September 2014 Sales Conference Notes

September 2014 Sales Conference Call
Wednesday, October 1, 2014

September 2014 Sales Conference Call (Audio Clip)

Good afternoon and thank you for joining us to review September sales results for Toyota, Scion and Lexus.

Our speakers today will be:

Bill Fay, Group Vice President and General Manager of the Toyota Division
Steve Hearne, Lexus Vice President of sales and dealer development

A recording of the call will be available at Pressroom.Toyota.com about one hour after its conclusion and of course our communications team also is available to field any additional questions you may have at (310) 468-5297.

Now I’d like to turn it over to Bill for a look at the September results.

Toyota Division Group Vice President and General Manager Bill Fay:
Thank you…

Hello everyone, and thank you for joining us today.

September auto industry sales

Will come in at about 1 million, 243,000 vehicles
Up 9.2% from last year on a volume basis

Puts the Seasonally Adjusted Annual Rate

At 16.4 million for the month
- Strongest September in 10 years (2004 16.5)
- A million units ahead of last year’s pace (15.4)
- And 7th straight month with a SAAR above 16 million

Combined with July and August

Third quarter industry results were the best since 2006

For Toyota, Lexus and Scion dealers

Who were coming off record August results
Sales of 167,279
Up 1.7% on a volume basis

Retail sales were especially strong

Up 8.2% for the month
And in-line with the overall industry increase

Fleet deliveries were down as planned

By about 60%
Accounting for just 4% of our mix
Primarily because of the transition to the new 2015 Camry

For the Toyota Division

Total September sales of 145,427
Were on a par with last year
And the strong retail performance helped Toyota repeat as the industry’s best-selling retail brand making it nine straight months

September was another big month

For compact SUVS and crossovers
Total SUV sales were up 35%
To more than 43,000 vehicles, a September record

The RAV4 continues to lead the way

And set a new September record as well
For its 6th straight record month
With sales of 22,000
An increase of 38%
Pushing RAV4 sales for the year past the 200,000 mark

Highlander sales

Came in at 10,500
And were up 22%

While 4Runner showed the biggest gain

Up 76%
At more than 5,600 units

Pickup truck sales

Were also up slightly for the month
Topping 20,000 vehicles

As total light truck sales broke a third quarter record dating back to 2006

For passenger cars

As I mentioned, it was a month of transition for us

We’ve had a great close out of the current generation Camry

Continued in September
With sales of more than 28,500
While that was down from last year as result of the reduction of fleet deliveries
Camry retail sales were actually up over 15%

Avalon also had a good month

Sales of 4,800
Up nearly 8%

Toyota Division hybrid sales

Topped 18,000
And when worldwide September hybrid sales are totaled
They should show Toyota has now sold more than 7 million hybrids around the world
An incredible accomplishment in little more than 15 years
- (Prius went on sale in ’97 in Japan; worldwide in 2000)

Finally for the month

Toyota Certified Used Vehicles
Set a new record
Up 7% at nearly 29,000 vehicles

As we move into the 4th quarter

The industry is right on pace to hit the 16.3 million sales total we forecast earlier this year and could even go a little higher

At Toyota

We’re shifting from sell-down to launch mode for the new Camry which has been redesigned from bumper-to-bumper
And we’ve just begun to ship the new model to dealers

The marketing launch is getting underway this week

Under the theme of “One Bold Choice Leads To Another”
And we’ll be supporting the launch at the same level we would as full model change

In addition to being the best-selling car in America

For 12 straight years
Camry also is the No. 1 choice
- Among multicultural buyers and for the first time we’ll have what we call a Total Market Campaign, or a common unified message for these diverse audiences

The campaign will focus

On the new XSE sports model which builds on the success of the SE
Adding 18 inch wheels and a turned suspension for added performance.

That about does it for the Toyota side of things and now I’d like to turn it over Steve Hearne for a look at Lexus.

Lexus Vice President of Sales and Dealer Development Steve Hearne:

Thank you Bill. And hello everyone.

After setting new monthly records in July and August

Lexus dealers responded with another great result in Sept.
Selling 21,852 vehicles
Up 12% from last year
Outperforming both the overall industry and the luxury segment in the process
For our 12th straight month of Y/Y gains
And our 7th consecutive month of double digit increases

September was a balanced month for us

While most of the industry September growth has come primarily in light trucks
Our car sales were up 16%
With luxury utility vehicles showing a 7% increase

It’s now been more than year

Since the new IS went on the market
And 12 month later it is still outperforming expectations
With sales up 13% in September
To more than 3,600 units

IS sales are up nearly 70% so far this year

As it continues to bring younger and new buyers into the Lexus family

The GS is another car that is showing good staying power

With sales up 29% for the month

While the new CT launch continues to build momentum

With sales up 35% in September

And ES remains the passenger car volume leader

With sales of more than 5,700 in September

Taking a look at our luxury utility lineup

RX was the volume leader at 7,450 units
While GX accounted for our luxury utility growth
- As sales more than doubled

Finally, Lexus Certified Pre-owned

Set a new record for the month of September
With total sales of about 6,200 vehicles

Looking ahead

It’s hard for us to hide our excitement over the addition of two new models to our lineup
With pre-launch activates for both vehicles starting to ramp up

First to arrive at dealerships in late November

Will be the RC and RC F sport coupes that are already receiving good media reviews
These coupes will build on the success the IS and GS have generated this past year
And should provide a more emotional connection with our customers

The NX entry-level luxury crossovers