QFirst of all, could you sum up the Medium-Term Management Plan
that ended in fiscal 2016?

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In 2011, Toyota Industries formulated Vision 2020, along with the Medium-Term Management Plan that
articulates a path toward fiscal 2016 for the realization of Vision 2020, and we have since been steadily
implementing measures for growth.
During this period, economic growth slowed down in China and emerging countries including markets inSoutheast Asia, but the strong U.S. economy served to drive a modest recovery in the global economy asa whole.
Under these circumstances, we posted growth mainly in the materials handling equipment and automobilerelated fields by increasing global unit sales of materials handling equipment and car air-conditioning
compressors and by expanding business domains through such measures as enhancement of our value chainof materials handling equipment. Additionally, Toyota Industries and Toyota Motor Corporation (TMC) haveagreed to consolidate diesel engine development and production functions into the operations of Toyota
Industries. We are currently undertaking preparatory work for the consolidation.
Our proactive forward-looking investment, on the other hand, increased depreciation and other costs,
which in turn pushed profits down in the short term. Nevertheless, we have made progress overall, basically as
originally planned under the Medium-Term Management Plan, and readied ourselves for a next leap forward.
Overview of the Medium-Term Management Plan (FY2013–2016)
1Net Sales (¥ Billion)2[ ] = percentage of net sales

Operating Profit (¥ Billion)( ) = profit margin; [ ] = percentage of operating profit

2,166.6

2,230.0 2,228.9

2,007.8

1,543.3

117.5

1,615.2

107.6
1,004.1

Other

Stepping Up Efforts to Attain
Sustainable Growth for theRealization of Vision 2020

(5.4%)

70.0

Akira Onishi

President

77.0(4.8%)

79.7[62.3%]

Other803.1[46.9%]

Materials
Handling
Equipment

38.2[54.6%][52.0%]

Automobile(FY) 2012

3(5.7%)(5.4%)(4.5%)

1,045.7

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127.9[45.0%]

Materials 570.7
Handling [37.0%]
Equipment

Automobile

130.0

2013

2014

2015

Investment
Accumulated total
from FY2013 to FY2016:
Approx. ¥780.0 billion(Of which approx. ¥400.0 billion isinvested in tangible assets)

4[26.0%][30.3%](FY) 20122016[Plan] [Results]

33.3

21.2
2013

2014

2015

2016
[Plan] [Results]

ROA and ROE (FY2016)
ROA
ROE

Targets
5.0%
10.0%

Results
7.3%
20.8%

Notes: • Including gain on sales of shares of Asahi Security Co., Ltd.
and Wanbishi Archives Co., Ltd.
• Investment securities included in calculations based onacquisition cost

• Achieved a continued expansion of business, centered around materials
handling equipment and automobiles• Costs increased due to proactive investment but net sales andoperating profit were virtually as planned.

10Toyota Industries Report 201611Top Interview

Q

What is the future direction of your business operations?

Toward the realization of Vision 2020
The idea embodied in Vision 2020 is to contribute to an enriched lifestyle of people and comfortable society
around the world by continuously supplying products and services that are truly needed by customers, which
in turn will allow us to attain growth of our businesses and realize the vision. The Medium-Term Management
Plan ended in fiscal 2016, but we will continue to pursue further growth by stepping up our efforts toward therealization of Vision 2020.
Our basic strategy consists of the three action themes shown below. We will apply these themes across ourbusiness units in a horizontally aligned manner.
•	Development of eco-friendly, energy-saving products based on the keywords of 3Es (Energy,Environmental protection and Ecological thinking)• Enhancement of our value chain, including after-sales services• Business development in world markets
Ongoing “concentration and selection” strategy
In realizing Vision 2020, we have been implementing a strategy of “concentration and selection” of business
operations. Specific actions taken since 2007 include withdrawal from the consumer electronics field andconsolidation and restructuring of the Logistics Business. In December 2015, we sold our stakes in two
logistics-related consolidated subsidiaries, Asahi Security Co., Ltd. and Wanbishi Archives Co., Ltd.

Vision 2020

Further Promoting Our Efforts toward Vision 2020
Support industries and social foundations around the world by continuously supplying
products/services that anticipate customers’ needs in order to contribute toan enriched lifestyle and comfortable society

To contribute to an enriched lifestyle and comfortable societySolutionKey Components
NewProductNew
ProductNew
ProductNew
ProductNew
Product

3Es (Energy, Environmental protection and Ecological thinking)<Technological innovation in environment/energy areas>

Value Chain<Expansion of value chain>

World Market<Business development in world markets>

Contribute to realizing a society
with minimum environmental
impact through technologicalinnovation in environment/
energy areas

12Mobility

Create new business value by
strengthening both hardware
and software development by
cultivating technology “seeds”

Develop businesses all over theworld and meticulously
respond to each region’s
customer needs

Maintain the world’s
highest-level SEQCD byimproving our business basedon team strength and TPS

Strengthen growth potential byleveraging synergies among
divisions, strategic M&As andalliances

We had made these companies into our subsidiaries with the aim of expanding consigned logistics
services. We have subsequently provided operational improvement support to both companies, which in turn
attained a certain level of growth. Nevertheless, we decided to sell off our stakes based on the belief that it will
be beneficial for them to work with companies that can generate greater business synergies and make greatersteps forward.
We will continue to implement a “concentration and selection” strategy to focus on businesses that areclosely linked to our core businesses in the materials handling equipment and automobile-related fields.

Q

Could you explain your policies concerning
initiatives to be made in each business?

In the Materials Handling Equipment
Business, we will focus more on thedevelopment of products with highenvironmental performance, for which needs
are growing. In order to improve the fuelefficiency of internal-combustion lift trucks anddeliver longer uptime for electric lift trucks, wewill increase the use of engines and motors
developed and manufactured in-house. On topof providing equipment such as lift trucks, weService Skills Contest
GENEO-Ecore electric lift truck
will improve the quality of our after-sales
services, for which we are already renowned,
and offer a range of logistics solutions based on our accumulated know-how in operational improvements toassist customers in achieving total logistics efficiency and reducing environmental impact.
To satisfy diverse needs of customers in a more precise manner, we made Cascade Corporation, one of theworld’s leading manufacturers of lift truck attachments based in the United States, into a subsidiary in 2013. Aspart of efforts to increase our presence in emerging countries, we acquired the lift truck business of Taiwanbased Tailift Co., Ltd. in 2015. In the same year, we also acquired the materials handling equipment division ofTMC’s financial subsidiary in the United States to strengthen our sales financing operations. Through theseendeavors, we have created a foundation on which to expand our value chain. In the future, we plan to pursue
synergistic effects and consistently yield successful results.
In automobile-related businesses, we regard the increasingly stringent fuel efficiency standards across theworld as a driver of our growth and will push ahead with development of products with high fuel efficiency in
the Car Air-Conditioning Compressor Business. Besides fuel-efficient compressors for internal-combustion
vehicles, we plan to increase the competitiveness of our compressors for electric-powered vehicles, keeping
pace with the growth of vehicle electrification.
On the production front, we have already established a structure needed to swiftly respond to an increase inorders from automakers by augmenting production capacities of our production bases outside Japan andincreasing the ratio of locally procured parts. To fully leverage the established structure, we will strive for quality
improvement at these bases and help them become self-reliant and grow sustainably on their own. We will
make meticulous efforts, such as passing on our proprietary skills and the thinking behind monozukuri(manufacturing) to key human resources, to ensure higher quality and more stable mass production operationsanywhere in the world.
In the Vehicle Business, we expect vehicle
production in Japan to remain flat for themedium to long term. Even so, we intend tohone our already superior level of safety, theenvironment, quality, cost and delivery(SEQCD) and create plants that integrate
our latest knowledge and ingenuity. Besides
Ceremony to commemorate cumulative production of 100 million
units at a U.S. compressor production baseToyota Industries Report 2016

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Teaching employees from outside Japan13

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assembly of vehicles, we plan to proactively engage in vehicle development by conducting planning activities andmaking proposals to TMC.
In the Engine Business, we will proceed with a plan, as agreed with TMC, to shift and consolidate diesel
engine development and production functions to Toyota Industries. Although electrification of vehicles isexpected to make gradual progress, we anticipate sustained needs for diesel engines that are inherently fuelefficient and generate less CO2 emissions. Thus, our policy to concentrate harder on the development of clean
diesel engines remains intact. We will enhance the competitive edge of diesel engines, including those fittedwith our first vehicle-use turbocharger that was internally developed in 2015 and manufactured. At the sametime, we will also strive to expand the use of our internally manufactured engines in ourown lift trucks and other industrial machinery. By doing so, we plan to increase the scaleand efficiency of our business.
In March 2016, Toyota Industries Engine India Private Limited (TIEI), a consolidated
subsidiary in India, initiated production of GD diesel engines for TMC’s Innovative
International Multi-purpose Vehicle (IMV) series. We will nurture the company into an
important production base of diesel engines, for which demand is expected to grow in
Toyota Industries Engine
emerging and other countries for use in commercial vehicles.
India Private Limited
In the Electronics Business, needs for greater fuel economy and environmental performance are growing not
only in the automobile field but also in materials handling equipment and other non-automotive fields. These
growing needs are expected to facilitate a trend toward electrification. In response, we will reinforce activities toplan and develop new products based on our power source technologies and will expand sales to TMC andother automakers in the world. We will also work more closely with the Materials Handling Equipment Divisionand other business divisions to increase our role in non-automotive fields.
Our efforts in the Textile Machinery Business will include promotion of proactive sales activities andestablishment of a meticulous after-sales service structure. Moreover, we plan to collaborate with Uster
Technologies AG, a Swiss-based consolidated subsidiary, to develop next-generation products with greater
energy-saving performance and even higher added value.

Q

Toyota Industries Report 2016

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Society Envisioned in 2050
—Example initiative for the creation of a zero CO2 emission society—

Taking on a challenge of achieving zero CO2 emissions from use of our products or vehicles equipped with our products
Image of an energy society with zero CO2 emissions
PHV & EVFC bus

Hydrogen charging station• Electric car air-conditioning compressor• Motor/inverter• DC-DC converter, etc.

What will be the focus of management in achieving sustainablecorporate growth?

The business environment in the world market is changing at an increasingly rapid pace while the global
economy is becoming ever more interdependent. An event in one region could now affect the rest of the world,
causing unstable conditions to linger and making economic fluctuations larger. More imminently, continued
economic growth in China and other emerging countries is slowing, and there is a persistent economic
fluctuation risk linked to national financial policies. In order for us to flexibly adapt to the economic fluctuation
risk and changes in the market environment, it is essential that we strengthen our business platform
further through cost reductions and productivity improvements and always maintain a lean businessstructure to prepare for changes.
Our expanding business operations also entail greater risks. We need to prevent these risks from occurringand make a quick and appropriate response should they occur. We have approximately 50,000 employees
working around the world, and corporate culture and ethics are not enough to bring all of us together. As such,
we will base our actions on the Toyoda Precepts, which carry the spirit of founder Sakichi Toyoda to respecthumanity and take on challenges; use various systems and rules as a means to avoid misconduct; and work to
fully observe corporate ethics and ensure compliance.
After strengthening our platform and preparing ourselves for the future, we will take steady steps forward for
future growth. Cost reduction and structural reinforcement are essential in attaining sustainable growth, butthese alone will not be effective in preventing our products from becoming commoditized and getting us
dragged into price competition. To avoid such a situation, what we need are innovative and appealing products
and services. We will enhance our R&D operations and manufacturing capability further while seeking toencourage innovations.

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Recently, we have entered a new business field of fuel cells and have developed several products byleveraging a pool of technologies accumulated in the field of car air-conditioning compressors. One example isan oxygen-supplying air compressor. It is a key component of the power generation system of fuel cell vehicles(FCVs) and has been installed in TMC’s MIRAI FCV. In the materials handling equipment field, which forms oneof our core businesses, we have been conducting a feasibility test of our fuel cell (FC) lift
truck for possible release during fiscal 2017.
As described above, we aim to encourage innovations by capitalizing on our strengths
derived from our diverse businesses and focusing on overlaps and synergies among
business domains.
To contribute to realizing a society with zero CO2 emissions by 2050 with the ultimate
goal of enriching the lives of people in harmony with the natural environment, Toyota
Industries formulated the Sixth Environmental Action Plan. This is a five-year activity plancovering the period from fiscal 2017 to fiscal 2021. Since the First Environmental Action
Feasibility test of FC lift truck
Plan launched in 1993, our focus of activity had been on environmental conservation.
However, as external circumstances have changed, we have decided to place greater emphasis on“Establishing a Low-Carbon Emission Society” in our sixth plan.
We will foster the development of energy-saving, electrification and other technologies and continue toprovide eco-friendly products mainly in the business fields of materials handling equipment and automobiles,
thereby contributing to the realization of a society that has less impact on the environment.

• FC peripheral device• Electric car air-conditioning compressor

PHV & FCV• FC peripheral device• Electric car air-conditioning compressor• Inverter, etc.

Electric/FC lift truck• Electric powertrain• Electric car air-conditioning compressor• DC-DC converter, etc.
FCV

* Excerpt from the Sixth Environmental Action Plan material presented by Toyota Industries Corporation

Companies have a public presence in society. As
such, we need to achieve sustainable growth for all
our stakeholders, including customers, business
partners, shareholders and investors, members of
local communities and Toyota Industries Groupemployees and their families.
The Toyota Industries Group will continue ourefforts to contribute to the growth of society throughour businesses.

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