Toyota's Global Strategy
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ToyotaToyotaToyota’s’’ss GlobalGlobal StrategyStrategy ———MovingMovingMoving towardtoward GlobalGlobal MotorizationMotorizationMotorization——— AprilApril 16,16, 20032003 ToyotaToyota MotorMotor CorporationCorporation 1 Cautionary Statement with Respect to Forward-Looking Statements This presentation contains forward-looking statements that reflect Toyota’s plans and expectations. These forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause Toyota’s actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. These factors include: (i) changes in economic conditions affecting, and the competitive environment in, the automotive markets in Japan, North America, Europe and other markets in which Toyota operates; (ii) fluctuations in currency exchange rates, particularly with respect to the value of the Japanese yen, the U.S. dollar, the euro and the British pound; (iii) Toyota’s ability to realize production efficiencies and to implement capital expenditures at the levels and times planned by management; (iv) changes in the laws, regulations and government policies affecting Toyota’s automotive operations, particularly laws, regulations and policies relating to environmental protection, vehicle emissions, vehicle fuel economy and vehicle safety, as well as changes in laws, regulations and government policies affecting Toyota’s other operations, including the outcome of future litigation and other legal proceedings; (v) political instability in the markets in which Toyota operates; (vi) Toyota’s ability to timely develop and achieve market acceptance of new products; and (vii) fuel shortages or interruptions in transportation systems, labor strikes, work stoppages or other interruptions to, or difficulties in, the employment of labor in the major markets where Toyota purchases materials, components and supplies for the production of its products or where its products are produced, distributed or sold. A discussion of these and other factors which may affect Toyota’s actual results, performance, achievements or financial position is contained in the “Operating and Financial Review and Prospects” and “Information on the Company” sections and elsewhere in Toyota’s annual report on Form 20-F, which is on file with the United States Securities and Exchange Commission. 2 FujioFujio ChoCho PresidentPresident ToyotaToyota MotorMotor CorporationCorporation 3 I.I. GlobalGlobal ManufacturingManufacturing && MarketingMarketing inin 20022002 Growth in Production Volume Global output Overseas output (Millions(Millions ofof units)units) (Millions(Millions ofof units)units) 33 yearsyears 6.0 20022002 GlobalGlobal (million(million units)units) OutputOutput :: 6.316.31** SalesSales ::6.176.17** 13 years 5.0 * includes Toyota/Lexus, Daihatsu and Hino brands. 2.17 2.0 1.62 Annual sales surpass 4.0 1 million units 1.0 0.45 3.0 0 1986 1999 2002 Corolla Overseas output Global output 4 II.II. 20102010 GlobalGlobal VisionVision Major change in the global economic environment economic environment <Expected society> TakingTaking onon thethe challengeschallenges forfor changechange Global motorization Achieve global Market & population growth production & in the US * Regional strategies – in the US sales of * Regional strategies – 6 million units North America, Europe, Rise of markets in Eastern & Central Asia, China and Japan Europe and in Russia * Technological innovation Strong growth of Asian markets 2002 2010s 5 III.III. RegionalRegional StrategyStrategy North American Market (1): Creating market through new product launches 2002 sales: (Millions(Millions of units) 1.91 million units Luxury SUVs Full-sized trucks 15 Lexus GX470 Lexus RX330 Tundra Double Commercial vehicle Cab 10 (light truck) market Entry-level vehicle for young drivers Passenger vehicle market No. 1 Scion 5 inin 20022002 passenger vehicle sales Corolla Camry xA xB 0 1990 1995 2000 2002 <US market> 6 III.III. RegionalRegional StrategyStrategy North American Market (2): Production growth centered on light truck manufacturing #3 Canada ⇒⇒First Lexus production base #4 Indiana #1 NUMMI #2 Kentucky #5 Mexico #6 Texas 1.65 ⇒⇒“Made-in-Texas” trucks Texas plant <Manufacturing capacity (Tundra)(Tundra) expansion plan> 1.48 1.50 (Millions(Millions ofof units)units) 1.40 Mexico plant Canada plant (Tacoma)(Tacoma) IndianaIndiana plantplant expansionexpansion (Sienna)(Sienna) expansion (RX330)(RX330) Present Fall 2003 2005 2006 7 III.III. RegionalRegional StrategyStrategy European Market: Integrated manufacturing & marketing 2002 sales: 760,000 MarketingMarketing units organizationorganization restructuringrestructuring startingstarting AprilApril 20032003 Action in United the wider Kingdom EU market France Czech Republic New “Avensis” launched inin MarchMarch 20032003 as upper core model ⇒⇒First Japan market Turkey launchlaunch ofof UK-madeUK-made vehicle in fall 2003 Toyota Motor Europe (TME) Leading marketing companies Manufacturing plants 8 III.III. RegionalRegional StrategyStrategy Asian Market: Manufacturing & export base for pickups/multipurpose vehicles ⇒⇒Development of global manufacturing base and mutual distribution network (IMV Project starts in 2004) Thailand: Global manufacturing base Other Asian nations: Manufacturing To more than 80 nations/regions bases for engines & main components Japan South Africa & Argentina: Intra-regionalIntra-regional IndiaIndia manufacturing bases To Europe & Africa Thailand Others To South America Philippines IndonesiaIndonesia South Africa Argentina : Pickups & multipurpose vehicles : Engines & main components 9 III.III. RegionalRegional StrategyStrategy Chinese Market: Manufacturing & marketing to be strengthened in response to market growth Luxury Large & SUV Luxury sedan Crown Land Cruiser/Prado Establish full product lineup Compact Compact Vios Establish Daihatsu Toyota brand image Product lineup (Compact) Corolla Aggressive product launches 50,000 units/year Several hundred 30,000 units/year thousand units/year capacity 25,000 units →115,000 units/year Production 50,000 units/year 2002 2003 2004 2005 2006 2007 2008 2009 2010 10 III.III. RegionalRegional StrategyStrategy Japanese Market: Introduction of Lexus & Reorganization of Sales Channel ⇒⇒Preparations for future changes (in market structure & customer values) After reorganization Lexus Development of new Lexus dealership (new) network in 2005 (150 dealers) Toyota brand 11 III.III. RegionalRegional StrategyStrategy Japanese Market: Introduction of Lexus & Reorganization of Sales Channel ⇒⇒Preparations for future changes (in market structure & customer values) Present After reorganization Toyota brand Lexus Development of new Lexus dealership network in 2005 (150 dealers) (5 channels) (new) Vista Consolidation of Netz & Vista Toyota brand Netz networks in spring 2004 →Foothold in new market segment Netz (4 channels) Luxury vehicle channel for Toyota Toyota the Toyota brand Leading channel for the medium- Toyopet Toyopet size car market Corolla Largest volume-sales channel, Corolla centering on compact vehicles 12 IV.IV. TechnologyTechnology StrategyStrategy (1)(1) Development of a wide range of technologies and products with focus on market creation <Technology development> <Marketing> Nanotechnology Material technology Assessing Energy customer needs technologies technologies Leading-edge Leading-edge Leading-edge Leading-edge Biotechnology technology Engine Body Electronics Proposal of Existing Existing Transmission Chassis Existing business vision technologies technologies technologies technologies Environment Safety Next-generation IT Next-generation Products focused on market creation “Comfort ” “Kindness” “Excitement” 13 IV.IV. TechnologyTechnology StrategyStrategy (2)(2) HarmonizingHarmonizing “Ecology”“Ecology” with with “Emotion”“Emotion” EcologyEcology EmotionEmotion 14 V.V. ConclusionConclusion Global-scale motorization Rise of markets Market & in Eastern & Strong growth of population Central Europe Asian markets growth in the US and in Russia Addressing challenges for change — toward further growth 15 ToyotaToyotaToyota’s’’ss GlobalGlobal StrategyStrategy ———MovingMovingMoving towardtoward GlobalGlobal MotorizationMotorizationMotorization——— AprilApril 16,16, 20032003 ToyotaToyota MotorMotor CorporationCorporation 16 ToyotaToyota’sToyota’’ss FinancialFinancial StrategyStrategy AprilApril 16,16, 20032003 ToyotaToyota MotorMotor CorporationCorporation 1 RyujiRyuji ArakiAraki ExecutiveExecutive ViceVice PresidentPresident ToyotaToyota MotorMotor CorporationCorporation 2 I.I. BusinessBusiness PerformancePerformance Operating income by market segment (Billions of yen) FY1998 FY2002 FY2003/9mos. (April,1997-March,1998) (April,2001-March,2002) (April-Dec.,2002) Japan 649 870 813 North America 175 265 268 Europe -2 -12 5 Asia & other regions 8 19 41 Consolidated -12 -19 -17 elimination Consolidated total 818 1,123 1,110 (Japan GAAP) 3 II.II. ProfitProfit EarningsEarnings Growth and targets in operating income ratio & ROE 9 (%) 7.4% 9.1% 9% 6.5% 6.1% 6% (Billions 6 of yen) ~ Operating Operating income ratio ~ ● 11.3% 1,000 (%) 10 ● 8.5% 10% ● 6.8% 500 ROE 6.3% ● 5.8% ● ● 5 0 FY1999 FY2000 FY2001 FY2002 April-Dec.,2002 Target (Japan GAAP) Operating income Operating income ratio ROE 4 III.III. DividendDividend PaymentsPayments && ShareShare