On October 31, 2024, Denso announced its financial results for the second quarter of the fiscal year ending March 31, 2025.

According to these results, net sales decreased by 1.1% year-on-year to 3,474.8 billion yen, while operating income increased by 18.6% to 251.2 billion yen. Although operating income increased significantly, this was largely due to the absence of a provision for a Denso fuel pump defect that occurred in the previous fiscal year, and excluding this effect, operating income would have decreased. Regarding the most recent business environment, Denso has further revised downward its full-year forecasts following the first quarter, due to a number of concerns and uncertainties, including the prolonged impact of the suspension of vehicle production for the Toyota Group, a major customer in Japan, following certification fraud, and sluggish sales in Asia.

According to media reports, production of Alphard and Land Cruiser resumed at Toyota Auto Body’s Fujimatsu and Yoshiwara plants on November 12, 2024. However, due to on-site inspections by the Ministry of Land, Infrastructure, Transport and Tourism, production stoppages that had not been reported or announced before have occurred at each plant. It is still unclear whether the Toyota Group will be able to resume production as soon as possible. In addition to the uncertain production plans of suppliers, the Fair Trade Commission has recently tightened its guidance on proper business practices, and is now strictly monitoring subcontractors with regard to fair pricing and type transactions. Denso is, in a sense, caught between a rock and a hard place.

Denso is assuming a stronger yen in the second half of the fiscal year than the current exchange rate, and if the yen continues to depreciate, Denso may exceed its current full-year earnings forecast.