Q2 2026 Toyota Motor Corp Earnings Call

November 5, 2025

[music].

Speaker #1: More than half of our sales were from the United States, and the remainder from the rest of the world. But if we had been imposed such tariffs under the same sort of situation, then the impact would have been much larger.

Speaker #1: Ladies and gentlemen , thank you very much for joining us today . Taking time out of your presumably busy schedule . Now , we'd like to begin TMC's FY 26 Q2 financial Results Briefing .

Speaker #1: So, we have to think first about the customers in each region to engage in our business operations. And that's done by the regions at the same for revenue.

Speaker #1: I am EDA from Corporate Communications . Pleased to be your emcee today . Now I would like to invite our Chief Financial Officer , Ken Kong , for his presentation .

Speaker #1: Lexus customers, GR customers, and the many car companies each are attended to by each of these divisions or regions. So, the regions are working hard, not against each other, but in a balanced manner.

Speaker #1: Concern . Over to you . Good afternoon , ladies and gentlemen . Thank you for the introduction . I am calling before I begin , I would like to start by sincerely thanking our customers around the world who love to the cars .

Speaker #1: And that's why we have a very good revenue structure . For example , in Africa , in the past , Africa was part of the other .

Speaker #1: Our shareholders who support our efforts, our dealers and suppliers, and other stakeholders. Here is a summary of Q2 results. Our operating income for the first half of this fiscal year was ¥2 trillion.

Speaker #1: The rest of the world also , Latin America was the same , but these regions . Have been referred or transferred to Toyota Tsusho and with CFR , I think it's being run by the business is run by people who think first about Africa .

Speaker #1: Despite the impact of U.S. tariffs, strong demand supported by the competitiveness of products has led to increased sales volumes, mainly in Japan and North America, and has expanded value chain profits.

Speaker #1: So they support very high revenues in Africa . And in the earnings report , Japan , Asia , Europe , Africa and the other regions and the other regions are actually leading the revenue for us and within Asia , India and also in Europe .

Speaker #1: The full year operating income forecast is ¥3.4 trillion . Despite the impact of the US tariffs , we have continued to build upon our improvement efforts such as increasing sales volume , improving costs , and expanding value chain profits .

Speaker #1: There were some very difficult regions where Toyota was using these markets to polish our products. But now these regions are seeing an increase in revenue.

Speaker #1: We are steadily translating comprehensive future investments into improved productivity and increased returns with a strong focus on improving the break even volume . As for shareholder returns , to reward our long term shareholders , the interim dividend is raised to ¥45 per share and the full year dividend forecast is ¥95 per share .

Speaker #1: So, we're very well balanced in terms of regions. And so, all of Toyota is making a global effort to accommodate the U.S. tariffs.

Speaker #1: So, we would like to ask each of the regions to actually focus on their respective regions and the businesses there regarding the 3 million production capacity.

Speaker #1: As announced , the Japan Mobility Show 2025 . We will clearly define the five brands of the Toyota Group with clear directions , a diverse range of products meet the needs of each individual customers and thereby expanding choice for our customers .

Speaker #1: And our strategy views of the local production . Well , the 3 million units domestically is a very , very important goal for Toyota and the we have the the field Gamba right next to the production facilities and which enables us to turn that cycle very rapidly .

Speaker #1: I will now delve into our financial results for the period ended September 2025. Consolidated vehicle sales for the first half reached 4,783,000 units, or 105% of the same period last year.

Speaker #1: And that would help . Mono or manufacturing prowess in Toyota . And so that becomes a source of our global competitiveness . I believe , of course , to safeguard manufacturing in Japan .

Speaker #1: Toyota and Lexus vehicle sales totaled 5,267,000 units , or 104.7% , compared to the previous fiscal year , thanks to a strong demand from customers around the world .

Speaker #1: We need to maintain a retain a significant amount of domestic production , because if that declines and then the supply chain will also weaken , that could lead to or impact jobs and others .

Speaker #1: Vehicle sales increased mainly in Japan and North America. The ratio of electrified vehicles rose to 46.9%, driven mainly by strong HEV sales in regions such as North America and China.

Speaker #1: So we have to earn foreign currency and purchase resources to run the domestic business. I think that's how we survive. And so domestic production in Japan must be safeguarded.

Speaker #1: Consolidated financial results . Sales revenues of ¥24,000,000,000,630.7 billion . Operating income ¥2,000,000,000,005.6 billion . Income before income taxes ¥2,000,000,000,478.1 billion and net income of ¥1,000,000,000,773.4 billion .

Speaker #1: And protected . On the other hand , local production is important to in many ways . And I think to manufacture where the customers are to sell , where there is a market for the products or to produce , where there's a market for the product and also we must develop components and parts or vehicles that match those needs .

Speaker #1: The fact that impacted operating income in the year, as shown on the slide, is that the geographical operating income in Japan decreased mainly due to the impact of exchange rate fluctuations and increased expenses.

Ladies and gentlemen, thank you very much for joining us today, taking time out to represent them as lengthy as scheduled.

Riri A: Ladies and gentlemen, thank you very much for joining us today, taking time out of your presumably busy schedule. Now, we would like to begin TMC's FY2026 Q2 Financial Results Briefing. I am Riri A from Corporate Communications. Pleased to be your emcee today. Now, I would like to invite our Chief Financial Officer, Kenta Kon, for his presentation. Kon-san, over to you. Good afternoon, ladies and gentlemen. Thank you for the introduction. I am Kon. Before I begin, I would like to start by sincerely thanking our customers around the world who love Toyota cars, our shareholders who support our efforts, our dealers and suppliers, and other stakeholders. Here is a summary of Q2 results. Our operating income for the first half of this fiscal year was JPY 2 trillion.

Speaker #1: In North America . It decreased because of the impact of the US tariffs . Other regions saw an increase , mainly due to higher sales volume , improved model mix and other factors .

We elected began T M sees FY 'twenty six.

Speaker #1: And then, that's best produced locally. So in Japan and non-Japan areas, perhaps we can allocate the production of different models. That sort of adjustment is done, but we don't intend to transfer something drastically from Japan to the United States or overseas to Japan.

Q2 financial results briefing I M E T F from corporate communications.

But did you like they used to be U N C. Today now I'd like to invite our Chief Financial Officer, Ken <unk>.

Speaker #1: Our China business saw an increase in operating income and share of profit from investments accounted for using the equity method. Operating income in the financial services segment increased largely due to an increase in loan balances.

Okay its presentation.

All of a sudden over to you.

Speaker #1: We're not discussing such drastic measures. We will continue as we have in the past. Thank you.

Speaker #1: Now we will move on to the shareholder returns. We will raise.

When you drop good afternoon, ladies and gentlemen, thank you for the introduction I am told that Philadelphia, the mobile before I begin I'd like to start by sincerely thanking our customers around the world, who love to play the cards, all shareholders, who support our dealers.

Kenta Kon: Good afternoon, ladies and gentlemen.

Speaker #2: The interim dividend has been increased by ¥5 compared to the previous fiscal year, reaching ¥45 per share. The forecasted full-year dividend will also be increased by ¥5, reaching ¥95 per share.

Kenta Kon: Thank you for the introduction. I am Kon. Before I begin, I would like to start by sincerely thanking our customers around the world who love Toyota cars, our shareholders who support our efforts, our dealers and suppliers, and other stakeholders. Here is a summary of Q2 results. Our operating income for the first half of this fiscal year was JPY 2 trillion.

Speaker #3: Thank you very much, ladies and gentlemen. It is now time to close the session. Thank you very much for being with us today.

Speaker #2: We will continue to increase dividends in a stable and continuous manner to reward our long-term shareholders. As for share repurchases in June of this year, we passed a resolution to establish a repurchase program of approximately ¥3.2 trillion as part of taking Toyota Industries Corporation private.

And suppliers and other stakeholders.

[noise] was about just.

Speaker #3: Now , please excuse the presenters . With this , we would like to conclude TMC's FY 26 Q2 financial results briefing . Thank you very much .

Curious a summary of Q2 results or guidance on the operating income for the first half of this fiscal year was two trillion yen.

The impact of a U S. Paris strong demand supported by the competitiveness of our products has led to increased sales volumes, mainly in Japan, and North America and has expanded value chain profits.

Riri A: Despite the impact of US tariffs, strong demand supported by the competitiveness of products has led to increased sales volumes, mainly in Japan and North America, and has expanded value chain profits. The full year operating income forecast is JPY 3.4 trillion. Despite the impact of US tariffs, we have continued to build upon our improvement efforts, such as increasing sales volume, improving costs, and expanding value chain profits. We are steadily translating comprehensive future investments into improved productivity and increased returns, with a strong focus on improving the break-even volume. As for shareholder returns, to reward our long-term shareholders, the interim dividend is raised to JPY 45 per share.

Kenta Kon: Despite the impact of US tariffs, strong demand supported by the competitiveness of products has led to increased sales volumes, mainly in Japan and North America, and has expanded value chain profits. The full year operating income forecast is JPY 3.4 trillion. Despite the impact of US tariffs, we have continued to build upon our improvement efforts, such as increasing sales volume, improving costs, and expanding value chain profits. We are steadily translating comprehensive future investments into improved productivity and increased returns, with a strong focus on improving the break-even volume. As for shareholder returns, to reward our long-term shareholders, the interim dividend is raised to JPY 45 per share.

Speaker #2: Therefore, no new share repurchase program will be established at this time. We will continue to conduct flexible repurchases of shares, considering factors such as common stock prices.

The full year operating income forecast is three point Unfortunately again.

Speaker #2: Next, I will explain the forecast for the fiscal year ending March 26. Consolidated vehicle sales remain unchanged from the previous forecast.

The impact of E. S Terrace, we have continued to build upon.

Truth meant efforts such as increasing the sales volume improving costs and expanding valleys yourself as.

Speaker #2: Toyota and Lexus vehicle sales have been revised upward by 100,000 units to 10.5 million units. Through the strong competitiveness of our products, we will capture even more robust demand, particularly in North America.

We are steadily translating comprehensive future investments into improved productivity and increased returns with a strong focus on improving the breakeven volume.

Speaker #2: Next , let me explain the full year consolidated forecast . We have adopted the full year forex rate assumptions of ¥146 per dollar and ¥169 per euro .

As for shareholder returns.

Toward our long term shareholders.

Interim dividend is raised at 245 per share in the full year dividend forecast is 95, yes sure no problem.

Speaker #2: Our forecast for the full year consolidated performance is sales revenues of ¥49 trillion, operating income of ¥3 trillion, and income before income taxes of ¥4.15 trillion.

Kenta Kon: The full year dividend forecast is JPY 95 per share. As announced at the Japan Mobility Show 2025, we will clearly define the five brands of the Toyota Group with clear directions. A diverse range of products meet the needs of each individual customers and thereby expanding choice for our customers. I will now delve into our financial results for the period ended September 2025. Consolidated vehicle sales for the first half reached 4,783,000 units or 105% of the same period last year. Toyota and Lexus vehicle sales totaled 5,267,000 units or 104.7% compared to the previous fiscal year. Thanks to a strong demand from customers around the world, vehicle sales increased mainly in Japan and North America.

I noticed that the Japan mobility, Charlotte say 25.

We will clearly defines the five brands.

That group with clear directions.

Speaker #2: Sorry, ¥180 billion and net income of ¥2 trillion, 930 billion. The factors impacting operating income year on year are, as stated on the slide.

A diverse range of products to meet the needs of each individual customers and thereby extend choi.

Speaker #2: Despite the impact of U.S. tariffs amounting to ¥1.45 trillion, improvement efforts such as increasing volume, model mix cost reductions, and expanding value chain profits are expected to result in a positive impact of ¥0.9 trillion to maintain and strengthen our earnings power.

Trish for our cost of Us I.

I will now delve into the financial results for the period ended September 2025 consolidated vehicle sales for the first half reached 4 million several hundred 83000 units or 105% I'm. The same periods of last year until you die and Lexus vehicles sales totaled 5 million $260.

Speaker #2: We will work with all stakeholders, including suppliers and dealers, to leverage the results of strengthening our operational foundations to further improve productivity.

7000 image.

One 7% compared to the previous fiscal year, thanks to strong demand from customers around the world vehicles sales increase mainly in Japan and North America.

Speaker #2: I believe everyone here has seen the models we unveiled at the Japan Mobility Show. These cars speak more for themselves than I ever could.

Asia of electrified vehicle as well as to 46, 9% driven mainly by strong H E V sales in regions, such as North America and China.

Speaker #2: Each and every product is something that could not be created overnight. Toyota is a company managed through its products, which are the results of long-term efforts built up by many people.

Kenta Kon: The ratio of electrified vehicles rose to 46.9%, driven mainly by strong HEV sales in regions such as North America and China. Consolidated financial results. Sales revenues of JPY 24,630.7 billion. Operating income, JPY 2,005.6 billion. Income before income taxes, JPY 2,478.1 billion. Net income of JPY 1,773.4 billion. The factors that impacted operating income year-on-year are shown on the slide. Now, the geographical operating income. In Japan, operating income decreased mainly due to the impact of exchange rate fluctuations and increased expenses. In North America, it decreased because of the impact of the US tariffs. Other regions saw an increase, mainly due to higher sales volume, improved model mix, and other factors.

What are they good financial results sales revenue is over 24 trailing 634 7 billion yen operating income to truly own 5.6 billion yen income before income taxes, two trillion 478.1 billion yen and net income of one truly other 773.4 billion yes.

Speaker #2: Our products were created by our development teams , production teams , suppliers , dealers and of course our customers and the market . The first half financial results reflect these efforts and our cars have generated solid profits .

Speaker #2: And now , in addition to Toyota , Lexus , Daihatsu and GR , we are able to introduce the new century brand by having each brand take on clearer roles within the Toyota Group to form complementary relationships .

The factors that impacted the operating income areas are shown on this slide.

Yeah, the geographical operating income.

In Japan operating income decreased mainly due to the impact of exchange rate fluctuations and increased expenses in North America. It decreased because of the impact it was a U S. Tariffs other regions saw an increase mainly due to higher sales volume improved model mix and other factors.

Speaker #2: We can expand customers' choices even further with a diverse range of products that meet the needs of each individual. We hope you will continue to have even higher expectations for the Toyota Group.

Speaker #2: Moving forward, a diverse range of products supported by such strong brands has led to 150 million units owned by our customers worldwide. The value chain business has expanded to the order of ¥2 trillion in operating income.

China is this increase in operating income and share of profit of investments accounted for using the equity method operating income in the financial services segment increased largely due to an increase in loan is now ill move on to the shareholder returns.

Kenta Kon: Our China business saw increase in operating income and share of profit of investments accounted for using the equity method. Operating income in the financial services segment increased largely due to an increase in loan balances. Now we will move on to the shareholder returns. We will raise the interim dividend by JPY 5 compared to the previous fiscal year to JPY 45 per share. The forecasted full year dividend will also be increased by JPY 5, reaching JPY 95 per share. We will continue to increase dividends in a stable and continuous manner to reward our long-term shareholders. As for share repurchases, in June of this year, we passed a resolution to establish a repurchase program of approximately JPY 3.2 trillion as part of taking Toyota Industries Corporation private. Therefore, no new share repurchase program will be established at this time.

Speaker #2: This is a result of efforts by teams on the front lines in service , sales , finance , used car sales , insurance and others to maximize the value of each vehicle supported by product strength such as ease of repair and strong supply of parts , as well as high residual values .

We will raise the interim dividend by five yen compared to the previous fiscal year 245 yen per share the forecasted full year dividend will also be increased by five yen, reaching 95 yen per share.

Speaker #2: The new Rav4 is the first to adopt Irene , a platform designed to efficiently develop software . Rav4 is our best selling global model with an annual sales of 1 million units .

We will continue to increase dividends in a stable and continuous matter to reward our long term shareholders.

As for share repurchases in June of this year, we passed a resolution to establish a repurchase program of approximately three points to Chile again as part of taking Toyota Industrial Corporation private.

Speaker #2: We deliberately chose to lead with this challenging model. By utilizing the vast amount of data collected from roads and vehicles around the world, we will develop and refine SDVs together with our customers.

Therefore, no new share repurchase program will be established at this time. They will continue to conduct a flexible repurchases of shares considering factors such as common stock prices next I'll explain the forecast for the fiscal year ending March 26.

Speaker #2: By adding our SDV strategy to the virtuous cycle of new cars and value chain businesses, we will further strengthen our profit foundation.

Kenta Kon: We will continue to conduct flexible repurchases of shares considering factors such as common stock prices. Next, I'll explain the forecast for the fiscal year ending March 2026. Consolidated vehicle sales remain unchanged from the previous forecast. Toyota Lexus vehicle sales have been revised upward by 100,000 units to 10.5 million units. Through the strong competitiveness of our products, we will capture even more robust demand, particularly in North America. Next, let me explain the full year consolidated forecast. We have adopted the full year forex rate assumptions of 146 yen per dollar and 169 yen per euro.

Consolidated vehicle sales remained unchanged from the previous forecast Toyota and Lexus vehicles sales have been revised upward by 100000 units to $10 5 million units.

Speaker #2: Over the past two years, we have grappled with certification issues and a lack of capacity head-on, carrying out activities to reinforce our operational foundation.

Through the strong competitiveness of our products will capture even more robust demand, particularly in North America.

Speaker #2: As a result , we are thoroughly focused on safety and quality while securing additional capacity leading to a stable production . On the other hand , investments in human resources and future oriented investments have expanded and combined with the impact of U.S.

Next let me explain our full year consolidated forecast, we have adopted the full year Forex rate assumption of 146 yen per dollar and 169, yet for Europe.

Speaker #2: Tariffs have caused our break-even volume to rise significantly, which has brought our break-even volume back onto a downward trend. We are launching a company-wide initiative.

Our forecast for the full year consolidated performance art sales revenues of 49 trillion yen operating income of three trillion 400 billion yen income before income taxes are Fortunately unwanted 50 billion. Sorry, you wanted 80 billion yen and net income of two trillion 930 billion yen the.

Kenta Kon: Our forecast for the full year consolidated performance are sales revenues of JPY 49 trillion, operating income of JPY 3,400 billion, income before income taxes of JPY 4,150 billion, sorry, JPY 4,180 billion, and net income of JPY 2,930 billion. The factors impacting operating income year-on-year are as stated on the slide. Despite the impact of US tariffs amounting to JPY 1.45 trillion, improvement efforts such as increasing volume, model mix, cost reductions, and expanding value chain profits are expected to result in a positive impact of JPY 0.9 trillion. To maintain and strengthen our earnings power, we will work with all stakeholders, including suppliers and dealers, to leverage results of the strengthening of our operational foundations to further improve productivity.

Speaker #2: We will review the allocation of people, materials, and capital, and turn the results of the reinforcement of our operational foundations into earning power.

Speaker #2: We will pursue waste free , value added work and improve productivity , and also continue to focus on improving the break even volume .

The factors impacting operating income year on year, our updated on the slide despite the impact of U S cash amounting to 1.45 trillion yen improvement efforts, such as increasing volume and model mix cost reductions and expanding value chain profits are expected to result in positive impact of <unk> nine trillion yen to.

Speaker #2: This concludes my explanation of the financial results. Thank you.

Speaker #1: Thank you very much. Now we would like to open the floor for questions. Let us prepare the stage. Thank you for your patience.

<unk> strengthened our earnings power, we will work with all stakeholders, including suppliers and dealers to leverage the result of the strengthening of our operational foundations to further improve productivity.

I believe everyone here has seen the models will be unveiled at for each of permeability show.

Kenta Kon: I believe everyone here has seen the models we unveiled at the Japan Mobility Show. These cars speak more for themselves than I ever could. Each and every product is something that could not be created overnight. Toyota is a company managed through its products, which are the results of long-term efforts built up by many people. Our products were created by our development teams, production teams, suppliers, dealers, and of course, our customers and the market. The first half financial results reflect these efforts, and our cars have generated solid profits. Now, in addition to Toyota, Lexus, Daihatsu, and GR, we are able to introduce the new Century brand. By having each brand take on clearer roles within the Toyota Group to form complementary relationships, we can expand customers' choices even further with a diverse range of products that meet the needs of each individual.

These car speak more for themselves than I ever could.

Each and every product is something that could not be created overnight.

The size of company managed through its products, which are the results of our long term efforts built up by many people.

Our products were created by our development team's production team suppliers and of course, our customers and the market.

The first half financial results reflect these efforts and our cars have generated solid profits.

And now in addition to Toyota.

Lexus Daihatsu and she are we were able to introduce the new century brand.

By having each brands take on clear our rules within the Toyota group to form complementary relationships, we can expand customer choice. This even further with a diverse range of products that meet the needs of each individually.

We hope you'll continue to have even higher expectations for the Toyota group moving forward.

Kenta Kon: We hope you will continue to have even higher expectations for the Toyota Group moving forward. A diverse range of products supported by such strong brands has led to 150 million units owned by our customers worldwide, and the value chain business has expanded to the order of JPY 2 trillion in operating income. This is the result of efforts by teams on the front lines in service, sales, finance, used car sales, insurance, and others to maximize the value of each vehicle supported by product strength, such as ease of repair and strong supply of parts, as well as high residual values. The new RAV4 is the first to adopt Arene, a platform designed to efficiently develop software. RAV4 is our best-selling global model with an annual sales of 1 million units. We deliberately chose to lead with this challenging model.

A diverse range of products supported by such strong brands has led to 150 million units owned by our customers worldwide and the value chain business has expanded to the order of two trillion yen in operating income. This is a result of efforts by teams on the front lines in service sales finance, a used car sales insurance and others.

To maximize the value of each vehicle supported by product strengths, such as ease of repair and strong supply of parts as well as higher but visual values.

Speaker #1: Now let us start the questions and answers session . Your questions will be addressed by our Chief Financial Officer , Kenta Kong , as well as our CEO , Takanori Azuma .

Then you have about four is the first to adopt Irene a platform designed to efficiently develop software.

Row, four is our best selling global model than an annual sales of 1 million units.

We deliberately chose to lead with this challenging model.

By utilizing the vast amount of data collected from rose in vehicles around the world, We will develop and refine S. D vs together with our customers.

Speaker #1: From the accounting group. Please allow them to be seated as they respond to your questions. Now, I would like to open the floor for questions.

Kenta Kon: By utilizing the vast amount of data collected from roads and vehicles around the world, we will develop and refine SDVs together with our customers. By adding our SDV strategy to the virtual cycle of new cars and value chain businesses, we will further strengthen our profit foundation. Over the past two years, we have grappled with certification issues and lack of capacity head on, carrying out activities to reinforce our operational foundation. As a result, we are thoroughly focused on safety and quality while securing additional capacity, leading to a stable production. On the other hand, investments in human resources and future-oriented investments have expanded, and combined with the impact of US tariffs, our break-even volume has risen significantly. To bring our break-even volume back onto a downward trend, we are launching a company-wide initiative.

By adding or S. D V strategy to the virtuous cycle of new cars and value chain businesses. We will further strengthen our profit foundation.

Speaker #1: If you have any questions, please raise your hand and indicate, and wait for a microphone to be brought to you. Please limit your questions to two.

Over the past two years, so they have grappled with certification issues and lack of capacity head on carrying out activities to enforce our operational foundation as a result, they are thoroughly focused on safety and quality, while securing additional capacity leading to a stable production.

Speaker #1: So that as many people as possible can ask questions, in the second row in the middle section, please.

Speaker #3: Thank you .

On the other hand investments in human resources and future oriented investments have expanded and combined with the impact of U S tariffs, our breakeven volume has risen significantly.

Speaker #1: I am Kawaguchi from Nikon Kogyo Shimbun. Two questions. Number one. First of all, for the past several years, you have been focusing on earning power.

Speaker #1: There must have been various external factors, but how have you raised your earning power with those efforts? And how has that been reflected in this Q2 results?

To bring our breakeven volume back onto a downward trend we are launching a company wide initiatives.

We will review the allocation of people materials and capital and turn the results of the reinforcement of our operational foundations into earnings power, we will pursue waste free value added work and improve productivity and also continued to focus on improving the breakeven volume.

Kenta Kon: We will review the allocation of people, materials, and capital and turn the results of the reinforcement of our operational foundations into earnings power. We will pursue waste-free value-added work and improve productivity and also continue to focus on improving the break-even volume. This concludes my explanation of the financial results. Thank you.

Speaker #1: Now , 15% in September is something that we heard about the US tariffs as determined . And for the throughout the year , how do you plan to minimize the impact ?

This concludes my explanation of our financial results. Thank you.

Yeah.

Speaker #1: I am sure you are working on various fronts, but probably you can tell us your directions. Thank you. Thank you very much for your questions.

Thank you very much concern.

Now, we'd like to open the floor for questions.

Riri A: Thank you very much, Kon-san. Now, we would like to open the floor for questions. Let us prepare the stage. Thank you for your patience. Now, let us start the questions and answers session. Your questions will be addressed by our Chief Financial Officer, Kenta Kon, as well as our COO, Takanori Azuma, from the accounting group. Please allow them to be seated as they respond to your questions. Now, I would like to open the floor for questions. If you have any questions, please raise your hand and indicate and wait for a microphone to be brought to you. Please limit your questions to two so that as many people as possible can ask questions. In the second row in the middle section, please. Thank you. I am Kawaguchi from Nikkan Kogyo Shimbun. Two questions.

My last prepared at this stage.

[music].

Speaker #1: Well, earning power. So, the first question was how our efforts...

Speaker #3: Have .

Speaker #1: Delivered. And that certainly is a question about our financial results themselves. As I mentioned in my presentation, ¥2 trillion and ¥3.4 trillion in operating income is what we have announced.

Speaker #1: We do have external factors . Of course , but we do have global customers with very strong demand for our products . And we feel that day in , day out because .

Speaker #3: Of a .

Speaker #1: High quality and the power of our products , which has been the result of our accumulated efforts regionally . North America , as you know , because of the impact of the tariffs , the situation is not rosy .

Speaker #1: Although I cannot share with you other than North America , for example , China , Europe , Asian markets and Africa . These markets .

Speaker #1: Although the situation is not easy , but in terms of both revenues and sales volumes , we have seen some healthy situations for Brazil , experienced some typhoons and hurricanes , but yesterday we announced the restarting of the production .

Speaker #1: Actually , that has been brought forward by tremendous efforts made on the in the front line of our business . And that certainly is a part in very important part of our earning power in terms of our value chain .

Okay.

Thank you for your patience now, let us start the questions and answers session.

Yeah.

Your questions will be addressed.

Speaker #1: ¥2 trillion annually is the revenue that we can expect for 150 million cars being owned. Of course, this is the basis of that value chain revenue.

Hi.

Our Chief Financial Officer.

Uh huh.

That's one S C O O.

Tucker annuity us a month from the accounting group.

Speaker #1: But once again, that represents the power of our products. The residual value of used cars, for example, is maintained at a very high level, and Toyota vehicles are often noted for being very easy to repair because that concept is already built into the design of the cars. The repair personnel are involved in the design so that easy repair is an important part of our product.

Please allow them to be seated as they respond to your questions.

Now I would like to open the floor for questions.

Uh huh.

If you have any questions.

Please raise your hand and indicate and the wait for a microphone to be brought to you and limit your questions to two so that as many people as possible can ask questions.

In the second row in the Middle section please.

Speaker #1: Although it is not visible from outside . All of those components put together . Have been . Integrated into our earning power . Thus the Q2 results .

Thank you.

I am because chi from Nico Kogyo Shimbun, two questions number one.

[Analyst]: Thank you. I am Kawaguchi from Nikkan Kogyo Shimbun. Two questions.

First of all for several years, you are focusing on the earning power.

Riri A: Number 1, first of all, for the past several years, you are focusing on earning power. There must have been various external factors, but how have you raised your earning power with those efforts, and how has that been reflected in this Q2 results? Now, 15% in September is something that we heard about the US tariffs as determined. Further throughout the year, how do you plan to minimize the impact? I am sure you're working in various fronts, but probably you can tell us your directions. Thank you.

[Analyst]: Number 1, first of all, for the past several years, you are focusing on earning power. There must have been various external factors, but how have you raised your earning power with those efforts, and how has that been reflected in this Q2 results? Now, 15% in September is something that we heard about the US tariffs as determined. Further throughout the year, how do you plan to minimize the impact? I am sure you're working in various fronts, but probably you can tell us your directions. Thank you.

Yeah, It must have been various external factors.

But how have you raised your.

Speaker #1: As for the second question of yours about the impact of the U.S. tariffs, how we responded successfully, I think I showed you some slides about that.

Earning power with those airports and how has that been reflected in just Q2 results.

Up 15% at September is something that we heard about the U S tariffs.

Speaker #1: Did I ? Well , ¥1.45 trillion is the impact from the US tariffs . At the beginning of the year , our president Sato some talked about this .

Determined and for this throughout the year.

How do you plan to minimize the impact I am sure you are working on various fronts, but probably you can tell us your directions. Thank you.

Thank you very much for your questions.

Speaker #1: We really should not panic and try to respond hastily by raising prices of the cars. That's not our way. For each vehicle, each model, and each region, we will scrutinize the competitive landscape and the market, and we will carefully determine the price point.

Well, earning power.

Kenta Kon: Thank you very much for your questions. Well, earning power. The first question was how our efforts have delivered, and that certainly is a question about our financial results themselves. As I mentioned in my presentation, JPY 2 trillion and through JPY 3.4 trillion in operating income is what we have announced.

So.

The first question was how our efforts.

We have delivered and that certainly is a question about our financial results themselves as I mentioned the immigrant presentation too.

Two trillion yen and through state for trailing England in operating income is what we have announced we.

We do have external factors of course bought.

Speaker #1: And as you can see on this slide . And of course , the efforts were not solely made to respond to the tariffs .

We do have global customers with very strong demand for our products and we feel that day in day out.

Riri A: We do have external factors, of course, but we do have global customers with very strong demand for our products, and we feel that day in, day out because of the high quality and the power of our products, which has been the result of our accumulated efforts. Regionally, North America, as you know, because of the impact of the tariffs, the situation is not rosy. Although I cannot share with you other than North America, for example, China, Europe, Asian markets, and Africa. These markets. Although the situation is not easy, but in terms of both revenues and sales volumes, we have seen some healthy situations. Brazil experienced some typhoons and hurricanes, but yesterday we announced the restarting of the production.

Kenta Kon: We do have external factors, of course, but we do have global customers with very strong demand for our products, and we feel that day in, day out because of the high quality and the power of our products, which has been the result of our accumulated efforts. Regionally, North America, as you know, because of the impact of the tariffs, the situation is not rosy. Although I cannot share with you other than North America, for example, China, Europe, Asian markets, and Africa. These markets. Although the situation is not easy, but in terms of both revenues and sales volumes, we have seen some healthy situations. Brazil experienced some typhoons and hurricanes, but yesterday we announced the restarting of the production.

Speaker #1: But as you can see on the right hand side , our improvement efforts amounted to ¥19 million . Excuse me , ¥900 million , ¥900 million .

Because of the highest quality and the power of our products, which.

Has been the result of our accumulated efforts.

Regionally North America as you know because of the impact of the tariffs.

Speaker #1: And of course, that includes strong sales reflecting strong capacity of the product, as well as the value chain revenues. Do you have anything to add?

Situation is not rosy, although I cannot share with you other than North America for example, China Europe Asian markets in Africa.

Speaker #1: Probably not. Thank you for your question.

Speaker #2: Thank you very much . Next question . So next to that previous questioner . Mizuno from Yomiuri newspaper . Thank you for your presentation .

So we go to these markets.

Okay.

Oh those are the.

The situation is not easy but in terms.

Both revenues and sales volumes.

<unk> seen some healthy situations browser experienced some typhoons and hurricanes.

Speaker #2: My question is to consult on Chinese semiconductors, the next area, the issue of the next area. What sort of countermeasures are you taking against that shortfall?

Today, we announced the restarting.

Production.

Actually.

That has been brought forward.

Tremendous effort.

Riri A: Actually, that has been brought forward by tremendous efforts made in the frontline of our business, and that certainly is a very important part of our earning power. In terms of our value chain, JPY 2 trillion annually is the revenues that we can expect. For 150 million cars being owned, of course, is the basis of that value chain revenues. Once again, that represents the power of our products. Residual value of used cars, for example, is maintained very high. Also, Toyota vehicles are often said as being very easy to repair because that concept is already built in the design of the cars. The repair personnel is involved in design, so that easy to repair is an important part of our product, although it is not visible from outside.

Kenta Kon: Actually, that has been brought forward by tremendous efforts made in the frontline of our business, and that certainly is a very important part of our earning power. In terms of our value chain, JPY 2 trillion annually is the revenues that we can expect. For 150 million cars being owned, of course, is the basis of that value chain revenues. Once again, that represents the power of our products. Residual value of used cars, for example, is maintained very high. Also, Toyota vehicles are often said as being very easy to repair because that concept is already built in the design of the cars. The repair personnel is involved in design, so that easy to repair is an important part of our product, although it is not visible from outside.

Speaker #2: Has it impacted you and what sort of measures do you intend to take going forward ? Please ? Mizuno San , if you could ask two questions at once .

Made on the.

In the front line of our business and that certainly is a part and very important part of our earning power in terms of a Bollywood a change.

To truly a yen.

Speaker #2: Are you satisfied with just one ? Just one is fine . Okay . Thank you . Well .

I knew.

Is the revenues that we can expect.

158 million cars being one of course is the basis of the value chain revenues, but once again that we presents the power of our products.

Speaker #4: Most recently ,

Speaker #2: We have not seen any impact, so.

Speaker #4: Far . But we .

But as usual volume of used cars. For example is maintained very high.

Speaker #2: Do you know that there is a risk? Therefore, we're trying to scope the impact and the areas where the impact would be felt.

Also Toyota vehicles.

Sad eyes.

Speaker #2: And we're currently monitoring the situation very closely . And of course , this is not only for Toyota , but it's I think for the entire supply chain .

Being very easy to repair because that concept is already built in and the design of the cars.

Speaker #2: And we're looking for alternatives. What other options do we have available? We are researching such alternatives and also monitoring very closely the impact situation.

Repair personnel is involved in design, so that easy to repair is an important part of our products. Although it is not that visible.

From outside and all of those components put together.

Speaker #2: Thank you .

All right.

Riri A: All of those components put together have been integrated into our earning power, thus the Q2 results. As for the second question of yours about the impact of the US tariffs, how we responded successfully. I think I showed you some slide about that. Did I? Well, JPY 1.45 trillion is the impact from the US tariffs. At the beginning of the year, our president, Sato-san, talked about this. We really should not panic and try and respond hastily by raising prices of the cars. That's not our way. For each vehicle, each model, each region, we will scrutinize the competitive landscape and the market, we carefully determine the price point. As you can see on this slide. Of course, the efforts were not solely made to respond to the tariffs.

Kenta Kon: All of those components put together have been integrated into our earning power, thus the Q2 results. As for the second question of yours about the impact of the US tariffs, how we responded successfully. I think I showed you some slide about that. Did I? Well, JPY 1.45 trillion is the impact from the US tariffs. At the beginning of the year, our president, Sato-san, talked about this. We really should not panic and try and respond hastily by raising prices of the cars. That's not our way. For each vehicle, each model, each region, we will scrutinize the competitive landscape and the market, we carefully determine the price point. As you can see on this slide. Of course, the efforts were not solely made to respond to the tariffs.

Hi, Ben.

Speaker #1: May I have a person with a white jacket in front?

Okay.

Integrate it into our earning power of that.

Speaker #5: Did we go ?

Speaker #1: Thank you. I'm the guy from TV Tokyo. I have two questions for concern. Number one is about the U.S. market forecast for the entire year.

Q2 results.

As far as the second question of yours about the impact of the U S. Tariffs are we responded it successfully.

Speaker #1: You have made some changes or not ? No , you have not made any changes . But according to researches , after October , because of the tariffs , car prices could rise in the general US market .

I think I should do some slight above that.

Did I hear you.

Well.

1.45 trillion yen is the impact from the U S tariffs.

Speaker #1: So how do you view the North American market going forward? The second question is about what you mentioned in the second part of your presentation.

Oh sure.

At the beginning of the year, our president central some stomach.

Speaker #1: Earning power . In order to regain the downward trend , the all out efforts will be made . What sort of efforts will we be making in terms of break volumes ?

Talks about this we really should not.

Panic.

And try and respond to hastily.

By raising prices of the car.

Speaker #1: For example, what level would you like to bring it back by? What time frame? Thank you.

That's not.

Our way.

Each vehicle each model each region, we will.

Speaker #6: I .

Scrutinize, the competitive landscape and the market and.

Speaker #1: Thank you very much for your questions . As for the North American market going forward , as you mentioned , and very rightly so , the volumes that we expect have not been changed from the previous announcements , as we hear from the US , we see lots of very strong demand for our products .

We are carefully determining the price for it and as you can see on the site.

Okay.

And of course the efforts, we're not solely made to response to the tariffs, but as you can see on the right hand side.

Our improvement efforts amounted to 19 million.

Riri A: As you can see on the right-hand side, our improvement efforts amounted to JPY 90 million. Excuse me, JPY 900 billion. JPY 900 billion. Of course, that includes strong sales, which are reflecting strong capacity of the product as well as the value chain revenues. Do you have anything to add? Probably not. Thank you for your question.

Kenta Kon: As you can see on the right-hand side, our improvement efforts amounted to JPY 90 million. Excuse me, JPY 900 billion. JPY 900 billion. Of course, that includes strong sales, which are reflecting strong capacity of the product as well as the value chain revenues. Do you have anything to add? Probably not. Thank you for your question.

Okay.

Speaker #1: You may know .

Speaker #6: This .

Excuse me 900 billion yen.

Speaker #1: The sales incentives . Tend to be very low , reflecting the strong value of our products . Still . We can barely cover the demand and our inventory level tends to be rather low .

900 filling in.

And of course that includes same store sales, which are reflecting.

Stone.

State of the product as well as a value chain revenues do you have anything to add properly. Thank you for your question.

Thank you very much.

Question.

So next to that previous question Huh.

[Company Representative] (Toyota Motor Corp): Thank you very much. Next question. Next to that previous questioner.

Speaker #1: And of course, on the front line, they are doing their very best and producing the number of cars needed in terms of sales.

Yes.

Yeah.

Ms Noh from Yomiuri newspaper, Thank you for your presentation.

Speaker #1: Therefore, we expect very healthy situations going forward.

My question is to consult.

Kenta Kon: Mizuno from Yomiuri Newspaper. Thank you for your presentation. My question is to Kon-san. The Chinese semiconductors, the next period, the issue of next period. What sort of countermeasures are you taking against that shortfall? Has it impacted you, and what sort of measures do you intend to take going forward, please?

Tetsuya Mizuno: Mizuno from Yomiuri Newspaper. Thank you for your presentation. My question is to Kon-san. The Chinese semiconductors, the next period, the issue of next period. What sort of countermeasures are you taking against that shortfall? Has it impacted you, and what sort of measures do you intend to take going forward, please?

Okay, Chinese semiconductors, and the next area they should've next area.

Speaker #6: Now .

Speaker #1: About the breakeven volumes in our earnings.

Oh, what sort of country majors, how you're taking against that shortfall how has it impacted you and what sort of mine just do you intend to take going forward. Please.

Speaker #6: Power .

Speaker #1: I said that we will be making an all-out effort involving different and various activities and initiatives. There are so many that I don't know which one should take the highest priority, but enhancing the value at work and eliminating wasteful tasks, for example.

Yeah.

Mr Sun.

If you could ask two questions at once.

[Company Representative] (Toyota Motor Corp): Mizuno-san, if you could ask two questions at once. Are you satisfied with just one? Just one is fine. Okay.

Or are you satisfied with just one yes, one is okay.

Yes.

Okay.

Thank you.

Speaker #1: Wasteful time in meetings with lots of people involved without much contribution. And of course, we will be very careful in determining price.

Gotcha.

Uh huh.

Riri A: Thank you. Well, most recently, we have not seen any impact so far, but we do know that there's a risk. Therefore, we're trying to scope the impact and the areas where that impact would be felt, and we are currently monitoring the situation very closely. Of course, this is not only for Toyota, but it's, I think, for the entire supply chain, and we're looking for alternatives and what other options we have available. We are researching such alternatives and also monitoring very closely the impact and situation.

Kenta Kon: Thank you. Well, most recently, we have not seen any impact so far, but we do know that there's a risk. Therefore, we're trying to scope the impact and the areas where that impact would be felt, and we are currently monitoring the situation very closely. Of course, this is not only for Toyota, but it's, I think, for the entire supply chain, and we're looking for alternatives and what other options we have available. We are researching such alternatives and also monitoring very closely the impact and situation.

Recently, we have not seen any impact so far but we do know is that the risk. Therefore were trying to scope the impact and the areas where the impact would be felt and we are currently monitoring the situation very closely and of course this is not only.

Speaker #6: Point .

Speaker #1: And increased sales . Certainly reduces break even volumes . Our value chain revenues as well . We do not have the clear goals in terms .

Speaker #6: Of .

For Toyota, but it's I think for the entire supply chain and we're looking for alternatives and what other options. We have available we are researching such alternatives and also monitoring very closely.

Speaker #1: Quantities .

Speaker #6: But .

Speaker #1: We have seen this trend of increasing break-even volumes, and we would like to see it decline. Thank you.

Speaker #2: Second or third row from the back? Yes. From Nikkei, across tech, I have two questions as well. First question about hybrid.

The situation.

Thank you.

Yes.

Yeah.

If you don't mind.

Kenta Kon: Thank you.

Tetsuya Mizuno: Thank you.

Yeah. It was a person who is white jacket in front.

Riri A: Now the person with a white jacket in front. Thank you. I'm Nagai from TV Tokyo. I have two questions for confirm. Number one, about the US market forecast. For the entire year, you have made some changes, or no, you have not made any changes. According to researchers, after October, because of the tariffs, car prices could rise in the general US market. How do you view the North American market going forward? The second question is about what you mentioned in the second part of your presentation, earning power. In order to regain the downward trend, the all-out efforts will be made. What sort of efforts will you be making in terms of break-even volumes, for example? What level would you like to bring it back? By what time frame? Thank you. Thank you very much for your questions.

Riri A: Now the person with a white jacket in front.

Speaker #2: Hybrid is growing quite rapidly . So going forward do you have any expectations about the future growth of hybrid going forward ? As for EV in 2030 , a 3.5 million units I think is your base volume and you don't intend to change that base volume .

Yeah.

Thank you I'm Gonna game from D V. Tokyo I have two questions for consultants number one about the U S market forecast for.

Arata Nagai: Thank you. I'm Nagai from TV Tokyo. I have two questions for confirm. Number one, about the US market forecast. For the entire year, you have made some changes, or no, you have not made any changes. According to researchers, after October, because of the tariffs, car prices could rise in the general US market. How do you view the North American market going forward? The second question is about what you mentioned in the second part of your presentation, earning power. In order to regain the downward trend, the all-out efforts will be made. What sort of efforts will you be making in terms of break-even volumes, for example? What level would you like to bring it back? By what time frame? Thank you.

For the entire ear you have made some changes.

Oh no no we have not made any changes, but according to research is after October because of the tariffs car prices could rise and.

Speaker #2: That's the first question . The second question is about the price pass through of tariff costs , tariffs basically speaking , or in essence should be borne by the US side .

And the general U S market.

How do you view that North America market going forward.

Speaker #2: That is my recognition . If so , well , you mentioned that there's a strong demand for Toyota . If it means that perhaps 15% the entire tariff could be passed through to prices and then for Toyota and for your cooperating companies , that would lead to increased profit and would be beneficial for both .

The second question is about what you mentioned and the second part of that Haitian earning power.

In order to regain the downwards trend. They all all efforts will be made what sort of a F words really we'd be making in terms of breakeven volumes. For example, what level would you like to bring it back by what timeframe. Thank you.

Speaker #2: So, would you say this is not as simple as that? Could you tell me your thinking on this point, on this issue?

Thank you very much for your questions.

As far as a north American market has going for it.

Kenta Kon: Thank you very much for your questions.

Speaker #2: Yes .

Mentioned and very rightly so the volumes.

Speaker #6: May I .

Riri A: As for the North American market going forward, as you mentioned, and very rightly so, the volumes that we expect have not been changed from the previous announcement. As we hear from the US, we see lots of very strong demand for our products. You may know this, the sales incentives tend to be very low, reflecting the strong value of our products. Still, we can barely cover the demand, and our inventory level tends to be rather low. Of course, on the front line, they are doing their very best in producing the number of cars needed. In terms of sales, therefore, we expect very healthy situations going forward. Now, about the break-even volumes in our earning power, I said that we will be making an all-out efforts involving different and various activities and initiatives.

Kenta Kon: As for the North American market going forward, as you mentioned, and very rightly so, the volumes that we expect have not been changed from the previous announcement. As we hear from the US, we see lots of very strong demand for our products. You may know this, the sales incentives tend to be very low, reflecting the strong value of our products. Still, we can barely cover the demand, and our inventory level tends to be rather low. Of course, on the front line, they are doing their very best in producing the number of cars needed. In terms of sales, therefore, we expect very healthy situations going forward. Now, about the break-even volumes in our earning power, I said that we will be making an all-out efforts involving different and various activities and initiatives.

Speaker #2: Regarding hybrid vehicles, it is growing very rapidly, and with that, continuing forward, I guess, is the gist of your question.

That we expect.

Have not been changed from the previous announcement.

We hear from them.

Speaker #2: Well , we believe that the growth will continue . And I can't say . In a but from what I hear of , from my observations of the market , the .

The U S. We see lots of very strong demand for our products.

You May know does.

The sales.

Incentives.

Yes.

Tend to be very low reflecting.

Speaker #2: Request for increased production of hybrids, and the demand from customers for hybrids is very strong. So we would like to accommodate such requests through production, by increasing production and accommodating the customers' requests, thereby increasing our volume for hybrids.

That's true value of our products.

Still.

No.

Yeah.

We can barely cover is a demand.

And our inventory level tends to be rather low.

Speaker #2: I believe .

And of course.

Speaker #6: That . for Bev .

<unk>.

Frontline, they're doing their very best and producing the number of cars need it.

Speaker #2: Well , we're looking at . the actual demand and it seems that compared to our initial estimations , things are actually declining . That is , there's a shortfall against our expectations .

In terms of sales.

Therefore, we expect very healthy situations going forward.

No.

Speaker #2: And therefore we have to look at the customer and market situation to add a appropriate timing , deliver a good products that meet their needs , and the next one was about the price pass through of tariff .

The breakeven volumes in our earning power.

I said that we will be making in the Ole oh forests involving different and various activities and initiatives.

There are so many I don't know, which one they should take the highest priority, but enhancing the value add work eliminating wasteful.

Speaker #6: Costs .

Speaker #2: Well, if you say that because you have such a competitive product, if you increase your prices by 15%, it will be beneficial for all you said.

Riri A: There are so many, I don't know which one should take the highest priority. Enhancing the value-add work, eliminating wasteful tasks. For example, wasteful time of meetings with lots of people involved without much contributions. Of course, we'll be very careful in determining price point. Increased sales certainly reduces break-even volumes, our value chain revenues as well. We do not have the clear goals in terms of quantities, but we have seen this trend of increasing break-even volumes, and we would like to see it decline. Thank you. Second or third row from the back. Yes.

Kenta Kon: There are so many, I don't know which one should take the highest priority. Enhancing the value-add work, eliminating wasteful tasks. For example, wasteful time of meetings with lots of people involved without much contributions. Of course, we'll be very careful in determining price point. Increased sales certainly reduces break-even volumes, our value chain revenues as well. We do not have the clear goals in terms of quantities, but we have seen this trend of increasing break-even volumes, and we would like to see it decline.

<unk> for example.

Speaker #2: But, well, for many.

Speaker #6: Years .

Waste of all time.

Speaker #2: In the case of Toyota, we have many cars that have really been loved and used by our customers. For example, the Corolla, Hilux, Surf, or 4Runner in the United States, or the Land Cruiser.

Meetings, who has lots of people involved are resolved.

Lunch contributions and of course, we'll be very careful in determining price point.

And increased sales suddenly reduces.

Speaker #2: These we have many, many different models, and many customers are loyal to these brands. They continue to use them for many, many years.

And Vale is our value chain revenues as well, we did not have the clear goals in terms of.

Quantities, but.

Speaker #2: And many of our customers are fans of our cars , which means that for us to price these vehicles out of the expectations of customers is very difficult for us to do so .

We have seen this trend of increasing rates.

We'd like to see it decline thank you.

Got it.

Second or third row from the back yes.

Arata Nagai: Thank you.

Speaker #2: We want to enhance the value of these cars in order to charge the customers an appropriate price that meets that value. Because if.

Riri A: Second or third row from the back. Yes.

Yeah.

In Chicago from Nikkei, Oh Cross deck I have two questions as well first question about hybrid hybrid is growing quite rapidly.

Kenta Kon: Chikawa from Nikkei XTECH. I have two questions as well. First question, about hybrid. Hybrid is growing quite rapidly. Going forward, do you have any expectations about the future growth of hybrid going forward? As for EV, in 2030, 3.5 million units, I think is your base volume, and you don't intend to change that base volume? That's the first question. The second question is about the price pass-through of tariff costs. Tariffs, basically speaking, or in essence, should be borne by the US side. That is my recognition. If so, well, you mentioned that there's a strong demand for Toyota, which means that perhaps 15% of the entire tariff could be passed through to prices. For Toyota and for your cooperating companies, that would lead to increased profit and would be beneficial for both.

Riri A: Chikawa from Nikkei XTECH. I have two questions as well. First question, about hybrid. Hybrid is growing quite rapidly. Going forward, do you have any expectations about the future growth of hybrid going forward? As for EV, in 2030, 3.5 million units, I think is your base volume, and you don't intend to change that base volume? That's the first question. The second question is about the price pass-through of tariff costs. Tariffs, basically speaking, or in essence, should be borne by the US side. That is my recognition. If so, well, you mentioned that there's a strong demand for Toyota, which means that perhaps 15% of the entire tariff could be passed through to prices. For Toyota and for your cooperating companies, that would lead to increased profit and would be beneficial for both.

Speaker #6: You .

Going forward or do you have any expectations about the future growth of hybrid going forward for E. Z in 'twenty $33 5 million units I think is your base volume and you don't intend to change that in base volume. That's the first question second question is about the price pass through.

Speaker #2: Outpricing customers' expectations can really lead to losing their loyalty. So, our method would be to take it step by step.

Speaker #2: As for hybrids in 2025, I think somebody said it will reach 5 million units. Perhaps it was a goal that somebody mentioned.

Tariff costs.

Speaker #2: I'm sorry , I'm not quite sure about this , but 5,000,000 in 2020 something . Do you have a goal like that ? A numerical target .

Tariffs.

Basically speaking or.

In essence.

Should be borne by the U S side that is my recognition if so.

Well you mentioned that there's a strong demand for Toyota, which means that perhaps 15% of the entire tariff could be pass through to prices and then for Toyota and for your cooperating companies that would lead to increased profit and would be beneficial for both so are you would you say this.

Speaker #2: You mean .

Speaker #6: Hybrids ?

Speaker #2: Yes . Hybrids . Really ? Well , at least I don't have any numbers firsthand on when we will reach 5 million . But the hybrid ratio amongst our .

It's not as simple as that cause you to tell me your thinking on this point on this issue.

Speaker #2: Oh .

Speaker #6: Sorry .

Kenta Kon: Would you say this is, it's not as simple as that? Could you tell me your thinking on this point, on this issue?

Speaker #2: 4.46 million units . This year . That's about 200,000 units , up from last year . So this pace of growth .

Riri A: Would you say this is, it's not as simple as that? Could you tell me your thinking on this point, on this issue?

Yes.

Mary.

Regarding hybrid.

Riri A: Yes. May I? Regarding hybrid vehicles, it is growing very rapidly, and will that continue going forward, I guess is the gist of your question. Well, we believe that growth will continue. We can't say, you know, but from what I hear of, from my observations of the market, the request for increased production toward hybrids and the demand from customers for hybrids is very strong. So we would like to accommodate such a request through production, through increased production, and accommodate the customers' requests, thereby increasing our volume for hybrids, I believe. As for BEV, well, we're looking at the actual demand, and it seems that compared to our initial estimations, things are actually declining.

Kenta Kon: Yes. May I? Regarding hybrid vehicles, it is growing very rapidly, and will that continue going forward, I guess is the gist of your question. Well, we believe that growth will continue. We can't say, you know, but from what I hear of, from my observations of the market, the request for increased production toward hybrids and the demand from customers for hybrids is very strong. So we would like to accommodate such a request through production, through increased production, and accommodate the customers' requests, thereby increasing our volume for hybrids, I believe. As for BEV, well, we're looking at the actual demand, and it seems that compared to our initial estimations, things are actually declining.

Speaker #6: I .

Speaker #2: I think we should maintain this pace of growth going forward. Yes. Thank you.

Cause it is growing very rapidly and do it that continue going forward I guess is it just your question well, we believe that the growth will continue.

Speaker #7: Let's see this . Hi .

Speaker #1: Thank you very much for your questions. Now, this person in the second row in the section, please. Thank you very much.

And I can't say.

Sure.

But from what I hear from my observations of the market.

Speaker #1: I am Nakano from Nishi-Nippon Daily. Now I have two questions. The first question is about Kanamachi in Fukuoka Prefecture: the battery plant for EVs.

Request for increased.

Jim towards hybrids and the demand from customers for hybrid is very strong so we'd be lifestyle accommodate such a request through production through increased production and accommodate the customer requests, thereby increasing our volume for hybrids I believe.

Speaker #1: In April , you were to be to sign the MoU with the prefecture , but now it has been prolonged and postponed to autumn .

Oh.

Speaker #1: What is the progress ? And also 2028 ? Sort of operation that has been planned , as the production capacity ? Have there been any changes to your original plans ?

For Beth.

Well, we're looking at the actual demand and it seems that oh compared to our initial estimations are things are actually declining that is there's a shortfall against our expectations and therefore, we have to look at the customer and market situation to are they.

Speaker #1: The next question is about taxes under Prime Minister Takaichi.

Riri A: That is, there's a shortfall against our expectations. Therefore, we have to look at the customer and market situation to, at a appropriate timing.

Kenta Kon: That is, there's a shortfall against our expectations. Therefore, we have to look at the customer and market situation to, at a appropriate timing.

Speaker #6: The .

Speaker #1: The Tax Treatment Minister has been appointed, and some special measures could be taken in terms of taxes. What is the view on that situation?

Appropriate timing delay.

Deliver a good products that meet their needs.

And the next one was about the price pass through of tariff costs well.

Kenta Kon: Deliver a good product that meet their needs. The next one was about the price pass-through of tariff costs. Well, if you say that, because you have such competitive product, if you increase your prices by 15% it'll be beneficial for all, you said. Well, for many years, in the case of Toyota, we have many cars that have really been loved and used by our customers. For example, Corolla, Hilux Surf or 4Runner in the US, or Highlander Cruiser. We have many different models, and many customers are loyal to these brands as they continue to use them many years.

If you say that because you have such competitive product. If you increase your prices by 15% it'll be beneficial for all you said, but.

Speaker #1: And also with the outlook for any preferential tax treatment , do you have any outlook for that ? Thank you as well very much for your questions .

Well for many years in the case of Toyota.

Oh, we have many cost that's really been loved and used by.

Speaker #1: As for the first question, Fukuoka Battery.

By our customers for example, Carla Hi, lax so.

Speaker #6: Factory .

A forerunner in the United States or Highland cruiser. These many many different models and many customers are loyal to these brands and they continue to use them. Many many years and many of our customers are our.

Speaker #1: Ongoing study continues. So, I heard that is.

Speaker #6: Well .

Speaker #1: We are talking with the Fukuoka government and stakeholders in Fukuoka Prefecture currently. As for the taxation.

Fans of our cost, which means that so for us to price these vehicles.

Kenta Kon: Many of our customers are fans of our cars, which means that for us to price these vehicles out of the expectations of customers is very difficult for us to do. We want to enhance the value of these cars in order to charge the customers an appropriate price that meets that value. If you outprice the customers' expectations, you can really lose their loyalty. Our method would be to take it step by step. As for hybrids, in 2025, I think somebody said it will reach 5 million units. Perhaps it was a goal that somebody mentioned. I'm sorry, I'm not quite sure about this, but 5 million in 2020 something. Do you have a goal like that, a numerical target? You mean hybrids?

Speaker #6: Well .

Out of the expectations of customers, it's very difficult for us to do so we wanted to enhance the value of these.

Speaker #1: We have seen changes in the administration in this country. Now, there are various taxes involved in automotives, and revising and changing those taxes have been something that Jama and other organizations have been addressing.

Cards.

In order to charge the customers an appropriate price as that meets that value.

So if.

If you out price of customer's expectations. So you can really lose their loyalty.

So our method would be to take it step by step.

Speaker #6: Advocating .

Speaker #1: Towards the .

Speaker #6: Government . Well .

That's for hybrids.

In 2025, I think Oh somebody said it will reach 5 million units.

Speaker #1: When it comes to taxes, we have to consider how we may be able to maintain monozukuri and production in this country in a healthy way.

It was a goal that somebody mentioned I'm, sorry, I'm not quite sure about this but 5 million in 'twenty 'twenty something do you have a goal like that a numerical target.

Speaker #1: It's very important for the entire industry , not only with the automotives . I hope . Any form of taxes will be able to enhance the domestic demand for the industrial products .

Okay.

Speaker #1: Therefore, it is my belief that Jamma will continue to advocate for that. Thank you very much. Thank you.

Okay.

You need hybrid yes hybrids.

Really.

Yeah.

[Company Representative] (Toyota Motor Corp): Yes, hybrids.

Kenta Kon: Yes, hybrids.

Speaker #2: Then the person in white at the very back of the room. From Kyodo, my name is Tokumitsu. Thank you for your presentation.

Well at least I don't have any numbers firsthand on when we will reach 5 million, but the hybrid.

Kenta Kon: Really? Well, at least I don't have any numbers firsthand on when we'll reach 5 million, but the hybrid ratio amongst our... Oh, sorry, 4.46 million units this year. That's about 200,000 units up from last year. This pace of growth, I think we should maintain this pace of growth going forward. Yes. Thank you.

Our ratio amongst our.

Speaker #2: I also have two questions. First question, the Japan Mobility Show is now on, and I saw the exhibit there. The Century branding has come to a milestone.

Oh, sorry.

4.46 million units. This year, that's about 200000 units up from last year and so this pace of growth.

Yeah.

I think we will we should maintain this pace of growth going forward, yes. Thank you.

Speaker #2: I think that some of these pilot cars are also viewed as being aimed towards mass production. So, do they represent the future production plans of Toyota?

Okay.

Does she desk.

Thank you very much for your questions.

No.

[Company Representative] (Toyota Motor Corp): Thank you very much for your questions. This person in the second row in this section, please.

This person in the second row.

Speaker #2: The second question is about the impact of tariffs. You said it was ¥1.4 trillion, but now it has been increased to ¥1.45 trillion.

In this section please.

Thank you very much.

I am not gonna from initially upon daily now I have two questions.

Speaker #2: So, there was a slight increase. In August, you had calculated a reduction in auto tariffs, but you did not make that modification because, after the imposition of the actual tariffs in September, is that the reason for the slight increase?

Riri A: Thank you very much. I am Nakano from Nishinippon Daily. Now, I have two questions. The first question is about Kanda-machi in Fukuoka Prefecture, the battery plant for EVs. In April, you were to sign the MoU with the prefecture, now it has been prolonged and postponed to autumn. What is the progress? Also 2028 start of operation that has been planned as well as the production capacity. Have there been any changes to your original plans? The next question is about taxes. Under Takaichi, Prime Minister Takaichi, the tax treatment minister has been appointed. Some special measures could be taken in terms of taxes. What is the view on that situation? Also, with the outlook for the any preferential tax treatment, do you have an outlook for that?

[Company Representative] (Toyota Motor Corp): Thank you very much. I am Nakano from Nishinippon Daily. Now, I have two questions. The first question is about Kanda-machi in Fukuoka Prefecture, the battery plant for EVs. In April, you were to sign the MoU with the prefecture, now it has been prolonged and postponed to autumn. What is the progress? Also 2028 start of operation that has been planned as well as the production capacity. Have there been any changes to your original plans? The next question is about taxes. Under Takaichi, Prime Minister Takaichi, the tax treatment minister has been appointed. Some special measures could be taken in terms of taxes. What is the view on that situation? Also, with the outlook for the any preferential tax treatment, do you have an outlook for that?

The first question is about that much in Fukuoka Prefecture.

The battery plant for Evs.

Okay.

In April you were two these two signed the Mou with a prefecture, but no at Huntsville, prolonged and postpone the two old them. What is the progress and also 'twenty 'twenty eight sort of operation that has been planned as well as the production capacity have there been any changes to your order.

Speaker #2: Is the .

Speaker #6: Question ?

Speaker #2: Yes, thank you. Regarding the Japan Mobility Show, thank you very much for coming to our booth at the Japan Mobility Show.

Speaker #2: As you said . Well , I don't know if we intend to mass produce all of them , but of course , several of these models will be marketed in the future , at least I believe they .

No pause.

The next question is about taxes.

Speaker #6: Will be .

Speaker #2: And I think this attests to the strength of our product competitiveness. That's it in a nutshell. But especially, the Century brand was launched.

I undertook a H a prime minister talk about Egypt.

Tax treatment administered hasn't been appointed.

So do you know.

Speaker #2: We were able to launch a totally new brand called Century, which I thought was a very big step.

And some special measures could be taken in terms of taxes and what is the view on the situation and also.

Speaker #6: Forward .

Speaker #2: Because currently, no new car names or models are very hard to come by. But to start from scratch, starting a totally new brand, I think, was a major initiative in the company, and it's also a big message from.

The outlook for that any preferential tax treatment do you have any outlook for that.

Yeah.

Hi.

Thank you very much for your questions.

That's for the first question to go got conduct battery if hock tree.

Speaker #6: Us .

Speaker #2: The .

Kenta Kon: Thank you very much for your questions. As for the first question, Fukuoka Kanda Battery Factory, ongoing study continues. I heard, that is. Well, we are talking with the Fukuoka government and stakeholders in Fukuoka Prefecture currently. As for the taxation, well, we have seen the changes in the administration in this country. Now, there are various taxes involved in automotive, and revising and changing of those taxes have been something that JAMA and other organizations have been advocating towards the government. Well, when it comes to taxes, we have to consider how we may be able to maintain Monozukuri and production in this country in a healthy way. It's very important for the entire industry, not only for the automotives. I hope any form of taxes will be able to enhance domestic demand for the inter industrial product.

Speaker #6: Launch . .

Speaker #2: You may have heard the presentation to launch century , our chairman , Toyoda , said . this is the pride of Japan . He said century , the car and the brand .

Oh Boy and the study continues.

Yeah.

So I heard that is.

Oh.

Speaker #6: Is the .

Well.

Speaker #2: Pride of Japan . He said . So from that perspective , it goes beyond just . a car model . I mean , I think in Toyota it represents not just a model , but something beyond that .

We are talking with.

Oh, gosh government and stakeholders and if a cocoa prefecture currently.

As far as the taxation.

Uh huh.

Well, we have seen the changes in the administration in this country.

Speaker #2: So I do hope that you will take it as such. Thank you. Regarding the second question, may I address that question?

Now there are various taxes involved in automotives and revising and changing.

Speaker #2: In the first quarter , it was 1.4 trillion , but now we've added 5 million . And as you said , from mid September there was a 15% tariff imposed .

Of those taxes.

Have been something that Jama and other organizations have been.

Forget it.

Advocating.

Speaker #2: That is a tariff level was decreased . And so this is based on the recalculation of the impact of tariffs and the tariff impact will hit not only Toyota but also our suppliers .

Towards the government.

Well when it comes to taxes, we have to consider how we may be able to maintain when does it create in production in this country in a healthy way, it's very important for the entire industry not only were they automotives I hope any form of the taxes will be able to do it in house.

Speaker #2: And about 70% of parts and components . Well , the components and parts manufacturers are for 70% of the market . So we want to work together with them to overcome this .

Mystic demand for.

Before they entered or industrial products. Therefore, it is my belief that John and I will continue to advocate for that thank you very much.

Speaker #2: When I visit the suppliers, each supplier has, for example,

Speaker #6: A .

Speaker #2: Embarked on a labor saving and also changing their processes , etc. to challenge new initiatives to address the impact . So in addition to the product competitiveness , we would like to master our forces together as a manufacturing industry to overcome the tariff issue .

Kenta Kon: Therefore, it is my belief that JAMA will continue to advocate for that. Thank you very much.

Kenta Kon: Therefore, it is my belief that JAMA will continue to advocate for that.

Thank you.

Sure.

And then the person you're white at the very back of the room.

Kenta Kon: Thank you very much.

[Company Representative] (Toyota Motor Corp): Thank you. The person in white at the very back of the room.

Riri A: Thank you. The person in white at the very back of the room.

From Kildow My name is Takemitsu. Thank you for your presentation. I also have two questions. The first question the depend mobility show is now on.

Kenta Kon: From Kyodo. My name is Tokumitsu. Thank you for your presentation. I also have two questions. First question, the Japan Mobility Show is now on, and I saw the exhibit there. The Century branding has come to a milestone, I think. I think that some of these pilot cars are also a view towards mass production. Do they represent the future production plans of Toyota? The second question is about the impact of tariffs. You said it was JPY 1.4 trillion, but now that's been increased to JPY 1.45 trillion, so slight increase. In August, you had calculated on a reduction in auto tariffs, but you did make that modification after the imposition of the actual tariffs in September.

Shigehito Tokumitsu: From Kyodo. My name is Tokumitsu. Thank you for your presentation. I also have two questions. First question, the Japan Mobility Show is now on, and I saw the exhibit there. The Century branding has come to a milestone, I think. I think that some of these pilot cars are also a view towards mass production. Do they represent the future production plans of Toyota? The second question is about the impact of tariffs. You said it was JPY 1.4 trillion, but now that's been increased to JPY 1.45 trillion, so slight increase. In August, you had calculated on a reduction in auto tariffs, but you did make that modification after the imposition of the actual tariffs in September.

Speaker #2: Thank you .

And I saw the exhibit there.

Speaker #1: Thank you very much for your interest. The person inside.

And.

The century rounding has come to a milestone I think but I think that the some of these are pilots cars.

Speaker #6: Please .

Speaker #1: I am Toyoshima WCBS TV Tokyo Concern . I have some questions for you . As a . result of the US , Japan Tariff agreement , what do you think of it ?

<unk> are also a view towards mass production. So do they represent the future production plants up to the second question is about the impact of tariffs that you. Just said it was one point of four trillion yen, but no. That's been increased to 1.45 trillion. So slight increase in in August.

Speaker #1: Well , actually , the end result was as Toyota had expected , 15% . But now you are expecting the ¥5 million and negative increase .

Speaker #1: . Is it because you have taken the very conservative way of revisiting your numbers , or is a a situation really , really difficult ?

You had calculated on a reduction in auto tariffs, but you did make that modification because after the imposition of the actual terrorists in September is that the reason for the slight increase is the question.

Speaker #1: Well, shortly after the announcement of your Q2 results, your stock price went up a little bit. But now, it has begun to decline.

Yes. Thank you regarding the Japan mobility show it. Thank you very much for coming to our booth at the permeability show as you said well I don't know if we intend to mass produce all of them but of course several of these models will be.

Kenta Kon: Is that the reason for this slight increase, is the question? Yes. Thank you. Regarding the Japan Mobility Show, thank you very much for coming to our booth at the Japan Mobility Show. As you said, well, I don't know if we intend to mass produce all of them, but of course, several of these models will be marketed in the future. At least I believe they will be. I think this attests to the strength of our product competitiveness. That's it in a nutshell. Especially the Century brand was launched. We were able to launch a totally new brand called Century, which I thought was a very big step forward. Because currently, you know, new car names, new models are very hard to come by.

Shigehito Tokumitsu: Is that the reason for this slight increase, is the question?

Kenta Kon: Yes. Thank you. Regarding the Japan Mobility Show, thank you very much for coming to our booth at the Japan Mobility Show. As you said, well, I don't know if we intend to mass produce all of them, but of course, several of these models will be marketed in the future. At least I believe they will be. I think this attests to the strength of our product competitiveness. That's it in a nutshell. Especially the Century brand was launched. We were able to launch a totally new brand called Century, which I thought was a very big step forward. Because currently, you know, new car names, new models are very hard to come by.

Speaker #1: Probably the market expected more of the improvement in revenues and profit , but how do you view that ? Are there any risks of downward revisions going forward or upward revisions in your view ?

Be marketed in the future.

At least I believe they will.

And I think this attests to the strength of our product competitiveness, that's it in a nutshell, but especially at the century brand.

Speaker #1: I thank you very much for your questions . Well , to be honest with you , what do we review ? The situation ?

It was launched we were able to launch a totally new brand called century, which I thought was a very big step.

Speaker #1: Well, the striking of the agreement itself is something that we are extremely thankful for. The government officials, without anything being decided, ...

Forward because currently.

And no new car names are new models are very hard to come by but to start from starting as a totally new brand I think was a major initiative in the company and its also a big message from us.

Speaker #1: We really cannot plan on production in the automotive industry, which certainly is a very big industry. So, uncertainties would not lead us to focus, cannot plan on cost reduction, cannot plan anything.

Kenta Kon: To start from starting a totally new brand, I think was a major initiative in the company, and it's also a big message from us. The launch, you may have heard the presentation to launch Century. Our chairman, Toyoda, said, This is the pride of Japan. He said, Century, the car and the brand, is the pride of Japan, he said. From that perspective, it goes beyond just a car model. I mean, I think in Toyota, it represents not just a model, but something beyond that. I do hope that you will take it as such. Thank you. Regarding the second question, may I address that question? In Q1, it was JPY 1.4 trillion, now we've added JPY 5 million.

The launch.

You may have heard the presentation to lunch century, Oh, our chairman Toyoda said this is the pride of Japan. He said century, the car and the brand is the pride of this path. He said so from that perspective.

Speaker #1: Therefore, I really would like.

Speaker #6: To .

Speaker #1: I want to thank all those people who are involved in the negotiations. This is not a small improvement, and certainly, we will have to work on what we can do both in the short term and mid to long term in order to make further improvements, not only in North America, but also in procurement, production, sales, and marketing.

It goes beyond just a car model I mean, I think Eaton Toyota It represents not just our model, but something beyond that so I do hope that you will take it as such.

Thank you regarding the second question May I address that question.

Speaker #1: All of us have to work together to bring about some positive results. Are you relieved, or do you still see the situation as rather difficult?

In the first quarter it was 1.4 trillion.

Up to now we've added 5 million and as you said.

From a mid September there was a 15% of tariffs are imposed that is a tough a level of us are decreased and so this is based on a recalculation of the impact of tariffs and the tariff impact will hit not only Toyota, but also our suppliers and about 70% of par.

Speaker #1: Well , I would say both . Well , upward revision or downward revision possibilities . Actually . We are often called being very conservative in our projections , but I do believe we are being pretty neutral about this .

Kenta Kon: As you said, from mid-September, there was a 15% tariff imposed. That is, the tariff level was decreased. This is based on a recalculation of the impact of tariffs. The tariff impact will hit not only Toyota, but also our suppliers and about 70% of parts and components. Well, the components and parts manufacturers, they count for 70% of the market, so we want to work together with them to overcome this. When I visit the suppliers, each supplier has, for example, embarked on labor saving and also changing their processes, et cetera, to challenge new initiatives to address the impact. In addition to the product competitiveness, we would like to muster our forces together as a manufacturing industry to overcome the tariff issue.

Component.

Well the components and parts manufacturers account for 70% of the market. So we want to work together with them to overcome this when they visit the suppliers. Each has a player has for example.

Speaker #1: But of course , toward the end of the year , we certainly do make efforts so that we can provide you with the up even the slightest upside .

Speaker #1: Thank you very much for your questions.

Right.

And box on a labor saving them and also changing their processes et cetera to challenge, our new initiatives to address the impact.

Speaker #2: Now , we'd like to entertain questions from participants online . And after that , we'll come back to the people in the audience for questions .

So in addition to the product competitiveness, we would like to muster forces together as a manufacturing industry to overcome the tariff issue. Thank you.

Speaker #2: So, for those of you with questions online, please push the "hands-up" button on your screen. We will call out your names, and then you can turn on your cameras and your microphones to ask your questions, please.

Got it.

Thank you very much for your interest.

Speaker #2: Okay, Terasaki from Best Car, please. So, we'll switch the screen to you. So, please do start speaking when you see your image shown projected on the screen.

Kenta Kon: Thank you.

Shigehito Tokumitsu: Thank you.

The person in place to place.

Riri A: Thank you very much for your interest. The person on the left, please. I am Toyoshima, World Business Satellite. Kon-san, I have some questions for you. As a result of the US-Japan tariff agreement, what do you think of it? Well, actually, the end result was, as Toyota had expected, 15%, but now you are expecting JPY 5 million in negative increase. Is it because you have taken the very conservative way of revisiting your numbers, or is the current situation really, really difficult? Well, shortly after the announcement of your Q2 results, your stock price went up a little bit, but now it began to decline. Probably the market expected more of the improvement in revenues and profit, but how do you view that? Are there any risks of downward revisions going forward or upward revisions in your view?

Kenta Kon: Thank you very much for your interest.

Shimon W. P. S T V Tokyo.

Riri A: The person on the left, please.

Close on I have some questions for you. That's a result of the U S. Japan tariff agreement.

Shinsaku Toyoshima: I am Toyoshima, World Business Satellite. Kon-san, I have some questions for you. As a result of the US-Japan tariff agreement, what do you think of it? Well, actually, the end result was, as Toyota had expected, 15%, but now you are expecting JPY 5 million in negative increase. Is it because you have taken the very conservative way of revisiting your numbers, or is the current situation really, really difficult? Well, shortly after the announcement of your Q2 results, your stock price went up a little bit, but now it began to decline. Probably the market expected more of the improvement in revenues and profit, but how do you view that? Are there any risks of downward revisions going forward or upward revisions in your view?

What do you think of it.

Well actually the end result was as Toyota I had expected, 15%, but now we're expecting in the 5 million men in negative increase.

Speaker #2: Can you hear me ? Yes , yes , we hear you . And we also see you . Thank you . This is Terasaki from the editorial department of Best Car .

Is it because you have taken a very conservative way of revisiting your numbers.

Speaker #2: Thank you . I have two questions . First question . Well , it's been mentioned several times about the value chain and that it takes up a big portion of your operating profit .

Or is that crash situations, where really really difficult.

Well shortly after the announcement of air.

Speaker #2: And looking at the graph from 2020 for five years, you probably increased your operating profit from the value chain by double. You're doing many things.

Q2 results here the stock price went up a little bit now it began to decline probably the market expected more of the improvement in revenues and profits but.

Speaker #2: I think . Of course , the value of used cars is increasing , but five years ago , I believe the residual residual value of used cars was still very high .

How do you view that are there any risks of downward revisions going forward or upward revisions any of you.

Speaker #2: But the operating profit doubling , I think , is something really a tremendous feat . So . Specifically , what pushed up the operating income so much .

Yes.

Yeah.

Thank you very much for your questions.

Well to be honest with you what the way we view the situation well.

Kenta Kon: Thank you very much for your questions. Well, to be honest with you, what do we view the situation? Well, the striking the agreement itself is something that we are extremely thankful to the government officials. Without anything being decided, we really cannot plan on production in the automotive industry, which certainly is a very big industry. Uncertainties would not lead us to focus, cannot plan on cost reduction, cannot plan anything. Therefore, I really would like to thank all those people who are involved in the negotiations. It is not a small improvement, and certainly, we will have to work on what we can do both short term and mid to long term in order to make further improvement. Not only North America, but procurement, production, sales, and marketing, all of us have to work together to bring about some positive results.

Speaker #2: And you have 150 million cars in your possession; that's quite a large number. But five years ago, I think you had similar numbers.

Striking the agreement itself.

It's something that we are extremely thankful.

Speaker #2: So what changed to boost the operating profit in the value chain so much over the past five years ? To the extent that you can disclose that , the first question , second question , since this is a good opportunity , the you talked about Japan mobility show , but in the .

Two they are government officials.

Without any.

Anything.

Being decided we really cannot plan on production and the automotive industry, which suddenly is a very big industry. So uncertainties.

Not lead us to focus kind of plan on cost reduction.

Cannot find anything therefore.

I really like to thank all those people who are involved in the negotiation.

And it is not a small.

Men and.

We'll have to.

Sure.

Where I found and what we can do both short term and mid to long term in order to make further improvement not only north America, but procurement production sales and marketing all of us off to work together to bring about some positive or is.

<unk>.

Are you relieved or do you still see that situation to be rather difficult.

Kenta Kon: Are you relieved or do you still see the situation to be rather difficult? Well, I would say both. Well, upward revision or downward revision possibilities. Actually, we are often called being very conservative in our projections, but I do believe we are being pretty neutral about this. Of course, toward the end of the year, we certainly do make efforts so that we can provide you with the up, even the slightest upside. Thank you very much for your questions. We'd like to entertain questions from participants online, and after that, we'll come back to the people in the audience for questions. Those of you who with questions online, if you could push the hands up button on your screen, and then we will call out your names, then turn on your cameras and your microphone and ask your question, please. Okay.

Shinsaku Toyoshima: Are you relieved or do you still see the situation to be rather difficult?

Well I would say both.

Well upwards revision downward revision possibilities.

Kenta Kon: Well, I would say both. Well, upward revision or downward revision possibilities. Actually, we are often called being very conservative in our projections, but I do believe we are being pretty neutral about this. Of course, toward the end of the year, we certainly do make efforts so that we can provide you with the up, even the slightest upside.

Actually.

Cool.

Got it.

Well you Ofer.

Cold being very conservative in our projections, but I do believe we are being pretty.

Pretty neutral about this.

But of course towards the end of the ear.

We certainly do make up for it so that we can provide you with.

Even the slightest upside thank you very much for your questions.

Nobody likes to entertain questions from participants online and after that I will come back to the.

[Company Representative] (Toyota Motor Corp): Thank you very much for your questions. We'd like to entertain questions from participants online, and after that, we'll come back to the people in the audience for questions. Those of you who with questions online, if you could push the hands up button on your screen, and then we will call out your names, then turn on your cameras and your microphone and ask your question, please. Okay.

People in the audience for questions. So those of you who has questions online if you could push the hands up button on your screen and then we will call out. Your name then turn on your cameras and your microphone and ask your question. Please okay did affect it sounds from best car. Please.

So we'll switch screen to uses so please do start speaking when you see your image.

Kenta Kon: Terasaki-san from Best Car, please. We'll switch screen to you. Please do start speaking when you see your image shown, projected on the screen. Can you hear me? Yes, we hear you, and we also see you. Thank you. This is Terasaki from the editorial department of Best Car. Thank you. I have two questions. First question. Well, it's been mentioned several times about the value chain and that it takes up a big portion of your operating profit. Looking at the graph, from 2020 for five years, you've probably increased your operating profit from value chain by double. You're doing many things. I think, of course, the value of used cars is increasing. Five years ago, I believe the residual value of your used cars was still very high.

[Company Representative] (Toyota Motor Corp): Terasaki-san from Best Car, please. We'll switch screen to you. Please do start speaking when you see your image shown, projected on the screen.

Shown projected on the screen.

Yeah.

Okay can you hear me, yes, yes, we hear you and we also see you. Thank you. This is Dennis I'll give him the editorial department of best car. Thank you and I have two questions. The first question.

Terasaki Shogo: Can you hear me?

Kenta Kon: Yes, we hear you, and we also see you.

Terasaki Shogo: Thank you. This is Terasaki from the editorial department of Best Car. Thank you. I have two questions. First question. Well, it's been mentioned several times about the value chain and that it takes up a big portion of your operating profit. Looking at the graph, from 2020 for five years, you've probably increased your operating profit from value chain by double. You're doing many things. I think, of course, the value of used cars is increasing. Five years ago, I believe the residual value of your used cars was still very high.

Well, it's been mentioned several times about the value chain and that it takes up a big portion of your operating profit and looking at the graph it from 'twenty to 'twenty four five years.

You've probably increased are you operating profit from value change by double you are doing many things I think of course the value of used cars is increasing its about five years ago. I believe there is still residual value of your used car. So it's still very high.

But the operating profit doubling I think it's something Oh really a tremendous feat so specifically what pushed up the operating income so much.

Kenta Kon: The operating profit doubling, I think, is something really a tremendous feat. Specifically, what pushed up the operating income so much? You have 150 million cars in possession. That's quite a large number. 5 years ago, I think you had similar numbers. What changed to boost the operating profit in the value chain so much over the past 5 years to the extent that you can disclose? That's the first question. Second question, since this is a good opportunity, you talked about Japan Mobility Show, in the, at your booth in the southern hall, it was very popular in Century. There was a 40-minute waiting line to view the Century.

Terasaki Shogo: The operating profit doubling, I think, is something really a tremendous feat. Specifically, what pushed up the operating income so much? You have 150 million cars in possession. That's quite a large number. 5 years ago, I think you had similar numbers. What changed to boost the operating profit in the value chain so much over the past 5 years to the extent that you can disclose? That's the first question. Second question, since this is a good opportunity, you talked about Japan Mobility Show, in the, at your booth in the southern hall, it was very popular in Century. There was a 40-minute waiting line to view the Century.

And you have 150 million, causing a position that's quite a large number of about five years ago. I think you had similar number so what changed.

To boost the operating profit in the value chain. So much over the past five years to the extent that you said disclose that's the first question second question.

This is a good opportunity are the are you talking about the Japan mobility show them, but are in the Joe booths in the southern hole. It was a very popular and century. There was a 40 minute are waiting in line to view the century and so for the mobility show as a whole I think the Japanese market.

It will be boosted in galvanized. So if you could constant talk about your impressions about the heat of the mobility ship.

Kenta Kon: For the Mobility Show as a whole, I think the Japanese market will be boosted and galvanized. Kon-san, talk about your impressions about the heat at the Mobility Show. Yes. Thank you. First question will be addressed by myself, Azuma. The value chain. Well, about 7 years ago, for the employees and to the outside, the then president talked about leveraging on the ownership and 6,000 stores and oversee 16,000 dealership network, leveraging that strong dealership network to communicate on a one-to-one basis with our customers. That declaration was made in 2017 or 2016. Then we started KINTO, and about 5 years ago, the car ownership was a little more than 100 million.

Terasaki Shogo: For the Mobility Show as a whole, I think the Japanese market will be boosted and galvanized. Kon-san, talk about your impressions about the heat at the Mobility Show.

Yes.

Your first question will be addressed by myself Hudson Ma.

Takanori Azuma: Yes. Thank you. First question will be addressed by myself, Azuma. The value chain. Well, about 7 years ago, for the employees and to the outside, the then president talked about leveraging on the ownership and 6,000 stores and oversee 16,000 dealership network, leveraging that strong dealership network to communicate on a one-to-one basis with our customers. That declaration was made in 2017 or 2016. Then we started KINTO, and about 5 years ago, the car ownership was a little more than 100 million.

The value chain.

Well about seven years ago.

Oh for the employees and to the outside.

Then Preston talked about the leverage on the ownership and a 6000 stores and overseas 16000 dealership networks leveraging that strong a dealership network to communicate so no one to one basis with their customers and that declaration was made in.

Plenty of 17 or 16, and then we started king toe and about five years ago.

Oh, the car ownership was a little more than 100 million, but over the past five years. Thanks to you our new car sales has been increasing at 10 million a year and also our ownership of our cars has also increased and I guess that backdrop in Europe, we extended our guarantee period or so.

Kenta Kon: Over the past five years, thanks to you, new car sales has been increasing at 10 million a year. Also, our ownership of our cars has also increased. Against that backdrop in Europe, we extended our guarantee period so that we can entice customers to come to our dealers more often. As the years go by, we lose contact with our customers, but we wanted to recapture that contact, sorry, to have them come to our dealers and purchase supplies and accessories. That cycle has now begun to turn, and that's now expanding from Europe to the other regions. That's one major initiative that led to this. In Asia, we offer aftermarket parts that is more inexpensive accessories and supplies, and also financial services are provided.

Takanori Azuma: Over the past five years, thanks to you, new car sales has been increasing at 10 million a year. Also, our ownership of our cars has also increased. Against that backdrop in Europe, we extended our guarantee period so that we can entice customers to come to our dealers more often. As the years go by, we lose contact with our customers, but we wanted to recapture that contact, sorry, to have them come to our dealers and purchase supplies and accessories. That cycle has now begun to turn, and that's now expanding from Europe to the other regions. That's one major initiative that led to this. In Asia, we offer aftermarket parts that is more inexpensive accessories and supplies, and also financial services are provided.

That nobody can entice customers to come to our dealers more often.

And I say years ago by Oh, we.

We lose contact with our customers, but we wanted to recapture that content or context.

Oh I'm sorry.

And per se.

Lies in accessories in that cycle.

And that's now expanding from Europe to the other regions. So that's one major initiative that led to this and in Asia. We offer a second part to that is a more inexpensive accessories and supplies and also funding sources are provided.

So we want to utilize the dealership network to extend our touch points with our customers and you know just the head office telling us.

Kenta Kon: We want to utilize the dealership network to extend our touchpoints with the customers. You know, just the head office telling these regions what to do, you'll not come up with good ideas. Such good practices are now being leveraged across various regions. We're building on these good practices, sharing these good practices, and that's leading, I think, to the very good results we're seeing today. Thank you. About the Japan Mobility Show, thank you very much for your attendance. My impression about the Japan Mobility Show was your question. Well, we had such a large turnout of so many customers who were viewing our cars with joy. I was very happy to see the delight on their faces at the Japan Mobility Show Motor Show.

Takanori Azuma: We want to utilize the dealership network to extend our touchpoints with the customers. You know, just the head office telling these regions what to do, you'll not come up with good ideas. Such good practices are now being leveraged across various regions. We're building on these good practices, sharing these good practices, and that's leading, I think, to the very good results we're seeing today.

To do you don't come up with a good idea, but such a good practices are now being leveraged across our various regions.

Yeah.

These are good practices are sharing these big good practices and that's leading to the very good results there same thing.

Thank you.

Okay.

Some of it depend mobility show. Thank you very much for your attendance.

Terasaki Shogo: Thank you.

Kenta Kon: About the Japan Mobility Show, thank you very much for your attendance. My impression about the Japan Mobility Show was your question. Well, we had such a large turnout of so many customers who were viewing our cars with joy. I was very happy to see the delight on their faces at the Japan Mobility Show Motor Show.

And in my opinion about the Japan mobility show about your question well, we had so such a large turn out so many customers who are viewing our cars with joy.

And I was very very happy to see the delight on their faces and the Japan mobility show a motor show.

Oh, well I think all across the world you see regions where the.

Caught scope or scale of these mobility shows are being reduced and.

Kenta Kon: Well, I think all across the world, you see regions where the scope or scale of these mobility shows are being reduced and they're shifting towards the electronics and the electrical components on cars. In Japan, we call this a mobility show. It's a show for mobility. To have so many people come and delight in these exhibits and have fun, you know, we were really encouraged and heartened by them. Looking at the smiles on the faces of customers, we were very happy ourselves. Thank you.

The shifting towards the electronics and electrical components on cars, but in Japan, We call. This our mobility show, it's a show for mobility.

And to have so many.

People come and delight in these exhibit Suzanne how fun you know we were really encouraged in it and hardened by them.

And looking at the smiles on the faces of customers, we are very very happy.

Ourselves thank you.

Okay sounds good. Thank you very much now let's come back to the.

Terasaki Shogo: Thank you.

Okay.

Takanori Azuma: Tanasaki, thank you very much. Now let's come back to the on-site journalists. In the middle section, the second row from the front.

[Company Representative] (Toyota Motor Corp): Tanasaki, thank you very much. Now let's come back to the on-site journalists. In the middle section, the second row from the front.

John was.

In the Middle section.

The second row.

From.

The phone I am a to me from Tunisia Dae Lee Thank you.

Bob can I just stay so I have two questions.

President Trump the other day it talked about 10 <unk>.

Riri A: I am Atsumi from Nikkan Kogyo. Thank you. About US, I have two questions. President Trump, the other day, talked about $10 billion investment for Toyota to build a new plant in the US. What is your take on what he has said? Have you made any changes to your investment plan in the US? That's the first question. The second question, the US government talked about Toyota expanding its dealers network to sell other brand's cars. Is it true? If it is, when are you starting that effort? Thank you.

[Company Representative] (Toyota Motor Corp): I am Atsumi from Nikkan Kogyo. Thank you. About US, I have two questions. President Trump, the other day, talked about $10 billion investment for Toyota to build a new plant in the US. What is your take on what he has said? Have you made any changes to your investment plan in the US? That's the first question. The second question, the US government talked about Toyota expanding its dealers network to sell other brand's cars. Is it true? If it is, when are you starting that effort? Thank you.

Billion dollars investment for Toyota to build a new plant in the United States. So what is your take on what he has said and have you made any changes to your investment plan in the United States. So that's the first question.

Second question the U S government.

Okay.

Yeah.

I talked about Toyota expanding as Steelers network to sell other raws cars is that true and if you. If it is when are you starting that effort. Thank you.

Right.

Thank you for your questions.

For one thing the $10 billion.

Kenta Kon: Thank you for your questions. For one thing, $10 billion, I read that in news. Well, the United States really wants to see employment increasing, and customers should be served with next generation of cars and services. We do plan sizable investment plan going forward. I cannot really say it's $10 billion, but I would say Toyota will continue to make a sizable investment in the United States. I have to limit myself to that. Now, in terms of Toyota's dealership to sell imported cars. Well, Toyota makes cars in the United States, so we are considering doing something about the Toyota cars made in the United States. Now how about other OEMs vehicles being sold in Toyota's dealers network? Well, it is not for us to decide, but if there are any demand or requests for that end, then we may consider it.

I read that in news.

Well.

The United States.

Oh really.

He wants to see employment, Inc.

Increasing.

And.

Customers should be served with next generation of cars and services. Therefore.

We do fun sizable investment.

Plant going forward.

No.

Okay.

I cannot really say, it's $10 billion, but.

I would say that we will continue to make a sizable investment internet of states.

I have to limit myself to that now in terms of Toyota dealership.

To sell imported cars around the world.

Right.

Well.

Yeah.

Toyota makes cars and then I'd just say so.

So we.

We are considering.

Doing something about the Toyota cars made in the United States.

Now how about other Oems.

Vehicles being sold in a Toyota dealers network well.

Well it is not for us to decide but if there are any demand or requests for that and then we may consider it.

Yeah.

Thank you.

Yeah.

Yes, the person in front of the microphone with the spectacle.

Takanori Azuma: Thank you. Yes, the person in front of the microphone with the spectacle.

Kenta Kon: Thank you.

Okay.

[Company Representative] (Toyota Motor Corp): Yes, the person in front of the microphone with the spectacle.

Oh from Us hockey newspaper.

It's related to that actually I have two questions on tariffs first question.

Kenta Kon: Ohira from Asahi Shimbun. It's related to that issue. I have two questions on tariffs. First question. Toyota, you're considering selling US-made cars in Japan, and that was announced when President Trump came to Japan. Considering the briskness of the US market and also the US and Japan production capabilities and cost of transportation, it doesn't seem to be very economically rational. What would be the goal? Or what was the motivation of doing this, if you're going to do it? Also, second question in relation to that, for the cars assembled in the United States, conventionally, you are procuring parts from across North America. Now, these parts may be replaced by US domestic made parts. Are you considering such a shift, or have you already started such initiatives? Yes, thank you. First question.

Masayoshi Ohira: Ohira from Asahi Shimbun. It's related to that issue. I have two questions on tariffs. First question. Toyota, you're considering selling US-made cars in Japan, and that was announced when President Trump came to Japan. Considering the briskness of the US market and also the US and Japan production capabilities and cost of transportation, it doesn't seem to be very economically rational. What would be the goal? Or what was the motivation of doing this, if you're going to do it? Also, second question in relation to that, for the cars assembled in the United States, conventionally, you are procuring parts from across North America. Now, these parts may be replaced by US domestic made parts. Are you considering such a shift, or have you already started such initiatives?

Good you're considering selling our U S made cars in Japan, and that was announced when president Trump came to Japan, but considering the riskiness of the U S market and also the U S and Japan production capabilities and cost of transportation.

It doesn't seem to be very economically irrational. So what would be the goal or what was the motivation of doing this if youre going to do it also the second question.

In relation to that.

For the cars assembled in the United States conventionally you are procuring parts from across North America.

Now these parts.

Oh, maybe replaced by U S. Domestic MAGE parts are you considering such a history or have you already started such initiatives.

Yes. Thank you first question.

Kenta Kon: Yes, thank you. First question.

That's the economic rationale what's the meaning.

Of our rationale behind the engaging in a reverse imports.

Kenta Kon: I would like to address the first question about the economic rationale. What's the meaning of, or rationale behind engaging in reverse imports? As you say, when you look at the economic situation currently, it may not be such an economical, economically rational initiative, but it may deliver to Japanese customers a products that are not easily available in Japan. Of course, as a model segments, et cetera, and how to price these models, what sort of a supply structure we will take, there are many challenges. We will consider all these challenges to consider what sort of business we can make out of that offering. We are currently making preparations now. That's it for the first question.

I'll just say when you look at the economic situation currently.

Is it may not be such on the economical.

Economically rational initiative, but I'd say, the liver to Japanese customers eight products that are not easily available in Japan and of course, the model segments et cetera, and how to price. These models a lot sooner.

All of our supply structure, we will take our there are many challenges.

So we will consider all of these challenges to consider what sort of business or we can make that offering. So we are currently making preparations now.

So that's it for the first question.

Thank you regarding the second question about the local production in the United States.

Riri A: Thank you. Regarding the second question about the local production in the United States. Of course, this is not just limited to the United States, but in all regions of the world, we want to produce locally and procure locally so that we can manufacture cars on that basis in each region. For example, this year in North Carolina, we have built a battery plant, which was a major decision. This led to increasing the local procurement rate in North America. Our plan to produce locally as much as possible remains unchanged. We would like to move or make efforts toward that end going forward. How about Mexico? How about replacing with Mexican parts? Are you considering such a possibility? Well, currently, we have no concrete plans to do that yet.

Masayoshi Ohira: Thank you. Regarding the second question about the local production in the United States. Of course, this is not just limited to the United States, but in all regions of the world, we want to produce locally and procure locally so that we can manufacture cars on that basis in each region. For example, this year in North Carolina, we have built a battery plant, which was a major decision. This led to increasing the local procurement rate in North America. Our plan to produce locally as much as possible remains unchanged. We would like to move or make efforts toward that end going forward. How about Mexico? How about replacing with Mexican parts? Are you considering such a possibility?

And of course this is not just limited to the United States, but in all regions of the World Oh, we want to produce locally and procure locally so that we can manufacture cars.

That basis in each region.

For example, this year in North Carolina, we have built a battery plant.

Asia decision.

And this led to increasing the local procurement rate in North America. So.

Our plan to produce locally as much as possible remains unchanged. So we would like to move or make a push towards that and going forward.

How about Mexico.

How 'bout, replacing with the Mexican parts are you considering such a possibility well currently.

Oh, we have no concrete plans to do that yet but.

Kenta Kon: Well, currently, we have no concrete plans to do that yet.

Well when we consider the suppliers who have already made forays into the local market and the manufacturing. They do there are no of course, they are hiring employees and their house to of course created a livelihood of their families as well and therefore I think we will have to take all that into consideration when we may.

Riri A: Well, when we consider the suppliers who have already made forays into the local market and the manufacturing they do there, and of course, they are hiring employees, and they have to, of course, create the livelihood of their families as well. Therefore, I think we'll have to take all that into consideration when we make such decisions.

Kenta Kon: Well, when we consider the suppliers who have already made forays into the local market and the manufacturing they do there, and of course, they are hiring employees, and they have to, of course, create the livelihood of their families as well. Therefore, I think we'll have to take all that into consideration when we make such decisions.

Such decisions.

Hello, Scott.

Yeah.

Thank you very much we're here for your questions.

[Company Representative] (Toyota Motor Corp): Thank you very much, Ohira-san for your questions. The two people who have raised their hands will be the last two to ask questions. Let's begin with you.

Okay.

Yeah.

Yes.

The two people who have raised their hands will be the last.

Two to ask questions.

Sticking with you.

Thank you.

I am for Greif.

He comes it always happens daily I have two quick two questions.

Riri A: Thank you. I am Fukui from Nikkan Jidosha Shimbun. I have 2 questions. Your sales remains brisk because of your product competitiveness. Even ever better cars that you have advocated for the past 10 years certainly delivered the results. Now, at the mobility show, you announced a new brand strategy, which sounds a bit futuristic. In 2024, you experienced the certification irregularities, and at the time, you revisited your product plans altogether, and you launched various projects to do so, revisited them, and some projects I understand have been either delayed or canceled. What sort of impact do you see now out of that? Because development takes 2 to 3 years. Your healthy product portfolio towards the latter half of 2020s, do you think you will be able to maintain momentum and that would impact your profitability?

[Research Analyst and Automotive Industry Journalist] (Nikkan Jidosha Shimbun): Thank you. I am Fukui from Nikkan Jidosha Shimbun. I have 2 questions. Your sales remains brisk because of your product competitiveness. Even ever better cars that you have advocated for the past 10 years certainly delivered the results. Now, at the mobility show, you announced a new brand strategy, which sounds a bit futuristic. In 2024, you experienced the certification irregularities, and at the time, you revisited your product plans altogether, and you launched various projects to do so, revisited them, and some projects I understand have been either delayed or canceled. What sort of impact do you see now out of that? Because development takes 2 to 3 years. Your healthy product portfolio towards the latter half of 2020s, do you think you will be able to maintain momentum and that would impact your profitability?

Oh.

Yeah.

So your sales remains brisk because of your product competitiveness.

Yeah.

Even the ever better cars. So that we have advocated for the past 10 years suddenly delivered the results.

No the mobility show, you announced a new brand strategy.

Which sounds a bit futuristic.

In 2024, you experienced the certification irregularity.

And at the time, you revisit at our product lines altogether.

And you launched various projects due so we visited them and some projects I understand I'm being either delayed or canceled.

What sort of impact do you see now out of that because development takes two to three years.

Do you have a healthy product portfolio towards the latter half of 2000 Twenty's do you think you'll be able to maintain momentum and that would impact your profitability. So I like to learn your midterm view it really shouldn't relation with that your investment in the United States has been.

Mentioned this year for the Air you increased the number to about 100 by 130 units, but then your production.

Riri A: I would like to learn your midterm view. In relation with that, your investment in the United States has been mentioned. This year for the year, you increased the number by 130 units, your production plan remains at around 10 million. In the United States, you have a very low inventory level because your cars are selling so well. How do you plan on your capacity increase in terms of production? Because just increasing the capacity would only increase your fixed cost. How do you plan to go over 10 million vehicles? Do you plan to enhance your alliance within the group and to be more efficient in procurement of components? What's your plan going forward? Thank you very much for your questions.

[Research Analyst and Automotive Industry Journalist] (Nikkan Jidosha Shimbun): I would like to learn your midterm view. In relation with that, your investment in the United States has been mentioned. This year for the year, you increased the number by 130 units, your production plan remains at around 10 million. In the United States, you have a very low inventory level because your cars are selling so well. How do you plan on your capacity increase in terms of production? Because just increasing the capacity would only increase your fixed cost. How do you plan to go over 10 million vehicles? Do you plan to enhance your alliance within the group and to be more efficient in procurement of components? What's your plan going forward?

Sun remains at around 10 million.

And in the United States, you have very low inventory level because your cars are selling so well. So how do you plan on your capacity increase in terms of production because just increasing their capacity will only increase your fixed cost. So how do you plan to go over 10 million vehicles.

Dupont to enhance your alliance within the group and to be more efficient in procurement of component is so what's your plan going forward.

Yes.

Yeah.

Thank you very much for your questions.

About the product competitiveness for us.

Kenta Kon: Thank you very much for your questions.

The midterm future.

It seems that it may have a question about.

Riri A: About the product competitiveness for the midterm future, it seems that you may have a question about that. Well, 22 years ago, we did experience the certification irregularities, and we put on lots of efforts in reinforcing our foundation. Well, sometimes we had to halt our production lines. Two years ago, one year ago, we experienced that quite frequently. That is not about the product competitiveness, but it was about the production. Certainly, those hiccups we experienced in the past, but they have decreased. They have been decreasing very rapidly. It is true, increasing the fixed cost rapidly will have a future impact. Therefore, we really have to be careful when we plan for that.

Kenta Kon: About the product competitiveness for the midterm future, it seems that you may have a question about that. Well, 22 years ago, we did experience the certification irregularities, and we put on lots of efforts in reinforcing our foundation. Well, sometimes we had to halt our production lines. Two years ago, one year ago, we experienced that quite frequently. That is not about the product competitiveness, but it was about the production. Certainly, those hiccups we experienced in the past, but they have decreased. They have been decreasing very rapidly. It is true, increasing the fixed cost rapidly will have a future impact. Therefore, we really have to be careful when we plan for that.

That as well.

Tier.

Two years ago, we did experienced certification irregularities and we put out in lots of efforts of reinforcing our foundation.

Well, sometimes we had to halt our production lines.

So two years ago, one year ago, we experienced not quite frequently.

That is not about the product competitiveness, but it was about the production but suddenly.

Those.

Hiccups, we experienced in the past.

But they have to decrease they have been decreasing very rapidly.

It is to increasing the fixed cost rapidly will have a future impact. Therefore, we really have to be careful when you plan for that for example.

Maybe an impact to one second no two seconds on the production line, but.

We have to make city.

Riri A: For example, it may be an impact of 1 second or 2 seconds on the production line, but we have to make steady efforts in order to enhance our productivity step by step. We are not talking about thousands of or hundreds of thousands of vehicles or 1 million vehicles to increase in our production. When it comes to the product competitiveness in the midterm, we will make sure that we will maintain that going forward. That's all from myself. Anything would you like to add?

Kenta Kon: For example, it may be an impact of 1 second or 2 seconds on the production line, but we have to make steady efforts in order to enhance our productivity step by step. We are not talking about thousands of or hundreds of thousands of vehicles or 1 million vehicles to increase in our production. When it comes to the product competitiveness in the midterm, we will make sure that we will maintain that going forward. That's all from myself. Anything would you like to add?

Airports in order to enhance our productivity step by step.

We are not talking about.

Thousands of or hundreds of thousands of vehicles of million vehicles to an increase in our production.

Sure.

Right.

So when it comes to the product competitiveness in the midterm.

We will.

Make sure that we will maintain that going forward.

That's all from myself.

Anything would you like to add.

Thank you.

Yeah.

No.

Final question the person in the very front row.

Kenta Kon: Thank you. Final question, the person in the very front row. Yao from Nihon Keizai Shimbun. I have also two questions as well. First question. Your management is based on product and region. One of your axes is of course the region, and you want to be the best in town. Compared to other manufacturers, you have a revenue structure that's not biased in particular countries or regions. What sort of impact do you feel from the tariffs on this regional based sales operation? Another is related to this, you about the maintaining the production capacity of 3 million units a year domestically in Japan.

[Research Analyst and Automotive Industry Journalist] (Nikkan Jidosha Shimbun): Thank you.

[Company Representative] (Toyota Motor Corp): Final question, the person in the very front row.

Yeah.

Sure.

You all from a new home or Kiss a newspaper.

[Company Representative] (Toyota Motor Corp): Yao from Nihon Keizai Shimbun. I have also two questions as well. First question. Your management is based on product and region. One of your axes is of course the region, and you want to be the best in town. Compared to other manufacturers, you have a revenue structure that's not biased in particular countries or regions. What sort of impact do you feel from the tariffs on this regional based sales operation? Another is related to this, you about the maintaining the production capacity of 3 million units a year domestically in Japan.

I have also two questions as well.

Question.

Yeah.

You're monitoring meant is based on product and region.

[Company Representative] (Toyota Motor Corporation): 本日はお忙しい中。

Eda: Ladies and gentlemen, thank you very much for joining us today, taking time out of your presumably busy schedule. Now, we would like to begin TMC's FY2026 Q2 financial results briefing. I am Eda from corporate communications, pleased to be your emcee today. Now, I would like to invite our Chief Financial Officer, Kenta Kon, for his presentation. Kenta, over to you.

So one of your Axis is of course, the reason and you want to be the best in town, so compared to other manufacturers.

Okay.

So.

You have a revenue structure, that's not Oh two.

Biased in particular countries or regions are so what sort of impact.

Do you feel are from the tariffs on this.

Reasonable based sales operation and another is related to this are you about the maintaining the production capacity of 3 million units a year domestically in Japan in the previous financial results, yet also announced about the new construction into that.

Kenta Kon: 皆さん、こんにちは。

Eda: Good afternoon, ladies and gentlemen. Thank you for the introduction. I am Kenta Kon. Before I begin, I would like to start by sincerely thanking our customers around the world who love Toyota cars, our shareholders who support our efforts, our dealers, suppliers, and other stakeholders.

City of a factory, but due to increased tariffs are indeed by the United States are your export took costs will increase and I believe that you announced that you are just destinations to adjust for that and so how do you intend to work towards maintaining over 3 million units production.

Kenta Kon: In the previous financial results, you had also announced about the new construction in Toyota City of a factory, but due to increased tariffs by the United States, your export costs will increase. I believe that you announced that you will adjust destinations to adjust for that. How do you intend to work toward maintaining the 3 million units production capacity in the domestic market in Japan? I'd like to address the first question. Well, we have managed our company based on product and also region, and we are also managing the company based on that. About 10 years ago, we were skewed on North America. More than half of our sales was from the United States and the remainder from the rest of the world.

Kenta Kon: それでは、決算の束にから。

Eda: Here is a summary of Q2 results.

Kenta Kon: そう、第二。

Eda: Our operating income for the first half of this fiscal year was JPY 2 trillion. Despite the impact of US tariffs, strong demand supported by the competitiveness of products has led to increased sales volumes, mainly in Japan and North America, and has expanded value chain profits. The full-year operating income forecast is JPY 3.4 trillion. Despite the impact of US tariffs, we have continued to build upon our improvement efforts, such as increasing sales volume, improving costs, and expanding value chain profits. We are steadily translating comprehensive future investments into improved productivity and increased returns, with a strong focus on improving the break-even volume. As for shareholder returns, to reward our long-term shareholders, the interim dividend is raised to JPY 45 per share, and the full-year dividend forecast is JPY 95 per share. As announced at the Japan Mobility Show 2025.

Capacity in the domestic market in the family.

So I'd like to address the first question.

Well.

We have managed our company based on product and also reason and Oh, we Oh Somebody's Gonna company based on that and.

Kenta Kon: Well, we have managed our company based on product and also region, and we are also managing the company based on that. About 10 years ago, we were skewed on North America. More than half of our sales was from the United States and the remainder from the rest of the world.

About.

10 years ago, well lever.

Hughes on North America more than half of ourselves. So that's one of the United States and the remainder from the rest of the world.

But.

No.

We had been imposed such tariffs with the same sort of situation and the impact it would have been much larger.

Kenta Kon: If we had been imposed such tariffs with the same sort of situation, then the impact would have been much larger. We have to think first about the customers in each region to engage in our business operations. That's done by the regions, the same for revenue, Lexus customers, GR customers, and the many car companies. Each are attended to by each of these divisions or regions. The regions are working hard, not against each other, but in a balanced manner. That's why we have a very good revenue structure. For example, in Africa, in the past, Africa was part of the other, the rest of the world. Also, Latin America was the same.

So.

Oh, we have to think first about the customers in each region.

To engaging our business operations and that's done by the regions at the same four revenue Lexus customers.

Eda: We will clearly define the five brands of the Toyota Group with clear directions. A diverse range of products meets the needs of each individual customer, and thereby expands choices for our customers. I will now delve into our financial results for the period ended September 2025. Consolidated vehicle sales for the first half reached 4,783,000 units, or 105% of the same period last year. Toyota and Lexus vehicle sales totaled 5,267,000 units, or 104.7% compared to the previous fiscal year. Thanks to strong demand from customers around the world, vehicle sales increased mainly in Japan and North America. The ratio of electrified vehicles rose to 46.9%, driven mainly by strong HEV sales in regions such as North America and China. Consolidated financial results: sales revenues of JPY 24,630.7 billion, operating income JPY 2,505.6 billion, income before income taxes JPY 2,478.1 billion, and net income of JPY 1,773.4 billion.

Gee, our customers and the many car companies are each are attended to by each of these divisions.

Regions, so the regions all walking hard not.

Nothing against each other but in a balanced manner and that's why we have a very good revenue structure for example in Africa.

The past Africa as part of the other the rest of the world.

Also Latin America was the same.

But these regions.

Yeah.

I have been with third or transferred to toward that social and with Stifel.

Kenta Kon: These regions have been referred or transferred to Toyota Tsusho, and with CFAO, I think, that business is run by people who think first about Africa. They support very high revenues in Africa. In the earnings report, Japan, Asia, Europe, Africa, and the other regions are actually leading the revenue for us. Within Asia, India, and also in Europe, there were some very difficult regions where Toyota were using these markets to polish our products, but now these regions are seeing an increase in revenue. We're very well balanced in terms of regions. All of Toyota's is making a global effort to accommodate the US tariffs.

I think it's being run by that that business is run by people, who think first about Africa. So they support very high revenues in Africa and in the earnings support of Japan Asia Europe.

And the other regions and the other regions are actually leading the revenue for us and within Asia, India.

And also in Europe, there were some very difficult regions.

Oh well.

Toyota or using these markets to Polish are put up but no. These regions are seeing an increase in revenue so very well balanced in terms of regions and so.

Eda: The factors that impacted operating income year-on-year are shown on the slide. Now, the geographical operating income. In Japan, operating income decreased mainly due to the impact of exchange rate fluctuations and increased expenses. In North America, it decreased because of the impact of the US tariffs. Other regions saw an increase, mainly due to higher sales volume, improved model mix, and other factors. Our China business saw an increase in operating income and share of profit of investments accounted for using the equity method. Operating income in the financial services segment increased largely due to an increase in loan balances. Now, we will move on to the shareholder returns. We will raise the interim dividend by JPY 5 compared to the previous fiscal year to JPY 45 per share. The forecasted full-year dividend will also be increased by JPY 5, reaching JPY 95 per share.

All of that is making a global effort to accommodate the U S tariffs and so we would like to ask each of the regions to actually focus on their respective regions and the businesses there.

Kenta Kon: We would like to ask each of the regions to actually focus on their respective regions and the businesses there. Regarding the 3 million production capacity and our strategy vis-à-vis local production. Well, 3 million units domestically is a very, very important goal for Toyota. We have the field gemba right next to the production facilities, which enables us to turn that cycle very rapidly, and that would help Monozukuri or manufacturing prowess in Toyota. That becomes a source of our global competitiveness, I believe. Of course, to safeguard Monozukuri or manufacturing in Japan, we need to maintain or retain a significant amount of domestic production, because if that declines and then the supply chain will also weaken, that could lead to or impact jobs and others.

Regarding the 3 million, our production capacity and our our strategy of use of the local production.

Well the 3 million units domestically, it's a very very important goal for us until you're done.

We have the the field to get again, but right next to the production facilities.

This feature enables us to turn that cycle very rapidly.

And that would help them, one or liquidity or manufacturing prowess think Toyota.

And so that becomes a source over our global competitiveness I believe.

Of course to safeguard and when does it go to your manufacturing in Japan, we need to maintain or retain a significant amount of domestic production.

Eda: We will continue to increase dividends in a stable and continuous manner to reward our long-term shareholders. As for share repurchases, in June of this year, we passed a resolution to establish a repurchase program of approximately JPY 3.2 trillion as part of taking Toyota Industries Corporation private. Therefore, no new share repurchase program will be established at this time. We will continue to conduct flexible repurchases of shares, considering factors such as common stock prices. Next, I'll explain the forecast for the fiscal year ending 26 March 2025. Consolidated vehicle sales remain unchanged from the previous forecast. Toyota Lexus vehicle sales have been revised upward by 100,000 units to 10.5 million units. Through the strong competitiveness of our products, we will capture even more robust demand, particularly in North America. Next, let me explain the full-year consolidated forecast.

Because if that declines and then the supply chain will also weakened that could lead to or impact of jobs and the others.

So we have to earn foreign currency and purchase our resources.

To run the domestic business I think that.

Kenta Kon: We have to earn foreign currency and purchase resources to run the domestic business. I think that's how we survive. Domestic production in Japan must be safeguarded and protected. On the other hand, local production is important, too, in many ways. I think to manufacture where the customers are, to sell where there is a market for the product or to produce where there's a market for the product. Also we must develop components and parts or vehicles that match those needs. That's best produced locally. So in Japan and non-Japan areas, perhaps we can allocate the production of different models. That sort of adjustment is done. No, we don't intend to transfer something drastically from Japan to the United States or overseas to Japan. We're not discussing such drastic measures.

How we survive and so our domestic production in Japan must be safeguarded and protected.

On the other hand local production.

It is important to.

In many ways.

And I think got to manufacture where the customers are to sell Oh, where there's a market for the product to produce but theres a market for the product and are also we must develop components and parts or vehicles that match those needs.

Eda: We have adopted the full-year forex rate assumptions of JPY 146 per dollar and JPY 169 per euro. Our forecasts for the full-year consolidated performance are sales revenues of JPY 49 trillion, operating income of JPY 3.4 trillion, income before income taxes of JPY 4.18 trillion, and net income of JPY 2.93 trillion. The factors impacting operating income year-on-year are, as stated on the slide, despite the impact of US tariffs amounting to JPY 1.45 trillion, improvement efforts such as increasing volume, model mix, cost reductions, and expanding value chain profits are expected to result in a positive impact of JPY 0.9 trillion. To maintain and strengthen our earnings power, we will work with all stakeholders, including suppliers and dealers, to leverage results of the strengthening of our operational foundations to further improve productivity.

And then.

That's best produce locally.

So in Japan, and non defined areas, perhaps we can allocate the production of different models that sort of adjustment is done.

But.

We don't intend to transfer something drastically from Japan to the United States overseas to Japan or not.

Discussing such drastic measures the little continue as we have in the past.

Thank you.

No.

Okay.

Kenta Kon: We will continue as we have in the past. Thank you.

Kenta Kon: We will continue as we have in the past.

Thank you very much ladies and gentlemen, it is.

[Company Representative] (Toyota Motor Corp): Thank you.

Time to close the session.

[Company Representative] (Toyota Motor Corp): Thank you very much, ladies and gentlemen. It is now time to close the session. Thank you very much for being with us today. Please excuse the presenters. With this, we would like to conclude TMC's FY2026 Q2 financial results briefing. Thank you very much.

Thank you very much for being with us today.

Yeah.

And please excuse the presenters.

Yeah.

With this we'd like to conclude T. M sees FY 'twenty six Q2 financial results briefing. Thank you very much.

Eda: I believe everyone here has seen the models we unveiled at the Japan Mobility Show. These cars speak more for themselves than I ever could. Each and every product is something that could not be created overnight. Toyota is a company managed through its products, which are the results of long-term efforts built up by many people. Our products were created by our development teams, production teams, suppliers, dealers, and, of course, our customers and the market. The first-half financial results reflect these efforts, and our cars have generated solid profits. Now, in addition to Toyota, Lexus, Daihatsu, and GR, we are able to introduce the new Century brand. By having each brand take on clearer roles within the Toyota Group to form complementary relationships, we can expand customers' choices even further with a diverse range of products that meet the needs of each individual.

Yeah.

Eda: We hope you will continue to have even higher expectations for the Toyota Group moving forward. A diverse range of products supported by such strong brands has led to 150 million units owned by our customers worldwide, and the value chain business has expanded to the order of JPY 2 trillion in operating income. This is the result of efforts by teams on the front lines in service, sales finance, used car sales, insurance, and others to maximize the value of each vehicle supported by product strength, such as ease of repair and strong supply of parts, as well as high residual values. The new RAV4 is the first to adopt Arene, a platform designed to efficiently develop software. RAV4 is our best-selling global model with an annual sales of 1 million units. We deliberately chose to lead with this challenging model.

Eda: By utilizing the vast amount of data collected from roads and vehicles around the world, we will develop and refine SDVs together with our customers. By adding our SDV strategy to the virtual cycle of new cars and value chain businesses, we will further strengthen our profit foundation. Over the past two years, we have grappled with certification issues and lack of capacity head-on, carrying out activities to reinforce our operational foundation. As a result, we are thoroughly focused on safety and quality while securing additional capacity, leading to stable production. On the other hand, investments in human resources and future-oriented investments have expanded, and combined with the impact of US tariffs, our break-even volume has risen significantly. To bring our break-even volume back onto a downward trend, we are launching company-wide initiatives.

Eda: We will review the allocation of people, materials, and capital, and turn the results of the reinforcement of our operational foundations into earning power. We will pursue waste-free, value-added work and improve productivity, and also continue to focus on improving the break-even volume. This concludes my explanation of our financial results. Thank you.

[Company Representative] (Toyota Motor Corporation): Thank you very much, Kou. Now, we would like to open the floor for questions. Let us prepare the stage.

Eda: これより質疑応答。 Thank you for your patience. Now, let us start the questions and answers session. Your questions will be addressed by our Chief Financial Officer, Kenta Kon, as well as our COO, Takano Azuma from the accounting group. Please allow them to be seated as they respond to your questions. Now, I would like to open the floor for questions. If you have any questions, please raise your hand, indicate, and wait for a microphone to be brought to you. Please limit your questions to two so that as many people as possible can ask questions. In the second row, in the middle section, please. Thank you. I am Kawaguchi from Nikkan Kogyo Shimbun. Two questions. Number one. First of all, for the past several years, you are focusing on earning power. There must have been various external factors, but how have you raised your.

Eda: Earning power with those efforts, and how has that been reflected in these Q2 results? Now, 15% in September is something that we heard about the US tariffs as determined, and further throughout the year. How do you plan to minimize the impact? I am sure you're working in various fronts, but probably you can tell us your directions. Thank you. Thank you very much for your questions. Well, earning power. The first question was how our efforts have delivered, and that certainly is a question about our financial results themselves. As I mentioned in my presentation, JPY 2 trillion and JPY 3.4 trillion in operating income is what we have announced. We do have external factors, of course, but we do have global customers with very strong demand for our products, and we feel that day in, day out. Because of.

Eda: The high quality and the power of our products, which has been the result of our accumulated efforts. Regionally, North America, as you know, because of the impact of the tariffs, the situation is not rosy, although I cannot share with you other than North America. For example, China, Europe, Asian markets, and Africa. These markets, although the situation is not easy, but in terms of both revenues and sales volumes, we have seen some healthy situations. Brazil experienced some typhoons and hurricanes, but yesterday, we announced the restarting of the production. Actually, that has been brought forward by tremendous efforts made on the front line of our business, and that certainly is a part, a very important part of our earning power. In terms of our value chain, JPY 2 trillion annually is the revenues that we can expect.

Eda: For 150 million cars being owned, of course, is the basis of the value chain revenues. Once again, that represents the power of our products. Residual value of used cars, for example, is maintained very high. Also, Toyota vehicles are often said as being very easy to repair because that concept is already built in in the design of the cars. The repair personnel is involved in design so that easy to repair is an important part of our product, although it is not visible from outside. All of those components put together have been integrated into our earning power, thus the Q2 results. As for the second question of yours about the impact of the US tariffs, how we responded successfully. I think I showed you some slide about that. Did I? Well, JPY 1.45 trillion is the impact from the US tariffs.

Eda: At the beginning of the year, our President Sato-san talked about this. We really should not panic and try and respond hastily by raising prices of the cars. That's not our way. For each vehicle, each model, each region, we will scrutinize the competitive landscape and the market. We carefully determine the price point. As you can see on this slide, the efforts were not solely made to respond to the tariffs, but as you can see on the right-hand side, our improvement efforts amounted to JPY 90 million. Excuse me, JPY 900 billion. JPY 900 billion. That includes strong sales reflecting strong capacity of the product, as well as the value chain revenues. Do you have anything to add? Probably not. Thank you for your question. Thank you very much. Next question. Next to that previous questioner. Ms.

Eda: Nou from Yomiuri Newspaper, thank you for your presentation. My question is to Kou-san. Chinese semiconductors at the next period, the issue of next period. What sort of countermeasures are you taking against that shortfall? Has it impacted you, and what sort of measures do you intend to take going forward, please? Ms. Nou-san, if you could ask two questions at once. Are you satisfied with just one? Just one is fine. Okay. Thank you. Well, recently, we have not seen any impact so far, but we do know that there's a risk. Therefore, we're trying to scope the impact and the areas where the impact would be felt, and we're currently monitoring the situation very closely. Of course, this is not only for Toyota, but I think for the entire supply chain, and we're looking for alternatives and what other options we have available.

Eda: We are researching such alternatives and also monitoring very closely the impact and situation. Thank you. Yeah, the person with the white jacket in front. Thank you. I'm Nagai from TV Tokyo. I have two questions for Kou-san. Number one, about the US market forecast. For the entire year, you have made some changes. No, no, you have not made any changes, but according to researchers, after October, because of the tariffs, car prices could rise in the general US market. How do you view the North American market going forward? The second question is about what you mentioned in the second part of your presentation, earning power. In order to regain the downward trend, the all-out efforts will be made. What sort of efforts will you be making in terms of break-even volumes, for example? What level would you like to bring it back?

Eda: By what time frame? Thank you. Thank you very much for your questions. As for the North American markets going forward, as you mentioned, and very rightly so, the volumes that we expect have not been changed from the previous announcements. As we hear from the US, we see lots of very strong demand for our products. You may know this. The sales incentives tend to be very low, reflecting the strong value of our products. Still, our inventory level tends to be rather low. Of course, on the front line, they're doing their very best in producing the number of cars needed. In terms of sales, therefore, we expect very healthy situations going forward. Now, about the break-even volumes in our earning power, I said that we will be making all our efforts involving different and various activities and initiatives. There are so many.

Eda: I don't know which one should take the highest priority, but enhancing the value-add work, eliminating wasteful tasks, for example, wasteful time of meetings with lots of people involved without much contributions. Of course, we'll be very careful in determining price point. Increased sales certainly reduces break-even volumes, our value chain revenues as well. We do not have the clear goals in terms of quantities, but we have seen this trend of increasing break-even volumes, and we would like to see it decline. Thank you. Second or third row from the back, yes. Nichikaoka from Nikkei Acrostech. I have two questions as well. First question about hybrid. Hybrid is growing quite rapidly. Going forward, do you have any expectations about the future growth of hybrid going forward?

Eda: As for EV, in 2030, 3.5 million units, I think, is your base volume, and you don't intend to change that base volume? That's the first question. The second question is about the price pass-through of tariff costs. Tariffs, basically speaking, or, in essence, should be borne by the US side. That is my recognition. If so, well, you mentioned that there's a strong demand for Toyota, which means that perhaps 15% of the entire tariff could be passed through to prices, and then for Toyota and for your cooperating companies, that would lead to increased profit and would be beneficial for both. Would you say this is not as simple as that? Could you tell me your thinking on this point, on this issue? Yes. May I? Regarding hybrid.

Eda: Vehicles, it is growing very rapidly, and would that continue going forward, I guess, is the gist of your question. Well, we believe that the growth will continue. We can't say. From what I hear from my observations of the market, the request for increased production toward hybrids and the demand from customers for hybrids is very strong. We would like to accommodate such requests through production, through increased production, and accommodate the customer's requests, thereby increasing our volume for hybrids, I believe. For BEV, we're looking at the actual demand, and it seems that compared to our initial estimations, things are actually declining. That is, there's a shortfall against our expectations, and therefore, we have to look at the customer and market situation to, at an appropriate timing, deliver good products that meet their needs.

Eda: The next one was about the price pass-through of tariff costs. Well, if you say that because you have such competitive products, if you increase your prices by 15%, it will be beneficial for all, you said. For many years, in the case of Toyota, we have many cars that have really been loved and used by our customers, for example, Corolla, Hilux, Surf, 4Runner in the United States, or Land Cruiser. We have many, many different models, and many customers are loyal to these brands, and they continue to use them many, many years. Many of our customers are fans of our cars, which means that for us to price these vehicles out of the expectations of customers is very difficult for us to do. We want to enhance the value of these cars.

Eda: In order to charge the customers an appropriate price that meets that value. Because if you outprice the customer's expectations, you can really lose their loyalty. Our method would be to take it step by step. As for hybrids, in 2025, I think somebody said it will reach 5 million units. Perhaps it was a goal that somebody mentioned. I'm sorry, I'm not quite sure about this, but 5 million in 2020-something. Do you have a goal like that, a numerical target? You mean hybrids? Yes, hybrids. Really? Well, at least I don't have any numbers firsthand on when we'll reach 5 million, but the hybrid ratio amongst our— Sorry. 4.46 million units this year. That's about 200,000 units up from last year. This pace of growth, I think we should maintain this pace of growth going forward. Yes, thank you. Thank you very much for your questions.

Eda: Now, this person in the second row in this section, please. Thank you very much. I am Nakano from Nishi Nippon Daily. I have two questions. The first question is about Kanda in Fukuoka Prefecture, the battery plan for EVs. In April, you were to sign the MOU with the prefecture, but now it has been prolonged and postponed to autumn. What is the progress? Also, the 2028 start of operation that has been planned, as well as the production capacity, have there been any changes to your original plans? The next question is about taxes. Under Prime Minister Takai Ichi, the tax treatment minister has been appointed, and some special measures could be taken in terms of taxes. What is the view on that situation? Also, were there outlook for any preferential tax treatment? Do you have any outlook for that?

Eda: Thank you very much for your questions. As for the first question, Fukuoka Kanda battery factory, ongoing study continues. I heard that is. We are talking with Fukuoka government and stakeholders in Fukuoka Prefecture currently. As for the taxation, we have seen the changes in the administration in this country. Now, there are various taxes involved in automotives, and revising and changing of those taxes have been something that JAMA and other organizations have been advocating toward the government. Well, when it comes to taxes, we have to consider how we may be able to maintain monozukuri and production in this country in a healthy way. It's very important for the entire industry, not only for the automotives. I hope any form of taxes will be able to enhance domestic demand for the industrial products. Therefore, it is my belief that JAMA will continue to advocate for that.

Eda: Thank you very much. Thank you. The person in white at the very back of the room. From Kyoto, my name is Tokumitsu. Thank you for your presentation. I also have two questions. First question. The Japan Mobility Show is now on. I saw the exhibit there. The Century branding has come to a milestone, I think. I think that some of these pilot cars are also viewed toward mass production. Do they represent the future production plans of Toyota? The second question is about the impact of tariffs. You said it was JPY 1.4 trillion, but now that's been increased to JPY 1.45 trillion, so a slight increase. In August, you had calculated on a reduction in auto tariffs, but you did make that modification after the imposition of the actual tariffs in September. Is that the reason for this slight increase?

Eda: Is the question. Yes, thank you. Regarding the Japan Mobility Show, thank you very much for coming to our booth at the Japan Mobility Show. As you said, well, I don't know if we intend to mass produce all of them, but of course, several of these models will be marketed in the future. At least I believe they will be, and I think this attests to the strength of our product competitiveness. That's it in a nutshell. Especially the Century brand was launched. We were able to launch a totally new brand, called Century, which I thought was a very big step forward. Because currently, new car names, new models are very hard to come by. To start from starting a totally new brand, I think, was a major initiative in the company. It's also a big message from us.

Eda: You may have heard the presentation to launch Century. Our chairman, Akio Toyoda, said this is the pride of Japan. He said Century, the car and the brand, is the pride of Japan, he said. From that perspective, it goes beyond just a car model. I mean, I think in Toyota, it represents not just a model, but something beyond that. I do hope that you will take it as such. Thank you. Regarding the second question, may I address that question? In the first quarter, it was JPY 1.4 trillion. Now we've added 5 million. As you said, from mid-September, there was a 15% tariff imposed. That is, the tariff level was decreased. This is based on a recalculation of the impact of tariffs. The tariff impact will hit not only Toyota, but also our suppliers, and about 70% of parts and components.

Eda: Well, the components and parts manufacturers account for 70% of the market. We want to work together with them to overcome this. When I visit the suppliers, each supplier has, for example, embarked on labor saving and also changing their processes, etc., to challenge new initiatives to address the impact. In addition to the product competitiveness, we would like to muster our forces together as a manufacturing industry to overcome the tariff issue. Thank you. ではですね、ちょっとたくさんあげていただいてありがとうございます。 Thank you very much for your interest. The person on the left, please. I am Toyoshima, WBS TV Tokyo. Konsan, I have some questions for you. As a result of the US-Japan tariff agreement, what do you think of it? Well, actually, the end result was as Toyota had expected, 15%. Now you are expecting the JPY 5 million in negative increase.

Eda: Is it because you have taken the very conservative way of revisiting your numbers? Or is the situation really, really difficult? Well, shortly after the announcement of your Q2 results, your stock price went up a little bit, but now it began to decline. Probably the market expected more of the improvement in revenues and profit. How do you view that? Are there any risks of downward revisions going forward or upward revisions, any of you? Thank you very much for your questions. Well, to be honest with you, when we review the situation, striking the agreement itself is something that we are extremely thankful to the government officials for. Without anything being decided, we really cannot plan on production in the automotive industry, which certainly is a very big industry. So uncertainties would not lead us to focus, cannot plan on cost reduction, cannot plan anything. Therefore.

Eda: I really would like to thank all those people who are involved in the negotiations. It is not a small improvement. Certainly, we will have to work on what we can do, both short-term and mid to long-term, in order to make further improvement. Not only North America, but procurement, production, sales, and marketing, all of us have to work together to bring about some positive results. Are you relieved, or do you still see the situation to be rather difficult? Well, I would say both. Well, upward revision or downward revision possibilities. Actually, we are often called being very conservative in our projections, but I do believe we are being pretty neutral about this. Of course, toward the end of the year, we certainly do make efforts so that we can provide you with even the slightest upside. Thank you very much for your questions.

Eda: Now we'd like to entertain questions from participants online. After that, we'll come back to the people in the audience for questions. Those of you with questions online, if you could push the hands-up button on your screen, we will call out your names, then turn on your cameras and your microphone and ask your question, please. Okay. Terasaki-san from Best Car, please. We'll switch screen to you. Please do start speaking when you see your image shown, projected on the screen. Can you hear me? Yes, yes, we hear you. We also see you. Thank you. This is Terasaki from the editorial department of Best Car. Thank you. I have two questions. First question. Well, it's been mentioned several times about the value chain and that it takes up a big portion of your operating profit.

Eda: Looking at the graph from 2020, for five years, you probably increased your operating profit from value chain by double. You're doing many things. I think, of course, the value of used cars is increasing. Five years ago, I believe the residual value of your used cars was still very high. The operating profit doubling, I think, is something, really a tremendous feat. Specifically, what pushed up the operating income so much? You have 150 million cars in a position. That's quite a large number. Five years ago, I think you had similar numbers. What changed to boost the operating profit in the value chain so much over the past five years to the extent that you can disclose? That's the first question. Second question, since this is a good opportunity, you talked about the Japan Mobility Show, but.

Eda: At your booth in the Southern Hall, it was very popular in Century. There was a 40-minute waiting line to view the Century. For the Mobility Show as a whole, I think the Japanese market will be boosted and galvanized. If you could, Konsan, talk about your impressions about the heat of the Mobility Show. Yes, thank you. First question will be addressed by myself, Azuma. The value chain, well, about seven years ago, for the employees and to the outside, the then president talked about leveraging on the ownership and 6,000 stores and oversee 16,000 dealership networks, leveraging that strong dealership network to communicate on a one-to-one basis with our customers. That declaration was made in 2017 or 2016. We started Kinto, and about five years ago, the car ownership was a little more than 100 million.

Eda: Over the past five years, thanks to you, new car sales have been increasing at 10 million a year. Also, our ownership of our cars has increased. Against that backdrop, in Europe, we extended our guarantee period so that we can entice customers to come to our dealers more often. As the years go by, we lose contact with our customers, but we wanted to recapture that contact, sorry, to have them come to our dealers and purchase supplies and accessories. That cycle has now begun to turn, and that's now expanding from Europe to the other regions. That's one major initiative that led to this. In Asia, we offer second parts that are more inexpensive accessories and supplies. Also, financial services are provided. We want to utilize the dealership network to extend our touchpoints with the customers.

Eda: Just the head office telling these regions what to do, you'll not come up with good ideas. Such good practices are now being leveraged across various regions. We're building on these good practices, sharing these good practices, and that's leading, I think, to the very good results we're seeing today. Thank you. About the Japan Mobility Show, thank you very much for your attendance. My impression about the Japan Mobility Show, what's your question? Well, we had such a large turnout, so many customers who were viewing our cars with joy. I was very, very happy to see the delight on their faces. The Japan Mobility Show, Motor Show. I think all across the world, you see regions where the scope or scale of these mobility shows are being reduced, and they're shifting towards the electronics and the electrical components on cars.

Eda: In Japan, we call this a mobility show. It's a show for mobility. To have so many people come and delight in these exhibits and have fun, we were really encouraged and heartened by them. Looking at the smiles on the faces of customers, we were very, very happy ourselves. Thank you. Terasaki-san, thank you very much. Now, let's come back to the on-site journalist in the middle section, the second row from the front. I am Atsumi from Trinity Daily. Thank you. About the United States, I have two questions. President Trump, the other day, talked about $10 billion investment for Toyota to build a new plant in the United States. What is your take on what he has said? Have you made any changes to your investment plan in the United States? That's the first question. The second question, the US government.

Eda: Talked about Toyota expanding its dealers' network to sell other brands' cars. Is it true? If it is, when are you starting that effort? Thank you. Thank you for your questions. For one thing, the $10 billion. I read that in news. Well, the United States really wants to see employment increasing, and customers should be served with next-generation cars and services. Therefore, we do plan sizable investment plan going forward. I cannot really say it's $10 billion, but I would say Toyota will continue to make a sizable investment in the United States. I have to limit myself to that. Now, in terms of Toyota's dealership to sell imported cars, well, Toyota makes cars in the United States. We are considering doing something about the Toyota cars made in the United States. Now, how about other OEMs' vehicles being sold in Toyota's dealers' network?

Eda: Well, it is not for us to decide, but if there are any demand or requests for that end, then we may consider it. Thank you. Yes, the person in front of the microphone with the spectacle. Ohhiro from Asahi Newspaper. It's related to that issue. I have two questions on tariffs. First question. Toyota. You're considering selling US-made cars in Japan, and that was announced when President Trump came to Japan. Considering the riskiness of the US market, and also the US and Japan production capabilities and cost of transportation, it does not seem to be very economically rational. What would be the goal or what would be the motivation of doing this if you're going to do it? Also, second question. In relation to that. For the cars assembled in the United States, conventionally, you are procuring parts from across North America. Now, these parts.

Eda: May be replaced by US domestic-made parts. Are you considering such a shift, or have you already started such initiatives? Yes, thank you. First question. I would like to address the first question about the economic rationale. What's the meaning of or rationale behind engaging in reverse imports? As you say, when you look at the economic situation currently, it may not be such an economically rational initiative. It may deliver to Japanese customers products that are not easily available in Japan. Of course, the model segments, etc., and how to price these models, what sort of a supply structure we will take, there are many challenges. We will consider all these challenges to consider what sort of business we can make out of that offering. We're currently making preparations now. That's it for the first question. Thank you.

Eda: Regarding the second question about the local production in the United States, this is not just limited to the United States, but in all regions of the world. We want to produce locally and procure locally so that we can manufacture cars on that basis in each region. For example, this year in North Carolina, we have built a battery plant, which was a major decision. This led to increasing the local procurement rate in North America. Our plan to produce locally as much as possible remains unchanged. We would like to move or make efforts toward that end going forward. How about Mexico? How about replacing with Mexican parts? Are you considering such a possibility? Well, currently, we have no concrete plans to do that yet.

Eda: When we consider the suppliers who have already made forays into the local market and the manufacturing they do there, they are hiring employees, and they have to, of course, create the livelihood of their families as well. Therefore, I think we'll have to take all that into consideration when we make such decisions. ありがとうございました。 Thank you very much, Ohhiro-san, for your questions. 残りの時間も近づいてまいりましたので、残りお二方、今挙手いただいている方。 The two people who have raised their hands will be the last. Two to ask questions. Let's begin with you. Thank you. I am Fukui from Nikkan Jidōsha Daily. I have two questions. Your sales remain brisk because of your product competitiveness. Even the ever-better cars that you have advocated for the past 10 years certainly delivered the results. Now, at the Mobility Show, you announced a new brand strategy, which sounds a bit futuristic. In 2024.

Eda: You experienced the certification irregularities, and at that time, you revisited your product plans altogether. You launched various projects to do so, revisited them, and some projects, I understand, have been either delayed or canceled. What sort of impact do you see now out of that? Because development takes two to three years. Your healthy product portfolio towards the latter half of 2020, do you think you will be able to maintain momentum? That would impact your profitability. I would like to learn your midterm view. In relation with that, your investment in the United States has been mentioned. This year, for the year, you increased the number by 130 units. Your production plan remains at around 10 million. In the United States, you have a very low inventory level because your cars are selling so well.

Eda: How do you plan on your capacity increase in terms of production? Because just increasing the capacity would only increase your fixed cost. How do you plan to go over 10 million vehicles? Do you plan to enhance your alliance within the group and to be more efficient in procurement of components? What's your plan going forward? Thank you very much for your questions. About the product competitiveness for the midterm future, it seems that you may have a question about that. Well, two years ago, we did experience the certification irregularities, and we put on lots of efforts in reinforcing our foundation. Well, sometimes we had to halt our production lines. Two years ago, one year ago, we experienced that quite frequently. That is not about the product competitiveness, but it was about the production. Certainly, those hiccups we experienced in the past.

Eda: They have been decreasing very rapidly. Increasing the fixed cost rapidly will have a future impact. Therefore, we really have to be careful when we plan for that. For example, it may be an impact of one second or two seconds on the production line, but we have to make steady efforts in order to enhance our productivity step by step. We are not talking about thousands of, or hundreds of thousands of vehicles, or million vehicles to increase in our production. When it comes to the product competitiveness in the midterm, we will make sure that we will maintain that going forward. That's all from myself. Anything would you like to add? Thank you. ではすいません最後のご質問です。 Final question to the person in the very front row. Yellow from Nihon Keizei Newspaper. I have also two questions as well. First question.

Eda: Your management is based on product and region. One of your axes is, of course, the region, and you want to be the best in town. Compared to other manufacturers, you have a revenue structure that's not biased in particular countries or regions. What sort of impact do you feel from the tariffs on this regional-based sales operation? Another is related to this, about maintaining the production capacity of 3 million units a year domestically in Japan. In the previous financial results, you also announced the new construction in Toyota City of a factory. Due to increased tariffs by the United States, your export costs will increase. I believe that you announced that you will adjust destinations just for that. How do you intend to work toward maintaining the 3 million units production capacity in the domestic market in Japan?

Eda: I'd like to address the first question. Well, we have managed our company based on product and also region. We are also managing the company based on that. About 10 years ago, we were skewed on North America. More than half of our sales was from the United States, and the remainder from the rest of the world. If we had been imposed such tariffs with the same sort of situation, then the impact would have been much larger. We have to think first about the customers in each region to engage in our business operations. That's done by the regions, the same for revenue, Lexus customers, GR customers, and the many car companies. Each are attended to by each of these divisions or regions. The regions are working hard, not against each other, but in a balanced manner.

Eda: That's why we have a very good revenue structure. For example, in Africa, in the past, Africa was part of the rest of the world. Also, Latin America was the same. These regions have been referred or transferred to Toyota Tsusho, and with Zephyr, I think it's being run by people who think first about Africa. They support very high revenues in Africa. In the earnings report, Japan, Asia, Europe, Africa, and the other regions, the other regions are actually leading the revenue for us. Within Asia, India, and also in Europe, there were some very difficult regions where Toyota were using these markets to polish our products. Now these regions are seeing an increase in revenue. We're very well balanced in terms of regions.

Eda: All of Toyota is making a global effort to accommodate the US tariffs. We would like to ask each of the regions to actually focus on their respective regions, and the businesses there. Regarding the 3 million production capacity and our strategy vis-à-vis local production, well, 3 million units domestically is a very, very important goal for Toyota. We have the field, gemba, right next to the production facilities, which enables us to turn that cycle very rapidly. That would help monozukuri, or manufacturing prowess, in Toyota, and that becomes a source of our global competitiveness, I believe. Of course, to safeguard monozukuri, or manufacturing in Japan, we need to maintain or retain a significant amount of domestic production, because if that declines, then the supply chain will also weaken, and that could lead to or impact jobs and others.

Eda: We have to earn foreign currency and purchase resources to run the domestic business. I think that's how we survive. Domestic production in Japan must be safeguarded and protected. On the other hand, local production is important too in many ways. I think to manufacture where the customers are, to sell where there is a market for the product, or to produce where there's a market for the product. Also, we must develop components and parts or vehicles that match those needs. That's best produced locally. In Japan and non-Japan areas, perhaps we can allocate the production of different models. That sort of adjustment is done. We don't intend to transfer something drastically from Japan to the United States or overseas to Japan. We're not discussing such drastic measures. We will continue as we have in the past. Thank you.

Eda: それでは予定のお時間となりましたので。 Thank you very much, ladies and gentlemen. It is now time to close the session. Thank you very much for being with us today. Please excuse the presenters. With this, we would like to conclude TMC's FY26 Q2 financial results briefing. Thank you very much.

Q2 2026 Toyota Motor Corp Earnings Call

Request a DemoDemo

Toyota Motor

Earnings