Focus on
Business

1

Materials Handling Equipment

Exploiting Synergies and Brand
Power for Top Market Share
Determined to further strengthen its global competitiveness, the Materials Handling
Equipment Segment has commenced a host of activities under Toyota Material
Handling Group, a new organization that integrates TOYOTA Material Handling
Company, the world leader in counterbalanced lift trucks, and the BT Industries
Group, the world’s top company in warehouse trucks. Although not included in
TMHG, this segment also includes Aichi Corporation, one of Toyota Industries’
subsidiaries that commands the dominant share of Japan’s market for aerial work
platforms. By providing optimum solutions to meet diverse customer needs, theMaterials Handling Equipment Segment maintains a solid position as a leading
manufacturer of materials handling equipment.

16

Toyota Industries Corporation

Annual Report 2006

Toyota Material Handling Group—Maximizing Synergies
Within the Materials Handling Equipment Segment, Toyota

Toyota Production System—the source of our competitive

Material Handling Company (TMHC) and the BT Industries

edge—joint procurement of components, joint transport

Group have made strenuous efforts to realize synergies byof components and products, standardization of platforms

mutually supplying each other’s brand products, sharing

and joint development of key components. By undertaking

sales and production know-how, exchanging personnel andbusiness closely focused on the needs of customers in its own

jointly procuring components. Backed by the success ofgeographic region, TMHG aims to further accelerate global

these efforts, in April 2006 we integrated both entities underdevelopment and capture a one-third share of the global lift

the framework of Toyota Material Handling Group (TMHG),

truck market as early as possible in the 2010s.

a new organization that we expect will allow us to maximize
synergies as we strive to achieve our target of becoming“undisputed No. 1” in the global lift truck market.
In carrying out its operations, TMHG has divided its
global markets into four regions—Europe, North America,
Japan and International—and established a Board as thedecision-making body within each of these four regionalorganizations. A Management Committee, composedof TMHG top management and representatives of eachregional organization, formulates strategies and manages
TMHG as a whole.
TMHG has also set up Sub-Committees, comprising
functional sections of each regional organization, to handle
such principal functions as quality, R&D, product planning,
information system/information technology, plant operation,
human resources and finance. Cross-sectional linkages
permeating the entire organization facilitate the sharingof best practices and know-how cultivated regionally aswell as by TMHC and the BT Industries Group. Measures tobe stressed include the ongoing transfer and sharing of the

The formation of Toyota Material Handling Group was announced at the
Toyota Industries World Convention 2005 to maximize the synergies of
TOYOTA, BT and Raymond brands.

Organizational Chart of Toyota Material Handling Group

TMHG President

Tatsuo Matsuura

Management Committee Global Strategy, Optimum Resource Allocation, Global Management Control

TMHJ
TMHE

TMHNA

TMHI

TMHJ

Toyota Material Handling
EuropeToyota Material HandlingNorth America

Toyota Material HandlingInternational

Toyota Material HandlingJapan

R&D, Product Planning, Information System/Information Technology, Plant Operation,
Sub-Committees Quality,
Human Resources and FinanceToyota Industries Corporation

Annual Report 2006

17

Focus on
Business

1

Materials Handling Equipment

Brand Portfolio
Subsequent to establishing TMHG, we will continue to firmly

its business utilizing these brand assets. Although not a part

maintain the TOYOTA, BT and Raymond brands, with TMHG

of the TMHG organization, Aichi Corporation (Aichi) also

carrying out activities globally utilizing the strong power

possesses its own strong brand and is promoting its businessof each of these brands. The BT and Raymond brands

globally.

boast strong recognition in Europe and the United States,
respectively, while the TOYOTA brand is solidly positioned inJapan and the United States. TMHG seeks to fully execute

TOYOTA Brand

BT BrandTOYOTA-brand lift trucks and other industrial vehicles

BT-brand warehouse trucks enjoy strong recognition inare sold in Japan under the brand name of TOYOTA

Europe and other regions.

L&F (Logistics and Forklifts). Outside Japan, the TOYOTAINDUSTRIAL EQUIPMENT brand/emblem is used.

Raymond Brand
The Raymond brand is well recognized in North America.

Aichi Brand

Other Brands

Aichi, a leading manufacturer of aerial work platforms in

The CESAB and Lift-Rite brand names are also used inJapan, uses the AICHI brand throughout the world. Visit

designated markets.

www.aichi-corp.jp for further information.

18

Toyota Industries Corporation

Annual Report 2006

Business Activities in Fiscal 2006
Japanese Market

position in this critical segment of the materials handling

Amid a strong recovery in the Japanese economy, total

market. The combination of these industry-leading brands

demand in the domestic market for lift trucks in calendar year

firmly establishes TMHNA as the number-one supplier of2005 increased 9% from 2004 to 82.0 thousand units.

materials handling equipment in North America.

Responding to brisk demand, aggressive sales activities

Calendar year 2005 was not only a record sales year for

implemented within Toyota Industries’ Materials Handling

TMHNA but also one of significant milestones. The RaymondEquipment Business included promoting proposal-based

brand introduced two new models featuring its exclusive

marketing and fortifying response to large-scale and

ACR System™: the AC-powered 5000 Series orderpickers andwide-ranging customers. Mirroring the rising environmental

8000 Series pallet trucks. In addition, the TOYOTA brand wasawareness of companies, we achieved a particularly large

recently honored by Reed Research Group as the leading

increase in sales of electric counterbalanced lift trucks. As a

supplier of lift trucks in terms of quality and value in the

result, the Materials Handling Equipment Business recorded an

United States for the second consecutive year. Additionally,

11% increase in sales to 35.6 thousand units.

the 5,000-pound capacity TOYOTA internal combustion,

For calendar year 2005, Toyota Material Handling Japan

cushion tire lift truck was named the most fuel efficient and(TMHJ) garnered a record-high market share of 43.4% for sales

productive lift truck by USAC Properties, Inc., a subsidiary ofof lift trucks in Japan, marking the seventh year running that

the United States Auto Club.

its market share has topped 40% and the 40th consecutive

Year-to-date 2006 has already provided some significant

year that it has maintained the top-ranked position in themilestones. Toyota built and celebrated the production of its

Japanese lift truck industry.

250,000th lift truck at the Toyota Industrial Equipment Mfg.,
Inc. (TIEM) facility in Columbus, Indiana. TIEM, home to the

Toyota’s Growing Share in theJapanese Lift Truck Market(%)

state-of-the-art National Customer Center (NCC), builds 99%of the TOYOTA-brand lift trucks sold in North America. During
its first year of operation, the NCC welcomed more than 340

50

40.6

41.2

42.6

42.6

43.4

01

02

03

04

05

guests representing nearly 100 companies.

40
30
20
10
0
CY

Aichi recorded a sharp rise in sales from the previous
fiscal year, supported by solid replacement demand
from such principal customers as the electric power andtelecommunications industries.

North American Market
The North American market for lift trucks showed continued

Sonny Toyoda, president of TIEM; Al Rawson, president of Atlas
Toyota Material Handling and chairman of Toyota’s National
Dealer Advisory Council; Shankar Basu, president and CEOof Toyota Material Handling USA, Inc.; and Tatsuo Matsuura,president of Toyota Material Handling Group, celebrate theproduction of the 250,000th lift truck, a four-wheel internal
combustion cushion tire model.

strong growth in 2005. Toyota Material Handling North
America (TMHNA) took advantage of the sustained growth,

TOYOTA-brand lift trucks are sold and supported by awith the TOYOTA brand recording its highest sales volume

network of 69 dealers through 187 locations. Raymond-brandto date, and solidified its position as the top-selling lift truck

trucks are sold and supported by an international network

brand in North America for the fourth consecutive year,of Raymond dealers who provide comprehensive materials

improving its position relative to other industry players. Sales ofhandling solutions. In North America, 39 dealers serve theRaymond-brand electric lift trucks were also at record levels,

United States, Canada and Mexico, selling and servicing

exhibiting particularly strong sales growth in the warehousing

Raymond trucks through 108 locations.

and distribution segment to maintain Raymond’s top-selling

Toyota Industries Corporation

Annual Report 2006

19

Focus on
Business

1

Materials Handling Equipment

counterbalanced lift trucks and warehouse trucks are strong.

European Market
The European market for industrial trucks continued to

The key approach in international markets has centered

grow significantly during the year in continuation of aon maximizing our business opportunities by offering a full

decades-long period of solid growth. At the same time, there

range of products to meet our customers’ total materials

has recently been a marked increase in cyclical demand

handling needs. We must also ensure our impressive productas well. As a whole, market growth was strongest in Eastern

portfolio is available to all customers in all markets throughEurope.

our different distribution channels.

The total European market at the end of calendar year

The total market for lift trucks in 2005 expanded 17%, along2005 reached 298,000 units. Market share in Europe for Toyota

with 15% and 25% growth for counterbalanced lift trucks

Material Handling Europe (TMHE) was close to 20%, clearly

and warehouse trucks, respectively. Overall market sharesdemonstrating TMHE’s prominence as one of the three major

for Toyota Material Handling International (TMHI) showed

suppliers in the European market.

favorable growth over the same period. Encouragingly, both

The competitive climate continues to be intense. Further,a prolonged rise in raw materials costs combined with agrowth in total market size and market share for TMHI wasachieved in all of these other international areas.

recurrent unwillingness of large customers to absorb priceincreases present a significant challenge in a market withvery strong European-based competitors.
During the year, close integration between the Toyota
and BT organizations within TMHG became even stronger,
underpinned by the two-brand strategy. As one sign of thisdeeper integration, a joint development project was carried

Topic
Record-High Unit Sales of TOYOTA-Brand
Lift Trucks

out, resulting in the launch of a new range of 24-volt electriccounterbalanced lift trucks towards the end of 2005. The

During calendar year 2005, total worldwide unit

market reception of this new product has been extremely

sales of TOYOTA-brand lift trucks amounted to a

positive.

record-high 116.4 thousand units. TOYOTA is the
only brand in the industry to achieve annual sales
exceeding 100,000 units as a single brand.
Currently manufactured at production basesin Japan, the United States, France and China,
TOYOTA-brand lift trucks are sold and serviced at 320
global sales and service bases all over the world.
Please visit www.global-toyotaforklifts.com for

Cargo

Blitz

TRAIGO

24-volt three-wheel counterbalanced lift trucks jointly developedby Toyota, BT and CESAB

more information on the global sales network and
TOYOTA-brand products.

Unit Sales of TOYOTA-Brand Lift Trucks(Thousand units)

Other International Markets
Africa, Asia, Oceania, the Middle East and South America,(Target)which comprise substantial and varied business areas,

100

encompass emerging markets with rapid growth prospects,

80such as the BRICs (Brazil, Russia, India and China) countries.

60

This range of diversity clearly means that the challenges and

117.8

120

116.4

40

economic performance factors are different in character.
In general, all markets have demonstrated growth, witheconomic development inevitably spurring higher levels of
business activity. In such an environment, potential sales of20

Toyota Industries Corporation

Annual Report 2006

20

0
CY

01

02

03

04

05

06

Looking Ahead
Japanese Market
The year 2006 marks the 50th anniversary since thecommencement of sales of TOYOTA-brand lift trucks in Japan.
During this commemorative year, TMHJ expects continued
solid growth in the domestic lift truck market.
In the future, TMHJ will strive to expand sales and market
share by offering products and services that we hope will
deliver even greater customer satisfaction. In line with these
efforts, TMHJ plans to carry out proposal-based marketingthat offers solutions that accurately address customer needs
as well as promote fleet management contracts to major
customers spanning a wide range of geographic regions. In
September 2006, the series of 1- to 3.5-ton internal combustion
counterbalanced lift trucks with higher standards for both
safety and environmental features will be reintroduced inJapan after a full model change. TMHJ believes this will serveas the tailwind to further penetrate the market. Also, TMHJ will
actively market and sell a wide lineup of materials handlingsystems that include racks, automatic guided vehicle systems
and automated storage and retrieval systems.

North American Market
In 2006, TMHNA anticipates the North American market formaterials handling equipment will reflect the overall economic
outlook, with a slowing pace of growth. Both the TOYOTA andRaymond brands are well situated to take advantage ofthese market conditions to expand their industry leadership
positions. We hope to strengthen the TOYOTA brand’s position
as the number-one selling brand in North America with
the introduction of the much-anticipated 8-Series line, withinternal combustion, pneumatic and cushion tire models
that range from 3,000 to 6,500 pounds. The 8-Series has been
designed to build on Toyota’s strengths with increased visibility,
improved ergonomics, enhanced productivity and superior
durability, all while maintaining its position as the industry’s
safety leader. In January 2007, Toyota will exhibit at ProMat,
the largest materials handling show in North America, where
consumers will get their first look at the 8-Series. We hope tosolidify the Raymond brand’s leadership role in the warehouseand distribution market with products featuring improved
performance and reliability at reduced cost of ownership,
expanding the range of products with the advantages of
AC power. Both of TMHNA’s
brands will seek to expand fleet
services and fleet management
offerings in response to demandby large customers who want to
optimize their lift truck fleetsand control costs.
The year 2006 will
mark a number of
8FGU25significant events for TMHNA. Toyota will commemorate its 40th
anniversary of establishing operations in North America andRaymond celebrates its 85th anniversary. Additionally, in early2007 the Raymond brand expects to ship its 300,000th lift truck.
TMHNA will continue to accelerate the implementationof the Toyota Production System (TPS) at its manufacturing
facilities in Columbus, Indiana; Greene, New York; Muscatine,
Iowa; and Brantford, Ontario, Canada. As a result, we willfurther improve our already strong reputation for productquality and reliability. In conjunction with TPS, TMHNA operates
under a global charter that promotes environmental
responsibility throughout the entire company. Of significant
importance is the exclusive emissions system employed by
the 8-Series that not only surpasses 2007 Federal EPA emissions
standards, but also meets California’s stringent 2010 emission
standards—three years early.

European Market
For 2006, the general growth trend in the European market is
expected to continue, albeit at a somewhat lower rate thanthe last couple of years. Most regional areas are expected
to show growth, especially in Eastern Europe. On the other
hand, an overall increase in GDP levels in Western Europe
is expected to fuel higher market demand in the materials
handling industry in these markets as well.
In line with continued integration of its European
organizations, TMHE expects to reap additional synergies indifferent areas, further increasing its competitiveness to thebenefit of its customers.

Other International Markets
In 2006, TMHI anticipates continued growth in other key
international markets, with strong growth expected indesignated markets, along with business expansion in theautomotive sector and other industries in each region.
In line with ongoing growth in important markets such as
China and Australia, TMHI plans to further strengthen its levelsof activity and local operations. TMHI aims to ensure that its
reputation for quality products is complemented by strong
support capabilities, including maintaining an emphasis on
providing sophisticated systems solution sales for the more
complex warehousing installations planned by many of its
internationally active customers in third party logistics andwarehousing sectors.
It is also clear that key markets in the Middle East, Asia andSouth America require ever-higher levels of sales and service
support, and the focus will remain directed toward satisfying
these needs. Backed by the current Toyota/BT sales network,
TMHI approaches the market with a determination to forge
deeper relationships and develop stronger ties with its dealers
and customers.

Toyota Industries Corporation

Annual Report 2006

21

Focus on
Business

1

Materials Handling Equipment

TopicsToyota Industries World Convention 2005

CESAB Carrelli Elevatori S.p.A of Italy in 1999, BT Industries

In April 2005, the Toyota Industries World Convention was held

subsequently established a production and sales structure

in Japan to share the vision for further growth of the Materials

in the United States, while expanding its product lineup in

Handling Equipment Business among the TOYOTA/BT-related

Europe. In 2000, BT Industries became one of Toyota Industries’

distributors and dealers around the world. At the convention,

subsidiaries and is now carrying out its business by pursuing

everyone present pledged their unity to solidify Toyotasynergies with the TOYOTA brand under the framework ofIndustries’ global top position in the materials handling

TMHG.

equipment industry under the slogan “United We Grow.” Theintegration of TMHC and the BT Industries Group under theframework of TMHG as a means of further creating synergies
was also announced.

50th Anniversary of Lift Truck Sales in Japan and20th Anniversary of Domestic Sales of Materials
Handling Systems
In 2006, Toyota Industries marked the 50th anniversary of selling

Development of Fuel-Cell Lift Trucks

TOYOTA-brand lift trucks in Japan and its 20th anniversary

Toyota Industries developed the fuel-cell hybrid system forsince commencing sales of materials handling systems such

lift trucks in-house, a first among lift truck manufacturers. The

as automatic guided vehicle systems. A ceremony was held

TOYOTA FCHV-F lift truck, which incorporates the fuel-cellin April 2006 to celebrate these anniversaries with domestic

hybrid system jointly developed with Toyota Motor Corporation

distributors and related persons.

(TMC), was exhibited at CeMAT 2005, an international
trade fair for intralogistics held in
Hannover, Germany, in October

Joint Development of Electric Counterbalanced
Lift Trucks for the European Market

2005. Although a few technical issues

TMHC and the BT Industries Group jointly developed amust still be addressed prior tothree-wheel electric counterbalanced lift truck for thecommercialization and widespread

European market and started shipment of the product inuse, the fuel-cell lift truck has great

January 2006. Cesab, which is part of the BT Industries Group,

market potential due to its

took the initiative in the development and produces thesuperior features.

FCHV-F fuel-cell lift truck

product in Italy. The lift truck is marketed as the TRAIGO under
the TOYOTA brand, the Cargo under the BT brand and the Blitz

Full Model Change of Compact Electric Tow
Tractors

under the CESAB brand.

The new Tugnova* (CBT/CBTY) series of electric tow tractors (2to 4-ton towing capacity) was introduced into the Japanese

Full Model Change of 1- to 3.5-Ton Internal
Combustion Lift Trucks

and overseas markets in March 2006 after

In September 2006, Toyota Industries will commence sales ofa full model change. This was the first

1- to 3.5-ton internal combustion lift trucks in Japan following

time for Toyota Industries to incorporatea full model change (sold as the GENEO in Japan and thean AC drive system in its compact tow

8-Series overseas). The 1- to 3.5-ton class internal combustion lift

tractors, achieving superior operability

trucks dominate approximately 50% of the Japanese lift truck

and lower maintenance costs andensuring a high standard of safety.

market and are used by a wide variety of customers primarily
Tugnova (CBT)* A coined word that combines the English word “tug” and the Latin word “nova,”
which means “new,” as well as the English word “innovation,” meaning a newkind of tow tractors

in the transport and warehouse industries. Toyota Industries
embarked on the development of new
lift trucks to attain an even higher levelof performance and functionality in

BT Industries Celebrates its 60th Anniversary

the areas of safety, environmental

A key part of TMHG’s operations, BT Industries AB wasfeatures and ease of operation. Thisestablished in Sweden in 1946, when it began selling

product series will be introduced

construction and transportation equipment, and has since

gradually to the U.S. andexpanded its operations worldwide. In addition to acquiring

European markets.

The Raymond Corporation of the United States in 1997 and22

Toyota Industries Corporation

Annual Report 2006

New GENEO (8-Series) internal
combustion counterbalanced lift truck

Products for the Japanese Market

Products for the Japanese Market — Industrial Vehicles

GENEO (8FG25)
Internal combustion
counterbalanced lift truck

GENEO-B (7FB15)

GENEO-E (7FBE15)

GENEO-R (7FBR15)

2TE18

Electric counterbalanced
lift truck

Three-wheel electriccounterbalanced lift truck

Electric reach truck

Electric tow tractor

Products for the Japanese Market — Materials Handling Systems

Partner Rack

Rack Sorter B

Rack Sorter P

Rail-less mobile rack

Automated storage andretrieval system(Plastic container type)

Automated storage
and retrieval system(Pallet type)Road Sorter H(ACBH10)
Automatic guided
vehicle system

2AFBR15APLB8Automatic
guided lift truck

Automatic guided
pallet truck

Please visit www.aichi-corp.jp
for more information.

Truck Mount Aerial Work Platforms

SH15B

SE08B

TZ-10A type “RR”

Self-Propelled Aerial Work Platforms

SC40A

SR-18AJ

RX07B

Note: Although Aichi Corporation is not integrated into the Toyota Material Handling Group, it comprises an important part of the Materials Handling Equipment Segment.

Toyota Industries Corporation

Annual Report 2006

23

Focus on
Business

1

Materials Handling Equipment
Products for the North American Market
Please visit www.toyotaforklift.com
for more information.

7FGU708FGCU25

7FGCU55-BCS

Internal combustion pneumatic
tire counterbalanced lift truck

Internal combustion cushion tire
counterbalanced lift truck

Internal combustion cushion tire
counterbalanced lift truck—boxcar special model

8FGU25

7FBEU20

7FBCU25

7BPUE15

Three-wheel electriccounterbalanced lift truck

Electric cushion tire
counterbalanced lift truck

Electric order picker

Internal combustion pneumatic
tire counterbalanced lift truck

Please visit www.raymondcorp.com
for more information.

Raymond Model 7400
Reach-Fork Truck

Raymond EASi Pacer Stand-Up
Counterbalanced Truck

Reach truck

Electric counterbalanced truck

Raymond Model 8400 Pallet Truck
Electric pallet truck

24

Toyota Industries Corporation

Annual Report 2006

Raymond Model 5600
Orderpicker

RaymondSwing-Reach Truck

Order picking truck

Very narrow aisle truck

Products for the European Market
Please visit www.toyota-tiee.com
for more information.

7FG/DF30

7FBMF25

7FBEF15Internal combustion counterbalanced
lift truck with deluxe cabinElectric counterbalanced lift truck(80V)

Three-wheel electriccounterbalanced lift truck (48V)

7FBRE14

7SLL

Electric reach truck

Powered stacker

Three-wheel electriccounterbalanced lift truck (24V)

Please visit www.bt-industries.com
for more information.

Cargo E*

Cargo D

Vector*ReflexThree-wheel electriccounterbalanced truck

Diesel-engined counterbalanced
truck

Very narrow aisle truck with shuttle
forks

Reach truck

Ixion*

Opus

Minimover*

Pro Lifter

Support arm stacker truck

Low-level order picking truck

Electric stacker truck

Hand pallet truck* Launched during the years 2005-2006

Toyota Industries Corporation

Annual Report 2006

25

Focus on
Business

2

Car Air-Conditioning Compressor

Applying Unrivalled Technologies toCreate Revolutionary Products
The Car Air-Conditioning Compressor Business is a core business of the Automobile Segment
in addition to being an important strategic business of Toyota Industries. Drawing on a wealthof cutting-edge technologies, we efficiently develop and manufacture high-quality productsthat are closely tailored to customer needs. By doing so, Toyota Industries is contributing toenhancements in comfort and technological advances of vehicles manufactured not only by
Toyota Motor Corporation but the world’s other top-name automakers as well.

26

Toyota Industries Corporation

Annual Report 2006

Breakthrough Innovations and Cutting-Edge
Compressors for Hybrid Vehicles

acceleration. Demonstrating a dedicated commitment to

Toyota Industries’ car air-conditioning compressors are noted

the earth’s ozone layer and global warming, in 2002 Toyota

for unsurpassed quality and reliability, attributes that haveIndustries and DENSO Corporation (DENSO) developed an

won extensive acclaim from Toyota Motor Corporationelectrically driven compressor for fuel-cell hybrid vehicles that

(TMC) and other leading automakers. As testimony to ouruses CO2 as a substitute refrigerant for hydrofluorocarbons.

unsurpassed technological development capabilities, our Car

Also in collaboration with DENSO, in 2003 we developed a

Air-Conditioning Compressor Business has solidly established

two-way compressor with a built-in motor for hybrid vehicles

its competitive superiority in the industry.

and an electrically driven compressor for hybrid vehicles.

combating such environmental problems as destruction ofThis business has a proven track record in consistently

The two-way compressor is driven alternately by the engine

developing new epoch-making products that continuallyduring driving and by a built-in motor during engine stop,

foresee evolving market needs, and in turn, stimulate further

while the electrically driven compressor realizes an optimal

technological innovation of automakers. As prime examples,balance between fuel efficiency and comfort since the carin the 1960s we developed Japan’s first swash-plate

air conditioner can remain turned on even during engine

compressor, while in the 1980s we developed a compact,

stop. Each of these pioneering compressors was developed

lightweight 10-cylinder swash-plate fixed-displacement

and commercialized ahead of our competitors, offering

compressor noted for its outstanding reliability at highfurther evidence of our technological and competitive

operating speeds. We followed this accomplishment insuperiority.

the 1990s by responding to growing concerns about
the environment with the development of an internallycontrolled one-way swash-plate variable-displacement

At the Forefront of the Market with Superb
Technological Capabilities

compressor that reduces the load on the engine to raise

In fiscal 2006, Toyota Industries’ total global production

fuel efficiency. Building on this momentum, in the late 1990s

and sales of car air-conditioning compressors amounted

Toyota Industries unveiled an externally controlled continuous

to 19.1 million units, giving us the top share of the global

variable-displacement clutchless compressor that enhancesmarket. In the Japanese market, we sold approximately

acceleration and reduces energy consumption by sensing

5.5 million compressors to TMC and other principalchanges in the external environment, such as engine

domestic automakers, which made us the market leader.

Automobile Trends and Toyota Industries’ Product Development
1980s

1990s

2000s

Provide higher engine performance and comfortable interior
Slow down global warming

Reduce ozone layer destruction

Automobile
trends

Improve gas mileage
Hybrid cars, fuel-cell hybrid vehicles
Fixeddisplacement
type

Use of HFC-134a refrigerant

1981

2003

Compact, lightweight
10-cylinder swash-plate compressor*
Variabledisplacement
type

1995

ToyotaIndustries’
product
development

Rotary valve-type compressor

Rotary valve-type variable-displacement compressor*

Externally controlled, variable displacement, clutchless type

1997

Power efficient,
Ultra-lightweight, ultra-power efficient, superb drivability
superb drivability
6-cylinder one-way swash-plate compressor*
7-cylinder one-way
swash-plate compressor*
CO2 compressor
2002
CFC-freeCO2 compressor for fuel-cell hybrid vehicles*

2003

Electrically driven compressor

Compact, lightweight, highly efficientElectrically driven compressor for hybrid vehicles*

2003* World’s first commercial products

Two-way compressor

Two-way compressor for hybrid vehicles*

Toyota Industries Corporation

Annual Report 2006

27

Focus on
Business

2

Car Air-Conditioning Compressor

Car Air-Conditioning Compressor Manufacturing Bases
Toyota Industries produces

TDDK

MACI

compressors through a global

Munichtripolar structure encompassing

DetroitDNTS
YSD

Toyota Industries
Corporation

Europe, the United States and Asia,

TACG

including Japan, established throughdirect investments. We also license

DWHI

ACTIS

production in Asia (excluding Japan)

TACKand South America. By carrying out
production near our markets, we

SUBROSare better able to supply products

DNIA
Consolidated subsidiaries
Licensed manufacturers
Local offices

In the United States, during fiscal 2006 Toyota Industries

precisely tailored to local market

DNBR

needs while reducing shipment costs
and exchange rate risks.

In Japan, our largest production base, we have built ansold 7.6 million car air-conditioning compressors, primarily

efficient three-plant integrated production structure thatcomprising fixed-displacement compressors (including

encompasses all phases of operations from production ofexports and local production), to major U.S. automakers

materials to processing and assembly.

and Japanese auto manufacturers in North America. In

In the United States, Michigan Automotive Compressor,

Europe, we sold approximately 5.6 million compressors, mainly

Inc. (MACI)* produces swash-plate fixed-displacement

variable-displacement compressors (including exports andcompressors. In July 2004, Toyota Industries and DENSO jointly

local production), during fiscal 2006.

established TD Automotive Compressor Georgia, LLC (TACG)**,a second North American compressor production base

Operating an Optimal Global Production
Structuresituated near Atlanta in the U.S. state of Georgia that began

With bases in Japan, North America, Europe and Asia, Toyota

compressors have been the main type of compressor

Industries has established an optimal global productionused in North America, we expect that rising global

structure for its Car Air-Conditioning Compressor Business.

environmental awareness will spur increased demand for

operations in December 2005. Although fixed-displacement

Consolidated Compressor Sales(Million units)

20.0

World’s first mass-produced
electrically driven compressor
for hybrid vehicles

18.0

18.2
17.9

19.1

World’s first two-way
compressor for hybrid vehicles

16.0
14.0

World’s first variable-displacement
clutchless compressor

12.0World’s first one-way swash-plate
variable-displacement compressor

10.0World’s first 10-cylinder
swash-plate fixeddisplacement compressor

8.0
6.0
4.0

OthersVariable-displacement compressor
Fixed-displacement compressor

2.0
0
FY

28

80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05

Toyota Industries Corporation

Annual Report 2006

variable-displacement

variable-displacement compressors on schedule in April

compressors, which2006. Yantai Shougang DENSO Co., Ltd. (YSD, in which Toyota

offer excellent energy

Industries holds a 15% stake), a joint venture establishedefficiency. To respondin 1994 with DENSO and Shougang Corporation, began

to this increase inproducing variable-displacement compressors in April 2006

demand, TACG wasin addition to fixed-displacement compressors already being

established as a newplant specializing in

produced.
TD Automotive Compressor Georgia,
LLC

variable-displacement

Looking Ahead

compressors in the

Regarding the future direction of our business, we plan tosouthern United States, where automakers have been

undertake activities geared mainly toward further penetration

actively setting up operations. TACG plans to produce 2of overseas markets. In Europe, where the proportion of new

million compressors annually by 2010.

cars fitted with car air conditioners has risen to nearly 80%,

In Europe, TD Deutsche Klimakompressor GmbH (TDDK)*

Toyota Industries will work to expand sales by cultivating new

produces swash-plate variable-displacement compressors.

customers and further penetrating markets. These efforts will*

be directed mainly toward supplying products matched to

MACI and TDDK are joint ventures with DENSO. As of March 31, 2006, Toyota
Industries held 60% and 65%, respectively, of the shares of these companies.
** TACG is capitalized at US$78 million as of March 31, 2006. Toyota Industries North
America, Inc. (a holding company controlling Toyota Industries’ North American
operations) invested 65% of this capital and DENSO International America, Inc. (acompany controlling DENSO’s North American operations) invested 35%.

the needs of the European market.
In the United States, we expect to work actively to secure
new orders. Aggressive sales promotion activities will also be
undertaken in cooperation with DENSO in the BRICs (Brazil,

In China, where future
demand is expected to

Russia, India and China) markets, where automobile sales
continue to expand.

grow, Toyota Industries
established a joint
venture, TD AutomotiveCompressor Kunshan Co.,
TD Automotive Compressor
Kunshan Co., Ltd.

All of Toyota Industries’ car air-conditioning compressors are supplied to DENSO,
which in turn sells these to leading automakers worldwide. DENSO not only sells
our compressors as a single unit but also incorporates them in DENSO’s car
air-conditioning systems.

Ltd. (TACK), in May 2005.
TACK began producing

Fixed-Displacement Type

10S17 compressor

SCS06 compressor

SV07 compressor(Swash-plate type)(Scroll type)(Vane type)Continuous Variable-Displacement TypeFor Hybrid Vehicles

7SBU16 compressor

7SEU17 compressor

ES18 electric compressor

ES27 electric compressor(Swash-plate type)(Externally controlled,
clutchless type)(Hermetic scroll type)(Hermetic scroll type)

Toyota Industries Corporation

Annual Report 2006

29

Focus on
Business

3

Vehicle/Engine

Realizing Global Competitiveness via
Operational Excellence
Toyota Industries contributes to Toyota Motor Corporation’s car production through theassembly of automobiles and the manufacture of engines. In recent years, the Vehicle andEngine businesses have undertaken a host of initiatives for expanding their operations in
response to TMC’s global strategy. Highly aware that outstanding production capabilities are
the wellspring of competitiveness for these businesses, we expect to make unrelenting efforts
to achieve continuous improvements and further strengthen competitiveness.

30

Toyota Industries Corporation

Annual Report 2006

Vehicle Business
Advantages as a Compact and Midsize
Automobile Manufacturer

Highly Efficient Pre-Production Process

Toyota Industries plays a vital role in Toyota Motortime period, we conducted a sweeping review of our entire

Corporation’s (TMC) car production as one of the vehicle

pre-production process that included reducing the burden

assembly arms within the Toyota Group. Our Vehicle Businessof the actual pre-production process as well as equalizing

primarily assembles compact and midsize automobiles underpeak burdens. Along with these measures, we removed

consignment from TMC. At present, we manufacture twomany barriers among relevant manufacturing, production

models, the RAV4 for Europe and the United States and thetechnology and quality control departments. By eliminating

Vitz (Yaris outside Japan). Our Vehicle Business has won highsuch obstacles as communication gaps—an impedimentacclaim for its top-class quality and quick production launchto speed—and delayed decision-making, we successfully

within the Toyota Group. Moreover, the adoption of theimplemented concurrent engineering whereby everyone

Toyota Production System ensures the thorough elimination ofworked as part of a unified organization to handle multiple

all waste from production operations and that our plants aretasks simultaneously.

utilized with the utmost efficiency.
The Vehicle Business’s automobile assembly operations
date back to the Publica (van) and Corolla (van) in thelate 1960s and early 1970s. Based on the success of these
operations, the full-scale assembly business commenced with

To launch production of the new Vitz and RAV4 in a short

We also improved infrastructure at our assembly plant tobetter respond to TMC’s global expansion and be ready to
manufacture at a high, stable level.
While further raising production capabilities, which are
the strength of our Vehicles Business, we expect to produce

the Starlet at the Nagakusa Plant in 1978. We subsequently

vehicles with superior quality and cost efficiency, thereby

started manufacturing the Vitz (Yaris outside Japan), thefurther contributing to TMC’s car manufacturing operations.

successor vehicle of the Starlet, in 1999. The first-generation
Vitz sparked an expansion in the compact car market in
Japan and was later recognized as a global-standard
compact car. Re-introduced in Japan in February 2005 after
undergoing a full model change, the second-generation

Topic
AD Diesel Engine Fitted in the RAV4 for Europe
Highly fuel-efficient, diesel engine vehicles are widely popular as

Vitz integrates the most advanced safety features andecological vehicles, especially in Europe sinceenvironmental technologies, offering the highest level ofthey emit less CO2.
Toyota Industries developed thequality.
The RAV4 also underwent a full model change and was
re-introduced in November 2005. The newest RAV4 is a truly
global model, offering an even wider interior, high driving
performance and world-class environmental and safety

ecological AD diesel engine jointly with
TMC. The engine is produced at Toyota
Industries’ Hekinan Plant and fitted in the
new RAV4 for Europe, which is assembled
AD diesel engine

by the Vehicle Business.

performance.

Vehicles

Vitz

RAV4

(Yaris outside Japan)

Toyota Industries Corporation

Annual Report 2006

31

Focus on
Business

3

Vehicle/Engine

Pre-Production Process Innovation
Drawing phase
Construction
drawing

SE drawing

Actual production phase
Mass
Trial production Line-off
production

Drawing completed

Final drawing

The pre-production process forthe new RAV4 began in parallelwith that for the Vitz (Yaris outside
Japan). To prepare for the
production launch of the two

Vehicle review
Equipment review

Traditional
pre-production
processmodels in a short period of time,RedoToyota Industries conducteda sweeping review of its

Process configuration

pre-production process in order toCreation of classstandards

Improvement of
production line

reduce the burden of the actual
pre-production process as well as
to equalize peak burdens.

Confirmation step
Vehicle review

Pre-production
process for RAV4

Moved upMoved up

Redo

Equipment review
Process configuration

Consideration of items for
improvement of
production line

Creation of class standards

Trial production
completed

Engine Business
Our Strengths in Development and Production

Industries aims to contribute to their European strategy

Toyota Industries’ Engine Business manufactures diesel andthrough joint development of diesel engines with TMC andgasoline engines ranging in capacity from 1500 cc to 5200

production of high-quality diesel engines.

cc. Manufactured under consignment from TMC, all our
automobile engines are installed on designated TOYOTA cars.

Establishment of Global Production Structure

Our diesel engines developed in collaboration with TMC, in

In March 2005, we started production of 2.2-liter

particular, offer high power and lighter weight in addition

direct-injection AD diesel engines at the Hekinan Plant into lower noise and vibration. Moreover, Toyota Industries

Japan and at Toyota Motor Industries Poland Sp.zo.o.* (TMIP),

commands the world’s largest market share of high-output,

a joint venture in Europe with TMC. This engine is also fitted inenvironmentally friendly industrial engines for lift trucks andthe RAV4 and Lexus IS in addition to the Avensis and Corolla

other materials handling equipment in addition to engines

Verso that TMC assembles in the United Kingdom and Turkey,

such as gas engine-driven heat pumps. Other activities of therespectively.

Engine Business include the manufacture of an assortment offoundry parts integrating sophisticated technologies.

The Hekinan Plant, together with the Kyowa andHigashichita plants, function as mother plants for overseas

Utilizing an automatic guided vehicle system, our Engine

bases that manufacture engines and foundry parts. In

Business operates a flexible structure that responds quickly tocarrying out this crucial role, these mother plants takeproduction fluctuations and achieves operational excellence,

the lead in adopting the latest production technologies

which includes superior capabilities in making quick

developed in Japan and work to refine the production

production launches.

process and technologies before transferring the most

The Engine Business is also at the forefront of developing

advanced production know-how and expertise to overseas

new technologies that reduce environmental load. A

bases.

noteworthy trend in recent years has been an increase in* Toyota Industries’ stake is 40%. Toyota Industries is chiefly responsible for
production operations at TMIP.

the proportion of diesel engine vehicles, especially in Europe,
spurred by the realization that diesel engines are more32

effective in enhancing fuel efficiency and lowering CO2

Contributing to TMC’s IMV Projectemissions. At the same time, TMC aims to raise its presence

In June 2005, the Higashichita Plant commenced productionin the European market and thus plans to increase salesof the 2.5-liter and 3.0-liter direct-injection KD diesel engines

by bolstering its diesel vehicle lineup. In response, Toyota

for TMC’s Innovative International Multi-Purpose Vehicle (IMV)

Toyota Industries Corporation

Annual Report 2006

Project. This project involves the establishment of a globallytransmissions. KTTM supplies these components to Toyota

optimal production and supply structure to develop new

Kirloskar Auto Parts Private Ltd. (TKAP, a joint venture in India

pickup trucks and multi-purpose vehicles to be marketed inwith TMC and the Kirloskar Group, in which Toyota Industries

more than 140 countries around the world. Utilizing Toyota

has a 26% stake), which in turn supplies manual transmission

Industries’ strengths in production operations, we launchedsystems to the IMV Project.

the production line for manufacturing and processing

Toyota Industry (Kunshan) Co., Ltd. (TIK), our subsidiary inaluminum die cast components and assembly of engines

China, is manufacturing foundry parts mainly for automobile

within a short pre-production period.

engines. Addressing a shortage in production capacity

Toyota Industries will continue contributing to theresulting from increased demand, we established ourestablishment of TMC’s IMV supply structure that will mutuallysecond manufacturing base in the country, Toyota Industry

link numerous production bases on a global scale. As a prime

Automotive Parts (Kunshan) Co., Ltd. (TIAP), a joint venture in

example, in May 2004, Kirloskar Toyoda Textile Machinery

which Toyota Industries has a 60% stake, in cooperation with

Private Limited (KTTM), one of Toyota Industries’ subsidiaries in

Taiwan-based Lioho Machine Works, Ltd. and Toyota Tsusho

India that manufactures and sells textile machinery, initiatedCorporation. TIAP commenced production in April 2005.

production of aluminum die cast components for manual

Worldwide Manufacturing Bases of Engine Business

Poland
India

China

Japan

TMIP
Manufacture of diesel engines for
TMC’s plants in the U.K. and Turkey

TKAP
Manufacture of transmissions for
the IMV Project

KTTM

TIK

Hekinan Plant

Kyowa Plant

Manufacture of foundry parts forJapan and manufacturing basesin Poland and India

Manufacture of diesel andgasoline engines

Manufacture of engine
parts

TIAP
Manufacture of foundry parts forengines

Higashichita Plant
Manufacture of foundry parts
Manufacture and supply of
diesel engines for IMV Project

Manufacture of transmission partsfor TKAP

Engines

2AD diesel engine

2KD diesel engine

1HD-FTE diesel engine

2AZ-FE gasoline engine

1FZ-FE gasoline engine(Displacement: 2.2 liters,
used in the Avensis, RAV4,
Corolla Verso and Lexus IS)(Displacement: 2.5 liters,
used in the Hilux Vigo)(Displacement: 4.2 liters,
used in the Land Cruiser)(Displacement: 2.4 liters, usedin the Estima)(Displacement: 4.5 liters,
used in the Land Cruiser)

Toyota Industries Corporation

Annual Report 2006

33

Focus on
Business

4

Electronics

Aiming for Future Growthwith Leading-Edge
Electronics Components
The Electronics Business engages in the development, manufacture and sales of powerelectronics components for automobiles as well as manufactures and sells low-temperaturepolysilicon TFT-LCDs and semiconductor package substrates through joint ventures. Toyota
Industries expects the Electronics Business to be a key driver of its future growth.

34

Toyota Industries Corporation

Annual Report 2006

Car Electronics
Toyota Industries’ Electronics Division develops andthese are currently installed in TMC’s Harrier Hybrid (RX 400h)

manufactures an assortment of automobile-related

and Kluger Hybrid (Highlander Hybrid). As an integral partelectronics components.

of our product lineup, we also develop and manufacture

Our DC-DC converters, which are fitted in Toyota Motora diverse choice of DC-AC inverters for cars with hybrid

Corporation’s (TMC) Prius and Camry Hybrid, were developed

and conventional engines that are capable of convertingby tapping an abundance of know-how and experiencecurrents into the same voltage as household electricity,

acquired through the development of control devices forthereby allowing the operation of various household

electric counterbalanced lift trucks. A key device in hybrid

electronic appliances.

cars, the converter down-converts the high-voltage DC

With growing worldwide interest in environmental

current of the main battery to a lower voltage to recharge

protection, we foresee a steady rise in demand for hybrid

the auxiliary battery and supply power to the lights, wipers,

cars. In gearing up to meet such demand, the Electronics

horn and other in-car devices. The division also develops

Division will continue working to establish a solid position as aand manufactures compact, low-cost DC-DC converters

manufacturer of power electronics devices for hybrid cars.

for electric power steering (EPS) systems for hybrid cars, andCar Electronics Products for Hybrid Cars

DC-DC converter for EPS

New products

fitted in the Harrier Hybrid (RX 400h)
and Kluger Hybrid (Highlander Hybrid)

DC-DC converters
for EPS

DC-DC converter
fitted in the Prius

DC-DC converters

DC-AC inverter
fitted in the Estima Hybrid

DC-AC inverters
FY 2002

2005

2011

Car Electronics

DC-DC converter for the Prius

DC-DC converter for electric
power steering for the Harrier
Hybrid (RX 400h) and Kluger
Hybrid (Highlander Hybrid)

DC-AC inverter for theAlphard Hybrid andEstima Hybrid (1.5 kW)

DC-AC inverter for
the Tacoma (400 W)

Toyota Industries Corporation

Annual Report 2006

35

Focus on
Business

4

Electronics

Low-Temperature Polysilicon TFT-LCD Panels
ST Liquid Crystal Display Corp. (STLCD) was established as aCo., Ltd. and subsequently established ST Mobile Display

joint venture with Sony Corporation (Sony). Holding a 50%

Corporation (STMD) in March 2005 to manufacture

stake in this company, Toyota Industries accounts for STLCD as

low-temperature poly-Si TFT-LCD panels for mobile devices

an affiliate by the equity method.

in anticipation of expanded market demand. STMD

As a core operation within the Electronics Business, STLCD

commenced mass production in April 2006. Sony will position

manufactures small and medium-sized low-temperature

STMD alongside STLCD as a crucial manufacturing base forpolysilicon (poly-Si) TFT-LCD panels primarily for such

low-temperature poly-Si TFT-LCD panels for mobile devices.

applications as video and digital still cameras and mobile

Toyota Industries made a 20% capital investment in STMD.

phones. These TFT-LCD panels are noted for such basic
features as high resolution and low energy consumption.
In addition, Sony is actively promoting its system-on-glass
technology that integrates the display device and its drivercircuits onto a single glass substrate (panel), enablinghighly reliable, lightweight and miniaturized display
modules. Accordingly, these TFT-LCD panels integrate Sony’s
cutting-edge technological prowess.
By combining Sony’s excellent LCD development
capabilities with Toyota Industries’ outstanding expertise inquality control and manufacturing technology, STLCD has built
an optimal production system for manufacturing high-quality,

ST Liquid Crystal Display Corp.

high-performance LCD panels. Since inaugurating mass
production in 1999, STLCD has earned a high level oftrust from an extensive range of customers for its productquality, cost competitiveness and reliable, on-time delivery.
STLCD presently operates with a monthly production
capacity of 40,000 panels (600 x 720 mm) and is establishinga structure capable of providing stable supplies of displays
for mobile devices that quickly meet customer needs.
On a different front, Sony acquired the LCD panel
manufacturing business of International Display Technology

ST Mobile Display Corporation

STLCD

Low-temperature polysilicon TFT-LCDs

36

Toyota Industries Corporation

Annual Report 2006

Semiconductor Package Substrates
Toyota Industries entered the semiconductor package

and smart card suppliers mainly in Europe and China for

substrates business in 1998 when it established TIBC

integration into credit cards and telephone cards.

Corporation (TIBC), a joint venture with Ibiden Co., Ltd. (Ibiden).

Amid high demand for applications in PCs andSemiconductor package substrates are indispensable

mobile phones during fiscal 2006, TIBC recorded a strong

components of PCs, digital still and video cameras, mobile

performance primarily as a result of a switch to highphones, home video game consoles, IC cards and memory

value-added products.

cards. Adopting technologies introduced from Ibiden, TIBC
has steadily expanded its product lineup from its initial
manufacturing of flexible printed circuit (FPC) substrates for IC
cards to wire bonding (WB) package substrates and flip chip(FC) package substrates.
TIBC’s semiconductor package substrates are soldthrough Ibiden to the world’s premier semiconductor
manufacturers and semiconductor-packaging companies
for such applications as PCs and mobile phones. TIBC’s FPC
TIBC Corporation

substrates are also marketed through Ibiden to SIM card

Semiconductor Package Substrate Trend and TIBC’s Production Engineering Development
Substrate trend
Flip-chipped
Super fineMulti-layered

IC signal pins

FC package substrate

FC substrates
Flip chipbonding

WB: Wire bonding (package)
FC: Flip chip
FPC: Flexible printed circuit

Main applications:

Fine
Super thin-filmed
WB substrates

CPU for PCs, PC graphics,
chipsets for PCs

WB package substrate

LSI wirebonding

Main applications:Double-sided

FPC substrates for IC cards
1980

1990

2000

2005

Memory for portabledevices, chipsets for PCs

2010

FPC package substrate

TIBC product line

Sep. 1997

FPC package substrates

Apr. 1999
Sep. 1998
TIBC founded

WB package substrates
Oct. 2002

Main applications:Contact IC cards

FC package substrates

TIBC

Wire bonding (WB)
package substrate

Flip chip (FC) package
substrate

Flexible printed circuit(FPC) package substrate

Toyota Industries Corporation

Annual Report 2006

37

Focus on
Business

5

Logistics Solutions

Applying Proven Expertise to Offer
Comprehensive Logistics Solutions
In addition to cargo transport and warehousing operations, Toyota Industries carries out the Logistics
Solutions Business to help companies reduce logistics costs. We handle all aspects of customers’
logistics by combining our extensive business experience in lift trucks, automated storage andretrieval systems and other materials handling equipment with our production and logistics know-how
cultivated from monozukuri (creating things). As we proactively undertake our Logistics Solutions (3PL)
Business, we are building proprietary business models that strive to optimize the overall flow of goods,
money and information from the manufacturer to the consumer.

38

Toyota Industries Corporation

Annual Report 2006

In March 2005, we took an important step in bolstering

Creating Logistics Solutions by Adopting
Proprietary Know-How

our Logistics Solutions Business by acquiring Asahi Security

As one core business that will support future growth, Toyota

Co., Ltd. (Asahi Security) and making this company into a

Industries is involved in the full-scale operation of its Logistics

wholly owned subsidiary. Asahi Security offers comprehensive

Solutions (3PL) Business in Japan. Through this business, we offer

cash management outsourcing services, including cash

comprehensive solutions to customers’ logistics that include

collection and delivery, cash proceeds management andhandling all aspects of their logistics from the planning andequipment security for the retail, services and transportation

operation of distribution centers to improving their entire

sectors. We further bolstered our Logistics Solutions Businesssupply chain. Toyota Industries aims to help customers

in January 2006 by acquiring an equity stake (41.4% share)

reduce their total logistics costs and address their needs forin Wanbishi Archives Co., Ltd., which stores and manages

logistics improvements by tapping a wealth of accumulated

crucial data for companies and government agencies

experience gained via the production and sales of lift trucks,

as well as provides data backup services in the event of

automated storage and retrieval systems and other materials

disasters. Based on the view that logistics extends far beyond

handling equipment, as well as our production know-how

the mere “flow of goods” to encompass the “flow of cash”

that is exemplified by the Toyota Production System. Toyota

and “flow of information,” the aforementioned acquisitions

Industries considers “logistics” as an ongoing process thatand investments were aimed at expanding the spheres ofcontinues until a product passes the checkout counter at aour Logistics Solutions Business and were also in line with our

retail store. From the perspective of optimizing the overall flowbusiness strategy of providing solutions that enable customersof goods, we thus aim to build proprietary business models

to optimize their overall supply chain.

that enable extensive improvements, including logistics
reforms within retail outlets.

We plan to effectively allocate management resources to
our Logistics Solutions Business, while making major efforts toaccelerate the growth of this business and position it as a key

Formats for Optimizing the Entire Flow of Goods,
Money and Information

aspect of Toyota Industries’ future operations.

Primarily through the Advanced Logistics Division, Toyota
Industries is promoting an array of business formats aimed

Supporting Customers’ Logistics through Cargo
Transport and Warehousing Operationsat providing optimal solutions for individual customers. These

Toyota Industries is engaged in general logistics activities,

include the establishment of Advanced Logistics Solutions

including cargo transport. Taikoh Transportation Co., Ltd.,

Co., Ltd. (ALSO), a wholly owned subsidiary, along with thea Toyota Industries Group company, provides a variety

planning, total design and operation of distribution centersof trucking services that extend throughout Japan via its

via joint ventures with customers and logistics operators as

automotive parts logistics network, as well as warehouse

well as the acquisition of equity stakes in logistics operators.

storage operations.

Operational Scopeof the Logistics
Solutions BusinessDistribution center

Store improvement
consulting

Financial services• Planning/design• Planning and overall designof efficient distribution center
operations• Operation/contracted
management• Cost reduction throughconstant improvements• Receipt of goods/storage• Provide guidance on asimplified goods storage
method that prevents
maintaining unnecessary
inventories• Goods presentation/display• Provide guidance on ways to
get rid of wasteful operations
and increase time spent withcustomers• Cash registers• Sales management for eachcash register and cash
collection and delivery• ATMs• Cash replenishment andmaintenanceComprehensive information
management• Safe-keeping of crucial documents• Document collection and delivery services

Manufacturer

Distribution center

Retailer

Consumer

Toyota Industries Corporation

Annual Report 2006

39

Focus on
Business

5

Logistics Solutions

Principal Initiatives of the Logistics
Solutions Business

Topic

March 2002:
Advanced Logistics Solutions Co., Ltd. (ALSO) established as awholly owned subsidiary to plan logistics and operate distribution
centers.

In June 2006, Toyota Industries acquired a 50.5%

Entry into Mail-Order Logistics
stake from Nissen Co., Ltd. (Nissen), one of the largest
mail-order companies in Japan that engages in

November 2002:
Commenced operation of a room-temperature distribution centerfor convenience stores commissioned by Mitsui & Co., Ltd.

producing and selling clothing and interior goods,
in Nissen Logistics Service Co., Ltd. The company,

Invested in Teion Shokuhin Ryutsu Inc., which engages in storage
and delivery of frozen and chilled foods (in which Toyota Industries
has a 60% stake via indirect investment through ALSO).

which became a subsidiary and was renamed Mail &eBusiness Logistics Service Co., Ltd. (Mail & eBusiness

October 2003:
KTL Co., Ltd. (KTL) established as a joint venture (in which Toyota
Industries has a 50.5% stake) with Kokuyo Logitem Co., Ltd., alogistics subsidiary of Kokuyo Co., Ltd.

Logistics), is involved in the shipping, storage andinspection of goods made by Nissen and its affiliates.
Toyota Industries will cooperate with Nissen to reform

November 2003:
KTL commenced operation of the Kokuyo Tokyo Metropolitan Area
Integrated Distribution Center (IDC).

Mail & eBusiness Logistics’ operations by optimizing theoverall flow of logistics from procurement to customer

March 2004:
Acquired a share of Fuji Logistics Co., Ltd. (Fuji Logistics, in which
Toyota Industries has a 26% stake, with shares acquired from Fuji
Electric Holdings Co., Ltd.).

delivery. Toyota Industries aims to further develop its
Logistics Solutions Business through expansion into themail-order logistics business, which has a broad-based

April 2004:
TF Logistics Co., Ltd. established as a joint venture (in which Toyota
Industries has a 51% stake) with Fuji Logistics for the transport andmaintenance of information devices.

supply chain.

March 2005:
Asahi Security Co., Ltd. made into a wholly owned subsidiary.
January 2006:
Acquired a share of Wanbishi Archives Co., Ltd. (in which Toyota
Industries has a 41.4% stake).
June 2006:
Nissen Logistics Service Co., Ltd. (currently Mail & eBusiness Logistics
Service Co., Ltd.) became a subsidiary (in which Toyota Industries
has a 50.5% stake).

Toyota Industries’ Expanding Logistics Solutions BusinessPharmaceuticalproducts

Frozen foods

Cosmetics anddaily use products

Chilled foods

Establishment ofjoint ventures

Electronicequipment

Takasue

Teion
ShokuhinRyutsuUnrefrigerated
foods

Direct capital relationships
Fuji
Logistics

Ryoshoku

Wanbishi
Archives

Building
equipment

KokuyoLogitem

Asahi
Security

Distribution

Mail &
eBusiness
Logistics
Servive

Stationery
supplies

ApparelStarted operations by fiscal 2005

Printedmatter40

Toyota Industries Corporation

Annual Report 2006

Others(area platform)

Negotiations underway

Focus on
Business

6

Textile Machinery

Realizing Distinctive,
All-Around Quality and Top Customer Service
The history of the Toyota Group began with the invention of
an automatic loom by Toyota Industries’ originator Sakichi
Toyoda. During the intervening years, the Textile Machinery
Business, Toyota Industries’ founding business, has madesignificant contributions to the development of the textile
industry not only in Japan but also around the globe.
Toyota Industries’ Textile Machinery Business undertakes
integrated operations encompassing development,
manufacturing and sales of top-quality spinning and weaving
machinery. Backed by cutting-edge technologies and finely
tailored services, we are able to meet evolving customer
needs the world over.
With an increasing global population and economic
advancement in emerging countries, continued expansionof textile consumption is expected. On the other hand, theindustry is also witnessing intensifying competition for survival
as a result of the emergence of regional manufacturers. Amid
this trend, Toyota Industries will strengthen its technologicaldevelopment capabilities and raise levels of customer
services as it works to reinforce its position as one of theleading manufacturers of textile machinery. We will strive
to differentiate ourselves by exploiting our technologicalcapabilities to develop weaving machinery that is capableof weaving high value-added fabrics for the latest fashion.
To meet increasingly sophisticated market needs, wedevelop and produce superior spinning and weaving
machinery that incorporates cutting-edge control,
communications and mechatronics technologies. Of
particular note, Toyota Industries commands the top global
share for its mainstay air-jet looms. Additionally, as an industry

leader, we have also earned high global acclaim from
customers for ring spinning frames and roving frames.
Please visit www.toyota-industries.com/textile for further
information about our Textile Machinery Business.

Weaving Machinery
Toyota Industries develops, manufactures and sells two
types of weaving machinery: air-jet looms, which insert
weft yarns using air, and water-jet looms, which use water
for the same purpose. We provide customers around theworld with state-of-the-art products that meet and exceed
basic performance requirements demanding high speed
and reliability as well as that incorporate such advanced
functions as monitoring and remote setting of the machines
via the Internet. Toyota Industries also develops, manufacturesand sells such preparatory machinery for weaving as sizing
machines that enable uniform, high-quality sizing of yarns.

Spinning Machinery
Toyota Industries provides spinning-related machinery such as
high-speed ring spinning frames and roving frames to meeta vast spectrum of customer needs. These products excel
in spinning high-quality yarns as well as in providing superior
productivity. We also produce and sell drawing frames andcombers.
Toyota Kirloskar Textile Machinery Private Limited, oursubsidiary in India, manufactures ring spinning frames for the
local market.

Weaving Machinery

JAT710 air-jet loom

LW600 water-jet loom

MackeeSizing machine for spun yarn

Filamaster
Sizing machine for filament yarn

Spinning Machinery

RX240NEW ring spinning frame

FL100 roving frame

DX8 drawing frame

VC5A comber

Toyota Industries Corporation

Annual Report 2006

41

Focus on
Business

7

Automotive Stamping Dies

Manufacture and Quick Delivery of High-Quality Automotive
Stamping Dies
Toyota Industries’ Machinery & Tools Sub-Division handles thelocations is also being actively pursued. Addressing the rapid

design and manufacture of stamping dies for Toyota Motor

growth of the Chinese automobile market, Toyota Industries

Corporation (TMC), Toyota Industries’ Vehicle Division andestablished Lio Fung Tool & Die (Kunshan) Co., Ltd. (LFTD, in

TOYOTA Material Handling Company (TMHC). The sub-division

which Toyota Industries has a 35% stake) as a joint venture

manufactures and provides quick delivery of top-quality

with Taiwan-based Lioho Machine Works, Ltd. LFTD began

stamping dies by blending the skills of its experienced

operation in April 2004 and currently produces stamping diesengineers with leading-edge simulation technology.

for TOYOTA vehicles manufactured in China as well as forMoreover, the sub-division is winning high acclaim for its

Toyota Industries’ lift trucks.

outstanding capabilities and has received such accolades

By manufacturing these stamping dies, Toyota Industries

as TMC’s “Super” Award for Quality Performance on numerous

is contributing to TMC’s automobile business as well as theiroccasions.

global strategy.

Expanding manufacturing stamping dies at overseas

Hood panel trim die

Focus onBusiness

8

Rear door outer draw die

Manufacturing Equipment

In-House Production of Vital Manufacturing Equipment andProduction Technologies to Support Product CompetitivenessToyota Industries actively produces its own essential

skilled in various production technologies for creating new

manufacturing equipment such as machining and assembly

manufacturing equipment and deploying these personnel

equipment. Our Mechatronics Systems Department

where needed throughout the Group.

manufactures and supplies customized manufacturing
equipment for the Compressor Division, Engine Division, TMHC,
our affiliates and other divisions. The internal productionof manufacturing equipment permits unified productdevelopment and design, quick development and production
times, and facilitates the rapid launch of production lines.
Toyota Industries’ excellent production facilities contribute to
the Toyota Industries Group’s monozukuri (creating things),
serve as a source of competitiveness in each businessand protect against any outflow of proprietary production
know-how. The Mechatronics Systems Department is also
entrusted with the crucial role of cultivating human resources

42

Toyota Industries Corporation

Annual Report 2006

NC machine tool
for aluminum parts

Circuit board inspection
system with high-resolution
line scan camera