Thank you for joining us today. I am Akitoshi Ichii, President and CEO of NSK Ltd. Today, I will explain the fiscal 2022 first half results, followed by our revised full-year forecast and progress on our mid-term management plan, MTP 2026. First, we'll review the first half results. Ongoing supply chain problems such as the restrictions on economic activity under China's zero-COVID policy, the prolonged impact of the situation in Ukraine, and the shortage of semiconductors have inflated the cost of steel, transportation, and energy, and the yen has been weakening against the US dollar beyond our assumed rate of JPY 120 . In this environment, in the first half, we achieved sales of JPY 463.8 billion, with an operating income of 2.9% or JPY 13.5 billion.
Net income was JPY 6 billion, and sales increased by JPY 46.1 billion, while operating income declined by JPY 2.2 billion compared to the same period last year. We will go into further detail regarding sales on subsequent slides. Compared to our May forecast for the first half of this fiscal year, sales for the first half came in at JPY 450 billion, an increase of JPY 13.8 billion, and operating income was JPY 11 billion, an increase of JPY 2.5 billion. However, as you can see on the right-hand side, after excluding the effect of exchange rates, which was JPY 18.9 billion for sales and JPY 4.7 billion for profits, sales and profits declined. This is mainly due to the decline in sales in the automotive business.
Next, on slide four, we have a summary of sales in the first half. As you can see on the left, sales for the first half of fiscal 2021 were JPY 417.8 billion. As I mentioned earlier, fiscal 2022 first half sales increased to JPY 463.8 billion. But as shown on the upper left side, there was a JPY 37.7 billion exchange rate impact and a JPY 11.5 billion impact from transferring increased costs to sales prices. In constant terms basis, sales comes in at JPY 414.6 billion, as shown on the far right, down 1% year-on-year. Further, looking at the first and second quarter results, in the first quarter, there was effectively a lockdown in Shanghai.
We see a recovery from the impact of that in the second quarter and an overall trend towards a recovery in sales. Next, on slide five, as I mentioned earlier, the V- chart shows operating income of JPY 13.5 billion in the first half compared to JPY 15.7 billion in the same period in the previous year, a decline of JPY 2.2 billion. As I explained previously, one reason is the decline in real volume, resulting in a negative impact of JPY 4 billion, as seen on the left side of the chart. In the next column, you can see we achieved a JPY 2.5 billion reduction in procurement costs as planned. Moving on.
There was a gap between inflation and passing on inflation to sales prices, with inflation having a negative impact of JPY 15.8 billion, while passing on increased costs to sales prices had a positive impact of JPY 11.5 billion. Inflation is accelerating slightly faster than expected, and although we are accelerating our transfer of costs to sales prices to catch up, we have more catching up to do. As for changes in costs, labor and SG&A expenses increased while improvement in steering sales and profit came in positively as planned. In the next column, you can see that although there is a positive exchange rate impact of JPY 8.3 billion, it is not enough to offset the decline in other items. Unfortunately, operating income declined JPY 2.2 billion year-on-year.
Next, on slide six, looking at the results by business segment. As you can see, the first half sales in the industrial machinery business are JPY 192.9 billion, and segment income was JPY 20.5 billion with a double-digit profit margin. Looking at the current business environment, in addition to the impact of COVID-related policy, there has been a slowdown in machine tools and semiconductor equipment. However, looking at the first half of the fiscal year, we were able to maintain an increase in sales of approximately 3.5% in real terms, excluding the impact of exchange rates of JPY 16.1 billion and the transfer of increasing costs to sales prices as shown on the slide.
Including the effect of exchange rates and other factors, we achieved a JPY 6.3 billion increase in segment income and were able to maintain a segment income margin of 10.6%, similar to the previous year's level. In the second half, we will continue to work to maintain a segment income margin of 10% or more, including efforts on the sales price side, where we slightly lost ground. Next on slide seven, we have the automotive business. Sales for the first half were JPY 252.3 billion, an increase year-on-year, due in part to the impact of exchange rates. On the other hand, segment income was JPY 6.1 billion in the red, a decrease of JPY 6.4 billion from the previous year. Effectively, we had an increase in sales and a decrease in profits.
As I mentioned on the first slide, one of the factors behind the increase in sales and decrease in profit is that volume, excluding the effect of exchange rates, has effectively decreased compared to the previous year. We have been reflecting cost increases due to inflation in sales prices, but still have more catching up to do. In terms of global automotive production volume, we estimated 36 million vehicles were produced in the first half. Although this represents a 3% increase over the first half of the previous year, NSK's sales did not match this 3% increase, which I believe is causing concern to our shareholders. There are three factors here. One is regional differences. Essentially, the number of vehicles being produced is falling in regions where we have a large market share in Japan, China and North America. The second is production volume.
For tier one and tier two automakers in the first half of last year, there was a slight buildup of inventories with the expectation of a recovery from the shortage of semiconductors. Our customers are using the supply of parts they have built up. The third is automotive components, which have been greatly affected by the Russia situation. Although there are concerns about the recovery of semiconductors, we expect around a 10% increase in global automotive production volume in the second half of the year. We are working to return to the black for the full-year. Moving on to slide nine, we have the forecast for the full-year. In terms of the business environment, the industrial machinery business has unfortunately fallen into a situation where global demand is slowing down. We have reflected this in our revised forecast as shown on the slide.
Although we expect our automotive business to recover by about 10%, we are slightly lowering outlook compared to our initial forecast because the current shortage of semiconductors will not yet be resolved. Since inflation continues to exceed our expectations, we have taken additional measures to address it, and the current weakening of the yen is reflected in our assumed rates. Therefore, the rate of the second half of the year is expected to be JPY 140 to the US dollar. As a result, we have slightly revised our full-year forecast announced in May and now expect sales of JPY 980 billion, operating income of JPY 44 billion, and net income of JPY 27 billion. This is a JPY 40 billion increase in sales and a JPY 4 billion increase in operating income compared to the May forecast.
As noted in the exchange rate column, excluding the exchange rate impact of JPY 50 billion in sales and JPY 13 billion in income, the volume of sales is still slightly down compared to our original forecast. The dividend remains unchanged and will be kept at JPY 30 per share for the year as planned. On the next page, I will explain the factors behind change in operating income between fiscal 2021 and our forecast for fiscal 2022. The left-hand side shows the breakdown of the factors behind the May forecast, which we expected to be up JPY 10.6 billion from the previous year, so JPY 40 billion. Our May forecast was based on achieving real increases in sales volume.
For decrease in procurement costs, we expect a positive impact of JPY 4 billion against a JPY 21.5 billion increase in costs driven by inflation. We had planned to transfer JPY 19.5 billion of the increased costs to sales prices to more or less offset the impact of inflation and sales price reductions. As for expenses, we expected an increase in labor costs and depreciation and amortization of approximately JPY 10 billion and an improvement in steering sales and profit of JPY 3 billion for a net decrease of JPY 7 billion. Since we initially estimated the exchange rate at JPY 120 , the impact was forecast at JPY 3 billion. Overall, in the full-year forecast set out in May, we expected a JPY 10.6 billion increase in operating income.
These are the factors behind the May forecast operating income of JPY 40 billion. The revised forecast reflects the fact that in terms of the real volume, sales are expected to decrease to almost the same level as the previous year, and the impact of volume or JPY 11 billion and the further development of inflation, JPY 14 billion, alongside a similar amount of transfer of costs to sales prices, have been included in this forecast. With regard to changes in expenses, the company has been reducing labor costs and other expenses. In the first half of the year, amid fluctuating volume increases and decreases, certain plants made efforts to shorten operations. This and related efforts accumulated to a positive impact of JPY 1.5 billion.
Overall, for fiscal 2022, our revised operating income forecast is JPY 44 billion after factoring in a JPY 13 billion exchange rate impact. Next, on slide 11, we have the forecast by business segment. Looking at the industrial machinery business, the revised forecast is JPY 400 billion, with segment income of JPY 44.5 billion or 11% of total income. As for the automotive business, we expect 40-41 million vehicles to be produced in the second half of the year, with second half sales of JPY 289.2 billion, an increase of JPY 6.1 billion. We are aiming for full-year sales of JPY 541.5 billion, with a segment income of JPY 0 billion or more than breaking even. Next, slide 13.
I would like to give a brief progress report on the mid-term management plan, MTP2026. First, we will look at the industrial machinery business. In the industrial machinery business, we are aiming to expand sales by JPY 100 billion from JPY 350 billion to JPY 450 billion. To achieve this, first, in the area of electrification, we will take in demand and prepare the capacity to do so as this is a growth area. We are making steady progress in this area as planned. Although we are at a slight standstill in terms of automation and expansion of demand for semiconductors, we will launch new products in the medium to long term. Here, we have announced four new products in the first half of the year.
In the second half of the year, demand will be returning for wind power, especially in China, and this initiative is also on track. In addition, we inaugurated a new facility at Toyama Plant, and we are steadily expanding the line at Shenyang Plant. In the aftermarket business, we are aiming to transform our business model and put CMS, including B&K Vibro, under a firm business structure. In the second half of this year, we are beginning sales of condition monitoring solutions to customers, and we have expectations that this initiative will work out well. Next, on slide 14, I will cover progress on the midterm plan in the automotive business. For automotive bearings, as we have been talking about in various newspapers and other media, our goal is to increase our share of the market for electric vehicles, including e-axle and other wheel bearings.
As of now, we are looking at projects up through 2025, and I think we will have reached roughly 70% of our goal by the end of this fiscal year. We are confident that this goal will be in hand by the beginning to the end of next fiscal year, and we can already see achieving it 100%. With regard to automotive components, especially the steering business, which has now fallen to around JPY 150 billion, we are making good progress in structural reforms, with the first step being to turn this business profitable. We are aiming to achieve steering sales of over JPY 200 billion by 2026, with sales of JPY 290 billion for the entire automotive parts business at an operating income margin of 4%.
We expect to make ground on this from now through the next fiscal year. In general, I would say we are hitting our targets toward securing medium-term growth with profitability. Next, on slide 15, before we close, I will briefly touch on the business environment. Overall, the business environment remains uncertain. There has been a slight decrease in real volume compared to our original forecast, particularly in the automotive industry. Inflation has also been higher than expected, but we will continue to make firm progress in this area, including reflecting cost increases in sales prices and pursuing cost reductions within our operations. Moving forward, I believe that inflationary pressures will continue to increase due to rising energy and labor costs. We face the questions of how do we approach this within the company and how do we communicate with stakeholders and the market?
We will continue to reduce the inventory that has been growing throughout the COVID pandemic, and we will achieve profitability in the steering business as a standalone business, and then expand the business through M&A in the next stage. This concludes my explanation of the fiscal 2022 first half financial results. Thank you.