To Our Shareholders

Strong Performance
Readies Us for
the Twenty-First CenturyTadashi Ishikawa
Chisei Isogai

President

Chairman

At Toyoda Automatic Loom Works, Ltd. (Toyoda),Akira Yokoi
Executive Vice Chairman

Strategies and Achievements

fiscal year 2000, ended March 31, 2000, was extremely
significant, not only because it was the first year for ourManagement Strategy

new management team under the leadership of newly

Toyoda has come a long way since it started business as aappointed President Tadashi Ishikawa, but also because wetextile machinery manufacturer over 70 years ago. We are

were able to lay a solid foundation for the future. Sales anddiversified, innovative and ready for the next 100 years.

earnings during the period increased substantially over theToday our business is divided into three categories, each withprevious year. Consolidated net sales grew by 12 percent

a distinctive character and mission.

to ¥625.8 billion (U.S.$5,895.2 million), and operating
income improved by 16 percent to ¥28.9 billion

Category I – Automobiles and Engines: Contributing to the(U.S.$271.9 million).

Toyota Group, of which we are a member, through ourIn the past fiscal year, the Japanese economy showedcommitment to quality and technological innovation.

signs of gradual recovery, and the U.S. expansion continued.
In Europe, economic expansion was generally on track,

Category II – Car Air-Conditioning Compressors, Forklifts

while East Asia continued to recover from the currency andand Textile Machinery: Aggressively deploying ourfinancial crises of 1997.

technological strengths to design and develop products forWith this overall economic environment as a backdrop,global markets.

we are pleased to report that our efforts met with success,with double-digit increases in sales and earnings over theCategory III – Electronics and Electronic Devices (including

previous fiscal year. Major factors behind the gains wereLCDs): Creating new sources for the company’s futurestrong sales of the popular Toyota Vitz (Yaris) automobile,growth.

which we produce on behalf of Toyota Motor Corporation(TMC), and increased sales of car air-conditioning

In Category I, we are enhancing our manufacturing

compressors. We also believe that our company-wide

technology and quality control capabilities in order to play acommitment to meet sales and profit targets enabled us tolarger role in assembling automobiles and providing

achieve the past year’s strong performance.

automotive engines for TMC. This category is a driving force
for the further development of the Toyota Group.

Note: The exchange rate used for calculating all the dollar figures thatappear in this report is ¥106.15= U.S.$1.

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TOYODA AUTOMATIC LOOM WORKS, LTD.

We are also strengthening our R&D and planning

Achievements

capabilities to play a more active part in productWe developed and introduced a number of significant new

development for Toyota vehicles and engines. We believe

products during fiscal 2000.

that the management of knowledge and the development ofThe launch of the GENEO-B electric-powered

human resources, especially in the manufacturing andcounterbalanced forklift in the Japanese market in August

technical departments, are essential for enhancing these

1999 exemplifies our efforts to bring out new products

capabilities.

offering technological breakthroughs. The GENEO-B

In Category II, our basic policy is to penetrate markets

incorporates our new “System of Active Stability” (SAS),

worldwide by providing state-of-the-art products that satisfy

with improved performance features that include tip-overcustomer needs. We recognize that technologicalprevention. Our proprietary alternating current (AC) drive

advancement is the key determinant of competitiveness, andsystem has overcome the weaknesses typical of electric-

therefore put great emphasis on fostering superior

powered forklifts, putting the GENEO-B almost on a parengineering talent and strengthening our technology

with engine-powered models. Customer response hasdevelopment capabilities.

been positive. We began exporting the GENEO-B under

Category III requires advanced technology andcontinuous investment in equipment to maintain athe model name 7FB to Europe, Australia and Asian
countries in September 1999.

competitive advantage. In addition, it is essential to accurately

A new car air-conditioning compressor, the 6SEU12, isforecast market movements and to make prompt decisions

another innovative addition to our product lineup. Compact

based on those forecasts. Success in this business requires

and lightweight, the 6SEU 12 is a continuous variable

management to put production promptly on the right track,

displacement external signal-controlled compressor designed

improve yield rates, and move at high speed so as to recoup

to help reduce fuel consumption and improve acceleration.

investment as quickly as possible.

In June 1999, we completed development and began

In order to achieve sustainable growth, we are also

production of a common rail type 2,000 cc direct injection

focusing on the following measures across all our businesses:

turbo diesel engine. It is already being installed on Toyota
Avensis models for European markets. In the future, we• Strengthening our overall technological capabilities foranticipate that it will gain wider use, particularly on other• new product development.

Toyota models bound for Europe, and we have highhopes that it will become a mainstay of our diesel engine• Systematically improving productivity and lowering• production costs.
• Incorporating production cost reduction into the• engineering and design stages.

product line.
New products, such as those listed above, helped
support our outstanding gains for this period. Additionally,
the rigorous cost reduction measures as well as the value
analysis (VA) and value engineering (VE) approaches• Utilizing mergers and acquisitions to further increase

introduced at our domestic and overseas production bases• competitiveness.

made major contributions to the improvement in results.
As part of our strategic plan to strengthen textile
machinery operations, we acquired the water jet loom
business from Nissan Motor Co., Ltd. and Nissan Texsys

TOYODA AUTOMATIC LOOM WORKS, LTD. 3

To Our Shareholders

Co., Ltd. (Nissan Texsys) in April 1999. Production transfer

New Business Modelwas completed by the end of 1999, and in February 2000 weThroughout its long history, Toyoda has grown by constantly

began manufacturing the LW600 series water jet loom, aimproving upon its technology base. We now have diversified

product originally developed by Nissan Texsys which webusinesses, and each business area has its own core

improved further through our proprietary technology. Thistechnologies. The challenge is to transcend existing businessmerger has expanded our weaving machinery product range,

areas to integrate our proven technologies in various fields

which had been limited to air jet looms, and will boost ourand develop new technologies for next-generation productsmedium-term textile machinery sales.

and enter new business domains.
At the same time, we will
introduce the concept of business

Management Challenges andmodels to each of our business units.

Business Model

As independent units, each of ourbusiness operations will analyze its

Management Challenges

business environment and develop

Competition has accelerated andappropriate market and productnow transcends national boundaries.

strategies, while evaluating theWe resolve to continue increasing

profitability and efficiency of capital

our value as a corporation throughdeployment. Through such businessspeedy decision-making and efficientmodels, each operational unit will

allocation of management resources

contribute to the steady expansion ofin order to generate continuedprofits. We also intend to utilize IT toconsolidated growth and improve

speed up the management process

our market position. To compete

and to raise the productivity ofTadashi Ishikawa, President

and thrive in today’s global business,

indirect operations.

we will design and develop attractive products that meetmarket needs in a timely manner. At the same time, we willcontinuously improve product and service quality and lowerMedium-Term Management Strategy

manufacturing costs through the Toyota Production System(TPS), while reviewing our operating structure to increase

Our medium-term strategy, which is focused on ensuring

sales. We also realize the importance of improving work

growth in the next several years, can be summarized asprocesses by using state-of-the-art information technology

follows:(IT), as well as reducing fixed costs and further raisingcustomer satisfaction levels.
Rapid advances in IT have changed the way business isBecome a global leader in the forklift and car airconditioning compressor businesses

done. To take advantage of the opportunities these changes

Toyoda is the undisputed leader of the domestic forklift

present, we are implementing strategic initiatives andmarket and holds a substantial share of the global market,

structural changes that will help us grow further in theand we continue to strengthen this market position. We

twenty-first century.

made a significant step toward achieving this goal in June

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TOYODA AUTOMATIC LOOM WORKS, LTD.

2000. Moving to complement our mainstay lineup ofemphasize developing environmentally friendly products andcounterbalanced forklifts, we acquired BT Industries AB ofrecycling technology. In addition, we have made obtaining

Sweden, which has a solid global presence in the warehouse

ISO14001 certification a company-wide priority.

equipment market. This move better positions us to

The most important aspect of our corporate mission is toprovide comprehensive materials handling solutions. Increate greater shareholder value. By boldly implementing theaddition, in late July we agreed with TMC to strengthen thestrategies outlined above, we will strive to maximize

forklift and materials handling systems businesses of bothshareholder value and satisfy the expectations of ourcompanies. The entire forklift and materials handlingcustomers, employees, business partners and thesystems businesses of TMC are to become part of Toyoda

communities we serve.

in April 2001, although the details are still being workedout.

We thank all of our shareholders, customers, partners,
and employees for your support and enthusiasm during theWe are a leading global manufacturer of car air-past year. As we navigate our changing markets, we willconditioning compressors. We are continuing to aggressivelycontinue to work to meet your needs and maintain yourdevelop new products that satisfy customers, thereby furtherconfidence.

strengthening our market position.
July 2000
Remain a stable supplier of Toyota automobiles andengines
As a core member of the Toyota Group, we will strive toincrease the value of Toyota automobiles by improving thequality and lowering the costs of our products. An importantrole for the engine division is the development of highperformance and environmentally friendly engines.

Chisei Isogai
Chairman

Become a successful LCD manufacturer
We have begun production of low-temperature polysilicon
TFT-LCDs, a product with outstanding growth potential. By
improving the manufacturing process through TPS and otherAkira Yokoi

methods, we will increase the profitability, quality andExecutive Vice Chairman

productivity of our LCD operations.
Increase corporate value
To remain globally competitive in our rapidly changing
markets, we are steadily implementing management

Tadashi Ishikawa

strategies designed to improve earnings. At the same time,

President

we recognize that an important part of our overall mission
consists of fulfilling our social responsibilities. For example, aspart of our concern for protecting the environment, weTOYODA AUTOMATIC LOOM WORKS, LTD. 5