Message from the President

Hiroshi Mihara Regarding the results for the first half of fiscal year ending March 31, 2019, despite an increase in new orders in the mainstay automotive lighting equipment segment and a shift in automobile lamps to LED, the KOITO Group’s net sales decreased over the previous fiscal year. This is attributable to the status change of Shanghai Koito Automotive Lamp Co., Ltd. (“Shanghai Koito”) from a consolidated company to a company accounted for by the equity-method in the end of September 2017, and non-consolidation of Shanghai Koito in the end of March 2018.
 On the earnings front, although KOITO implemented rationalization in Japan and overseas, operating income and recurring profit decreased year on year due to the effect of non-consolidation of Shanghai Koito and increased R&D expenses.

 Regarding the outlook for the fiscal year ending March 31, 2019, despite the expansion of new orders and the market transition to LED automobile lamps in Japan and overseas, net sales are expected to decrease. This is attributable to non-consolidation of Shanghai Koito.
 On the earnings front, operating income, recurring profit are expected to decrease due to the effect of Shanghai Koito's non-consolidation, as well as an increase in R&D expenses.

 For the purpose of sales expansion of automotive lighting equipment in the mid- and long-term perspective, the KOITO Group is pursuing to reinforce its production capacity in the five major regions of the world (Japan, North America, Europe, China, and Asia); KOITO’s manufacturing subsidiary, NAL do Brasil, commenced operations in May 2018, and in 2019, KOITO is scheduled to commence operations in Malaysia. Moreover, KOITO will strengthen its development capability, and respond to the future changes in mobility, such as connectivity, autonomous driving, sharing, and electric vehicles.
 With a view to expanding market share, the KOITO Group will continue to strive to win orders, expand its production capacity, enhance productivity, reinforce its mutually complementary supply network, and establish business systems that can quickly respond to changes in the market, and promote compliance and corporate governance to establish an even more reliable corporation.

 Under our corporate message, “Lighting for Your Safety”, the KOITO Group, as an automotive lighting and electrical equipment manufacturer, is committed to create new value sought by customers. Moreover, we will continue to contribute to the development of the automotive industry and of the society through providing safe, reliable, and trustworthy products and services.
 As a leading automotive lighting equipment manufacturer, we will continue to develop the newest and the best technologies, improve the performance and quality of our products, promote training for employees to raise their performance and skills, as well as staying true to our basic stance to adopt the perspective of customers to supply products and services that meet their expectations.
 We would greatly appreciate your continuous understanding and support.
October 2018
President
Hiroshi Mihara