NOK CORPORATION

Business Details

Centered on NOK Corporation, this segment manufactures and sells oil seals, O-rings, anti-vibration rubber, resin processed products, gaskets, chemical synthetic products, mechanical seals, and other products for the automotive, construction machinery, and general industrial machinery industries. The company has extensive production and sales bases both in Japan and overseas, with group companies such as NOK Co., Ltd. (Thailand), Wuxi NOK-Freudenberg Co., Ltd., and Eagle Industry Co., Ltd. collaborating to develop the business. Demand comes from a wide range of industries, including domestic and overseas automotive, general industrial machinery, and electronic/precision equipment.

Recent Overview

Achieved higher sales and profit through expanded sales to non-Japanese customers in China, recovery in the Thai market, and pricing revisions

In the Seal Business for FY2026 (ending March 2026), net sales increased 1.3% year on year to ¥367,397 million, and operating profit rose 6.3% to ¥27,860 million, resulting in higher sales and profit. Although domestic production volumes of Japanese automakers declined, expanded sales to non-Japanese customers in China and a recovery in the Thai automotive market contributed positively. For general industrial machinery, increased demand for construction machinery in China provided a tailwind. Foreign exchange also had a positive effect, boosting sales. On the profitability side, despite worsening fixed costs such as personnel expenses, the promotion of pricing revisions including price pass-through, along with improvements in variable costs from lower raw material costs and cost reductions, contributed to an improved operating profit margin of 7.6%.

Key Products

Growth Drivers

• Strengthening sales expansion to non-Japanese automakers in China (responding to EVs and new energy vehicles)
• Increased demand for construction machinery repair parts and agricultural machinery
• Improved profitability through continued pricing revision activities such as price pass-through
• Cost improvement from favorable changes in raw material prices and other variable costs
• Development of non-Japanese customers in the ASEAN market amid expansion by Chinese automakers
• Development and sales expansion of new-field products such as those for EVs and semiconductor equipment
• FY2027 (ending March 2027) forecast: net sales of ¥393,400 million (up 7.1% year on year) and operating profit of ¥30,800 million (up 10.6% year on year), driven by the transfer of products from other segments

Risks

• Decline in domestic and overseas production volumes by Japanese automakers (weak sales in the Chinese and Thai markets)
• Prolonged weakness in demand for general industrial machinery due to the real estate slump in China and economic downturns in Europe and the US
• Decrease in yen-denominated overseas sales due to yen appreciation
• Slowdown in new vehicle demand in Thailand due to tightened auto loan screening
• Rising fixed costs such as personnel expenses due to wage increases, and delays in price pass-through
• Decline in sales to Japanese customers in China due to the shift toward electric vehicles
• Impact on business from escalating tensions in the Middle East (not factored into earnings forecasts)