Toyoda Gosei Co., Ltd. Business Report FY2008
Business Highlights
Financial Overview | (in millions of JPY) |
FY2008 | FY2007 | Rate of Change (%) |
Factors | |
Overall | ||||
Sales | 546,380 | 662,497 | (17.5) | -The Company worked actively on developing new products; and on expanding its sales volume. But the sharp decline in auto production volume at home and abroad significantly impacted the Company's automotive parts business, its major area of business. |
Operating income |
15,833 | 52,125 | (69.6) | -The Company launched sales in what is a new sector for the company, optoelectronics, an area in which it increased volume. However, the results of this new business endeavor weren't sufficient enough to offset the heavy cutbacks to its major business area, automotive components, due to the drop in overall automotive production volume. |
Ordinary income |
12,155 | 50,541 | (75.9) | |
Net income |
3,951 | 30,802 | (87.2) | |
Automotive component business | ||||
Sales | 518,048 | 631,384 | (18.0) | -Sales decreased due to lower demand in the global automotive market. |
Operating income |
14,757 | 51,285 | (71.2) | -Income decreased, as the Company could not offset either the decline in sales or the change to its product prices and product mix. |
Two New Subsidiaries Established
-The Company established Toyoda Gosei India Pvt. Ltd. in India and started production of safety system products in April 2008.
-The Company established Toyoda Gosei Automotive Sealing Mexico S.A. DE C.V. in Mexico and started production in November 2008.
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Performance forecasts by segment (automotive business) | ( in millions of JPY ) |
Segment | FY2009 (Forecast) |
FY2008 (Actual) |
Rate of Change (%) |
Interior & Exterior Parts |
126,500 | 158,300 | (20.1) |
Body Sealing Products | 62,500 | 88,600 | (29.5) |
Function Parts | 70,500 | 104,300 | (32.4) |
Safety Systems | 126,500 | 166,500 | (24.0) |
Total | 386,000 | 517,900 | (25.5) |
Performance forecasts by region (company total) | ( in millions of JPY ) |
Area | FY2009 (Forecast) |
FY2008 (Actual) |
Rate of Change (%) |
Japan | 280,000 | 344,600 | (18.8) |
North America | 87,000 | 102,500 | (15.1) |
Australasia (Note) | 71,000 | 115,000 | (38.3) |
Other | 14,000 | 28,100 | (50.2) |
Capital and R&D expenditure plan (company total) | ( in millions of JPY ) |
FY2009 (Forecast) |
FY2008 (Actual) |
Rate of Change (%) |
||
Capital Expenditure | Total | 71,000 | 99,400 | (28.6) |
- 1st half | 30,000 | 58,200 | (48.5) | |
- 2nd half | 41,000 | 41,200 | (0.5) | |
R&D Expenditure | 22,000 | 24,800 | (11.3) |
R&D
R&D Expenditure | (in millions of JPY) |
FY2008 | FY2007 | FY2006 | |
Automotive Parts Business | 21,300 | 22,300 | 20,100 |
Non-Automotive Parts Business | 3,400 | 3,600 | 4,100 |
Total | 24,700 | 25,900 | 24,200 |
R&D Structure
-R&D activities are conducted globally through cooperation among several organizations within the Company: the R&D Center; Production Technology Development Center; Development, Engineering and Production Engineering Departments at each business segment; Technology Management Department; Material Engineering Department, and its subsidiaries outside Japan, namely Toyota Gosei North America Corporation and Toyota Gosei Europe.
-In March 2009, the Company established its second technical development facility in Japan, the Miwa Technical Center.
R&D Activities
-The Company developed and launched mass production of new products, including rear-end impact airbags, LED-based large-sized backlights for full-size liquid-crystal meters, three-dimensional illuminant scuff plates, hidden TPV glass runs which reduce noise, and reflection-free ducts which reduce pressure loss.
-The Company developed materials, products, and production technology which comply with environmental regulations.
-The Company developed all-composite, high-pressure hydrogen tanks for fuel cell vehicles.
-The Company announced that it has developed a 360-degree full-coverage airbag designed for small cars to improve protection for all occupants against collisions from any direction and installed it on Toyota's new "iQ." The new compact model carries nine airbags, including the world's first airbag against rear-end collisions and seat cushion airbags to hold the front passenger's lumber part from moving forward. (From an article in the Nikkan Jidosha Shimbun on Nov. 26, 2008)
-The Company plans to reduce by 40 percent the weight of its automotive interior plastic components such as instrument panels by 2010. The Company intends to do so by cutting down the thickness of polypropylene-based materials, without compromising on intensity levels. In order to cope with tighter regulations on CO2 emissions and fuel efficiency in Japan, the U.S. and Europe, the automotive industry is faced with the challenge of developing and manufacturing lighter vehicles. The Company's initiatives to develop lightweight plastic parts will slash the volume of materials it uses, leading to savings in materials costs as well. (From an article in the Nikkan Jidosha Shimbun on Dec. 9, 2008)
-The Company will accelerate its development and production activities to replace glass runs made of synthetic rubber with those made of plastic. Plastic glass runs made by the Company are already used in compact vehicles, but the Company has begun mass-producing plastic glass runs also for higher grade vehicles. Some of the key advantages of using plastic are improved recycling efficiency and weight-reduction features it provides. The car body sealing business, which includes glass runs, is one of the Company's major domains, generating approximately 17 percent of the annual sales. The Company intends to carry out weight saving initiatives also for interior and exterior parts, which make up nearly 30 percent of its overall revenue. (From an article in the Nikkan Jidosha Shimbun on Dec. 16, 2008)
Technological Alliance
-The Company announced that it has entered into an agreement with Cree, Inc. , a major U.S. Light-emitting diode manufacturer, providing the firms with access to each other's patented LED chip and packaged LED technology, including white LED technology. Both companies hold a wide-range of optoelectronic patents. The agreement, which alleviates the intellectual property concerns, will make it easier for both companies to concentrate on their effort to develop and manufacture LED products in the future, resulting in further enhancement of LED technology. (From a press release on May 28, 2008)
-The Company and Showa Denko K.K. announced that they have entered into an agreement, which provides mutual access to each other's patented LED chip technology using nitrogen compound. Both The Company and Showa Denko hold broad and substantial optoelectronic patent portfolios. (From an article in the Nikkan Jidosha Shimbun on Feb. 19, 2009)
Patent License Contracts for Innovations in Technology (As of Mar. 31, 2009)
Company | Country | Contract | Period |
Eaton Corporation | USA | A patent license agreement for fuel valves. | Feb. 10, 1999 - Feb. 18, 2013 |
Autoliv Development AB | Sweden | A patent license agreement for curtain airbags. | Feb. 5, 2001 - Feb. 20, 2016 |
Stant Manufacturing, Inc. | USA | A patent license agreement for quick turn fuel caps. | Apr. 2, 2001 - Oct. 18, 2014 |
Visteon Global Technologies, Inc. | USA | A patent license agreement for fuel valves. | Nov. 20, 2001 - Aug. 24, 2010 |
Intier Automotive Interiors of America | USA | A patent and expertise license agreement for urethane spray surfaces | Nov. 18, 2002 - May 10, 2014 |
Technical Assistance Contracts (As of Mar, 31, 2009)
Company | Country | Contract | Period |
Stant Manufacturing, Inc. | USA | An expertise license agreement for conductive fuel caps | Nov. 17, 1998 - Dec. 21, 2018 |
TI Automotive Ltd. | UK | A patent license agreement for fuel cutoff valves | Sep. 12, 2002 - Oct. 16, 2009 |
Magna Aster Fuel Systems | Germany | A patent license agreement for conductive fuel caps. | Feb. 26, 2004 - Dec. 21, 2018 |
Orbitronics Co., Ltd. | Pakistan | An expertise license agreement for steering wheels | Dec. 29, 2006 - Dec. 28, 2014 |
Pong Codan Rubber (M) Co., Ltd. | Malaysia | A technological licensing agreement on weather-strips | Jul. 16, 2007 - Jul. 15, 2012 |
Investment Activities
Capital Expenditure | (in millions of JPY) |
FY2008 | FY2007 | FY2006 | |
Automotive Parts Business | 54,400 | 49,300 | 52,000 |
Non-Automotive Parts Business | 3,700 | 3,800 | 2,900 |
Group | 58,200 | 53,100 | 54,900 |
Investments outside Japan
<Mexico>
-The Company announced the establishment of a new body sealing manufacturing company "Toyoda Gosei Automotive Sealing Mexico S.A. DE C.V." in the city of San Luis Potosi, San Luis Potosi state. In October 2008, the new company will begin producing opening trims and weather strips for Toyota Motor Corporation's US assembly plant in Texas. For the supplier, which has been supplying its products from its plant in Kentucky to the Toyota Texas Plant, improving efficiency in terms of delivery was an important issue. By shifting some of the parts production operation to Mexico, which is closer to the area in the southern U.S., the Company can reduce the delivery costs. The new company is expected to generate sales of 30 million US dollars, or approximately 3.1 billion yen, with a workforce of 500 in 2010. This is teh Company's second production base in Mexico, next to the one in Monterey for producing steering wheels. (From an article in the Nikkan Jidosha Shimbun on May 15, 2008)
<India>
-The Company announced establishment of a new safety systems manufacturing subsidiary in Rajasthan, northern India, Toyoda Gosei India Pvt. Ltd. The Company's third production operation in India is scheduled to start production in April 2009 in an aim to achieve sales of 750 million yen in 2010. It will supply handles, driver-seat airbags and front-passenger-seat airbags to Japanese automakers' plants in northern India, starting with Suzuki Motor Corp. The Company invested 95% and Toyota Tsusho Corp. invested 5% of its capital amount of 450 million rupees (approx. 1.1 billion yen). (From an article in the Nikkan Jidosha Shimbun on May 26, 2008)
Capital Investment Plan (FY2009)
-The Company plans to invest 30,000 million yen to construct and expand facilities company-wide. The investment in the automotive part business is expected to be 28,000 million yen and this will be invested in production facilities and dies.