Our Financial Results
We have announced our financial results for the first quarter of the fiscal year ending March 31, 2025.
During the quarter, Japanese auto sales declined year-over-year due to the certification issue. There was a temporary decline in auto sales in North America in June, due to a cyber-attack on a software company used by auto dealers. However, the impact on Japanese auto dealers operating there was minimal, and auto sales in North America remained generally firm. Japanese automakers in China continue to face challenges, a trend that has persisted since last year.
In North America, the share of sales obtained by EVs remained at 7.0% of total new car sales. In Europe, however, EV sales have been on a downward trajectory since their peak of 15.4% in 2022, and they reached 11.2% during the current quarter. The growth of EV sales is decelerating in China, although it is up 8% from the previous year. While our medium-term management plan was based on an anticipated continuation of robust EV sales growth, the reality has been that sales have been stagnant for the past six months. For the time being, it is essential to monitor EV sales closely and consider modifying our strategy in accordance with situations.
We were successful at capturing demand for those of our products that are used there in North America to manufacture automobiles and generators, and that overcame the negative impact of lower domestic demand. Furthermore, the weak yen helped us secure 10% year-on-year growth in net sales. Consequently, both operating income and ordinary income increased. The reduction in net income was attributable to a one-time negative deferred tax accounting factor resulting from fluctuations in the dollar/peso exchange rate.
We anticipate during the second quarter to see a gradual normalization of domestic car sales as recovery from the certification issue takes place. Furthermore, we also anticipate robust sales of our products in North America to continue, with further depreciation of the yen.
We have been preparing for the transfer of the production of mirror-finished surface valves from Honda Motor Co. Ltd., as part of a new sales expansion project. We completed installation of the first two production lines on schedule and began shipping products on June 28 of this year. The remaining two lines are currently being prepared for production and shipping at the end of August. So we anticipate that the transfer of the entire production process will be completed in September, and will soon start contributing to increased profits. In light of the aforementioned assumptions, we have revised our second quarter forecast upward. However, we have left the full-year forecast unchanged, due to the current lack of clarity on a number of fronts, including the impact of foreign exchange rates and the outcome of the U.S. presidential election. We will disclose the revised forecast promptly if we determine that the accuracy of our assumptions has increased and that a revision is necessary.
Here are the financial results for the first quarter of this fiscal year.
We would like to ask our shareholders for their continued understanding and support in the days ahead.
