Bangalore-Chennai Corridor Development

1. Bangalore-Chennai Corridor Development Toyota Kirloskar Motor Private Ltd.

2. Toyota’s Business in India Vehicle 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% Export of Transmissions from TKAP to ASEAN (Source: TMC)

4. “Quality” Toyota Production System Toyota Way “Customer First” Toyota’s Business in IndiaMeeting growing demand in the auto industry • Products to meet customer demands • Quality backed by Distribution Logistics Rapid Market Growth in India CAMRY COROLLA INNOVA PRADO

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 Promotion of Primary Education though providing books and bags Toyota Safety Education Programme 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.

8. 3.50 Maharashtra 3.3 Rs trillion Nominal NSDP of Major States (Rs. Trillion) 3.00 2.50 2.00 Tamil Nadu 1.7 Rs trillion Gujarat 1.50 Karnataka 1.3 Rs trillion Rajasthan 1.00 Delhi Haryana 0.50 0.00 YR 2000 YR 2001 YR 2002 YR 2003 YR 2004 Economic Power Karnataka & Tamil Nadu • “Karnataka & Tamil Nadu” compete with the “Delhi-Mumbai” industrial zone for high growth rates (Source: Central Statistic Organization)

9. Delhi Haryana Rajasthan 34 Maharashtra Gujarat 26 26 22 21 2 1 Tamil-Nadu Karnataka Japanese Companies in India Karnataka & 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) (Source: as of 2006 「海外進出企業総覧2007」）

10. Importance of Karnataka & Tamil Nadu Auto Industry / Parts Revenue • Automotive parts industry aggregation equal to that in “Delhi-Mumbai” zone (Source: ACMA）

11. Auto ManufacturingKarnataka & Tamil Nadu AdditionalCapacity of1 million+ 2010 2006 Production capacity of automakers

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. Importance of Distribution Logistics Karnataka & Tamil Nadu • Strengthening transport infrastructure: Gateway: Seaport / Airport Emerging destinationin the region (ASEAN): Optimal Infrastructure Inland Transport: Roads / Railways • Logistics to support production and sales: Production: Parts/Material Transport Region-wide Operations System Optimal Strategy for Distribution Logistics Sales: Products Transport

14. Pakistan Taiwan GCC INDIA Thailand Vietnam Philippines Central/South America Malaysia Indonesia South Africa Parts Exports/Imports Oceania Vehicle Manufacturing Auto Parts Chennai as India’s Gateway to ASEAN TOYOTA

15. Road Infrastructure Karnataka & Tamil Nadu ■ Total Length: Paved/Unpaved Roads by State • Road conditions have been improving, but demand for more roads is rapidly increasing. (Source: 陸運・幹線道路局） (10K km)

16. Railway Infrastructure Karnataka & Tamil Nadu • Compared to the north and west, passenger kilometres and load tonne kilometres in the south are quite small.

17. Distribution Logistics IssuesScene: Chennai Port facilities • Port entrance, gate areas are in poor condition • Container terminal is congested

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 No wrap: No plastic cable: Wrap: Plastic cable tightens to hold the lever: Tightening time = 18.4 sec/engine

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.