Top Interview

Akira Onishi, President

Responding Flexibly toan Evolving Business Environment
and Accelerating Initiatives for
Sustainable GrowthPresident Akira Onishi explains our initiatives for realizing the vision, as wellas management policies, under the principle of “contributing to a comfortablesociety and enriched lifestyles.”9Top Interview

First of all, could you provide
an overview of Toyota Industries’Q
initiatives and business resultsin fiscal 2014?
Looking back at fiscal 2014, despite some disparities
by geographic region, both the Japanese and world
economies were generally favorable. Under these
conditions, Toyota Industries implemented important
growth initiatives in each business.
In the core Materials Handling Equipment
Business, amid a generally buoyant market, weundertook proactive sales expansion activities utilizing
our wide-ranging product lineup and the sales
networks we have strengthened up until now. These
measures led to an increase in unit sales and bolsteredbusiness results globally. Of particular note, U.S.-based
Cascade Corporation, one of the world’s leading
manufacturers of lift truck attachments that became aconsolidated subsidiary at the end of March 2013,
steadily carried out business activities and made asignificant contribution to our consolidated businessresults. Toyota Industries and Cascade are currently
undertaking activities to foster mutual understanding
and learn from each other’s strengths.
Among automobile-related businesses, theCar Air-Conditioning Compressor Businessachieved higher unit sales on a global basis. The
Vehicle Business recorded a steep increase in unit
sales thanks to brisk sales of the RAV4, which
underwent a full model change at the end of 2012.
Conversely, the Engine Business posted lower sales,
as sales of KD diesel engines were undermined bysluggish automobile sales in Asia. The Car Electronics
Business recorded favorable sales to automakers inand outside Japan, primarily to Toyota Motor
Corporation (TMC).
The Logistics Business attained growth in sales
supported by an increase in logistics services and landtransportation services for automotive-related parts.
The Textile Machinery Business generated amarked increase in sales owing to a positive
performance in the important China market as well as
to the introduction of a new air-jet loom that offers
superb environmental performance.
As a result of these developments, in fiscal 2014 Toyota
Industries posted net sales of ¥2,007.8 billion andoperating income of ¥107.6 billion, both representing
record highs. Taking into consideration an array offactors such as our business results, future demand forfunds and the payout ratio, Toyota Industries raised
cash dividends per share by ¥30 from the previous
fiscal year to ¥85.

Can you describe the initiatives you
Q are implementing to attain further
growth in the years ahead?
Toyota Industries formulated Vision 2020 as its aspired
shape for the medium and long terms. Within thisvision, we are implementing the following threemeasures as major growth strategies.
The first is to contribute to realizing a society withminimum environmental impact throughtechnological innovation in environment andenergy areas such as energy conservation.
In lift trucks, a core product in the Materials
Handling Equipment Business, we are strengthening
environmental performance by undertaking in-housedevelopment of main functional components forinternal-combustion and electric lift trucks.
Regarding internal-combustion lift trucks, weNew lift truck fittedwith an industrial engine developed in-house

introduced a lift truck fitted with a new industrial engine,which was jointly developed with the Engine Division,and a turbocharger. In October 2013, this lift truck was
first unveiled in North America. It meets stringent
emission regulations without using a diesel particulate
filter and realizes a drastic improvement in fuelefficiency compared with the previous model. Electricn Vision 2020

Support industries and social foundations around the world by continuously
supplying products/services that anticipate customers’ needs in order tocontribute to a comfortable society and enriched lifestyles

To contribute to a comfortable society and enriched lifestyles

Solution

Key Components

MobilityNewProductNewProductNewProductNewProductNewProduct3Es (Energy, Environmental protection and Ecological thinking)<Technological innovation in environment/energy areas>

Value Chain<Expansion of value chain>

World Market<Business development in world markets>

Contribute to realizing a society
with minimum environmental
impact through technologicalinnovation in environment/
energy areas

Create new business value by
strengthening both hardware
and software development by
cultivating technology “seeds”

Develop businesses all over theworld and meticulously
respond to each region’s
customer needs

Maintain the world’s
highest-level SEQCD* by
improving our business basedon team strength and TPS

Strengthen growth potential byleveraging synergies among
divisions, strategic M&As andalliances* Safety, the environment, quality, cost and delivery

10Toyota Industries Report 201411Top Interview

lift trucks now account for more than half of Toyota
Industries’ unit sales of lift trucks corresponding totighter environmental regulations mainly in developed
countries and growth in indoor logistics. In collaboration
with the Electronics Division, the Materials HandlingEquipment Business has been jointly developing
motors and controllers, the keys to raising environmental
performance of electric lift trucks, to differentiate our lift
trucks in terms of both power and operating hours.
In automobile-related businesses, environmental
performance is also becoming increasingly crucial.
For example, the tightening of vehicle fuel efficiency
regulations is giving rise to a greater need for variabledisplacement type car air-conditioning compressors,which have higher fuel efficiency. Toyota Industries istherefore strengthening development and production ofvariable-displacement type compressors. We are also
making significant strides in raising fuel efficiency andrealizing lighter weight for electric compressors forhybrid and other vehicles. Together with compressors
for internal-combustion vehicles, we are expanding
sales of electric compressors not only to TMC but also
to automakers around the world.
The second measure is to expand our value chain,
which includes continuously providing excellent
products. In other words, we aim to maximize thevalue our products create for customers.
Specifically, we strive to assist customers in every
domain of their businesses, such as providing services
that ensure our materials handling equipment andtextile machinery, which are industrial goods, arealways used in the best possible condition.
In the Materials Handling Equipment Business,
we are pursuing a variety of initiatives to strengthen thequality of crucial services in each country for theseindustrial goods. These measures include providing

education for service trainers primarily at the Global
Training Center and holding the Service Skills Contest
to enhance dealer service.
We are also strengthening our own in-houseresponse capabilities to address rising needs in leasing
and other forms of sales finance. As specific examples,in June 2013 we established bases to provide financing
services in Mexico and France, both of which
subsequently started operations. Through these steps,
we are building a structure that is able to respond to avariety of customer needs through an integrated
structure for sales, service and financing.
In the Textile Machinery Business, we rolled out a
new air-jet loom that further advances energy-saving
performance, one of our strengths. By digitizing ourextensive accumulated know-how, we equipped thelatest loom with a system that automatically sets theoptimal weaving conditions. This feature offers the kindof added value that only a master craftsperson canelicit by maximizing the performance of a weavingmachine. As for spinning machinery, we will expand theproduction capacity of our base in India and carry out
production close to our customers to provide more
timely services suited to local needs.
The third measure is to conduct business andprovide customers with products and services
wherever there are markets across the world,
including in emerging countries that play agrowing role in driving economic growth.
In the Materials Handling Equipment Business,
our focus in developed countries has been on building
production structures close to markets. Alternatively, inemerging countries we have gradually shifted to bases
optimally situated for supplying sales distributors toreduce lead times and lower transportation costs.
Several important steps for responding to growing

markets primarily in emerging countries included therelocation and expansion of a production base in Chinain June 2013. Also, we established a new plant in Brazilin October 2013, where the market is expected to grow,and commenced production of internal-combustion lift
trucks, for which there is a high market demand.
In the Car Air-Conditioning Compressor Business,
we are securing increased orders from automakers on
the back of an expansion of automobile sales and thestrengthening of fuel efficiency regulations globally. To
meet this rising demand, we are augmenting ourproduction capacity in North America, Europe andAsia. Especially in North America, there has beenmarked growth in demand for variable-displacement
type compressors that offer high fuel-saving
performance. In response, we started up a local plantin September 2013 for producing key functional
components to raise local procurement rates.

Production base for key functional components
for variable-displacement type compressors (North America)

What benefits does Toyota Industries
Q derive from operating such a diversityof businesses?
Toyota Industries engages in a variety of businesses
encompassing materials handling equipment,
automobile-related businesses and textile machinery.
Within these businesses, we have world-leading market
shares* in three product categories: lift trucks, a coreproduct in the Materials Handling Equipment Business;
car air-conditioning compressors in automobile-relatedbusinesses; and air-jet looms in our founding Textile
Machinery Business. From this perspective, Toyota
Industries is a truly unique company within theToyota Group.
The advantages of this type of business structure
may not be apparent for some of our stakeholders.
To be more specific, in areas such as development andproduction, horizontally aligned collaboration among
business divisions enables the strengths of eachbusiness to be shared, which in turn further reinforcesthese businesses. Going forward, we will step up
efforts to maximize this benefit.
In the area of development, the Materials Handling
Equipment Business and automobile-related
businesses are leveraging their respective accumulated
technologies and know-how and increasing the* Survey by Toyota Industries Corporationn Toyota Industries’ Business Composition

Textile Machinery/Others

Logistics

5%5%

Net sales for FY2014

Materials Handling
Equipment

40% ¥2,007.8 50%
billionAutomobile
VehicleEngineCar Air-Conditioning Compressor
Electronic Parts, Foundry and Others

Lift truck plant (Brazil)

12

Toyota Industries Report 201413

Top Interview

number of joint development projects in environmental
technologies such as energy conservation andelectrification. As prime examples of this teamwork, theMaterials Handling Equipment Division has beenworking jointly with the Engine and Electronics divisions
to develop key functional components for lift trucks.
Similarly, the Compressor and Electronics divisions
have been jointly developing electric compressors.
Through such collaboration, we aim to create highvalue-added and distinctive products.
In the area of production as well, we encourage
collaboration among business divisions to raise quality
and productivity and promote cost improvement
activities. Specific measures include undertaking
activities to further strengthen production engineering
capabilities such as in casting, machining andassembly, which are common functions in eachbusiness. We also promote cross-divisional applicationof excellent examples of improvements. Althoughconcerns have been voiced about the future of Japan’s
manufacturing, Toyota Industries is harnessing thestrengths of each business division in development
and production and further refining its manufacturing
so that we can continue providing products andservices that meet the needs of customers in every
region of the world.

Engine development

Looking to the future, we will further promote thesemeasures, utilize the advantages of operating adiversity of businesses and further strengthen ourgrowth potentials.

Q

Could you explain what you mostvalue in management?

Making Group-wide efforts toward the realizationof Vision 2020
Designating Vision 2020 as its aspired shape toward
the year 2020, Toyota Industries is making Group-wide
efforts to realize this vision. Specifically, we aim to“support industries and social foundations around theworld by continuously supplying products and services
that anticipate customers’ needs in order to contributeto a comfortable society and enriched lifestyles.” To thisend, we particularly value a customer perspective
and innovation.
Since our company was founded, we have been
contributing to society by manufacturing and providing
high-quality products that satisfy customers. Thisapproach has in turn led to Toyota Industries’ growth.
We are engaging in business with a customer
perspective by going back to the basics, by keeping inmind who our end users are and what their innate
needs are and by having an awareness that all ouroperations are ultimately connected to customers.
Providing customers with excellent products andservices is contingent upon spurring innovation intandem with the implementation of existing initiatives.
One of the Toyoda Precepts states, “Always bestudious and creative, striving to stay ahead of thetimes.” These words literally refer to innovation. Goingforward, we aim to raise competitiveness by sparking
innovation not only in technology development but alsoin production, sales, services and all other functions.
As we work to attain our vision, the businessenvironment surrounding Toyota Industries is evolving
at an unprecedented speed. Under such conditions,
we will further promote the delegation of authority in
our efforts to execute swift and agile management
while strengthening necessary monitoring and checking
functions. While the Head Office will continue todeliberate on major issues that affect the entire Toyota
Industries Group, we will promote delegation ofauthority to speed up the implementation of individual
projects in each business.
The environment today is becoming increasingly
uncertain in step with the ongoing advance ofglobalization. Benefitting from a tailwind at the moment

doesn’t mean we will never encounter headwinds
again. As a matter of course, we must be highly
attuned to any risks and keenly sensitive to changes.
It will also be crucial that we respond flexibly whenchanges occur or even when there are signs of change.
However, this doesn’t mean we should shift gear every
time an occasion demands. We must avoid inflexible
approaches and respond swiftly, utilizing methods andchannels optimally suited to addressing changes in theenvironment while firmly keeping an eye on our major
objective of realizing our vision.
We will promote management based on theconviction that working toward realizing our vision
under the principle of contributing to society will
inevitably lead to the growth of Toyota Industries.
Place high value on our corporate culture thatencourages employees to take active roles andtackle new challenges
For a company’s sustainable growth, it is essential thateach and every employee takes an active role.
Currently, approximately 50,000 employees are working
at Toyota Industries worldwide. It is a group blessedwith an immense diversity in nationalities, job duties,experiences and ways of thinking. In such anenvironment, each employee can purposefully carry out
his or her work by sharing the same goals and having
an awareness that completing each task will ultimately
lead to the attainment of those goals. As such, Toyota
Industries is striving to instill the importance of sharing
Vision 2020 as an overall management direction and offulfilling their roles at their respective workplace.
We are also strengthening our efforts in such areas
as safety and quality to solidify the corporate
foundation that will support our sustainable growth.
In these areas as well, we are nurturing a corporate
culture that encourages respective employees to takeproactive actions. In July 2013, we formulated theSafety Vision and have been striving to establish asafety-oriented culture in which employees warn eachother when someone is engaging in an unsafe activity,
rather than relying solely on rules and systems.
In addition to sharing the same goals and playing
respective roles, taking on new challenges is absolutely
essential. After observing his own mother struggling
with her hand loom, Toyota Industries founder Sakichi
Toyoda embarked on research into looms with adetermination to “invent a loom that will somehow
make my mother’s work easier.” While encounteringharsh circumstances of having insufficient capital andlacking the support of the people around him, Sakichi
overcame a host of difficulties and finally succeeded indeveloping an automatic loom. In this regard, it isimportant to proactively and resolutely take onchallenges with high objectives.
Needless to say, nurturing human resources whowill lead Toyota Industries in the next generation is vital.
We have been enhancing the venues where employees
can learn, including the establishment of the Technical
Learning Center and the Toyota Industries Global
Learning Center. In addition, we are providing an
expanding array of opportunities for young employees
to interact with staff working at subsidiaries outside
Japan so that they can practice what they havelearned. Successful development of human resources,
however, involves more than just the persons educating
providing opportunities unilaterally. It is also importantthat each of the individuals being educated proactivelyparticipate in corporate activities with a strong sense ofmotivation. As opposed to a workplace environment
where supervisors must teach everything, we are
striving to create a corporate climate in which
supervisors will let their subordinates try without fearing
the consequences as well as look out for them.
Going forward, we remain committed toaccelerating initiatives for realizing our vision to meetthe expectations of our stakeholders through oursustainable growth.

Air-jet loom production site14

Toyota Industries Report 201415