Toyota Boshoku Corporation Business Report FY ended Mar. 2017

Financial Overview

(in millions of JPY)
FY ended Mar. 31, 2017 FY ended Mar. 31, 2016 Rate of
Change (%)
Sales 1,357,913 1,415,772 (4.1) -Negative currency translation impacted business results, in spite of higher production volumes in Europe.
Operating income 71,936 59,492 20.9 -Factors impacting Income: Lower product selling prices and negative currency translation.
-Factors increasing income: Greater production volumes of new products with enhanced product appeal; and effective rationalization initiatives.
Ordinary income 77,224 56,123 37.6
Net income 45,359 3,900 106.3

Interior Business Sold to Non-Toyota Group Company

-The Company announced on March 31 that it will sell its automotive interior business targeting OEMs other than Toyota Motor Corporation (Toyota) in Europe. The Company will sell off its three production and sales subsidiaries in Europe, as well as functions like interior development in the company's European headquarters, to Megatech Industries AG (Megatech) in Liechtenstein. The Company will also establish a joint venture (JV) with Megatech, which will continue door trim operations that take advantage of Toyota Boshoku's proprietary "natural fiber simultaneous forming technology." As a result of this business realignment, the company will take an extraordinary loss of EUR 172 million (JPY 22.7 billion) in its consolidated financial results for the period that ended in March 2016. In 2011, Toyota Boshoku purchased the automotive interior business from POLYTEC Holding AG in Austria to explore demand among OEMs other than Toyota, and took over eight plants from the Austrian company. Boshoku Automotive Europe GmbH in Germany, Boshoku Automotive Poland Sp. z o.o., and Boshoku Automotive Czech, s.r.o. have five out of the eight plants. Three out of the five plants already closed because of worsened business performance caused by fiercer competition and other factors. The company's European headquarters' branch office in Munich, Germany has functions including the development function of interiors targeting OEMs other than Toyota, but Toyota Boshoku will remove businesses other than sheet operations from the branch office. (From an article in the Nikkan Jidosha Shimbun on April 2, 2016)

New Product Order for Lexus LC

-The Company announced on March 21 that its seat and door trim have been adopted for Toyota Motor Corporation's new Lexus LC. The seat features a layered structure of stacked Y-shaped seat back components that extend beyond the shoulder area on the main component. The seat itself weighs only 20 kg or less even if it is equipped with six power-controlled functions. The door trim achieves the world's first drape form with Alcantara fabric. The product is produced on a dedicated production line that includes manual work processes at the company's Sanage plant in Toyota City, Aichi Prefecture. Both products incorporate unprecedented structures to fit the image that the Lexus LC developers had for the vehicle. (From an article in the Nikkan Jidosha Shimbun on March 22, 2017)

Partnership with Tachi-S Announced

-The Company and Tachi-S Co., Ltd. (Tachi-S) announced that they have reached an agreement to form a business partnership for automotive seat operations. The Company, a Toyota Group parts supplier, and Tachi-S, which primarily handles parts for Nissan Motor Co., Ltd.'s automobiles, will forge a partnership outside their own corporate families to cooperate in the development of new seats. In light of the advancement of autonomous driving technology and other foreseen changes in the automobile market, requirements for automotive seats are expected to change. The two companies will strengthen their competitiveness and reduce costs by pooling their technologies. The Company and Tachi-S will study the possibility of jointly developing seat frame devices and other new mechanical parts. (From an article in the Nikkan Jidosha Shimbun on April 1, 2017)

-The Company announced that it has signed a Memorandum of Understanding to start discussions on a potential business partnership with Mitsui Chemicals, Inc. for the commercialization of "High Impact Resistant Plastic." "High Impact Resistant Plastic", which was developed jointly by Toyota Boshoku and Toyota Central R&D Labs., Inc., offers the greatest level of impact resistance in the global market. The high-performance plastic can be used in Toyota Boshoku's automotive seats. It is also expected to be adopted for other automotive parts and non-automotive applications as well. The plastic is a polymer alloy made from polyamide 11 bio-based resin, polypropylene derived from petroleum resin, and Mitsui chemical's compatibilizer. Toyota Boshoku and Mitsui Chemicals plan to utilize the material as a resin modifier. (From an article in the Nikkan Jidosha Shimbun on November 11, 2016)

R&D Expenditure

(in millions of JPY)
FY ended Mar. 31, 2017 FY ended Mar. 31, 2016 FY ended Mar. 31, 2015
Overall 37,884 38,450 38,821

R&D Structure

Area Location
Japan -The Sanage Technical Center (Aichi Pref.)
-Oguchi Development Center (Aichi Pref.)
-Kariya Development Center Research Laboratories (Aichi Pref.)
-Tajimi Technical Center (Gifu Pref.)
North, Central and South America Michigan, USA (Technical Center)
California, USA (Silicon Valley Office)
China Shanghai, China (Research and Development Center)
Asia/Oceania Bangkok, Thailand (Research and Development Center)
Europe Milan, Italy (Design studio)

R&D Activities
Lightweight door trim
-The Company has developed a new lightweight door trim utilizing its proprietary bioplastic alloy that has greater impact strength in order to practically realize the "world's most cracking-resistant plastic." The new door trim is made by foam molding a cracking-resistant material. As a result, the new door trim is up to 30% lighter than the company's conventional door trims. The Company will seek the widespread adoption of the bioplastic alloy across industries because it is expected to find a wide variety of uses in areas including other automotive parts, smartphone cases, and suitcases. The bioplastic alloy was jointly developed by Toyota Boshoku and Toyota Central R&D Laboratories, Inc. It is produced by mixing a plant-derived resin made from castor oil and a petroleum-based polypropylene. The bioplastic alloy has soft gum in its structure. As a result, it offers a high level of impact strength that is ten times that of polypropylene. (From an article in the Nikkan Jidosha Shimbun on May 27, 2016)

Capital Expenditure

(in millions of JPY)
FY ended Mar. 31, 2017 FY ended Mar. 31, 2016 FY ended Mar. 31, 2015
Total 35,500 36,898 50,190

-The Company invested the following amounts to mainly develop new products and rationalize/renew production facilities.

  • Japan: JPY 21,103 million
  • North/Central/South America: JPY 5,939 million
  • Europe/Africa: JPY 2,538 million
  • Asia/Oceanian: JPY 5,919 million

New Facilities

(As of March 31, 2017)
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 11,814 Apr.
Kariya Plant Aichi Pref.
Manufacture of new types of air filters; maintenance and renewal of existing facilities 6,527 Apr.
Gifu Plant Gifu Pref.
Setting up to manufacture new products (bumpers, etc.); and maintain and renew facilities 1,325 Apr.
Takaoka Plant Aichi Pref.
Manufacture of new types of seats and door trims; maintenance and renewal of existing facilities 1,284 Apr.
Toyota Boshoku Canada Ontario,
Manufacture of new types of seats and door trims 3,200 Apr.

Expansion Scheduled for Toyota Boshoku Indiana’s Production Plant

-Toyota Boshoku Indiana, a U.S. subsidiary of Japan-based Toyota Boshoku Corporation, announced on June 12 that it will invest USD 10.59 million to construct and equip a 42,000-square-foot addition to its manufacturing facility at 1698 S. 100 West in Princeton, Indiana.
After the expansion, Toyota Boshoku Indiana’s operations will total 524,000 square feet and the company will begin production of seats and doors for the Toyota Highlander. Toyota Boshoku Indiana currently produces interior seat systems for the Toyota Sienna. It produced seats for 147,620 vehicles in 2015. The Indiana operation launched in 2007 to support Toyota Motor Manufacturing Indiana’s (TMMI) production facilities in Princeton, where more than 375,000 Toyota Highlander, Highlander Hybrid, Sienna and Sequoia models were assembled last year.
After consolidating Highlander production in Princeton in 2012, TMMI has announced expansions three of the last four years. Since January 2013, 42 Japan-based companies have committed to locating or expanding their operations in Indiana, announcing plans to invest more than USD 2 billion into Indiana. Among all U.S. states, Indiana has the largest amount of Japanese investment per capita. (Indiana Economic Development Corporation release from July 12, 2016)

Forecast of FY March 2018

(in millions of JPY)
FY ending Mar. 31, 2018
FY ended Mar. 31, 2017
(Actual result)
Rate of change (%) Factors
Revenue 1,300,000 1,357,913 (4.3) -Income and profit are predicted to decrease due to increased initial investment costs and negative currency translation because of the high value of the yen.
Operating Profit 60,000 71,936 (16.6)
Profit for the yea 60,000 77,224 (22.3)
Profit for the year attributable to owners of the parent 38,000 45,359 (16.2)

>>>Forecast for next year

-Predicts 7,380,000 units production of seats in FY ending March 2018 (1.7% year-on-year increase), comparing to 7,260,000 units production of seats in FY ended March 2017.