Masahiro Yamamoto, Accounting Group Chief Officer

Last fiscal year, we had to revise our production plan downward many times. Even so, our production members and suppliers continued to put all their heart and soul into producing each car. We are sincerely grateful for that.

We have set this year’s production plan at 9.7 million units. We have to ensure safety and quality above all else as we produce each and every car. We made the plan with these basics in mind.

We are starting the year with this plan as our basis, although we may face unexpected changes in the future.

In formulating this plan, we included the expected impacts of the COVID-19 and chip supply situations, as well as other known factors.

I recently visited our supplier’s worksites and learned how they had a hard time dealing with sudden production decreases; they have to replace people or move them to other jobs, or there may be a surplus of parts with no place to put them.

If we could let them know our adjusted plans earlier, they would be able to lower the cycle time and continue working without stopping manufacturing lines. That way, they could also continue investing in personnel by using spare time on kaizen activities.

I believe that manufacturing genba (worksite) is the source of our improved profit structure. With that in mind, we want to continue our efforts internally and with suppliers.

Kenta Kon, Chief Financial Officer

We are facing an unprecedented level of material costs for the ongoing fiscal year. Last year’s 640 billion yen was the largest impact in our history, but this year’s 1.45 trillion yen is more than twice that.

We have a rule with our suppliers that, in principle, Toyota bears the brunt of excess materials costs. Based on that rule, we have estimated an impact on a global basis in light of current market prices.

We have to work together as a team with suppliers in dealing with the rising material costs. We need a collaborative effort to reduce the amount of materials used or replace them with less expensive materials.

Of course, as an automaker, we must develop products that are appealing to customers.

We cannot simply raise prices across the board. As a company, we have to enhance cost competitiveness.

We need to accelerate efforts to achieve our long-standing annual cost improvement of 300 billion yen more seriously than ever.

Jun Nagata, Chief Communication Officer

Toyota is a company that offers a full lineup of passenger and commercial vehicles on a global scale.

We plan and price various products while considering diverse customer needs and situations in each market.

Some customers can afford a little higher cost in response to this inflation, but there are many customers who depend on their cars as a means of daily transportation.

It is not easy to ask them to pay more just because we are facing surging material costs and inflation.

Our basic stance is that we want to set prices based on a detailed examination of each region/line-up and whether or not a price increase would be acceptable.

Also, Toyota has many long-selling cars like Crown, Corolla, and Hiace.

Many customers have a strong idea of their product quality and price levels after long years of loving these cars.

We carefully consider these expectations when planning a model change, and that is why a sudden price hike during a model life is not an easy option.

We will try our best to meet customer expectations through long-term cost improvement efforts, rather than trying to absorb the cost in a single year.

Masahiko Maeda, Chief Technology Officer

I feel that the BEV trend has been accelerating quite quickly. This is partly due to expanded product lineups and more choices that automakers now provide customers, as well as strict new environmental regulations, particularly in the U.S.

The U.S. is the first country to set such strict regulations. This will be one of the biggest factors for automakers in accelerating BEV efforts.

Customer expectations are rising as I hear the preliminary reviews for Lexus RZ and Toyota bZ4X are good.

With the positive market response and strict regulations, more information suggests that BEV demand is growing.

However, I believe BEVs still face many uncertainties, including the impact of surging material costs. Customers are extremely sensitive to price increases and the benefits of government subsidies. We need to carefully watch those factors in each region.