Toyota Boshoku Corporation Business Report FY2012

Business Highlights

Financial Overview

(in millions of JPY)
  FY ended Mar. 31, 2012 FY ended Mar. 31, 2011 Rate of
Change (%)
Sales 964,295 983,727 (2.0) -The high evaluation of the yen was a large contributing factor for the decrease.
Operating income 20,910 36,856 (43.3) -Factors that contributed to increase the Company’s profit, such as operations rationalization, were offset by increased costs associated with product price fluctuations and higher costs for labor and sundry expenses. 
Ordinary income 23,225 36,027 (35.5) -
Net income 3,232 11,466 (71.8) -

-Operating revenue was lower by 0.1% year-on-year, to 572,342 million yen, due to adjustments in product mix, although production volume increased in line with the release of the "CT200h", "Prius α", and "Aqua".
-Operating profit likewise fell year-on-year by 38.5%, to 4,189 million yen.

<North, Central, and South America>
-Operating revenue, which was 142,460 million yen, decreased by 19.6% year-on-year due to lower production volume of the "Camry" and the continued high evaluation of the yen.
-The region posted an even greater operating loss by 228 million year-on-year to 5,928 million yen due to lower operating revenue. (The previous 2011 fiscal year's operating loss was 5,700 million yen) This was in spite of the Company's reorganizing its profit structure.

-Even though Asia/Oceania had higher production volumes as a result of the launch of the new "Corolla Verso" in China, operating revenue resulted in a 4.9% year-on-year decrease to 250,134 million yen because of the negative currency translation due to the high evaluation of the yen.
-Likewise, operating profit fell because of the drop in revenue, to 24,950 million yen, a 30.4% year-on-year decrease.

-The European operations posted a significant jump in operating revenue by 105.8% year-on-year to 50,979 million yen, due to several factors such as increased production volume of the "Yaris" in France, the acquisition of POLYTEC Holding AG's interior-products division, and the launch of operations at Boshoku Automotive Europe GmbH.

-The Europe/Africa operations recorded an operating loss, however, of 3,048 million yen, which was a greater loss year-on-year by 2,135 million yen. (The loss in the previous fiscal year, which ended March 31, was 912 million yen.) This was due to the initial preparation costs associated with the launch of production at Toyota Boshoku Somain S.A.S. and TBAI Poland Sp.z o.o.

Recent Developments in Japan

-In May 2011, the new plant of Toyota Boshoku Tohoku in Miyagi Prefecture launched commercial production of seats for the "Corolla Axio".

Recent Developments Outside Japan

-The Company said that it has started production of seats and door trims in Mississippi, U.S.A. for installation on the "Corolla" assembled at the recently opened Toyota Motor Manufacturing Mississippi, Inc. (TMMMS). Seat frames and door trims will be produced at Toyota Boshoku Mississippi, LLC (TBMS). The Seat frames will be delivered to Systems Automotive Interiors, LLC. (SAI), which will assemble completed seats and supply them to TMMMS. SAI is a joint-venture company established between Systems Enterprises Inc., a local parts supplier, and Toyota Boshoku America, Inc. (From an article in the Nikkan Jidosha Shimbun on November 24, 2011)

-The Company announced that its production facility in France has started production of seats and ceilings for the new "Yaris" (known as "Vitz" in Japan). This is the company's first production of seats and interior parts, for which orders have been received in the EU region. Taking this opportunity, the Company intends to expand business in Europe. A company that has commenced production is Toyota Boshoku Somain S.A.S., which is a subsidiary overseeing operations in Europe and located in Somain, Nord-Pas de Calais France (TBSO). In addition to seats and cabin ceilings, TBSO will produce air-cleaners and cabin air filters in the air-conditioner system for supply for the "Yaris". (From an article in the Nikkan Jidosha Shimbun on July 27, 2011)


-Utilizing the natural plant material kenaf, the Company achieved creating lighter weight door-trim for the new "Lexus GS".
-The Company's air cleaner case is being equipped on the Toyota "Crown Comfort".
-The Company was awarded an agreement to supply sport seats to the Toyota "86" and the Subaru "BRZ"
-A new supply agreement was signed to deliver seats and headliners to the Toyota "Yaris".


-The Company announced that its plan to acquire the automotive interior business of POLYTEC Holding AG, Austria, in order to enhance its interior business in Europe. POLYTEC serves German automakers including BMW, Daimler, VW and Opel by supplying door trims, ceilings and other interior parts and Toyota Boshoku plans to expand business in Europe by taking advantage of such strength. (From an article in the Nikkan Jidosha Shimbun on June 11, 2011)

Joint Ventures

-The Company and Aisin Seiki Co., Ltd. held an opening ceremony at their jointly owned and operated company, TBAI Poland Sp. z o.o., to celebrate the production start of seat frames and seat covers. The seat frames that have begun to be produced at this new plant are the next-generation "TB-NF110 Series" seat frames that are characterized by the structure designed in the pursuit of excellent riding comfort performance with reduced weight and resources, which are realized by the use of high-tensile steel in the 980 MPa-class for a portion of the seat frame material. These seat frames are assembled at Toyota Boshoku Somain S.A.S. in France, and then shipped to the new Toyota "Yaris" manufacture, Toyota Motor Manufacturing France S.A.S.. The joint venture, which has a site are of approximately 80,000 square meters, is owned 70% by Toyota Boshoku Europe and 30% by Aisin Europe. TBAI is the third manufacturing base that began production of these seat frames in June 2011, following Japan and North American region. (From a press release on October 17, 2011)


-The Company announced that Toyota Boshoku (China) Co., Ltd., its wholly-owned subsidiary in China, will take over the stake held by Toyota Boshoku in Tianjin Intex Auto Parts Co., Ltd., a local manufacturing subsidiary, and turn the company into Toyota Boshoku China's subsidiary, which is a grandchild of Toyota Boshoku. This is a move to streamline operations in China under unitized management by Toyota Boshoku China. The transfer of stocks will be carried out in December. Tianjin Intex Auto Parts, which was formed in April 2003 invested 75 percent by Toyota Boshoku and 25 percent by a local supplier is engaged in manufacture and sale of automobile seats and interior parts. (From an article in the Nikkan Jidosha Shimbun on August 2, 2011)

-TB Kawashima Co., Ltd., Shiga Pref., Japan, will consolidate on Oct. 1, 2011 its 100% subsidiary in Shiga Pref., Kawashima Echigawa Factory Ltd., which will be dissolved the same day. TB Kawashima is an automotive interior material supplier founded jointly by Toyota Boshoku Corp., Kawashima Selkon Textiles Co., Ltd. and the Toyota Tsusho Group in December 2009. It was officially established on July 1, 2010, when Kawashima Selkon Textiles transferred Kawashima Echigawa Factory to TB Kawashima. (From an article in the Nikkan Jidosha Shimbun on July 16, 2011)

Outlook for FY ending Mar. 31, 2013

(in billions of JPY)
  FY ending Mar. 31, 2013
FY ended Mar. 31, 2012
Change Factors
Sales 1,010.0 964.2 45.8 -
Operating income 30.0 20.9 9.1 -
Ordinary income 30.0 23.2 6.8 -
Net income 13.0 3.2 9.8 -
Sales by segment
Japan 595.0 572.3 22.7 -Income and profit will be increased at the outset of the first half of the year because of greater vehicle sales attributed to the eco-car stimulus program.
-However, production volume continued a downward trend after the eco-car stimulus program ended.
North, Central and South America 145.0 142.4 2.6 -The launch of the "Corolla" is going to be contributed to performance during the last fiscal year, but transferring the production operations of the "Camry" will cause operating revenue to go flat.
-Due to the start-up costs incurred to launch production in Brazil, performance is forecast to break even.
Asia/Oceania 265.0 250.1 14.9 -Unit sales are predicted to recover.
Europe/Africa 60.0 50.9 9.1 -Revenue is plan to be increased during the last fiscal year due to the launch of the "Yaris" and Boshoku Automotive Europe.

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

2015 Medium-term Management Plan

-The Company announced on April 17 its new mid-term business plan covering through the year ending March 2016. Sales target is set at 1.3 trillion yen, up 38.2 percent from the forecasted figure for the term ended March 2012, while operating profit target is set at 65 billion yen, more than three times higher than the forecast. The company aims to achieve these goals not only by maintaining and expanding business with Toyota Motor, but also by winning more programs from non-Toyota customers, as it works on raising the sales ratio of non-Toyota business from the current 7 percent to 10 percent. The company has also mapped out its vision for the longer term running through the year ending March 2021. Sales are expected to reach 1.6 trillion yen, while operating profit is projected to total 80 billion yen. Sales ratio to customers other than Toyota is anticipated to rise to 30 percent by 2020. (From an article in the Nikkan Jidosha Shimbun on April 18, 2012)

-The Company will undertake the following initiatives in order to reach the objectives outlined in its mid-term management plan.
1) Develop the latest technology in pursuit of broadening the scope of operations
-Reorganizing the R&D structure
  • Complete product development in areas where customers are located
  • Conduct cutting-edge and advanced R&D activities in Japan
  • Create a framework that enables R&D information to be exchanged among local R&D centers.
-Strengthening human resources development

2) Quicken the pace of expanding operations by focusing on emerging countries.
-The Company will respond to the needs in emerging markets due to the fact that unit sales by global OEMs outside their home countries are increasing and Southeast Asian markets, along with China and India, are continuing to grow. Also, the Company will consider expanding operations in growing markets by carefully taking a hard look at the conditions of local governments and public safety, making the maximum use of its existing facilities.
-For its emerging-market strategy in Asia, the Company will establish its R&D functions locally, promote its technical capabilities, and actively invest to expand its operations in the region.
  • Toyota Boshoku Asia's MRD (Marketing Research & Development) Center in will launch operations during 2012.
  • Toyota Boshoku China R&D Center will move to larger facilities.
3) Enhance operations and corporate structure to win a wider range of customers
-Currently, 90% of the Company's operating revenue is generated from business with the Toyota Group. By the 2020 fiscal year, the Company hopes to increase the percentage of non-Toyota-Group sales to 30%.

4) Streamline Japan operations; making them more efficient to offer greater added-value
-Build robust production lines that solidly respond to production capacity changes, with half the investment and work hours.
-Develop the optimum scenario that responds to environmental changes
  • Rearrange plant resources for use in new businesses
  • Expand business operations, which will be made possible through the development of new products and production methods that will lead to greater mass-production.
-Developing value-added products based on evolutions in its core technologies, and developing more efficient facilities.


R&D Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2012 FY ended Mar. 31, 2011 FY ended Mar. 31, 2010
Overall 32,543 32,434 30,021

R&D Structure

-Complete product development in areas where customers are located, leaving cutting-edge and advanced R&D activities to be carried out in Japan.

Japan -The Sanage Technical Centre (Aichi Pref., Japan)
-Oguchi Development Centre (Aichi Pref., Japan)
-Kariya Development Centre Research Laboratories (Aichi Pref., Japan)
North, Central and South America Kentucky, USA
China Shanghai, China
Asia/Oceania Bangkok, Thailand
Europe/Africa Zaventem, Belgium
Design studio Milan, Italy

-The Company held a groundbreaking ceremony at the construction site for the Tajimi Technical Center in Tajimi City, Gifu Prefecture, which is scheduled to start operations in March 2014. The new facility will have a proving ground, which will be the company's first testing track. The Company's president Shuhei Toyoda said at the ceremony, "Making the most of the new testing facility, we are going to develop the world's best automotive seating, interior products and powertrain technologies. We'll strive to increase business not only with Toyota, but also with other automakers, while aiming to triple sales with non-Toyota customers by 2020." The Tajimi Technical Center has approximately 360,000 square meters of land area, which includes some 140,000 square meters of proving ground consisting of a circuit course and a special surface course. The company is investing about 2.6 billion yen in the project. (From an article in the Nikkan Jidosha Shimbun on April 14, 2012)

-The Company established the MRD (Marketing Research & Development) Center in February 2012 at Toyota Boshoku Asia. The new Center will function to conduct market research in the ASEAN Region and strengthen R&D capabilities based on more substantial benchmarking.

-The Company announced on September 12 that it established its design studio for vehicle interiors in Milan, Italy, its first facility for designing in Europe and its operation got started on September 1. The studio named "Toyota Boshoku Milan Design Branch" is engaged in such activities as collection of design information and trends, creation and proposals for customers. With Japanese and non-Japanese designers working together, the Company is aiming to develop a competitive edge in designing in the global market. (From an article in the Nikkan Jidosha Shimbun on September 13, 2011)

-In July 2011, the Company opened a technical center at Toyota Boshoku America, which will serve to enhance product development capabilities in the North American region.

Product Development

Air-cleaner case
-The Company developed technology for injection molding of plastic material blended with kenaf and polypropylene, and created an air-cleaner case by application of this technology. The new technology allows material containing 40 percent of kenaf fiber to be homogenized and molded by injection while high quality is maintained. The new case is 10 percent lighter and its CO2 emissions are reduced by 20 percent throughout its life cycle, compared with conventional products. It has been used in Toyota's "Crown Comfort" since January. This is the first time for kenaf-based material to be adopted in functional parts around the engine. The new air-cleaner case has been commercialized under the Denso brand. Toyota Boshoku is studying the possibility of expanding applications of this technology to a wider range of plastic components that can be processed by injection molding and other function parts. (From an article in the Nikkan Jidosha Shimbun on February 18, 2012)

Reducing weight technology
-The Company said on February 9 that it has developed new technology capable of substantially reducing weight of door trims and seat backboards by use of plant-based kenaf fiber. Blending an additive to heighten compatibility between polypropylene and kenaf fiber has improved adhesion property between the two materials, which has also reduced use of materials and achieved an about 20 percent reduction in weight. Furthermore, the Company developed a new processing technique to simultaneously conduct stamp molding of the base material and injection molding of resin components for increasing efficiency in production. Recognizing these advantages, Toyota has chosen the new plant-based materials in its all-new "Lexus GS" series launched in January. (From an article in the Nikkan Jidosha Shimbun on February 10, 2012)

Investment Activities

Capital Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2012 FY ended Mar. 31, 2011 FY ended Mar. 31, 2010
Total 37,583 41,229 43,076

-The Company invested mainly to develop new products and rationalize and upgrade production facilities.

-The Company invested 17,789 million yen to respond to the production of new products, and to rationalize and renew production facilities, and acquire a testing ground.

<North, Central, South America>
-The Company invested 5,653 million yen, mainly to enhance production facilities at Toyota Boshoku Do Brasil LTDA.; respond to production of new products; and to rationalize and renew production facilities.

-The Company invested 9,646 million yen to develop new products and rationalize and upgrade production facilities. 

-The Company spent 4,494 million yen to acquire the land and buildings for Boshoku Automotive Europe.

New Facilities

(As of Mar. 31, 2012)
Name Location Type of facility and activities Planned investing amount
(in millions of JPY)
Start Finish
Sanage Plant Aichi Pref.
Manufacture of new types of seats and door trims; maintenance and renewal of existing facilities 7,199 April,
Kariya Plant Aichi Pref.
Manufacture of new types of air filters; maintenance and renewal of existing facilities 4,722 April,
Toyohashi-Minami Plant Aichi Pref.
Manufacture of new types of seats and carpets; maintenance and renewal of existing facilities 1,037 April,

Outlook of Capital Expenditure for FY ending Mar. 31, 2013

(in billions of JPY)
  FY ending Mar. 31, 2013
FY ended Mar. 31, 2012
Japan 20 18.2 1.8
North, Central, South America 5.0 5.5 (0.5)
Asia/Oceania 12.0 9.5 2.5
Europe/Africa 5.0 4.3 0.7
Total 42.0 37.5 4.5