Financial Information: Annual Report 2002

(Click on the figure to open a window for an enlarged image.)

(Click on the figure to open a window for an enlarged image.)

Half toroidal CVTs were first commercialized worldwide by NSK in 1999. This year, they were installed in the new Nissan Skyline models. Demand for CVTs is expected to pick up in 2005-2006 and to meet this demand, we are currently focusing on developing technology related to 2-mode CVT systems, such as the Power Split CVT. The goal will be to ultimately develop a CVT system that is more compact, more powerful and more efficient. This will broaden the range of CVT applications, from small-sized to large-sized vehicles, and eventually contribute to increased sales.

To increase profitability, we will continue the 2nd phase of our "Business Restructuring Program" as follows:

1. Increase cost competitiveness by reducing procurement costs.
2. Introduce an intra-company bidding system to determine the optimum manufacturing base
3. Withdraw from non-core businesses including manual steering systems and constant velocity joints
4. Restructure the steering column business by spinning off the business unit in Japan and by reorganizing the European business through plant integrations or closure.
5. Increase sales of strategic productselectric power assisted steering (EPS) systems, CVTs and electric linear actuators for automotives.

EPS, a core product of our automotive components business, is experiencing a sharp increase in demand especially in Europe. Last year, in order to respond more efficiently to the market and to speed up our strategic decision-making process, we spun off our EPS business to form NSK Steering Systems Co., Ltd. We are also planning to integrate the design and production divisions of our steering column and steering joint businesses with the new company to strategically expand our role as a global supplier of steering systems. This will enable us to reinforce our global management of these businesses. We will focus on acquisition of large-scale orders to further improve profitability by strengthening our R&D activities and global production and supply system.

Conventional hydraulic vehicle control systems are being increasingly replaced with electric and "Drive-by-Wire" systems. To take advantage of this trend, NSK is concentrating on developing electric linear actuators by drawing on our ball screw technology. Current production covers only ball screws used for hydro-static CVT speed control actuators. However, as there are numerous application possibilities, efforts to develop this technology for use in engines, transmissions and brakes are already underway (refer to the chart below). We are trying to commercialize complete actuator units as well as ball screws for actuators. We will continue to focus on developing new products that can be launched in 2005.