Toyota Motor Corporation (TM) Earnings Call Transcript & Summary

Happy New Year, everyone.

Happy New Year. So now last year, I'm now reminded that I wasn't able to come because of the flu. I'm really happy that you're here on stage with me to meet this year. And we saw the movie last year. So you were watching online YouTube from your home and you gave us a comment saying, I'm alive and well. So you were participating from home.

Yes. And I didn't have any -- it wasn't -- but well, it wasn't really bad, but it was a flu after all, so I decided not to come. And it's not AI. It's not a robot. It's me. It's the real me here.

Thank you. Well, last year, you weren't able to come, but we had people that were standing on stage on behalf of you, and we talked about Morizo's top 10 news story. It was like a prediction of the future. So maybe we should just briefly go over how it turned out. So let's look at that roughly. #10, Morizo's Dream garage comes to life at Tokyo Auto Salon, you did achieve that last year and WRC Triple Crown regained. And yes, you regained that. And last year, we had this congratulation message from Hyundai on the newspaper ad page. So it's the right-hand side. This is from Hyundai to Toyota Gazoo Racing, congratulations on the Triple Crown. And actually, it started out from the message from Toyota Gazoo Racing to Hyundai, congratulating the great competition. The final race then was Rally Japan and Hyundai's Chairman also came to Rally Japan, and we were very grateful that the Hyundai, Ford and also Toyota competing each other in the top category I think because we're having this open fight, if we -- if they want -- if they were saying they were going to do, so we wanted to send a congrats message, and we thought that the manufacturer's champion would be Hyundai. But at the end, well, there was this kind of a miracle change and Toyota won. So we had to rewrite this message. But this is like this call in response between the rivals. I think it's wonderful that this kind of communication is going on. So let's come back to the ranking. Number 8 to number 6, because it's a head-to-head competition, it's quite difficult to achieve it. But number five, able to drive more cars a year than usual. Yes, you have the [indiscernible] ship, the hydrogen engine, GDR 3. You've already -- you've driven all those cars. I think you've achieved that, yes. And number four, GR Yaris finishes 24 hour at Nuburgring, also additional R and both TGRR, you've entered in Nuburgring. So you've achieved that. And number two, 2-liter engine reps into action, number one, midship takes off. So most of it, you've achieved it. So Morizo-san, the midship did take off. And you've actually driven it. How did you feel? How was it? How is it feeling?

Well, the professional drivers who teach me driving, especially driver, Mr. Sasaki-san. So I've driven 86 and then GR Yaris. And then people who've mastered those cars, what he told me is that you need to have a midship to master the next stage. And so the GR Yaris that I'm mostly used to driving, we've modified it into a midship and the Okayama rallied the race in October, Super Taikyu, it's not really, Super Taikyu at Okayama, we've entered this car. And after you've driven it, he said, I want to drive more with this car. So I assume that you had a lot of fun. And this car, in Okayama, we are divided in 2 classes. And until the end, it was competing to finish with the top drive -- top car. And 50 years younger driver than me won after all, but I think it did show the potential of this car. And speaking of midship, recently on the social media, we've heard there were some of conversations.

So everyone is like what is that? And it's the midship 2-seater that was customized. Is my understanding correctly?

Yes, it's that. And another one that we wanted to [indiscernible]. It sounds quite harsh. Things are getting rough. So with those conversation, actually, they've chosen the theme of auto selling, and we chose it to be the match up. It's going to be a 3-round match. And let's see what kind of a fight is going to go on one by one. So the first round, it's the parent-child quarrel or the family food, GR and Daihatsu. So that's why you're saying parent-child, parent company and subsidiaries. Hoshika-san, the Vice President on the right-hand side. So this was created by AI. So the space is slightly strange, but look at the right -- lower right-hand side. It's a Kei truck, the mini truck. Yes, it is a midship. It is a 2-seater. So which side picked up the fight? Daihatsu had caused a lot of fuss on the media, very sorry about that. There were some issues with Daihatsu. And in those kinds of times, we're saying that we need to create good products and has that product be used by our customers so that the employees and the customers, we can gain -- regain the credibility from them. That's what I propose to Daihatsu. And then from Daihatsu side, the response was, if that's the case, can I have a competition with you? So they challenged me. And so I said, which car are you going to use and in the lineup from Daihatsu and we're then saying that it should be a midship. That's why we got the 2-seater midship and this is like a national car of Japan that we're very proud of, the Kei truck, the mini truck. So -- and the car that developed by Daihatsu, we're going to use that. So Hoshika-san is the one who challenged me. And then you said that if they -- if you want to fight, then I'll take it. So I think we should straighten out the facts with Daihatsu and Morita-san, you're in the Daihatsu booth [indiscernible] time. So this is about the first round fight. The people who picked up the fight is Daihatsu, Hoshika-san and also Tanaka-san from Daihatsu. So you're the one who challenged Morizo.

Yes, I guess I did rather courageously. Well, but at the end, there's a lot of employees in our company that really love the Kei trucks. And if we say that we're going to have a competition with this -- with our products, there's a lot of people who want to engage and who want to participate because there's a lot of car lovers in our company. And we want to win absolutely. So yes, you're going to give it all -- give you all to this fight. Now the person who is going to take on that challenge on behalf of Morizo is Sasaki-san because you're the one who always customizes Morizo's cars. So you've now picking up the fight too. So yes, this is quite difficult, this topic of modifying a Kei truck. And then I'm competing with an OEM, and we are in the GR garage. It's like a small -- very small garage in the town with small people trying to win. And so now you see this clear positioning.

And I'll ask Tanaka-san, what are the key points of your truck?

Tanaka here. Well, we know the Kei trucks [indiscernible] to every detail. We're the OEM who made this, and we looked at what the Kei can do because it's a Kei. So we -- it's about carrying, working, also supporting. And we've expressed this all in our modification. And there's going to be a voting method for all of you to join to see which you're winning.

And Sasaki-san, anything you want to say?

Well, I could see how well they knew about the truck, this Kei truck, and I've learned that we can remove the roof of this Kei truck and so quite impressed.

Now Sasaki-san, what about your modification?

Well, Kei-truck is about a working car. So I've changed it completely to a car fun to drive is to enjoy fully. So it's a 2x2, 2 people is more fun than 1, 4 people is more fun than 2 people. So we have 2 seats attached to the rear, right. So with this car, have Morizo drive it on the off-road, the off-road driving. And Morizo likes to entertain people, likes to have people have fun and turn them into smiles. So that's why I wanted to add more people so that more people can turn into smiles. So a car to have fun with, the truck to have fun with.

Well, Sasaki-san said you wrote that design in your mind, and it's a cool buggy. So it looks like a car that we can have it in rally competitions. So quite a strong car that we need to win over.

Well, we're the like-minded colleagues that we are engaged in car development together. So we're going to have a head-to-head match. Both of it looks cool.

Yes, I like it. I like both of it. And I'm a person who's like a representative of a big company.

Yes, you are. You actually are a representative of a huge company. And so a person like me was intentionally going [indiscernible] from the company. And we're doing this like as if we're the owners of garages in the town. I think this is very fun. We want to support the car industry of Japan, but just the OEMs make working hard won't help this whole industry. And it's not -- we can't just rely on the small garages, small companies and SMEs to support the industry. So we want to show the potentials of what everyone has and especially what the -- the kind of techniques that Japan has and with -- especially with the light truck, unique truck to Japan. And in the 3 days, we're going to have a voting so that you can participate to see who wins. So it's a Kei-truck that is modified from an OEM perspective and then a Kei-truck that is modified from a small garage perspective. I think that is also interesting to see. And to determine who's going to win, we will have a voting that the vote will be casted by people who come to the Auto Salon, all of you visitors.

And I'll explain how it's going to be done very briefly. So at the side of each of the cars, we've lined it all up like this. We are going to have this box and you can cast your vote with these balls. So the car that you want to ride, please put in that ball into the box that says either Daihatsu or Toyota Gazoo Racing. And after 3 days, we're going to count all the balls, see how many votes that each car receives. So you can do as many voting as you want to, but be -- try to think of not being -- let's try to be fair here.

Well, and let's think of what kind of reward that we can give for the champion.

So Auto Salon, we're going to have only the invited guests, but the general public will be coming in as visitors from tomorrow and on Sunday. So we'll look forward to all the votes.

And I did say that it's a 3-round match, let's go to the second round match. It says internal feud company feud irrupts. And referee in the middle is President, Sato. And Akio-san is on the left-hand side where you're the Chairman, I guess, of the company. And then on the right-hand side is AVP, Nakajima-san. It's like you're almost going to be punching each other, and this is what was made by AI.

Well, actually, 2 days ago, we had a press release out that quite surprised us, I guess. As you can see, Toyota's European R&D center changes its name, competes and work with a new brand, Toyota Racing. It's a new name. Also, it says Toyota Gazoo Racing, reverting to Gazoo Racing to pass on and involve the making of ever better cars and the fostering of talent. So it's no more the Toyota name out. It's just Gazoo Racing. And the booth still has Toyota name in here because we were in time to remove it. It was just a sudden change. So now we see this Gazoo Racing versus Toyota Racing. And let's call in the representative from the Toyota Racing side [indiscernible] here you are, so we see the [indiscernible] bulldozer of TMC.

Well, I have things that I want to say. I was listening at the side, and you're talking about Morizo constantly. Of course, Morizo, there are many people who want to make ever better cars with Morizo in the center. But there are people that say that even without Morizo, we want to make ever better cars, many engineers like that inside of TMC. And I'm the one who represent all of those people. So Morizo, we're going to be divided from Morizo's GR. I'm going to represent Toyota Racing. So I came to pick this punch finally looking in the eyes. But until yesterday, he didn't look me in the eyes. He wasn't able to look at me directly. Well, it was like he was watching the side and now you're really going to look me in the eyes and fight me. So maybe your mother is watching this.

Well, after this, I'm going to call my mother. So she might worry that you're going to lose your job. I'm going to worry -- I'm going to call her after this so that she'll be -- I can relax her.

Well, can you talk about this? Well, for Toyota Racing, the World Endurance Championship, especially in WEC, we are going to be fighting ourselves without the help of Morizo, just with the engineers. And this year, we're definitely going to become champion of [ Le Mans ]. And then I'm going to bring back the trophy and smash it into your face.

So everyone you heard it. You heard that declaration, right? So you're going to smash it to us, and we need to take that -- Toyota Times needs to take that and cover that. So it's not alive, right? You can say that to your mother, too.

My mom, I'm going to win definitely. Let's believe. Let's leave it. Well, then how are you going to divide the work between the 2 companies?

So for WEC and NASCAR, it's going to be done led by Toyota Racing. Then Gazoo Racing will be leading WRC, Super GT, Super Formula, Haas Formula 1, also the Japanese Rally Championship. And TGRR was started last year. And Nürburgring, Super Taikyu, Kyojo Cup, this will be led by TGRR. So it will be these 3 teams.

Now how it will turn out this year, I think it's something that we should look forward to. And we were talking about a 3-round match, and we have a final round for our fight. It's the customization showdown.

All -- to both of you, you look good in sunglasses. Where is mine?

Yes, we have yours too. You want to have it on.

So I'll receive your glasses, so you can have your sunglass.

You think it's cool, they look cool? Is this press conference okay? Is it okay from the [ Sato ] perspective?

Well, anyway, we'll just move forward. So customization show now, I think it's like rough deserts of U.S. And you know kind of what you're going to use. I should say that something like a [ cam ]. We will, we have it Mosaic, we're trying to blur it. But we're going to pick up a certain car and do a customization showdown. And that will be revealed at 4:00 p.m. when we have another talk show. But since you have your sunglasses on, we'll do a photo session with the press. So maybe you should go down stage.

Maybe we can't.

If you can go to the center, we have [indiscernible] sign on the stage. So if you can move there. This is going to be our official photo for Toyota Gazoo Racing booth this year. And have your gloves on, sunglasses, all set to that position, please. Also look to the front and have that fighting pose like in boxing. Look to the right, please and your gloves up.

This is the official photo for everyone. It's going to be the official photo. In your press -- in the press releases, please use this photo. It's the official one. We're having a fight -- a serious fight. Well, there are so many people here and then the left side. So our serious fight is going to start here. Everyone, make sure you get a good shot.

And maybe you have to have that serious face. It's a fight.

Well, Nakajima-san, you look really good. Well, I can't say Nakajima-san, you're going to be called [ Giano ]. So Morizo versus [ Giano ]. So Toyota Gazoo racing booth presentation will end here. And from 4:00 p.m. this afternoon, we're going to have a talk show, and we're going to talk in more detail about this 3-round fight. So I hope you can come back to our booth. Thank you very much, everyone. [Statements in English on this transcript were spoken by an interpreter present on the live call.]