To Our Shareholders

4
TOYOTA INDUSTRIES CORPORATION

Akira Yokoi

Tadashi Ishikawa

ChairmanPresident

ANNUAL REPORT 2001

On June 28, 2001, the Ordinary General Meeting of Shareholders approved a motion tochange the name of the company. As a result, effective August 1, 2001, the English name of thecompany became Toyota Industries Corporation (“Toyota Industries”). Among the chief reasonsfor the change were our acquisition in June 2000 of BT Industries AB (“BT Industries”) and ourabsorption in April 2001 of the industrial equipment sales division of Toyota Motor Corporation(“TMC”). These businesses now fall within the compass of our Materials Handling Equipment
Segment. Also, it was felt that our corporate name should more accurately reflect the range of ourbusiness domain, which now stretches far beyond the manufacture of automatic looms.
Mr. Chisei Isogai, Chairman, decided that the company’s 75th anniversary year was an
appropriate time for him to retire. At a board meeting held immediately after the Ordinary
General Meeting of Shareholders on June 28, 2001, Mr. Akira Yokoi, Vice Chairman, was elected tothe post of Chairman as Mr. Isogai’s successor. Mr. Tadashi Ishikawa, President, continues in his
position. The position of Vice Chairman has not yet been filled. There were also changes inmanagement positions below the rank of Vice President effective June 28, 2001 as well.
All members of the new leadership team are determined to enhance the international
competitiveness of Toyota Industries and to manage successfully the continuing diversification of
the company.

BEST EVER PERFORMANCE
We are pleased to present the consolidated businessof our business segments and executing a series ofresults of Toyota Industries Corporation for the fiscal

vigorous cost reduction measures.

year ended March 31, 2001 (“fiscal 2001”). Fiscal 2001
was another year of strong performance for Toyota
Industries and its consolidated subsidiaries. We areconfident that we will maintain the momentum of thissuccess in the years to come.

Automobile Segment
This segment includes automobile assembly, engines,
car air-conditioning compressors, and electronicequipment for automobiles.
Net sales amounted to ¥457.6 billion (US$3,693.6
million), up 8.1% over the previous fiscal year. Operating
income was ¥28.5 billion (US$230.2 million), up 16.8%.

Net sales, operating income, net income, and net income

This increase in segment sales was largely owing to

per share for fiscal 2001 (ended March 31, 2001) all

increased sales of car air-conditioning compressors inreached record highs. Net sales and net income showed

North America and Europe, strong Vitz (Yaris) small cara two-digit percentage improvement over fiscal 2000

sales and an increase in the number of models in our(ended March 31, 2000).

engine range.

For fiscal 2001, Toyota Industries posted net income

Materials Handling Equipment Segment¥767.4 billion (US$6,193.6 million), up 65.4% and 22.6%,

This segment covers operations relating to automatic

respectively, over the corresponding figures for theguided vehicle systems, automated storage and retrieval

previous fiscal year. Operating income was ¥47.3 billion

systems, warehouse trucks, and forklift trucks. The(US$381.8 million), an increase of 63.9%. Net income per

operations of BT Industries, which Toyota Industries

share was ¥75.90 (US$0.61), compared with ¥48.32 foracquired in June 2000, now come under the wing of thisthe previous fiscal year.

segment.

Our record results were all the more remarkable

Sales were strong in Europe, the U.S., and Japan. Net

given that the business environment was hardly

sales amounted to ¥236.5 billion (US$1,908.8 million), up

favorable. The Japanese economy showed some signs of

58.6% over the previous fiscal year. Operating income wasrecovery during the first half of fiscal 2001, but in the¥14.5 billion (US$117.4 million), up 153.0%.

second half growth returned to anemic levels and ageneral downturn in confidence was reflected in a sharp

Textile Machinery Segment

fall on the stock market. The U.S. economy began toThis segment comprises spinning machinery and weaving

falter and, although the European and Asian economies

machinery businesses. The former includes thegenerally held firm, the prospect of a serious contraction

manufacture of ring spinning and roving frames, etc., whilein the U.S. cast a shadow over both.

the latter includes air-jet looms, water-jet looms, sizing

Our excellent business performance in an adverse
business climate testified to our success inmachines, and others.
Net sales amounted to ¥33.2 billion (US$268.3 million),

implementing a sound, clearly defined strategy,

up 43.7% over the previous fiscal year. Operating income

exploiting the particular competitive strengths of each

improved from an operating loss of ¥2.97 billion the

ANNUAL REPORT 2001of ¥22.6 billion (US$182.7 million) on net sales of

5
TOYOTA INDUSTRIES CORPORATION

Financial Resultsfor Fiscal 2001

Results by Segment

To Our Shareholders

previous fiscal year to operating income of ¥35 million(US$0.28 million) in fiscal 2001.
These results reflect the success of vigorous sales

In June 2000, Toyota Industries acquired theSwedish company BT Industries, a global leader in the
production of warehouse trucks. Toyota Industries had

activities, particularly in Southeast Asia, andspecialized in counterbalanced forklift trucks. The

improvements in management efficiency throughacquisition therefore made very good sense in terms ofrestructuring.

product mix and Toyota Industries now offers acomprehensive lineup of materials handling equipment.

6

Others Segment

In April 2001, Toyota Industries absorbed the

TOYOTA INDUSTRIES CORPORATIONThis segment includes electronic components, press

industrial equipment sales division of TMC, which had

dies, and others. It incorporates TIBC Corporation

been responsible for the sales and marketing of(“TIBC”), a joint venture with Ibiden Co., Ltd. that

equipment developed and manufactured by Toyota

mainly manufactures ball grid array (BGA)-type plastic

Industries. Whatever a customer’s needs and location,

package substrates for application in high-function IC

we are now ready to offer a comprehensive materials

chipsets.

handling solution.

Net sales of this segment amounted to ¥40.0 billion(US$322.9 million), up 32.8% over the previous fiscal

Cost Reduction

year. Operating income was ¥4.4 billion (US$35.2

During fiscal 2001, we sought substantial reductions inmillion), up 480.5%.

operating and other costs to ensure that we would be

ANNUAL REPORT 2001

Sales of ST Liquid Crystal Display Corp. (“ST-LCD”), a
50-50 joint venture with Sony Corporation, are notincluded in the consolidated figures, but are accounted

in good shape to meet the intensifying competition
across our business universe.
A special project team in each business division

for by the equity method. ST-LCD began theemploys advanced cost management techniques,manufacture of low-temperature polysilicon thin film

including value engineering (VE) at the development

transistor liquid crystal displays (“poly-Si TFT LCDs”) instage and value analysis (VA). We have also raised

April 1999. Sales have since expanded rapidly, in line

awareness among all employees of the need to reducewith ST-LCD’s business plan, and losses recorded by the

expenses, and have curtailed fixed costs at the headequity method have greatly decreased.

office. In addition, using the power of information
technology (IT), we have begun to improve theAchievements in Fiscal 2001

productivity of non-manufacturing divisions based on areview of basic business procedures.

M&A and Business Integration
Toyota Industries aims to secure a position of global
leadership for its materials handling equipment
business, one of our core business segments. During theperiod under review, we took two important steps
toward achieving this goal.

The development department of our Vehicle
Division has been introducing the V-Comm (virtual &visual communication system) and CAE (computeraided engineering) systems, which were used toreduce the development period of the bB Open Deck,
TOYOTA’s bB-based new compact car, designed andmanufactured by our Vehicle Division, and launchedby TMC in June 2001.

In April 2001, we began a three-year cost reduction

compact, internally controlled compressor with one-

program that will build on the progress made in fiscal

way swash plate and continuous variable displacement.

2001. Each project team will reinforce VE and VA

In August 2000, we began production of the 2UZ

activities in order to achieve an even higher level ofengine at our Hekinan Plant. This 4700cc V-8 gasoline

overall efficiency. Measures to be taken include

engine powers the Lexus LX470, an SUV model

optimized global procurement of materials andmarketed by TMC in the United States.
In April 2000, our Textile Machinery Segment

management. If these steps bear fruit, our profit

launched the Internet TTCS (Toyoda Total Computer

structure will further improve.

System), an Internet-compatible textile-production
control system. TTCS can access weaving machines in

New Products

mills throughout the world via the Internet and monitor

During fiscal 2001, we continued to develop,

production, stoppages, machinery condition, productmanufacture, and market new products that are fully inquality, etc. The scope for improvements in efficiency

tune with the needs of our customers. We are confident

using TTCS is substantial.

that a number of our recently launched products willcapacity of one to three tons, depending on the model.

In April 2001, Toyota Industries absorbed the industrial

The GENEO-R is the first reach truck to employ ourequipment sales division of TMC. Following that move,state-of-the-art “System of Active Stability (SAS)” lift truck

Toyota Industries created a comprehensive entity,

safety technology, standard in other models in the

TOYOTA Material Handling Company, as a uniquely

GENEO series (7-Series overseas) and designed toindependent company within the larger company.

reduce the risk of tip-over. Conventional reach trucks

TOYOTA Material Handling Company assumed all theare associated with instability on slippery surfaces andbusiness of the former Industrial Vehicle Division andwhen turning, but the SAS technology counteracts thisMaterials Handling System Division as well as the

drawback. Equipped with a dedicated AC drive systembusiness transferred from TMC. TOYOTA Material

for lift trucks, the GENEO-R also offers ease of operation

Handling Company has its own highly autonomousand maintenance.

management and will be evaluated on such criteria as

In January 2001, we launched the GENEO-R reachtruck, which is exclusively for the Japanese market. The

In fiscal 2001, we launched two types of car air-

return on assets and cash flows, as well as by levels ofconditioning compressors for the European market.

sales and operating income. This strategic move will

The 5SE09, a compact, lightweight compressor withensure that Toyota Industries remains responsive to

one-way swash plate and continuous variablechanges in customer demand and is thus able to achievedisplacement, offers excellent fuel efficiency andhigher sales and earnings in what is an intensively

acceleration by controlling displacement via sensors

competitive sector.

that monitor the operating environment. The 5SL12 is a

ANNUAL REPORT 2001

GENEO-R is an advanced electric reach truck with a

New “In-House Company” Combines
Development and Manufacturing
Expertise with Sales and Marketing
Strength

become mainstays of Toyota Industries’ lineup.

7
TOYOTA INDUSTRIES CORPORATION

components, plus the introduction of supply chain

To Our Shareholders

The Next Step – Medium-Term
Strategy for Growth
Toyota Industries’ management is keenly aware of theimportance of planning for medium- and long-term
growth. In mid-May 2001, we launched our medium-8

term strategy for growth, which targets consolidated
sales of more than ¥1 trillion and income before income

TOYOTA INDUSTRIES CORPORATION

taxes of ¥80 billion by March 2006. Key elements of theplan are outlined below.
Tadashi Ishikawa
President

ANNUAL REPORT 2001

Securing Global Leadership in the
Materials Handling Equipment and Car
Air-Conditioning Compressor Fields

We intend to introduce our manufacturing technique,

Toyota Industries is determined to achieve global

purchase components jointly with them, and toleadership among manufacturers of forklift trucks andpromote the exchange of technology. Toyota Industries

other industrial equipment. Steps already taken to

and BT Industries will adopt a global perspective, forachieve that goal include the acquisition of BT

example in monitoring changes in demand, in order toIndustries and the transfer of TMC’s industrial

maximize customer satisfaction.

equipment sales division to our company.
Before the acquisitions, sales activities directed at

the Toyota Production System (TPS), to BT Industries, toTo maintain our leading international position in the
car air-conditioning compressor manufacturing field, we

end-users were mainly the domain of the Textile

established TD Deutsche Klimakompressor GmbH

Machinery Segment. Accompanying the consolidation(“TDDK”) as a joint venture with DENSO Corporation.

of manufacturing and sales operations within the

In April 2000, TDDK began operations at its factory inMaterials Handling Equipment Segment, we must now

Sachsen, Germany. We now manufacture car air-assume full-fledged sales and marketing activities for a

conditioning compressors in Japan, the U.S. and Europe.

much broader product range. BT Industries has aThis tri-polar system allows us to stay close to

wealth of direct sales experience and we intend to

customers, meet their needs more precisely and reducedraw on that know-how. In particular, we are eager toexchange rate risks.

adopt more widely BT Industries’ solution-proposal
sales technique.
In addition to enhanced marketing, we expect that
our acquisition of BT Industries will bring otherbenefits of synergy. We have started to supply

The proportion of cars in Europe fitted with airconditioning is expected to rise and we aim to makethe most of that opportunity. We shall also seek toincrease sales in the North American market.
In summary, the Materials Handling Equipment

counterbalanced forklift trucks to BT Industries on an

Segment and the car air-conditioning compressor

OEM basis. We are also distributing BT Industries’ handbusiness are core operations, and we shall devote thepallet trucks on an OEM basis in Japan. These

necessary resources to them to ensure their success on

exchanges will be broadened to include other products.

a global basis.

Further Cost Reduction andEnhanced Manufacturing Quality inthe Vehicle and Engine Businesses

The opportunities in this field are enormous.

The vehicle (automobile assembly) and engine businesses

products that have considerable growth potential.

provide stable revenues for our Automobile Segment. In

In April 1999, ST-LCD, the core of our electronics
operations, began the manufacture of poly-Si TFT LCDs,
As a result of using the TPS, ST-LCD’s quality levels

the medium term, we aim to improve cost management

and production volume have improved rapidly andand so maintain profitability in these fields.

output is close to maximum capacity, as forecast in our

Our vehicle business, one of the manufacturing bases

business plan.
In the fall of 2001, ST-LCD will begin a ¥75 billion

enhance the attractiveness of TOYOTA-brand cars bycapital investment program for additional production

further improving product quality and cost efficiency,

facilities in order to meet rising demand expected formaking proposals for the design and launch of new

digital camera, mobile phone, and personal digitalcompact and other cars and improving production

assistant (PDA) parts. ST-LCD’s new facilities, due totechnology.

start operations in June 2002, will double production

In the engine business, we work constantly tocapacity. We envisage ST-LCD as one of our coreenhance the environment-friendly features of our engines

businesses and intend to distribute management

without compromising their performance, and toresources accordingly.

contribute to the improvement in overall performance of
Our vehicle and engine businesses are dedicatedHarnessing the Power ofInformation Technology

mainly to production for TMC. Our production is

Making the most of the remarkable advances in IT is atherefore dependent on TMC’s production and ordering

key part of our medium-term plan. The Internet, PCs,

plans. We seek to strengthen our sales link to TMC

mobile communications and so on are already having athrough ceaseless quality enhancement and cost-downhuge influence on corporate activity, and this influence

activities. Our goal is that TMC will entrust us with thewill continue to grow rapidly. Utilizing IT, we areassembly of, and employ our engines in, a wider range

overhauling our traditional way of doing business toof models.

achieve speedier management processes, reduction in

We are also strengthening our research andfixed costs and increased customer satisfaction. To

development capabilities to play a more active part in

date, improvement is most manifest in shorter productproduct development for TOYOTA vehicles and engines.

development lead times and enhanced productivity

In our vehicle and engine businesses, we aim to securestable profits and cash flows through an efficient
production system.

among non-manufacturing divisions.
Over the next three years, we will invest ¥20.5
billion in IT on a non-consolidated base. We will makea thorough review of our business processes and, at

Successful LCD Operations –the Core of Our Electronics Businessthe same time, upgrade the key systems for

We intend that our electronics operations, which are now

management. We will also install three-dimensional

comparatively small, will play an important part in our

CAD systems in our development departments tofuture growth and will serve to diversify our business.

achieve improved productivity company-wide.

accounting, procurement, and production

ANNUAL REPORT 2001

TOYOTA-brand cars.

9
TOYOTA INDUSTRIES CORPORATIONof the Toyota Group’s compact cars, strives constantly toTo Our Shareholders

10

Creating an Inter-Divisional
Value Chainsought to act on its corporate principles, such as

Throughout our long history, we have constantly

contributing to local communities, undertaking

pushed forward with technological innovation,

extensive research and development, and serving its

explored new markets, and achieved substantial growthshareholders and customers wholeheartedly.

Since its founding, Toyota Industries has always

TOYOTA INDUSTRIES CORPORATION

for each of our businesses. Toyota Industries has

In November 2001, we celebrate our 75th

become a conglomerate with a number of divisions,anniversary. As noted above, in August 2001 weeach of which possesses core technologies and markets.

changed our company name in English to Toyota

By transcending the divisional boundaries, we are

Industries Corporation. In part, this change is designed

taking advantage of these assets to develop

to refresh our spirits and remind us of our core aims.

technologies which will be the basis for the next

Toyota Industries will seek to serve all its

generation of business sectors, markets, and products.

stakeholders, including shareholders, customers,

This inter-divisional value chain, when implemented

employees, suppliers, and local communities. We hopeefficiently, will enhance the value of the company as athat this annual report helps our stakeholders towhole and offer great opportunities for expanded

understand more fully our current activities, financial

business operations.

status, and future prospects. In all our futureendeavors, we respectfully request your continued

ANNUAL REPORT 2001

Maximizing
Shareholder Valuesupport.
August 1, 2001

The basic goal of Toyota Industries is to make profits
and thus enhance shareholder value. To this end, we
will pursue our short- and medium-term strategies
consistently and vigorously.
Effective August 1, 2001, we changed the minimum

Akira Yokoi
Chairmantrading unit of our shares from 1,000 to 100 in orderto promote more active trading of our shares,
particularly among individual investors.
We are also enthusiastically promoting
environmental and community activities to fulfill our
responsibilities as a good corporate citizen.

Note: U.S. dollar amounts have been translated from yen, for convenience only,at the rate of ¥123.90 = US$1, the exchange rate on March 30, 2001.

Tadashi Ishikawa
President