Toyota Industries Report

Year ended March 31, 2016

Fuel cell lift truck (feasibility test model)

Message fromthe Chairman and President

Firstly, we would like to extend our sincere appreciation for yourcontinued support of Toyota Industries Corporation and the
Toyota Industries Group.
In fiscal 2016 (ended March 31, 2016), despite the solid
performance of the U.S. economy, the global economic growth
remained at a low level overall due primarily to China’s slowing
growth. Generally, the economic prospects remain uncertain. In
addition, there was a sense of stagnation in the Japanese
economy as evident in cautious consumer spending and capital
investment.
In this business environment, Toyota Industries Corporationand its Group companies (“Toyota Industries”) undertook efforts toensure customer trust through a dedication to quality first as wellas to expand sales by responding flexibly to market trends. As aresult, Toyota Industries achieved record highs in consolidated net
sales, operating profit, ordinary profit and profit attributable toowners of the parent.
With regard to the future economic outlook, despite
international cooperation, it appears uncertainties surrounding thebusiness climate, including an expected further deceleration of
the Chinese economy, financial policies in Japan and the UnitedStates as well as the effects of Brexit from the EU, will persist andrequire close monitoring.
Under these circumstances, Toyota Industries is establishing astronger business foundation and addressing key management
issues to further raise corporate value by leveraging the Group’s
comprehensive strengths.
As immediate tasks, we will endeavor to bolster ourmanagement platform to respond quickly to rapid changes in thebusiness environment. Specifically, based on our quality first
approach, we aim to build a stronger production foundation by
maintaining and improving productivity on a global basis. We will
also pursue waste-free business operations and strive to improve
profitability by reducing product development lead timethroughout the supply chain and carrying out operations
improvement activities in administrative and back-office sections.
Moreover, we will strengthen risk management in order to quickly
and appropriately respond to changes in the world situation. To

support such consolidated management on a global scale, Toyota
Industries will aim to improve solidarity in the workplace andemphasize diversity in the allocation of personnel while developing
human resources who can play active roles in countries aroundthe world.
In addition to these approaches, we will continue to strive tooffer attractive products to customers in the global market in atimely manner. In doing so, we will work to not only develop
technologies based on the keyword of the 3Es, which we define
as “energy,” “environmental protection” and “ecological thinking,”
but also differentiate our production engineering technologies andinnovate our business model by utilizing the Internet of Things(IoT). Also, we will nurture buds of new growth from theperspectives of markets and our “Customer First” philosophy, andstrive to commercialize them as soon as possible. Through these
efforts, we aim for sustainable growth of businesses in respective
markets, including automobiles and materials handling equipment
for which expansion is expected in the medium to long term,
thereby supporting industries and social foundations around theworld and contributing to an enriched lifestyle and comfortablesociety as specified in Vision 2020.
In other areas, Toyota Industries will create a workplaceenvironment that places top priority on safety; thoroughly enforce
compliance, including observance of laws and regulations; andproactively participate in social contribution activities. By carryingout these initiatives, we aim to broadly meet the trust of society
and grow harmoniously with society. With regard to protection of
the global environment, we will undertake Group-wide initiatives
toward realization of “a zero CO2 emission society in 2050” basedon our Sixth Environmental Action Plan developed in March 2016.
In closing, we would like to sincerely ask for your continued
understanding and support.
		July 2016

Tetsuro Toyoda
Chairman

Tetsuro Toyoda
Chairman

Akira Onishi
President

Akira Onishi
President

1

Contents

Corporate Philosophy of Toyota Industries Corporation

Aiming for the Realization of an Enriched
Lifestyle and Comfortable Society
The Toyota Industries Group has achieved prosperity in harmony with society by responding to
the changing times, capturing needs and offering products that contribute to society.
The spirit of founder Sakichi Toyoda has been encapsulated in the Toyoda Precepts,
which serve as Toyota Industries’ corporate creed. Our Basic Philosophy carries onthat spirit and is stipulated as basic management policies. Based on this Basic Philosophy,
we constantly strive for the sustainable growth of our businesses by contributing to
the realization of an enriched lifestyle and comfortable society.

Toyoda Precepts

Basic Philosophy

Carrying out the spirit of founder Sakichi Toyoda,• Always be faithful to your duties, thereby contributing to theCompany and to the overall good.
• Always be studious and creative, striving to stay ahead of thetimes.
• Always be practical and avoid frivolousness.
• Always strive to build a homelike atmosphere at work that iswarm and friendly.
• Always have respect for God, and remember to be grateful at
all times.

[Respect for the Law]
Toyota Industries is determined to comply with the letter and spirit of
the law, in Japan and overseas, and to be fair and transparent in allits dealings.
[Respect for Others]
Toyota Industries is respectful of the people, culture, and traditionsof each region and country in which it operates. It also works topromote economic growth and prosperity in those regions andcountries.
[Respect for the Natural Environment]
Through its corporate activities, Toyota Industries works to contributeto regional living conditions and social prosperity and also strives tooffer products and services that are clean, safe, and of high quality.
[Respect for Customers]
Toyota Industries conducts intensive product research and forwardlooking development activities to create new value for its customers.
[Respect for Employees]
Toyota Industries nurtures the inventiveness and other abilities of
its employees. It seeks to create a climate of cooperation, so that
employees and the Company can realize their full potential.

Message from the Chairman and President
Inside cover–1
Corporate Philosophy
2
Contents / Editorial Policy / Cautionary Statement
3
Growth of Toyota Industries
4–5
Outline of Businesses
6–7
Consolidated Financial and Non-Financial Highlights
8–9
Top Interview
10–15
Corporate Governance
16–21
Corporate Governance Structure
16Internal Control System
17
Compliance
17–19Management of Confidential Information
20
Risk Management
20–21
Special Features
22–29
22–25
1 Materials Handling Equipment Business of Toyota
Industries Supporting Customers’ Logistics
26–29
2 Leveraging Strengths in Engaging in Diverse
Businesses to Raise the Competitiveness of
Products Capturing a World-Leading Market ShareBusiness Activities
Materials Handling Equipment / Logistics
Materials Handling Equipment
Logistics
Automobile
VehicleEngineCar Air-Conditioning Compressor
Car Electronics
Textile Machinery

30–36
30–35
36
37–42
37–38
38–39
39–41
41–42
43

Relationship with Stakeholders
Relationship with Our Customers
Relationship with Our Business Partners
Relationship with Our Shareholders and Investors
Relationship with Our Associates
Relationship with Our Local Communities

44–45
46
47
48–51
52–53

Environmental Initiatives
Vision for Environmental Activities
Structure to Implement Environmental Management
Fifth Environmental Action Plan—
Five Years of Steady Progress
Summary of the Fifth Environmental Action Plan
Sixth Environmental Action Plan
Establishing a Low-Carbon Emission Society
Establishing a Recycling-Based Society
Reducing Environmental Risk andEstablishing a Society in Harmony with Nature
Environmental Management
Environmental Impact Flow andEnvironmental Accounting

54
55
56–57
58–59
60–61
62–63
64–65
66–67
68–69
70

Financial Section / Corporate Information
Financial Section
Consolidated Eleven-Year Summary
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Corporate Information
Board of Directors, Audit & Supervisory Board
		 Members and Managing Officers
Major Production Bases
Investor Information

72–80
72–73
74–75
76
77
78–79
80
81–83
81
82
83

In aiming to realize a deeper understanding of the Toyota Industries Group among a broad spectrum of stakeholders, theAnnual Report and Social and Environmental Report have been combined into the Toyota Industries Report from the fiscal year
ended March 31, 2008.
In addition to the Toyota Industries Group’s management policies, the report provides easy-to-understand information
regarding its business, social and environmental activities over the past year as well as its future direction.
This report focuses on activities carried out in fiscal 2016 (April 1, 2015 to March 31, 2016), but also includes some information
Period covered by the reportoutside this period.
Organizations covered in the report Toyota Industries Corporation and its consolidated subsidiaries
Reference guidelines
l Global Reporting Initiative (GRI) Sustainability Reporting Guidelines 4th edition (G4)l ISO 26000
l Japan’s Ministry of the Environment Environmental Accounting Guidelines (2005 Version)l Japan’s Ministry of the Environment Environmental Reporting Guidelines (2012 Version)
Editorial policy

Toyota Industries’ CSR Activities

Contribution asa corporate citizen

Contribution in
non-business areas

Ethical responsibility /ComplianceFairness, transparency,
respect for human rights
and cultures, environmental
conservation

Foundation ofbusiness activities

Economic responsibility(business responsibility)

Continuous provision of
products and services
that contribute to society

Contributions throughbusiness activities

Society (company’s raison d’etre)

Corporate social
responsibility

Cautionary Statement with Respect to Forward-Looking Statements
This report contains projections and other forward-looking statements that involve risks and uncertainties. The use of the words “expect,” “anticipate,” “estimate,” “forecast,”“plan” and similar expressions is intended to identify such forward-looking statements. Projections and forward-looking statements are based on the current expectations
and estimates of the Toyota Industries Group regarding its plans, outlook, strategies and results for the future. All such projections and forward-looking statements are basedon management’s assumptions and beliefs derived from the information available at the time of producing this report and are not guarantees of future performance. Toyota
Industries undertakes no obligation to publicly update or revise any forward-looking statements in this report, whether as a result of new information, future events or otherwise.
Therefore, it is advised that you should not rely solely upon these projections and forward-looking statements in making your investment decisions. You should also be aware thatcertain risks and uncertainties could cause the actual results of Toyota Industries to differ materially from any projections or forward-looking statements discussed in this report.
These risks and uncertainties include, but are not limited to, the following: (1) reliance on certain customers, (2) product development capabilities, (3) intellectual property rights,(4) product defects, (5) price competition, (6) reliance on suppliers of raw materials and components, (7) environmental regulations, (8) success or failure of strategic allianceswith other companies, (9) exchange rate fluctuations, (10) share price fluctuations, (11) effects of disasters, power blackouts and other incidents, (12) latent risks associated withinternational activities and (13) retirement benefit liabilities.
The fiscal year ended March 31, 2016 is referred to as fiscal 2016 and other fiscal years are referred to in a corresponding manner.

2

Toyota Industries Report 20163

Growth of Toyota Industries

2000–

For 90 years since our founding, we have always strived to be studious and creative and thereby have achieved
business growth. We will continue to focus on offering products and services that meet customer needs in our[Strengthening Businesses Utilizing
Strategic M&A]

Primarily in the Materials Handling Equipment Business, which grew
to become one of our core businesses, we have pushed forward withexpanding the value chain and making advances for global businessdevelopment through such measures as strategic M&A, thereby
continuing our efforts to further strengthen our businesses.

unwavering efforts to be of help to people around the world.

[Significant advances toward Becoming–
1988 a Global Company]

1953–
1926–

[Diversification and Expansion of Businesses]

We began production of engines and assembly of vehicles in 1953 andproduction of lift trucks in 1956 in our efforts to diversify our businesses,
followed by production of car air-conditioning compressors in 1960. We
continued to engage in research and development to nurture new
businesses and build the foundation for future growth.

[The Beginning]

After putting a lot of effort into research and trials, Sakichi Toyoda finallyinvented and completed the Type G automatic loom. Toyoda Automatic
Loom Works, Ltd. (now Toyota Industries Corporation) was established to
manufacture the loom in 1926. Carrying on his spirit of being studious andcreative, we embarked on a path to undertake the development andproduction of Japanese-made spinning machinery and automobiles.

Overview of TIEM

S-type gasoline engine assembly line

Company head office at the time of establishment

FY1941

Automobile

Type G automatic loom

Materials Handling Equipment

FY1961

Net sales

Net sales

¥7

¥11.2

millionbillion

Lift truck assembly line (circa 1958)

1953 • Starts production of S-type gasoline engines• Starts assembly of automobiles
1956 • Starts production of lift trucks
1960 • Starts production of car air-conditioning compressors
1967 • Nagakusa Plant starts operations to produce small commercial
vehicles1970 • Takahama Plant starts operations to produce materials handlingequipment
1982 • Hekinan Plant starts operations to produce engines
1986 • Awarded Deming Application Prize for quality control implementation

1926 • Toyoda Automatic Loom Works, Ltd. established1935 • Prototype of Model A1 passenger car completed
1937 • Automobile Department separates and becomes Toyota Motor Co.,
Ltd. (now Toyota Motor Corporation)
1940 • Steel Production Department separates and becomes Toyoda SteelWorks, Ltd. (now Aichi Steel Corporation)

Textile Machinery

Amid an expansion in demand for lift trucks in North America andgiving consideration to trade frictions and impacts from fluctuations in
exchange rates, we established a manufacturing company for lift
trucks in the U.S. state of Indiana in 1988. This move wassubsequently followed by global production of car air-conditioning
compressors, foundry parts and textile machinery, and Toyota
Industries made great strides toward becoming a global company.

Logistics

Ceremony to celebrate the firstcompressor coming off the production
line at MACI1988 • Toyota Industrial Equipment Manufacturing, Inc. (TIEM)
established in Indiana, U.S.A., to produce lift trucks
1989 • Michigan Automotive Compressor, Inc. (MACI) established inMichigan, U.S.A., to produce car air-conditioning
compressors
1994 • Toyota Industry (Kunshan) Co., Ltd. (TIK) established in
Kunshan, Jiangsu Province, China, to produce foundry parts
1995 • T oyota Industrial Equipment, S.A. (now Toyota Material
Handling Manufacturing France SAS) established in France toproduce lift trucks•K irloskar Toyoda Textile Machinery Pvt. Ltd. (KTTM)
established in India as a joint venture with the Kirloskar Groupto produce textile machinery1998 • T
 D Deutsche Klimakompressor GmbH (TDDK) established inGermany to produce car air-conditioning compressors

Overview of YST

BT Industries AB’s
warehouse truck

2000 • Acquires BT Industries AB (now Toyota Material Handling
Manufacturing Sweden AB), a Sweden-based manufacturerof warehouse trucks
2001 • Takes over the industrial equipment sales division of Toyota
Motor Corporation (TMC)
2004 • TD Automotive Compressor Georgia, LLC (TACG) establishedin Georgia, U.S.A., to produce car air-conditioning
compressors
2005 • TD Automotive Compressor Kunshan Co., Ltd. (TACK)
established in Kunshan, Jiangsu Province, China, to produce
car air-conditioning compressors
2011 • P.T. TD Automotive Compressor Indonesia (TACI) establishedin Indonesia to produce car air-conditioning compressors
2012 • Acquires Uster Technologies AG, a Switzerland-based
manufacturer of yarn quality measurement instruments• Yantai Shougang TD Automotive Compressor Co., Ltd. (YST)
established in Yantai, Shandong Province, China, to produce
car air-conditioning compressors
2013 • Acquires Cascade Corporation, a U.S.-based manufacturerof attachments for materials handling equipment• Toyota Material Handling Mercosur Indústria e Comércio deEquipamentos Ltda in Brazil starts production of lift trucks
2015 • Acquires the lift truck business of Taiwan-based Tailift Co.,
Ltd. and makes it into a subsidiary• Acquires the materials handling equipment business of a U.S.
finance subsidiary of TMC and makes it into a subsidiary• Sells stakes in Asahi Security Co., Ltd. and Wanbishi
Archives Co., Ltd. as part of “concentration and selection” ofbusinesses

Others

FY2001

FY1981

Net sales

Net sales¥767.3¥208.4billionbillion4

FY2016
Net sales¥2,228.9
billion5

Outline of Businesses
Materials
Handling
Equipment /Logistics

Materials Handling Equipment
Logistics

The smooth flow of goods links the world and enriches the lives of people and society. Toyota Industries meetsdiverse customer needs in logistics by providing a diverse range of materials handling equipment such as lift
trucks and offering advanced and efficient logistics services. Through these businesses, Toyota Industries helps
customers the world over.

■ Net Sales■ Operating Profit(¥ Billion)(¥ Billion)

1,200

100

1,000

80

800

Materials Handling Equipment
The Materials Handling Equipment Segment develops, produces, sells and provides services for a broad range of products,from industrial vehicles centered around a full lineup of lift trucks (0.5- to 43-ton capacities) to materials handling systems. Lift
trucks, which capture the top global market share*, are delivered to customers around the world under the TOYOTA, BT,
RAYMOND and CESAB brands. Toyota Industries also strives to provide finely tuned after-sales services so that customers canalways use our products in the best possible condition. While raising the level of after-sales services for developed countries, weare reinforcing our sales and service networks as well as enhancing service training for emerging countries.

60

600

20

200
(FY) 14* Survey by Toyota Industries Corporation

45.0%

40

400
0

■ Percentage of Net Sales(FY2016)

15

0

16

(FY) 14

15

16

3.9%

GENEO-Ecore electric lift truck

Logistics
The Logistics Segment is composed of value-added business as its pillars, including planning, design and operation of
distribution centers to help customers reduce their logistics costs and land transportation services that primarily focus on cargodeliveries via trucks.
† In December 2015, Toyota Industries sold its stakes in Asahi Security Co., Ltd., which engages in cash collection and delivery and cash proceeds management services,and Wanbishi Archives Co., Ltd., which is involved in data storage, management, collection and delivery services.
† Starting from fiscal 2017, the business for planning, design and operation of distribution centers is classified into the Materials Handling Equipment Segment while thebusiness of land transportation services is included in the Others Segment.
Internal-combustion lift truck

Automobile

Low lift truck

Aerial work platform

Get behind the wheel with a solid, reassuring feel and enjoy comfortable driving. Besides vehicle assembly,
Toyota Industries produces various components such as engines and compressors, the latter of which
comprises the heart of car air conditioners to keep the vehicle interior comfortable, as well as car electronics.
From vehicle assembly to parts production, the Automobile Segment engages in a wide range of car-related
businesses, leveraging synergies among its business divisions in development and production.
VehicleEngineCar AirConditioning
Compressor
Car Electronics

Automated storage andretrieval system

Simple AGV(automatic guided vehicle)■ Net Sales■ Operating Profit(¥ Billion)(¥ Billion)

1,200

40

1,000
600

46.9%

10

200
(FY) 14■ Percentage of Net Sales(FY2016)

20

400
0

Warehouse logistics

30

800

With its strengths as an industry leader in safety, the environment, quality, cost and delivery, the Vehicle
Business produces compact to midsize automobiles.
In addition to diesel engines produced under a comprehensive structure ranging from planning anddevelopment to production, we also produce gasoline engines.
Toyota Industries’ car air-conditioning compressors are highly acclaimed in terms of their reliability athigh operating speeds and quiet operation in addition to such excellent environmental performancefeatures as compactness, light weight and fuel efficiency. The Car Air-Conditioning Compressor
Business captures the world-leading market share in unit sales*.
The Car Electronics Business develops and produces electronics products primarily for electric-powered
vehicles such as hybrid vehicles.

* Survey by Toyota Industries Corporation

TextileMachinery

Reach truck

15

16

0

(FY) 1415

16

RAV4 (hybrid model)

Vitz (Yaris outside Japan)

Diesel engine

Gasoline engine

Electric car air-conditioning Variable-displacement
compressor
type compressor

A soft texture caressing your skin and gently enveloping your body. Toyota Industries produces spinningmachinery that spins high-quality yarns and high-speed, energy-saving weaving machinery that produces
fabrics. We deliver textile machinery to customers around the world that incorporates advanced technologies
and is imbued with our dedication to quality.

Fixed-displacement
type compressor

Oxygen-supplying air
Hydrogen circulation pumpcompressor for fuel cell vehicles
for fuel cell vehicles■ Net Sales■ Operating Profit(¥ Billion)(¥ Billion)

80

6

60

DC-DC converter■ Percentage of Net Sales(FY2016)
2.9%

4

40

The Textile Machinery Division, our original business, began with the invention of the automatic loom by founder Sakichi Toyoda.
Presently, we undertake fully integrated operations from development and production to sales and after-sales services forspinning machines that spin twisted fiber bundles into yarn and weaving machines that weave spun yarn into fabrics. Our textile
machinery is supplied to markets worldwide. Thanks to superb reliability and high productivity, our air-jet looms have won
extensive acclaim from customers around the globe, capturing the world-leading market share in terms of unit sales*.

2

20
0

(FY) 1415

160(FY) 14

15

16

JAT810 air-jet loom

* Survey by Toyota Industries Corporation

Ring spinning frame

6

Toyota Industries Report 2016

Roving frame

Comber

Cotton classing instrument

Yarn testing instrument7

Consolidated Financial and Non-Financial
Highlights
Financial Information(Years ended March 31)(Millions of yen)

2014

2015

Financial Information(Years ended March 31)(Millions of yen)

% change
2015 vs 2016

2016

2014

For the Year2015

% change
2015 vs 2016

2016

At Year-End
2,007,856

2,166,661

2,228,944

2.9%

Total assets

3,799,010

4,650,896

4,199,196(9.7%)

Operating profit

107,691

117,574

127,970

8.8%

Net assets

1,829,326

2,425,929

2,113,948(12.9%)

Ordinary profit

138,133

170,827

185,398

8.5%

Interest-bearing debt

705,250

753,942

890,993

18.2%

Profit attributable to owners of the parent

91,705

115,263

183,036

58.8%

Number of employees (persons)49,33352,52351,458(2.0%)

Investments in tangible assets

109,479

126,395

75,438(40.3%)

Depreciation

64,15370,78277,366

9.3%

Research and development expenses

46,32647,78565,440

36.9%

85

110

120

9.1%

Net sales

Cash dividends per share (yen)Net Sales

Operating Profit / Operating Profit Margin(¥ Billion)

2,500

150

6

2,000

120

5

1,500

90

1,000

60

500

30

0

0

(FY)

2014

2015

2016

(%)

2014

2015

2016

2015

% change
2015 vs 2016

2016

Energy consumption (TJ)

11,006

10,852

11,4035.1%

200

Raw material consumption (t)662,412700,628

745,407

6.4%

150

Water consumption (km3)

3,724

4,087

4,136

1.2%

100

CO2 emissions (t-CO2)

857,839

826,437

789,838(4.4%)

Waste generation (t)93,79990,77579,688(12.2%)

Discharge of treated wastewater (km3)*2

2,124

2,029

2,169

6.9%

(¥ Billion)

50

(FY)

2014
For the Year

Ordinary Profit(¥ Billion)

Non-Financial Information(Years ended March 31)

0

(FY)

2014

2015

2016

*2: Japan consolidated

Operating Profit
Operating Profit Margin (right)

Profit Attributable to Owners of the Parent

Investments in Tangible Assets

Depreciation

Energy Consumption

Raw Material Consumption

Water Consumption(¥ Billion)(¥ Billion)(¥ Billion)

(km3)

150

(kTJ)

(kt)

200

80

12

800

5,000

120

150

10

60

90
100

40

0

(FY)

2014

2015

0

2016

Cash Dividends Per Share /Dividend Payout Ratio / Total Return Ratio*1

(FY)

2014

2015

2016

Total Assets

0

2,000

4

20

30

3,000
400

6

60
50

200

2
(FY)

2014

2015

0

2016

Net Assets / Equity Ratio

4,000

600

8

(FY)

2014

2015

2016

CO2 Emissions

0

1,000
(FY)

2014

2015

2016

Waste Generation

0

(FY)

2014

2015

2016

Discharge of Treated Wastewater

(¥)

(%)

(¥ Billion)(¥ Billion)(%)(kt-CO2)

(kt)

(km3)

120

30

5,000

2,500

60

1,000

100

2,500

100

25

4,000

2,000

50

800

80

2,000

80

20

3,000

1,500

40

600

60

1,500

2,000

1,000

400

40

1,000

1,000

500

200

20

500

60
40
20
0

(FY)

2014

2015

2016

0

(FY)

Cash Dividends Per ShareDividend Payout Ratio (right)
Total Return Ratio (right)*1: The figure for FY2016 includes the planned acquisition of treasury
stock up to a maximum of 4 million shares in the amount of ¥18 billion.

8

Toyota Industries Report 2016

2014

2015

2016

0

(FY)

2014
Net Assets

2015

2016

0

(FY)

2014

2015

2016

0

(FY)

2014

2015

2016

0

(FY)

2014

2015

2016

Equity Ratio (right)

9QFirst of all, could you sum up the Medium-Term Management Plan
that ended in fiscal 2016?

Top Interview

In 2011, Toyota Industries formulated Vision 2020, along with the Medium-Term Management Plan that
articulates a path toward fiscal 2016 for the realization of Vision 2020, and we have since been steadily
implementing measures for growth.
During this period, economic growth slowed down in China and emerging countries including markets inSoutheast Asia, but the strong U.S. economy served to drive a modest recovery in the global economy asa whole.
Under these circumstances, we posted growth mainly in the materials handling equipment and automobilerelated fields by increasing global unit sales of materials handling equipment and car air-conditioning
compressors and by expanding business domains through such measures as enhancement of our value chainof materials handling equipment. Additionally, Toyota Industries and Toyota Motor Corporation (TMC) haveagreed to consolidate diesel engine development and production functions into the operations of Toyota
Industries. We are currently undertaking preparatory work for the consolidation.
Our proactive forward-looking investment, on the other hand, increased depreciation and other costs,
which in turn pushed profits down in the short term. Nevertheless, we have made progress overall, basically as
originally planned under the Medium-Term Management Plan, and readied ourselves for a next leap forward.
Overview of the Medium-Term Management Plan (FY2013–2016)
1

Net Sales (¥ Billion)2[ ] = percentage of net sales

Operating Profit (¥ Billion)( ) = profit margin; [ ] = percentage of operating profit

2,166.6

2,230.0 2,228.9

2,007.8

1,543.3

117.5

1,615.2

107.6
1,004.1

Other

Stepping Up Efforts to Attain
Sustainable Growth for the
Realization of Vision 2020

(5.4%)

70.0

Akira Onishi

President

77.0(4.8%)

79.7[62.3%]

Other

803.1

[46.9%]

Materials
Handling
Equipment

38.2[54.6%][52.0%]

Automobile(FY) 20123(5.7%)(5.4%)(4.5%)

1,045.7

Top Interview

127.9[45.0%]

Materials 570.7
Handling [37.0%]
Equipment

Automobile

130.0

2013

2014

2015

Investment
Accumulated total
from FY2013 to FY2016:
Approx. ¥780.0 billion(Of which approx. ¥400.0 billion isinvested in tangible assets)

4[26.0%][30.3%](FY) 20122016[Plan] [Results]

33.3

21.2
2013

2014

2015

2016
[Plan] [Results]

ROA and ROE (FY2016)
ROA
ROE

Targets
5.0%
10.0%

Results
7.3%
20.8%

Notes: • Including gain on sales of shares of Asahi Security Co., Ltd.
and Wanbishi Archives Co., Ltd.
• Investment securities included in calculations based on
acquisition cost

• Achieved a continued expansion of business, centered around materials
handling equipment and automobiles• Costs increased due to proactive investment but net sales andoperating profit were virtually as planned.

10

Toyota Industries Report 201611

Top Interview

Q

What is the future direction of your business operations?

Toward the realization of Vision 2020
The idea embodied in Vision 2020 is to contribute to an enriched lifestyle of people and comfortable society
around the world by continuously supplying products and services that are truly needed by customers, which
in turn will allow us to attain growth of our businesses and realize the vision. The Medium-Term Management
Plan ended in fiscal 2016, but we will continue to pursue further growth by stepping up our efforts toward therealization of Vision 2020.
Our basic strategy consists of the three action themes shown below. We will apply these themes across ourbusiness units in a horizontally aligned manner.
•	Development of eco-friendly, energy-saving products based on the keywords of 3Es (Energy,
Environmental protection and Ecological thinking)• Enhancement of our value chain, including after-sales services• Business development in world markets
Ongoing “concentration and selection” strategy
In realizing Vision 2020, we have been implementing a strategy of “concentration and selection” of business
operations. Specific actions taken since 2007 include withdrawal from the consumer electronics field andconsolidation and restructuring of the Logistics Business. In December 2015, we sold our stakes in two
logistics-related consolidated subsidiaries, Asahi Security Co., Ltd. and Wanbishi Archives Co., Ltd.

Vision 2020

Further Promoting Our Efforts toward Vision 2020
Support industries and social foundations around the world by continuously supplying
products/services that anticipate customers’ needs in order to contribute toan enriched lifestyle and comfortable society

To contribute to an enriched lifestyle and comfortable society

Solution

Key Components
New
Product

New
Product

New
Product

New
Product

New
Product

3Es (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

12

Mobility

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 byimproving our business basedon team strength and TPS

Strengthen growth potential byleveraging synergies among
divisions, strategic M&As andalliances

We had made these companies into our subsidiaries with the aim of expanding consigned logistics
services. We have subsequently provided operational improvement support to both companies, which in turn
attained a certain level of growth. Nevertheless, we decided to sell off our stakes based on the belief that it will
be beneficial for them to work with companies that can generate greater business synergies and make greater
steps forward.
We will continue to implement a “concentration and selection” strategy to focus on businesses that areclosely linked to our core businesses in the materials handling equipment and automobile-related fields.

Q

Could you explain your policies concerning
initiatives to be made in each business?

In the Materials Handling Equipment
Business, we will focus more on thedevelopment of products with highenvironmental performance, for which needs
are growing. In order to improve the fuelefficiency of internal-combustion lift trucks anddeliver longer uptime for electric lift trucks, wewill increase the use of engines and motors
developed and manufactured in-house. On topof providing equipment such as lift trucks, weService Skills Contest
GENEO-Ecore electric lift truck
will improve the quality of our after-sales
services, for which we are already renowned,
and offer a range of logistics solutions based on our accumulated know-how in operational improvements toassist customers in achieving total logistics efficiency and reducing environmental impact.
To satisfy diverse needs of customers in a more precise manner, we made Cascade Corporation, one of theworld’s leading manufacturers of lift truck attachments based in the United States, into a subsidiary in 2013. Aspart of efforts to increase our presence in emerging countries, we acquired the lift truck business of Taiwanbased Tailift Co., Ltd. in 2015. In the same year, we also acquired the materials handling equipment division of
TMC’s financial subsidiary in the United States to strengthen our sales financing operations. Through theseendeavors, we have created a foundation on which to expand our value chain. In the future, we plan to pursue
synergistic effects and consistently yield successful results.
In automobile-related businesses, we regard the increasingly stringent fuel efficiency standards across theworld as a driver of our growth and will push ahead with development of products with high fuel efficiency in
the Car Air-Conditioning Compressor Business. Besides fuel-efficient compressors for internal-combustion
vehicles, we plan to increase the competitiveness of our compressors for electric-powered vehicles, keeping
pace with the growth of vehicle electrification.
On the production front, we have already established a structure needed to swiftly respond to an increase inorders from automakers by augmenting production capacities of our production bases outside Japan andincreasing the ratio of locally procured parts. To fully leverage the established structure, we will strive for quality
improvement at these bases and help them become self-reliant and grow sustainably on their own. We will
make meticulous efforts, such as passing on our proprietary skills and the thinking behind monozukuri(manufacturing) to key human resources, to ensure higher quality and more stable mass production operations
anywhere in the world.
In the Vehicle Business, we expect vehicle
production in Japan to remain flat for the
medium to long term. Even so, we intend tohone our already superior level of safety, theenvironment, quality, cost and delivery(SEQCD) and create plants that integrate
our latest knowledge and ingenuity. Besides
Ceremony to commemorate cumulative production of 100 million
units at a U.S. compressor production baseToyota Industries Report 2016

Top Interview

Teaching employees from outside Japan

13

Top Interview

assembly of vehicles, we plan to proactively engage in vehicle development by conducting planning activities andmaking proposals to TMC.
In the Engine Business, we will proceed with a plan, as agreed with TMC, to shift and consolidate diesel
engine development and production functions to Toyota Industries. Although electrification of vehicles is
expected to make gradual progress, we anticipate sustained needs for diesel engines that are inherently fuelefficient and generate less CO2 emissions. Thus, our policy to concentrate harder on the development of clean
diesel engines remains intact. We will enhance the competitive edge of diesel engines, including those fittedwith our first vehicle-use turbocharger that was internally developed in 2015 and manufactured. At the sametime, we will also strive to expand the use of our internally manufactured engines in ourown lift trucks and other industrial machinery. By doing so, we plan to increase the scaleand efficiency of our business.
In March 2016, Toyota Industries Engine India Private Limited (TIEI), a consolidated
subsidiary in India, initiated production of GD diesel engines for TMC’s Innovative
International Multi-purpose Vehicle (IMV) series. We will nurture the company into an
important production base of diesel engines, for which demand is expected to grow in
Toyota Industries Engine
emerging and other countries for use in commercial vehicles.
India Private Limited
In the Electronics Business, needs for greater fuel economy and environmental performance are growing not
only in the automobile field but also in materials handling equipment and other non-automotive fields. These
growing needs are expected to facilitate a trend toward electrification. In response, we will reinforce activities toplan and develop new products based on our power source technologies and will expand sales to TMC andother automakers in the world. We will also work more closely with the Materials Handling Equipment Divisionand other business divisions to increase our role in non-automotive fields.
Our efforts in the Textile Machinery Business will include promotion of proactive sales activities andestablishment of a meticulous after-sales service structure. Moreover, we plan to collaborate with Uster
Technologies AG, a Swiss-based consolidated subsidiary, to develop next-generation products with greater
energy-saving performance and even higher added value.

Q

Toyota Industries Report 2016

Top Interview

Society Envisioned in 2050
—Example initiative for the creation of a zero CO2 emission society—

Taking on a challenge of achieving zero CO2 emissions from use of our products or vehicles equipped with our products
Image of an energy society with zero CO2 emissions
PHV & EVFC busHydrogen charging station• Electric car air-conditioning compressor• Motor/inverter• DC-DC converter, etc.

What will be the focus of management in achieving sustainablecorporate growth?

The business environment in the world market is changing at an increasingly rapid pace while the global
economy is becoming ever more interdependent. An event in one region could now affect the rest of the world,
causing unstable conditions to linger and making economic fluctuations larger. More imminently, continued
economic growth in China and other emerging countries is slowing, and there is a persistent economic
fluctuation risk linked to national financial policies. In order for us to flexibly adapt to the economic fluctuation
risk and changes in the market environment, it is essential that we strengthen our business platform
further through cost reductions and productivity improvements and always maintain a lean businessstructure to prepare for changes.
Our expanding business operations also entail greater risks. We need to prevent these risks from occurringand make a quick and appropriate response should they occur. We have approximately 50,000 employees
working around the world, and corporate culture and ethics are not enough to bring all of us together. As such,
we will base our actions on the Toyoda Precepts, which carry the spirit of founder Sakichi Toyoda to respecthumanity and take on challenges; use various systems and rules as a means to avoid misconduct; and work to
fully observe corporate ethics and ensure compliance.
After strengthening our platform and preparing ourselves for the future, we will take steady steps forward for
future growth. Cost reduction and structural reinforcement are essential in attaining sustainable growth, butthese alone will not be effective in preventing our products from becoming commoditized and getting us
dragged into price competition. To avoid such a situation, what we need are innovative and appealing products
and services. We will enhance our R&D operations and manufacturing capability further while seeking toencourage innovations.

14

Recently, we have entered a new business field of fuel cells and have developed several products byleveraging a pool of technologies accumulated in the field of car air-conditioning compressors. One example isan oxygen-supplying air compressor. It is a key component of the power generation system of fuel cell vehicles(FCVs) and has been installed in TMC’s MIRAI FCV. In the materials handling equipment field, which forms oneof our core businesses, we have been conducting a feasibility test of our fuel cell (FC) lift
truck for possible release during fiscal 2017.
As described above, we aim to encourage innovations by capitalizing on our strengths
derived from our diverse businesses and focusing on overlaps and synergies among
business domains.
To contribute to realizing a society with zero CO2 emissions by 2050 with the ultimate
goal of enriching the lives of people in harmony with the natural environment, Toyota
Industries formulated the Sixth Environmental Action Plan. This is a five-year activity plan
covering the period from fiscal 2017 to fiscal 2021. Since the First Environmental Action
Feasibility test of FC lift truck
Plan launched in 1993, our focus of activity had been on environmental conservation.
However, as external circumstances have changed, we have decided to place greater emphasis on“Establishing a Low-Carbon Emission Society” in our sixth plan.
We will foster the development of energy-saving, electrification and other technologies and continue toprovide eco-friendly products mainly in the business fields of materials handling equipment and automobiles,
thereby contributing to the realization of a society that has less impact on the environment.

• FC peripheral device• Electric car air-conditioning compressor

PHV & FCV• FC peripheral device• Electric car air-conditioning compressor• Inverter, etc.

Electric/FC lift truck• Electric powertrain• Electric car air-conditioning compressor• DC-DC converter, etc.
FCV

* Excerpt from the Sixth Environmental Action Plan material presented by Toyota Industries Corporation

Companies have a public presence in society. As
such, we need to achieve sustainable growth for all
our stakeholders, including customers, business
partners, shareholders and investors, members of
local communities and Toyota Industries Group
employees and their families.
The Toyota Industries Group will continue ourefforts to contribute to the growth of society throughour businesses.

15

Corporate Governance
As a global company operating in various countries and regions, Toyota Industries seeks efficient management while
maintaining and enhancing the fairness and transparency of its corporate activities.

Basic Perspective of Corporate GovernanceToyota Industries strives to enhance its corporate value in a stable manner over the long term and maintains society’s trustby earnestly fulfilling its social responsibilities in accordance with its Basic Philosophy. To that end, Toyota Industries strives
to further enhance its corporate governance in its efforts to maintain and improve management efficiency and the fairness
and transparency of its corporate activities.

Corporate Governance Structure

division regularly to monitor and follow the status of theirbusiness execution. At meetings of the Management
Council, directors, managing officers and audit &supervisory board members convene to report and confirm
the monthly status of business operations and share overall
deliberations at Board of Directors meetings and othermanagement-related information.
In addition, issues pertaining to human resources,quality, production, procurement and technologies are
discussed at the corresponding functional meetings. We
have also put in place committees to deliberate on more
specific matters, such as CSR, the environment and exporttransaction controls. These functional meetings andcommittees discuss important matters and action themes inrespective areas.

Implementation Structure
Toyota Industries convenes monthly meetings of the Boardof Directors to resolve important management matters andmonitor the execution of duties by directors. We also
appoint outside directors who have a wealth of experienceand knowledge concerning business management. They
attend meetings of the Board of Directors and give opinions
and ask questions as deemed necessary. Through thissupervisory function of outside directors, we ensure thelegality and validity of the Board’s decisions as well as
directors’ execution of duties from an objective perspective.
The Management Committee, which is composed of
directors at the executive vice president level and above as
well as relevant managing officers and audit & supervisoryboard members, deliberates on a variety of issues
concerning important management matters such as our
corporate vision, management policies, medium-termbusiness strategies and major investments.
Toyota Industries has a divisional organization system,with significant authority delegated to each businessdivision. For especially crucial matters, however, we haveestablished the Business Operation Committee to enable
the president to meet with the heads of each business

Audit & Supervisory Board System
Toyota Industries has adopted an audit & supervisory board
system. Two full-time audit & supervisory board members
and three outside audit & supervisory board members
attend meetings of the Board of Directors to monitor the
execution of duties by directors. At the same time, meetingsof the Audit & Supervisory Board are held once a month todiscuss and make decisions on important matters related toauditing. The full-time audit & supervisory board members

Shareholders’ Meetings
Selection/
Dismissal

Independent Auditors

Accounting
Audit

Selection/
Dismissal

ReportingExecutive Compensation
Committee

Exchange ofOpinions

Executive Appointment
Committee

Management Committee(Deliberates on important matters from management’s perspective)

Management Council

Cooperation

Board of Directors
Appointment/
Monitoring

Discussion/
ReportingMonitoring

Selection/Dismissal

Selection/
Dismissal

Direction/
Supervision

Reporting

Audit & Supervisory Board
Audit & Supervisory
Board Office

Monitoring

Human Resources

CSR

Quality

Environmental

Production

Export Transaction
Controls

Procurement

Safety and HealthTechnologies

Profit Improvement(Reports on and confirms execution of business operations)Internal Audit

Functional Meetings*1, Committees*2
Managing Officers

Business Divisions/In-House Company/Departments
Subsidiaries/Affiliates(As of June 10, 2016)
Toyota Industries’ Corporate Governance Reports are available at: https://www.toyota-shokki.co.jp/ (in Japanese)

16

Toyota Industries Report 2016

*2: Committees

Reporting
Audit Dept.

n Appointment of Independent Members ofManagement
As a publicly listed company, Toyota Industries strives toensure the fairness and transparency of management.
Following the Securities Listing Regulations stipulated by
the Tokyo Stock Exchange and Nagoya Stock Exchange,
respectively, to further enhance our corporate
governance Toyota Industries has appointed as
independent members of management two outside
directors and two outside audit & supervisory board
members who are deemed to have no conflicts ofinterest with our shareholders.

Internal Control System
In accordance with the Companies Act, in May 2006 Toyota
Industries’ Board of Directors adopted the Basic Policies for
the Establishment of an Internal Control System (Basic
Policies) to ensure compliance, risk management as well as
the effectiveness and efficiency of business operations by
incorporating these policies into each business segment’s
annual policies and day-to-day routine management. The
CSR Committee, at its meeting held in March, assesses the
progress made in implementing the Basic Policies in theyear under review and determines actions for the coming
year, including reviewing the implementation structure andenhancing day-to-day operational management.
A revision was made to the Companies Act in April 2015
(enforced in May 2015), further requiring companies to set
up and upgrade a system to ensure the fairness of theiroperations and effectiveness of auditor duties. Accordingly,
we reviewed our Basic Policies, and the revised policies
have been adopted by the Board of Directors.
Furthermore, based on the Financial Instruments andExchange Law (so-called Japanese Sarbanes-Oxley Act(J-SOX)), we have established and appropriately operated
an internal control system to maintain the reliability offinancial reporting. The system’s status and progress arereviewed by the Audit Department and audited byindependent auditors. We determine which Toyota Industries

Group companies fall within the scope of J-SOX based on
the degree of impact on the reliability of financial reporting.
We determined that our internal controls over financial
reporting as of the end of fiscal 2016 were effective, andaccordingly, submitted an Internal Control Report in June
2016. The report was reviewed by independent auditors andjudged fair in their Independent Auditors’ Report.

Compliance Four Pillars of Compliance Activities
We believe that compliance means both adhering to laws
and regulations and observing ethics and social norms. In
order to ensure compliance, it is vital to instill an awarenessof compliance in each and every employee.
Under the strong leadership of top management, we
promote compliance throughout the Toyota Industries
Group, including consolidated subsidiaries in and outside
Japan, by formulating a Code of Conduct and thoroughly
informing employees together with checking and monitoring
compliance.
n Four Pillars of Compliance Activities

4

3

2

1

Checking
andMonitoring

Thoroughly
Informing
Employees

Formulating
rules

Leadership/
Organization

CSR selfassessment

Education on
relevant laws
and regulations

Employee Codeof Conduct

Declaration by
the presidentInternal rules

Compliance
Subcommittee

Audit

Manuals

Establishment and Reinforcement of
Implementation Organization
To promote compliance throughout the Toyota Industries
Group, we have established the Compliance Subcommittee(led by director in charge of the Legal Department*) as asubordinate organization to the CSR Committee. Every year,
the subcommittee formulates an action policy and conductsa follow-up check on the progress of corresponding
activities twice during that year.
*As of March 31, 2016n Organization for Promoting Compliance*1: Functional
Meetings

President

Business Operation Committee(Follows up on the execution of business operations)

Reportingcarry out auditing by attending primary meetings andreceiving reports directly from directors. Additionally, we
have assigned dedicated personnel, while audit &supervisory board members monitor the legality andefficiency of management through collaboration withindependent auditors and the Audit Department.

CSR Committee

n Internal Control Assessment System (Based on J-SOX)
Internal control activities undertaken by eachdepartment and consolidated subsidiary(Establishment and operation of internal controls)

Annual financial report

Activity reports
Compliance Subcommittee

Internal Control Report

Departments in charge of legal compliance: 12
Supporting department: 1

Review of internal
Improvement of Detection ofcontrols byinternal controls deficiencies Audit Department

These entities deliberate andfollow up on issues in respective areas.

Internal Control Audit Report
Audit on internal controls by independent auditors

Policies

Toyota Industries
Corporation

Consolidated
subsidiaries in Japan

Consolidated subsidiaries
outside Japan

Compliance committees

Compliance officers

17In addition, we have set up compliance committees at
subsidiaries in Japan and appointed compliance officers at
subsidiaries outside Japan in our efforts to promoteautonomous activities in respective communities incollaboration with the Compliance Subcommittee. In fiscal
2016, we carried out activities in line with local needs.
n Activities in Japan
We held a conference to improve responsiveness ofcompliance personnel from 31 consolidated subsidiaries inJapan. The conference also included a seminar by externallawyers regarding such topics as proper initial responses
when a case of misconduct occurs and measures toprevent recurrence.
n Activities in North America
We held the Compliance Officer Conference in North
America with participation of compliance officers from 19
bases. In fiscal 2016, we exchanged opinions on safe andsecure workplaces compliant with the Code of Conduct,
how to engage in communication that gives consideration to
cultural diversity and other themes that reflected current
U.S. social conditions.
n Activities in Europe
In Europe, the regional headquarters introduced ane-learning system to provide effective education on the
Code of Conduct at respective bases while identifying andassessing compliance risks and promoting preventive legal
measures for selected priority matters.
n Activities in China
In China, compliance officers from sevenbases attended the Compliance Officer
Conference in which they engaged in an
exchange of opinions and formulated astandardized Code of Conduct
applicable to all bases in the country. In
addition, a misconduct prevention
seminar regarding bribery,embezzlement, leakage of confidential
information and other sensitive themes
Standardized Code of
was held, with supervisors from each
Conductbase in attendance. Through these measures, we are
striving to raise an awareness of the prevention of
misconduct at all bases in China.
n Activities in Asia, Oceania and South America
We held a conference in Singapore attended by presidents
and compliance officers from nine bases in Asia (excluding
China), Oceania and South America, where we haven’t
established a regional headquarters, to promote complianceactivities. In addition to group discussions, the conference
also featured a lecture by an
external lawyer regarding
management of confidential
information, bribery prevention
and initial response when acase of misconduct occurs, allof which are a matter ofconcern in emerging countries. Compliance conference held in Singapore

Formulation of Code of Conduct andDissemination
Toyota Industries has formulated and distributed to
executives and all employees the Toyota Industries
Corporation Employee Code of Conduct, which serves asconduct guidelines that should be observed by employees,
and has been providing familiarization training. Subsidiaries
in and outside Japan have formulated their own Code of
Conduct appropriate to their respective business lines andcorporate cultures. Toyota Industries’ 31 consolidated
subsidiaries in Japan and 73 consolidated subsidiaries
outside Japan have already created their own Code of
Conduct and have been working to instill an awarenessamong their employees.
Simultaneously, to prevent significant risks of bribery andviolations of antitrust laws, in addition to the Code of
Conduct we have formulated corresponding regulations andbeen undertaking activities to familiarize employees withthese regulations.
Regarding bribery, Toyota Industries formulated then Compliance Committees (in Japan) and Compliance Ofﬁcers (outside Japan)(As of March 31, 2016)

Compliance officer
in Europe (TMHE)

Compliance officer
in China (TIMC)

Andreas Lundh

Zhu Lingling

Europe:37 companies

North America:
19 companies

Asia: 14 companies

Global Guidelines for Bribery Prevention. Particularly, incountries with a high risk of bribery, each base hasdeveloped internal rules in accordance with the applicablelaws in respective countries and been conducting activities
to familiarize employees with them.
As for antitrust laws, we have put in place a system toconduct a check and review before and after employees ofToyota Industries contact competitors. We are alsofamiliarizing all employees that they are prohibited from any
acts that may possibly constitute a violation of antitrust laws.
In fiscal 2016, we set up antitrust law compliance month andconducted enlightenment activities at relevant departments.

Thoroughly Informing Employees about
Applicable Laws and Regulations

Sanjay Agrawal

Sheena Seger

n Compliance Education Provided

Toyota Industries
Executive training

South America:
3 companies

TINA: Toyota Industries North America, Inc.
TMHE: Toyota Material Handling Europe AB
TIMC: Toyota Industries Management (China) Co., Ltd.
TMHIN: Toyota Material Handling India Pvt. Ltd.

18

Toyota Industries Report 2016

Compliance, Environment (water quality and waste), Traffic safety,
Japan’s Personal Information Protection Law, Compliance hotline,
Prevention of bribery, Insider trading regulations, Copyrights, Japan’s
subcontracting law, Sexual harassment, Abuse of power in theworkplace, etc.

Courses established in fiscal 2016
Product liability, Basics of contracts, Export/import transaction control,
Antitrust laws (cartels), Act on Prohibition of Unauthorized Computer
Access, Management of confidential information, Illegal activities, etc.
*Provided to all employees. Additional courses are under consideration.

We have been working to strengthen checking andmonitoring of compliance through such measures asconducting ongoing compliance self-assessment andpromoting prevention activities at consolidated subsidiaries.
n Prevention Activities
We have been promoting prevention measures atconsolidated subsidiaries in and outside Japan through theCompliance Subcommittees and other entities based on
past incidents that occurred at Toyota Industries. Since
fiscal 2016, we have started using violations of laws andcases of misconduct at other companies as reference sothat similar compliance infringements will not occur at the
Toyota Industries Group. Specifically, in view of an insider
trading allegation at another company in Japan, we
reviewed our internal regulations on insider trading.
n Compliance Hotline
We also operate a compliance hotline (helpline) that allows
employees and their families to seek advice from external
experts on compliance-related matters without being
exposed to negative consequences, as well as to ensure
early discovery and the prevention of issues. This compliancehotline is cited in the Toyota Industries Corporation Employee
Code of Conduct, and we periodically distribute pamphlets
to inform our employees of the service. In fiscal 2016, we
introduced similar helplines at respective consolidated
subsidiaries in China, North America and Europe.

Compliance officer
in North America(TINA)

Japan: 31 companies

Oceania: 1 company

Courses started up to fiscal 2015

Checking and Monitoring ComplianceToyota Industries provides required legal knowledge toemployees according to their job ranks or positions,familiarizing them with the initial responses that should be
followed upon the occurrence of a problem and educatingthem on risk management. To new or young employees, we
provide easy-to-understand guidance on “what to do” and“what not to do” in order to improve their complianceawareness based on laws and corporate ethics, using the
Toyota Industries Corporation Employee Code of Conduct
as an instructional material.
Over the three years since fiscal 2014, we have created
and disseminated 27 e-learning materials in order tocultivate a deeper understanding of compliance among
employees and create an environment in which employees
foster compliance consciousness on their own.
In addition, in fiscal 2016 we invited external lawyers tohold executive legal seminars on “antitrust laws” and“revision of theCompanies Act
and corporate
governance” fordirectors, audit &supervisory board
Screen display of e-learning material to promotemembers andcompliancemanaging officers.

(As of March 31, 2016)

FY2014Compliance officer
in India (TMHIN)n Example Topics of e-Learning Materials

Rank-based (clerical,
technical) training
Training by function

Consolidated
subsidiaries inJapan

FY2015FY2016FY2017

Conducted training for newly appointed executives and legal seminars for executives

Ongoing initiative

Promoted training on quality, safety, the environment, labor, management ofconfidential information, export transactions, subcontracting and antitrust laws

Ongoing initiative★12,000 employees participated★12,000 employees participated★10,900 employees participated

Conducted training on the Code of Conduct, safety, etc.
★15,400 employees participated★20,200 employees participatedOngoing initiative★24,500 employees participated19Management of Confidential Information
Basic Perspective
We recognize that the personal information of customers,
employees and business partners as well as information
concerning our technologies and sales activities are assetsthat need to be protected. Accordingly, we are making ourutmost efforts to safeguard confidential information andstrengthen its management as one of the CSR areas.

Implementation Structure
Toyota Industries has set up the Information Security
Subcommittee (led by a director in charge of the General
Administration Department*1) as a subordinate organization
to the CSR Committee to promote proper management ofconfidential information, taking appropriate actions against
the risk of leakage of confidential information and complying
with laws such as the Unfair Competition Prevention Act andthe Act on the Protection of Personal Information.
To thoroughly implement the initiatives adopted by thesubcommittee, we appoint information security managers*2
and information security administrators*3 at eachdepartment. We strive to raise awareness about information
security among their staff by holding workplace meetingsand conducting self-checks regarding their information
security practices.
In fiscal 2016, to counter an increase in risk for leakageof confidential information we strengthened the security
check of visitors at the gates of the Toyota Industries
premises as well as conducted response training at theheadquarters based on the assumption that an incident or
accident occurred.
n Activity Examples

Activities up to fiscal 2015
Activities by Toyota Industries• Rank-based group education• Restrictions on taking photographs on company premises• Attaching a security cable with a lock to all PCs to prevent
unauthorized removal off the premises• Restricting the copying of electronic data on recording media• Stronger monitoring of email correspondence• Requiring employees to sign a confidentiality agreement andchecking the history of electronic data being taken off the premises
upon retirement
Activities in collaboration with other Toyota Group companies• “All Toyota Information Security Awareness Month” activities in May
and October to raise employee awareness and conduct auditing by
checking off-the-premises removal of personal computers andrecording media, etc.

New activities in fiscal 2016
• Strengthening the security check of information devices that visitors
bring onto the Toyota Industries premises• Conducting response training at the headquarters based on theassumption that an incident or accident occurred, etc.

Our consolidated subsidiaries in and outside Japan also
appoint respective information security managers andinformation security administrators. We have also developed
common guidelines concerning management of confidential
information, which have been distributed among these20

Toyota Industries Report 2016

subsidiaries, and follow up on their activities on a periodic
basis in our efforts to raise the level of confidential information
management throughout the Toyota Industries Group.
*1: As of March 31, 2016
*2: Head of each department*3: A person within the department, appointed by the head

Risk Management
Basic Perspective
Based on the Basic Policies for the Establishment of anInternal Control System in compliance with the Companies
Act, Toyota Industries is working to strengthen regulations
and a structure to promote risk management. We regard thefollowing aspects as the basics of risk management andimplement initiatives accordingly.
(1)	Incorporating measures to prevent and reduce potential
risks into daily routines and following up on the progressof implementation(2)	Ensuring quick and precise actions to minimize the impact
on business and society when a risk becomes apparent

Implementation Structure
Business divisions and other departments at the Head Officedevelop and promote annual action policies that integrate
measures to prevent and control risks related to quality,
safety, the environment, personnel, export transactions,disasters and information security. Progress is assessed andfollowed up by each functional management entity such as
the CSR Committee and the Environmental Committee. At
the same time, functional departments at the Head Officesuch as those responsible for quality, safety and theenvironment formulate rules and regulations and manuals
from a Group-wide perspective, including consolidated
subsidiaries. By confirming and following up on the progress
through operational audits and workplace inspections, they
provide support for raising the level of risk management at
each business division and consolidated subsidiary.
We have also formulated the Crisis Response Manual,
which defines our initial response to a problem or a crisis.
This manual lays out basic rules to be followed when a risk
becomes evident and a problem or crisis occurs. The aim isto ensure quick reporting to top management, perform an
accurate assessment of the impact on society and businessactivities and minimize damage through appropriate actions.
The content is reviewed and revised as deemed necessary
in response to changes in businesses and the surrounding
environment.

Furthermore, we divide these measures into the three
categories of “precautionary, pre-disaster mitigation,” “initial
response to be followed immediately after the disaster” and“restoration of production,” and are respectively making
Company-wide efforts.
In fiscal 2016, based on the results of a review of ourefforts in the previous fiscal year, we conducted disaster
drills in more realistic settings, confirmed procedures andstandardized countermeasures. We intend to continuously
upgrade our activities.

Discussion among members of
Plant Response Headquarters

Disaster Prevention Structure
We have been reinforcing our disaster prevention structure
to enable smooth transition from the initial response stage tothe production restoration stage.
The Disaster Prevention Response Headquarters, led by
the executive vice president and consisting ofrepresentatives from the functional departments at the Head
Office, is responsible for collecting information from plants
and other relevant parties and making Company-widedecisions based on the information collected.

Identifying inadequacies anditems to be improvedb) Tabletop Exercise
We provide training to the head (plant manager) andmembers of each Plant Response Headquarters to ensurethat we promptly make an initial response and offer support
to local communities in case of a disaster. Since fiscal 2015,
in addition to drills for enabling quick disaster response, wehave been holding discussion sessions on the theme of“thinking on your own” to raise awareness of each member
for disaster prevention.

n Disaster Prevention Structure
Disaster Prevention Response Headquarters (Established in Kariya Plant)
Plant Response
Headquarters
Kariya Plant
Obu Plant
Kyowa Plant
Nagakusa Plant &Morioka Works
Takahama Plant
Hekinan Plant
Higashichita Plant
Higashiura Plant
Anjo Plant

Key Facility
e-Lab (information
systems headquarters)

Remote Sites

Educational Sites
Company dormitories
Company resort
facilities

Affiliated Companies

Suppliers

Tokyo Office
Toyota L&F Customers
Center (Chiba)
TMHG Training Center(Handa)Efforts to Cultivate Human Resources
through Training
1. Training at Disaster Prevention Response
Headquarters 
We conduct simulation training in which employees collectinformation on damages to both inside and outside thecompany premises, swiftly make decisions and disseminate
these decisions throughout Toyota Industries.
Since fiscal 2015, assuming the occurrence of a disaster
during nighttime and on a weekend or holiday, we havebeen providing training to members selected from thefunctional departments who live close to the Head Office.

Response to Possible Major Earthquake
We consider the occurrence of a major earthquake as oneof the most significant risks. Since fiscal 2011, we havebeen implementing disaster prevention measures that focus
on three basic policies, namely placing maximum priority on
human life; placing top priority on the recovery of local
communities; and ensuring the quickest possible recovery.

Headquarters discussed the preparation status andinadequacies of items in the standard response procedures
formulated by each plant and worked to improve theprocedures to better respond to a disaster.

Reviewing policies on resumption ofoperations and how to return home

Disaster response meeting

2. Training at Plant Response Headquarters a) Workshops
In fiscal 2016, members of the Plant Response

Checking internal disasterdamage information

Confirming how to decide toresume operations

3. Training for Restoration a) Power Restoration Drill
Each plant has developed procedures to restore power
supplies, including electricity and gas, which are essential inrestoring production activities. Starting from fiscal 2015,
each plant conducts genchi genbutsu training on a periodic
basis. Through the training we are identifying problems andmaking improvements to step up our efforts to ensure quick
restoration activities. In fiscal 2016, we selected a modelbusiness division andstandardized measures.
We will consider theapplication of the initiatives
taken at the modelbusiness division
throughout the company.
Drill to restore a primary power sourceb) System Restoration Drill
The e-Lab, responsible for managing Toyota Industries’ dataservers, has created procedures to restore critical data aftera disaster. We conduct restoration drills jointly with Toyoda
High System, Incorporated, a consolidated subsidiaryengaged in development and operation of information
infrastructures and systems, and work to improve ourreadiness for quick restoration.
4. Training for Identifying Disaster Damage Starting from fiscal 2014, we repeatedly conduct drills jointlywith our affiliated companies and suppliers in order tofamiliarize them with the use of IT tools to quickly identify thedamage status during a disaster.

21

Special Feature

1

At the Frontline of Logistics, Keeping Customers in Mind andUtilizing Cutting-Edge Technologies

Materials Handling Equipment Business of
Toyota Industries Supporting Customers’
Logistics
As development and growth of the world economy generate greater movements of goods, their smooth flow underpins thefoundation of society, enriching people’s lives. As a leading company in the field of lift trucks and other materials handlingequipment that are essential in logistics operations, we leverage our comprehensive logistics-related strengths and provide
optimal logistics solutions. In this way, we are contributing to the development of society through logistics by serving
customers’ diverse needs and always remaining the best partner of customers.

Responding to Changes in the Environment
Surrounding Logistics by Leveraging the Strengthsof Our Materials Handling Equipment Businessn Strengths of Toyota Industries’ Materials Handling Equipment Business

Global share of lift trucks (Survey by Toyota Industries Corporation)

No. 1 for 16 consecutive years 21%

The world’s rising population and economic growth driven
by emerging countries have led to an increase in logistics
volume, and consequently, an expansion of the lift truck
market. At the same time, increasing e-commercetransactions have necessitated larger logistics sites andeven more efficient logistics operations. Moreover, therecent advancement in information and communications
technology (ICT) has created diverse applications forlogistics sites. These factors have triggered significant
changes in the environment surrounding logistics. As an
industry leader, we strive to accurately respond to thesechanges and work closely with customers to satisfy theirindividual needs.
Toyota Industries’ Materials Handling Equipment
Business has total strengths covering both “hardware” and“software.” Besides providing a broad lineup of products,
including high-performance lift trucks with superior
economic efficiency, we have extensive, global sales andservice networks, knowledgeable and skilled service
technicians, as well as the ability to offer solutions for asafe, secure and efficient logistics environment.
This special feature presents two case studies in which
we showcase our excellent services that assist a customer
in building a logistics environment and our advanced
technologies that help another customer to improvelogistics efficiency.

(2015)

Global unit sales of Toyota Industries’ materials handlingequipment in fiscal 2016

239,000 units
Highly skilled andknowledgeable service
technicians to support
customers in each region

Numerous service facilities
to swiftly respond to
customers’ needs

n Japann Japan

3,000 persons
n North America

270 locationsn North America

5,300 persons
n Europe

320 locations
n Europe

4,500 persons

350 locations

Unit Sales of Toyota Industries’ Materials Handling Equipment Serving Global Logistics Needs(Thousand units)

200
100

0 (FY)

10

11

12

Levio P-series [BT]

13

14

15

16

GENEO-Ecore [TOYOTA]

B315 [CESAB]

GENEO [TOYOTA]
Toyota Industries engages in business under the TOYOTA, BT, RAYMOND and CESAB brands.

22

Toyota Industries Report 2016

Reflex [BT]GENEO-R [TOYOTA]

8000 Series [RAYMOND]

23

Albert Heijn
Albert Heijn is the largest supermarket chain in the
Netherlands, with 900 stores nationwide and more than
100,000 employees. The company is a subsidiary of Royal
Ahold N.V., for which consolidated net sales exceeded €38
billion in 2015. TMHE has been providing electric lift trucks,
racks and after-sales services to Albert Heijn’s stores anddistribution centers, thereby contributing to realizing efficientlogistics operations.

Yonago Mokuzai Ichiba Co., Ltd.
Yonago Mokuzai Ichiba hosts a semimonthly wood auction
market in a mountainous area approximately an hour’s drivefrom the center of Yonago City, Tottori Prefecture. Toyota
Industries’ lift trucks are used for sorting logs gathered forthe auction and loading them onto trucks.

CASE STUDY 1

CASE STUDY 2

Thorough After-Sales Services toContribute to the Creation of a Safe andAssured Logistics Environment
While developing its business globally, TMHJ provides
extensive support to customers in Japan through an
industry-leading nationwide service network, with highly
skilled and knowledgeable service technicians. We aim to
not only achieve an even higher level of after-sales
services through such means as Service Skills Contests
but also meet the diverse requests of customers byproviding safety training and other support.

Supporting Customers Even in a Remote andHarsh Working Environment
At wood auctions held in a mountainous area, lift trucks
work at full capacity to carry 2,000 tons of logs from dawn
until dusk. In winter, sometimes having to deal with morethan one meter of snow makes for a harsh environment.
Therefore, one of the crucial issues for Yonago Mokuzai
Ichiba had been whether they could receive maintenanceservices at any time in order to ensure the continued
operation of lift trucks.
TMHJ leverages a pool of resources, including anationwide network, service technicians and field service
vehicles, to respond to customers’ needs in a wellexecuted manner. Service technicians of the Yonago Sales
Branch of TOYOTA L&F Okayama Co., Ltd. visit Yonago
Mokuzai Ichiba and maintain their lift trucks about threetimes a month to prevent troubles before they occur. Suchassured maintenance services allow the customer tooperate lift trucks safely in good condition even in aremote area.

Providing services at Yonago Mokuzai Ichiba Co., Ltd.

24

Toyota Industries Report 2016

Toyota L&F/Toyota Material Handling Japan(TMHJ)
TMHJ has nationwide sales and service networks,
supporting and delivering safety and security tocustomers across Japan with 3,000 highly skilled andknowledgeable service technicians and 1,500 field
service vehicles.

Customer Voice
Toyota Industries’ lift trucks areboth powerful and fuel efficientand generate less emissions. Ouroperators also appreciate thevehicles’ good forward view andease of getting on and off. We
operate in a mountainous area ina harsh climate far from theHiroaki Nagata
central urban area, so how
Senior Managing Director
Yonago Mokuzai Ichiba Co., Ltd.
quickly we can receive support incase of vehicle trouble is very
important. We find it very helpful that if we have a problem,
TOYOTA L&F Okayama staff will come to us in an hour andprovide on-site support. In addition, regular maintenancevisits for checkups and guidance for safe operations also
provide a sense of security.

Swift Response Underpinning Daily
Logistics Operations
Lift trucks operating at logistics sites are closely linked tocustomers’ production activities. As such, it is crucial that they
always remain available in optimal condition. Also, service
technicians play an extremely important role, as our relationshipwith customers continues long after they select and purchase
our lift trucks. Since the condition of lift trucks also depends on
how operators use them, service technicians monitor the usage
status of individual customers and offer proper care to ensure
the safety of operations, while deepening communications withthem so that they fully understand issues such as what carehas been taken, what has caused a breakdown and how toprevent a recurrence.
We will continue to contribute to the creation of a better
logistics environment for customers by not only developing
products meeting diverse needs but also providing responsive
services through our global support structure.

Leveraging Advanced Technologies for
Efficient Logistics Operations
In recent years, ICT has evolved in a remarkable way andbrought a significant change in corporate activities as wellas people’s daily lives. Toyota Industries combines its
expertise accumulated in various logistics sites with
cutting-edge ICT to offer a fleet management system that
supports the establishment of an efficient logistics site forcustomers mainly in Europe and the United States. In the
future, we intend to extend the services to Japan and otherregions to contribute to improving the logistics efficiency
of more customers.

Solving Issues Inherent toManaging a Large Fleet
Toyota I_Site

In dealing with the growing numberof stores and commodities, Albert
Heijn has added and expanded its
distribution centers while seeking
and introducing logistics equipmentthat can maximize operational
Toyota I_Site’s verification systemefficiency. During this time TMHE
has provided support to the company in order to ensure
the continuity of logistics operations by performing asystematic checkup of each lift truck and providing
forward-thinking after-sales services while reducing costs
even after the fleet has grown to more than 1,500 units.
The growing fleet, on the other hand, has raised several
issues. One was that many lift trucks running around thevast space of a distribution center made fleet management
difficult. Another issue involved an increase in the numberof inexperienced operators and subsequent rises in
accidents and repair costs. To counter the situation, TMHE

TMHE’s Toyota I_Site is a solution based on the latest ICT to enableeasier fleet management by customers. It visualizes on a tablet device
the status of each lift truck, including the utilization rate and battery
consumption, to eliminate muda (wastes) and ensure more efficient
fleet operation. Moreover, it offers a feature to preregister operators,
a function to perform a pre-operational safety check and a system todetect accidents. These features make Toyota I_Site effective insupporting the operational safety of the logistics site and reducing
accident-related costs.

Toyota Material Handling Europe (TMHE)TMHE has Europe-wide sales and service networks,
supporting customers with 4,500 experienced service
technicians and 3,300 field service vehicles. In the
Netherlands, TMHE operates an extensive service
structure to quickly respond to customers’ requests.

proposed introducing the Toyota I_Site fleet management
system.
Customer VoiceThe introduction of Toyota I_Site
in 2014 has yielded a favorable
outcome beyond our
expectations.
Firstly, the system offers afeature to check the impact andlevel of each minor collision on atablet device from anywhere andDirk-Jan van Lienden
monitor the operational status in
Supervisor at Albert Heijn supply
chain
real time. This allows us toAlbert Heijn
improve fleet management andsuccessfully reduce costs.
Another benefit is an improvement both in terms of safety
and the working environment in how operators drive lift
trucks. A function that requires operators to perform a
pre-operational safety check has served to raise their safety
awareness and resulted in a major decrease in accidents andassociated damage to lift trucks. A screen that shows theoperational status of a lift truck while in operation has also
improved operators’ awareness toward appropriate andeco-friendly handling of lift trucks.
Toyota I_Site has provided many benefits, and we are
truly glad to have introduced the system.

For Building an Even More Efficient
Logistics Site
After the introduction of Toyota I_Site, Albert Heijn has beenable to make its logistics site safer and attain a considerable
reduction in costs that had been required for repairingdamaged lift trucks and infrastructure. The company was very
pleased with the results and consigns the management of theentire fleet of its lift trucks to TMHE. Looking ahead, TMHE willcontinue to provide training on safe operations and conduct
analysis of collected data to make recommendations for evenmore efficient logistics equipment and operations. By doing so,
TMHE will work to bring about a further improvement in thecustomer’s logistics operations.

25

Special Feature2

Development and Production Efforts to Generate Greater
Cross-Business Synergies

Leveraging Strengths in Engaging in Diverse
Businesses to Raise the Competitiveness of Products
Capturing a World-Leading Market Share*
Toyota Industries engages in a diverse range of businesses, including car air-conditioning compressors, vehicles, engines,
electronics, materials handling equipment and textile machinery. While striving to develop and produce highly competitive
products in each business, we generate new added value and synergies through collaboration across business domains.
Such cross-business efforts have enabled us to garner the world’s No. 1 share for car air-conditioning compressors, lift trucks
and air-jet looms. We meet customers’ expectations with our diverse businesses and technologies.

Our Strengths in the Compressor Businessn Global Automobile Market Forecast (Based on Production)
Gasoline vehicles/diesel vehicles(Thousand units)

HVs/EVs/FCVs

120,000

Toyota Industries’ car air-conditioning compressors have earned ahigh level of trust from our customers, namely the world’s leading
automakers, for their superior fuel efficiency and stable quality, andhave captured the No. 1 share in global unit sales. In addition to car
air-conditioning compressors for conventional vehicles, needs forelectric compressors for hybrid vehicles (HVs), plug-in hybrid
vehicles (PHVs), electric vehicles (EVs) and fuel cell vehicles (FCVs)
have recently been growing in step with advances in theelectrification of vehicles.

100,000
80,00060,00040,00020,0000(Year) 10

11

12

13

14

15

16

17

18

19

20

21

22

23

Source: February 2016 data, IHS database* Survey by Toyota Industries Corporation

Overwhelming Competitiveness of Electric Car Air-Conditioning Compressor Created through Cross-Business Synergies
Since we developed the world’s firstmass-produced electric car airconditioning compressor (electricMaterials Handling
Equipment

Textile Machinery
Electronics

compressor) in 2003, we have always
remained at the forefront of the global
electric compressor industry. In themeantime, we have developed more
efficient, quieter and more compact
compressors and greatly contributed tothe improvement of automobiles’ fuelefficiency and interior comfort. The
Compressor Division and Electronics
Division collaborated early on from theinitial development stage in thedevelopment of a new electriccompressor, as it needed an inverter
that performs drive control of its internal
motor.
The resulting compressor, the ESB20
mounted in the new Prius released by
Toyota Motor Corporation (TMC) in
December 2015, is a culmination of ourcollaborative efforts across businessdomains, and its performance and quality
are already receiving high acclaim.

ESB20 electric compressor mounted in the new Prius

VehicleCar Air-Conditioning
Compressor

EngineInverter, a Key Component to Control an Electric Compressor

Automobile

Compressors for conventional vehicles use power fed from the vehicle’s engine to run the air
conditioner. In HVs and other similar vehicles, these compressors cannot operate the air conditioner
when the vehicle uses eco-friendly features that stop the engine, such as an idling stop system andelectric drive mode. Electric compressors, on the other hand, are driven by a motor that uses powerfrom the vehicle’s main battery and can run the air conditioner even when the engine is not operating.
An inverter is a key component that performs drive control of this motor. It enables the operation of
the air conditioner during an idling stop in traffic congestion or when the vehicle runs in electric drivemode, helping to ensure a more comfortable vehicle interior and better fuel economy at the same time.

The World’s No. 1 Share Products
Car Air-Conditioning Compressors

Lift Trucks

Air-Jet Looms

Toyota Industries’ car air-conditioning compressors
are highly acclaimed in terms of their reliability athigh operating speeds and quiet operation in addition
to such excellent environmental performance features
as compactness, lighter weight and fuel efficiency,
and have been adopted by the world’s leading
automakers.

Toyota Industries contributes to the optimization ofcustomers’ logistics operations mainly by providing abroad lineup of high-quality lift trucks and throughvarious logistics solutions.

Backed by fully integrated operations fromdevelopment and production to sales and after-sales
services, Toyota Industries’ air-jet looms have won
extensive acclaim from customers around the globe
thanks to superb reliability and high productivity.

n Honing Technological Capability by Developing
Products for TMC, External Sales and In-House Use
External sales

For in-houseuse

Inverters for electriccompressors
Toyota Industries Report 2016

Electricity(DC)Electricity
(AC)

Motor

Compressor(to compress refrigerant)

Generates
magnetic energy

Drivesthecompressor

Electronics Business Supporting Our Global Top-Share Products

Charging stands
for PHVs and EVs

Electronics
Business

26

Inverter(DC to AC)

For TMC

Toyota Industries’ Electronics Businessprovides DC-DC converters, AC
inverters, rear inverters for four-wheel
drive (4WD), cooling devices, on-board
chargers, charging stands and other car
electronics products to TMC. Based on
the experience we have gained in
responding to TMC’s stringent demandfor higher quality and selling products to
many automakers in addition to TMC,

we utilize accumulated technologies andexpertise in our products developed
in-house, including electric compressors.
We aim to enhance our total
strengths and the competitiveness of
our products that capture the world’s
No. 1 share in their respective markets
by refining our proprietary technologicalcapability and leveraging synergies
across business domains.

DC-DC converters

27

Discussion

Special Feature

Project Members Talk about the
Outcome of Collaboration between
the Compressor Business andElectronics Business

Product planning
Conventional
systemInverter

Existing model

ESB20

n Cooling Capacity

n Compressor Noisen Power Consumptionn Inverter’s Volume

(%)
150

(%)
150

(%)
150

(%)
150

100

100

New Development and Production System Adding
Greater Value to the Collaboration Outcome

8%

30%

reductionhigher

Good

50

0

28

Existing model

Toyota Industries Report 2016

ESB20

performance. Electronic circuits
and components of an inverter
generate heat when electricity
flows through them. Reducing
the size of an inverter makes it
difficult to secure enough surface
area needed to release that heat.
The new cooling structure that
Takeshi Harasawa
Assistant General Manager,
has been developed is the result
Engineering Dept.
of true synergy between the two
Electronics Div.
divisions.” Koide adds: “Thealuminum die-cast base of the inverter was designed by theCompressor Division. Because its thickness and shapedetermine the cooling performance of the compressor, theElectronics Division utilized its thermal simulation technology toidentify the optimum shape under various design restrictions
and succeeded in securing the required cooling performance.”
As a compressor is mounted near the engine, an inverter
integrated into the compressor is required to be heat- andvibration-resistant. Electronic components, in general, are rarely
used in such harsh conditions, but the close collaboration of
the two divisions made successful development of such an
inverter possible.
The resulting ESB20 achieves a 30% higher cooling
capacity, 30% reduction in compressor noise, and throughimproved efficiency, 8%*2 less power consumption. A 30%
reduction in the inverter’s volume also allows easier vehicle
mounting. The ESB20 has been mounted in the new Prius asan electric compressor boasting the world’s leading
performance.
*1: A system to aid in product development using computers in the areas of design andnumerical analyses*2: Results of measurements under year-round use conditions

30%

50

0

reduction

100
Good

Existing model

ESB20

30%

100

reduction

Good
50

0

50

Existing model

ESB20

Process design

Production

Production
preparation

Production

Process design

Production

Production preparation

Tatsuya Koide
ESB20 electric compressor

Product
planning

Compressor
Div.

InverterGroup manager, Engineering Dept.
Compressor Div.

Product design

Production
preparation

Product designNewsystemIn order to both improve performance and make components
more compact, efforts had to be made in various aspects. One
is finding the best structure-performance balance in a scroll,which compresses refrigerant, and such key components as aninverter, which controls the motor that rotates the scroll, as wellas in the shape of the compressor itself. Another is seeking
total optimization in the resulting electric compressor.
Koide explains: “To make the compressor fit more easily inthe narrow engine room, we first moved the inverter, which waspreviously positioned on top of the compressor, to the rear endof the compressor. We also made the shape of the compressor
cylindrical by eliminating surface irregularities as much as
possible. We selected a thin cylindrical shape for the inverter so
as not to add much to the compressor’s total length andneeded to integrate all its functions into this small space. The
compressor team and the inverter team worked together andfound the optimum solution by utilizing computer aided
engineering (CAE) analysis*1 on the structural design and thecooling performance design.”
Takeshi Harasawa of the Electronics Division observes: “Forthis inverter, we needed to reduce its size and house everything
in the cylinder while at the same time ensuring the ease of
production. So, we totally revamped the size and layout of thecomponents. One of the most significant results of ourcollaboration was a method to ensure solid cooling

Inverter for electriccompressors

Product
planning

DesignSimultaneous planning of design
and production through thecollaboration of the two divisions

Positive Outcome Derived from Collaboration by
Surmounting Development Challenges

In developing the ESB20, one of the tasks assigned to theproject team was to contribute to achieving the world’s highestlevel fuel economy and interior comfort in the new Prius.
Higher performance was thus required in every aspect of thecompressor, such as raising the air-conditioning function
without increasing its volume, making it quieter, improving its
vibration resistance and reducing power consumption. “At thesame time, we had to think about future models to be derived
from the ESB20 and ensure their easier development andproduction through the use of a common structure andproduction method,” notes Tatsuya Koide of the Compressor
Division.
To achieve these goals, a higher level of collaboration andgreater synergies were called for
between the Compressor Divisionand the Electronics Division, whichis in charge of development andproduction of inverters, duringconcept formulation in the initialdevelopment stage.

Leveraging Strengths in Engaging in Diverse Businesses to Raise theCompetitiveness of Products Capturing a World-Leading Market Sharen New Development and Production System for Generating Synergies

The ESB20 electric compressor, which is mounted in the new Prius to contribute tohigher environmental performance and vehicle comfort, integrates synergies
between the Compressor Division and Electronics Division from productdevelopment to production and quality assurance. In this section, project members
from these two divisions talk about the outcome of their collaboration.

Challenges Faced with the Development of the
ESB20 Electric Compressor

20Existing model

Good

Upon the development and production of the ESB20, we
exercised our ingenuity in each stage from design to production
preparation. Conventionally, we begin with product planningand then proceed to product design, process design and finallyto production preparation. This time, we conducted productdesign, process design and production preparation

Electronics
Div.

concurrently, sharing thesimultaneous engineering
approach between the twodivisions to pursue higher quality,
lower costs and ease of
production for the product. The
two divisions were mutuallyinspired by sharing knowledge
Inverter production line
and ideas with each other while
promoting the project. “Continuously stable production of aquality product is difficult to manage and maintain. With thedesign team, we shared information from the product design
stage on hundreds of issues that could occur in the mass
production stage. Based on theinformation, the design teamworked to modularize*3
components and simplify theirstructures,” explains Daisuke
Katayama of the Electronics
Division, who is well-versed incompressors and was in charge
Daisuke Katayama
of production engineering of theAssistant manager,
Production Engineering Dept.
inverter. Energetic discussions
Electronics Div.
among project members led tothe completion of a new, simple,
compact and highly efficient production line. The new line will
make adding variations to the ESB20 easy and allow mixed
production of these models at a consistently high quality level.
*3: A group of functionally associated components forming one larger functional component

Continued Cross-Business Collaboration to Enhance
Synergistic Effects and Increase Product Appeal
At Toyota Industries, personal exchanges across different
business domains have always been active, and our strengths
stem from a corporate culture that proactively encourages
cross-business collaboration. This time, the Compressor andElectronics divisions started working together from the concept
development stage of the ESB20, which enabled the manufacture of a product that meets ambitious goals. We will continue
to leverage the synergies from cross-business collaboration
with a view to further increasing our competitive edge anddelivering products needed by customers around the world.

ESB20

29

Business Activities
Materials Handling Equipment / Logistics
Materials Handling Equipment
Logistics

P30−36
P30−35
P36

Automobile

P37–42

Vehicle / Engine / Car Air-Conditioning Compressor / Car Electronics

Textile Machinery

P43

Materials Handling Equipment

Global Business Development Led by Toyota
Material Handling Group (TMHG)

Business Activities in Fiscal 2016

As a market leader with extensive knowledge ofglobal logistics needs, Toyota Industries provides
a range of materials handling equipment, mainly
lift trucks, and logistics solutions to customers.

Business Overview in Fiscal 2016
In the materials handling equipment market, an increasein sales in Europe, North America and Japan
compensated for weaker sales in China and drove
continued growth globally. Based on the conditions ofrespective markets, Toyota Industries augmented its
production and sales activities and launched new
products. As a result, unit sales of our mainstay lift trucks
for fiscal 2016 increased 17,000 units, or 7%, to a total of
239,000 units over the previous fiscal year. Also, in a bid
to expand our business domains, we acquired the lift
truck business of Taiwan-based Tailift Co., Ltd. and thesales financing operations for materials handlingequipment in the United States. Consequently, net sales
increased ¥79.2 billion, or 9%, to ¥1,004.1 billion.

The lift truck market in 2015 sustained growth primarily indeveloped countries. Amid this environment, we carried out
sales expansion activities for remodeled internal-combustion
lift trucks and electric lift trucks, while offering solutions
designed to achieve greater logistics efficiencies, enhancing
responsiveness to large-order customers and ensuring
reliable after-sales services.
To increase our presence in emerging countries, we
acquired the lift truck business of Taiwan-based Tailift Co.,
Ltd. in August 2015. Capitalizing on Tailift’s strengths, we
aim to expand sales in emerging countries where market
expansion is expected over the medium to long term.

n Toyota Industries’ Global
Lift Truck Market ShareJapan

ToyotaIndustries

North America

Europe21%(Thousand units)

250
China

ALOMA*2

150
100
50
0

30

*2: ALOMA stands for Asia, Latin America, Oceania, Middle East and Africa.
(FY)

12

Toyota Industries Report 2016

13

14

15

16

*3: Surveys by Japan Industrial Vehicles Association and Toyota Industries Corporation,
2015

New GENEO-Ecore electric lift truck (released in October 2015)(Survey by Toyota Industries
Corporation, 2015)

Top: Region Bottom: Brand

Materials Handling Equipment Sales

200

In Japan, growing environmental consciousness has
triggered a drastic change in the lift truck market. Based on
the keywords of 3Es (Energy, Environmental protection and
Ecological thinking), we promoted sales of the new GENEO
internal-combustion lift trucks equipped with our own
engines with greater environmental performance. We also
introduced the remodeled GENEO-Ecore compact electric
lift truck fitted with our originally developed highly efficientAC motor that significantly reduces overall power
consumption. Through these efforts, we offer products
precisely matched to customers’ needs. As a result, unit
sales in fiscal 2016 increased 4% year-on-year to 40,000
units. Toyota Industries achieved a share of 46.8% in theJapanese market and maintained its top position*3 for the50th consecutive year.

platform*1: Survey by Aichi Corporationn Toyota Material Handling Group Brands

No. 1 Market Share in Lift Truck Unit Sales forthe 50th Consecutive Year

Materials Handling Equipment / Logistics

As a market leader in the materials handling equipment andlogistics fields, Toyota Industries assists customers
worldwide in attaining greater logistics efficiencies by
delivering logistics solutions optimally tailored to their
specific needs.
Under the TMHG management structure, we engage inbusiness under the TOYOTA, BT, RAYMOND and CESAB
brands. Mutually utilizing the sales and development
strengths of each brand, TMHG is promoting businessexpansion on a global scale.

Japanese Market

Business Activities

Materials Handling
Equipment / Logistics

Toyota Industries Commercial Finance, Inc. (TICF), which
was established in the United States with the aim ofstrengthening our sales financing operations for materials
handling equipment, commenced operations in October
2015. In order to respond to customers’ needs for the lease
and rental of materials handling equipment, TICF will strive
to strengthen its value chain, from sales of new equipment
to maintenance services during the lease period and sales ofused equipment after the expiration of the lease contract.
We plan to extend our reach to Europe, Asia and otherregions and reinforce our sales financing operations on a
global scale.
As for the Logistics Solutions Business, which isrepresented by automated storage and retrieval systems
and automatic guided vehicle systems, we are working tomeet a wide range of needs by providing consulting services
for customers’ logistics-related issues as well as assistingthem with installation and operation of equipment. In the
e-commerce industry, which has been growing in recent
years, we have been proactively making various proposals
and successfully acquiring new orders.
In the field of aerial work platforms, sales of Aichi
Corporation, which possesses the top brand*1 in this field inJapan, were negatively affected by a cutback in capital
investment by the telecommunication industry. On the other
hand, sales grew in line with rises in demand for the
replacement of aging facilities in theelectric power industry, demand forconstruction and such social
infrastructure work as tunnel andbridge inspections in the leasing
industry as well as demand formechanization in the railway industry.
Thus, overall sales of aerial work
platforms increased, and Aichi posted
sales exceeding the previous fiscal
year’s level.
Aichi Corporation’s aerial work

Promoting Feasibility Test of Fuel Cell (FC)Lift Truck
Since October 2015, Toyota Industries has been conducting
a feasibility test of its FC lift truck in a local wholesale market
under a project hosted by Shunan City, Yamaguchi
Prefecture. The test verifies the FC lift truck’s ability toachieve “Well to Wheel*4” CO2 emissions reduction underusage conditions that differ from factories and airports and a
degree of operational improvement resulting from its use.
We have also been engaging in a feasibility test of our FC lift
truck in the international cargo area of Kansai International
Airport since February 2015 and added two new practicaluse models for the test in 2016. The models are equippedwith an FC system newly and specifically developed for lift31

trucks, which uses the same fuel cell used in the MIRAI fuelcell vehicle released by Toyota Motor Corporation (TMC).
We plan for possible release of this FC lift truck during
fiscal 2017.
*4: From extraction of fuel raw materials to operation of lift trucks

approximately 86,000 units, up 16% from the previous
fiscal year.
Toyota, as a full-line supplier of lift trucks, remained themarket share leader*5 for the 14th consecutive year, andRaymond continued to hold its number one*5 market shareposition in narrow aisle electric lift trucks.

Expanding Product Lineup and Strengthening
Brand Appeal
Toyota expanded its product offering with the launch of fiveelectric lift trucks and one internal-combustion lift truck. In
response to high levels of needs for logistics solutions,Toyota released into the market the newly developed
T-Matics vehicle management system. T-Matics helps
increase efficiency and uptime by allowing operators toeasily track current usages and use collected data.

In fiscal 2016, Toyota celebrated 25 years of manufacturinglift trucks in North America. Throughout these years, Toyota
has been committed to manufacturing operations with anemphasis on quality to satisfy our customers and received anumber of awards, including 2015 Supplier of the Year from
United Rentals, Inc., the largest equipment company in theworld, in recognition of its product and service quality. On
another front, Toyota consolidated the manufacturing andsupport functions into one large space. The project isdesigned to enhance communication between employees
and repurpose factory floor space for improved
manufacturing processes.

Initiative to Achieve Greater Customer
Satisfaction
To further upgrade services to customers, we held the 4thService Skills Contest in November 2015, in which a service
representative from the 40 dealers across Japan
participated. Through this contest, we aim to improve ourservicing capabilities and raise awareness among service
staff in order to provide services that bring even greater
satisfaction to customers.

T-Matics vehicle management system

Raymond introduced models that improve operations
efficiency and energy-saving performance. They include theRaymond Model 6210 Walkie Straddle Stacker, which stores
pallets up to three levels high, and the Raymond Model
7310 Reach-Fork truck with unique four-directional travel
capabilities. Both models contribute to greater efficiency incustomer operations and work space. The Raymond Model
8210 Walkie Pallet Truck enables use in wider applications
thanks to dust- and water-proof protection of electronic
devices.

2015 Supplier of the Year awarded by United Rentals, Inc.

While working to raise product quality, Raymond has
been carrying out various improvement activities at its
production site and headquarters. Prime examples include
the reconfiguration of manufacturing space and the upgradeof its warehouse management software by applying the
Toyota Production System (TPS).

Service Skills Contest

Further Solidifying Our Leadership Position

North American Market

The North American lift truck market is expected to show
continued growth in 2016. Toyota and Raymond willcontinue to provide innovative products, excellent customer
service and solutions to our customers while focusing on theareas of automation, telematics and others. Through these
initiatives, we aim to further solidify our leadership position.

Maintaining Top Market ShareIn the expanding North American lift truck market, Toyota
Industries remained the market share leader*5 in 2015 withcombined unit sales of TOYOTA and RAYMOND brands of32

Toyota Industries Report 2016

Capturing Favorable Market Conditions to
Expand Unit Sales
Except for Russia and some other countries, European
economies in fiscal 2016 registered mild growth, and the lift
truck market expanded from the previous year. Amid these
conditions, Toyota Industries posted sales of 75,000 units,
up 9% from the previous fiscal year.

Continuing to Offer Attractive Products andLogistics Solutions
Toyota Industries proactively launched a series of new
products to meet various customer needs. In fiscal 2016,
we introduced the BT Staxio P-series, which helps alleviate
the burden on operators arising from long transportdistances within large distribution centers. The series
includes 11 platform stackers offering the right model foreach application.
The new electriccounterbalanced
lift truck Toyota
Traigo 48 was also
introduced,
offering classleading energy
efficiency while
being highly
productive in
limited spaces andfeaturing a shorter
turning radius tocontribute toraising customers’
logistics
Toyota Traigo 48 electric lift truck
efficiencies.
In addition to low lift trucks, the lithium-ion range ofelectric lift trucks was expanded to include reach lift trucks
and towing tractors. Lift trucks with lithium-ion batteries are
30% more energy-efficient than lead-acid batteries,
significantly reducing CO2 emissions as well as energy
costs. Besides offering new products, we proactively makelogistics solutions proposals, such as the introduction offleet management systems, thereby contributing to more
efficient overall logistics of customers.

Materials Handling Equipment / Logistics

FC lift truck

Reinforcing Quality and Production Functions

European Market

Business Activities*5: Survey by Crist Information & Research, LLC, 2015

In addition, both Toyota and Raymond implemented a
new marketing strategy to strengthen their respective
brands, including re-designed websites and new sales andmarketing materials.

Raymond 7310 Reach-Fork truck

33

Sales Promotion Initiatives

Engaging in Sales Expansion Activities amid
Slowing Markets
Toyota Industries covers the ALOMA markets of Asia, Latin
America, Oceania, the Middle East and Africa as well as the
Chinese market. We are serving these markets with a lineup
consisting of TOYOTA, BT and RAYMOND brands.
In 2015, the market uptrend enjoyed during recent years
took a downturn, resulting in stagnation in both markets.
Amid this market condition, unit sales decreased 9%compared with the previous fiscal year to 38,000 units.
Increased efforts for sales expansion, however, have beensuccessful in keeping market share virtually unchanged.

TOPICS
Distributor Conference
The Distributor Conference held in Nagoya, Japan, in
April 2015 was attended by 146 representatives
from Toyota, BT and Raymond distributors/dealers
spanning 46 countries. The conference included theconfirmation of the medium- to long-term vision andspecific action plans, and a common approach for
future directions was confirmed. Also on the agenda
was the awards ceremony for the 2014 Distributor
Award Program. During the conference, participants
pledged to work harder to achieve objectives basedon the slogan “Lift Beyond Together.”*A LOMA is a Toyota Industries term for Asia, Latin America, Oceania, Middle East andAfrica.

In October 2015, the used trading facility in Antwerp,
Belgium, was opened. Dealers from all over the world havethe opportunity to buy used Toyota lift trucks from one single
source from wide product offerings. In Germany, an online
shop was launched as a new sales channel, which raises
customer convenience by enabling quick order placement of
spare parts, and already indicates incremental business
opportunities.

Toyota Material Handling India Pvt. Ltd. is working tostrengthen its sales network in India. In 2015, a new sales
office and parts warehouse were opened in Gujarat toimprove its customer service capabilities. Parts warehouses
were also opened in Chennai and Pune to be closer tocustomers and deliver parts more quickly.
Toyota Material Handling Australia Pty Limited (TMHA)
covers the entire Australian region with fully captive sales,
service and rental finance service branch operations offering
TOYOTA, BT and RAYMOND brands. Through these efforts,
TMHA expanded unit sales, although the market showedsigns of a decline in 2015. TMHA will continually enhancesales activities to further meet customers’ needs.

Dealer Convention in Buenos Aires

In Singapore, Toyota Material Handling Marketing Asia
Pacific Pte. Ltd. (TMHMAP) was established in 2015 andreplaced the previous Asia Regional Office in Singapore tostrengthen the relationship with distributors in the Asia andPacific region. TMHMAP continuously works closely with
distributors in an effort to raise its responsiveness in terms ofsales and after-sales services and to meet customer
expectations.
In China, amid rising needs for electric lift trucks, we
worked to strengthen the sales structure of electric lift trucks
at Toyota Material Handling (Shanghai) Co., Ltd. and further
reinforce the sales and service networks in principal regions.
We are also promoting cooperation with Tailift, whichbecame a subsidiary of the Toyota Industries Group in
August 2015, and considering strategies to createsynergies.

Continuing to Accurately Meet Customer Needs
The lift truck market in Europe in 2016 is anticipated to beon par with 2015. Amid this backdrop, we will stay focusedand listen to customers. We will also continue investment in
R&D to offer products and logistics solutions that capture
market needs and contribute to improving customers’materials handling operations with the aim of becoming
No. 1 in Europe.

Distributor Conference

Regional Distributor Conferences for
Warehouse Trucks
From October to December 2015, we held Regional
Distributor Conferences for the ALOMA region witharound 50 participants from major distributors. The
events took place in Dubai, Jakarta and Santiago,
with a focus on the concept of “Increasing Sales of
Warehouse Trucks.” Presentations by successful
distributors confirmed the necessity of having
knowledge and functions in place such as proper
stock, leasing services and a strong service
organization.

Materials Handling Equipment / Logistics

Initiatives in Major Markets

Toyota Industries booth at CeMAT 2016

Business Activities

Each sales and marketing company in Europe actively
organized and participated in sales promotional events inthe market. In the Netherlands, we took part in Logistica,
the country’s largest trade fair held every three years, andwelcomed approximately 1,200 visitors at the booth where
we promoted our products and logistics solutions. In othercountries, we appealed product offerings by organizing acustomer event and other activities.
Prior to the upcoming CeMAT Fair, a press preview
conference was held in February 2016 in Hanover, Germany,
inviting 100 journalists from 22 European countries. Under
the theme for CeMAT 2016, “think CeMAT, think Toyota,” wehighlighted a wide range of product offerings and logistics
solutions as well as our dedicated initiatives to improve
quality.

ALOMA* and Chinese Markets

In Brazil, amid a slowing economic condition, Toyota
Material Handling Mercosur Indústria e Comércio deEquipamentos Ltda (TMHM) stepped up company-widesales expansion activities primarily in strategic areas whileworking to improve the local procurement ratio of parts forinternal-combustion lift trucks that TMHM manufactures.
In Argentina, TMHM held the annual Dealer Convention
in September 2015 in Buenos Aires. A total of 16 dealers
participated, including two newly assigned dealers from
Bolivia and Paraguay, and actively engaged in discussions
regarding sales policies and strategies in the region.

Providing Reliable Support to Customers’
Logistics Efficiencies

Participants of service skills contest in Australia

While 2015 showed a decrease in demand for lift trucks in
the ALOMA and Chinese markets, growth is expected toremain weak during 2016. Amid this prospect, we willcontinue to strive for providing reliable support to improvecustomers’ logistics efficiency by capturing the needs ofboth new and existing customers regardless of the market
situation.
Regional Distributor Conferences for Warehouse Trucks

34

Toyota Industries Report 201635

Automobile

Materials Handling
Equipment / Logistics
Logistics

Toyota Industries offers customers highly
advanced, efficient logistics services throughconsigned operation of distribution centers andland transportation services.

Both the logistics services business and the landtransportation services business for automotive parts
increased. However, as we sold our stakes in two
subsidiaries, one engaging in cash collection and delivery
and cash proceeds management services and the other indata storage, management, collection and delivery
services, net sales in fiscal 2016 declined ¥11.1 billion, or11%, from the previous fiscal year to ¥86.9 billion.

Planning, Design and Operation ofDistribution Centers
Toyota Industries operates distribution centers for various
industries and customers. During ﬁscal 2016, operation ofexisting distribution centers generated a relatively steadylogistics volume. In this environment, we strived tostrengthen our proﬁt structure through cost improvement
activities undertaken at logistics sites based on the thinking
embodied in TPS and simultaneously worked to enhance
the level of services to customers.
With an aim of optimizing logistics in each customer’s
entire supply chain, we continue our proactive sales
activities by making proposals that leverage the maximum
use of the Toyota Industries Group’s resources incollaboration with the Materials Handling Engineering
Business. In fiscal 2016, we started operating two additional
distribution centers for customers mainly in the medical andpharmaceutical industries. In total, we now operate 20
distribution centers under consignment.
Looking ahead, we will continue to facilitate ourproactive sales activities for both increasing orders fromexisting customers and acquiring new customers inindustries having high growth potential.

36

Toyota Industries Report 2016

VehicleTaikoh Transportation Group’s
land transportation services

Sale of Shares of Two Consolidated
Subsidiaries
We have been pushing for “concentration and selection” ofour operations to focus on businesses that are closely linked
to our core businesses in the materials handling equipment
and automobile-related fields. As part of this effort, we soldour stakes in two subsidiaries, Asahi Security Co., Ltd. andWanbishi Archives Co., Ltd., in December 2015. The former
was sold to SECOM Co., Ltd. and the latter to Nippon
Express Co., Ltd.
In addition to cash collection and delivery services
tailored to each customer’s specific needs, Asahi Security
offers comprehensive services that include management ofgift certificates and accounting operations at customers’
retail outlets. Furthermore, the company provides security
services integrating the monitoring by security devices anddispatch of security guards on a 24/7 basis. Wanbishi
Archives provides support to financial institutions andgovernment agencies to ensure the security and efficientuse of their information assets. Under its robust security
structure, Wanbishi Archives offers a comprehensive rangeof services covering the entire lifecycle of critical information
assets in electronic, paper or other forms, from storage andutilization to destruction.
Both companies have attained a certain level of growthby providing these value-added logistics services tocustomers and benefited from our support in achieving
operational improvements. Nevertheless, in order to makesignificant growth in the future, we believe that it will bebeneficial for them to work with companies that cangenerate greater business synergies. We decided to sell off
our stakes after holding discussions with both companies.

Business Overview in Fiscal 2016
In the automobile industry, market conditions weresluggish in Japan, Latin America and other emerging
countries but remained strong in North America.
Consequently, global sales were on par with the previous
year.
In fiscal 2016, unit sales of the Vitz (Yaris outside
Japan) and the RAV4 declined by 15,000 units, or 5%,
from the previous fiscal year to 293,000 units. However,various factors, including the addition of a hybrid versionof the RAV4, served to push up net sales by ¥21.0 billion,
or 5%, to ¥480.0 billion.

Development and Production of Plastic Glazing
Toyota Industries’ plastic glazing panoramic roof has beenused on TMC’s hybrid vehicle Prius a (Prius + in Europe andPrius v in North America). This product retains the beautiful
surface quality typical of a glass roof yet is approximately
40%* lighter than its glass counterpart, improving vehicle
fuel efficiency and thus contributing to the reduction of CO2
emissions.
Our plastic glazing rear and quarter windows have been
adopted on the 86 GRMN, a limited-edition model releasedby TMC in 2016, and have contributed to achieving a
reduction in weight and a lower center of gravity. Moreover,this rear window offers the world’s first defogger for a plastic
glazing product.
Toyota Industries will continue to develop attractive new
products that leverage the distinctive characteristics ofplastic glazing.
* Survey by Toyota Industries Corporation

Automobile* Starting from fiscal 2017, the business for planning, design and operation of distribution
centers will be classified into the Materials Handling Equipment Segment while thebusiness of land transportation services will be included in the Others Segment.

In the fields ranging from vehicle assembly toengines, car air-conditioning compressors and car
electronics, Toyota Industries continues to meetthe expectations and trust of its customers.

Materials Handling Equipment / Logistics

Business Overview in Fiscal 2016

The Taikoh Transportation Group provides landtransportation services under consignment from many
automotive parts manufacturers. The group collects finishedparts from manufacturers, compiles them by theirdestination and delivers to automakers “what is needed,when it is needed and in the quantity needed.”
During fiscal 2016, despite a slowdown in automobile
production in Japan, we acquired a steady logistics volume
in the transportation of automotive parts. Under thesecircumstances, we continued to conduct various profit
improvement activities, including the promotion of efficientcargo transport, while at the same time aggressively
undertaking activities to ensure safe and environmentconscious operations.
We will continue tofurther reinforce our sales
activities to capture newcustomers and, ultimately,
to expand business
operations.

Business Activities

from Toyota Motor Corporation (TMC) we have received anaward for excellence under the Toyota Quality Control Award
program for four consecutive years.
In October 2015, following a minor model change of the
RAV4 for markets outside Japan, we initiated production ofa hybrid model of the RAV4 in addition to the conventional
internal-combustion models. In the face of the shrinking
automobile market in Japan, we are further strengthening
our already superior level of safety, the environment, quality,
cost and delivery (SEQCD). We also are working to leverage
our ability to quickly start up production and a flexible
structure in terms of vehicle models and production volume
to contribute to production in Japan of Toyota vehicles.

Land Transportation Services

Highest-Level SEQCD to Contribute to
Production of Attractive Toyota Cars
In recognition of Toyota Industries’ comprehensive strengths
in vehicle quality, delivery, cost and safety as the highest
among all Toyota-affiliated automobile body manufacturers,

Plastic glazing rear window

Vehicle Sales(Thousand units)

350
300
250
200
150
100
50
0

Plastic glazing quarter window
(FY)

12

13

14

15

16

37

“Our Vitz and RAV4” Initiative for Enhancing
Appeal of the Two Car Models

Business Overview in Fiscal 2016
Despite the launch of production of GD diesel engines,
unit sales in fiscal 2016 declined 134,000 units, or 24%,from the previous fiscal year to 434,000 units. This decline
was mainly attributable to decreases in sales of KD diesel
engines and AR gasoline engines. Net sales dropped¥33.8 billion, or 18%, from the previous fiscal year to¥158.2 billion.

Engine Sales(Thousand units)

700
600
500
400
300
200

0

(FY)

12

13

14

15

16

Vitz No. 3 car participating in Rally Toya

Toyota Industries participated in Tokyo Auto Salon
2016, held from January 15 to 17, 2016, toshowcase its concept car for the first time to the
public. Many visitors were pleased with its unique,flowing contour and wanted it to be introduced into
the market as it is.

Concept car on display

38

Toyota Industries Report 2016

Toyota Industries’ engines are highly renowned for their
excellent environmental performance in non-automotive
fields as well. These engines are used for a wide variety of
applications, including our lift trucks, and adopted by GHP*1
manufacturers in Japan and CHP*2 manufacturers
worldwide.
We expanded our lineup of industrial engines with theaddition of the Toyota 1KD industrial diesel engine, which isequipped with a turbocharger developed in-house, and the
Toyota 1FS gas/gasoline engine in March 2013, followed in
December 2013 by the Toyota 1ZS industrial diesel engine
also equipped with a turbocharger developed in-house.
These three new engines offer downsized displacementcompared with conventional models with equivalent output,
which results in higher fuel efficiency, cleaner emissions anda reduction in size.
*1: Short for gas heat pump; air conditioner driven by a gas engine*2: Short for combined heat and power; co-generation system

For the Creation of Better Engines
Toyota Industries’ Diesel Engines Highly
Acclaimed by Customers Worldwide

TOPIC

Developing Competitive Diesel and Gas/
Gasoline Engines in Non-Automotive Fields

Toyota Industries’ diesel engines, mounted in a variety of
Toyota vehicles sold around the world, have gained highmarket recognition for their clean emissions, fuel efficiency
and high performance. The V-type 8-cylinder VD diesel
engine is installed in the Land Cruiser for markets outside
Japan, including Australia, Russia and the Middle East. As asuccessor model of KD diesel engines, we commenced
production of GD diesel engines in June 2015. These
engines, which are installed in TMC’s Land Cruiser Prado
and other vehicles, are equipped with a turbocharger, forwhich we participated in the development and started
production in-house, and boast significantly higher
performance.
As part ofefforts to increase
the production of
GD diesel engines,
an additional
production line
went into
operation in
January 2016 at
GD diesel engine
our Hekinan Plant

Fuel efficiency and emissions standards are becoming more
and more strict, as called for in the twenty-first session of
the Conference of the Parties (COP21) held in Paris, France,
in November 2015 and as evidenced by India imposing
increasingly severe regulations on diesel engines. Even
before such trends became prevalent, Toyota Industries has
been carrying out development of next-generation
automobile engines that can clear Euro 6 and other stringent
emission standards, as well as engines for materials
handling equipment and general purposes featuring greater
fuel efficiency and lower costs. In November 2014, TMC andToyota Industries agreed to gradually consolidate diesel
engine development and production functions into theoperations of Toyota Industries. Accordingly, we will step up
our efforts to achieve shorter development cycles withimproved efficiency in order to develop and produce diesel
engines with greater competitiveness.
For our general-purpose engines, we will plan, develop
and produce a lineup of products matched to customers’
needs while actively promoting sales activities.

Car Air-Conditioning Compressor

Business Overview in Fiscal 2016
In fiscal 2016, unit sales of car air-conditioning
compressors rose 1.05 million units, or 4%, over theprevious fiscal year to 30.37 million units as a result of anincrease in sales in North America, Europe, China andother regions. Net sales rose ¥18.0 billion, or 6%, over theprevious fiscal year to ¥342.6 billion.

Compressor Sales(Million units)

35
30
25
20
15
10
5
0

(FY)

12

13

14

15

16

Automobile

100

in Aichi Prefecture to manufacture the turbocharger to be
mounted on GD diesel engines. In March, Toyota Industries
Engine India Pvt. Ltd. (TIEI), a consolidated subsidiary inIndia engaging in the manufacture of engines, also initiatedproduction of GD diesel engines.

Business Activities

As the sole producer of the Vitz in Japan and with the aim ofturning the vehicle into a long-selling series, Toyota
Industries collaborates with TMC and its dealers to makevarious suggestions under the banner “Taking the Lead in
Making Our Cars More Attractive.” Similarly, to boost theappeal of the RAV4, we plan and develop special-edition
vehicles that directly reflect the voice of our customers.
Through these endeavors, we seek ways to create more
appealing and satisfying vehicles for customers worldwide.
At the same time, we also undertake activities to expand
our customer base by enhancing the appeal of the Vitz
through our support to motorsports events.

EngineDevelopment Efforts Based on 3Es(Energy, Environmental Protection and
Ecological Thinking)More stringent fuel efficiency standards have been enforcedin North America, Europe, Japan and China, requiring
automobiles to provide extremely high fuel efficiency
performance.
Against this backdrop, in the field of car air-conditioning
compressors to be mounted in internal-combustion
vehicles, we are concentrating on development of avariable-displacement type compressor with considerably
greater fuel efficiency while also focusing on an optimum

6SES14 compressor (variable-displacement type)39

To offer attractive products to the growing number of
automakers worldwide now actively engaged in thedevelopment of HVs, we developed the ESB series, which iseven more compact, fuel efficient and lighter weight. The
ESB20 compressor mounted in the new Prius uses a newly
developed motor and inverter and has an improved
compression structure. We have succeeded in reducing its
size and weight compared with the ES14 installed in thethird-generation Prius models, while improving its airconditioning capability by 30% and reducing power
consumption by 8%.
Besides TMC, Ford Motor Company, Volkswagen,Honda Motor Co., Ltd. and Nissan Motor Co., Ltd., which
are already using our electric compressors in their respective
HVs and EVs, we will continue to ramp up our efforts to
expand sales to other automakers in Japan, the UnitedStates and Europe.

Augmenting Technical Support Capabilities
We station our sales engineers in the United States,
Germany, Italy and China and provide technical support
locally, promoting sales expansion and activities to prevent
quality issues from occurring.
In fiscal 2014, two of our consolidated subsidiaries,
namely, Michigan Automotive Compressor, Inc. (MACI) in the
United States and TD Deutsche Klimakompressor GmbH(TDDK) in Germany, began to conduct design operations
locally. A reduction indevelopment lead time
resulting from our local
design operations has
been received favorably
by automakers. We
plan to continue thisinitiative in the future.
Local design operations at MACI

Establishing Optimum Global Production and
Supply Structuresn Worldwide Bases of Car Air-Conditioning Compressors (As of March 31, 2016)

TOPIC
TDDK
DNDE

Germany

Germany

YST

DICH

MACI

China

China

U.S.A.

DIAM

U.S.A.

DSIT

Italy

TICO

DNTS

Japan

Italy
SUBROS

TACK

India

China

TACG

U.S.A.
TICA

U.S.A.

TACI

Indonesia

DNBR

BrazilConsolidated production bases

Licensed manufacturers

Technical service stations

Toyota Industries’ car air-conditioning compressors are widely adopted by automakers around the world, garnering the No. 1* position in global sales.

MACI is Toyota Industries’ oldest compressor
manufacturing base outside Japan and celebrated
its 25th anniversary in June 2015. Globalization of
our Car Air-Conditioning Compressor Business, forwhich we now boast the world’s top share*, beganfrom here. Currently, MACI operates the largest
compressor plant in the United States with annual
production of more than 5 million units of mainly
variable-displacement type compressors, which
possess such attributes as high efficiency, greater
fuel economy andlow environmental
impact.
Cumulative
production
reached 100
Ceremony to commemorate the cumulative
million units in
production of 100 million units
December 2015.
* Survey by Toyota Industries Corporation

Business Overview in Fiscal 2016
Net sales of electronics products were affected by amodel change of TMC’s Prius. Along with the growing
market of electric-powered vehicles, we proceeded withefforts to enhance the appeal of our products.

Expanding Experience and Role inElectric-Powered Vehicle Field
Toyota Industries develops and produces electronic
components and devices for electric-powered vehicles,
including HVs, plug-in hybrid vehicles (PHVs), EVs and fuelcell vehicles (FCVs). In addition to TMC, we are pursuingbusiness expansion to other automakers in and outside
Japan.

Auxiliary Power Source Devices
A DC-DC converter converts the high voltage of HV
batteries to a lower voltage level to supply power toelectronic control units, lights, wipers and other auxiliary
devices.
For the new, fourth-generation Prius, by developing theworld’s first thick copper substrate with excellent heatdissipation property and revising the way to integratecomponents on the circuit board, we reduced the volume
and weight of the converter by 50% and 60%, respectively,
compared with the product used on the third-generation
Prius.
Leveraging ourtechnologies
accumulated in thefield of DC-DC
converters for HVs,
we successfully
developed andcommenced salesof a DC-DC
converter for use
with start-stop
DC-DC converter mounted in the new Prius
systems, which can
suppress a voltage drop at the time of engine restart, andhave been promoting its sales to automakers.
A DC-AC inverter is equipped to use home electric
appliances in a vehicle and has drawn a great deal of publicrecognition for its use as an emergency power source
following the Great East Japan Earthquake. Since

Automobile

ESB20 compressor (electric type)
SCSE06 compressor (fixed-displacement scroll type)To respond to growing demand for variable-displacement
type compressors triggered by the enforcement of more
stringent fuel efficiency standards, we are proceeding withaugmentation of corresponding production capacities andcommenced local production of key functional parts at our
production bases in North America.
In Europe, the ASEAN countries and China as well, weare expanding production capacities and increasing the ratioof locally procured parts to accommodate growing demandfor car air-conditioning compressors.

Car Electronics

Business Activities

balance between performance and prices of fixeddisplacement type products targeting emerging countries.
In the field of variable-displacement type compressors,
we developed the SES series that simultaneously offers
greater fuel efficiency and a reduction in weight, and it has
been adopted by TMC in its Corolla, as well as by Daimler
AG, General Motors Company (GM), Volkswagen AG and
Hyundai Motor Company.
As for fixed-displacement type scroll compressors forlight and compact vehicles, we developed the SCSE series,
which possesses such excellent properties as lighter weight,
greater fuel efficiency and quieter operation. It has been
installed in an increasing number of vehicle models of
Daihatsu Motor Co., Ltd. and GM.
Since initially being installed in the second-generation
Prius, our electric compressors for hybrid vehicles (HVs) andelectric vehicles (EVs) have been mounted in all of TMC’s
HVs from the fourth-generation Prius to the LS600h.

* Survey by Toyota Industries Corporation

40

Toyota Industries Report 201641

Textile Machinery

Charging Infrastructure

Participation in ITMA 2015

Based on the philosophy of founder Sakichi
Toyoda, which reflects his strong commitment tomanufacturing, Toyota Industries responds to abroad range of needs with its extensive productlineup, from air-jet looms, for which we enjoy theworld-leading market share*1 in unit sales, to ring
spinning frames and roving frames.
*1: Survey by Toyota Industries Corporation

Business Overview in Fiscal 2016

Business Development of Weaving andSpinning Machinery

Main control stand (high-performance
unit to control sub-stands)

Sub-stands(charging only)
Charging stand for PHVs and EVs

Accelerating Development Activities toContribute to a Low-Carbon Society

In the field of weaving machinery, we introduced anenhanced electronic shedding device to our JAT810 air-jet
loom, for which we enjoy the world’s top market share. This
shedding device serves to increase textile variations byenabling the weaving of fabrics with complex patterns.
In the field of spinning machinery, we have added afeature to the RX300 high-speed ring spinning frame as an
option to produce a new spun yarn called mosaic yarn*2

Toyota Industries Report 2016

Spinning machinery booth

Air-Jet Loom Sales(Thousand units)

As many countries adopt regulations requiring high energy
efficiency, electrification is expected to become morewidespread not only for automobiles but also for materials
handling equipment and other non-automotive products.
Targeting the high-growth, electric-powered vehicle market,
we will accelerate our development efforts to enhance our
products in the fields of HVs, PHVs, EVs and FCVs, thereby
contributing to a low-carbon society.

1086Weaving machinery booth

4

Uster Technologies booth*2: A special yarn newly developed by Toyota Industries, which is made by alternating or
mixing two rovings in different colors, offering a considerable degree of freedom in colorand design choices*3: A roll of thinly spread sheet of fibers

2
0

42

Textile Machinery

The textile machinery market remained stagnant as
economic growth slowed down in China and emerging
countries in Asia. While sales of weaving machinery
expanded, with unit sales of air-jet looms increasing 400
units, or 8% year-on-year, to 6,200 units, sales of spinningmachinery and yarn quality measurement instruments
declined. As a result, net sales were down ¥2.5 billion, or
4%, from the previous fiscal year to ¥65.6 billion.

In November 2015, Toyota Industries participated in ITMA
2015, an international textile machinery exhibition held in
Milan, Italy. A total of 1,600 companies from 46 countries
participated in the event, including those in Europe, India
and China, and there were more than 120,000 visitors. At
this exhibition, we displayed our JAT810 air-jet loom, RX300
high-speed ring spinning frame and various other products
and appealed the excellence of these products’environmental performance and reliability. As for the TCO12
comber co-developed with Truetzschler GmbH & Co. KG,
our partner manufacturer of spinning machinery in Germany,
we conducted a demonstration of its automatic lap*3change system called Automatic Lap Piecer. The system’s
excellent stability during high-speed operation received highmarks from visitors.
Uster Technologies AG, a Swiss-based consolidated
subsidiary producing yarn quality measurement instruments,
also participated in the exhibition to present, among others,
the world’s first quality control system covering the entire
spinning process and appealed its advanced total quality
solutions.

Automobile

Toyota Industries sells public-use charging stands andhome-use charging units for PHVs and EVs, which havebeen jointly developed with Nitto Kogyo Corporation.
We exhibited our new public-use charging stand at the44th Tokyo Motor Show held in October 2015. This productconsists of one main control stand that offers charging
functionality as well as such features as communication,
IC card-based user authentication and billing, and multiple
low-cost, charging-only sub-stands. Besides the existingmodel’s features, the main control stand has an additional
capability to control up to 10 sub-stands, thereby reducing
the initial costs of installing multiple charging stands.
We are positioning this new charging stand as astandard model of the charging infrastructure and will strive
to enhance its functionality to ensure that we continue tosatisfy customer needs. Along with sales of charging stands,
we will work to enhance maintenance, inspection and otherservices.

Core Components for Drive Systems
Since 1967, we have been providing inverters for materials
handling equipment and accumulating a pool of know-how
and expertise on power electronics technologies.
Utilizing suchtechnologies,
Toyota Industries
applied its
proprietary directcooling method todevelop a device
with significantly
higher cooling
performance in2009. We have
4WD rear inverter mounted in the new Prius
entered the field ofcore components for drive systems such as power control
units (PCUs) for the third-generation Prius.
The new Prius offers a four-wheel drive (4WD) model forthe first time in the series, and it is fitted with our rear
inverter for 4WD use. This product converts the DC voltage
of HV batteries to AC voltage and feeds power to the 4WD
rear motor. The adoption of a forced air-cooling systemeliminates the need to install cooling water piping, thereby
providing greater ease in mounting the inverter on vehicles.
The inverter also features quieter operation as it is mounted
near the cargo space.
In the future, we will augment our development efforts inand have been receiving favorable feedback from manycustomers.
We aim to meet customer expectations by developing
textile machinery that produces high value-added textile
products through the pursuit of advanced technologies andcontinuous creativity and ingenuity as well as by providing
meticulous after-sales services via an enhanced service
structure.

order to increase orders for core components of drive
systems, for which further growth is expected.

Business Activities

commencing
production in 1995,
we have achieved
cumulative
production of 18
million units in
March 2016.
We havedeveloped an
DC-AC inverter mounted in the new Priuson-board charger
based on our
technologies and cultivated know-how regarding EV
chargers developed since the 1990s. The resulting on-board
charger is mounted in the Prius Plug-in Hybrid.
In addition, we develop and produce inverters for electric
car air-conditioning compressors for HVs and other electricpowered vehicles. These inverters have been contributing toincreasing the product appeal of our car air-conditioning
compressors. (See Special Feature 2 on pages 26–29 fordetails.)
We have also leveraged our inverter technologies related
to electric car air-conditioning compressors and successfully
developed a highly efficient, low-cost inverter for hydrogen
circulation pumps. The new inverter has been adopted in
TMC’s MIRAI FCV.

(FY)

12

13

14

15

16

43

Relationship with Stakeholders
P44−45
Relationship with Our Customers
P46
Relationship with Our Business Partners
P47
Relationship with Our Shareholders and Investors
P48−51
Relationship with Our Associates
P52−53
Relationship with Our Local Communities

Adhering to a quality first approach, Toyota Industries
strives to realize monozukuri (manufacturing) that quickly
responds to the diverse, ever-changing needs of customers.

“A product should never be sold unless it has
been carefully manufactured and has beentested thoroughly and satisfactorily.”n Types of Quality Sought by Toyota Industries

ent
em
nag
it y
g
Ma lity
ual
q
turin
qua
ufac
ting
Man lity
r ke
Ma
qua

Quality levels that
customers truly
expectProduct quality●Safety●Eco-friendliness●Durability●Ease of use

Designquality●Brand strength●Corporate image●Sales●Service●Logistics●Workmanship

Activities Based on the Quality Guidelines

Quality Vision 2020
All members in the Toyota Industries Group placeutmost emphasis on quality first and continuously
supply attractive products/services that anticipate
global customers’ needs.
To achieve the goal of this vision, we issue the Quality
Guidelines, which identify priority quality-related issues to be
implemented in each fiscal year, to all production bases inand outside Japan and enforce Company-wide, horizontallyaligned activities. The implementation status of theseguidelines is reviewed by top management at the Quality

Manufacturing capabilities

Placing top priority on our “Customer First” philosophy,
Toyota Industries undertakes product development thatmeets customer expectations.
Quality inspection by top management
Toyota Industries Report 2016

n Company-Wide, Horizontally Aligned Quality Assurance Activities
Quality Vision

Quality Guidelines

Quality Functional Meeting
Quality Confirmation and Defect Prevention Meeting

Materials
Handling
Equipment

TextileMachinery

Compressor

Electronics

VehicleImproving the quality of our products requires joint quality
improvement activities with our business partners in andoutside Japan. For this reason, we collaborate with our
major business partners in upgrading their quality assurance
efforts. Specifically, we conduct an annual quality audit toidentify deficiencies and ensure effective improvement, andprovide quality-related education.
Responsible executives of Toyota Industries verify theoutcome of these activities through genchi genbutsu
inspections.
These activities enable our business partners to attainthe level of quality assurance that Toyota Industries requires
and establish a culture to foster quality assurance on theirown.

Promoting Human Resources Development

Company-wide Council of Heads of Quality Assurance Departments

Development of new products

Quality forms the basis of our operations and is essential inattaining the goals of our Vision 2020. As such, weformulated our Quality Vision 2020, which defines ourphilosophy in ensuring quality.

“We should express our gratitude to ourcustomers by providing them our best quality
products.” (from Toyota Industries’ Quality Guidelines)

44* As of March 31, 2016

Providing Support to Business Partners

Engine•Activities to improve DR standards

Prevention of occurrence and recurrence •Recurrence prevention training
Quality assurance by business partners•Quality audit at business partners

Product safety and reassurance•Product Safety Promotion Committee

Human resources development•Education on statistical quality control (SQC),
QC Circle Promotion Committee

Toyota Industries provides systematic quality education to all
employees to help them acquire quality assurance skills
needed in actual operations.
Our production bases outside Japan also promotekaizen (improvement) efforts and human resources
development through quality control (QC) circle activities.
We visit subsidiaries outside Japan to give hands-on
instructions for promoting QC circle activities and train QC
circle instructors. As a venue for presenting activity results,
we hold the Global QC Circle Convention every year andprovide workshop sessions to raise skills.
We are working to reinforce our foundation for quality
assurance based on the belief that manufacturing starts withnurturing excellent personnel.

Relationship with Our Customers

Carrying on the spirit of founder Sakichi Toyoda, Toyota
Industries strongly believes that quality is the lifeblood of acompany. Focusing on quality first and ensuring customer
safety and reassurance are our most important
responsibilities to our customers and form the basis of ourapproach to corporate social responsibility (CSR).
Toyota Industries strives to maintain and improve thetotal quality of our corporate activities, which encompasses
not only “product quality” but also “marketing quality” and“management quality.” “Product quality” is embodied in thesafety, eco-friendliness, durability, ease of use andworkmanship of our products, while “marketing quality”
entails excellent sales and service in addition to these
attributes and “management quality” further enhances ouroverall corporate image and brand strength in terms of all ofthese attributes.

At Toyota Industries, development of a new productentails defining specific goals to incorporate quality in every
stage from product planning and design to production
preparation, production, sales and after-sales services. We
perform a design review (DR), which allows a product toproceed to the next stage only when a responsible businessdivision head examines and approves whether the producthas reached the target quality level.
Should a defect occur after the product launch, thequality assurance departments of each business division
immediately devise necessary measures. At the same time,
a probable cause is identified from both technical andstructural aspects, and if deemed necessary, the new
product development system itself is reviewed to prevent a
recurrence in the successor model.

every year as part of Quality Month in an effort to maintainand improve high levels of quality awareness.

Relationship with Stakeholders

Relationship with Our Customers

Functional Meeting and the Quality Confirmation and DefectPrevention Meeting, both chaired by the head of the
Production Headquarters*, for identifying additional issues
and devising countermeasures. Issues raised are followed
up at meetings of the Company-wide Council of Heads of
Quality Assurance Departments chaired by the head of the
Quality Control Department* of the Production
Headquarters. The president also checks on the outcome ofthese activities through genchi genbutsu (go and see foryourself) inspections.
As for initiatives to ensure product safety, in order tomeet customers’ expectations for safety and reassurance
we have been promoting activities to minimize risks at thedevelopment and design stage based on the assumptionthat customers make use of our products in diverse ways,
including foreseeable misuse and use under malfunctioning
conditions.

Initiatives to Raise Quality AwarenessTo ensure that we live up to our customers’ expectations interms of quality, we believe it is important to have a highlevel of quality awareness on an individual level. That is why
we engage in various activities to raise quality awareness,
including organizing quality seminars and distributing Quality
Month Texts.
As a new initiative in fiscal 2016, we asked all employees
to complete a quality awareness questionnaire. With the aimof elevating quality awareness to the next level, we createdthe questionnaire ourselves so that answering questions
would encourage personal development. Based on the
results, we analyzed strengths and weaknesses in each lineof work and department, and provided departmental
feedback as a tool to help individuals understand what
actions they need to take to improve quality.
We intend to conduct quality awareness questionnaires

Global QC Circle Convention

Global QC Circle workshop

45

Relationship with Our Business Partners

Co-Existence and Co-Prosperity Based on
Mutual Trust
We work hard to realize co-existence and co-prosperity withour business partners based on mutual trust. Every year, wehold procurement policy meetings and top manager
seminars for major business partners to facilitate mutual
understanding and cooperation. In addition, we provide
such programs as quality management and technical skills
training, guidance directed toward kaizen at their production
sites and safety and health education throughout the year.

Reducing Environmental Impact throughEnvironmentally Preferable Purchasing
In order to create environmentally friendly products, we aim
to procure parts, raw materials and equipment frombusiness partners that give sufficient consideration to theenvironment.
Our Environmentally Preferable Purchasing Guidelines,
which we have formulated to enforce “green” purchasing,
apply not only to parts, raw materials and equipment but
also to packaging materials. Along with environment-friendly
products, we deliver safety and reassurance to customers.

Localization of Business for Good Corporate
Citizenship
In view of increased local production outside Japan, we
promote procurement from local business partners in order
to contribute to the local community through consolidated
subsidiaries as a good corporate citizen.

1,000

We proactively provide
800
procurement education both
600
internally and externally. In fiscal
400
2016, we provided training on
200
Japan’s subcontracting law tostrengthen compliance, with
0(FY) 1415
16
seminars attended by 1,012
Toyota Industries employees and 175 participants fromaffiliated companies. We also carried out workplacecompliance inspections in an effort to prevent violations.
As a new initiative getting underway from fiscal 2017, wehave started providing basic education for less-experienced
employees at Toyota Industries and affiliated companies,
with the aim of improving knowledge among personnel inprocurement.
We also work with Hoeikai, anorganization consisting of our business
partners, to provide support tostrengthen the management platformsof member companies through Toyota
Production System (TPS) activities in
Basic education in
manufacturing and QC circle activities.
procurement

Toyota Industries Report 2016

We aim to obtain an appropriate company valuation in stock
markets through timely and appropriate information
disclosure while promoting good communications withshareholders and investors.

Basic Perspective
Toyota Industries continually carries out timely andappropriate information disclosure for shareholders andinvestors. In this way, we raise management transparency
so that we obtain an appropriate company valuation in stock
markets. We proactively provide not only information
required under disclosure laws and regulations but also
information on our management policy and businessactivities. Also, we engage in various investor relations
activities to facilitate productive dialogue with shareholders
and investors and feed back their comments to executives
and relevant business divisions to reflect them in ourbusiness activities.

facilitate a deeper
understanding of Toyota
Industries. To respond to thegrowing number of institutional
investors outside Japan
requesting a meeting, we visit
Toyota Industries’ redesigned website.
some of them to explain our
The English website is to be redesigned
within fiscal 2017.
management policies andbusiness overview. We also
participate in conferences hosted in Japan by securities
companies and hold individual meetings. For individual
investors, we hold company information sessions topromote an understanding of our business andmanagement policies.
We have redesigned the Investor Relations page on our
website and newly added a page for individual investors, inwhich our business details and strengths are summed up in
an easy-to-understand manner.
n Major IR Activities
For institutional investors and securities analysts in Japan•Quarterly financial results briefings •Individual interviews/visits•Small meeting •Teleconferencing •Company-hosted plant tours•Issuing/delivering Toyota Industries Reports
For institutional investors outside Japan•Individual interviews/visits •Teleconferencing•Participation in conferences hosted by securities companies•Issuing/delivering Toyota Industries Reports

General Shareholders’ Meeting

For individual shareholders and investors

Business Continuity Plan (BCP) Activities for
Possible Major Earthquake
We engage in BCP-related activities in anticipation of amajor earthquake in Japan. To improve our preparedness forresuming the supply of products to customers at the earliest
possible opportunity in the event of a disaster, we aremaking concerted efforts with business partners to ensure
the stable supply of parts and raw materials during therestoration of production.
Having formulated disaster mitigation plans for allcompanies that took part in disaster mitigation workshops(tabletop exercises) up until fiscal 2015, in fiscal 2016 we
promoted BCP initiatives by starting toconfirm actual progress through genchi
genbutsu inspection. We also provided
emergency recovery support in thewake of the earthquake in Kumamotothat occurred in April 2016, including
sending personnel and providing relief
Antiseismic initiatives
supplies to affected suppliers.

We hold our annual general shareholders’ meeting early to
avoid the date on which many companies hold theirrespective shareholders’ meetings so that moreshareholders can attend. We are further facilitating theexercise of voting rights of our shareholders by allowing
them to exercise such rights via the Internet and by joining
the electronic voting platform for institutional investors.
We held our 137th General Shareholders’ Meeting on
June 11, 2015, in which a record-high 418 shareholders
participated. To foster a better understanding of ourbusiness activities, we invited our shareholders for a lift truck
plant tour following the general shareholders’ meeting.
■ Number of Participants

Topic
Action policy
Scope of activities

FY2013
Determining
current status

FY2014FY2015

Hoeikai (business partners)
Suppliers of major parts

Supply chain surveys

Improving accuracy through periodic surveys

Mitigation workshops

Tabletop exercises

Disaster mitigation plans
Genchi genbutsu confirmation

FY2016

Reinforcing disaster mitigation

Formulation, aggregation and review
Confirmation
Periodic training•Company information sessions •Company-hosted plant tours•Issuing/delivering notice of general shareholders’ meeting•Issuing/delivering business reports

Lift truck plant tour hosted by Toyota Industries (Dec. 2015)

Returning Profits to Shareholders(Persons)

133rd

134th

135th

136th

137th

Shareholders’ meeting

320

363

396

348

418

Plant tour

112

132

185

144

163

Investor Relations Activities

n BCP Activities

Training for determining
extent of damage

46

Affiliated companies
Toyota Industries(Persons)
1,200

Relationship with Our Business Partners/
Relationship with Our Shareholders and Investors

To achieve open procurement, we provide fair and equal
opportunities to all potential business partners on our
Website.
We comprehensively evaluate our business partners
based on such factors as quality, price, adherence todelivery times, technological capabilities and management
information. We also assess their initiatives for safety, theenvironment and compliance as we strive for the timely andstable procurement of excellent products at lower costs
based on fair business transactions.

Promoting Human
Resources Development

Relationship with Stakeholders

Fair Business Transactions Based on an Open
Door Policyn Participants of Japan’s
Subcontracting Law Seminar

Activities

Toyota Industries encourages open procurement and seeks
co-existence and co-prosperity with our business partners(suppliers) based on mutual trust. We also facilitate
environmentally preferable purchasing, CSR-oriented
procurement practices, human resources development anddisaster prevention activities for a possible major earthquake.

Relationship with Our Shareholders and Investors

For institutional investors and securities analysts, ourmanagement conducts briefing sessions to explain ourquarterly financial results, including business performance,
progress achieved at each business division and future
initiatives. In addition to accepting individual interviews andmaking visits to institutional investors, we host lift truck plant
tours (production lines, technical exhibits, etc.) to showcase
our approach to manufacturing and on-site initiatives andToyota Industries regards ensuring shareholder benefits as
one of the most important management policies.
Accordingly, we strive to continue paying dividends at theconsolidated dividend payout ratio of roughly 30% and meetthe expectations of shareholders upon comprehensively
taking into consideration such factors as business results
and demand for funds. For fiscal 2016, Toyota Industries
paid annual cash dividends per share of ¥120.0 (interim
cash dividend per share of ¥60.0 and year-end cash
dividend per share of ¥60.0).
We will also be acquiring treasury stock up to a
maximum of 4 million shares in the amount of ¥18 billion
during the period from June 10, 2016 to June 9, 2017, withthe aim of improving capital efficiency and returning profits
to shareholders.

47Relationship with Our Associates

48

Toyota Industries Report 2016n Frequency Rate of Lost Workday Injuriesn Major Health Promotion Activities in Fiscal 2016

(%)
1.2
1.0

Manufacturing industry

0.8

Good

Manufacturers of transportation
machinery and equipment

0.6
0.4
0.2
0
(FY)

Toyota Industries
12

13

14

As a task for the medium term, we are promoting associate
health improvement programs to counter risks associatedwith aging and greater stress.
Specifically, we proactively provide health guidance toprevent lifestyle diseases from developing into metabolic
syndrome and actively encourage follow-up after annual
health checkups. We also conduct periodic age-based
health education for all associates to maintain and promote
their health and wellness. Along with specific healthguidance required by the Japanese government, we provide
health promotion guidance to associates below the age of
40 to help them improve lifestyle habits early on.

15

16(Source: Survey on Industrial Accidents, Japan’s Ministry of Health, Labour and Welfare)

In terms of chemical risk assessments, we have revised
our proprietary Ecology, Safety and Health Material
Investigation System (EMIS) in order to assess risks during
preliminary inspections of harmful chemical substances andto contribute to health and safety management in theworkplace. The system itself is designed so that chemical
substances cannot be purchased unless an application is
filed in advance.
At subsidiaries outside Japan, since a notion of a safetyoriented culture differs in individual countries and regions,communication is particularly important when mutually
incorporating effective activities from one another while
understanding and respecting a diverse range of cultures.
With that in mind, we planned a health and safety regional
meeting and organized one at a base in North America in
November 2015.
This meeting is designed to create a cooperative
framework not only in complying with laws but also inestablishing a safety-oriented culture and improving healthand safety technology and measures, with an emphasis on
strengthening cooperation among subsidiaries in respective
regions.
We are planning to organize a regional meeting inEurope and other areas in fiscal 2017 onward and aim toestablish a health- and safety-oriented culture at the highest
level in each region.

As part of mental
health support activities,
we have in place asystem to offer early
consultation through ahealth-related hotline.
Other activities include
upgrading our self-care/line-care education to
Stretching exercise
during age-based health education
prevent new cases andoperation of a return-to-work support program for persons
on long-term leave for prevention of relapses. We havesuccessfully achieved positive results through these activities.
In fiscal 2016, we looked into establishing the necessary
mechanisms to introduce a stress check system in
September 2016. From the initial fiscal year in which thissystem will be implemented, we are also planning ton Improving Mental Health Support Systems(Introducing a Stress Check System)
Objective

Individuals

Workplaces

Providing information on mental healthPreventive
measures

Preventing
relapsesA unique safety dojo at a base in
North America

Toyota Industries believes that it is essential to enhanceteam strength so that each associate can work with vitality
and the Company can achieve sustainable growth.
We believe that team strength is made up of “technicalskills” that form the basis of manufacturing operations,“management skills” to make maximum use of technicalskills and a “spirit of harmony” that supports both. Whilefurther enhancing our team strength, we are striving toextend and hand it down beyond all business domains,
generations and geographic regions.

Participants of age-based health education(2,157 persons)
Persons having completed guidance program(556 persons)on prevention of lifestyle diseases
Stop smoking enlightenment events• World No Tobacco Day: One-day no smoking (May 29)• No Smoking Days: Half-day no smoking (for 10 days)
Participants of stop smoking campaigns(44 persons)(held jointly with health insurance association)
Participants of walking events(3,783 persons)(held jointly with health insurance association)

Early
detection/
early
resolution

Health and safety regional meeting at
a base in North America

Enhancing Team Strength

Improving support via the introduction of a stress check system
Encouraging associates Raising awareness of
to be more aware of
consultation services
their health and offering
advice on healthimprovement measures

Interviews as partof health checks<Consultation
system>• Industrial healthstaff (in-house)• External institutions

Return-to-work support

Understanding thecauses of stress in theworkplace andimproving working
environments

Technical Skills

Expertise/skills/know-how

Management Skills
TPS, QC, SQC, etc.
Ability to identify and resolve issues
Ability to merge multiple levels of skill

Team Strength

LeadershipTo pursue improvements
thoroughly and continuously

Spirit of Harmony
Teamwork
Well-roundedhumanity

Technical Skills
To develop skills to support manufacturing, the Technical
Learning Center, one of our training facilities, plays thecentral role in associate education, offering basic skills
training at the Technical Training School and facilitating
efforts to enhance the skills of young technical staff throughin-house skills contests. We also work to cultivate highly
skilled specialists through participation in the national andinternational skills competitions.
At the 53rd National Skills Competition* held in 2015,
the Toyota Industries team won one gold medal in the“mechanical device control” category and received prizes invarious other categories, thereby attaining medals for the
15th consecutive competition.
In addition, the Toyota
Industries team won a bronze
medal in the “structuralironsmith” category at the43rd WorldSkills Competition
held in São Paulo, Brazil, in2015.

Relationship with Our Associates

In accordance with our fundamental policy of “creating
people capable of autonomously maintaining occupationalsafety and health,” Toyota Industries strives to prevent
industrial accidents and occupational disorders as well as
realize better work environments.
Based on the idea of building “a homelike atmosphere atwork that is warm and friendly” as stated in the Toyoda
Precepts, we clarified “the true meaning of safety” and “theideal goal of safety” andSafety Vision
formulated the “Safety
Each
and
every
associatein the Toyota Industries Group,
Vision” in fiscal 2014.
guided by the spirit of our corporate creed,aims to create a corporate cultureWith the aim of fosteringthat places a top priority on maintaining safety in all areasa safety-oriented culture,and focuses on mutual courtesy and safety
as well as realizing workplaces
we have promoted
where associates work each day
activities to instill thewith a sense of happiness and pride.
July 1, 2013
vision throughout the
Toyota Industries Group.
Having extended
activities to top
management at
consolidated subsidiaries
in Japan in July 2015,
we have now completed
safety workshops for top
Safety workshop for top management atmanagement, as well as
consolidated subsidiaries in Japan
health and safety staff, at
all Group companies worldwide.
Safety workshops have helped top management at
individual companies to recognize that “safety is thecornerstone of business continuity,” and enabled them totake the initiative in safety dialogue, including ceremonies for
new employees and meetings, based on the conviction that
it is possible to eliminate accidents entirely.
In fiscal 2016, we primarily implemented “activities aimed
at establishing a safety-oriented culture” and “pursuit offundamental safety for machinery and equipment centeringon risk assessments and activities to promote safetymeasures from human, object and administrative
standpoints.” We intend to continue with such activities in
the future.
For a safety culture to firmly take hold, leadership andstrong awareness among managers and supervisors arevital. As such, we provide safety workshops for managers
and supervisors at respective departments.
Having completed workshops for manufacturing
departments during the first half of fiscal 2016, we areplanning to finish rolling out workshops to administrative andengineering departments by the end of fiscal 2017. We also

intend to continually improve safety awareness by
establishing an educational framework for newly appointed
managers and supervisors.
As typical examples of activities aimed at establishing asafety-oriented culture, we encourage point-and-callpractices to check safety, instruct associates to use handrails when going up or down stairs and call on associates toraise awareness among each other.
Implementation of these various initiatives resulted in acertain year-on-year improvement in the frequency rate oflost workday injuries in fiscal 2016. We will continue to
implement unfaltering initiatives to instill a safety culture
among associates.

introduce feedback to relevant workplaces so that we can
improve our mental health support structure even further.

Relationship with Stakeholders

Building a Safety-Oriented Culture That Aims
for Zero Industrial Accidents

Initiatives for Health Management andImprovement

Mental health education

Our ultimate goal is to create safe and secure workplaces foreveryone, where each and every associate can exercise theirdiverse potentials and play active roles.

53rd National Skills Competition(mechanical device control)* Skills competition for determining Japan’s
top young engineers

n Number of Medals Won at the National Skills Competition
FY2014FY2015FY2016

Gold medal

1

1

1

Silver medal

2

3

2

Bronze medal

3

1

3

Total

6

5

6

49

Spirit of Harmony
Toyota Industries is creating a bright, energetic and caring
work environment that fosters a dynamic workforce andallows every member to demonstrate his or her capabilities
both as an individual and as a team. We are proactively
encouraging communication not only during work hours but
also through social gatherings, sports days, summer
festivals, Group-wide ekiden long-distance relay races andcheer squads for various sports events.

Establishing Work Environments Where Diverse
Human Resources Can Play Active Roles

Promoting Active Roles of Female Associates
We have been formulating plans to harness a more diverse
range of human resources and continuing to carry out
activities since 2008.
We have been working to enhance support systems
through such measures as introducing “a return-to-work(“welcome-back”) system for associates who have left work
to care for children and family members or to accompany
their spouse for a job transfer” and “a shorter work-hoursystem for child care.” We also introduced a telecommuting
system in April 2014. As a result, we have managed toreduce the gender gap in terms of average length of servicen Action Plan

Implementation
FY2016FY2017(1) Launch, message from president
Changing
mindsets among (2) Awareness seminar for managerial staff
managerial staff
and across all (3) Follow-up on individual development plans
associates(4) Getting spouses involved in pre-maternity
leave seminars(1) Sending associates overseas for training at
an early stage in their careers(2) Career training and interviews for female
assistant managers
Career support
for female(3) Role model exchange meetings
associates(4) Early return-to-work support(pre-maternity leave seminars)

In 2015, we set up a project to promote more activeroles for female associates, comprising 11 men and womenfrom different departments. This project was key for theidentification of issues and formulation of policy proposals inpromoting the increased active roles of female associates
through discussions and exchanges among project
members and stakeholders. The results of these discussions
formed the basis for the development of a Company-wide
action plan in clarifying the initiatives for this project. In
carrying out the action plan, we specifically focus on theinitiatives to change the mindset among managerial staff
and across all associates, provide female associates career
support and promote flexible working practices. We havealready launched activities involving management, heads ofCreating a company where all associates canfulfill their potentiall	Ask yourself, what is a company for? Its purpose is tomake its customers, shareholders and associates
happy.
l	Given Japan’s declining birthrate and aging society,the time will come when a male-dominated system oflong working hours is no longer viable. We need toembrace diversity.
l	Promoting more active roles forfemale associates is not only forthe benefit of women but also
for the benefit of all our
associates and our vitality as acompany so that we can all behappy in our work.

(Ongoing)(Ongoing)

FY2009FY2010FY2011FY2012

Increasing the ratio of female associates•Starting to recruit main career track female associates (for engineering positions in 1986 and administrative positions in 1996)

Toyota Industries Report 2016

10

10

0

(FY) 12

13[Engineering position](Persons)
150

14

Women

15

Men

16

Ratio of women

0

(%)
40
30

100

20
50

10
(FY) 12

13

14

15

16

0

departments and managerial staff, and have relayed amessage from the president.
Rather than merely appointing more female associates
to managerial positions, we are working to improve
workplaces so as to offer women a wider range of jobs andhigher quality of work and to enable female associates tofulfil their individual potential.
In January 2016, we were certified by the
Aichi Labor Bureau as a “Female-Friendly
Company.” We will continue to promote
activities aimed at creating more active roles
for female associates.
Employment of Persons with Disabilities
We respect the idea of people with and without disabilities
working together and sharing life and work values. Under
this basic policy, we continue to employ persons withdisabilities every year. They are assigned to a variety ofsections and work with other members to perform theirdesignated tasks. In fiscal 2016, the ratio of associates withdisabilities on a non-consolidated basis was 2.24%.

(FY)

14

15

16

FY2016•Project for promoting active rolesof female associates•President’s message

Announcing project recommendations•Seminars for female students in science track•Increasing recruitment of female associatesfrom non-engineering university departments

Setting targets for the number of female associates in managerial positions
Toyota Industries•Keidanren*2
7 (2006); 29 (2016); 75 (target for 2020)•MHLW*3

50

20

2.1

Cultivating career consciousness•Individual interviews with female assistant managers and their superiors•Formulating individual development plans•Sending trainees overseas •Training for career development for assistant managers*1: A system to enable reinstatement under certain preconditions*2: Japan Business Federation*3: Ministry of Health, Labour and Welfare

20

2.2

Enhancing support systems•Extending the period of childcare leave •Introducing a shorter work-hour system for child care •Introducing a telecommuting system•Introducing a leave system to allow parental care of children with illnesses •Establishing on-site day care •Introducing a “welcome-back” system*1
Cultivating corporate culture•Opening a Diversity Navi page on the intranet•Holding exchange meetings and lectures to share experiences of female associates in balancing work and family

(%)
40
30

0

FY2015

Ratio of women

(%)
2.3

(5) Improving career development support

FY2014Menn Ratio of Associates with Disabilities (Non-Consolidated)

Promoting flexible
working practices (1) Expanding telecommuting options

FY2013

Women

30

0

n Initiatives for Promoting Active Roles of Female Associates~ FY2008[Administrative position](Persons)
40

Relationship with Our Associates

We are implementing a variety of measures to create work
environments where a diverse range of human resources
can fully exercise their capabilities. These include promoting
active roles of female associates, supporting the employmentof persons with disabilities and creating an environment inwhich older associates can work more actively.

in administrative and engineering
positions to 1.4 years.
We have also been cultivating (Years)
Men
Women
20
a better corporate culture
through the launch of Diversity
15
Navi activities, which entail suchongoing activities as providing
10
forums for associates with limited
working hours to share opinions
5
and seek advice from one
another. As a result, the number
0Mar. ’94 Mar. ’04 Mar. ’15of female associates inmanagerial positions has
quadrupled over the course of
10 years from 2006 to 2016
(from seven to 29).
In terms of measures topromote more active roles forfemale associates, we have set
the target of increasing the ratio
Project members to promote more
active roles for female associatesof female graduate recruits to
40% in administrative positions
and 10% in engineering positions, and tripling the number offemale associates in managerial positions by the year 2020
compared with 2014, and intend to step up activities toachieve our goal.

n Hiring of New Graduates (Non-Consolidated Basis)

Relationship with Stakeholders

Management Skills
We conduct TICO Business Practices (TIBP) training
targeting associates in administrative and engineering fields,with the aim of mutually sharing the thinking and values that
the Company gives importance to, as well as to improve ourassociates’ problem-solving capabilities. TIBP training
programs are also provided at subsidiaries outside Japan in
our efforts to raise the level of management skills throughout
the Toyota Industries Group.

n Service Years by Male andFemale Associates(Administrative andEngineering Positions,
Non-Consolidated)

Creating a Work Environment for Older Associates
We focus on creating a better work environment for older
associates by adjusting the height of jigs in production lines
and modifying processes to compensate for deterioration ofvision so that they can work with less stress.
Moreover, since the introduction of a re-employment
system for associates who reach the mandatory retirement
age of 60, the number of associates who choose tocontinue working has been increasing. In response, we hold
“55 Career Training” for associates reaching the age of 55 togive them an opportunity to envision life and work after theage of 60 and think about how they should work during theremaining pre-retirement period.

Project activities

51

Relationship with Our Local Communities
With a view toward creating an enriched and healthy society
and ensuring its sustainable growth, we fulfill our role as agood corporate citizen and actively undertake social
contribution activities in every region where we do business.

* Voluntary organizations formed by employees at each job level

Events to interact with persons with disabilities· “Walk Rally (orienteering),” harvest festival, festival
Support for welfare facilities· Support for charity bazaars at facilities by providing goods· Volunteer work for facility cleanup/repair/pruning/weeding
Social· Support for sales of products from facilities for persons with disabilities
by providing opportunities to set up stalls
welfare· Volunteer listening activities at elderly care facilities
Supporting activities and raising money for medical institutions
through a charity marathon (France) (P53)
Support for feeding the homeless and needy (Australia)
Donating Christmas presents for less fortunate children (U.S.A.)
Support for Youth Invention Clubs· Monozukuri workshops for elementary school children during summer
vacations· Holding handmade kite-flying competitions· Running craft corners at local events
Youth
Providing plant-hosted environmental education to elementary school
development children
Holding mini concerts at elementary schools
Organizing food education and exchange meeting for children fromchildren’s homes (P52)
Assisting with events aimed at sharing the joys of monozukuri(U.S.A.) (P53)
Initiatives for forest conservation· Tree thinning activities for conservation of prefecture-owned forests· Producing and donating benches made of thinned wood
· Tree-planting activities for reforestation
Environmental · Support for environmental festival through participation and financial
assistance (Sweden)
protection· Tree-planting activities on Mt. Papandayan (Indonesia)
Tree-planting activities to protect mangrove forests (Indonesia)(P53)
Cleanup activities along the delta coast (Romania)
Cleanup activities at Semeru National Park (Indonesia)

Community
contribution

Participation in local traditional events (Mando Festival)
Road cleanup activities in areas around plants
Activities to raise awareness for traffic safety
Crime prevention patrols
Highway cleanup activities (U.S.A.)
Donating plumbing equipment, desks, uniforms and other items to schools(India)Participating in joint patrols to stop nuisance parking (P52)

Other

Holding charity concert
Support for international NGO in collecting spoiled postcards
Periodic blood donation drives
Participating in earthquake recovery support activities in Japan(Germany) (P53)

Structure for Promoting Social Contribution
Activities
The CSR Committee deliberates on policies of our social
contribution activities while the Social Contribution Group
within the General Administration Department at the Head
Office takes the initiative in carrying out activities.

(Activities without country designation were conducted in Japan.)

Activity Examples of Toyota Industries and Consolidated Subsidiary (Japan)
Toyota Industries Corporation

Youth Development

Organizing Food Education and Exchange
Meeting for Children from Children’s Homes
The Toyota Industries Team Leader Association from manufacturing departments planned a rice growing experiencealongside children from children’s homes as a new type ofsocial contribution activity. With help from members of thelocal agricultural cooperative, the association got involved in
activities such as planting rice, harvesting rice and pounding
rice cakes, and sharedwith the children theimportance of food allyear round. From making
scarecrows to playing in
the mud, everyone got
some exercise and had a
Employees planting rice with children fromfun time as well.

52

children’s homes

Toyota Industries Report 2016

Activity Examples of Consolidated Subsidiaries (Outside Japan)

Activities

Consolidated SubsidiaryCommunity Contribution

Participating in Joint Patrols to Stop Nuisance
Parking
Sun River Co., Ltd., which operates sporting facilities, leases
real estate and manages restaurants, carries out traffic safety
activities in fall every year as a member of an association of
local companies. During this campaign, employees took partin joint patrols to stop nuisance parking in the area aroundEsaka Station (Osaka Prefecture). As well as helping to
improve traffic manners
among local residents,
this activity also serves toraise awareness among
employees themselves.

Employees taking part in a joint patrol tostop nuisance parking

FranceCommunity Contribution

Indonesia

Environmental Protection

Supporting Activities and Raising Money for
Medical Institutions through a Charity Marathon

Tree-Planting Activities to Protect Mangrove
Forests

Toyota Material Handling France SAS (TMHFR)
Subsidiary engaging in sales and servicing of materials
handling equipment

P.T. TD Automotive Compressor Indonesia (TACI)
Subsidiary producing car air-conditioning compressors

The TMHFR team made up of 89 people participated incharity marathons held in Paris and Toulouse in November
2015. These events are part of a campaign to raise
recognition and awareness of men-specific illnesses and to
be more health-conscious, and participants must wear amoustache whether real or fake. Participation fees of around45,000 euros were raised and donated to medical
institutions to support treatment and research on depression
and prostate cancer.

In January 2016, TACI provided cooperation to an
environmental protection program promoted by an
Indonesian subsidiary of Toyota Motor Corporation and its
group companies and planted trees at Maron Beach on theisland of Java. This activity is conducted to protect
mangrove forests, which play an important role insafeguarding biodiversity. A total of approximately 300,000
mangrove trees were planted, including 2,000 trees donatedby TACI.

Employees who participated in charity marathons

U.S.A.

Youth Development

Employees planting trees

Germany

Other (Recovery Support)

Assisting with Events Aimed at Sharing the Joysof Monozukuri

Participating in Earthquake Recovery Support
Activities in Japan

Michigan Automotive Compressor, Inc. (MACI)
Subsidiary producing car air-conditioning compressors

TD Deutsche Klimakompressor GmbH (TDDK)
Subsidiary producing car air-conditioning compressors

In July 2015, MACI cooperated in the annual Learning Fair
conducted in Jackson County in Michigan. The fair provides
a hands-on opportunity to explore technology andcraftsmanship and is a great learning experience for children
and adults alike. Five MACI employees took part andprepared a monozukuri corner using compressor pieces anda robot experience corner.

Employees and children who took part in the event

Relationship with Our Local Communities

Based on “Respect for Others” as described in our Basic
Philosophy, we strive to fulfill our role as a good corporate
citizen in every region where we do business and actively
engage in social contribution activities to realize an enriched
and healthy society. In our activities that emphasize social
welfare, youth development, environmental protection andcommunity contribution, we not only provide cooperationand support through personnel, facilities, funds and knowhow but also strive to closely connect with participants. To
foster employees’ awareness of their ties to society andraise their interest in contributing to society, we makeenlightenment efforts such as providing a venue forvolunteer activities and sharing information on volunteer
activities that encourage the participation of all employees.
Employee associations* are actively undertaking various
activities to contribute to local communities, mainly in theareas of supporting welfare facilities and protecting thenatural environment.

Theme

Relationship with Stakeholders

Activities as a Good Corporate Citizenn Major Social Contribution Activities of Toyota Industries andGroup Companies

In May 2015, five employees of TDDK joined recovery
support efforts in the area greatly damaged in the Great East
Japan Earthquake through the NPO Kizuna-in-Berlin. The
volunteers engaged in various activities, such as restoring
homes, tending farms and repairing tools. They stayed withthe local residents in a homestay, which enabled them todeepen their insights into Japanese culture and daily life andto form bonds with people in the communities.

Employees helping repair tools

53

Environmental Initiatives
P54
Vision for Environmental Activities
P55
Structure to Implement Environmental Management
P56–57
Five Years of Steady Progress
P58–59
Summary of the Fifth Environmental Action Plan
P60–61
Sixth Environmental Action PlanP62–63
Establishing a Low-Carbon Emission Society

Establishing a Recycling-Based Society
Reducing Environmental Risk and Establishing aSociety in Harmony with Nature
Environmental Management
Environmental Impact Flow and Environmental
Accounting

P64–65
P66–67
P68–69P70

We have achieved the Fifth Environmental Action Planand have launched the Sixth Environmental Action Planin fiscal 2017.

We successfully achieved all designated targets.
(See Five Years of Steady Progress on pages 56–57 and Summary of the Fifth
Environmental Action Plan on pages 58–59 for details.)
CO2 Cancel• Effective use of resources at thedeveloping stage of products• Improvement of productivity in terms ofresources usage

Environmental risk
reduction
Society in harmony
with nature
Low-carbon
emission society• Development of products andtechnologies in pursuit of superiorenergy efficiency• Achievement of minimum energy
consumption through the innovationsin production engineering

Recycling-basedsociety

Environmental Management• Approach towards biodiversity• Human resources, environmental
awareness• Cooperation with global society
and local communities

Notional Diagram of Global Environmental Commitment

Achievement of the Fifth Environmental
Action Plan
Toyota Industries completed its Fifth Environmental Action
Plan covering the five years from fiscal 2012 to fiscal 2016.
We conducted activities according to the action items
and targets laid out in the Fifth Plan. They included a 10%
reduction in CO2 emissions from major products to be
developed during the period covered by the Fifth Plan;
accomplishment of “CO2 Cancel,” our original concept tooffset CO2 emissions from production activities by reducing
CO2 emissions via improved product efficiency and othermeans; and improvement of environmental performance.

54

Toyota Industries Report 2016

Auditor education by an external institute

Reduction of CO2 emissions via improved
product efficiency

Environmental Committee

President

Notional Diagramof “CO2 Cancel”

CO2 emissions from production activities= Total CO2 emissions from Toyota Industries’ plants
Reduction of CO2 emissions via improved product efficiency=T otal reduction in CO2 emissions attained by major products which are manufactured
at Toyota Industries’ plants

Formulation of the Sixth Environmental
Action Plan
Based on the Global Environmental Commitment that
articulates our basic approach to environmental initiatives,
we have formulated the Sixth Environmental Action Plan, a
new five-year plan for the period from fiscal 2017 to fiscal
2021. The plan incorporates a far-sighted approach tocreating a society with zero CO2 emissions by 2050 with aview toward contributing to a society that realizes enriched
lifestyles in harmony with the natural environment.
In formulating the new plan, we reviewed the results ofactivities under the Fifth Plan and specified key points asshown below on which to concentrate our efforts as the
Toyota Industries Group in aggressively promoting the four
action themes of the Global Environmental Commitment,
namely, 1) establishing a low-carbon emission society;2) establishing a recycling-based society; 3) reducing
environmental risk and establishing a society in harmony
with nature; and 4) environmental management.
(See the Sixth Environmental Action Plan on pages 60–61 for details.)

Key Points of the Sixth Environmental Action Plan
Challenge: Take on a challenge of reducing CO2 emissions for a zero CO2 society in 2050
• Develop products and technologies with the highest level of environmental performance•D evelop production engineering technologies with lower CO2 emissions and utilize clean
energyContribute: Contribute to a future society through technology development and resource
utilization• Develop technologies for the realization of a hydrogen-based society• Promote measures against resource depletion by recycling waste
Give back: Nurture the natural environment and give back to nature• Collaborate with all Toyota Group companies to promote activities of the Toyota Industries
Group to promote greening activities• Prepare and promote countermeasures against water depletion after determining water
usage and wastewater amountInternal audit
Responsible internal auditor

Specialized committees•Team leader•Supervising auditors•Auditors

Product Environment Subcommittee

Chief environmental administrator

Head Office
Corporate Planning
R&D
Purchasing
Quality Assurance
Human Resources
General Administration

Environmental Audits

Production Environment Subcommittee

Admin office

Company-Wide CO2Emission Reduction Conference

Divisions
Materials Handling Equipment
VehicleEngineCompressor
Electronics
Textile Machinery

Division-Based
Promotion Committees

Environmental Conservation Organization by manufacturing plants(environmental risk management overseen by plant managers)

In fiscal 2016, we continued to provide education toemployees, including introductory courses for environmental
management and environmental audits, in which the former
is for cultivating required knowledge and the latter for gaining
knowledge and techniques of internal audits. Proactive
participation by department heads and others in managerial
positions has enabled us to increase understanding ofenvironmental management and develop internal auditors.

Toyota Industries implements annual internal environmental
audits as well as external audits carried out by anindependent third-party institute.
The external audit conducted in fiscal 2016 revealed nonon-conformances. For matters pointed out in the audit tohave the potential to cause non-conformances in the future,
we will implement improvement measures and disseminate
the relevant information to other plants to raise the overalllevel of environmental management.
We continued to conduct internal audits under themutual, interdivisional audit system. In fiscal 2016, westrived to upgrade our auditing capabilities by organizing
audit teams with the dual goals of fostering the developmentof auditors and increasing audit efficiencies. In the area ofaudits, our focus was placed on reducing environmental
risks and improving environmental performance, and we
successfully clarified how much each business divisioncontributes to overall environmental management.

Vision for Environmental Activities /Structure to Implement Environmental Management• Change to more environmentally friendly chemicals• Minimize environmental risks

Toyota Industries has positioned environmental response as
one of its most crucial management issues. To quickly
reflect top management’s decisions on business operations,Toyota Industries has established and been operating a
Company-wide integrated environmental management
system (EMS), with the president at the top.
n Environmental Management Structure

Global Environmental Commitment

Aiming at realizing a prosperous life inharmony with the natural environment

As a first attempt to enhance the quality of our audits,
we invited an external institute to provide auditor education
to supervising auditors engaging in internal audits.

Promotion of Environmental Management
SystemCO2 emissions fromproduction activities

As one tenet under our Basic Philosophy, Toyota Industries
works to contribute to regional living conditions and social
prosperity and also strives to offer products and services
that are clean, safe and of high quality. Accordingly, inFebruary 2011, we established the Global Environmental
Commitment, a specific environmental action guideline, tobe shared and implemented throughout the Toyota
Industries Group. The entire Toyota Industries Group
comprising 165 companies in and outside Japan will
dedicate concerted efforts to realizing a prosperous life inharmony with the natural environment.

Positioning environmental response as one of its most
crucial management issues, Toyota Industries is enhancing
its environmentally oriented corporate management on a
global basis through the promotion of consolidated
environmental management.

Environmental Initiatives

Vision for Environmental Activities

Structure to Implement Environmental
Managementn Scope of Group-Wide Environmental Management (As of March 31, 2016)

EuropeJapan

n Production companies: 6

n Non-consolidated: 10 plants
n Production companies: 13

Toyota Material Handling Manufacturing Sweden AB (Sweden)
Toyota Material Handling Manufacturing Italy S.p.A. (Italy)
Toyota Material Handling Manufacturing France SAS (France)
L.T.E. Lift Truck Equipment S.p.A. (Italy)
TD Deutsche Klimakompressor GmbH (Germany)
Uster Technologies AG (Switzerland)

Asian Production companies: 8
Toyota Industrial Equipment Vietnam Co., Ltd. (Vietnam)
Toyota Industries Engine India Private Limited (India)
Kirloskar Toyota Textile Machinery Pvt. Ltd. (India)
P.T. TD Automotive Compressor Indonesia (Indonesia)
Toyota Industry (Kunshan) Co., Ltd. (China)
TD Automotive Compressor Kunshan Co., Ltd. (China)
Yantai Shougang TD Automotive Compressor Co., Ltd. (China)
Tailift Material Handling Taiwan Co., Ltd. (Taiwan)

Aichi Corporation (Saitama)
Nishina Industrial Co., Ltd. (Nagano)Takeuchi Industrial Equipment
Manufacturing Co., Ltd. (Aichi)
HANDA Casting Company (Aichi)
Unica Co., Ltd. (Aichi)
Tokaiseiki Co., Ltd. (Shizuoka)
Altex Co., Ltd. (Shizuoka)
IZUMI MACHINE MFG. CO., LTD. (Aichi)
Nagao Kogyo Co., Ltd. (Aichi)
Miduho Industry Co., Ltd. (Aichi)
Iwama Loom Works, Ltd. (Aichi)
Tokyu Co., Ltd. (Aichi)
Hara Corporation (Gifu)

North America

Non-production companies
Japan: 21
Outside Japan: 106n Production companies: 9
Cascade Corporation (U.S.A.)
Indiana Hydraulic Equipment, Corp. (U.S.A.)
North Vernon Industry Corp. (U.S.A.)
Raymond-Muscatine Inc. (U.S.A.)The Raymond Corporation (U.S.A.)
Toyota Industrial Equipment Mfg., Inc. (U.S.A.)
Michigan Automotive Compressor, Inc. (U.S.A.)TD Automotive Compressor Georgia, LLC (U.S.A.)
Toyota Industries Compressor Parts America, Co. (U.S.A.)

Latin American Production company: 1
Toyota Material Handling Mercosur Indústria Comércio deEquipamentos Ltda (Brazil)

55

Five Years of Steady Progress

Fifth Environmental Action Plan

Establishing a Low-Carbon
Emission Society

FY2012FY2013

FY2014FY2015FY2016FY2017(Ended March 31, 2012)(Ended March 31, 2013)(Ended March 31, 2014)(Ended March 31, 2015)(Ended March 31, 2016)(Ending March 31, 2017)“Formulation of the Fifth Environmental
Action Plan”
Working toward “CO2 Cancel”“A biotope to link people, nature andthe local community”“Reinforcing activities to reduce peak
power consumption by visualizing useof electricity”“Toyota 1KD industrial diesel engine
received Logistics Environmental
Technology Development Award”“Completion of the Fifth Environmental
Action Plan”
Achievement of “CO2 Cancel”
Annual CO2 emissions from production activities

CO2 emissions from production activities

CO2 Cancel

400
300
200
100

Reduction of CO2 emissions via improved product efficiency

0
(FY)

12

13

14

15

16

Toyota Industries Report 2012

Toyota Industries Report 2013

Toyota Industries Report 2014

Toyota Industries Report 2015

Toyota Industries Report 2016

P62

P58

P64

P67

P63

“Lecture on the environment(by Mr. Ukyo Katayama)”
What everyone can do now for theenvironment“Won Biotope Award in the Fifth Biotope
Commendation”“Recovering cleaning fluid by amechanical pump”
Pump upcleaning fluid
Air
Cleaning
fluid

Step on floor panel
Send cleaning
fluid back to tankAir
Cleaning
fluid

Step off floor panel“Compiling anddisseminating
waste disposal
know-how within
Toyota Industries”
Issued Waste
Disposal
Handbook

Taking anotherstep forward“Certification of environmentally friendly
products”
19 items certified in 10 years

under the Sixth Environmental
Action Plan

“Formulation of the Sixth Environmental Action Plan”
Taking on a challenge of creating a society with zero CO2emissionsFifth Environmental Action Plan
Five Years of Steady Progress

Establishing a
Recycling-Based Society
Reducing Environmental Risk
and Establishing a Society inHarmony with Nature

Annual reduction in CO2 emissions from products

(kt)

500

Cleaning fluid
recovery box

Toyota Industries Report 2012

Toyota Industries Report 2013

Toyota Industries Report 2014

Toyota Industries Report 2015

Toyota Industries Report 2016

P70

P61

P66

P69

P63

Environmental Management“Wall greening activity received the BestAward in Aichi Green Curtain Contest”“Won silver prize of the Aichi
Environmental Awards for serializing
electric compressors”“Enlightenment
activities utilizing
environmental
AP cards”“Visualizing risk through piping
inspections”“Calculating greenhouse gas emissions
in the supply chain”
Scope 1
(0.4%)

Scope 3 / Other(5.3%)

Scope 2
(1.5%)

Scope 3 / Category 11(92.8%)

Toyota Industries Report 2012

Toyota Industries Report 2013

Toyota Industries Report 2014

Toyota Industries Report 2015

Toyota Industries Report 2016

P70

P66

P67

P70

P68

“Introduction ofinternal eco-point
system”
Selection of ourcorporate eco
character“Received the Environment Minister’sAward for global warming prevention
activity”“TMHE(consolidated
subsidiary outside
Japan) to publish
its first social andenvironmental
report”

Environmental Initiatives

Toyota Industries
completed its Fifth
Plan covering the five
years from fiscal 2012 to
fiscal 2016.
This section provides
a digest of our efforts inthe past five years takenfrom our previous Toyota
Industries Reports.
Details of each topic
are available at our
corporate website.

Toyota Industries Report 2016
P60

“Tree-planting event held during
Environment Month in India”

BiocokeToyota Industries Report 2012

Toyota Industries Report 2013

Toyota Industries Report 2014

Toyota Industries Report 2016

P70

P68

P69

P69

Internally Used Posters on
Energy Saving
Details are available at our
corporate website.

Toyota Industries Search
http://www.toyota-industries.com/
Energy saving we all can do

56

Toyota Industries Report 2016

Save energy to create a better future for children

Keep the environment clean for our future

A little care

Everyone to support the future earth57Summary of the Fifth Environmental Action Plan
We have achieved all targets for fiscal 2016.

n Production Related
Fifth Environmental Action Plan Targets
Segments

With an eye to realizing a prosperous life in harmony with thenatural environment through the establishment of a

Establishing a
Low-Carbon
Emission Societyn Product Related
Fifth Environmental Action Plan Targets
Segments

Action Policies

Specific Actions

In the Automobile-Related Business, promoteelectrification and develop technologies andproducts that will contribute to reduction of CO2
emissions• Improve energy efficiency of car air conditioners• Develop technologies to respond toelectrification of vehicles• Develop technologies to enable weight reduction• Reduce energy loss
• Develop new engines

Establishing a
In the Materials Handling Equipment Business,develop technologies and products that will
Low-Carbon
Emission Society contribute to reduction of CO2 emissions• Improve fuel efficiency of internal-combustion lift
trucks• Reduce energy loss in electric-powered lift
trucks and improve energy efficiency offunctional units• Reduced CO2 emissions by 17%

Reducing
Environmental
Risk and
Establishinga Society inHarmony with
Nature<Automobile-Related Business>• Developed highly efficient electric car airconditioning compressor

58

Toyota Industries Report 2016

• Reduce energy use through lower air
consumption• Reduce power use through lower load fromwindage loss
• Reduce energy loss

In the R&D field, develop technologies for energy
efficiency• Develop new technologies that contribute toimproved energy efficiency in automobiles

Implement initiatives to promote 3R (reduce,reuse and recycle) design for effective resource
utilization• Reduce use of resources through longer productlife• Reduce use of resources throughstandardization, modularization and reduction of• Developed plastic glazing rear window
components• Reduce use of resources through weight andsize reductions• Promote reuse of components and resources

Manage chemical substances contained in
products• Develop engines that meet future regulations• Investigate chemical substances contained in
products and manage switching over of SVHC*2
and other substances of concern to othersubstances

NonTotal
CO2 emissions
consolidated emissions•Energyderived CO2
Global•5 gases*4
Eco•CO2 fromefficiency*5
Nonlogistics
consolidated
Total
emissions
CO2 from
NonReduce CO2 emissions through green logistics
logistics consolidated
Ecoefficiency
Packaging
NonEcomaterial
Enhance resource productivity
consolidated efficiency
volume• Reduce use of timber-derived packaging materials• Reduce the volume of discarded materials by
In Japantaking action at the source, such as improving
Waste
Eco
yields and other measuresgeneration
efficiency
Non• Promote internal reuse
volumeconsolidated
Promote energy reduction and energy conservation
through innovative production technologies
Reduce greenhouse gas emissions during
production processes through energy JIT*3
Promoting measures to curb global warming

Further reduce emissions of substances of concern
Minimize environmental risks• Expand the use of a preliminary review system• Reduce risks related to wastewater• Appropriately manage chemical substances basedon social conditions• Enhance risk communication with relevantorganizations and local residents

VOC*6emissions

NonEmission
consolidated volume per(automobile
unit ofbody)
production

Fifth Environmental Action Plan Targets

In the Textile Machinery Business, develop
technologies and products that will contribute to
reduction of CO2 emissions

Reduce emissions to improve air quality in urban
areas in all countries and regions

Control Items

FY2016
Assessment
Achievements

Base Year(FY)

Targets

2006

-18%

-22%

√

1.27

1.34

√

1.47

1.53

√

1991

-20%

-35%

√

2007

1.09

1.59

√

2007

1.09

4.20

√

1.01

1.14

√

1.01

1.14

√

24 (g/m2)

24 (g/m2)

√

2006

2013

—

n Promoting Environmental Management<Materials Handling Equipment Business>• Improved energy efficiency of electric lift truck

Establishing a
Recycling-BasedSociety

Reducing
Environmental
Risk and
Establishing aSociety inHarmony with
NatureScope<Textile Machinery Business>• Developed technologies to reduce power
consumption

Action Policies

Reinforce CO2 reduction activities for “CO2 Cancel”

Augment and promote consolidated environmental
management

Enhance and promote environmental education andenlightenment activities• Further reduce CO2 emitted from production activities inplants• Aim to cancel out CO2 emissions of Toyota Industries byreducing CO2 emissions through improved efficiency innewly developed products• Build a global environmental management system andpromote related activities to:1) Comply with environment-related laws and reduce
environmental risks in each country2) Achieve the highest-level environmental performance ineach country• Aim for efficient and systematic corporate management byintegrating and operating environmental management
system and quality/safety management systems• Develop environmental specialists to lead internal
environment-related activities• Strengthen internal environment-related activities andbroaden family-friendly initiatives by planning and promoting
enlightenment activities that can be carried out at home

FY2016 Achievements• Achieved “CO2 Cancel”• Strengthened environmental performance andenvironmental risk reduction measures of consolidated
subsidiaries in and outside Japan• Conducted environmental awareness survey among
employees, which scored 4.0 out of 5 points

Improve eco-conscious brand image• Reinforce environmental activities according to the contents
and results of Survey of Environmental Oriented
Management Index to pursue higher brand image• Certified the GENEO-Ecore as an environmentallyfriendly product

Augment activities related to protection of
biodiversity• Identify the impact of business activities on biodiversity andreinforce initiatives by deﬁning speciﬁc goals• Contribute to biodiversity through conservation of forestsand protection of rare species• Conducted maintenance and management activities at
Biotope of the East of Obu Station, which were jointly
carried out with the local community• Held biotope tour for students

Promote sustainable plant activities• Build a plant environment in harmony with nature bypromoting energy reduction and energy conservation• Continually reviewed energy strategy for the medium tothrough innovative production engineering, by reducing
long term
energy loss and by using renewable energy and other means• Developed lift truck engines compliant withemissions regulations ahead of schedule• Expanded the scope of substances of concern(investigated substances of concern containedin supplies)

Specific Actions

Summary of the Fifth Environmental Action Plan

Reduce CO2 emissions by 10%*1 from major products to be developed during the period covered by
the Fifth Plan

FY2016 Achievements

Establishing a
Recycling-BasedSociety

Subject

Environmental Initiatives

Fifth Environmental Action Plansustainable society, we formulated the Fifth Environmental
Action Plan for the period from fiscal 2012 to fiscal 2016
and promoted activities according to the plan.
Through activities undertaken during these years, wehave achieved all respective targets laid out in the plan.

Action Policies/Specific Actions*1: Target products Toyota Industries develops and produces. The CO2 reduction volume is calculated based on the method Toyota Industries determined using FY2011 levels as the baseline.
*2: Substances of Very High Concern*3: Just In Time
*4: Greenhouse gases other than CO2, including methane (CH4), dinitrogen monoxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulfur hexafluoride (SF6)*5: Eco-efficiency = Production efficiency in subject year / Production efficiency in base year
Production efficiency = Production indicator (Net sales or production volume, etc.) / Environmental impact of production activities*6: Volatile Organic Compounds

59Sixth Environmental Action Plan
We have formulated another five-year action plan for theperiod from fiscal 2017 to fiscal 2021.

Action Themes

Action Themes

Segments

Products

promoting environmental management. Of these four areas,
we place a particular emphasis on the establishment of alow-carbon emission society and implement initiatives
specifically designed for the creation of a society with zeroCO2 emissions by 2050.

Action Policies

Reduce CO2 emissions through product andtechnology development

Primary Actions and Targets• Develop technologies that contribute to an even greater level of energy efficiency• Develop products and technologies that respond to electrification• Develop technologies to enable weight reduction• Reduce energy loss
• Develop technologies for the realization of a hydrogen-based society

Products

Action Policies
Implement initiatives to promote 3R (reduce,reuse and recycle) design for effective resource
utilization

Promote measures against resource depletion byrecycling waste

Establishing a
Recycling-BasedSociety

Scope

Scope

Items

Production

Packaging materials• Reduce use of packaging materials
Water• Monitor water input and output in each country/region and develop and promote
appropriate measures

FY2021 Targets

Non-consolidated Emission volume per unit of production

30% reduction vs FY06 level

Total emissions

10% reduction vs FY06 level

Action Themes

Segments

Products

n Reduction of CO2 emissions from logistics
Scope

Items

Non-consolidated Emission volume per unit of production

FY2021 Targets
28% reduction vs FY07

—Example initiative for the creation of a zero CO2 emission society—

Reducing
Environmental
Risk and
Establishing aSociety inHarmony with
NatureAction Policies• Develop engines that meet future regulations

Manage chemical substances contained in
products• Investigate chemical substances contained in products and manage switching over of
SVHC*2 and other substances of concern to other substances• Minimize the use of substances of concern by promoting efficient production activitiesn Reduction of VOC*3 emissions

Further reduce emissions of substances of
Production concern

Scope
Non-consolidated(automobile body)

Taking on a challenge of achieving zero CO2 emissions from use of our products or vehicles equipped with our products
GeneralImage of an energy society with zero CO2 emissions

Primary Actions and Targets

Reduce emissions to improve air quality in urban
areas in all countries and regions

Augment activities related to protection of
biodiversity

Items
Emission volume per unit ofproduction (g/m2)

FY2021 Targets

Sixth Environmental Action Plan

Emission volume per unit of production*1 26% reduction vs FY06 level• Improve transportation efficiency through such measures as modal shift and bettercargo loading efficiency
Reduce CO2 emissions from production-related
logistics

FY2021 Targets

Non-consolidated Waste generation volume per unit of production 29% reduction vs FY06 level
Promote effective resource utilization in
production activities• Manage greenhouse gases other than CO2

Logistics

Items

Japan consolidated Waste generation volume per unit of production 27% reduction vs FY06 leveln Reduction of CO2 emissions
GlobalWaste• Reduce the volume of discarded materials by taking action at the source, such as
improving yields and other measures• Promote internal reusen Reduction of waste generation volume• Develop and introduce production engineering technologies with lower CO2 emissions• Reduce CO2 emissions by fully implementing improvement activities on a daily basis• Develop innovative CO2 reduction technologies that utilize clean energy

Establishing a
Production Reduce CO2 emissions from production activities
Low-Carbon
Emission Society

Primary Actions and Targets• Reduce use of resources through longer product life
• Reduce use of resources through standardization, modularization and reduction ofcomponents• Reduce use of resources through development of technologies to enable weight
reduction and downsizing• Promote reuse of components and resources

Environmental Initiatives

The Sixth Environmental Action Plan continues to focus on
the four key areas specified in the Fifth Plan. These are:establishing a low-carbon emission society; establishing a
recycling-based society; reducing environmental risk andestablishing a society in harmony with nature; andSegments

36% reduction vs FY06 level(24 g/m2)• Share the biodiversity guidelines across all Toyota Group companies and contribute to
the expansion of a habitat for living organisms• Formulate and promote plans to link activities and bring more greenery by undertaking
activities for conservation of biodiversity throughout the Toyota Industries Group,
including at consolidated subsidiaries in and outside Japan

PHV & EVFC busHydrogen charging station• Electric car air-conditioning compressor• Motor/inverter• DC-DC converter, etc.

Action Themes

Segments

Action Policies

Augment and promote consolidated
environmental management

PHV & FCV• FC peripheral device• Electric car air-conditioning compressor• FC peripheral device• Electric car air-conditioning compressor• Inverter, etc.

Electric/FC lift truck• Electric powertrain• Electric car air-conditioning compressor• DC-DC converter, etc.
FCV

60

Toyota Industries Report 2016

Promoting
Environmental
Management

Primary Actions and Targets• Build a global environmental management system and promote related activities to:Comply with environment-related laws in each country and region
Formulate a medium-term plan based on visualization of environmental risks andconduct activities to prevent risks from occurring
Enhance risk communication with relevant organizations and local residents
Achieve the highest-level environmental performance in each country and region• Enforce strategic environmental management that integrates environmental activities
and business activities

GeneralEnhance education and enlightenment activities• Extend the scope of Toyota Industries’ enlightenment activities to consolidated
subsidiaries in and outside Japan• Give back to society the outcomes of enlightenment activities

Promote environmental activities in collaboration
with business partners• Ensure compliance with laws and regulations and improve environmental performancebased on the Environmentally Preferable Purchasing Guidelines

Improve eco-conscious brand image• Pursue higher brand image through proactive information disclosure*1: We manage emissions in each business by using either unit of production or unit of sales as a basic unit of emissions. The weighted average of reduction rates of all businesses is used as ourmanagement index.
*2: Substances of Very High Concern*3: Volatile Organic Compounds† Details of the Sixth Environmental Action Plan are available at:
http://www.toyota-industries.com/csr/environment/management/plan6.html/

61

Establishing a Low-Carbon Emission Society
We position the establishment of a low-carbon emission
society as our most crucial environmental task. We havebeen working to reduce CO2 emissions in our global businessactivities and at the same time accelerate our efforts todevelop more environment-friendly products.

CO2 Emissions (Production Activities)
FY2016 Results
Total emissions (non-consolidated)

22% reduction

FY16 target:

18% reduction(vs FY06 level)(vs FY06 level)

Eco-efﬁciency (global)
FY16 target:

1.27 (FY06 = 1.00)(FY06 = 1.00)

Under the Fifth Plan, we set out to achieve a target of
reducing total non-consolidated CO2 emissions fromproduction activities by 18% in ﬁscal 2016 comparedwith the ﬁscal 2006 level. In fiscal 2016, we attained a
22% reduction, exceeding the specified target, by
saving power during summer and reducing peak
power load, which continued from fiscal 2012, and bypromoting joint activities among the manufacturing,production engineering and environment departments
to reduce the amount of air used in production
activities. As for the global eco-efficiency target of 1.27
(FY06 = 1.00), we made various efforts and attained a
result well above the target. In the future, we will
enhance activities toward achieving our new targets forfiscal 2021.

n Development of Melting and Holding Furnace
Before improvement

Generate convection via high temperature
Molten aluminum

Top view

Pumping area Holding furnace

Material input

BurnerRaw
aluminumSide view

Initiatives for Establishment of a Low-Carbon
Emission Societyn CO2 Emissions (Non-consolidated/Consolidated
subsidiaries in and outside Japan)
Consolidated subsidiaries outside Japan
Non-consolidated
Consolidated subsidiaries in Japan
Eco-efficiency
Eco-efficiency (non-consolidated)
Eco-efficiency (consolidated)

1.53

1.31

Total
emissions
(kt)

800

1.00
1.00

1.21

756

1.36

1.23

796

1.43

1.42

1.6
1.4

1.25
858

1.29

1.34

1.2

After improvement

Molten aluminumGood

FY2016 Results
Total emissions (non-consolidated)

17% reduction

FY16 target:(vs FY11 level)(vs FY11 level)

Achievement of “CO2 Cancel”
During the period covered by the Fifth Plan, we undertook arange of activities to reduce CO2 emissions from production
activities. These included visualization of energy loss; efforts
to save power and reduce peak power load; installation of
LED lighting; joint activities among the manufacturing,production engineering and environment departments to
reduce the amount of air used in production activities; andenergy-saving efforts in back-office sections. For improving
product efficiency, we have developed highly efficientelectric car air-conditioning compressors, improved
efficiency of materials handling equipment (fuel efficiency forinternal-combustion types and energy efficiency for electric
types) and developed technologies to reduce power
consumption of textile machinery. In this way, each businessdivision proactively released energy-saving products to themarket. In fiscal 2016, which was the final year of the Fifth
Plan, we reduced 430,000 tons in CO2 emitted fromproducts, greatly exceeding 244,000 tons of CO2 emitted
from production activities, thus successfully achieving thedesignated target.

Toyota Industries has been proactively promoting
development and design of eco-conscious products.
As part of the efforts, we launched the Environmentally
Friendly Product Certification System in fiscal 2007, which
certifies products that possess exceptionally highenvironmental performance, and have been showcasingthese products to the public. With the addition of one
product in fiscal 2016, a total of 19 products have obtained
certification under this system in 10 years since its launch.
We will continue to promote the development of ecoconscious products in the future as well.

Product Certified in Fiscal 2016
GENEO-Ecore (8FBE10 – 8FBE20) compact electric lift
truck with 1.0- to 2.0-ton capacity
Key features to reduce environmental impact
The lift truck is equipped with a newly developed highefficiency AC motor, motor driver and hydraulic control
system, which lead to a significant reduction in power
consumption.

Approx.

17%* lower

power consumption (Approx. 20% longer operation)* Compared with the previous model (The percentage of reduction may vary dependingon operating conditions.)

Annual CO2 emissions from production activities
Annual reduction in CO2 emissions from products(kt)

Heaters

10% reduction

Under the Fifth Plan, we conducted activities toachieve a 10% reduction in CO2 emissions from major
products to be developed during the corresponding
period. We succeeded in attaining this target byfocusing on the development of products that satisfy
the needs for increased energy savings, electrification
and weight reduction based on the keywords of 3Es(Energy, Environmental protection and Ecologicalthinking).

n Progress in CO2 Cancel

Top view

500
Pumping area Holding furnace

1.0
826

Generate convection using magnet

CO2 Emissions from Products (ProductDevelopment)

Establishing a Low-Carbon Emission Society

1.34

The Higashichita Plant, a production base of foundry partsand engines in Aichi Prefecture, has been working to reduce
CO2 emitted from the aluminum melting process.
Previously, a melting and holding furnace used for
melting aluminum utilized thermal convection to create aunidirectional flow of molten aluminum and reduce
temperature variations within the holding furnace, thus
maintaining a constant quality level. However, this required
an extra amount of fuel to raise the temperature to the level
necessary to create thermal convection. At the same time,
an increase in the generation of oxides had also caused aquality issue.
To address this problem, we developed a new melting
and holding furnace that can reduce temperature variationsin the holding furnace without using thermal convection. In
the new furnace, the permanent magnet placed under theholding furnace rotates and generates induced
electromotive force to create a flow of molten metal, whileheaters added at the pumping area eliminates internal
temperature variations.
As a result, the Higashichita Plant successfully cut downcity gas consumption and reduced annual CO2 emissions by
about 440 tons. The generation of oxides was also reduced,
leading to an improvement in quality.

Certification of Environmentally Friendly
Products

Environmental Initiatives

Summary

Summary

Reducing CO2 Emissions by Developing a
Melting and Holding Furnace for AluminumMaterial input
400

790

667

300

600
400

Side view

200

200
100
Good

0

(FY) 06

12

13

14

15

16
Permanent magnet

62

Toyota Industries Report 2016

0
(FY)

12

13

14

15

16

63

Establishing a Recycling-Based SocietyWith a view to establishing a recycling-based society, we
have been striving to reduce resource consumption andwaste generation volume.

Waste Generation Volume (Production
Activities)
FY2016 Results
Eco-efﬁciency (non-consolidated)

1.14

FY16 target:
1.01 (FY13 = 1.00)(FY13 = 1.00)

Coating jigs are attached to the automobile body tocreate space between the body and each door when
applying paint. This space should be kept to a minimum, butconventional jigs create a rather wide gap and sometimes
rub against the body, necessitating retouching. To solve theproblem, a painting operator fabricated jigs by using
commercially available parts and worked with a machinery
manufacturer to repeatedly add modifications, finally coming
up with jigs that create an 80% narrower space thanconventional jigs. New jigs also offer a 10% improvement in
the coating efficiency. Everyone at Toyota Industries willcontinue to maintain keen awareness for improvements in
production activities to constantly manufacture better
products.
Before improvement

Eco-efﬁciency (non-consolidated/consolidated
subsidiaries in Japan)(FY13 = 1.00)

In the Fifth Plan, through activities that engage ourentire supply chain, we achieved eco-efficiency targets
for waste generation volume both on a nonconsolidated basis and for Toyota Industries and its
consolidated subsidiaries in Japan. In the Sixth Plan,
we will encourage effective utilization of resources,
including internal reuse of waste, to attain thedesignated waste generation volume target per unit ofproduction.

After improvement
Registered utility modeln Separation Tank
Exhaust

To the paintrecovering tank

Initiatives for Establishing a Recycling-BasedSocietyn Waste Generation Volume (Non-consolidated/
Consolidated subsidiaries in Japan)
Non-consolidated

Consolidated subsidiaries in Japan

Eco-efficiency (non-consolidated)
Waste
generation
volume (kt)Eco-efficiency

Eco-efficiency (Japan consolidated)

1.14
1.00

1.02

1.03
1.03

131

125

119

111

13

14

15

16

We have been promoting kaizen by karakuri initiatives
to attain kaizen (improvement) by utilizing Japan’s
traditional, simple mechanical systems called karakuri,
which do not require power generated by motors orother devices.
A karakuri pump conceived in 2013 is a case inpoint. As of October 2015, more than 200 units havebeen fielded in four of our production bases. The
pump has been introduced at 10 consolidated
subsidiaries and business partners as well.
One such consolidated subsidiary, Iwama LoomWorks, Ltd., has devised its original karakuri pump,which does not require any in-house processing ofparts and can be created by just assemblingcommercially available parts. As seen in this example,
our karakuri pump is evolving at each company where
it has been instituted.

Fine powder (paint)
1.0

1.02

Evolving Karakuri Pump

1.2 Good

1.14

1.00

Creators of the separation tank

Establishing a Recycling-Based Society

1.14

FY16 target:
1.01 (FY13 = 1.00)

The Takahama Plant, a production base of materials
handling equipment in Aichi Prefecture, has been working to
cut down its consumption of paint by creating a tank toseparate the recovered paint into reusable paint and foreign
substances.
A certain amount of powder paint is used to coat lift
trucks. We already recover and reuse powder paint that did
not settle on lift truck parts but had discarded the paintcollected during the periodic cleaning of painting lines
because it contained metal fragments and other foreign
substances. After considering a way to reuse wasted paint,
two operators teamed up to create a separation tank thatuses air to separate powder paint and foreign substances.
When air is sent into the box set with a pored filter, powder
paint floats into the air and is recovered for reuse while
foreign substances remain at the bottom of the box. They
selected the optimum air pressure and diameter of theexhaust pipe through repeated tests. We have confirmedthat the finished coating does not have any quality issues
when using the collected paint after mixing it with new paint.
As a result, the amount of paint discarded has been
reduced to one-tenth of the previous amount. We believethat this device can be used for other production lines thatuse powder paint and will continue to expand our efforts to
reduce the amount of resources used in products.

Environmental Initiatives

Summary

Reusing Paint to Reduce Waste Volume

Foreign substances
remaining at the bottom

Filter with many pores
to disperse air

200

100

Good

0
(FY)

Reducing Paint Consumption with Better
Coating Jigs

Air

As part of efforts to reduce consumption of paint, theNagakusa Plant, a production base of automobiles in Aichi
Prefecture, refined coating jigs used in the automobile body
painting process.

Air

Iwama Loom Works’ karakuri pumpevolved to eliminate parts processing
Showcasing continuous improvements on coating jigs

64

Toyota Industries Report 2016

65

Reducing Environmental Risk and Establishinga Society in Harmony with Nature
We work to ensure the prevention of environmental incidents
by fully enforcing the management of chemical substances in
product development and production activities andsystematically monitoring drainage systems.

VOC Emissions (Production Activities)
FY2016 Results
Emissions per unit of production (non-consolidated/
automobile body)

24

g/m2

FY16 target:
24g/m2

Status of Compliance with Environmental Laws
In fiscal 2016, there was one incident in which plant effluents
exceeded standard values at a consolidated subsidiary
within the Toyota Industries Group. The incident has beenreported to the relevant authorities, and corrective measures
have already been completed by the subsidiary concerned.
Subsequent confirmations have also been made to ensurethat there are no recurrences.
Toyota Industries carries out soil and groundwater
surveys at its plants and performs purification when thesurvey results reveal that soil or groundwater contains
substances exceeding standard values. We also disclose
the progress of purification efforts in the corresponding
Toyota Industries Report and at local community meetings.
In a voluntary soil and groundwater survey conducted at
the Kariya Plant in Aichi Prefecture, we have confirmed thatcertain substances were above their standard values. We
reported the incident to the Aichi prefectural government on
December 22, 2015 and June 1, 2016 and disclosed therelevant information to the public.
In accordance with the results of the survey, we are
implementing purification measures under the guidance of66

Toyota Industries Report 2016

At the Higashichita Plant in Aichi Prefecture, a wastewater
treatment facility was situated in a location facing Kinuura
Bay.
With measures against disasters, including earthquake
and tsunami, becoming increasingly important, we built a
new facility inland to prevent damage to and failure of the
facility, which may result from disaster-induced collapse of
seawalls and possible irregular effluent discharges on andoff the premises.
In the new facility, treatment tanks are installed above
ground, which makes it easier to inspect the exterior of thetanks and find cracks and other signs of potential leakage of
irregular discharges. Moreover, these aboveground tanks
have reduced the risk of effluent infiltration into the ground.
We have also raised the level of the wastewater
treatment process itself by separating the plant’s drainage
into six routes and constantly monitoring the water quality ateach route.
The lowered risk offacility failure due todisasters, including
collapse of seawalls,
provides an additional
advantage in reducing thetime required to restore
production activities
following a disaster.

Wastewater treatment facility

Yasuharu AraiGroup manager,
Risk Reduction Group, Environment Office,Plant Engineering & Environment Dept.
(The position and department are as of March 31,
2016.)We have finally completed the long-awaited relocation of thewastewater treatment facility after giving thoroughconsideration for ensuring early recovery after a disaster,
installing treatment tanks above ground and improving thequality of wastewater treatment. We repeatedly conductedrisk assessments with the relevant departments andconcentrated on creating a safe, easy-to-manage facility as
well as reducing environmental risks. We will continue tocollaborate with the relevant departments and undertake
improvements of the facility for even greater performance.

*1: Environmental AP Cards provide an outline of and responsive action and procedures
required for each incident along with points to keep in mind during the worst casescenario in which a similar incident occurs.

Separation of Drainage Systems to Prevent
External Leakage of Irregular Effluent
Discharges
As part of a measure to prevent external leakage of irregular
effluent discharges, we have been making Company-wide
efforts to separate drainage systems since fiscal 2012.
Separation of drainage systems means to discharge
wastewater from production processes, initial rainwater*2,
non-industrial wastewater and other rainwater off thepremises after applying appropriate treatment depending on
respective water qualities.
From fiscal 2015 to fiscal 2016, we conducted drainage
system separation at two plants in Aichi Prefecture: the
Kariya Plant, a home to the administrative departments ofthe Head Office as well as a development and production
base of the Textile Machinery Division and Compressor
Division; and the Kyowa Plant, a base for the Technology
Development Department of the Head Office.
At both plants, rainwater and wastewater fromproduction processes had been sent to the treatment facility
using the same route. In separating drainage systems, we
implemented the following measures.

*2: Rainwater at the beginning of rainfall. Contains dirt on roads and other surfaces andneeds to be appropriately treated before it can be released externally.

Strengthening Management of Chemical
Substances
Many of the chemical substances needed for our production
activities may cause adverse effects on the environment.
Thus, appropriate management of chemical substances is
crucial in ensuring safe handling and minimizing potential
harmful effects.
To appropriately manage chemical substances containedin raw materials and products, we conducted a survey
targeting 20 consolidated subsidiaries outside Japan tocheck the status of their management practices. Of thesesubsidiaries, we decided to provide relevant support toseven companies.
In fiscal 2016, we provided assistance to one subsidiaryin urgent need of establishing a system to manage chemical
substances.
In the future, we will provide support to the remaining six
subsidiaries and continue to undertake activities to prevent
violations of chemical substances regulations at production
bases outside Japan.

Reducing Environmental Risk andEstablishing a Society in Harmony with Nature

Under the Fifth Plan, we set a fiscal 2016 target of
attaining emission volume per unit of production below
24 g/m2 for volatile organic compounds (VOCs) fromthe automobile body painting process and undertook
activities accordingly. In fiscal 2016, which was the
final year of the Fifth Plan, we continued our efforts toincrease the recovery rate and enhance maintenanceand management of thinner, a solvent used forcleaning. Consequently, emission volume per unit ofproduction in fiscal 2016 was 24 g/m2.

Building a New Wastewater Treatment Facility
Designed to Prevent External Leakage of Irregular
Effluent Discharges in Case of a DisasterToyota Industries engages in awareness-raising activities tofamiliarize every employee with the details of environmental
irregularities and potentially serious near-accidents that haveoccurred in the past and prevent similar incidents fromoccurring.
In fiscal 2016, we conducted a 100-day campaign forzero environmental irregularities and near-accidents using
our original Environmental Accidental Pattern (AP) Cards*1.
During the campaign, the head of each department
chose Environmental AP Cards that are most relevant to his
or her departments and explained to employees the detailsof an incident shown on each card. Employees then createda collection of written declarations to be observed by eachmember as a reminder to prevent such incidents. By postingthese declarations in the workplace for 100 days, we
encouraged the establishment of an environment where
employees caution each other, thereby raising theirenvironmental and accident awareness.

As a result, we have completed the separation ofdrainage systems at all plants in Japan.

Environmental Initiatives

Summary

Aichi Prefecture while placing the highest priority on not tocause any inconvenience to local residents.
Measurement results are available at:https://www.toyota-shokki.co.jp/csr/environment/ (inJapanese)

100-Day Campaign for Zero Environmental
Irregularities and Potentially Serious NearAccidents

Meeting with employees of a local production base

1 Establish a route to send only the wastewater fromproduction processes to the wastewater treatment facility
2 Install water quality monitoring equipment for rainwater toconfirm that rainwater quality is suitable for release into
public areas
3 Connect a drainage system of non-industrial wastewaterof the Kyowa Plant to the public sewerage system

Post-meeting education on management of chemical substances

67Environmental Management
Toyota Industries proactively discloses its initiatives forconservation of biodiversity and other environmental
information.

n GHG Emissions in Supply Chain (FY2016)

organisms

Calculating Greenhouse Gas (GHG) Emissions
in the Supply Chain
We recognize that measuring the three scopes defined by
the GHG Protocol and turning the results into specific efforts
to reduce CO2 emissions are important in creating a lowcarbon society. Scopes 1 and 2 are GHG emissions fromour business activities, the former being direct emissions
from our use of fossil fuels and the latter being indirectemissions from the use of purchased energy resulting fromgeneration of electricity by power plants and other facilities.

68

Toyota Industries Report 2016

Scope 2
(1.5%)

Tree-Planting Event Held during Environment
Month
Kirloskar Toyota Textile Machinery Pvt. Ltd. (KTTM)
Subsidiary producing textile machinery

During Environment Month in June 2015, KTTM hosted
various events to raise employees’ awareness ofenvironmental conservation. At one such event, employees
planted trees on the company premises. This event is aimed
at nurturing a truly natural (not man-made) forest byidentifying indigenous trees, growing saplings andperforming mixed and dense planting of primary species oftrees. In this way, KTTM has already planted 5,000 saplings
on its 1,600 m2 land. KTTM plans to conduct this treeplanting activity on a periodical basis.

Scope 3 / Category 11(92.8%)

Environmental Learning Using Our Biotope
In August 2015, we invited local children to our biotope,
which we have developed and completed on Companyowned idle land in Obu City, Aichi Prefecture, and held anature observation event to explore aquatic organisms alongwith the work to remove mud from the pond within the
biotope. The children caught organisms living in the pondwith landing nets, looked up their names in picture books
and learned about non-native species as well as about thebiotope itself. Some ofthem were delighted to see
many fish in theirneighborhood. We willcontinue to develop our
biotope in the hope ofcontributing to conservation
Observation event to explore aquaticof the local ecosystem.

Scope 1
(0.4%)

Scope 3 / Other(5.3%)

India

Emissions from Toyota
Industries’ businessactivities
Emissions other thanfrom Toyota Industries’
business activities

Scope 1system, which is expected to reduce CO2 emissions by 1.32
tons per year. As a result of these and other environmental
initiatives, LTE obtained ISO 50001 certification in December
2014 and attained good results in the renewal evaluation
held in December 2015.

Germany
Reducing Environmental Risks by Improving
Method to Store Waste Oil
TD Deutsche Klimakompressor GmbH (TDDK)
Subsidiary producing car air-conditioning compressors

TDDK made improvements to the storage of waste oil
leftover from production. Previously, this oil had been
stored in ordinary containers with no special precautions.
A thorough internal analysis concluded the waste oil to bea harmful substance because it is flammable and can pollute
water. As a result, TDDK decided to install special oil storage
tanks that are two-ply and equipped to prevent overfilling
and leakage. Both audible and visual signals occur if spillage
takes place. Improvements to the storage method brought
about various benefits, including enhanced safety, fire
protection and environmental protection.

Direct emissions from Toyota Industries through theuse of fossil fuels, etc.

Indirect emissions from the use of purchased energy
Scope 2 resulting from generation of electricity by power
plants, etc.

Environmental Management

Toyota Industries has been collaborating with the Aichi
prefectural government in its initiative to foster thedevelopment of ecological networks within the entire
prefecture.
In fiscal 2012, we joined the Chita Peninsula Ecological
Network Council and have since been cooperating withdiverse organizations, including the prefectural government,
companies, NPOs, expert institutions and student
organizations in promoting the creation of green zones
closely linked to the local natural environment. In fiscal 2016,
we joined another council, the Southern Nishi-Mikawa
Ecological Network Council. We will continue to undertake
initiatives that contribute to the formation of ecologicalnetworks through cooperation with other organizations.

Activity Examples of Consolidated Subsidiaries (Outside Japan)

Environmental Initiatives

Collaboration with the Aichi Prefectural
Government’s Environmental Initiative

Scope 3 emissions are indirect emissions associated witheach product from the purchase of raw materials to end use
by customers and disposal.
In the fiscal 2016 results, combined Scope 1 and 2
emissions accounted for 1.9% of the total emissions, with
Scope 3 emissions reaching 98.1%. The largest source ofemissions, which accounted for 92.8%, was Category 11(Use of sold products) under Scope 3. This was because
the figure included an estimate of future GHG emissions ofour products (lift trucks, vehicles, engines, etc.) throughout
their lifecycle (during use until disposal).
Going forward, we will continue to monitor GHG
emissions within the entire supply chain and accordingly
promote CO2 emissions reduction activities.

Before improvement

Emissions associated with purchase of raw materials,
Scope 3 end use of Toyota Industries’ products by customers
and disposal of products

Detailed data is available at:
http://www.toyota-industries.com/csr/environment/
seisan/scope3.html

Proactive Disclosure of Environmental
Information
Toyota Industries fosters environmental communication with
our stakeholders through proactive disclosure ofenvironmental information. In fiscal 2016, Toyota Industries
obtained the disclosure score of 91 (against the full score of100) and was evaluated to be in the performance band of C
in the CDP* climate change survey.
Since fiscal 2015, we have been participating in the
Ministry of the Environment’s project for the establishment ofa framework for disclosure of environmental information andexamining the ideal way to disclose our environmental
information. We will continue to upgrade our method of
disclosure and contents to be disclosed.
*A n international NGO undertaking a project through collaboration among institutional
investors to call for disclosure of strategies against climate change issues and GHG
emissions data to leading companies around the world

Planting an indigenous tree

Italy
Installation of Zero CO2 Lighting
L.T.E. Lift Truck Equipment S.p.A. (LTE)Subsidiary producing materials handling equipment parts
After improvement

Based on the Toyoda Precepts and Toyota Industries’ Vision
2020, LTE has been engaging in a number of activities with afocus on respect for the planet, such as reducing GHG
emissions and promoting recycling.
When introducing new equipment, LTE conducts athorough energy survey in accordance with ISO 50001
guidelines and environmental zero-impact measures before
purchasing equipment with optimum performance.
LTE has also replaced lights of all plants with LED lighting
to reduce electricity consumption.
Looking ahead, LTE plans to install a rooftop photovoltaic
system to supply power to a certain portion of its lighting69

Environmental Impact Flow and Environmental
Accounting

Financial Section / Corporate Information

In this section, we provide an overall picture of environmental impact resulting from our global business activities and report
the results of environmental accounting (environmental conservation cost, environmental conservation benefits and economic
benefits of environmental conservation initiatives).

Environmental Impact Flow
Environmental
Impact Flow

11,403 TJ*1
1,107,197 MWh
61,590 km3N
5,159 t4,736 kl
6,492 t5,318 tR&D/Design
Procurement
Production*1: Terajoule is a unit used to measure heat. 1 TJ = 1012 joules

Transportation/Sales■ Raw Materials [consolidated]
Raw material consumption
745,407 t■ Water [consolidated]
Water consumption
4,136 km3
■ Chemical Substances [Japan consolidated]
PRTR law*2 designated substances
1,370 tOUTPUT

INPUT■ Energy [consolidated]
Energy consumption
Electricity
City gas
LPG
Petroleum products
Coal products
LNG

n Financial Section■ Into the Air [consolidated]
CO2 emissions
Greenhouse gases other than CO2
CO2 from logistics
SOx (Sulfur oxides)
NOx (Nitrogen oxides)
VOC (Volatile organic compounds)

789,838 t-CO2
4,919 t-CO2
33,464 t-CO2
156 kg130 t
1,489 t■ Chemical Substances [Japan consolidated]
Emissions/transfers of PRTR
law designated substances

503 t■ Waste [consolidated]
Usage

Waste generation

Recovery/Recycling

Water pollutants
Discharge of treated wastewater

Fiscal 2016 Environmental Accounting*3
Scope of data collection: Toyota Industries Corporation
Period of data collection: April 1, 2015 – March 31, 2016
*3: E
 nvironmental accounting data is collected in compliance with the Ministry of theEnvironment’s Environmental Accounting Guidelines 2005 Edition.
(Millions of yen)

FY2016FY2015Investment Expenses Investment Expenses
Pollution prevention costs
525
147
944
189
Business Global environmental
716
3,156
528
4,301
area costs conservation costs
Resource recycling costs
113
193
132
160
Category

Upstream/downstream costs

0

71

0

Management costs

6

166

3

221

Research and development costs

6

309

28

1,437

0

89

2

628

Environmental remediation costs
Total

50
0
1,416
4,131
5,547

142

24
6
1,661
7,084
8,745

n Environmental Conservation Beneﬁts
Environmental Impact
CO2
Generation of waste products
Water

Comparison with Previous Fiscal Year5,564 t decrease
8,433 t decrease(Millions of yen)

Details
Returns from sale of recycled waste products
Energy cost reductions
Cost reduction Cost reduction by resource savings(including reductions in amount of water use
and wastewater treatment costs)
Total

70

Toyota Industries Report 2016

P74–75

Consolidated Statements of Income

P76

Consolidated Statements of Comprehensive Income

P77

Consolidated Statements of Changes in Net Assets

P78–79Consolidated Statements of Cash Flows

P80

26 t
2,169 km3

On-Site Veriﬁcation
Every year, Toyota Industries Head Office’s Plant Engineering& Environment Department takes the initiative in conducting
on-site verification of the accuracy and consistency ofenvironmental data included in the Toyota Industries Report.
The results for fiscal 2016 are as follows.
On-Site Veriﬁcation Sites

n Corporate Information
Board of Directors, Audit & Supervisory Board Members
and Managing Officers

P81

Major Production Bases

P82

Investor Information

P83

Note:
For details on the consolidated financial statements, please refer to the separate publication,
which is also posted on the following Website: www.toyota-industries.com/

Toyota Industries Corporation• Kariya Plant (textile machinery and car air-conditioning
compressors) and Nagakusa Plant
Consolidated subsidiaries in Japan• Nishina Industrial Co., Ltd. and Tokaiseiki Co., Ltd.
Items to be Veriﬁed

1. Adequacy of the scope of data collection; validity of datacollection and calculation methods; validity of internalverification
2. Trustworthiness and accuracy of collected/calculated data
as well as data reported to the Head Office; accuracy of
methods of reporting to the Head Office
Results

263,798 m3 decreasen Economic Beneﬁts of Environmental Conservation Initiatives
Item
Revenue

Consolidated Balance Sheets

79,688 t

Environmental Accounting and On-Site Veriﬁcation

Social contribution activity costs

P72–73■ Into Waterways [Japan consolidated]*2: Short for Pollutant Release and Transfer Register, the PRTR law is a scheme whereby businesses measure the release and transfer of PRTR designated pollutants and report theirperformance to the government. The government then compiles this data and releases it to the public.

n Environmental Conservation Cost

Consolidated Eleven-Year Summary

Amount
3,850
1,169
91
5,110

1. The verified sites retained original data (evidence) for all
statistics, which were confirmed to be valid as was themethod of data collection.
2. All discrepancies found during verification have beencorrected after respective causes have been identified.
3. Considerations of improvements will be made for datacollected using complex collection methods that may resultin calculation errors.

71Consolidated Eleven-Year Summary

Toyota Industries Corporation
Years ended March 31

Millions of yen

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

¥2,228,944¥2,166,661¥2,007,856¥1,615,244¥1,543,352¥1,479,839¥1,377,769¥1,584,252¥2,000,536¥1,878,398¥1,505,955

For The YearNet sales
Operating profit (loss)

127,970

117,574

107,691

77,09870,092

68,79822,002(6,621)

96,853

89,95464,040Ordinary profit

185,398

170,827

138,133

86,83680,86673,911

31,756

14,343

126,488

108,484

80,635

Profit (loss) attributable to owners of the parent

183,036

115,263

91,705

53,11958,59447,205(26,273)(32,767)

80,46059,46847,07775,438¥126,395¥109,479¥89,459¥58,404

26,963¥ 104,495¥ 104,205¥ 129,023¥130,121

Depreciation

77,36670,78264,153

57,954

59,83062,372

73,23887,21983,74474,44964,423

Research and development expenses

65,44047,78546,32639,05732,07027,78826,826

33,64636,75034,54831,166582.58¥367.06¥292.76¥170.36¥188.02(84.33)¥ (105.16)

582.57366.99292.57170.35188.02151.51(84.33)(105.16)257.43189.66146.02

Total net assets per share

6,481.97

7,500.16

5,640.08

4,719.66

3,662.26

3,300.17

3,390.02

2,987.16

4,483.32

5,612.11

5,044.45

		Cash dividends per share

120.00110.00

85.00

55.00

50.00

50.00

30.00

40.00

60.00

50.00

38.00

Total assets¥4,199,196¥4,650,896¥3,799,010¥3,243,779¥2,656,984¥2,481,452¥2,589,246¥2,327,432¥2,965,585¥3,585,857¥3,245,341

Investment in tangible assets¥¥

38,254¥Financial Section /Corporate Information

2016

Per share of common stock (yen):		

Earnings (net loss) per share—basic

		Earnings per share—diluted¥

151.51¥¥

257.50¥

189.88¥

146.16

At Year-End
Total net assets

2,113,948

2,425,929

1,829,326

1,524,933

1,197,841

1,075,939

1,104,929

977,670

1,453,996

1,810,483

1,611,227

Common stock

80,46280,46280,46280,46280,46280,46280,46280,46280,46280,46280,462

Number of shares outstanding (excluding treasury stock) (thousands)

314,226

314,155

313,730

312,207311,687

311,564

311,570

311,577

311,589

312,075

319,320¥ 234,957¥182,191¥155,059¥151,299¥101,718¥ 153,661¥ 203,452

65,768¥ 188,805¥ 177,467¥ 131,784

Net cash used in investing activities(526,349)(160,769)(118,483)(274,210)(9,403)(187,574)(36,855)(114,217)(138,789)(164,446)(205,013)

Net cash provided by (used in) financing activities

130,923(8,918)

6,183

7,050

10,279(85,728)(38,230)

120,971(33,992)(19,749)

85,172

Cash and cash equivalents at end of year

92,399248,706

226,406

179,359

296,811

195,566

317,590

188,011

121,284

108,569

112,596

5.7

5.4

5.4

4.8

4.5

4.6

1.6

(0.4)

4.8

4.8

4.3

Cash FlowsNet cash provided by operating activities¥Consolidated Eleven-Year Summary		¥Indices
Operating profit margin (%)¥ 361,893¥ 248,854¥ 216,175¥ 155,234¥ 161,876¥ 150,481

71,608¥ 222,125¥ 191,007¥ 150,674

Return on equity (ROE) (%)

8.3

5.6

5.7

4.1

5.4

4.5

(2.6)

(2.8)

5.1

3.5

3.5

Return on assets (ROA) (%)

4.1

2.7

2.6

1.8

2.3

1.9

(1.1)

(1.2)

2.5

1.7

1.7

EBITDA (millions of yen)¥90,521¥

D/E ratio (%)

43.7

32.0

39.9

45.4

53.8

56.8

60.3

68.6

37.4

29.9

29.4

Equity ratio (%)

48.5

50.7

46.6

45.4

43.0

41.4

40.8

40.0

47.1

48.8

49.7

51,45852,52349,33347,41243,51640,82538,90339,91639,52836,09632,977

Number of employees (persons)

1. Investment in tangible assets and depreciation apply to property, plant and equipment. They do not include materials handling equipment leased underoperating leases.
2. Earnings (net loss) per share is computed on the average number of shares for each year.
3. Operating profit margin = Operating profit (loss) / Net sales
4. EBITDA = Income before income taxes + Interest expenses - Interest and dividends income + Depreciation and amortization (including intangible assets
such as materials handling equipment for leasing and goodwill)
5. ROE and ROA are computed based on the average total net assets and total assets, respectively, for each year.
Investment securities are stated at market value.
6. D/E ratio = Interest-bearing debt / (Total net assets – Subscription rights to shares – Non-controlling interests)
7. Equity ratio = (Total net assets - Subscription rights to shares - Non-controlling interests) / Total assets

72

Toyota Industries Report 201673

Consolidated Balance Sheets

Toyota Industries Corporation
For the years ended March 31, 2016 and 2015
Millions of yen

2016

2015

¥ 352,302—
280,80770,964
10,871
92,29841,86863,03525,185111,306(3,796)¥247,273
58,250265,504
55,86834,08586,86543,32064,651
24,23468,603(3,756)¥ 214,162
170,844
19,99941,41125,75447,473
149
644
153,195¥205,816
99,73647,05345,66529,245
13,686
636
626
210,721

		Total current liabilities

673,636

653,187

		Total current assets

1,044,843

944,901

Long-term liabilities:
		Bonds payable
		 Long-term loans payable		Lease obligations
		 Deferred tax liabilities
		 Net defined benefit liabilities
		 Other long-term liabilities

Fixed assets:
		Property, plant and equipment:			Buildings and structures
				Accumulated depreciation
				Buildings and structures, net
			 Machinery, equipment and vehicles
				Accumulated depreciation				 Machinery, equipment and vehicles, net
			 Tools, furniture and fixtures
				Accumulated depreciation				 Tools, furniture and fixtures, net
			Land			Construction in progress

191,555
508,593
98,771500,077
90,92021,692

185,998
421,154
117,185
737,268
86,766
23,404

409,545(249,496)
160,048
1,224,541(773,207)
451,334
130,840(103,390)
27,449
119,897
22,521

423,670(250,488)
173,181
1,068,628(747,732)
320,895
159,660(120,309)
39,351
120,652
53,451

		Total long-term liabilities
Total liabilities

1,411,611
2,085,248

1,571,779
2,224,967

80,46280,462

			Total property, plant and equipment

781,251

707,532

		Intangible assets:
			Goodwill
			Other intangible assets

105,562
789,502(41,266)

105,592
644,165(41,509)76,98093,234

95,98596,716

			Total intangible assets

170,214

192,702934,260

788,711

Accumulated other comprehensive income:		 Valuation difference on available-for-sale securities
		 Deferred gains or losses on hedges
		 Foreign currency translation adjustment
		 Defined benefit plan adjustments

1,105,544
360
22,813(26,169)

1,523,393(19)
55,598(11,463)

		Total accumulated other comprehensive income
Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets

1,102,547
6
77,133
2,113,948¥4,199,196

1,567,509
72
69,6362,425,929¥4,650,896

Liabilities
Current liabilities:
		 Trade notes and accounts payable
		 Short-term loans payable		 Current portion of bonds
		Lease obligations
		Accounts payable—other		 Accrued income taxes
		 Deferred tax liabilities
		 Allowance for bonuses to directors
		 Other current obligations

Net Assets
Shareholders’ equity:
		Capital stock			Authorized — 1,100,000,000 shares
			 Issued— 325,840,640 shares as of March 31, 2016					 325,840,640 shares as of March 31, 2015
		Capital surplus
		Retained earnings
		Treasury stock			 11,613,812 shares as of March 31, 2016
			 11,684,749 shares as of March 31, 2015
		Total shareholders’ equity

		Investments and other assets:
			Investment securities
			Long-term loans receivable
			Deferred tax assets
			Lease investment assets
			 Net defined benefit assets
			 Other investments and other assets
			 Allowance for doubtful accounts

1,945,123
51,911
14,109164,775
8,215
20,154(1,403)

2,593,522
4,693
18,228135,958
28,28925,929(860)

			Total investments and other assets
		Total fixed assets
Total assets

2,202,886
3,154,352¥4,199,196

2,805,760
3,705,995¥4,650,896

Consolidated Balance Sheets

AssetsCurrent assets:
		 Cash and deposits
		 Cash deposits for cash collection and deposit services
		 Trade notes and accounts receivable
		 Lease investment assets
		Short-term investments
		 Merchandise and finished goods
		 Work in process
		 Raw materials and supplies
		 Deferred tax assets
		 Other current assets
		 Allowance for doubtful accounts

Toyota Industries Report 2016

2016

2015

Financial Section /Corporate Information

74

Millions of yen

75Consolidated Statements of Income

Consolidated Statements of Comprehensive Income

Toyota Industries Corporation
For the years ended March 31, 2016 and 2015

Toyota Industries Corporation
For the years ended March 31, 2016 and 2015
Millions of yen

Millions of yen

2015¥2,228,944¥2,166,661

ProfitCost of sales

1,804,759

1,765,861

Other comprehensive income:Gross profit

424,184

400,799

Selling, general and administrative expenses:

Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

2016

2015

¥191,772¥121,674(417,966)

501,084379

120

Sales commissions

16,944

16,291

Foreign currency translation adjustment(35,659)

13,362

Salaries and allowances

100,775

97,038Retirement benefit expenses

5,232

4,176

Defined benefit plan adjustments(14,872)(6,725)

Depreciation

14,76913,96843,054

41,930115,436

109,819

Total selling, general and administrative expenses

296,214283,224

127,970

117,574

Interest income

15,661

12,357

Dividends income

65,01552,955242

735

Operating profit
Non-operating profit:

Gain on sales of marketable securities

641

1,790

Other non-operating profit

11,355

10,878

Total non-operating profit

92,91778,717

17,341

15,876

Loss on disposal of fixed assets

1,675

1,665

Other non-operating expenses

16,471

7,922

Total non-operating expenses

35,48825,465

185,398

170,827

89,819—Equity in net earnings of affiliated companies

Non-operating expenses:
Interest expenses

Ordinary profit

109
507,952(277,053)

629,626

Owners of the parent(281,925)

620,368

Non-controlling interests

4,871

9,258

Comprehensive income
Profit attributable to:Consolidated Statements of Income /Consolidated Statements of Comprehensive Income

Research and development expenses
Others(707)(468,826)

Share of other comprehensive income of associates accounted for using equity method
Total other comprehensive income

Financial Section /Corporate Information

2016

Net sales

Extraordinary profit:
Gain on sales of shares of subsidiaries

89,819—Profit before income taxes

Total extraordinary profit

275,218

170,827
41,181

Income taxes—current

79,514

Income taxes—deferred

3,931

7,971

Total income taxes

83,445

49,153

191,772

121,674

8,735

6,410

¥ 183,036¥115,263

ProfitProfit attributable to non-controlling interests
Profit attributable to owners of the parent

Yen
Earnings per share—basic¥  582.58

Earnings per share–diluted

582.57366.996,481.97

7,500.16

120.00110.00Net assets per share
Cash dividends per share76

Toyota Industries Report 2016¥  367.06

77

Consolidated Statements of Changes in Net Assets

Toyota Industries Corporation
For the year ended March 31, 2016
Millions of yen

Millions of yen

Shareholders’ equity

Shareholders’ equity

Capital stock

Capital surplus

Retainedearnings

Treasury stock

Total
shareholders’equity¥80,462¥105,592¥644,165¥(41,509)¥788,711

Balance at March 31, 2014

Cumulative effects of changes in accounting
policies
Restated balance

80,462Retainedearnings

Treasury stock

Total
shareholders’equity¥80,462¥105,654¥563,957¥(43,012)¥707,062

105,592

644,165(41,509)788,711

Restated balance(3,668)80,462

105,654560,28800(37,699)

Profit attributable to owners of the parent

183,036

Repurchase of treasury stock(30)

Disposal of treasury stock

(20)

263

232

(31,386)

115,263

115,263(30)

145,337

242

145,549¥80,462¥105,562¥789,502¥(41,266)¥934,260

Total changes of items during the period¥1,523,393¥ (19)

Foreigncurrencytranslation
adjustment¥55,598

Definedbenefit planadjustments

—

(61)

83,876

1,502

85,317¥105,592¥644,165¥(41,509)¥788,711

Millions of yen

Accumulated other comprehensive income
Total
Subscription
Nonaccumulated
rights tocontrollingothersharesinterests
comprehensive
income¥(11,463) ¥1,567,509¥ 72¥69,636

Valuation
Deferred gains
difference onor losses onavailable-forhedges
sale securities

Total net
assets¥2,425,929

Cumulative effects of changes in accounting
policies
1,523,393(19)

55,598(11,463)

1,567,509

72

69,63678

2,425,929

0

Dividends from surplus(37,699)

Profit attributable to owners of the parent

183,036

Repurchase of treasury stock(20)

Disposal of treasury stock232

Toyota Industries Report 2016

¥1,022,525¥(139)¥44,649

Definedbenefit planadjustments

Total
Subscription
Nonaccumulated
rights tocontrollingothersharesinterests
comprehensive
income¥ (4,629) ¥1,062,404¥ 330

Restated balance

1,022,525(139)

44,649(4,629)1,062,404

330

Total net
assets¥59,528¥1,829,326

256(3,412)

59,784

1,825,914

Changes of items during the period

Change in ownership interest of parent
related to transactions with non-controllinginterests

Balance at March 31, 2016

Balance at March 31, 2014

Foreigncurrencytranslation
adjustment

Cumulative effects of changes in accounting
policies

Changes of items during the period

Total changes of items during the period

(20)
1,461

¥80,462

Millions of yen

Valuation
Deferred gains
difference onor losses onavailable-forhedges
sale securities

(20)
1,523

Net changes of items other thanshareholders’ equity
Balance at March 31, 2015

—

(61)

Disposal of treasury stock

183,036(20)(31,386)

Profit attributable to owners of the parent

Accumulated other comprehensive income

Net changes of items other thanshareholders’ equity

703,393

Dividends from surplus
Repurchase of treasury stock(37,699)

Net changes of items other thanshareholders’ equity

Restated balance(43,012)

Consolidated Statements of Changes in Net Assets

Dividends from surplus

Balance at March 31, 2015

(3,668)Changes of items during the period

Change in ownership interest of parent
related to transactions with non-controllinginterests

Balance at March 31, 2016

Capital surplus

Cumulative effects of changes in accounting
policies

Changes of items during the period

Total changes of items during the period

Capital stock

Financial Section /Corporate Information

Balance at March 31, 2015

Toyota Industries Corporation
For the year ended March 31, 2015

(417,849)

379(32,785)(14,706)(464,962)

(65)

7,496

(457,531)(417,849)

379(32,785)(14,706)(464,962)

(65)

7,496

(311,981)¥1,105,544¥360¥22,813¥(26,169) ¥1,102,547¥ 6¥77,133¥2,113,948

Dividends from surplus(31,386)

Profit attributable to owners of the parent

115,263

Repurchase of treasury stock(20)

Disposal of treasury stock

1,461

Net changes of items other thanshareholders’ equity
Total changes of items during the period
Balance at March 31, 2015

500,868

120

10,949(6,833)505,105

(258)

9,852

514,698

500,868

120

10,949(6,833)505,105

(258)

9,852

600,015¥1,523,393¥ (19)¥55,598¥(11,463) ¥1,567,509¥ 72¥69,636¥2,425,929

79

Board of Directors, Audit & Supervisory Board
Members and Managing Officers

Consolidated Statements of Cash Flows(As of June 10, 2016)

Board of Directors

Toyota Industries Corporation
For the years ended March 31, 2016 and 2015
Millions of yen

Toyota Industries Report 2016¥ 275,218
150,011788(80,677)
17,341(641)(27,464)(6,932)
10,773(123,752)
214,665
80,674(17,154)(43,227)
234,957¥170,827
127,463663(65,312)
15,876(1,790)(16,129)(20,142)
5,100(30,048)
186,507
65,077(15,622)(53,770)
182,191(152,943)
14,702(716)
375(9,717)140,097(4,775)
5,732(237,898)(277,643)(3,561)(526,349)(169,842)
11,244(6,713)
1,158
(947)
—
(783)
711
12,896—(8,495)(160,769)

(155)
524
83,408
153,980(38,574)
25,555(46,966)(20)(37,699)(1,860)102(7,370)130,923
4,161(156,307)248,706¥ 92,399——(24,861)
119,053(40,478)
20,000(29,284)(20)(31,386)(516)
36(21,460)(8,918)9,797
22,300226,406¥248,706

ChairmanPresident

Tetsuro Toyoda

Akira Onishi

Executive Vice President

Executive Vice President

Executive Vice President

Kazue Sasaki

Shinya Furukawa

Masaharu Suzuki

Directors

Takuo Sasaki
Kan Otsuka
Taku Yamamoto

Directors (Outside)

Shuzo Sumi
Kenichiro Yamanishi
Mitsuhisa Kato

Consolidated Statements of Cash Flows / Board of Directors,
Audit & Supervisory Board Members and Managing Officers

80

2015
Financial Section /Corporate Information

Cash flows from operating activities:
Profit before income taxes and non-controlling interests
		Depreciation and amortization
		Increase (decrease) in allowance for doubtful accounts
		Interest and dividends income
		Interest expenses
		Equity in net (earnings) losses of affiliates
		(Increase) decrease in receivables—trade		(Increase) decrease in inventories
		Increase (decrease) in payables—trade		Others, net
		Subtotal
		 Interest and dividends income received
		 Interest expenses paid
		 Income taxes (paid) refunded
Net cash provided by operating activities
Cash flows from investing activities:
Payments for purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Payments for purchases of investment securities
Proceeds from sales of investment securities
Payments for acquisition of subsidiaries’ stock resulting in change in scope of consolidation
Proceeds from acquisition of subsidiaries’ stock resulting in change in scope of consolidation
Payments for loans madeProceeds from collections of loans
Net (increase) decrease in time deposits
Payments for transfer of business
Others, net
Net cash used in investing activities
Cash flows from financing activities:
Payments for acquisition of subsidiaries’ stock not resulting in change in scope of consolidation
Proceeds from sales of subsidiaries’ stock not resulting in change in scope of consolidation
Increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of bonds
Repayments of bonds
Payments for repurchase of treasury stocks
Cash dividends paid
Cash dividends paid to non-controlling interests
Proceeds from payment by non-controlling interests
Others, net
Net cash provided by (used in) financing activities
Translation adjustments of cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

2016

Audit & Supervisory Board Members
Full-Time Audit & Supervisory Board Members

Toshifumi Ogawa
Kohei Nozaki

Audit & Supervisory Board Members (Outside)

Hans-Juergen Marx
Takahiko Ijichi
Akihisa Mizuno

Managing Officers
Senior Managing Officers

Takuo Sasaki*
Toshifumi Onishi
Kan Otsuka*
Taku Yamamoto*Keiichi Fukunaga* Also holds the position of director

Managing Officers

Yukihisa Tsuchimoto
Takashi Ito
Toshiya Yamagishi
Junichi Harada
Mikihiko Okamoto
Yojiro Mizuno
Masahiro Kawaguchi
Yuji Ishizaki

Keizo Hara
Kiyotsugu Kurimoto
Masafumi Kunito
Toshihiko Shimizu
Koichi Ito
Yasushi Kawai
Hiroaki Kayukawa
Toru Inagawa

Hiroshi Matsumoto
Kota Otoshi
Norio Wakabayashi
Kazunari Masuoka
Kazunari Kumakura
Hiroaki Matsuda
Hisashi Ichijo

81

Major Production Bases

Investor Information(As of March 31, 2016)

n Major Plants (Parent Company)
Plant

Location

Main Products

Start of Operations

Kariya-shi, Aichi

Textile machinery, compressors

1927

Obu-shi, Aichi

Compressor parts

1944

Kyowa Plant

Obu-shi, Aichi

Electronic equipment, automotive press dies, production facilities, engine parts

1953

Nagakusa Plant

Obu-shi, Aichi

Vehicles1967

Corporate Head Office

Stock Exchange Listings

TOYOTA INDUSTRIES CORPORATION
2-1, Toyoda-cho, Kariya-shi, Aichi, 448-8671, Japan
Telephone: +81-(0)566-22-2511
Facsimile: +81-(0)566-27-5650

Tokyo and Nagoya (Ticker Code: 6201)

Number of Shareholders
17,568

Takahama Plant

Takahama-shi, Aichi

Materials handling equipment, materials handling systems

1970

Date of Establishment

Independent Accountant

Hekinan Plant

Hekinan-shi, Aichi

Diesel engines, gasoline engines

1982

November 18, 1926

Higashichita Plant

Handa-shi, Aichi

Foundry parts, diesel engines

2000

Higashiura Plant

Higashiura-cho, Chita-gun, Aichi Compressor parts

2002

Common Stock

PricewaterhouseCoopers Aarata
Sumitomo Fudosan Shiodome Hamarikyu Bldg.
8-21-1 Ginza, Chuo-ku, Tokyo, 104-0061, Japan

Anjo Plant

Anjo-shi, Aichi

2007

No par value
Authorized: 1,100,000,000 shares
Issued:325,840,640 shares

Transfer Agent
Special Account Management Institution

Electronic equipmentn Major Plants (Outside Japan)(including treasury stock)

Mitsubishi UFJ Trust and Banking Corporation
1-4-5, Marunouchi, Chiyoda-ku, Tokyo, 100-8212, Japan

Capital Stock

Major Shareholders
2
3 ■
■
1
■
4
■

15
■
13 ■
14
■

Number of Shares Held(Thousands)

Percentage of Total
Shares in Issue (%)

Toyota Motor Corporation

76,60023.51

DENSO Corporation

29,647

9.10

Towa Real Estate Co., Ltd.

16,291

5.00

Toyota Tsusho Corporation

15,294

4.69

The Master Trust Bank of Japan, Ltd. <Trust Account>

9,864

3.03

Japan Trustee Services Bank, Ltd. <Trust Account>

8,271

2.54

Nippon Life Insurance Company

6,580

2.02

Aisin Seiki Co., Ltd.

6,578

2.02

Aioi Nissay Dowa Insurance Co., Ltd.

4,903

1.50

Name

11 ■
12
■
16
■
17
■

Toyota Industries Corporation Employee Ownership Program
Company Name

82

Country

Location

Main Products

Year of Foundation1

Toyota Industrial Equipment Mfg., Inc.

U.S.A.

Columbus, Indiana

Materials handling equipment

1988

2

The Raymond Corporation

U.S.A.

Greene, New York

Materials handling equipment

1922

3

Michigan Automotive Compressor, Inc.

U.S.A.

Parma, Michigan

Compressors

1989

4

TD Automotive Compressor Georgia, LLC

U.S.A.

Pendergrass, Georgia

Compressors

2004

5

Toyota Material Handling Manufacturing Sweden AB

SwedenMjölbyMaterials handling equipment

1946

6

Toyota Material Handling Manufacturing Italy S.p.A.

Italy

Bologna

Materials handling equipment

1942

7

Toyota Material Handling Manufacturing France SAS

FranceAncenisMaterials handling equipment

1995

8

TD Deutsche Klimakompressor GmbHGermany

Bernsdorf

Compressors

1998

9

Toyota Motor Industries Poland Sp. z o.o.

PolandJelcz-Laskowice

Diesel engines

2002

10 Uster Technologies AG

Switzerland

Uster

Textile machinery

1875

11 Toyota Industries Engine India Private Limited

India

Bangalore

Diesel engines

2015

12 Kirloskar Toyota Textile Machinery Pvt. Ltd.

India

Bangalore

Textile machinery1995

13 Toyota Industry (Kunshan) Co., Ltd.

China

Kunshan, Jiangsu

Automotive parts, materials handling equipment, etc.

1994

14 TD Automotive Compressor Kunshan Co., Ltd.

China

Kunshan, Jiangsu

Compressors

2005

15 Yantai Shougang TD Automotive Compressor Co., Ltd. China

Yantai, Shandong

Compressors

2012

16 P.T. TD Automotive Compressor Indonesia

Indonesia

BekasiCompressors

2011

Toyota Material Handling Mercosur Indústria e17
Comércio de Equipamentos Ltda

BrazilSão Paulo

Materials handling equipment

2004

Toyota Industries Report 2016

Total

4,015

1.23

178,047

54.64

Major Production Bases / Investor Information

80,462 million yen
5
■
8
■
9
10 ■
7■
■
6
■

Financial Section /Corporate Information

Kariya Plant
Obu Plant(As of March 31, 2016)

Notes: 1.	Toyota Industries Corporation also holds 11,613 thousand shares of treasury stock but is excluded from the above list.
2. Shares held for the purpose of trust services of respective banks are as follows:		 The Master Trust Bank of Japan, Ltd. (Trust Account)
9,864 (Thousands)
		 Japan Trustee Services Bank, Ltd. (Trust Account)
8,271 (Thousands)

Distribution of Shares
0.6%
3.6%
6.7%
Japanese corporate entities

19.2%

Foreign corporate entities and others

48.4%

Japanese financial institutions
Individuals, etc.
Treasury stock

21.5%

Japanese brokerages

832-1, Toyoda-cho, Kariya-shi, Aichi 448-8671, Japan
Telephone: +81-(0)566-22-2511 Facsimile: +81-(0)566-27-5650
www.toyota-industries.com/

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