Financial overview

In million JPY	FY2007	FY2006	Rate of change(%)	Factors
Overall
Sales	2,000,536	1,878,398	7
Ordinary profit	126,488	108,484	17	Despite the soaring prices of materials and purchased parts, and increases in depreciation and personnel costs, ordinary profit was up, thanks to increased sales, cost reduction initiatives implemented throughout the group, and a rise in non-operating revenue.
Net profit	80,460	59,468	35
Automotive Division
Sales	995,252	926,028	7	See 1) below
Operating profit	41,518	33,592	24

1) Automotive division performance by business 

Automobiles:  
・Sales stood at 500,100 million yen, up 6% or 29,900 million yen year-on-year, thanks to increased sales of the Vitz and greater volume due to the launch of the new Mark X Zio which the Company started to produce in September 2007. 

Engines
・Sales stood at 178,700 million yen, up 7% or 11,300 million yen year-on-year. 
While sales of AD diesel engines installed on the RAV4 (sold in the European market) and other models decreased, the volume of KD diesel engines for the IMV series and the volume of VD diesel engines for the Landcruiser for the overseas market enjoyed strong sales.


Automotive air-conditioning compressors
・Sales stood at 253,500 million yen, up 8% or 18,100 million yen year-on-year. Sales in Japan were slightly down, while those in overseas markets, mainly in Europe, increased.


Domestic Movement
Engine business structure enhancement

The Company plans to increase its development and production engineers/technicians in its automobile business to 2,000 by 2010, up 40 percent from the current level. To respond to Toyota Motor Corp.'s production increase and development area expansion, it will reinforce its development and production operations in the vehicle and engine divisions. In the vehicle division, it will strengthen development staff for diesel engines, whose growing demand is expected mainly in Europe, in an aim to further contribute to Toyota Motor Corp. especially in developing new products. Toyota Industries assembles the Vitz and the RAV4 for both export and domestic markets at its vehicle assembly plant in Aichi Prefecture. Its development work has mainly been on application of base engines developed by Toyota Motor Corp. By increasing staff in development, it plans to raise the ratio of new product development to approx. 90 percent, from approx. 60 percent at present. (From an article in the Nikkan Jidosha Shimbun on Aug. 2, 2007)


New wholly-owned subsidiaries

In Sept. 2007, the Company, Tokyu Co., Ltd., Tokaiseiki Co., Ltd., and Izumi Machine MFG. Co., Ltd. jointly announced that they have resolved at the Board of Directors meeting held respectively on September 26, 2007 that Tokyu, Tokaiseiki, and Izumi Machine MFG. would be merged with Toyota Industries and become wholly-owned subsidiaries of the Company, effective December 3, 2007, through a stock-for-stock deal. Tokyu, Tokaiseiki, and Izumi Machine MFG., all of whom are currently consolidated subsidiaries of Toyota Industries, are engaged primarily in the manufacture and sales of automotive components. (From a press release on Sep. 26, 2007)

R&D expenses

Unit: millions of yen	FY2007	FY2006	FY2005
Automobiles	17,370	16,275	16,578
Total	36,750	34,548	31,166

R&D Structure
The Company has an R&D Center in Obu City, Aichi Prefecture, where the Company conducts advanced research that may lead to the development of new products; the development of common, fundamental technology such as materials; and the  advanced development of elemental technology which is expected to become the core element in future products designed at each division. 

The Company will reinforce resources for automotive diesel engine development. Development staff at the engine division will be increased by 50% to about 600 by 2010. To cope with Toyota Motor's strategy on diesel engines, the company will expand the engine lineup of various displacements and strengthen development for cleaner emissions, in an effort to further contribute to TMC in the field of diesel engines.(From an article in the Nikkan Jidosha Shimbun on Feb. 20, 2008)

Main products and technological developments achieved during FY 2007, which ended on March 31, 2008
・Power supply equipment, including DC-DC converters for hybrid cars
・Plug-in devices for hybrid cars
・Variable displacement compressors that automatically control cooling according to the temperature and engine condition
・Fixed displacement compressors that are compact and light
・New clean-diesel engines

Capital Expenditure

Unit: millions of yen	FY2007	FY2006	FY2005
Automobiles	43,541	57,179	90,488
Total	130,776	158,632	151,794

Breakdown in capital expenditures by major automotive division：

Unit: millions of yen	FY2007
The Company	24,166
Tokaiseiki Co., Ltd.	4,679
TD Deutsche Klimakompressor GmbH	2,732
TD Automotive Compressor Georgia, LLC	2,527
Tokyu Co., Ltd.	2,230
Iwama Loom Works, Ltd.	2,135
Michigan Automotive Compressor, Inc.	1,493
Toyota Industry Automotive Parts (Kunshan) Co., Ltd.	1,212

New equipment installment (Automotive Business)

Company/ Plant (Location)	Equipment to be installed	Expected Investment (Millions of yen)	Started	Expected Completion
Companies included in consolidated financial statement
Hekinan Plant (Aichi Pref., Japan)	Manufacturing facilities for gasoline and diesel engines	23,758	Oct. 007	Mar. 2009
Kariya Plant (Aichi Pref., Japan)	Manufacturing facilities for textile machinery; Manufacturing facilities for automobile air-conditioner compressors	5,024	Apr. 2008	Mar. 2009
Nagakusa Plant (Aichi Pref., Japan)	Manufacturing facilities for compact cars	4,000	Apr. 2008	Mar. 2009
Anjo Plant (Aichi Pref., Japan)	Manufacturing facilities for in-vehicle electronic devices	3,376	Apr. 2008	Mar. 2009
Obu Plant (Aichi Pref., Japan)	Manufacturing facilities for compressor  components for automobile air-conditioners	3,356	Apr. 2008	Mar. 2009
Higashichita Plant (Aichi Pref., Japan)	Manufacturing facilities for casting products used in engines; Manufacturing facilities for diesel engines	3,000	Apr. 2008	Mar. 2009
Higashiura Plant (Aichi Pref., Japan)	Manufacturing facilities for compressor  components used in automobile air-conditioners	1,118	Apr. 2008	Mar. 2009
Domestic subsidiaries
Tokaiseiki Co., Ltd. (Aichi Pref., Japan)	Manufacturing facilities for automotive components	3,306	Apr. 2008	Mar. 2009
Tokyu Co., Ltd. (Aichi Pref., Japan)	Manufacturing facilities for automotive components; casting machinery	3,000	Apr. 2008	Mar. 2009
Iwama Loom Works, Ltd. (Aichi Pref., Japan)	Manufacturing facilities for compressor components used in automobile air-conditioners	1,395	Apr. 2008	Mar. 2009