TOYOTA BOSHOKU CORPORATION Business Report FY2006
|(in millions of JPY)||Mar. 2007||Mar. 2006||
|Sales||1,082,755||877,596||23.4%||Sales improved year-on-year, thanks to increased production of seats and door trims.|
|Operating income||52,143||37,838||37.8%||Despite fluctuating product prices and higher labor costs, both ordinary income and net income rose from what it was last year, as a result of increased production volume and sales. The Company's group-wide efforts to streamline operations also contributed to the rise.|
|Current net income||30,105||21,187||42.1%||-|
|Automotive component business|
|Sales||1,078,714||873,954||23.4%||Sales at the automotive business rose from what they'd been the previous year as the Company increased production of interior parts (seats and trims) and air filters.|
Business Performance by Geographic
- Domestic sales were 655,486, million yen. The figure was 20.6 percent (or 111,952 million yen greater) than that of the previous year, thanks to new models launches such as the Lexus and Corolla by Toyota.
North, Central, and South America
- Sales in the region climbed slightly by 2.2 percent or 5,051 million yen year-on-year, to 230,248 million yen. The launch of full commercial business activities to support GM in Mexico contributed to the rise.
- Sales in Asia totaled 145,994 million yen, a rise of 89.0 percent or 68,731 million yen compared to what it was last year. Some of the major factors to the increase were favorable sales of the Toyota Crown and Mark X released in Tianjin, China, as well as increased production volume of the IMV series in ASEAN countries.
- Total sales in other regions were 51,026 million yen, up 61.5 percent or 19,423 million yuan year-on-year, supported by sales of the Toyota Camry that was newly released in Australia.
- The Company won new contracts to supply rear seat relaxation systems to the LS series of Corolla and Lexus models, Toyota's flagship models to be marketed globally. The ergonomic rear seat system provides a higher level of seating comfort in the LS models, the production of which started recently.
New Business Structure
The Company has implemented the following two systems to enhance its management structure:
- The Headquarters System: the Company introduced this new management system to clarify business objectives and strategies and integrate operations of each business sector.
- Global Management System: the Company will control its four-region organizational structure in a cross sectional manner according to function.
- In June 2006, the Company announced that it would undertake an organizational reform including introduction of "the headquarters system," effective immediately. The company will also implement a system to manage its corporate operations including those at overseas production sites on a cross-sectional regional basis. The purposes of introduction of the head office system are to clarify responsibilities and authorities of each function, and also to consolidate operations of interior systems, filters, powertrains and exterior fabrics. Newly established headquarters include "Promotion of organizational competence," "Profitability improvement," "Overseas operations," "Quality improvement," and "Technology development" to engage in development and designing of the entire cabin. Under the new headquarters of "Production and production engineering," three centers of "Production engineering," "Production management," and "Manufacturing" are established to take responsibility for all operations regarding production for all product lines. (From an article in the Nikkan Jidosha Shimbun on Jun. 23, 2006)
Integration of overseas subsidiaries
- In June 2006, the Company announced its plan to integrate its subsidiaries in North America and Thailand. It will integrate three of its North American units--"Araco America" (ARA), responsible for research and development of interior components, "Takanichi-USA," in charge of development and research of interior components and marketing of door rims, and "Toyodabo America," which markets automotive components--into "Toyota Boshoku America" (TBA) on July 1 with ARA as a surviving company, with an aim at producing approximately 5.9 billion yen in sales for fiscal 2005 with a workforce of 63. As for its Thai subsidiaries, Toyota Boshoku will put together "Toyodabo Asia" (TBAS)--in chare of marketing of filters as well as development of interior systems--and "TNAT (Thailand)"--a system supplier of seats and other interior components--as "Toyota Boshoku Asia" on July 1 with TBAS as a surviving company, and intends to earn around 7.8 billion baht in fiscal 2005 with 57 personnel (as of the end of fiscal 2005).(From an article in the Nikkan Jidosha Shimbun on Jun. 28, 2006)
Improving Production and Supply Structure
- Toyota Boshoku Kyushu Corporation will expand its Miyata plant to enhance production capacity for door trims and air cleaners for automobiles. This expansion is intended to support increased production volume at Toyota Motor Kyushu.
- In September 2006, the Company announced it will establish a new automotive parts manufacturing company in Koka city, Shiga prefecture, to supply exclusively to Daihatsu Motor Co., Ltd. It will start producing automotive filter and powertrain components, interior components and exterior components in August 2007.
>>See Investment for more details
- By fiscal 2010, the Company aims to increase sales in China to 150 billion yen, which is 150 percent greater than estimated sales for 2007.
- In July 2007, the Company and Denso Corporation jointly established Toyota Boshoku Foshan Co., Ltd. (TBFC) to manufacture oil filters for China and other Asian markets. TBFC expects to generate sales of about 100 million yuan (approxiately 1.5 billion yen) in 2007 based on its plan to start manufacturing products also for the European market in 2007.
- Boshoku France S.A.S. (TBF) became operational in Onnaing, France in May 2006. The new facility will initially focus on producing replacement bumpers for the Corolla, Yaris, and Avensis assembled in Europe.
- Toyota Boshoku South Africa (Pty) Ltd. (TBSA) started production in April 2006; it targets sales of 10.4 billion yen in fiscal 2007.
- In July 2006, the Company announced that it will establish a subsidiary to manufacture car interior parts in Canada. The Group's first wholly owned seat producing company in North America will start operations in 2008 to supply seats and trims for automakers mainly in North America.
- In April 2006, the Company and Toyota Tsusho Corporation announced that they will establish a joint venture company to produce seats in Russia. This is the first project in Russia undertaken by auto parts suppliers in the Toyota Group. The new company, Toyota Boshoku (Russia), will be established on the site of Toyota Motor Manufacturing Russia (TMMR) located in St.Petersburg.
>>See Capital Investment for more details
Challenges for the future
(1) To create more spacious cabin interiors:
(2) To manufacture and supply the world's best automotive filters:
The Company will strengthen its oil filter business by increasing the production volume of filters by 70% to more than 100 million filters a year worldwide by 2010. It will achieve this by expanding its current plants and building new ones in China, Thailand and other Asian countries. At the same time, Toyota Boshoku will accelerate its R&D activities on oil filters for both OEM use and the aftermarket, making filters which better meet the requirements of the two different usages, i.e., OEM and aftermarket, through creating filters that offer greater efficiency and other new features. These initiatives are expected to help the Company increase sales to gain a 10% share of the global market. (From an article in the Nikkan Jidosha Shimbun on Apr. 14, 2005)
(3) To establish a global supply network
R&D costs totaled 26,404 million yen, all of which were for automotive business.
- The Company will strengthen the R&D organization of advanced technologies. In place of current system staffing more employees for product development, the company will shift the staff for advanced technologies. In consideration of increasing needs for sophisticated features regarding health or comfort for the car interior, the company will concentrate on R&D of advanced technology aiming to enhance its competitiveness. Currently 85% of development staff are put into product development, with the remaining 15% are in advanced development. When adding development staff, the company will make the number equal for product development and advanced development to focus on the latter. (From a story in the Nikkan Jidosha Shimbun on Jul. 3, 2006)
<Interior system supplier business>
In response to Toyota's model changeovers, the Company launched production of components for the new Lexus LS, the main Lexus model
being sold in Japan. It also started manufacturing components for
the Camry marketed globally and the IMV series sold in Africa.
For the Lexus LS, the Company developed and supplies rear seats with relaxation systems; and electric sunshades for rear side windows. It also provides its new electronics technology, supplying large LED blade illumination systems.
- The Company is developing door trims by use of plant-based bioplastic materials. The Company has already finished production of a prototype on the basis of "Kenaf Polylactides, "which are materials combining annual kenaf grasses with lactic acid plastic produced by Toyota. The Kenaf Polylactides were developed jointly by Toyota and Toray. Although they are more costly than oil based plastics, they are lighter by almost one-third. (From an article in the Nikkan Jidosha Shimbun on Jun. 24, 2006)
<Filtration & Powertrain Components>
- In addition to working on enhancing product performances and reducing costs, the Company focuses its development activities on making modular and system products, enhancing environmental sustainability, and improving riding comfort.
- The Company developed and supplies compact and high performance air cleaning filters that incorporate valve and chemical fiber technologies for the Lexus LS. The new filter with lower air-flow resistance and improved dust filtering technology contributes to achieving high engine power and reliability.
- The Company developed low cost and light-weight oil filters by using plastic caps instead of aluminum caps. The new filters achieves the same level of filtering technology as existing products, while providing oil leak prevention function with a safety structure. The oil filter is used in the Lexus LS.
In 2006, the Company invested 47,550 million yen in total for the construction of plants, expansion of manufacturing facilities, as well as development of new products.
- Total investments in the interior component division amounted to 36,840 million yen. This included spending to prepare production lines to manufacture new seats and door trims, and to increase production in China; and North, Central and South America.
- Investment in the Filter and Powertrain product division reached 6,068 million yen. Investments were focused on preparing production lines to manufacture new air filters and oil filters.
- In September 2006, the Company announced that it will expand Miyata plant of its subsidiary Toyota Boshoku Kyushu Corporation to enhance production capacity for door trims and air cleaners for automobiles with an investment of about 1.35 billion yen. Toyota Boshoku Kyushu is a manufacturer and supplier of seats and door trims of the Harrier, Kluger and Lexus IS for Toyota Motor Kyushu, Inc. This expansion is to cope with the stepped-up production of Toyota Motor Kyushu. The construction will complete in March 2007 to produce door trims, deck side trims and air cleaners. (From an article in the Nikkan Jidosha Shimbun on Sep.27, 2006)
- In September 2006, the Company announced the establishment of a new automotive parts manufacturing company in Koka city, Shiga prefecture, to supply only to Daihatsu Motor Co., Ltd. It will start producing automotive filter and powertrain components, interior components and exterior components in August 2007 to deliver to Shiga Plant, Kyoto Plant, Ikeda Plant and Nishinomiya Parts Center of Daihatsu. The new company, Toyota Boshoku Shiga Corp., will be capitalized at 240 million yen, fully invested by Toyota Boshoku Corp. as its first "Daihatsu" exclusive plant. Etsuro Hori, General Manager of Toyota Boshoku, will be the president. 200 employees are expected to be hired to manufacture mainly plastic molding products such as plastic intake manifolds, air cleaners, floor carpets, door trims and replacement bumpers.(From an article in the Nikkan Jidosha Shimbun on Sep. 2, 2006)
- In January 2007, the Company and and Denso Corporation announced that they held an opening ceremony of Toyota Boshoku Foshan Co., Ltd. (TBFC). TBFC is a joint venture between Toyota Boshoku and Denso. TBFC started its production of oil filters for China and other Asian markets in July 2006 and it plans to expand its production for the European market in 2007. TBFC is planning to achieve about 100 million yuan (about 1.5 billion yen) in 2007. (From an article in the Nikkan Jidosha Shimbun on Jan.24, 2007)
- The Company plans to expand by FY 2010 sales in China to 150 billion yen, approx. 2.5 times as large as the FY 2006 sales forecast. As large increase is expected of Toyota vehicle production in China, the company plans to expand sales of interior materials for these locally produced vehicles. Responding to Toyota Motor Corp.'s globalization, the company has been enhancing its production operations overseas. It will work on expanding business in China while enhancing development and production operations there to develop its China business to the third largest scale after Japan and the U.S.A. (From an article in the Nikkan Jidosha Shimbun on Nov.24, 2006)
- In January 2007, the Company, Aisin Seiki Co., Ltd., and Denso Corporation, three companies in the Toyota group, announced that they held a joint opening ceremony of Aisin Seiki Foshan Body Parts Co., Ltd. (ASFB) and Toyota Boshoku Foshan Co., Ltd. (TBFC). ASFB is a subsidiary of Aisin Seiki and TBFC is a joint venture between Toyota Boshoku and Denso. ASFB has been producing electric sunroofs and motor housings for power seats from May 2006. TBFC started its production of oil filters for China and other Asian markets in July 2006 and it plans to expand its production for the European market in 2007. ASFB expects annual sales of approx. 377 million yuan (about 5.67 billion yen) while TBFC is planning to achieve about 100 million yuan (about 1.5 billion yen) in 2007. (From an article in the Nikkan Jidosha Shimbun on Jan.24, 2007)
- In October 2006, the Company announced that it held an opening ceremony of Toyota Boshoku France S.A.S. (TBF) - its new manufacturing facility for automotive bumpers. Located in Onnaing City, France, TBF has launched production of aftermarket bumpers for Toyota vehicles with an annual production capacity of 250,000 units. The new subsidiary was established in January 2005, with 100% of the capital provided by Toyota Boshoku Corporation. The bumper plant, worth 8 million euros in investment, started operating in May 2006 and will focus on producing replacement bumpers for the Corolla, Yaris, and Avensis made in Europe for the time being. (From an article in the Nikkan Jidosha Shimbun on Oct.11, 2006)
- In October 2006, the Company and Toyota Tsusho Corporation announced on October 4 that they held an opening ceremony of Toyota Boshoku South Africa (Pty) Ltd. (TBSA)-their first manufacturing facility in South Africa. Attended by government officials and top executives of both companies, the ceremony took place at the new plant site equipped with leading edge manufacturing equipment for automotive interior parts. TBSA was established in KwaZulu-Natal, South Africa in July 2005 with a total investment of approximately 4.3 billion yen. Production of automotive interior parts such as seats and door trims started in April 2006. The new company targets sales of 10.4 billion yen in fiscal 2007. (From an article in the Nikkan Jidosha Shimbun on Oct.5, 2006)
- In July 2006, the Company announced that it would establish a production company of car interior parts, Toyota Boshoku Canada Inc. (TBCA), which is its first wholly owned seat producing company in North America. TBCA will start operations in 2008 to supply seats and trims for automakers mainly in North America, expecting that 2009 annual sales will be around 15 billion yen. The new subsidiary will be established in Woodstock, Ontario, Canada to respond to the needs of Japanese carmakers including Toyota to procure parts locally, and also with the aim of enhancing competitiveness in the global market. TBCA will be positioned as a critical site in North American business of Toyota Boshoku, as seen in a plan to supply interior parts for RAV4 to be produced by Toyota Motor Manufacturing Canada Inc. (TMMC) that will begin operations in 2008.(From a story in the Nikkan Jidosha Shimbun on Jul. 11, 2006)
- In April 2006, the Company announced on April 10 to establish a subsidiary in Russia to produce seats for vehicles in joint venture with Toyota Tsusho Corporation. This is the first project in Russia by auto parts suppliers in the Toyota Group, and the 56th overseas facilities of Toyota Boshoku. A new company "Toyota Boshoku (Russia)" will be established in the site of "Toyota Motor Manufacturing Russia (TMMR) "located in St.Petersburg. In time with production of Toyota Camrys at TMMR starting in December 2007, Toyota Boshoku (Russia) will produce 20,000 sets of seats for the model per year. It will start the operation with production by complete knockdown system using most of components including mechanical parts of seat slides and seat rails as well as seat fabrics imported from Japan. Approximately 330 million yen will be invested in transfer and introductionof machinery and equipment used mainly for cutting urethane foam materials and fabrics. The number of employees at the startup will be about 90.(From a story in the Nikkan Jidosha Shimbun on Apr. 11, 2006)
|New Facilities||( in millions of JPY )|
|Name||Location||Type of facility||Planned investing amount||Start||Finish|
|Sanage Plant||Aichi, Japan||Manufacture of new type of seat and door trims; maintenance and renewal of existing facilities||
|Kariya Plant||Aichi, Japan||Manufacture of new type of air filters||
|Construction of a new facility to manufacture bumpers, cylinder head covers, etc.; manufacture of new products||3,280||2007.04||2008.03|
|Oguchi Plant||Aichi, Japan||Manufacture of new type of molded ceilings, fender liners; maintenance and renewal of existing facilities||2,149||2007.04||2008.03|
|Dobashi Plant||Aichi, Japan||Research and development of electric components; manufacture of new products||2,017||2007.04||2008.03|
|Fuzioka Plant||Aichi, Japan||Manufacture of new type of door trims; maintenance and renewal of existing facilities||1,662||2007.04||2008.03|
|Manufacture of new type of seat and door trims; maintenance and renewal of existing facilities||4,671||2007.04||2008.03|
|Toyohashi-kita Plant||Aichi, Japan||Manufacture of new type of seats ; maintenance and renewal of existing facilities||1,028||2007.04||2008.03|
|Toyota Boshoku Canada Corp||Ontario,
|Manufacture of new type of seat and door trims||6,454||2007.04||2008.03|
|Trim Masters Inc.Grope||Kentucky,
|Facilities for new type of seat and door trims and frames||2,901||2007.04||2008.03|