JTEKT Corporation

Business Details

This is a reportable segment consolidating the two business segments of "Steering" and "Drive Systems." It manufactures and sells Electric Power Steering (EPS), hydraulic power steering, Electronically Controlled 4WD Coupling (ITCC), Torsen, and Pressure Reducing Valve for FCEV, among others. Its main customer is the Toyota Motor Group, accounting for approximately 71% of total company-wide revenue, making this the largest segment. It operates global production sites in Japan, North America, Asia, and Europe, providing comprehensive steering and drivetrain solutions to the automotive industry.

Recent Overview

Revenue and profit increased on higher sales in Japan and North America and yen depreciation and cost improvement effects; Europe and China saw lower sales.

In the Automotive segment for the full year of FY2026 (ending March 2026), although sales declined in Europe and China, revenue increased by ¥33,855 million (2.5%) year on year to ¥1,367,005 million, supported by the effect of yen depreciation as well as increased sales in Japan and North America, among others. Business profit increased by ¥8,373 million (21.8%) year on year to ¥46,717 million, as increased sales, yen depreciation, and cost improvement effects contributed despite the impact of U.S. tariffs, and the business profit margin improved from 2.9% to 3.4%. Capital expenditures decreased from ¥68,774 million in the prior period to ¥54,237 million.

Key Products

Growth Drivers

• Revenue expansion driven by increased automobile sales in the Japanese and North American markets (Japan and North America contributed to increased revenue for the full year of FY2026, ending March 2026)
• Continued effect of ongoing cost improvement activities (contributed to a 21.8% year-on-year increase in business profit for the full year of FY2026, ending March 2026)
• Strengthened competitiveness through higher value-added Electric Power Steering (EPS) (development of C-EPS and second-generation RP-EPS)
• Expansion of production capacity in growth markets through the establishment of a new plant in India (decided October 2024)
• Capturing future demand through development of autonomous-driving-compatible products such as Steer-by-Wire and Pairdriver®
• Deepening business relationship with the Toyota Motor Group (revenue from the Toyota Group expanded to ¥821,441 million for the full year of FY2026, ending March 2026)

Risks

• Risk of decreased sales due to continued economic stagnation in the European and Chinese markets (Europe and China remained factors reducing revenue for the full year of FY2026, ending March 2026)
• Uncertainty in trade policy, including U.S. tariffs (the impact of U.S. tariffs pressured business profit for the full year of FY2026, ending March 2026)
• Foreign exchange translation impact on revenue and business profit from a strengthening yen (the forecast for FY2027, ending March 2027, assumes ¥155 to the U.S. dollar and ¥180 to the euro)
• Risk of structural changes in demand for existing products due to the automotive industry's shift toward CASE (electrification, autonomous driving)
• Risk of price pressure and loss of market share due to intensifying competition, particularly centered on China
• Risk of deteriorating productivity in North America due to turnover of skilled workers and labor shortages