CHUO SPRING CO.,LTD.

Business Details

Comprised of Chuo Spring Co., Ltd. itself and its domestic subsidiaries. Manufactures and sells Chassis Springs, Precision Springs, Control Cables, Construction Materials & Equipment / Housing-related Components, Automotive Accessories, and other products. Major customers include domestic OEMs led by Toyota Motor Corporation. FY2026 (ending March 2026) was a year in which "deliberate fixed cost increases" (safety measure investments, replacement of aging equipment, and human capital investment) were implemented in a planned manner, advancing the foundational improvements aimed at enhancing the profit structure of the group as a whole.

Recent Overview

Due to "deliberate fixed cost increases," operating income decreased significantly by 41.3% year on year. Sales reached a record high level.

In the Japan segment for FY2026 (ending March 2026), sales increased to ¥84,503 million (up 1.5% year on year), and consolidated sales reached a record high, while operating income decreased significantly to ¥2,888 million (down 41.3% year on year). The main causes were "deliberate fixed cost increases," including safety measure investments, replacement of aging equipment, heat countermeasures, and human capital investment. Depreciation and amortization increased to ¥3,663 million (from ¥2,853 million in the prior period). A delay in the timing of recovering the impact of North American tariffs through price pass-through also contributed to the profit decline. Costs of ¥147 million related to the response to the Fujioka plant accident (which occurred in March 2024) were also recorded as an extraordinary loss.

Key Products

Growth Drivers

• Increase in the proportion of high-value-added products and expanded transactions through continued mass production of the new stabilizer product (ODDS)
• Gradual progress in passing through labor cost increases via pricing (an improvement effect of approximately ¥14 million from price pass-through of inflation impact in FY2025)
• Profit improvement through rationalization improvements at a historically high level (rationalization improvement effect of approximately ¥10.8 million)
• Safety and equipment investments made this fiscal year (capital expenditures of approximately ¥71 million) are expected to serve as a driving force for strengthening the production base and expanding profits from the following fiscal year onward
• Commencement of construction of a new building at the Fujioka plant (Plant No. 12) (planned for summer 2026), expanding production capacity and introducing state-of-the-art equipment and renewable energy

Risks

• Pressure on operating income due to continued increases in "deliberate fixed costs" (equipment safety measure investments, replacement of aging equipment, workplace environment improvements, and human capital investment) associated with strengthened safety-first initiatives
• Risk of a trend of increasing depreciation and amortization (from ¥2,853 million in the prior period to ¥3,663 million in the current period) and persistently high fixed cost burden
• Continued costs for preventing recurrence and compliance-related burdens associated with the Fujioka Plant No. 3 accident (occurred March 6, 2024) (¥147 million extraordinary loss recorded in the current period)
• Risk of timing gaps in the recovery of North American tariff impacts through price pass-through (recovery expected in the following fiscal year, but negotiations could become prolonged)
• Risk related to recording product warranty provisions (decreased to ¥214 million in the current period as a reaction to ¥2,398 million recorded in the prior period, but the risk of recurrence such as OEM recalls remains)
• Impact on group-wide profitability if domestic fixed cost increases continue, even as a profit structure that offsets the decline in the Japan segment on a global basis is being established