Good morning, good afternoon, and good evening. Thank you very much for joining Nidec's Q3 fiscal year 2020 conference call. I'm Yoichi Orikasa, General Manager, Kyoto Branch of Mitsubishi UFJ Morgan Stanley Securities. As we kick off the conference, I'd like to ask you to make sure all the materials are ready in front of you. If not, please download the files on Nidec's homepage at this moment. Please note, this call is being recorded, and the conference materials will be posted on the company's homepage for the coming week for investors and analysts who are not able to join today's call. I'd like to introduce today's attendees from Nidec Corporation. Mr. Jun Seki, Representative Director, President, and Chief Operating Officer. Mr. Akira Sato, First Senior Vice President and Chief Performance Officer. First, Mr. Sato will make a presentation. After his presentation, we will move on to a Q&A session, and Mr. Seki and Mr. Sato will answer your questions. Mr. Sato now presents Nidec's Q3 fiscal year 2020 results, future outlook, and management strategy. Mr. Sato, please go ahead. Thank you very much, Mr. Orikasa. Good day, ladies and gentlemen. Welcome to today's conference call. My name is Akira Sato. Mr. Jun Seki and myself will be your main speakers and answer your questions. Joining us also is Mr. Masahiro Nagayasu, General Manager of Nidec's IR team. For the forward-looking statement, please see slide number two of our presentation material for details. Now, I will review the key figures. Please see slide number three for fiscal year 2020 nine-month results. As shown on slide number four, nine-month net sales stood at the record high, JPY 1,185 billion, 2.2% higher year-on-year. The nine-month operating profit increased 24.0% year-on-year to JPY 115.5 billion. The December quarter's net sales increased 4.4% quarter-on-quarter to JPY 433.2 billion, marking a record high for two consecutive quarters. The operating profits for the same period increased 12% quarter-on-quarter to JPY 46.4 billion, due to increased sales and contributions from comprehensive improvements on cost structure and optimization of fixed costs through the WPR4 program. Based on these results, we have made an upward revision to the full year fiscal year 2020 fiscal financial forecast. On slide number five and six, you have step charts showing the net sales and operating profit year-on-year and quarter-on-quarter respectively by product groups with exchange rate effect, eliminations, and structural reform expenses. As you see the bar chart on slide number six, Automotive, Appliance, Commercial and Industrial, or ACI, and machinery segments have been the main drivers for the Q-on-Q profit increase in the December quarter. Please see slide number seven. As you see on the right-hand side, the free cash flow keeps increasing from the June to December quarter through continued efforts to improve cash conversion cycle or CCC. We have achieved record high operating cash flow and free cash flow on the December quarter. Please see slide number eight. Based on December quarter's result, we have made an upward revision to the full year fiscal year 2020 financial forecast, which is the second time this fiscal year following the previous quarter. Please see slide number 11. Due to the net sales recovery and the contributions from the WPR4 program, the quarterly operating profit ratio is on its way to steady improvement after forming the bottom in the March quarter of fiscal year 2019, and has recovered to 10.7% in the December quarter while achieving record high net sales for two consecutive quarters. Please see slide number 12. Green transformation is triggering innovations in the auto industry, which is similar to those in the TV and camera industry that occurred in the past. The industrial structure goes from local vertical integration to global horizontal specialization. The product design from integral architecture to modular architecture. In the automotive industry as well, we are seeing shift from more complicated and expensive internal combustion engine or ICE vehicle, to simpler and cheaper electric vehicles or EVs, which makes cost competitiveness even more important. Please see slide number 13. We are foreseeing that growth we experienced for over 30 years in the hard disk drive industry is going to happen in auto industry, triggered by electric vehicle development. As you see on the left-hand side of this slide, the hard disk drive market has been growing significantly based on technological innovations related to modules, magnetic heads, medium, et cetera. In the EV market, as you see on the right-hand side, rapid growth is expected following the turning point year of 2025, and we need to prepare for mass production. For this purpose, we are aiming to construct in-house production for inverters and gears while preparing more assembly lines, and also aiming to pursue the cost competitive advantage of mass production. Please see slide number 14. The total number of six EV models using our E-Axle, which is traction motor system for EVs, has exceeded 100,000 units on a cumulative basis as of the end of December last year. The sales volume in the December quarter increased 25% year-on-year. Please see slide number 15. The profitability of automotive existing business, which is excluding impact of the traction motor related business and Nidec Mobility's business from auto business, has recovered to double-digit operating profit ratio and is keeping the upward momentum after the decline December quarter of fiscal year 2018 in the wake of Chinese economic slowdown and bottoming out in the June quarter of fiscal year 2020 caused by COVID-19. Slide number 19. Sorry. Please see slide number 16. Both net sales and operating profit ratio of ACI are steadily improving from the June to the December quarter due to the WPR4 program. ACI is currently undergoing a comprehensive review of its cost structure, it is ready to improve operating profit ratio by optimizing outsourcing costs, labor costs, and fixed costs. Please see slide number 17. Sales of other small precision motors has hit record high in the December quarter due to the new stay home demand. We are seeing further growth of our business, brushless DC motors, which are used almost everywhere in such applications as home appliance, living room, sanitary water supply, kitchen, smartphones, PCs, gaming consoles, and printers. Please see slide number 18. Ultra-thin and ultra-small fan motor, FDB or UFF, which is used mainly for PC application, is keeping high level of shipment of over 5 million units for three consecutive quarters, and is firmly supporting the demand for work from home. Lastly, on behalf of the entire management team, we would like to thank our customers, partners, suppliers for their support and commitment as well as our shareholders. At this time, we would like to open up the call for questions. Thank you for your attention. Thank you very much, Mr. Sato. Now, we'd like to turn to the Q&A session. Mr. Seki and Mr. Sato will be pleased to answer your questions. Today's question and answer session will be conducted electronically. If you would like to ask a question, please press the star key and one on your touch tone phone. Again, please press star and one if you would like to ask a question. If you'd like to cancel your request, please press star and two. We will now pose for questions from the participants. Our first question today is, James Pulsford from Alma Capital. James, please go ahead. Thank you, and good evening. I'd like to ask, if I may, about your precision small size motor area, where clearly your one half of it, the other precision motors performed very strongly. The HDD side was weaker or in sales terms, weaker. Could I just make sure I understand first what's happening within the HDD side? Volumes, I think, were about 41.3 million for the quarter. That's a very sharp fall, but ASP rose. Could you comment on what happened within that in terms of mix? If you have, for example, nearline volumes in ASP and enterprise volumes, and if you could comment on your changes in share in the different areas you have there, that would be very helpful to understand what's happening within HDD, please. Okay. This is Masahiro Nagayasu, speaking. Clearly, the volume dropped. Our shipment volume in September quarter was 63.2 million, and this December quarter number is 41.3 million. This is mainly because one customer did not order our motor for the full quarter, December quarter. That means the change of the mix as well as the change of the pricing. Clearly, as you maybe calculated, the ASP rose from $7.02 in September quarter to this December quarter, $7.46. Overall, we see the higher ASP, but the lower volume, mainly because we could not get the order from a particular customer. Is that fine? Yeah. In terms of the volume fall, was it much greater for commodity items, and so for nearline and enterprise, it's much less? Without going against too much detail, do you have the volume figures for those? That would be helpful if you do. In terms of the so-called revenue share of server area, meaning a 2.5-inch high-end and the nearline, was 54.5% in September quarter. This December quarter, that number rose to 64.0%. Clearly, the 2.5-inch number is down, but not as much as 2.5, 3.5. Nearline number is also down, but not as much as the 3.5, 2.5. Overall, the product mix improved. Thereby, the share of those server area spindle motor rose from 54.5% to 64%. Is that fine? That's fine. Thank you very much. Just to follow up, obviously you're a little constrained in what you can say. In this particular quarter, you received no orders at all from what has hitherto been a main customer. You can't predict the future, do you think it's quite possible that you will not receive further orders from that customer going forward? Would you agree with that statement? Well, number one, that we are not forecasting the number, as you know. It's our policy that we are not talking about the future number. As we say, maybe the previous quarter, that we are not expecting any sales to that customer during the March quarter. There are no sales in December quarter. There will be no sales in the March quarter for that particular customer. Okay. I understand. Thank you very much. Sorry, I don't want to take too much of your time for other people, but in terms of the other precision motor side, where you saw a sharp bounce in sales from there, were there any particular areas that you would highlight? I know within that you have fan motors, DC motors, heat sinks, other area. In terms of the strong recovery or strong growth in sales, could you comment in a little more detail about what drove that? In terms of the non-HDD motor, small special motor is something that you are asking, right? That's correct. Non-HDD. Yep. Also, maybe we were showing you the slide number 17. Yeah. Where those motors are used. Particularly, we see motors for home appliances are very, very strong, and thereby we were talking about the home appliances, living room, sanitary, kitchen, or whatever. We are seeing very strong demand continue in the IT area, such as a smartphone and PC. For December quarter, still the gaming consoles have been a very quite a good demand, and all those would help to achieve the record-high sales of the non-HDD small precision motors, as you see in slide number 17. Okay. Do you think this very strong, because obviously for this quarter, we're naturally in a period of very strong demand recovery in areas like autos and also in IT, is largely reflecting this very strong cyclical upturn, or is there a significant change that's happened in the short term, looking at the share between brushless and brush motors? Well, at this moment, we cannot say how long this very strong demand continues. It could be cyclical, it could be more permanent, so far we have seen very strong demand in the home appliances as well as IT. Also, server demand has been somewhat weak in September and December, we are seeing some sign that is coming back. Seasonally, March quarter would be a somewhat weak quarter. That we understand. What's going to happen from next June quarter is something that we have to see. Is that fine? Great. That's fine. Sorry, apologize, very last question. Just to understand the profitability, which was stable overall within that area. For the hard disk drive area, was there any change in profitability? Could you comment on that, please, for Q3? Okay. We are making public that the open margin for the hard disk drive for the December quarter was something like 31.8% GAAP number, and non-GAAP number is 37.4%. Those are the number for HDD spindle motor business for December quarter. Clearly, those numbers are higher than previous September quarter. Okay? Thank you very much indeed. James, thank you very much. Our next question is from Zach Inoue of MUFG Securities. Zach, please go ahead. Hey. Good morning. First of all, congratulations on your very strong results. Two-part question from me. This is on your EV traction motors. Slide 14, very helpful always. You mentioned about the Chinese automakers increase in forward orders. Can you provide more color regarding order inquiries coming from the Chinese EV automakers? My second question is regarding to your EV traction motor production capacity plans. If you can give us a little more clarity or remind us about your production capacity plans, going into 2025 and maybe 2030, that will be great. Okay. Thank you, Inoue-san Zach. This is Seki speaking. What was the first question? Traction motors? Sorry, Zach, can you repeat it again, your first questions? Sure. Yes. Order inquiries coming from the Chinese EV automakers. Previously, you mentioned you used to have eight to- Thank you. you. Thank you for reminding. First, up to Q2 financial announcement, we keep telling trading OEM is keep increasing. Like it was 16, then increased to 22. We received a lot of complaint from OEMs. They don't want us to mention, because area by area, maybe investors and analysts may reach them because of some characteristics. From this time, please allow us not to mention about number of new OEMs into our business. Instead, in this quarters, from October, November, December for three months, we received 15 new projects. It's not decided, but at least a request to studies. Usually, quarterly, we have five to six. This 15 is more than doubles. It's really representing our awareness based on our result is getting more, together with acceleration of EV from Europe and China particularly. This is expanding to Japan and the U.S. Of course, this 15 has a lot of Chinese business. As I mentioned in the beginning, please allow not to tell you too much details. For your second question about the capacity preparations. While we are having many new projects from customers, we still don't want to change 2.5 million target for 2025, because we are seeing that probably after 2025, volume will accelerate. For the preparation stage, from now to 2025, I think our customer volume is some are very reliable, but some are not. We don't want to be too much optimistic, but at least 2.5 million is our plan, and then we will be ready to produce 2.5 million or over by that time. To do that, what we are making effort is in-house parts and in-house equipment. For example, wiring machines or dies or measurement machines. For the components, maybe gears and inverters. We believe after 2025, volume will accelerate all of a sudden. If we are relying on those too much outside, we can't get the speed and then, also, price from parts and components and equipment will be very expensive. We want to control those. Now, our target is one third of the price against outside and one third of lead time from outside. Of course, this is very aggressive, but we're confident to achieve this. That we are preparing. Thanks for shorter lead times, and we don't have to make too much early decisions because our lead time is short. Those are what we are doing. As you know, we already have two plants which already started, one in Pinghu and the other one is Guangzhou. Next year, we have a second line in Pinghu. We are planning for fourth and fifth. Of course, in Europe, we have a firm plan to produce a traction motor for one customer, so that's ongoing. Is that clear answer to you, Zach? Yeah. Very clear. Thanks so much. Okay. Thank you for your question, Zach. Our next question is from Ramsai Neelam of State Street. First of all, congratulations on the great quarter. It's really impressive. One of my first question is on WPR4 program. Understanding first half of the year, you saved almost JPY 10 billion in each quarter. Can you highlight a few things, what you achieved in Q3, in terms of how much you saved the cost and the areas? Also, what would be the focus and scope of this program going forward? The effect of the WPR4 in December quarter might be the JPY 15 billion. It is up to from the JPY 10 billion in September quarter. Mainly due to the procurement cost reduction, because the market is soft at this point. Maybe we are seeing some kind of a up trend of the raw material. December quarter, we materialize that kind of procurement cost reduction. Also the reducing the fixed cost. That's another drivers to create some positive effect. For instance, in Europe, of ACI, that we allow restructuring or integrating the factory. That by doing so, we can reduce the fixed cost in European operation. That's why ACI's operating profit margin is coming up to above the 10%. It is fine. Thank you. Yeah. I have one more question to follow up on James's question on HDD. Is it possible to mention the market share in the month of December for Nidec? What market share? HDD, hard disk drive motors market share. Oh, hard disk drive. Okay. Yeah. At this point, we see the shipment of the quarter was estimated by TechInsights research, 67. We shipped 41. You can calculate. Okay. Yeah. That's it. I have one question on R&D. I think for nine months, the R&D was around JPY 49 billion, or you can call it JPY 50 billion, which was roughly around 58% of your full year guidance. Is that R&D is underspent so far? We can expect a lot of R&D coming in Q4 or what's happening in the R&D area? You mean the total R&D or any particular business? Yeah, total R&D, and if possible, if you can give some numbers on EV-related business, that would be great. At this point, we are keeping the R&D cost spending for fiscal year 2020. Sorry, one minute. Yeah, sure. Yeah, 85. Your full year guidance is JPY 85. JPY 85 billion of R&D in fiscal year 2020. We keep this number. In March quarter, maybe we are going to spend a little bit more. At this point, maybe we are reducing the R&D cost, try to reduce R&D cost. For instance, the insourcing, some can testing in R&D. We invested a motor bench, which is a machine for testing. That's one way to reduce the R&D cost. Those are efforts contributing to reducing the R&D cost. We still keeping the JPY 85 billion of R&D cost in fiscal year 2020. Let me add two points. Yeah, sure. Please. Yeah, please proceed. This is not a straight answer to your questions, but we successfully reducing or making efficiency better R&D for the area. One is testing cost of traction motors. We invested lots of test bench into China, and now it's started earlier than our plans. Traction motor testing cost to outside is extremely high. Thanks for ahead plan of this internal test bench. We are saving from that area. Second, we have a platform concept introduced into the traction motors. Originally, we estimated a very high R&D cost for big differentiations. Time by time, we successfully reducing a differentiation level for product by product. That's reducing. Last, this is nothing from us, but many customer is postponing many new products influenced by COVID-19. This is not good things. We want to have those order earlier, but nothing we can do, they are postponing. That making a natural reductions. Those are main drivers we have less R&D spending. If I can ask, is that R&D saving is one of the contributors in upward revision in your earnings? No, I don't think so. The upward revision are coming from mainly the more sales than expected. Before that year four, the effect that's creating more positive impact in our forecast. Yeah, that's why that we make the upward revision by- Yeah 15 billion in operating profit in fiscal year 2020. Yeah, that's great news. Thank you very much. Ramsai, thank you very much. For the benefits of all participants, I'd like to remind you that, if you would like to ask a question, please press the star key and one on your touch tone phone. Again, please press star and one if you would like to ask a question. Okay. The next question is from Mark Yim of GAMCO. Mark, please go ahead. Yes, thank you very much. My question, it follows on several other questions that were asked on slide 14 for the E-Axle. This is a monthly bar chart. Nagai, when you said that you're planning by 2025 to produce, is that 2.5 million per year of these traction motor products? Compared to the current situation where they're 100,000 cumulative. Is that the correct way to read this? Thank you, Mark. Indeed, we're receiving those orders. Next year is more than doubles and then 2024, 1 million, and then 2025, it's reaching the two point. At this moment, it's precisely around 2.3 million. Of course, we are expecting additional order on top of that. Actually, this is a good reference on page 14. As you can see, quarter-wise, it's better than last year by 25%. As you can see, volume from each model are quite small. Actually, I don't want to criticize for customers. Contract volume from each car are much bigger than this. If we stack up only contract volumes, this is almost triples from this result. Based on that, we are compressing customers volume for forecasting 2025. If it apple-to-apple, we saying it keeps 2.5 million. Last time, no compress of customers order JPY 25 million, and this time we are compressing times 0.8 or times 0.7, depending on customers and the market. It's much bigger. I think our current forecast is much more realistic. Straight answer to your questions, those we are receiving from order and then with our completion ratios. 2.5 will come. Okay. I mean, that is quite a ramp-up, but obviously what you're saying, in terms of demand profile and stuff, would make that possible. Can you just tell me, just roughly, we're looking at a monthly chart here with six models and the Aion S is by far the biggest. When can we start to see more models and more colors joining these monthly charts? Would that be towards the end of this calendar year, we'll really start to see things ramp up in terms of more models and more volume? In your opinion. Sorry, Mark, I couldn't catch your question clearly. Can you repeat it again? Yeah, just a very simple, just qualitative question. On page 14, when you look at the bar charts, you have six models there. Gradually, you see more models being added to the sales figures. When can we just qualitatively start to see more colors added to these bars? I mean, more models coming on. I appreciate your previous statement that you can't really reveal what OEMs are asking you. I know they're secretive, but can you just give us a qualitative feel? Is it going to be towards the end of this calendar year or sometime in 2022 that these numbers really start to be visible in these sales? No. Volume increase coming from expansion of order. Yeah. I think even it stays small from each car, I think it increase. If we go back page 13. Okay. We are splitting the three areas, and then up to 2025, we say this is introduction period. Lots of hesitation from both OEMs and customers, mainly because battery is high. Battery price is high, EV is expensive than hybrid. That's the reality. Okay? We are seeing battery price coming down, and then also we are seeing customer, not all of customer, but some of customer is trying to compromise autonomy distance. At this moment, all OEM preparing a big capacity of batteries, such as 60 kilowatt and 80 kilowatt, while the unit price of battery is very high. The battery is coming down and some customers say, "I'm okay to drive only 300 kilometers," because he has second cars, or he's not going to long travel because of his age, such as such. If it's like a JPY 10 per watt, and then if he compromise at like a 20 kilowatt, suddenly EV become much cheaper than hybrid. We are seeing, and then we are setting like a 25 is a break point, it's going to accelerate. probably even we have a same order, each color, each order become much bigger. That's we are seeing. This period, we need to be very patient while we are having an inefficiency, develop more than another, but volume may stay same, because we have a lot of competitors. The competitors cannot stay with this situation. We are very welcome competitors to escape or remove from this area. Only stronger stay in this segment. That's we are saying, aiming. Okay, thank you. That clarifies it a lot. Thank you so much. Thank you. My next question is small motor demand firmness, as demand for these motors, as you mentioned, moves to TOTO WASHLET and washer dryers and all that stuff. Is this uptick, partly due to the stay-at-home situation, changing your long-term CapEx plans for the small motor area? No. At this point, that's not change. Because Hard Disk Drive business is already a cash hard business. That's why we do not plan to invest money to that business. On the other hand, other precision motors, maybe demand is very high. That's why we are now planning to invest a little bit more, to increase the production capacity. in those appliance areas. The total capital expenditure is around JPY 120 billion at this point for fiscal year 2020. Okay. We do not have any plan to increase the capital expenditure for increasing the production capacity for those areas at this point. You think you have enough capacity? Basically speaking, this demand might have started because of those stay homes. What we are seeing is, world becoming much more sensitive against decarbonizations, CO2 reductions. Everybody are very sensitive to have a much more efficient energy spending. Obviously, our brushless motor are very efficient for every aspect. A bit expensive than brushed motors, but much more friendly for environment. Even small products to large product, we are hearing customer need more efficient ones. That's really developing our sales. May start with stay home, but we believe this is more sustainable. You think your current capacity level is sufficient to meet this future demand? Future demand? Yeah. As more people, as you mentioned, switch to brushless because of the energy efficiency, plus the near-term situation with the work at home. You don't think so? I cannot say by when, how much. Our overall brushless motor share is still 30%-35%, right? I see. We have a 65%-70% room to expand. Okay. I understand. I'm sorry, I'm going to just ask one more question. I'm taking a lot of your time, so I apologize. On this presentation, on the very cover, you put a picture of what looks like a compressor from Embraco. Can you tell us why you chose to put that picture there? Just, are you seeing a big uptick in demand because of cold chain demand globally, for these types of products? Yes. Yeah. Will you say your question more slowly because the quality of the voice is not so good. Oh, I'm sorry. Yes. On the presentation packet that we have, on the first page, you put a picture of what looks like a compressor, right? From Embraco. Can you tell us why you did that? Is there indeed a big surge in demand for cold chain investment globally that you're seeing through Embraco sales? Yes. Fudo. The face page, this picture is a compressor for refrigerator. As you know, we acquired Embraco. 2019, and they are increasing the production capacity and demand is very much strong at this point. That's why we are spending money to increase the production capacity. Maybe the more efficient the compressor or refrigerator is needed in the marketplace. Because we are now quicker staying home, and we need more efficient refrigerator. That's why the demand is getting stronger at this point for those kind of compressor for refrigerator. Again, Seki speaking. It's fact, demand of compressor is very high. We don't have enough capacity. Volume, sales volume is as we can make. We don't know the real reason, but we guess, this is caused by stay at home. People need lots of capacity to keep because they don't want to go out. Actually, both for commercial use and home use, compressor is flying, really. Maybe because of this COVID-19, if COVID-19 becomes stable, compressor demand may go back. We don't want to invest too much. It also is flying, but we are doing minimal investment and maximum effectiveness of the capacity increase. That's a limit at this moment. Okay, thank you very much for answering my questions. Okay. Mark, thank you very much. Our next question will be coming from, again, additional question from Ramsai. Please go ahead. It's just a quick one. Just looking at the guidance. Previous year guidance on PBT and net income, the gap between PBT and net income is around JPY 31,000. With the revised guidance, the gap has actually shrunk to JPY 31,000-JPY 30,000, in spite the rise in PBT. Is there any tax effect, or can you explain, is there any something we have to observe out there? Please, Kai Nakae. Are you talking about the gap between the profit before tax? Yes, profit. Just the net income? Is that GAAP that you are talking about? The gap has shrunk with the revised estimate, even though there is an increase in PBT. Is there any tax effect we are talking about? Yeah. We try to improve the global effective tax rate. As you recognize that that's an effective tax rate is expected at 20% in-. Okay updated forecast at this point. Okay. Thank you. That is it. Okay. Thank you, Mr. Neelam. We have only a few more minutes. The next question is from Harry Waight of BMO Global Asset Management. Please go ahead. Hi there. Thank you for taking my question, and congratulations on the results. Just a quick question about your slide 13, the traction motor vision slide. When you talk about 10 million units by 2030, could you just let me know if you have a rough estimate of what market share you're imagining you would have in that year? Is that like a 25% market share or 50% market share of all of the E-Axles being sold, or do you not have that kind of modeling? Thank you, Harry. We're expecting 30%-35% market share at this moment. Harry, we're seeing a very different view since last year, September, October. It's called SAIC-GM-Wuling Hongguang Mini. That's extremely cheap EVs. It's only- Yeah $4,000 or $4.2 thousand EVs. It's small, but it's really four wheels and then 85 newtons. They made a compromise for only drives. It's only 10-kilowatt batteries. Therefore, officially, it's 120-kilometer drives. Maybe real base is 70, 80 kilometers. After they launched, next month, they sold 20,000. November, December, they reached 30,000-35,000. That's SAIC-GM-Wuling can make. They already increased one line to adapt this market demand. It's not enough, they are now quickly adapting one more line. Capacity become 50,000 per month, which is 600,000 per year. Still, I think demand is much more. This is really proving, if EV launched 3,000 gasolines, it's really flying. Usually, lowest price vehicle was around $8,000. Many people love to purchase a car, but their income didn't reach to purchase. Now it's lower, many people, particularly rural area in China, is very blue to purchase this car. We believe this will be expanded entire China and possibly like India, Africa, Latin America. By that time, POV concept is completely changed. Current vehicle segment will stay with 80 million-90 million. On top, we're expecting maybe 100 million-200 million new demand may come because of this cheap segment. With that, we'll of course challenge that area too. We have to say, this green line is based on current structure of vehicle radius. Future, it may not. I just wanted to transparent to you, that new segment may come, we may have to lead below these lines. Straight answer to your question is- Okay. Thank you. Thank you. That makes sense. Could I ask one very quick follow-up, please? Given Tesla's reputation for vertical integration, and given how valuable and important a part an E-Axle is within an electric vehicle, do you model or imagine in the future that they will be a significant customer of yours? Or do you think that they're likely to remain, would look to have this product manufactured in-house? Sorry, that vertical integration you mean is like page 12? Yeah. Exactly. Just thinking about how much Tesla likes to do everything and make as much as possible internally rather than outsourcing. Okay. I wonder whether- That's your question about vertical integration. Yeah. Okay. Parts by parts, equipment by equipment, we have to split two. One is a very popular, everybody can do, it's same equipment as engine transmissions, like die casting machines, typical. Okay. While engine transmission abundant volumes traction motor housing may require to produce. That's not a rushing point. Meanwhile, like winding machines or die for core, those are very special. For special area will be very congested because page 13 after 25, it's accelerating. That we really have to introduce as in-house, we believe. We have to split those. In the future, once demand is stabilized, we don't have to keep those. We may release, we may keep it, depending on cost and profitabilities. Those are what we are thinking. Okay. Thank you. Thank you. Thank you, Mr. Waight. Thank you very much for your active participation, all participants. Now, we would like to conclude the conference call. I'd like to appreciate for your active participation. Should you have any further questions, please do not hesitate to contact Nidec Corporation or your sales representatives at Mitsubishi UFJ Morgan Stanley Securities. Again, thank you very much for joining the conference call, and you may now disconnect. Thank you very much. Thank you, everyone. Thank you.