Medium-to long-term
Business Plan
May 19,2021
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JTEKT CORPORATION

目次

1. JTEKT “Reborn”
2. Long-term plan -Vision 20303. Mid-term plan -FY2021~FY2023-

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JTEKT CORPORATIONJTEKT “Reborn”

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JTEKT CORPORATION1. JTEKT “Reborn”
FY2021 is the first year of
JTEKT Becoming Reborn!
Get out of the low profit constitution andGet back to the strong JTEKT

1. True merger
2. Improve corporation among Toyota Group and
JTEKT Group4
JTEKT CORPORATION

1-1) True merger True Merger of Koyo Seiko and Toyoda Machine Works
makes JTEKT strong as “One JTEKT”
Current
1.

Each inherited business stands alone and seldom exchange

2.

Unable to unify business structure

3.

Leave overseas affiliated companies reorganized/restructured

Future1.

Contribute Bearing business and Machine tools business each other2.

Unify business structure of JTEKT group utilizing Digital Transformation (DX)3.

Reorganize affiliated companies globally throughout all business units
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JTEKT CORPORATION

1-2) Corporation among Group companies• JTEKT group has many unique “Strengths”• Our promising future will come if we combine and utilize these “Strengths”

Strengths of JTEKT group① Being a member of Toyota Group② Consisting several business units③ Having potential elemental
technologies④ Enriched by variety of products andtechnologies of affiliated companies⑤ Supported by extensive customers⑥ established global network

Combine and Utilize
Contribute to / Cooperate with Toyota Group（①×②×③）
As only company dealing Bearing and Machine tools , J-QuAD etc
Multiple marketing（②×④×⑤）⇒P9Integrate JTEKT group sales window⇒P8

Develop brand new products（ALL)Global customer needs⇒P10
× JTEKT group seeds
JTEKT CORPORATION

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1-2-1) Compete together with Toyota group As a part of Toyota Group, we make a contribution tostrengthen competitiveness in the chassis area As only company dealing Bearing and Machine tools, we
make a contribution to the Toyota group’s growth andglobal manufacturing

Toyota Group
VehicleBrake

Interior

Sheet

Air Conditioning

Steering

Brake

Interior

Sheet

Air
conditioningNavigation/Com
munication

Steering

TCD/LSD

Redu
cer

Motor

Transfer

Diffe
rential

PCU

Trans
axel

Machinetools

Propeller
shaft

Drive shaft

Transmissio
n

Motor

Elemental
processing

PCU

EngineBatteryAutonomous
Drive

Parts

4WD

Bearings

Competitor in Europe
Navigation
CommunicationReducer

TCD/LSD

Motor

Tra
nsfe
r

Trans
axel

Diff
eren
tial
Prop
eller
PCU
shaf
t

Motor

Drive shaft

Battery

Transmission
PCU

Autonomo
us drive

Parts

EngineJTEKT CORPORATION

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1-2-2) Multiple marketing Regardless of industry or group, shift from individual company sales tointegrated group sales.
 Respond to customer expectations by leveraging the Group's
technologies, products, and sales network.

JTEKT Sales

JTEKT
STG・DL

Bearings

Machine
Tools

Group

B

Product
B

STG・Driveline
Bearing・Machine tools
Koyo
Thermo System
Thermally processing/industrial furnaces
TOYODAVAN
MOPPES
豊田バンモップス
豊田バンモップス
Glinding/whetstones

CustomerGroup
Company A
Product
A

JTEKT

Group
C
ProductC

研削加工・砥石
研削加工・砥石

Koyo
Sealing Techno

Oil Seals
UKK

Mold Processing
Technology
Koyo
Metal Tec
光洋メタルテック
光洋メタルテック
StretchMolding
Technology
圧延成型技術

圧延成型技術etc

Customer
JTEKT CORPORATION

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1-2-3) Develop brand new products
Arranging own technologies,
JTEKT provides customers with products which fit their needs
Customer needs;

Small, Light weight, Highly efficientSocial requirements;

Safety, Environmental, Convenient, Comfortable

JTEKT’s strength are rich elemental technologies raised at multiple biz. Units.
hydraulicpressure

JTEKT is fully capable of produce products which make customers happy
Develop brand new products,which meet customer needs andsocial requirements,
by the combination of elemental
technologies and parts.

Steering

Driveline

CapacitorαBearings

Machinetools

βΓ
JTEKT CORPORATION

9Long-term plan -Vision 2030-

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JTEKT CORPORATION

Long-term plan -Vision 2030 Utilizing the seeds of the JTEKT Groupand collaborating with the Toyota Group to win in new areas
 To achieve further business growth, strengthen the competitiveness of existing
business
2030
Sales
GrowthImage

2030

Solvingsocialproblems

2020
New
Project

Strengthen
existing
business

Declinein Demand

Water resistant bearings,products for FC

Hydrogen society

Renewable energy generation Bearings for generators, Preventive maintenanceLi capacitor
Autonomous

Provide back-up power supply system,maintenance-free
Automatic driving bus,
agricultural and construction machinery

Steer by wire
EPS
Driveline product（CVJ,etc）

Install in all vehicles,from automated to low-priceStrengthen
the competitivenessStrengthen
the competitivenessFor internal combustion engines

Reap the benefitsof being a survivor

Hydraulic products

Expand into
alternative areas
JTEKT CORPORATION

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Mid-term plan -FY2021~FY2023-

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JTEKT CORPORATIONThe position of FY2021 mid-term business plan

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JTEKT CORPORATION

3-1) The position of FY’21 mid-term business plan
FY’21-’23

FY’24-’26
2nd stage

FY’27-’30
3rd stage

4 key words

1st stage

The 1st year of JTEKT becoming Reborn① Strengthen competitiveness② Seeding for the future③ Strengthen management foundation④ HR development

Growth of existence business and raising new business

Harvesting and leaping

Achieving Vision 2030

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JTEKT CORPORATION

Four key approaches

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JTEKT CORPORATION

3-2-1) Strengthen competitiveness Restoring lost competitiveness should be a top priority.
 Strengthen competitiveness in all areas of price, performance, quality, and ability to respond.
The source of “competitiveness”
Thorough

Differentiation

cost reduction

for customers“No.1”“Only One”

What is No.1?

• Thoroughly benchmark thecompetition and provide customers
with price, quality, performance,and service that surpasses thecompetition.

What is Only One？

• To anticipate customer needs
and propose value that exceeds
customer expectations.
• To be the customer's best advisor(true front-loading)
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JTEKT CORPORATION

3-2-2) Seeding for the future
 Invest the cash gained by pursuing “good products, low prices” in growth areas

Seeding for the future
Important goals in 1st stage (FY’21-’23)
Pursue further

Turn “seeds”

Development“good products, low prices”

into growth businessof new areas

Key measures・standardize design methods
・procure and produce
in optimal locations

Automobile

Bearings

synergy
Machine

JTEKT・innovate production technology

tools

Earning cashby existence business

To be a pillar
of future businessGroup・Hydrogen society
・Renewable energy
・Aging society
Solving social issues(contributing to SDGs)
JTEKT CORPORATION

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3-2-3) Strengthen management foundation
 Still in a “flabby” state → toward a lean corporate structure Mid-term target：break-even point ratio 80％※’FY19 solder ratio
business profit
100 billion yen
2nd stage

3rd stage

Strengthen
Management foundation

Growth of existence businessandRaising new business

Harvesting and leaping

FY2021～

FY2024～FY2027～

1st stage

break-evenpoint ratio

FY2030

FY2021

FY2022

FY2023

85%

83%

80%

(FY’19 solder ratio)

Aim for 100 billion yen in business profit in FY2023.
(Exceed our record profit 81.9billion yen (FY2015))

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JTEKT CORPORATION

3-2-4) HR development
 Thoroughly implement “JTEKT’s version of the basic principles of TQM”
, like Chinese medicine treatment.
 To be a company that continues to make “kaizen”
for the sake of the earth, the world, and our customers
JTEKT’s versionof the basic principles of TQM
for the earth
for the world

TQM activities
Creating a structureｚ
and organizationｚｚｚｚｚｚｚDeveloping
humanｚｚ
resourcesFor
our customers

Passioncontinual“kaizen”

allparticipants

To achieve
annual cycle management
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JTEKT CORPORATION

Business strategy

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JTEKT CORPORATION

3-3-1) Organizational revision
 To enable more accurate and speedy response to customer needs,
we will make organizational revision from product-specific to market-specific.
(embodying the market-in concept)
 Aftermarket Business Unit will be newly established in order to make theaftermarket, where demand is expected to grow in the future, as a pillar of
the business.
Automotive Business Unit

Steering Systems
Business Unit
Driveline Systems
Business Unit

HUB

Bearings Business Unit

Industrial & Bearings Business Unit

Machine Tools & Mechatronics
Business Unit

Machine Tools & System
Business Unit
Aftermarket

Sales & Marketing Division

Aftermarket Business Unit
Sales & Marketing Division
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JTEKT CORPORATION

3-3-2) Automotive Business Unit Strategies
 Development of competitive next-generation EPS and transformationfrom a contracting-oriented to a proposal-oriented business Establish a position as a chassis system supplierStrengthen
competitiveness of EPS

Transform to a proposal-oriented
business for quick delivery

Global competition intensifies for all products

Ability to anticipate needs is weakLack of resources
for upfront
development

Strengthen competitiveness by implementing
fundamental reforms across the Group

Increase allocationof resources to current PJs

Establish a position as a system supplier
Steering
Differential gear

Drive shaft
Propeller shaft
HUB/CVJ

Optimal proposal for total system

After receiving
an order,start considering

ViciouscircleQuickly respond to the needs of EV
manufacturers
Anticipate needs.

Put resources into
upfront development

Virtuous
circleFormulate
product strategies
for each customer
in advanceStandardize basic design
and improve efficiency ofmass production development

JTEKT CORPORATION

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3-3-3) Industrial & Bearings Business Unit Strategies
 Maintain the improved constitution in FY2020 and do not let it rebound.
 Strengthen competitiveness andcontribute to other businesses and the Toyota Group
Maintain the constitution
and strengthen competitiveness

FY2020

Improvement of management structure• Reduce labor costs by improving productivity• Review repair costs• Review investment details and reduce investment
amount.

Transitory measures• Shorter operations, less overtime

FutureContribute to JTEKT Group
Customer
Automotive biz.

Machine tools biz.

Industrial & Bearings biz.
 Provide competitive bearings to other business units

Contribute to TOYOTA Group

Maintenance of management structure• Coordinate personnel among plants/Reduce labor costs by pursuing the right number of
employees• Eliminate deficit model numbers

Improvement of competitiveness• Reduce fixed cost through innovation in
production technology• Improve variable cost by utilizing LCC

 As the only bearing manufacturer in the group, contributing to the TOYOTA Group’s growth.
JTEKT CORPORATION

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3-3-4) Machine Tools & System Business Unit Strategies
 Strengthen competitiveness andexpand sales of No.1 cylindrical grinding machines
 Expanding the target market and pursuing good products at low prices
Expanding the target market

Pursuing good products at low prices

Focus on large customers in a limited market/High-priced products based on dedicated model

Integrate platforms and reorganize models

Expand sales in growth industries/Strengthen product competitivenessTarget market 1
Ultra-high precision
grinding machines

Ultra-highprecision
Dedicated
types
Existingareasex）battery roll etc

High
precision
General-purpose
types

Expand a market

Strengthen cost competitivenessby standardize units
and produce them at optimal location

Develop and sellcompetitive cylindrical grinding machines
by FY2022.

Target market 2
General-purposecylindrical grinding machinesex) motors for EV
shafts etc

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JTEKT CORPORATION

Restructuring

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JTEKT CORPORATION

3-4) Restructuring -Progress in FY2020


Remove the lesion by “Surgical treatment” and improve the condition by “Medical treatment”.
To regain “a healthy body”,
further sublimate and consolidate these activities during the mid-term plan.

Surgical treatment＜activities for FY2020＞＜activities during this mid-term＞

Formed a “Profit Improvement Committee”
Breaking down the barriers between business units, identify
and resolve issues without sanctuary

Reorganized as "Cost Reduction Committee
PDCA (Plan-Do-Check-Act) cycle for all measures toachieve 80% break-even point

With an awareness of capital costs, visualized areas that need
to be restructured and implemented partially

Especially in Europe, accelerate restructuring.
Optimize the number of subsidiaries andaffiliates

Visualization of deficit model numbers
Planning and implementation for resolution

Monitor at board meetings
Improve profitability of all products

Medical treatment
Formed an organization for strategic planning under the directcontrol of the president
Established company-wide strategy discussion body
Formulated company-wide mid-term plan
Return to the Toyota Group (Headquarters relocation)
Speeding up decision-making through changes in executive
structure
Hold regular meetings with affiliated companies
Expand the activities of the Profit Improvement
Committee to the Group

Strongly promote the Medium-Term
Management Plan
Check progress, clarify issues, and respond quickly
Revision business unit organizationally
Promote “True merger” plan
Further strengthen governance and promote“structural reforms” across the Group in a topdown manner
JTEKT CORPORATION

263-4) Restructuring - the number of subsidiaries and affiliatesTotal: 138 companies (including sub-subsidiaries)*

Europe/Africa
26companies
automotive：11
bearings：5
control/sales：10

China
28companies
automotive：11
bearings：7
machine tools：5
Others ：5

Australia
30companies
automotive：12
bearings：5
machine tools：12
control：1

North America
19companies
automotive：11
bearings：5
machine tools：2
control：1

Japan
32companies
automotive：4
bearings ：11
machine tools ：9others ：8
South America
3companies
automotive and bearings：2
sales companies ：1※ Unique company count that differs from disclosure documents
JTEKT CORPORATION

273-4) Restructuring in Overseas
 Turn the bearing business profitable in 2021
and the automotive business profitable in 2024.
 Proceed without sanctuary in terms of business units, subsidiaries, regions, etc.

Select and concentrate・selection
・concentration
・Make decisions,
including the sale ofbusinesses andwithdrawal frombusinesses.
・Invest funds in growthareas and turn them into
new businesses.

Utilize LCC
・Eastern Europe
・Africa・India・China・Examine from all thepossibilities JTEKT has
to offer(parts andfinished products)

Consolidate bases
・Targeted are
26JTEKT Group
companies.
automotive：11
bearings：5
control/sales：10
・Focus on overlap andproximity※already integrated
Moroccan business
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JTEKT CORPORATIONDX/Carbon Neutral

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JTEKT CORPORATION

3-5-1) Digital Transformation
 Reduce the “work” of staff and enable them to produce “high-value-added
output that requires intelligence” in a timely manner. (unify the structure)

Achieve by 2030 through DX（１）Transform business model
From Hardware company to Software hybrid company
Responding to Software First（２）Improve business efficiency/Good product, low price
Maximize productivity

Strengthen sales force• Eliminate typing and corrections• Share information on visits• Portalize product lineups• Automate pipeline management• Utilize data warehouse/BI tools

Replace human eyes for AI• Forecast demand and supply of spare parts• Unattended inventory• Automatic creation of quotations• Managing the signs of equipment maintenance

Cybersecurity in the C of CASE
• Multi-protection• Vulnerability Management

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JTEKT CORPORATION

3-5-2) Carbon Neutral Japanese Government declares “Carbon Neutral by 2050”
 JTEKT will be driven by the following milestones

FY2040：Achieve zero CO2 emissions for the entire JTEKT Group.
FY2050：Achieve zero CO2 emissions for all products, including those from suppliers

Current※
Non-Consolidated:▲42％
Consolidated:▲32％
CO2
emissions※Exceed the FY2025 target
reduction rate, due toa decrease in production
caused by COVID-19

Model plant/Model product

Non-Consolidated:▲35％
Consolidated:▲30％

Non-Consolidated,China, North America,
Major group companies in Japan

Non-Consolidated:▲60％
Consolidated:▲50％

The entire JTEKT GroupFY2013 FY2020<Base year>

FY2025

FY2030

FY2035FY2040All products,
including thosefrom suppliers

FY2050(Major Power Companies) 31
JTEKT CORPORATION

3-5-2) Carbon Neutral –Utilization of H2 –
 To achieve Carbon Neutral,hydrogen is stored, used, converted to electricity, and utilized.
Store：Install hydrogen tanks and hydrogen stations.
Use：Convert on-site-forklifts to FCs and switch to FCVs for company vehicles.
Convert to Electricity：Use FC stacks to supply power to non-production buildings.
Utilize：For methanation to absorb CO2 from exhaust gas.

▼Hanazono plant (2025)▼Kariya Head Office（2026）

Amount ofHydrogen usage

Hydrogen tanks
Hydrogen stations

Methanation
FC stacks
Hydrogen generator※absorb and reuse CO2Hydrogen Burner
2025年

2030年

2040年

2050年

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JTEKT CORPORATION

Appendix

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JTEKT CORPORATION

4） JTEKT’s materiality (important issues)

Social challenges to besolved through business1. Contribute to safe, secure and comfort life
- Turning solution for all motilities- Safe automation/labor-saving for various works and services- Life and care support for aging society

Related SDGs

2. Protect the rich earth for future children- Prevention of global warming- Contribution to recycling society- Reduction of environmental impact
3. Provide new values to manufacturing (monozukuri)- Providing key components supporting industry- Improvement in productivity by utilizing digital technology- Extending life span of machine by preventive maintenanceImportantissues inbusiness
structure

4. Development of organization and HR to be trusted bysociety and to contribute to society- Human resources development- Safety and health of workers - Diversity- Governance- Compliance34
JTEKT CORPORATION