Sustained Innovation and Creativity - Toyota Industries Corporation

Operating Income andOperating Income RatioNet Sales ofAutomobile SegmentOperating Income ofAutomobile Segment(¥ Billion)(%)(¥ Billion)(¥ Billion)701480040601250106003040308640020204200101020FY02030405 0600FY02030405060FY02030405 06Operating income (left)Operating income ratio (right)billion, an increase of ¥9.7 billion (13.7%) over fi scal 2005.Despite the effects of a steep rise in crude oil and steelprices, as well as increases in depreciation and personnelexpenses, this increase was achieved due largely to anexpansion in global sales and Group-wide cost-reductionefforts. Net income amounted to ¥47.1 billion, an increaseof ¥3.7 billion (8.6%) over fi scal 2005.Cost of Sales and Selling,General and Administrative ExpensesCost of sales for fi scal 2006 increased ¥234.7 billion (22.5%)over fi scal 2005 to ¥1,276.5 billion. This increase refl ectedincreases in depreciation expenses, raw materials pricesand personnel expenses in addition to an increase in netsales.Selling, general and administrative expenses increased¥18.8 billion (12.8%) to ¥165.4 billion, due primarily toincreases in personnel, sales promotion and depreciationexpenses.Operating IncomeOperating income for fi scal 2006 increased ¥10.9 billion(20.6%) over fi scal 2005 to ¥64.0 billion, attributable mainlyto an increase in sales in Japan and overseas as well asGroup-wide cost-reduction activities.Operating Performance Highlightsby Business SegmentBelow are the operating results by business segment.Net sales for each segment do not include intersegmenttransactions.Automobile SegmentIn the automobile industry as a whole, sales in Japan werealmost the same as in fi scal 2005. Overseas sales rose overthe same period as a result of increases in the Asian andLatin American markets.Net sales of the Automobile Segment of ToyotaIndustries totaled ¥746.8 billion, an increase of ¥130.6billion (21.2%) over fi scal 2005.Within this segment, net sales of the Vehicle Businesstotaled ¥372.1 billion, an increase of ¥93.3 billion (33.4%)over fi scal 2005. Both the Vitz (Yaris outside Japan) and theRAV4, which underwent a full model change, recordedrobust sales.Net sales of the Engine Business totaled ¥132.4 billion,an increase of ¥19.1 billion (16.8%) over fi scal 2005. Weproactively augmented our engine production capacityto accommodate an increase in global production ofCar Air-ConditioningCompressor Unit Sales(Million Units)20151050FY020304JapanNorth AmericaEuropeAsia and Oceania0506Toyota Industries Corporation Annual Report 200665