Toyoda Gosei rolls out ambitious plan to drive up profitability

Tokyo – Japanese components supplier Toyoda Gosei (TG) is targeting an almost 50% increase in operating earnings under a newly launched growth plan to 2030.

Under the strategy, TG aims to increase consolidated revenue to Yen1,200 billion, compared to Yen1,100 billion in fiscal 2023, management told a 6 Nov investors briefing.

Compared to the 2023 baseline, operating profit is to grow by 48% to Yen100 billion (€610 million) and operating profit ratio by 1.7 percentage points to 8.0% over the next five years.

To achieve the goals, TG will address the changing needs of the automotive industry, including improving the efficiency, safety and comfort of electric vehicles (EVs).

This, it said, will involve will leveraging opportunities in automotive safety systems and interior/exterior parts, with particular focus on markets in North America, India and China.

Meanwhile, the Japanese maker of rubber/polymer-based parts will carry out a 'portfolio turnaround and restructuring to discontinue low-profit businesses and products.'

Elaborating on the new-mobility trends, TG said EVs equipped with high-capacity batteries are heavy and require weight-reduction in their thermal management systems.

In manufacturing process, meanwhile, TG noted that vehicle makers are favouring ‘integrated delivery’ of parts by components makers to reduce their assembly man-hours.

Furthermore, automotive OEs are looking to reduce noise inside the cabin while enhancing the interior design of the car to create ‘an entertainment space’.

TG intends to meet these needs by providing light-weight battery cooling pipes, noise-reducing ‘double-lipped’ seals and integrated “single-piece assembly” parts.

The group will also contribute advances in airbags, seat belts and steering wheel consoles to improvement the safety and comfort of vehicle occupants.

While currently supplying functional components for internal combustion engine vehicles, TG aims to shift its focus more to providing parts for battery and cooling systems for EVs.

Overall, the aim is to accelerate sales to all automotive manufacturers and “not just Toyota” through providing “attentive support and attractive products,” the group concluded.