Hino Motors Mid-Term Corporate Plan (FY2013-2015)

1/23 Hino Motors Mid-Term Corporate Plan (FY2013-2015) Yoshio Shirai President, Member of The Board Hino Motors, Ltd. April 26, 2012 2/23 Hino Motors Mid-Term Corporate Plan (FY2013-2015) 1. Introduction 2. Hino's Strategies 3. Hino's Strategies: Production 4. Hino's Strategies: Sales 5. Hino's Strategies: Environmental Technologies 6. Mid-term Corporate Targets 3/23 ForecastsForecastsForecasts andandand InsiderInsiderInsider TradingTradingTrading This material includes forward-looking statements regarding projections, targets, plans, and strategies of Hino Motors (including its consolidated subsidiaries). These forward-looking statements are based on determinations and assumptions made from information currently available to Hino Motors, and may vary considerably from actual performance or operations going forward due to uncertainties inherent in these determinations and assumptions, as well as due to the possibility of variations caused by changes in business operations, circumstances, and other factors. Reminders regarding insider trading: Investors who receive nonpublic information on important facts directly from a company (primary information recipients) are prohibited from selling or buying stocks prior to this information becoming "public" (Article 166 of the Financial Instruments and Exchange Act). According to the enforcement ordinance of this law, information is deemed to have been made "public" once 12 hours have elapsed since the company discloses this information to two or more press organizations, or when the information, after a notification to the securities exchange, is listed by electronic means (TDnet's Timely Disclosure and Viewing Service) as provided by Cabinet Office Ordinance. 1. Introduction (business climate) 4/23 1) Global Commercial Vehicle Market Growth is strong in the GVW 3.5t or greater segment. GlobalGlobal commercialcommercial 848 GVW ’07⇒’15 Competitors Toyota group vehiclevehicle marketmarket (Unit:(Unit: 10,00010,000 vehicles)vehicles) (Global Insight forecast) Over 1.4 706 673 213 15t fold H H i i n n o o 192 1.2 b 157 6-15t b 120 r fold r a a n n 600 d 104 95 d 500 1.5 3.5-6t 440 268 fold 179 217 T T o o y y o o t t a 1.1 a 2-3.5t b b 246 r 234 fold r a 202 a n n d d Total 1.3 fold '07 '11 '15 Total 1.3 fold Thousands of vehicles 1. Introduction (business climate) (business Introduction 1. 100 200 300 400 500 600 2) Vehicle sales performance by manufacturer performance by sales 2) Vehicle (GVW3.5t or greater) 【 0 Vehicle sales of primary group brands by region (Top 15 in 2010) 601 BEIJING 513 DONGFENG 358 FAW 57 85 46 58 DAIMLER 249 ANHUI ＪＩＡＮＧＨＵＡＩ 153 51 FORD 214 TATA 58 42 ISUZU 200 ＣＨＯＮＧＱＩＮＧ 170 ＣＨＡＮＧＡＮ 63 54 VW 44 VOLVO 60 40 HINO 】 111 ＳＨＡＡＮＸＩ 89 (Source: Motors) Hino 5/23 GM WesternEurope Japan EasternEurope Asia LatinAmerica Africa Oceania China India Russia Brazil Middle East Middle NorthAmerica 1. Introduction (business climate) 6/23 3) Growth by Regional Market (GVW 3.5t or greater) Growth in emerging economies, particularly in ASEAN, is strong. ChangesChanges inin regionalregional marketsmarkets Hino’sHino’s MarketMarket PrioritiesPriorities (2007 = 100) (2007 = 100) 170 Steadily move forward Chinese manufacturers' market Steadily move forward (Global Insight forecast) ChinaChina Chinese manufacturers' market throughthrough jointjoint ventures.ventures. 160 160 IndianIndian andand EuropeanEuropean manufacturers'manufacturers' IndiaIndia marketmarket DetermineDetermine oursours actionsactions onon a case-by-case basis. 150 150 BrazilBrazil EuropeanEuropean manufacturers'manufacturers' marketmarket a case-by-case basis. Japanese manufacturers are 140 Australia,Australia, Japanese manufacturers are Hino’sHino’s MostMost importantimportant strong. Competition with Asia, Latin strong. Competition with markets: Asia, Latin manufacturers from other markets: America, manufacturers from other Concentration of America, countriescountries willwill intensifyintensify movingmoving Concentration of and Africa resources and Africa forward.forward. resources 110 110 ImplementImplement operationsoperations inin 100 Russia EuropeanEuropean manufacturers'manufacturers' marketmarket Russia thethe FarFar East.East. NorthNorth NorthNorth AmericanAmerican (European)(European) EstablishEstablish businessbusiness AmericaAmerica manufacturers'manufacturers' marketmarket foundations.foundations. 90 EuropeanEuropean manufacturers'manufacturers' DetermineDetermine ourour actionsactions onon EuropeEurope 70 marketmarket aa case-by-casecase-by-case basis.basis. Japanese manufacturers' Hino’sHino’s homehome market:market: 60 Japanese manufacturers' Maximize business JapanJapan market Maximize business 60 market profits.profits. '07 '11 '15 1. Introduction (business climate) 7/23 4) Shifts in Competitive Climate — Chinese and Korean Makes Expand into ASEAN — Light-duty trucks Heavy- and medium- Pakistan duty trucks Beijing Foton FAW and Daewoo Chinese and Korean manufacturers are increasing their sales in emerging markets. （％）（％） * Market share positions have reversed in 80 80 Hino日野 Chinese中国車 makes Pakistan (light-duty) and Vietnam (heavy- 60 60 50% 42% 40 40 中国/韓国車Chinese and and medium-duty). 日野 32% Korean makes 23% 20Hino 20 ０７０８０９１０(FY) ０７０８０９１０ (FY) 上海日野ＨＰＭＬ國瑞ＨＭＶ The competition is also entering Hino's foundational markets. ＰＨＩＨＭＭＴ Heavy- and medium-duty Light-duty trucks Vietnam trucks （ＡＳＳＢ） <Thailand> Beijing Foton Beijing Foton and Korean-Chinese heavy-duty truck CNG was Hyundai ＨＭＭＩ launched. (2010 sales: 260 vehicles) （ＴＳＡＭ） <Indonesia> （％）（％） Chinese and The number of sales talks is on the rise 80中国車 80 中国/韓国車 81% Chinese makes 77% Korean makes 60 60 where we are competing against Chinese 40 40 Hino日野 makes.(from 2009 onward) Hino日野 204% 20 14% ０７０８０９１０(FY) ０７０８０９１０ (FY) 2. Hino's Strategies 8/23 1) World Market Classification and Positioning Establish a solid foundation through concentrated allocation of corporate resources. <<Markets targeted for sales growth>> China and Russia (Far East) <<Individual markets>> North America <<Markets to develop>> <<Foundation markets>> - Middle East - Africa - Japan - Australia and Asia <<Markets to develop>> ◆ Increase vehicle (Thailand, Indonesia, Malaysia) sales Latin America ◆ Further strengthen our (ANCOM region) pillars of profitability. ◆ Develop into Hino's next foundation market. 2. Hino's Strategies 9/23 2) Provide Best Fit Products Provide products and services that meet customers' expectations. —Reform our development, production, and service structure — Provide products and services that are suited to specific use; “Heavy-duty trucks for mining” Provide products that meet specific market needs; Light-duty trucks for emerging markets 2. Hino's Strategies 10/23 3) Hino Vehicle Sales Forecasts (FY2013-2015) Vehicle sales are expected to grow dramatically from growth in the commercial vehicle markets of emerging economies. [Thousands of vehicles] Overseas Japan FY’08 FY’09 FY’10 FY’11 FY’12 FY’13 FY’14 FY’15 ActualActual salessales PlannedPlanned salessales 2. Hino's Strategies 11/23 4) Individual Strategies for Development, Production, and Sales Reform our business structure from development to production and sales — Enhance our superiority in foundation markets by improving our non-price competitiveness — Development Hino's Environmental Production Strategies technologies Sales 3. Hino's Strategies: Production 12/23 1) Visions for Establishing Core Regional Production Centers Establish production and supply structures that can accommodate increases in overseas sales. ・ Increase local ・ Increase capacities ・ Modularization ・ Bridge production procurement rates Asia: Establish core overseas centers (General policy: Products needed locally are to be produced locally) ExpandExpand ourour productionproduction centerscenters inin IndonesiaIndonesia andand Thailand.Thailand. (Increase(Increase thethe capacitycapacity ofof existingexisting lines.lines. BuildBuild newnew lineslines forfor modulemodule fabricationfabrication andand assembly.)assembly.) Japan: Production for Japan and other countries. Support capacity increases in Asia. Reinforce our supply structures by reorganizing processes in factories in Japan. ・Vehicles = Koga Plant (Build new plant) ・Units = Nitta Plant (Consider expansion) 3. Hino's Strategies: Production 13/23 2) Overview of vehicle and unit production and supply structures Vehicles:Vehicles: ProduceProduce inin closeclose proximityproximity toto marketsmarkets (Unit:(Unit: 1,0001,000 vehicles,vehicles, basedbased onon assembly)assembly) Japan Thailand Indonesia Other markets Total FY’12 FY’16 FY’12 FY’16 FY’12 FY’16 FY’12 FY’16 FY’12 FY’16 1.4 fold 1.7 fold 1.7 fold 2.5 fold 292 107 177 78 82 70 33 47 39 13 Engines:Engines: CapacityCapacity increasesincreases toto bebe implementedimplemented primarilyprimarily locallylocally (Unit:(Unit: 1,0001,000 engines,engines, basedbased onon machiningmachining fabrication)fabrication) Japan Thailand Indonesia Other markets Total FY’12 FY’16 FY’12 FY’16 FY’12 FY’16 FY’12 FY’16 FY’12 FY’16 1.1 fold Mid- Small sized Mutual engines 1.7 fold engines supply 344 195 214 203 74 30 26 0 0 8 3. Hino's Strategies: Production 14/23 3) Establish Global Production Structure: Visions and Roles of Different Plants Japan: Vehicle-related (heavy- and medium-duty) production to be consolidated at the Koga Plant, and unit-related production to be consolidated at the Nitta Plant. Overseas: Establish core regional production centers in Thailand and Indonesia. Visions Roles ➣ Manufacturing

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