F O C U S

1Medium-Term Management Vision
for Further Business Expansion
In May 2001, we unveiled our medium-term strategy forcontinuous growth, targeting consolidated sales of ¥1.2 trillion
and consolidated ordinary income of ¥80 billion for fiscal 2006
(ending March 31, 2006). Through consistent implementation

dynamic business management in reflecting customer needsof the strategy, we believe we can expand our corporate value.

and responding to market changes on a global scale.
Benefits of synergy resulting from our acquisition ofStrengthening Competitive Advantages
and Securing Global Leadership in theMaterials Handling Equipment andCar Air-Conditioning Compressor Fields

BT Industries are already apparent, and expected to become

Toyota Industries is determined to retain its leading position inEurope and the U.S. These exchanges will be broadened toJapan and remain the global leader among manufacturers ofinclude other products. We intend to introduce ourmaterials handling equipment. Steps already taken to achieve

manufacturing technique, the Toyota Production Systemthat goal include the acquisition of BT Industries AB(“TPS”), to BT Industries. In return, we are drawing on BT(“BT Industries”) and the transfer of Toyota Motor Corporation’s

Industries’ wealth of sales know-how, in particular its solution-(“TMC’s”) Industrial Equipment Sales Division to the Company.

proposal sales technique. We have begun to introduce BT

These measures will enable swifter decision-making and more

Industries’ fleet management program to reinforce our sales

even more so. We have started to supply counterbalanced
forklift trucks to BT Industries on an OEM basis. We are also
distributing BT Industries’ warehouse trucks in Japan as well as

Medium-Term Sales and Income Targets (Consolidated Base)
Ordinary Income(¥ Billion)
100
80
51.4

47.9

5760

44.5

20Net Sales(¥ Billion)
1,200

1,200
1,069.2

1,100

980.2

1,000

767.4

800

600

Materials Handling Equipment

400

Car Air-Conditioning Compressor
Electronics and Logistics Solutions

200Vehicle & Engine
0
FY

12Textile Machinery and Others

9900

TOYOTA INDUSTRIES CORPORATION

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ANNUAL REPORT 2003

0304
Forecast

06
Targetactivities in Japan. We will also promote personnel andincreased demand for applications in digital cameras, mobiletechnology exchanges, as well as joint component purchasephones and personal digital assistants (PDAs). To expandand product development.

business in line with the medium-term business plan, ST-LCD

The Materials Handling Equipment Segment is striving todoubled its production capacity through a capital investment

adopt a global perspective in developing products that meet

program in the fall of 2001, and started operations at the newcustomer/market needs and carrying out strategic marketing

facilities in fiscal 2002.

through enhanced sales and service activities in order tomaximize customer satisfaction and business performance.

Although TIBC experienced difficulties due to the worldwide
IT slump, we expect the company to see an improvement in

To consolidate our leading international position in the carbusiness performance through cost-reduction activities andair-conditioning compressor manufacturing field, we attempt

the manufacture of high-performance package substrates.

to continue to develop new products tailored to ensure

As we believe the growth potential of the Electronics

customer satisfaction. Car air-conditioning compressor

Business in the medium to long term is promising, we see it asproduction bases in Japan, the U.S. and Europe allow us to stay

one of our core businesses. We intend to allocate management

close to customers, meet their needs more precisely and reduceresources accordingly in anticipation of a successful future for

distribution costs and exchange rate risks. The proportion of

our LCD and other electronics-related businesses.

cars in Europe fitted with air-conditioning systems is expected

In fiscal 2003, Toyota Industries entered into the logistics

to continue rising and we aim to make the most of thissolutions business in Japan. We aim to respond to customer

opportunity. We shall also seek to increase sales in the Northneeds for total logistics cost-reduction and improved logistics

American market.

operations by utilizing our longstanding experiences inIn summary, the Materials Handling Equipment Segment

production and sales of materials handling equipment such as

and the Car Air-Conditioning Compressor Business are core

forklift trucks and automated storage and retrieval systems, as

operations, and serve as the strategic driving force in thewell as our production know-how as demonsrated in theachievement of our medium-term corporate objectives. As we

Toyota Production System. Toyota Industries expects its

cannot expect a great increase in demand in the maturing

Logistics Solutions Business to grow into one of the pillars of its

Japanese market, it is vital that we expand our global presencebusiness.

to ensure further business expansion, and we shall commit
resources to these fields on an appropriate scale.

As part of our move into the Logistics Solutions Business, inMarch 2002 Toyota Industries established Advanced Logistics
Solutions Co., Ltd. (called “ALSO”), a 100% subsidiary that plans

Fostering New Core Businesses, includingElectronics and Logistics Solutionsoverall logistics operations (including distribution) andWe regard our electronics operations, which are now

needs for streamlined logistics operations, ALSO aims tocomparatively small, as a business area with good growthprovide customer-oriented proposals for optimized logistics

potential over the long term. We believe the opportunities insolutions and cost-reduction, so playing an important role inthis field are substantial. The core of our Electronics Business isour Logistics Solutions Business.

operates distribution centers. Responding to increasing market

made up of the following: ST Liquid Crystal Display Corp.

We began more collaborations in this field through(“ST-LCD”), a joint venture with Sony Corporation; TIBC

investment (indirect investment through ALSO with 60%

Corporation (“TIBC”), a joint venture with Ibiden Co., Ltd.; andequity) in Teion Shokuhin Ryutsu Inc., which undertakes

the Corporate Technical Center (an in-house organization).

storage and distribution of chilled foods, as well as capital

ST-LCD manufactures low-temperature poly-Si TFT-LCDs,
while TIBC produces ball grid array (BGA) plastic package

participation (5% equity) in Yukijirushi Access, Inc., one of thelargest wholesalers of chilled and frozen foods in Japan.

substrates and flexible printed circuit (FPC) substrates. As aIn addition, in February 2003, we concluded an agreement

result of using TPS, ST-LCD’s quality levels and production

on business collaboration with Trancom Co., Ltd. (“Trancom”),

volume have improved substantially. The functionality ofa logistics consulting and management business. Trancom’s

ST-LCD’s products, including high numerical aperture, highadvanced information systems and proven distribution center

resolution and energy efficiency, is expected to generatemanagement capability complement Toyota Industries’

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

13F O C U S

1comprehensive capacity for proposing logistics solutions andcompetitiveness, establish a flexible production system andexpertise in optimizing on-site logistics operations. In April

strengthen the business foundation.

2003, Toyota Industries and Trancom jointly established
ALTRAN Corporation (60% equity), which is responsible forExtensive Cost-Reduction Campaign

acquiring new customers as well as the planning andTo survive ruthless price competition worldwide, it is essential

management of logistics operations. As part of theto regularly market attractive products, implement sustained

collaboration, Toyota Industries purchased 1.05 million ofcost-reduction programs and reform our revenue structure. In

Trancom’s shares (10% equity) in February 2003.

April 2001, we began an ambitious three-year cost-reduction

In time, we hope the Logistics Solutions Business will growprogram to substantially reduce operating and other costs. A

into one of our core businesses in the medium to long term,

project team in each business division promotes VE (Valueand we are investing management resources accordingly.

Engineering), VA (Value Analysis) and other cost-reduction

Toyota Industries will strive to aggressively explore andactivities in order to achieve an even higher level of overall

develop promising new technologies and businesses such asefficiency. Measures to be taken include reducing expenses

the Electronics and Logistics Solutions businesses, and expand

through optimized global procurement of materials andthese operations on a long-term, stable basis.

components, and cutting back fixed costs at the head office.

Further Cost-Reduction and Enhanced
Manufacturing Quality in the Vehicle andEngine Businesses

Promoting a Global Presence

The Vehicle (automobile assembly) and Engine businesses

established production bases for forklift trucks and car air-have provided stable revenues for the Automobile Segment. In

conditioning compressors in North America and Europe. For

the medium term, we aim to improve cost management andyears, we have been engaged in local production of foundryso maintain profitability in these fields.

parts in China and textile machinery and others in India. InOur Vehicle Business, one of the manufacturing bases for

It is impossible to rely solely on the Japanese market inseeking further business expansion. Toyota Industries has

June 2000, we acquired BT Industries, a Swedish warehouse

the Toyota Group’s small cars, strives constantly to enhance thetruck manufacturer, as part of our globalization scheme. Also, in

attractiveness of TOYOTA cars by further improving product

October 2002 we established a new company in Poland jointly

quality and cost efficiency, making proposals for the design

with TMC to manufacture diesel engines.

and launch of new compact cars, and improving production

Based on our belief that globalization is essential for
expansion in terms of business scale and corporate value, wetechnology.
In the Engine Business, we work constantly to enhance thewill strive to procure high-quality and price-competitive parts

environment-friendly features of our engines withoutfrom worldwide sources, and engage in the production ofcompromising their performance, and to contribute to thesuperior products close to our customers worldwide.

improvement in the overall performance of TOYOTA cars. In
Sp.zo.o. (“TMIP”) jointly with TMC to manufacture dieselHarnessing the Power of Information
Technology (IT)engines in Jelcz-Laskowice, Poland. Though our share of

We recognize the importance of IT as a key factor in corporate

investment is only 40%, we are entrusted with production andcompetitiveness, and we are attempting to accelerate its

overall operations. TMIP is slated to start production of 2000cc-application accordingly.

October 2002, we established Toyota Motor Industries Poland

class diesel engines in 2005. We will work together with TMC toIn May 2002, Toyota Industries opened “e-Lab,” andevelop high-quality, environmentally sound diesel engines

information technology research laboratory, as a keyfor passenger cars, and strengthen our design andorganization for the information system division as well as ourdevelopment capabilities for diesel engines.

R&D facility for information technology. E-Lab is responsible for

Our Vehicle and Engine businesses are our sources of stablerevenues. We will strive to continue to improve cost

14

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

researching digital simulation technologies with a view toreducing lead-times from development to manufacture toshipment. It is also involved in developing an optimalnetwork system for joint development of parts with suppliers,

Headquarters’ Structural Reformand for parts procurement. To date, improvement is mostevident in shorter product lead-times as a result ofCorporate Center

introducing three-dimensional CAD systems, and enhanced
productivity among non-manufacturing divisions thanks toenterprise resource planning (ERP) systems.

Existing Headquarters

Functions that support corporate management

Business Support Center

Our domestic network infrastructure is almost in place,and we are now working on establishing a global network
infrastructure that includes our overseas subsidiaries.

Personnel Development
Toyota Industries creates and makes a wide range of products.
We maintain our competitiveness by manufacturing highquality products through efficient production. TPS serves as
one of the essential sources of our know-how in maintaining
efficient production and competitiveness. By improving TPS
and familiarizing more employees with the system, we canfurther enhance efficiency and competitiveness. To this end, we
have established a specialized section within the Operations
Management Consulting Department in the BusinessSupport Center to foster the development of qualifiedpersonnel.

Maximizing Benefits of Synergy amongDivisions
Throughout our long history, we have continually pushedforward with technological innovation, explored new markets
and achieved substantial growth for each of our businesses.
Toyota Industries has become a conglomerate, each of whose
divisions possesses core technologies and markets. Bytranscending divisional boundaries, we are taking advantage ofthese assets to develop technologies that should be the basisof the next generation of business sectors and products, and tocreate added value. We believe the strategic cooperation
among divisions will enhance the value of the Company as awhole and offer great opportunities for expanded business

Functions that support businesses
Dividing the existing headquarters into two functionally distinct
organizations: “Corporate Center” and “Business Support Center”

In January 2002, Toyota Industries reorganized thefunctions of the headquarters as part of its
medium-term management plan.
As we build up our global business presence andadvance into new business fields, it is vital that wereinforce the functions of the headquarters, whichis responsible for plotting the course of theCompany and acting as a catalyst for corporategrowth. In January 2002, we embarked on areorganization of the headquarters with the aim ofmaking full use of the strengths generated by ourdiverse business universe and promoting a higher
level of growth and prosperity.
Based on its key functions, we divided theheadquarters into the Corporate Center, which is
responsible for the strategy and administration of
the Company as a whole, and the Business Support
Center, which provides support and services todivisions and departments. As a result of this move,
we believe the role of the headquarters became
clearer, enabling improved business efficiency andfaster decision-making. Specifically, the Corporate
Center sets company-wide management strategies,
allocates management resources, creates new
growth businesses by moving into areas where wecan apply our advantages, and develops
management personnel. The Business Support
Center provides each business division andCorporate Center department with highly
specialized expertise.

operations.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

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F O C U S

1Basic Philosophy
The following is a statement of Toyota Industries’ basic

Respect for the Natural Environment

philosophy. This basic philosophy constitutes theToyota Industries believes that economic growth andconservation of the natural environment are compatible.
It strives to offer products and services that are clean, safeand of high quality.

expressly stated beliefs of the management and serves asa guide for corporate behavior.

Respect for the Law

Respect for Customers

Toyota Industries is determined to comply with the letterand spirit of the law, in Japan and overseas, and to be fair
and transparent in all its dealings.

Toyota Industries conducts intensive product research
and forward-looking development activities to create
new value for its customers.

Respect for Others

Respect for Employees

Toyota Industries is respectful of the people, culture andtraditions of each region and country in which it operates.
It also works to promote economic growth and prosperityin those regions and countries.

Toyota Industries nurtures the inventiveness and otherabilities of its employees. It seeks to create a climate ofcooperation, so that both employees and the Company
can realize their full potential.

Five Values
We also have Five Values that form an action guide for ouremployees to enforce our basic philosophy.

Global Perspective
Learning from the best in the world, we aim tobecome the best in the world.

PROFESSIONAL
E XC E L L E N C ECustomer FirstC U S TO M E R
O R I E N TAT I O N

We forge partnerships with our customers andstrive to exceed their expectations.

Welcoming New Challenges
Unbound by convention, we embrace thechallenge of creation.

CHALLENGE
TO C H A N G E

G LO B A L I Z AT I O N

Encouraging Professional Excellence
We develop our strengths, and think and act
responsibly.

Encouraging Effective Teamwork
We recognize the human worth of each individualand collaborate to achieve goals.

16TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2003

TEAMWORK