Financial Information: Annual Report 2004

	Industry and Company Overview

<NSK’s Presence in the Global Bearing Market>

Competition in the Global Market for Rolling Bearings (NSK's Estimate)

• Major industry player
Since its establishment in 1916, NSK has contributed significantly to the ongoing development of the Japanese bearing industry. The Company has accomplished this by advancing and commercializing a wide variety of bearings, from standard ball bearings to customized bearings with specialized applications, such as automotive bearings. NSK is one of the world’s leading manufacturers, alongside such major players as AB SKF of Sweden, the INAFAG Group of Germany, and The Timken Company of the U.S. With particularly high market shares in standard ball bearings and automotive bearings, NSK currently holds 35% of the total Japanese bearing market and 13% of the global market.

<Expanding Our Global Operations and Business Domain>

• Maximizing the synergy of core technologies to meet the global requirements of customers
NSK, realizing early on that the world economy would one day be borderless, began its overseas expansion in the 1960s. Currently engaged in production, sales, and R&D in Japan, the Americas, Europe, and Asia, NSK has established an organization capable of rapidly responding to customers’ changing requirements. In addition to our mainline bearing business, we have expanded our businesses to include automotive components and precision machinery and parts, utilizing our expertise in tribology (friction control technology), precision positioning, and electronics technologies. As a result, NSK today enjoys a long-established presence in its business fields and offers a world-class lineup of products and services.

<NSK’s Global Alliances>

• Establishing global alliances with the objective of enhancing competitiveness
NSK has and will continue to actively pursue alliances in product areas with mature markets. By establishing alliances, economies of scale can be achieved, resulting in increased cost-competitiveness. In the area of automotive bearings, for example, we recently established a joint venture for making tapered roller bearings with Timken in China. The new manufacturing plant, located in the historic city of Suzhou, started production in January 2004. In the area of automatic transmission components, we continue to strengthen our competitiveness by maintaining and developing our relationship with BorgWarner Inc. (U.S.), a relationship established in the 1960s.