Value Creation Story

2030 vision

The TS TECH Group’s Vision Statement—“A company dedicated to realizing people’s potential, a company sincerely appreciated by all”—underpins all of its business operations. By providing the world with attractive products even in the evolving mobility society, we will not only achieve our 2030 Vision but also help to build a more sustainable world. In doing so, we will continue to serve as a reassuring presence for all our stakeholders and be a company sincerely appreciated by all.

Outline of the 15th Medium-Term Management PlanFiscal 2024–2026

Under the 15th Medium-Term Management Plan, we are first of all focusing on responding to the fast-changing market environment and recovering profitability as quickly as possible, in order to achieve further growth and deliver on our 2030 Vision. To do this, we will pursue nine priority strategies grouped into three areas: growth, regional, and functional. Also, seeking to bring to fruition the ESG management efforts we have implemented to date, we will aim to contribute to building a sustainable world, and we will always strive to be a reassuring presence for all our stakeholders and a company sincerely appreciated by all.

*chart can be scrolled left and right.

Financial targets 14th Medium-Term
Management Plan results
15th Medium-Term
Management Plan targets
2030 targets
Revenue (Billion yen) 409.2 480 700
Operating income (Billion yen) 15.2 44 68
Operating margin 3.7% 9.2% 9.7%
ROE 1.8% 8.5% 10.0%
Shareholder returns
Basic policy Implementing sustained, stable returns unaffected by business results
Dividends Stable increase in dividend payments, targeting DOE of 3.5% or more by the end of the 15th Medium-Term Management Plan
Acquisition of treasury stock Flexible share buyback during the term of the 15th Medium-Term Management Plan amounting to cumulative total of approximately 20 billion yen and appropriate retirement of treasury stock
Management policy Realizing ESG management
Priority strategies Initiatives and progress
Growth strategies 1 Securing cabin coordination capacity
  • Creating attractive cabin products and technologies
    Active co-creation activities with companies in other industries
    Research on how people spend time inside a vehicle, focusing on next-generation vehicles
    Enhancing systems and software development capabilities
    Development of electronic control device components such as seat-integrated ECUs
    Training of advanced engineers
  • Products based on next-generation technologies chosen for use in new models, including next-generation EVs
2 Further growth in new businesses
  • Strategic acceptance of orders for target commercial rights
    Securing commercial rights for derivative models that incorporate technologies from existing ordered models
    Securing orders for advanced development on future models by proposing next-generation technologies in advance
  • Building a new plant in India in response to growth in orders for Maruti Suzuki
3 A higher share of major customers’ products
  • Receiving orders for seat trading rights through regional coordination
    Securing commercial rights in regions where no seat orders have yet been received
    Building new partnerships and deploying sales activities leveraging them
  • Growing orders received for parts commercial rights
    Steadily receiving orders for next-generation shared frames
    Enhancing development to receive orders for light-vehicle frames
    Growing orders received through enhancing our competitive strengths in parts
  • Competitive commercial rights in fiscal 2024: 90% achievement rate of orders for target models
Regional
strategies
4 V-shaped recovery in North America
  • Transformation to a corporate structure capable of adapting to environmental change
    Rigorous automation of production to stay ahead of irregular production and rising raw material and labor costs
    Strengthening cost competitiveness through optimization of specifications, materials, and processes
  • Implementation of measures to improve income, including adopting automated laser welding equipment and automated vertical warehouse facilities
5 Restructuring the China business strategy
  • New initiatives not bound by existing businesses
    Building new partnerships aiming to secure new customers
    Expanding use of local manufacturers to lower costs and reduce procurement risks
    Revamping development systems to respond to the market environment
  • Acquisition of new orders for commercial rights for components from local automakers
6 Strategic growth in new businesses in Europe
  • Further business expansion with European automakers
    Sales development with Poland as a key station
    New establishment of a trim cover production company with a view to expanding adoption of components
  • Start of production of third-row seats for new EVs of European automakers
Functional
strategies
7 Supply chain restructuring
  • Toward a sustainable supply chain
    Balancing stability and profitability through risk visualization and efforts to promote local procurement
    Working with business partners to reduce supply chain CO2 emissions volume (Scope 3)
  • Promotion of the procurement reorganization project, revision of procurement policies for each component from a comprehensive perspective
8 Enhancing efforts to develop environmental technologies
  • Evolution of environmental technologies for early commercial use
    Establishing technologies for use of biomass materials and electric furnace steel from scrap steel in products
    Resource recycling accomplished by selecting materials and designing structures with recycling in mind
  • Finalization of targets for developing technologies to use sustainable materials in products
9 Building high efficiency production structures
  • Building a production structure capable of outperforming competitors
    Continuous evolution of production lines through introduction of digital transformation and AI, and automation
    Improvement of production management efficiency through system reviews, etc.
  • Reorganization of production sites in Japan and overseas
Foundation Human resources strategies/ Financial strategies /Earning a reputation as a quality leader/Promoting and firmly establishing sustainability
Promoting further business growth

The TS TECH Group has achieved steady business growth as a global partner of the Honda Group. In order to achieve further growth, we will strive to realize our 2030 Vision not only by executing the strategy of earning “a higher share of major customers’ products” with a focus on the Honda Group, but also with the strategy of “further growth in new businesses,” for instance expanding commercial rights from new customers.

As for new business areas, although we face delays in some order plans due to customers revising their own development plans in response to demand fluctuations in the EV market, we have been successful in acquiring new commercial rights from the Suzuki Group. In addition, we have received a new order for commercial rights for parts from a local Chinese automaker, and we will further accelerate our sales activities to achieve our goals.

Acquisition of cabin coordination function
Building high efficiency production structures

We promote thorough automation of production and inspection processes to build high efficiency production structures that outperform the competition. We will further accelerate the development of manufacturing technology by advancing the construction of a new Production Technology Building at the Saitama Plant that will enable verification and validation of manufacturing technology and mass production, establishing Japan as home of a “global mother plant,” and disseminating the manufacturing technology generated there to the Group’s production sites.

At the same time, the reorganization of domestic and overseas production sites, which we have been steadily carrying out to further strengthen the competitiveness of components and improve profitability, is progressing according to plan.

  • Strengthening global mother plant functions through production reorganization at the Saitama Plant
  • Streamlining processes through integration of domestic subsidiaries
  • Commencing the manufacturing of molds and the operation of a technology development facility
  • Sharing expertise through exchange of mold production technology with H-ONE CO., LTD.
  • Consolidating production sites in Indonesia
Toward Further Business Growth

Generating Value in Four Regional Segments

The TS TECH Group organizes its business operations into four regional “segments”: Japan, China, the Americas, and the rest of Asia plus Europe. We are committed to achieving business growth by diversifying our customer base and pursuing efficiency improvements and cost reductions from a number of angles.

Generating Value in Four Regional Segments
Japan The Americas China Asia and Europe
Number of affiliates 7 16 8 12
Number of employees (People) 2,294 8,166 2,344 1,915
Motorcycle business revenue (Million yen) 4,637 304 3,151
Automobile business revenue (Million yen)* 51,557 230,891 85,254 43,509
(Seats) 48,436 204,395 82,606 39,454
(Interior products) 3,121 26,495 2,647 4,054
Revenue from other businesses (Million yen)* 14,144 8,186 76
Total (Million yen)* 70,340 239,381 85,254 46,737
Capital expenditures (Million yen) 6,370 5,082 667 1,443
  • Inter-segment transactions are eliminated by offsetting and only revenue from sales to external customers is presented.
Japan —Reorganizing Production in the Saitama District—

We are working on the reorganization of the Saitama district to build high efficiency production structures, with the aim of further advancing manufacturing technologies and enhancing the income structure. By constructing a new Production Technology Building at the Saitama Plant that will enable verification and validation of manufacturing technology and mass production, we aim to enhance technology development in the production domain. We will then disseminate the manufacturing technology generated there to the Group’s production sites, further enhancing the functions of the Saitama Plant as a global mother facility.

Japan —Reorganizing Production in the Saitama District—
The Americas —Building an Income Structure Resilient to Environmental Change—

In the Americas, while the size of the market has allowed the segment to generate the highest revenue in the Group, profitability remains a challenge due to a number of factors, including high labor and material costs. We aim to achieve a V-shaped recovery to a highly profitable structure that is resilient to changes in the environment by investing in efforts to improve the production structure. We will, for instance, introduce equipment to automate the production process and launch an automated vertical warehouse system that can respond flexibly to fluctuations in production.

The Americas —Building an Income Structure Resilient to Environmental Change—
An automated vertical warehouse facility
China —Improving the Profit Structure to Secure High Profit Margin—

In China, we are facing an unprecedented uphill battle due to the growing power of emerging EV manufacturers. In order to support the profitability of the TS TECH Group, we are engaged in efforts to acquire new customers and new commercial rights by establishing partnerships with new companies, seeking to gain a competitive edge in the increasingly crowded Chinese market. In addition, we are working to improve the income structure by pursuing production automation, optimizing staffing levels, and utilizing local manufacturers.

China —Improving the Profit Structure to Secure High Profit Margin—
Asia and Europe —Building a New Plant in India—

In response to the growth in orders for Maruti Suzuki India Limited, we are working to strengthen our production system in India. We will build a new plant on the site of the Indian plant of Imasen Electric Industrial Co., Ltd.* to expand production capacity. At the same time, we will make effective use of the space made available at the existing plant and strengthen our cost-competitiveness. In addition, our production site in Poland, which is now fully operational, will aim to grow sales further by taking advantage of its location to supply competitively priced products to European customers.

  • The TS TECH Group entered into a capital and business alliance with Imasen Electric Industrial Co., Ltd. in November 2020 with the aim of expanding sales channels and commercial rights, strengthening technology and research and development, and improving cost-competitiveness.
Asia and Europe —Building a New Plant in India—