Presentasi Toyota Kelompok 1

To what extent a company's  future cash flow will be altered by exposure to changes in the exchange rates  combined with price changes

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Toyota a leading global automobile manufacturer whose stock is widely held in MFS portfolios

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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 by Europe

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Euro weaken versus the Japanese yen, would be mismatch between its cost base (largely in Japan) and its export sales to the Euro

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 the strong yen);

•

When they translates Euro profits back into yen at disadvantageous exchange rate

1. Why do you think Toyota had waited so long to move much as its manufacturing for European sales to Europe  Answer :  Automobile are complex and capital intensive industry. Making new manufacturing facilities are costly. Therefore, Toyota took time to analyze : -Country risk in targeted country -Survey in market share and location in order to achieve targeted profit and its sustainable growth -Investment financial analysis including required payback period, ROI, NPV, IRR

2002

2010

2011

2012

Japan\

2163

1913

1872

Norh America

3098

2031

798

Europe

858

796

1327

 Asia

979

1255

1284

1139

1313

5281

Ohers

2003

2004

2005

2006

2007

2008

2009

2013

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 eliminate the currency risk between UK and Europe but not eliminate currency risk between Europe and Japan.

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Enters into short-term (three to six months) currency hedges in order to make internal planning easier  Adopting operating and financing policies that offset anticipate foreign exchange exposures :  –  Matching currency cash flows  – Risk  – sharing agreements  – Back-to-back loans  – Currency swap Contract/hedging to local (Euro currency) vendor • Recruit analyst finance • SPOT option •