Focus

3Medium-Term Management Vision
In May 2001, we launched our medium-term strategy forestablished TD Deutsche Klimakompressor GmbH (“TDDK”) asgrowth, targeting consolidated sales of more than ¥1 trillion

a joint venture with DENSO Corporation. In April 2000, TDDKand consolidated ordinary income of ¥80 billion in fiscal 2006.

began operations at its factory in Sachsen, Germany. We now

Through consistent implementation of the strategy, wemanufacture car air-conditioning compressors in Japan, thebelieve we can expand our corporate value. As part of aU.S. and Europe. This tri-polar system allows us to stay close toconcerted push toward this goal, we reorganized thecustomers, meet their needs more precisely and reduce

functions of the headquarters in January 2002.

exchange rate risks. The proportion of cars in Europe fittedwith air-conditioning systems is expected to rise and we aim

Securing Global Leadership in
the Materials Handling Equipment andCar Air-Conditioning Compressor Fields

to make the most of this opportunity. We shall also seek toToyota Industries is determined to retain the No. 1 market

and the Car Air-Conditioning Compressor Business are coreshare in Japan and achieve global leadership among

operations, and serve as the driving force in the achievement

manufacturers of forklift trucks and other industrialof our medium-term corporate objectives. As we cannot

equipment. Steps already taken to achieve that goal include

expect a great increase in demand in the maturing Japanese

the acquisition of BT Industries AB (“BT Industries”) and themarket, it is vital that we expand our global presence totransfer of Toyota Motor Corporation’s (“TMC’s”) Industrial

ensure business expansion, and we shall commit resources toEquipment Sales Division to the Company. These measuresthese fields on an appropriate scale.

increase sales in the North American market.
In summary, the Materials Handling Equipment Segment

will enable swifter decision-making and more dynamic
business management in reflecting customer needs andresponding to market changes on a global scale.
We expect that our acquisition of BT Industries will bring

Fostering New Core Businesses,
Including Electronics
We intend our electronics operations, which are now

benefits of synergy. We have started to supply

comparatively small, to play an important part in our futurecounterbalanced forklift trucks to BT Industries on an OEMgrowth. The opportunities in this field are substantial. Thebasis. We are also distributing BT Industries’ various warehousecore of our Electronics Business includes ST Liquid Crystal

trucks not only in Japan but also in the U.S. and Europe. These

Display Corp. (“ST-LCD”), a joint venture with Sonyexchanges will be broadened to include other products. WeCorporation; TIBC Corporation (“TIBC”), a joint venture withintend to introduce our manufacturing technique, the Toyota

Ibiden Co., Ltd.; and the Technology Development Center (anProduction System (“TPS”), to BT Industries. In return, we arein-house organization).

drawing on BT Industries’ wealth of sales know-how, inST-LCD manufactures low-temperature poly-Si TFT-LCDs,

particular their solution-proposal sales technique. We have

which have considerable growth potential as the next-

begun to introduce BT Industries’ fleet management program

generation LCD, while TIBC produces ball grid array (BGA)

to reinforce our sales activities in Japan. We will also work

plastic package substrates for IC chipsets. As a result of using

together in joint component purchase, technology exchange

TPS, ST-LCD’s quality levels and production volume haveand product development.

improved substantially. The bursting of the IT bubble forced

The Materials Handling Equipment Segment is striving toST-LCD to temporarily lower its output. However, the excellent

adopt a global perspective in monitoring changes in demand,

functionality of ST-LCD’s products, including high numericaldeveloping products that meet market needs and enhancing

aperture, high resolution and energy efficiency, is expected toservice activities in order to maximize customer satisfaction.

generate increased demand for applications in digital

To consolidate our leading international position in the carcameras, mobile phones and personal digital assistants

air-conditioning compressor manufacturing field, we

16TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

(PDAs). To expand business in line with the medium-term

Ordinary Income(¥ Billion)
100
80
47.9

48
60

44.5

20
Over
1,000

Net Sales(¥ Billion)
980.2

1,000

990

767.4

800

600

Materials Handling Equipment

400

Car Air-Conditioning Compressor
Electronics

200Vehicle & Engine0FY

Textile Machinery and Others

990001020306
Targetbusiness plan, ST-LCD began a ¥75 billion capital investment

Our Vehicle Business, one of the manufacturing bases ofprogram for additional facilities in the fall of 2001. Looking

the Toyota Group’s compact cars, strives constantly to enhanceclosely and flexibly at the pattern of demand, ST-LCD plans to

the attractiveness of TOYOTA-brand cars by further improving

start operations at the new facilities and increase its

product quality and cost efficiency, making proposals for theproduction capacity.

design and launch of new compact and other cars, andTIBC also suffered from the worldwide IT slump. However,once the IT-related inventory clears, we expect TIBC to revert
to full operation.

improving production technology.
In the Engine Business, we work constantly to enhance theenvironment-friendly features of our engines without

As we believe the growth potential of the Electronics

compromising their performance, and to contribute to theBusiness in the medium to long term is promising, we see it asimprovement in the overall performance of TOYOTA-brand

one of our core businesses. We intend to allocate

cars.

management resources accordingly in anticipation of a

Our Vehicle and Engine businesses are dedicated mainly to

successful future for our LCD and other electronics-related

production for TMC. Our production is therefore dependent

businesses. We will also aggressively engage in theon TMC’s production and ordering plans. We seek toexploration and development of promising new technologies

strengthen our sales link to TMC through ceaseless qualityand businesses.

enhancement and cost-down activities. Our goal is that TMC
will entrust us with the assembly of, and employ our engines

Further Cost Reduction and EnhancedManufacturing Quality in the Vehicle andEngine Businesses

capabilities to play a more active part in product development

The Vehicle (automobile assembly) and Engine businesses

for TOYOTA vehicles and engines. Our overall aim in the Vehicle

provide stable revenues for the Automobile Segment. In theand Engine businesses is to secure stable revenues through an

medium term, we aim to improve cost management and soefficient production system.

in, a wider range of models.
We are also strengthening our research and development

maintain profitability in these fields.

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002

17Focus 3

Extensive Cost Reduction Campaign

In May 2002, Toyota Industries opened ”e-Lab,” ourTo survive ruthless price competition worldwide, it is essential

information technology research laboratory, as a key

to regularly market attractive products, implement sustainedorganization for the information system division as well as

cost reduction programs and reform our revenue structure. In

our R&D facility for information technology. E-Lab isApril 2001, we began an ambitious three-year cost reduction

responsible for researching digital simulation technologies

program to substantially reduce operating and other costs. Awith a view to reducing lead-times from development toproject team in each business division promotes VE (Valuemanufacture to shipment. It is also involved in developing anEngineering), VA (Value Analysis) and other cost reduction

optimal network system for joint development of parts withactivities in order to achieve an even higher level of overall

suppliers, and for parts procurement.

efficiency. Measures to be taken include optimizing a systemof global procurement of materials and components,Fostering Personnel

reducing expenses and cutting back fixed costs at the head

Toyota Industries creates and makes a wide range ofoffice.

products. We maintain our excellent competitiveness by
manufacturing high-quality products through efficient

Promoting a Global Presence

production. TPS serves as one of the essential sources of ourIt is impossible to rely solely on the Japanese market inknow-how in maintaining efficient production andseeking further business expansion. Toyota Industries hascompetitiveness. By improving TPS and familiarizing moreestablished production bases for forklift trucks and car air-employees with the system, we can further enhance

conditioning compressors in North America and Europe. Inefficiency and competitiveness. To this end, we haveJune 2000, we also acquired BT Industries, a Swedish

established a specialized department within the Corporate

warehouse truck manufacturer, as part of our globalization

Center to foster the development of qualified personnel.

scheme. Based on our belief that globalization is essential forexpansion in terms of business scale and corporate value, weMaximizing Benefits of Synergy

will strive to provide our customers worldwide with superior

Throughout our long history, we have continually pushedproducts, procure high-quality and price-competitive parts

forward with technological innovation, explored new markets

from the world, and engage in production close to ourand achieved substantial growth for each of our businesses.

customers.

Toyota Industries has become a conglomerate, each of whose
divisions possesses core technologies and markets. By

Harnessing the Powerof Information Technology

transcending divisional boundaries, we are taking advantage

The Internet, PCs, mobile communications and so on areof the next generation of business sectors and products, andalready having a major influence on corporate activity. We

to create added values. We believe the strategic cooperation

recognize the importance of IT as a key factor in corporate

among divisions will enhance the value of the Company as acompetitiveness, and we are accelerating its application

whole and offer great opportunities for expanded businessaccordingly. Utilizing IT, we are overhauling our traditional

operations.

of these assets to develop technologies that will be the basis

way of doing business to achieve speedier management
processes, reduction in fixed costs and increased customer
satisfaction. To date, improvement is most evident in shorterproduct lead-times and enhanced productivity among nonmanufacturing divisions.

18

TOYOTA INDUSTRIES CORPORATIONANNUAL REPORT 2002