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What changed in TOYOTA MOTOR CORP/'s 20-F — 2023 vs 2024

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Paragraph-level year-over-year comparison of TOYOTA MOTOR CORP/'s 2023 and 2024 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+686 added−683 removedSource: 20-F (2024-06-25) vs 20-F (2023-06-30)

Top changes in TOYOTA MOTOR CORP/'s 2024 20-F

686 paragraphs added · 683 removed · 437 edited across 6 sections

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeINFORMATION ON THE COMPANY 7 4.A HISTORY AND DEVELOPMENT OF THE COMPANY 7 4.B BUSINESS OVERVIEW 7 4.C ORGANIZATIONAL STRUCTURE 65 4.D PROPERTY, PLANTS AND EQUIPMENT 66
Biggest changeINFORMATION ON THE COMPANY 7 4.A HISTORY AND DEVELOPMENT OF THE COMPANY 7 4.B BUSINESS OVERVIEW 7 4.C ORGANIZATIONAL STRUCTURE 68 4.D PROPERTY, PLANTS AND EQUIPMENT 69 ITEM 4A. UNRESOLVED STAFF COMMENTS 70 ITEM 5.
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OPERATING AND FINANCIAL REVIEW AND PROSPECTS 71 5.A OPERATING RESULTS 71 5.B LIQUIDITY AND CAPITAL RESOURCES 94 5.C RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES 98 5.D TREND INFORMATION 100 5.E CRITICAL ACCOUNTING ESTIMATES 100 ITEM 6.
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DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 100 6.A DIRECTORS AND SENIOR MANAGEMENT 100 6.B COMPENSATION 107 6.C BOARD PRACTICES 116 6.D EMPLOYEES 117 6.E SHARE OWNERSHIP 118 6.F DISCLOSURE OF A REGISTRANT’S ACTION TO RECOVER ERRONEOUSLY AWARDED COMPENSATION 119 ITEM 7.
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MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 119 7.A MAJOR SHAREHOLDERS 119 7.B RELATED PARTY TRANSACTIONS 120 7.C INTERESTS OF EXPERTS AND COUNSEL 121 ITEM 8. FINANCIAL INFORMATION 121 8.A CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION 121 8.B SIGNIFICANT CHANGES 123 ITEM 9.
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THE OFFER AND LISTING 123 9.A LISTING DETAILS 123 9.B PLAN OF DISTRIBUTION 123 9.C MARKETS 123 9.D SELLING SHAREHOLDERS 123 9.E DILUTION 123 9.F EXPENSES OF THE ISSUE 123 ITEM 10.
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ADDITIONAL INFORMATION 123 10.A SHARE CAPITAL 123 10.B MEMORANDUM AND ARTICLES OF ASSOCIATION 124 10.C MATERIAL CONTRACTS 130 Table of Contents Page 10.D EXCHANGE CONTROLS 130 10.E TAXATION 135 10.F DIVIDENDS AND PAYING AGENTS 141 10.G STATEMENT BY EXPERTS 141 10.H DOCUMENTS ON DISPLAY 141 10.I SUBSIDIARY INFORMATION 141 10.J ANNUAL REPORT TO SECURITY HOLDERS 141 ITEM 11.
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 141 ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 142 12.A DEBT SECURITIES 142 12.B WARRANTS AND RIGHTS 142 12.C OTHER SECURITIES 142 12.D AMERICAN DEPOSITARY SHARES 142

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest change(“Daihatsu”), a consolidated subsidiary of Toyota, confirmed and announced misconduct in relation to its applications for certification concerning safety tests of certain of its vehicles for the overseas market on April 28, 2023 for vehicles developed by Daihatsu. See “Item 4. Information on the Company — 4.B Business Overview — Selected Initiatives” for further discussion of these and related matters.
Biggest changeInformation on the Company — 4.B Business Overview — Selected Initiatives” for further discussion of these and related matters.
Should the major markets in which Toyota purchases materials, parts and components 6 Table of Contents and supplies for the manufacture of Toyota products or in which Toyota’s products are produced, distributed or sold be affected by any of these events, it may result in future disruptions, delays and other adverse changes in the operations of Toyota’s business.
Should the major markets in which Toyota purchases materials, parts and components and supplies for the manufacture of Toyota products or in which Toyota’s products are produced, distributed or sold be affected by any of these events, it may result in future disruptions, delays and other adverse changes in the operations of Toyota’s business. 6 Table of Contents
The timely introduction of new vehicle models, at competitive prices, meeting rapidly changing customer preferences and demand is more fundamental to Toyota’s success than ever, as the automotive market is rapidly transforming in light of the changing global economy and technological advances.
The timely introduction of new vehicle models and vehicle features, at competitive prices, meeting rapidly changing customer preferences and demand is more fundamental to Toyota’s success than ever, as the automotive market is rapidly transforming in light of the changing global economy and technological advances.
Any insufficient measures taken by the Toyota group or its suppliers to maintain and develop Toyota’s brand image and reputation may have an adverse effect on Toyota’s financial condition and results of operations. Toyota relies on suppliers for the provision of certain supplies including parts, components and raw materials.
Any insufficient measures taken by Toyota, the Toyota Group or their suppliers to maintain and develop Toyota’s brand image and reputation may have an adverse effect on Toyota’s financial condition and results of operations. Toyota relies on suppliers for the provision of certain supplies including parts, components and raw materials.
Large-scale disasters may also adversely affect the financial condition of Toyota’s customers, and thereby demand for its products and services. Transition risks are those attributable to regulatory, technological and market changes to address the mitigation of, or adaptation to, climate-related risks.
Large-scale disasters and other events may also adversely affect the financial condition of Toyota’s customers, and thereby demand for its products and services. Transition risks are those attributable to regulatory, technological and market changes to address the mitigation of, or adaptation to, climate-related risks.
In particular, cyber-attacks or other intentional malfeasance are increasing in terms of intensity, sophistication and frequency, and Toyota has been and expects to continue to be the subject of such attacks.
In particular, cyberattacks or other intentional malfeasance are increasing in terms of intensity, sophistication and frequency, and Toyota has been and expects to continue to be the subject of such attacks.
In order to do so, it is necessary to further increase stakeholders’ confidence by ensuring that the Toyota group and its suppliers thoroughly comply with laws and regulations, provide safe, high-quality products that meet customer preferences and demand, as well as timely and appropriately disseminate information to stakeholders. It is also becoming increasingly important for companies to contribute to sustainability.
In order to do so, it is necessary to further increase stakeholders’ confidence by ensuring that Toyota, the Toyota Group and its suppliers thoroughly comply with laws and regulations, provide safe, high-quality products that meet customer preferences and demand, as well as timely and appropriately disseminate information to stakeholders.
Furthermore, new legislation or regulations or changes in existing legislation or regulations may also subject Toyota to additional costs in the future. If Toyota incurs significant costs related to implementing safety measures or responding to laws, regulations and governmental actions, Toyota’s financial condition and results of operations may be adversely affected. Toyota may become subject to various legal proceedings .
If Toyota incurs significant costs related to implementing safety measures or responding to laws, regulations and governmental actions, Toyota’s financial condition and results of operations may be adversely affected. Toyota may become subject to various legal proceedings.
Despite Toyota’s contingency planning, large-scale disasters due to extreme weather conditions have in the past harmed, and may in the future again harm, Toyota’s employees or its facilities and other assets, as well as those of Toyota’s suppliers and other business partners, thereby adversely affecting Toyota’s production, sales or other operational capacities.
Such severe weather events and other natural conditions have in the past harmed, and may in the future again harm, Toyota’s employees or its facilities and other assets, as well as those of Toyota’s suppliers and other business partners, thereby adversely affecting Toyota’s production, sales or other operational capacities.
Furthermore, the failure to comply with such regulations could result in legal proceedings, recalls, negotiated remedial actions, fines, revocations of government approvals and the imposition of other government sanctions, restricted product offerings, compensatory payments or adverse consequences, such as those that have ensued in connection with the misconduct that Hino engaged in relating to emissions and fuel efficiency testing.
Furthermore, the failure to comply with such regulations could result in legal proceedings, recalls, negotiated remedial actions, fines, corrective orders, revocations of government approvals and the imposition of other government sanctions, restricted product offerings, compensatory payments or adverse consequences.
Toyota’s financial condition and results of operations may be adversely affected if the changes in demand for automobiles continues or progresses further beyond Toyota’s expectations.
Changes in demand for automobiles are continuing, and it is unclear 1 Table of Contents how this situation will transition in the future. Toyota’s financial condition and results of operations may be adversely affected if the changes in demand for automobiles continues or progresses further beyond Toyota’s expectations.
See “Item 4. Information on the Company — 4.B Business Overview — Selected Initiatives.” Toyota has incurred significant costs in response to governmental regulations and actions, including costs relating to changes in global trade dynamics and policies, and expects to incur such costs in the future.
Toyota has incurred significant costs in response to governmental regulations and actions, including costs relating to changes in global trade dynamics and policies, and expects to incur such costs in the future. Furthermore, new legislation or regulations or changes in existing legislation or regulations may also subject Toyota to additional costs in the future.
In particular, progress toward achieving Toyota’s climate-related targets requires significant investment of resources and management time, as well as implementation of new compliance and risk management systems, 4 Table of Contents internal controls and other internal procedures.
As a result, Toyota may not be able to meet its goals, including those set forth in this annual report, on expected timing or within expected costs. 4 Table of Contents In particular, progress toward achieving Toyota’s climate-related targets requires significant investment of resources and management time, as well as further improvement of compliance and risk management systems, internal controls and other internal procedures.
This could, in turn, negatively impact Toyota’s profitability because Toyota may not be able to pass all those costs on to its customers or require its suppliers to absorb such costs.
This could, in turn, negatively impact Toyota’s profitability if Toyota is not able to pass all those costs on to its customers. A downturn in the financial markets could adversely affect Toyota’s ability to raise capital.
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Reviewing the world economy for fiscal 2023, energy prices soared due to geopolitical tensions, and the rise in consumer prices accelerated in both advanced and emerging countries. From August onward, demand declined because of concerns regarding a slowdown in the global economy due to the acceleration of monetary tightening by central banks around the world.
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Reviewing the world economy for fiscal 2024, it remained steady mainly in the U.S., where employment stayed strong, despite the effects of high inflation and interest rates and a stagnant real estate market in China. The automotive market grew significantly from the previous year, thanks to a surge of pent-up demand as semiconductor supply constraints eased.
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Although the automotive market continued to be subjected to global production constraints due to the tightening of global supply of, and increasing demand for, semiconductors as well as components shortages, the production cuts eased toward the second half of the fiscal year. 1 Table of Contents Changes in demand for automobiles are continuing, and it is unclear how this situation will transition in the future.
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It is also becoming increasingly important for companies to contribute to sustainability. However, the Toyota Group may not be able to ensure that it or its suppliers do so in all cases. For instance, at the consolidated subsidiary level, Hino Motors, Ltd. (“Hino”) and Daihatsu Motor Co., Ltd.
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However, the Toyota group may not be able to ensure that it or its suppliers do so in all cases. Concerns regarding product safety or our product safety validation processes, whether raised internally, by regulators, or consumer advocates, can lead to product delays, recalls, lost sales, regulatory investigations, legal claims that cause reputational damage.
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(“Daihatsu”) announced vehicle model certification issues in March 2022 and in April 2023, respectively. In addition, Toyota Motor Corporation investigated certain of its model certification applications as per instructions from the 2 Table of Contents Ministry of Land, Infrastructure, Transport and Tourism of Japan (“MLIT”) on January 26, 2024.
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For example, on March 4, 2022, Hino Motors, Ltd. (“Hino”), a consolidated 2 Table of Contents subsidiary of Toyota, confirmed and announced misconduct in relation to its applications for certification concerning the emissions and the fuel economy performance of certain of its engines for the Japanese market. Additionally, Daihatsu Motor Co., Ltd.
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Toyota Motor Corporation has confirmed that since 2014 seven models, including some that have already been discontinued, were tested as part of such applications using methods that differed from government standards, and it reported this to MLIT on May 31, 2024. See “Item 4.
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As a result, Toyota may not be able to meet its goals, including those set forth in this annual report, on expected timing or at all, or within expected costs.
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Despite Toyota’s contingency planning, in addition to large-scale disasters due to extreme weather conditions. the increase and intensification of severe weather events such as heat waves is expected to increase the risk of heat stroke and water shortages due to drought.
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For example, Toyota believes that the surge in materials costs has had a significant negative impact on its business performance in fiscal 2023, and expects the impact to continue in fiscal 2024. A downturn in the financial markets could adversely affect Toyota’s ability to raise capital .

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeInvestment primarily in technology and products by Daihatsu Motor Co., Ltd. 110.9 Japan Internal funds Investment primarily in technology and products by Toyota Motor Kyushu, Inc. 107.8 Japan Internal funds Investment primarily in technology and products by Toyota Auto Body Co., Ltd. 93.1 Japan Internal funds Investment primarily in technology and products by Prime Planet Energy & Solutions, Inc. 92.5 Japan Internal funds Investment primarily in technology and products by Primearth EV Energy Co., Ltd. 61.4 Japan Internal funds Outside of Japan Investment primarily to promote localization by Toyota Motor Manufacturing Texas, Inc. 173.6 United States Internal funds Investment primarily to promote localization by Toyota Motor Manufacturing Canada, Inc. 167.2 Canada Internal funds Investment primarily to promote localization by Toyota Motor Manufacturing, Indiana, Inc. 140.9 United States Internal funds Investment primarily to promote localization by Toyota Battery Manufacturing, Inc. 102.5 United States Internal funds Investment primarily to promote localization by Toyota Motor Manufacturing, Kentucky, Inc. 88.0 United States Internal funds Investment primarily to promote localization by Toyota Motor Thailand Co., Ltd. 68.7 Thailand Internal funds Investment primarily to promote localization by Toyota Motor Europe NV/SA 68.3 Belgium Internal funds Investment primarily to promote localization by Toyota Motor Manufacturing, Northern Kentucky, Inc. 66.1 United States Internal funds Investment primarily in leased automobiles by Toyota Motor Credit Corporation 5,095.0 United States Internal funds, financing from issuance of bonds, etc. 62 Table of Contents Set forth below is information with respect to Toyota’s material plans to construct, expand or improve its facilities between April 2023 and March 2024, presented on a “by subsidiary” basis and as reported in Toyota’s annual Japanese securities report filed with the director of the Kanto Local Finance Bureau.
Biggest changeInvestment primarily in technology and products by Prime Planet Energy & Solutions, Inc. 88.7 Japan Internal funds Investment primarily in technology and products by Toyota Auto Body Co., Ltd. 84.6 Japan Internal funds Investment primarily in technology and products by Toyota Motor Kyushu, Inc. 78.6 Japan Internal funds Investment primarily in technology and products by Primearth EV Energy Co., Ltd. 69.0 Japan Internal funds Investment primarily in technology and products by Hino Motors, Ltd. 65.4 Japan Internal funds Outside of Japan Investment primarily to promote localization by Toyota Battery Manufacturing, Inc. 307.9 United States Internal funds Investment primarily to promote localization by Toyota Motor Manufacturing de Guanajuato, S.A. de C.V. 196.0 Mexico Internal funds 65 Table of Contents Description of Activity Total Cost (Yen in billions) Location Primary Method of Financing Investment primarily to promote localization by Toyota Motor Manufacturing Canada, Inc. 168.4 Canada Internal funds Investment primarily to promote localization by Toyota Motor Manufacturing, Indiana, Inc. 168.3 United States Internal funds Investment primarily to promote localization by Toyota Motor Manufacturing, Kentucky, Inc. 156.0 United States Internal funds Investment primarily to promote localization by Toyota Motor Manufacturing Texas, Inc. 138.1 United States Internal funds Investment primarily to promote localization by Toyota Motor Thailand Co., Ltd. 87.4 Thailand Internal funds Investment primarily to promote localization by Toyota Motor Europe NV/SA 66.3 Belgium Internal funds Investment primarily in leased automobiles by Toyota Motor Credit Corporation 5,236.0 United States Internal funds, financing from issuance of bonds, etc.
The new regulation purports to raise the quality and independency of vehicle type-approval and testing, to increase checks of vehicles that are already on the EU market, and to strengthen European Commission oversight of the framework. It became mandatory for all new vehicle models as of September 1, 2020.
The new regulation purports to raise the quality and independency of vehicle type-approval and testing, to increase checks of vehicles that are already on the EU market, and to strengthen European Commission oversight of the framework. It became mandatory for all new EU vehicle models as of September 1, 2020.
Approach to and Initiatives Towards Human Resources The Toyota group has been focusing on human resource development since its foundation based on the philosophy that “ monozukuri (manufacturing) depends on human resource development.” In the midst of a once-in-a-century transformation taking place in the automobile industry, the Toyota group has set out the theme of inheritance and evolution and is doing its utmost to realize its transformation into a mobility company for the future in addition to carrying on what makes us Toyota — “let’s make ever-better cars,” “let’s aim to be best-in-town, rather than being the best in the world” and “let’s work for the sake of others.” Amid the era in which it is hard to predict the future, each and every one of us at Toyota, our 370,000 colleagues around the world, must share the same thoughts, working together organically as a team at the same time in order to uphold our founding spirit and what makes us Toyota, as symbolized by the Toyoda Principles, and to carve out the future of automobiles using the Toyota Philosophy as a guideline, and to that end, we need to develop human resources.
Approach to and Initiatives Towards Human Resources Toyota and the Toyota Group have been focusing on human resource development since its foundation based on the philosophy that “ monozukuri (manufacturing) depends on human resource development.” In the midst of a once-in-a-century transformation taking place in the automobile industry, Toyota and the Toyota Group have set out the theme of inheritance and evolution and is doing its utmost to realize its transformation into a mobility company for the future in addition to carrying on what makes us Toyota — “let’s make ever-better cars,” “let’s aim to be best-in-town, rather than being the best in the world” and “let’s work for the sake of others.” Amid the era in which it is hard to predict the future, each and every one of us at Toyota, our 370,000 colleagues around the world, must share the same thoughts, working together organically as a team at the same time in order to uphold our founding spirit and what makes us Toyota, as symbolized by the Toyoda Principles, and to carve out the future of automobiles using the Toyota Philosophy as a guideline, and to that end, we need to develop human resources.
MISSION Producing Happiness for All Using our technology, we work towards a future of convenience and happiness, available to all VISION Creating Mobility for All Toyota strives to raise the quality and availability of mobility so that individuals, businesses, municipalities and communities can do more, while achieving a sustainable relationship with our planet VALUE We unite our three strengths (Software, Hardware and Partnerships) to create new and unique value that comes from the Toyota Way Toyota Production System (“TPS”) TPS is imbued with the desire of Sakichi Toyoda, the founder of the Toyota family of companies, and Kiichiro Toyoda, the founder, “to make someone’s work easier.” TPS was established based on two concepts: Jidoka, which can be loosely translated as “automation with a human touch,” — an idea of stopping equipment immediately when a problem occurs, in order to prevent defective products from being produced — and “ Just in Time ” (“JIT”), a concept based on the idea that “each process produces only what is needed for the next process in a continuous flow.” Based on the basic philosophies of jidoka and JIT, through TPS, Toyota aims to efficiently and quickly produce vehicles of sound quality, one at a time, to fully satisfy customer requirements.
MISSION Producing Happiness for All Using our technology, we work towards a future of convenience and happiness, available to all VISION Creating Mobility for All Toyota strives to raise the quality and availability of mobility so that individuals, businesses, municipalities and communities can do more, while achieving a sustainable relationship with our planet VALUE We unite our three strengths (Software, Hardware and Partnerships) to create new and unique value that comes from the Toyota Way Toyota Production System (“TPS”) TPS is imbued with the desire of Sakichi Toyoda, the founder of the Toyota Group, and Kiichiro Toyoda, the founder, “to make someone’s work easier.” TPS was established based on two concepts: Jidoka, which can be loosely translated as “automation with a human touch,”—an idea of stopping equipment immediately when a problem occurs, in order to prevent defective products from being produced—and “ Just in Time ” (“JIT”), a concept based on the idea that “each process produces only what is needed for the next process in a continuous flow.” Based on the basic philosophies of jidoka and JIT, through TPS, Toyota aims to efficiently and quickly produce vehicles of sound quality, one at a time, to fully satisfy customer requirements.
Looking at the global Toyota group as a whole, in addition to instilling the philosophy in all regions around the world, through various opportunities such as training for global executive candidates, the head office and regional entities are working together to strengthen a common foundation for human resource development based on Toyota’s “philosophy, skills, and behavior (such as Toyota Philosophy and TPS).” In addition, for regional entities, we are promoting the establishment of a system that flexibly promotes the formulation and execution of human resource strategies rooted in the region in response to the characteristics of the region and the diverse needs of customers. 47 Table of Contents We have also been engaged in ongoing dialogue between labor and management regarding investment in human resources, including human resources development.
Looking at the global Toyota and the Toyota Group as a whole, in addition to instilling the philosophy in all regions around the world, through various opportunities such as training for global executive candidates, the head office and regional entities are working together to strengthen a common foundation for human resource development based on Toyota’s “philosophy, skills, and behavior (such as Toyota Philosophy and TPS).” In addition, for regional entities, we are promoting the establishment of a system that flexibly promotes the formulation and execution of human resource strategies rooted in the region in response to the characteristics of the region and the diverse needs of customers. 51 Table of Contents We have also been engaged in ongoing dialogue between labor and management regarding investment in human resources, including human resources development.
The GRVA is developing regulations covering functional safety requirements, new evaluation test method requirements, cybersecurity, software updates, data recording for automated driving vehicles and data recording in case of an accident. The new regulations on cyber security, software updates and automated lane keeping system came into effect in January 2021.
The GRVA is developing regulations for automated driving systems for automated vehicles, covering functional safety requirements, new evaluation test method requirements, cybersecurity, software updates, data recording for automated driving vehicles and data recording in case of an accident. The new regulations on cyber security, software updates and automated lane keeping system came into effect in January 2021.
In December 2011, the EPA and the NHTSA issued a joint proposed rule to further reduce greenhouse gas emissions and improve fuel economy for passenger cars, light-duty trucks and medium-duty passenger vehicles for model years 2017 through 2025.
In December 2011, the EPA and the NHTSA issued a joint proposed rule to reduce greenhouse gas emissions and improve fuel economy for passenger cars, light-duty trucks and medium-duty passenger vehicles for model years 2017 through 2025.
On March 4, 2022, Hino Motors, Ltd., a publicly traded Japanese company that produces and sells commercial trucks and buses, and of which Toyota owns 50.19% of the voting interests as of March 31, 2023, disclosed that it had voluntarily commenced an investigation into potential issues regarding emissions performance and certification in the North American and Japanese markets, and that it has reported such issues to and is cooperating with the relevant authorities.
On March 4, 2022, Hino Motors, Ltd., a publicly traded Japanese company that produces and sells commercial trucks and buses, and of which Toyota owns 50.19% of the voting interests as of March 31, 2024, disclosed that it had voluntarily commenced an investigation into potential issues regarding emissions performance and certification in the North American and Japanese markets, and that it has reported such issues to and is cooperating with the relevant authorities.
For light-duty commercial vehicles, GB20997-2015 was enacted, which further applied Level 3 Fuel Consumption Regulations to all new vehicles from January 2018 and is currently being enforced.
For light commercial vehicles, GB20997-2015 was enacted, which further applied Level 3 Fuel Consumption Regulations to all new vehicles from January 2018 and is currently being enforced.
In these regions, which are expected to become increasingly important to Toyota’s business strategy, Toyota aims to continue developing new products which meet the specific demands of each region, increasing production and promoting sales. 20 Table of Contents Production Toyota and its affiliated companies produce automobiles and related components through more than 50 overseas manufacturing organizations in 26 countries and regions aside from Japan.
In these regions, which are expected to become increasingly important to Toyota’s business strategy, Toyota aims to continue developing new products which meet the specific demands of each region, increasing production and promoting sales. 25 Table of Contents Production Toyota and its affiliated companies produce automobiles and related components through more than 50 overseas manufacturing organizations in 26 countries and regions aside from Japan.
Together with the 370,000 employees of the Toyota group around the world, our suppliers, and our dealers, we all make cars together. Car-making is a team effort.
Together with the 370,000 employees of Toyota around the world, our suppliers, and our dealers, we all make cars together. Car-making is a team effort.
It has also been introduced in a total of 120 countries and regions, including such key markets as China, other select Asian countries, the Middle East and Australia. Another important concept is passive safety. In the context of automobiles, passive safety combines a body structure that absorbs collision energy with support to protect vehicle occupants to minimize collision damage.
It has also been introduced in a total of 144 countries and regions, including such key markets as China, other select Asian countries, the Middle East and Australia. Another important concept is passive safety. In the context of automobiles, passive safety combines a body structure that absorbs collision energy with support to protect vehicle occupants to minimize collision damage.
Because Toyota had more than 50 overseas operations in 26 countries and regions as of March 31, 2023, procurement of parts and components is being carried out not only locally in the country of the production site but also from third countries. As a result, the distribution network has become increasingly complex.
Because Toyota had more than 50 overseas operations in 26 countries and regions as of March 31, 2024, procurement of parts and components is being carried out not only locally in the country of the production site but also from third countries. As a result, the distribution network has become increasingly complex.
Toyota plans to further increase sales by expanding the number of dealers and its product lineup. In addition, as the market in China develops and becomes more sophisticated, Toyota plans to promote so-called “Value Chain” businesses, such as used car sales, services, financing and insurance, so as to contribute to the development of a mobility society.
Toyota seeks to increase sales by expanding the number of dealers and its product lineup. In addition, as the market in China develops and becomes more sophisticated, Toyota plans to promote so-called “Value Chain” businesses, such as used car sales, services, financing and insurance, so as to contribute to the development of a mobility society.
In addition, Toyota is actively promoting production and sales measures that meet local demand by strengthening its value chain including used car dealerships, after-sales services and finance and insurance services. 19 Table of Contents Asia Toyota’s principal Asian markets are Thailand, India, Indonesia and Taiwan.
In addition, Toyota is actively promoting production and sales measures that meet local demand by strengthening its value chain including used car dealerships, after-sales services and finance and insurance services. 24 Table of Contents Asia Toyota’s principal Asian markets are Thailand, India, Indonesia and Taiwan.
Asia and other emerging markets (Global South) In order to respond to the growing demand for BEVs, Toyota plans to start local production of BEV pickup trucks by the end of 2023 and also launch a small BEV model. In May 2023, we launched the BEV Factory, a business unit dedicated to BEVs.
Asia and other emerging markets (Global South) In order to respond to the growing demand for BEVs, Toyota started local production of BEV pickup trucks by the end of 2023 and plans to also launch a small BEV model. In May 2023, we launched the BEV Factory, a business unit dedicated to BEVs.
The UNR has been adopted in jurisdictions such as Japan, EU and Russia, and each participating party’s type approvals are mutually recognized under the 1958 Agreement. The parties to the 1998 Agreement include the U.S., China and India in addition to Japan, the EU and Russia, and 23 Global Technical Regulations have been established to date.
The UNR has been adopted in jurisdictions such as Japan, EU and Russia, and each participating party’s type approvals are mutually recognized under the 1958 Agreement. The parties to the 1998 Agreement include the U.S., China and India in addition to Japan, the EU and Russia, and 24 Global Technical Regulations have been established to date.
Moreover, both the Noise Regulation Act and the Road Transport Vehicle Act provide for noise reduction standards on automobiles in Japan. U.S. Federal Standards The federal Clean Air Act directs the Environmental Protection Agency (“EPA”) to establish and enforce air quality standards, including emission control standards on passenger vehicles, light-duty trucks and heavy-duty vehicles.
The Noise Regulation Act and the Road Transport Vehicle Act provide for noise reduction standards on automobiles in Japan. U.S. Federal Standards The federal Clean Air Act directs the Environmental Protection Agency (the “EPA”) to establish and enforce air quality standards, including emission control standards on passenger vehicles, light-duty trucks and heavy-duty vehicles.
The following table sets forth information, as of March 31, 2023, with respect to Toyota’s principal facilities and organizations, all of which are owned by Toyota Motor Corporation or its subsidiaries. However, small portions, all under approximately 20%, of some facilities are on leased premises.
The following table sets forth information, as of March 31, 2024, with respect to Toyota’s principal facilities and organizations, all of which are owned by Toyota Motor Corporation or its subsidiaries. However, small portions, all under approximately 20%, of some facilities are on leased premises.
Automobile sales are affected by a number of factors including: • social, political and economic conditions; • introduction of new vehicles and technologies; • costs incurred by customers to purchase and operate automobiles; and • the availability of parts and components that Toyota needs to manufacture its products.
Automobile sales are affected by a number of factors including: • social, political and economic conditions; • introduction of new vehicles and technologies; • vehicle prices, costs incurred by customers to purchase and operate automobiles; and • the availability of parts and components that Toyota needs to manufacture its products.
Pursuant to the mandate, CARB requires that a specified percentage of a manufacturer’s passenger cars and light-duty trucks sold in California be “zero-emission vehicles” (vehicles producing no emissions of regulated pollutants) (“ZEV”), as well as permits certain advanced technology vehicles such as PHEVs, and alternative fuel vehicles that meet “partial zero-emission vehicles requirements,” to be granted partial qualification as BEVs or FCEVs.
Pursuant to the mandate, CARB requires that a specified percentage of a manufacturer’s passenger cars and light-duty trucks sold in California be “zero-emission vehicles” (vehicles producing no emissions of regulated pollutants) (“ZEV”), as well as permits certain advanced technology vehicles such as PHEVs, and alternative fuel vehicles that meet “partial 41 Table of Contents zero-emission vehicles requirements,” to be granted partial qualification as BEVs or FCEVs.
When it comes to car manufacturing, we will continue to pursue a variety of options, based on a multi-pathway solutions, to stay close to the future of energy and the realities of each region. First, we will thoroughly implement whatever electrification we can do immediately.
When it comes to car manufacturing, we will continue to pursue a variety of options, based on a multi-pathway approach, to stay close to the future of energy and the realities of each region. First, we will thoroughly implement whatever electrification we can do immediately.
In August 2016, the ban on registration was lifted on the condition that a deposit equal to 1% of the vehicle’s retail price is to be paid to the Environment Pollution Control Authority. Furthermore, the government accelerated the implementations of BS-6 (equivalent to EURO6) to 2020.
In August 2016, the ban on registration was lifted on the condition that a deposit equal to 1% of the vehicle’s retail price is to be paid to the Environment Pollution Control Authority. Furthermore, the government accelerated the implementations of BS-6 (equivalent to Euro 6) to 2020.
Description of Activity Total Cost (Yen in billions) Location Primary Method of Financing Japan Investment primarily in technology and products by Toyota Motor Corporation 1,105.6 Japan Internal funds, financing from issuance of bonds, etc.
Description of Activity Total Cost (Yen in billions) Location Primary Method of Financing Japan Investment primarily in technology and products by Toyota Motor Corporation 1,334.6 Japan Internal funds, financing from issuance of bonds, etc.
Toyota believes that its research and development initiatives, particularly the development of environmentally friendly new vehicle technologies, vehicle safety and information technology, provide it with a strategic advantage. 9 Table of Contents Toyota Philosophy The automotive industry is experiencing a once-in-a-century transformation. We are now striving to transform ourselves into a mobility company.
Toyota believes that its research and development initiatives, particularly the development of environmentally friendly new vehicle technologies, vehicle safety and information technology, provide it with a strategic advantage. Toyota Philosophy The automotive industry is experiencing a once-in-a-century transformation. We are now striving to transform ourselves into a mobility company.
In an era which it is hard to predict the future, Toyota has reflected on the path it has taken thus far and has formulated the “Toyota Philosophy” as a roadmap for the future. Toyota’s mission is “Producing Happiness for All” by expanding the possibilities of people, companies and communities through addressing the challenges of mobility as a mobility company.
In an era which it is hard to predict the future, Toyota has reflected on the path it has taken thus far and has formulated the “Toyota Philosophy” as a roadmap for the future. 9 Table of Contents Toyota’s mission is “Producing Happiness for All” by expanding the possibilities of people, companies and communities through addressing the challenges of mobility as a mobility company.
Indiana, U.S.A. 4,359 6,490 Automobiles Toyota is constantly engaged in upgrading, modernizing and revamping the operations of its manufacturing facilities based on its assessment of market needs and prospects.
Indiana, U.S.A. 4,359 6,392 Automobiles Toyota is constantly engaged in upgrading, modernizing and revamping the operations of its manufacturing facilities based on its assessment of market needs and prospects.
In addition, we will achieve cost reductions and Kaizen (continuous improvement) by leveraging the strengths of the Toyota Production System (TPS), and thereby enhance our future investment capacity for the expansion of growth in BEVs and mobility areas, as well as establish a strong business foundation whereby carbon neutrality and growth can both be achieved.
In addition, we will achieve cost reductions and Kaizen (continuous improvement) by leveraging the strengths of TPS, and thereby enhance our future investment capacity for the expansion of growth in BEVs and mobility areas, as well as establish a strong business foundation whereby carbon neutrality and growth can both be achieved.
In late 2020, after taking a test drive in a hydrogen engine prototype car, Master Driver Morizo (Akio Toyoda, then President) decided on the spot to enter a hydrogen engine car in Super Taikyu Series races. The development of race vehicles is dramatically faster and more agile than that of mass-production vehicles.
In late 2020, after taking a test drive in a hydrogen engine prototype car, master driver Morizo (Chairman Akio Toyoda) decided on the spot to enter a hydrogen engine car in Super Taikyu Series races. The development of race vehicles is dramatically faster and more agile than that of mass-production vehicles.
This is precisely an achievement of our region-centered management, which is based on our efforts to make ever-better cars. We will continue to deepen our region-centered management and further solidify our business foundation. 13 Table of Contents To do so, the first thing that we must address is how to achieve carbon neutrality.
This is precisely an achievement of our region-centered management, which is based on our efforts to make ever-better cars. We will continue to deepen our region-centered management and further solidify our business foundation. To do so, the first thing that we must address is how to achieve carbon neutrality.
As such, Toyota’s metrics include not only the amount of GHG emissions but also other elements related to climate change, such as energy, water, resource recycling, and biodiversity.
As such, the metrics include not only the amount of GHG emissions but also other elements deeply related to climate change, such as energy, water, resource recycling, and biodiversity.
In response to this, NHTSA sought public comments in 2022 regarding the strengthening of USNCAP and expansion of the recording requirements regarding Event Data Recorders (EDR). Notices for further public comments on the USNCAP, pedestrian protection and autonomous emergency braking are also expected to be issued in the future.
In response to this, NHTSA sought public comments in 2022 regarding the strengthening of USNCAP and expansion of the recording requirements regarding Event Data Recorders (EDR). Notices for further public comments on the USNCAP are expected to be issued, and pedestrian protection and autonomous emergency braking are expected to become mandatory in the future.
Toyota has coordinated with relevant parties to establish a vehicle take-back and recycle system throughout Japan. As a result, in fiscal 2022, Toyota achieved a recycling/recovery rate of 96% for automobile shredder residue (the legal requirement being 70%) and 95% for air bags (the legal requirement being 85%) and reached the targets set forth in this law. U.S.
Toyota has coordinated with relevant parties to establish a vehicle take-back and recycle system throughout Japan. As a result, in fiscal 2023, Toyota achieved a recycling/recovery rate of 97% for automobile shredder residue (the legal requirement being 70%) and 95% for air bags (the legal requirement being 85%) and reached the targets set forth in this law. U.S.
Under the way we work axis, the BEV Factory is based on the concept of “ALL in ONE TEAM,” a team under one leader that unifies functions and regions beyond the framework of a carmaker, such as Woven by Toyota and external partners.
Under the way we work axis, the BEV Factory is based on the concept of “ALL in ONE TEAM,” a team under one leader that unifies functions and regions beyond the framework of a carmaker, such as Woven by 28 Table of Contents Toyota and external partners.
The new rule is based on Presidential Executive Order 13990 and is more stringent compared to the Safer Affordable Fuel Efficient (“SAFE) Vehicles Rule issued in April 2020 which temporarily relaxed the greenhouse gas emissions rate to 1.5% per year.
The new rule was based on Presidential Executive Order 13990 and is more stringent compared to the Safer Affordable Fuel Efficient (“SAFE”) Vehicles Rule issued in April 2020 which temporarily relaxed the greenhouse gas emissions rate to 1.5% per year.
In order to 60 Table of Contents realize timely and efficient distribution while minimizing costs, Toyota is promoting efforts to optimize each stage of the supply chain. To this end, Toyota has developed a standardized system of global distribution and is supporting the operation of the system at each production base.
In order to realize timely and efficient distribution while minimizing costs, Toyota is promoting efforts to optimize each stage of the supply chain. To this end, Toyota has developed a standardized system of global distribution and is supporting the operation of the system at each production base.
To this end, Toyota is focusing on the following areas: • further improvements in hybrid technologies, including in functions and cost, and contributions to the environment through advancements; • improvement in internal combustion engine fuel economy technology as well as improvement in technology in connection with more stringent emission standards; • development of BEVs, FCEVs and other alternative fuel vehicles; • development of advanced safety technology designed to promote driving and vehicle safety; • development of automated driving technologies • connected car technologies; and • development of technology to bring about more comfortable travel (driving).
To this end, Toyota is focusing on the following areas: • further improvements in hybrid technologies, including in functions and cost, and contributions to the environment through advancements; • improvement in internal combustion engine fuel economy technology as well as improvement in technology in connection with more stringent emission standards; 63 Table of Contents • development of BEVs, FCEVs and other alternative fuel vehicles; • development of advanced safety technology designed to promote driving and vehicle safety; • development of automated driving technologies; • connected car technologies; and • development of technology to bring about more comfortable movement.
Commercial banks and other 35 Table of Contents automobile finance subsidiary companies serving their parent automobile companies are competitors of Toyota’s wholesale financing activities. Competitors in Toyota’s insurance operations are primarily national and regional insurance companies. For information on Toyota’s finance receivables and operating leases, please see “Item 5.
Commercial banks and other automobile finance subsidiary companies serving their parent automobile companies are competitors of Toyota’s wholesale financing activities. Competitors in Toyota’s insurance operations are primarily national and regional insurance companies. For information on Toyota’s finance receivables and operating leases, please see “Item 5.
The EU is now also implementing the Worldwide harmonized Light vehicles Test Procedure (“WLTP”), which was introduced on September 1, 2017. The OBD regulations have also been tightened in terms of both subject parts and regulatory values.
The EU is now also implementing the Worldwide harmonized Light vehicles Test Procedure (“WLTP”), which was introduced on September 1, 2017. The OBD regulations have also 42 Table of Contents been tightened in terms of both subject parts and regulatory values.
On January 6, 2023, the EPA announced a proposed decision to revise primary (health-based) annual particulate matter (PM 2.5 ) standard from its current level of 12.0 µg/m 3 to within the range of 9.0 to 10.0 µg/m 3 .
On January 6, 2023, the EPA announced a proposed decision to revise primary (health-based) annual particulate matter (PM 2.5 ) standard from 12.0 µg/m 3 to within the range of 9.0 to 10.0 µg/m 3 .
Toyota’s financial services business consists primarily of providing financing to dealers and their customers for the purchase or lease of Toyota vehicles. Toyota’s financial services business also provides mainly retail installment credit and leasing 7 Table of Contents through the purchase of installment and lease contracts originated by Toyota dealers.
Toyota’s financial services business consists primarily of providing financing to dealers and their customers for the purchase or lease of Toyota vehicles. Toyota’s financial services business also provides mainly retail installment credit and leasing through the purchase of installment and lease contracts originated by Toyota dealers.
By combining worksite-honed craftsman skills with intelligence to propose new ways of manufacturing and new “automation with human intelligence” processes, we want to do our part in preserving manufacturing in the United States while solving the country’s labor shortage problem. We also plan to start collaborations with Charoen Pokphand and the Siam Cement Group in Thailand.
By combining worksite-honed craftsman skills with intelligence to propose new ways of manufacturing and new “automation with human intelligence” processes, we want to do our part in preserving manufacturing in the United States while solving the country’s labor shortage problem. In Thailand, we started collaborations with Charoen Pokphand and the Siam Cement Group.
Toyota held a domestic market share (excluding mini-vehicles) on a retail basis of 51.9% in fiscal 2021, 51.1% in fiscal 2022 and 51.1% in fiscal 2023. Although Toyota’s principle is to conduct production in regions where it enjoys true competitiveness, it considers Japan to be the source of its good manufacturing practices.
Toyota held a domestic market share (excluding mini-vehicles) on a retail basis of 51.1% in fiscal 2022, 51.1% in fiscal 2023 and 51.8% in fiscal 2024. Although Toyota’s principle is to conduct production in regions where it enjoys true competitiveness, it considers Japan to be the source of its good manufacturing practices.
If implemented this proposed standard, as well as any future NAAQS revisions to other criteria pollutants, could lead to additional pollution control requirements on the industry, including on Toyota’s manufacturing operations. European Standards In the EU, the Ambient Air Quality and Clearer Air for Europe Directive (Directive 2008/50/EC) sets the environmental standards for air quality.
This revised standard, as well as any future NAAQS revisions to other criteria pollutants, could lead to additional pollution control requirements on the industry, including on Toyota’s manufacturing operations. European Standards In the EU, the Ambient Air Quality and Clearer Air for Europe Directive (Directive 2008/50/EC) sets the environmental standards for air quality.
Scope 3 Category 11 emissions (gCO 2 e/km) reduction targets are in line with the science-based criteria to hold the increase in the global average temperature to well below 2 degrees Celsius above pre-industrial levels.
Scope 3 Category 11 emissions (gCO2e/km) reduction targets are in line with the science-based criteria to hold the increase in the global average temperature to well below 2 degrees Celsius above pre-industrial levels.
Information on the Company — 4.B Business Overview — Capital Expenditures and Divestitures” for a description of Toyota’s principal capital expenditures and divestitures between April 1, 2020 and March 31, 2023 and information concerning Toyota’s principal capital expenditures and divestitures currently in progress. Toyota’s principal executive offices are located at 1 Toyota-cho, Toyota City, Aichi Prefecture 471-8571, Japan.
Information on the Company — 4.B Business Overview — Capital Expenditures and Divestitures” for a description of Toyota’s principal capital expenditures and divestitures between April 1, 2021 and March 31, 2024 and information concerning Toyota’s principal capital expenditures and divestitures currently in progress. Toyota’s principal executive offices are located at 1 Toyota-cho, Toyota City, Aichi Prefecture 471-8571, Japan.
In addition, Toyota introduced the Lexus brand to the Japanese market in August 2005, and currently distributes the Lexus brand vehicles through a network of 183 new-vehicle sales outlets dedicated to the Lexus brand in order to enhance its competitiveness in the domestic luxury automotive market. The following table provides information on the dealer network as of March 31, 2023.
In addition, Toyota introduced the Lexus brand to the Japanese market in August 2005, and currently distributes the Lexus brand vehicles through a network of 187 new-vehicle sales outlets dedicated to the Lexus brand in order to enhance its competitiveness in the domestic luxury automotive market. The following table provides information on the dealer network as of March 31, 2024.
Under these laws, if a business entity establishes or alters any facility that is regulated by these laws, the business entity is required to give prior notice to regulators, and if a business entity discharges, uses or stores substances that are environmental burdens or causes noise or vibration from such facility, the business entity is also required to comply with the applicable standards.
Under these laws, if a business entity establishes or alters any facility that is regulated by these laws, the business entity is required to give prior notice to regulators, and if a business entity discharges, uses or stores substances that are environmental burdens or causes noise or vibration from such facility, the business entity is 47 Table of Contents also required to comply with the applicable standards.
Since its market launch in 2015, Toyota Safety Sense has been installed in more than 38 million vehicles globally as of March 2023. Toyota Safety Sense is now available on nearly all passenger car models (as standard or an option) in the Japanese, United States, and European markets.
Since its market launch in 2015, Toyota Safety Sense has been installed in more than 46 million vehicles globally as of March 2024. Toyota Safety Sense is now available on nearly all passenger car models (as standard or an option) in the Japanese, United States, and European markets.
For PHEVs, by increasing battery efficiency to extend the EV-mode driving range beyond 200 km, we will reposition PHEVs as “the practical BEV” and will work harder on developing this as another BEV option. For FCEVs, we will pursue mass production centered on commercial vehicles.
For PHEVs, by increasing battery efficiency to extend the EV-mode driving range beyond 200 km, we will reposition PHEVs as “the practical BEV” and will work harder on developing this as another BEV option. 12 Table of Contents For FCEVs, we will pursue mass production centered on commercial vehicles.
European Standards In the EU, the average carbon dioxide emissions limit for light commercial vehicles is currently 147 grams per kilometer and for passenger vehicles 95 grams per kilometer. Manufacturers failing to meet their targets incur penalties of €95 from the first gram of exceedance onwards in 2019 and beyond.
European Standards In the EU, the average carbon dioxide emissions limit for light commercial vehicles is currently 147 grams per kilometer and for passenger vehicles 95 grams per kilometer. Manufacturers failing to meet their targets incur penalties in the amount between €5 to €95 per vehicle from the first gram of exceedance onwards in 2019 and beyond.
We will accelerate the taking on of challenges for the future, with a new management style of “simultaneously and organically working as a team.” Aiming for the Future We aim to transform into a mobility company.
We will accelerate the taking on of challenges for the future, with a new management style of “simultaneously and organically working as a team.” 10 Table of Contents Aiming for the Future We aim to transform into a mobility company.
Like our manual transmission EVs, we plan to deliver exciting surprises and fun to our customers with technologies achievable only by a carmaker. 23 Table of Contents On the manufacturing axis, the car body will be constructed from three main components in a new modular structure.
Like our manual transmission EVs, we plan to deliver exciting surprises and fun to our customers with technologies achievable only by a carmaker. On the manufacturing axis, the car body will be constructed from three main components in a new modular structure.
Under the rule, 37 Table of Contents tailpipe emission standards for volatile organic compounds, carbon monoxide, nitrogen oxides, and particulate matter, as well as standards for evaporative emissions and guaranteed useful life (which relates to a vehicle’s ability to meet emission limits over time), would become increasingly stringent in phases from model years 2017 to 2025.
Under the rule, tailpipe emission standards for volatile organic compounds, carbon monoxide, nitrogen oxides, and particulate matter, as well as standards for evaporative emissions and guaranteed useful life (which relates to a vehicle’s ability to meet emission limits over time), become increasingly stringent in phases from model years 2017 to 2025.
With respect to diversification of mobility, we have developed an easy-lock system for securing wheelchairs with a single motion, utilizing the know-how we have accumulated over many years of developing welfare vehicles, and we plan to start installing this system in vehicles.
With respect to diversification of mobility, we have developed an easy-lock system for securing wheelchairs with a single motion, utilizing the know-how we have accumulated over many years of developing welfare vehicles, and we started installing this system in vehicles in 2023.
Toyota dealers in Japan and in other countries and regions also engage in vehicle insurance sales. 36 Table of Contents Other Financial Services Toyota Finance Corporation launched its credit card business in April 2001 and began issuing Lexus credit cards in 2005 when the Lexus brand was introduced in Japan.
Toyota dealers in Japan and in other countries and regions also engage in vehicle insurance sales. Other Financial Services Toyota Finance Corporation launched its credit card business in April 2001 and began issuing Lexus credit cards in 2005 when the Lexus brand was introduced in Japan.
In addition, CJPT is working with AEON KYUSHU Co., Ltd. and AEON GLOBAL SCM Co., Ltd. on a logistics improvement project for the AEON Group in the Kyushu area that will solve problems faced by the logistics industry, such as soaring logistics costs and driver shortages.
CJPT is working with AEON KYUSHU Co., Ltd. and AEON GLOBAL SCM Co., Ltd. on a logistics improvement project for the AEON Group in the Kyushu area that is expected to solve problems faced by the logistics industry, such as soaring logistics costs and driver shortages.
Mexico 100.00 100.00 Toyota Motor Manufacturing de Guanajuato, S.A.de C.V. Mexico 100.00 100.00 Toyota Motor Europe NV/SA Belgium 100.00 100.00 Toyota Motor Manufacturing France S.A.S. France 100.00 100.00 Toyota France S.A.S France 100.00 100.00 Toyota Motor Finance (Netherlands) B.V. Netherlands 100.00 100.00 Toyota Central Europe Sp. z o.o.
Mexico 100.00 100.00 Toyota Motor Manufacturing de Guanajuato, S.A.de C.V. Mexico 100.00 100.00 Toyota Motor Europe NV/SA Belgium 100.00 100.00 Toyota Motor Manufacturing France S.A.S. France 100.00 100.00 Toyota Motor Italia S.p.A. Italy 100.00 100.00 Toyota France S.A.S. France 100.00 100.00 Toyota Motor Finance (Netherlands) B.V. Netherlands 100.00 100.00 Toyota Central Europe Sp. z o.o.
In addition, by drawing on the strengths of our Toyota Production System (“TPS”), we will change the way we work to reduce the number of processes for the BEV production line by half. This will entail a shift to more efficient lines, including autonomous inspections and unmanned transport powered by connected technology.
In addition, by drawing on the strengths of TPS, we will change the way we work to reduce the number of processes for the BEV production line by half. This will entail a shift to more efficient lines, including autonomous inspections and unmanned transport powered by connected technology.
The concept for Woven City can be traced back to the Great East Japan Earthquake in 2011. As our President, Akio Toyoda sought to create jobs for the region’s people, who were hit hardest by the disaster, by creating a third base of operations in the Tohoku region.
The concept for Woven City can be traced back to the Great East Japan Earthquake in 2011. While he was President, Akio Toyoda sought to create jobs for the region’s people, who were hit hardest by the disaster, by creating a third base of operations in the Tohoku region.
The system continues to add features and improve performance to enhance the driving experience and provide the latest safety technologies even after the vehicle has been delivered to the customer. 31 Table of Contents Cars have many uses, and customer needs continue to diversify.
The system continues to add features and improve performance to enhance the driving experience and provide the latest safety technologies even after the vehicle has been delivered to the customer. Cars have many uses, and customer needs continue to diversify.
The members of the Committee discuss and make decisions concerning obtaining and utilizing important intellectual property conducive to management and for responding to management risks related to intellectual property. In 2022, Toyota filed approximately 14,000 patent applications domestically and internationally.
The members of the Committee discuss and make decisions concerning obtaining and utilizing important intellectual property conducive to management and for responding to management risks related to intellectual property. In 2023, Toyota filed approximately 15,000 patent applications domestically and internationally.
As of March 31, 2023, property, plant and equipment having a net book value of approximately ¥1,498.4 billion was pledged as collateral securing indebtedness incurred by Toyota Motor Corporation’s consolidated subsidiaries. Toyota believes that there does not exist any material environmental issues that may affect the company’s utilization of its assets.
As of March 31, 2024, property, plant and equipment having a net book value of approximately ¥1,574.3 billion was pledged as collateral securing indebtedness incurred by Toyota Motor Corporation’s consolidated subsidiaries. Toyota believes that there does not exist any material environmental issues that may affect the company’s utilization of its assets.
The joint venture with China FAW Group manufactures models such as the Corolla, Vios, RAV4, bZ4X and bZ3 and the joint venture with Guangzhou Automobile Group Co., Ltd. manufactures models such as the Camry, Yaris, Highlander and bZ4X.
The joint venture with China FAW Group manufactures models such as the Corolla, RAV4, bZ4X and bZ3 and the joint venture with Guangzhou Automobile Group Co., Ltd. manufactures models such as the Camry, Levin, Highlander and bZ4X.
Toyota considers all its principal manufacturing facilities and other significant properties to be in good condition and adequate to meet the needs of its operations. See “Item 4. Information on the Company — 4.B Business Overview — Capital Expenditures and Divestitures” for a description of Toyota’s material plans to construct, expand or improve facilities. ITEM 4A. UNRESOLVED STAFF COMMENTS None.
Toyota considers all its principal manufacturing facilities and other significant properties to be in good condition and adequate to meet the needs of its operations. See “Item 4. Information on the Company — 4.B Business Overview — Capital Expenditures and Divestitures” for a description of Toyota’s material plans to construct, expand or improve facilities.
The first is localizing R&D and production in countries within the major markets. We will accelerate our efforts by establishing local bases, mainly in Europe and China. The second is strengthening alliances with leading partners. We will do our best to deliver affordable fuel cells to our customers by consolidating sufficient quantities through alliances. The third is competitiveness and technology.
The first is localizing R&D and production in countries within the major markets. We are working to accelerate our efforts by establishing local bases, mainly in Europe and China. The second is strengthening alliances with leading partners. We do our best to deliver affordable fuel cells to our customers by consolidating sufficient quantities through alliances.
Information contained on or accessible through Toyota’s website is not part of this annual report on Form 20-F. 4.B BUSINESS OVERVIEW Toyota primarily conducts business in the automotive industry. Toyota also conducts business in finance and other industries. Toyota sold 8,822 thousand vehicles in fiscal 2023 on a consolidated basis.
Information contained on or accessible through Toyota’s website is not part of this annual report on Form 20-F. 4.B BUSINESS OVERVIEW Toyota primarily conducts business in the automotive industry. Toyota also conducts business in finance and other industries. Toyota sold 9,443 thousand vehicles in fiscal 2024 on a consolidated basis.
Japan 100.00 100.00 TOYOTA Mobility Tokyo Inc. Japan 100.00 100.00 Toyota Finance Corporation Japan 100.00 100.00 Toyota Mobility Parts Co., Ltd. Japan 54.08 54.08 Toyota Auto Body Co., Ltd. Japan 100.00 100.00 Toyota Motor Kyushu, Inc. Japan 100.00 100.00 Toyota Motor East Japan, Inc. Japan 100.00 100.00 Daihatsu Motor Kyushu Co., Ltd.
Japan 50.11 50.19 Daihatsu Motor Co., Ltd. Japan 100.00 100.00 TOYOTA Mobility Tokyo Inc. Japan 100.00 100.00 Toyota Finance Corporation Japan 100.00 100.00 Toyota Mobility Parts Co., Ltd. Japan 54.08 54.08 Toyota Auto Body Co., Ltd. Japan 100.00 100.00 Toyota Motor Kyushu, Inc. Japan 100.00 100.00 Toyota Motor East Japan, Inc.
In cases where additional security interests would be required, the finance companies take dealership assets or personal assets, or both, as additional security. If a dealer defaults, the finance companies have the right to liquidate any assets acquired and seek legal remedies.
The finance companies acquire security interests in vehicles financed at wholesale. In cases where additional security interests would be required, the finance companies take dealership assets or personal assets, or both, as additional security. If a dealer defaults, the finance companies have the right to liquidate any assets acquired and seek legal remedies.
The following table sets forth for each of Toyota Motor Corporation’s principal subsidiaries, the country of incorporation and the percentage ownership interest and the voting interest held by Toyota Motor Corporation. Name of Subsidiary Country of Incorporation Percentage Ownership Interest Percentage Voting Interest Toyota Financial Services Corporation Japan 100.00 100.00 Hino Motors, Ltd. Japan 50.11 50.19 Daihatsu Motor Co., Ltd.
The following table sets forth for each of Toyota Motor Corporation’s principal subsidiaries, the country of incorporation and the percentage ownership interest and the voting interest held by Toyota Motor Corporation. Name of Subsidiary Country of Incorporation Percentage Ownership Interest Percentage Voting Interest % % Toyota Financial Services Corporation Japan 100.00 100.00 Hino Motors, Ltd.
We also aim to achieve carbon neutrality at all of our global plants by 2035. Also, we will overhaul existing supply chains by working with suppliers to procure superior quality parts at lower prices. To realize these transformations, we are creating a new specialized unit to develop BEVs.
We also aim to achieve carbon neutrality at all of our global plants by 2035. Also, we will overhaul existing supply chains by working with suppliers to procure superior quality parts at lower prices. To realize these transformations, we created a new specialized unit in May 2023 to develop BEVs.
We will work on “innovative evolution of competitive next-generation fuel cell technologies,” such as next-generation cell technologies and fuel cell systems. We will work toward full-scale commercialization as we move forward with these initiatives. We expect that our next-generation system will achieve significant FCEV production cost reduction through technological progress, volume efficiency, and localization.
The third is competitiveness and technology. We are working on “innovative evolution of competitive next-generation fuel cell technologies,” such as next-generation cell technologies and fuel cell systems. We will work toward full-scale commercialization as we move forward with these initiatives. We expect that our next-generation system will achieve significant FCEV production cost reduction through technological progress, volume efficiency, and localization.
Chinese Standards The next-generation emissions regulations for passenger vehicles, or Level 6 Emissions Regulations (China 6), were issued as GB18352.6-2016 at the end of 2016, pursuant to which tighter requirements will be implemented in two steps, depending on the regulated subjects and the implementation timing.
Currently, detailed requirements are being considered for the introduction of the new regulations. Chinese Standards The next-generation emissions regulations for passenger vehicles, or Level 6 Emissions Regulations (China 6), were issued as GB18352.6-2016 at the end of 2016, pursuant to which tighter requirements will be implemented in two steps, depending on the regulated subjects and the implementation timing.
We believe that hydrogen engine technology is thus one option that offers great potential to contribute to carbon neutrality while making use of technologies for internal combustion engines built up over the decades and also protecting engine-related employment in the automotive industry.
The hydrogen engine is thus one option that offers great potential to contribute to carbon neutrality while making use of technologies for internal combustion engines built up over the decades and protecting engine-related jobs in the automotive industry.
In March 2023, under the shared value of “the company wishes for the happiness of its employees and employees wish for the development of the Company,” we held discussions between labor and management on various measures for the future based on the common recognition that “people” are our greatest asset.
Under the shared value of “the company wishes for the happiness of its employees and employees wish for the development of the Company,” we have had discussions between labor and management on various measures for the future based on the common recognition that “people” are our greatest asset.
To respond flexibly to fluctuations in demand in each of its production operations throughout the world, Toyota continually reviews and implements appropriate 66 Table of Contents production measures such as revising takt time and adjusting days of operation.
To respond flexibly to fluctuations in demand in each of its production operations throughout the world, Toyota continually reviews and implements appropriate production measures such as revising take time and adjusting days of operation.
Therefore, for all of the aforementioned matters, which Toyota is in discussions to resolve, any losses that are beyond the amounts accrued could have an adverse effect on Toyota’s financial position, results of operations or cash flows. 64 Table of Contents 4.C ORGANIZATIONAL STRUCTURE As of March 31, 2023, Toyota Motor Corporation had 207 Japanese subsidiaries and 362 overseas subsidiaries.
Therefore, for all of the aforementioned matters, which Toyota is in discussions to resolve, any losses that are beyond the amounts accrued could have an adverse effect on Toyota’s financial position, results of operations or cash flows. 4.C ORGANIZATIONAL STRUCTURE As of March 31, 2024, Toyota Motor Corporation had 206 Japanese subsidiaries and 371 overseas subsidiaries.
As of March 31, 2023, Toyota Finance Corporation has 15.7 million card holders (including Lexus credit card holders). All Other Operations In addition to its automotive operations and financial services operations, Toyota is involved in a number of other non-automotive business activities.
As of March 31, 2024, Toyota Finance Corporation has 16.2 million card holders (including Lexus credit card holders). All Other Operations In addition to its automotive operations and financial services operations, Toyota is involved in a number of other non-automotive business activities.
Toyota Motor Credit Corporation provides a wide range of financial services, including retail financing, retail leasing, wholesale financing and insurance. Toyota Finance Corporation also provides a range of financial services, including retail financing, retail leasing and credit cards. Toyota’s other finance subsidiaries provide services including retail financing, retail leasing and wholesale financing.
Toyota Motor Credit Corporation provides a wide range of financial services, including retail financing, retail leasing, wholesale financing and insurance. Toyota Finance Corporation also provides a range of financial services, including retail financing, retail leasing and credit cards.
To respond to the rapid changes in the market, we will establish in July 2023 a new business unit called Hydrogen Factory, which will be able to make rapid decisions under one leader, from sales to development and production, all at once. The Hydrogen Factory will promote business on three axes.
To respond to the rapid changes in the market, we established in July 2023 a new business unit called Hydrogen Factory, which is able to make rapid decisions under one leader, from sales to development and production, all at once. The Hydrogen Factory promotes business on three axes.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeNorth America Thousands of units Year ended March 31, 2022 v. 2021 Change 2021 2022 Amount Percentage Toyota’s consolidated vehicle unit sales 2,313 2,394 81 3.5 % Yen in millions Year ended March 31, 2022 v. 2021 Change 2021 2022 Amount Percentage Sales revenues: Sales of products 7,995,051 9,578,534 1,583,483 19.8 % Financial services 1,496,752 1,587,945 91,193 6.1 Total 9,491,803 11,166,479 1,674,676 17.6 % Sales revenues in North America increased due primarily to the 81 thousand vehicles increase in vehicle unit sales and the favorable impact of changes in exchange rates compared with the prior fiscal year. 83 Table of Contents Europe Thousands of units Year ended March 31, 2022 v. 2021 Change 2021 2022 Amount Percentage Toyota’s consolidated vehicle unit sales 959 1,017 58 6.0 % Yen in millions Year ended March 31, 2022 v. 2021 Change 2021 2022 Amount Percentage Sales revenues: Sales of products 2,976,259 3,671,205 694,946 23.3 % Financial services 158,229 196,642 38,413 24.3 Total 3,134,489 3,867,847 733,359 23.4 % Sales revenues in Europe increased due primarily to the 58 thousand vehicles increase in vehicle unit sales and the favorable impact of changes in exchange rates compared with the prior fiscal year.
Biggest changeThe increase in vehicle unit sales is attributable mainly to strong sales of such models as the RAV4 and Corolla supported by strong market conditions as compared to the prior year. 77 Table of Contents Europe Thousands of units Year ended March 31, 2024 v. 2023 Change 2023 2024 Amount Percentage Toyota’s consolidated vehicle unit sales 1,030 1,192 162 15.7 % Yen in millions Year ended March 31, 2024 v. 2023 Change 2023 2024 Amount Percentage Sales revenues: Sales of products 4,003,043 5,255,395 1,252,352 31.3 % Financial services 270,693 426,369 155,676 57.5 Total 4,273,735 5,681,764 1,408,028 32.9 % Sales revenues in Europe increased due primarily to the 162 thousand vehicles increase in vehicle unit sales, the favorable impact of changes in exchange rates compared with the prior fiscal year and price revisions.
The cost reduction efforts described above related to ongoing value engineering and value analysis activities, the use of common parts resulting in a reduction of part types and other manufacturing initiatives designed to reduce the costs of vehicle production.
The cost reduction efforts described above related to ongoing value engineering and value analysis activities, the use of common parts resulting in a reduction of part types and other manufacturing initiatives designed to reduce the costs of vehicle production.
Foreign exchange gains and losses include the differences between the value of foreign currency denominated assets and liabilities recognized through transactions in foreign currencies translated at prevailing exchange rates and the value at the date the transaction settled during the fiscal year, including those settled using forward foreign currency exchange contracts, or the value translated by appropriate year-end exchange rates.
Foreign exchange gains and losses include the differences between the value of foreign currency denominated assets and liabilities recognized through transactions in foreign currencies translated at prevailing exchange rates and the value at the date the transaction settled during the fiscal year, including those settled using forward foreign currency exchange contracts, or the value translated by appropriate year-end exchange rates.
Segment Information The following is a discussion of the results of operations for each of Toyota’s operating segments. The amounts presented are prior to intersegment elimination.
Segment Information The following is a discussion of the results of operations for each of Toyota’s operating segments. The amounts presented are prior to intersegment elimination.
Basic Concept Regarding the Selection of Accounting Standards TMC has adopted IFRS for its consolidated financial statements in order to improve the international comparability of its financial information in the capital markets, among other reasons, beginning with the first quarter of the fiscal year ended March 31, 2021.
Basic Concept Regarding the Selection of Accounting Standards TMC has adopted IFRS Accounting Standards for its consolidated financial statements in order to improve the international comparability of its financial information in the capital markets, among other reasons, beginning with the first quarter of the fiscal year ended March 31, 2021.
In Japan, research and development operations are led by Toyota and Toyota Central Research & Development Laboratories, Inc., which works closely with Daihatsu, Hino, Toyota Auto Body Co., Ltd., Toyota Motor East Japan, Inc., and many other Toyota group companies. Overseas, Toyota has a worldwide network of technical centers as well as design and motorsports research and development centers.
In Japan, research and development operations are led by Toyota and Toyota Central Research & Development Laboratories, Inc., which works closely with Daihatsu, Hino, Toyota Auto Body Co., Ltd., Toyota Motor East Japan, Inc., and many other group companies. Overseas, Toyota has a worldwide network of technical centers as well as design and motorsports research and development centers.
A portion of the derivative instruments are entered into to hedge interest rate risk from an economic perspective and are not designated as a hedge of specific assets or liabilities on Toyota’s consolidated statements of financial position and accordingly, unrealized gains or losses related to derivatives that are not designated as a hedge are recognized currently in operations.
A portion of the derivative instruments are entered into to manage interest rate risk from an economic perspective and are not designated as a hedge of specific assets or liabilities on Toyota’s consolidated statements of financial position and accordingly, unrealized gains or losses related to derivatives that are not designated as a hedge are recognized currently in operations.
Yen in millions Year ended March 31, 2023 v. 2022 Change 2022 2023 Amount Percentage Vehicles 23,739,442 28,394,256 4,654,814 19.6 % Parts and components for production 1,504,215 1,710,422 206,208 13.7 Parts and components for after service 2,407,143 2,866,196 459,053 19.1 Other 881,193 805,995 (75,198 ) (8.5 ) Total Automotive 28,531,993 33,776,870 5,244,877 18.4 All Other 541,436 590,749 49,314 9.1 Total sales of products 29,073,428 34,367,619 5,294,191 18.2 Financial services 2,306,079 2,786,679 480,600 20.8 Total sales revenues 31,379,507 37,154,298 5,774,791 18.4 % 72 Table of Contents Toyota’s sales revenues include sales revenues from sales of products, consisting of sales revenues from automotive operations and all other operations, which increased by 18.2% during fiscal 2023 compared with the prior fiscal year to ¥34,367.6 billion, and sales revenues from financial services operations, which increased by 20.8% during fiscal 2023 compared with the prior fiscal year to ¥2,786.6 billion.
Yen in millions Year ended March 31, 2023 v. 2022 Change 2022 2023 Amount Percentage Vehicles 23,739,442 28,394,256 4,654,814 19.6 % Parts and components for production 1,504,215 1,710,422 206,208 13.7 Parts and components for after service 2,407,143 2,866,196 459,053 19.1 Other 881,193 805,995 (75,198 ) (8.5 ) Total Automotive 28,531,993 33,776,870 5,244,877 18.4 All Other 541,436 590,749 49,314 9.1 Total sales of products 29,073,428 34,367,619 5,294,191 18.2 Financial services 2,306,079 2,786,679 480,600 20.8 Total sales revenues 31,379,507 37,154,298 5,774,791 18.4 % Toyota’s sales revenues include sales revenues from sales of products, consisting of sales revenues from automotive operations and all other operations, which increased by 18.2% during fiscal 2023 compared with the prior fiscal year to ¥34,367.6 billion, and sales revenues from financial services operations, which increased by 20.8% during fiscal 2023 compared with the prior fiscal year to ¥2,786.6 billion.
Yen in millions Year ended March 31, 2023 v. 2022 Change 2022 2023 Amount Percentage Automotive: Sales revenues 28,605,738 33,820,000 5,214,263 18.2 % Operating income 2,284,290 2,180,637 (103,653 ) (4.5 ) Financial Services: Sales revenues 2,324,026 2,809,647 485,621 20.9 Operating income 657,001 437,516 (219,485 ) (33.4 ) All Other: Sales revenues 1,129,876 1,224,943 95,067 8.4 Operating income 42,302 103,451 61,150 144.6 Intersegment elimination/unallocated amount: Sales revenues (680,133 ) (700,293 ) (20,160 ) — Operating income 12,104 3,420 (8,684 ) — Total Sales revenues 31,379,507 37,154,298 5,774,791 18.4 Operating income 2,995,697 2,725,025 (270,672 ) (9.0 ) 79 Table of Contents Automotive Operations Segment The automotive operations segment is Toyota’s largest operating segment by sales revenues.
Yen in millions Year ended March 31, 2023 v. 2022 Change 2022 2023 Amount Percentage Automotive: Sales revenues 28,605,738 33,820,000 5,214,263 18.2% Operating income 2,284,290 2,180,637 (103,653 ) (4.5) Financial Services: Sales revenues 2,324,026 2,809,647 485,621 20.9 Operating income 657,001 437,516 (219,485 ) (33.4) All Other: Sales revenues 1,129,876 1,224,943 95,067 8.4 Operating income 42,302 103,451 61,150 144.6 Intersegment elimination/unallocated amount: Sales revenues (680,133 ) (700,293 ) (20,160 ) — Operating income 12,104 3,420 (8,684 ) — Total Sales revenues 31,379,507 37,154,298 5,774,791 18.4% Operating income 2,995,697 2,725,025 (270,672 ) (9.0)% Automotive Operations Segment The automotive operations segment is Toyota’s largest operating segment by sales revenues.
Asia Thousands of units Year ended March 31, 2023 v. 2022 Change 2022 2023 Amount Percentage Toyota’s consolidated vehicle unit sales 1,543 1,751 208 13.5 % Yen in millions Year ended March 31, 2023 v. 2022 Change 2022 2023 Amount Percentage Sales revenues: Sales of products 6,345,172 7,832,020 1,486,848 23.4 % Financial services 185,394 212,886 27,492 14.8 Total 6,530,566 8,044,906 1,514,340 23.2 % 74 Table of Contents Sales revenues in Asia increased due primarily to the 208 thousand vehicles increase in vehicle unit sales and the favorable impact of changes in exchange rates compared with the prior fiscal year.
Asia Thousands of units Year ended March 31, 2023 v. 2022 Change 2022 2023 Amount Percentage Toyota’s consolidated vehicle unit sales 1,543 1,751 208 13.5 % Yen in millions Year ended March 31, 2023 v. 2022 Change 2022 2023 Amount Percentage Sales revenues: Sales of products 6,345,172 7,832,020 1,486,848 23.4 % Financial services 185,394 212,886 27,492 14.8 Total 6,530,566 8,044,906 1,514,340 23.2 % Sales revenues in Asia increased due primarily to the 208 thousand vehicles increase in vehicle unit sales and the favorable impact of changes in exchange rates compared with the prior fiscal year.
Toyota does not manage any subset of its automotive operations, such as domestic or overseas operations or parts, as separate management units. Geographic Breakdown The following table sets forth Toyota’s sales revenues in each geographic market based on the country location of TMC or the subsidiaries that transacted the sale with the external customer for the past three fiscal years.
Toyota does not manage any subset of its automotive operations, such as domestic or overseas operations or parts, as separate management units. 74 Table of Contents Geographic Breakdown The following table sets forth Toyota’s sales revenues in each geographic market based on the country location of TMC or the subsidiaries that transacted the sale with the external customer for the past three fiscal years.
Other Thousands of units Year ended March 31, 2023 v. 2022 Change 2022 2023 Amount Percentage Toyota’s consolidated vehicle unit sales 1,352 1,565 213 15.8 % Yen in millions Year ended March 31, 2023 v. 2022 Change 2022 2023 Amount Percentage Sales revenues: Sales of products 2,756,840 3,225,962 469,122 17.0 % Financial services 171,343 246,232 74,889 43.7 Total 2,928,183 3,472,193 544,011 18.6 % Sales revenues in Other increased due primarily to the 213 thousand vehicles increase in vehicle unit sales compared with the prior fiscal year.
Other Thousands of units Year ended March 31, 2023 v. 2022 Change 2022 2023 Amount Percentage Toyota’s consolidated vehicle unit sales 1,352 1,565 213 15.8 % Yen in millions Year ended March 31, 2023 v. 2022 Change 2022 2023 Amount Percentage Sales revenues: Sales of products 2,756,840 3,225,962 469,122 17.0 % Financial services 171,343 246,232 74,889 43.7 Total 2,928,183 3,472,193 544,011 18.6 % 87 Table of Contents Sales revenues in Other increased due primarily to the 213 thousand vehicles increase in vehicle unit sales compared with the prior fiscal year.
In January 2021, TRI-AD was reorganized into Woven Planet Group comprising four companies — Woven Planet Holdings, Inc., which is responsible for decision-making for the entire group and creates new business opportunities; Woven Core, Inc., which assumed the business of TRI-AD and is responsible for the development of automated driving technologies; Woven Alpha, Inc., which is responsible for the development of new projects such as Woven City and Arene, a software platform; and Woven Capital, L.P. with a total investment value of $800 million, which invests in growth-stage companies in areas such as autonomous driving mobility, artificial intelligence, and smart city.
In January 2021, TRI-AD was reorganized into Woven Planet Group comprising four companies — Woven Planet Holdings, Inc., which is responsible for decision-making for the entire group and creates new business opportunities; Woven Core, Inc., which assumed the business of TRI-AD and is responsible for the development of automated driving technologies; Woven Alpha, Inc., which is responsible for the development of new projects such as Woven City 98 Table of Contents and Arene, a software platform; and Woven Capital, L.P. with a total investment value of $800 million, which invests in growth-stage companies in areas such as autonomous driving mobility, artificial intelligence, and smart city.
Toyota uses its securitization program as part of its funding through special purpose entities for its financial services operations. Toyota is considered as the primary beneficiary of these special purpose entities and therefore consolidates them. Toyota has not entered into any off-balance sheet securitization transactions during fiscal 2023.
Toyota uses its securitization program as part of its funding through special purpose entities for its financial services operations. Toyota is considered as the primary beneficiary of these special purpose entities and therefore consolidates them. Toyota has not entered into any off-balance sheet securitization transactions during fiscal 2024.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 5.A OPERATING RESULTS Financial information discussed in this section is derived from Toyota’s consolidated financial statements that appear elsewhere in this annual report. The financial statements have been prepared in accordance with IFRS, as issued by the IASB.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 5.A OPERATING RESULTS Financial information discussed in this section is derived from Toyota’s consolidated financial statements that appear elsewhere in this annual report. The financial statements have been prepared in accordance with IFRS Accounting Standards, as issued by the IASB.
In fiscal 2024, Toyota expects to sufficiently fund its cash requirements, including those relating to capital expenditures as well as its research and development activities, through cash and cash equivalents on hand, cash generated by operations, the issuance of corporate bonds, and debt financing.
In fiscal 2025, Toyota expects to sufficiently fund its cash requirements, including those relating to capital expenditures as well as its research and development activities, through cash and cash equivalents on hand, cash generated by operations, the issuance of corporate bonds, and debt financing.
This increase mainly reflected the unfavorable impact of fluctuations in foreign currency translation rates, the unfavorable impact of soaring materials prices, and the impact of changes in vehicle unit sales and sales mix. Cost of Financial Services Cost of financial services increased by ¥555.6 billion, or 48.0%, to ¥1,712.7 billion during fiscal 2023 compared with the prior fiscal year.
This increase mainly reflected the unfavorable impact of fluctuations in foreign currency translation rates, the unfavorable impact of soaring materials prices, and the impact of changes in vehicle unit sales and sales mix. 88 Table of Contents Cost of Financial Services Cost of financial services increased by ¥555.6 billion, or 48.0%, to ¥1,712.7 billion during fiscal 2023 compared with the prior fiscal year.
(R&I), as of May 31, 2023. A credit rating is not a recommendation to buy, sell or hold securities. A credit rating may be subject to withdrawal or revision at any time. Each rating should be evaluated separately of any other rating.
(R&I), as of May 31, 2024. A credit rating is not a recommendation to buy, sell or hold securities. A credit rating may be subject to withdrawal or revision at any time. Each rating should be evaluated separately of any other rating.
This decrease in operating income was due mainly to the ¥1,290.0 billion aggregate unfavorable impact of factors categorized as cost reduction efforts (including fluctuations in raw materials prices) and the ¥525.0 billion aggregate unfavorable impact of changes in expenses and expense reduction efforts, partially offset by the ¥1,220.0 billion favorable impact of changes in exchange rates and the ¥755.0 billion impact of marketing efforts.
This decrease in operating income was due mainly to the ¥1,290.0 billion aggregate unfavorable impact of factors categorized as cost reduction efforts (including 92 Table of Contents fluctuations in raw materials prices) and the ¥525.0 billion aggregate unfavorable impact of changes in expenses and expense reduction efforts, partially offset by the ¥1,220.0 billion favorable impact of changes in exchange rates and the ¥755.0 billion impact of marketing efforts.
Marketing efforts includes changes in vehicle unit sales and sales mix, sales expenses and other. “Other” includes valuation gains or losses from interest rate swaps and interest rate currency swaps. The favorable impact of changes in exchange rates was due mainly to the ¥590.0 billion impact of overseas transactions such as imports and exports denominated in foreign currencies.
Marketing efforts includes changes in vehicle unit sales and sales mix, sales expenses and other. “Other” includes valuation gains or losses from interest rate swaps and interest rate currency swaps. The favorable impact of changes in exchange rates was due mainly to the ¥1,200.0 billion impact of overseas transactions such as imports and exports denominated in foreign currencies.
Overview The business segments of Toyota include automotive operations, financial services operations and all other operations. Automotive operations are Toyota’s most significant business segment, accounting for 89% of Toyota’s total revenues before the elimination of intersegment revenues for fiscal 2023.
Overview The business segments of Toyota include automotive operations, financial services operations and all other operations. Automotive operations are Toyota’s most significant business segment, accounting for 89% of Toyota’s total revenues before the elimination of intersegment revenues for fiscal 2024.
Information on the Company — 4.B Business Overview — Capital Expenditures and Divestitures” for information regarding Toyota’s material capital expenditures and divestitures for fiscal 2021, 2022 and 2023, and information concerning Toyota’s principal capital expenditures and divestitures currently in progress.
Information on the Company — 4.B Business Overview — Capital Expenditures and Divestitures” for information regarding Toyota’s material capital expenditures and divestitures for fiscal 2022, 2023 and 2024, and information concerning Toyota’s principal capital expenditures and divestitures currently in progress.
In fiscal 2022 and 2023, the Japanese yen was on average weaker against the U.S. dollar and the euro in comparison to fiscal 2021 and 2022, respectively. At the end of each of fiscal 2022 and 2023, the Japanese yen was weaker against the U.S. dollar and the euro in comparison to the end of fiscal 2021 and 2022, respectively.
In fiscal 2023 and 2024, the Japanese yen was on average weaker against the U.S. dollar and the euro in comparison to fiscal 2022 and 2023, respectively. At the end of each of fiscal 2023 and 2024, the Japanese yen was weaker against the U.S. dollar and the euro in comparison to the end of fiscal 2022 and 2023, respectively.
This increase was due mainly to an increase during fiscal 2023 in net income of consolidated subsidiaries. Net Income Attributable to Toyota Motor Corporation Net income attributable to Toyota Motor Corporation decreased by ¥398.7 billion, or 14.0%, to ¥2,451.3 billion during fiscal 2023 compared with the prior fiscal year.
This increase was due mainly to an increase during fiscal 2023 in net income of consolidated subsidiaries. 91 Table of Contents Net Income Attributable to Toyota Motor Corporation Net income attributable to Toyota Motor Corporation decreased by ¥398.7 billion, or 14.0%, to ¥2,451.3 billion during fiscal 2023 compared with the prior fiscal year.
Research of new technology, construction and system of automobiles United Fuel Cell System R&D (Beijing) Co., Ltd. Development of FC system for commercial vehicles in China 96 Table of Contents Toyota carefully analyzes patents and the need for patents in each area of research to formulate more effective research and development strategies.
Research of new technology, construction and system of automobiles United Fuel Cell System R&D (Beijing) Co., Ltd. Development of FC system for commercial vehicles in China Toyota carefully analyzes patents and the need for patents in each area of research to formulate more effective research and development strategies.
Cost Reduction Efforts Cost reduction efforts, together with related costs and expenses, led to an aggregate increase in operating costs and expenses of ¥1,290.0 billion during fiscal 2023. This increase was due to a ¥1,545.0 billion increase in 75 Table of Contents operating costs and expenses attributable to the impact of soaring materials prices.
Cost Reduction Efforts Cost reduction efforts, together with related costs and expenses, led to an aggregate increase in operating costs and expenses of ¥1,290.0 billion during fiscal 2023. This increase was due to a ¥1,545.0 billion increase in operating costs and expenses attributable to the impact of soaring materials prices.
Other income (loss), net decreased by ¥5.6 billion, to ¥78.1 billion in losses during fiscal 2023 compared with the prior fiscal year. 78 Table of Contents Income Taxes The provision for income taxes increased by ¥59.8 billion, or 5.4%, to ¥1,175.7 billion during fiscal 2023 compared with the prior fiscal year.
Other income (loss), net decreased by ¥5.6 billion, to ¥78.1 billion in losses during fiscal 2023 compared with the prior fiscal year. Income Taxes The provision for income taxes increased by ¥59.8 billion, or 5.4%, to ¥1,175.7 billion during fiscal 2023 compared with the prior fiscal year.
Japan Yen in millions 2023 v. 2022 Change Changes in operating income and loss: Effect of marketing efforts 365,000 Effect of cost reduction efforts (690,000 ) Effect of changes in exchange rates 1,210,000 Increase or decrease in expenses and expense reduction efforts (320,000 ) Other (86,982 ) Total 478,018 North America Yen in millions 2023 v. 2022 Change Changes in operating income and loss: Effect of marketing efforts 90,000 Effect of cost reduction efforts (395,000 ) Effect of changes in exchange rates (15,000 ) Increase or decrease in expenses and expense reduction efforts (135,000 ) Other (185,520 ) Total (640,520 ) Europe Yen in millions 2023 v. 2022 Change Changes in operating income and loss: Effect of marketing efforts 130,000 Effect of cost reduction efforts (120,000 ) Effect of changes in exchange rates (15,000 ) Increase or decrease in expenses and expense reduction efforts (25,000 ) Other (75,513 ) Total (105,513 ) 77 Table of Contents Asia Yen in millions 2023 v. 2022 Change Changes in operating income and loss: Effect of marketing efforts 75,000 Effect of cost reduction efforts (25,000 ) Effect of changes in exchange rates 90,000 Increase or decrease in expenses and expense reduction efforts (45,000 ) Other (52,899 ) Total 42,101 Other Yen in millions 2023 v. 2022 Change Changes in operating income and loss: Effect of marketing efforts 60,000 Effect of cost reduction efforts (60,000 ) Effect of changes in exchange rates 10,000 Increase or decrease in expenses and expense reduction efforts 0 Other (16,807 ) Total (6,807 ) Other Income and Expenses Share of profit (loss) of investments accounted for using the equity method during fiscal 2023 increased by ¥82.7 billion, or 14.8%, to ¥643.0 billion compared with the prior fiscal year.
The following is a description of operating income in each geographic market. 89 Table of Contents Japan Yen in millions 2023 v. 2022 Change Changes in operating income and loss: Effect of marketing efforts 365,000 Effect of cost reduction efforts (690,000 ) Effect of changes in exchange rates 1,210,000 Increase or decrease in expenses and expense reduction efforts (320,000 ) Other (86,982 ) Total 478,018 North America Yen in millions 2023 v. 2022 Change Changes in operating income and loss: Effect of marketing efforts 90,000 Effect of cost reduction efforts (395,000 ) Effect of changes in exchange rates (15,000 ) Increase or decrease in expenses and expense reduction efforts (135,000 ) Other (185,520 ) Total (640,520 ) Europe Yen in millions 2023 v. 2022 Change Changes in operating income and loss: Effect of marketing efforts 130,000 Effect of cost reduction efforts (120,000 ) Effect of changes in exchange rates (15,000 ) Increase or decrease in expenses and expense reduction efforts (25,000 ) Other (75,513 ) Total (105,513 ) Asia Yen in millions 2023 v. 2022 Change Changes in operating income and loss: Effect of marketing efforts 75,000 Effect of cost reduction efforts (25,000 ) Effect of changes in exchange rates 90,000 Increase or decrease in expenses and expense reduction efforts (45,000 ) Other (52,899 ) Total 42,101 90 Table of Contents Other Yen in millions 2023 v. 2022 Change Changes in operating income and loss: Effect of marketing efforts 60,000 Effect of cost reduction efforts (60,000 ) Effect of changes in exchange rates 10,000 Increase or decrease in expenses and expense reduction efforts 0 Other (16,807 ) Total (6,807 ) Other Income and Expenses Share of profit (loss) of investments accounted for using the equity method during fiscal 2023 increased by ¥82.7 billion, or 14.8%, to ¥643.0 billion compared with the prior fiscal year.
Financial Services Operations The competition in the worldwide automobile financial services industry is intensifying. As competition increases, margins on financing transactions may decrease and market share may also decline as customers obtain financing for Toyota vehicles from alternative sources. Toyota’s financial services operations mainly include loans and leasing programs for customers and dealers.
Financial Services Operations Competition in the worldwide automobile financial services industry is intensifying. As competition increases, margins on financing transactions may decrease and market share may also decline as customers obtain financing for Toyota vehicles from alternative sources. 72 Table of Contents Toyota’s financial services operations mainly include loans and leasing programs for customers and dealers.
All Other Operations Segment Sales revenues for Toyota’s other operations segments increased by ¥95.0 billion, or 8.4%, to ¥1,224.9 billion during fiscal 2023 compared with the prior fiscal year. 80 Table of Contents Operating income from Toyota’s other operations segments increased by ¥61.1 billion, or 144.6%, to ¥103.4 billion during fiscal 2023 compared with the prior fiscal year.
All Other Operations Segment Sales revenues for Toyota’s other operations segments increased by ¥95.0 billion, or 8.4%, to ¥1,224.9 billion during fiscal 2023 compared with the prior fiscal year. Operating income from Toyota’s other operations segments increased by ¥61.1 billion, or 144.6%, to ¥103.4 billion during fiscal 2023 compared with the prior fiscal year.
These factors include general economic conditions, prevailing interest rates and Toyota’s financial strength. Funding costs decreased during fiscal 2022 mainly as a result of lower interest rates. Funding costs increased during fiscal 2023 mainly as a result of higher interest rates. Toyota launched its credit card business in Japan in April 2001.
These factors include general economic conditions, prevailing interest rates and Toyota’s financial strength. Funding costs increased during fiscal 2023 and 2024 mainly as a result of higher interest rates. Toyota launched its credit card business in Japan in April 2001.
During both fiscal 2022 and fiscal 2023, overseas vehicle unit sales increased due to strong market conditions as compared to the prior year. Toyota’s share of total vehicle unit sales in each market is influenced by the quality, safety, reliability, price, design, performance, economy and utility of Toyota’s vehicles compared with those offered by other manufacturers.
During both fiscal 2023 and fiscal 2024, overseas vehicle unit sales increased due to strong market conditions as compared to the prior year. Toyota’s share of total vehicle unit sales in each market is influenced by the quality, safety, reliability, price, design, performance, economy and utility of Toyota’s vehicles compared with those offered by other 71 Table of Contents manufacturers.
Design, evaluation and certification of vehicles manufactured in China GAC Toyota Motor Co., Ltd. R&D Center Design, evaluation and certification of vehicles manufactured in China BYD Toyota EV Technology Co., Ltd. Design and evaluation of BEVs Toyota Motor Technical Research and Service (Shanghai) Co., Ltd.
Environmental technology design and evaluation in China FAW Toyota Research & Development Co., Ltd. Design, evaluation and certification of vehicles manufactured in China GAC Toyota Motor Co., Ltd. R&D Center Design, evaluation and certification of vehicles manufactured in China BYD Toyota EV Technology Co., Ltd. Design and evaluation of BEVs Toyota Motor Technical Research and Service (Shanghai) Co., Ltd.
Information on the Company — 4.B Business Overview — Research and Development.” Toyota’s research and development expenditures were approximately ¥1,241.6 billion in fiscal 2023, ¥1,124.2 billion in fiscal 2022 and ¥1,090.4 billion in fiscal 2021. Toyota presents research and development expenditures as a supplemental measure that demonstrates the amount of research and development expenditures undertaken during the relevant reporting period.
Information on the Company — 4.B Business Overview — Research and Development.” Toyota’s research and development expenditures were approximately ¥1,202.3 billion in fiscal 2024, ¥1,241.6 billion in fiscal 2023, and ¥1,124.2 billion in fiscal 2022. Toyota presents research and development expenditures as a supplemental measure that demonstrates the amount of research and development expenditures undertaken during the relevant reporting period.
This measure has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for an analysis of Toyota’s research and development cost as reported under IFRS. 94 Table of Contents For details of the research and development cost recorded in the consolidated statement of income, see note 27 to the consolidated financial statements.
This measure has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for an analysis of Toyota’s research and development cost as reported under IFRS Accounting Standards. For details of the research and development cost recorded in the consolidated statement of income, see note 27 to the consolidated financial statements.
Toyota does not expect its other business operations to materially contribute to Toyota’s consolidated results of operations. Currency Fluctuations Toyota is affected by fluctuations in foreign currency exchange rates.
Toyota does not expect its other business operations to materially contribute to Toyota’s consolidated results of operations. 73 Table of Contents Currency Fluctuations Toyota is affected by fluctuations in foreign currency exchange rates.
The increase in sales revenues from sales of products is mainly due to an increase in Toyota vehicle unit sales of 584 thousand vehicles and the favorable impact of changes in exchange rates compared with the prior fiscal year. The following table shows the number of financing contracts by geographic region at the end of fiscal 2022 and 2021, respectively.
The increase in sales revenues from sales of products is mainly due to an increase in Toyota vehicle unit sales of 621 thousand vehicles and the favorable impact of changes in exchange rates compared with the prior fiscal year. The following table shows the number of financing contracts by geographic region at the end of fiscal 2024 and 2023, respectively.
See note 3 to the consolidated financial statements for additional information. 69 Table of Contents Toyota enters into interest rate swap agreements and cross currency interest rate swap agreements to convert its fixed-rate debt to variable-rate functional currency debt.
See note 3 to the consolidated financial statements for additional information. Toyota enters into interest rate swap agreements and cross currency interest rate swap agreements to convert its fixed-rate debt to variable-rate functional currency debt.
Toyota periodically reviews and revises, as appropriate, these credit limits. Outstanding credit facilities with credit card holders were ¥171.4 billion as of March 31, 2023. Credit Facilities with Dealers Toyota’s financial services operations maintain credit facilities with dealers. These credit facilities may be used for business acquisitions, facilities refurbishment, real estate purchases, and working capital requirements.
Toyota periodically reviews and revises, as appropriate, these credit limits. Outstanding credit facilities with credit card holders were ¥164.6 billion as of March 31, 2024. Credit Facilities with Dealers Toyota’s financial services operations maintain credit facilities with dealers. These credit facilities may be used for business acquisitions, facilities refurbishment, real estate purchases, and working capital requirements.
The change was primarily attributable to the ¥1,154.2 billion increase in funding by long-term debt in fiscal 2023. For a discussion of cash flows for fiscal 2022 as compared to those for fiscal 2021, see “Item 4.B. Operating and Financial Review and Prospects — 5.B.
The change was primarily attributable to the ¥2,780.4 billion increase in funding by long-term debt compared to the previous fiscal year. For a discussion of cash flows for fiscal 2023 as compared to those for fiscal 2022, see “Item 4.B. Operating and Financial Review and Prospects – 5.B.
Yen in millions Year ended March 31, 2021 2022 2023 Japan 8,587,193 8,214,740 9,122,282 North America 9,325,950 10,897,946 13,509,027 Europe 2,968,289 3,692,214 4,097,537 Asia 4,555,897 5,778,115 7,076,922 Other* 1,777,266 2,796,493 3,348,530 * “Other” consists of Central and South America, Oceania, Africa and the Middle East. 71 Table of Contents Results of Operations — Fiscal 2023 Compared with Fiscal 2022 Yen in millions Year ended March 31, 2023 v. 2022 Change 2022 2023 Amount Percentage Sales revenues: Japan 15,991,436 17,583,196 1,591,760 10.0 % North America 11,166,479 13,843,901 2,677,421 24.0 Europe 3,867,847 4,273,735 405,888 10.5 Asia 6,530,566 8,044,906 1,514,340 23.2 Other* 2,928,183 3,472,193 544,011 18.6 Intersegment elimination/unallocated amount (9,105,004 ) (10,063,633 ) (958,629 ) — Total 31,379,507 37,154,298 5,774,791 18.4 Operating income (loss): Japan 1,423,445 1,901,463 478,018 33.6 North America 565,784 (74,736 ) (640,520 ) — Europe 162,973 57,460 (105,513 ) (64.7 ) Asia 672,350 714,451 42,101 6.3 Other* 238,169 231,362 (6,807 ) (2.9 ) Intersegment elimination/unallocated amount (67,024 ) (104,974 ) (37,950 ) — Total 2,995,697 2,725,025 (270,672 ) (9.0 ) Operating margin 9.5 % 7.3 % (2.2 )% Income before income taxes 3,990,532 3,668,733 (321,799 ) (8.1 ) Net margin from income before income taxes 12.7 % 9.9 % (2.8 )% Net income attributable to Toyota Motor Corporation 2,850,110 2,451,318 (398,792 ) (14.0 ) Net margin attributable to Toyota Motor Corporation 9.1 % 6.6 % (2.5 )% * “Other” consists of Central and South America, Oceania, Africa and the Middle East.
Results of Operations — Fiscal 2023 Compared with Fiscal 2022 Yen in millions Year ended March 31, 2023 v. 2022 Change 2022 2023 Amount Percentage Sales revenues: Japan 15,991,436 17,583,196 1,591,760 10.0 % North America 11,166,479 13,843,901 2,677,421 24.0 Europe 3,867,847 4,273,735 405,888 10.5 Asia 6,530,566 8,044,906 1,514,340 23.2 Other* 2,928,183 3,472,193 544,011 18.6 Intersegment elimination/unallocated amount (9,105,004 ) (10,063,633 ) (958,629 ) — Total 31,379,507 37,154,298 5,774,791 18.4 % Operating income (loss): Japan 1,423,445 1,901,463 478,018 33.6 North America 565,784 (74,736 ) (640,520 ) — Europe 162,973 57,460 (105,513 ) (64.7 ) Asia 672,350 714,451 42,101 6.3 Other* 238,169 231,362 (6,807 ) (2.9 ) Intersegment elimination/unallocated amount (67,024 ) (104,974 ) (37,950 ) — Total 2,995,697 2,725,025 (270,672 ) (9.0 )% Operating margin 9.5 % 7.3 % (2.2 )% Income before income taxes 3,990,532 3,668,733 (321,799 ) (8.1 ) 84 Table of Contents Yen in millions Year ended March 31, 2023 v. 2022 Change 2022 2023 Amount Percentage Net margin from income before income taxes 12.7 % 9.9 % (2.8 )% Net income attributable to Toyota Motor Corporation 2,850,110 2,451,318 (398,792 ) (14.0 ) Net margin attributable to Toyota Motor Corporation 9.1 % 6.6 % (2.5 )% * “Other” consists of Central and South America, Oceania, Africa and the Middle East.
Toyota funds its financing programs for customers and dealers, including loans and leasing programs, from both cash generated by operations, the issuance of corporate bonds, and debt financing by its sales finance subsidiaries. Toyota seeks to expand its ability to raise funds locally in markets throughout the world by expanding its network of finance subsidiaries.
Toyota funds its financing programs for customers and dealers, including loans and leasing programs, from cash generated by operations, the issuance of corporate bonds, and debt financing, all by its sales finance subsidiaries. Toyota seeks to expand its ability to raise funds locally in markets around the world through its network of finance subsidiaries.
These factors include: • vehicle unit sales volumes, • the mix of vehicle models and options sold, • the level of parts and service sales, • the levels of price discounts and other sales incentives and marketing costs, • the cost of customer warranty claims and other customer satisfaction actions, • the cost of research and development and other fixed costs, • the prices of raw materials, • the ability to control costs, • the efficient use of production capacity, • the adverse effect on production due to such factors as the reliance on various suppliers for the provision of supplies, or the general scarcity of certain supplies, • climate change risk, including both physical risks as well as transition risks, • the adverse effect on market, sales and productions of natural calamities as well as the outbreak and spread of epidemics and interruptions of social infrastructure, and • changes in the value of the Japanese yen and other currencies in which Toyota conducts business. 68 Table of Contents Changes in laws, regulations, policies and other governmental actions can also materially impact the profitability of Toyota’s automotive operations.
These factors include: • vehicle unit sales volumes, • the mix of vehicle models and options sold, • the level of parts and service sales, • the levels of price discounts and other sales incentives and marketing costs, • the cost of customer warranty claims and other customer satisfaction actions, • the cost of research and development and other fixed costs, • the prices of raw materials, • the ability to control costs, • the efficient use of production capacity, • the adverse effect on production due to such factors as the reliance on various suppliers for the provision of supplies, or the general scarcity of certain supplies, • climate change risk, including both physical risks as well as transition risks, • the adverse effect on market, sales and productions of natural calamities as well as the outbreak and spread of epidemics and interruptions of social infrastructure, and • changes in the value of the Japanese yen and other currencies in which Toyota conducts business.
As of March 31, 2023, Toyota’s total interest-bearing debt was 103.7% of Toyota Motor Corporation shareholders’ equity, compared with 101.0% as of March 31, 2022. The following table provides information on credit ratings of Toyota’s short-term borrowing and long-term debt from Standard & Poor’s Ratings Group (S&P), Moody’s Investors Services (Moody’s), and Rating and Investment Information, Inc.
As of March 31, 2024, Toyota’s total interest-bearing debt was 106.8% of Toyota Motor Corporation shareholders’ equity, compared with 103.7% as of March 31, 2023. 95 Table of Contents The following table provides information on credit ratings of Toyota’s short-term borrowing and long-term debt from Standard & Poor’s Ratings Group (S&P), Moody’s Investors Services (Moody’s), and Rating and Investment Information, Inc.
In July 2017, TRI invested $100 million to launch a venture capital fund designed to provide financing to startup companies, and is making investments in newly established promising startup companies in the four areas of artificial intelligence, robotics, autonomous mobility, and data and cloud technology. TRI successively invested another $100 million in May 2019 and $150 million in June 2021.
In July 2017, TRI invested $100 million to launch a venture capital fund designed to provide financing to startup companies, and is making investments in newly established promising startup companies in the four areas of artificial intelligence, robotics, autonomous mobility, and data and cloud technology.
This decrease was due to the ¥1,290.0 billion aggregate unfavorable impact of factors categorized as cost reduction efforts (including fluctuations in raw materials prices), the ¥525.0 billion aggregate unfavorable impact of changes in expenses and expense reduction efforts and other factors, partially offset by the ¥1,280.0 billion favorable impact of changes in exchange rates and the ¥680.0 billion impact of marketing efforts. 76 Table of Contents Marketing efforts includes changes in vehicle unit sales and sales mix, sales expenses and other.
This decrease was due to the ¥1,290.0 billion aggregate unfavorable impact of factors categorized as cost reduction efforts (including fluctuations in raw materials prices), the ¥525.0 billion aggregate unfavorable impact of changes in expenses and expense reduction efforts and other factors, partially offset by the ¥1,280.0 billion favorable impact of changes in exchange rates and the ¥680.0 billion impact of marketing efforts.
The increase resulted mainly from the ¥1,510.0 billion impact of increased vehicle unit sales and changes in sales mix and the ¥1,390.0 billion favorable impact of changes in exchange rates. 81 Table of Contents The table below shows Toyota’s sales revenues from external customers by product category and by business.
The increase resulted mainly from the ¥5,130.0 billion impact of increased vehicle unit sales and changes in sales mix and the ¥1,320.0 billion favorable impact of changes in exchange rates. 75 Table of Contents The table below shows Toyota’s sales revenues from external customers by product category and by business.
As of March 31, 2023, approximately 53% of long-term debt was denominated in U.S. dollars, 11% in Japanese yen, 13% in euros, 6% in Australian dollars, 3% in Canadian dollars, and 14% in other currencies. Toyota hedges interest rate risk exposure of fixed-rate borrowings by entering into interest rate swaps. There are no material seasonal variations in Toyota’s borrowings requirements.
As of March 31, 2024, approximately 53% of long-term debt was denominated in U.S. dollars, 10% in Japanese yen, 13% in euros, 5% in Australian dollars, 4% in Canadian dollars, and 15% in other currencies. Toyota hedges interest rate risk exposure of fixed-rate borrowings by entering into interest rate swaps. There are no material seasonal variations in Toyota’s borrowings requirements.
The ¥201.0 billion increase in foreign exchange gain (loss), net was due mainly to the gains recorded in fiscal 2022 resulting from the Japanese yen being weaker against foreign currencies at the maturity dates of the foreign currency deposit than at the dates of the deposit.
The ¥63.0 billion increase in foreign exchange gain (loss), net was due mainly to the gains recorded in fiscal 2024 resulting from the Japanese yen being weaker against foreign currencies at the maturity dates of the foreign currency deposit and loans than at the dates of the deposit or the lending.
Research and development of artificial intelligence technology Woven by Toyota, U.S., Inc. Development of automated driving technology and software Europe Toyota Motor Europe NV/SA Planning and evaluation of vehicles manufactured in Europe Toyota Europe Design Development S.A.R.L. Design Toyota Motorsport GmbH Development of motor sports vehicles Woven by Toyota, U.K., Ltd.
Research and development of artificial intelligence technology Woven by Toyota, U.S., Inc. Development of automated driving technology and software Europe Toyota Motor Europe NV/SA Planning and evaluation of vehicles manufactured in Europe 99 Table of Contents Facility Principal Activity Toyota Europe Design Development S.A.R.L. Design TOYOTA GAZOO Racing Europe GmbH Development of motor sports vehicles Woven by Toyota, U.K., Ltd.
Credit card receivables as of March 31, 2022 increased by ¥17.3 billion from March 31, 2021 to ¥501.4 billion, and that as of March 31, 2023 increased by ¥53.4 billion from March 31, 2022 to ¥554.8 billion. Other Business Operations Toyota’s other business operations consist of its information technology business and others.
Credit card receivables as of March 31, 2023 increased by ¥53.3 billion from March 31, 2022 to ¥554.7 billion, and that as of March 31, 2024 increased by ¥4.0 billion from March 31, 2023 to ¥558.7 billion. Other Business Operations Toyota’s other business operations consist of its information technology business and others.
This increase was due to the ¥860.0 billion impact of marketing efforts and the ¥610.0 billion favorable impact of changes in exchange rates, partially offset by, among other factors, the ¥360.0 billion aggregate unfavorable impact of factors categorized as cost reduction efforts (including fluctuations in raw materials prices) and the ¥220.0 billion aggregate unfavorable impact of changes in expenses and expense reduction efforts.
This increase was due to the ¥2,000.0 billion impact of marketing efforts, the ¥685.0 billion favorable impact of changes in exchange rates, the ¥120.0 billion aggregate favorable impact of factors categorized as cost reduction efforts (including fluctuations in raw materials prices) and other factors, partially offset by the ¥380.0 billion aggregate unfavorable impact of changes in expenses and expense reduction efforts.
Taking the foregoing external factors and other factors into account, Toyota expects that sales revenues for fiscal 2024 will increase compared with fiscal 2023 due mainly to the increase in vehicle unit sales, partially offset by the unfavorable impact of changes in exchange rates.
Taking the foregoing external factors and other factors into account, Toyota expects that sales revenues for fiscal 2025 will increase compared with fiscal 2024 due mainly to a favorable impact of changes in exchange rates and an increase in vehicle unit sales.
In fiscal 2022 and 2023, Toyota produced 71.6% and 77.3%, respectively, of its non-domestic sales outside Japan. In North America, 68.5% and 76.8% of vehicles sold in fiscal 2022 and 2023, respectively, were produced locally. In Europe, 69.1% and 73.9% of vehicles sold in fiscal 2022 and 2023, respectively, were produced locally.
In fiscal 2023 and 2024, Toyota produced 77.3% and 75.9%, respectively, of its non-domestic sales outside Japan. In North America, 76.8% and 75.9% of vehicles sold in fiscal 2023 and 2024, respectively, were produced locally. In Europe, 73.9% and 73.1% of vehicles sold in fiscal 2023 and 2024, respectively, were produced locally.
For fiscal 2021 and 2022, exported vehicle unit sales were 1,728 thousand units and 1,716 thousand units, respectively.
For fiscal 2022 and 2023, exported vehicle unit sales were 1,716 thousand units and 1,634 thousand units, respectively.
Toyota also established a technical development center in Otemachi, Tokyo, Japan in October 2018 as a site for development of key IT technologies that will support automated driving in collaboration with Woven Core, as well as promotion of collaboration with venture companies and creation of new value by utilizing big data. 95 Table of Contents The following table provides information on Toyota’s principal research and development facilities.
Toyota also established a technical development center in Otemachi, Tokyo, Japan in October 2018 as a site for development of key IT technologies that will support automated driving in collaboration with Woven Core, as well as promotion of collaboration with venture companies and creation of new value by utilizing big data.
“Other” includes valuation gains or losses from interest rate swaps and interest rate currency swaps. The favorable impact of changes in exchange rates was due mainly to the ¥1,200.0 billion impact of overseas transactions such as imports and exports denominated in foreign currencies.
“Other” includes valuation gains from interest rate swaps and interest rate currency swaps of ¥140.5 billion. 80 Table of Contents The favorable impact of changes in exchange rates was due mainly to the ¥590.0 billion impact of overseas transactions such as imports and exports denominated in foreign currencies.
Toyota’s long-term debt mainly consists of unsecured and secured loans, medium-term notes, unsecured and secured notes with weighted-average interest rates ranging from 1.29% to 6.53%, and maturity dates ranging from 2023 to 2048.
Toyota’s long-term debt mainly consists of unsecured and secured loans, medium-term notes, unsecured and secured notes with weighted-average interest rates ranging from 1.92% to 7.86%, and maturity dates ranging from 2024 to 2048.
Facility Principal Activity Japan Toyota Technical Center Product planning, style, design, prototype production and vehicle evaluation Higashi-Fuji Technical Center Advanced development Tokyo Design Research & Laboratory Advanced styling designs Woven by Toyota, Inc.
The following table provides information on Toyota’s principal research and development facilities. Facility Principal Activity Japan Toyota Technical Center Product planning, style, design, prototype production and vehicle evaluation Toyota Technical Center Shimoyama Product planning, style, design and vehicle evaluation Higashi-Fuji Technical Center Advanced development Tokyo Design Research & Laboratory Advanced styling designs Woven by Toyota, Inc.
Toyota’s financial services operations also provide financing to various multi-franchise dealer organizations, referred to as dealer groups, often as part of a lending consortium, for wholesale inventory financing, business acquisitions, facilities refurbishment, real estate purchases, and working capital requirements. Toyota’s outstanding credit facilities with dealers totaled ¥3,820.9 billion as of March 31, 2023.
Toyota’s financial services operations also provide financing to various multi-franchise dealer organizations, referred to as dealer groups, often as part of a lending consortium, for wholesale inventory financing, business acquisitions, facilities refurbishment, real estate purchases, and working capital requirements.
Excluding the impact of changes in exchange rates of ¥1,390.0 billion, sales revenues in fiscal 2022 would have increased by 7.0% in Japan, 10.5% in North America, 16.6% in Europe, 20.3% in Asia, and 49.2% in Other compared with the prior fiscal year. 82 Table of Contents The following is a discussion of sales revenues in each geographic market (before the elimination of intersegment revenues).
Excluding the impact of changes in exchange rates of ¥1,320.0 billion, sales revenues in fiscal 2024 would have increased by 18.0% in Japan, 21.2% in North America, 19.5% in Europe, 3.1% in Asia, and 55.3% in Other compared with the prior fiscal year. 76 Table of Contents The following is a discussion of sales revenues in each geographic market (before the elimination of intersegment revenues).
In addition, TRI established a $150 million fund in an aim to achieve carbon neutrality. In Japan, Toyota established a new company, Toyota Research Institute — Advanced Development (“TRI-AD”), in March 2018 to further accelerate its efforts in advanced development for automated driving technology and related technologies.
In Japan, Toyota established a new company, Toyota Research Institute — Advanced Development (“TRI-AD”), in March 2018 to further accelerate its efforts in advanced development for automated driving technology and related technologies.
Europe Thousands of units Year ended March 31, 2023 v. 2022 Change 2022 2023 Amount Percentage Toyota’s consolidated vehicle unit sales 1,017 1,030 13 1.3 % Yen in millions Year ended March 31, 2023 v. 2022 Change 2022 2023 Amount Percentage Sales revenues: Sales of products 3,671,205 4,003,043 331,838 9.0 % Financial services 196,642 270,693 74,050 37.7 Total 3,867,847 4,273,735 405,888 10.5 % Sales revenues in Europe increased due primarily to the 13 thousand vehicles increase in vehicle unit sales and the favorable impact of changes in exchange rates compared with the prior fiscal year.
North America Thousands of units Year ended March 31, 2023 v. 2022 Change 2022 2023 Amount Percentage Toyota’s consolidated vehicle unit sales 2,394 2,407 13 0.5 % Yen in millions Year ended March 31, 2023 v. 2022 Change 2022 2023 Amount Percentage Sales revenues: Sales of products 9,578,534 11,965,050 2,386,516 24.9 % Financial services 1,587,945 1,878,850 290,905 18.3 Total 11,166,479 13,843,901 2,677,421 24.0 % Sales revenues in North America increased due primarily to the 13 thousand vehicles increase in vehicle unit sales and the favorable impact of changes in exchange rates compared with the prior fiscal year. 86 Table of Contents Europe Thousands of units Year ended March 31, 2023 v. 2022 Change 2022 2023 Amount Percentage Toyota’s consolidated vehicle unit sales 1,017 1,030 13 1.3 % Yen in millions Year ended March 31, 2023 v. 2022 Change 2022 2023 Amount Percentage Sales revenues: Sales of products 3,671,205 4,003,043 331,838 9.0 % Financial services 196,642 270,693 74,050 37.7 Total 3,867,847 4,273,735 405,888 10.5 % Sales revenues in Europe increased due primarily to the 13 thousand vehicles increase in vehicle unit sales and the favorable impact of changes in exchange rates compared with the prior fiscal year.
Thousands of units Year Ended March 31, 2021 2022 2023 Japan 2,125 1,924 2,069 North America 2,313 2,394 2,407 Europe 959 1,017 1,030 Asia 1,222 1,543 1,751 Other* 1,027 1,352 1,565 Overseas total 5,521 6,306 6,753 Total 7,646 8,230 8,822 * “Other” consists of Central and South America, Oceania, Africa and the Middle East, etc.
Thousands of units Year Ended March 31, 2022 2023 2024 Japan 1,924 2,069 1,993 North America 2,394 2,407 2,816 Europe 1,017 1,030 1,192 Asia 1,543 1,751 1,804 Other* 1,352 1,565 1,638 Overseas total 6,306 6,753 7,450 Total 8,230 8,822 9,443 * “Other” consists of Central and South America, Oceania, Africa and the Middle East, etc.
The impact of soaring materials prices includes the impact of fluctuation in the price of steel, precious metals, non-ferrous alloys including aluminum, plastic parts and other production materials and parts. Cost of Products Sold Cost of products sold increased by ¥3,050.8 billion, or 14.4%, to ¥24,250.7 billion during fiscal 2022 compared with the prior fiscal year.
The impact of soaring materials prices includes the impact of fluctuation in the price of steel, precious metals, non-ferrous alloys including aluminum, plastic parts and other production materials and parts. Cost of Products Sold Cost of products sold increased by ¥4,472.0 billion, or 15.4%, to ¥33,600.6 billion during fiscal 2024 compared with the prior fiscal year.
Number of financing contracts in thousands As of March 31, 2023 v. 2022 Change 2022 2023 Amount Percentage Japan 2,745 2,767 22 0.8 % North America 5,549 5,500 (49 ) (0.9 ) Europe 1,507 1,647 140 9.3 Asia 2,070 2,034 (36 ) (1.7 ) Other* 895 938 43 4.8 Total 12,766 12,886 120 0.9 % * “Other” consists of Central and South America, Oceania and Africa.
Number of financing contracts in thousands As of March 31, 2023 v. 2022 Change 2022 2023 Amount Percentage Japan 2,745 2,767 22 0.8 % North America 5,549 5,500 (49 ) (0.9 ) Europe 1,507 1,647 140 9.3 Asia 2,070 2,034 (36 ) (1.7 ) Other* 895 938 43 4.8 Total 12,766 12,886 120 0.9 % * “Other” consists of Central and South America, Oceania and Africa. 85 Table of Contents Geographically, sales revenues (before the elimination of intersegment revenues) for fiscal 2023 increased by 10.0% in Japan, 24.0% in North America, 10.5% in Europe, 23.2% in Asia, and 18.6% in Other compared with the prior fiscal year.
Meanwhile, commercial banks and other captive automobile finance companies also compete against Toyota’s wholesale financing activities. Toyota’s total receivables related to financial services increased during fiscal 2023 mainly due to an increase in retail receivables.
Meanwhile, commercial banks and other captive automobile finance companies also compete against Toyota’s wholesale financing activities. Toyota’s total receivables related to financial services increased during fiscal 2024 mainly due to an increase in retail receivables. Also, vehicles and equipment on operating leases increased during fiscal 2024 mainly due to the impact of changes in exchange rates.
This has reduced, but not eliminated, the effects of foreign currency exchange rate fluctuations, which in some years can be significant. See notes 20 and 21 to the consolidated financial statements for additional information.
Toyota also enters into foreign currency transactions and other hedging instruments to address a portion of its transaction risk. This has reduced, but not eliminated, the effects of foreign currency exchange rate fluctuations, which in some years can be significant. See notes 20 and 21 to the consolidated financial statements for additional information.
Toyota’s receivables related to financial services are subject to collectability risks. These risks include consumer and dealer insolvencies and insufficient collateral values (less costs to sell) to realize the full carrying values of these receivables. See notes 4 and 19 to the consolidated financial statements for additional information. Toyota continues to originate leases to finance new Toyota vehicles.
For details on receivables related to financial services and vehicles and equipment on operating leases, see notes 8 and 12 to the consolidated financial statements. Toyota’s receivables related to financial services are subject to collectability risks. These risks include consumer and dealer insolvencies and insufficient collateral values (less costs to sell) to realize the full carrying values of these receivables.
As of March 31, 2022, Toyota had 15.7 million cardholders, a decrease of 0.7 million cardholders compared with March 31, 2021. As of March 31, 2023, Toyota had 16.1 million cardholders, an increase of 0.4 million cardholders compared with March 31, 2022.
As of March 31, 2023, Toyota had 16.1 million cardholders, an increase of 0.4 million cardholders compared with March 31, 2022. As of March 31, 2024, Toyota had 16.2 million cardholders, an increase of 0.04 million cardholders compared with March 31, 2023.
Toyota’s primary markets based on vehicle unit sales for fiscal 2023 were: Japan (23.5%), North America (27.3%), Europe (11.7%) and Asia (19.8%). Automotive Market Environment The worldwide automotive market is highly competitive and volatile.
Toyota’s primary markets based on vehicle unit sales for fiscal 2024 were: Japan (21.1%), North America (29.8%), Europe (12.6%) and Asia (19.1%). Automotive Market Environment The worldwide automotive market is highly competitive and volatile.
Guarantees See note 30 to the consolidated financial statements for further discussion. 5.C RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES Toyota’s research and development is dedicated to capturing the increasingly diverse and sophisticated market through the development of attractive, affordable, high-quality products for customers worldwide.
Toyota’s outstanding credit facilities with dealers totaled ¥3,794.0 billion as of March 31, 2024. 97 Table of Contents Guarantees See note 30 to the consolidated financial statements for further discussion. 5.C RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES Toyota’s research and development is dedicated to capturing the increasingly diverse and sophisticated market through the development of attractive, affordable, high-quality products for customers worldwide.
Other Comprehensive Income, Net of Tax Other comprehensive income, net of tax increased by ¥130.6 billion to ¥1,143.1 billion for fiscal 2022 compared with the prior fiscal year.
Other Comprehensive Income, Net of Tax Other comprehensive income, net of tax increased by ¥1,289.3 billion to ¥2,117.1 billion for fiscal 2024 compared with the prior fiscal year.
The increase was primarily attributable to the ¥1,762.7 billion decrease in withdrawals from time deposits compared to the previous fiscal year. Net cash used in financing activities was ¥56.1 billion for fiscal 2023, compared with net cash used in financing activities of ¥2,466.5 billion for fiscal 2022, a ¥2,410.3 billion change.
The increase was primarily attributable to the ¥1,703.6 billion increase in time deposits compared to the previous fiscal year. Net cash provided by financing activities was ¥2,497.5 billion for fiscal 2024, a ¥2,553.7 billion change compared with net cash used in financing activities of ¥56.1 billion for fiscal 2023.
S&P Moody’s R&I Short-term borrowing A-1+ P-1 — Long-term debt A+ A1 AAA Toyota’s net defined benefit liability (asset) of Japanese plans decreased during fiscal 2023 by ¥108.2 billion, or 46.6%, to ¥124.0 billion. The net defined benefit liability (asset) of foreign plans increased 92 Table of Contents during fiscal 2023 by ¥50.8 billion, or 19.3%, to ¥313.8 billion.
S&P Moody’s R&I Short-term borrowing A-1+ P-1 — Long-term debt A+ A1 AAA Toyota’s net defined benefit liability (asset) of Japanese plans decreased during fiscal 2024 by ¥85.9 billion, or 69.3%, to ¥38.0 billion. The net defined benefit liability (asset) of foreign plans increased during fiscal 2024 by ¥52.2 billion, or 16.6%, to ¥366.0 billion.
Geographically, sales revenues (before the elimination of intersegment revenues) for fiscal 2022 increased by 7.0% in Japan, 17.6% in North America, 23.4% in Europe, 29.4% in Asia, and 56.3% in Other compared with the prior fiscal year.
Geographically, sales revenues (before the elimination of intersegment revenues) for fiscal 2024 increased by 19.6% in Japan, 29.6% in North America, 32.9% in Europe, 8.5% in Asia, and 26.4% in Other compared with the prior fiscal year.
The current portion of long-term debt increased during fiscal 2023 by ¥621.7 billion, or 8.8%, to ¥7,648.5 billion and the non-current portion increased by ¥1,741.6 billion, or 11.7%, to ¥16,685.3 billion. The increase in total borrowings resulted mainly from the increasing demand for financing associated with the increase in the loan balance at financial subsidiaries.
The current portion of long-term debt increased during fiscal 2024 by ¥2,196.2 billion, or 28.7%, to ¥9,844.8 billion and the non-current portion increased by ¥4,080.9 billion, or 24.5%, to ¥20,766.3 billion. The increase in total borrowings resulted mainly from the increasing demand for financing associated with the increase in the loan balance at financial subsidiaries.
This increase was due mainly to an increase during fiscal 2022 in net income attributable to the shareholders of companies accounted for by the equity method. Other finance income decreased by ¥100.4 billion, or 23.1%, to ¥334.7 billion during fiscal 2022 compared with the prior fiscal year.
This increase was due mainly to an increase during fiscal 2024 in net income attributable to the shareholders of companies accounted for by the equity method. Other finance income increased by ¥367.8 billion, or 97.0%, to ¥747.2 billion during fiscal 2024 compared with the prior fiscal year.
Operating and Financial Review and Prospects — 5.A Operating Results — Overview — Currency Fluctuations” for further discussion. The foregoing statements are forward-looking statements based upon Toyota’s management’s assumptions and beliefs regarding exchange rates, market demand for Toyota’s products, economic conditions and others. See 90 Table of Contents “Cautionary Statement With Respect To Forward-Looking Statements”.
The foregoing statements are forward-looking statements based upon Toyota’s management’s assumptions and beliefs regarding exchange rates, market demand for Toyota’s products, economic conditions and others. See “Cautionary Statement With Respect To Forward-Looking Statements”.
Sales revenues for the automotive segment increased during fiscal 2022 by ¥3,954.1 billion, or 16.0%, to ¥28,605.7 billion compared with the prior fiscal year. The increase mainly reflects the ¥1,510.0 billion favorable impact of changes in vehicle unit sales and sales mix and the ¥1,250.0 billion favorable impact of changes in exchange rates.
Sales revenues for the automotive segment increased during fiscal 2024 by ¥7,446.2 billion, or 22.0%, to ¥41,266.2 billion compared with the prior fiscal year. The increase mainly reflects the ¥5,130.0 billion favorable impact of changes in vehicle unit sales and sales mix and the ¥880.0 billion favorable impact of changes in exchange rates.

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Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest change(SMFG) Senior Managing Executive Officer of SMBC 2019 Deputy President and Executive Officer of SMFG Director and Deputy President of SMBC 2023 Deputy Chairman of SMBC (to present) Outside Member of the Board of Directors of TMC (to present) (important concurrent duties) Deputy Chairman of Sumitomo Mitsui Banking Corporation — 101 Table of Contents Name (Date of Birth) Position Brief Career Summary and Important Concurrent Duties Number of Common Shares (in thousands) Emi Osono (August 8, 1965) Outside Member of the Board of Directors 1988 Joined The Sumitomo Bank, Limited 1998 Visiting Professor of the Waseda Institute of Asia-Pacific Studies (WIAPS) 2000 Full-time lecturer at School of International Corporate Strategy, Hitotsubashi University Business School 2002 Assistant Professor at School of International Corporate Strategy, Hitotsubashi University Business School 2010 Professor at School of International Corporate Strategy, Hitotsubashi University Business School 2018 Professor at School of Business Administration, Hitotsubashi University Business School 2022 Dean and Professor at School of Business Administration and School of International Corporate Strategy, Hitotsubashi University Business School (to present) 2023 Outside Member of the Board of Directors of TMC (to present) (important concurrent duties) Professor at School of Business Administration, Hitotsubashi University Business School Outside Director of Tokio Marine Holdings, Inc. — Masahide Yasuda (April 1, 1949) Full-time Audit & Supervisory Board Member 1972 Joined TMC 2000 General Manager of Overseas Parts Division of TMC 2007 President of Toyota Motor Corporation Australia Ltd. 2014 Chairman of Toyota Motor Corporation Australia Ltd. 2017 Retired as Chairman of Toyota Motor Corporation Australia Ltd. 2018 Audit & Supervisory Board Member of TMC (to present) 62 Katsuyuki Ogura (January 25, 1963) Full-time Audit & Supervisory Board Member 1985 Joined TMC 2015 General Manager of Affiliated Companies Finance Dept. of TMC 2018 General Manager of Audit & Supervisory Board Office of TMC 2019 Audit & Supervisory Board Member of TMC (to present) (important concurrent duties) Outside Audit & Supervisory Board Member of Aichi Steel Corporation 29 102 Table of Contents Name (Date of Birth) Position Brief Career Summary and Important Concurrent Duties Number of Common Shares (in thousands) Takeshi Shirane (September 5, 1952) Full-time Audit & Supervisory Board Member 1977 Joined TMC 2001 General Manager of Production Management Div. of TMC 2004 General Manager of Global Procurement Planning Div. of TMC 2005 General Manager of 1st Procurement Div. of TMC Managing Officer of TMC 2009 Senior Managing Director of TMC 2011 Senior Managing Officer of TMC Advisor of Kanto Auto Works, Ltd. 2012 President of Kanto Auto Works, Ltd.
Biggest change(SMFG) Senior Managing Executive Officer of SMBC 2019 Deputy President and Executive Officer of SMFG Director and Deputy President of SMBC 2023 Deputy Chairman of SMBC Outside Member of the Board of Directors of TMC (to present) 2024 Advisor of SMBC (important concurrent duties) Advisor of SMBC 1 Emi Osono (August 8, 1965) Outside Member of the Board of Directors 1988 Joined The Sumitomo Bank, Limited 1998 Visiting Professor of the Waseda Institute of Asia-Pacific Studies (WIAPS) 2000 Full-time lecturer at School of International Corporate Strategy, Hitotsubashi University Business School 2002 Assistant Professor at School of International Corporate Strategy, Hitotsubashi University Business School 2010 Professor at School of International Corporate Strategy, Hitotsubashi University Business School 2018 Professor at School of Business Administration, Hitotsubashi University Business School 2022 Dean and Professor at School of Business Administration and School of International 0 104 Table of Contents Name (Date of Birth) Position Brief Career Summary and Important Concurrent Duties Number of Common Shares (in thousands) Corporate Strategy, Hitotsubashi University Business School (to present) 2023 Outside Member of the Board of Directors of TMC (to present) (important concurrent duties) Professor at School of Business Administration, Hitotsubashi University Business School Outside Director of Tokio Marine Holdings, Inc.
Eligible Persons Members of the board of directors of Toyota (excluding outside members of the board of directors) Total amount of the share compensation Maximum of 4.0 billion yen per year Amount of the share compensation payable to each member of the board of directors Set each year considering factors such as corporate results, duties, and performance Type of shares to be allotted and method of allotment Issue or disposal of common stock (with transfer restrictions under an allotment agreement) Total number of shares to be allotted Maximum of 4,000,000 shares per year in total to eligible members of the board of directors (Provided, however, that if a stock split, including a gratis allotment, or a reverse stock split of Toyota’s common stock is carried out after June 15, 2022, or in case of events that otherwise require an adjustment to the total number of Toyota’s shares of common stock to be issued or disposed of as restricted share compensation, such total number of shares will be adjusted to a reasonable extent.) Amount to be paid Determined by the board of directors of Toyota based on the closing price of Toyota’s common stock on the Tokyo Stock Exchange on the business day prior to each resolution of the board of directors, within a range that is not particularly advantageous to eligible members of the board of directors Transfer restriction period A period of three to fifty years from the allotment date, which is determined by the board of directors of Toyota in advance Conditions for removal of transfer restrictions Restrictions will be removed upon the expiration of the transfer restriction period.
Eligible Persons Members of the board of directors of Toyota (excluding outside members of the board of directors) Total amount of the share compensation Maximum of 4.0 billion yen per year Amount of the share compensation payable to each member of the board of directors Set each year considering factors such as corporate results, duties, and performance Type of shares to be allotted and method of allotment Issue or disposal of common stock (with transfer restrictions under an allotment agreement) Total number of shares to be allotted Maximum of 4,000,000 shares per year in total to eligible members of the board of directors (Provided, however, that if a stock split, including a gratis allotment, or a reverse stock split of Toyota’s common stock is carried out after June 15, 2022, or in case of events that otherwise require an adjustment to the total number of Toyota’s shares of common stock to be issued or disposed of as restricted share compensation, such total number of shares will be adjusted to a reasonable extent.) Amount to be paid Determined by the board of directors of Toyota based on the closing price of Toyota’s common stock on the Tokyo Stock Exchange on the business day prior to each resolution of the board of directors, within a range that is not particularly advantageous to eligible members of the board of directors 118 Table of Contents Transfer restriction period A period of three to fifty years from the allotment date, which is determined by the board of directors of Toyota in advance Conditions for removal of transfer restrictions Restrictions will be removed upon the expiration of the transfer restriction period.
Members of management who, together with the president, have cross-functional oversight of the entire company, were redefined as “operating officers.” In-house company presidents, regional CEOs, and chief 97 Table of Contents officers, as on-site leaders of business implementation elements, were given authority while being consolidated into the classification of “senior professional/senior management.” The roles of operating officers and senior professionals/senior management are to be determined where and as needed, and persons appointed as operating officers and senior professionals/senior management will change in accordance with the challenges faced and the path that should be taken, as the company exercises greater flexibility in making appointments.
Members of management who, together with the president, have cross-functional oversight of the entire company, were redefined as “operating officers.” In-house company presidents, regional CEOs, and chief officers, as on-site leaders of business implementation elements, were given authority while being consolidated into the classification of “senior professional/senior management.” The roles of operating officers and senior professionals/senior management are to be determined where and as needed, and persons appointed as operating officers and senior professionals/senior management will change in accordance with the challenges faced and the path that should be taken, as the company exercises greater flexibility in making appointments.
In order to be prepared in the event Toyota lacks the number of audit & supervisory board members required by law, one substitute audit & supervisory board member has been appointed pursuant to Article 329, Paragraph 3 of the Companies Act. 98 Table of Contents Set forth below are brief summaries of Toyota’s members of the board of directors and audit & supervisory board members.
In order to be prepared in the event Toyota lacks the number of audit & supervisory board members required by law, one substitute audit & supervisory board member has been appointed pursuant to Article 329, Paragraph 3 of the Companies Act. 101 Table of Contents Set forth below are brief summaries of Toyota’s members of the board of directors and audit & supervisory board members.
In order to meet these objectives, following the introduction of “region-based operations,” the “business unit system” and the “in-house company system” in 2011, 2013 and 2016, respectively, in April 2017 Toyota further clarified that, for the purpose of further accelerating decision-making and operational execution, members of the board of directors are responsible for decision-making and management oversight and that operating officers are responsible for operational execution.
In order to meet these objectives, following the introduction of “region-based operations,” the “business unit system” and the “in-house company system” in 2011, 2013 and 2016, respectively, in April 100 Table of Contents 2017 Toyota further clarified that, for the purpose of further accelerating decision-making and operational execution, members of the board of directors are responsible for decision-making and management oversight and that operating officers are responsible for operational execution.
In addition, Toyota may enter into a liability limitation agreement with each audit & supervisory board member which limits the maximum amount of their liabilities owed to Toyota arising 110 Table of Contents in connection with their failure to execute their duties to an amount equal to the minimum liability limit amount prescribed in the laws and regulations.
In addition, Toyota may enter into a liability limitation agreement with each audit & supervisory board member which limits the maximum amount of their liabilities owed to Toyota arising in connection with their failure to execute their duties to an amount equal to the minimum liability limit amount prescribed in the laws and regulations.
None of the persons listed above was selected as a member of board of directors, audit & supervisory board member or member of senior management pursuant to an arrangement or understanding with Toyota’s major shareholders, customers, suppliers or others. 104 Table of Contents Set forth below is a brief summary of Toyota’s substitute audit & supervisory board member.
None of the persons listed above was selected as a member of board of directors, audit & supervisory board member or member of senior management pursuant to an arrangement or understanding with Toyota’s major shareholders, customers, suppliers or others. Set forth below is a brief summary of Toyota’s substitute audit & supervisory board member.
President 2012 Senior Managing Officer of TMC 2015 Member of the Board of Directors and Senior Managing Officer of TMC 2017 Vice Chairman of TMC (to present) (important concurrent duties) Representative Director of Institute for International Economic Studies 326 Koji Sato (October 19, 1969) President, Member of the Board of Directors 1992 Joined TMC 2017 Executive General Manager of TMC 2020 Operating Officer of TMC 2021 Operating Officer of TMC (current system) 2023 Operating Officer and President of TMC President of TMC (to present) (important concurrent duties) Chairman of TOYOTA GAZOO Racing Europe GmbH Chairman of Toyota Motor North America, Inc. 55 99 Table of Contents Name (Date of Birth) Position Brief Career Summary and Important Concurrent Duties Number of Common Shares (in thousands) Hiroki Nakajima (April 10, 1962) Member of the Board of Directors, Operating Officer, Vice President 1987 Joined TMC 2014 Executive General Manager of TMC 2015 Managing Officer of TMC 2020 Operating Officer of TMC 2023 Operating Officer and Executive Vice President of TMC (current system) Member of the Board of Directors, Operating Officer, Vice President of TMC (to present) (important concurrent duties) President of Commercial Japan Partnership Technologies Corporation 20 Yoichi Miyazaki (October 19, 1963) Member of the Board of Directors, Operating Officer, Vice President 1986 Joined TMC 2015 Managing Officer of TMC 2019 Operating Officer of TMC 2022 Operating Officer of TMC (current system) 2023 Operating Officer and Executive Vice President of TMC Member of the Board of Directors, Operating Officer, Vice President of TMC (to present) 42 Simon Humphries (March 30, 1967) Member of the Board of Directors, Operating Officer 1988 Joined DCA Design in UK. 1994 Joined TMC 2016 President of Toyota Europe Design Development S.A.R.L. 2018 Executive General Manager of TMC 2023 Operating Officer of TMC Member of the Board of Directors, Operating Officer (to present) (important concurrent duties) Executive Vice President of Calty Design Research, Inc. 10 Ikuro Sugawara (March 6, 1957) Outside Member of the Board of Directors 1981 Joined Ministry of International Trade and Industry 2010 Director-General of the Industrial Science and Technology Policy and Environment Bureau, Ministry of Economy, Trade and Industry 2012 Director-General of the Manufacturing Industries Bureau, Ministry of Economy, Trade and Industry 2013 Director-General of the Economic and Industrial Policy Bureau, Ministry of Economy, Trade and Industry 2015 Vice-Minister of Ministry of Economy, Trade and Industry 2017 Retired from the Ministry of Economy, Trade and Industry — 100 Table of Contents Name (Date of Birth) Position Brief Career Summary and Important Concurrent Duties Number of Common Shares (in thousands) 2017 Special Advisor to the Cabinet 2018 Retired from Special Advisor to the Cabinet 2018 Outside Member of the Board of Directors of TMC (to present) (important concurrent duties) Independent Director of Hitachi, Ltd.
President 2012 Senior Managing Officer of TMC 2015 Member of the Board of Directors and Senior Managing Officer of TMC 2017 Vice Chairman of TMC (to present) (important concurrent duties) Representative Director of Institute for International Economic Studies 331 Koji Sato (October 19, 1969) President, Member of the Board of Directors 1992 Joined TMC 2017 Executive General Manager of TMC 2020 Operating Officer of TMC 2021 Operating Officer of TMC (current system) 2023 Operating Officer and President of TMC President of TMC (to present) (important concurrent duties) Chairman of TOYOTA GAZOO Racing Europe GmbH Chairman and CEO of Toyota Motor North America, Inc. 56 Hiroki Nakajima (April 10, 1962) Member of the Board of Directors, Operating Officer, Vice President 1987 Joined TMC 2014 Executive General Manager of TMC 2015 Managing Officer of TMC 2020 Operating Officer of TMC 2023 Operating Officer and Executive Vice President of TMC (current system) Member of the Board of Directors, Operating Officer, Vice President of TMC (to present) (important concurrent duties) President of Commercial Japan Partnership Technologies Corporation 20 102 Table of Contents Name (Date of Birth) Position Brief Career Summary and Important Concurrent Duties Number of Common Shares (in thousands) Yoichi Miyazaki (October 19, 1963) Member of the Board of Directors, Operating Officer, Vice President 1986 Joined TMC 2015 Managing Officer of TMC 2019 Operating Officer of TMC 2022 Operating Officer of TMC (current system) 2023 Operating Officer and Executive Vice President of TMC Member of the Board of Directors, Operating Officer, Vice President of TMC (to present) 44 Simon Humphries (March 30, 1967) Member of the Board of Directors, Operating Officer 1988 Joined DCA Design in UK. 1994 Joined TMC 2016 President of Toyota Europe Design Development S.A.R.L. 2018 Executive General Manager of TMC 2023 Operating Officer of TMC Member of the Board of Directors, Operating Officer (to present) (important concurrent duties) Executive Vice President of Calty Design Research, Inc. 11 Ikuro Sugawara (March 6, 1957) Outside Member of the Board of Directors 1981 Joined Ministry of International Trade and Industry 2010 Director-General of the Industrial Science and Technology Policy and Environment Bureau, Ministry of Economy, Trade and Industry 2012 Director-General of the Manufacturing Industries Bureau, Ministry of Economy, Trade and Industry 2013 Director-General of the Economic and Industrial Policy Bureau, Ministry of Economy, Trade and Industry 2015 Vice-Minister of Ministry of Economy, Trade and Industry 2017 Retired from the Ministry of Economy, Trade and Industry 2017 Special Advisor to the Cabinet 2018 Retired from Special Advisor to the Cabinet 2018 Outside Member of the Board of Directors of TMC (to present) (important concurrent duties) Independent Director of Hitachi, Ltd.
Toyota also has an employee stock ownership association in Japan for employees and full time and part time company advisors. Members of the employee stock ownership association set aside certain amounts from their 112 Table of Contents monthly salary and bonuses to purchase Toyota’s common stock through the employee stock ownership association.
Toyota also has an employee stock ownership association in Japan for employees and full time and part time company advisors. Members of the employee stock ownership association set aside certain amounts from their monthly salary and bonuses to purchase Toyota’s common stock through the employee stock ownership association.
Annual Total Remuneration is set based on consolidated operating income and the fluctuation of the market capitalization of Toyota, and then adjusted based on individual performance evaluation.
Annual Total Remuneration is set based on consolidated operating income and the fluctuation of the market capitalization of Toyota, and then adjusted based on individual performance evaluations.
The following tables set forth a breakdown of persons employed by business segment and by geographic location as of March 31, 2023.
The following tables set forth a breakdown of persons employed by business segment and by geographic location as of March 31, 2024.
Directors, Senior Management and Employees — 6.A Directors and Senior Management.” 111 Table of Contents None of Toyota’s shares of common stock entitles the holder to any preferential voting rights. As of March 31, 2023, Toyota does not have any stock option plan for which stock options or stock acquisition rights are exercisable or will become exercisable in the future.
Directors, Senior Management and Employees — 6.A Directors and Senior Management.” None of Toyota’s shares of common stock entitles the holder to any preferential voting rights. As of March 31, 2024, Toyota does not have any stock option plan for which stock options or stock acquisition rights are exercisable or will become exercisable in the future.
The Executive Compensation Meeting reviews the remuneration system for members of board of directors and senior management on which it will consult with the board of directors and determines the amount of remuneration for each member of the board of directors, taking into account factors such as corporate performance as well as individual job responsibilities and performance, in accordance with the policy for 106 Table of Contents determining remuneration for and other payments to each member of the board of directors established by the board of directors.
The board of directors also resolves to delegate the determination of the amount of remuneration for each member of the board of directors to the Executive Compensation Meeting. 108 Table of Contents The Executive Compensation Meeting reviews the remuneration system for members of board of directors and senior management on which it will consult with the board of directors and determines the amount of remuneration for each member of the board of directors, taking into account factors such as corporate performance as well as individual job responsibilities and performance, in accordance with the policy for determining remuneration for and other payments to each member of the board of directors established by the board of directors.
The members of the meeting are Shigeru Hayakawa, the Vice Chairman of the Board of Directors, and Yoichi Miyazaki, Ikuro Sugawara, Sir Philip Craven, Masahiko Oshima and Emi Osono, each, a Member of the Board of Directors. 6.D EMPLOYEES The total number of Toyota employees, on a consolidated basis, was 375,235 as of March 31, 2023, 372,817 as of March 31, 2022, and 366,283 as of March 31, 2021.
The members of the meeting are Shigeru Hayakawa, the Vice Chairman of the Board of Directors, and Yoichi Miyazaki, Ikuro Sugawara, Sir Philip Craven, Masahiko Oshima and Emi Osono, each, a Member of the Board of Directors. 6.D EMPLOYEES The total number of Toyota employees, on a consolidated basis, was 380,793 as of March 31, 2024, 375,235 as of March 31, 2023, and 372,817 as of March 31, 2022.
At least half of the audit & supervisory board members are required to be an “outside” audit & supervisory board member, which is any person who satisfies all of the following requirements: (a) the person has never been a member of the board of directors, accounting counselor (in the case that an accounting counselor is a legal entity, an employee of such entity who is in charge of its affairs), executive officer, manager or employee of Toyota or its subsidiaries during the ten year period before becoming an outside audit & supervisory board member; (b) if the person was an audit & supervisory board member of Toyota or any of its subsidiaries at any time during the ten year period before becoming an outside audit & supervisory board member, such person has not been a member of the board of directors, accounting counselor (in the case that an accounting counselor is a legal entity, an employee of such entity who is in charge of its affairs), executive officer, manager or employee of Toyota or any of its subsidiaries during the ten year period before becoming an audit & supervisory board member of Toyota or any of its subsidiaries; and (c) the person is not a spouse or relative within the second degree of kinship of any member of the board of directors or manager or other key employee of Toyota.
At least half of the audit & supervisory board members are required to be an “outside” audit & supervisory board member, which is any person who satisfies all of the following requirements: (a) the person has never been a member of the board of directors, accounting counselor (in the case that an accounting counselor is a legal entity, an employee of such entity who is in charge of its affairs), executive officer, manager or employee of Toyota or its subsidiaries during the ten year period before becoming an outside audit & supervisory board member; (b) if the person was an audit & supervisory board member of Toyota or any of its subsidiaries at any time during the ten year period before becoming an outside audit & supervisory board member, such person has not been a member of the board of directors, accounting counselor (in the case that an accounting counselor is a legal entity, an employee of such entity who is in charge of its affairs), executive officer, manager or employee of Toyota or any of its subsidiaries during the ten year period before becoming an audit & supervisory board member of Toyota or any of its subsidiaries; and (c) the person is not a spouse or relative within the second degree of kinship of any member of the board of directors or manager or other key employee of Toyota. 116 Table of Contents The audit & supervisory board members may not at the same time be a member of the board of directors, an accounting counselor (in case that an accounting counselor is a judicial person, a member of such judicial person who is in charge of its affairs), executive officers, general managers or employees of Toyota or any of its subsidiaries.
Toyota’s average number of temporary employees on a consolidated basis was 94,974 during fiscal 2023. 6.E SHARE OWNERSHIP For information on the number of shares of Toyota’s common stock held by each member of the board of directors and audit & supervisory board member as of June 2023, see “Item 6.
Toyota’s average number of temporary employees on a consolidated basis was 96,482 during fiscal 2024. 6.E SHARE OWNERSHIP For information on the number of shares of Toyota’s common stock held by each member of the board of directors and audit & supervisory board member as of June 2024, see “Item 6.
Chairman of the Japan Automobile Manufacturers Association, Inc. Director of DENSO Corporation Representative Director of ROOKIE Racing, Inc. Chairman of TOYOTA GAZOO Racing World Rally Team 24,691 Shigeru Hayakawa (September 15, 1953) Vice Chairman of the Board of Directors 1977 Joined Toyota Motor Sales Co., Ltd. 2007 Managing Officer of TMC 2007 Toyota Motor North America, Inc.
Director of DENSO Corporation Representative Director of ROOKIE Racing, Inc. Chairman of TOYOTA GAZOO Racing World Rally Team 23,466 Shigeru Hayakawa (September 15, 1953) Vice Chairman of the Board of Directors 1977 Joined Toyota Motor Sales Co., Ltd. 2007 Managing Officer of TMC 2007 Toyota Motor North America, Inc.
In general, Toyota considers its labor relations with all of its workers to be good. However, Toyota is currently a party to, and otherwise from time to time experiences, labor disputes in some of the countries in which it operates. Toyota does not expect any disputes to which it is currently a party to materially affect Toyota’s consolidated financial position.
However, Toyota is currently a party to, and otherwise from time to time experiences, labor disputes in some of the countries in which it operates. Toyota does not expect any disputes to which it is currently a party to materially affect Toyota’s consolidated financial position.
Outside Director of FUJIFILM Holdings Corporation Sir Philip Craven (July 4, 1950) Outside Member of the Board of Directors 1989 President of the International Wheelchair Basketball Federation 2001 President of the International Paralympic Committee 2002 Retired as President of the International Wheelchair Basketball Federation 2017 Retired as President of the International Paralympic Committee 2018 Outside Member of the Board of Directors of TMC (to present) — Masahiko Oshima (September 13, 1960) Outside Member of the Board of Directors 1984 Joined The Mitsui Bank Limited 2012 Executive Officer of Sumitomo Mitsui Banking Corporation (SMBC) 2014 Managing Executive Officer of SMBC 2017 Director and Managing Executive Officer of SMBC Director and Senior Managing Executive Officer of SMBC 2018 Senior Managing Corporate Executive Officer of Sumitomo Mitsui Financial Group, Inc.
Outside Director of FUJIFILM Holdings Corporation — 103 Table of Contents Name (Date of Birth) Position Brief Career Summary and Important Concurrent Duties Number of Common Shares (in thousands) Sir Philip Craven (July 4, 1950) Outside Member of the Board of Directors 1989 President of the International Wheelchair Basketball Federation 2001 President of the International Paralympic Committee 2002 Retired as President of the International Wheelchair Basketball Federation 2017 Retired as President of the International Paralympic Committee 2018 Outside Member of the Board of Directors of TMC (to present) — Masahiko Oshima (September 13, 1960) Outside Member of the Board of Directors 1984 Joined The Mitsui Bank Limited 2012 Executive Officer of Sumitomo Mitsui Banking Corporation (SMBC) 2014 Managing Executive Officer of SMBC 2017 Director and Managing Executive Officer of SMBC Director and Senior Managing Executive Officer of SMBC 2018 Senior Managing Corporate Executive Officer of Sumitomo Mitsui Financial Group, Inc.
Executive Compensation Meetings were held in April 2022 and March and April 2023 to discuss and determine the amount of remuneration for fiscal 2023 and other relevant matters.
Executive Compensation Meetings were held in June, September, October and December 2023 and February, March and April 2024 to discuss and determine the amount of remuneration for fiscal 2024 and other relevant matters.
In addition to the above compensation, Toyota and its consolidated subsidiary, Woven Planet Holdings, Inc. paid a tax compensation of 520 million yen to James Kuffner, taking into account the difference in tax rates with respect to his home country and Japan. Woven Planet Holdings, Inc. was renamed Woven by Toyota, Inc. on April 1, 2023.
In addition to the above fixed compensation, Toyota and its consolidated subsidiary, Woven by Toyota, Inc., paid a tax compensation of 44 million yen to James Kuffner, taking into account the difference in tax rates with respect to his home country and Japan.
Most regular employees of Toyota Motor Corporation and its consolidated subsidiaries in Japan, other than management, are required to become members of the labor unions that compose the Federation of All Toyota Workers’ Unions. Approximately 86% of Toyota Motor Corporation’s regular employees in Japan are members of this union. In Japan, basic wages and other working conditions are negotiated annually.
Most regular employees of Toyota Motor Corporation and its consolidated subsidiaries in Japan, other than management, are required to become members of the labor unions that compose the Federation of All Toyota Workers’ Unions.
The Individual performance evaluation is set within the range of 50% above or below Annual Total Remuneration in accordance with the position and job responsibilities, and the amount of the annual total remuneration for each member of the board of directors is calculated based on such evaluation results.
The scope of adjustments based on individual performance evaluations is set commensurate with position and job responsibilities within the range of 50% above or below Annual Total Remuneration. Annual Total Remuneration of the Board of Directors is calculated based on evaluation results.
As a result, this remuneration is not readily impacted by business performance, helping to ensure independence from management. 105 Table of Contents Based on the resolution of the 115th Ordinary General Shareholders’ Meeting held on June 13, 2019 concerning remuneration for the members of the board of directors of Toyota, the maximum cash compensation was set at 3.0 billion yen per year (of which, the maximum amount payable to outside members of the board of directors is 0.3 billion yen per year), and the maximum share compensation was set at 4.0 billion yen per year.
Based on the resolution of the 115th Ordinary General Shareholders’ Meeting held on June 13, 2019 concerning remuneration for the members of the board of directors of Toyota, the maximum cash compensation was set at 3.0 billion yen per year (of which, the maximum amount payable to outside members of the board of directors is 0.3 billion yen per year), and the maximum share compensation was set at 4.0 billion yen per year.
The concept of each item is the same as that for directors with Japanese citizenship (excluding outside members of the board of directors). There are cases where Toyota provides income tax compensation for certain members of the board of directors in light of the difference in income tax rates with those of his or her home country.
In addition, there are cases where Toyota provides income tax compensation for certain members of the board of directors in light of the difference in income tax rates with those of his or her home country.
For fiscal 2023, the Executive Compensation Meeting consists of vice chairman of the board of directors Shigeru Hayakawa *1 (Chairman), member of the board of directors Yoichi Miyazaki, and outside members of the board of directors Ikuro Sugawara, Sir Philip Craven, Masahiko Oshima *3 and Emi Osono *3 . *1 Shigeru Hayakawa, Vice Chairman of the Board of Directors, replaced Takeshi Uchiyamada, Chairman of the Board of Directors, as Chairman of the Executive Compensation Meeting on April 1, 2023.
As of the date of this annual report, the Executive Compensation Meeting consists of vice chairman of the board of directors Shigeru Hayakawa (Chairman), member of the board of directors Yoichi Miyazaki, and outside members of the board of directors Ikuro Sugawara, Sir Philip Craven, Masahiko Oshima and Emi Osono*.
Individual performance evaluation takes into account various factors such as initiatives (including the ESG perspective) in keeping with the spirit of the Toyoda Principles, which set forth Toyota’s founding philosophy, trust from his or her peers and contribution to the promotion of human resources development.
The individual performance evaluation takes into account various factors, such as initiatives (including the ESG perspective) based on the Toyota Philosophy, as well as trust from his or her peers and contribution to the promotion of human resources development.
Teiko Kudo, an outside member of the Board of Directors, retired as an outside member of the Board of Directors upon the conclusion of the Ordinary General Shareholders’ Meeting held on June 14, 2023. *4 The amount of remuneration for each outside member of the Board of Directors and the amount of remuneration for each non-outside member of the Board of Directors were determined at meetings of the Executive Compensation Meeting held in April 2022 and April 2023, respectively.
The amount of remuneration for each outside member of the Board of Directors and the amount of remuneration for each non-outside member of the Board of Directors were determined at meetings of the Executive Compensation Meeting held in June 2023 and April 2024, respectively. * Masahiko Oshima and Emi Osono, both outside members of the Board of Directors, replaced Teiko Kudo, an outside member of the Board of Directors, as members of the Executive Compensation Meeting on June 14, 2023.
In order to convey top management’s aspirations and the company’s direction to all stakeholders, Toyota communicates what Toyota is really like through “Toyota Times.” Toyota believes that it is critical to appoint individuals who are capable of contributing to decision-making aimed at sustainable growth into the future by practicing “product-centered and region-centered management” in keeping with the spirit of the Toyoda Principles, which set forth its founding philosophy.
In order to convey top management’s aspirations and the company’s direction to all stakeholders, Toyota communicates what Toyota is really like through “Toyota Times.” Toyota believes that it is critical to appoint individuals who practice “product-centered and region-centered management” and contribute to decision-making aimed at sustainable growth into the future based on the “Toyota Philosophy”.
Motor Company Senior In House Counsel of Matsushita Electronic Components Co., Ltd. 2008 Hogan Lovells Horitsu Jimusho Gaikokuho Kyodo Jigyo 2012 Head of Legal of Molex Japan LLC 2017 President of O’Connell Consultants 2018 CEO of Catherine O’Connell Law (to present) 2023 Outside Audit & Supervisory Board Member of TMC (to present) (important concurrent duties) Registered foreign attorney External Audit & Supervisory Board Member of Fujitsu Limited — 1.
Motor Company Senior In House Counsel of Matsushita Electronic Components Co., Ltd. 2008 Hogan Lovells Horitsu Jimusho Gaikokuho Kyodo Jigyo 2012 Head of Legal of Molex Japan LLC 2017 President of O’Connell Consultants 2018 CEO of Catherine O’Connell Law (to present) 2023 Outside Audit & Supervisory Board Member of TMC (to present) (important concurrent duties) Registered foreign attorney External Audit & Supervisory Board Member of Fujitsu Limited — Hiromi Osada (June 11, 1973) Outside Audit & Supervisory Board Member 1999 Joined Chunichi Shimbun Co., Ltd. 2021 Editorial writer and Leader for reserve reporters in the Business News Department of Chunichi Shimbun Co., Ltd. 2023 Editorial Committee Member and International General Desk of Chunichi Shimbun Co., Ltd. 2024 Retired from Chunichi Shimbun Co., Ltd. 2024 Outside Audit & Supervisory Board Member of TMC (to present) — 1.
None of Toyota’s members of the board of directors is party to a service contract with Toyota or any of its subsidiaries that provides for benefits upon termination of employment. 109 Table of Contents Under the provisions of the Companies Act, if Toyota decides the terms of an agreement promising that Toyota will compensate a member of the board of directors for all or part of certain expenses incurred by the member of the board of directors, such a decision must be made by a resolution of the board of directors.
Under the provisions of the Companies Act, if Toyota decides the terms of an agreement promising that Toyota will compensate a member of the board of directors for all or part of certain expenses incurred by the member of the board of directors, such a decision must be made by a resolution of the board of directors.
The terms of office of Mr. Masahide Yasuda and Mr. George Olcott, who are both Audit & Supervisory Board Members, are from the conclusion of the Ordinary General Shareholders’ Meeting held on June 15, 2022 to the conclusion of the Ordinary General Shareholders’ Meeting for fiscal 2026. 4. The terms of office of Mr. Katsuyuki Ogura, Mr. Takeshi Shirane, Mr.
George Olcott, who are both Audit & Supervisory Board Members, commenced at the conclusion of the Ordinary General Shareholders’ Meeting held on June 15, 2022 and will expire at the conclusion of the Ordinary General Shareholders’ Meeting for fiscal 2026. 5. The terms of office of Ms.
Ryuji Sakai and Ms. Catherine O’Connell, who are all Audit & Supervisory Board Members, are from the conclusion of the Ordinary General Shareholders’ Meeting held on June 14, 2023 to the conclusion of the Ordinary General Shareholders’ Meeting for fiscal 2027.
Catherine O’Connell, who are all Audit & Supervisory Board Members, commenced at the conclusion of the Ordinary General Shareholders’ Meeting held on June 14, 2023 and will expire at the conclusion of the Ordinary General Shareholders’ Meeting for fiscal 2027. 4. The terms of office of Mr. Masahide Yasuda and Mr.
Performance-based remuneration is set based on consolidated operating income, the fluctuation of the market capitalization of Toyota and individual performance, taking into account each member’s job responsibilities and the remuneration standards of such member’s home country (application determined based on each member’s job responsibilities and other factors).
Composition and Method of Setting Performance-based Remuneration in the Treatment of Retired Members of the Board of Directors with Foreign Citizenship Performance-based remuneration is set based on consolidated operating income, the fluctuation of the market capitalization of Toyota and individual performance, taking into account each member’s job 114 Table of Contents responsibilities and the remuneration standards of such member’s home country (application determined individually).
The normal term of office of a member of the board of directors is one year and that of an audit & supervisory board member is four years. Members of the board of directors and audit & supervisory board members may serve any number of consecutive terms.
Shareholders elect the members of the board of directors and audit & supervisory board members at the general shareholders’ meeting. The normal term of office of a member of the board of directors is one year and that of an audit & supervisory board member is four years.
Furthermore, preliminary examination meetings, consisting only of outside members of the board of directors, were held on a total of five occasions in July, September and October 2022 and January and February 2023 to discuss matters for the Executive Compensation Meetings.
Furthermore, preliminary examination meetings, consisting only of outside members of the board of directors, were held in July 2023 and January, February and April 2024 to discuss matters for the Executive Compensation Meetings. Remuneration for the members of the board of directors were determined with the unanimous consent of the Executive Compensation Meeting.
(to present) Audit & Supervisory Board Member of TMC (to present) 150 George Olcott (May 7, 1955) Outside Audit & Supervisory Board Member 1986 Joined S.G.Warburg & Co.,Ltd 1999 President of UBS Asset Management (Japan) 1999 President, Japan UBS Brinson 2000 Managing Director, Equity Capital Markets, UBS Warburg Tokyo 2001 Judge Business School, University of Cambridge 2005 FME Teaching Fellow, Judge Business School, University of Cambridge 2008 Senior Fellow, Judge Business School, University of Cambridge 2022 Outside Audit & Supervisory Board Member of TMC (to present) (important concurrent duties) Outside Director of Kirin Holdings Company, Limited 2 Ryuji Sakai (August 7, 1957) Outside Audit & Supervisory Board Member 1985 Registered as attorney Nagashima & Ohno 1990 Wilson, Sonsini, Goodrich & Rosati (located in U.S.) 1995 Partner, Nagashima & Ohno 2000 Partner, Nagashima Ohno & Tsunematsu 2022 Audit & Supervisory Board Member of TMC (to present) 2023 Senior Counsel of Nagashima Ohno & Tsunematsu (to present) (important concurrent duties) Attorney — 103 Table of Contents Name (Date of Birth) Position Brief Career Summary and Important Concurrent Duties Number of Common Shares (in thousands) Catherine O’Connell (February 10, 1967) Outside Audit & Supervisory Board Member 1987 Japan Travel Bureau Inc. 1994 Senior Solicitor of Anderson Lloyd Barristers & Solicitors (New Zealand) 2002 In House Counsel of Olympus Corporation 2004 Senior In House Counsel of Matsushita Electric Industrial Co., Ltd.
(to present) Audit & Supervisory Board Member of TMC (to present) 150 Masahide Yasuda (April 1, 1949) Full-time Audit & Supervisory Board Member 1972 Joined TMC 2000 General Manager of Overseas Parts Division of TMC 2007 President of Toyota Motor Corporation Australia Ltd. 2014 Chairman of Toyota Motor Corporation Australia Ltd. 2017 Retired as Chairman of Toyota Motor Corporation Australia Ltd. 2018 Audit & Supervisory Board Member of TMC (to present) 63 Katsuyuki Ogura (January 25, 1963) Full-time Audit & Supervisory Board Member 1985 Joined TMC 2015 General Manager of Affiliated Companies Finance Dept. of TMC 2018 General Manager of Audit & Supervisory Board Office of TMC 2019 Audit & Supervisory Board Member of TMC (to present) (important concurrent duties) Outside Audit & Supervisory Board Member of Aichi Steel Corporation 30 105 Table of Contents Name (Date of Birth) Position Brief Career Summary and Important Concurrent Duties Number of Common Shares (in thousands) George Olcott (May 7, 1955) Outside Audit & Supervisory Board Member 1986 Joined S.G.Warburg & Co., Ltd 1999 President of UBS Asset Management (Japan) 1999 President, Japan UBS Brinson 2000 Managing Director, Equity Capital Markets, UBS Warburg Tokyo 2001 Judge Business School, University of Cambridge 2005 FME Teaching Fellow, Judge Business School, University of Cambridge 2008 Senior Fellow, Judge Business School, University of Cambridge 2022 Outside Audit & Supervisory Board Member of TMC (to present) (important concurrent duties) Outside Director of Kirin Holdings Company, Limited 3 Catherine O’Connell (February 10, 1967) Outside Audit & Supervisory Board Member 1987 Joined Japan Travel Bureau Inc. 1994 Senior Solicitor of Anderson Lloyd Barristers & Solicitors (New Zealand) 2002 In House Counsel of Olympus Corporation 2004 Senior In House Counsel of Matsushita Electric Industrial Co., Ltd.
Concept of Each Item Consolidated operating income Indicator for evaluating Toyota’s efforts based on business performance Fluctuation of the market capitalization Corporate value indicator for shareholders and investors to evaluate Toyota’s efforts Individual performance evaluation Qualitative evaluation of performance of each member of the board of directors 107 Table of Contents Method and Reference Value for Evaluating Indicators and Evaluation Result for Fiscal 2022 Evaluation Weight Evaluation Method Reference Value Evaluation Result for Fiscal 2022 Consolidated operating income 70% Evaluate the degree of attainment of consolidated operating income in fiscal 2021, using required income (set in 2011) for Toyota’s sustainable growth as reference value ¥1 trillion Fluctuation of Toyota’s market capitalization 30% Comparatively evaluate the fluctuation of Toyota’s market capitalization up to fiscal 2022 (average of January-March), using the market capitalization of Toyota and the TOPIX of fiscal 2021 (average of January-March) as reference values Toyota: ¥30.4 trillion TOPIX : ¥1,909.75 180% Method of Setting Annual Total Remuneration Annual Total Remuneration is set using a theoretical formula that takes into account the benchmarking results of remuneration for members of the board of directors.
Toyota sets an appropriate executive compensation level for Annual Total Remuneration based on position and duties by referencing a benchmark of Japanese and also global companies selected based on the size of each person’s role and other factors. * Calculated by multiplying the closing price of Toyota’s common stock for fiscal 2024 on the Tokyo Stock Exchange by the number of shares issued after deducting the number of treasury stock Concept of Each Item of Performance-based Remuneration for Retired Members of the Board of Directors Consolidated operating income Indicator for evaluating Toyota’s efforts based on business performance Fluctuation of the market capitalization Corporate value indicator for shareholders and investors to evaluate Toyota’s efforts Individual performance evaluation Qualitative evaluation of performance of each member of the board of directors 113 Table of Contents Method and Reference Value for Evaluating Indicators and Evaluation Result of Performance-based Remuneration for Retired Members of the Board of Directors Evaluation Weight Evaluation Method Reference Value Evaluation Result for Fiscal 2022 Consolidated operating income 70% Evaluate the degree of attainment of consolidated operating income in fiscal 2024, using required income (set in 2011) for Toyota’s sustainable growth as reference value ¥1 trillion 330% Fluctuation of Toyota’s market capitalization 30% Comparatively evaluate the fluctuation of Toyota’s market capitalization for fiscal 2024 (average of January-March), using the market capitalization of Toyota and the TOPIX of fiscal 2023 (average of January-March) as reference values Toyota: ¥25.5 trillion TOPIX : ¥1,990.68 Method of Setting Annual Total Remuneration for Retired Members of the Board of Directors Annual Total Remuneration is set using a theoretical formula that takes into account the benchmarking results of remuneration for members of the board of directors.
Moreover, these individuals should be able to play a significant role in transforming Toyota into a mobility company and contribute to the solutions of social issues, including climate change, through efforts for electrification, intelligence, and diversification and building external partnerships therefor based on trust and friendship and internal two-way interactive teamwork.
Outside Director of Shizuoka Financial Group, Inc. — 6.B COMPENSATION Decision Making Policy and Process Toyota believes that it is critical to appoint individuals who practice “product-centered and region-centered management” and contribute to decision-making aimed at sustainable growth into the future based on the “Toyota Philosophy.” Moreover, these individuals should be able to play a significant role in transforming Toyota into a mobility company and contribute to the solutions of social issues, including climate change, 107 Table of Contents through efforts for electrification, intelligence, and diversification and building external partnerships therefor based on trust and friendship and internal two-way interactive teamwork.
The board of directors may appoint one Chairman of the Board of Directors and one President, as well as one or more Vice Chairmen of the Board and Executive Vice Presidents. The board of directors elects, pursuant to its resolutions, one or more Representative Directors. Each Representative Director represents Toyota generally in the conduct of its affairs.
The board of directors elects, pursuant to its resolutions, one or more Representative Directors. Each Representative Director represents Toyota generally in the conduct of its affairs. The board of directors has the ultimate responsibility for the administration of Toyota’s affairs.
Kenta Kon, a member of the Board of Directors, retired as a member of the Board of Directors upon the conclusion of the Ordinary General Shareholders’ Meeting held on June 14, 2023, and Yoichi Miyazaki, Operating Officer, became a member of the Board of Directors upon the conclusion of the Ordinary General Shareholders’ Meeting held on June 14, 2023. *3 Masahiko Oshima and Emi Osono, both outside members of the Board of Directors, replaced Teiko Kudo, an outside member of the Board of Directors, as members of the Executive Compensation Meeting on June 14, 2023.
Teiko Kudo, an outside member of the Board of Directors, retired as an outside member of the Board of Directors upon the conclusion of the Ordinary General Shareholders’ Meeting held on June 14, 2023.
Compensation The aggregate amount of remuneration, including bonuses, accrued for all members of the board of directors and audit & supervisory board members as a group by Toyota for services in all capacities was ¥3,461 million during fiscal 2023. 108 Table of Contents Toyota Motor Corporation and its subsidiaries have not set aside or accrued any amounts to provide pension, retirement or similar benefits to members of the board of directors and audit & supervisory board members of Toyota Motor Corporation.
Compensation The aggregate amount of remuneration, including bonuses, accrued for all members of the board of directors and audit & supervisory board members as a group by Toyota for services in all capacities was ¥4,460 million during fiscal 2024.
The amounts above were recorded as expenses in fiscal 2023. 6.C BOARD PRACTICES Toyota’s articles of incorporation provide for a board of directors of not more than 20 members and for not more than seven audit & supervisory board members. Shareholders elect the members of the board of directors and audit & supervisory board members at the general shareholders’ meeting.
Performance-based compensation paid by Toyota to James Kuffner includes performance-based compensation for the year ended March 2022 (68 million yen). 115 Table of Contents The amounts above were recorded as expenses in fiscal 2024. 6.C BOARD PRACTICES Toyota’s articles of incorporation provide for a board of directors of not more than 20 members and for not more than seven audit & supervisory board members.
Segment Number of Employees Location Number of Employees Automotive 332,425 Japan 203,212 Financial services 13,894 North America 59,000 All other 22,856 Europe 23,730 Unallocated 6,060 Asia 66,176 Other* 23,117 Total 375,235 Total 375,235 * “Other” consists of Central and South America, Oceania, Africa and the Middle East.
Segment Number of Employees Location Number of Employees Automotive 336,291 Japan 202,152 Financial services 14,658 North America 63,842 All other 23,325 Europe 23,610 Unallocated 6,519 Asia 66,304 Other* 24,885 Total 380,793 Total 380,793 * “Other” consists of Central and South America, Oceania, Africa and the Middle East.
The principal topics discussed at Executive Compensation Meetings included: • Remuneration level for each position and job responsibility • Evaluation of benchmarks and actual results of fiscal 2022 • Determination of the amount of remuneration for each member of the board of directors Method of Determining Performance-based Remuneration (Bonus and Share Compensation) Directors with Japanese Citizenship (Excluding Outside Members of the Board of Directors) Toyota sets the total amount of remuneration (“Annual Total Remuneration”) received by each member of the board of directors in a year based on consolidated operating income, the fluctuation of the market capitalization of Toyota (calculated by multiplying the closing price of Toyota’s common stock on the Tokyo Stock Exchange and the total number of issued shares of Toyota common stock (less shares of treasury stock)) and individual performance evaluation.
Method of Determining Performance-based Remuneration (Bonus and Share Compensation) for Retired Members of the Board of Directors Toyota sets the Annual Total Remuneration received by each member of the board of directors in a year based on consolidated operating income, the fluctuation of the market capitalization of Toyota* and individual performance evaluation.
Fixed remuneration is set, taking into account each member’s job responsibilities and the remuneration standards of such member’s home country (application determined based on each member’s job responsibilities and other factors).
Annual Total Remuneration levels as well as the percentages of fixed remuneration and performance-based remuneration in total remuneration are set, taking into account each member’s job responsibilities and the remuneration standards of the entity for which such member previously worked (application determined individually).
Toyota’s Annual Securities Report filed with the Kanto Local Bureau of Finance on June 30, 2023, contained the following information concerning compensation in fiscal 2023 on a consolidated basis for members of the board of directors and audit & supervisory board members whose total compensation exceeded ¥100 million during such period: Name, Position Classification of Company Compensation per Type (million yen) Total Compensation (millions of yen) Fixed Compensation Performance-based Compensation Retirement Benefits Monthly Compensation Bonus Share Compensation Takeshi Uchiyamada, Member of the Board of Directors Toyota Motor Corporation 122 197 — — 319 Shigeru Hayakawa, Member of the Board of Directors Toyota Motor Corporation 77 1 73 (38,000 shares) — 151 Akio Toyoda, Member of the Board of Directors Toyota Motor Corporation 264 — 735 (383,000 shares) — 999 James Kuffner, Member of the Board of Directors Toyota Motor 108 68 — — 811 Corporation Consolidated subsidiary (Woven Planet Holdings, Inc.*) 587 48 — — Kenta Kon, Member of the Board of Directors Toyota Motor 52 56 — — 120 Corporation Consolidated subsidiary (Hino Motors, Ltd.) 11 — — — * Fixed compensation that Woven Planet Holdings, Inc., Toyota’s consolidated subsidiary, pays to James Kuffner includes fixed compensation that is paid trimonthly and annually.
Toyota’s Annual Securities Report filed with the Kanto Local Bureau of Finance on June 25, 2024, contained the following information concerning compensation in fiscal 2024 on a consolidated basis for members of the board of directors and audit & supervisory board members whose total compensation exceeded ¥100 million during such period: Compensation per Type (million yen) Performance-based Compensation Name, Position Classification of Company Fixed Compensation Bonus Share Compensation Retirement Benefits Total Compensation (millions of yen) Akio Toyoda, Member of the Board of Directors Toyota Motor Corporation 289 324 1,009 (280,000 shares) — 1,622 Shigeru Hayakawa, Member of the Board of Directors Toyota Motor Corporation 77 133 179 (50,000 shares) — 389 Koji Sato*1, Member of the Board of Directors Toyota Motor Corporation 87 187 349 (97,000 shares) — 623 Hiroki Nakajima*1, Member of the Board of Directors Toyota Motor Corporation 48 110 137 (38,000 shares — 295 Yoichi Miyazaki*1, Member of the Board of Directors Toyota Motor Corporation 50 110 137 (38,000 shares — 297 Simon Humphries*1, Member of the Board of Directors Toyota Motor Corporation 36 55 51 (14,000 shares) — 143 James Kuffner*2, Member of the Board of Directors Toyota Motor Corporation 27 101 — — 531 Consolidated subsidiary (Woven by Toyota, Inc.) 133 271 — — *1 For Koji Sato, the President and a Member of the Board of Directors, and Hiroki Nakajima, Yoichi Miyazaki and Simon Humphries, who are Members of the Board of Directors, who all assumed office as directors at the Ordinary General Shareholders’ Meeting held on June 14, 2023, nine months’ compensation is listed. *2 For James Kuffner, who retired as director at the Ordinary General Shareholders’ Meeting held on June 14, 2023, three months’ compensation is listed.
Mr. Koji Sato, who is President and Member of the Board of Directors, concurrently serves as Operating Officer (President). 2. The terms of office of the members of the board of directors are from the conclusion of the Ordinary General Shareholders’ Meeting held on June 14, 2023 to the conclusion of the Ordinary General Shareholders’ Meeting for fiscal 2024. 3.
Mr. Koji Sato, who is President and Member of the Board of Directors, concurrently serves as Operating Officer (President). 106 Table of Contents 2.
In addition, in accordance with Japanese national custom, each employee is also paid a semi-annual bonus. Bonuses are negotiated at the time of wage negotiations and are based on Toyota’s financial results, prospects and other factors. The average wage increase for all union members, excluding bonuses, in Japan was approximately 3.15% in fiscal 2023.
Approximately 88% of Toyota Motor Corporation’s regular employees in Japan are members of this union. 117 Table of Contents In Japan, basic wages and other working conditions are negotiated annually. In addition, in accordance with Japanese national custom, each employee is also paid a semi-annual bonus.
As of March 31, 2023, the employee stock ownership association held 74,266,923 shares of Toyota’s common stock.
As of March 31, 2024, the employee stock ownership association held 70,518,475 shares of Toyota’s common stock. 6.F DISCLOSURE OF A REGISTRANT’S ACTION TO RECOVER ERRONEOUSLY AWARDED COMPENSATION None.
Removed
Name (Date of Birth) Position Brief Career Summary and Important Concurrent Duties Number of Common Shares Maoko Kikuchi (July 14, 1965) Substitute Audit & Supervisory Board Member 1992 Public Prosecutor at Public Prosecutor’s Office, Mistry of Justice 1997 Joined Paul Hastings, LLP (U.S.) 1999 Registered as attorney Joined Nagashima & Ohno 2004 Chief of the General Secretariat of the Japan Fair Trade Commission 2006 General Manager of Legal and Regulatory Affairs Div. of Vodafone K.K. 2014 Executive Officer of Microsoft Japan Co., Ltd. 2016 Standing Outside Audit & Supervisory Board Member of MITSUISOKO HOLDINGS Co., Ltd. 2020 President of Compass International Law Office (to present) (important concurrent duties) Attorney Outside Director of MITSUISOKO HOLDINGS Co., Ltd.
Added
Takeshi Shirane (September 5, 1952) Full-time Audit & Supervisory Board Member 1977 Joined TMC 2001 General Manager of Production Management Div. of TMC 2004 General Manager of Global Procurement Planning Div. of TMC 2005 General Manager of 1st Procurement Div. of TMC Managing Officer of TMC 2009 Senior Managing Director of TMC 2011 Senior Managing Officer of TMC Advisor of Kanto Auto Works, Ltd. 2012 President of Kanto Auto Works, Ltd.
Removed
Outside Director of Hitachi Construction Machinery Co., Ltd. — 6.B COMPENSATION Decision Making Policy and Process Toyota believes that it is critical to appoint individuals who are capable of implementing “management centered on products and regions” and contributing to decision-making aimed at sustainable growth into the future in keeping with the spirit of the Toyoda Principles, which set forth its founding philosophy.
Added
The terms of office of the members of the board of directors commenced at the conclusion of the Ordinary General Shareholders’ Meeting held on June 18, 2024 and will expire at the conclusion of the Ordinary General Shareholders’ Meeting for fiscal 2025. 3. The terms of office of Mr. Takeshi Shirane, Mr. Katsuyuki Ogura, and Ms.
Removed
Takeshi Uchiyamada, Chairman of the Board of Directors, became a member of the Board of Directors as of the same date, and subsequently retired as a member of the Board of Directors upon the conclusion of the Ordinary General Shareholders’ Meeting held on June 14, 2023. *2 Kenta Kon, a member of the Board of Directors, replaced Koji Kobayashi, a member of the Board of Directors, as a member of the Executive Compensation Meeting on June 15, 2022.
Added
Hiromi Osada commenced at the conclusion of the Ordinary General Shareholders’ Meeting held on June 18, 2024 and will expire at the conclusion of the Ordinary General Shareholders’ Meeting for fiscal 2028.
Removed
Yoichi Miyazaki, Operating Officer, subsequently replaced Kenta Kon as a member of the Executive Compensation Meeting on April 1, 2023. Koji Kobayashi, a member of the Board of Directors, retired as a member of the Board of Directors upon the conclusion of the Ordinary General Shareholders’ Meeting held on June 15, 2022.
Added
Name (Date of Birth) Position Brief Career Summary and Important Concurrent Duties Number of Common Shares Kumi Fujisawa (March 15, 1967) Substitute Audit & Supervisory Board Member 1995 Founder and President of IFIS Limited Ltd. 2000 Director of Think Tank SophiaBank 2011 Public Governor of the Japan Securities Dealers Association (to present) 2012 Director of Organization for Supporting the Turnaround of Businesses Damaged by the Great East Japan Earthquake 2013 President of Think Tank SophiaBank 2014 Outside Director of Toyota Tsusho Corporation 2022 Chairperson of Institute for International Socio-Economic Studies (to present) (important concurrent duties) Chairperson of Institute for International Socio-Economic Studies Outside Director of Net Protections Holdings, Inc.
Removed
The board of directors also resolves to delegate the determination of the amount of remuneration for each member of the board of directors to the Executive Compensation Meeting.
Added
Outside Director (Audit & Supervisory Committee Member) of CellSource Co., Ltd.
Removed
Remuneration for the members of the board of directors were determined with the unanimous consent of the Executive Compensation Meeting.
Added
As a result, this remuneration is not readily impacted by business performance, helping to ensure independence from management.
Removed
The balance after deducting fixed remuneration, or monthly remuneration, from Annual Total Remuneration constitutes performance-based remuneration. Toyota determines the annual total remuneration level appropriate for each position and job responsibility in accordance with factors including the size of each director’s role, and by referring to the benchmarking result of remuneration for officers of both Japanese and global companies.
Added
The principal topics discussed at Executive Compensation Meetings included: • Review of remuneration level for each position and job responsibility • Review of remuneration composition for each position and job responsibility • Review of benchmarks and evaluation of actual results of fiscal 2024 • Determination of the amount of remuneration for each member of the board of directors As a result of discussions at the Executive Compensation Meeting, Toyota has revised part of the policies for determining remuneration for each member of the Board of Directors from fiscal 2023 in order to be able to better put into practice the purport of the Overall Policy.
Removed
The board of directors has the ultimate responsibility for the administration of Toyota’s affairs.
Added
However, for those members of the Board of Directors who retired at the close of the Ordinary General Shareholders’ Meeting held on June 14, 2023 (“Retired Members of the Board of Directors”), the amount of remuneration for each member is determined by applying the determination policies before the revision.
Removed
The audit & supervisory board members may not at the same time be a member of the board of directors, an accounting counselor (in case that an accounting counselor is a judicial person, a member of such judicial person who is in charge of its affairs), executive officers, general managers or employees of Toyota or any of its subsidiaries.
Added
Method of Determining Performance-based Remuneration (Bonus and Share Compensation) Directors with Japanese Citizenship (Excluding Outside Members of the Board of Directors) Toyota sets the total amount of compensation that each member of the board of directors receives annually (“Annual Total Remuneration”) at an appropriate level based on position and duties by referencing a benchmark of Japanese and also global companies selected based on the size of each person’s role and other factors.
Added
Toyota makes sure that STI (short term incentive) and LTI (long term incentive) account for around 20% and 50% of the Annual Total Remuneration, respectively, and performance-based remuneration, which is STI and LTI combined, account for around 70%.
Added
STI is provided in the form of cash compensation based on “consolidated operating income” and “fluctuation of Toyota’s market capitalization*.” LTI is provided in the form of share compensation based on “multiple financial indicators,” “non-financial indicator,” and “individual performance evaluation.” * Calculated by multiplying the closing price of Toyota’s common stock on the Tokyo Stock Exchange by the number of shares issued after deducting the number of shares of treasury stock 109 Table of Contents Composition of Compensation Type of Remuneration % of Total Remuneration Remuneration Method Concept Base compensation Around 30% Cash compensation The percentage of total remuneration represented by LTI is designed to increase as an individual’s roles and duties become greater.
Added
STI (Short Term Incentive) Around 20% Cash compensation LTI (Long Term Incentive) Around 50% Share compensation Concept of Performance Evaluating Indicators STI Financial indicators (1) Consolidated operating income (single year) Indicator for evaluating Toyota’s efforts based on short-term business performance (2) Fluctuation of Toyota’s market capitalization Corporate value indicator for shareholders and investors to evaluate Toyota’s efforts LTI Financial indicators (3) Consolidated operating income (multiple years) Indicator for evaluating Toyota’s medium- to long-term efforts based on business performance (4) Total shareholder return Corporate value indicator for shareholders and investors to evaluate Toyota’s medium- to long-term efforts (5) Return on equity Non-financial indicator (6) Progress of efforts to resolve sustainability issues Indicator for evaluating Toyota’s medium- to long-term efforts based on the degree of corporate value enhancement Individual performance evaluation Qualitative evaluation of performance of each member of the Board of Directors 110 Table of Contents Method and Reference Value for Each Performance Evaluating Indicator and Evaluation Result STI Evaluation Weight Evaluation Method Reference Value Evaluation Result (1) Consolidated operating income (single year) 70% Evaluate the degree of attainment of consolidated operating income in fiscal 2024, using the average consolidated operating income of Toyota over the last 10 fiscal years as a reference value (set in 2023) 2.5 trillion yen 191% (2) Fluctuation of Toyota’s market capitalization 30% Comparatively evaluate the fluctuation of TMC’s market capitalization for fiscal 2024 (average from January through March), using the market capitalization of Toyota and TOPIX for fiscal 2023 (average from January through March) as reference values Toyota: 25.5 trillion yen TOPIX: 1,990.68 111 Table of Contents LTI Evaluation Weight Evaluation Method Reference Value Evaluation Result (3) Consolidated operating income (multiple years) 35% Evaluate the degree of attainment of consolidated operating income for the last three fiscal years, including fiscal 2024, using the average consolidated operating income of Toyota over the last 10 fiscal years as a reference value (set in 2023) 2.5 trillion yen 139% (4) Total shareholder return 17.5% Comparatively evaluate Toyota’s total shareholder return, using the rate of change calculated by dividing the sum of the stock price of Toyota on the last day of fiscal 2024 and the cumulative amount of dividend per share during the period from the fiscal year that is four years before fiscal 2024 through fiscal 2024 by the stock price on the last day of the fiscal year that is five years before fiscal 2024 and the rate of change in TOPIX Net Total Return calculated in the same manner as reference values TOPIX: 196.2% (5) Return on equity 17.5% Comparatively evaluate Toyota’s return on equity for fiscal 2024 using the levels recommended by the Ito Review *1 as reference values 8% (6) Progress of efforts to resolve sustainability issues 30% Evaluate the degree of contribution of business activities during fiscal 2024 in accordance with the six key issues (materiality) *2 Six key issues (materiality) *1 A report on corporate governance reforms released by the Ministry of Economy, Trade and Industry in 2014 *2 The six key issues identified by Toyota are: (1) Expanding the Value of Mobility; (2) Safety & Reliability; (3) Coexistence of Humanity & the Earth (including carbon neutrality); (4) Supporting the Community and Employment; (5) Active Participation for All; and (6) Strong Production and Business Operation 112 Table of Contents Concept of Individual Performance Evaluation For the determination of Annual Total Remuneration, the LTI base amount is subject to adjustment based on individual performance evaluation.
Added
The evaluation takes into account various factors, such as initiatives (including the ESG perspective) based on the Toyota Philosophy and initiatives toward medium- to long-term corporate value enhancement, as well as trust from his or her peers and contribution to the promotion of human resources development.
Added
The range of adjustments based on individual performance evaluations is set commensurate with position and job responsibilities within the range of 50% above or below of the 40% of the LTI base amount. The amount of LTI for each member of the Board of Directors is calculated based on evaluation results.
Added
The balance after deducting monthly compensation as fixed remuneration from Annual Total Remuneration constitutes performance-based remuneration.
Added
Performance-based remuneration consists of STI and LTI as is the case with directors with Japanese citizenship (excluding outside members of the Board of Directors).
Added
The amounts of STI and LTI change in the same manner by reflecting STI and LTI performance evaluating indicators set for directors with Japanese citizenship (excluding outside members of the Board of Directors) and individual performance evaluation results.
Added
In addition, there are cases where we provide income tax compensation for certain members of the Board of Directors in light of the difference in income tax rates with those of his or her home country.
Added
The concept of each item is the same as that for Retired Members of the Board of Directors with Japanese citizenship (excluding outside members of the board of directors).
Added
Toyota Motor Corporation and its subsidiaries have not set aside or accrued any amounts to provide pension, retirement or similar benefits to members of the board of directors and audit & supervisory board members of Toyota Motor Corporation.
Added
Fixed compensation that Woven by Toyota, Inc., Toyota’s consolidated subsidiary, pays to James Kuffner includes fixed compensation that is paid trimonthly and annually.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

11 edited+1 added−3 removed8 unchanged
Biggest changeA similar report must be filed, with certain exceptions, if the percentage of shares held by a holder, solely or jointly, of more than 5% of the total issued shares of a company increases or decreases by 1% or more, or if any change to a material matter set forth in any previously filed reports occurs.
Biggest changeA similar report must be filed, with certain exceptions, if the percentage of shares held by a holder, solely or jointly, of more than 5% of the total issued shares of a company increases or decreases by 1% or more, or if any change to a material matter set forth in any previously filed reports occurs. 119 Table of Contents Based on information known to Toyota or that can be ascertained from public filings, the following table sets forth the beneficial ownership of holders of 5% or more of Toyota’s common stock as of the most recent practicable date.
Toyota sold products and services, among others, to these associates and joint ventures entities in the amount of ¥3,544.2 billion in fiscal 2023. See note 32 of Toyota’s consolidated financial statements for additional information regarding Toyota’s investments in and transactions with associates and joint ventures.
Toyota sold products and services, among others, to these associates and joint ventures in the amount of ¥3,799.2 billion in fiscal 2024. See note 32 of Toyota’s consolidated financial statements for additional information regarding Toyota’s investments in and transactions with associates and joint ventures.
Toyota purchased materials, supplies and services, among others, from these associates and joint ventures in the amount of ¥9,951.5 billion in fiscal 2023. Toyota also sells its products and services, among others, to Toyota’s associates and joint ventures accounted for by the equity method and firms with which certain members of Toyota’s board of directors are affiliated.
Toyota purchased materials, supplies and services, among others, from these associates and joint ventures in the amount of ¥12,501.8 billion in fiscal 2024. Toyota also sells its products and services, among others, to Toyota’s associates and joint ventures accounted for by the equity method and firms with which certain members of Toyota’s board of directors are affiliated.
Name of Beneficial Owner Number of Shares of Common Stock (in thousands) Percentage of Outstanding Voting Shares of Common Stock Toyota Industries Corporation 1,192,331 8.81 According to The Bank of New York Mellon, depositary for Toyota’s ADSs (the “Depositary”), as of March 31, 2022, 292,036,035 shares of Toyota’s common stock were held in the form of ADSs and there were 1,740 ADS holders of record and 515,686 beneficial owners in the United States.
Name of Beneficial Owner Number of Shares of Common Stock (in thousands) Percentage of Outstanding Voting Shares of Common Stock Toyota Industries Corporation 1,192,331 8.87 According to The Bank of New York Mellon, depositary for Toyota’s ADSs (the “Depositary”), as of March 31, 2024, 321,674,315 shares of Toyota’s common stock were held in the form of ADSs and there were 1,727 ADS holders of record and 635,135 beneficial owners in the United States.
Toyota had outstanding trade accounts and other receivables by these associates and joint ventures in the amount of ¥532.6 billion as of March 31, 2023. Toyota had outstanding trade accounts and other payables to these associates and joint ventures in the amount of ¥1,459.9 billion as of March 31, 2023.
Toyota had outstanding trade accounts and other receivables by these associates and joint ventures in the amount of ¥609.8 billion as of March 31, 2024. Toyota had outstanding trade accounts and other payables to these associates and joint ventures in the amount of ¥1,432.8 billion as of March 31, 2024.
As of March 31, 2023, an aggregate amount of ¥179.6 billion in loans was outstanding to its associates and joint ventures accounted for by the equity method. Toyota believes that each of these loans was entered into in the ordinary course of business. 7.C INTERESTS OF EXPERTS AND COUNSEL Not applicable.
As of March 31, 2024, an aggregate amount of ¥101.8 billion in loans was outstanding to its associates and joint ventures accounted for by the equity method. Toyota believes that each of these loans was entered into in the ordinary course of business.
Toyota resolved at its board of directors meeting held on May 12, 2021 to split each share of common stock of Toyota as of September 30, 2021, the record date, into five shares, effective October 1, 2021.
Toyota knows of no arrangements the operation of which may at a later time result in a change of control. Toyota resolved at its board of directors meeting held on May 12, 2021 to split each share of common stock of Toyota as of September 30, 2021, the record date, into five shares, effective October 1, 2021.
According to Toyota’s register of shareholders, as of March 31, 2023, there were 989,548 holders of common stock of record worldwide. As of March 31, 2023, there were 489 record holders of Toyota’s common stock with addresses in the United States, whose shareholdings represented approximately 9.7% of the issued common stock on that date.
According to Toyota’s register of shareholders, as of March 31, 2024, there were 947,533 holders of common stock of record worldwide. As of March 31, 2024, there were 528 record holders of Toyota’s common stock with addresses in the United States, whose shareholdings represented approximately 11.1% of the issued common stock on that date.
Information on the Company — 4.B Business Overview — Selected Initiatives.” Loans Toyota regularly has trade accounts and other receivables by, and accounts payable to, Toyota’s associates and joint ventures accounted for by the equity method and firms with which certain members of Toyota’s board of directors are affiliated.
Loans Toyota regularly has trade accounts and other receivables by, and accounts payable to, Toyota’s associates and joint ventures accounted for by the equity method and firms with which certain members of Toyota’s board 120 Table of Contents of directors are affiliated.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 7.A MAJOR SHAREHOLDERS As of March 31, 2023, 16,314,987,460 shares of Toyota’s common stock (of which 2,749,807,731 shares were treasury stock and 13,565,179,729 shares were outstanding) were issued.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 7.A MAJOR SHAREHOLDERS As of March 31, 2024, 16,314,987,460 shares of Toyota’s common stock (of which 2,840,815,433 shares were treasury stock and 13,474,172,027 shares were outstanding) were issued.
Toyota cancelled all of the First Series Model AA Class Shares on April 3, 2021, and as such, there are no holders of First Series Model AA Class Shares.
Toyota cancelled all of the First Series Model AA Class Shares on April 3, 2021, and as such, there are no holders of First Series Model AA Class Shares. To the extent known to Toyota, Toyota is not owned or controlled, directly or indirectly, by another corporation, any foreign government or any natural or legal person.
Removed
Based on information known to Toyota or that can be ascertained from public filings, the following table sets forth the beneficial ownership of holders of 5% or more of Toyota’s common stock as of the most recent practicable date.
Added
Other For the year ended March 31, 2024, TMC acquired shares of TMC’s consolidated subsidiary, Woven by Toyota, Inc., from Akio Toyoda, Chairman of the Board of Directors of TMC, for a total acquisition price of ¥5,169 million. 7.C INTERESTS OF EXPERTS AND COUNSEL Not applicable.
Removed
To the extent known to Toyota, Toyota is not owned or controlled, directly or indirectly, by another corporation, any foreign government or any natural or legal person. 113 Table of Contents Toyota knows of no arrangements the operation of which may at a later time result in a change of control.
Removed
For a discussion of the Memorandum of Understanding concerning conducting a business combination of Mitsubishi Fuso and Hino Motors, please see “Item 4.

Other TM 10-K year-over-year comparisons