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Toyota Motor (TM)

Participants
Kenta Kon Chief Financial Officer
Jun Nagata Chief Communication Officer
Naotake Katori Yomiuri Newspapers
Kohei Kondo Asahi Newspapers
Sean McLain Wall Street Journal
Maki Shiraki Reuters
Yukinobu Kigawa Toyo Keizai
Call transcript
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Unidentified Company Representative

Thank you, everyone, for joining us despite your busy schedules. We would now like to begin Toyota Motor Corporation's FY 2022 Second Quarter Financial Results Press Briefing. Starting by introducing our presenters today, Chief Financial Officer, Kenta Kon; Chief Communication Officer, Jun Nagata. We would now like to begin by having our CFO, Mr. Kon, explain about the financial results.

Kenta Kon

everyone. Hello, joining for today. us you Thank Kon. I am Kenta and appreciation We our of chose as shareholders, heartfelt us. the would to express us, dealers our as like to well who stakeholders, who support all world our suppliers including around customers inconvenience for to reduction. to our We the the customers production recent sincerely caused apologize volume due

spread semiconductor your of to globally. plants like The to caused would to production working soon and made of the are to fiscal I quarter shortage production We this developing to as us possible. countries efforts cars COVID-XX in But some our a summary reduce our possible. understanding. customers as supply great and volume recover Thank as many second of you suppliers, for as provide year. our dealers

fiscal product the our investing cars making make more and for first reflect reduction and costs the fixed appeal for the of growth. of half while efforts year activities results enhancing by efficient to cost enhanced better Our ever use

have higher these We market results led incentives. yen, the increases due certain believe would the has Even of high made forecast and revision have revised and the material our the be this our upwards, as of downward respects new operating supply in raw a to in quantum tightening to excluding the underlying be it beyond though in costs. car to us of depreciation income demand to car prices robust We substance strength. we allowed decrease have in the benefited our factors used also from impact

learned from to operation our what COVID-XX. improving have we keep will We standardize

is JPY the per to shareholders, previous XX JPY XXX of year. an terms In share, our of to fiscal interim the compared increase ordinary return dividend

our decided also repurchase up billion to XXX JPY of stock. have conduct of common We to a

The the sales X,XXX,XXX was of Let the of XXX.X% the factors year. Lexus year before vehicle revenues of X,XXX.X for the year. previous income X,XXX,XXX of consolidated billion, income fiscal of was which vehicle billion operating first was JPY were results half for which of fiscal impacted ended our X,XXX.X vehicle I operating first income billion. like fiscal ratio JPY Consolidated was units, financial the XX.X%. the electrified X,XXX.X Toyota for half net this such of was JPY financial at of sales to sales the sales Consolidated XXXX. income units, discuss period half for previous results XX,XXX.X for vehicles explain of half year-on-year. and first which September of JPY first sales the and at me income brand would taxes XXX.X% billion,

effects rates exchange of operating XXX JPY income First, foreign billion. by the increased

decreased prices. income impact by Second, cost operating reduction JPY soaring billion to due efforts of material the XX

the income by financial increased to the due efforts Third, X,XXX operating in marketing billion business. services sales increased JPY increase volume and largely in earnings

a in billion. income reduction by JPY Finally, expenses operating increased XX

exchange by other As excluding gains billion of income a increased impact and valuation the losses and X,XXX year-on-year. foreign rates, factors, JPY result, swap overall operating

region. for explain Next, I each will operating income

year-on-year sales increased due in income all operating largely the increase in shown, As volume. regions to

of the business, due China share operating accounted the equity using investments our of consolidated for the profit method of As subsidiaries of and to our for impact exchange income increased rates. foreign

lending mainly losses in due the the to balance Regarding margins. for and income the swap increase fiscal increased gains financial Operating year and services. valuation excluding year-on-year

XX hold sustainably to year, compared payout explain we maintain our to to as shares of shareholders. decided this the improved dividends mid the our of like well pay first fiscal shareholders would the dividend to as Based results to I an Next, long to of We JPY ratio on year. increase intend pay interim per and an the for to XXX to business continue who share, long half return term JPY over term. fiscal to over consolidated stably previous dividend reward mid the our

In current as up in dividend addition, billion period, we will consideration repurchase the interim shares to and such investments factors into growth taking areas own JPY levels. of XXX our for

forecasts Next, breakdown I sales the forecast. XX, the will fiscal in expected presentation. is vehicle explain stated be XX.X% year Regional as the million is for units, which Consolidated XXXX. March ending to X.XX the previous sales of is

units, As which previous brand we anticipate of sales the X.X be that vehicle for sales, Lexus forecast. is and Toyota vehicle will XX.X% million

me explain consolidated financial full the performance. let the year Next, forecasts for

performance euro, per dollar We JPY have and the per full JPY XXX on XXX euro. dollar year ForEx adopted of XXX JPY assumptions per onwards JPY rate makes and October of per which assumptions for Based forecasts XXX X,XXX for and income financial income trillion, consolidated are: JPY full operating our of before revenues XX JPY JPY billion, billion. year of income billion sales net of JPY of taxes X,XXX income X,XXX this,

and to the been in to the previous has XXX forecast the assumptions, to income previous operating I fiscal increase the of compared the income presentation. The forecast, due by operating costs. shown income The income operating into period to Next, decrease revision increase impact FX would the operating revised are the the that due like reflecting the same forecast. impact compared account factors explain operating JPY billion the year-on-year from weaker income previous that in upward taking in year to as raw will factors yen in material of

lessons continue you establish stabilization issues as Although in such the will rise to the attention. for future continue to sharp learned to conditions of material well your costs, Thank towards regard from we crisis. with raw as we work unpredictable supply the and as the COVID-XX face the

Unidentified Company Representative

please. Yomiuri Newspapers, [Operator [Operator Katori from Mr. Instructions] Instructions]

Naotake Katori

have Katori Newspapers. is from X speaking This questions. I Yomiuri

like hear changes, that maybe this the first half do ended a but assessment Especially and some the performance, record would from think I summary. it's to for I there First, your past income, high has been operating history.

to very about well, vehicle factors the recovery sales the very sales, new And contributed. about like performing that contributed factors ask to well the side especially, I'd also that the and for the production for from So plan. to that was I'd hear like large car

to plans But you COVID. is December, think including be as report up impact some weekend I well, there you what from Saturdays, think will that to you've the I November. made hear still, but operating -- we on a your up about are

So what do of recovery kind plan you my That's have? question. second

Jun Nagata

for Thank you, questions. Mr. Katori, your

half And I So recovery That the was understood of after the factors. is about about question second first plan your were was I the first the ended production assessment December. correct? questions. about contributing this question what Am how term your X your of

Naotake Katori

Yes.

Jun Nagata

will our from questions those responded CFO, of both So be Mr. Kon.

Kenta Kon

your for you Thank very much question.

results, assessments, if can comments presentation the the this this And look second in thank is quarter addition make Regarding third page additional on at we summary. material, the like half some the the to to page. first This of – you. I’d

suppliers of That So declined see half the as But plant. you vehicle on our can are, our and be delivery. on operations has having we to the side, to car will But how possible situation, the the the vehicle so fiscal operations or volume supply plants And great that If production avoid suppliers, the in our to see first other made huge they the gemba cars stopping situation as there worldwide, globally. plants, to is as very side in the wait impact a made without much contributed our at our this people largely results. has plant we the strong customers that year. wanted to working and stakeholders. for the top, this efforts hand, globally, stops, dealers, Therefore, fact, the efforts. have a customers

to And for year-on-year, So side did there limitations even still challenges have though because existing the activities, made And the in work also Compared efforts is to this have drop significantly. the sales was efficient to not there they level so been – production, results, made of on. flexibly an many with the also actually, sales are that inventory, dealers, inventories. there increase. their work also drop was worked we able sales

the have but prices value residual car price now the are to And car at the as in has all used high supply, able positively. market. to businesses, on is huge hand, underlying with went the other it to our just have also might been balance the level. situation, contributor opportunities, there low. financial be under communication have the the of that current were car areas sales sales strength. result, This a And we OEMs, the and for this as therefore, partially, good tight new was a – used the keep a is high capture And incentives have And results. working hard some And they by turned the beyond situation, the the So same regarding as but contributed to it’s possible. much incentives, customers the deliver cars been mainly

underlying aspects strength. these be contributed. So This will environmental our kinds have of beyond

However, a large market market also commodity higher – impacting commodity fluctuation, is factor. for the the price prices higher

not the are the cost a We vehicle impact hand efforts these value, were customers. increases reduction, on also can these where enhance efforts negative in fixed the to we to reduction, to market our the cost Therefore, price making made situation recover fluctuation. from

For this made continuing. the company-wide, cost is efforts effort reduction and and has there fixed cost been reduction, huge

have back time this we we don’t feel the times. that – through Going before a returning COVID, of COVID the have point are to at

activities And for drop products taken, group the business, was started and to sales of not see a as lengthy from President being one and – a a giving and cars. foundation And from that the were of And reasons appeal December, – second of believe. after be appeal. feeling but initiation be contributor, kind stronger a product a because positive we had we families set still lengthy having that a our series to result, question product do I the – did those in risks think there. the initiatives better recovery, or I the achieve this your I’m TNGA – production drop appeal also see big I in much will that ever is led large have. the strength statements. product or why So sorry Toyoda’s activity a in the to this enhanced you answer, is contributed about

operate However, million we fact, our operations, December March, if still some production have conservative, we million on operation, Saturday we whatever in But announced to continue full the volume, we have be operate slightly customers risk production this X that the waiting, based as X for will fully. is a since Therefore, to running the see we for in in January, and order can the we able today situation, to it including do production. February, volume. a

be hope answered my will have this I answers. your question. I So

Unidentified Company Representative

We [Operator from Asahi Katori, Kondo next Mr. to Mr. you, please. like for would question. Newspapers, question. Thank your the to move Instructions]

Kohei Kondo

Okay. My name Asahi you hear from Can Newspapers. voice? voice? Can Kondo you my my is hear

Unidentified Company Representative

can. we Yes,

Kohei Kondo

your starting I question upon and operating income. net income results, based have financial the So and a sales with

I COVID-XX. revision do victory, think and and their also I factor, understand And but numbers. price profit. is Nippon reasons society with yen negotiation negotiation. And it a high, every Steel, suffering and the you depreciation profit suppliers' what How And neutrality and based technologies. And words, upward think steel auto from deal upon is relationship to to for Nippon face the the And as the Yes, with [divisions]? those Steel, other other numbers. for the CASE are about historical you the the one industry, at have carbon the And your also whole so-called still see wonderful In around R&D being still, year. revision, costs returning and made negotiation year. the a also also new champion especially is you was especially suppliers, half accept small investments struggling turn those they of a with is the are development number suppliers, challenge your I this? do full on

this to scientific And how And -- -- And measure? litigation? you So going thoughts with proof is especially this? position you your your what going what's this. are your on patent to And you deal this make on on is how what on this? this a and are litigation expected are

Jun Nagata

for your question. Mr. you so Kondo, thank much

take our interim opinion price with is and price and for to number-wise, we myself, Well, your our And the result. based asking to this the a were electromagnetic was And The with negotiation, on first Nagata, question hike will steel, think Nippon performance well, is this. upon Nippon this. relation Kon what first was question on answer our going question about is numbers about on this about is later. financial Mr. regard Steel, further this. this Steel answer what this, numbers was suppliers' the And on good question the on and that is and second our what

Kenta Kon

Yes.

reduce question, would to suppliers, all, first coexist And with to also I competitiveness include would reap to well, like to suppliers like and and we like can we with Regarding would so the of enhance would suppliers, regard with our our answer, We relations together. competitiveness this enhance that cost first to achievements the like we together. fairly the of would customers.

not changed philosophy along. have We this all

receive there's yes, possible Toyota just as comments, production as when also announcements decrease. in -- certainty. involved decrease, volume, received, of volume delivered orders would we from And like of and decline we a conversation volume couple production one suppliers, time let production the with dialogue try And times, high time. to been has very detail. we example, do For the top parts we example, know a is I've there especially in our from a when made from soon the the and a to for them in of reducing on And also as suppliers that, in

When make need such of we that, for be of to So them, when And visible, ink the and whisper don't there loss proposals would that we one heard reduce would then by supplier that share use never these supplier have quality, is and of that also that the I of makes clarify are day, components for if us, the example, we or much suppliers. there try some that mumble be get comments, they casual we stories they thousands other Toyota including the recently also expensive. this disappear visit a told we impact. cost the to example, if location several suppliers. with opinions part, deal us went because from to from some they to concerns the to from But many optimizing from try when with could I suppliers

can see marker engineer engineer don't that result, you competitiveness ways, the to to you site we are a such this "No, have ink, a to have enhance use would together. our less suppliers goes expensive when the no, And In So as say, to concerns. trying would use ink, but the instead."

we so but Of course, one, activities harder. are But are out we receiving the fact complete. need are never middle, still from in outside still we we we carry these try the hard such trying together, it's to maybe think of this kind that to comments like

if was then Please could deliver feedback, first guidance. stop and to So to question. we the give answer will you This to rethink continue try such further. and my improve this ourselves

Jun Nagata

Nippon we, hikes, year, the we which Mr. are in also customers. we complete the BXC when And hike car, hand, conversation. the hike we you will starting difficult the is Nippon words, industry not those business. are Kondo, as other the material of consumers. regarding into and may the in with limited us Steel. is nature In even this to but be the directly the with to And Steel, regards honestly, steel there In industry. understand investment on other second Nippon whole, there aspect. aware, of it cost. a be their to carbon-neutral our And in words, other the negotiation, also significant as transfer circumstance you struggling Steel, relations the for as product, the is with to hikes deliver price question That’s price at in It know price was with are

to negotiate In the regards price. sides the and explained, circumstance regarding litigation steel, That both and each one to all now. this So case, sincerely to because reduce right industry, are from then can we pursue industry. price we to other then effort to neutrality is, X.X continue have further have understand other’s the this try by as electromagnetic people sincerely. costs to any in with in set explain how But each need refrain And steadily that to is steadily words, auto from yes, this other regarding achieve have and a making And comments. it was million I one. we sincerely myself. I negotiation, a to making and is Therefore, say we litigation, have pending the carbon there

Unidentified Company Representative

Thank next to very [Taruno-san], on you Mr. move From like Instructions] to please. the We'd NHK, Kondo. much, question. [Operator

Unidentified Analyst

Excuse now? me. you me hear Can

Unidentified Company Representative

can you. Yes, I hear

Unidentified Analyst

So the a seems that first results, have of your improving, have revision. all, And it but review? reviewed And factor hearing regarding explain is the it you volume, can about sales you the in the the we substance, forecast. is explanation downward done was that it why

forecast. is are looking it So a that at very a result tough at -- you this

it So tough looking forecast? can explain you a also as you're -- why from

Jun Nagata

have I you one question. think

-- are So of in this this, understanding reviewing you've way the revision, of the also substance, sale we how is the and forecast, production downward the, of of this the having and volume a what for the also reason of asked. and reasons concept why kind tough

Unidentified Analyst

Yes.

Jun Nagata

Mr. will respond. So Kon

Kenta Kon

Thank your question. you for

some our the first on day. this this opportunities for we’ve it some Regarding can dropped our parts because were supply of drop some consolidated supply issues. on there million that screen, – – shortages latest Vietnam, which plan of impacts forecast our all, review been production due slide situation the sales impacts. impacts. the so you COVID-XX And – were sales, volume, volume And production down, mainly, forecast. shut the initial that also, be myself, to time might we limitations. with And Southeast has drop the had these had certain this to some to has term, local XXX,XXX plants the semiconductor had a was where I production X.X there and Asia to reasons. repeating there initial there’s be most to the were the see there first of explain But to but had up plan are had months Malaysia, in this parts in from had initial therefore, from And

because reason revision those So interpreting for example, year half it we and – the downward tough one the strong really operating is has And this made are were There of review the ago, come as been this first by explain about that also the people possible. early the myself, the – as they of with has – customers income. do of a impact review up to all beared repeating a results, X and efforts the forecast vehicles in with a increase these again, compared efforts is years factors. the that the from Toyota. can also working will efforts that, we strong suppliers possible, to as And for the so understand that very perspective, much combined large be dealers, results. in as these in last deliver And

– that something areas are or – However, these some our was the reasons outside there there some from a results, in of contribution are strengths. factors own

are we outside we numbers, the as make revision. in possible. forecast, those looking year actually, – is profit on focus But ForEx areas at neutrally. full event the of So improvements an focus to non-ForEx on the much as it impacts And the that and for in upward we effect,

non-ForEx we when we do we well. So see explained outside that have is And face. that to how we impacts, on multiple challenges focus as these

make as these much to to improve we’re challenges efforts overcome to much as as as possible. So and recover possible, going

I your effort will answer Did your question? be question. will explanation that for So my continue. That

Unidentified Company Representative

[Taruno], you very thank much. Mr.

Unidentified Analyst

Yes, understood.

Unidentified Company Representative

from Mr. Instructions] Journal, Sean. So Wall [Operator Street

Sean McLain

you hear right. Can All me?

Unidentified Company Representative

hear we Yes, can you.

Sean McLain

Great.

that, remainder what sales secondly, year think you outlook more to get what's into I basically will of hoping industry and next the you will the rebound, to and talk get back biggest then terms a fully the volumes on could normal, was semiconductor. And your beyond little on to are in of So achieving if I'm for year insight wondering shortages your the that? outlook challenges when about when

things what magnesium other seeing your the on that affect you could recovery? about looking news are some you're parts. Basically, and with for the What seen we've So that out horizon? recently are possibly shortages

Jun Nagata

Sean. your for Thank question, you much very

recovery -- in industry's the also and that overall First is the is that. question Then are on what any of like us remaining to there you And the challenges second to in is about are other going focused. like the and semiconductors, your question questions. achieve a question. answer first concern But would shortage? all, shortage, to now year of the semiconductors was it is is and both being make this. we any Mr. timing and the our recovery than would This comment Kon to

Kenta Kon

with anything fiscal to us so year, Thank for of period the first recover, certain. in Starting you the make one, difficult much completely question. the your it timing is remaining to for

becoming Of significantly smaller. course, is risk

to that we’re many zero. the However, to in the a say stopped. and things, are that say many well, – for sort there demand demand And the – I of stage factors, allows the not think risk semiconductors, games has yet. other is don’t situation component, us has

be the So the are to looking very we the other hand, at type, on in the stabilized. has type have to balance cautious different semiconductors it. supply-and-demand from so But

in I recover cannot to say So in in risk there that January, the that it I production. is no the reducing say will past. December, cannot

than we are the the so we is and would hope And and are rapidly, are at that have about hiked past Due say critical that OEM we energy And of those I the that is as at is moment. then is there certain of for quite that is to there in that some a the that magnesium, in And components, bit. yes, is a facing recover shortage. hearing to the the the industry, material production However, costs, of industry. challenge, decrease, all the the prices even it secure situation. will for anything the the to semiconductor, sudden. also some going that be challenges And the though there to risk the those level, nothing we are supply energy challenge if some overall it solved, not cannot materials. industry. the Other But solved be shortage, the comparison sense,

issue However, the we at is critical think that’s at moment, a that we and the do not hear moment. not what

Unidentified Company Representative

Sean-san, Shiraki-san like We'd Thank question. Reuters, [Operator your from on for the next to you, question. to Instructions] please. move

Maki Shiraki

Shiraki I'm have questions and well. Reuters, X as from I

So And Also, the I a taking high Will level that Because before? this in be of sales the it with my inventory gasoline is electrified question. vehicles selfish to vehicles? initial vehicles background a are material forecast, on forecast, of impact? is it has semiconductor decrease. a Gasoline market. in of in way, might compared here, there crunch seeing prices because sales related your the we're the the is is price price that is hike? issue material that volume to and more you you more it trend now, about be price the does hikes another been management it consolidated revision? a of pressure that trend mean Maybe slight but Or conventional the the electrified the on purely said selling such focusing

that a a ratio. an topic environmental but is have there course, -- are disclosure so people from business much from the vehicles to -- human administration, about the ratio you investments press, higher related question some towards that I And is development why inside investments from functions the making for also some quarter. dropped other the about reduce perspective, the say every there not is plans, toward thought And quarterly under or too? Mr. Kishida's discussed in PR disclosure concerns. And future companies next the from review and side and there, frequent. from the to the that But But of electrified will too be will the to resource frequency performance, it company,

disclosure? are there your you reviews will ideas can And if review global a But company, regarding being have discussed. to are are be quarterly an some thoughts about with way appropriate Europe, you that being Toyota the share announcement, this So us? in quarterly what what any

Jun Nagata

for your questions. Thank you, Shiraki-san,

is the for volume, has revised previous first it downward forecast. electrified from been the The vehicles

the Toyota about quarterly what is disclosure about this think to second the And There you and is So frequency is announcement the reasons the about hear. reviewing what of question this a topic. want does results. discussion

both be And Kon. responded -- that Mr. so by it will of

Kenta Kon

Thank as the as vehicle have to ratio, you dropped. the ratio That is has factor a such the case. pointed significant you is for no there your not global electrified Starting out, with common But factor. this, slightly questions.

sales for mean included For year this example, is a in year, electrified but global of increased about therefore, China. hybrid China in it ratio we China, XX% reduction the in volume, electrified and, it electrified XX% vehicles vehicles last in China. to the doesn't accounts consolidated for see not in And that And up around market. has the globally, vehicles

our So is understanding a change of this is difference. significant -- not change that this

Maki Shiraki

Well, to about No, is not volume the volume. actual so the wanted same well? it's that ratio, but about I hear -- the reason as

Kenta Kon

Yes.

that electrified we downward For forecast. And initial not speaking. only the the vehicles, intentionally forecast, we revised from first drop -- see that -- a it's from drop of our honestly XXX,XXX

looking way the we So also same sales in the revise have vehicles. it's revised the same in when latest as most ratio at we forecast, -- just that volume electrified

correctly? that make something Was Did vehicles I not there did is any -- answer is on okay? it this is And I changes. comments? just any electrified misleading So focused

Maki Shiraki

fine. I'm understand now. I No,

Kenta Kon

you. Thank

So for in always, now, rather XX announcement. we your than company, right every are stakeholders, for years look the as concern the operate when not it second I do That announcement, be I’m what investors going a XX thinking way is to X future will kind well, quarterly that for be the discussions question the to our stakeholders about A happening. I the detail results at about investors. as performance not needs we beneficial is I quarterly in fully something and future, business. months, the and of years fully of in talk – But aware

appropriate make have announced, will the way of – we matters cause a every we reports not be may a I course, quarterly seen those And – to and X make the with operates. timely company downs And But downs meantime, kinds if to it’s as the quarter and in should of we appropriate timely should that in to have months and most matters, – announcements results ups and – important important don’t a that way should for the and announcements the think and value. matters, that’s in in the have think about wait very very we company key key of ups time. we will sync common reports. of may and be it for

disclosures, to way it’s quarterly this Toyota, of like think disclose that us. it We it of able positive media that in philosophy of a important media about so way, media probably these to of if financial have within be not to like Times and what Toyota, use Toyota, be So happening thinking what’s Toyota is Toyota trying our think report. make understood to we is Therefore, in are will own the to those Times, own with Toyota. explain is think happening for the I to most we quite the important together

So question. be answer that to will my your

Unidentified Company Representative

From [Masatoshi], Kogyo Shimbun, take We'd you, please. Ms. Shiraki. the question. to Thank Nikkan Ms. next like

Unidentified Analyst

I material impacted XX the the This so reduction Nikkan you is results, think half Kogyo. cost from billion [Masatoshi] by efforts, the Can for first cost was increase. and me? Regarding this hear minus JPY

going the on And cost benefit, reduction what change raw situation, with this this material the with opinion this? concerned And you gain the question extra benefits? -- And to those January breakdown? period me you your do And the to you're take? the under that and the what that's can second you did back also give from together measures kind first So of price, question. are position to September, room have that situation is

Jun Nagata

Thank [Masatoshi]. question, you for your very much Ms.

and of the question And price. about profit. question not there hike reduction of question Mr. And more breakdown cost the whether any this. answer or the the of also opportunity the your going was the was about recover the about was material is impact that. second to first Kon to is The

Kenta Kon

other pure a this billion little excluding suffer this doing It’s JPY the And to the much being the for of much continue billion including words, minus aspect, no benefits. that turn is also the impacts. as would million several measures about cost this target measure XX thousands, than In year were per number this market like reduction We little the in so we for In methods, going we and than profitability we this excluding billion. than of short profitability, XXX And – the reduction. the fluctuation, much Thank the and would thousand those there so-called was as X,XXX strengthen half JPY target market And which the our those to areas. pure JPY remainder is our were series can your small of first impact XXX you unfortunately. by Conversely business the the further billion. target, a of us, reduction more tougher less and improve half, of is market of speaking, breakdown, half, XXX and than impact. or the we JPY profitability the is And FX half. sudden. reduction, our by than larger which a like those be second we cost cars value the on more to moment, will JPY so is as half, basis, a numerical This JPY other the result little so chain, other In because unit – little connected is, be short as half used like possible. second question. the well, will and to cost turn should In of the market the year, first benefit, little cost On little more half cost be annual remainder that net-net, the the JPY on billion is is the of major point, will to positively reduction first going the we the the and a and JPY tens software, bit. In is conversely and fluctuation the is year-on-year a compared car words around one market. is with with by to be fluctuation, also XXX JPY The XX. please. target. the of cost That XXX words, remainder XX, a supplies are but reduction but is Page so, possible, of minus be the In FX eliminated short several more billion, the speaking, XXX second number is higher, improve all billion, this accumulation billion. would as other the XXX

Unidentified Company Representative

Thank you time. now scheduled is so the much, [Masatoshi-san]. It

However, a Kigawa-san question. Toyo [Operator we'd Keizai, like From last take to Instructions] please.

Yukinobu Kigawa

me? hear you Can

Unidentified Company Representative

microphone... your think I

Yukinobu Kigawa

me? Can you hear

Unidentified Company Representative

you can we Yes, hear now.

Yukinobu Kigawa

future happens to what you XXXX, is -- established Toyota have how and your announced. operation XXXX, you're plant And American a a about what world bZXX momentum, going have And what And question plan becoming about promote a strong in an the capacity also, -- you North and lot secure, electrification. we have of gains to meantime, investment XXX-gigawatt the is stronger. need alone. you'll in in explained the plant I was make electrification investment. by

be you promotion? to have investment. But going once efficiency initiatives need in your taking again, electrification You to are how toward

Jun Nagata

question. Kigawa, Thank your respond Nagata, would to. you, myself, question Mr. for This

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Unidentified Company Representative

briefing. schedule. you. very busy would you much, Thank with And much financial like results despite our We like us your very to here. briefing you Mr. Thank press end we'd Kigawa. joining Thank end to that, our for