443
1,7151,190
3,103
TelematicsService
OnboardEquipment
All Rights Reserved, Copyright(C) 2003, Hitachi, Ltd.
Aiming for Global de Facto Standard in Social Aiming for Global de Facto Standard in Social Infrastructure and Onboard EquipmentInfrastructure and Onboard Equipment
(year)
Providing total solutions for Providing total solutions for onboard equipment and portal serviceonboard equipment and portal service
Applying high-speed data communication technology (EV-DO) and storage technology (HDD) to automotive business
Vehicle Information Vehicle Information
Providing worldProviding world’’s first servers first server--assistedassistednavigation and car portal servicenavigation and car portal servicefor Nissan: for Nissan: ““CARWINGSCARWINGS””VRMVRM(Vehicle Relationship Management)(Vehicle Relationship Management)
All Rights Reserved, Copyright (C) 2003, Hitachi, Ltd.
Strategy
MarketTrend HitachiHitachi’’s Core Competences Core Competence
Source: Surveys of Nomura Research Institute/Yano Research Institute/Roland Berger
Business(Product)
RegionCustomer
Automotive Systems-26-
Strategy by Business(Product)
Drive Route AssistTMNissan “CARWINGS” UnitAutomotive SystemsAll Rights Reserved, Copyright(C) 2003, Hitachi, Ltd.
Main ProductsMain Products and Servicesand Services
Car Navigation SystemsCar Navigation Systems
Telematics:Portal & Onboard EquipmentTelematics:Portal & Onboard Equipment
Next-Generation Telematics ServicesNext-Generation Telematics Services
HDD Navigation System(Xanavi Informatics)
VRM
MassProduction
All Rights Reserved, Copyright (C) 2003, Hitachi, Ltd.
(4) Vehicle Information SystemVehicle Information System
MassProduction
in 2002
Business(Product)
RegionCustomer
Automotive Systems-27-
Strategy by Business(Product)
Main Customers of Hitachi Automotive Systems Gr.
SubaruIsuzu SuzukiGM FiatOpel
GM Gr.
Saab
Toyota Gr.
Toyota Daihatsu Hino
DaimlerChrysler
DaimlerChrysler Gr.
VW AudiAudi
VW Gr.Renault/Nissan Gr.
NissanRenault NissanDiesel
PSA Gr.
PSA Hyundai KiaKia
Hyundai Gr.
BMW
BMW
JaguarVolvoFord
Ford Gr.
Mazda
Mitsubishi
All Rights Reserved, Copyright(C) 2003, Hitachi, Ltd. Automotive Systems
Honda
Honda
Sales by customers in fiscal 2003 (Forecast)Sales by customers in fiscal 2003 (Forecast)
Renault/Nissan
55%GM Gr. 20%Ford Gr. 5%
Others15%Honda 5%
Strategy Sales Promotion for Global Top 10 CarmakersSales Promotion for Global Top 10 Carmakers
All Rights Reserved, Copyright (C) 2003, Hitachi, Ltd.
Business(Product)
RegionCustomer
Automotive Systems-28-
Strategy by Customer
All Rights Reserved, Copyright(C) 2003, Hitachi, Ltd. Automotive Systems
Business(Product)
RegionCustomer
“Development,”“Production,”and “Sales” bases in North America, Asia and Europe to meet global customers’ requirements
ProductionSalesTechnical CentersLicensing of Technology
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North, Central and South America
11
North, Central and South America
11Asia/Oceania26
Asia/Oceania26
Europe/Africa14
Europe/Africa14
As of Nov. 2003
All Rights Reserved, Copyright (C) 2003, Hitachi, Ltd.
Strategy by Region (1) Global Operations
Automotive Systems-29-
All Rights Reserved, Copyright(C) 2003, Hitachi, Ltd. Automotive Systems
■
November 2002Production and salesControl units, Air flow sensors, etc.
December 2003Production and salesStarters
Hitachi HighlyAutomotive Parts(Shanghai) Ltd.August 2002
Production and sales Power steering parts, etc.
Guangzhou Hitachi Unisia Automotive Parts Co., Ltd.
All Rights Reserved, Copyright (C) 2003, Hitachi, Ltd.
Expand sales in growing market of ChinaEstablish production, sales, local technical support and procurement organization Early establishment in rapidly growing market of China
to expand business
Strategy
Company FoundationDescription of businessProduction items
Hitachi Automotive Products (Suzhou) Ltd.
October 1995Production and salesAlternators, starters, etc.
Changsha Hitachi Automotive Products Co., Ltd.
Strategy by Region (2) ChinaBusiness(Product)
RegionCustomer
Automotive Systems-30-
All Rights Reserved, Copyright(C) 2003, Hitachi, Ltd. Automotive Systems
Wolfsburg
NeckarsulmHRA-Poland
Milan
Frankfurt
Sachsen Works
Paris
Bari
With tighter environmental regulations, rapid growth in environmental products market is expected.Prompt rollout of products using Hitachi’s advanced technology
e.g. high pressure fuel pumps for direct gasoline injection systems
Strategy
Bolton
July 2003Production, sales and
Engineering support
Hitachi Automotive SystemsEurope GmbH
Company FoundationDescription of businessProduction items
April 1997Production and salesElectronic products
(control units, etc.)
Hitachi Automotive ProductsEurope,Ltd.
Strategy by Region (3) Europe
November 2003 (start of construction)
Production and salesMechatronics products
(high pressure fuel pumps, etc.)
Hitachi Automotive SystemsEurope GmbH.Sachsen Works
All Rights Reserved, Copyright (C) 2003, Hitachi, Ltd.
Business(Product)
RegionCustomer
Automotive Systems-31-
Main Customers of Hitachi Automotive Systems Gr.Strategies by Region (4)Expansion of Overseas Business
Fiscal 2003 (Forecast)Fiscal 2003 (Forecast) Fiscal 2010 (Target)Fiscal 2010 (Target)
Aiming to Expand Overseas Sales Raitoof 32% in Fiscal 2003 to More Than 50% in Fiscal 2010
In Japan68%
Overseas 32%(including China 1%)
Automotive SystemsAll Rights Reserved, Copyright(C) 2003, Hitachi, Ltd.All Rights Reserved, Copyright (C) 2003, Hitachi, Ltd.
In Japan50%
Overseas 50%(including China 6%)
Business(Product)
RegionCustomer
Automotive Systems-32-
All Rights Reserved, Copyright (C) 2003, Hitachi, Ltd.
1 Automotive Products Business in Hitachi
2
3 Actions for Future Growth Market
4 Summary
Table of Contents
Automotive Systems-33-
Market Environment & Hitachi’s Business Strategy
Automotive SystemsAll Rights Reserved, Copyright(C) 2003, Hitachi, Ltd.
SummaryAutomotive technology will develop significantly in the electricAutomotive technology will develop significantly in the electrical and al and electronic fields, corresponding to the requirements of the maelectronic fields, corresponding to the requirements of the market, such as rket, such as environmental and safety regulations andenvironmental and safety regulations and the improvement of convenience.the improvement of convenience.
Focusing on the Focusing on the ““3 Segments / 4 System Businesses3 Segments / 4 System Businesses””to realito realize ITS advanced vehicle controlze ITS advanced vehicle control
LongLong--term strategic goal:term strategic goal:Sales of 1 trillion yen, operating profit margin of more than 7%Sales of 1 trillion yen, operating profit margin of more than 7% (Fiscal 2010)(Fiscal 2010)
4) 4) Vehicle Information SystemVehicle Information System
1.1.EnvironEnviron--mentment
1) 1) Engine Management SystemEngine Management System
2) 2) Electric Powertrain System Electric Powertrain System
3) 3) Drive Control SystemDrive Control System2. 2. SafetySafety3. 3. InforInfor--
mationmation
ITSITSAdvancedAdvancedVehicle Vehicle ControlControl
Motor and inverter controls, semiconductors, IT, HDDs and new maMotor and inverter controls, semiconductors, IT, HDDs and new materialsterialsHitachi provides solutions based on a broad range of technologieHitachi provides solutions based on a broad range of technologies:s:
-34- Automotive SystemsAll Rights Reserved, Copyright (C) 2003, Hitachi, Ltd.
One of the Targeted Businesses
Including the consolidated sales and operating profit of “automotive related business” of Shin-Kobe Electric Machinery(subsidiary of Hitachi Chemical) and Tokico(equity method affiliate).Therefore, the definition is different from that in segment information of Hitachi’s consolidated accounting.
All Rights Reserved, Copyright(C) 2003, Hitachi, Ltd. -35-
Cautionary Statement
Certain statements contained in this document may constitute forward-looking statements which reflect management’s current views with respect to certain future events and financial performance based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Words such as “anticipate,” “believe,” “expect,” “estimate,” “intend,” “plan,” “project” and similar expressions which indicate future events and trends may identify forward-looking statements. Actual results may differ materially from those projected or implied in the forward-looking statements and from historical trends. Further, certain forward-looking statements are based upon assumptions of future events which may not prove to be accurate.
Factors that could cause actual results to differ materially from those projected or implied in any forward-looking statements and from historical trends include, but are not limited to:
- rapid technological change, particularly in the Information & Telecommunication Systems segment and Electronic Devices segment;
- uncertainty as to Hitachi’s ability to continue to develop and market products that incorporate new technology on a timely and cost-effective basis and to
achieve market acceptance for such products;
- fluctuations in product demand and industry capacity, particularly in the Information & Telecommunication Systems segment, Electronic Devices
segment and Digital Media & Consumer Products segment;
- increasing commoditization of information technology products, and intensifying price competition in the market for such products;
- fluctuations in rates of exchange for the yen and other currencies in which Hitachi makes significant sales or in which Hitachi’s assets and liabilities are
denominated, particularly between the yen and the U.S. dollar;
- uncertainty as to Hitachi’s ability to access, or access on favorable terms, liquidity or long-term financing, particularly in the context of limited credit
availability currently prevailing in Japan;
- uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact of fluctuations in product demand and/or exchange rates;
- general economic conditions and the regulatory and trade environment of Hitachi’s major markets, particularly, the United States, Japan and elsewhere in
Asia, including, without limitation, continued stagnation or deterioration of the Japanese economy, or direct or indirect restriction by other nations of
imports;
- uncertainty as to Hitachi’s access to, or protection for, certain intellectual property rights, particularly those related to electronics and data processing
technologies;
- uncertainty as to the success of alliances upon which Hitachi depends, some of which Hitachi may not control, with other corporations in the design and
development of certain key products; and
- uncertainty as to general market price levels for equity securities in Japan, declines in which may require Hitachi to write-down equity securities it holds.
These factors listed above are not exclusive and are in addition to other factors that are stated or indicated elsewhere in this report, or in other materials published by the Company.