Management’s Discussion and Analysis ofFinancial Condition and Results of Operations
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations
is based on information known to management as of November 30, 2007. It includes forward-looking
statements concerning the expected future performance of Toyota Industries. Please refer to “Cautionary
Statement with Respect to Forward-Looking Statements” at the beginning of this semiannual report, whichpertains to the report as a whole.

Results of Operations
During the first half of fiscal 2008 (the six months ended
September 30, 2007), the Japanese economy continued on asteady path to recovery as private-sector capital investment
continued to increase amid solid corporate earnings. Consumer
spending also picked up momentum on the back of improved
employment conditions. Overseas, despite signs of deceleration in
the U.S. economy, the overall economic outlook remained positive,
with the European economy remaining solidly on track and theeconomies in China and India sustaining a high level of growth.
In this operating environment, Toyota Industries posted
total consolidated net sales of ¥955.7 billion, an increase of ¥42.7billion, or 5%, compared with the first half of fiscal 2007 (the sixmonths ended September 30, 2006).
At the profits level, ordinary income amounted to ¥63.2
billion, an increase of ¥9.8 billion, or 18%, over the first half offiscal 2007. Despite the effects of a rise in raw materials prices, aswell as increases in depreciation and personnel expenses, thisincrease was largely achieved due to an increase in net sales
worldwide, cost improvement efforts throughout the Group,favorable effects of exchange rate fluctuations and an increasein dividends income. Net income amounted to ¥40.3 billion, anincrease of ¥10.1 billion, or 33%, over the first half of fiscal 2007.
The following is a review of operations for the major
business segments.
Note: Net sales for each business segment do not include intersegment transactions.

engines for Toyota Motor Corporation’s Innovative International
Multi-Purpose Vehicle (IMV) Project.
Net sales of the Car Air-Conditioning Compressor Businesstotaled ¥128.7 billion, an increase of ¥15.6 billion, or 14%, overthe first half of fiscal 2007. A slight decrease in sales in Japan wasoffset by an increase in sales overseas.

Materials Handling Equipment
Net sales of the Materials Handling Equipment Segment totaled¥377.3 billion, a decrease of ¥10.9 billion, or 3%, from the firsthalf of fiscal 2007. Operating income decreased ¥0.8 billion, or4%, to ¥21.9 billion. Excluding the effects of changes in certain
subsidiaries’ fiscal year-end during the first half of fiscal 2007,
however, net sales and operating income increased ¥51.7 billion,or 16%, and ¥1.0 billion, or 5%, respectively. With regards to lift
trucks, both the TOYOTA and BT brands posted increases in total
unit sales backed by the robust European market. We also strove
to enhance our sales network. Meanwhile, sales of aerial work
platforms were strong, bolstered by replacement demand fromthe electricity and telecommunications industries.

Logistics
Net sales of the Logistics Segment totaled ¥57.9 billion, an
increase of ¥18.1 billion, or 45%, over the first half of fiscal 2007.
Operating income jumped ¥1.4 billion, or 259%, to ¥1.9 billion.
In May 2007, we raised our equity stake in Wanbishi Archives Co.,Ltd., which provides total information management services, to100%, making it a wholly owned subsidiary.

Automobile
Net sales of the Automobile Segment totaled ¥458.9 billion, anincrease of ¥27.9 billion, or 6%, over the first half of fiscal 2007,
while operating income rose ¥5.1 billion, or 37%, to ¥18.8 billion.
Within this segment, net sales of the Vehicle Business totaled¥228.2 billion, an increase of ¥5.9 billion, or 3%, over the firsthalf of fiscal 2007. This was attributable to an increase in salesof the RAV4 and a contribution made by the Mark X ZiO, forwhich production commenced in September 2007, offsetting adecrease in sales of the Vitz (Yaris overseas) in Japan.
Net sales of the Engine Business totaled ¥85.0 billion, anincrease of ¥4.9 billion, or 6%, over the first half of fiscal 2007.
This increase was due largely to an increase in sales of KD diesel

Textile Machinery
Net sales of the Textile Machinery Segment totaled ¥30.7 billion,
an increase of ¥3.3 billion, or 12%, from the first half of fiscal
2007, whereas operating income rose ¥0.8 billion, or 144%, to¥1.3 billion. This increase was attributable mainly to continued
strong sales of weaving machinery to China.

Others
Net sales of the Others Segment totaled ¥30.7 billion, an
increase of ¥4.4 billion, or 16%, from the first half of fiscal 2007.
Operating income increased ¥0.4 billion, or 15%, to ¥2.6 billion.

SEMIANNUAL REPORT 2008

7

Management’s Discussion and Analysis ofFinancial Condition and Results of Operations
Automobile Segment

Percentage of Net Sales

Net Sales

Vehicle 23.9%
Engine8.9%
OthersCar Air-Conditioning
Compressor

1.7%

13.5%

Automobile total 48.0%(¥ billion)7SEU17Compressor

500
400

DC-DC converter

2KDDiesel engine

300
2001000Apr.-Sep.
2006

Apr.-Sep.
2007

RAV4Materials Handling Equipment Segment
Net Sales
Percentage of Net Sales(¥ billion)

400300*200100
Materials
Handling
Equipment

39.5%

0

Apr.-Sep.
2006

Apr.-Sep.
2007* Effects of changes in subsidiaries’
fiscal year-end

GENEO(8FG25 overseas, Tonero in Europe)

Internal combustion
counterbalanced lift truck

ReflexReach truck

TZ-10A type “RR”
Truck mount aerial
work platform

Logistics Segment

Percentage of Net Sales
Logistics

6.1%Net Sales(¥ billion)

60
40
200

Apr.-Sep.
2006

Apr.-Sep.
2007

Textile Machinery Segment

Net Sales

Percentage of Net Sales
TextileMachinery3.2%(¥ billion)

40
30201008TOYOTA INDUSTRIES CORPORATION

RX240NEW
Ring spinning frame
Apr.-Sep.
2006

Apr.-Sep.
2007

JAT710Air-jet loomA review of operations by geographical segments follows.
Note: Net sales for each geographical segment do not include intersegment
transactions.

adjustments, cash and cash equivalents as of September 30,
2007 stood at ¥134.8 billion, an increase of ¥52.2 billion, or 63%,
over the first half of fiscal 2007.

JapanNet sales amounted to ¥634.3 billion, an increase of ¥55.2 billion,or 10%, over the first half of fiscal 2007. Operating income
amounted to ¥39.6 billion, an increase of ¥9.5 billion, or 32%. The
increases in net sales and operating income were due mainly tohigher unit sales of car air-conditioning compressors as well as
making Wanbishi Archives a wholly owned subsidiary.

North America
Net sales amounted to ¥139.1 billion, a decrease of ¥15.6 billion,or 10%, from the first half of fiscal 2007. Operating income
totaled ¥3.2 billion, a decrease of ¥1.0 billion, or 23%. Thedecrease in net sales was due primarily to a change in the fiscal
year-end of certain subsidiaries.

EuropeNet sales amounted to ¥151.8 billion, a decrease of ¥5.9 billion,
or 4%, from the first half of fiscal 2007. Operating income was¥3.1 billion, a decrease of ¥0.9 billion, or 22%. The decrease innet sales was attributable mainly to a change in the fiscal yearend of certain subsidiaries.

Dividend Policy
The Company regards the benefits of shareholders as one ofits most important management policies. Based on this stance,
we will strive to strengthen Toyota Industries’ management
platform, promote proactive business development and raise its
corporate value.
The Company’s dividend policy is to meet the expectationsof shareholders while giving full consideration to businessperformance, capital demand, the dividend payout ratio on
a consolidated basis and other factors. The Company intends
to use retained earnings to improve the competitiveness of its
products, augment production capacity in Japan and overseas,
as well as expand into new fields of business and strengthen
its management platform in securing future profits for its
shareholders. It will also use retained earnings to repurchasetreasury stock.
The Board of Directors of the Company voted to distributean interim cash dividend of ¥28.0 per share, an increase of ¥6.0
per share over the first half of fiscal 2007.

Others
Net sales totaled ¥30.3 billion, an increase of ¥9.0 billion, or 42%,over the first half of fiscal 2007. Operating income amounted to¥2.3 billion, an increase of ¥0.9 billion, or 64%.

Cash Flows
Cash flows from operating activities increased ¥86.8 billion
during the first half of fiscal 2008, due mainly to income before
income taxes in the amount of ¥69.1 billion. Net cash provided
by operating activities thus increased by ¥2.0 billion from ¥84.8
billion in the first half of fiscal 2007. Cash flows from investing
activities resulted in a decrease in cash of ¥103.3 billion during
the first half of fiscal 2008, attributable primarily to paymentsfor purchases of property, plant and equipment totaling ¥73.6
billion. Net cash used in investing activities increased ¥5.9
billion from ¥97.4 billion in the first half of fiscal 2007. Cashflows from financing activities resulted in an increase in cashof ¥42.4 billion during the first half of fiscal 2008, due mainly to
an increase in proceeds from long-term loans in the amount of¥40.7 billion. Net cash provided by financing activities totaled¥60.8 billion compared with net cash used in financing activitiesof ¥18.4 billion in the first half of fiscal 2007. After translation

Forecast for the Fiscal Year Ending
March 31, 2008
Toyota Industries expects the global economy to continue
expanding. Uncertainties persist, however, regarding fluctuationsin oil prices and the direction of the global economy, including
the U.S. economy.
We are determined to heighten the comprehensive
capabilities of the Toyota Industries Group through thedevelopment of appealing new products matched to customer
needs with an unwavering emphasis on quality, as well as theenhancement of sales, service and cost-reduction activities.
For fiscal 2008, ending March 31, 2008, Toyota Industries
forecasts consolidated net sales of ¥2,000.0 billion, operating
income of ¥95.0 billion, ordinary income of ¥120.0 billion andnet income of ¥70.0 billion. We have made upward revisions toprevious forecasts in consideration of business results during
the first half of fiscal 2008 as well as increases in unit sales and areview of the projected exchange rate.
Our projections are based on an exchange rate of ¥115.0 =US$1 and ¥159.0 = 1 euro.

SEMIANNUAL REPORT 20089