Hitachi Cable, Ltd.© 2007 Hitachi Cable, Ltd. All rights reserved. 5 1．Hitachi Cable Group Initiatives （3）Medium-Term Management Plan “BEGIN”—Basic Growth Strategy Progress

Hitachi Cable, Ltd.Auto Parts Business Strategy

　　　　　　March 30, 2007

Shinichi SusukidaExecutive OfficerDeputy Group Executive, Electronic & Automotive Products Group General Manager,Automotive Business Promotion Center

2© 2007 Hitachi Cable, Ltd. All rights reserved.

Auto Parts Auto Parts Business StrategyBusiness Strategy

Contents

３．Initiatives Targeting FY2011

２．The Auto Parts Business

１．Hitachi Cable Group Initiatives


１．Hitachi Cable Group Initiatives　

（１）Company Overview

Established: 　 April 10, 1956 Capital: 　 ¥25.9 billion

Representative: 　 Norio Sato, President & CEO

Consolidated net sales: 　 ¥425.1 billion (FY06)

Consolidated operating income: ¥11.0 billion (FY06)

Consolidated workforce: 15,199 employees (As of March 31, 2006)

Stock exchange listings: 1st Section, Tokyo and Osaka stock exchanges (Code: 5812)

Consolidated subsidiaries: 44 companies(domestic: 18; overseas: 26; as of March 31, 2006)



（２）Basic Management Approach

Corporate Vision

Devoting Ourselves to Peak Performance in Communication

Contributing to society by continuing to improve the speed, accuracy and

efficiency of energy and information

Code of Conduct

Surpass Customers’ Expectations

Continue to Progress in Manufacturing

Keep to the Straight and Narrow



（３）Medium-Term Management Plan “BEGIN”—Basic Growth Strategy

Progress in manufacturing

Progress inhuman assets development

Business growth and expansionSustained growth in profitability

Business growth and expansionSustained growth in profitability

Record stable profits in core businesses and concentrate resources in fields promising growth Record stable profits in core businesses and concentrate resources in fields promising growth

FY07 　Plan BEGIN:　Breaking through with our Energy and Going for INnovation approach

“Begin Transformation by Mustering Group-wide Strengths”

＋

StructuralReform Phase

New Growth Phase

Com

pany

’s Se

cond

Foun

datio

n

Com

pany

’s Se

cond

Foun

datio

n



（４）Medium-Term Management Plan “BEGIN”—Concentration of Management Resources

●Electronics wires and cables (industrial cables and magnet wires)

●Copper products

●Brake hoses

●Electronics (digital home appliances and semiconductors)

●Wireless, broadcasting and information networks

●Automotive (HEV, electric components, 　　and sensors)

Aggressive investments in major target fields

Ensure profits from core products

Concentrate management resources on major target fields


Auto PartsAuto PartsBusiness StrategyBusiness Strategy

Contents





　FY06 　¥425.1 billion

44(1%)

Others


（１）Positioning of the Auto Parts Business

Auto Parts Auto Parts BusinessBusiness

1,955(46%)

1,519(36%)

732(17%)

Wires and Cables

Information and Telecommunications Networking

Sophisticated Materials

11％



（２）Business History—Milestones

　　　　　　　　

1969 　Started automotive hose business—delivered brake hoses　1971 　　Started production of automotive wire　　1987 　　　Established hose manufacturing company in the U.S.　　　1994 　　　Established hose manufacturing company in Mexico　　　　1996 　　　　Started producing electric parts—started producing

ABS sensors　　　　　1999 　 Established hose manufacturing company in the Philippines　　　　　　2000 　　Established hose manufacturing company in the U.K.　　　　　　　　　Started producing power supply cables for HEVs　　　　　　　　2003 Established hose manufacturing company in Thailand　　　　　　　　　　　　　　Expanded magnet wire business—delivered

rectangular magnet wires for HEVs　　　　　　　　2005 　　　　　Established Automotive Business Promotion Center

　　　　　　　　　　2006 　　　　　Started production of hoses in China　　　　　　　　　　　　2007　　　　　　Relocated and expanded Thai hose manufacturing

companyExpanded HEV power cable harness factory in the U.S. 　



（３）Medium-Term Plan Targets

[[FY2011 Business Scale: FY2011 Business Scale: ¥¥80.0 Billion80.0 Billion ]]

＊Targets set when the Automotive Business Promotion Center was established in FY2006 (Copper: ¥500 thousand/ton)

Actual Forecast Target Target Target Target

0

20.0

40.0

60.0

80.0

100.0

巻線

２００６２００７２００８２００９２０１０２０１１

TargetTarget

４１.６４５.０４６.９

５８.０

８０.０

6.5

12.6

9.0

18.8

(bill

ion/

year

)

Sophisticated materials

Magnet wires

Electric parts

Hoses

FY



（４）Market Environment and Basic Strategies

Key Target Fields

Core Product FieldsTarget steady growth in the global market centered on brake hoses 　　・Core technologies accumulated in “critical safety parts”, management

capabilities 　・Chance to enter market due to restructuring of the auto parts industry

in North America

Grow by introducing products in a timely manner to respond to “environmental issues”, “enhance safety” and

“facilitate onboard information systems”

＜Hitachi Cable’s Strategy＞

Increasing demand for electric motors stemming from environmental issues and surging oil pricesEnvironmentEnvironment

＜Technology Trends＞

　Increasing driving and pedestrian safetySafetySafety

InformationInformationAdvances in equipping cars with information systems, such as next-generation telematics


NavigationTelematics

Information

Brakes 　Steering Suspension

Safety

Motors 　Inverters 　Batteries

Environmen

t


（５）Hitachi Group’s Targeted System Fields



（６）Environment-Related Products

HEV power cable harnesses Magnet wires for HEVsDual-gauge copper strips for power devices

Environment



（７）Drive Control System-Related Products

*ABS: antilock brake system

ABS sensors Brake hosesTorque sensor coils

Safety


（８）Car Information System-Related Products

UWB: ultra-wideband　　　　FFC: flexible flat cable

Car antennas for telematics Shielded FFC for automotive useWireless LAN, UWB antennas

Information




（９）Global Development of Hose and Electric Components Businesses

Wales

Ayutthaya, Thailand Philippines

DetroitSuzhou, Jiangsu Province, China Indiana

Mexico

Densen Works Takasago Works

17© 2007 Hitachi Cable, Ltd. All rights reserved.Thailand Johor, Malaysia

Magnet wires: Hitachi Magnet Wire Corp.

Sophisticated materials: TsuchiuraWorks


（１０） Global Development of the Magnet Wire and Sophisticated Materials Businesses Shanghai, China


Auto Part Business StrategyAuto Part Business Strategy

Contents






（１）Brake Hoses

・Hitachi Cable market share target (Global) 2006　　　　　　2010１３％　　　　　２０％　

・Establish global framework capable of supplying 50 million units/year

Start Hose Production in Thailand　Location ：　Amata Nakorn Industrial Estate,

Chonburi　Site area ：　 13,450 ㎡　Start production ：　　2008

Topics

Establish Assembly Factory in China　Location ：　Suzhou (on existing Hitachi Cable (Suzhou) Co., Ltd. site)　Start production ：　　2007　　　



（２）HEV Power Cable Harnesses

HEV harness production facility

Facility expansion

Expand Production Facilities at Hitachi Cable Indiana, Inc.New capacity on-stream ：　　2007Sales target ： ¥6.0 billion/year (¥3.5 billion/year in North America)

(2010 target)

Topic

AC power cable harness for HEVs AC power cable harness for HEVs

・Cater to increasing number of hybrid vehicles in North America・Strengthen system for joint development in Japan and the U.S.

・Cater to increasing number of hybrid vehicles in North America・Strengthen system for joint development in Japan and the U.S.


ＨＥＶ駆動用モーター及び巻線

（３）Magnet Wires

・Respond to trend for smaller, more efficient HEV electric motors with higher voltage・Increase automotive applications in the magnet wire business from 30% to 50%

・Respond to trend for smaller, more efficient HEV electric motors with higher voltage・Increase automotive applications in the magnet wire business from 30% to 50%

Leading the Industry in Development of Inverter Surge Resistant Enameled Wire

　Helps motors achieve a longer life and higher reliability by minimizing insulation degradation caused by partial discharges which are difficult to detect during inverter surges.

　Heat resistant to 220℃, the highest level in Japan　Controls formation of composite made up of organic and inorganic materials at the nanometer level

Topic

導体導体導体導体

Unusually high voltage released by an inverter. This results in a partial discharge, which breaks down membranes and can quickly degrade insulation, causing motor failure.

Partial discharge

What is an Inverter Surge?

ConductorConductor

High lubricated layerStructure

Silica particle size 15 to 20nm

周波数　：５０ｋＨｚ試験温度：９０℃

耐ｲﾝﾊﾞｰﾀｰｻｰｼﾞ性ﾎﾟﾘｱﾐﾄﾞｲﾐﾄﾞ線KMKED-22A

汎用ﾎﾟﾘｱﾐﾄﾞｲﾐﾄﾞ線

Polyamide-imide Layer

Conductor Conductor

Frequency: 50kHz Test temperature: 90℃

Inverter Surge Voltage Endurance Life Characteristics

App

lied

Vol

tage

(kV

p)

Time to Failure (h)

1.0

1.5

2.0

2.5

3.0

0.01 0.1 1 10 100 1000 10000

Inverter surge-resistant polyamide-imide wire

General-purpose polyamide-imide wire



（４）Sophisticated Materials

・Attain copper materials technology for achieving high strength, high conductivity and high heat dissipation

　－　Develop a varied lineup of copper products, including high-purity oxygen-free copper, and alloys boasting high strength and conductivity

・Attain copper materials technology for achieving high strength, high conductivity and high heat dissipation

　－　Develop a varied lineup of copper products, including high-purity oxygen-free copper, and alloys boasting high strength and conductivity

Rolled Copper Foil

・Used in negative electrode material for lithium-ion batteries in HEVs

・High-precision rolling technology enables the manufacture of copper foil with uniform thickness and stable flatness.

Copper foil (negative electrode material)

Lithium-ion battery

High-heat dissipation dual-gauge copper strips

Profile of dual-gauge copper strips

・Heat sink materials compatible with the larger currents of today’s semiconductors

・Used as a high heat dissipation lead frame material for IGBT cooling modules, LEDs, etc.

Increasing use of electronics in cars

Cars are being fitted with more electronics to respond to environmental issues, enhance safety and facilitate onboard information systems. Consequently, there is growing demand for technologies that can ensure the reliability of control units, batteries and other components in terms of heat dissipation and conductivity.



（５）Antennas for Telematics

・Development of integrated car antennas for telematics communication services in North America

・Aim to enter automotive wireless communication field in North America

・Development of integrated car antennas for telematics communication services in North America

・Aim to enter automotive wireless communication field in North America

・As a leading manufacturer of wireless LAN antennas for notebook PCs, Hitachi Cable has accumulated advanced design and development technologies and simulation and analysis technologies

・Provide antennas for GPS, SDARS (satellite radio), cellular phones and wireless LAN (11a, b, g →16e) in a single unit

・Respond to automotive needs, including flexibility in car design, security (tracking stolen vehicles), etc.

・Achieves reduced interference and optimal directional characteristics in all communication formats・Low-profile antennas due to compact,

flat antenna design technology

Features

Cellular Antenna

GPS Antenna

Sale

s(T

hous

and

units

)

GPS / XM radio Antenna

Cellular Antenna

0

0

10,000

20,000

30,000

40,000

50,000

2002 2005 2008 2011

North America Europe Asia, etc.


Source: TRI

Telematics System Market


（６）Summary

Actively invest in key target fields

Ensure profits from core products

・Magnet wires: increase share of automotive applications from 30% to 50%　

・Brake hoses: establish factories in Thailand and China

　　　・Antennas: Develop antennas for telematics communication services in North America

　　・ Sophisticated materials: Expand lineup of high-strength, high-conductivity products with high heat dissipation characteristics

　・ Electric parts: Ramp up manufacturing of power cable harnesses for HEVs in North America

・Magnet wires: Develop magnet wires for HEV electric motors



Notes:The business performance figures given in this document for Fiscal 2008 and beyond represent business performance projections or targets as of March 30, 2007. These figures are based on certain assumptions deemed reasonable as of the time at which the Company prepared this document. Actual business performance may vary significantly from the projections and targets given here. Listed below are some of the primary factors responsible for such variations:

Economic conditions in key markets (particularly Japan, the United States, and Asia)The capacity of the Company and group members to respond to rapid technological change, to developnew products and technologies, to bring products to market in a timely fashion, and to achieve low-cost productionFluctuations in product and material markets and in the conditions of such marketsFluctuations in foreign-exchange ratesThe fund-raising environmentThe abilities of the Company and members of its group of companies to respond to fluctuations in product demand and supply conditions, product market conditions, foreign-exchange market conditions, and other circumstancesProtection of the Company’s own patents and securing rights to use other companies’ patentsPartnerships with other companies in areas such as product developmentFluctuations in the conditions of the Japanese stock markets

Copyright notice:This document is copyrighted in its entirety by Hitachi Cable, Ltd., which retains all rights to this document. Unauthorized reproduction or reuse by any means whatsoever is strictly prohibited.

Please address inquiries to:Hitachi Cable, Ltd.Corporate Communication Section, Administration DepartmentAttn.: Akiyama, TsubouchiTel. +81-3-6381-1050


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Hitachi Cable, Ltd.© 2007 Hitachi Cable, Ltd. All rights reserved. 5 1．Hitachi Cable Group Initiatives （3）Medium-Term Management Plan “BEGIN”—Basic Growth Strategy Progress