Toyota Boshoku Corporation Business Report FY2010

Business Highlights

Financial Overview

(in millions of JPY)
  FY2010 FY2009 Rate of
Change (%)
Sales 983,727 953,729 (2.7) 1)
Operating income 36,856 25,143 78.9 -
Operating income 36,027 24,067 81.1 -
Current net income 11,466 6,882 - -
*Since the automotive segment accounts for over 90% of the Company's business as of the end of the 2010 fiscal year, which ended in March 2011, information on other business segments is not provided here.

-The Company's operating revenue fell by 24,662 million yen, a 4.5% year-on-year drop, to 528,937 million yen due to production slowdowns resulting after the government-sponsored, eco-car-stimulus subsidies ended and due to operations stoppages caused by the Great Eastern Japan Earthquake. The Company's business operating profit was 6,812 million yen, a 16.9% year-on-year decrease of 1,388 million yen due to the decrease in profits that resulted from lower operating revenue. This was in spite of initiatives implemented to improve its profit structure. 

<North, Central, and South Ameria>
-The Company's operating revenue rose by 10,818 million yen for the year, a 6.6% year-on-year increase, to 175,186 million yen due to production increases brought on by the start of production of the Highlander and Sienna in the USA, and the Cadillac SRX in Mexico. The Company's business operating profit rose by 6,707 million yen, but the Company still suffered a business operating loss of 5,700 million yen for the year. 

-The Company's operating revenue grew by 41,258 million yen (a 19.3% increase year-on-year) to 255,243 million yen due to the production launches of the RAV4 in Tianjin and the new Highlander in Guangzhou, China; and the production increase of the IMV in Thailand. The Company's business operating profit increased 29.6%  year-on-year (by 8,188 million yen) to 35,845 million yen as a result of increased production volumes and initiatives implemented to improve its profit structure.

The Company's operating revenue rose 2,587 million yen for the year (a 11.9% year-on-year increase) to 24,377 million yen as a result of the production increase of the IMV in South Africa, and other factors. The Company's business operating loss increased to 912 million yen due to a greater loss for the year of 598 million yen (compared to a loss of 314 million yen the previous year) because of production start-up costs incurred at Toyota Boshoku Somain and TBAI Poland Zp.z.o.o. 

Joint Ventures

-Toyota Boshoku Corporation and Aisin Seiki Co., Ltd. have decided to jointly manufacture interior parts and engine air intake system parts in Sorocaba, Sao Paulo, Brazil. The affiliate in charge of manufacturing will be Toyota Boshoku do Brasil Ltda. (TBDB), which was established in 2007. Toyota Boshoku has a 80 percent stake in TBDB while Aisin Seiki owns the remaining 20 percent. The two companies will increase their capital investments in TBDB in stages by adding a total of approximately 2.5 billion yen in capital and they also plan to manage the business operations of TBDB by changing the form of the company to a manufacturing company. TBDB will manufacture seats, door trims, and air cleaners for a newly developed compact car to be produced at the new Brazilian plant of Toyota Motor Corporation. At the time of start-up, the facility is planning to produce these components for 70,000 vehicles per year. Toyota Boshoku and Aisin Seiki will continue their cooperative relationship through joint development and manufacturing of seat frame parts, and TBDB will become the fourth jointly owned and operated company following the companies in the cities of Guangzhou and Tianjin in China and in Poland. (From a press release on August 5, 2010)

-Toyota Boshoku (China) Co., Ltd. and Changchun Faway Automobile Components Co., Ltd. will establish an automotive interior parts manufacturing joint venture based in Changchun, Jilin Province, in August 2010. Toyota Boshoku (China) will hold a 60% stake in the new company "Changchun Faway Toyota Boshoku Auto Parts Co., Ltd." while the remaining 40% interest will be held by Faway. A total of 183 million Chinese yuan (approximately 1,757 million yen) will be invested. The JV plans to start manufacturing components for Corolla models including seats, door trims, carpets and luggage trims for Corolla models and deliver them to the new Changchun plant of Sichuan FAW Toyota Motor, beginning the first half of 2012. Its production capacity is expected to be 100,000 units per year. Changchun Faway Toyota Boshoku Auto Parts will be the second joint venture between Faway and a Toyota Boshoku group company, following Tianjin Intex Auto Parts Co., Ltd. In the Changchun region, Toyota Boshoku currently manufactures Land Cruiser seats to be delivered to the Sichuan FAW Toyota's Changchun Plant (current plant) at the Changchun branch of Tianjin Intex. (From a press release on July 30, 2010)

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

Outlook for FY2011

(in million of JPY)
FY2010 Year-on-year Fluctuation
Sales 930,000 983,727 (53,727)
Operating income 26,000 36,856 (10,856)
Ordinary income 28,000 36,027 (8,027)
Net income 11,000 11,466 (466)


R&D Expenditure

(in millions of JPY)
  FY2010 FY2009 FY2008
Overall 32,434 30,021 28,968

R&D Structure

-Completed the second building at its Sanage Development Center in Toyota City, Aichi Prefecture. The purpose of the expansion is to integrate and strengthen the company's capabilities to develop automotive interior products. Management of production technologies and production, which has been handled separately at each facility, will now be consolidated into the Sanage facility. The integration will enhance collaborations between each of the company's functions from product planning through manufacturing. The new seven-story building with one underground level will have a total floor area of 44,000 square meters. Some 2,200 people can work in the building. The company is investing approximately 9 billion yen in this project. (From an article in the Nikkan Jidosha Shimbun on May 12, 2010)

R&D Activities

-In the Interior Components Division, the Company's environmentally friendly, light-weight deck-board made of kenaf was being equipped in the new version of the Toyota Ractis launched in November 2010 and the new version of the Toyota Vitz launched in December 2010. In addition, the height of the deck-board installed in the Ractis can be adjusted using only one hand. Also,  the Company's new and improved seatframe, which is planned to be installed over time on all new versions of Toyota vehicles after the new Ractis, is capable of reducing whiplash without employing an active headrest.

-In the Filtration and Powertrain Components Division, the Company's  resin cylinder head cover with OVC (Oil Control Valve) is being featured on on the new versions of the Toyota Ractis and Vitz. These headcovers are based on a joint-development project with Daihatsu which focused on reducing the number of parts used and on simplifying the design. 

-In the Textile and Interior Parts Division, the Company's double-woven-and-sewn hybrid curtain airbags, which are light weight and designed to reduce cutting waste, are being equipped in the new version Suzuki MR Wagon. These curtain bags are designed to be installed in all future Toyota vehicles over time.

Product Development

Interior Segment:
-Toyota Boshoku Corporation announced a new interior system concept called the T-BOP. Incorporating a universal design approach, the T-BOP uses a U-shaped seat structure, which enables various seat arrangements possible. Both front and rear seats slide forward and backward on seat rails and can be locked anywhere at a required position. The front passenger seat can be tilted forward to be used as a rear-facing child safety seat. In addition, the seat back unit of the front passenger seat can be removed to allow the passenger in the rear seat to rest his/her legs on the front seat cushion. The seat fabric system consisting of thin pads and surface skins with zippers can be easily removed and replaced by other fabric systems. Having completed developing the T-BOP system by the summer of this year, Toyota Boshoku is currently applying for a patent for its seat frame technology, while working on meeting related safety standards. The company has already started proposing the T-BOP concept to automakers, looking to turn the technology into a practical business solution within the next few years. (From an article in the Nikkan Jidosha Shimbun on November. 2, 2010)

Lightweight Seat
-Developed a slim style, lightweight seat which uses elastic netting instead of urethane foam in the seatback. The new seat, which is 10 percent lighter than the company's existing product, also increases the space between the front seatback and the knees of passengers sitting in the back by 30 millimeters. In addition, significantly improved air permeability contributes to reducing the time for cooling down the cabin temperature especially after parking the car under the boiling sun in the summer. The company intends to propose the seat to automakers by underlining the advantage the technology can offer to electric vehicles, in which power consumption levels by air conditioning equipment bite into the cruising distance of the car. (From an article in the Nikkan Jidosha Shimbun on May. 20, 2010) 

Investment Activities

Capital Expenditure

(in millions of JPY)
  FY2010 FY2009 FY2008
Total 41,229 43,076 60,496

-The Company invested a total of 41,229 million yen, which it will use mainly to develop new products and rationalize and upgrade production facilities.
-In Japan, the Company invested 23,266 million yen to develop new products, rationalize and upgrade production facilities, and improve the building and facilities of Building 2 at the Sanage Development Center.

<North, Central, South America>
-The Company invested 3,401 million yen to develop new products and rationalize and upgrade production facilities.

-The Company invested 10,314 million yen to develop new products and rationalize and upgrade production facilities. 

-The Company invested 4,247 milliion yen in preparing for the launch of production at Toyota Boshoku Solmain and TBAI Poland Zp.z.o.o. 

Investment Outside Japan

-The production of automobile interior parts, including seats, will commence in fall 2011 at a new facility constructed in Mississippi in the U.S. The plant will produce seats and door trims for 150,000 Corolla cars per year to be manufactured by Toyota at its Mississippi plant. Toyota Boshoku Mississippi (TBMS) had already been established in 2007 to serve Toyota vehicles in Mississippi. However, its operations have been put on hold because Toyota's car production plan was temporarily frozen. Recently Toyota decided to revive the project and go ahead with production in Mississippi. Following this decision, Toyota Boshoku will restart preparations for inaugurating the operations. TBMS is a wholly-owned subsidiary of Toyota Boshoku America. Capitalized at $49 million (approx. 4 billion yen), it has a land area of about 160,000 square meters and the workforce of about 250. (From an article in the Nikkan Jidosha Shimbun on December. 7, 2010)

-Chengdu Toyota Boshoku Automotive Parts Co., Ltd., its vehicle interior parts production subsidiary in Chengdu, China, has moved to the Chengdu Economic & Technological Development Zone. On the occasion of the transfer, the subsidiary has also increased its production capacity. The transfer will enable Toyota Boshoku to better support Sichuan FAW Toyota Motor Co., Ltd. (SFTM), which has been relocated to the development area. New operations of Chengdu Toyota Boshoku have already begun at a site adjacent to the automaker's plant. Chengdu Toyota Boshoku Automotive Parts was established in 1999. It is capitalized at 15.66 million US dollars, of which 53 percent was invested by Toyota Boshoku. (From an article in the Nikkan Jidosha Shimbun on May. 20, 2010)

New Facilities

(in millions of JPY)
Name Location Type of facility and activities Planned investing amount Start Finish
Sanage Plant Aichi Pref.
Manufacture of new types of seats and door trims; maintenance and renewal of existing facilities 7,908 April,
Kariya Plant Aichi Pref.
Manufacture of new types of air filters 2,786 Apr,
Toyota Boshoku Tohoku Iwate Pref.
Manufacture of new types of seats and door trims. 2,160 Apr,
Toyota Boshoku Do Brasil Ltda.



Manufacture of new  seating products 3,125 Jan.,