Company Introduction

Strategies and Businesses Promotion of ESG Initiatives

Corporate Information

Special Feature 1

Special Feature 1
Status of the Materials Handling Equipment Business

Strengths of Our Materials Handling Equipment
Business Aiming for Sustainable Growth

L Business Composition

Since launching the production of lift trucks in 1956, the Materials Handling Equipment Business has grown into Toyota
Industries’ mainstay business through increased product appeal, an improved ability to provide excellent services and anenhanced network. In the meantime, the development of the global economy, innovation of information-related technologies
and expansion of e-commerce and other new industries have generated new, growing needs in the logistics field. Toyota
Industries has responded to such needs and assisted customers in increasing logistics efficiencies by not only offering materials
handling equipment as well as logistics systems and equipment but also by focusing on logistics improvements and solutions.
This Special Feature highlights the strengths and initiatives of our Materials Handling Equipment Business that strives toexpand business by combining lift trucks and logistics solutions.
SeaportDistribution andmanufacturingindustries

The Materials Handling Equipment Business is Toyota Industries’ core business, accounting for 66% of total sales. Lift trucks,
our mainstay product, enjoy the world’s No. 1 market share*, while our Logistics Solutions Business is one of the largest in theworld*. Sales of equipment and those from our stock-type business generating relatively stable revenue, such as after-sales
services and sales financing, respectively account for about 40% of total sales in the Materials Handling Equipment Segment.
We are working to achieve maximum results by leveraging our business structure we have strengthened to date.
Logistics solutions, on which we have been focusing in recent years to respond to emerging needs, make up a rather small
portion of the total sales of the Materials Handling Equipment Business. However, we believe that the business has great growthpotential and have been collaborating with two subsidiaries, which we acquired recently, directed toward expansion.
* Survey by Toyota Industries Corporation

Sales Breakdown by Business Segment
TextileMachinery
3%

Distribution
centerOthers
3%

FY2020Net Sales¥2,171.3
billionMaterialsHandling
Equipment

66％

Automobile
28%

Toyota Industries’
Global Lift Truck Market Share(Survey by Toyota Industries
Corporation, 2019)

Toyota Industries’ materials
handling equipment as well
as logistics systems andequipment support logistics
operations of customers
worldwide at distribution
centers, manufacturing
sites, seaports, airports andother locations.

AirportEnvironment Surrounding Logistics
The need for higher logistics efficiencies is growing, driven by an expected increase in logistics volume over the medium to longterm on the back of further growth of the global economy, coupled with a rise in labor costs mainly in emerging countries andlabor shortages in developed countries. Besides conventional logistics operations using lift trucks, an expansion of e-commerce
has increased the need for handling smaller parcels. In this way, customers’ logistics-related needs have also becomeincreasingly diversified.
GDP by Region

Labor Population in Key Regions (Ages from 15 to 64)(US$ trillion)(Million persons)

250

2,000

200

OthersChina

150

EuropeU.S.A.

100

Japan50013202530

3540(Year)

Source: Produced by Toyota Industries based on the U.S. Energy Information
Administration’s International Energy Outlook 201718Toyota Industries Report 2020

Africa

1,500

India
China

1,000

EuropeU.S.A.

5000Japan

1520253035404550(Year)

Source: Produced by Toyota Industries based on the United Nations’ World Population
Prospects (2017 Revision)

Summary of Sales in the Materials
Handling Equipment Segment
Logistics solutions
Approx. 20%
Value chain in the
Lift Truck BusinessApprox. 40%

Sales financing,attachments andother components
After-sales
services, spareparts and others

Sales of lift trucks andother equipment
Approx. 40%

ToyotaIndustries

19%

World No. 1

Toyota Industries’ Position in the Logistics System Supplier Industry
1.
2.

Toyota Industries Group3.
4.
5.
6. Vanderlande
7.
8.
9.
10.
11.
12.
13.
14. Bastian Solutions
15. Toyota Industries Corporation
16.
17.
18.
19.
20.

Net sales

Source: Produced by Toyota Industries based on the Top 20 Worldwide Materials
Handling System Suppliers in 2020 by Modern Materials Handling magazine

L Initiatives for Future GrowthInnovation spurred by CASE (connected, autonomous, shared and electric) technologies in theautomobile industry is also advancing in the materials handling equipment industry. Based on ourbroad product lineup and accumulated know-how in logistics improvement, we are strengthening
our initiatives in this area for further growth.
Connected: Systems that offer advanced operational management by connecting lift trucks
and other equipment to the Internet and collecting relevant data have become popular mainly
among large-order customers. In addition to increasing the efficiency of logistics operations, thesesystems visualize and analyze such variables as the operational status and battery consumption ofeach lift truck and help improve safety and save energy.
Autonomous: Lift trucks are used for logistics operations mostly in plants and warehouses.
Because they operate in such limited locations, work standardization and automation are easiercompared to automobiles. We added automated guided forklifts (AGF) to our lineup in the 1980s
and have been accelerating the development of products that leverage our automation technology
in response to the growing need for higher logistics efficiencies.
Solution: At Toyota Industries, “S” is defined as “solution,” through which we seek to solve
logistics issues and make proposals for increasing efficiencies. In this endeavor, we go a stepbeyond straightforward automation. We have been strengthening initiatives on a global basis
to provide logistics solutions that are suited to the type and scale of customers’ businesses,
accurately capture their individual needs and that are packaged as optimally designed systems.
Electric: The introduction of electric lift trucks has started early on in the materials handlingequipment industry as customers in certain sectors are required to satisfy zero emissions andother clean performance standards. Currently, more than 60% of lift trucks sold in the world
market are electric. At Toyota Industries, the ratio is more than 70%. We respond to customers’
diverse needs by developing and increasing the lineup of products, including models equippedwith lithium-ion batteries and fuel cell lift trucks.
Among our CASE initiatives, the following pages provide example initiatives in the “S” (solution)and “A” (autonomous) fields, which have been drawing increasing attention from customers.

Operational management system

Fuel cell lift truck19

Company Introduction

Strategies and Businesses Promotion of ESG InitiativesCorporate Information

Special Feature 1

Example1

Example2

Initiatives in the Logistics Solutions Field

With the acquisition of Bastian Solutions LLC and Vanderlande Industries Holding B.V. in 2017, we set up a structure tooffer an even broader range of logistics solutions to more customers. The three companies, including Toyota Industries,
have been working together and successfully created new business opportunities.

L Collaboration of Bastian and Vanderlande in the Development of Image
Recognition Technology
At warehouses and distribution centers, order picking to pick up ordered items from stock
storage is one of the most important operations and reducing pick-up errors is essential inincreasing productivity. Many processes at logistics sites have already been automated andcontributing to higher productivity. However, automation of the order picking process has
not proceeded, as picking up correct items of varying forms and materials poses a technicalchallenge.
Bastian and Vanderlande, which each develops automated picking systems
independently, have formed a joint team to accelerate the development of advanced
technologies that satisfy market demand. Instant recognition of the location and shapeof an item and its stored position is crucial in ensuring the correct picking up of items
whatever their shapes are and however they are stored. As such, automation of the process
requires advanced image recognition technology. The joint team is mainly engaging in
the development of this technology and aiming for early commercialization by increasing
accuracy through feasibility tests using order picking robots of each company.
We will continue to deepen the collaboration between the two companies and develop
technologies and systems that will contribute to greater logistics efficiency.

Initiatives Related to Automation

Since starting the production of lift trucks in 1956, our efforts have been geared toward logistics automation in the future.
We started producing magnetic-type automatic guided vehicles (AGVs) and AGFs in the 1980s and have since beenworking to increase the lineup in this area. Toyota Industries’ AGVs accurately capture the varying needs of each logistics
site, such as carrying industrial products in plants or warehouses, conveying baggage at airports and transporting large
containers at seaports, thereby contributing to customers’ improved logistics efficiencies.
Going ahead, we will further bolster the development of AGVs and AGFs while leveraging our image recognition andother cutting-edge technologies and promoting collaboration with external organizations.

L Taking on a Challenge of Automating Outdoor Operations

Example of image recognition

Capitalizing on our technology and know-how for autonomous driving obtained through thedevelopment of AGVs and AGFs for indoor use, we have been developing technology for
automated operations outdoors, for which needs are growing.
We have conducted outdoor feasibility tests of our AGFs at several locations, including afacility shipping agricultural products. Outdoor automated operations pose a far greater challenge
than indoor operations because of uneven surfaces and irregular cargo locations. We have also
carried out two autonomous driving tests of our towing tractors, which transport baggage andother items at airports, under different conditions. Our focus is to promote the development ofsystems that can ensure safe and smooth automated operations and cargo transportation at aplace crowded with various types of vehicles.
In the future, we will repeatedly conduct feasibility tests on automated operations of lift trucks
and various materials handling equipment for swiftly achieving their practical use.

AGF feasibility test

L Evolution of AGVs
L Working Together in Japan for a Global Delivery Service Operator
through the Collaboration of Vanderlande andToyota Material Handling JapanOne of the important customers of Vanderlande is the world’s largest-class operator
engaging in international delivery services. Up to the present, Vanderlande has built systems
for the operator’s distribution centers in many countries, but lacking a base in Japan, had notbeen able to support them in this regard. On the other hand, Toyota Material Handling Japan,
which is responsible for Toyota Industries’ Lift Truck and Logistics Solutions Businesses, hasbeen developing and selling materials handling systems and equipment in Japan, but insome cases could not fully satisfy customer needs, including the above-mentioned operator,
due to its limited system and equipment lineup.
Meanwhile, Toyota Industries has appealed the strengths of the entire Groupencompassing Bastian and Vanderlande to a broad audience through trade shows and otheropportunities. At the same time, we have concentrated on the establishment of a structure tosell and provide support services for a wide range of Vanderlande’s equipment and systems
in Japan.
These efforts have enabled us to offer the full spectrum of logistics systems in Japan,
including those of Vanderlande, and we received an order from the said operator for the firsttime for a project for a distribution center in the country.

Vanderlande’s CROSSBELT SORTER

Web

Utilizing AGVs for which we have been engaging in the development for many years, we are making
efforts in achieving a more advanced level of logistics automation. With distribution centers
becoming increasingly larger, one challenge is to reduce the workload of operators carrying items
during a process that involves picking up ordered items from storage shelves. In response, we have
utilized our experience in AGV development to create an autonomous logistics robot that tracks thepicking operator at a certain distance and can be summoned or directed to a specified location at
the beginning or end of work. We are accelerating our development efforts for its commercialization
based on the results of feasibility tests undertaken at logistics sites of our customers.
Among our products for use in airports, for which we expect growth in the number of users
over the medium term, we have been focusing on the commercialization of autonomous AGVs.
An autonomous baggage handling system developed by Vanderlande, in particular, has alreadygone into full-scale operation in Rotterdam The Hague Airport. The system can flexibly
accommodate layout changes on the operating route and system expansions. Efforts are also
underway to integrate AGVs manufactured at one of our lift truck production bases in Europe intothe system. We are stepping up efforts to increase its use mainly at hub airports around the world
as an epoch-making system that replaces conventional conveyors.

Autonomous logistics robot

Autonomous baggage handling systemused in airports

Web
Link to system details.

Link to sorter details.

Message from the Director
In the Logistics Solutions Business, Group companies complement each other in terms of geographical coverage and thesize and business category of target customers through increased collaboration within the Group, and we can now offer
solutions that combine the “hardware” and “software” of each company. Collaboration with the Lift Truck Business has
increased opportunities to offer an even broader set of logistics solutions to customers using our lift trucks. Based on ourcomprehensive strengths, we seek to accurately respond to our customers and further realize business expansion.

20

Toyota Industries Report 2020

Logistics needs have become increasingly diversified and have continued to change. Leveraging ourexperience and know-how accumulated while working with customers worldwide, we seek to develop
products and services that go a step ahead of the times and offer optimum solutions to individualcustomers. Fueled by an accelerated expansion of the e-commerce market as a result of the spread of
COVID-19 and other factors, needs in the logistics solutions field are on the rise, which in turn is expectedto advance the mechanization and automation of logistics operations. As a response to the changing
environment, we are working to expand business by further strengthening the collaboration of Bastian,Vanderlande and Toyota Industries, each of which possesses different strengths. We aim to become theworld’s leading logistics solutions provider to help customers resolve their logistics-related issues byharnessing our strengths in engaging in the two businesses of lift trucks, for which we enjoy the world’s top
market share, and logistics solutions, for which significant growth is expected in the future.

Yojiro Mizuno
Director andSenior Executive Officer21