Happy New Year! I would like to extend my sincere appreciation to everyone who has given their warmest support and cooperation to the Land Engine Manufacturer’s Association throughout the past year. Thank you.

We were amazed to see how quickly the financial crisis that started in the United States in the fall of 2008 spread throughout the world. This was truly an example of economic globalization in the worst possible way.

Last year, especially during the first half of the year, our country experienced significant reduction in industrial productions and sales due to an accelerated deterioration in the world wide economy. We had to devote considerable amount of time and effort in dealing with these problems and it was indeed a very difficult year for us all.

As we welcome a new year, we are still struggling with the difficult economic conditions and we can expect more of the same for months to come. For 2010, especially during the first half of the year, there will be a tug of war between our optimism for signs of recovery and weariness for potential double bottoming of recession. We will be asked to steer a very difficult course as management of our companies.

With global efforts to deal with the financial and monetary problems, we saw some promises in economic recoveries first in Asia and then in the rest of the world. However, those efforts were primarily led by governmental actions through economic stimulus packages. Unless private sectors of the world lead the economic recovery through their manufacturing and sales, there will not be a true and full recovery.

Let us review some statistical data compiled by our association for engine manufacturing and export for the first 910 months of 2009 from January through September.October

For manufacturing, diesel engines accounted for 592 thousand units (down 41.1 % from the same period last year) or 125 billion yen (down 43.1%); gasoline engines accounted for 2 million 997 thousand units, (down 68.4%) or 56 billion yen (down 61.1%).

For exports, diesel engines accounted for 263 thousand units (down 39.9% from the same period last year); gasoline engines accounted for 1 million 498 thousand units (down 59.3%).

As you can see, both manufacturing and exports were significantly down from the same period last year. Reductions in the manufacturing are larger proportionately than in exports.

Demands for engines are strongly influenced by investments in home building and industrial production activities. This discrepancy might reflect relative weaknesses in recoveries of both of the sectors in Japan, Europe, and United States. This might also reflect that, other than reducing production costs, our associations members are adjusting production and inventory levels as the only other ways to deal with the deepening recession.

Our future plans for developing engines with less emission of harmful gasses such as NOx and PM will contribute significantly to slowing down global warming as well as complying with the “4th Generation Emission Controlled Engine Development(so called Tier 4 Emissions Regulations for engine)” requirement that will be introduced in Europe and the United States starting in 2011. This year, 2010, will not only be a crucial year in finalizing technological developments required for these new generation of engines but also will be opening a new era of engine industry. This opportunity provides Japanese engine manufacturers to establish its leadership in the global engine industry with their engineering and technology to achieve reductions in the emissions of gasses harmful to the world environment.

To overcome even more fierce competition, we may also need to move manufacturing facilities to overseas locations. As markets in advanced industrialized nations such as Japan, Europe, and the United States stagnate, we, the Japanese manufacturers, must look to expanding markets in newly developed nations. We can look forward to moving manufacturing facilities and penetrating new markets in those regions which had been plagued by less efficient use of energy and less efficient emission control, if we could be more helpful to the environment in those regions as well help prevent global warming worldwide.

One example of such efforts undertaken by our association is our own “voluntary regulation of LEMA on small general purpose engines” that was established 7 years ago. We received high praises from various organizations due, in most part, to your cooperative efforts. Thank you.

Developments of bio-energy technology, hybrid technology, improvements in battery technology and the new administration’s declarations on global warming policies indicate that there are changes taking place in the business environment and market structure that surround our industry. Not only do we need to address the basic concerns facing us as individual companies but just as equally important, innovations in new technologies, increases in our competitiveness and develop intermediate and long-term strategic growth models for our industry.

I wish each and every member of our association the continued successes and progresses in returning to a sustainable growth for this coming year. Thank you.