M i d - Te r m B u s i n e s s P l a n(FY2016 through FY2018)

May 12, 2015

Isuzu Motors Limited

Long-Term Review
Isuzu Motors Limited at first survived and then thrived through more than 10 years of business turnaround and theaftermath of the global financial crisis by rigorous streamlining and boosting the efficiency of operations. Emerging out ofthese difficult times as a leaner and stronger organization, Isuzu initiated various projects for renewed growth in the“Previous Mid-Term Business Plan”.
Low Performance

Turnaround and Aftermath of GFCRestructuring/Asset reduction
Reduction
Further boost business efficiency

2,500(100Mil Yen)

2,000

GlobalFinancial
CrisisEast Japan
Earthquake &Tsunami

Shift to Growth Strategy

Previous
MTBP

New MTBP・Global 3+2 core business organization
25,000・Participate in distribution business・Enhance after-sales business(100Mil Yen)
20,0001,500

15,0001,000

10,000

500

5,000

00
'96/3 '97/3 '98/3 '99/3 00/3 '01/3 '02/3 '03/3 '04/3 '05/3 '06/3 '07/3 '08/3 '09/3 '10/3 '11/3 '12/3 '13/3 '14/3 '15/3 '16/3 '17/3 '18/3(500)

Sales: Line graph (right) OP: bar graph (left)(5,000)1

Previous “Mid-Term Business Plan” Achievements (released in ’11)
Isuzu established the organizations, footprints and infrastructure outlined in the plan, while profit significantly exceeded targets.
The company also initiated greater involvement in the distribution business and enhancement of the after-sales business.
Establish 3+2 Engineering/Purchasing/Manufacturing Core Business Organizations
Engineering/
Purchasing/Mfg

Japan
CV base for advanced
countries

ASEAN
CV base foremerging countries

China (Qingling)
・Develop HD CV・ Built new plant in Indonesia
CV support base・ Set up IGCE in Thailand (eng.)- Began CV development for・ Set up IQAC/IQEC (for development & sourcing)
emerging countries- Started HD CV development in QL

Distribution

Greater Isuzu Involvement(S. Africa, ME, C. America)

Russia, South Africa, UK, Italy, etc.
Merged/consolidated dealers in Japan.
(100 Mil. Yen)

14/3 targets

Total Sales
Operating Profit
Operating Profit Ratio＊Abbr

CV: Commercial Vehicle

LCV: Light Commercial Vehicle

JV: Joint Venture

India/China (Jiangxi)
LCV support base・ Gateway plant SOP・ Launched new D- MAX/mu-X

・ Set up Isuzu Motors India (IMI)・ Set up JV with Jiangxi (JIM/JIE)

Enhancement of After-Sales Business

Sales support: Indonesia/Malaysia/ China, etc.
Closer to market: Set up representative offices
Increased Isuzu stake:ThailandLCV base

Japan ・ Set up retail financial service (ILS)・ Established Used/Remanufacturing company (IRS)
Overseas ・ Built After-Sales Centers (ME/Latin America)

18,50014/3 results
17,60915/3 results
18,794

1,300
7.0%

1,742
9.9%

1,711
9.1%
2

Background to New “Mid-Term Business Plan”
The ability to deliver optimal “products and after-sales experiences” for each and every customer
defines the success of the commercial vehicle brand.
In the “Previous Mid-Term Business Plan”

We pushed for various projects and programs in a shift to growth strategy.
As a result, we exceeded profit targets. However, we believe we can continue to evolvethe initiatives undertaken in the previous MTBP.

Our new focus is:

In addition to our established “Engineering, Purchasing and ManufacturingOperations”, we will focus on “Isuzu Involvement in the Distribution Business”
and “Enhancement of the After-Sales Business” in order to strongly establish“Operations to Minimize Downtime”.
To implement this new focus the new “Mid-Term Business Plan” sets out

Six initiatives under the cycle of two wheels of “Engineering, Purchasing andManufacturing” and “Operations to Minimize Downtime”
to ensure they seamlessly turn to drive Isuzu’s future growth.
3

Six Initiatives

In “Engineering, Purchasing andManufacturing operations”
1. Push for global 3+2 corebusiness organizations.

In “Operations to Minimize Downtime”

In addition

2. Boost product portfolio andtechnology.

5. Link the two operations.

6. Lay the corporate
foundation in support of
the next generation.

3. Expand business in emerging
countries while refining the businessmodel for advanced nations.
4. Move the marketing function closer
to markets.

In driving the above initiatives, we always bear in mind：“Get closer to our customer in each market”
By carrying out these initiatives,

Isuzu aims to be a player with a global presence, genuinely needed by customers.
4

Towards Realizing Our Corporate Vision
In an effort to realize our corporate vision, Isuzu will complete the tasks set out in the new Mid-Term business Plan:
Building a two wheel-model where the two operations are closely linked and seamlessly run like two wheels.
Corporate Vision: Isuzu will always mean the best:
A leader in transportation, commercial vehicles and diesel engines, supporting our customers and respecting the environment.
Engineering sourcing and mfg. to deliver products & technology

Minimize downtime throughout vehicle life

Establish the cycle of two wheel operations,turning seamlessly.

TrustManufacturing Functions

ShareholdersEngSourcingContribute

After-Sales

Mfg.

Sales

Society

生産
After-Sales

ReturnCo-exist

Utilize outside resources

Isuzu to drive the initiative

Achieve MTBP tasks.
（The six initiatives）
1. Complete 3+2 set-up
2. Boost product lineup/technology
5. Link the two operations
6. Lay foundations for the next
generation

3. Expand business in emerging countries/
refine business model for others
4. Move marketing closer to markets

51. Push for global 3+2 core business organizations
To complete the global 3+2 core business organization, Isuzu will further set up and enhance its strategically located footprints.
These activities will create the infrastructure to enable us to deliver optimal products that cater to local markets.
Planning/Engineering base

Sourcing base

Manufacturing base

Expand sourcing network/regions.

Japan

ASEAN

Thailand

China

India

CV
(advanced mkt)

ISZJ

ISZJ

ISZJ

IMCT/IAMI

CV

CV

IGCE

IGCE/IMCT(emerging mkt)

(Enhance functions)(Enhance functions)

LCV

ITA

IMCT

IMCT

LCV

QL

QL

Chinese CV

JIM

JIM

Chinese LCV

IEBCI

IMI

LCV

(Set up/enhance functions)CV(emerging mkt)(emerging mkt)6

2. Boost product portfolio and technology
Expand and improve the product portfolio to meet the specific needs of different markets, and bolster technology which
underpins the portfolio expansion.
Actively utilize limited resources and effectively leverage partnerships through win-win collaborations when outside support
is required.
TechnologyProduct

Focus Points

Environment

・ Highly efficient DE
・ Actions for energy shift

Increase the lineup by introducing emerging market models
from LCV to HD truck

Safety/comfort・ Improve safe driving
・ Reduce burden on driver

Performance upgrade and downsizing of DE from low to highdisplacement models

Minimize
downtime

・ Advanced IT-enabled
failure prevention system

Launch models with advanced technologies foradvanced countries

Tie-up with partners

Leverage partnership with different industries
and/or academia
FujitsuGov. project/industry/academia

LCV with much incommon with PC
GM

Successful tie-up for HD truck for which Isuzu
a bus in Japan
vol. alone is limited
Hino

Possiblecollaboration

7

3. Expand business in emerging countries while refining thebusiness model for advanced nations
Build and enhance comprehensive after-sales arrangements in keeping with different market characteristics,
which will also be strongly profitable.

AdvancedEmerging（Japan, US）（Thailand/ME/S. Africa） （ASEAN/Africa） （Central western Indochina）

Based on the platform*1 built under the previous MTBP & IT

Set up integrated marketing/sales system.

Minimize downtime through a one-stop-shop setup(new veh. parts, repairs, used veh. retail financier)Use data to support minimizing down time andimprove the efficiency of parts/service operations

Evolve to customized marketing
Customer’s
oper. status

BigＤＡＴＡ

Customer’s
Biz status

Create set-ups so that service and parts are available for a quick fix.
・ Add ASC (After-Sales Center).
・ Build TSF (Truck Service Factory) to cover wider area.
・ Build “Training Center” to train local mechanics in the Philippines.
・ Local dealer staff plus field engineers to contact customers.
‐ More than 100 staff from the Isuzu Group to be mobilized as field engineers.

New

Completed
Central America
ASC

OceaniaASC

QL
4S

AfricaASC

Middle East
ASC

South AmericaASC

Indochina
TSF

AfricaTSF

ASEANASC

Link maintenance lease, Mimamoi*2, DTU (Data Transfer Unit)

Manufacturing ServiceTraining Center in Japan

Mechanic Training Center inthe Philippines(to train & dispatch mechanics)＊1 ISUZU MOTORS SALES LTD, merged dealers, Isuzu financing service, others in Group＊2 Advanced telematics

84. Move marketing function closer to markets
Move to ASEAN the manufacturer’s marketing function needed to better collect business /market info. for quick actions. Inaddition, increase Isuzu’s involvement in distributor businesses to shorten the distance between markets and the whole Isuzu
Group.

Manufacturer’smarketing

IMIT - Thailand

ISZJ - JapanLCV

Advanced CV/Overseas CV
Raise stake

IMA – Singapore/Thailand

ASEAN CVMove functionsJapan
ASEAN, Asia

More Isuzu involvement inIndonesia, Vietnam,Malaysia, the Philippines
Businessarrangements

Isuzu Indochina operations

Distribution integration(ISUZU MOTORS SALES LTD etc.)

US
Set up After-Sales support center

China
Mexico/Latin America

Africa, the Middle East

Greater support for
QL4S outlets

Consolidate Isuzu Motors Mexico

Enhance Isuzu Middle East
functionsStart Jiangxi Isuzu
operation.

Greater collaboration with GM
Columbia/Ecuador/Chile/ Peru

New Sub-Sahara Company

Expand sales of localizedengines
95. Link Two Operations (to deliver optimal products)
By realizing anew that the After-Sales function of interfacing with customers is where business starts, Isuzu will focus on AfterSales and vigorously push an approach driven by After-Sales activity.
→ Expansion and enhancement of After-Sales will create a virtuous cycle involving engineering, sourcing andmanufacturing operations. Further, engineering, sourcing and manufacturing teams will be in closer contact withmarkets for a stronger link between operations.
Functions before SalesEngineeringSourcing

Marketing productplanning

After-Sales
ManufacturingSales

ProductInformation

After-Sales
Servicing, repair, parts
Respond to complaints
and deal with field problems

Expand After-Sales
Obtain and gather product needs - whatcustomers want - in support of “After-Sales”.

Boost marketing capability

Links as a result- Emerging and advanced countries- Close-to-market marketing

Increase customer visitsWork starts and focuses here
Engineering, sourcing andmanufacturing teams approachmarkets.

⇒ Mother plants in Japan (Fujisawa, Tochigi) work closely with dealership.
- Place dealer workshop in the plant (direct communication with dealership).
⇒ Send Isuzu Group engineers as field engineers to overseas local distributors/dealers.
- They will directly engage with customers, support dealerships/collect information.
⇒ Coordinate training for engineering, manufacturing and after-sales staff.

106. Lay the corporate foundation to support the next generation
With the difficult years firmly behind us, Isuzu is laying the corporate foundation to tackle backlog programs.

Built “MSTC”

Establish “Isuzu Plaza”

Started operation in ’15.

To start operation in ’17.

Pass down skills&developpersonnel

Leverage humanresources insupport of growthRotation system▶ Keep staff after retirement age

Improve individual potential▶ Use intra-Group interaction▶ Utilize experienced employees

Multiple career paths

Right person to right position▶ Hire more (school, mid-career, overseas)

Hire after retirement age
Achieve work-life balance

HR infoDB

Help raise morale

Diversity, etc.

Active CSR
Socialcontribution

Requiredcompliance

Return values ・ Utilize business (post-disaster reconstruction)
・ Help community（school）
to society
present
MTBP
targets

Influence society（social value creation）
Futuretarget11Planned Volume by Region: CV
Under the new MTBP, Isuzu is targeting a total volume of 380,000 units in FY2018, up 15%. We anticipate driving volumeexpansion in Asia, the Middle East and Africa, as well as from the ongoing recovery in North America, to more than offset
the flat or declining total industry volume in Japan.
(1000 units)
Result

13

14

16

’15

’16

’18

49

42
’15

’16

’18

83

China

’16

’15

’16

Africa

74

’16

’18/3

331

328

380

18
’15

23

26

’16

’18

’18

Japan

60

68

82

35
’15
’18

’16/3

N. America’18M. East27 26

74

61’15’15’15/335Europe54 56

MTBP years’16’18

Asia

91010’15’16’18

25 24

27’15’18’16

Latin America

Oceania12

Planned Volume by Region: LCVThe Company is targeting a total volume of 440,000 units in FY2018, up 30%. Growth will come from the addition of LCVs
produced in China (in Jiangxi) and India, as well as an increase in exports within Asia buoyed by recovery of the Thai market.
(1000 units)
Result18

15

18’15’16’18

18’15

Europe60

32’16

MTBP years’15/3’16/3’18/3338353

440’18China

363037’15’16’18

7742 52

M. East132 126

143

’15

’16

’18

Asia
’15

’16

25 27

’18

Thailand

45 49

51

’15

’18

’16

Africa

’15

20 22

25’15

’18

’16

’16

29
’18

Latin America

Oceania13

Profit and Financial Indicators
Under the new Mid-Term Business Plan, Isuzu will maintain and improve stable profits and financial structure,
while setting aside sufficient funds to invest in its growth, for sustainable growth to stay on a solid footing.

Indicator

PolicyNet sales

Steady growth and expansion

Target

2.2 to 2.3 trillion JPY in final year
(20% over current result)Operating profit
ratio

Secure stable profit while spending for long-term
growth9% (average for three years)

Return on equity（ROE）

Maintain good capital efficiency

12% (average for three years)

Total return ratio

Stable dividend payment unaffected byshort-term performance fluctuations

20% to 30%14

Trucks for Life

(Appendix) ISUZU Subsidiaries and Affiliates
AreaCompany Name

Type of Business

Pages

ILS

Isuzu Leasing Services Ltd.

Commercial Vehicle Leasing Services

2,8IRS

Isuzu R S Ltd.

Used Vehicle and Remanufacturing

2IMA

Isuzu Motors Asia. Ltd.

Control of Business and Distribution in the Asian Area

9IMAThailand

Isuzu Motors Asia (Thailand). Ltd.

Support of Business in Thailand

9IMCT

Isuzu Motors Co., (Thailand) Ltd.

Manufacture of Commercial Vehicles and Pickup Trucks

6IMIT

Isuzu Motors International Operations (Thailand) Co., Ltd.

Export of Pickup Trucks

9ITA

Isuzu Technical Center of Asia Co., Ltd.

Vehicle Engineering

6IGCE

Isuzu Global CV Engineering Center Co., Ltd

Planning and engineering of new product including a commercial vehicle and its
relevant parts and components for emerging markets

2,6IAMIP.T. Isuzu Astra Motor Indonesia

Import, Assembly and Distribution of Commercial Vehicles and Asian-Utility Vehicles

6IQEC

ISUZU QINGLING (CHONGQING) ENGINEERING CO., LTD.

Planning and engineering of new product including a new heavy-duty truck and its
relevant parts and components

2IQAC

ISUZU QINGLING (CHONGQING) AUTOPARTS CO., LTD.

Production of engine parts and sale of vehicle and engine parts

2JIM

Jiangxi Isuzu Motors Co., Ltd..

Designing, production and sales of complete vehicles and their parts, import ofvehicle-related technologies and facilities

2,6,9JIE

Jiangxi Isuzu Engine Co., Ltd..

Designing, production and sales of complete engines and their parts, import ofengine-related technologies and facilities

2QL

Qingling Motors Co., Ltd.

Manufacture and Distribution of Commercial Vehicles and Sport-Utility Vehicles

2,6QL4S

QINGLING ISUZU (CHONGQING) AUTOMOBILE SALES AND SERVICE
CO.LTD

Vehicle Distribution and Wholesales of Parts

8,9IMI

Isuzu Motors India Private Limited

Import, Assembly and Distribution of LCVs

2,6IEBCI

Isuzu Engineering Business Centre India Private Limited (仮)R&D and Sourcing of Vehicles and Parts for Emerging Market6Japan
Singapore

Thailand

ASEAN

Indonesia

ChinaIndia

Notice to The ReadersThis document is intended for information purposes and includes, but not limited to,statements on future business performance and business plan. Information contained in thedocument, other than historical or current facts, constitutes forward-looking statements which
are based on assumptions and judgment formed by management of the Company in view ofinformation currently available. By its nature, Isuzu does not guarantee or give any warranty as
to the accuracy of all information contained in this document.
Such statements involve elements of risk and indefiniteness uncertainty contained in suchassumptions and judgment, and/or various factors including but not limited to economicchanges in future, changes in automotive market conditions, foreign currency exchange rate
fluctuations, and changes of business environment surrounding the Company. Such elements
and/or factors may therefore cause the actual results and performance to be materiallydifferent from any future results and performance expressed or implied by the predictive
statements stated herein. If you actually have an intention to invest, do not depend upon thisdocument as your sole source of information, and use your own discretion in making aninvestment decision.