[Mr. Fields]

Mina-san, konnichiwa. Mark Fields desu.
Late last year, we mentioned at our year-end press conference that it was our intention to launch an innovative Internet-based "build-to-order" system. Well, I am thrilled to be able to tell you about the new Internet-based build-to-order or "BTO" system that we are about to launch. We are the first Japanese automaker to provide customers with this unique marketing approach using the Internet. And this is evidence of Mazda living up to our theme for the year, which is "Mastering Execution and Delivering on our Commitments."

Before starting today's presentation, please allow me to introduce our members present today: Mr. Ryoichi Hasegawa, Managing Director, in charge of information system and e-business, Mr. Shigeharu Hiraiwa, Director of Corporate Communications, Mr. Masazumi Wakayama, Director of Domestic Marketing and Mr. Shusuke Koreeda, General Manager of the Internet Marketing Department.

Today's announcement demonstrates Mazda's great interest in e-business, showing that we are envisioning being the leader of this field in the industry. Our Internet-based BTO system is a major step in achieving this goal.

Today's rapid evolution of information technology is bringing major changes into our business world. Technology has already turned into reality many things that seemed to be impossible just a few years ago. I myself use this cellular phone to check stock prices and exchange rates while I'm away from my computer. I also use a P-in card for my laptop computer, which allows me to access web pages and transmit messages or data.

It is important for any company to adopt itself to new technologies as quickly as possible. I believe that, if you want to be successful in the 21st century, you have to acknowledge and respond to a change flexibly and quickly.

This is the reason why we established the "e-Business Enabling Office" in September of last year. Teaming up with our Information Systems Division, our e-business division promotes a comprehensive adoption of e-business into our business systems.

As you know, Mazda realized various Internet services for our customers in 2000. We introduced our first Internet-exclusive model, "web-tuned@DEMIO," established the Mazda Telematics Car Navigation Center and sold the "@NAVI" series.

In addition, we launched the online information exchange system, "Mazda Supplier Network." We also started an Internet auction for selected parts.

In addition, we are encouraging Mazda dealers to set up their own homepages. With an easy-to-use design and the consistent brand image of Mazda, dealers' homepages provide our customers with information on special promotions and limited models. We expect all Mazda dealers to have their own homepage by the end of March. Internally, we successfully completed the development of the electronic Ringi system.

Moreover, we started providing our directors with the "Mobile Access" services in January. Wherever Mazda employees are outside the company, they can access their company email account or electronic files using the Internet, as if they were in the office. Starting with directors, we will adopt this Mobile Access system to 500 middle management employees later this year, and then to all employees at a later date.

With the "e-Business Enabling Office" as the core division, Mazda is currently developing a new framework for "e-business strategy as corporate innovation." This framework is to reconfigure the various e-business activities that I previously mentioned, and ultimately strengthen our management structure as a whole. We believe that information technology will facilitate Mazda's brand and product strategy to materialize efficiently and accelerate information sharing within the company and the suppliers. "e-Business Enabling Office" will become a strong drive force behind our e-business activities, which will enable us to become a strong "new Mazda."

Now let me introduce a new car-ordering system of the 21st century. Now Mr. Wakayama, who is in charge of our domestic marketing team, is pleased to explain you about Mazda's build-to-order system.

[Mr. Wakayama]

Thank you, Fields-san.

Mazda has set up two Internet-exclusive models for this new launched Internet build-to-order system. Look at the stage, one is the "web-tuned@Roadster" (web-tuned Roadster), and the other is "web-tuned@S-WAGON " (web-tuned S-WAGON).

Starting tomorrow, February 2, these two models will be marketed on Mazda's newly-designed website, "Web tune Factory (http://www.w-tune.com)."

The Web tune Factory site lets customers select the features or options you want, including specifications not available in catalogues. The website also provides services such as trade-in inspections and credit checks and let customers make an appointment to have a dealer site meeting, This means that you can complete through Internet such purchase work, which is usually done at a dealer.

Customers do the formal paper work, including purchase contract, registration and delivery appointment, at a dealer of customer's choose. The maker starts building a car after receiving an order from a dealer.

This Web tune Factory site is an innovative Internet-based build-to-order system, and Mazda is the first Japanese automaker to adopt a business method of this kind.

Now I would like to explain the background on what has led us to undertake this first-in-the-industry business approach.

"How can we better respond to customers' needs?" This question laid in the beginning of the MM (More Mazda) Project that began in May last year. The MM Project is an assignment where we, while reflecting customers' needs, hones up our brand individuality.

About 60,000 Internet users have signed up for a web member. Now we can share thoughts and ideas with these members of the community. This is just wonderful. Sometimes we receive more than 100 e-mail messages a day. Many messages concern the idea like, "I would like a car that matches my own individuality," "I would like specifications that nobody else has."

We have made great efforts to serve for a rather large group of customers with the special limited-series, such as the Briza, @NAVI and the Astral. Now we narrow down a little, and would like to serve for the individual needs of our customers.

As the Internet population is growing rapidly, we suppose that the number of vehicles sold thorough Internet will also increase.

We think that the growing Internet will bring about more chances for on-demand sales, in which we manufacture a rather small number of products for a small group of customers.

We have seen many types of Internet sales business models. Some went to an early grave because they did not well understand the needs of their Internet customers.

In this sense, Mazda had a big advantage because we were able to learn many things from the experience of trial sales of the Internet limited version of the DEMIO last January. We were able to understand the needs of customers who purchase a new car through Internet. Their needs are different from those who would rather like to select and purchase a car at a dealer. Based on the findings, we have examined sales methods using the Internet and product contents with a view to maximize these customers' satisfaction.

Now let me introduce briefly about their characteristics and needs of our Internet customers.

We see the customers who purchased the Internet-exclusive Demio belong to the core Internet customer group. They have great familiarities with online shopping and tend to prefer "speedy purchase/consideration/decision."

The primary reason why these customers purchase a car thorough Internet is that they want to purchase/ think about purchasing a car whenever they want. As you know, you can access Internet 24 hours a day, 7 days a week.

The primary reason why Internet customers purchase web-tuned@DEMIO thorough Internet is that they can select the specifications that are available only at the website, not in catalogs.

According to the customers who have purchased the Internet limited edition of the Demio, they want to have a customized car at a reasonable price as seen in the online sales in other industries.

After a full examination of these views, we've devoted effort to realizing three user merits in this "Web tune Factory" site. The merits are as you see here:

We thought that we can attain our customers' deep satisfaction by responding to three needs on purchase methods, product contents, and prices.

The "Web tune Factory" also provides merits for dealers. Furnishing explanations of products, making estimations, and conducting deal negotiations via the Internet can significantly reduce man-hours for purchasing. In addition to that, the Build-To-Order system eliminates inventory loads on dealers.

We are confident that "Web tune Factory" embodies the best sales method using the Internet at this time, not only by making full use of the interactive capability that the Web provides, but also through an optimum combination of the roles of the Web and dealers.

Now let me show you the concrete product content of our Internet-customized exclusive cars.

First, I'd like to tell you about the web-tuned@Roadster.

We set a base model with a simplified package of features as a base for customization.

Based on this, customers can freely choose engines, transmissions and chassis, which enables all customers, from those who want to enjoy free open driving to those who pursue hard sport driving, to build specifications that fully satisfy their needs.

Additionally, for an open car such as the Roadster, it is a great appeal that customers can combine the interior and body colors as desired to build a car that is not found in print catalogs.

Adding some selected features to the basic specifications, you can make 4,160 different combinations.

For example, you can build your Roadster model with the quality VS tan-leather interior and the performance-oriented RS suspension, or the VS tan-leather interior and the 1.6-Liter engine, the combinations that you cannot find in the catalogue.

In the first place, the Roadster has attracted highly customization-oriented users. We can find no single Roadster sharing the same specifications with others at the Mazda Roadster owner meetings, so I'm sure that this Internet-limited edition will be greatly appreciated by our customers.

In addition, we have set a sunburst-yellow outer panel as a special item available exclusively for the Internet-limited edition. The yellow body color has received a high evaluation with the limited edition of the current model's predecessor and is still popular in the used-car market.

This is the first time for us to offer this color for the current model. We will market only 450 units of this color, which are available exclusively for customers who apply for deal negotiations on-line by March 19.

As the second special item, the web-tuned@Roadster adopts a Sony "Xplod" for the audio, which gives passengers an enjoyable sound-field space through its high power and sound-image orientation. The Xplod's superior sonic imaging and impressive design with a silver body and amber lights match the merchantability and targets of the web-tuned@Roadster.

Now let me move on to the product content of the web-tuned@S-WAGON.

Similarly with the web-tuned@Roadster, we have set a base model with a simplified package of features as a base for customization.

For the web-tuned@S-WAGON, we have made mainly some packages of exterior/interior items available with an idea to enable a customer to build a car with his or her own personal-preference specifications.

Combining all these options, you can make 912 combinations of the web-tuned@S-WAGON. For instance, you can build your web-tuned@S-WAGON model with the 1.5-Liter engine and the Sport 20 exterior parts, which you cannot find in the catalogue.

As a special item exclusively available for the Internet-limited edition, we offer customers a blue interior package that includes exclusive blue seats & trim materials, center panel sides of an exclusive color, etc.

In addition, an exterior package is available that gives an aggressive impression with the headlight bezel areas blacked out.

That's it for the product features of web-tuned@S-WAGON.

Customers also can choose items from dealer options in purchasing Mazda's Internet-exclusive models.

We have set prices with consideration of attractive low prices expected by on-line customers and transparency of prices.

Specifically, the price for the web-tuned@Roadster is approximately 150,000 yen lower than that of a catalog model based on the comparison where the difference in equipment between the two models was adjusted.

I think that this price setting makes the product a very good buy for customers, providing an added value that they can purchase their own original specifications by combining only items that they want.

Actually, we have set up a preview site for the "Web tune Factory" at the end of last year and have solicited customization ideas for the Roadster and the Familia S-Wagon. To our surprise, we have received as many as about 4,000 proposals, and that is more than we expected.

For these two models, we have worked toward realizing as many proposals as possible. I believe that we could successfully develop products that live up to customers' expectations.

[Mr. Fields]

Thank you, Mr. Wakayama. I hope everybody has a clearer understanding of the product we will be offering.

At this point there's another item that I'd like to let you know about.
Customization is often practiced in the worlds of personal computers and information technology.

Sharing the same soul for customization, SONY Style.com Japan and Mazda has decided to team up in marketing activities, promoting customization for fun.

SONY's customization promotion site, "SONY Style" (http://www.jp.sonystyle.com) will feature activities of Web tune Factory.

Please take a moment and see this video-taped message from Mr. Kazumasa Sato, President of "SONY style.com."

Thank you very much, Mr. Sato. Coming up next is Mr. Koreeda, General Manager of Internet Marketing Division. Mr. Koreda will tell you about the outline of Web tune Factory.

[Mr. Koreeda]

Thank you, Fields-san.

Opening on February 2, "Web tune Factory" is the website that lets customers customize a car. As explained previously, the sales method is a referral one where the maker Mazda introduces customers' orders to dealers.

Let me tell you about the five features of "Web tune Factory:"

And,

Mazda is the first Japanese automaker to do the Feature 1, 2 and 5.

Next, I will show you the ordering procedure.
To purchase a car thorough We tune Factory, you do:

[Mr. Fields]

Thank you very much, Mr. Koreeda.
Okay, now lets go build a car. I'm going to actually access the "Web tune Factory" site and build my own Mazda Roadster. The site is in Japanese however, so if there's anything I don't understand, I'll call on Mr. Koreeda to assist me, explaining what appears on the screen.

(After completely building the car)

Actually, we have already built a car to meet his order. I'll show you the car.

Well built as simulated! Let me place my order.

Please use a computer in front you and build your car at our Web tune Factory.

We've come to the end of today's briefing, so I'd like to say thank you to all of you for being with us, and please feel free to use the PCs on the table to try out building specifications as desired.

The "Web tune Factory" is an innovative business model, the first of its kind to have been realized by a Japanese automaker. The future will see Mazda making more IT-powered business innovations such as this using "exciting new concepts." And we'll be offering new suggestions for all aspects of car life, aiming to forge strong ties with our customers at all our points of interface with them.

Thank you very much.