Tokai Rika’s Growth Strategy
We have achieved the FY 2025 targets set out in our mid-term management plan announced in May 2022 ahead of schedule.
Our growth strategy involves advancing and deepening our “technologies” and “track record” cultivated in the automotive and mobility domains to contribute to safe, secure, and abundant mobility lifestyles. Simultaneously, we are expanding our business domains beyond automotive and mobility to contribute to a more enriched life and society, driving forward these initiatives.
The primary driver for achieving the FY 2025 targets ahead of schedule was the performance of existing businesses and products in the automotive and mobility sector. However, the promotion of our forward-looking growth strategy has also fostered a culture of challenge and innovation. This cultural transformation, while not directly quantifiable, is evident in our pursuit of new products and ventures.
2022 Mid-term Management Plan: Review
| 2022 Mid-term Management Plan FY 2025 Target |
FY 2024 Results | |
|---|---|---|
| Consolidated net sales | 520.0 billion yen | 617.6 billion yen |
| Operating profit | 25.0 billion yen | 35.4 billion yen |
| Operating profit ratio | 4.8% | 5.7% |
| ROE | 8% | 8.8% |
The FY 2025 target was achieved one year ahead of schedule
Growth Strategy
Management Base
- DX (TRX)* promotion
- Carbon neutrality promotion and factory restructuring
- Employee satisfaction management (DE&I, health management)
- Compliance and governance
* Our proprietary DX designation, which incorporates the Toyota Production System (TPS) philosophy into conventional DX
Momentum for reform and taking on challenges is building
TRV 2030 targets
| FY 2025 plan | FY 2030 targets | |
|---|---|---|
| Consolidated net sales | 580.0 billion yen | 700.0 billion yen |
| Operating profit | 3.4% | 7% |
| ROE | 4.4% | 10% |
Key Issues
Growth Strategy
- Raising the profit of existing areas and products
- Creating next-generation products for 2030 and beyond
- Materialization of efforts in new fields
Management Base
- Maintaining Tokai Rika’s quality-based appeal
- Promotion of DX (TRX) (= transformation of workflows and outputs)
- Supply chain innovation
Following the early achievement of the FY 2025 targets set in the previous mid-term management plan, we have formulated a new mid-term management plan (TRV 2030), setting the FY 2030 targets as: 700 billion yen in sales, 7% operating profit margin, and 10% capital efficiency/ROE.
To achieve these targets, we will make upfront investments. As a result, profitability in the first half of the TRV 2030 period will be lower compared to FY 2024. However, starting in the second half, we will realize the results of these upfront investments and other initiatives to achieve our goals.
To reach these targets, we will continue our growth strategy: creating new value in the automotive and mobility sectors based on our accumulated technologies and achievements, while also challenging ourselves in areas beyond these traditional domains.
Furthermore, we will focus more intensely than ever on “materializing” the results of our heightened drive to take on new challenges.
Focusing on the realization of tangible results, we aim to achieve sustainable businesses and enterprises.
TRV 2030 Overview
Some of our existing businesses and products face limited market growth potential due to changes in automobiles.
However, these products remain essential for vehicles, and someone must continue developing and supplying them.
True to our founding spirit of “Do what others won’t do,” we will steadfastly continue developing and supplying existing products while striving to ensure their value is properly recognized and to enhance profitability.
Furthermore, we will accelerate the planning, development, and proposal of next-generation products aligned with automotive and mobility changes, aiming to expand their adoption.
We will also accelerate our challenges in areas beyond automobiles and mobility, aiming to materialize the results. To drive these growth strategies, we will vigorously advance the operational challenges of “quality,” “DX (TRX),” and “supply chain reform.”
As the foundation for this, we will intensify our efforts in developing people and workplaces, including motivation and culture, and in our corporate responsibilities: Environmental (E), Social (S), and Governance (G) initiatives.
Growth Strategy
1 Higher profit (suitable profitability)
Existing products (automotive/mobility)
- Return to Physical Switches
U.S. and Chinese BEV manufacturers are introducing vehicles with interiors that integrate switches into displays. As a result, safety and operability concerns are being conveyed to users, prompting a reevaluation of switches in programs like Euro NCAP, the European new car safety assessment program, and China's national standard specifications (GB).
2 Secure market share and launch new products
Next-generation products (automotive/mobility)
- Variations of Hidden Light Effect
- Horizontal expansion of Digitalkey technology
- Seatbelt evolution driven by automotive transformation
While our products' core functions—occupant operation/input, entry, and safety restraint—remain unchanged, we continuously evolve them to adapt to evolving vehicles and interiors.
3 Establish and scale up businesses
New fields/businesses
- Scale existing products and services toward target achievement
- Strengthen promotion systems for projects under business feasibility study: internal companies and co-creation teams
A major achievement is the heightened internal momentum to challenge beyond cars and mobility.
Moving forward, we will ensure this momentum does not stagnate and transition into a phase of tangible results and scaling.
