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“Focus on the Future”

Terry Helgesen Senior Vice President

DENSO International America, Inc.

University of Michigan

Transportation Research Institute

“Focus on the Future” Conference

April 19, 2013

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1

1. Denso History & Profile

Contents

2. Challenges of the Global Auto Industry

3. Solutions

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1. DENSO Establishment 2

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1. DENSO History: 1949 – 2000 3

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DENSO History: 2001 - Current 4

126,000

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5 DENSO Today

Capital US$2.3 billion (187.4 billion yen)

R&D investment

Employees 126,036

Net sales US$39.4 billion (3,154.6 billion yen)

( FY 2012, as of March 31, 2012 )

52.0%

Japan

16.0%

North America

11.8% Europe

18.4%

Asia-Oceania

1.8% Others

29.9%

24.9% 16.0%

9.7%

9.2%

7.3%

3.0% Sales Breakdown By Region By Product

Thermal

Powertrain Information

& Safety

Electronic

Electric

Small Motors

Others

US$3.7 billion (298.4 billion yen) 9.5% of net sales

Engineers 14,100

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Products

QR Code

Two-Dimensional Bar-code

Automotive

Non-Automotive

6

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7 Innovation - World’s First Products

’95 ’00 ’05 ’10

07

87 Car Navigation System （Digital map produced by CD-Rom format）

03

09

94 QR Cord

Millimeter-Wave Radar

Diesel Common rail system 95 11 TS Starter for S&S

11

Motor Generator

for HV

Inverter for HV

Passenger Vehicle Air Conditioning

System Using an Ejector

En

viro

nm

en

t S

afe

ty

Co

mfo

rt /

Co

nven

ien

ce

Motor

Generator

A Double-Sided cooling Power

Control Unit (PCU)

History of World First Products Across Product Areas

’15

12

Lithium-ion Battery Pack

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8

1. Global Growth of Auto Industry

World Challenges next 5 – 10 years

2. Pace of Technology Innovation

3. Rapid Globalization on the Auto Industry

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9 1. Challenges - Global Growth of the Auto Industry

(million vehicles)

0

20

40

60

80

100

120

2011 2015 2020

Advanced countries

Emerging countries

96

70

110 • 110 Million Vehicles are

expected in 2020.

•Vehicle number will be

doubled in emerging

countries.

Automotive Market Growth

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10 1. Challenges - Global Growth of the Auto Industry

Due to the increase of

Vehicles in emerging

countries, traffic fatalities

are expected to increase

significantly.

1,270

2,000

0

500

1,000

1,500

2,000

1990 2000 2010 2020

1,170

(thousand people)

Traffic Fatalities Worldwide

Increase of Motor Vehicle Fatalities

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11 2. Challenges – Powertrain & Fuel Efficiency

120

Powertrain Share

Forecast

100

20

40

60

80

0 2010 2015 2020

EV

Only ICE

HV

ICE+

Stop/Start

(million vehicles) (Source：DENSO)

• Fuel efficiency and

Electrification are the key

factors to meet 54.5 Café

regulations.

Fuel Economy

Requirements

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12

Information

Cloud

BATT Battery charge

Connect to

Smart phone

Smart grid

2. Challenges – Technology Changes

• Evolution of telecommunication

technologies

• connectivity between vehicles

and social infrastructure

Connectivity

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13 2. Challenges - Rapid Pace of Innovation

’95 ’00 ’05 ’10

07

87 Car Navigation System （Digital map produced by CD-Rom format）

03

09

94 QR Cord

Millimeter-Wave Radar

Diesel Common rail system 95 11 TS Starter for S&S

11

Motor Generator

for HV

Inverter for HV

Passenger Vehicle Air Conditioning

System Using an Ejector

En

viro

nm

en

t S

afe

ty

Co

mfo

rt /

Co

nven

ien

ce

Motor

Generator

A Double-Sided cooling Power

Control Unit (PCU)

’15

12

Lithium-ion Battery Pack

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14

1. Global Strategy

DENSO’S SOLUTIONS - next 5 – 10 years

2. Development Policy

3. Key Areas of Development

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14 1. Global Mid-term Strategy

Company that continues to grow

Global

Collaboration

Trust of customers and community members

Ideal Situation

Nimble

World-Class

Excellence

Three Fundamental

Principles

Ideal situations for FY2016 - 2020

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…DENSO related companies

（including engineering or software functions)

…Technical Center（ＴＣ）

DENSO is enhancing its global development

system to:

欧州Ｔ/Ｃ（1990年設立）

北米Ｔ/Ｃ（1986年設立）

北米

豪亜

中国

南米

インド

欧州

日本 Munchen （1990）

Detroit, U.S. （1986）

North America

Asia & Oceania

China

South America

India

Europe

Japan

Santa Barbara, Brazil

(2012) Delhi, India

(2012) Bangkok, Thailand

(2007)

Shanghai, China

(2013)

Aachen （2005）

• Develop products that meet customer’s needs in each region

• Cooperate development with regions on technology that is advanced or unique in the regions

• Enhance industry-government-academia cooperation worldwide

DENSO’s Core Technical

Centers

*(): Year of establishment

Korea Seoul, Korea

(2013)

1. Globalization of R&D - Global Technical Centers 16

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17 2. Development Policy

Development Strength

Create products from vehicle system standpoint

Thermal Powertrain

Information

& Safety Electronics

Environment Safety

Information HMI

Systems Business Units.

- Combine focus and strength to develop total system solutions

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18 3. Key Areas of Technology Development

Systems Integration for regional needs

- Environment -

EPA Cycle Real World Savings

High-pressure

pomp

Common Rail System

Injector

Inverter

Gasoline Direct injection

Variable Compressor

TS Starter for ISS Efficiency

Alternator

EV/EHV

More Fuel Efficiencies

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19 3. Key Areas of Technology Development

- Safety - - Information Services / HMI -

Core technologies for sensing, system

control, and HMI to develop advanced

safety technologies as a system supplier.

Laser radar

77GHz mm-wave radar

Surround Camera

Develop Technology to Anticipate the Drivers

Needs

Integrate various information and safety

systems in the cockpit, rather than developing individual components and systems.

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2010

Dual injector

2011

20MPa fuel pump & Injector

2011

TS starter for ISS

2012

Battery pack & cold storage system for ISS

Pace of Product Introduction Increasing

3. World First – New Technology Products 20

Latest World First Products

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Strategy in North America

How North American DENSO can contribute to the Global Growth

OEM

( Adopting Core Products to Regional Needs)

- Connectivity [V2X]

- R&D for Global Growth

Aftermarket

- New Business Unit

- Expand Main-Market business

- Product Breadth/Depth

Non-Auto

- Incorporate New NA

Technologies into DENSO’s

Global Business

- Human Machine Interface (HMI)

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