Global Economic Implications of The Toyota Motor Company Eric, Charles, Molly, Colby, Gene

Agenda Company Overview Net Revenue / Operating Income Financial Services Operations Other Areas of Business Business In Other Countries Competition Product Failure Recovery's New Technology

Company Overview Public Company Industry – Automotive – Robotics – Financial Services Founded: August 28, 1937 Founder: Kiichiro Toyoda Key People – Fujio Cho (Chairman) – Akio Toyoda (President and CEO) Employees: 324,747 Divisions – Lexus – Scion

Net Revenue / Operating Income Japan – 2010 Domestic sales increase by 11.2% (218,000) to 2.16 million units. – Net Revenues declined 7.9% (966.4 billion) to 11.2 trillion – Cost-reduction efforts / lower fixed costs = $12.3 billion improvement = (225.2 billion) North America – Vehicle sales decreased 5.2 % (114,000)to 2.10 million units. – Net Revenues decreased 8.9 % (552.4 billion) to 5.7 trillion

Financial Services Operations Overview Total assets: 13.3 trillion Net revenues: 1.2 trillion Operating income: billion Operating areas: 33 countries / regions Number of customers: About 8.1 mil Number of employees: About 8,000 Toyota Motor Corporation Overseas Sales Finance Companies Toyota Finance Corporation Toyota Asset Management Co., Ltd. Toyota Financial Services Corporation Financial Services Operations Organization

Other Areas Of Business

Other Business Operations Intelligent Transport Systems (ITS) Business – The planning and development of products and services for ITS. The creation of vehicle-infrastructure cooperative systems that support safe driving. Information Technology and Telecommunications Business – Engaged in the planning and commercialization of services that integrate vehicles and cell phones. Also serving as a sales agency for cellphones provided by KDDI corporation. E-TOYOTA Business – Developing e-TOYOTA business operations which offer additional value to customers by integrating IT services with automobiles.

Other Business Operations 2 Housing Business – Manufacturing luxury houses in Japan. Marine Business – Toyota is expanding into the marine business manufacturing boats and engines. Biotechnology and Afforestation Business – Contributing to the creation of a resource recycling society through its biotechnology and afforestation operations.

Other Business Operations 3 Toyota uses technologies and expertise gained from the automotive operations to operate a variety of businesses.

Business In Other Countries

Manufacturing and Distributing companies in different countries including: – North America – Latin America – Europe – Africa – Asia (excluding Japan) – Middle East

Business In Other Countries (Shipping) Shipping via boat, hauling 8,500 vehicles Uses NYK Line – Japanese Shipping Company Expected imports through Newark to increase by 20% in 2012 compared to 2011 Rebounding from Natural Disasters United States and Puerto Rico

Business In Other Countries (Advertising) Toyota creating two new companies to manage marketing – One for Japan – One for Worldwide Stems from reorganization of a global marketing division The company spends about $1.2 billion annually on ads In 2009, Toyota posted first annual loss in 59 years (during recession)

Competition

Competition on all Fronts Asia – Honda – Hyundai – Mitsubishi North America – Ford – Chevrolet – Dodge – Chrysler Europe – Fiat – BMW – Saab

Hometown Competitor Category Toyota Toyota Stripped Toyota Loaded Honda Honda Stripped Honda loaded Small Car Corolla Civic Family Sedan Camry Accord mini-SUV RAV CR-V mini-van Sienna Odyssey

North American Challengers Chevrolet – Fuel efficient – Higher safety ratings – Shorter breaking distance Ford – Innovative – Clean Running – Pleasing to the eye

Europe BMW – Know for higher class – Have a serious following – More expensive Mini – Compact – Has a luxury aspect while still comparable Fiat

Recovering After Product Failures

Toyota Faced with big recovery trust with the product failures Did not act early Example: Brakes – “brake override system”

Trustworthiness & Recovery Trust Gain Trust: – Take serious actions – Keep issues open in a positive way – Responding to customers Recovery Toyota actions: – Take full responsibility for mistakes – Learn from them – When something happens act immediately

Bonds of Trust Maximizing customer satisfaction by strengthening bonds Standardizing service quality Development of new compact car etios Position in market

General Overview Toyota focused on customers Fully investigate Toyota has grown by quickly responding to market needs Quality control processes Strengthened monitoring function Strengthening the information gathering function Increasing the number of technical offices Human resource development

New Technology

Prius Safety Technology Cabin Electronics

Prius Low MPG Recyclable batteries Solar Technology

Safety Technology Controlled Steering Heartbeat Monitor Pop-up hood/ Airbags Headlights

Questions?