Presentasi Toyota Kelompok 1_rsa

7/27/2019 Presentasi Toyota Kelompok 1_rsa

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- Kristian Harianja - Rizky Yulianto P.

- Oktawidya Intan - Ratna Nawang S.

- Putri Rizky D. - Vivi Agustin



OPERATING EXPOSURE

To what extent a company's future cashflow will be altered by exposure to changes

in the exchange rates combined with price

changes

http://www.businessdictionary.com/definition/company.html

http://www.businessdictionary.com/definition/cash-flow.html


http://www.businessdictionary.com/definition/exposure.html

http://www.businessdictionary.com/definition/changes.html

http://www.businessdictionary.com/definition/exchange-rate.html

http://www.businessdictionary.com/definition/labor-rate-price-variance.html

http://www.businessdictionary.com/definition/labor-rate-price-variance.html




http://www.businessdictionary.com/definition/changes.html

http://www.businessdictionary.com/definition/exposure.html




http://www.businessdictionary.com/definition/company.html



History

• 1937 : Toyota Motor Co., Ltd is established

• 1967 : Business partnership with Daihatsu Motor Co., Ltd begins

• 1974 : Toyota foundation is established

• 1982 : Toyota Motor Co., Ltd. and Toyota Motor Sales Co., Ltd. are merged into

Toyota Motor Corporation.

•1992 : Toyota Motor Manufacturing (United Kingdom) Ltd. begins production.

• : Turkey ?

• : Portugal ?

• 2000 : Sold 634,000 automobiles in 2000

• 2001 : over 60% of Toyota’s North American sales were locally-manufactured. In

2001 only 24% of the autos sold in Europe were manufactured in Europe

(including the U.K.), the remainder being imported from Japan. For fiscal2001 the unit reported operating losses of ¥9.897 billion ($82.5 million at

¥120/$).

• 2005 : TMEM expected significant growth in European sales, and was planning to

expand European manufacturing and sales to 800,000 units



Toyota Motor ’s European Currency

Operating Structure in 2001



Consolidated PerformanceHighlight 2005







Source : Annual Report Toyota 2013



Problem Analysis

– Toyota a leading global automobile manufacturer whose

stock is widely held in MFS portfolios

– Domiciled in Japan, but generates the largest amount of

sales in North America (making up 35% of group unit sales

in the fiscal year compared to 27% in Japan) followed byEurope for foreign market for Toyota

– Euro falling against the Japanese yen, would be mismatch

between its cost base (largely in Japan) and its export

sales to the Euro



Consolidated FinancialStatement



Problem Analysis

Toyota profits is negatively affected in two ways :

• when they attempted to align the prices of their vehicles sold

in the Europe with those prices being charged by the Detroit

‘big three

’manufacturers (despite higher costs due to thestrong yen);

• When they translates Euro profits back into yen at

disadvantageous exchange rate



CASE QUESTION



1. Why do you think Toyota had waited so

long to move much as its manufacturing for

European sales to Europe

Answer :

1. Automobile are complex and capital intensive industry. Building

new manufacturing facilities are very costly. Toyota has to do lots

of researches and investigations. It takes time to :

- Choose a country, city (location) and analyze its risk in

targeted country (Source: Damodaran, data year 2000)

Count ry

Long-Term

Rating

Ad j. Default

Spread

Total Ris k

Premium

Country Risk

Premium

Japan Aa1 60 6.11% 0.60%

Portugal A3 95 6.46% 0.95%

Turkey B1 450 10.01% 4.50%

United Kingdom Aaa 0 5.51% 0.00%












Answer (cont.) :

- Survey of market share in order to achieve targeted profit

and its sustainable growth






Answer (cont.) :

- Make forecast about the future cash flow, including required

ROI, NPV, IRR and payback period

- Must persuade both local government and Japanese

government which may take long time to process



1. Why do you think Toyota had waited so long

to move much as its manufacturing for

European sales to Europe (cont.)

Answer :

2. Toyota income statement may suffer from exchange rate

between Yen and Euro. Movement of manufacturing into

local and regional market may rise an issue of high tax rate

and expensive workforce payment including training cost andretaining labour

3. In terms of economic point of view, taking part of production

of out Japan may affect the average unit cost. Thus, building

an overseas branch may influence the balance in Japanese

market.



1. Why do you think Toyota had waited so long

to move much as its manufacturing for

European sales to Europe (cont.)

Answer :

4. Toyota need good reason to build manufacturing plant in a

region e.g. Sales performance

Reporting its highest-ever consolidated vehicle sales approx

979,000 units in fiscal 2005, Toyota extended its record-breakingrun in Europe to seven years and claimed almost 5% of the

market. Among Toyota brand vehicles, Yaris further reinforced its

position as flagship mass production model by besting its

previous sales record for the 6th consecutive years to pass

220,000 units. The success of Yaris could explain why the

automaker waited so long (source : Annual report 2005).



2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Japan\ 2163 1913 1872

Norh America 3098 2031 798

Europe 858 796 1327

Asia 979 1255 1284

Ohers 1139 1313 5281



2. If the British pound where join the European

Monetary Union would the problem be

resolved? How likely do you think this is?

Answer :

If British currency is converted to Euro, it will only eliminatethe currency risk between UK and Europe but not eliminatecurrency risk between Europe and Japan.





Recommendation•

Enters into short-term (three to six months) currency hedges in order to make internal planning easier

• Adopting operating and financing policies that offset anticipateforeign exchange exposures :

– Matching currency cash flows

– Risk – sharing agreements

–Back-to-back loans

– Currency swap

• Contract/hedging to local (Euro currency) vendor

• Recruit financial analyst

• SPOT option

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Presentasi Toyota Kelompok 1_rsa

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