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Materials Handling Equipment

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

Medium-Term Direction of BusinessWe will work to develop and propose new products and services incorporating cutting-edge technologies through the proactive
use of open innovation and co-creation with customers.
Our goal is to become the logistics solutions partner of the first choice for customers by meeting their wide-ranging needs
and helping them increase their logistics efficiencies based on the Toyota Industries Group’s comprehensive strengths coveringboth the lift trucks and logistics solutions fields. At the same time, we aim to resolve social issues and realize a sustainable
society through logistics.

Business Characteristics
Strengths

Opportunities• An extensive logistics-related product lineup both for lift trucks(internal-combustion type, electric type, fuel cell (FC) type, etc.) andlogistics solutions products (automated storage and retrieval
systems, automatic guided vehicle (AGV) systems, automated lift
trucks, etc.)• An expansion of global logistics volume in line with an increasein the world population and economic growth• High technological capabilities, including those linked toenvironmental and safety performance• Production know-how that ensures high levels of quality andproduction efficiency• Growing need for products with high fuel efficiency and low
environmental impact that contribute to carbon neutrality• Growing needs for higher logistics efficiencies, automation andlabor saving prompted mainly by soaring labor costs and labor
shortages• Increased recognition that logistics is an essential business• Global, well-developed production, sales and service networks

Risks• An extensive value chain encompassing in-house development
and production of engines, motors and other key components;
total after-sales services including maintenance and inspections aswell as operational management; and sales financing operations
offering more options in sales• Restrained capital investment due mainly to a slowing economy
and disasters• No. 1*1 in lift truck unit sales in the world• A wealth of experience and know-how as well as a global networkin the Logistics Solutions Business• Software development capability to create such systems as awarehouse management system*1: Survey by Toyota Industries Corporation• Weaker sales due to intensifying competition• Change in business environment triggered by an expanding
market of low- to mid-priced lift trucks• Suspension of production caused by supply chain disruptions• Weaker demand for internal-combustion lift trucks resulting from
more stringent environmental regulations• Emergence of next-generation robotics products as analternative to lift trucks

Materials Handling Equipment Sales

Net Sales

Operating Profit

FY2022

FY2022¥1,789.4 billion¥113.6 billion

200

FY2023

FY2023100

121.8 billion

02,283.8 billion¥¥(Thousand units)

300

(FY)

Business Structure
Toyota Industries’ Materials Handling Equipment Business is operated under a two-organization structure: Toyota Material
Handling Group (TMHG) responsible for the Lift Truck Business and Toyota Advanced Logistics Group (TALG) engaging in
the Logistics Solutions Business. TMHG and TALG collaborate to achieve overall growth of the Materials Handling Equipment
Business while reinforcing individual businesses.

Toyota Material Handling Group (TMHG)
As a market leader in the materials handling equipment andlogistics fields, Toyota Industries’ comprehensive strengths
lie in its ability to respond to specific and ever-changing
needs of customers on a global scale. We assist customers
worldwide in attaining greater logistics efficiencies by
delivering optimal solutions to each logistics site. Under the
TMHG management structure, we engage in the Lift TruckBusiness under the TOYOTA, BT, RAYMOND, CESAB and
Tailift brands. Mutually utilizing the development and sales
strengths of each brand, TMHG is promoting businessglobally.
We basically carry out product development in three
regions, namely Japan, North America and Europe. Basedon this structure, we develop and manufacture products ineach region, which are matched to the specific local needs
and characteristics, and ensure quick product delivery tocustomers. At the same time, we seek greater productappeal by conducting in-house development and productionof such key components as engines and motors, which
greatly influence the performance of lift trucks.
While continuously offering products that will contributeto the safety of customers’ logistics sites, we are improving
the energy-saving performance and enhancing our electric lift
truck lineup in response to the trend toward decarbonization,
including enforcement of stricter environmental regulations
and growing eco-consciousness worldwide. We arealso promoting the development of autonomous driving
technology as a response to growing needs for greater
Toyota Material Handling Group

TMHG
19

20

21

22

Despite a decline from 2021, sales in the lift truck market in 2022 remained at a 2-million-unit level on the back of thecontinued demand recovery following the resumption of economic activities around the world. Amid this business climate,
Toyota Industries engaged in sales and after-sales services corresponding to respective markets. As a result, unit sales oflift trucks for fiscal 2023 were up 35,000 units, or 12%, to a total of 317,000 units from the previous fiscal year. In the
Logistics Solutions Business, we continued to see strong demand related to e-commerce and warehouse logistics as well
as a recovery in airport-related orders. Capitalizing on this development, we have sought to further strengthen ourbusiness through collaboration with our subsidiaries engaging in logistics solutions operations in Europe and the UnitedStates and by welcoming a German company as our subsidiary. As a result, net sales in fiscal 2023 increased ¥494.4
billion, or 28%, from the previous fiscal year to ¥2,283.8 billion.

Toyota Industries Report 2023

Toyota Industries’ Global Lift
Truck Market Share(Survey by Toyota Industries
Corporation, 2022)

23

TMHJ

TMHNA

TMHE

TMHI

TMHCN

Toyota Material
Handling Japan

Toyota Material
Handling
North America

Toyota Material
Handling Europe

Toyota Material
Handling
International

Toyota Material
Handling China

Business Overview in Fiscal 2023

18

logistics efficiencies mainly driven by labor shortages.
In addition to supplying high-quality products, weconsider our strength to be able to support customers
throughout our entire value chain, which encompasses
everything from providing after-sales services through our
extensive networks to offering sales financing operations.
On the sales front, we are offering products and logistics
improvement solutions optimally matched to individual
customers’ logistics sites. Simultaneously, we are responding
to needs for fleet management that optimizes the operationof multiple lift trucks for customers conducting businessglobally. In terms of services, we have established a structure
to provide swifter and more efficient after-sales services by
centrally and digitally managing information on lift trucks
owned by customers and their history of repairs while
assigning experienced and highly skilled personnel andutilizing leading-edge information technology (IT). As anothereffort, we are putting in place a structure to offer extensive
after-sales services by establishing a system to certify
dealers’ after-sales service facilities and offering programs
to train service staff so that customers can use our productswith an increased sense of reassurance. We are also
strengthening our internal sales financing operations mainlyin Europe, the United States and other developed countries
in order to flexibly respond to customers’ diverse needs forfund procurement. Additionally, TMHG is collaborating withTALG to create synergies between the lift trucks and logistics
solutions fields in development and other domains.

The Toyota Material Handling Group possesses several brands such as TOYOTA, BT and RAYMOND and engages in businessby dividing the world into five areas: TMHJ (Japan), TMHNA (North America), TMHE (Europe), TMHI (Asia, Australia, etc.) and
TMHCN (China).

ToyotaIndustries
20%

World No. 1

Main ProductsElectric lift truck

Reach-type electric lift truck

Electric low lift truck

Internal-combustion lift truck

Automated lift truck19

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Toyota Advanced Logistics Group (TALG)
In spite of the growing concern for a global economic
slowdown, the need for logistics automation remains strong
and has, in turn, necessitated solutions for more advanced
logistics issues. Amid this environment, we go a step beyond
just providing a broad range of materials handling equipment
and associated software programs and are reinforcing our
Logistics Solutions Business to more meticulously satisfy
each customer’s varying needs by leveraging our logistics
improvement know-how accumulated to date. Under the
TALG management structure, the Logistics Solution Divisionof Toyota Material Handling Japan, U.S.-based Bastian
Solutions LLC, Netherlands-based Vanderlande Industries
Holding B.V. and Germany-based viastore*2, which joined
the Toyota Industries Group in July 2022, are collaborating indevelopment, sales and other activities to expand businesswhile leveraging their individual strengths.
viastore, which became a new member of the Toyota
Industries Group in July 2022, mainly engages in thein-house development of software for controlling andmanaging various materials handling equipment andsmall- to medium-sized automated storage and retrieval
systems. It provides its products to a wide range of sectors
from retail to manufacturing, logistics and food, primarily inEurope. In particular, it has strengths in automation that links
multiple processes, such as storage and transportation,with optimal materials handling equipment and software,
garnering high acclaim in the market. Collaboration among
TALG companies has begun and has already led to someconcrete accomplishments, including a large-scale order fora solution combining viastore’s software. We will strengthensuch collaboration further in order to respond to customers’automation needs as a Group-wide effort and seek toachieve further business expansion.
Toyota Advanced Logistics Group

TALG
Logistics
Solution
Division of
Toyota Material
Handling JapanTALNA*3/
BastianVanderlande

viastore*2: Logistics system integrator in Germany, viastore is a collective name for four
companies: viastore SYSTEMS GmbH, viastore SOFTWARE GmbH, viastore
International GmbH and Buck Engineering GmbH.
*3: Toyota Advanced Logistics North America (Holding Company of Bastian)Main Products
and Systems
Automated storage
and retrieval system

Simple AGV

SorterHigh-speed storage andpicking system

Airport baggage
handling system

Business Activities in Fiscal 2023
As we have confirmed a potential regulatory violation related to Japan’s emissions certification for lift truck engines, we havesuspended the shipment of lift trucks for the Japanese market since March 2023. We have been working on revealing the fulldetails and analyzing the root cause. Based on the findings, we intend to thoroughly implement measures to prevent recurrence.
At the same time, we have already been doing whatever we can at present, such as separating the certification function fromour development department to reinforce the inspection system for legal certifications. (As of June 30, 2023)
In 2022, a recovery in global demand continued due to the reopening of economic activities in respective countries, andunit sales of lift trucks remained at a 2-million-unit level. Amid this environment, we worked to enhance the product appeal of
our mainstay lift trucks and expand sales. We also strove to offer reliable after-sales services, enhance responsiveness to largeorder customers and provide solutions for logistics issues through the introduction of optimally packaged systems. In the fieldof lift trucks, we made efforts to increase our product lineup in each region and promoted the development of autonomous
driving technology internally and with external organizations. Our latest products and solutions were showcased at Logis-Tech
Tokyo 2022 under the themes of “safety, decarbonization and automation.” We also worked to reinforce our IT-based services,enhance safety and augment our competitiveness in the environmental field mainly through electrification in order to ensure amore accurate response to the needs of individual customers.
In the logistics solutions field, we have been fostering cooperation in sales activities by mutually supplying equipment andsystems while encouraging each TALG company to leverage its strengths to bolster business. We have also been accelerating
coordinated activities such as promoting collaborative efforts by TMHG and TALG in the planning and development fields.
As specific examples, we have been promoting cooperation mainly with T-Hive B.V., a company newly established in the
Netherlands, in the development of a seamless control system encompassing all autonomous vehicles, as well as collaboration
with viastore in small- to medium-scale projects in Europe.

20

Toyota Industries Report 2023

Meanwhile, Aichi Corporation, which possesses the top brand*4 in the field of aerial work platforms in Japan, saw a recovery
in capital investment mainly in the electric power industry. As a result, sales amounted to ¥60.6 billion, up ¥4.0 billion, or 7%,
from the previous fiscal year.
*4: Survey by Aichi Corporation

Activities of TMHG
Japanese Market
In 2022, the Japanese lift truck market saw only a slightincrease in sales from the previous year due mainly to theimpact of the spread of COVID-19 variants. Unit sales ofToyota Industries’ lift trucks increased 4% from the previous
fiscal year to 49,000 units, and maintained the top position*5
in fiscal 2023 for the 57th consecutive year.
The diversification of customer needs, heightenedon the back of changes such as an expansion of the
e-commerce market, labor shortages and growing safety
and environmental consciousness among companies, has
further accelerated. As the leading manufacturer of materials
handling equipment, Toyota Industries has been proactively
promoting the development and release of new products thatlead to resolving issues facing customers.
Amid the accelerated move in Japan toward achievingcarbon neutrality, Toyota Industries released a new fuel cell
lift truck in September 2022. The price of the new lift truck
has been reduced by 30% thanks to a significant reductionin the cost of the fuel cell system, and durability*6 has been
doubled*7 compared to the previous model.
Also in September 2022, Toyota Industries participatedin Logis-Tech Tokyo 2022 under the concept of “Varying
Optimum Solutions for Varying Logistics Sites: A Just
Solution for Your Logistics.” Based on the three themes of“safety, decarbonization and automation,” which represent
issues recently facing customers in their respective logistics

sites, we exhibited our latest lift trucks in addition tologistics solutions that incorporate leading-edge automation
technologies. Our booth, which was one of the largest
among the participating companies, was visited by some
21,000 customers.
At our booth, we demonstrated the operations of our
new autonomous lift truck capable of automated loadingeven when the truck’s stopping location and load position
are not fixed. This capability has been achieved throughsuch technologies as guideless automated driving using
3D-LiDAR*8 and pallet location and position detection using
image recognition.
*5: Calculated by Toyota Industries Corporation based on the data issued by the Japan
Industrial Vehicles Association*6: Output performance maintenance period of FC systems (period that the output canbe maintained at 80% or more of the performance at the time of shipment)*7: Survey by Toyota Industries Corporation, based on JIS D6202 (60S fuelconsumption pattern of internal-combustion lift trucks)*8: A sensor that can accurately measure the distance to an object by emitting a laser
beam onto it and measuring the reflected light

New fuel cell lift truck

TMHJ booth at Logis-Tech Tokyo 2022

North American Market
The rapid expansion slowed down in the North American lift
truck market in 2022, and on a full-year basis, the market
remained on par with 2021. Orders increased as we captured
the strong demand in the e-commerce and retail sectors
and resumed the shipment of certain internal-combustion lift
trucks. Against this backdrop, the combined unit sales of the
TOYOTA and RAYMOND brands in fiscal 2023 increased by
29% over the previous year to 98,000 units.
In fiscal 2023, Toyota aggressively launched an operator
assist system that detects pedestrians and objects behindthe lift truck to ensure greater safety and security at
customers’ logistics sites as well as new electric lift trucks
in response to growing market needs for electrification. We
also added more than 30 operator assist and other functions
to our three-wheel electric lift trucks. In addition, to meetthe rising need for logistics automation on the back of labor
shortages, we sell an automated guided vehicle (AGV)that can be customized
according to customer
needs and requires nolarge-scale building
modifications.
Raymond is also
actively expanding its
product offerings andThree-wheel electric lift truck
services to meet various
to which operator assist and other functions
have been added
customer needs. For
example, Raymondenhanced sales of compact and highly functional lithiumion batteries that reduce the charging time comparedwith conventional lead-acid batteries and contribute to
the improvement of customer productivity. Raymond isalso contributing to the further improvement of customer
safety by releasing an electric low lift truck equipped with a21

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telematics function and launching a service to support driving
in dangerous areas by linking the telematics function with thereal-time location measurement system.
Looking ahead, we will continue to leverage the strengthsof each brand and reinforce technological development
to meet electrification needs. In addition, through closer

collaboration with the Logistics Solutions Business, wewill accurately respond to customers’ needs for logistics
automation. At the same time, we will strive to expand thelineup of products with excellent environmental performance,
while responding to the accelerating trend toward carbon
neutrality by utilizing the latest technologies.

European Market
In 2022, the European lift truck market slowed down due tosupply chain disruptions and the conflict in Ukraine. Toyota
Industries posted unit sales of 99,000 units in fiscal 2023,
up 8% from the previous fiscal year. In addition to equipment
sales, orders for after-sales services and sales of parts
remained steady.
In response to the accelerating trend toward carbon
neutrality in Europe, Toyota Industries has been working
to expand the lineup of products equipped with lithium-ion
batteries and released a high-output counterbalanced lift
truck as well as internal-combustion lift trucks that comply
with the latest EU emissions regulations to meet the needs ofenvironmentally conscious customers.
In terms of environmental initiatives, electricity used at all
European bases has been completely switched to renewableenergy by selecting the optimum method matched to eachbase’s energy situation. This marks the first instance in the entire
materials handling equipment industry that 100% of power issourced from renewable energy at all European bases.
As a response mainly to labor shortages, we launched
a new automated horizontal carrier. This AGV can be
combined with our existing autonomous lift trucks and awarehouse management system to achieve an even higher
logistics efficiency for the entire warehouse, and we havebeen proactively offering the resulting solution to customers.
We will continue to expand our product lineup boasting
excellent environmental performance and incorporating
autonomous driving technology.

22

Toyota Industries Report 2023

Logistics Solution Division of Toyota Material Handling Japan
In recent years, labor shortages and an increase in logistics
volume following an expansion of the e-commerce market
have resulted in a growing need for automated and more
efficient operations in the logistics industry. To respond tosuch issues facing customers, we have enhanced our productlineup to cover every logistics system, from autonomous lift
trucks and AGVs to the leading-edge systems for use inlarge-scale e-commerce distribution centers, and have been
receiving increasing orders for these products.
Moreover, the work style reform-related law that will
go into effect in 2024 in Japan is expected to aggravatethe shortage of truck drivers. At relay centers mandated
to be set up in accordance with the law, there is an urgent
need for better efficiency and labor saving in truck loading
and unloading operations. Automation of truck loading andunloading operations using lift trucks has lagged even at
cutting-edge distribution centers. To counter these issues,

we have developed an autonomous lift truck that features theworld’s first AI-based technology to automatically recognize
the location and position of the truck and its cargo and runs
autonomously to conduct loading and unloading operations.
We exhibited the lift truck at Logis-Tech Tokyo 2022.
We have been receiving inquiries for this lift truck frommany customers. In the future, we will repeat feasibility tests
in terms of safety, work
efficiency and cost andoffer the product as
an optimal solution for
individual logistics sitesof many customers,
thereby helping themcounter the impending
labor shortage in 2024.
Autonomous lift truck
for truck loading and unloading

BastianAutomated horizontal carrier

ALOMA*9 and Chinese Markets
Toyota Industries covers the ALOMA markets of some 60
countries in 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,
RAYMOND and Tailift brands.
The ALOMA market in 2022 outperformed the sharp
sales growth in 2021 and recorded yet another highest unit
sales while growing 109% year on year. In China, on theother hand, unit sales fell to 67% of the previous fiscal year
due in part to COVID-19, which started spreading again.
Under such circumstances, we are working to expand
the introduction of lithium-ion batteries to meet the needs
for electrified equipment whose demand is expected toincrease in step with heightened environmental awareness.
Additionally, we newly released in the ALOMA region our
SEnS+ (Sense Plus) operator assist system that detects
pedestrians and objects behind the lift truck to contribute tocustomers’ safe operations.
Customer needs will continue to diversify, including theaccelerating trend toward electrification, greater logistics
efficiency, better safety features and automation. In response,
we will continue to collect information from dealers in eachcountry and regional offices in Asia, the Middle East andSouth America in our efforts to provide products and services
that satisfy our customers.

Activities of TALG

Bastian, mainly operating in the North American market,
has been responding to the logistics automation needs ofcustomers in a broad range of fields, including the retail,e-commerce and manufacturing sectors. The businessenvironment was difficult in fiscal 2023, as a concern foran economic slowdown has grown globally. Despite thisenvironment, in addition to repeat orders for large-scale
projects based on long-standing relationships of trust withexisting customers, the company successfully received manyorders by promoting collaboration with other companies in
the Toyota Industries Group. These include an order for alarge project through collaboration with viastore; a projectthat integrates Vanderlande’s system for the first time; small-to medium-scale projects through collaboration with dealersof the TOYOTA and RAYMOND brands; and its first project
to collaborate with the Logistics Solution Division of TMHJ in
Asia. Going ahead, Bastian will satisfy the more sophisticatedand diversifying needs ofcustomers by facilitating
the development of
its own core systems
and products andtaking advantage ofcollaboration within the
Toyota Industries Group.
Bastian’s mini load autonomous vehicle(autonomous mobile robot) developed in-house

Vanderlande
SEnS+

In addition, jointly with dealers, Toyota Industries
operates a program to promote sales activities with a focus
on logistics improvement solutions and has been making
proposals to visualize customers’ logistics sites, improvetheir safety and reduce costs. Through the program, we havebeen strengthening our relationships of trust with customers
and have successfully expanded our business domains.
As a total solutions partner capable of satisfying diverse
logistics needs, we will make concerted efforts with dealers
in each country to undertake various initiatives.
*9: A LOMA is a Toyota Industries term for Asia, Latin America, Oceania, the Middle
East and Africa.

Vanderlande, offering logistics solutions globally, hasbeen accelerating system development optimized forleading companies in the warehouse logistics and parcel/
postal service industries as well as operations of focusedbusiness sectors. In this way, Vanderlande is making efforts
to strengthen its response to increasingly sophisticatedcustomer needs. It has also been working with the Logistics
Solution Division of TMHJ and Bastian to introduce its
systems into the Japanese and North American markets,
thereby successfully expanding its business domains throughcollaboration within the Toyota Industries Group.
In the airport business, demand has been showing
a gradual recovery following an upturn in the number ofpassengers. In fiscal 2023, Vanderlande captured thedemand recovery, as it concluded large-scale servicing

contracts with multiple customers and commenced
operation of its highly efficient security screening system
based on a dual-lane concept at Frankfurt International
Airport.
In these businesses, Vanderlande will work to provide
even greater value to customers for services that assume an
important role. Efforts
will be made to monitor
operational status andfacilities by using digitaltechnologies and makeproposals to optimize
operations of customers
using its products.
Security screening system

introduced for the first time23

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Automobile

In the fields ranging from vehicles to engines, car air-conditioning compressors, electronic devices and batteries,
Toyota Industries continues to meet the expectations and trust of its customers.

Business Characteristics

Net Sales

Operating Profit

FY2022

FY2022

Strengths• An agile structure to undertake all aspects from planning anddevelopment to production within a plant (Vehicle)¥792.8 billion• Highest-level production efficiency and quality among all
Toyota-affiliated automobile body manufacturers (Vehicle)• Know-how on the development and production of diesel
engines and turbochargers (Engine)• Highly efficient production of high-quality gasoline engines,
including those for use in hybrid electric vehicles (HEVs) (Engine)• Excellent product development capability centered around fuelefficiency and car electrification (Car air-conditioning compressor)• Global top-share*1 products for use in a full range of vehicles,from internal-combustion vehicles to HEVs, plug-in hybrid electricvehicles (PHEVs), battery electric vehicles (BEVs) and fuel cellelectric vehicles (FCEVs) (Car air-conditioning compressor)

FY2023957.8 billion

300• Development and production of electronic components anddevices for electrified vehicles, with top-level quality (Electronics)

Engine Sales• Material synthesis technology, simulation technology for examining
materials and structures and analysis technology (Battery)800• Shrinking of the automobile market caused by economic
slowdown• Customers becoming less willing to buy fuel-efficient products
following less stringent environmental regulations• A drop in product competitiveness due to the yen’s appreciation
or inflation• Suspension of production caused by supply chain disruptions*1: Survey by Toyota Industries Corporation

We will contribute to TMC as a development and production base of compact sports utility vehicles (SUV) by leveraging
our comprehensive strengths derived from the highest level of safety, environment, quality, cost and delivery (SEQCD)
among all Toyota-affiliated automobile body manufacturers and through greater collaboration within the Toyota Industries
Group.

Business Overview in Fiscal 2023
In fiscal 2023, sales of the RAV4 decreased outside Japan, offsetting an increase in the domestic market. As a result,unit sales declined by 18,000 units, or 6%, to 290,000 units. Net sales decreased by ¥0.3 billion, or 0.4% year on year,to ¥83.1 billion.

Commencing Production of a Special-Edition RAV4 with a Stronger
Off-Road Feel

200

(FY)

Risks

Medium-Term Direction of Business(Thousand units)• Technical expertise in electronics accumulated through handling
projects for Toyota Motor Corporation (TMC), external sales,
and in-house projects (Electronics)• Sales expansion in each sector in line with growth of theautomobile market

34.6 billion¥

Vehicle Sales

100• Increasing needs for fuel-efficient products due to stricter
environmental regulations and growing environmental
consciousness

FY2023¥• Monozukuri (manufacturing) using equipment created in-house to
produce high-quality products and flexibly accommodate changes
in production volume (Car air-conditioning compressor)

Opportunities¥33.0 billion

n Vehicle

0
19

20

21

22

23

(Thousand units)

600
400

vehicle has been planned, proposed and adopted based on
the results of a survey conducted on models we exhibited at
Tokyo Auto Salon 2021.
*2: TMC’s advanced preventive safety package
covering situations prone to traffic
accidents*3: All-terrain tires for use in wide-ranging
applications, from paved to rough surfaces
Adventure “OFFROAD package II”

Proposing “RAV4 Customizing Service” at Tokyo Auto Salon 2023

200
0
(FY)

Toyota Industries partially upgraded the RAV4 in October
2022 to expand the functionality of Toyota Safety Sense*2,
and created a special edition, the RAV4 Adventure“OFFROAD package II.” This special-edition vehicle is fittedwith 18-inch all-terrain tires*3 and has a 10 mm higher
minimum ground clearance to more strongly emphasize theoff-road image of the RAV4. Its particularly distinguishingmatt and uneven surface black paint (“GORI GORI BLACK”
paint) applied to the front bumper and other parts of the

19

20

21

22

23

Compressor Sales(Million units)

30
20

Under the mantra “Make even better SUVs” to see a smile ofjoy from our customers, we are working with TMC to makethe RAV4 a more attractive SUV. Since Tokyo Auto Salon
2020, we have showcased outdoor and professional concept
models of the RAV4. In 2023, instead of exhibiting readymade concept models, we proposed a service to customize
the RAV4 according to customers’ preferences and displayed
three customized models with a stronger off-road or onroad appeal. Using the RAV4 PHEV manufactured by Toyota

Industries as a base model, these vehicles were equippedwith carefully selected parts made by other companies. To
ensure customers’
smiles of joy with ourRAV4, we will continue
to plan various
campaigns with theirpoint of view in mind.
Toyota Industries booth

10
0
(FY)

TOPIC
19

20

21

22

Winning the Most Excellent Karakuri Kaizen Award for the First Time23

At the Karakuri KAIZEN*4 Exhibition 2022 hosted by the Japan Institute of Plant Maintenance, Toyota Industries’ slope
climbing system was selected among 224 projects of 62 companies and received its first*5 Most Excellent Karakuri
Kaizen Award. The Assembly Section of the Manufacturing Department, Vehicle Division, created a non-powered
mechanical system to let parts trays climb a slope. The aim was to eliminate the difficulty of the tray setting operation,
which used to involve lifting a tray from the ground level and setting it on a worktable. The system uses pulleys and theprinciple of leverage to convert the motion of horizontal sliding (pushing a tray
aside) to that of vertical sliding (letting a tray climb a slope). The project wasrecognized for its simple karakuri system only requiring minimum operator action,
which in turn reduces the operating time.
*4: Achieving kaizen (improvement) at low cost by karakuri (Japan’s traditional, non-powered mechanical systems
that utilize gravity, the principle of leverage, etc.)*5: Toyota Industries has been participating in the exhibition since it was first held in 1994 and has received an
Excellent Karakuri Kaizen Award three times in the past.

24

Toyota Industries Report 2023

Project members receiving the award25

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Business Activitiesn Enginen Car Air-Conditioning Compressor

We have suspended the shipping of certain engines we manufacture for lift trucks for the Japanese market, as we haveconfirmed the excess over the domestic (Japanese) emissions regulation values due to aging degradation, and potential
violation of regulations related to Japanese certification for emission. Based on the decisions and instructions of therelevant Japanese authorities, we will put all our efforts into measures toward resuming shipping and corrective measureson already sold products, as well as recurrence prevention.
For the prevention of recurrence, there is an ongoing investigation by a special investigation committee consisting of
independent external experts, in addition to the investigation led by external lawyers. We will clarify the details of the caseand analyze the root causes of these issues, and compile recurrence prevention measures based on the findings. At thesame time, we have already been doing whatever we can at present, such as separating the certification function from ourdevelopment department to reinforce the inspection system for legal certifications. (As of June 30, 2023)

Unit sales in fiscal 2023 totaled 847,000 units, an increase of 43,000 units, or 5%, from the previous fiscal year due
mainly to a growth in sales of gasoline engines. As a result, net sales increased by ¥54.8 billion, or 20% year on year, to¥322.4 billion.

Diesel Engines Multipurpose Vehicle (IMV) series targeting emerging
countries and the HiAce.
The V-type 6-cylinder F33A diesel engine, anothermainstay product of ours, is fitted in the Land Cruiser “300.”
With a view to the era of carbon neutrality, the engine
has been downsized from the previous eight cylinders to
six cylinders to reduce mass. Adoption of the twin turbo
developed in-house also realizes high levels of environmental
performance and quiet operation while allowing the vehicle tomaintain the output and rough-surface running performancerequired of the Land Cruiser.

Gasoline Engines 
A25A engine to our lineup.
In response to the growing demand in the Indian market
for engines for use in HEVs, Toyota Industries Engine
India Pvt. Ltd. (TIEI), a consolidated subsidiary in India,
commenced production of the 1.5-liter M15A and 2.0-liter
M20A engines in August 2022.

26

Toyota Industries Report 2023

The growth of the car air-conditioning compressor market is
expected to be slower than anticipated due to the lingering
uncertainty of parts supply shortages as well as prolonged
geopolitical risks. That said, we expect that the growth willcontinue over the medium term on the back of expanding
automobile sales and an increase in the number of vehicles
fitted with an air conditioner. As new developments in theautomobile market, especially for electrified vehicles, by2035 all automobiles sold in China must be electrified*9 andsales of internal-combustion vehicles, including HEVs and
PHEVs, will be banned in Europe. In light of such tightening
regulations and expanding needs in various countries andregions, automakers are aggressively releasing new models,and unit sales of electrified vehicles are expected to increasesignificantly in the future.
*9: Announced by the Chinese Society of Automotive Engineers

Expansion of Electrified Vehicle Market
Amid the growing demand for electrified vehicles due toheightened environmental awareness and more stringent
regulations on internal-combustion vehicles around theworld, demand for electric compressors is expected to
exceed the demand for compressors for internal-combustion
vehicles in 2028, driven particularly by a sharp increasein BEV sales in the Chinese market. In step with thisdevelopment, we are enhancing our electric compressor
lineup and strengthening our production structure to increase
sales to automakers around the world.

Demand Forecast by Compressor Type*10(Million units)
90

60

30

*6: Development policy and method for vehicle creation based on a modular platform
0

(FY)

2023

2026
Electric typeEngines for Industrial Fields 
Toyota Industries’ engines for industrial fields are used
for a wide variety of applications, including our lift trucks,
and adopted by many manufacturers of GHPs*7, CHPs*8,

In fiscal 2023, unit sales of car air-conditioning compressors increased 2.184 million units, or 8%, from the previous
fiscal year to 30.937 million units due mainly to higher sales in North America and Europe. Net sales were up ¥73.6
billion, or 21% year on year, to ¥429.7 billion.

Environment Surrounding the Automobile Market

Engines for Automobiles

The gasoline engines that we produce under consignment
from TMC, namely the 2.5-liter A25A and 2.0-liter M20A,
are mainly fitted in the RAV4 and HARRIER, which areachieving robust sales. Developed based on the Toyota
New Global Architecture (TNGA)*6 concept, these engines
offer both excellent driving performance and environmental
performance. Responding to the advancement of car
electrification, we have also added an HEV version of the

In a future society in which significant advancement in car electrification and autonomous technology is expected,
we aim to leverage our core compression technology and become an innovative component supplier. We will further
enhance our capability to develop products that offer excellent fuel efficiency, quieter operation, compactness, lightweight and easier vehicle mounting. In addition, with the aim of satisfying needs of a broader variety of customers, wewill utilize our accumulated technologies to expand our development domain into core components for drive systems.

Business Overview in Fiscal 2023

Business Overview in Fiscal 2023

Even amid the accelerated progress in vehicle electrification,
there is diverse and strong demand, mainly in emerging
countries, for diesel engines, which boast high durability andsuperb running performance, as a power unit suited for SUVs
and such commercial vehicles as pickup trucks.
Compliant with fuel efficiency and emissions regulations
in various regions and countries, the in-line 4-cylinder GD
diesel engine, which constitutes one of our mainstay engines,
has been introduced in more than 150 countries around theworld, mainly in Asia and Latin America, and fitted in ninevehicle models, including TMC’s Innovative International

Medium-Term Direction of Business

2029

2031

Internal-combustion type*10: Survey by Toyota Industries Corporation

generators and construction machinery.
*7: Short for gas heat pump; air conditioner driven by a gas engine*8: Short for combined heat and power; co-generation system

27

Business Activities

Top Message

Value Creation

Promotion of ESG
Initiatives

Initiatives for Growth

Corporate andFinancial Information

Business Activities

Expansion from Air Conditioner Parts to Core Components of Electrified
Vehicles Driven by Diversifying Needs
With the growth in electrified vehicles, there have been new
challenges for BEVs as vehicles, creating a need for electriccompressors to diversify. In response, we are rolling out new
products tailored to such new needs by utilizing our productdevelopment capabilities cultivated to date.
As electrified vehicles need to secure a heat source that
substitutes for the exhaust heat of the engine when running aheater, it has become necessary to operate the compressor
during the cooling and heating of the vehicle interior. With theaddition of heat pump heating, which takes heat from the air,
it is now required to extend compressors’ uptime and range

of use. As such, we are working to improve the reliability ofelectric compressors and achieve higher efficiency to reducethe impact on vehicle driving range.
To prevent battery performance deterioration andshortened life during high-power operation and quick
charging of vehicles, compressors also need to provide afunction for cooling the battery in addition to heat-pump
air-conditioning. We have developed and released largecapacity electric compressors as a core component ofelectrified vehicles, thereby satisfying the varying needs ofelectrified vehicles with our extensive product lineup.

the Higashiura Plant in Japan and TACK and assembly lines
at the Kariya Plant. Believing that producing and supplying
products close to our customers will lead to improving ourcompetitiveness, we are also considering local production in

Europe and the United States depending on future orders.
*11: Regulation in China mandating automakers to produce a certain percentage of
BEVs and other new energy vehicles

Worldwide Bases of Car Air-Conditioning Compressors (As of March 31, 2023)

TDDK
DNDE

Germany

Germany

Notional image

YST

DICH

MACI

China

China

U.S.A.

DIAM

U.S.A.

HEV

BEV

TICO

DNTS
Heating

Cooling

TACG

Japan

Italy
SUBROS

TACK

India

China

Cooling

U.S.A.
TICA

U.S.A.

TACI

Indonesia

DNBR

Battery temperature control

Electric compressor

BrazilElectric compressor

Consolidated production bases
Vehicleinterior
cooling

Needs of
BEVs

Vehicleinterior
heating

Batterytemperature
control

Electric
compressor
for BEVs

Large
capacitythrough responding to the stringent demands of automakers
worldwide and by developing devices from processing
machines to associated cutting tools in-house.

Establishing Stronger Global Production and Supply Structures
In step with the move toward more stringent fuel efficiency
regulations and car electrification, the car air-conditioning
compressor market is expected to witness fluctuations
in demand for compressors both for internal-combustion
vehicles and electrified vehicles. In response, we arebuilding a production structure less vulnerable to changes in
production volume through such measures as automating
our plants to save labor, designing mixed lines that enable
the production of a wide variety of products and creating aframework to increase production capacities in a phasedmanner.

28

Toyota Industries Report 2023

Technical service stations*12: Survey by Toyota Industries Corporation

Long life

Production-Related Strengths Underpinning Quality and Performance
High-precision machining and assembly technologies are
essential in realizing high quality and superior performance of
products. Toyota Industries realizes high-speed and highprecision machining by leveraging its know-how accumulated

Licensed manufacturers

Toyota Industries’ car air-conditioning compressors are widely adopted by automakers around the world, garnering the No. 1*12 position in global sales.

Meanwhile, electrified vehicles are rapidly becoming
popular in China driven by the country’s new energy vehicles(NEV) regulation*11. To capture booming demand, we
have already initiated local production at TD AutomotiveCompressor Kunshan Co., Ltd. (TACK) in March 2020 and at
Yantai Shougang TD Automotive Compressor Co., Ltd. (YST)
in June 2021. Led by China, electrified vehicles are expectedto spread globally faster than previously anticipated. To
respond to the rising demand for electric compressors, wewill set up a structure to manufacture 10 million units globallyby increasing the production capacity of processing lines at

TOPIC

Winning a 2022 JSME Medal for New Technology and Technological Development Award

Toyota Industries’ new scroll profile, newly adopted in its electric compressors, has won
two awards, a 2022 JSME Medal for New Technology by The Japan Society of MechanicalEngineers (JSME) and a Technological Development Award at the 73rd Society of Automotive
Engineers of Japan Award. In electric compressors, a larger capacity and higher-speed
rotation cause greater excitation force when compressing the refrigerant, which in turn resultsin more noise and vibration. To address this issue, we engaged in joint research with Toyota
Central R&D Labs., Inc. to advance their new tooth design theory*13 originally established forgears and created a new scroll profile in which compression force and gear thickness can be
set at required values. Our success in leveraging this technology to develop and commence
production of a low-noise electric compressor with less compression force fluctuations wasrecognized as groundbreaking and socially significant. Toyota Industries will continue tocontribute to the realization of a recycling-based society through the development of electriccompressors.

Scroll part

Cross-section diagram ofelectric compressor(Conventional
profile)(New profile)

Scroll profile*13: A theory to design an optimum spiral profile, which had been univocally determined against the targeted performance, by using
a solution that integrates geometry and dynamics

29

Business Activities

Top Message

Value Creation

Initiatives for Growth

Promotion of ESG
Initiatives

Corporate andFinancial Information

Business Activitiesn Electronic Devices and Other Products
Medium-Term Direction of BusinessCar electrification is steadily progressing, as evidenced by an increase in sales of various electrified vehicles, such as
HEVs, PHEVs, BEVs and FCEVs, amid the accelerated global trend toward a decarbonized society. The Electronics andBattery divisions will contribute to car electrification in a broad range of fields through the development of new productsby leveraging technologies cultivated to date.

Business Overview in Fiscal 2023
Higher sales of batteries and DC-DC converters resulted in an increase in net sales by ¥37.0 billion, or 43%, over theprevious fiscal year to ¥122.5 billion.

outdoor activities. The inverter, which used to be provided
mostly as an option by automakers, is now increasinglyoffered as a standard feature for all or certain grades ofvehicle models mainly sold in Japan.
In February 2023, Toyota Industries held an event
to outline to customers the benefits of the 1,500-W AC
inverter’s power source functionality. It was held during avehicle exhibition hosted by a car dealer and included a quizon how many electrical appliances, such as a microwave
oven, personal computer and electric blanket, can be usedsimultaneously using the power fed by an electrified vehicle.
Through the quiz and other activities, many customers
observed the convenience of using an electrified vehicle asa power source during outdoor activities, workation*15 andpower outages. While describing the capabilities, we also
asked customers to provide their opinions about the appeal
and usability of the power source. Through such activities,
we will promote product development that will lead to morewidespread use of electrified vehicles.
*15: A coined word that combines “work” and “vacation,” workcation is a way of
spending vacation while working at a resort or travel destination

Toyota Industries boothSnapshot of the experience-based event

Batteries
Electronics

Increasing Models Equipped with Our Bipolar Nickel-Metal Hydride Batteries

Contributing to More Widespread Use of Electrified Vehicles Globally
through Electronics Products
Since the 1990s, Toyota Industries has developed andmanufactured such electronic products as on-board
chargers and DC-DC converters for TMC’s HEVs andother electrified vehicles and honed its power electronics
technologies. In April 2022, while leveraging our accumulated
technologies and experiences, we developed a compact
and lightweight unit for BEVs, which integrates an on-board
charger and DC-DC converter. Incorporated in the electricity
supply unit (ESU)*14, which TMC adopted for BEVs for the
first time, the product serves as a core unit for charging andpower conversion function and is mounted in the bZ4X BEV.
By integrating an on-board charger and DC-DC converter
essential for running a BEV, the new unit is 23% smaller insize and 17% lighter in weight versus separately mounting
the two devices.
In January 2023, our newly developed compact andhigh-current DC-DC converter for HEVs was adopted in

TMC’s fifth-generation Prius. A DC-DC converter is a powersource unit that converts DC voltage into a voltage levelappropriate for individual devices. Specifically, it converts thehigh voltage (200–400 V) of batteries mounted on HEVs andother electrified vehicles into a lower voltage level (12 V) to
supply power to auxiliary batteries, control ECU, navigation
system, lights and other devices. The newly developed
DC-DC converter has a 1.5 times higher output current of
150 A compared to 100 A of conventional models and is
34% smaller.
Toward the achievement of carbon neutrality in 2050 andamid the global, rapid growth in the electrified vehicle market,
we will continue to support the more widespread use ofelectrified vehicles, such as HEVs, PHEVs, BEVs and FCEVs,
through the provision of car electronics products.
*14: A device that integrates the charging function and power distribution function of
BEVs

In fiscal 2022, Toyota Industries newly established the Battery
Division and commenced production and sales of bipolar
nickel-metal hydride batteries for TMC’s new Aqua. The
production is undertaken at our Kyowa Plant in Aichi Prefecture.
We successfully commercialized the battery by
establishing a proprietary development method by thoroughly
working to refine our technologies cultivated to date,including battery material synthesis technology, simulation
technology for examining materials and structures andanalysis technology.
In the newly developed battery, a cathode is applied to
one side of a metal component called a current collector andan anode to the other. Several of these modules, which are
known as “bipolar electrodes,” are stacked together to forma battery. The battery has been made smaller as they require
fewer parts. In addition, the wider electrical path and simple
structure reduce resistance within the battery, allowing large
currents to flow quickly. This means that they can produce
higher outputs compared to conventional nickel-metal hydride

batteries. In recognition of these excellent characteristics, thebattery won a Technological Development Award at the 73rd
Society of Automotive Engineers of Japan Award.
Following the Aqua, the bipolar nickel-metal hydride
battery, which achieves both superior driving andenvironmental performance, has been fitted in the Toyota
Crown and Lexus RX in fiscal 2023. Going ahead, we willcontinue to respond to future increases in demand.
As we proceed with various initiatives toward carbon
neutrality, we will contribute to the more widespread
popularity of TMC’selectrified vehicles withour bipolar nickel-metal
hydride batteries, which
can be fitted in a varietyof HEVs.
Bipolar nickel-metal
hydride battery

TMC’s dual boost hybrid system

Constructing the Ishihama Plant to Increase Production Capacity

Left: Newly developed unit integrating an on-board charger and DC-DC converter
Right: TMC’s bZ4X BEV

Left: Newly developed compact and high-current DC-DC converter for HEVs
Right: TMC’s new Prius

Feeding Power—A New Function and Value of Electrified Vehicles Realized
through AC Inverters
An AC inverter converts the DC voltage of on-board batteries
into AC voltage to feed power externally or to use electricalappliances within a vehicle. It can supply 1,500 W of30

Toyota Industries Report 2023

electricity, the same as household power outlets, to almost
any home electrical appliance and has been recognizedhighly by customers as a power source during a disaster or

We constructed the Ishihama Plant in Higashiura-cho in
Chita-gun, Aichi Prefecture, as a manufacturing plant for onboard batteries and commenced mass production of bipolar
nickel-metal hydride batteries for HEVs in October 2022. The
new plant operates at a production capacity of 20,000 units
per month, and, together with the Kyowa Plant that started
battery production in May 2021, we have boosted our total
capacity to 40,000 units per month.
The design of our bipolar nickel-metal hydride batteries
allows them to be adaptable to a wide range of vehicles,from compact to large ones, because their output can be
modified by just changing the number of modules to be

stacked depending on the vehicle.
To contribute to the expansion and spread of electrified
vehicles and work toward carbon neutrality, Toyota Industries
will work to ensurestable supply as well as
to enhance its lineup ofbatteries so that they
can be used in a rangeof electrified vehicles.

Ishihama Plant

31

Business Activities
Link toproduct
details

Textile Machinery

Carrying on the philosophy of founder Sakichi Toyoda, which reflects his strong commitment to manufacturing,
Toyota Industries responds to a broad range of needs with its extensive product lineup, from air-jet looms to ring
spinning frames, roving frames and quality measurement instruments for fiber, yarn and fabric.

Medium-Term Direction of BusinessWith growing environmental consciousness worldwide, needs are expected to increase further for textile machinery offeringsuperior environmental performance. Toyota Industries’ products are highly acclaimed by customers for their excellent reliability
and productivity as well as energy-saving performance. We will continue to develop energy-saving and other innovativetechnologies and seek to achieve further growth and evolution as a leading manufacturer of textile machinery.

Business Characteristics

Net Sales

Operating Profit

FY2022

FY2022¥69.2 billion¥5.5 billion

FY2023

FY2023

Strengths• Broad product lineup both in the spinning and weaving machinery fields• Global, well-developed service network• Ability to develop products that excel in reliability, energy-saving
performance and versatility

Opportunities• A rise in textile demand in line with an increase in the world population• Further increasing applications in the industrial materials field• Increasing needs for high-quality and highly functional yarn and textile
products, following the economic growth of emerging countries

Risks• Changes in each government’s policies concerning promotion of
the country’s textile industry• Weaker sales due to intensifying competition• A decline in capital investment due to economic slowdown andraw cotton and/or yarn price fluctuations

84.3 billion

7.8 billion¥¥

Air-Jet Loom Sales(Thousand units)

10
8
6
4
2
0
(FY)

19

20

21

22

23

Business Overview in Fiscal 2023
The market was strong in Asia, including China, which is our primary market. Increases in sales of spinning machineryand quality measurement instruments for fiber, yarn and fabric pushed up net sales by ¥15.1 billion, or 22% year on
year, to ¥84.3 billion.

Commencing Production of the New JAT910 Air-Jet LoomIn March 2023, we commenced production of the JAT910, a
new air-jet loom developed for the first time in nine years.
Air-jet looms weave textiles by inserting yarn using
compressed air and are used by customers worldwide,
including China, India, Europe and Japan. The new JAT910
has inherited and upgraded the high-speed and low-vibration
technologies and superior weaving technology, which are
the JAT series’ “genes” that have been passed on frommodel to model. It is geared to respond to labor shortages
in the manufacturing industry, growing environmental
consciousness and surging energy prices around the world.
With the upgraded technologies, the product has achieved
even higher environmental
performance and is contributing
to improving operational
efficiency at customers’ plants.

JAT910 air-jet loom

Participating in India ITME 2022
In December 2022, Toyota Industries participated in India
International Textile Machinery Exhibition (India ITME)
2022 jointly with Kirloskar Toyota Textile Machinery Pvt.
Ltd. (KTTM), a consolidated subsidiary producing textile
machinery in India.
We exhibited our new JAT910 air-jet loom for the firsttime to the public as well as the RX300 ring spinning frame

32

Toyota Industries Report 2023

manufactured by KTTM. They were received favorably
by many customers as we appealed to them the basic
functionality and high reliability of our products. Goingforward, we will continue to demonstrate our technologicalcapabilities that satisfy customer needs through participationin textile machinery trade shows and work to reinforce ourbrand strength to gain even greater trust from customers.