TQM^*1 Initiatives for Enhancing Corporate Structure

Based on the basic principles of TQM, we are implementing TQM initiatives throughout Toyoda Gosei Group to enhance product and work quality and human and organizational vitality to create a flexible and strong corporate structure. In addition to traditional improvement initiatives such as the Workplace Management Improvement Activities and global Small Group Activities, we have established a new TQM philosophy based on the concept of anticipating change and changing how we do work, and are taking action accordingly. We are also working on fostering a corporate culture and developing the kind of people that will drive reforms and innovation in response to an evolving business environment.

• *1 Total Quality Management

■TQM Activities

Hierarchy	Initiatives
Managers	Workplace Management Improvement Activities
Staff/technical workers	Small Group Activities (team-based improvement activities) Activities to enhance practical skills in SQC*2/ML*3 *2 SQC: Statistical Quality Control *3 ML: Machine Learning Value-creating Community Activities
Skilled roles	Small Group Activities (QC Circle Activity)

Establishing a Quality Mindset of Customer First and Quality First

In response to the Global Safety and Quality Improvement Declaration issued by the president, all employees make “My Pledge” to put Customer First and Quality First in their respective positions and jobs, and regularly reflecting on their own actions while utilizing the Quality Learning Center as an educational venue for instilling a quality mindset.

Greater Adaptation of Global Small Group Activities

We are promoting the invigoration of the Small Group Activities, with a focus on China and the ASEAN region. We have resumed the TG Global Small Group Activities Convention after a six-year hiatus to promote the exchange of ideas and know-how.

Ensuring Manufacturing Quality and Continuous Improvement Initiatives

In order to deliver safe and reliable products to our customers around the world, we are working toward self-contained processes^*4, particularly in the production process of safety parts, which are directly related to the basic performance (driving, turning, stopping) and safety of vehicles.

Furthermore, to create manufacturing sites that are resilient in times of change, we are implementing Quality Pledge Activities led primarily by manufacturing section managers. These activities focus on three pillars: Developing People, Developing Processes, and Preventing Recurrences. Once the targets are achieved, section managers issue a “Quality Pledge” to the president and the chief of the corresponding business unit.

• *4 Based on the philosophy of “Quality is built into the process,” we will not produce or pass on defective products in any of our processes.

• *5 2S1Y: Acronym based on the Japanese initials for sorting,
  setting in order, and keeping items off the floor.

On-site confirmation meeting by the president and the chief of the business unit

Strengthened Governance for Laws and Regulations

To strengthen independence and auditory functions in regulatory certification work, this work has been transferred from the Research and Development Headquarters to the Quality Assurance Headquarters, where a new Regulatory Management Division was established in June 2025. To convey the importance of laws and regulations to all global employees, we are creating mechanisms for regulatory education and compliance and strengthening governance. Top managers also visit workplaces in person and listen directly to employees about problems in their work, and continuously promote improvement activities.

Quality Assurance System Adapted to New Technologies and Newly-Developed Products

Toyoda Gosei has acquired ISO9001/IATF16949 certification and established a quality management system. We are also building quality into new products using an “initial-stage control system” that checks the degree of completeness in each process in planning, design, and production. Efforts are made to continuously improve the initial-stage control system to enable flexible responses to new technologies and products that are being transformed by concepts such as CASE^*6 or CN/CE^*7, new business fields such as software or experience-driven business, collaboration with new customers and alliance partners, and rapid development.

• *6 CASE: Connected, Autonomous, Shared, and Electric
• *7 CN/CE: Carbon Neutral / Circular Economy