Toyoda Gosei unveils €400m investment plan in growth markets

Kiyosu, Japan — Toyoda Gosei has unveiled a Yen72 billion (€390 million) capex for the next four years to “aggressively invest” resources in high growth areas to achieve its 2030 target business plan targets. (ERJ report).

In a 29 April earnings call, the Japanese group said it had accelerated the growth strategy under the plan while simultaneously “strengthened our earnings base for the future by carrying out structural reforms in our China business, where market conditions have changed dramatically.”

As part of its growth strategy, Toyoda Gosei said it will “continue to invest management resources actively” in “priority businesses” including safety systems and interior and exterior components.

The group also identified “priority regions with high growth potential, including North America, India, and Brazil.”

Toyoda Gosei said it aims to build “a resilient business portfolio capable of growing autonomously amid any environment.”

In the safety segment, the supplier highlighted efforts to expand occupant protection technologies, including seat belts and airbags, as well as its move to convert Ashimori Industry Co. Ltd. from an equity-method affiliate into a wholly owned subsidiary.

The move, it said, has “accelerated the combined development of seat belts and airbags.”

The announcement came as Toyoda Gosei posted “record profits” for the year ended 31 March, with earnings sharply higher than the year before.

The growth, it said, was supported by increased vehicle production, cost reductions and stronger volumes across most major regions.

Revenue for the year rose 8.2% year-on-year to Yen1,150 billion, while operating profit climbed 32.9% to Yen79.5 billion.

The Tokyo-based automotive supplier said the business environment remained difficult during the year, citing “heightened tension in the Middle East,” energy price volatility and wider geopolitical risks, while the automotive sector continued to undergo “substantial transformation.”

Regionally, Japan remained the group’s largest market, with revenue increasing 11.1% to Yen488 billion and operating profit surging 105.9% to Yen23.5 billion.

The gains, said Toyoda Gosei, were supported by higher customer production and unit cost improvements.

In the Americas, revenue rose 6.1% to Yen428 billion, while operating profit edged up 2.4% to Yen34.9 billion.

The group said earnings improved “despite the impact of US tariffs,” helped by higher volumes and cost reductions.

Europe and Africa posted revenue growth of 5.8% to Yen34.6 billion, mainly due to foreign exchange effects, although operating profit slipped 1.1% to Yen2.6 billion.

China remained challenging, with revenue declining 4.3% to Yen90.8 billion due to lower customer production volumes.

The region recorded an operating loss of Yen2.0 billion, compared to a loss of Yen7.2 billion a year earlier, as “fixed-cost reductions and other factors” helped narrow the deficit.

Across Asia, revenue increased 11.1% to Yen153.9 billion and operating profit rose 5.3% to ¥14.9 billion.

India delivered the strongest growth rates within the group, with revenue up 22.4% to Yen51.8 billion and operating profit rising 32.3% to Yen5.7 billion.

Looking ahead, Toyoda Gosei forecast revenue of Yen1.2 trillion for the current fiscal year, alongside operating profit of Yen80.0 billion.

The company said profit growth is expected despite “price revisions and rising salary costs,” owing mainly to continued “unit cost improvements.”