Toyo Tire : Announcement of new Mid-Term Business Plan

February 25, 2021

To Whom it may concern

Company name	Toyo Tire Corporation
(Stock code: 5105, TSE 1st Section)
Representative	Takashi Shimizu
Representative Director, President & CEO
Contact	Takehiko Sasamori
Director, Corporate Officer
TEL: [phone]

Announcement of new Mid-Term Business Plan

Hyogo, Japan - February 25, 2021 - Toyo Tire Corporation (Headquarters: Itami City, Hyogo Prefecture; President & CEO: Takashi Shimizu) announces new Mid-Term Business Plan "Mid-Term '21 Plan" covering a period from FY2021 to FY2025.

For further details, please refer to the attached material.

End of document

New Medium-Term Business Plan

Mid-Term '21 Plan

(FY2021 - FY2025)

February 25, 2021

New Medium-Term Business Plan

"Mid-Term '21 Plan"

The TOYO TIRE Philosophy

Goals Under Mid-Term '21 Plan

The Mid-Term '17 Plan in Review

The Business Environment

Basic Policy for Mid-Term '21 Plan

Growth Strategy

Capital and Business Alliance with

Mitsubishi Corporation

Creating Management Foundation to

Support Sustainable Growth

Investment Plan and Shareholder Return

The TOYO TIRE Philosophy

Our Philosophy (Re-established in January 2017）

Company Philosophy

We will endeavor to continuously improve our products, and create value for everyone who we work with.

Our Mission

To create excitement and surprise with our products that exceed customer expectations and enriches society.

Our Vision

Our goal is to be a company that:

• - Stays one step ahead of the future through constant technological innovation;

• - Drives entrepreneurial and creative spirit through a progressive culture; and

• - Shares in the enjoyment felt by everyone involved in our activities.

  Our Fundamental Values: "The TOYO WAY"

Fairness Pride Initiative Appreciation Solidarity

Be fair and selfless in your actions, and benefit society.

Take pride in yourself, your work and company, and persevere. Show initiative in all matters and take ownership of your actions. Demonstrate compassion and appreciation for people and society. Continuously create and innovate by working together to mobilize our corporate knowledge and capabilities.

2/31

1. The Mid-Term '17 Plan in Review

Net Sales & Operating Income

(100M yen)

5,000

4,000

3,000

2,000

1,000

0

FY17

USD Euro

¥112 ¥126

FY18

FY19

FY20

FY20 target

(100M yen)

800

600

400

200

0

¥110 ¥131

¥109 ¥123

¥107 ¥122

¥110 ¥115

Lower profits due to divestment of industrial chemical product & rigid polyurethane foam businesses

Profit erosion on automobile parts

Each bar broken down by: net sales, operating income, and operating profit margin (from top)

Tire net sales (left axis)

DiverTech net sales (left axis)

Operating income (right axis)

Tire operating income

DiverTech operating income

Remedial action

New Serbian plant

Improved market/product mix

Leveraged links to tire business Reduced costs by shifting production centers

5/31

Technology & Product Strategies

Expand and Develop Products That Combine Foundational Design & Elemental Technology

PROXES SPORT

NANOENERGY

M675

OPEN COUNTRY R/T White Letter

M646

CELSIUS

OPEN COUNTRY

A/TⅢ

OBSERVE GIZ2

6/31

Brand Strategy

Sales and Market Strategy

Refine Uniqueness Through Steady Implementation of Measures in Each Market

North American Market

Market share increased to 5.3%

- 7th position in NA (as of 2019)

U.S. Plant: Phase V Expansion

- 1st step: Production started (Jan. '20)

- 2nd step: Operational (Jan. '21)

Japanese Market

Steadily captured growing demand for SUV tires

- Released high-value-added off-road tires

- Stimulated demand through strategic partnership

Restructured sales system

- Launched special project to strengthen the commercial tire service structure

European Market

Decision to establish new plant in Serbia

- Gained a foothold to build a more flexible global production system

Established R&D center in Germany

- Strengthened fundamental technologies for cutting-edge materials and high-performance tires

Supply Strategy

Increased Production Capacity After Carefully Evaluating Likelihood of Success

U.S. Plant

Phase V Expansion:

Production started

• 1st step: 1.2M units* (Apr. '19～)

• 2nd step: 0.55M units** (Jan. '21～)

*Quantity based upon Passenger/Light Truck tires produced **Quantity based uponWLTR tires produced

Malaysian Plant

Phase II Expansion: Production started 1st step: 2.4M units* (Oct. '19～)

*Quantity based upon Passenger/Light Truck tires produced

Truck and Bus Tires Increased capacity 0.2M units (Sept. '20～)

9/31

DiverTech Business; Corporate Infrastructure

DiverTech Business

Established framework for growth of mobility and other businesses

Corporate Infrastructure

Introduced function-based organizational structure

Strengthened quality of management foundation

• - Implemented measures to promulgate new Company Philosophy across Group, stimulated cross-sectional internal communication

• - Strengthened corporate governance through organizational changes, establishment of Special Committee, personnel from MC

2. The Business Environment

Macro Trends Amidst a Period of Unprecedented Turbulence

Significant changes in consumer behavior in the

post-COVID-19 era

Home bound, budget-minded, avoidingperson-to-person contact EC/cashless purchases, changes in requested services

Aligning of social & environmental interests with economic interests accelerated

• • Prioritization of employee/customer satisfaction increased

• • Accelerated trend to align public interest with economic interests through customer-producer collaboration

Increase in geopolitical risks

• • Decoupling trend continued, including competition for leadership between U.S. and China

• • Economic disparities widening due to COVID-19 also aggravate populism

Evolution and accelerated introduction of labor-saving technology

• • Digital investment accelerated to make up for slow growth in worker headcount

• • Advanced roles for humans as quality/quantity of data increased

The global economic outlook remains uncertain, as nations struggle to reopen. Any recovery could be intermittent and uneven across the world.

U.S.

Democratic control of gov't should result in further pump-priming. Eyeing interest-rate movements

Return to the Paris Accord on Climate Change. Investing in the environment/infrastructure while tightening environmental regulations

Demand has not returned to pre-COVID-19 levels Shift to EVs accelerated. Demand for SUVs and pick-up trucks growing due to the popularity of outdoor leisure activities

Punitive duties on Chinese imports maintained Anti-dumping tax imposed on imports from four Asian countries

Japan

Difficulty with COVID-19 counter-measures and reviving economy

Accelerating measures to reduce greenhouse gas emissions to virtually zero→ All new cars will be EVs* in the 2030s

Shrinking/aging population, younger generation turning away from cars → Demand declining gradually, "The strongalways win in the end"

⇔ "Kei" cars and minivan sales strong, SUVs increasing

Abnormal weather patterns raising interest in performance of cars

Outdoor activities remain popular, "Dressing- up" trend increasing

Europe

Eyeing where "EU without the U.K." will head in terms of politics, economy, and society

Tightening regulations and pursuit of Green Deal investments leading to a circular economy

The ratio of EVs increasing with government subsidies. Development of new technology and next-generation vehicles continue

Decreasing demand stemming from pandemic ⇔ Supply impacted by plant shutdown, etc

*EVs (electric vehicles): HV (hybrid), PHEV (plug-in hybrid), EV (electric), FCV (fuel cell), LSEV (low-speed)

Market Trends in Automotive & Tire Business

(Company survey)

2018

2020

2025

2018

2020

2025

P乗as用sen車ger carsSSUUVVs

MPVVs*

% of EVs in newcar sales

43%

20%

2%

Pickup trucks ピックアップ

Sports スポーツ

Vans バン

50% 22%

2018

Passenger

乗用車MPVVsSUVVs cars

Sports スポーツ

Vans バン

Passenger乗用車MPVscarsMPVSUVVsSスpポorーts ツVバaンns

32%

% of EVs in new car sales

43%

2020

2025

2018

2020

2025

2018

2020

2025

2018

2020

2025

3. Basic Policy for Mid-Term '21 Plan

Mid-Term '21 Plan Inherits from Mid-Term '17 Plan

The New Toyo Tire: Maximizing Enterprise Value through New Global Strategy

[R&D]

Building a foundation for advancing global technological competitiveness

[Corporate]

Realized effective coordination among Production, R&D, Sales Established management foundation that drives the growth strategy and strengthens human resources

Strengthened business administration foundation & support functions Transformed corporate governance & compliance structures

Strengthening areas of expertise

Demonstrating uniqueness Shifting to a function-based organization

Mid-Term '21 Plan Key Performance Indicators

Established Financial Indicators Emphasizing Efficiency Adopted Financial Policy Balancing Growth And Return

* Tire product categories that embody Toyo Tire's "strengths". E.g., new products, core products, and differentiated products. These are essential to achieving operating income (value and %) targets

Target weight of NA region against total

4. Growth Strategy

R&D

Regions (NA, Europe, Japan, Asia)

Original Equipment Tires

Production and Supply

Our Initiatives for the Solutions

Business

Offer "differentiated products" by strengthening unique technology developed through collaboration between the 3 R&D centers in Japan, the U.S., and Europe

*1 Simcenter™, STAR-CCM+™, Software STAR-CCM+, and STAR-CD are trademarks or registered trademarks of SiemensIndustry Software Computational DynamicsLtd. All other trademarksand registered trademarksor service marks belong to respective holders.

*2 For calculation, Dassault SystèmsK.K.'s Abaquswas used.

Offer early adopters our "differentiated products"

that incorporate advanced next-generation mobility solutions

In response to rapid rise of EVs develop applicable technologies

Characteristics of EVs

Growth Strategy: North America

Continuous Focus On Introducing Differentiated Products With Enhanced Strengths

N. American sales

Growth Strategy: Europe, Japan, Asia

Growth Strategy: Original Equipment Tires

Contributing To Progress in Mobility Through A Combination Of Tires and Automotive Components

Link between tires and

Growth Strategy: Production and Supply

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Serbian Plant as Most Cost-competitive Production Center

U.S. Plant

Phase V Expansion: Increased output 2nd step: 0.55M units* (Jan., '21～)

Wide light truck tires

Further bolstering supply capacity

Concentrating resources in Malaysia

Enhancing its function as a global supply hub

Ramping up capacity for priority products to meet demand in China and Japan

Establishing an efficient production system by visualizing/analyzing cross-sectional production/quality data

Solutions Business Initiatives

Developing a Solutions Business to Offer New Value

Using Our Proprietary Sensing Technology

5. Capital and Business

Alliance with Mitsubishi Corporation

Effect of the Capital & Business Alliance with Mitsubishi Corporation

All numbers represent an increase from corresponding numbers in FY18 on a consolidated operating income basis

•Eliminated MC's export commission •Dissolved all sales

+1.4B yen

JVs; make them wholly-owned Toyo subsidiaries

• • Reduced insurance premiums, etc.

[Sales] Full-scale sales promotion of industrial tires, etc. to MC's customers

[Logistics] Further reduced costs by reorganizing sales/logistics sites in Japan

Delivering SUV tires as original equipment Expanding sales channels for service tires (retail, etc.)

The alliance will prioritize markets where we can best promote and achieve a high return for our differentiated products

Focusing on projects that could drive growth, such as EV-related technology and digital solutions

Impact

+6.0B yen

Kuwana Plant: Ramping up capacity for truck/bus tires

(Started production in Sept. '20 → Full-operation in Jan. '21)

U.S. Plant: Phase V Step 2

(Started production in Jan. '21 → Full-operation in Sep. '21)

Serbian Plant: New facility to start operation in Apr. '22 (Full-operation in 4Q/23)

Impact

+4.0B yenStrengthen corporate

Accelerating Implementation Of Key Projects; Solidifying Management Foundation

Personnel from the Two Companies Working Together

6. Creating Management Foundation to

Support Sustainable Growth

Creating Management Foundation to Support Sustainable Growth

Pursuing our Philosophy; Towards Strengthening our Business Management Infrastructure

Realizing value creation and sustainable growth by offering solutions to social issues

Long-term perspective

Integrated with business

Reconfiguring digital/ICT infrastructure

Strengthening the foundation for Digital Innovation

• ◼ Developing a digital foundation to achieve higher profitability

  - Upgrading ERP, accelerating the

  PDCA cycle

• ◼ Strengthening data governance

• ◼ Realizing diverse work styles

Rebuilding the organization, system and infrastructure Programs for the organization and Human Resources

• ◼ Revitalizing the organization with new HR systems

  - Diverse staff collaborating organically

  - Programs for higher job satisfaction and empowerment

  ("function-based recruitment", Diversity, 360- degree evaluation)

• ◼ Training system focused on individuality, quality, and competencies

Enhancing our efficiency and resilienceto changes in the business environment

• • Improving asset efficiency through careful evaluation of business assets and investments

• • Achieving and maintaining a healthy level of financial leverage

Emphasis on cash flows

• • Managing funds globally

• • Generating more cash and speeding up the cash cycle

Role of Digital Transformation (DX)

to Streamline the Management Foundation

Supporting Change to the Corporate Culture and Realizing Steady Growth

2. Improving profitability

Data-driven mgt., higher operational efficiency

1. Reinforcing mgt.

foundation

Rebuilding systems, developing digital foundation

Growth strategies

7. Investment Plan and

Shareholder Return

Investment Plan and Shareholder Return

Investment Plan and Capital Allocation

Basic Investment Policy and Cash Flow

Allocation of Mid-Term '21 Plan

Investments contribute to growth Control interest-bearing debts

Investments needed to achieve future growth over the medium to long term Digital-related investment Investment in the markets R&D investments in new fields

Investments needed to maintain competitiveness of core businesses Investments to maintain sustainable growth of existing businesses and to improve productivity

Investments to rebuild management foundationContinue stable shareholder returns linked to annual performance

・ Maintain proper balance between investments (to promote future growth) and shareholder dividends

- Pursue performance-linked, stable returns

Earnings plans, business plans, and other information contained in this material are based solely on the company's current assumptions of the economic environment and other factors that may occur in the future. Actual performance, etc. may differ materially from these statements due to various factors. As such, these statements are not the company's guarantees of its future performance.