A1: At this point, our goal is to halve the impact. However, forming a reliable simulation is extremely difficult because of the many factors involved, which include the impact of sales volume reduction due to product price optimization, industry trends, and consumer sentiment in the United States.
Q&A on the Performance Results for the Fiscal Year Ended March 31, 2025 (FY2025.3) (Held on May 8, 2025)
Q1: How much of the estimated ¥14 billion impact from tariffs shown on slide 9 do you expect the countermeasures to be able to offset?
Q2: Sales in the musical instruments business declined last year in North America and Europe, with a noticeable drop in the fourth quarter in Europe. Please explain the factors behind the forecast for higher sales this year.
A2: Market inventories in North America declined after peaking in the first quarter of the previous fiscal year, and the surplus trend in inventories in Europe is disappearing as well. The main cause of the decline in fourth quarter sales in Europe was a temporary halt in shipments while local subsidiaries updated their core systems. We expect sales to grow again in both regions as market inventories normalize.
Q3: Why are you forecasting another decline in musical instrument sales this fiscal year in China when sales were higher than expected in the past fourth quarter?
A3: The Chinese market continues to be sluggish overall, but sell-through around the Lunar New Year was higher than anticipated. We are taking a conservative stance in our forecast because market inventories of acoustic pianos are still adjusting and because we will need to regulate sell-in volume to a certain extent. For acoustic pianos, we will shift from a strategy of marketing to beginner players centered on educational demand to a strategy aimed more at advanced players through value-added offerings. For wind instruments and guitars, we will strengthen sales targeting seniors, students, and other hobbyists.
Q4: What is behind the forecast for a decline in sales of audio equipment for business use and automotive sound systems this fiscal year?
A4: Sales of B2B audio equipment remain strong in the entertainment market, but we expect a temporary adjustment phase this year because the order backlog was cleared, and shipments were a little ahead of schedule last year. Regarding automotive sound systems, we are increasing our placements in future new car models but anticipate a decline in sales to Chinese client companies this year. We continue to view both audio equipment for business use and automotive sound systems as growth businesses in the medium term.