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What changed in TOYOTA MOTOR CORP/'s 20-F — 2022 vs 2023

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Paragraph-level year-over-year comparison of TOYOTA MOTOR CORP/'s 2022 and 2023 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 2023 report.

+737 added−591 removedSource: 20-F (2023-06-30) vs 20-F (2022-06-23)

Top changes in TOYOTA MOTOR CORP/'s 2023 20-F

737 paragraphs added · 591 removed · 419 edited across 6 sections

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeINFORMATION ON THE COMPANY 6 4.A HISTORY AND DEVELOPMENT OF THE COMPANY 6 4.B BUSINESS OVERVIEW 6 4.C ORGANIZATIONAL STRUCTURE 45 4.D PROPERTY, PLANTS AND EQUIPMENT 46
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

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeIf Toyota is unable to effectively maintain and develop its brand image as a result of such reasons as its inability to provide safe, high-quality products or as a result of the failure to promptly implement safety measures such as recalls when necessary, vehicle unit sales and/or sale prices may decrease, and as a result revenues and profits may not increase as expected or may decrease, adversely affecting its financial condition and results of operations. 2 Table of Contents Toyota relies on suppliers for the provision of certain supplies including parts, components and raw materials.
Biggest changeAny 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.
If Toyota launches products that result in safety measures such as recalls (including where parts related to recalls or other measures were procured by Toyota from a third party), Toyota may incur various costs including significant costs for free repairs. Many governments also impose tariffs and other trade barriers, taxes and levies, or enact price or exchange controls.
If Toyota launches products that result in safety measures such as recalls (including where parts related to recalls or other measures were procured by Toyota from a third party), Toyota may incur various costs including significant costs for free repairs. Similarly, many governments also impose tariffs and other trade barriers, taxes and levies, or enact price or exchange controls.
This could, in turn, negatively impact Toyota’s future 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 because Toyota may not be able to pass all those costs on to its customers or require its suppliers to absorb such costs.
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.
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.
In addition, Toyota may, in order to reassure its customers of the safety of Toyota’s vehicles, decide to voluntarily implement recalls or other safety measures even if the vehicle complies with the safety standards of relevant laws and governmental regulations.
In addition, Toyota may, in order to reassure its customers of the safety of Toyota’s vehicles, decide to voluntarily implement sales suspensions, recalls or other safety measures even if the vehicle complies with the safety standards of relevant laws and governmental regulations.
Should the world economy suddenly deteriorate, a number of financial institutions and investors will face difficulties in providing capital to the financial markets at levels corresponding to their own financial capacity, and, as a result, there is a risk that companies may not be able to raise capital under terms that they would expect to receive with their creditworthiness.
Should the world economy suddenly deteriorate, a number of financial institutions and investors will face difficulties in providing capital to the financial markets at levels corresponding to their own financial capacity, 5 Table of Contents and, as a result, there is a risk that companies may not be able to raise capital under terms that they would expect to receive with their creditworthiness.
Despite security measures, Toyota’s digital and information technology networks and systems may be vulnerable to damage, disruptions, shutdowns due to unauthorized access or attacks by hackers, computer viruses, breaches due to unauthorized use, errors or malfeasance by employees and others who have or gain access to the networks and systems Toyota depends on, service failures or bankruptcy of third parties such as software development or cloud computing vendors, power shortages and outages, and utility failures or other catastrophic events like natural disasters.
Despite security measures, Toyota’s digital and information technology networks and systems may be vulnerable to damage, disruptions, shutdowns due to unauthorized access or attacks by hackers, computer 3 Table of Contents viruses, breaches due to unauthorized use, errors or malfeasance by employees and others who have or gain access to the networks and systems Toyota depends on or otherwise uses, service failures or bankruptcy of third parties such as software development or cloud computing vendors, power shortages and outages, and utility failures or other catastrophic events like natural disasters.
Moreover, similar attacks on Toyota’s suppliers and business partners have had, and may in the future have, a similar negative impact on Toyota. 3 Table of Contents Toyota is exposed to risks associated with climate change, including the physical risks of climate change and risks from the transition to a lower-carbon economy.
Moreover, similar attacks on Toyota’s suppliers and business partners have had, and may in the future have, a similar negative impact on Toyota. Toyota is exposed to risks associated with climate change, including the physical risks of climate change and risks from the transition to a lower-carbon economy.
Such attacks could materially disrupt critical operations, disclose sensitive data, interfere with information services and driving assistance functions in Toyota’s vehicles, and/or give rise to legal claims or proceedings, liability or regulatory penalties under applicable laws, which could have an adverse effect on Toyota’s brand image and its financial condition and results of operations.
Such attacks have, in some cases, and could again disrupt critical operations, disclose sensitive data, interfere with information services and driving assistance functions in Toyota’s vehicles, and/or give rise to legal claims or proceedings, liability or regulatory penalties under applicable laws, which could have an adverse effect on Toyota’s brand image and its financial condition and results of operations.
Toyota is subject to various risks associated with conducting business worldwide. These risks include natural calamities; epidemics; political and economic instability; fuel shortages; interruption in social 5 Table of Contents infrastructure including energy supply, transportation systems, gas, water, or communication systems resulting from natural hazards or technological hazards; wars; terrorism; labor strikes and work stoppages.
Toyota is subject to various risks associated with conducting business worldwide. These risks include natural calamities; epidemics; political and economic instability; fuel shortages; interruption in social infrastructure including energy supply, transportation systems, gas, water, or communication systems resulting from natural hazards or technological hazards; wars; terrorism; labor strikes and work stoppages.
Increases in raw materials prices that Toyota and Toyota’s suppliers use in manufacturing their products or parts and components such as steel, precious metals, non-ferrous alloys including aluminum, and plastic parts, 4 Table of Contents may lead to higher production costs for parts and components.
Increases in raw materials prices that Toyota and Toyota’s suppliers use in manufacturing their products or parts and components such as steel, precious metals, non-ferrous alloys including aluminum, and plastic parts, may lead to higher production costs for parts and components.
In addition, Toyota’s vehicles may rely on various digital and information technologies, including information service and driving assistance functions.
In addition, Toyota vehicles may rely on various digital and information technologies, including information service and driving assistance functions.
If Toyota is unable to adequately respond to the changes and competition in automobile financing, Toyota’s financial services operations may adversely affect its financial condition and results of operations. Toyota’s operations and vehicles rely on various digital and information technologies, as well as information security.
If Toyota is unable to adequately respond to the changes and competition in automobile financing, Toyota’s financial services operations may adversely affect its financial condition and results of operations. Toyota’s operations and vehicles rely on various digital and information technologies, as well as information security, which are subject to frequent attack.
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 disruptions and delays in the operations of Toyota’s business.
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.
For a further discussion of governmental regulations, see “Information on the Company — Business Overview — Governmental Regulation, Environmental and Safety Standards” and for legal proceedings, please see “Information on the Company — Business Overview — Legal Proceedings.” Toyota may be adversely affected by natural calamities, epidemics, political and economic instability, fuel shortages or interruptions in social infrastructure, wars, terrorism and labor strikes.
Business Overview — Governmental Regulation, Environmental and Safety Standards” and for legal proceedings, please see “Item 4. Information on the Company — 4B. Business Overview — Legal Proceedings.” Toyota may be adversely affected by natural calamities, epidemics, political and economic instability, fuel shortages or interruptions in social infrastructure, wars, terrorism and labor strikes .
Toyota’s inability to maintain well-developed sales techniques and distribution networks may result in decreased sales and market share and may adversely affect its financial condition and results of operations. Toyota’s success is significantly impacted by its ability to maintain and develop its brand image. In the highly competitive automotive industry, it is critical to maintain and develop a brand image.
Toyota’s inability to maintain well-developed sales techniques and distribution networks may result in decreased sales and market share and may adversely affect its financial condition and results of operations. Toyota’s success is significantly impacted by its ability to maintain and develop its brand image and reputation.
As an automotive manufacturer, Toyota may become subject to legal proceedings in respect of various issues, including issues relating to the topics discussed in “—The automotive industry is subject to various governmental regulations and actions,” as well as product liability and infringement of intellectual property.
Toyota may become subject to legal proceedings in respect of various issues, including issues relating to the topics discussed in “— The automotive industry is subject to various governmental regulations and actions,” as well as product liability and infringement of intellectual property. Toyota may also be subject to legal proceedings brought by its shareholders and governmental proceedings and investigations.
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.
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 .
Toyota is sensitive to fluctuations in foreign currency exchange rates and is principally exposed to fluctuations in the value of the Japanese yen, the U.S. dollar and the euro and, to a lesser extent, the Australian dollar, the Russian ruble, the Canadian dollar and the British pound.
Financial Market and Economic Risks Toyota’s operations are subject to currency and interest rate fluctuations . Toyota is sensitive to fluctuations in foreign currency exchange rates and is principally exposed to fluctuations in the value of the Japanese yen, the U.S. dollar and the euro and, to a lesser extent, the Australian dollar, the Canadian dollar and the British pound.
Nonetheless, a negative impact resulting from fluctuations in foreign currency exchange rates and changes in interest rates may adversely affect Toyota’s financial condition and results of operations.
Nonetheless, a negative impact resulting from fluctuations in foreign currency exchange rates and changes in interest rates may adversely affect Toyota’s financial condition and results of operations. For a further discussion of currency and interest rate fluctuations and the use of derivative financial instruments, see “Item 5.
Toyota may also be subject to legal proceedings brought by its shareholders and governmental proceedings and investigations. Toyota is in fact currently subject to a number of pending legal proceedings and government investigations. A negative outcome in one or more of these pending legal proceedings could adversely affect Toyota’s reputation, brand image, financial condition and results of operations.
Toyota is in fact currently subject to a number of pending legal proceedings and government investigations. A negative outcome in one or more of these pending legal proceedings could adversely affect Toyota’s reputation, brand image, financial condition and results of operations. For a further discussion of governmental regulations, see “Item 4. Information on the Company — 4B.
Changes in demand for automobiles are continuing, and it is unclear 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.
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.
Further, there is no assurance that Toyota will be able to implement capital expenditures at the level and times planned by management.
Further, there is no assurance that Toyota will be able to offer new products or implement capital expenditures at the level and times planned by management, including as described in targets or goals that we have disclosed publicly.
Toyota’s inability to develop and offer products that meet customers’ preferences and demand in a timely manner could result in a lower market share and reduced sales volumes and margins, and may adversely affect Toyota’s financial condition and results of operations. Financial Market and Economic Risks Toyota’s operations are subject to currency and interest rate fluctuations.
Toyota’s inability to develop and offer products that meet customers’ preferences and demand in a timely manner could result in a lower market share and reduced sales revenues and margins, and may adversely affect Toyota’s financial condition and results of operations. For a further discussion of risks associated with climate change, see “Item 4. Information on the Company — 4B.
Each of the markets in which Toyota competes has been subject to considerable volatility in demand. Demand for vehicles depends to a large extent on economic, social and political conditions in a given market and the introduction of new vehicles and technologies.
Demand for vehicles depends to a large extent on economic, social and political conditions in a given market and the introduction of new vehicles and technologies. As Toyota’s revenues are derived from sales in markets worldwide, economic conditions in such markets are particularly important to Toyota.
Toyota’s ability to adequately respond to the recent rapid changes in the automotive market and to maintain its competitiveness will be fundamental to its future success in existing and new markets and to maintain its market share. There can be no assurances that Toyota will be able to compete successfully in the future. The worldwide automotive industry is highly volatile.
Toyota’s ability to adequately respond to the recent rapid changes in the automotive market, particularly shifts in consumer preferences to electrified vehicles, and to maintain its competitiveness will be fundamental to its future success in existing and new markets and to maintain its market share.
Factors affecting competition include product quality and features, safety, reliability, fuel economy, the amount of time required for innovation and development, pricing, customer service and financing terms. Increased competition may lead to lower vehicle unit sales, which may result in a further downward price pressure and adversely affect Toyota’s financial condition and results of operations.
Increased competition may lead to lower vehicle unit sales, which may result in a further downward price pressure and adversely affect Toyota’s financial condition and results of operations.
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.
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.
Competition in the automotive industry has further intensified amidst difficult overall market conditions. In addition, competition is likely to further intensify in light of further continuing globalization in the worldwide automotive industry, possibly resulting in industry reorganizations.
In recent years, competition in the automotive industry has further intensified amidst difficult overall market conditions. In addition, competition is likely to further intensify as technological advances in areas such as Connected, Autonomous / Automated, Shared, and Electric (“CASE”) technologies progress in the worldwide automotive industry, possibly resulting in industry reorganizations.
For a further discussion of currency and interest rate fluctuations and the use of derivative financial instruments, see “Operating and Financial Review and Prospects — Operating Results — Overview — Currency Fluctuations,” “Quantitative and Qualitative Disclosures About Market Risk,” and notes 19 and 20 to Toyota’s consolidated financial statements.
Operating and Financial Review and Prospects — Operating Results — 5.A Operating Results — Overview — Currency Fluctuations,” “Item 11. Quantitative and Qualitative Disclosures About Market Risk,” and notes 19 and 20 to Toyota’s consolidated financial statements. High prices of raw materials and strong pressure on Toyota’s suppliers has and could continue to negatively impact Toyota’s profitability .
A downturn in the financial markets could adversely affect Toyota’s ability to raise capital.
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 .
In order to maintain and develop a brand image, it is necessary to further increase customers’ confidence by providing safe, high-quality products that meet customer preferences and demand.
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.
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As Toyota’s revenues are derived from sales in markets worldwide, economic conditions in such markets are particularly important to Toyota.
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Factors affecting competition include product quality and features, safety, reliability, fuel economy, the amount of time required for innovation and development, pricing, customer service, financing terms and tax credits or other government policies in various countries.
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Reviewing the general economic environment for fiscal 2022, the economy appeared to be headed toward a recovery due to fiscal and monetary policies adopted by various countries that have supported the economy, coupled with the gradual relaxation of strict COVID-19 restrictions.
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There can be no assurances that Toyota will be able to compete successfully in the future. The worldwide automotive industry is highly volatile . Each of the markets in which Toyota competes has been subject to considerable volatility in demand.
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While the automotive market has been subjected to global production constraints due to components shortages caused by a tightening of global supply of, and increasing demand for, semiconductors and the impact of COVID-19, continued steady demand in countries such as the U.S., China, and Japan resulted in a recovery from last year.
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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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Geopolitical tensions that have 1 Table of Contents increased since February 2022 have had a ripple effect globally in such forms as soaring materials prices, including for raw materials and parts and components for Toyota’s vehicles, which has made it more difficult to foresee the future.
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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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High prices of raw materials and strong pressure on Toyota’s suppliers could negatively impact Toyota’s profitability.
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In the highly competitive automotive industry, it is critical to maintain and develop a brand image and reputation.
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For example, Toyota believes that increases in the prices of raw materials, as well as related logistics and other costs, had a significant negative impact on its results for fiscal 2022, and currently expects that they will have a greater negative impact on its results for fiscal 2023.
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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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Toyota has been, and is expected to continue to be, adversely affected by the spread of COVID-19. The global spread of COVID-19 and the responses to it by governments and other stakeholders have adversely affected Toyota in a number of ways.
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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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For example, for reasons such as government directives as well as anticipated reduced demand for its vehicles, Toyota has temporarily suspended, or intends to temporarily suspend, production of automobiles and components at selected plants in Japan and overseas.
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(“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.
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COVID-19 has also affected, and is expected to continue to affect, the businesses of Toyota dealers and distributors, as well as certain of Toyota’s third-party suppliers and business partners.
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In addition, actual or perceived failures on the part of Toyota or its suppliers to contribute to sustainability or to meet certain sustainability-related goals or objectives, including those relating to climate change or the protection of human rights in Toyota’s supply chain, may also harm Toyota’s reputation.
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In addition, the global spread of COVID-19 and related matters have adversely affected businesses in a wide variety of industries, as well as consumers, all of which negatively impacted demand for Toyota’s vehicles and related financial services.
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Business Overview — Climate Change-related Disclosures.” Furthermore, Toyota has published disclosures on climate-change related matters relating to its business and its partners. Such disclosures include forward-looking statements based on Toyota’s expectations and assumptions, involving substantial discretion and forecasts about costs and future circumstances, which may prove to be incorrect.
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The duration of the COVID-19 outbreak and the resulting future effects are uncertain, and the foregoing impacts and other effects not referenced above, as well as the ultimate impact of the COVID-19 outbreak, are difficult to predict.
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In addition, Toyota’s initiatives relating to climate change may not have the intended results, and estimates concerning the timing and cost of implementing, and ability to meet, stated goals are subject to risks and uncertainties.
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The impact of the COVID-19 outbreak and the resulting future effects may thus adversely affect Toyota’s financial condition and results of operations in later periods as well.
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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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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.
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Toyota’s ability to achieve its climate-related goals, which are to be pursued over the long-term and are inherently aspirational, is subject to numerous risks and uncertainties, many of which are outside of Toyota’s control, such as changes in environmental and energy regulation and policy, the pace of technological change and innovation, and the actions of Toyota’s customers and competitors.
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Any failure, or perceived failure, by Toyota to achieve its climate-change related goals, including those set forth in this annual report, could adversely impact its reputation, financial condition and results of operations. Toyota’s operations are dependent on securing, retaining and developing talented, diverse employees.
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Given in particular the rapid changes in its business environment and its efforts to transform into a mobility company, Toyota’s success depends on its ability to continue to recruit, retain and develop talented and diverse employees.
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However, competition for such employees is intense and if Toyota cannot recruit and retain diverse employees with a high level of expertise and extensive experience as planned, or it is unable to provide its employees with the opportunities, training and resources they need to develop themselves further, it may reduce Toyota’s competitiveness, and its financial condition, results of operations and cashflow could be adversely affected.
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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.
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Disruptions, delays and other adverse changes in the operations of Toyota’s business have ensued from such risks materializing in the past.

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. 121.9 Japan Internal funds Investment primarily in technology and products by Toyota Motor Kyushu, Inc. 107.5 Japan Internal funds Investment primarily in technology and products by Toyota Auto Body Co., Ltd. 92.3 Japan Internal funds Investment primarily in technology and products by Primearth EV Energy Co., Ltd. 73.6 Japan Internal funds Investment primarily in technology and products by Prime Planet Energy & Solutions, Inc. 72.1 Japan Internal funds Investment primarily in technology and products by Hino Motors, Ltd. 56.8 Japan Internal funds Outside of Japan Investment primarily to promote localization by Toyota Motor Manufacturing, Indiana, Inc. 199.2 United States Internal funds Investment primarily to promote localization by Toyota Motor Manufacturing Texas, Inc. 167.0 United States Internal funds Investment primarily to promote localization by Toyota Motor Manufacturing Canada, Inc. 91.9 Canada Internal funds Investment primarily to promote localization by Toyota Motor Europe NV/SA 85.6 Belgium Internal funds Investment primarily to promote localization by Toyota Motor Manufacturing, Northern Kentucky, Inc. 72.0 United States Internal funds Investment primarily to promote localization by Toyota Motor Thailand Co., Ltd. 71.2 Thailand Internal funds Investment primarily to promote localization by Toyota Motor Manufacturing, Kentucky, Inc. 69.6 United States Internal funds Investment primarily in leased automobiles by Toyota Motor Credit Corporation 5,596.6 United States Internal funds, financing from issuance of bonds, etc. 42 Table of Contents Set forth below is information with respect to Toyota’s material plans to construct, expand or improve its facilities between April 2022 and March 2023, 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 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.
Using connected technologies to link logistics from the major arteries to the fine capillaries, from producers to consumers, using truck logistics and local mini-vehicle-based distribution, JIT logistics have the potential to lower running costs for logistics vendors and sustainably improve logistics.
Using connected technologies to link logistics from the major arteries to the fine capillaries, and from producers to consumers, using truck logistics and local mini-vehicle-based distribution, JIT logistics have the potential to lower running costs for logistics vendors and sustainably improve logistics.
Toyota has been working on cost reduction measures, referred to as RR-CI (ryohin-renka cost innovation) and VA (value analysis) activities, which aims to eliminate waste in all processes from design to production while ensuring the reliability and safety of each part. Through these activities, Toyota focuses on “developing a real cost-competitive structure” by working together with suppliers.
Toyota has been working on cost reduction measures, referred to as RR-CI ( ryohin-renka , or cost innovation) and VA (value analysis) activities, which aims to eliminate waste in all processes from design to production while ensuring the reliability and safety of each part. Through these activities, Toyota focuses on “developing a real cost-competitive structure” by working together with suppliers.
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 9 Table of Contents 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 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.
The chart below shows the number of Toyota distributors as of March 31, 2022 by country and region: Country/Region Number of Countries Number of Distributors North America 3 5 Europe 53 29 China 1 4 Asia (excluding China) 19 13 Oceania 17 15 Middle East 16 14 Africa. 56 48 Central and South America 39 40 BEV Strategies On December 14, 2021, Toyota held a briefing on its BEV strategy where it announced that it would be boosting its plans for BEV sales in 2030 from 2 million to 3.5 million units, and that Lexus was aiming for BEVs to account for 100 percent of its sales in Europe, North America, and China by the same year, followed by BEVs accounting for 100 percent of its sales globally starting in 2035.
The chart below shows the number of Toyota distributors as of March 31, 2023 by country and region: Country/Region Number of Countries Number of Distributors North America 3 5 Europe 53 29 China 1 4 Asia (excluding China) 19 13 Oceania 17 15 Middle East 16 14 Africa 56 48 Central and South America 39 40 BEV Strategies On December 14, 2021, Toyota held a briefing on its BEV strategy where it announced that it would be boosting its plans for BEV sales in 2030 from 2 million to 3.5 million units, and that Lexus was aiming for BEVs to account for 100 percent of its sales in Europe, North America, and China by the same year, followed by BEVs accounting for 100 percent of its sales globally starting in 2035.
The facilities are located principally in Japan, the United States, Canada, the United Kingdom, France, Turkey, Czech Republic, Russia, Poland, Thailand, China, Taiwan, India, Indonesia, South Africa, Argentina and Brazil. In addition to its manufacturing facilities, Toyota’s properties include sales offices and other sales facilities in major cities, repair service facilities and research and development facilities.
The facilities are located principally in Japan, the United States, Canada, the United Kingdom, France, Turkey, Czech Republic, Poland, Thailand, China, Taiwan, India, Indonesia, South Africa, Argentina and Brazil. In addition to its manufacturing facilities, Toyota’s properties include sales offices and other sales facilities in major cities, repair service facilities and research and development facilities.
Furthermore, in order to achieve the national target for average fuel efficiency for 2020, the following more stringent fuel consumption regulations have been enacted and enforced. First, GB19578-2014, which has been enacted to strengthen regulations for each model, is being applied to new models after January 2016.
Furthermore, in order to achieve the national target for average fuel efficiency for 2020, the following more stringent fuel consumption regulations have been enforced. First, GB19578-2014, which has been enacted to strengthen regulations for each model, is being applied to new models after January 2016.
For these initiatives, we are building a software development structure on a 3,000-person scale for Toyota, Woven Planet, and Toyota Connected and on a 18,000-person scale when including associates accounted for by the equity method. We are also strengthening the teams responsible for the internal production and development of software.
For these initiatives, we are building a software development structure on a 3,000-person scale for Woven by Toyota, and Toyota Connected and on a 18,000-person scale when including associates accounted for by the equity method. We are also strengthening the teams responsible for the internal production and development of software.
As for vehicle development, the Toyota Technical Center spearheads the design, planning, and evaluation of vehicles and parts as to their ability to meet customer needs. Europe Toyota’s principal European markets are Germany, France, the United Kingdom, Italy, Spain and Russia.
As for vehicle development, the Toyota Technical Center spearheads the design, planning, and evaluation of vehicles and parts as to their ability to meet customer needs. Europe Toyota’s principal European markets are Germany, France, the United Kingdom, Italy and Spain.
As for the intellectual property activities framework, having established intellectual property functions at the R&D centers in the United States, Europe and China, Toyota supports technology development globally by securing organic, systematic coordination between R&D activities and intellectual property activities.
As for the intellectual property activities framework, having established intellectual property functions at the R&D centers in Japan, the United States, Europe and China, Toyota supports technology development globally by securing organic, systematic coordination between R&D activities and intellectual property activities.
Under such circumstances, as a result of Toyota’s continued collaboration with dealers in various countries and regions and efforts to expand products and services that meet customer needs, Toyota’s share of financing provided for new car sales of Toyota and Lexus vehicles in regions where Toyota Financial Services Corporation operates remained at a high level of approximately 30%, and the balance of earning assets continued to steadily increase, with the exception of some countries.
Under such circumstances, as a result of Toyota’s continued collaboration with dealers in various countries and regions and efforts to expand products and services that meet customer needs, Toyota’s share of financing provided for new car sales of Toyota and Lexus vehicles in regions where Toyota Financial Services Corporation operates remained at a high level of approximately 30%, and the balance of earning assets continued to steadily increase.
We believe that the reduction in lead times and high-mix, low-volume production methods that we have cultivated through the TPS, along with the steady efforts of Japanese manufacturing, will enable us to be competitive going forward. 19 Table of Contents In terms of vehicle production, we believe that all electrified vehicles can be divided into two categories, depending on the energy that they use.
We believe that the reduction in lead times and high-mix, low-volume production methods that we have cultivated through the TPS, along with the steady efforts of Japanese manufacturing, will enable us to be competitive going forward. 22 Table of Contents In terms of vehicle production, we believe that all electrified vehicles can be divided into two categories, depending on the energy that they use.
In the future, we expect that these technologies will be applied to the Sienna Autono-MaaS minivan being developed in the United States for use as a robotaxi, and that the MSPF will be used not only for automated vehicles, but also for regular commercial vehicles and logistics. 23 Table of Contents In this way, software has the power to promptly turn ideas into products.
In the future, we expect that these technologies will be applied to the Sienna Autono-MaaS minivan being developed in the United States for use as a robotaxi, and that the MSPF will be used not only for automated vehicles, but also for regular commercial vehicles and logistics. 28 Table of Contents In this way, software has the power to promptly turn ideas into products.
Toyota has coordinated with relevant parties to establish a vehicle take-back and recycle system throughout Japan. As a result, in fiscal 2021, 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 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.
This revised General Safety Regulation will make certain vehicle safety equipment mandatory in stages starting 2022, including: advanced emergency braking, emergency lane keeping systems, driver drowsiness and attention warning, intelligent speed assistance, reversing detection systems, tire pressure monitoring systems, and data recorders in case of an accident (“event data recorders”).
This revised General Safety Regulation will make certain vehicle safety equipment mandatory in stages starting 2022, including: automated emergency braking, emergency lane keeping systems, driver drowsiness and attention warning, intelligent speed assistance, reversing detection systems, tire pressure monitoring systems, and data recorders in case of an accident (“event data recorders”).
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. 16 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. 19 Table of Contents Asia Toyota’s principal Asian markets are Thailand, India, Indonesia and Taiwan.
The aim of Arene, the vehicle development platform that Toyota and Woven Planet are focused on, is to continue fundamentally changing the development of software for vehicles. The most notable characteristics of Arene are that it absorbs the differences in vehicle hardware specifications (abstraction) and employs hardware abstraction layers that enable hardware to be controlled with universal methods.
The aim of Arene, the vehicle development platform that Toyota and Woven by Toyota are focused on, is to continue fundamentally changing the development of software for vehicles. The most notable characteristics of Arene are that it absorbs the differences in vehicle hardware specifications (abstraction) and employs hardware abstraction layers that enable hardware to be controlled with universal methods.
Basic research Phase to discover development theme Research on basic vehicle-related technology Forward-looking and leading-edge technology development Phase requiring technological breakthroughs such as components and systems Development of leading-edge components and systems that are more advanced than those of competitors Product development Phase mainly for development of new models Development of all-new models and existing-model upgrades 39 Table of Contents With a focus on environmentally friendly, carbon-neutral and safe-vehicle technology, Toyota is promoting research and development into the early commercialization of next generation environmentally friendly, energy-efficient and safe-vehicle technology.
Basic research Phase to discover development theme Research on basic vehicle-related technology Forward-looking and leading-edge technology development Phase requiring technological breakthroughs such as components and systems Development of leading-edge components and systems that are more advanced than those of competitors Product development Phase mainly for development of new models Development of all-new models and existing-model upgrades With a focus on environmentally friendly, carbon-neutral and safe-vehicle technology, Toyota is promoting research and development into the early commercialization of next generation environmentally friendly, energy-efficient and safe-vehicle technology.
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 22 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 23 Global Technical Regulations have been established to date.
The following table sets forth information, as of March 31, 2022, 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, 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.
However, global competition is expected to be severe, as the pace of technological advancement and development of new products, particularly related to electrification, quickens further, including in response to a heightened global awareness of the environment with a view to carbon neutrality and the strengthening of various standards in line with such awareness.
However, global competition is expected to be severe, as the pace of technological advancement and development of new products, particularly related to electrification, quickens further, including in response to a heightened global awareness of the environment with a view to carbon neutrality and the strengthening of various regulations in line with such awareness.
In terms of production, Toyota manufactures models such as the Hilux, Hiace, Corolla, Camry and Vios through 16 entities. Toyota’s plants in Thailand, not only to meet domestic demand but also to serve as a production base for locations inside and outside of the ASEAN region.
In terms of production, Toyota manufactures models such as the Hilux, Hiace, Corolla, Camry and Vios through 15 entities. Toyota’s plants in Thailand, not only to meet domestic demand but also to serve as a production base for locations inside and outside of the ASEAN region.
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 50.18 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. Japan 50.11 50.19 Daihatsu Motor Co., Ltd.
With elevated levels of driving performance, design, and advanced technology, the all-new NX, which is the first model to introduce the next generation of Lexus, accelerates the proliferation of electrified models by being Lexus’ first-ever PHEV also offered as a HEV.
With elevated levels of driving performance, design, and advanced technology, the all-new NX, which is the first model to introduce the next generation of Lexus, is accelerating the proliferation of electrified models by being Lexus’ first-ever PHEV also offered as a HEV.
Pursuant to the mandate, CARB requires that a specified percentage of a manufacturer’s passenger cars and light-duty trucks sold in California be 32 Table of Contents “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 zero-emission vehicles requirements,” to be granted partial qualification as BEVs or FCEVs.
We believe utilizing connected technologies to control HEVs and PHEVs more intelligently will make it possible to further 24 Table of Contents promote energy saving in cars. The new NX features a mechanism that switches to HEV control.
We believe utilizing connected technologies to control HEVs and PHEVs more intelligently will make it possible to further 29 Table of Contents promote energy saving in cars. The new NX features a mechanism that switches to HEV control.
In these Level 3 Fuel Consumption Regulations for passenger cars, the regulation framework was substantially revised, such as the introduction of new regulations requiring automobile manufacturers to meet standards of corporate average fuel consumption across models in addition to existing regulations requiring each model to meet consumption standards.
In these Level 3 Fuel Consumption Regulations for passenger vehicles, the regulation framework was substantially revised, such as the introduction of new regulations requiring automobile manufacturers to meet standards of corporate average fuel consumption across models in addition to existing regulations requiring each model to meet consumption standards.
To date, Toyota has sold 10 million Lexus and Toyota vehicles that are connected cars, mainly in Japan, the United States, Europe, and China. Toyota’s vision of the connected car is not simply one of connecting the car to the internet.
To date, Toyota has sold 20 million Lexus and Toyota vehicles that are connected cars, mainly in Japan, the United States, Europe, and China. Toyota’s vision of the connected car is not simply one of connecting the car to the internet.
The GR Yaris “Morizo Selection” is a new initiative based on GR Yaris that combines the ROOKIE Racing privateer team run by Morizo (the racing driver name for Akio Toyoda, our President) and Toyota’s KINTO car subscription.
The GR Yaris “Morizo Selection” is a new initiative based on GR Yaris that combines the ROOKIE Racing privateer team run by Morizo (the racing driver name for Akio Toyoda, our Chairman) and Toyota’s KINTO car subscription.
Toyota has expanded its network of financial services, in accordance with its strategy of developing auto-related financing businesses in significant markets. Accordingly, Toyota currently operates financial services companies in 42 countries and regions, which support its automotive operations globally.
Toyota has expanded its network of financial services, in accordance with its strategy of developing auto-related financing businesses in significant markets. Accordingly, Toyota currently operates financial services companies in 43 countries and regions, which support its automotive operations globally.
We believe that our accumulated experience is an asset that gives us a competitive edge. Going forward, we intend to make a total of 2 trillion yen in new capital expenditures, research and development expenses and other investments relating to batteries, with the aim of realizing even more-advanced, high-quality, and affordable batteries.
We believe that our accumulated experience is an asset that gives us a competitive edge. Going forward, we intend to make a total of 5 trillion yen in new capital expenditures, research and development expenses and other investments relating to BEVs and batteries, with the aim of realizing even more-advanced, high-quality, and affordable batteries.
Description of Activity Total Cost (Yen in billions) Location Primary Method of Financing Japan Investment primarily in technology and products by Toyota Motor Corporation 1,081.6 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 1,105.6 Japan Internal funds, financing from issuance of bonds, etc.
“Integrated Safety Management Concept” is Toyota’s basic philosophy behind its technologies for eliminating traffic casualties and is moving forward with development. 25 Table of Contents Toyota provides optimized driver support at every stage of driving, from parking to normal operation, the moment before a collision, during a collision, and post-collision emergency response.
“Integrated Safety Management Concept” is Toyota’s basic philosophy behind its technologies for eliminating traffic casualties and is moving forward with development. Toyota provides optimized driver support at every stage of driving, from parking to normal operation, the moment before a collision, during a collision, and post-collision emergency response.
Indiana, U.S.A. 4,359 6,521 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 6,490 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.
International Harmonization of Vehicle Regulations The World Forum for Harmonization of Vehicle Regulations (“WP.29”) of the United Nations Economic Commission for Europe (“UNECE”) has developed certain international rules and regulations such as the UN 31 Table of Contents Regulations (“UNR”) under the 1958 Agreement and the Global Technical Regulations (“GTR”) under the 1998 Agreement and has been working to promote international harmonization of the technical prescriptions for the construction and approval of wheeled vehicles.
International Harmonization of Vehicle Regulations The World Forum for Harmonization of Vehicle Regulations (“WP.29”) of the United Nations Economic Commission for Europe (“UNECE”) has developed certain international rules and regulations such as the UN Regulations (“UNR”) under the 1958 Agreement and the Global Technical Regulations (“GTR”) under the 1998 Agreement and has been working to promote international harmonization of the technical prescriptions for the construction and approval of wheeled vehicles.
The car was evaluated by Master Driver Morizo (the racing driver name for Akio Toyoda) and non-Toyota professional drivers from the early stages of development, and even after it was unveiled at the Tokyo Auto Salon 2020, it underwent repeated cycles of evaluation and improvement at the circuit before it was finally launched.
The car was evaluated by Master Driver Morizo (the racing driver name for Akio Toyoda) and non-Toyota professional drivers from the early stages of development, and even after it was unveiled at the Tokyo Auto Salon 2020, it underwent repeated 16 Table of Contents cycles of evaluation and improvement at the circuit before it was finally launched.
For example, the environments in which vehicles are operated differ according to each vehicle’s mode of use — for example, if it 20 Table of Contents is being used as a taxi or for commuting — as well as geographic location, and these factors will affect such conditions as charging frequency and battery temperature.
For example, the environments in which vehicles are operated differ according to each vehicle’s mode of use — for example, if it is being used as a taxi or for commuting — as well as geographic location, and these factors will affect such conditions as charging frequency and battery temperature.
Other States’ Standards Seventeen states (Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Nevada, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and Washington) have adopted regulations substantially similar to California’s low-emission vehicle requirement, and 15 of these have adopted California’s zero-emission vehicle requirement.
Other States’ Standards Seventeen states (Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Nevada, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and 38 Table of Contents Washington) have adopted regulations substantially similar to California’s low-emission vehicle requirement, and 15 of these have adopted California’s zero-emission vehicle requirement.
This concept has remained unchanged since batteries were installed in the first-generation Prius, and it applied to all the batteries in all of our electrified vehicles. Although Toyota is committed to balancing the five factors, too much emphasis on one could be detrimental to the others.
This concept has remained unchanged since batteries were installed in the first-generation Prius, and it applied to all the batteries in all of our electrified vehicles. Although Toyota is committed to balancing the five factors, too much emphasis on one could be detrimental to 24 Table of Contents the others.
The judgment included a finding that there was a perceived reduction in vehicle value of certain vehicle models. Toyota disagrees with the judgment and has filed an appeal. Other claims of economic loss in this class action lawsuit continue to be litigated at the court of first instance.
The judgments included a finding that there was a perceived reduction in vehicle value of certain vehicle models. Toyota disagrees with the appeal court judgment and has filed a final appeal. Other claims of economic loss in this class action lawsuit continue to be litigated at the court of first instance.
A manufacturer is subject to substantial civil penalties if, in any model year, its vehicles 34 Table of Contents do not meet the CAFE standards. Manufacturers that exceed the CAFE standards earn credits determined by the difference between the average fuel economy performance of their vehicles and the CAFE standards.
A manufacturer is subject to substantial civil penalties if, in any model year, its vehicles do not meet the CAFE standards. Manufacturers that exceed the CAFE standards earn credits determined by the difference between the average fuel economy performance of their vehicles and the CAFE standards.
In relation to this, various UN Regulations were developed, and for the equipment for which UN Regulations have not been developed, the EU established its own technical standards. Furthermore, a major overhaul of the EU-type approval framework for motor vehicles was issued in May 2018.
In relation to this, various UN Regulations were developed, and for the equipment for which UN Regulations have not been developed, the EU established its own technical standards. Furthermore, a proposal for a major overhaul of the EU-type approval framework for motor vehicles was issued in June 2018.
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.
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.
Furthermore, we plan to expand the options for carbon neutral vehicles by offering a full lineup of BEVs. Specifically, we plan to roll out 30 BEV models by 2030, offering a full lineup of BEVs globally in both the passenger and commercial vehicle segments.
Furthermore, we plan to expand the options for carbon neutral vehicles by offering a full lineup of BEVs. Specifically, we plan to roll out 30 Toyota and Lexus brand BEV models by 2030, offering a full lineup of BEVs globally in both the passenger and commercial vehicle segments.
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.
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.
Moreover, Thailand has also decided to introduce regulations equivalent to Euro 5 and Euro 6. Vehicle Fuel Economy Japanese Standards The Act on Rationalizing Energy Use requires automobile manufacturers to improve their vehicles to meet specified fuel economy standards.
Moreover, Thailand has also decided to introduce regulations equivalent to Euro 5 and Euro 6. Vehicle Fuel Economy Japanese Standards The Act on Rationalizing Energy Use and Shifting to Non-fossil Energy requires automobile manufacturers to improve their vehicles to meet specified fuel economy standards.
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 8,230 thousand vehicles in fiscal 2022 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 8,822 thousand vehicles in fiscal 2023 on a consolidated basis.
Because Toyota had more than 50 overseas operations in 27 countries and regions as of March 31, 2022, 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, 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.
Japan 100.00 100.00 Cataler Corporation Japan 56.51 57.31 Toyota Motor Engineering & Manufacturing North America, Inc. United States 100.00 100.00 Toyota Motor Manufacturing, Kentucky, Inc. United States 100.00 100.00 Toyota Motor North America, Inc. United States 100.00 100.00 Toyota Motor Credit Corporation United States 100.00 100.00 Toyota Motor Manufacturing, Indiana, Inc. United States 100.00 100.00 Toyota Motor Manufacturing, Texas, Inc.
Japan 100.00 100.00 Cataler Corporation Japan 56.51 57.38 Toyota Motor Engineering & Manufacturing North America, Inc. United States 100.00 100.00 Toyota Motor Manufacturing, Kentucky, Inc. United States 100.00 100.00 Toyota Motor North America, Inc. United States 100.00 100.00 Toyota Motor Credit Corporation United States 100.00 100.00 Toyota Motor Manufacturing, Indiana, Inc. United States 100.00 100.00 Toyota Motor Manufacturing, Texas, Inc.
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 181 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, 2022.
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.
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 37 Table of Contents 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 also required to comply with the applicable standards.
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. Production Toyota and its affiliated companies produce automobiles and related components through more than 50 overseas manufacturing organizations in 27 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. 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.
Specifically, HELPNET ® automatically contacts an operator when the airbags deploy and supports D-Call Net ® , a service available throughout Japan that makes quick deployment decisions for air ambulances. This service is provided by sending vehicle data to the HELPNET ® center from an on-board data communication module (“DCM”).
Specifically, HELPNET ® automatically contacts an operator when the airbags deploy and supports D-Call Net ® , a service that makes quick deployment decisions for air ambulances. This service is provided by sending vehicle data to the HELPNET center from an on-board data communication module.
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 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 66 Table of Contents production measures such as revising takt time and adjusting days of operation.
In addition, the proposal introduces a new 2035 carbon dioxide target set at a 100% reduction for new vehicles and vans, again relative to the 2021 baseline. The 2025 target remains unchanged at a 15% reduction for both new vehicles and vans. The proposal has not yet been finalized.
In addition, the proposal introduces a new 2035 carbon dioxide target set at a 100% reduction for new vehicles and 41 Table of Contents vans, again relative to the 2021 baseline. The 2025 target remains unchanged at a 15% reduction for both new vehicles and vans. The proposal has not yet been finalized.
For a detailed discussion of the company’s research and development infrastructure, see “Operating and Financial Review and Prospects — Research and Development, Patents and Licenses.” Components and Parts, Raw Materials and Sources of Supply Toyota purchases parts, components, raw materials, equipment and other supplies from multiple competing suppliers located around the world.
For a detailed discussion of the company’s research and development infrastructure, see “Item 5. Operating and Financial Review and Prospects — 5.C Research and Development, Patents and Licenses.” Components and Parts, Raw Materials and Sources of Supply Toyota purchases parts, components, raw materials, equipment and other supplies from multiple competing suppliers located around the world.
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), would become increasingly stringent in phases from 2017 to 2025.
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.
The proposal strengthens the 2030 targets from 37.5% to a 55% reduction for new passenger cars and from 31% 35 Table of Contents to a 50% reduction for new light commercial vehicles, both relative to the 2021 baseline discussed above.
The proposal strengthens the 2030 targets from 37.5% to a 55% reduction for new passenger cars and from 31% to a 50% reduction for new light commercial vehicles, both relative to the 2021 baseline discussed above.
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.
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.
Facilities are located principally in Japan, the United States, Canada, the United Kingdom, France, Turkey, Czech Republic, Russia, Poland, Thailand, China, Taiwan, India, Indonesia, South Africa, Argentina and Brazil. See “Information on the Company — Property, Plants and Equipment” for a description of Toyota’s principal production facilities.
Facilities are located principally in Japan, the United States, Canada, the United Kingdom, France, Turkey, Czech Republic, Poland, Thailand, China, Taiwan, India, Indonesia, South Africa, Argentina and Brazil. See “Item 4. Information on the Company — 4D. Property, Plants and Equipment” for a description of Toyota’s principal production facilities.
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. 44 Table of Contents 4.C ORGANIZATIONAL STRUCTURE As of March 31, 2022, Toyota Motor Corporation had 208 Japanese subsidiaries and 351 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. 64 Table of Contents 4.C ORGANIZATIONAL STRUCTURE As of March 31, 2023, Toyota Motor Corporation had 207 Japanese subsidiaries and 362 overseas subsidiaries.
In 2020, we established Prime Planet Energy & Solutions, Inc. to accelerate integrated efforts in the battery business. Over the past 26 years, Toyota has made nearly 1 trillion yen in capital expenditures, research and development expenses and other investments to produce more than 20 million batteries.
In 2020, we established Prime Planet Energy & Solutions, Inc. to accelerate integrated efforts in the battery business. Over the past 28 years, Toyota has made approximately 1 trillion yen in capital expenditures, research and development expenses and other investments to produce more than 23 million batteries.
See “— Capital Expenditures and Divestitures” for a description of Toyota’s recent investments in completed plant constructions and for a description of Toyota’s current investments in ongoing plant constructions. Distribution Toyota’s automotive sales distribution network is the largest in Japan.
Business Overview — Capital Expenditures and Divestitures” for a description of Toyota’s recent investments in completed plant constructions and for a description of Toyota’s current investments in ongoing plant constructions. Distribution Toyota’s automotive sales distribution network is the largest in Japan.
South Africa 100.00 100.00 45 Table of Contents 4.D PROPERTY, PLANTS AND EQUIPMENT As of March 31, 2022, Toyota and its affiliated companies produced automobiles and related components through more than 50 overseas manufacturing organizations in 27 countries and regions besides Japan.
South Africa 100.00 100.00 65 Table of Contents 4.D PROPERTY, PLANTS AND EQUIPMENT As of March 31, 2023, Toyota and its affiliated companies produced automobiles and related components through more than 50 overseas manufacturing organizations in 26 countries and regions besides Japan.
Toyota also provides financial services in 41 other countries and regions through various financial services subsidiaries, including: • Toyota Finance Corporation in Japan; • Toyota Credit Canada Inc. in Canada; • Toyota Finance Australia Ltd. in Australia; • Toyota Kreditbank GmbH in Germany; • Toyota Financial Services (UK) PLC in the United Kingdom; 29 Table of Contents • Toyota Leasing (Thailand) Co., Ltd. in Thailand; and • Toyota Motor Finance (China) Co., Ltd. in China.
Toyota also provides financial services in 42 other countries and regions through various financial services subsidiaries, including: • Toyota Finance Corporation in Japan; • Toyota Credit Canada Inc. in Canada; • Toyota Finance Australia Ltd. in Australia; • Toyota Kreditbank GmbH in Germany; • Toyota Financial Services (UK) PLC in the United Kingdom; • Toyota Leasing (Thailand) Co., Ltd. in Thailand; and • Toyota Motor Finance (China) Co., Ltd. in China.
For Toyota to achieve its ultimate goal of eliminating traffic accident causalities, the development of safe vehicles is of course important, but it is also essential to educate people, including drivers and pedestrians, and to ensure safe traffic infrastructure, including traffic signals and roads.
Efforts in Realizing a Safe Mobility Society For Toyota to achieve its ultimate goal of eliminating traffic accident causalities, the development of safe vehicles is of course important, but it is also essential to educate people, including drivers and pedestrians, and to ensure safe traffic infrastructure, including traffic signals and roads.
Going forward, we believe the five companies will deepen their collaboration while openly considering cooperation with other like-minded partners, working to help fulfill the automotive industry’s mission of helping improve people’s lives and leave a better Japan and a better planet for the next generation.
Going forward, through the CJP project, the participating companies will deepen their collaboration while openly considering cooperation with other like-minded partners, working to help fulfill the automotive industry’s mission of helping improve people’s lives and leave a better Japan and a better planet for the next generation.
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. Automated driving vehicles must obtain exemption under this framework.
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.
We expect that expanding CJPT to include mini-vehicles will enable efficient, integrated logistics, linking the main arteries of logistics (handled by trucks) with the capillaries of logistics (the domain of commercial mini- 27 Table of Contents vehicles) while leveraging connected technologies and abundant data.
We expect that expanding the CJP project to include mini-vehicles will enable efficient, integrated logistics, linking the main arteries of logistics (handled by trucks) with the capillaries of logistics (the domain of commercial mini-vehicles) while leveraging connected technologies and abundant data.
In estimating the provision we should record in the consolidated financial statements as a result of the aforementioned judgment, Toyota has considered various factors including the legal and factual circumstances of the case, the contents of the judgement of the court of first instance, and the views of legal counsel.
In calculating the provision we should record in the consolidated financial statements as a result of the aforementioned judgments, Toyota has considered various factors including the legal and factual circumstances of the case, the contents of the judgement of the court of first instance and the Federal Court of Australia, and the views of legal counsel.
Automotive Operations Toyota’s sales revenues from its automotive operations were ¥28,605.7 billion in fiscal 2022, ¥24,651.5 billion in fiscal 2021, and ¥26,799.7 billion in fiscal 2020. Toyota produces and sells passenger vehicles, minivans and commercial vehicles such as trucks. Toyota Motor Corporation’s subsidiary, Daihatsu, produces and sells mini-vehicles and compact cars.
Automotive Operations Toyota’s sales revenues from its automotive operations were ¥33,820.0 billion in fiscal 2023, ¥28,605.7 billion in fiscal 2022, and ¥24,651.5 billion in fiscal 2021. Toyota produces and sells passenger vehicles, minivans and commercial vehicles such as trucks. Toyota Motor Corporation’s subsidiary, Daihatsu, produces and sells mini-vehicles and compact cars.
On July 21, 2021, Suzuki and Daihatsu joined CJPT. As many of Japan’s roads are so narrow that only mini-vehicles can easily use them, mini-vehicles are collectively a kind of “people’s car,” made to suit the roads of Japan. They are a practical and sustainable lifeline for people across the country, and have continued to evolve alongside changing lifestyles.
As many of Japan’s roads are so narrow that only mini-vehicles can easily use them, mini-vehicles are collectively a kind of “people’s car,” made to suit the roads of Japan. They are a practical and sustainable lifeline for people across the country and have continued to evolve alongside changing lifestyles.
When it comes online in 2025, it is expected that TBMNC will have four production lines, each capable of delivering enough lithium-ion batteries for 200,000 vehicles — with the intention to expand to at least six production lines for a combined total of up to 1.2 million vehicles per year. Toyota has five research and development centers in North America.
When it comes online in 2025, it is expected that TBMNC will have four production lines, each capable of delivering enough lithium-ion batteries for 200,000 vehicles — with the intention to expand to at least six production lines for a combined total of up to 1.2 million vehicles per year.
By combining the commercial vehicle foundations cultivated by Isuzu and Hino with Toyota’s CASE technologies, the companies aim to accelerate the societal implementation and adoption of CASE technologies and services and thereby help address social issues and contribute to the realization of carbon neutrality.
By combining the commercial vehicle foundations of the companies participating in CJPT with Toyota’s CASE technologies, the companies aim to accelerate the societal implementation and adoption of CASE technologies and services and thereby help address social issues and contribute to the realization of carbon neutrality.
Thereafter, the finance company retains responsibility for installment payment collections and administration. Toyota’s finance subsidiaries acquire security interests in the vehicles financed and can generally repossess vehicles if customers fail to meet their contractual obligations. Almost all retail financings are non-recourse, which relieves the dealers from financial responsibility in the event of repossession.
Toyota’s finance subsidiaries acquire security interests in the vehicles financed and can generally repossess vehicles if customers fail to meet their contractual obligations. Almost all retail financings are non-recourse, which relieves the dealers from financial responsibility in the event of repossession.
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 50.18% of the voting interests as of March 31, 2022, 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, including the Japanese Ministry of Land, Infrastructure, Transport and Tourism (“MLIT”) and the U.S.
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.
The five companies that make up CJPT plan to link their connected technology platforms to build a more comprehensive platform for commercial vehicles and leverage the TPS, one of Toyota’s strengths, to realize JIT logistics and increase transport efficiency, thereby helping to reduce CO 2 emissions.
The companies that are participating in CJPT will link their connected technology platforms to build a more comprehensive platform for commercial vehicles and leverage the TPS, one of Toyota’s strengths, to realize JIT logistics and increase transport efficiency, thereby helping to reduce CO 2 emissions.
The rule would bring federal emission standards for these pollutants in line with California’s emission standards. The new Tier 3 rule also required reductions in gasoline’s sulfur content beginning in 2017.
The rule brought federal emission standards for these pollutants in line with California’s emission standards. The new Tier 3 rule also required reductions in gasoline’s sulfur content beginning in model year 2017.
In Asia (including India but excluding Japan and China), new vehicle unit sales also increased from the previous year to approximately 9.22 million units.
In Asia (including India but excluding Japan and China), new vehicle unit sales increased from the previous year to approximately 10.80 million units.
United States 100.00 100.00 Toyota Motor Sales, U.S.A., Inc. United States 100.00 100.00 Toyota Motor Manufacturing Canada Inc. Canada 100.00 100.00 Toyota Credit Canada Inc. Canada 100.00 100.00 Toyota Canada Inc. Canada 51.00 51.00 Toyota Motor Manufacturing de Baja California, S. de R.L. de C.V. Mexico 100.00 100.00 Toyota Motor Manufacturing de Guanajuato, S.A.de C.V.
United States 100.00 100.00 Toyota Motor Sales, U.S.A., Inc. United States 100.00 100.00 Toyota Financial Savings Bank United States 100.00 100.00 Toyota Motor Manufacturing Canada Inc. Canada 100.00 100.00 Toyota Credit Canada Inc. Canada 100.00 100.00 Toyota Canada Inc. Canada 51.00 51.00 Toyota Motor Manufacturing de Baja California, S. de R.L. de C.V.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFor fiscal 2021 and 2022, exported vehicle unit sales were 1,728 thousand units and 1,716 thousand units, respectively. 53 Table of Contents North 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.
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.
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.
Japan Yen in millions 2022 v. 2021 Change Changes in operating income and loss: Effect of marketing efforts 260,000 Effect of cost reduction efforts (145,000 ) Effect of changes in exchange rates 370,000 Increase or decrease in expenses and expense reduction efforts (50,000 ) Other (160,772 ) Total 274,228 North America Yen in millions 2022 v. 2021 Change Changes in operating income and loss: Effect of marketing efforts 380,000 Effect of cost reduction efforts (125,000 ) Effect of changes in exchange rates 50,000 Increase or decrease in expenses and expense reduction efforts (135,000 ) Other (5,577 ) Total 164,423 Europe Yen in millions 2022 v. 2021 Change Changes in operating income and loss: Effect of marketing efforts 105,000 Effect of cost reduction efforts (40,000 ) Effect of changes in exchange rates 0 Increase or decrease in expenses and expense reduction efforts (10,000 ) Other 2 Total 55,002 57 Table of Contents Asia Yen in millions 2022 v. 2021 Change Changes in operating income and loss: Effect of marketing efforts 130,000 Effect of cost reduction efforts (35,000 ) Effect of changes in exchange rates 170,000 Increase or decrease in expenses and expense reduction efforts (40,000 ) Other 11,410 Total 236,410 Other Yen in millions 2022 v. 2021 Change Changes in operating income and loss: Effect of marketing efforts 95,000 Effect of cost reduction efforts (15,000 ) Effect of changes in exchange rates 20,000 Increase or decrease in expenses and expense reduction efforts 15,000 Other 63,322 Total 178,322 Other Income and Expenses Share of profit (loss) of investments accounted for using the equity method during fiscal 2022 increased by ¥209.3 billion, or 59.6%, to ¥560.3 billion compared with the prior fiscal year.
Japan Yen in millions 2022 v. 2021 Change Changes in operating income and loss: Effect of marketing efforts 260,000 Effect of cost reduction efforts (145,000 ) Effect of changes in exchange rates 370,000 Increase or decrease in expenses and expense reduction efforts (50,000 ) Other (160,772 ) Total 274,228 North America Yen in millions 2022 v. 2021 Change Changes in operating income and loss: Effect of marketing efforts 380,000 Effect of cost reduction efforts (125,000 ) Effect of changes in exchange rates 50,000 Increase or decrease in expenses and expense reduction efforts (135,000 ) Other (5,577 ) Total 164,423 Europe Yen in millions 2022 v. 2021 Change Changes in operating income and loss: Effect of marketing efforts 105,000 Effect of cost reduction efforts (40,000 ) Effect of changes in exchange rates 0 Increase or decrease in expenses and expense reduction efforts (10,000 ) Other 2 Total 55,002 Asia Yen in millions 2022 v. 2021 Change Changes in operating income and loss: Effect of marketing efforts 130,000 Effect of cost reduction efforts (35,000 ) Effect of changes in exchange rates 170,000 Increase or decrease in expenses and expense reduction efforts (40,000 ) Other 11,410 Total 236,410 87 Table of Contents Other Yen in millions 2022 v. 2021 Change Changes in operating income and loss: Effect of marketing efforts 95,000 Effect of cost reduction efforts (15,000 ) Effect of changes in exchange rates 20,000 Increase or decrease in expenses and expense reduction efforts 15,000 Other 63,322 Total 178,322 Other Income and Expenses Share of profit (loss) of investments accounted for using the equity method during fiscal 2022 increased by ¥209.3 billion, or 59.6%, to ¥560.3 billion compared with the prior fiscal year.
Yen in millions Year ended March 31, 2022 v. 2021 Change 2021 2022 Amount Percentage Vehicles 20,509,606 23,739,442 3,229,836 15.7 % Parts and components for production 1,287,053 1,504,215 217,162 16.9 Parts and components for after service 2,049,187 2,407,143 357,956 17.5 Other 752,000 881,193 129,193 17.2 Total Automotive 24,597,846 28,531,993 3,934,147 16.0 All Other 479,553 541,436 61,883 12.9 Total sales of products 25,077,398 29,073,428 3,996,030 15.9 Financial services 2,137,195 2,306,079 168,884 7.9 Total sales revenues 27,214,594 31,379,507 4,164,914 15.3 % 52 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 15.9% during fiscal 2022 compared with the prior fiscal year to ¥29,073.4 billion, and sales revenues from financial services operations, which increased by 7.9% during fiscal 2022 compared with the prior fiscal year to ¥2,306.0 billion.
Yen in millions Year ended March 31, 2022 v. 2021 Change 2021 2022 Amount Percentage Vehicles 20,509,606 23,739,442 3,229,836 15.7 % Parts and components for production 1,287,053 1,504,215 217,162 16.9 Parts and components for after service 2,049,187 2,407,143 357,956 17.5 Other 752,000 881,193 129,193 17.2 Total Automotive 24,597,846 28,531,993 3,934,147 16.0 All Other 479,553 541,436 61,883 12.9 Total sales of products 25,077,398 29,073,428 3,996,030 15.9 Financial services 2,137,195 2,306,079 168,884 7.9 Total sales revenues 27,214,594 31,379,507 4,164,914 15.3 % 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 15.9% during fiscal 2022 compared with the prior fiscal year to ¥29,073.4 billion, and sales revenues from financial services operations, which increased by 7.9% during fiscal 2022 compared with the prior fiscal year to ¥2,306.0 billion.
Asia Thousands of units Year ended March 31, 2022 v. 2021 Change 2021 2022 Amount Percentage Toyota’s consolidated vehicle unit sales 1,222 1,543 321 26.3 % Yen in millions Year ended March 31, 2022 v. 2021 Change 2021 2022 Amount Percentage Sales revenues: Sales of products 4,874,746 6,345,172 1,470,426 30.2 % Financial services 170,549 185,394 14,845 8.7 Total 5,045,295 6,530,566 1,485,272 29.4 % 54 Table of Contents Sales revenues in Asia increased due primarily to the 321 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, 2022 v. 2021 Change 2021 2022 Amount Percentage Toyota’s consolidated vehicle unit sales 1,222 1,543 321 26.3 % Yen in millions Year ended March 31, 2022 v. 2021 Change 2021 2022 Amount Percentage Sales revenues: Sales of products 4,874,746 6,345,172 1,470,426 30.2 % Financial services 170,549 185,394 14,845 8.7 Total 5,045,295 6,530,566 1,485,272 29.4 % Sales revenues in Asia increased due primarily to the 321 thousand vehicles increase in vehicle unit sales and the favorable impact of changes in exchange rates compared with the prior fiscal year.
Other Thousands of units Year ended March 31, 2022 v. 2021 Change 2021 2022 Amount Percentage Toyota’s consolidated vehicle unit sales 1,027 1,352 326 31.7 % Yen in millions Year ended March 31, 2022 v. 2021Change 2021 2022 Amount Percentage Sales revenues: Sales of products 1,719,132 2,756,840 1,037,708 60.4 % Financial services 153,764 171,343 17,579 11.4 Total 1,872,895 2,928,183 1,055,287 56.3 % Sales revenues in Other increased due primarily to the 326 thousand vehicles increase in vehicle unit sales compared with the prior fiscal year.
Other Thousands of units Year ended March 31, 2022 v. 2021 Change 2021 2022 Amount Percentage Toyota’s consolidated vehicle unit sales 1,027 1,352 326 31.7 % Yen in millions Year ended March 31, 2022 v. 2021Change 2021 2022 Amount Percentage Sales revenues: Sales of products 1,719,132 2,756,840 1,037,708 60.4 % Financial services 153,764 171,343 17,579 11.4 Total 1,872,895 2,928,183 1,055,287 56.3 % 84 Table of Contents Sales revenues in Other increased due primarily to the 326 thousand vehicles increase in vehicle unit sales compared with the prior fiscal year.
Yen in millions Year ended March 31, 2022 v. 2021 Change 2021 2022 Amount Percentage Automotive: Sales revenues 24,651,552 28,605,738 3,954,186 16.0 % Operating income 1,607,161 2,284,290 677,130 42.1 Financial Services: Sales revenues 2,162,237 2,324,026 161,789 7.5 Operating income 495,593 657,001 161,408 32.6 All Other: Sales revenues 1,052,365 1,129,876 77,512 7.4 Operating income 85,350 42,302 (43,048 ) (50.4 ) Intersegment elimination/unallocated amount: Sales revenues (651,560 ) (680,133 ) (28,573 ) — Operating income 9,645 12,104 2,459 — 59 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, 2022 v. 2021 Change 2021 2022 Amount Percentage Automotive: Sales revenues 24,651,552 28,605,738 3,954,186 16.0 % Operating income 1,607,161 2,284,290 677,130 42.1 Financial Services: Sales revenues 2,162,237 2,324,026 161,789 7.5 Operating income 495,593 657,001 161,408 32.6 All Other: Sales revenues 1,052,365 1,129,876 77,512 7.4 Operating income 85,350 42,302 (43,048 ) (50.4 ) Intersegment elimination/unallocated amount: Sales revenues (651,560 ) (680,133 ) (28,573 ) — Operating income 9,645 12,104 2,459 — Automotive Operations Segment The automotive operations segment is Toyota’s largest operating segment by sales revenues.
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 2022.
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.
In fiscal 2023, 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 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.
This increase mainly reflected the impact of changes in vehicle unit sales and sales mix, the unfavorable impact of soaring materials prices, and the unfavorable impact of fluctuations in foreign currency translation rates. Cost of Financial Services Cost of financial services decreased by ¥25.2 billion, or 2.1%, to ¥1,157.0 billion during fiscal 2022 compared with the prior fiscal year.
This increase mainly reflected the impact of changes in vehicle unit sales and sales mix, the unfavorable impact of soaring materials prices, and the unfavorable impact of fluctuations in foreign currency translation rates. 85 Table of Contents Cost of Financial Services Cost of financial services decreased by ¥25.2 billion, or 2.1%, to ¥1,157.0 billion during fiscal 2022 compared with the prior fiscal year.
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 2022.
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.
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. 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. 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.
Localizing production enables Toyota to locally purchase many of the supplies and resources used in the production process, which allows for a better match of local currency revenues with local currency expenses. Toyota also enters into foreign currency transactions and other hedging instruments to address a portion of its transaction risk.
Localizing production enables Toyota to locally purchase many of the supplies and resources used in the production process, which allows for a better match of local currency revenues with local currency expenses. 70 Table of Contents Toyota also enters into foreign currency transactions and other hedging instruments to address a portion of its transaction risk.
At the end of each of fiscal 2021 and 2022, the Japanese yen was weaker against the U.S. dollar in comparison to the end of fiscal 2020 and 2021, respectively. In fiscal 2021 and 2022, the Japanese yen was on average weaker against the euro in comparison to fiscal 2020 and 2021, respectively.
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.
Its key objectives include creating a smooth software pipeline from research to commercialization, leveraging data-handling capabilities, strengthening collaboration in development within 74 Table of Contents the Toyota group, including TRI, to accelerate development, and recruiting and employing top-level engineers globally, while cultivating and coordinating strong talent within the Toyota group.
Its key objectives include creating a smooth software pipeline from research to commercialization, leveraging data-handling capabilities, strengthening collaboration in development within the Toyota group, including TRI, to accelerate development, and recruiting and employing top-level engineers globally, while cultivating and coordinating strong talent within the Toyota group.
These cost reduction efforts 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.
Generally, a weakening of the Japanese yen against other currencies has a positive effect on Toyota’s revenues, operating income and net income attributable to Toyota Motor Corporation. A strengthening of the 50 Table of Contents Japanese yen against other currencies has the opposite effect.
Generally, a weakening of the Japanese yen against other currencies has a positive effect on Toyota’s revenues, operating income and net income attributable to Toyota Motor Corporation. A strengthening of the Japanese yen against other currencies has the opposite effect.
These factors include general economic conditions, prevailing interest rates and Toyota’s financial strength. Funding costs decreased during fiscal 2021 and 2022 mainly as a result of lower 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 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.
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.
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.
Other income (loss), net decreased by ¥53.2 billion, to ¥72.4 billion in losses during fiscal 2022 compared with the prior fiscal year. 58 Table of Contents Income Taxes The provision for income taxes increased by ¥465.9 billion, or 71.7%, to ¥1,115.9 billion during fiscal 2022 compared with the prior fiscal year.
Other income (loss), net decreased by ¥53.2 billion, to ¥72.4 billion in losses during fiscal 2022 compared with the prior fiscal year. Income Taxes The provision for income taxes increased by ¥465.9 billion, or 71.7%, to ¥1,115.9 billion during fiscal 2022 compared with the prior fiscal year.
As of March 31, 2022, approximately 52% of long-term debt was denominated in U.S. dollars, 11% in Japanese yen, 13% in euros, 6% in Australian dollars, 4% 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, 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.
Marketing efforts includes changes in vehicle unit sales and sales mix, sales expenses and other. “Other” includes valuation gains and losses from interest rate swaps etc. 56 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.
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.
Toyota funds its financing programs for customers and dealers, including loans and leasing programs, from both cash generated by operations and borrowings 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 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.
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.
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.
Toyota periodically reviews and revises, as appropriate, these credit limits. Outstanding credit facilities with credit card holders were ¥179.2 billion as of March 31, 2022. 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 ¥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.
Yen in millions Year ended March 31, 2020 2021 2022 Japan 9,503,238 8,587,193 8,214,740 North America 10,419,869 9,325,950 10,897,946 Europe 3,133,227 2,968,289 3,692,214 Asia 4,785,489 4,555,897 5,778,115 Other* 2,024,724 1,777,266 2,796,493 * “Other” consists of Central and South America, Oceania, Africa and the Middle East. 51 Table of Contents Results of Operations — Fiscal 2022 Compared with Fiscal 2021 Yen in millions Year ended March 31, 2022 v. 2021 Change 2021 2022 Amount Percentage Sales revenues: Japan 14,948,931 15,991,436 1,042,505 7.0 % North America 9,491,803 11,166,479 1,674,676 17.6 Europe 3,134,489 3,867,847 733,359 23.4 Asia 5,045,295 6,530,566 1,485,272 29.4 Other* 1,872,895 2,928,183 1,055,287 56.3 Intersegment elimination/unallocated amount (7,278,820 ) (9,105,004 ) (1,826,185 ) — Total 27,214,594 31,379,507 4,164,914 15.3 Operating income (loss): Japan 1,149,217 1,423,445 274,228 23.9 North America 401,361 565,784 164,423 41.0 Europe 107,971 162,973 55,002 50.9 Asia 435,940 672,350 236,410 54.2 Other* 59,847 238,169 178,322 298.0 Intersegment elimination/unallocated amount 43,413 (67,024 ) (110,436 ) — Total 2,197,748 2,995,697 797,948 36.3 Operating margin 8.1 % 9.5 % 1.4 % Income before income taxes 2,932,354 3,990,532 1,058,177 36.1 Net margin from income before income taxes 10.8 % 12.7 % 1.9 % Net income attributable to Toyota Motor Corporation 2,245,261 2,850,110 604,849 26.9 Net margin attributable to Toyota Motor Corporation 8.3 % 9.1 % 0.8 % * “Other” consists of Central and South America, Oceania, Africa and the Middle East.
Results of Operations — Fiscal 2022 Compared with Fiscal 2021 Yen in millions Year ended March 31, 2022 v. 2021 Change 2021 2022 Amount Percentage Sales revenues: Japan 14,948,931 15,991,436 1,042,505 7.0 % North America 9,491,803 11,166,479 1,674,676 17.6 Europe 3,134,489 3,867,847 733,359 23.4 Asia 5,045,295 6,530,566 1,485,272 29.4 Other* 1,872,895 2,928,183 1,055,287 56.3 Intersegment elimination/unallocated amount (7,278,820 ) (9,105,004 ) (1,826,185 ) — Total 27,214,594 31,379,507 4,164,914 15.3 Operating income (loss): Japan 1,149,217 1,423,445 274,228 23.9 North America 401,361 565,784 164,423 41.0 Europe 107,971 162,973 55,002 50.9 Asia 435,940 672,350 236,410 54.2 Other* 59,847 238,169 178,322 298.0 Intersegment elimination/unallocated amount 43,413 (67,024 ) (110,436 ) — Total 2,197,748 2,995,697 797,948 36.3 Operating margin 8.1 % 9.5 % 1.4 % Income before income taxes 2,932,354 3,990,532 1,058,177 36.1 Net margin from income before income taxes 10.8 % 12.7 % 1.9 % Net income attributable to Toyota Motor Corporation 2,245,261 2,850,110 604,849 26.9 Net margin attributable to Toyota Motor Corporation 8.3 % 9.1 % 0.8 % * “Other” consists of Central and South America, Oceania, Africa and the Middle East.
Development of automated driving technology and software platform technology Asia Pacific Toyota Daihatsu Engineering and Manufacturing Co., Ltd. Planning and evaluation of vehicles manufactured in Australia and Asia China Toyota Motor Engineering and Manufacturing (China) Co., Ltd.
Development of automated driving technology and software platform technology Asia Pacific Toyota Daihatsu Engineering and Manufacturing Co., Ltd. Planning and evaluation of vehicles manufactured in Australia and Asia China Toyota Motor Engineering and Manufacturing (China) Co., Ltd. Environmental technology design and evaluation in China FAW Toyota Research & Development Co., Ltd.
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.
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.
See “Operating and Financial Review and Prospects — 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 “Cautionary Statement With Respect To Forward-Looking Statements”.
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”.
For the purposes of this outlook discussion, Toyota is assuming an average exchange rate of ¥115 to the U.S. dollar and ¥130 to the euro. Exchange rate fluctuations can materially affect Toyota’s operating results. In particular, a strengthening of the Japanese yen against the U.S. dollar can have a material adverse effect on Toyota’s operating results.
For the purposes of this outlook discussion, Toyota is assuming an average exchange rate of ¥125 to the U.S. dollar and ¥135 to the euro. Exchange rate fluctuations can materially affect Toyota’s operating results. In particular, a strengthening of the Japanese yen against the U.S. dollar can have a material adverse effect on Toyota’s operating results. See “Item 5.
Operating income from financial services operations increased by ¥161.4 billion, or 32.6%, to ¥657.0 billion during fiscal 2022 compared with the prior fiscal year. This increase was due primarily to the increases in both financing margin and financing volume.
This increase was due mainly to the favorable impact of changes in exchange rates. Operating income from financial services operations increased by ¥161.4 billion, or 32.6%, to ¥657.0 billion during fiscal 2022 compared with the prior fiscal year. This increase was due primarily to the increases in both financing margin and financing volume.
See “Information on the Company — Business Overview — Capital Expenditures and Divestitures” for information regarding Toyota’s material capital expenditures and divestitures for fiscal 2021 and 2022, 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 2021, 2022 and 2023, and information concerning Toyota’s principal capital expenditures and divestitures currently in progress.
During fiscal 2022, operating income (before elimination of intersegment profits) compared with the prior fiscal year increased by ¥274.2 billion, or 23.9%, in Japan, ¥164.4 billion, or 41.0%, in North America, ¥55.0 billion, or 50.9%, in Europe, ¥236.4 billion, or 54.2%, in Asia, and ¥178.3 billion, or 298.0%, in Other.
During fiscal 2022, operating income (before elimination of intersegment profits) compared with the prior fiscal year increased by ¥274.2 billion, or 23.9%, in Japan, ¥164.4 billion, or 41.0%, in North America, ¥55.0 billion, or 50.9%, in Europe, ¥236.4 billion, or 54.2%, in Asia, and ¥178.3 billion, or 298.0%, in Other. 86 Table of Contents The following is a description of operating income in each geographic market.
Toyota will use its funds to efficiently invest in maintenance and replacement of conventional manufacturing facilities and the introduction of new products, and will focus on investment in areas contributing to strengthening competitiveness and future growth for realization of a new mobility society.
Toyota will use its funds to efficiently invest in maintenance and replacement of conventional manufacturing facilities and the introduction of new products and will focus on investment in areas contributing to strengthening competitiveness and future growth for transformation into a mobility company. See “Item 4.
In fiscal 2021 and 2022, Toyota produced 69.7% and 71.6%, respectively, of its non-domestic sales outside Japan. In North America, 65.3% and 68.5% of vehicles sold in fiscal 2021 and 2022, respectively, were produced locally. In Europe, 71.9% and 69.1% of vehicles sold in fiscal 2021 and 2022, respectively, were produced locally.
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.
Toyota’s treasury policy is to maintain controls on all exposures, to adhere to stringent counterparty credit standards, and to actively monitor marketplace exposures. Toyota remains centralized, and is pursuing global efficiency of its financial services operations through Toyota Financial Services Corporation.
See note 23 to the consolidated financial statements for further discussion. Toyota’s treasury policy is to maintain controls on all exposures, to adhere to stringent counterparty credit standards, and to actively monitor marketplace exposures. Toyota remains centralized and is pursuing global efficiency of its financial services operations through Toyota Financial Services Corporation.
This increase in operating income was due mainly to the ¥760.0 billion effect of marketing activities and the ¥570.0 billion favorable impact of changes in exchange rates, partially offset by 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 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.
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.
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.
All Other Operations Segment Sales revenues for Toyota’s other operations segments increased by ¥77.5 billion, or 7.4%, to ¥1,129.8 billion during fiscal 2022 compared with the prior fiscal year.
All Other Operations Segment Sales revenues for Toyota’s other operations segments increased by ¥77.5 billion, or 7.4%, to ¥1,129.8 billion during fiscal 2022 compared with the prior fiscal year. Operating income from Toyota’s other operations segments decreased by ¥43.0 billion, or 50.4%, to ¥42.3 billion during fiscal 2022 compared with the prior fiscal year.
This increase was due mainly to an increase during fiscal 2021 in net income attributable to the shareholders of companies accounted for by the equity method. Other finance income increased by ¥129.3 billion, or 42.3%, to ¥435.2 billion during fiscal 2021 compared with the prior fiscal year.
This increase was due mainly to an increase during fiscal 2023 in net income attributable to the shareholders of companies accounted for by the equity method. Other finance income increased by ¥44.5 billion, or 13.3%, to ¥379.3 billion during fiscal 2023 compared with the prior fiscal year.
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.
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).
As of March 31, 2021, Toyota had 16.4 million cardholders, an increase of 0.5 million cardholders compared with March 31, 2020. As of March 31, 49 Table of Contents 2022, Toyota had 15.7 million cardholders, a decrease of 0.7 million cardholders compared with March 31, 2021.
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.
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 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.
Financial Services Operations Segment Sales revenues for the financial services operations increased during fiscal 2022 by ¥161.7 billion, or 7.5%, to ¥2,324.0 billion compared with the prior fiscal year. This increase was due mainly to the favorable impact of changes in exchange rates.
Financial Services Operations Segment Sales revenues for the financial services operations increased during fiscal 2023 by ¥485.6 billion, or 20.9%, to ¥2,809.6 billion compared with the prior fiscal year. This increase was due mainly to the favorable impact of changes in exchange rates.
Net Income Attributable to Non-controlling Interests Net income attributable to non-controlling interests decreased by ¥12.6 billion, or 34.0%, to ¥24.5 billion during fiscal 2022 compared with the prior fiscal year. This decrease was due mainly to a decrease during fiscal 2022 in net income of consolidated subsidiaries.
Net Income Attributable to Non-controlling Interests Net income attributable to non-controlling interests decreased by ¥12.6 billion, or 34.0%, to ¥24.5 billion during fiscal 2022 compared with the prior fiscal year.
This increase was due to a ¥640.0 billion increase in operating costs and expenses attributable to the impact of soaring materials prices. 55 Table of Contents Through continued cost reduction efforts together with suppliers, however, that increase was partially offset by a ¥240.0 billion reduction principally attributable to value engineering activities and other cost reduction efforts concerning design-related costs, and a ¥40.0 billion reduction attributable to cost reduction efforts principally at plants and logistics departments.
Through continued cost reduction efforts together with suppliers, however, that increase was partially offset by a ¥240.0 billion reduction principally attributable to value engineering activities and other cost reduction efforts concerning design-related costs, and a ¥40.0 billion reduction attributable to cost reduction efforts principally at plants and logistics departments.
Excluding the impact of changes in exchange rates of ¥560.0 billion, sales revenues in fiscal 2021 would have decreased by 9.1% in Japan, 8.5% in North America, 5.5% in Europe, and 3.5% in Asia, as well as would have increased by 0.1% in Other compared with the prior fiscal year.
Excluding the impact of changes in exchange rates of ¥3,580.0 billion, sales revenues in fiscal 2023 would have increased by 10.0% in Japan, 3.2% in North America, 2.8% in Europe, 7.9% in Asia, and 12.7% in Other compared with the prior fiscal year.
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.
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.
Product planning, design and evaluation of vehicles manufactured in North America Calty Design Research, Inc. Design Toyota Research Institute of North America (TRI-NA) Advanced research relating to “energy and environment,” “safety” and “mobility infrastructure” Toyota Research Institute, Inc. Research and development of artificial intelligence technology Woven Planet North America, Inc.
Basic research United States Toyota Motor Engineering and Manufacturing North America, Inc. Product planning, design and evaluation of vehicles manufactured in North America Calty Design Research, Inc. Design Toyota Research Institute of North America (TRI-NA) Advanced research relating to “energy and environment,” “safety” and “mobility infrastructure” Toyota Research Institute, Inc.
Toyota’s primary markets based on vehicle unit sales for fiscal 2022 were: Japan (23.4%), North America (29.1%), Europe (12.4%) and Asia (18.7%). Automotive Market Environment The worldwide automotive market is highly competitive and volatile.
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.
Taking the foregoing external factors and other factors into account, Toyota expects that sales revenues for fiscal 2023 will 69 Table of Contents increase compared with fiscal 2022 due mainly to the increase in vehicle unit sales.
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.
Toyota expects that operating income will decrease in fiscal 2023 compared with fiscal 2022 due mainly to the unfavorable impact of soaring materials prices, partially offset by the increase in vehicle unit sales. Toyota expects that income before income taxes and net income attributable to Toyota Motor Corporation will also decrease in fiscal 2023 compared with fiscal 2022.
Toyota expects that operating income will increase in fiscal 2024 compared with fiscal 2023 due mainly to marketing efforts, partially offset by the unfavorable impact of changes in exchange rates. Toyota expects that income before income taxes and net income attributable to Toyota Motor Corporation will also increase in fiscal 2024 compared with fiscal 2023.
The decrease in sales revenues from sales of products is mainly due to a decrease in Toyota vehicle unit sales of 1,309 thousand vehicles compared with the prior fiscal year. The following table shows the number of financing contracts by geographic region at the end of fiscal 2021 and 2020, respectively.
The increase in sales revenues from sales of products is mainly due to an increase in Toyota vehicle unit sales of 591 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 2023 and 2022, respectively.
Sales Revenues Toyota had sales revenues for fiscal 2022 of ¥31,379.5 billion, an increase of ¥4,164.9 billion, or 15.3%, compared with the prior fiscal year. 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.
Sales Revenues Toyota had sales revenues for fiscal 2023 of ¥37,154.2 billion, an increase of ¥5,774.7 billion, or 18.4%, compared with the prior fiscal year. The increase resulted mainly from the ¥1,150.0 billion impact of increased vehicle unit sales and changes in sales mix and the ¥3,580.0 billion favorable impact of changes in exchange rates.
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. Toyota believes that its ability to provide financing to its customers is an important value added service.
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.
Development of Woven City and software platform technologies Otemachi Office Development of key IT technologies, creation of new values by utilizing big data and collaboration with venture companies Shibetsu Proving Ground Evaluation Toyota Central R&D Labs., Inc. Basic research United States Toyota Motor Engineering and Manufacturing North America, Inc.
Development of artificial intelligence technology with a focus on automated driving technology Development of Woven City and software platform technologies Otemachi Office Development of key IT technologies, creation of new values by utilizing big data and collaboration with venture companies Shibetsu Proving Ground Evaluation Toyota Central R&D Labs., Inc.
Currency Fluctuations Toyota is affected by fluctuations in foreign currency exchange rates. Toyota is exposed to fluctuations in the value of the Japanese yen against the U.S. dollar and the euro as well as the Australian dollar, the Russian ruble, the Canadian dollar, the British pound and others.
Toyota is exposed to fluctuations in the value of the Japanese yen against the U.S. dollar and the euro as well as the Australian dollar, the Canadian dollar, the British pound and others. Toyota’s consolidated financial statements, which are presented in Japanese yen, are affected by foreign currency exchange fluctuations through both translation risk and transaction risk.
The current portion of long-term debt decreased during fiscal 2022 by ¥557.4 billion, or 7.4%, to ¥7,026.8 billion and the non-current portion increased by ¥1,809.9 billion, or 13.8%, to ¥14,943.7 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 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.
Toyota’s ability to satisfy changing customer preferences can affect its revenues and earnings significantly. The profitability of Toyota’s automotive operations is affected by many factors.
The timely introduction of new or redesigned vehicles is also an important factor in satisfying customer needs. Toyota’s ability to satisfy changing customer preferences can affect its revenues and earnings significantly. The profitability of Toyota’s automotive operations is affected by many factors.
Net Income Attributable to Toyota Motor Corporation Net income attributable to Toyota Motor Corporation increased by ¥604.8 billion, or 26.9%, to ¥2,850.1 billion during fiscal 2022 compared with the prior fiscal year. 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 ¥130.6 billion to ¥1,143.1 billion for fiscal 2022 compared with the prior fiscal year.
Net cash provided by operating activities increased by ¥995.4 billion to ¥3,722.6 billion for fiscal 2022, compared with ¥2,727.1 billion for fiscal 2021. The increase was primarily attributable to the ¥592.2 billion increase in net income. Net cash used in investing activities decreased by ¥4,106.6 billion to ¥577.4 billion for fiscal 2022, compared with ¥4,684.1 billion for fiscal 2021.
Net cash provided by operating activities decreased by ¥767.5 billion to ¥2,955.0 billion for fiscal 2023, compared with ¥3,722.6 billion for fiscal 2022. The decrease was primarily attributable to the ¥381.6 billion decrease in net income. Net cash used in investing activities increased by ¥1,021.3 billion to ¥1,598.8 billion for fiscal 2023, compared with ¥577.4 billion for fiscal 2022.
Other income (loss), net increased by ¥61.3 billion, to ¥19.2 billion in losses during fiscal 2021 compared with the prior fiscal year. 67 Table of Contents Income Taxes The provision for income taxes decreased by ¥31.8 billion, or 4.7%, to ¥649.9 billion during fiscal 2021 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. 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.
The amount of the effect of cost reduction efforts 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 decreased by ¥1,903.7 billion, or 8.2%, to ¥21,199.8 billion during fiscal 2021 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 ¥4,877.7 billion, or 20.1%, to ¥29,128.5 billion during fiscal 2023 compared with the prior fiscal year.
Therefore, Toyota has expanded its network of finance subsidiaries in order to offer financial services in many countries. Toyota’s competitors for retail financing and retail leasing include commercial banks, credit unions and other finance companies. Meanwhile, commercial banks and other captive automobile finance companies also compete against Toyota’s wholesale financing activities.
Toyota believes that its ability to provide financing to its customers is an important value added service. Therefore, Toyota has expanded its network of finance subsidiaries in order to offer financial services in many countries. Toyota’s competitors for retail financing and retail leasing include commercial banks, credit unions and other finance companies.
The intellectual property that R&D generates is a vital management resource that Toyota utilizes and protects to maximize its corporate value.
The intellectual property that R&D generates is a vital management resource that Toyota utilizes and protects to maximize its corporate value. For a more detailed discussion of the company’s research and development objectives and policies, see “Item 4.
Development of automated driving technology and software platform technology 75 Table of Contents Facility Principal Activity 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 Planet United Kingdom, 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 Toyota Europe Design Development S.A.R.L. Design Toyota Motorsport GmbH Development of motor sports vehicles Woven by Toyota, U.K., Ltd.
Geographically, sales revenues (before the elimination of intersegment revenues) for fiscal 2021 decreased by 9.1% in Japan, 10.8% in North America, 6.6% in Europe, 4.7% in Asia, and 11.4% in Other compared with the prior fiscal year.
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.
See notes 4 and 19 to the consolidated financial statements for additional information. Toyota continues to originate leases to finance new Toyota vehicles. These leasing activities are subject to residual value risk. Residual value losses could be incurred when the lessee of a vehicle does not exercise the option to purchase the vehicle at the end of the lease term.
These leasing activities are subject to residual value risk. Residual value losses could be incurred when the lessee of a vehicle does not exercise the option to purchase the vehicle at the end of the lease term.
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. Toyota defines research and development expenditures as research and development cost, plus research and development-related expenditures that were recognized as intangible assets, less amortization expenses for such assets.
Toyota defines research and development expenditures as research and development cost, plus research and development-related expenditures that were recognized as intangible assets, less amortization expenses for such assets.
Many governments also impose local content requirements, impose tariffs and other trade barriers, and enact price or exchange controls that can limit an automaker’s operations and can make the repatriation of profits unpredictable.
These laws, regulations and policies include those attributed to environmental matters, vehicle safety, fuel economy and emissions that can add significantly to the cost of vehicles. Many governments also impose local content requirements, impose tariffs and other trade barriers, and enact price or exchange controls that can limit an automaker’s operations and can make the repatriation of profits unpredictable.
Operating income from the automotive operations decreased by ¥405.9 billion, or 20.2%, to ¥1,607.1 billion during fiscal 2021 compared with the prior fiscal year.
Operating income from the automotive operations decreased by ¥103.6 billion, or 4.5%, to ¥2,180.6 billion during fiscal 2023 compared with the prior fiscal year.
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.
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.
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 Higashi-Fuji Technical Center Advanced development Tokyo Design Research & Laboratory Advanced styling designs Woven Core, Inc. Development of artificial intelligence technology with a focus on automated driving technology Woven Alpha, Inc.
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.
Operating Income Yen in millions 2021 v. 2020 Change Changes in operating income and loss: Effect of marketing activities (210,000 ) Effect of cost reduction efforts 150,000 Effect of changes in exchange rates (255,000 ) Increase or decrease in expenses and expense reduction efforts 70,000 Other 43,516 Total (201,484 ) Toyota’s operating income decreased by ¥201.4 billion, or 8.4%, to ¥2,197.7 billion during fiscal 2021 compared with the prior fiscal year.
Operating Income Yen in millions 2023 v. 2022 Change Changes in operating income and loss: Effect of marketing efforts 680,000 Effect of cost reduction efforts (1,290,000 ) Effect of changes in exchange rates 1,280,000 Increase or decrease in expenses and expense reduction efforts (525,000 ) Other (415,672 ) Total (270,672 ) Toyota’s operating income decreased by ¥270.6 billion, or 9.0%, to ¥2,725.0 billion during fiscal 2023 compared with the prior fiscal year.
Sales revenues for the automotive segment decreased during fiscal 2021 by ¥2,148.1 billion, or 8.0%, to ¥24,651.5 billion 68 Table of Contents compared with the prior fiscal year. The decrease mainly reflects the ¥2,080.0 billion unfavorable impact of changes in vehicle unit sales and sales mix and the ¥560.0 billion unfavorable impact of changes in exchange rates.
Sales revenues for the automotive segment increased during fiscal 2023 by ¥5,214.2 billion, or 18.2%, to ¥33,820.0 billion compared with the prior fiscal year. The increase mainly reflects the ¥3,170.0 billion favorable impact of changes in exchange rates and the ¥1,150.0 billion favorable impact of changes in vehicle unit sales and sales mix.
Toyota believes it has the resources, strategies and technologies in place to compete effectively in the industry as an independent company for the foreseeable future. Financial Services Operations The competition in the worldwide automobile financial services industry is intensifying.
The worldwide automotive industry is in a period of global competition which may continue for the foreseeable future, and in general the competitive environment in which Toyota operates is likely to intensify. Toyota believes it has the resources, strategies and technologies in place to compete effectively in the industry as an independent company for the foreseeable future.
The net defined benefit liability (asset) of foreign plans decreased during fiscal 2022 by ¥77.4 billion, or 22.7%, to ¥262.9 billion. The amounts of net defined benefit liability (asset) will be funded through future cash contributions by Toyota or in some cases will be settled on the retirement date of each covered employee.
The amounts of net defined benefit liability (asset) will be funded through future cash contributions by Toyota or in some cases will be settled on the retirement date of each covered employee. The decrease in net defined benefit liability (asset) of the Japanese plans reflects mainly a decrease in defined benefit obligations due to an increased discount rate.
Thousands of units Year Ended March 31, 2020 2021 2022 Japan 2,240 2,125 1,924 North America 2,713 2,313 2,394 Europe 1,029 959 1,017 Asia 1,600 1,222 1,543 Other* 1,372 1,027 1,352 Overseas total 6,715 5,521 6,306 Total 8,955 7,646 8,230 * “Other” consists of Central and South America, Oceania, Africa and the Middle East, etc. 47 Table of Contents During both fiscal 2021 and fiscal 2022, Toyota’s consolidated vehicle unit sales in Japan decreased due to weak market conditions as compared to 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.
Liquid assets, which Toyota defines as cash and cash equivalents, time deposits, public and corporate bonds and its investment in monetary trust funds decreased during fiscal 2022, by ¥761.1 billion, or 5.4%, to ¥13,451.0 billion as of March 31, 2022.
Liquid assets, which Toyota defines as cash and cash equivalents, time deposits, public and corporate bonds and its investment in monetary trust funds increased during fiscal 2023, by ¥1,263.9 billion, or 9.4%, to ¥14,715.0 billion as of March 31, 2023. 91 Table of Contents Trade accounts and notes receivable, less allowance for doubtful accounts increased during fiscal 2023 by ¥443.2 billion, or 14.1%, to ¥3,586.1 billion.

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Biggest changeDirector of Toyota Industries Corporation 21,984 shares 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. — 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) — 80 Table of Contents Name (Date of Birth) Position Brief Career Summary and Important Concurrent Duties Number of Common Shares Teiko Kudo (May 22, 1964) Outside Member of the Board of Directors 1987 Joined the Sumitomo Bank, Limited 2014 Executive Officer of Sumitomo Mitsui Banking Corporation 2017 Managing Executive Officer of Sumitomo Mitsui Banking Corporation 2018 Outside Member of the Board of Directors of TMC (to present) 2020 Senior Managing Executive Officer of Sumitomo Mitsui Banking Corporation 2020 Senior Managing Executive Officer of Sumitomo Mitsui Financial Group, Inc. 2021 Director and Senior Managing Executive Officer of Sumitomo Mitsui Banking Corporation (to present) 2021 Senior Managing Corporate Executive Officer of Sumitomo Mitsui Financial Group, Inc. 2021 Director Senior Managing Executive Officer of Sumitomo Mitsui Financial Group, Inc.
Biggest changePresident 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.
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 2021 • Evaluation of individual performance • 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.
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.
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.
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.
The amounts above were recorded as expenses in fiscal 2022. 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.
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.
Under 87 Table of Contents the provisions of the Companies Act, if Toyota decides the terms of an insurance agreement to be executed with an insurer, under which a member of the board of directors is the insured, and which promises that the insurer will compensate for damage arising from the member of the board of directors being held liable in relation to the execution of his or her duties or from a liability claim filed against the member of the board of directors, such 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 insurance agreement to be executed with an insurer, under which a member of the board of directors is the insured, and which promises that the insurer will compensate for damage arising from the member of the board of directors being held liable in relation to the execution of his or her duties or from a liability claim filed against the member of the board of directors, such decision must be made by a resolution of the board of directors.
However, because of the rapidly changing business environment, Toyota now recognizes that there is an increasing need for such executives to fulfill management roles (related to people, goods, and money) together with President Toyoda.
However, because of the rapidly changing business environment, Toyota now recognizes that there is an increasing need for such executives to fulfill management roles (related to people, goods, and money) together with our President.
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 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 considers that such decisions made by the Executive Compensation Meeting are in line with the policy on determining remuneration and other payments for each member of the board of directors. 84 Table of Contents Remuneration for audit & supervisory board members is determined by the audit & supervisory board within the scope determined by resolution of the shareholders’ meeting.
The board of directors considers that such decisions made by the Executive Compensation Meeting are in line with the policy on determining remuneration and other payments for each member of the board of directors. Remuneration for audit & supervisory board members is determined by the audit & supervisory board within the scope determined by resolution of the shareholders’ meeting.
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.
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.
The following tables set forth a breakdown of persons employed by business segment and by geographic location as of March 31, 2022.
The following tables set forth a breakdown of persons employed by business segment and by geographic location as of March 31, 2023.
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 2021 and February and March 2022 to discuss matters for the Executive Compensation Meetings.
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.
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 2.62% in fiscal 2022.
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.
Individual performance evaluation takes into account various factors such as initiatives in keeping with the spirit of the Toyoda Precepts which set forth Toyota’s founding philosophy, trust from his or her peers and contribution to the promotion of human resources development.
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.
Executive Compensation Meetings were held in May 2021 and March and April 2022 to discuss and determine the amount of remuneration for fiscal 2021 and other relevant matters.
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.
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 85 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 210% 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: ¥22.3 trillion TOPIX: ¥1,903.60 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.
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.
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 in keeping with the spirit of the Toyoda Precepts, 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 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.
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 ¥2,705 million during fiscal 2022. 86 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 ¥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.
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. 88 Table of Contents Toyota does not have a remuneration committee.
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.
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 by referring to the benchmarking result of remuneration for officers of companies located in Japan.
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.
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. Starting fiscal 2022, Toyota introduced the individual performance evaluation for the chairman, vice chairman and president.
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.
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.
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.
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.
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.
Moreover, these individuals should be able to play a significant role in transforming Toyota into a “mobility company” through responding to social transformation by using CASE external partnerships based on trust and friendship and internal two-way interactive teamwork, while working in furtherance of the SDGs, and towards solutions for other social challenges.
Moreover, these individuals should be able to play a significant role in transforming Toyota into a “mobility company” through responding to electrification, intelligence, and diversification and external partnerships based on trust and friendship and internal two-way interactive teamwork, while working towards solutions for social challenges such as the climate change issue.
As of March 31, 2022, 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. 89 Table of Contents Toyota’s board of directors resolves the share compensation within the maximum share compensation amount of 4.0 billion yen per year (also, the total number of Toyota’s shares of common stock to be allotted shall not exceed a maximum of 4 million shares per year in total for eligible members of the board of directors (excluding outside members of the board of directors)) established at the 115th Ordinary General Shareholders’ Meeting held on June 13, 2019 and the 118th Ordinary General Shareholders’ Meeting held on June 15, 2022.
Toyota’s board of directors resolves the share compensation within the maximum share compensation amount of 4.0 billion yen per year (also, the total number of Toyota’s shares of common stock to be allotted shall not exceed a maximum of 4 million shares per year in total for eligible members of the board of directors (excluding outside members of the board of directors)) established at the 115th Ordinary General Shareholders’ Meeting held on June 13, 2019 and the 118th Ordinary General Shareholders’ Meeting held on June 15, 2022.
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.
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.
Directors with Foreign Citizenship (Excluding Outside Members of the Board of Directors) Fixed remuneration and performance-based remuneration are set based on the remuneration levels and structures that allow Toyota to secure and retain talented personnel. Fixed remuneration is set, taking into account each member’s job responsibilities and the remuneration standards of such member’s home country.
Directors with Foreign Citizenship (Excluding Outside Members of the Board of Directors) Fixed remuneration and performance-based remuneration are set based on the remuneration levels and structures that allow Toyota to secure and retain talented personnel.
Therefore, in April 2022, Toyota reorganized the roles of operating officers and reestablished the position of “executive vice president,” defining it as an operating officer who is focused on the business from a management perspective. Based on its basic policy of appointing the right people to the right positions, Toyota has been swiftly and continuously innovating.
Therefore, in April 2022, Toyota reorganized the roles of operating officers and reestablished the position of “executive vice president,” defining it as an operating officer who is focused on the business from a management perspective.
However, members of Toyota’s Executive Compensation Meeting discuss remuneration for members of the board of directors.
Toyota does not have a remuneration committee. However, members of Toyota’s Executive Compensation Meeting discuss remuneration for members of the board of directors.
Toyota’s average number of temporary employees on a consolidated basis was 87,120 during fiscal 2022. 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 2022, see “— Directors and Senior Management.” None of Toyota’s shares of common stock entitles the holder to any preferential voting rights.
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.
The members of the meeting are Takeshi Uchiyamada, the Chairman of the Board of Directors, and Kenta Kon, Ikuro Sugawara, Sir Philip Craven and Teiko Kudo, each, a Member of the Board of Directors. 6.D EMPLOYEES The total number of Toyota employees, on a consolidated basis, was 372,817 as of March 31, 2022, 366,283 as of March 31, 2021 and 361,907 as of March 31, 2020.
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.
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.
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.
Toyota’s Annual Securities Report filed with the Kanto Local Bureau of Finance on June 23, 2022, contained the following information concerning compensation in fiscal 2022 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 118 79 76 (37,000 shares ) — 273 Shigeru Hayakawa, Member of the Board of Directors Toyota Motor Corporation 74 1 81 (39,000 shares ) — 156 Akio Toyoda, Member of the Board of Directors Toyota Motor Corporation 204 0 481 (230,000 shares ) — 685 Koji Kobayashi, Member of the Board of Directors Toyota Motor Corporation 78 0 100 (48,000 shares ) — 178 James Kuffner, Member of the Board of Directors Toyota Motor Corporation 152 100 — — 906 Consolidated subsidiary (Woven Planet Holdings, Inc.*) 642 13 — — * 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 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 will further press forward the tide of such innovations, aiming for a corporate structure capable of carrying out management from a viewpoint that is optimal for a global company.
Based on its basic policy of appointing the right people to the right positions, Toyota has been swiftly and continuously innovating. Toyota will further press forward the tide of such innovations, aiming for a corporate structure capable of carrying out management from a viewpoint that is optimal for a global company.
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. The concept of each item is the same as that for directors with Japanese citizenship (excluding outside members of the board of directors).
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).
As of March 31, 2022, the employee stock ownership association held 74,096,504 shares of Toyota’s common stock. 90 Table of Contents
As of March 31, 2023, the employee stock ownership association held 74,266,923 shares of Toyota’s common stock.
Moreover, these individuals should be able to play a significant role in transforming 83 Table of Contents Toyota into a “mobility company” and contribute to the solutions of social issues, including by contributing to the realization of the SDGs, through responding to social transformation by using CASE external partnerships based on trust and friendship and internal two-way interactive teamwork.
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.
In order to do so, Toyota will continue to create new and unique value with various partners by relentlessly committing towards monozukuri (manufacturing), and by fostering imagination for people and society.
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 order to do so, Toyota will continue to create new and unique value with various partners by relentlessly committing towards monozukuri (manufacturing), and by fostering imagination for people and society.
Masahiko Maeda, who are Members of the Board of Directors, concurrently serve as Operating Officer (Executive Vice President). 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.
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.
The board of directors decides by resolution the policy for determining remuneration for and other payments to each member of the board of directors. Remuneration is effectively linked to corporate performance while reflecting individual job responsibilities and performance. Remuneration standards in each member’s home country are also taken into account when determining remuneration levels and payment methods.
The board of directors decides by resolution the policy for determining remuneration for and other payments to each member of the board of directors. Remuneration is effectively linked to corporate performance while reflecting individual job responsibilities and performance. Remuneration for outside members of the board of directors and audit & supervisory board members consists only of fixed payments.
Toyota maintains its board of directors and senior management at an adequate size, and ensures they are overall balanced and diverse, 77 Table of Contents including from the perspective of gender and nationality.
Toyota maintains its board of directors and senior management at an adequate size, and ensures they are overall balanced and diverse, including from the perspective of gender and nationality. Three outside members of the board of directors have been appointed in order to further reflect the opinions of those from outside the company in management’s decision-making process.
Segment Number of Employees Location Number of Employees Automotive 330,184 Japan 203,948 Financial services 13,140 North America 55,471 All other 24,258 Europe 24,852 Unallocated 5,235 Asia 66,328 Other* 22,218 Total 372,817 Total 372,817 * “Other” consists of Central and South America, Oceania, Africa and the Middle East.
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.
Audit & Supervisory Board Member (External) of Shiseido Company, Limited 1,615 shares 82 Table of Contents Name (Date of Birth) Position Brief Career Summary and Important Concurrent Duties Number of Common Shares 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 (important concurrent duties) Outside Director of Kirin Holdings Company, Limited — 1.
(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.
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 242,040 shares Akio Toyoda (May 3, 1956) President, Member of the Board of Directors 1984 Joined TMC 2000 Member of the Board of Directors of TMC 2002 Managing Director of TMC 2003 Senior Managing Director of TMC 2005 Executive Vice President of TMC 2009 President of TMC (to present) (important concurrent duties) Chairman and CEO of Toyota Motor North America, Inc.
Name (Date of Birth) Position Brief Career Summary and Important Concurrent Duties Number of Common Shares (in thousands) Akio Toyoda (May 3, 1956) Chairman of the Board of Directors 1984 Joined TMC 2000 Member of the Board of Directors of TMC 2002 Managing Director of TMC 2003 Senior Managing Director of TMC 2005 Executive Vice President of TMC 2009 President of TMC 2023 Chairman of TMC (to present) (important concurrent duties) Chairman of TOYOTA FUDOSAN CO., LTD.
Director and Senior Managing Executive Officer of Sumitomo Mitsui Banking Corporation 9,467 shares Haruhiko Kato (July 21, 1952) Full-time Audit & Supervisory Board Member 1975 Joined Ministry of Finance 2007 Director-General of the Tax Bureau, Ministry of Finance 2009 Commissioner of National Tax Agency 2010 Retired from Commissioner of National Tax Agency 2011 Senior Managing Director of Japan Securities Depository Center, Inc. 2011 President of Japan Securities Depository Center, Inc. 2013 Member of the Board of Directors of TMC (to present) 2015 President and CEO of Japan Securities Depository Center, Inc. 2018 Retired as Member of the Board of Directors of TMC 2019 Retired as President and CEO of Japan Securities Depository Center, Inc. 2019 Audit & Supervisory Board Member of TMC (to present) 2019 Retired as Director of Japan Securities Depository Center, Inc. 8,808 shares 81 Table of Contents Name (Date of Birth) Position Brief Career Summary and Important Concurrent Duties Number of Common Shares 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) 47,703 shares 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 27,146 shares Yoko Wake (November 18, 1947) Outside Audit & Supervisory Board Member 1970 Joined the Fuji Bank, Limited 1973 Retired from the same 1977 Assistant Lecturer of Faculty of Business and Commerce of Keio University 1982 Associate Professor of the same 1993 Professor of the same 2011 Outside Audit & Supervisory Board Member of TMC (to present) 2013 Professor Emeritus of Keio University (to present) (important concurrent duties) Professor Emeritus of Keio University — Hiroshi Ozu (July 21, 1949) Outside Audit & Supervisory Board Member 2012 Prosecutor-General 2014 Retired from Prosecutor-General 2014 Registered as Attorney 2015 Outside Audit & Supervisory Board Member of TMC (to present) (important concurrent duties) Attorney Outside Corporate Auditor of Mitsui & Co., Ltd.
(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.
The Executive Compensation Meeting consists of chairman of the board of directors Takeshi Uchiyamada (Chairman), member of the board of directors Kenta Kon (who replaced Koji Kobayashi on June 15, 2022), and outside members of the board of directors Ikuro Sugawara, Sir Philip Craven and Teiko Kudo.
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.
Name (Date of Birth) Position Brief Career Summary and Important Concurrent Duties Number of Common Shares Ryuji Sakai (August 7, 1957) Substitute Audit & Supervisory Board Member 1985 Registered as attorney and joined Nagashima & Ohno 1990 Wilson Sonsini Goodrich & Rosati 1995 Partner of Nagashima & Ohno 2000 Partner of Nagashima Ohno & Tsunematsu (to present) (important concurrent duties) Attorney Outside Audit & Supervisory Board Member of Kobayashi Pharmaceutical Co., Ltd. — 6.B COMPENSATION Decision Making Policy and Process Toyota believes that it is critical to appoint individuals who are capable of contributing to decision-making aimed at sustainable growth into the future in keeping with the spirit of the Toyoda Precepts, which set forth its founding philosophy.
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.
Mr. Akio Toyoda, who is President and Member of the Board of Directors, concurrently serves as Operating Officer (President). 2. Dr. James Kuffner, who is a Member of the Board of Directors, concurrently serves as Operating Officer. 3. Mr. Kenta Kon and Mr.
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.
Three outside members of the board of directors have been appointed in order to further reflect the opinions of those from outside the company in management’s decision-making process. Toyota has six audit & supervisory board members, three of whom are outside audit & supervisory board members.
Toyota has six audit & supervisory board members, four of whom are outside audit & supervisory board members.
The board of directors has the ultimate responsibility for the administration of Toyota’s affairs. 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.
The board of directors has the ultimate responsibility for the administration of Toyota’s affairs.
Removed
Toyota’s mission is “Producing Happiness for All” by expanding the possibilities of people, companies and communities through addressing the 76 Table of Contents challenges of mobility as a mobility company.
Added
In April 2023, the role of operating officers was revised to a management team that implements “product-centered (manufacturing ever-better cars) and region-centered (best-in-town) management” under the theme of “inheritance and evolution,” and the executive vice presidents were selected upon their extensive knowledge and experience from the two pillars of products and regions.
Removed
Set forth below are brief summaries of Toyota’s members of the board of directors and audit & supervisory board members.
Added
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.
Removed
Name (Date of Birth) Position Brief Career Summary and Important Concurrent Duties Number of Common Shares Takeshi Uchiyamada (August 17, 1946) Chairman of the Board of Directors 1969 Joined Toyota Motor Corporation (“TMC”) 1998 Member of the Board of Directors of TMC 2001 Managing Director of TMC 2003 Senior Managing Director of TMC 2005 Executive Vice President of TMC 2012 Vice Chairman of TMC 2013 Chairman of TMC (to present) (important concurrent duties) Director of JTEKT Corporation Director of Mitsui & Co., Ltd. 450,195 shares 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.
Added
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.
Removed
President 2009 Retired from Toyota Motor North America, Inc.
Added
President of Toyota Motor East Japan, Inc. 2019 Chairman of the Board of Toyota Motor East Japan, Inc. 2023 Senior Executive Advisor of Toyota Motor East Japan, Inc.
Removed
Chairman of TOYOTA FUDOSAN CO., LTD. Chairman of the Japan Automobile Manufacturers Association, Inc.
Added
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.
Removed
Director of DENSO Corporation Representative Director of ROOKIE Racing, Inc. 24,077,945 shares 78 Table of Contents Name (Date of Birth) Position Brief Career Summary and Important Concurrent Duties Number of Common Shares James Kuffner (January 18, 1971) Member of the Board of Directors, Operating Officer 1999 Postdoctoral Research Fellow at the Japan Society for the Promotion of Science 2002 Research Scientist of the Robotics Institute at Carnegie Mellon University 2005 Assistant Professor of the Robotics Institute at Carnegie Mellon University 2008 Associate Professor of the Robotics Institute at Carnegie Mellon University 2009 Research Scientist at Google Inc. 2013 Engineering Director of Google Inc. 2016 Chief Technology Officer of Toyota Research Institute, Inc. 2018 Chief Executive Officer of Toyota Research Institute - Advanced Development, Inc. 2018 Executive Advisor at Toyota Research Institute, Inc. 2020 Senior Fellow at TMC 2020 Member of the Board of Directors, Operating Officer of TMC (to present) 2021 Toyota Research Institute - Advanced Development, Inc. changed its corporate name to Woven Core, Inc. and was reorganized into the Woven Planet Group. 2021 Chief Executive Officer and Representative Director of Woven Planet Holdings, Inc.
Added
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.
Removed
(to present) (important concurrent duties) Chief Executive Officer and Representative Director of Woven Planet Holdings, Inc. Representative Director of Woven Core, Inc. President and Representative Director of Woven Alpha, Inc.
Added
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.
Removed
Director of Joby Aviation, Inc. 2,970 shares Kenta Kon (August 2, 1968) Member of the Board of Directors, Operating Officer, Executive Vice President 1991 Joined TMC 2018 Managing Officer of TMC 2019 Operating Officer of TMC 2021 Member of the Board of Directors, Operating Officer of TMC 2022 Member of the Board of Directors, Operating Officer, Executive Vice President of TMC (to present) 34,944 shares 79 Table of Contents Name (Date of Birth) Position Brief Career Summary and Important Concurrent Duties Number of Common Shares Masahiko Maeda (February 10, 1969) Member of the Board of Directors, Operating Officer, Executive Vice President 1994 Joined TMC 2018 Managing Officer of TMC 2019 Operating Officer of TMC 2019 Chairman and President of Toyota Daihatsu Engineering & Manufacturing Co., Ltd. 2022 Operating Officer, Executive Vice President of TMC 2022 Member of the Board of Directors, Operating Officer, Executive Vice President of TMC (to present) (important concurrent duties) Representative Director of Woven Planet Holdings, Inc.
Added
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.
Removed
(to present) (important concurrent duties) Director Senior Managing Executive Officer of Sumitomo Mitsui Financial Group, Inc.
Added
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.
Removed
Set forth below is a brief summary of Toyota’s substitute audit & supervisory board member.
Added
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.
Removed
Remuneration for outside members of the board of directors and audit & supervisory board members consists only of fixed payments. As a result, this remuneration is not readily impacted by business performance, helping to ensure independence from management.
Added
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.
Added
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.
Added
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).
Added
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.
Added
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.

Item 7. Management's Discussion & Analysis

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

11 edited+2 added−0 removed9 unchanged
Biggest changeToyota 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.
Biggest changeToyota 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 decided 91 Table of Contents to do so in order to create an environment in which Toyota shares are more accessible to a broader base of investors by reducing the price per investment unit.
Toyota decided to do so in order to create an environment in which Toyota shares are more accessible to a broader base of investors by reducing the price per investment unit.
Toyota sold products and services, among others, to these associates and joint ventures entities in the amount of ¥2,362.3 billion in fiscal 2022. 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 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.
As of March 31, 2022, an aggregate amount of ¥185.5 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, 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.
Toyota purchased materials, supplies and services, among others, from these associates and joint ventures in the amount of ¥7,947.0 billion in fiscal 2022. 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 ¥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.
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 8.68 According to The Bank of New York Mellon, depositary for Toyota’s ADSs (the “Depositary”), as of March 31, 2022, 295,944,975 shares of Toyota’s common stock were held in the form of ADSs and there were 1,766 ADS holders of record and 431,983 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 8.81 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.
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.
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.
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.
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, 2022, there were 813,254 holders of common stock of record worldwide. As of March 31, 2022, there were 479 record holders of Toyota’s common stock with addresses in the United States, whose shareholdings represented approximately 10.2% of the issued common stock on that date.
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.
Toyota had outstanding trade accounts and other receivables by these associates and joint ventures in the amount of ¥366.4 billion as of March 31, 2022. Toyota had outstanding trade accounts and other payables to these associates and joint ventures in the amount of ¥1,091.5 billion as of March 31, 2022.
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.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 7.A MAJOR SHAREHOLDERS As of March 31, 2022, 16,314,987,460 shares of Toyota’s common stock (of which 2,536,685,916 shares were treasury stock and 13,778,301,544 shares were outstanding) were issued.
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.
Added
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.
Added
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