NA Market: Sales and Production Footprint Management Briefing Seminars Tuesday, August 1, 2017 DENISE CARLSON Vice President North America Production Innovation Center DENSO International America

Humble Beginnings and a Few Mistakes Our environmental consciousness was awoken early in our heritage

DENSO: We Make Everything Powertrain Control System Engine management system, Gasoline direct injection, Starter, Alternator, etc. Electrification Systems Hybrid and electric vehicle components, inverter, DC/DC converter, motor generator, relays, etc. Thermal Systems Heating Ventilation Air Conditioning (HVAC), Compressor, Heat exchangers, Battery thermal management, etc. Information & Communications Systems Instrument cluster, Head-up display, Human machine interface technologies, Horn, Keyless entry, Wireless phone charger, etc. Driving Control & Safety Systems Passive safety technologies, Airbag sensing system, Active safety technologies, Traction control system, Antilock braking system, etc.

SUBSIDIARIES & AFFILIATES Global Supplier of Advanced Automotive Technology, Systems and Components with $40.4 Billion in Sales (For fiscal year ending March 31, 2017) EMPLOYING MORE THAN MORE THAN IN 200 36 154,000 SUBSIDIARIES & AFFILIATES COUNTRIES & REGIONS PEOPLE WORLDWIDE

DENSO in North America with $9.6 Billion in Sales 32 WITH 28 24,000 COMPANIES & AFFILIATES MANUFACTURING LOCATIONS EMPLOYEES

DENSO’s societal responsibility must be equal or greater than our business size and scope.

Once-in-a-Century Shift Connected Vehicles Vehicle Sharing Autonomous Driving Electrification Paradigm Shift Facing drastic structural changes: Competition with non-traditional competitors in non-traditional fields

Business Environment – Mega Trends/Paradigm Changes New flow design Business Environment – Mega Trends/Paradigm Changes MIN CO2 → ZERO CO2 Recycling societies by renewable energy VEHICLE → SOCIETY Lifecycle solutions OWNER → PUBLIC Minimize vehicle volume by public services （Source : Signs Report 2017) Mega Trends (years to 2030-40) Mobility Paradigm Changes EARLIER ASSUMPTIONS Urbanization, demographic aging Global warming and air pollution Conventional Values Mobility Value Automated Drive (owner) HEMS Smart grid Intelligent IoT Traffic congestion and accidents ADAS New leaps in information and intelligent technologies Concierge/ agent service Monitoring support Customization NEW ASSUMPTIONS Luxury car for car lovers New industrial revolution based on Smart factories Shift to use Car sharing, personal mobility (seniors, children) AD car-sharing Autonomous driving Continuing shift to service economy Fleet/ compact car Shift to use Driverless transportation services New Values Shift to use Bad road running performance Entry car ($5,000) Expansion of middle income Driverless logistics Further diversification in values, consumption patterns B to C (for end-users) TARGET B to B (for businesses/societies)

How to transform and make changes so we can be successful in short and long term Making good decisions no matter if the forecast changes

Decisions Driven by Four Key Areas Technology Places People Partnerships

Decisions Driven by Technology: Focus For Future Mobility Connected Automated Driving F-IoT Electrification

Decisions Driven by Technology Thermal Systems Powertrain Systems Electrification Systems Information & Safety

Decisions Driven By Technology: F-IoT Efficient Plants Faster & more continually operating production Rationalization of logistics & inspections Competitive Monozukuri “DANTOTSU plants” Expand to 130 factories worldwide F-IoT connects the world FY2021　 Significantly UP in Productivity （vs FY2016) × Creating more-compact facilities (1/N) Various production lines Electrification Technology and Knowledge Robots Inspection Logistics Automated Production Lines IoT 検査 写真 ライン写真 IOT写真

Future DENSO Business Growth in North America Info & Safety will be a driving force for DENSO business growth

Decisions Driven By Locations: Global and North America Mindset Change Not only will we make decisions based on customer location, we will make decisions based on innovations and skillset Recent Announcement DENSO will invest $75.5 million to fuel technology development at regional headquarters

Need the right people, with the right skills, at right place at the right time doing the right thing.

Decisions Driven by People Skilled Trades Engineering NEW: Customer Service

Decisions Driven by Partnerships High Tech Companies Universities Sony Morpho Toshiba Fujitsu Ten ThinCi TriLumina Lemnos Labs Peleton Next Energy Carenegie Mellon MIT University of Michigan Iowa State University of California- Berkley

BILLION IN ANNUAL REVENUE ACTIVE PATENTS WORLDWIDE Humble, Yet Bold. $40.4 9% 38,000 BILLION IN ANNUAL REVENUE REVENUE in R&D ACTIVE PATENTS WORLDWIDE