July 2014 Sales Conference Notes

July 2014 Sales Conference Call
Friday, August 1, 2014

July 2014 Sales Conference Call (audio)

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

Speaking today will be:

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

A recording of the call will be available at Pressroom.Toyota.com about one hour after its conclusion and of course our business 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 July results.

Toyota Division Group Vice President and General Manager Bill Fay:

Thank you Amanda.

Hello everyone, and thank you for joining us today.

There was no letup in auto industry sales in July

Total sales of more than 1.4 million vehicles
- Up 9.2% from last year
- Best July results in eight years
  - Since 2006 (1.49 million)

The industry’s 6th straight month of Y/Y gains

Third straight month with sales of more than 1.4 million

Puts the SAAR

16.6 million for the month
- Up more than a million vehicles from last year (15.7)

July also a strong month for retail sales

Accounted for 88% of the total
Easily the best retail share so far this year

A strong retail month

Typically is good for Toyota, Lexus and Scion dealers
Outperformed the industry
With total sales of 215,802
Up 11.6%
And our best July in seven years
Lexus had its best July ever
And the RAV4 recorded an all-time record month
Helping total light truck sales set a new mark for July

As the combined total

Made Toyota the No. 1 retail manufacturer in July

Third straight month with sales of more than 200,000

First time we've done that in six years

For the Toyota Division

July sales of 188,469
- Are up 10.6 percent
Both passenger cars and light trucks showed good growth
- With car sales up 7 ½ percent
- And light trucks up nearly 15%
- At more 85,000, a new July record

The Toyota Division

Also repeated as the industry’s #1 retail brand
A position it has held every month this year

For passenger cars

It was once again our one-two combination of Camry and Corolla leading the way
Camry sales of nearly 40,000
- up 15%
Corolla sales of 30,800
- up 26%
Third straight month Corolla has topped the 30,000 mark

As a result

Camry remains the best-selling car in America
While the Corolla continues as the best-selling subcompact model

Toyota Division hybrids also had a solid month

Sales of more than 27,000 vehicles
Accounting for over half of all the hybrids sold in the U.S.
Results were especially good in California
- Where the Prius family had its best July ever

On the truck side…

As I mentioned
- it was record-setting month for the RAV4
- with sales of 26,800
- up 37%
Obviously the small crossover segment remains red-hot
- Could have sold more RAV4s if we had them

The launch of our midsize crossover, the Highlander

Continues to go very well
With sales of 11,350 in July
Up 4%
Highest total for the month since 2005
We finished the month with a 12-day supply
But we should see improvement in that area moving forward
As the $30 million investment in our Princeton, Ind. Plant to increase Highlander production started up in July

The 4Runner

Showed the biggest percentage increase in July
Up 65% at 6,600 units
And Sienna and Tundra also posted nice gains
- And Sienna was best-selling mini-van in July
As total pickup sales were on a par with last year

Finally for July

Toyota Certified Used Vehicles added another 31,000 units
To round out what was really an excellent month for the Toyota Division and its dealers

With the most recent economic indicators

Showing the recovery was even stronger in the second quarter than anyone expected
And with consumer confidence now at a seven-year high
And monthly jobless claims at near record low levels
There is every reason to believe the auto industry can maintain these levels in the months ahead

To keep our momentum going

Staging our nationwide Annual Clearance event in August
As we get ready for the arrival of the 2015 models
Currently have excellent across the board inventories
Further supported by our biggest vehicle wholesale month in nearly two years
And a wide range of available financing options
- Including 14 vehicles with 0% financing
And the TRD Tacoma
- The first of the TRD Pro Series models
- Also will begin arriving at dealerships this month
Just ahead of the TRD Pro Series Tundra and 4Runner
The new Yaris and of course the new Camry coming in September

Thank you again for joining us today and 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.

Hello everyone. Thanks for calling in today.

As Bill mentioned

Lexus dealers posted their best-ever July results
With sales of 27,333
Up 18.7%
As six of our eight models posted gains for the month
Our 10th straight month of Y/Y gains

We launched our Golden Opportunities national sales event in July

And consumers responded to a mix of hot new products and excellent financing opportunities

Overall luxury sales also outpaced the industry in July

Just as it has much of the year
In fact, according to Kelly Blue Book the luxury segment now accounts for nearly 25% of the industry’s growth so far this year

At Lexus

July car sales rose 15%
While luxury utility vehicles were up 23 ½ percent

It was one year ago

That the current generation IS began arriving at dealerships
And it continues to be one of the industry’s hottest products
With July sales up 25%
- And YTD sales nearly doubled last year’s level

The ES, CT and GS models

All showed continued strength in July
With ES up 4% at 6,300 units
GS up 16% for the month
And CT hybrid up more than 50%

Taking a look at our luxury utility vehicles

The RX had a big month
And continues to lead the key luxury SUV segment
With July sales of more than 9,600
- Up 14 ½ percent

The GX also had a strong month

As sales more than doubled year-ago totals

And Lexus Certified Pre-Owned
Posted another strong month with sales of 6,000 vehicles

Looking ahead

Even with our record July results
We’re in a good inventory position
As we closeout the summer selling season
With our Golden Opportunities campaign running through August
We’re also awaiting the arrival of two all-new models

NX 200t turbo and 300h hybrid entry level luxury crossovers
- Which will go oin sale in November
And the RC and RX F sport coupe
- That will go on sale later this year

So you can see

We believe we’re well positioned to take advantage of the continued strength of the overall market and especially the strong consumer demand in the luxury segment

Thank you for joining us today and now I’d like to open this up for any questions you may have.