October 2014 Sales Conference Notes

October 2014 Sales Conference Call (Audio Clip)

October 2014 Sales Conference Call
Monday, November 3, 2014

Good afternoon and thank you for joining us to review October 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 Hearn, Lexus Vice President of sales and dealer development

A recording of the call will be available at www.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 October results.

Toyota Division Group Vice President and General Manager Bill Fay:

Thank you Mike.

Hello everyone, and thank you for joining us today.

October

Was another excellent month for the auto industry
With sales of about 1,280,000 vehicles
Up 6% from last year
Best October in 10 years (2004)

We’re tracking the Seasonally Adjusted Annual Rate

At 16.5 million for the month
- More than a million units ahead of last year
Puts the industry on pace for 16.4 million sales this year

Stable economic conditions

Including rising consumer confidence and employment coupled with gas prices at four year lows continues to boost light truck sales
- Especially SUVs and Crossovers
And we saw that again last month

The other big industry news in October was the release of the annual Consumer Reports Reliability survey

Lexus and Toyota finished one-two

For the second consecutive year and it was the 6th straight year that either Lexus or Toyota finished in the top spot

The Scion xB, Lexus CT hybrid and ES hybrid

Topped the list of most reliable cars
The Tundra was the most reliable pickup truck
The Highlander shared the SUV top spot
And Lexus RX was the leading luxury SUV

That’s especially important

Because the reliability survey is one of the key third party research tools for tracking quality, dependability, reliability and value that customers turn to when buying a new vehicle

Now for Toyota, Lexus and Scion results in October

Sales of 180,580
Showed a 7% increase
On the strength of record October SUV sales
A great launch for the new Camry that helped push sales for the model up 14%
And the 12th straight month of Lexus year-over-year gains

For the Toyota Division

October sales of 157,225
Up 7 ½ percent from last year
Passenger car sales were up 3%
And light trucks rose 12 ½ percent

As a result

Toyota repeated as the industry’s Best-selling retail brand

The RAV4 and Highlander

Led our SUV results in October
As both set new records for the month

The RAV4 continues to be one of the industry’s hottest vehicles

With sales of 21,500
- Up 22 ½ percent
- And with more than 223,000 RAVs sold through October it has surpassed its total for all of last year

The Highlander

Added more than 12,000 units
Up 30%

The 4Runner posted the largest increase among SUVs

Jumping 38% for the month

Combined pickup truck sales

Also increased in October
And topped the 20,000
For the 8th straight month

The Camry was the big news on the passenger car side

As we sold more than 33,000
For the best Camry October total in seven years (2007)

The vast majority of those sold were 2014 models (80%)

As the new 2015 Camry began reaching dealerships in October and the marketing launch is just starting to ramp up

While the sample size is relatively small

One early indicator is the new top-of-line sports model
- The XSE
Is being well received with launch sales well ahead of our expectations

One thing hasn’t changed

Camry once again was the best-selling car in America

Corolla also had a big month

With 25,000 sales
Up 5 percent
And the top-selling compact car

And Toyota Division hybrid sales

Of nearly 17,500 vehicles
Accounted for about 65% of all industry hybrid sales

Finally

Sales of Toyota Certified Used Vehicles
Topped 30,000 vehicles for the month

Looking ahead

We’re anticipating a strong holiday selling season based on continued economic improvement along with stable interest rates and gas prices

Our inventory of 2015 Camry models

Will improve daily throughout the month and things really get started Thanksgiving week

Now I’d like to turn it over Steve Hearne for a look at Lexus October results.

Lexus Vice President of Sales and Dealer Development Steve Hearne:

Thank you Bill. And hello everyone.

October was a big month for Lexus

And not just because we completed one solid year of year-over-year gains as Bill mentioned

We also celebrated our 25th anniversary last month

And while much has changed since we sold that first LS 400
The results of the Consumer Reports Reliability survey
Indicate two things have remained consistent:
Our commitment to setting the standard for excellence in customer care and for building the finest vehicles in the world

For Lexus in October

We sold 23,355 vehicles
Up nearly 3%

Year-to-date sales

Have now topped 244,000
And are running 14% ahead of last year
The biggest increase of any major luxury manufacturer

In keeping with industry trends in October

Our luxury utility vehicles posted a 4% gain
With the RX sales exceeding 8,000
And GX sales up 30%

The IS continues to drive our passenger car growth

And was up 5 percent for the month
At 3,800 vehicles
Pushing total sales for the year to nearly 41,000
Up 60%
And more than we sold in all of last year

The launch of the CT hybrid

Recorded another excellent month in October
With sales up 37 percent

And the ES

Remains our passenger car volume leader
With sales of nearly 6,000
On a par with last year

October also was a record month for Lexus Certified Preowned Vehicles

Looking ahead

As we celebrated our 25th anniversary with dealers last month we shared with them a number of new products that will roll out in the months ahead
None created more excitement than the RC and RC F Coupes that will begin arriving at dealerships in November

While the IS took a major step

Toward adding a new level of performance and excitement to the Lexus lineup the coupes take it to a whole new level

Early third party tests

Indicate the RC F is a legitimate competitor for the BMW M4 and Audi RS 5
And I hope you’ll have an opportunity to see for yourself soon

The coupes will be followed in December

By the new NX entry level luxury crossover vehicles
That will be joining the fastest growing luxury segment

November and December

Are traditionally two of the best sales months of the year for Lexus
And in addition to the arrival of the RC coupes and NX crossovers we’ll also be launching our year-end sales program in time for the buying surge around Thanksgiving weekend
Offering a mixture of low interest rates and lease deals

Thank you for joining us today.

Now I’d like to open this up for any questions you may have.