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Achilles to End China Vehicle-Materials Production After Three Loss-Making Years

Achilles Corporation's board has resolved to end production at its wholly owned vehicle-materials plant in Foshan, China, by the end of September, after three years of losses that included a ¥3.26bn impairment, citing the retreat of Japanese automakers from China among its reasons, though it expects only a minor effect on its earnings outlook for the year to March 2027.

By Tokyo Brief DeskSep 28, 20262 min readAchilles Corporation5142
Illustration of a vehicle-interior materials factory winding down production, with fabric rolls being loaded for transfer to another facility.

Achilles Corporation, the Tokyo Prime-listed materials maker, said its board resolved on September 28, 2026 to end production at its wholly owned manufacturing subsidiary in Foshan, Guangdong Province, after three consecutive years of losses at the unit. Production is scheduled to stop by the end of September 2026.

The Foshan plant was set up in May 2019 with capital of 300 million yuan to expand Achilles's vehicle-materials business in China. The numbers since have moved the wrong way: net assets fell from ¥4.68bn in the year to December 2023 to just ¥156mn by the end of 2025, while the subsidiary has not turned an operating profit in any of the three years disclosed.

Foshan Subsidiary: Three-Year Financial Snapshot
Figures from Achilles Corporation's TDnet disclosure; the 2024 net loss includes a ¥3.26bn fixed-asset impairment.
Metric202320242025
Net assets¥4.68bn¥884mn¥156mn
Total assets¥7.39bn¥3.81bn¥3.49bn
Revenue¥1mn¥42mn¥94mn
Operating loss¥711mn¥819mn¥690mn
Ordinary loss¥800mn¥942mn¥773mn
Net loss¥800mn¥4.2bn¥773mn

Achilles attributes the deterioration to pandemic-era activity restrictions and, more recently, the rapid rise of Chinese-brand next-generation vehicles, which the company says has driven a wave of production cuts and pullbacks among Japanese automakers operating in the country. Achilles says it pursued sales beyond the vehicle sector and cut costs to offset rising raw-material prices, but concluded that continuing production would only become harder in an environment it expects to intensify further, and decided to end operations to stop the losses.

With the Foshan line closing, Achilles plans to consolidate vehicle-materials manufacturing at its own operations and at a joint venture in Jiangsu Province, China. The company says it will use the reorganized footprint to pursue the broader mobility sector globally, leaning on what it calls its functional-materials strengths to rebuild profitability in the vehicle-materials business.

Costs tied to the shutdown, including severance payments to employees, are still being assessed and were not quantified in the disclosure. Achilles said it expects only a minor effect from the closure on the full-year consolidated earnings guidance it issued on August 7, 2026 for the year ending March 2027, and said it will promptly disclose any matters that require disclosure as they arise.