Presentasi Toyota Kelompok 1_rsa
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Transcript of 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
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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
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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
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Toyota Motor ’s European Currency
Operating Structure in 2001
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Consolidated PerformanceHighlight 2005
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Consolidated PerformanceHighlight 2013
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Consolidated PerformanceHighlight 2013
Source : Annual Report Toyota 2013
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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
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Consolidated FinancialStatement
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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
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CASE QUESTION
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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%
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1. Why do you think Toyota had waited so
long to move much as its manufacturing for
European sales to Europe
Answer (cont.) :
- Survey of market share in order to achieve targeted profit
and its sustainable growth
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1. Why do you think Toyota had waited so
long to move much as its manufacturing for
European sales to Europe
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
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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.
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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).
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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
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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.
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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