September 2013 Sales Conference Notes

September 2013 Sales Conference Call
Tuesday, Oct. 1, 2013

September 2013 Sales Conference Call (audio)

Toyota Motor Sales Vice President of Corporate Communications Mike Michels:

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

Speaking today will be:

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

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 review of our corporate and Toyota Division results in September.

Toyota Division Group Vice President and General Manager Bill Fay:

Thank you Mike…and thanks everyone for joining us today.

As we noted last month, September was expected to be a challenging month from a statistical standpoint, due to a couple of quirks in the calendar, that saw Labor Day sales fall into the August total – along with two fewer selling days this year compared with last September.

As a result,

Industry sales 1.138 million
Down 4.3 percent on a volume basis
First time in more than two years failed to post Y/Y monthly volume gain
- (June 2011)

But because there were two fewer selling days this year

(only time it happens in 2013)
(and five fewer than August)
Important to take a look at daily selling rate
- Better apples to apples comparison
Industry actually up 4.1 percent
Following what everyone agrees was an outstanding August

Yet another way to look at it…

Combine industry August/September sales
Volume up 7 percent
- same two months of last year

September SAAR 15.3 million

Moderate increase over the 14.9 million pace of a year ago

YTD industry sales +9-and-half percent

SAAR at 15.5 million
On track with our forecast for the year

Combined Toyota, Scion and Lexus sales

164,457
Down 4.3 percent on volume basis
But up 4 percent on a DSR basis

Combined TMS August and September total

Up about 10 percent
Outpacing the industry

For the Toyota Division

Sales of 144,935
Off 4.3 percent volume
Up 4 percent DSR
New models continue to perform especially well

September first full month for all-new 2014 Corolla

Off to great start
Sales of more than 23,000
- A little more than half 2014 models
Total up 1 percent on volume
Nearly 10 percent on DSR basis
Making it best-selling subcompact model

Early Corolla buyer information

Slightly more male
A little younger
Top-of-the line S model
- Accounted for nearly half of 2014 sales

Camry

Sales topped 30,000
- 9 consecutive month
- Pretty much on par with last year
  - (up 1.1 percent DSR)
Allowed Camry to continue to maintain its position as best-selling car in America

Avalon

Another car to show volume gains over last year
Sales 4,500+
Nearly triple year ago levels
Demand for the Avalon hybrid remains excellent
- Making up a quarter of all Avalon sales

Toyota Division Hybrid sales

While down from last year
Remain up 10 percent CYTD
Account for more than half of all hybrids sold in America

On the truck side

New RAV4 volume leader
Best September ever
Nearly 16,000 sold
+15.5 percent volume
25.5 percent DSR

Combined pickup truck sales

Topped 20,000
Both Tacoma and Tundra
- Showed DSR gains
- Came up a little short on the volume comparison

New Tundra

Began arriving at dealership
- One millionth truck build at San Antonio last month
Marketing launch now underway
- Continue through October

Looking Ahead To October

Remain optimistic
Expect industry volume to bounce back into the plus column
Both industry and economic fundamentals remain strong
Hope and expect the government shutdown to be short and have minimal impact on the industry

For the Industry
- New products continue to be well received
- Good financing available
- No abatement in pent-up demand

At Toyota

Focused on Corolla and Tundra launches
Along with series of regional programs featuring
- Low APRs
- Excellent lease rates

Thank you again for joining us today.

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

Lexus Group Vice President and General Manager Jeff Bracken:

Thank you Bill.

Lexus obviously faced the same challenges as the rest of industry in September regarding year-over-year comparisons.

Total sales of 19,522

Up 4.1 percent from last September on daily selling rate
Unadjusted volume down 4.2 percent
Several new models showed both volume and DSR gains

Aug/Sept comparison

Lexus up 10-and-a-half percent for the two months
Again, ahead industry 7 percent gain

YTD

Sales of more than 190,000
Up 11.6 percent through September

And no matter how you look at it, even quirks in the calendar couldn’t slow the pace of the new IS.

The IS

Still in the midst of its marketing launch
Sales jumped 42 percent
- (3,200)

IS F-sport demand remains especially strong

Account for nearly one-third of sales
Currently unable to meet demand

In fact, F-sport models remain hot across the Lexus lineup

Continuing to attract more male buyers
More younger buyers
And more new buyers to the Lexus brand

LS another new model that performed well in September

Sales up 36 percent on volume
Nearly 50 percent on a DSR basis
Up 54 percent for the year

Remains volume leader on the car side
Sales of nearly 5,000 units in September
- Hybrid models accounted for nearly a quarter of sales
Pushing sales past 50,000 for the year
- Up 44 percent

RX continues to sit atop the hot luxury SUV segment

Sales of 7,600 in September
8 percent volume growth
17 percent DSR increase
Up nearly 10 percent YTD

In conclusion, Lexus has historically performed well in the fourth quarter, and we expect that to be the case again this year.

IS launch activities will continue in full swing through October…while the re-designed GX will begin arriving at dealerships today, giving us another new model in the key luxury SUV market.

We have some of the hottest new vehicles in the industry in the ES, IS and RX, combined with a good inventory situation.

As a result, we expect history to repeat itself in 2013 with another strong Lexus finish.

Thank you very much for joining us today. Now I’d like to open up the call for questions.