Tokai Rika Co., Ltd. Business Report FY ended Mar. 2013

Business Highlights

Financial Overview

(in millions of JPY)
  FY ended Mar. 31, 2013 FY ended Mar. 31, 2012 Rate of Change (%) Factors
Sales 371,932 319,577 16.4 -Even though vehicle sales were stagnant in Europe, they were strong in Japan, the U.S.A., and emerging countries.
Operating income 23,238 13,156 76.6 -
Ordinary profit 24,505 14,977 63.6 -
Current net income 5,187 8,123 (36.1) -The Company posted an extraordinary loss of 14,088 million yen to set up product-warranty reserves for a product recall.

-Operating revenue increased 14.7% year-on-year to 263,660 million yen because of increased vehicle production that was attributed to eco-car sales incentive programs.
-Operating profit increased 122.9% year-on-year to 16,632 million yen, thanks to greater operating revenue and effective rationalization initiatives.

<North America>
-Improved business results in the U.S.A. were supported by the strong economy that triggered new-car buying. Operating revenue increased 26.3% year-on-year to 67,482 million yen.
-Operating profit rose by 405.1% year-on-year to 1,368 million yen due to the higher operating revenue the Company recorded for the year.

-Operating revenue increased 24.3% year-on-year to 71,769 million yen due to higher vehicle production levels in China and India, and due to stronger sales in Thailand because of new-car sales incentives.
-Operating profit rose 10.1% year on year to 5,803 million yen.

-Operating revenue in other global regions, which included sales at its subsidiaries in Europe and South America, increased 2.5% year-on-year to 16,783 million yen.
-However, the other global regions as a whole suffered an operating loss of 42 million yen, after having achieved a profit of 52 million in the previous fiscal year.

Expanding Business Operations in Indonesia

- The Company announced that it will launch seatbelt production in Indonesia in April 2013. The seatbelts will be manufactured at a new joint venture, PT. Tokai Rika Safety Indonesia, to be established in December this year. A new production line will be set up at 1,500 square meters of space secured at the existing plant of PT. Indosafety Sentosa Industry, one of the joint venture partners. Forty people will be engaged in the production operations, and sales are expected to reach 1.1 billion yen in 2013. The joint-venture company will be capitalized at 9.3 billion rupiah (approximately 80 million yen), of which 51 percent will be provided by Tokai Rika, 25 percent by Wuxi Risho Technology Co., Ltd., 20 percent by Hsin Chong International Investment, and 4 percent by PT. Indosafety Sentosa Industry. The new operation will be Tokai Rika's second production base in Indonesia, following its facility in Bekasi that is producing switches and security products such as lever combination switches and keysets. Yet it will be Tokai Rika's first seatbelt plant in the country. The seatbelts will be supplied mainly to Toyota and Daihatsu. Tokai Rika will further step up local operations in the country by establishing its own plant as well in 2013. (From an article in the Nikkan Jidosha Shimbun on August 31, 2012)


- The Company is aiming to expand sales of its automotive interior components by leveraging its three-dimensional dry transfer printing technique, the Company's original, surface decorating technology for plastic parts. Using the 3D dry transfer printing method allows a high-accuracy positioning to apply designs on components exactly as intended. The Company had proposed the technology to Toyota Motor and has already won a program to supply 14 interior plastic parts for the new Crown, the world's first package application of 3D dry transfer printing technology to automotive interior panels. These components are being delivered from the Company's Otowa Plant (Toyokawa City, Aichi Prefecture), which has a dedicated production line capable of manufacturing most items in the interior product lineup. The Company will work on reducing production costs, expecting the Crown program to become a stepping-stone to winning more contracts. (From an article in the Nikkan Jidosha Shimbun on Mar. 19, 2013)

Outlook for FY ending Mar. 31, 2014

(in millions of JPY)
  FY ending Mar. 31, 2014
FY ended Mar. 31, 2013
Rate of change
Sales 419,000 371,932 12.7
Operating income 24,000 23,238 3.3
Ordinary income 25,500 24,505 4.1
Net income 15,000 5,187 189.1

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)


R&D expenses

(in millions of JPY)
  FY ended Mar. 31, 2013 FY ended Mar. 31, 2012 FY ended Mar. 31, 2011
Japan 17,379 17,075 -
North America 568 515 -
Overall 17,948 17,590 16,969

R&D Achievements

-R&D activities in Japan were focused on advanced development and elemental technology. R&D activities in North America, Europe, and China centered on first understanding the local market needs and the developing products and making product proposals to customers.

-Developed steering system switches that enable displays and related multi-functional operations to be possible, in addition to developing input systems incorporating improvements in terms of design and operability.
-Developed and commercialized an air-conditioner switch with an added touch input-function, which is a new type of input system that the Company is still in the process of improving.

Security Systems
-Developed and commercialized a new, low-cost, smart-key system designed for sales worldwide.
-Further enhanced and improved variations of shift-by-wire shifters, which are representative of the types used in HVs and EVs.

Safety Systems
-Developed and commercialized a seatbelt incorporating the next standard for retractors that are able to respond to the need for weight reduction.
-Developed low-cost door mirrors.
-Commercialized decorative panels offering a keen sense of design unity and continuity for various interior products, by applying its proprietary, high-precision decorating technology "3D Dry Transfer Technology."

Licensing of Technology from Other Companies

(As of Mar. 31, 2013)
Company Partner Country Outline of agreements Contract period
Tokai Rika Co., Ltd. Autoliv Development AB Sweden Licensing of patent on automotive seatbelts 2007.12.01 -
the patent expiry date
TRW Vehicle Safety Systems Inc. USA Licensing of patent on automotive seatbelts 2008.01.01-
the patent expiry date


Licensing of Technology to Other Companies

(As of Mar. 31, 2013)
Partner Country Outline of tie-ups Contract period
Ashimori Industry Co., Ltd. Japan Licensing use of patent on seat belts for automobiles 2007.02.02 -
the patent expiry date
Licensing use of international patent on seat belts for automobiles 2007.02.02 -
the patent expiry date

Investment Activities

Capital Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2013 FY ended Mar. 31, 2012 FY ended Mar. 31, 2011
Overall 13,764 16,406 11,707

-In addition to investing in equipment to respond to the production of new products, the Company also invested to build a new production plant and install facilities and equipment in Thailand to respond to the needs in developing countries.

-For the fiscal year ending March 2014, the Company plans to invest 27,500 million yen, mainly in its automotive parts business.

New Equipment Installations

(As of Mar. 31, 2013)
Plant  Location  Type of facility  Estimated amount of investment
(in million JPY) 
Project Period
From To
Headquarters/Headquarters Plant Aichi Pref.,
Facility to manufacture products compatible with in-vehicle electronics; parts for switches; and conduct assembly-inspections 5,288 Apr.
Toyota Plant Aichi Pref.,
Facility to manufacture seatbelts, decorative ornamentations; and conduct assembly inspections 1,086 Apr.
Otowa Plant/Hagi Plant Aichi Pref.,
Facility to manufacture parts for key-locks, steering wheels, etc.; and conduct assembly inspections 4,266 Apr.