Sustained Innovation and Creativity - Toyota Industries Corporation

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Focus onBusiness3Vehicle/EnginePre-Production Process InnovationTraditionalpre-productionprocessPre-productionprocess for RAV4ConstructiondrawingVehicle reviewVehicle reviewDrawing phase Drawing completed Actual production phaseSE drawing Final drawingTrial production Line-offMassproductionEquipment reviewProcess configurationMoved upEquipment reviewConsideration of items forProcess configuration improvement ofproduction lineCreation of class standardsRedoCreation of classstandardsConfirmation stepRedoTrial productioncompletedImprovement ofproduction lineMoved upThe pre-production process forthe new RAV4 began in parallelwith that for the Vitz (Yaris outsideJapan). To prepare for theproduction launch of the twomodels in a short period of time,Toyota Industries conducteda sweeping review of itspre-production process in order toreduce the burden of the actualpre-production process as well asto equalize peak burdens.Engine BusinessOur Strengths in Development and ProductionToyota Industries’ Engine Business manufactures diesel andgasoline engines ranging in capacity from 1500 cc to 5200cc. Manufactured under consignment from TMC, all ourautomobile engines are installed on designated TOYOTA cars.Our diesel engines developed in collaboration with TMC, inparticular, offer high power and lighter weight in additionto lower noise and vibration. Moreover, Toyota Industriescommands the world’s largest market share of high-output,environmentally friendly industrial engines for lift trucks andother materials handling equipment in addition to enginessuch as gas engine-driven heat pumps. Other activities of theEngine Business include the manufacture of an assortment offoundry parts integrating sophisticated technologies.Utilizing an automatic guided vehicle system, our EngineBusiness operates a fl exible structure that responds quickly toproduction fl uctuations and achieves operational excellence,which includes superior capabilities in making quickproduction launches.The Engine Business is also at the forefront of developingnew technologies that reduce environmental load. Anoteworthy trend in recent years has been an increase inthe proportion of diesel engine vehicles, especially in Europe,spurred by the realization that diesel engines are moreeffective in enhancing fuel effi ciency and lowering CO2emissions. At the same time, TMC aims to raise its presencein the European market and thus plans to increase salesby bolstering its diesel vehicle lineup. In response, ToyotaIndustries aims to contribute to their European strategythrough joint development of diesel engines with TMC andproduction of high-quality diesel engines.Establishment of Global Production StructureIn March 2005, we started production of 2.2-literdirect-injection AD diesel engines at the Hekinan Plant inJapan and at Toyota Motor Industries Poland Sp.zo.o.* (TMIP),a joint venture in Europe with TMC. This engine is also fi tted inthe RAV4 and Lexus IS in addition to the Avensis and CorollaVerso that TMC assembles in the United Kingdom and Turkey,respectively.The Hekinan Plant, together with the Kyowa andHigashichita plants, function as mother plants for overseasbases that manufacture engines and foundry parts. Incarrying out this crucial role, these mother plants takethe lead in adopting the latest production technologiesdeveloped in Japan and work to refi ne the productionprocess and technologies before transferring the mostadvanced production know-how and expertise to overseasbases.* Toyota Industries’ stake is 40%. Toyota Industries is chiefl y responsible forproduction operations at TMIP.Contributing to TMC’s IMV ProjectIn June 2005, the Higashichita Plant commenced productionof the 2.5-liter and 3.0-liter direct-injection KD diesel enginesfor TMC’s Innovative International Multi-Purpose Vehicle (IMV)32 Toyota Industries Corporation Annual Report 2006
Project. This project involves the establishment of a globallyoptimal production and supply structure to develop newpickup trucks and multi-purpose vehicles to be marketed inmore than 140 countries around the world. Utilizing ToyotaIndustries’ strengths in production operations, we launchedthe production line for manufacturing and processingaluminum die cast components and assembly of engineswithin a short pre-production period.Toyota Industries will continue contributing to theestablishment of TMC’s IMV supply structure that will mutuallylink numerous production bases on a global scale. As a primeexample, in May 2004, Kirloskar Toyoda Textile MachineryPrivate Limited (KTTM), one of Toyota Industries’ subsidiaries inIndia that manufactures and sells textile machinery, initiatedproduction of aluminum die cast components for manualtransmissions. KTTM supplies these components to ToyotaKirloskar Auto Parts Private Ltd. (TKAP, a joint venture in Indiawith TMC and the Kirloskar Group, in which Toyota Industrieshas a 26% stake), which in turn supplies manual transmissionsystems to the IMV Project.Toyota Industry (Kunshan) Co., Ltd. (TIK), our subsidiary inChina, is manufacturing foundry parts mainly for automobileengines. Addressing a shortage in production capacityresulting from increased demand, we established oursecond manufacturing base in the country, Toyota IndustryAutomotive Parts (Kunshan) Co., Ltd. (TIAP), a joint venture inwhich Toyota Industries has a 60% stake, in cooperation withTaiwan-based Lioho Machine Works, Ltd. and Toyota TsushoCorporation. TIAP commenced production in April 2005.Worldwide Manufacturing Bases of Engine BusinessPolandIndiaChinaJapanTMIPManufacture of diesel engines forTMC’s plants in the U.K. and TurkeyTKAPManufacture of transmissions forthe IMV ProjectKTTMManufacture of transmission partsfor TKAPTIKManufacture of foundry parts forJapan and manufacturing basesin Poland and IndiaTIAPManufacture of foundry parts forenginesHekinan PlantManufacture of diesel andgasoline enginesHigashichita PlantManufacture of foundry partsManufacture and supply ofdiesel engines for IMV ProjectKyowa PlantManufacture of enginepartsEngines2AD diesel engine(Displacement: 2.2 liters,used in the Avensis, RAV4,Corolla Verso and Lexus IS)2KD diesel engine(Displacement: 2.5 liters,used in the Hilux Vigo)1HD-FTE diesel engine(Displacement: 4.2 liters,used in the Land Cruiser)2AZ-FE gasoline engine(Displacement: 2.4 liters, usedin the Estima)1FZ-FE gasoline engine(Displacement: 4.5 liters,used in the Land Cruiser)Toyota Industries Corporation Annual Report 200633
Page 1 and 2: ANNUAL REPORTYear ended March 31, 2
Page 3 and 4: Contents24614Consolidated Financial
Page 5 and 6: Net SalesOperating IncomeNet Income
Page 7 and 8: Tadashi IshikawaChairmanTetsuro Toy
Page 9 and 10: Record-Breaking Results for Fiscal
Page 11 and 12: Further Deploying Our Engine Busine
Page 13 and 14: examples, each division undertakes
Page 15 and 16: progress in globalizing its busines
Page 17 and 18: Logistics SegmentTextile Ma chin er
Page 19 and 20: Toyota Material Handling Group—Ma
Page 21 and 22: Business Activities in Fiscal 2006J
Page 23 and 24: Looking AheadJapanese MarketThe yea
Page 25 and 26: Products for the Japanese MarketPro
Page 27 and 28: Products for the European MarketPle
Page 29 and 30: Breakthrough Innovations and Cuttin
Page 31 and 32: variable-displacementcompressors, w
Page 33: Vehicle BusinessAdvantages as a Com
Page 37 and 38: Car ElectronicsToyota Industries’
Page 39 and 40: Semiconductor Package SubstratesToy
Page 41 and 42: Creating Logistics Solutions by Ado
Page 43 and 44: Focus onBusiness6Textile Ma chin er
Page 45 and 46: ExploringToyota IndustriesToyota In
Page 47 and 48: of the Toyota Material Handling Gro
Page 49 and 50: New Products Developed and Launched
Page 51 and 52: Corporate Governance Structure of T
Page 53 and 54: Environmental and Social Contributi
Page 55 and 56: Social Contribution ActivitiesToyot
Page 57 and 58: 1990s - 2000s -1990Sprinter Carib (
Page 59 and 60: Directors, Corporate Auditors and M
Page 61 and 62: Company NameLocationCapital(thousan
Page 63 and 64: Fi nan cial Sec tion626474767778799
Page 65 and 66: Millions of yen2002 2001 2000 1999
Page 67 and 68: Operating Income andOperating Incom
Page 69 and 70: Net Sales ofTextile MachinerySegmen
Page 71 and 72: Cash Flows(¥ Billion)150100500(50)
Page 73 and 74: Toyota Industries intends to use re
Page 75 and 76: Signifi cant Accounting Policies an
Page 77 and 78: LIABILITIES, MINORITY INTERESTS AND
Page 79 and 80: Consolidated Statements of Sharehol
Page 81 and 82: Notes to Consolidated Financial Sta
Page 83 and 84: (15) Hedge accounting(a) Method of
Page 85 and 86:
(2) As of and for the year ended Ma
Page 87 and 88:
7. Assets pledged as collateral(1)
Page 89 and 90:
13. Derivative instruments(1) Quali
Page 91 and 92:
15. Income taxes(1) The signifi can
Page 93 and 94:
(2) Operating leases (as a lessee)P
Page 95 and 96:
2006 2005 20042006Assets:Automobile
Page 97 and 98:
2006 2005 20042006Assets:Japan ¥ 8
Page 99 and 100:
20. Net income per share (EPS)Basis
Page 101 and 102:
Toyota Industriesin NumbersToyota I
Page 103 and 104:
(Years ended March 31)Net Sales and
Page 105 and 106:
(Years ended March 31)Cash Dividend
Page 107 and 108:
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