1、Integrated Report 2023For the year ended March 31,2023DENSO PhilosophyContributing to a better worldby creating value together witha vision for the future Quality FirstOn-site VerificationKaizen,Continuous ImprovementProviding quality and reliability beyond customer expectationsCredibilityAchieving

2、the highest results by working as a teamCommunicationTeamworkHuman DevelopmentCollaborationVisionCreativityChallengeForesightProviding surprises and impressions in a way that only DENSO canDENSO SpiritA spirit of foresight,credibility and collaborationThe DENSO Spirit expresses values and beliefs sh

3、ared by our employees around the world that we have cultivated since our establishment in 1949.The DENSO Spirit is an action guideline that provides the driving force for contributing to the mobility society and the lifestyles of people as well as the source of our competitiveness.DENSO Integrated R

4、eport 2023In 1956,seven years after the founding of NIPPONDENSO,we formulated the DENSO Creed for the purpose of protecting,nurturing,and passing on to the next generation the mentality of all DENSO employeeswhich we possessed even before splitting from Toyota Motor Co.,Ltd.while taking the next ste

5、p toward new progress based on a clear self-awareness.Without changing the values encapsulated in the DENSO Creed,we formu-lated the DENSO Philosophy in 1994 to reflect the social changes occurring at the time and to better clarify the meaning of the DENSO Creed in words that were more appropriate f

6、or the time.In addition,to share our value system with DENSO employees on a global basis as the number of Group companies and local employees began to dramatically increase,we established the DENSO Spirit in 2004.The four ideals of the DENSO Creed,which have served as the source of the Companys prog

7、ress to date,have been gradually passed down through the years and are still embraced today by our approximately 170,000 employees across the globe.DENSO CreedBe trustworthy and responsible.Cherish modesty,sincerity,and cooperation.Be pioneering,innovative,and creative.Provide quality products and s

8、ervices.DENSO CreedYasushi Matsui Chief Financial Officer Executive Vice President Representative Member of the BoardDENSO Corporate Websitehttps:/ Integrated Report 20231Publication of DENSO Integrated Report 2023DENSO publishes an integrated report every year in order to foster a deeper understand

9、ing among investors and all of its stakeholders regarding the Companys initiatives toward sustainable corporate value enhancement.With a focus on the value creation process that has remained unchanged since the Companys founding,DENSO Integrated Report 2023 includes specific information on the strat

10、egies and initiatives DENSO is pur-suing toward“green”and“peace of mind”with the aim of realizing its Long-term Policy for 2030,as well as financial strategies that underpin these strategies and initiatives,and efforts to strengthen its non-financial capital,a topic that has garnered a great deal of

11、 attention in recent years.We hope that this report demon-strates to readers the fact that DENSO is a company that maintains a consistent set of beliefs,from the past to the present and into the future,and that resolves social issues through the use of technology.Going forward,DENSO will continue it

12、s efforts to disclose accurate information to its stakeholders in a timely manner and actively engage in dialogue with them.We would like to ask for the candid opinions and requests of our stakeholders regarding this report so that it may serve as a more effective communication tool for the co-creat

13、ion of corporate value.Lastly,I would like to assure the readers that the creation process for this report was done in an appropri-ate fashion.Positioning of Integrated ReportFinancial Information DENSO Website Investorshttps:/ Results/Securities Report,etc.Non-Financial Information DENSO Website Su

14、stainabilityhttps:/ toward Environmental Reporting/Initiatives toward Social Responsibility Reporting/Corporate Governance,etc.Integrated Report(PDF)https:/ Used in DENSO Integrated Report 2023 ICE:Internal combustion engineBEV:Battery electric vehicle HEV:Hybrid electric vehicle PHEV:Plug-in hybrid

15、 electric vehicleFCEV:Fuel-cell electric vehicleCASE vehicles:Connected,autonomous,shared&service,and electric vehiclesThe QR Code is a registered trademark of DENSO WAVE INCORPORATED.About the Cover of DENSO Integrated Report 2023The cover of this report uses DENSO original design element“D-cross”t

16、o express the Companys passion and devotion to new value creation,which it has consistently maintained since its founding.By emphasizing crossing lines,the cover conveys DENSOs unchanging stance of contributing to society in order to deliver happiness to people and ensure a better tomorrow.Editorial

17、 Policy In addition to providing financial information,such as results and sales overviews as well as management strat-egy,DENSO Integrated Report 2023 is edited as an inte-grated report that reports,in an easily understood manner,on what value DENSO is providing society and on the pro-cess of impro

18、ving that corporate value.This we achieved by introducing,in an integrated manner,information of a non-financial nature on intangible assets,including on the environment,society and governance(ESG),that are seen as the foundation underpinning growth.DENSO creates long-term corporate value for all of

19、 its stakeholders,including shareholders and other investors,and would appreciate their understanding of the efforts the Company ismaking in aiming to realize a sustainable society.In compiling this report,references have been made to the Integrated Reporting Framework that is proposed by the Intern

20、ational Financial Reporting Standards(IFRS)Foundation,the Guidance for Integrated Corporate Disclosure and Company-Investor Dialogue for Collaborative Value Creation,formulated by the Ministry of Economy,Trade and Industry,and the Governance Guidelines on Intellectual Capital and Intangible Assets,f

21、ormulated by Japans Cabinet Office.In addition,withregard to social reporting and the environment,please refer to the“Sustainability”section of the Companys website.Scope of ReportTarget Organization DENSO CORPORATION and the DENSO Group (In this report,DENSO CORPORATION refers to DENSO on a non-con

22、solidated basis.)Reporting Period This report covers the activities of the DENSO Group during fiscal 2023(April 1,2022 to March 31,2023).Certain parts of this report include con-tent on the Groups activities from April 2023 onward.Target Audience All stakeholders involved with the DENSO GroupCaution

23、ary Note:Forward-Looking Statements Of the content published in this report,what is not historical fact com-prises future predictions based on expectations or on plans for the future.As they include contributory factors,such as risks and uncertain elements,the possibility exists that actual achievem

24、ents and results may differ materially from this report.2DENSO Integrated Report 2023CONTENTS4 At a Glance6 Management Message 7 Message from the President&COO 12 Message from the Chairman&CEO14 DENSOs Value Creation Story 14 Past,Present,and Future 16 History of Innovation and Creation 20 DENSOs Va

25、lue Creation Process 22 Our Cultivated Strengths 26 Our Accumulated Capitals 28 Tradition of Sustainability Management 30 Special Feature:Value Creation in Action32 Growth Strategy 32 Road Map for Our 2030 Vision 34 Awareness of Business Environment 36 1 Materiality 38 Recent Forward-Looking Initiat

26、ives and Their Achievements 39 2 Mid-term Policy for 2025 42 3 Strategies for“Green”and“Peace of Mind”48 Overview by Product 48 Business Portfolio and Value Creation 50 Business Analysis 52 Contribution Fields and Mainstay Products 54 Electrification Systems 56 Powertrain Systems 58 Thermal Systems

27、60 Mobility Electronics 62 Advanced Devices 64 Factory Automation and Social Solutions 65 Food Value Chain66 Capital Strategies 66 Financial Capital and Message from the Chief Financial Officer 74 Human Capital 77 Message from the Chief Human Resources Officer 78 Manufacturing Capital 79 Message fro

28、m the Chief Monozukuri Officer 80 Intellectual Capital 84 Message from the Chief Technology Officer 85 Message from the Chief Software Officer 86 Special Feature:Connecting the Flow of FiveElements of Society 89 Natural Capital 90 Efforts to Maximize the Value of“Green”94 Social and Relationship Cap

29、ital98 Corporate Governance 98 Corporate Governance108 Dialogue with the Outside Board Members112 Members of the Board and Audit&Supervisory Board Members114 Risk Management117 Compliance119 Corporate Data119 Facts&Figures122 10-Year Data124 Company Overview and Stock Information125 TCFD IndexDENSO

30、Integrated Report 20233Topics of DENSO Integrated Report 2023 Overall Layout of DENSO Integrated Report 2023This integrated report is edited based on the layout explained in the chart below.This layout is used to better explain DENSOs value creation story.The aim of DENSO Integrated Report 2023 is t

31、o have the reader gain a deep understanding of DENSOs value creation process while promoting an opportunity for dialogue.Throughout the entirety of this booklet,we have created a story line that comprehensively communicates our value creation process while encompassing crucial elements that help the

32、 reader understand this process(management philosophy,strategy,governance,etc.)and while referencing the Guidance for Collaborative Value Creation.The chart below shows the logical layout of these crucial elements based on the story line we have created.Additionally,we have listed keywords affiliate

33、d with each element so that readers can easily access the information they wish to know.Themes of DENSO Integrated Report 2023 DENSO Integrated Report 2023 comprises sections on the progress of DENSOs strategies,centered on the Mid-term Policy for 2025,and the pathway for their achievement under a n

34、ew management structure.It also features sections on busi-ness and capital strategies,aimed at realizing DENSOs overall strategies,and corporate governance,which underpins the Companys corporate activities.With a focus on DENSO Culture,which was covered in DENSO Integrated Report 2022,this report de

35、picts DENSOs value creation story as the Company enters the period of its second founding with a continuous awareness of its past,pres-ent,and future.In addition,the report explains DENSOs belief that non-financial capital,such as human capital and intellec-tual capital,can provide a genuine competi

36、tive advantage over the medium to long term.It also explains the relationship between non-financial capital and financial value and provides information on the Companys strategies toward each capital.New Content P.45 At a GlanceThis section summarizes DENSOs business scale,product line-ups,and the v

37、alue the Company offers to society in an easy-to-understand manner to give readers an overview of DENSO at a glance.P.2627 Our Accumulated CapitalsThis section explains DENSOs specific efforts for strengthening each of its capitals to show how they lead to the realization of business growth and the

38、resolution of social issues.P.2829 Tradition of Sustainability ManagementThis section covers the sustainability management that DENSO has been implementing since its founding.Through explana-tions on promotion structure,specific examples,and messages from employees,this section provides an overview

39、of how DENSO carries out its sustainability management.P.5051 Business AnalysisThis section provides a close-up on specific initiatives toward enhancing the competitiveness of each businessa topic that is often the focus of our stakeholdersvia a Q&A format.Utilization of Dialogue and Feedback Receiv

40、ed We actively promote dialogue with our stakeholders using our integrated reports.We make concerted efforts to reflect stake-holder opinions and requests in the integrated report for the next fiscal year,to the greatest extent possible.In addition,we view our employees as important stakeholders and

41、 therefore are working to enhance each employees awareness of corpo-rate value by making use of our integrated reports.Meaningful Dialogue and EngagementIn addition to holding dialogue with our external stakeholders,we promote the internal utilization of our integrated reports to boost the motivatio

42、n of our roughly 170,000 global employees toward corporate value creation.ValuesDENSO Creed and PhilosophyValue Creation ProcessMaterialityCapital StrategiesCorporate GovernanceSustainability ManagementAwareness of Business EnvironmentMid-term Policy for 2025Business StrategiesLong-term Policy for 2

43、030Strategies for Green and Peace of MindKPIs for SustainabilityLong-term StrategiesStrategies for Business ExecutionResults and Important Indicators for ResultsCorporate GovernanceThe DENSO Creed and Philosophy are our uni-versal way of thinking that will forever remain unchanged.In addition,sustai

44、nability manage-ment is an ideology that we have passed down since our inception and serves as the core of our management approach.Centered on DENSOs universal way of thinking and value systems,we have established a value creation process to ensure that we continue to grow together with society.In a

45、ddition,we have formulated the Long-term Policy for 2030 based on the busi-ness environment of each era.To realize the targets in our current Long-term Policy for 2030,we have formulated material issues(Materiality)that DENSO must prioritize.Also,as a pathway to reaching our Long-term Policy for 203

46、0,we have formulated the Mid-term Policy for 2025 and strategies for“green”and“peace of mind.”The capitals that we have accumulated since our founding serve as a growth foundation that underpins our corporate activities.By implement-ing strategies led by businesses that leverage these capitals,we ai

47、m to both realize business growth and resolve social issues.We have put in place a governance framework that allows us to steadily execute strategies and continuously improve our corporate value.At a GlanceGuided by the DENSO Creed,we are a company that earnestly tackles social issues head on and co

48、ntinues to create value through outstanding technologies and quality,centered on DENSO Culture.Our roughly 170,000 global employees each depict their own vision for the happiness of people and society as a whole and take on challenges each day to create new value.Established1949In 1949,the Company w

49、as founded as NIPPONDENSO with the aim of becoming Japans leading manufacturer of automo-bile components.Consolidated Revenue6.4 trillionConsolidated revenue in fiscal 2023 came to 6.4 trillion.191(including DENSO CORPORATION)The DENSO Group has a total of 191 Group companies,with research laborato-

50、ries,production bases,and sales offices spanning across the globe.R&D Investments521.6 billionWe are accelerating technological devel-opment centered on the fields of electrifi-cation and automated driving.164,572All of our employees around the world work in unison to deliver outstanding products ba

51、cked by exceptional quality and advanced technology.No.2We are a global company that provides products and systems that are trusted by car manufacturers around the world.Revenue by CustomerRevenue by Product Mobility Electronics25.2%Thermal Systems24.8%Powertrain Systems23.3%Electrification Systems1

52、6.3%Advanced Devices5.6%Non-automotive businesses2.8%Other2.0%Toyota Group(Toyota Motor Corporation,Daihatsu Motor Co.,Ltd.,Hino Motors,Ltd.)50.4%Honda Motor Co.,Ltd.6.6%Stellantis N.V.(FCA,PSA)4.0%Ford Motor Company2.8%SUBARU CORPORATION2.6%General Motors Company2.6%Other car manufacturers 19.7%Aft

53、ermarket and non-automotive11.3%DENSO by the Numbers As of March 31,2023 Composition of Revenue As of March 31,2023Total Number of Group CompaniesTotal Number of Global EmployeesAutomotive Products(Global)DENSO Integrated Report 20234Bring happiness to people by broadening the scope of our long-cult

54、ivated technologies,centered on mobility,to reach a wide range of industries and society as a whole.INDUSTRYSupport workers and improve the qual-ity of their lives with a focus on the entire supply chainSOCIETYMOBILITYElectrificationRealize highly efficient mobility with low environmental burdenConn

55、ectedCreate a new mobility society that connects vehicles,people,and goodsAdvanced Safety and Automated Driving Achieve a society without fatalities from traffic accidents and realize mobility that is safer,more comfort-able,and more convenient for everyoneCarbon NeutralityAchieve carbon neutrality

56、within our Monozukuri activi-ties and contribute to a carbon-neutral societyUrban Development and Next-generation Technological DevelopmentRealize a cycle of joyFood Value ChainMonozukuriDENSO Integrated Report 20235 DENSOs Vision for the Future Koji ArimaChairman&CEORepresentative Member of the Boa

57、rdShinnosuke HayashiPresident&COORepresentative Member of the BoardEmbracing DENSOs heritage and culture,we have started this year as a new DENSO,striving to bring smiles to all people through new value creation.MANAGEMENT MESSAGETo Our Stakeholders6DENSO Integrated Report 2023MANAGEMENT MESSAGEMy A

58、mbitions and Determination as the Newly Appointed PresidentIn June 2023,I was appointed as president&COO,inheriting the management baton that has been gradually passed down over the more than 70 years since DENSOs founding.Taking on this new position has been a truly awe-inspiring experience for me.

59、I have taken over the business foundation built up by my predecessors and will strive to further reinforce it moving forward.At the same time,I will draw on DENSOs culture that has been cultivated through our long history as I put forth every effort in my new posi-tion to ensure that we evolve and p

60、rosper as a company that cre-ates new value in this era of change,backed by the support of all of our stakeholders.Recently,the world has been dealing with dramatic changes,including the global spread of COVID-19 and the economic disrup-tions that followed as well as worsening environmental issues.W

61、hile the automotive industry has been grappling with the serious issue of semiconductor shortages,the stable supply of resources and materials has become a significant issue for society at large due to the emergence of geo-economic divisions.Internally,we have found ourselves in a period where we mu

62、st reexamine the very essence of who we are as a company,as we strive to move beyond a quality-related issue that was unprecedented in scale.What exactly kind of company is DENSO?And,can we continue to succeed as society undergoes tremendous change?As we ask ourselves these questions regarding our f

63、undamental existence as a company,I view my appointment as president as a call to con-tribute to the automotive industry in a way that addresses these changing times.This is a very heavy responsibility as I take on this major role.However,I am extremely grateful for this opportunity to lead and will

64、 do so with a firm awareness that I must drive the growth of DENSO and ensure that we fully realize our manage-ment philosophy.We adopted the Long-term Policy for 2030 under the concept of“Bringing hope for the future for our planet,society,and all people”through our efforts toward green and peace o

65、f mind.We have promoted our business activities in accordance with this policy.To bring hope to all people in the future amid the rapid changes occurring in the automotive industry and across society as a whole,we must create a cycle of joy that ensures mutual happiness between people and extend it

66、throughout society.To do so,we must help realize a circular society through the pro-motion of high-value-added businesses that are green and offer peace of mind.Accordingly,I believe my mission is to promote this cycle of joy by ensuring that our approximately 170,000 global employees mutually enhan

67、ce their ability to drive future value creation by thinking intrinsically and pursuing a shared ambition.My Roots and Conviction as a Member of Senior ManagementMy life has always been connected to Monozukuri(manufacturing).I was born to a family that operated a small factory in Mie Prefecture,so I

68、have grown up since childhood interacting with Monozukuri.When considering my path after finishing high school,I decided to learn about production management and quality con-trol at university.Upon graduation,I was led to DENSO,a company boasting strengths in Monozukuri and quality assurance.When I

69、Message from the President&COOContinuing to Create New Value to Become a Company That Thrives in This Era of ChangeDENSO Integrated Report 20237MANAGEMENT MESSAGEjoined the Company,however,I was placed in charge of software development in an electronics engineering division.To be honest,Iwas quite d

70、isoriented at the time,as this was not quite the way Ihad imagined starting my career as a working adult.Now looking back at that time,software development really helped me start tobuild my foundation as an engineer and led me to where I amtoday.In the Electronics Engineering Department,my job was t

71、o design electronic control units(ECUs)for diesel engines.At that time,major barriers stood in the way of realizing the 100%electronic control of an engine from the perspectives of both performance and functional safety,and it was believed by many to be practically impossible.Nevertheless,under the

72、strong leadership of the departments head,all members of my team believed that the 100%electronic control of a diesel engine was the most effective way of eliminating the pollution it causes and took on the chal-lenge to make this a reality.Our efforts ultimately led to the prac-tical application of

73、 the worlds first diesel common rail system.My team members came from different technical backgrounds in the fields of systems,mechanical parts,electronics,and software and had different approaches to their work.Sharing the same aspiration to build something from nothing and to change the world by d

74、oing so,our team maintained its focus on the challenges before us and pushed forward day by day to overcome them.Trying to accomplish a world first with no precedent on which tobase anything was an extremely tough endeavor.Accordingly,we dealt with many issues,failures,concerns,and pain as a team,in

75、cluding technological barriers that could not be overcome,unmanageable tasks,looming deadlines,and problems with teamunity.Feeling overwhelmed and somewhat deflated by the situation,there were days when I could not even come to work.Extremely displeased with myself,I even considered quitting the Com

76、pany.It was at this time when my supervisor said to me,“Take the load you have been carrying off your shoulders;I can handle the rest.”These are words I still remember to this day.Looking back on it,his words and the kindness embodied in them truly helped me reevaluate who I was as a person and rein

77、vigorate my motivation.From then on,I made sure to give it my all every day,tackling each task as it arose.When confronted with difficulties from a setback,I would consult with my supervisor,my seniors,and my friends,and borrow the wisdom of my predecessors from the vari-ous writings they published.

78、In addition to honing my technical skills,I would study various approaches to overcoming challenges,including organizational management methods and ways to adjust my mental attitude,and would put what I learned into practice.This is all that I focused my efforts on,and through the repeated experienc

79、e of taking on challenges,dealing with failures,and learn-ing from them,I developed my own outlook on history and the world and refined my personal value system.I made it my policy to look at the positives in every situation,learn openly from those around me,and always engage in my work with a posit

80、ive attitude and a sense of gratitude.I still maintain this approach in my actions and decision-making today.My experience of having some-one with perspective and who was kind enough to pull me out from the depths of despair and place me on a positive trajectory laid the cornerstone of my approach t

81、o organizational management.Understanding DENSO and the Three Elements of Its CultureDENSO Culture represents the Companys core and its strengths that have been steadily cultivated over time.The first element of DENSO Culture is its people,who serve as the wellspring for the creation of new social v

82、alue.Since our establishment in 1949,we have positioned our people as the most important management resource and have therefore focused our efforts on Hitozukuri(the development of human resources),which underpins our Monozukuri.DENSO is a professional organi-zation comprising roughly 170,000 divers

83、e employees spanning the globe who,with a strong commitment to achieving results,take on the challenge of creating value that is ahead of its time.This employee base is not something that can be built up over-night,and I therefore can say with confidence that it serves as our greatest strength.The s

84、econd element is our genuine technological and manufac-turing capabilities that allow us to make products that cater closely to the needs of a broad range of customers.Throughout our his-tory,we have cultivated technological and manufacturing capabili-ties that have helped us refine technologies in

85、all of our business domains,including the mechanical parts domain,which we have been pursuing since our founding,as well as electronics and soft-ware.In addition,these capabilities have allowed us to combine such technologies in an optimized fashion to create high-quality products that can be practi

86、cally applied and mass-produced.These capabilities have been and will continue to be a tremendous tool that enables us to resolve social issues.The third element is our free and open organizational culture.Tohave our employees and our organization aim for even higher growth,it is essential to have a

87、n organizational culture brimming with vitality that is created based on mutual trust between labor and management.Throughout the numerous crises we have over-come,we have fostered an organizational culture focused on problem solving in which our employees can exchange differing opinions without hav

88、ing to quickly compromise,can gain wisdom from each others opinions,and can draw on their mutual strengths to the greatest extent possible.This kind of culture gives us the ability to unify our diverse human resources,who areour greatest strength,bringing them together to achieve a common goal by lo

89、oking beyond any differences they may have intheir approach to doing so.Initiatives and Targets for Further Corporate GrowthWe view our long-cultivated strengths as the capital for our cur-rent and future creation of social value.Supported by this capital,we will seek to resolve social issues by max

90、imizing the value of green and peace of mind and being truly inspiring while at the same time achieving further corporate growth.Under our Mid-term Policy for 2025,we have adopted ROE of 10%or higher as our most important financial target with the aim of maximizing our value creation.To transition t

91、o a management approach better focused on capital costs,we have been striving to foster an understanding of the significance of ROIC-minded man-agement and instill an awareness of corporate value enhancement among all employees.By introducing ROIC as an indicator for determining the performance-link

92、ed compensation of Board mem-bers and disclosing ROE and other relevant targets,we have clari-fied the commitment of our management to enhancing ROIC.8DENSO Integrated Report 2023MANAGEMENT MESSAGEThrough repeated implementation of such initiatives,I feel that we have genuinely been improving ROIC,a

93、nd moving forward,we will further enhance our corporate structure with a view toward achieving our targets.In addition,with an operating margin of 10%and ROE of 10%or higher as our medium-term targets for fiscal 2026,in fiscal 2024 we forecast revenue of 6.7 trillion,an operating margin of 9.0%,and

94、ROE of 9.3%(as of the release of our first quarter financial results for fiscal 2024).This means that the probability of achiev-ing our fiscal 2026 targets is becoming even greater.To meet the expectations of the market,we are striving to realize record-high revenue for the second consecutive year w

95、hile adopting a bal-anced approach to highly disciplined growth investments.To realize the principle of green,we will step up our efforts to popularize BEVs and other EVs in order to contribute to carbon neutrality.DENSO has led the way with technological development in the electrification domain an

96、d the enhancement of global pro-duction structures.With the shift toward EVs gaining speed,our ample product lineup that covers extensive output domains and our proposal-making capabilities that meet the diverse needs of customers provide us with a significant competitive advantage.We have commenced

97、 the mass production of invertersour main-stay product in the electrification field for which we possess the leading global sharein Japan,North America,and China.In fiscal 2024,we will begin the mass production of inverters in Europe,thereby bolstering production capacity and steadily expanding sale

98、s with a view toward realizing an annual production of 12 mil-lion inverters by fiscal 2026.To achieve the principle of peace of mind,we will aim for the development of advanced safety technologies to realize a society without fatalities from traffic accidents and in which people can move freely and

99、 safely.From an early stage,we have been striving to reduce fatalities from traffic accidents around the world,includ-ing the provision of collision-prevention and other safety products since the 1980s.In fiscal 2023,we realized the full-scale mass production of Global Safety Package 3,our third gen

100、eration of advanced driver assistance systems that greatly expands the scope of traffic accident prevention,in an effort to steadily expand the value of peace of mind across the globe.Going forward,we will combine the strengths we possess in terms of sensing and semiconductor technologies and algori

101、thm and software technologies to provide high-value-added products,thereby enhancing our growth and profitability.Creating a society with peace of mind and where fatalities from traffic accidents do not occur cannot be done on our own.It requires collaboration between relevant government agencies,ca

102、r manufacturers,and companies from other industries in efforts that encompass people,automobiles,and traffic environments.As a member of the Japan Auto Parts Industries Association,DENSO will take the initiative in reaching out to relevant organizations to pursue such efforts.As vehicles become more

103、 electrified and advanced,we will strive to evolve our semiconductor technologies that enhance vehicle performance and ensure the stable procurement and supply of semiconductors themselves.Recently,due to such factors as the COVID-19 pandemic,the automobile industry has dealt with a severe shortage

104、of semiconductors.While the tight supply situa-tion is starting to improve,there is still a great need for the further development of semiconductor technologies and the bolstering of a procurement foundation in order to deliver even better products to society,as the importance of semiconductors in a

105、utomobiles continues to grow.Guided by the experience and insight we have cultivated in our 50 years of involvement in the automobile and semiconductor domains,we are working to strengthen all aspects of our activities in these domains,from advanced technology development to pro-duction structures.I

106、n addition to promoting the development of cutting-edge technologies at subsidiaries specializing in R&D,we have invested in Rapidus Corporation,a company established for the domestic production of advanced semiconductors.Through these means,we are promoting the development of next-generation 2nm se

107、miconductors.In terms of semiconductor pro-duction and supply,we are taking steps to secure a more stable supply structure,including through collaboration with United Semiconductor Japan Co.,Ltd.and joint investment with partner companies in a subsidiary of Taiwan Semiconductor Manufacturing Company

108、 Limited.Regarding procurement,we have been conclud-ing long-term fixed order contracts with suppliers and establishing structures for transitioning to alternative parts.In these ways,we have been moving forward with activities to ensure a stable supply that even go so far as to rethink business pra

109、ctices specific to the automotive industry.As a company that has long been involved in DENSO Integrated Report 20239MANAGEMENT MESSAGEboth automobiles and semiconductors and that has a deep under-standing of both,we will serve as a bridge that connects both industries and helps them achieve growth a

110、nd will lead the way with efforts to optimize supply chains.Software continues to play an even greater role in realizing the principles of green and peace of mind,including in terms of the electricity management of EVs and automated driving via AI.DENSO has led the way in the industry by establishin

111、g software as a focus field and,going forward,will accelerate the following three strategies as pillars of this focus field.The first strategy is to strengthen cross-domain development from a perspective that encompasses the entire automobile.We have accumulated software know-how in all functional d

112、omains of automobiles.As cars become more advanced in the future and the connections between cars,people,and society at large become more diverse,we will promote proposals to maximize value for our customers by offering cross-domain solutions.The second strategy is to promote the standardization of

113、foun-dational software.The increasing scale and complexity of software development has become an industry-wide issue.To that end,we will contribute to the standardization of fundamental software in domains that require industry-wide coordination by engaging in discussion with other companies in the

114、automotive industry.By doing so,we will enable car manufacturers to focus their efforts on enhancing the appeal of their specific vehicles.The last strategy is to further strengthen our structure of global software developers.To realize a structure comprising 12,000 soft-ware developers by fiscal 20

115、26 and to significantly enhance the quality of these developers,we will enhance our human resource development and portfolio by strengthening skill enhancement and career development programs for software developers,includ-ing recurrent training for talent coming from other fields.The essence of the

116、se strategies is to enhance value for our cus-tomers,with software serving as the means to do so.Remaining committed to this belief,we will strengthen our software develop-ment capabilities going forward.In these growth domains of semiconductors and software,we will transform our development structu

117、re to promote more refined technological development and maintain an awareness of the development speed needed to meet market needs.Through the combination of R&D investment and capital expenditures over the past 10 years,we have allocated roughly 8 trillion to investments in future growth fields,th

118、e highest level of such investments in the industry.Through these investments,we have welcomed compa-nies with development styles that differ from DENSOs,including various foreign-owned companies and IT companies.While doing so,it is important that we promote balanced R&D investments linked with our

119、 management strategies to ensure that we enhance our competitiveness while maintaining the strengths that we have cultivated to date.We will continue to aggressively invest in R&D,which provides us with a competitive edge for creating future value,while transitioning to a resource allocation approac

120、h that leads to higher quality output.Through the results gained by doing so,we will pursue investments in future growth domains at the scale of 10 trillion over the next 10 years.From the perspective of enhancing development speed,we will take decisive action to revise the way we work throughout th

121、e entire supply chain,from development to manufacturing.To that end,we will redefine the roles of our global headquarters in Japan and our bases located around the world.In Japan,which serves as the leader for development-related strategies,we will bolster our ability in each region to collect and a

122、nalyze information and to draft strategies.We will also enhance our capabilities to monitor business execution.At the same time,we will increase our focus on development at our overseas bases while assessing signs of change in the markets of each region.Through these efforts,we will promote bold,cut

123、ting-edge development activities.In pursuit of the optimal operating structure for sustainable growth into the future,we are steadily moving forward with the reshuffling of our business portfolio.Accordingly,we have deter-mined our business direction based on the three elements of real-izing our pri

124、nciples,accelerating growth,and boosting profitability in terms of ROIC,and are moving forward with internal discussions to clarify growth domains and domains that are to be de-empha-sized or discontinued.In the growth domains of CASE and new businesses,we will strengthen and expand the competitiven

125、ess of our in-house manufacturing capabilities and make use of business alliances with partner companies with which we can demonstrate synergies.In the five-year period until fiscal 2023,we invested roughly 270 billion in alliances with approximately 40 companies,and we will continue to accelerate o

126、ur business alliance strategy with a view toward further growth.Meanwhile,for businesses nearing their final stage,we aim to enhance the power of internal combus-tion engines as a product by providing the best owners of reliable quality,cost,and delivery with our technologies and Monozukuri capabili

127、ties.Through this effort,we will enhance our lineup of products attractive to consumers from both the perspectives of performance and cost across the entire automotive industry,including internal combustion engine vehicles and EVs.We will also contribute to the swift realization of a carbon-neutral

128、society.We have thus far implemented the transfer of our fuel pump module and type III alternator businesses,and in fiscal 2024,we have commenced examinations on the transfer of our spark plug and exhaust gas sensor business as well.In turn,we will shift to new corporate value creation by leveraging

129、 the elemental technologies,know-how,and human resources that we have cultivated through these businesses in future growth fields.By earnestly working to achieve our targets for the near term as well as the medium to long term and striving together with our stakeholders to overcome challenges,I firm

130、ly believe that we can continue to achieve record-high revenue in fiscal 2024.ClosingBased on the principles of green and peace of mind,DENSO will continue to push forward with its efforts to create a cycle of joy that ensures mutual happiness between people.By doing so,we will enhance our corporate

131、 value on a sustainable basis and become a company that inspires society.We will actively engage in open dialogue with various stakehold-ers,including not only our employees but also suppliers,car manu-facturers,and shareholders,and reflect in our management the various things we notice and learn in

132、 order to continue to be a company that provides value to society.Valuing these opportuni-ties for dialogue with investors and all of our stakeholders,we will step up our efforts to communicate the progress and accomplish-ments of our various strategies as we work to accelerate them going forward.Th

133、rough stable,long-term shareholder returns with an aware-ness of DOE(dividend on equity ratio)and the flexible acquisition of treasury stock,we will seek to meet the expectations of all of 10DENSO Integrated Report 2023MANAGEMENT MESSAGEthe stakeholders who have supported us as a company.Recently,th

134、e improvement in the PBR(price-to-book ratio)of Japanese companies has been garnering significant attention,and thanks to the support of many of our stakeholders,DENSO has been able to maintain its PBR at a relatively high level within the automotive industry.Without becoming complacent with the cur

135、rent situation,we will continue to aim for steady corporate growth and appropri-ate increases in share prices linked to the value we provide.I would like to ask our stakeholders for their continued support as we strive to do so.I believe my most important mission as president is to unleash the full

136、potential of our employees.To steadily achieve growth as we aim to reach the aforementioned targets,I will strive to create environments in which all employees can continue to pursue indi-vidual challenges with peace of mind so that each one of them can deliver value to society.This particular aspec

137、t of my vision for management is what I inherited from my supervisor from all those years ago.With our many years of experience in electronics and software,we believe that there are many accomplishments we can make as the automotive industry undergoes a paradigm shift due to the progression of CASE.

138、By promoting management that draws on our uniqueness that our predecessors have cultivated,we promise to engage in business execution that allows us to create social value and steadily achieve growth.September 2023Shinnosuke HayashiPresident&COORepresentative Member of the BoardDENSO Integrated Repo

139、rt 202311MANAGEMENT MESSAGEFiscal 2023A Year When an Air of Positivity ReturnedLooking back on fiscal 2023,economic activities and various in-person events that had been suspended during the COVID-19 pandemic resumed,and interaction between people started to become livelier again.In this environment

140、,we saw an increase in positive developments during the year,including the strong perfor-mance of Japans teams in the FIFA Mens World Cup and the World Baseball Classic.For DENSO,we started to see a positive response to our efforts to promote management reforms and enhance our corporate structure,an

141、d in terms of performance,wesuccessfully achieved record highs for both revenue and oper-ating profit.In other good news for the Company,we were awarded the IEEE Corporate Innovation Award for helping the world benefit from thedynamic capabilities of the QR Code.The IEEE Corporate Innovation Award,o

142、ne of the most prestigious technical awards in the world,is presented to organizations that have made a signifi-cant global impact with innovative technologies and products and contributed to the development of electrical and electronic engi-neering.Established by the Institute of Electrical and Ele

143、ctronics Engineers(IEEE)in 1985,the award has been presented to leading companies and organizations worldwide.The QR Code was developed in 1994 by DENSO(currently DENSO WAVE)as a next-generation code with high capacity,high speed,and high reliability that can serve as a replacement for barcodes.The

144、code was originally used for inventory management at our manufacturing plants,but later its use expanded significantly across the globe,including for electronic tickets and cashless payments.The use of QR Codes for vaccination verification during the COVID-19 pan-demic is a very recent example of th

145、eir new application.DENSOs Culture Embodied through the QR CodeWhile I will not get into the details regarding the creation and development of the QR Code,DENSOs ability to lead the way with the development of such groundbreaking information tech-nology stems from the massive volume of data it has h

146、andled within its production activities as a global automotive components manufacturer.We have carried out these activities while exchang-ing a large volume of parts and materials with suppliers around the globe.Additionally,the receipt of the IEEE Corporate Innovation Award has given us an opportun

147、ity to reflect on the technological value and academic significance of the QR Code.It also gave us a chance to reexamine DENSOs culture,which helped support the codes development.At the time of the codes creation,we were promoting a shift in our Monozukuri activities from mass produc-tion to the pro

148、duction of a wide variety of products in small vol-umes.In addition to our ability to anticipate the trends of an era in which electronic transactions between companies were starting to become mainstream,the codes development was made possible by rigorous research and benchmark-setting activities ge

149、ared toward highly reliable code development.Its development was also Message from the Chairman&CEOWith our sights always set on the external environment,we will boldly pursue the resolution of social issues with great passion while evolving DENSO Culture.12DENSO Integrated Report 2023MANAGEMENT MES

150、SAGEmade possible through collaboration with our business partners around the world in making patents free of charge to promote popularization of the QR Code.In these ways,the QR Code development process embodied the DENSO Creed at every step.The process also encapsulated DENSO Culture in terms of b

151、eing pioneering,innovative,and creative while cherishing modesty,sin-cerity,and cooperation.I believe that these are the reasons why the QR Code was able to inspire people and society at large and be adopted around the world as a truly useful technology.Restoring DENSO Culture as We Move into the Fu

152、tureIn my time as president,I devoted my efforts to restoring DENSO Culture.My eight years in this position were marked with various chaotic events,including the once-in-a-century paradigm shift due in part to the progression of CASE as well as the occurrence of a quality-related issue,the COVID-19

153、pandemic,material shortages,and rapid price increases.Throughout this time,I endeavored to bring the Company back to its starting point and restore the spirit of our founding.As we expanded our business operations over the years,we lost sight of some very important things,including our commitment to

154、 quality,our customer-first approach,and our orga-nizational culture of close relationships and open communication between employees.I therefore continued to engage in honest dialogue with employees in each workplace in a sincere effort to change their awareness and behavior.As a result of Companywi

155、de initiatives,we have steadily fortified our management foundation and culture,which is a major prereq-uisite for corporate growth.I also feel that we have formulated a strong future outlook,including the vision for our business portfo-lio in 2035.In terms of our management indicators,in fiscal 202

156、4 we forecast revenue of 6.7 trillion,an operating margin of 9.0%,and ROE of 9.3%(as of the release of our first quarter financial results for fiscal 2024).This means that we are well within the range of achieving our targets under the Mid-term Policy for 2025,which include an operating margin of 10

157、%and ROE of 10%or higher.What has allowed us to reach this position has undoubt-edly been the support of not only the customers and global sup-pliers who have assisted us on a daily basis,starting with car manufacturers,but also our shareholders and other investors,whohave offered us their wholehear

158、ted encouragement.As a result of the many years of support from these stakeholders,our market capitalization has increased from roughly 3.9 trillion in 2015 to approximately 7.6 trillion in 2023,nearly doubling over this eight-year period(as of June 30,2023).We are deeply grate-ful for the unrelenti

159、ng support of all of our stakeholders,through-out the good times and the bad,and we are firmly committed to continue offering them good news and to meet their expectations moving forward.Continuing to Provide Value to Society While Always Keeping Our Sights on the External EnvironmentAs we boldly pu

160、rsue the resolution of significant social issues,including the pressing global issues of carbon neutrality and circu-lar economies,we will focus our attention on the flow of five essential elements in order to keep society in motion:people,goods,energy,resources,and data.By connecting these elements

161、 and managing them in an integrated manner,we aim to create a cycle of joy that ensures mutual happiness between people.To that end,we will further refine the three-pronged approach of mechanical parts,electronics,and software,which we have culti-vated in the mobility domain,and seek to expand this

162、approach into social domains.In addition,we will leverage our accumulated cutting-edge information technologies,such as the QR Code.By doing so,we will pursue value creation that is uniquely DENSO.To accomplish this,it is imperative that we keep our sights on the external environment and maintain a

163、firm understanding of society itself.In my role as chairman,I will put forth every effort to support internal business execution while striving to further enhance our involvement with external organizations.I also serve as chairman of the Japan Auto Parts Industries Association,and in this position

164、I aim to lead efforts that help strengthen the competitiveness of the overall supply chain in the automotive industry while closely collaborating with small and medium-sized enterprises.Furthermore,I will strengthen connections with companies that are outside of the automotive industry and seek to r

165、eflect insight and ideas from other industries and opinions from a diverse range of customers in DENSOs internal operations.With a firm aware-ness that DENSOs growth is made possible by the support of its customers,I will strive to ensure that we remain a company that is truly useful to society thro

166、ugh proactive dialogue with our customers.Passionately Taking On Challenges under a New Management Structure to Bring Smiles to People and Greater SocietyLooking at the world today,the operating environment continues to be challenging and the outlook of the global economy remains uncertain.In such a

167、n era,our resilience,willpower,and insight as a company are needed more than ever.If we lose our passion as a company,we then cannot face the changes occurring in the world and pursue bold challenges without the fear of failure.As we seek to restore DENSO Culture,we transitioned to a new management

168、structure in June 2023,in which I finally passed the baton of man-agement to the new president.It is my hope that,under this new structure,we can further boost our level of passion and push ahead with greater speed.The impetus for doing so is the passion we receive from our employees across the glob

169、e.As long as we can remain a passionate company empowered by the passion dis-played by our employees in their interactions with each other,I believe that under this new structure we will surely be able to resolve social issues and create a future brimming with smiles.No matter what changes occur ahe

170、ad of us,we will always cherish our starting point and continue our efforts to bring smiles to people and greater society,evolving DENSO Culture to cater to each gen-eration.I kindly ask for the continued support of our shareholders and other investors as we endeavor to do so.September 2023Koji Arim

171、aChairman&CEORepresentative Member of the BoardDENSO Integrated Report 202313MANAGEMENT MESSAGEFour Ideals of the DENSO CreedEstablished at the time of the Companys founding,the DENSO Creed sets forth a clear commitment to pursuing innovation in anticipation of changing times and to addressing socia

172、l issues through quality products and services.This commitment is also the starting point of our sustainability management,which we are currently accelerating.Be trustworthy and responsible.The trust that our predecessors worked earnestly to build over the years underpins the DENSO of today.We will

173、therefore maintain this trust and seek to build it up further so that we can pass it on to the next generation.By doing so,we will meet the expectations of soci-ety and fulfill our responsibility to ensure DENSOs future.Cherish modesty,sincerity,and cooperation.We work to refine not our appearance o

174、r job title but the essence ofwho we are as a part of DENSO,and we work in collaboration to perform our duties with sincerity.The sincere and cooperative rela-tionships we have with each other as employees will bring forth inspiration and help us build long-lasting relationships with our customers a

175、nd business partners.Be pioneering,innovative,and creative.By consistently leading the times with our research and creativity and continuing to refine our technologies and know-how,we will swiftly create new value that truly benefits society,thereby paving the way to the future.Provide quality produ

176、cts and services.We will earnestly approach each issue facing this ever-changing soci-ety and continue to bring hope and happiness to all people while aiming to provide our customers and society with products and services of the very best quality.History of Creating Value to Address Social Issues an

177、d Ambitious Initiatives for the Coming Era1950sPostwar Reconstruction and Motorization Taking on the challenge of resolving social issues using cutting-edge technologies from the time of our founding Developed the DENSO-GO electric vehicle Developed Japans first car and bus air-conditioning systems1

178、960s and 1970sPopularization of Private Cars and Emergence of Numerous Social IssuesTaking measures ahead of exhaust gas regulations and laying foundations for “peace of mind”products Developed exhaust gas-controlling products compliant with the worlds strictest regulations Began development of semi

179、conductors in antici-pation of the coming era1980sGlobalization and Trade Friction Accelerating the commercialization of safety systems for preventing traffic accidents causing fatalities Gradually realized the practical application of safety systems,including airbag sensing systems Commenced the ma

180、ss production of vacuum sensors,which represented the worlds first in-vehicle semiconductor sensorMobilityMechanical partsIncreasing Our Areas of ContributionElectronicsSoftware90200020231970Past,Present,and FutureDENSOs innovations start from a focus on the future and what mak

181、es people happy.Our mission is to resolve social issues from the perspective of sustainability.Based on this mission,we have continued to realize growth while consistently leading changes in the mobility domain to increase our areas of contribution and repeatedly pursuing innovations and new creatio

182、ns.During this 74-year journey,we have also boldly transformed our business portfolio while cultivating strengths and capital that will continue to be the source of our value creation well into the future.To ensure that we can leverage these strengths and be an essential company a century from now,w

183、e will forge ahead with portfolio reform that increases our areas of contri-bution further still.Market capitalization*Before adjustment for treasury stockRevenueFiscal 1951 to fiscal 1978 show non-consolidated revenue,while fiscal 1979 and thereafter show consolidated reve-nue.In addition,from fisc

184、al 2014,the financial statements have been prepared based on International Financial Reporting Standards(IFRS).(Japanese accounting stan-dards were employed up to and including fiscal 2013.)14DENSO Integrated Report 2023DENSO Integrated Report 202311981DENSOs Value Creation Story1990s and

185、 2000sGlobal Warming and Spread of Digital and Information TechnologiesContributing to eco-friendly lifestyles with core technologies Developed the QR Code,which increases effi-ciency at manufacturing sites Developed the worlds first electronic control-type common rail system Developed the worlds fi

186、rst inverter with dual-side cooling2010sICT Advancement and SDG Adoption Entering into a once-in-a-century paradigm shift Developed Global Safety Package,the first gen-eration of our advanced safety system Began providing services in the agriculture and factory automation fields2020sEscalation of So

187、cial Issues Aiming for excellence in the domains of green and peace of mind Developed Global Safety Package 3,the third generation of our advanced safety system Developed our first inverter to use SiC power semiconductorsMobilityIndustrySocietyMechanical partsSoftwareThree-pronged system-building ca

188、pabilitiesFurther solutions to social issuesIn December 2021,we established the“Heritage Center”with the aim of enabling all employees to return to DENSOs origins,which are represented by the DENSO Creed and the principles of quality and safety,and to provide them with an opportunity to con-sider wh

189、at they themselves want to pass on to the next generation of DENSO.At the DENSO Heritage Center,we have established areas that introduce events that happened at the time of the Companys founding,which represent the starting point of DENSO.We also have areas where visitors can reflect on DENSOs histo

190、ry of offering quality and peace of mind.The Heritage Center is visited by a large number of employees every day.Establishment of the DENSO Heritage CenterTradition of Sustainability ManagementThe DENSO Creed calls on us to“provide quality products and services,”expressing the essence of our approac

191、h to sustain-ability management,which focuses on benefiting society by utilizing businesses to pursue ambitious initiatives that address social issues.Our mission is to continue our legacy by putting into practice the commitment that our predecessors estab-lished when drafting the creed and by passi

192、ng on this commitment to the next generation.In advancing sustainability management,DENSO has incorporated future social issues into its Long-term Policy for 2030 and as an integral part of its material issues(Materiality),and the Company is addressing these social issues through business activities

193、.As well as maximizing our provision of green value and peace of mind valuetwo long-standing areas of focuswe have established“inspiring”as a watchword.Accordingly,we will provide society with new value that inspires diverse stakeholders.90200020231970DENSO Integrated Report 20

194、2315DENSO Integrated Report 20231(FY)2024Our Cultivated StrengthsP.2225Our Accumulated CapitalsP.2627Notes:1.Market capitalization is as of the end of July 2023.2.The projected figure for fiscal 2024 revenue is based on fiscal 2024 first quarter results.DENSOs Value Creation StoryHistory

195、of Innovation and CreationJust as it did when DENSO was founded,the commitment set out in the DENSO Creed is the Companys starting point to this day.With our second founding well underway,we must boldly take on unprecedented challenges,such as promoting initia-tives toward CASE*and realizing carbon

196、neutrality.By once again reflecting on the desire embodied in the DENSO Creed and returning to our starting point as a company,we will steadily move forward toward our aim of bringing happiness to people and society as a whole.*CASE:Connected,autonomous,shared&service,and electric1930s to 1950s:Taki

197、ng on the challenge of resolving social issues using cutting-edge technolo-gies from the time of our foundingExternal EnvironmentPostwar Reconstruction and MotorizationSocial NeedsInternational Standards of Technology and Quality1935:Taking On the Challenge of Producing Electrical Equipment In-House

198、 An automobile department was established within Toyoda Automatic Loom Works,Ltd.(currently Toyota Industries Corporation).In 1935,the executive director of Toyoda Automatic Loom Works,Kiichiro Toyoda,instructed Ryuichi Suzuki(who would later become a member of the Board at DENSO)to take on the chal

199、lenge of produc-ing electrical equipment in-house.However,developing such equipment proved chal-lenging due to the unreliable quality of electrical equipment at the time.In fact,Mr.Toyoda stated to Mr.Suzuki that this task seemed to be far harder than he had imag-ined,and he asked Mr.Suzuki whether

200、they should quit at that juncture.Mr.Suzuki pleaded to Mr.Toyoda to allow him to continue his efforts for one more month in order to realize in-house production.Sometime after doing so,the enthusiasm and persistence of Mr.Suzuki and the young engineers on his team led to the official adoption of ele

201、ctrical equipment in Toyoda vehicles.1949:Birth of NIPPONDENSO With the Japanese economy in an extremely difficult state due to the promotion of the Dodge Line by the General Headquarters of the Supreme Commander for the Allied Powers,the electrical equipment department split off from Toyota Motor C

202、o.,Ltd.,and was established as NIPPONDENSO CO.,LTD.The companys first president,Torao Hayashi,aimed to rapidly expand the company not just in Japan but also over-seas.For that reason,he expressed the companys determination to become indepen-dent by choosing the name NIPPONDENSO(“Nippon”meaning Japan

203、),rather than KARIYADENSO,AICHIDENSO,or TOKAIDENSO,which are names of the local area where the company was founded.1953:Start of Technical Cooperation with Robert Bosch GmbH In the early 1950s,a technological gap clearly existed between NIPPONDENSO and Western companies.Consequently,we urgently need

204、ed to achieve world-class tech-nologies and quality.At this juncture,we encountered German-based company Robert Bosch GmbH,which was an order of magnitude larger than us.Thanks to the mediation of Dr.Tokushichi Mishima,who was the inventor of MKM steel,and the determination of our management,we conc

205、luded a technical alliance with Robert Bosch.By learning from our new partner,we established the foundations of interna-tionally competitive technologies and quality.Specific Initiatives Beginning in the 1950s,we catered to the needs of customers,espe-cially Toyota Motor Corporation.At the same time

206、,we established and grew a business field centered on mechanical parts and realized the pro-vision of products supported by internationally competitive technolo-gies and quality.Green Value and Peace of Mind Value ProvidedDeveloped and mass-produced the DENSO-GO electric vehicle to help miti-gate gl

207、obal gasoline shortagesDeveloped Japans first car and bus air-conditioning systems.Although there was a concern that such systems would impede driving performance,these systems were able to overcome that notion and quickly grew in popu-larity due to their high level of convenience and comfort.Team i

208、n Charge of Electrical Equipment DevelopmentAt the time,a team of approximately 30 engineers and technicians devoted themselves to the in-house devel-opment of electrical equipment,often going without sleeping and eating.16DENSO Integrated Report 2023 Green Peace of mindDENSOs Value Creation Story19

209、60s and 1970s 1980s Specific Initiatives Received the Deming Prize,the most prestigious award for quality con-trol.Winning this prize laid the foundations for the“Quality First”approach and corporate culture that we still adopt to this day.Received the Okochi Memorial Production Prize in recognition

210、 of the high-precision,high-quality Monozukuri enabled by our integrated in-house production system Established the IC Research Center in 1968 in anticipation of a shift to the electronic control of automotive components;began developing semiconductors;and manufactured the automotive industrys first

211、 semi-conductors.Accumulated a large amount of knowledge on semiconduc-tor and IC specifications by conducting thorough analysis Established Nippon Soken Inc.through a joint investment with 10 other automotive component manufacturers with the aim of researching technologies to address exhaust gasSpe

212、cific Initiatives Established manufacturing companies and technical centers overseas to realize regionally optimized product development,manufacture,and supply capabilities Helped address pollution,global warming,and other social issues by acting as a trailblazer in the creation of products complian

213、t with envi-ronmental regulations Launched a project for the practical application of robots.Furthermore,the development of such technologies as barcode readers and RFID,*which we pursued in a similar manner as we did with robots,helped establish the foundation of our current factory automation(FA)b

214、usiness.Focused efforts on progressing in electronic control-type systems and other software fields Commercialized a series of safety system products that helped improve the safety performance of vehicles*RFID(radio frequency identification):A non-contact system that reads data from RF tags using el

215、ectromagnetic wavesGreen Value and Peace of Mind Value ProvidedAchieved the practical application of electronic fuel injection(EFI)systems ahead of regulations on exhaust gas.After doing so,we continued to develop products that respond to environmental regulations,one after the other.Developed O2 se

216、nsors as an important tool for controlling exhaust gas.Vehicles equipped with DENSO systems comprising EFI,O2 sensors,and a three-way catalyst were able to comply with Japans Showa 53(1978)exhaust gas regulations,which were said to be the worlds strictest regula-tions at that time.The number of cars

217、 equipped with these systems began to rapidly increase.Participated in the Comprehensive Automobile Traffic Control System(CACS)project initiated by the Ministry of International Trade and Industry(currently the Ministry of Economy,Trade and Industry).The technologies cultivated through our particip

218、ation in this project would later help us develop car navigation systems and connected driving products.Green Value and Peace of Mind Value ProvidedDeveloped the worlds first electronic control-type diesel pumps,which impressed the world with their ability to control exhaust gas,reduce fuel consumpt

219、ion,and realize high outputCommenced the mass production of vacuum sensors,which represented the worlds first in-vehicle semiconductor sensor.With this technology,we led the way ahead of other companies by equipping semiconductors with sensors and thereby adding value.Gradually realized the practica

220、l application of safety systems,including anti-lock brake systems,airbag sensing systems,and forward collision warning systemsExternal EnvironmentPopularization of Private Cars during the Period of Rapid Economic Growth Together with the Emergence of Traffic Accidents,Air Pollution,and Numerous Othe

221、r Social ProblemsSocial NeedsHigh-Mix,Variable-Volume Production Capabilities and Development of Environmental and Safety TechnologiesExternal EnvironmentGlobalization and Trade FrictionSocial NeedsOverseas Production and Higher-Performance VehiclesPreparing to address social issues by cementing the

222、 foundations of global competitiveness and by advancing strategic initiatives for the age of electronicsCommercializing environmental and safety products ahead of the times and strengthening software capabilitiesElectronic fuel injection systemDENSO(MALAYSIA)SDN.BHD.at the time of its establishment

223、in 1980In-vehicle test in EuropeReceived the Deming PrizeDENSO Integrated Report 202317DENSOs Value Creation Story1990s 2000s Green Value and Peace of Mind Value ProvidedFocused on the development of car air-conditioning systems that use natu-ral refrigerant to curb the destruction of the ozone laye

224、r caused by conven-tional refrigerantDeveloped the worlds first electronic control-type common rail system.Pioneered the way with common rail systems that would later dominate themarketCommercialized household heat pump water supply systems that contribute to energy savings.Also,developed water filt

225、ers,QR Codes,and other prod-ucts that make peoples lives more comfortableGreen Value and Peace of Mind Value ProvidedDeveloped the worlds first inverter with dual-side cooling.DENSOs techno-logical capabilities were acknowledged through the development of these inverters,leading to a rapid increase

226、in their production volume.Developed the worlds first forward-looking radar sensor using millimeter waves.Able to operate even in rainy and foggy environments,these sensors helped enhance the safety of automobiles.Honing our expertise in the creation of comfortable,convenient vehicles and boldly tak

227、ing on new fieldsUtilizing electronics and software technologies to promote the introduction of electric vehicles and to popularize safety productsAdvanced Research and Innovation CenterStructure for cooling both sides of the inverterQR CodeSpecific Initiatives Established the Fundamental Research C

228、enter(currently the Advanced Research and Innovation Center),which has created a large number of innovative technologies that have led to the development of world-first and world-best products Commenced Excellent Factory(EF)activities.We began to expand activ-ities on a global basis to improve our f

229、actories,led by personnel on the front lines of production.These EF activities represent the origins of DENSOs ambitious activities focused on quality improvements.Utilized core technologies to develop products that contributed to eco-friendly lifestyles Developed the QR Code with large capacity and

230、 high-speed readability that is compatible with high-mix,low-volume production at plantsSpecific Initiatives Established DENSO Training Academy Thailand,our first overseas regional training center.This center helped us build a structure for edu-cating engineers and technicians on a global basis.Form

231、ulated Eco Vision 2005.Leveraged outstanding environmental technologies to accelerate the reduction of CO2 emissions from busi-ness activities Marketed products for CASE vehicles to promote the introduction of electric vehicles and the popularization of safety productsExternal EnvironmentCollapse of

232、 the Bubble Economy and Acceleration of International Debate on Global WarmingSocial NeedsCompact,Fuel-Efficient Vehicles and Environmentally Friendly LifestylesExternal EnvironmentSpread of Digital and Information Technologies and Creation of International Frameworks and Regulations for Global Warm

233、ing PreventionSocial NeedsDiversification of Powertrain Technologies and Introduction of Products for Hybrid Electric Vehicles(HEVs)and Other Electric Vehicles18DENSO Integrated Report 2023 Green Peace of mindDENSOs Value Creation Story2010s to 2020s 2030s Green Value and Peace of Mind Value Provide

234、dDeveloped motor generators.These motor generators realize highly effi-cient,eco-friendly power generation and driving.Saw cumulative production of inverters,which are our mainstay product in the environment field,reach 20 million units worldwide in 2021Developed Global Safety Package,an advanced sa

235、fety system using a mon-ocular camera and millimeter-wave radar sensor.Equipped with this safety system,the Toyota Prius received the top five-star rating in the European New Car Assessment Programme(Euro NCAP).Developed Global Safety Package 3,which helps improve safety perfor-mance by recognizing

236、the environment surrounding the vehicle.We are expanding the scenarios in which to use accident prevention,safety,and driver support products.We are also commencing efforts to expand the global sales of such products based on the concept of realizing compact-ness and low cost.Developed retrofitted a

237、cceleration control devices for when drivers acciden-tally step on the gas pedal,thereby enhancing the safety performance of vehicles already sold and on the roadTackling a once-in-a-century period of change by maximizing value in the domains of green and peace of mindAiming for excellence in the do

238、mains of green and peace of mindOur Vision for the Future:Long-term Policy for 2030Specific Initiatives Completed the establishment of technical centers in seven regions across the globe.Through these centers,we have set up a structure to create competitive products that can promptly meet diversifyi

239、ng local needs.Formulating comprehensive strategies in the domains of green and peace of mind Established the Electrification Innovation Center(EIC),which promotes efforts to strengthen the development and production of products powered by electricity,and Global R&D TokyoHaneda,which conducts the de

240、velopment of automated driving and other technologies.By doing so,we have accelerated our R&D activities in the domains of green and peace of mind.Developed high-performance advanced safety systems and improved the safety performance of existing vehicles through the provision of retrofitted products

241、 Began providing services in the agriculture and factory automation fields Strengthening our development structure and global production struc-ture for products powered by electricity,including at the Hirose Plant and the EIC.Through these efforts,we aim to realize an annual produc-tion of 12 millio

242、n inverters by 2025.Specific Initiatives Expand businesses and address social issues in the fields of mobility,industry,and society with a view to realizing a carbon-neutral society and eliminating traffic accident fatalities by 2035 Accelerate the development of technologies and partnerships with r

243、egard to five essential elements(the free movement of people,the flow of goods,energy utilization,minimization of resource requirements,and the flow of data)with the aims of realizing high-value mobility and man-ufacturing that contributes to peace of mind,supporting the continua-tion of societys ac

244、tivities,and catering to diverse values and views of well-beingExternal EnvironmentICT Advancement and SDG Adoption,and an Escalation of Social IssuesSocial NeedsConversion to CASE VehiclesExternal EnvironmentGlobal Warming,Resource Shortages,and Escalation of Such Social Issues as an Aging SocietyS

245、ocial NeedsRecycling-Based Society Centered on Renewable EnergyInspiringGreenPeace of MindDENSO Integrated Report 202319DENSOs Value Creation StoryFoundations Underpinning Value CreationDENSO PhilosophySocial IssuesCycle of StrengthsHuman Capital P.7477DENSO CreedDENSO SpiritFoundation of Our Value

246、CreationThe DENSO Creed,which embodies the spirit of our founding,and the DENSO Spirit,which serves as an action guide-line,form the foundation of our value creation.Each and every employee respects the DENSO Creed and DENSO Spirit and works to earnestly reflect them in their actions.This,in turn,he

247、lps invigorate the value cre-ation process.Creating the basis of trailblazing valueOffering new value by combining fieldsDeepening and expand-ing business foundationsProviding products and services as solutionsCapital Strategies P.6697Financial CapitalHuman CapitalIntellectual CapitalNatural Capital

248、Manufacturing CapitalSocial and Relationship CapitalDENSOs Value Creation ProcessMaximizing the Value of“Green”and “Peace of Mind”to Continue to Grow with SocietyDENSO puts sustainability management into practice by taking the resolution of social issues as a starting point and then utilizing accumu

249、lated strengths and capital to implement business activities and advance value creation processes.Through this approach,we aim to contribute to a sustainable society and enhance our corporate value.Tradition of Sustainability Management P.2829Advanced R&DHighly efficient,high-quality manufacturingRo

250、bust business foundationsThree-pronged solutionsStrengths P.2225Reinforcing Our Strengths20DENSO Integrated Report 2023DENSOs Value Creation StoryFoundations Underpinning Value CreationRealizing a Sustainable SocietyContributing to the SDGs through our corporate activitiesAdvancement of Three Priori

251、ty AreasGrowth StrategyCorporate Governance P.98118MobilityIndustrySocietyPrincipal social value we offer and related indicators(Fiscal 2026)Realization of carbon-neutral manufacturing:Achievement of carbon-neutral plants through the procurement of renewable energyand the utilization of carbon credi

252、ts(carbon neutrality without carbon credits by fiscal 2036)Contribution to an environmentally friendly mobility society:Dissemination of electric vehicle components(production of invert-ers:12 million units;production of thermal management products:2.8 million units;production of power supply system

253、s:7.6 million units)Contribution to the elimination of traffic accident fatalities:The types of traffic accident covered by DENSO safety products accountfor 56%of the traffic accidents that result in fatalities(aimto increase this to 100%by fiscal 2036)Principal financial value we offer and related

254、indicators(Fiscal 2026)Expansion of equity spread over the medium to long term(ROE:10%or higher;operating margin:10%)Cash generation through business portfolio reform(Electrification domain revenue:1 trillion;ADAS domain revenue:500 billion)Balance between disciplined restraint and targeted investme

255、nt(Capital expenditures:350 billion;R&D expenditure:450 billion)Long-term,stable shareholder returns(DOE:3.0%or higher;flexible share buybacks)Controlling Factors That Negatively Impact Our Value Creation We are implementing measures to respond to risks that could negatively impact our value creatio

256、n.Efforts to Maximize the Value of“Green”P.9093Risk Management and Compliance P.114118Undertaking Initiatives toward Respecting Human Rights P.96Seven Core BusinessesLong-term Policy for 2030MaterialityImportant issues for achieving the Long-term Policy for 2030Mid-term Policy for 2025Serves as a pa

257、th for completing targets by fiscal 2026 that will help us realize our Long-term Policy for 2030Strategies Related to Green and Peace of MindMedium-to long-term strategies aimed at promot-ing efforts toward maximizing the value of green and peace of mindGreenCorporate FoundationPeace of MindStrength

258、ening Our CapitalsDENSOs VisionMaximizing the Value of“Green”and“Peace of Mind”to Be InspiringGreenInspiringPeace of MindOverview by Product P.4865DENSO Integrated Report 202321DENSOs Value Creation StoryOur Cultivated StrengthsOver its 70-year history,DENSO has cultivated various unique strengths.S

259、ince the founding of the Company,these strengths have been augmented and passed down to become part of its DNAthe DENSO Spiritwhich permeates the actions of all DENSO employees around the world.The connections between these strengths have driven DENSOs growth over the years.Amid a challenging busine

260、ss environment going forward,DENSO will further enhance these strengths as the driving force behind value creation that is uniquely DENSO.Robust Business FoundationsDENSOs business activities are supported by robust foundations built over many years,giving the Company an advantage that cannot be eas

261、ily replicated.The driving force behind all our business activities is our rela-tionships with diverse stakeholders,including customers,suppliers,and business partners,as well as the expertise of our approximately 170,000 employees and 200 Group companies worldwide.By evolving and increasing such re

262、lationships and expertise,we will realize further growth.1954 Established the Technical Training Center.This center fostered the principles of“Monozukuri is Hitozukuri(Our performance relies on our people)”and“Engineering and technique go hand in hand.”These principles continue to be passed down wit

263、hin the Company.Began establishing a network of service stations(centers)to enhance quality for end-users in each region across Japan1959 Deepened cooperation with suppliers by establishing the DENSO Cooperative Association(currently DENSO HISHOKAI),which currently accounts for annual procurement of

264、 2.7 trillion from approximately 7,360 suppliers1966 Opened a Chicago sales office and a Los Angeles branch office.Anticipated trade liberalization and other global trends through the establishment of this first overseas sales office2016 Formulated Eco Vision 2025.Accelerated concrete measures aimed

265、 at addressing environmental and energy issues and thereby helping realize a sustainable society2020 Opened the Hirose Plant,which together with the Electrification Innovation Center established outstanding development and production capabili-ties and became the core of our electrification domainRoo

266、ts of Our Strengths Accelerating Global Expansion of the Agricultural Production Business to Address Global Food and Agriculture IssuesWith the climate change-related instability of agricultural production and a decrease in the number of farmers emerging as issues in recent years,the establishment o

267、f stable,sustainable agricultural production capabilities is needed.Aiming to address such issues in the food and agriculture field,in August 2023 DENSO announced its acquisition of all shares of Certhon Group,a Dutch horticultural facility operator.With a history of more than 125 years,our new acqu

268、isition is a leading corporate group renowned for world-class advanced technologies related to horticulture.The group excels not only in the development of solutions tailored to diverse customers but also in integration capabilities that combine multiple sys-tems to realize optimal solutions.By comb

269、ining the process design and automation technologies that DENSO has developed in the automotive field with Certhon Groups cultivation and horticultural system technologies,the companies will develop innovative farm models and globally roll out solutions that meet regional characteristics and needs.F

270、urther Enhancing Our StrengthsThe Key to Our Strengths Mutual Advancement with Business PartnersAs our business domain extends beyond auto-mobiles,we are strengthening our alliances even further based on trust cultivated over many years.These alliances will enable us tocombine our strengths with tho

271、se of part-ners and thereby realize entirely new types ofvalue.Delivery of Value to People WorldwideTo grasp the needs and trends of each region in a timely,accurate manner and reflect them in R&D and manufacturing,we have estab-lished production,development,and sales bases around the world.At the s

272、ame time,all of our employees make concerted efforts to develop our businesses and deliver value.Personnel Who Create New ValueBased on the belief that excellent personnel make the best products,we view human resources as our most important management resource.DENSO is developing the leaders and hig

273、hly skilled engineers and technicians who will drive the Company forward.Bases in 35 Countries and RegionsMonozukuri is HitozukuriCreation of AlliesGlobal PresenceStakeholdersHuman ResourcesNumber of employees worldwide:Approximately 170,000Number of alliances:Stakes in more than 80 companies*In the

274、 10 years through fiscal 2023Number of bases worldwide:19122DENSO Integrated Report 2023DENSOs Value Creation StoryAdvanced R&DWith a commitment to world-first and world-best offerings,DENSO has contributed to mobility by creating an array of competitive products that accurately cater to social need

275、s.Amid increasingly complex social issues and diversifying values,we aim to extend the scope of our contribution beyond mobility to encompass society as a whole.To this end,we have defined priority fields in accordance with our green and peace of mind princi-ples.Moreover,we are planning technologie

276、s and strengthening R&D capabilities with an eye on the future.We will continue creating new value through our technical centers and laboratories around the world as well as through collaborative initiatives that transcend Group boundaries and include external research institutions and universities.

277、1953 Commenced a technical cooperation agreement with Robert Bosch GmbH.Under this agreement,we established a technological and production base with the aim of becoming a comprehensive manufacturer of automotive parts that can keep pace with global companies.1985 Established Nippondenso America,Inc.

278、,with which we jointly created our first overseas technical center.Through this center,we built an optimized structure for the development,production,and supply of local products.1991 Established the Fundamental Research Center(currently the Advanced Research and Innovation Center),which conducts R&

279、D on future technolo-gies that cover a wide range of fields2014 Completed the establishment of technical centers in seven regions across the globe.Through these centers,we have set up a structure to create competitive products that can promptly meet diversifying local needs.2020 Established the Elec

280、trification Innovation Center(EIC),which strengthens our capabilities in the development and production of electric vehicle components.Accelerated R&D activities in the green and peace of mind domains2022 Received IEEE Corporate Innovation Award in recognition of our development of the QR Code and o

281、ur contribution to its global popularizationRoots of Our Strengths Developing Secure Industry-wide Data Linkage for the Electric Vehicle AgeIn addressing increasingly complex social tasks,such as the realization of a resource-recycling society and carbon neutrality,the establishment of systems that

282、facilitate accurate transmission of data throughout the supply chain is becoming increasingly important.With a view to building an industry-wide ecosystem for electric vehicle batteries,NTT DATA JAPAN CORPORATION and DENSO have begun studying the establishment of a data space that will enable data m

283、anagement throughout battery life cycles.The companies will build the data space by leveraging DENSOs traceability technologieswhich utilize in-house-developed QR Code and in-vehicle blockchain technologyas well as the Companys expertise in the automotive industry together with NTT DATA JAPANs know-

284、how and extensive track record in building and operating large-scale platforms.NTT DATA JAPAN and DENSO have concluded a basic agreement on studying a joint venture.Also,to create an industry-wide ecosystem for electric vehicle batteries,the companies made a joint application to a solicitation of pr

285、oposals under the subsidy program of the Ministry of Economy,Trade and Industry,officially receiving approval as business operators in September 2022.Our goal is for the ecosystems platform to serve as a next-generation information infrastructure that allows the secure use of data not only among com

286、panies in industries related to electric vehicle batteries but also companies in other industries.With the aim of commercializing services by the end of fiscal 2024,NTT DATA JAPAN and DENSO will launch a study on a common platform for the automotive and manufacturing industries.Further Enhancing Our

287、 StrengthsThe Key to Our Strengths Technical Centers in Seven Regions throughout the World and Laboratories in Epicenters of InnovationWe have established technical centers in seven regions across the globe,in addition to laboratories in Canada,Israel,Silicon Valley,and other epicenters of innovatio

288、n.We also promptly incorporate diversified regional needs into our development process to create competitive products,which are subsequently delivered to our customers.Advanced Research That Anticipates Future MobilitySince its establishment in 1991,our Advanced Research and Innovation Centers missi

289、on has been to contribute to an advanced automotive society through the creation of innovative technologies.Guided by this mission,the center has pioneered advanced technologies in such fields as semiconductors,electronic materials,AI,and ergonomics.By integrating in-house technologies and skills as

290、 well as by creating industrygovernmentacademia partnerships and collaborations with business partners,the Advanced Research and Innovation Center creates innovative technolo-gies that help resolve social issues.Creating Over 180 World-First ProductsWe have established“contributing to a better world

291、 by creating value together with a vision for the future”as the DENSO Philosophy.By keenly ascertaining social changes,we have been engaging in product development with a commitment to world-firsts since our estab-lishment.We have created over 180 world-first products,including gas injection heat pu

292、mp systems,common rail systems,millimeter-wave radar sensors,and ejectors,which have provided us with a driving force forgrowth.Advanced Research with a View to the FutureCommitment to World-FirstsGlobal Development NetworkAdvanced TechnologiesSpeedForesightNumber of world-first products:Over 180Num

293、ber of global R&D bases:13Number of new patent registrations in the automotive industry(fiscal 2023):Japan,3;United States,8DENSO Integrated Report 202323DENSOs Value Creation StoryThree-pronged Solutions for SystemsDENSO has always optimized its business portfolio ahead of the times to provide soci

294、ety with valuable prod-ucts and services that meet customer needs.For example,we expanded from our founding business in the mechanical parts field to foray into the electronics and software fields.While expanding,we enhanced our capabilities in each field and,as a result,we are now able to go beyond

295、 the manufacture of stand-alone com-ponents to offer optimal whole-system solutions that combine mechanical parts,electronics,and software.These system solution capabilities set us apart from competitors.1995 Became the first in the world to mass-produce an electronic fuel injection system(common ra

296、il system),a precursor to current system solutions,which are aligned with overall vehicle specifications as a matter of course2007 Mass-produced an inverter with dual-side cooling.Combined our proprietary technologies from the mechanical parts,electronics,and software fields to develop a differentia

297、ted hybrid system,which was highly acclaimed by the market2008 Launched the DENSO Project Companywide initiative.Adapted to stricter environmental regulations by enhancing ability to provide optimal vehi-cle solutions that straddle technology fields2017 Developed the worlds first gas injection heat

298、pump system for mass-produced vehicles.Helped increase driving distance by managing the heat of the entire vehicle2021 Began recurrent education program for software engineers.Met the growing need for software development and supported employees in transfer to growth fieldsRoots of Our Strengths The

299、 Key to Our Strengths Realization Capabilities Unique to a Comprehensive Systems ManufacturerIn addition to the mechanical parts field,in which we have been engaged since our earliest days,we have been involved in the electronics and soft-ware fields for more than half a century.DENSO has contribute

300、d to the development of mobility by combining its technologies in the fields of mechanical parts,electronics,and software to create next-generation inverters and advanced safety systems.An extensive product lineup and a long track record of utilizing and verifying tech-nologies in the real world pro

301、vide foundations for our efforts to improve each technology and real-ize world-beating systems.Implementation of Technology IntegrationAround the world,DENSO professionals spe-cializing in the fields of mechanical parts,elec-tronics,and software absorb the leading-edge technologies in each region an

302、d benefit the world by conducting rigorous evaluation and testing of products under actual operating conditions,including temperatures and usage methods.At each base,our engineers collabo-rate globally with customers and companies in other industries to move technologies forward and bring society th

303、e most advanced technol-ogies and products.Provision of Value That Exceeds ExpectationsWe are able not only to provide high-performance,highly reliable products and ser-vices but also to use relationships of trust with customers worldwide to gain a timely,accurate understanding of their vision and n

304、eeds as well as the needs of end-users.Based on this competence and insight,we will propose solutions and participate in the early stages of vehicle development and,on occa-sion,participate in vehicle development in close collaboration with customers.Even as the concept of vehicles evolves in the CA

305、SE vehicle era,we will continue to realize unchanging DENSO-style value.World-Class EngineersAbility to Identify Customers True NeedsProven Technologies for Mechanical Parts,Electronics,and SoftwareHuman ResourcesRealization CapabilitiesExpertise and Know-HowNo.2 share of the global market for autom

306、otive componentsEstablishment of the IC Research Center:1968Fiscal 2023 R&D expenditure:521.6 billion Evolving Our Software CapabilitiesToward Realization of a Vehicle Security Monitoring ServiceNTT Communications Corporation and DENSO are collaborating to provide a security monitoring service for v

307、ehicles that will protect vehicles from cyberattacks.With the rapid proliferation of connected vehicles in recent years,cyberattacks are steadily increasing in sophistication.Utilizing their respective expertise in the IT and automotive fields,the companies will work together to provide a service th

308、at monitors connected cars,detects and analyzes attacks at an early stage,and takes appropriate countermeasures.Moreover,DENSO is actively promoting the standardization of vehicle security technologies through Japan Automotive Software Platform and Architecture(JASPAR).*1 Also,we are contributing to

309、 the Japan Automotive Information Sharing and Analysis Center(J-Auto-ISAC),*2 which enhances the security readiness of the wide range of companies in the automotive industry by expediting the sharing of information on cyberattack methods and software flaws targeted by cyberattacks.*1 A standardizati

310、on body for automotive technology*2 A general incorporated association that collects and analyzes cybersecurity information and promotes the creation of infrastructure to protect connected vehiclesFurther Enhancing Our Strengths24DENSO Integrated Report 2023DENSOs Value Creation StoryHighly Efficien

311、t,High-Quality MonozukuriSince its inception,DENSO has consistently emphasized the creation and utilization of in-house technologies.We design and manufacture equipment,production lines,materials,and processing methods.This emphasis on in-house Monozukuri(manufacturing)has enabled us to provide soci

312、ety with products that give concrete form to the leading-edge technologies conceived by our R&D team.Having our own production technologies has also allowed us to develop high-speed,efficient production lines and compact facilities as well as stream-line distribution and inspection.Moreover,in recen

313、t years we have been digitalizing know-how accumulated over many years of manufacturing and utilizing it as explicit knowledge.Such initiatives are enabling us to real-ize highly efficient,high-quality Monozukuri that adds even more competitiveness and value to our products.1968 Created the IC Resea

314、rch Center to establish a structure for the production of semiconductors completely in-house in anticipation of the shift to the electronic control of automotive parts in the future1972 Established our first overseas production company.Since then,we have accelerated the establishment of additional o

315、verseas production compa-nies and conducted production activities that meet the needs of each region.1979 Received the Okochi Memorial Production Prize.This prize was received in recognition of our highly accurate,high-quality Monozukuri that was realized through our comprehensive in-house manufactu

316、ring of production lines and equipment.1984 Launched a project for the practical application of robots.Furthermore,the development of such technologies as barcode readers and RFID,*which we pursued in a similar manner as robots,helped establish the foundation of our current factory automation(FA)bus

317、iness.1997 Commenced Excellent Factory(EF)activities.Through plant improvement led by frontline production personnel,globally developed a kaizen(improvement)culture,which is the source of our ambitious improvement activities2019 Began operating Factory-IoT,which networks plants worldwide to enable t

318、he accumulation,analysis,and utilization of various data.Took advan-tage of digital technologies to accelerate long-standing improvement activitiesRoots of Our Strengths Saving Energy by Utilizing Data and Mobilizing All PersonnelTo save energy in frontline Monozukuri operations,DENSO is incorporati

319、ng data utilization expertise it acquired when improving the efficiency and quality of production activities.(1)Converting veteran employee insights into explicit knowledge so that anyone can benefit from the veterans understanding and wisdom(2)Using dedicated tools to visualize normal and abnormal

320、conditions,automatically calculate effects,and facilitate the data-driven flagging of situ-ations requiring attention(3)Calculating the energy required for the manufacture of a single product to establish management indicators that can evaluate improvement efforts regardless of production fluctuatio

321、nsBy incorporating the above three features of data utilization into the management of energy-saving activities and systematizing them,we have realized data-driven energy-saving activities that are not dependent upon particular individuals and to which all employees can proactively contrib-ute.More

322、specifically,we created energy loss analysis models based on veteran employee insights,standardized data analysis results into“diagnos-tic tables,”and then introduced KPIs that were acceptable to all personnel.As a result,production line personnel are now able to manage energy savings themselves.The

323、 aforementioned efforts have led to the discovery of new measures,which are enabling energy savings of between 1%and 5%on each pro-duction line.Moreover,personnel continuously pursue a 4%annual improvement in energy savingsDENSOs ambitious energy-saving target.In recognition of its advanced data-dri

324、ven energy-saving initiatives,in fiscal 2023 DENSO received an energy conservation awardthe Director-General Prize of the Agency of Natural Resources and Energy.Further Enhancing Our StrengthsThe Key to Our Strengths Working to Improve Productivity That Connects People and Factories GloballyWe analy

325、ze the abundance of data we have on people,products,and facilities and convert it into valuable information,such as information on signs of equipment flaws and information on the know-how of experts.We offer such information to people that desire it at the times they need it and in a format that the

326、y prefer.By doing so,we are accelerating activi-ties aimed at making improvements and con-tributing to the growth of people.The linking of approximately 130 plants globally is improving productivity Groupwide.Eliminating Product Defects and Lost Operational TimeAll plant personnel participate in EF

327、activities led by plant managers.By seeking overall plant optimization and conducting careful verifica-tion before production line start-ups,EF activi-ties create plants in which issues are readily identifiable.When issues occur,all plant per-sonnel address them by continuously making improvements.I

328、n this way,EF activities foster personnel who are particularly skilled in realiz-ing improvements and enable DENSO to achieve world-class competitiveness.Mass Production of World-First and World-Best ProductsDENSO boasts world-class micro-processing accurate to 1/1000mm and assembly lines that incre

329、ase both production efficiency and quality.Our research on leading-edge produc-tion,elemental,processing,and measurement technologies as well as our development of production lines and systems that incorporate these technologies underpin products with world-leading performance and quality.Excellent

330、Factory(EF)Activities That Realize Growth for Both Factories and PeopleWorld-Leading Production and EngineeringFactory-IoT(F-IoT)That Leverages the Knowledge of People to the Greatest Extent PossibleFrontline CapabilitiesAnalytical CapabilitiesTechnological CapabilitiesAmount of capital expenditures

331、 (fiscal 2023):366.8 billionNumber of plants with F-IoT:Approx.130Energy conservation grand prize award:Received for 13 consecutive years*RFID(radio frequency identification):A non-contact system that reads data from RF tags using electromagnetic wavesDENSO Integrated Report 202325DENSOs Value Creat

332、ion StoryOur Accumulated CapitalsThe capitals that we have accumulated while achieving growth as a company now support our business activities and provide us with a source for enhancing our corporate value.Efforts to refine the substance of the strengths that drive our growth will allow us to reinfo

333、rce our human,manufacturing,intellectual,natural,and social and relationship capitals,which in turn will help us increase our financial capital.To realize sustainable growth through this kind of cycle,we will not only maintain but also strengthen these capitals going forward.Correspondence of Financial and Non-Financial Capitals to Business Growth and Social Issue ResolutionCapitalsOur VisionKPIs(