To Our Shareholders

Akira Yokoi

Tadashi Ishikawa

ChairmanPresident

In November 2001, Toyota Industries Corporation (“Toyota Industries”) celebrated its 75th
anniversary. Looking back, we feel both gratitude and pride. Gratitude for the support wehave received over the years from our shareholders, customers, local communities andemployees. Pride in our evolution from a specialized manufacturer of automatic looms into an
enterprise with a wide and varied business universe. To reflect this diversification and makethe width of our activities more clearly recognizable, in August 2001 we changed the name of
the Company from Toyoda Automatic Loom Works to Toyota Industries Corporation. Looking
forward, our corporate vision is as clear as our new name is apt.

4

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Excellent Performance Despite Adverse Environment
For fiscal 2002, ended March 31, 2002, Toyota Industries posted consolidated net income of ¥27.3 billion (US$205.0
million) on consolidated net sales of ¥980.2 billion (US$7,355.8 million), up 20.6% and 27.7%, respectively, over fiscal
2001. Both these figures marked record highs for a second consecutive year. However, consolidated operating
income decreased by 2.1% to ¥46.3 billion (US$347.7 million).

Slowdown of the World Economy

All Segments in Good ShapeOur results were all the more remarkable given the

Although the performance of Toyota Industries’

adverse business environment prevailing in the fiscal

business segments varied, most increased their net

year. The growth of the Japanese economy was anemic,

sales over fiscal 2001 and maintained their operatingwith further signs of deflation, and the government

incomes at the fiscal 2001 level.

restricted in its policy options due to its huge fiscal

Note: Segment net sales figures do not include intersegment
transactions. However, segment operating income figures do
include operating income arising from intersegment
transactions.

deficit. Expectations of radical economic structural andfiscal reforms by the government were raised but not
met. The U.S. economy, which had been robust foralmost a decade, slowed consequent to the bursting ofAutomobile Segment

the information technology (IT) “bubble” and the

Net sales totaled ¥563.6 billion (US$4,229.6 million),

terrorist attacks on New York and Washington.

up 23.2% over fiscal 2001 and accounting for 57.5% of

Economic growth in Europe and Asia also slowed as a

total net sales. The increase was due mainly to a rise in

result of the downturn in the IT industry.

sales of car air-conditioning compressors and the fact

Despite the unfavorable business environment, wethat Toyota Motor Corporation (“TMC”) changed its

were able to improve on the consolidated results ofpurchasing policy and started charging for engines

fiscal 2001 because we succeeded in implementing aand other parts for automobiles we assemble that had

clearly defined strategy that exploited our competitive

previously been supplied free. Operating income wasstrengths in each segment and in making further¥29.0 billion (US$217.3 million), up 1.5%.

significant cost reductions. The consolidation of thefinancial results of BT Industries AB (“BT Industries”) for

Materials Handling Equipment Segment

the full year and a weakening of the yen also worked

Net sales totaled ¥353.0 billion (US$2,649.5 million),to our advantage.

an increase of 49.3% over fiscal 2001. Operating

Note: U.S. dollar amounts have been translated from yen, forconvenience only, at the rate of ¥133.25=US$1, theapproximate exchange rate on the Tokyo Foreign Exchange
Market on March 29, 2002.

income was ¥13.4 billion (US$100.3 million), down
8.1%, due mainly to a one-time amortization of
goodwill following the transfer of TMC’s Industrial
Equipment Sales Division to Toyota Industries in April
2001. The increase in sales reflected two majorchanges. In June 2000, Toyota Industries acquired BT
Industries, a leading warehouse truck manufacturer.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

5

To Our Shareholders

BT Industries’ sales were consolidated in Toyota
Industries’ results for the full fiscal year, whereas they

Achievements in Fiscal 2002

were consolidated only for the second half of fiscal

Business Integration

2001. The second was the integration of TMC’s

A key motivation for the absorption of TMC’s Industrial

Industrial Equipment Sales Division in April 2001,

Equipment Sales Division was a strong will towhich increased net sales by approximately ¥27

strengthen the global competitiveness of our Materials

billion (US$202 million).

Handling Equipment Segment, one of our corebusinesses. Toyota Industries now has fullTextile Machinery Segment

responsibility for the development, manufacture, sales

Net sales totaled ¥30.7 billion (US$230.4 million), aand marketing of all TOYOTA-brand industrial

decrease of 7.6% from fiscal 2001. While the Spinningequipment, centered on forklift trucks. The integration

Machinery Business achieved better year-on-yearof development and manufacturing expertise withresults because a sales increase in Bangladesh

strong sales and marketing capabilities should makeoutweighed decreased exports to Uzbekistan, thefor more flexible management and faster decision-

Weaving Machinery Business suffered from decreases

making in response to changes in the market.

in sales of air-jet looms in South Korea, Taiwan,

In May 2001, Toyota Industries and DENSO

Indonesia and China. The overall result was an

Corporation (“DENSO”) agreed to integrate theiroperating loss of ¥0.4 billion (US$2.9 million). In a very

production of car air-conditioning compressors. Toyota

encouraging sign for fiscal 2003, approximately 70

Industries is taking over production of car air-textile manufacturers in Wujiang, Jiangsu Province,

conditioning compressors at DENSO’s Toyohashi Plant

China, had placed orders for a total of more than 3,900

in Japan. Overseas, production will be shared between

air-jet looms by the end of March 2002. These sales

the two companies on a country-by-country basis. All

will be included in fiscal 2003.

our car air-conditioning compressors will continue tobe supplied to DENSO for marketing to major

Others Segmentautomakers worldwide.

Net sales totaled ¥32.8 billion (US$246.3 million),
down 18.0% from fiscal 2001. The global IT slump led

Cost Reduction Activities

to a decrease in the sales of our subsidiary, TIBC

Toyota Industries embarked on an ambitious

Corporation (“TIBC”). Sales of press dies andthree-year cost reduction program to be implemented

production equipment also dipped. Operating income

throughout the Company starting April 2001. We

was ¥4.5 billion (US$33.6 million), an increase of 2.7%.

achieved most of the objectives in the first year, i.e.

Improved profitability in businesses other than thefiscal 2002. We established a special project team inElectronics Business in this segment made up foreach business division to ensure that our costdecreased sales by TIBC. Meanwhile, ST Liquid Crystal

reduction activities were systematic and thorough. As

Display Corp. (“ST-LCD”), which is our affiliate and not

well as enhancing our ongoing VE (Value Engineering)consolidated but is accounted for by the equity

and VA (Value Analysis) activities, we reduced general

method in Toyota Industries’ consolidated financial

expenses and head office fixed costs, and sought toresults, was also directly hit by the high-tech sector

optimize our procurement of materials andcollapse, but maintained its sales and profitability atcomponents globally. Some more difficult tasks

the same level as fiscal 2001.

6

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

remain, and tackling them will be a priority for thesuch criteria as return on assets and cash flows, as wellsecond year of the program.

as by levels of sales and operating income. The effectsof the business integration and the introduction of the

Exploiting IT

in-house company system are manifest in our

The exploitation of the latest advances in IT is one ofachievement of a 40.6% share of the Japanese forklift

our important strategic objectives. We believe that thetruck market in calendar 2001, a record high andpotential impact of IT on competitiveness will bemarking a third successive year of market shares above

significant. Using IT, we are overhauling our traditional40%.

way of doing business to accelerate management
processes, reduce costs and improve productivity.

Reorganization of the Headquarters

We installed three-dimensional CAD (Computer

In January 2002, we embarked on a reorganization of

Aided Design) systems throughout the Company withthe headquarters with the aim of strengthening its

a view to shortening lead-times and further improving

roles in acting as the springboard for corporate growth,

productivity in our development and production

and in creating new values through an organic

departments. Thanks to the introduction of V-Commcombination of technologies and markets generated(Virtual & Visual Communication System), the lead-by our diverse business universe.

time of the bB Open Deck, marketed in June 2001, wasBased on its key functions, the headquarters was

reduced by 30%. We are pushing ahead with thedivided into the Corporate Center, which is responsible

introduction of ERP (Enterprise Resource Planning)for the strategy and administration of the wholesystems to facilitate improvements in overall

company, and the Business Support Center, which

management and to allow swifter decision-making

provides support and services to divisions andthrough universal access to a unified management

departments. This partition clarified the roles of thedatabase. We are gradually harnessing ERP to upgrade

headquarters, and we believe it led to improved

our accounting, procurement, personnel andbusiness efficiency and faster decision-making. We also

production management.

established specialized departments such as theBusiness Planning Department, which is in charge ofPartial Adoption of
In-House Company Systemgenerating ideas for the creation of new products andTaking advantage of TMC’s transfer of its Industrial

and the Technical Planning Department, which unifies

Equipment Sales Division to Toyota Industries in April

and administers our diverse technologies. We also

2001, we created TOYOTA Material Handling Company

strengthened those functions where the headquarters(“TMHC”) as a uniquely independent corporate entity

had not previously played an adequate role, such as

within Toyota Industries. The purpose of this move is tothe management of technologies and theachieve swifter decision-making in the Materials

development of personnel specialized in the Toyota

Handling Equipment Segment so that it can better

Production System.

services that may develop into future business pillars,cope with ever-changing market trends and survive

To coincide with the reorganization, we set out toescalating global mega-competition. TMHC, thoughchange the mind-set of our employees, and laid down

not legally incorporated, has its own highly

five key values as an action guide for them. These

autonomous management and will be evaluated onvalues are detailed on page 14.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

7

To Our Shareholders

Entering the Aftermarket for
Car Air-Conditioning Compressors
In July 2001, Toyota Industries established ACTISManufacturing, Ltd. LLC (“ACTIS”) in Grapevine, Texas,
as a joint venture with DENSO and Toyota Tsusho
Corporation. ACTIS, a remanufacturer of car airconditioning compressors for the North American
market, started production in March 2002. The
company was created to cope with the rising demand
for remanufactured compressors, itself a response tosocial and environmental needs for more efficientutilization of automotive part resources. Armed with
our long-accumulated know-how in production
technologies and quality control, ACTIS intends toreinforce its competitiveness in the remanufactured

Tadashi Ishikawa
President

compressor aftermarket. In February 2002, TD
Deutsche Klimakompressor GmbH (“TDDK”), ourfacilities. Another new product in the Materials

European base for car air-conditioning compressors,

Handling Equipment Segment is a new version of thealso commenced the remanufacture of car air-High-Pick Lift, an electric order picking truck for loads

conditioning compressors.

of 0.5 to 1.5 tons, introduced in October 2001. The newWith respect to the value chain, Toyota Industries

model complements our warehouse equipment lineup,

will expand its car air-conditioning compressor

allowing us to provide materials handling solutions

operations by strengthening the aftermarket business

fine-tuned to the diverse needs of customers. Both theand related services, and providing higher customer

Rail-Less Partner Rack and the High-Pick Lift aresatisfaction.

available in Japan only.
During the fiscal year under review, BT Industries

New Products

also launched several new products, including

Toyota Industries is committed to developing new

warehouse trucks, in the European and Northproducts that accurately reflect market needs andAmerican markets.

satisfy customers. During fiscal 2002, we continued todevelop, manufacture and market new products thatof the TOYOTA RAV4, a compact SUV. Our output isare fully in tune with the needs of our customers.

exported to North America and Europe. In June 2001, we

Some of the following may become mainstays ofbegan production of the TOYOTA bB Open Deck. With

Toyota Industries’ future lineup.

such distinctive features as a rear open deck, the bB

In June 2001, TMHC marketed the Rail-Less Partner
Rack, a “rail-less” addition to the Mobile Rack lineup

8

In April 2001, our Vehicle Division began production

Open Deck appeals to those who favor an outdoor,
active lifestyle. It is available in Japan only.

launched in July 2000. Capitalizing on the unique

The Compressor Division launched the 5SE12, atechnology developed for automatic guided vehicle

compact, lightweight compressor with one-way swash

systems, the product uses electromagnetic guidance,

plate and continuous variable displacement. The 5SE12

rather than rails, to move shelves around warehousedelivers excellent fuel efficiency and acceleration by

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

controlling displacement via sensors that monitor the

manufacture of materials handling equipment such as

operating environment.

forklift trucks and warehouse equipment. ThroughIn June 2001, our Technology Development Center

efficient allocation of management resources, we willdeveloped and launched the 1.5kW DC-AC inverter forwork to turn around Aichi’s performance as well as

the TOYOTA Estima Hybrid. This product increases the

expand our shareholder value.

recreational- and business-use features of a hybrid
vehicle.
headquartered in the U.S., our Compressor Division

Medium-Term Management
Vision for a Prosperous Future

jointly developed a next-generation dry vacuum

Toyota Industries has strategies for both the short andpump for application in semiconductor processing

medium term. In May 2001, we unveiled our medium-

equipment, and started marketing the product interm vision for growth, which targets consolidated net

October 2001. The pump is distinguished by its

sales of more than ¥1 trillion and consolidated

reliability, compactness, light weight, high throughput,

ordinary income of ¥80 billion by fiscal 2006. To makequiet operation, clean vacuum and energy efficiency.

this a reality, we intend to allocate significant

Together with Applied Materials Inc.,

management resources to the Materials Handling

Capital and Business
Collaboration

Equipment Segment and Car Air-Conditioning

In May 2002, following the conclusion of apromote new technologies and business areas thatcomprehensive agreement on capital and businesswill form the core of our future operations, including

collaboration between Toyota Industries and Aichi

the Electronics Business. We will take actions to secure

Corporation (“Aichi”), Aichi made an allocation of new

our global prominence, maintain a high standard of

shares to Toyota Industries. As a result, Toyota

quality control, engage in cost reduction activities,

Industries now holds 34% of Aichi’s outstanding

revolutionize business procedures through utilization

shares. We also obtained a warrant, an option that ifof IT, and focus on the development of personnel with

exercised in May 2003 will raise our holding to 51%. In

specialized knowledge of the Toyota Production

the future, we intend to include Aichi in our network of

System, which is a source of our competitive edge.

Compressor Business in order to further reinforce theiralready high competitive advantage. We will also

subsidiaries once we hold a majority of its shares.
Although currently suffering from poor businessperformance due to the deteriorating market
environment, Aichi is a leading manufacturer of aerial
lift equipment, with a market share of more than 70%
in Japan. Toyota Industries will provide Aichi withcapital, production technology and production control
know-how. In time, we plan to transfer TMHC’s
manufacturing operations for special-purpose
vehicles, including aerial lift equipment, to Aichi, andmake it into a specialized manufacturer of thesevehicles. TMHC will in turn concentrate on theBusiness Outlook for Fiscal 2003
The future course of the world economy is even moreunpredictable than ever. The slowdown in the IT field
and the aftermath of the terrorist attacks on the U.S. in
September 2001 have created great uncertainty. We
expect that in fiscal 2003, ending March 31, 2003,
Toyota Industries will face increasingly challenging
economic conditions. Though showing signs ofrecovery, our electronics-related businesses will bechallenged to fully counter the influences of the global

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

9

To Our Shareholders

IT collapse. We are also concerned that our Materials

implementation of ambitious strategies with specificHandling Equipment Segment will suffer especiallygoals in each business area, and by streamlining

from its vulnerability to lower demand in the North

management. Concurrently, as a responsible corporate

American market. The Vehicle Business will facecitizen, we emphasize activities to protect the naturaldifficult times ahead as production of the Vitz (Yaris inenvironment and fulfill our other social responsibilities.

Europe), our mainstay vehicle, is likely to decrease as a

We thank all of our stakeholders, including

result of intensifying competition in the domestic

shareholders, customers, suppliers, local communities

compact car market and TMC’s full-fledged local

and employees, for their support.

production of Yaris in France. Although demand for car

Toyota Industries has achieved double-digit growth

air-conditioning compressors is expected to increase

for the past three years. Though we expect the growthin the European market, automakers are clamoring

to slow down in fiscal 2003, we believe that will be justever louder for reduced prices.

temporary. Just as high-jumpers momentarily crouch

In these circumstances, we will seek to ensure that

before starting their run-up to the bar for theour products and services are attuned to customer

maximum muscular effect, so corporations need timeneeds. We will also continue with our cost reduction

to gather strength before stepping forward to further

activities. A wider use of IT in improving management

growth. We believe fiscal 2003 will be such a year for us.

efficiency and a continued review of ourIn this annual report, we include as much information

organizational structure will be on the agenda, too.

as available at the time of publication to describe the

For fiscal 2003, we forecast consolidated net sales

direction in which the management team is trying toof ¥990 billion (US$7,429.6 million), up 1.0% over fiscal

lead Toyota Industries. We sincerely hope this report

2002, ordinary income of ¥48 billion (US$360.2

will help all stakeholders to understand where we havemillion), up 0.3%, and net income of ¥23.5 billion

come from, where we are now, and where we are going.

(US$176.4 million), down 14.0%.

As we look to secure further growth in shareholder

Note: The financial projections set forth above are based upon anumber of assumptions and estimates that, while presented withnumerical specificity and considered reasonable by us whentaken as a whole, are inherently subject to significant economic,
business, competitive, regulatory and operational uncertainties,
contingencies and risks, many of which are beyond our control.
Financial projections are necessarily speculative in nature, and it
can be expected that one or more of the assumptions underlying
the projections will prove not to be valid, and unanticipated
events and circumstances are likely to occur. Actual results willvary from the financial projections and those variations may bematerial. Consequently, this report should not be regarded as arepresentation by us or any other person that the financial
projections will be achieved. Current negative market trends inthe global economy make it particularly difficult at present topredict product demand and other related matters.

value, we respectfully request a continuation of the
support we have enjoyed to date.
July 1, 2002

Akira Yokoi
ChairmanCrouching Before Leaping
The most important aspect of our corporate mission is
to increase shareholder value. We consistently aim to
improve profitability, increase shareholder value andachieve stable corporate growth through10

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

Tadashi Ishikawa
President