July 2013 Sales Conference Notes

July 2013 Sales Conference Call
Thursday, August 1, 2013

July 2013 Sales Conference Call (audio clip)

Toyota Motor Sales Vice President of Corporate Communications Mike Michels:

Hello everyone and thank you for joining us to review Toyota’s July sales results.

Speaking today will be:

Bill Fay, Toyota Division Group Vice President and General Manager
And Jeff Bracken, Group Vice President and General Manager of Lexus

Following the call, our communications team will be available to field any additional questions you may have.

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

Toyota Division Group Vice President and General Manager Bill Fay:

Thank you…and thanks everyone for joining us today.

The industry strength we saw in June carried into July

Sales of about 1.3 million
Up 14 percent from last year on volume basis
Best July in seven years (2006)

SAAR in the mid-15 million range
YTD SAAR now stands at 15.4

July typically one of the better retail months

Case again this year
Retail sales accounting for nearly 90 percent of total
- And virtually all of the month’s increase
Continues to be driven by:
- Consumer confidence
- Pent-up demand
- New products
- Excellent financing options

A strong industry retail month

Typically translates into a strong month for Toyota, Lexus and Scion dealers
True again in July

Total sales of 193,394

Up more than 17 percent from last year
Outperforming the industry

For the Toyota Division

Started the month with a focus on Camry and the Prius Family
Along with sell-down for Corolla and Tundra
- In preparation for new models coming later this month
Results indicate that focus paid big dividends

Toyota Division

Sales of 170,363
Up 16.2 percent from last year
Toyota #1 retail brand in July
- Fleet just 4.5 percent of mix

Camry

Set the pace with an excellent month
Sales of nearly 35,000
- Up 16 percent
Best-selling car in America

Prius Family

Showed an even larger percentage increase
Up 40 percent
To 23,300 units
Best July ever for Prius

Pushed Toyota Division hybrid sales

Up 40 percent
Accounting for more than 60 percent of all industry hybrid sales

New Avalon

Continued its run of triple digit increases
Sales more than doubled
Second best July ever

Finally on the car side

Corolla
One of the smoother sell-downs I can remember
sold nearly 24,500
+ 3.5 percent
+ 4-and-half percent for the year

Truck results
RAV4 volume leader

More than 19,500 units
Up 28 percent
Best July ever
6th straight record-setting month

Sienna topped 10,500

Up 10 percent

Highlander

Also sold more 10,000
Up 2 percent for the month and nearly 7 percent for the year
In July announced production expansion
- Toyota Motor Manufacturing Indiana
Another 15,000 units
In addition to a previously announced 50,000 unit expansion already slated for this fall

Pickup sales up 15 and-a-half percent

Tacoma +22 percent
Tundra +7 percent

Toyota Certified Used Vehicles

Continue to roll along
7th straight record-setting month
More than 32,500

Next up

August marks end of the model year
And our annual nationwide clearance sale
With two new vehicles on the horizon
- Corolla and Tundra
- Sell-down especially important
- Going very well
Series of APRs
Zero percent on 7 models
- Including Corolla and Tundra
Wide range of low lease rates

Able to offer these outstanding financing options

In part, due to strong residual values of our products
In fact, last month
- Kelly Blue Book named Toyota top brand for residual value
  - Third time in the last four years
Also named Lexus the top luxury brand

Finally

Production began this week for the new Corolla and Tundra
- Couldn’t come at a better time
- Both vehicles in relatively short supply
- Pulling start of sales forward to later this month
- As soon as we can get them from the factories

Now I’d like to turn this over to Jeff Bracken for a look at the Lexus results.

Lexus Group Vice President and General Manager Jeff Bracken:

Thank you Bill.

The Lexus July story centers around the all-new IS.

Went on sale last weekend in June

Got off to great start
Carried through July

Thanks to a big boost from the IS

Total Lexus sales up 25.5 percent from last July on volume basis
23,031
Third straight month above 21,000
Mainly the result of a 37.5 percent jump in car sales

The IS

Easily had its best month of the year
- Still building inventory
Up 60 percent
To more than 3,600
More than doubling last month’s results

The ES was even stronger

Sales up 62 percent

LS also posted a good month

Sales up 23 percent

In the luxury SUV segment, RX continues to lead the way

Sales of 8,400
Up 15 percent

Lexus Certified Pre-Owned

Also strong showing
Fifth straight record-setting month

Taking a look at some early IS highlights

Buyers were drawn by
- The new look
- Added technology
- Especially the driving dynamics of the new car

About half are new to the Lexus family

About two-thirds are male
Average age of 42
- lowest of any luxury model
May be an indication why driving dynamics are so important

Because of the initial response to the new car, along with the continued hot pace being set by the ES, LS and RX, and the fact our historically best months of the year are still ahead of us, we’ve decided to move our sales target for the year up slightly, from about 260,000 units, closer to 270,000.

With the luxury market showing steady growth and our new products performing so well, we felt now was the right time to challenge ourselves in the coming months.

August always a good sales month

We expect it to be again this year
- Started our Golden Opportunity Sales Event
  - close out 2013 models
- Launch the 2014 lineup
- We’ll focus on performance
- And hybrid lineup
  - Accounts for 65 percent of all luxury hybrid sales

Finally, IS launch will continue to build momentum in August