Corporate Development and Engineering Officer Interview

We are providing
new value to theautomobile industry
by leveraging thecapabilities of “people”
behind technologies.
Eiji Toba

Director, Managing Officer
Corporate Development and Engineering Division
Executive General Manager

What technologies are sources ofcompetitiveness for the TS TECH Group?

At the TS TECH Group, we aim to develop world-leading, advanced technologies with a focus on safety, the environment, and the creation of attractive products. Regarding
safety-related technology, we are working with vehicle manufacturers to develop products that will meet the anticipatedsafety standards several years from now. To do this, we obtain information from relevant organizations in various
countries, such as NHTSA1 and IIHS2 in North America, andthe Ministry of Land, Infrastructure, Transport and Tourismin Japan. When it comes to safety, we have been an industry
pioneer. We were the first in Japan to utilize a dynamic sled
testing facility that faithfully reproduces the impact of a vehicle collision. By conducting tests that simulate a range ofconditions, we have continued to pursue technology that
protects the safety of passengers. Looking back at the history of our products and safety, there have been major advancements since the early 2000s. In 2005, we provided an
Active Headrest3 to Honda Motor Co., Ltd., our main customer, to reduce the impact to the neck for vehicle occupants inthe event of a collision, thereby improving safety. As a resultof accelerating R&D concerning seat frame construction to24

TS TECH Integrated Report 2023

improve safety performance, our products boast world’s
top-class safety performance. Currently, all of the vehicle
models equipped with our products have received the highest ratings for seat-related safety performance in vehicle
assessment worldwide.
As a supplier to the automobile industry, we are required to develop technologies that help protect the environment. Our aim is to promote recycling-oriented
manufacturing and help improve vehicle fuel efficiency, as
part of efforts to help build a sustainable world. The Grouphas been investigating the use of sustainable plant-basedmaterials that contain no fossil fuels to make seats. However, the use of such materials can pose challenges such as
higher costs and a decrease in seat comfort. Therefore, wehave been pursuing further R&D to see if we can solve thedrawbacks of such materials by modifying the seat construction, which would allow us to adopt the new materials forpractical use. Currently, automakers are also engaged in fullscale efforts to adopt sustainable materials. Therefore, by
establishing technologies that can be applied to products
before bringing them to market as quickly as possible, wewant to help build a sustainable world while enhancing ourtechnological competitiveness.

In the area of new technology for the creation of appealing products, the Group has continued to pursue “comfort” since its founding. Judgments about comfort andresistance to fatigue differ depending on the person. Therefore, we have accumulated unique expertise and technologies that allow us to quantify and evaluate occupant comfort
judgments in order to support our manufacturing process.
To create seats that properly support the human body withsuperior comfort, we have been conducting ergonomicsbased research using quantitative evaluation. With uniquetheoretical frameworks established based on this, we areworking to bring even more comfortable seats to the market. Moreover, the pursuit of comfort in particular is multifaceted and deep, and over the course of time, this pursuit
is subject to an infinite process of evolution. We believe thatproviding comfort also means making more effective use of
the limited space inside the vehicle, increasing convenience,and making time spent in the vehicle more enjoyable. We
have worked to improve comfort by creating our Functional
Seat that enables a variety of interior arrangements. The
third-row seats can be folded flat into the floor with a minimum number of operations, while the second-row seats
have a mechanism that allows them to slide forward or backward as well as left or right with the operation of a singlelever. This allows the vehicle users to enjoy a variety of seating arrangements. The various seat arrangement technologies that we have devised so far, including those that allow
seats to be rotated, moved, and stowed as necessary, haveoften surprised and delighted our automaker clients. The
foundation of the TS TECH Group’s competitiveness rests on
the core technologies we have developed over the years tosupport safety, the environment, and the creation of appealing products.

Plant-based
faux leather

Support mat that enhances
sitting comfort

Can you tell us about the results of the14th Medium-Term Management Plan?

Among the seven priority measures indicated in the 14thMedium-Term Management Plan (fiscal 2021–2023), the one
directly linked to the technology field is the “commercialization of original technologies.” Over the years, we have created original products such as Aisareru Seat4 and INNOVAGE.5
By further accelerating these efforts, we aimed to develop
appealing products to meet latent customer needs and secure future revenue streams.
With industry trends such as Connected, Autonomous,Shared, and Electric (CASE) vehicles, as well as Mobility as aService (MaaS), the technology required to develop products
is becoming more complex and sophisticated than ever before. Accordingly, we need to develop partnerships with othercompanies and industries. As one such initiative, we signed apartnership agreement with ALPS ALPINE CO., LTD., in January 2022. By merging our expertise with that of ALPS ALPINE,
we were able to create XR Cabin, which brings virtual reality(VR) technology to car seat technology. By considering various situations and ways in which users might want to spend
time in vehicles, we have embodied the new value required
for each scene as a cabin that allows users to experience thefuture of vehicle interior space and our future technologies
by using seats and VR images linked to them. Moreover,through joint research with other industries and start-up
companies, as well as industry–academia collaboration,
we are developing technologies and products that go
beyond the conventional vehicle seat concepts. By doing
this, we hope to expand our commercial rights in the area ofnext-generation vehicles.
As for the nearer future, we have been conducting R&D
seeking to improve the product value of seat frames, ourmain vehicle seat component. Our next-generation seatframe represents a further advancement of the current
mainstay model. The new product is one of the world's lightest and has the scalability to meet the needs of an even wider range of vehicle models. On the production side, theGroup has adopted a design approach based on automation using robotics. We are confident we can maintain ourcompetitive advantage over the long term by significantly
improving production efficiency.

Plant-basedcushion pad

Sustainable seat using plant-based raw materials

1 National Highway Traffic Safety Administration (NHTSA): An agency in the U.S.
Department of Transportation that ensures safety for vehicles and drivers
2 Insurance Institute for Highway Safety (IIHS): A u.s.-based non-profit organization
established by automobile insurance companies to evaluate automobile safety
3 Active Headrest: In the event of a rear-end collision, the headrest automaticallymoves forward to greatly minimize neck injuries. It is activated by the force applied
to the seat by the occupant’s body being pushed backward.

4 A seat system that combines automotive seat technology and IoT capabilities tosense occupant movements and turn the seat into a system controller
5 A next-generation vehicle interior space exhibited at Tokyo Motor Show 2019that showcases the Group’s technologies for the future. These include sensing
technologies to monitor occupant breathing, heart rate, and driving posture, as
well as seat arrangement technology suitable for fully autonomous vehicles.

TS TECH Integrated Report 202325Corporate Development and Engineering Officer Interview

What kind of technological developments are
you working on for the automobile industry,
which is undergoing major changes?

Under our current 15th Medium-Term Management Plan (fiscal 2024–2026), one of the priority strategies is “securingcabin coordination capacity.” We are further accelerating
R&D to realize future interior spaces like the one demonstrated with XR Cabin. In an era where vehicles are no longer
just a means of transportation, and where travel time has
become a valuable resource, we aim to become a company
that can offer not only car seats but entire vehicle interiors
that allow occupants to pass the time with even greater
comfort. This does not mean that we are seeking to expand
our business into all kinds of vehicle interior components.
Instead, we are collaborating with companies in other industries and combining our strengths with theirs to create appealing cabins based on advanced seats.
Automakers and other companies are currently exploring how needs can be met in terms of ways to spend travel
time, when next-generation vehicles such as fully autonomous cars become mainstream. Through these cabins, weare proposing new ways for vehicle occupants to spend theirtravel time. By making automakers and end users think, “Oh,this is a new kind of experience,” we hope to uncover theirlatent needs. Additionally, the numerous advanced technologies installed in the cabin can also be delivered as independent systems. By allowing each technology to be adopted
for mass-produced vehicles as needed, we are also aiming
for steady business growth at the moment while focusing on
the future.
When looking ahead to next-generation automobiles,equipping EVs is also becoming an important R&D focus.
While EVs will still need seats, their form and function willneed to change from those used in combustion engine vehicles. One necessary change will be to make the seat profile
thinner. In EVs, the battery is installed under the vehicle
floor, which increases the floor height. Additionally, theheight of the roof will need to be lowered in order to reduce
air resistance and improve the cruising range. Therefore,EVs’ interior height (distance from the floor to the ceiling) will
be lower than in conventional vehicles. In order to maintainas much space as possible inside the vehicle, the seats will
have to have a thinner profile than before. We are promoting R&D to better meet these needs while maintaining safety and comfort. This is being done from various perspectives,
such as changing the seat frame construction, the shape ofthe cushioning material, and each material itself. Moreover,
we are working on developing technologies and productsthat will help extend the range of EVs. While using the weight
reduction technologies that we have developed over theyears, we are also devising energy-saving heating technology that balances comfort with lower power consumption.
This is done by concentrating heating on the neck and thighs
where people can feel warmth most easily.

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The Group is also accelerating the development of biosensing seat technology that could become another productstrength in the future. Our Health Care Seat, currently underdevelopment, automatically detects the posture of the occupant when they sit down, and it massages their muscles accordingly, thereby encouraging ideal posture. The seat canalso measure vital signs such as the occupant’s pulse andheart rate, from which changes in the physical condition canbe predicted. Therefore, it is equipped with functions to support human safety and health just by sitting on it. Someday
soon, we hope to bring the Health Care Seat to the market.

Products in Development❶ PTC heater (heat source)❷ Blower❸ Duct❶Front❸❷

Heated seat with rapid warm-up blower that can reduce
power consumption of the vehicle by more than 10%
by eﬃciently warming the body
Seat equipped with many
internal air devices

Health Care Seat that encourages ideal posture

As technological innovation advances at ever increasing
rates, the need for interior space will continue to change
dramatically. In any case, we believe that the human comfort
that TS TECH has always worked to deliver will remain in demand. By further refining the core technologies we have developed over the years and by combining them withexpertise from other fields, we will carry out R&D with theaim of further improving comfort while also meeting anticipated future needs.

What challenges does the Group face forachieving further business growth?

Currently, we are using XR Cabin to present our nextgeneration technology concepts to many vehicle manufacturers. While we often get positive feedback such as, “We willdefinitely consider your products,” there are also quite a few
comments that indicate a desire for more surprises. We
have been told that many proposals from emerging suppliers are much bolder than ours, and that our concepts lackexcitement in comparison. I sincerely believe that our ideas
have been limited by too many practical considerations,such as ease of mass production, and have remained within
the realm of conventional thinking. We need to change ourapproach in order to revitalize our ideas and create proposals that are not bound by preexisting assumptions of what avehicle could be.
As part of our efforts to achieve this goal, we have established a development project team made up entirely ofyounger employees. Normally, the Group develops newproducts under Large Project Leaders (LPLs), who are very
experienced managers. They perform comprehensive project management from planning to mass production. While
our LPL system is great for promoting efficient product development, it leaves little room for the innovative ideas ofyounger employees. In contrast, the new project team's activities are focused on incorporating various forms of external expertise, and creating product proposals that break ourexisting molds. I am very much looking forward to the proposals they will come up with. Moreover, our various collaborative activities for the purpose of “securing cabincoordination capacity” are another way of bringing in external knowledge. In addition to co-creation related to carseats, we are accelerating open innovation and joint development with various cutting-edge companies, such as teTraaviation corp., which is developing eVTOLs. This should leadto the creation of vehicle interior spaces that go beyond thestandard approach of the automobile industry.

The recent rise of Chinese automakers has been remarkable, and these companies have established unprecedented product development speeds. By working aroundthe clock, they are able to develop in six months a productthat would usually take several years. This poses a challenge
for us, and we expect the speed of development to accelerate across the auto industry going forward, in order to keepup with Chinese automakers. Even under such circumstances, we have to catch up to them and surpass their development speed in order to achieve sustainable business growth
by further increasing our competitiveness and licensing newcommercial rights not only to existing clients but also toemerging automakers in China and elsewhere. The TS TECH
Group has established development sites in each global region and has built a development system that can respondquickly and dynamically to regional needs. However, ourcore technology development is mostly conducted in Japan.
In order to further speed up development operations, it isessential that we train engineers and strengthen development capabilities outside Japan, as well.
To do this, we will accelerate investment in our “people,”
including the training of engineers, not to mention our efforts to enhance development capabilities in each country,
including aggressive investment in automation and efficiency improvement systems utilizing AI and IoT, exchange oftechnical support between Japan and overseas development
sites, and expanding the size of each development site. I believe that a company’s competitiveness originates with its
people, and that the key to our future business growth lies inpracticing TS TECH’s corporate philosophy of striving to be “Acompany dedicated to realizing people's potential” and thatis “A company sincerely appreciated by all.” As developmentcompetition intensifies, the pressure on engineers will inevitably grow. Furthermore, as soon as the development of one
model is completed, our engineers must immediately begin
work on the next model, as they strive to fulfill their missionof relentlessly achieving ever higher performance. In addition to initiatives that are directly linked to model development, such as developing and securing highly specialized
human resources, including expanding specialized training
in areas such as digital transformation and actively recruiting mid-career personnel, we will continue to invest generously in “people.” This means fostering workplaceenvironments where each individual can feel motivated, andwork with enthusiasm, such as creating a system to properly
evaluate and compensate engineers.
For suppliers like us, technological strength forms thebasis of sustainable business growth and rising corporate
value. By nurturing the human resources that support ourtechnological capabilities, and by fully utilizing the seat manufacturing expertise and passion for product creation thatTS TECH has developed since its founding, we can achieveeven greater business growth. We have the ability to provide
even more new value to the automobile industry, which is
now undergoing a once-in-a-century transformation.

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