Toyota Industries Report

Year ended March 31, 2018

Message from the
Chairman and President
Firstly, we would like to extend our sincere appreciation foryour continued support of Toyota Industries Corporationand the Toyota Industries Group.
In fiscal 2018 (ended March 31, 2018), the global
economy remained strong overall on the back of an
expansion in consumer spending and exports in Europe
and the United States despite such uncertainties as theslowing economic growth in China and geopolitical risks.
The Japanese economy progressed favorably due mainly
to an increase in exports as well as a recovery in domestic
demand including consumer spending and capital
investment.
In this business environment, Toyota Industries
Corporation and its Group companies (“Toyota Industries”)
undertook efforts to ensure customer trust through a
dedication to quality first as well as to expand sales by
responding flexibly to market trends. As a result, in fiscal
2018 Toyota Industries posted an increase in net sales.
The increase was attributable mainly to higher unit sales ofsuch products as materials handling equipment and car
air-conditioning compressors as well as to newly
consolidating U.S.-based Bastian Solutions LLC andNetherlands-based Vanderlande Industries Holding B.V.,
both of which are engaged in the logistics solutions
business. In terms of overall profit, despite increases in raw
materials costs and labor costs, Toyota Industries recorded
an increase in profit due mainly to vigorous sales efforts,
cost reduction activities throughout the Toyota Industries
Group, the positive impact of exchange rate fluctuations
and changes in retirement benefit plans.
With regard to the future economic outlook, the global
economy is expected to continue to grow. However,uncertainties surrounding the business environment
preclude optimism, as the impact of trade frictions arisingfrom protectionist policies in the United States, the future
trend in financial policies in respective countries andgeopolitical risks require close monitoring.
Under these circumstances, Toyota Industries is further
strengthening its business foundation and addressing key
management issues to raise corporate value by leveraging
the Group’s comprehensive strengths.
As immediate tasks, we will endeavor to bolster ourmanagement platform to respond quickly to drasticchanges in the business environment. Specifically, basedon our quality first approach, we aim to build a stronger
production foundation by maintaining and improving
productivity on a global basis. Furthermore, we will strive tobuild a lean corporate structure by thoroughly eliminating
waste, by pursuing excellence in quality, cost andproduct lead time (the period from production to delivery)

throughout the supply chain and by improving productivity
in administrative functions. At the same time, we intend
to strengthen risk management in order to quickly andappropriately respond to changes in world affairs.
Besides these approaches, we will focus on the timely
launch of appealing products demanded by customers
worldwide and improve earnings power by expanding
the value chain and strengthening solution proposal
capabilities. We will also proactively utilize the Internet ofThings (IoT), artificial intelligence (AI) and other cutting-edge
technologies. Through such measures, we aim to raise thecompetitiveness of our businesses. In addition, we plan
to develop our next growth pillars by promoting strategic
technology and product development while also embracing
open innovation.
To support such business development, we willcontinue our efforts to create an organization andworkplace environment that enables diverse humanresources to fully demonstrate their abilities and develop
personnel who can play active roles in the global arena.
In other areas, Toyota Industries will create a workplaceenvironment that places top priority on safety; thoroughly
enforce compliance, including observance of laws andregulations; and proactively participate in social contribution
activities. By carrying out these initiatives, we aim tomeet the overall trust of society and grow harmoniouslywith society. With regard to protection of the global
environment, we will undertake Group-wide initiatives inseeking to realize “a zero CO2 emissions society in 2050.”
Through these initiatives, we aim for sustainable growthof each business and strive to support industries andsocial foundations around the world and contribute to anenriched lifestyle and comfortable society as described in
Toyota Industries’ Vision 2020 plan.
In closing, we would like to sincerely ask for your continued
understanding and support.
July 2018

Tetsuro Toyoda
Chairman

Akira Onishi
President
Chairman Tetsuro Toyoda (left)/President Akira Onishi (right)

1

Toyota Industries’ Value Creation Processeeds

We aim to contribute to our stakeholders by making the most of the core assets and strengths we have accumulated
to date in promoting our diverse businesses such as materials handling equipment, logistics solutions, vehicle, engine,car air-conditioning compressor, car electronics and textile machinery and by engaging in value creation.
Basic Philosophy[Respect for the Law]
Toyota Industries is determined to comply with the letter and spirit of the law, in Japan and overseas, and to be fair and transparent in all its dealings.
[Respect for Others]
Toyota Industries is respectful of the people, culture, and traditions of each region and country in which it operates. It also works to promote economic
growth and prosperity in those regions and countries.
[Respect for the Natural Environment]
Through its corporate activities, Toyota Industries works to contribute to regional living conditions and social prosperity and also strives to offer products
and services that are clean, safe, and of high quality.
[Respect for Customers]
Toyota Industries conducts intensive product research and forward-looking development activities to create new value for its customers.
[Respect for Employees]
Toyota Industries nurtures the inventiveness and other abilities of its employees. It seeks to create a climate of cooperation, so that employees and theCompany can realize their full potential.

teticipa
at an
h
t
s
vice
ses
d ser busines
n
a
s
ong
duct
g pro ergies amnidi
Prov ging synalever

Value Creation
Core Assets and Strengths
Human Resources• Diverse human resources comprised of more than
60,000 employees• Human resources development that underpins
sustainable growth

Product Development & Manufacturing Capabilities• Product development capabilities that leverage theadvantages of engaging in diverse businesses• Manufacturing capabilities and production engineeringthat support high-quality and stable production• Know-how on in-house development of production
equipment that contributes to the differentiation of
product appeal

We encapsulated the spirit of founder
Sakichi Toyoda in the Toyoda
Precepts, which serve as Toyota
Industries’ corporate creed and uponwhich our Basic Philosophy is based.

Businesssegment

Main products
and services

’n
mers
o
t
s
u
c

by

Development

Production

Sales

After-Sales
Services

Product
development
leveraging synergies
among businesses

Highest-level
SEQCD* that keeps
evolving by sharing
best practices inmanufacturing

Accurately
identifying diverse
customer needs andreflecting them inproduct
development

Finely tuned
after-sales services
that take advantageof extensive networkand technologicalcapabilities

Others ¥60.3 billion
Textile Machinery ¥65.5 billion

Materials
Handling
Equipment

Materials
handling
equipment
For end-users

Logistics
solutions
Offering unique solutions by engaging in everything from development to production, sales and after-sales services¥595.0 billion

VehicleFor Toyota
Motor Corporation

EngineGlobal Network
Toyota Industries’
CSR Activities
Contribution asa corporate citizen• Production bases around the world• Solid supply chain built on mutual cooperation withbusiness partners• Extensive lift truck sales and service networks inrespective regions

Contribution in
non-business areas

Ethical responsibility /ComplianceFairness, transparency,
respect for human rights
and cultures, environmental
conservation

Economic responsibility(business responsibility)

Continuous provision of
products and services
that contribute to society

Foundation ofbusiness activities

FY2018Automobile

Automobile

Contributing to further improving competitiveness of Toyota cars by leveraging our strengths in manufacturing capabilities

Car
air-conditioning
compressor

Net Sales¥2,003.9
billionContributing
to OurStakeholders

Materials Handling Equipment¥1,283.0 billion

For automakers
around the world

Car electronics
Corporate social
responsibility

Contributions throughbusiness activities

Financial Foundation• Sound financial foundation• High rating bestowed by rating agencies(fund procurement capability)

Providing key components of various products for automakers around the world by leveraging our technological capabilities

TextileMachinery

TextilemachineryFor end-users

Based on long-accumulated experiences, committing ourselves to cutting-edge technologies and quality to provide products
and services to customers around the world

Society (company’s raison d’etre)* S: Safety, E: Environment, Q: Quality, C: Cost, D: Delivery[Main Scope of CSR Activities]• Adhering to a quality first approach, we ensure monozukuri (manufacturing) that quickly responds to the diverse,
ever-changing needs of customers. (Relationship with Our Customers)• We encourage open procurement and seek co-existence and co-prosperity with our business partners (suppliers)
based on mutual trust. (Relationship with Our Business Partners)• We strive for timely and appropriate information disclosure while promoting good communications with shareholders
and investors. (Relationship with Our Shareholders and Investors)• We aim to create safe and secure workplaces where each and every associate can exercise their diverse potentials
and play active roles. (Relationship with Our Associates)• We fulfill our role as a good corporate citizen and actively undertake social contribution activities.
(Relationship with Our Local Communities)

2

Toyota Industries Report 2018

Our ContinuousCommitment

45

CONTENTS
Message from the Chairman and President

Inside cover–1

Toyota Industries’ Value Creation Process

2, 4–5
3

Contents
Company Introduction

Financial Section / Corporate Information
Financial Section
Consolidated Statements of Financial Position

76–77
78

Consolidated Statements of Profit or Loss

Outline of Businesses

6–7

Consolidated Statements of Comprehensive Income

Consolidated Eleven-Year Summary

8–9

Consolidated Statements of Changes in Equity

80–81

Consolidated Statements of Cash Flows

82–83

Consolidated Financial and Non-Financial Highlights

10–12Strategies and Businesses
Top Message

Corporate Information
14–21

Special Features
1 Augmenting the Logistics Solutions Business in

Response to Changing Customer Needs

2 Contributing to a Zero CO2 Emissions Society

through Environmental Technologies

79

22–25

Board of Directors, Audit & Supervisory Board
Members and Managing Officers

84–85

Major Production Bases

86

Investor Information

87

26–29

Business Activities
Materials Handling Equipment

30–34

Automobile

35–40

Textile Machinery

41

Promotion of ESG Initiatives
Corporate Governance

43–48

Corporate Governance Structure / Internal Control System /Compliance / Management of Confidential Information / Risk
Management
Relationship with Stakeholders
Relationship with Our Customers

49–50

Relationship with Our Business Partners

51

Relationship with Our Shareholders and Investors

52

Relationship with Our Associates

53–56

Relationship with Our Local Communities

57–58

Environmental Initiatives
Vision for Environmental Activities

59

Structure to Implement Environmental Management

60

Environmental Impact Flow and Environmental
Accounting

61

Sixth Environmental Action Plan

62–63

Establishing a Low-Carbon Emission Society

64–65

Establishing a Recycling-Based Society

66–67

Reducing Environmental Risk and Establishinga Society in Harmony with Nature

68–69

Environmental Management

70–73

Third Party Assurance of Environmental
Performance Data

Editorial policy
In aiming to realize a deeper understanding of the Toyota Industries
Group among a broad spectrum of stakeholders, the Annual Report
and Social and Environmental Report have been combined into the
Toyota Industries Report from the fiscal year ended March 31, 2008.
In addition to the Toyota Industries Group’s management policies,
the report provides easy-to-understand information regarding its
business, corporate governance, social and environmental activities
over the past year as well as its future direction.
Period covered by the report
This report focuses on activities carried out in fiscal 2018 (April 1,2017 to March 31, 2018), but also includes some information
outside this period.
Organizations covered in the report
Toyota Industries Corporation and its consolidated subsidiaries
Reference guidelines• Global Reporting Initiative (GRI) Standard• ISO 26000• Japan’s Ministry of the Environment Environmental Accounting
Guidelines (2005 Version)• Japan’s Ministry of the Environment Environmental Reporting
Guidelines (2012 Version)

74

Cautionary Statement with Respect to Forward-Looking Statements
This report contains projections and other forward-looking statements that involve risks and uncertainties. The use of the words “expect,” “anticipate,” “estimate,” “forecast,” “plan”
and similar expressions is intended to identify such forward-looking statements. Projections and forward-looking statements are based on the current expectations and estimatesof the Toyota Industries Group regarding its plans, outlook, strategies and results for the future. All such projections and forward-looking statements are based on management’s
assumptions and beliefs derived from the information available at the time of producing this report and are not guarantees of future performance. Toyota Industries undertakes noobligation to publicly update or revise any forward-looking statements in this report, whether as a result of new information, future events or otherwise. Therefore, it is advised that you
should not rely solely upon these projections and forward-looking statements in making your investment decisions. You should also be aware that certain risks and uncertainties could
cause the actual results of Toyota Industries to differ materially from any projections or forward-looking statements discussed in this report. These risks and uncertainties include,
but are not limited to, the following: (1) reliance on certain customers, (2) product development capabilities, (3) intellectual property rights, (4) product defects, (5) price competition,(6) reliance on suppliers of raw materials and components, (7) environmental regulations, (8) success or failure of strategic alliances with other companies, (9) exchange rate
fluctuations, (10) share price fluctuations, (11) effects of disasters, power blackouts and other incidents, (12) latent risks associated with international activities and (13) retirement
benefit liabilities.
The fiscal year ended March 31, 2018 is referred to as fiscal 2018 and other fiscal years are referred to in a corresponding manner.

3Outline of Businesses
Materials Handling Equipment
The smooth flow of goods links the world and enriches the lives of people
and society. Toyota Industries meets diverse customer needs in logistics
by providing a diverse range of materials handling equipment such as lift
trucks and offering advanced and efficient logistics solutions. Throughthese businesses, Toyota Industries helps customers the world over.
Internal-combustion lift truck

Reach-type electric lift truck

Low lift truck

Simple AGV(automatic guided vehicle)

Automated lift truck

Net Sales

Shuttle-type automatedstorage and retrieval system

Sorter/conveyer

Operating Profit(¥ Billion)(¥ Billion)

1,500

120

1,200

100
60

600

Airport baggage
handling system

Picking system* Survey by Toyota Industries Corporation

Aerial work platform

64.0%

40

300
0

Percentage of Net Sales

80

900
Electric lift truck

Automated storage
and retrieval system

20(FY) 1617180(FY) 16

17

18

Strategies andBusinesses

Automobile

VehicleRAV4 (hybrid model)

Vitz (Yaris outside Japan)(hybrid model)

Diesel engine

Gasoline engine

Net Sales

With its strengths as an industry leader in safety, the environment, quality, cost and delivery, the Vehicle Business produces compact to midsize automobiles.
In addition to diesel engines produced under a comprehensive structure ranging from planning and development to production, we also produce gasoline engines.

Car Air-Conditioning
Compressor

Toyota Industries’ car air-conditioning compressors are highly acclaimed in terms of their reliability at high operating speeds and quiet operation in addition
to such excellent environmental performance features as compactness, light weight and fuel efficiency. The Car Air-Conditioning Compressor Business
captures the world-leading market share in unit sales*.

Car Electronics

The Car Electronics Business develops and produces electronics products primarily for electric-powered vehicles such as hybrid vehicles.

Variable-displacement
type compressor

Fixed-displacement
type compressor

Operating Profit

Percentage of Net Sales(¥ Billion)(¥ Billion)

600

40
30

400

29.7%

20
Oxygen-supplying air
compressor for fuelcell vehicles

Hydrogen circulation
pump for fuel cell vehicles

DC-DC converter

2000* Survey by Toyota Industries Corporation

10(FY) 1617180(FY) 16

17

18

Textile Machinery
A soft texture caressing your skin and gently enveloping your body. Toyota Industries produces spinning machinery that spins
high-quality yarns and high-speed, energy-saving weaving machinery that produces fabrics. We deliver textile machinery tocustomers around the world that incorporates advanced technologies and is imbued with our dedication to quality.
The Textile Machinery Division, our original business, began with theinvention of the automatic loom by founder Sakichi Toyoda. Presently, we
undertake fully integrated operations from development and production
to sales and after-sales services for spinning machines that spin twisted
fiber bundles into yarn and weaving machines that weave spun yarn into
fabrics. Our textile machinery is supplied to markets worldwide. Thanks
to superb reliability and high productivity, our air-jet looms have won
extensive acclaim from customers around the globe, capturing theworld-leading market share in terms of unit sales*.
* Survey by Toyota Industries Corporation

6

Toyota Industries Report 2018

Ring spinning frame

Roving frame

ComberNet Sales

JAT810 air-jet loom

Cotton classing instrument

Yarn testing instrument

Financial Section /Corporate Information

EngineElectric compressor

Promotion of
ESG Initiatives

Get behind the wheel with a solid, reassuring feel and enjoy comfortable
driving. Besides vehicle assembly, Toyota Industries produces various
components such as engines and compressors, the latter of which comprises
the heart of car air conditioners to keep the vehicle interior comfortable, as wellas car electronics. From vehicle assembly to parts production, the Automobile
Segment engages in a wide range of car-related businesses, leveraging
synergies among its business divisions in development and production.

Company Introduction

The Materials Handling Equipment Segment develops, produces, sells andprovides services for a broad range of products, from industrial vehicles centeredaround a full lineup of lift trucks (0.5- to 43-ton capacities) to materials handlingsystems. Lift trucks, which capture the top global market share*, are delivered tocustomers around the world under the TOYOTA, BT, RAYMOND and CESAB
brands. Toyota Industries also strives to provide finely tuned after-sales services
so that customers can always use our products in the best possible condition.
We have also enhanced our business domain to include the provision of suchcomponents as lift truck attachments and motors as well as sales financing. In
the area of logistics solutions, Toyota Industries works closely with subsidiaries
Bastian Solutions LLC and Vanderlande Industries Holding B.V. by leveraging
each company’s strengths to pursue business expansion on a global scale.

Operating Profit(¥ Billion)(¥ Billion)

80

8

60

6

40

4

20

2

0

(FY) 1617180(FY) 16

Percentage of Net Sales
3.3%

17

18

7

Consolidated
Eleven-Year Summary

Consolidated Eleven-Year Summary
Toyota Industries Corporation
Years ended March 31

Millions of yen
International Financial ReportingStandards (IFRS)Generally Accepted Accounting Principles in Japan (JGAAP)

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

¥2,003,973¥1,675,148¥1,696,856¥2,166,661¥2,007,856¥1,615,244¥1,543,352¥1,479,839¥1,377,769¥1,584,252¥2,000,536

Operating profit (loss)

147,445

127,345

137,026

117,574

107,691

77,09870,092

68,79822,002(6,621)

96,853

Profit before income taxes*1

209,827

181,986

191,386

170,827

138,133

86,83680,86673,911

31,756

14,343

126,488

For the YearNet sales

Profit (loss)*2

168,180¥ 115,458

131,398¥

77,393¥

194,270

115,263

91,70575,418¥ 126,395¥ 109,479

53,119¥89,45958,594¥58,40447,205¥38,254¥(26,273)(32,767)

80,46026,963¥ 104,495¥ 104,205

Depreciation*3

77,73873,25378,25370,78264,153

57,954

59,83062,372

73,23887,21983,744

Research and development expenses

77,647

69,52465,43247,78546,32639,05732,07027,78826,826

33,64636,750Per share of common stock (yen):
Earnings (loss) per share*2, *4
Basic
Diluted¥541.67¥420.78¥618.34¥367.06¥292.76¥170.36¥188.02¥151.51¥(84.33)¥(105.16)¥257.50366.99292.57170.35188.02151.51(84.33)(105.16)257.438,223.82

7,125.37

6,678.80

7,500.16

5,640.08

4,719.66

3,662.26

3,300.17

3,390.02

2,987.16

4,483.32

150.00125.00120.00110.00

85.00

55.00

50.00

50.00

30.00

40.00

60.00

Total assets¥5,258,500¥4,558,212¥4,317,282¥4,650,896¥3,799,010¥3,243,779¥2,656,984¥2,481,452¥2,589,246¥2,327,432¥2,965,585

Share of equity attributable to owners of the parent

2,553,391

2,240,293

2,098,658

2,425,929

1,829,326

1,524,933

1,197,841

1,075,939

1,104,929

977,670

1,453,996

Capital stock

80,46280,46280,46280,46280,46280,46280,46280,46280,46280,46280,462

Number of shares outstanding (excluding treasury stock) (thousands)

310,487

310,489314,226

314,155

313,730

312,207311,687

311,564

311,570

311,577

311,589¥ 268,567¥ 239,094¥ 248,049¥ 182,191¥ 155,059¥ 151,299¥ 101,718¥ 153,661¥ 203,452

65,768¥ 188,805

Net cash used in investing activities(340,324)(86,925)(532,238)(160,769)(118,483)(274,210)(9,403)(187,574)(36,855)(114,217)(138,789)

Net cash provided by (used in) financing activities

153,303789

124,495(8,918)

6,183

7,050

10,279(85,728)(38,230)

120,971(33,992)

Cash and cash equivalents at end of year

323,830

243,685

92,399248,706

226,406

179,359

296,811

195,566

317,590

188,011

121,284

Operating profit ratio (%)

7.4

7.6

8.1

5.4

5.4

4.8

4.5

4.6

1.6

(0.4)

4.8

EBITDA (millions of yen)*5¥ 313,055¥ 276,193¥ 279,444¥ 248,854¥ 216,175¥ 155,234¥ 161,876¥ 150,481

71,608¥ 222,125

Return on equity (ROE) (%)*6

7.0

6.1

8.7

5.6

5.7

4.1

5.4

4.5

(2.6)

(2.8)

5.1

Return on assets (ROA) (%)*7

4.3

2.7

2.6

1.8

2.3

1.9

(1.1)

(1.2)

2.5

Share of equity attributable to owners of the parent
Cash dividends per share
At year-end

Cash flows
Net cash provided by operating activities¥

Indices¥

90,521

¥

3.4

3.0

D/E ratio (%)*8

45.7

43.6

43.0

32.0

39.9

45.4

53.8

56.8

60.3

68.6

37.4

Ratio of share of equity attributable to owners of the parent*9

48.6

49.1

48.6

50.7

46.6

45.4

43.0

41.4

40.8

40.0

47.1

61,152

52,62351,45852,52349,33347,41243,51640,82538,90339,91639,528

Number of employees (persons)Financial Section /Corporate Information

618.33

Promotion of
ESG Initiatives

420.78Strategies andBusinesses

541.67Company Introduction

Investments in tangible assets*3*1: The figures prior to fiscal 2016 are ordinary income under JGAAP.
*2: Profit (loss) attributable to owners of the parent*3: Investments in tangible assets and depreciation apply to property, plant and equipment. They do not include materials handling equipment leased
under operating leases.
*4: Earnings (loss) per share is computed on the average number of shares for each year.
*5: Profit before income taxes + Interest expenses – Interest and dividends income + Depreciation and amortization (including assets other than property,
plant and equipment)*6: Profit (loss) attributable to owners of the parent / Average share of equity attributable to owners of the parent at the beginning and the end of the
fiscal year
*7: Profit (loss) attributable to owners of the parent / Average total assets at the beginning and the end of the fiscal year
*8: Interest-bearing debt / (Share of equity attributable to owners of the parent – Subscription rights to shares)*9: (Share of equity attributable to owners of the parent – Subscription rights to shares) / Total assets
Note: Toyota Industries has adopted IFRS beginning from the end of fiscal 2017. The figures in fiscal 2016 have been reclassified in accordance with IFRS.

8

Toyota Industries Report 20189

Consolidated Financial and
Non-Financial Highlights

Consolidated Financial and Non-Financial Highlights
Financial Information
Net Sales¥

Operating Profit

2,003.9 billion

Depreciation¥

Investments in Tangible Assets

147.4 billion¥¥

77.6 billion¥(FY2018)

Consolidated Number of Employees

Ratio of Non-Japanese Employees

Consolidated Subsidiaries

61,152 persons

65.2 %

254 companies

Ratio of New Female Graduates in
Administrative Positions (Non-Consolidated)

Ratio of New Female Graduates inEngineering Positions (Non-Consolidated)

Ratio of Employees with Disabilities(Non-Consolidated)

2,553.3 billion

41.7 %

15.7 %

2.37 %

Profit before Income Taxes

Consolidated Number of Employees/Ratio of
Non-Japanese Employees

115.4 billion

Share of Equity Attributable to Owners of
the Parent

Research and Development Expenses

77.7 billion

Non-Financial Information (CSR)

Net Sales

Operating Profit/Operating Profit Ratio

Consolidated Subsidiaries

Participants of Japan’s Subcontracting Law Seminar(¥ Billion)(¥ Billion)(%)(¥ Billion)(Persons)(%)(Companies)(Persons)

2,500

150

10
8
6

250

70,000

70

300

1,200

2,003.9

2,000
1,696.8

8.1

7.6

7.4

137.0

120

147.4

127.3

1,675.1

200

90

150

1,000

60

100

191.3

181.9

60.1

60.4
61,15250,00040,00051,45860
50

52,623

0
(FY)

50

30

2017

2018

10,000

0

0
2016

2016

(FY)

2017

Operating Profit

2018

250
200

214

1,180

1,000

207

978

800

150

600

100

400

50

200

30,00020,000

500

254

1,187

Strategies andBusinesses

1,500

60,000

209.8

65.2

0

0
2016

(FY)

2017

2018

(FY)

2016

Operating Profit Ratio (right)

2017

2018

(FY)

0
2016

2017

2018

(FY)

2016

2017

2018

Investments in Tangible Assets

Depreciation

Frequency Rate of Lost Workday Injuries(Non-Consolidated)

Participants of Age-Based Health Education(Non-Consolidated)

Persons Having Completed Guidance Program on
Prevention of Lifestyle Diseases (Non-Consolidated)(¥ Billion)(¥ Billion)(¥ Billion)(%)(Persons)(Persons)

200

120

80

0.10

2,500

168.1

115.4

78.2

73.2

77.7

2,157

100

150

0.08

60
131.3

80

77.3

600
0.04

50

20

0
(FY)

0
2016

2017

2018

(FY)

2017

2018

(FY)

2016

2017

2018

(FY)

0.00
2016

200
0

0
2017

2018

(FY)

556

400

500

0

0
2016

1,000

0.03

0.02

20

717

1,500

40

40

1,056

1,000
800

0.06

0.06

60

2,142

2,000

2016

2017

2018

(FY)

2016

2017

2018

Financial Section /Corporate Information

100

75.4

1,200

2,445

Promotion of
ESG Initiatives

Consolidated Number of Employees
Ratio of Non-Japanese Employees (right)

Profit*194.2

Company Introduction¥(FY2018)* The figures for profit attributable to owners of the parent are presented.

Research and Development Expenses

Cash Dividends Per Share/Dividend Payout Ratio

Total Assets/Share of Equity Attributable to Owners of the Parent/
Ratio of Share of Equity Attributable to Owners of the Parent

Number of New Graduates in Administrative Positions/
Ratio of Females (Both Non-Consolidated)

Number of New Graduates in Engineering Positions/
Ratio of Females (Both Non-Consolidated)

Ratio of Employees with Disabilities(Non-Consolidated)(¥ Billion)

(¥)

(%)

(¥ Billion)(%)(Persons)(%)(Persons)

(%)

(%)

35

6,000

60

40

50

150

20

2.5

80

77.6
65.4

150

150

69.5
120

60

120

125
29.7

90

30

27.7

25

4,317.2

49.1
4,558.2

50
48.6

20

30

40
20

2016

2017

2018

(FY)

19.4

40.7

41.7
30

27

26

2,098.6

2,240.2

2016

2017

2,553.3

10

0
2016

2017

2018
Dividend Payout Ratio (right)

(FY)

120

Total Assets
Share of Equity Attributable to Owners of the Parent
Ratio of Share of Equity Attributable to Owners of the Parent (right)

(FY)

14.3

90

15.7

15

2.0

10

1.5

5

1.0

2016

2017

2018

Number of New Graduates in Administrative Positions
Ratio of Females (right)

(FY)

2.24

2.27

2016

2017

2.37

121

8.7

0.5

0

0
2018

133

30

1,000

Cash Dividends Per ShareToyota Industries Report 2018

34.6

60
2,000

0

0

30

40

20

60

10

4,000

48.6

3,000

40

(FY)

5,000

138

36

5,258.5

0
2016

2017

2018

(FY)

2018

Number of New Graduates in Engineering Positions
Ratio of Females (right)

11

Consolidated Financial and Non-Financial Highlights

Non-Financial Information (Environment)(FY2018)

Energy Consumption (Consolidated)

CO2 Emissions (Consolidated)

Water Consumption (Consolidated)

16,939 TJ

913,123 t-CO

4,873 km

Discharge of Treated Wastewater(Consolidated)

Raw Material Consumption (Consolidated)

Waste Generation (Consolidated)

2,407 km790,022 t

122,521 t2

3

3Strategies
andBusinesses

Energy Consumption (Consolidated)

CO2 Emissions (Consolidated)

Water Consumption (Consolidated)(TJ)(t-CO2)(km3)

20,0001,000,000
16,52016,93915,00011,403

909,436

939,753

5,000

800,000

4,000

600,000

3,000

400,000

2,000

200,000

1,000

4,873

4,661

913,123

Steadily Carry Out Growth Strategies
by Leveraging the Strengths ofEach Business Field

4,136

10,000

5,000

0
(FY)

0

0
2016

2017

2018

(FY)

2016

2017

2018

(FY)

2017

2018

Discharge of Treated Wastewater(Consolidated)

Raw Material Consumption (Consolidated)

Waste Generation (Consolidated)

(km3)

(t)

(t)

2,500

2,370

2,407

800,000

745,407

2,169
2,000

790,022150,000

712,293

90,000400,000

79,68887,91760,0001,000
200,000

500

30,00000(FY)122,521120,000

600,000

1,500

2016

2017

2018

(FY)

0
2016

2017

2018

(FY)

2016

2017

PRTR*1 Law Designated Substances(Japan Consolidated)

Emissions/Transfer of PRTR Law DesignatedSubstances (Japan Consolidated)

VOC*2 Emissions (Consolidated)

(t)

(t)

(t)

2,000

600

1,500

500

1,579

1,500

571
503
439

1,447

1,370

400

1,000

1,460

Top Message

P14−21

Special Features

P22−291,453

1 Augmenting the Logistics Solutions Business in Response to Changing Customer Needs
2 Contributing to a Zero CO2 Emissions Society through Environmental Technologies

1,200
900

Business Activities

P30−41

300

100
0

0

0
2016

2017

2018

*1: Short for Pollutant Release and Transfer Register, the PRTR law is ascheme whereby businesses measure the release and transfer of PRTR
designated pollutants and report their performance to the government.
The government then compiles this data and releases it to the public.

Toyota Industries Report 2018

(FY)

Materials Handling Equipment / Automobile / Textile Machinery

600
500

(FY)

1,489

2018

300
200

12

2016

2016

2017

2018

(FY)

2016

2017

2018

*2: Short for Volatile Organic Compounds

13Top Message

Top Message

Capturing Changes in the Business
Environment and Vigorously Promoting
Initiatives for Sustainable Growthand other Toyota Group companies. Such a capital connection is one
means to ensure even closer collaboration among Group companies.
This is essential in prevailing over ever-intensifying competition caused by
the accelerated trend toward electrification and increasing use of Internetof Things (IoT) technology in the automobile industry. Financial stability
facilitates investments for future growth.
*1: Survey by Toyota Industries Corporation

Akira Onishi President

Here, I would like to highlight our efforts to attain sustainable growth in
the two fields that represent our core businesses, specifically materials
handling equipment and car air-conditioning compressors.

1) Materials Handling Equipment
The Materials Handling Equipment Segment mainly consists of the Lift
Truck Business, in which we already enjoy the global top share*2, and the
Logistics Solutions Business, which we have been augmenting in recent
years. In the Lift Truck Business, we seek to expand our value chain thatencompasses after-sales services, the supply of spare parts and sales
financing operations, in addition to developing new internal-combustionand electric-powered lift trucks.
*2: Survey by Toyota Industries Corporation

Management Based on Diverse Business Portfolio andReadiness to Adapt to Change

Toyota Industries Report 2018

Toyota Industries’ Global
Top Share*1 Products

Logistics Solutions Business

Value chain
Products

Internal-combustion lift truck

Operates mainly in North
America and has an excellent
system building capability
Warehouse truck

Lift truck
Sales
financing
operations

Telematics

Electric lift truck

After-sales service

Fuel cell lift truck

Attachment

Acquiring
dealers

Component

Car air-conditioning compressor

Air-jet loom

Designing
distribution centers

Operates mainly in Europe
as well as globally and has
a strength in starting up
large-scale projects

Sells automated storage andretrieval systems, automatic
guided vehicles (AGVs), etc.,
mainly in Japan

Automated baggage
storage and retrieval
system for airports

Financial Section /Corporate Information

14

Lift Truck Business

Promotion of
ESG Initiatives

In addition to our founding business of textile machinery, we engage indiverse businesses ranging from materials handling equipment to car
air-conditioning compressors, vehicles and engines. Automobile-related
businesses and non-automobile businesses centered on materials
handling equipment are the two major pillars of our business, and thisreflects one of our characteristics of not relying exclusively on one specificbusiness domain.
We boast the world’s No. 1 market share*1 for lift trucks, car airconditioning compressors and air-jet looms. Having a top share product ineach business segment is a strength of Toyota Industries.
Meanwhile, we have been reinforcing our business related to internalcombustion vehicles. We expect them to remain mainstream for some timein the future primarily in the growing emerging country markets. We also
recognize the trend toward vehicle electrification as a driver for our growthand have been steadily preparing ourselves for possible future changes in
the market.
These efforts have led to the dispersion of management risk andcontributed to our stable business performance. We also believe that we
can reinforce business in each segment by promoting horizontal alignment
among business divisions in such areas as development and production
and by sharing the strengths of each.
That we are able to collaborate with Toyota Group companies for many
years and encourage positive competition in safety, the environment,
quality, cost and delivery (SEQCD) provides us with a tremendous
advantage.
Also, we hold a number of stocks in Toyota Motor Corporation (TMC)

Strategies andBusinesses

Our Characteristics and Strengths

Business Development Scenario for Future Growth
Company Introduction

Toyota Industries was founded in 1926 to manufacture and sell theType G automatic loom invented by founder Sakichi Toyoda. Considered as
the origin of the Toyota Group, we have evolved and attained growth throughpositive competition with other Toyota Group companies. In this section,
President Akira Onishi presents Toyota Industries’ characteristics andstrengths that have resulted from such evolution and growth as well asa scenario we created for future growth.

Unit-type automatedstorage and retrieval
system

In the Logistics Solutions Business, we are responding to the growing
need to handle a large number of small-lot parcels in warehouses
following the recent expansion of the e-commerce market. Throughcollaboration with U.S.-based Bastian Solutions LLC and Netherlandsbased Vanderlande Industries Holding B.V., which became our subsidiaries
in fiscal 2018, Toyota Industries is augmenting business globally while

15

Top Message

Next, I would like to provide an overview of our future growthscenario for each of the three sales categories in the Materials
Handling Equipment Segment.

Sales Breakdown of the Materials Handling
Equipment Segment
Logistics solutions
Approx. 20%¥1,283.0 billion

After-sales services,supply of spare parts, etc.

Value chain in the Lift Truck Business Approx. 40%(Thousand units)
1,500*4: Survey by Toyota Industries Corporationn Global Compressor Market*5 and Unit Sales ofToyota Industries(Million units)
80

Electric
type

60

Internalcombustion
type

Compressor market
40

Electric
type

20

Internalcombustion
type

Unit sales of Toyota Industries

2) Car Air-Conditioning Compressor

1,000

500

0
(Year) 08 09 10 11 12 13 14 15 16 17 18*3: Survey by Toyota Industries Corporation

20n Unit Sales of Toyota Industries(Thousand units)
300

200

Europe100

North
AmericaJapan0(FY) 09 10 11 12 13 14 15 16 17 18 19

21

Baggage handling system utilizing autonomous vehicle
technology for airports

16

17

18

19

2X

Financial Section /Corporate Information

Others0(FY) 15

An expansion of the global automobile market and an increase in the*5: Survey by Toyota Industries Corporation
number of cars equipped with air conditioners are expected to contributeto the sustainable growth of the car air-conditioning compressor
Channeling Our Unique,market. Among various types of compressors, compressors for internalAccumulated Resources into Both Types
combustion vehicles will maintain a high level of demand, while the electric
Human resources
Technologies/know-how
compressor market is expected to expand over the medium to long term.
In response to the recent, accelerated trend toward electrification,
Facilities created in-house
Funds
the compressor industry is increasingly concentrating resources on theelectric type. Toyota Industries, on the other hand, makes sure to channel
Internal-combustion typeits unique, accumulated resources into both compressors for internalFocus on this type as amainstream product for the
Industry as a
combustion vehicles, which are expected to remain mainstream for thetime being
whole focusing
time being, and also electric compressors, for which demand is anticipatedAim for a 50% market share byon electric typestrengthening our alreadyto grow in the future. We will utilize our extensive resources encompassing
superior product appeal
human resources, technologies and know-how and work steadily todifferentiate ourselves in both fields.
Electric type
To achieve even greater competitiveness, we have been undertaking
Steadily respond to anticipated demand growth
Leverage our market share, which is higher than internalthe following initiatives in terms of development and production. As
combustion type, to gain from an expansion of the electricfor development, we conduct a range of rigorous evaluation tests for
powered vehicle market
compressors in realistic vehicle environments to satisfy stringent vehicle
conformance requirements ofautomakers. Through thesetests, we offer a high level of
performance, including excellent
fuel efficiency.
With automakers repeating aprocess of trial and error for thepromotion of vehicle electrification,
it is increasingly important for us,
as a component manufacturer, torespond to their varying requests.
Vehicle conformance test based on our know-how of conducting both simulations and experimental evaluations

Promotion of
ESG Initiativesn Logistics Solutions
In the category of logistics solutions, we have been promoting regionaland functional collaboration among Bastian, Vanderlande and Toyota
Industries based on the strengths of each. Vanderlande, positioned at then Global Lift Truck Market*3

Toyota L&F Customer Center Osaka

Strategies andBusinessesn Value Chain-Related
As for value chain-related initiatives, our efforts are divided into three fields:
services, sales financing operations and components. In the services field,
in order to continue generating profits we will utilize our networks, which
we have strengthened by acquiring dealers along with other measures, andprovide services during the entire product lifecycle through maintenanceservices and the supply of spare parts. At the same time, we will augment
proposals for logistics improvement by using telematics to ensure efficient
fleet operations, reduce accidents, encourage fuel-efficient practices andpromote automation. In the field of sales financing operations, we alreadyhave in place a system to undertake these operations in-house in the
United States and Europe. In the future, we will extend our global reach tocapture customers’ needs for equipment leasing and rentals. In terms ofcomponents, we will enhance the product appeal of our engines, motors
and controllers, which are manufactured in-house, with the aim of further
differentiating the performance of both of our internal-combustion lift trucks
and electric lift trucks. Overall, we will continue to make the most of our
now reinforced value chain.

Toyota Industries Report 2018

FY2018

Attachments,
components,
sales financing operations
and sales through
Aichi Corporation, etc.

n Lift Truck Market
We expect continued, moderate growth in the lift truck market
underpinned by steady growth in the world economy and an expected
increase in global logistics volume spurred mainly by new demand in
the expanding e-commerce market. Against this backdrop, we plan toincrease sales by developing a broad range of high-quality products thatsatisfy diverse customer needs, undertaking sales activities based on ourwell-developed distribution networks and promoting solution-based sales
with a focus on resolving customers’ logistics issues.

16

Sales of lift trucks andother materials handlingequipment Approx. 40%

core of such collaboration, has constantly been attaining steady growthin business performance. In its warehouse-related business, it received
an order from a Dutch fresh food supplier for a solution that combines
a shuttle system and case picking system to enable highly efficient
warehouse logistics. In the area of baggage handling systems for airports,
in which Vanderlande boasts the global top share*4, Rotterdam The Hague
Airport will introduce a system utilizing the company’s autonomous vehicle
technology for the first time in the world. It is an innovative baggage
conveying system that not only enables efficient baggage handling but also
flexibly accommodates layout changes and system expansions.
In Japan, we established a new customer center in June 2018 in
Suita City, Osaka. The center is capable of making proposals on various
combinations of materials handling equipment and solutions to resolve
different logistics issues of customers. Utilizing the center as our third
logistics showroom following the ones in Chiba and Aichi prefectures, wewill enhance our customer response mainly in western Japan.
Through these initiatives, we will facilitate collaboration between the Lift
Truck Business and Logistics Solutions Business in the Materials Handling
Equipment Segment with an aim to achieve growth over the medium term.

Company Introduction

mutually leveraging the strengths of each.
We believe that we have established a structure necessary
to attain future growth in each of these businesses. We are
now at the stage to yield positive results by harnessing thestrengths of this structure.
Within the Materials Handling Equipment Segment, salesof materials handling equipment, mainly lift trucks, accountfor about 40% of total sales, while value chain-related sales,
including those from lift truck after-sales services, the supply of
spare parts and sales financing operations account for about
40%. The last 20% is derived from logistics solutions sales.
Since this segment does not rely solely on sales of materials
handling equipment, our business performance is relatively
immune to short-term changes in the lift truck market.

17

Top Message

Toyota Industries will continue to seek more compact and lighter
compressors with higher fuel efficiency. We will also strive to attain a more
superior performance in terms of quieter operation and lower vibration,
which will become more important in vehicle electrification.
While making these efforts to pursue greater product appeal in
the existing domains, we will also concentrate on developing new
business areas.
For example, we expect that the number of heat-emitting components
used within a vehicle, such as electronic devices and batteries, will
increase as vehicle electrification progresses and automated driving
becomes more widespread. In order for these components to function
at peak capacity, it is critical to keep the heat down. To respond to thisneed, we plan to conduct development with a focus on utilizing the cooling
function of a compressor not only for vehicle interior air conditioning but
also for key components.
Besides this cooling functionality, we have applied compression
technology used in compressors to develop an oxygen-supplying air
compressor, which is the “heart” of a fuel cell vehicle (FCV), and hydrogen
circulation pump. These components have been adopted in TMC’s
MIRAI FCV. We intend to further increase the appeal of our products andcontribute to the realization of a hydrogen-based society.

Variable-displacement type

Characteristics

Strengths &sales expansion
policyStandard type with aconsistent cooling capability

Add greater price competitivenessto the existing strength ofhigh reliability and supply products
mainly to emerging countries

Toyota Industries Report 2018

Driven by an internal motor

Save fuel by automaticallyadjusting the cooling capability

Keep air conditioning at
a comfortable level at all times,
including start-stop operation of
HVs and PHVs

Expand sales mainly in developed
countries by taking advantage ofthe excellent fuel efficiency andglobally stable productivity

Utilize machinery and electronics
technologies and consistent
manufacturing capabilities tocapture opportunities in the
expanding electric-powered vehicle
market*6: HV: Hybrid vehicle; PHV: Plug-in hybrid vehicle; EV: Electric vehicle; FCV: Fuel cell vehicle

18

Electric type

JAT810 air-jet loom

Financial Section /Corporate Information

Driven by the power of the engine

Electric-powered vehicles(HV, PHV, EV & FCV)*6

Textile machinery is our original business. I would like topresent a case in China, one of our important markets,
where orders for our mainstay air-jet looms are increasing
following the enforcement of more stringent environmental
regulations in the country.
The Wujiang District in the city of Suzhou, Jiangsu
Province, is the largest production center of synthetic
fiber textiles in China. There, more stringent environmental
regulations were adopted in 2017, mandating factories
operating water-jet looms that use water to insert weft yarn to weave
fabrics to conduct appropriate wastewater treatment. This has prompted
replacement demand for air-jet looms, which do not use water, andprovided us with an opportunity to increase orders by promoting sales of
our air-jet looms, renowned for their excellent energy saving performance,in the Chinese market.
As seen from this example, we believe there may be additional
opportunities to expand sales in the Chinese market of our materials
handling equipment and car air-conditioning compressors, both boastinghigh environmental performance, depending on how China tightens its
regulations in the future.

Promotion of
ESG Initiatives

Fixed-displacement type

Strategies andBusinesses

3) Textile Machinery

Characteristics and Strengths by Compressor TypeInternal-combustion vehicles

Company Introduction

As the holder of the top
market share, we will seek
even closer collaboration
with automakers worldwide
to create a firm platform forthe development of electriccompressors.
In terms of production,
more and more stringent fuelefficiency standards adopted
every year have necessitatedan increasingly complex
compressor structure. As
such, manufacturing capabilities that ensure stable mass production ofhigh-quality products at any production base have become more important
than ever. In producing compressors for internal-combustion vehicles andelectric compressors, machining technology plays a vital role. As such,
we develop specialized facilities and cutting tools in-house to ensurehigh-precision and high-speed machining. This is the foundation of ourcompressors’ high levels of performance and reliability.
We also use IoT technology to link our mother plants in Japan withproduction bases outside Japan and carry out detailed data managementin each work process as an effort to further ensure stable quality on a
global basis.

Accurately Responding to Changing Customer Needs
In recent years, technological trends, customer needs and other market
circumstances have changed dramatically around the world. The
automobile industry, in particular, is said to have entered a period ofdrastic change that occurs only once in 100 years. The need to reduce
CO2 emissions has accelerated the electrification of vehicles, and various
types of electric-powered vehicles ranging from hybrid vehicles (HV) to

19

Top Message

Toyota Industries’ Products Fitted in Electric-Powered Vehicles[HV / PHV / EV]

DC-DC converter[FCV]

Plastic glazing

Oxygen-supplying
air compressor

3.0 L displacement diesel engine*7

Hydrogen circulation pump

PCU (for assisting power
generating motor)

Electric compressor

PCU (for swing electric motor)

Hybrid unit
New hybrid engine (with an integrated motor) and PCUCharging standFour-wheel drive
rear inverter

DC-AC inverter

On-board charger

Inverter for hydrogen
circulation pump

Boost reactor

Toyota Industries Report 2018

Using a DC-AC inverter as an emergency power source
in a disaster-awareness camp

In order to achieve further growth with a focus on our core businesses ofmaterials handling equipment and car air-conditioning compressors, wewill meet changing customer needs and enhance our competitive edge by
providing logistics solutions and responding to vehicle electrification.
Moreover, to extend our reach from the existing business domains forachieving sustainable corporate growth, we will also channel our resources
and take on challenges in new business areas.
Because the world keeps changing faster and faster, we have taken
the necessary action to respond to these rapid changes. Inspiredby our corporate creed, we will step up our efforts to conduct
forward-looking activities based on our areas of specialization.
For a few years from fiscal 2019, we anticipate somewhat
difficult times as we prepare for future growth. The involved
costs could be large and may have a negative impact on ourbusiness performance. We intend to overcome these difficult
times and continue our growth by taking advantage of operating
diverse businesses, with each business segment making
concerted efforts.
The entire Toyota Industries Group will work as a teamtoward this goal, while always going back to our vision to“support industries and social foundations around the world
by continuously supplying products/services that anticipate
customers’ needs in order to contribute to an enriched lifestyleand comfortable society.”

Financial Section /Corporate Information

20

Future Direction of Business Operations
Promotion of
ESG Initiatives

FCVs are likely to gain popularity depending on regional characteristics andcustomers’ preferred vehicle usage.
Utilizing a variety of technologies such as power source technologies
we have accumulated for more than 30 years, the Compressor Divisionand the Electronics Division collaborate to develop and manufacturedevices for use in electric-powered vehicles.
Among such devices, a DC-AC inverter equipped to use home electric
appliances in a vehicle has drawn much public attention as an emergency
power source following the Great East Japan Earthquake, during which
it was used to feed power to evacuation shelters. In Japan, it is fitted in
official cars of local governments and increasingly used as a self-sustained
disaster prevention measure in apartments. We intend to propose otherpossible uses of this product.
Electric-powered vehicles themselves must extend
their driving range in order to gain popularity. In addition to
improving batteries and other devices, this requires reducing
vehicle body weight.
Toyota Industries has developed plastic glazing that isabout 40% lighter than its glass counterpart. This producthas already been used in the panoramic roof and rearwindow of various vehicles, including TMC’s Prius a.
In addition, our plastic glazing is easy to process, thus
providing diverse vehicle design options.
The need for electrification is also growing not just in theautomobile field but also in the construction machinery field.
In response, Toyota Industries has developed a new
hybrid unit for construction machinery by utilizing a pool ofengine and power electronics technologies accumulated in
the fields of materials handling equipment and automobiles.
The unit has been mounted in a hybrid hydraulic excavator of

Hitachi Construction Machinery Co., Ltd.
In this way, we respond to ever-changing customer needs in a timely
and accurate manner. By doing so, we intend to contribute to society andachieve sustainable corporate growth.

Strategies andBusinesses

Contributing to Vehicle Electrification with a Broad Range ofElemental Technologies from Power Source Devices to Lighter Weight Components*7: The Toyota 1KD diesel engine that has been mounted in lift trucks since 2013. Among the74 kW-class engines, it complies with the 2014 standards stipulated by the Off-Road Vehicle
Act without adopting the urea Selective Catalytic Reduction (SCR) system, a world first.

Hybrid hydraulic excavator ZH200-6 ofHitachi Construction Machinery

Company Introduction

Assisting power
generating motor

Toyota Prius a

21

Special
Feature 1

Special Feature 1

Augmenting the Logistics Solutions Business in
Response to Changing Customer Needs
In recent years, the environment surrounding logistics operations has been undergoing a drastic change.
Economic growth in emerging countries and increasing e-commerce transactions worldwide have led to an
expansion of global logistics volume. At the same time, new issues, including labor shortages in Japancaused by its declining birthrate, aging society and dwindling population and soaring labor costs inemerging countries, have also become prevalent. These circumstances have resulted in rapidly growing
needs for operational automation and higher logistics efficiencies. This Special Feature highlights how our
Logistics Solutions Business has been responding to such changing logistics needs and describes the
future direction of our efforts.

Company Introduction

To date, Toyota Industries has concentrated on providing
more efficient logistics solutions to customers in Japan,
the United States and Europe. In the latter two regions, ourfleet management systems to centrally manage a fleet of lift
trucks and increase the efficiency of their operations havebeen on the market for quite some time. In Japan, we havebeen providing total solutions, including automated storage
and retrieval systems, automatic guided vehicles (AGV),
warehouse management systems (WMS) and other logistics
systems and equipment, with a focus on resolving logistics
issues from the customer’s perspective.

Strategies andBusinesses

In the Materials Handling Equipment Business centeredaround lift trucks, Toyota Industries has been leading
the industry based on its strengths derived from global
production, sales and service networks and from its extensive
product lineup and customizing capability to meet customer
needs in every usage condition and business category.
In addition to merely providing products, we operate anenhanced, total support structure encompassing after-sales
services to ensure that customers always use our products in
optimum condition. Through this structure, we help customers
in different industries to achieve greater efficiencies in theirdiverse logistics operations.
(See page 31 for details of our global Materials Handling
Equipment Business.)

Responding to Changing Logistics Operations
Toyota Industries has made efforts to quickly and accurately
respond to customers’ logistics needs that have changed withthe times.

22

Toyota Industries Report 2018

As mentioned earlier, more distribution centers havebeen built to deal with a rapid expansion of e-commercetransactions. At these centers, logistics solutions thatcombine software and equipment, such as lift trucks for which
we enjoy the world’s top share*1, automated storage andretrieval systems, conveyors and sorters, play an importantrole. To respond to a drastic change in logistics needs, werecognized that we must augment our Logistics Solutions
Business globally and improve our responsiveness tosatisfy these evolving needs. Based on this recognition, wewelcomed two logistics systems companies into the Toyota
Industries Group, namely, U.S.-based Bastian Solutions LLC
in April 2017 and Netherlands-based Vanderlande Industries
Holding B.V. in May 2017.

n Growth of the E-Commerce Market(US$ Billion)
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
(FY) 2015
Asia PacificFinancial Section /Corporate Information

Toyota Industries’ Global Business Centered on
Lift Trucks

For example, in the field of lift trucks, we have responded
to the ever increasing need for electric lift trucks by expanding
our lineup from conventional lift trucks that use lead-based
batteries to include models equipped with lithium-ion batteries
and fuel cells, so that we can propose optimal products toeach and every customer.
Additionally, we have started offering our own sales
financing services to provide more purchasing options forcustomers depending on their financing needs. We have also
taken on the lift truck business of Tailift Co., Ltd., a Taiwanesemanufacturer of lift trucks having strengths in low- to middlepriced models, as an effort to respond to a broader range ofcustomer needs.
A rapid expansion of e-commerce transactions in recent
years has prompted an increase in the number and size of
warehouses, and we expect this trend to continue for theforeseeable future. The increasing popularity of e-commerce
has also pushed up the number of small-lot deliveries toindividual consumers, necessitating quicker, more frequent
and accurate operations from receiving orders to sorting anddelivery.
E-commerce operators and transportation companies
now need to process a large number of parcels in a shorttime, and we have been fielding many requests for our
proposals for establishing more efficient logistics operations.

Promotion of
ESG Initiatives

Telematics (fleet management system)*1: Survey by Toyota Industries Corporation
2016
North America

Central and Eastern Europe

2017

2018

2019

2020

Western Europe
Latin America

Middle East & Africa

Source: C reated by Toyota Industries based on “Study Report on a Structural Analysis of the
ICT Industry in the IoT Era and Verification of ICT’s Multifaceted Contributions to
Economic Growth,” Japan’s Ministry of Internal Affairs and Communication (2016)

Automated logistics equipment: automated storage and retrieval system and conveyor

23

Special Feature 1

Facilitating Mutual Understanding to Generate
Synergies

Strengthening the Logistics Solutions Business
Globally

Headquarters: North Brabant, Netherlands
Main business: Logistics solutions provider*3
Net sales: Approx. ¥150.0 billion (fiscal 2018)n Bastian Solutions LLC*3: A
 form of business to manufacture major equipment and software in-house andprovide a total logistics system*2: A form of business that specializes in logistics systems integration, incorporating
equipment mainly procured from outside sources

24

Toyota Industries Report 2018

Management system

Shuttle-type automated storage andretrieval system

First Global Alliance Meeting held in June 2017 in the Netherlands

Financial Section /Corporate Information

Since its establishment in 1952, Bastian has expanded its
logistics solutions business primarily in the United States.
Bastian is a turnkey contractor and major logistics
systems integrator that offers a total solution package fromthe selection of optimum hardware and software to systemdevelopment in order to meticulously satisfy individual needsof customers in different industries and sizes. Its thoroughpost-installation support services, including the remotemonitoring of operational status, also help customers set up
efficient logistics operations.
Capitalizing on thesestrengths, Bastian provides
solutions to customers

Vanderlande, which operates in Europe as well as
globally, is a leading logistics solutions provider in the world.
The company offers systems to distribution centers andwarehouses of e-commerce operators, retailers and parcel/
postal services as well as baggage handling in airports.
Vanderlande internally develops a broad lineup of logistics
equipment and related software, including automated storage
and retrieval systems, sorting systems and conveyors,and offers systems tailored to customer needs. It has anoted strength in starting up large-scale projects and has
built a strong customer base by providing enhanced aftersales services through its global network and earning trustfrom leading companies in various industries. Additionally,
Vanderlande’s baggage handling systems have been installed
in a number of large hub airports across the world.

Promotion of
ESG Initiatives

Headquarters: Indiana, U.S.A.
Main business: Logistics systems integrator*2
Net sales: Approx. ¥30.0 billion (fiscal 2018)

Robotic batch order picking

n Vanderlande Industries Holding B.V.

Bastian, Vanderlande and Toyota Industries are in acomplementary relationship both in terms of businessdomains and geographic areas of operations. As such, we
believe that the collaboration among the three will enable us toprovide solutions even more suited to customer needs.
The joining of the three companies has also drawn agreat deal of attention from customers, and we have alreadybegun to receive inquiries for new business opportunities thatwould have been difficult to capture for each company alone.
Examples include an inquiry for introducing Vanderlande’s
system in Japan and a business negotiation undertaken
jointly by Bastian and Vanderlande in North America. The
three companies are working together to link these newopportunities as a means of providing greater value tocustomers.
Going forward, we will formulate a TALG Vision & Strategy
for achieving growth over the medium to long term. Withthe three companies making concerted efforts, the Toyota
Industries Group will reinforce its Logistics Solutions Businesson a global scale and provide new value to customers.

Strategies andBusinesses

Our Logistics Solutions Business is centered around logistics
systems and equipment, and ramping up our efforts toreinforce this business had been an urgent task. Bastian and
Vanderlande each have unique strengths in this area.

in various industries, ranging from major retailers andtransportation companies to e-commerce operators andmanufacturers of pharmaceuticals, automotive parts and otherproducts.

Providing New Logistics Value

Company Introduction

Collaboration of the Three Companies to Expand Business Globally

As a new structure to promote the Logistics Solutions
Business across the entire Toyota Industries Group throughcollaboration among Bastian, Vanderlande and Toyota
Industries, we created the Toyota Advanced Logistics Group(TALG) in June 2017. Jointly with the Toyota Material HandlingGroup (TMHG), a global structure in our Materials Handling
Equipment Business that mostly deals with lift trucks, we helda Global Alliance Meeting and started discussing ways togenerate synergies through the collaboration of the Lift TruckBusiness and Logistics Solutions Business.
Based on our past M&A experience, we believe that
it is crucial to understand the strengths and status of thethree companies and build a trust-based relationship first,
as opposed to rushing to integrate business, since eachcompany has a different history and corporate culture.
According to this policy, we had a discussion in June 2017

on specific action items and the organizational structure of
TALG to promote collaboration, and established regionaland functional Working Streams. Through these Working
Streams, we are undertaking efforts toward the generationof synergies across various areas of operations from sales,
joint procurement and collaborative development to mutual
product supply, sharing of production know-how andimproved customer service through the mutual utilization ofservice networks.

Message from the Director in Charge
In recent years, I have felt a considerable change in customer needs driven by thegrowing e-commerce market and labor shortages. For example, there has been an
increasing need for totally managing the entire logistics operations within a plant and an
accelerated move among distribution companies toward automation. Thus, I believe thatreinforcement of the Logistics Solutions Business on a global scale represents both atask and a great growth opportunity for Toyota Industries.
Currently, Toyota Industries is not the industry leader in the logistics solutions field.
However, we are confident that we are able to grow into a significant player by leveraging
our accumulated logistics improvement know-how while mutually sharing the individual
strengths of our partners, Bastian and Vanderlande, and maximizing synergies.
In achieving growth, we must facilitate a mutual understanding among the threecompanies and patiently work to align the future courses of action. By doing so, we
intend to attain the global top position not only in the Lift Truck Business but also in the
Logistics Solutions Business.

Yojiro Mizuno
Senior Managing Director

Baggage handling system in airports

25

Special Feature 2

SpecialFeature 2
Eco-Conscious Products Utilizing Our
Strengths in Electrification Technologies

Contributing to a Zero CO2Emissions Society throughEnvironmental Technologies*1: Survey by Toyota Industries Corporation[Examples of Existing Products]

Takashi Ito
Managing Officer and Deputy Head of R&D Headquarters
In charge of R&D Management Dept., Engineering Dept. No.1,
Engineering Dept. No.4 and Global IT Dept.
(As of March 31, 2018)

Globally take on challenge of establishinga zero CO2 emissions society

Establishing a Recycling-Based Society

Take on challenge of minimizing
the use of resources

Reducing Environmental Risk andEstablishing a Society in Harmony with Nature

Exert a positive influence on biodiversity

Promoting Environmental Management

Enhance consolidated environmental management
and promote enlightenment activities

Current Product Lineup

Electrification

Toyota Industries Report 2018

Details
on P28Next-generation electric compressor
Electrification of large automatic guided
vehicles (AGV)

Among the four action themes, we attach the greatest
importance to the establishment of a low-carbon emission
society, and have been undertaking initiatives in various fields
from vehicle electrification to the development of fuel-efficientengines in our efforts to globally realize a zero CO2 emissions
society in 2050.
This Special Feature presents two examples of ourinitiatives in the field of electrification, which is one of
the effective means of reducing CO2 emissions. In theseexamples, we are utilizing our elemental technologies inseeking to provide innovative products and services.

Utilization of ammonia

Details
on P29Receiver tubes for solar heat

For reductionof CO2emissions

Positioning of Environmental Technologies

26

Integrated charging andinformation network system of
automobiles and lift trucks
Next-generation motor

Fuel cells

As one tenet under its Basic Philosophy, Toyota Industries
works to contribute to regional living conditions and social
prosperity and also strives to offer products and services
that are clean, safe and of high quality. Accordingly, we haveestablished the Global Environmental Commitment, a specificenvironmental action guideline, and defined our aspirationsin 2050 to promote the four action themes specified in
the Commitment. Our Sixth Environmental Action Plan forthe period from fiscal 2017 to 2021 serves as a milestone
toward achieving our aspirations in 2050, and we have been
undertaking technology development accordingly.

Forward-Looking R&D Themes

Financial Section /Corporate Information

Establishing a Low-Carbon
Emission Societyl Electric compressors
	Our electric compressors also utilize various elemental technologies, including technologies to enable weight reduction of materials,
surface processing technologies and power source technologies related to motors and inverters to improve power efficiency.

Promotion of
ESG Initiatives

Aspirations in 2050

l Hybrid unit for construction machinery	We developed our first hybrid unit for construction machinery by leveraging our engine and power electronics technologies
accumulated in the fields of materials handling equipment and automobiles. The unit has been mounted in a hybrid hydraulicexcavator of Hitachi Construction Machinery Co., Ltd.

Strategies andBusinesses

Global Environmental Commitmentl Electric lift trucks
	Our electric lift trucks utilize a range of elemental technologies, including power source technologies to improve power efficiency
and environmental performance as well as control technologies to operate lift trucks in optimum condition.

Company Introduction

Reducing CO2 emissions is an urgent task in curbing global
warming that has a significant impact on the natural environment
and people’s lives. As such, environmental initiatives of companies
are becoming ever more important. At Toyota Industries, we haveprovided products with excellent environmental performance as aneffort toward the realization of a zero CO2 emissions society. In thisSpecial Feature, we turn our attention to our next-generation
environmental technologies, which we have been developing to help
reduce global warming by leveraging our electrification and otherelemental technologies.

In the Materials Handling Equipment Business, we started
developing electric lift trucks as early as in the 1970s.
In recent years, we have developed and provided tocustomers lift trucks equipped with lithium-ion batteries andfuel cells. In the automobile-related businesses, we develop
and manufacture a broad range of devices for electricpowered vehicles, including hybrid vehicles (HVs), plug-in
hybrid vehicles (PHVs), electric vehicles (EVs) and fuel cellvehicles (FCVs), and have global top share*1 products in thefields of car air-conditioning compressors and electronics
devices.
As seen herein, we have shared and advanced ourtechnologies and know-how between the Materials
Handling Equipment and automobile-related businesses.
Departments carrying out research on material and otherbasic technologies also collaborate with each businessdivision. We believe that this approach has enabled
us to improve our technological prowess and conduct
development in an efficient manner.

Fuel cell towing tractor
Weight reduction

Carbon fiber reinforced plastic (CFRP)
utilizing 3D weaving machine technologies
Plastic glazing

Higher efficiency of internal-combustion engines

Next-generation highly efficient diesel
engineNext-generation turbocharger..... etc.

27

Special Feature 2

We strive to raise the competitiveness and expand the lineup of our products that utilize
electrification technologies. At the same time, we seek further evolution and fusing of ourelemental technologies to create an array of next-generation environmental technologies.
This Special Feature presents two examples of such technologies.

Application of Technologies Used in Existing Products

Overview / Advantages

1 When charging lift trucks (feeding electricity)

System to Use Ammonia to Generate Reformed Hydrogen for
Fuel Cell Systems
The next example is a project aimed at reducing CO2 emissions, promoted under the Cross-ministerial Strategic
Innovation Promotion Program (SIP), an industry-government-academia program led by the Japanese government.
Toyota Industries participates in the project as a joint research member.
Several automakers have been engaging in the development of FCVs in addition to EVs. The Japanese government
regards FCVs as an effective means of reducing CO2 emissions into the future and is promoting an SIP project, which
includes production of hydrogen for use in fuel cell systems.
One theme of the project is energy carriers, and they include a program to develop a more efficient method throughliquefaction and other processes to store and transport hydrogen, which is otherwise inefficient to do so in its gaseousstate. We are carrying out the development of such a method by utilizing our pool of technologies.
Examples of hydrogen usage

1 In a factory operating multiple lift trucks, electricity

Reforming catalyst
Storage battery

H

Charging controller

2 When charging lift trucks (feeding electricity inconjunction with EVs)

3 When charging lift trucks (collecting information)

Charging controller

Toyota Industries Report 2018

CombustorsN
H

Fuel cells

Reforming system

Overview / Advantages

Utilization of Toyota Industries’ Technologies

This reforming system uses ammonia to generatehydrogen for fuel cell systems. As ammonia goes
through the system, it chemically reacts with a reforming
catalyst inside and produces hydrogen.
There are many challenges involved in fully utilizinghydrogen in fuel cell systems. One of them is thathydrogen in a gaseous state is inefficient to store andtransport.
If this system can be put to practical use, it will
enable the use of ammonia, which is suitable for storage
and transportation, as a hydrogen carrier and allow
on-site supply of hydrogen at hydrogen stations. It canultimately evolve into a hydrogen supply system forfuel cells used for various purposes, and is expected
to contribute to the realization of a society in whichhydrogen is readily available.

Preparing itself for the era of electrification, Toyota
Industries has engaged in the development of catalyst
and other elemental technologies for generatingreformed hydrogen from ammonia for 10 years. Now,
these elemental technologies have reached a level atwhich their practical use is a reality.

Future Plan
Our future efforts will be to increase the safety of thesystem further and at the same time make the system
more compact.
Technologies for generating reformed hydrogenfrom ammonia are a key technology in establishing ahydrogen-based society. We recognize that it is our
responsibility to accelerate our development efforts inthis area in order to curb global warming and realize azero CO2 emissions society.

Financial Section /Corporate Information

Charging controller

For commercialization of the technology, we plan toinitiate feasibility tests in fiscal 2019 in an environment inwhich lift trucks are actually used. After experimenting
with multiple lift trucks running simultaneously, we aim to
put the technology into practical use in the mid-2020s.

28

Hydrogen

Promotion of
ESG Initiatives

Future Plan

Chemical
reaction

H

Utilization of Toyota Industries’ Technologies
We will apply our technologies related to on-board
chargers and charging stands for automobiles to charge
lift trucks. Energy saving and preventive maintenanceare made possible by utilizing our know-how in theoperational management of lift trucks.

Ammonia

Hydrogen stations
Strategies andBusinesses

costs can be reduced by charging just an appropriate
amount of electricity to individual lift trucks based on
their remaining battery charges and their operation
plan, thereby enabling the control of the peak power
consumption.
2 A considerable reduction in electricity consumption
will be possible by charging electricity to lift trucks
from PHVs, EVs and other similar vehicles based onthese vehicles’ operation plan.
3 It will also be possible to promote preventive
maintenance by collecting information on all lift trucks
running within a factory using Internet of Things(IoT) technology and conducting analysis of theiroperational status, thus contributing to reducing
maintenance costs.

Company Introduction

Integrated Charging and Information Network System ofAutomobiles and Lift Trucks

Development of a New Product Using Elemental Technologies

The projects presented in this Special Feature are only a few examples of our ongoing development efforts. Goingforward, we will continue to work toward contributing to environmental conservation and providing cutting-edge products
and services tailored to changes in the social structure and customer needs, along with improving the environmental
performance of our existing products.

29

Business Activities

Business Activities

Materials Handling Equipment
Automobile

P30–34(Vehicle / Engine / Car Air-Conditioning Compressor / Car Electronics)

Textile Machinery

P35–40
P41

Materials Handling Equipment
As a market leader with an extensive knowledge of global logistics needs, Toyota Industries provides a rangeof materials handling equipment, mainly lift trucks, and logistics solutions to customers.

* Survey by Toyota Industries Corporation

Opportunities

Risks• Restrained capital investment due to a slowing economy• Weaker sales caused by intensifying competition• Change in business environment triggered by an expanding market of low- to mid-priced lift trucks

FY20181,283.0 billion¥988.1 billion¥

Materials Handling Equipment Sales(Thousand units)

300
250
200
150
100
50
0

30

(FY) 14

Toyota Industries Report 2018

15

16

17

18

FY2017

Operating
Profit¥89.4 billion

FY2018104.9 billion¥n Toyota Material Handling Group

TMHG

Business Overview in Fiscal 2018
In the Materials Handling Equipment Business, the lift truck market in 2017 as awhole continued to expand globally, driven by strong sales in emerging
countries, including China, as well as the United States and Europe. Amid thisoperating climate, Toyota Industries strengthened production and sales activities
matched to respective markets and rolled out new products. Consequently, unit
sales of our mainstay lift trucks for fiscal 2018 increased by 10,000 units, or 4%,
to a total of 263,000 units over the previous fiscal year. Toyota Industries
continued to make proactive efforts for further business reinforcement, such as
carrying out model changes of an electric lift truck in Japan, enhancing the
product lineup in the United States and Europe and promoting close
collaboration with logistics solution subsidiaries also in the United States andEurope. As a result of these activities, net sales in fiscal 2018 totaled ¥1,283.0
billion, increasing ¥294.9 billion, or 30% year-on-year.

n Toyota Industries’
Global Lift Truck
Market Share

Financial Section /Corporate Information

FY2017

Net Sales

With the continued growth of the world’s lift truck market
in 2017, we worked to enhance the product appeal of ourmainstay lift trucks and reinforce our sales networks. We
also strove to offer reliable after-sales services, enhance
responsiveness to large-order customers and provide
solutions to achieve greater logistics efficiencies through theintroduction of distribution systems.
With regard to increasing product appeal, our quick
responses to growing environmental consciousness amongcustomers and more strict emissions regulations included
fully revamping a reach-type electric lift truck in Japan andincreasing the number of models equipped with lithium-ion
batteries in Europe and the United States. These electric lift
trucks have less environmental impact and offer even greater
maneuverability.
In Southeast Asia and other emerging country markets,
where sustained growth is expected, we established a

Promotion of
ESG Initiatives• Growing need for electric lift trucks following enforcement of more stringent environmental regulations around theworld• Growing need for products with high energy savings and low environmental impact, driven by a rise in eco-consciousness• An expansion of global logistics volume in line with an increase in the world population and economic growth• Rising need for higher logistics efficiencies prompted mainly by an expansion of e-commerce transactions, soaring
labor costs and labor shortages

Business Activities in Fiscal 2018
Strategies andBusinesses• An extensive logistics-related product lineup both in the fields of materials handling equipment (internal-combustion
lift trucks, electric lift trucks, fuel cell (FC) lift trucks, etc.) and materials handling systems (automated storage andretrieval systems, automatic guided vehicle (AGV) systems, automated lift trucks, etc.)• High technological capabilities, including those linked to environmental and safety performance• In-house development and production of key components, including engines and motors• Production know-how that ensures high levels of quality and production efficiency• Global, well-developed production, sales and service networks• Total support services encompassing IT-based maintenance and inspection as well as operational management• No. 1* in lift truck unit sales in the world• A wealth of experience and know-how accumulated in the globally operated Logistics Solutions BusinessAs a market leader in the materials handling equipment andlogistics fields, Toyota Industries assists customers worldwide
in attaining greater logistics efficiencies by delivering logistics
solutions optimally tailored to their specific needs.
Under the TMHG management structure, we engage inthe Lift Truck Business under the TOYOTA, BT, RAYMOND
and CESAB brands. Mutually utilizing the development andsales strengths of each brand, TMHG is promoting businesson a global scale.
We basically carry out product development in three
regions, namely Japan, North America and Europe. Basedon this structure, we develop and manufacture products ineach region, which are matched to the specific local needs
and characteristics, and ensure quick product delivery tocustomers.
At the same time, we seek greater product appeal by
conducting in-house development and production of key
components of lift trucks, including engines and motors.
In addition to supplying such high-quality products,
we have concentrated on sales and services through our
extensive networks and strengthened our sales financing
operations. Through these efforts, we are close to completingthe establishment of a stronger value chain structure. Goingforward, we will satisfy customer needs throughout theentire value chain and work to maximize its effectiveness.
On the sales front, we are seeking to obtain large orders by
responding to demands of customers who conduct businessglobally while undertaking sales activities matched to thespecific conditions of each market. In terms of services,
we assign a total of more than 10,000 experienced andknowledgeable service personnel to Japan, North America
and Europe, our mainstay markets, to provide finely tailoredservices to customers. Our service personnel visit customers
on a periodic basis and provide maintenance services tocontribute to preventing troubles from occurring. When aproblem does occur, they swiftly make a visit to the customer
and promptly take appropriate action.
In the field of logistics solutions, in which advanced
solutions to complex logistics issues in logistics sites areneeded, sustainable market growth is expected globally due
mainly to the recent, rapid expansion of the e-commercemarket. Amid this environment, we go a step beyond justproviding lift trucks and other materials handling equipment
and are reinforcing our Logistics Solutions Business tooffer solutions to customers’ logistics issues by leveraging
our production and logistics know-how accumulated in
manufacturing operations. At the same time, we aim toprecisely respond to customer needs both in terms ofhardware and software through collaboration with U.S.-based
Bastian Solutions LLC and Netherlands-based Vanderlande
Industries Holding B.V., two of our subsidiaries having uniquestrengths in this field.

Company Introduction

Strengths

Toyota Material Handling Group (TMHG)(Survey by Toyota Industries
Corporation, 2017)

TMHJ

TMHNA

TMHE

TMHI

TMHCN

Toyota Material
HandlingJapan

Toyota Material
Handling
North America

Toyota Material
Handling
EuropeToyota Material
Handling
International

Toyota Material
Handling
China

ToyotaIndustries

19%

The Toyota Material Handling Group possesses several brands such as TOYOTA, BT and RAYMOND andengages in business by dividing the world into five areas: TMHJ (Japan), TMHNA (North America),
TMHE (Europe), TMHI (Asia, Australia, etc.) and TMHCN (China).

31

Business Activities

Rinova series(See Special Feature 1 on pages 22–25 for details.)

Aichi Corporation’s
aerial work platform*1: Survey by Aichi Corporation

With the Japanese lift truck market continuing steady growthin 2017, Toyota Industries undertook activities to enhance
our product lineup and expand sales. As a result, we posted
record-high unit sales in fiscal 2018 at 43,000 units, attaining
a 2% increase year-on-year. Unit sales of Toyota Industries’ lift
trucks maintained the top position*2 in calendar 2017 for the
52nd consecutive year.
An expansion of the e-commerce market in recent
years has given rise to an increase in new construction oflarger warehouses. Coupled with changes in the businessenvironment caused by labor shortages, these developments
have further increased the needs for greater logistics
efficiencies and a higher degree of automation. To respond tothese needs, Toyota Industries revamped a reach-type modelof its electric lift trucks mainly used in warehouses and newly
released it as the Rinova series. The series consists of fourmodels*3, including standard types run by operators and theautomatic guided Rinova AGF, to satisfy the different needs ofcustomers.
In the logistics solutions field, we released KEY SO-CO,

32

Toyota Industries Report 2018

*2: C alculated by Toyota Industries Corporation, using data published by the Japan Industrial
Vehicles Association*3: Rinova AGF, Rinova Rack Stocker, Rinova All Way and Rinova Explosion-Proof TypeNorth American Market
In the expanding North American lift truck market, Toyota
Industries remained the market share leader*4 in 2017 withcombined unit sales of TOYOTA and RAYMOND brands ofapproximately 88,000 units, up 6% from the previous fiscal
year.
*4: Survey by Crist Information & Research, LLC, 2017

Toyota celebrated 50 years of North American lift trucksales in 2017 and held a special event in Columbus, Indiana.

VR simulator

The European lift truck market, supported by strong growthin the overall European economy, continued its positive
development during 2017. Although market development
was flat in the U.K., which was still somewhat affected by
Brexit, market growth was strongest in countries like France,
Spain, Sweden and Poland. In this business environment,
Toyota Industries posted sales of 92,000 units, up 1% fromthe previous fiscal year, mainly as a result of strong sales ofelectric lift trucks.
As for lift truck management, we have been focusing ourefforts on the introduction of I_Site solution, which is directed
toward all our customers who aim to reduce costs, improve
productivity and increase safety management. The productnot only enables more efficient fleet management regardlessof how many lift trucks are in operation but also raises theawareness of operators and allows energy-efficient operation
by visualizing the operational status and accidental contact ofeach lift truck. Theseand other featuresin turn contributeto building a safe
and secure logistics
environment. As aresult, in 2017 wereached over 50,000
lift trucks connected
I_Site fleet management systemwith I_Site.
In response to rising customer needs for more efficientlogistics environments, we have updated and expanded therange of automated guided vehicles (AGVs) with new models
that are effective at automating repetitive pallet handling while
also introducing automated lift trucks that can be equippedwith lithium-ion batteries. In addition, we expanded the

Financial Section /Corporate Information

Japanese Market

European Market

Promotion of
ESG Initiatives

Business Activities by
Regional Market

a simple inventory management system that helps customers
improve the efficiency and quality of their inventory
management in warehouses. The system is easy to set up
and operate to make it simple for customers who use such asystem for the first time and offers required functionality at areasonable price. Using a hand-held device to check incoming
goods and their quantities, confirm acceptance and deliveryof goods into and from warehouses and automatically record
details of operations in the system, KEY SO-CO serves toreduce the work load and possible errors of visual inspections
and manual procedures and contributes to the improved
accuracy of overall operations.
Additionally,
Toyota Industries
held the Toyota L&F
Logistics Solutions
Fair in five cities
around Japan fromJanuary to March2018. The aimof the fair was tohelp customers
Toyota L&F Logistics Solutions Fair
reduce logistics
costs, increase productivity and realize excellent safety of
their operations. During the fair, we presented our logistics
solutions by demonstrating the Rinova series, showcasing fuelcell lift trucks and various storage and retrieval systems andholding seminars on logistics improvement.

convenience through suchmeasures as enhancing thefunctionality of the system.
Likewise, Raymond continued
its automation efforts byintroducing the new Courier
automated stacker showcasedat the MODEX 2018 trade
RAYMOND brand’s electric low lift truck
show. By connecting
powered by lithium ion
Raymond’s automated lift trucks
to the iWAREHOUSE fleet
management system, customers gain even greater visibility
into their automated and manual mixed fleets.
Toyota and Raymond will continue to engage in productdevelopment, sales and after-sales activities by leveraging
the strengths of both brands. We will also focus on building
an online sales channel by expanding the products for sale
online to include electric lift trucks and parts in addition to
the currently available hand pallet trucks, thereby improving
customer convenience and increasing business opportunities.

Strategies andBusinesses

Meanwhile, Aichi Corporation,
which possesses the top brand*1
in the field of aerial work platforms
in Japan, posted higher sales tothe telecommunication and railway
industries, driven by strong demandfor equipment renewal, including
replacement of aging aerial work
platforms. On the other hand, in theelectric power and leasing industries
weaker equipment renewal demand
and restrained capital investment formechanization pushed down sales.
As a result, Aichi’s overall sales wereon par with the previous fiscal year.

Its product offerings were further expanded with the launchof high-capacity lift trucks and AICHI-brand aerial work
platforms. Toyota
also proactively
engaged in online
digital marketing
initiatives. National
promotions helped
attract hundredsof new customers
to Toyota dealers
and generate more
Celebrating 50 years of TOYOTA-brand lift truckorders. Raymond
sales in North America
newly developed avirtual reality (VR) simulator that utilizes an existing lift truck
plugged directly into the machine and allows a user toenter a simulated
warehousing
environment foreffective operator
training. Raymondalso expanded
its product lineup
by launching acounterbalanced
electric lift truck, anelectric low lift truck
Aerial work platform
powered by lithium ion
and other products
in addition to a newelectric low lift truck
manufactured by Tailift
Co., Ltd. as an entrylevel walkie for costconscious customers.
Both Toyota andRaymond continue toleverage automationand telematics.
TOYOTA brand’s new high-capacity lift truck
For example, salesof Toyota’s T-Matics fleet management system have been
consistently increasing, and we intend to raise customer

Company Introduction

regional sales headquarters in Thailand to enhance our
network and improve our customer responsiveness.
In the logistics solutions field, Toyota Industries iscollaborating with Bastian and Vanderlande, our subsidiaries
since 2017, and jointly examining specific action items in
the areas of sales, procurement and development throughfunction- and region-based subcommittees. The threecompanies will work closely together while leveraging theirown unique, individual strengths to respond to growing
needs for logistics solutions driven mainly by an expansion of
e-commerce transactions.

33

Business Activities

Automobile* Survey by Toyota Industries Corporation

Opportunities• Increasing needs for energy-saving products due to stricter environmental regulations and growing environmental
consciousness• Sales expansion of energy-saving products in line with growth of the automobile market

Risks• Shrinking of the automobile market caused by economic slowdown• Customers becoming reluctant to buy energy-saving products following less stringent environmental regulations• A drop in product competitiveness due to the yen’s appreciation or a rise in raw material costs

FY2017FY2018¥562.6 billion¥

Operating
Profit¥24.9 billion

595.0 billion

FY201829.6 billion¥

Vehicle Sales

Engine Sales

Compressor Sales(Thousand units)(Million units)

300

600

30

250

500

25

ALOMA*5 and Chinese Markets

200

400

20

Toyota Industries covers the ALOMA markets of Asia, Latin
America, Oceania, the Middle East and Africa as well as the
Chinese market. We are serving these markets with a lineup
consisting of TOYOTA, BT and RAYMOND brands.
In 2017, both the ALOMA market and Chinese market
expanded. Amid such conditions, Toyota Industries released

150

300

15

100

200

10

50

100

5

Toyota Industries Report 2018

*5: A
 LOMA is a Toyota Industries term for Asia, Latin America, Oceania, Middle East andAfrica.

700

350

0

(FY) 14

15

16

17

18

0

(FY) 14

Financial Section /Corporate Information

FY2017

Net Sales(Thousand units)

BT BT
Reflex
Rシリーズ
ReflexR-series

34• Highest-level production efficiency and quality among all Toyota-affiliated automobile body manufacturers (Vehicle assembly)• Know-how on the development and production of diesel engines and turbochargers (Engine)• Ability to develop excellent products with greater fuel efficiency, quieter operation, compactness, weight reduction andeasiness to mount on vehicles (Car air-conditioning compressor)• Global top-share* products for use in a full range of vehicles, from internal-combustion vehicles to hybrid vehicles (HV),
plug-in hybrid vehicles (PHV), electric vehicles (EV) and fuel cell vehicles (FCV) (Car air-conditioning compressor)• Global production structure based on the concept of local production and local consumption (Car air-conditioning compressor)• Higher technological capabilities cultivated through the development and production of products for Toyota Motor
Corporation (TMC) for external sales and for internal use (Car electronics)• Development, production and top-level quality of electronic parts and devices for electric-powered vehicles (Car electronics)

Promotion of
ESG Initiatives

The BT Reflex R-series reach truck won the German
Design Award 2018 in the Excellent Product Design
category for its clean and functional design.

Strengths

Strategies andBusinesses

TOPIC

new electric lift trucks, for which market needs have been
growing, and enhanced its sales and after-sales service
structures. Unit sales consequently increased 8% over theprevious fiscal year to 40,000 units in fiscal 2018.
In Asia, we established a regional sales headquarters in
Bangkok, Thailand, to augment sales in the Mekong area
where future growth is expected. In Thailand, we sell threebrands of TMHG, namely TOYOTA, BT and RAYMOND,
through two dealers. The new headquarters will play the roleof increasing the collaboration between dealers and provide
logistics solutions and related maintenance services tosupport logistics automation. We intend to offer warehouseand plant logistics solutions to customers and quickly respondto their diversifying and evolving logistics needs.
In Latin America, we set up our third regional office inBuenos Aires, Argentina, following ones in Singapore andDubai in the United Arab Emirates. The new regional officewill reinforce sales and after-sales service structures in Latin
American countries through such measures as collecting
information in the region, hosting regional conferences andproviding education to dealers. In this way, we seek to provide
products and services that can satisfy customers.
As an initiative common to the ALOMA and Chinese
markets, we are promoting the Toyota Lean Logistics
Program (TLLP), a scheme to train dealers in each country as
solution providers. Leveraging our strengths demonstrated
in manufacturing and logistics sites, the program focuses on
the ability to visualize the current status, plans and progress;
activities to sort, organize, clean and polish; and excellent
process management. Through these measures, our hope isthat the dealers will become proficient at offering solutions forcustomers to realize better operational sites and more efficient
operations, backed up by Toyota Industries’ wealth of logistics
know-how and extensive product lineup, to assist customers
in achieving greater logistics efficiencies.
With a view to responding to expanding and diversifying
customer needs in the ALOMA and Chinese markets, Toyota
Industries will continue to establish and enhance sales andafter-sales service structures in these regions. At the sametime, we will conduct marketing from our regional offices
and other bases, remaining close to each regional market,
and undertake TLLP and similar initiatives that leverage ourunique strengths. Through these efforts, we intend to provide
products and services to customers jointly with our dealers ineach country and attain further business expansion.

Company Introduction

range of shuttle systems that travel within racking structures
and transport goods by updating the existing Toyota Radio
shuttle, launching the new Autoshuttle and making otherimprovements. These
automated storage
and retrieval systems
and other high-density
storage systems allow
customers to utilize up
to 80% of warehouse
volume, increasingstorage space andimproving throughput.
Toyota Industries
had a successful rollout
Automated lift truckof its e-commerce
platform in the 16 European markets to raise customer
convenience and began selling new and used lift trucks,
parts and other products. We also strive to provide multifaceted support to customers’ logistics through suchinitiatives as Lean Advice services to our existing customers
by leveraging improvement know-how cultivated by our
manufacturing activities.

In the fields ranging from vehicle assembly to engines, car air-conditioning compressors and car electronics,
Toyota Industries continues to meet the expectations and trust of its customers.

35

15

16

17

18

0

(FY) 14

15

16

17

18

35

Business Activities

VehicleBusiness Overview in Fiscal 2018the voice of our customers. Through these endeavors, weseek ways to create more appealing and satisfying vehicles forcustomers worldwide.
At the same time, we also undertake activities to expand
our customer base by enhancing the appeal of the Vitz
through our support to motorsports events.

Developing Competitive Engines inIndustrial Fields

Business Overview in Fiscal 2018
Increases in sales of AR gasoline engines and GD
diesel engines pushed up unit sales in fiscal 2018 by
73,000, or 15%, over the previous fiscal year to574,000 units. Net sales increased by ¥8.7 billion, or
10% year-on-year, to ¥98.7 billion.

Highly Acclaimed by Customers Worldwide
Highest-Level SEQCD to Contribute to
Production of Toyota Cars
President of NETZ TOYOTA YAMAGATA Co., Ltd. and female staff who participated in thedevelopment of the Vitz Ray at the press conference to announce the release of the vehicle

Vitz at the Japanese Rally Competition

TOPIC
Toyota 1ZS diesel engine

In October 2017, we created an outdoor car design
viewing yard at the Nagakusa Plant in Aichi Prefecture.
The yard is used to review a car design outside undercustomers’ actual usage conditions. By utilizing thisyard, we will create designs that precisely capture theneeds of customers and make them smile.

* Survey by Toyota Industries Corporation

GD diesel engine

Turbocharger(mounted on GD diesel engines)

GD diesel engines are also manufactured by Toyota
Industries Engine India Pvt. Ltd. (TIEI), a consolidated
subsidiary in India, and are fitted in IMVs sold locally. Goingahead, we will continue to improve productivity at TIEI andincrease the ratio of locally procured parts.

“Our Vitz and RAV4” Initiative forEnhancing Appeal of the Two Car Models
As the sole producer of the Vitz in Japan and with the aim ofturning the vehicle into a long-selling series, Toyota Industries
collaborates with TMC and its dealers to make various
suggestions under the banner “Taking the Lead in Making Our
Cars More Attractive.” In 2017, we co-produced the Vitz Ray,a regionally limited model specifically targeting adult women,with dealers. Similarly, to boost the appeal of the RAV4, weplan and develop special-edition vehicles that directly reflect

36

Toyota Industries Report 2018

Opening ceremony of the outdoor car design viewing yard

TIEI’s plant

Turbocharger(mounted on Toyota 1ZS diesel engine)

Seeking Engines with Greater ProductAppealFollowing the adoption of the Paris Agreement at the 21st
session of the Conference of the Parties to the United Nations
Framework Convention on Climate Change (COP21) held in
November 2015, and with some countries announcing theirshift from internal-combustion vehicles to electric-powered
vehicles, there has been a growing need for engines with evengreater fuel efficiency and cleaner emissions for HVs, PHVs
and other electric-powered vehicles as well.
Diesel engines, on the other hand, enjoy an enduring
popularity particularly as a power unit suited for sports utility
vehicles (SUV) and such commercial vehicles as pickup
trucks, as they offer excellent basic performance of high fuelefficiency and high torque at low speed.
Aiming for further evolution of internal-combustion
engines, we will continue to seek the world’s highest-levelcombustion efficiency and develop more fuel-efficient andcleaner engines.

Financial Section /Corporate Information

Toyota Industries’ plastic glazing has been used in thepanoramic roof of TMC’s hybrid vehicle Prius a (Prius + in
Europe and Prius v in North America).
The panoramic roof retains the beautiful surface quality
typical of a glass roof yet is approximately 40%* lighter than its
glass counterpart, improving vehicle fuel efficiency, which has
become increasingly important, and thus contributing to the
reduction of CO2 emissions.
Toyota Industries will continue to develop attractive new
products that leverage the distinctive characteristics ofplastic glazing.

Promotion of
ESG Initiatives

Development and Production of Plastic
Glazing*1: Short for gas heat pump; air conditioner driven by a gas engine*2: Short for combined heat and power; co-generation system

Strategies andBusinesses

Toyota Industries’ comprehensive strengths lie in the highest
level of safety, quality, cost and delivery among all Toyotaaffiliated automobile body manufacturers. In fiscal 2018,
we received the Toyota Quality Control Award from TMC
for six consecutive years. We will remain committed tofurther strengthening our already superior level of safety, theenvironment, quality, cost and delivery (SEQCD). We also are
working to leverage our ability to quickly start up production
and a flexible structure in terms of vehicle models andproduction volume to contribute to production in Japan of
Toyota vehicles.

Toyota Industries’ diesel engines are mounted in a variety of
Toyota vehicles, including the Toyota Land Cruiser series, theworld’s renowned full-fledged four-wheel drive (4WD) model,
and TMC’s Innovative International Multipurpose Vehicle (IMV)
series targeting emerging countries. Their high performanceand reliability have gained strong market recognition.
Currently, our mainstay products are V-type 8-cylinder VD
diesel engines and in-line 4-cylinder GD diesel engines. GD
diesel engines are a model we started manufacturing in June2015 and are equipped with a turbocharger specifically andoptimally designed and manufactured in-house, thereby
offering a much greater performance than KD diesel engines,
their predecessor model.

Toyota Industries’ engines are highly renowned for theirreliability and excellent environmental performance in industrial
fields as well. These engines are used for a wide variety of
applications, including our lift trucks, and adopted by manycustomers such as GHP*1 manufacturers in Japan and CHP*2
manufacturers worldwide.
We developed and are manufacturing the Toyota 1KD
diesel engine (4-cylinder, 3.0 L displacement), the Toyota 1ZS
diesel engine (3-cylinder, 1.8 L displacement) and the Toyota
1FS gas/gasoline engine (4-cylinder, 3.7 L displacement), all ofwhich are equipped with an optimally designed turbocharger
also developed and manufactured in-house. These engines
offer downsized displacement compared with conventionalmodels with equivalent output, resulting in higher fuelefficiency, cleaner emissions and a reduction in size. In 2017,
the Toyota 1KD engine was adopted for the first time in theconstruction machinery field. We will continue to expand sales
into this and other fields.

Company Introduction

The automobile market expanded on a global basis,
with strong sales mainly in Europe and China.
In fiscal 2018, unit sales of the Vitz (Yaris outside
Japan) and the RAV4 decreased by 9,000 units, or
3%, from the previous fiscal year to 298,000 units.
As a result, net sales declined ¥1.0 billion, or 1%
year-on-year, to ¥72.1 billion.

Engine37

Business Activities

Car Air-Conditioning Compressor
Business Overview in Fiscal 2018
In fiscal 2018, unit sales of car air-conditioning
compressors rose 870,000 units, or 3%, over theprevious fiscal year to 33.42 million units as we posted
an increase in sales in Japan, North America, China
and other countries. Net sales increased ¥16.7 billion,
or 5%, from the previous fiscal year to ¥351.4 billion.

Establishing Optimum Global Productionand Supply Structures

38

Toyota Industries Report 2018

SVE08 compressor(fixed-displacement, vane type)Group photo taken at commemoration ceremony

Financial Section /Corporate Information

6SES14 compressor(variable-displacement type)

Promotion of
ESG Initiatives

To respond to growing demand for variable-displacement
type compressors triggered by the enforcement of more
stringent fuel efficiency standards, we are proceeding withaugmentation of corresponding production capacities andcommenced local production of key functional parts at our
production bases in North America.
In Europe, ASEAN countries and China as well, we aren Worldwide Bases of Car Air-Conditioning Compressors (As of March 31, 2018)

TDDK
DNDE

Germany

Germany

YST

DICH

MACI

China

China

U.S.A.

DIAM

U.S.A.
TICO

DNTS

Japan

Italy
SUBROS

TACK

India

China

Augmenting Technical Support
Capabilities
We station our sales engineers in the United States, Germany,
Italy and China and provide technical support locally,

Toyota Industries held a ceremony to commemorate
reaching global cumulative production of 500 million
car air-conditioning compressors in June 2017 after
57 years since commencing production in January
1960. Our compressors were first adopted in TMC’s
Crown in 1960, and we started exporting them toBayerische Motoren Werke AG (BMW) in Europe in1971. Since then, with the expanding automobile
market and growth in demand following an increase in
the percentage of vehicles fitted with an air conditioner,
our products have received high acclaim from manycustomers for their performance, quality and reliability,
and we have successfully expanded our scale ofproduction to date.

We are creating more evaluation facilities in-house forachieving even higher superiority in terms of technology
development.
Our mother plants in Japan have been reinforcing theirevaluation functions by designing and creating evaluation
facilities in-house that simulate more realistic vehicle
environments. With the goal of executing swift and detailed
evaluations jointly with local automakers, we are globalizing
our evaluation functions in a phased manner.
Through these and similar initiatives, we aim to improve
the quality of our compressors through faster evaluation
processes and better evaluation techniques while preventing
external leaks of our development and evaluation know-how.

Strategies andBusinesses

More stringent fuel efficiency standards have been enforced
mainly in the United States, Europe, Japan and China.
Against this backdrop, in the field of car air-conditioning
compressors to be mounted in internal-combustion vehicles,
needs for greater fuel efficiency have been growing in both
fixed-displacement and variable-displacement type products.
Particularly in the United States, in recent years there has
been an accelerated shift from fixed-displacement typeproducts to fuel efficient variable-displacement type products.
Our variable-displacement type compressors, which
are renowned for high fuel efficiency and reduced weight,
have been adopted by the world’s leading automakers,
including TMC, Daimler AG, General Motors Company (GM),
Volkswagen AG and Hyundai Motor Company.
In the United States, our SES series became the firstcompressor to be approved under the country’s off-cycle
credits program. The program gives off-cycle credits totechnologies that can effectively improve fuel efficiency under
its emissions regulations. We have since been working toincrease the number of models equipped with the SES series
compressors.
In addition to the development of variable-displacement
type compressors, we are also focusing on the developmentof fixed-displacement type products targeting emerging
countries that achieve an optimum balance between
performance and prices.
In the field of fixed-displacement type compressors,
we newly developed the SVE series vane type compressor
for compact vehicles. We successfully improved cooling
performance by 20% without increasing its size and madeTOPIC

Enhancing Development Capability by
Creating Evaluation Facilities In-House

Company Introduction

Development Efforts Centered around
Energy Savings and Vehicle Electrificationit the lightest among other compressors in the same class.
It has been initially fitted in Suzuki Motor Corporation’s new
Swift followed by its XBEE. We aim to promote unit sales by
increasing the number of models fitted with the compressor.
For electric compressors for HVs, EVs and other electricpowered vehicles, we expect accelerated growth in demand
over the medium to long term as the electrification of vehicles
proceeds.
Our electric compressors’ high levels of performance andquality stem from utilizing precision processing and assembly
technologies, which are also used for compressors forinternal-combustion vehicles as well as in-house production of
key components, including motors and inverters. In addition,
based on our accumulated know-how in doing business with
automakers around the world, we internally conduct stringent
evaluation tests on the effectiveness of measures against
radio disturbance and other problems unique to electriccompressors and thus ensure high reliability.
Since initially being installed in the second-generation
Prius, our electric compressors have been mounted in all of
TMC’s HVs from the fourth-generation Prius to the LS600h.
We have also developed the ESB series to offer
attractive products to automakers now actively engaged
in the development of PHVs and EVs in addition to HVs.
The ESBG27 compressor mounted in the new Prius Plugin Hybrid uses a Gas Injection Cycle to improve its heating
capability in cold regions by roughly 30% and help resolve
the major challenge ofextending the vehicle’s
electric motor driving range
when the heater is turned
on. The ESBG27 is also
the world’s first compressor
with the Gas Injection Cycle
to be adopted in a massproduced car.
Besides TMC, Ford
Motor Company, Renault
ESBG27 compressor (electric type)
S.A.S., Honda Motor Co.,
Ltd., Nissan Motor Co., Ltd. and other automakers, which
are already using our electric compressors in their respective
HVs, PHVs and EVs, we will continue to ramp up our efforts
to expand sales to other automakers. With a view to ensuring
the steady growth of this business, we will channel resources
into both types of compressors, namely compressors forinternal-combustion vehicles, which are still mainstay vehicles
for the time being; and compressors for electric-powered
vehicles, for which we anticipate stronger demand in the future.

expanding production capacities and increasing the ratio of
locally procured parts to accommodate growing demand for
car air-conditioning compressors.
We are working to attain higher quality and production
efficiency on a global scale by harnessing Internet of Things(IoT) technology to monitor in real time the production status
and operation of facilities at these production bases outside
Japan.

promoting sales expansion and activities to prevent quality
issues from occurring.
Since fiscal 2014, two of our consolidated subsidiaries,
namely, Michigan Automotive Compressor, Inc. (MACI) in the
United States and TD Deutsche Klimakompressor GmbH(TDDK) in Germany, have been conducting design operations
locally. A reduction in development lead time resulting fromour local design operations has been received favorably byautomakers. We plan to continue this initiative in the future.

TACG

U.S.A.
TICA

U.S.A.

TACI

Indonesia
Consolidated production bases

Licensed manufacturers

DNBR
Technical service stations

BrazilToyota Industries’ car air-conditioning compressors are widely adopted by automakers around the world, garnering the No. 1* position in global sales.
* Survey by Toyota Industries Corporation

39

Business Activities

Textile Machinery
Carrying on the philosophy of founder Sakichi Toyoda, which reflects his strong commitment to manufacturing, Toyota
Industries responds to a broad range of needs with its extensive product lineup, from air-jet looms, for which we enjoy theworld-leading market share*1 in unit sales, to ring spinning frames and roving frames.

Car Electronics
Business Overview in Fiscal 2018
Net sales of car electronics products increased,primarily supported by sales of DC-AC inverters,
on-board chargers and other devices mainly to TMC.

Toyota Industries develops and produces electronic devices
for electric-powered vehicles, including HVs, PHVs, EVs andFCVs. In addition to TMC, we are promoting new business toother automakers across the world.

Auxiliary Power Source Devices• Global, well-developed service network(Thousand units)

10• Ability to develop products that excel in high-speed
operations, reliability and energy-saving performance

8

Opportunities

6

Core Components for Drive Systems4• A rise in textile demand in line with an increase in the world population• Increasing need for high-quality and highly functional yarn and textile products, following the economic growth of
emerging countries

The fourth-generation Prius
offers a 4WD model for the
first time in the series and isfitted with our rear inverter for
4WD. This product converts
the DC voltage of HV batteries
to AC voltage and feeds
power to the 4WD rear motor.
4WD rear inverter mounted in the Prius
The adoption of a forced aircooling system eliminates theneed to install cooling water piping, thereby providing greater
ease in mounting the inverter on vehicles. The inverter also
features quieter operation as it is mounted near the rear seat.

2

Risks
(FY) 14

15

16

17

• Changes in each government’s policies concerning
promotion of the country’s textile industry• Economic slowdown

FY2017

Net Sales

Business
Overview in
Fiscal 2018¥66.2 billion

FY201865.5 billion¥

Charging standfor PHVs and EVs

Contributing to a Low-Carbon Society
The electrification of vehicles and materials handlingequipment is expected to become more widespread withthe enforcement of more stringent fuel efficiency standards
by many countries and higher environmental consciousness
among customers. We will reinforce our planning,development and production structures in the fields of HVs,
PHVs, EVs and FCVs with the aim of contributing to a lowcarbon society.

FY2017

Operating
Profit¥6.8 billion

FY2018

6.1 billion¥

The textile machinery market remained weak in the primary markets of China and other emerging
countries in Asia. While sales of yarn quality measurement instruments increased, unit sales of air-jet
looms decreased 600 units, or 9% year-on-year, to 6,300 units. As a result of this and other factors,
net sales declined ¥0.7 billion, or 1%, from the previous fiscal year to ¥65.5 billion.

Despite a continued economic recovery trend in the primarymarkets of our mainstay air-jet looms, namely, China andIndia, unit sales were on par with the previous fiscal year,
affected by the tight monetary policy in China and introductionof a new tax system in India. Meanwhile, unit sales of air-jet
looms were down in such countries as Pakistan and Vietnam
due to stagnant conditions in both their domestic and export
markets for textile products.
As a result, unit sales of air-jet looms in fiscal 2018
decreased from the previous fiscal year. Our air-jet looms,
however, still maintained the top position in calendar 2017 forthe 20th consecutive year since 1997*1.
*1: Survey by Toyota Industries Corporation

Strengthening Partnership with
Truetzschler
In November 2017, Toyota Industries agreed to transfer
the entire business of the TCO12 comber*2 and TSL12 lap
former*3, from development to production, sales, after-sales
services and provision of spare parts, to Truetzschler GmbHTSL12 lap former& Co. KG, our partner manufacturer of spinning machinery
in Germany. We believe that this agreement will serve tofurther strengthen our partnership and enable us to provide
new value to the market. The two companies will continue
to provide products and services that bring even greater
satisfaction to customers.
*2: Machine that uses a comb-like tool to remove short fibers and undesired particles in thespinning process to improve the quality of the resulting yarn
*3: Machine used to produce laps, or rolls of thinly spread sheet of fibers

KTTM’s QC Circle Winning a Par
Excellence AwardIn December 2017, the Quality Circle Forum of India, a quality
control (QC) circle convention, was held in Mysore, India, withthe participation of 1,770 QC circles from 527 companies in
the country. At the forum, Kirloskar Toyota Textile Machinery
Pvt. Ltd. (KTTM), a consolidated subsidiary producing textile
machinery in India, won the Par Excellence Award and thus
qualified to participate in an international convention to beheld in Singapore in October 2018.
Through QC circle and similar activities, the Toyota
Industries Group strives to improve the manufacturing
capabilities of employees.
At the same time, we
work to provide productsthat can win even greater
trust and satisfaction from
customers by engaging inquality improvement andcost reduction efforts on adaily basis.

Financial Section /Corporate Information

Sub-stand Main control
stand• A decline in capital investment due to a drop in raw cotton
and yarn prices• Weaker sales due to intensifying competition

Promotion of
ESG Initiatives

Toyota Industries Report 201818

Market Environment and Toyota
Industries’ Sales

Charging Infrastructure
Toyota Industries sells public-use
charging stands and home-use
charging units for PHVs and EVs, whichhave been jointly developed with Nitto
Kogyo Corporation.
In October 2017, we initiated afeasibility test of our charging stands
at IKEA Nagakute in Aichi Prefecture tocontrol the amount of charging by using
IoT technology. We are testing the link
between charging-only sub-stands anda main control stand that offers charging
functionality as well as communication,
billing and other features. We are also
conducting tests to remotely control
optimum charging utilizing IoT.

0

TCO12 comber

40• Broad product lineup both in the spinning and weaving
machinery fields• World-leading market share*1 in unit sales of air-jet looms

Strategies andBusinesses

An on-board charger converts AC voltage from the power
grid into DC voltage of high-voltage batteries in vehicles andis necessary for charging EVs and PHVs, for which the market
is expected to expand in the future. Toyota Industries supplies
an on-board charger for the Prius PHV. This charger offers
better battery charging output that is 1.7 times higher thanthat of conventional models and realizes a 50% reduction insize by integrating a charging system electronic control unit
(ECU) and by increasing cooling performance.
A DC-DC converter
converts the high voltage of
HV, PHV and EV batteries
into a lower voltage level tosupply power to standard
electrical devices such as
lights and wipers. For the
fourth-generation Prius, by
On-board charger mounted in the Prius PHV
developing the world’s firstthick copper substrate withexcellent heat dissipation
capability, we reduced thevolume and weight of the
product.
Our DC-DC converter for
start-stop systems, which
utilizes our technologies
DC-DC converter mounted in the Prius acquired in the field of DCDC converters for HVs, cancompensate for a voltage drop at the time of engine restartand ensure stable power supply to audio equipment andcar navigation systems. A DC-AC inverter is equipped touse home electric appliances in a vehicle and has drawn agreat deal of public recognition for its use as an emergency
power source after the Great East Japan Earthquake. These
products have been highly recognized for their quality both inand outside Japan. In fiscal 2018, the ratio of sales outside

Strengths

Air-Jet Loom Sales

Company Introduction

Steadily Expanding Roles of Our Devices
for Electric-Powered Vehicles

Japan of DC-AC inverters was over 60%, while that of DC-DC
converters for start-stop systems exceeded 30%.
In addition, we develop and produce inverters for electriccompressors and an inverter for hydrogen circulation pumps
to be fitted in TMC’s MIRAI FCV.

Par Excellence Award certificate, trophy andcommemorative items

41

Corporate GovernanceCorporate Governance StructureInternal Control System
ComplianceManagement of Confidential Information
Risk Management

Corporate Governance

P43
P44
P44–46
P47
P47–48

Toyota Industries strives to enhance its corporate value in a stable manner over the long term and maintains society’s trust by
earnestly fulfilling its social responsibilities in accordance with its Basic Philosophy. To that end, Toyota Industries endeavors
to further enhance its corporate governance in its efforts to maintain and improve management efficiency and the fairness
and transparency of its corporate activities.

Corporate Governance Structure
Implementation Structure

Further Promoting Initiatives to
Sustain Growth in the Areas of Governance,
Society and the Environment

Financial Section /Corporate Information

Shareholders’ Meetings
Selection/Dismissal

Selection/Dismissal

Reporting

Cooperation

Independent Auditors

Corporate GovernanceP43−48

Executive Compensation
Committee

Management Committee

Relationship with Our Stakeholders

Business Operation Committee

P49−58Environmental Initiatives

P59−74

Vision for Environmental Activities / Structure to Implement Environmental Management /Environmental Impact Flow and Environmental Accounting / Sixth Environmental Action Plan /Establishing a Low-Carbon Emission Society / Establishing a Recycling-Based Society /Reducing Environmental Risk and Establishing a Society in Harmony with Nature / Environmental Management /Third Party Assurance of Environmental Performance Data

Toyota Industries Report 2018

Reporting

Audit & Supervisory Board
Board of Directors

ReportingExchange of Opinions

Executive Appointment
Committee

Corporate Governance Structure / Internal Control System / Compliance / Management of Confidential Information / Risk Management

Relationship with Our Customers / Relationship with Our Business Partners / Relationship with Our Shareholders and Investors /Relationship with Our Associates / Relationship with Our Local Communities

42

Accounting
Audit

Selection/Dismissal

Appointment/Monitoring(Deliberates on important matters from management’s perspective)

Monitoring
Selection/Dismissal
Cooperation

Audit & Supervisory
Board Office
Cooperation

Monitoring*1: Functional
Meetings

President

Human Resources(Follows up on the execution of business operations)Management Council

Discussion/
ReportingDirection/
Supervision

Promotion of
ESG Initiatives

Toyota Industries convenes monthly meetings of the Boardof Directors to resolve important management matters andmonitor the execution of duties by directors. We also appoint
outside directors who have a wealth of experience andknowledge concerning business management. They attend
meetings of the Board of Directors and give opinions and ask
questions as deemed necessary. Through this supervisory
function of outside directors, we ensure the legality and validityof the Board’s decisions as well as directors’ execution ofduties from an objective perspective. In addition, to evaluate
the effectiveness of the Board of Directors we conduct
interviews with outside directors and audit & supervisoryboard members every year and implement measures for
improvement as necessary based on their evaluation andfeedback. The Management Committee, which is composedof directors at the executive vice president level and above
as well as relevant managing officers and audit & supervisoryboard members, deliberates on a variety of issues concerning

Strategies andBusinesses

important management matters such as our corporate vision,
management policies, medium-term business strategies andmajor investments.
Toyota Industries has a divisional organization system,with significant authority delegated to each business division.
For especially crucial matters, however, we have establishedthe Business Operation Committee to enable the president
to meet with the heads of each business division regularly tomonitor and follow the status of their business execution. At
meetings of the Management Council, directors, managing
officers and audit & supervisory board members convene toreport and confirm the monthly status of business operations
and share overall deliberations at Board of Directors meetingsand other management-related information.
In addition, issues pertaining to human resources, quality,
production, procurement and technologies are discussed at
the corresponding functional meetings. We have also put inplace committees to deliberate on more specific matters, suchas corporate social responsibility (CSR), the environment andexport transaction controls. These functional meetings andcommittees discuss important matters and action themes inrespective areas.

Company Introduction

Promotionof ESG
Initiatives*2: Committees
CSR

Reporting
Audit Dept.

Quality

Environmental

Production

Export Transaction
Controls

Procurement

Safety and HealthTechnologies

Profit Improvement(Reports on and confirms execution of business operations)Internal Audit

Functional Meetings*1, Committees*2
Managing Officers

Business Divisions/In-House Company/Departments
Subsidiaries/Affiliates

These entities deliberate andfollow up on issues in respective areas.

(As of June 12, 2018)
Toyota Industries’ Corporate Governance Reports are available at: https://www.toyota-shokki.co.jp/ (in Japanese).

43Corporate Governance

Audit & Supervisory Board System

Four Pillars of Compliance Activities
We believe that compliance means both adhering to laws
and regulations and observing ethics and social norms. In
order to ensure compliance, it is vital to instill an awareness ofcompliance in each and every employee.
Under the strong leadership of top management, we
promote compliance throughout the Toyota Industries
Group by formulating a Code of Conduct and thoroughly
informing employees together with checking and monitoring
compliance.
n Four Pillars of Compliance Activities

Spiral Up

1

2

3

4

Leadership/
Organization

Formulating
Rules

Declaration by
the president

Employee
Code of
Conduct

Thoroughly
Informing
Employees

Checking
andMonitoring

Education on
relevant laws
and regulations

CSR selfassessment

Compliance
Subcommittee

Internal rules

Audit

Manuals

Policies
Compliance Subcommittee

Departments in charge of legal compliance: 12 Supporting department: 1

Toyota Industries
Corporation

Consolidated
subsidiaries in Japan

Consolidated subsidiaries
outside Japan

Compliance committees

Compliance officers

Courses distributed in fiscal 2018

Formulation of Code of Conduct and Dissemination
Toyota Industries has formulated and distributed to executives
and all employees the Toyota Industries Corporation Employee
Code of Conduct, which serves as conduct guidelines thatshould be observed by employees, and has been providing
familiarization training. Subsidiaries in and outside Japan
have formulated their own Code of Conduct appropriate totheir respective business lines and corporate cultures. Toyota
Industries’ 30 consolidated subsidiaries in Japan and 75
consolidated subsidiaries outside Japan have already createdtheir own Code of Conduct and have been working to instill
an awareness among their employees.
Simultaneously, to prevent significant risks of bribery
and violations of antitrust laws, in addition to the Code of
Conduct we have formulated corresponding regulations
and been undertaking activities to familiarize employeeswith these regulations. Regarding bribery, Toyota Industries
formulated the Global Guidelines for Bribery Prevention.
Particularly, in countries with a high risk of bribery, each basehas developed internal rules in accordance with the applicablelaws in respective countries and been conducting activities tofamiliarize employees with them. As for antitrust laws, we have
put in place a system to conduct a check and review before
and after employees of Toyota Industries contact competitors.
We are also familiarizing all employees that they are prohibitedfrom any acts that may possibly constitute a violation of
antitrust laws. Since fiscal 2016, we have set up antitrust law
compliance month and have been conducting enlightenment
activities at relevant departments.

Thoroughly Informing Employees about Applicable
Laws and Regulations

n Internal Control Assessment System (Based on J-SOX)

Internal control activities undertaken by eachdepartment and consolidated subsidiary(Establishment and operation of internal controls)

Annual financial report

Internal Control Report
Review of internal
Improvement of Detection ofcontrols byinternal controls deficiencies Audit Department

Internal Control Audit Report

Audit on internal controls by independent auditors

44

Toyota Industries Report 2018

Establishment and Reinforcement of Implementation
Organization
To promote compliance throughout the Toyota Industries
Group, we have established the Compliance Subcommittee(led by an executive in charge of the Legal Department) as asubordinate organization to the CSR Committee. Every year,
the subcommittee formulates an action policy and conductsa follow-up check on the progress of corresponding activities
twice during that year.

n Example Topics of e-Learning Materials

Toyota Industries provides required legal knowledge toemployees according to their job ranks or positions,familiarizing them with the initial responses that should be
followed upon the occurrence of a problem and educatingthem on risk management. Through new employee education,
rank-based education and workplace meetings, we provide
easy-to-understand guidance on “what to do” and “what not
to do” in order to improve their compliance awareness basedon laws and corporate ethics, using the Toyota Industries
Corporation Employee Code of Conduct as an instructional
material.
Since fiscal 2014, we have created and disseminatede-learning material on one specific topic every month inorder to cultivate a deeper understanding of compliance•Proper use of software programs •Amendments to Japan’s Act on theProtection of Personal Information •Copyrights •Prevention of insider
trading •Product liability •Processing of the consumption tax•Japan’s Building Standards Act •Japan’s subcontracting law(prevention of delay in payment) •Achieving the Safety Vision•Antitrust laws (cartels) •Export transaction controls•Japan’s Act on Prohibition of Unauthorized Computer Access*Provided to all employees of Toyota Industries Corporation and its consolidated subsidiaries
in Japan. Additional and revised courses are under consideration.

In addition, we utilize a video material describing theCode of Conduct, which employees of the Toyota Industries
Group should observe, to assist relevant education in ourconsolidated subsidiaries in and outside Japan.

Japanese-language Code of Conduct
video material

English-language Code of Conduct
video material

Compliance Hotlines
The Toyota Industries Group has in place a whistle-blower
system for employees to report and seek consultation oncompliance-related issues. In Japan, North America, Europe
and China, in particular, we operate a compliance hotline(external helpline) that allows employees and their families
to seek advice from external experts on compliance-related
matters without being exposed to negative consequences.
In fiscal 2018, we received 60 reports and inquiries fromwithin Toyota Industries and from its consolidated subsidiaries
in Japan on such matters as labor management, working
environment and ethics. After verifying each report and inquiry,
we have taken appropriate action regarding each case. Our
responses have been reviewed and judged appropriate byexternal lawyers.
In fiscal 2017, we also started operating a hotline for our
major business partners to report and inquire about possible
compliance violations by Toyota Industries employees. Thishotline is now made available to approximately 120 business
partners.
Through these initiatives, we ensure the early discovery
and prevention of issues and intend to become a “company
on which society places greater trust.”

Financial Section /Corporate Information

In accordance with the Companies Act, in May 2006 Toyota
Industries’ Board of Directors adopted the Basic Policies
for the Establishment of an Internal Control System (Basic
Policies) to ensure compliance, risk management as well as
the effectiveness and efficiency of business operations by
incorporating these policies into each business segment’s
annual policies and day-to-day routine management. The
CSR Committee, at its meeting held in March, assesses the
progress made in implementing the Basic Policies in theyear under review and determines actions for the coming
year, including reviewing the implementation structure andenhancing day-to-day operational management.

Activity reports

Promotion of
ESG Initiatives

Internal Control System

CSR Committee

among employees of Toyota Industries Corporation andits consolidated subsidiaries in Japan and to create
an environment in which employees foster complianceconsciousness on their own.
In fiscal 2018, we invited external lawyers to holdexecutive legal seminars on the “latest trends in information
technology-related laws” and “points to be noted when
conducting corporate public relations and disclosing
information” for directors, managing officers and audit &supervisory board members.

Strategies andBusinesses

Appointment of Independent Members ofManagement
As a publicly listed company, Toyota Industries strives toensure the fairness and transparency of management.
Following the Securities Listing Regulations stipulated by
the Tokyo Stock Exchange and Nagoya Stock Exchange,
respectively, to further enhance our corporate governanceToyota Industries has appointed as independent membersof management two outside directors and two outside
audit & supervisory board members who are deemed tohave no conflicts of interest with our shareholders.

Compliancen Organization for Promoting Compliance

Company Introduction

Toyota Industries has adopted an audit & supervisory board
system. Two full-time audit & supervisory board members
and two outside audit & supervisory board members attend
meetings of the Board of Directors to monitor the executionof duties by directors. At the same time, meetings of the
Audit & Supervisory Board are held once a month to discussand make decisions on important matters related to auditing.
The full-time audit & supervisory board members carryout auditing by attending primary meetings and receiving
reports directly from directors. Additionally, we have assigned
dedicated personnel, while audit & supervisory board
members monitor the legality and efficiency of management
through collaboration with independent auditors and the Audit
Department.

Furthermore, based on the Financial Instruments andExchange Law (so-called Japanese Sarbanes-Oxley Act(J-SOX)), we have established and appropriately operated aninternal control system to maintain the reliability of financial
reporting. The system’s status and progress are reviewed by
the Audit Department and audited by independent auditors.
We determine which Toyota Industries Group companies fallwithin the scope of J-SOX based on the degree of impact on
the reliability of financial reporting. We determined that ourinternal controls over financial reporting as of the end of fiscal
2018 were effective, and accordingly, submitted an Internal
Control Report in June 2018. The report was reviewed byindependent auditors and judged fair in their Internal Control
Audit Report.

45

Corporate Governance■ Activities in China 
In China, compliance officers from seven bases attended theCompliance Officer Conference to promote the creation anddissemination of educational materials for use at all bases in
China and to share the progress in educational activities ofeach company. We also held labor management seminars for
managers of each company as an ongoing effort to increase
legal knowledge and compliance awareness of employees.

Activities in the Toyota Industries GroupWe have set up compliance committees at subsidiaries inJapan and appointed compliance officers at subsidiaries
outside Japan in our efforts to promote autonomous
activities in respective communities in collaboration with theCompliance Subcommittee. In fiscal 2018, we continued tocarry out activities in line with local needs.

n Activities in Asia, Oceania and South America We have been providing compliance officer training withthe aim of upgrading compliance activities. In fiscal 2018,
we held the Asia Oceania Compliance Conference with theparticipation of top managers and compliance officers fromseven bases within the region. Through the conference, we
work to deepen an understanding regarding the leakage ofconfidential information, prevention of bribery and response toreports made by whistle-blowers.

* Lesbian, gay, bisexual and transgender: Individuals having different sexual orientation orgender identity

Asia Oceania Compliance Conference

Implementation Structure
Toyota Industries has set up the Information Security
Subcommittee (led by an executive in charge of the General
Administration Department) as a subordinate organization
to the CSR Committee to promote proper management ofconfidential information, taking appropriate actions against therisk of leakage of confidential information and complying withlaws such as the Unfair Competition Prevention Act and the
Act on the Protection of Personal Information.
To thoroughly implement the initiatives adopted by thesubcommittee, we appoint information security managers*1
and information security administrators*2 at each department.
We strive to raise awareness about information security
among their staff by holding workplace meetings andconducting self-checks regarding their information security
practices.
In fiscal 2018, to counter risk for leakage of confidential
information we implemented the following initiatives.
(1)	Verify the status of confidential
information management at
each workplace	On-site inspection at andimprovement guidance toEngineering and Production
Engineering departments
Incident/accident response trainingn Activity Examples

Compliance officer
in Europe (TMHE)

Compliance officer
in China (TIMC)

Andreas Lundh

Europe:37companies

Activities up to fiscal 2017

Zhu Lingling

North America:

China:

20companies

7companies

Compliance officer
in North America(TINA)

Sheena Seger

Japan:

31companies
Compliance officer
in India (TIEI)

Amit Jain

Asia, Oceania and South America:

13companies

New activities in fiscal 2018

TINA: Toyota Industries North America, Inc.
TMHE: Toyota Material Handling Europe AB
TIMC: Toyota Industries Management (China) Co., Ltd.
TIEI: Toyota Industries Engine India Private Limited46

Toyota Industries Report 2018

Activities by Toyota Industries• Rank-based group education• Restrictions on taking photographs on company premises• Monitoring of email correspondence• Restricting the copying of electronic data on recording media• Attaching a security cable with a lock to all PCs toprevent unauthorized removal off the premises• Requiring employees to sign a confidentiality
agreement and checking the history of electronic
data being taken off the premises upon retirement
Activities in collaboration with other Toyota
Group companies• “Information Security Awareness Month” activities
in May and October to raise employee awarenessand conduct auditing by checking off-the-premises“Information Security
removal of personal computers and recording
Awareness Month”
postermedia, etc.

• Verifying the status of confidential information management at
Engineering and Production Engineering departments• Extending the target group of participants for incident/accident
response training• Providing training on response to targeted attacks through e-mail, etc.

Risk Management
Basic Perspective
Based on the Basic Policies for the Establishment of anInternal Control System in compliance with the Companies
Act, Toyota Industries is working to strengthen regulations
and a structure to promote risk management. We regard
the following aspects as the basics of risk management andimplement initiatives accordingly.
(1)	Incorporating measures to prevent and reduce potential
risks into daily routines and following up on the progress of
implementation(2)	Ensuring quick and precise actions to minimize the impact
on business and society when a risk becomes apparent

Implementation Structure
Business divisions and other departments at the Head Officedevelop and promote annual action policies that integrate
measures to prevent and control risks related to quality, safety,
the environment, personnel, export transactions, disasters
and information security. Progress is assessed and followed
up by each functional management entity such as the CSR
Committee and the Environmental Committee. At the sametime, functional departments at the Head Office such as
those responsible for quality, safety and the environment
formulate rules and regulations and create manuals from aGroup-wide perspective, including consolidated subsidiaries.
By confirming and following up on the progress throughoperational audits and workplace inspections, they provide
support for raising the level of risk management at eachbusiness division and consolidated subsidiary.
We have also formulated the Crisis Response Manual,
which defines our initial response to a problem or a crisis.
This manual lays out basic rules to be followed when a risk
becomes evident and a problem or crisis occurs. The aim isto ensure quick reporting to top management, perform an
accurate assessment of the impact on society and businessactivities and minimize damage through appropriate actions.
The content is reviewed and revised as deemed necessary
in response to changes in businesses and the surrounding
environment.

Financial Section /Corporate Informationn Compliance Committees (in Japan) and Compliance Ofﬁcers (outside Japan) (As of March 31, 2018)*1: Head of each department*2: A person within the department, appointed by the head

Promotion of
ESG Initiatives

n Activities in Europe 
In Europe, we held the Compliance Conference with 30
companies to share the progress of and issues in compliancepromotion activities of each company and discuss future
activities. In response to the EU General Data Protection
Regulation (GDPR) enforced on May 25, 2018, thesecompanies are accelerating their efforts to protect personal
information.

We recognize that the personal information of customers,
employees and business partners as well as information
concerning our technologies and sales activities are assetsthat need to be protected. Accordingly, we are making ourutmost efforts to safeguard confidential information andstrengthen its management as one of the CSR areas.

Strategies andBusinessesn Activities in North America We held the Compliance Officer Conference in North America
with the participation of compliance officers from 21 bases toshare information on the latest topics, including response toLGBTs* and unlawful possession of controlled substances,and discuss action items for the fiscal year. After the
conference, these 21 bases have been conducting activities ina coordinated manner.

Basic Perspective(2) Incident/accident response training	Increasing practical response capabilities by extending
the scope of the training from the General Administration
Departments of the Head Office and each plant toEngineering, Production Engineering and Purchasing
departments
Our consolidated subsidiaries in and outside Japan
also appoint respective information security managers andinformation security administrators. We have also developed
common guidelines concerning management of confidential
information, which have been distributed among thesesubsidiaries, and follow up on their activities on a periodic
basis in our efforts to raise the level of confidential information
management throughout the Toyota Industries Group.
Company Introduction

n Activities in Japan 
We held a conference of compliance personnel from 31
consolidated subsidiaries in Japan to share the latest
information on applicable laws and conducted a case study of
responses to reports made through our compliance hotlines
as an effort to expand relevant knowledge and response
capabilities.

Management of Confidential Information

47

Relationship with
Our Stakeholders

Response to Possible Major Earthquake
We consider the impact of a major earthquake as one of
the most significant risks and have accordingly formulated abusiness continuity plan. Based on the three basic policies of
placing maximum priority on human life, placing top priority on
the recovery of local communities and ensuring the quickest
possible recovery, we are making Company-wide efforts inthree relevant areas, specifically, “precautionary, pre-disastermitigation,” “initial response to be followed immediately after
the disaster” and “restoration of production.”

disaster response, we conduct training in which employees
collect information on damages to both inside and outside thecompany premises, swiftly make decisions and disseminate
these decisions throughout Toyota Industries.
We are setting up a system to ensure prompt responseeven during nighttime or on a weekend or holiday by selecting
members from the functional departments who live close to
the Head Office.

Adhering to a quality first approach, Toyota Industries practices monozukuri (manufacturing) that quickly responds to thediverse, ever-changing needs of customers.

Disaster Prevention Response Headquarters (Established in Kariya Plant)

e-Lab (information
systems headquarters)

Remote Sites

Company dormitories
Company resort
facilities

2. | Training at Plant Response Headquarters
In fiscal 2018, we placed the focus of training on “cultivating
personnel capable of responding to an emergency andreinforcing the response structure” and provided appropriate
training to the head (plant manager) and members of each
Plant Response Headquarters. By conducting training
repeatedly, we intend to create a structure under which every
member understands his or her role and responds to thesituation flexibly.

Affiliated Companies

Suppliers

Tokyo Office
Toyota L&F Customer
Center Tokyo
Toyota L&F Customer
Center Osaka
TMHG Training Center(Handa)Efforts to Cultivate Personnel to Engage in Disaster
Prevention Activities
1. | Training at Disaster Prevention Response| Headquarters
As one important role assigned to the Disaster Prevention
Response Headquarters that oversees Company-wide

n Types of Quality Sought by Toyota Industries
Determining whether to stop operations
and how to provide support activities

Discussing a restoration plan

3. | Training for Restoring Plant Operationsa) Power Restoration Drill
Each plant has developed procedures to restore power
supplies, including electricity and gas, which are essential inrestoring production activities. Each plant conducts genchi
genbutsu (go and see for yourself) training on a periodic
basis. Through the training we are identifying problems andmaking improvements to step up our efforts to ensure quick
restoration activities.
b) System Restoration Drill
The e-Lab, responsible for managing Toyota Industries’ dataservers, has created procedures to restore critical data after adisaster. We conduct restoration drills jointly with Toyoda High
System, Incorporated, a consolidated subsidiary engaged
in development and operation of information infrastructuresand systems, and work to improve our readiness for quick
restoration.
4. | Training for Identifying Disaster Damage
We repeatedly conduct drills jointly with our affiliatedcompanies and business partners in order to familiarize themwith the use of IT tools to quickly identify the damage statusduring a disaster.

Quality levels that
customers truly
expectProduct quality●Safety●Eco-friendliness●Durability●Ease of use

Designquality●Brand strength●Corporate image●Sales●Service●Logistics●Workmanship

Manufacturing capabilities

design review (DR), which allows a product to proceed to thenext stage only when a responsible business division head
examines and approves whether the product has reached thetarget quality level.

Activities Based on the Quality Guidelines
Quality forms the basis of our operations and is essential inattaining the goals of our Vision 2020. As such, we formulated
our Quality Vision 2020, which defines our philosophy inensuring quality.
Quality Vision 2020
All members in the Toyota Industries Group ensure
quality first and build in quality with ownership at
their own workplaces and positions in an effort tocontinuously supply attractive products/services that
anticipate global customers’ needs.
To achieve the goal of this vision, we issue the Quality
Guidelines, which identify priority quality-related issues tobe implemented in each fiscal year, to all production basesin and outside Japan and engage in quality assurance
activities accordingly. The implementation status of theseguidelines is reviewed by top management at the Quality
Functional Meeting chaired by the head of the Production
Headquarters*1 for identifying additional issues and devisingcountermeasures. Issues raised are followed up at meetingsof the Company-wide Council of Heads of Quality Assurance
Departments chaired by the head of the Quality Control
Department*1. The president also checks on the outcome ofthese activities through genchi genbutsu inspections. In thisFinancial Section /Corporate Information

Starting from fiscal 2017, we have been undertaking
enlightenment activities for employees and their families as ameasure to promote disaster prevention and avoid disasterinflicted damage at home. Specifically, we encourage themto take three actions: preventing the overturning of furniture;
deciding a way to account for family members in a disaster;and stockpiling emergency goods, food and other necessities.
Up until fiscal 2018, our activities had targeted personnel incharge of promoting disaster prevention and members of
initial response and production restoration teams. The scope
was extended to all employees in fiscal 2019.

Carrying on the spirit of founder Sakichi Toyoda, Toyota
Industries strongly believes that quality is the lifeblood of acompany. Focusing on quality first and ensuring customer
safety and reassurance are our most important responsibilities
to our customers and form the basis of our approach to CSR.
Toyota Industries strives to maintain and improve thetotal quality of our corporate activities, which encompasses
not only “product quality” but also “marketing quality” and“management quality.” “Product quality” is embodied in
the safety, eco-friendliness, durability, ease of use andworkmanship of our products, while “marketing quality” entails
excellent sales and service in addition to these attributes and“management quality” further enhances our overall corporate
image and brand strength in terms of all of these attributes.

ent
em
nag
lity
g
Ma lity
qua
turin
qua
ufac
ting
Man lity
r ke
Ma
qua

Promoting Disaster Prevention at Home and Related
Enlightenment Activities“A product should never be sold unlessit has been carefully manufactured andfully tested in the commercial trial, withcompletely satisfactory results.”

Promotion of
ESG Initiatives

Kariya Plant
Obu Plant
Kyowa Plant
Nagakusa Plant &Morioka Works
Takahama Plant
Hekinan Plant
Higashichita Plant
Higashiura Plant
Anjo Plant

Educational Sites

Disaster response meeting

Strategies andBusinessesn Disaster Prevention Structure

Reviewing policies on resumption ofoperations and how to return home

Company Introduction

We strive to reinforce our disaster prevention structure toenable smooth transition from the initial response stage to the
production restoration stage.
The Disaster Prevention Response Headquarters, led by
the executive vice president and consisting of representatives
from the functional departments at the Head Office, is
responsible for collecting information from plants and otherrelevant parties and making Company-wide decisions basedon the information collected.

Key Facility

P49–50
P51
P52
P53–56
P57–58Relationship with Our Customers

Disaster Prevention Structure

Plant Response
Headquarters

Relationship with Our
Stakeholders

Relationship with Our Customers
Relationship with Our Business Partners
Relationship with Our Shareholders and Investors
Relationship with Our Associates
Relationship with Our Local Communities“We should express our gratitude to ourcustomers by providing them our best
quality products.”
Under our “Customer First” philosophy, Toyota Industries
undertakes product development that meets customer
expectations by capturing market needs and understanding
how our products are actually used by customers.
At Toyota Industries, development of a new product entails
defining specific goals to incorporate quality in every stage
from product planning and design to production preparation,
production, sales and after-sales services. We perform a
Genchi genbutsu inspection by the president

48

Toyota Industries Report 201849

Relationship with
Our Stakeholders

way, we are working to create a corporate culture that values
the 3Gs: genchi (actual site), genbutsu (actual thing) andgenjitsu (reality).
*1: As of March 31, 2018n Quality Assurance Activities Based on the Quality Guidelines
Implementing
Company-wide
guidelines

Checking and identifying issues ofCompany-wide quality status and progressin implementing the guidelines
Quality Functional
Meeting

Genchi genbutsu
inspections by
the president

Company-wide Council of Heads of
Quality Assurance Departments

Quality Vision 2020
•Quality roadmap
A

P

PDCA*2cycle D

Quality Guidelines

C

Quality Guideline 1
Product development

Quality Guideline 2
Prevention of occurrence
and recurrence

Quality Guideline 3
Quality assurance atbusiness partners

Quality Guideline 4
Human resources
development

Toyota Industries provides systematic quality education to
all employees to help them acquire quality assurance skills
needed in actual operations. To nurture human resources
who think and act on their own and create a better workplacethrough all-employee kaizen activities, we are encouraging
employees to use their creativity and ingenuity to propose
kaizen ideas and promoting quality control (QC) circle
activities.
To date, we have received 13 awards for employees’
creative ideas in the Creativity category in the Commendationfor Science and Technology by Japan’s Minister of Education,
Culture, Sports, Science and Technology. We have alsopresented the results of our QC circle activities at QC circle
conventions both internally and externally and received
multiple awards for our accomplishments.

TOPIC*2: PDCA (Plan, Do, Check, Act)

Since improving the quality of our products requires concerted
efforts with our business partners in and outside Japan, weare strengthening joint quality assurance activities with major
business partners.
In each annual quality audit, we determine priority
areas, confirm the improvement status of the previously
identified deficiencies and provide quality education on
items that should be reinforced in order to cultivate a deeper
understanding of kaizen (improvement).
In fiscal 2018, we held quality control training sessions
for the genchi genbutsu sharing of best practices ofquality control activities as part of efforts to attain mutual
improvement of each business partner’s quality control
personnel.
These activities enable our business partners to attain thelevel of quality assurance required and establish a culture tofoster quality assurance on their own.

We provide fair and equal opportunities to all potential
business partners. We comprehensively evaluate our business
partners based on such factors as quality, price, adherence
to delivery times, technological capabilities and management
information. We also assess their initiatives for safety, theenvironment and compliance as we strive for the timely andstable procurement of excellent products at lower costs
based on fair business transactions.

Co-Existence and Co-Prosperity Basedon Mutual Trust
We work hard to realize co-existence and co-prosperity withour business partners based on mutual trust. Every year, wehold procurement policy meetings and top manager seminars
for major business partners to facilitate mutual understanding
and cooperation. In addition, we provide such programs as
quality management and technical skills training, guidance
directed toward kaizen at their production sites and safety andhealth education throughout the year.

Reducing Environmental Impact throughEnvironmentally Preferable Purchasing
We aim to procure parts, raw materials
and equipment from business partners
that give sufficient consideration to theenvironment.
In the sixth edition of ourEnvironmentally Preferable Purchasing
Guidelines, we added the aspirationsin 2050 of our Environmental Vision.
Accordingly, we have been strengthening
environmental management in our entire
Environmentally Preferable
Purchasing Guidelines
supply chain and undertaking relevant
initiatives throughout the product lifecycle. In fiscal 2018,
we also added to the list of substances managed under
the Environmental Management Information System (EMIS)
descriptions of laws and regulations serving as a legal basis
and the impact on health to clearly highlight the importance of
paying attention to the environment.

Local Procurement for Good Corporate
Citizenship
In view of increased local production outside Japan, we
promote procurement from local business partners throughconsolidated subsidiaries in order to contribute to the local
community as a good corporate citizen.

Promoting Human Resources Development
We proactively provide education to enhance procurement
knowledge both internally and externally. In fiscal 2018, we
Global QC Circle Convention

50

Toyota Industries Report 2018n Participants of Japan’s
provided training on Japan’s
Subcontracting Law Seminar
Subcontracting Law mainly
Affiliated companies
for affiliated companies,(Persons)
Toyota Industries
1,200
with seminars attended
1,000
by 300 participants. We
also work with Hoeikai, an
800
organization consisting of our600
business partners, to provide
400
support to strengthen the
200
management platforms of0
member companies through(FY) 14 15 16 17 18
Toyota Production System(TPS) activities in manufacturing and QC circle activities.

Efforts toward Future-Oriented Trade
Practices
To realize fair trade and improve added value across the entire
supply chain, Toyota Industries and its affiliated companies
totally switched to pay in cash to subcontracting business
partners in fiscal 2018. We held a briefing in May 2017 to
explain the change to our major business partners. The
scope of our business partner hotline that was established
to receive inquiries fromour business partners,
namely Hoeikai members,
was also extended to othercompanies. Through these
efforts, we have been
making steady progress
toward becoming a“company on which society
Business partner briefing
places greater trust.”

Business Continuity Plan (BCP) Activities
for Possible Major Earthquake
In further promoting our BCP activities, we are making
concerted efforts with business partners to reduce associatedrisks by implementing specific measures. As one example,
we provided production restoration workshops (tabletop
exercises) again in fiscal 2018 mainly to our affiliatedcompanies and Hoeikai members. Designed to identify issues
in advance, the workshops were effective in formulatingproduction restoration measures corresponding to each site
and its current status.
In response to a growing
need for quick identificationof damage in disasters
other than earthquakes,
we will add wind andflood disasters, fires andexplosions to the scope of
our BCP activities.

Financial Section /Corporate Information

Providing Support to Business Partners

Our production bases outside Japan also promote kaizen
efforts and human resources development through QC circle
activities. We help them undertake activities corresponding totheir respective environments by training QC circle instructors
and visiting them to give hands-on instructions for promoting
QC circle activities. As a venue for presenting activity results,
we hold the Global QC Circle Convention every year since2015 and provide workshop sessions to raise skills. We haveheld a regional convention in China for two consecutive years
and plan to expand regional activities in the future.
To reinforce our foundation for quality assurance, we arepromoting the development of human resources and an open
workplace based on the belief that manufacturing starts withnurturing excellent personnel.

Fair Business Transactions Based on an
Open Door Policy

Promotion of
ESG Initiatives

If a defect is found in a product after its launch, the Quality
Assurance Department of the responsible businessdivision takes the lead in swiftly implementing required
countermeasures. At the same time, we examine and identify
the cause of the defect both from the technological andprocess aspects and revise our new product development
process as necessary. Through these measures, we strive tothoroughly avoid the recurrence of the defect in subsequentmodels.
Additionally, we make efforts to prevent the occurrenceof defects in all products we develop and manufacture in
the future. As an example, we provide education not only
to employees of Toyota Industries but also to our business
partners and affiliated companies in and outside Japan withan eye to preventing defects by improving work proceduresand processes.

Toyota Industries encourages open procurement and seeks co-existence and co-prosperity with our business partners(suppliers) based on mutual trust. We also facilitate environmentally preferable purchasing, local procurement, humanresources development, fair trade and disaster prevention activities for a possible major earthquake.

Strategies andBusinesses

Preventing Occurrence and Recurrence ofDefects

Two QC circles of theCompressor Division wererecognized for their contribution
to more active and better QC
Award ceremony of the QC Circle
Kaoru Ishikawa Award program
circle activities and received
an encouragement award under the QC Circle Kaoru
Ishikawa Award program run by the Union of Japanese
Scientists and Engineers. This is one of the mostpremier awards given only to some 40 out of more than
50,000 circles in Japan every year, and it was the firsttime that Toyota Industries received two awards in thesame year. We have also received a gold prize in the
final round of the competition held in the Tokai Regional
Chapter. As seen above, our activities have beenyielding positive outcomes.

Relationship with Our Business Partners

Company Introduction

Quality assurance activities atall bases in and outside Japan

Promoting Human Resources andWorkplace Development

Production restoration workshop

51

Relationship with
Our Stakeholders

Relationship with Our Shareholders and Investors

Relationship with Our Associates

We aim to obtain an appropriate company valuation in stock markets through timely and appropriate information disclosure
while promoting good communications with shareholders and investors.

Our ultimate goal is to create safe and secure workplaces for everyone, where each and every associate can exercise theirdiverse potentials and play active roles.

Basic Perspective

Building a Safety-Oriented Culture That
Aims for Zero Industrial Accidents

General Shareholders’ Meeting(Persons)
136th

137th

138th

139th

Shareholders’ meeting

396

348

418

475

501

Plant tour

185

144

163

198

208

Investor Relations Activities
For institutional investors and securities analysts, ourmanagement conducts quarterly briefing sessions to explain
our financial results, including business performance, progressachieved at each business division and future initiatives.
In fiscal 2018, we conducted activities to help them better
understand the effect of the International Financial ReportingStandards (IFRS) on our business performance, which we
started applying from the end of fiscal 2017. In addition toaccepting individual interviews, we hosted an information
session for our Car Air-Conditioning Compressor Business.
The session provided an opportunity to appeal the business’s
strengths in terms of both development and production
aspects, as we explained our business policies, presented
development-related initiatives through a tour of an R&D
facility and showcased our way of monozukuri based on agenchi genbutsu approach.
As for institutional investors outside Japan, we visit someof them to explain our management policies and growth

52

Toyota Industries Report 2018

•Quarterly financial results briefings •Individual interviews/visits•Small meetings •Teleconferencing •Business information sessions•Facility tours •Issuing/delivering Toyota Industries Reports
For institutional investors outside Japan•Individual interviews/visits •Teleconferencing•Participation in conferences hosted by securities companies•Issuing/delivering Toyota Industries Reports
For individual shareholders and investors•Company information sessions •Company-hosted plant tours•Issuing/delivering notice of general shareholders’ meeting•Issuing/delivering business reports

Returning Profits to Shareholders
Toyota Industries regards ensuring shareholder benefits as
one of the most important management policies.
Accordingly, we strive to continue paying dividends atthe consolidated dividend payout ratio of roughly 30% andmeet the expectations of shareholders upon comprehensively
taking into consideration such factors as business results anddemand for funds.
For fiscal 2018, Toyota Industries increased annual cash
dividends by ¥25.0 over the previous fiscal year and paid
annual cash dividends per share of ¥150.0 (interim cash
dividend per share of ¥70.0 and year-end cash dividend pershare of ¥80.0).

Managers and supervisors observing safety culture activities and work procedures at other plants

As basic safety culture activities, we encourage point-andcall practices within plants to check safety, instruct associates
to use hand rails when going up or down stairs and let
associates remind each other to mutually raise awareness.
Through these activities, we have increased opportunities tohold safety dialogues within Toyota Industries, thus making
steady progress toward zero industrial accidents.
In fiscal 2018, we continued to record no accidents
caused by production facilities. However, as there was

Financial Section /Corporate Information

135th

For institutional investors and securities analysts in Japan

Promotion of
ESG Initiatives

n Number of Participantsn Major IR Activities

In accordance with our fundamental policy of “creating people
capable of autonomously maintaining occupational safety
and health,” Toyota Industries strives to prevent industrial
accidents and occupational disorders as well as realize better
work environments.
In fiscal 2018, we continued to promote primarily “activities
aimed at establishing a safety-oriented culture” and “safetymeasures from human, object and administrative standpoints
based on risk assessment.”
For a safety culture to firmly take hold, it is vital that
all associates, under the leadership of managers andsupervisors, engage in relevant activities with strong safety
awareness and a conviction that we can eliminate industrial
accidents. It is equally important that individual workplaces
identify their specific health and safety issues and voluntarily
plan, execute and sustain their own activities to reduce
industrial accidents.
For managers and supervisors, we provide an opportunity
to observe the workplaces of other plants to learn fromothers’ creative ideas in safety and health activities and raiseawareness. They in turn apply the insight to improve safety
activities in their own workplaces.

an accident involving injuries while walking, we recorded
the frequency rate of lost workday injuries of 0.03. We willcontinue to expand unfaltering safety initiatives to achieve
zero industrial accidents and raise the level of our mutual
enlightenment-based safety culture, in which associates
voluntarily remind each other.
Following an industrial accident at another company in2016, which involved an explosion in a heating furnace thatuses combustible gas, we conducted inspections on gasfired equipment used within the Toyota Industries Group.
Specifically, we performed checks on automatic ventilation at
the time of ignition, devices used to monitor individual gasfired equipment, operation of the dual automatic gas shutoff valves and the contents of operational manuals. As wemust rely on human eyes to check incomplete combustion
in a high-temperature furnace, we have started joint R&D
of a gas detector with a manufacturer. We are conducting
research on the effects ofhigh-temperature gas, dusts
and chemical substances on
the gas detector, which iscurrently in its trial stage. We
will continue to seek improved
safety measures that leverage
On-site inspection of detection performancethe latest safety technology.
Overseas, we continue to hold a health and safety regional
meeting, which was started in fiscal 2016, at bases in Europe
and North America. At the meetings, these bases work jointly
to facilitate an understanding of how to apply cause analysis
methods to prevent a recurrence of an industrial accident
and how to ensure safety in logistics operations while using
vehicles within a plant.
We aim to maximize the effectiveness of our recurrence
prevention measures by creating a manual to be shared
among the bases, which compiles the cause analysis results

Strategies andBusinesses

We hold our annual general shareholders’ meeting early
to avoid the date on which many companies hold theirrespective shareholders’ meetings so that more shareholders
can attend. We are further facilitating the exercise of voting
rights of our shareholders by allowing them to exercise suchrights via the Internet and by joining the electronic voting
platform for institutional investors.
We held our 139th General Shareholders’ Meeting on
June 9, 2017, in which a record-high 501 shareholders
participated. Following the general shareholders’ meeting, we
invited our shareholders for a tour of a plant that manufactures
our mainstay lift trucks to foster a better understanding of ourbusiness activities.

strategies. We also participate in conferences hosted in Japanby securities companies and hold individual meetings.
For individual investors, we hold company information
sessions mainly in regions in Japan where our bases arelocated to promote an understanding of our businessand management policies. Our Website also provides our
corporate history, overviews and technologies of eachbusiness as well as financial results in an easy-to-understandmanner.
Opinions and requests wecollect through various meansof communications withshareholders and investors
are fed back to executives
and relevant businessinformation session for thedivisions to reflect them in our Company-hosted
Car Air-Conditioning Compressor Businessand tour of an R&D facility (December 2017)
future business activities.

Company Introduction

Toyota Industries continually carries out timely, appropriate
and fair information disclosure for shareholders and investors.
In this way, we raise management transparency so that we
obtain an appropriate company valuation in stock markets.
We proactively provide not only information required under
disclosure laws and regulations but also information on ourmanagement policy and business activities. Also, we engage
in various investor relations activities to facilitate productive
dialogue with shareholders and investors.

n Frequency Rate of Lost Workday Injuries
(%)
1.60

Health and safety regional meeting at a base in Europe

1.20

Manufacturing industry

0.80

Manufacturers of transportation
machinery and equipment

0.40
0.00

Toyota Industries
(FY)

14

15

16

17

18

Good

(Source: Survey on Industrial Accidents, Japan’s Ministry of Health, Labour and Welfare)

Health and safety regional meeting at a base in North America

53

Relationship with
Our Stakeholders

for and measures taken in response to the past industrial
accidents.
We will continue to reinforce ties among bases within
Japan and among bases in each region, with the ultimate goalof establishing a health and safety culture at the highest levelin respective regions.

with a doctor for those wishing to do so and provided
improvement support as necessary to individual workplaces.
As a new initiative and as a means to feed back the results
to workplaces, we started operating an IT-based workplacecheck results viewing system that allows the users to performa precise search of results and tips for improvement.

Initiatives for Health Management andImprovementn Improving Mental Health Support Systems(Introducing a Stress Check System)

Participants of age-based health education(2,445 persons)

Stop smoking enlightenment events•World No Tobacco Day: One-day no smoking (May 31)•No Smoking Days: Half-day no smoking (for nine days)
Participants of stop smoking campaigns (held jointly with healthinsurance association)(12 persons)Age-based health education

As part of mental health support activities, we have inplace a system to offer early consultation through a healthrelated hotline. Other activities include upgrading our selfcare/line-care education to prevent new cases of mental
health problems and operation of a return-to-work support
program for persons on long-term leave for prevention of
relapses. We have successfully achieved positive results
through these activities.
Under the stress check system introduced in fiscal
2017, we again conducted a check on all associates
in fiscal 2018. As in fiscal 2017, we fed back the check
results to all participants and workplaces with suggestions
for improvement. We also set up an individual interview

54

Toyota Industries Report 2018

Providing information on mental healthEarly
detection/
early
resolution

Mental health education

Preventive
measures

Improving support via the introduction of a stress check system
Encouraging associates toUnderstanding theRaising awareness of causes of stress in the
be more aware of theirhealth and offering advice health-related hotline workplace andon health improvement
improving working
measuresenvironments<Consultation system>
Interviews as• Industrial healthpart of healthstaff (in-house)
Workplace check
checks• External institutions
results viewing system

Preventing
relapses

Return-to-work support

For these efforts, Toyota Industries was recognizedin the large enterprise category (White 500) of the 2017
Certified Health and Productivity Management Organization
Recognition Program jointly promoted by Japan’s Ministryof Economy, Trade and Industry and the Nippon Kenko
Kaigi. We will continue to undertake activities to promote
both mental and physical health and create a workplace thatenables all associates to work actively.

Enhancing Team Strength
Toyota Industries believes that it is essential to enhance teamstrength so that each associate can work with vitality and theCompany can achieve sustainable growth.
We believe that team strength is made up of “technicalskills” that form the basis of manufacturing operations,“management skills”
to make maximum
Management Skills
Technical Skills
use of technical
TPS, QC, SQC, etc.
Expertise/skills/know-how
skills and a “spirit
Ability to identify andresolve issuesof harmony” that
Ability to merge multiple
Team Strength levels of skill
supports both. While
Leadership
further enhancing
To pursue improvements
our team strength,
thoroughly and continuously
we are striving toSpirit of Harmony
extend and hand
Teamwork
it down beyond all
Well-roundedhumanitybusiness domains,
generations andgeographic regions.
Technical Skills
To develop skills to support manufacturing, the Technical
Learning Center, one of our training facilities, plays the central
role in associate education, offering basic skills training at theTechnical Training School and facilitating efforts to enhance
the skills of young technical staff through in-house skills
contests. We also work to cultivate highly skilled specialists
through participation in the national and international skills
competitions.

*1: Skills competition for determining Japan’s top
young engineers

at the 44th WorldSkills Competitionn Number of Medals Won at the National Skills Competition
FY2014FY2015FY2016FY2017FY2018

1

1

1

1

1

Gold medal
Silver medal

2

3

2

3

4

Bronze medal

3

1

3

1

1

Total

6

5

6

5

6

Management Skills
We conduct TICO Business Practices (TIBP) training targeting
associates in administrative and engineering fields, withthe aim of mutually sharing the thinking and values that
the Company gives importance to, as well as to improve
our associates’ problem-solving capabilities. TIBP training
programs are also provided at subsidiaries outside Japan in
our efforts to raise the level of management skills throughout
the Toyota Industries Group.
Spirit of Harmony
We are creating a bright, energetic and caring work
environment that fosters a dynamic workforce and allows
every member to demonstrate his or her capabilities both as
an individual and as a team. We are proactively encouraging
communication not only during work hours but also throughsocial gatherings, sports days, summer festivals, Group-wide
ekiden long-distance relay races and cheer squads for various
sports events.

Promoting Active Roles of Female Associates
We have been formulating plans to harness a more diverse
range of human resources and continuing to carry out
activities since 2008.
We have been working to enhance support systems
through such measures as introducing a shorter work-hoursystem for child care and a telecommuting system. As aresult, the average length of service increased overall inadministrative and engineering positions, with a significant risefor female associates. In addition, by introducing “a returnto-work (“welcome-back”) system,” which allows associates
who have left work to care for children and family members or
to accompany their spouse for a job transfer to get reinstatedunder certain preconditions, we provide an environment for
associates to work at Toyota Industries for longer years withpeace of mind.
In terms of measures to promote more active roles forfemale associates, we have set the target of increasing theratio of female graduate recruits to 40% in administrative
positions and 10% in engineering positions, and tripling thenumber of female associates in managerial positions by
the year 2020 compared with 2014, and intend to step up
activities to achieve our goal.
In 2015, we set up a project to promote more active roles
for female associates, comprising 11 males and females
from different departments. This project was key for theidentification of issues and formulation of policy proposals
in promoting the increased active roles of female associates
through discussions and exchanges among project members
and stakeholders. The results of these discussions formed
the basis for the development of a Company-wide action planin clarifying the initiatives for this project. In carrying out then Initiatives for Promoting Active Roles of Female Associates~ FY2010

FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018Enhancing support systems•Extending the period of child care leave•Introducing a leave system to allow •Introducing a shorter work-hour system for child careparental care of children with illnesses•Establishing on-site day care center•Introducing a “welcome-back” system*2•Expanding telecommuting options•Introducing a telecommuting system •Installing delivery lockers

Cultivating corporate culture•Project for promoting active roles•Female associate exchange meetings•Pre-maternity leave seminars
of female associates
among 6 Toyota Group companies•Lectures by male role models•Message from president •Seminars for female associates inmanagerial positions•Opening a Diversity Navi page on the intranet•Holding exchange meetings and lectures to share experiences of female associates in balancing work and family

Increasing the ratio of female associates•Starting to recruit main career track female associates (for engineering positions in fiscal 1987
and administrative positions in fiscal 1997)

Financial Section /Corporate Information

Participants of walking events (held jointly with health insurance
association)(5,061 persons)Workplaces

Promotion of
ESG Initiatives

Persons having completed guidance program on prevention oflifestyle diseases(1,056 persons)Individuals

We are implementing a variety of measures to create work
environments where a diverse range of human resources canfully exercise their capabilities. These include promoting activeroles of female associates, supporting the employment of
persons with disabilities and creating an environment in which
older associates can work more actively.

Strategies andBusinessesn Major Health Promotion Activities in Fiscal 2018

Objective

Establishing Work Environments Where
Diverse Human Resources Can Play
Active Roles

Company Introduction

As a task for the medium term, we are promoting healthimprovement of associates, mainly focusing on preventionof lifestyle diseases and mental health support activities, tocounter risks associated with aging and greater stress.
For prevention of lifestyle diseases, we conduct periodic
age-based health education for all associates. We also feedback to associates the results of an annual health checkup
and measurements conducted on the same day, including
physical fitness, body fat percentage and amount of fat
around internal organs, along with advice to improve lifestyle
habits. Our health checkup is designed to provide motivation
for better health by letting associates think about their healthover the course of the one-day program.
For preventing and ameliorating symptoms of metabolic
syndrome, we provide health promotion guidance toassociates with mild obesity or who are slightly overweight, in
addition to specific health guidance required by the Japanese
government. By doing so, we encourage associates toimprove lifestyle habits early on.

At the 55th National Skills Competition*1 held in 2017, theToyota Industries team won one gold medal in the “structuralironsmith” category and received prizes in various othercategories, thereby attaining medals for the 17th consecutive
competition.
In addition, the Toyota
Industries team won a silver medalin the “welding” category at the44th WorldSkills Competition heldin Abu Dhabi, the United ArabEmirates, in 2017.
Junya Kasagi, who won a silver medal•Seminars for female students in science track•Increasing recruitment of female associates from non-engineering university departments

Cultivating career consciousness•Individual interviews with female assistant managers and their superiors•Formulating individual•Sending trainees •Training for career development for assistant managers
development plansoverseas

Setting targets for the number of female associates in managerial positions
Tripling the number of female associates in managerial positions by 2020
Toyota Industries [25 (2014); 31 (2017); 75 (target for 2020)]•“Eruboshi” certification*2: A system to enable reinstatement under certain preconditions

55

Relationship with
Our Stakeholders

n Action Plan

after returning to work; and a financial aid system for day
care costs adopted in April 2018 for associates working while
taking care of infants younger than one year old.
We are working to improve workplaces so as to offer
females a wider range of jobs and higher quality of work, andat the same time, to enable all associates working under time
constraints to fulfill their individual potential.
In January 2016, we were certified by the Aichi Labour
Bureau as a “Female-Friendly Company” and received“Eruboshi (“L Star”: L stands for Lady, Labour and Laudable)”certification from the Ministry of Health, Labour and Welfare in
October of the same year.
We will continue topromote activities aimed atcreating more active roles
for female associates.

Implementation
FY2016 FY2017

FY2018FY2019(1) Launch, message from president(Ongoing)

Refrigerated delivery lockers(1) Sending associates overseas for training
at an early stage in their careers(2) Career training and interviews forfemale assistant managers

Employment of Persons with Disabilities
We respect the idea of people with and without disabilities
working together and sharing life and work values. Under thisbasic policy, we continue to employ persons with disabilities
every year. They are assigned to a variety of sections andwork with other members to perform their designated tasks.
In fiscal 2018, the ratio of associates with disabilities on a
non-consolidated basis was 2.37%.

(1) Expanding telecommuting options(2) Establishing satellite offices(3) Installing refrigerated delivery lockers

n Average Service Years by Male and Female Associates(Administrative and Engineering Positions, Non-Consolidated)Male■ Ratio of Associates with Disabilities (Non-Consolidated)

Female(%)
2.4

Based on “Respect for Others” as described in
our Basic Philosophy, we strive to fulfill our role
as a good corporate citizen in every region where
we do business and actively engage in social
contribution activities to realize an enriched andhealthy society. In our activities that emphasizesocial welfare, youth development, environmental
protection and community contribution, we not
only provide cooperation and support throughpersonnel, facilities, funds and know-how but
also strive to closely connect with participants. To
foster employees’ awareness of their ties to society
and raise their interest in contributing to society,we make enlightenment efforts such as providing
a venue for volunteer activities and sharing
information on volunteer activities that encourage
the participation of all employees. Employee
associations* are actively undertaking various
activities to contribute to local communities, mainlyin the areas of supporting welfare facilities andprotecting the natural environment.
* Voluntary organizations formed by employees at each job level

Structure for Promoting Social
Contribution Activities
The CSR Committee deliberates on policies
of our social contribution activities while theSocial Contribution Group within the General
Administration Department at the Head Office takes
the initiative in carrying out activities.

Theme

Activities

SocialwelfareEvents to interact with persons with disabilities• “Walk Rally (orienteering),” harvest festival, festival
Support for welfare facilities• Support for charity bazaars at facilities by providing goods• Volunteer work for facility cleanup/repair/pruning/weeding• Support for sales of products from facilities for persons with disabilities by
providing opportunities to set up stalls• Volunteer visit to an elderly care facility (P57)
Donation to the American Cancer Society and participation in a walking
event (U.S.A.) (P58)
Providing livelihood support to care facilities for the elderly and persons
with mental and physical disabilities (India) (P58)
Providing food aid to economically challenged households during the Christmas
season (U.S.A.)

Support for Youth Invention Clubs•M onozukuri workshops for elementary school children during summer
vacations• Holding handmade kite-flying competitions• Running craft corners at local events
Youth
Providing plant-hosted environmental education to elementary school children
development
Holding mini concerts at elementary schools
Participating in a Company Open Day and holding a plant tour for young people(Germany) (P58)
Holding a painting and essay competition under the themes of “environmental
protection” and “health is wealth” (India)
Initiatives for forest conservation• Tree thinning activities for conservation of prefecture-owned forests
Environmental • Producing and donating benches made of thinned wood• Tree-planting activities for reforestation
protection
Conducting recycling activities for environmental protection (Argentina)(P58)

Community
contribution

2.3

15

2.2

10

Other

2.1

5

2.0

0

Mar. 31, ’98

Mar. 31, ’08

Mar. 31, ’180[Administrative position]

(FY)

14

15

16

17

(Persons)
40

(%)
50

(Persons)
150

(%)
40

40

30

30

30

100

20

20
20
10

50

10

10

0

0
(FY) 14

15

16

17

18

0

We focus on creating a better work environment for older
associates by adjusting the height of jigs in production lines
and modifying processes to compensate for deterioration ofvision so that they can work with less stress.
In addition, we hold “Seminars for an Active Life” forassociates reaching the age of 50 and 55 to give them an
opportunity to envision life and work for the next 10 years.

n Team Leader Associationn Number of Participants of Social
Contribution Activities of Employee
Associations

Social Welfare

Volunteer Visit to an Elderly Care Facility(Persons)

The Team Leader Association of the Hekinan Plant, comprising
young leaders of the manufacturing department, visited a local
elderly care facility and held a get-together event with elderly
people. Everyone enjoyed various recreation activities led by the
18 members of the association, including a flag game, a gameof passing a ball using a newspaper and singing songs withsome physical exercise.

1,500
1,000
500
0
(FY) 140(FY) 14

FemaleToyota Industries Report 2018

Holding charity concert
Support for international NGO through volunteer activities to collect spoiled
postcards and others
Periodic blood donation drives

Activity Example of Toyota Industries (Japan)

18

Creating a Work Environment for Older Associates[Engineering position]

Participation in local traditional event (Mando Festival)
Road cleanup activities in areas around plants
Activities to raise awareness for traffic safety
Crime prevention patrols
Providing support for activities such as local cleanup, garden maintenance andlandscaping (U.S.A.)
Conducting health checkups for mothers and babies and donating nutraceuticals(Indonesia)(Activities without country designation were conducted in Japan.)n Hiring of New Graduates (Non-Consolidated)

56

n Major Social Contribution Activities of Toyota Industries and Group Companies

15
Male

16

17

18

Ratio of females

Financial Section /Corporate Information(Years)20

Activities as a Good Corporate
Citizen

Promotion of
ESG Initiatives

Careersupport for(3) Role model exchange meetings
femaleassociates (4) Early return-to-work support(pre-maternity leave seminars)(5) Early return-to-work support(financial aid system for day care costs)
PromotingflexibleworkingpracticesPre-maternity leave seminar(Ongoing)

With a view toward creating an enriched and healthy society and ensuring its sustainable growth, we fulfill our role as a good
corporate citizen and actively undertake social contribution activities in every region where we do business.

Strategies andBusinesses

Changing
mindsets (2) Awareness seminar for managerial staff
amongmanagerial (3) Follow-up on individual development plans
staff and
(4) Getting spouses involved in pre-maternity
across allleave seminars
associates(5) Lectures by male role models

Relationship with Our Local Communities

Company Introduction

action plan, we specifically focus on the initiatives to change
the mindset among managerial staff and across all associates,
provide career support for female associates and promote
flexible working practices.
Since 2016, we have held a seminar for a cumulative totalof more than 1,200 managerial staff members who directly
engage in the mentoring and development of associates. The
aim is to promote an understanding of how female associates
regard their career paths as well as the environment in which
they are working and to raise awareness of human resources
development that takes into account their life events.
In order to create an environment to allow associates
who are balancing work and child/nursing care to workwith higher motivation and pursue career development, wehave enhanced our programs to support the early return
to work from a break in their career. Efforts include a fullday telecommuting system launched in October 2016;pre-maternity leave seminars started in December 2017 forassociates and their spouses to think about a way of working

A visit to an elderly care facility

15

16

17

18

Each employee association voluntarily and proactively
engages in social contribution activities, with the numberof participants remaining at a high level every year.

57

Relationship with
Our Stakeholders

Activity Examples of Consolidated Subsidiaries (Outside Japan)n U.S.A.

Social Welfare

Donation to the American Cancer Society and Participation in a Walking Event

Environmental Initiatives

Vision for Environmental Activities
Structure to Implement
Environmental Management
Environmental Impact Flow andEnvironmental Accounting
Sixth Environmental Action Plan
Establishing a Low-Carbon Emission Society

Environmental
Initiatives

The Raymond Corporation (Raymond)
Subsidiary producing warehouse trucks

Raymond’s employee volunteer team Ray of Hope raised donation funds through thesale of homemade bread and an in-house event called Jeans Day, and together withthe matching amount provided by The Raymond Foundation, donated a total of $3,725
to the American Cancer Society* to support its activities. Team members, pleased withthe outcome of their activities, participated in and livened up a PR walking event hosted
by the society.
Employees who participated in donation activities
for the American Cancer Society

Social Welfare

Toyota Material Handling India Pvt. Ltd. (TMHI)
Subsidiary engaging in sales and servicing of materials handling equipment

Global Environmental Commitment
As one tenet under our Basic Philosophy, Toyota Industries
works to contribute to regional living conditions and social
prosperity and also strives to offer products and services thatare clean, safe and of high quality. Accordingly, in February
2011, we established the Global Environmental Commitment,a specific environmental action guideline, to be shared andimplemented throughout the Toyota Industries Group. The
entire Toyota Industries Group will dedicate concerted efforts
to realizing a prosperous life in harmony with the naturalenvironment.
Aiming at realizing a prosperous life inharmony with the natural environment

An employee who participated in activities
to support a care facility

Low-carbon
emission society

TD Deutsche Klimakompressor GmbH (TDDK)
Subsidiary producing car air-conditioning compressors

Recycling-basedsociety

Environmental Management

Aspirations in 2050 and the Sixth
Environmental Action Plan
Plant tour held on Company Open Day

Environmental Protection

Toyota Material Handling Mercosur Indústria e Comércio de Equipamentos Ltda (TMHM-A)
Subsidiary engaging in sales and servicing of materials handling equipment

TMHM-A undertakes environmental protection activities every year under its
environmental management program. As one activity, TMHM-A provides recycling bins
to collect PET bottles and caps from employees. In fiscal 2018, TMHM-A sold about 80
kg of bottle caps collected and donated the proceeds through the All for Mia campaign
for the treatment of a girl in Argentina with an intractable disease.

An employee participating inrecycling activities

Following the 2015 adoption of the Paris Agreement, aninternational framework for action against climate change,
establishment of a low-carbon emission society has become
a global common goal. For Toyota Industries as well, theneed to take further proactive measures is growing as global
environmental issues continue to become of greater concern,with more people becoming increasingly conscious about theenvironment.
Under the circumstances, we have defined our aspirationsin 2050. The Global Environmental Commitment, which
represents our basic approach to environmental activities,
specifies the four action themes, namely, 1) establishing a
low-carbon emission society; 2) establishing a recyclingbased society; 3) reducing environmental risk and establishinga society in harmony with nature; and 4) promoting
environmental management.

(1) Establishing a low-carbon emission society⇒ Globally take on challenge of establishing a zero CO2emissions society(2) Establishing a recycling-based society⇒ Take on challenge of minimizing the use of resources(3)	Reducing environmental risk and establishing a society inharmony with nature⇒ Generate positive influence on biodiversity(4) Promoting environmental management⇒ Enhance consolidated environmental management andpromote enlightenment activities

As a milestone toward achieving our aspirations in 2050,
we have formulated the Sixth Environmental Action Plan, a fiveyear plan for the period from fiscal 2017 to fiscal 2021, andwill resolutely undertake activities in accordance with the plan.

TOPIC
Holding a Sustainability Conferencein Europe
Toyota Material Handling Europe AB (TMHE), a
consolidated subsidiary overseeing the materials handlingequipment business in Europe, held a Sustainability
Conference in September 2017, with participants fromthe production and non-production bases of the Toyota
Industries Group in the region. The aim was to share themedium- to long-term environmental and safety policies aswell as best practices of each company in these two areas.
The conference included workshops on various
topics, such as the progress of individual companies
toward achieving their CO2 emissions reduction targets,
medium- and long-term CO2 reduction initiatives, theimpact of sustainability on corporate competitivenessand response to chemical substances regulations.
Participants
proactively exchanged
information andengaged in animateddiscussion on current
and future relevant
issues.
Sustainability Conference in Europe

Financial Section /Corporate Information

Notional Diagram of Global Environmental Commitment

Conducting Recycling Activities for Environmental Protection

Toyota Industries Report 2018

Environmental risk
reduction
Society in harmony
with nature

Aspirations in 2050

Promotion of
ESG Initiatives

Youth Development

Participating in a Company Open Day and Holding a Plant Tour for Young People

58

P74

Strategies andBusinesses

TMHI donated blankets, wheel chairs, full electric medical beds and other items
to about 400 residents of a care facility for the elderly and persons with mental
and physical disabilities in northern India. Dealers in Bangalore, Chennai and Pune
also conducted social contribution activities locally by donating beds, sets of daily
necessities, large refrigerators and water purifiers to children living in care facilities for
persons with disabilities in addition to planting trees in the facilities’ gardens.

n Argentina

P68–69
P70–73We have defined our aspirations in 2050 and been promoting the Sixth Environmental Action Plan since fiscal 2017.

Providing Livelihood Support to Care Facilities for the Elderly and Persons with Mental and Physical Disabilities

TDDK joined a local Company Open Day and accepted many visitors to their facilities.
The event was part of an employment assistance program jointly hosted by an
occupational school and companies, and about 1,000 local children, students and theirfamilies learned about TDDK’s business by participating in a plant tour and sessions to
explain its products and technologies. The opening ceremony of the event was held at
TDDK, giving the guests, including the Prime Minister and mayors of Saxony as well as
corporate representatives, an opportunity to tour its plant and visit an area set up on
the company premises to showcase Japanese culture.

P61
P62–63
P64–65

P66–67

Vision for Environmental Activitiesn Indian Germany

P60

Establishing a Recycling-Based Society
Reducing Environmental Risk and Establishinga Society in Harmony with Nature
Environmental Management
Third Party Assurance ofEnvironmental Performance Data

Company Introduction* An NPO established in the United States in 1913, primarily engaging in three activities of providing information, supporting patientsand cancer research

P59

59

Environmental Initiatives

Structure to Implement Environmental Management

Environmental Impact Flow and Environmental Accounting

Positioning environmental response as one of its most crucial management issues, Toyota Industries is enhancing its
environmentally oriented corporate management on a global basis through the promotion of consolidated environmental
management.

In this section, we provide an overall picture of environmental impact resulting from our global business activities and report
the results of environmental accounting (environmental conservation cost, environmental conservation benefits andeconomic benefits of environmental conservation initiatives).

Promotion of Environmental Management
SystemEnvironmental Impact Flown Environmental Management Structure

Environmental Committee

PresidentInternal audit

Specialized committees•Team leader•Supervising auditors•Auditors

Product Environment Subcommittee
Production Environment Subcommittee

Chief environmental administrator

Company-Wide CO2Emission Reduction Conference

Admin office
Divisions
Materials Handling Equipment

Company-Wide CO2 Zero
Emissions Challenge Subcommittee

VehicleEngineCompressor

Division-Based
Promotion Committees

Electronics
Textile Machinery

Environmental Conservation Organization by manufacturing plants(environmental risk management overseen by plant managers)n Companies Subject to Consolidated Environmental Management (As of March 31, 2018) * Only the names of production bases are listed.

Asia: 14 production bases; 11 non-production bases

Toyota Industry (Kunshan) Co., Ltd. (China)
TD Automotive Compressor Kunshan Co., Ltd. (China)
Yantai Shougang TD Automotive Compressor Co., Ltd. (China)
Zhejiang Aichi Industrial Machinery Co., Ltd. (China)
Uster Technologies (Suzhou) Co. Ltd. (China)
Cascade Xiamen Forklift Truck Attachment Co., Ltd. (China)
Cascade Hebei Forks Co., Ltd. (China)
Tailift Machinery & Equipment (Qingdao) Co., Ltd. (China)
Toyota Industries Engine India Private Limited (India)
Kirloskar Toyota Textile Machinery Pvt. Ltd. (India)
P.T. TD Automotive Compressor Indonesia (Indonesia)
Cascade Korea Limited (Korea)
Tailift Material Handling Taiwan Co., Ltd. (Taiwan)
Toyota Industrial Equipment Vietnam Co., Ltd. (Vietnam)

60

Toyota Industries Report 2018

City gas

86,786 km3N

LPG

4,539 tPetroleum products

4,100 kl

Coal products

7,082 t

LNG

1,344 tR&D/Design

Procurement

Production*1: Terajoule is a unit used to measure heat. 1 TJ = 1012 joules■ Raw Materials [consolidated]
Raw material consumption

Transportation/Sales

Greenhouse gases other than CO2

3,964 t-CO2

CO2 from logistics

30,099 t-CO2

SOx (Sulfur oxides)

413 kgNOx (Nitrogen oxides)

143 t

VOC (Volatile organic compounds)■ Chemical Substances[Japan consolidated]
Emissions/transfers of PRTR
law designated substances

439 t■ Waste [consolidated]

790,022 t

122,521 t

Waste generation■ Water [consolidated]
Water consumption

1,453 tUsage

4,873 km3

■ Into Waterways[consolidated]■ Chemical Substances

37 t

Water pollutants[Japan consolidated]
PRTR law*2 designatedsubstances

Recovery/Recycling

1,447 t2,407 km3

Discharge of treated wastewater*2: Short for Pollutant Release and Transfer Register, the PRTR law is a scheme whereby businesses measure the release and transfer of PRTR designated pollutants and report theirperformance to the government. The government then compiles this data and releases it to the public.

Environmental Accounting
Fiscal 2018 Environmental Accounting*3
Scope of data collection: Toyota Industries Corporation
Period of data collection: April 1, 2017 – March 31, 2018
*3: Environmental accounting data is collected in compliance with the Ministry of the Environment’s Environmental Accounting Guidelines 2005 Edition.

Europe: 9 production bases; 55 non-production bases
Toyota Material Handling Manufacturing France SAS (France)
TD Deutsche Klimakompressor GmbH (Germany)
Toyota Material Handling Manufacturing Italy SpA (Italy)
L.T.E. Lift Truck Equipment S.p.A. (Italy)
Cascade Italia S.r.l. (Italy)
Toyota Material Handling Manufacturing Sweden AB (Sweden)
Uster Technologies AG (Switzerland)
Cascade (U.K.) Limited (U.K.)
Vanderlande Industries B.V. (Netherlands)

1,272,516 MWh

Financial Section /Corporate Information

As in the previous fiscal year, in fiscal 2018 we conducted
introductory educational courses to foster the knowledge
needed for environmental management and an introductory

Following the revision of the international standard ISO
14001 in September 2015, we reviewed our Environmental
Management Manual and redefined its regulations. In August
2016, we initiated activities based on the new regulations.
By having auditors who thoroughly understand the revised
standard perform internal audits, we have confirmed theprogress of each department in conforming to the revised
standard.
An external review by a third party has also confirmedthat our shifting to the revised standard has been proceeding
appropriately.

Electricity

913,123 t-CO2

Japan

n Non-consolidated: 10 production bases;
8 non-production basesn Consolidated subsidiaries in Japan: 15 production
bases; 21 non-production bases
Tokyu Co., Ltd. (Aichi)
Tokaiseiki Co., Ltd. (Shizuoka)
Miduho Industry Co., Ltd. (Aichi)
IZUMI MACHINE MFG. CO., LTD. (Aichi)
Hara Corporation (Gifu)
Mino Tokyu Co., Ltd. (Gifu)
Altex Co., Ltd. (Shizuoka)
Aichi Corporation (Saitama)
Nagao Kogyo Co., Ltd. (Aichi)
Unica Co., Ltd. (Aichi)
Nishina Industrial Co., Ltd. (Nagano)
Iwama Loom Works, Ltd. (Aichi)
HANDA Casting Company (Aichi)
Takeuchi Industrial Equipment Manufacturing Co., Ltd. (Aichi)
Sugiyama Kogyo Co., Ltd. (Aichi)

Oceania: 1 production base; 4 non-production bases
Cascade (Australia) Pty. Ltd. (Australia)

North America: 16 production bases; 34 non-production bases
Cascade (Canada) Ltd. (Canada)
Toyota Industrial Equipment Manufacturing, Inc. (U.S.A.)The Raymond Corporation (U.S.A.)
Raymond-Muscatine, Inc. (U.S.A.)TD Automotive Compressor Georgia, LLC (U.S.A.)
Michigan Automotive Compressor, Inc. (U.S.A.)
Indiana Hydraulic Equipment Corp. (U.S.A.)
North Vernon Industry Corp. (U.S.A.)
Cullman Casting Corporation (U.S.A.)
Toyota Industries Compressor Parts America, Co. (U.S.A.)
Uster Technologies, Inc. (U.S.A.)
Cascade Corporation (U.S.A.)
PSM LLC (U.S.A.)
American Compaction Equipment, Inc. (U.S.A.)
Tailift Material Handling USA Inc. (U.S.A.)
Bastian Solutions, LLC (U.S.A.)

Latin America: 1 production base; 5 non-production bases
Toyota Material Handling Mercosur Indústria e Comércio deEquipamentos Ltda (Brazil)

Promotion of
ESG Initiatives

Head Office
Corporate Planning
R&D
Purchasing
Quality Assurance
Human Resources
General Administration

Response to the Revised ISO 14001
Standard

CO2 emissions

16,939 TJ*1

Strategies andBusinesses

Responsible internal auditor

Energy consumption■ Into the Air [consolidated]

OUTPUT

Committees

Environmental
Impact Flow

■ Energy [consolidated]

INPUT

Organizations

educational course
for environmental
audits to cultivate
knowledge andtechniques ofinternal audits.
Department heads
and employees
proactively attendedAuditor training by an external lecturer
these courses
to deepen theirunderstanding of environmental management. For internal
auditors, we provided auditor training by an external lecturer
for upgrading the quality of our internal audits.

Company Introduction

Toyota Industries has positioned environmental response as
one of its most crucial management issues. To quickly reflect
top management’s decisions on business operations, Toyota
Industries has established and been operating a Companywide integrated environmental management system (EMS),
with the president at the top.

n Environmental Conservation Cost
Category(Millions of yen)

FY2018Environmental Impact

FY2017

Investment

Expenses

Investment

Expenses

596

195

833

120

675

2,825

450

2,335

261

124

129

140

Upstream/downstream costs

0

449

0

568

Management costs

0

187

0

276

Research and development costs

78

3,882

7

2,398

Social contribution activity costs

0

103

0

92

Environmental remediation costs

0

0

16

0

1,610

7,765

1,435

5,929

Pollution prevention costs
Business Global environmental
area costs conservation costs
Resource recycling costs

Total

9,375

n Environmental Conservation Beneﬁts

7,364

Comparison with Previous Fiscal YearCO2

625 t increase

Generation of waste products

4,347 t increase

Water

114,166 m3 increasen Economic Beneﬁts of Environmental Conservation Initiatives(Millions of yen)

Item
Revenue

Cost reduction

Total

Details

AmountReturns from sale of recycled waste products

4,505

Energy cost reductions(63)

Cost reduction by resource savings(including reductions in amount of water use,
wastewater treatment costs, etc.)

(42)
4,400

61

Environmental Initiatives

n Product Related
Sixth Environmental Action Plan Targets

Sixth Environmental Action Plan

Segments

The results of our activities in fiscal 2018 showed steady progress across the board toward achieving respective targets forfiscal 2021.

Progress of Sixth Environmental
Action Plann Production Related
Segments

Reduce CO2 emissions from production
activities• Develop and introduce productionengineering technologies with lower CO2
emissions• Reduce CO2 emissions by fully
implementing improvement activities on adaily basis• Develop innovative CO2 reduction
technologies that utilize clean energy• Manage greenhouse gases other than CO2

Reducing
Environmental Risk
and Establishing aSociety in Harmony
with Nature

62

Toyota Industries Report 2018

Nonconsolidated

FY2021 Targets

Control Items Base Year (FY)
Totalemissions2006

Nonconsolidated

CO2
emissionsfromlogistics

Promote measures against resource
depletion by recycling waste• Reduce the volume of discarded materials
by taking action at the source, such as
improving yields and other measures• Promote internal reuse
Promote effective resource utilization in
production activities• Reduce use of packaging materials• Monitor water input and output in eachcountry/region and develop and promote
appropriate measures

Waste
generation
volumeFurther reduce emissions of substances ofconcern• Minimize the use of substances of concern
by promoting efficient production activities

VOC*2
emissions

Nonconsolidated

Targets

–16%

–10%

–24%
Emissionvolume perunit ofproduction*1

Emissionvolume perunit ofproduction

–26%

2006
–27%

2007

Japan
consolidated

–35%

–31%
Emissionvolume perunit ofproduction

Implement initiatives to promote
Establishing a
3R (reduce, reuse and recycle)
Recycling-Baseddesign for effective resource
Societyutilization• Reduce use of resources through longer product life
• Reduce use of resources through standardization,
modularization and reduction of components• Reduce use of resources through development oftechnologies to enable weight reduction and downsizing• Promote reuse of components and resources• Developed reach-type electric lift truck (longer lifeof components)• Developed reach-type electric lift truck (reduction
in number of components)• Developed new 400W DC-AC inverter

Reducing
Environmental
Risk and
Establishing aSociety inHarmony with
Nature–30%

Reduce emissions to improve air
quality in urban areas in all• Develop engines that meet future regulations
countries and regions
Manage chemical substances
contained in products

Sixth Environmental Action Plan Targets

Reducing
Environmental
Risk and
Establishing aSociety inHarmony with
NatureAction Policies

Promoting
Environmental
Management–31%

Emissionvolume perunit ofproduction

2006

–36%
(24g/m2)

Augment and promoteconsolidated environmental
management• Build a global environmental management system andpromote related activities to:Comply with environment-related laws in each country
and region
Formulate a medium-term plan based on visualization ofenvironmental risks and conduct activities to prevent
risks from occurring
Enhance risk communication with relevant organizations
and local residents
Achieve the highest-level environmental performance ineach country and region• Enforce strategic environmental management that
integrates environmental activities and business activities

Enhance education andenlightenment activities• Extend the scope of Toyota Industries’ enlightenment• Held environmental seminar
activities to consolidated subsidiaries in and outside Japan• Conducted environmental awareness survey• Give back to society the outcomes of enlightenment
among employees
activities

Promote environmental activities
in collaboration with business
partners• Ensure compliance with laws and regulations and improve
environmental performance based on the Environmentally
Preferable Purchasing Guidelines• Held briefing sessions for subsidiaries in Japan• Pursue higher brand image through proactive information
disclosure• CDP*4 climate change: ranked B(on a performance band of A to F)• CDP water: ranked B(on a performance band of A to F)• Nikkei’s Environmental Management Survey:
ranked 9th (out of 1,724 target companies)• Won Chairman Prize of The Energy Conservation
Center, Japan, in the Energy Conservation Grand
Prize (two products)• Won Excellence Award in the Environmental
Communication Awards• Won Best Plant Award (business office category)in the Green Curtains Competition in Kariya• Won Superior Award in the Toyota Environmental
Activity Award

–29%

–36%
(24g/m2)

FY2018 Achievements

Augment activities related toprotection of biodiversity

Improve eco-conscious brand
image

Nonconsolidated(automobile
body)Specific Actions

2006

Nonconsolidated• Supported chemical substance management at
consolidated subsidiaries• Conducted survey on chemical substances
contained in products• Share the biodiversity guidelines across all Toyota Group
companies and contribute to the expansion of a habitat
for living organisms• Participated in All Toyota Green Wave Project• Formulate and promote plans to link activities and bring• Created an animal path within the Higashiura
more greenery by undertaking activities for conservation of
Plant in Aichi Prefecture
biodiversity throughout the Toyota Industries Group,
including at consolidated subsidiaries in and outside
Japan

–28%

–27%

• Investigate chemical substances contained in products
and manage switching over of SVHC*3 and othersubstances of concern to other substances• Developed engine for marine usen Others

Segments

GlobalCO2emissions

Achievements• Developed reach-type electric lift truck• Developed next-generation electric compressor• Developed air-jet loom
• Developed next-generation air compressor forfuel cell vehicles• Promoted activities to reduce environmental risks
among consolidated subsidiaries in and outsideJapan

Financial Section /Corporate Information

Establishing a
Recycling-BasedSociety

Scope

Establishing a Reduce CO2 emissions throughLow-Carbon
product and technology
Emission Society development• Develop technologies that contribute to an even greaterlevel of energy efficiency• Develop products and technologies that respond toelectrification• Develop technologies to enable weight reduction• Reduce energy loss
• Develop technologies for the realization of a hydrogenbased society

Promotion of
ESG Initiatives

Reduce CO2 emissions from productionrelated logistics• Improve transportation efficiency throughsuch measures as modal shift and bettercargo loading efficiency

FY2018 Achievements
Subject

FY2018 Achievements

Strategies andBusinesses

Establishing a
Low-Carbon
Emission Society

Action Policies/Specific Actions

Specific Actions

Company Introduction

and are promoting activities according to the plan. Throughactivities undertaken during fiscal 2018, we made steadyprogress toward achieving respective targets for fiscal 2021.

With an eye to realizing a prosperous life in harmony with
the natural environment through the establishment of asustainable society, we formulated the Sixth Environmental
Action Plan for the period from fiscal 2017 to fiscal 2021

Action Policies*1: We manage emissions in each business by using either unit of production or unit of sales as a basic unit of emissions. The weighted average of reduction rates of all businesses is used as ourmanagement index.
*2: Volatile Organic Compounds*3: Substances of Very High Concern*4: An international NGO undertaking a project through collaboration among institutional investors to call for disclosure of strategies against climate change issues and greenhouse gas emissions
data to leading companies around the world† Details of the Sixth Environmental Action Plan are available at:https://www.toyota-industries.com/csr/environment/management/plan_6/

63

Environmental Initiatives

Establishing a Low-Carbon Emission Society
We position the curbing of global warming as our most crucial environmental task. We have been working to reduce CO2
emissions in our global business activities and at the same time accelerate our efforts to develop more environment-friendly
products.

Summary
CO2 Emissions (Production Activities)

Total emissions (non-consolidated)

16

FY21 target:

10% reduction% reduction (vs FY06 level)(vs FY06 level)

Emission volume per unit of production (global)
26% reduction% reduction (vs FY06 level)(vs FY06 level)

We have been promoting kaizen by karakuri initiatives to attainkaizen (improvement) by utilizing Japan’s traditional, simple
mechanical systems called karakuri, which do not require
power generated by motors or other devices.
In fiscal 2018, the Nagakusa Plant, a production base of
automobiles in Aichi Prefecture, adopted karakuri in a process
to sort parts.
Previously, the sorting of parts had been done by using airpowered equipment, thus consuming a considerable amountof energy.
To eliminate the use of air, the plant created a nonpowered mechanical system that uses a combination ofgravity, the principle of leverage, coil springs and pulleys
and successfully reduced its annual CO2 emissions byapproximately 48 tons.
This new, non-powered equipment won a Good Idea
Award in the Karakuri KAIZEN Exhibition 2017 hosted by theJapan Institute of Plant Maintenance.

As part of its efforts to reduce CO2 emissions, the Toyota
Industries Group proactively promotes the use of renewableenergy such as solar, wind and hydraulic power.
For example, TD Automotive Compressor Kunshan Co.,
Ltd. (TACK), a production subsidiary in China, installed a solar
panel system on the roof of its plant in December 2017. Thissystem is expected to generate 16% of its annual electricity
consumption, which equals to annual CO2 emissions ofsome 1,250 tons. The Raymond Corporation and RaymondMuscatine Inc., production subsidiaries in the United States,
have purchased renewable electricity certificates*, which
as a total of the two companies are equivalent to 49% ofannual electricity consumption and about 3,800 tons of CO2
emissions, and have contributed to lower CO2 emissions.
Additionally, Toyota Industries Engine India Private Limited(TIEI), a production subsidiary in India, has purchased
electricity from a solar power source and reduced its annual
CO2 emissions by 14,000 tons.

Toyota Industries has been proactively promoting
development and design of eco-conscious products. As
part of the efforts, we launched the Environmentally Friendly
Product Certification System in fiscal 2007, which certifies
products that possess exceptionally high environmental
performance, and have been showcasing these products tothe public. With the addition of one product in fiscal 2018,a total of 21 products have obtained certification under thissystem since its launch.
We will continue to promote the development of ecoconscious products in the future as well.

* Environmental added value of electricity derived from a renewable energy source converted
into tradable certificatesn Karakuri Mechanism

Reducing CO2 Emissions by Renewable
Energy-Derived Hydrogen

Initiatives for Establishment of a Low-Carbon
Emission Societyn CO2 Emissions (Non-consolidated/Consolidated subsidiaries in andoutside Japan)(1) Pull the lever.

Consolidated subsidiaries outside Japan
Non-consolidated
Consolidated subsidiaries in Japan
Reduction rate (non-consolidated)
Reduction rate (consolidated)
Reduction rate

1.0
1.00
1.00

0.78

0.77

0.76

0.76

0.78

0.78

0.76

0.72

0.73

0.73

Total
emissions
(kt)

888

926

909

940

667

400

Toyota Industries Report 2018

Approx.

50% lower(compared withprevious models)(6) Next hanger moves in place.

(4) This hanger moves
to the right as thedevice comes down.

200

64

Lifecycle CO2 emissions(3) A lifting/lowering
device carrying
a part comes
down.

600

(FY) 06

For baggage towing tractors used in airports, weoffer an electric model along with internal-combustion
engine models. This 2.5-ton electric towing tractor
simultaneously delivers high environmental performance(no emissions of exhaust gas) and powerful driving
performance.
The product has been certified as Super
Environmentally Friendly Product for realizing
considerably lower CO2 emissions throughout its
lifecycle.

913

800

0

Key features to reduce environmental impact(5) Stopper is released.

0.6
Good

1,000

Good

(2) Stopper isreleased.

0.8

Electric towing tractor with 2.5-ton capacity(Super Environmentally Friendly Product*)Financial Section /Corporate Information

Toward the goal of achieving zero CO2 emissions in 2050,
L.T.E. Lift Truck Equipment S.p.A. (LTE), a production
subsidiary in Italy, has been making various CO2 emissions
reduction efforts, such as using renewable energy andundertaking energy-saving activities. As one example, LTE
installed a hydrogen station on the company premises in
September 2017. The station is for charging fuel cell lift trucks
with hydrogen generated by using electricity from a solar
panel system, thereby helping LTE reduce its CO2 emissions.
LTE will continue to actively promote the use of hydrogen
within its plant.

Product Certified in Fiscal 2018

Promotion of
ESG Initiatives

Under the Sixth Plan, we are working toward achieving
fiscal 2021 targets of reducing total non-consolidated CO2
emissions from production activities by 10% and global
emission volume per unit of production by 26%, both from thefiscal 2006 level. In fiscal 2018, we made steady progress inachieving these targets through our CO2 emissions reduction
efforts, such as loss reduction activities to eliminate wastefuluse of energy at plants and switching to more energy-efficient
air conditioners.

Certification of Environmentally Friendly
Products

Strategies andBusinesses

24

FY21 target:

Reducing CO2 Emissions by Using
Renewable Energy

Company Introduction

FY2018 Results

Saving Energy by Karakuri* For a definition, please visit our Website at:
Hydrogen station and a fuel cell lift truck (LTE)

14

15

16

17

https://www.toyota-industries.com/csr/environment/
technology/authorization/

18

65

Environmental Initiatives

Establishing a Recycling-Based SocietyWith a view to establishing a recycling-based society, we have been striving to reduce resource consumption.

Summary
Waste Generation Volume (Production Activities)

Waste generation volume per unit of production(non-consolidated)

31

FY21 target:% reduction (vs FY06 level)

29% reduction(vs FY06 level)

Waste generation volume per unit of production(non-consolidated/consolidated subsidiaries in Japan)% reduction (vs FY06 level)

27% reduction(vs FY06 level)n Changing Sheet Retrieval Method

Before improvement
Retrieving

Reduction rate (Non-consolidated/consolidated subsidiaries in Japan)

1.00
1.00
0.71
Total
generation
(kt)

81

0.69

0.70

0.69

65

69

0.73
0.71

0.80

Retrieving

Inspecting

2006

2017

2018

Repairing material ANo
defects!
After improvement

2021

The Anjo Plant, a production base of electronics components
in Aichi Prefecture, has been carrying out activities to reduce
the amount of wasted parts by eliminating defects.

Toyota Industries Report 2018

Mounting

0.60 Good

Reducing Waste Generation by Improving
the Sheet Retrieval Method

66

Repairing material B

Obstructive
plates(FY)

Initiatives Related to Water Risk

Part

After improvement

Thicknessmeasuring tool

Part

Part

Measuring the
thickness ofthe sheet
Sheet gets caught by theobstructive plates and warps
Second sheet drops
back into the container

Manufacturing Section
No. 1, Manufacturing
Dept., Foundry Division,
Toyota Industry(Kunshan) Co., Ltd.
(As of March 31, 2018)

Repeating many tries with different mixing ratios wasdifficult, but I am happy to come up with the optimum
ratio. We will continue to work proactively to achieve
improvements.

Reduction rate

500Before improvementPart

Sun Yi,Managern Changing the Mixing Ratio of Repairing Materials

Sheetstoragecontainer
Sheet

1.00

Good

Toyota Industry (Kunshan) Co., Ltd. (TIK), a production
subsidiary in China, has been working to reduce the amountof waste by reusing waste generated in the foundry process.
In the production process of foundry parts, molten ironleft over from the pouring process is transferred to a container,

Consolidated subsidiaries in Japan

Reduction rate (non-consolidated)

100

Reducing Waste Generation by Changing
a Container Repairing Material Used in
the Foundry Process

Waste sandRepairing material A

Repairing material B:
No longer used
(replaced by waste sand)Repairing material A:
Using a smaller amountToyota Industries uses water in many processes, for example,
for washing products and cooling production facilities.
Globally, consumption of water, which is one of the mostimportant resources, is increasing in line with growth in theworld’s population. Flooding and other water-related natural
disasters due to climate change cause serious impact. We
duly consider that these factors present risks to our businessactivities.
In fiscal 2017, we identified and assessed water risks
at each base using Aqueduct, a global water risk mapping
tool developed by the World Resources Institute (WRI),
and various public databases available in corresponding
regions. To increase the credibility of our externally disclosed
information, we obtained third party verification* of the fiscal
2018 water consumption and wastewater discharge data of
our production bases and consolidated subsidiaries. We willcontinue to work to assess and mitigate water risks in our
supply chain while seeking ways to conserve water resources.

Financial Section /Corporate Information

Non-consolidated

Defects!

Two retrieved
togetherInitiatives for Establishing a Recycling-Based Societyn Waste Generation(Non-consolidated/Consolidated subsidiaries in Japan)

Mounting

optimization by reflecting opinions of other departments.

Promotion of
ESG Initiatives

In seeking to minimize resource consumption in 2050, weare making efforts to reduce our waste generation volume
by implementing measures to reduce resource consumption
at the source and promoting internal reuse of waste. We set
out targets of reducing waste generation volume per unit ofproduction compared with the fiscal 2006 level by 29% on a
non-consolidated basis and by 27% for Toyota Industries andits consolidated subsidiaries in Japan. Accordingly, we havebeen promoting activities toward these targets.

We would like to continue our improvement activities,
which will lead to a reduction in waste, while ensuring
the quality of products.

Strategies andBusinesses

31

FY21 target:

Manufacturing Section,
Manufacturing Dept.,
Electronics Division(As of March 31, 2018)

Company Introduction

FY2018 Results

In a process to retrieve a sheet from its storage container
and mount it on a part, burr from the sheet molding or static
electricity sometimes causes two sheets to be removed at thesame time, making the resulting part defective. To eliminate
such defective parts, the plant examined ways to make sure
one sheet is retrieved at a time.
By trial and error, the plant came up with an idea to add
obstructive plates at the storage container. These plates“obstruct” the retrieval of a sheet, causing it to warp. If
another sheet is under it, warping will separate the second
sheet and drop it back into the container. Moreover, the plantbegan to use a thickness measuring tool to make sure there is
only one sheet before mounting it onto a part and succeededin eliminating defects and wasted parts. The thickness of asheet varies from product to product. As such, the number
and size of the plates are changed accordingly to ensure one
sheet is retrieved at a time. This improvement idea of adding
obstructive plates was generated from the perspective of total

AkihiroHayakawa,
Supervisor

in which it cools and solidifies. Removing the solidified ironfrom the container sometimes damages its inner walls,
requiring application of repairing materials before using thecontainer again.
Previously, TIK had purchased new repairing materials.
To reduce costs, TIK examined a method to substitute one of
the two repairing materials with waste sand that possesses
an equal level of fire resistance. After a number of trials
and errors, TIK found the best mixing ratio of the remaining
repairing material and waste sand and confirmed that it does
not cause any quality issues. This replacement has enabled
TIK to reduce the annual amount of waste sand by about
30 tons.
This project won a Best Practice Award in fiscal 2018
under our internal award program to recognize excellent
environmental improvement activities.

* See page 74 for details.

67Environmental Initiatives

Reducing Environmental Risk and Establishing a Society inHarmony with Nature
We have been making efforts to reduce the use of substances of concern while carefully monitoring the latest trends inenvironmental laws and regulations on a global basis. At the same time, we have been promoting activities for conservationof biodiversity toward realizing a society in harmony with nature.

Summary
VOC Emissions (Production Activities)

Emissions per unit of production(non-consolidated/automobile body)

36

FY21 target:% reduction (vs FY06 level)

36% reduction(vs FY06 level)

Study group session at a production subsidiary in Vietnam

68

Toyota Industries Report 2018

As one effort to conserve biodiversity, Toyota Industries has
been collaborating with the Aichi prefectural government in
its initiative to foster the development of ecological networks
throughout the prefecture.
We joined the Chita Peninsula Ecological Network Council
in fiscal 2012 and have since been carrying out activities
linked to the conservation of biodiversity in the local naturalenvironment in collaboration with various stakeholders,
including local governments, companies, NPOs, expert bodies
and students.
In March 2018, we teamed up with the council and set up

Tree planting at the animal path completion ceremony

Planning and Management
Group, Environment Office,Plant Engineering &Environment Dept.,
Production Headquarters(As of March 31, 2018)

I feel very pleased that we made a step forward toresolve a local issue through the creation of this animal
path. This opportunity has also made us renew ourdetermination to proactively conduct activities toconserve biodiversity.

Holding an External Environmental
Education Class
Since fiscal 2010, Toyota Industries has been providing an
external environmental education class for children who willbe leading the next generation with an aspiration to cultivateawareness for environmental conservation and contribute to
the realization of a sustainable society.

External environmental education class

Handing out saplings to employees

Financial Section /Corporate Information

Many of the chemical substances needed for our production
activities may cause adverse effects on the environment.
Thus, appropriate management of chemical substances is
crucial in ensuring safe handling and minimizing potential
harmful effects.
To appropriately manage chemical substances containedin raw materials and products, we have been assisting ourconsolidated subsidiaries and business partners outside

Creating an Animal Path to Improve Natural Habitatsof Livings Organisms

Kazutaka
Narukawa

Toyota Industrial Equipment Mfg., Inc. (TIEM), a production
subsidiary in the United States, promotes tree planting
at home by distributing saplings to employees and local
residents on Earth Day and Arbor Day every April.
In April 2017, TIEM handed out 1,600 red oaksaplings. TIEM intends to continue this activity to increase
environmental awareness that we need to live in harmony withnature and curb global warming.

Promotion of
ESG Initiatives

Strengthening Management of Chemical
Substances at Consolidated Subsidiaries
Outside Japan

We believe that it is important to undertake businessactivities while continuously paying attention to the impactof these activities on the natural environment. Based on thisbelief, we have formulated the biodiversity policy and beenpromoting initiatives accordingly. The policy clearly stipulates
that we seek to reduce the impact of our business activities
on biodiversity and work with local communities for theconservation of biodiversity.

Employees Planting Trees on Earth Day

Strategies andBusinesses

Under the Sixth Plan, we set a target of reducing emission
volume per unit of production for volatile organic compounds(VOC) from the automobile body painting process by 36%
from the fiscal 2006 level and have been striving to reduce
VOC emissions. In fiscal 2018, we continued our efforts
to increase the recovery rate and enhance maintenanceand management of thinner, a solvent used for cleaning.
Consequently, we were able to cut down emission volume perunit of production in fiscal 2018 by 36%.

Initiatives for Conservation of Biodiversity

In August 2017, we held a class for about 30 local
elementary school students on the theme of conserving
biodiversity during the “Environment Summit in 2017” held in
Minamichita-cho, Aichi Prefecture, by the Minamichita Town
Development Council. Participants created an ecologicalpyramid using paper cups printed with illustrations of livingorganisms, learned about diversity and the relationship among
them and thought about what each of us can do to protect
the future of the Earth.

Company Introduction

FY2018 Results

Japan in establishing a system to manage chemical
substances. In fiscal 2018, we started providing suchsupport to two consolidated subsidiaries and several
business partners.
We will continue to provide support and undertake
activities to prevent violations of chemical substances
regulations at production bases outside Japan.

an environment within the Higashiura Plant in Aichi Prefecture
to expand the habitat of foxes. Recently, we have found foxes
are living in forests surrounding the plant. But because there
is not a large enough habitat, many were fatally involved intraffic accidents on the neighboring roads. To provide a safe
passage between these forests, Toyota Industries and experts
from the council worked together and created an animal
path within the plant premises. At the completion ceremony,participants planted trees that form a part of the path. We
intend to monitor the inhabiting status of foxes using cameras
installed along the path while implementing additional
measures as necessary to create a better environment.

Planting trees

69Environmental Initiatives

Environmental Management
Toyota Industries proactively discloses its initiatives for reduction of environmental risk and other environmental information.

Status of Compliance with Environmental
Laws

Soil and Groundwater Pollution
Countermeasures

Measurement results are available at:Internally Conducting Water Quality
AnalysisInternal water quality analysis

70

Toyota Industries Report 2018n Number of Persons Qualified as Pollution Control Managers(As of March 31, 2018)

Category

Number of persons qualified

Air

86

Water

101

Noise and vibration

268

Dioxin19

Internal education for acquiring environment-related qualifications

We will continue to provide education necessary toincrease the number of qualified personnel.

Establishing a Sustainability Dojo in
SwedenToyota Material Handling Manufacturing Sweden AB(TMHMS), a production subsidiary in Sweden, has establisheda sustainability dojo in its plant to increase employees’
awareness for safety, the environment and product quality.
This dojo allows employees to learn energy-saving, waste
reduction and chemical substances management procedures
specific to a manufacturing site. They can also practice theproper use of safety protective equipment and operation

Ceremony to award excellent environment posters at Iwama Loom Works, Ltd.

Sustainability dojo

Local cleanup activities by Miduho Industry Co., Ltd.

Financial Section /Corporate Information

Toyota Industries periodically conducts internal water
quality analysis using official methods in order to verify thatwastewater discharged from its plants and groundwatercomplies with external standards, including applicable laws,
regulations and ordinances, and to enable swift action when
there is a change in water quality.

Even though Toyota Industries has secured the legally required
number of persons having environment-related qualifications,
we are promoting further acquisition of qualifications by
employees.
In fiscal 2018, we provided internal education to
encourage acquisition of the Water Pollution Control Manager
qualification, which is a national qualification, and two
employees have been newly qualified.

Every year, Toyota Industries carries out a three-month
Environment Strengthening Month from June to August withthe aim of increasing environmental awareness of Group
employees and their families and promoting energy saving
through various events.
In fiscal 2018, each of the consolidated subsidiaries inJapan proactively planned and carried out unique activities,
such as soliciting entries to their environment poster contest,
holding “No Car Days” to encourage employees to use
commuting means other than private cars and joining local
cleanup activities.

Promotion of
ESG Initiatives

http://www.toyota-industries.com/csr/environment/
process/groundwater/

Efforts to Increase Employees Qualified
under Environment-Related Laws

In fiscal 2018, we held a seminar on water quality
analysis for relevant departments to foster anunderstanding of the water quality analysis ofwastewater and promote acquisition of the Water
Pollution Control Manager qualification. The seminar
included an explanation of analysis procedures, handson exercise of an analysis and a practice examination
based on the past tests. These were well received byparticipants. The seminar was also helpful for our own
work, because teaching meant relearning such things
as the mechanism of analysis equipment. We plan tohold this seminar on a continuous basis.

Environment Strengthening Month in the
Toyota Industries Group

Strategies andBusinesses

Toyota Industries carries out surveys and purification ofsoil and groundwater contaminated from the past use oftrichloroethylene. We regularly report the survey results
to local government authorities and provide information
at local community meetings. As measures to prevent
pollution from substances covered by the Soil Contamination
Countermeasures Law as well as from grease and oils, wehave drilled observation wells at all plants to conduct regularchecks.

Water Environment Group,
Environment Office, Plant
Engineering & Environment
Dept., Production
Headquarters(As of March 31, 2018)

Company Introduction

In fiscal 2018, there were no incidents of violations ofenvironmental laws throughout the Toyota Industries Group.
We will continue to reinforce our activities to prevent
environmental risk.

Our major efforts for prevention of irregular wastewater
discharges include developing an analysis plan, conducting
water quality analysis based on the plan, monitoring trends inanalysis results and sharing relevant information among therelevant in-house departments.
In fiscal 2018, we set up a system to internallymonitor measurement items added under the revised Soil
Contamination Countermeasures Law. We also participatedin the Comprehensive Accuracy Control Project of the Japan
Association for Working Environment Measurement to ensure
the accuracy of our analysis results. We will continue to strive
for the prevention of irregular wastewater discharges andimprovement of the analysis accuracy.

Kuniko Ogawa (left)
Mina Kato (right),
Working leaderof an overhead crane and actually experience lockouts ofvarious facilities. Other topics of learning include response toan accident, safety behavior and industrial ergonomics. Team
leaders in the plant first receive education at the dojo and thenshare their acquired knowledge with other team members.

71Environmental Initiatives

Holding Environmental Seminars

Detailed data is available at:

Emissions from Toyota
Industries’ businessactivities
Emissions other thanfrom Toyota Industries’
business activities

Scope 1

Direct emissions from Toyota Industries through the useof fossil fuels, etc.

Scope 2

Indirect emissions from the use of purchased energy
resulting from generation of electricity by power
plants, etc.

Scope 3Emissions associated with purchase of raw materials,
end use of Toyota Industries’ products by customers
and disposal of products

Capital goods
Fuel- and energy-related activities not included in Scope 1 or 2
Upstream transportation and distribution
Waste generated in operations
1

Employee commuting
Upstream leased assets

Included in Scopes 1 and 2[Compressor Division]More compact
processing lines

B (C)
9th place (36th place)

Ranked 9th among Manufacturing
Companies in the 21st Environmental
Management Survey
Toyota Industries earned 9th place, the highest everranking, in the overall manufacturing companies
category of the 21st Environmental Management
Survey conducted by Nikkei Inc. This survey evaluates
how well companies balance their environmental
measures with their efforts to improve management
efficiency. In the 21st survey, Toyota Industries was
highly regarded in the areas of “a structure to promote
environmental management” and “development of
eco-friendly products.” We will continue to make
Company-wide efforts to promote environmental
activities.

Energy Conservation
Grand Prize(The Energy Conservation
Center, Japan[ECCJ])

Chairman Prize of
ECCJ[Development
Department No. 2,
Engineering &Development
Headquarters]
Fuel cell lift truck

Environmental
Communication Awards(Ministry of theEnvironment)

Excellence Award

Toyota Industries Report
2017

Green Curtains Competition
Best Plant Award(Kariya-shi, Aichi)
Environmental Activity
Award program(Toyota Motor Corporation)

Superior Award

Kariya Plant’s green
curtains
Toyota Industries’ overall
environmental activities

TOPIC
Won TMC’s Superior Award forEnvironmental Activities
At the 2017 Toyota Global Suppliers Convention
held by Toyota Motor Corporation (TMC) at the
Nagoya Congress Center, Toyota Industries received
the Superior Award, the highest award in TMC’s
Environmental Activity Award program establishedin fiscal 2018. The award recognized our initiatives
toward a zero CO2 emissions society under our
aspirations in 2050.

Not applicableUse of sold products

External Environmental Awards

End-of-life treatment of sold products
Downstream leased assets

Not applicableFranchises

Not applicable

Investments

Not applicable
1

10

100

1,000

10,000100,000

Calculated by using the emissions associated with employee business travel as the baseline set at 1

Toyota Industries Report 2018

Chairman Prize of
ECCJ

Included in “Upstream transportation and distribution”

Processing of sold products

72

CDP water

TOPIC

Purchased goods and services

Downstream transportation and distribution

B (B)* An international NGO undertaking a project through collaboration among institutional
investors to call for disclosure of strategies against climate change issues and GHG
emissions data to leading companies around the worldn Scope 3 Emissions by Category (FY2018)

Business travel

Fiscal 2018 (Fiscal 2017)

CDP* climate change

Nikkei’s Environmental
Management Survey

Scope 3 / Category 11(91.6%)

Award winner

Financial Section /Corporate Information

We recognize that measuring the three scopes defined by
the GHG Protocol and turning the results into specific efforts
to reduce CO2 emissions are important in creating a lowcarbon society. Scopes 1 and 2 are GHG emissions from ourbusiness activities, the former being direct emissions fromour use of fossil fuels and the latter being indirect emissions
from the use of purchased energy resulting from generationof electricity by power plants and other facilities. Scope 3
emissions are indirect emissions associated with each productResultPromotion of
ESG Initiatives

Greenhouse Gas (GHG) Emissions in the
Supply Chain

Award program(host organization)

Strategies andBusinesses

Scope 1
(0.5%)
Scope 2
(1.6%)
Scope 3 /Category 1(5.1%)

Environmental seminar

Toyota Industries fosters environmental communication
with our stakeholders through proactive disclosure ofenvironmental information. Since fiscal 2015, we have been
participating in the Ministry of the Environment’s project for theestablishment of a framework for disclosure of environmental
information and examining the ideal way to disclose ourenvironmental information. We will continue to upgrade ourmethod of disclosure and contents to be disclosed.

Evaluation organizationsn GHG Emissions in Supply Chain (FY2018)

n List of External Environmental Awards

External Environmental Evaluationsn List of External Environmental Evaluations

https://www.toyota-industries.com/csr/environment/
process/scope3/

Scope 3 /Other
(1.2%)

External Evaluations of Toyota Industries’
Environmental Activities

Company Introduction

We hold environmental seminars to raise employees’
environmental awareness. In fiscal 2018, we invited Mr. Rintaro
Tamaki of the Japan Center for International Finance to givea lecture on “Climate Change and Business.” Some 150
employees, including directors of Toyota Industries and its
consolidated subsidiaries, attended the lecture and deepened
their understanding of action against climate change, its
relation with business operations and future trends.

from the purchase of raw materials to end use by customers
and disposal.
In the fiscal 2018 results, combined Scope 1 and 2
emissions accounted for 2.1% of the total emissions, with
Scope 3 emissions reaching 97.9%.
The largest source of emissions, which accounted for
91.6%, was Category 11 (Use of sold products) under Scope3, followed by Category 1 (Purchased goods and services)
also under Scope 3, which accounted for 5.1%.
Going forward, we will continue to monitor GHG emissions
within the entire supply chain and accordingly promote CO2
emissions reduction activities.

Toyota Industries’ environmental activities to date have beenhighly acclaimed by various organizations. In fiscal 2018, we
received five external awards, including two prizes under the
Energy Conservation Grand Prize program.

Receiving the award at the Toyota Global Suppliers Convention

73

Environmental Initiatives

Third Party Assurance of Environmental Performance Data
In order to ensure the transparency and accuracy of the information we disclose, the Toyota Industries Group obtained third
party assurance for its energy-derived CO2 emissions (Scopes 1, 2 and 3), waste generation as well as water consumption
and wastewater discharge volume data for fiscal 2018.

Verification by a Third Party

Comments by Mr. Koki Nohara of SGS Japan Inc. (Verifier)This year, I conducted verification of the Toyota Industries
Group’s water consumption and wastewater discharge
data in addition to Scopes 1, 2 and 3 emissions and waste
generation data. It was the third verification for the Group,and the scope of verification has been expanding each year,
which provides proof that Toyota Industries is making efforts
to ensure the reliability of the data it reports. Moreover, incalculating Scope 3 indirect emissions, one of the mostdistinctive characteristics of the GHG Protocol, a basic unitof emissions directly linked to business operations is first
calculated for each of the Scope 3 categories and then used
to obtain GHG emissions. In this way, Toyota Industries
ensures higher accuracy in its GHG emissions data. I hopethat Toyota Industries will continue to provide appropriate
reporting to its stakeholders from the perspectives of ensuring
the accuracy and adequacy of data it reports.

The verification statement of the third party organization is available at:https://www.toyota-shokki.co.jp/csr/environment/process/items/Verification2017_ENG.pdf

Toyota Industries obtained third party verification of its energyderived CO2 emissions, waste generation volume, water
consumption and wastewater discharge data for fiscal 2018.
Starting from fiscal 2018, water consumption andwastewater discharge were newly added in order to ensure
the reliability of the data.
On-site verification was performed by the verification
organization at two of our production bases in Aichi
Prefecture, namely, the Kariya Plant and Hekinan Plant, andthe transparency and accuracy of our environmental data
have been confirmed through the verification.
Using the procedures specified by the verification
organization, Toyota Industries conducted verification at theremaining eight production bases of Toyota Industries as well

as 13 consolidated subsidiaries in Japan and 21 consolidated
subsidiaries outside Japan.
We will continue to utilize this third party verificationin making continuous improvements in our environmental
activities and disclose data to our stakeholders in a moretransparent manner.

Non-consolidated

Japan

Japan Consolidated Japan
Consolidated
subsidiaries outside
Japan

74

Toyota Industries Report 2018

Consolidated Statements of Financial Position

P76−77

Consolidated Statements of Profit or Loss

P78

Consolidated Statements of Comprehensive Income

P79

Consolidated Statements of Changes in Equity

P80−81

Consolidated Statements of Cash Flows

P82–83* Toyota Industries has adopted International Financial Reporting Standards (IFRS) beginning fromthe end of fiscal 2017.

Board of Directors, Audit & Supervisory Board Members andManaging Officers

P84–85Major Production Bases

P86

Investor Information

P87

Third party verification at the Hekinan Plant

n Bases Subject to Verification

RegionFinancial Section

Corporate Information

Third party verification at the Kariya Plant

Category

Financial Section /Corporate Information

Names of Bases and Subsidiaries
Kariya Plant, Takahama Plant, Nagakusa Plant, Kyowa Plant, Obu Plant, Hekinan Plant, Higashichita Plant,
Higashiura Plant, Anjo Plant, Morioka Works (Total of 10 bases)
Tokaiseiki, Tokyu, Altex, Iwama Loom Works, IZUMI MACHINE MFG., Miduho Industry, Nagao Kogyo,
Nishina Industrial, HANDA Casting, Unica, Hara, Aichi, Takeuchi Industrial Equipment Manufacturing(Total of 13 bases)

North America
Latin America IHC, NVIC, Raymond-Green, Raymond-Muscatine, TIEM, TIK, TIEI, KTTM, MACI, TACG, TACK, TDDK, YST,
Asia
TMHMF, TMHMS, TMHMI, TICA, TACI, TMHM, Cascade, TIEV (Total of 21 bases)
EuropeNote:
For details on the consolidated financial statements, please refer to the financial results and securities report, which are posted on the following Website:
https://www.toyota-industries.com

75Consolidated Statements of Financial Position
Toyota Industries Corporation
For the years ended March 31, 2017 and 2018

Millions of yen
2017

Millions of yen

2018

Assets2018¥ 395,698¥ 479,253

Liabilities and Equity
Liabilities

Current assets¥ 243,685¥ 323,830

		 Time deposits with deposit terms of over three months

162,668

111,796

		 Trade payables and other payables

		 Trade receivables and other receivables

646,542

764,514

		 Corporate bonds and loans

311,663

400,803

		 Other financial assets

11,6326,359

		 Other financial liabilities

71,807

71,683

		Inventories

194,427

223,714

		 Accrued income taxes

11,16327,097

		 Income tax receivables

21,106

9,359

		Provisions

7,397

7,754

		 Other current assets

42,35654,219		 Other current liabilities

12,872

19,284

Total current assets

1,322,420

1,493,793

Total current liabilities

810,603

1,005,876

		 Cash and cash equivalents

Current liabilities

889,220

		 Corporate bonds and loans

665,890

767,297

		 Goodwill and intangible assets

185,813361,797

		 Other financial liabilities

79,37570,912

149

337

		 Net defined benefit liabilities

92,55286,655

8,673

10,352

		Provisions

6,479

8,460

2,161,509

2,441,545

		 Deferred tax liabilities

567,803665,342		 Net defined benefit assets

18,12929,232		 Other non-current liabilities

19,03920,086

		 Deferred tax assets

23,80027,017

Total non-current liabilities

1,431,140

1,618,754

		 Other non-current assets

4,386

5,204

2,241,744

2,624,631

3,235,791

3,764,707¥4,558,212¥5,258,500

		Capital stock

80,46280,462

		Capital surplus

105,417

105,343		Retained earnings

954,503

1,084,139

		Treasury stock(59,272)(59,284)

1,159,181

1,342,730

2,240,293

2,553,391

76,17480,478

Total equity

2,316,467

2,633,869

Total liabilities and equity¥4,558,212¥5,258,500

		 Trade receivables and other receivables
		 Investments accounted for by the equity method
		 Other financial assets

Total non-current assets
Total assets

Total liabilities
EquityShare of equity attributable to owners of the parent

		 Other components of shareholders’ equity
Total share of equity attributable to owners of the parent
Non-controlling interests

Toyota Industries Report 2018

Financial Section /Corporate Information

833,329

Promotion of
ESG Initiatives

		 Property, plant and equipment

Strategies andBusinesses

Non-current liabilities

Company Introduction

Non-current assets

76

2017

77

Consolidated Statements of Profit or Loss

Consolidated Statements of Comprehensive Income

Toyota Industries Corporation
For the years ended March 31, 2017 and 2018

Toyota Industries Corporation
For the years ended March 31, 2017 and 2018

Millions of yen
2017

2018

Net sales¥ 1,675,148¥ 2,003,973

Cost of sales(1,278,378)(1,534,207)

396,769

469,765

		 Items not to be reclassified into profit or loss

(268,354)(334,347)

Other profit

11,411Other expenses

2017

2018

¥137,565¥173,816

			 Profit (loss) from FVTOCI financial assets

77,802

184,278

21,915

			 Remeasurements of defined benefit plans

4,862

3,629

(12,480)(9,887)

			Other comprehensive income of affiliates accounted for by the equity method

21

(4)

Operating profit

127,345

147,445

		 Total items not to be reclassified into profit or loss

82,686

187,903

Financial income

63,73470,279

		 Items that can be reclassified into profit or loss

Financial expenses(10,067)(10,046)

			 Foreign currency translation adjustment(18,913)(1,564)

974

2,149

1,242

1,419

181,986

209,827

			Other comprehensive income of affiliates accounted for by the equity method

162

24

(44,420)(36,010)

		 Total items that can be reclassified into profit or loss

(17,509)(120)

137,565

173,816

Total other comprehensive income after income taxes

65,177

187,782

202,743

361,599

		 Owners of the parent

197,355

355,101

		Non-controlling interests

5,387

6,497

Gross profit

Profit before income taxes
Income taxes
ProfitComprehensive income		 Owners of the parent

131,398

168,180

		Non-controlling interests

6,167

5,635

Earnings per share—diluted (yen)Toyota Industries Report 2018¥420.78—¥541.67—

Total comprehensive income attributable to:

Financial Section /Corporate Information

Earnings per share
Earnings per share—basic (yen)			Cash flow hedges

Promotion of
ESG Initiatives

Profit attributable to:

Other comprehensive income:Strategies andBusinesses

Share of profit (loss) of investments accounted for by the equity method

ProfitCompany Introduction

Selling, general and administrative expenses

78

Millions of yen

79Consolidated Statements of Changes in Equity
Toyota Industries Corporation
For the years ended March 31, 2017 and 2018

Millions of yen

Millions of yen

Share of equity attributable to owners of the parent

Capital stock Capital surplus

Other components of shareholders’ equity

Other components ofshareholders’ equity
Treasury stock

Profit (loss) from Remeasurements
FVTOCI financial
of defined
assetsbenefit plans

Total equity¥1,098,627¥2,098,658¥70,655¥2,169,313——

131,398

6,167

137,565

Cash flow
hedgesSubscription
rights toshares¥(32,799)¥(1,235)

¥ 6

—

—

Total

¥1,132,655

Profit——131,398———

Other comprehensive income

—

—

—

—

77,521

4,811

Other comprehensive income(17,618)

1,242—

65,95765,957(779)

65,177

Total comprehensive income——

131,398—

77,521

4,811

Total comprehensive income(17,618)

1,242—

65,957

197,355

5,387

202,743

Repurchase of treasury stock

—

(36)

—

(18,011)——

Repurchase of treasury stock

—

—

—

—

(18,048)—(18,048)

Disposal of treasury stock

—

(0)

—

5

—

—

Disposal of treasury stock

—

—

—

—

5

—

5

Dividends——(37,609)———

Dividends

—

—

—

—

(37,609)(2,290)(39,899)

Changes in ownership interest of subsidiaries

—

(62)

—

—

—

—

Changes in ownership interest of subsidiaries

—

—

—

—

(62)

30

(31)

Changes in non-controlling interests as aresult of changes in scope of consolidation

—

—

—

—

—

—

Changes in non-controlling interests as aresult of change in scope of consolidation

—

—

—

—

—

30

30

Reclassified into retained earnings

—

—

5,395

—

(584)

(4,811)

Reclassified into retained earnings

—

—

—

(5,395)———

Other increases (decreases)

—

—

—

—

—

—

Other increases (decreases)

—

—

(6)

(6)

(6)

2,360

2,354

Total transactions with owners

—

(99)

(32,213)(18,005)(584)(4,811)

Total transactions with owners

—

—

(6)

(5,402)(55,721)131(55,589)

80,462

105,417954,503(59,272)

1,209,592—(50,417)

6—

1,159,181

2,240,293

76,174

2,316,467

Profit——168,180

—

—

—

—

—

—

—

168,180

5,635

173,816

Other comprehensive income

—

—

—

—

183,956

3,525

Other comprehensive income(1,980)1,419—

186,920

186,920861

187,782

Total comprehensive income——

168,180—

183,956

3,525

Total comprehensive income(1,980)1,419—

186,920355,101

6,497

361,599

Repurchase of treasury stock

—

—

—

(12)

—

—

Repurchase of treasury stock

—

—

—

—

(12)

—

(12)

Disposal of treasury stock

—

—

—

—

—

—

Disposal of treasury stock

—

—

—

—

—

—

—

Dividends——(41,915)———

Dividends

—

—

—

—

(41,915)(2,390)(44,306)

Changes in ownership interest of subsidiaries

—

(74)

—

—

—

—

Changes in ownership interest of subsidiaries

—

—

—

—

(74)

—

(74)

Changes in non-controlling interests as aresult of changes in scope of consolidation

—

—

—

—

—

—

Changes in non-controlling interests as aresult of change in scope of consolidation

—

—

—

—

—

166

166

Reclassified into retained earnings

—

—

3,371

—

153

(3,525)

Reclassified into retained earnings

—

—

—

(3,371)———Other increases (decreases)

—

—

—

—

—

—

Other increases (decreases)

—

—

—

—

—

30

30

Total transactions with owners

—

(74)

(38,544)

(12)

153

(3,525)

Total transactions with owners

—

—

—

(3,371)(42,003)(2,193)(44,196)¥80,462¥105,343¥1,084,139¥(59,284)¥1,393,702¥

Balance at March 31, 2018¥(52,397)¥ 1,426¥—¥1,342,730¥2,553,391¥80,478¥2,633,869

Balance at March 31, 2017

Balance at March 31, 2018

Toyota Industries Report 2018

¥

—

—

Balance at April 1, 2016
ProfitBalance at March 31, 2017
ProfitFinancial Section /Corporate Information¥(41,266)

Promotion of
ESG Initiatives¥ 855,317

Strategies andBusinesses¥105,517

Company Introduction

Total

Noncontrollinginterests

Foreigncurrencytranslation
adjustment¥80,462

Balance at April 1, 201680

Retainedearnings

Share of equity attributable to owners of the parent

81Consolidated Statements of Cash Flows
Toyota Industries Corporation
For the years ended March 31, 2017 and 2018

Millions of yen
2017

2018

Cash flows from operating activities:

2,849(62,862)(67,115)Interest expenses

8,111

7,862

Share of (profit) loss of investments accounted for by the equity method(974)(2,149)(Increase) decrease in inventories(3,010)(23,875)(Increase) decrease in trade receivables and other receivables(16,249)(37,417)

Increase (decrease) in trade payables and other payables

28,589(452)

Others(16,772)(22,145)

Subtotal

269,912229,863Interest and dividends income received

63,186

67,401

Interest expenses paid

(8,374)(7,766)

Income taxes paid

(85,630)(20,929)

239,094

268,567(164,225)(200,115)

Proceeds from sales of property, plant and equipment

10,167

12,474

Payments for purchases of investment securities(30,612)(18,022)

Proceeds from sales of investment securities

7,591

136

Payments for acquisition of subsidiaries’ stock
resulting in change in scope of consolidation(2,855)(172,511)

Payments for loans made

(607)

(648)

Proceeds from collection of loans

958

950

Payments for bank deposits(373,122)(241,296)

Proceeds from withdrawals of bank deposits

480,742

292,010

Payments for transfer of business(3,269)(248)

Others(11,691)(13,052)(86,925)(340,324)

Cash flows from investing activities:
Payments from purchase of property, plant and equipment

Net cash used in investing activities

82

Toyota Industries Report 2018

463

70

Net increase (decrease) in short-term loans (within three months)

16,384(32,031)

Proceeds from short-term loans payable (over three months)

36,921

26,729

Repayments of short-term loans payable (over three months)(114,087)(26,607)

Proceeds from long-term loans payable

63,242

108,882

Repayments of long-term loans payable(36,084)(162,706)

Proceeds from issuance of corporate bonds

80,068294,596

Repayments of corporate bonds(20,000)(10,000)

Payments for repurchase of treasury stock(18,048)(12)

Cash dividends paid

(37,609)(41,915)

Cash dividends paid to non-controlling interests(2,290)(2,390)

Proceeds from payments by non-controlling interests

2,245

422

Others

29,714(572)

789

153,303

Translation adjustments of cash and cash equivalents(1,672)(1,400)Net increase (decrease) in cash and cash equivalents

151,286

80,145

Cash and cash equivalents at beginning of period

92,399243,685¥ 243,685¥ 323,830

Net cash provided by (used in) financing activities

Cash and cash equivalents at end of period

Financial Section /Corporate Information

2,136

Net cash provided by operating activities(1,159)Promotion of
ESG Initiatives

162,481Interest and dividends income(131)

Payments for acquisition of subsidiaries’ stock
not resulting in change in scope of consolidation
Proceeds from sales of subsidiaries’ stock
not resulting in change in scope of consolidation

Strategies andBusinesses

148,957

Impairment losses

2018

Company Introduction¥ 209,827

Depreciation and amortization

2017

Cash flows from financing activities:¥ 181,986

Profit before income taxes

Millions of yen

83Board of Directors, Audit & Supervisory Board Members andManaging Officers(As of June 30, 2018)

Directors
Chairman

Tetsuro Toyoda

Kazue Sasaki

Taku Yamamoto

Joined Toyota Motor Sales Co., Ltd.
Vice President of Toyota Motor Sales, U.S.A., Inc.
Director of Toyota Industries Corporation (TICO)Managing Director of TICO
Senior Managing Director of TICO
Executive Vice President of TICO
President of TICO
Chairman of TICO (current)
Chairman of the Central Japan Economic Federation(current)

Apr. 1977
Jun. 2003
Jun. 2006
Jun. 2008
Jun. 2010
Jun. 2011
Jun. 2013

Joined Toyota Industries Corporation (TICO)
Director of TICOManaging Officer of TICO
Senior Managing Officer of TICO
Director of TICO
Senior Managing Director of TICO
Executive Vice President of TICO (current)

Joined Toyota Industries Corporation (TICO)Managing Officer of TICO
Senior Managing Officer of TICO
Director of TICO
Director and Senior Managing Officer of TICO
(current)

Apr. 1980
Jun. 2012
Jun. 2016
Jun. 2018

Joined Toyota Industries Corporation (TICO)Managing Officer of TICO
Senior Managing Officer of TICO
Director and Senior Managing Officer of TICO
(current)

Akira Onishi

Executive Vice
President

Takuo Sasaki

Director

Yojiro Mizuno

Apr. 1981
Jun. 2005
Jun. 2006
Jun. 2008
Jun. 2010
Jun. 2013

Joined Toyota Industries Corporation (TICO)
Director of TICOManaging Officer of TICO
Senior Managing Officer of TICO
Senior Managing Director of TICO
President of TICO (current)

Full-Time Audit & Supervisory Apr. 1977
Board Member
Jun. 2005
Shinya Furukawa Jun. 2006
Jun. 2008
Jun. 2010
Jun. 2015
Jun. 2018

Joined Toyota Motor Sales Co., Ltd.
Director of Toyota Industries Corporation (TICO)Managing Officer of TICO
Senior Managing Officer of TICO
Senior Managing Director of TICO
Executive Vice President of TICO
Audit & Supervisory Board Member of TICO (current)

Full-Time Audit & Supervisory Apr. 1976	Joined Toyota Industries Corporation (TICO)
Board Member
Jun. 2006 Managing Officer of TICO
Toshifumi Ogawa Jun. 2010 Senior Managing Officer of TICO
Jun. 2012 Director of TICO
Jun. 2013 Senior Managing Director of TICO
Jun. 2016	Audit & Supervisory Board Member of TICO (current)

Apr. 1980
Jun. 2009
Jun. 2011
Jun. 2011
Apr. 2013
Apr. 2015
Jun. 2015
Jun. 2016
Jun. 2018

Joined Toyota Motor Co., Ltd.
Managing Officer of Toyota Motor Corporation (TMC)
President of Toyota Financial Services Corporation
Advisor of TMC
Managing Officer of TMC
Advisor of Toyota Industries Corporation (TICO)
Senior Managing Director of TICO
Director and Senior Managing Officer of TICO
Executive Vice President of TICO (current)

Outside Audit & Supervisory
Board Member

Apr. 1976
Jun. 2004
Jun. 2008
Jun. 2011
Jun. 2013
Jun. 2013
Jun. 2015

Joined Toyota Motor Co., Ltd.
Managing Officer of Toyota Motor Corporation (TMC)
Senior Managing Director of TMC
Director and Senior Managing Officer of TMC
Advisor of TMC
Director and President of Towa Real Estate Co., Ltd.
Audit & Supervisory Board Member of Toyota
Industries Corporation (current)
Executive Vice President of TMC
Director of TMC
Senior Advisor of TMC (current)
Chairman of the Board of Directors andRepresentative Director of Aioi Nissay Dowa
Insurance Co., Ltd. (current)

Outside Audit & Supervisory
Board Member

Apr. 1983
Jun. 2010
Jun. 2016
Jun. 2018

Joined Toyota Industries Corporation (TICO)Managing Officer of TICO
Senior Managing Officer of TICO
Director and Senior Managing Officer of TICO
(current)

Takahiko Ijichi

Jun. 2015
Apr. 2017
Jun. 2017
Jun. 2017

Akihisa Mizuno

Apr. 1978 Joined Chubu Electric Power Co., Inc. (Chubu
Electric Power)
Jun. 2008 Director, Senior Managing Executive Officer andGeneral Manager of Corporate Planning & Strategy
Div. of Chubu Electric PowerJun. 2009 Representative Director and Executive Vice
President of Chubu Electric Power
General Manager of Corporate Planning & Strategy
Div. and General Manager of Affiliated Business
Planning & Development Dept.
Jun. 2010 President & Director of Chubu Electric PowerJun. 2015 Chairman of the Board of Directors of Chubu ElectricPower (current)
Jun. 2016 Audit & Supervisory Board Member of Toyota
Industries Corporation (current)

Promotion of
ESG Initiatives

Apr. 1979
Jun. 2007
Jun. 2012
Jun. 2014
Jun. 2016

President

Strategies andBusinesses

Director

Apr. 1970
Feb. 1991
Jun. 1991
Jun. 1997
Jun. 1999
Jun. 2002
Jun. 2005
Jun. 2013
Jun. 2016

Company Introduction

Executive Vice
President

Audit & Supervisory Board Members

Yuji Ishizaki

Outside Director

Kenichiro
Yamanishi

84

Toyota Industries Report 2018

Apr. 1975 Joined Mitsubishi Electric Corporation(Mitsubishi Electric)
Apr. 2006 Executive Officer of Mitsubishi Electric
Apr. 2008 Senior Executive Officer of Mitsubishi Electric
Apr. 2010 Representative Executive Officer and President &CEO of Mitsubishi Electric
Jun. 2010 Director, Representative Executive Officer andPresident & CEO of Mitsubishi Electric
Apr. 2014 Chairman of Mitsubishi Electric
Jun. 2015 Director of Toyota Industries Corporation (current)
Apr. 2018 Director and Executive Corporate Adviser of
Mitsubishi Electric
Jun. 2018 Executive Corporate Adviser of Mitsubishi Electric(current)

Outside Director

Shuzo Sumi

Outside Director

Mitsuhisa Kato

Apr. 1970 Joined The Tokio Marine & Fire Insurance Co., Ltd.
(Tokio Marine)
Jun. 2000 Director and Chief Representative in London of Tokio
MarineJun. 2002 Managing Director of Tokio Marine
Oct. 2004 Managing Director of Tokio Marine & Nichido Fire
Insurance Co., Ltd. (Tokio Marine & Nichido)
Jun. 2005 Senior Managing Director of Tokio Marine & Nichido
Jun. 2007 President and Chief Executive Officer of Tokio Marine& Nichido
Jun. 2007 President and Chief Executive Officer of Tokio Marine
Holdings, Inc. (Tokio Marine Holdings)
Jun. 2013 Chairman of the Board of Tokio Marine & Nichido
Jun. 2013 Chairman of the Board of Tokio Marine Holdings(current)
Jun. 2014 Director of Toyota Industries Corporation (current)

Apr. 1975
Jun. 2004
Jun. 2006
Jun. 2006
Jun. 2007
Jun. 2010
Jun. 2010
Jun. 2011
Jun. 2012
Jun. 2015
Apr. 2016
Apr. 2017
Jun. 2017

Joined Toyota Motor Co., Ltd.
Managing Officer of Toyota Motor Corporation (TMC)
President of Toyota Technocraft Co., Ltd.
Advisor of TMC
Retired from Advisor of TMC
Retired from President of Toyota Technocraft
Senior Managing Director of TMC
Senior Managing Officer of TMC
Executive Vice President of TMC
Director of Toyota Industries Corporation (current)
Chairman of Toyota Central R&D Labs., Inc. (current)
Director of TMC
Senior Advisor of TMC (current)Managing Officers
Senior Managing Officers

Toshifumi Onishi
Taku Yamamoto*Keiichi Fukunaga
Junichi Harada
Yojiro Mizuno*
Masahiro Kawaguchi
Yuji Ishizaki** Concurrently serving as directors

Managing Officers

Yukihisa Tsuchimoto
Takashi Ito
Toshiya Yamagishi
Mikihiko Okamoto
Keizo Hara
Masafumi Kunito
Toshihiko Shimizu
Koichi Ito
Yasushi Kawai

Hiroaki Kayukawa
Toru Inagawa
Hiroshi Matsumoto
Kota Otoshi
Norio Wakabayashi
Kazunari Masuoka
Kazunari Kumakura
Hiroaki Matsuda
Hisashi Ichijo

Nobutomo Yasui
Shunji Sugimoto
Hisanori Miyajima
Kenichi Onishi
Hiroshi Fukagawa
Norio Otake
Hiroya Akatsuka
Yoichiro Yamazaki

Financial Section /Corporate Information

Director85

Major Production Bases

Investor Information(As of March 31, 2018)(As of March 31, 2018)

n Major Plants (Parent Company)
Plant

Location

Main Products

Start of Operations

Corporate Head Office

Stock Exchange Listings

TOYOTA INDUSTRIES CORPORATION
2-1, Toyoda-cho, Kariya-shi, Aichi, 448-8671, Japan
Telephone: +81-(0)566-22-2511
Facsimile: +81-(0)566-27-5650

Tokyo and Nagoya (Ticker Code: 6201)

Kariya Plant

Kariya-shi, Aichi

Textile machinery, compressors

1927

Obu PlantObu-shi, Aichi

Compressor parts

1944

Kyowa Plant

Obu-shi, Aichi

Electronic equipment, automotive press dies, production facilities, engine parts

1953

Nagakusa Plant

Obu-shi, Aichi

Vehicles1967

Takahama Plant

Takahama-shi, Aichi

Materials handling equipment, materials handling systems

1970

Date of Establishment

Independent Accountant

November 18, 1926

Common Stock

PricewaterhouseCoopers Aarata LLC
Otemachi Park Building 1-1-1 Otemachi, Chiyoda-ku, Tokyo,
100-0004, Japan

No par value
Authorized: 1,100,000,000 shares
Issued:325,840,640 shares

Transfer Agent
Special Account Management Institution

Hekinan-shi, Aichi

Diesel engines, gasoline engines

1982

Higashichita Plant

Handa-shi, Aichi

Foundry parts, diesel engines

2000

Higashiura Plant

Higashiura-cho, Chita-gun, Aichi

Compressor parts

2002

Anjo Plant

Anjo-shi, Aichi

Electronic equipment

2007

n Major Plants (Outside Japan)(including treasury stock)

Share unit:

15,803

Mitsubishi UFJ Trust and Banking Corporation
1-4-5, Marunouchi, Chiyoda-ku, Tokyo, 100-8212, Japan

100 shares

80,462 million yen

5
■
8
■
9
7■
■
6
■

2
3 ■
■
1
■
4
■

14
■
12 ■
13
■

Major Shareholders

16■

Location

Main Products

Year ofFoundation

1 Toyota Industrial Equipment Mfg., Inc.

U.S.A.

Columbus, Indiana

Materials handling equipment

1988

2 The Raymond Corporation

U.S.A.

Greene, New York

Materials handling equipment

1922

3 Michigan Automotive Compressor, Inc.

U.S.A.

Parma, Michigan

Compressors

1989

4 TD Automotive Compressor Georgia, LLC

U.S.A.

Pendergrass, Georgia

Compressors

2004

5 Toyota Material Handling Manufacturing Sweden AB

SwedenMjölbyMaterials handling equipment

1946

6 Toyota Material Handling Manufacturing Italy S.p.A.

Italy

Bologna

Materials handling equipment

1942

7 Toyota Material Handling Manufacturing France SAS

FranceAncenisMaterials handling equipment

1995

8 TD Deutsche Klimakompressor GmbHGermany

Bernsdorf

Compressors

1998

9 Uster Technologies AG

Switzerland

Uster

Textile machinery

1875

10 Toyota Industries Engine India Private Limited

India

Bengaluru

Diesel engines

2015

11 Kirloskar Toyota Textile Machinery Pvt. Ltd.

India

Bengaluru

Textile machinery1995

12 Toyota Industry (Kunshan) Co., Ltd.

China

Kunshan, Jiangsu

Automotive parts, materials handling equipment, etc.

1994

13 TD Automotive Compressor Kunshan Co., Ltd.

China

Kunshan, Jiangsu

Compressors

2005

14 Yantai Shougang TD Automotive Compressor Co., Ltd. China

Yantai, Shandong

Compressors

2012

15 P.T. TD Automotive Compressor Indonesia

Indonesia

BekasiCompressors

2011

BrazilSão Paulo

Materials handling equipment

2004

Toyota Material Handling Mercosur Indústria eComércio de Equipamentos Ltda

Toyota Industries Report 2018

Toyota Motor Corporation

76,60024.67

DENSO Corporation

29,647

9.55

Towa Real Estate Co., Ltd.

16,291

5.25

Toyota Tsusho Corporation

15,294

4.93

The Master Trust Bank of Japan, Ltd. (Trust Account)

11,503

3.71

Japan Trustee Services Bank, Ltd. (Trust Account)

10,706

3.45

Aisin Seiki Co., Ltd.

6,578

2.12

Nippon Life Insurance Company

5,922

1.91

Aioi Nissay Dowa Insurance Co., Ltd.

4,903

1.58

Toyota Industries Corporation Employee Ownership Program
Total

4,070

1.31

181,518

58.46

Notes: 1.	Toyota Industries Corporation also holds 15,353 thousand shares of treasury stock but is excluded from the above list.
2. Shares held for the purpose of trust services of respective banks are as follows:		 The Master Trust Bank of Japan, Ltd. (Trust Account)
11,503 (Thousands)
		 Japan Trustee Services Bank, Ltd. (Trust Account)
10,706 (Thousands)

Financial Section /Corporate Information

86

Country

Percentage of Total Shares in Issue(Except for Treasury Stock) (%)

Promotion of
ESG Initiatives

15■

Company Name

Number of Shares Held(Thousands)

Name

10 ■
11
■

16

Strategies andBusinesses

Capital Stock

Company Introduction

Hekinan Plant

Number of Shareholders

Distribution of Shares

0.6%
4.7%
6.1%
Japanese corporate entities
Foreign corporate entities and others

19.4%

48.4%

Japanese financial institutions
Individuals, etc.
Treasury stock

20.8%

Japanese brokerages

872-1, Toyoda-cho, Kariya-shi, Aichi 448-8671, Japan
Telephone: +81-(0)566-22-2511 Facsimile: +81-(0)566-27-5650
https://www.toyota-industries.com/

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