Special Report

Overseas Expansion in New Medium-Term Management Plan

“NEXT 100: Beyond 100 years”

Measures for Transportation Systems segment
We will promote the following measures to achieve dramatic global expansion of our Transportation Systems segment.
Utilization of alliances
Through alliances with FUJI ELECTRIC and Hitachi, we willproceed with development of new markets such as North America,Southeast Asia and India, and promote joint purchasing and joint
development of products and systems based on market needs tostrengthen international competitiveness.
Approaching rail vehicle manufacturers
We will leverage our strengths as a dedicated manufacturer ofelectrical equipment for rail vehicles and actively seek export
opportunities with rail vehicle manufacturers in Japan andoverseas.

Photo of Beijing Subway Line 10

Deployment of maintenance businessWe have been delivering electrical equipment for rail vehicles tothe Beijing Subway since the late 1990’s, boasting the top share of
approximately 40% in the electrical equipment delivered to theSubway. In October 2014, we founded a new company, “Beijing
Jingche Shuangyang Traction System Co,. Ltd.” to further
strengthen our businesses by capturing demand for maintenanceof such equipment.
Additionally, used rail vehicles that were manufactured in Japanare exported to Indonesia and other countries, where they areused for transportation by the local population. We are also aiming
to launch a business to upgrade and maintain the electricalequipment for these vehicles.

Measures for Industrial Systems segment
The Industrial Systems segment will promote specialization in high value-added segments in an aim to achieve steady revenues, whileadvancing global expansion as a key measure for business growth.
Respond to demand for energy saving in Southeast Asia
We will grow our business by responding to demand for energysaving production facilities in Southeast Asia, by offering industrial
systems products based on high-efficiency motors and inverters
leveraging our motor drive technology, with a center for
information collection at our representative office in Bangkok,
Thailand opened in September 2014.

Restructure production system
We will restructure our production system including our subsidiaries and joint ventures in Japan and overseas, centering on the Company’s
major production base, the Yokohama Plant, and aim to build a foundation to achieve net sales of 50.0 billion yen by the fiscal year ending
May 31, 2017.

(1) Strengthen order-taking
and maintenance structure
for electrical equipment forrail vehicles in China
Photo of LRV in Dallas(5) Establish order-taking
structure for electricalequipment for rail
vehicles in India

Production base
Bases for sales andcollection of information
Key regions
Future target regions

7

Expand overseas sales of testing equipment for automobile development
Based on the technologies for testing systems for automobile
development we have built for automobile manufacturers in Japan,
we will promote initiatives aimed at receiving orders fromoverseas manufacturers as well.

(2) Enhance order-taking ofelectrical equipment for rail
vehicles in North America(3) Capture demand for upgrading
electrical equipment of rail
vehicles in Southeast Asia
(4) Strengthen order-taking ofindustrial systems products inSoutheast Asia
(6) Expand overseas sales oftesting equipment for
automobile development

Toyo Denki Seizo Report 20148