Section 6. Strengthening Development and Sales Efforts in the Japanese Market

Item 2. Challenging the Market with New Brands and New Genres

Creating appealing dealers and brands

In parallel with VVC activities, TMC also reassessed its Japanese dealer network and, in conjunction with the introduction of a new corporate identity in August 1998, renamed its "Auto" channel dealers "Netz dealers". TMC made this change in order to actively appeal to young and female customers by launching innovative passenger cars, as well as to shift the majority of sales activities from visit-based sales to showroom sales. TMC completely redesigned the showrooms and also tried new methods of operating showrooms and carrying out sales, such as expanding business hours on holidays and evenings and having more cars available for test-driving.

In 1997, to help customers enjoy car use and ownership with strong individuality, TMC established Toyota Modellista, a new business enterprise specializing in parts and accessories for customization. Three corporate entities were established in Tokyo, Fukuoka, and Kobe, and they proceeded with product commercialization by working with TMC's Fleet Sales&Conversion Vehicle Division. These enterprises provided unique and original parts at a quality level available only from the Toyota brand and at reasonable prices. Subsequently, in response to market expansion and widening sales areas, the three companies were merged together to form the new Toyota Modellista International Corporation in 2002.

Outside Japan as well, Toyota worked on developing measures to help the Toyota brand attract young customers. As part of this initiative, in January 1999 TMC announced its intention to enter FIA Formula One World Championship racing (Formula One), the pinnacle of motorsports. Beginning in 2002, TMC entered Formula One with a works team that developed its engines and chassis internally, and came in sixth in its debut race.

In 2000, TMC made the decision to participate in the management of Fuji Speedway International Co., Ltd., sponsoring a wide range of motorsports events and also establishing educational facilities for promoting safe driving through actual driving practice.

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