Section 6. New Growth Goal

Item 1. Resumption of Investment outside Japan

TMC managed to limit the red ink that followed the financial crisis to only a single fiscal year and turned profitable in fiscal year 2009 (ended March 2010). As fiscal year 2010 (ended March 2011) rolled in, TMC took many preparatory steps toward a new growth phase, for example resuming in quick succession the construction of plants outside Japan that had been put on hold since autumn 2008.

In China, TMC set the planned operation start for the new plant of Sichuan FAW Toyota Motor Co., Ltd. (SFTM), a joint venture company, in the first half of 2012, and full-scale construction began in April 2010. This removed the hold placed on the plant following its groundbreaking ceremony in October 2008. When completed, the plant will begin producing Corollas at the rate of more than 100,000 vehicles a year. In November 2010, in order to locally establish and strengthen a development system toward building cars for China, TMC established the Toyota Motor Engineering & Manufacturing (China) Co., Ltd. (TMEC) R&D Center in Changshu City, Jiangsu Province and began operation in April 2011.

Construction of the various buildings for TMEC, a research and development center that will be equipped with a state-of-the-art test course, began in October 2011, with completion of the major facilities scheduled for 2013. TMEC has already established a team for developing a hybrid system and will promote a project to launch a car equipped with a Chinese-made hybrid unit into the Chinese market around 2015.

In North America, TMC resumed construction in June 2010 of Toyota Motor Manufacturing Mississippi, Inc. (TMMMS), originally slated for production start in 2010, as TMC's eighth North American production site. The operation start date for TMMMS had previously been put on indefinite hold following the financial crisis. Following completion, a line-off ceremony, eagerly awaited by the local parties concerned, was held in November 2011 and Corolla production commenced with an annual production capacity of 150,000 vehicles.

In February 2012, TMC decided on plans to increase the production capacity of Toyota Motor Manufacturing Indiana, Inc. in the United States from 280,000 to 330,000 vehicles a year in the second half of 2013, expanding production of the Highlander and adding the Highlander Hybrid. With the intention of exporting some of these Highlanders to Australia and Russia, TMC also announced a plan to develop its U.S. production sites into export bases.

In Brazil, which is as important a market as China and India, TMC decided in July 2010 to build a new plant at Toyota do Brasil Ltda., and commenced construction in Sorocaba, Sao Paulo in September of the same year. The new plant is scheduled to begin producing a newly developed compact car at the rate of 70,000 vehicles a year in the second half of 2012. Some of these vehicles will be exported to other South American countries.

Meanwhile, for the Indian market, TMC has also been promoting the development of new models that are affordable yet maintain the quality level for which Toyota is known. In December 2010, TMC announced the Etios sedan, an entry-level family car that starting undergoing development in 2005, as the first of such models for India. Production of the Etios, which is equipped with a 1.5-liter gasoline engine, commenced the same month at the new Plant No. 2 built by Toyota Kirloskar Motors Private Ltd.

The Etios uses designs specifically developed for the Indian market in the air conditioner and other equipment and, through expanded local procurement of parts, TMC achieved a low-cost, high-quality vehicle that meets the needs of the market, with a base price of 96,000 Indian rupees (equivalent to roughly 900,000 yen at the exchange rate in effect at the time of announcement). In June 2011, TMC added the hatchback Etios Liva with a 1.2-liter engine to the series, and set a combined sales goal of 70,000 vehicles a year for the two models.

As part of its efforts to build a structure to support small-scale local production, TMC established a BR-KD Business Department in January 2010 as a BR (business reform) organization within its Middle East, Africa and Latin America Operations Group. As the first step, TMC announced in October 2010 the establishment of a local corporation in Egypt to support small-scale local production there.

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