Full Year 2023 Toyota Motor Corp Earnings Call

May 10, 2023

Ladies and gentlemen, thank you very much for coming today.

We will now like to storage the financial results meeting for the year ending March 'twenty two 'twenty three.

My name is <unk> from public relations and I will be D and C for today's meeting.

Before we announced our financial results.

Of course, he is also a precedent.

<unk> has a few words too.

Mention Mr. Sato please.

Koji Sato: I am Koji Sato. Before announcing our financial results, I would like to explain the current situation regarding the Daihatsu procedural irregularities issue, which was announced on 28 April. Since the announcement, we have had an independent third-party review entity conduct a retest of the vehicles concerned. It has once again been confirmed that the vehicles concerned present no quality or safety issues. Based on the results of the retest and after consulting with the related authorities, we have resumed shipments of the Toyota brand vehicles to Malaysia, Mexico, and Ecuador. As for Thailand and Middle Eastern countries, we will continue to consult with the related authorities.

Koji Sato: I am Koji Sato. Before announcing our financial results, I would like to explain the current situation regarding the Daihatsu procedural irregularities issue, which was announced on April 28th. Since the announcement, we have had an independent third-party review entity conduct a retest of the vehicles concerned. It has once again been confirmed that the vehicles concerned present no quality or safety issues. Based on the results of the retest and after consulting with the related authorities, we have resumed shipments of the Toyota brand vehicles to Malaysia, Mexico, and Ecuador. As for Thailand and Middle Eastern countries, we will continue to consult with the related authorities.

Some of them.

I am going to start to kick in.

No.

Before announcing our financial results.

Okay, Great. That's myself I would like to explain the current situation regardless of diehard two procedure either your allergies issue, which was announced on April 28.

Since we announced means he has had an independent third party review and Judy conductor Retests those vehicles concerns yet.

He has once again been confirmed.

That the vehicles concerns present, no quality or safety issues.

Based on the results of the region and after consulting with the related Oh, sorry, Felicia, we have resumed shipments of the Toyota brand vehicles.

ACL, Mexico and Ecuador.

As for Thailand, and middle Eastern countries.

We will continue to consult with the related also reduce.

Koji Sato: The day before yesterday, Chairman Toyoda visited Thailand to explain to our customers and stakeholders what had happened, and to convey to them that the vehicles were safe and that our entire corporate group was committed to working to prevent this type of misconduct from ever happening again. Daihatsu and Toyota are confirming the facts from various perspectives to prevent a recurrence. Toyota is a company in which all members always stop when a problem occurs. It pursues the root cause of problems by going and seeing the location or process where the problem exists, makes improvements, and works to prevent recurrences. We will continue to investigate the root cause, believing that it is important to change the environment in which such misconduct occurs. We will keep you informed as and when progress is made.

Yeah.

The day before yesterday.

Chairman Toyota visited Thailand.

Moving on to our customers and stakeholders what had happened.

On to convey to them that the vehicles were safe.

And that our entire corporate group was committed to working to prevent this type of misconduct from ever happening again.

The Hudson Toyota are confirming the fact from various perspectives.

To prevent a recurrence.

Toyota is a company that's all members always thought when a problem occurs it pursues a root causes problems by going and seeing the location of processes, where their problem exists makes it means and what it is to prevent recurrence as well.

We will continue to investigate the root cause to rethink that it is important to change the environment in your words such misconduct occurs hormone.

So we will keep you informed.

As and when progress is made.

Yeah.

Got it.

Irie: Thank you. Now we'd like to call upon Yoichi Miyazaki, the Executive Vice President and Chief Financial Officer, to explain about the financial results.

[Company Representative] (Toyota Motor Corp): Thank you. Now we'd like to call upon Yoichi Miyazaki, the Executive Vice President and Chief Financial Officer, to explain about the financial results.

Thank you and nobody likes to call upon.

Okay. Thank you.

Vice President and Chief Financial Officer to explain about the financial results.

Yes.

Yoichi Miyazaki: I'm Miyazaki, the CFO. This is the first time I take the podium in this title. I hope you'll bear with me. Before sharing with you the financial results, we would like to express our heartfelt appreciation to our customers around the world, who choose us, as well as our shareholders, our dealers, and suppliers, and all other stakeholders who support us in our daily activities. Thank you so very kindly. Let me provide a summary of the financial performance of the fiscal year ending March 2023. While we experienced a production constraint due to tight semiconductor supplies, natural disasters, and COVID-19, et cetera, dealers and suppliers, as well as production sites, have all worked hard in order to deliver as many cars as possible to our customers.

I mean that gives the CFO .

And this is the first time I take the podium.

This title.

You bet.

Okay.

Oh sure.

You the financial results, we would like to express our heartfelt appreciation to our customers around the world.

Tucson as well as <unk>.

Our shareholders dealers.

Flyers and all other stakeholders, who support us drilling activity. Thank you very kindly somebody's got so let me provide a summary of the financial performance.

Fiscal year 2021.

While we expanded our production constraints due to tight semiconductor supply of natural disasters, and Covid, 19, et cetera dealers and suppliers as well as protect title Oh, well work hard in order to deliver as many cars as possible to our customers.

Yoichi Miyazaki: In spite of our actual operating income decreasing compared to the last fiscal year due to the impact of such things as soaring material prices, our results exceeded the previous forecast due to our continuous efforts to improve our profit structure. For the forecast for the next fiscal year, we expect production volume of 10.1 million, and sales volume increase in all regions as a result of such things as improvements in semiconductor supply, and the efforts of production sites. We will continue to both advance our activities towards carbon neutrality and improve our profit structure. Also, without slowing down our growth investments, we will promote activities to change the future of cars. In terms of return to shareholders, in order to reward our long-term shareholders, we have a new dividend policy to increase dividends stably and continuously.

Heidelberg actual operating income decreasing compared to the last fiscal year due to the impact of soaring material prices our results exceeded the previous forecast due to our continuous efforts to improve our capital structure.

For the forecast for the next fiscal year.

For volume.

Pinpoint 1 million.

And.

Volume increased in all regions as a result of such things as improvements in semiconductor supply and the efforts of our production sites. We will continue to both advance our activities my pledge carbon neutrality and improve our product structure.

So without slowing down our growth.

Promote activities to change the future of cars governance.

In terms of return to shareholders in order to reward our long time shareholders, we have a new dividend policy to increase dividend steeply and continuously.

Yoichi Miyazaki: We have placed more focus on dividends for our shareholder returns, and the year-end dividend will be 35 JPY per share, which is an increase of 7 JPY compared to the previous fiscal year. The total dividends will be 60 JPY per share, which is an increase of 8 JPY from the previous fiscal year. As for the share repurchases, under our policies to conduct flexibly, taking into account our share price levels, et cetera, for our year-end repurchases, we will proceed with a maximum of JPY 150 billion, which is equivalent to our interim repurchases. Now then, let me explain the summary of our performances for the fiscal year ended March 2023. Consolidated vehicle sales for the period was at 8,822,000 units, which was 107.2% of such sales of the previous fiscal year.

Yoichi Miyazaki: We have placed more focus on dividends for our shareholder returns, and the year-end dividend will be JPY 35 per share, which is an increase of JPY 7 compared to the previous fiscal year. The total dividends will be JPY 60 per share, which is an increase of JPY 8 from the previous fiscal year. As for the share repurchases, under our policies to conduct flexibly, taking into account our share price levels, et cetera, for our year-end repurchases, we will proceed with a maximum of JPY 150 billion, which is equivalent to our interim repurchases. Now then, let me explain the summary of our performances for the fiscal year ended March 2023. Consolidated vehicle sales for the period was at 8,822,000 units, which was 107.2% of such sales of the previous fiscal year.

Thank you Matt.

We have placed more focus on the dividend for our shareholder returns and the year end dividend will be 35 per share, which is an increase of 7% compared to the previous fiscal year. The total dividend will be <unk>.

Per share, which is an increase of.

<unk> from the body.

Fiscal year.

Thank you.

For the share repurchase.

Our policy is to conduct flexibly, taking into account our share price levels et cetera.

And repurchases. We will proceed with a maximum of 150 billion yen.

Thanks to our entire fleet purchases.

And let me explain the summary of our performance for the fiscal year ended March.

Consolidated vehicle sales for the period was <unk> 8.822 million units, which was 171, 2% of sales of the previous fiscal year, Toyota and Lexus Brown Visco sales was up two 9.610 million units, which goes to 101 zero percent of such sales.

Yoichi Miyazaki: Toyota and Lexus brand vehicle sales was at 9,610,000 units, which was 101.0% of such sales of the previous fiscal year. As for the vehicle sales by region, we saw an increase in all regions compared to the previous fiscal year. Also, the ratio of electrified vehicles became 29.6%. Consolidated financial results were sales revenue of JPY 37,154.2 billion, operating income of JPY 2,725 billion, income before income taxes of JPY 3,668.7 billion, and net income of JPY 2,451.3 billion. Now I'd like to explain the factors which impacted operating income year on year.

Yoichi Miyazaki: Toyota and Lexus brand vehicle sales was at 9,610,000 units, which was 101.0% of such sales of the previous fiscal year. As for the vehicle sales by region, we saw an increase in all regions compared to the previous fiscal year. Also, the ratio of electrified vehicles became 29.6%. Consolidated financial results were sales revenue of JPY 37.154.2 trillion, operating income of JPY 2.725 tillion, income before income taxes of JPY 3.668.7 trillion, and net income of JPY 2.451.3 trillion. Now I'd like to explain the factors which impacted operating income year-on-year.

The previous fiscal year.

So as with any sales by region, we saw an increase in all regions compared to the previous fiscal year also the ratio of electrified vehicles became looks like for you guys.

6%.

So all the related financial results, where sales revenue of 37 trillion, one part at $54 2 billion in.

Operating income of two trillion 725 billion yen.

Before income taxes of three trillion 668, 7 billion and net income.

Sure.

$161 3 billion, yes.

Hey, Julien.

To explain the factors, which impacted operating income year on year.

Yoichi Miyazaki: First, the effects of foreign exchange rates increased operating income by JPY 1,280 billion. Second, cost reduction efforts decreased operating income by JPY 1,290 billion. The JPY 1,545 billion impact of soaring material prices includes JPY 500 billion for activities aimed at strengthening the structure of the entire supply chain, in addition to fluctuations in market conditions for materials. Third, marketing efforts increased operating income by JPY 680 billion. Fourth, increase in expenses decreased operating income by JPY 525 billion. Lastly, we also incurred a negative impact of -JPY 415.6 billion, largely due to swap valuation losses and the cost to terminate our production in Russia.

Yoichi Miyazaki: First, the effects of foreign exchange rates increased operating income by JPY 1.280 trillion. Second, cost reduction efforts decreased operating income by JPY 1.290 trillion. The JPY 1.545 trillion impact of soaring material prices includes JPY 500 billion for activities aimed at strengthening the structure of the entire supply chain, in addition to fluctuations in market conditions for materials. Third, marketing efforts increased operating income by JPY 680 billion. Fourth, increase in expenses decreased operating income by JPY 525 billion. Lastly, we also incurred a negative impact of -JPY 415.6 billion, largely due to swap valuation losses and the cost to terminate our production in Russia.

The effects of foreign exchange rates increased operating income by one Chilean 208.

Second cost reduction efforts increased operating income by one trillion 290 billion yes.

He won't really almost 545 billion yen impact absorbing material prices include 500 billion yen for activities aimed at strengthening the structure of the entire supply chain. In addition to fluctuations in market conditions for materials third marketing efforts increased operating income by 680 <unk> Inc.

<unk> expenses decreased.

Operating income by 525 billion yen sung Lee.

Lastly, we also incurred a negative impact of $415 6 billion largely due to the Huawei evaluation of losses and the clock to terminate our production in Russia.

Yoichi Miyazaki: As a result, excluding the overall impact of foreign exchange rates, swap valuation gains and losses, and other factors, operating income decreased by JPY 1,135 billion year on year. Now let me explain the operating income for each region. Japan increased by JPY 477 billion year on year due to the effects of foreign exchange rates despite the negative effect from soaring material prices. North America decreased by JPY 457.8 billion year on year due to soaring material prices. Europe also decreased by JPY 115 billion year on year due to soaring material prices and the cost to terminate our production in Russia despite the positive effect from our marketing efforts.

Yoichi Miyazaki: As a result, excluding the overall impact of foreign exchange rates, swap valuation gains and losses, and other factors, operating income decreased by JPY 1.135 trillion year-on-year. Now let me explain the operating income for each region. Japan increased by JPY 477 billion year-on-year due to the effects of foreign exchange rates despite the negative effect from soaring material prices. North America decreased by JPY 457.8 billion year-on-year due to soaring material prices. Europe also decreased by JPY 115 billion year-on-year due to soaring material prices and the cost to terminate our production in Russia despite the positive effect from our marketing efforts.

As a result, excluding the overall impact of foreign exchange rates.

Valuation gains and losses and other factors operating income decreased by one Chile, and 135 billion yeah yeah.

Now, let me explain the operating income for each region.

Japan.

477 billion yen year on year due to the effects of foreign exchange rates, despite the negative effects from sewing material prices.

America decreased by $457 8 billion yen year on year due to storing material prices.

Going forward.

Europe also decreased by 115 billion yen year on year due to selling material prices and the cost to terminate our production in Russia. Despite the positive effect from our marketing efforts.

Yoichi Miyazaki: Asia increased by JPY 55.7 billion year on year due to the effect of foreign exchange rates and increase in sales volume. Other regions increased by JPY 36.7 billion year on year. In the next slide, let me explain about our business in China as well as our financial service business. As for our business in China, while the operating income of consolidated subsidiaries decreased year on year, mainly due to the impact of fluctuations in foreign exchange rates and a decrease in sales volume, our share of profit of investment accounted for using the equity method increased year on year, mainly due to cost reduction efforts. Regarding the financial services business, operating income for the fiscal year increased year on year due to the impact of fluctuations in foreign exchange rates. Next, I'd like to explain about our return to shareholders.

Yoichi Miyazaki: Asia increased by JPY 55.7 billion year-on-year due to the effect of foreign exchange rates and increase in sales volume. Other regions increased by JPY 36.7 billion year-on-year. In the next slide, let me explain about our business in China as well as our financial service business. As for our business in China, while the operating income of consolidated subsidiaries decreased year-on-year, mainly due to the impact of fluctuations in foreign exchange rates and a decrease in sales volume, our share of profit of investment accounted for using the equity method increased year-on-year, mainly due to cost reduction efforts. Regarding the financial services business, operating income for the fiscal year increased year-on-year due to the impact of fluctuations in foreign exchange rates. Next, I'd like to explain about our return to shareholders.

Asia increased by five.

$5 7 billion yen year on year.

Okay.

In exchange rate and increase in sales volume.

<unk> increased by $36 7 billion yen year on year.

Particularly in the next slide let me explain about our business in China as well as our financial services.

As for our business in China, while the operating income of consolidated subsidiaries decreased year on year, mainly due to the impact of fluctuations in foreign exchange rates and a decrease in sales volume.

Sure.

All the investments accounted for using the equity method.

<unk> year on year, mainly due to cost reduction.

Regarding the financial services business operating income for the fiscal year increased year on year due to the impact of fluctuations in foreign exchange rates next I'd like to explain about our return to shareholders.

Yoichi Miyazaki: In order to reward our long-term shareholders, we have eliminated our conventional guideline of consolidated dividend payout ratio at 30%. Instead, we have revised our policy to increase dividends stably and continuously so as to have more focus on dividend. The year-end dividend for the current fiscal year will be JPY 35 per share, which is an increase of JPY 7 compared to the previous fiscal year. Together with the interim dividend of JPY 25, the total full year dividends for this fiscal year are JPY 60 per share, which is an increase of JPY 8 from the previous fiscal year. Previously, we have conducted share repurchases based on factors such as investments in growth, dividend levels, and cash on hand. However, we have revised our policy to conduct flexibly, taking into account our share price levels, et cetera.

In order to reward our long term shareholders, we have eliminated our confessional guideline of consolidated dividend payout ratio of 30%.

Jade, we have revised our policy to increase really didn't steeply and continuously so as to have more focus on dividend.

The year end dividend for the current fiscal year will be 35 per share, which is an increase of seven year and compared to the previous fiscal year.

Together with the interim dividend of <unk> 25 in the total full year dividends for this fiscal year.

<unk> per share, which is an increase of eight yang from the previous fiscal year.

Previously we have conducted share repurchases based on factors such as English means they would raise dividend levels and cash on hand. However, we have revised our policy to conduct flexibly taking into account the share price levels et cetera.

Yoichi Miyazaki: For year-end repurchases, considering the current share price level, we set aside JPY 150 billion as the maximum limit of year-end repurchase, which is equivalent to our interim. Next, I will explain the forecast for the fiscal year ending 31 March 2024. First of all, I will explain the production volume forecast for the Toyota and Lexus brands. We expect 10.1 million units, which is 110.6% of the previous fiscal year. The reason behind the increase in production forecast for the previous fiscal year is as follows. We have been working on examination of alternatives regarding them in light of supply risks of the future, as well as on promoting improvements aimed at improving operating rates at factories. Since March, we have been able to continue high-level production while prioritizing safety and quality.

Yoichi Miyazaki: For year-end repurchases, considering the current share price level, we set aside JPY 150 billion as the maximum limit of year-end repurchase, which is equivalent to our interim. Next, I will explain the forecast for the fiscal year ending March 31st, 2024. First of all, I will explain the production volume forecast for the Toyota and Lexus brands. We expect 10.1 million units, which is 110.6% of the previous fiscal year. The reason behind the increase in production forecast for the previous fiscal year is as follows. We have been working on examination of alternatives regarding them in light of supply risks of the future, as well as on promoting improvements aimed at improving operating rates at factories. Since March, we have been able to continue high-level production while prioritizing safety and quality.

For year end repurchases, considering the current share price level, we set aside 150 billion yen as the maximum limit of yearend repurchase which is equivalent to our interim.

Next I will explain the forecast for the fiscal year ending March 31 2024.

First of all I will explain the production volume forecast for Toyota and Lexus brands.

We expect pinpoint to 1 million units.

110, 6% of the previous fiscal year.

The reason behind the increase in production forecast for the previous fiscal year.

I suppose we have been working on examination of alternatives regarding them in light of supply risks in the future as well as on promoting improvements aimed at improving operating rates at the factories.

Since March we have been able to continue high level production, while prioritizing safety and quality.

Yoichi Miyazaki: At sale sites in each region, the production volume still cannot keep up with customer demand, so we will continue to promote improvements together with our suppliers in order to further increase the production volume. We expect consolidated vehicle sales of 9,600,000 units, which is 108.8% compared to the previous fiscal year. As the semiconductor supply and demand has improved, we expect growth in all regions. As for Toyota and Lexus brand vehicle sales, we expect 10,400,000 units, which is 108.2% compared to the previous fiscal year. We expect electrified vehicle sales of 3,843,000 units, which is 134.9% compared to the previous fiscal year, and the electrified vehicles ratio is expected to be 37.0%.

Sales sites in each region, the production volumes still cannot keep up with customer demand.

We will continue to promote improvements together with our suppliers in order to further increase our production volume.

We expect consolidated vehicle sales of $9 million and 600000 units, which is 108, 8% compared to the previous fiscal year.

Semiconductor supply and demand has improved we expect the growth in all regions.

Yes.

As for Toyota and Lexus brand vehicles sales, we expect $10 million and 400000 units, which is 108, 2% compared to the previous fiscal year. We expect electrified vehicle sales of 8.843 million units, which is.

134, 9% compared to the previous fiscal year and the electric.

Vehicles ratio is expected to be 37 points of euro per cent next I will explain the forecast for the fiscal year ending March 31st.

Yoichi Miyazaki: Next, I will explain the forecast for the fiscal year ending 31 March 2024. We have adopted a full year foreign exchange rate assumption of 125 yen per US dollar and 135 yen per euro. Based on this, our forecast for full year consolidated financial performance are sales revenue of JPY 38 trillion, operating income of JPY 3 trillion, income before income taxes of JPY 3.69 trillion, and net income of JPY 2.58 trillion. Next, I would like to explain the factors that may impact operating income. First, the effects of foreign exchange rates will decrease the operating income by JPY -875 billion.

Yoichi Miyazaki: Next, I will explain the forecast for the fiscal year ending March 31st, 2024. We have adopted a full year foreign exchange rate assumption of JPY 125 per US dollar and JPY 135 per euro. Based on this, our forecast for full year consolidated financial performance are sales revenue of JPY 38 trillion, operating income of JPY 3 trillion, income before income taxes of JPY 3.69 trillion, and net income of JPY 2.58 trillion. Next, I would like to explain the factors that may impact operating income. First, the effects of foreign exchange rates will decrease the operating income by JPY 875 billion.

24.

Yes.

Okay.

We have adopted the full year foreign exchange rate assumption of 125 yen per U S dollar and 135 Gram per euro.

Ricky.

Just on this.

Our forecast for full year consolidated financial performance, our sales revenue of <unk> 38 trillion operating income of three trillion yen income before income taxes of three trillion 690 billion yen and net income of two children and 582 in the next I would like to explain the factors.

That may impact operating income.

First the effects of foreign exchange rates will decrease in operating income.

875 billion yen second the cost reduction efforts are expected to increase profits by 360 billion yen or the impact of decreasing materials cost is expected to be 510 billion yen, resulting in a total decrease of 150 billion yen.

Yoichi Miyazaki: Second, the cost reduction efforts are expected to increase profits by JPY 360 billion, while the impact of decrease in materials cost is expected to be JPY 510 billion, resulting in a total decrease of JPY 150 billion. Third, the effects of marketing activities will increase the operating income by JPY 1,285 billion due to an increase in sales volume and an improvement in product mix led by improved semiconductor supply and demand, while other expenses are expected to decrease by JPY 260 billion. Compared with the pre-COVID fiscal year ended 31 March 2020, we became able to offset the impact of soaring material costs through TPS, cost reductions, and marketing efforts as a result of our long-standing product-centered and region-centered approach. We have also established a foundation for steadily increasing growth investment.

Yoichi Miyazaki: Second, the cost reduction efforts are expected to increase profits by JPY 360 billion, while the impact of decrease in materials cost is expected to be JPY 510 billion, resulting in a total decrease of JPY 150 billion. Third, the effects of marketing activities will increase the operating income by JPY 1.285 trillion due to an increase in sales volume and an improvement in product mix led by improved semiconductor supply and demand, while other expenses are expected to decrease by JPY 260 billion. Compared with the pre-COVID fiscal year ended March 31st, 2020, we became able to offset the impact of soaring material costs through TPS, cost reductions, and marketing efforts as a result of our long-standing product-centered and region-centered approach. We have also established a foundation for steadily increasing growth investment.

The effects of marketing activities will increase the operating income, but once you're in 285 billion yen due to an increase in sales volume and an improvement in product mix led.

Led by improved semiconductor supply and demand while other expenses are expected to decrease by 260 billion yen.

Compared with a pre Covid fiscal year ended March 31, 2020, we became able to offset the impact of material cost.

P. P S cost reductions and marketing efforts as a result of our long standing product centered in Asia centered approach.

We have also established a foundation for steadily increasing growth investments.

Okay.

Yes.

Koji Sato: We live in an era where there is no right answer, and the future is uncertain. We will always keep our antennas up and carefully manage risks in preparation for changes in the business environment. This brings us to the end of our presentation. Thank you very much.

Yoichi Miyazaki: We live in an era where there is no right answer, and the future is uncertain. We will always keep our antennas up and carefully manage risks in preparation for changes in the business environment. This brings us to the end of our presentation. Thank you very much.

We live in an era, where there is no right answer and the future is uncertain.

Okay.

So we will always keep our antennas up.

And carefully manage risks in preparation for changes in the business environment.

Yeah.

This brings us to the end of our presentation. Thank you very much.

Irie: Thank you. We'd now like to ask our President, Koji Sato, to take the floor again.

[Company Representative] (Toyota Motor Corp): Thank you. We'd now like to ask our President, Koji Sato, to take the floor again.

So they came on.

Thank you.

Now I'd like to ask our President of course is subtle to take the floor again.

Koji Sato: Once again, I am Koji Sato. As Miyazaki-san just mentioned, despite the severe business environment, including soaring material prices, we were able to secure an operating profit of JPY 2.7 trillion in the previous fiscal year. Our new management team assumed the reins on 1 April. However, the financial results figures for the previous fiscal year were based on the 14 years of former President Akio Toyoda's efforts, making me once again keenly aware that our change in management took place while Toyota was being managed at top speed. As such, our new management team will be able to focus on strategic initiatives in growth areas based on this current foundation. When Chairman Toyoda took office as president, he said growth is about being able to continuously change ourselves in response to ever-changing needs of customers and society.

Koji Sato: Once again, I am Koji Sato. As Miyazaki-san just mentioned, despite the severe business environment, including soaring material prices, we were able to secure an operating profit of JPY 2.7 trillion in the previous fiscal year. Our new management team assumed the reins on April 1st. However, the financial results figures for the previous fiscal year were based on the 14 years of former President Akio Toyoda's efforts, making me once again keenly aware that our change in management took place while Toyota was being managed at top speed. As such, our new management team will be able to focus on strategic initiatives in growth areas based on this current foundation. When Chairman Toyoda took office as president, he said growth is about being able to continuously change ourselves in response to ever-changing needs of customers and society.

Once again I am could you start though.

Thank you Stan just mentioned.

Thank you Rob.

The severe business environment, including soaring material prices, we were able to secure an operating profit of $2 seven trillion yen in the previous fiscal year.

Our new management team assumed the reins on April 1st However, the financial result tiers for the previous fiscal year, where based on the 14 years of former President Akio Toyoda efforts, making me once again, you're keenly aware that our change in management took place well Toyota was being managed.

Need access.

Our new management team will be able to focus on strategic initiatives in growth areas based on this current foundation Glenn.

When chairman Toyoda took office.

And she said growth was about being able to continuously change ourselves in response to ever changing needs of customers and society and I believe that his 14 years that the precedent and body.

Koji Sato: I believe that his 14 years as president embodied exactly that. Now that he's chairman, he's in a position to support our new management team, and we will implement a new form of team management with the chairman and president working simultaneously, and according to an optimal division of roles at any given time. Our team will take advantage of this environment to promote speedy management. With that in mind, I would like to once again talk about our future management. I believe that the growth Toyota should aim for going forward is growth that creates a future in which the automobile industry transforms itself into a mobility industry through enhancing its added value as it works in cooperation with many other industries. The foundation for this is carbon neutrality. Toyota aims to reduce new vehicle CO2 emissions by more than 50% globally by 2035.

Leave that now that he is chairman he is in a position to support our new management team and we will implement a new form of team management with the chairman and president of working simultaneously and according to an optimal division of the world.

At any given time.

Our team will take advantage of this environment to promote speedy management.

With that in mind I would like to once again talk about our future management.

I believe.

The gross Toyota should aim for going forward.

That creates a future in which the automobile industry transforms itself into a mobility industry through enhancing its added value as it works in cooperation with many other industries. The foundation for this is carbon neutrality.

Hilda aimed to reduce <unk> emissions by more than 50% globally by 2035.

Koji Sato: To achieve this, we will continue to provide regionally optimal solutions at an accelerated pace without wavering from our multipathway approach. When it comes to battery electric vehicles or BEVs, which are especially rapidly progressing, we have set a pace of selling 1.5 million units by 2026 as our base volume, and we plan to launch 10 models ranging from luxury vehicles to compact and commercial vehicles, mainly in the United States and China. Regarding the battery supply, we will seek to speedily secure the necessary volume by increasing our in-house production capacity and collaborating with our partners. Our new model scheduled for launch in 2026 will be built on three new platforms, the body and chassis, the electronic platform, and the software platform.

Hello.

To achieve this.

We will continue to provide regionally optimal solutions at an accelerated pace without wavering from our multi pathway approach.

When it comes to battery electric vehicles, or B G, which are especially rapidly progressing we have therapy, so selling 1.5 million units by 2026 as our baseball.

We plan to launch 10 models, ranging from luxury vehicles to compact and commercial vehicles, mainly in the United States and China.

Regarding the battery supply, we will seek to speedily secure the necessary volume by increasing our in house production capacity and collaborating with our partners.

Okay.

New models scheduled for launch in 2026 will be built on three new platforms.

Body and chassis and the like.

20th platform and the software platform.

Koji Sato: They will all be renewed as we aim to achieve mobility by way of a new vehicle packaging with a rational structure that is unique to BEVs. From now on, the new dedicated organization, BEV Factory, will lead the initiatives, and initiatives will be accelerated. We would like to present conceptual vehicles of such at the Japan Mobility Show this autumn. At the same time as our BEV initiatives, we will also accelerate our efforts to realize a hydrogen society. We will advance our projects in the commercial domain, especially in Europe and China, where hydrogen consumption is particularly high, centered on fuel cell electric vehicles. Furthermore, we will focus on the use of hydrogen energy for personal mobility and on the cycle of producing, transporting, and using hydrogen, and we will conduct activities for the development of social infrastructure, including through social implementation in Thailand.

But.

All of the renewed as we aim to achieve mobility by way of a new vehicle packaging with a rational structure that is unique to B E DS.

From now on.

Although new dedicated organization B E V factory.

We'll lead.

The initiatives and initiatives will be accelerated we would like to present concept for vehicles, such as the Japan mobility show this autumn.

At the same time as it would be the initiatives. We have also accelerated our efforts to realize the hydrogen society.

We will advance our projects and the commercial demand, especially in Europe , and China, where hydrogen consumption is particularly high centered on fuel cell electric vehicles.

Tomorrow, we will focus on the use of hydrogen energy for personal mobility and all of a cycle of producing transporting in using hydrogen and we will conduct activities for the development of social infrastructure, including through social implementation in Thailand.

Koji Sato: To actively promote these initiatives, we will also increase our immediate earning power. Especially in Asia and emerging markets, which are expected to grow 30% or more by 2030, we will strengthen our earning base by focusing on hybrid electric vehicles to capture market growth. To transform automobiles into a mobility industry, we will further increase our current approximately JPY 3 trillion in R&D expenditures and capital investments while increasing the ratio of future investment to achieve sustainable growth. Thank you for your kind attention.

To actively promote these initiatives we are also increasing our immediate earnings power.

And especially in Asia and emerging markets.

I expect it to grow 30% or more by 2030, we will strengthen our earning base.

Focusing on hybrid electric vehicles to capture market growth.

To transform automobiles into a mobility industry.

We will further increase our client approximately three trillion in R&D expenditures in capital investment, while increasing the ratio of future investments to achieve sustainable growth.

Thank you for your kind attention.

Okay.

Well no.

Okay.

Yoichi Miyazaki: Next, we'll have a question and answer session, so please do wait for a few seconds while we set up the stage. Thank you. Now then, we'd like to start the Q&A session. Could we ask the respondents to the questions to please take the stage? Let me introduce the members on the stage. President Koji Sato. Executive Vice President, Chief Technology Officer, Hiroki Nakajima. Executive Vice President, Chief Financial Officer, Yoichi Miyazaki. Chief Communication Officer, Jun Nagata. Chief Officer, Accounting Group, Masahiro Yamamoto. Please do take your seats on the stage. Now then, we are ready to take questions. If you have any questions, please raise your hand to indicate that you'll be asking a question and wait for the microphone. We'd like to give the opportunity to as many people as possible, so we would like to restrict your questions to two questions each, please.

[Company Representative] (Toyota Motor Corp): Next, we'll have a question and answer session, so please do wait for a few seconds while we set up the stage. Thank you. Now then, we'd like to start the Q&A session. Could we ask the respondents to the questions to please take the stage? Let me introduce the members on the stage. President Koji Sato. Executive Vice President, Chief Technology Officer, Hiroki Nakajima. Executive Vice President, Chief Financial Officer, Yoichi Miyazaki. Chief Communication Officer, Jun Nagata. Chief Officer, Accounting Group, Masahiro Yamamoto. Please do take your seats on the stage. Now then, we are ready to take questions. If you have any questions, please raise your hand to indicate that you'll be asking a question and wait for the microphone. We'd like to give the opportunity to as many people as possible, so we would like to restrict your questions to two questions each, please.

Next we will have a question and answer session and so please to wait for a few seconds, while we set up at this stage.

Yeah.

[music].

Yeah.

[music].

Yeah.

[music].

Yeah.

[music].

Yes.

And I think we'd like to start the Q&A session.

Could we ask the respondents to the questions to please take the stage.

Sure.

Let me introduce the members on the stage President Cozy subtle.

Executive Vice President Chief Technology Officer.

I'll keep Nakajima.

Okay.

Executive Vice President Chief Financial Officer.

Yeah that Keith.

Go ahead please.

Chief Communication officer.

No I got that.

Chief Officer Accounting group.

<unk> Yamamoto.

Yeah.

Please take your seats on the stage.

Thank you.

I don't know that we are ready to take questions. If you have any questions.

Please raise your hand to indicate that you'll be asking that question and wait for the microphone we'd like to.

They get the opportunity to as many people as possible. So we would like to restrict your questions to two questions. Each please.

Okay.

Yamauchi: The third person, the person in the third row from the front, please. Thank you. I am from Yomiuri. My name is Yamauchi. Thank you for the invitation. I have a question to President Sato. The first question. What, how would you sum up the overall financial results? What were good points? What are the points which you highly evaluate or points that you think were below standard or were not actually satisfactory? How do you think about this as president? Second question is about the profit or earnings structure. When you look at the breakdown of the operating profit, the external environment such as Forex and the soaring materials prices highly affected your results. How about the growth in reduction of costs, et cetera, I think which did have an impact on the results.

[Company Representative] (Toyota Motor Corp): The third person, the person in the third row from the front, please.

So the third person the person a third row from the front. Please.

[Analyst]: Thank you. I am from Yomiuri. My name is Yamauchi. Thank you for the invitation. I have a question to President Sato. The first question. What, how would you sum up the overall financial results? What were good points? What are the points which you highly evaluate or points that you think were below standard or were not actually satisfactory? How do you think about this as president? Second question is about the profit or earnings structure. When you look at the breakdown of the operating profit, the external environment such as Forex and the soaring materials prices highly affected your results. How about the growth in reduction of costs, et cetera, I think which did have an impact on the results.

Thank you I am from your beauty my name is Yamaguchi.

Yeah. That's great. Thank you for the mutation I have a question to Kristian said Doug.

The first question.

Okay.

How would you sum up the.

The overall financial results what were a good points four points.

Points.

Highly evaluated or points that you think or.

Below standard or whatnot.

Satisfactory or do you think about this is Chris and second question is about the profit or earnings structure.

When you look at the breakdown of the operating profit.

The external environment touches forex and the soaring materials prices highly affected your results and if so how about.

The growth in our reduction of our cost et cetera, I think which did have an impact on the result.

Yoichi Miyazaki: As president, how do you intend to evolve or increase the basic earnings power of the company?

[Analyst]: As president, how do you intend to evolve or increase the basic earnings power of the company?

So as president.

Hello.

How do you intend to evolve or increase the basic earnings power of the company.

Koji Sato: Thank you for that question. The first question had to do with my summing up or impression of the financial results. Well, when we look at the short-term financial results, we were able to obtain an operating income of JPY 2.7 trillion, which I believe in terms of our earning power, we were able to indicate an earnings power that exceeds our power of last year. I'm sure you realize that the impact of Forex and also the soaring materials prices.

Hi.

Thank you.

Thank you for that question and the first question had to do with my summing up or impression of the financial results.

You know about it.

Cool.

So when we look at the short term financial results.

We were able to obtain an operating income of $2 seven trillion yen, which I believe in terms of.

Earning power.

We were able to indicate our earnings power.

Exceeds all of apparel.

Last year and I'm sure you realize that the impact of Forex and also the sore in materials prices.

Koji Sato: Operating profit actually improved through various efforts to generate operating profit, a good operating profit in the end. Manufacturing cars and delivering them to customers was a very difficult endeavor this year. However, I think the financial results indicate that in that process, there were various ingenuities and various devices that we were able to endure due to these difficulties, and that there are many factors included in the financial results which indicate our ability to strengthen our financial prowess. Also, for example, the production plan fluctuation was very large, but especially the suppliers responded so flexibly to them, and also the members involved in manufacturing internally, and also their efforts also were very important. In order to meet the customers' needs, providing smiles to customers through engineering, various production improvements, et cetera.

Oh actually improved through various efforts to generate.

Why.

Operating profit a good I'll take them one at the end.

Manufacturing cars and delivering them to customers for the very difficult.

Endeavour. This year. However, I think the financial result indicate that in that process. There are various in Virginia Tees and various devices like we were able to and did you do to these difficulties and that there are many factors included in the financial results of which indicate our ability to <unk>.

And our financial progress.

So the for.

For example, the production plan.

The fluctuation was very large.

Especially the suppliers responded so flexibility to them and also the members involved in manufacturing internally and also.

There is also a very important and also.

In order to meet the customers' needs how about you.

Okay.

Fighting smiles to customers through.

Hearing a very yes, our production.

Koji Sato: I think all of these efforts have led to the financial results. In the short run, despite the difficulties, I think that there was still room, much room for improvement, and such improvement efforts have been launched. I think that was the financial result indicated. In the long run, the economic environment has long been deflationary for many years. Against that backdrop, we have been involved in manufacturing centered around cars and around our products. If you look at things from a span of 10 to 20 years, and not only domestically, but against the United States, for example, inclusive of incentive payment, we were able to increase the marketing power of our products. In the end, we will not make automobiles a commodity.

Koji Sato: I think all of these efforts have led to the financial results. In the short run, despite the difficulties, I think that there was still room, much room for improvement, and such improvement efforts have been launched. I think that was the financial result indicated. In the long run, the economic environment has long been deflationary for many years. Against that backdrop, we have been involved in manufacturing centered around cars and around our products. If you look at things from a span of 10-20 years, and not only domestically, but against the United States, for example, inclusive of incentive payment, we were able to increase the marketing power of our products. In the end, we will not make automobiles a commodity.

Improvements et cetera, I think all of these efforts have led to the financial results in the short run despite the difficulties.

I think that there is.

Still there was still much room for improvement.

And it's not just improvement efforts have been launched so I think that.

The financial results indicated but in the long run.

The economic environment has long been deflationary for many many years and against that backdrop, we have.

Being involved in.

Manufacturing is centered around cars and around our products.

And so when you if you look at things from a ground up 10 to 20 years and not only domestically, but it's the United States for example.

Inclusive of buy in fence and incentive payment, we were able to increase the marketing power of our.

So in the end, we will not make automobile is the commodity we must provide a good value added.

Koji Sato: We must provide a good, value added, which develop a strong business that is appreciated by customers. Such efforts have been made over these many years, which culminated in such good results. Despite the very demanding economic conditions and despite the very difficult, supply constraints that we had, we were able to create a corporate structure, which could meet those adversities. In the short term and the long term, I believe that, the financial results do indicate that we have been able to reinforce the corporate fiber, through our years of effort. As for the profit structure, this I think overlaps with what I, said in relation to the first question.

And develop a strong business that is appreciated by customers and such efforts have been made to over these many years, which culminated in a such a good result, despite the very.

The mounting economic conditions and despite the very difficult.

Supply constraints that we had we were able to create a corporate structure.

It could.

The adversity, so in the short term and the long term I believe that.

The financial results do indicate that we have been able to reinforce our corporate fiber.

Two we got a year or something.

As for the profit structure.

I spoke about.

Uh huh.

This I think over lots of what I said in relation to the first question because we manage our operations center to one product is what we must do the first and foremost is to develop a good quality cars and beliefs with them.

Koji Sato: Because we will manage our operations centered around products, what we must do first and foremost is to develop good quality cars and deliver them to the customers. For supply issues, we are seeing improvements in supply constraints. As was mentioned earlier, we have set some vehicle sales forecasts which must be produced. We will also improve the appeal and attractiveness of our products to generate higher profitability. These are the basics, but it's very important to return to these basics. By so doing, the Forex, or soaring material prices, which are of course variables, we can create a good resiliency against them. On a global scale, we run a global business. We are a company that runs a global business.

To the customer and for supply issues, we are seeing improvements in supply constraints and as I was mentioned earlier.

So we have said Assam vehicle sales are forecast to three months.

It must be produced and also we will improve the appeal and attractiveness of our products.

To generate higher profitability.

These are the basics, but it's very important to return to these basics.

And by so doing the forex ore sorting and material prices, which are of course are variables. We can create a good words activity against them also on a global scale.

We run a global business.

Yeah.

We are a company that wants a global business.

Koji Sato: Stabilizing the profit structure requires not focusing on a specific geography, but to be able to create a corporate foundation that would enable us to generate profit in all regions and areas. Against various risks, we must flexibly grapple with good management in the regions so as to establish a very stable profit structure. I think that would be very important in creating a corporate management that is resistant to external factors. We must also create a strong global product portfolio. By doing so, we believe that we can strengthen our financial base. Thank you very much.

L a stabilizing of the profit structure.

Wires, not focusing on a specific geography, but to be able to create a corporate foundation that would enable us to generate profit in all regions and areas. So against various risks, we must flexibly grapple with good management in the regions. So us too.

It's a very stable profit structure, and I think that would be very important in creating a corporate management that is resistant to external factors and we must also create a stronger global product portfolio and by doing so we.

We believe that we can strengthen our financial base.

Thank you very much.

Okay.

Irie: Now let us take the next question. The person in the third row from the front.

[Company Representative] (Toyota Motor Corp): Now let us take the next question. The person in the third row from the front.

Now, let us take the next question.

Alright.

The person in the third row from the front.

Okay.

Hiraoka: Thank you very much. My name is Hiraoka from NewsPicks. This year, if there is no parts supply constraints, I believe the production should go up. In the case of Toyota, you have always been focusing on producing in Japan. Mr. Sato, what is your view on domestic production? Is it possible that you will recover the 3 million mark for a production? If there are more electrified vehicles, I believe the parts used will be different. What is your communications? How is your communications with the suppliers? Second, how to make profits and how to make sure that your products do not become commodities are important. You have many profitable vehicles, and that is the source of competitiveness.

[Analyst]: Thank you very much. My name is Hiraoka from NewsPicks. This year, if there is no parts supply constraints, I believe the production should go up. In the case of Toyota, you have always been focusing on producing in Japan. Mr. Sato, what is your view on domestic production? Is it possible that you will recover the 3 million mark for a production? If there are more electrified vehicles, I believe the parts used will be different. What is your communications? How is your communications with the suppliers? Second, how to make profits and how to make sure that your products do not become commodities are important. You have many profitable vehicles, and that is the source of competitiveness.

Thank you very much my name is gena OCA from newspaper.

Bob.

This year.

But if there is no our parts supply constraints I believe the production should go up but.

In the case of Toyota. They you have always been focusing on producing in Japan, which does that though what.

What is your view on domestic production.

On the call.

Who knows.

Is it possible that you will recover the 3 million Mark for our production is today are more electrified vehicles I believe on the parts use it will be a different so what is your communications how is your communications with suppliers.

The second.

Oh to make profits and how to make sure that you don't become commodities are important. So you have that many profitable vehicles and that is the source of our competitiveness, but at the same time that this and other.

Koji Sato: At the same time, BEV and other models, including all models, are you trying to make profits for all models? Your first question was about domestic production. For TMC, domestic production is the starting point in protecting our manufacturing in Japan. That positioning will not waver, and we will always consider how to protect manufacturing in Japan. With electrification, the parts used will change, including transactions with our suppliers. What is my forecast, I believe, was your second question. With electrification, of course, the parts used will be different. On the other hand, the supply chain is not just part of the business. Each party has its own strengths and respect each other as partners. With that stance, we do business with them in vehicle manufacturing.

[Analyst]: At the same time, BEV and other models, including all models, are you trying to make profits for all models?

Other monitoring, including Oh models I was trying to make profits for all models.

Okay.

Well they spoke mineral.

Koji Sato: Your first question was about domestic production. For TMC, domestic production is the starting point in protecting our manufacturing in Japan. That positioning will not waver, and we will always consider how to protect manufacturing in Japan. With electrification, the parts used will change, including transactions with our suppliers. What is my forecast, I believe, was your second question. With electrification, of course, the parts used will be different. On the other hand, the supply chain is not just part of the business. Each party has its own strengths and respect each other as partners. With that stance, we do business with them in vehicle manufacturing.

So your first question was about domestic production.

<unk> domestic production.

Yes.

The starting point in protecting.

Our manufacturing in Japan, so that positioning.

We will not waiver and we will always consider how to predict the manufacturing in Japan.

Yeah.

So with electrification.

The parts use will change.

And.

Including transactions with our suppliers. So what is my forecast I believe was your second question on all four.

We feel electrification of course supports use will be.

Different but on the other hand.

Sounds good.

The supply chain is not just part of the business. Each party has its own strength and respect each other as partners and with that stance.

We do business with them in vehicle manufacturing.

Koji Sato: Each supplier has their own strengths, and if you look at each piece of technology, even if the parts change, there are some suppliers who have advantages in specific areas. We will partner with them and communicate to them what kind of vehicles we want to produce. We will communicate that earlier than before, and we would like to create a business where we can capitalize on each other's strengths gradually. Your next question was what should we do to make sure that vehicles do not become commodities? As you mentioned, hybrid technology is one of our strengths. As I mentioned in my presentation, one of the growth areas is emerging countries. In these countries, CO2 reduction is necessary, and at the same time, demand is expected to grow.

So each supplier has their own strengths and if you look at each piece of technology, even if the pace of change.

There are some suppliers who have advantages in specific areas. So we will partner with them.

And communicate to them what kind of vehicles, we want to produce.

He will tell you though.

Communicate that earlier than before and we would like to create a business, where we can capitalize on each other's strengths gradually.

Got you.

Your next question was Oh, what should we do to make sure that vehicles to not become commodities as you mentioned hybrid technology is one of our strengths.

No.

And as I mentioned in my presentation.

Okay.

One of the growth areas is in emerging countries.

In these countries.

Oh, two a reduction.

These necessary and at the same time demand is expected to grow so with hybrid.

Koji Sato: With hybrids, securing a profit base is necessary, and we will have to be close to the local community to make ever better cars. On the other hand, we take a multipathway approach. That means we do not specialize in specific areas. We look at the characteristics of each area or geographic area, and we provide products that are most suitable for that region. Not only hybrids, but in all our vehicles, we need to provide vehicles that is very Toyota like. We are trying to look at how we can provide BEVs and various vehicles that are very car manufacturer like. It's not just the powertrain that changes. We are going to focus on BEV as well.

Securing a profit fee.

It is necessary and we will have to be close to the local community T to make ever better cars on the other hand, we take a multi pathway approach that means that we do not specialize in specific areas.

We.

If you look at it.

The characteristics in each area or geographic area and we provide our products that are most suitable for that region.

Not only hybrids are about being Oh, Oh vehicles. So we need to provide vehicles that is very Toyota are like.

We are trying to.

Look at how we can provide a bed and.

Various vehicles that are very car manufacturer like.

So no it's not just the powertrains that changes so.

We are.

Going to.

Focus on this as well and the purpose the purpose of establishing the new organization of the bed factory is that and we wanted to create appealing battery cars as well.

Koji Sato: The purpose of establishing the new organization of the BEV Factory is that we want to create appealing battery cars as well. One additional point. In domestic production, not only volume, but you're trying to make a profit through various supply chains, right? We're not just looking at TMC alone. We have some suppliers. With the suppliers, we want to change the characteristics of vehicles. In the past, the hardware accounted for the majority of the value of the vehicle. That was in the past, but now we have software and also post-marketing updates and customization is possible. We want to make sure that the vehicles meets the customer's demands more. It's not just the car manufacturers that should be making efforts.

One additional point in domestic production.

Not only volume, but you're trying to make a profit through various supply chains right.

So we're not just looking at TMC alone.

We have suppliers so with the suppliers. So we wanted to change.

What are the characteristics of our vehicles in the past the hardware.

Accounted for the majority of the value of the vehicle that was in the past, but now we have the software and also.

Hello.

Post marketing data and customization.

As possible so we want to make sure that the vehicles.

Okay.

Amit the customers' demands more.

Not just the car manufacturers that you'd be making efforts, we have to work with many suppliers and Oh.

Koji Sato: We have to work with many suppliers and capitalize upon our advantages so that we can transform mobility. Thank you, Yuji Hiraoka sir. Next question. The person at the very front.

Koji Sato: We have to work with many suppliers and capitalize upon our advantages so that we can transform mobility.

Capitalized upon our advantages so that weekend and transform.

Mobility.

[Company Representative] (Toyota Motor Corp): Thank you, Hiraoka-san. Next question. The person at the very front.

Okay.

Thank you Rocco.

Next question.

And the person at the very front.

Uh huh.

Hans: I'm Hans from Automotive News. I'd like to ask,

Hans Greimel: I'm Hans from Automotive News. I'd like to ask [uncertain] Today I have two questions. One is about production, and one is about the profit structure for EVs. About production, it seems that you are aiming for maybe a record production in the current fiscal year. Is that correct? How do you expect to get there? Is the chip crisis then seeing an end? Do you have some kind of new approach to securing enough chips, or is it naturally coming to an end? How do you get this new production to a new record level? The second question is about the BEV profit structure after 2026.

Uh huh.

Yes.

So I'm, a handsome automotive news I'd like to ask them.

Koji Sato: Please.

Hans: Today I have two questions. One is about production, and one is about the profit structure for EVs. About production, it seems that you are aiming for maybe a record production in the current fiscal year. Is that correct? How do you expect to get there? Is the chip crisis then seeing an end? Do you have some kind of new approach to securing enough chips, or is it naturally coming to an end? How do you get this new production to a new record level? The second question is about the BEV profit structure after 2026.

Question one.

It's about production and one is about the profit structure for Evs.

About production. It seems that you are aiming for a maybe a record production in the current fiscal year is that correct.

And how do you expect to get there. It is the chip crisis than seeing an end do you have some kind of new.

<unk> approach to securing enough chips or is it naturally coming into it and how do you get this new production to a.

A new record level.

The second question is about the B E V profit structure.

After 2026.

Hans: Right now you have an operating profit margin around 7%, but in 2026, you want to introduce a new platform which will have lower costs, maybe faster turnaround time, and also new revenue sources through the software side. What do you imagine the profitability to be like in the second half of the 2020s compared to today? Will it be higher? Often we think about EVs as being more expensive or more costly with slimmer margins, but maybe it's the opposite. That will be a turning point for higher margins. Thank you.

Hans Greimel: Right now you have an operating profit margin around 7%, but in 2026, you want to introduce a new platform which will have lower costs, maybe faster turnaround time, and also new revenue sources through the software side. What do you imagine the profitability to be like in the second half of the 2020s compared to today? Will it be higher? Often we think about EVs as being more expensive or more costly with slimmer margins, but maybe it's the opposite. That will be a turning point for higher margins. Thank you.

Right now you have a operating profit margin around 7%.

But into 2026, you wanted to introduce a new platform, which will have lower costs, maybe faster turnaround time and also new revenue sources through the software side.

What do you imagine the profitability to be like in the second half of the 2000 twenty's compared to today will it be higher often we think about.

E vs as being a more expensive or more costly with slimmer margins, but maybe it's the opposite that will be a turning point for higher margins.

[Translator]: [Non-English content]

Thank you.

Yeah.

I Miss it.

Right.

And so that's easy.

Koji Sato: Thank you for that, question. Regarding the first question, I would like to answer. I think related to the first question, the previous term, we wanted to deliver as early as possible to the customers' demand, but we were not able to fulfill, the demand. The numbers that we have cited are, an accumulation of the response of the production site to the customers' needs and also the product that we want to launch going forward. Regarding that, we believe that, we can probably set a base volume of 10.1 million units, as was mentioned earlier. These, 10.1 million units, as Hans-san, questioned earlier, how do we intend to achieve those goals because we were having such difficulty manufacturing last year? That's probably the point of your question.

E D.

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No.

This good anymore.

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Regarding the first question I would like to answer.

Okay.

I think.

Related to the first question.

<unk>.

Previous time.

We wanted to deliver as early as possible to the customers' demand, but we were not able to fulfill all the demand and so the numbers that we have cited.

Oh no.

Oh, an accumulation of the response of the production sites to the customers' needs and.

Also the product that we wanted to launch going forward. So regarding that so we believe that we can probably set a base volume of $10 1 million units as was mentioned earlier.

A $10 1 million again, it's Adam Sun.

Question earlier.

Greetings.

Oh, how do we intend to achieve those goals because we were having such a difficult manufacturing last year, that's probably the point of your question, but one year ago.

Koji Sato: One year ago, we had no idea which semiconductor chips will be in short supply at what time. As Sato said, suddenly there would be a shortage of components, and we had to lose the production volume against the plan. That was the situation that continued last year. We want to make these risk semiconductors visible, and once we gained visibilities, then we will change the design so that we can have alternative sources and the sellers will try to actively sell the non-risk semiconductors. Through these efforts over one year, although things are not perfect, our ability and power to manage semiconductor supply has been greatly improved. As a new base volume, we believe that the 10.1 million units is a feasible number that we can cite.

Got you.

We had no idea, which semiconductor chips will be in short supply at one time, so a subtle said.

Okay.

Suddenly there would be a shortage of components and we had to lose the production volume against the plan that supposed to situations that continued last year, but we wanted to make visa risks semiconductors visible amongst regained visibility then we will change the design.

So that we can have alternative sources and they are sellers.

Yeah.

Bill.

People are trying to actively sell the non risk of semiconductors.

And through these efforts over one year or those things are not perfect.

Uh huh.

Thank you.

Ability and power to manage and semiconductor supply has been greatly improved and so as the new base volume are we okay.

I believe that the $10 1 million units is it feasible is the number that we can cite what we want is a customer of smiles and for that Oh, we want to each person in the production side or in the regions to set up a good communication and relationship with the customers and as a result of a folk.

Koji Sato: What we want is the customer's smile, and for that, we want each person in the production site or in the regions to set up a good communication relationship with the customers. As a result of a focus on our product and manufacturing, we were able to cite this number of 10.1 million. As you said, our base volume would be a record number of vehicle sales. May I respond to the second question? Hans-san, thank you for that question. After 2026, we intend to launch next generation BEVs, and it was explained at the policy meeting earlier, the key point would be how to reduce costs. I think that is one angle that's critical.

On a product and manufacturing we were able to I E.

To cite this number of $10 1 million or so as you said Oh, our base volume it would be a record.

Number of vehicles.

Vehicle sales.

So may I respond to the second question Hassan. Thank you for that question.

After 2026.

We intended to launch a next generation battery vs and Oh, that's what's explained at the policy meeting earlier the.

Key point would be how to reduce cost.

I think I just wanted to angle that is critical in the case of battery Evs as you know the proportion of batteries.

Hiroki Nakajima: In the case of battery EVs, as you know, the proportion of batteries against the total cost structure is very high. How to develop a car or design a car that can most efficiently utilize the power of the battery. Now, through the development and manufacture of battery EVs, we've learned a lot of things, so we want to incorporate these learnings, and at the same time, the next generation BEV must change the factories themselves. We are now discussing this point. The manufacturing process itself will be totally changed. It's not placing an engine on the body and then assembling parts on top. A totally new and refreshed process, for example, reducing the total line by half or improving the production efficiency.

Koji Sato: In the case of battery EVs, as you know, the proportion of batteries against the total cost structure is very high. How to develop a car or design a car that can most efficiently utilize the power of the battery. Now, through the development and manufacture of battery EVs, we've learned a lot of things, so we want to incorporate these learnings, and at the same time, the next generation BEV must change the factories themselves. We are now discussing this point. The manufacturing process itself will be totally changed. It's not placing an engine on the body and then assembling parts on top. A totally new and refreshed process, for example, reducing the total line by half or improving the production efficiency.

Against the total cost structure is very high so how to develop a car or a design a car that can most efficiently utilize the power of the battery now battery EV through the development and manufacture of battery needs to be blind to a lot of things. So we want to incorporate these learnings and at the same time our next tenure.

I shouldn't be he viewed must machines just talk to eat themselves and so we are now discussing at this point. So the manufacturing process itself will be totally changed so it's not a place in an engine on the body and then assembling our pipes on top.

Totally new and refreshed.

Our process for example, reducing the total line by half or improving the production efficiency through these very drastic improvements who you'd like to reduce the manufacturing cost. So how do we use the increasing costs it will be a key factor.

Hiroki Nakajima: Through these very drastic improvements, we would like to reduce costs, the manufacturing costs. How to reduce the increasing costs will be a key factor. Another factor is, as Hans-san said, battery EV value add must be improved. I think this is adding intelligence. Adding intelligence is most important. There are some appealing, attractive software using a product value add that can only be achieved with the BEV. We believe it's possible to enhance the customer's experience value as a result of this. We just earlier released a new news on the new organization, and leaders who have learned in China under new team membership will grapple with developing a new battery EV. We have just started this team's activities.

Koji Sato: Through these very drastic improvements, we would like to reduce costs, the manufacturing costs. How to reduce the increasing costs will be a key factor. Another factor is, as Hans-san said, battery EV value add must be improved. I think this is adding intelligence. Adding intelligence is most important. There are some appealing, attractive software using a product value add that can only be achieved with the BEV. We believe it's possible to enhance the customer's experience value as a result of this. We just earlier released a new news on the new organization, and leaders who have learned in China under new team membership will grapple with developing a new battery EV. We have just started this team's activities.

And another factor is as Don said.

Battery easy.

Value add must be improved and I think this is adding intelligence, adding intelligence is most important.

There are some appealing attractive software using our product.

Value added that can only be achieved with the BDC and we believe it's possible to enhance the customer experience value as a result of this and so be it.

Earlier released.

New news on the new organization and leaders who have learnt in China.

Under our new team members ship, Oh, we'll grapple with developing a new battery EV. So we have just started this done most of the team's activity. So I do hope that you will support these activities going forward. That's all thank you.

Hiroki Nakajima: I do hope that you will support these activities going forward as well. Thank you.

Koji Sato: I do hope that you will support these activities going forward as well. Thank you.

Hans: What about the profitability level in the later half of the 2020s? Will it be comparable to what we see today or higher?

Hans Greimel: What about the profitability level in the later half of the 2020s? Will it be comparable to what we see today or higher?

And so what about the profitability level in the later half of the 2000 twenty's will be comparable to what we see today or higher.

[Translator]: [Non-English content]

Hiroki Nakajima: Well, not only battery EVs, but we'll be delivering various electrified vehicles through multi pathways. We want to secure the same level of profitability as today. We've already said this earlier. There may be various difficulties, but we want to deliver even better cars to customers. By pursuing this goal, we believe that we should be able to achieve that goal of profitability. Thank you.

Koji Sato: Well, not only battery EVs, but we'll be delivering various electrified vehicles through multi pathways. We want to secure the same level of profitability as today. We've already said this earlier. There may be various difficulties, but we want to deliver even better cars to customers. By pursuing this goal, we believe that we should be able to achieve that goal of profitability. Thank you.

So when you're saying you're doing and I know cole Haan, nor do you keep D to the extent you see double digits.

We're talking about a dog.

Our Muslim Booker.

Not only battery evs, but oh, we'll be delivering a various electrified vehicles through multi pathway. So we wanted to secure the same level of profitability. Today. We've already said this earlier there may be various difficulties, but we want to deliver even better cars to customers and by pursuing this goal.

We believe that we should be able to achieve that goal of profitability. Thank you.

Any of those I myself.

Irie: Thank you very much. Now to the next question. The person in the fifth row from the front.

[Company Representative] (Toyota Motor Corp): Thank you very much. Now to the next question. The person in the fifth row from the front.

Thank you very much.

Now to the next question.

Yeah.

The person in the fifth row from the front.

Yamane: My name is Yamane from NHK. I have two questions. The first question is related to the number 10.1 million production. So this number, you're not pursuing volume. Is that the intent? That is my first question. Second, question is about the Chinese business. Mr. Miyazaki said last year sales volume went down. New energy vehicles are increasing and the Japanese makes are struggling in the Chinese market. So at TMC, what is your stance on the current state of the Chinese market, which is said to be the largest in the world, and what about your future prospects?

[Analyst]: My name is Yamane from NHK. I have two questions. The first question is related to the number 10.1 million production. This number, you're not pursuing volume. Is that the intent? That is my first question. Second, question is about the Chinese business. Mr. Miyazaki said last year sales volume went down. New energy vehicles are increasing and the Japanese makes are struggling in the Chinese market. At TMC, what is your stance on the current state of the Chinese market, which is said to be the largest in the world, and what about your future prospects?

My name is Yamana from NHK news I have two questions. The first question is related.

Two the number of $10 1 million production.

Okay.

So this was.

Number.

You are now pursuing volume is that the intent.

And that is my first question and second question is about the Chinese business.

Mr. <unk> said and lost their sales volume went down.

Okay.

And you and new energy vehicles.

Increasing.

The Japanese makes us struggling in the Chinese market. So.

TMT and what is your stance on the current state of the Chinese market would you say it could be the largest in the world and what about your future prospects.

Koji Sato: Thank you very much for your question. 10.1 sales volume forecast. As Mr. Miyazaki mentioned, we need production and sales that will be able to meet the demand so that we'll be able to meet the needs of the customers. Ultimately, we need to be selected by the customers, and only when that happens, we'll be able to achieve that number. Chinese business will be discussed by Mr. Miyazaki. On the Chinese business, looking back on the results of last year, we weren't able to secure sufficient semiconductors. Something that is specific to China was the COVID impact from the beginning of the year. Demand went down from time to time. Lexus exported to China from Japan went down last year.

Okay.

Thank you very much for your question 10.1, and sales volume forecast actually sound like me as I can't mention.

So.

We need production and sales that we'll be able to meet the demand. So that we will be able to meet.

The needs of our customers.

No.

Ultimately, we need to be selected by the customers and when that only when that happens, we'll be able to achieve that number and our Chinese business will be discussed by Mr. Me as I can.

On the Chinese business.

And looking back on the results over the last year.

We weren't able to secure sufficient to semiconductors.

Something that is specific to China, what the COVID-19 impact from the beginning of the year.

So demand all went down from time to time.

Yes.

So Nick this is exported to China from Japan went down.

Last year.

Got it.

Yoichi Miyazaki: However, as you know, in China, we have local businesses. If you look at Chinese business overall, last year, although we were struggling in terms of volume compared to the previous year, our share increased steadily in the Chinese market. Many people look at the BEV market alone, but in China, there is the hybrids, the PHEVs as well, and many of our customers are using these vehicles. Last year, our share has gone up to around 9%. The market will continue to be very competitive. However, vehicles that will be loved by Chinese customers and vehicles that will please the Chinese customers is something that we will continue to pursue. As a result, we will make efforts so that as a result our business will grow.

Koji Sato: However, as you know, in China, we have local businesses. If you look at Chinese business overall, last year, although we were struggling in terms of volume compared to the previous year, our share increased steadily in the Chinese market. Many people look at the BEV market alone, but in China, there is the hybrids, the PHEVs as well, and many of our customers are using these vehicles. Last year, our share has gone up to around 9%. The market will continue to be very competitive. However, vehicles that will be loved by Chinese customers and vehicles that will please the Chinese customers is something that we will continue to pursue. As a result, we will make efforts so that as a result our business will grow.

Okay.

However, as you know.

And in China, we have a local businesses. So if you look at Chinese business overall.

Last year, although we were struggling in terms of volume compared to the previous year, our share increased steadily in the Chinese market.

Hello, everyone.

Yeah.

Many people to look at the beef market alone, but in China. There is a hybrid of ph evs as well and in many of our customers are using these vehicles and last year.

Our share has gone up to around 9%.

So the market will continue to be very competitive however.

Vehicles that will be lost like Chinese customers and vehicles.

That will please the Chinese market.

Customers is something that we will continue to pursue.

And as a result, Oh, we will make efforts so that as a result of our business will grow let me add one point from my side.

Yoichi Miyazaki: Let me add one point from my side. Our product competitiveness, the products or the markets in China is changing very quickly. As we mentioned at the Shanghai Motor Show, in a timely manner, we need to provide vehicles that will be loved by Chinese customers. Therefore, we have development sites in China, and we're trying to localize development in China so that we can develop at a place that is close to the customer and catch up with the demands of the customers in the Chinese market.

Sure.

Our product competitiveness.

Or.

The products or the market in China is changing very quickly as well.

You mentioned that the Shanghai Motor show and its timely matter, we mean to provide vehicles that would be loved by Chinese customers and therefore, we have development sites in China, and we're trying to localize it development in China. So that we can develop at a place that is close to the customer and catch up with the demand of the customer.

In the Chinese market.

Irie: Thank you, Yamane sir. Any further questions? Yes, the person in the front row again.

[Company Representative] (Toyota Motor Corp): Thank you, Yamane sir. Any further questions? Yes, the person in the front row again.

Thank you Melissa.

Okay.

Other questions, yes, the person in the front cool again.

Umeda: Umeda from TBS. I have two questions. Both have to do with battery EVs. The first question is to Executive Vice President Hiroki Nakajima. You just explained about the BEV and how you view the Chinese market for BEV. Could you be more specific. You went to the Shanghai Motor Show, and I think from the viewpoint of genchi genbutsu, going to the site to see the facts, what is your impression of the Chinese market shift to electrified vehicles? And as Toyota, what do you think is you're lacking in terms of product development? What do you have to change in order to address the Chinese market? Could you be specific about this? Second question is to President Koji Sato. The battery EV interim objective target of 1.5 million was announced last month.

[Analyst]: Umeda from TBS. I have two questions. Both have to do with battery EVs. The first question is to Executive Vice President Hiroki Nakajima. You just explained about the BEV and how you view the Chinese market for BEV. Could you be more specific. You went to the Shanghai Motor Show, and I think from the viewpoint of genchi genbutsu, going to the site to see the facts, what is your impression of the Chinese market shift to electrified vehicles? As Toyota, what do you think is you're lacking in terms of product development? What do you have to change in order to address the Chinese market? Could you be specific about this? Second question is to President Koji Sato. The battery EV interim objective target of 1.5 million was announced last month.

Meda from TBS.

I have two questions.

Both have to do with battery EV and I don't know my first question is to exit Vice President Jim Amit.

You just explain how about the BD.

And how you view the Chinese market for Bebe, So could you be more specific.

Okay.

You went to the Shanghai Motor show.

And I think from the viewpoint of game chicken boots are going to the site to see the effect.

What is your impression of the Chinese market shifts to electrified vehicles and.

Toyota.

What do you think.

Youre lacking.

In terms of product development, what do you have to change in order to address the Chinese market. So could you be specific about this second question is depressed.

The battery EV interim.

<unk> objective.

Target to $1 5 million, who was announced last month and you said that youll be injecting three trillion yen in R&D.

Hiroki Nakajima: You said that you'll be injecting JPY 3 trillion in R&D for BEV this term. In order to achieve your goals, what specifically do you intend to do within the extent possible to disclose? Thank you, Umeda-san. Going on to the first question first, as you said, we went to the Shanghai Motor Show. Frankly, I was totally amazed, especially the electrification of battery EV was progressing very rapidly. Not only that, but that's already taken for granted and that differentiation and competition over differentiating through adding intelligence was much faster than we expected. As I said, Chinese customers, how to timely deliver on their needs, for example, infotainment, digital cockpit development.

[Analyst]: You said that you'll be injecting JPY 3 trillion in R&D for BEV this term. In order to achieve your goals, what specifically do you intend to do within the extent possible to disclose? Thank you, Umeda-san. Going on to the first question first, as you said, we went to the Shanghai Motor Show. Frankly, I was totally amazed, especially the electrification of battery EV was progressing very rapidly. Not only that, but that's already taken for granted and that differentiation and competition over differentiating through adding intelligence was much faster than we expected. As I said, Chinese customers, how to timely deliver on their needs, for example, infotainment, digital cockpit development.

For Beth.

At this time, so I noticed your goals, what specifically do you intend to do.

Within the extent possible disclose thank you made it sound so going on the first question first.

As you said when we went to the Shanghai Motor show frankly.

I was totally amazed.

Especially the electrification or battery EV. So it was progressing very rapidly, but not only that but that's already taken for granted and that differentiation and competition over different differentiating through adding intelligence, who was much faster than we expected and as I said Chinese customers.

Got it.

How to timely deliver on their needs for example, infotainment digital cockpit.

That development.

Hiroki Nakajima: It'll take too long if we were to develop in Japan, so that's why we want to accelerate localization. Also, we wanted to gain the cooperation of the local suppliers in speeding up our endeavors. Thank you. Regarding the second question, 1.5 million units is not a target per se, but it's a base volume, a criteria that we want to work towards. As I said, not only Toyota, but many suppliers, many dealers will be all cooperating to make the shift toward battery EV. We have to set the pace and show the pace to the others. That's our viewpoint. Against that backdrop, as I said earlier, we must first of all create a firm lineup of products. Immediately, we already have several models of battery EVs launched in the market.

It will take too long, but if we were to develop in Japan. So that's why we wanted to look at.

Localization also we wanted to gain the cooperation of the local suppliers in.

Eating up her endeavors. Thank you regarding the second question.

Koji Sato: Regarding the second question, 1.5 million units is not a target per se, but it's a base volume, a criteria that we want to work towards. As I said, not only Toyota, but many suppliers, many dealers will be all cooperating to make the shift toward battery EV. We have to set the pace and show the pace to the others. That's our viewpoint. Against that backdrop, as I said earlier, we must first of all create a firm lineup of products. Immediately, we already have several models of battery EVs launched in the market.

$1 5 million units is not a target per se, but it's a base volume a criteria that we want to work for it and as I said, not only Toyota, but many suppliers that many dealers that will be all cooperating to make the shift toward battery elite.

So we have to set the pace and show the pace to the others.

So that's of your point.

Against that backdrop as I said earlier, we must first of all create a firm lineup of products and maybe already have several models of battery Evs launched in the market.

Koji Sato: We have received a lot of feedback from the market. We want to improve our marketing power and market or product development power in an agile manner. That's critical. Cruising range and the charging time necessary, there are voices requiring so improvements there. We want to speed up the efforts to improve the marketing power of our product. Also, we want to engage in speedy Toyota-like Kaizen and entice as many people as possible to want to ride Toyota BEVs. We must afford a lineup that will not fail the expectations. Of course, China and the United States will be the central market. Not only Toyota alone, but we want to collaborate with our partners to respond to.

We have received a lot of feedback from the market and so we want to improve our marketing power market or product development power in an agile manner, that's critical and cruising range and charging time necessary. There are voices are requiring guy there are improvements there. So we want to speed up.

The efforts to improve the marketing power of our product also Oh, we wanted to engaging feeney Toyota like Kaiser and.

We need more than twice as.

As many people as possible to want to ride the Toyota B E L F.

The Marcellus.

I saw the lineup that will not fail the expectations and of course, such as China, and the United States there'll be the central market.

No.

Not only do it alone, but we want to collaborate with our partners.

Okay.

To respond.

Koji Sato: With a good full lineup to respond to customers' needs and also to provide and develop products that have a Toyota-like appeal and specific attractiveness to customers.

So too with a good full lineup to respond to customers' needs and also to provide and develop products that have a toyota like appeal specific attractiveness to customers.

Irie: Thank you very much to Mr. Umeda. The person along the aisle in the middle.

[Company Representative] (Toyota Motor Corp): Thank you very much to Mr. Umeda. The person along the aisle in the middle.

Right.

Thank you very much to me Sunita.

Yeah.

The person along the aisle.

In the middle.

Oh.

Narabi: My name is Narabi from The Asahi Shimbun. I have two questions. The first question is about the soaring material costs. Parts prices and supporting suppliers is something that you are doing, including paying for utility charges. Toyota can only directly support the primary suppliers, but you have a secondary or tier three suppliers. What is the current status at these tier two or three suppliers? The impact of soaring material prices, we understand. So how much support went to suppliers? And what kind of support will continue till when, is another question I would like to ask. My second topic is related to what Mr. Sato mentioned at the outset, which is about Daihatsu.

[Analyst]: My name is Narabi from The Asahi Shimbun. I have two questions. The first question is about the soaring material costs. Parts prices and supporting suppliers is something that you are doing, including paying for utility charges. Toyota can only directly support the primary suppliers, but you have a secondary or tier three suppliers. What is the current status at these tier two or three suppliers? The impact of soaring material prices, we understand. How much support went to suppliers? What kind of support will continue till when, is another question I would like to ask. My second topic is related to what Mr. Sato mentioned at the outset, which is about Daihatsu.

My name is notably from the Asahi Shimbun I have two questions.

The first question is about our sorting material cost.

Yeah.

Our parts.

Okay.

Hum parts prices and supporting our suppliers is something that you are doing including I'm paying for utility charges.

Yeah.

Okay.

I do it I can only directly supports the primary suppliers, but do you have a secondary or tier three suppliers. What is the current status of these tier two or three suppliers at the moment to 51 million.

The impact of absorbing material prices, we understand.

So how much support.

Went to his suppliers and what kind of support will continue to win is another question I would like to ask and my second topic.

Is related to what Mr. Sato mentioned at the outset, which is about diehard too.

Koji Sato: In the automobile industry, you have the suppliers and you have the dealers, so many people are involved in the industry. These people working together is part of the strength of the industry. That may have turned into pressure, like, not being able to change the plans. Some people say that may be at the root cause of this problem. Mr. Sato, you mentioned the development environment possibly being a problem, and you also talked about creating an environment in which you can speak your mind. You also talked about making an environment where people can freely talk. About, you are about to identify the root cause, but what is your current stance on governance and corporate culture? Thank you very much for your question. Your first question was about soaring material costs.

[Analyst]: In the automobile industry, you have the suppliers and you have the dealers, so many people are involved in the industry. These people working together is part of the strength of the industry. That may have turned into pressure, like not being able to change the plans. Some people say that may be at the root cause of this problem. Mr. Sato, you mentioned the development environment possibly being a problem, and you also talked about creating an environment in which you can speak your mind. You also talked about making an environment where people can freely talk. You are about to identify the root cause, but what is your current stance on governance and corporate culture?

In the automobile industry, you have the suppliers and you have that either so many people are involved in the industry and these people working together as part of the strength of the industry.

Yeah.

Okay.

And did that may have turned into pressure.

Like I'm not being able to change the plan said that some people say that that may be at the root cause of this problem.

Mr. Sergio you mentioned the development environment, possibly being a problem and you also talked about being an environment in which you can speak your mind and you also talked about I'd be making it an environment where people can sleep freely talk.

So about you are about to identify the root cause but what is your current stance.

On governance and corporate culture.

Okay.

Koji Sato: Thank you very much for your question. Your first question was about soaring material costs.

Thank you very much for your question.

Your first question was about shoring material costs.

Koji Sato: With the suppliers, we've had close communication. We talk directly with Tier 1 suppliers. If you look at the numbers, changing the sales price and adjustment of purchase cost is something that you can see from the numbers. If you look at Tier 2 and Tier 3 suppliers, many people have different opinions, and we are still on our way to further improvement. Our intention is to protect the supply chain so that we can overcome the current rough times. We want to continue dialogue with the suppliers and continue the initiatives that we are undertaking. Another point is about this fiscal year. Overall, the general material prices have started to stabilize, and some, for some of the materials, the prices have started to come down.

Tom.

And with the suppliers. So we've had one close communication.

We talk directly with tier one suppliers.

And if you look at the numbers.

And changing the sales price and adjustment of.

Our purchase.

Costs.

Is it something that you can see from the numbers and.

If you look at them tier two and tier three.

Players are that many people have different opinions and we are still on our way too.

Further improvement but.

Well the our intent is to protect the supply chain. So that we can overcome the current rough times. So we want to continue dialog with the suppliers and continue the initiatives that we're undertaking.

And another point is about this fiscal year.

Overall.

The a general material prices have started to stabilize and some for some of the materials. The prices have started to come down.

Koji Sato: In particular, if you look at utility charges in Japan, over the past year, it has continued to increase, and this year it still stays at a high level. We need to continue to talk with the suppliers on that factor. TMC, in addition to TMC and suppliers, the JAMA or the automobile industry as a whole will have to tackle this together, and are actually trying to tackle this together. Your second question was about the Daihatsu issue. Let me talk about something that I have in mind. With regards to this, irregularity, this was about a certification or collision safety. This irregularity itself should never have happened, but it did happen, which means that there should be a root cause.

Koji Sato: In particular, if you look at utility charges in Japan, over the past year, it has continued to increase, and this year it still stays at a high level. We need to continue to talk with the suppliers on that factor. In addition to TMC and suppliers, the JAMA or the automobile industry as a whole will have to tackle this together, and are actually trying to tackle this together. Your second question was about the Daihatsu issue. Let me talk about something that I have in mind. With regards to this, irregularity, this was about a certification or collision safety. This irregularity itself should never have happened, but it did happen, which means that there should be a root cause.

But in particular, if you look at utility charges in Japan over the past year. It has continued to increase and this year it still stays at a high level.

So we need to continue to talk with our suppliers on that sector.

Yeah.

Cool.

So I can see it in addition to T N sand suppliers.

Jama.

Or the automobile industry as a whole will have to.

Taking all this together and all are actually trying to take all this together.

Your second question was about diehard two issues.

Well, let me talk about some things that I have in mind.

So with regards to this.

Irregularity this was about a certification or.

Collision safety.

And this week.

Everyday itself should never have happened, but it did happened and which means that there should be a root cause.

Koji Sato: How to identify the root cause and eliminate that root cause is something that we have to tackle. Blaming this on somebody is not the solution. We are in the auto industry, and there are rules in the industry, and we are manufacturing cars in this industry. There shouldn't be anybody who do a misconduct intentionally, but there was, which means that there should be some environmental factors. The subject vehicles, they are used by customers, and we have to make sure that we do not cause any inconvenience to the customers. We need to clarify what happened. As a first step, we need to identify that. We need to explain to the relevant parties, and we have to explain.

Oh.

Yeah.

Got it.

So how to identify the root cause and eliminate that root cause is something that we have to tackle.

Blaming this on somebody is not the solution.

We are in the auto industry and there are rules in the industry and we are manufacturing cars in this industry.

And.

Yeah.

There shouldn't be anybody who.

Thank God do misconduct intentionally but there was which means that there should be some environmental factors.

So.

The vehicles.

Subject vehicles.

They are used by customers and we have to make sure that we do not cause any inconvenience to the customers. So we need to clarify what happened and as a first step we need to identify that.

So.

Atlanta.

And also we need to explain to the relevant.

Parties.

And we have to explain we have already explained that two relevant parties and are starting to take initiatives to make sure that this does not happen again and there was something that we think is important.

Koji Sato: We have already explained that to relevant parties and started to take initiatives to make sure that this does not happen again. There's something that we think is important. The cause of issues like this is not a specific person. There was a mechanism or environment that forced that person to undertake a misconduct. We need to go to the gemba, repeat the discussions, and make sure that people speak their minds to us. We need to continue dialogue, and we need to put ourselves in their shoes and think and understand why this happened. The current situation will have to be accurately communicated to many people. We need to do away with the concerns, and we need to secure psychological safety.

Koji Sato: There's something that we think is important. The cause of issues like this is not a specific person. There was a mechanism or environment that forced that person to undertake a misconduct. We need to go to the gemba, repeat the discussions, and make sure that people speak their minds to us. We need to continue dialogue, and we need to put ourselves in their shoes and think and understand why this happened. The current situation will have to be accurately communicated to many people. We need to do away with the concerns, and we need to secure psychological safety.

Well.

Great.

Got it got it.

The cause of issues like these it is not.

Nuts.

Specific person.

Yeah, there was a mechanism or even government that forced that person to undertake a misconduct.

And we need to go to the Gamba number one other one.

And they got a repeat and discussions and to make sure that people talk their mindset to us and we need to continue the dialogue and we need to put ourselves in their shoes.

And I think and understand them well.

Why this happened.

Oh, okay.

Because I don't know.

You want to do.

The current situation will have to be accurately communicated to many people we need to do away with the concern.

And we need to secure a psychological safety.

We're going to move into almost every month.

Koji Sato: As I mentioned at the outset, Chairman Toyoda went to Thailand, which is a producing country and the main market of the target vehicle. Mr. Toyoda went to Thailand and met many stakeholders face to face and talked to them. Mr. Nagata was with Mr. Toyoda at that time. What is the thinking of Toyota in facing this issue will be discussed by Mr. Nagata. Thank you very much. My name is Nagata. The day before yesterday, which was Monday, with our chairman, I went to Thailand to explain. Basically, Yaris ATIV is produced in Thailand, and exports are made, and Thailand is a large volume market for Yaris ATIV.

As I mentioned at the outset.

All right.

Chairman Duda.

I went to Thailand, which is a producing country and the main market of the target vehicle. So Mr threw it over into Thailand.

I met many.

Stakeholders face to face.

And talk to them.

And Mr and I got a what's the base was with Mr. Taylor at that time.

So.

Oh, what is the thinking also Toyota in facing this issue will be discussed by Mr. <unk> I got that.

Jun Nagata: Thank you very much. My name is Nagata. The day before yesterday, which was Monday, with our chairman, I went to Thailand to explain. Basically, Yaris ATIV is produced in Thailand, and exports are made, and Thailand is a large volume market for Yaris ATIV.

Thank you very much my name is and I got that.

And the day before yesterday, which was one day with chairman.

I went to Thailand to explain basic.

Basically.

Yes.

Yes, <unk> is produced in Thailand, and experts are made and Thailand is a large volume market for years.

Jun Nagata: Basically, we knew that the vehicle was safe, so we wanted to communicate the fact that the vehicle is safe to the customers and stakeholders. As Mr. Sato mentioned at the outset, what we thought was important was that Thailand, to us, a Gateway Plant is producing the vehicle. With Daihatsu, we have a development site, which is TDM. The TDM members, many of them are from Daihatsu. The people producing the vehicle and the TDM members were all concerned and had anxiety about what was really happening. What is happening and the fact that the vehicle is safe, and as Mr.

Jun Nagata: Basically, we knew that the vehicle was safe, so we wanted to communicate the fact that the vehicle is safe to the customers and stakeholders. As Mr. Sato mentioned at the outset, what we thought was important was that Thailand as a Gateway Plant is producing the vehicle. With Daihatsu, we have a development site, which is TDEM. The TDEM members, many of them are from Daihatsu. The people producing the vehicle and the TDEM members were all concerned and had anxiety about what was really happening. What is happening and the fact that the vehicle is safe, and as Mr. Sato mentioned, Toyota is a company that stops things when a problem happens, and tries to identify the root cause until it is known and countermeasures are taken.

So basically.

Nishu.

Oh, we do that.

A D a.

Of equal was safe.

So we wanted to communicate the fact that the vehicles safer to the customers and stakeholders.

As Mr. Sato mentioned at the outset, what we thought was important was that.

Tied to it as a gateway factory is producing the vehicle and with diehard two we have a development site, which is T. J.

So the G. D members many of them are from die hard too.

So the people producing the vehicle and the team members, we're all concerned and had anxiety about what was really happening.

And so.

Oh, what is happening and the fact that the vehicle is safe and as Mr. Sato mentioned.

Jun Nagata: Sato mentioned, Toyota is a company that stops things when a problem happens, and tries to identify the root cause until it is known and countermeasures are taken. That cycle is repeated at Toyota. Toyota is a company where people can freely speak their minds. That was to be communicated to people in Thailand. The people producing the vehicles, the TDM, development, developers, dealers, we wanted to communicate that, this to these stakeholders. As you mentioned, for the group governance, we want to make sure that we have a culture where you can freely speak your mind, and we need to use a genchi genbutsu to identify the root cause. That is something that I learned anew at Thailand. We will collaborate with other group companies in tackling this issue.

And third there is a company.

That stopped things when a problem happens and try to identify the root cause until it is a known and countermeasures are taking that's likely to repeat at that Toyota.

Jun Nagata: That cycle is repeated at Toyota. Toyota is a company where people can freely speak their minds. That was to be communicated to people in Thailand. The people producing the vehicles, the TDEM, development, developers, dealers, we wanted to communicate that, this to these stakeholders. As you mentioned, for the group governance, we want to make sure that we have a culture where you can freely speak your mind, and we need to use a genchi genbutsu to identify the root cause. That is something that I learned anew at Thailand. We will collaborate with other group companies in tackling this issue. Thank you.

And.

The other day as a company where people can freely speak their mindset that wants to be communicated.

Two.

People in Thailand.

Producing the vehicles, the tee them develop it developers and dealers.

We wanted to communicate that.

This to these stakeholders.

Yeah.

So as you mentioned.

The like for the group governance, so we want to make sure that we have a culture, where you can see we speak your mind and do we need to use against your game, but you do identify the root cause.

Yes.

And that is something that I learned on you at time and so we will collaborate with other group companies in tackling this issue. Thank you.

Jun Nagata: Thank you. Thank you very much. We'd now like to receive questions from those reporters who are now online or participating online. We would like to take this time to entertain questions from online. Bloomberg's Inajima-san from Bloomberg. We will switch the screen. Please start speaking if you see your face on the screen, please.

[Company Representative] (Toyota Motor Corp): Thank you very much. We'd now like to receive questions from those reporters who are now online or participating online. We would like to take this time to entertain questions from online. Bloomberg's Inajima-san from Bloomberg. We will switch the screen. Please start speaking if you see your face on the screen, please.

They must stop.

Thank you very much.

Yeah.

We'd now like to receive questions from those reporters who are now online are participating online.

So we would like to take this time to enter.

Entertain questions of online of Bloomberg.

Oh, no he my son from Bloomberg.

Google switch the screen. So please start speaking if you see your face on the screen. Please.

Yeah.

Inajima: Hello, can you hear me?

Tsuyoshi Inajima: Hello, can you hear me?

Koji Sato: Yes, we hear you.

Hello can you hear me, yes, we hear you. Thank you.

Yoichi Miyazaki: Thank you. This is Inajima from Bloomberg. I have 2 questions as well. One is about dividend and the share repurchase. Regarding dividend, you will conduct an increase in dividend stably and continuously. As for share repurchase, conduct repurchases in a flexible manner, focusing in on our share price levels. How do you tend to do this for share repurchases? When you talk about share levels, would it be 1 times PBR? Would that be one of the factors for a share buyback? Or do you have some other criteria internally? When that internal threshold falls short, then you will for example, reduce the share repurchase volumes.

Tsuyoshi Inajima: Thank you. This is Inajima from Bloomberg. I have two questions as well. One is about dividend and the share repurchase. Regarding dividend, you will conduct an increase in dividend stably and continuously. As for share repurchase, conduct repurchases in a flexible manner, focusing in on our share price levels. How do you tend to do this for share repurchases? When you talk about share levels, would it be 1x PBR? Would that be one of the factors for a share buyback? Or do you have some other criteria internally, and when that internal threshold falls short, then you will for example, reduce the share repurchase volumes?

This is the nasty Muslim Bloomberg I have two questions as well.

One is about dividend and share repurchase regarding dividend you are real Olga.

Conduct.

Uh huh.

Increased dividend safely and continuously and that's of course share repurchase conduct repurchases in a flexible manner focusing in on our share price levels. So how do you tend to do this stuff for a share repurchases. When you think about the share level could it be a onetime C. D R.

Got it.

One of the factors for a share buyback.

Or do you have some other criteria internally and when that our internal threshold is for short and then you. All for example, reduce the shepherds purchase volumes also.

Inajima: Also, secondly, Sato, President Sato talked about the mobility show and that you show a concept car of the BEV at that show. The next generation BEV concept cars, which you intend to launch in 2026, will be shown at the mobility show in autumn. Is that what you meant?

Tsuyoshi Inajima: Also, secondly, President Sato talked about the mobility show and that you show a concept car of the BEV at that show. The next generation BEV concept cars, which you intend to launch in 2026, will be shown at the mobility show in autumn. Is that what you meant?

The first thing that I talked about the mobility show and that you show a concept car the beam E at that show and so.

The next generation B E Z concept cars, which you intend to launch in 2026 will be shown at the mobility showing all of them is that what you meant.

Yoichi Miyazaki: Thank you for that question. Yes. Regarding the dividend and share repurchase, as we explained, our major policy is to reset our approach to both, and that's what we have conveyed to you earlier. As we said earlier, up to now, in terms of dividend, we had a criterion of a consolidated payout ratio of 30% as a policy, but to please our shareholders? How can we contribute more to our shareholders? We had that sort of a discussion internally, and so we decided to increase dividends stably and continuously as a new revised policy. As a result

Thank you for that question, yes regarding the dividend and share repurchase as we explained our major policy.

Is to reset our approach to both of them and.

And that's what we have conveyed to you earlier as we said earlier up to now in terms of dividend.

I a criteria of consolidated payout ratio of 30% as a policy I'm budge.

Those shareholders what would please our shareholders how can we continue.

Contributes more to our shareholders, we had that sort of a discussion internally and so we decided to increase dividends stably and continuously as you revised policy.

And as a result.

Yoichi Miyazaki: Regarding share repurchases, of course, this will depend on share price levels, but the major policy is, as we have been saying all along, to be flexible in our approach. We will make judgments on the absolute value of our share repurchase flexibly. Our major revised policy is to focus more on dividends rather than share repurchases. Anything to add, Chief Officer, Accounting Group? We will look at the share price levels in our share repurchases. Our share price levels currently are not a satisfactory level at all for us. The P/B, it's of course below 1x PBR, and we also are not satisfied with this, and we take this very seriously. To prove this, for example, PBR can be divided into PER and ROE.

Regarding share repurchases of course, this will depend on share price levels, but the major policy is.

As we have been saying all along.

To be flexible.

Yoichi Miyazaki: We will make judgments on the absolute value of our share repurchase flexibly. Our major revised policy is to focus more on dividends rather than share repurchases. Anything to add, Chief Officer, Accounting Group? We will look at the share price levels in our share repurchases. Our share price levels currently are not a satisfactory level at all for us. It's of course below one 1x PBR, and we also are not satisfied with this, and we take this very seriously. To prove this, for example, PBR can be divided into PER and ROE.

Our approach and so we will.

Make judgments on the absolute value of our share repurchase and flexibly.

Okay.

Our major revised policy is to focus more on dividends rather than share repurchases.

Anything to add Chief Officer accounting group of people look at these share price levels in our share repurchases share price levels currently.

Not a satisfactory level at all for us.

P V.

So of course below or one times a P. B R. Until we also are not satisfied with this and so we take this very seriously think to prove this for example.

P b or can be dividing the P. R and R O E and Oh.

Masahiro Yamamoto: As Sato-san said, this mobility concept or electrification and adding intelligence and more functionality, how can we more specifically provide this to customers of this vision? I think that we must focus on developing and delivering cars that satisfy people's expectations. As for ROE, this is rather detailed, but of course, we have achieved this ROE with some intention, for example, in finance or inventory. In this automobile industry, we have to defend this industry. When we experience various natural disasters, then we have to have on hand finance which could sustain our business operations for the next six months. That's a role.

Yoichi Miyazaki: As Sato-san said, this mobility concept or electrification and adding intelligence and more functionality, how can we more specifically provide this to customers of this vision? I think that we must focus on developing and delivering cars that satisfy people's expectations. As for ROE, this is rather detailed, but of course, we have achieved this ROE with some intention, for example, in finance or inventory. In this automobile industry, we have to defend this industry. When we experience various natural disasters, then we have to have on hand finance which could sustain our business operations for the next six months. That's a role.

Zero.

And said this mobility concept or electrification and adding intelligence and a more functionality how can we be more specifically.

Yeah.

We provide this to customers of the vision I think that we must focus on developing and delivering cost that satisfy people's expectations are for our O E. This is rather detailed but oh.

Of course there'll be have achieved this already with some intention intend to lay for example in the finance or IL.

Inventory.

And Oh.

This automobile industry.

We have to defend this industry and when we experienced various natural disasters.

Then we had to have on hand, finance, which could sustain our business operations for the next six months or so that's a rule and also last year semiconductors.

Masahiro Yamamoto: Also last year, semiconductors, and when production was reduced, then we had to protect the supply chain and our assets, which means that we have to hold a certain level of inventory to do that. The entire automotive industry has to work together and fight together. I believe that part of the ROE numbers include this intentional measure. We are not at all satisfied with the results, so we would like to continue to make improvements against these numbers. Thank you. Let me try to respond to the second question, Inajima-san. The next generation battery EV, would we be showing them in the 2026 mobility show? The answer is yes. Well, rather than explaining words, we thought it was much better to have you see the concept models and give us your feedback.

Yoichi Miyazaki: Also last year, semiconductors, and when production was reduced, then we had to protect the supply chain and our assets, which means that we have to hold a certain level of inventory to do that. The entire automotive industry has to work together and fight together. I believe that part of the ROE numbers include this intentional measure. We are not at all satisfied with the results, so we would like to continue to make improvements against these numbers. Thank you.

Ooh and Ah when production was reduced and then we had the two.

Protect the supply chain and our assets, which means that we have to hold a certain level of inventory.

To do that so the entire automotive industry to work together and fight together and I believe that part of the raw numbers include this intentional.

So we are not at all satisfied with the result, so we would like to continue to make improvements I guess, even the numbers. Thank you.

Koji Sato: Let me try to respond to the second question, Inajima-san. The next generation battery EV, would we be showing them in the 2026 mobility show? The answer is yes. Well, rather than explaining words, we thought it was much better to have you see the concept models and give us your feedback.

Let me try to respond to the second question relates to my phone for the next generation battery EV would we be showing them. Neither twenty-six mobility show the answer is yes.

So.

Rather than.

Explaining where we thought it was much better to have you'll see the concept models and give us your feedback so we decided to showcase it.

Koji Sato: We decided to showcase it at the mobility show. As was released today, the new organization called the BEV Factory, and Kato-san will be the head of this. Kato-san was developing battery EVs in China previously. Let me share with you his comment. He said that he wants to change the future of cars with these next generation BEVs. When he talks about the future, of course, he's talking about the future of cars, both in form, as well as the adding of intelligence to cars. The second point with the factories, that is to change the future of the production factories. We will have a wholesale change of the manufacturing process.

The mobility shows I supposed released today, the new organization called the best factory.

Awesome.

Kratos is done will be the head of this cut the Sun was developing battery Evs in China previously and let me show and.

Share with you his comment he said that.

He wants to change the future of cars with visa next generation Bv's when he talks about the future of course, he's talking about the future of cars both the for both in <unk> as well as the adding of intelligence to Cod and the second point would be factories that is to change the future of the production.

And so we will have a wholesale change.

Koji Sato: Also, the change, our change of work, the way we work, must also be revised in a large manner toward the future. As you know, within the group, we have Woven by Toyota and various other venture companies. We have a lot of connections with Toyota Ventures, et cetera. We will continue aggressive investment into these endeavors. With various partners and various friends and colleagues, we within the canvas of next generation BEV, we want to consider how we can change the future vision and change the way we work. This is of course Kato-san's personal views, but I do hope that you will watch, see the showcase of our new concept BEV models in the fall mobility show. Please look forward to it.

The manufacturing process also the change or change of work the way. We work must also be revised in our lives.

For the future and as you know within the group, we have woven by Toyota and there's other venture car companies. They have a lot of our connections with Toyota ventures etcetera. So we will continue aggressive investment into the city.

These endeavored so with various partners in various friends and colleagues.

Within the campus over the next 10 years to be really wanted to consider how we can change our future vision and change the way we work and so this is of course cutoff personal views, but I do hope that you.

Do you see as a showcase of our new concept the models in the fault mobility show.

So please look forward to it.

Koji Sato: Now we will take another question online from The Wall Street Journal, Mr. River Davis.

[Company Representative] (Toyota Motor Corp): Now we will take another question online from The Wall Street Journal, Ms. River Davis.

Now we will take another question on line from Wall Street Journal Mr. Davis.

River Davis: Hello, this is River Davis from The Wall Street Journal. Thank you very much for taking my question. I wanted to ask two follow-up questions. The first is on the China market. We heard a lot from auto executives coming back to Japan about how they felt there was a lot of competition that they realized is happening in China, and that they needed to find their own unique strategy of remaining relevant. Miyazaki-san, you spoke about the strength of hybrids in China. Do you feel like this is a unique kind of weapon for Toyota in that market going forward? My second question is on EVs and profitability. Last month, you spoke a lot about kind of how great profit margins are on hybrid vehicles at the moment.

Yeah.

Hello. This is Richard Davis from the Wall Street Journal. Thank you very much for taking my question.

I wanted to ask two follow up questions. The first is on the China market, we heard a lot from auto executives coming back to Japan about how they felt there was a lot of competition that they realized it's happening in China and that they needed to find their own unique strategy of remaining relevant EMEA.

It feels like something you spoke about the strength of hybrids in China do you feel like this is a unique kind of weapon for Toyota in that market going forward.

And my second question is on Evs and profitability.

Last month, you spoke a lot about kind of how great profit margins are on hybrid vehicles at the moment.

River Davis: As you're looking towards the 2026 EV target, the 2030 EV sales target, how do you prioritize maximizing profitability versus attaining those EV targets? Thank you.

So as Youre looking towards the 2026 EV target between 30, you your sales target, how do you prioritize maximizing profitability versus attaining those easy targets.

[Translator]: [Non-English content]

Thank you.

Yeah.

Yoichi Miyazaki: Thank you. Thank you very much. The Wall Street Journal's River Davis. This is Miyazaki speaking. I will be responding to your first question. How we compete as of today and how we compete in the future is something that I would like to talk about. As Mr. Nakajima mentioned, what we saw at the motor show was something that we were surprised with. For China, from a global perspective, just like the United States, they are moving quickly to battery EV. For China, we want to prepare a solid battery EV strategy. The question is, including Chinese makes, how are we going to compete in BEVs? First we need to identify the needs of the Chinese customers and supply vehicles that are very much like a car manufacturer's vehicle.

Right.

It's almost equal in our stores.

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This schedule and lots of other geographies you only need to read it as it shows.

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They don't say you must get either more canola Sue do you sell it or you could have thought so they've got an issue like shale delek us to do that though you could do equity we don't know when he is three hours a day.

So wages, you'll come into play when you do it it sort of data sharing the sugar.

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I know it must be.

Yoichi Miyazaki: This is Miyazaki speaking. I will be responding to your first question. How we compete as of today and how we compete in the future is something that I would like to talk about. As Mr. Nakajima mentioned, what we saw at the motor show was something that we were surprised with. For China, from a global perspective, just like the United States, they are moving quickly to battery EV. For China, we want to prepare a solid battery EV strategy. The question is, including Chinese makes, how are we going to compete in BEVs? First we need to identify the needs of the Chinese customers and supply vehicles that are very much like a car manufacturer's vehicle.

This is me speaking I will be responding to your first question.

Yeah.

So.

How we compete as of today and how we compete in.

The future is something that I would like to talk about as Mr. Nakajima attention to what we saw at the motor show was something that we were surprised with a for China.

From a global perspective, just like the United States a battery they are.

Moving quickly to battery Evs.

So for China as well.

We want to prepare a solid a battery EV strategy then the question is that.

Including Chinese Oh, it makes how are we going to compete in the games.

First we need to identify the needs of the Chinese customers and our supply of vehicles.

Very much like a car manufacturers vehicles.

Yoichi Miyazaki: That is how we intend to prepare for the Chinese market. Of course, the preferences of the Chinese customers and America and European preferences may be different. China has its own unique characteristics. We will study those so that we can enhance our competitiveness in the market. We are taking a multipathway approach. China is a very large market, and we are going to provide various products. One thing that we have to strengthen for the Chinese market is battery EV vehicles. That is the first thing we have to do. This is Sato speaking, and let me add something. As Mr. Miyazaki mentioned, in the Chinese market, the battery EVs are moving very quickly. For the Chinese market battery EVs, TMC will make its utmost efforts.

So that is how we intend to prepare for the Chinese market.

Of course, the preferences of the Chinese customers and.

America and European purposes.

It may be different but.

China has its own unique characteristics. So we will study those so that we can enhance our competitiveness in the market.

We are taking a multi pathway of approach here.

And China is a very large market and we are going to provide our various products and one thing that we have to strengthen for the Chinese market is a battery EV vehicles that is up to.

The first thing we have to do.

Koji Sato: This is Sato speaking, and let me add something. As Mr. Miyazaki mentioned, in the Chinese market, the battery EVs are moving very quickly. For the Chinese market battery EVs, TMC will make its utmost efforts.

This is Joe speaking and let me add something.

And as I'm, just telling me I was like you mentioned in the Chinese market at battery Evs are moving very quickly so for the Chinese market at battery Evs D. M C well.

Mike its utmost efforts, but.

Koji Sato: Also on the other hand, there is solid demand for hybrid vehicles in China. Battery EV demand is more or less new demand. Part of your question was hybrid, will hybrid be a TMC's advantage? Our demand structure is different between HVs and BEVs, and so we would like to tackle both markets and try to be competitive in both. Thank you very much, Ms. Riva. Going back to this hall, the person in the very front again.

Yeah.

Also on the other hand, there solely demand for hybrid vehicles in China.

Battery EV demand is more or less new demands.

So.

Okay.

Oh, you're a part of your question was a hybrid real hybrid b.

At G M sees advantage.

So the demand structure is different between hps and be easy. So so it'll be we'd like to tackle both markets.

And tried to be competitive in both.

[Company Representative] (Toyota Motor Corp): Thank you very much, Ms. River. Going back to this hall. THe person in the very front again.

Yeah.

Thank you very much.

This is.

Yeah.

Okay.

So going back to this whole.

The person in the very front again.

You can give us.

Yao: Yao from Nihon Keizai Shimbun. I have two questions again. First question, the various auto OEMs are shifting toward battery EVs. In the case of Toyota, you have your strength in hybrid cars, but going forward, what do you intend to do going forward regarding BEVs? The second question overlaps a bit with the first one. The balance between investment and profitability from the battery EVs. The various auto OEMs are saying that BEV investment is becoming a burden on their profitability, and you said that you will aim for JPY 4 trillion in BEV investment by 2030, and you mentioned it in 2021. Have you updated these numbers? Also, Toyota's EV business, you'll be investing first without recouping the investment, the profit.

[Analyst]: Yao from Nihon Keizai Shimbun. I have two questions again. First question, the various auto OEMs are shifting toward battery EVs. In the case of Toyota, you have your strength in hybrid cars, but going forward, what do you intend to do going forward regarding BEVs? The second question overlaps a bit with the first one. The balance between investment and profitability from the battery EVs. The various auto OEMs are saying that BEV investment is becoming a burden on their profitability, and you said that you will aim for JPY 4 trillion in BEV investment by 2030, and you mentioned it in 2021. Have you updated these numbers? Also, Toyota's EV business, you'll be investing first without recouping the investment, the profit. How do you intend to secure the funds for investment?

From a new home case, I Shimbun, I have two questions again.

First question.

Okay.

Various auto Oems are shifting towards battery Evs in the case of Toyota you have yours.

Your strength is in hybrid cars.

Going forward, what do you intend to do.

Going forward.

Babies and the second question overlaps a bit with the first one so you invest the balance between investment and profitability from the battery Evs the various auto OE.

Oems are saying is that to be easy investment is.

Becoming a burden on their profitability and you said that you will aim for four trillion yen in BV investment by 2030, and you mentioned this in 2020. One. So have you updated this number also toyotas EV ER business, you'll be investing first.

Without recouping the investment the profit so how do you intend to secure the funds for investment.

Koji Sato: How do you intend to secure the funds for investment? Thank you. Let me reply to the first question. Second one will be handled by Miyazaki-san. Our approach to battery EV, we have been communicating about all along that, Toyota, would like to strongly focus on battery EVs going forward. However, the renewed message from me is that our ultimate goal is to achieve carbon neutrality and to achieve or to change mobility in the future. The customers' demands are diversifying, becoming diverse, and the automotive industry's needs are diversifying. We want to reply to those diversified needs, and we also want to respond to changes in energy needs, enhance the value of cars, and change the future of cars. We believe that those are very important initiatives to have people have.

Koji Sato: Thank you. Let me reply to the first question. Second one will be handled by Miyazaki-san. Our approach to battery EV, we have been communicating about all along that, Toyota, would like to strongly focus on battery EVs going forward. However, the renewed message from me is that our ultimate goal is to achieve carbon neutrality and to achieve or to change mobility in the future. The customers' demands are diversifying, becoming diverse, and the automotive industry's needs are diversifying. We want to reply to those diversified needs, and we also want to respond to changes in energy needs, enhance the value of cars, and change the future of cars. We believe that those are very important initiatives to have people have.

Thank you let me reflect the first question second one that will be handled by me as Exxon So.

They.

Our approach to battery EV, we have been communicating about all along that the Toyota we'd like to strongly focus on battery these going forward. However.

The renewed message from me is the thought that our ultimate goal is to achieve carbon neutrality and.

Hi.

To achieve or to change in mobility in the future.

The customers' demands are diverse thing.

Diverse and so the automotive industry is neither diversifying we want to apply to those diversified niche and we also have wanted to respond to changes in energy needs and enhance the value of the cars and change.

The future of cars and we believe that at that.

Those are very important initiatives to help people.

Koji Sato: Expect more from vehicles. Not only that powertrains are replaced with electricity, electric power plants, and that changes the structures of cars. That alone will not be enough to create a vision of a sustainable industry for automobiles. We can't lose sight of the ultimate goal. We will focus on battery EVs as one solution, but our goal is to change the future of cars. With this strong resolve, we want to grapple with this challenge with the local stakeholders. Let me answer to the second question. JPY 4 trillion of investment in BEV was, of course, announced by our company as a base volume, but our current criteria is toward 1.5 million in 2026, maybe JPY 2.5 trillion yen investment will be necessary.

Expect more from vehicles and not only that our powertrains are replaced with electricity electric pickup all planes and that changes the cost structures of course that alone will not be enough to create a vision of a sustainable industry for automobiles. So we have.

We can't lose sight of the ultimate goal and so we do focus on battery. Besides the one solution, but our goal is to change the future of cars and with this strong resolve we want to.

Grapple with this challenge with the.

Local stakeholders.

Okay.

Yoichi Miyazaki: Let me answer to the second question. JPY 4 trillion of investment in BEV was, of course, announced by our company as a base volume, but our current criteria is toward 1.5 million in 2026, maybe JPY 2.5 trillion yen investment will be necessary.

Let me answer to the second question.

Yeah.

Four trillion yen of investment in Bev.

Oh, It was of course announced by our company as a base volume, but our current criteria is.

Towards $1 5 million in 2026, maybe $2 five unions investment it will be necessary also toward the 2030 are in order we have set a volume.

Yoichi Miyazaki: Also, toward 2030, in order, we have set a base volume of 3.5 million, but when we update this, perhaps this will require about a JPY 5 trillion investment as a base value or base volume. Against this backdrop, how do we intend to finance this investment? Well, as I said earlier, up to now, we have been engaged in cost reduction efforts as well as marketing efforts by reinforcing our relationship with customers, we have been increasing our earnings power, and we have shown an outlook of JPY 3 trillion in earnings power this year.

Baseball about $3 5 million.

But when we update this perhaps this will require about a five city union investment us a base value based volume.

So I guess this backdrop.

How do you intend to finance these disinvestment.

Said earlier.

Up to now we have been engaged in cost reduction efforts as well as marketing efforts.

Some of them okay.

And.

By reinforcing our relationship with customers, we have been increasing our earnings power and we have shown an over three trillion yen in earnings power this year and in order to achieve this absolute gold.

Yoichi Miyazaki: In order to achieve this absolute goal, value, the profit structure that we aim for is one that can generate new room for investment, and through that, we can finance future investments, including investments in BEVs. Battery EVs, as Nakajima-san has mentioned all along, also we have to reduce cost in battery EV development as well. This is a challenge. We have no prospect for this. What we can do is to further promote the cost reduction of JPY 100 billion and then expand the value chain further so that we can reinforce the corporate stamina and become a structure where we can generate profitability despite the headwinds. Through these efforts, we want to finance our investment or generate enough funds for investment. May I?

Value.

The profit structure that we aim for.

Is one that can generate new.

For investment and through that.

We can finance future investments, including investments in <unk>, but battery Evs.

I see myself as mentioned all along.

Also we have to reduce cost and battery EV development does as well, but this is a time yet a challenge we have no prospect for this so what we can do is to further promote the cost reduction of one 1 billion and then expand the value chain further so that.

A weekend.

Reinforce the corporate stamina.

And our business.

A structure, where we can generate profitability despite the headwinds and so through these efforts we wanted to finance our investments will generate enough funds for investment.

[Analyst]: May I?

Yoichi Miyazaki: You talked about JPY 5 trillion in investment. Would that be counting from this year, this fiscal year? Yes, from this fiscal year. Thank you. Thank you very much. Thank you very much for the many questions. Because of time limitations, let us take the two last questions. Person in the third row in the center.

[Analyst]: You talked about JPY 5 trillion in investment. Would that be counting from this year, this fiscal year?

You talked about five trillion yen investment.

Would that be counting from this year this fiscal year, yes from this fiscal year. Thank you.

Yoichi Miyazaki: Yes, from this fiscal year. Thank you.

[Company Representative] (Toyota Motor Corp): Thank you very much. Thank you very much for the many questions. Because of time limitations, let us take the two last questions. Person in the third row in the center.

Thank you very much.

Thank you very much safer with him any question because of time limitations and let us take the two last questions.

Uh huh.

Presenting the third row in the central.

In the center.

Goro Okazaki: Thank you very much. My name is Goro Okazaki. I'm auto journalist. Since COVID, supply was in shortage. The more you produce, the more you can sell, is what we have been saying. This was a very special time. If you look at the results of your rivals, they have raised their price significantly, and their operating margins were very high in many cases. If you look at the numbers of Toyota on the other hand, you may not have been that aggressive in raising your prices. If I'm wrong, please correct me. What is your exit strategy? At one time, there will be a time when supply will be higher than demand, and products won't be selling that easy.

Thank you very much my name is going to cause I can't go to a journalist.

Since COVID-19.

Our supply wasn't shortage.

The more you produce.

The more you can tell is what we have been saying this was a very special time and there is.

If you look at the results of your rivals are they have raised their price significantly and their operating margins were very high in many cases and if you look at the numbers of Toyota on the other hand.

You may not have been that aggressive in raising your prices if I'm wrong. Please correct me.

But what is your exit strategy. One time, there was a one time there will be a time when supply will be higher than demand and prada.

Products won't be selling that easy so you might've been suppressing amounted O for price hikes, taking that in.

Koji Sato: You might have been suppressing the amount of price hikes, taking that in to consideration. That was what I thought. When supply goes up, what is the exit strategy that TMC has in mind? Thank you very much for your question. In a sense, supply was in shortage, and with regards to raising prices, ultimately, we think mass production is extremely important, so high quality products are being delivered to our customers at affordable prices so that we can see smiles on the faces of the customers. That is at the basis of our management strategy. In the short term, things were very difficult. Rather than taking the route of raising prices, we took a longer term perspective. We needed to maintain the relationship of trust with our customers.

Goro Okazaki: You might have been suppressing the amount of price hikes, taking that in to consideration. That was what I thought. When supply goes up, what is the exit strategy that TMC has in mind?

Two considerations that was what I thought so when supply goes up.

What is the exit strategy that teams he has in mind.

Koji Sato: Thank you very much for your question. In a sense, supply was in shortage, and with regards to raising prices, ultimately, we think mass production is extremely important, so high quality products are being delivered to our customers at affordable prices so that we can see smiles on the faces of the customers. That is at the basis of our management strategy. In the short term, things were very difficult. Rather than taking the route of raising prices, we took a longer term perspective. We needed to maintain the relationship of trust with our customers.

Thank you very much for your question.

Ah innocent supply wasn't any shortage and with regards to raising prices.

Okay.

Ultimately.

Well.

Oh, we think mass production is extremely important so high quality products to being delivered to our customers at affordable prices. So that we can see smiles on the faces of the customers that is at the basis of our management strategy in the short term thing and of course were very difficult.

So rather than taking the route of raising our prices. So we took a longer term perspective, we needed to maintain the relationship of trust with our customers are so first do we focus on making efforts ourselves.

Koji Sato: First, we focused on making efforts ourselves. As I mentioned before, in the past 14 years of Mr. Toyoda's presidency, we've had a Corolla, Crown, and other long-seller names. We have many products that are loved by the customers over the years. Including prices, there are expectations of our customers. It's not as simple as flexibly changing the prices because of economic conditions. That would not lead to long-term relationship of trust with the customers. Of course, we have to look at the economic environment and improve our profitability.

As I mentioned before.

At this moment or.

You bet.

And in the past 14 years, Oh for Mr. Toyotas precedent ship.

Okay.

We had a corolla crown and other long seller of names.

We have many products that are loved by the customers over the years.

Okay.

So including prices there are expectations of our customers.

Yeah.

And so it's not as simple as flexibly changing the prices because of economic conditions that would not lead to long term.

Relationship of trust with our customers, but of course, we have to look at the economic environment.

And improve our profitability.

Koji Sato: In the case of Crown, rather than just looking at a single Crown model, we need to pursue efficiency and improve the appeal of the product, and competitiveness of the product and add value to the product. That is what we have been focusing on. Increase the basic strength and improve the appeal of the product. That is what we mean by product-centered management, and that will lead over the long term to establish a relationship of trust between TMC and its customers. When we enhance value add, of course we need to consider prices that are commensurate with that value, so we need to strike a balance. We will stick to our basic management strategy. That is why we are taking this approach. Thank you very much.

In the case of a crown rather than just looking at a single Oklahoma modal.

Oh.

We need to pursue efficiency and improve the appeal of the product.

And the competitiveness of the product and add value to the product, but that is what we have been focusing on.

And so.

Increase the basic strength.

And improve the appeal of the products. So that is what we mean by product center, the management and that will lead to over the long term.

To establish a relationship of trust between TMC and its customers, but when we enhance value add.

Of course, we need to consider prices that are commensurate with that value. So we need to strike a balance.

Uh huh.

No.

So we will stick to our basic management strategy that is that we are taking this approach. Thank you very much in.

Koji Sato: In terms of profit, you seem to be struggling very much in North America, if you look at the numbers. If you look at news reports, soaring material prices did not allow you to increase prices according to news reports. But it seems like your exit strategy was not to immediately raise prices, but what will be your future exit strategy? Thank you for the question. For North America, producing cars and delivering cars is something that we were struggling with. Speeding up recovery of production is number one. If you look at the labor environment in North America, in terms of manufacturing costs, we have to make further efforts for improvements.

Goro Okazaki: In terms of profit, you seem to be struggling very much in North America, if you look at the numbers. If you look at news reports, soaring material prices did not allow you to increase prices according to news reports. But it seems like your exit strategy was not to immediately raise prices, but what will be your future exit strategy?

In terms of profit you seem to be struggling very much in North America. If you look at the numbers.

And if you look at news reports.

Soaring material crisis.

Did not.

Not allow you to increase your prices. According to news reports, but up it seems like you were very.

Yeah.

In your exit strategy was not to immediately raise our prices, but what would be a future exit strategy.

Koji Sato: Thank you for the question. For North America, producing cars and delivering cars is something that we were struggling with. Speeding up recovery of production is number one. If you look at the labor environment in North America, in terms of manufacturing costs, we have to make further efforts for improvements.

Thank you for the question for North America are producing cars and delivering cars is something that we were struggling with.

No.

So speeding up recovery of production is our number one and if you look at the labor environment in North America.

Hum.

In terms of manufacturing costs, we have to make further efforts.

Koji Sato: Based on TPS, Toyota Production System, we needed to undertake improvement initiatives so that we are very strong in manufacturing at North American factories. We need to create a corporate foundation of a strong manufacturing for North America. The market, we need to have a dialogue with the market, with the customers to propose an appropriate price. That would be the order in which we tackle things. Thank you very much. Thank you, Kosaki-san. In the interest of time, this will have to be the final question. The person in the middle, front row.

For improvements based on G. P S. Toyota production system or we needed to undertake an improvement initiatives. So that we are very strong in manufacturing.

North American factories.

Oh, we need to create a corporate foundation of a strong manufacturing for North America.

Okay.

The market, we need to have a dialogue with the market with the customers.

To propose and appropriate.

Price, so that would be the order in which we chuckled things. Thank you very much.

[Company Representative] (Toyota Motor Corp): Thank you, Okazaki-san. In the interest of time, this will have to be the final question. The person in the middle, front row.

Thank you for KRYSTEXXA, so due to the interest of time this will have to be the final question.

The person in the middle.

Tanigawa: Tanigawa from Car Watch. I have two questions as well. Well, your sales have improved, and I think this is primarily due to the increased vehicle sales. Delivery cycles are getting, I mean, longer. The dealers have good communication with the customers, I believe. What were some of the measures you took? Second question, I think that you had a backlog of close to 2 million units at one time that was announced. Could you talk about the current backlogs currently in Japan and overseas? When would these long delivery dates be reduced to normal delivery dates?

[Analyst]: Tanigawa from Car Watch. I have two questions as well. Well, your sales have improved, and I think this is primarily due to the increased vehicle sales. Delivery cycles are getting, I mean, longer. The dealers have good communication with the customers, I believe. What were some of the measures you took? Second question, I think that you had a backlog of close to 2 million units at one time that was announced. Could you talk about the current backlogs currently in Japan and overseas? When would these long delivery dates be reduced to normal delivery dates?

Yeah.

10 golf I mean, just kind of watch I have two questions as well.

Yes.

Well your sales have improved and I think this is primarily due to the increased vehicle sales. So it's a delivery cycles are getting longer.

The dealers have a good communication with the customers I believe so what were some of the majors took.

And second question I think that you had a backlog of close to 2 million units at one time that was announced so could you talk about the current backlogs are currently in Japan and overseas and.

When would these are long delivery dates be reduced to normal delivery dates.

Right.

Yoichi Miyazaki: Thank you, TaniGawa-san. Now, with dealers' communication with the longer delivery dates, I think that really differed depending on the region. Japanese dealers, they do have longer delivery dates to start with, so...

Yoichi Miyazaki: Thank you, Tanigawa-san. Now, with dealers' communication with the longer delivery dates, I think that really differed depending on the region. Japanese dealers, they do have longer delivery dates to start with.

Thank you Tony Gala Sun.

No.

Dealers communication with the longer delivery dates I think that really differed depending on the region.

And the Japanese dealers.

No.

They do have longer delivery dates to start with so what they did.

Yoichi Miyazaki: What they did was to at least tell the customers when they can expect the delivery, because I think the biggest stress or frustration for customers would be not to know the steps of the delivery process. We had to provide information to them, and the dealers also were required to respond to their questions. That's the basis of communication. In the United States, they sell from their inventory. Because of this process of what cars best match the needs of the customers and are best selling, they can get that information from the customers. The North American companies grabbed that number, and they can allocate from the location of inventories in the dealers and then deliver to the customers.

It was the two.

At least until the customers when they can expect the delivery because I think the biggest the stress or frustration for customers, who would be not to know.

Of the delivery process. So we had to provide information to them.

And the dealers also over required to respond to their questions.

That's the basis of communication any of the United States, Oklahoma.

So from their inventory so.

Because of this process.

Or what cause the best match the needs of the customers and our best selling if they can get that information from the customers.

So the north American companies grasp that number and.

They can allocate.

From the location of the inventories and the dealers and then deliver to the customers and through these efforts at this time.

Yoichi Miyazaki: Through these efforts, this time, this term, we were able to cope with issues relating to customer delivery dates. As for Japan, due to the types of semiconductors required, we are having our Japanese customers wait longer. As was explained at the very outset, semiconductor shortage is of course being alleviated gradually. So we hope that we will be able to improve our communication regarding delivery dates with the customers. I hope you'll keep a watch on improvements going forward. How about backlog numbers? May I talk about backlog? Through the longer delivery dates, our learning or our lessons was that the factory production site, the people in the distributorship, the dealers, and the suppliers, we all were unified. We became one team. That was the biggest benefit.

At this time.

We were able to cope with issues relating to customer delivery dates that's for Japan.

Due to the types of semiconductors required that we are having our Japanese customers wait longer and.

So I was just explaining at the very outset.

Semiconductor shortage is of course being alleviated gradually.

So are.

We hope you all guys.

We will be able to improve our communication regarding delivery dates with our customers I hope you'll keep a watch on improvements going forward, how about backlog numbers.

[Analyst]: How about backlog numbers? May I talk about backlog?

Yoichi Miyazaki: Through the longer delivery dates, our learning or our lessons was that the factory production site, the people in the distributorship, the dealers, and the suppliers, we all were unified. We became one team. That was the biggest benefit.

Talk about backlog.

Okay.

Mhm.

So the longer delivery dates are learning or are lessons that the factory production site and the people and the distributorship and the dealers and suppliers. We all owe a unified we became one team that was the biggest.

Yoichi Miyazaki: We were able to share our own pains and headaches, and then we were able to talk about what each person can do or each member can do to improve the situation for others. In Japan, the backlog, the orders received as of the end of April was a little more than 800,000. Among the customers who request delivery by the end of April, we were not able to deliver on 10% of those 800,000 units. We were asking the dealers to ask the customers when they want the delivery date by. We will manufacture to the needs of customers who are in a hurry. We're now finally able to enter that sort of process.

Benefit and so we were able to share our own pain.

And headaches and then we were able to talk about what each person can do each member can do to improve the situation for others and in Japan the backlog.

The orders received as of the end of April .

Was it a little more than 800000.

Okay.

But amongst our customers.

Uh huh.

Against those customers, who request delivery by the end of April we were not able to deliver on a 10% of those 800000 units. So you were asking.

To ask the customers when they want to the delivery they can buy and so we will manufacture to the needs of customers who are in a hurry and we're now finally able to enter that sort of process any of the United States in the past.

Yoichi Miyazaki: In the United States in the past, the cars were all showcased in large dealerships, and the customer can pick and choose and then drive home with the car. Now a dealer had to of course bear the interest rate because of this. Because of the longer delivery date today from Japan or the US factory, while the car is being transported to the dealership, the cars are already being sold during its transportation. We're able to deliver cars fresh off the production line, in a sense, without inventory. As I said at the outset, we became one unified team. As a result, we came up with many new ideas, fresh ideas, and many ingenious ideas which had helped us to alleviate the longer delivery date.

Yeah.

The cards were all showcased in our lives dealerships and the customer can pick and choose and then drive home with a car, but you can.

Yeah.

Dealer.

Two of course bear an interest rate because of this but because of the longer delivery days and today.

The problem in Japan, or the U S.

Factory, while the car is being transported into the dealership or the cars are already being sold doing its transportation. So we're able to deliver a class of fresh off the production line in a sense.

Our inventory and so as I said at the outset, we became one unified team and as a result, we came up with many new ideas and fresh ideas and many ingenious.

Ideas are which has helped us to alleviate the longer delivery dates. So we wanted to continue with improvement that this space so that the customer suppliers.

Yoichi Miyazaki: We want to continue with the improvement at this pace so that the customers, suppliers, and dealers, they can all enjoy delivering even better products to our customers. We want to further improve on these kinds of processes. We ask for your support.

And the dealers they can all evil.

Enjoy delivering even better products to our customers.

Though we want to further improve on these kinds of.

Processes. So we ask for your support.

Tanigawa: You said domestically it's 800,000 units backlog. How about overseas?

[Analyst]: You said domestically it's 800,000 units backlog. How about overseas?

Domestically, it's 800000 units backlogs, how about overseas well overseas. The definition of backlog is a different by region. So if I tried to give you a number it could lead to some misconceptions it could be misleading I'm sorry, So I hope that you will use the domestic number.

Yoichi Miyazaki: Well, overseas, the definition of backlog is different by region. If I try to give you a number, it could lead to some misconceptions. It could be misleading. I'm sorry. I hope that you will use the domestic number.

Tanigawa: Thank you, Tanigawa-san. It is time to close the Q&A session. With this we conclude the financial results meeting. Those on the stage, please stand up. Thank you very much for coming today. Off the stage. Thank you very much.

[Company Representative] (Toyota Motor Corp): Thank you, Tanigawa-san. It is time to close the Q&A session. With this we conclude the financial results meeting. Those on the stage, please stand up. Thank you very much for coming today. Off the stage. Thank you very much.

Thank you attending on the phone.

But.

It is time.

Time to close the Q&A session.

With this we conclude the financial results meeting.

It was on the stage please stand up.

Thank you very much for coming today.

Okay.

So.

Yes.

Off the stage, thank you very much.

Yeah.

[music].

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