Unidentified Analyst: I also have a question on China and another question regarding the investment in Ampere. Regarding the China market, yes, there’s intensified competition with local companies and also at the risk of repeating from the second half to next fiscal year, your forecast is decline in sales. How have you factored in the economic factor of China into your revised outlook? There has been behavioral reform. announced by other companies, do you have any plans for such reform? The second question is Ampere investment. Strengthening the technology capability. Yes, that applies to Europe. But what about the U.S. and China market beyond Europe. How do you leverage how will you leverage the technological capability of Ampere?
On your second question, you said — what did you say the local technology capacity. Ampere investment will lead to technological synergy. So, do you intend to leverage that synergy strengthening not only in Europe but beyond Europe in China and the United States.
Makoto Uchida: Thank you very much for the question. On China, again, this question was on China. One of your questions on China, first of all, Q1, Q2. When we analyze the China market, I believe there were several factors. Price competition intensified and as you are well aware, since late last year, the subsidy regarding the NEV company, there was much news and therefore in Q1, consumers hesitated to purchase. That’s our analysis. And that trend has come down, for example, emissions regulation July rule. That was already factored in. And there has been a slight postponement. So, the market situation has changed quite dramatically, and that has appeared in Q2. So, in terms of TIV, Q3 and Q4, China, if we compare that to Q1, we see prospects for further growth.
However, in this context, we have to offer competitive models by insuring chips so that we can satisfy the customers. And it’s not going to be that easy to regain performance in the China market. So, we revised downward our outlook. But of course, within the company, we are discussing how we can gain back our performance in China and then how we can also drive that recovery to future growth. And I think that will be one of the points to be prioritized. If necessary, Steve, would you like to add on to what I said on China later? But let me respond to the second question first before I give the microphone to Steve. On equity investment in Ampere, as I have been saying, in the market, we have to change the way we do things. So the most recent example is China.
A major historical turning point was reached China was a big change and China was a big trigger for us to determine that we need to change significantly. And similarly, and by the way, this is purely our own analysis, but similar trends will surely occur in North America. And regarding European regulations, there will be further progress and evolution. So, we will invest in Ampere, and that would lead to inter-complementarity. And as we try to implement our strategy, this will offer us many advantages. More bluntly spoken, our resources are limited. So how do we allocate our resources and what do we do in each market with our partner? That is the context in which we decided on investment in Ampere, we have to visualize that resource allocation and that also includes the review of how the strategy we have implemented so far.
We have a history, we have the legacy and we tend to be bound by such legacy as we look at business future. And I blame myself for doing that, but looking at how the market is changing at the moment, how do we allocate our resources? What do we do? And how do we do? I think that would be the priority for the mid-term plan and beyond. So in that sense, I truly hope that we can demonstrate that in our mid-term plan announcement. And in many ways, customers’ needs is changing and the speed is different market-by-market. In terms of Ampere investment in Europe, this is an advantage. And it would strengthen our electrification strategy. Software is the UV day will be putting much efforts. LCV, in our LCV market, there would be support not just in the European market, but that would lead to our advantages and synergy in other markets outside of Europe and we will clearly find and visualize those advantages going forward.
