#1HITACHI Inspire the Next Hitachi Astemo, Ltd. Business Strategy Astemo Brice Koch President & CEO Hitachi Astemo, Ltd. January 18, 2021#2HITACHI Summary - Launched to make the world a better place Inspire the Next • Hitachi Astemo aims at making our planet sustainable for future generations • Building on the strength of its 4 founding companies Hitachi Astemo a global leader to stay ahead of CASE • Good balance among customers and regions. • • Leading market share in focused area - XEV, selected ICE, chassis, key motorcycle products and solutions Concentrate R&D on growth area with leveraging Hitachi R&D capability XEV, AD/ADAS, advanced chassis, next generation 2-wheeler • Hitachi Astemo creates value for stakeholders • Synergy creation of 60BJPY in FY25 • • Sales CAGR at 2x the market and 15% EBITDA margin in FY25 Realize carbon neutrality in production lines by 2030 Reduce CO2 emission from product usage by 50% by 2030 Astemo CASE: Connected, Autonomous, Service/shared, Electrified, xEV: Electric Vehicle, ICE: Internal Combustion Engine AD/ADAS: Autonomous Driving / Advanced Driver-Assistance Systems CAGR: Compound Average Growth Rate, EBITDA: Earnings Before Interest Taxes Depreciation and Amortization Hitachi Astemo, Ltd. 2021. All rights reserved. 2#3Astemo Introduction HITACHI Inspire the Next Hitachi Astemo, Ltd. 2021. All rights reserved. 3#4What Astemo stands for HITACHI Inspire the Next Astemo Advanced Sustainable Technologies for Mobility Established January 1, 2021 Global presence: Locations in 27 countries Consolidated number of employees 90,000 Shareholders Hitachi, Ltd. 66.6% Honda Motor Co., Ltd. 33.4% Contribution to Society Improve safety, comfort and quality of life with AD/ADAS systems and advanced chassis Contribution to Environment Economic Contribution Electrification systems with efficient and sustainable technologies FY2021: 1.6 TJPY of sales and >10% EBITDA FY2025: 2.0 TJPY of sales and ~15% EBITDA Astemo AD: Autonomous driving, ADAS: Advanced Driver Assistance System, EBITDA: Earnings Before Interest Taxes Depreciation and Amortization Hitachi Astemo, Ltd. 2021. All rights reserved. 4#5Industry & market dynamics Accelerating towards carbon neutrality Governments promoting policy to achieve NetZero CO2 emission • CASE technologies demand increasingly large investment in R&D, especially software Dramatic rise in R&D expense among OEMs • COVID-19 • • • Unprecedented impact on the Auto industry Decline in global production expected to continue at least until end of FY2020 China recovered, U.S. recovery from FY2021, Europe and ASEAN recovery from FY2022 Vehicle production approx. 2% CAGR* with XEV & AD/ADAS expected >25% CAGR* *Compound Average Growth Rate (2019-25), Source: IHS, McKinsey & Company CASE: Connected, Autonomous, Service/shared, Electrified,, XEV: Electric Vehicle, AD: Autonomous Driving, ADAS: Advanced Driver Assistance System, CAGR: Compound Average Growth Rate HITACHI Inspire the Next Global vehicle production vs xEV AD/ADAS 100 (M units) 90 Vehicle equipped with AD/ADAS (CAGR32%) 80 Vehicle production (CAGR 2%) 70 60 50 40 30 20 10 XEV production (CAGR 27%) 0 2019 2020 2021 2022 Global Vehicle production volume XEV 2023 2024 2025 AD/ADA Dramatic increase in vehicle software 1200 (Millions) 1000 (Level 5 autonomous driving Vehicle)_. 800 600 400 200 0 2005 2010 2015 2020 2025 Lines of code per vehicle Astemo Source:https://www.volkswagenag.com/presence/investorrelation/publications/pr esentations/2020/01-januar/January_2020_VWAG_Investor_Roadshow.pdf Hitachi Astemo, Ltd. 2021. All rights reserved. 5#6Opportunity to create next generation solutions HITACHI Inspire the Next Built to succeed as an independent, global supplier driving innovation, contributing to a greener world and improving quality of life Astemo KEIHIN SHOWA NISIN ● Hitachi Automotive Systems Advanced technologies that define tomorrow's mobility solutions • Market leadership in selected core products and solutions • Business scale and comprehensive footprint to better serve customers Best partner for our customers globally Astemo Hitachi Astemo, Ltd. 2021. All rights reserved. 6#7Hitachi Astemo leadership PT & Safety Sys. Bus. Division Toru Kamioke Board of Directors Keiji Kojima Board Director (Chairman) Keiichi Aida Brice Koch Toru Kamioke Representative Director Director Representative Director Yoshihiko Kawamura Director (Non-Ex.) Yoshikado Nakao Director (Non-Ex.) President & CEO Chassis Software Business Business Division Division Aftermarket Business Division Bradley Maggart Takeshi Mitamura J.B. Pellefigues Tech. Dev. Functional Division Keiichi Aida Sales Mgt. Func. Div. Hideo Hatagi Asia Region Hirohisa Amano Americas Region Transformation Richard Grabinger Corporate Strategy & Planning Func. Div. Operations Office Doug Bowling Governance Yasushi Kawaguchi Finance & Accounting Func. Div. Takeshi Miyamoto Human Capital Func. Div. Brice Koch HITACHI Inspire the Next Motorcycle Bus. Div. Nobuyuki Sugiyama Business Division Hiroshi Hasegawa Takashi Yamaguchi Global Functions Europe Region Japan Region China Region Regions Paul Carroll Tim Clark Yuzo Kadomukai Weili Sena • Optimal talent from 4 companies • Composed of American, Austrian, Chinese, French, Japanese and Swiss nationals Astemo PT: Powertrain © Hitachi Astemo, Ltd. 2021. All rights reserved. 7#8Astemo Strategy HITACHI Inspire the Next Hitachi Astemo, Ltd. 2021. All rights reserved. 8#9Comprehensive global coverage 4W DVICS Serving customers around the world ASTON MARTIN CORO Audi 北汽银翔 BAIC VINXIANG 长安汽车 CHANGAN AUTO HITACHI Inspire the Next CEVT 2W DAIHATSU HYUNDAI MOBIS MASERATI 3) mazda DAIMLER HYUNDAI ISUZU 东风风神 NISSAN FIAT Ford gm OHINO LOTUS MOTOR CORPORATION Jatco JCB POEMSYSTEMS For Earth, For Life KIA LAND ROVER Kubota ✰ FUSO PEUGEOT 一汽丰田 TOYOTA BAJAJ Distinctly Ahead EYEO Beta motorcycles UD UD TRUCKS ALTERNATIVE FUEL SYSTEMS Prins DUCATI GK GAOKIN SAIC 上汽集团 SAIC MOTOR VOLVO ⑦ 光庭科技 Kotel Technology SUBARU MARUTI SUZUKI SUZUKI 小鹏 YANMAR 吉利汽车 W Haojue MOTOR HARLEY-DAVIDSON CYCLES Hero HONDA LONGJIA ☑ ROYAL ENFIELD SUZUKI PIAGGIO SYM TRIUMPH T TVS Regional sales ratio Kawasaki GEELY AUTO KIM YAMAHA ZERO 141 sites worldwide FY2021 FY2025 Americas 29 Asia 19% Japan 33% Asia 20% Japan 30% Asia 37 China 24 China 16% ~1.6 TJPY ~2 China 18% TJPY Europe 13 Japan 38 Americas 25% Americas 25% EU 7% EU 7% Astemo 4W: 4-wheeler, 2W: 2-wheeler Hitachi Astemo, Ltd. 2021. All rights reserved. 9#10Global synergies and opportunities HITACHI Inspire the Next Leverage scale and technology to achieve and upgrade global leadership Region Strategy Americas • Expand sales of XEV through the existing delivery programs expected to grow Leverage alliances between global OEMs for horizontal expansion Asia China Europe Japan Astemo • • • . • • Propose attractive 2W products with each company's strengths combined Promote 4W XEV & ADAS for India responding to increasing needs for advanced technologies Expand sales of XEV products to customers including local independent OEMs on the basis of existing programs Pursue opportunities for alliances in e-Axle sub-system for growing EV demands Promote as more reliable partner for OEMs leveraging assets of seneos & CBI Expand XEV businesses with global horizontal expansion with the strategies of EU customers Leverage our position as a global mega supplier with innovative technologies to promote further alliances Combine capabilities of Hitachi group and partners in focused business areas XEV: Electric Vehicle, ADAS: Advanced Driver Assistance System, 2/4W: 2/4-wheeler, CBI: Chassis Brakes International Hitachi Astemo, Ltd. 2021. All rights reserved. 10#11Leading market share in focused areas HITACHI Inspire the Next 20181 20201 2021 2025 Percentage of sales from global top 3 products: 20% 40% 50% >60% 4W Relative market share of focused products 0.0 0.2 0.4 XEV2 (inverter, motor) Keihin Hydraulic suspension 0.6 Showa AMS Foundation brake AMS Nissin Engine/AT control unit #4 Keihin 0.8 AMS #2 (With CBI) 1.0 1.2 #1 Astemo Combined 2W Relative market share of focused products 0.0 1.0 2W throttle body 2.0 3.0 4.0 #1 #1 2W suspension Astemo Combined Keihin Astemo #1 Combined Showa Astemo Combined 2W caliper AMS Astemo Combined (incl.CBI) #1 Astemo Nissin Combined AMS Astemo Combined 1. Pro-forma figures of each company's results combined. 2. Based on FY25 sales value basis; inverter + motor; excluding in-house players. : Note: Relative market share market share against that of its largest competitor (against No.1 or in case of No.1, against No.2)., based on FY18 volume (except xEV). Source: Companies IR documents; Company websites; IHS Astemo 4W: 4-wheeler, 2W: 2-wheeler, XEV: Electric vehicle, AT: Automatic Transmission, AMS: Hitachi Automotive Systems, CBI: Chassis Brakes International © Hitachi Astemo, Ltd. 2021. All rights reserved. 11#12Shifting to growth areas Position Category Selected ICE Direction Invest selectively in last-man-standing offerings Leverage full • potential Focus on fuel efficiency technologies combined with HEV Chassis Maximize synergies • components ⚫ Global leadership with scale, footprint and technologies Strengthen market positioning 2-wheeler • Leverage 4-wheel technologies Optimized investment Leverage growth potential Aftermarket • Broaden product portfolio HITACHI Inspire the Next Growth '20-30 Concentrate R&D on growth area with fully leveraging Hitachi R&D capability Prioritized investment to capture market growth Prioritized XEV . Sustain global leader position for motors, inverters & software investment AD/ADAS Future growth engines Advanced Chassis Next gen. 2-wheel Focused investment in high potential products . Leadership in ECU & software collaborating with Hitachi, Ltd. Create new value for safety & comfort Integrated control of Brakes, Suspension and Steering Propose new technologies and solutions • Enhance electrification and attitude control ICE: Internal Combustion Engine, HEV: Hybrid Electric Vehicle, AD: Autonomous Driving, ADAS: Advanced Driver Assistance System, XEV: Electric vehicle, 2W: 2-wheeler, ECU: Electronic Control Unit Astemo © Hitachi Astemo, Ltd. 2021. All rights reserved. 12#13Ready for the CASE era Redefine mobility for social innovation HITACHI Inspire the Next • Eliminate mobility restrictions and contribute to the goal of zero traffic accidents • Contribute to environmental sustainability with zero emissions of carbon dioxide Enhance the higher level of Integration for Environment, safety and comfort · Multi-modal transport solutions • Mobility as a service • Energy management system Astemo LUMADA Cyber security • • • Data accumulation and Al analysis • OTA Connected car technologies Onboarding device and software AD/ADAS Advanced environment recognition Integrated electronic control XEV Advanced electric powertrain package Astemo Advanced Chassis Integrated vehicle movement control CASE: Connected, Autonomous, Service/shared, Electrified, OTA: Over The Air, AD: Autonomous driving, ADAS: Advanced Driver Assistance System, XEV: Electric vehicle Hitachi Astemo, Ltd. 2021. All rights reserved. 13#14Creating the next generation motorcycle Leverage 4-wheel technologies in motorcycles • Engine control for tighter emission regulation • Chassiss control technologies • Electrification Technologies Electrification (e-Axle) PCU KEIHIN Regenerating brakes NISIN HITACHI Inspire the Next Further improve competitiveness leveraging leadership position • • Optimize customer pipeline, manufacturing technologies, local suppliers, etc. Component and technology integration, in-house production Investment Attitude control technology for safety Motors HITACHI Inspire the Next PCU: Power Control Units Gears SHOWA Engine control KEÏHIN Suspension control SHOWA Brake Control NIFIN Create new value for next generation motorcycle components / systems Astemo © Hitachi Astemo, Ltd. 2021. All rights reserved. 14#15Astemo Value HITACHI Inspire the Next Hitachi Astemo, Ltd. 2021. All rights reserved. 15#16Economic contribution Building a solid future From pre-merger to Astemo and beyond Internal initiatives Strengthen Astemo COVID-19 portfolio Proforma Pandemic calculation in ~2T JPY Enhance Revenues FY2020 ~1.6 TJPY competitive 1.5 TJPY advantages XEV AD/ADAS XEV AD/ADAS Nissin Showa 2W 2W Invest in Keihin critical FY2019H1 18% Chassis Chassis enablers Hitachi Automotive Systems HITACHI Inspire the Next Anticipated results #1 - #3 Market position Sales ~2x CAGR Vehicle production ICE ICE Industry-leading Address FY2019 FY2020H1 FY2021 FY2025 risks and EBITDA growth 6.6% >10.0% -15% ~15% EBITDA margin margin Astemo XEV: Electric vehicle, AD: Autonomous Driving, ADAS: Advanced Driver Assistance System, 2W: 2-wheeler, ICE: Internal Combustion Engine EBITDA: Earnings Before Interest Taxes Depreciation and Amortization Hitachi Astemo, Ltd. 2021. All rights reserved. 16#17Economic contribution Transformation path Key components of Astemo transformation activities Strengthen portfolio • Global leadership in XEV, ADAS and • advanced chassis Refocus on selected ICE • Motorcycle expansion, leveraging footprint and CASE solutions Enhance competitive • • advantages Supply Chain savings Optimized plant ops/ footprint Lean SG&A Quality: Further improve quality • Invest in critical enablers Superior visibility and efficiency thanks to BI & digitalization Integrate quality in all processes • Enhance Software • capabilities further Optimal Global Operating Model supporting business • HR & Culture • HITACHI Inspire the Next Address risks and growth M & A risk • Implementation . and mobilization risk Sales excellence: grow with focus OEM & CASE Astemo Fully capture the value of Hitachi Astemo XEV: Electric vehicle, ADAS: Advanced Driver Assistance System, ICE: Internal Combustion Engine, CASE: Connected, Autonomous, Service/shared, Electrified, SG&A: Selling, General and Administrative Expenses, BI: Business Intelligence, HR: Human Resources Hitachi Astemo, Ltd. 2021. All rights reserved. 17#18Economic contribution Synergy plan summary (FY2021-2025) BJPY Synergies gained vs FY2019 60 60 40 20 Supply Chain 8 0 FY2021 FY2022 FY2023 FY2024 FY2025 Sales G&A " Best-of prices ■ "Make or Buy" " " Optimize supplier base " Leverage scale R&D • Product/program overlap integration and optimization Astemo " Optimize sales synergies across OEMs Leverage sales footprint and structure Footprint " ■ CAPEX and logistics optimization HITACHI Inspire the Next Synergies One-off expenses for integration PPA Simplify and enhance efficiencies Quality ⚫ Leverage best-practice CAPEX: Capital Expenditure, PPA: Purchase Price Allocation © Hitachi Astemo, Ltd. 2021. All rights reserved. 18#19Contribution to environment Astemo for a greener future Governments trending towards NetZero policy EU NetZero by 2050 China NetZero by 2060 Target HITACHI Inspire the Next Japan USA NetZero by 2050 NetZero by 2050 Factories: Realize "carbon neutrality" in production lines by 2030 Products: Reduce CO2 emission from product usage by 50% by 2030 Carbon neutral in factories • Improve production efficiency including optimization of manufacturing sites • . Retrofit and renew equipment for energy savings Maximize renewable energies Dong Guan Keihin Astemo 50% CO2 emission reduction from products • Provide highly efficient electrification components Contribute to improved fuel consumption - Engine management technologies - Fuel saving through AD/ADAS - Weight saved chassis components AD: Autonomous Driving, ADAS: Advanced Driver Assistance System © Hitachi Astemo, Ltd. 2021. All rights reserved. 19#20Contribution to society Astemo powering good Built to make the world a better place • • Society Astemo contributes to a safer and sustainable society Efficient and sustainable technologies Products with reduced emissions Improving safety, comfort and quality of life for all Astemo GOOD HEALTH AND WELL-BEING AFFORDABLE AND CLEAN ENERGY HITACHI Inspire the Next INDUSTRY, INNOVATION AND INFRASTRUCTURE 11 SUSTAINABLE CITIES AND COMMUNITIES 13 CLIMATE ACTION Customers Astemo is a unique partner in redefining mobility Collaborating on increasingly advanced solutions Increased scale • • Global leadership • Global footprint Employees Astemo provides the opportunity to create next generation technologies . Career opportunities • . Diverse and global Working together to create next generation technologies Astemo Investors Astemo persistently increases value for stakeholders and improves ROI • Social value Environmental value • Economic value Hitachi Astemo, Ltd. 2021. All rights reserved. 20#21Hitachi Social Innovation is POWERING GOOD#22HITACHI Inspire the Next#23Reference: About Dr. Brice Koch Jan 2010 Dr. Brice Koch HITACHI Inspire the Next Apr 2018 May 2017 Jan 2014 Feb 2012 Jan 2007 President & CEO, Hitachi Automotive Systems, Ltd. Executive Advisor to Group CEO (Strategy), Hitachi, Ltd. CEO, OC Oerlikon Group Member of Group Executive Committee, ABB, Ltd. Executive VP, Head of Power Systems Division Member of Group Executive Committee, ABB, Ltd. Executive VP, Head of Marketing & Customer Solutions ABB North Asia President Chairman & President of ABB (China) Ltd. Business Area Mgr. for Transformers & Components Group SVP & Member of Power Technology Global Div. Mgt. Team Business Unit Manager for Railway Systems, ABB, Ltd. Joined ABB, Various Mgt. Positions until Jan. 1999 PhD in Material Science Swiss Federal Institute of Technology (ETH), Zurich, Switzerland Assistant Professor Swiss Federal Institute of Technology (ETH), Zurich, Switzerland Moved to Switzerland Born in Mulhouse, France Jan 2002 Jan 1999 Feb 1994 Aug 1993 Feb 1990 Sep 1984 May 1964 Astemo Hitachi Astemo, Ltd. 2021. All rights reserved. 23#24Cautionary Statement HITACHI Inspire the Next Certain statements found in this document may constitute "forward-looking statements" as defined in the U.S. Private Securities Litigation Reform Act of 1995. Such "forward-looking statements" reflect management's current views with respect to certain future events and financial performance and include any statement that does not directly relate to any historical or current fact. Words such as "anticipate," "believe," "expect," "estimate," "forecast," "intend," "plan," "project" and similar expressions which indicate future events and trends may identify "forward-looking statements." Such statements are based on currently available information and are subject to various risks and uncertainties that could cause actual results to differ materially from those projected or implied in the "forward-looking statements" and from historical trends. Certain "forward-looking statements" are based upon current assumptions of future events which may not prove to be accurate. Undue reliance should not be placed on "forward-looking statements," as such statements speak only as of the date of this report. Factors that could cause actual results to differ materially from those projected or implied in any "forward-looking statement" and from historical trends include, but are not limited to: ■ exacerbation of social and economic impacts of the spread of COVID-19; ■economic conditions, including consumer spending and plant and equipment investment in Hitachi's major markets, as well as levels of demand in the major industrial sectors Hitachi serves; ■ exchange rate fluctuations of the yen against other currencies in which Hitachi makes significant sales or in which Hitachi's assets and liabilities are denominated; ■uncertainty as to Hitachi's ability to access, or access on favorable terms, liquidity or long-term financing; ■uncertainty as to general market price levels for equity securities, declines in which may require Hitachi to write down equity securities that it holds; ■fluctuations in the price of raw materials including, without limitation, petroleum and other materials, such as copper, steel, aluminum, synthetic resins, rare metals and rare-earth minerals, or shortages of materials, parts and components; ■estimates, fluctuations in cost and cancellation of long-term projects for which Hitachi uses the percentage-of-completion method to recognize revenue from sales; ■increased commoditization of and intensifying price competition for products; ■uncertainty as to Hitachi's ability to attract and retain skilled personnel; ■uncertainty as to Hitachi's ability to continue to develop and market products that incorporate new technologies on a timely and cost-effective basis and to achieve market acceptance for such products; fluctuations in demand of products, etc. and industry capacity; ■uncertainty as to Hitachi's ability to implement measures to reduce the potential negative impact of fluctuations in demand of products, etc., exchange rates and/or price of raw materials or shortages of materials, parts and components; ■credit conditions of Hitachi's customers and suppliers; ■uncertainty as to Hitachi's ability to achieve the anticipated benefits of its strategy to strengthen its Social Innovation Business; ■ uncertainty as to the success of acquisitions of other companies, joint ventures and strategic alliances and the possibility of incurring related expenses; ■uncertainty as to the success of restructuring efforts to improve management efficiency by divesting or otherwise exiting underperforming businesses and to strengthen competitiveness; ■general socioeconomic and political conditions and the regulatory and trade environment of countries where Hitachi conducts business, particularly Japan, Asia, the United States and Europe, including, without limitation, direct or indirect restrictions by other nations on imports and differences in commercial and business customs including, without limitation, contract terms and conditions and labor relations; ■the potential for significant losses on Hitachi's investments in equity-method associates and joint ventures; uncertainty as to the success of cost structure overhaul; ■the possibility of disruption of Hitachi's operations by natural disasters such as earthquakes and tsunamis, the spread of infectious diseases, and geopolitical and social instability such as terrorism and conflict; ■ uncertainty as to the outcome of litigation, regulatory investigations and other legal proceedings of which the Company, its subsidiaries or its equity-method associates and joint ventures have become or may become parties; the possibility of incurring expenses resulting from any defects in products or services of Hitachi; ■uncertainty as to Hitachi's ability to maintain the integrity of its information systems, as well as Hitachi's ability to protect its confidential information or that of its customers; uncertainty as to Hitachi's access to, or ability to protect, certain intellectual property; and ■uncertainty as to the accuracy of key assumptions Hitachi uses to evaluate its employee benefit-related costs. The factors listed above are not all-inclusive and are in addition to other factors contained elsewhere in this report and in other materials published by Hitachi. Astemo Hitachi Astemo, Ltd. 2021. All rights reserved. 24