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Decline in demand of engineering parts manufacturers to lower profits

Production engineering mechanical parts of various Japanese corporate earnings growth has started to slow, because the growth had been fast-growing Chinese market is slowing. Business brands include engineering machinery hydraulic equipment, including fiscal year 2012, Kawasaki Heavy Industries operating profit is expected to increased by only 1 percent growth rate last fiscal year (an increase of 19%) compared to a significant slowdown, as of last fiscal annual profit has been growing in Japan PressKogyo company and KYB also expected to be converted to falling profits. In addition to the Japanese-funded enterprises, the companies are to the Chinese local enterprises to expand the supply, and therefore more vulnerable to the impact of market supply and demand changes.

    The field of construction machinery in China demand due to the impact of the European debt crisis and the tightening of monetary policy, since last year has seen a dramatic decline. As a representative of construction machinery hydraulic excavator demand since May 2011, continues to decline year on year.

    Kawasaki Heavy Industries, which owns construction machinery hydraulic valves and hydraulic pumps and other hydraulic equipment business affected by the slowdown of the Chinese market, is expected to include these businesses, including precision machinery sector in this fiscal year, operating profit year-on-year by 1% will only 27 billion yen. Compared with the previous fiscal year double-digit growth will be slowed down significantly. Hydraulic equipment department of Toshiba Machine's operating profit is expected to be flat with the previous fiscal year, only one billion yen.

    Japan KYB and T.RAD company this fiscal year, construction machinery parts sector earnings growth will be slowing down. KYB part of the company suspended earlier optimistic about the Chinese demand to increase investment to expand and has been advancing hydraulic cylinder and the driving motor. The KYB company said the future will pay close attention to the current demand on the basis of the decision to restart the investment of time, ".

    Various Japanese companies are highly dependent on the Chinese market. Kawasaki Heavy Industries and KYB more than 5 percent of the fiscal year, sales of construction machinery hydraulic equipment from the Chinese market. Japanese parts companies not only to the well-known enterprise of Hitachi and other Japanese department, but also to the Trinity Group and other Chinese companies to expand sales in order to achieve profitable growth, and is now encounter headwinds.

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