Top Message

Top Message

Formulating a New Vision for
the Next Decade and Seeking
Sustainable Growth inHarmony with SocietyOver the past decade, the Toyota Industries Group has steadily
undertaken initiatives for sustainable growth. Accordingly,
as a confirmation of our aspirations toward the year 2030,
we have revised the existing Vision 2020 and formulated Vision 2030.
In this section, President Akira Onishi provides an overview of the
new vision and describes specific initiatives for its achievement.
Company Introduction

Akira Onishi President

1 Review of Vision 2020

Business Results of thethe world’s leading manufacturer of lift truck
Handling
Equipment
Corresponding Period
attachments; Taiwan-based Tailift Co., Ltd., a85%
50%(FY2019)(FY2013)lift truck manufacturer possessing strengths in
Operating profit 200.0
models targeting emerging countries; the sales(¥ Billion)
134.6
Over 3,000.0
financing operations for materials handling(127.3)Operating profit
77.0
equipment of Toyota Motor Corporation (TMC)
122.9
Over 2,500.0(IFRS basis)in the United States; and U.S.-based Bastian2,250.4
2,214.9
Solutions LLC and Europe-based Vanderlande
Net sales
Textile Machinery, etc.
(1,675.1)
1,615.2
Materials
Industries Holding B.V., both of which provide
Car Electronics,
Foundry, etc.
Handling
logistics solutions.
Equipment
EngineVehicleThese initiatives have yielded steady66%
37%
Car Air-Conditioning(FY2019)(FY2013)Compressor
increases both in net sales and profits
Net sales
Materials Handlingsince fiscal 2013. With regard to business
Equipment
composition, the ratio of the mainstay Materials
2017
2019
2021(Forecast) (Numerical targets)
FY2013Generally Accepted Accounting
International Financial
Handling Equipment Business nearly doubled
Principles in Japan (JGAAP)
Reporting Standards (IFRS)
in terms of net sales.
As a first step, we had concentrated on making investment in establishinga required growth structure in each business, including the Materials Handling
Equipment Business, in preparation for future growth. Going forward, we will
harvest these “crops” and turn them into greater earnings.
Materials

Major Initiatives in Each Business Field

To contribute to an enriched
lifestyle and comfortable society

Targets

Materials Handling Equipment/
Logistics• Net sales: Over ¥3 trillion• Operating profit: Over ¥200 billion (7%)
• ROA*1: 5%, ROE*1: 10%

Car Air-Conditioning
Compressor

Solution

Key Components

MobilityNew
Product
New
Product

New
Product

New
Product

Value
Chain

3Es (Energy, Environmental protection and Ecological thinking) <Technological innovation in environment/energy areas><Expansion of value chain>

World Market<Business development in world markets>

Car Electronics
PCU
components / assemblies

Electric compressors

Production of HVs

Clean diesel engines

Hybrid system for construction machinery

Air compressor for FCVs

Production lines with highenvironmental efficiencies

General-purpose industrial
engines without DPF

Acquisition of dealers in Europe
and the U.S.

In-house development of
inverters for electrified vehicles

Special-edition Vitz

Increase in internallysourced parts

Plastic glazing

Turbochargers

Acquisition of Cascade

Textile Machinery

Others

JAT810 air-jet loom

Automotive
batteries
CFRP

Acquisition of Uster
Technologies

Acquisition of TMC’s sales financing operations formaterials handling equipment in North America

New
Product

Value Chain

EngineFC lift trucks, LiB lift trucks

3Es

*1: B
 ased on acquisition prices for investment
securities

VehicleFinancial Section /Corporate Information

Vision 2020

Promotion of ESG Initiatives

Toyota Industries formulated Vision 2020 in October 2011 as a roadmap toenter the next stage of growth while maintaining its lean corporate structure thatwas created during the global recession triggered by a financial crisis.
Vision 2020 was based on a robust strategy comprising three action
themes. These were: 1) development of eco-friendly, energy-saving products
based on the keywords of 3Es (Energy, Environmental protection and Ecologicalthinking) in the Materials Handling Equipment Business, automobile-related
businesses and Textile Machinery Business; 2) enhancement of our value chain
in seeking to provide convenience to customers in various fields, including
after-sales services and sales financing; and 3) business development in world
markets to deliver products and services to customers worldwide. Based onthese themes and also through M&As, we had endeavored to set up a structurenecessary for future growth.
In promoting these initiatives, we positioned the Materials Handling
Equipment Business as our mainstay business and expanded our value chain
through M&As. Specifically, we acquired U.S.-based Cascade Corporation,

Strategies and Businessesn Major Initiatives and Challenges

World
MarketSales expansion in emerging countries

Business expansion in emerging
countries

Business reinforcement in South America

Business reinforcement in China

Support for development
and production preparations
for the RAV4 globally

Launch of production in
India

Sales reinforcement inNorth America
Sales reinforcement inEuropeAcquisition of Tailift
Acquisition of Bastian and Vanderlande

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Toyota Industries Report 201915

Top Message

2 	Reasons for Revising Vision 2020 into the Toyota

Industries Group Vision 2030

Our Vision 2030 shows what we should be and which direction we should takeover the medium to long term, with its basic concept remaining the same as
Vision 2020. Using Vision 2020 as a cornerstone, we added necessary updates
to accommodate changes in the internal and external environments.

Our policy for promoting business in the future remains unchanged, namely
retaining our origin in the Textile Machinery Business and promoting theautomobile-related businesses and Materials Handling Equipment Business intandem. Under this policy, we will proactively take on yet other challenges ofcreating new value that anticipates the needs of customers around the world.

n Overview of the New Vision
The new vision aims to “contribute to making the earth a better place to live,
enrich lifestyles, and promote a compassionate society by supporting industrial
and social infrastructure around the world through the continuous supply of
products/services that anticipate customers’ needs.”
Toyoda Precepts (corporate creed)eMakr place toa bette
h
t
r
a
the e

Create new values by being studious and creative

Automobile

Toyota Industries Report 2019

Materials
Handling
Equipment /Logistics

Financial Section /Corporate Information

16

compa
ssion
ate s
ocie
ty

d social infrastructure around theustrial an
ort indwo,” “reliable/safe, comfortab
s
n
o
i
Supp
s
s
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i
m
e
d “s
ro
e
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/
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ean
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“Cl

n Our Aspirations for the New Vision
Since its founding in 1926, Toyota Industries has engaged in the Textile
Machinery Business. Beginning from the 1950s, we constantly took on
new challenges to ensure the stability of our management foundation
by extending our reach into such business fields as engine production,
vehicle assembly and the development and production of lift trucks
and car air-conditioning compressors. At the same time, we alsocommenced full-scale operations outside Japan. Later in the 2010s,
we promoted a “concentration and selection” strategy with a focus on
ensuring “affinity” with the Materials Handling Equipment Business andautomobile-related businesses. Throughout our history of evolution
and development spanning more than 90 years, the founding spirit
encapsulated in the Toyoda Precepts (corporate creed) has been a
constant source of support and inspiration for our risk-taking challenges
into new businesses and markets.

live, enrich lifestyles, and promote a

Promotion of ESG Initiatives

n Basic Concept

Founder Sakichi Toyoda

Take on challenges and enter into new businesses
Textile Machinery
TPS

Team

Manufacturing foundation strength

Toyoda Precepts

n Our Approach to Realizing a Sustainable Society
Since its founding, Toyota Industries has constantly endeavored to “contributeto regional living conditions and social prosperity” as one tenet under its Basic
Philosophy that embraces the Toyoda Precepts. As our approach correspondswith the objective of the SDGs, we clearly state the concept in the new vision
and will seek sustainable growth in harmony with society.
Particularly in the area of the environment, we have been working to develop
eco-friendly products to help realize a zero CO2 emissions society by 2050.
In recognition of our efforts in this area, we received A-list ratings in both theStrategies and Businesses

3 Vision 2030

Carrying out the spirit of founder Sakichi Toyoda,• Always be faithful to your duties, thereby contributing to the Company and tothe overall good.
• Always be studious and creative, striving to stay ahead of the times.
• Always be practical and avoid frivolousness.
• Always strive to build a homelike atmosphere at work that is warm andfriendly.
• Always have respect for God, and remember to be grateful at all times.

Company Introduction

We had worked to attain steady growth under Vision 2020. Before reaching its
final year in 2020, we started to consider updating the vision with a view toward
the next decade.
In recent years, considerable changes have occurred in the external
environment, leaving a significant impact on our business strategy. For example,
we have seen a substantial swell of change of the Fourth Industrial Revolution,
driven by a rapid rise in the industrial use of artificial intelligence (AI), big data,
the Internet of Things (IoT), robotics and other cutting-edge technologies. On
the risk front, we can no longer ignore the heightened geopolitical risks as seenin frequent trade disputes and regional conflicts.
Another change involves expanding social demands for non-financial
activities of companies to deal with environmental, social and governance (ESG)
factors, now deemed integral to corporate growth, and to achieve the United
Nations’ Sustainable Development Goals (SDGs) representing 17 goals and
169 targets for a sustainable world. These social demands have prompted
companies to alter their corporate behavior.
Meanwhile, we have seen several changes in business operations within
Toyota Industries as well. These changes, including the growing importanceof the Logistics Solutions Business within the Materials Handling Equipment
Segment and focused development of environment-related technologies ineach business, have also necessitated the revising of Vision 2020.

Toyoda Precepts (Corporate Creed)

17 Goals of SDGs

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climate change and water security categories of the CDP*2 surveys in 2018.
Taking the opportunity, we will continue focusing on activities for conservation of
the global environment.
*2: A
 n international not-for-profit organization established in the United Kingdom in 2000 to encourage companies andgovernments to reduce greenhouse gas emissions, conserve water resources and protect forests

Products and Services of theMaterials Handling Equipment
Business

Value chainn Targets of the New Vision

Targets for FY2031*3: Based on acquisition prices for investment securities.

1) Materials Handling Equipment BusinessLooking at the environment surrounding the Materials Handling Equipment
Business, we expect an increase in logistics volume driven by global economic
expansion and growing needs for greater logistics efficiencies arising from labor
shortages in developed countries and surging labor costs in emerging countries.
In the Materials Handling Equipment Business, we engage in a “flow-type”
business and “stock-type” business. The former refers to a “one-off” model,
which in our case means the straightforward sales of lift trucks and otherequipment. The latter is a recurring revenue model, which at Toyota Industries
involves its value chain and logistics solutions, accounting for 60% of the total
sales of the Materials Handling Equipment Business. Engaging in these two
types of operations is one characteristic of our business in this area, whichmakes us less vulnerable to the impact of an economic slowdown and allows
us to achieve relatively stable growth.

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Toyota Industries Report 2019

Sales financing
Shuttle-type automatedstorage and retrieval
system

SorterSoftwareTransporting andloading/unloading

Automatic guided
vehicle (AGV)
Automated storage
and retrieval system

Automated lift truck

Attachments andother components

Accepting deliveries
and shipping

Storing

Electric lift truck
Reach-type
electric lift truck

Warehouse truck

Sorting
Internal-combustion lift truck

n Strengths in This Business and Initiatives for Growth
In the Lift Truck Business, we seek to achieve business expansion throughcollaboration with the Logistics Solutions Business. We aim to do this byutilizing the comprehensive strengths of our entire value chain encompassing
both “hardware” (sales of a broad lineup of products as well as attachments
and other components) and “software” (sales and service networks, IT-based
after-sales services, sales financing and the capability to provide solutions).
In the Logistics Solutions Business, while giving consideration to ourstrengths in offering an extensive equipment lineup, an ability to create systems
and a global network, we have clearly defined the roles among Bastian,Vanderlande and Toyota Industries and aim to align and maximize synergies
among the three companies.
We will deepen the collaboration between the Lift Truck Businessand Logistics Solutions Business to attain the top position in terms ofcomprehensive strengths.

2) Automobile-Related Businesses (Car Air-Conditioning Compressor)
We anticipate sustained growth of the car air-conditioning compressor market inline with expanding automobile sales and an increase in the number of vehicles
equipped with an air conditioner. Even though we expect car electrification tocontinue over the medium to long term, there is an uncertainty about the speed
at which this will proceed because many factors will affect the advancement.
As such, we have increased our readiness to flexibly respond to any changes inthese circumstances.
More specifically, we are promoting the differentiation of our products
as early as in the development stage to match the needs of every type ofelectrified vehicles, from hybrid vehicles (HV) to plug-in hybrid vehicles (PHV),
electric vehicles (EV) and fuel cell vehicles (FCV). In terms of production, we are

Financial Section /Corporate Information

In the following sections, I would like to describe initiatives to be undertaken in
respective businesses toward the realization of Vision 2030.

Lift trucks andother equipment

Logistics solutions

Promotion of ESG Initiatives

4 Medium-Term Initiatives in Each Business

Fleet management system
Warehouse management system
Telematics

Strategies and Businesses• Net sales: Over ¥4 trillion• Operating profit: Over ¥400 billion• Operating profit margin: 10%• ROA*3: 5% or more, ROE*3: 10% or more

After-sales services
Spare parts

Company Introduction

Numerical Targets of the
New Vision

Our targets under Vision 2030 for fiscal 2031 include net sales of over ¥4trillion, operating profit of over ¥400 billion and an operating profit margin of
10%. Our envisioned business composition in fiscal 2031 is almost the sameas the current one, with the ratio between the Materials Handling Equipment/
Logistics Solutions businesses and automobile-related businesses standingat 2:1. This is because we seek growth in both segments simultaneously. In
the Materials Handling
Equipment/Logistics
Solutions businesses, thelogistics solutions field
will drive strong growth.
In the automobile-related
businesses, we aim toincrease our position in eachfield and achieve growth.
Additionally, while steadilystrengthening and expanding
existing businesses, we plan
to enter into various fields,
to augment either new or
peripheral areas to existing
businesses. By doing so,
we will proactively plant newseeds for future growth.

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in the process of setting up a structure to flexibly accommodate changes in
production volumes of compressors for internal-combustion vehicles and thosefor electrified vehicles.

n Medium- to Long-Term Initiatives

Battery
Cooling

Hydrogen circulation
Electronicpump (FCV)component
Cooling

EV
Oxygen-supplying
air compressor (FCV)PHV
HV

New RAV4

4) Textile Machinery Business
Turbocharger(mounted on GD diesel engine)

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Toyota Industries Report 2019

For our mainstay air-jet looms, we will move forward with sales expansion byleveraging their excellent quality. Along with these efforts, we will increase theirapplications in the field of industrial textile products and promote differentiation

2) Efforts concerning Corporate GovernanceCorporate governance must take hold and properly function within Toyota
Industries. Under this belief, we have steadily and consistently made efforts
to help all members, from top management to individual employees, tounderstand and instill the importance of corporate governance, rather thansimply introducing a related structure and rules for the sake of formality.
Outside directors are also making a significant contribution to the
management of Toyota Industries, as they provide appropriate and effective
advice at the meetings of the Board of Directors based on their abundant
experience. With regard to business performance, we have determined to takea longer view so as to avoid short-sighted management decisions leaning too
much on near-term targets. Similarly, we have cultivated relationships withbusiness partners and other stakeholders from a long-term perspective toachieve sustainable corporate growth. This, in turn, has enabled us to provide
returns to shareholders in a constant and stable manner.

Financial Section /Corporate Information

TNGA gasoline engine

In the fields of vehicles, engines and car electronics, we aim to become a multisupplier having top-notch competitiveness in every field, from vehicle assembly
to components.
As for vehicles, we received the Toyota Quality Control Award from TMC
for seven consecutive years. While demonstrating its top-level quality, cost anddelivery (QCD) capabilities, this business will continue to serve as a foundationof Toyota Industries’ manufacturing operations. Additionally, we have alreadyestablished a structure to retain our competitive edge for the next 30 years as
we completed plant renovations last year. In the future, we will reinforce productplanning and development capabilities on top of our manufacturing capability
and seek to lead the production of compact sports utility vehicles (SUV) within
the Toyota Group.
For engines, we aim to increase our involvement in gasoline engines in
addition to our existing mainstay diesel engines. At the same time, we will
strengthen the competitiveness of our turbochargers and increase models fittedwith them.
In the field of car electronics, we will strengthen each function, fromplanning and development to production, in order to link the trend toward car
electrification to our business growth and contribute to the creation of a lowcarbon society.

Toyota Industries seeks to contribute to society 20 to 30 years into
the future while sustaining our own growth. From this medium- tolong-term perspective, we revised our vision.
As mentioned earlier, our efforts for sustainable growth are
twofold. On one hand, we will reinforce the competitiveness ofexisting businesses on the basis of our strengths in manufacturing. On the other
hand, we will plant seeds and grow them into new businesses to underpin our
expansion in the future. For these efforts, we will continue to make proactive
investment in R&D and other relevant fields.
Among existing businesses, we will focus on logistics solutions andenvironment-related technologies as our priority areas for future growth. We
anticipate continued growth in needs for greater logistics efficiencies andsteady progress in electrification owing to the growing importance of curbing
global warming. In the field of logistics solutions, we have already establisheda structure to pursue growth through synergies among Bastian, Vanderlande
and Toyota Industries. In responding to electrification, we will differentiate our
products based on our broad range of technologies to satisfy the needs ofrespective types of electrified vehicles.
Capturing changes in society as a driving force, we will strive to strengthen
each business and utilize our core technologies to expand our businessdomains.

Promotion of ESG Initiatives3) Automobile-Related Businesses (Vehicle, Engine and Car
Electronics)

1) Direction of Our Business

Strategies and Businesses

Electric
generation

FCV

5 Basic Management Concept

Company Introduction

As electrification and automation progress, the number of heat-emitting
components is expected to increase. Taking advantage of the excellent cooling
performance of our products, we will concentrate on product development
geared toward satisfying such needs. Our policy also focuses on expanding
our business domain into drive system components based on our coretechnologies.

based on their superior environmental performance. We will also
pursue technological synergy with Uster Technologies AG, aconsolidated subsidiary manufacturing yarn quality measurement
instruments, to improve the competitiveness of our products.

Currently, Toyota Industries is implementing initiatives to encourage individual
employees to fully understand the concepts behind the new vision and put this
into practice in their respective positions. Determined to meet the expectationsof our stakeholders, I will work along with all employees to achieve growth byfulfilling the vision to contribute to society.

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