joint venture we established in the previous term in the bur- geoning market of India. Meager prospects for increased demand for room air con- ditioners are foreseen in fiscal 2002 as new housing starts are expected to stagnate and the increase in demand seen during fiscal 2001 leaves little opportunity for further expan- sion. Nevertheless, we will continue to strive to expand sales by leveraging our priority product URURU & SARARA, a unique product available only from Daikin. The global market for air conditioning equipment saw demand in Europe continuing to expand during fiscal 2001, supported by strong consumer spending and capital invest- ment. However, growth remained stagnant in Asia, where economic conditions have yet to recover. It appears likely to be some time yet before full recovery is achieved in the con- struction sector. Meanwhile, local makers are coming to the fore in the growing Chinese market and Korean manufactur- ers are expanding worldwide with a focus on Europe, factors that are driving up prices and market share competition.  Against this backdrop, Daikin balanced out a decline in weak markets with stepped-up sales in such markets as Europe, Australia, and Hong Kong, where demand was strong, leading to increased sales of all products in its building- use multi-air condition- er lineup. Sales growth was particularly strong in Hong Kong, where we obtained large purchase orders for compact air condi- tioners for large-scale housing complex projects. In the growing Chinese market, our local joint venture for manu- facturing and sales, Shanghai Daikin Air-Conditioning Co., Ltd., steadily increased sales amid severe competition.  In South America, through the purchase of a local compa- ny, we established Daikin Airconditioning Argentina S.A., our first subsidiary in South America.  Sales and manufacturing operations were also com- menced at Daikin Shriram Airconditioning Pvt. Ltd., the FINANCIAL HIGHLIGHTS MANAGEMENT PERSPECTIVE TOPICS REVIEW OF OPERATIONS FINANCIAL SECTION CORPORATE DATA 13 In our core air conditioning operations, although the Japanese market is expected to stabilize, no prospects for substantial growth in the future are foreseen. While the glob- al market is anticipated to continue to expand in the medium term, price competition is expected to grow increasingly intense worldwide as not only Japanese manufacturers but manufacturers from Korea and China expand into the mar- kets of China, the Middle East, Australia, and Europe, particu- larly in the markets for compact air conditioners. In the months and years ahead, Daikin will strive for the top world market share by enhancing competitiveness and securing air conditioning revenues on a Groupwide basis by strengthen- ing its overseas operations and expanding its comprehensive air conditioning business, spanning residential-use air condi- tioners, commercial-use air conditioners, and central air con- ditioning systems in the world’s five major markets. To remain a significant player in the global air conditioning mar- ket, we will not only continue to establish new sales sub- sidiaries of our own through acquisition of other companies but also search for globally based strategic alliance partners. Moreover, we are developing globally complementary busi- ness operations with Matsushita Electric Industrial Co., Ltd., with whom we concluded a strategic alliance agreement in autumn 1999. As the first step in these operations, we began marketing compact air conditioners supplied from Matsushita on an OEM basis in China. The Global Market Overview Outlook