As filed with the U.S. Securities and Exchange Commission on June 30, 2023

UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 20-F(Mark One)‘ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: March 31, 2023
OR
‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
‘ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 001-14948

TOYOTA JIDOSHA KABUSHIKI KAISHA(Exact name of registrant as specified in its charter)

TOYOTA MOTOR CORPORATION(Translation of registrant’s name into English)
Japan(Jurisdiction of incorporation or organization)

1 Toyota-cho, Toyota City
Aichi Prefecture 471-8571
Japan+81 565 28-2121(Address of principal executive offices)
Yoshihide Moriyama
Telephone number: +81 565 28-2121
Facsimile number: +81 565 23-5800
Address: 1 Toyota-cho, Toyota City, Aichi Prefecture 471-8571, Japan(Name, telephone, e-mail and/or facsimile number and address of registrant’s contact person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)Name of each exchange on which registered

American Depositary Shares*
TM
The New York Stock Exchange
Common Stock*** Each American Depositary Share representing ten shares of the registrant’s Common Stock.
** No par value. Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the U.S. Securities and Exchange
Commission.
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:
13,565,179,729 shares of common stock (including 292,036,035 shares of common stock in the form of American Depositary Shares) as of March 31, 2023
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act:Yes È No ‘
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934:
Yes ‘ No È
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:Yes È No ‘
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files):Yes È No ‘
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of“large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer È

Accelerated filer ‘

Non-accelerated filer ‘
Emerging growth company ‘

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the
Exchange Act:‘† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification
after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
È
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect thecorrection of an error to previously issued financial statements.
‘
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of theregistrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
‘Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ‘
International Financial Reporting Standards as issued by the International Accounting Standards Board È
Other ‘If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow:
Item 17 ‘ Item 18 ‘
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):Yes ‘ No ÈTABLE OF CONTENTSITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS . . . . . . . . . .

1

ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

ITEM 3.

KEY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1[RESERVED] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CAPITALIZATION AND INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
REASONS FOR THE OFFER AND USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . .
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1
1
1
1

INFORMATION ON THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

4.A
4.B
4.C
4.D

HISTORY AND DEVELOPMENT OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . .
BUSINESS OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ORGANIZATIONAL STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PROPERTY, PLANTS AND EQUIPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7
7
65
66

ITEM 4A.

UNRESOLVED STAFF COMMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

67

ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS . . . . . . . . . . . . . . . . . . . .

67

OPERATING RESULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LIQUIDITY AND CAPITAL RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES . . . . . . . . . . . . . . . . .
TREND INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CRITICAL ACCOUNTING ESTIMATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

67
91
94
97
97

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES . . . . . . . . . . . . . . . . . . . .

97

DIRECTORS AND SENIOR MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BOARD PRACTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SHARE OWNERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

97
105
109
111
111

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS . . . . . . . . . . . .

113

MAJOR SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
RELATED PARTY TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
INTERESTS OF EXPERTS AND COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

113
114
114

FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

114

CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION . . . . .
SIGNIFICANT CHANGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

114
116

THE OFFER AND LISTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

116

9.A
9.B
9.C
9.D
9.E
9.F

LISTING DETAILS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MARKETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SELLING SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DILUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXPENSES OF THE ISSUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

116
117
117
117
117
117

ITEM 10.

ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

117

SHARE CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MEMORANDUM AND ARTICLES OF ASSOCIATION . . . . . . . . . . . . . . . . . . . . . . . . .
MATERIAL CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXCHANGE CONTROLS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

117
117
124
124
128

3.A
3.B
3.C
3.D
ITEM 4.

5.A
5.B
5.C
5.D
5.E
ITEM 6.
6.A
6.B
6.C
6.D
6.E
ITEM 7.
7.A
7.B
7.C
ITEM 8.
8.A
8.B
ITEM 9.

10.A
10.B
10.C
10.D
10.E

10.F
10.G
10.H
10.I
10.J

DIVIDENDS AND PAYING AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
STATEMENT BY EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DOCUMENTS ON DISPLAY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SUBSIDIARY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ANNUAL REPORT TO SECURITY HOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

134
134
134
135
135

ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK . . .

135

ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES . . . . . . . . . . .

135

12.A
12.B
12.C
12.D

DEBT SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
WARRANTS AND RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
OTHER SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
AMERICAN DEPOSITARY SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135

ITEM 13.

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES . . . . . . . . . . . . . . . .

137

ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

137

ITEM 15.

CONTROLS AND PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

137

ITEM 16.

[RESERVED] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

138

ITEM 16A.

AUDIT COMMITTEE FINANCIAL EXPERT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

138

ITEM 16B.

CODE OF ETHICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

138

ITEM 16C.

PRINCIPAL ACCOUNTANT FEES AND SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . .

139

ITEM 16D.

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES . . .

140

ITEM 16E.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
PURCHASERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

140

ITEM 16F.

CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT . . . . . . . . . . . . . . . . . . .

141

ITEM 16G.

CORPORATE GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

141

ITEM 16H.

MINE SAFETY DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

144

ITEM 16I.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENTINSPECTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

144

ITEM 17.

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

145

ITEM 18.

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

145

ITEM 19.

EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

146

As used in this annual report, the term “fiscal” preceding a year means the twelve-month period ended
March 31 of the year referred to. All other references to years refer to the applicable calendar year unless thecontext otherwise requires. Unless the context otherwise requires or as otherwise expressly stated, references inthis prospectus supplement to “Toyota,” “TMC,” “we,” “us,” “our” and similar terms refer to Toyota Motor
Corporation and its consolidated subsidiaries, as a group.
Toyota’s consolidated financial statements in this annual report have been prepared in accordance with
International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board(“IASB”). The term “IFRS” also includes International Accounting Standards (“IASs”) and the related
interpretations of the interpretations committees (SIC and IFRIC).
CAUTIONARY STATEMENT WITH RESPECT TO FORWARD-LOOKING STATEMENTS
Written forward-looking statements may appear in documents filed with the SEC, including this annual
report, documents incorporated by reference, reports to shareholders and other communications.
The U.S. Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking
information to encourage companies to provide prospective information about themselves without fear of
litigation so long as the information is identified as forward-looking and is accompanied by meaningful
cautionary statements identifying important factors that could cause actual results to differ materially from thoseprojected in the information. Toyota relies on this safe harbor in making forward-looking statements.
Forward-looking statements appear in a number of places in this annual report and include statements
regarding Toyota’s current intent, belief, targets or expectations or those of its management. In many, but not allcases, words such as “aim,” “anticipate,” “believe,” “estimate,” “expect,” “hope,” “intend,” “may,” “plan,”“predict,” “probability,” “risk,” “should,” “will,” “would,” and similar expressions, are used as they relate to
Toyota or its management, to identify forward-looking statements. These statements reflect Toyota’s current
views with respect to future events and are subject to risks, uncertainties and assumptions. Should one or more ofthese risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may varymaterially from those which are anticipated, aimed at, believed, estimated, expected, intended or planned.
Forward-looking statements are not guarantees of future performance and involve risks and uncertainties.
Actual results may differ from those in forward-looking statements as a result of various factors. Importantfactors that could cause actual results to differ materially from estimates or forecasts contained in the forwardlooking statements are identified in “Risk Factors” and elsewhere in this annual report, and include, among
others:(i) changes in economic conditions, market demand, and the competitive environment affecting theautomotive markets in Japan, North America, Europe, Asia and other markets in which Toyota operates;(ii) fluctuations in currency exchange rates (particularly with respect to the value of the Japanese yen,
the U.S. dollar, the euro, the Australian dollar, the Canadian dollar and the British pound), stock prices andinterest rates;(iii) changes in funding environment in financial markets and increased competition in the financial
services industry;(iv) Toyota’s ability to market and distribute effectively;(v) Toyota’s ability to realize production efficiencies and to implement capital expenditures at thelevels and times planned by management;(vi) changes in the laws, regulations and government policies in the markets in which Toyota operates
that affect Toyota’s automotive operations, particularly laws, regulations and government policies relating
to vehicle safety including remedial measures such as recalls, trade, environmental protection, vehicle
emissions and vehicle fuel economy, as well as changes in laws, regulations and government policies that
affect Toyota’s other operations, including the outcome of current and future litigation and other legal
proceedings, government proceedings and investigations;

(vii) political and economic instability in the markets in which Toyota operates;(viii) Toyota’s ability to timely develop and achieve market acceptance of new products that meetcustomer demand;(ix) any damage to Toyota’s brand image;(x) Toyota’s reliance on various suppliers for the provision of supplies;(xi) increases in prices of raw materials;(xii) Toyota’s reliance on various digital and information technologies, as well as information security;(xiii) fuel shortages or interruptions in electricity, transportation systems, labor strikes, work stoppages
or other interruptions to, or difficulties in, the employment of labor in the major markets where Toyota
purchases materials, components and supplies for the production of its products or where its products areproduced, distributed or sold;(xiv) the impact of natural calamities, epidemics, political and economic instability, fuel shortages orinterruptions in social infrastructure, wars, terrorism and labor strikes, including their negative effect on
Toyota’s vehicle production and sales;(xv) the impact of climate change and the transition towards a low-carbon economy; and(xvi) the ability of Toyota to hire or retain sufficient human resources.

PART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
ITEM 3. KEY INFORMATION
3.A [RESERVED]
3.B CAPITALIZATION AND INDEBTEDNESS
Not applicable.
3.C REASONS FOR THE OFFER AND USE OF PROCEEDS
Not applicable.
3.D RISK FACTORS
Industry and Business Risks
The worldwide automotive market is highly competitive.
The worldwide automotive market is highly competitive. Toyota faces intense competition from automotive
manufacturers in the markets in which it operates. 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.
Factors affecting competition include product quality and features, safety, reliability, fuel economy, the amountof time required for innovation and development, pricing, customer service, financing terms and tax credits orother government policies in various countries. 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 ofoperations. 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 befundamental to its future success in existing and new markets and to maintain its market share. There can be noassurances 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.
Demand for vehicles depends to a large extent on economic, social and political conditions in a given market andthe 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.
Reviewing the world economy for fiscal 2023, energy prices soared due to geopolitical tensions, and the risein 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. 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 aswell as components shortages, the production cuts eased toward the second half of the fiscal year.
1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 beyond Toyota’s expectations. Demand may also be affected byfactors directly impacting vehicle price or the cost of purchasing and operating vehicles such as sales andfinancing incentives, prices of raw materials and parts and components, cost of fuel and governmental
regulations (including tariffs, import regulation and other taxes). Volatility in demand may lead to lower vehicle
unit sales, which may result in downward price pressure and adversely affect Toyota’s financial condition andresults of operations.
Toyota’s future success depends on its ability to offer new, innovative and competitively priced products thatmeet customer demand on a timely basis.
Meeting customer demand by introducing attractive new vehicles and reducing the amount of time requiredfor product development are critical to automotive manufacturers. In particular, it is critical to meet customer
demand with respect to quality, safety, reliability and sustainability. 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. There is no assurance, however, that Toyota will adequately andappropriately respond to changing customer preferences and demand with respect to quality, safety, reliability,
styling, sustainability and other features in a timely manner. Even if Toyota succeeds in perceiving customer
preferences and demand, there is no assurance that Toyota will be capable of developing and manufacturing new,price competitive products in a timely manner with its available technology, intellectual property, sources of raw
materials and parts and components, and production capacity, including cost reduction capacity. Further, there is
no assurance that Toyota will be able to offer new products or implement capital expenditures at the level andtimes 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 with respect toquality, safety, reliability, styling, sustainability and other features 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 andresults of operations.
Toyota’s ability to market and distribute effectively is an integral part of Toyota’s successful sales.
Toyota’s success in the sale of vehicles depends on its ability to market and distribute effectively based on
distribution networks and sales techniques tailored to the needs of its customers. There is no assurance that
Toyota will be able to develop sales techniques and distribution networks that effectively adapt to changing
customer preferences or changes in the geopolitical and regulatory environment in the major markets in which it
operates. 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 andreputation.
In the highly competitive automotive industry, it is critical to maintain and develop a brand image andreputation. 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 productsthat 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.
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 thatcause reputational damage. For example, on March 4, 2022, Hino Motors, Ltd. (“Hino”), a consolidated2

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. (“Daihatsu”), a consolidated subsidiary of Toyota, confirmed andannounced 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. Informationon the Company — 4.B Business Overview — Selected Initiatives” for further discussion of these and related
matters. In addition, actual or perceived failures on the part of Toyota or its suppliers to contribute tosustainability or to meet certain sustainability-related goals or objectives, including those relating to climatechange or the protection of human rights in Toyota’s supply chain, may also harm Toyota’s reputation. Any
insufficient measures taken by the Toyota group or its suppliers to maintain and develop Toyota’s brand image
and reputation may have an adverse effect on Toyota’s financial condition and results of operations.
Toyota relies on suppliers for the provision of certain supplies including parts, components and raw materials.
Toyota purchases supplies including parts, components and raw materials from a number of external
suppliers located around the world. For some supplies, Toyota relies on a single supplier or a limited number ofsuppliers, whose replacement with another supplier may be difficult. Inability to obtain supplies from a single orlimited source supplier may result in difficulty obtaining supplies and may restrict Toyota’s ability to produce
vehicles. Furthermore, even if Toyota were to rely on a large number of suppliers, first-tier suppliers with whom
Toyota directly transacts may in turn rely on a single second-tier supplier or limited second-tier suppliers.
Irrespective of the number of suppliers, Toyota’s ability to continue to obtain supplies from its suppliers in atimely and cost-effective manner is subject to a number of factors, some of which are not within Toyota’s
control. These factors include the ability of Toyota’s suppliers to provide a continued source of supply, andToyota’s ability to effectively compete and obtain competitive prices from suppliers. Circumstances that may
adversely affect such abilities include geopolitical tensions as well as related governmental actions such as
economic sanctions.
A loss of any single or limited source supplier, or inability to obtain supplies from suppliers in a timely andcost-effective manner, could lead to increased costs or delays or suspensions in Toyota’s production anddeliveries, which could have an adverse effect on Toyota’s financial condition and results of operations.
The worldwide financial services industry is highly competitive.
The worldwide financial services industry is highly competitive. Increased competition in automobile
financing may lead to decreased margins. A decline in Toyota’s vehicle unit sales, an increase in residual value
risk due to lower used vehicle prices, an increase in the ratio of credit losses and increased funding costs are
additional factors which may impact Toyota’s financial services operations. 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.
Toyota depends on various information technology networks and systems, some of which are managed bythird parties, to process, transmit and store electronic information, including sensitive data, and to manage or
support a variety of business processes and activities, including manufacturing, research and development,
supply chain management, sales and accounting. In addition, Toyota vehicles may rely on various digital andinformation technologies, including information service and driving assistance functions.
Despite security measures, Toyota’s digital and information technology networks and systems may bevulnerable to damage, disruptions, shutdowns due to unauthorized access or attacks by hackers, computer3

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. In particular, cyber-attacks or other intentional
malfeasance are increasing in terms of intensity, sophistication and frequency, and Toyota has been and expects
to continue to be the subject of such attacks. Such attacks have, in some cases, and could again disrupt criticaloperations, 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 underapplicable laws, which could have an adverse effect on Toyota’s brand image and its financial condition andresults of operations. Moreover, similar attacks on Toyota’s suppliers and business partners have had, and may inthe future have, a similar negative impact on Toyota.
Toyota is exposed to risks associated with climate change, including the physical risks of climate change andrisks from the transition to a lower-carbon economy.
Risks associated with climate change are subject to increasing societal, regulatory and political focus in
Japan and globally. These risks include the physical risks of climate change and risks from the transition to alower-carbon economy.
The physical risks of climate change include both acute, event-driven risks such as those relating tohurricanes, floods and tornadoes, as well as longer-term weather patterns and related effects, such as sustained
higher temperatures, sea level rise, drought and increased wildfires. Despite Toyota’s contingency planning,large-scale disasters due to extreme weather conditions have in the past harmed, and may in the future again
harm, Toyota’s employees or its facilities and other assets, as well as those of Toyota’s suppliers and otherbusiness partners, thereby adversely affecting Toyota’s production, sales or other operational capacities. Largescale disasters may also adversely affect the financial condition of Toyota’s customers, and thereby demand forits products and services.
Transition risks are those attributable to regulatory, technological and market changes to address the
mitigation of, or adaptation to, climate-related risks. For example, Toyota is subject to the risk of changes incustomer demand for vehicles due to such factors as changes in laws, regulations and government policies
relating to climate change, technological innovation to address climate change, and new entrants into theautomobile industry that seek to capitalize on changing market dynamics. Changes in customer demand may
pose ancillary risks and challenges, such as Toyota’s having to establish new, or enhance existing, supply
networks in order to source the raw materials, parts and components necessary for it to manufacture the products
then in demand at desired volumes and at competitive costs. Toyota may incur significant costs and expenses as aresult of the materialization of such risks, or in its efforts to mitigate or adapt to such risks. Toyota’s inability todevelop and offer products that meet customers’ preferences and demand in a timely manner could result in alower 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. Business Overview — Climate Change-related Disclosures.”
Furthermore, Toyota has published disclosures on climate-change related matters relating to its business andits partners. Such disclosures include forward-looking statements based on Toyota’s expectations andassumptions, involving substantial discretion and forecasts about costs and future circumstances, which may
prove to be incorrect. 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. As a result, Toyota may not be able to meet its goals, including those set forthin this annual report, on expected timing or at all, or within expected costs.
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internal controls and other internal procedures. Toyota’s ability to achieve its climate-related goals, which are tobe 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 andpolicy, the pace of technological change and innovation, and the actions of Toyota’s customers and competitors.
Any failure, or perceived failure, by Toyota to achieve its climate-change related goals, including those set forthin 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.
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. 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.
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 tofluctuations 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. Toyota’s consolidated financial statements, which arepresented in Japanese yen, are affected by foreign currency exchange fluctuations through translation risk, andchanges in foreign currency exchange rates may also affect the price of products sold and materials purchased by
Toyota in foreign currencies through transaction risk. In particular, strengthening of the Japanese yen against the
U.S. dollar can have an adverse effect on Toyota’s operating results.
Toyota believes that its use of certain derivative financial instruments including foreign exchange forward
contracts and interest rate swaps and increased localized production of its products have reduced, but noteliminated, the effects of interest rate and foreign currency exchange rate fluctuations. 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. Operating and Financial Review andProspects — 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.
Increases in raw materials prices that Toyota and Toyota’s suppliers use in manufacturing their products orparts 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. 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 toabsorb such costs. 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.
Should the world economy suddenly deteriorate, a number of financial institutions and investors will facedifficulties in providing capital to the financial markets at levels corresponding to their own financial capacity,5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. If Toyota is unable to raise the necessary capital under appropriate
conditions on a timely basis, Toyota’s financial condition and results of operations may be adversely affected.
Regulatory, Legal, Political and Other Risks
The automotive industry is subject to various governmental regulations and actions.
The worldwide automotive industry is subject to various laws and governmental regulations including thoserelated to vehicle safety and environmental matters such as emission levels, fuel economy, noise and pollution. In
particular, automotive manufacturers such as Toyota are required to implement safety measures such as recallsfor vehicles that do not or may not comply with the safety standards of 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. If Toyota launches products that result in safetymeasures 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.
Furthermore, the failure to comply with such regulations could result in legal proceedings, recalls, negotiatedremedial 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 inconnection with the misconduct that Hino engaged in relating to emissions and fuel efficiency testing. See “Item4. Information on the Company — 4.B Business Overview — Selected Initiatives.” Toyota has incurredsignificant 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. 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 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,” aswell 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. Toyota is in factcurrently 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. 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, fuelshortages or interruptions in social infrastructure, wars, terrorism and labor strikes.
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. Disruptions,delays and other adverse changes in the operations of Toyota’s business have ensued from such risksmaterializing in the past. Should the major markets in which Toyota purchases materials, parts and components
6and supplies for the manufacture of Toyota products or in which Toyota’s products are produced, distributed orsold 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.
ITEM 4. INFORMATION ON THE COMPANY
4.A HISTORY AND DEVELOPMENT OF THE COMPANY
Toyota Motor Corporation is a limited liability, joint-stock company incorporated under the Commercial
Code of Japan and continues to exist under the Companies Act of Japan (the “Companies Act”). Toyota
commenced operations in 1933 as the automobile division of Toyota Industries Corporation (formerly Toyoda
Automatic Loom Works, Ltd.). Toyota became a separate company in August 1937. In 1982, the Toyota Motor
Company and Toyota Motor Sales merged into one company, the Toyota Motor Corporation of today. As of
March 31, 2023, Toyota operated through 569 consolidated subsidiaries (including structured entities) and 168
associates and joint ventures accounted for by the equity method.
See “Item 4. Information on the Company — 4.B Business Overview — Capital Expenditures andDivestitures” for a description of Toyota’s principal capital expenditures and divestitures between April 1, 2020
and March 31, 2023 and information concerning Toyota’s principal capital expenditures and divestitures
currently in progress.
Toyota’s principal executive offices are located at 1 Toyota-cho, Toyota City, Aichi Prefecture 471-8571,
Japan. Toyota’s telephone number in Japan is +81-565-28-2121.
The SEC maintains a website (https://www.sec.gov/) that contains reports, proxy and information
statements, and other information regarding issuers that file electronically with the SEC. Toyota also maintains a
website (https://global.toyota/en/) through which its annual reports on Form 20-F and certain of its other SEC
filings may be accessed. Information contained on or accessible through Toyota’s website is not part of thisannual report on Form 20-F.
4.B BUSINESS OVERVIEW
Toyota primarily conducts business in the automotive industry. Toyota also conducts business in financeand other industries. Toyota sold 8,822 thousand vehicles in fiscal 2023 on a consolidated basis. Toyota had sales
revenues of ¥37,154.2 billion and net income attributable to Toyota Motor Corporation of ¥2,492.9 billion in
fiscal 2023.
Toyota’s business segments are automotive operations, financial services operations and all otheroperations. The following table sets forth Toyota’s sales to external customers in each of its business segments
for each of the past three fiscal years.
Yen in millions
Year Ended March 31,
2021
2022
2023

Automotive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,597,846
2,137,195
479,553

28,531,993
2,306,079
541,436

33,776,870
2,786,679
590,749

Toyota’s automotive operations include the design, manufacture, assembly and sale of passenger vehicles,
minivans and commercial vehicles such as trucks and related parts and accessories. 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

through the purchase of installment and lease contracts originated by Toyota dealers. Related to Toyota’s
automotive operations, Toyota is working towards having all of its vehicles become connected vehicles, creating
new value and reforming businesses by utilizing big data obtained from those connected vehicles, andestablishing new mobility services. Toyota’s all other operations business segment includes the information
technology related businesses including a web portal for automobile information called GAZOO.com.
Toyota sells its vehicles in approximately 200 countries and regions. Toyota’s primary markets for its
automobiles are Japan, North America, Europe and Asia. The following table sets forth Toyota’s sales to externalcustomers in each of its geographical markets for each of the past three fiscal years.
Yen in millions
Year Ended March 31,
2021
2022
2023

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,587,193
9,325,950
2,968,289
4,555,897
1,777,266

8,214,740
10,897,946
3,692,214
5,778,115
2,796,493

9,122,282
13,509,027
4,097,537
7,076,922
3,348,530* “Other” consists of Central and South America, Oceania, Africa and the Middle East.
During fiscal 2023, 23.5% of Toyota’s automobile unit sales on a consolidated basis were in Japan, 27.3%
were in North America, 11.7% were in Europe and 19.8% were in Asia. The remaining 17.7% of consolidated
unit sales were in other markets.
The Worldwide Automotive Market
Toyota estimates that annual worldwide vehicle sales totaled approximately 81 million units in 2022.
Automobile sales are affected by a number of factors including:•social, political and economic conditions;•introduction of new vehicles and technologies;•

costs incurred by customers to purchase and operate automobiles; and•the availability of parts and components that Toyota needs to manufacture its products.

These factors can cause consumer demand to vary substantially from year to year in different geographic
markets and in individual categories of automobiles.
Looking at the global economy in fiscal 2023, the global economy turned toward recovery from the impact
of COVID-19, but the pace of recovery remained slow due to downward pressure on the economy resulting fromhigh resource prices and rising interest rates stemming from the Ukraine crisis and other factors.
In the automobile market, the global strains in supply and demand for semiconductors and the supply
shortage of parts continued to force production constraints on a worldwide scale. However, the impact of the
production cuts eased toward the second half of the fiscal year.
Looking at the economies of major countries, in the United States, domestic demand continued to be firm
due to a favorable employment and income environment and economic stimulus measures, but decelerated due toa shift to monetary tightening in order to control overheating inflation. Europe was most affected by theheightened geopolitical tensions since February 2022, and inflation and high interest rates continued against the8backdrop of high energy prices and labor shortages. As a consequence, the economy was sluggish. In Japan, theeconomy has been steady due to the normalization from the economic effects of the COVID-19 pandemic, as
well as the effects of wage increases. In China, economic activity stagnated due to the zero-coronavirus policy
accompanying the resurgence of COVID-19; China’s economic growth slowed in 2022. In Emerging countries,
the economy has started to recover, following those in developed countries, but some emerging countries, such as
Brazil, saw some slowdown in consumption due to rising interest rates and increased inflation.
Amid this environment, the automobile market faced a global year-on-year decline in 2022, making it adifficult year.
In North America, new vehicle sales were approximately 16.60 million units, a decrease from the previous
year. In Europe, new vehicle sales also decreased from the previous year at approximately 14.90 million units.
Sanctions from Western nations and their withdrawal from Russian-related businesses progressed, causing theRussian market to fall sharply year-on-year. In Asia (including India but excluding Japan and China), newvehicle unit sales increased from the previous year to approximately 10.80 million units. The share of eachmarket across the globe, which Toyota estimates based on the available automobile sales data in each country
and region information, was 30% for China, 21% for North America (20% excluding Mexico and Puerto Rico),
19% for Europe and 13% for Asia. In China, new vehicle sales decreased from the previous year to
approximately 24.70 million units.
In the medium- to long-term, Toyota expects the automotive market to continue growing driven principallyby growth in China and other emerging countries. However, global competition is expected to be severe, as thepace 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 tocarbon neutrality and the strengthening of various regulations in line with such awareness.
The worldwide automotive industry is affected significantly by government regulations aimed at reducing
harmful effects on the environment, enhancing vehicle safety and improving fuel economy. These regulations
have added to the cost of manufacturing vehicles. Many governments also mandate local procurement of partsand components and impose tariffs and other trade barriers, as well as price or exchange controls as a means ofcreating jobs, protecting domestic producers or influencing their balance of payments. Changes in regulatory
requirements and other government-imposed restrictions can limit or otherwise burden an automaker’s
operations. Government laws and regulations can also make it difficult to repatriate profits to an automaker’s
home country.
The development of the worldwide automotive market includes the continuing globalization of automotive
operations. Manufacturers seek to achieve globalization by localizing the design and manufacture of automobiles
and their parts and components in the markets in which they are sold. By expanding production capabilities
beyond their home markets, automotive manufacturers are able to reduce their exposure to fluctuations in foreignexchange rates, as well as to trade restrictions and tariffs.
Over the years, there have been many global business alliances and investments entered into between
manufacturers in the global automotive industry. There are various reasons behind these transactions including
the need to address excessive global capacity in the production of automobiles, and the need to reduce costs andimprove efficiency by increasing the number of automobiles produced using common vehicle platforms and by
sharing research and development expenses for environmental and other technology, the desire to expand acompany’s global presence through increased size; and the desire to expand into particular segments orgeographic markets.
Toyota believes that its research and development initiatives, particularly the development ofenvironmentally friendly new vehicle technologies, vehicle safety and information technology, provide it with astrategic advantage.
9

Toyota Philosophy
The automotive industry is experiencing a once-in-a-century transformation. We are now striving totransform ourselves into a mobility company. In an era which it is hard to predict the future, Toyota has reflectedon the path it has taken thus far and has formulated the “Toyota Philosophy” as a roadmap for the future.
Toyota’s mission is “Producing Happiness for All” by expanding the possibilities of people, companies andcommunities through addressing the challenges of mobility as a mobility company. In order to do so, Toyota willcontinue to create new and unique value with various partners by relentlessly committing towards monozukuri(manufacturing), and by fostering imagination for people and society.

Producing Happiness for All
MISSION Using our technology, we work towards a future ofconvenience and happiness, available to all

VISION

Creating Mobility for All
Toyota strives to raise the quality and availability ofmobility so that individuals, businesses, municipalities
and communities can do more, while achieving asustainable relationship with our planet

VALUE

We unite our three strengths (Software, Hardware andPartnerships) to create new and unique value thatcomes 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, andKiichiro 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 ahuman 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 “eachprocess produces only what is needed for the next process in a continuous flow.” Based on the basic philosophiesof jidoka and JIT, through TPS, Toyota aims to efficiently and quickly produce vehicles of sound quality, one ata time, to fully satisfy customer requirements.
Toyota believes that improving upon TPS is essential to its future survival. Currently, TPS is being
introduced into development departments and administrative departments. Toyota intends to apply TPS to its
development departments so that it can be used not only to shorten development times and reduce costs, but also
to develop our human resources, thus leading to the manufacturing of ever-better cars that customers will love.
Selected Initiatives
We made a New Management Policy & Direction Announcement on April 7, 2023. Our new management
structure’s theme is “inheritance and evolution.” The most important value we have cultivated is “Let’s make10

ever-better cars!” While talking about cars on the front lines and striving hard to bring smiles to customers’
faces, we continue to pursue ever-better cars. Together with the 370,000 employees of the Toyota group aroundthe world, our suppliers, and our dealers, we all make cars together. Car-making is a team effort. We will
accelerate the taking on of challenges for the future, with a new management style of “simultaneously andorganically working as a team.”Aiming for the Future
We aim to transform into a mobility company. Toyota’s mission is “Producing happiness for all.” For cars
to continue being a necessary part of society, we need to change the future of the car. For that, there are two
major themes, “carbon neutrality” and “expanding the value of mobility.”
Carbon Neutrality
We are fully committed to achieving carbon neutrality in 2050 over the entire life cycle of our vehicles.
When it comes to car manufacturing, we will continue to pursue a variety of options, based on a multi-pathway
solutions, to stay close to the future of energy and the realities of each region.
First, we will thoroughly implement whatever electrification we can do immediately. We will strengthen
sales of hybrid electric vehicles (“HEVs”), including in emerging markets, and increase our number of plug-in
hybrid electric vehicle options (“PHEVs”). We will expand our lineup of battery electric vehicles (“BEVs”),
which represent one important option, over the next several years. We will do our utmost to develop BEVs andcreate new business models.
We will also accelerate projects for the realization of the hydrogen society that we believe lies just beyond
the BEV era. With partners across industries and countries, we will advance the expansion of the realm ofhydrogen usage by such means as social implementation in Thailand and Fukushima, the mass production ofcommercial fuel cell electric vehicles (“FCEVs”), and the development of hydrogen engine technologies in thearena of motorsports. Furthermore, we will work with the energy industry to develop technologies for carbonneutral fuels, including next-generation biofuels and synthetic fuels.
We will work to promote electrified vehicles and reduce CO2 emissions while leaving no one behind,including in emerging markets. Through this all-direction approach, we aim to reduce average CO2 emissions forvehicles we sell worldwide by 33% or greater by 2030 and by 50% or greater by 2035 compared to 2019. We
will continue to promote decarbonization globally and steadily toward 2050.
Expanding the Value of Mobility
The cars of the future will become more connected to society as they become more electrified, intelligent,and diversified. In addition to moving people’s hearts and emotions and moving people and goods, we will gather
the movements of energy and information and link them together as one through data. By doing so, we will beable to provide seamless mobility experiences that are connected with other mobilities, as well as provide newvalue for cars as part of the social infrastructure. Cars connected to society will also be closely connected tovarious services that support people’s daily lives, such as telecommunications and finance, expanding the circleof new value-added services centered on mobility.
Toyota Mobility Concept
We have developed “Toyota Mobility Concept” as our vision of the mobility society that we are aiming for.
Evolving the car to be more useful to society based on its essential values that have been cultivated over time,such as safety, security, and being fun to drive — to strive toward such a future, we will continue ourtransformation into a mobility company in following three domains.
11The first is “Mobility 1.0.” What we aim for in this is to expand the value of the car by connecting various
types of movement. For example, BEVs offer new mobility possibilities for the transport of electricity.
Collectively serving as an energy grid, BEVs can enhance the energy security of society. That is the kind of rolethat BEVs can also fulfill. Also, intelligence can evolve cars even further by utilizing information gathered fromcars and customers. Our software platform Arene holds the key to this new kind of car-making. Connecting thelatest hardware and software will enable cars and various software applications to freely connect. Arene will
fulfill an important role as a platform to support this kind of evolution. We will do our utmost to develop a nextgeneration BEV for 2026 together with Woven by Toyota, Inc.
What we aim for in the second domain, “Mobility 2.0,” is to expand mobility into new realms. There aremany people whose mobility we are currently not able to support as we would like, such as the elderly, people
living in depopulated areas, and people in emerging markets in which the car market has yet to mature. New
mobility possibilities, such as mobility in the sky, are also expanding. Toyota, in addition to having a full lineup
of vehicles, has new forms of mobility, such as the e-Palette, as well as a network of colleagues across industries,
such as those in the Mobility as a Service (“MaaS”) space. Leveraging these strengths, we would like to go
beyond our current scope of business to provide greater mobility support to our customers around the world.
“Mobility 3.0” is about integration with social systems. We aim to create mobility ecosystems integrated
with cities and society that tie into energy and transportation systems, logistics, as well as the way we live, and afuture that realizes well-being. To do this, we will proceed with our demonstration experiments in Woven City.
For example, we will advance our development of new logistics systems and the development of city-integrated
autonomous mobility, as well as demonstrations that start from Woven City of a CO2-free hydrogen supply chain
and of expanding the potential of hydrogen use in our daily lives. In addition to these demonstrations to date,
which have utilized digital technologies, from 2025 we will accelerate comprehensive demonstrations in realcities, leading to social implementation together with our partners.
The most important message we want to convey through our mobility concept is that mobility lies beyond
the evolution of the car. Cars lie at the center of our transformation into a mobility company. In order to expand
the possibilities of cars, it is necessary to evolve based on the concepts of “Best-in-Town” and “ever-better cars,”
which we have long cultivated. We will change the future of cars based on our products and regions.
Product-centered Management
Toyota Mobility Concept is centered on enhancing the value of the car, expanding new mobility andfreedom of movement, and providing new services and energy solutions as part of social systems. The three
approaches that hold the key to realizing this vision are electrification, intelligence, and diversification.
Electrification will be based on a multi-pathway approach. We will continue to tailor electrification to theneeds of customers and individual regions by drawing on the strengths and characteristics of each vehicle type.
We will expand our current lineup of BEVs, aiming to release ten new models by 2026 and set a pace to sell
1.5 million units annually by then. Further, we expect to launch a new generation of BEVs in 2026 that would
double the driving range compared to that of the current bZ4X by using batteries with far greater efficiency,
while also offering designs and driving performance to set hearts racing.
In addition, by drawing on the strengths of our Toyota Production System (“TPS”), we will change the way
we work to reduce the number of processes for the BEV production line by half. This will entail a shift to more
efficient lines, including autonomous inspections and unmanned transport powered by connected technology. We
also aim to achieve carbon neutrality at all of our global plants by 2035. Also, we will overhaul existing supply
chains by working with suppliers to procure superior quality parts at lower prices.
To realize these transformations, we are creating a new specialized unit to develop BEVs. This specialized
unit will work under a single leader entrusted with full authority to handle every function, from development to12

production and business operation. We will take part in a wide range of business opportunities through ourpolished competitiveness as demonstrated by the Toyota New Global Architecture (“TNGA”) having the effectof halving our development intensity and in-house investment as compared to those before the adoption of
TNGA, and our 10-million unit vehicle sales value chain.
For PHEVs, by increasing battery efficiency to extend the EV-mode driving range beyond 200 km, we willreposition PHEVs as “the practical BEV” and will work harder on developing this as another BEV option.
For FCEVs, we will pursue mass production centered on commercial vehicles. One feature of FCEVs is thatthe energy source, hydrogen, is lightweight, so even when traveling longer distances the vehicle will not be as
heavy as a comparable BEV, and less space for storage of the energy source is required. Refueling is also muchquicker. We plan to promote FCEVs by starting with commercial vehicles, which permit us to take advantage ofthese strengths.
The second approach is intelligence. Intelligence will expand connectivity between cars, services, andsociety. The shift to intelligent cars will involve expanding advanced safety technology, multimedia, and otherconstantly evolving feature updates to all of our vehicles. At the same time, alongside advances in the onboard
operating system, our next-generation BEVs will enable users to customize “ride feel” according to theirpreferences for how the vehicle runs, turns, and stops. By also honing the vehicles’ essential attributes, we will
create cars that are more fun to drive in terms of both hardware and software.
Intelligent services will include new services that connect cars to cities and infrastructure. This year, weplan to commence social implementation of logistics systems that use real-time traffic information to boost
transport efficiency, and systems that provide optimal energy management. Partnering with cities and public
facilities, we will also expand our BEV charging network, while providing a variety of services that support theenergy grid and people’s lives. These efforts are already underway at Lexus.
With respect to intelligence in society, we will conduct demonstration experiments regarding various waysof connecting people, cars, and society in Woven City, which we have positioned as our “mobility test course.”
We will use Woven City to address issues that come to light through social implementation of connectedlogistics services, before implementing these services in society. By repeating this process, we will accelerate therealization of an intelligent society.
Finally, we come to diversification. Our approach to diversification goes beyond cars to mobility itself, andeven the energy sector. The diversification of cars will involve expanding our product lineup, services that utilize
connected technology, as well as parts and accessories businesses in collaboration with new partners.
With respect to diversification of mobility, we have developed an easy-lock system for securing wheelchairs
with a single motion, utilizing the know-how we have accumulated over many years of developing welfare
vehicles, and we plan to start installing this system in vehicles.
As for energy diversification, we have started demonstration experiments using hydrogen made from water,food loss and other waste, as well as carbon-neutral fuels made from biomass and other resources, in Japan and
Thailand. Our energy use technology will also be strengthened in the field of motorsports with an aim topromoting widespread adoption in society.
Region-centered Management
We have refined the performance and cost of hybrid vehicles with each successive generation. As a result,
we have been able to enhance greatly their earning power while investing in the future, growing withstakeholders, and reducing CO2 emissions. This is precisely an achievement of our region-centered management,
which is based on our efforts to make ever-better cars. We will continue to deepen our region-centered
management and further solidify our business foundation.
13

To do so, the first thing that we must address is how to achieve carbon neutrality. Carbon knows no borders,and CO2 emission is an issue that cannot wait. We need to immediately start with what we can do. Therefore, tospread the use of electrified vehicles as quickly as possible and as much as possible, we need to be very attentive
to the needs of our customers by taking into account local conditions and the diverse ways of using cars. Thus,
along with enhancement of the BEV lineup, we will continue to enhance the attractiveness and competitivenessof all powertrains, including HEVs and PHEVs.
In developed countries, in parallel with the preparation of BEVs, we will expand our product lineup, with afocus on the bZ series. In the U.S., we will start the local production of a three-row SUV in 2025 that will beequipped with batteries to be produced in North Carolina, and we seek to increase our battery production
capacity.
In China, we will launch two models of locally developed BEVs in 2024, fit to the local needs, and we plan
to continue to increase the number of models in the following years. In Asia and other emerging markets, we will
make sure to respond to the growing demand for BEVs, starting with local production of BEV pickup trucks, andalso by launching a compact BEV model by the end of the year.
In developed countries, the switch to BEVs is moving forward as the market matures, while in emerging
markets, the market is expected to expand due to demand for new and additional vehicles. Toyota, with its full
lineup and profitable HEVs and PHEVs, along with its diverse options of BEVs that it will be strengthening, will
make sure to meet a wide range of global demand and is committed to further growth. For growth in emerging
markets, profitable HEVs will be used as a source of income, and with a value chain supporting the sale ofapproximately 10 million units per year, we will also take part in a wide range of business opportunities. In
addition, we will achieve cost reductions and Kaizen (continuous improvement) by leveraging the strengths of
the Toyota Production System (TPS), and thereby enhance our future investment capacity for the expansion of
growth in BEVs and mobility areas, as well as establish a strong business foundation whereby carbon neutrality
and growth can both be achieved.
While the technological innovations of electrification, intelligence and diversification are progressing, we
would like to take on the challenge of contributing to regions in which we operate and to the overall good. For
example, in the United States, the automotive industry is at a critical juncture, with people moving away frommanufacturing and with structural costs increasing. By combining worksite-honed craftsman skills withintelligence to propose new ways of manufacturing and new “automation with human intelligence” processes, wewant to do our part in preserving manufacturing in the United States while solving the country’s labor shortage
problem. We also plan to start collaborations with Charoen Pokphand and the Siam Cement Group in Thailand.
This is the start of an implementation that uses electrification and connected technologies to connect vehicles,
people and information, and utilize mobility as part of the social infrastructure. Through these initiatives, we willtake on the challenge of solving regional problems such as serious traffic congestion, air pollution and frequentroad accidents.
Let’s Change the Future of Cars!
No matter how times change, Toyota is a company that manages by way of its products. And we are acompany that intends to produce happiness for all by responding to the diversification of its customers andsocieties around the world. There is a future mobility society that Toyota in particular can aim for because it has
refined the strength of its full lineups worldwide.
In an uncharted era, we believe that it is action based on strong will and passion that will change the future.
Together with our colleagues, we will challenge ourselves to think outside the box. We believe that a future ofmobility, one that is unique to carmakers and to Toyota, lies ahead. Let’s change the future of cars! This is ourtheme as we aim to become a mobility company.
Based on our unshakable motives, we will take on challenges with strong will and passion.
14

Misconduct of Hino and Daihatsu in Relation to Their Applications for Certification
On March 4, 2022, Hino, a consolidated subsidiary of Toyota, announced that it identified past misconduct
in relation to its applications for certification concerning emissions and the fuel economy performance of its
vehicle engines for the Japanese market. Hino subsequently received an investigation report from a special
investigation committee consisting of outside experts concerning this matter. Hino also was subject to an on-site
inspection from the Ministry of Land, Infrastructure, Transport and Tourism (“MLIT”), and received a corrective
action order from it. On October 7, 2022, Hino submitted a recurrence prevention report to MLIT. To clarify
management responsibility regarding this matter, Hino decided to have four persons who were directors or senior
managing officers resign, reduce the remuneration of directors, and request the voluntary return of part of the
remuneration of certain past representative directors. Further, Hino formulated and announced “Three Reforms,”
namely reforms to management, corporate culture and vehicle manufacturing, to prevent future misconduct. Hinois committed to addressing this issue head on and living out with renewed intent its corporate mission: “We makea better world and future by helping people and goods get where they need to go.” See “Item 4. Information on
the Company — 4.B Business Overview — Legal Proceedings” for a discussion of related legal proceedings,
including government investigations and actions.
Furthermore, on April 28, 2023, Daihatsu announced and disclosed that it had committed procedural
irregularities in approval applications for side collision tests for vehicles developed by Daihatsu destined foroverseas markets. During the subsequent in-house inspection, it was newly discovered and announced that
Daihatsu identified irregularities in the certification procedures for the side impact collision tests of Daihatsu
ROCKY HEVs and Toyota RAIZE HEVs. The irregularities were promptly reported to, and consultations were
undertaken, with the inspection and certification authorities after they were discovered, and shipments and salesof the vehicles at issue were suspended in the countries in which approval had been granted. In addition,
Daihatsu has confirmed and reported that the vehicles at issue conform to laws and regulations in in-housere-tests using proper parts. Daihatsu has established a third-party committee consisting of external experts inlegal and technical matters to fully clarify the nature of the irregularities and identify their root cause; it has also
asked the committee to recommend measures to prevent the recurrence of similar irregularities by examining thecompany’s organization and development processes.
In the wake of the large-scale recalls that occurred in 2009, Toyota promised its customers around the worldthat it would not “run away, hide, or lie.” Given this, we take very seriously the fact that these problems
nevertheless occurred in our group. For this matter, as the chief executive officer, Toyota’s President will further
strive to improve the car manufacturing operations of Toyota and the group companies, while the Chairman of
the Board of Toyota will lead initiatives to strengthen governance and compliance.
On May 12, 2023, the top management of each group company gathered to discuss Toyota’s commitment tofacing manufacturing with sincerity and renewed our recognition of this goal. We are currently working with allof our group companies to re-examine our past governance structure, including our own, and have begun athorough review. We view this case not as an individual or workplace issue, but rather a company-wide issue
where an individual or workplace was forced to commit a wrongdoing. Together with Daihatsu, we arecommitted to listening to the voices of those on the front lines and carefully responding to the situation.
At Toyota worksites, everyone is committed to making better cars. Toyota is a company where, when aproblem occurs, everyone always stops, pursues the root cause by going and seeing the location or process where
the problem exists, makes improvements, and works to prevent recurrence. This is the Toyota philosophy that has
been cherished since the company’s founding. We believe that there is no other way to regain the trust of ourcustomers than for all of Toyota and its group companies to return to this philosophy once again, for each groupcompany’s top management to confront the problems at their respective workplaces, uncover them, and make
improvements one by one, and continue this steady effort. The entire Toyota group will work together to regain
trust of our customers as soon as possible.

15

Memorandum of Understanding concerning conducting a business combination of Mitsubishi Fuso and Hino
MotorsOn May 30, 2023, Toyota, Daimler Truck Holding AG (“Daimler Truck”), Mitsubishi Fuso Truck and Bus
Corporation (“MFTBC”) and Hino entered into a Memorandum of Understanding (MoU) on accelerating thedevelopment of advanced technologies and conducting a business combination of MFTBC and Hino. Daimler
Truck, MFTBC, Hino, and Toyota intend to collaborate toward achieving carbon neutrality and creating aprosperous mobility society by developing CASE technologies and strengthening the commercial vehicle
business on a global scale.
The MoU contemplates that MFTBC and Hino will integrate on an equal footing and collaborate in the areasof commercial vehicle development, procurement, and production, and that they will seek to build a globallycompetitive Japanese commercial vehicle manufacturer. The MoU further contemplates that Daimler Truck andToyota will equally invest in the (listed) holding company of the integrated MFTBC and Hino, and that they willseek to collaborate on the development of hydrogen and other CASE technologies to support the competitivenessof the new company.
Details on the scope and nature of the collaboration, including the name, location and corporate structure of
the new holding company will be discussed. The parties envisage signing of definitive agreements regarding thebusiness combination in the first quarter of 2024 and aim to close the transaction by the end of 2024.
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. Hino, also a
subsidiary of Toyota Motor Corporation, produces and sells commercial vehicles such as trucks and buses.
Toyota also manufactures automotive parts, components and accessories for its own use and for sale to others.
Vehicle Models and Product Development
Toyota’s vehicles (produced by Toyota, Daihatsu and Hino) can be classified largely into electrified
vehicles and conventional engine vehicles. Toyota’s product line-up includes subcompact and compact cars,mini-vehicles, mid-size, luxury, sports and specialty cars, recreational and sport-utility vehicles, pickup trucks,
minivans, trucks and buses. Toyota’s luxury cars are sold in North America, Europe, Japan and other regions,primarily under the Lexus brand name.
In fiscal 2021, despite the suspension of operations at factories and the suspension of business at dealers dueto the impact of COVID-19, Toyota launched various new models as planned. The new Harrier, an SUV for the
new era, was designed to resonate with the heart of the driver, with a focus on sensory quality from the first
moment of seeing, riding and driving off in it, rather than relying on utility or numerical performance. The new
Mirai featured a design that appeals to the senses, a distinctive driving experience, industry-leading innovation,and cruising range that gives peace of mind as its concept, while generating zero emissions, and will serve as a
new departure point for creating a hydrogen-based society of the future. In the Lexus brand, we launched the UX
300e, which offers the high-quality driving performance and excellent quietness unique to Lexus BEVs, the highreliability and convenience of the electrification technology cultivated in the manufacture of hybrid models, andthe distinctive design and high functionality of the Lexus UX. GR Yaris is the first Toyota vehicle developedwith the reversed concept of turning a motorsports car into a production car. The car was evaluated by MasterDriver Morizo (the racing driver name for Akio Toyoda) and non-Toyota professional drivers from the earlystages of development, and even after it was unveiled at the Tokyo Auto Salon 2020, it underwent repeated16cycles of evaluation and improvement at the circuit before it was finally launched. As a result of our efforts tofurther streamline costs following the Lehman Brothers bankruptcy and the “ever better cars manufacturing”
initiative, the compact car, Yaris, won the Car of the Year in Europe, a place where people have continued tohave strong passion for cars in its long automotive history. The award recognized Yaris’s fun-to-drive featuresand fuel efficiency as a HEV.
In fiscal 2022, Toyota launched the first-ever SUV Corolla model, Corolla Cross. Since the launch of thefirst-generation in 1966, the Corolla series has continued to evolve and embrace new challenges and has soldmore than 50 million units worldwide. The Noah and Voxy, cars supported and loved by many customers,
including families among others, were completely redesigned as minivans with the further increased ease of use
and enhanced advanced fixtures. In pursuit of a suite of features designed to enable customers to drive theirvehicles every day with joy, safety, peace of mind, and comfort, while also realizing superior environmental
performance, Toyota launched the HEV Aqua, which is the world’s first vehicle to use a high-output bipolar
nickel-hydrogen battery as an electric drive battery. With elevated levels of driving performance, design, andadvanced technology, the all-new NX, which is the first model to introduce the next generation of Lexus, isaccelerating the proliferation of electrified models by being Lexus’ first-ever PHEV also offered as a HEV. In
addition, the new Toyota bZ series of BEVs that are easy to use and highly appealing, and the introduction of thisseries is a part of Toyota’s efforts to reduce CO2 emissions. Toyota launched the bZ4X, the first of the bZ series,
which offers, in addition to a comfortable cabin, a new lifestyle and the opportunity to spend precious time withfamily and friends as well as the BEV’s unique joy of driving. For motorsports cars, Toyota developed the
GRMN Yaris as “embodiments of making ever-better motorsports-bred cars.”
In fiscal 2023, Toyota launched the all-new Crown. While inheriting the Crown’s DNA of innovation andlimit-pushing, it has been renewed as a flagship for a new era with four variations to meet the diverse values andlifestyles of customers. In addition to the “Crossover type,” a new style that combines a sedan and an SUV, the“Sport” offers a sporty driving experience with an enticing atmosphere and an easy-to-drive package. The“Sedan” is a new formal design that meets the needs of chauffeurs, whereas the “Estate” is a functional SUV
with a mature atmosphere and ample driving space. The new series will be rolled out in about 40 countries andregions. Launched in 1997 as the world’s first mass-produced hybrid car, the Prius has driven uptake of HEVs as
a new-generation eco-car with outstanding fuel efficiency; under the “Hybrid Reborn” concept, the Prius was
renewed as an exhilarating package that adds a design inspiring love at first sight and captivating driving
performance to its core strength as an environmentally friendly car. For sportscars, the development of the GR
Corolla, including a hydrogen engine-equipped GR Corolla designed to participate in the Super Taikyu
endurance race series, has carried forth the torch of making ever-better motorsports-bred cars. In addition, theLexus brand announced its first globally-available pure BEV model, the all-new RZ. The new RZ marks Lexus’
transition into a BEV-centered brand, and embodies the unique Lexus vehicle design and driving experience
brought on by advanced electrification technology.

17Markets, Sales and Competition
Toyota’s primary markets are Japan, North America, Europe and Asia. The following table sets forth
Toyota’s consolidated vehicle unit sales by geographic market for the periods shown. The vehicle unit sales
below reflect vehicle sales made by Toyota to unconsolidated entities (recognized as sales under Toyota’s
revenue recognition policy), including sales to unconsolidated distributors and dealers. Vehicles sold by Daihatsu
and Hino are included in the vehicle unit sales figures set forth below.
Thousands of Units
Year Ended March 31,
2022

2021

MarketUnits

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,125
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,313
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
959
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,222
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,027
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,646

%

Units

%

2023
Units

%

27.8% 1,924
30.3 2,394
12.5 1,017
16.0 1,543
13.4 1,352

23.4% 2,069
29.1 2,407
12.4 1,030
18.7 1,751
16.4 1,565

23.5%
27.3
11.7
19.8
17.8

100.0% 8,230

100.0% 8,822

100.0%* “Other” consists of Central and South America, Oceania, Africa and the Middle East, etc.
The following table sets forth Toyota’s vehicle unit sales and market share in Japan, North America, Europe
and Asia on a retail basis for the periods shown. Each market’s total sales and Toyota’s sales represent new
vehicle registrations in the relevant year (except for the Asia market where vehicle registration does notnecessarily apply). All information on Japan excludes mini-vehicles. The sales information contained below
excludes unit sales by Daihatsu and Hino, each a consolidated subsidiary of Toyota. Vehicle unit sales in Asia do
not include sales in China.
Thousands of Units
Year Ended March 31,
2022

2021

Japan:
Total market sales (excluding mini-vehicles) . . . . . . . . . . . .
Toyota sales (retail basis, excluding mini-vehicles) . . . . . . .
Toyota market share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,901
1,505
51.9%

2020

2,664
1,361
51.1%

Thousands of Units
Year Ended December 31,
2021

2023

2,696
1,377
51.1%

2022

North America:
Total market sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota sales (retail basis) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota market share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,157
2,408
14.0%

17,861
2,681
15.0%

16,5972,445
14.7%

Europe:Total market sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota sales (retail basis) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota market share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,638993
6.0%

16,870
1,076
6.4%

14,8971,081
7.3%

Asia (excluding China):
Total market sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota sales (retail basis) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota market share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,181
969
11.8%

9,224
1,189
12.9%

10,757
1,382
12.8%

18

JapanJapan is one of the leading countries with respect to technological advancements and improvements in theautomotive industry and will continue to demonstrate such strength. Toyota strives to earn customer satisfaction
by introducing products distinctive of Japan’s manufacturing ability such as value-added products including
Lexus models, FCEVs, PHEVs and HEVs, vehicles with three-seat rows and mini-vehicles. Toyota endeavors tosecure and maintain its significant share of and position atop, the Japanese market. Toyota held a domestic
market share (excluding mini-vehicles) on a retail basis of 51.9% in fiscal 2021, 51.1% in fiscal 2022 and 51.1%
in fiscal 2023.
Although Toyota’s principle is to conduct production in regions where it enjoys true competitiveness, itconsiders Japan to be the source of its good manufacturing practices. Having 16 production sites in Japan, Toyota
supports its operations worldwide through measures such as the development of new technologies and products,
low-volume vehicles to complement local production, production of global vehicle models which straddle
multiple regions and supporting overseas factories.
North America
The North American region is one of Toyota’s most significant markets. The United States, in particular, isthe largest market in the North American region, accounting for 86% of Toyota’s retail sales in the region. In theregion, Toyota has in recent years reorganized its production structure and made improvements to its productlineup. In addition, Toyota has a wide product lineup in every segment (excluding large trucks and buses).
Toyota’s North American production capacities include the production of vehicle models such as the RAV4,
Camry, Tacoma and Highlander through 13 manufacturing entities.
In November 2021, Toyota created Toyota Battery Manufacturing, North Carolina (“TBMNC”) as the firstplant to produce automotive batteries for Toyota in North America. When it comes online in 2025, it is expectedthat 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.
In June 2023, Toyota decided to assemble an all-new, three-row battery electric SUV at Toyota Motor
Manufacturing Kentucky, Inc. (“TMMK”) starting in 2025. The BEV will be powered by batteries fromTBMNC.
Toyota has five research and development centers in North America. As for vehicle development, theToyota Technical Center spearheads the design, planning, and evaluation of vehicles and parts as to their ability
to meet customer needs.
EuropeToyota’s principal European markets are Germany, France, the United Kingdom, Italy and Spain. In theEuropean markets, as a full-lineup car manufacturer, Toyota aims to increase its global vehicle sales with a focus
on electrified vehicles (HEVs, PHEVs, FCEVs and BEVs) that suit the needs of customers and the circumstancesof each region.
In terms of production, to strengthen its business setup so that it is less likely to be affected by exchange
rates, Toyota produces models such as the Corolla, Yaris and C-HR locally through six entities in Europe. 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

Asia
Toyota’s principal Asian markets are Thailand, India, Indonesia and Taiwan.
In light of the importance of the Asian market that is further expected to grow in the long term, Toyota aims
to build an operational framework that is efficient and self-reliant, as well as a predominant position in theautomotive market in Asia. Toyota has responded to increasing competition in Asia by making strategic
investments in the market and developing relationships with local suppliers. Toyota believes that its existing
local presence in the market provides it with an advantage over new entrants to the market and expects to be able
to promptly respond to demand for vehicles in the region.
In terms of production, Toyota manufactures models such as the Hilux, Hiace, Corolla, Camry and Viosthrough 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.
China
Toyota has been conducting operations in China in large part through joint ventures, and its success in
producing products that meet local demands and in establishing its sales and service network has significantly
contributed to Toyota’s profits. Based on the firm business foundation that it has established, Toyota isconducting its operations with the aim of promoting further growth and increasing profitability through further
development of its sales and service network and expansion of its product lineup.
In terms of production, Toyota has been conducting a significant portion of its China business, including in
relation to the production and sales of vehicles, through joint ventures. Toyota has two major joint venture
partners in China, namely, China FAW Group Corporation and Guangzhou Automobile Group Co., Ltd. The
joint venture with China FAW Group manufactures models such as the Corolla, Vios, RAV4, bZ4X and bZ3 andthe joint venture with Guangzhou Automobile Group Co., Ltd. manufactures models such as the Camry, Yaris,
Highlander and bZ4X.
Total vehicle sales in the Chinese market were 24.62 million vehicles in 2022, 97.8% of that of 2021, and25.17 million vehicles in 2021, approximately the same as the 25.21 million vehicles in 2020. In this market,
Toyota’s sales were 1.94 million vehicles in 2022, 100.0% of that of 2021, and 1.94 million vehicles in 2021,
107.8% of that of 2020. In the domestically produced passenger vehicle market in mainland China (21.89 million
vehicles), Toyota had a market share of 8.8%. Toyota has been expanding the distribution network for locally
produced vehicles in cooperation with China FAW Group and Guangzhou Automobile Group under the names
Tianjin FAW Toyota Motor Co., Ltd. and Guanqi Toyota Motor Co., Ltd., respectively, and for imported
vehicles, Toyota has also been expanding primarily the Lexus brand sales network. Toyota plans to further
increase sales by expanding the number of dealers and its product lineup. In addition, as the market in China
develops and becomes more sophisticated, Toyota plans to promote so-called “Value Chain” businesses, such as
used car sales, services, financing and insurance, so as to contribute to the development of a mobility society.
South and Central America, Oceania, Africa and the Middle East
Toyota’s consolidated vehicle sales in South and Central America, Oceania, Africa and the Middle East
(collectively, the “Four Regions”) in fiscal 2022 were 1,352 thousand units, 131.7% of that of the prior fiscal
year. Toyota’s principal markets in the Four Regions are Brazil and Argentina in South and Central America,
Australia in Oceania, South Africa in Africa and Saudi Arabia in the Middle East. The core models in the Four
Regions are global models such as the Corolla, IMV (the Hilux) and Camry.
Toyota has seven production bases in the Four Regions. In these regions, which are expected to become
increasingly important to Toyota’s business strategy, Toyota aims to continue developing new products whichmeet the specific demands of each region, increasing production and promoting sales.
20

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. Facilities are locatedprincipally 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.
In promoting a sustainable growth strategy, establishing a system capable of providing optimal supply of
products in the global market is integral to Toyota’s strategy.
In line with its basic policy of manufacturing in countries or regions where there is demand and where
Toyota is truly competitive, Toyota will make efficient use of and maximize capacity utilization at its existing
plants to respond to the expanding market and will continue to focus on making efficient capital investments asnecessary.
Furthermore, Toyota will continue to place top priority on safety and quality in strengthening truecompetitiveness with the aim of achieving sustainable growth.
The following table shows Toyota’s worldwide vehicle unit production by geographic market for theperiods shown. These production figures do not include vehicles produced by Toyota’s unconsolidated affiliatedcompanies. The sales unit information elsewhere in this annual report includes sales of vehicle units produced bythese affiliated companies. Vehicle units produced by Daihatsu and Hino are included in the vehicle unit
production figures set forth below.
Thousands of Units
Year Ended March 31,
2021
2022
2023

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,948
1,641
642
1,015
306

3,738
1,751
707
1,499
463

3,789
1,768
771
1,859
507

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,553

8,158

8,694

* “Other” consists of Central and South America and Africa.
Toyota closely monitors its actual units of sale, market share and units of production data and uses thisinformation to allocate resources to existing manufacturing facilities and to plan for future expansions.
See “Item 4. Information on the Company — 4B. Business Overview — Capital Expenditures andDivestitures” 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. As of March 31, 2023, this network
consisted of 244 dealers employing approximately 110 thousand personnel and operating approximately
4.6 thousand sales and service outlets. TOYOTA Mobility Tokyo Inc. is the only dealer owned by Toyota and therest are independent.
Toyota believes that this extensive sales network of independent local interests has been an important factor
in its success in the Japanese market. A large number of the cars sold in Japan are purchased from salespersons
21

who visit customers in their homes or offices. In recent years, however, the traditional method of sales throughhome visits is being replaced by showroom sales, and the percentage of automobile purchases throughshowrooms has been gradually increasing. Toyota expects this trend to continue even after the COVID-19 related
crisis, and accordingly is working to improve its sales activities such as customer reception and meticulous
service at showrooms, as well as online sales, to increase customer satisfaction.
Sales of Toyota vehicles in Japan had been conducted through four sales channels until April 2020, but fromMay 2020 shifted to a framework where all of its Japanese-market vehicle models are made available through all
sales outlets in Japan. In addition, Toyota introduced the Lexus brand to the Japanese market in August 2005, andcurrently 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.

ChannelToyota Owned

Toyota brand . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lexus brand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 company
22 outlets

Dealers
Independent

Outlets

240 companies
161 outlets

4,419 outlets
183 outlets

Outside Japan, Toyota vehicles are sold through approximately 168 distributors in approximately 204
countries and regions. Through these distributors, Toyota maintains networks of dealers. The chart below shows
the number of Toyota distributors as of March 31, 2023 by country and region:
Country/Region

North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia (excluding China) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Oceania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Middle East . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Central and South America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of Countries

Number of Distributors

3
53
1
19
17
16
56
39

5
29
4
13
15
14
48
40

BEV Strategies
On December 14, 2021, Toyota held a briefing on its BEV strategy where it announced that it would beboosting 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.
Toyota believes that achieving carbon neutrality means realizing a world in which all people living on thisplanet continue to live happily. We want to help realize such a world. This has been and will continue to be
Toyota’s wish and our mission as a global company. For that challenge, we need to reduce CO2 emissions asmuch as possible, as soon as possible.
Energy plays a critical role in achieving carbon neutrality. At present, the energy situation varies greatly
from region to region. That is exactly why Toyota is committed to providing a diversified range of carbon-neutral
options to meet whatever the needs and situations might be in every country and region. In this diversified anduncharted era, it is important to flexibly change the type and quantity of products produced while keeping an eye
on market trends. 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 becompetitive going forward.
22

In terms of vehicle production, we believe that all electrified vehicles can be divided into two categories,
depending on the energy that they use. One category is that of “carbon-reducing vehicles.” If the energy thatpowers vehicles is not clean, the use of an electrified vehicle, no matter what type it might be, would not result inzero CO2 emissions. The other category is that of “carbon-neutral vehicles.” Vehicles in this category run onclean energy and achieve zero CO2 emissions in the whole process of their use. We at Toyota will strive torealize such vehicles.
The Toyota brand now offers more than 100 models of engine-only vehicles, HEVs, PHEVs, and FCEVs in
more than 170 countries and regions. The Lexus brand has introduced more than 30 models of engine-only
vehicles, HEVs, and PHEVs in more than 90 countries and regions. 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 andLexus brand BEV models by 2030, offering a full lineup of BEVs globally in both the passenger and commercial
vehicle segments.
In August 2022, Toyota announced that it will invest up to 730 billion yen in Japan and the United States
toward supplying automotive batteries for BEVs, aiming to begin battery production between 2024 and 2026.
Through this investment, we aim to boost production capacity by up to 40 GWh. In May 2023, Toyota alsoannounced its plan to further invest $2.1 billion in its battery manufacturing plant in the United States for new
infrastructure to support future expansion. Toyota will continue working to build a supply system that cansteadily meet the growing demand for BEVs around the world.
At the New Management Policy & Direction Announcement held on April 7, 2023, Toyota announced that
it will expand its current BEV lineup, aim to introduce ten new BEV models by 2026, and set a pace for annual
sales of 1.5 million Toyota and Lexus brand BEV units by 2026. In addition, Toyota has plans to release nextgeneration BEVs in 2026 that will double the driving range compared to that of the current bZ4X by using
batteries with greater efficiency.
Plans for the release of BEVs in each region are as follows.
Developed countries

In parallel with the preparation of new models scheduled for launch in 2026, with afocus on the bZ series and with further refined performance, Toyota plans togreatly expand its product lineup.

The United States

In 2025, Toyota plans to start the local production of a 3-row SUV equipped withbatteries to be produced in North Carolina.

China

In addition to the bZ4X and bZ3, Toyota plans to launch two models of locallydeveloped BEVs in 2024 that will fit the local needs, and to continue increase thenumber of models in the following years.

Asia and otheremerging markets(Global South)

In order to respond to the growing demand for BEVs, Toyota plans to start local
production of BEV pickup trucks by the end of 2023 and also launch a small BEV
model.

In May 2023, we launched the BEV Factory, a business unit dedicated to BEVs. What we hope to achievewith BEV Factory is to change the future with BEVs through transformation on multiple axes: cars,
manufacturing and the way we work.
On the car axis, through technologies such as the integration of next-generation batteries and sonictechnology, we aim to achieve a vehicle cruising range of 1,000 km. To bring more stylish design, we will use AI
to increase aerodynamic performance, while our designers will focus on expressing natural sensibility. We
believe Arene OS and full over-the-air updates will vastly expand the possibilities for enjoying cars. Like ourmanual transmission EVs, we plan to deliver exciting surprises and fun to our customers with technologies
achievable only by a carmaker.
23

On the manufacturing axis, the car body will be constructed from three main components in a new modular
structure. Adopting giga casting will allow significant component integration, which contributes to the reductionof vehicle development costs and factory investment. In addition, with our self-propelling production technology,
we aim to reduce our manufacturing procedures and plant investment by half.
Under the way we work axis, the BEV Factory is based on the concept of “ALL in ONE TEAM,” a teamunder one leader that unifies functions and regions beyond the framework of a carmaker, such as Woven by
Toyota and external partners. This ONE TEAM will revolutionize the way work is done, with everyone on thesame site and with the same awareness of the same issues, to achieve quick decision-making and initial response.
We plan to roll out next-generation BEVs globally and as a full lineup to be launched in 2026. By 2030, we
expect 1.7 million units out of our planned 3.5 million overall BEV unit target will be provided by BEV Factory.
We expect that our next-generation BEVs will adopt our new batteries, through which we are determined to
become a world leader in battery EV energy consumption. With the resources we earn, we will improve our
product appeal to exceed customer expectations and secure earnings.
The Development and Supply of Batteries
While promoting a full lineup of electrified vehicles, we have also been developing and manufacturing a full
lineup of batteries. These development efforts are organized by type of electrified vehicle. For HEVs, our focus
is on power output, or in other words, instantaneous power, while, when it comes to PHEVs and BEVs, our focus
is on capacity or what can be called “endurance.”
In the area of batteries, Toyota has continued to research, develop, and produce batteries in-house for many
years. In 1996, we established what is today Prime Earth EV Energy Co., Ltd. While refining our technologies
related to nickel-metal hydride batteries, we started accelerating the development of lithium-ion batteries in 2003.
Furthermore, since establishing our Battery Research Division in 2008, we have been advancing research on
solid-state batteries and other next-generation 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 madeapproximately 1 trillion yen in capital expenditures, research and development expenses and other investments to
produce more than 23 million batteries. We believe that our accumulated experience is an asset that gives us acompetitive edge. Going forward, we intend to make a total of 5 trillion yen in new capital expenditures, researchand development expenses and other investments relating to BEVs and batteries, with the aim of realizing evenmore-advanced, high-quality, and affordable batteries.
As for batteries for HEVs, we have been continuously upgrading nickel-metal hydride batteries andlithium-ion batteries, taking advantage of their respective characteristics. In particular, we took on the challenge
of developing a bipolar structure in the course of creating a nickel-metal hydride battery to be installed in theAqua, which underwent a full-scale redesign completed in July 2021, and have become the first in the world tocommercialize a battery of this kind as an onboard battery for driving. Compared to the batteries used in theprevious generation of the Aqua, the output density has been doubled, giving the car a powerful acceleration
sensation. We are currently engaged in development aimed at creating more-advanced lithium-ion batteries by
the second half of the 2020s.
To develop batteries that our customers can use with peace of mind, we focus on producing batteries thatbalances five factors, which stand out for their “safety,” have “long service life,” boast “high-level quality,” andare “good yet affordable” as well as capable of “outstanding performance.” For example, a longer service life
affects a vehicle’s residual value. In terms of cruising range, high energy density and high-level performance arealso necessary. On the other hand, over-emphasis on a fast charging speed may increase the danger ofoverheating or even fire and thus decrease battery safety. 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 to24the others. That is why we believe that the integrated development of batteries and vehicles is essential. How
batteries are used depends on how the vehicles in which they are installed are used. For example, theenvironments 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 suchconditions as charging frequency and battery temperature. Accordingly, we carry out mock driving tests thatassume a diverse range of vehicle usage in order to obtain data on actual usage environments and provide
feedback to inform the evaluation and design of batteries. To determine the balancing point of the five factors
discussed above, it is necessary to obtain driving data that includes driving conditions and usage environments,
find out what the conditions would be like if batteries were used instead, and repeatedly verify what is happening
inside the batteries. Such steady and earnest efforts for both batteries and vehicles are the secret behind Toyota’s
advantages.
To popularize BEVs, we strive to reduce costs via the integrated development of vehicles and batteries toprovide BEVs at a reasonable price. To start with, we aim to reduce the costs of batteries themselves by 30% ormore by developing materials and structures. Then, for the vehicle, we aim to improve power consumption,
which is an indicator of the amount of electricity used per unit of distance, by 30%, starting with the Toyota
bZ4X. Improved power efficiency leads to reduced requirements for battery capacity, which will result in a cost
reduction. Through this integrated development of vehicles and batteries, we aim to reduce the battery cost per
vehicle by 50% compared to the Toyota bZ4X in the second half of the 2020s.
In the near future, the energy density of conventional lithium-ion batteries per unit of weight is expected tosee its peak. Accordingly, vigorous efforts are now under way to develop next-generation lithium-ion batteries,
aiming to achieve longer service life, greater energy density, more compact size, and lower costs. At Toyota, wepush ahead with the development of such batteries by employing the following three approaches. For liquid
batteries, which use liquid electrolyte, we are taking on the challenge of realizing “material evolution” and“structural innovation.” At the same time, we are aiming to commercialize all-solid-state batteries that employ
solid electrolyte instead of liquid electrolyte. As such, our wide-ranging development efforts are aimed atcreating three types of batteries, and by the second half of the 2020s, we hope to improve the characteristics ofeach type so that we can provide batteries that can be used with peace of mind. With regard to all-solid-statebatteries, we promote development aimed at achieving higher output, longer cruising range, and shorter charging
times. In June 2020, we built a vehicle equipped with all-solid-state batteries and conducted test runs on a test
course to obtain driving data. Based on that data, we continued to make improvements, and in August 2020, we
obtained license plate registration for vehicles equipped with all-solid-state batteries and conducted test drives. In
the course of the development process, we discovered that the fast movement of ions within all-solid-statebatteries could possibly enable them to achieve higher output. On the other hand, one of the challenges has been
the short service life of batteries. Toyota believes it has discovered a new technology that will improve battery
service life. In the future, we will work on developing a mass production system to address one of the otherchallenges, namely cost. Furthermore, although Toyota announced in 2021 that the introduction of all-solid-statebatteries would start with HEVs, we will instead take on the challenge of practical application in batteries for
BEVs in between 2027 and 2028.
With the rapid expansion of EV usage, we are working to build a flexible system that can stably supply therequired volume of batteries at the required time while meeting the needs of various customers in each region
around the world. To this end, we intend to establish needed technologies by conducting a certain amount of
in-house production in the pursuit of our battery development concept of achieving batteries that can be used withpeace of mind. We will then cooperate and collaborate with partners who understand and will put into practice ourconcept. We will also proceed with discussions with new partners in some regions. Our approach to production canbe described as “starting up using small basic units.” This approach draws on lessons learned from the global
financial crisis. It is difficult to notice latent risks when production is growing. Because of this, we have to take arisk-controlled approach to growth based on Toyota’s philosophy of “making only what is needed, when it isneeded, and only in the amount needed.” Moreover, Toyota’s strategy of “starting up using small basic units” is also25meant to enable the company to swiftly respond to changes arising from the arrival of a new technology, which
often occurs in the course of a product cycle when the manufacturing costs for the old model come down andstabilize.
Hydrogen Business
The hydrogen markets in Europe, China, and North America are expected to be among the largest in thenear future, and the fuel cell market is also expected to expand rapidly toward that point. We are promoting
external sales of fuel cells using the Mirai’s hydrogen units and have received offers from third parties topurchase 100,000 units of fuel cells annually by 2030. Most of them are for commercial vehicles.
To respond to the rapid changes in the market, we will establish in July 2023 a new business unit called
Hydrogen Factory, which will be able to make rapid decisions under one leader, from sales to development andproduction, all at once. The Hydrogen Factory will promote business on three axes. The first is localizing R&D
and production in countries within the major markets. We will accelerate our efforts by establishing local bases,
mainly in Europe and China. The second is strengthening alliances with leading partners. We will do our best to
deliver affordable fuel cells to our customers by consolidating sufficient quantities through alliances. The third iscompetitiveness and technology. We will work on “innovative evolution of competitive next-generation fuel cell
technologies,” such as next-generation cell technologies and fuel cell systems.
We will work toward full-scale commercialization as we move forward with these initiatives. We expectthat our next-generation system will achieve significant FCEV production cost reduction through technologicalprogress, volume efficiency, and localization. Furthermore, in collaboration with partners, if we are able tosignificantly increase the volume of purchase offers for units, we believe we will be able to reduce our costs
further and generate solid profit while meeting the expectations of governments and our many customers. We
will work together in development, production, and sales to achieve this goal.
In addition, the price of hydrogen is still very high. In order to promote the widespread use of hydrogen,Toyota will continue to work with its partners to contribute to the production, transportation, and usage ofhydrogen. The relationships we have built with strong partners will be used as opportunities to accelerate ourefforts to commercialize hydrogen by establishing customer-oriented bases in major markets and by offering
affordable products in sufficient quantities.
As for current FCEVs, we released the completely redesigned Mirai in December 2020. Premised on the useof an FCEV system, the development of the second generation Mirai was promoted to deliver a futuristic
premium car that will be genuinely appreciated and sought after by our customers. Specifically, we strove todeliver a vehicle that can win drivers’ hearts during and after driving, if not from the moment when they firstcatch sight of it. Moreover, Toyota aims to become a fuel cell (“FC”) system supplier supporting the realizationof a hydrogen-powered society. In line with this aim, we provide a variety of business operators with a compact
FC system module package that we have developed. This package consists of FC stacks for the secondgeneration Mirai, which boast higher performance, as well as air supply, hydrogen supply, cooling, power control
and other FC system-related parts. In North America, we have unveiled a new prototype for an FC commercial
heavy-duty truck that uses the second-generation FC system installed on the new Mirai. This truck boasts
considerably improved performance, including more powerful acceleration and flexible driving response.
Furthermore, having attained a maximum loaded weight of 80,000 pounds (approximately 36 tons) and cruising
range of 300 miles (more than 480 kilometers), the truck is designed to accommodate a range of commercial
truck needs. We intend to conduct the verification testing of this new FC truck in actual cargo transport
operations.

26

Development of Hydrogen Engines
Toyota Motor Corporation announced in April 2021 that it is working on the technological development of ahydrogen engine.
Hydrogen engines work like modified versions of conventional gasoline engines, powered by burninghydrogen directly as fuel. The fuel is 100% pure hydrogen, unmixed with gasoline. As no fossil fuels are burned,
except for the combustion of minute amounts of engine oil during driving, hydrogen-engine vehicles emit nearlyno CO2 when in operation. We believe that hydrogen engine technology is thus one option that offers great
potential to contribute to carbon neutrality while making use of technologies for internal combustion engines
built up over the decades and also protecting engine-related employment in the automotive industry.
In late 2020, after taking a test drive in a hydrogen engine prototype car, Master Driver Morizo (Akio
Toyoda, then President) decided on the spot to enter a hydrogen engine car in Super Taikyu Series races. The
development of race vehicles is dramatically faster and more agile than that of mass-production vehicles. We
decided that racing would provide the ideal environment for honing our hydrogen engines being developed withthe goal of achieving carbon neutrality.
Looking at the overall route to the market release of a hydrogen engine car, we are currently a little less thanhalfway there. The finish line is still far ahead, and there are still many issues to be figured out, but we are
steadily moving forward. Over the course of a year of racing with hydrogen engines, our hydrogen engine
technologies and initiatives to use hydrogen have evolved. At the same time, the number of our partners who
have joined our efforts to produce, transport, and use hydrogen has expanded from eight at the starting line to 25
as of August 2022.
With regard to hydrogen production, the range of available energy sources for producing hydrogen has
expanded to include solar power from Yamanashi Prefecture and Namie Town, Fukushima Prefecture;geothermal energy from Obayashi Corporation; lignite from Kawasaki Heavy Industries, Ltd., Iwatani
Corporation, and Electric Power Development Co., Ltd. (“J-Power”); and sewage biogas from Fukuoka City.
To transport hydrogen, Commercial Japan Partnership Technologies Corporation has improved its FC lightduty trucks, changing from a metal tank to a lightweight resin liner tank that can transport hydrogen at higher
pressure, achieving an approximately four-fold increase, as of June 2022, in the amount of hydrogen transported
annually. In addition, as a first step in procuring hydrogen from overseas, hydrogen transported by air to Japan by
Kawasaki Heavy Industries, Iwatani Corporation, and J-Power on a trial basis was used as fuel in Toyota’shydrogen-powered vehicles.
As for using hydrogen, we are working to improve cars and engines through agile development in the
demanding environment of motorsports. Over a year of racing, our hydrogen engines have evolved significantly,
increasing power output by 20%, torque by 30%*, and cruising range by 20%*, while hydrogen filling time has
been reduced from approximately five minutes to 90 seconds* (*figures as of June 30, 2022). We have also raced
with a GR86 modified to use another, nonhydrogen carbon-neutral fuel. The partners who joined us throughracing in the Super Taikyu Series are now accelerating initiatives outside of racing to achieve carbon neutrality.
Our efforts to develop hydrogen engine cars are extending beyond Japan. In August 2022, Morizo put a hydrogenengine car (a GR Yaris) through its paces in a demonstration run during the ninth round of the World Rally
Championship in Belgium. This enabled us to highlight the potential of hydrogen as an option for achievingcarbon neutrality in Europe. We also entered a hydrogen engine car in an endurance race in Thailand in
December 2022. Through our efforts to use hydrogen that began with hydrogen engine vehicles in the Super
Taikyu Series races in Japan, and gradual growth in understanding of our assertion that carbon is our enemy, notinternal combustion engines, hydrogen has come to be seen as an option for the future. Going beyond national,
regional, and industry borders, we will continue to push forward with our partners.

27

Software and Connected Initiatives
Amid this era identified by CASE, automobile manufacturing requires technological development in suchnew fields as “electrification,” “automated driving,” and “connectivity.” Among these fields, software isbecoming an important factor in determining product appeal. Today’s cars are equipped with more than 50
electronic control units, or ECUs, and use as many as 1,000 chips. Furthermore, society has entered the age of theinternet of things, and things being connected has become the norm. Cars are also equipped with communication
devices, further advancing their electronification, and the volume of software (lines of code) used in cars is thus
growing ever larger. Facing this major transformation in the automobile industry, Toyota is paying particularattention to how cellular phones have changed over time. As the shoulder phone evolved into the feature phone
and then into the smartphone, the phone, which had become commoditized, became linked with information,
creating new value through new experiences and quickly spread around the world. This change was supported bysoftware and connected technologies. Due to the CASE revolution, cars are becoming more deeply connected tocommunities and people’s lives through information, becoming a more integral part of social systems. At thesame time, Toyota will aim to have cars be more linked to information, and through the movement of people,
goods, and things, provide new value through new experiences and by bringing excitement to customers.
When it comes to the manufacturing of cars, Toyota has a basic stance that has been handed down internallyover the years: we stick to our principles and internalize important elements by attempting to first achieve themon our own. We also continue to introduce improvements on the front lines to enhance our competitive
advantage. Since its founding, Toyota has been producing various production equipment in-house as necessary.
In the 1990s, we pursued the in-house design of ECUs and established an electronics plant, a chip plant, and abattery plant. These efforts eventually led to the commercialization of the Prius, the world’s first mass-produced
HEV. Toyota has always maintained a strong awareness of the real world regardless of the era at hand, pursued
our principles, and promoted internalization. That is why in the area of software and connected technologies, weestablished the Toyota Research Institute (“TRI”), Woven by Toyota, Inc. (“Woven by Toyota”), and Toyota
Connected, and it is why we are working on the development of the e-Palette, the construction of Woven City asa town for pilot testing, and the development of the Arene platform and other technologies.
To date, Toyota has sold 20 million Lexus and Toyota vehicles that are connected cars, mainly in Japan, theUnited States, Europe, and China. Toyota’s vision of the connected car is not simply one of connecting the car to
the internet. Rather, it is about providing customers with emotional experiences through the movement of people,
goods, and activities — a vision centered on people that we call “human connected.” To achieve this, we areoperating a call center as a point of contact with customers; the Toyota Smart Center, which provides a variety ofservices; and the Toyota Big Data Center, which utilizes vehicle information gathered from cars. In addition, we
have established the Mobility Service Platform (“MSPF”) to provide mobility services and are promoting
collaboration with service providers. Connected cars and connected technologies will be applied to a variety ofareas, and we anticipate that which is to be connected will expand to include people, cars, communities, andsociety (business-to-society, or BtoS). Toyota will handle the information gathered from customers and vehicles
with care, utilizing it for the happiness of customers and the development of society while creating new value
from experiences centered on mobility.
With the e-Palette BEV used in the Olympic Village for the Olympic and Paralympic Games Tokyo 2020,
our goal was to create mobility that integrates cars and information and that coordinates with the community.
During the Games, 49,000 athletes, staff, and volunteers used e-Palette. We also developed a fleet management
system for e-Palettes based on the principles of the TPS to ensure effective, efficient, and accurate operation. The
system monitors the vehicles remotely and operates them in a just-in-time fashion according to the conditions of
the surrounding environment and the number of passengers. All of this was realized via the MSPF that Toyota
has been building and refining. 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.

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In this way, software has the power to promptly turn ideas into products. 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 thedifferences in vehicle hardware specifications (abstraction) and employs hardware abstraction layers that enablehardware to be controlled with universal methods. This, in turn, enables the independent development of
hardware and software as well as the reuse of software. Arene leverages the strengths of hardware cultivated by
Toyota to achieve the development of safe, high-quality, and advanced software.
Because increasingly complicated software development is becoming a bottleneck for cars, too, there is aneed for a revolutionary vehicle operating system that can solve these issues. The vehicle operating system willachieve TPS in software development as well, and we must continue to realize combinations of good hardware
and software. For example, when developing automated driving software, the on-board software needed forautomated driving actually makes up only a small portion of it; the rest comprises various tools, such as dataprocessing by the machine learning system, mounting, code review, software updates, log analyses, andsimulations. Basically, most of the software we develop is used “off-board” (that is, outside vehicles) or throughthe cloud. Arene is used to develop frameworks for vehicle development and development environments basedon those frameworks as well as to build ecosystems for mobility development. Using industry-leading software
technologies, we will strive to continue providing privacy-conscious, secure, and safe cars.
Furthermore, application development on Arene is also easy. We believe partner companies will be able toprogram applications more efficiently using Arene’s application programming interface (a mechanism that canshare software functions) and software development kit, which includes simulation environments. In this way, we
believe development on Arene will swiftly realize commercialization and enables users to share the fun ofproviding new ideas that appeal to customers while meeting the expectations of worldwide partners anddevelopers as well as the Toyota brand’s high-quality standards.
The portion of a car’s value attributable to software is growing. By internalizing the parts central to
Toyota’s future, we will strategically ensure the strengths of our hardware and software through internal
production, compartmentalize development undertaken with partners, and accelerate the speed of mass
production. 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 forby the equity method. We are also strengthening the teams responsible for the internal production anddevelopment of software.
Through connected technologies, we can contribute to carbon neutrality by gaining a better understanding of
the characteristics of each region in the form of data and combining this knowledge with realized technologies.
For example, according to market data, in Japan, the engine is turned off for half of all driving time in hybrid
electric vehicles, or HEVs, while for plug-in hybrid electric vehicles, or PHEVs, the engine is turned off for asmuch as 80 percent. We believe HEVs and PHEVs can evolve into environment-friendly vehicles to an evenhigher degree by upgrading the switching control of engines and electric motors. In other words, there is room to
expand the possibilities of both HEVs and PHEVs.
One mechanism that we believe will enable this is geofencing technology. A portmanteau of geography andfence, geofencing refers to the combination of navigation and cloud technologies to enable the automatic
switching of engine and motor functions in real time to reflect driving locations and driving times based on
geographic data. For example, in zero-emission regulation regions that limit vehicle operation to only BEVs
during certain time periods, geofencing would automatically control the functions of HEVs and PHEVs to ensurecompliance with regulations.
Furthermore, geofencing would enable anticipatory eco-driving that switches over to BEV driving as
appropriate by predicting the driving burden based on the driving environment up to the destination. We believe
utilizing connected technologies to control HEVs and PHEVs more intelligently will make it possible to further
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promote energy saving in cars. The new NX features a mechanism that switches to HEV control. We expect thatin the near future we will be able to conduct an over-the-air (“OTA”) update of its software so that it will be able
to use geofencing technology.
In October 2021, in advance of introducing geofencing technology that is under development with an eye
toward practical application, we introduced anticipatory eco-driving (anticipatory EV/HEV mode switching
control) in the Japanese market. It realizes highly efficient driving by automatically switching between EV andHEV modes depending on the charge left in the battery and the road conditions and characteristics.
OTA refers to using wireless connections to keep the software (control software and high-precision mapping
software) updated to the latest versions. This means that after a car’s purchase, new functions continue to be
added and its performance continues to be enhanced, thereby continuing the vehicle’s evolution into a safer andmore secure car that has the latest driving assistance technology.
For the LS and Mirai launched in Japan in April 2021, we have included cars that feature the latest
Advanced Drive function of the newest sophisticated driving assistance technologies developed by Toyota
Teammate/Lexus Teammate, and they are eligible for related software updates on an ongoing basis. 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. We will continue to evolve each car to best match each customer by reflecting updates (which are
based on feedback and data gained in races participated in by Morizo and ROOKIE Racing) and personalization(which is based on customer driving data) in the software in GR Garage shops through wired connections (notOTA). Furthermore, we offer better driving methods and support the enhancement of driving skills. Through this,we strive to realize cars that evolve to suit people by updating to the latest software in line with each customer.
Cars have a wide range of applications, from passenger cars to MaaS and commercial vehicles, and we willcontinue to expand the regions where we operate going forward. Needs are increasingly diversifying, and cars
can be used in a myriad of ways to meet them. Our efforts thus encompass people’s problems and social issues,
smiles and joy, and needed technological development.
The automobile industry must move people while also achieving coexistence with local communities. For
the future and for children, the Toyota family of companies is working on producing happiness for all throughfreedom of movement for all and the provision of exciting experiences. We will continue to enhance theexcitement that can be experienced by being able to move by combining real cars and the power of software. If
we combine innovation with technology, we expect that the value of cars will be enhanced further. We will also
contribute to the further development of society by going beyond the borders of cars and contributing tocommunity building and the creation of society-wide platforms.
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 toensure safe traffic infrastructure, including traffic signals and roads. To achieve a safe mobility society, Toyota
believes it will be important to implement an integrated three-part initiative involving people, vehicles, and thetraffic environment, as well as to pursue real-world safety by learning from actual accidents and incorporatingthat knowledge into vehicle development. “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, themoment before a collision, during a collision, and post-collision emergency response. We also aim to enhancesafety by strengthening inter-system coordination, rather than considering each system separately. These are theapproaches behind our Integrated Safety Management Concept.
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With regards to active safety, the Toyota Safety Sense system packages multiple active safety functions
based around three major functions considered effective in reducing serious traffic accidents causing death or
injury. These are Pre-Collision Safety, which helps avoid and mitigate damage from collisions with cars ahead orpedestrians; Lane Departure Alert, which contributes to preventing accidents caused by leaving the lane of travel;
and Automatic High Beam, which helps ensure clear sight in front of the vehicle at night. Since its market launch
in 2015, Toyota Safety Sense has been installed in more than 38 million vehicles globally as of March 2023.
Toyota Safety Sense is now available on nearly all passenger car models (as standard or an option) in theJapanese, United States, and European markets. It has also been introduced in a total of 120 countries andregions, including such key markets as China, other select Asian countries, the Middle East and Australia.
Another important concept is passive safety. In the context of automobiles, passive safety combines a bodystructure that absorbs collision energy with support to protect vehicle occupants to minimize collision damage. In
1995, in the pursuit of world-leading safety, Toyota created its own stringent internal target related to passive
safety performance called “Global Outstanding Assessment (“GOA”)” and developed a collision-safety bodystructure and passenger protection devices. Since then, to maintain its leadership in this field, Toyota hascontinued to evolve GOA, striving to improve the real-world safety performance of its vehicles in a wide varietyof accidents.
In addition, to analyze vehicle-related injuries, Toyota collaborated with Toyota Central R&D Labs., Inc. todevelop the Total Human Model for Safety (“THUMS”), a virtual human body model. THUMS is being used in
the research and development of a variety of safety technologies, including seat belts, airbags, and other safety
equipment, as well as vehicle structures that mitigate injuries in accidents involving pedestrians. Toyota madeTHUMS freely available through its website in January 2021 in the hope that it will be used by more people
across more applications.
Every minute counts in the response to an accident or medical emergency. In the event of an accident or
medical emergency, Toyota’s HELPNET® emergency reporting system service contacts a dedicated operator
who will arrange for the rapid dispatch of emergency vehicles from police, fire department, or emergency
services. 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 bysending vehicle data to the HELPNET center from an on-board data communication module.
Toyota has been engaged in the research and development of automated driving technologies since the1990s. The Mobility Teammate Concept is an automated driving concept unique to Toyota that seeks to enhancecommunication between drivers and their cars, enabling them to assist one another in coordinated driving as
companions. Rather than cars taking over driving from people and replacing them, we believe that drivers andcars can act as partners to protect one another, so that drivers can enjoy the experience of driving while deferring
to automated driving at times, and thereby achieving truly safe, secure and unrestricted mobility.
The Lexus LS and Mirai models launched in April 2021 are equipped with “Toyota/Lexus Teammate
state-of-the-art” driving assist technology, with some grades including Advanced Drive, a system that assists
driving on an expressways or other motor-vehicle-only roadways. The Advanced Drive on-board system willappropriately detect the vehicle’s surroundings, make decisions, and assist driving under the driver’s supervisionaccording to actual traffic conditions. It can keep the vehicle in its lane, maintain the distance from othervehicles, navigate a lane split, change lanes, and overtake other vehicles until leaving the roadway for thedestination. The system achieves high levels of safety and peace of mind, reducing driver fatigue and providing apleasant journey to the driver’s destination.
Deep learning-focused AI technologies support driving by predicting and responding to a wide variety ofsituations that could occur when driving. In addition, Advanced Drive is capable of Over-the-Air upgrades, andoccasional software updates may be issued. The system continues to add features and improve performance toenhance the driving experience and provide the latest safety technologies even after the vehicle has beendelivered to the customer.
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Cars have many uses, and customer needs continue to diversify. Accordingly, Toyota is advancing R&D
into automated driving technologies not only for personally owned vehicles (“POVs”), but also in the field of
MaaS. Toyota is one of the first companies to launch advanced automated driving technology for vehicles sold tocorporate customers. Data collected from these vehicles will then be collected, analyzed, and fed back intodevelopment to further evolve automated driving technologies for POVs.
Toyota carries out awareness-raising initiatives for drivers and pedestrians to help prevent traffic accidents.
One such initiative for drivers is the Toyota Driver Communication safe driving technique seminar held
periodically at Toyota Safety Education Center Mobilitas, on the grounds of Fuji Speedway. For pedestrians, incooperation with Toyota dealers across Japan, Toyota has been donating traffic safety teaching materials tokindergartens and nursery schools nationwide since 1969.
Commercial Sector Initiatives
Since the establishment together with other companies of the Commercial Japan Partnership Technologies(“CJPT”) joint venture in April 2021, Toyota has been working to disseminate CASE technologies in thecommercial sector and thereby contribute to the realization of carbon neutrality.
CASE technologies can only contribute to society once they become widespread. Commercial vehicles canplay important roles in CASE technology dissemination, as they travel long distances for extended periods oftime to support the economy and society and can be easily linked with infrastructure development. 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.
Distribution by truck accounts for the vast majority of overland logistics in Japan, and the transportation
sector (including buses and taxis) involves a significant number of people. Commercial vehicles account for asignificant amount of the total distance traveled by automobiles and CO2 emissions from automobiles in Japan.
Furthermore, the logistics companies operating in Japan currently face numerous management issues, such as
high-frequency distribution, harsh work environments, labor shortages, and rising burdens on workers. The
power of CASE, centered on connected technologies and services, is a promising approach to effecting
improvements that will help resolve these issues.
Solving these kinds of social issues is not something that one company can accomplish alone. It is necessary
to seek a wide range of like-minded partners, apply their different strengths, and work together for the sake of
those supporting transportation and for society.
As many of Japan’s roads are so narrow that only mini-vehicles can easily use them, mini-vehicles arecollectively 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. Similarly, commercial
mini-vehicles are able to effectively cover areas that their small size makes accessible, supporting logistics
operations mainly in the last mile.
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 ofcommercial mini-vehicles) while leveraging connected technologies and abundant data. This new collaboration is
also aimed at promoting the broader use of affordable advanced safety technologies and electrification byleveraging Suzuki and Daihatsu’s strengths in high-quality, low-cost manufacturing and Toyota’s CASE
technologies.
Our efforts to achieve carbon neutrality center on two pillars: electrification and improving logistics
efficiency.
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Amid pressure to enhance cost competitiveness, maintaining a competitive edge in the area of commercial
vehicle electrification is increasingly challenging. Competitiveness increasingly hinges on connected
technologies and uses of batteries and other technologies. Accordingly, manufacturers must step up the uniqueadded value that they offer.
We believe that improving transport efficiency will contribute greatly to realizing carbon neutrality. The
companies that are participating in CJPT will link their connected technology platforms to build a morecomprehensive 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 CO2 emissions. 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 runningcosts for logistics vendors and sustainably improve logistics.
In collaboration with its partners, CJPT began the construction and social implementation of an energy
management system (“EMS”) in Fukushima Prefecture and Tokyo in January 2023 to promote the widespreaduse of electrified vehicles.
The introduction of commercial electric vehicles imposes an increasing burden on society as a whole, notonly in terms of vehicle purchase, but also in terms of downtime for cargo and vehicles due to recharging andhydrogen filling and an increase in peak electricity demand at business sites due to the concentration ofrecharging at certain times.
A total of 580 commercial electrified vehicles will be used in this social implementation project, including
heavy- and light-duty fuel cell electric trucks, light-duty BEV trucks, and mini-commercial van BEVs, tocomprehensively cover transportation from trunk lines to the last mile. In addition, the use of an EMS that is
integrated with commercial vehicle operation management will help reduce the overall burden on society andCO2 emissions. At the project in Fukushima, we are working to create an implementation model focusing onhydrogen use in cities with populations of around 300,000, a common city size for Japan, with the aim ofapplying the model to similar-sized cities nationwide.
In addition, CJPT is working with AEON KYUSHU Co., Ltd. and AEON GLOBAL SCM Co., Ltd. on alogistics improvement project for the AEON Group in the Kyushu area that will solve problems faced by thelogistics industry, such as soaring logistics costs and driver shortages.
By combining the logistics expertise built up by AEON KYUSHU and AEON GLOBAL SCM with theconnected technologies of the companies participating in CJPT, the project aims to (1) establish new operations
to improve efficiency by linking each process in the supply chain, (2) improve efficiency by minimizing logistics
downtime through the use of big data and real-time processing on connected technology infrastructure and(3) promote collaboration with a wide range of partners to achieve these initiatives.
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.
Woven City
The Woven City project, first announced in January 2020, officially broke ground on February 23, 2021.
Woven City will demonstrate cutting edge technologies in such areas as automated driving, MaaS, personal
mobility, robotics, smart homes, and artificial intelligence in a real living environment. By rapidly implementing
development and demonstration cycles of technologies and services in this human-centered city, we aim tocontinue to produce new value and business models by utilizing the mobility of “information,” “goods,” and“people” to support daily life.
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Woven City will be constructed on the site of Toyota Motor East Japan’s former Higashi-Fuji Plant, which
was a pillar of production for Toyota for 53 years, starting in 1967. At its peak, the plant had 2,000 employees,
and a total of 7,000 individuals worked there over its history, producing such vehicles as the Toyota Century,
Toyota’s flagship chauffeur car infused with Toyota craftsmanship, and the JPN Taxi, a car that requires manytimes the durability of an ordinary passenger car.
The concept for Woven City can be traced back to the Great East Japan Earthquake in 2011. As our
President, Akio Toyoda sought to create jobs for the region’s people, who were hit hardest by the disaster, bycreating a third base of operations in the Tohoku region. Guided by his strong leadership, Toyota established
Toyota Motor East Japan, Inc. in 2012. However, this also led to the difficult decision to close the Higashi-Fuji
Plant. Looking for a way to carry on the Higashi-Fuji Plant’s legacy of manufacturing to help create future
mobility for the next 50 years, he arrived at the idea of transforming the site into a connected city as a large-scaledemonstration experiment.
At Woven City, we aim to make people happy by expanding what mobility can do for human beings andbuilding systems that will create novel value. In addition to the mobility of people, goods, and information, weemphasize that mobility also has an emotional component and represents feelings, such as being moved. Throughmobility that connects human hearts, Woven City will help us invent the technologies and services that will
become the future fabric of life, constantly evolving alongside the inventors who live there and our partners.
Woven City is a test course for mobility, enabling us to rapidly implement development and demonstration
cycles for diverse forms of mobility in both the virtual and the real world. For example, to achieve safe mobility,
Woven City will comprise three types of roads, woven together like warp and weft: paths for people, roads
shared by people and personal mobility devices, and roads for autonomous vehicles. We will use these roads toadvance the integrated three-part development of automated driving at the levels of people, vehicles, and thetraffic environment. Guided by the three concepts of “human-centered,” “a living laboratory,” and the “everevolving city,” Woven City will demonstrate technologies from logistics to energy, food, and agriculture as it
grows into a test course conducive to the timely generation of new inventions that address social issues.
One such initiative is the hydrogen refueling station to be built by ENEOS adjacent to Woven City. The
station will produce CO2-free hydrogen for supply to both FCEVs and to Woven City. Using Woven City as aliving laboratory, we will demonstrate a supply chain across the production, transportation, and use of hydrogen,taking new steps toward achieving carbon neutrality. The name “Woven City” comes from Toyota’s origins in
automatic looms. Sakichi Toyoda, the founder of the Toyota family of companies, was driven to invent an
automatic loom out of a desire to make his mother’s work easier. We have guarded and nurtured this spirit ofservice to others ever since. Woven City will take up this commitment from the Higashi-Fuji Plant, growing andevolving as the foundation for a new era at Toyota.
Financial Services
Toyota’s financial services include loan programs and leasing programs for customers and dealers. Toyota
believes that its ability to provide financing to its customers is an important value-added service. In July 2000,
Toyota established a wholly-owned subsidiary, Toyota Financial Services Corporation, to oversee themanagement of Toyota’s finance companies worldwide, through which Toyota aims to strengthen the overall
competitiveness of its financial business, improve risk management and streamline decision-making processes.
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.
Toyota’s sales revenues from its financial services operations were ¥2,809.6 billion in fiscal 2023,¥2,324.0 billion in fiscal 2022 and ¥2,162.2 billion in fiscal 2021. While there were negative factors in fiscal
2023, such as supply constraints on new cars due to the ongoing tight global semiconductor supply relative to34

demand, and increased competition with other financial institutions, Toyota’s business saw steady growth mainly
due to the higher interest rates on customer loans rate on the back of rising global interest rates and accumulatedbalance of earning assets resulting from enhanced used-vehicle financing. Under such circumstances, as a resultof 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 andLexus vehicles in regions where Toyota Financial Services Corporation operates remained at a high level ofapproximately 30%, and the balance of earning assets continued to steadily increase. In addition, Toyota ismaking efforts to provide both its customers and dealers with stable financial services by diversifying its funding
methods through direct financing from the market, such as ABCP (Asset Backed Commercial Paper) and ABS(Asset Backed Securities), in addition to using already existing means as commercial paper, corporate bonds andbank borrowings. Furthermore, Toyota continued to perform detailed credit appraisals and serve customers bymonitoring bad debt and loan payment extensions, but the percentage of credit losses rose to 0.17% and 0.30% infiscal 2022 and 2023, respectively, due to inflation and rising interest rates. Toyota continues to work towards
improving its risk management measures in connection with credit and residual value risks.
Toyota Motor Credit Corporation is Toyota’s principal financial services subsidiary in the United States.
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.

Toyota Motor Credit Corporation provides a wide range of financial services, including retail financing,retail leasing, wholesale financing and insurance. Toyota Finance Corporation also provides a range of financial
services, including retail financing, retail leasing and credit cards. Toyota’s other finance subsidiaries provide
services including retail financing, retail leasing and wholesale financing.
The KINTO subscription service, which started in Japan in 2019 in response to the shift from “owning” cars
to “using” cars, has been steadily enhancing its service lineup and gaining brand awareness. In Europe, fullservice leasing is being made available in wider areas. Furthermore, Toyota developed and provides customers
with the payment application “TOYOTA Wallet” as a platform that contributes to improving the convenience ofcustomers’ daily payments and creating a foundation for a mobility society.
Finance receivables for all of Toyota’s dealer and customer financing operations were ¥24,770.8 billion asof March 31, 2023, representing an increase of 13.8% as compared to the previous year. The majority of
Toyota’s financial services are provided in North America. As of March 31, 2023, 56.9% of Toyota’s financereceivables were derived from financing operations in North America, 14.0% from Europe, 12.0% from Asia,
6.3% from Japan and 10.8% from other areas.
Approximately 40% of Toyota’s unit sales in the United States during fiscal 2023 included a finance orlease arrangement with Toyota. Because the majority of Toyota’s financial services operations are related to thesale of Toyota vehicles, a decrease in vehicle unit sales may lead to a contraction of Toyota’s financial services
operations.
The worldwide financial services market is highly competitive. Toyota’s competitors in retail financing andretail leasing include commercial banks, credit unions and other finance companies. Commercial banks and other35

automobile finance subsidiary companies serving their parent automobile companies are competitors of Toyota’s
wholesale financing activities. Competitors in Toyota’s insurance operations are primarily national and regional
insurance companies.
For information on Toyota’s finance receivables and operating leases, please see “Item 5. Operating and
Financial Review and Prospects — 5.A Operating Results — Financial Services Operations.”
Retail Financing
Toyota’s finance subsidiaries acquire new and used vehicle installment contracts primarily from Toyota
dealers. Installment contracts acquired must first meet specified credit standards. Thereafter, the financecompany retains responsibility for installment payment collections and administration. Toyota’s financesubsidiaries 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. In most cases, Toyota’s finance subsidiaries require
their retail financing customers to carry automobile insurance on financed vehicles covering the interests of boththe finance company and the customer.
Toyota has historically sponsored, and continues to sponsor, special lease and retail programs by subsidizing
below market lease and retail contract rates.
Retail Leasing
In the area of retail leasing, Toyota’s finance subsidiaries acquire new vehicle lease contracts originatedprimarily through Toyota dealers. Lease contracts acquired must first meet specified credit standards after which
the finance company assumes ownership of the leased vehicle. The finance company is generally permitted totake possession of the vehicle upon a default by the lessee. Toyota’s finance subsidiaries are responsible forcontract collection and administration during the lease period. The residual value is normally estimated at thetime the vehicle is first leased. Vehicles returned to the finance subsidiaries at the end of their leases are sold byauction. For example, in the United States, vehicles are sold through a network of auction sites, as well as
through the Internet. In most cases, Toyota’s finance subsidiaries require lessees to carry automobile insurance
on leased vehicles covering the interests of both the finance company and the lessee.
Wholesale Financing
Toyota’s finance subsidiaries also provide wholesale financing primarily to qualified Toyota dealers tofinance inventories of new Toyota vehicles and used vehicles of Toyota and others. 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 adealer defaults, the finance companies have the right to liquidate any assets acquired and seek legal remedies.
Toyota’s finance subsidiaries also make term loans to dealers for business acquisitions, facilities
refurbishment, real estate purchases and working capital requirements. These loans are typically secured withliens on real estate, other dealership assets and/or personal assets of the dealers.
Insurance
Toyota provides insurance services in the United States through Toyota Motor Credit Corporation’s wholly
owned subsidiary, Toyota Motor Insurance Services, Inc. (“TMIS”) and its wholly owned insurance company
subsidiaries. Their principal activities include marketing, underwriting and claims administration. TMIS also
provides coverage related to vehicle service agreements through Toyota dealers to customers. In addition, TMIS
also provides coverage and related administrative services to affiliated companies of Toyota Motor Credit
Corporation. Toyota dealers in Japan and in other countries and regions also engage in vehicle insurance sales.
36Other Financial Services
Toyota Finance Corporation launched its credit card business in April 2001 and began issuing Lexus credit
cards in 2005 when the Lexus brand was introduced in Japan. As of March 31, 2023, Toyota Finance Corporationhas 15.7 million card holders (including Lexus credit card holders).
All Other Operations
In addition to its automotive operations and financial services operations, Toyota is involved in a number ofother non-automotive business activities. Sales revenues for these activities totaled ¥1,224.9 billion in fiscal
2023, ¥1,129.8 billion in fiscal 2022, and ¥1,052.3 billion in fiscal 2021.
Governmental Regulation, Environmental and Safety Standards
Toyota is inevitably required to comply with the regulations applied to its products relating to the emission
levels, fuel economy, noise, safety and so on. In addition, Toyota is subject to laws in various jurisdictions
regulating the levels of pollutants generated by its plants. Toyota has incurred significant costs in complying withthese laws and regulations and expects to incur significant compliance costs in the future. Toyota’s management
views leadership in environmental protection as an important competitive factor in the marketplace.
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 theconstruction and approval of wheeled vehicles. 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. As the progress of the international
harmonization of technical prescriptions will lead to the reduction of the variations in product specifications fromcountry to country, it is expected to lead to greater efficiency in Toyota’s product development.
Vehicle Emissions
Japanese Standards
The Air Pollution Control Act of Japan and the Road Transport Vehicle Act and the Act Concerning Special
Measures for Total Emission Reduction of Nitrogen Oxides and Particulate Matter from Automobiles inSpecified Areas regulate vehicle emissions in Japan. In recent years, in addition to the strengthened regulations
on particulate matters emitted from gasoline-fueled vehicles, as can be seen from the adoption of the Worldwide
Harmonized Light Vehicles Test Cycle (“WLTC”) driving cycles and the introduction of the Real Driving
Emission (“RDE”), more stringent regulations have been decided to be introduced to match the European
Standards. Moreover, both the Noise Regulation Act and the Road Transport Vehicle Act provide for noise
reduction standards on automobiles in Japan.
U.S. Federal Standards
The federal Clean Air Act directs the Environmental Protection Agency (“EPA”) to establish and enforce air
quality standards, including emission control standards on passenger vehicles, light-duty trucks and heavy-duty
vehicles. Manufacturers are not permitted to sell vehicles in the United States that do not meet the standards. In
March 2014, the EPA finalized new “Tier 3” tailpipe emission and evaporative emission standards for passenger
vehicles, light-duty trucks, medium-duty passenger vehicles and some heavy-duty vehicles. Under the rule,37

tailpipe emission standards for volatile organic compounds, carbon monoxide, nitrogen oxides, and particulatematter, 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 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 April 2023, new Tier 4 emission standards were proposed for passenger vehicles, light-duty trucks,
medium-duty passenger vehicles and some heavy-duty vehicles from model year 2027 onwards, including more
stringent emissions standards than those for California.
California Standards
Under the federal Clean Air Act, the State of California has been permitted to establish its own vehicle
emission control standards if it receives a waiver from the EPA that allows the California standards to preempt
less-stringent federal standards. The EPA granted such a preemption waiver to California in January 2013. The
waiver provides a legal basis for California’s Advanced Clean Cars (“ACC”) program.
In January 2012, the California Air Resources Board (“CARB”) adopted the ACC program. The ACC
program, developed in coordination with the EPA and the federal National Highway Traffic Safety
Administration (“NHTSA”), includes Low-Emission Vehicle (“LEV”) regulations, known as the LEV III
regulations, that reduce emissions of smog-causing pollutants (volatile organic compounds, carbon monoxide,
nitrogen oxides and particulate matter) and greenhouse gases from passenger cars and light-duty trucks for modelyears 2015 to 2025. The regulations include standards for evaporative emissions and guaranteed useful life as
well.
The ACC program also includes a mandate for zero-emission vehicles. 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. Toyota’s MIRAI
qualifies as a zero-emission vehicle. The current Prius Prime has been certified as a partial zero-emission vehicle.
Toyota intends to continue to develop additional advanced technologies and alternative fuel technologies thatwill allow other vehicles to qualify as zero-emission vehicles or partial-zero-emission vehicles.
The Advanced Clean Cars II (“ACC II”) regulations will go before the CARB on June 9, 2022. ACC II
includes LEV IV regulations that would further reduce emissions from light- and medium-duty vehicles, and an
expanded mandate that would increase the percentage of ZEV vehicles that manufacturers must sell in California.
The new LEV IV regulations and expanded ZEV mandate would apply to model years 2026 – 2035.
California has adopted regulations that require that On-Board Diagnostics (“OBD”) systems be incorporated
into the computers of vehicles sold in California. OBD systems monitor components that can affect the emission
performance of a vehicle and, if a problem with a component is detected, illuminates a warning light on thevehicle’s instrument panel. The systems also store the malfunction information in the computer to facilitate
repairs. California’s OBD regulations are the most stringent in the world. In addition, in November 2022, the
CARB adopted the ACC II program covering model years 2026 to 2035. The ACC II program consists of twoparts. The first is regulations on zero-emission vehicles. Under the California Governor’s Order of 2020
(N-79-20), all new vehicles sold in California will be zero-emission vehicles by 2035. The second is the LEV(Low Emission Vehicle) 4 regulation, which strengthens emission standards for volatile organic compounds,
carbon monoxide, nitrogen oxide, and particulate matter from passenger vehicles and light-duty trucks, except
for ZEVs, and guaranteed service life, as well as evaporative emission standards.
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 and38

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. As of November 2022, according
to CARB, Minnesota, Nevada, New Mexico and Virginia are planning to introduce California low-emission
vehicle emissions regulations.
Canadian Standards
Canada has finalized vehicle emission standards equivalent to the federal standards in the United States in
October 2014, in response to the strengthening of the federal vehicle emission standards in the United States
applicable to model years 2017 to 2025. Furthermore, certain Canadian provinces are currently considering
enacting their own regulations. On January 11, 2018, the Ministry of Sustainable Development, Environment andthe Fight against Climate Change of the Province of Quebec issued regulations on zero-emission vehicles
including BEVs, FCVs and PHEVs, among others. In November 2018, the premier of British Columbia
announced that the government would introduce legislation concerning zero-emission vehicles (indicating thephase-in introduction starting from model year 2020). Canada also adopted a more stringent fuel rule, which isbased on the fuel rule in the United States, that reduces refineries’ annual average sulfur concentration ofgasoline to 10mg/kg from 2017 with a new addition of credit system to secure compliance. In December 2022,
Environment and Climate Change Canada submitted a proposal to regulate zero-emission vehicles from modelyears 2026 to 2035. The proposal incorporates Transport Canada’s declaration in July 2021 that it will introduce
100% zero emissions for light-duty passenger vehicles and light-duty trucks sold after 2035.
European Standards
In 2007, the European Parliament adopted more stringent emission standards for passenger vehicles andlight commercial vehicles. The effective date for phasing in these stricter standards for passenger vehicles was
September 2014 for Euro 6. For light commercial vehicles, the effective date was September 2015 for Euro 6.
The primary focus of Euro 6 is to limit further emissions of diesel-powered vehicles and bring them down toa level equivalent to gasoline-powered vehicles. The EU is now implementing the RDE regulations, which
require manufacturers to conduct on-road emissions tests using portable emissions testers to demonstratecompliance. Since September 2017, manufacturers have been required to reduce the divergence between theregulatory limit tested in laboratory conditions and the values of RDE tests, and this divergence factor was mademore stringent for all new vehicles effective January 2021. The EU is now also implementing the Worldwide
harmonized Light vehicles Test Procedure (“WLTP”), which was introduced on September 1, 2017. The OBD
regulations have also been tightened in terms of both subject parts and regulatory values. Effective January 1,
2019, the EU implemented an improved WLTP that purports to eliminate test flexibilities and introduces
on-board fuel and energy consumption monitoring devices.
Discussions are currently underway for Euro 7, which will be more stringent than Euro 6. The European
Commission expects to publish the Euro 7 proposed limits in the third quarter of 2022.
Chinese Standards
The next-generation emissions regulations for passenger vehicles, or Level 6 Emissions Regulations (China6), were issued as GB18352.6-2016 at the end of 2016, pursuant to which tighter requirements will be
implemented in two steps, depending on the regulated subjects and the implementation timing. Specifically,
China 6a will apply to all models to be sold or registered in July 2020 and beyond, and China 6b will apply to allmodels to be sold or registered in July 2023 and beyond. China 6b will also introduce the RDE Regulations
adopted under Euro 6. The OBD regulations have also been tightened in terms of both subject parts andregulatory values. With respect to fuels in the market, the quality standards and the implementation from January
2019 for China 6 gasoline fuel and China 6 diesel fuel have been provided in GB17930-2016 and GB19147-2016
so as to keep up with the implementation timing of China 6 emissions regulations. Moreover, for some areas
39

where the air quality improvement is an urgent necessity, China 6 was implemented ahead of the implementation
throughout China. Discussions are currently underway for Level 7 Emissions Regulations (“China 7”), which
will be more stringent that the China 6 Emissions Regulations.
For heavy-duty diesel-powered commercial vehicles, pursuant to GB17691-2005, the China V Emissions
Regulations are being implemented from July 2017. With the establishment of GB17691-2018, which provides
next-level China VI Emissions Regulations (“China VI”), it has been decided that China Via will be implemented
from July 2021 and China Vib from July 2023 (these regulations will apply to gas-fueled vehicles and publicvehicles for urban areas earlier than those dates). For heavy-duty gasoline-powered commercial vehicles,
pursuant to GB14762-2008, Level IV Emissions Regulations (“China IV”) apply to new models after July 2012.
After the first day the regulation is implemented to a new model, all new models released during the following
one-year period also become subject to the regulation. Tightening of the next-generation emissions regulations(China V and China VI) is currently considered for heavy-duty gasoline-powered commercial vehicles.
Standards of Other Countries or Regions
In particular, in India, given the worsening air pollution, in December 2015, the Supreme Court banned theregistration of diesel cars with engines that are two liters or larger in the National Capital Region, including theDelhi metropolitan area. In August 2016, the ban on registration was lifted on the condition that a deposit equal
to 1% of the vehicle’s retail price is to be paid to the Environment Pollution Control Authority. Furthermore, thegovernment accelerated the implementations of BS-6 (equivalent to EURO6) to 2020. 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. Fuel economy standards are establishedaccording to the types of vehicles, and are required to be met by either fiscal 2011 (April 2010-March 2011),
fiscal 2016 (April 2015-March 2016), fiscal 2021 (April 2020-March 2021), fiscal 2023 (April 2022-March
2023), fiscal 2026 (April 2025-March 2026) or fiscal 2031 (April 2030-March 2031). From 2020, if the WLTC
mode is applied as a vehicle emissions test cycle, fuel economy test must be also conducted based on the WLTC
mode.
U.S. Standards
The Federal Motor Vehicle Information and Cost Savings Act requires automobile manufacturers to comply
with 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 thedifference between the average fuel economy performance of their vehicles and the CAFE standards. Credits
earned for the five model years preceding the current model year, and credits projected to be earned for the next
three model years, can be used to meet CAFE standards in a current model year.
In December 2011, the EPA and the NHTSA issued a joint proposed rule to further reduce greenhouse gas
emissions and improve fuel economy for passenger cars, light-duty trucks and medium-duty passenger vehicles
for model years 2017 through 2025. Pursuant to the rule, which was finalized in August 2012, these vehicles
would be required to meet an estimated combined average emission level of 163 grams of carbon dioxide permile in model year 2025, equivalent to 54.5 miles per gallon if these requirements are met through improvements
in fuel economy standards. At the same time, the NHTSA issued CAFE standards for passenger vehicles andlight-duty trucks that would require manufacturers to meet an industry average fuel economy level of 49.6 miles
per gallon in model year 2025.
40

Under the Trump Administration, the EPA and the NHTSA proposed less stringent greenhouse gas emission
standards and CAFE standards, and the withdrawal of California’s waiver to issue its own, more stringent
greenhouse gas emission standards under the LEV III program. However, under the Biden Administration, the
EPA and the NHTSA withdrew these proposed greenhouse gas emission standards and CAFE standards, and in
March 2022, the EPA reinstated California’s authority to enforce its own greenhouse gas emissions standards.
On December 30, 2021, the EPA issued a final rule revising passenger car and light-duty truck greenhousegas emissions standards for model years 2023 through 2026. The new rule is based on Presidential Executive
Order 13990 and is more stringent compared to the Safer Affordable Fuel Efficient (“SAFE) Vehicles Ruleissued in April 2020 which temporarily relaxed the greenhouse gas emissions rate to 1.5% per year. The new rule
reduces greenhouse gas emissions, year-over-year, by 10% for model year 2023, 5% for 2024, 6.6% for 2025,
and more than 10% for 2026. Based on these reductions, the industry-wide average emission targets forpassenger cars and light-duty trucks is projected by the EPA to be 161 grams of carbon dioxide per mile in modelyear 2026.
On March 31, 2022, the NHTSA issued a final rule revising passenger car and light-duty truck fuel economy
standards for model years 2024 through 2026. As with the EPA’s greenhouse gas emission rule, this new rule isbased on Presidential Executive Order 13990. The new rule establishes standards that would require an industrywide fleet of approximately 49 mpg for passenger cars and light duty trucks in model year 2026. This is to beachieved by increasing fuel efficiency, year-over-year, by 8% for model year 2024, 8% for 2025, and 10% for2026 which is more stringent than the SAFE Vehicles Rule that temporarily relaxed the rate to 1.5% per year.
In April 2023, the EPA announced new proposed greenhouse gas emissions standards for light-duty vehicles
from model years 2027 to 2032. The proposal incorporates Executive Order 14037 which requires 50% of newvehicles sold in 2030 be zero-emission vehicles and that model year 2032 vehicles meet the industry average CO2
emission level of 82 grams per mile.
European Standards
In the EU, the average carbon dioxide emissions limit for light commercial vehicles is currently 147 grams
per kilometer and for passenger vehicles 95 grams per kilometer. Manufacturers failing to meet their targets incur
penalties of €95 from the first gram of exceedance onwards in 2019 and beyond. Starting in 2021, theseemissions targets are tested using the WLTP.
In April 2019, the European Parliament and the Council adopted new carbon dioxide standards for vehicles
and light commercial vehicles for the period after 2020. Average emissions of the EU fleet of new vehicles andlight commercial vehicles in 2025 must be 15% lower than in 2021, and by 2030, emissions must be reduced
further to 37.5% and 31% of 2021 levels for vehicles and light commercial vehicles, respectively. From 2025, a
crediting system will be introduced to relax a manufacturer’s specific carbon dioxide emissions targets where the
manufacturer produces numbers of “zero and low-emission vehicles” above specified benchmarks.
In March 2023, the European Parliament and the European Council approved new carbon dioxide standards
applicable to automobiles and light-duty commercial vehicles in 2030 and 2035. By 2030, it will be required toreduce emissions by 55% per automobile and 50% per van compared to 2021 levels, and by 2035, it will be
required to reduce emissions by 100% per automobile and van compared to 2021 levels.
To achieve a climate-neutral EU by 2050 and an intermediate target of at least 55% net reduction ingreenhouse gas emissions by 2030, the European Commission proposed in July 2021 substantially more stringent
carbon dioxide emissions targets for vehicles and light commercial vehicles, as part of its “Fit for 55” package.
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. In
addition, the proposal introduces a new 2035 carbon dioxide target set at a 100% reduction for new vehicles and41

vans, again relative to the 2021 baseline. The 2025 target remains unchanged at a 15% reduction for both newvehicles and vans. The proposal has not yet been finalized.
An EU directive on motor vehicle air conditioning units requires manufacturers to replace the refrigerants
with that having a lower global warming impact for all newly registered vehicles starting in January 2017.
Chinese Standards
Fuel consumption regulations are being implemented pursuant to the Chinese National Standards (“GB”),
and the manufacture and sale of vehicle models not meeting these regulations are prohibited. For light-duty
passenger vehicles, GB27999-2011 was issued. 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. Furthermore, in order toachieve 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 eachmodel, is being applied to new models after January 2016. Second, GB27999-2014, which has been enacted as
Level 4 Fuel Consumption Regulations for passenger vehicles to strengthen corporate average regulations, hasbeen in effect since 2016. In 2021, the fuel economy test mode was changed from NEDC to WLTC, and theLevel 5 Fuel Consumption Regulations for passenger vehicles to achieve the average fuel efficiency target by2025, GB19578-2021 and GB27999-2019, has been in effect since 2021. Currently, Level 6 Fuel Consumption
Regulations for passenger vehicles are being considered as more stringent fuel consumption regulations. For
light-duty commercial vehicles, GB20997-2015 was enacted, which further applied Level 3 Fuel Consumption
Regulations to all new vehicles from January 2018 and is currently being enforced. Moreover, theimplementation of the Life Cycle Assessment (LCA), which comprehensively regulates the amount of carbon
dioxide emitted during the vehicle manufacturing, use, and disposal processes, among others, is being consideredearlier than in the rest of the world.
With respect to large commercial vehicles, pursuant to GB30510-2018, Level 3 Fuel Consumption
Regulations apply to new vehicles from July 2019 and are currently being enforced. In addition, in an effort tofurther strengthen fuel consumption regulations for the next generation, Level 4 Fuel Consumption Regulations
are currently being considered.
Standards of Other Countries or Regions
India, Saudi Arabia, Brazil, Chile, Mexico, New Zealand, South Korea and Taiwan have imposed
regulations that require automobile manufacturers to reduce fuel consumption and carbon dioxide emissions.
Vehicle Safety
Japanese Standards
Japan has been participating in the 1958 Agreement of the UN and has a number of technical standards thatare harmonized with the UN Regulations.
Furthermore, unique to Japan, the safety standards for automated driving systems were established in March
2020, requiring, in addition to a certain level of performance of automated driving system, the installation of anevent data recorder and cyber security measures against unauthorized access. In addition, a certification program
was introduced in April 2020 with respect to the system to control sudden acceleration by mixing up the gas andbrake pedals as well as the collision damage mitigation brake system.
In addition, the approvals required for fuel-cell vehicles using compressed hydrogen under the High
Pressure Gas Safety Act and the Road Vehicles Act were consolidated at the ordinary session of the Diet in 2022.
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U.S. Standards
In November 2021, the Bipartisan Infrastructure Bill was signed into law by President Biden. It requires the
NHTSA create regulations that cover a wide range of matters, including the application of preventive safety
technology, the strengthening of USNCAP, and the prevention of drunk driving, in order to improve road safety.
In response to this, NHTSA sought public comments in 2022 regarding the strengthening of USNCAP and
expansion of the recording requirements regarding Event Data Recorders (EDR). Notices for further publiccomments on the USNCAP, pedestrian protection and autonomous emergency braking are also expected to beissued in the future. With respect to automated driving vehicles, on January 8, 2020 the Trump Administrationand the U.S. Department of Transportation released Ensuring American Leadership in Automated Vehicle
Technologies: Automated Vehicles 4.0 (“AV 4.0”). AV 4.0 unified efforts across 38 Federal departments,
independent agencies, commissions, and Presidential Executive Offices in providing high level guidance to stateand local governments and other stakeholders. AV 4.0 also established Federal principles for the development
and integration of automated vehicles. California and many other states, despite AV 4.0, have adopted different
approval systems so that automated vehicles must be compliant with regulations and systems that vary from state
to state. On December 23, 2020, California issued its first autonomous vehicle deployment permit.
European Standards
In December 2019, the EU issued the revised General Safety Regulation to tighten the requirements
concerning safety and the protection of vehicle occupants and vulnerable road users. This revised General Safety
Regulation will make certain vehicle safety equipment mandatory in stages starting 2022, including: automatedemergency 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 relation to this, various UN Regulations were developed, and for theequipment 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. 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. In the case of automated driving vehicles, it is also possible to obtain approval under this framework only
for cars produced in small quantities.
United Nations Standards
The United Nations restructured the existing working parties and established the Working Party on
Automated/Autonomous and Connected Vehicles (“GRVA”) that is dedicated to the development of regulations
on automated driving. The GRVA is developing regulations covering functional safety requirements, newevaluation test method requirements, cybersecurity, software updates, data recording for automated driving
vehicles and data recording in case of an accident. The new regulations on cyber security, software updates andautomated lane keeping system came into effect in January 2021.
Chinese Standards
Vehicle safety regulations in China were in general established having regard to the UN regulations.
However, China’s own national technical standards on functions such as batteries, motors, and the charging andremote surveillance of BEVs have been made mandatory. Fuel-cell vehicles are subject to the supervising
regulations on the safety of high pressure gas in addition to the vehicle type approval requirement. Moreover, in
accordance with the Made in China 2025 policy, more than 100 standards for intelligent connected vehicles(“ICV”) are being developed (including automation, telecommunication and security).

43

Environmental Matters
Japanese Standards
Automotive operations in Japan are subject to substantial environmental regulation under laws such as the
Air Pollution Control Act, the Water Pollution Prevention Act, the Noise Regulation Act and the Vibration
Control Act. 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 isalso required to comply with the applicable standards. Toyota is subject to local regulations, which in some cases
impose more stringent obligations than the Japanese central government requirements. Under the Waste
Management and Public Cleansing Act, producers of industrial waste must dispose of industrial waste in themanner prescribed in the same act.
The Soil Contamination Countermeasures Act of Japan requires that landowners conduct contamination
testing and submit a report at the time they cease to use hazardous substances, such as in connection with the saleof a former factory, or if there is a possibility of health hazards due to land contamination. If it is found that land
contamination exceeds a certain level, the relevant prefectural authority designates the area as considered to becontaminated, orders the landowner to submit a plan for decontamination (such plan must describe the measures
to be taken in the area, the reasons therefor, and the deadline for implementing such measures, etc.), and has thelandowner take such measures in accordance with such plan. In addition, under the Act on Recycling, etc. of
End-of-Life Vehicles, vehicle manufacturers are required to take back and recycle specified materials(automotive shredder residues, air bags and fluorocarbons) of end-of-life vehicles and the provisions concerning
such obligations of vehicle manufacturers became effective in January 2005. 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 being70%) and 95% for air bags (the legal requirement being 85%) and reached the targets set forth in this law.
U.S. Standards
The environmental regulations applicable in the United States include, among others, the Clean Air Act, theClean Water Act, the Resource Conservation and Recovery Act, the Pollution Prevention Act of 1990 and the
Toxic Substances Control Act. Toyota is subject to a variety of state legislation that parallels, and in some cases
imposes more stringent obligations than, federal requirements.
Pursuant to the Clean Air Act, the EPA has promulgated National Ambient Air Quality Standards(“NAAQS”) for six “criteria” pollutants including for particulate matter. The Clean Air Act requires that the EPA
review and possibly revise these NAAQS every five years. On January 6, 2023, the EPA announced a proposeddecision to revise primary (health-based) annual particulate matter (PM2.5) standard from its current level of 12.0μg/m3 to within the range of 9.0 to 10.0 μg/m3. The EPA proposed to make no changes to the current secondary(welfare-based) annual PM2.5 standard, primary and secondary 24-hour PM2.5 standards, and primary andsecondary PM10 standards. If implemented this proposed standard, as well as any future NAAQS revisions toother criteria pollutants, could lead to additional pollution control requirements on the industry, including on
Toyota’s manufacturing operations.
European Standards
In the EU, the Ambient Air Quality and Clearer Air for Europe Directive (Directive 2008/50/EC) sets theenvironmental standards for air quality. In relation to this, environmental regulations, such as the National
Emissions Ceilings Directive, or NEC Directive (2016/2284/EU), the Industrial Emissions Directive, or IED
Directive (2010/75/EU), and Directive 2007/46/EC, which is intended to control on-road emission sources, havebeen established, and emissions are managed under these directives based on their source.
44

The European Commission is currently reviewing the EU Directive on End-of-Life Vehicles with a public
consultation process. The Commission expects to present a legislative proposal for revisions to this directive in2022.
Toyota strives to ensure that its operations are in compliance with environmental regulatory requirements
concerning its facilities and products in each of the markets in which it operates. Toyota continuously monitorsthese requirements and takes necessary operational measures in an effort to ensure that it remains in material
compliance with all of these requirements. However, compliance with environmental regulations and standards
has increased costs and is expected to lead to higher costs in the future. Therefore, Toyota recognizes that
effective environmental cost management will become increasingly important. Moreover, innovation andleadership in the area of environmental protection are becoming increasingly important to remain competitive inthe market. As a result, Toyota has proceeded with the development and production of environmentally friendly
technologies, such as hybrid electric vehicles, PHEVs, FCEVs, BEVs and high fuel efficiency, low emission
engines.
In addressing environmental issues, based on an assessment of the environmental impact of its products
through their entire life cycles, from production through sales, disposal and recycling, Toyota, as a manufacturer,
strives to take all possible measures from development stage and continues to work towards technologicalinnovations to make efficient use of resources and to reduce the burden on the environment.
Toyota’s Approach to and Initiatives Towards Sustainability
The following is a discussion of Toyota’s approach to and initiatives towards sustainability. It contains
forward-looking statements that are based upon the current judgment, assumptions and beliefs of Toyota’s
management. See “Cautionary Statement With Respect To Forward-Looking Statements.” Actual business,financial and operational results may vary significantly from those described below as a result of unanticipatedchanges in various factors, including those described in “Risk Factors.”
GovernanceToyota has inherited the spirit of “Toyoda Principles” since our foundation, and has aimed to create aprosperous society through our business activities, based on “the Guiding Principles at Toyota.” In 2020, basedon these Principles, we compiled the “Toyota Philosophy” and set the mission of “Producing Happiness for All.”
We aim to be the “best company in town” that is both loved and trusted by people. We aim to contribute to thesustainable development of our society and planet through such “Toyota Philosophy.”
In order to grasp changes in the external environment and societal demands, and to prioritize issues ofgreater importance and urgency, we continuously strive to promote and improve environmental, social, andgovernance sustainability activities while working closely with the relevant groups under the promotion system
illustrated below and under the supervision and decision-making of the Board of Directors.
Furthermore, we have appointed a Chief Sustainability Officer (“CSO”) to lead the engagement withexternal stakeholders and dissemination of information regarding sustainability activities.

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<Sustainability promotion system>
Management Oversightand Decision-making

Consultation

Board of Directors

Sustainability Meeting
Opinions andadviceOperational
Execution

Consultation

Reports

Operation

Sustainability
Subcommittee

Sustainability Meeting

Sustainability Subcommittee

Chairperson

President

Deputy Chief Officer, General
Administration & Human Resources Group(Senior management position responsible forsustainability)

Members

Members include three Outside Directors /Outside Audit & Supervisory Board Members,
the Chief Sustainability Officer and the Chief
Human Resources Officer

Officers and General / Managers from related
divisions will participate in keeping withagenda topics such as the environment,
financial affairs, and human resources

Frequency

Twice a year, in principle

Four times a year, in principle

Function••

To implement operations related to thepromotion of sustainability•

To consult with the Sustainability
Meeting about key issues and submit
reports to the Board of Directors

To help increase corporate value byreflecting opinions and external advice
about key sustainability-related issues inmanagement practices to achievesustainable growth

Risk Management
Toyota will strengthen risk management in response to uncertainties amid our constantly needing to rise to
new challenges in the era of major changes in the circumstances surrounding, and in the values of, theautomobile industry, such as carbon neutrality, CASE and other factors.
In order for each region, function, and in-house company to cooperate and support each other and prevent,mitigate, and reduce risks arising in business activities from a global perspective, Toyota has appointed a Chief
Risk Officer (“CRO”) and Deputy CRO (“DCRO”) in charge of risk management, as well as regional CROs toserve as the head of risk management in each region. Furthermore, Toyota has established the below promotion
system, and the CRO/DCRO takes up each important risk that requires a prompt response at meetings of theBoard of Directors and other management meetings, where they are discussed.

46

<Risk management promotion system>

Shareholders’ Meeting
Board of Directors

CRO/DCRO

Respective groupat the parent company

Regional CRO

Regional functions

Collaboration

Respective in-house company

Chief officers

Risk Manager by division

Collaboration

Presidents

Risk Manager by division

Collaboration
In addition, as a risk management system framework, we estimate, identify, and evaluate risks based on the
Toyota Global Risk Management Standard (“TGRS”), a company-wide risk management framework based on
ISO (International Organization for Standardization and COSO (Committee for Sponsoring organizations of theTreadway Commission).
Approach to and Initiatives Towards Human Resources
The Toyota group has been focusing on human resource development since its foundation based on thephilosophy that “monozukuri (manufacturing) depends on human resource development.”
In the midst of a once-in-a-century transformation taking place in the automobile industry, the Toyota grouphas set out the theme of inheritance and evolution and is doing its utmost to realize its transformation into a
mobility company for the future in addition to carrying on what makes us Toyota — “let’s make ever-bettercars,” “let’s aim to be best-in-town, rather than being the best in the world” and “let’s work for the sake ofothers.”Amid the era in which it is hard to predict the future, each and every one of us at Toyota, our 370,000
colleagues around the world, must share the same thoughts, working together organically as a team at the sametime in order to uphold our founding spirit and what makes us Toyota, as symbolized by the Toyoda Principles,
and to carve out the future of automobiles using the Toyota Philosophy as a guideline, and to that end, we need todevelop human resources.
Looking at the global Toyota group as a whole, in addition to instilling the philosophy in all regions aroundthe world, through various opportunities such as training for global executive candidates, the head office andregional entities are working together to strengthen a common foundation for human resource development basedon Toyota’s “philosophy, skills, and behavior (such as Toyota Philosophy and TPS).” In addition, for regional
entities, we are promoting the establishment of a system that flexibly promotes the formulation and execution ofhuman resource strategies rooted in the region in response to the characteristics of the region and the diverse
needs of customers.
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We have also been engaged in ongoing dialogue between labor and management regarding investment in
human resources, including human resources development. In March 2023, under the shared value of “thecompany wishes for the happiness of its employees and employees wish for the development of the Company,”
we held discussions between labor and management on various measures for the future based on the common
recognition that “people” are our greatest asset. We have also confirmed specific initiatives to lead to speedychange.
In an era where our circumstances change rapidly is fast and the future is uncertain, various challenges need
to be undertaken in order to realize reforms for the future. On the other hand, in order to continue taking onchallenges, there are many issues that need to be overcome and resolved. Toyota has organized the tasks thatshould be addressed as follows.
Tasks that should be addressed•

Creating a culture and capacity to continue taking on challenges without fear of failure•

In order to bring together people with diverse characteristics and for each one of them to fully
demonstrate their abilities, establishing a structure that stays close to the “individual” and that takes into
account that each generation and life stage, and indeed each person has different values and sense of
work.

•

Contribution to the automobile industry as a whole amid a period of transformation

In the aim to address these tasks and to become a company where “anyone can take on challenges at any
time, as many times as you wish, without fear of failure,” we are undertaking various measures centered aroundthe three pillars of “Diversity,” “Growth,” and “Contribution.”
Climate Change-related Disclosures
Toyota has announced that, in response to climate change, it would address global-scale challenges toachieve carbon neutrality by 2050. In order to tackle these challenges, Toyota intends to respond quickly tochanging demands, take into account the different energy conditions in each country and region around theworld, and provide a variety of bespoke solutions that correspond to such country-specific and region-specificconditions.
In addition, Toyota has endorsed and signed on to the recommendations of the Financial Stability Board’s
Task Force on Climate-related Financial Disclosures (“TCFD”) in April 2019. Toyota has prepared thediscussion below, which relates to Toyota’s climate change-related risks and opportunities, in light of such
recommendations. Certain emissions reduction targets referenced below have been set by Toyota with reference
to and in line with criteria established by the Science Based Targets Initiative (“SBTi”); however, such targets
are not set forth in this annual report based upon the authority of or in reliance upon SBTi as experts with respect
to such targets.
Governance(a) The Board’s Oversight of Climate-related Risks and Opportunities
Toyota addresses climate-related issues at the Board of Directors’ meetings to ensure effective strategy
formulation and implementation in line with the latest societal developments. The Board deliberates and oversees
related strategy, major action plans, and business plans, and important climate-related matters are included in the
Board’s agenda.
The Board of Directors monitors progress toward qualitative and quantitative targets for addressing climate
issues. As part of such monitoring, the Board considers climate-related issues, including risks and opportunities
48

related to products, such as fuel efficiency and emission regulations, as well as risks and opportunities related to
low-carbon technology development. It also considers the financial impact of such factors.
These governance mechanisms are used to formulate long-term strategy, including the Toyota
Environmental Challenge 2050, and in formulating and revising medium- to long-term targets and action plans.
Examples of decisions made by the Board of Directors in 2022 include the following.
•

Identifying carbon neutrality (“CN”) as an important issue in relation to climate change, we submitted to
the Board of Directors, and the Board approved, the development of a transition plan towards achieving
CN by 2050.

•

In addition, in order to meet the growing demand for BEVs, the Board of Directors approved Toyota
investing in increasing its automotive battery production capacity by up to 40 GWh in Japan and theUnited States.

(b) Management’s Role in Assessing and Managing Climate-related Risks and Opportunities
The Board of Directors is Toyota’s ultimate decision-making and oversight body for addressing climaterelated issues. The below are the principal bodies for assessing and managing climate-related risks andopportunities.

Frequency ofreporting on
climate related
issues to the Boardof Directors
Roles

Sustainability
Meeting(Advisory function)

Sustainability
Subcommittee(Executory function)

Environmental
Product Design
Assessment
Committee

Production
Environment
Committee—

When an importantmatter arises

When an importantmatter arises

When an importantmatter arises• Executes
operations
related topromotion ofsustainability• Assesses
product-relatedrisks andopportunities,
formulates /implements
strategies andplans, conducts
monitoring, etc.

• Assesses plant /productionrelated risks andopportunities,
determines
countermeasures,conductsmonitoring, etc.

• Aims to improve
the precision of
initiatives with
opinions andadvice on key
matters related tosustainability
from a social
perspective forsustainablegrowth• Reports
important issues
to theSustainability
Meeting and
Board ofDirectors

Strategy(a) Climate-related Risks and Opportunities the Organization Has Identified over the Short, Medium, andLong Term
Toyota strives to identify the various risks and opportunities that will arise from environmental issues, takes
action while continuously confirming the validity of strategies, such as the Toyota Environmental Challenge
2050, and works to enhance its competitiveness.
49

In particular, climate change requires measures in a variety of areas, including the adoption of newtechnology and responding to stricter government regulations. Climate change is expected to result in higher
temperatures, rising sea levels, and increases in the severity of natural disasters such as storms and flooding.
These impacts may pose risks to Toyota’s business. However, we believe that responding appropriately to theimpacts of climate change can lead to enhanced competitiveness and the acquisition of new business
opportunities. In accordance with this understanding, we have categorized the risks relating to climate change
and identified particularly significant risks in line with risk management processes based on the degree of impact
and stakeholder interest.
Risks and Opportunities and Toyota’s Measures*1
Scenario Analysis*2(1)
Tightening of
regulations forfuel efficiency
and ZEVs(acceleration ofelectrification)

Risks

Opportunities

Toyota’s measures• Fines for failure inachieving fuelefficiency
regulations• Increase in salesof electrified
vehicles• Promotion ofresearch anddevelopment toimprove fuel andbattery efficiency• Decrease in total
vehicle sales due
to delays incomplying withZEV regulations• Increase in profits
from externalsales ofelectrification
systems• Increase ininvestment inbatteries and shiftof resources• Start of externalsales ofelectrification
systems• Impairment ofinternal
combustion
enginemanufacturing
facilities

Stated Policies
FutureStoryline

1.5°C or less Future
Storyline

Impacts will be an
extension of current
status

Impacts will increase

Impacts will be an
extension of current
status

Impacts will increase

Impacts will increase

Impacts will be an
extension of current
status• Expansion ofelectrified vehicle
lineup• Reduction of CO2
emissions fromvehicles currently
in use(3)
Expansion ofcarbon pricing(7)
Increase infrequency andseverity ofnatural disasters• Increase inproduction andpurchasing costs
due to theintroduction ofcarbon taxes, etc.

• Productionsuspension due todamage toproduction sites
and supply chain
disruptions caused
by natural
disasters• Decrease inenergy costs due
to promoting the
introduction ofenergy-saving
technology• Comprehensive
reduction ofenergy use andpromotion ofrenewable energy
and hydrogen use• Improvement ofenergy security by
diversifying
energy supply
sources• Promotion ofemission
reductions incollaboration with
suppliers• Increase indemand forelectrified
vehicles due toincreased need forsupply of powerfrom automobiles
during emergency
situations• Implementation ofcontinuous
adaptive
improvements to
our BCP in lightof disaster
experiences• Reinforcement of
information
gathering incollaboration with
suppliers to avoid
purchasing delays50

*1 This list is not intended be exhaustive and is only a partial list of risks and opportunities and Toyota’s
measures.
*2 See “Item 4. — 4.B. Business Overview — Climate Change-related Disclosures — Strategy — Impact on
Strategy —Resilience of the Organization’s Strategy, Taking into Consideration Different Climate-related
Scenarios, including a 2°C or Lower Scenario” for a discussion of these scenarios.
(b) Impact of Climate-related Risks and Opportunities on the Organization’s Businesses, Strategy, andFinancial Planning
Recognizing that climate-related issues may have a substantive impact on its businesses, strategy, andfinancial planning, Toyota reviews its strategy based on the risks and opportunities associated with climaterelated issues whenever necessary.
Toyota identifies climate-related risks, determines their degree of significance, and sets priorities inaccordance with the Toyota Global Risk Management Standard (“TGRS”). Details regarding the TGRS areprovided below under “Item 4. — 4.B. Business Overview — Climate Change-related Disclosures — Risk
Management.” The below table describes the specific impacts on our businesses, strategy, and financial planning.

51

Impact on Strategy
Products and services
Significant climate relatedrisks

Impact on strategies

Supply chains/value
chainsInvestments in R&D• Regulatory risks for• Regulatory risks for• Regulatory risks for
decarbonization in
decarbonization in
decarbonization indifferent countries (fueldifferent countries (fueldifferent countries
efficiency regulations,efficiency regulations, • Market risks, such as
GHG emission
GHG emission
changes in consumer
regulations, etc.)
regulations, etc.)
needs

Adaptation activities
and mitigation activities• Regulatory risks, suchas the introduction ofcarbon pricing anddecarbonization• Market risks, such asincreased cost
reductions, including
sudden price jumps
low-carbon andrenewable energy
prices, etc.

The following strategies were influenced:•

Long-term strategy (2050 Target): Toyota Environmental Challenge 2050 announced in 2015•

Medium-term strategy (2030 Target): 2030 Milestone announced in 2018; confirmed by Toyota to
be in line with SBTi*1 criteria in 2022•

Short-term strategy (2025 Target): 7th Toyota Environmental Action Plan announced in 2020

*1 Science Based Targets Initiative: Initiative established by CDP, United Nations Global Compact, World
Resources Institute (WRI), and the World Wide Fund for Nature (WWF).
History of impacts• The numerical target• The numerical target
for CO2 emissions
for CO2 emissions
reduction was set as the
reduction in the entire
New Vehicle Zero CO2
value chain was set as
Emissions Challenge.
the Life Cycle Zero
CO2 Emissions• Targets for Scope 3
Challenge.
Category 11 were set
by Toyota consistent
with SBTi criteria in
2022.
• In 2021, Toyota
announced its aim tosell 3.5 million BEVs
in 2030.
• In April 2023, Toyota
announced a newaverage GHG
emissions target for
new vehicles and set apace of selling
1.5 million BEV units
by 2026 as our base
volume.

• The medium-term
strategy takes into
account of thefollowing:• Manufacturing anddisposal of batteries
for the manufactureof electrified
vehicles• Collaboration with
suppliers• Risks andopportunities related
to recycling• The sales target for• The target for CO2
emissions reduction
electrified vehicles was
related to plant
set as the New Vehicle
operations was set as
Zero CO2 Emissions
Challenge.
the Plant Zero CO2Emissions Challenge.
• An increase in researchand development
expenses is expected
for the promotion ofresearch anddevelopment activities
for electrified vehicles.
• In 2021, Toyota
announced the aim tosell 3.5 million BEVs
in 2030.

• In 2021, the decision toaim at carbon neutrality
at plants by 2035 wasannounced.
• Targets for Scope 1
and 2 were set by
Toyota consistent with
SBTi criteria in 2022.

• In April 2023, Toyota
announced a newaverage GHG
emissions target for
new vehicles and set apace of selling
1.5 million BEV units
by 2026 as our base
volume.

(c) Resilience of the Organization’s Strategy, Taking into Consideration Different Climate-related
Scenarios, including a 2°C or Lower Scenario
The below is a discussion of the resilience of Toyota’s strategy, taking into consideration different climaterelated scenarios.
<Step 1> Set Future Storylines Assuming Climate Change Effects
Climate change and the policies of various countries may expose the automobile industry and mobility
society as a whole to substantial changes. We believe that these changes will present both risks and opportunities52

for Toyota. Based on risk and opportunity analysis, using such scenarios*1 such as those of the International
Energy Agency (“IEA” *2), we envisioned two future storylines of society and the external environment inaround 2030: the “stated policies future storyline” and the “1.5°C or less future storyline.”*1 Set using scenarios such as the IPCC’s*3 Representative Concentration Pathways (RCP) 4.5 equivalent, IEA’s
Stated Policies Scenario (STEPS), Sustainable Development Scenario (SDS), and Net Zero Emissions by 2050
Scenario (NZE).
*2 International Energy Agency*3 Intergovernmental Panel on Climate Change<Step 2> Consider the Impacts on Toyota
We considered impacts on Toyota in each future storyline of society envisioned in Step 1. In the society of
the “1.5°C or less future storyline” in particular, the percentage of ZEVs*1 among new vehicle sales will likely
increase greatly while the use of carbon-neutral fuels will also expand. With regard to effects on production andpurchasing, since the introduction of carbon taxes and increased tax rates may lead to higher costs, expanding theuse of energy-saving technology, renewable energy, and hydrogen will mitigate risks.
On the other hand, if adequate climate change measures are not implemented throughout society, as
described in the “stated policies future storyline,” we believe production suspensions due to the increased
frequency and severity of natural disasters, such as flooding, as well as production decreases and suspensions due
to supply chain disruptions are likely to increase.
*1 ZEV: Zero emission vehicles. Vehicles that have the potential to emit no CO2 or NOx during driving, such as
BEVs and FCEVs.
<Step 3> Toyota’s Strategies
In April 2021, Toyota proclaimed that it would address global-scale challenges to achieve carbon neutrality
by 2050. We are developing diverse technologies that will encourage customers in different areas to choose
eco-friendly vehicles, with the belief that they can only help reduce GHG emissions if they are widely used
(multi-pathway). To this end, we have been working on environmental technology development for electrified
vehicles, such as HEVs, PHEVs, BEVs, and FCEVs. We are also promoting the development of electric vehicles,
as well as hydrogen fuel and hydrogen engine-powered vehicles, carbon neutral fuels, etc.
Toyota currently conducts sales in over approximately 200 countries and regions, among which economic
conditions, energy and industrial policies, and customer needs vary significantly. Therefore, it is important tohave a strategy that offers a variety of electrified vehicle options to optimally meet the diverse needs of eachcountry and region.
Based on this electrified vehicle strategy, Toyota has sold a cumulative total of over 22.5 million Toyota
and Lexus-branded electrified vehicles worldwide (as of February 2023), and is one of the first companies to
respond to climate change risks.
With regard to BEVs, we successively introduced models with dedicated platforms and will promote
practical vehicle supply through battery development and production strategies.
We will aim to newly introduce 10 models of BEVs by 2026, and set the pace of selling 1.5 million annual
Toyota and Lexus-brand BEV units by 2026 as our base volume to reach a target of 3.5 million Toyota andLexus-brand BEVs sold globally each year by 2030.
53

In addition to BEVs, we are promoting electrification from all directions. We will flexibly and strategically
adapt total vehicle sales and other conditions in response to changes in the market while leveraging the strengths
that we have gained through experience. We believe that this will encourage customers in each region to choose
us and accelerate the increased use of electrified vehicles.
Even if battery demand increases in accordance with shifts in customer needs, as in the “1.5°C or less future
storyline,” we will flexibly work toward carbon neutrality by such means as enhancing collaboration withexisting and new partners and swiftly establishing production structures at suppliers that have capital ties with
Toyota.
In addition to increasing the number of electrified vehicles, Toyota is working on CO2-reducing off-cycle
technology*4 (items not necessarily reflected in driving mode fuel efficiency). There is a variety of technologies
that contribute to reducing the CO2 emissions of vehicles, including carbon neutral fuels that are fit for vehicles
currently in use, and hydrogen fuel and HEVs will also contribute to reducing the CO2 emissions of vehicles. We
are therefore working to expand options for such technologies.
*4 Off-cycle technology: Technologies such as high efficiency lighting, waste heat recovery, active aerodynamic
improvement, and solar radiation/temperature management that improve actual fuel consumption. The UnitedStates has a system of offering credits in proportion to the amount of improvement achieved.
Achieving Carbon Neutrality
To achieve carbon neutrality in the automotive industry, it is vital that energy policies (such as those relating
to renewable energy and charging infrastructure) and industrial policies (such as those relating to purchasing
subsidies, supplier support and battery recycling systems) are advanced in a unified manner. Initiatives must be
implemented in coordination with various stakeholders, such as national governments and industry organizations.
In its global business activities, Toyota will coordinate with national governments to establish infrastructure
for promoting electrification while implementing electrified vehicle strategies that contribute to reducing CO2
emissions throughout the entire vehicle life cycle.
Initiatives in the Production Field
In the production field, we have announced that we intend to achieve carbon neutrality at global plants by
2035, and we are implementing preparations to face such risks as carbon taxes. We are promoting the reductionof CO2 emissions through comprehensive energy-saving conservation and the introduction of renewable energy
and hydrogen at plants. We have already achieved 100 percent renewable electricity use at all plants in Europe.
Reinforcing Strategic Resilience
Toyota will prepare measures to respond to natural disasters, such as formulating BCPs, strengthening
supply chains by enhancing information gathering, and improving communication.
Working together with not only the automobile industry but all industries, Toyota will implement initiatives
that are both practical and sustainable, continuously striving to ensure compatibility with the society of the“1.5°C or less future storyline.”
To demonstrate progress and validate Toyota’s strategies, we plan to appropriately disclose information
regarding various ESG assessment indicators and enhance dialogue with stakeholders, including institutional
investors. We believe that this will enable stable fund procurement and sustained corporate value enhancement.
54

Risk Management(a) The Organization’s Processes for Identifying and Assessing Climate-related Risks
Toyota has a company-wide risk management system that covers all risks related to its global businessactivities. This system is called the TGRS. All risks, including climate change, are identified, assessed andmanaged based on the TGRS.
Risk assessment is carried out based on the two perspectives of magnitude of impact and vulnerabilities toclarify the substantive financial or strategic impact on Toyota’s business.
The magnitude of impact is assessed on a five-point scale based on the respective elements of finance,
reputation, violation of laws and regulations, and business continuity (financial impact is indexed as a ratio tosales).
Vulnerabilities are assessed based on the two elements of current status of countermeasures and probabilityof occurrence.
(b) The Organization’s Processes for Managing Climate-related Risks
Once risks by region, function (such as manufacturing and sales), and product are identified by eachdivision and assessed from the perspectives of magnitude of impact and vulnerability, each region and eachgroup mutually cooperates and supports one another to implement a prompt response. The group chief officers
and in-house company presidents supervise the activities of the in-house companies and, at the subordinate level,
the general managers supervise the activities of divisions and implement and monitor countermeasures.
Furthermore, climate-related risks and opportunities are identified and assessed by the Environmental
Product Design Assessment Committee, Production Environment Committee and Sustainability Subcommittee
and then deliberated by the relevant divisions and officers. The Environmental Product Design Assessment
Committee monitors the status of efforts to deal with such issues as fuel economy regulations and procurement,
while the Production Environment Committee does the same for such issues affecting direct operations,
including CO2 emission regulations on plants and water risk, and the Sustainability Subcommittee also does thesame for the appropriateness of the initiatives in consideration of issues related to the promotion of sustainability
as well as external stakeholders.
These bodies convene when an important event arises with the participation of executive- or generalmanager-level members of relevant divisions, such as technology, environment, finance, purchasing, and sales.
These meetings assess risks multiple times a year. Important risks and opportunities that require prompt response
are reported as needed to the Board of Directors, where response measures are determined.
(c) How Processes for Identifying, Assessing, and Managing Climate-related Risks are Integrated into theOrganization’s Overall Risk Management
As described above, the processes using the TGRS constitute a company-wide risk management system thatcovers all risks and opportunities related to global business activities, including climate change.
At the meetings of the Environmental Product Design Assessment Committee, Production Environment
Committee and Sustainability Subcommittee, which bring together members from relevant divisions, climaterelated risks and opportunities are identified and assessed, and countermeasures are examined.
Metrics and Targets(a) Metrics Used by the Organization to Assess Climate-related Risks and Opportunities in Line with Its
Strategy and Risk Management Process55

Toyota recognizes that setting multiple metrics to manage climate-related risks and opportunities
comprehensively is an important measure for adapting to and mitigating climate change. As such, Toyota’s
metrics include not only the amount of GHG emissions but also other elements related to climate change, such asenergy, water, resource recycling, and biodiversity.
Taking these metrics into consideration, Toyota has set the following targets and is systematicallypromoting them through initiatives in six areas called the “six challenges.”•

Toyota Environmental Challenge 2050: A long-term target toward 2050•

2030 Milestone: A medium-term target (set by Toyota consistent with criteria of SBTi)•

Seventh Toyota Environmental Action Plan: A short-term target toward 2025

Among the “six challenges,” in an aim to achieve carbon neutrality by 2050, Toyota will attempt to achieve
Scope 1, 2, and 3 carbon neutrality by 2050 by promoting the following “challenges.”
Correlation between coverage
and Scope 1, 2 and 3

Initiatives
Life Cycle Zero CO2 Emissions
Challenge

Scope 1, 2 and 3

New Vehicle Zero CO2Emissions Challenge

Average GHG emissions from new vehicles (Scope 3, category 11)*1

Corporate activities

Scope 1 and 2 + voluntary initiatives*2

Plant Zero CO2 Emissions
Challenge

Scope 1 and 2 at production sites + voluntary actions*2*1 Per vehicle, gCO2e/km, Well to Wheel: Includes GHG emissions from the production of fuel and electricity,
as well as GHG emissions during vehicle operation.
*2 Production sites of Toyota Motor Corporation brands other than those of financially consolidated subsidiaries
Furthermore, Toyota announced in 2021 that it will aim to achieve carbon neutrality at plants by 2035.
Internally, certain carbon prices are used as indicators to examine capital investment and other activities.
(b) Targets Used by the Organization to Manage Climate-related Risks and Opportunities and Performance
Against Targets
Structure of Environmental Strategies
Toyota is continuously monitoring social trends and customer opinions. Toyota considers which issues itshould focus on, quickly anticipates future issues, and addresses environmental issues by applying new ideas andtechnologies. However, global environmental issues, such as climate change, water shortages, resource depletion,and biodiversity loss continue to spread and grow more serious every day.
We formulated the Toyota Environmental Challenge 2050 in 2015 and the 2030 Milestone in 2018 so thateach one of us can understand better these issues and continue to tackle challenges from a long-term perspective,
looking toward the world 20 and 30 years in the future. In 2020, we set the 2025 Target as the most recent targetof the Toyota Environmental Action Plan, a five-year plan for achieving the above targets.
In September 2022, we confirmed that our reduction targets for in Scope 1, 2 and Scope 3 Category 11 werein line with SBTi criteria, and updated our medium-term targets accordingly.
56

Toyota’s emissions reduction targets in line SBTi criteria
EmissionsTarget Year

Scope 1, 2
Scope 3,category 11(emission
intensity)

Base
Year

Reduction Rate

2035
Passenger light duty
vehicles and lightcommercial vehicles

68%

2019

2030

33% or greater

Medium and heavy
freight trucks

11.6%

Target Class
1.5 degrees Celsius

Well Below 2
degrees Celsius*4 Scope 1 and 2 emissions reduction targets are in line with the science-based criteria established by SBTi tolimit the global average temperature increase to 1.5 degrees Celsius above pre-industrial levels. Scope 3
Category 11 emissions (gCO2e/km) reduction targets are in line with the science-based criteria to hold theincrease in the global average temperature to well below 2 degrees Celsius above pre-industrial levels.
In April 2023, we announced that we aim to reduce the average GHG emissions of vehicles sold worldwide
by 33% or greater by 2030 and 50% or greater by 2035 (compared to 2019 levels).
Through a process of back casting from Toyota’s medium- and long-term vision, we determine specificactivities that we implement in collaboration with our global consolidated subsidiaries and business partners withthe aim of realizing a sustainable world.
Long-term Targets and Medium -term Targets
Life Cycle
Zero CO2
Emissions
Challenge

New Vehicle
Zero CO2
Emissions
Challenge

Corporate
Activities

Plant Zero
CO2
Emissions
Challenge

Challenge of
Minimizing
andOptimizing
Water Usage

Challenge ofChallenge of
Establishing a Establishing a
Recycling- Future Society inbased Society Harmony withand Systems
NatureContribution
to SDGs

Toyota Environmental Challenge 2050

Long-term

Medium-term

Achieve CN
for GHG
emissionsthroughout
the life
cycle*1 by2050

Achieve CN for
average GHG
emissions*2 fromnew vehicles*3by 2050

Achieve CN
for GHG
emissionsfrom
corporate
activities*4
by 2050

Achieve zero
CO2
emissionsfromproduction atplants*5 by2050

Reduce global
average GHG
emissions*2 by
50% or greaterfrom newvehicles*3 by

Reduce GHG
emissions incorporate
activities by
68% by 2035

Achieve CN
for CO2emissionsfromproduction atplants*5

57

Minimize water
usage and
implement water
discharge
management
according toindividual local
conditions

Promoteglobaldeployment ofEnd-of-life
vehicletreatment andrecyclingtechnologies
and systems
developed inJapan

Connect the reachof natureconservation
activities amongcommunities,
with the world, tothe futureLife Cycle
Zero CO2
Emissions
Challenge

New Vehicle
Zero CO2
Emissions
Challenge
2035 (compared
to 2019 levels)

Corporate
Activities

Plant Zero
CO2
Emissions
Challenge

Challenge of
Minimizing
andOptimizing
Water Usage

Challenge ofChallenge of
Establishing a Establishing a
Recycling- Future Society inbased Society Harmony withand Systems
Nature(compared to2019 levels)(target set by
Toyotaconsistent
with SBTi
criteria)

2030 Milestone
Reduce CO2 • Reduce
emissions by
average GHG
30%
emissions*2from
throughout
new vehicles
the life cycle
by 2030
by 2030- Passenger light(compared toduty vehicles
2019 levels)and light
commercial
vehicles:
33% or greater
reduction(compared to2019 levels)• Implement• Complete• Realize “Plant
measures, on aestablishment in Harmony
priority basis,of battery
with Nature”
in the regions
collection to— 12 in Japan
where the water
recycling
and 7 in otherenvironment issystemsregions — asconsidered to
globally
well ashave a large
implement• Complete
impactactivities
setup of 30
promoting- Water quantity:model
harmony with
Complete
facilities fornature in allmeasures at theappropriate
regions in
4 Challengetreatment
collaboration
focused plants
andwith local
in North
recycling ofcommunities
America, Asia,
end-of-lifeand companies
and South
vehiclesAfrica• Contribute tobiodiversity- Water quality:
conservation
Complete
activities in
impactcollaborationassessmentswith NGOs andand measures atothersall of the 22- Medium andheavy freighttrucks: 11.6%
reduction(compared to2019 levels)

plants whereused water isdischarged
directly to riverin NorthAmerica, Asia,
and Europe• Disclose
information
appropriately
andcommunicate
actively with
local
communities
and suppliers
Short-term• Expandinitiatives bothin-house andoutside tofosterenvironmentallyconscious
persons
responsible forthe future

7th Toyota Environmental Action Plan (2025 Target)*1 Applies to GHG emissions from energy consumption in corporate activities of Toyota Motor Corporation and its financially consolidated
subsidiaries, and GHG emissions from suppliers and customers in relation to vehicles under Toyota Motor Corporation’s and financiallyconsolidated subsidiaries’ brands (Scope1,2,3). (Only Toyota Motor Corporation’s vehicles are applicable for 2050)

58

*2 Per vehicle, gCO2e/km, Well to Wheel: Includes GHG emissions from the production of fuel and electricity, as well as GHG emissions
during vehicle operation.
*3 Applies to finished vehicles under Toyota Motor Corporation and financially consolidated subsidiary brands. (Only Toyota Motor
Corporation’s vehicles are applicable for 2050)*4 Applies to GHG emissions from energy consumption in Toyota Motor and financially consolidated subsidiary corporate activities, and
GHG emissions related to the production of Toyota Motor brands other than by financially consolidated subsidiaries (Scope 1, 2 + voluntaryactions).
*5 Applies to CO2 emissions from energy consumption in Toyota Motor Corporation and financially consolidated subsidiary plants, and CO2
emissions from the production of Toyota Motor Corporation brands other than those of financially consolidated subsidiaries (Scope 1, 2 +voluntary actions).

Initiatives to Achieve Carbon Neutrality
In April 2021, the Toyota group declared its commitment to take on the global challenge of working towardachieving carbon neutrality by 2050.
We are aiming to promote practical electric vehicles that can reduce carbon emissions now and steadily, andoffer sustainable options that are closely aligned with the energy situation in each region and the reality of how
cars are used.
CY2021

CY2022’21/12
BEV strategy
briefing’22/4
Launched the allnew Lexus RZ

BEVBattery

HydrogenCarbon-neutral
fuels

Commercial
Sector

’22/5
Launched
the all-new
bZ4X
’21/7
Launched the all-new Aqua
equipped with bipolar
nickel-hydrogen battery’22
Began productionof lithium-ion
batteries for bZ4X

’22/5
Participation in the Super Taikyu Series
with hydrogen engine Corolla And
carbon –neutral GR86

Expand options for producing,transporting, and usinghydrogen’22/3
Collaborate to facilitate CO2-free hydrogenproduction and usage for Woven City andbeyond with ENEOS’22/2
Announcement on
acceleration of bus
electrification’21/7
Suzuki and Daihatsu joined CJPTHEVESG Disclosure’21/4
Pledge of carbon
neutrality by 2050

’21/12Disclosed Toyota’s views on
Climate Public Policies’22
Began production of lithium-ion
LFP batteries for bZ3’22/8
Demonstration run of hydrogenengine GR Yaris at World Rally
Championship (WRC) in Belgium’22/12
Participation in 25-hour
endurance race in Thailand
with hydrogen engine Corolla’23/1
Launched the AE86
H2 Concept car’22/7
Introduced and begansocial implementation offuel cell light-duty trucks
in Fukushima’22/7
Started planning and foundational
research on hydrogen engines forheavy-duty commercial vehicles’22/9
AEON and CJPT began
improvement in logistics’22/12
Charoen PokphandGroup(CP) and Toyota to join
forces to study path toward
carbon neutrality in Thailand’23/4
Introduced fuel cell lightduty trucks in Tokyo

We will provide energy management
using renewable energy sources
such as biomass and waste feed in
Thailand, efficient flows of goods
and people using communication
infrastructure and big data, andmobility that reflects customer use
cases, including energy projects,
economic conditions, driving range
and loading capacity.

’22/11
Launched the all-new Prius’22/9
The Keidanren (Japan Business
Federation) Committee on Mobility held
its inaugural session’23/2
Announced theintroduction of a
new BEV in 2026

’22/12
Launched the Hilux BEV
Concept car’22/8
Announcement on
investment of up to 730
billion yen in battery
production in Japan and the U.S.

’22/7
Launched the all-new Crown

PHEV

’23/1
Launched the AE86
BEV Concept car’22/11
Launched the all-new bZ
compact SUV’21/5
Participation in the Super Taikyu
Series with hydrogen engine
Corolla’21/4
Established Commercial Japan PartnershipTechnologies Corporation (CJPT) with Isuzu
and Hino to address social issues andcontribute to the realization of carbon
neutrality

CY2023’22/10
Launched the
all-new bZ3(for China)’22/9
Toyota’s emissions reduction targets
confirmed to be in line with Science
Based Targets initiative (SBTi) criteria’23/1
Explanation of efforts to achievecarbon neutrality at the World
Economic Forum (Davos)’23/4
Siam Cement
Group(SCG) and Toyota to join
forces to study path toward
carbon neutrality in Thailand

Disclosure of Iranian Activities under Section 13(r) of the Securities Exchange Act of 1934
Not applicable.
Research and Development
The overriding goals of Toyota’s technology and product development activities are to minimize thenegative aspects of vehicles, such as traffic accidents and impact on the environment, and maximize the positive
aspects, such as driving pleasure, comfort and convenience. By achieving these sometimes-conflicting goals to ahigh degree, Toyota seeks to open the door to the automobile society of the future. To ensure efficient progress inresearch and development activities, Toyota coordinates and integrates all research and development phases,from basic research and advanced research to forward-looking technology and product development. With59

respect to long-term basic research in areas such as energy, the environment, information technology,
telecommunications and materials, projects are regularly reviewed and evaluated in consultation with outside
experts to achieve research and development cost control. With respect to forward-looking, leading-edge
technology and product development, Toyota establishes cost-performance benchmarks on a project-by-projectbasis to ensure efficient development investment.
The chart below provides an overview of Toyota’s R&D at each phase.
Basic researchPhase to discover development theme
Research on basic vehicle-related technology

Forward-looking andPhase requiring technological breakthroughs such as components andleading-edge technology systems
development
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, energyefficient and safe-vehicle technology. Toyota is also moving forward with the development of innovativetechnologies such as electrification, connected vehicles and automated driving so as to realize a mobility societyof the future that enables everyone to enjoy freedom of movement beyond the conventional concept of vehicles.
To this end, Toyota is focusing on the following areas:•

further improvements in hybrid technologies, including in functions and cost, and contributions to theenvironment through advancements;•

improvement in internal combustion engine fuel economy technology as well as improvement intechnology in connection with more stringent emission standards;•

development of BEVs, FCEVs and other alternative fuel vehicles;•development of advanced safety technology designed to promote driving and vehicle safety;•

development of automated driving technologies•

connected car technologies; and•development of technology to bring about more comfortable travel (driving).

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. Toyota works closely with its suppliers to pursue optimal procurement.
Toyota believes that this policy encourages technological innovation, cost reduction and other measures tostrengthen its vehicle competitiveness. Although there are supply restrictions with respect to the procurement ofcertain parts and components, Toyota plans to continue purchases based on the same principle.
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. In order to60realize timely and efficient distribution while minimizing costs, Toyota is promoting efforts to optimize eachstage 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. The use of the global distribution system aims at
implementing parts procurement that meets changes in vehicle production in a timely manner. These varying
efforts, combined together, have led to maximized customer satisfaction, as well as to building a good working
relationship with Toyota’s suppliers.
Toyota aims to share information and collaborate among the procurement divisions in each of the regions
throughout the world in order to procure parts and materials from the most competitive suppliers among Toyota
factories located in various areas worldwide. At the same time, Toyota carries out streamlining efforts together
with suppliers in each country in order to achieve sustainable growth. 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 eachpart. Through these activities, Toyota focuses on “developing a real cost-competitive structure” by working
together with suppliers.
In response to a significant upward trend in materials costs, including related logistics and other costs, since
fiscal 2022, Toyota is accelerating initiatives such as the replacement of raw materials with those that are lesssubject to price pressure and reduction of raw material usage.
Intellectual Property
Through its ongoing challenge to be one step ahead in conducting new research and development, Toyota
has enhanced its product appeal and technological prowess, which have been serving as the source of thecompany’s competitiveness. At the core of Toyota’s products created through this research and development
always lies intellectual property, including invention, know-how and brands. This intellectual property functions
as Toyota’s important management resources. By protecting and utilizing our intellectual property in an
appropriate manner, we will continue to contribute to society.
Toward the realization of a future mobility society, Toyota is carrying out intellectual property activities inline with management priorities.
For example, we are focusing resources on such areas as carbon neutrality, including the development ofelectrified vehicles and batteries, and on software and connected initiatives, including connected and automateddriving technologies. We are also reinforcing efforts to obtain and utilize intellectual property licenses in suchareas to strengthen our future competitiveness.
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 globallyby securing organic, systematic coordination between R&D activities and intellectual property activities.
Working in concert with approximately 110 law firms around the world, we also collect intellectual property
information and take measures suitable for any intellectual property disputes that may arise in specific countries
or regions. To enhance activities that incorporate management, R&D and intellectual property in one, Toyota hasan Intellectual Property Management Committee. The members of the Committee discuss and make decisions
concerning obtaining and utilizing important intellectual property conducive to management and for responding
to management risks related to intellectual property.
In 2022, Toyota filed approximately 14,000 patent applications domestically and internationally. In Japan,
Toyota believes it was one of the leading companies that year in terms of the number of both patent applications
and patent registrations. In the United States, Toyota believes it was one of the leading automobile manufacturersthat year in terms of the number of patent registrations.
61Capital Expenditures and Divestitures
Set forth below is a chart of Toyota’s principal capital expenditures between April 1, 2020 and March 31,
2023, the approximate total costs of such activity, as well as the location and method of financing of suchactivity, presented on a “by subsidiary” basis and as reported in Toyota’s annual Japanese securities report filedwith the director of the Kanto Local Finance Bureau.

Description of Activity

Primary
Method ofFinancing

Total Cost
(Yen in billions)

Location

1,105.6

Japan

Internal funds,
financingfrom issuanceof bonds, etc.

110.9

Japan

Internal funds

107.8

Japan

Internal funds

93.1

Japan

Internal funds

92.5

Japan

Internal funds

61.4

Japan

Internal funds

173.6

United States

Internal funds

167.2

CanadaInternal funds

140.9

United States

Internal funds

102.5

United States

Internal funds

88.0

United States

Internal funds

68.7

ThailandInternal funds

68.3

BelgiumInternal funds

66.1

United States

Internal funds

5,095.0

United States

Internal funds,
financingfrom issuanceof bonds, etc.

Japan
Investment primarily in technology and products by
Toyota Motor Corporation . . . . . . . . . . . . . . . . . . . . . . . .

Investment primarily in technology and products by
Daihatsu Motor Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . .
Investment primarily in technology and products by
Toyota Motor Kyushu, Inc. . . . . . . . . . . . . . . . . . . . . . . .
Investment primarily in technology and products by
Toyota Auto Body Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . .
Investment primarily in technology and products byPrime Planet Energy & Solutions, Inc. . . . . . . . . . . . . . . .
Investment primarily in technology and products byPrimearth EV Energy Co., Ltd. . . . . . . . . . . . . . . . . . . . .
Outside of Japan
Investment primarily to promote localization by
Toyota Motor Manufacturing Texas, Inc. . . . . . . . . . . . .
Investment primarily to promote localization by
Toyota Motor Manufacturing Canada, Inc. . . . . . . . . . . .
Investment primarily to promote localization by
Toyota Motor Manufacturing, Indiana, Inc. . . . . . . . . . . .
Investment primarily to promote localization by
Toyota Battery Manufacturing, Inc. . . . . . . . . . . . . . . . . .
Investment primarily to promote localization by
Toyota Motor Manufacturing, Kentucky, Inc. . . . . . . . . .
Investment primarily to promote localization by
Toyota Motor Thailand Co., Ltd. . . . . . . . . . . . . . . . . . . .
Investment primarily to promote localization by
Toyota Motor Europe NV/SA . . . . . . . . . . . . . . . . . . . . .
Investment primarily to promote localization by
Toyota Motor Manufacturing, Northern Kentucky,
Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment primarily in leased automobiles by
Toyota Motor Credit Corporation . . . . . . . . . . . . . . . . . .

62

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.

Description of Activity

Total Cost
(Yen in billions)

Location

Primary
Method ofFinancing

530.0

Japan

Internal funds

76.5

Japan

Internal funds

186.0

United States

Internal funds

104.4

MexicoInternal funds

91.7

United States

Internal funds

75.7

United States

Internal funds

Japan
Investment primarily in manufacturing facilities by
Toyota Motor Corporation . . . . . . . . . . . . . . . . . . . . . . . .
Investment primarily in manufacturing facilities byPrime Planet Energy & Solutions, Inc. . . . . . . . . . . . . . .
Outside of Japan
Investment primarily in manufacturing facilities by
Toyota Battery Manufacturing, Inc. . . . . . . . . . . . . . . . .
Investment primarily in manufacturing facilities by
Toyota Motor Manufacturing de Guanajuato . . . . . . . . .
Investment primarily in manufacturing facilities by
Toyota Motor Manufacturing, Indiana, Inc. . . . . . . . . . .
Investment primarily in manufacturing facilities by
Toyota Motor Manufacturing, Kentucky, Inc. . . . . . . . . .

Toyota does not collect information on the amount of expenditures already paid for each plant underconstruction because Toyota believes that it is difficult and it would require unreasonable effort or expense to
identify and categorize each expenditure item with reasonable accuracy as past and future expenditures. Toyota’s
construction projects consist of numerous expenditures, each of which is continually being adjusted and incurredin variable and constantly changing amounts as part of the overall work-in-progress.
Seasonality
Toyota does not consider its seasonality material in the sense of significantly higher sales during any certain
period of the year as compared to other periods of the year.
Legal Proceedings
Toyota and other automakers were named in certain class actions filed in Mexico, Australia, Israel andBrazil relating to Takata airbag issues. The actions in Israel and Brazil are being litigated. The actions in Mexicoand Australia have been resolved.
Toyota is named as a defendant in an economic loss class action lawsuit in Australia in which damages areclaimed on the basis that diesel particulate filters in certain vehicle models are defective. On April 7, 2022 andMarch 27, 2023, Toyota received unfavorable judgments in the court of first instance and the Federal Court ofAustralia, respectively. The judgments included a finding that there was a perceived reduction in vehicle value ofcertain 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. In
calculating the provision we should record in the consolidated financial statements as a result of theaforementioned judgments, Toyota has considered various factors including the legal and factual circumstancesof the case, the contents of the judgement of the court of first instance and the Federal Court of Australia, and theviews of legal counsel. The currently estimated probable economic outflow related to the class action isimmaterial to Toyota’s consolidated financial position, results of operations and cash flows. At this stage,
however, the final outcome and therefore ultimate financial liability for Toyota on account of this matter cannot
be predicted with certainty.
63

In April 2020, Toyota reported possible anti-bribery violations related to a Thai subsidiary to the SEC andthe DOJ, and is cooperating with their investigations. Investigations by governmental authorities related to thesematters could result in the imposition of civil or criminal penalties, fines or other sanctions, or litigation. Toyota
cannot predict the scope, duration or outcome of these matters at this time.
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 toand is cooperating with the relevant authorities. Hino announced that, through such investigation, it identified
past 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. In Japan, Hino was subject to an on-site inspection
from MLIT, and received a corrective action order from it. On October 7, 2022, Hino submitted a recurrence
prevention report to MLIT. MLIT has also revoked certain of the “type approvals” (that is, approvals that exempt
new vehicles or vehicles with certain equipment from individual testing by government inspectors prior to sale)and the fuel consumption ratings relating to certain engine models. Hino has also further agreed to compensate
certain of its customers in Japan for certain additional motor vehicle taxes that have become payable on accountof the misconduct, as well as in connection with vehicles with engines with respect to which there were fuelefficiency problems. With respect to the United States, the U.S. Department of Justice and other U.S. agencies
are conducting an investigation with respect to potential violations of relevant laws and regulations regarding thecertification of Hino’s model year 2010 to model year 2019 engines for the U.S. market. In this regard, a lawsuit
naming Hino and its subsidiaries as defendants in a putative class action lawsuit has been filed at the U.S.
District Court for the Southern District of Florida claiming damages related to Hino’s vehicles sold in the U.S.
from 2004 to 2021. Both the investigation and the legal proceedings are ongoing. In addition, a lawsuit against
Hino and its subsidiaries as defendants in a representative action lawsuit has also been filed in Australia as aclass action lawsuit. In the lawsuit, the plaintiffs claim that they have suffered loss and damage resulting fromalleged misleading or deceptive conduct in relation to non-compliance of the affected vehicles with emissions
standards and fuel efficiency standards. It is possible that other similar lawsuits may be filed in the future.
Further, Hino is continuing to conduct a comprehensive review related to engine certification procedures underEuropean and other jurisdictions’ standards in addition to U.S. standards. Investigations by governmental
authorities, as well as civil litigation, related to these matters could result in the imposition of civil or criminal
penalties, fines or other sanctions, damages awards, or other consequences. Toyota cannot predict the scope,
duration, or outcome of these matters at this time. See “Item 4. Information on the Company — 4.B Business
Overview — Selected Initiatives” for further discussion of these and related matters.
Toyota also has various other pending legal actions and claims, including without limitation personal injury
and wrongful death lawsuits and claims in the United States, as well as intellectual property litigation, and issubject to government investigations from time to time.
Beyond the amounts accrued with respect to all aforementioned matters, Toyota is unable to estimate a
range of reasonably possible loss, if any, for the pending legal matters because (i) many of the proceedings are inevidence gathering stages, (ii) significant factual issues need to be resolved, (iii) the legal theory or nature of theclaims is unclear, (iv) the outcome of future motions or appeals is unknown and/or (v) the outcomes of othermatters of these types vary widely and do not appear sufficiently similar to offer meaningful guidance. Therefore,
for all of the aforementioned matters, which Toyota is in discussions to resolve, any losses that are beyond theamounts accrued could have an adverse effect on Toyota’s financial position, results of operations or cash flows.

644.C ORGANIZATIONAL STRUCTURE
As of March 31, 2023, Toyota Motor Corporation had 207 Japanese subsidiaries and 362 overseas
subsidiaries. The following table sets forth for each of Toyota Motor Corporation’s principal subsidiaries, thecountry of incorporation and the percentage ownership interest and the voting interest held by Toyota Motor
Corporation.
Country ofIncorporation

Name of Subsidiary

Toyota Financial Services Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JapanHino Motors, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JapanDaihatsu Motor Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan
TOYOTA Mobility Tokyo Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan
Toyota Finance Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan
Toyota Mobility Parts Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan
Toyota Auto Body Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan
Toyota Motor Kyushu, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan
Toyota Motor East Japan, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JapanDaihatsu Motor Kyushu Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan
Cataler Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan
Toyota Motor Engineering & Manufacturing North America, Inc. . . . . . . . . United States
Toyota Motor Manufacturing, Kentucky, Inc. . . . . . . . . . . . . . . . . . . . . . . . . United States
Toyota Motor North America, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States
Toyota Motor Credit Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States
Toyota Motor Manufacturing, Indiana, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . United States
Toyota Motor Manufacturing, Texas, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . United States
Toyota Motor Sales, U.S.A., Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States
Toyota Financial Savings Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States
Toyota Motor Manufacturing Canada Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . .
CanadaToyota Credit Canada Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CanadaToyota Canada Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CanadaToyota Motor Manufacturing de Baja California, S. de R.L. de C.V. . . . . . .
MexicoToyota Motor Manufacturing de Guanajuato, S.A.de C.V. . . . . . . . . . . . . . .
MexicoToyota Motor Europe NV/SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BelgiumToyota Motor Manufacturing France S.A.S. . . . . . . . . . . . . . . . . . . . . . . . . . .
FranceToyota France S.A.S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FranceToyota Motor Finance (Netherlands) B.V. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Netherlands
Toyota Central Europe Sp. z o.o. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PolandToyota Financial Services (UK) PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United Kingdom
Toyota (GB) PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United Kingdom
Toyota Motor Manufacturing Czech Republic, s.r.o. . . . . . . . . . . . . . . . . . . . Czech Republic
Toyota Motor Manufacturing Turkey Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . .
TurkeyChina
Guangqi Toyota Engine Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota Motor (China) Investment Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . .
China
Toyota Motor Finance (China) Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
China
Toyota Kirloskar Motor Private Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
India
P.T. Astra Daihatsu Motor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Indonesia
PT. Toyota Motor Manufacturing Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . .
Indonesia
Toyota Motor Asia Pacific Pte Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Singapore
Kuozui Motors, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TaiwanToyota Leasing (Thailand) Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ThailandToyota Motor Thailand Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ThailandToyota Daihatsu Engineering & Manufacturing Co., Ltd. . . . . . . . . . . . . . . .
ThailandToyota Motor Corporation Australia Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Australia
Toyota Finance Australia Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Australia
Toyota Argentina S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Argentina
Toyota do Brasil Ltda. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BrazilToyota South Africa Motors (Pty) Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . South Africa

65

Percentage
Ownership
Interest

Percentage
VotingInterest

100.0050.11
100.00100.00100.0054.08
100.00100.00100.00100.0056.51
100.00100.00100.00100.00100.00100.00100.00100.00100.00100.0051.00
100.00100.00100.00100.00100.00100.00100.00100.00100.00100.0090.00
70.00
100.00100.00
89.00
61.75
95.00
100.00
70.00
87.44
86.43
100.00100.00100.00100.00100.00100.00100.0050.19
100.00100.00100.0054.08
100.00100.00100.00100.0057.38
100.00100.00100.00100.00100.00100.00100.00100.00100.00100.0051.00
100.00100.00100.00100.00100.00100.00100.00100.00100.00100.0090.00
70.00
100.00100.00
89.00
61.75
95.00
100.00
70.00
87.44
86.43
100.00100.00100.00100.00100.00100.00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. 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.
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.

Facility or Subsidiary NameLand Area(thousandsof square Number ofmeters) Employees

Location

Japan (Toyota Motor Corporation)
Toyota Technical Center
Shimoyama . . . . . . . . . . . . . . . . . . . Toyota City, Aichi Pref.
Tahara Plant . . . . . . . . . . . . . . . . . . . . . Tahara City, Aichi Pref.
Toyota Head Office and TechnicalCenter . . . . . . . . . . . . . . . . . . . . . . . . Toyota City, Aichi Pref.
Higashi-Fuji Technical Center . . . . . . . Susono City, Shizuoka Pref.

Principal
Products orFunctions

5,573
4,032

347
6,509

2,767
2,722

22,891
2,572

Motomachi Plant . . . . . . . . . . . . . . . . . Toyota City, Aichi Pref.
Takaoka Plant . . . . . . . . . . . . . . . . . . . Toyota City, Aichi Pref.
Tsutsumi Plant . . . . . . . . . . . . . . . . . . . Toyota City, Aichi Pref.
Kamigo Plant . . . . . . . . . . . . . . . . . . . . Toyota City, Aichi Pref.
Kinu-ura Plant . . . . . . . . . . . . . . . . . . . Hekinan City, Aichi Pref.
Honsha Plant . . . . . . . . . . . . . . . . . . . . Toyota City, Aichi Pref.

1,575
1,318
1,004
895
808
623

8,135
4,189
4,811
3,172
2,791
1,838

Research andDevelopment
Automobiles
Research andDevelopment
Research andDevelopment
Automobiles
Automobiles
Automobiles
Automobile parts
Automobile parts
Automobile parts

Japan (Subsidiaries)
Daihatsu Motor Co., Ltd. . . . . . . . . . . . Ikeda City, Osaka, etc.
Hino Motors, Ltd. . . . . . . . . . . . . . . . . Hino City, Tokyo, etc.
Toyota Auto Body Co., Ltd. . . . . . . . . Kariya City, Aichi Pref., etc.
Toyota Motor Kyushu, Inc. . . . . . . . . . Miyawaka City, Fukuoka Pref.
TOYOTA Mobility Tokyo Inc. . . . . . . Minato-ku, Tokyo, etc.

7,739
6,324
2,274
1,940
388

11,04812,244
11,504
8,508
6,702

Automobiles
Automobiles
Automobiles
Automobiles
Sales facilities

8,127

2,881

Automobiles

5,161

7,715

Automobiles

4,752
4,414

7,904
8,189

Automobiles
Automobiles

4,359

6,490

Automobiles

Outside Japan (Subsidiaries)
Toyota Motor Manufacturing, Texas,
Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . Texas, U.S.A.
Toyota Motor Manufacturing,
Kentucky, Inc. . . . . . . . . . . . . . . . . . Kentucky, U.S.A.
Toyota Motor Manufacturing Canada,Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . Ontario, Canada
Toyota Motor Thailand Co., Ltd. . . . . Samutprakarn, Thailand
Toyota Motor Manufacturing, Indiana,
Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . Indiana, U.S.A.

Toyota is constantly engaged in upgrading, modernizing and revamping the operations of its manufacturing
facilities based on its assessment of market needs and prospects. To respond flexibly to fluctuations in demand ineach of its production operations throughout the world, Toyota continually reviews and implements appropriate
66

production measures such as revising takt time and adjusting days of operation. As a result, Toyota believes it
would require unreasonable effort to track the exact productive capacity and the extent of utilization of each of its
manufacturing facilities with a reasonable degree of accuracy.
As of March 31, 2023, property, plant and equipment having a net book value of approximately¥1,498.4 billion was pledged as collateral securing indebtedness incurred by Toyota Motor Corporation’s
consolidated subsidiaries. Toyota believes that there does not exist any material environmental issues that may
affect the company’s utilization of its assets.
Toyota considers all its principal manufacturing facilities and other significant properties to be in goodcondition and adequate to meet the needs of its operations.
See “Item 4. Information on the Company — 4.B Business Overview — Capital Expenditures andDivestitures” for a description of Toyota’s material plans to construct, expand or improve facilities.
ITEM 4A. UNRESOLVED STAFF COMMENTS
None.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
5.A OPERATING RESULTS
Financial information discussed in this section is derived from Toyota’s consolidated financial statementsthat appear elsewhere in this annual report. The financial statements have been prepared in accordance with
IFRS, as issued by the IASB.
Overview
The business segments of Toyota include automotive operations, financial services operations and all otheroperations. 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. Toyota’s primarymarkets 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. The demand for automobiles isaffected by a number of factors including social, political and general economic conditions; introduction of newvehicles and technologies; and costs incurred by customers to purchase or operate vehicles. These factors cancause consumer demand to vary substantially in different geographic markets and for different types ofautomobiles.
During fiscal 2023, the global economy experienced an accelerated rise in consumer prices in bothdeveloped and emerging countries as energy and other prices soared against a backdrop of geopolitical tensions.
From August onward, there were signs of a decline in demand due to concerns of a slowdown in the global
economy as central banks in various countries accelerated the pace of monetary tightening.

67

The following table sets forth Toyota’s consolidated vehicle unit sales by geographic market based on
location of customers for the past three fiscal years.
Thousands of units
Year Ended March 31,
2021
2022
2023

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,125
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,313
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
959
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,222
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,027

1,924
2,394
1,017
1,543
1,352

2,069
2,407
1,030
1,751
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.
During fiscal 2022, Toyota’s consolidated vehicle unit sales in Japan decreased due to tightening of supplyof, and increasing demand for, semiconductors and the spread of COVID-19. During fiscal 2023, Toyota’s
consolidated vehicle unit sales in Japan increased due to gradual lessening of the impact of COVID-19. During
both fiscal 2022 and fiscal 2023, overseas vehicle unit sales increased due to strong market conditions ascompared to the prior year.
Toyota’s share of total vehicle unit sales in each market is influenced by the quality, safety, reliability, price,design, performance, economy and utility of Toyota’s vehicles compared with those offered by othermanufacturers. 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. 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 provisionof 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 andspread 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Changes in laws, regulations, policies and other governmental actions can also materially impact the
profitability of Toyota’s automotive operations. These laws, regulations and policies include those attributed toenvironmental matters, vehicle safety, fuel economy and emissions that can add significantly to the cost ofvehicles.
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. Changes in these laws, regulations, policies and other governmental actions may affect the
production, licensing, distribution or sale of Toyota’s products, cost of products or applicable tax rates. From
time-to-time when potential safety problems arise, Toyota issues vehicle recalls and takes other safety measures
including safety campaigns relating to its vehicles. The recalls and other safety measures described above have
led to a number of claims and legal proceedings against Toyota. For a more detailed description of these claims
and legal proceedings, see “Item 4. Information on the Company — 4B. Business Overview — Legal
Proceedings” and notes 24 and 30 to the consolidated financial statements.
The worldwide automotive industry is in a period of global competition which may continue for theforeseeable 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.
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.
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 andother finance companies. Meanwhile, commercial banks and other captive automobile finance companies also
compete against Toyota’s wholesale financing activities.
Toyota’s total receivables related to financial services increased during fiscal 2023 mainly due to anincrease in retail receivables. Also, vehicles and equipment on operating leases decreased during fiscal 2023
mainly due to a decrease in the number of operating leases in financial services subsidiaries in North America.
For details on receivables related to financial services and vehicles and equipment on operating leases, seenotes 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. 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 toresidual value risk. Residual value losses could be incurred when the lessee of a vehicle does not exercise theoption to purchase the vehicle at the end of the lease term. See note 3 to the consolidated financial statements for
additional information.
69

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. A portion of the derivative instruments are enteredinto to hedge interest rate risk from an economic perspective and are not designated as a hedge of specific assets
or liabilities on Toyota’s consolidated statements of financial position and accordingly, unrealized gains or losses
related to derivatives that are not designated as a hedge are recognized currently in operations. See the discussion
in “Quantitative and Qualitative Disclosures about Market Risk” and notes 20 and 21 to the consolidated
financial statements.
The fluctuations in funding costs can affect the profitability of Toyota’s financial services operations.
Funding costs are affected by a number of factors, some of which are not in Toyota’s control. 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. 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. Credit card receivables as of March 31, 2022 increased by ¥17.3 billion from March 31, 2021 to¥501.4 billion, and that as of March 31, 2023 increased by ¥53.4 billion from March 31, 2022 to ¥554.8 billion.
Other Business Operations
Toyota’s other business operations consist of its information technology business and others.
Toyota does not expect its other business operations to materially contribute to Toyota’s consolidated resultsof operations.
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 Canadiandollar, the British pound and others. Toyota’s consolidated financial statements, which are presented in Japaneseyen, are affected by foreign currency exchange fluctuations through both translation risk and transaction risk.
Translation risk is the risk that Toyota’s consolidated financial statements for a particular period or for aparticular date will be affected by changes in the prevailing exchange rates of the currencies in those countries inwhich Toyota does business compared with the Japanese yen. Even though the fluctuations of currency exchange
rates to the Japanese yen can be substantial, and therefore significantly impact comparisons with prior periods
and among the various geographic markets, the translation risk is a reporting consideration and does not reflect
Toyota’s underlying results of operations. Toyota does not hedge against translation risk.
Transaction risk is the risk that the currency structure of Toyota’s costs and liabilities will deviate from thecurrency structure of sales proceeds and assets. Transaction risk relates primarily to sales proceeds from Toyota’s
non-domestic operations from vehicles produced in Japan.
Toyota believes that the location of its production facilities in different parts of the world has significantly
reduced the level of transaction risk. As part of its globalization strategy, Toyota has continued to localize
production by constructing production facilities in the major markets in which it sells its vehicles. In fiscal 2022
and 2023, Toyota produced 71.6% and 77.3%, respectively, of its non-domestic sales outside Japan. In North
America, 68.5% and 76.8% of vehicles sold in fiscal 2022 and 2023, respectively, were produced locally. In
Europe, 69.1% and 73.9% of vehicles sold in fiscal 2022 and 2023, respectively, were produced locally. In Asia,
90.6% and 98.3% of vehicles sold in fiscal 2022 and 2023, respectively, were produced locally. 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

Toyota also enters into foreign currency transactions and other hedging instruments to address a portion of
its transaction risk. This has reduced, but not eliminated, the effects of foreign currency exchange rate
fluctuations, which in some years can be significant. See notes 20 and 21 to the consolidated financial statements
for additional information.
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 theJapanese yen against other currencies has the opposite effect. 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 theend of each of fiscal 2022 and 2023, the Japanese yen was weaker against the U.S. dollar and the euro incomparison to the end of fiscal 2021 and 2022, respectively. See note 19 to the consolidated financial statements
for additional information.
Segmentation
Toyota’s most significant business segment is its automotive operations. Toyota carries out its automotive
operations as a global competitor in the worldwide automotive market. Management allocates resources to, andassesses the performance of, its automotive operations as a single business segment on a worldwide basis andassesses financial and non-financial data such as vehicle unit sales, production volume, market share information,
vehicle model plans and plant location costs to allocate resources within the automotive operations. Toyota does
not manage any subset of its automotive operations, such as domestic or overseas operations or parts, as separate
management units.
Geographic Breakdown
The following table sets forth Toyota’s sales revenues in each geographic market based on the country
location of TMC or the subsidiaries that transacted the sale with the external customer for the past three fiscal
years.

2021

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yen in millions
Year ended March 31,
2022
2023

8,587,193
9,325,950
2,968,289
4,555,897
1,777,266* “Other” consists of Central and South America, Oceania, Africa and the Middle East.

71

8,214,740
10,897,946
3,692,214
5,778,115
2,796,493

9,122,282
13,509,027
4,097,537
7,076,922
3,348,530

Results of Operations — Fiscal 2023 Compared with Fiscal 2022
Yen in millions
Year ended March 31,
2023 v. 2022 Change
2022
2023
AmountPercentage

Sales revenues:
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intersegment elimination/unallocated amount . . . . . . .

15,991,436 17,583,196
11,166,479 13,843,901
3,867,847
4,273,735
6,530,566
8,044,906
2,928,183
3,472,193(9,105,004) (10,063,633)

1,591,760
2,677,421
405,888
1,514,340
544,011(958,629)

10.0%
24.0
10.5
23.2
18.6
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income (loss):Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intersegment elimination/unallocated amount . . . . . . .

31,379,507

37,154,298

5,774,791

18.4

1,423,445
565,784
162,973
672,350
238,169(67,024)

1,901,463(74,736)
57,460714,451
231,362(104,974)

478,018(640,520)(105,513)
42,101(6,807)(37,950)33.6—(64.7)
6.3(2.9)—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . .
Net margin from income before income taxes . . . . . . . . . . .
Net income attributable to Toyota Motor Corporation . . . . .
Net margin attributable to Toyota Motor Corporation . . . . .

2,995,697
9.5%
3,990,532
12.7%
2,850,110
9.1%

2,725,025
7.3%
3,668,733
9.9%
2,451,318
6.6%(270,672)(9.0)(2.2)%(321,799)(8.1)(2.8)%(398,792)(14.0)(2.5)%* “Other” consists of Central and South America, Oceania, Africa and the Middle East.
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.
The table below shows Toyota’s sales revenues from external customers by product category and bybusiness.
Yen in millions
Year ended March 31,
2023 v. 2022 Change
2022
2023
AmountPercentage

Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Parts and components for production . . . . . . . . . . . . . . . . . .
Parts and components for after service . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23,739,442
1,504,215
2,407,143
881,193

28,394,256
1,710,422
2,866,196
805,995

4,654,814
206,208
459,053(75,198)

19.6%
13.7
19.1
(8.5)

Total Automotive . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28,531,993
541,436

33,776,870
590,7495,244,877
49,314

18.4
9.1

Total sales of products . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29,073,428
2,306,079

34,367,619
2,786,679

5,294,191
480,600

18.2
20.8

Total sales revenues . . . . . . . . . . . . . . . . . . . . . . .

31,379,507

37,154,298

5,774,791

18.4%

72

Toyota’s sales revenues include sales revenues from sales of products, consisting of sales revenues fromautomotive operations and all other operations, which increased by 18.2% during fiscal 2023 compared with theprior fiscal year to ¥34,367.6 billion, and sales revenues from financial services operations, which increased by
20.8% during fiscal 2023 compared with the prior fiscal year to ¥2,786.6 billion. 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 thefavorable 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.
Number of financing contracts in thousands
As of March 31,
2023 v. 2022 Change
2022
2023
AmountPercentage

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,745
5,549
1,507
2,070
895

2,767
5,500
1,647
2,034
938

22
(49)
140
(36)
43

0.8%
(0.9)
9.3
(1.7)
4.8

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,766

12,886120

0.9%* “Other” consists of Central and South America, Oceania and Africa.
Geographically, sales revenues (before the elimination of intersegment revenues) for fiscal 2023 increasedby 10.0% in Japan, 24.0% in North America, 10.5% in Europe, 23.2% in Asia, and 18.6% in Other comparedwith 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.
The following is a discussion of sales revenues in each geographic market (before the elimination ofintersegment revenues).
Japan
Thousands of units
Year ended March 31,
2023 v. 2022 Change
2022
2023
AmountPercentage

Toyota’s consolidated vehicle unit sales* . . . . . . . . . . . . . .

3,640

3,703

62

1.7%

* including number of exported vehicle unit sales
Yen in millions
Year ended March 31,
2023 v. 2022 Change
2022
2023
AmountPercentage

Sales revenues:
Sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,706,514
284,922

17,271,451
311,744

1,564,938
26,822

10.0%
9.4

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,991,436

17,583,196

1,591,760

10.0%

Sales revenues in Japan increased due primarily to the 62 thousand vehicles increase in domestic andexported vehicle unit sales and the favorable impact of changes in exchange rates related to export transactions
compared with the prior fiscal year. For fiscal 2022 and 2023, exported vehicle unit sales were 1,716 thousand
units and 1,634 thousand units, respectively.
73North America
Thousands of units
Year ended March 31,
2023 v. 2022 Change
2022
2023
AmountPercentage

Toyota’s consolidated vehicle unit sales . . . . . . . . . . . . . . .

2,394

2,407

13

0.5%

Yen in millions
Year ended March 31,
2023 v. 2022 Change
2022
2023
AmountPercentage

Sales revenues:
Sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,578,534
1,587,945

11,965,050
1,878,850

2,386,516
290,905

24.9%
18.3

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11,166,479

13,843,901

2,677,421

24.0%

Sales revenues in North America increased due primarily to the 13 thousand vehicles increase in vehicle
unit sales and the favorable impact of changes in exchange rates compared with the prior fiscal year.
EuropeThousands of units
Year ended March 31,
2023 v. 2022 Change
2022
2023
AmountPercentage

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
AmountPercentage

Sales revenues:
Sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,671,205
196,642

4,003,043
270,693

331,838
74,0509.0%
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.
Asia
Thousands of units
Year ended March 31,
2023 v. 2022 Change
2022
2023
AmountPercentage

Toyota’s consolidated vehicle unit sales . . . . . . . . . . . . . . .

1,543

1,751

208

13.5%

Yen in millions
Year ended March 31,
2023 v. 2022 Change
2022
2023
AmountPercentage

Sales revenues:
Sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,345,172
185,394

7,832,020
212,886

1,486,848
27,492

23.4%
14.8

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,530,566

8,044,906

1,514,340

23.2%

74

Sales revenues in Asia increased due primarily to the 208 thousand vehicles increase in vehicle unit sales
and the favorable impact of changes in exchange rates compared with the prior fiscal year.
Other
Thousands of units
Year ended March 31,
2023 v. 2022 Change
2022
2023
AmountPercentage

Toyota’s consolidated vehicle unit sales . . . . . . . . . . . . . . .

1,352

1,565

213

15.8%

Yen in millions
Year ended March 31,
2023 v. 2022 Change
2022
2023
AmountPercentage

Sales revenues:
Sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,756,840
171,343

3,225,962
246,232

469,12274,88917.0%
43.7

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,928,183

3,472,193

544,011

18.6%

Sales revenues in Other increased due primarily to the 213 thousand vehicles increase in vehicle unit sales
compared with the prior fiscal year.
Operating Costs and Expenses
Yen in millions
Year ended March 31,
2023 v. 2022 Change
2022
2023
AmountPercentage

Operating costs and expenses
Cost of products sold . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of financing services . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative . . . . . . . . . . . . . . . .

24,250,784
1,157,050
2,975,977

29,128,561
1,712,721
3,587,990

4,877,778
555,671612,014

20.1%
48.0
20.6

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28,383,811

34,429,273

6,045,462

21.3%

Yen in millions
2023 v. 2022 Change

Changes in operating costs and expenses:
Effect of changes in vehicle unit sales and sales mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of increase of cost of financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,110,000
2,300,000
320,000
1,290,000
525,000
500,462

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,045,462

Operating costs and expenses increased by ¥6,045.4 billion, or 21.3%, to ¥34,429.2 billion during fiscal
2023 compared with the prior fiscal year.
Cost Reduction Efforts
Cost reduction efforts, together with related costs and expenses, led to an aggregate increase in operating
costs and expenses of ¥1,290.0 billion during fiscal 2023. This increase was due to a ¥1,545.0 billion increase in75

operating costs and expenses attributable to the impact of soaring materials prices. Through continued cost
reduction efforts together with suppliers, however, that increase was partially offset by a ¥205.0 billion reduction
principally attributable to value engineering activities and other cost reduction efforts concerning design-related
costs, and a ¥50.0 billion reduction attributable to cost reduction efforts principally at plants and logistics
departments.
The cost reduction efforts described above related to ongoing value engineering and value analysis
activities, the use of common parts resulting in a reduction of part types and other manufacturing initiatives
designed to reduce the costs of vehicle production. The impact of soaring materials prices includes the impact offluctuation in the price of steel, precious metals, non-ferrous alloys including aluminum, plastic parts and otherproduction 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. This increase mainly reflected the unfavorable impact of fluctuations inforeign currency translation rates, the unfavorable impact of soaring materials prices, and the impact of changes
in vehicle unit sales and sales mix.
Cost of Financial Services
Cost of financial services increased by ¥555.6 billion, or 48.0%, to ¥1,712.7 billion during fiscal 2023
compared with the prior fiscal year. This increase was due mainly to the worsening overall of valuation gains orlosses from interest rate swaps and interest rate currency swaps and the increase in funding costs resulting fromhigher interest rates.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by ¥612.0 billion, or 20.6%, to ¥3,587.9 billion
during fiscal 2023 compared with the prior fiscal year. This increase mainly reflected the unfavorable impact offluctuations in foreign currency translation rates, the increase in labor costs, and the increase in research anddevelopment expenses.
Operating Income
Yen in millions
2023 v. 2022 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

680,000(1,290,000)
1,280,000(525,000)(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. This decrease was due to the ¥1,290.0 billion aggregate unfavorable impactof factors categorized as cost reduction efforts (including fluctuations in raw materials prices), the ¥525.0 billion
aggregate unfavorable impact of changes in expenses and expense reduction efforts and other factors, partially
offset by the ¥1,280.0 billion favorable impact of changes in exchange rates and the ¥680.0 billion impact ofmarketing efforts.
76

Marketing efforts includes changes in vehicle unit sales and sales mix, sales expenses and other. “Other”
includes valuation gains or losses from interest rate swaps and interest rate currency swaps.
The favorable impact of changes in exchange rates was due mainly to the ¥1,200.0 billion impact ofoverseas transactions such as imports and exports denominated in foreign currencies.
During fiscal 2023, operating income (before elimination of intersegment profits) compared with the priorfiscal year decreased by ¥640.5 billion in North America, ¥105.5 billion, or 64.7%, in Europe, and ¥6.8 billion,
or 2.9%, in Other, and increased by ¥478.0 billion, or 33.6%, in Japan, and ¥42.1 billion, or 6.3%, in Asia.
The following is a description of operating income in each geographic market.
Japan
Yen in millions
2023 v. 2022 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

365,000(690,000)
1,210,000(320,000)(86,982)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

478,018

North America
Yen in millions
2023 v. 2022 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

90,000(395,000)(15,000)(135,000)(185,520)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(640,520)

EuropeYen in millions
2023 v. 2022 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

130,000(120,000)(15,000)(25,000)(75,513)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(105,513)

77

Asia
Yen in millions
2023 v. 2022 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

75,000(25,000)
90,000(45,000)(52,899)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

42,101Other
Yen in millions
2023 v. 2022 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

60,000(60,000)
10,0000(16,807)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6,807)

Other Income and Expenses
Share of profit (loss) of investments accounted for using the equity method during fiscal 2023 increased by¥82.7 billion, or 14.8%, to ¥643.0 billion compared with the prior fiscal year. This increase was due mainly to anincrease during fiscal 2023 in net income attributable to the shareholders of companies accounted for by theequity method.
Other finance income increased by ¥44.5 billion, or 13.3%, to ¥379.3 billion during fiscal 2023 comparedwith the prior fiscal year. This increase was due mainly to an increase during fiscal 2023 in interest income.
Other finance costs increased by ¥81.1 billion, or 184.4%, to ¥125.1 billion during fiscal 2023 comparedwith the prior fiscal year. This increase was due mainly to an increase during fiscal 2023 in losses on securities
revaluation.
Foreign exchange gain (loss), net decreased by ¥91.6 billion to ¥124.5 billion during fiscal 2023 comparedwith 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 thosesettled using forward foreign currency exchange contracts, or the value translated by appropriate year-end
exchange rates. The ¥91.6 billion decrease in foreign exchange gain (loss), net was due mainly to the losses
recorded in fiscal 2023 resulting from the functional currency of overseas subsidiaries being weaker against
foreign currencies at the dates of settlement of the foreign currency trade accounts payable than at the dates of
the transactions.
Other income (loss), net decreased by ¥5.6 billion, to ¥78.1 billion in losses during fiscal 2023 comparedwith the prior fiscal year.
78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. This increase was due mainly to the reversals of deferred tax assets on
account of the reassessment of their recoverability. The average effective tax rate for fiscal 2023 was 32.0%.
Net Income Attributable to Non-controlling Interests
Net income attributable to non-controlling interests increased by ¥17.1 billion, or 70.0%, to ¥41.6 billion
during fiscal 2023 compared with the prior fiscal year. This increase was due mainly to an increase during fiscal
2023 in net income of consolidated subsidiaries.
Net Income Attributable to Toyota Motor Corporation
Net income attributable to Toyota Motor Corporation decreased by ¥398.7 billion, or 14.0%, to¥2,451.3 billion during fiscal 2023 compared with the prior fiscal year.
Other Comprehensive Income, Net of Tax
Other comprehensive income, net of tax decreased by ¥315.4 billion to ¥827.7 billion for fiscal 2023
compared with the prior fiscal year. This decrease resulted from exchange differences on translating foreign
operations gains of ¥676.0 billion in fiscal 2023 compared with gains of ¥902.8 billion in the prior fiscal year andshare of other comprehensive income of equity method investees gains of ¥103.0 billion in fiscal 2023 comparedwith gains of ¥307.4 billion in the prior fiscal year, due mainly to the weakening of the yen against the U.S.
dollar and the euro, net changes in revaluation of financial assets measured at fair value through othercomprehensive income losses of ¥16.5 billion in fiscal 2023 compared with losses of ¥203.4 billion in the priorfiscal year, due mainly to changes in prices of public and corporate bonds, and remeasurements of defined
benefit plans gains of ¥65.1 billion in fiscal 2023 compared with gains of ¥136.2 billion in the prior fiscal year,
due mainly to changes in fair value of plan assets.
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.
Yen in millions
Year ended March 31,
2023 v. 2022 Change
2022
2023
AmountPercentage

Automotive:
Sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Services:
Sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other:
Sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intersegment elimination/unallocated amount:
Sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total
Sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
79

28,605,738
2,284,290

33,820,000
2,180,637

5,214,263(103,653)

18.2%
(4.5)

2,324,026
657,001

2,809,647
437,516

485,621(219,485)

20.9(33.4)

1,129,876
42,302

1,224,943
103,451

95,067
61,1508.4
144.6(680,133)
12,104(700,293)
3,420(20,160)(8,684)——

31,379,507
2,995,697

37,154,298
2,725,025

5,774,791(270,672)

18.4
(9.0)

Automotive Operations Segment
The automotive operations segment is Toyota’s largest operating segment by sales revenues. 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.
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. 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.
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 ofchanges in exchange rates.
Operating income from financial services operations decreased by ¥219.4 billion, or 33.4%, to¥437.5 billion during fiscal 2023 compared with the prior fiscal year. This decrease was due mainly to theworsening overall of valuation gains or losses from interest rate swaps and interest rate currency swaps.
All Other Operations Segment
Sales revenues for Toyota’s other operations segments increased by ¥95.0 billion, or 8.4%, to¥1,224.9 billion during fiscal 2023 compared with the prior fiscal year.

80Operating income from Toyota’s other operations segments increased by ¥61.1 billion, or 144.6%, to¥103.4 billion during fiscal 2023 compared with the prior fiscal year.
Results of Operations — Fiscal 2022 Compared with Fiscal 2021
Yen in millions
Year ended March 31,
2022 v. 2021 Change
2021
2022
AmountPercentage

Sales revenues:
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intersegment elimination/unallocated amount . . . . . . . .

14,948,931 15,991,436
1,042,505
9,491,803 11,166,479
1,674,676
3,134,489
3,867,847
733,359
5,045,295
6,530,566
1,485,272
1,872,895
2,928,183
1,055,287(7,278,820) (9,105,004) (1,826,185)

7.0%
17.6
23.4
29.4
56.3
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income (loss):Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intersegment elimination/unallocated amount . . . . . . . .

27,214,594

31,379,507

4,164,914

15.3

1,149,217
401,361
107,971435,940
59,84743,413

1,423,445
565,784
162,973
672,350
238,169(67,024)

274,228
164,423
55,002
236,410
178,322(110,436)

23.9
41.0
50.9
54.2
298.0
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . .
Net margin from income before income taxes . . . . . . . . . . . .
Net income attributable to Toyota Motor Corporation . . . . .
Net margin attributable to Toyota Motor Corporation . . . . . .

2,197,748
2,995,697
797,948
8.1%
9.5%
1.4%
2,932,354
3,990,532
1,058,177
10.8%
12.7%
1.9%
2,245,261
2,850,110
604,849
8.3%
9.1%
0.8%

36.3
36.1
26.9

* “Other” consists of Central and South America, Oceania, Africa and the Middle East.
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.

81

The table below shows Toyota’s sales revenues from external customers by product category and bybusiness.
Yen in millions
Year ended March 31,
2022 v. 2021 Change
2021
2022
AmountPercentage

Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Parts and components for production . . . . . . . . . . . . . . . . . . .
Parts and components for after service . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20,509,606
1,287,053
2,049,187
752,000

23,739,442
1,504,215
2,407,143
881,1933,229,836
217,162
357,956
129,193

15.7%
16.9
17.5
17.2

Total Automotive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,597,846
479,553

28,531,993
541,436

3,934,147
61,883

16.0
12.9

Total sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . 25,077,398
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,137,195

29,073,428
2,306,079

3,996,030
168,884

15.9
7.9

31,379,507

4,164,914

15.3%

Total sales revenues . . . . . . . . . . . . . . . . . . . . . . . .

27,214,594

Toyota’s sales revenues include sales revenues from sales of products, consisting of sales revenues fromautomotive operations and all other operations, which increased by 15.9% during fiscal 2022 compared with theprior 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. The increase in sales revenues
from sales of products is mainly due to an increase in Toyota vehicle unit sales of 584 thousand vehicles and thefavorable impact of changes in exchange rates compared with the prior fiscal year.
The following table shows the number of financing contracts by geographic region at the end of fiscal 2022
and 2021, respectively.
Number of financing contracts in thousands
As of March 31,
2022 v. 2021 Change
2021
2022
AmountPercentage

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,660
5,553
1,412
1,992
881

2,745
5,549
1,507
2,070
895

85
(4)
95
78
14

3.2%
(0.1)
6.7
3.9
1.6

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,49812,766268

2.1%* “Other” consists of Central and South America, Oceania and Africa.
Geographically, sales revenues (before the elimination of intersegment revenues) for fiscal 2022 increasedby 7.0% in Japan, 17.6% in North America, 23.4% in Europe, 29.4% in Asia, and 56.3% in Other compared withthe prior fiscal year. Excluding the impact of changes in exchange rates of ¥1,390.0 billion, sales revenues infiscal 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

The following is a discussion of sales revenues in each geographic market (before the elimination ofintersegment revenues).
Japan
Thousands of units
Year ended March 31,
2022 v. 2021 Change
2021
2022
AmountPercentage

Toyota’s consolidated vehicle unit sales* . . . . . . . . . . . . . . .

3,853

3,640

(213)

(5.5)%* including number of exported vehicle unit sales
Yen in millions
Year ended March 31,
2022 v. 2021 Change
2021
2022
AmountPercentage

Sales revenues:
Sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,674,496
274,435

15,706,514
284,922

1,032,018
10,4877.0%
3.8

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,948,931

15,991,436

1,042,505

7.0%

Despite Toyota’s domestic and exported vehicle unit sales having decreased by 213 thousand vehicles
compared with the prior fiscal year, sales revenues in Japan increased due primarily to the favorable impact ofchanges in exchange rates related to export transactions. For fiscal 2021 and 2022, exported vehicle unit sales
were 1,728 thousand units and 1,716 thousand units, respectively.
North America
Thousands of units
Year ended March 31,
2022 v. 2021 Change
2021
2022
AmountPercentage

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
AmountPercentage

Sales revenues:
Sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,995,051
1,496,752

9,578,534
1,587,945

1,583,483
91,193

19.8%
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EuropeThousands of units
Year ended March 31,
2022 v. 2021 Change
2021
2022
AmountPercentage

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
AmountPercentage

Sales revenues:
Sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,976,259
158,229

3,671,205
196,642694,946
38,413

23.3%
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.
Asia
Thousands of units
Year ended March 31,
2022 v. 2021 Change
2021
2022
AmountPercentage

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
AmountPercentage

Sales revenues:
Sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,874,746
170,549

6,345,172
185,394

1,470,426
14,845

30.2%
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
AmountPercentage

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
AmountPercentage

Sales revenues:
Sales of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,719,132
153,764

2,756,840
171,343

1,037,708
17,57960.4%
11.4

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,872,895

2,928,183

1,055,287

56.3%

84

Sales revenues in Other increased due primarily to the 326 thousand vehicles increase in vehicle unit sales
compared with the prior fiscal year.
Operating Costs and Expenses
Yen in millions
Year ended March 31,
2022 v. 2021 Change
2021
2022
AmountPercentage

Operating costs and expenses
Cost of products sold . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,199,890
Cost of financing services . . . . . . . . . . . . . . . . . . . . . . . 1,182,330
Selling, general and administrative . . . . . . . . . . . . . . . .
2,634,625
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25,016,845

24,250,784
1,157,050
2,975,977

3,050,894(25,280)
341,351

14.4%
(2.1)
13.0

28,383,811

3,366,965

13.5%

Yen in millions
2022 v. 2021 Change

Changes in operating costs and expenses:
Effect of changes in vehicle unit sales and sales mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of decrease of cost of financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,330,000
780,000(100,000)
360,000
220,000
776,965

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,366,965

Operating costs and expenses increased by ¥3,366.9 billion, or 13.5%, to ¥28,383.8 billion during fiscal
2022 compared with the prior fiscal year.
Cost Reduction Efforts
Operating costs and expenses increased by ¥360.0 billion during fiscal 2022. This increase was due to a¥640.0 billion increase in operating costs and expenses attributable to the impact of soaring materials prices.
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 atplants and logistics departments.
The cost reduction efforts described above related to ongoing value engineering and value analysis
activities, the use of common parts resulting in a reduction of part types and other manufacturing initiatives
designed to reduce the costs of vehicle production. The impact of soaring materials prices includes the impact offluctuation in the price of steel, precious metals, non-ferrous alloys including aluminum, plastic parts and otherproduction materials and parts.
Cost of Products Sold
Cost of products sold increased by ¥3,050.8 billion, or 14.4%, to ¥24,250.7 billion during fiscal 2022
compared with the prior fiscal year. This increase mainly reflected the impact of changes in vehicle unit sales andsales mix, the unfavorable impact of soaring materials prices, and the unfavorable impact of fluctuations inforeign currency translation rates.
85

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.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by ¥341.3 billion, or 13.0%, to ¥2,975.9 billion
during fiscal 2022 compared with the prior fiscal year. This increase mainly reflected the unfavorable impact offluctuations in foreign currency translation rates.
Operating Income
Yen in millions
2022 v. 2021 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

860,000(360,000)
610,000(220,000)(92,052)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

797,948

Toyota’s operating income increased by ¥797.9 billion, or 36.3%, to ¥2,995.6 billion during fiscal 2022
compared with the prior fiscal year. This increase was due to the ¥860.0 billion impact of marketing efforts andthe ¥610.0 billion favorable impact of changes in exchange rates, partially offset by, among other factors, the¥360.0 billion aggregate unfavorable impact of factors categorized as cost reduction efforts (including
fluctuations in raw materials prices) and the ¥220.0 billion aggregate unfavorable impact of changes in expenses
and expense reduction efforts.
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.
During fiscal 2022, operating income (before elimination of intersegment profits) compared with the priorfiscal 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

The following is a description of operating income in each geographic market.
Japan
Yen in millions
2022 v. 2021 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

260,000(145,000)
370,000(50,000)(160,772)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

274,228

North America
Yen in millions
2022 v. 2021 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

380,000(125,000)
50,000(135,000)(5,577)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

164,423

EuropeYen in millions
2022 v. 2021 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

105,000(40,000)0(10,000)
2

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

55,002Asia
Yen in millions
2022 v. 2021 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

130,000(35,000)
170,000(40,000)
11,410Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

236,41087

OtherYen in millions
2022 v. 2021 Change

Changes in operating income and loss:
Effect of marketing efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of cost reduction efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase or decrease in expenses and expense reduction efforts . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

95,000(15,000)
20,00015,00063,322

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. This increase was due mainly to
an increase during fiscal 2022 in net income attributable to the shareholders of companies accounted for by theequity method.
Other finance income decreased by ¥100.4 billion, or 23.1%, to ¥334.7 billion during fiscal 2022 comparedwith the prior fiscal year. This decrease was due mainly to a decrease during fiscal 2022 in profit on sales of
securities.
Other finance costs decreased by ¥3.5 billion, or 7.4%, to ¥43.9 billion during fiscal 2022 compared withthe prior fiscal year.
Foreign exchange gain (loss), net increased by ¥201.0 billion to ¥216.1 billion during fiscal 2022 comparedwith 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 thosesettled using forward foreign currency exchange contracts, or the value translated by appropriate year-end
exchange rates. The ¥201.0 billion increase in foreign exchange gain (loss), net was due mainly to the gains
recorded in fiscal 2022 resulting from the Japanese yen being weaker against foreign currencies at the maturity
dates of the foreign currency deposit than at the dates of the deposit.
Other income (loss), net decreased by ¥53.2 billion, to ¥72.4 billion in losses during fiscal 2022 comparedwith 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. This increase was due mainly to the increase in income before income taxes
and reversals of deferred tax assets on account of the reassessment of their recoverability. The average effective
tax rate for fiscal 2022 was 28.0%.
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.
88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. This increase resulted from exchange differences on translating foreign
operations gains of ¥902.8 billion in fiscal 2022 compared with gains of ¥403.6 billion in the prior fiscal year andshare of other comprehensive income of equity method investees gains of ¥307.4 billion in fiscal 2022 comparedwith gains of ¥88.6 billion in the prior fiscal year, due mainly to the weakening of the yen against the U.S. dollar
and the euro, net changes in revaluation of financial assets measured at fair value through other comprehensive
income losses of ¥203.4 billion in fiscal 2022 compared with gains of ¥303.9 billion in the prior fiscal year, due
mainly to changes in prices of public and corporate bonds, and remeasurements of defined benefit plans gains of¥136.2 billion in fiscal 2022 compared with gains of ¥216.2 billion in the prior fiscal year, due mainly to changes
in fair value of plan assets.
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.
Yen in millions
Year ended March 31,
2022 v. 2021 Change
2021
2022
AmountPercentage

Automotive:
Sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Services:
Sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other:
Sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intersegment elimination/unallocated amount:
Sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,651,552
1,607,161

28,605,738
2,284,290

3,954,186
677,130

16.0%
42.1

2,162,237
495,5932,324,026
657,001

161,789
161,408

7.5
32.6

1,052,365
85,3501,129,876
42,30277,512(43,048)7.4(50.4)(651,560)
9,645(680,133)
12,104(28,573)
2,459

—
—

Automotive Operations Segment
The automotive operations segment is Toyota’s largest operating segment by sales revenues. Sales revenues
for the automotive segment increased during fiscal 2022 by ¥3,954.1 billion, or 16.0%, to ¥28,605.7 billion
compared with the prior fiscal year. The increase mainly reflects the ¥1,510.0 billion favorable impact of changes
in vehicle unit sales and sales mix and the ¥1,250.0 billion favorable impact of changes in exchange rates.
Operating income from the automotive operations increased by ¥677.1 billion, or 42.1%, to ¥2,284.2 billion
during fiscal 2022 compared with the prior fiscal year. 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.
89

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 ofchanges 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 bothfinancing margin and financing volume.
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.
Related Party Transactions
See note 32 to the consolidated financial statements for further discussion.
Basic Concept Regarding the Selection of Accounting Standards
TMC has adopted IFRS for its consolidated financial statements in order to improve the international
comparability of its financial information in the capital markets, among other reasons, beginning with the firstquarter of the fiscal year ended March 31, 2021.
OutlookToyota, with its full lineup and profitable HEVs and PHEVs, along with its diverse options of BEVs that it
will be strengthening, will make sure to meet a wide range of global demand and is committed to further growth.
For growth in emerging markets, profitable HEVs will be used as a source of income, and with a value chain thatcan support approximately 10 million units sold annually, we will also take part in a wide range of business
opportunities. In addition, we will achieve cost reductions and Kaizen by leveraging the strengths of the TPS, andthereby enhance our future investment capacity for the expansion of growth in BEVs and mobility areas, andestablish a strong business foundation whereby carbon neutrality and growth can both be achieved. Taking theforegoing 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 theunfavorable impact of changes in exchange rates. 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 ofchanges 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.
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 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

“Cautionary Statement With Respect To Forward-Looking Statements”. Toyota’s actual results of operations
could vary significantly from those described above as a result of unanticipated changes in the factors describedabove or other factors, including those described in “Risk Factors”.
5.B LIQUIDITY AND CAPITAL RESOURCES
Historically, Toyota has funded its cash requirements, including those relating to capital expenditures aswell as its research and development activities through cash generated by operations.
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. Toyota will use its funds toefficiently invest in maintenance and replacement of conventional manufacturing facilities and the introductionof 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. 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.
Toyota funds its financing programs for customers and dealers, including loans and leasing programs, fromboth cash generated by operations, the issuance of corporate bonds, and debt financing by its sales financesubsidiaries. Toyota seeks to expand its ability to raise funds locally in markets throughout the world byexpanding its network of finance subsidiaries.
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. The increase was primarily attributable to the ¥1,762.7 billion
decrease in withdrawals from time deposits compared to the previous fiscal year.
Net cash used in financing activities was ¥56.1 billion for fiscal 2023, compared with net cash used infinancing activities of ¥2,466.5 billion for fiscal 2022, a ¥2,410.3 billion change. The change was primarily
attributable to the ¥1,154.2 billion increase in funding by long-term debt in fiscal 2023.
For a discussion of cash flows for fiscal 2022 as compared to those for fiscal 2021, see “Item 4.B. Operating
and Financial Review and Prospects — 5.B. Liquidity and Capital Resources” of Toyota’s Annual Report on
Form 20-F for the fiscal year ended March 31, 2022.
Total capital expenditures for property, plant and equipment, including vehicles and equipment on operatingleases, were ¥3,496.2 billion during fiscal 2023, remaining largely unchanged from the ¥3,611.5 billion in total
capital expenditures during the prior fiscal year.
Toyota expects investments in property, plant and equipment, excluding vehicles and equipment on
operating leases, to be approximately ¥1,860.0 billion during fiscal 2024.
Cash and cash equivalents were ¥7,516.9 billion as of March 31, 2023. Most of Toyota’s cash and cash
equivalents are held in Japanese yen or in U.S. dollars.
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.
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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. This increase was due mainly to increased revenue from sales
during the quarter ended March 31, 2023.
Inventories increased during fiscal 2023 by ¥434.2 billion, or 11.4%, to ¥4,255.6 billion. This increase wasdue mainly to an increase in the volume of precious metals procured.
Total finance receivables, net increased during fiscal 2023 by ¥3,006.3 billion, or 13.8%, to¥24,770.8 billion. This increase was due mainly to an increase in the impact of changes in exchange rates.
Finance receivables were geographically distributed as follows: in North America 56.9%, in Asia 12.0%, in
Europe 14.0%, in Japan 6.3% and in Other 10.8%.
Other financial assets increased during fiscal 2023 by ¥247.5 billion, or 2.1%.
Property, plant and equipment increased during fiscal 2023 by ¥307.3 billion, or 2.5%. This increase wasdue mainly to capital expenditures.
Accounts and notes payable increased during fiscal 2023 by ¥694.2 billion, or 16.2%. This increase was due
mainly to an increase in accounts payable associated with parts procurement.
Income taxes payable decreased during fiscal 2023 by ¥422.2 billion, or 51.1%. This decrease was mainly
due to an increase in interim payments of income taxes.
Toyota’s total borrowings increased during fiscal 2023 by ¥2,883.9 billion, or 10.9%. Toyota’s short-termborrowings consist of loans with a weighted-average interest rate of 2.02% and commercial paper with aweighted-average interest rate of 3.81%. Short-term borrowings increased during fiscal 2023 by ¥485.3 billion,or 11.8%, to ¥4,590.1 billion. Toyota’s long-term debt mainly consists of unsecured and secured loans, mediumterm notes, unsecured and secured notes with weighted-average interest rates ranging from 1.29% to 6.53%, andmaturity dates ranging from 2023 to 2048. 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. 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 fixedrate borrowings by entering into interest rate swaps. There are no material seasonal variations in Toyota’s
borrowings requirements.
As of March 31, 2023, Toyota’s total interest-bearing debt was 103.7% of Toyota Motor Corporation
shareholders’ equity, compared with 101.0% as of March 31, 2022.
The following table provides information on credit ratings of Toyota’s short-term borrowing and long-term
debt from Standard & Poor’s Ratings Group (S&P), Moody’s Investors Services (Moody’s), and Rating andInvestment Information, Inc. (R&I), as of May 31, 2023. A credit rating is not a recommendation to buy, sell or
hold securities. A credit rating may be subject to withdrawal or revision at any time. Each rating should be
evaluated separately of any other rating.

Short-term borrowing . . . . .
Long-term debt . . . . . . . . . .

S&P

Moody’s

R&I

A-1+
A+

P-1
A1

—
AAA

Toyota’s net defined benefit liability (asset) of Japanese plans decreased during fiscal 2023 by¥108.2 billion, or 46.6%, to ¥124.0 billion. The net defined benefit liability (asset) of foreign plans increased
92during fiscal 2023 by ¥50.8 billion, or 19.3%, to ¥313.8 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 theretirement date of each covered employee. The decrease in net defined benefit liability (asset) of the Japaneseplans reflects mainly a decrease in defined benefit obligations due to an increased discount rate. See note 23 tothe 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.
The key element of Toyota’s financial strategy is maintaining a strong financial position that will allow
Toyota to fund its research and development initiatives, capital expenditures and financial services operations
efficiently even if earnings are subject to short-term fluctuations. Toyota believes that it maintains sufficientliquidity for its present cash requirements and that, by maintaining its high credit ratings, it will continue to beable to access funds from external sources in large amounts and at relatively low costs. Toyota’s ability tomaintain its high credit ratings is subject to a number of factors, some of which are not within Toyota’s control.
These factors include general economic conditions in Japan and the other major markets in which Toyota does
business, as well as Toyota’s successful implementation of its business strategy.
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 andtherefore consolidates them. Toyota has not entered into any off-balance sheet securitization transactions during
fiscal 2023.
For information regarding the amounts of non-derivative financial liabilities and derivative financial
liabilities by a remaining contract maturity period, see note 19 to the consolidated financial statements. In
addition, as part of Toyota’s normal business practices, Toyota enters into long-term arrangements with suppliers
for purchases of certain raw materials, components and services. These arrangements may contain fixed/
minimum quantity purchase requirements. Toyota enters into such arrangements to facilitate an adequate supplyof these materials and services.
The following tables summarize Toyota’s contractual obligations and commercial commitments as ofMarch 31, 2023

Total

Contractual Obligations:Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . 4,590,173
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . 24,790,100
Commitments for the purchase of property,
plant, other assets and services (note 30) . . .
522,336

Yen in millions
Payments Due by PeriodLess than
1 to
3 to
1 year
3 years
5 years

4,590,173
7,715,466
251,521

5 years
and after———
9,875,785 5,427,639 1,771,210
208,243

28,942

33,630Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,902,609 12,557,160 10,084,028 5,456,581 1,804,840
Commercial Commitments (note 30):
Maximum potential exposure to guarantees
given in the ordinary course of business . . . .

3,600,631

955,483

1,614,133

926,168

104,847

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,600,631

955,483

1,614,133

926,168

104,847* “Long-term debt” represents future principal payments.
93

Toyota expects to contribute ¥38,309 million domestically and ¥16,423 million overseas to its pension plansin fiscal 2024.
Lending Commitments
Credit Facilities with Credit Card Holders
Toyota’s financial services operations issue credit cards to customers. As customary for credit cardbusinesses, Toyota maintains credit facilities with holders of credit cards issued by Toyota. These facilities areused upon each holder’s requests up to the limits established on an individual holder’s basis. Although loans
made to customers through these facilities are not secured, for the purposes of minimizing credit risks and of
appropriately establishing credit limits for each individual credit card holder, Toyota employs its own risk
management policy which includes an analysis of information provided by financial institutions in alliance with
Toyota. 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.
These loans are typically collateralized with liens on real estate, vehicle inventory, and/or other dealership assets,
as appropriate. Toyota obtains a personal guarantee from the dealer or corporate guarantee from the dealershipwhen deemed prudent. Although the loans are typically collateralized or guaranteed, the value of the underlying
collateral or guarantees may not be sufficient to cover Toyota’s exposure under such agreements. Toyota
evaluates the credit facilities according to the risks assumed in entering into the credit facility. 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 withdealers totaled ¥3,820.9 billion as of March 31, 2023.
Guarantees
See note 30 to the consolidated financial statements for further discussion.
5.C RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES
Toyota’s research and development is dedicated to capturing the increasingly diverse and sophisticatedmarket through the development of attractive, affordable, high-quality products for customers worldwide. The
intellectual property that R&D generates is a vital management resource that Toyota utilizes and protects tomaximize its corporate value. For a more detailed discussion of the company’s research and development
objectives and policies, see “Item 4. Information on the Company — 4.B Business Overview — Research andDevelopment.”
Toyota’s research and development expenditures were approximately ¥1,241.6 billion in fiscal 2023,¥1,124.2 billion in fiscal 2022 and ¥1,090.4 billion in fiscal 2021.
Toyota presents research and development expenditures as a supplemental measure that demonstrates theamount of research and development expenditures undertaken during the relevant reporting period. Toyota
defines research and development expenditures as research and development cost, plus research anddevelopment-related expenditures that were recognized as intangible assets, less amortization expenses for such
assets. 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

For details of the research and development cost recorded in the consolidated statement of income, see note
27 to the consolidated financial statements.
Toyota operates a global research and development organization with the primary goal of building
automobiles that meet the needs of customers in every region of the world. In Japan, research and development
operations are led by Toyota and Toyota Central Research & Development Laboratories, Inc., which works
closely with Daihatsu, Hino, Toyota Auto Body Co., Ltd., Toyota Motor East Japan, Inc., and many other Toyotagroup companies. Overseas, Toyota has a worldwide network of technical centers as well as design andmotorsports research and development centers.
Toyota established TRI in January 2016 to accelerate research and development of artificial intelligence
technology, which has significant potential to support future industrial technologies. In July 2017, TRI invested$100 million to launch a venture capital fund designed to provide financing to startup companies, and is making
investments in newly established promising startup companies in the four areas of artificial intelligence, robotics,
autonomous mobility, and data and cloud technology. TRI successively invested another $100 million in May
2019 and $150 million in June 2021. In addition, TRI established a $150 million fund in an aim to achievecarbon neutrality.
In Japan, Toyota established a new company, Toyota Research Institute — Advanced Development(“TRI-AD”), in March 2018 to further accelerate its efforts in advanced development for automated driving
technology and related technologies. 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. In January 2021, TRI-AD was
reorganized into Woven Planet Group comprising four companies — Woven Planet Holdings, Inc., which is
responsible for decision-making for the entire group and creates new business opportunities; Woven Core, Inc.,
which assumed the business of TRI-AD and is responsible for the development of automated driving
technologies; Woven Alpha, Inc., which is responsible for the development of new projects such as Woven City
and Arene, a software platform; and Woven Capital, L.P. with a total investment value of $800 million, whichinvests in growth-stage companies in areas such as autonomous driving mobility, artificial intelligence, and smart
city. Moreover, to bolster overseas research and development initiatives related to automated driving technology
and software platforms, Toyota established Woven Planet North America (WPNA) in the United States andWoven Planet United Kingdom in the United Kingdom, and transferred TRI’s automated driving division to
WPNA in May 2022. On April 1, 2023, Woven Planet Holdings, Inc., Woven Core, Inc. and Woven Alpha, Inc.
were merged and changed their name to Woven by Toyota, Inc.
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.

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The following table provides information on Toyota’s principal research and development facilities.
FacilityJapan
Toyota Technical Center . . . . . . . . . . . . . . . .
Higashi-Fuji Technical Center . . . . . . . . . . .
Tokyo Design Research & Laboratory . . . . .
Woven by Toyota, Inc. . . . . . . . . . . . . . . . . .

Otemachi Office . . . . . . . . . . . . . . . . . . . . . .
Shibetsu Proving Ground . . . . . . . . . . . . . . .
Toyota Central R&D Labs., Inc. . . . . . . . . . .
United States
Toyota Motor Engineering andManufacturing North America, Inc. . . . . .
Calty Design Research, Inc. . . . . . . . . . . . . .
Toyota Research Institute of North America(TRI-NA) . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota Research Institute, Inc. . . . . . . . . . . .
Woven by Toyota, U.S., Inc. . . . . . . . . . . . .
EuropeToyota Motor Europe NV/SA . . . . . . . . . . . .
Toyota Europe Design Development
S.A.R.L. . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota Motorsport GmbH . . . . . . . . . . . . . .
Woven by Toyota, U.K., Ltd. . . . . . . . . . . . .
Asia PacificToyota Daihatsu Engineering andManufacturing Co., Ltd. . . . . . . . . . . . . . .
China
Toyota Motor Engineering andManufacturing (China) Co., Ltd. . . . . . . .
FAW Toyota Research & Development Co.,
Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
GAC Toyota Motor Co., Ltd. R&D
Center . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BYD Toyota EV Technology Co., Ltd. . . . .
Toyota Motor Technical Research andService (Shanghai) Co., Ltd. . . . . . . . . . . .
United Fuel Cell System R&D (Beijing)Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . .

Principal Activity

Product planning, style, design, prototype production andvehicle evaluation
Advanced development
Advanced styling designs
Development of artificial intelligence technology with afocus on automated driving technology
Development of Woven City and software platform
technologies
Development of key IT technologies, creation of new values
by utilizing big data and collaboration with venturecompanies
Evaluation
Basic research

Product planning, design and evaluation of vehicles
manufactured in North America
DesignAdvanced research relating to “energy and environment,”“safety” and “mobility infrastructure”
Research and development of artificial intelligence
technology
Development of automated driving technology and software
Planning and evaluation of vehicles manufactured in Europe
DesignDevelopment of motor sports vehicles
Development of automated driving technology and software
platform technology

Planning and evaluation of vehicles manufactured inAustralia and Asia

Environmental technology design and evaluation in China
Design, evaluation and certification of vehicles
manufactured in China
Design, evaluation and certification of vehicles
manufactured in China
Design and evaluation of BEVs
Research of new technology, construction and system of
automobiles
Development of FC system for commercial vehicles in China

96

Toyota carefully analyzes patents and the need for patents in each area of research to formulate more
effective research and development strategies. Toyota identifies research and development projects in which it
should build a strong global patent portfolio.
For a further discussion of Toyota’s intellectual property, see “Item 4. Information on the Company —4.B Business Overview — Intellectual Property.”
5.D TREND INFORMATION
For a discussion of the trends that affect Toyota’s business and operating results, see “Item 5. Operating and
Financial Review and Prospects — 5.A Operating Results” and “Item 5. Operating and Financial Review andProspects — 5.B Liquidity and Capital Resources.”
5.E CRITICAL ACCOUNTING ESTIMATES
Not applicable.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
6.A DIRECTORS AND SENIOR MANAGEMENT
In order to advance its transition to a mobility company, Toyota has reflected on the path it has taken thus
far and has formulated the “Toyota Philosophy” as a roadmap for the future. Toyota’s mission is “Producing
Happiness for All” by expanding the possibilities of people, companies and communities through addressing thechallenges of mobility as a mobility company. In order to do so, Toyota will continue to create new and uniquevalue with various partners by relentlessly committing towards monozukuri (manufacturing), and by fostering
imagination for people and society.
Toyota strives to provide a full lineup of products with “good quality yet affordable prices” globally at theright place at the right time, and offer products and services that are sympathetic towards customers in eachcountry and region, through the initiative of “making even better cars” that we have been engaged in since the2008 financial crisis. In order to meet these objectives, following the introduction of “region-based operations,”
the “business unit system” and the “in-house company system” in 2011, 2013 and 2016, respectively, in April
2017 Toyota further clarified that, for the purpose of further accelerating decision-making and operational
execution, members of the board of directors are responsible for decision-making and management oversight andthat operating officers are responsible for operational execution. Furthermore, in 2018, Toyota changed thecommencement of operating officers’ terms of office from April to January, reduced corporate strategy functions
and restructured the Japan Sales Business Group based on regions rather than sales channels in an effort to enabledecision-making closer to customers and the field, in order to further accelerate execution in full coordination
with each site. In 2019, in order to further advance Toyota’s “acceleration of management” and the developmentof a diverse and talented workforce, the executive structure was changed to be composed only of senior
managing officers and people of higher rank, and a new classification called “senior professional/senior
management” (kanbushoku) grouped and replaced the following titles or ranks: managing officers, executive
general managers, (sub-executive managerial level) senior grade 1 and senior grade 2 managers, and grandmasters. From the perspective of appointing the right people to the right positions, senior professionals/senior
management were positioned in a wide range of posts, from those of chief officer, deputy chief officer, plant
general manager, and senior general manager to group manager, to deal with management issues as they arise
and to strengthen their development as part of a diverse and talented workforce through on-site learning andproblem-solving (genchi genbutsu). In April 2020, Toyota consolidated the posts of executive vice president andoperating officer into the post of operating officer. In July 2020, Toyota further clarified the roles of operating
officers. 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 chief97

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 seniorprofessionals/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 thepath that should be taken, as the company exercises greater flexibility in making appointments. However,
because of the rapidly changing business environment, Toyota now recognizes that there is an increasing need forsuch executives to fulfill management roles (related to people, goods, and money) together with our President.
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. 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 thetheme 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. Based on its basic policy of appointing
the right people to the right positions, Toyota has been swiftly and continuously innovating. Toyota will furtherpress forward the tide of such innovations, aiming for a corporate structure capable of carrying out managementfrom a viewpoint that is optimal for a global company.
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” inkeeping with the spirit of the Toyoda Principles, which set forth its founding philosophy. Moreover, these
individuals should be able to play a significant role in transforming Toyota into a “mobility company” throughresponding to electrification, intelligence, and diversification and external partnerships based on trust andfriendship and internal two-way interactive teamwork, while working towards solutions for social challenges
such as the climate change issue. 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. Toyota has six audit & supervisoryboard members, four of whom are outside audit & supervisory board members. In order to be prepared in theevent 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.

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Set forth below are brief summaries of Toyota’s members of the board of directors and audit & supervisoryboard members.

Name (Date of Birth)

Position

Brief Career Summary and Important Concurrent Duties

Akio Toyoda(May 3, 1956)

Chairman of the1984 Joined TMC
Board of Directors 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)

Number ofCommon Shares(in thousands)

24,691(important concurrent duties)
Chairman of TOYOTA FUDOSAN CO., LTD.
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
Shigeru Hayakawa
Vice Chairman of the 1977 Joined Toyota Motor Sales Co., Ltd.
(September 15, 1953)
Board of Directors 2007 Managing Officer of TMC
2007 Toyota Motor North America, Inc. President
2012 Senior Managing Officer of TMC
2015 Member of the Board of Directors andSenior Managing Officer of TMC
2017 Vice Chairman of TMC (to present)

326(important concurrent duties)
Representative Director of Institute forInternational Economic Studies
Koji Sato(October 19, 1969)

President,
1992 Joined TMC
Member of the Board 2017 Executive General Manager of TMC
of Directors
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.

99

55

Name (Date of Birth)

Position

Brief Career Summary and Important Concurrent Duties

Hiroki Nakajima(April 10, 1962)

Member of the Boardof 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)

Number ofCommon Shares(in thousands)

20(important concurrent duties)
President of Commercial Japan PartnershipTechnologies Corporation
Yoichi Miyazaki(October 19, 1963)

Member of the Boardof 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)

Simon Humphries(March 30, 1967)

Member of the Board 1988 Joined DCA Design in UK.
of Directors,
1994 Joined TMC
Operating Officer 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)

42

10(important concurrent duties)
Executive Vice President of Calty Design
Research, Inc.
Ikuro Sugawara(March 6, 1957)

Outside Member ofthe Board of
Directors

1981 Joined Ministry of International Trade andIndustry2010 Director-General of the Industrial Scienceand Technology Policy and Environment
Bureau, Ministry of Economy, Trade andIndustry
2012 Director-General of the Manufacturing
Industries Bureau, Ministry of Economy, Tradeand Industry
2013 Director-General of the Economic andIndustrial 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—Name (Date of Birth)

Position

Brief Career Summary and Important Concurrent Duties

Number ofCommon Shares(in thousands)

2017 Special Advisor to the Cabinet 2018 Retired
from Special Advisor to the Cabinet2018 Outside Member of the Board of Directorsof TMC (to present)(important concurrent duties)
Independent Director of Hitachi, Ltd.
Outside Director of FUJIFILM Holdings
Corporation
Sir Philip Craven(July 4, 1950)

Outside Member ofthe Board of
Directors

Masahiko Oshima
Outside Member of(September 13, 1960)
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 Federation2017 Retired as President of the International
Paralympic Committee
2018 Outside Member of the Board of Directorsof TMC (to present)—

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 SMBC2018 Senior Managing Corporate Executive
Officer of Sumitomo Mitsui Financial Group,
Inc. (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Name (Date of Birth)

Position

Brief Career Summary and Important Concurrent Duties

Emi Osono(August 8, 1965)

Outside Member ofthe 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 ofInternational Corporate Strategy, Hitotsubashi
University Business School2010 Professor at School of International
Corporate Strategy, Hitotsubashi University
Business School2018 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 Directorsof TMC (to present)

Number ofCommon Shares(in thousands)—(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 &1972 Joined TMC
Supervisory Board 2000 General Manager of Overseas Parts Division
Memberof TMC2007 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 &1985 Joined TMC
Supervisory Board 2015 General Manager of Affiliated Companies
MemberFinance Dept. of TMC
2018 General Manager of Audit & Supervisory
Board Office of TMC
2019 Audit & Supervisory Board Member of
TMC (to present)

29(important concurrent duties)
Outside Audit & Supervisory Board Member ofAichi Steel Corporation

102

Brief Career Summary and Important Concurrent Duties

Number ofCommon Shares(in thousands)

Name (Date of Birth)

PositionTakeshi Shirane(September 5, 1952)

Full-time Audit &1977 Joined TMC
Supervisory Board 2001 General Manager of Production
MemberManagement 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.
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. (to present)
Audit & Supervisory Board Member of TMC (topresent)

150

George Olcott(May 7, 1955)

Outside Audit &1986 Joined S.G.Warburg & Co.,Ltd
Supervisory Board 1999 President of UBS Asset Management
Member(Japan)1999 President, Japan UBS Brinson
2000 Managing Director, Equity Capital Markets,
UBS Warburg Tokyo
2001 Judge Business School, University ofCambridge
2005 FME Teaching Fellow, Judge Business
School, University of Cambridge
2008 Senior Fellow, Judge Business School,
University of Cambridge
2022 Outside Audit & Supervisory Board Memberof TMC (to present)2(important concurrent duties)
Outside Director of Kirin Holdings Company,
LimitedRyuji Sakai(August 7, 1957)

1985 Registered as attorney
Outside Audit &Supervisory Board Nagashima & Ohno
Member1990 Wilson, Sonsini, Goodrich & Rosati (locatedin 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)
Attorney103—

Name (Date of Birth)

Position

Brief Career Summary and Important Concurrent Duties

Catherine O’Connell Outside Audit &1987 Japan Travel Bureau Inc.
(February 10, 1967)
Supervisory Board 1994 Senior Solicitor of Anderson Lloyd
MemberBarristers & Solicitors (New Zealand)
2002 In House Counsel of Olympus Corporation
2004 Senior In House Counsel of Matsushita
Electric Industrial Co., Ltd. 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 (topresent)
2023 Outside Audit & Supervisory Board Memberof TMC (to present)

Number ofCommon Shares(in thousands)—(important concurrent duties)
Registered foreign attorney
External Audit & Supervisory Board Member of
Fujitsu Limited
1.

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.

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. 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.

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Set forth below is a brief summary of Toyota’s substitute audit & supervisory board member.

Name (Date of Birth)

Position

Brief Career Summary and Important Concurrent Duties

Maoko Kikuchi(July 14, 1965)

Substitute Audit &1992 Public Prosecutor at Public Prosecutor’s Office,Supervisory Board
Mistry of JusticeMember1997 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 (topresent)

Number ofCommonShares—(important concurrent duties)
Attorney
Outside Director of MITSUISOKO HOLDINGS Co.,Ltd.
Outside Director of Hitachi Construction MachineryCo., 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. Moreover,these individuals should be able to play a significant role in transforming Toyota into a mobility company andcontribute 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 andinternal two-way interactive teamwork. Toyota’s director compensation system is an important means throughwhich to promote various initiatives and is determined based on the following policy.
•

It should be a system that encourages members of the board of directors to work to improve themedium- to long-term corporate value of Toyota.

•

It should be a system that can maintain compensation levels that will allow Toyota to secure and retain
talented personnel.

•

It should be a system that motivates members of the board of directors to promote management from thesame viewpoint as our shareholders with a stronger sense of responsibility as corporate managers.

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 whilereflecting individual job responsibilities and performance. 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.
105Based on the resolution of the 115th Ordinary General Shareholders’ Meeting held on June 13, 2019
concerning remuneration for the members of the board of directors of Toyota, the maximum cash compensation
was set at 3.0 billion yen per year (of which, the maximum amount payable to outside members of the board of
directors is 0.3 billion yen per year), and the maximum share compensation was set at 4.0 billion yen per year.
The number of members of the board of directors as of the conclusion of the 115th Ordinary General
Shareholders’ Meeting was nine (including three outside members of the board of directors).
The amount of remuneration for audit & supervisory board members of Toyota was set at 30 million yen orless per month at the 104th Ordinary General Shareholders’ Meeting held on June 24, 2008. The number ofaudit & supervisory board members as of the conclusion of the 104th Ordinary General Shareholders’ Meeting
was seven.
The amount of remuneration for each member of the board of directors of Toyota and the remuneration
system are decided by the board of directors and the “Executive Compensation Meeting,” a majority of themembers of which are outside members of the board of directors, to ensure the independence of the decision. 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. Takeshi
Uchiyamada, Chairman of the Board of Directors, became a member of the Board of Directors as of thesame date, and subsequently retired as a member of the Board of Directors upon the conclusion of theOrdinary 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. Yoichi Miyazaki,
Operating Officer, subsequently replaced Kenta Kon as a member of the Executive Compensation Meetingon 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. Kenta
Kon, a member of the Board of Directors, retired as a member of the Board of Directors upon the conclusionof the Ordinary General Shareholders’ Meeting held on June 14, 2023, and Yoichi Miyazaki, Operating
Officer, became a member of the Board of Directors upon the conclusion of the Ordinary General
Shareholders’ Meeting held on June 14, 2023.

*3

Masahiko Oshima and Emi Osono, both outside members of the Board of Directors, replaced Teiko Kudo,
an outside member of the Board of Directors, as members of the Executive Compensation Meeting on
June 14, 2023. Teiko Kudo, an outside member of the Board of Directors, retired as an outside member ofthe Board of Directors upon the conclusion of the Ordinary General Shareholders’ Meeting held on June 14,
2023.

*4

The amount of remuneration for each outside member of the Board of Directors and the amount of
remuneration for each non-outside member of the Board of Directors were determined at meetings of the
Executive Compensation Meeting held in April 2022 and April 2023, respectively.

The board of directors resolves the policy for determining remuneration for and other payments to eachmember of the board of directors and the executive remuneration system as well as the total amount of
remuneration for a given fiscal year. The board of directors also resolves to delegate the determination of theamount of remuneration for each member of the board of directors to the Executive Compensation Meeting.
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 for106

determining remuneration for and other payments to each member of the board of directors established by theboard 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 theboard 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.
Executive Compensation Meetings were held in April 2022 and March and April 2023 to discuss anddetermine the amount of remuneration for fiscal 2023 and other relevant matters.
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. Remuneration for the members of the boardof directors were determined with the unanimous consent of the Executive Compensation Meeting.
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 ofthe 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 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 inaccordance 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.
Concept of Each Item
Consolidated operating
incomeIndicator for evaluating Toyota’s efforts based on businessperformance

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 boardof directors

107

Method and Reference Value for Evaluating Indicators and Evaluation Result for Fiscal 2022

Consolidated
operating income

Fluctuation of
Toyota’s market
capitalization

Evaluation
WeightEvaluation
Method70%

Evaluate the degree of attainmentof consolidated operating income
in fiscal 2021, using required
income (set in 2011) for Toyota’s
sustainable growth as reference
value

30%

Comparatively evaluate thefluctuation 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

Reference
Value

Evaluation
Result for
Fiscal 2022

¥1 trillion

Toyota: ¥30.4
trillion180%
TOPIX: ¥1,909.75

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. Annual Total Remuneration is set based on
consolidated operating income and the fluctuation of the market capitalization of Toyota, and then adjusted basedon individual performance evaluation. Individual performance evaluation takes into account various factors suchas initiatives (including the ESG perspective) in keeping with the spirit of the Toyoda Principles, which set forth
Toyota’s founding philosophy, trust from his or her peers and contribution to the promotion of human resources
development. The Individual performance evaluation is set within the range of 50% above or below Annual Total
Remuneration in accordance with the position and job responsibilities, and the amount of the annual total
remuneration for each member of the board of directors is calculated based on such evaluation results.
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 andstructures 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(application determined based on each member’s job responsibilities and other factors). 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). 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 forcertain members of the board of directors in light of the difference in income tax rates with those of his or herhome country.
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

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.
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 membersof the board of directors and audit & supervisory board members whose total compensation exceeded¥100 million during such period:

Name, Position

Compensation per Type (million yen)
Fixed
Performance-based
Total
Compensation
Compensation
Compensation
Monthly
Share
Retirement (millions ofClassification of Company Compensation Bonus Compensation
Benefitsyen)

Takeshi Uchiyamada, Memberof the Board of Directors . . . Toyota Motor Corporation
Shigeru Hayakawa, Member ofthe Board of Directors . . . . . . Toyota Motor Corporation
Akio Toyoda, Member of theBoard of Directors . . . . . . . . . Toyota Motor Corporation
James Kuffner, Member of theBoard of Directors . . . . . . . . . Toyota Motor
Corporation
Consolidated subsidiary(Woven Planet Holdings,
Inc.*)
Kenta Kon, Member of theBoard of Directors . . . . . . . . . Toyota Motor
Corporation
Consolidated subsidiary(Hino Motors, Ltd.)

122

—

319

—

151

264

—
73
1 (38,000 shares)735— (383,000 shares)

—

999

108
587

68
48

—
—

—
—

811

52

56

—

—

120

11

—

—

—

77

197

* Fixed compensation that Woven Planet Holdings, Inc., Toyota’s consolidated subsidiary, pays to James
Kuffner includes fixed compensation that is paid trimonthly and annually. In addition to the above
compensation, Toyota and its consolidated subsidiary, Woven Planet Holdings, Inc. paid a tax compensationof 520 million yen to James Kuffner, taking into account the difference in tax rates with respect to his homecountry and Japan. Woven Planet Holdings, Inc. was renamed Woven by Toyota, Inc. on April 1, 2023.
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. The normal term of office of amember of the board of directors is one year and that of an audit & supervisory board member is four years.
Members of the board of directors and audit & supervisory board members may serve any number of consecutive
terms.
The board of directors may appoint one Chairman of the Board of Directors and one President, as well as
one or more Vice Chairmen of the Board and Executive Vice Presidents. The board of directors elects, pursuant
to its resolutions, one or more Representative Directors. Each Representative Director represents Toyota
generally in the conduct of its affairs. The board of directors has the ultimate responsibility for the administrationof 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.
109

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 themember of the board of directors, such a decision must be made by a resolution of the board of directors. Under
the provisions of the Companies Act, if Toyota decides the terms of an insurance agreement to be executed withan 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, suchdecision must be made by a resolution of the board of directors.
Under the Companies Act and Toyota’s articles of incorporation, Toyota may, by a resolution of its board of
directors, exempt members of the board of directors (including former members of the board of directors) fromtheir liabilities to Toyota arising in connection with their failure to execute their duties within the limits
stipulated by laws and regulations. In addition, Toyota may enter into a liability limitation agreement with eachmember of the board of directors (excluding executive members of the board of directors, among others) 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.
Under the Companies Act, Toyota must have at least three audit & supervisory board members. At least halfof the audit & supervisory board members are required to be an “outside” audit & supervisory board member,which is any person who satisfies all of the following requirements:(a) the person has never been a member of the board of directors, accounting counselor (in the case that an
accounting counselor is a legal entity, an employee of such entity who is in charge of its affairs), executive
officer, manager or employee of Toyota or its subsidiaries during the ten year period before becoming an outside
audit & supervisory board member;(b) if the person was an audit & supervisory board member of Toyota or any of its subsidiaries at any time
during the ten year period before becoming an outside audit & supervisory board member, such person has notbeen a member of the board of directors, accounting counselor (in the case that an accounting counselor is a legal
entity, an employee of such entity who is in charge of its affairs), executive officer, manager or employee ofToyota or any of its subsidiaries during the ten year period before becoming an audit & supervisory board
member of Toyota or any of its subsidiaries; and(c) the person is not a spouse or relative within the second degree of kinship of any member of the board of
directors or manager or other key employee of Toyota.
The audit & supervisory board members may not at the same time be a member of the board of directors, anaccounting counselor (in case that an accounting counselor is a judicial person, a member of such judicial person
who is in charge of its affairs), executive officers, general managers or employees of Toyota or any of its
subsidiaries. Together, these audit & supervisory board members form the audit & supervisory board. The
audit & supervisory board members have the duty to examine the financial statements and business reports which
are submitted by the board of directors to the general shareholders’ meeting. The audit & supervisory board
members also monitor the administration of Toyota’s affairs by the members of the board of directors. Audit &supervisory board members are not required to be, and Toyota’s audit & supervisory board members are not,certified public accountants. They are required to participate in meetings of the board of directors but are notentitled to vote.
Under the Companies Act and Toyota’s articles of incorporation, Toyota may, by a resolution of its board of
directors, exempt audit & supervisory board members (including former audit & supervisory board members)from their liabilities to Toyota arising in connection with their failure to execute their duties within the limits
stipulated by laws and regulations. In addition, Toyota may enter into a liability limitation agreement with each
audit & supervisory board member which limits the maximum amount of their liabilities owed to Toyota arising110

in connection with their failure to execute their duties to an amount equal to the minimum liability limit amountprescribed in the laws and regulations.
Toyota does not have a remuneration committee. However, members of Toyota’s Executive Compensation
Meeting discuss remuneration for members of the board of directors.
The Executive Compensation Meeting reviews the remuneration system for members of the board of
directors and senior management 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 andperformance. 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 ofthe Board of Directors.
6.D EMPLOYEESThe total number of Toyota employees, on a consolidated basis, was 375,235 as of March 31, 2023, 372,817
as of March 31, 2022, and 366,283 as of March 31, 2021. The following tables set forth a breakdown of persons
employed by business segment and by geographic location as of March 31, 2023.
Segment

Automotive . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . .
All other . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unallocated . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of
Employees

Location

332,425 Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,894 North America . . . . . . . . . . . . . . . . . . . . . .
22,856 Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,060 Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . .
375,235 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of
Employees

203,21259,00023,73066,17623,117375,235* “Other” consists of Central and South America,
Oceania, Africa and the Middle East.
Most regular employees of Toyota Motor Corporation and its consolidated subsidiaries in Japan, other thanmanagement, are required to become members of the labor unions that compose the Federation of All Toyota
Workers’ Unions. Approximately 86% of Toyota Motor Corporation’s regular employees in Japan are membersof this union.
In Japan, basic wages and other working conditions are negotiated annually. In addition, in accordance withJapanese national custom, each employee is also paid a semi-annual bonus. Bonuses are negotiated at the time ofwage 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.
In general, Toyota considers its labor relations with all of its workers to be good. However, Toyota iscurrently a party to, and otherwise from time to time experiences, labor disputes in some of the countries inwhich it operates. Toyota does not expect any disputes to which it is currently a party to materially affectToyota’s consolidated financial position.
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. Directors, Senior Management and
Employees — 6.A Directors and Senior Management.”
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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.
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 shallnot 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.
The overview of the share compensation is as follows.
Eligible Persons

Members of the board of directors of Toyota (excluding outside membersof the board of directors)

Total amount of the sharecompensation

Maximum of 4.0 billion yen per year

Amount of the sharecompensation payable to eachmember of the board of
directors

Set each year considering factors such as corporate results, duties, andperformance

Type of shares to be allotted
and method of allotment

Issue or disposal of common stock (with transfer restrictions under anallotment agreement)

Total number of shares to be
allotted

Maximum of 4,000,000 shares per year in total to eligible members of theboard of directors(Provided, however, that if a stock split, including a gratis allotment, or areverse stock split of Toyota’s common stock is carried out after June 15,2022, or in case of events that otherwise require an adjustment to the total
number of Toyota’s shares of common stock to be issued or disposed of as
restricted share compensation, such total number of shares will be adjusted
to a reasonable extent.)

Amount to be paid

Determined by the board of directors of Toyota based on the closing priceof Toyota’s common stock on the Tokyo Stock Exchange on the business
day prior to each resolution of the board of directors, within a range that is
not particularly advantageous to eligible members of the board of directors

Transfer restriction period

A period of three to fifty years from the allotment date, which isdetermined by the board of directors of Toyota in advance

Conditions for removal oftransfer restrictions

Restrictions will be removed upon the expiration of the transfer restriction
period. However, restrictions will also be removed in the case of expirationof the term of office, death, or other legitimate reasons.

Gratis acquisition by Toyota

Toyota will be able to acquire all allotted shares without consideration in
the case of violations of laws and regulations or other reasons specified by
the board of directors of Toyota during the transfer restriction period.

Members of the board of directors of Toyota with foreign citizenship are not eligible for the sharecompensation.
Toyota also has an employee stock ownership association in Japan for employees and full time and part timecompany advisors. Members of the employee stock ownership association set aside certain amounts from their112monthly salary and bonuses to purchase Toyota’s common stock through the employee stock ownershipassociation. As of March 31, 2023, the employee stock ownership association held 74,266,923 shares of Toyota’scommon stock.
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 shareswere treasury stock and 13,565,179,729 shares were outstanding) were issued. Toyota resolved at its board of
directors meeting held on December 14, 2020 to exercise Toyota’s cash call option to acquire all outstanding
Model AA Class Shares and, subject to such acquisition, to cancel all Model AA Class Shares pursuant to theCompanies Act. Toyota completed the acquisition of all outstanding Model AA Class Shares on April 2, 2021
and cancelled them on April 3, 2021. Information concerning beneficial ownership of Toyota’s common stock inthe table below was prepared from information known to Toyota or that could be ascertained from public filings,
including filings made by Toyota’s shareholders regarding their ownership of Toyota’s common stock under the
Financial Instruments and Exchange Law of Japan.
Under the Financial Instruments and Exchange Law, any person who becomes, beneficially and solely or
jointly, a holder, including, but not limited to, a deemed holder who manages shares for another holder pursuant
to a discretionary investment agreement, of more than 5% of the total issued shares of a company listed on a
Japanese stock exchange (including American Depositary Shares, or ADSs, representing such shares) must file areport concerning the shareholding with the director of the relevant local finance bureau. A similar report must be
filed, with certain exceptions, if the percentage of shares held by a holder, solely or jointly, of more than 5% of
the total issued shares of a company increases or decreases by 1% or more, or if any change to a material matterset forth in any previously filed reports occurs.
Based on information known to Toyota or that can be ascertained from public filings, the following tablesets forth the beneficial ownership of holders of 5% or more of Toyota’s common stock as of the most recent
practicable date.

Name of Beneficial Owner

Toyota Industries Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of
Shares ofCommon Stock(in thousands)

Percentage of
Outstanding
Voting Shares ofCommon Stock

1,192,331

8.81

According to The Bank of New York Mellon, depositary for Toyota’s ADSs (the “Depositary”), as ofMarch 31, 2022, 292,036,035 shares of Toyota’s common stock were held in the form of ADSs and there were1,740 ADS holders of record and 515,686 beneficial owners in the United States. According to Toyota’s registerof 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. Because some ofthese shares were held by brokers or other nominees, the number of record holders with addresses in the UnitedStates might not fully show the number of beneficial owners in the United States.
None of Toyota’s shares of common stock entitles the holder to any preferential voting rights.
Toyota cancelled all of the First Series Model AA Class Shares on April 3, 2021, and as such, there are no
holders of First Series Model AA Class Shares.
To the extent known to Toyota, Toyota is not owned or controlled, directly or indirectly, by anothercorporation, any foreign government or any natural or legal person.
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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 stockof Toyota as of September 30, 2021, the record date, into five shares, effective October 1, 2021. Toyota decided
to do so in order to create an environment in which Toyota shares are more accessible to a broader base ofinvestors by reducing the price per investment unit. In conjunction with the stock split, in accordance with
Article 184, Paragraph 2 of the Companies Act, Toyota amended its articles of incorporation to increase the total
number of shares of common stock which Toyota is authorized to issue from 10,000,000,000 to 50,000,000,000
on October 1, 2021, the effective date of the stock split.
7.B RELATED PARTY TRANSACTIONSBusiness Relationships
Toyota purchases materials, supplies and services, among others, from numerous suppliers throughout theworld in the ordinary course of business, including Toyota’s associates and joint ventures accounted for by theequity method and those 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 amountof ¥9,951.5 billion in fiscal 2023. Toyota also sells its products and services, among others, to Toyota’s
associates and joint ventures accounted for by the equity method and firms with which certain members of
Toyota’s board of directors are affiliated. Toyota 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 withassociates and joint ventures.
For a discussion of the Memorandum of Understanding concerning conducting a business combination of
Mitsubishi Fuso and Hino Motors, please see “Item 4. 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 boardof directors are affiliated. Toyota had outstanding trade accounts and other receivables by these associates andjoint ventures in the amount of ¥532.6 billion as of March 31, 2023. Toyota had outstanding trade accounts andother payables to these associates and joint ventures in the amount of ¥1,459.9 billion as of March 31, 2023.
Toyota, from time to time, provides short- to medium-term loans to its associates and joint ventures, as well
as loans under a loan program established by certain subsidiaries to assist their executives and members of theboard of directors with the purchase of homes. As of March 31, 2023, an aggregate amount of ¥179.6 billion inloans 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.
ITEM 8. FINANCIAL INFORMATION
8.A CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
1-3. Consolidated Financial Statements. Toyota’s audited consolidated financial statements are included under“Item 18 — Financial Statements.” Except for Toyota’s consolidated financial statements included under
Item 18, no other information in this annual report has been audited by Toyota’s auditors.
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4.

Not applicable.

5.

Not applicable.

6.

Export Sales. See “Item 5. Operating and Financial Review and Prospects — 5.A Operating Results —Overview — Geographic Breakdown.”

7.

Legal and Arbitration Proceedings. See “Item 4. Information on the Company — 4.B Business Overview —Legal Proceedings.”

8.

Dividend Information.

Toyota normally pays dividends twice per year, including an interim dividend and a year-end dividend.
Toyota’s articles of incorporation provide that retained earnings can be distributed as dividends pursuant to a
resolution of its board of directors. Toyota’s board of directors resolves to pay year-end dividends to holders ofcommon stock and registered pledgees of common stock of record as of March 31, the record date, in each year.
At the 111th Ordinary General Shareholders’ Meeting held in June 2015, Toyota’s shareholders approved
amendments to Toyota’s articles of incorporation permitting the issuance of Model AA Class Shares in the
future. Toyota resolved at its board of directors meeting held on December 14, 2020 to exercise Toyota’s cash
call option to acquire all outstanding First Series Model AA Class Shares and, subject to such acquisition, tocancel all First Series Model AA Class Shares pursuant to the Companies Act. Toyota completed the acquisitionof all outstanding First Series Model AA Class Shares on April 2, 2021 and cancelled them on April 3, 2021. At
the 117th Ordinary General Shareholders’ Meeting held in June 2021, Toyota’s shareholders approved
amendments to Toyota’s articles of incorporation to, among other things, eliminate the First Series Model AA
Class Shares through the Fifth Series Model AA Class Shares as classes of Toyota’s capital stock, effective
June 16, 2021. Prior to the June 16, 2021 amendment, the articles of incorporation provided that, in the event that
Toyota paid a year-end dividend to holders of common stock, it would pay a year-end dividend to any holders ofModel AA Class Shares or registered pledgees of Model AA Class Shares of record as of the record date for the
year-end dividend, in the amount payable on the Model AA Class Shares pursuant to their terms (“AADividends”), in preference to holders of common stock or registered pledgees of common stock.
In addition to these year-end dividends, Toyota may pay an interim dividend in the form of cash
distributions from its distributable surplus to holders of common stock and pledgees of common stock of record
as of September 30, the record date, in each year by a resolution of its board of directors. Prior to the June 16,
2021 amendment, the articles of incorporation provided that, in the event that Toyota paid such interim
dividends, Toyota would pay an amount equivalent to one-half of the AA Dividends as an interim dividend toany holders of Model AA Class Shares or registered pledgees of Model AA Class Shares of record as of therecord date for the interim dividend, in preference to holders of common stock or registered pledgees of common
stock.
In addition, under the Companies Act, dividends may be paid to holders of common stock and pledgees ofrecord of common stock as of any record date, other than those specified above, as set forth in Toyota’s articles
of incorporation or as determined by its board of directors from time to time. Under the Companies Act,
dividends may be distributed in cash or (except in the case of interim dividends mentioned in the third preceding
paragraph) in kind, subject to limitations on distributable surplus and to certain other conditions.

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The following table sets forth the dividends declared per share of common stock by Toyota for each of theperiods shown. The periods shown are the six months ended on that date. The U.S. dollar equivalents for the cash
dividends shown are based on the noon buying rate for Japanese yen on the last date of each period set forth
below.
Cash Dividends
per Common ShareYen
U.S. dollars

Period Ended

September 30, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

105.0
0.99
135.0
1.22
120.0
1.07
28.0
0.23
<140.0> <1.15>
25.0
0.17
<125.0> <0.86>
35.0
0.26
<175.0>* <1.32>** The numbers in angle brackets are calculated based on a “pre-stock split” basis, that is, on the assumption thatthe five-for-one stock split that Toyota effected on October 1, 2021 had not taken place.
Toyota deems improving shareholder returns as one of its priority management policies, and it will continue
to work to improve its corporate culture to realize sustainable growth in order to enhance its corporate value.
Toyota will strive for the stable and continuous increase of dividends.
With a view to surviving tough competition and transitioning to a mobility company, Toyota will aim toutilize its internal funds mainly for investment in growth for the next generation, such as environmental
technologies to achieve a carbon-neutral society and safety technologies for the safety and security of its
customers, and also for the stakeholders such as employees, business partners and local communities.
Considering these factors, with respect to the dividends for fiscal 2023, Toyota has determined to pay a
year-end dividend of 35 yen (175 yen on a pre-stock split basis) per share of common stock by a resolution of theboard of directors pursuant to Toyota’s articles of incorporation. As a result, combined with the interim dividendof 25 yen (125 yen on a pre-stock split basis) per share of common stock, the annual dividend will be 60 yen (300yen on a pre-stock split basis) per share of common stock, and the total amount of the dividends on common
stock for the year will be 816.9 billion yen.
Furthermore, Toyota resolved, at its board of directors meeting held on May 10, 2023, to repurchase up to
120 million shares of its common stock between June 17, 2022 and September 30, 2022 at a total maximum
purchase price of 150 billion yen.
Toyota intends to repurchase shares flexibly by taking into consideration the price level of its common stockand other factors.
8.B SIGNIFICANT CHANGES
Except as disclosed in this annual report, there have been no significant changes since the date of Toyota’s
latest annual financial statements.
ITEM 9. THE OFFER AND LISTING
9.A LISTING DETAILS
Shares of Toyota common stock are traded on the Prime Market of the Tokyo Stock Exchange and the
Nagoya Stock Exchange under the ticker symbol “7203” in Japan, and on the London Stock Exchange under the116

ticker symbol “TYT.” Toyota’s ADSs, each representing ten shares of Toyota common stock, are listed on the
New York Stock Exchange, or NYSE, under the ticker symbol “TM.”9.B PLAN OF DISTRIBUTION
Not applicable.
9.C MARKETSThe primary trading market for Toyota’s common stock is the Prime Market of the Tokyo Stock Exchange.
The common stock is also listed on the Nagoya Stock Exchange and on the London Stock Exchange.
Since September 29, 1999, American Depositary Shares, each equal to ten shares of Toyota’s common
stock, have been traded and listed on the New York Stock Exchange through a sponsored ADS facility operatedby The Bank of New York Mellon, as Depositary. Prior to that time, Toyota’s ADSs were listed on the Nasdaq
SmallCap Market through five unsponsored ADS facilities.
9.D SELLING SHAREHOLDERS
Not applicable.
9.E DILUTION
Not applicable.
9.F EXPENSES OF THE ISSUE
Not applicable.
ITEM 10. ADDITIONAL INFORMATION
10.A SHARE CAPITAL
Toyota resolved at its board of directors meeting held on May 12, 2021 to split each share of common stockof Toyota as of September 30, 2021, the record date, into five shares, effective October 1, 2021. Toyota decided
to do so in order to create an environment in which Toyota shares are more accessible to a broader base ofinvestors by reducing the price per investment unit.
In conjunction with the stock split, in accordance with Article 184, Paragraph 2 of the Companies Act,
Toyota amended its articles of incorporation to increase the total number of shares of common stock which
Toyota is authorized to issue from 10,000,000,000 to 50,000,000,000 on October 1, 2021, the effective date of
the stock split.
10.B MEMORANDUM AND ARTICLES OF ASSOCIATION
Except as otherwise stated, set forth below is information relating to Toyota’s common stock, including
brief summaries of the relevant provisions of Toyota’s articles of incorporation and share handling regulations, as
currently in effect, and of the Companies Act, Act Concerning Book-Entry Transfer of Corporate Bonds, Sharesand Other Securities and related legislation.
GeneralToyota’s authorized number of shares as of March 31, 2023 was 50,000,000,000 shares, of which
16,314,987,460 shares of common stock have been issued. In conjunction with the cancellation of all of theModel AA Class Shares on April 3, 2021, Toyota’s articles of incorporation were amended at the 117th Ordinary
General Shareholders’ Meeting held in June 2021.
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Toyota does not issue share certificates for its shares. In accordance with the Companies Act, the BookEntry Transfer Act and Toyota’s articles of incorporation, Toyota’s common stock are recorded or registered on(i) Toyota’s register of shareholders and (ii) transfer account books of the Japan Securities Depository Center,
Inc. (“JASDEC”) which is a book-entry transfer institution, and securities firms, banks or other accountmanagement institutions. The transfer of common stock will generally become effective once the transfer isrecorded in the transferee’s account. There are no restrictions imposed by Toyota’s articles of incorporation or
share handling regulations on the transfer of common stock. In order to assert shareholders’ rights against
Toyota, a shareholder must generally have his or her name and address recorded or registered on Toyota’s
register of shareholders. A holder of common stock can assert minority shareholders’ rights (shareholders’ rights
for which Toyota has not set a record date) against Toyota if JASDEC provides an individual shareholder notice
to Toyota upon the shareholder’s request. The shareholder of deposited shares underlying the ADSs is the
Depositary for the ADSs. Accordingly, holders of ADSs will not be able directly to assert shareholders’ rights.
A holder of common stock must have a transfer account to transfer shares. Holders of common stock who
do not have a transfer account with JASDEC must have an account with an account management institution that
directly or indirectly has a transfer account with JASDEC. Once Toyota decides on the record date for its
shareholders’ meeting or makes a request to JASDEC based on justifiable grounds, JASDEC will promptly
provide to Toyota names, addresses and other information with respect to the holders of Toyota’s common stock
who are recorded on the transfer account books of JASDEC or account management institutions. Upon receivingsuch information, Toyota will record or register such information received from JASDEC on its register ofshareholders. Accordingly, holders of common stock recorded or registered on Toyota’s register of shareholders
will be treated as holders of common stock of Toyota and may exercise rights, such as voting rights, and will
receive dividends (if any) and notices to holders of common stock directly from Toyota. Holders of common
stock wishing to assert minority shareholders’ rights against Toyota must request an individual shareholder
notice to JASDEC or the account management institution at which the shareholder has opened a transfer account.
In response to such request, JASDEC will provide the individual shareholders notice to Toyota. A holder ofcommon stock may assert his or her minority shareholders’ rights against Toyota for a period of four weeks after
the date the individual shareholder notice is provided to Toyota. The shares held by a person who is deemed tohold additional shares according to the transfer account books are aggregated for these purposes.
Corporate Purpose
Article 2 of Toyota’s articles of incorporation states that its purpose is to engage in the following
businesses:•

the manufacture, sale, leasing and repair of:•

motor vehicles, industrial vehicles, ships, aircraft, other transportation machinery and apparatus,
spacecraft and space machinery and apparatus, and parts thereof;•

industrial machinery and apparatus, other general machinery and apparatus, and parts thereof;•electrical machinery and apparatus, and parts thereof; and•measuring machinery and apparatus, medical machinery and apparatus, and parts thereof;•

the manufacture and sale of ceramics and products of synthetic resins, and materials thereof;•

the manufacture, sale and repair of construction materials and equipment, furnishings and fixtures forresidential buildings;•

the planning, designing, supervision, execution and undertaking of construction works, civil engineering
works, land development, urban development and regional development;•

the sale, purchase, leasing, brokerage and management of real estate;•

the service of information processing, information communications and information supply and thedevelopment, sale and leasing of software;118•the design and development of product sales systems that utilize networks such as the Internet, sale,leasing and maintenance of computers included within such systems, and sale of products by utilizing
such systems;•

the inland transportation, marine transportation, air transportation, stevedoring, warehousing andtourism businesses;•

the printing, publishing, advertising and publicity, general leasing, security and workers dispatch
businesses;•

the credit card operations, purchase and sale of securities, investment consulting, investment trust
operation, and other financial services;•

the operation and management of such facilities as parking lots, showrooms, educational facilities,
medical care facilities, sports facilities, marinas, airfields, food and drink stands and restaurants, lodging
facilities, retail stores and others;•

the non-life insurance agency business and the life insurance agency business;•the production and processing by using biotechnology of agricultural products including trees, and thesale of such products;•

the power generation and the supply and sale of electric power;•

the sale of goods related to each of the preceding items and mineral oil;•the conducting of engineering, consulting, invention and research relating to each of the preceding items
and the utilization of such invention and research; and•any businesses incidental to or related to any of the preceding items.

Dividends
Dividends — General
Toyota normally pays dividends twice per year, including an interim dividend and a year-end dividend.
Toyota’s articles of incorporation provide that retained earnings can be distributed as dividends pursuant to a
resolution of its board of directors. Toyota’s board of directors resolves to pay year-end dividends toshareholders and registered pledgees of record as of March 31, the record date, in each year.
In addition to these year-end dividends, Toyota may pay an interim dividend in the form of cash
distributions from its distributable surplus to holders of stock and pledgees of stock of record as of September 30,
the record date, in each year by a resolution of its board of directors.
In addition, under the Companies Act, dividends may be paid to shareholders and pledgees of record as ofany record date, other than those specified above, as set forth by Toyota’s articles of incorporation or as
determined by its board of directors from time to time. Under the Companies Act, dividends may be distributedin cash or (except in the case of interim dividends mentioned in the second preceding paragraph) in kind, subject
to limitations on distributable surplus and to certain other conditions.
Dividends — Distributable AmountUnder the Companies Act, Toyota is permitted to make distributions of surplus to the extent that theaggregate book value of the assets to be distributed to shareholders does not exceed the distributable amountprovided for by the Companies Act and the ordinance of the Ministry of Justice as at the effective date of such
distribution of surplus.
The amount of surplus at any given time shall be the amount of Toyota’s assets and the book value ofToyota’s treasury stock after subtracting and adding the amounts of items provided for by the Companies Act and119the ordinance of the Ministry of Justice, and the amount of surplus distributable for dividends is calculated byadding to and subtracting from this amount the amounts of items provided for by the Companies Act and theordinance of the Ministry of Justice.
Dividends — Prescription
Under its articles of incorporation, Toyota is not obligated to pay any dividends in cash which are left
unclaimed for a period of three years after the date on which they first became payable.
Capital Accounts
The amount of the cash or assets paid or contributed by subscribers for new shares (with certain exceptions)is required to be accounted for as stated capital, although Toyota may account for an amount not exceeding
one-half of such cash or assets as additional paid-in capital.
Under the Companies Act, Toyota may reduce its additional paid-in capital and legal reserve without
limitation on the amount to be reduced, generally, by a resolution of a general shareholders’ meeting and if so
decided by the same resolution, may account for the whole or any part of the amount of the reduction of
additional paid-in capital as stated capital. The whole or any part of surplus which may be distributed as
dividends may also be transferred to stated capital by a resolution of a general shareholders’ meeting.
Stock Splits
Toyota may at any time split the outstanding shares into a greater number of shares by a resolution of theboard of directors. Toyota must give public notice of the stock split, specifying a record date for the stock split,
not less than two weeks prior to the record date.
Consolidation of Shares
Toyota may at any time consolidate shares in issue into a smaller number of shares by a special shareholders
resolution (as defined in “Voting Rights”). When a consolidation of shares is to be made, Toyota must give
public notice of certain matters two weeks prior to the effective date of the consolidation.
Japanese Unit Share System
General. Consistent with the requirements of the Companies Act, Toyota’s articles of incorporation providethat 100 shares constitute one “unit.” Although the number of shares constituting a unit is included in the articles
of incorporation, any amendment to the articles of incorporation reducing (but not increasing) the number ofshares constituting a unit or eliminating the provisions for the unit of shares may be made by a resolution of theboard of directors rather than by a special shareholders resolution, which is otherwise required for amending thearticles of incorporation.
Voting Rights under the Unit Share System. Under the unit share system, shareholders have one voting
right for each unit of shares that they hold. Any number of shares less than a full unit will carry no voting rights.
Purchase by Toyota of Shares Constituting Less Than a Unit. A holder of shares constituting less than afull unit may require Toyota to purchase those shares at their market value in accordance with the provisions of
Toyota’s share handling regulations and the Companies Act.
Voting Rights
Toyota holds its ordinary general shareholders’ meeting each year. In addition, Toyota may hold anextraordinary general shareholders’ meeting whenever necessary by giving at least two weeks’ advance notice.
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Under the Companies Act, notice of any shareholders’ meeting must be given to each shareholder having voting
rights or, in the case of a non-resident shareholder, to his or her resident proxy or mailing address in Japan inaccordance with Toyota’s share handling regulations, at least two weeks prior to the date of the meeting.
Holders of common stock shall have voting rights exercisable at a general shareholders’ meeting. A holderof shares constituting one or more whole units is entitled to one vote per unit of shares subject to the limitations
on voting rights set forth in this paragraph. In general, under the Companies Act, a resolution can be adopted at a
general shareholders’ meeting by a majority of the shares having voting rights represented at the meeting. The
Companies Act and Toyota’s articles of incorporation require a quorum for the election of members of the boardof directors and audit & supervisory board members of not less than one-third of the total number of outstanding
shares having voting rights. Toyota’s shareholders are not entitled to cumulative voting in the election ofmembers of the board of directors. A corporate shareholder, the management of which is substantially under
Toyota’s control as provided by an ordinance of the Ministry of Justice, either through the holding of voting
rights or for any other reason, does not have voting rights.
Under the Companies Act, Toyota shall implement the electronic provision measures (“Electronic
Provision”) for the information contained in the reference materials, etc. for general shareholders’ meetings.
The convocation notice of shareholders’ meeting must set forth the information contained in the referencematerials, etc. for general shareholders’ meetings being provided through the Electronic Provision and the URLof the website used for the Electronic Provision, in addition to the place, the time and the purpose of the meeting.
The information contained in the reference materials, etc. for general shareholders’ meetings must be posted on a
website from the earlier of the date three weeks prior to the date set for the meeting or the date on which theconvocation notice of shareholders’ meeting is dispatched until the date on which three months have elapsed
from the meeting. In general, any shareholder is entitled to request printed paper copies of the information
contained in the reference materials, etc. for general shareholders’ meetings by the record date for voting rights at
the relevant general shareholders’ meeting.
Shareholders may exercise their voting rights by attending the general shareholders’ meeting or in writingby mail. Shareholders who choose to exercise their voting rights by mail must fill out and return to Toyota thevoting right exercise form enclosed with the convocation notice of the general shareholders’ meeting by the datespecified in such convocation notice. In addition, from the general shareholders’ meeting for fiscal 2009,
shareholders may exercise their voting rights through the internet. Shareholders electing to exercise their voting
rights through the internet must log on to the “Website to Exercise Voting Rights” using the login ID andtemporary password provided in the voting right exercise form enclosed with the convocation notice and submit
their votes by a date specified in the convocation notice, following instructions appearing on the website.
Institutional investors may also use the Electronic Proxy Voting Platform operated by Investor Communications
Japan to exercise their voting rights through the use of the Internet, if such institutional investor applies to use theplatform in advance. Shareholders may also exercise their voting rights through proxies, provided that thoseproxies are also shareholders who have voting rights. Toyota may refuse a shareholder having two or more
proxies attend a general shareholders’ meeting.
The Companies Act provides that a quorum of at least one-third of outstanding shares with voting rights
must be present at a shareholders’ meeting to approve any material corporate actions such as:(1) any amendment of the articles of incorporation with certain exceptions in which a shareholders’
resolution is not required;(2) acquisition of its own shares from a specific party;(3) consolidation of shares;(4) any issue or transfer of its shares at a “specially favorable” price (or any issue of stock acquisitionrights or bonds with stock acquisition rights at “specially favorable” conditions by Toyota) to any
persons other than shareholders;121

(5) the removal of an audit & supervisory board member;(6) the exemption of liability of a director or audit & supervisory board member with certain
exceptions;(7) a reduction of stated capital which meets certain requirements with certain exceptions;(8) a distribution of in-kind dividends which meets certain requirements;(9) dissolution, merger, or consolidation with certain exceptions in which a shareholders’ resolution is
not required;(10) the transfer of the whole or a material part of the business;(11) the transfer in entirety or in part of shares or equity interest of a subsidiary under certain
conditions;(12) the taking over of the entire business of any other corporation with certain exceptions in which ashareholders’ resolution is not required;(13) share exchange or share transfer for the purpose of establishing 100% parent-subsidiary
relationships with certain exceptions in which a shareholders’ resolution is not required;(14) company split with certain exceptions in which a shareholders’ resolution is not required; or(15) share delivery with certain exceptions in which a shareholders’ resolution is not required.
At least two-thirds of the shares having voting rights represented at the meeting must approve these actions.
The voting rights of holders of ADSs are exercised by the Depositary based on instructions from those
holders.
Rights to be Allotted Shares
Shareholders have no preemptive rights under Toyota’s articles of incorporation. Under the Companies Act,the board of directors may, however, determine that shareholders shall be given rights to be allotted shares orstock acquisition rights on request in connection with a particular issue or transfer of shares, or issue of stockacquisition rights, respectively. In this case, such rights must be given on uniform terms to all shareholders as ofa specified record date by at least two weeks’ prior public notice to shareholders of the record date.
Rights to be allotted shares are nontransferable. However, a shareholder may be allotted stock acquisitionrights without consideration thereto, and may transfer such rights.
Liquidation Rights
In the event of a liquidation of Toyota, the assets remaining after payment of all debts, liquidation expenses
and taxes will be distributed among the shareholders or registered pledgees in proportion to the respective
number of shares they own.
Liability to Further Calls or Assessments
All of Toyota’s currently outstanding shares, including shares represented by the ADSs, are fully paid andnonassessable.
Transfer Agent
Mitsubishi UFJ Trust and Banking Corporation is the transfer agent for all shares. Mitsubishi UFJ Trust andBanking Corporation’s office is located at 4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo, 100-8212 Japan.
Mitsubishi UFJ Trust and Banking Corporation maintains Toyota’s register of shareholders and records transfersof record ownership (in the case of common stock, upon receiving notification from JASDEC).
122

Record Date
The close of business on March 31 is the record date for Toyota’s year-end dividends, if paid. A holder ofshares constituting one or more whole units who is recorded or registered as a holder on Toyota’s register at theclose of business as of March 31 is also entitled to exercise shareholders’ voting rights at the ordinary generalshareholders’ meeting with respect to the business year ending on March 31. The close of business on
September 30 of each year is the record date for interim dividends, if paid. In addition, Toyota may set a record
date for determining the shareholders entitled to other rights and for other purposes by giving at least two weeks’prior public notice.
The shares generally trade ex-dividend or ex-rights on the Japanese stock exchanges on the business day
preceding a record date (or if the record date is not a business day, one business day prior thereto), for the
purpose of dividends or rights offerings.
Acquisition by Toyota of Shares
Toyota may acquire its own shares (i) through a stock exchange on which such shares are listed or by wayof tender offer (pursuant to an ordinary resolution of a general shareholders’ meeting or a resolution of the boardof directors), (ii) by purchase from a specific party (pursuant to a special resolution of a general shareholders’meeting) or (iii) from a subsidiary of Toyota (pursuant to a resolution of the board of directors). When suchacquisition of shares is made by Toyota from a specific party other than a subsidiary of Toyota, any othershareholder may make a demand to a representative director, more than five calendar days prior to the relevant
shareholders’ meeting, that Toyota also purchase the shares held by such holder. However, the acquisition of its
own shares at a price not exceeding the market price to be provided under an ordinance of the Ministry of Justicewill not trigger the right of any shareholder to include him/her as the seller of his/her shares in such proposed
purchase.
Any acquisition of shares must satisfy certain requirements that the total amount of the acquisition price
may not exceed the amount of the distributable dividends. See “Item 10. Additional Information — 10.B
Memorandum and Articles of Association — Dividends.”
Shares acquired by Toyota may be held by it for any period or may be cancelled by resolution of the boardof directors. Toyota may also transfer to any person the shares held by it, subject to a resolution of the board of
directors, and subject also to other requirements applicable to the issuance of new shares. Toyota may also utilize
its treasury stock for the purpose of transfer to any person upon exercise of stock acquisition rights or for the
purpose of acquiring another company by way of merger, share exchange or corporate split through exchange oftreasury stock for shares or assets of the acquired company.
The Companies Act generally prohibits any subsidiary of Toyota from acquiring shares of Toyota.
Report of Substantial Shareholdings
The Financial Instruments and Exchange Law of Japan and regulations under the Law require any person
who has become a holder (together with its related persons) of more than 5% of the total issued shares of acompany listed on any Japanese stock exchange (including ADSs representing such shares) to file with the
Director of a competent Local Finance Bureau, within five business days, a report concerning thoseshareholdings. A similar report must also be filed to reflect any change of 1% or more in any shareholding or any
change in material matters set out in reports previously filed. Any such report shall be filed with the Director of acompetent Local Finance Bureau through the Electronic Disclosure for Investor’s Network (“EDINET”) system.
For this purpose, shares issuable to a shareholder upon exercise of stock acquisition rights are taken into accountin determining both the number of shares held by that stock acquisition rights holder and the company’s total
issued shares.
12310.C MATERIAL CONTRACTS
All material contracts concluded by Toyota during the two years preceding this filing were entered into in
the ordinary course of business.
10.D EXCHANGE CONTROLSThe following is a general summary of major Japanese foreign exchange control regulations applicable toholders of shares of capital stock or voting rights (including ADSs) of Toyota, and to others intending toconsummate other actions such as obtaining consent from other investors holding voting rights and consenting tocertain proposals at a general shareholders meeting, who are “exchange non-residents” or “foreign investors,” asdescribed below. The statements regarding Japanese foreign exchange control regulations set forth below are
based on the laws and regulations in force and as interpreted by the Japanese authorities as of the date of thisannual report and are subject to subsequent changes in the applicable Japanese laws or interpretations thereof.
This summary is not exhaustive of all possible foreign exchange control considerations that may apply to aparticular investor, and potential investors are advised to satisfy themselves as to the overall foreign exchange
control consequences of the acquisition, ownership and disposition of shares of capital stock or voting rights ofToyota by consulting their own advisors.
The Foreign Exchange and Foreign Trade Act of Japan (Act No. 228 of 1949, as amended, the “FEFTA”)
and the cabinet orders and ministerial ordinances thereunder (collectively, the “Foreign Exchange Regulations”)
govern the acquisition and holding of shares of capital stock and voting rights of Toyota by “exchange
non-residents” and by “foreign investors.” The Foreign Exchange Regulations currently in effect do not,however, affect transactions between exchange non-residents to purchase or sell shares outside Japan using
currencies other than Japanese yen.
Exchange non-residents are:(i)

individuals who do not reside in Japan; and(ii) corporations whose principal offices are located outside Japan.
Generally, branches and other offices of non-resident corporations that are located within Japan are regarded
as residents of Japan. Conversely, branches and other offices of Japanese corporations located outside Japan are
regarded as exchange non-residents.
Foreign investors are:(i)

individuals who are exchange non-residents;(ii) corporations or other organizations that are organized under the laws of foreign countries or whose
principal offices are located outside of Japan;(iii) Japanese corporations of which 50% or more of their total voting rights are held directly or indirectly
by individuals who are exchange non-residents and/or corporations or other organizations fallingwithin (i) and/or (ii) above;(iv) partnerships under the Civil Code of Japan (Act No. 89 of 1896, as amended) established to invest in
corporations, limited partnerships for investment under the Limited Partnership Act for Investment ofJapan (Act No. 90 of 1998, as amended), or any other similar partnerships under foreign law, of which(a) 50% or more of the total contributions are made by individuals and/or corporations falling within(i), (ii), (iii) above and/or (v) below or any other persons prescribed under the Foreign Exchange
Regulations or (b) a majority of the general partners are individuals and/or corporations falling within(i), (ii), (iii) above and/or (v) below or any other persons prescribed under the Foreign Exchange
Regulations; and124

(v) corporations or other organizations, a majority of whose officers, or officers having the power ofrepresentation, are individuals who are exchange non-residents.
Acquisition of Shares
In general, the acquisition of shares of a Japanese company (such as the shares of capital stock of Toyota)
by an exchange non-resident from a resident of Japan is not subject to any prior filing requirements (other thanthose relating to an “inward direct investment” set out below). In certain limited circumstances, however, theMinister of Finance may require prior approval of an acquisition of this type. While prior approval, as describedabove, is not required in general, in the case where a resident of Japan transfers shares of a Japanese company(such as the shares of capital stock of Toyota) for consideration exceeding ¥100 million to an exchange
non-resident, the resident of Japan who transfers the shares is required to report the transfer to the Minister ofFinance within 20 days from the date of the transfer or the date of receipt of payment, whichever comes later,
unless (i) the transfer was made through a bank or financial instruments business operator licensed or registeredunder Japanese law or other entity prescribed by the Foreign Exchange Regulations acting as an agent orintermediary or (ii) the acquisition constitutes an “inward direct investment” described below.
Inward Direct Investment in Shares of Listed Companies
On May 8, 2020, an amendment to the Foreign Exchange Regulations came into effect. Upon the full
implementation of the Amendment as of June 7, 2020, the requirements and procedures regarding the priornotifications of inward direct investments to the Minister of Finance and any other competent Ministers under the
FEFTA, were amended. After the implementation of the Amendment, Japanese listed companies are classified
into the following categories:(i)companies engaged in businesses excluding certain businesses designated by the Foreign Exchange
Regulations as designated businesses (the “Designated Businesses”);(ii) companies engaged in Designated Businesses designated by the Foreign Exchange Regulations as core
sector businesses (the “Core Sector Designated Businesses”); and(iii) corporations engaged in Designated Businesses other than the Core Sector Designated Businesses (the“Non-Core Sector Designated Businesses”).
For reference purposes only, the Minister of Finance publishes, and may update from time to time, a list thatclassifies Japanese listed companies into the above categories. According to the list published by the Minister ofFinance as of April 24, 2023, the businesses which are currently engaged in by Toyota are classified as category(ii) i.e., the Core Sector Designated Businesses above.
Definition of Inward Direct Investment
If a foreign investor acquires shares or voting rights of a Japanese company that is listed on a Japanese stock
exchange (such as the shares of capital stock of Toyota) and, as a result of the acquisition, the foreign investor, in
combination with any existing holdings, directly or indirectly holds 1% or more of the issued shares or the total
number of voting rights of the relevant company, such acquisition constitutes an “inward direct investment.” In
addition, an acquisition of the authority to exercise, or instruct to exercise, voting rights held by othershareholders that results in the foreign investor, in combination with any existing shareholding, directly or
indirectly holding 1% or more of the total number of voting rights of the relevant company constitutes an“inward direct investment.” Furthermore, if a foreign investor manages, on a discretionary basis, shares or voting
rights of a Japanese company that is listed on a Japanese stock exchange and in combination with any existing
management, directly or indirectly manages 1% or more of the issued shares or the total number of voting rightsof the relevant company, such discretionary investment management generally constitutes an “inward direct
investment.”125

In addition to the acquisitions of shares or voting rights described above, if a foreign investor (i) is granted
the authority to exercise proxy voting rights on behalf of other shareholders of the relevant company regarding
certain matters which may control substantially or have a material influence on the management of suchcompany, such as the election or removal of directors, or (ii) obtains consent from another foreign investor
holding the voting rights of the relevant company to exercise the voting rights of such company jointly, and, ineach case, as a result of these arrangements, the number of the voting rights directly or indirectly held by theforeign investor, including the total number of the voting rights subject to such proxy, or the sum of the numberof the voting rights directly or indirectly held by the foreign investor and such other foreign investors subject tosuch joint voting agreement, as the case may be, is 10% or more of the total number of voting rights of therelevant company, each such arrangement regarding voting rights (hereinafter referred to as a “voting
arrangement”) also constitutes an “inward direct investment.” Additionally, if a foreign investor who directly or
indirectly holds 1% or more of the total voting rights of a Japanese listed company consents, at a general meetingof shareholders, to certain proposals having a material influence on the management of such company such as(i) election of such foreign investor or its related persons (as defined in the Foreign Exchange Regulations) as
directors or audit & supervisory board members of the relevant company or (ii) transfer or discontinuation of its
business, such consent will also constitute an “inward direct investment.”
Prior Notification Requirements
If a foreign investor intends to consummate an “inward direct investment” as described above, in certain
circumstances, such as where the foreign investor is in a country that is not listed on an exemption schedule in
the Foreign Exchange Regulations or where that Japanese company is engaged (as Toyota is currently) in one ormore Designated Businesses, prior notification of the relevant inward direct investment must be filed with the
Minister of Finance and any other competent Ministers.
However, a foreign investor seeking to consummate an “inward direct investment” may be eligible for the
exemptions, if certain conditions are met.
In the case of an acquisition (including investment discretionary management) of shares or voting rights or
the authority to exercise, directly or through instructions, voting rights of a Japanese listed company that is
engaged (as Toyota is currently) in one or more Core Sector Designated Businesses, the foreign investor may be
exempted from the prior notification requirement, if, as a result of such acquisition, the foreign investor directly
or indirectly holds less than 10% of the total number of issued shares or voting rights of the relevant company,
and such foreign investor complies with the following conditions:(i)the foreign investor or its closely-related persons (as defined in the Foreign Exchange Regulations) will
not become directors or audit & supervisory board members of the relevant company;(ii) the foreign investor will not make certain proposals (as prescribed in the Foreign Exchange
Regulations) at a general meeting of shareholders, including transfer or discontinuation of the
Designated Businesses of the relevant company;(iii) the foreign investor will not access non-public technical information in relation to the DesignatedBusinesses of the relevant company, or take certain other actions that may lead to the leak of suchnon-public technical information (as prescribed in the Foreign Exchange Regulations);(iv) the foreign investor will not attend, and will not cause any persons designated by it to attend, meetingsof the relevant company’s board of directors, or meetings of committees having authority to makeimportant decisions, in respect of the Core Sector Designated Businesses of the relevant company; and(v) the foreign investor will not make, and will not cause any persons designated by it to make, proposals
to such board or committees or their members in writing or electronic form requesting any response or
actions by certain deadlines in respect of the Core Sector Designated Businesses of the relevant
company.
126

In addition, in the case of an acquisition (including investment discretionary management) of shares orvoting rights or the authority to exercise, either directly or through instructions, voting rights of a Japanese listedcompany that is engaged in one or more Non-Core Sector Designated Businesses, the foreign investor may be
exempted from the prior notification requirement, including in the case where, as a result of such acquisition, theforeign investor holds 10% or more of the total number of issued shares or the total number of voting rights of
the relevant company, which would have required prior notification, if such foreign investor complies with theconditions (i) through (iii) above (the “Exemption Conditions”).
Notwithstanding the above, if a foreign investor falls under a category of disqualified investors designatedby the Foreign Exchange Regulations (including (a) investors who have records of certain sanctions due toviolations of the FEFTA and (b) certain investors who are state-owned enterprises or other related entities
excluding those who are accredited by the Minister of Finance), in no event may such foreign investor be eligible
for the exemptions described above. On the other hand, if a foreign investor, excluding the disqualified investors
described in the foregoing sentence, falls under a category of certain foreign financial institutions (as prescribedin the Foreign Exchange Regulations) and complies with the Exemption Conditions, such foreign investor may
be eligible for the exemptions, even if the acquisition results in such foreign investor’s directly or indirectly
holding 10% or more of the total number of issued shares or voting rights of a corporation engaged in one ormore Core Sector Designated Businesses.
In addition, if a foreign investor intends to make a voting arrangement with respect to a Japanese listedcompany engaged one or more Designated Businesses or consents to a proposal at a general meeting ofshareholders of such company, in each case, that constitutes an “inward direct investment” as described above, incertain circumstances, prior notification of the relevant inward direct investment must be filed with the Ministerof Finance and any other competent Ministers. However, the exemptions from the prior notification requirements
may be available in the cases where the relevant voting arrangement is regarding matters other than certain
matters which may control substantially or have a material influence on the management of the relevant
company, such as the election or removal of directors, which would have required prior notification.
Acquisitions of shares by foreign investors by way of stock split are not subject to the foregoing notification
requirements.
Procedures for Prior Notification
If such prior notification is filed, the proposed inward direct investment may not be consummated until after
30 days have passed from the date of filing, although this screening period may be shortened to two weeks unlesssuch Ministers deem it necessary to review the proposed inward direct investment. The Ministers may extend thescreening period up to five months if they deem it necessary to review the proposed inward direct investment andmay recommend any modification or abandonment of the proposed inward direct investment and, if the foreign
investor does not accept such recommendation, the Ministers may order the modification or abandonment of suchinward direct investment. In addition, if the Ministers consider the proposed inward direct investment to be an
inward direct investment that is likely to cause damage to the national security of Japan and, if a foreign investor(i) consummates such inward direct investment without filing the prior notification described above;(ii) consummates such inward direct investment before the expiration of the screening period described above;(iii) in connection with such inward direct investment, makes false statements in the prior notification describedabove; or (iv) does not follow the recommendation or order issued by the Ministers to modify or abandon suchinward direct investment, the Ministers may order such foreign investor to dispose of all or part of the sharesacquired or take other measures.
Post Facto Reporting Requirements
A foreign investor who consummates an inward direct investment as described above relating to a Japaneselisted company that is engaged in one or more Designated Businesses, but is not subject to the prior notification127

requirements described above due to the exemptions from such prior notification requirements, in general, mustfile a report of the relevant inward direct investment with the Minister of Finance and any other competent
Ministers having jurisdiction over such Japanese company within 45 days of such inward direct investment
when, as a result of such acquisition, the foreign investor (excluding, in the cases of (i) and (ii) below, a foreign
investor who falls under a category of certain foreign financial institutions (as prescribed in the Foreign
Exchange Regulations)) directly or indirectly holds (i) 1% or more but less than 3% of the total number of issued
shares or voting rights, for the first time, (ii) 3% or more but less than 10% of the total number of issued sharesor voting rights, for the first time, or (iii) 10% or more of the total number of issued shares or voting rights.
In addition, if a foreign investor consummates the inward direct investment described above through theacquisition (including investment discretionary management) of shares or voting rights or the authority to
exercise, directly or through instructions, voting rights of a Japanese listed company that is not engaged in the
Designated Businesses (which is not subject to the prior notification requirements described above) and, as aresult of such acquisition, such foreign investor holds 10% or more of shares or voting rights of the total number
of issued shares or voting rights of the relevant company, such foreign investor must file a report of the relevant
inward direct investment with the Minister of Finance and any other competent Ministers having jurisdiction
over such Japanese company within 45 days of such inward direct investment.
Additionally, if a foreign investor consummates the inward direct investment described above through avoting arrangement with respect to a Japanese listed company that is not engaged in the Designated Businesses(which is not subject to the prior notification requirements described above), such foreign investor must file areport of the relevant inward direct investment with the Minister of Finance and any other competent Ministers
having jurisdiction over such Japanese company within 45 days of such inward direct investment.
Acquisitions of shares by foreign investors by way of stock split are not subject to the foregoing notification
requirements.
Dividends and Proceeds of Sale
Under the Foreign Exchange Regulations, dividends paid on, and the proceeds of sales in Japan of, shares
held by non-residents of Japan may in general be converted into any foreign currency and repatriated abroad.
Under the terms of the deposit agreement pursuant to which Toyota’s ADSs are issued, the Depositary is
required, to the extent that in its judgment it can convert yen on a reasonable basis into dollars and transfer the
resulting dollars to the United States, to convert all cash dividends that it receives in respect of deposited shares
into dollars and to distribute the amount received (after deduction of applicable withholding taxes) to the holders
of ADSs.
10.E TAXATION
The following discussion is a general summary of the principal U.S. federal income and Japanese national
tax consequences of the acquisition, ownership and disposition of shares of common stock or ADSs. Thissummary does not purport to address all material tax consequences that may be relevant to holders of shares ofcommon stock or ADSs, and does not take into account the specific circumstances of any particular investors,some of which (such as tax-exempt entities, banks, insurance companies, broker-dealers, traders in securities thatelect to use a mark-to-market method of accounting for their securities holdings, regulated investmentcompanies, real estate investment trusts, partnerships and other pass-through entities, investors liable for the U.S.
alternative minimum tax, investors that own or are treated as owning 10% or more of Toyota’s stock (by vote orvalue), investors that hold shares of common stock or ADSs as part of a straddle, hedge, conversion transaction
or other integrated transaction and U.S. Holders (as defined below) whose functional currency is not the U.S.
dollar) may be subject to special tax rules. This summary is based on the tax laws and regulations of the UnitedStates and Japan, judicial decisions, published rulings and administrative pronouncements all as in effect on thedate hereof, as well as on the current income tax convention between the United States and Japan (the “Treaty”),128

as described below, all of which are subject to change (possibly with retroactive effect), and to differinginterpretations.
For purposes of this discussion, a “U.S. Holder” is any beneficial owner of shares of common stock or
ADSs that, for U.S. federal income tax purposes, is:1.

an individual who is a citizen or resident of the United States;2.

a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes)
organized in or under the laws of the United States, any state thereof, or the District of Columbia;

3.

an estate the income of which is subject to U.S. federal income tax without regard to its source; or

4.

a trust that is subject to the primary supervision of a U.S. court and the control of one or more
U.S. persons, or that has a valid election in effect under applicable Treasury regulations to betreated as a U.S. person.

An “Eligible U.S. Holder” is a U.S. Holder that:1.

is a resident of the United States for purposes of the Treaty;2.

does not maintain a permanent establishment in Japan (a) with which the shares of common stockor ADSs are effectively connected and through which the U.S. Holder carries on or has carried on
business, or (b) of which the shares of common stock or ADSs form part of the business property;
and3.

is eligible for benefits under the Treaty with respect to income and gain derived in connection
with the shares of common stock or ADSs.

This summary does not address any aspects of U.S. federal tax law other than income taxation and does notdiscuss any aspects of Japanese taxation other than income taxation, as limited to national taxes, inheritance andgift taxation. This summary also does not cover any state or local, or non-U.S., non-Japanese tax considerations.
Investors are urged to consult their tax advisors regarding the U.S. federal, state and local and Japanese and othertax consequences of acquiring, owning and disposing of shares of common stock or ADSs. In particular, where
relevant, investors are urged to confirm their status as Eligible U.S. Holders with their tax advisors and to discusswith their tax advisors any possible consequences of their failure to qualify as Eligible U.S. Holders. In addition,
this summary is based in part upon the representations of the Depositary and the assumption that each obligationin the deposit agreement, and in any related agreement, will be performed in accordance with its terms.
In general, for purposes of the Treaty and for U.S. federal income and Japanese income tax purposes,
owners of American Depositary Receipts evidencing ADSs will be treated as the owners of the shares ofcommon stock represented by those ADSs, and exchanges of shares of common stock for ADSs, and exchangesof ADSs for shares of common stock, will not be subject to U.S. federal income or Japanese income tax.
The discussion below is intended for general information only and does not constitute a complete analysisof all tax consequences relating to ownership of shares of common stock or ADSs. Prospective purchasers ofshares of common stock or ADSs should consult their own tax advisors concerning the tax consequences of
their particular situations.
Japanese Taxation
The following is a summary of the principal Japanese tax consequences (limited to national taxes) to
non-residents of Japan or non-Japanese corporations without permanent establishments in Japan (“non-resident
Holders”) who are holders of shares of common stock or of ADSs of Toyota. The following information
regarding taxation in Japan is based on the tax treaties and tax laws in force and their interpretation by Japan’s
129

tax authorities as of the date of this annual report. Tax laws and treaties and their interpretations may change(including with retroactive effect). Toyota will not revise this summary on the basis of any such change occurring
after the date of this annual report.
Generally, non-resident Holders are subject to Japanese withholding tax on dividends paid by Japanese
corporations. Stock splits are, in general, not taxable events.
In the absence of an applicable income tax treaty, convention or agreement reducing the maximum rate ofJapanese withholding tax or allowing an exemption from Japanese withholding tax, the rate of Japanese
withholding tax applicable to dividends paid by Japanese corporations to non-resident Holders is generally
20.42 percent, provided that, with respect to dividends paid on listed shares issued by a Japanese corporation(such as the shares of common stock or ADSs of Toyota) to non-resident Holders, other than any non-resident
Holder who is an individual holding three percent or more of the total issued shares of the relevant Japanese
corporation, the aforementioned 20.42 percent withholding tax rate is reduced to 15.315 percent for dividends
due and payable on or before December 31, 2037. These rates include a special additional withholding tax(2.1 percent of the original withholding tax amount) to secure funds for reconstruction from the Great East Japan
Earthquake.
At the date of this annual report, Japan has income tax treaties, conventions or agreements whereby theabove-mentioned withholding tax rate is reduced, in most cases to 15 percent, ten percent or five percent for
portfolio investors (15 percent under the income tax treaties in force with, among other countries, Canada,
Denmark, Finland, Germany, Iceland, Ireland, Italy, Luxembourg, New Zealand, Norway and Singapore, ten
percent under the income tax treaties with, among other countries, Australia, Austria, Belgium, France, Hong
Kong, the Netherlands, Portugal, Sweden, Switzerland, the U.K. and the United States, and five percent under theincome tax treaties with, among other countries, Spain).
Under the Treaty, the maximum rate of Japanese withholding tax which may be imposed on dividends paidby a Japanese corporation to an Eligible U.S. Holder that is a portfolio investor is generally reduced to ten
percent of the gross amount actually distributed, and dividends paid by a Japanese corporation to an Eligible U.S.
Holder that is a pension fund (as defined in the Treaty) are exempt from Japanese income tax by way of
withholding or otherwise, provided that such dividends are not derived from the carrying on of a business,directly or indirectly, by such pension fund.
If the maximum tax rate provided for in the income tax treaty applicable to dividends paid by Toyota to any
particular non-resident Holder is lower than the withholding tax rate otherwise applicable under Japanese tax law
or if any particular non-resident Holder is exempt from Japanese income tax with respect to such dividends under
the income tax treaty applicable to such particular non-resident Holder, such non-resident Holder who is entitledto a reduced rate of or exemption from Japanese withholding tax on the payment of dividends on shares ofcommon stock by Toyota is required to submit an Application Form for Income Tax Convention Regarding
Relief from Japanese Income Tax and Special Income Tax for Reconstruction on Dividends (together with anyother required forms and documents) in advance through the withholding agent to the relevant tax authority
before the payment of dividends. A standing proxy for non-resident Holders of a Japanese corporation may
provide this application service. In addition, a simplified special filing procedure is available for non-resident
Holders to claim treaty benefits of exemption from or reduction of Japanese withholding tax by submitting aSpecial Application Form for Income Tax Convention Regarding Relief from Japanese Income Tax and Special
Income Tax for Reconstruction on Dividends of Listed Stock (together with any other required forms anddocuments). With respect to ADSs, this reduced rate or exemption is applicable if the Depositary or its agent
submits, together with other documents, two Special Application Forms (one before payment of dividends, theother within eight months after the recording date concerning such payment of dividends) to the Japanese tax
authority. To claim this reduced rate or exemption, any relevant non-resident Holder of ADSs will be required tofile proof of taxpayer status, residence and beneficial ownership (as applicable) and to provide other informationor documents as may be required by the Depositary. A non-resident Holder who is entitled, under an applicable130

income tax treaty, to a reduced treaty rate lower than the withholding tax rate otherwise applicable underJapanese tax law or an exemption from the withholding tax, but fails to submit the required application inadvance, will be entitled to claim the refund of Japanese taxes withheld in excess of the rate under an applicabletax treaty (if such non-resident Holder is entitled to a reduced treaty rate under the applicable income tax treaty)or the entire amount of Japanese tax withheld (if such non-resident Holder is entitled to an exemption under theapplicable income tax treaty) by complying with a certain subsequent filing procedure. Toyota does not assume
any responsibility to ensure withholding at the reduced rate, or exemption therefrom, for non-resident Holders
who would be so eligible under an applicable tax treaty, but where the required procedures as stated above are
not followed.
Gains derived from the sale of shares of common stock or ADSs outside Japan by a non-resident Holder
holding such shares of common stock or ADSs as portfolio investors are, in general, not subject to Japaneseincome tax or corporation tax under Japanese law. In addition, Eligible U.S. Holders are exempt from Japaneseincome or corporation tax with respect to such gains under the Treaty so long as filings required under Japanese
law are made.
Japanese inheritance and gift taxes at progressive rates may be payable by an individual who has acquired
from another individual shares of common stock or ADSs as a legatee, heir or donee, even though neither theindividual, nor the deceased, nor donor is a Japanese resident.
Holders of shares of common stock or ADSs should consult their tax advisors regarding the effect of thesetaxes and, in the case of U.S. Holders, the possible application of the Estate and Gift Tax Treaty between the
United States and Japan.
U.S. Federal Income Taxation
U.S. Holders
The following discussion is a summary of the principal U.S. federal income tax consequences to U.S.
Holders that hold shares of common stock or ADSs as capital assets (generally, for investment purposes).
Taxation of Dividends
Subject to the passive foreign investment company (“PFIC”) rules discussed below, the gross amount of any
distribution made by Toyota in respect of shares of common stock or ADSs (without reduction for Japanese
withholding taxes) will constitute a taxable dividend to the extent paid out of current or accumulated earnings
and profits, as determined under U.S. federal income tax principles. The U.S. dollar amount of such a dividend
generally will be included in the gross income of a U.S. Holder, as ordinary income, when actually or
constructively received by the U.S. Holder, in the case of shares of common stock, or by the Depositary, in thecase of ADSs. Dividends paid by Toyota will not be eligible for the dividends-received deduction generally
allowed to U.S. corporations in respect of dividends received from other U.S. corporations.
Dividends received on shares and ADSs of certain foreign corporations by non-corporate U.S. investors may
be subject to U.S. federal income tax at lower rates than other types of ordinary income if certain conditions are
met. Dividends received by non-corporate U.S. Holders with respect to shares of common stock or ADSs ofToyota are expected to be eligible for these reduced rates of tax. U.S. Holders should consult their own tax
advisors regarding the eligibility of such dividends for a reduced rate of tax.
The U.S. dollar amount of a dividend paid in Japanese yen will be determined based on the Japanese yen/
U.S. dollar exchange rate in effect on the date that the dividend is included in the gross income of the U.S.
Holder, regardless of whether the payment is converted into U.S. dollars on that date. Generally, any gain or loss
resulting from currency exchange fluctuations during the period from the date the dividend payment is included131in the gross income of a U.S. Holder through the date that payment is converted into U.S. dollars (or otherwise
disposed of) will be treated as U.S.-source ordinary income or loss. U.S. Holders should consult their own tax
advisors regarding the calculation and U.S. federal income tax treatment of foreign currency gain or loss.
To the extent, if any, that the amount of any distribution received by a U.S. Holder in respect of shares ofcommon stock or ADSs exceeds Toyota’s current and accumulated earnings and profits, as determined under
U.S. federal income tax principles, the distribution first will be treated as a tax-free return of capital to the extent
of the U.S. Holder’s adjusted tax basis in those shares or ADSs, and thereafter will be treated as U.S.-source
capital gain.
Distributions of additional shares of common stock that are made to U.S. Holders with respect to theirshares of common stock or ADSs, and that are part of a pro rata distribution to all of Toyota’s shareholders,
generally will not be subject to U.S. federal income tax.
For U.S. foreign tax credit purposes, dividends included in gross income by a U.S. Holder in respect ofshares of common stock or ADSs will constitute income from sources outside the United States, and will
generally be “passive category income” or, in the case of certain U.S. Holders, “general category income.” Any
Japanese withholding tax imposed in respect of a Toyota dividend may be claimed as a credit against the U.S.
federal income tax liability of a U.S. Holder, subject to a number of complex limitations and conditions,
including those introduced by recently issued U.S. Treasury regulations that apply to foreign income taxes paidor accrued in taxable years beginning on or after December 28, 2021. A U.S. Holder’s use of a foreign tax credit
with respect to any such Japanese income or withholding taxes would generally not be allowed unless such U.S.
Holder elects benefits under an applicable income tax treaty with respect to such tax. A U.S. Holder who does
not elect to claim a credit for any creditable foreign income taxes paid during the taxable year may instead claim
a deduction in the computation of such U.S. Holder’s taxable income. Special rules generally will apply to thecalculation of foreign tax credits in respect of dividend income that qualifies for preferential U.S. federal income
tax rates. Additionally, special rules apply to individuals whose foreign source income during the taxable year
consists entirely of “qualified passive income” and whose creditable foreign taxes paid or accrued during thetaxable year do not exceed $300 ($600 in the case of a joint return). Further, under some circumstances, a U.S.
Holder that:(i) has held shares of common stock or ADSs for less than a specified minimum period; or(ii) is obligated to make payments related to Toyota dividends,
will not be allowed a foreign tax credit for Japanese taxes imposed on Toyota dividends.
U.S. Holders are urged to consult their tax advisors regarding the availability of the foreign tax credit under
their particular circumstances.
Taxation of Capital Gains and Losses
In general, upon a sale or other taxable disposition of shares of common stock or ADSs, a U.S. Holder willrecognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference between theamount realized on the sale or other taxable disposition and the U.S. Holder’s adjusted tax basis in those sharesof common stock or ADSs. A U.S. Holder generally will have an adjusted tax basis in a share of common stockor an ADS equal to its U.S. dollar cost. Subject to the PFIC rules discussed below, gain or loss recognized on thesale or other taxable disposition of shares of common stock or ADSs generally will be capital gain or loss and, if
the U.S. Holder’s holding period for those shares or ADSs exceeds one year, will be long-term capital gain or
loss. Non-corporate U.S. Holders, including individuals, currently are eligible for preferential rates of U.S.
federal income tax in respect of long-term capital gains. Under U.S. federal income tax law, the deduction ofcapital losses is subject to limitations. Any gain or loss recognized by a U.S. Holder in respect of the sale or otherdisposition of shares of common stock or ADSs generally will be treated as U.S.-source income or loss for U.S.
foreign tax credit purposes.
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Deposits and withdrawals of common stock in exchange for ADSs will not result in the realization of gainor loss for U.S. federal income tax purposes.
Passive Foreign Investment Companies
A non-U.S. corporation generally will be classified as a PFIC for U.S. federal income tax purposes in any
taxable year in which, after applying look-through rules, either (1) at least 75% of its gross income is passive
income or (2) on average at least 50% of the gross value of its assets is attributable to assets that produce passive
income or are held for the production of passive income. Passive income for this purpose generally includes
dividends, interest, royalties, rents and gains from commodities and securities transactions. The PFIC
determination is made annually and generally is based on the value of a non-U.S. corporation’s assets (including
goodwill) and composition of its income.
Toyota does not believe that it was a PFIC for U.S. federal income tax purposes for its taxable year ended
March 31, 2023, and currently intends to continue its operations in such a manner that it will not become a PFICin the future. Because the PFIC determination is made annually and the application of the PFIC rules to a
corporation such as Toyota (which among other things is engaged in leasing and financing through several
subsidiaries) is not entirely clear, no assurances can be made regarding determination of its PFIC status in thecurrent or any future taxable year. If Toyota is determined to be a PFIC, U.S. Holders could be subject toadditional U.S. federal income taxes on gain recognized with respect to the shares of common stock or ADSs andon certain distributions. In addition, an interest charge may apply to the portion of the U.S. federal income tax
liability on such gains or distributions treated under the PFIC rules as having been deferred by the U.S. Holder.
Moreover, dividends that a non-corporate U.S. Holder receives from Toyota will not be eligible for the reduced
U.S. federal income tax rates on dividends described above if Toyota is a PFIC either in the taxable year of thedividend or the preceding taxable year. If a U.S. Holder owns shares of common stock or ADSs in any taxable
year in which Toyota is a PFIC, such U.S. Holder generally would be required to file Internal Revenue Service(“IRS”) Form 8621 (or other form specified by the U.S. Department of the Treasury) on an annual basis, subject
to certain exceptions based on the value of PFIC stock held. Toyota will inform U.S. Holders if it believes that it
will be classified as a PFIC in any taxable year.
Prospective investors should consult their own tax advisors regarding the potential application of the PFIC
rules to shares of common stock or ADSs.
Non-U.S. Holders
The following discussion is a summary of the principal U.S. federal income tax consequences to beneficial
owners of shares of common stock or ADSs that are neither U.S. Holders, nor partnerships, nor entities taxable aspartnerships for U.S. federal income tax purposes (“Non-U.S. Holders”).
A Non-U.S. Holder generally will not be subject to any U.S. federal income or withholding tax on
distributions received in respect of shares of common stock or ADSs unless the distributions are effectively
connected with the conduct by the Non-U.S. Holder of a trade or business within the United States (and, if anapplicable tax treaty requires, are attributable to a U.S. permanent establishment or fixed base of such Non-U.S.
Holder).
A Non-U.S. Holder generally will not be subject to U.S. federal income tax in respect of gain recognized ona sale or other disposition of shares of common stock or ADSs, unless:(i)the gain is effectively connected with a trade or business conducted by the Non-U.S. Holder
within the United States (and, if an applicable tax treaty requires, is attributable to a U.S.
permanent establishment or fixed base of such Non-U.S. Holder); or(ii) the Non-U.S. Holder is an individual who was present in the United States for 183 or more days inthe taxable year of the disposition and other conditions are met.
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Income that is effectively connected with a U.S. trade or business of a Non-U.S. Holder, and, if an income
tax treaty applies and so requires, is attributable to a U.S. permanent establishment or fixed base of the Non-U.S.
Holder, generally will be taxed in the same manner as the income of a U.S. Holder. In addition, under certain
circumstances, any effectively connected earnings and profits realized by a corporate Non-U.S. Holder may besubject to an additional “branch profits tax” at the rate of 30% or at a lower rate that may be prescribed by anapplicable income tax treaty.
Backup Withholding and Information Reporting
In general, information reporting requirements will apply to dividends paid to a U.S. Holder in respect ofshares of common stock or ADSs, and to the proceeds received upon the sale, exchange or redemption of theshares of common stock or ADSs within the United States by U.S. Holders. Furthermore, backup withholding
may apply to those amounts (currently at a 24% rate) if a U.S. Holder fails to provide an accurate taxpayer
identification number to certify that such U.S. Holder is not subject to backup withholding or to otherwise
comply with the applicable requirements of the backup withholding requirements.
Dividends paid to a Non-U.S. Holder in respect of shares of common stock or ADSs, and proceeds received
upon the sale, exchange or redemption of shares of common stock or ADSs by a Non-U.S. Holder, generally are
exempt from information reporting and backup withholding under current U.S. federal income tax law. However,a Non-U.S. Holder may be required to provide certification of non-U.S. status in order to obtain that exemption.
Persons required to establish their exempt status generally must provide such certification under penalty of
perjury on IRS Form W-9, entitled Request for Taxpayer Identification Number and Certification, in the case of
U.S. persons, and on IRS Form W-8BEN, entitled Certificate of Foreign Status of Beneficial Owner for UnitedStates Tax Withholding and Reporting (Individuals), or IRS Form W-8BEN-E, entitled Certificate of Status ofBeneficial Owner for United States Tax Withholding and Reporting (Entities) (or other appropriate IRS Form
W-8), in the case of non-U.S. persons. Backup withholding is not an additional tax. The amount of backup
withholding imposed on a payment generally may be claimed as a credit against the holder’s U.S. federal income
tax liability, provided that the required information is properly furnished to the IRS in a timely manner.
In addition, certain U.S. Holders who are individuals that hold certain foreign financial assets (which may
include shares of common stock or ADSs) are required to report information relating to such assets, subject tocertain exceptions. U.S. Holders should consult their tax advisors regarding the effect, if any, of this legislationon their ownership and disposition of shares of common stock or ADSs.
THE SUMMARY OF U.S. FEDERAL INCOME AND JAPANESE NATIONAL TAX CONSEQUENCESSET OUT ABOVE IS INTENDED FOR GENERAL INFORMATION PURPOSES ONLY. PROSPECTIVE
PURCHASERS OF COMMON STOCK OR ADSs ARE URGED TO CONSULT WITH THEIR OWN TAXADVISORS WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF OWNING ORDISPOSING OF COMMON STOCK OR ADSs, BASED ON THEIR PARTICULAR CIRCUMSTANCES.
10.F DIVIDENDS AND PAYING AGENTS
Not applicable.
10.G STATEMENT BY EXPERTS
Not applicable.
10.H DOCUMENTS ON DISPLAY
Toyota files annual reports on Form 20-F and reports on Form 6-K with the SEC. You may access thisinformation through the SEC’s website (https://www.sec.gov). In addition, Toyota’s reports, proxy statements
134

and other information may be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005. Copies of the documents referred to herein may also be inspected at Toyota’s offices bycontacting Toyota at 1 Toyota-cho, Toyota City, Aichi Prefecture 471-8571, Japan, attention: Capital Strategy &Affiliated Companies, Finance Division, telephone number: +81-565-28-2121.
10.I SUBSIDIARY INFORMATION
Not applicable.
10.J ANNUAL REPORT TO SECURITY HOLDERS
Not applicable.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Quantitative and Qualitative Disclosures about Market Risk
Toyota is exposed to market risk from changes in foreign currency exchange rates, interest rates, certain
commodity and equity security prices. In order to manage the risk arising from changes in foreign currency
exchange rates and interest rates, Toyota enters into a variety of derivative financial instruments.
A description of Toyota’s accounting policies for derivative instruments is included in note 3 to theconsolidated financial statements and further disclosure is provided in notes 20 and 21 to the consolidated
financial statements.
Toyota monitors and manages these financial exposures as an integral part of its overall risk management
program, which recognizes the unpredictability of financial markets, and seeks to reduce the potentially adverse
effects on Toyota’s operating results.
Market risk analyses of risks such as foreign exchange risk, interest rate risk, commodity price fluctuation
risk and stock price fluctuation risk are provided in note 19 to the consolidated financial statements.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
12.A DEBT SECURITIES
Not applicable.
12.B WARRANTS AND RIGHTS
Not applicable.
12.C OTHER SECURITIES
Not applicable.
12.D AMERICAN DEPOSITARY SHARESFees and Charges for Holders of American Depositary Shares
The Bank of New York Mellon, as Depositary for the ADSs, collects its fees for delivery and surrender of
ADSs directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or fromintermediaries acting for them. The Depositary collects fees for making distributions to investors by deducting
those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The
Depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.
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Persons depositing or withdrawing shares must pay:For:

$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)•

Delivery of ADSs, including those resulting froma distribution, sale or exercise of shares or rights
or other property•

Surrender of ADSs for the purpose of withdrawal
including if the deposit agreement terminates$0.05 (or less) per ADS•

Any cash distribution to ADS registered holders

A fee equivalent to the fee that would be payable if
securities distributed to you had been shares and theshares had been deposited for delivery of ADSs•

Distribution of securities or rights distributed toholders of deposited securities that are distributedby the Depositary to ADS registered holders$0.05 (or less) per ADS per year•

General depositary services

Registration fees•

Registration of transfer of shares on Toyota’sshare register to or from the name of the
Depositary or its nominee or the custodian or its
nominee when shares are deposited or withdrawn

Fees and expenses of the Depositary•

Cable (including SWIFT) and facsimiletransmissions (when expressly provided in thedeposit agreement)•

Converting foreign currency to U.S. dollars

Taxes and other governmental charges the Depositaryor the custodian have to pay on any ADS or share
underlying an ADS•

As necessary

Any other charges payable by the Depositary, thecustodian or their respective agents in connection withthe servicing of the deposited securities•

As necessary

Fees Incurred in Fiscal 2023
For fiscal 2023, the Depositary paid to Toyota, or paid to a third party at Toyota’s instruction, an aggregate
of $890,021.33 for standard out-of-pocket maintenance costs for the ADSs (consisting of the expenses of postageand envelopes for mailing annual reports, printing and distributing dividend checks, stationery, postage,facsimile, and telephone calls), Toyota’s continuing annual stock exchange listing fees with respect to the ADSs,
expenses relating to Toyota’s annual general shareholders’ meeting that are incurred with respect to Toyota’s
ADS holders and 50% of the net dividend fees collected by the Depositary.
Fees to be Paid in the FutureWith regards to the ADS program, the Depositary has agreed to pay the standard out-of-pocket maintenancecosts for the ADSs, which includes the expenses of postage and envelopes for mailing annual reports, printing
and distributing dividend checks, stationery, postage, facsimile and telephone calls. It has also agreed to pay forinvestor relations expenses, the continuing annual stock exchange listing fees with respect to the ADSs, and anyother program related expenses. The limit on the amount of expenses for which the Depositary will pay is thesum of $300,000 annually. In addition, the Depositary has agreed to pay Toyota 50% of the net dividend feescollected by the Depositary during each annual period towards the aforementioned expenses.

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PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIESNone.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDSNone.
ITEM 15. CONTROLS AND PROCEDURES(a) DISCLOSURE CONTROLS AND PROCEDURES
Toyota performed an evaluation of the effectiveness of the design and operation of its disclosure controls
and procedures as of the end of fiscal 2023. Disclosure controls and procedures are designed to ensure that
information required to be disclosed in the Form 20-F that Toyota files under the Exchange Act is accumulated
and communicated to its management, including the chief executive officer and the principal accounting andfinancial officer, to allow timely decisions regarding required disclosure. The disclosure controls and procedures
also ensure that the Form 20-F that it files under the Exchange Act is recorded, processed, summarized andreported within the time periods specified in the Commission’s rules and forms. The evaluation was performed
under the supervision of Toyota’s President and Representative Director, who concurrently serves as CEO, andthe member of the board of directors who concurrently serves as CFO. Toyota’s disclosure controls andprocedures are designed to provide reasonable assurance of achieving its objectives. Managerial judgment wasnecessary to evaluate the cost-benefit relationship of possible controls and procedures. The President andRepresentative Director as well as the member of the board of directors have concluded that Toyota’s disclosure
controls and procedures are effective at the reasonable assurance level.
(b) MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIALREPORTING
Toyota’s management is responsible for establishing and maintaining effective internal control overfinancial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with IFRS. Toyota’s internal control over financial reporting includes those policies and procedures
that:
(i)

pertain to the maintenance of records that in reasonable detail, accurately and fairly reflect thetransactions and dispositions of Toyota’s assets;(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with IFRS, and that Toyota’s receipts and expenditures are being
made only in accordance with authorizations of Toyota’s management and members of the board of
directors; and(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use,
or disposition of Toyota’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with thepolicies or procedures may deteriorate.
137

Toyota’s management conducted an evaluation of the effectiveness of internal control over financial
reporting based on the framework in “Internal Control — Integrated Framework (2013)” issued by theCommittee of Sponsoring Organizations of the Treadway Commission.
Based on this evaluation, management concluded that Toyota’s internal control over financial reporting was
effective as of March 31, 2023.
PricewaterhouseCoopers Aarata LLC, an independent registered public accounting firm that audited theconsolidated financial statements included in this report, has also audited the effectiveness of Toyota’s internal
control over financial reporting as of March 31, 2023, as stated in its report included herein.
(c) ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM
Toyota’s independent registered public accounting firm, PricewaterhouseCoopers Aarata LLC, has issued an
audit report on the effectiveness of Toyota’s internal control over financial reporting. This report appears in Item
18.
(d) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have been no changes in Toyota’s internal control over financial reporting during fiscal 2023 thathave materially affected, or are reasonably likely to materially affect, Toyota’s internal control over financial
reporting.
ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Toyota maintains an audit & supervisory board system, in accordance with the Companies Act. Toyota’s
audit & supervisory board is comprised of six audit & supervisory board members, three of whom are outside
audit & supervisory board members. Each audit & supervisory board member has been appointed at Toyota’s
meetings of shareholders and has certain statutory powers independently, including auditing the business affairs
and accounts of Toyota.
Toyota’s audit & supervisory board has determined that it does not have an “audit committee financial
expert” serving on the audit & supervisory board. The qualifications for, and powers of, the audit & supervisoryboard member delineated in the Companies Act are different from those anticipated for any audit committee
financial expert. Audit & supervisory board members have the authority to be given reports from a certified
public accountant or an accounting firm concerning audits, including technical accounting matters. At the sametime, each audit & supervisory board member has the authority to consult internal and external experts on
accounting matters. Each audit & supervisory board member must fulfill the requirements under Japanese laws
and regulations and otherwise follow Japanese corporate governance practices and, accordingly, Toyota’s
audit & supervisory board has confirmed that it is not necessarily in Toyota’s best interest to nominate as audit &supervisory board member a person who meets the definition of audit committee financial expert. Although
Toyota does not have an audit committee financial expert on its audit & supervisory board, Toyota believes that
Toyota’s current corporate governance system, taken as a whole, including the audit & supervisory board
members’ ability to consult internal and external experts, is fully equivalent to a system having an audit
committee financial expert on its audit & supervisory board.
ITEM 16B. CODE OF ETHICS
Toyota has adopted a code of ethics that applies to its members of the board of directors and operating
officers, including its principal executive officer, principal financial officer, principal accounting officer orcontroller, or persons performing similar functions. A copy of Toyota’s code of ethics is included as an exhibit tothis annual report on Form 20-F.
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ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
PricewaterhouseCoopers Aarata LLC has audited the financial statements of Toyota included in this annual
report on Form 20-F.
The following table presents the aggregate fees for professional services and other services rendered byPricewaterhouseCoopers Aarata LLC and the various network and member firms of PricewaterhouseCoopers to
Toyota in fiscal 2022 and fiscal 2023.
Yen in millions
2022
2023
Audit Fees(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit-related Fees(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax Fees(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other Fees(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,460
52
351
181

6,617
83
375
177

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,045

7,251

(1) Audit Fees consist of fees billed for the annual audit services engagement and other audit services, which
are those services that only the external auditor reasonably can provide, and include the services of annual
audit, quarterly reviews and assessment and reviews of the effectiveness of internal controls over financial
reporting of Toyota and its subsidiaries and affiliated companies; the services associated with SEC
registration statements or other documents issued in connection with securities offerings such as comfort
letters and consents; and consultations as to the accounting or disclosure treatment of transactions or events.
(2) Audit-related Fees consist of fees billed for assurance and related services that are reasonably related to theperformance of the audit or review of its financial statements or that are traditionally performed by theexternal auditor, and mainly include services such as agreed-upon or expanded audit procedures; andfinancial statement audits of employee benefit plans.
(3) Tax Fees include fees billed for tax compliance services, including services such as tax planning, advice andcompliance of federal, state, local and international tax; the review of tax returns; assistance with tax audits
and appeals; tax-only valuation services including transfer pricing; expatriate tax assistance and compliance.
(4) All Other Fees primarily include fees billed for risk management advisory services; services providing
information related to automotive market conditions; and other advisory services.
Policies and Procedures of the Audit & Supervisory Board
Below is a summary of the current policies and procedures of the audit & supervisory board for the
pre-approval of audit and permissible non-audit services performed by Toyota’s independent public accountants.
Under the policy, specified operating officers or managers submit a request for general pre-approval of audit
and permissible non-audit services for the following fiscal year, which shall include details of the specificservices and estimated fees for the services, to the audit & supervisory board, which reviews and determines
whether or not to grant the request in advance. Upon the general pre-approval of the audit & supervisory board,
the specified operating officers or managers are not required to obtain any specific pre-approval for audit andpermissible non-audit services so long as those services fall within the scope of the general pre-approval
provided.
The audit & supervisory board makes a further determination of whether or not to grant a request to revise
the general pre-approval for the applicable fiscal year if such request is submitted by specified operating officers
or managers. Such request may include (i) adding any audit or permissible non-audit services other than the ones
listed in the general pre-approval and (ii) obtaining services that are listed in the general pre-approval but of139

which the total fee amount exceeds the amount affirmed by the general pre-approval. The determination ofwhether or not to grant a request to revise the general pre-approval noted in the foregoing may alternatively bemade by an audit & supervisory board member (full time), who is designated in advance by a resolution of theaudit & supervisory board, in which case such audit & supervisory board member (full time) shall report suchdecision at the next meeting of the audit & supervisory board. The performance of audit and permissible
non-audit services and the payment of fees are subject to review by the audit & supervisory board at least once
every fiscal half year.
None of the audit related fees, tax fees or all other fees described in the table above were approved by theaudit & supervisory board pursuant to the de minimis exception provided by paragraph(c)(7)(i)(C) of Rule 2-01
of Regulation S-X.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Toyota does not have an audit committee. Toyota is relying on the general exemption contained in Rule
10A-3(c)(3) under the Exchange Act, which provides an exemption from the NYSE’s listing standards relating toaudit committees for foreign companies like Toyota that have an audit & supervisory board. Toyota’s reliance on
Rule 10A-3(c)(3) does not, in its opinion, materially adversely affect the ability of its audit & supervisory board
to act independently and to satisfy the other requirements of Rule 10A-3.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
PURCHASERS
The following table sets forth purchases of Toyota’s common stock by Toyota and its affiliated purchasers
during fiscal 2023:

Period(a) Total
Number of
SharesPurchased(1)(b) Average
Price Paid per
Share (Yen)(1)

(c)
Total
Number of
SharesPurchased as
Part of
Publicly
Announced
Plans or
Programs(2)(d)
Maximum
Number of
Sharesthat May
Yet BePurchased
Under thePlans or
Programs(2)April 1, 2022 – April 30, 2022 . . . . . . . . . . . . . . . . . . . . . .
May 1, 2022 – May 31, 2022 . . . . . . . . . . . . . . . . . . . . . . .
June 1, 2022 – June 30, 2022 . . . . . . . . . . . . . . . . . . . . . . .
July 1, 2022 – July 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . .
August 1, 2022 – August 31, 2022 . . . . . . . . . . . . . . . . . . .
September 1, 2022 – September 30, 2022 . . . . . . . . . . . . . .
October 1, 2022 – October 31, 2022 . . . . . . . . . . . . . . . . . .
November 1, 2022 – November 30, 2022 . . . . . . . . . . . . . .
December 1, 2022 – December 31, 2022 . . . . . . . . . . . . . .
January 1, 2023 – January 31, 2023 . . . . . . . . . . . . . . . . . .
February 1, 2023 – February 28, 2023 . . . . . . . . . . . . . . . .
March 1, 2023 – March 31, 2023 . . . . . . . . . . . . . . . . . . . .

37,148,615
6,967,285
12,251,130
34,807,025
1,074
72,15143,144,565
7,415,950
20,987,270
18,869,135
16,258,940
15,631,375

2,153
2,215
2,115
2,129
2,138
1,993
1,983
1,996
1,939
1,840
1,887
1,862

37,148,100
6,966,800
12,250,400
34,805,800
071,20043,143,200
7,415,100
20,986,200
18,868,300
16,258,200
15,630,600

—
—
—
—
—
—
—
—
—
—
—
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213,554,515—

213,543,900—(1) A portion of the above purchases were made as a result of holders of shares constituting less than one unit,
which is 100 shares of common stock, requesting Toyota to purchase shares that are a fraction of a unit, in
accordance with Toyota’s share handling regulations. Toyota is required to comply with such requests
pursuant to the Companies Act. See “Item 10. Additional Information — 10.B Memorandum and Articles of140

Association — Japanese Unit Share System.” The number of shares purchased not pursuant to publicly
announced plans or programs conducted in fiscal 2023 is 10,615.
(2) Toyota announced on May 11, 2022 that it would repurchase up to 140 million shares of its common stock
between June 17, 2022 to September 30, 2022 at a total maximum purchase price of 200 billion yen, inorder to return to shareholders the profits derived in fiscal 2022. Toyota also announced on September 21,
2022 that it would extend the term of such repurchase of its common stock from September 30, 2022 toNovember 1, 2022. Toyota further announced on November 1, 2022 that it would repurchase up to
110 million shares of its common stock between November 2, 2022 to May 12, 2023 at a total maximum
purchase price of 150 billion yen in order to return to shareholders the profits derived in the first half offiscal 2023.
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 16G. CORPORATE GOVERNANCE
Significant Differences in Corporate Governance Practices between Toyota and U.S. Companies Listed on
the NYSE
Pursuant to home country practices exemptions granted by the NYSE, Toyota is permitted to follow certain
corporate governance practices complying with Japanese laws, regulations and stock exchange rules in lieu of the
NYSE’s listing standards. The SEC approved changes to the NYSE’s listing standards related to corporate
governance practices of listed companies (the “NYSE Corporate Governance Rules”) in November 2003, as
further amended in November 2004. Toyota is exempt from the approved changes, except for requirements that(a) Toyota’s audit & supervisory board satisfies the requirements of Rule 10A-3 under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), (b) Toyota must disclose significant differences in its corporate
governance practices as compared to those followed by domestic companies under the NYSE listing standards,(c) Toyota’s principal executive officer must notify the NYSE in writing after any executive officer of Toyota
becomes aware of any non-compliance with (a) and (b), and (d) Toyota must submit annual and interim written
affirmations to the NYSE. Toyota’s corporate governance practices and those followed by domestic companies
under the NYSE Corporate Governance Rules have the following significant differences:
1. Members of the Board of Directors. Toyota currently does not have any members of the board of
directors who will be deemed an “independent director” as required under the NYSE Corporate Governance
Rules for U.S. listed companies. Unlike the NYSE Corporate Governance Rules, the Companies Act does not
require Japanese companies with an audit & supervisory board such as Toyota to have any independent directors
on its board of directors. While the NYSE Corporate Governance Rules require that the non-management
directors of each listed company meet at regularly scheduled executive sessions without management, Toyota
currently has no non-management member on its board of directors. Unlike the NYSE Corporate Governance
Rules, the Companies Act does not require, and accordingly Toyota does not have, an internal corporate organ orcommittee comprised solely of independent directors.
The Companies Act requires Toyota to have outside members of the board of directors under the Companies
Act. Toyota currently has four outside members of the board of directors. An “outside” member of the board of
directors refers to:(a) a person who is not, and has never been during the ten year period before becoming an outside memberof the board of directors, an executive director (a member of the board of directors who engages in theexecution of business), executive officer, manager or employee (collectively, “Executive Director,
etc.”) of Toyota or its subsidiaries;(b) if a person was a member of the board of directors, accounting counselor (in the case that an
accounting counselor is a legal entity, an employee of such entity who is in charge of its affairs) or141

audit & supervisory board member (excluding those who have ever been Executive Directors, etc.) of
Toyota or any of its subsidiaries at any time during the ten year period before becoming an outside
member of the board of directors, such person who has not been an Executive Director, etc. of Toyota
or any of its subsidiaries during the ten year period before becoming a member of the board of
directors, accounting counselor or audit & supervisory board member; and(c) a person who is not a spouse or relative within the second degree of kinship of any member of theboard of directors or manager or other key employee of Toyota.
Such qualifications for an “outside” member of the board of directors are different from the director
independence requirements under the NYSE Corporate Governance Rules.
In addition, pursuant to the regulations of the Japanese stock exchanges, Toyota is required to have one ormore “independent director(s)/audit & supervisory board member(s),” defined under the relevant regulations of
the Japanese stock exchanges as “outside directors” or “outside audit & supervisory board members” (as defined
under the Companies Act), who are unlikely to have any conflicts of interests with Toyota’s generalshareholders, and is also required to make efforts to have at least one “independent director(s)/audit &supervisory board member(s)” who is also a director. Each of the outside members of the board of directors of
Toyota satisfies the “independent director/audit & supervisory board member” requirements under the
regulations of the Japanese stock exchanges. The Japanese Corporate Governance Code provides that certain
listed companies, including Toyota, should appoint at least one third of their directors as “independent outside
directors” as defined based on the criteria for assessing director independence established by Toyota in line with
the independence standards of the Japanese stock exchanges. The content of the criteria for assessing director
independence established by Toyota is the same as that of the independence standards of the Japanese stock
exchanges, and each of the outside members of the board of directors of Toyota satisfies the “independent
outside director” requirements under such independence standards. The definition of “independent director/
audit & supervisory board member” and “independent outside director” is different from that of the definition of
independent director under the NYSE Corporate Governance Rules.
2. Committees. Under the Companies Act, Toyota has elected to structure its corporate governance system
as a company with audit & supervisory board members who are under a statutory duty to monitor, review andreport on the management of the affairs of Toyota. Toyota, as with other Japanese companies with an audit &supervisory board, does not have certain committees that are required of U.S. listed companies subject to the
NYSE Corporate Governance Rules, including those that are responsible for director nomination, corporate
governance and executive compensation. However, members of Toyota’s Executive Appointment Meeting, amajority of whom are outside directors, discuss recommendations to the board of directors concerning theappointment and dismissal of members of the board of directors and the Executive Appointment Meeting discuss
the details of the proposals to audit & supervisory board. Members of the Executive Compensation Meeting, amajority of whom are outside directors, review the remuneration system for members of board of directors andsenior management as well as determine the amount of remuneration for each member of the board of directors.
The Japanese Corporate Governance Code provides that certain listed companies, including Toyota, generally
should have the majority of the members of each of certain committees be independent directors, and thosecommittees of Toyota satisfy that principle.
Pursuant to the Companies Act, Toyota’s board of directors nominates and submits a proposal for theappointment of members of the board of directors for shareholder approval. The shareholders vote on suchnomination at the general shareholders’ meeting. The Companies Act requires that the limits or calculation
formula of the remuneration, bonus and any other benefits in compensation for the execution of duties(“remuneration, etc.”) of directors, the kind of remuneration, etc. (in case that the remuneration, etc. are otherthan cash (excluding shares and stock acquisition rights)) to be received by directors, and the limits ofremuneration, etc. that are shares and stock acquisition rights to be granted to directors as well as the limits ofremuneration, etc. to be paid to audit & supervisory board members must be determined by a resolution of the142general shareholders’ meeting, unless their remuneration, etc. is provided for in the articles of incorporation. The
distribution of remuneration, etc., among each member of the board of directors is broadly delegated to the boardof directors and the distribution of remuneration among each audit & supervisory board member is determined byconsultation among the audit & supervisory board members.
3. Audit Committee. Toyota avails itself of paragraph (c)(3) of Rule 10A-3 of the Exchange Act, which
provides a general exemption from the audit committee requirements to a foreign private issuer with an audit &supervisory board, subject to certain requirements which continue to be applicable under Rule 10A-3.
Pursuant to the requirements of the Companies Act, Toyota elects its audit & supervisory board members
through a resolution adopted at a general shareholders’ meeting. Toyota currently has six audit & supervisoryboard members, which exceeds the minimum number of audit & supervisory board members required pursuant to
the Companies Act.
Unlike the NYSE Corporate Governance Rules, the Companies Act, among others, does not require audit &supervisory board members to establish an expertise in accounting or financial management nor are they required
to present other special knowledge and experience. Therefore, none of Toyota’s audit & supervisory board
members has “an expertise in accounting or financial management” as set forth in the NYSE Corporate
Governance Rules. The Japanese Corporate Governance Code indicates that persons with appropriate experienceand skills as well as necessary knowledge of finance, accounting, and laws should be appointed as audit &supervisory board members, and in particular, one or more audit & supervisory board members who havesufficient knowledge of finance and accounting matters should be appointed. Toyota has appointed persons who
are able to provide opinions and advice regarding management based on their broader experience and discretion
beyond finance and accounting. Under the Companies Act, the audit & supervisory board may determine theauditing policies and methods of investigating the conditions of Toyota’s business and assets, and may resolve
other matters concerning the execution of the audit & supervisory board member’s duties. The audit &supervisory board also prepares auditors’ reports and gives consent to proposals of the nomination of audit &supervisory board members. Further, the audit & supervisory board makes decisions concerning proposals
relating to the appointment and dismissal of accounting auditors; it also has the authority to dismiss theaccounting auditor when certain matters specified under the Companies Act occur.
Toyota currently has three outside audit & supervisory board members under the Companies Act. Under theCompanies Act, at least half of the audit & supervisory board members must be an “outside” audit & supervisoryboard member, which is any person who satisfies all of the following requirements:(a) the person has never been a member of the board of directors, accounting counselor (in the case that an
accounting counselor is a legal entity, an employee of such entity who is in charge of its affairs),
executive officer, manager or employee of Toyota or its subsidiaries during the ten year period before
becoming an outside audit & supervisory board member;(b) if the person was an audit & supervisory board member of Toyota or any of its subsidiaries at any time
during the ten year period before becoming an outside audit & supervisory board member, such person
has not been a member of the board of directors, accounting counselor (in the case that an accounting
counselor is a legal entity, an employee of such entity who is in charge of its affairs), executive officer,
manager or employee of Toyota or any of its subsidiaries during the ten year period before becoming
an audit & supervisory board member of Toyota or any of its subsidiaries; and(c) the person is not a spouse or relative within the second degree of kinship of any member of the boardof directors or manager or other key employee of Toyota.
Such qualifications for an “outside” audit & supervisory board member are different from the audit
committee independence requirement under the NYSE Corporate Governance Rules.
143

Each of the outside audit & supervisory board members of Toyota satisfies the “independent director/
audit & supervisory board member” requirements under the regulations of the Japanese stock exchanges, as
described above in “1. Members of the Board of Directors.”
4. Corporate Governance Guidelines. Unlike the NYSE Corporate Governance Rules, Toyota is not
required to adopt the Japanese Corporate Governance Code under Japanese laws and regulations, including theCompanies Act, the Financial Instruments and Exchange Law of Japan and stock exchange rules. However, if
Toyota does not comply with the Japanese Corporate Governance Code, it is required to explain the reasons why
it does not do so in accordance with the regulations of the Japanese stock exchanges. In addition, Toyota isrequired to resolve at the board of directors matters relating to a system, which is required under the ordinance ofthe Ministry of Justice (“internal control system” or “naibu-tosei”), to ensure the execution of duties of themembers of the board of directors to comply with laws, regulations and articles of incorporation, and any othersystems to ensure the adequacy of the business, and to disclose such matters resolved, policies and the present
status of its corporate governance in its business reports, annual securities report and certain other disclosure
documents in accordance with the regulations under the Financial Instruments and Exchange Law and stock
exchange rules in respect of timely disclosure.
5. Code of Business Conduct and Ethics. Similar to the NYSE Corporate Governance Rules, under theJapanese Corporate Governance Code, Toyota is encouraged to adopt a code of conduct regarding ethicalbusiness activities for members of the board of directors, officers and employees. Toyota has resolved mattersrelating to maintenance of an “internal control system,” or “naibu-tosei,” in order to ensure its employees
comply with laws, regulations and the articles of incorporation, etc., pursuant to the Companies Act, and Toyota
maintains guidelines and internal regulations such as “Guiding Principles at Toyota,” “Toyota Code of Conduct”
and a code of ethics pursuant to Section 406 of the Sarbanes-Oxley Act. Please see “Code of Ethics” foradditional information.
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.

144

PART IIIITEM 17. FINANCIAL STATEMENTS
Not applicable.
ITEM 18. FINANCIAL STATEMENTS
The following financial statements are filed as part of this annual report on Form 20-F.

145

TOYOTA MOTOR CORPORATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page

Report of Independent Registered Public Accounting Firm (PCAOB ID:2743) . . . . . . . . . . . . . . . . . . . . .

F-2

Consolidated statement of financial position at March 31, 2022 and 2023 . . . . . . . . . . . . . . . . . . . . . . . . .

F-4

Consolidated statement of income for the years ended March 31, 2021, 2022 and 2023 . . . . . . . . . . . . . . .

F-6

Consolidated statement of comprehensive income for the years ended March 31, 2021, 2022 and 2023 . .

F-7

Consolidated statement of changes in equity for the years ended March 31, 2021, 2022 and 2023 . . . . . . .

F-8

Consolidated statement of cash flows for the years ended March 31, 2021, 2022 and 2023 . . . . . . . . . . . .

F - 10Notes to consolidated financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F - 11All financial statements schedules are omitted because they are not applicable or the required information isshown in the financial statements or the notes thereto.
Financial statements of 50% or less owned persons accounted for by the equity method have been omitted
because none of them meets the significance tests specified in Rule 3-09 of Regulation S-X.

F-1

Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of
Toyota Jidosha Kabushiki Kaisha(“Toyota Motor Corporation”)
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated statement of financial position of Toyota Motor Corporation and its subsidiaries (collectively
referred to as the “Company”) as of March 31, 2023 and 2022, and the related consolidated statements of income, comprehensive income,changes in equity and cash flows for each of the three years in the period ended March 31, 2023, including the related notes (collectively
referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as ofMarch 31, 2023, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of theCompany as of March 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended
March 31, 2023 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2023,
based on criteria established in Internal Control—Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control overfinancial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual
Report on Internal Control Over Financial Reporting appearing under Item 15(b). Our responsibility is to express opinions on the Company’s
consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public
accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits toobtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or
fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of theconsolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also
included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating thedesign and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as
we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance ofrecords that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, orthat the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements thatwere communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material tothe consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of

F-2

critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, bycommunicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures towhich they relate.
Liabilities for the costs of recalls and other safety measures
As described in Notes 3 and 24 to the consolidated financial statements, the Company accrues for costs of recalls and other safety measures.
As of March 31, 2023, estimated liabilities for the costs of recalls and other safety measures totaled ¥1,194,156 million and were included inliabilities for quality assurance in the consolidated statement of financial position. The Company generally measures the liabilities for recalls
and other safety measures at the time of vehicle sales comprehensively by aggregate sales of various models in a certain period bygeographical regions. However, when circumstances warrant, the Company measures liabilities for costs of a particular recall or other safetymeasures using an individual model when they are probable and reasonably estimable. Management calculates the liabilities for the costs ofrecalls and other safety measures that are determined comprehensively based on the accumulated amount of repair cost paid per unit andpattern of actual payment occurrence.
The principal considerations for our determination that performing procedures relating to liabilities for the costs of recalls and other safetymeasures that are determined comprehensively is a critical audit matter are 1) significant judgment and estimation was required bymanagement when developing the liabilities which in turn led to a high degree of auditor judgment and subjectivity in performing proceduresto evaluate management’s assumptions; and 2) significant audit effort was necessary relating to testing the accumulated amount of repair cost
paid per unit and pattern of actual payment occurrence utilized in developing the estimate. In addition, the audit effort included the
involvement of professionals with specialized skill and knowledge to assist in performing these procedures and evaluating the audit evidence
obtained.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the
consolidated financial statements. These procedures included testing the effectiveness of controls relating to liabilities for the costs of recalls
and other safety measures, including controls related to the determination of the significant assumptions and data used to calculate theliabilities that are determined comprehensively. These procedures also included, among others: 1) testing management’s process for
estimating the liabilities, including evaluating the reasonableness of the significant assumptions; and 2) testing of the completeness andaccuracy of the data used in the estimate. Professionals with specialized skill and knowledge were used to assist in testing the liabilities bydeveloping an independent range of reasonable estimated loss based on the Company’s data and independently developed assumptions.
Allowance for Credit Losses—Retail finance receivables
As described in Notes 3, 8 and 19 to the consolidated financial statements, the Company measures an allowance for credit losses on its retailfinance receivables by estimating the expected credit losses at the reporting date. As of March 31, 2023, ¥274,871 million of the allowance for
credit losses corresponding to ¥20,201,004 million of retail finance receivables was recorded in the consolidated statement of financial
position. The allowance for credit losses on retail finance receivables is measured based on a systematic, ongoing review and evaluation
performed as part of the credit risk evaluation process, historical loss experience, the size and composition of the portfolios, current economic
events and conditions, the estimated fair value and adequacy of collateral, forward-looking information including movements of the world
economy and other pertinent factors. In calculating the expected credit losses, the Company uses the probability of a default and the loss ratein the event of a default based on past experience and then reflects adjustments based on its forecasts of current and future economic
conditions. Retail finance receivables within the United States represent approximately half of the consolidated retail finance receivables as ofMarch 31, 2023.
The principal considerations for our determination that performing procedures relating to the allowance for credit losses on retail financereceivables is a critical audit matter are 1) significant judgment was required by management when determining assumptions of the probabilityof a default, the loss rate in the event of a default, and adjustments based on the forecasts of current and future economic conditions used in
the estimating of the allowance for credit losses, which in turn led to a high degree of auditor judgment and subjectivity in performing
procedures to evaluate management’s assumptions and adjustments; 2) there was a high level of complexity in assessing audit evidence
related to management’s estimate. In addition, the audit effort included the involvement of professionals with specialized skill and knowledge
to assist in performing these procedures and evaluating the audit evidence obtained.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the
consolidated financial statements. These procedures included testing the effectiveness of controls relating to the Company’s allowance for
credit losses on retail finance receivables, including controls over data supporting the assumptions, such as the probability of a default and theloss rate in the event of a default based on past experience, and adjustments used to determine the allowance. These procedures also included,
among others, testing management’s process for estimating the allowance, including evaluating the reasonableness of the assumptions andadjustments. Professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of the assumptions andadjustments determined by management.
/s/ PricewaterhouseCoopers Aarata LLC
Nagoya, Japan
June 30, 2023
We have served as the Company’s auditor since 2006.

F-3

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENT OF FINANCIAL POSITION
Notes

AssetsCurrent assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade accounts and other receivables . . . . . . . . . . . . . . . . . . . . . . . .
Receivables related to financial services . . . . . . . . . . . . . . . . . . . . . .
Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6
7
8
9
10

Yen in millions
March 31, 2022 March 31, 2023

6,113,655
3,142,832
7,181,327
2,507,248
3,821,356
163,925
791,947

7,516,966
3,586,130
8,279,806
1,715,675
4,255,614
218,704
886,885

23,722,290

26,459,781

11
8
94,837,895
14,583,130
9,517,267

5,227,345
16,491,045
10,556,431

12
12
12
12
12

1,361,791
5,284,620
13,982,362
6,781,229
565,528

1,426,370
5,464,811
14,796,619
6,774,427
846,866

Total property, plant and equipment, at cost . . . . . . . . . . . . . . .

1227,975,530

29,309,093

Less - Accumulated depreciation and impairment losses . . . . .

12(15,648,890) (16,675,119)

Total property, plant and equipment, net . . . . . . . . . . . . . . . . .

1212,326,640

12,633,974

Right of use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13
14
15
23

448,4121,191,966
342,202
718,968

491,368
1,249,122
387,427806,687

Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

43,966,482

47,843,399

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

67,688,771

74,303,180

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current assets
Investments accounted for using the equity method . . . . . . . . . . . . .
Receivables related to financial services . . . . . . . . . . . . . . . . . . . . . .
Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vehicles and equipment on operating leases . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The accompanying notes are an integral part of these consolidated financial statements.
F-4

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENT OF FINANCIAL POSITION—(Continued)
Notes

Liabilities
Current liabilities
Trade accounts and other payables . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term and current portion of long-term debt . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities for quality assurance . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16
17

Yen in millions
March 31, 2022 March 31, 2023

4,292,092
11,187,839
1,520,446
1,046,050
826,815
1,555,711
1,413,208

4,986,309
12,305,639
1,552,345
1,392,397
404,606
1,686,357
1,632,063

21,842,161

23,959,715

15,308,519
461,583
1,022,749
1,354,794
544,145

17,074,634
533,710
1,065,508
1,802,346
603,052

Total non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18,691,790

21,079,251

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40,533,951

45,038,967

18
24

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current liabilities
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retirement benefit liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17
18
23
15

Shareholders’ equity
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other components of equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25
25
25
25
25

397,050
397,050
498,575
498,728
26,453,126 28,343,296
2,203,254
2,836,195(3,306,037) (3,736,562)

Total Toyota Motor Corporation shareholders’ equity . . . . . . . . . . .

25

26,245,969

28,338,706

Non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

908,851925,507

Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27,154,820

29,264,213

Total liabilities and shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

67,688,771

74,303,180

The accompanying notes are an integral part of these consolidated financial statements.
F-5

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENT OF INCOME

Notes

For the year ended
March 31, 2021

Yen in millions
For the year ended
March 31, 2022

For the year ended
March 31, 2023

Sales revenues
Sales of products . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . .

26
26

25,077,398
2,137,195

29,073,428
2,306,079

34,367,619
2,786,679

Total sales revenues . . . . . . . . . . . . . . . .

26

27,214,594

31,379,507

37,154,298

Costs and expenses
Cost of products sold . . . . . . . . . . . . . . .
Cost of financial services . . . . . . . . . . . .
Selling, general and administrative . . . .

21,199,890
1,182,330
2,634,625

24,250,784
1,157,050
2,975,977

29,128,561
1,712,721
3,587,990

Total costs and expenses . . . . . . . . . . . .

25,016,845

28,383,811

34,429,273

Operating income . . . . . . . . . . . . . . . . . . . . . .

2,197,748

2,995,697

2,725,025

351,029435,229(47,537)
15,142(19,257)

560,346
334,760(43,997)
216,187(72,461)

643,063
379,350(125,113)
124,516(78,109)2,932,354

3,990,532

3,668,733

649,976

1,115,918

1,175,765

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,282,378

2,874,614

2,492,967

Net income attributable to
Toyota Motor Corporation . . . . . . . . . . .
Non-controlling interests . . . . . . . . . . . .

2,245,261
37,1182,850,110
24,5042,451,318
41,650Net income . . . . . . . . . . . . . . . . . . . . . . .

2,282,378

2,874,614

2,492,967

Share of profit (loss) of investments
accounted for using the equity method . . .
Other finance income . . . . . . . . . . . . . . . . . . .
Other finance costs . . . . . . . . . . . . . . . . . . . . .
Foreign exchange gain (loss), net . . . . . . . . . .
Other income (loss), net . . . . . . . . . . . . . . . . .

11
28
28

Income before income taxes . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . .

15

Yen

Earnings per share attributable to Toyota
Motor Corporation
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29

160.65205.23179.47

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . .

29

158.93205.23179.47

The accompanying notes are an integral part of these consolidated financial statements.
F-6

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended
March 31, 2021

Yen in millions
For the year ended
March 31, 2022

For the year ended
March 31, 2023

2,282,378

2,874,614

2,492,967

387,427(49,242)

99,223

216,272

136,250

65,15380,472

113,641(77,148)

684,172

200,648

87,228403,636

902,844676,042(83,503)(154,174)(115,738)

8,172

193,811

180,181

328,305

942,480

740,485

1,012,476

1,143,129

827,713Comprehensive income . . . . . . . . . . . . . . . . .

3,294,854

4,017,742

3,320,681

Comprehensive income for the period
attributable to
Toyota Motor Corporation . . . . . . . . . .
Non-controlling interests . . . . . . . . . . . .

3,217,806
77,0483,954,350
63,3923,251,090
69,591

Comprehensive income . . . . . . . . . . . . .

3,294,854

4,017,742

3,320,681

Notes

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income, net of tax
Items that will not be reclassified to
profit (loss)
Net changes in revaluation offinancial assets measured at fairvalue through othercomprehensive income . . . . . . . 25
Remeasurements of defined benefit
plans . . . . . . . . . . . . . . . . . . . . . . 25
Share of other comprehensive
income of equity method
investees . . . . . . . . . . . . . . . . . . 11,25
Total of items that will not bereclassified to profit (loss) . . . . .
Items that may be reclassified
subsequently to profit (loss)
Exchange differences ontranslating foreign operations . . 25
Net changes in revaluation offinancial assets measured at fairvalue through othercomprehensive income . . . . . . . 25
Share of other comprehensive
income of equity method
investees . . . . . . . . . . . . . . . . . . 11,25
Total of items that may bereclassified subsequently to
profit (loss) . . . . . . . . . . . . . . . .
Total other comprehensive income, netof tax . . . . . . . . . . . . . . . . . . . . . . . . .

25

The accompanying notes are an integral part of these consolidated financial statements.
F-7

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended March 31, 2021
Yen in millions
Additional
Common paid-in
Notes stock
capitalBalances at April 1, 2020 . . . . . . . . . .
Comprehensive income
Net income . . . . . . . . . . . . . . . . .
Other comprehensive income,net of tax . . . . . . . . . . . . . . . . 25
Total comprehensive income . . .
Transactions with owners and other
Dividends paid . . . . . . . . . . . . . . 25
Repurchase of treasury stock . . . 25
Reissuance of treasury stock . . . 25
Change in scope of
consolidation . . . . . . . . . . . . .
Equity transactions and other . . .
Total transactions with owners
and other . . . . . . . . . . . . . . . . .
Reclassification to retained
earnings . . . . . . . . . . . . . . . . . . . . . 25
Balances at March 31, 2021 . . . . . . . .

Retainedearnings

Other
componentsof equity

397,050 489,334 22,234,061

585,549————

Toyota Motor
Corporation
NonTotal
Treasury shareholders’ controlling shareholders’stockequityinterests
equity(3,087,106) 20,618,888

720,124

21,339,012

2,245,261

37,1182,282,378

2,245,261

—

—

—

—

972,546—

972,546

39,9301,012,476—

2,245,261

972,546—

3,217,806

77,0483,294,854

—
—
—

—
—
15,041(625,514)
—
—

—
—
—

—
(118)
185,544(625,514) (36,598)(118)—
200,585—(662,112)(118)
200,585———(7,099)

—
—

—
—

—
—

—
102,588(7,099) 20,620

102,588
13,521—

7,942(625,514)—

185,426(432,147)——

250,369(250,369)

—

—

—

—

397,050 497,275 24,104,176

1,307,726(2,901,680) 23,404,547

883,782

24,288,329

86,610(345,537)

For the year ended March 31, 2022
Yen in millions

Retainedearnings

Other
componentsof equity

Toyota Motor
Corporation
NonTotal
Treasury shareholders’ controlling shareholders’stockequityinterests
equity397,050 497,275 24,104,176

1,307,726(2,901,680) 23,404,547

CommonNotes stock

Balances at April 1, 2021 . . . . . . . . . .
Comprehensive income
Net income . . . . . . . . . . . . . . . . .
Other comprehensive income,net of tax . . . . . . . . . . . . . . . . 25

Additional
paid-in
capital——883,782

24,288,329

2,850,110——

2,850,110

24,504

2,874,614———

1,104,240—

1,104,240

38,889

1,143,129

Total comprehensive income . . .

——2,850,110

1,104,240—

3,954,350

63,392

4,017,742

Transactions with owners and other
Dividends paid . . . . . . . . . . . . . . 25
Repurchase of treasury stock . . . 25
Reissuance of treasury stock . . . 25
Equity transactions and other . . .

—
—
—
—

—
—
227
1,074

(709,872)
—
—
—

—
—
—
—

—
(404,718)
362—(709,872) (51,723)(404,718)
—
588
—
1,074
13,400(761,595)(404,718)
588
14,473

Total transactions with owners
and other . . . . . . . . . . . . . . . . .

—

1,300

(709,872)—(404,357) (1,112,928) (38,323) (1,151,252)——

208,712(208,712)

397,050 498,575 26,453,126

2,203,254

Reclassification to retained
earnings . . . . . . . . . . . . . . . . . . . . . 25
Balances at March 31, 2022 . . . . . . . .

—

—

—

(3,306,037) 26,245,969—

908,851

27,154,820

The accompanying notes are an integral part of these consolidated financial statements.
F-8

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENT OF CHANGES IN EQUITY—(Continued)
For the year ended March 31, 2023
Yen in millions

Retainedearnings

Other
componentsof equity

Toyota Motor
Corporation
NonTotal
Treasury shareholders’ controlling shareholders’stockequityinterests
equity397,050 498,575 26,453,126

2,203,254(3,306,037) 26,245,969

CommonNotes stock

Balances at April 1, 2022 . . . . . . . . . .
Comprehensive income
Net income . . . . . . . . . . . . . . . . .
Other comprehensive income,net of tax . . . . . . . . . . . . . . . . 25

Additional
paid-in
capital——2,451,318——

908,851

27,154,820

2,451,318

41,6502,492,967———

799,772—

799,772

27,941

827,713

Total comprehensive income . . .

——2,451,318

799,772—3,251,090

69,591

3,320,681

Transactions with owners and other
Dividends paid . . . . . . . . . . . . . . 25
Repurchase of treasury stock . . . 25
Reissuance of treasury stock . . . 25
Equity transactions and other . . .

—
—
—
—

—
—
334
(181)

(727,980)
—
—
—

—
—
—
—

—
(431,099)
573—(727,980) (84,986)(431,099)—
907—(181) 32,052(812,966)(431,099)
907
31,871

Total transactions with owners
and other . . . . . . . . . . . . . . . . .

—152(727,980)—(430,526) (1,158,353) (52,934) (1,211,287)——

166,831(166,831)

397,050 498,728 28,343,296

2,836,195

Reclassification to retained
earnings . . . . . . . . . . . . . . . . . . . . . 25
Balances at March 31, 2023 . . . . . . . .

—

—

—

(3,736,562) 28,338,706—

925,507

29,264,213

The accompanying notes are an integral part of these consolidated financial statements.
F-9

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENT OF CASH FLOWS
Yen in millions
For the year ended For the year ended For the year ended
Notes March 31, 2021
March 31, 2022
March 31, 2023
Cash flows from operating activities
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income and interest costs related to financial services,
net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share of profit (loss) of investments accounted for using theequity method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities, and other . . . . . . . . .
(Increase) decrease in trade accounts and otherreceivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Increase) decrease in receivables related to financial
services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Increase) decrease in inventories . . . . . . . . . . . . . . . . . . . .
(Increase) decrease in other current assets . . . . . . . . . . . . . .
Increase (decrease) in trade accounts and other payables . .
Increase (decrease) in other current liabilities . . . . . . . . . . .
Increase (decrease) in retirement benefit liabilities . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes paid, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) operating activities . . . . . . . . . . .
Cash flows from investing activities
Additions to fixed assets excluding equipment leased toothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions to equipment leased to others . . . . . . . . . . . . . . . . . . .
Proceeds from sales of fixed assets excluding equipment leased
to others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of equipment leased to others . . . . . . . . . . .
Additions to intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions to public and corporate bonds and stocks . . . . . . . . . .
Proceeds from sales of public and corporate bonds and stocks . .
Proceeds upon maturity of public and corporate bonds . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,282,378
1,644,290

2,874,614
1,821,880

2,492,967
2,039,904(236,862)(354,102)(694,331)(351,029)
649,976(1,063,562)(560,346)
1,115,918(1,130,667)(643,063)
1,175,765(1,502,482)

5,027

118,652(532,432)(1,243,648)(242,769)(163,473)
384,142
282,197
55,281(140,319)
776,748
294,520(459,181)(810,117)(1,213,234)(725,285)
71,314
152,399
410,546
60,419(5,478)
835,739
347,387(418,043)(809,763)(1,760,288)(350,550)(61,538)
712,400
545,666
21,213(76,953)
1,516,404
460,351(593,216)(1,297,224)

2,727,162

3,722,615

2,955,076(1,213,903)(2,275,595)(1,197,266)(2,286,893)(1,450,196)(1,907,356)

40,542
1,371,699(278,447)(2,729,171)
1,020,533
1,041,385(1,661,218)

37,749
1,542,132(346,085)(2,427,911)
282,5211,920,116
1,898,143

56,436
1,659,161(348,280)(1,150,214)
393,982
939,747
207,829(4,684,175)(577,496)(1,598,890)

17
17
17

(1,038,438)
9,656,216(5,416,376)(579,216)
8,122,678(8,843,665)

239,689
9,276,918(8,353,033)

25(625,514)(36,598)
199,884—(709,872)(51,723)(404,718)—(727,980)(84,986)(431,099)
24,3102,739,174(2,466,516)(56,180)33

Net cash provided by (used in) investing activities . . . . . . . . . . .
Cash flows from financing activities
Increase (decrease) in short-term debt . . . . . . . . . . . . . . . . . . . . .
Proceeds from long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to Toyota Motor Corporation commonshareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to non-controlling interests . . . . . . . . . . . . . . . . .
Reissuance (repurchase) of treasury stock . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) financing activities . . . . . . . . . . .
Effect of exchange rate changes on cash and cash equivalents . . . . . .

220,245

334,195

103,305

Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . .

1,002,406

1,012,798

1,403,311

Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . .

6

4,098,450

5,100,857

6,113,655

Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . .

65,100,857

6,113,655

7,516,966

The accompanying notes are an integral part of these consolidated financial statements.
F-10

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Reporting entity
TMC is a limited liability, joint-stock company located in Japan, and TMC’s principal executive offices areregistered in Toyota City, Aichi Prefecture. The consolidated financial statements of the group consist of TMC,
its consolidated subsidiaries (collectively, “Toyota”) and their interests in associates and joint ventures.
Toyota and its associates are primarily engaged in the design, manufacture, and sale of sedans, minivans,compact cars, SUVs, trucks and related parts and accessories throughout the world. In addition, Toyota and its
associates provide financing, vehicle leasing and certain other financial services primarily to its dealers and theircustomers to support the sales of vehicles and other products manufactured by Toyota and its associates.
2. Basis of preparation(1) Compliance with international financial reporting standards
Toyota’s consolidated financial statements have been prepared in accordance with IFRS as issued by the
IASB.
The consolidated financial statements were approved on June 30, 2023 by President, member of the Boardof Directors Koji Sato and CFO, member of the Board of Directors Yoichi Miyazaki.
(2) Basis of measurement
Toyota’s consolidated financial statements have been prepared on a historical cost basis, except for certain
financial assets and liabilities measured at fair value and assets and liabilities associated with defined benefit
plans indicated in “3. Significant accounting policies”.
(3) Functional currency and presentation currency
The consolidated financial statements are presented in Japanese yen, which is the functional currency of
TMC. All financial information presented in Japanese yen has been rounded to the nearest million Japanese yen,
except when otherwise indicated. Amounts may not sum to totals due to rounding.
3. Significant accounting policies
Basis of consolidation (1) Subsidiaries
The consolidated financial statements include the accounts of TMC, its subsidiaries that are controlled by
TMC, and those structured entities that are controlled by Toyota. Toyota controls an entity when Toyota is
exposed or has rights to variable returns from involvement with the entity, and has the ability to affect those
returns by using its power over the entity.
The financial statements of subsidiaries have been adjusted in order to ensure consistency with theaccounting policies adopted by Toyota as necessary. All significant intercompany balances and transactions aswell as the unrealized profit have been eliminated in consolidation.
Changes in a subsidiary’s ownership interests that do not result in a loss of control are accounted for as
equity transactions. When control over a subsidiary is lost, any gain or loss on the disposal of the interest sold isrecognized in profit or loss.
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TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(2) Associates and joint ventures
Associates are entities over which Toyota has a significant influence over the decisions on financial andoperating policies, but does not have control or joint control.
Joint ventures are entities over which two or more parties including Toyota have joint control, based on acontractual arrangement, and financial and business decisions about the relevant activities of which require
unanimous consent of the parties that have joint control.
Investments in associates and joint ventures are accounted for using the equity method. The financial
statements of associates and joint ventures have been adjusted in order to ensure consistency with the accounting
policies adopted by Toyota as necessary.
When the use of the equity method is discontinued from the date when the investees are determined to be nolonger associates or joint ventures, any gain or loss on such disposal of the investment is recognized in profit orloss.
Foreign currency translation (1) Foreign currency transactions
Foreign currency transactions are translated into the respective functional currencies of Toyota at theexchange rates prevailing when such transactions occur. All foreign currency receivables and payables aretranslated into the respective functional currencies at the applicable exchange rates at the end of the reporting
period. Non-monetary assets and liabilities in foreign currencies that are measured at fair value are translated into
the functional currency using the exchange rate on the date when the fair value was measured. Gains or losses on
exchange differences arising from settlement of foreign currency receivables and payables or on their translations
at the end of the reporting date are recognized in profit or loss. Furthermore, exchange differences arising fromequity financial assets measured at fair value through other comprehensive income is recognized as othercomprehensive income.
(2) Foreign operations
All assets and liabilities of foreign subsidiaries, associates and joint ventures (collectively, “foreign
operations”) that use a functional currency other than Japanese yen are translated into Japanese yen at theexchange rates at the end of the reporting period. All revenues and expenses of foreign operations are translated
into Japanese yen at the average exchange rate for the period unless the exchange rate fluctuates widely.
Exchange differences arising from such translations are recognized in other comprehensive income andaccumulated in other components of equity in the consolidated statement of financial position. When a foreign
operation is disposed of, and control, significant influence or joint control over the foreign operation is lost, thecumulative amount of exchange differences relating to the foreign operation is reclassified from equity to profit
or loss.
Cash and cash equivalents Cash and cash equivalents consist of cash on hand, demand deposits, and short-term investments that arereadily convertible to cash and are subject to insignificant risk of changes in value with three months or lessmaturities from the acquisition date.

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TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Financial instruments (1) Financial assets(i) Initial recognition and measurement
Toyota initially recognizes financial assets when it becomes a party to a contract and except for derivatives,classifies financial assets into “financial assets measured at amortized cost”, “debt and equity financial assets
measured at fair value through other comprehensive income” or “financial assets measured at fair value throughprofit or loss”. The sale or purchase of financial assets that occurred in the normal course of business arerecognized and derecognized at the trade date.
Financial assets classified as being measured at fair value through profit or loss are measured at fair value,
but other financial assets are initially recognized and measured at fair value adding transaction costs directly
attributable to acquisition. Trade receivables that do not contain significant financial elements are measured at
the transaction price.
(a) Financial assets measured at amortized cost
Toyota classifies a financial asset as measured at amortized cost if both of the following conditions are met:
The asset is held within a business model whose objective is to hold financial assets in order to collectcontractual cash flows; andThe contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
(b) Debt financial assets measured at fair value through other comprehensive income
Debt financial assets are measured at fair value through other comprehensive income only if it meets both of
the following conditions:
The asset is held within a business model whose objective is achieved by both collecting contractual cash
flows and selling financial assets; andThe contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
(c) Equity financial assets measured at fair value through other comprehensive income
For equity financial assets such as shares held mainly for the purpose of maintaining or enhancing business
relationships with investees are irrevocably designated at initial recognition, as financial assets measured at fairvalue through other comprehensive income.
(d) Financial assets measured at fair value through profit or loss
Financial assets other than (a) to (c) are classified as financial assets measured at fair value through profit or
loss.
(ii) Subsequent measurement
After initial recognition, financial assets are measured based on the following classification.
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TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(a) Financial assets measured at amortized cost
Financial assets measured at amortized cost are measured at amortized cost using the effective interest
method.
(b) Debt financial assets measured at fair value through other comprehensive income
Subsequent changes in fair value of the financial assets are recognized as other comprehensive income.
Impairment gains or losses, interest income and foreign exchange gains and losses are recognized in profit orloss. When the financial assets are derecognized, the cumulative gain or loss recognized in other comprehensive
income is reclassified from other components of equity to profit or loss.
(c) Equity financial assets measured at fair value through other comprehensive income
Subsequent changes in fair value of the financial assets are recognized as other comprehensive income.
When the financial assets are derecognized, the cumulative gain or loss recognized through other comprehensive
income is reclassified from other components of equity to retained earnings. Dividends from equity financial
assets are recognized in profit or loss.
(d) Financial assets measured at fair value through profit or loss
Subsequent changes in the fair value of the financial assets are recognized in profit or loss.
(iii) Impairment of financial assets
An allowance for credit losses is provided for expected credit losses on financial assets that are measured atamortized cost as well as debt financial assets measured at fair value through other comprehensive income. An
allowance for credit losses is also provided for expected credit losses on loan commitments or financial guarantee
agreements that are off-balance sheet credit exposures.
At the end of the reporting period, Toyota assesses whether the credit risk on financial assets havesignificantly increased since initial recognition. At the end of the reporting period, if Toyota identifies asignificant increase in credit risk, allowances for credit losses are measured as being equal to the amount of
expected credit losses that would result from default events that are possible over the expected life of a financial
asset. At the end of the reporting period, if the credit risk for a financial instrument has not increased
significantly since its initial recognition, allowances for credit losses are measured as being equal to the amountof the expected credit losses caused by default events that may occur within 12 months from the end of thereporting period.
For accounts receivable that are included in “Trade accounts and other receivables” and finance leasereceivables, the allowance is continuously measured at amounts equal to expected credit losses over the expected
life of financial assets.
The amount of expected credit losses is measured as the present value of all cash short falls resulting fromthe difference between the cash flows due to Toyota in accordance with the contract and cash flows that Toyota
expects to receive, and such amount is recognized in profit or loss. A reversal of the allowance for credit losses
resulting from a reduction in the amount of expected credit losses is recognized in profit or loss.
If there is objective evidence of impairment such as significant financial difficulty of a borrower, or adefault or delinquency by a borrower, interest income is measured applying the effective interest method to the
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TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
net carrying amount of the financial asset (after deducting the allowance for credit loss). Financial assets are
written off either partially or fully when there is no reasonable expectation of recovering a financial asset in its
entirely or a portion thereof.
(iv) Derecognition of financial assets
Toyota derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or
when Toyota transfers the contractual right to receive cash flows from financial assets in transactions in which
substantially all the risks and rewards of ownership of the asset are transferred to another entity. Even if Toyotatransfers a financial asset, it neither transfers nor holds substantially all the risks and rewards of ownership ofsuch transferred financial asset. Further, in cases where Toyota continues to control such a transferred financial
asset, Toyota recognizes the retained interest on such financial asset and the relevant liabilities that might
possibly be paid in association therewith.
(2) Financial liabilities(i) Initial recognition and measurement
Toyota initially measures financial liabilities other than derivatives at fair value less transaction costs
directly attributable to the issuance of financial liabilities.
(ii) Subsequent measurement
Toyota subsequently measures financial liabilities at amortized cost using the effective interest method.
Amortization under the effective interest method and gain or losses on derecognition are recognized as financeincome or costs and recognized in profit or loss.
(iii) Derecognition of financial liabilities
Toyota derecognizes financial liabilities when the financial liabilities expire, that is, when the liability
identified in the contract expires due to performance, discharges, cancels, or expires.
(3) Derivative financial instruments
Toyota employs derivative financial instruments, including forward foreign exchange contracts, foreign
currency options, interest rate swaps, interest rate currency swap agreements and interest rate options, to manage
its exposure to fluctuations in interest rates and foreign currency exchange rates. All derivative transactions aremeasured at fair value as assets or liabilities.
Toyota does not use derivative financial instruments for speculative or trading purposes.
Finance receivables Finance receivables recorded on Toyota’s consolidated statement of financial position are net of any
unearned financial income and deferred origination costs and the allowance for credit losses. Deferredorigination costs are amortized so as to approximate a level rate of return over the term of the related contracts.

F-15

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The determination of finance receivable portfolios is based primarily on the qualitative consideration of thenature of Toyota’s business operations and finance receivables. The three portfolios within finance receivables
are as follows:(1) Retail receivables portfolio
The retail receivables portfolio consists of retail installment sales contracts acquired mainly from dealers(“auto loans”) including credit card loans. These contracts acquired must first meet specified credit standards.
Thereafter, Toyota retains responsibility for contract collection and administration.
The contract periods of auto loans primarily range from 2 to 7 years. Toyota acquires security interests inthe vehicles financed and has the right to repossess vehicles if customers fail to meet their contractual
obligations. Almost all auto loans are non-recourse, which relieves the dealers from financial responsibility in theevent of repossession.
Toyota manages the retail receivables portfolio as one portfolio based on common risk characteristics
associated with the underlying finance receivables, the similarity of the credit risks, and the quantitative
materiality.
(2) Finance lease receivables portfolio
Finance lease receivables are related to new vehicle lease contracts. The contract periods of these primarily
range from 2 to 5 years. Lease contracts acquired must first meet specified credit standards after which Toyota
assumes ownership of the leased vehicle. Toyota is responsible for contract collection and administration during
the lease period.
Toyota is generally permitted to take possession of the vehicle upon a default by the lessee. The residual
value is estimated at the time the vehicle is first leased. Vehicles returned to Toyota at the end of their leases are
sold by auction.
Toyota manages the finance lease receivables portfolio as one portfolio based on common risk
characteristics associated with the underlying finance receivables and the similarity of the credit risks.
(3) Wholesale and other dealer loan receivables portfolio
Toyota provides wholesale financing to qualified dealers to finance inventories. Toyota acquires security
interests in vehicles financed at wholesale. In cases where additional security interests would be required, Toyota
takes dealership assets or personal assets, or both, as additional security. If a dealer defaults, Toyota has the rightto liquidate any assets acquired.
Toyota also makes term loans to dealers for business acquisitions, facilities refurbishment, real estatepurchases and working capital requirements. These loans are typically secured with liens on real estate, otherdealership assets and/or personal assets of the dealers.
Toyota manages the wholesale and other dealer loan receivables portfolio as one portfolio based on the risk
characteristics associated with the underlying finance receivables.
Allowance for credit losses on finance receivables The allowance for credit losses on finance receivables is measured at the portfolio level, based on asystematic, ongoing review and evaluation performed as part of the credit risk evaluation process, historical loss
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TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
experience, the size and composition of the portfolios, current economic events and conditions, the estimated fairvalue and adequacy of collateral, forward-looking information including movements of the world economy andother pertinent factors. Furthermore, portfolios are grouped based on similarities of risk characteristics, such as
product and collateral classes, when calculating expected credit losses in the aggregate.
(1) Retail receivables portfolio
With respect to retail receivables, Toyota reviews whether the credit risk on finance receivables has
increased significantly. To evaluate the risk, Toyota uses the changes for the possibility of a credit loss occurringor days in arrears as an index. Toyota assesses the significant increases in credit risk when contractual payments
are more than 30 days past due. When the credit risk on finance receivables has not increased significantly sinceinitial recognition, Toyota measures the loss allowance for that finance receivables at an amount equal to
12-month expected credit losses at the reporting date.
Meanwhile, Toyota measures the loss allowance for finance receivables at an amount equal to the lifetime
expected credit losses if the credit risk on that finance receivables has increased significantly since initialrecognition at the reporting date. Toyota calculates the loss allowance for finance receivables at an amount equal
to the lifetime expected credit losses by considering historical credit loss experience and future collectability,
when there is evidence that finance receivables is credit-impaired such as a breach of contract due to default or
delayed contractual payments.
In calculating expected credit losses, Toyota uses the probability of a default and the loss rate in the event ofa default based on past experience and then reflects its forecasts of current and future economic conditions.
Suspension of payment over a certain period of time and or situations which contractual obligations are notbeing met are considered as being in default in accordance with internal management rules.
(2) Finance lease receivables portfolio
With respect to the finance lease receivables portfolio, Toyota always measures loss allowance at an amountequal to lifetime expected credit losses. Suspension of payment over a certain period of time and/or situations
which contractual obligations are not being met are considered as being in default in accordance with internalmanagement rules.
(3) Wholesale and other dealer loan receivables portfolio
With respect to the wholesale and other dealer loan receivables portfolio, receivables are sorted primarily bycredit qualities based on internal risk assessments. Toyota reviews the change of the segment as an index whether
the credit risk on finance receivables has increased significantly since initial recognition to assess thesereceivables for credit risk. Toyota assesses the significant increases in credit risk when contractual payments are
more than 30 days past due. If the credit risk on finance receivables has not increased significantly since initialrecognition, Toyota measures the loss allowance for that finance receivables at an amount equal to 12-month
expected credit losses at the reporting date.
Meanwhile, Toyota measures the loss allowance for finance receivables at an amount equal to the lifetime
expected credit losses if the credit risk on that finance receivables has increased significantly since initialrecognition at the reporting date. Toyota calculates the loss allowance for finance receivables at an amount equal
to the lifetime expected credit losses by considering historical credit loss experience and future collectability,
when there is evidence that finance receivables are credit-impaired such as a debtor’s worsened financial
conditions, breach of contract due to default or delayed contractual payments.
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TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In calculating expected credit losses, Toyota uses the probability of a default and the loss rate in the event ofa default based on past experience and then reflects its forecasts of current and future economic conditions.
Suspension of payment over a certain period of time and/or situations where contractual obligations are notbeing met are considered as defaults in accordance with internal management rules.
Although Toyota considers the allowance for credit losses on finance receivables to be adequate based on
information currently available, additional provisions may be necessary due to (i) changes in management
estimates and assumptions about asset impairments, (ii) information that indicates changes in expected future
cash flows, or (iii) changes in economic and other events and conditions. Future changes in the economy that
impact the consumer confidence such as increasing interest rates and a rise in the unemployment rate as well as
higher debt balances, coupled with deterioration in actual and expected used vehicle values, could negatively
affect future operating results of the financial services operations.
Inventories Inventories are valued at cost, not in excess of net realizable value. Net realizable value is the estimatedselling price in the ordinary course of business less the estimated original cost and estimated selling expense to
product completion. The cost of inventories includes purchase costs, conversion costs and other costs incurred inbringing the inventories to their present location and condition. The cost is determined principally by using theweighted-average method.
Property, plant and equipment Property, plant and equipment is measured based on the cost model and carried at its cost less accumulated
depreciation and impairment losses. Expenditures relating to major renewals and improvements are capitalized;
minor replacements, maintenance and repairs are charged to current operations as incurred. Depreciation ofproperty, plant and equipment, except for land that is not subject to depreciation, is calculated on the straight-line
method over the estimated useful life of the respective assets according to general class, type of structure and use.
The estimated useful lives range from 2 to 65 years for buildings and from 2 to 20 years for machinery andequipment.
The depreciation method, useful lives and residual values of property, plant and equipment are reviewed
annually at each fiscal year end, and adopted prospectively, if applicable.
Vehicles and equipment on operating leases to third parties are originated by dealers and acquired by certain
consolidated subsidiaries. Such subsidiaries are also the lessors of certain property that they acquire directly.
Vehicles and equipment on operating leases are depreciated on a straight-line method over the lease term,
generally from 2 to 5 years, to the estimated residual value. Incremental direct costs incurred in connection withthe acquisition of lease contracts are capitalized and amortized on a straight-line method over the lease term.
Toyota is exposed to risk of loss on the disposition of off-lease vehicles to the extent that sales proceeds are
not sufficient to cover the carrying value of the leased asset at lease termination. Toyota evaluates at the end ofeach reporting period the estimated residual value to cover probable estimated losses related to unguaranteed
residual values on its owned portfolio. The estimate is calculated considering projected vehicle return rates andprojected loss severity. Factors considered in the determination of projected return rates and loss severity include
historical and market information on used vehicle sales, trends in lease returns and new car markets, and general
economic conditions. Toyota evaluates the foregoing factors, develops several potential loss scenarios, andevaluates the estimated residual value to determine whether it is considered adequate to cover the probable rangeof losses.
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TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
By evaluating estimated residual value, Toyota reflects in depreciation the amount it considers to beappropriate in relation to the estimated losses on its owned portfolio.
Intangible assets Intangible assets are measured based on the cost model and carried at their cost less accumulated
amortization and impairment losses.
The estimated useful lives and the amortization method of intangible assets are reviewed annually at eachfiscal year end, and adopted prospectively, if appropriate.
(1) Capitalized development cost
Development expenditure for a product is capitalized only when there is a technical and commercial
feasibility of completing the development, Toyota has the intention, ability and sufficient resources to use theoutcome of the development, it is probable that the outcome will generate a future economic benefit, and the cost
can be measured reliably.
Capitalized development cost is amortized using the straight-line method over the expected product life
cycle of the developed product ranging mainly from 5 to 10 years.
(2) Other intangible assets
Other intangible assets mainly consist of software for internal use and amortized using the straight-line
method over their estimated useful lives, mainly 5 years. Goodwill is not material to Toyota’s consolidated
statement of financial position.
Impairment of non-financial assets At the end of the reporting period, the carrying amount of non-financial assets other than inventories anddeferred tax assets are assessed to determine whether or not there is any indication of impairment. If there is suchan indication, the recoverable amount of such an asset or a cash-generating unit is estimated. An impairment loss
would be recognized when the carrying amount of an asset or a cash-generating unit exceeds the estimateddiscounted cash flows expected to result from the use of the assets and its eventual disposition. The amount of
the impairment loss to be recorded is calculated by the excess of the carrying amount of the assets over its
recoverable amount.
Leases At the inception of a contract, Toyota assesses whether the contract is, or contains, a lease.
(1) Lessee
Toyota recognizes a right of use asset and a lease liability at the lease commencement date. The cost of theright of use asset is measured at the amount of the initial measurement of the lease liability by adjusting any lease
payments made or before the commencement date. Lease liability is initially measured at the present value of thelease payments that are not paid as of the commencement date.

F-19

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
After the commencement date, Toyota applies a cost model and subsequently depreciates the right of use
asset using a straight-line method from the commencement date to the earlier of the end of the useful life of theright of use asset or the end of the lease term. Lease liability is measured at amortized cost using the effective
interest method. In the consolidated statement of financial position, lease liability is included in short-term andlong-term debt. Interest on the lease liability in each period during the lease term is the amount that produces aconstant periodic rate of interest on the remaining balance of the lease liability and recognized in profit or loss
over the lease term.
Many lease contracts relating to land and buildings entered into by Toyota include extension options thatcan be exercisable by Toyota as lessee for various purposes, such as to ensure business flexibility. Toyota
assesses whether it is reasonably certain to exercise an extension option, and if it assesses it to be reasonably
certain, the extension option is included in the lease term.
Toyota recognizes the lease payments associated with lease terms of 12 months or less as an expense on astraight-line basis over the lease term.
(2) Lessor
With respect to lessor lease transactions, Toyota determines at the commencement of the lease whether eachlease is a finance lease or operating lease.
A lease is classified as a finance lease if it transfers substantially all of the risks and rewards incidental tothe ownership of an underlying asset. Otherwise leases are classified as operating leases.
Toyota recognizes the operating lease payments in profit or loss on a straight-line basis over the lease term.
Employee benefit obligations Toyota has both defined benefit and defined contribution plans for employees’ retirement benefits.
(1) Defined benefit plan
The present value of defined benefit obligations and service cost are principally determined for each planusing the projected unit credit method. The net defined benefit liability (asset) is the present value of the defined
benefit obligations less the fair value of plan assets. Current service cost and net interest on the net defined
benefit liability (asset) are recognized as net income (loss) on the statement of net income.
Past service cost is recognized in profit or loss upon occurrence.
Toyota recognizes the difference arising from remeasurement of the net defined benefit liability (asset)
including actuarial gains and losses in other comprehensive income when it is incurred and reclassifies it
immediately to retained earnings.
(2) Defined contribution plan
For defined contribution plans, when the employees render services, the contribution payables arerecognized in profit or loss.

F-20

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Liabilities for quality assurance Toyota generally warrants its products against certain manufacturing and other defects. Provisions for
product warranties are provided for specific periods of time and/or usage of the product and vary depending upon
the nature of the product, the geographic location of the sale and other factors. The accrued warranty costs
represent management’s best estimate at the time of sale of the total costs that Toyota will incur to repair or
replace product parts that fail while still under warranty. The amount of accrued estimated warranty costs isprimarily based on historical experience of product failures as well as current information on repair costs. An
estimate of warranty claim accrued for each fiscal year is calculated based on the estimate of warranty claim perunit. The estimate of warranty claim per unit is calculated comprehensively by dividing the actual amounts ofwarranty claim by the number of sales units for the fiscal year.
Toyota accrues for costs of recalls and other safety measures, as well as product warranty cost describedabove. Toyota generally measures such “liabilities for recalls and other safety measures” at the time of vehicle
sales comprehensively by aggregate sales of various models in a certain period by geographical regions.
However, when circumstances warrant, Toyota measures “liabilities for a particular recall or other safetymeasures” using an individual model when they are probable and reasonably estimable.
The portion of “liabilities for recalls and other safety measures” recorded in the consolidated statement offinancial position is calculated comprehensively based on the “expected liability for the cost of recalls and othersafety measures” in consideration of the “accumulated amount of repair cost paid”. As such, this liability isevaluated every period based on new data and are adjusted as appropriate. Toyota calculates these liabilities forunits sold in the current period and each of the past 10 fiscal years, and aggregates such liabilities in determining
the final liability amount.
The “expected liability for the cost of recalls and other safety measures” are calculated by multiplying the“sales unit” by the “expected average repair cost per unit”. The “expected average repair cost per unit” iscalculated based on dividing the “accumulated amount of repair cost paid per unit” by the “pattern of payment
occurrences”. The “pattern of payment occurrence” represents a ratio that shows the measure of payment
occurrence over 10 years based on actual payments with regard to units sold within 10 years.
Factors that may cause a difference between the amount accrued comprehensively at the time of vehicle saleand actual payment on individual recalls and other safety measures mainly include actual cost of recalls andsafety measures during the period being significantly different from the accumulated amount of repair cost paid
per unit (generally comprised of parts and labor) and the actual pattern of payment occurrence during the period
being significantly different from the pattern of the payment occurrence in the past. Such differences are
considered as part of our estimation process for future recalls and other safety measures.
Liabilities for product warranties and liabilities for recalls and other safety measures have been combined
into “Liabilities for quality assurance” in the consolidated statement of financial position. Product warranty costs
and costs of recalls and other safety measures are included in cost of products sold in the consolidated statementof income.
The foregoing evaluations are inherently uncertain, as they require material estimates as described above.
Consequently, actual warranty costs may differ from the estimated amounts and could require additional
warranty provisions. If these factors require a significant increase in Toyota’s accrued estimated warranty costs,
it would negatively affect future operating results of the automotive operations.

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TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Revenue recognition In the automotive operations, performance obligations are considered to be satisfied when completed
vehicles and parts are delivered to the agreed locations with dealers. For parts for production, it is when they areloaded on a ship or delivered to manufacturing companies. We do not have any material significant payment
terms as payment is received at or shortly after the point of sale.
Toyota’s sales incentive programs principally consist of cash payments to dealers calculated based on total
vehicle volume or vehicle unit sales of certain models sold by a dealer during a certain period of time. Toyota
accrues these incentives as revenue reductions upon the sale of a vehicle corresponding to the program by theamount determined in the related incentive program utilizing the most likely outcome method.
The sale of certain vehicles includes a contractual right, which entitles customers to free vehicle
maintenance. We use an observable price to determine the stand-alone selling price for separate performanceobligations or a cost plus margin approach when one is not available. Such revenues from free maintenancecontracts are deferred and recognized as revenue over the period of the contract in proportion to the costs
expected to be incurred in satisfying the obligations under the contract.
Revenues from the sales of vehicles under which Toyota conditionally guarantees the minimum resale value
are recognized on a pro rata basis from the date of sale to the first exercise date of the guarantee in accordancewith lease accounting. The underlying vehicles of these transactions are recorded as assets and are depreciated inaccordance with Toyota’s depreciation policy.
Interest income from financial services is recognized using the effective interest method. Revenues fromoperating leases are recognized on a straight-line basis over the lease term.
If the period between satisfaction of the performance obligation and receipt of consideration is expected to
be within one year or less, as a practical expedient, we do not adjust the promised amount of consideration for theeffects of a significant financing component.
Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental
authorities.
Income taxes Income tax expenses are presented as the aggregate amount of current taxes and deferred taxes.
Deferred tax assets and deferred tax liabilities are recognized for future tax consequences attributable totemporary differences between the carrying amount of assets or liabilities in the consolidated statement offinancial position and the tax base of the assets or liabilities and carryforwards of unused tax losses and tax
credits.
Deferred tax assets are recognized for all future deductible amounts, to the extent that it is probable that wewill have sufficient profit to utilize the benefit of future deductible amounts.
Deferred tax liabilities for taxable temporary differences arising from investments in subsidiaries,
associates, and interest in joint ventures are recognized in principle. However, they are not recognized when
Toyota is able to control the timing of the reversal of the temporary difference and it is probable that thetemporary difference will not reverse in the foreseeable future.
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TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply in the
period when the assets are realized or the liabilities are settled, based on the tax rates and tax laws enacted or
substantively enacted at the end of the reporting period. The measurement of deferred tax assets and deferred tax
liabilities reflects the tax consequences that would follow from the manner in which Toyota expects, at the end ofreporting period, to recover or settle the carrying amount of its assets and liabilities.
Earnings per share attributable to Toyota Motor Corporation Basic earnings per share attributable to Toyota Motor Corporation is calculated by dividing net income
attributable to Toyota Motor Corporation by the weighted-average number of common shares outstanding withadjustment for treasury stock during the reporting period. Diluted earnings per share attributable to Toyota Motor
Corporation is calculated by dividing net income attributable to Toyota Motor Corporation by the weightedaverage number of common shares outstanding taking into consideration the effect of dilutive securities.
New accounting standards and interpretations not yet adopted None of new or revised standards and interpretations that have been issued as of the date of approval of theconsolidated financial statements but have not yet been adopted by Toyota have a significant effect on the
consolidated financial statements.
4. Significant accounting judgments and estimates
The preparation of the consolidated financial statements in conformity with IFRS requires management tomake judgments, estimates, and assumptions that affect the application of accounting policies, the reported
amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities.
Actual results could differ from these estimates. These estimates and underlying assumptions are reviewed on acontinuous basis. Changes in these accounting estimates are recognized in the period in which the estimates wererevised and in any future periods affected.
Information about important estimation and judgments that have significant effects on the amounts
recognized in the consolidated financial statements is as follows:
Scope of subsidiaries, associates, and joint ventures (Note 3 “Basis of consolidation”)
Intangible assets incurred by research and development (Note 3 “Intangible assets”)
Information about accounting estimates and assumption that affect the application of accounting policies
and the reported amounts of assets and liabilities, and financial statements based on IFRS is as follows:
Liabilities for quality assurance (Note 3 “Liabilities for quality assurance” and Note 24)
Allowance for credit losses on finance receivables (Note 3 “Allowance for credit losses on financereceivables” and Note 19 (2))
Impairment of non-financial assets (Note 3 “Impairment of non-financial assets” and Note 12)
Employee benefit obligations (Note 3 “Employee benefit obligations” and Note 23)
Fair value measurements (Note 21)
Recoverability of deferred tax assets (Note 3 “Income taxes” and Note 15)

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TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
5. Segment information(1) Outline of reporting segments
The operating segments reported below are the segments of Toyota for which separate financial information
is available and for which operating income/loss amounts are evaluated regularly by executive management indeciding how to allocate resources and in assessing performance.
The major portions of Toyota’s operations on a worldwide basis are derived from the Automotive andFinancial services business segments. The Automotive segment designs, manufactures and distributes sedans,
minivans, compact cars, SUVs, trucks and related parts and accessories. The Financial services segment consists
primarily of financing and vehicle leasing operations to assist in the merchandising of Toyota’s products as wellas other products. The All other segment includes telecommunications and other businesses.
(2) Segment information
As of and for the year ended March 31, 2021
Yen in millions
Inter-segment
Elimination/
UnallocatedAmountFinancialservices

All other

Sales revenues
Revenues from external customers . . . . . 24,597,846
Inter-segment revenues and transfers . . .
53,706

2,137,195
25,042479,553
572,812—27,214,594(651,560)—

Total . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . . . . . . . . .

24,651,552
23,044,391

2,162,237
1,666,645

1,052,365967,015(651,560) 27,214,594(661,205) 25,016,845

Operating income . . . . . . . . . . . . . . . . . . . . . .

1,607,161

495,593

85,3509,645

2,197,748

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments accounted for using the equity
method . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . .
Capital expenditures . . . . . . . . . . . . . . . . . . . .

21,412,034

28,275,239

2,720,720

9,859,147

62,267,140

3,698,990
893,704
1,341,032

71,336
715,757
2,151,455

248,81434,82976,370141,664—
40,843

4,160,803
1,644,290
3,609,699

Automotive

F-24

Consolidated

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As of and for the year ended March 31, 2022
Yen in millions
Inter-segment
Elimination/
UnallocatedAmountFinancialservices

All other

Sales revenues
Revenues from external customers . . . . . 28,531,993
Inter-segment revenues and transfers . . .
73,7452,306,079
17,947541,436
588,441—
31,379,507(680,133)—

Total . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . . . . . . . . .

28,605,738
26,321,448

2,324,026
1,667,025

1,129,876
1,087,575(680,133) 31,379,507(692,237) 28,383,811

Operating income . . . . . . . . . . . . . . . . . . . . . .

2,284,290

657,001

42,302

12,104

2,995,697

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments accounted for using the equity
method . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . .
Capital expenditures . . . . . . . . . . . . . . . . . . . .

24,341,737

31,681,472

3,091,011

8,574,551

67,688,771

4,354,085
1,026,834
1,422,429

79,414
761,801
2,156,339

258,750
33,24551,200145,646—(18,381)

4,837,895
1,821,880
3,611,587

Inter-segment
Elimination/
UnallocatedAmountConsolidated

Automotive

Consolidated

As of and for the year ended March 31, 2023
Yen in millions

Financialservices

All other

Sales revenues
Revenues from external customers . . . . . 33,776,870
Inter-segment revenues and transfers . . .
43,1312,786,679
22,968590,749
634,194—
37,154,298(700,293)—

Total . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . . . . . . . . .

33,820,000
31,639,363

2,809,647
2,372,131

1,224,943
1,121,492(700,293) 37,154,298(703,713) 34,429,273

Operating income . . . . . . . . . . . . . . . . . . . . . .

2,180,637

437,516

103,451

3,420

2,725,025

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments accounted for using the equity
method . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . .
Capital expenditures . . . . . . . . . . . . . . . . . . . .

26,321,858

35,525,441

2,946,994

9,508,887

74,303,180

4,717,231
1,205,687
1,688,114

92,903
799,156
1,786,373

272,752
35,062
38,748144,460—(17,015)

5,227,345
2,039,904
3,496,219

Automotive

Accounting policies applied by each segment is in conformity with those of Toyota’s consolidated financial
statements. Transfers between industry segments are made in accordance with terms and conditions in theordinary course of business.
Unallocated amounts included in assets represent assets held for corporate purpose, which mainly consist of
cash and cash equivalents and financial assets measured at fair value through other comprehensive income, andthe balances as of March 31, 2021, 2022 and 2023 are ¥11,344,879 million, ¥10,020,460 million and¥11,101,175 million, respectively.

F-25

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(3) Consolidated Financial Statements on Non-Financial Services Businesses and Financial Services
Business
The financial data below presents separately Toyota’s non-financial services and financial services
businesses.
(i) Consolidated Statement of Financial Position on Non-Financial Services Businesses and Financial
Services BusinessYen in millions
March 31, 2022 March 31, 2023

Assets(Non-Financial Services Businesses)
Current assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade accounts and other receivable . . . . . . . . . . . . . . . . . . . . . . . . .
Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,299,522
3,184,782
2,028,649
3,821,356
746,134

5,548,398
3,594,057
849,779
4,255,614
749,078

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,080,444

14,996,926

Non-current assets
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,302,017
15,769,015

7,729,000
17,337,727

Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23,071,032

25,066,727

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

37,151,476

40,063,653(Financial Services Business)
Current assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade accounts and other receivable . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables related to financial services . . . . . . . . . . . . . . . . . . . . .
Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,814,133
206,588
7,181,327
1,058,620
221,738

1,968,568
286,960
8,279,806
1,680,242
362,660

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,482,407

12,578,237

Non-current assets
Receivables related to financial services . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,583,130
5,024,625
1,591,311

16,491,045
4,904,975
1,551,183

Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21,199,065

22,947,204

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31,681,472

35,525,441(Elimination)
Elimination of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,144,177)(1,285,914)

67,688,771

74,303,180(Consolidated)
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Note: Assets in non-financial services include unallocated corporate assets.
F-26

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions
March 31, 2022 March 31, 2023

Liabilities(Non-Financial Services Businesses)
Current liabilities
Trade accounts and other payables . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term and current portion of long-term debt . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,023,857
1,041,557
1,421,194
695,8882,778,172

4,689,034
1,170,114
1,446,697
361,000
3,266,095

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,960,668

10,932,939

Non-current liabilities
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retirement benefit liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,538,884
1,004,558
1,830,146

1,553,622
1,047,430
1,867,028

Total non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,373,588

4,468,080

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,334,256

15,401,019(Financial Services Business)
Current liabilities
Trade accounts and other payables . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term and current portion of long-term debt . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

477,550
10,576,910
124,088
130,927
1,414,606

547,511
11,583,602
128,994
43,607
1,841,562

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,724,080

14,145,275

Non-current liabilities
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retirement benefit liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13,882,650
18,190722,257

15,627,943
18,0781,135,862

Total non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,623,097

16,781,883

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27,347,177

30,927,158(Elimination)
Elimination of liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,147,482)(1,289,211)

40,533,951

45,038,967(Consolidated) Total Toyota Motor Corporation shareholders’ equity . . . . . .

26,245,969

28,338,706(Consolidated) Non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

908,851925,507(Consolidated) Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27,154,820

29,264,213(Consolidated) Total liabilities and shareholders’ equity . . . . . . . . . . . . . . . . .

67,688,771

74,303,180(Consolidated)
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shareholders’ equity

F-27

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(ii) Consolidated Statement of Income on Non-Financial Services Businesses and Financial Services
Business
Yen in millions
For the year ended For the year ended For the year ended
March 31, 2021
March 31, 2022
March 31, 2023

(Non-Financial Services Businesses)
Sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative . . . . . . . . . . . . . . . . .

25,103,190
21,199,915
2,206,205

29,104,564
24,250,860
2,518,182

34,409,011
29,132,715
2,990,316

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,697,070

2,335,522

2,285,980

Other income (loss), net . . . . . . . . . . . . . . . . . . . . . . . . . .

742,785

998,001

943,777

Income before income taxes . . . . . . . . . . . . . . . . . . . . . .

2,439,855

3,333,522

3,229,757

Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

528,413944,594

1,040,864

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,911,442

2,388,928

2,188,893

Net income attributable to
Toyota Motor Corporation . . . . . . . . . . . . . . . . . . . .
Non-controlling interests . . . . . . . . . . . . . . . . . . . . .

1,875,467
35,9752,369,399
19,5292,152,509
36,384(Financial Services Business)
Sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative . . . . . . . . . . . . . . . . .

2,162,237
1,202,277
464,368

2,324,026
1,178,509
488,5172,809,647
1,741,117
631,014

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

495,593

657,001

437,516

Other income (loss), net . . . . . . . . . . . . . . . . . . . . . . . . . .

(3,090)16(5,013)

Income before income taxes . . . . . . . . . . . . . . . . . . . . . .

492,503

657,017432,503

Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

121,536

171,327

134,903

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

370,967

485,690297,600

Net income attributable to
Toyota Motor Corporation . . . . . . . . . . . . . . . . . . . .
Non-controlling interests . . . . . . . . . . . . . . . . . . . . .

369,824
1,143

480,716
4,974

292,334
5,266(Elimination)
Elimination of net income . . . . . . . . . . . . . . . . . . . . . . . .
(Consolidated)

(30)

(4)

6,475

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,282,378

2,874,614

2,492,967

Net income attributable to
Toyota Motor Corporation . . . . . . . . . . . . . . . . . . . .
Non-controlling interests . . . . . . . . . . . . . . . . . . . . .

2,245,261
37,1182,850,110
24,5042,451,318
41,650F-28

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(iii) Consolidated Statement of Cash Flows on Non-Financial Services Businesses and Financial Services
Business
Yen in millions
For the year ended For the year ended For the year ended
March 31, 2021
March 31, 2022
March 31, 2023

(Non-Financial Services Businesses)
Cash flows from operating activities
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . .
Share of profit (loss) of investments accounted for using
the equity method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities, and other . . . .
Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes paid, net of refunds . . . . . . . . . . . . . . . . . . . .

1,911,442
928,533

2,388,928
1,060,079

2,188,893
1,240,749(345,374)
528,413(262,407)
123,606
290,618(35,371)(505,260)(552,515)
944,594(572,082)
100,118
342,646(40,780)(544,887)(633,324)
1,040,864
463,871
234,945454,752(28,206)(1,280,341)

2,634,200

3,126,101

3,682,203(1,203,662)(142,217)(1,186,900)(151,456)(1,439,724)(147,792)

38,57546,461(271,274)(2,511,346)

36,21945,183(335,436)(1,904,588)

54,572
44,195(333,295)(503,977)

1,982,302(1,339,372)

1,989,345
1,856,069

892,814
236,351(3,400,534)

348,436(1,196,856)

213,716
1,662,593(170,373)(164,899)
513,371(1,818,653)

142,688474,535(637,982)(625,514)(34,840)
199,884—(709,872)(49,629)(404,718)—(727,980)(79,782)(431,099)
21,458Net cash provided by (used in) financing activities . . . . . .

1,245,465(2,634,401)(1,238,161)

Effect of exchange rate changes on cash and cash
equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

112,588

185,237

1,690

Net increase (decrease) in cash and cash equivalents . . . . . . . . .

591,719

1,025,373

1,248,876

Cash and cash equivalents at beginning of year . . . . . . . . . . . . .

2,682,431

3,274,149

4,299,522

Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . .

3,274,149

4,299,522

5,548,398

Net cash provided by (used in) operating activities . . . . . .
Cash flows from investing activities
Additions to fixed assets excluding equipment leased toothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions to equipment leased to others . . . . . . . . . . . . . . .
Proceeds from sales of fixed assets excluding equipment
leased to others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of equipment leased to others . . . . . .
Additions to intangible assets . . . . . . . . . . . . . . . . . . . . . . .
Additions to public and corporate bonds and stocks . . . . .
Proceeds from sales of public and corporate bonds andstocks and upon maturity of public and corporate
bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) investing activities . . . . . .
Cash flows from financing activities
Increase (decrease) in short-term debt . . . . . . . . . . . . . . . .
Proceeds from long-term debt . . . . . . . . . . . . . . . . . . . . . .
Payments of long-term debt . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to Toyota Motor Corporation commonshareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to non-controlling interests . . . . . . . . . . . .
Reissuance (repurchase) of treasury stock . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-29

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions
For the year ended For the year ended For the year ended
March 31, 2021
March 31, 2022
March 31, 2023

(Financial Services Business)
Cash flows from operating activities
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . .
Interest income and interest costs related to financial
services, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share of profit (loss) of investments accounted for using
the equity method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities, and other . . . .
Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes paid, net of refunds . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) operating activities . . . . . .

370,967
715,757

485,690
761,801

297,600
799,156(241,016)(360,837)(703,971)(5,655)
121,536(780,798)
661,272
3,901(431,939)(304,856)(7,831)
171,327(623,051)
742,364
4,740(384,006)(264,876)(9,739)134,903(1,958,779)
1,291,100
5,599(574,650)(16,883)

109,168

525,321(735,664)(10,240)(2,133,378)(10,366)(2,135,437)(10,472)(1,759,564)

1,967
1,325,238(7,173)(217,825)

1,530
1,496,949(10,650)(523,323)

1,865
1,614,965(14,985)(646,237)

79,616(35,893)

213,291
113,635

440,915(30,385)

Net cash provided by (used in) investing activities . . . . . .

(997,688)(854,370)(403,898)

Cash flows from financing activities
Increase (decrease) in short-term debt . . . . . . . . . . . . . . . .
Proceeds from long-term debt . . . . . . . . . . . . . . . . . . . . . .
Payments of long-term debt . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to non-controlling interests . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,517,259)
8,043,141(5,332,573)(1,757)—(488,495)
7,800,854(7,142,750)(2,094)—

171,293
8,892,261(7,868,820)(5,204)
2,853

Net cash provided by (used in) financing activities . . . . . .

1,191,551

167,516

1,192,382

Effect of exchange rate changes on cash and cash
equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

107,657

148,958

101,615

Cash flows from investing activities
Additions to fixed assets excluding equipment leased toothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions to equipment leased to others . . . . . . . . . . . . . . .
Proceeds from sales of fixed assets excluding equipment
leased to others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of equipment leased to others . . . . . .
Additions to intangible assets . . . . . . . . . . . . . . . . . . . . . . .
Additions to public and corporate bonds and stocks . . . . .
Proceeds from sales of public and corporate bonds andstocks and upon maturity of public and corporate
bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net increase (decrease) in cash and cash equivalents . . . . . . . . .

410,688(12,575)

154,436

Cash and cash equivalents at beginning of year . . . . . . . . . . . . .

1,416,020

1,826,707

1,814,133

Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . .

1,826,707

1,814,133

1,968,568(Consolidated)
Effect of exchange rate changes on cash and cash
equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

220,245

334,195

103,305

Net increase (decrease) in cash and cash equivalents . . . . . . . . .

1,002,406

1,012,798

1,403,311

Cash and cash equivalents at beginning of year . . . . . . . . . . . . .

4,098,450

5,100,857

6,113,655

Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . .

5,100,857

6,113,655

7,516,966

F-30

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(4) Geographic information
As of and for the year ended March 31, 2021
Yen in millions

Japan

North
America

Europe

Asia

Other

Inter-segment
Elimination/
UnallocatedAmountConsolidated

Sales revenues
Revenues from externalcustomers . . . . . . . . . . . 8,587,193 9,325,950 2,968,289 4,555,897 1,777,266
Inter-segment revenues
and transfers . . . . . . . . . 6,361,739
165,853 166,200 489,398
95,630(7,278,820)

Total . . . . . . . . . . . . . 14,948,931 9,491,803 3,134,489 5,045,295 1,872,895
Operating expenses . . . . . . . . . 13,799,715 9,090,442 3,026,518 4,609,354 1,813,048(7,278,820)27,214,594(7,322,232)25,016,845

Operating income . . . . . . . . . . 1,149,217

401,361

107,971435,940— 27,214,594—

59,84743,413 2,197,748

Total assets . . . . . . . . . . . . . . . 19,674,666 20,138,715 5,074,409 6,548,343 3,469,635
Non-current assets . . . . . . . . . . 5,232,862 5,705,770 751,245 896,542 461,723

7,361,372 62,267,140— 13,048,143

As of and for the year ended March 31, 2022
Yen in millions

Japan

North
America

Europe

Asia

Other

Inter-segment
Elimination/
UnallocatedAmountConsolidated

Sales revenues
Revenues from externalcustomers . . . . . . . . . . . 8,214,740 10,897,946 3,692,214 5,778,115 2,796,493
Inter-segment revenues
and transfers . . . . . . . . . 7,776,696
268,534 175,633 752,452 131,690(9,105,004)

Total . . . . . . . . . . . . . 15,991,436 11,166,479 3,867,847 6,530,566 2,928,183
Operating expenses . . . . . . . . . 14,567,991 10,600,695 3,704,874 5,858,216 2,690,014(9,105,004)31,379,507(9,037,980)28,383,811

Operating income . . . . . . . . . . 1,423,445

565,784

162,973—

238,169(67,024) 2,995,697

Total assets . . . . . . . . . . . . . . . 21,502,155 23,353,812 5,711,271 7,461,812 4,309,248
Non-current assets . . . . . . . . . . 5,501,046 6,251,499 891,146 977,235 537,631

5,350,474 67,688,771— 14,158,559

F-31

672,350— 31,379,507

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As of and for the year ended March 31, 2023
Yen in millions

Japan

North
America

EuropeAsia

Inter-segment
Elimination/
UnallocatedAmountConsolidated

Other

Sales revenues
Revenues from externalcustomers . . . . . . . . . . . 9,122,282 13,509,027 4,097,537 7,076,922 3,348,530— 37,154,298
Inter-segment revenues
and transfers . . . . . . . . 8,460,914
334,874 176,198 967,984 123,663 (10,063,633)—
Total . . . . . . . . . . . . 17,583,196 13,843,901 4,273,735 8,044,906 3,472,193 (10,063,633) 37,154,298
Operating expenses . . . . . . . . . 15,681,733 13,918,637 4,216,276 7,330,455 3,240,832 (9,958,659) 34,429,273
Operating income (loss) . . . . . 1,901,463(74,736)

57,460714,451

231,362(104,974) 2,725,025

Total assets . . . . . . . . . . . . . . . 23,241,334 26,024,734 6,813,474 7,908,520 4,726,373
Non-current assets . . . . . . . . . . 5,658,859 6,255,561 1,042,726 1,031,057 565,377

5,588,745 74,303,180— 14,553,580“Other” consists of Central and South America, Oceania, Africa and the Middle East.
Non-current assets do not include financial instruments, deferred tax assets, net defined benefit assets andrights arising under insurance contracts.
The above amounts are aggregated by region based on the location of the country where TMC orconsolidated subsidiaries are located. Transfers between geographic areas are made in accordance with terms andconditions in the ordinary course of business.
Unallocated amounts included in assets represent assets held for corporate purpose, which mainly consist of
cash and cash equivalents and financial assets measured at fair value through other comprehensive income, andthe balances as March 31, 2021, 2022 and 2023 are ¥11,344,879 million, ¥10,020,460 million and¥11,101,175 million, respectively.
(5) Sales revenues by location of external customers
In addition to the disclosure requirements under IFRS, Toyota discloses this information in order to provide
financial statements users with valuable information.
Yen in millions
For the years ended March 31,
2021
2022
2023

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,820,590
9,437,314
2,734,152
5,057,397
3,165,141

6,425,184
10,953,472
3,495,785
6,017,646
4,487,420

6,742,304
13,578,084
3,970,857
7,150,555
5,712,497

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27,214,594

31,379,507

37,154,298“Other” consists of Central and South America, Oceania, Africa and the Middle East, etc.
F-32

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
6. Cash and cash equivalents
Cash and cash equivalents consist of the following:
Yen in millions
March 31,
2022
2023

Cash and deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Negotiable certificate of deposit and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,630,882
1,482,773

5,948,297
1,568,669

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,113,655

7,516,966

7. Trade accounts and other receivables
Trade accounts and other receivables consist of the following:
Yen in millions
March 31,
2022
2023

Accounts and notes receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,466,398
716,558(40,124)

2,757,412
870,398(41,679)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,142,832

3,586,130

Trade accounts and other receivables which are unconditional rights to considerations are classified as
financial assets measured at amortized cost. Receivables from contracts with customers correspond to “Accounts
and notes receivables” and the balance as of April 1, 2021 is ¥2,301,976 million.
The changes in the allowance for doubtful accounts consist of the following:
Yen in millions
For the years ended March 31,
2022
2023

Allowance for doubtful accounts at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for doubtful accounts, net of reversal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Write-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

97,378
10,649(1,239)4,005

110,793
8,844(3,496)
5,487

Allowance for doubtful accounts at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

110,793

121,628“Other” includes currency translation adjustments.
A portion of the allowance for doubtful accounts is attributed to certain non-current receivable balances
which are reported as other financial assets under non-current assets.

F-33

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
8. Finance receivables
Finance receivables consist of the following:
Yen in millions
March 31,
2022
2023

Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and other dealer loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,647,440
2,347,941
2,904,216

20,201,004
2,503,369
3,461,421

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22,899,597

26,165,794

Deferred origination costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Unearned income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Allowance for credit losses
Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and other dealer loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

328,792
359,743(1,172,007) (1,418,272)(230,104)(36,985)(24,836)(274,871)(36,920)(24,622)

Total finance receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21,764,457

24,770,851

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,181,327
14,583,130

8,279,806
16,491,045

Total finance receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21,764,457

24,770,851

Finance receivables were geographically distributed as follows: in North America 55.0%, in Europe 13.3%,
in Asia 12.9%, in Japan 7.3% and in Other 11.5% as of March 31, 2022, and in North America 56.9%, in Europe
14.0%, in Asia 12.0%, in Japan 6.3% and in Other 10.8% as of March 31, 2023.
Finance receivables are classified as financial assets measured at amortized cost.
The contractual maturity of retail receivables, future lease payments to be received for finance leases, thecontractual maturity of wholesale receivables and other dealer loans are as follows:

Retail

Yen in millions
March 31, 2022
Wholesale and other
Finance leases
dealer loans

Within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 1 and 2 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 2 and 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 3 and 4 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 4 and 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Later than 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,276,853
3,988,650
3,338,910
2,546,568
1,487,397
1,009,062

639,493482,368
367,680
198,789
68,092
14,6801,640,995
319,847
240,727
161,717
133,286
407,643

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,647,440

1,771,102

2,904,216

F-34

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Retail

Yen in millions
March 31, 2023
Wholesale and other
Finance leases
dealer loans

Within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 1 and 2 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 2 and 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 3 and 4 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 4 and 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Later than 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,822,035
4,599,678
3,930,516
3,013,894
1,737,460
1,097,422

736,347
534,414402,625
196,046
64,676
13,5402,101,711
402,642
266,593
142,888
145,964
401,622

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20,201,004

1,947,649

3,461,421

Finance leases receivables consist of the following:
Yen in millions
March 31,
2022
2023

Lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Estimated unguaranteed residual values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,771,102
576,839

1,947,649
555,720

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,347,941

2,503,369

Deferred origination costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Unearned income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Allowance for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,807(190,954)(36,985)

18,587(224,761)(36,920)

Finance leases receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,135,809

2,260,275

F-35

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
9. Other financial assets
Other financial assets consist of the following:
Yen in millions
March 31,
2022
2023

Financial assets measured at amortized cost
Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial assets measured at fair value through profit or loss
Public and corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial assets measured at fair value through other comprehensive income
Public and corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

505,695
680,199

206,494
766,455

159,186
149,890
419,173
465,801

193,816
168,214610,340
496,052

6,302,719
3,332,209
9,644

6,409,119
3,413,780
7,838

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,024,515

12,272,107

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,507,248
9,517,267

1,715,675
10,556,431

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,024,515

12,272,107

Toyota has certain financial instruments, including financial assets and liabilities which arose in the normal
course of business. These financial instruments are executed with creditworthy financial institutions, andvirtually all foreign currency contracts are denominated in U.S. dollars, euros and other currencies of major
developed countries. Financial instruments involve, to varying degrees, market risk as instruments are subject toprice fluctuations, and elements of credit risk in the event a counterparty should default. In the unlikely event thecounterparties fail to meet the contractual terms of a foreign currency or an interest rate instrument, Toyota’s risk
is limited to the fair value of the instrument. Although Toyota may be exposed to losses in the event of
non-performance by counterparties on financial instruments, it does not anticipate significant losses due to thenature of its counterparties. Counterparties to Toyota’s financial instruments represent, in general, international
financial institutions. Additionally, Toyota does not have a significant exposure to any individual counterparty.
Toyota believes that the overall credit risk related to its financial instruments is not significant.
Public and corporate bonds included in financial assets measured at fair value through other comprehensive
income include securities loaned of ¥2,198,396 million and ¥2,192,934 million as of March 31, 2022 and 2023,
respectively.

F-36

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Major securities included in stocks measured at fair value through other comprehensive income as ofMarch 31, 2022 and 2023 are as follows:
Yen in millions
March 31,
2022
2023

Issue

KDDI CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NIPPON TELEGRAPH AND TELEPHONE CORPORATION . . . . . . . . . . . . . . . . . .
MS&AD Insurance Group Holdings, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
HO TAI MOTOR CO., LTD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Renesas Electronics Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,268,762
286,385
209,318
142,002
107,423

1,296,639
320,073
216,053
156,014
143,543

To facilitate the efficient and effective utilization of assets, Toyota derecognizes stocks measured at fairvalue through other comprehensive income by way of sale. Fair value and total accumulated othercomprehensive income at derecognition are as follows:
Yen in millions
For the years ended
March 31,
2022
2023

Total fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

66,90627,861

69,02835,124

10. Inventories
Inventories consist of the following:
Yen in millions
March 31,
2022
2023

Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Work in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplies and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,012,243
547,810
1,107,558
153,7452,317,143
530,915
1,239,535
168,021

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,821,356

4,255,614

11. Investments accounted for using the equity method
Equity in associates and joint ventures is as follows:
Yen in millions
March 31,
2022
2023

Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,926,267
911,628

4,169,573
1,057,773

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,837,895

5,227,345

F-37

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The combined information of investments accounted for using the equity method (total value of TMC’s
interests) is as follows:
Yen in millions
For the years ended March 31,
2021
2022
2023

Net income
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

190,998
160,031324,480
235,866

326,931316,132

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

351,029

560,346

643,063

Other comprehensive income, net of tax
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

50,14338,501

241,264
66,187

99,737
3,295

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

88,644

307,451

103,033

Comprehensive income
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

241,141
198,532

565,744
302,053426,669
319,428

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

439,673

867,798

746,096

12. Property, plant and equipment
The changes in cost and accumulated depreciation and impairment losses are as follows:(Cost)Land

Buildings

Yen in millions
Vehicles andMachinery and equipment on Construction
equipment operating leases in progress

Balance as of April 1, 2021 . . . . . . . . 1,345,037 4,999,206 12,753,951
Additions . . . . . . . . . . . . . . . . . .
Sales or disposal . . . . . . . . . . . .
Reclassification fromconstruction in progress . . . .
Foreign currency translation
adjustments . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . .

Total

6,203,721

675,875

25,977,791
3,502,541(2,945,187)

9,106(8,901)88,543(57,743)

481,916 2,293,189(540,775) (2,334,129)

629,786(3,639)2,310

105,581

630,896449(739,235)—

15,008(769)

138,047
10,985642,984
13,390594,933
23,06530,756(28,014)

1,421,728
18,657

Balance as of March 31, 2022 . . . . . . 1,361,791 5,284,620 13,982,362

6,781,229

565,528

27,975,530
3,374,566(3,221,137)

Additions . . . . . . . . . . . . . . . . . .
Sales or disposal . . . . . . . . . . . .
Reclassification fromconstruction in progress . . . .
Foreign currency translation
adjustments . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . .

14,990(14,680)

75,098(76,482)

433,393 1,916,239(599,825) (2,516,466)

934,847(13,684)

50,494

88,625

480,805167(620,091)—

10,4583,317

67,27425,676437,649
62,235524,175
69,083

13,503(33,236)

1,053,058
127,075

Balance as of March 31, 2023 . . . . . . 1,426,370 5,464,811 14,796,619

6,774,427

846,866

29,309,093

F-38

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(Accumulated depreciation and impairment losses)

Land

Balance as of April 1, 2021 . . . . . . . .
Depreciation . . . . . . . . . . . . . . .
Impairment losses . . . . . . . . . . .
Sales or disposal . . . . . . . . . . . .
Foreign currency translation
adjustments . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . .
Balance as of March 31, 2022 . . . . . .
Depreciation . . . . . . . . . . . . . . .
Impairment losses . . . . . . . . . . .
Sales or disposal . . . . . . . . . . . .
Foreign currency translation
adjustments . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . .
Balance as of March 31, 2023 . . . . . .

Buildings

Yen in millions
Vehicles andMachinery and equipment on Construction
equipment operating leases in progress(4,497) (3,189,737) (10,005,275) (1,366,916)

Total(213) (14,566,638)——30(121,431)(2,527)
48,646(788,685)(5,177)507,396(817,171)—
799,186———(1,727,287)(7,705)
1,355,259(351)(1,562)(79,026)(31,522)(461,159)(10,054)(115,693)(3,073)(24)(55)(656,252)(46,266)(6,379) (3,375,598) (10,762,953) (1,503,668)(292) (15,648,890)—(148,981)(393) (10,517)
150
63,448(921,037)(17,358)
559,467(856,921)—
860,708—(2,846)—(1,926,939)(31,114)1,483,773

(178)
(513)

(334,617)(53,167)(96,936)(8,928)(2)(71)(471,526)(80,423)(39,793)(17,746)(7,313) (3,529,186) (11,529,666) (1,605,744)(3,210) (16,675,119)Depreciation on “Property, plant and equipment” is included in “Cost of products sold” and “Selling,
general and administrative” in the consolidated statement of income.
Vehicles and equipment on operating leases consist of the following:
Yen in millions
March 31,
2022
2023

Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,766,590
14,639Less - Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,781,229 6,774,427(1,503,668) (1,605,744)

Vehicles and equipment on operating leases, net . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-39

5,277,561

6,759,024
15,403

5,168,683

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents future lease payments to be received for vehicles and equipments on operatingleases:Yen in millions
March 31,
2022
2023

Within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 1 and 2 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 2 and 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 3 and 4 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 4 and 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Later than 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

932,882641,683
280,646
75,915
21,772
9,801

885,757
497,218
216,22759,00421,022
10,484

Total future rentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,962,699

1,689,712

The future lease payments to be received as shown above should not be considered indicative of future cash
collections.
13. Right of use assets and lease liabilities
The breakdown of right of use assets is as follows:
Yen in millions
March 31,
2022
2023

Types of original assets
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

67,927
305,533
74,95264,717
333,698
92,953

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

448,412491,368

The increase in the right of use assets for the years ended on March 31, 2022 and 2023 were¥110,996 million and ¥116,298 million, respectively.
The breakdown of main gains and losses on lessee’s leases is as follows:
Yen in millions
March 31,
2022
2023

Depreciation of right of use assets
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,660
56,262
26,2935,217
42,40836,566

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

91,21484,191

Interest expense on lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,074
90,568

5,429
97,025

185,856

186,645

F-40

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the years ended March 31, 2022 and 2023, the total cash outflows for lessee leases were¥149,521 million and ¥172,112 million, respectively.
The following is the maturity analysis of the total future lease payments and the adjustment to the present
value:
Yen in millions
March 31,
2022
2023

Within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 1 and 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Later than 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

61,735
146,452
258,474

74,780179,026
254,096

Future lease payment, total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

466,661(45,733)

507,902(51,781)

Present value of lease payment, total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

420,928

456,120

Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

56,136364,792

66,870389,250

Present value of lease payment, total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

420,928

456,120

14. Intangible assets
The carrying value of intangible assets is as follows:
Yen in millions
March 31,
2022
2023

Capitalized development costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Software and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

663,762528,204

669,612579,510

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,191,966

1,249,122

F-41

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The changes in cost and accumulated amortization of intangible assets are as follows:(Cost)
Yen in millions
Capitalized
development costs

Software and other

Total

Balance as of April 1, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,104,142

727,874

1,832,016

Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Internally developed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales or disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—200,512(163,419)——

41,616
86,342(60,981)
25,333
7,048

41,616
286,853(224,400)
25,333
7,048

Balance as of March 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,141,234

827,232

1,968,466

Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Internally developed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales or disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—181,634(164,898)
1,465—

40,65598,040(38,473)
20,886
17,05640,655
279,674(203,372)
22,351
17,056

Balance as of March 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,159,435

965,395

2,124,830(Accumulated amortization)
Yen in millions
Capitalized
development costs

Software and other

Total

Balance as of April 1, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(472,966)(250,417)(723,382)

Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales or disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(167,926)
163,419——(94,593)
60,375(13,570)(823)(262,518)
223,794(13,570)(823)

Balance as of March 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . .

(477,472)(299,028)(776,500)

Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales or disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(164,512)
152,161——(112,965)
37,901(10,533)(1,261)(277,477)
190,062(10,533)(1,261)

Balance as of March 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . .

(489,823)(385,886)(875,708)

Amortization of intangible assets is included in “Cost of products sold” and “Selling, general andadministrative” in the consolidated statement of income. There is no material internally generated intangible
assets except for capitalized development costs.

F-42

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
15. Income taxes(1) Deferred tax assets and liabilities
Significant components of deferred tax assets and liabilities are as follows:
Yen in millions
March 31,
2022
2023

Deferred tax assets
Defined benefit plan liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and liabilities for quality assurance . . . . . . . . . . . . . . . . . . . . .
Other accrued employees’ compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating loss carryforwards for tax purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for doubtful accounts and credit losses . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

141,186
613,101
128,461
64,74085,289210,238
491,167

120,007662,425
127,668
191,906
94,639252,441
463,250

Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,734,181

1,912,336

Deferred tax liabilities
Changes in fair value of financial instruments measured in other comprehensive
income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Undistributed earnings of foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Undistributed earnings of associates and joint ventures . . . . . . . . . . . . . . . . . . . . .
Basis difference of acquired assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized development costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(725,242)(737,156)(51,888)(39,496)(1,026,027) (1,076,742)(63,189)(78,206)(204,741)(201,120)(468,894)(972,158)(206,791)(222,378)

Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2,746,773) (3,327,255)

Net deferred tax assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,012,592) (1,414,919)

F-43

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Of the changes in deferred tax assets and deferred tax liabilities for the years ended March 31, 2021, 2022
and 2023, the amount recognized as income tax expense in the consolidated statement of income is as follows:
Yen in millions
For the years ended March 31,
2021
2022
2023

Defined benefit plan liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and liabilities for quality assurance . . . . . . . . . . . . .
Other accrued employees’ compensation . . . . . . . . . . . . . . . . . . . . . . .
Operating loss carryforwards for tax purposes . . . . . . . . . . . . . . . . . . .
Allowance for doubtful accounts and credit losses . . . . . . . . . . . . . . . .
Property, plant and equipment and other assets . . . . . . . . . . . . . . . . . .
Undistributed earnings of foreign subsidiaries . . . . . . . . . . . . . . . . . . .
Undistributed earnings of associates and joint ventures . . . . . . . . . . . .
Basis difference of acquired assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized development costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,473(18,256)
3,125
1,265
6,042
4,468
6,144
47,840(18,302)(1,762)
209,972
23,104

4,203(40,761)(968)
38,119(4,902)(9,795)(33,349)(71,405)(11,270)(9,708)103,098
111,603802
26,942(2,745)
116,3444,474
24,85012,391(63,520)(12,075)
4,003(487,702)
44,144

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

276,11374,864(332,091)

The deductible temporary differences, unused tax losses, and unused tax credits for which no deferred tax
asset is recognized in the statement of financial position:
Yen in millions
March 31,
2022
2023

Deductible temporary difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Carryforwards of tax losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Carryforwards of tax credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

709,204
518,385
46,306

968,060
712,357
115,809

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,273,894

1,796,225

The expected expiration date of the carryforwards of tax losses for which deferred tax assets are notrecognized are as follows:
Yen in millions
March 31,
2022
2023

Within 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 5 and 10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Later than 10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,049
136,666
377,670

75,839313,895
322,623

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

518,385

712,357

F-44

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The expected expiration date of the carryforwards of tax credit for which deferred tax assets are notrecognized are as follows:
Yen in millions
March 31,
2022
2023

Within 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 5 and 10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Later than 10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,654
9,865
27,787

10,018
18,107
87,684

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

46,306

115,809

Of the temporary differences in investments in foreign subsidiaries, because management intends to reinvest
undistributed earnings of foreign subsidiaries to the extent not expected to be remitted in the foreseeable future,
no deferred tax liability is recognized. As of March 31, 2022 and 2023, the temporary differences totaled¥4,799,506 million and ¥4,367,250 million, respectively, and Toyota estimates an additional deferred tax liabilityof ¥203,229 million and ¥202,488 million would be required, respectively, if the full amount of those
undistributed earnings were remitted.
(2) Income tax expenses
The income tax expense for the years ended March 31, 2021, 2022 and 2023 consists of the following:
Yen in millions
For the years ended March 31,
2021
2022
2023

Current income tax expense:
TMC and domestic subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

403,230
522,859

672,077
518,705

758,772
84,902

Total current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

926,089

1,190,782

843,674

Deferred income tax expense (benefit):
TMC and domestic subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(23,792)(252,321)

42,131(116,995)

27,783
304,308

Total deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(276,113)(74,864)

332,091

Total income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

649,976

1,115,918

1,175,765

F-45

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Toyota is subject to a number of different income taxes which, in the aggregate, indicate a statutory rate inJapan of approximately 30.9% for the years ended March 31, 2021, 2022 and 2023. The statutory tax rates in
effect for the year in which the temporary differences are expected to reverse are used to calculate the tax effects
of temporary differences which are expected to reverse in future years. Reconciliation of the differences between
the statutory tax rate and the average effective tax rate is as follows:
For the years ended March 31,
2021
2022
2023

Statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (reduction) in taxes resulting from:
Non-deductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax-exempt income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities on undistributed earnings of foreignsubsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effects of investments accounted for using the equity method . . . . . . . .
Deferred tax liabilities on undistributed earnings of associates and joint
ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in unrecognized deferred tax assets . . . . . . . . . . . . . . . . . . . . . .
Tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The difference between the statutory tax rate in Japan and that offoreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrecognized tax benefits adjustments . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30.9%

30.9%

30.9%

0.5
(0.4)

0.6
(0.3)

0.8
(0.4)

0.6
(3.7)

1.3
(4.3)

1.1
(5.4)

(0.2)
0.7
(3.2)

2.6
3.7
(2.7)

3.1
6.3
(3.5)

(3.5)
(0.2)
0.6

(3.1)
(0.3)
(0.3)

(1.5)
0.4
0.3

Average effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22.2%

28.0%

32.0%

16. Trade accounts and other payables
Trade accounts and other payables consists of the following:
Yen in millions
March 31,
2022
2023

Accounts and notes payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,168,084
1,124,008

3,819,334
1,166,974

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,292,092

4,986,309

Trade accounts and other payables are classified as financial liabilities measured at amortized cost.

F-46

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
17. Financial liabilities(1) Financial liabilities
Financial liabilities consist of the following:
Yen in millions
Non-cash changes
Changesin foreign
currency
As ofexchange
Changes
April 1, 2021 Cash flow Acquisitions Reclassification
rates
in fair value

Current liabilities
Short-term debt . . . . . . . . . . . . . .
Current portion of long-term
debt . . . . . . . . . . . . . . . . . . . . .
Current portion of long-termlease liabilities . . . . . . . . . . . . .
Class share . . . . . . . . . . . . . . . . . .

4,339,890

Other

As of
March 31, 2022

(579,216)——

334,639—9,544

4,104,858

7,584,337 (8,548,156)—

7,410,991

572,070—

7,604

7,026,845(54,879)(240,630)——

34,071
—

2,192
—

—
—

27,632(83)

56,136—

Current liabilities . . . . . . . . . 12,212,060 (9,422,881)—

7,445,062

908,902—44,697

11,187,839

47,120240,712

Non-current liabilities
Long-term debt . . . . . . . . . . . . . . 13,133,804
Long-term lease liabilities . . . . . .
313,771Class share . . . . . . . . . . . . . . . . . .
—8,122,678———
110,996—(7,410,991) 1,095,463(34,071)
14,203—————

2,773 14,943,727(40,107)364,792——

Non-current liabilities . . . . . 13,447,575

8,122,678

110,996(7,445,062) 1,109,666—(37,334) 15,308,519

Total . . . . . . . . . . . . . . . . . . 25,659,635 (1,300,203) 110,996
Derivatives . . . . . . . . . . . . . . . . . . . . .

—2,018,568

—

7,363

26,496,358—

689

15,348—

7,221

Changesin foreign
currency
As ofexchange
Changes
April 1, 2022 Cash flow Acquisitions Reclassification
rates
in fair value

Other

As of
March 31, 2023

3,211

(12,026)—

Yen in millions
Non-cash changes

Current liabilities
Short-term debt . . . . . . . . . . . . . .
Current portion of long-term
debt . . . . . . . . . . . . . . . . . . . . .
Current portion of long-termlease liabilities . . . . . . . . . . . . .
Class share . . . . . . . . . . . . . . . . . .

4,104,858

239,689——

231,700—

13,926

4,590,173

7,026,845 (8,283,375)—

8,380,467

467,956—

56,704

7,648,596(69,658)———

39,311
—

1,424
—

—
—

39,657—

66,870—Current liabilities . . . . . . . . . 11,187,839 (8,113,344)—

8,419,778

701,080—

110,286

12,305,639

836,348
9,277
—

—
—
—

8,858 16,685,384(61,807)389,250——

845,626—(52,949) 17,074,634

1,546,706—

57,337

29,380,273—(62,359)

56,136—

Non-current liabilities
Long-term debt . . . . . . . . . . . . . . 14,943,727
Long-term lease liabilities . . . . . .
364,792
Class share . . . . . . . . . . . . . . . . . .
—9,276,918———
116,298—(8,380,467)(39,311)—

Non-current liabilities . . . . . 15,308,519

9,276,918

116,298(8,419,778)

Total . . . . . . . . . . . . . . . . . . 26,496,358

1,163,574

116,298—

77,098——Derivatives . . . . . . . . . . . . . . . . . . . . .

7,221(5,202) (141,475)

Short-term and long-term debt is classified as financial liabilities measured at amortized cost.

F-47

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(2) Short-term debt
The breakdown of “Short-term debt” is as follows:
Yen in millions
March 31,
2022
2023

Short-term debt
(Principally from bank)[Weighted average interest rate
2022
1.64%
2023
2.02%] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial paper[Weighted average interest rate
2022
0.38%
2023
3.81%] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

852,301

916,725

3,252,556

3,673,447

4,104,858

4,590,173(3) Long-term debt
The breakdown of “Long-term debt” is as follows:
Yen in millions
March 31,
2022
2023

Unsecured loans(Principally from bank)[2022
Weighted average interest 1.83%
Due 2022 to 2042
2023
Weighted average interest 3.18%
Due 2023 to 2042] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Secured loans(Principally financial receivables securitization)[2022
Weighted average interest 1.02%
Due 2022 to 2034
2023
Weighted average interest 3.82%
Due 2023 to 2034] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Medium-term notes of consolidated subsidiaries[2022
Weighted average interest 1.45%
Due 2022 to 2048

F-48

4,990,165

5,719,366

3,902,766

5,266,411

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions
March 31,
2022
2023

2023
Weighted average interest 2.72%
Due 2023 to 2048] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unsecured bonds of the parent[2022
Weighted average interest 1.32%
Due 2022 to 2037
2023
Weighted average interest 1.29%
Due 2023 to 2037] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unsecured bonds of consolidated subsidiaries[2022
Weighted average interest 1.99%
Due 2022 to 2028
2023
Weighted average interest 2.54%
Due 2023 to 2028] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Secured bonds of consolidated subsidiaries[2022
Weighted average interest 5.81%
Due 2022 to 2024
2023
Weighted average interest 6.53%
Due 2023 to 2026] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Current portion due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,257,689

10,561,816

1,123,145

1,127,650

1,664,634

1,621,444

32,17437,294

21,970,573(7,026,845)

24,333,981(7,648,596)

14,943,727

16,685,384

As of March 31, 2022 and 2023, the currencies of long-term debt are 52% and 53% in US dollars, 11% and
11% in Japanese yen, 13% and 13% in Euros, 6% and 6% in Australian dollars, 4% and 3% in Canadian dollars,
14% and 14% in other currencies.
(4) Assets pledges as collateral
The breakdown of assets pledged as collateral mainly for loans of consolidated subsidiaries is as follows:
Yen in millions
March 31,
2022
2023

Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,474,647
3,582,826

1,498,448
5,459,877

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,057,473

6,958,325

Other assets principally consist of securitized finance receivables.
F-49

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Standard agreements with certain banks include provisions that collateral (including sums on deposit withsuch banks) or guarantees will be furnished upon the banks’ request and that any collateral furnished, pursuant tosuch agreements or otherwise, will be applicable to all present or future indebtedness to such banks.
(5) Interest expenses
The interest expenses for the fiscal year ended March 31, 2022 and 2023 are ¥410,197 million and¥651,979 million, respectively. Interest expenses related to the financial business is included in “cost of financial
services” in the consolidated statement of income.
(6) Class shares
TMC issued First Series Model AA Class Shares (the “Model AA Class Shares”) on July 24, 2015.
Presented below is additional information regarding the Model AA Class Shares:
Total number of shares issued:

47,100,000 shares

Issue price:

10,598 yen per share

Purchase price:

10,121.09 yen per share

Voting rights:

Model AA Class Shares shall have voting rights. The number of sharesconstituting one unit with respect to Model AA Class Shares shall be 100.

Restrictions on transfer:

Model AA Class Shares shall have restrictions on transfer.

Dividends:(1) If the record date falls in the fiscal year ending on March 31, 2016 :
0.5% of the issue price(2) If the record date falls in the fiscal year ending on March 31, 2017
through March 31, 2020 : the annual dividend rate for the previous
fiscal year plus 0.5% of the issue price(3) If the record date falls in the fiscal year ending on March 31, 2021 orlater : 2.5% of the issue price

Shareholder’s right:(1) Shareholder’s conversion right into Common Shares
Shareholders of the Model AA Class Shares may demand TMC toacquire all or a part of their Model AA Class Shares in exchange for
Common Shares on the first business day of April and October ofevery year, starting October 1, 2020.
(2) Shareholder’s cash put option
Shareholders of the Model AA Class Shares may demand TMC toacquire all or a part of their Model AA Class Shares in exchange forcash on the last business day of March, June, September andDecember of each year, starting on September 1, 2020.

TMC’s right:

TMC may acquire, on or after April 2, 2021, all of the outstanding ModelAA Class Shares in exchange for cash. At the Directors’ Meeting held on
December 14, 2020, TMC has resolved to exercise its cash call option toacquire all outstanding Model AA Class Shares and, subject to suchacquisition, to cancel all Model AA Class Shares pursuant to Article 178of the Companies Act of Japan. The acquisition took place on April 2,
2021, and the cancellation was completed on April 3, 2021.
F-50

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
18. Other financial liabilities
Other financial liabilities consist of the following:
Yen in millions
March 31,
2022
2023

Financial liabilities measured at amortized cost
Deposits received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial liabilities measured at fair value through profit or loss
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

723,363 1,015,094
287,072
454,756
497,198456,257

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,507,633

1,926,107

Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,046,050
461,583

1,392,397
533,710

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,507,633

1,926,107

19. Financial risks(1) Financial risk management policy
Toyota is exposed to various risks such as credit risk, liquidity risk, market risk (foreign currency risk,interest rate risk, commodity price fluctuation risk and stock price fluctuation risk). To hedge the market risk,
Toyota also uses derivative financial instruments such as forward exchange contracts, interest rate swaps,
commodity forwards transactions. With respect to the execution and management of derivative transactions, itfollows the company regulations that set out transaction authority, and it is a policy not to conduct speculativetransactions using derivative financial instruments.
In addition, Toyota procures necessary funds (mainly bank borrowings and issuing corporate bonds) basedon the capital expenditure plans, and temporary surplus funds are managed with highly safe financial assets andshort-term working capital is procured through bank borrowings and commercial paper. As for liquidity risk
concerning fund procurement, each company manages it by preparing a monthly cash flow plan, etc.
(2) Credit risk
Receivables related to financial services are exposed to the credit risk. The risk is arisen from the failure ofcustomers or dealers to meet the terms of their contracts with Toyota or otherwise fail to perform as agreed.
Toyota manages its credit risk by defining risk management methods and management systems for specific risks
in accordance with the regulations on risk management. Based on such regulations, Toyota mitigates the credit
risk through periodical monitoring of the customer’s credit status and undertaking the maturity control andaccount balance control, while detecting promptly any doubtful accounts caused by deterioration in the financial
conditions.
Please see Note 3 “Allowance for credit losses on finance receivables” about measuring method of the
expected credit losses on receivables related to financial services.

F-51

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The carrying amount after impairment of the financial assets presented in the consolidated financial
statements, as well as guarantee obligations and loan commitments that are set forth in the notes to theconsolidated financial statements, are the maximum exposure to the credit risk of Toyota’s financial assets that
do not take into account the value of the acquired collateral. The allowance for credit exposures of loan
commitments and financial agreements is measured in the same way that the allowance for retail receivables ismeasured.
Retail receivables and financial lease receivables are being secured by vehicles as collateral. Wholesalereceivables and other dealer loans are secured by placing appropriate property as collateral. Also, during thereporting period, there is no change in the policy regarding collateral.
The net changes in the allowance for credit losses relating to the retail receivables are as follows:
Yen in millions
For the year ended March 31, 2022
Lifetime expected credit loss
Expected credit
Financial
Credit-impaired
loss forreceivable notfinancial
12 months
credit-impaired
receivable

Total

Allowance for credit loss at beginning of year . . . .
Provision for credit loss, net of reversal . . . . . . . . .
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

79,402
22,685—(13,961)

78,42639,420—(18,381)

40,376
38,687(41,331)
4,781

198,204
100,792(41,331)(27,561)

Allowance for credit loss at end of year . . . . . . . . .

88,125

99,46542,514230,104

Yen in millions
For the year ended March 31, 2023
Lifetime expected credit loss
Expected credit
Financial
Credit-impaired
loss forreceivable notfinancial
12 months
credit-impaired
receivable

Total

Allowance for credit loss at beginning of year . . . .
Provision for credit loss, net of reversal . . . . . . . . .
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

88,12526,490—(18,895)

99,46559,627—(34,225)

42,51489,456(91,215)
13,530230,104
175,573(91,215)(39,591)

Allowance for credit loss at end of year . . . . . . . . .

95,720124,867

54,284

274,871“Other” primarily includes reversal of allowance for credit loss due to the collection of retail receivables.

F-52

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The table below shows the retail receivables segregated into aging categories based on the numbers of thedays outstanding:

Expected credit
loss for12 months

Yen in millions
March 31, 2022
Lifetime expected credit loss
Financial
Credit-impaired
receivable notfinancialcredit-impaired
receivable

Total

Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Past due less than 90 days . . . . . . . . . . . . . . . . . . . .
Past due 90 days or more . . . . . . . . . . . . . . . . . . . . .

15,753,211
283,753—

1,083,642
405,941779—
17,655
102,457

16,836,854
707,350
103,236

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,036,965

1,490,363

120,112

17,647,440

Expected credit
loss for12 months

Yen in millions
March 31, 2023
Lifetime expected credit loss
Financial
Credit-impaired
receivable notfinancialcredit-impaired
receivable

Total

Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Past due less than 90 days . . . . . . . . . . . . . . . . . . . .
Past due 90 days or more . . . . . . . . . . . . . . . . . . . . .

17,905,331
331,040—

1,275,170
542,999416—
21,469124,580

19,180,501
895,509
124,995

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18,236,371

1,818,584

146,049

20,201,004

The net changes in the allowance for credit losses relating to the finance lease receivables are as follows:
Yen in millions
For the years ended March 31,
2022
2023

Allowance for credit loss at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for credit loss, net of reversal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33,455
11,107(3,712)(3,865)36,985
14,926(7,233)(7,757)

Allowance for credit loss at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36,98536,920“Other” primarily includes reversal of allowance for credit loss due to the collection of finance leasereceivables.

F-53

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The table below shows the finance lease receivables segregated into aging categories based on the numbersof the days outstanding:
Yen in millions
March 31,
2022
2023

Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Past due less than 90 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Past due 90 days or more . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,279,97847,03420,9282,437,467
46,296
19,606

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,347,941

2,503,369

The table below shows the net movement of the allowance for credit losses on wholesale receivables andother dealer loans.
Yen in millions
For the year ended March 31, 2022
Lifetime expected credit loss
Expected credit
Financial
Credit-impaired
loss forreceivable notfinancial
12 months
credit-impaired
receivable

Total

Allowance for credit loss at beginning of year . . . .
Provision for credit loss, net of reversal . . . . . . . . .
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,467
5,198—(8,317)

7,241
1,566
—
(3,715)

4,935
1,177
(11)
(705)

29,642
7,941(11)(12,736)

Allowance for credit loss at end of year . . . . . . . . .

14,349

5,092

5,396

24,836

Yen in millions
For the year ended March 31, 2023
Expected credit loss for the entire
periodExpected credit
Financial
Credit-impaired
loss forreceivable notfinancial
12 months
credit-impaired
receivable

Total

Allowance for credit loss at beginning of year . . . .
Provision for credit loss, net of reversal . . . . . . . . .
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,3493,517—(3,225)

5,092
1,780
—
(2,289)

5,396
551
—
(547)

24,836
5,847—(6,062)

Allowance for credit loss at end of year . . . . . . . . .

14,640

4,582

5,399

24,622“Other” primarily includes reversal of allowance for credit loss due to the collection of wholesalereceivables and other dealer loans.
Toyota charges off the credit - impaired finance receivables when Toyota considers that all or part of it will
not be collected. The amount of receivables related to financial services which has been charged off but subject
to ongoing collection activity was not significant for the years ended March 31, 2022 and 2023.

F-54

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The balances of the wholesale receivables and other dealer loan receivables portfolios by credit status, aswell as loan commitments and financial guarantee contracts, as of March 31, 2022 and 2023 are as follows.
The wholesale and other dealer loan receivables portfolio segment is segregated into following
creditqualities below based on internal risk assessments by dealers.
Performing: Account not classified as either
Credit Watch, At Risk or DefaultCredit Watch: Account designated for elevated attention
At Risk: Account where there is an increased likelihood that default may exist based on qualitative andquantitative factors
Default: Account is not currently meeting contractual obligations, or we have temporarily waived certain
contractual requirements

Expected credit
loss for12 months

Yen in millions
March 31, 2022
Lifetime expected credit loss
Financial
Credit-impaired
receivable notfinancialcredit-impaired
receivable

Total

Wholesale and other dealer loan
Performing . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit Watch . . . . . . . . . . . . . . . . . . . . . . . . . .
At Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loan commitments . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial guarantee contracts . . . . . . . . . . . . . . . . . .

2,730,860
20,842——
10,050,817
3,574,257—
97,35332,299—69,39339,205——699
22,16290—

2,730,860
118,196
32,99822,162
10,120,300
3,613,461

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,376,776

238,251

22,952

16,637,978

Expected credit
loss for12 months

Yen in millions
March 31, 2023
Lifetime expected credit loss
Financial
Credit-impaired
receivable notfinancialcredit-impaired
receivable

Total

Wholesale and other dealer loan
Performing . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit Watch . . . . . . . . . . . . . . . . . . . . . . . . . .
At Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loan commitments . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial guarantee contracts . . . . . . . . . . . . . . . . . .

3,300,629
47,184——
10,704,882
3,536,796—
69,08629,780—65,05337,260

—
—
6,708
8,034
572
—

3,300,629
116,270
36,487
8,034
10,770,507
3,574,056

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,589,491

201,179

15,31417,805,983

F-55

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2022 and 2023, the amount of finance receivables the terms of which weremodified due to deterioration in credit conditions was not significant for any portfolio of finance receivables, andthe amount of payment defaults on finance receivables so modified were not significant for any portfolio of suchreceivables.
(3) Liquidity risk
To secure cash on hand necessary for carrying out the operation, Toyota appropriately borrows from thefinancial institutions and issues corporate bonds or commercial paper, and there is a risk of failing to execute thepayment on due date because of deterioration of fund procurement environment etc.,.
Toyota manages liquidity risk by monitoring the fund demand of each group company as appropriate,
preparing a monthly-based funding plan, and comparing it with the daily cash flow. In addition to holding
sufficient cash and cash equivalents in order to secure the liquidity and stability of funds, to prepare for
emergency situations such as the sudden fund demand and market liquidity deterioration, a commitment line has
been set up.
The amounts of non-derivative financial liabilities and derivative financial liabilities by a remaining contract
maturity period are as follows:
As of March 31, 2022
Yen in millions

Book value

Maturities
Contractual
Between 1 and Between 3 and Later thancash flows Within 1 year
3 years
5 years
5 years

Non-derivative financial liabilities
Short-term debt . . . . . . . . . . . . . . . .
852,301(865,873)
Commercial paper . . . . . . . . . . . . . . 3,252,556 (3,260,578)
Current portion of long-term debt . . 7,026,845 (7,238,356)
Long-term debt . . . . . . . . . . . . . . . . 14,943,727 (15,458,478)
Lease liabilities . . . . . . . . . . . . . . . .
420,928(466,661)(865,873)(3,260,578)(7,238,356)—(61,735)———(9,194,302)(85,791)

—
—
—
—
—
—
(4,501,420) (1,762,756)(60,661)(258,474)

Total . . . . . . . . . . . . . . . . . 26,496,358 (27,289,948) (11,426,543)(9,280,094)(4,562,081) (2,021,230)

Derivative financial liabilities
Interest derivative . . . . . . . . . . . . . .
Currency derivative
In . . . . . . . . . . . . . . . . . . . . . . .
Out . . . . . . . . . . . . . . . . . . . . . .

325,912(346,482)(56,824)(112,352)(110,592)(66,715)—
171,286

958,208(1,164,801)

358,275(475,869)

83,552(94,949)

379,916(420,302)

136,465(173,682)

497,198(553,075)(174,417)(123,748)(150,978)(103,932)

Total . . . . . . . . . . . . . 26,993,557 (27,843,023) (11,600,961)(9,403,841)

Total . . . . . . . . . . . . . . . . .

F-56(4,713,059) (2,125,162)

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As of March 31, 2023
Yen in millions

Book value

Maturities
Contractual
Between 1 and Between 3 and Later thancash flows Within 1 year
3 years
5 years
5 years

Non-derivative financial liabilities
Short-term debt . . . . . . . . . . . . . . . .
916,725(941,708)
Commercial paper . . . . . . . . . . . . . . 3,673,447 (3,765,973)
Current portion of long-term debt . . 7,648,596 (8,067,346)
Long-term debt . . . . . . . . . . . . . . . . 16,685,384 (17,762,084)
Lease liabilities . . . . . . . . . . . . . . . .
456,120(507,902)(941,708)—(3,765,973)—(8,067,346)——(10,527,952)(74,780)(102,258)

—
—
—
—
—
—
(5,609,531) (1,624,601)(76,769)(254,096)

Total . . . . . . . . . . . . . . . . . 29,380,273 (31,045,012) (12,849,807) (10,630,210)(5,686,300) (1,878,696)

Derivative financial liabilities
Interest derivative . . . . . . . . . . . . . .
Currency derivative
In . . . . . . . . . . . . . . . . . . . . . . .
Out . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . .

296,438(315,269)(41,958)(155,214)(109,599)(8,498)—
159,819

835,459(1,017,589)

58,806(90,525)

187,514(220,701)

589,139(706,363)——

456,257(497,400)(73,678)(188,401)(226,823)(8,498)

Total . . . . . . . . . . . . . 29,836,530 (31,542,412) (12,923,485) (10,818,611)(5,913,123) (1,887,194)

Toyota has unused short-term lines of credit amounting to ¥2,534,291 million and ¥2,715,437 million ofwhich ¥1,056,931 million and ¥1,153,342 million related to commercial paper programs as of March 31, 2022
and 2023, respectively. Under these programs, Toyota is authorized to obtain short-term financing at prevailinginterest rates for periods not in excess of 360 days.
As of March 31, 2022 and 2023, Toyota has unused long-term lines of credit amounting to¥9,030,322 million and ¥9,461,614 million, respectively.
(4) Foreign exchange risk
Toyota is subject to the foreign currency exposure through transactions in foreign currencies related topurchase, sale and finance associated with conducting business worldwide. Toyota is exposed to fluctuations
risks related to future profitability or assets and liabilities regarding operating cash flow denominated in foreign
currencies and various financial instruments. The most significant foreign currency exposure is primarily causedby the U.S. dollar and the euro.
Toyota uses derivative financial instruments including foreign exchange forward contracts, foreign currency
options, interest rate currency swap agreements, and others, to manage the exposure to foreign currency
exchange rate fluctuations.

F-57

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Toyota uses Value-at-risk analysis measurement (“VaR”) to assess the risk of exchange rate fluctuation.
Potential impact of pre-tax cash flows on VaR-integrated foreign currency positions (including derivatives) for
the years ended March 31, 2022 and 2023 is as follows:

For the year ended March 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
For the year ended March 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year-end

Yen in millions
VaR
Average
Maximum

Minimum

257,600
381,600

241,825
393,175

214,800
369,800

263,600
418,900

The Monte Carlo simulation method is used for Toyota’s VaR measurement, and measurement is based on a
95% confidence interval and a ten-day holding period.
(5) Interest rate risk
In preceding with business activities, Toyota is exposed to interest rate risk due to fluctuation in market
interest rates as it procures and invests funds necessary for working capital and capital investment. To maintain adesirable level of exposure related to interest rate fluctuation risk and minimize interest expense, Toyota
conducts various financial instruments transactions.
Sensitivity analysis of Toyota’s interest rate risk associated with holding financial instruments if the interest
rate increases by 1% is as follows. In this analysis, all other variables are assumed to be constant.
Yen in millions
For the years ended March 31,
2022
2023

Impact on income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact on other comprehensive income, before tax effect . . . . . . . . . . . . . . . . . . . . .

(64,533)(243,630)(42,476)(238,820)(6) Market price fluctuation risk
Toyota is exposed to risks arising from increased costs due to commodity price fluctuations, such as ironand steel, precious metals and non-ferrous alloys used in the manufacture of automobiles. Toyota controls theprice risk associated with the purchase of those commodities by maintaining inventory at the minimum level.
Toyota is exposed to stock price fluctuation risk because it owns shares of companies that have business
relationships mainly for promoting smooth business activities. Toyota periodically reviews the fair values andfinancial situations of the business partner companies and, taking into consideration the relationship with them,continually reviews the holding status. The impact on other comprehensive income, before tax effect when the
declared price of equity financial assets (shares) in active markets changes by 10% for the year ended March 31,
2022, and 2023 is ¥316,281 million and ¥321,472 million, respectively.
20. Derivative financial instruments(1) Undesignated derivative financial instruments
Toyota uses foreign exchange forward contracts, foreign currency options, interest rate swaps, interest ratecurrency swap agreements, and interest rate options, to manage its exposure to foreign currency exchange rate
fluctuations and interest rate fluctuations from an economic perspective, and Toyota is unable to or has elected
not to apply hedge accounting. Toyota does not use derivatives for speculation or trading.
F-58

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(2) Fair value and gain and losses of derivatives
The fair values of the derivatives as of March 31, 2022 and 2023 are as follows:
Yen in millions
March 31,
2022
2023

Derivative assets
Derivative financial instruments not designated as hedging instruments:
Interest rate and currency swap
Current assets- Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current assets- Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

69,625

163,777

333,683

404,593

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

403,309568,371

Foreign exchange forward and option contracts
Current assets- Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current assets- Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,86541,969——Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,86541,969Total derivative assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

419,173

610,340

Yen in millions
March 31,
2022
2023

Derivative financial liabilities
Derivative financial instruments not designated as hedging instruments:
Interest rate and currency swap
Current liabilities- Other financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current liabilities- Other financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(87,926)(47,044)(326,177)(383,184)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(414,102)(430,228)

Foreign exchange forward and option contracts
Current liabilities- Other financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current liabilities- Other financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(83,096)(26,029)——

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(83,096)(26,029)

Total derivative liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(497,198)(456,257)

F-59

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The amount of underlying notional of derivatives as of March 31, 2022 and 2023 are as follows:
Yen in millions
March 31,
2022
2023

Derivative financial instruments not designated as hedging instruments:
Interest rate and currency swap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange forward and option contracts . . . . . . . . . . . . . . . . . . . . . . . . . . .

21,510,803
2,976,488

25,999,796
3,176,566

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,487,291

29,176,362

Undesignated derivative financial instruments are used to manage economic risks of fluctuations in foreign
currency exchange rates and interest rates of certain receivables and payables. Those economic risks are offset bychanges in the fair value of undesignated derivative financial instruments.
The gain (loss) on derivative transactions as of March 31, 2021, 2022 and 2023 were ¥588 million,¥773 million and ¥(129,782) million, respectively. The amounts are included in cost of financial services andforeign exchange gain (loss), net.
Cash flows from transactions of derivative financial instruments are included in cash flows from operating
activities in the consolidated statement of cash flows.
(3) Credit risk related contingent features
Toyota enters into International Swaps and Derivatives Association Master Agreements with counterparties.
These Master Agreements contain a provision requiring either Toyota or the counterparty to settle the contract or
to post assets to the other party in the event of a ratings downgrade below a specified threshold.
The aggregate fair value amount of derivative financial instruments that contain credit risk related
contingent features that are in a net liability position after being offset by cash collateral as of March 31, 2022
and 2023 is ¥36,190 million and ¥12,623 million, respectively. The aggregate fair value amount of assets that are
already posted as cash collateral as of March 31, 2022 and 2023 is ¥99,718 million and ¥111,249 million,
respectively. If the ratings of Toyota decline below specified thresholds, the maximum amount of assets to beposted or for which Toyota could be required to settle the contracts is ¥12,623 million as of March 31, 2023. See
Note 22 for details.
21. Fair value measurements(1) Definition of fair value hierarchy
In accordance with IFRS, Toyota classifies fair value measurement into the following three levels based on
the observability and significance of the inputs used.
Level 1:

Quoted prices in active markets for identical assets or liabilities

Level 2:

Fair value measurement based on inputs other than quoted prices included within Level 1 thatare observable for the assets or liabilities, either directly or indirectly

Level 3:

Fair value measurement based on models using unobservable inputs for the assets or liabilities

F-60

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(2) Method of fair value measurement
The fair value of assets and liabilities is determined using relevant market information and appropriate
valuation methods.
The methods and assumptions for measuring the fair value of assets and liabilities are as follows:(i) Cash and cash equivalents Cash equivalents include money market funds and other investments with original maturities of threemonths or less. In the normal course of business, substantially all cash and cash equivalents and time deposits arehighly liquid and are carried at amounts which approximate fair value due to their short duration.
(ii) Trade accounts and other receivables and Trade accounts and other payables These receivables and payables are carried at amounts which approximate fair value due to their shortduration.
(iii) Receivables related to financial services The fair value of receivables related to financial services is estimated by discounting expected cash flows topresent value using internal assumptions, including prepayment speeds, expected credit losses and collateralvalue.
As unobservable inputs are utilized, the fair value of receivables related to financial services is classified as
Level 3.
(iv) Other financial assets (Public and corporate bonds)
Public and corporate bonds include government bonds. Japanese bonds and foreign bonds, including U.S.,
European and other bonds, represent 26% and 74% (as of March 31, 2022) and 30% and 70% (as of March 31,2023) of public and corporate bonds, respectively. Toyota primarily uses quoted market prices for identical assets
to measure the fair value of these securities.
(Stocks)
Listed stocks on the Japanese stock markets represent 85% (as of March 31, 2022) and 86% (as ofMarch 31, 2023) of stocks that Toyota holds. Toyota primarily uses quoted market prices for identical assets tomeasure fair value of these securities. Therefore, stocks with an active market are classified as Level 1.
Fair value of stocks with no active market is measured by using the market approach or other appropriate
methods. Therefore, stocks with no active market are thus classified as Level 3.
Price book-value ratios (“PBR”) of comparable companies, discount ratios of discounted cash flow
valuation method and others are the significant unobservable inputs relating to the fair value measurement ofstocks classified as Level 3. The fair value increases (decreases) as PBR of a comparable company rises(declines) or the discount rate declines (rises). The estimated increase or decrease in fair value of stocks if theunobservable inputs were to be replaced by other reasonable alternative assumptions are not significant.
F-61

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
These estimates are based on valuation methods that are considered appropriate in each case. The significant
assumptions involved in the estimations include the financial condition and future prospects and trends of theinvestees and the outcome of the referenced transactions. Due to the uncertain nature of these assumptions or byusing different assumptions and estimates, the fair value may be impacted materially.
The shares classified as Level 3 are measured by the responsible department using quarterly available
information in accordance with Toyota’s consolidated financial accounting policies and reported to thesupervisors along with the basis of the change in fair value.
(v) Derivative financial instruments Toyota employs derivative financial instruments, including foreign exchange forward contracts, foreign
currency options, interest rate swaps, interest rate currency swap agreements and interest rate options to manage
its exposure to fluctuations in interest rates and foreign currency exchange rates. Toyota primarily estimates thefair value of derivative financial instruments using industry-standard valuation models that require observable
inputs including interest rates and foreign exchange rates, and the contractual terms. The usage of these models
does not require significant judgment to be applied. These derivative financial instruments are classified as
Level 2. In other certain cases when market data are not available, key inputs to the fair value measurement
include quotes from counterparties, and other market data. Toyota assesses the reasonableness of changes of thequotes using observable market data. These derivative financial instruments are classified as Level 3. Toyota’s
derivative fair value measurements consider assumptions about counterparty and Toyota’s own non-performancerisk, using such as credit default probabilities.
(vi) Short-term and long-term debt The fair values of short-term and long-term debt including the current portion, except for secured loans
provided by securitization transactions using special-purpose entities (“Loans Based on Securitization”), areestimated based on the discounted amounts of future cash flows using Toyota’s current borrowing rates for
similar liabilities. As these inputs are observable, the fair value of these debts is classified as Level 2.
The fair values of the Loans Based on Securitization are primarily estimated based on current market rates
and credit spreads for debt with similar maturities. Internal assumptions including prepayment speeds andexpected credit losses are used to estimate the timing of cash flows to be paid on the underlying securitized
assets. In cases where these valuations utilize unobservable inputs, the fair value of the Loans Based on
Securitization is classified as Level 3.

F-62

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(3) Financial instrument measured at fair value on recurring basis
The following table summarizes the fair values of the assets and liabilities measured at fair value on arecurring basis. Transfers between levels of the fair value are recognized at the date of the event or change incircumstances that caused the transfer:Level 1

Yen in millions
March 31, 2022
Level 2
Level 3

Total

Other financial assets:
Financial assets measured at fair value through profit or loss
Public and corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

61,376——
307,446

96,136—419,173
158,355

1,674
149,890——

159,186
149,890
419,173
465,801

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

368,822673,665

151,563

1,194,051

Financial assets measured at fair value through other comprehensive
incomePublic and corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,542,949
3,162,805
9,505

2,739,591—
139

20,178
169,404—

6,302,719
3,332,209
9,644

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,715,259

2,739,730

189,583

9,644,571

Other financial liabilities:
Financial liabilities measured at fair value through profit or loss
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—(497,198)—(497,198)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—(497,198)—(497,198)

Level 1

Yen in millions
March 31, 2023
Level 2
Level 3

Total

Other financial assets:
Financial assets measured at fair value through profit or loss
Public and corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

98,458——334,071

88,989—610,340
161,981

6,369
168,214——

193,816
168,214610,340
496,052

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

432,529

861,310

174,583

1,468,422

Financial assets measured at fair value through other comprehensive
incomePublic and corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,976,333
3,214,720
7,838

2,405,823——

26,963
199,060—

6,409,119
3,413,780
7,838

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,198,891

2,405,823

226,023

9,830,736

Other financial liabilities:
Financial liabilities measured at fair value through profit or loss
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—(456,257)—(456,257)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—(456,257)—(456,257)

F-63

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(4) Changes in financial instruments classified as Level 3 and measured at fair value on recurring basis
The following table summarizes the changes in Level 3 assets and liabilities measured at fair value on arecurring basis for the years ended March 31, 2022 and 2023:
Yen in millions
For the year ended March 31, 2022
Public and corporate
Derivative financial
bonds
Stocksinstruments

Balance at beginning of year . . . . . . . . . . . . . . . . . .
Total gains (losses)
Net income (loss) . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) . . . . . . . .
Purchases and issuances . . . . . . . . . . . . . . . . . . . . .
Sales and settlements . . . . . . . . . . . . . . . . . . . . . . .
Transfer to (from) Level 3 . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27,623

Total

638,917—666,540(44) 113,053
—
9,219
968
2,362
(4,020) (18,208)(7,067) (512,465)
4,392
86,415

—
—
—
—
—
—

113,0099,219
3,330(22,228)(519,532)
90,807

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . .

21,852319,294—

341,146

Unrealized gains or losses included in profit orloss on assets held at March 31 . . . . . . . . . . . . . .

(250)

113,053—

112,803

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(250)

113,053—

112,803

Yen in millions
For the year ended March 31, 2023
Public and corporate
Derivative financial
bonds
Stocksinstruments

Total

Balance at beginning of year . . . . . . . . . . . . . . . . . .
Total gains (losses)
Net income (loss) . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) . . . . . . . .
Purchases and issuances . . . . . . . . . . . . . . . . . . . . .
Sales and settlements . . . . . . . . . . . . . . . . . . . . . . .
Transfer to (from) Level 3 . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21,852319,294—

341,146(71)——(3,716)
5,471
9,795

9,551
(10,881)
15,999(14,055)(1,639)49,004

—
—
—
—
—
—

9,481
(10,881)
15,999(17,771)
3,832
58,800

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . .

33,332367,274—

400,606

Unrealized gains or losses included in profit orloss on assets held at March 31 . . . . . . . . . . . . . .

(63)

9,551

—

9,489

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(63)

9,551

—

9,489

Net income (loss) in public and corporate bonds, stocks and derivative financial instruments, other thantransactions related to financial services, are each included in “Other finance income” and “Other finance costs”
in the accompanying consolidated statement of income. Transactions related to financial services are included ineach of “Sales revenues—Financial services” and “Cost of financial services” in the consolidated statement ofincome.
In the reconciliation table above, derivative financial instruments are presented as net of assets andliabilities.
F-64

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)“Others” includes foreign currency translation adjustments for the year ended March 31, 2022 and 2023.
Transfer to (from) Level 3 of stocks recognized in the year ended March 31, 2022 is due to the listing ofinvestees.
(5) Financial assets and liabilities measured at amortized cost
The following table summarizes the carrying amount and the fair value of financial assets and liabilities
measured on an amortized cost basis:
Yen in millions
March 31, 2022
Fair value

Receivables related to financial services . . . . .
Interest-bearing liabilities
Long-term debt (Including current
portion) . . . . . . . . . . . . . . . . . . . . . . . .

Carrying amount

Level 1

21,764,457—

21,970,573—

Level 2

Level 3

Total—

22,074,593

22,074,593

17,899,087

3,824,531

21,723,618

Yen in millions
March 31, 2023
Fair value

Receivables related to financial services . . . . .
Interest-bearing liabilities
Long-term debt (Including current
portion) . . . . . . . . . . . . . . . . . . . . . . . .

Carrying amount

Level 1

24,770,851—

24,333,981—

Level 2

Level 3

Total—

24,741,916

24,741,916

18,598,205

5,149,410

23,747,616

Of financial assets and liabilities that are measured on an amortized cost basis, those with carrying values
that approximate fair value are excluded from the table above.
22. Offsetting Financial Assets and Liabilities
The following table summarizes the amounts of financial assets and financial liabilities that are subject to an
enforceable master netting agreement or similar agreement but not set off because they do not meet some or allof the offsetting criteria for financial assets and financial liabilities. With respect to financial instruments that
may be offset in the future based on set-off rights associated with master netting agreements or similar
agreements, as well as the associated collateral, the set-off will be enforceable only when certain circumstances,such as when the counterparty cannot perform on its obligations due to bankruptcy or other reasons, arise.
Yen in millions
March 31, 2022
Gross amounts ofrecognizedfinancial assets
and financial
liabilities

Other financial assets Derivatives . . . . . . . . . . . . . . . . . . .
Other financial liabilities Derivatives . . . . . . . . . . . . . . . .
F-65

419,173
497,198

Amounts not offset
Collateral of
Financialfinancial
instruments instruments

Net amount(182,288)(182,288)

131,685
203,627(105,201)(111,283)

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions
March 31, 2023
Gross amounts ofrecognizedfinancial assets
and financial
liabilities

Other financial assets Derivatives . . . . . . . . . . . . . . . . . . .
Other financial liabilities Derivatives . . . . . . . . . . . . . . . .

610,340456,257

Amounts not offset
Collateral of
Financialfinancial
instruments instruments

Net amount(196,423)(196,423)

207,830
162,040(206,087)(97,794)

The amounts offset, as presented in the consolidated statement of financial position, in accordance with thecriteria for offsetting financial assets and financial liabilities were immaterial.
23. Employee benefits(1) Overview of post-employment benefit Plans
Upon terminations of employment, employees of TMC and subsidiaries in Japan are entitled, under theretirement plans of each company, to lump-sum indemnities or pension payments, based on current rates of pay
and lengths of service or the number of “points” mainly determined by those. Under normal circumstances, theminimum payment prior to retirement age is an amount based on voluntary retirement. Employees receive
additional benefits on involuntary retirement, including retirement at the age limit.
Effective October 1, 2004, TMC amended its retirement plan to introduce a “point” based retirement benefit
plan. Under the new plan, employees are entitled to lump-sum or pension payments determined based on
accumulated “points” vested in each year of service.
There are three types of “points” that vest in each year of service consisting of “service period points” which
are attributed to the length of service, “job title points” which are attributed to the job title of each employee, and“performance points” which are attributed to the annual performance evaluation of each employee. Under normal
circumstances, the minimum payment prior to retirement age is an amount reflecting an adjustment rate applied
to represent voluntary retirement. Employees receive additional benefits upon involuntary retirement, including
retirement at the age limit.
Effective October 1, 2005, TMC partly amended its retirement plan and introduced the quasi cash-balance
plan under which benefits are determined based on the variable-interest crediting rate rather than the fixedinterest crediting rate as was in the pre-amended plan.
TMC and most subsidiaries in Japan have contributory funded defined benefit pension plans, which are
pursuant to the Corporate Defined Benefit Pension Plan Law (CDBPPL). The contributions to the plans are
funded with several financial institutions in accordance with the applicable laws and regulations. These pension
plan assets consist principally of common stocks, government bonds and insurance contracts.
Most foreign subsidiaries have pension plans or severance indemnity plans covering substantially all of theiremployees under which the cost of benefits are currently invested or accrued. The benefits for these plans are
based primarily on lengths of service and current rates of pay.
These post-employment benefit plans are exposed to general investment risk, interest rate risk and inflation
risk.
F-66

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Pension costs and defined benefit obligations are dependent on assumptions used in calculating suchamounts. These assumptions include discount rates, retirement rate, salary increase rate, mortality rates and otherfactors. While management believes that the assumptions used are appropriate, differences in actual experienceor changes in assumptions may affect Toyota’s pension costs and obligations.
The most critical assumption impacting the calculation of pension costs and defined benefit obligations isthe discount rates. Toyota determines the discount rates mainly based on the rates of high quality fixed income
bonds currently available and expected to be available during the period to maturity of the defined benefit
pension plans.
Toyota uses a March 31 measurement date for its post-employment benefit plans.
(2) Defined benefit obligations and plan assets
The changes in present value of defined benefit obligations and fair value of plan assets are as follows:
Yen in millions
For the years ended March 31,
2022
2023
Japanese plans Foreign plans Japanese plans Foreign plans

Present value of defined benefit obligations:Benefit obligations at beginning of year . . . . . . . .
Current service cost . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Remeasurements:
Changes in demographic assumptions . . . . .
Changes in financial assumptions . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Past service cost . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan participants’ contributions . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition and other . . . . . . . . . . . . . . . . . . . . . .

2,089,263
89,12812,487

1,419,910
52,82652,062

2,077,151
87,452
14,816

1,487,644
55,00057,0796,440(46,113)
4,162
761
1,392
(80,368)—

379(126,125)
904
274
3,063
(42,615)
126,966

2,707(120,279)(9,673)(1,419)1,523(87,624)—

30,743(258,990)
18,2483,405
3,575(60,614)87,173

2,077,151

1,487,644

1,964,655

1,423,263

1,806,265
11,261

1,079,543
51,614

1,844,819
13,576

1,224,656
48,38634,54333,163
1,392(41,804)—(6,657)
24,912
3,063(31,823)
104,004(8,619)32,682
1,523(43,397)—(216,474)
16,421
3,575(34,017)
66,849Plan assets at end of year . . . . . . . . . . . . . . . . . . .

1,844,819

1,224,656

1,840,586

1,109,394

Effect of the asset ceiling . . . . . . . . . . . . . . . . . . . . . . .

—

—

—

—

Net defined benefit liability (asset) . . . . . . . . . . . . . . .

232,332

262,988

124,069

313,869

Benefit obligations at end of year . . . . . . . . . . . . .
Fair value of plan assets:
Plan assets at beginning of year . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . .
Remeasurement
Actual return on plan assets, excludinginterest income . . . . . . . . . . . . . . . . . . . . .
Employer contributions . . . . . . . . . . . . . . . . . . . .
Plan participants’ contributions . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition and other . . . . . . . . . . . . . . . . . . . . . .

F-67

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The funded defined benefit obligations and the unfunded defined benefit obligations are as follows:
Yen in millions
March 31,2022
Japanese plans Foreign plans

2023
Japanese plans Foreign plans

Funded defined benefit obligations . . . . . . . . . . . . . . .
Plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,559,686(1,844,819)

1,187,595(1,224,656)

1,466,825(1,840,586)

1,076,433(1,109,394)

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(285,133)(37,061)(373,761)(32,961)

Unfunded defined benefit obligations . . . . . . . . . . . . .

517,465

300,049

497,830

346,830

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

232,332

262,988

124,069

313,869

The net defined benefit liability (asset) recognized in the consolidated statement of financial position arecomprised of the following:
Yen in millions
March 31,2022
Japanese plans Foreign plans

2023
Japanese plans Foreign plans

Retirement benefit liabilities . . . . . . . . . . . . . . . . . . . .
Other non-current assets (Retirement benefit
assets) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

674,425

348,323

642,774

422,734(442,094)(85,335)(518,705)(108,865)

Net amount recognized . . . . . . . . . . . . . . . . . . . . .

232,332

262,988

124,069

313,869(3) The major items of actuarial assumption
The weighted-average discount rates used to determine the present value of defined benefit obligations are
as follows:
March 31,2022
2023
Japanese plans Foreign plans Japanese plans Foreign plans

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0.7%

3.5%

1.1%

5.0%

(4) Fair value of plan assets
Toyota’s policy and objective for plan asset management is to maximize returns on plan assets to meet future
benefit payment requirements under risks which Toyota considers permissible. Asset allocations under the plan
asset management are determined based on plan asset management policies of each plan which are established toachieve the optimized asset compositions in terms of the long-term overall plan asset management. When actual
allocations are not in line with target allocations, Toyota rebalances its investments in accordance with the policies.
Prior to making individual investments, Toyota performs in-depth assessments of corresponding factors including
category of products, industry type, currencies and liquidity of each potential investment under consideration to
mitigate concentrations of risks such as market risk and foreign currency exchange rate risk. To assess performanceof the investments, Toyota establishes bench mark return rates for each individual investment, combines these
individual bench mark rates based on the asset composition ratios within each asset category, and compares the
combined rates with the corresponding actual return rates on each asset category.
F-68

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes the fair value of classes of plan assets.
Yen in millions
March 31, 2022
Japanese plans
Quoted prices in active
markets
Available Not available

Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . 549,385
Government bonds . . . . . . . . . . . . . . . . 112,568
Bonds (other) . . . . . . . . . . . . . . . . . . . . .
—Commingled funds . . . . . . . . . . . . . . . .
—Insurance contracts . . . . . . . . . . . . . . . .
—Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 225,980
Total . . . . . . . . . . . . . . . . . . . . . . .

887,933——
77,048489,471
220,027
170,340
956,886

Foreign plans
Quoted prices in active
markets
Available Not available

Total

549,385 195,067
112,568 132,172
77,048—489,471—
220,027—
396,320
30,442
1,844,819

357,681

Total——
218,433
423,525—
225,016

195,067
132,172
218,433
423,525—
255,459

866,975

1,224,656

Yen in millions
March 31, 2023
Japanese plans
Quoted prices in active
markets
Available Not available

Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . 440,946
Government bonds . . . . . . . . . . . . . . . . 108,570
Bonds (other) . . . . . . . . . . . . . . . . . . . . .
—Commingled funds . . . . . . . . . . . . . . . .
—Insurance contracts . . . . . . . . . . . . . . . .
—Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 295,452
Total . . . . . . . . . . . . . . . . . . . . . . .

844,968—
15
84,234492,915
209,261
209,193995,618

Foreign plans
Quoted prices in active
markets
Available Not available

Total

440,946 177,564
108,585 121,568
84,234—492,915—
209,261—
504,645
14,5201,840,586

313,652

Total——
185,395
394,228—
216,118

177,564
121,568
185,395
394,228—
230,638

795,742

1,109,394“Other” consists of cash equivalents, other private placement investment funds and other assets.
(5) The sensitivity analysis
The following table illustrates the effects on defined benefit obligations of the change in weighted-average
discount rates, assuming all other assumptions are consistent.
Yen in millions
March 31,2022

0.5% decrease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.5% increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2023

Japaneseplans

Foreignplans

Japaneseplans

Foreignplans

172,402(150,226)

127,889(118,899)

153,466(131,275)

237,478(234,242)(6) Impact on future cash flow
Contributions to plan assets by TMC and some of its consolidated subsidiaries are determined by various
factors such as employee salary levels and years of service, funded status of plan assets, and actuarial
F-69

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
calculations. In addition, according to the rules of the defined benefit corporate pension law, the corporate
pension fund system recalculates the amount of the balance every five years with the end date of the reporting
period as the base date so that financial balance can be maintained in the future. TMC and some of its
consolidated subsidiaries may make a necessary contribution if the reserve amount is below the minimum reserveamount.
In the following year (the year ending March 31, 2024), Toyota expects to contribute ¥38,309 million forJapanese plans and ¥16,423 million for Foreign plans to the post-employment benefit plans.
The following pension benefit payments, which reflect expected future service, as appropriate, are expected
to be paid:
Yen in millions
Japanese plans Foreign plans

Years ending March 31,

2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
From 2029 to 2033 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

86,57583,63185,14888,761
93,340441,966

64,89067,621
72,17877,576
83,990479,631

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

879,421845,886(7) Benefit obligations for non-retirement pension for retirees and benefit obligations for absentee
Toyota’s U.S. subsidiaries provide certain health care and life insurance benefits to eligible retired
employees. In addition, Toyota provides benefits to certain former or inactive employees after employment, but
before retirement. These benefits are provided through various insurance companies, health care providers andothers. The costs of these benefits are recognized over the period the employee provides credited service toToyota. Toyota’s obligation under these arrangements are not material.

(8) Payroll expenses
Payroll expenses included in “Cost of products sold” and “Selling, general and administrative” in the
consolidated statement of income (including expenses for post-employment benefit plans) for the years ended
March 31, 2021, 2022 and 2023 are ¥3,281,292 million, ¥3,550,882 million and ¥3,985,518 million, respectively.

24. Liabilities for quality assurance
Toyota provides product warranties for certain defects mainly resulting from manufacturing based on
warranty contracts with its customers at the time of sale of products. Toyota accrues estimated warranty costs to
be incurred in the future in accordance with the warranty contracts. In addition to product warranties, Toyota
initiates recalls and other safety measures to repair or to replace parts which might be expected to fail fromproducts safety perspectives or customer satisfaction standpoints. Toyota accrues for costs of recalls and othersafety measures based on the amount estimated from historical experience.
F-70

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Liabilities for product warranties and liabilities for recalls and other safety measures have been combined
into “Liabilities for quality assurance” in the consolidated statement of financial position due to the fact that bothare liabilities for costs to repair or replace defects of vehicles and the amounts incurred for recalls and othersafety measures may affect the amounts incurred for product warranties and vice versa.
The net change in liabilities for quality assurance above for the years ended March 31, 2021, 2022 and 2023
consist of the following:
Yen in millions
For the years ended March 31,
2021
2022
2023

Liabilities for quality assurance at beginning of year . . . . . . . . . . . . . .
Additional provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reversals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,552,970
345,563(347,806)(77,479)
9,624

1,482,872
362,180(278,094)(32,124)
20,877

1,555,711
400,419(229,623)(59,758)
19,608

Liabilities for quality assurance at end of year . . . . . . . . . . . . . . . . . . .

1,482,872

1,555,711

1,686,357“Other” primarily includes the impact of currency translation adjustments and the impact of consolidationand deconsolidation of certain entities due to changes in ownership interest.
The table below shows the net changes in liabilities for recalls and other safety measures which arecomprised in liabilities for quality assurance above for the years ended March 31, 2021, 2022 and 2023.
Yen in millions
For the years ended March 31,
2021
2022
2023

Liabilities for recalls and other safety measures at beginning ofyear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reversals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,104,711
229,763(228,044)(16,199)
3,458

1,093,689
245,542(165,482)(9,389)6,853

1,171,213
231,874(178,124)(35,643)
4,836

Liabilities for recalls and other safety measures at end of year . . . . . .

1,093,689

1,171,213

1,194,156

25. Equity and other equity items(1) Equity management
Toyota will efficiently invest in maintenance and replacement of conventional manufacturing facilities andthe introduction of new products, and will focus on capital investment and research and development in areas
contributing to strengthening competitiveness and future growth. Through these activities, Toyota aims to
improve corporate value and keep sustainable growth for realization of a new mobility society. Generally, Toyota
Motor Corporation shareholder’s equity cover such activities, with additional short-term and long-term debt, if
necessary.
F-71

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The amount of Toyota Motor Corporation shareholder’s equity and short-term and long-term debt are as
follows:
Yen in millions
March 31,
2022
2023

Toyota Motor Corporation Shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term and long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26,245,969
26,496,358

28,338,706
29,380,273(2) Number of shares
The total number of authorized shares of TMC’s common stock was 10,000,000,000, 50,000,000,000 and
50,000,000,000 as of March 31, 2021, 2022 and 2023, respectively.
The changes in the shares of common stock issued are as follows:2021

For the years ended March 31,
2022

2023

Common stock issued:
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . .
Changes during the year . . . . . . . . . . . . . . . . . . . . . . . . .

3,262,997,492—

3,262,997,492
13,051,989,968

16,314,987,460—

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . .

3,262,997,492

16,314,987,460

16,314,987,460

The common stock issued by TMC is a no-parity stock without any limitations on the content of the rights,
and the issued stock is fully paid.
On October 1, 2021, TMC effected a five-for-one stock split of its common stock to shareholders. The total
number of authorized shares of TMC’s common stock and common stock issued was increased by
40,000,000,000 and 13,051,989,968, respectively.
The total number of treasury stock was 467,048,832, 2,536,685,916 and 2,749,807,731 as of March 31,
2021, 2022 and 2023, respectively.
(3) Capital surplus and retained earnings
Capital surplus consists of capital reserves and other capital surplus. Retained earnings consist of retained
earnings reserve and other retained earnings. The Companies Act of Japan provides that an amount equal to 10%
of distributions from surplus paid by TMC and its Japanese subsidiaries be appropriated as a capital reserve or aretained earnings reserve. No further appropriations are required when the total amount of the capital reserve andthe retained earnings reserve reaches 25% of stated capital. The Companies Act provides that the retained
earnings reserve of TMC and its Japanese subsidiaries is restricted and unable to be used for dividend payments,
and is excluded from the calculation of the profit available for dividend.
The amounts of statutory retained earnings of TMC available for dividend payments to shareholders were
¥11,656,187 million and ¥13,434,394 million as of March 31, 2022 and 2023, respectively. In accordance withcustomary practice in Japan, the distributions from surplus are not accrued in the financial statements for thecorresponding period, but are recorded in the subsequent accounting period after shareholders’ approval has beenobtained.
F-72

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Retained earnings at March 31, 2023 include ¥3,506,777 million relating to equity in undistributed earnings
of associates and joint ventures.
(4) Treasury stock
The reissuance and repurchase of treasury stock are as follows:
For the year ended March 31, 2021
Reissuance of treasury stock
Reason for reissuing treasury stock At its Directors’ Meeting held on March 24, 2020, TMC resolved to purchase shares issued by NIPPONTELEGRAPH AND TELEPHONE CORPORATION (“NTT”) and conduct a reissuance of treasury stock
through third-party allotment with NTT as the allottee to form a business and capital alliance with NTT. The
parties entered into a memorandum of understanding concerning the business and capital alliance on the sameday. Based on the agreement, TMC has completed the purchase of NTT shares and reissuance of treasury stockwith NTT as the allottee on April 9, 2020.
Details of matters relating to reissuance Number of common shares reissued . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amount of reissuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29,730,900 shares¥199,999 million

For the year ended March 31, 2022
Repurchase of treasury stock
1) Repurchasing of treasury stock resolved at the Board of Directors meeting held on May 12, 2021 andNovember 4, 2021
Reason for repurchasing treasury stock The repurchase was made to promote capital efficiency by repurchasing flexibly its common stock while
comprehensively considering factors such as its investment in growth, level of its dividends, its cash reserves andthe price level of its common stock.
Details of matters relating to repurchase Number of common shares repurchased . . . . . . . . . . . . . . . . . . . . . . . . .
Total purchase price for repurchase of shares . . . . . . . . . . . . . . . . . . . . .

96,196,900 shares¥400,000 million

2) Repurchasing of treasury stock resolved at the Board of Directors meeting held on March 23, 2022
Reason for repurchasing treasury stock The repurchase was made to promote capital efficiency by repurchasing flexibly its common stock than
before while comprehensively considering factors such as the price level of its common stock.
F-73

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Details of matters relating to repurchase Number of common shares repurchased . . . . . . . . . . . . . . . . . . . . . . . . .
Total purchase price for repurchase of shares . . . . . . . . . . . . . . . . . . . . .

2,111,000 shares¥4,607 million

For the year ended March 31, 2023
Repurchase of treasury stock
1) Repurchasing of treasury stock resolved at the Board of Directors meeting held on March 23, 2022
Reason for repurchasing treasury stock The repurchase was made to promote capital efficiency by repurchasing flexibly its common stock than
before while comprehensively considering factors such as the price level of its common stock.
Details of matters relating to repurchase Number of common shares repurchased . . . . . . . . . . . . . . . . . . . . . . . . .
Total purchase price for repurchase of shares . . . . . . . . . . . . . . . . . . . . .

44,114,900 shares¥95,392 million

2) Repurchasing of treasury stock resolved at the Board of Directors meeting held on May 11, 2022 andNovember 1, 2022
Reason for repurchasing treasury stock The repurchase was made to promote capital efficiency by repurchasing flexibly its common stock than
before while comprehensively considering factors such as the price level of its common stock.
Details of matters relating to repurchase Number of common shares repurchased . . . . . . . . . . . . . . . . . . . . . . .
Total purchase price for repurchase of shares . . . . . . . . . . . . . . . . . . .

F-74

169,429,000 shares¥335,685 million

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(5) Other components of equity
Other components of equity are as follows:
Yen in millions
Net changes inrevaluation offinancial assets
measured at fair
Exchangevalue through other Remeasurements ofdifferences oncomprehensive
defined benefit
translating foreign
incomeplans
operations

Balance at April 01, 2020 . . . . . . . . . . . . . . . .
Other comprehensive income, net oftax . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to retained earnings . . .
Other comprehensive income for theperiod attributable to non-controllinginterests . . . . . . . . . . . . . . . . . . . . . . . .
Balance at March 31, 2021 . . . . . . . . . . . . . . .
Other comprehensive income, net oftax . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to retained earnings . . .
Other comprehensive income for theperiod attributable to non-controllinginterests . . . . . . . . . . . . . . . . . . . . . . . .
Balance at March 31, 2022 . . . . . . . . . . . . . . .
Other comprehensive income, net oftax . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to retained earnings . . .
Other comprehensive income for theperiod attributable to non-controllinginterests . . . . . . . . . . . . . . . . . . . . . . . .
Balance at March 31, 2023 . . . . . . . . . . . . . . .

Total954,070—(368,520)

585,549

380,814(31,321)

221,409(219,047)

410,253—

1,012,476(250,369)(8,211)(2,362)(29,357)(39,930)

1,295,351—

12,375

1,307,726(103,131)(59,110)

151,243(149,602)

1,095,017—

1,143,129(208,712)

1,561(1,640)(38,810)(38,889)

1,134,671—

1,068,583

2,203,254(105,435)(94,233)

82,020(72,598)

851,129—

827,713(166,831)(1,300)(9,422)(17,219)(27,941)

933,702—

1,902,493

2,836,195

F-75

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(6) Other comprehensive income
The breakdown of other comprehensive income and the corresponding tax benefits (including
non-controlling interests) are as follows:
Yen in millions
For the year ended
March 31, 2021
Before
Tax
After
tax
effecttax

Items that will not be reclassified to profit (loss)
Net changes in revaluation of financial assets measured at fair value
through other comprehensive income
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . .

560,225 (172,798)

387,427

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

560,225 (172,798)

387,427

Remeasurements of defined benefit plans
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . .

311,360(95,087)

216,272

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

311,360(95,087)

216,272

Shares of other comprehensive income of equity method investees
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . .

80,472—80,472

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

80,472—80,472Items that may be reclassified subsequently to profit (loss)
Exchange differences on translating foreign operations
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

403,636———

403,636—

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

403,636—

403,636

Net changes in revaluation of financial assets measured at fair value
through other comprehensive income
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(119,441)—

35,938—(83,503)—

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(119,441)

35,938(83,503)

Shares of other comprehensive income of equity method investees
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,172
—

—
—

8,172
—

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,172

—

8,172

Total other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,244,424 (231,947) 1,012,476

F-76

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions
For the year ended
March 31, 2022
Before
Tax
After
tax
effecttax

Items that will not be reclassified to profit (loss)
Net changes in revaluation of financial assets measured at fair value
through other comprehensive income
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(71,641)

22,399(49,242)

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(71,641)

22,399(49,242)

Remeasurements of defined benefit plans
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . .

188,239(51,989)

136,250

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

188,239(51,989)

136,250

Shares of other comprehensive income of equity method investees
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . .

113,641—

113,641

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

113,641—

113,641

Items that may be reclassified subsequently to profit (loss)
Exchange differences on translating foreign operations
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

902,844———902,844—

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

902,844—902,844

Net changes in revaluation of financial assets measured at fair value
through other comprehensive income
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(220,711)
1

66,536 (154,175)(0)1

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(220,710)

66,536(154,174)

Shares of other comprehensive income of equity method investees
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

193,811———

193,811—

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

193,811—

193,811

Total other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,106,184

F-77

36,945 1,143,129

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions
For the year ended
March 31, 2023
Before
Tax
After
tax
effecttax

Items that will not be reclassified to profit (loss)
Net changes in revaluation of financial assets measured at fair value
through other comprehensive income
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . .

144,160(44,936)

99,223

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

144,160(44,936)

99,223Remeasurements of defined benefit plans
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . .

112,151(46,998)

65,153

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

112,151(46,998)

65,153

Shares of other comprehensive income of equity method investees
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(77,148)—(77,148)

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(77,148)—(77,148)

Items that may be reclassified subsequently to profit (loss)
Exchange differences on translating foreign operations
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

676,042———676,042—

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

676,042—676,042

Net changes in revaluation of financial assets measured at fair value
through other comprehensive income
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(165,477)—

49,738—(115,738)—

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(165,477)

49,738(115,738)

Shares of other comprehensive income of equity method investees
Amount incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

180,181———180,181—

Net changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

180,181—180,181

Total other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

869,909(42,196)

827,713

F-78

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(7) Dividends
The paid dividend amounts are as follows:
For the year ended March 31, 2021

Resolution

Type of shares

Total amountof dividends Dividend per share(yen in millions)(yen)

The Board of
Directors Meetingon May 12,2020 . . . . . . . . . . Common shares

331,938

120.00

The Board of
Directors Meetingon November 6,2020 . . . . . . . . . . Common shares

293,576105.00Record date

March 31, 2020

Effective date

May 28, 2020

September 30, 2020 November 27, 2020

For the year ended March 31, 2022

Resolution

Type of shares

Total amountof dividends Dividend per share(yen in millions)(yen)

The Board of
Directors Meetingon May 12,2021 . . . . . . . . . . Common shares

377,453135.00

The Board of
Directors Meetingon November 4,2021 . . . . . . . . . . Common shares

332,419120.00Record date

March 31, 2021

Effective date

May 28, 2021

September 30, 2021 November 25, 2021

On October 1, 2021, TMC effected a five-for-one stock split of its common stock to shareholders.
“Dividend per share” presents the amount prior to the stock split.
For the year ended March 31, 2023

Resolution

Type of shares

Total amountof dividends Dividend per share(yen in millions)(yen)

The Board of
Directors Meetingon May 11,2022 . . . . . . . . . . Common shares

385,792

28.00

The Board of
Directors Meetingon November 1,
2022 . . . . . . . . . . Common shares

342,187

25.00
F-79

Record date

March 31, 2022

Effective date

May 27, 2022

September 30, 2022 November 22, 2022

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Dividends of which record date falls within the year ended March 31, and effective date is after the year
ended March 31 are as follows:
For the year ended March 31, 2023

Resolution

Type of shares

The Board of
Directors Meetingon May 10,2023 . . . . . . . . . . Common shares

Total amountof dividends Dividend per share(yen in millions)(yen)474,78135.00

Record date

Effective date

March 31, 2023

May 26, 2023

26. Sales revenues(1) Summary by business segments and products
The table below shows Toyota’s sales revenues from external customers by business and by productcategory.
Yen in millions
For the years ended March 31
2021
2022
2023

Sales of products
Automotive
Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Parts and components for production . . . . . . . . . . . . . . . . .
Parts and components for after service . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20,509,606
1,287,053
2,049,187
752,000

23,739,442
1,504,215
2,407,143
881,193

28,394,256
1,710,422
2,866,196
805,995

Total automotive . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,597,846
479,553

28,531,993
541,436

33,776,870
590,749

Total sales of products . . . . . . . . . . . . . . . . . . . . . . . . .
Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25,077,398
2,137,195

29,073,428
2,306,079

34,367,619
2,786,679

Total sales revenues . . . . . . . . . . . . . . . . . . . . . .

27,214,594

31,379,507

37,154,298

The majority of sales of products are revenues recognized from contracts with customers under IFRS 15“Revenue from Contracts with Customers” (“IFRS 15”), and receivables related to such revenues are recognized
as “Trade accounts and other receivables”.
The breakdown of income from leases included in financial service revenues is as follows:
Yen in millions
For the years ended March 31,
2021
2022
2023

Finance leases
Financial income related to net lease investment . . . . . . . . . . . .
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

106,724
1,017,707

134,512
1,093,545

164,820
1,169,018

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,124,431

1,228,057

1,333,838

F-80

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Financial service revenues other than income from leases mainly consist of interest income using
the effective interest method. The amount of interest income using the effective interest method is not significant.
For the years ended March 31, 2021, 2022 and 2023 ¥125,748 million, ¥138,718 million and¥166,220 million of financial service revenues were accounted for under IFRS 15.
(2) Contract liabilities
Contract liabilities consist of the following:

April 1, 2021

Contract liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

854,679

Yen in millions
March 31,
2022
2023

989,959

1,068,212

Contract liabilities are primarily related to advances received from customers. Contract liabilities areincluded in “Other current liabilities” and “Other non-current liabilities” in the consolidated statement offinancial position. For the year ended March 31, 2022 and 2023, the amounts transferred from contract liabilities
at the beginning of the fiscal year to sales revenue were ¥444,781 million and ¥529,016 million, respectively.
(3) Performance obligations
The aggregate amounts of transaction prices allocated to unsatisfied performance obligations related tocontracts that have original expected durations in excess of one year were ¥796,769 million and ¥834,624 million
as of March 31, 2022 and 2023, respectively. The main contents of unsatisfied performance obligations are
insurance revenues and maintenance revenues.
For insurance revenues, Toyota receives payment agreed upon in the contract at the inception of thecontract, and revenue is recognized over the term of the contract, which ranges from three to 120 months. As of
March 31, 2022, the unsatisfied performance obligations related to insurance revenues were ¥295,648 million,
and Toyota expected to recognize as revenue ¥82,215 million in fiscal 2023, and ¥213,432 million thereafter. As
of March 31, 2023, the unsatisfied performance obligations related to insurance revenues were ¥352,239 million,
and Toyota expects to recognize as revenue ¥101,392 million in fiscal 2024, and ¥250,847 million thereafter.
For maintenance revenues, Toyota receives payments agreed upon in the contract at the inception of thecontract, and revenue is recognized over the term of the contract, which ranges from 18 to 84 months.
Unsatisfied performance obligations for sales of products related to contracts that have an original expected
duration of one year or less have been excluded from this disclosure.

F-81

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
27. Research and development cost
Research and development costs consist of the following:
Yen in millions
For the years ended March 31,
2021
2022
2023

Research and development expenditures incurred during the year . . . . . . . . .
Amount capitalized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of capitalized development costs . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,090,424 1,124,262 1,241,686(158,246) (200,512) (181,634)
152,542
167,926
164,5121,084,721

1,091,675

1,224,564

28. Other finance income and costs
Other finance income and costs consist of the following:
Yen in millions
For the years ended March 31,
2021
2022
2023

Other finance income
Interest income
Financial assets measured at amortized cost . . . . . . . . . . . . . . . . . .
Financial assets measured at fair value through othercomprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividend income
Financial assets measured at fair value through othercomprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,526

16,920101,737

88,074

84,592

132,365

88,837240,791

94,833
138,416

109,308
35,939Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

435,229

334,760

379,350

Other finance costs
Interest expense
Financial liabilities measured at amortized cost . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(42,421)(5,116)(32,458)(11,539)(47,356)(77,757)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(47,537)(43,997)(125,113)

The decrease in “Other finance income—Other” was due mainly to a decrease during fiscal 2023 in profit
on securities revaluation.

F-82

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
29. Earnings per share
Reconciliation of the difference between basic and diluted earnings per share attributable to Toyota Motor
Corporation are as follows:
Thousands
Yen in millionsof shares
Yen
Net income
Earnings per share
attributable to Toyota Weighted-average attributable to Toyota
Motor Corporationcommon shares
Motor Corporation

For the year ended March 31, 2021
Net income attributable to Toyota Motor
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic earnings per share attributable to Toyota
Motor Corporation . . . . . . . . . . . . . . . . . . . .
Effect of dilutive securities
Model AA Class Shares . . . . . . . . . . . . . . . . . .

2,245,261
2,245,261

13,976,442

12,569229,694

Diluted earnings per share attributable to Toyota
Motor Corporation . . . . . . . . . . . . . . . . . . . . . . . .

2,257,830

14,206,137

158.93For the year ended March 31, 2022
Net income attributable to Toyota Motor
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,850,110
2,850,110

13,887,348

205.2323

311

Diluted earnings per share attributable to Toyota
Motor Corporation . . . . . . . . . . . . . . . . . . . . . . . .

2,850,132

13,887,659

205.23For the year ended March 31, 2023
Net income attributable to Toyota Motor
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,451,318
2,451,318

13,658,382

179.47——2,451,318

13,658,382

Basic earnings per share attributable to Toyota
Motor Corporation . . . . . . . . . . . . . . . . . . . .
Effect of dilutive securities
Model AA Class Shares . . . . . . . . . . . . . . . . . .

Basic earnings per share attributable to Toyota
Motor Corporation . . . . . . . . . . . . . . . . . . . .
Effect of dilutive securities
Model AA Class Shares . . . . . . . . . . . . . . . . . .
Diluted earnings per share attributable to Toyota
Motor Corporation . . . . . . . . . . . . . . . . . . . . . . . .

160.65179.47

In addition to the disclosure requirements under IFRS, Toyota discloses the information below in order toprovide financial statements users with valuable information.

F-83

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table shows Toyota Motor Corporation shareholders’ equity per share. Toyota Motor
Corporation shareholders’ equity per share amounts are calculated by dividing Toyota Motor Corporation
shareholders’ equity in the consolidated statement of financial position by common shares issued and outstandingat the end of the year (excluding treasury stock).

Toyota Motor
Corporation
shareholders’ equity

Thousandsof shares
Common shares issued
and outstanding at theend of the year
(excluding treasury
stock)

Toyota Motor
Corporation
shareholders’ equity
per share

26,245,969
28,338,706

13,778,302
13,565,180

1,904.88
2,089.08

Yen in millions

As of March 31, 2022 . . . . . . . . . . . . . . . . . . . . . . .
As of March 31, 2023 . . . . . . . . . . . . . . . . . . . . . . .

Yen

On October 1, 2021, TMC effected a five-for-one stock split of its common stock to shareholders. “Basicearnings per share attributable to Toyota Motor Corporation”, “Diluted earnings per share attributable to Toyota
Motor Corporation” and “Toyota Motor Corporation shareholders’ equity per share” are calculated based on theassumption that the stock split was implemented at the beginning of the earliest period presented in this note.
“Diluted earnings per share attributable to Toyota Motor Corporation” equals “Basic earnings per share
attributable to Toyota Motor Corporation” for the year ended March 31, 2023, because there were no potential
dilutive shares during that period as the acquisition of all outstanding First Series Model AA Class Shares took
place on April 2, 2021, and the cancellation of all First Series Model AA Class Shares was completed on April 3,
2021
30. Contractual commitments and contingent liabilities(1) Contractual commitments
Contractual commitments relating to purchase of property, plant and equipment, other assets, and services
are ¥349,143 million, ¥522,336 million as of March 31, 2022 and 2023.
(2) Guarantees
Toyota enters into contracts with Toyota dealers to guarantee customers’ payments of their installment
payables that arise from installment contracts between customers and Toyota dealers, as and when requested by
Toyota dealers. Guarantee periods are set to match maturity of installment payments, and as of March 31, 2023,
range from 1 month to 8 years; however, they are generally shorter than the useful lives of products sold. Toyota
is required to execute its guarantee primarily when customers are unable to make required payment.
The maximum potential amount of future payments are ¥3,641,978 million and ¥3,600,631 million as ofMarch 31, 2022 and 2023. Liabilities for guarantees totaling ¥21,869 million, and ¥16,759 million have been
provided as of March 31, 2022 and 2023. Under these guarantee contracts, Toyota is entitled to recover any
amount paid by Toyota from the customers whose original obligations Toyota has guaranteed.
(3) Market treatment such as recalls, damages and lawsuits
Toyota and other automakers have been named in certain class actions filed in Mexico, Australia, Israel andBrazil relating to Takata airbag issues. The actions in Israel and Brazil are being litigated. The actions in Mexicoand Australia have been resolved.
F-84

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Toyota is named as a defendant in an economic loss class action lawsuit in Australia in which damages areclaimed on the basis that diesel particulate filters in certain vehicle models are defective. Toyota received an
unfavourable judgment both in the primary court on April 7, 2022 and in the appeal court on March 27, 2023.
The judgments included a finding that there was a perceived reduction in vehicle value of certain vehicle models.
Toyota disagrees with the judgments and has filed an application for a further appeal. Other claims of economic
loss in this class action lawsuit continue to be litigated at the court of first instance. In estimating 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 thejudgements, and the views of legal counsel. The currently estimated probable economic outflow related to theclass action is immaterial to Toyota’s consolidated financial position, results of operations and cash flows. At thisstage, however, the final outcome and therefore ultimate financial liability for Toyota on account of this mattercannot be predicted with certainty.
In April 2020, Toyota reported possible anti-bribery violations related to a Thai subsidiary to the SEC andthe Department of Justice (“DOJ”), and is cooperating with their investigations. Investigations by governmental
authorities related to these matters could result in the imposition of civil or criminal penalties, fines or othersanctions, or litigation. Toyota cannot predict the scope, duration or outcome of these matters at this time.
Toyota also has various other pending legal actions and claims, including without limitation personal injury
and wrongful death lawsuits and claims in the United States, as well as intellectual property litigation, and issubject to government investigations from time to time.
Beyond the amounts accrued with respect to all aforementioned matters, Toyota is unable to estimate a
range of reasonably possible loss, if any, for the pending legal matters because (i) many of the proceedings are inevidence gathering stages, (ii) significant factual issues need to be resolved, (iii) the legal theory or nature of theclaims is unclear, (iv) the outcome of future motions or appeals is unknown and/or (v) the outcomes of othermatters of these types vary widely and do not appear sufficiently similar to offer meaningful guidance. Therefore,
for all of the aforementioned matters, which Toyota is in discussions to resolve, any losses that are beyond theamounts accrued could have an adverse effect on Toyota’s financial position, results of operations or cash flows.
TMC has a concentration of labor supply in employees working under collective bargaining agreements anda substantial portion of these employees are working under the agreement that will expire on December 31, 2023.
31. Details of company organization(1) Major subsidiaries
Toyota primarily conducts business in the automotive industry. Toyota also conducts business in financeand other industries.
Toyota’s major subsidiaries are as follows:
Automobiles are mainly manufactured by TMC, Hino Motors Ltd. and Daihatsu Motor Co., Ltd., but someof them are outsourced in Japan. Toyota Motor Manufacturing Kentucky, Inc. and others manufacture overseas.
Auto parts are manufactured by TMC and others. These products are sold through dealers such as TOYOTA
Mobility Tokyo Inc. in Japan, and through dealers such as Toyota Motor Sales, U.S.A., Inc. overseas.
In the financing business, Toyota Finance Corporation and others provide sales finance services in Japanand Toyota Motor Credit Corporation and others overseas.
F-85

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Other business consists of information technology-related businesses and other businesses.
(2) Structured entities(i)

Consolidated structured entities

Toyota periodically securitizes receivables related to financial services and vehicles on leases for liquidityand funding purposes and transfers them to special purpose entities. Toyota is deemed to have the power to direct
the activities of these entities that most significantly impact the entities’ economic performances. Therefore,
Toyota has consolidated them.
The creditors of these entities do not have recourse to Toyota’s general credit with the exception of debts
guaranteed by Toyota. Risks to which Toyota is exposed including credit, interest rate, and/or prepayment risks
are not incremental compared with the situation before Toyota enters into securitization transactions.
Toyota has equity in investment trusts and other special purpose entities. With respect to some of theinvestment trusts, Toyota has both the obligation to absorb losses of or the right to receive benefits from theinvestment trusts that could potentially be significant to the investment trusts and the power to direct theactivities of the investment trusts that most significantly impact the investment trusts’ economic performancethrough the asset manager. Therefore, Toyota has consolidated them.
Related to securitization transactions, ¥3,367,601 million and ¥5,037,203 million receivables related tofinancial services, ¥3,882,623 million and ¥5,245,195 million secured debt were included in Toyota’s
consolidated financial statements as of March 31, 2022 and 2023, respectively.
(ii) Unconsolidated structured entities
Other investment trusts and other special purpose entities are instructed based on contractual arrangements,
and are designed so that voting or similar rights are not the dominant factor in deciding who controls the entities.
The trusts and the special purpose entities are defined as structured entities but are determined that Toyota lacks
the power to direct the activities of these investments that most significantly impact the trust’s economic
performance and, therefore does not consolidate the investment trusts and the special purpose entities.
Investments in the investment trusts and the special purpose entities are held at fair value and are included in“Other financial assets” in the consolidated statement of financial position. The maximum exposure to loss islimited to the carrying value of its investment. The carrying value of the trusts totaled ¥18,829 million and¥17,217 million as of March 31, 2022 and 2023, respectively. The carrying value of the special purpose entities
totaled ¥1,073,137 million and ¥784,826 million as of March 31, 2022 and 2023, respectively. Toyota does notprovide support that is not contractually required to the investments.

F-86

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
32. Related party transactions(1) Transactions with associates and joint ventures
The balances and turnover of receivables and payables with associates and joint ventures accounted forunder the equity method are as follows:
Yen in millions
March 31,
2022
2023

Trade accounts and other receivables
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

302,21264,195447,400
85,275

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

366,407532,674

Trade accounts and other payables
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,086,397
5,112

1,459,209
695

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,091,509

1,459,904

Yen in millions
For the years ended March 31,
2021
2022
2023

Sales revenues
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,138,144
499,437

1,948,681
413,7032,821,963
722,278

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,637,582

2,362,384

3,544,240

Cost of products sold (purchases)
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,983,797
51,434

7,946,788
308

9,891,804
59,703

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,035,231

7,947,095

9,951,507

Dividends from associates and joint ventures accounted for under the equity method are ¥252,557 millionand ¥349,632 million for the years ended March 31, 2022 and 2023, respectively. In addition, Toyota does notengage in transactions with associates and joint ventures outside of the normal course of business.
(2) Compensation of key management
The compensation for the directors and audit & supervisory board members of TMC is as follows:
Yen in millions
For the years ended March 31,
2021
2022
2023

Monthly compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bonus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

987
748
364
747

1,083
196
772
—

1,226
397
808
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,847

2,051

2,430

F-87

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)“Other” refers to income tax compensation that was granted to a member of the Board of Directors,
Mr. Didier Leroy, with respect to his remuneration during the period in which he served as a member of theBoard of Directors. Mr. Leroy retired on June 11, 2020.
33. Supplemental cash flow information“Other, net” in cash flows from investing activities includes a net decrease in time deposits of¥2,070,726 million and a net decrease in time deposits of ¥307,970 million for the year ended March 31, 2022
and 2023, respectively.
34. Significant subsequent events
On May 30, 2023, Toyota, Daimler Truck, MFTBC and Hino concluded a memorandum of understandingon accelerating the development of advanced technologies and conducting a business combination of MFTBC
and Hino so as to collaborate toward achieving carbon neutrality, create a prosperous mobility society by
developing CASE technologies and strengthening the commercial vehicle business on a global scale, and build aglobally competitive Japanese commercial vehicle manufacturer.
MFTBC and Hino will become wholly owned subsidiaries of a new listed holding company. Toyota andDaimler Truck will equally invest in the holding company and will collaborate on the development of hydrogenand other CASE technologies to support the competitiveness of the new company. The parties endeavor todevelop and execute definitive agreements related to this transaction, including those concerning details related
to the scope and nature of the collaboration, including the name, location, shareholding ratio and corporate
structure of the new holding company, during the fiscal year ended March 31, 2024 and expect to close thetransaction by December 31, 2024. Accordingly, we cannot currently estimate the impact of this agreement on
Toyota’s consolidated financial statements.

F-88

ITEM 19. EXHIBITS

Index to Exhibit
1.1

Amended and Restated Articles of Incorporation of the Registrant (English translation)(incorporated by reference to Exhibit 1.1 to Toyota’s Annual Report on Form 20-F for the fiscal
year ended March 31, 2022, filed with the SEC on June 23, 2022 (file no. 001-14948))

1.2

Amended and Restated Regulations of the Board of Directors of the Registrant (English
translation) (incorporated by reference to Exhibit 1.2 to Toyota’s Annual Report on Form 20-F
for the fiscal year ended March 31, 2022, filed with the SEC on June 23, 2022 (fileno. 001-14948))

1.3

Amended and Restated Regulations of the Audit & Supervisory Board of the Registrant (English
translation)

2.1

Amended and Restated Share Handling Regulations of the Registrant (English translation)(incorporated by reference to Exhibit 2.1 to Toyota’s Annual Report on Form 20-F for the fiscal
year ended March 31, 2021, filed with the SEC on June 24, 2021 (file no. 001-14948))

2.2

Form of Amended and Restated Deposit Agreement among the Registrant, The Bank of New
York Mellon, as depositary, and all owners and holders from time to time of American
Depositary Shares issued thereunder, including the form of American Depositary Receipt(incorporated by reference to Exhibit 1 to Toyota’s Registration Statement on Form F-6, filedwith the SEC on September 21, 2021 (file no. 333-259683))

2.3

Form of American Depositary Receipt (included in Exhibit 2.2)

2.4

Description of Toyota’s Common Stock (incorporated by reference to “Item 10.B. Memorandum
and Articles of Incorporation” of this annual report)

2.5

Description of Toyota’s American Depositary Shares (incorporated by reference to Exhibit 2.5 toToyota’s Annual Report on Form 20-F for the fiscal year ended March 31, 2022, filed with the
SEC on June 23, 2022 (file no. 001-14948))

8.1

List of Principal Subsidiaries (See “Organizational Structure” in “Item 4. Information on the
Company”)

11.1

Code of Ethics of the Registrant applicable to its members of the board of directors and operating
officers, including its principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions (English translation) (incorporated
by reference to Exhibit 11.1 to Toyota’s Annual Report on Form 20-F for the fiscal year ended
March 31, 2021, filed with the SEC on June 24, 2021 (file no. 001-14948))

12.1

Certifications of the Registrant’s President and Member of the Board, as well as Member of theBoard, pursuant to Section 302 of the Sarbanes-Oxley Act

13.1

Certifications of the Registrant’s President and Member of the Board, as well as Member of theBoard, pursuant to Section 906 of the Sarbanes-Oxley Act

15.1

Consent of Independent Registered Public Accounting Firm

101.INS

Inline XBRL Instance Document — the instance document does not appear in the Interactive
Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document146

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

The cover page for the registrant’s Annual Report on Form 20-F for the year ended March 31,
2023, has been formatted in Inline XBRL147

SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has
duly caused and authorized the undersigned to sign this annual report on its behalf.
TOYOTA MOTOR CORPORATION

Date: June 30, 2023

By:/s/ Masahiro Yamamoto

Name:
Title:

Masahiro Yamamoto
Chief Officer, Accounting GroupExhibit 1.3(TRANSLATION)REGULATIONS OF
THE AUDIT & SUPERVISORY BOARDOF
TOYOTA MOTOR CORPORATION
Established: September 27, 1994
As last amended on March 20, 2023
Article 1. (Regulations of the Audit & Supervisory Board)
Except as provided for by laws, ordinances or the Articles of Incorporation, the matters relating to the
Audit & Supervisory Board of the Corporation shall be governed by the provisions of these Regulations.
Article 2. (Composition)
The Audit & Supervisory Board shall be composed of all the Audit & Supervisory Board Members.
Article 3. (Person Authorized to Convene the Meeting and Notice of the Meeting)1.

A meeting of the Audit & Supervisory Board shall be convened by the Audit & Supervisory Board Member
who has been determined in advance by a resolution at the meeting of the Audit & Supervisory Board;
provided, however, that the other Audit & Supervisory Board Members shall not be prevented fromconvening the meeting thereof.

2.

In order to convene a meeting of the Audit & Supervisory Board, such Audit & Supervisory Board Member
referred to in the preceding paragraph shall dispatch a notice thereof to each Audit & Supervisory Board
Member at least three (3) days before the date of the meeting, provided that, in the case of urgency, such
period may be shortened.

3.

Notwithstanding the provision of the preceding paragraph, the meeting of the Audit & Supervisory Board
may be held without the convening procedure, if so consented to by all the Audit & Supervisory Board
Members.

Article 4. (Chairmanship and Method of Resolution)
1.

The chairmanship of the meeting of the Audit & Supervisory Board shall be assumed by the Audit &Supervisory Board Member who has been determined in advance by a resolution at the meeting of the
Audit & Supervisory Board.

2.

The resolutions of the Audit & Supervisory Board shall be adopted at its meeting by a majority of the
Audit & Supervisory Board Members.

3.

The following matters may be unanimously resolved at the meeting of the Audit & Supervisory Board
instead of the consent of all the Audit & Supervisory Board Members:(1) Dismissal of the Accounting Auditor(s) in accordance with Article 340 of the Companies Act;
(2) Consent to a submission, by Member(s) of the Board of Directors, of the agenda at the general meetingof shareholders or the meeting of the Board of Directors concerning the exemption of Member(s) of theBoard of Directors from their liabilities (including any amendment to the Articles of Incorporation forsuch purpose) in accordance with Articles 425 to 427 of the Companies Act; and(3) Consent to the participation of the Corporation in litigations as to the pursuit of liabilities of theMember(s) of the Board of Directors, etc. in order to support the Member(s) of the Board of Directors
in such litigations in accordance with Paragraph 2 of Article 849 of the Companies Act.
Article 5. (Matters to be Resolved)
1.

The following matters shall be subject to the resolution at the meeting of the Audit & Supervisory Board:(1) Matters so provided for by laws or ordinances;(2) Matters so provided for in the Articles of Incorporation; and(3) Other important matters pertaining to the execution of their duties by the Audit & Supervisory Board
Members.

Article 6. (Matters to be Reported)
1.

The Audit & Supervisory Board Members shall make reports at the meeting of the Audit & Supervisory
Board on the following matters:(1) Matters so provided for by laws or ordinances; and(2) Other matters the Audit & Supervisory Board may deem necessary.

2.

If any Audit & Supervisory Board Member receives a report of any matter(s) from Member(s) of the Boardof Directors and/or the Accounting Auditor(s) required by laws or ordinances to be reported to the Audit &Supervisory Board, he/she shall report the matter(s) to, or make such Member(s) of the Board of Directors
and/or the Accounting Auditor(s) report the matter(s) to, the Audit & Supervisory Board.

3.

Notwithstanding the provisions of the preceding two (2) paragraphs, in case that the Audit & Supervisory
Board Member(s), the Member(s) of the Board of Directors or the Accounting Auditor(s) notifies all the
Audit & Supervisory Board Members of the matter(s), such matter(s) shall not be required to be reported at
the meeting of the Audit & Supervisory Board.

Article 7. (Audit Report)
1.

Pursuant to laws or ordinances, the Audit & Supervisory Board shall make an audit report upon deliberation
based on the audit reports prepared by each Audit & Supervisory Board Member.

2.

Any Audit & Supervisory Board Member may make note of his/her opinion in the audit report prepared by
the Audit & Supervisory Board if the details of his/her audit report differ from those of the Audit &Supervisory Board referred to in the preceding paragraph.

Article 8. (Minutes)
1.

Pursuant to laws or ordinances, the minutes shall be prepared each time a meeting of the Audit &Supervisory Board is held.

2.

With regards to the matters not required to be reported at the meeting of the Audit & Supervisory Board
pursuant to Paragraph 3 of Article 6 hereof, such Audit & Supervisory Board Member as separately
determined shall prepare the minutes thereon in accordance with laws or ordinances.

Supplementary Provisions
Article 1. (Effective Date)
These Regulations shall become effective as of March 20, 2023.

Article 2. (Amendment to these Regulations)
Any amendment to these Regulations shall be made by a resolution of the Audit & Supervisory Board.

MATTERS TO BE SUBMITTED TO
THE AUDIT & SUPERVISORY BOARD
Note:

The Act: the Companies Act
The Enforcement Regulations: the Enforcement Regulations of the Companies Act
The Accounting Regulations: the Corporation Accounting Regulations

1.

Matters to be resolved (Matters in relation to Article 5 of the Regulations of the Audit & Supervisory Board)(1) Matters provided for in laws or ordinances
Items

Relevant Articles of Applicable Law(1) Principles and execution plan of auditing

Article 390 (2)(c) of the Act(2) Request for reports on the execution of theduties of the Audit & Supervisory Board
Member(s) to the Audit & Supervisory Board

Article 390 (4) of the Act(3) Consent to the following actions taken by
Members of the Board of Directors (withrespect to (ii), the reason for consent is also amatter to be resolved)(i)

Submitting
proposed
resolution
concerning the appointment of an
Audit & Supervisory Board Member or asubstitute Audit & Supervisory Board
Member to a general meeting ofshareholders(ii) Determining the remuneration, etc. of an
Accounting Auditor or a person who is
temporarily acting as an Accounting
Auditor

Articles 343 (1) and (3), and 329 (3) of the Act

Article 399 (1) and (2) of the Act(4) Request for Members of the Board of
Directors to take the following actions(i)

Making the appointment of an Audit &Supervisory Board Member or asubstitute Audit & Supervisory Board
Member the agenda of a general meetingof shareholders

Article 343 (2) and (3) of the Act(ii) Submitting
proposed
resolution
concerning the appointment of an
Audit & Supervisory Board Member or asubstitute Audit & Supervisory Board
Member to a general meeting ofshareholders

Article 343 (2) and (3) of the Act(5) Determining the policy for determining thedismissal and non-reappointment of an
Accounting Auditor

Article 126 (d) of the Enforcement Regulations

ItemsRelevant Articles of Applicable Law(6) Election of an Audit & Supervisory Board
Member to be in charge of reporting thedismissal of any Accounting Auditor at a
general meeting of shareholders

Article 340 (3) and (4) of the Act(7) Determining
theappropriatenessofreappointment of Accounting Auditor anddetermining the details of the agenda at a
general meeting of shareholders concerning
the dismissal and non-reappointment of an
Accounting Auditor if such Accounting
Auditor is not being reappointed

Article 344 (1) and (3) of the Act(8) Determining the agenda at a general meetingof shareholders concerning the appointment ofan Accounting Auditor

Article 344 (1) and (3) of the Act(9) Appointment and dismissal of any person who
is to temporarily act as an Accounting Auditor

Article 346 (4), (5) and (6) of the Act(10) Election and dismissal of a full-time Audit &Supervisory Board Member

Article 390 (2)(b) of the Act(11) Election and dismissal of a Specific Audit &Supervisory Board Member (Tokuteikansayaku)

Article 132 (5)(b)(i) of the Enforcement
Regulations, Article 130 (5)(b)(i) of the
Accounting Regulations(2) Matters provided for in the Articles of Incorporation
Items(1) Amendment to the Regulations of the Audit &Supervisory Board

Relevant Articles of the Articles of Incorporation

Article 40 (3) of the Articles ofIncorporation(3) Other important matters pertaining to execution of the duties of Audit & Supervisory Board Member
Items(1) Election of a Chairman of meetings of the Audit & Supervisory Board(2) Election of a person authorized to convene a meeting of the Audit & Supervisory Board(3) Election of the Audit & Supervisory Board Member to be in charge of giving prior consent to the changes ofthe organization and personnel of the Audit & Supervisory Board Office(4) Prior approval of auditing services and non-audit services pursuant to Section 202 of Sarbanes-Oxley Act,and prior approval of non-assurance services pursuant to the Code of Ethics set by the International Ethics
Standards Board for Accountants(5) Election of the Audit & Supervisory Board Member to be in charge of giving approval to a request forrevisions to the pre-approval of auditing services and non-audit services pursuant to Section 202 of
Sarbanes-Oxley Act, and election of the Audit & Supervisory Board Member to be in charge of giving
approval to a request for revisions to the pre-approval of non-assurance services pursuant to the Code of
Ethics set by the International Ethics Standards Board for Accountants(6) Election of the Audit & Supervisory Board Member to be in charge of agreement with Public Interest Entity(PIE) subsidiaries regarding the transfer of approval authority pursuant to the Code of Ethics set by theInternational Ethics Standards Board for Accountants(7) Other significant matters with respect to the execution of the duties of the Audit & Supervisory Board
Member2.

Matters to be reported (Matters in relation to Article 6 of the Regulations of the Audit & Supervisory Board)(1) Matters provided for by laws or ordinances
Items

Relevant Articles of Applicable Law(1) Matters to be reported by Audit & Supervisory
Board Members•

Execution of the duties of Audit &Supervisory Board Members(2) Matters to be reported by Members of theBoard of Directors•

Article 357 (1) and (2) of the Act

Any facts which may cause serious
damage to the Corporation(3) Matters to
Auditors•

Article 390 (4) of the Actbereportedby

Accounting

Article 397 (1) and (3) of the Act

Unjust acts or material facts in violation oflaws, ordinances or the Articles ofIncorporation in relation to the executionof the duties of Members of the Board of
Directors(2) Others
Items(1) The fact that a material circumstance arose that was not expected at the time of the budgeting andestimate of expenses of the Audit & Supervisory Board(2) The fact that an Audit & Supervisory Board Member (including a candidate as Audit &Supervisory Board Member) is being registered as an independent Audit & Supervisory Board
Member(3) Matters deemed necessary by the Audit & Supervisory Board or Audit & Supervisory Board
Member(s)Exhibit 12.1
CERTIFICATIONS
I, Koji Sato, certify that:1.

I have reviewed this annual report on Form 20-F of Toyota Motor Corporation (the “Company”);

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit tostate a material fact necessary to make the statements made, in light of the circumstances under whichsuch statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements and other financial information included in thisreport fairly present in all material respects the financial condition, results of operations and cash flowsof the Company as of, and for, the periods presented in this report;

4.

The Company’s other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15I and 15d-15(e)) andinternal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for
the Company and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls andprocedures to be designed under our supervision, to ensure that material information relating to
the Company, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control overfinancial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented inthis report our conclusions about the effectiveness of the disclosure controls and procedures, as ofthe end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the Company’s internal control over financial reporting that
occurred during the period covered by the annual report that has materially affected, or isreasonably likely to materially affect, the Company’s internal control over financial reporting; and5.

The Company’s other certifying officer and I have disclosed, based on our most recent evaluation ofinternal control over financial reporting, to the Company’s auditors and the Audit & Supervisory Board(or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the Company’s ability torecord, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have asignificant role in the Company’s internal control over financial reporting.

Date: June 30, 2023/s/

Koji Sato

Koji Sato
Chief Executive Officer, Member of the Board of Directors
Toyota Motor Corporation

CERTIFICATIONS
I, Yoichi Miyazaki, certify that:1.

I have reviewed this annual report on Form 20-F of Toyota Motor Corporation (the “Company”);

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit tostate a material fact necessary to make the statements made, in light of the circumstances under whichsuch statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements and other financial information included in thisreport fairly present in all material respects the financial condition, results of operations and cash flowsof the Company as of, and for, the periods presented in this report;

4.

The Company’s other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) andinternal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for
the Company and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls andprocedures to be designed under our supervision, to ensure that material information relating to
the Company, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control overfinancial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented inthis report our conclusions about the effectiveness of the disclosure controls and procedures, as ofthe end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the Company’s internal control over financial reporting that
occurred during the period covered by the annual report that has materially affected, or isreasonably likely to materially affect, the Company’s internal control over financial reporting; and5.

The Company’s other certifying officer and I have disclosed, based on our most recent evaluation ofinternal control over financial reporting, to the Company’s auditors and the Audit & Supervisory Board(or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the Company’s ability torecord, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have asignificant role in the Company’s internal control over financial reporting.

Date: June 30, 2023/s/

Yoichi Miyazaki

Yoichi Miyazaki
Chief Financial Officer, Member of the Board of Directors
Toyota Motor Corporation

Exhibit 13.1
CERTIFICATION
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
each of the undersigned officers of Toyota Motor Corporation, a Japanese corporation (the “Company”), does
hereby certify that, to such officer’s knowledge:
1. The accompanying Annual Report of the Company on Form 20-F for the period ended March 31, 2023
(the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of1934; and2. Information contained in the Report fairly presents, in all material respects, the financial condition andresults of operations of the Company.

By:

/s/

Koji Sato

Name:
Koji Sato
Title: Chief Executive Officer, Member of the Board of Directors

Date: June 30, 2023

By:

/s/

Yoichi Miyazaki

Name:
Yoichi Miyazaki
Title: Chief Financial Officer, Member of the Board of Directors

Date: June 30, 2023
(A signed original of this written statement required by Section 906 has been provided to Toyota Motor
Corporation and will be retained by Toyota Motor Corporation and furnished to the U.S. Securities and Exchange
Commission or its staff upon request.)

Exhibit 15.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statement on Form F-3(No. 333-265811) of Toyota Motor Corporation of our report dated June 30, 2023 relating to the financial
statements and the effectiveness of internal control over financial reporting, which appears in this Form 20-F.

/s/ PricewaterhouseCoopers Aarata LLC
Nagoya, Japan
June 30, 2023