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