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Management Policies and Medium-term Management Goals

Basic Management Policies

As stated in our corporate commitment, “Clarion strives to improve society by seeking to develop the relationship between sound, information and human interaction, and by creating products to meet those needs” and carries out activities accordingly.
During the previous fiscal year, Clarion was adversely affected by the significant impact of a shift from luxury cars to smaller sized cars (“kei” category cars) and compact cars in the automobile industry as well as by plunging sales prices due to excess supply in the aftermarket and slumping sales.
Amid these drastic changes in the business environment surrounding the Clarion Group, we are striving to build a solid foundation for future growth by making sure to take advantage of these fastevolving shifts in the market structure and business environment as well as by cultivating new regions and product domains from the three-dimensional (3D) perspectives of “products”, “geographical regions” and “customers”.

Targeted Management Indicators

The Clarion Group emphasizes consolidated operations in order to enhance corporate value, and accordingly, promotes greater consolidated earnings power and consolidated cash flow management.
The Group aims to achieve its goals of consolidated net sales of ¥230,000 million and a consolidated operating income margin of 5% or higher in the fiscal year ending March 31, 2016.

Issues to Be Addressed

The automobile industry has witnessed dramatic changes in the business environment, most notably the emergence of smartphones, the entry of participants from the IT industry and a transition in emphasis from hardware to software. In addition, changes in market structure have also become increasingly evident. Amid this market environment, Clarion aims for quantitative sales of its traditional commoditized products and for an expansion of new product domains that lead to increases in earnings. Additionally, we will consider what types of products to provide to which customers in which regions based on the 3D perspectives of “products”, “geographical regions” and “customers”. Accordingly, we will further promote our 3D strategy for allocating resources.
In the fiscal year ending March 31, 2014, we expect that the shift toward smaller sized cars by our major customers will accelerate and that sales conditions will become increasingly severe not only in the original equipment manufacturer (OEM) market but also in aftermarkets. Under these circumstances, Clarion has initiated emergency projects to curb fixed costs through enhanced development efficiency while at the same time making continuous efforts to reduce material costs and other variable costs aimed at securing earnings.
As our business environment undergoes marked changes with each passing year, we will fulfill our corporate social responsibilities as a member of the Hitachi Group and aim to achieve growth as a company that is truly needed by society.
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