The Lead Co., Inc.

Business Details

An order-based manufacturing business centered on resin molding, producing and selling exterior parts such as bumpers and spoilers as well as Handbrake Lever Systems. The main customer is SUBARU CORPORATION (accounting for 63.2% of net sales for the fiscal year under review). Production is carried out at two sites, the Head Office Plant and the Nishino Plant, and the business is domestic-only (no overseas sales). In FY2026 (ending March 2026), net sales increased 19.9% year on year due to the start of production in the second half for two new large-volume mass-production vehicle models, but the segment loss widened due to upfront investments such as the introduction of a 3,500-ton large resin molding machine.

Recent Overview

Net sales increased 19.9% year on year due to the start of second-half production for two new large-volume vehicle models, but the segment loss widened due to upfront investments.

Net sales for FY2026 (ending March 2026) were ¥4,619 million (up 19.9% year on year). Although production of one existing large-volume mass-production vehicle model ended due to a full model change at the end of June 2025, the main driver was the start of parts production for two new large-volume mass-production vehicle models in the second half. On the other hand, upfront investments such as the introduction of a 3,500-ton large resin molding machine (capacity expansion investment) and factory layout reorganization to secure production lines weighed on profitability, and the segment loss (ordinary loss) widened significantly to ¥195 million from ¥68 million in the prior year. Net sales to the main customer, SUBARU, were ¥3,249 million (equivalent to 63.2% of consolidated net sales).

Key Products

Growth Drivers

• Expansion of net sales from FY2027 (ending March 2026) onward (full-year contribution) through continued orders for the two new large-volume mass-production vehicle models
• The capacity expansion from the introduction of the 3,500-ton large resin molding machine is expected to contribute to improved profitability along with higher utilization rates
• Introduction of automatic clip insertion equipment as a labor-saving rationalization investment, aiming to improve assembly production capacity, production efficiency, quality and order competitiveness
• Strengthening relationships with the main customer SUBARU and expanding activities to win new orders from nearby major automakers
• Strengthening development technology such as anneal-less technology to achieve differentiation and expand orders

Risks

• High dependence on SUBARU (equivalent to 63.2% of net sales for the fiscal year under review), meaning fluctuations in SUBARU's production volume directly affect performance (SUBARU's global production volume in FY2026 (ending March 2026) decreased 7.0% year on year, and export volume decreased 13.2% year on year)
• Upfront investment costs associated with large-scale capital expenditure and factory layout reorganization are squeezing profitability in the short term (segment loss of ¥195 million for the fiscal year under review)
• Risk of order decline due to globalization of automakers, overseas expansion of production bases, parts commonization, and the breakdown of supplier keiretsu relationships
• Risk of economic downturn due to intensifying competition for entry into electric vehicle-related parts and U.S. tariff measures
• Risk of rising manufacturing costs due to soaring resource and energy prices and inflation (the ratio of outsourced processing costs rose from 9.1% in the prior year to 13.3%)