EMBA/CM02 BADM 423

Toyota Corolla

• Terry Brewer

• Diane Buckner

• Ted Buckner

• John Fernandez

• Tim Harclerode

EMBA/CM02 BADM 423

Notes on Toyota

• Largest carmaker in Japan

• Number 4 in the world (behind GM, Ford, and Chrysler)

• Producer of cars, trucks, and SUVs

EMBA/CM02 BADM 423

Toyota Corolla

• Introduced in 1968

• Over 20 million sold worldwide

• Over 10 million sold in the US

EMBA/CM02 BADM 423

The Corolla Line

• Base

• DX

• Wagon (introduced Yr3/Q2)

EMBA/CM02 BADM 423

The Press Says:

“Corolla is one of the world’s best little sedans and a clear BEST BUY. It’s not the cheapest sub-compact around, but resale values are high, and Toyota’s reliability record is unsurpassed.”

’99 Consumer Guide

EMBA/CM02 BADM 423

Customers

• Commuters

• New Families

• Traditionals

EMBA/CM02 BADM 423

Decision #1 for Y2/Q2

• Production 52,200 units

• Projected Sales 57,200 units

• Finance Rate 7.9%

• Dealer Incentive 250

EMBA/CM02 BADM 423

Results Y2/Q2

• Actual Sales 56,190 units

• Unit Share 8.8%

• Net Contribution $122.7 million

EMBA/CM02 BADM 423

Decision #2 for Y2/Q3

• Introduced Safety Upgrade

• Production 53,000 units

• Projected Sales 61,000 units

• Finance Rate 1.9%

or

Rebate $25

EMBA/CM02 BADM 423

Results Y2/Q3

• Actual Sales 68,320 units

• Unit Share 10.8%

• Net Contribution $206.7 million

EMBA/CM02 BADM 423

Decision #3 for Y2/Q4

• Production 53,000 units

• Projected Sales 58,000 units

• Finance Rate 1.9%

or

Rebate $25

EMBA/CM02 BADM 423

Results Y2/Q4

• Actual Sales 49,600 units

• Unit Share 8.0%

• Net Contribution $43 million

EMBA/CM02 BADM 423

Decision #4 for Y3/Q1

• Production 48,000 units• Projected Sales 56,000 units• Finance Rate 1.9%

or

Rebate $1,250 (on Base)

$ 25 (on DX)

EMBA/CM02 BADM 423

Results Y3/Q1

• Actual Sales 56,369 units

• Unit Share 9.1%

• Net Contribution $135.4 million

EMBA/CM02 BADM 423

Decision #5 for Y3/Q2• Introduced Wagon• Production 59,000 units• Projected Sales 62,000 units• Finance Rate 1.9%

orRebate $ 750 (on Base)

$ 25 (on DX)$1500 (on

Wagon)

EMBA/CM02 BADM 423

Results Y3/Q2

• Actual Sales 53,261 units

• Unit Share 8.8%

• Net Contribution $102.6 million

EMBA/CM02 BADM 423

Cumulative Results Y2/Q2 - Y3/Q2

• Unit Sales 283,740

• Net Contribution $610.4 million

EMBA/CM02 BADM 423

Contribution

EMBA/CM02 BADM 423

Economic Indicators

EMBA/CM02 BADM 423

Net Contribution vs. Total Small Car Sales

EMBA/CM02 BADM 423

Lessons Learned• Be conservative with regard to economic

forecasts• Try to distinguish yourself from the

competition• Never lose track of your target customers• Be first with an innovation or be better• A small return on sales is better than lost

sales

EMBA/CM02 BADM 423

Lessons Learned (cont.)

Unless you put yourself completely out of business, there’s

always next quarter!

EMBA/CM02 BADM 423

Thank You

Questions?