1

Bangalore-Chennai Corridor Development

Toyota Kirloskar Motor Private Ltd.

2

Toyota’s Business in IndiaVehicle Production

Established TKM (Toyota Kirloskar Motor Pvt. Ltd), a joint company with local partner Kirloskar Group in 1997 to engage in local vehicle production

> Location: Bangalore, Karnataka

> Production Capacity: 63,000 per year

> Capital: 7 billion Rs (approx. 18 billion JPY)

> Investment: TMC: 89%, Kirloskar: 11%

> Sales Network: 78 sales outlets in 50 cities

Innova

3

Toyota’s Business in India Auto Parts

Established TKAP (Toyota Kirloskar Auto Parts Pvt. Ltd.) in 2002 to supply global quality auto parts at low prices> Location: Bangalore (near TKM)

> Production Capacity: 170k units per year (transmissions)

52k units per year (axles, propeller shafts)

> Capital: 3.375 billion Rs (approx. 8.8 billion JPY)

> Investment: TMC: 64%, Toyota Industries Corporation: 26%,

Kirloskar: 10%

Number of units Revenue (Rs million)

TMT (Thailand) 67,900 1,594.2UMWT (Malaysia) 6,970 163.7TMMIN (Indonesia) 2,600 61.2Others (S. Africa, Latin America) 97,026 2,278.6Total 174,496 4,097.7

2006

(Source: TMC)

Export of Transmissions from TKAP to ASEAN

4

Toyota’s Business in IndiaMeeting growing demand in the auto industry

Products to meet customer demands Quality backed by Distribution Logistics

Toyota WayToyota Way

Toyota Production SystemToyota Production System

““Quality”Quality”

““Customer First”Customer First”

COROLLA INNOVACAMRY

PRADO

Rapid Market Growth in India

5

Toyota’s Business in IndiaContribution to Society

Human Resources Development Opened Toyota Technical Training Institute (TTTI) in August 2007

to offer middle school graduates who don’t have the chance to go to high school the opportunity to learn specialised manufacturing skills> Location: Bangalore (on TKM grounds)

> Courses: Painting, welding, automobile assembly, mechatronics

> Number of students: Approx. 60 per year (total of approx. 180 for three academic years)

Toyota Technical Training Institute

6

Toyota’s Business in IndiaContribution to Society

Toyota Safety Education Programme

Promotion of Primary Education though providing books and bags

Building environmental awareness among school children

Construction of drinking water storage tanks for local community

7

India’s Industrial Structure

Indian economy has developed in proportion to the development in service industries.

Industrial Structure (%)

3118

2713 8 8

176 3 2 2 1

28

27

42

48

39 38

48

38 4030 28

22

4154

3140

53 54

35

56 5868 70

77

0%

20%

40%

60%

80%

100%

1990 2005 1900 2005 1990 2005 1990 2005 1990 2005 1990 2005

ServiceManufacturingAgriculture

India China Brazil Russia Japan USA

Source: World development Indicators 2007

8

Economic Power Karnataka & Tamil Nadu

“Karnataka & Tamil Nadu” compete with the “Delhi-Mumbai” industrial zone for high growth rates

(Source: Central Statistic Organization)

Nominal NSDP of Major States(Rs. Trillion)

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

YR 2000 YR 2001 YR 2002 YR 2003 YR 2004

Maharashtra 3.3 Rs trillion

Gujarat Karnataka Karnataka 1.3 Rs trillion 1.3 Rs trillion Rajasthan Delhi Haryana

Tamil Nadu Tamil Nadu 1.7 Rs trillion 1.7 Rs trillion

9

Japanese Companies in IndiaKarnataka & Tamil Nadu

Following the “Delhi-Mumbai” area, many Japanese companies have set up in Tamil-Nadu and Karnataka.

> Tamil-Nadu: 26 (2nd=)

> Karnataka: 21 (5th)

22

1

226

2126

34

Delhi

Haryana

Rajasthan

GujaratMaharashtra

Tamil-NaduKarnataka

(Source: as of 2006 「海外進出企業総覧 2007 」）

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Automotive parts industry aggregation equal to that in

“Delhi-Mumbai” zone

Importance of Karnataka & Tamil Nadu Auto Industry / Parts Revenue

1,738.9(105)

1,085.2(54)

92.3(18)

17.1(2)

Tamil Nadu

Haryana

Karnataka

Rajasthan

Maharashtra

Delhi

Gujarat

2,006.3(149)

2,265.7（81）

802.3(34)

Figures = Auto Parts Revenue (2004) (US$ million)

( ) = Number of Auto Parts Makes (2004)

1,738.9(105)

1,085.2(54)

92.3(18)

17.1(2)

Tamil Nadu

Haryana

Karnataka

Rajasthan

Maharashtra

Delhi

Gujarat

2,006.3(149)

2,265.7（81）

802.3(34)

Figures = Auto Parts Revenue (2004) (US$ million)

( ) = Number of Auto Parts Makes (2004)

1,738.9(105)

1,085.2(54)

92.3(18)

17.1(2)

Tamil Nadu

Haryana

Karnataka

Rajasthan

Maharashtra

Delhi

Gujarat

2,006.3(149)

2,265.7（81）

802.3(34)

Figures = Auto Parts Revenue (2004) (US$ million)

( ) = Number of Auto Parts Makes (2004)

(Source: ACMA）

11

Auto Manufacturing Karnataka & Tamil Nadu

Production capacity of automakers

2006 20102010

AdditionalAdditionalCapacity Capacity

ofof

1 million1 million ++

12

Characteristics of the auto industryMajor investments - significant growth benefits

Production operations require huge investments

Operations to generate economies of scale with related companies and supplier industries

Major contributor to economic growth & employment opportunities in the region and the country

13

Strengthening transport infrastructure:

Importance of Distribution Logistics Karnataka & Tamil Nadu

Optimal

Infrastructure

Optimal

Infrastructure

Region-wide

Operations

System

Region-wide

Operations

System

Gateway: Seaport / AirportSeaport / Airport

Gateway: Seaport / AirportSeaport / Airport

Inland Transport: Roads / RailwaysRoads / Railways

Inland Transport: Roads / RailwaysRoads / Railways

Production: Parts/Material

Transport

Production: Parts/Material

Transport

Sales: Products Transport

Sales: Products Transport

Emerging Emerging destinationdestinationin the region in the region (ASEAN):(ASEAN):

Emerging Emerging destinationdestinationin the region in the region (ASEAN):(ASEAN):

Optimal Optimal Strategy forStrategy forDistribution Distribution LogisticsLogistics

Optimal Optimal Strategy forStrategy forDistribution Distribution LogisticsLogistics

Logistics to support production and sales:

14

Chennai as India’s Gateway to ASEANTOYOTA

Vehicle Manufacturing

Auto Parts

Parts Exports/Imports

ThailandINDIAINDIA

Vietnam

Malaysia

Indonesia

Taiwan

Philippines

Oceania

Pakistan

GCC

South Africa

Central/South America

15

Road conditions have been improving, but demand for more roads is rapidly increasing.

Road InfrastructureKarnataka & Tamil Nadu

(10K km)(Source: 陸運・幹線道路局）

■ Total Length: Paved/Unpaved Roads by State

0 5 10 15 20 25 30

Rajasthan

Gujarat

Kerala

Karnataka

Madhya Pradesh

Tamil Nadu

Andhra Pradesh

Orissa

Uttar Pradesh

Maharashtra

Paved

Unpaved

16

Compared to the north and west, passenger kilometres and load tonne kilometres in the south are quite small.■Railway - Total Route Kilometres / Passenger Kilometres / Load Tonne Kilometres (2005)

Total route Passenger kilo Load tonne kilo(km) (thousands) (thousands)

Central Mumbai 3,832 88,046,676 33,421,006Eastern Kolkata 2,412 46,002,537 14,113,136East Central Hajipur 3,439 46,460,588 30,704,701East Coast Bhubaneshwar 2,431 9,885,555 39,964,327Northern New Delhi 6,910 87,863,015 39,273,645North Central Allahabad 3,080 40,852,947 44,167,304North Eastern Gorakhpur 3,402 30,095,866 8,533,958Northeast Frontier Maligaon 3,766 8,194,846 11,448,729North Western Jaipur 5,452 22,118,001 15,547,445Southern Chennai 5,210 46,609,165 14,824,333South Central Secunderabad 5,743 42,618,081 44,527,805South Eastern Kolkata 2,614 17,313,827 31,672,031South East Central Bilaspur 2,432 11,381,348 33,946,817South Western Hubli 3,111 14,716,703 11,591,346Western Mumbai 6,533 78,214,402 36,378,783West Central Japalpur 2,965 25,260,381 31,646,770Total 63,332 615,633,938 441,762,136

(Source: Indian Railways)

Zone Headquarter

Railway InfrastructureKarnataka & Tamil Nadu

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Port entrance, gate areas are in poor condition Container terminal is congested

Distribution Logistics IssuesScene: Chennai Port facilities

18

Distribution Logistics IssuesScene: Road conditions near Chennai Port

Heavily congested Very poor road conditions leading up to highways Extra care needed to protect the load

19

Distribution Logistics IssuesScene: KD-IMV engine export to India

Tightening time = 18.4 sec/engine

No wrap:

Wrap:

No plastic cable:

Plastic cable tightens to hold the lever:

20

Distribution Logistics IssuesScene: ER/SMOQR Corolla

21

Distribution Logistics IssuesScene: ER/SMOQR Corolla

22

Distribution Logistics IssuesScene: ER/SMOQR Corolla

23

Thank you.

Thank you. Thank you.