Message from the
President

We will transform into a “polymerlike organization” that excels in
responsiveness to changes, speed,
and dynamism
My name is Katsumi Saito, and I assumed the positionof president in June 2023. I am once again aware of theweight of responsibility and the great potential power of
the Toyoda Gosei Group as I am now in a position to
influence the lives of many people, including our 40,000
global employees, their families, and our business
partners, and to take the helm to achieve sustainablegrowth and development in a time of great change in
the automotive industry.
I am a car enthusiast by nature. My family ran an auto
repair shop, so cars have been a part of my life since I

6

was a child. In my job search, I researched companies
in various industries, but I came to the conclusion that I
wanted to work for a company that is involved in theautomobile industry, which I love so much. In particular,
I was attracted to suppliers that can be involved in awide range of automobile manufacturing, and among
them, the potential of polymer technologies such as
rubber and plastics, and I made the decision to join
Toyoda Gosei. Our company’s polymer technology,
which I was strongly attracted to at the time, has beensteadily evolving and still has great potential to support
corporate growth and development.
Originating from the rubber research department of
Toyoda Automatic Loom Works, Toyoda Gosei has long
been involved in polymer technology. For more than 70
years, we have been providing products and services
with high functionality and quality based on rubber,About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

In today’s world where the global market structureis undergoing major changes, we aim to become
a company that can make its presence known
through our “KOBUNSHI” based on the polymer
technology that we have developed over many years.
Katsumi Saito
President, CEOplastic, and their formulation and processing
technologies, and this has been a major strength thathas enhanced our competitive advantage.
In assuming the position of president this time, we havedrawn up the vision of the company based on what I
have personally felt through my past experiences. We
have been and will continue to pursue and deepen our
expertise in polymer-related technologies. By energizing
our people and organization, we would like to become acompany where people think “Toyoda Gosei is aninteresting company” and “this is a company that
benefits people.”I have learned from my experience that work nurturesand builds people. I would like to build a strong andflexible organization by further developing the mindset
and actions that we have cultivated through our long
history of manufacturing products based on polymer

materials.
Polymers are large molecules made by combining small
unit molecules. By linking these molecules together,materials with a wide variety of functions and propertiesare created. Having been involved in human resource
management for many years, I view people andorganizations in the same way. When people withdiverse values gather and mingle with each other,creativity is produced and also organizations andinstitutions, both inside and outside the company, arejoined together. By forming a polymer-like organization,
we can bring together creativity, teamwork, and power
through chemical reactions and molecular bonding thatmake the most of individuality.
In order to cope with an uncertain businessenvironment where the future is unclear, includingchanges in people’s sense of values, increasingly
complex environmental and social issues, and growing

T OYODA GOSEI REP OR T 20 23

7

Message from the President

geopolitical risks, the people and our organizations
must become more organically connected to thinkflexibly and to adapt to changes in form on the fly. We
will build a corporate culture that excels in
responsiveness to environmental changes, speed, anddynamism. We will become a company that people
think of as interesting and that benefits people byhaving each individual change and make changes
boldly without fear of failure, take on challenges, andattract, seize, and create opportunities.

Reexamining the value of our own
existence, we have formulated a new
business plan that aims to achieve bothsocial and economic value<FY2022 in Review>
In FY2022, we worked to create a system that could
flexibly respond to changes in the business environmentand generate profits. We made improvements
throughout the entire value chain, with a focus on theAmericas, which had significant profitability issues,
based on the three pillars of reducing cost beyond
conventional levels, limiting the impact of material
market conditions, and responding to production
volume fluctuations. Although the implementation ofthese measures was generally successful, there was agreater drop in production than we had anticipated,
mainly in the Japanese domestic market, as a shortageof semiconductors prevented the production of luxury
car models. As a result, the product mix worsened, andalthough sales revenue grew, operating profit increased
only slightly. Going forward, we will demonstrate theresults of our steady buildup of strength as the logistics
Consolidated Financial Results for Fiscal Year Ended
March 31, 2023 (April 1, 2022–March 31, 2023)
Consolidated Operating Results(Amounts are rounded down to the nearest million yen)
(Percentage figures are changes from the previous year)

Revenue
Millionsof yenFY ended
March 31, 951,877
2023
FY ended
March 31, 830,243
2022

FY ended
March 31, 21,048
2023
FY ended
March 31, 26,7342022

8Pre-tax profit%

Millionsof yen%Millionsof yen%14.7

35,0692.6

35,323

(6.3)

15.1

34,172(6.3)

37,696

1.1

Net income
Millionsof yenOperating profit%

Net income attributable Comprehensive income
to owners of parent
Total
Millions
Millions%%of yenof yen(21.3)

16,004(31.5)

33,150(37.8)(29.8)

23,352(33.7)

53,294(8.1)

and supply disruptions and price hikes that were
triggered by the COVID-19 pandemic have calmed down.
<Toward the Formulation of Our 2030 Business Plan>
We had embarked on the development of our 2030
Business Plan as the business environment changed
significantly since we had projected in 2018, the year
when the 2025 Business Plan was formulated. Social
trends had also changed dramatically against the
COVID-19 pandemic, rapid progress in decarbonizationand the shift to BEVs (Battery Electric Vehicles), andheightened geopolitical risks. As a result, the social
issues, opportunities, and risks that are important to us
are changing rapidly, and we need to address complex
business issues as quickly as possible.
In devising the new plan, we have once again discussed
how we will contribute to society in the future based on
our company creed, “Boundless Creativity and Social
Contribution,” and our strengths.
One of the reasons for this is my experience when I was
the head of the Human Resources Division. During
recruitment campaigns, more and more applicants
become interested in what they can do for society by
joining this company. In order to continue to be acompany that is trusted and needed by stakeholders
and society at all times, I remember feeling that
economic value alone is not enough to achievesustainable growth; it is necessary to combine
economic value with social value. In the IR activities that
I was in charge of, I also felt that stakeholders had highinterest in and high expectations for our efforts to solve
environmental and social issues, as sustainability
management had become widely accepted. Throughthese experiences, I have come to strongly believe that
it is necessary to return to the basics of “a company is a
public institution.”In the 2030 Business Plan, released in August 2023, we
focus on contributing to solving social issues andachieving sustainable social development throughpursuit of our polymer technologies, a way that is
uniquely Toyoda Gosei. To this end, we will focus on
structural reforms, increasing strategic non-financial
capital, mobilizing each and every one of our 40,000
employees in our 62 Group companies in 16
countries/regions around the world, and maximizing thepower of our people and organization as priority
measures.

Expanding into businesses that
contribute to safety, comfort, anddecarbonization based on ourpolymer technology

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

We are determined to support the transformation ofJapanese automobile manufacturers by anticipating
future trends in mobility, creating new value, and making
the most of our 70-plus years of accumulated
manufacturing expertise to ease the transformation forour various customers. At the same time, we will further
enhance Toyoda Gosei’s competitive advantage bydeveloping products with local automobile
manufacturers in markets such as China and India,
where BEVs are leading the way, and by taking on thechallenges of the changing mobility market. We also aim
to help strengthen the competitiveness of the Japanese
automotive industry as a whole by leveraging the newknowledge and technological capabilities we willdevelop in this new field.
In April 2023, we visited Auto Shanghai, where we saw
first-hand the changes in the automotive industry
through visits to dealers and meetings with executives
from Chinese automobile manufacturers. Although I waswell aware of the dominance of BEVs in the market,
Chinese BEVs have evolved much more significantly
than I had imagined in the three areas of design,function, and finish. I was impressed by the evolution of
the design, which is on par with European cars, and thestate-of-the-art software, such as voice recognition
functionality. It was an opportunity for us to further
strengthen our resolve to take on the challenges of adrastically changing market with our own technologies.
The 2030 Business Plan aims to achieve growth along
two major axes. The first axis is to contribute to society
by developing products and services for the safety andcomfort that will support new mobility, including BEVs,
CASE (Connected, Autonomous, Shared, Electric), and
MaaS. The second axis is to contribute to thedecarbonization of society in order to leave aprosperous global environment for the future.
Compared to automobile manufacturers in theAmericas, Europe, and China, Japan lags far behind in
the adoption of BEVs. To catch up on this lag, our major
customers are working to drastically change
conventional car manufacturing and processes byintroducing “gigacasting,” a production technology thatcan significantly reduce the number of parts. To realize
the new production method, vehicle assembly at
automobile manufacturers must be made easier, andwe expect growing needs for modularization going
forward. This change in car manufacturing means that
we also need to make significant changes in our
products.

Let me explain how we can realize this growth strategy.
The structure of BEVs is drastically different from that ofconventional internal combustion vehicles, and with thischange comes a variety of new needs. We can meet itwith our rubber and plastics technology in various way.
The biggest challenge for BEVs is to improve electric
power efficiency to extend the cruising distance withless power. To achieve this, we must first reduce theaerodynamic drag. The latest BEVs in Europe haveadopted a sleek body design with the tips and roof ofthe car lowered significantly to take aerodynamic draginto account. The lowered hood design naturally lowers
the position of the windshield, so a thinner instrument
panel around the front of the car is essential to ensure a
spacious and comfortable cabin. To achieve this, we areplanning to integrate parts and functions inside theinstrument panel by utilizing our expertise in polymer
materials to slim down the instrument panel using aframework component we have never handled before.
Furthermore, we will make full use of airbag technology
to realize a thinner instrument panel that is unrivaled byany other company. In order to achieve this, we areconducting development efforts that cross over theboundaries of company organizations.
Another major challenge for BEV bodies is that thestructure that absorbs impact is altered by theplacement of the batteries under the body. Normally,
when a collision occurs, the car body deforms toabsorb the impact and reduce the shock to theoccupants. Finally, the seat belts and airbags thenprotect the occupants. In the case of BEVs, however,the structure protects the battery pack so that no force
is applied to the battery, so the body is not easily
deformed in the event of a collision as it has been in thepast. This change in the way the car deforms requires

T OYODA GOSEI REP OR T 20 23

9Message from the President

airbags that are different from those used in the past.
For this reason, we are developing systems such as
high impact-absorbing safety devices and lap airbags
combined with seat belts to accommodate futurechanges in vehicle cabin layouts by advancing ourtechnologies.
With these structural changes in the car due to the shift
to BEVs, we see great opportunities in the areas ofsafety systems and interior and exterior components.
We will create new added value beyond the frameworkof our existing business. For example, we will enhance
our competitiveness through set proposals that takeadvantage of our expertise in the development ofinterior and exterior components, airbags, steering
wheels, and other parts, and collaborate with othercompanies to develop novel technologies. At the sametime, we always want to propose what our customers
want to realize, giving shape to their ideas faster thananywhere else.
In 2030 and beyond, we will reorganize our businessportfolio by shifting our resources to fields that provide
both social value and economic value, taking into
account the changing nature of automobiles and theneeds of the times. First, in the safety systems
business, which is a growth driver, we will expand our
airbag production volume to 1.5 times the current level
and contribute to the reduction of traffic fatalities
through our products, aiming to create a safer
automotive society. This will also lead to our increased

10sales revenue and global market share. Also, as
mentioned earlier, the growth of CASE will bring about amajor change in people’s sense of values toward cars.
We will pursue a new level of comfort in transportation,centered on the interior and exterior component
business, and take on the challenge of providing avehicle cabin space that only we can offer.
As we move toward decarbonization beyond the year
2030, we expect that society’s needs for hydrogen will
increase. The Japanese government’s Basic Hydrogen
Strategy, revised in June of this year, sets new targets
for the amount of hydrogen to be adopted and planslarge-scale investments, so expectations are rising forhydrogen as a sustainable form of energy. Currently, weare providing our hydrogen tanks to Toyota’s MIRAIFCEV (Fuel Cell Electric Vehicles) and CJPT’s* fuel celllight-duty trucks. In the future, we expect to expand ourapplications in many fields, including large trucks andcommercial vehicles, as well as non-automotive
applications such as railroads and ships, and evenhousehold tanks, and we hope to see a path forbusiness expansion.

* Commercial Japan Partnership Technologies Corporation

About Toyoda Gosei

Value Creation Story

We are committed to management
reform to maximize the power of ourpolymer-like organization by leveraging
the culture we have built up over the years
The auto industry is currently undergoing a majortransformation with the advances in electrification andautomated driving. Our business environment is alsochanging at a dizzying pace, with difficulties in securing
human resources due to the declining birthrate andaging population, and changes in corporate
competitiveness due to digitalization. In thisenvironment, we need the power of people andorganizations to implement the 2030 Business Plan.
The most important thing for that is to create a placeand stage where each and every employee can play anactive role. In order to realize a workplace where
employees themselves can be motivated to work
positively together with their colleagues, in other words,
to create a place where they can take on challenges
without fear, we will first work on management reform
for managers. If supervisors do not provide support forthe careers and work of their members, it will be difficult
for them to actively take on new challenges.
To date, we have identified various issues throughactivities conducted by labor and management
together, and have implemented initiatives as
management issues and workplace-based activities.
One such initiative is the renewal and implementation ofmanager education. Our goal is to establish amanagement style in which supervisors tap into themotivation, knowledge, and ideas that individual
employees possess, rather than just supervisors issuing
one-way instructions on work duties. In order to achievethis, it is important for managers to have sufficientpsychological and time resources, so we are working onreforming the way managers work in parallel withmanagement education.
We are also working on strengthening governance andmanagement innovation with the aim of maximizing ourorganizational strength on a global scale. In June 2023,
we introduced the CxO (Chief Officer) system andappointed new positions for CEO, CFO, CRO, CTO, andCMO (Manufacturing) for priority functions. In line withthis change, a portion of the authority previously held by
the president has been transferred to each CxO. Thiswas introduced out of my strong desire to speed up
management by strategically implementing the priority
function “x” on a global basis beyond the framework ofbusinesses and regions. We are shifting from our former
unipolar, unidirectional approach to new multi-polar,
multi-directional approach.

Value Creation Strategy

Foundation of Value Creation

Data

In most cases, the head office in Japan has been
responsible for formulating management andmanufacturing policies and implementing them outside
Japan. We would like to further transfer authority toregional division managers and adopt the concept ofCenter of Excellence to use the strengths of each region
for strengthening regional communications andcooperation among regions. Strengthening cooperation
not only between the head office and the regions, butalso between regions is the very essence of apolymer-like organization in which people andorganizations are more organically connected. We will
be able to create new added value flexibly throughthese efforts.

The Toyoda Gosei Group is on the move.
Becoming a company that exceeds the
expectations of all stakeholders
Toyoda Gosei Group is now making a fresh start toward
a future of great change. Through dialogue meetings
with managers and mid-level leaders as well as labor
union executives, I have sensed a positive energy risingthroughout the company. We will share globally thepolymer-like organization, a new vision for 2030 that wehave prepared for further growth, and aim to become acompany that can demonstrate even greater value in its
social and economic presence.
We will further enhance our IR activities in order to firmly
convey to our stakeholders how our Group is steadily
growing year by year. Ideally, we would like to create avirtuous cycle toward sustainable growth, stimulated bymany opinions through careful dialogue with our
stakeholders.
The entire Toyoda Gosei Group will work even harderthan before to make Toyoda Gosei a company thatpeople think of as interesting and that benefits them,and so we ask for your continued understanding andsupport.

Katsumi Saito
President, CEO
October 2023

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