Toyota Industries in Progress
Progress 1

Materials Handling Equipment
Unifying Forces to Maximize Synergies

Progress 2

28

page

32

page

36

Electronics
Uniting with Key Electronics Industry Players to Drive Our Future Growth

14

page

Vehicles/Engines
Applying Our Combined Knowledge and Synergies to Produce a Global Lineup of
Automobile-Related Products

Progress 4

16

Car Air-Conditioning Compressors
Integrating Cutting-Edge Technologies to Lead the Global Market

Progress 3

page

TOYOTA INDUSTRIES CORPORATION Annual Report 2005

Progress 5

Logistics Solutions
Building a Proprietary Business Model to Provide Optimum Logistics Solutions

Progress 6

page

43

page

44

page

44

Automotive Stamping Dies
Creating Advanced Technology for Manufacturing Automotive Stamping Dies

Progress 8

40

Textile Machinery
Delivering Leading-Edge Performance Backed by Proven Expertise

Progress 7

page

Manufacturing Equipment
Independently Producing Critical Manufacturing Equipment

TOYOTA INDUSTRIES CORPORATION Annual Report 2005

15

Progress

1

Materials Handling Equipment

Toyota Industries in Progress
Toyota Industries in Progress

Unifying Forces to Maximize Synergies
Toyota Industries’ Materials Handling Equipment Segment consists mainlyof TOYOTA Material Handling Company (TMHC), the global leader incounterbalanced lift trucks, and the BT Industries Group, the world’s top name inwarehouse trucks. This segment also includes Aichi Corporation (Aichi), a Toyota
Industries subsidiary that holds a dominant share of Japan’s market for aerial
work platforms. Toyota Industries is building a solid position in the increasinglycompetitive industrial equipment industry as a leading manufacturer of lift trucks byoffering optimum solutions to meet customer needs.

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TOYOTA INDUSTRIES CORPORATION Annual Report 2005

The establishment of the Toyota Material Handling Group was announced at the Toyota Industries World Convention 2005, which
gathered over 1,200 TOYOTA/BT-related people from more than 60 countries.

Toyota Industries in Progress Materials Handling Equipment

Pursuing Further Integration—
Establishment of the Toyota Material Handling Group

Above: President Tetsuro Toyoda(then Toyota Industries Executive Vice
President and TMHC President). Below:
Per Zaunders (BT Industries President)

President Tetsuro Toyoda (then Toyota Industries Executive Vice President and TMHC President) stated at the Toyota
Industries World Convention 2005:“I want to announce the Toyota Material Handling Group (TMHG). As our internal organization, TMHG will be more
integrated with stronger global coordination for realizing our common interest in our mutual success.”“I would like to emphasize that TMHG will be a true global integration that does not consider nationalities or company
origin.”“The purpose of the integration is not just to combine the organizations but to achieve higher targets. TMHG will be designed
to realize the original purpose of our integration: attaining our full potential.”“Of course, we will continue to capitalize on the strengths of our separate brands. We will endeavor to make our present sales
network even stronger.”President Tetsuro Toyoda (then Executive
Vice President)

Chairman Tadashi Ishikawa (then President) remarked:“In establishing TMHG, it is exactly the time to step up to a new level of integration as we have now reached the stage forcompleting the integration of TMHC and the BT Industries Group.”“With a supporting philosophy of placing utmost value on customers, TMHG offers the world’s top level of high quality toensure customer satisfaction in every region worldwide. While compiling newly developed technologies for realizing ourphilosophy, we will stress the participation of all persons and the allocation of their roles. These persons include personnel
from the Toyota and the BT Industries Group; persons at manufacturers, sales outlets and cooperating companies; and staff
involved in sales, development and manufacturing. This approach conveys the meaning embodied in ‘United We Grow,’ theslogan of the Toyota Industries World Convention 2005.”
Chairman Tadashi Ishikawa (then President)

TMHC and the BT Industries Group have made steady progressin expanding synergies by mutually supplying each other’s brandproducts, sharing sales and production know-how, exchanging
personnel and jointly procuring components. Building uponthis success, Toyota Industries’ Materials Handling Equipment
Segment has set a new ambitious target of becoming “undisputed

No. 1” in the global lift truck market. To achieve this goal, in
July 2005 we established the Toyota Material Handling Group(TMHG), a new organization that we expect will facilitate
further integration of the operations of TMHC and the BT
Industries Group and maximize synergies.

TOYOTA INDUSTRIES CORPORATION Annual Report 2005

17

Toyota Industries in Progress Materials Handling Equipment

Representatives from TOYOTA/BT distributors in various regions pledged solid
unity and their efforts to achieve higher goals.

global coordination for each of these functions, as wellas promote the sharing and exchange of information andknow-how.
To minimize any operational disruptions accompanying the
integration, TMHG’s Management Committee will consider
the ideal form in terms of integration and organization. On thisbasis, we will determine and design an optimal organizational
structure as we take our utmost efforts to achieve further
integration one step at a time. In view of the strategic importanceof this integration, Toyota Industries’ President Tetsuro Toyoda
will concurrently serve as TMHG’s president.

TMHG’s Organization
TMHG has divided its global operations into Europe, North
America and International, and a Board has been establishedas the decision-making body within each of these three
regional organizations. A Management Committee—madeup of representatives of each regional organization as well as
the head of finance and the global head of operations fromthe headquarters in Japan—manages TMHG as a whole.
Comprised of relevant sections of each regional organization,
the Sub-Committees handle such principal functions as quality,
R&D, manufacturing, production and product planning andhuman resources development as well as undertake common

Toyota Industries and BT Industries are jointly developing a new three-wheel lift
truck incorporating advanced AC technology. This product will be introduced into
the European market after being customized for respective brands.

TMHG’s Values and Principles
TMHG’s 10 Values and Principles, which represents a common ground in proceeding with further integration of TMHC
and the BT Industries Group, are as follows.
1. Be customer-focused and responsive to customers’
requirements.
2. Become undisputed No. 1 on a global basis as well as
in key regions.
3. Develop international leadership and managementby maximizing our present human resources.
4. Shoot for high financial performance.
5. Meet challenges in terms of both volume andefficiency.
6. Commit to Toyota’s high-quality standards inproducts, services and operations.

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TOYOTA INDUSTRIES CORPORATION Annual Report 2005

7. Move to standardized processes, clarify Key
Performance Indicators and share information toincrease transparency.
8. Aim for more integrated product development
through the aggressive development and sharing of
key components.
9. The regions are the core of the new organizationand their teams must commit to achieving the above
targets and follow the principles.
10. Functional coordination, global standardization andother collective efforts will be strengthened andregional leaders are strongly expected to place highpriority on important horizontal coordination.

The Materials Handling Equipment Segment willcontinue providing products under the TOYOTA andBT brands, with TMHC and the BT Industries Group
committed to maintaining close mutual cooperation on a
global scale within the TMHG framework. In this way,

Toyota Industries intends to fully utilize the assets of BT
Industries’ BT and Raymond brands solidly positioned
in both Europe and North America. Although not apart of the TMHG organization, Aichi also expects tomaintain its own brand as a top manufacturer of aerial
work platforms in Japan.

TOYOTA Material Handling Company

BT Industries Group

Japanese market

Europe and other regions except
North America

Non-Japanese markets

North America

Materials handling equipment manufactured by
TMHC is sold in Japan under the brand name of
TOYOTA L&F (Logistics and Forklifts), which refers
to materials handling systems as well as industrial
vehicles and equipment. Outside Japan, the TOYOTAINDUSTRIAL EQUIPMENT brand/emblem is used.

BT Industries uses the brand names BT in Europe
and other regions, and Raymond in North America.
BT Industries also uses the Cesab, Prime-Mover andLift-Rite brand names in certain markets.

Toyota Industries in Progress Materials Handling Equipment

Brand Portfolio

Aichi Corporation
Aichi manufactures and sells aerial work platforms, digger derricks andother equipment. Aichi uses the AICHI brand throughout the world.
Visit www.aichi-corp.jp for further information.

TOYOTA INDUSTRIES CORPORATION Annual Report 2005

19

Toyota Industries in Progress Materials Handling Equipment

TOYOTA Material Handling Company
Globally Focused Execution of Unified
Development, Production, Sales andDecision-Making
TMHC was established as an in-house company in April 2001
after Toyota Industries took over the industrial equipment
sales and marketing operations of Toyota Motor Corporation.
This consolidation was aimed at cultivating materials handlingequipment as a core business within the Toyota Group and firmly
positioning Toyota Industries as one of the world’s foremost
comprehensive manufacturers of materials handling equipment
and systems. TMHC strives to meet customer needs throughimplementing unified development, production and sales
functions and quick decision-making via a global perspective.

TOYOTA materials(including lift trucks, shovel
handling eqiuipment sales
loaders, tow tractors and others)(Thousand units)(Target)120
amounted to a record-high 103,756
112
103.8
100
units, marking the first time that
85.7
annual sales surpassed the 100,000
80unit mark. Moreover, this was60
the first time in the industry that40
annual sales of a single brand have20
exceeded 100,000 units.
0
Operating production bases in
CY 01 02 03 04 05
Japan, the United States, France
and China, TMHC provides outstanding products and services
to customers through a global sales and service network
comprising more than 300 base stations in over 50 countries.

2004 Milestones
During calendar year 2004, Toyota Industries’ total worldwide
unit sales of TOYOTA-brand materials handling equipment

Please visit www.global-toyotalifts.com for more information on
TMHC’s global sales network and products.

Operations in Japan
Mirroring a robust recovery in the Japanese economy, total
demand in the domestic market for lift trucks in calendar year
2004 increased 10% over 2003, the first double-digit increase in
15 years. During the same period, TMHC sold 32,133 lift trucks,
an increase of 10%, virtually the same growth rate as the market.
TMHC carried out proactive sales activities by strengthening
its response to large-scale and wide-ranging customers and bypromoting proposal-based marketing. In line with strengthening
our lineup of large internal
combustion counterbalanced
lift trucks, in August 2004,
we commenced sales of 14
models of 10-ton to 24-ton
lift trucks after a full modelchange in Japan and several
countries overseas.

The series of 10- to 24-ton internal combustion
counterbalanced lift trucks are the world’s firstmodels in their class to be fitted with a diesel turbo
engine with a common rail direct injection system,
achieving the highest level of power output, excellent
fuel economy and clean exhaust emissions. They arealso equipped with a highly durable 2-stator torquecontroller and efficient wet-type disk brake offering
low maintenance and improved safety.

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TOYOTA INDUSTRIES CORPORATION Annual Report 2005

For calendar year 2004, TMHC achieved a market share of
42.6% for sales of lift trucks in Japan, the same record-high level
as in the previous year. This marks the sixth consecutive yearthat Toyota Industries’ market share has surpassed 40% and the39th consecutive year that TMHC has maintained its top-ranked
position in the Japanese lift truck industry.

Looking Ahead
In 2005, Toyota Industries expects the domestic market for lift
trucks to continue to show solid growth. Amid this environment,
we will work to expand sales and market share by providing
products and services that we hope will deliver even greater
customer satisfaction. Efforts are to include carrying out
proposal-based marketing that offers solutions that accurately
address customer needs as well as promoting a fleet management
program to major customers.
In Japan, TMHC develops, produces and sells a wide lineup
of materials handling systems that include racks, automatic
guided vehicle systems, and automated storage and retrieval
systems.
TMHC supplies TOYOTA-brand products through a strong
and well-organized sales network of 41 dealers nationwide.

TMHC responds precisely to customer needs with anextensive product lineup—from lift trucks to automatedstorage and retrieval systems—for warehousing, storing
and low-level or high-level order picking. Very narrow
Order picking trucks

Racks

Counterbalanced lift trucks

Walkie rider trucks

aisle trucks and other warehouse trucks supplied by
BT Industries make TMHC’s product line even morecomprehensive.
Automated storage andretrieval systems

Automatic guided vehicle systems

Toyota Industries in Progress Materials Handling Equipment

TMHC’s Extensive Product Lineup in the Japanese Market

High-speed sorting equipment

Standardization of OPS System in the GENEO Series (7 Series)
The GENEO Series (7 Series overseas), Toyota
Industries’ mainstay lift trucks, will now come equippedwith the operator presence sensing (OPS) system asstandard specification to enhance operator safety. In
Japan, starting with the GENEO (7FG/D overseas)internal combustion counterbalanced lift truck produced
from August 2005, the lineup will be expanded toinclude the GENEO-B (7FB), GENEO-R (7FBR) and
GENEO-E (7FBE) electric lift trucks produced from
September 2005. For the overseas markets, we plan torelease principal products along a similar timeframe.
When the OPS system senses the operator is not ina normal operating position, it stops powered travel andpowered hydraulic functions (loading OPS system* andtraveling OPS system**) to minimize the likelihood ofaccidents due to operational errors and when the operator
is out of the operating position.
* The loading OPS system automatically stops powered loading
operations when the operator is not positioned normally. This function
minimizes the likelihood of serious accidents that may arise from theoperator inadvertently trying to work from an unsafe position.
** The traveling OPS system senses whether the operator is properly
seated via a seat switch. When the operator is not properly seated, thesystem automatically stops powered travel.

TOYOTA INDUSTRIES CORPORATION Annual Report 2005

21

Toyota Industries in Progress Materials Handling Equipment

Products for the Japanese Market — Industrial Vehicles

GENEO (7FD25)
Internal combustion
counterbalanced lift truck

GENEO-B (7FB15)
Electric counterbalanced lift
truck

GENEO-E (7FBE15)

GENEO-R (7FBR15)

2TE18

Three-wheel electriccounterbalanced lift truck

Electric reach truck

Electric tow tractor

Products for the Japanese Market — Materials Handling Systems

Partner Rack

Rack Sorter B

Rack Sorter P

Road Sorter H

2AFBR15APLB8Rail-less mobile rack

Automated storage andretrieval system(Plastic container type)

Automated storage andretrieval system(Pallet type)(ACBH10)
Automatic guided
vehicle system

Automatic guided
lift truck

Automatic guided
pallet truck

Truck Mount Aerial Work Platforms

SH15B

SE08B

TZ-10A type “RR”

Self-Propelled Aerial Work Platforms

SC40A

SR-18AJ

RX07B

Note: Although Aichi Corporation is not integrated into the Toyota Material Handling Group, it comprises an imporant part of the Materials Handling Equipment Segment.

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TOYOTA INDUSTRIES CORPORATION Annual Report 2005

Headquartered in Irvine, California, Toyota Material Handling,
12 years at the show that
U.S.A. (TMHU) has led the industry as the top-selling lift truck
attracted 35,000 attendees.
supplier in the United States for the past three years. Of the
At the same time,
Toyota lift trucks sold in the U.S., 99% are manufactured in
TMHU expanded its
North America with the majority being built at Toyota Industrial
order picker lineup by
Equipment Manufacturing (TIEM), based in Columbus, Indiana.
launching an electric
According to Industrial Truck Association data, in 2004 thenarrow aisle order picker
A compressed natural gas option is available
for Toyota’s 4,000-6,500 lb. internalindustry as a whole enjoyed more than 20% growth over 2003.
along with six newly
combustion cushion and 3,000-6,500 lb.
Also during 2004, the 200,000th Toyota lift truck rolled off theenhanced electric pallet
pneumatic lift truck models.
line at TIEM. In addition, TMHU introduced several Toyota
truck models.
products to the United States rounding out its line to include new
TMHU also introduced a TIEM factory-installed compressed
electric reach trucks, counterbalanced electric stand-up rider
natural gas (CNG) fuel option in response to the new U.S.
trucks, an electric pallet truck and an electric stand-up tugger
Environmental Protection Agency (EPA) and California
model.
Air Resources Board (CARB)TMHU also announced theregulations. This option is available
results of its customer satisfaction
on several lift truck models, carries
survey that measures satisfaction
the Underwriters Laboratory
with dealers’ sales process, service(UL) listing and is certified toand parts support, and productmeet 2005 EPA and CARB
quality. The program, Voice ofemissions regulations in all 50
the Customer (VOC), found thatstates. Toyota reinforced its total
92% of Toyota customers would
solutions philosophy by becoming
recommend their local dealershipthe first, and currently only, lift
based on their experience with thetruck manufacturer to develop
sales and delivery process.
this factory-installed, EPA- andToyota’s new National Customer Center 360-degree showroomfeaturesacomprehensive
collectionofToyota’s
current
lift
trucksToyota closed 2004 with three
CARB-certified option for the U.S.
as well as the first Toyota lift truck sold in the U.S. in 1967 and theindustry honors, including Modern
market.
first lift truck built at TIEM in 1990.
Materials Handling magazine
Looking Ahead
naming Toyota the largest lift truck supplier in the world for the
Industry growth is forecast to continue at a slower pace infourth year in a row. In addition, Crist Information & Research
2005. Amid this environment, Toyota’s commitment to theranked Toyota as the manufacturer with the largest market share
U.S. market is reflected in its US$11 million investment in thein the United States, and a survey conducted by Reed Research
108,000-square-foot expansion of the TIEM facility that houses
Group of 600 Modern Materials Handling readers ranked
the National Customer Center. To further support its customers,
Toyota first in quality
this expansion resulted in a newly enlarged sales office and a
and value.
42,500-square-foot addition to Toyota’s distribution center. The
2004 Milestones
TIEM campus now totals 859,000 square feet of manufacturing
TMHU started the year
and support space and houses nearly 800 associates.
by exhibiting at Promat,
Toyota has 70 authorized Toyota Industrial Equipment
North America’s mostdealers with a total of 186 U.S. dealership locations nationwide
comprehensive showcase
to offer comprehensive customer service support, includingof materials handling andone-stop shopping for both new and certified used lift trucks,
logistics technologies.
parts, service and financing.
This was Toyota’s firstThousands of attendees visited the Toyota
booth at Promat, the largest materials
corporate appearance in
For more information on TMHU, visit www.toyotalift.com.
handling show in North America.

TOYOTA INDUSTRIES CORPORATION Annual Report 2005

Toyota Industries in Progress Materials Handling Equipment

Operations in the United States23

Toyota Industries in Progress Materials Handling Equipment

Operations in Europe
Based in Brussels, Belgium, Toyota Industrial Equipment Europe(TIEE) is one of the largest suppliers of materials handlingservices and products in Europe, with 20 distributors operatingin 27 countries. Toyota’s European lift truck production plant,
located in Ancenis, France, is certified with ISO 14001.
The European Parts Centre is based here, allowing Toyota’s
European distributors to source and supply more than 20,000
spare parts within 24 hours.

Market Development

In 2004, TIEE continued to enhance
its materials handling range with theintroduction of an innovative Deluxe
Cabin and a new-generation
lineup of heavy-duty
stackers (7SLL).
Available on 7ICmodels, with capacity
ranging from 2 to 3.5
tons, the Deluxe Cabin
7SLL heavy-duty powered stacker
provides complete
driver comfort in all weather and working conditions. The 7SLL
series is built around the Toyota Powerdrive system, whichsignificantly improves safety, reliability and performance, andwith lift heights of up to 5.4 meters,
ensures accurate and safe handling incongested areas.

In terms of overall performance in 2004, the European market
showed signs of recovery from a challenging 2003 and grew by
8%, reaching its highest level ever. The European market for
counterbalanced lift trucks also improved, with sales increasingby 12%. Compared to 2003, the market for warehouseequipment grew by 5%.
TIEE reported excellent results,
outperforming the European market
with an increase in sales of over 12%.
Looking Ahead
The company also continued to develop
The Central and Eastern European market
its network across Europe in 2004 andis expected to grow further in 2005
reported strong sales in the fast-growing
with investment in these countries set toCentral European region, with a record
continue.
increase of 30%.
Although the first quarter of 2005
Innovation in customer services was
TIEE’ssales&
marketing
offi
ce
in
Brussels,
Belgium
has shown the market increasing by 5%
strong in 2004, with the ASEC service
year-on-year, there are some concerns
certification program established by TIEE
about an economic slowdown in Europe in 2005.
to set industry-leading standards in customer satisfaction. ASEC
TIEE has a comprehensive plan for growth in the next year,
assesses all aspects of after sales such as how Toyota deals withincluding the development of a range of customized solutions to
its customers, procedures followed by engineers, and health,ensure customer satisfaction throughout Europe. These solutions
safety and environmental requirements. This will ensure thatwill include innovative, high-quality products supported by
Toyota’s high-quality service is consistently delivered acrossa broad array of value-added services such as driver training,
Europe.
finance, rental and fleet management.
Toyota Fleet Management will help businesses identify
the issues affecting their materials handling systems.
Through detailed and accurate analysis, TIEE will clarify thedecision-making process to help customers invest in the rightsolution.
Encompassing 350 service outlets, TIEE will continue
to strengthen its sales and service network. TIEE remains
committed to after-sales service and support, and will focus onoffering tailor-made service packages that meet each and every
customer’s needs.
Toyota Industrial Equipment, S.A., our lift truck production base in France,
manufactures approximately 14,000 lift trucks annually for the European market.

24

Product Development

TOYOTA INDUSTRIES CORPORATION Annual Report 2005

For further information please visit www.toyota-tiee.com.

7FGU70

7FGCU25

7FGCU35-BCS

Internal combustion pneumatic tire
counterbalanced lift truck

Internal combustion cushion tire
counterbalanced lift truck

Internal combustion cushion tire
counterbalanced lift truck—boxcar
special model

7FBEU15

7FBCU25

7BPUE15

Three-wheel electriccounterbalanced lift truck

Electric cushion tire
counterbalanced lift truck

Electric order picker

7FG/DF30

7FBMF25

7FBRE14

Internal combustion counterbalanced
lift truck with deluxe cabinElectric counterbalanced lift truck

Electric reach truck

7SLL

7FBEF18

LOP10CFPowered stacker

Three-wheel electric counterbalanced
lift truck

Low-level order picker with elevating cabin

Toyota Industries in Progress Materials Handling Equipment

Products for the North American Market

Products for the European Market

TOYOTA INDUSTRIES CORPORATION Annual Report 2005

25

Toyota Industries in Progress Materials Handling Equipment

BT Industries Group“Our clear customer and market focus is crucial.”
BT Industries is distinguished by its close relationships with customers. We are in themarket to meet their logistics needs. Every day we have to prove our ability to develop
together with customers as well as anticipate their needs for efficient materials handling,
and then supply solutions optimally designed for each customer’s unique situation.
We hold very strong positions in priority customer segments, where we are experts
at developing solutions for efficient materials handling. Our customer and market focus
has been crucial to establishing BT Industries as the world’s leading supplier of materials
handling solutions based on electric warehouse trucks.

Per Zaunders
President and CEO

Strong Performance in 2004

Global Player Imbued with Local Strengths

The year 2004 was a very strong year for the entire lift truck
industry, with higher volumes than ever before. All the major
markets—Europe, North America and Japan—reported growth.
We strengthened our position as the world’s leading supplierof warehouse trucks. Our increased market shares are the resultof a strong product range, a good reputation in the market and an
attention to what customers want. Success in the growing global
market has necessitated a major expansion in the BT Industries
Group’s production volumes.
Thanks to our employees’ competence, ability to design
effective solutions and focus on quality in every aspect of theirwork, we have been able to achieve improved productivity. The
emphasis on customers and quality awareness in every partof the BT Industries Group is a key factor if we are to remain
successful.

One of our strengths is that we are perhaps the only true global
company in our field. This is especially important now, when
so many large companies prefer to work with a single supplier
for all their lift truck needs wherever they operate in the world.
These corporations account for a growing share of global trade,
and it is very important to provide them with efficient materials
handling solutions whether in Europe, North America or
globally. BT Industries follows them in their development andserves as a professional partner.
It may seem contradictory, but we at BT Industries havemanaged to combine global coverage with strong, local businessacumen. Our culture stresses delegation of responsibility andauthority. By allowing decisions to be made far down in theorganization, we achieve important benefits, particularly in termsof flexibility and motivation. The local companies are the ones
that know their markets and can best manage their business.

Faster Product Development Essential
Our society is becoming increasingly dependent on transports
and is demanding an ever-faster supply chain. We have tocontinuously meet demands for efficient materials handlingsolutions that improve our customers’ productivity. To maintainand increase our competitiveness, our current products must be
constantly updated. But that is not enough. We also have to bewilling to forge ahead and develop the products of tomorrow.
Demand for fast and effective product development has
never been higher. In recent years we have invested considerable
resources in research and development, and the pace of productdevelopment has accelerated. Customers are noticing it in that
we are now launching more new products than before. We are
not going to stop there. Development certainly isn’t.

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TOYOTA INDUSTRIES CORPORATION Annual Report 2005

Extensive Cooperation and Inspiration
Since 2000, BT Industries has been part of Toyota Industries
Corporation. BT Industries is the world leader in warehousetrucks and TOYOTA Material Handling Company (TMHC) is
the world leader in counterbalanced trucks. Together, we havea competitive advantage that takes in every continent, customer
segment and truck type.
During the year we entered a more intensive stage ofour cooperation with TMHC. We are part of the same groupand both companies manufacture lift trucks. I believe thatcooperation can and should be expanded, so that we can benefit
from each other’s strengths.
For example, quality is a primary concern for both BT

There is still some concern about raw material prices,
including for crude steel, which is our most important input
good. But because of our established position as the market
leader with a strong product range and world-class employees,
I am positive about BT Industries’ opportunities.

Continued High Demand in 2005
BT Industries is well prepared for the strong market to continue
in 2005, although we do expect the fast pace of growth in 2004
to slow. Capacity utilization in our plants is very high, and wewill bolster our efforts to raise productivity and efficiency andthereby improve our competitive strength.

Per Zaunders
President and CEO
BT Industries AB

BT Products

Pro Lifter

Pro Lifter M

Orion

Ixion

Hand pallet truck

Motorized hand pallet truck

Electric pallet truck

Stacker truck

ReflexOpus

Opal

VectorCargo

Reach truck

Low-level order picking truck

High-level order picking
truck

Very narrow aisle truck

Counterbalanced truck

Toyota Industries in Progress Materials Handling Equipment

Industries and TMHC. BT’s vision is to have the warehousetruck industry’s highest quality. In this constantly ongoing effort,
we can obtain inspiration and suggestions from TMHC, with itsvery strong quality image.

Raymond Products

Raymond Model 7400
Reach-Fork Truck

Raymond Model 112XD
Pallet Truck

Reach truck

Electric pallet truck

Raymond EASi Pacer
Stand-Up
Counterbalanced Truck

Raymond EASi
Orderpicker Truck

RaymondSwing-Reach Truck

Order picking truck

Very narrow aisle truck

Electric counterbalanced truck

TOYOTA INDUSTRIES CORPORATION Annual Report 2005

27

Progress

2

Car Air-Conditioning Compressors

Toyota Industries in Progress
Toyota Industries in Progress

Integrating Cutting-Edge Technologies
to Lead the Global Market
Besides serving as a core business of the Automobile Segment, our Car
Air-Conditioning Compressor Business also represents one of Toyota Industries’
key strategic businesses. Toyota Industries takes advantage of its outstanding
technologies to efficiently develop and manufacture top-quality products matchedto customer needs, and by doing so has spurred enhancements in comfort andtechnological advances of vehicles manufactured and sold by the world’s premierautomakers. Our excellent technologies and quality in car air-conditioning
compressors, together with unrelenting efforts to build a global production network,
exemplify the spirit of Toyota Industries’ “United We Grow” slogan.

28

TOYOTA INDUSTRIES CORPORATION Annual Report 2005

electrically driven compressor for fuel-cell hybrid vehicles thatuses CO2 as a substitute refrigerant for hydrofluorocarbons. Also
working with DENSO, in 2003 Toyota Industries developed atwo-way compressor with a built-in motor for hybrid cars. This
compressor is driven alternately by the engine during driving
and by a built-in motor during engine stop, thereby realizing
an optimal balance between fuel efficiency and comfort when
the car air-conditioner is in operation. Further underscoring
our technological and competitive superiority, all of theserevolutionary compressors were developed and commercialized
ahead of our competitors.

Toyota Industries’ car air-conditioning compressors have earned
extensive praise for unrivalled quality and reliability fromToyota Motor Corporation (TMC) and the world’s other top
automakers. Our Car Air-Conditioning Compressor Businesshas solidly established its competitive superiority, highlighting
technological capabilities that are unmatched by other makers.
Toyota Industries’ Car Air-Conditioning Compressor
Business boasts a long tradition of creating revolutionary new
products in anticipation of changing market needs, which has
been instrumental in driving the technological innovation of
automakers. Among our accomplishments, in the 1980s wedeveloped a compact, lightweight 10-cylinder swash-platefixed-displacement compressor that realizes excellent reliability
at high operating speeds. In the 1990s we demonstrated ourcommitment to environmental protection by developing a
one-way swash-plate variable-displacement compressor that
reduces the load on the engine to raise fuel efficiency. Further,in the late 1990s we introduced an externally controlled
variable-displacement clutchless compressor that improves
acceleration and saves energy consumption by sensing changes
in the external environment.
Toyota Industries’ development of car air-conditioning
compressors has also focused on addressing such urgent
environmental issues as destruction of the earth’s ozone layer
and global warming. As part of these efforts, in 2002 Toyota
Industries and DENSO Corporation (DENSO) developed an

Leading the Market with Outstanding
Technological Capabilities
Toyota Industries’ total global production and sales of car
air-conditioning compressors in fiscal 2005 totaled 18.2 million
units, representing the top share of the global market.
In the Japanese market, during fiscal 2005 we soldapproximately 5.5 million compressors to TMC and otherprincipal domestic automakers, making us the market leader.
In the United States, during fiscal 2005 Toyota Industries
sold 7.1 millions of mainly fixed-displacement compressors(including exports and local production) to U.S. automakers andJapanese auto manufacturers in North America.
Meanwhile, in Europe, we sold approximately 5.1 million
variable-displacement compressors (including exports and local
production) during fiscal 2005.

Automobile Trends and Toyota Industries’ Product Development
1980s

1990s

2000s

Provide higher engine performance and comfortable interior
Slow down global warming

Reduce ozone layer destruction

Automobile
trends

Improve gas mileage
Hybrid cars, fuel-cell hybrid vehicles
Fixeddisplacement
type

Use of HFC-134a refrigerant

1981

2003

Compact, lightweight
10-cylinder swash-plate compressor*
Variabledisplacement
type

1995

ToyotaIndustries’
product
development

Rotary valve-type compressor

Rotary valve-type variable-displacement compressor*
Externally controlled, variable displacement,
clutchless type

1997

Toyota Industries in Progress Car Air-Conditioning Compressors

Second-to-None Technology Development
Capabilities

Topic
Toyota Industries first began
producing compressors in January
1960. More than four decades
later, cumulative production of
car air-conditioning compressors
in Japan, Europe and the UnitedStates reached 200 million units at
the end of April 2004. What’s truly
remarkable is that while it tookaround 36 years for cumulative
production to reach 100 million units
as of July 1996, aggregate production
soared to 200 million units within amere span of eight years.

Power efficient,
Ultra-lightweight, ultra-power efficient, superb drivability
superb drivability
6-cylinder one-way swash-plate compressor*
7-cylinder one-way
swash-plate compressor*
CO2 compressor
2002
CFC-freeCO2 compressor for fuel-cell hybrid vehicles*

2003

Electrically driven compressor

Compact, lightweight, highly efficientElectrically driven compressor for hybrid vehicles*

2003* World’s first commercial products

Two-way compressor

Two-way compressor for hybrid vehicles*

200 millionth compressor

TOYOTA INDUSTRIES CORPORATION Annual Report 2005

29

Toyota Industries in Progress Car Air-Conditioning Compressors

Worldwide Manufacturing Bases and Local Offices

TDDK
MunichDetroit

DNTS
YSD

DWHI

Slated to start operations in
December 2005

ACTIS

TACK
Slated to start operations in April 2006

SUBROS
DNIA
Consolidated subsidiaries
Licensed manufacturers
Local offices

Building a Global Production Structure
Responding to growing demand, Toyota Industries is working tobuild an optimal production structure, with bases in Japan, North
America, Europe and Asia.
In Japan, our largest production base, we have built anefficient three-plant integrated production structure in Obu,
Higashiura and Kariya, covering all phases from production ofmaterials to processing and assembly and thereby ensuring thestable production of car air-conditioning compressors.
In the United States, Michigan Automotive Compressor,
Inc. (MACI)*, our U.S. production base, produces swash-platefixed-displacement compressors.
In July 2004, Toyota Industries and DENSO jointly
established a second North American compressor production
base, TD Automotive Compressor Georgia, LLC (TACG),
near Atlanta in the U.S. state of Georgia. TACG is slated
to commence operations in December 2005. While fixeddisplacement compressors have been the main compressor usedin North America, in view of increasing global environmental
awareness, Toyota Industries anticipates rising demand forvariable-displacement compressors, which offer excellent energy
efficiency. Determined to meet this expected higher demand,
Toyota Industries established TACG as a new plant specializing

Obu Plant produces aluminum die casts forcompressors.

30

TACG
MACI

in variable-displacement compressors in the southern UnitedStates, where automakers have been setting up operations.
TACG plans to produce 2 million compressors annually by
2010.
Our European production base, TD Deutsche
Klimakompressor GmbH (TDDK), produces swash-plate
variable-displacement compressors.
* MACI and TDDK are joint ventures with DENSO. As of March 31, 2005, Toyota
Industries held 60% and 65%, respectively, of the shares of these companies.
* TACG is capitalized at US$27 million as of March 31, 2005. Toyota Industries North
America, Inc. (a holding company controlling Toyota Industries’ North American
operations) invested 65% of this capital and DENSO International America, Inc. (acompany controlling DENSO’s North American operations) invested 35%.

In May 2005, Toyota Industries established a joint venture,
TD Automotive Compressor Kunshan Co., Ltd. (TACK)in Kunshan, as its second car air-conditioning compressor
production base in China, another vital geographic region.
TACK is scheduled to begin producing variable-displacement
compressors in April 2006. Yantai Shougang DENSO Co., Ltd.
(YSD, in which Toyota Industries holds a 15% stake), a joint
venture established in 1994 with Shougang Corporation, will
also begin producing variable-displacement compressors in
addition to its current fixed-displacement compressors. YSD will

Higashiura Plant processes compressor pistons.

TOYOTA INDUSTRIES CORPORATION Annual Report 2005

DNBR

Toyota Industries is steadily
globalizing production bases in its Car
Air-Conditioning Compressor Business.
We produce compressors through a
tripolar structure encompassing Europe,
the United States and Japan. We expectthat establishing new production bases in
the United States and China will further
strengthen this structure. Additionally,
Toyota Industries licenses productionin Asia (excluding Japan) and SouthAmerica. By carrying out production near
our markets, we are better able to supply
products precisely tailored to local needs,
as well as to reduce shipment costs andexchange rate risks.

Kariya Plant develops and assembles compressors.

TACG, Toyota Industries’ second North American
production base (Artist’s rendering)

supply compressors to users in northern China while TACK will
supply customers in the southern part of the country.

YSD

Main products:
Fixed-displacement compressors
Variable-displacement compressors(starting from April 2006)

China

Yangtze River TACK

Main products:
Variable-displacement compressors(starting from April 2006)

Production bases of automakers

Looking Ahead
To ensure future growth, our activities will focus mainly on
further penetrating overseas markets.

TDDK, Toyota Industries’ European production base

In Europe, the proportion of new cars fitted with car
air-conditioners, once relatively low, is rising and now exceeds
70%. Toyota Industries will strive to expand sales by securing
new customers and further cultivating new markets, with efforts
centered on supplying products that closely match the needs ofthe European market.
In the United States, we will redouble efforts to secure
new orders, while in China, where automobile sales continue toexpand, we will actively undertake sales promotion activities incooperation with DENSO.

Toyota Industries in Progress Car Air-Conditioning Compressors

MACI, Toyota Industries’ U.S. production base for car
air-conditioning compressors

All of Toyota Industries’ car air-conditioning compressors
are supplied to DENSO, which in turn sells these to leading
automakers worldwide. DENSO not only sells our compressors
as a single unit, but also incorporates them in DENSO’s car
air-conditioning systems.

Fixed-Displacement Type

10S17 compressor

SCS06 compressor

SV07 compressor(Swash-plate type)(Scroll type)(Vane type)Continuous Variable-Displacement TypeFor Hybrid Vehicles

7SBU16 compressor

7SEU17 compressor

ES18 electric compressor

ES27 electric compressor(Swash-plate type)(Externally controlled,
clutchless type)(Hermetic scroll type)(Hermetic scroll type)

TOYOTA INDUSTRIES CORPORATION Annual Report 2005

31

Progress

3

Vehicles/Engines

Toyota Industries in Progress
Toyota Industries in Progress

Applying Our Combined Knowledge andSynergies to Produce a Global Lineup of
Automobile-Related Products
In close cooperation with Toyota Motor Corporation (TMC), Toyota Industries’ Vehicle andEngine businesses are engaged in a wide range of automobile-related businesses, including
the manufacture of engines and the assembly of automobiles themselves. Both the Vehicle
and Engine businesses are also proactively contributing to TMC’s global expansion strategy
and working hard to be a reliable, cost-efficient and flexible supplier of engines andautomobile-related products.
Recognizing that the source of our competitiveness lies in ensuring outstanding
production capability, we will strive to constantly improve this core component ofoperations while further enhancing our products in terms of quality, cost and technology.

32

TOYOTA INDUSTRIES CORPORATION Annual Report 2005

Toyota Industries undertakes operations involved in TMC’s
car production as one of the vehicle assembly arms within the
Toyota Group. As a core business that provides stable revenues,
our Vehicle Business assembles mainly compact and midsize
automobiles under consignment from TMC. Currently, we are
manufacturing two models, the RAV4 for Europe and the UnitedStates and the Vitz (Yaris in Europe), the latter of which was
re-launched in Japan in February 2005 after a full model change.

Chairman Tadashi Ishikawa (then President) speaks at the ceremony
for the latest Vitz (Yaris) coming off the production line at TMC’s
Takaoka Plant in February 2005. In Japan, the vehicle is assembled
at the Takaoka Plant and Toyota Industries’ Nagakusa Plant.

Our Vehicle Business is renowned for its top-class quality
and quick production launch within the Toyota Group. The
Toyota Production System ensures that waste is thoroughly
removed from production operations and precious plant space isefficiently utilized.
The Vehicle Business’s automobile assembly operation
began with the Publica (van) and Corolla (van) in the late 1960s
and early 1970s. Underpinned by these successful operations,the full-fledged assembly business commenced with the Starletat the Nagakusa Plant in 1978. We have been manufacturing
the Vitz, the successor vehicle of the Starlet, since 1999. The
first-generation Vitz prompted an expansion in the compact car
market in Japan, and was later recognized as global standard
compact car. The latest Vitz packs the most advanced safety

features and environmental technologies and delivers the highest
quality bar none.
In producing the most recent Vitz model, we launched
production in an unprecedented short period of time to
reduce pre-production expenses by incorporating new process
improvement measures. We digitalized the preparation process
and re-designed its structure so that we could shorten thelead-time and get the job done faster and more efficiently.
Specific measures entailed the use of TMC’s “Compass” system
to reorganize processes and create unified standards. We alsoutilized three-dimensional data processing to improve processes
virtually, and closely reviewed the specifications of processes
and equipment. In re-designing the preparation structure, we
completely removed every conceivable barrier among relevant
manufacturing, production technology and quality control
departments involved. Subsequently, by eliminating suchfactors as communication gaps—an impediment to speed—anddelayed decision-making, we were able to implement concurrent
engineering where everyone could work in unison to handle
multiple tasks at the same time.

Unified standards created using the“Compass” system

Toyota Industries in Progress Vehicles/Engines

Vehicle Business

Reviewing processes andequipment using virtual
three-dimensional data processing

This achievement marks significant progress in realizing
greater production enhancement capability to produce
high-quality, cost-efficient vehicles, thereby contributing to
TMC’s car manufacturing operations.

Vehicles

Vitz

RAV4

(Yaris in Europe)

TOYOTA INDUSTRIES CORPORATION Annual Report 200533

Toyota Industries in Progress Vehicles/Engines

Engine BusinessToyota Industries’ Engine Business manufactures diesel andgasoline engines ranging in capacity from 1500 cc to 5200 cc.
Our automobile engines are manufactured under consignment
from TMC and installed on designated TOYOTA cars. Our diesel
engines developed in collaboration with TMC, in particular,
offer high power and lighter weight, as well as lower noise andvibration. Moreover, Toyota Industries leads the world in market
share of high-output, environmentally friendly industrial engines
for lift trucks and other materials handling equipment in addition
to engines like gas engine-driven heat pumps. The business also
handles a variety of foundry parts incorporating sophisticatedtechnologies.
Thanks to the adoption of the automatic guided vehicle
system, our Engine Business maintains a structure that’s flexible
and responsive to production fluctuations. Quick production
launch is another area in which we excel.
The Engine Business is aggressively engaged in thedevelopment of environmental technologies. In relation, theproportion of diesel engine vehicles is increasing, especiallyin Europe, based on the idea that diesel engines are moreenvironmentally friendly in terms of fuel efficiency and lower
CO2 emissions. At the same time, TMC is striving to elevate its
presence in the European market, and plans to increase sales byaugmenting the diesel vehicle lineup. Toyota Industries aims tocontribute to their European strategy through joint development
of diesel engines with TMC and production of high-quality
diesel engines.
In line with this goal, in March 2005 we started productionof 2.2-liter direct-injection AD diesel engines at the Hekinan
Plant in Japan and at Toyota Motor Industries Poland Sp.zo.o.*(TMIP), a joint venture in Europe with TMC. The engine isfitted in the Avensis that TMC produces in the United Kingdom

and is slated to equip the Corolla that TMC assembles in Europe.
Together with the Hekinan Plant, the Kyowa andHigashichita plants collectively serve as mother plants foroverseas counterparts that manufacture engines and foundryparts. In this key role, these plants spearhead the adoptionof the latest production technology developed in Japan andfacilitate the maturity of the production process and technology
before transferring the most current know-how and expertise tooverseas bases.
* Toyota Industries’ stake is 40%. Toyota Industries is chiefly responsible for
production operations at TMIP.

In June 2005, the Higashichita Plant started producing
2.5-liter and 3.0-liter direct-injection KD diesel engines for
TMC’s Innovative International Multi-Purpose Vehicle (IMV)
Project. This TMC project aims to establish a globally optimal
production and supply structure by reciprocally supplying
assembled vehicles as well as main components of pickup
trucks and multi-purpose vehicles among manufacturing basesin Asia, Argentina and South Africa. To produce the engine, welaunched the production line for manufacturing and processing ofaluminum die cast components and assembly of engines within ashort preparation period.

Toyota Industries will continuously make efforts tocontribute to the successful establishment of the IMV Project.
For example, in May 2004, Kirloskar Toyoda Textile Machinery
Private Limited (KTTM), a Toyota Industries subsidiary in India
that manufactures and sells textile machinery, started productionof components for manual transmissions. KTTM supplies
aluminum die cast components for manual transmissions andrelated components to Toyota Kirloskar Auto Parts Private Ltd.
(a joint venture in India with TMC and the Kirloskar Group,in which Toyota Industries has a 26% stake), which in turn

Assembly line at theHigashichita Plant, which
manufactures KD diesel
engines

AD diesel engine and TMIP staff

34

TOYOTA INDUSTRIES CORPORATION Annual Report 2005

Toyota Industries in Progress Vehicles/Engines

Worldwide Manufacturing Bases of Automobile-Related Businesses

Poland
India

China

Japan

TMIP
Manufacture of diesel engines for TMC’s
plants in the U.K. and Turkey

TKAP

TIK

Hekinan Plant

Kyowa Plant

Manufacture of foundry parts for Japanand manufacturing bases in Poland andIndia

Manufacture of diesel and gasoline
engines

Manufacture of engine parts

Manufacture of transmissions for the
IMV Project

TIAP

KTTM

LFTD

Manufacture of transmission parts for
TKAP

Higashichita Plant
Manufacture of foundry parts

Manufacture of foundry parts for engines

Manufacture of automotive
stamping dies (see page 44
for details)

Manufacture and supply of diesel
engines for IMV Project

Manufacture of automotive stamping diesand jigs (see page 44 for details)

supplies manual transmission systems to the IMV Project.
Toyota Industry (Kunshan) Co., Ltd., our subsidiary in
China, is manufacturing foundry parts mainly for automobile
engines. To augment production capacity spurred by anincrease in demand, in April 2004 we established our
second manufacturing base in the country, Toyota Industry
Automotive Parts (Kunshan) Co., Ltd. (TIAP), a joint venturein which Toyota Industries has a 60% stake, in cooperation with
Taiwan-based Lioho Machine Works, Ltd. and Toyota Tsusho
Corporation. TIAP commenced operation in April 2005.

Topic

Highly precise,extremely sturdy yet
lightweight, this Toyota
Industries-manufactured
engine block was installedin the Toyota Tundra,
which competed in the
NASCAR race held in the
U.S. and went on to win
the 2004 Craftsman Truck
Series title.

Engines

2AD diesel engine

2KD diesel engine

1HD-FTE diesel engine

2AZ-FE gasoline engine

1FZ-FE gasoline engine(Displacement: 2.2 liters, usedin the Avensis)(Displacement: 2.5 liters, usedin the Hilux Vigo)(Displacement: 4.2 liters, usedin the Land Cruiser)(Displacement: 2.4 liters, usedin the Estima)(Displacement: 4.5 liters, usedin the Land Cruiser)

TOYOTA INDUSTRIES CORPORATION Annual Report 2005

35

Progress

4Electronics

Toyota Industries in Progress
Toyota Industries in Progress

Uniting with Key Electronics Industry
Players to Drive Our Future Growth
Toyota Industries manufactures and sells low-temperature polysilicon TFT-LCDs andsemiconductor package substrates through joint ventures. Furthermore, Toyota Industries
not only engages in the development, manufacture and sales of power electronics
components for automobiles such as DC-DC converters but also pursues the development
and commercialization of advanced electronics technologies. Viewing electronics as
a promising field where further growth in markets is likely, we regard our Electronics
Business as an important source of future growth. Accordingly, Toyota Industries will
allocate management resources to this field as we commit our concerted energy and effort
to ensure the successful development of this business in the years ahead.

36

TOYOTA INDUSTRIES CORPORATION Annual Report 2005

ST Liquid Crystal Display Corp. (STLCD) was established
as a 50-50 joint venture with Sony Corporation. Since Toyota
Industries’ investment is not a majority stake, we account for
STLCD as an affiliate by the equity method rather than asa subsidiary. STLCD is currently securing a stable level of
earnings in spite of the adverse impact of inventory adjustmentsin the IT and digital industries, and nonetheless, represents oneof the core operations of our Electronics Business.
STLCD manufactures small and medium-sized
low-temperature polysilicon (poly-Si) TFT-LCD panels mainly
for use in digital still and video cameras and mobile phones. It
has built an optimal production system by combining Sony’s
superb LCD development capabilities with Toyota Industries’
renowned expertise in quality control and manufacturing
technology. Since commencing mass production in 1999,
STLCD has won the trust of a broad range of customers for its
product quality, cost competitiveness and reliable delivery times,
which is further attested to by its milestone achievement ofreaching 100 million panels in September 2004.
STLCD’s products excel in such basic features as highresolution and low energy consumption. A new display device
using Sony’s System-on-Glass technology is also being
developed. Incorporating the display device and its drivercircuits into a single glass substrate, this technology enables
highly reliable, lightweight and miniaturized display modules.
Responding to increases in demand, STLCD has continued
expanding production capacity. With the proliferation of digital

cameras and camera-equipped mobile phones, we expect acontinued rise in demand for its high-performance LCD panels,
whereby STLCD additionally invested approximately ¥10.0
billion in 2004 to bolster its production facilities. STLCD’s
monthly production capacity currently stands at 40,000 panels(600 x 720mm).
In a noteworthy development, Sony acquired the LCD
panel manufacturing business of International Display
Technology Co., Ltd. and subsequently established ST Mobile
Display Corporation (STMD) in March 2005 to manufacture
low-temperature poly-Si TFT-LCD panels for mobile devices.
Foreseeing sustained growth in demand for the product, Toyota
Industries made a 20% capital investment in STMD.

Toyota Industries in Progress Electronics

Low-Temperature Polysilicon TFT-LCD Panels

ST Liquid Crystal Display Corp.

Semiconductor Package Substrates
In 1998, Toyota Industries established TIBC Corporation (TIBC),a joint venture with Ibiden Co., Ltd. (Ibiden). This marked our

TIBC Corporation

entry into the business for semiconductor package substrates,
which are essential components of PCs, digital still and video
cameras, mobile phones, home video game consoles, IC cards andmemory cards. Leveraging Ibiden’s extensive technologies, TIBC
has steadily expanded its product line, manufacturing flexible
printed circuit (FPC) substrates for IC cards, wire bonding
package substrates and flip chip package substrates.
TIBC’s semiconductor package substrates are sold via
Ibiden to major integrated device manufacturers (IDMs) andsemiconductor-packaging companies in South Korea and Taiwan
for use in PCs, mobile phones and other products. TIBC’s FPC
substrates are also marketed through Ibiden to SIM-card andsmart card suppliers mainly in Europe and China for integration
into credit cards and telephone cards.

TOYOTA INDUSTRIES CORPORATION Annual Report 200537

Toyota Industries in Progress Electronics

Semiconductor Package Substrate Trend and TIBC’s Production Engineering Development
Substrate trend

FC package substrate

Flip-chipped
Super fineMulti-layered

IC signal pins

Main applications:CPU for PCs, PC graphics,
chipsets for PCs

FC substrates
Flip chipbonding

WB: Wire bonding (package)
FC: Flip chip
FPC: Flexible printed circuit

Fine
Super thin-filmed

WB package substrate
Main applications:

WB substrates

Memory for portabledevices, chipsets for PCs

LSI wirebonding

Double-sided

FPC substrates for IC cards
1980

TIBC product line

1990

2000

Sep. 1997

FPC package substrate

2010

Main applications:Contact IC cards

FPC package substrates
WB package substrates

Apr. 1999
Sep. 1998
TIBC founded

2005

Oct. 2002

FC package substrates

Car Electronics
Toyota Industries’ Electronics Division develops and manufactures
automobile-related electronics components.
Fitted in Toyota Motor Corporation’s (TMC) Prius hybridcar, our DC-DC converters were developed by utilizing ourwealth of know-how and experience in the developmentof control devices for electric counterbalanced lift trucks.
Regarded as one of the key devices in hybrid cars, the converter
down-converts the high-voltage DC current of the main battery
to a lower voltage to recharge the auxiliary battery and supply
power to lights, wipers, the horn and other in-car devices.
The division also develops and manufactures compact, low-cost
DC-DC converters for electric power steering (EPS) systems forhybrid cars, which are installed in the TMC’s Harrier Hybrid andKluger Hybrid. Other products include a broad range of DC-AC
inverters for cars with hybrid and conventional engines thatconvert currents into the same voltage as household electricity.
Looking to the future, we expect that strong worldwide

Car Electronics Products for Hybrid Cars

DC-DC converter for EPS
fitted in the Harrier Hybrid
and Kluger Hybrid

DC-DC converter

New products
DC-DC converters
for EPSfitted in the Prius
DC-DC converters

DC-AC inverter
fitted in the Estima Hybrid

DC-AC inverters
FY2002

2005

2011

demand for environment-friendly vehicles will likely be
accompanied by steady growth in demand for hybrid cars. With
this in mind, the Electronics Division will redouble its efforts tobuild a strong position as a manufacturer of power electronics
devices for hybrid cars.

New Electronics
The New Electronics Sub-Division handles the R&D andcommercialization of various electronics technologies. For
instance, the sub-division undertakes joint research on radio
tuners under a business alliance between Toyota Industries andNiigata Seimitsu Co., Ltd. Together, we have developed andcommercialized ultracompact, power-efficient FM radio tuner
utilizing “Full CMOS RF IC technology.” This device integrates
all radio tuner functions, including “radio frequency” circuits,
into a single “integrated circuit” chip using “complementary
metal-oxide semiconductor” process technology. The tuner is
optimal for use in such portable devices as mobile phones andMP3 players. The New Electronics Sub-Division also develops

38

TOYOTA INDUSTRIES CORPORATION Annual Report 2005

and manufactures small wireless LAN modules compatible
with next-generation communications platforms. Further, thesub-division developed organic light-emitting diodes (OLEDs)
that achieve an ideal balance in terms of excellent color
reproduction, brightness and life span. The commercialization ofan OLED backlight for LCDs is currently underway.
Toyota Industries built a new base in Anjo, Aichi Prefecture,for undertaking R&D and production of electronics products. We
intend to gradually consolidate our electronics-related R&D andproduction facilities into the new Anjo Plant, which is currently
working on pilot production in the run-up to commercializationof OLED backlights.

Toyota Industries in Progress Electronics

STLCD

Low-temperature polysilicon TFT-LCDs

TIBC

Wire bonding package
substrate

Flip chip package
substrate

Flexible printed circuit(FPC) package substrate

Car Electronics

DC-DC converter for the PRIUS

DC-DC converter forelectric power steering
for the Harrier Hybrid andKluger Hybrid

DC-AC inverter for theAlphard Hybrid andEstima Hybrid (1.5kW)

DC-AC inverter for
the Tacoma (400W)

New Electronics

IC chip (left) and radio
tuner module incorporating
the IC chip (right)

Wireless LAN module

Lighting for newscasters(Product developed using
white OLED technology)

White OLED lightsourceTOYOTA INDUSTRIES CORPORATION Annual Report 2005

39

Progress

5

Logistics Solutions

Toyota Industries in Progress
Toyota Industries in Progress

Building a Proprietary Business Model toProvide Optimum Logistics Solutions
Companies are increasingly striving to reduce their total logistics costs and improve overalllogistics. To address such needs, Toyota Industries is undertaking the Logistics Solutions
Business in Japan. By closely examining the flow of goods from the manufacturer to theconsumer, we seek to create a proprietary business model that optimizes the entire process.
Our track record includes a major chain retailer for whom we reformed in-store operations
from the standpoint of shoppers. Also, to offer customized logistics solutions best suited toindividual customers, we carry out logistics operations independently or via collaborative
alliances that partner us with a variety of industry players. Through continuous
improvements, reduced costs and increased efficiency, we are leading the way in ensuringsmooth logistics operations for customers.

40

TOYOTA INDUSTRIES CORPORATION Annual Report 2005

Principal Initiatives

In undertaking the Logistics Solutions Business, we offer acomprehensive solution to customers’ logistics, from planningto the operation of distribution centers to improving their entire
supply chain. This is the field of business where we can takeadvantage of our experience acquired through the production andsales of materials handling equipment as well as our production
know-how as exemplified by the Toyota Production System.
Toyota Industries regards “logistics” as an ongoing process that
continues until a product passes the checkout counter at a retailstore. By examining the optimum solution from consumers’
perspectives, we aim to build proprietary business models thatenable far-reaching improvements in the flow of goods, eventhrough reforming logistics within retail outlets.

March 2002:
Advanced Logistics Solutions Co., Ltd. (ALSO) established
as a wholly owned subsidiary to plan logistics and operate
distribution centers.
November 2002:
Commenced operation of a room-temperature distribution centerfor convenience stores commissioned by Mitsui & Co., Ltd.
November 2002:
Acquired a 5% share in Yukijirushi Access, Inc., a major dairy
foods wholesaler. (Yukijirushi Access changed its name to
Nippon Access, Inc. in April 2004.)
Invested in Teion Shokuhin Ryutsu Inc., which engages instorage and delivery of frozen and chilled foods (in which
Toyota Industries has a 60% stake via indirect investment
through ALSO).
October 2003:
KTL Co., Ltd. (KTL) established as a joint venture with Kokuyo
Logitem Co., Ltd., a logistics subsidiary of Kokuyo Co., Ltd. (inwhich Toyota Industries has a 50.5% stake).

Providing Optimum Logistics Solutions
Matched to Customer Needs

November 2003:
KTL commenced operation of the Kokuyo Tokyo Metropolitan
Area Integrated Distribution Center (IDC).

Executed under the initiative of the Advanced Logistics
Division, Toyota Industries is exploring a variety of businessformats for providing optimal solutions for individual customers.
In addition to the establishment of Advanced Logistics Solutions
Co., Ltd. (ALSO) as a wholly owned subsidiary, other avenues
include engaging in planning, total design and operation of
distribution centers through joint ventures with customers andlogistics operators, as well as acquiring equity stakes in logistics
operators.

Toyota Industries’ Expanding
Logistics Solutions BusinessPharmaceuticalproducts

Toyota Industries in Progress Logistics Solutions

Applying Proprietary Know-How in the
Logistics Solutions Business

March 2004:
Acquired a share of Fuji Logistics Co., Ltd. (Fuji Logistics, inwhich Toyota Industries has a 26% stake, with shares acquired
from Fuji Electric Holdings Co., Ltd.).
April 2004:
TF Logistics Co., Ltd. established as a joint venture with Fuji
Logistics for the transport and maintenance of information
devices (in which Toyota Industries has a 51% stake).

Frozen foods

Cosmetics anddaily use products

Chilled foods

Establishment ofjoint ventures

Electronicequipment

Teion
Direct capital Shokuhin
relationships Ryutsu Nippon
Fuji
Logistics

Building
equipment

Unrefrigerated
foods

AccessToyotaIndustries
Distribution

KokuyoLogitemTakasue

Stationery supplies

ApparelPrinted matter

Others(area platform)

Started operations by fiscal 2005
Negotiations underway

TOYOTA INDUSTRIES CORPORATION Annual Report 2005

41

Toyota Industries in Progress Logistics Solutions

Operational Scope of
the Logistics Solutions
Business

Manufacturer

Distribution center

Store improvement consulting

Financial services• Planning/design• Planning and overall design ofefficient distribution center
operations• Operation/contracted management• Cost reduction through constantimprovements• Receipt of goods/storage• Provide guidance on a simplified
goods storage method that prevents
maintaining unnecessary inventories• Goods presentation/display• Provide guidance on ways to get rid
of wasteful operations and increasetime spent with customers• Cash registers• Sales management for each cash
register and cash collection anddelivery• ATMs• Cash replenishment andmaintenanceDistribution center

Diversifying Our Business Fields throughStrategic Consolidation
On a different front, we took an important step in further
bolstering our Logistics Solutions Business in March 2005
by acquiring Asahi Security Co., Ltd. (Asahi Security) andmaking the company into a wholly owned subsidiary. Asahi
Security offers comprehensive cash management outsourcing
services, including cash collection and delivery, cash proceeds
management and equipment security, for the retail, services andtransportation sectors. The acquisition is an excellent example

Retailer

Consumerof our approach to broadening the spheres of our Logistics
Solutions Business to cover the “flow of cash” received fromconsumers in exchange for merchandise in retail stores. We
believe this move is in line with our business strategy forproviding solutions that enable customers to optimize theiroverall supply chain.
We are ambitiously allocating management resources to
our Logistics Solutions Business, applying our full efforts toaccelerate the growth of this business and make it a pillar of
Toyota Industries’ future operations.

Operational Flow of Cash Collection/Delivery Service at Asahi Security
Sales report
Delivery ofsorted change

Sorting change

Head office/headquarters ofcustomers
Supermarkets,
restaurants, etc.

Asahi VEDS Center
Sorting and checkingof sales proceeds
Deposits

Collection ofsales proceeds

Bank

Asahi Security provides comprehensive cash management service. Utilizing specially reinforced vehicles and the Asahi
VEDS Center*, Asahi Security collects sales proceeds from restaurants, supermarkets, convenience stores and otherretail outlets, sorts the sales proceeds, sends sales reports to respective head offices/headquarters, makes deposits into
respective bank accounts, and sorts and delivers change. By outsourcing cash management to Asahi Security, customers
can focus on their sales activities.
* VEDS Center: Short for Valuables Exchange & Delivery System Center. Prepares change and sorts sales proceeds.

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TOYOTA INDUSTRIES CORPORATION Annual Report 2005

Progress

6

Textile Machinery

The history of the Toyota Group began with the inventionof an automatic loom by company founder Sakichi Toyoda.
Since then, the Textile Machinery Business, Toyota Industries’
founding business, has had a tremendous impact on thedevelopment of the global textile industry. Today, the Textile
Machinery Business develops, manufactures and sells
superior-quality products the world over. With state-of-the-art
technologies and finely tailored services, Toyota Industries
strives to meet evolving customer needs.

Our textile machinery is broadly divided into spinningmachinery, which spins bundles of fibers into yarns, andweaving machinery, which weaves yarns into fabric. To meetever more sophisticated market needs, we incorporate advanced
control, communications and mechatronics technologies into
our machinery lineup. Through such endeavor, Toyota Industries

Toyota Industries in Progress

Delivering Leading-Edge
Performance Backed by
Proven Expertisehas received global high acclaim for its mainstay air-jet looms,
which boast the top global share, as well as for its ring spinning
frames and roving frames.
Please visit www.toyota-industries.com/textile for further
information.

Weaving Machinery
Toyota Industries manufactures and sells two types of weaving machinery:
air-jet looms, which insert weft yarns using air, and water-jet looms,
which use water for the same effect. We provide customers around theworld with state-of-the-art products that we believe meet and exceed basic
performance requirements demanding high speed and reliability as well

JAT710 air-jet loom

LW600 water-jet loom

as incorporate such advanced functions as monitoring and remote settingof the machines via the Internet. Toyota Industries also produces suchpreparatory machinery for weaving as sizing machines, which enables
uniform, high-quality sizing of yarns.

MackeeSizing machine for spun yarn

Filamaster
Sizing machine for filament yarn

Spinning Machinery
Toyota Industries offers spinning machinery, including high-speed ring
spinning frames and roving frames, to meet a wide variety of customer
needs. These products excel not only in spinning high-quality yarns but
also providing superior productivity. We also produce and sell drawing

RX240NEW ring spinning frame

FL100 roving frame

frames and combers.
Toyota Kirloskar Textile Machinery Private Limited, our subsidiary inIndia, manufactures ring spinning frames for the local market.

DX8 drawing frame

VC5A comber

TOYOTA INDUSTRIES CORPORATION Annual Report 2005

43

Progress

7

Automotive Stamping Dies

Creating Advanced Technology for Manufacturing
Automotive Stamping Dies
Toyota Industries’ Machinery & Tools Sub-Division designs
and manufactures stamping dies for Toyota Motor Corporation(TMC), Toyota Industries’ Vehicle Division and TOYOTA
Material Handling Company (TMHC). Combining the skillsof its experienced engineers and advanced digital technology,
including simulation, the sub-division is receiving high acclaim
for its manufacturing and quick delivery of superior-quality
stamping dies. In recognition, the sub-division has regularly
received TMC’s “Super” Award for Quality Performance.

Setting its sights on the potential growth of the Chinese
automobile market, Toyota Industries also established Lio
Fung Tool & Die (Kunshan) Co., Ltd. (LFTD, in which Toyota
Industries has a 35% stake) as a joint venture with Taiwan-based
Lioho Machine Works, Ltd. LFTD has been in operation sinceApril 2004.
Through manufacturing stamping dies, Toyota Industries
is exploring ways to support TMC’s automobile business andcontribute to their global strategy.

Hood panel trim die

Progress

8

Rear door outer draw die

Manufacturing Equipment

Independently Producing Critical Manufacturing
Equipment
Toyota Industries produces its own essential manufacturing
equipment such as machining and assembly equipment. Our
Mechatronics Systems Department produces customized
manufacturing equipment for the Compressor Division, Engine
Division, TMHC, our affiliate ST Liquid Crystal Display
Corp. and other divisions. This practice not only protects
proprietary production know-how but also allows participationin their product development processes so that we can develop
manufacturing equipment in short order and facilitate the quick
launch of respective production lines. The department’s businessserves as a source of competitiveness for the entire Toyota
Industries Group.

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TOYOTA INDUSTRIES CORPORATION Annual Report 2005

NC machine tool
for aluminum parts

Circuit board inspection
system with high-resolution
line scan camera