Demand for construction and mining equipment has remained in an short-term adjustment phase especially in our Strategic Markets (China, Latin America, Asia, Oceania, Africa, Middle East and CIS), as affected by slowing economic growth in emerging countries and slack prices of commodities. However, we believe it will expand in the long term, supported by growing population and urbanization rates on a global scale.

On the industrial machinery market, we expect demand will grow firmly, although with some ups and downs, in next few years, as capital investment should increase in our main client industries of automobile and semiconductor manufacturing industries.

Based on this understanding of market conditions, we are focusing our efforts on 1) Growth strategies based on innovation, 2) Growth strategies of existing businesses, and 3) Structural reforms designed to reinforce the business foundation. Specifically, we will accelerate the speed of growth by concerting efforts to sow the seeds for future growth and by capitalizing on our strength of IoT, even while demand for construction and mining equipment might remain sluggish.

By connecting our customers and distributors with our production sites, including suppliers, through our IoT, we are working to become an indispensable partner of our customers.

Growth strategies based on innovation

We will create new value and deliver it to customers' jobsite operations by developing DANTOTSU products, service and solutions, as we aggressively tap on external technologies through collaboration with academia and other industries based on our expertise manufacturing technologies.

Growth strategies of existing businesses

To promote the growth of our existing businesses, we will stay away from pricing competition and propose the reduction of lifecycle costs of construction and mining equipment as well as industrial machinery to our customers.

In addition to developing, producing and marketing new products, we will strengthen and expand our value chain consisting of the aftermarket business (parts and service), the rental-to-used equipment business and the retail finance business, in particular, as we leverage M&A and other schemes.

Structural reforms designed to reinforce the business foundation

Based on the stance of separating costs from growth, we will continue to aggressively cut down production costs and sustain an appropriate level of fixed costs, while investing in growth.