Denso has reported a 50% fall in first half income, leading the group to revise downwards its full year targets.

Consolidated net sales totalled Y1,892.3bn (US$18.3bn), a 2.9% decrease from the previous year. The fall led to consolidated operating income of Y114.8bn, which was down 32.1% year on year.

Consolidated net income, meanwhile, fell 50.2% to Y59.0bn.

"Sales decreased mainly due to the decrease in car production in North America and substantial currency exchange loss, despite an increase in car production for Japanese auto manufacturers in ASEAN countries and China," said Denso managing officer Sadahiro Usui. "In addition to the substantial currency exchange loss, increases in labour and raw materials costs led to a decrease in operating income."

In Japan, sales totalled Y1,280.1bn, a 2.2% decrease. In addition to exports to North America falling, along with substantial currency exchange loss, rising raw materials costs led to operating income of Y44.7bn, down 53.1%.

In North, Central and South America, a decrease in sales mainly to Toyota and the three major American automakers, resulting from falling car production in North America, led to a drop in sales to Y356.7bn, down 17%.

Despite cost-reduction efforts, the decrease in production volume and increase in labour costs led to fall of 36.1% in operating income to Y14.9bn.

In Europe, sales totalled Y293.5bn, down 1.7%. Despite a sales expansion to Fiat for air conditioning systems, the slowdown in car production for Japanese auto manufacturers and increase in labour costs led to operating income of Y9.1bn, a 20.6% fall.

In Asia and Oceania, sales were up 0.6% to Y300.6bn, due to continued growth in car production volumes for Japanese auto manufacturers in ASEAN countries and China. Operating income reached Y43.4bn, up 13.2%.

"Considering the severe business environment, including the trend of a worldwide slowdown in car production and the further appreciation of the yen in the second half, we have revised the full-year forecasts for the fiscal year ending 31 March, 2009," said Usui.

The company said it had revised its net sales forecast for the full year to Y3,650.0bn. Full year net income is expected to be Y101.0 bn.