Toyota Motor Corporation (7203) Earnings Call Transcript & Summary

[Interpreted] Ladies and gentlemen, thank you very much for coming to our event today, despite of occupied schedule. Today, we'd like to know through the press conference on the new management team structure. My name [indiscernible]. I'm from the public affairs division of TMC. It is my pleasure to serve as an MC today. First of all, I would like to have Mr. Koji Sato, the incoming President, effective of April 1, 2023, to give you his best.

[Interpreted] Hello, I'm Koji Sato. Thank you very much for joining us today on such short notice. First of all, I'd like to express my deepest sympathies to the victims of the earthquake in Turkey and Syria and offer my prayers for the souls of those who lost their lives. Today, I'd like to explain our new management team structure from April. The theme of this new structure is inheritance and evolution what we should inherit is the product centered and fusion center management [indiscernible] has built over the past 13 years. Over this period, our introduction of the total new global architecture and in-house company system has enabled us to make better cars and improved both efficiencies [indiscernible] this car making foundation and promoting efforts to become a best in town carmaker has put global balance to our business structure. Our [indiscernible] even volume has improved by more than 30% since the global financial crisis. Thanks to manufacturing [ good forms ] and structural strengthening that we have been working with suppliers. And our greatest asset of all is the value of let's make ever better cars that pervade Toyota being vehicle-based not function-based. Going into auction at Gemba, not seeking and debating work hard to put smile on our customers faces. I believe that Toyota has changed into a company that values the origins of car-making and can be called a true carmaker. Starting in April, our new management team will put this Akio Toyoda management into practice. The evolution for which our new management team aims is to transform Toyota into a mobility company. We will do so under 3 car-making themes. Electrification, intelligence and diversification. The first is electrification. Energy is what sustains our lives. Toyota must create cars with energy security in mind and contribute to achieving a carbon-neutral society. The energy situation varies around the world. We want to stay in tune with customers around the world and provide diverse options. That is why we will continue on omnidirectional approach without wavering from our multipath. And that multi-pathway battery electric vehicles far best are also an important option and master drives [indiscernible]. We have been preparing to create BEVs unique to Toyota and Lexus. So this effort, we have come to see the kind of BEVs, we are aiming for. Now that the time is right, we will accelerate BEV development with a new approach. Specifically, we will develop next-generation BEVs for Lexus brand by 2026 with everything from the battery and the platform to how a car is built, optimize for BEVs while expanding our print BEV lineup. Second is intelligence. With more interactive costs, we will make them safer, more comfortable and more enjoyable. I believe that there is a vehicle intelligence that only a carmaker can achieve. The vast amount of information falls through a car, including rather operation and tire condition was such there is a lot of information that only a carmaker can put to use by listening to what cars have to say and by controlling information to a higher, more integrated degree, we can increase the value of cars in a way that is tailored to each customer, such as by improving fuel efficiency and optimizing right quality and supporting safe driving. The software platform, Arene, will help us to achieve that first. Arene will also lead to new services through cooperation with theaters and apps. We will continue to work on making cars intelligence through both hardware and software. Third is diversification. Toyota operates all over the world. Customers' diverse needs and values vary by region and generation. That is why we need diverse options in terms of both products and services. Take, for example, the IMV 0 concept. We go that way, unveiled in Thailand last year. But prioritizing ease of customization, we are directly addressing the need of customers who use pickup trucks and the work. As a global company with full lineups, we will advance car making that is in tune with regions and meets diverse needs. To realize these 3 themes, a new management team will prioritize 3 business pillars. The first is business reforms, starting with next-generation BEVs, or BEVs. To deliver attractive BEVs to more customers, we must streamline the structure of the car and with the BEV first mindset, we must drastically change the way we do business from manufacturing to sales and service. Lexus will lead this transformation. The second is strengthening and woven initiatives. Woven's mission is to consider, together with Toyota, the shape that mobility, including social infrastructure, should tick to create a new mobility society. It also plays an important role in promoting a concept of vehicle intelligence. That is why, more than ever, Toyota and Woven will unite to accelerate the development of Arene and strongly pursue demonstration test and the mobility test [indiscernible] of Woven City. And the third is achieving carbon neutrality in Asia. We will promote demonstrations of electrification and mobility through cross-industry and cross-border collaboration based on the cornerstone partnership with the Charoen Pokphand Group which is Thailand's largest private sector company. The new management team will develop specific initiatives for these 3 pillars. The hallmark of a management as a team, like a soccer team will be flexibly in changing formation, underlying this are the concepts of having the right person in the right place and emphasizing roles over titles. First, the 3 Executive Vice President, who has studied management close to the President will make the lead on the front lines of our 3 priority businesses. Executive Vice President Kon, serving as Woven by Toyota's dedicated CFO will work with CEO, Kuffner, to advance Woven's breakthrough transformation, Executive Vice President, Maeda, serving as Chief Executive Officer of Asia region will explore a carbon-neutral path for emerging countries and lead a new Asia strategy under the theme of social implementation of CASE technologies and Executive President, Kuwata, as Executive Vice President of Toyota Motor in Kyushu will promote Lexus business strategy and restructuring other production system in Kyushu, where we have a dedicated work force plant. Our operating officers centered on in-house company presidents and regional chief officers will be in charge of implementing product-centered and region centered management new Executive Vice President, Hiroki Nakajima and Yoichi Miyazaki will each oversee work on the 2 access of products and regions. Tetsuo Ogawa is American region CEO, and Tetsuo with a China Region CEO, will lead region-based management as new operating officers and Simon Humphries will lead brand creation as a new Chief Branding Officer. Kazuaki Shingo, the president of the in-house Toyota compact car company will promote the creation of a competitive production system, operating officer, Jun Nagata, will continue to lead communication with stakeholders which is the foundation for our efforts. And I believe that my role as President will be to maximize the strength of the team as Captain. And while listening carefully to the opinions of those on the front lines and United team while making the most of the diverse personalities of the leaders. Many of the new management team members, including myself, who are still at the manager or assistant manager level when President, Toyoda, took office. Over the past 13 years, by taking on many challenges and experiencing many failures on the front line, we have continued to learn from various perspectives, the values of making ever better cars and being the best car maker in town, thanks to that. At Toyota, we now know many people capable of managing the company. That is why as we apply 1-team management we'll go full strength and engaging in inheritance and evolution. I'd like to ask everyone's own guidance and support. Thank you very much.

Immediately after this, we're going to have a QA session please wait for a moment until the stage is spread -- is set for that. Thank you very much for waiting. Now I would like to start the QA session. On the stage, I would like to welcome the people who will be answering your questions. Now we'd like to start the QA session. Today, I would like to introduce those gentlemen with the new titles effective from April, Koji Sato, Incoming President of TMC. And newly appointed EVPs. Our first, Mr. Nakajima, Hiroki Nakajima, EVP. Also the new EVP, Yoichi Miyazaki. Newly appointed operating officers, Mr. Simon Humphries. And also a newly appointed operating officer, Mr. Kazuaki Shingo. [Operator Instructions] Over there. I see a hand up. Please?

My name is [indiscernible], the incoming president, you talked about the next generation BEVs in your presentation. In 2026, this is a -- 2026, you are now making development -- Why do you think it is necessary to do that? And more specifically, compared to the traditional -- conventional BEVs, how different this BEVs is going to be? I would like to enlighten on those things.

[Interpreted] Okada-san. Thank you very much for that question regarding BEVs. Earlier in my presentation, I said that we are going to work on the BEVs as well. So I'd like to explain why we are now doing that? And what would be the plan for the BEVs. And that is how I understood your question. Actually speaking, while the message has been consistent in terms of BEVs basically speaking, multi pathway that is the -- give options to as many people as possible. This is not been changed. And as one of the option is BEVs and therefore, we are going to accelerate specific and concrete activities on the BEVs as well. The energy environment is different from country to country and the political situations and economic situations are different from country to country in terms of offering mobility and also to realize the carbon neutrality, we have always believed that we need to offer options. On the other hand, there are many countries where electrification has advanced. So those areas or those markets, we need to also show and roll out a concrete product. And then what sort of BEVs are we going to develop? When I had the meeting like this with Mr. Toyoda, we think that we are the carmaker and therefore, they plan to drive and also the fun and joy of the ownership. And through that, we want to make our customers as happy and smile as much as possible. So how to make the BEVs which are unique to Toyoda. Actually, as a master driver of Toyoda, Mr. Toyoda and me would have been discussing it. We are trying to find out the uniqueness and also the characteristics only unique to Toyoda [indiscernible]. We have studied that for many years. So far, our car making was based on the ICEs, but with regard -- we have learned that there are something that are different between the BEV development, ICE, for example, some management know the ICE, there is always the heat that you have to -- the issue that we have to counteract. And the BEVs on the other hand, they can create the energy by utilizing BEVs. And therefore, we need to fully understand the electricity and heat management and also the aerodynamic requirements are different between the ICE and BEVs and we are now collecting such information and know-how. So when we consider the optimized development of BEVs, we think we need to go 1 step farther. So we are now doing this kind of things, and we hope that we'll be able to continue to develop the BEVs along this line.

[Interpreted] Questions, please. This women there is sitting on the second row from front.

[Interpreted] [ Masatoshi ] is my name. I'm from [indiscernible]. Effective April 1, as new management team is going to be inaugurated for the Executive Vice President is going to take the new role and together with the newly promoted, the Vice President. And what is the aim for this new management team. And also about the Woven Planet Holding. I understand that this is going to be renamed. And if you can tell us about the Woven Planet Holding.

[Interpreted] Thank you Ms. Masatoshi for your question. In fact the current Vice President -- the new Vice President, their roles and the change of name of Woven Planet, that's the question that you're asking. First about the role of the Vice President. As I stated in my presentation, frankly, the management team of Toyota is like a soccer team, I think that's where we are, where the roles should be possibly changed to adapt to the surrounding environment and 3 projects that we are going to work on -- in the Toyota-like way. We have to work on gemba too and to the leadership of those people that are newly appointed. And therefore, those new initiatives are the ones that have been developed under the leadership, Mr. Toyoda, so in a way, he cultivated the ground. And those people who were close to Mr. Toyoda, now promoted as people responsible for those projects are going to be in-charge of the operation in [indiscernible]. So those are the first aim of changing the roles and also Mr. Nakajima, Mr. Miyazaki, are those 2 new Vice Presidents are expected to promote the management product-based and region-based activities. In fact, when we talk about the management team, we tend to consider people representing different functions and different department organization. And that's what was experienced in the past. But current Toyota organization that people are not supposed to limit their thoughts on their roles, but rather we are going to promote even more the team management, not only myself but also Mr. Miyazaki, Mr. Nakajima, expect to receive feedback and input from those people surrounding us so that we can work together. And based upon those to access hope that those people will not stay in the situation where they are but rather consider and promote various initiatives in a comprehensive manner. I'd like to ask Mr. Miyazaki to share with us his thoughts.

[Interpreted] Thank you so far. For growth and development of a business, the source of driving force came from those people, the customers who stayed to promote us and support us. And then that would be received by the people in the field and together with the distributors. We have been trying to win trust from customers. That's how we were trying to be the best carmaker in town is a philosophy from now on. As we're going to transform ourselves into the mobility company of various aspects towards carbon neutrality, according to the infrastructure and environment of different countries, we have to work on different types of initiatives and activities and more than ever. The regions and the global headquarters have to maintain even closer communication. And as I try to enhance the activities underground, the collaboration would be even more important. And therefore, under the new management team and the structure, we hope to move forward to that aim, and I ask for your support.

[Interpreted] I'd like to hand over the microphone to Mr. Nakajima as well.

[Interpreted] Thank you for the question. As Mr. Sato stated, to make ever better car, that's a responsibility to inherit that philosophy under Mr. Toyoda, in fact, we are fortunate just be to experience little failures because that led to new ideas and new activities. And when we stay to make ever better car, I want to develop the young human resources talent that can create the ever better cars. And I ask for your cooperation and support.

[Interpreted] Yes in the middle, the second from the right.

[Interpreted] This is [ Hans ] [indiscernible] regarding the BEV strategy, I have a question. Why Toyota were slow to develop BEVs? What is the reason, would you like to explain why you were slow on BEV. Also you are talking about the next-generation platform for the BEV, I just want to know the time line of this next-generation BEV platform.

[Interpreted] Thank you very much for question regarding Toyota's BEV strategy. So your observation is that we are slow. And also regarding the new generation BEV, you would like to know more information, including the time line. That was the question was actually this new batter EV I think that sometime in April, after our new management starts, we think we will have to have a little bit more detailed communication with you. However, as we sit today, actually we are receiving many feedbacks as [ Hansen ] has mentioned, some people say that we are slow. And sometimes, this is because of our communication failure. But, anyway, there are two reasons, first one, our strategy is a multi-pathway as to say, we would like to take actions which can have an immediate impact in terms of -- in carbon emissions. Right now, the 23% is a global share of the electrification car. And to the average is a 26% or 27%, which is higher than the global average. So to reduce the emission immediately, and that can be also achieved by the energy saving at the same time, mid-long term time frame will eventually go to the battery EV. That's one way of the thinking. And also regarding the speed of the battery EV, well, I think that about half of this is because of the communication issue was involved in the development so far until today and therefore, with Mr. Toyoda, I have had lots of communication with him regarding the battery EV. As you know, he has a strong image as a motor sport [indiscernible] seen much different. But in my case, I was in-charge of Lexus models. And therefore, when it comes to electrification of Lexus, because [indiscernible] is a brand new order. And therefore, I have continued lot of discussion with him. And actually [indiscernible] he has been involved heavily in the development work of the electrification. However, has been set today, for example, you know the batter EV in gestation period and also the take off period, I think you have to differentiate and our approach is to address those in sections or the phases. So we think that we are going to openly discuss the overall strategy so that you understand better the Toyota strategy. As you had seen in the screen Mr. Toyoda, [indiscernible] excited in various areas, the development of battery EV is just going [indiscernible] because communication has an issue that has to improve. And there is also an important option of the multi pathway. And therefore, we are going to accelerate our activities into.

[Interpreted] The person in white shirt in the front row.

[Interpreted] [ Tania Gawa ] is my name, I am from [indiscernible]. Mr. Sato referred to Arene, software-defined vehicle is the concept behind Arene for development. But in your presentation, it sounded like the operating system in town. So If you can tell us about the relationship among the Arene cars and the community and the new battery EVs, that is going to be introduced around 2026. If you can share with us the -- on those developments.

[Interpreted] About Arene, the software first, that was the idea that used to be referred to, but in the presentation that I made, it was expressed in a different way, I think, that's what you are asking in your question, the role of Arene has not changed drastically, software-defined architecture is a core and to the change the body of car offering mobility that is to expand mobility. That is the first and foremost important part of the Arene. And in our thought instead of making software as a core or main part, the key is what we would like to realize with software application. In other words, we are currently exploring deeply the [indiscernible] be that is when car is connected, the people, the information goods, those will be carried by car. When mobilities [indiscernible] on those elements and when they are connected in an integrated manner, eventually, car become a part of the social infrastructure. So, in a way, that's when the way of evolution and mobility that we're aiming for and Arene can offer value, which could be the core value to that idea. I'd like to ask Simon to touch on Arene.

Thank you very much for your question. I'll answer in English. I think as we look at the world, and the way that the world is moving and people all around the world as well, is what we can see in safer definite is that people want control over their own experiences. They want to live life the way they want to live their life. And from a few years ago, Akio-san, talked a lot about freedom and being able to provide freedom to people all around the world. So going on to Arene, what is necessary at this moment, is to increase the pace with which we synergize hardware and software for everybody. So they can enjoy, use these products on their own terms to increase their own freedom in life. I think that's the most important thing.

[Foreign Language].

[Interpreted] So let's take next question now. In the middle, the one on the right-hand most, please.

[Interpreted] This is [indiscernible] from [ Bestcar]. [indiscernible] I have questions for you. More specifically, when you say car manufacturer or carmaker, actually, you used the expression many times. And after certain years of Mr. Toyoda [indiscernible] how those car making is going to change going forward? That's the question to Mr. Sato. And also the Nakajima-san is going to be a CTO. And therefore, in fact, to answer the same question in your onwards.

[Interpreted] Thank you [indiscernible] for your question. Yes, the carmaker was what it means, actually, you want me to explain what I mean by saying that we are [indiscernible] carmaker, well under Mr. Toyoda I've been doing the car making in Gemba for 13 years as a master driver, Mr. Toyoda really, what should I say, he's the car guy and he really loves cars. And when we drives good cars, I think, it is quite natural that anybody to smile if you have touched something great. So we always wanted to -- and also he always wanted to make the car that will make the customers smile. And there has been no change in the desire of that. So I've been working under him. And as an engineer, how should I execute that. And that is to have a high quality and good -- reliable cars with the reliable basic performance of the cars. And then, of course, we will implement the highly sophisticated control and by so doing, we'll be able to create a car that will meet the expectation of customers. So those are basically speaking, elemental technologies, and we are going to continue to work on those through various coordination or corporation. We think we are going to improve our elemental technologies. And I think that you will be able to continue to see a great car that gives an inspiration even when the technology is a sophisticated, the cost has to be safe and reliable and enjoyable to products. For that purpose, we need foundation technologies and elemental technologies developed and evolved even more. So as the cars are going to transform into the mobility, we would like to make such cars. So what -- let's see what Nakajima-san has to say regarding that?

[Interpreted] Thank you very much for your question. As the [indiscernible] cars, the phrase itself in the beginning by Mr. Toyoda said it took some time before I [indiscernible] understand his intent. And Mr. Toyoda himself, in order to have communications with the engineers he improved his driving skills and he sometimes came to gemba, and we'll be able to have consultation with him. After many years, only belatedly I was able to understand what he meant by ever better cars. [indiscernible] mentioned, as ever better cars meaning that the starting point, the cars are great and also the driving -- the moment is great and of course as the [indiscernible] should be cool. And the [indiscernible] the customers, we need to be able to incorporate customers' feedback directly, and that is my aspiration -- [indiscernible] I'm going to do my best efforts to make car that will make you smile.

[Interpreted] Next question, please, yes. The person sitting in the center on the second row, the second from the left.

[Interpreted] [indiscernible] about BEV-based the development as mentioned by Mr. Sato about BEV, battery EV. I have a question. You said that will start from Lexus meaning that a rather relatively higher price range segment that you will start working on BEV. That's the way I interpreted it. In the case of Toyota, maybe the pace of spreading the technology is rather slow. So I'd like to ask you why you decided to start from Lexus. And about the way the information is communicated about the change of the President that was reported through Toyota Times that's in-house media. But this time, you have this public press conference. What is the decision or reason behind the different leader that you have decided to choose for making this kind of public announcement?

[Interpreted] Thank you very much, [indiscernible], I believe you gave us 2 questions. About the BEV business and the reason why we start from Lexus. And also the way we communicate with you, there are ideas behind holding this kind of press conference and working through different media. Allow me to [ ask ] those questions one by one. First, about BEV and Lexus, the progress of BEV is what we're watching, which seems to be quite advancing in advanced economies. And in fact, the -- I believe there is a high need BEV and the high popularity of Lexus overlapping with each other in terms of the regional market -- to make customers smile, to live up to expectation of customers and that's kind of car we want to make -- that the primary importance. And therefore, we decided to start from Lexus with high expectation on from the customers. That is why we decided to explore BEV business starting from Lexus. And the key there would be that, of course, design, that's one -- that's important. But more than that, the structural reform is required in manufacturing operation that is rationalization streamlining of the design process, it is inevitable to streamline a reform manufacturing process. Therefore, that's where the priority will be placed in the business or the operational reform. I'd like to ask Mr. Shingo to add some of the points because he is in-charge.

[Interpreted] Thank you for the question. I'm Shingo. In 1997, the first Prius was introduced into the market, and we have been working on Prius for a long time. And we have always cherished the idea that the eco-friendly car can really make a contribution to development when it is widely spread. Therefore, it has to be affordable for customers to enjoy driving safely. That's a key word and, therefore, the multi-pathway that we have identified is that whichever pathway you might choose, it has to be in the range of affordable price. To do that, that requires huge technology reform that confronts us especially, we got to start from the compact car, I would say that the hurdle would be even higher. Therefore, creating a new platform and the BEVs that will be available, affordable is what we're trying to achieve with this new team across different functions and organizations, not only technology development but also the parts and components procurement, based upon the regions and the sales and marketing, there would be different aspects that we have to consider. We'd like to be agile in making a decision and move forward.

[Interpreted] I'm Nakajima speaking, I'd like to also make some additional comments. Lexus is one of the Toyota brands. And of course, depending on the region and the spread of battery EVs and how many users are there, depending on that, the approach could be different. As Mr. Sato mentioned, there is a high expectation towards Lexus. So Lexus, in fact, has also a smaller size, the compact car, as well, not just the bigger size cars, and therefore, how we should interact with customers and spreading battery EVs, based upon those [ source ], we decided to open a door to BEV starting from Lexus, of course, we would not regard the boundary like Lexus versus Toyota where it got together in the United fashion.

[Interpreted] And now allow me to respond to the second part of your question. The way to communicate with you last time, it was through own media, the Toyota Times that we used. And now we are holding this press conference, and what's the difference? Back on January 26, at the time of Toyota Times release, Mr. Toyoda has been acting as President for 13 years, starting from his activities and the new management team. In fact, that we've received many repercussions after that, and we received many feedback as well. And the fact that it was received in a different way points to the fact that when we try to convey one story, the -- what's the intent of speaker, what are the thoughts of the speaker or speakers, that has to be conveyed in a straightforward fashion. Out of those considerations, we decided to use Toyota Times. As a result, based upon that report, thanks to your help and contribution, the word -- various information added, that information was widely spread. And that is why that many people are now aware of this new development. In fact, now we are living in the days when everybody can generate and send out information. So to spread information in straightforward fashion, we thought that could be one way of communicating with you and community. On the other hand, then you might ask why we are holding this kind of press conference. As I'm trying to answer their questions, and frankly speaking, all of us are very much nervous on the stage. I have to say that we are not very much accustomed to this kind of situation. So without -- I'd like to improve my communication skill. So -- all the teams and with their support and help and, therefore, we're willing to promote open communication. And in fact, the -- because the team is so diverse, the level of the tension or the enthusiasm, that could be different. That is why we decided to hold this kind of the press conference. To let you know how diverse the team is. And depending on the content that is communicated, we like to choose right media and -- as holding this kind of the press conference, I think this is a great opportunity to have a great community -- and direct communication with you. That would give us the momentum and energy for the new management team. Hope that you will continue to watch our team and progress with interest. Thank you.

[Interpreted] So now would like to speak to the questions on the online. [Operator Instructions] Shimashita-san, would you like to ask a question?

[Interpreted] Can you hear me?

[Interpreted] Yes.

[Interpreted] Sorry. This is Shimashita, I freelance. The Lexus and GR, those are the questions I want to ask. According to the release, we have new presidents, Mr. Watanabe and Takahashi, for the GR and Lexus. So I think that those are the right person for the right positions. So my expectation is running high. Now going forward, for each brand, for example, what are the challenges or the expectation particularly for Lexus? That is one challenge. You said that you want to report that for Lexus, [ Kenta Kon ] and Sato-san, I would like you to talk about the expectation and challenges of the Lexus and GR. What would be the direction that they are going to at present and what sort of the torch are you going to give them?

[Interpreted] Thank you very much, Mr. Shimashita, for your question. So the Lexus and GR brand, for those brands the expectation to the new president and also the prospect and aspiration for these brands are the questions that he has asked. First of all, so the new present, Mr. Watanabe for Lexus and Mr. Takahashi for GR, but so far, I have worked for them for a long time for Lexus and GR. We have discussed and try to define their directions for these brands. So in that sense, between me and them, I think that the values have been shared, and we are fully aligned, the Lexus and GR has pursued. And so when it comes to the values, I think that we share the same core values. And I think that they are going to make more actions and put the ideas embodied into complete actions. I hope that we'll be able to have that kind of nice and smooth transition. We in Total have 3 brands, Lexus and Toyota and GR. Under each brand, we need to consider the greater portfolio for each brand as a brand new strategy. So the motorsports driven and agile strategy, and also, we will push forth with internalization of the future technologies. So the GR is going to be developing, and that will be a trickle down to the Toyota brands. And so that the GR is expected to be the [ front liner ] to ever-better cars for Toyota models. Lexus is the premium, and therefore, the authenticity is very much important because customers are accustomed to the authenticity. So they're truly great cars or elegant cars. We will continue asking these questions to ourselves and so that we dare to make day in and day out all out efforts. Particularly when it comes to the electrification, it is the new trigger, and we will consider the next-generation mobility. I think that the Lexus is going to have a leading role for that. And both presidents, both of them are very young. Particularly GR, Takahashi, the difference is in his [ expertise ] yet. And after the announcement of the [ '23 ], people say that I'm also very young. Actually I'm pleased that I'm reported to be young, but I don't think I'm so young. But anyway, when you look at the industry in general, the people in top management who are still in 50s, there are many such people in Toyota. But when we consider the vision and the size of the Toyota, this is a very important movement and I'm honestly humbled. However, this kind of rejuvenation, I think, is going to something impossible in Toyota in the past. However, after 13 years of Mr. Toyoda's presidency, he has spent so much energy in developing the next generation. And because of that, back to that, we now have many guys, not just me, but there are many people who can be the new teams. I just happen to be selected because the -- I was involved in the areas and he thinks that I am appropriate to serve as a leader. As are the areas which is a very important company priorities. I kept saying the formation has to be best flexible depending on the challenges we're facing. This kind of a flexible management now can be possible within this company after the 13 years of Mr. Toyoda as a President serving for this company. So I think that the Lexus and GR business are now have new presidents. And I think that is also something that we are expecting very high and I'd like to give the important to those new presidents. I hope that answers your question.

[Interpreted] Thank you very much, Mr. Shimashita. Next question, please. Mr. Watanabe-san of [ Chunichi ] Newspaper. [Operator Instructions]

[Interpreted] I'm Watanabe of [ Chunichi ] Newspaper. On this occasion, a press conference led by Mr. Sato, that the -- I understand that he showed a strong determination of Toyota to work on electrification with EVs. In 2030, 3.5 million units of cars was identified as a goal. And according to your explanation, you mentioned that the central part of those activities would be on Lexus about to achieve a volume. Maybe you have to consider the EV is bad sector to brand cars. The -- what about the EV strategy for Toyota brand? You think you start from hybrid and plug-in hybrid, and then eventually, BEV? Is that the way you're planning to move forward? What is the electrification strategy of Toyota brand cars?