Honda Motor Company, Ltd.

Thank you very much for taking time out of your busy schedule to attend our press conference today. We would now like to start our Honda Motor Company Limited's fiscal year 2022 third quarter financial results press conference. I am Okamoto from Corporate Communications. I will be the facilitator today. Thank you. First of all, allow me to introduce the presenters today. Director, Executive Vice President and Representative Executive Officer, Mr. Seiji Kuraisi. Good to see you. Director, Senior Managing Executive Officer, Mr. Kohei Takeuchi. This is Takeuchi. Good to see you. Then Mr. Kuraisi will first present the third quarter financial results. Over to you, Mr. Kuraisi. I would like to present to you the outline of the financial results for the third quarter and the four-year forecast for fiscal year ending in 2022. I would like to start with the situations in key markets. The total market demand in Japan was lower than the same period last year due to impact from factors including supply shortage of semiconductors. Honda, though we've seen some growth in models such as Brazil in the cumulative results till third quarter, showed lower sales compared to the same period last year. Inbox ranked number one in the new car unit sales among K cars in the calendar year 2021. While the total market during the fiscal year ending in 22 showed firm demand, we believe that it will continue to be impacted by factors including semiconductor supply shortage and the resurgence of the pandemic. Honda will strive to recover its production and will maintain its previous forecast. Next, taking a look at the total U.S. market, while demand recovered under the economic stimulus measure, it was still impacted by factors including semiconductor supply shortage, so the demand for the cumulative three quarters was almost flat compared to the same period last year. Honda's unit sales for the three quarters surpassed the results of the same period last year due to increase in light truck models. But if you look at the three-month, just through the quarter by itself, it was lower than the same period last year due to impact from semiconductor supply shortage. And the Civic, by the way, was named the 2022 North American Car of the Year, by the way. We see the total market for the fiscal year ending in 22 to sustain strong demand, but still we expect that the impact from semiconductor supply shortage and the pandemic to be significant, we believe. Honda has revised its previous forecast downward, considering our immediate production status. Now, looking at the Chinese overall market, demand recovered thanks to the economic stimulus measures by the government, but the impact from semiconductor shortage resulted in a lower demand compared to the same period last year. Honda has expanded sales of XRV and saw some effect from launching the new Integra, but still our sales was lower than that in the same period last year. The total market for the calendar year 22 is expected to surpass the previous year with solid demand, though the impact from semiconductor shortage remains. Honda has revised its forecast upward considering the most recent sales situation. In China, in January, Dongfeng Honda Automobile announced the construction of a factory dedicated to electric vehicles. We will continue to further expand our electromotive vehicle product range and provide further attractive products. Now turning to motorcycle business, total market, while impacted by the COVID-19 pandemic, is still showing recovery in demand in many markets. Honda also showed better results in many countries for the cumulative three quarters compared to the same period last year, but the numbers were lower in countries such as India and Vietnam due to the impact of resurgence of COVID-19 pandemic. The total market for the fiscal year ending in 2022 is expected to see solid demand, but we expect that the impact from the resurgence of pandemic will still remain. While Honda plans for sales volume is surpassing that of the previous fiscal year, we have revised our forecast downward from the previous forecast in view of the sales status in India and the impact from semiconductor supply shortage. Next, I would like to present the summary of the cumulative results up to the third quarter. While the automobile unit sales declined due to supply shortage of parts including semiconductor and impacted by the surging material prices, thanks to cost reduction, curbing of incentive, and positive Forex impact, our operating profit grew by ¥224.6 billion to ¥671.6 billion. Also, the profit attributable to the owners of the parent company grew by 138 billion yen to 582.1 billion yen. Unit sales and income statement highlights are as shown on the screen. moving on to the consolidated financial forecast for the fiscal year ending in 22 compared to our previous forecast covet 19 pandemic is spreading again supply shortage of parts including semiconductor continues and further surging prices of material continues thus the environment surrounding our business is expected to remain challenging but we are making further efforts to curb our sga expenses and incentive so as to enhance our profitability. So we have revised our operating profit upward by 140 billion yen to 800 billion yen and also revised our profit for the period attributable to the owners of the parent company by 115 billion yen to 670 billion yen. This unit sales and income statement highlights are as shown. Next about dividend. Forecast for the full year dividend for the fiscal year ending in 2022 is 110 yen, unchanged from the previously published forecast. I would now finally like to explain the key points of the results for the third quarter for fiscal year ending in 2022. For the three-quarter year-to-date results for the year ending in 22. Regarding supply shortage of semiconductors, with the cooperation from our suppliers, we have adjusted our inventory allocation around the world and made changes to alternative parts. So we have made some improvement compared to the previous forecast. Compared to the previous fiscal year, though we have seen decrease in automobile production volume and impact from surging prices of materials, we have made all-around efforts and have absorbed all of the impact and have been able to attain higher revenues and higher earnings. Combined with our efforts so far to solidify our existing business, which have given us toughness or resilience in the face of reduced production, the strength of our frontline Genba operations, capable of responding promptly to the ever-changing environment production sales situations, has shown its true benefits, we believe. For the fiscal year 2022 full-year performance forecast, considering the flooding in Malaysia which happened in the fourth quarter and the impact of reduced production due to the wave of Omicron variant, we are keeping the full-year automobile unit sales forecast unchanged. While the environment surrounding our business is expected to be challenging, including surging prices of raw materials, we will further reinforce our structure for generating earnings, and we are revising our full-year performance forecast upward. For the next fiscal year, we expect that the impact of semiconductor shortage will linger, but we strive to further strengthen the business foundation for profitability, which we have built, and we ensure that we are well prepared for the future and we may aim for the further growth.

And next, Takeuchi will give the details.

And I'd like to begin the explanation. First, Honda Group unit sales for FY22 nine months was... Motorcycles due to increase in mainly Asia, unit sales increased to 12,775,000 units. Automobiles due to decline in China and North America, unit sales was 3 million units. Life creation due to increase in mainly North America and Europe was 4.5 million units. And next, FY22, three quarters, nine months, change in profit before income taxes. Profit before income taxes was 845.2 billion yen. up 186.5 billion yen from the same period last fiscal year. Operating profit was 671.6 billion yen, up 224.6 billion yen from the same period last fiscal year. Operating profit excluding currency translation effect was 97.7 billion yen. Breakdown was Revenue model mix, etc., despite the drop in automobile unit sales due to the effect of controlling incentives and others, was plus 81.4 billion yen. Regarding cost reduction, etc., despite impact of the surge in raw material costs due to cost reduction and price increase effects, was minus 9.7 billion yen. SG&A was plus 98 billion yen due to cost reduction effect such as warranty expenses. And next, sales revenue operating profit by business segment. Motorcycle business operating profit was 282.3 billion yen. Automobile business operating profit was 188.5 billion yen. Financial services business operating profit was 258.1 billion yen. Combined operating profit of automobile business and financial services for automobiles was 437.2 billion yen. And next, life creation and other businesses. Operating loss was 7.4 billion yen, of which aircraft and aircraft engine operating loss was 23.6 billion yen. Moving on to cash flows. FY22, in nine months, free cash flow of non-financial services business was 178.3 billion yen. Cash and cash equivalent at the end of the period was 2,416.8 billion yen. And moving on to FY22, consolidated forecast. Honda Group unit sales. Motorcycles forecast is revised downward from the last forecast. to 17.04 million years, reflecting drop in mainly Asia. Automobile business, despite shortage in semiconductor supply and research of COVID-19 infections, the previous forecast remains unchanged, i.e. 4.2 million units. Life creation business, reflecting mainly the drop in North America, we are forecasting 5.95 million units. Let me proceed to explain FY22 forecast change in profit before income taxes compared to the previous forecast. Profit before income taxes is forecasted to be 1 trillion 20 billion yen, up 160 billion yen from the previous forecast. Operating profit is forecast to be 800 billion yen, up 140 billion yen from the previous forecast. Operating profit excluding currency effects is... Plus 130 billion yen breakdown is the revenue model mix, etc. Despite drop in consolidated automobile unit sales, the low inventory and incentives control resulted in a forecast that is up 40 billion yen. Regarding shortage of semiconductor supply, though we have seen improvement in the nine months versus the previous forecast, there was a flood in Malaysia in the fourth quarter and drop in production due to the research of COVID-19 pandemic. Yet, group automobile unit sales forecast remains unchanged, i.e., 4.2 million units for the full year. Consolidated automobile unit sales in North America is down due to the research in COVID-19 cases. And next is SG&A is up 111 billion yen and due to other expenses being kept low and in addition reduced warranty expenses. and the FY forecast compared to the actual results of last fiscal year profit before income taxes is up 105.9 billion yen. Operating profit is forecast to be plus 139.7 billion, excluding currency effects. The major breakdown in items are revenue model and mix, despite degrees in automobile unit sales due to incentive control, etc., is up 74.7 billion. Cost reduction, etc., despite the impact of surging material costs, We saw a cost reduction in price increase effects, and these combined cost reduction is 35 billion yen minus. And lastly, FY22 capital expenditure depreciation R&D, the forecast is as shown. This concludes my presentation. Thank you for your attention.

Thank you very much for your attention. So now we'd like to move on to Q&A session. So we would like to take questions via Zoom, which has been communicated to the members of the media in advance. And due to the time limitation, we would like to limit it to two questions per media member. Thank you very much for your cooperation. Then if you have a question, please press the raise your hand button to let us know. Thank you.

The first question is from Yomiuri Shinbu newspaper. Mr. Katagiri, please. Thank you. I'm Katagiri from Yomiuri Shinbu newspaper. Can you hear me? Yes. I have two questions. The first question about the automobile production situation currently. Domestically, the utilization ratio compared to the forecast, it says in the home page, well, it is as planned. But I would like to know what is happening to the production overseas, such as China. I do hear that there is such an impact of the production overseas, but this reduction in production does not necessarily seem to be impacting the forecast. So can I ask you about the stability of production overseas? And the second question? And second question. I would like to know more about the increase in profit, the reason. Well, you say that you control the incentives. And at the last meeting in North America, you said that normally it's around 200,000 yen but it's a little more than half. But in the past three months, is it the case that you further reduce the incentives? And this trend. Even if the lowest inventory and shortage of automobiles were to be resolved, will this continue? And also in China, I think that the prices are going up, but are you still going to control the incentives going forward? And you said that the warranty expenses and other expenses have been controlled, but can you elaborate on what this actually contains or includes? Let me start to answer about the current production situation. Well, currently, Globally, there are no factories which have stopped production. So in almost all factories, the production is normal. In the third quarter, including our suppliers, we have made all-out effort, resulting in a recovery in production earlier than expected. And the unit production has recovered to some 1.08 million units, whereas The Omicron research, especially in North America, the supply chain overall, they have a lack of labor and therefore it is difficult to carry out production currently. And in Malaysia there was a flood and once again we see that the semiconductor supply chain is impacting us. In the fourth quarter, originally we were estimating normalization of production and Looking at the fourth quarter back in 2019, before the COVID, it was 1.35 million. We were expecting it to reach that level, but given the current situation, we had to revise. But from the third quarter to fourth quarter, we think that sales is about plus 11%. And so for the full year, we can retain this forecast of 4.2 million units. Well, whether this is directly linked to production, well, it depends on the situation. But sales and marketing, well, it depends on the inventory of different models. So the production impact does have an impact on some, but not so much on others. It depends. But it is true that the production is having an impact directly on sales and marketing. But there is some... uncertainty about COVID-19 going forward, but we want to continue to increase our revenue and profit and maximize our sales. That is all. Thank you. And the reason for the increase in profit, Takeuchi will explain. Yes, about the incentives that was asked. Well, yes, as Kategiri-san has said, the incentives, well, yes, in terms of the consolidated unit sales, it is a negative number, but with the control of incentives and also reduction in warranty expenses, we have managed to offset that. Well, just looking at the incentives, especially in North America, last time it was about $2,000 per unit, but it's almost half, as I said, but still, at the dealers. Well, I think that they have a very low stock in terms of the days. And in the second half, we believe that the incentives in the second half of the year will be half or even less than the $2,000. Well, incentives. Well, the inventory at the dealers... This has been posted as a cost at the dealership, and therefore, this also is resulting in reducing the stock inventory and reducing the incentives. But about the inventory at the dealerships, well, this is true in Japan as well as China, but in North America, we see this significantly differently. And so the North American incentive reduction is the major contributor. And also, the warranty expenses that are included. Well, normally, Warranty expenses includes a claim and also we, when we convene our customers, well, there's a recall expenses, and it accounts for 1.1% of total sales. But I think we have been able to curb this, meaning that we are making improvements in our quality. And this... Therefore, we are estimating that the ratio will be less than 1.1%. In the fourth quarter, mainly in North America, and also due to the research in the Omicron virus, production is not progressing. So we have to revisit our cost expenses. And having done that, we have concluded that we have both revenue and profit increase. Thank you.

Thank you. Then we'd like to move on to the next question. We have from Asahi Newspaper, we have Mr. Kamiyama, please. Mr. Kamiyama, can you hear our voice? Okay, this is Kamiyama from Asahi Newspaper. Thank you. Yes, I have two questions as well. My first question is about the semiconductor shortage, the impact of that to production. So from April to December so far, I just want to know how much of a production decrease has happened because of the semiconductor. And then for the January and March, I think you said that you will try to recover this for production. So I'd like to ask for your prospects for procuring semiconductors. And then the last financial results briefing. You said that you will try to use the semiconductors in major markets like states in China. If there are any further new actions that you are doing to recover this, please let us know. That's my first question. My second question about the sourcing raw material prices. So what are you doing against that? So overseas manufacturers, some of them, they are raising the vehicle prices to be sold in Japan due to the material prices hike. I wonder if you're ever considering it. I don't think that's ever happened in Japan so far, but I'm just wondering what would be the difficulty if you ever try to raise your product prices in Japan. Thank you. Okay. Then let me start with the semiconductor shortage. In the three quarters total, actually, for 1997 term, we were planning for 5 million units, actually. However, against that target, right now we are saying 4.2 million, so it's 0.8 million units for the year. So for the three quarters, so maybe at about 100 and... I believe we were making progress up to 130,000 volume. So that is the situation as of now for the third quarter. And for the semiconductor shortage, what we are doing against that is, as we have been mentioning to you already, across the globe, we are doing some production adjustments around the world. And we are developing alternative parts and dual sourcing. Those are the things that we are doing. And longer term, reviewing the suppliers. That would be another action which we are taking on as well. But unfortunately, there are some things that can take longer time and some others that can be done immediately. So as of now, we believe that even into the next fiscal year, there will be impact lingering. So to Mr. Takeuchi to answer the second question about the raw material price hikes. So currently, because of the surging prices of raw materials, so right now we are thinking about the precious metals we are expecting a 270 billion yen raw material increase or so. So this time this will go up actually to 290 billion yen. So where the 20 billion difference coming? Where is it? this is the steel price in North America is about to go up. So because of that, we will incorporate into the fourth quarter numbers. But is that can we pass that on to the sales in Japan? So in North America, what's happening is that because the steel material or the other metals price is going up, so we are making efforts to reduce the cost internally. However, the price surge was too high that we are planning for that in some markets like in North America. However, for Japan, We do not have any plans to raise any prices, but if we have to, in consideration of competition with other manufacturers, we might have to consider that going forward. Thank you very much, Mr. Kamiyama.

Next question. Next. Nihon Keisai Shinbu Newspaper, Mr. Abe. Abe from Nikkei. First question, going forward, there will be an interest rate hike in the United States. If that is the case, then financial service business will be impacted, I think. So what sort of impacts are you considering? And another question is about electrification. Last time at this meeting, compared to that time, for example, including EV, electrification, investment, total investment, or models, a number of models, EV models. Are there any new pieces of information that you can announce today? Abe-san has asked about the U.S. interest rate hike. The Fed is trying to move towards that direction, and therefore, this is having impact on the debt market, long-term debt market in the U.S. Now, the cars that we're selling in the U.S., 60 to 70 percent being financed by our Honda America Finance. And the procurement interest rate will also increase. And this procurement interest rate This will have to be applied to our new customers. So we do expect that customers will have to pay more. But rather than say that this is a revenue, because the cost will increase and if sales will increase, then there will be a slight time gap and an impact on our revenue, but not too long. If there's an interest rate hike and there's inflation, so I think that the consumers will be reluctant to buy. And so I think that that is a source of concern to a certain extent. Well, about electrification... Well, we so far have made announcements that Honda globally will move towards electrification and carry out a number of activities. We're accelerating our efforts and the product lineup of battery. We want to tie up with the optimum partner for each market. But as for specifics about the progress, when the time comes, we would like to make the announcement. So we thank you for your further indulgence until that time comes.

Thank you, Mr. Abe. Okay, I'd like to move on to the next question. From Wall Street Journal, we have Mr. Sean McClain.

Yes, hi. Sean McClain from the Wall Street Journal. Pardon the question in English. A question on what you said, Kurayoshi-san, about labor shortages in the U.S., if you could provide a greater explanation of what you're referring to and how big an impact it's had on your production numbers there. And then you mentioned that you saw the impact of COVID carrying into, and the semiconductor issue carrying into next fiscal year. Do you see it having an impact on the entire next fiscal year or just the first half or second half? When is basically, when are things going to get better?

I'm Sean McVey from Wall Street Journal. I'd like to ask a question in English. Regarding the lack of labor in the U.S., Mr. Kurayashi talked about it earlier. Could you explain a little more about this? I'd like you to tell us how much of an impact it had on the production of this company. In the previous talk, you said that even in the next year, the impact of COVID-19 and the semiconductor will continue. What do you think? Do you think that the impact will continue in the next year or in the first half? Simply put, when do you think things will improve? Please tell us about this. With the pandemic spreading in North America, first of all, in our factories at the supplier sites as well, the Omicron variant is spreading. having a bigger impact. So they are finding it very difficult to secure manpower for the production. So because of that, there were some situations where the production got sluggish for some time. But it is not that there was a major impact as big as that from a semiconductor. However, because it was simply not predictable. So production never fully stopped, but depending on the production lines, which line it was, it is continuing that some are stopping, suspended from time to time. But in any case, suppliers and ourselves, we are utilizing their indirect manpower for production. So currently, our production lines, I believe, have recovered, but still going on for the future, it's still unknown. In any case, for the next fiscal year, the Omicron expansion resurgence and the semiconductor impact will continue to some extent, unfortunately. As I said, we are taking different actions to address those, but there are some things that cannot be addressed short term. And at the same time, it's like everyone's grabbing to get the supplies of a semiconductors. So for next fiscal year as well, we are not really in the position to be able to come up with a clear sales volume. For currently, for the fourth quarter, right now, I have about 1.15 million. So multiply that by four, you get 4.6 million. So for next year, we're estimating that in the second half things will improve. So we would like to aim for production and sales better than that. That's what we can say. That's all we can say at this point in time. Thank you.

Thank you very much, Mr. McLean. And next, Weekly Toyo Keizai, Mr. Yokoyama, please. Your grandma speaking. Can you hear me? Yes. I have also two questions. Thank you. First, about battery. In North America, already you are going to secure batteries from GM. But going forward, what are your plans for securing battery? SES? You had... entered into an agreement with SES to develop the lithium secondary battery. Is this just for North America or others? What is your thinking on tying up with SES? That's the first part. And second, about Tesla. The other day they announced the financial results and they have more than 10% annual profitability and also more than 900,000 units. Well, yes, You say that as a business model perspective, how do you see Tesla's perspective? It could be a personal perspective, but how do you see Tesla's business model? About the battery, as I said, in a different market, we are trying to tie up with the optimum partner for that specific market and to carry out the procurement which is fit for the market. As for the specific situation status, when the time comes, we will make an announcement. So please wait until that time comes. About development with SES. Well, this is development. It's a joint development agreement. And in North America, GM and China's CATL, It's not like that when we're talking about procurement, but as a next generation battery, as a candidate, we are working with them to develop a future battery. That's all. Thank you. About Tesla, well, yes, this is another company and competitors. I would like to refrain from making any specific comments.

Thank you very much, Mr. Yokoyama. Okay, then I'd like to take the next question from a daily newspaper, automotive newspaper. Mr. Fukui, please. Okay, this is Fukui from a daily automotive newspaper. Thank you. It's a somewhat detailed question, but in the four-year outlook for the automobile business sales for Japan, You had it was a plus, North America negative. So I just would like to know the background why your forecast came out this way. And another one is for the analysis of operating profit. So the variation, variability, you have the curbing of incentive and then the reduction in sales. So that was 40 billion yen. So I'd like to know about the details of that and also the cost reduction and the raw materials details. Okay, about the sales of automobiles. For North America, because of the Omicron variant impact, So there was a shortage of manpower temporarily that led to production and then that led to lower production. That's the main cause. On the other hand, for North America, even though it declined on a global basis, we did a reallocation of semiconductors around the world. And then for Japan, the orders are coming in very steadily, and then many customers are patiently waiting for a long time. So those have helped. I would like to ask Mr. Takeuchi to talk about the operating profit analysis. So giving you the previous time and this time, the forecast. So there is 40 billion yen plus. The details of that you want to know. So the volume, I talked about it earlier. And the total, so including the global sales volume, including China, that was 4.2 million. So we have not changed that target. But Because this is talking about OP. We're only looking at the consolidated ones. So which means there's about 1 million minus for an automobile. This is mainly coming from North America. So that has about 70 billion. And also the incentive reduction at the dealer that we talked about, the North America, because the inventory level went down at the dealers. So plus was about 85 billion yen plus. And then so with that, in addition, there was a bit of a plus upside on the financial finance as well. So we have about 40 billion. And also cost reduction minus 37 billion yen. So of that, so... the steel price raises in North America and then so we netted some other factors and then it came out the total of the changes in the raw material prices. Okay, thank you. Thank you very much.

And next question, Automotive News, Mr. Hans, please.

Can you hear me?

Yes. This is Hans from Automotive News.

I have two questions.

Can I ask in English? Yes.

The first question is about the incentives in North America. A lot of automakers are benefiting now from low incentives, but when the market returns to normal situation with better inventories and better supply, How do you see the overall market reacting to this? Do you see a shakeout of companies that are going to have to rely, some companies will have to rely on higher incentives again? And how confident are you that you can keep incentives low when it returns, the market returns? My second question is about the allocation of chips, the global allocation of chips. You said that you are able to reallocate global chips to Japan. Can you talk a little bit about your strategy for allocating chips? And does that mean you're reallocating them from North America to Japan or from some regions to other regions? Thank you.

Yes, I have two questions. First, regarding incentives in North America, I think that many car manufacturers are very concerned about the fact that the incentives are now being suppressed at a low level. However, if the situation returns to normal in the future, that is, if the stock price rises and supply increases, what kind of This reaction, do you think it will have an impact? Some companies set very high incentives as before. I think there may be such a thing as selling by relying on such high incentives. Among them, Honda How confident are you that even if the market recovers in the future, the incentives will be lowered? This is the second question. This is about allocation of semiconductors. In your earlier explanation, I don't know. To get to answer the North American incentives. So about the incentives and the future trend. Well, as we have been explaining, these incentives, the reduction in expenses or cost, of course, of the unit price. Compared to the price, the incentives are kept low, and we are able to do business with low incentives. And as we said, against the dealer's inventory, we allocate the incentive based on the inventory. And because the inventory is low at the dealers, it's only some 11 days' worth in case of Honda, and therefore this is also positive for us. And these combined, we have seen a better forecast. Now, going forward, if the supply were to increase, as Hans know, the American customers, they will buy from the inventory. And therefore, once we have an increase in the inventory to a certain extent, it's not the unit price, but the overall price will have an impact. Therefore, for the unit price from next fiscal year going forward, we will expand and have new models. And therefore, we want to try to keep down the incentives as much as possible. But we have to consult the dealers as to how much inventory the dealers will hold. And this part, this might be some margin to increase the incentives due to this. Well, about the allocation of chips. Well, currently... we identify where the chips are in shortage. We are on a daily basis monitoring the chips, and if there are pluses or minuses, we globally across the world try to adjust the production based on the available semiconductors. But strategy... Well, yes, people are going after the limited availability of chips. And where they have a large number of production and sales, chips will be allocated. This is natural. And also, products where there's a strong demand by customers, we would try to allocate the chips to those models. And likewise, for the highly profitable products, we will give priority to allocating the chips to such products. We're doing this on a daily basis. But as for the strategy, this is as far as we can explain. That is all for me. Thank you.

Thank you very much. Sorry, but due to the time restriction, we'd like to make the next question the last for this session today. Thank you. Then last one will be from Nikkei Automotive. Mr. Honda, please. Okay, thank you. I hope you can hear me. Yes, we can. Concerning the Malaysia flooding and the resurgence of the COVID, from January to February, I believe you have announced reduced production Are you doing something, some kind of a specific actions with the suppliers considering the impact to the production of the components, the parts and components of the suppliers? So I'm just wondering what you're doing. So basically what we are doing is... We work depending on the circumstances of the parts suppliers and the semiconductor parts suppliers. Of course, if they have some supplies and parts in inventory, we might ask them to forward those to us. But basically, it's up to... All we can do is ask for the optimum allocation with the suppliers for their supplies in line with where we need the supplies from parts. Thank you. Thank you to Mr. Honda as well. With this, we'd like to conclude our financial results press conference. We have the material on our website, so please refer to it. Once again thank you very much for your participation and attention today. Thank you.