N America and China business drives Denso’s FY2015 growth

Denso Corp, the global automotive supplier of advanced technology, systems and components, announced its global financial results for the fiscal year ended March 31, 2015, a week ago.

While consolidated net sales totaled 4,308.8 billion yen (US$35.9 billion), a 5.2 percent increase from the previous year, consolidated operating income totaled 355.1 billion yen (US$3.0 billion), a 6.0 percent decrease from the previous year. Consolidated net income totaled 293.1 billion yen (US$2.4 billion), a 2.0 percent increase from the previous year.

"Denso’s sales increased due to an overseas production volume increase,” said Nobuaki Katoh, president and CEO of Denso Corp. “However, despite cost reduction efforts, an increase in production volume, R&D expenditures, and investment costs to strengthen future growth, there was a decrease in operating income."

In Japan, the market shift towards compact cars and the decrease of export sales led to a decrease in sales to 2,663.5 billion yen (US$22.2 billion), a 2.0 percent decrease from the previous year. The decrease in production volume and the increase in labour costs, and other expenses led to an operating income of 225.2 billion yen (US$1.9 billion), a 20.5 percent decrease from the previous year.

In North America, an increase in car production, boosted by the steady economic growth, led to an increase in sales to 966.5 billion yen (US$8.0 billion), an 18.4 percent increase from the previous year. As a result of the increase in production volume, the operating income totaled 38.7 billion yen (US$321.9 million), a 163.9 percent increase from the previous year.

In Europe, car production increased due to the recovery of the economic slump, which led to an increase in sales to 554.8 billion yen (US$4.6 billion), an 11.2 percent increase from the previous fiscal. Due to the increase in production volume, the operating income totaled 16.9 billion yen (US$140.5 million), a 36.6 percent increase from the previous year.

In Asia and Oceania, the increase of car production, mainly in China, resulted in a sales increase of 1,049.7 billion yen (US$8.7 billion), an 11.3 percent increase from the previous year. The increase in labour costs and the expenditure on production and R&D capability to strengthen future growth led to an operating income of 74.7 billion yen (US$621.8 million), a 4.9 percent increase from the previous year.

In other areas, mainly the South American region, including Brazil and Argentina, sales totaled 73.8 billion yen (US$614.2 million), a 0.7 percent decrease from the previous year. The operating income totaled 0.4 billion yen (US$3.4 million).

“For the new fiscal year, we expect sales and income to increase from the previous year. This is due to the increase in production volume overseas," said Katoh.