A Message from the President

Dear Shareholders:
On June 22, 2005, I assumed the duties of president of Toyota Industries. Since its founding,
Toyota Industries has consistently surmounted numerous obstacles to attain steady growth inits business results. This achievement can be attributed to the strenuous efforts of a long lineof top management leaders, the dedication of employees, the patronage of customers and thesupport of shareholders and members of local communities. Of particular significance, Toyota
Industries achieved remarkable advances during the six years of leadership by my predecessor,Mr. Ishikawa.
I consider it an honor to be entrusted with the crucial task of taking over the reins ofmanagement at Toyota Industries. I will dedicate my fullest efforts to ensuring the ongoingdevelopment of Toyota Industries, work to motivate employees, contribute to local communities,
provide customers with even better products and services and, above all, uphold the crucial
responsibility of maintaining the confidence of shareholders and meeting their expectations.
Building upon our success and momentum, I am determined to continue to lead ToyotaIndustries on a path to further growth.

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A Message from the President

Business Results for Fiscal 2005
Adverse factors affecting the business environment during fiscal 2005, ended March 2005, included
soaring prices for crude oil, steel and other raw materials, as well as a series of natural disasters such as
the Niigata-Chuetsu Earthquake in Japan. Nevertheless, the Japanese economy attained a mild recovery
underscored by increased corporate capital investment and improved employment conditions. Smoothexpansion of the U.S. and Chinese economies in turn contributed to a steady recovery of the global economy.
Under these economic conditions, Toyota Industries posted excellent business results, as reflected byrecord-high net sales and earnings. Consolidated net sales amounted to ¥1,241.5 billion, an increase of 6.6%
from the previous fiscal year. Consolidated operating income edged up 0.9% to ¥53.1 billion, as the rise in net
sales and the effects of cost reductions compensated for higher raw materials prices and increases in expenses
for depreciation and production preparations in the Automobile Segment. Consolidated ordinary income
increased 20.3% to ¥70.9 billion, due to an increase in equity in net earnings of affiliated companies and a risein dividends income. Net income amounted to ¥43.4 billion, an increase of 29.0%.

Continued Favorable Results in Each Segment
Despite some variances in the results (net sales and operating income) for each business segment, overall
results remained at a high level. A summary of business results by segment is as follows.
Note: Segment net sales figures do not include intersegment transactions. However, segment operating income figures do include operating income (loss) arising fromintersegment transactions.

Automobile Segment
The Automobile Segment, comprising vehicles (automobile assembly), engines, car air-conditioning
compressors and other businesses (including foundry parts and electronic components for automobiles), is
Toyota Industries’ largest business segment and accounts for 49.6% of consolidated net sales. In fiscal 2005,
net sales of this segment increased 2.0% from the previous fiscal year to ¥616.2 billion. The increase mainlyreflected growth in sales of CD diesel engines for Europe, favorable sales of DC-DC converters fitted in thelatest Prius and higher sales of foundry parts. On the other hand, operating income decreased 17.3% to ¥22.8billion. The decline resulted mainly from the effects of an increase in expenses for depreciation and production
preparation accompanying a full model change of the Vitz (Yaris in Europe) in the Vehicle Business and theintroduction of new products in the Engine Business.

Materials Handling Equipment Segment
The Materials Handling Equipment Segment mainly engages in the manufacture and sales of counterbalanced
lift trucks, warehouse trucks, automated storage and retrieval systems, and automatic guided vehicle systems,
as well as special-purpose vehicles such as aerial work platforms. Net sales by the Materials Handling
Equipment Segment amounted to ¥504.0 billion, an increase of 13.7% from the previous fiscal year. This
increase was fueled by significant rises in sales by both TOYOTA Material Handling Company (TMHC) andthe BT Industries Group, which make up the core of this segment, amid an expanding global economy. Strong
performance of Aichi Corporation, which manufactures and sells aerial work platforms, also contributed tofavorable results. Operating income increased 34.8% to ¥26.1 billion.

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Textile Machinery Segment
The Textile Machinery Segment manufactures and sells spinning-related machinery centering on ring spinning
frames and weaving-related machinery such as air-jet looms. Toyota Industries has engaged in this businesssince its founding, and is one of the world’s leading manufacturers of air-jet looms and spinning machinery.
Net sales by the Textile Machinery Segment amounted to ¥43.9 billion during fiscal 2005, a decline of 4.5%
from the previous fiscal year. This decrease was due primarily to a lull in sales of weaving-related machinery
to China, a principal market, as well as the effects of a tighter monetary policy in the country. This segment
posted an operating loss of ¥0.8 billion, a decrease of ¥0.9 billion from the previous fiscal year.

Others Segment
This segment consists of the Electronics Business, the Logistics Solutions Business and other businesses.
TIBC Corporation (TIBC), a joint venture with Ibiden Co., Ltd. to manufacture semiconductor package
substrates, is included in the Electronics Business. Although this segment is made up mainly of businesses
that are still relatively small in scale, we regard these as strategic businesses that will serve as future pillars ofgrowth.
Net sales of the Others Segment amounted to ¥77.4 billion, an increase of 8.9% over the previous fiscalyear. This gain was due mainly to the addition of a subsidiary newly established in the logistics solutions
field as a joint venture and to solid results of TIBC and the Taikoh Transportation Group, which is involved intransportation and other logistics businesses. Operating income decreased 8.8% to ¥5.2 billion.

Business Outlook for Fiscal 2006
In fiscal 2006, ending March 2006, the Japanese economy is expected to post a mild recovery while theeconomies of such principal countries as the United States and China are forecast to record stable expansion.
Nevertheless, concerns about such risks as continued high crude oil prices and rapid adjustments in exchange
rates preclude optimism.
Amid this environment, for fiscal 2006 Toyota Industries forecasts a 16.8% rise in consolidated net sales to¥1,450.0 billion. This projection arises from an expected increase in sales in the Materials Handling Equipment
Segment. Also, the Vehicle Business is anticipated to record favorable sales of the Vitz (Yaris in Europe),
which underwent a full model change in February 2005, and the Engine Business has just started productionof new diesel engines. We expect that Group-wide cost-reduction activities, coupled with measures to enhanceearnings, will support a 5.8% rise in ordinary income to ¥75.0 billion, despite a rise in depreciation expenses
in the Automobile Segment. We forecast a 3.8% rise in net income to ¥45.0 billion.
Note: The financial projections set forth above are based upon a number of assumptions and estimates that, while presented with numerical specificity and consideredreasonable when taken as a whole, are inherently subject to significant economic, business, competitive, regulatory and operational uncertainties, contingencies
and risks, many of which are beyond our control. Financial projections are necessarily speculative in nature, and it can be expected that one or more of theassumptions underlying the projections will prove not to be valid, and unanticipated events and circumstances are likely to occur. In such a case, actual results
will vary from the financial projections and those variations may be material. Consequently, this report should not be regarded as a representation by us or any
other person that the financial projections will be achieved. Current negative market trends in the global economy make it particularly difficult at present to predictproduct demand and other related matters.

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A Message from the President

Aiming for Sustainable Growth
Toyota Industries aims for sustainable development of all its businesses over the medium and long term.
In line with this objective, we will expand our mainstay Materials Handling Equipment Segment and Car
Air-Conditioning Compressor Business by strengthening cost competitiveness and technologies. In particular,the Materials Handling Equipment Segment is moving ahead with further integration of TMHC and the BT
Industries Group under the Toyota Material Handling Equipment Group to attain enhanced synergies. We
will strive to increase our presence in the Vehicle and Engine businesses as we contribute to Toyota Motor
Corporation’s (TMC) global strategy. Specifically, we will get production of diesel engines on track at ToyotaMotor Industries Poland Sp.zo.o., a joint venture with TMC that began operations in March 2005. And finally,
we will strive to undertake full-fledged initiatives to grow our Logistics Solutions and Electronics businesses
into core businesses of the future. Other measures include pursuing the further globalization of our businesses,
implementing thorough quality control, promoting cost-reduction measures and stepping up the cultivation ofhuman resources who are skilled in the Toyota Production System—the wellspring of our competitiveness.
We are currently working on a new medium-term management vision that will embody our thinking andthe directions we will pursue over the five years from fiscal 2007, ending March 2007. We will unveil the newmanagement vision in detail at a future date.

Looking toward the Future
In April 2005, we held the Toyota Industries World Convention 2005, which brought together numerous
TOYOTA and BT lift truck dealers and distributors from all over the world. Held in Kyoto and other locations,this marked the second such event since 2001. The slogan of the 2005 convention was “United We Grow,”which is also the theme of this year’s annual report. The slogan aptly expresses the solidarity of TMHC and8TOYOTA INDUSTRIES CORPORATION Annual Report 2005

the BT Industries Group, the two vital components of the Materials Handling Equipment Segment. It indicates
our intention to realize further growth supported by strengths befitting the world’s leading company in thisfield. I believe the “United We Grow” slogan also transcends the Materials Handling Equipment Segment
and symbolizes the future direction of the entire Toyota Industries Group. Moreover, the slogan embodies ourstrong intention to create new value by facilitating further collaboration within the Toyota Industries Group,
creating synergies via the organic interaction among the Group’s business divisions, and promoting stronger
relationships with shareholders, customers, members of the local community and other stakeholders.
Since its establishment, Toyota Industries has been a company with a passion for monozukuri (literallymeans “creating things,” but it implies a philosophy that recognizes the value of the innovative creation ofquality products). In time, our non-manufacturing businesses such as the provision of services and solutions areexpected to account for an increasing proportion of our total business. Even in these new business fields, I am
confident that we can skillfully and effectively apply our “spirit of monozukuri”—developing products utilizing
our ingenuity and making improvements. As we promote diversification of our businesses, this spirit handed
down by our predecessors remains a vital source of our superior competitiveness for both the current and thenext generation.
The management team of Toyota Industries—your company—regards its most vital mission as ensuring
the further growth of the Toyota Industries Group. In other words, we seek to enhance our long-term, stableearnings power and create even higher corporate value. To do so, we will carry out dynamic and strategic
business operations while establishing more efficient company management systems, attaining stable growth inbusinesses and steadily improving our business results. Toyota Industries is a conglomerate that has diversified
its businesses into a wide range of fields throughout its history. By strategically and organically combining
management resources that are the source of its competitive edge—namely the know-how, key technologies,
human resources and markets cultivated by each business—Toyota Industries can realize a “conglomeratepremium,” whereby we create value so the worth of Toyota Industries as a whole adds up to more than the sumof individual businesses.
As we work to earn the trust of society as a good corporate citizen, we will also undertake a host ofenvironmental protection and social contribution activities. Concurrently, we will earnestly promote complianceand corporate governance initiatives.
To sustain the growth of your company in the future, the new management team is committed to taking
timely and appropriate measures that will enable us to earn your trust and respond flexibly to continuallychanging markets and management environments as well as maintain our competitive edge.
I ask you for your continued understanding and support.

August 2005

Tetsuro Toyoda
President

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