Toyota Motor Corporation (7203) Earnings Call Transcript & Summary

Good afternoon, everybody. Thank you very much for taking the time to be here today for the world premiere of the new Alphard and Vellfire. Now when we think of the Alphard and Vellfire, a well-established image comes to mind, the face, the grille, the presence and the total luxury of the passenger space. But it's important to remember that it wasn't always that way. The Alphard had rather more humble beginnings. During the '90s, the minivan segment was born from earlier commercial models. And the Alphard was created from these beginnings to be a new type of family car, where the space became the ultimate value. It opened new opportunities for passengers, whether that be through a variety of seat arrangements or in-car entertainment or simply having another space for you to define on your own terms. And importantly, the driver was not left out the high-seating position, performance and, of course, the character and the confidence of the front end, all became symbols of pride. And with the advent of the Vellfire, a new alter ego was born. The Vellfire was more aggressive, was dynamic and had real attitude, and it attracted a younger customer. In fact, 30% of all customers are in their 30s or younger. Now with the rivalry between the 2, people fell in love with the aura of the Alphard and Vellfire and over time, the cars have grown together with the customer. But what was planned is really only half the story. The Alphard became part of a bigger movement. Simply, it challenged and it changed the social etiquette of the chauffeur vehicle world. A world where until the Alphard came along, there was really only the sedan. So how did this happen? Well, there are probably many people who played a part in this. But today, I'd like to tell you a quick story about one person who played a big part in creating this change, Akio Toyoda. Now when we talk about Akio-san, it's usually as a car guy or the master driver. But today, it may be more appropriate to call him the master passenger. And back in 2004, he was a Director of Toyota, and he decided that instead of using a sedan as his chauffeur car, he'd use the Alphard. It's suited his work style. The space was there to work in comfort, to talk with colleagues and acquaintances, to relax between meetings and even change his clothes if necessary. All of these factors made the Alphard, the perfect choice. But in reality, acceptance of this choice was a very, very different story. In fact, on arriving at a meeting with another company in a white Alphard, he was told to move along, get out of here, get out the way. There's another VIP due to arrive immediately probably in a century. And we all know who that was supposed to be and the guard surprised when Akio stepped out of the Alphard. This is all now history. Now the Alphard and the Vellfire are used by everyone from Sumo rikishi to politicians, from film stars to business people. But over the 3 generations, Akio, as a master passenger, has honed his requests to help tune each generation to an even higher level. It truly has become the new standard in the chauffeur-driven world. This unique approach to the value of space and how much hospitality we can build into it is in many ways, something very Japanese. The Alphard and Vellfire build on the Japanese philosophy of omotenashi, where attention to detail, even in the smallest way, is critical to anticipating customers' needs. But for many years, this car has remained primarily in Japan and, to be honest, as it's looked at from overseas with some bemusements, we wondered if it would become the automotive equivalent of the garakei or thankfully, the customer has again taken this car to the next level. The values and belief that made this car special in Japan have increasingly started to resonate with people around the world with high demand even where the vehicle is not being sold. So with the new Alphard and Vellfire, it will be offered in twice as many countries, where we hope and believe that many new customers can enjoy and participate in the growth of this very, very unique product. Everybody, the new Alphard and Vellfire, a car with a history born in Japan. [Presentation]

Thank you. So what do you think? Are you an Alphard or Vellfire type? Well, I'd like to give you 5 things that I think that the new addition has that makes it so special. Number one. They now -- both of them, both know who they are. The Alphard and Vellfire have enjoyed an incredible rivalry over the years. But with the Alphard becoming increasingly confident, the difference between it and the Vellfire has narrowed to such an extent that we did, in fact, consider discontinuing the Vellfire this time. But there was an outpouring of support for the car when this was discussed internally. People in the development team, the management, dealers and even some VIP advisers expressed disbelief that this could even be considered. How could we throw away an icon? Now both our bespoke cars, then the Alphard with its power and its confidence is without doubt the epitome of bespoke formal. But the Vellfire has a dark aggressive character that can only be described as bespoke dynamism. The 2 vehicles can now continue their rivalry, but be happy in the knowledge that each has a clear character and position. Number two. It's a one box, but it's certainly not a box. Finally, it has the muscles to match its mass. No more flat, 2-dimensional surfaces. Engineering breakthroughs have given the designers free rein to create surface volumes that enhance the stance or the dynamism and the emotion of the car. Number three. One touch changes the world. In our quest for the ultimate in hospitality, even the movement of the door has been choreographed to reduce stress as you enter another world, a world where you are at center stage, where the seat position, the lighting, climate control are all seamlessly coordinated together. With the touch of a single button, you can access preset environments to suit your mood. Number four. The ultimate cockpit. Now as I said earlier, the driver is not forgotten. Both vehicles will be fitted with 14-inch displays, 12.3-inch meters heads-up displays, but this technology embedded into the crafted, soft interior, makes it all the more impressive. And finally, number five. It's engineered for people and the earth. A new Alphard is designed for the ultimate user experience, but it's not just about the surface attributes. Ride quality, noise and vibration are 1/3 of the current vehicle, a figure that is comparable to a luxury sedan. And the new addition will also have a plug-in hybrid model, playing a part in the road towards carbon neutrality. Now I hope this gives you a feeling for the values of the Alphard and Vellfire offering, but also how they relate to the future because in many ways, these values represent the heart of everything that we are trying to achieve as a brand. The future customer will increasingly demand choices to match their lifestyle values, the integration of services and information into their mobility life, among many other things. Essentially, we, as a company, are striving to create freedom in motion. The 2 cars today offer the freedom to choose your character, the freedom to use it in your own way, the freedom to escape to another world. And in the case of the chauffeur world, the freedom to do things differently on your own terms, the Alphard and Vellfire are the next steps in this challenge, but it will certainly not finish with them. The recently announced Crown Sedan offers the freedom to choose a carbon-neutral chauffeur car experience with the fuel cell version. The sleek elegant strength of the vehicle contrasts and complements the power and space of the Alphard and Vellfire, giving customers more freedom to choose the chauffeur experience that they value. And again, it will not finish here. The Century is the ultimate chauffeur experience, but it too will have to evolve as we move toward the future. And later in the year, I hope to have a chance to share the outcome of that story with a new addition to Toyota chauffeur series. It will certainly be an impressive step in our mission to change the future of cars. [Foreign Language].