The orientation of development .1 Niche strategy.1Niche strategy

TFSVNisestablishedtosupportToyotatoincreaseitssalesvolume,tohelpToyotadealertogain m o r e c u s t o m e r s , t o i m p r o v e T o y o t a m a r k e t s h a r e . T F S V N s h o u l d h a v e d o n e a n i c h e strategytofulfillthetargetatthebest.

3.2.1.1Salesperformance

Improvec u r r e n t p r o d u c t s :Equalmonthlyrepayment,Equalmonthlyprincipal,FixedR ate, Floating Rate

Launch new products to Vietnam

 Balloon repayment

 Principal Reduction

 Wholesales

TFSVNlicenseisrestrictedtoonlyindividuals,whichaccountforapproximately50%ofvehic les sales.ApproximatelyTFSVNobtainlicensetofinancecorporatecustomersofToyota up to 2014.

3.2.1.2Customer retention

EvidencessuggestthatVietnameselikelychoose to repay debts early.Identify goals in areas identified:

 Prepare methods to assess early prepayment rates andreasons

 Createandanalyzecustomerdatabaseforcustomerretentionactivitiesincooperation with TMV and Dealers

 Provide countermeasures to reasons of early termination

 Jointly work with TMV and Dealersto increase customer loyalty 3.2.1.3Dealer support

Retail product

Thef in an ce mar ke tis fragmentedwi th te ns of ba nk s providingl oan so nT oy ot asal e s.

The vast majority of sales are transacted incash

 Increaseeffectivenessofcreditdecisionprocessestoimprovecall- backtimeandabilitytocheckoutsidecitycenters.

 Adjust credit criteria to meet the marketchanges,flexiblecriteriatogetmoresales

 SupportandgetsupportfromallDealers

 Training dealership sales staff on F & I (Finance & Insurance) integration

 Introduce % incentive scheme for the dealership

 Study new methods to secure dealersales persons advocacy and referrals

 IntegrateTFSVNintodealeractivitiesthatstrengthenToyotaValueChain Wholesalesproduct

Withdemandexceedingsupply,dealershavenoopenlydisclosedrequirementforfun ding.E x p a n s i o n p l a n s f o r s a l e s a n d s e r v i c e facilitiestosecuregreaterallocationist h e is sue where funding is currently directed.

TMVpolicyiscashbeforedelivery.Thishascreatedafreestorageperiodfordealers th atdonotwishtoreceiveavehicle.TMVwishestodiscusswithTFSVNmethodstoimprovethecurrent situationa n d eliminatestorage,whichwillexceedlimitationswithincreasingproduction.

Dealerst h a t h a v e l a r g e p a r e n t c o m p a n i e s ( e . g . : T o y o t a T s u s h o , S u m i t o m o ) a n d s t a t e ownedcompanies(e.g.:Samco)havefundingprovidedthroughthegroup,orthepar entcompany makes the decision.

Dealerstypicallyadvisethattheydonotprovides e c u r i t y d i r e c t l y f o r t h e wholesalesf u n d i n g . Deeperinvestigationisneededtodetermineifothersourcesofsecurityaretakenaspart of awiderrelationship with the finance providers.

 Workw i t h T M V t o b r i n g e f f i c i e n c i e s a n d a l i g n m e n t t o p o l i c y o n v e h i c l e distributionwithinthenetwork

 Focus on supporting independent dealers

 ResolveissuesbetweenTFSVNriskrequirementsandmarketpracticeanddealer demands of unsecured lending

 Increase strategic link of wholesales to TMV activities 3.2.2Newproductslaunch

3.2.2.1Car loan to fleet customers

 CustomerinquiresthefleetsalesofficerofToyotadealerorTMVMarketingDivisionforfle etcarfinancingprograminordertoconcludehispurchaseincludingpaymentscheme.

Thefinancingp r o g r a m m i g h t o c c a s i o n a l l y c a t e r f o r customersi n t h e i r p u r c h a s i n g c a r s with brands other than Toyota.

 Unitsofcartodefineasfleetdealdefersbycountry.Minimumrequirementvariesfrom2pl us uni ts,orfrequencyofrepeatpurchaseatadealer.

 CustomermakestheApplicationforCarLoan,andsendstoTFSVN.

 TFSVNconductscustomer’screditstatusevaluationi n c l u d i n g r e f e r r a l t o t h e e x t e r n a l Credit Information Centre as necessary.

 Customer’sr e p a y m e n t o r r e g u l a r c o l l e c t i o n ofinstallmentwillbedonemainlythrough bank transfer and/or check.

 Customer’srequirementsforadditionalfinanceareregularlyreviewedtoensurefuturerequirem entsmeetspecificrequirement,whichcanbedependantonnumberofunitpurchasesorfrequen cyofrepeatpurchasesatadealer.

 Inc a s e o f d e l i n q u e n t a c c o u n t , i m m e d i a t e l y a f t e r t h e d u e d a t e T F S V N w i l l c o n t a c t t h e customerseveraltimesbyatelephonecallandmailasremindersfor aboutonemonth. FromsecondmonthafterthedelinquencyTFSVN willconductafa cetofacecontacttofacilitaterepaymentornegotiatereschedulingthepaymentanditstermsandco nditions.Insomecases,TFSVNshalldirectlyrepossessorputunderitscustodyallorsom eofthecollateralized vehicle if the contract between TFSVN and the customer allows doing so.

 Ifabovefacilitationand/

ornegotiationarenotfavorablysolved,TFSVNwillforeclosethecollateralandrepossesstheallor remainingunit(s)ofcollateralizedvehicletogetherwithc l a i m a g a i n s t t h e d e l i n q u e n t c u s t o m e r f o r delayinterestandrecoveryofdamageifany.

3.2.2.2Carloanforusedcars

 CustomerinquiresthesalesrepresentativeofToyotadealerusedcarshowroomforusedcar loaninordertoconcludehis purchase including payment scheme.

 Customer makes the Application for used car loan, and sends to TFSVN.

 TFSVNconductscustomer’screditstatus evaluation,aninspectionoftheusedcarto bepurchased and referral to the external Credit Information Centre as necessary.

 Ordinarilyofferedinterestrateisslightlyhigherandtenorisshorterthantheonesfora ne wcarloan.Thisisduetothefactthatcreditstatusofusedcarbuyerisrelativelylowerthan the new car buyer.

 Customer’srepaymentorregularcollectionofinstallmentwillbedonethroughbanktransfer,ca shhand to hand or remittancethrough collaborating bank(s), if any.

 Inc a s e o f d e l i n q u e n t a c c o u n t , i m m e d i a t e l y a f t e r t h e d u e d a t e T F S V N w i l l c o n t a c t t h e customerseveraltimesbyatelephonecallandmailasremindersfor aboutonemonth. FromsecondmonthafterthedelinquencyTFSVN willconductafa cetofacecontacttofacilitate repayment or negotiate rescheduling the payment and its terms and conditions.

 Ifabovefacilitationandnegotiationarenotfavorablysolved,TFSVNwillforeclosethecollater ala n d r e p o s s e s s t h e c o l l a t e r a l i z e d v e h i c l e t o g e t h e r w i t h c l a i m a g a i n s t t h e delinquent customer for delay interest and recovery of damage if any.

3.2.2.3Agency forinsurance

 Ordinarilycarinsuranceisoptionalincaseofcashbuyer,butcompulsorytocoverdamageof the car in case of financed purchase becausethecarispledgedwithafinancialinstitution as a collateral security during financed loan term.

 Inordertomeetcustomer’sneedsandrequirement,dealersandfinancialinstitutionshavecloseb usinessconnectionwithacollaboratingoralliedinsurancecompany,andtheyworkasbrokeragef orsuchinsurancecompanyfromtimetotime.

 Inordertoofferthebestcustomerservicetosecurecustomersatisfaction,mostofTFSC’soverse assub sid ia ri esh av est ro ng ti e-

up re la ti ons hi pw it hf am ou si nsu ra nc ec om pan yi n therespectivecountry,andthesu bsidiariesworkasinsurancecompany’sbrokerinmanycountries.

 ArrangementofcompulsorycarinsuranceforafinancedcariscommenceduponTFSVN’sapprov alofcustomer’sapplicationf o r c a r l o a n . I n s o m e c o u n t r y , i n s u r a n c e premium can be contained asapart of car loan.

 InsurancepolicywillbedeliveredtoacustomerthroughdealerorTFSVNwhile reg istrationcertificateofthefinancedcar is retained by TFSVN.

 Beforeexpiringdateofthecarinsurance,D e a l e r s o r T F S V N contacta customerf o r r e n e w a l o f t h e i n s u r a n c e .

3.2.3Implement low cost business model

 Assess office lease options and joint premiseswithTMVtolowerfixedrentalcosts

 BeginK a i z e n t r a i n i n g , a p h i l o s o p h y o f T o y o t a , a s a c o n t i n u o u s i m p r o v e m e n t . CommencingwiththeonlinematerialsaspartofteachingTFSVNandToyotac ultureto all employees. Increase culturalactivities to empower staff.

 Utilize freeware technology in appropriate ways

 Implement cost centre accounting to increase costawareness

 Review efficiency metrics with head count growth plans

 CIC and field investigation are conducted well 3.2.4Efforts for sustainable growth

AgainstBankCompetitionthroughenhancedservice,communicationandproduc tofferings.

 Implementmarketingactivitieswithspecificandpracticalcampaigns,tiedwithTM V activities

 Increase effective acquisition propositions in suitable distribution channels

 Developnewproducts,servicesandcommunicationtomeetToyotacustomerrequire ments

 Continue and enhance the followings

What Detail Rationale

Jointcampaig ns

Advertising Togetherw i t h T M V t o b u i l d u p a n d a d v e r t i s e Toyota products

Communication BuildToyotavaluechainandcustomerawareness ofToyota(brands,cars,financial products) Owninitiative

s

Brand Developt

raining

brand guidelines, attributes and Internet site Online presence linked with dealers

Showroom presence

Dealership commission Pay dealership for successful referrals Salesman reward program Rewardsalespersons referrals

TFSVN staff in dealership Closercommunicationwithsalespersonsand

What Detail Rationale customers

Financesalescorner AttractcustomerstoToyotaofferingsandabilityto find out their information

Market segmentation

Finance customer Maximize current individual database Attract new individual customers

Insurance Cooperationwithinsurerstogivecustomerand dealer improved service at discounted Dealer customer Studyviabilityofjoiningretailperformancetowholes

ales rates By creating new business opportunities

 Fleet

 Used vehicles

 Insurance

 Other products (Hino, Daihatsu, Forklift) Retail product

 Obtainalicense to finance Corporate customers

 Prepare used vehicle finance in cooperation with TMV Wholesalesproduct

 Study non-vehicle secured wholesales stock lending

 Strengthen strategic link ofwholesales with TMV activities Insurance&Warranty

 Reviewthepreferredlistofinsurancecompaniesyearly

 DevelopToyotabrandedinsuranceandextendedwarrantyproductsincoopera tion with TMV, Dealers and partner insurers

 Seekincreasedrangeofinsuranceproducts into panel insurers scope

 Study dealership insurance requirements Hino, Daihatsu & Forklift

 Study and develop Hino business and financerequirementswithdistributor

 StudyanddevelopLexusbusinessandfinancerequirementswithTMV

Pricing methods

- Implement rate subvention campaigns with TMV

- Implementb u n d l e d p r o d u c t c a m p a i g n s w i t h T M V , D e a l e r s a n d I n s u r a n c e companies

- Study fees and chargesincome sources

- Developdealerprofitabilitymodelsforusewithretailandwholesalespr ic in g an d de ale r ma na ge me nt r ep or ti ng

- Developservicestosupportfinanceproductstobringnew incomechann eland cross sell opportunities

Funding methods

 Study effective investment methods for cashreserves

 TFSVNconsiderandmaintainanappropriateamountofcashreservesa ndliquidshort-

terminvestmentsbasedonthebusinessplanandensuretheliquidation for operations

 Develop credit line facilities from foreign and local banks

 Studyl o c a l r e q u i r e m e n t s a n d m a r k e t d e v e l o p m e n t f o r c o m m e r c i a l p a p e r and bonds

 CPprogramback-

uprequirementshouldbesetandadheredtoinaccordancewithlocalregulationsan dratingagencyrequirements

 DevelopfundingdiversityinlinewithVietnam infrastructure growth

 Bank borrowings Bank relationships

Thenumber,qualityo f bankrelationships,bankcapacityandbankcreditratingshouldbec o n s i d e r e d i n j u d g i n g b a n k borrowingcapacity

Diversificationincludesfundingsourceandmarketinvestors.TFSVNshouldpursuecost-effective diversification includingaccess to the local capital markets

3.2.5ShorttermandMid-longtermplan

Current situation Short term Mid-Long Term (Up to FY 2014) Support

ToyotaSalesTFSVNlicense isrestrictedto only

Individuals

Launch key market products:

 Equal Monthly Repayment

&Principal

 FixedRate&FloatingRate

 Obtain license to financeCorporate customers of Toyota

Efforts for Sustainable Growth

Access secure funding

 Develop credit line facilities

 StudylocaldevelopmentforSwaps, CommercialPaperandBonds

 Developfundingdiversityinlinewith Vietnaminfrastructuregrowth

DevelopHumanResourcesE xpertise in

financialservices

 Eachstaffmemberwillhaveadeve lopment plan

 Develop sales team

 Crosst r a i n i n g f o r b a c k u p a n d rotation

 Involve key staff in globalfunctional Risk

ManagementStrengthena warenessandapplication

 Undertaker i s k m a n a g e m e n t capabilityassessmentanddetermi nerisk-controlgaps

 Commencethecaptureofdetail sfort h e d e v e l o p m e n t o f a b a s i c credit analytics scorecard

 Studyqualitativeassessmentforcre dit provisioning

 Implementcorrectivea c t i o n s wh ereriskcontrolgapsareidentified

 Implementqualitativecreditriskpro visioning methodology