As filed with the U.S. Securities and Exchange Commission on June 24, 2021

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, 2021
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)
Hiroyuki Suzuki
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:
Trading Symbol(s)Name of each exchange on which registered
Title of each class
American Depositary Shares*
TM
The New York Stock Exchange
Common Stock*** American Depositary Receipts evidence American Depositary Shares, each American Depositary Share representing two 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 andExchange 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:
2,795,948,660 shares of common stock (including 54,467,360 shares of common stock in the form of American Depositary Shares) and 22,712,994 First
Series Model AA class shares as of March 31, 2021
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
the preceding 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 ofRegulation 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
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

SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CAPITALIZATION AND INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
REASONS FOR THE OFFER AND USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . .
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1
3
4
4

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

8

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

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

8
8
55
56

ITEM 4A.

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

57

ITEM 5.

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

57

OPERATING RESULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LIQUIDITY AND CAPITAL RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES . . . . . . . . . . . . . . . . .
TREND INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OFF-BALANCE SHEET ARRANGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS . . . . . . . . . . . . . . . . .
SAFE HARBOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

57
72
74
77
77
78
78

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

79

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

79
86
89
91
91

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

92

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

92
94
94

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

94

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

94
95

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

95

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

95
95
95
95
95
95

ITEM 10.

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

95

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

95
96
102
102

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

5.A
5.B
5.C
5.D
5.E
5.F
5.G
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

TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DIVIDENDS AND PAYING AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
STATEMENT BY EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DOCUMENTS ON DISPLAY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SUBSIDIARY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

106
112
112
112
113

ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK . . .

113

ITEM 12.

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

113

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

DEBT SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
WARRANTS AND RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
OTHER SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
AMERICAN DEPOSITARY SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

ITEM 13.

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

115

ITEM 14.

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

115

ITEM 15.

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

115

ITEM 16.

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

116

ITEM 16A.

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

116

ITEM 16B.

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

116

ITEM 16C.

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

117

ITEM 16D.

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES . . .

118

ITEM 16E.

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

118

ITEM 16F.

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

119

ITEM 16G.

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

119

ITEM 16H.

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

122

ITEM 16I.

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

122

ITEM 17.

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

123

ITEM 18.

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

123

ITEM 19.

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

124

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. As used herein, the term “Toyota” refers to Toyota Motor Corporation and its
consolidated subsidiaries as a group, unless the context otherwise indicates.
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). As such, we make an explicit and unreserved
statement of compliance with IFRS, as issued by the IASB, with respect to our consolidated financial statements
as of and for the fiscal years ended March 31, 2020 and 2021 included in this annual report.
The consolidated financial statements included in this annual report are Toyota’s first annual consolidated
financial statements prepared in accordance with IFRS. In preparing these financial statements, the opening
statement of financial position as of April 1, 2019, which is the date of transition to IFRS, and the comparative
financial statements as of and for the fiscal year ended March 31, 2020 have been prepared in accordance with
IFRS. In addition to the consolidated financial statements included in this annual report, other disclosure in thisannual report has also been updated to correspond to the transition to IFRS.
The consolidated financial statements included in our annual reports on Form 20-F previously filed with the
U.S. Securities and Exchange Commission, or the SEC, were prepared in accordance with U.S. GAAP and themost recent annual consolidated financial statements prepared in accordance with U.S. GAAP are those as of andfor the fiscal year ended March 31, 2020. IFRS differs in certain respects from U.S. GAAP. An explanation of
how the transition to IFRS has affected Toyota’s consolidated financial statements is provided in note 36 to
Toyota’s consolidated financial statements.

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 Russian ruble, the Canadian dollar and the British
pound), stock prices and interest rates fluctuations;(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;(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; and(xiv) the impact of natural calamities as well as the outbreak and spread of epidemics, including thenegative effect on Toyota’s vehicle production and sales.

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 SELECTED FINANCIAL DATAIn the fiscal year ended March 31, 2021, we changed the basis of the accounting principles used to prepare
our consolidated financial statements from U.S. GAAP to IFRS. Accordingly, our consolidated financial
statements in this annual report have been prepared in accordance with IFRS, as issued by the IASB. An
explanation of how the transition to IFRS has affected our consolidated financial statements is provided in note
36 to Toyota’s consolidated financial statements.
You should read the IFRS selected consolidated financial information presented below together with“Operating and Financial Review and Prospects” and Toyota’s consolidated financial statements contained in thisannual report.
IFRS Selected Financial Data
The following selected financial data have been derived from Toyota’s consolidated financial statements.
These financial statements were prepared in accordance with IFRS.
Year Ended March 31,
2020
2021
(Yen in millions, except share andper share data)

Consolidated Statement of Income Data:
Automotive:
Sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Services:
Sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other:
Sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Elimination of intersegment:
Sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Company:
Sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to Toyota Motor Corporation . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to Toyota Motor Corporation per share of common
stock (yen):
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares used in computing net income attributable to Toyota Motor Corporation
per share of common stock, basic (in thousands) . . . . . . . . . . . . . . . . . . . . . . . . .
Shares used in computing net income attributable to Toyota Motor Corporation
per share of common stock, diluted (in thousands) . . . . . . . . . . . . . . . . . . . . . . .

1¥26,799,743
2,013,134¥24,651,552
1,607,161

2,193,170
283,742

2,162,237
495,593

1,504,920
103,356

1,052,365
85,350(631,286)(999)(651,560)
9,645

29,866,547
2,399,232
2,792,942
2,111,125

27,214,594
2,197,748
2,932,354
2,282,378

727.47720.10803.23794.672,798,918

2,795,288

2,846,018

2,841,227

Year Ended March 31,
2020
2021
(Yen in millions, except per share andnumbers of vehicles sold data)

Consolidated Statement of Financial Position (end of period):
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term and current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Toyota Motor Corporation shareholders’ equity . . . . . . . . . . . . . . . . . . . . . .
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Data:
Dividends per share (yen) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Number of vehicles soldJapan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Worldwide total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

53,972,363
9,906,755
11,434,219
20,618,888
397,050

62,267,140
12,212,060
13,447,575
23,404,547
397,050

¥

¥

220.0

240.0

2,239,549
2,713,165
1,029,249
1,600,341
1,372,392

2,125,121
2,312,799
959,363
1,222,073
1,026,749

8,954,696

7,646,105* “Other” consists of Central and South America, Oceania, Africa and the Middle East, etc.

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 of Japan (the “Companies Act”).
Toyota completed the acquisition of all outstanding First Series Model AA Class Shares on April 2, 2021 andcancelled 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 ofToyota’s capital stock, effective June 16, 2021. Prior to the June 16, 2021 amendment, the articles ofincorporation 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 of Model 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 (“AA Dividends”), in preference to holders of common stock or registeredpledgees 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 (“AA Interim Dividends”)
as an interim dividend to any holders of Model AA Class Shares or registered pledgees of Model AA
Class Shares of record as of the record date for the interim dividend, in preference to holders of common stock orregistered pledgees of common stock.
2

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.
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
Share
Yen
U.S. dollars

Period Ended

September 30, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100.0
120.0
105.0
135.0

0.92
1.10
0.99
1.21

Toyota deems the benefit of its shareholders as one of its priority management policies, and it continues towork to improve its corporate structure to realize sustainable growth in order to enhance its corporate value.
Toyota will strive for the stable and continuous payment of dividends, seeking to maintain and improve upon the
consolidated payout ratio of 30% to its shareholders.
With a view to surviving tough competition and transitioning to a mobility company, Toyota will utilize its
internal funds mainly for investment in growth for the next generation such as environmental technologies toachieve a carbon neutral society and safety technologies for the safety and security of its customers. Considering
these factors, with respect to the dividends for fiscal 2021, Toyota has determined to pay a year-end dividend of
135 yen per share of common stock by a resolution of the board of directors pursuant to Toyota’s articles ofincorporation. As a result, combined with the interim dividend of 105 yen per share of common stock, the annual
dividend will be 240 yen per share of common stock, and the total amount of the dividends on common stock forthe year will be 671.0 billion yen. Furthermore, Toyota resolved, at its board of directors meeting held on
May 12, 2021, to repurchase a maximum of 41 million shares of its common stock at a total maximum amount of
250 billion yen. Toyota will flexibly repurchase shares with the aim to promote capital efficiency bycomprehensively taking into consideration its investment in growth, level of its dividends, its cash reserves andthe price level of its common stock.
3.B CAPITALIZATION AND INDEBTEDNESS
Not applicable.

3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. Competition in the automotive industry has further intensified
amidst difficult overall market conditions. In addition, competition is likely to further intensify in light of further
continuing globalization in the worldwide automotive industry, possibly resulting in industry reorganizations.
Factors affecting competition include product quality and features, safety, reliability, fuel economy, the amountof time required for innovation and development, pricing, customer service and financing terms. Increased
competition may lead to lower vehicle unit sales, which may result in a further downward price pressure andadversely affect Toyota’s financial condition and results of operations. Toyota’s ability to adequately respond to
the recent rapid changes in the automotive market and to maintain its competitiveness will be fundamental to its
future success in existing and new markets and to maintain its market share. There can be no assurances that
Toyota will be able to compete successfully in the future.
The worldwide automotive industry is highly volatile.
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 general economic environment for the fiscal year ended March 2021, due to the impact of
COVID-19 continuing from the previous fiscal year, the economy faced a sharp slowdown and hit a bottom from
April to June 2020. Due to economic activities resuming and stimulus measures taken in many countries, from
July 2020, the economy gradually recovered, but growth remained low throughout fiscal 2021. Many automotive
markets, other than China and certain other regions where the impact of COVID-19 was limited, recorded
significantly lower results than that of the previous fiscal year, due partly to the impact of the suspension ofoperations at factories and business at dealers worldwide.
The 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 indemand for automobiles continues or progresses further. Demand may also be affected by factors directly
impacting vehicle price or the cost of purchasing and operating vehicles such as sales and financing 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 and results 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 and reliability. The timely introduction of new vehicle models, atcompetitive 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.
There is no assurance, however, that Toyota will adequately and appropriately respond to changing customer4

preferences and demand with respect to quality, safety, reliability, styling 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 implement
capital expenditures at the level and times planned by management. Toyota’s inability to develop and offer
products that meet customers’ preferences and demand with respect to quality, safety, reliability, styling andother 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 and results 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 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.
In the highly competitive automotive industry, it is critical to maintain and develop a brand image. In orderto maintain and develop a brand image, it is necessary to further increase customers’ confidence by providing
safe, high-quality products that meet customer preferences and demand. If Toyota is unable to effectively
maintain and develop its brand image as a result of its inability to provide safe, high-quality products or as aresult of the failure to promptly implement safety measures such as recalls when necessary, vehicle unit sales
and/or sale prices may decrease, and as a result revenues and profits may not increase as expected or may
decrease, adversely affecting its financial condition and results of operations.
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.
Toyota’s ability to continue to obtain supplies from its suppliers in a timely 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, and Toyota’s ability to effectively compete andobtain competitive prices from suppliers. A loss of any single or limited source supplier or inability to obtainsupplies from suppliers in a timely and cost-effective manner could lead to increased costs or delays orsuspensions in Toyota’s production and deliveries, 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.
5Toyota’s operations and vehicles rely on various digital and information technologies.
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’s 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 be vulnerable to damage,disruptions, shutdowns due to unauthorized access or attacks by hackers, computer viruses, breaches due tounauthorized use, errors or malfeasance by employees and others who have or gain access to the networks andsystems Toyota depends on, service failures or bankruptcy of third parties such as software development or cloudcomputing 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 may be the subject of such attacks. Such attacks could materiallydisrupt critical operations, disclose sensitive data, interfere with information services and driving assistancefunctions in Toyota’s vehicles, and/or give rise to legal claims or proceedings, liability or regulatory penalties
under applicable laws, which could have an adverse effect on Toyota’s brand image and its financial condition
and results of operations.
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 Russian ruble, the Canadian dollar and the British pound. Toyota’s consolidated financial statements,
which are presented in Japanese yen, are affected by foreign currency exchange fluctuations through translation
risk, and changes 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 “Operating and Financial Review and Prospects— Operating Results — Overview — Currency Fluctuations,” “Quantitative and Qualitative Disclosures About
Market Risk,” and notes 21 and 22 to Toyota’s consolidated financial statements.
High prices of raw materials and strong pressure on Toyota’s suppliers could negatively impact Toyota’s
profitability.
Increases in prices for raw materials that Toyota and Toyota’s suppliers use in manufacturing their products
or parts and components such as steel, precious metals, non-ferrous alloys including aluminum, and plastic parts,
may lead to higher production costs for parts and components. This could, in turn, negatively impact Toyota’s
future profitability because Toyota may not be able to pass all those costs on to its customers or require its
suppliers to absorb such costs.
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,
6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 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 safety measures such as recalls(including where parts related to recalls or other measures were procured by Toyota from a third party), Toyota
may incur various costs including significant costs for free repairs. Many governments also impose tariffs andother trade barriers, taxes and levies, or enact price or exchange controls. Toyota has incurred significant costs in
response to governmental regulations and actions, including costs relating to changes in global trade dynamics
and policies, and expects to incur such costs in the future. Furthermore, new legislation or regulations or changes
in existing legislation or regulations may also subject Toyota to additional costs in the future. 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.
As an automotive manufacturer, Toyota may become subject to legal proceedings in respect of various
issues, including 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 financial condition
and results of operations. For a further discussion of governmental regulations, see “Information on the
Company — Business Overview — Governmental Regulation, Environmental and Safety Standards” and forlegal proceedings, please see “Information on the Company — 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. Should the
major markets in which Toyota purchases materials, parts and components and supplies for the manufacture of
Toyota products or in which Toyota’s products are produced, distributed or sold be affected by any of these
events, it may result in disruptions and delays in the operations of Toyota’s business. Should significant or
prolonged disruptions or delays related to Toyota’s business operations occur, it may adversely affect Toyota’s
financial condition and results of operations.
Toyota has been, and is expected to continue to be, adversely affected by the spread of COVID-19.
The global spread of COVID-19 and the responses to it by governments and other stakeholders haveadversely affected Toyota in a number of ways. For example, for reasons such as government directives as well7

as anticipated reduced demand for its vehicles, Toyota has temporarily suspended, or intends to temporarilysuspend, production of automobiles and components at selected plants in Japan and overseas. COVID-19 has also
affected, and is expected to continue to affect, the businesses of Toyota dealers and distributors, as well as certainof Toyota’s third-party suppliers and business partners. In addition, the global spread of COVID-19 and related
matters have adversely affected businesses in a wide variety of industries, as well as consumers, all of which
negatively impacted demand for Toyota’s vehicles and related financial services.
The duration of the COVID-19 outbreak and the resulting future effects are uncertain, and the foregoing
impacts and other effects not referenced above, as well as the ultimate impact of the COVID-19 outbreak, aredifficult to predict. The impact of the COVID-19 outbreak and the resulting future effects may thus adversely
affect Toyota’s financial condition and results of operations in later periods as well.
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. Toyota commenced operations in 1933 as theautomobile 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, 2021, Toyota operated
through 544 consolidated subsidiaries (including structured entities) and 169 associates and joint ventures
accounted for by the equity method.
See “— Business Overview — Capital Expenditures and Divestitures” for a description of Toyota’s
principal capital expenditures and divestitures between April 1, 2019 and March 31, 2021 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 (http://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 this annual 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 7,646 thousand vehicles in fiscal 2021 on a consolidated basis. Toyota had sales
revenues of ¥27,214.5 billion and net income attributable to Toyota Motor Corporation of ¥2,282.3 billion in
fiscal 2021.
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 two fiscal years.
Yen in millions
Year Ended March 31,
2020
2021

Automotive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
826,770,379
2,172,854
923,314

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

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
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, etc. Pleasesee “— Automotive Operations — Realizing a Smart Mobility Society that expands through connected car
technologies — Connected with people (COMFORT) — Connected Service” for details on 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 two fiscal years.
Yen in millions
Year Ended March 31,
2020
2021

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

9,503,238
10,419,869
3,133,227
4,785,489
2,024,724

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.
During fiscal 2021, 27.8% of Toyota’s automobile unit sales on a consolidated basis were in Japan, 30.3%
were in North America, 12.5% were in Europe and 16.0% were in Asia. The remaining 13.4% of consolidated
unit sales were in other markets.
The Worldwide Automotive Market
Toyota estimates that annual worldwide vehicle sales totaled approximately 80 million units in 2020.
Automobile sales are affected by a number of factors including:•social, political and economic conditions;•introduction of new vehicles and technologies; and•costs incurred by customers to purchase and operate automobiles.

These factors can cause consumer demand to vary substantially from year to year in different geographic
markets and in individual categories of automobiles.
In fiscal 2021, except in China, which contained the outbreak of COVID-19 at an early stage, the world
economy experienced a year-on-year contraction in both developed and emerging countries due to the global
spread of COVID-19, as well as stay-at-home orders and voluntary stay-at-home efforts to control the outbreak,causing a difficult situation in which many countries in the world were driven into an unprecedented crisis
requiring public spending and the launch of substantial monetary easing measures. The United States saw arecovery thanks to major stimulus measures and monetary easing policy. In Europe, resurgences of new cases
and repeated lockdowns caused economic stagnation. In Japan, amid an economic slowdown caused by the
consumption tax increase in October 2019, the economy experienced a sharp slowdown owing to the state of9emergency issued and voluntary stay-at-home efforts in relation to the outbreak of COVID-19; the resurgences of
new cases also delayed economic recovery. China, which succeeded in the early containment of the spread of
COVID-19, enjoyed a rapid recovery from mid-2020 spurred partly by pent-up demand related to COVID-19 andgovernment measures. However, emerging countries in Asia and other regions also saw an economic slowdown
owing to sluggish demand from abroad and travel restrictions.
The automotive industry was also impacted by the foregoing factors and experienced a year-on-year
contraction for the third straight year, resulting in a greater market contraction than during the 2008 financial
crisis. Both developed and emerging countries generally recorded year-on-year contractions, including China,
which achieved an early economic recovery, recorded a year-on-year contraction for the third straight year.
Developed markets, whose governments have sufficient financial capacity, have generally recovered more
quickly than emerging markets, and the speed of recovery has varied from country to country, as it is affected by
the prevalence and severity of infections.
In the medium- to long-term, Toyota expects the automotive market to continue growing driven principallyby growth in China and other emerging markets. 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 standards in line with such awareness.
In 2020, China, North America, Europe and Asia were the world’s largest automotive markets. The share ofeach market across the globe, which Toyota estimates based on the available automobile sales data in eachcountry and region information, was 32% for China, 22% for North America (21% excluding Mexico and Puerto
Rico), 21% for Europe and 10% for Asia. In China, new vehicle sales decreased for the third straight year to
approximately 25.2 million units. In North America, new vehicle sales were approximately 17.1 million units,
down from the previous year. In Europe, new vehicle sales also decreased from the previous year at
approximately 16.6 million units. In Asia (including India but excluding Japan and China), new vehicle unit sales
also decreased from the previous year to approximately 8.1 million units.
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.

10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.
Toyota’s ability to compete in the global automotive industry will depend in part on Toyota’s successful
implementation of its business strategy. This is subject to a number of factors, some of which are not in Toyota’s
control. These factors are discussed in “Operating and Financial Review and Prospects” and elsewhere in thisannual report.
Toyota Global Vision
In March 2011, Toyota unveiled its “Toyota Global Vision” corporate outline for the future, which serves
not only to give direction to Toyota employees around the world, but also to convey such direction to customers
and to the public at large. Toyota will work to achieve sustained growth through the realization of the following
ideals which are parts of the Vision:
Toyota Global Vision
Toyota will lead the way to the future of mobility, enriching lives around the world with the safest and most
responsible ways of moving people.
Through our commitment to quality, constant innovation and respect for the planet, we aim to exceed
expectations and be rewarded with a smile.
We will meet challenging goals by engaging the talent and passion of people, who believe there is always abetter way.
“The safest and most responsible ways of moving people”•

Safety is Toyota’s highest priority, and Toyota will continue to provide world-class safety.

•

Toyota will also continue to contribute to environmental quality and to human happiness by using
leading environmental technology and by deploying that technology in a growing line of vehicle
models. At the same time, Toyota will work through the provision of products, sales and services thatexceed customer expectation to offer a rewarding experience for customers.

“Enriching lives around the world”•

Toyota has been consistently true to its founding spirit of serving society through conscientious
manufacturing, and it will continue working in that spirit to contribute to enhance the quality of life
wherever it has operations.

•Toyota will strive to continue contributing to economic vitality wherever it has operations by generating
stable employment and by participating in mutually beneficial business relationships with dealers andsuppliers. It will also strive to continue to actively engage in initiatives for human resources
development and the promotion of cultural activities of its host communities.

“Lead the way to the future of mobility”•

Toyota will lead the industry in technological development that will spawn next-generation mobility.
For example, it will explore possibilities in personal mobility and in the convergence of information
technology for automobiles and “smart grids” for optimizing energy generation and consumption.
Toyota will strive to offer products and services that match the needs in each market.
11•

Toyota will strive to advance environmental technology and develop low-carbon technologies andtechnologies for maximizing safety through interaction with the transport infrastructure to lay afoundation for sustainable and amenable future mobility.

“Our commitment to quality, constant innovation”•

Toyota is committed to providing quality vehicles that are highly reliable and driven with a sense ofsafety and reliability.

•

Toyota will constantly reinvent itself and continue to engage in cutting-edge technology development.
Toyota will work towards offering vehicles around the world that address the needs of today and of
tomorrow at affordable prices.

“Respect for the planet”•

Toyota will continue working to minimize environmental impact in its manufacturing and otheroperations, as well as in its products.

•

Toyota’s activities will include conserving energy and reducing output of carbon dioxide, as well as
conserving material resources through recycling; it will also include establishing mindsets andproduction methods appropriate for coexistence with nature.

“Exceed expectations and be rewarded with a smile”•

Everyone at Toyota will continuously maintain a sense of gratitude to customers and will strive to earnsmiles with products and services that are stimulating and inspiring and exceed customer expectations.

“There is always a better way”•

All Toyota employees will share the recognition that there is always a better way and share acommitment to continuous improvement, which are fundamental to The Toyota Way.

“Meet challenging goals by engaging the talent and passion of people”•

Toyota will nurture a corporate culture where teamwork and individual creativity thrive and where
people will approach their work with pride and passion.

•

Toyota will honor the spirit of diversity in recruiting, training and promoting capable individuals aroundthe world. Human resources development at Toyota will continue to promote the transfer of thecompany’s monozukuri spirit of conscientious manufacturing and related skills and know-how from one
generation to the next.

Based on these initiatives, the Toyota group will contribute to “enriching lives of communities” byproviding “ever-better cars.” This is expected to encourage more customers to purchase Toyota cars and thereby
lead to the establishment of a stable business base.

12

Toyota Philosophy
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 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.

ToyodaPrinciples

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

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

Value

The Toyota Way
Missionll
Producing Happiness for A
VisionlCreating
Mobility for Al

Selected Initiatives
As the automotive industry faces a once-in-a-century transformational period, Toyota has once again
returned to its founding philosophy, summarizing the spirit it has maintained since the creation of the “Toyoda
Precepts” to formulate the “Toyota Philosophy” as its signpost for an era when the future is difficult to foresee.
Toyota has defined its mission as “Producing Happiness for All,” and has made clear its view that it will continue
to pursue its customers’ happiness, even if the products it produces change. Toyota believes that taking action torealize its vision of creating “mobility for all” translates into taking care of our “home planet,” similar to ourhometown or home country, and leads to sustained efforts to achieve the aims of the SDGs to “build a betterworld” while ensuring that “no one will be left behind.”Toyota is accelerating its efforts to address carbon neutrality and other social challenges, and to manage
rapid technological innovations such as automated driving and connected vehicles. Toyota is also promoting
digitalization as a platform for open collaboration with a wide range of companies, and creating an environment
for obtaining necessary information when needed. The following are the details of Toyota’s efforts that Toyota is
focusing on in particular.
Electrification
It is essential to promote the electrification of vehicles to achieve carbon neutrality. The Toyota group continues
to contribute to the reduction of CO2 emissions by offering various options such as hybrid electric vehicles (“HEVs”),
13plug-in hybrid electric vehicles (“PHEVs”), battery electric vehicles (“BEVs”), and fuel cell electric vehicles(“FCEVs”) according to customer needs that may vary depending on the energy situation, infrastructure development
status and uses of vehicles in each country or region, and by further promoting the popularization of electrified
vehicles. Since the rollout of the first-generation Prius, Toyota has developed a full lineup of electrified vehicles
without being satisfied with just HEVs, a single technology, and now offers a wide range of electrified vehicles
worldwide, including 45 HEV models, 4 PHEV models, 4 BEV models and 2 FCEV models.
For HEVs, which are Toyota’s main type of electrified vehicles, Toyota will improve the performance of the
Toyota Hybrid System and develop various models, such as high-powered models and simplified models, andthereby expand its product lineup that meets various needs. To expand the sales of electrified systems, Toyota
will work with BluE Nexus Corporation to increase its competitiveness in products related to electrification, as
well as to enhance its technical support and services provided to its customers.
With regard to BEVs, Toyota launched the two-seater “C+pod” ultra-compact battery electric vehicle tocorporate users, local governments and other organizations in Japan, with a view to build new business models.
Toyota will take this opportunity to provide new services unique to BEVs in an empirical manner. In China, Toyota
launched the “C-HR EV” and “IZOA EV,” the first BEVs to be launched under the Toyota brand. Furthermore,
Toyota is planning to launch 15 models, including 7 models of the “Toyota bZ series,” globally by 2025.
In order to promote the use of hydrogen, including the use of FCEVs, in addition to marketing the “MIRAI,”
which has achieved significant improvements in performance, Toyota will also develop a product that packages afuel cell (“FC”) system into a compact module, and work with various FC product companies to promote thewidespread use of FC technologies in a variety of applications, including mobility such as trucks, buses, trains
and ships, as well as stationary generators. Toyota has also established the Japan Hydrogen Association and is
working to find new partners to make, carry and use hydrogen. Furthermore, Toyota is working to “make everbetter cars” through motorsports and took on new challenges towards carbon neutrality. For example, in May
2021, Toyota completed laps in a 24-hour endurance race with its Corolla, which is installed with hydrogenengines that generate power through the combustion of hydrogen.
In addition to promoting the spread of electrified vehicles, Toyota will work to utilize hydrogen engines andcarbon neutral fuels, and create a carbon neutral society for the entire life cycle from production through sales,disposal and recycling.
Safety and automated driving
The Toyota group is engaged in the development and promotion of automated driving technology with theaim of completely eliminating traffic injuries and fatalities and providing safe, secure and smooth mobility to all.
The development philosophy, “Mobility Teammate Concept,” is about building relationships between people andvehicles as if they were teammates. The new LS and new MIRAI are equipped with the new Advanced Drive
function of Lexus Teammate and Toyota Teammate, the latest in Toyota’s advanced driving assist technologies,
to assist diving operations on expressways and motor-vehicle-only roadways. In order to provide our safety
technologies to more customers, Toyota is also adopting its latest preventive safety package for new models anddeveloping a new “Acceleration Suppression Function.”
Furthermore, Toyota started to offer free access to its “THUMS” virtual human body model software, whichenables computer simulation and analysis of injuries caused in vehicle collisions, for use by a wide variety ofusers from 2021. Through this, Toyota is working to further enhance vehicle safety across the entire automotive
industry, and to help realize a safe society.
Connected cars and MaaSThe Toyota group is expanding and developing new functions for its Mobility Service Platform (MSPF), an
ecosystem for openly providing various functions needed for mobility services. Going forward, Toyota will
14

expand its collaboration with Amazon Web Services, Inc. and enhance its foundations for accumulating andusing MSPF’s big data in readiness for the huge volume of data transactions expected in the future. At the sametime, Toyota will build a foundation for streamlined and secure group-wide sharing of big data. Also, as a new
function on the MSPF, Toyota has developed an operations management system to support the provision ofservices that will enable practical use of the e-Palette, a BEV for autonomous mobility, as a service (AutonoMaaS) applications.*
In anticipation of the coming future society in which towns, homes, people and cars are all connected,
Toyota will address social challenges through the development of new services that enrich people’s lives and theutilization of big data.
Software First
In order to provide new technologies and services to its customers in a timely manner, Toyota will make ashift from the conventional hardware-driven vehicle development to a “software first” approach that undertakes
product development starting with software. The launching of the new LS and new MIRAI equipped with“Advanced Drive” in April 2021 is its first step in achieving its concept of “software first.” Even after customers
purchase its products, Toyota will continue to improve safety and add new functions through software updates.
As a basis of these software updates, vehicles will be equipped with state-of-the-art hardware with highperformance in perception, calculation, and reliability (or redundancy). Through these means, Toyota will
provide even greater added value to its customers.
The software platform that will form the foundation for new development, “Arene,” will accelerate
development and enable the verification of safety, application to various applications, and collaborations withnumerous partners. In addition, Toyota’s Automated Mapping Platform gathers information on the cloud andcreates maps that are updated accurately in real time, on a global scale.
In order to effectively and efficiently enhance this type of development capabilities, in January 2021,
Toyota Research Institute — Advanced Development, Inc. (“TRI-AD”) transitioned to a new structure consistingof Woven Planet Holdings, Inc., a holding company, Woven Core, Inc. and Woven Alpha, Inc., both operatingcompanies, and Woven Capital, L.P., an investment fund. Under the vision of “Mobility to Love, Safety to Live,”
Toyota will move forward with its development efforts with the goal of providing safety, security and freedom ofmobility to everyone.
Woven City
Woven City, announced in January 2020, got off to a new start after the groundbreaking ceremony held on
February 23, 2021.
Toyota will develop a site at Toyota Motor East Japan, Inc.’s Higashi Fuji Plant to create a living laboratory
where it can introduce and verify technologies such as automated driving, MaaS, personal mobility, robotics,
smart homes and artificial intelligence (“AI”) in a real-world environment that people live in. In anticipation ofan era in which all goods and services that support people’s lives will be connected, its aim is to continue
creating new value and business models by speeding up the cycle of development and verification oftechnologies and services in this city. Woven City will be an “ever-evolving city” that is constantly improving,by adopting Toyota’s Kaizen method, which is to think that “there is always a better way.”
By centering on people and imagining the life of each resident, and by demonstrating future technologies inboth the virtual and real world, Toyota believes that it can propose new value and lifestyles for the mobility ofpeople, goods and information. Toyota will work with various partner companies and researchers to create the
new city in its quest to create an even-better way of life and mobility for all.
* Combination of “autonomous” and “mobility as a service,” describing Toyota’s mobility services using
automated driving vehicles.
15

Toyota Environmental Challenge 2050
Positioning responding to environmental issues as one of the most prioritized challenges for management,
Toyota has tackled head-on activities, such as the development and promotion of electrified vehicles including
HEVs and FCEVs, efficient production that puts less of a burden on the environment, appropriate treatment of
end-of-life vehicles and the recycling of hybrid vehicle batteries, and planting trees and ecosystem conservation
for the coexistence of humans and nature in harmony.
However, in recent years, the seriousness of environmental issues has increased globally, as evidenced byclimate change, water shortages, resource depletion, and degradation of biodiversity. In response to the situation,
Toyota believes it is necessary to take on new challenges that consider the world 20 or 30 years in the future, inorder to remain closely aligned with the global environment. Accordingly, Toyota announced Toyota
Environmental Challenge 2050 in October 2015.
In order to contribute to the realization of a sustainable society, the Toyota Environmental Challenge 2050
has set forth the six challenges listed below for Toyota to address. Those challenges are to reduce CO2 emissions
from driving and producing, as well as throughout the lifecycle of, vehicles, and to ensure a net positive impact
on the Earth and society toward 2050. By combining those challenges with short and medium-term targets to be
set as necessary, Toyota is steadily engaged in such initiatives.
In addition, in September 2018, Toyota announced the 2030 Milestone, which indicates Toyota’s milestones
for each of the six challenges as of 2030. We will also strengthen collaboration with all stakeholders, consolidate
new ideas, dynamism and technology in concert with the Toyota Environmental Action Plan, which lays out
specific action plans and targets for every five-year period, to contribute to the realization of a truly sustainable
society from a long-term perspective.
In April 2020, Toyota announced the Seventh Toyota Environmental Action Plan — 2025 Target, whichsets specific action plans and targets for a five-year period, beginning from 2021, in order to achieve theEnvironmental Challenge 2050. Toyota also announced a guideline for annual global sales of electrified vehicles
in 2030 in connection with the New Vehicle Zero CO2 Emissions Challenge in May 2021, and announced a newtarget for 2035 with respect to the Plant Zero CO2 Emissions Challenge in June 2021.
1.

New Vehicle Zero CO2 Emissions Challenge: Reduce global average CO2 emissions during operationfrom new vehicles by 90% from Toyota’s 2010 global level by 2050
2025 Target:•

Reduce global average CO2 emissions (TtW, g/km) from new vehicles by 30% or more compared
to 2010 levels•

Make all models in the Toyota and Lexus lineups worldwide available either as a dedicatedelectrified model or with an electrified option, by around 2025

As of May 2021, Toyota announced a guideline for annual global sales of electrified vehicles in 2030
of approximately 8 million units, including a combined total of approximately 2 million BEVs and
FCEVs, based on certain assumptions, such as future laws and regulations of various countries and thestatus of the spread of renewable energy. Toyota will continue to promote the popularization ofelectrified vehicles to contribute to the realization of carbon neutrality.
2.

Life Cycle Zero CO2 Emissions Challenge: Completely eliminate all CO2 emissions from the entire
vehicle life cycle
2030 Milestone:•

Reduce CO2 emissions by 25% or more over the entire vehicle life cycle compared to 2013 levels
by promoting activities for the milestones of Challenges 1 and 3, and with support fromstakeholders such as suppliers, energy providers, infrastructure developers, governments andcustomers
16

2025 Target:

3.

•

Reduce CO2 emissions by 18% or more throughout the entire vehicle life cycle compared to 2013
levels•Japan: Reduce CO2 emissions by 7% by improving transport efficiency compared to 2018 levels(average of 1% reduction per year)•

Overseas: Reduce CO2 emissions by vessels for export (introduce two LNG-powered pure carcarriers)•

Promote CO2 emissions reduction activities among major suppliers•

Achieve 100% introduction rate for CO2 emissions reduction items at newly-constructed andremodeled dealers

Plant Zero CO2 Emissions Challenge: Achieve zero CO2 emissions at all plants worldwide by 2050
2025 Target:•

Reduce CO2 emissions by implementing innovative technologies and daily kaizen and introducing
renewable energy•

Reduce CO2 emissions from global plants by 30% compared to 2013 levels•

Achieve 25% introduction rate for renewable electricity•

Promote proactive technological development to utilize hydrogen

In addition, in June 2021, as part of its important manufacturing activities that will pave the way for the
future, Toyota announced that it will take on various challenges to make its global plants carbon neutral
by 2035.
4.

Challenge of Minimizing and Optimizing Water Usage: Minimize water usage and implement water
discharge management based on individual local conditions
2030 Milestone:••

Implement measures, on a priority basis, in the regions where the impact on the water environment
is considered to be large•

Water quantity: Complete measures at the four Challenge-focused plants in North America,
Asia, and Southern Africa•

Water quality: Complete impact assessment and measures at all of the 22 plants where usedwater is discharged directly into rivers in North America, Asia and Europe

Disclose information appropriately and communicate actively with local communities andsuppliers

2025 Target:
Water quantity•

Reduce water usage taking the water environment in each country and region into consideration•

Promote wastewater recycling, rainwater use and various activities, including daily kaizen•

Reduce global water usage by 3% per vehicle produced compared to 2013 levels (reduce by 34%
compared to 2001 levels)•

Complete measures at two Challenge-focused plants where the water environment is considered tohave a large impact
17

Water quality

5.

•

Thoroughly manage water discharge quality under internal standards that are stricter thanregulatory standards•

Continuously assess the impact of wastewater at all plants where it is discharged directly into theriver

Challenge of Establishing a Recycling-Based Society and Systems: Promote global deployment ofEnd-of-life vehicle treatment and recycling technologies and systems developed in Japan
2030 Milestone:•

Complete establishment of battery collection and recycling systems globally•

Complete set up of 30 model facilities for appropriate treatment and recycling of end-of-life
vehicles2025 Target:•

Complete set up of 15 model facilities for appropriate treatment and recycling of end-of-life
vehicles•Continuously accelerate easy-to-dismantle designs•••

Establish a safe and efficient system for battery 3R (Rebuilt, Reuse and Recycle), eyeing thewidespread use of electrified vehicles•

Aim to maximize collection and detoxification of end-of-life batteries globally•

Start operating battery 3R throughout five regions — Japan, U.S., Europe, China and Asia
(Battery 3R: Rebuilt, Reuse, and Recycle)

Develop technologies to utilize recycled materials (especially plastics) in accordance with theconditions in each region•

6.

Integrate easy-to-dismantle designs to respond to appropriate treatment and recycling of
end-of-life vehicles and resource issues, and provide appropriate information (large batteries,
fuel cell (FC) hydrogen tank and others)

Promote utilization by technological development to optimally exploit recycled materials in
Europe and to increase the supply of recycled materials in Japan

Challenge of Establishing a Future Society in Harmony with Nature: Connect these nature
conservation activities beyond the Toyota group and its business partners to communities, with theworld, and to the future2030 Milestone:•

Realize “Plants in Harmony with Nature” — Twelve plants in Japan and seven plants overseas —as well as implement harmony-with-nature activities in all regions where Toyota is based incollaboration with local communities and companies•

Contribute to biodiversity conservation activities in collaboration with NGOs and others•

Expand initiatives both in-house and externally to foster environmentally conscious persons
responsible for the future2025 Target:•

Realize “Plant in Harmony with Nature” — six in Japan and four overseas•

Promote activities to connect with local communities in collaboration with Toyota groupcompanies and other affiliated companies
18•Start activities promoting harmony with nature in collaboration with local communities andcompanies toward biodiversity conservation•

Globally strengthen conservation of endangered species, which symbolize biodiversity incollaboration with NGOs and others•

Implement globally unified initiatives to foster environmentally conscious persons responsible forthe future•

Offer environmental education opportunities by utilizing biotopes and others in collaboration
with “Plant in Harmony with Nature”•

Foster environmentally conscious persons at both in-house and outside sites, including plants
and the Forest of Toyota, by utilizing educational tools in harmony with nature for the next
generation

Automotive Operations
Toyota’s sales revenues from its automotive operations were ¥24,651.5 billion in fiscal 2021 and¥26,799.7 billion in fiscal 2020.
Toyota produces and sells passenger vehicles, minivans and commercial vehicles such as trucks. Toyota
Motor Corporation’s subsidiary, Daihatsu Motor Co., Ltd. (“Daihatsu”), produces and sells mini-vehicles andcompact cars. Hino Motors, Ltd. (“Hino”), also a subsidiary of Toyota Motor Corporation, produces and sells
commercial vehicles such as trucks and buses. Toyota also manufactures automotive parts, components andaccessories for its own use and for sale to others.
Vehicle Models
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.
Electrified Vehicles
HEVs and PHEVs
The world’s first mass-produced hybrid car was Toyota’s Prius. It runs on an efficient combination of agasoline engine and motor. This system allows the Prius to travel more efficiently than conventional engine
vehicles of comparable size and performance. The hybrid design of the Prius also results in the output of
75% less emission than the maximum amount allowed by Japanese environmental regulations. Toyota views thePrius as the cornerstone of its emphasis on designing and producing eco-friendly automobiles.
In the last three years, Toyota has strengthened its hybrid lineup by adding the fully remodeled Avalon HV
in April 2018, the fully remodeled Corolla Sport in May 2018, the fully remodeled Crown HV and Century HVin June 2018, the new model ES HV in October 2018, the new model UX HV in November 2018, the fully
remodeled RAV4 HV in December 2018, the fully remodeled Corolla SD and WG HV in February 2019, thefully remodeled Yaris HV, new Lexus models LM HV and the fully remodeled Highlander HV in February 2020,
the fully remodeled RAV4 PHV and the fully remodeled Harrier HV in June 2020, the new model Corolla Cross
HV in July 2020, the new model Yaris Cross HV in August 2020 and the fully remodeled Sienna HV in October
2020.
BEVs
Toyota started sales of the UX EV in China in April 2020 and then in Europe and Japan. In the future,
Toyota plans to rollout 15 BEV models, including 7 new BEV models of the “TOYOTA bZ Series,” globally by
2025.
19

FCEVsToyota began limited sales of a fuel cell vehicle in Japan and the United States in December 2002. Since
then, Toyota has made advances by solving technological issues such as the above and worked towards thepractical use of such solutions, culminating in the general sale of the world’s first mass produced fuel cell vehicle
MIRAI in Japan beginning in December 2014, in the United States beginning in June 2015 and in Europe
beginning in September 2015. Toyota also launched “SORA,” the first production model fuel cell bus to receive
vehicle type certification in Japan, in March 2018. Toyota launched the fully remodeled MIRAI in Japan, theUnited States and Europe in February 2020.
Conventional Engine Vehicles
Subcompact and Compact
Toyota’s subcompact and compact cars include the four-door Corolla sedan, which is one of Toyota’s
bestselling models. The Yaris is a compact car designed to perform better and offer greater comfort than othercompact cars available in the market with attractive specifications such as low emissions. In Europe, Toyota
introduced the fully remodeled Corolla in January 2019 and the fully remodeled Yaris in July 2020. In Japan, in
addition to the Corolla Sport, which was introduced in May 2018, and a new Yaris model, which was introducedin February 2020, Toyota introduced the Aqua and Daihatsu introduced four OEM vehicles: the Passo, Roomy,
Tank and Raize. In India, Asia, China and other markets, Toyota introduced the Etios and Vios, as well as the
AGYA and Rush, which are designed and manufactured by Daihatsu, as well as GLANZA and Urban Cruiser,
which are designed and manufactured by Suzuki Motor Corporation (“Suzuki”).
Mini-Vehicles
Mini-vehicles are manufactured and sold by Daihatsu. Daihatsu manufactures mini-vehicles, passenger
vehicles, commercial vehicles and auto parts. Mini-vehicles are passenger vehicles, vans or trucks with engine
displacements of 660 cubic centimeters or less. Daihatsu sold approximately 505 thousand mini-vehicles and
125 thousand automobiles on a consolidated basis during fiscal 2021. Daihatsu’s largest market is Japan, which
accounted for approximately 90% of Daihatsu’s unit sales during fiscal 2021. From 2011, Toyota began to sellsome mini-vehicles manufactured by Daihatsu under the Toyota brand.
Mid-Size
Toyota’s mid-size models include the Camry, which has been the bestselling passenger car in the
United States for 23 of the past 24 calendar years (from 1997 to present) and also for the last 19 consecutive
years. The Camry was fully remodeled in June 2017. Camry sales in the United States for 2020 wereapproximately 294 thousand units (including Camry hybrids).
Luxury and Large
In North America, Europe, Japan and other regions, Toyota’s luxury lineup consists primarily of vehicles
sold under the Lexus brand name. Lexus passenger car models include the LS, the ES, the IS, the CT, the LC andthe RC. Toyota also sells the LX, the GX, the RX, the NX and the UX as luxury sport-utility vehicles, and theLM as a luxury minivan. Toyota commenced sales of its luxury automobiles in Japan under the Lexus brand in
August 2005. As of March 31, 2021, the Lexus brand lineup in Japan includes the LS, the ES, the IS, the CT, theLX, the RX, the NX, the UX, the LC and the RC. The Toyota brand’s full-size luxury car, the Avalon, wasremodeled in April 2018, and the Crown was fully remodeled in June 2018. The Lexus brand’s passenger vehicle
ES was fully remodeled in October 2018 and the new luxury minivan model LM was introduced in February
2020. Toyota also fully remodeled the Century limousine in Japan in June 2018.

20

Sports and Specialty
In May 2019, Toyota introduced a new Supra for the first time in 17 years. Toyota also introduced a new
GR Yaris in September 2020.
Recreational and Sport-Utility Vehicles and Pickup Trucks
Toyota sells a variety of sport-utility vehicles and pickup trucks. Toyota’s sport-utility vehicles available inNorth America include the Sequoia, the 4Runner, the RAV4, the Highlander and the Land Cruiser, and pickup
trucks available are the Tacoma and Tundra. The Tacoma, the Tundra, the Highlander and the Sequoia are
manufactured in the United States. Toyota also offers five types of sport-utility vehicles under the Lexus brand,
including the LX, the GX, the RX, the NX and the UX. Toyota also manufactures the RX and RAV4 models in
Canada. Toyota’s pickup truck, the Hilux, has been the bestselling model of all Toyota cars sold in Thailand.
Toyota introduced the Lexus brand’s new model UX in November 2018, the fully remodeled RAV4 in January
2019, the fully remodeled Highlander in December 2019, the fully remodeled Harrier in June 2020, the newmodel Corolla Cross in July 2020 and the new model Yaris Cross in August 2020.
Minivans, Cabwagons, and Semi-Bonnet Wagon
Toyota offers several basic models for the global minivan market. Its largest minivans in Japan, the Alphardand the Vellfire, were remodeled in January 2015. In addition, the Noah/Voxy was remodeled in January 2014,
and the new model Esquire was introduced in October 2014 in Japan. The Hiace was remodeled overseas in June
2019, and the Sienna was remodeled in North America in October 2020. Toyota’s other minivan models include
the Sienta in Japan.
Trucks and Buses
Toyota’s product lineup includes trucks (including vans) up to a gross vehicle weight of five tons and microbuses that are sold in Japan and in overseas markets. Trucks and buses are also manufactured and sold by Hino, a
subsidiary of Toyota. Hino’s product lineup includes large trucks with a gross vehicle weight of over eleven tons,
medium trucks with a gross vehicle weight of between five and eleven tons and small trucks with a gross vehicle
weight of up to five tons. Hino’s bus lineup includes medium to large buses used primarily as tour buses andpublic buses, as well as small buses and micro-buses.
Product Development
New cars introduced outside of Japan during fiscal 2021 and thereafter include the Corolla Cross, Yaris
Cross, GR Yaris and Urban Cruiser which is designed and manufactured by Suzuki. Remodeled cars outside ofJapan during fiscal 2021 and thereafter include the MIRAI, Harrier and Sienna.
In addition, the IMV product lineup, based on the IMV project to optimize global manufacturing and supply
systems, is a lineup of strategic multipurpose vehicles produced from a single platform to meet market demand.
The IMV product lineup includes, as of March 31, 2021, the Hilux, Fortuner, and Innova, one or all of which areavailable in all regions.

21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.
Year Ended March 31,
2020
2021
Units
%
Units

%

MarketJapan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,239,549
2,713,165
1,029,249
1,600,341
1,372,392

25.0% 2,125,121
30.3 2,312,799
11.5
959,363
17.9 1,222,073
15.3 1,026,749

27.8%
30.3
12.5
16.0
13.4

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

8,954,696

100.0% 7,646,105

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)
Fiscal Year Ended March 31,
2020
2021

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

3,185
1,553
48.8%

2,901
1,505
51.9%

(Thousands of Units)
Calendar Year Ended December 31,
2020
2021

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

20,3792,757
13.5%

17,1572,408
14.0%

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

20,751
1,089
5.3%

16,638993
6.0%

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

9,726
1,347
13.8%

8,181
969
11.8%

22

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’s
consolidated vehicle sales in Japan in fiscal 2021 was 2,125 thousand units, a decrease of 115 thousand units incomparison with the previous year. Toyota endeavors to secure and maintain its large share of and position atop
the Japanese market. Toyota held a domestic market share (excluding mini-vehicles) on a retail basis of 45.9% in
fiscal 2019, 48.8% in fiscal 2020 and 51.9% in fiscal 2021.
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. Toyota supports its operations worldwide
through measures such as the development of new technologies and products, low-volume vehicles tocomplement local production, production of global vehicle models which straddle multiple regions andsupporting overseas factories. Toyota is currently implementing the new platform and the new unit for the
Toyota New Global Architecture (“TNGA”) globally, with Japan at the core. In Japan, Toyota is implementing
flexible production based on market needs, in order to support its large share of domestic sales. Toyota also
closed the Higashi Fuji plant of Toyota Motor East Japan, Inc. at the end of December 2020 and consolidated its
production in northeastern Japan. Toyota started construction of the prototype city, or the Woven City, at theformer Higashi Fuji plant site from February 23, 2021.
Since Toyota formed an alliance with SUBARU CORPORATION (“SUBARU”) in 2005, Toyota and
SUBARU have utilized each other’s resources in development and production. In July 2008, SUBARU
transferred 61 million SUBARU shares owned by SUBARU to Toyota with the aim to promote smoothcollaboration. As a result of this transfer, Toyota owns 16.5% of SUBARU issued shares. In September 2019, inorder to further strengthen the relationship, the two companies agreed that Toyota will increase its equity stake in
Subaru up to 20% and at the same time Subaru will acquire shares in Toyota, promoting their collaboration to“make ever-better cars beyond what either company has been able to achieve thus far” and to “expand theircollaboration to survive during this once-in-a-century period of profound transformation.”
In 2011, Toyota and the BMW Group agreed to conduct collaborative research in the field of nextgeneration lithium-ion battery technologies and for BMW to supply diesel engines to Toyota Motor Europe,
Toyota’s European subsidiary. In 2013, as part of their strategic long-term cooperation in the field of sustainablemobility, Toyota and BMW Group entered into agreements for the joint development of a fuel cell system, joint
development of architecture and components for sports vehicles and joint research and development oflightweight technologies. The two companies completed collaborative research on lithium-air batteries, a postlithium-battery solution as planned by conducting the second phase of collaborative research into next-generation
lithium-ion battery cells. The supply of diesel engines by BMW from 2014 through 2018 was completed asplanned under the agreement. As a result of the joint development of sports vehicles, the production of new
Supra commenced in March 2019.
Toyota and Mazda have been engaged in collaboration such as the licensing of Toyota’s hybrid technologies
to Mazda and the production of compact cars for Toyota at Mazda’s plant in Mexico. In May 2015, towards thegoal of making cars with more appeal, Toyota and Mazda entered into an agreement to build a long-term
partnership that would create synergies for both companies through such means as leveraging the resources ofboth companies and complementing each other’s products and technologies. After subsequent discussions,Toyota signed an agreement to enter into a business and capital alliance with Mazda in August 2017. As part ofthis business and capital alliance, the companies agreed to mutually acquire shares of the other company with theaim of advancing and strengthening their long-term collaboration, as well as to: 1) establish a joint venture that
produces vehicles in the United States; 2) jointly develop technologies for BEVs; 3) jointly develop
connected-car technology; 4) collaborate on advanced safety technologies; and 5) expand replenishment of23

products. Pursuant to this agreement, in October 2017 Toyota and Mazda mutually acquired 50 billion yen worthof shares of each other. Toyota also established EV C.A. Spirit Corporation with Mazda and Denso Corporation(“Denso”) to jointly develop basic structural technologies for BEVs. Furthermore, in March 2018, Toyota andMazda established Mazda Toyota Manufacturing, U.S.A., Inc., a new joint venture company, to produce vehicles
in the United States starting in 2021. EV C.A. Spirit Corporation concluded its operations in June 2020 anddissolved as scheduled.
In February 2017, Toyota and Suzuki, aiming to contribute jointly to resolution of social issues andachievement of the sound and sustainable development of an automobile-based society, entered into amemorandum of understanding on beginning concrete examination of a business partnership. In November 2017,
the two companies agreed to move forward in considering a cooperative structure for introducing [BEVs] inIndia, and in March 2018, concluded a basic agreement toward the mutual supply of products. In May 2018,
Toyota and Suzuki agreed that Toyota will provide Suzuki development support for a compact, ultrahighefficiency powertrain, to have Toyota Kirloskar Motor Private Ltd. (“TKM”) produce models developed by
Suzuki and to collaborate with respect to African markets. In addition, in March 2019, Toyota and Suzuki beganconsidering the concrete details of collaboration in new areas, such as collaboration in the area of production andpromotion of the widespread use of electrified vehicles, by bringing together Toyota’s strength in technologies
for electrification and Suzuki’s strength in technologies for compact vehicles. In August 2019, the twocompanies agreed that Toyota will acquire 4.94% of Suzuki’s shares and that Suzuki will also acquire Toyota
shares, further strengthening their relationship and promoting collaboration. As a first step of their collaborationin Africa, starting from September 2020, small passenger hatchback cars, which are designed and manufactured
by Maruti Suzuki, are marketed and sold at Toyota’s distributors in South Africa and other African countries. As
a second step, a compact SUV was launched in March 2021 and further lineup expansions are planned.
In December 2017, Toyota and Panasonic entered into an agreement to study the feasibility of a joint
automotive prismatic battery business. Having repeatedly held discussions since then on the concrete details of
their collaboration to achieve high-capacity and high-output automotive prismatic batteries that lead the industry
in terms of both performance and cost, as well as to contribute to the popularization of Toyota’s and otherautomakers’ electrified vehicles, in January 2019, Toyota and Panasonic agreed to establish a joint venture
related to the automotive prismatic battery business. Toyota and Panasonic established Prime Planet Energy &Solutions, Inc. in April 2020.
In June 2018, Toyota and Denso agreed to begin to consider consolidating the core electronic component
operations of both companies within Denso, and entered into a formal agreement concerning this in April 2019.
On April 1, 2020, the production and development functions of electronic components at Toyota’s Hirose Plant
was consolidated within Denso. In doing so, the companies established a speedy and competitive development
and production structure.
In April 2019, as part of the initiative to further promote the widespread use of BEVs, Toyota announced
that it will grant royalty-free licenses on the patents it holds (including some pending applications) for vehicle
electrification-related technologies, such as electric motors, power control units (PCUs), and system controls.
Toyota also announced that it will provide technical support to other manufacturers developing andmanufacturing electrified vehicles when they utilize Toyota’s power train systems.
Toyota, Isuzu Motors Limited (“Isuzu”) and Hino agreed on a new partnership regarding commercial
vehicles in February 2021. Toyota intends to combine Toyota’s connected, autonomous / automated, shared, andelectric (“CASE”) technologies with the commercial vehicle foundations cultivated by Isuzu and Hino. Throughthis collaboration, Toyota aims to accelerate societal implementation and dissemination of CASE technologies
and services and to help address various difficulties facing the transportation industry, as well as help achieve acarbon neutral society. To promote the partnership, Isuzu, Hino, and Toyota are establishing Commercial Japan
Partnership Technologies Corporation, a company for planning CASE technologies and services for commercial
vehicles. Furthermore, to smoothly construct and advance the collaboration, Isuzu and Toyota agreed on a capital
partnership.
24

In Japan, there are five major domestic manufacturers, five specialized domestic manufacturers and a
growing volume of imports from major United States and European manufacturers. The prolonged economic
slump in the Japanese economy and the recent increases in environmental awareness have also shifted consumer
preference towards more affordable automobiles, such as compact and subcompact vehicles, and towards utility
vehicles, such as mini-vans. For more than 40 years, Toyota has maintained its position as the largest automobile
manufacturer in Japan. Every year since fiscal 1999, Toyota, excluding Daihatsu and Hino, has achieved amarket share (excluding mini-vehicles) of over 40%, reflecting in part the success of the introduction of newmodels for subcompact and compact cars, mini-vans and sedans. In August 2005, Toyota launched the Lexus
brand in Japan and achieved a record top market share of 25.6% in the luxury market in 2011. Toyota aims tofurther distinguish the Lexus brand by continuing to attract new and affluent customers including customers thattypically had purchased imported vehicles.
North America
The North American region is one of Toyota’s most significant markets. Toyota has reorganized its
production structure and made improvements to its product lineup. In addition, Toyota is actively working topromote increased local operations independence in North America, in accordance with the Toyota Global
Vision, announced in 2011.
In the North American region, of which the United States is the main market, Toyota has a wide productlineup (excluding large trucks and buses), and sold 2,313 thousand vehicles on a consolidated basis in fiscal
2021. This represents approximately 30% of Toyota’s total unit sales on a consolidated basis. The United States,in particular, is the largest market in the North American region, which accounts for 88% of the retail sales ofToyota in such region. Sales figures for fiscal 2021 were 85.2% of those in the prior fiscal year.
Toyota commenced sales of the first-generation Prius hybrid model in North America in 2000. The Prius
became Toyota’s bestselling model behind the Corolla and Camry, having gained particular support amongcustomers concerned with the environment. Toyota continued further expansion of its environmentally friendly
vehicles with the introduction of models such as the Camry HV in 2017, the fully remodeled Avalon HV andRAV4 HV in 2018, the Corolla HV and RAV4 Prime in 2019, and Highlander HV, Venza HV and Sienna HV, aswell as the second generation MIRAI in 2020.
Since the introduction of the LS and ES models under the premium brand model, Lexus, in the United Statesin 1989, Toyota has expanded its Lexus sales with models including the GS, IS and RX. Toyota sold
352 thousand units in 2016, 305 thousand units in 2017, 298 thousand units in 2018, when the new model UX
and the fully remodeled ES were introduced, 298 thousand units in 2019, and 275 thousand units in 2020.
Toyota is continuing to revise its vehicle models and North American production capacities in response tochanges in market conditions. Toyota launched the all-new Camry with the first TNGA platform in North
America at the Kentucky plant in 2017 and redesigned Avalon into an all-new model in 2018. Toyota increased
the production capacity of the Tacoma from 100,000 to 160,000 in Baja California, Mexico in 2018, and of theHighlander at its Indiana plant in 2019. Toyota’s Mississippi plant started production of the remodeled new
Corolla with the TNGA platform in 2019, and its new Mexico plant (Guanajuato) commenced operations at theend of 2019 and began producing the Tacoma. The production of Toyota-brand compact cars for sale in North
America that began at Mazda’s plant in Mexico through the business alliance with Mazda in June 2015 ended in
November 2020.
In order to further strengthen competitiveness in North America, Toyota will continue the realignment ofNorth American manufacturing operations going forward. As part of this effort, in addition to the production of
the NEW SUV at a new plant in Alabama, Toyota announced in April 2021 that two new vehicle models will be
produced at its Indiana plant. Toyota will focus its production of mid-sized vehicles in the plant in Canada, alongwith the plants in Indiana and Kentucky, by commencing production of the mid-sized SUV RAV4 instead of the25

Corolla in Canada starting in 2019. Further, Toyota plans to begin production of the Lexus NX compact SUV at
the Canada plant from 2022. Toyota also introduced the RAV4 at the Kentucky plant in January 2020 in order tocatch up with the expanding SUV market. For powertrains, Toyota plans to increase the production capacity by
120,000 units per year at its West Virginia plant starting in 2021 and further increase the production capacity by
70,000 units per year in 2022. Toyota also plans to raise the production capacity of Alabama plant four-cylinder
engines and V6 engines by 230,000 units by 2021.
As for Toyota’s vehicle development in North America, the Toyota Technical Center spearheads the design,planning, and evaluation of vehicles and parts as to their ability to meet customer needs. Toyota will continue topromote self-reliance towards producing even better cars in the future.
In July 2017, Toyota launched its new North American headquarters in Plano, Texas and unified its North
American manufacturing, sales and marketing, financial services and other functions. Toyota plans to promotecollaboration and efficiencies across functions, position itself to deliver “ever-better cars” to customers and work
towards realizing sustainable growth in the North America market.
EuropeToyota’s principal European markets are Germany, France, the United Kingdom, Italy, Spain and Russia.
Toyota’s principal competitors in Europe are Volkswagen, Renault, Ford, Opel and Peugeot, as well as Korean
manufacturers Hyundai and Kia.
While competition in Europe continues to intensify, Toyota has been expanding its hybrid line-up to further
strengthen its sales operations. In parallel, Toyota has entered into supply agreements with Stellantis (formerly
Peugeot S.A. (“PSA”)) for light commercial vehicles. To strengthen its business setup so that it is less likely tobe affected by exchange rates, Toyota launched RAV4 for Russia at OOO “TOYOTA MOTOR” (“TMR”) and
C-HR at Toyota Motor Manufacturing Turkey Inc. (“TMMT”) in 2016 in the form of local production. 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. In January
2021, Toyota took financial ownership of the Toyota Peugeot Citroën Automobile (TPCA) plant in Kolin (Czech
Republic), which was a manufacturing joint venture with PSA and has been producing the compact A-segment
models since 2005. Toyota had Toyota Motor Europe S.A./N.V. (“TME”) acquire all of the TPCA shares held by
PSA, making TPCA a wholly-owned subsidiary of TME from December 2020, and renamed it Toyota Motor
Manufacturing Czech Republic (“TMMCZ”). In the second half of 2021, Toyota Motor Manufacturing France
S.A.S. (“TMMF”) will start producing Yaris Cross, a new compact SUV revealed in 2020. TMMCZ will also
start manufacturing hybrids after expansion and modernization works, which will enable us to introduce TNGA
and bridge part of TMMF’s Yaris volume. Thus, the TNGA production system will be installed across all
European factories.
In 2020, the European automotive market suffered a substantial impact due to COVID-19 pandemic
containment measures, including full-scale lockdowns and other restrictions. After the end of the containment
measures, the market recovered back to levels seen in the months prior to COVID-19, but the loss generated
during the months of lockdowns remained a major factor in the full-year picture.
Despite the volatile business environment, in fiscal 2021, Toyota achieved an all-time sales record in termsof European market share for the Toyota and Lexus brands combined and passenger car registrations for the
Toyota brand (third position). This was thanks to Toyota’s solid backorder deliveries, success in capturing newcustomers and strong line-up, especially Corolla TS/HB HV, C-HR HV, Yaris HV and RAV4. Toyota’s
consolidated vehicle sales in Europe in fiscal 2021 was 959 thousand units, a decrease of 6.8% from fiscal 2020.
In terms of model change, Toyota Motor Manufacturing (UK) Ltd. (“TMUK”) and TMMT implemented amodel change for the Corolla in 2018 and 2019, respectively. Also, in Russia, Toyota redesigned the Camry into26

an all-new model on the TNGA platform in April 2018. In February 2020, Toyota launched a new compact van
range, PROACE CITY, supplied by Stellantis, as part of its plan to strengthen Toyota’s line-up in the growing
European light commercial vehicle market. In October of the same year, in order to build on the StellantisToyota partnership and further expand its electrified line-up, Toyota launched PROACE and PROACE Verso
Electric vans, its first zero-emission battery electric vehicles in Europe. Toyota’s European hybrid line-up
encompasses a wide variety of vehicles, from compact cars to large passenger cars and SUVs since Highlanderhybrid complemented a large SUV hybrid line-up in January 2021 in order to meet the needs of customers who
tend to travel longer distances with a greater percentage of motorway mileage. Additionally, in order to cater tocustomers seeking the ultimate fun-to-drive vehicle, Toyota launched the GR Supra, the first global model ofToyota motor sports brand Toyota GAZOO Racing, produced at BMW’s Magna Steyr plant in Austria. The firstvehicles were delivered to customers in July 2019. This was followed by a highly successful launch of GR Yaris
in November 2020, a true road-going sports car developed directly from Toyota’s championship-winning World
Rally experience that is suitable for competition driving, yet affordable for many car enthusiasts.
In terms of auto parts, in October 2016, Toyota decided to produce hybrid transaxles and gasoline engines in
Poland. Toyota started production of hybrid transaxles in 2018 at Toyota Motor Manufacturing Poland(“TMMP”), a production plant for transmissions and engines, and added two gasoline engines — a 1.5L in 2017and a 2.0L in 2019 — at Toyota Motor Industries, Poland (“TMIP”), a production plant for diesel engines. In
concert with the enhancement of the gasoline engine business, the two companies were integrated in April 2017.
To further localize hybrid vehicle production in Europe, in June 2020, TMMP started production of a new 1.5L
petrol “Dynamic Force Engine” belonging to the TNGA powertrain family, which is installed in the newgeneration Yaris made at TMMF, and which will also be fit into Yaris vehicles made at TMMCZ. In April 2021,
TMMP also started production of a new generation electric hybrid transmission that works in concert with the
1.5L petrol “Dynamic Force Engine,” as well as production of the MG1 electric motor, which forms an integral
part of the electric hybrid transmission.
As part of Toyota’s global vision to evolve into a mobility company, Toyota launched a new mobility brand,
KINTO, in Europe in January 2020. Using a distinct and dedicated brand, Toyota aims to appeal to a new
category of MaaS customers. KINTO-branded services range from full-service leasing to car sharing, carpoolingand subscription. In April 2021, Toyota Fleet Mobility GmbH (TFM), headquartered in Cologne, Germany andowned 51% by Toyota Financial Services Corporation (TFSC), Japan and 49% by Toyota Motor Europe, wasrenamed KINTO Europe GmbH in order to regroup KINTO-branded mobility services under one roof, bringincreased customer value and further unlock market potential. In parallel, local KINTO organizations began
operations in main five markets — Spain, France, Italy, UK and Germany — to ensure market by market
deployment of KINTO-branded services based on viability and sustainability of the business case.
For promotion of the clean hydrogen industry in Europe, Toyota is supplying and integrating its fuel cellsystem in various applications such as CaetanoBus, Energy Observer boat, Energy Observer Developments’maritime range extender (REXH2) and Hydrogen Power Generator (GEH2), and maritime fuel-cell systems
developed by Corvus Energy. To support this rapidly-expanding interest in hydrogen technology beyond
transportation, Toyota Motor Europe established a dedicated Fuel Cell Business Group in Brussels in July 2020.
Asia
Toyota’s consolidated vehicle sales in Asia (including China) in fiscal 2021 was 1,222 thousand units, adecrease of 23.6% from fiscal 2020.
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 existing27

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 this region, Toyota has been further strengthening its business foundations by improving its productline-up, expanding local procurement and increasing production capacities.
Toyota’s principal Asian markets are Thailand, India, Indonesia and Taiwan.
In Thailand, Toyota has three plants capable of producing approximately 800 thousand units per year, notonly to meet domestic demands but to serve as a production base for regions inside and outside the ASEAN
region, and produces and exports the Hilux, the Hiace, the Corolla, the Camry and the Vios. Toyota implemented
a model change for the Hiace and Corolla in 2019 and began production of the Corolla Cross in 2020 tostrengthen its product lineup.
In India, Toyota constructed a second plant with an annual production capacity of 70 thousand units in 2011and has increased the production capacity as necessary up to 210 thousand units. In 2018, Toyota newly launched
the Yaris compact model in such second plant. Moreover, in line with the global redesigning of the Camry,
Toyota implemented a model change in India and began producing the TNGA model as well.
In Indonesia, Toyota introduced the Etios and commenced operation of a second plant in Karawang in 2013
in order to meet the diverse customer needs and the expanding market. Currently, Toyota is producing the Vios,
the Yaris and the Sienta, and the initial production capacity of 70 thousand units per year has become
130 thousand units per year. Similar to the plant in Thailand, PT. Toyota Motor Manufacturing Indonesia(“TMMIN”) is positioned as a production base for regions inside and outside of the ASEAN region, including the
production of Innova and the Fortuner at the first plant. Toyota also constructed a passenger vehicle engine plantthat commenced production in February 2016.
In 2016, Toyota began production and sales of the Sienta in Taiwan in response to diversifying demands.In
March 2019, Toyota implemented a model change for Corolla in Taiwan. In October 2020, Toyota launched andbegan production of the Corolla Cross.
China
Toyota has been conducting operations in China 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 is conducting 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 China, Toyota has been conducting joint ventures with two major partners, namely, China FAW Group
Corporation and Guangzhou Automobile Group Co., Ltd. First, with respect to the joint venture with China FAWGroup Corporation, from when production and sales of the Vios started in 2002, production and sales of the Land
Cruiser Prado, the Corolla, the Crown, the Coaster and the RAV4 has expanded to include such models. The joint
venture has developed production bases in three regions, namely, Tianjin, Changchun and Sichuan, and in
Tianjin, the joint venture completed the construction of a new production line to replace an aging existing line in
the Teda area in June 2018, and introduced the new-model SUV IZOA, which is a TNGA platform vehicle. In
Changchun, where a new plant was launched in 2012, the initial production capacity of 100 thousand units per
year has now become 130 thousand units per year. The joint venture also increased annual production capacity ofthe plant in Sichuan from 30 thousand units to 50 thousand units in the spring of 2015 to increase production of
the Prado, and is steadily increasing its production capacity of these three plants, which on an aggregate basis iscurrently approximately 690 thousand units per year. In addition, the joint venture sought to improve production
efficiency by closing small, aging production lines at the Changchun East Plant of Sichuan FAW Toyota MotorCo., Ltd. in December 2016 and the Xiqing Plant of Tianjin FAW Toyota Motor Co., Ltd. in February 2017.
28

GAC Toyota Motor Co., Ltd. (“GAC Toyota”), a joint venture between Toyota and Guangzhou Automobile
Group Co., Ltd., expanded the production and sales of the Camry, the Yaris, the Highlander, the Levin, etc. With
regard to production capacity, GAC Toyota has an annual production capacity of approximately 560 thousand
units in total due to starting a third plant in early 2018 in addition to the existing first and second plant. GAC
Toyota redesigned the Camry in 2017 and the C-HR in 2018 into an all-new model with the TNGA platform, as
well as launched new models.
In terms of auto parts, in 2014, Toyota opened a plant in Changshu in Jiangsu, China for the production of
the Continuously Variable Transmission (“CVT”) as the first CVT plant outside of Japan and in September 2015,
Toyota also began production of HEV Transaxles at the CVT plant. Toyota also launched a plant to produce
hybrid vehicle batteries in October 2015.
Total vehicle sales in the Chinese market decreased 2% from 25.78 million in 2019 to 25.21 million in 2020.
In this market, Toyota’s sales in 2020 were 1.79 million vehicles, up 11% from the previous year. In thedomestically produced passenger vehicle market in mainland China (19.44 million units), Toyota had a market
share of 9.2%. In 2020, sales of SUVs expanded as a result of customers’ value diversification. As for Toyota’s
distribution network, Toyota has been expanding the distribution network for locally produced vehicles incooperation with Chinese joint venture partners under Tianjin FAW Toyota Motor Co., Ltd. and Guanqi Toyota
Motor Co., Ltd., 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 the product lineup forboth locally produced and imported vehicles. In addition, as the market in China develops and becomes moresophisticated, Toyota plans to promote the so-called “Value Chain” businesses, such as used cars, 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 2021 were 1,027 thousand units, a decrease of 25.2% from fiscal
2020.
In these regions, which are expected to become increasingly important to Toyota’s business strategy, Toyota
aims to develop new products which meet the specific demands of each region, increase production and further
promote sales.
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 this region are global models such as the Corolla, IMV (the Hilux) and Camry. In order
to increase production of IMVs, Toyota increased annual production capacity of the plant in Argentina to
140 thousand units per year at the end of 2015. In order to expand business in Brazil, Toyota constructed a newfactory in Sorocaba with an annual production capacity of 70 thousand units, and in 2012, began production andsales of compact vehicles. Starting from the beginning of 2016, Toyota increased production capacity to
110 thousand units per year and started production of the Yaris from June 2018 and the Corolla Cross fromMarch 2021.
Moreover, in terms of auto parts, Toyota commenced first line production at a plant in Brazil for passenger
vehicle engines in February 2016, and opened the second line in July 2019.
In Africa, Toyota plans to start production of the Corolla Cross, including an HEV for the first time in South
Africa, by the end of 2021. Furthermore, in October 2019, Toyota added an IMV (the Hilux) to its lineup of
consigned knockdown production in Kenya. Toyota also plans to start knockdown production of an IMV (theHilux) in mid-2021 in Ghana.
29

Production
Toyota and its affiliated companies produce automobiles and related parts and components through morethan 50 overseas manufacturing companies in 27 countries and regions besides Japan. Toyota’s major
manufacturing facilities include plants in Japan, the United States, Canada, the United Kingdom, France, Turkey,
Czech Republic, Russia, Poland, Thailand, China, Taiwan, India, Indonesia, South Africa, Argentina and Brazil.
Daihatsu brand vehicles are produced at four factories in Japan and two manufacturing companies in two othercountries of Indonesia and Malaysia. Hino brand vehicles are produced at four factories in Japan and elevenmanufacturing companies in eleven countries, including Indonesia and Thailand, and Toyota is planning toincrease the bases in the United States and Russia. For a listing of Toyota’s principal production facilities, see“Information on the Company — Property, Plants and Equipment.”
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.
In fiscal 2020, Toyota produced on a consolidated basis 4,413 thousand vehicles in Japan and
4,406 thousand vehicles overseas, and 3,948 thousand vehicles in Japan and 3,605 thousand vehicles overseas infiscal 2021.
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 vehicles produced bythese affiliated companies. Vehicles produced by Daihatsu and Hino are included in the vehicle production
figures set forth below.
Fiscal Year Ended
March 31,
2020
2021

Units Produced
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,413,162
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,807,289
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
674,125
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,521,551
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
403,495
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,819,622

3,948,385
1,641,830
641,830
1,014,968
305,883
7,552,896* “Other” consists of Central and South America, Oceania 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 “— Capital Expenditures and Divestitures” for a description of Toyota’s recent investments incompleted plant constructions and for a description of Toyota’s current investments in ongoing plant
constructions.

30

The Toyota Production System
Toyota pioneered the internationally recognized production system known as the “Toyota Production
System” (“TPS”). The TPS is based on Toyota’s own concepts of efficient production of only necessary andquality products and efficient cost reduction, and has the following two principal elements:•“Just-in-Time,” and•“Jidoka.”

Just-in-Time is an approach in which necessary parts and components are manufactured and delivered in justthe right quantity in a timely manner just as they are needed. This allows Toyota to maintain low levels of
inventory while maintaining operating efficiency.
Jidoka is a production concept which involves immediate stop of work when problems arise in the
production line in order to stop the production of defective items from being passed on to subsequent stages ofthe process, and therefore making quality assurance an inherent part of the production process. To achieve this,Toyota’s equipment is designed to detect and highlight abnormalities and to stop whenever abnormalities occur.
Toyota also authorizes its machine operators and other members of its production team to stop production
whenever they note anything suspicious. This helps Toyota to build quality into the production process by
avoiding defects and preventing the waste that would result from producing a series of defective items.
Toyota believes that the TPS allows it to achieve mass-production efficiencies even in high-mix,
low-volume production. This belief gives Toyota the flexibility to respond to changing consumer demand
without significantly increasing production costs. While the TPS remains the basis of Toyota’s automobile
production, the system has been expanded for use in Toyota’s parts production, logistics and customer service
activities as well.
Through the TPS, issues are identified and analyzed at the actual site, the entire production process is madevisible and production efficiency as well as product quality are improved through the application of measures toaddress the sources of problems. As one method to implement these measures, Toyota utilizes sophisticatedinformation technologies to improve each step of its vehicle development process, from product planning tocommencement of mass-production. These technologies are intended to enhance flexibility, simplification,
quality, cost competitiveness and speed. Specifically, detailed virtual assembly and other simulations of
manufacturing processes are conducted on computers for a new vehicle or new production equipment/systems
before a prototype is made. An actual prototype is made only after defects and related issues have been identified
and resolved by computer simulation, thereby minimizing the time required for rebuilding prototypes andsignificantly shortening the time required before starting mass production. Moreover, this system is used toprepare virtual factories and other visual aids in order to facilitate training and communication at overseas plants
and enable the efficient transfer of necessary technology and skills.
In January 2018, Toyota established the TPS Group, and in order to stay true to itself, Toyota has gone backto its roots, positioning TPS as the bedrock of its management, and is moving forward with initiatives to ensurethat TPS is passed on to the future as part of Toyota’s DNA. Specifically, Toyota will have the concepts of“Just-in-Time” and “jidoka,” which are the two main pillars of the TPS, spread within the entire company andhave all divisions, including technical and administrative divisions, work to reduce lead time and ensure that
abnormalities are made visible, through which Toyota will achieve results by both cost reduction throughimproved productivity ,as well as improved work quality.
Toyota is currently working towards producing even better cars across the company. With the aim ofrealizing “cars that offer a rewarding experience for customers” through “truly competitive manufacturing” interms of production technology and manufacturing, Toyota is developing innovative production systems,
equipment and processing technology and introducing them to its mass-production line in due course.
31

Distribution
Toyota’s automotive sales distribution network is the largest in Japan. As of March 31, 2021, this network
consisted of 268 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 theremainder is 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
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 175 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, 2021.
Dealers
ToyotaOwned

ChannelToyota brand . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lexus brand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 company
21 outlets

Independent

Outlets

267 companies
154 outlets

4,574 outlets
175 outlets

Outside Japan, Toyota vehicles are sold through approximately 168 distributors in approximately
203 countries and regions. Through these distributors, Toyota maintains networks of dealers. The chart below
shows the number of Toyota distributors as of March 31, 2021 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

Improving Efficiency
Toyota is working on the following to create a corporate structure allowing for efficient development,
production and sales that can respond flexibly to changes in the external environment:•

working with suppliers as one team to dramatically increase the efficiency of development;•

creating a production structure that can better withstand fluctuations in demand and currency exchange
rates; and•strengthening sales capabilities in line with local conditions.

32

Toyota also plans to improve profitability and enhance operating efficiency by continuing to pursue
aggressive cost reduction programs, including:•

improving product development and production efficiencies through the re-integration and improvementof vehicle platforms and power trains as well as through the development of electronic platforms whichorganize electronic devices of vehicles as a package and standardize electronic structure andinfrastructure;•

reinforcing and promoting Ryohin-Renka Cost Innovation (“RR-CI”) activity, which aims for theelimination of waste in all processes from design to production while ensuring the reliability and safetyof each part;•“developing a real cost-competitive structure” by working together with suppliers;•

applying advanced information technologies to improve efficiency throughout the product development
and production processes;•

globally reinforcing the supply base under an open and fair purchasing policy;•

streamlining production systems; and•improving the efficiency of domestic and international distribution.

Toyota is further improving production efficiency by installing more versatile equipment and systems,
modifying vehicle body designs to allow for a greater variety of models on each production line and sharing
more parts among vehicles, not simply among different models but also among different platforms.
In April 2012, Toyota announced a new development framework, the TNGA, which reconciles sweeping
advances in product appeal with cost reductions. The new framework sets forth an architecture that incorporates
not only the three fundamental vehicle functions of moving, turning and stopping, but also ergonomics such as
driving position as well as freedom of design. Toyota plans to efficiently develop cars with high basicperformance attributes by developing parts and modules based on this architecture. The TNGA provides forhandling multiple models simultaneously in grouped development projects that will increase the sharing of partsand core vehicle components. This sharing, carried out in cooperation with suppliers, will result in lowered costs,
thereby allowing developmental manpower and funds to be reinvested in R&D to meet consumer preferences andR&D to meet regional needs, resulting in further product improvement.
By April 2013, Toyota established systems to rapidly promote the TNGA and carried out productdevelopment under this new way of doing business. As a result, Toyota realized high basic performance andmarketability in the Prius that was introduced in Japan in December 2015. Toyota subsequently applied the
TNGA initiatives to the Camry, Lexus LC and LS in 2017 and the Crown and Corolla Sport in 2018. Toyota hasrolled out, and plans to continue to roll out, the results of such development to other vehicles as well.
Realizing a Smart Mobility Society that expands through connected car technologies
In the midst of rapidly changing societies, including the falling birth rate and aging populations indeveloped nations, an increasingly diverse range of energy sources and the evolution of IoT, among others, theautomotive industry is facing a time of profound transformation that could happen only once in a hundred years.
As a company responsible for the freedom of mobility, which is one aspect of social infrastructure, Toyota isfirmly determined to contribute to solving social issues by changing the very ways in which people, things, andinformation flow through the world. Based on this commitment, Toyota is moving forward with initiatives
striving to realize a smart mobility society, in which people can “enjoy freedom of movement and feel at easeand excited,” by connecting vehicles, people and communities with its connected car technologies.
Our Connected Strategy for Realizing Connected Platforms
Connecting cars is not only providing new value and services to customers, but creating new modes of use
and new roles in society for cars. To stay at the forefront of this evolution, Toyota established an in-house33

Connected Company in April 2016 and announced its Connected Strategy in November of the same year. This
strategy comprises three pillars that we initiated almost simultaneously.
•

Pillar 1 — Connect All Cars
The key to connecting all cars is on-board data communication modules (“DCMs”), which connect cars
to data centers. In 2002, Toyota commercialized its DCMs and launched the G-BOOK service for
Toyota vehicles (this service was replaced by T-Connect in 2014). In 2005, DCMs became a standard
feature in Lexus cars, and Toyota launched the G-Link service in Japan before expanding it to North
America and China. As the first step towards connecting all vehicles, in June 2018, Toyota also
launched sales in Japan of the new Crown and Corolla Sport with DCMs as standard features for all
vehicles. This marked the start of Toyota’s full-scale roll out of connected cars. Toyota completed
installation of DCMs on virtually all passenger vehicles it sells in Japan and the United States in 2020,
and will steadily equip more vehicles with DCMs in Japan and other major markets around the world
going forward.

•

Pillar 2 — Creation of New Value and Business Revolution
As the number of connected cars on the road increases, so does the big data they generate and Toyota isusing this data to contribute to the good of customers and society while revolutionizing its own
businesses. Aggregate route history maps were made publicly available after the Great East Japan
Earthquake, and such data has subsequently been used in evacuation, response, and recovery operations
following several natural disasters. Furthermore, by analyzing the diverse information collected fromcars on the road using big data approaches, Toyota will be able to utilize that information to create andenhance services that provide safety and peace of mind. Making DCMs standard features also makes
Toyota’s online services more convenient and easier to use. The voice recognition-enabled AI virtual
agent understands passengers’ natural speech and performs tasks such as setting the destination for thenavigation system. Toyota also has operators standing by 24 hours a day, 365 days a year, to provide amore in-depth response to customer requests. By offering both virtual (AI) and real-world (operators)
services, Toyota seeks to provide what it calls “Human Connected Services.”•

Pillar 3 — Creation of New Mobility Services
Toyota will accelerate cross-industry collaboration through the Mobility Service Platform (“MSPF”).
Using the MSPF, Toyota is taking an open approach and working together with all kinds of service
providers to contribute to the creation of new mobility services. Toyota has already begun a range ofcollaborative initiatives. In May 2016, Toyota and Uber Technologies, Inc. (“Uber”) began to consider
a partnership in ride-sharing. In 2017, Toyota conducted a pilot program for its Smart Key Box with
the United States car-sharing company Getaround, Inc.; began a partnership with Grab Holdings Inc.
(“Grab”), the leading ride-hailing service company in Southeast Asia; and began verification testing of
connected taxis with the Tokyo Taxi-Hire Association. Going forward, Toyota will work to deepen
these and other initiatives in order to create new mobility services and accelerate theircommercialization.

The Connected Strategy has three facets: defense, Kaizen (improvement) and offense. Defense means toestablish long-term relationships of trust with customers, and to secure and expand the existing value chains;
Kaizen (improvement) means to rapidly improve productivity, quality, and lead time of work by changing
existing work habits; and Offense means to create new value for our cars and to create our new mobility
business.
As practical measures for realizing a Smart Mobility Society based on the Connected Platforms, Toyota is
promoting: 1. “Connected with vehicles and roads (SAFETY) — Cooperative ITS, driving assistance functions
and automated driving”; 2. “Connected with people (COMFORT) — Connected Service”; and 3. “Connectedwith society and the community (ECO & CONVENIENCE) — Maas (Mobility as a Service).”34

Connected with vehicles and roads (SAFETY) — Cooperative ITS
Enhancing transport systems requires taking a general approach that addresses various factors that are
pertinent not only to vehicles but also roads, people and public transport systems in order to ensure smooth andefficient movement of people and vehicles and to build a safe transportation environment. This covers a wide
scope, including VICS and ETC (Electronic Toll Collection System), which are already standard in Japan.
“Cooperative ITS,” which combines cutting edge IT and vehicle technology, is in development and has begun tobe partially implemented. With the aim of achieving a safe and comfortable transportation society, Toyota is
promoting initiatives to populalize and increase the sophistication of “Cooperative ITS,” which provides
information that cannot be captured by car sensors to drivers through the vehicle-to-infrastructure (V2I) andvehicle-to-vehicle (V2V) bidirectional communication systems, therby reducing accidents.
•

The operation of “ETC2.0” commenced in 2009 and corresponding products are available for purchase.
Mainly for use on highways, this service provides drivers with information related to road traffic andsafe driving that is transmitted from road infrastructures to car navigation systems via video and voice.

•“ITS Connect,” a driving safety support system that uses a dedicated ITS frequency of 760 MHz, wasintroduced in the fall of 2015. Through direct and continuous exchange of information between vehicles
and the road and among vehicles, this system aims to mitigate accidents near intersections, which havebeen difficult to mitigate to date. The system also includes Communicating Radar Cruise Control
features, which supports smooth acceleration and deceleration when following behind another vehicle.

Toyota is promoting the development of systems with further enhanced functions, and will aim at therealization of automated driving in which all drivers can move safely, smoothly and freely by harmonizing ITS
technology and vehicle control technology.
Connected with vehicles and roads (SAFETY) — driving assistance functions and automated driving
Toyota’s driving assistance functions offer functions that assist drivers with an aim to lessen the burden ofdriving, enhance safety and provide to everyone the pleasure of driving. Toyota has commercializedenhancements to various functions that assist the driver in sensing external information, avoiding danger andmaking appropriate maneuvers.
In 2015, Toyota commercialized the Toyota Safety Sense, a package that includes Automatic Emergency
Braking (AEB) and and driving support functions. In 2018, Toyota commercialized the new-generation Toyota
Safety Sense (Toyota Safety Sense 2.0 in the United States), which has enhanced AEB and driving support
functions. In 2020, Toyota commercialized Toyota Safety Sense 2.5 and Toyota Safety Sense 2.5+ withadditional functions, such as to address accidents at intersections. The most recent Toyota Safety Sense 2.5+ has
the following functions:•“Pre-collision System” is an AEB system that detects obstacles, cars in front and crossing pedestrians
during both day and night, as well as crossing bicycles in daytime, all through a sensor installed in a
vehicle, and has recently been upgraded to perceive possibilities of a crash with oncoming vehicles
when performing a left-hand turn or oncoming crossing pedestrians when performing a left- or righthand turn at intersections. If a collision seems likely, it proceeds to activate warnings as well as brakeassistance, which aids the driver’s operation of the brake, or the automatic braking system, which aids inavoiding the collision altogether or mitigates any damage.

•“Full-Speed Range Dynamic Radar Cruise Control” is an advanced cruise control system, using radar
and a camera designed to adjust the vehicle’s speed, that helps the driver maintain, at speeds ranging
from zero to a preset speed, a preset distance from the vehicle in front of the driver. When the vehicle infront of the driver starts to move, the vehicle also resumes follow-up cruising to maintain a preset
distance once the driver causes her vehicle to start moving again. This technology has also added theCurve Speed Reduction Function, which estimates the size of an approaching curve using AI
technologies and controls the vehicle’s speed when the driver starts to turn the steering wheel.
35•“Lane Tracing Assist” is a system that, when the Dynamic Radar Cruise Control function is running,uses a camera to detect white or yellow lane markers while driving and assists the driver’s operation of
the steering wheel by controlling the electric power steering in order to help keep the vehicle travelingin the middle of lane.

•“Lane Departure Alert with Steering Assist” is designed to issue an audio/visual warning if it detects an
inadvertent departure outside of visibly marked lanes. The system is also designed to provide gentle
corrective steering if the driver does not take corrective action. It also includes Road Edge Detection,
which scans for the boundary between asphalt and the side of the road, such as grass, soil or a curb, andhelps keep drivers in their desired lane.

•“Automatic High Beam” detects the headlights of oncoming vehicles or taillights of vehicles running infront and adjusts the headlight range, automatically switching to low beam or high beam, in order toavoid blinding the visions of drivers with bright lights, as well as to secure drivers’ forward vision atnight.

•“Road Sign Assist” is designed to detect certain traffic signs, such as speed limit signs, stop signs,
do-not-enter signs and yield signs, using a forward-facing camera, and display them on a multiinformation display inside the vehicle.

•“Traffic Movement Notification” promotes attentive driving by monitoring the movement of the vehicle
ahead and notifying the driver with an indication in the vehicle’s dashboard and an audible alert if thedriver remains stationary after the vehicle ahead drives four or more meters away.

Toyota has completed deployment of Toyota Safety Sense on nearly all models sold in Japan, the UnitedStates and Europe at an affordable price aimed at widespread adaption. In the United States, Toyota proceeded tomake this technology a standard feature on almost all of its vehicles and achieved the voluntary commitment goal
to equip AEB (Automatic Emergency Braking) on 95% of vehicles for sale by 2022, as agreed under theindustry’s AEB MOU, two years ahead of schedule, and equipped AEB on 97% of vehicles for sale in 2020. The
accumulated global shipments of vehicles with Toyota Safety Sense installed exceeded 22 million vehicles (ofwhich approximately 9 million vehicles were shipped to the United States) as of the end of December 2020.
In addition to the above, Toyota is globally promoting the development of “Parking Support Brake,” which
detects obstacles in the front or rear of the vehicle using ultrasonic sensors mounted inside in the front and rear of
the vehicle and supports avoiding collisions at low speeds and accidents caused by misapplication of theaccelerator. Furthermore, to address abnormal operation of the accelerator, even when no obstacles are present,
Toyota commercialized the Acceleration Suppression Function that was developed using big data. Toyota has
been widely sharing the concept and algorythm of this function within the industry from the development stage
in keeping with the philosophy that collaboration is essential for safety. The Acceleration Suppression Function
is installed only in vehicles in Japan at present, but Toyota will examine the possibility of deployment in vehicles
in other regions in the future after conducting analyses of accident circumstances and big data, as well as thestudy of customer needs.
Connected with people (COMFORT) — Connected Service
The driving experience can be enriched and its convenience can be improved through information
communication technologies that add a new “connecting” function to the basic vehicle functions of “running,turning and stopping.” Examples of the connecting function include the following:•

Toyota is advancing enhancement of car navigation systems, such as car parking maps that display
detailed information inside car parks, as well as the VICS system (Vehicle Information andCommunication System) that provides real-time road traffic information such as congestion, accidents,
traffic restrictions and parking. Car navigation systems play an increasingly important role in providing
drivers with various types of information on safety, smooth traveling, comfort and convenience.
36

•T-Connect/G-BOOK is the latest information network service that merges the latest network
technologies and car multimedia a step ahead of the arrival of the ubiquitous network society.
T-Connect/G-BOOK provides various types of information useful for driving, as well as safety andsecurity services that detect unusual conditions in the vehicle, thereby supporting a lifestyle with one’s
vehicles anytime and anywhere through a network. In 2005, Toyota started G-BOOK ALPHA and
G-Link for Lexus, each with additional various features including traffic congestion forecast service. In
2007, Toyota launched G-BOOK mX, which in addition to the well-received conventional safety andsecurity services of G-BOOK, introduced even more useful car navigation services such as“Map-on-Demand”— the world’s first technology for automatically updating map data — and “Probe
Communication Traffic Information” that provides drivers with highly precise information on traffic
congestion. In 2014, Toyota launched T-Connect, which in addition to conventional telematics services,
provides new services and functions through the distribution of applications to on-board devices, as well
as destination and other information searches through the adoption of a voice recognition system. In
2018, Toyota made efforts to further enhance T-Connect and added services such as the “e-Care Driving
Guidance,” which diagnoses the condition of a car from the vehicle data and an operator advises thedriver in the event of abnormality, and further guides the driver to a dealer if necessary, and “Tsunagaru(Connected) Car Insurance Plan,” which is an insurance plan based on driving behavior data.
Furthermore, by standardizing the DCM, Toyota improved online services such as the “Voice
Recognition-enabled AI Virtual Agent” and “Hybrid Navi.”•

In 2019, Toyota enhanced connectivity with smartphones, the ever-evolving devices that have become apart of our lives. By equipping car displays with audio functions and smartphone-linked functions,drivers can directly access their favorite smartphone functions, such as phone, messages and music aswell as navigation guidance, through the display, thereby enabling them to safely use smartphone
applications on the road.

•

The driver monitor camera that is equipped in “Advanced Drive”, the latest new advanced driving
assisting technology of Toyota/Lexus Teammate, alerts the driver through means such as the monitor
display when the system detects signs of drowsiness and connects the driver to an agent who speaks to
the driver to suggest that the driver take a break when further drowsiness is detected.

•

HELPNET is an emergency dial system that, in the event of a traffic accident or medical emergency,transmits information required for emergency rescue, such as present-location data and vehicle details,
either automatically or with the touch of a button. It immediately contacts police and fire departments
through the HELPNET Operation Center. This system is integrated into T-Connect/G-BOOK and
G-Link to improve the quality of services. In 2018, Toyota newly developed the “D-Call Net,” which isa rescue service that is interlocked with the activation of the airbag. It instantly analyzes the damages tocar occupants from the car data at the time of the collision, and with the cooperation of the fire
departments, dispatches helicopter ambulances if it is diagnosed that the possibility of serious injury ishigh. HELPNET shortens the time taken to report following an emergency situation, which contributes
to decreasing the number of traffic accident fatalities and reducing the level of impact, while at the sametime aiming to prevent secondary disasters and ease traffic congestion.

In addition to the above, Toyota also operates a Japanese-language web portal for automobile information,GAZOO.com. The name “GAZOO” originates from the Japanese word gazo, meaning images. GAZOO wasestablished as an Internet membership service linking Toyota, its national dealer network and GAZOO members,
and has provided information on new and used Toyota vehicles and related services, as well as online shopping
services. GAZOO later expanded to include information on other automakers, as well as a rich blog feature as asocial networking portal site on automobiles.
Furthermore, in 2010, by utilizing technology cultivated through the Internet and telematics services, Toyota
developed the Toyota Smart Center (“TSC”) that optimally controls electricity and links BEVs and PHEVs withhomes. Toyota aims to offer new services, achieve better vehicle quality and enhance product attractiveness, as
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well as contribute further to society by utilizing the vehicle information, road conditions and other parameterscollected via telematics services and stored at the TSC. With regard to contribution to society, Toyota beganoffering the Big Data Traffic Information Service in June 2013, through which traffic information, statistics andother related information are provided to local governments, universities and businesses to support traffic flow
improvement and assist disaster prevention measures. In December 2016, Toyota launched the TC Smartphone
Navigation free-of-charge to users, including those other than Toyota users, to provide readily usable route
history maps. Toyota plans to continue to work with new information technologies and the IT industry toestablish a framework for TSC’s global implementation and to realize a mobility society of the future.
In 2016, Toyota has been working actively on “connected car technology” and alliances with othercompanies for effective vehicle data utilization to “make ever-better cars” and for safer and securer “connected”
service. In January 2016, Toyota announced a “connected vehicle framework” to increase installation of DCMs
into a broader range of its vehicles starting in the United States from 2017. In April 2016, Toyota established a
new company, “Toyota Connected, Inc.,” in the United States to consolidate and analyze information collectedfrom vehicles and to develop new products, and thereby promoting “making ever-better cars” through utilizing
big data.
As a further engagement in the insurance industry, Toyota established Toyota Insurance Management
Solutions USA, LLC (“TIMS”), a new U.S. telematics car insurance services company, to promote analysis of
big data and development of algorithms. TIMS provides telematics insurance services best suited to Toyota’s
customers by consolidating Toyota’s data, financing and insurance knowhow.
Connected with society and the community (ECO & CONVENIENCE) — MaaS (Mobility as a Service)
In November 2016, based on the proliferation and popularity of mobility services such as car-sharing,
Toyota started to establish MSPF, which has various functions to support mobility services. MSPF is a platformthat aggregates and covers individual business functions, such as vehicle management systems and leasing
programs, that Toyota developed and offered to mobility service providers such as ride-sharing operators whenworking together with them. In addition, as one example of the functions that MSPF offers, Toyota developed thesmart key box (“SKB”) that enables users to lock and unlock doors and to start the engine with their smartphones— thus providing a safer and more secure way of locking/unlocking doors and starting the engine. Furthermore,
Servco Pacific Inc., a Toyota dealer in Hawaii, began a car-sharing services program in July 2018.
In terms of ride-sharing, in May 2016, Toyota and Uber entered into a memorandum of understanding to
explore collaboration with respect to ride-sharing. In August 2018, the scope of collaboration was expanded:
Toyota and Uber will be developing vehicles utilizing the technologies of both companies and used exclusively
for ride-sharing, and introducing the same into Uber’s ride-share network. Technology establishment of thein-vehicle equipment and control interface is underway. Furthermore, in April 2019, in order to accelerate thedevelopment and practical realization of automated driving vehicles for ride-sharing, Toyota announced that it
will invest in Uber Advanced Technologies Group (“Uber ATG”) together with Denso Corporation and SoftBank
Vision Fund L.P. Uber ATG was acquired by Aurora Innovation Inc. (“Aurora”) in December 2020. In February
2021, Toyota announced that Toyota and Denso will team up with Aurora to develop and manufacture automateddriving vehicles based on the mass-produced Sienna for ride-hailing companies such as Uber.
Toyota invested in May Mobility, a pioneering venture company engaged in the development of theautomated driving technologies and mobility service businesses in North America. In May 2021, May Mobility
announced that it would launch public road testing of automated driving vehicles that are based on the Sienna
and equipped with May Mobility’s autonomous driving kit (ADK).
In China, Toyota announced its collaboration with Didi Chuxing (“DiDi”) on e-Palette in January 2018. In
July 2019, Toyota and DiDi agreed to expand their collaboration to include MaaS in China, pursuant to which
Toyota has established a joint venture with GAC Toyota Motor Co., Ltd. (GTMC) for vehicle-related services for38

ride-hailing drivers. Through this agreement, Toyota and DiDi provide automobile maintenance support utilizing
MSPF and safe driving guidance to ride-hailing drivers and promote initiatives such as to reduce automobile
accidents. The two companies also plan to shift to full-scale implementation of services that they have beendeveloping in China to realize more-efficient and high-quality ride-hailing businesses.
In Southeast Asia, Toyota started to collaborate with Grab in August 2017, and commenced a pilot programin Singapore to collect driving data generated from vehicles owned by Grab. In June 2018, Toyota further
expanded the collaboration with Grab and invested in Grab. Toyota moved forward with providing various
connected services that use MSPF to Grab. As a specific example of such services, in December 2018 Toyota
provided the total care service for vehicles to 1,500 vehicles owned by Grab. Toyota started both to provide highefficiency maintenance reflecting TPS, as well as to cooperate with local insurance companies with the aim ofproviding insurance services by utilizing driving data. The two companies launched the same initiatives inIndonesia, the principal market for Grab, in 2020.
In August 2016, Toyota and Japan Federation of Hire-Taxi Associations entered into a memorandum of
understanding to explore areas for collaboration, so as to develop and introduce the “Japanese taxi of the future.”
In February 2018, Toyota invested in JapanTaxi Co., Ltd. Toyota and JapanTaxi agreed on business collaborationin such areas as big-data collection, connected terminals for taxis, and the joint development of vehicle-dispatch
support systems to revitalize the taxi industry as a whole and improve its efficiency. Later, Toyota further
developed a collaboration with Mobility Technologies Co., Ltd., which was created from JapanTaxi in April
2020 through business combinations. The two companies are advancing efforts in both tangible and intangible
aspects to realize a free and seamless mobility society utilizing the mobility of taxies.
Meanwhile, in October 2018, Toyota agreed to work with SoftBank Corp. (“SoftBank”) on the realization ofa Mobility Network that delivers safe and comfortable mobility to all people. In February 2019, Toyota and
SoftBank established a joint venture, MONET Technologies Inc. (“MONET”). Anticipating the realization of an
automated driving society, cooperation with local governments in Japan to provide next-generation on-demandmobility service began. The number of cooperating local governments has increased to more than 100 as oftoday. In March 2019, MONET established the Monet Consortium in an effort to promote inter-corporate
cooperation that aims for the realization of mobility innovation. The Monet Consortium currently has more than660 participants.
With the background of expanding mobility services and the tightening of data regulations in Europe,
Toyota established Toyota Connected Europe, Limited in March 2018, and is promoting car-sharing businesses
by utilizing MSPF in Europe in coordination with local dealers.
In January 2018, at “2018 International CES” held in Las Vegas, Nevada in the United States, Toyota
announced the “e-Palette Concept,” an EV designed exclusively for Autono-MaaS, leveraging electrification,connected vehicles and automated driving technologies. The e-Palette Concept can be adapted for various
services, such as passenger transportation, logistics services or retail services, and is the embodiment of Toyota’s
concept of “new mobility” that supports the lifestyles of its customers. Amazon.com, Inc., DiDi Chuxing, Pizza
Hut, LLC, Uber and Mazda Motor Corporation are collaborating with Toyota as initial launch partners in order toexplore vehicle specifications that are even more practical and to ensure the realization of a new mobility service.
Going forward, Toyota is planning to support the transportation of athletes and staff in the Olympic andParalympic village in the 2021 Tokyo Olympic and Paralympic Games, and launch the service in the early 2020s
upon conducting a pilot program with alliance partners. In December 2020, Toyota announced the e-Palette,
which has made strides towards practical use, and an operations management system that supports the provisionof e-Palette services, at an online event.
In March 2020, Toyota and Nippon Telegraph and Telephone Corporation (“NTT”) agreed to enter into abusiness and capital alliance with the aim of building a long-term and continuous cooperative relationship thatenables the commercialization of smart city businesses, which can solve various issues by improving the39

efficiency and sophistication of functions and services in cities and regions and create new value. The twocompanies will jointly build a “Smart City Platform” as a core foundation for smart cities and introduce it invarious cities in Japan and worldwide.
In October 2020, Toyota and KDDI Corporation (“KDDI”) agreed on a new business and capital alliancewith the purpose of further strengthening the relationship between the two companies. With a view to developing
next-generation telecommunication standards, Toyota and KDDI will jointly conduct research and development
focused on telecommunication platforms that enable optimal communications between towns, homes, people andcars, develop an operations and management system for next-generation connected cars and work to addresssocial issues arising between urban and rural areas and regional communities using big data.
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, TFSC, to oversee the management 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 offinancial services, in accordance with its strategy of developing auto-related financing businesses in significant
markets. Accordingly, Toyota currently operates financial services companies in 40 countries and regions, which
support its automotive operations globally.
Toyota’s sales revenues from its financial services operations were ¥2,162.2 billion in fiscal 2021 and¥2,193.1 billion in fiscal 2020. In fiscal 2021, there was major downward pressure on profit in the financing
business due to a decline in sales of new cars due to the impact of COVID-19, but the business as a whole saw
steady growth mainly due to higher used-vehicle prices in the United States, lower interest rates worldwide andthe accumulated balance of earning assets resulting from the enhanced used-vehicle financing and othermeasures. Under such circumstances, as a result of Toyota’s continued collaboration with dealers in various
countries and regions and efforts to expand products and services that meet customer needs, Toyota’s share offinancing provided for new car sales of Toyota and Lexus vehicles in regions where TFSC operates remained at ahigh level of approximately 35%, and the balance of earning assets continued to steadily increase globally, withthe exception of some countries. In addition, Toyota is making efforts to provide both its customers and dealerswith stable financial services by diversifying its funding methods in recent years, such as issuing Green Bonds inaddition to using already existing means as commercial paper, corporate bonds, bank borrowings, ABCP (Asset
Backed Commercial Paper) and ABS (Asset Backed Securities). Furthermore, Toyota continued to perform
detailed credit appraisals and serve customers by monitoring bad debt and loan payment extensions, and thepercentage of credit losses remained low, at 0.23% and 0.29% in fiscal years 2021 and 2020, respectively.
Toyota continues to work towards improving its risk management measures in connection with credit andresidual value risks.
Toyota Motor Credit Corporation is Toyota’s principal financial services subsidiary in the United States.
Toyota also provides financial services in 39 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.
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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 beloved-car 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 awareness. In Europe,
full service 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 theconvenience of customers’ daily payments and creating a foundation for a mobility society.
Finance receivables for all of Toyota’s dealer and customer financing operations were ¥19,205.7 billion asof March 31, 2021, representing an increase of 12.7% as compared to the previous year. The majority of
Toyota’s financial services are provided in North America. As of March 31, 2021, 54.6% of Toyota’s financereceivables were derived from financing operations in North America, 13.5% from Asia, 13.2% from Europe,
8.3% from Japan and 10.4% from other areas.
Approximately 45% of Toyota’s unit sales in the United States during fiscal 2021 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 otherautomobile 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 “Operating and Financial
Review and Prospects — 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 the41

time 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 whollyowned 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.
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, 2021, Toyota Finance Corporationhas 16.3 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 ¥1,052.3 billion in fiscal 2021
and ¥1,504.9 billion in fiscal 2020.
Information Technology
See “— Automotive Operations — Realizing a Smart Mobility Society that expands through connected car
technologies” for a description of Toyota’s information technology.
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.

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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
21 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 Procedure (WLTP) 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,
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 2017 to 2025. The
rule would bring federal emission standards for these pollutants in line with California’s emission standards.
The new Tier 3 rule also required reductions in gasoline’s sulfur content beginning in 2017.
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 allow 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 mandate for zero-emission vehicles. Pursuant to the mandate, the
CARB requires that a specified percentage of a manufacturer’s passenger vehicles and light-duty trucks sold in
California be “zero-emission vehicles” (vehicles producing no emissions of regulated pollutants), 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.
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In January 2012, the CARB adopted the Advanced Clean Cars (“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 andparticulate matter) and greenhouse gases from cars and light-duty trucks for model years 2015 to 2025. The
regulations also include standards for evaporative emissions and guaranteed useful life.
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.
Other States’ Standards
Thirteen states (Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New
York, Oregon, Pennsylvania, Rhode Island, Vermont and Washington) have adopted regulations substantiallysimilar to California’s low-emission vehicle requirement, and 12 of these have adopted California’s
zero-emission vehicle requirement. In September 2019, the Governors of Minnesota and New Mexico indicatedthat they planned to adopt California’s low vehicle emissions requirement as well.
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.
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 Real Driving Emission(“RDE”) regulations, which require manufacturers to conduct on-road emissions tests using portable emissions
testers to demonstrate compliance. Since September 2017, manufacturers have been required to reduce thedivergence between the regulatory limit tested in laboratory conditions and the values of RDE tests, and thisdivergence factor was made more 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 On-Board Diagnostics (OBD) regulations have also been tightened in terms of bothsubject 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.
Chinese Standards
The next-generation emissions regulations for passenger vehicles, or Level 6 Emissions Regulations(China 6), were issued as GB18352.6-2016 at the end of 2016, pursuant to which tighter requirements will be
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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 On-Board Diagnostics (OBD) regulations have also been tightened in terms of bothsubject parts and regulatory values. With respect to fuels in the market, the quality standards and theimplementation 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 areas where the air quality improvement is an urgent necessity, China 6 is scheduled
to be implemented from July 2019 ahead of the implementation throughout China.
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 requires automobile manufacturers to improve their vehicles to meet
specified fuel economy standards. Fuel economy standards are established according to the types of vehicles, andare 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 2025March 2026) or fiscal 2031 (April 2030-March 2031). From 2020, if the WLTP mode is applied as a vehicle
emissions test cycle, fuel economy test must be also conducted based on the WLTP 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 vehicles, light-duty trucks and medium-duty passenger
vehicles for model years 2017 through 2025. Pursuant to the rule, which was finalized in August 2012, thesevehicles are required to meet an estimated combined average emission level of 163 grams of carbon dioxide per
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mile 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 estimated combined average fuel economy level of
49.6 miles per gallon in model year 2025.
On August 24, 2018, the EPA and the NHTSA proposed the Safer Affordable Fuel Efficient (“SAFE”) rule,
which was meant to replace the rule enacted in 2012 with less stringent greenhouse gas emission standards and
CAFE standards. On September 27, 2019, the EPA and the NHTSA issued Part 1 of the final SAFE rule, which isalso referred to as the One National Program rule. The One National Program rule withdraws California’s waiver
to issue its own, more stringent greenhouse gas emission standards under the LEV III program. The One National
Program rule also calls into question the validity of California’s zero emission vehicle mandate (and the otherstate laws adopting it). On March 31, 2020, the EPA and NHTSA issued Part 2 of the final SAFE rule, whichcalls for a 1.5% annual increase in the stringency of greenhouse gas emissions and CAFE standards for cars andlight trucks for model years 2021 through 2026, as opposed to the 5% annual increase called for in the prior ruleenacted in 2012. The EPA and NHTSA project that average fuel economy for 2026 model year vehicles will be
40.4 miles per gallon, compared with 46.7 miles per gallon projected for 2025 model year vehicles under theprevious rule enacted in 2012.
California has pledged, despite the SAFE rule, to maintain its more stringent greenhouse gas emission
standards under the LEV III program as well as its zero-emissions vehicle mandate. On November 15, 2019,
California, 22 other states, the District of Columbia, and the cities of Los Angeles and New York filed suit in the
U.S. Court of Appeals for the District of Columbia to challenge the revocation, pursuant to the One National
Program rule, of California’s waiver.
On January 20, 2021, President Biden issued an Executive Order that directs the EPA and NHTSA to review
the SAFE rule and make a recommendation regarding whether the rule should be suspended, revised, or
rescinded; and on February 8, 2021, the U.S. Court of Appeals for the District of Columbia granted the Biden
Administration’s motion to hold the litigation in abeyance. It is expected that, by July 2021, the EPA will present
a proposal for fuel economy and emission standards that are more stringent than the standards under the SAFE
rule. Four other automakers had reached a voluntary, non-legally binding agreement with California to increase
fuel efficiency by 3.7% each year (rather than 1.5% under the SAFE rule). It is unclear whether the EPA will
adopt this new California compromise standard or promulgate more stringent standards. Whatever the outcome,Toyota plans to meet applicable fuel economy and emissions standards by further developing fuel-efficienttechnology, alternative fuel technology and other advanced technology.
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 cars andlight commercial vehicles for the period after 2020. Average emissions of the EU fleet of new cars and lightcommercial vehicles in 2025 must be 15% lower than in 2021, and by 2030, emissions must be reduced further to37.5% and 31% of 2021 levels for cars 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.
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 is preparing a revision of these carbon dioxide
emissions targets as part of its “Fit for 55%” package, although these revisions have not yet been proposed.
46

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
cars, the regulation framework was substantially revised, such as the introduction of new regulations requiring
automobile manufacturers to meet standards of corporate average fuel consumption across models in addition toexisting regulations requiring each model to meet consumption standards. Furthermore, in order to achieve thenational target for average fuel efficiency for 2020, the following more stringent fuel consumption regulations
have been enacted and enforced. First, GB19578-2014, which has been enacted to strengthen regulations for 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 addition, Level 5 Fuel Consumption Regulations for passenger vehicles are being
examined as more stringent next-generation 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.
With respect to large commercial vehicles, pursuant to GB30510-2014, Level 2 Fuel Consumption
Regulations apply to new vehicles from July 2014 and are currently being enforced. In addition, in an effort tofurther strengthen fuel consumption regulations, GB30510-2018 was enacted, pursuant to which Level 3 Fuel
Consumption Regulations are scheduled to be applied to new vehicles from July 2019.
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, fuel-cell vehicles using compressed hydrogen are subject to the approval and control under theHigh Pressure Gas Safety Act in addition to the Road Vehicles Act.
U.S. Standards
In the U.S., in light of the Executive Order issued by President Trump on January 30, 2017, few safety
standards providing new technical requirements have been issued. With respect to automated driving vehicles, onJanuary 8, 2020 the Trump Administration and 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 inproviding high level guidance to state and 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 withregulations and systems that vary from state to state. On December 23, 2020, California issued its firstautonomous vehicle deployment permit.
47

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: advanced
emergency braking, emergency lane keeping systems, driver drowsiness and attention warning, intelligent speed
assistance, reversing detection systems, tire pressure monitoring systems, and data recorders in case of an
accident (“event data recorders”). In relation to this, various UN Regulations are being developed, but it isprovided that the equipment for which UN Regulations have not been developed, the EU will establish its own
technical standards.
Furthermore, a major overhaul of the EU-type approval framework for motor vehicles was issued in May
2018. The new regulation purports to raise the quality and independency of vehicle type-approval and testing, toincrease checks of vehicles that are already on the EU market, and to strengthen European Commission oversightof the framework. It became mandatory for all new vehicle models as of September 1, 2020. Automated driving
vehicles must obtain exemption under this framework.
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, new evaluation
test method requirements, cybersecurity, software updates, data recording for automated driving vehicles anddata recording in case of an accident. The new regulations on cyber security, software updates and automatedlane 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).
Environmental Matters
Japanese Standards
Toyota’s automotive operations in Japan are subject to substantial environmental regulation under laws suchas 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 also subject to local regulations, which in somecases impose more stringent obligations than the Japanese central government requirements. Toyota has
complied with these regulations. Under the Waste Management and Public Cleansing Act, producers of industrial
waste must dispose of industrial waste in the manner prescribed in the same act. Toyota has also complied withthe same act.
The Soil Contamination Countermeasures Act of Japan requires that land owners 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 land48

contamination exceeds a certain level, the relevant prefectural authority designates the area as considered to becontaminated, orders the land owner 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 theland owner take such measures in accordance with such plan. Toyota is suitably managing its land in accordancewith the same law. 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 andfluorocarbons) 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-backand recycle system throughout Japan. As a result, in fiscal 2020, Toyota achieved a recycling/recovery rate of
96% for automobile shredder residue (the legal requirement being 70%) and 95% for air bags (the legal
requirement being 85%) and reached the targets set forth in this law.
U.S. Standards
Toyota’s assembly, manufacturing and other operations in the United States are subject to a wide range ofenvironmental regulation under the Clean Air Act, the Clean Water Act, the Resource Conservation andRecovery Act, the Pollution Prevention Act of 1990 and the Toxic Substances Control Act. Toyota is also subject
to a variety of state legislation that parallels, and in some cases imposes more stringent obligations than, federal
requirements. These federal and state regulations impose severe restrictions on air- and water-borne discharges ofpollution from Toyota facilities, and stringent requirements governing the handling of hazardous materials at
Toyota facilities and the disposal of wastes from Toyota operations. Toyota is subject to many similar
requirements in its operations in Europe, Canada and other countries.
Pursuant to the Clean Air Act, the EPA has promulgated National Ambient Air Quality Standards(“NAAQS”) for six “criteria” pollutants, including for ozone and particulate matter. The Clean Air Act requiresthat the EPA review and possibly revise these NAAQS every five years. On December 14, 2012, the EPA madethe annual health-based particulate matter NAAQS more stringent. On October 1, 2015, the EPA made theannual health-based and welfare-based ozone NAAQS more stringent. The revised annual health-based
particulate matter NAAQS and the revised annual health-based and welfare-based ozone NAAQS, as well as any
future NAAQS revisions, could lead to additional pollution control requirements on the industry, including on
Toyota’s manufacturing operations.
Toyota expects growing pressure in the next several years to further reduce emissions from motor vehicles
and manufacturing facilities.
European Standards
In 2014, the EU adopted a regulation to reduce noise produced by cars, vans, buses, coaches and light andheavy trucks. Noise limit values must ultimately be lowered by four A-weighted decibels for vehicles other thantrucks, and three A-weighted decibels for trucks. Compliance must be achieved in three steps over a ten to
12-year period.
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 believes that its operations are materially 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 to ensure that it remains in material compliancewith all of these requirements.
Toyota believes that environmental regulatory requirements have not had a material adverse effect on its
operations. However, compliance with environmental regulations and standards has increased costs and is49

expected to lead to higher costs in the future. Therefore, Toyota recognizes that effective environmental costmanagement will become increasingly important. Moreover, innovation and leadership in the area ofenvironmental protection are becoming increasingly important to remain competitive in the 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.
Disclosure of Iranian Activities under Section 13(r) of the Securities Exchange Act of 1934
None.
Research and Development
The overriding goals of Toyota’s technology and product development activities are to minimize thenegative aspects of cars, 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. With
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 andleading-edge technology
development

Phase requiring technological breakthroughs such as components and systems
Development of leading-edge components and systems that are more advanced
than those of competitors

Product development

Phase mainly for development of new models
Development of all-new models and existing-model upgrades

Toyota is promoting research and development into the early commercialization of next generation
environmentally friendly, energy-efficient and safe-vehicle technology. Toyota is also moving forward with thedevelopment of innovative technologies such as electrification, connected vehicles and automated driving so as
to realize a mobility society of the future that enables everyone to enjoy freedom of movement beyond theconventional 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;50•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 “Operating and
Financial Review and Prospects — Research and Development, Patents and Licenses.”Components and Parts, Raw Materials and Sources of Supply
Toyota purchases parts, components, raw materials, equipment and other supplies from multiple competing
suppliers located around the world. 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. Toyota plans to continue purchases based on the same principle and does
not anticipate any difficulty in obtaining stable supplies in the foreseeable future. For example, in 2019, Japansuffered major flooding caused by Typhoon Hagibis, but the operations of Toyota were spared from its impact
thanks to utmost efforts with all Toyota suppliers to realize early restoration of damaged local areas andsuppliers, as well as alternative production by other suppliers. In 2020, the impact of COVID-19 spread globallyand has had an effect on the operations of some of Toyota’s automobile plants. In order to minimize the impact,
Toyota continues to study alternative production methods, working together with all of its suppliers.
Because Toyota had more than 50 overseas operations in 27 countries and regions as of March 31, 2021,
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 torealize 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 and VA activities. Through RR-CI activities, which are conducted in conjunction
with TNGA, Toyota aims to ensure cost competitiveness through such means as thorough localization, sharing
parts and components and manufacturing reforms, together with producing products matching customers’ needs
in each region and vehicle category, and relentlessly reinforcing activities from a medium- to long-term
perspective based on benchmarks as the third phase of RR-CI. Toyota has been continuously working on VA(value analysis) activities for the various types of vehicles already on sale in collaboration with in-house vehicle
companies. In pursuit of cost reduction, Toyota focuses on “developing a real cost-competitive structure” byworking together with suppliers.
In the raw material market during 2020, while prices declined from the beginning of the year, the impact of
COVID-19 changed the demand structure. Market prices surged in the second half of the year against the
backdrop of multiple factors on the supply side such as the sharp recovery in demand and the tight containertransportation market. The prices of precious metals (palladium and rhodium) particularly soared due to the sharp
recovery in demand as well as the impact of COVID-19 and a mine accident. During fiscal 2022, raw material
prices are expected to experience the most significant increase since the period from calendar years 2007 to 2008.
Toyota is therefore accelerating initiatives such as the replacement of raw materials with those that are lesssubject to price pressure and reduction of raw material usage.
51

Intellectual Property
Toyota holds numerous Japanese and foreign patents, trademarks, design patents and some utility model
registrations. It also has a number of applications pending for Japanese and foreign patents. While Toyota
considers all of its intellectual property to be important, it does not consider any specific subset of its patents,
trademarks, design patents or utility model registrations to be so important that their expiration or termination
would materially affect Toyota’s business.
Capital Expenditures and Divestitures
Set forth below is a chart of Toyota’s principal capital expenditures between April 1, 2019 and March 31,
2021, 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

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 Auto Body Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . .
Investment primarily in technology and products byPrimearth EV Energy Co., Ltd. . . . . . . . . . . . . . . . . . . . .
Investment primarily in technology and products by
Toyota Motor Kyushu, Inc. . . . . . . . . . . . . . . . . . . . . . . .
Investment primarily in technology and products byPrime Planet Energy & Solutions, Inc. . . . . . . . . . . . . . . .
Investment primarily in technology and products byHino Motors, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outside of Japan
Investment primarily to promote localization by
Toyota Motor Manufacturing, Indiana, Inc. . . . . . . . . . . .
Investment primarily to promote localization by
Toyota Motor Manufacturing Texas, Inc. . . . . . . . . . . . .
Investment primarily to promote localization by
Toyota Motor Europe NV/SA . . . . . . . . . . . . . . . . . . . . .
Investment primarily to promote localization by
Toyota Motor Thailand Co., Ltd. . . . . . . . . . . . . . . . . . . .
Investment primarily to promote localization by
Toyota Motor Manufacturing, Kentucky, Inc. . . . . . . . . .
Investment primarily to promote localization by
Toyota do Brazil Ltda. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment primarily to establish office facilities by
Toyota Motor North America, Inc. . . . . . . . . . . . . . . . . . .
Investment primarily in leased automobiles by
Toyota Motor Credit Corporation . . . . . . . . . . . . . . . . . .

52

Primary
Method ofFinancing

Total Cost
(Yen in billions)

Location

696.0

Japan

Internal funds,
financingfrom issuanceof bonds, etc.

97.6

Japan

Internal funds

69.0

Japan

Internal funds

64.7

Japan

Internal funds

64.7

Japan

Internal funds

48.2

Japan

Internal funds

42.1

Japan

Internal funds

172.3

United States

Internal funds

64.0

United States

Internal funds

54.2

BelgiumInternal funds

53.0

ThailandInternal funds

47.1

United States

Internal funds

39.7

BrazilInternal funds

37.6

United States

Internal funds

3,774.2

United States

Internal funds,
financingfrom issuanceof bonds, etc.

Set forth below is information with respect to Toyota’s material plans to construct, expand or improve its
facilities between April 2021 and March 2022, 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

360.0

Japan

Internal funds

49.2

Japan

Internal funds

109.6

United States

Internal funds

80.9

CanadaInternal funds

52.8

BelgiumInternal funds

40.9

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 Motor Manufacturing, Texas, Inc. . . . . . . . . . . . .
Investment primarily in manufacturing facilities by
Toyota Motor Manufacturing, Canada, Inc. . . . . . . . . . . .
Investment primarily in manufacturing facilities by
Toyota Motor Europe NV/SA . . . . . . . . . . . . . . . . . . . . . .
Investment primarily in manufacturing facilities by
Toyota Motor Manufacturing, West Virginia, Inc. . . . . . .

Set forth below is additional information with respect to Toyota’s material plans to construct, expand or
improve its facilities.
In Mexico, Toyota established a new plant (TMMGT) with annual capacity of 100 thousand units inGuanajuato, which started operations in December 2019. In the United States, Toyota will establish a new jointmanufacturing plant with Mazda in 2021. Toyota also plans to start new production lines of hybrid transaxles
with annual capacity of 240,000 units in its West Virginia plant during 2020 and 2021. In Alabama, Toyota will
increase annual engine production capacity by 230,000 units by the end of 2021.
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 have been named in certain class actions filed in Mexico, Canada, Australia,
Israel and Brazil, as well as some other actions by states or territories of the United States relating to Takata
airbag issues. The actions in Mexico, Australia, Israel and Brazil are being litigated. The actions by states or
territories of the United States have been resolved. As previously disclosed, Toyota entered into a consent decree
on January 14, 2021 with the U.S. EPA, the Department of Justice (“DOJ”) and the Civil Division of the
U.S. Attorney’s Office for the Southern District of New York (“SDNY”) to resolve investigations stemming froma self-reported process gap in fulfilling certain emissions defect information reporting requirements. Under theconsent decree, Toyota agreed to pay, and has paid, a $180 million civil penalty and to comply with certain53

additional periodic reporting requirements. The U.S. District Court for the Southern District of New Yorkapproved the consent decree on April 2, 2021.
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.
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, and is subject to government investigations fromtime 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.

54

4.C ORGANIZATIONAL STRUCTURE
As of March 31, 2021, Toyota Motor Corporation had 209 Japanese subsidiaries and 335 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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan
Toyota Motor Kyushu, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 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 Motor Manufacturing de Baja California, S. de R.L. de C.V. . . .
MexicoToyota Motor Manufacturing Canada Inc. . . . . . . . . . . . . . . . . . . . . . . . .
CanadaToyota Credit Canada Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CanadaToyota Canada Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CanadaToyota Motor Europe NV/SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BelgiumToyota Motor Manufacturing France S.A.S. . . . . . . . . . . . . . . . . . . . . . . .
FranceToyota Kreditbank GmbH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Germany
Toyota Motor Finance (Netherlands) B.V. . . . . . . . . . . . . . . . . . . . . . . . . Netherlands
Toyota Motor Manufacturing (UK) Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . United Kingdom
Toyota Financial Services (UK) PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . United Kingdom
Toyota (GB) PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United Kingdom
Toyota Motor Manufacturing Turkey Inc. . . . . . . . . . . . . . . . . . . . . . . . .
TurkeyOOO “TOYOTA MOTOR” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
RussiaToyota Motor (China) Investment Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . .
China
Toyota Motor Finance (China) Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . .
China
PT. Toyota Motor Manufacturing Indonesia . . . . . . . . . . . . . . . . . . . . . . .
Indonesia
Singapore
Toyota Motor Asia Pacific Pte Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota 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
55

Percentage
Ownership
Interest

Percentage
VotingInterest

100.0050.21
100.00100.00100.00100.0054.08
100.00100.00100.0056.51
100.00100.00100.00100.00100.00100.00100.00100.00100.00100.0051.00
100.00100.00100.00100.00100.00100.00100.0090.00
100.00100.00100.0095.00
100.0087.43
86.43
100.00100.00100.00100.00100.00100.00100.0050.28
100.00100.00100.00100.0054.08
100.00100.00100.0057.31
100.00100.00100.00100.00100.00100.00100.00100.00100.00100.0051.00
100.00100.00100.00100.00100.00100.00100.0090.00
100.00100.00100.0095.00
100.0087.43
86.43
100.00100.00100.00100.00100.00100.004.D PROPERTY, PLANTS AND EQUIPMENT
As of March 31, 2021, Toyota and its affiliated companies produced automobiles and related components
through more than 50 overseas manufacturing organizations in 27 countries and regions besides Japan. The
facilities are located principally in Japan, the United States, Canada, the United Kingdom, France, Turkey, Czech
Republic, Russia, Poland, Thailand, China, Taiwan, India, Indonesia, South Africa, Argentina and Brazil.
In addition to its manufacturing facilities, Toyota’s properties include sales offices and other sales facilities
in major cities, repair service facilities and research and development facilities.
The following table sets forth information, as of March 31, 2021, 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(thousandsquareNumber 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.
Motomachi Plant . . . . . . . . . . . . . . . . . Toyota City, Aichi Pref.
Takaoka Plant . . . . . . . . . . . . . . . . . . . Toyota City, Aichi Pref.
Kamigo Plant . . . . . . . . . . . . . . . . . . . . Toyota City, Aichi Pref.
Kinu-ura Plant . . . . . . . . . . . . . . . . . . . Hekinan City, Aichi Pref.
Honsha Plant . . . . . . . . . . . . . . . . . . . . Toyota City, Aichi Pref.
Nagoya Office . . . . . . . . . . . . . . . . . . . Nagoya City, Aichi Pref.
Japan (Subsidiaries)
Daihatsu Motor Co., Ltd. . . . . . . . . . . . Ikeda City, Osaka, etc.
TOYOTA Mobility Tokyo Inc. . . . . . . Minato-ku, Tokyo, etc.
Hino Motors, Ltd. . . . . . . . . . . . . . . . . Hino City, Tokyo, etc.
Toyota Motor Kyushu, Inc. . . . . . . . . . Miyawaka City, Fukuoka Pref.,etc.
Toyota Auto Body Co., Ltd. . . . . . . . . Kariya City, Aichi Pref., etc.
Outside Japan (Subsidiaries)
Toyota Motor Manufacturing, Indiana,
Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . Indiana, U.S.A.
Toyota Motor Manufacturing,
Kentucky, Inc. . . . . . . . . . . . . . . . . . Kentucky, U.S.A.
Toyota Motor Thailand Co., Ltd. . . . . Samutprakan, Thailand
Toyota Motor Manufacturing Canada,Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . Ontario, Canada
Toyota Motor North America, Inc. . . . Texas, U.S.A.

Principal
Products orFunctions

5,573
4,032

44
6,642

2,767
2,720

23,098
2,994

1,575
1,317
895
808
623
5

7,893
4,132
3,035
2,882
2,068
2,358

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

7,762
371
6,303
1,928

11,422
6,826
12,784
8,545

Automobiles
Sales facilities
Automobiles
Automobiles

2,266

12,224

Automobiles

4,359

5,804

Automobiles

5,161
4,414

7,660
9,237

Automobiles
Automobiles

4,752
722

7,430
1,640

Automobiles
OfficeToyota 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
56

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, 2021, property, plant and equipment having a net book value of approximately¥754.1 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 “— Business Overview — Capital Expenditures and Divestitures” for a description of Toyota’s materialplans 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 88% of
Toyota’s total revenues before the elimination of intersegment revenues for fiscal 2021. Toyota’s primarymarkets based on vehicle unit sales for fiscal 2021 were: Japan (27.8%), North America (30.3%), Europe(12.5%) and Asia (16.0%).
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 2021, automotive markets too saw figures fall substantially from fiscal 2020 in many regions
mainly due to the effects of the suspension of operations at factories and the suspension of business at dealers
worldwide reflecting the impact of the COVID-19 pandemic, with the exception of some regions such as China
where the impact of the pandemic was limited.

57

The following table sets forth Toyota’s consolidated vehicle unit sales by geographic market based on
location of customers for the past two fiscal years.
Thousands of units
Year Ended March 31,
2020
2021

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

2,240
2,713
1,029
1,600
1,372

2,125
2,313
959
1,222
1,027

Overseas total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,715

5,521

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

8,955

7,646

* “Other” consists of Central and South America, Oceania, Africa and the Middle East, etc.
During fiscal 2021, Toyota’s consolidated vehicle unit sales in Japan decreased due to weak market
conditions as compared to the prior fiscal year. During fiscal 2021, overseas vehicle unit sales decreased,
particularly in North America, Asia and Other, where the contraction of automotive markets was especiallypronounced.
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 the reliance on various suppliers for the provision of supplies,•

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.

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.
58

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 lawsuits against Toyota. For a more detailed description of these claims andlawsuits, see “Information on the Company — Business Overview — Legal Proceedings” and note 25 to theconsolidated 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 2021 mainly due to the impact
of changes in exchange rates. Also, vehicles and equipment on operating leases increased during fiscal 2021
mainly due to the impact of changes in exchange rates.
For a detail on receivables related to financial services and vehicles and equipment on operating leases, seenotes 9 and 13 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 20 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.
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 statement 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 discussion in“Quantitative and Qualitative Disclosures about Market Risk” and notes 21 and 22 to the consolidated financial
statements.
59

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
increased during fiscal 2020 mainly as a result of higher interest rates. Funding costs decreased during fiscal
2021 mainly as a result of lower interest rates.
Toyota launched its credit card business in Japan in April 2001. As of March 31, 2020, Toyota had
15.9 million cardholders, an increase of 0.1 million cardholders compared with March 31, 2019. As of March 31,
2021, Toyota had 16.4 million cardholders, an increase of 0.5 million cardholders compared with March 31,
2020. Credit card receivables as of March 31, 2020 increased by ¥6.1 billion from March 31, 2019 to¥481.7 billion, and that as of March 31, 2021 increased by ¥2.4 billion from March 31, 2020 to ¥484.1 billion.
Other Business Operations
Toyota’s other business operations consist of information technology related businesses (including
information technology and telecommunications and GAZOO), housing (including the manufacture and sale ofprefabricated homes) and other businesses. During fiscal 2020, TMC and Panasonic Corporation (“Panasonic”)
established a new joint venture, Prime Life Technologies Corporation (“Prime Life Technologies”), relating to
the town development business. Prime Life Technologies became Toyota’s affiliated company, and Toyota
Housing Corporation (“THC”) as well as Misawa Homes Co., Ltd. (“Misawa Homes”) became subsidiaries ofPrime Life Technologies, causing THC and Misawa Homes to no longer be Toyota’s consolidated subsidiarycompanies. See note 6 to the consolidated financial statements for additional information.
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 Russian
ruble, the Canadian dollar, the British pound and others. Toyota’s consolidated financial statements, which arepresented in Japanese yen, 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 2020
and 2021, Toyota produced 69.0% and 69.7%, respectively, of its non-domestic sales outside Japan. In North
America, 67.6% and 65.3% of vehicles sold in fiscal 2020 and 2021, respectively, were produced locally. In
Europe, 74.4% and 71.9% of vehicles sold in fiscal 2020 and 2021, 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.
60

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 21 and 22 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 2020 and 2021, the Japanese yen was on
average stronger against the U.S. dollar in comparison to fiscal 2019 and 2020, respectively. The Japanese yen
was at the end of fiscal 2020 stronger against the U.S. dollar in comparison to the end of fiscal 2019, but was at
the end of fiscal 2021 weaker against the U.S. dollar in comparison to the end of fiscal 2020. In fiscal 2020, theJapanese yen was on average stronger against the euro in comparison to the previous fiscal year, but in fiscal
2021, was on average weaker against the euro in comparison to the previous fiscal year. The Japanese yen was at
the end of fiscal 2020 stronger against the euro in comparison to the end of fiscal 2019, but was at the end of
fiscal 2021 weaker against the euro in comparison to the end of fiscal 2020. See note 20 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 two fiscal
years.
Yen in millions
Year ended March 31,
2020
2021

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

61

9,503,238
10,419,869
3,133,227
4,785,489
2,024,724

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

Results of Operations — Fiscal 2021 Compared with Fiscal 2020
Yen in millions
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

Sales revenues:
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 16,441,852 ¥ 14,948,931 ¥ (1,492,921)
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,642,034
9,491,803(1,150,231)
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,355,357
3,134,489(220,868)
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,293,231
5,045,295(247,936)
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,114,111
1,872,895(241,216)
Intersegment elimination/unallocated amount . . . .
(7,980,038)(7,278,820)
701,218(9.1)%(10.8)(6.6)(4.7)(11.4)—

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

29,866,547

27,214,594(2,651,954)(8.9)

1,585,276
253,205
143,817363,547
84,001(30,613)

1,149,217
401,361
107,971435,940
59,84743,413(436,059)
148,156(35,846)
72,393(24,154)
74,026(27.5)
58.5(24.9)
19.9(28.8)—

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,399,232
8.0%
2,792,942
9.4%

2,197,748
8.1%
2,932,354
10.8%(201,484)
0.1%
139,412
1.4%

(8.4)

2,036,140

2,245,261

209,121

10.3

6.8%

8.3%

5.0

1.5%

* “Other” consists of Central and South America, Oceania, Africa and the Middle East.
Sales Revenues
Toyota had sales revenues for fiscal 2021 of ¥27,214.5 billion, a decrease of ¥2,651.9 billion, or 8.9%,
compared with the prior fiscal year. The decrease resulted mainly from the ¥2,080.0 billion impact of decreased
vehicle unit sales and changes in sales mix and the ¥560.0 billion unfavorable impact of changes in exchange
rates.

62

The table below shows Toyota’s sales revenues from external customers by product category and bybusiness.
Yen in millions
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 22,647,701
Parts and components for production . . . . . . . . . . . . . .
1,197,089
Parts and components for after service . . . . . . . . . . . . .
2,170,448
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
755,141¥ 20,509,606
1,287,053
2,049,187
752,000¥ (2,138,095)
89,964(121,261)(3,141)(9.4)%
7.5
(5.6)
(0.4)

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

26,770,379
923,314

24,597,846
479,553(2,172,533)(443,761)(8.1)(48.1)

Total sales of products . . . . . . . . . . . . . . . . . . . . . .
Financial Services . . . . . . . . . . . . . . . . . . . . . . . . .

27,693,693
2,172,854

25,077,398
2,137,195(2,616,295)(35,659)

(9.4)
(1.6)

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

¥ 29,866,547¥ 27,214,594¥ (2,651,954)(8.9)%

Toyota’s sales revenues include sales revenues from sales of products, consisting of sales revenues fromautomotive operations and all other operations, which decreased by 9.4% during fiscal 2021 compared with theprior fiscal year to ¥25,077.3 billion, and sales revenues from financial services operations which decreased by
1.6% during fiscal 2021 compared with the prior fiscal year to ¥2,137.1 billion. The decrease in sales revenues
from sales of products is mainly due to a decrease in Toyota vehicle unit sales of 1,309 thousand vehicles
compared with the prior fiscal year.
The following table shows the number of financing contracts by geographic region at the end of fiscal 2021
and 2020, respectively.
Number of financing contracts in thousands
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

2,414
5,394
1,318
1,864
926

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

246
159
94
128
(45)

10.2%
2.9
7.1
6.9
(4.9)

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

11,916

12,498582

4.9%* “Other” consists of Central and South America, Oceania and Africa.
Geographically, sales revenues (before the elimination of intersegment revenues) for fiscal 2021 decreased
by 9.1% in Japan, 10.8% in North America, 6.6% in Europe, 4.7% in Asia, and 11.4% in Other compared withthe prior fiscal year. Excluding the impact of changes in exchange rates of ¥560.0 billion, sales revenues in fiscal
2021 would have decreased by 9.1% in Japan, 8.5% in North America, 5.5% in Europe, and 3.5% in Asia, as well
as would have increased by 0.1% in Other compared with the prior fiscal year.

63

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,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

4,284

3,853

(431)

(10.0)%* including number of exported vehicle unit sales
Yen in millions
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

16,197,556
244,296

14,674,496
274,435(1,523,060)
30,139(9.4)%
12.3

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

16,441,852

14,948,931(1,492,921)(9.1)%

Sales revenues in Japan decreased due primarily to the 431 thousand vehicles decrease in vehicle unit sales
compared with the prior fiscal year. For fiscal 2020 and 2021, exported vehicle unit sales were 2,044 thousand
units and 1,728 thousand units, respectively.
North America
Thousands of units
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

2,713

2,313

(400)

(14.8)%

Yen in millions
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

9,089,289
1,552,745

7,995,051
1,496,752(1,094,238)(55,993)(12.0)%(3.6)

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

10,642,034

9,491,803(1,150,231)(10.8)%

Sales revenues in North America decreased due primarily to the 400 thousand vehicles decrease in vehicle
unit sales compared with the prior fiscal year.

64EuropeThousands of units
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

1,029

959

(70)

(6.8)%

Yen in millions
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

3,206,943
148,4142,976,259
158,229(230,683)
9,815(7.2)%
6.6

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

3,355,357

3,134,489(220,868)(6.6)%

Sales revenues in Europe decreased due primarily to the 70 thousand vehicles decrease in vehicle unit sales
compared with the prior fiscal year.
Asia
Thousands of units
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

1,600

1,222

(378)

(23.6)%

Yen in millions
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

5,120,384
172,847

4,874,746
170,549(245,638)(2,298)(4.8)%(1.3)

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

5,293,231

5,045,295(247,936)(4.7)%

Sales revenues in Asia decreased due primarily to the 378 thousand vehicles decrease in vehicle unit sales
compared with the prior fiscal year.
Other
Thousands of units
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

1,372

1,027

(345)

(25.2)%

Yen in millions
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

1,941,859
172,252

1,719,132
153,764(222,728)(18,488)(11.5)%(10.7)

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

2,114,111

1,872,895(241,216)(11.4)%

65

Sales revenues in Other decreased due primarily to the 345 thousand vehicles decrease in vehicle unit sales
compared with the prior fiscal year.
Operating Costs and Expenses
Yen in millions
Year ended March 31,
2021 v. 2020 Change
2020
2021
AmountPercentage

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

23,103,596
1,381,755
2,981,965

21,199,890
1,182,330
2,634,625(1,903,706)(199,424)(347,339)(8.2)%(14.4)(11.6)

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

27,467,315

25,016,845(2,450,470)(8.9)%

Yen in millions
2021 v. 2020 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)(305,000)(175,500)(150,000)(70,000)(419,970)

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

(2,450,470)

Operating costs and expenses decreased by ¥2,450.4 billion, or 8.9%, to ¥25,016.8 billion during fiscal 2021
compared with the prior fiscal year.
Cost Reduction Efforts
During fiscal 2021, continued cost reduction efforts together with suppliers contributed to a reduction ofoperating costs and expenses by ¥150.0 billion. This was due to ¥80.0 billion in cost reduction efforts concerning
design related costs due mainly to ongoing value engineering activities, and ¥70.0 billion in cost reduction efforts
at plants and logistics departments.
These cost reduction efforts related to ongoing value engineering and value analysis activities, the use ofcommon parts resulting in a reduction of part types and other manufacturing initiatives designed to reduce thecosts of vehicle production. The amount of the effect of cost reduction efforts includes the impact of fluctuationin the price of steel, precious metals, non-ferrous alloys including aluminum, plastic parts and other production
materials and parts.
Cost of Products Sold
Cost of products sold decreased by ¥1,903.7 billion, or 8.2%, to ¥21,199.8 billion during fiscal 2021
compared with the prior fiscal year. This decrease mainly reflected the impact of changes in vehicle unit sales
and sales mix, the impact of deconsolidation of certain entities due to changes in ownership interest, thefavorable impact of fluctuations in foreign currency translation rates, and the impact of cost reduction efforts.

66

Cost of Financial services
Cost of financial services decreased by ¥199.4 billion, or 14.4%, to ¥1,182.3 billion during fiscal 2021
compared with the prior fiscal year. The decrease resulted mainly from the decrease in expenses related toresidual value losses and the decrease in funding costs resulting from lower interest rates.
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased by ¥347.3 billion, or 11.6%, to ¥2,634.6 billion
during fiscal 2021 compared with the prior fiscal year. This decrease mainly reflected the impact of
deconsolidation of certain entities due to changes in ownership interest, the decrease in advertising costs, and thefavorable impact of fluctuations in foreign currency translation rates.
Operating Income
Yen in millions
2021 v. 2020 Change

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

(210,000)
150,000(255,000)
70,00043,516

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

(201,484)

Toyota’s operating income decreased by ¥201.4 billion, or 8.4%, to ¥2,197.7 billion during fiscal 2021
compared with the prior fiscal year. This decrease was due to the ¥255.0 billion unfavorable impact of changes inexchange rates and the ¥210.0 billion impact of marketing activities, partially offset by the ¥150.0 billion
increase in cost reduction efforts and the ¥70.0 billion increase in expenses and expense reduction efforts.
Marketing efforts and marketing activities include changes in vehicle unit sales and sales mix, sales
expenses and other. “Other” includes valuation gains and losses from interest rate swaps etc.
The unfavorable impact of changes in exchange rates was due mainly to the ¥210.0 billion impact ofoverseas transactions such as imports and exports denominated in foreign currencies.
During fiscal 2021, operating income (before elimination of intersegment profits) compared with the priorfiscal year decreased by ¥436.0 billion, or 27.5%, in Japan, ¥35.8 billion, or 24.9%, in Europe, and ¥24.1 billion, or
28.8%, in Other, and increased by ¥148.1 billion, or 58.5%, in North America, and ¥72.3 billion, or 19.9%, in Asia.

67

The following is a description of operating income in each geographic market.
Japan
Yen in millions
2021 v. 2020 Change

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

(475,000)
125,000(170,000)
65,00018,941

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

(436,059)

North America
Yen in millions
2021 v. 2020 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

150,000
10,000(20,000)(50,000)
58,156

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

148,156

EuropeYen in millions
2021 v. 2020 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,0000(50,000)
15,000(15,846)

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

(35,846)

Asia
Yen in millions
2021 v. 2020 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20,00020,00010,00010,00012,393

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

72,39368

OtherYen in millions
2021 v. 2020 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

80,000(5,000)(25,000)(40,000)(34,154)

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

(24,154)

Other Income and Expenses
Share of profit (loss) of investments accounted for using the equity method during fiscal 2021 increased by¥40.7 billion, or 13.1%, to ¥351.0 billion compared with the prior fiscal year. This increase was due mainly to anincrease during fiscal 2021 in net income attributable to the shareholders of companies accounted for by theequity method.
Other finance income increased by ¥129.3 billion, or 42.3%, to ¥435.2 billion during fiscal 2021 comparedwith the prior fiscal year. This increase was due mainly to an increase during fiscal 2021 in profit on securities
revaluation.
Other finance costs increased by ¥0.3 billion, or 0.8%, to ¥47.5 billion during fiscal 2021 compared with theprior fiscal year.
Foreign exchange gain (loss), net increased by ¥109.7 billion to ¥15.1 billion during fiscal 2021 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 ¥109.7 billion increase in foreign exchange gain (loss), net was due mainly to the losses
recorded in fiscal 2020 resulting from the Japanese yen being stronger against foreign currencies at the maturity
dates of the foreign currency loans than at the dates of the lending.
Other income (loss), net increased by ¥61.3 billion, to ¥19.2 billion in losses during fiscal 2021 comparedwith the prior fiscal year.
Income Taxes
The provision for income taxes decreased by ¥31.8 billion, or 4.7%, to ¥649.9 billion during fiscal 2021
compared with the prior fiscal year. This decrease was due mainly to the increased proportion of income before
income taxes of foreign subsidiaries where statutory tax rates are low. The average effective tax rate for fiscal
2021 was 22.2%.
Net Income Attributable to Non-controlling Interests
Net income attributable to non-controlling interests decreased by ¥37.8 billion, or 50.5%, to ¥37.1 billion
during fiscal 2021 compared with the prior fiscal year. This decrease was due mainly to a decrease during fiscal
2021 in net income of consolidated subsidiaries.
69

Net Income Attributable to Toyota Motor Corporation
Net income attributable to Toyota Motor Corporation increased by ¥209.1 billion, or 10.3%, to¥2,245.2 billion during fiscal 2021 compared with the prior fiscal year.
Other Comprehensive Income, Net of Tax
Other comprehensive income, net of tax increased by ¥1,521.1 billion to ¥1,012.4 billion for fiscal 2021
compared with the prior fiscal year. This increase resulted from exchange differences on translating foreign
operations gains of ¥403.6 billion in fiscal 2021 compared with losses of ¥362.0 billion in the prior fiscal year.
This was due mainly to the weakening of the yen against the U.S. dollar and the euro, net changes in revaluationof financial assets measured at fair value through other comprehensive income gains of ¥303.9 billion in fiscal
2021 compared with losses of ¥130.4 billion in the prior fiscal year, due mainly to changes in prices ofmarketable stocks in stock exchange markets, and remeasurements of defined benefit plans gains in fiscal 2021
of ¥216.2 billion compared with losses of ¥43.3 billion in the prior fiscal year, due mainly to changes in fairvalue 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,
2021 v. 2020 Change
2020
2021
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26,799,743
2,013,134

24,651,552
1,607,161(2,148,191)(405,973)(8.0)%(20.2)

2,193,170
283,742

2,162,237
495,593(30,933)
211,851

(1.4)
74.7

1,504,920
103,356

1,052,365
85,350(452,555)(18,006)(30.1)(17.4)(631,286)(999)(651,560)
9,645(20,274)
10,645——

Automotive Operations Segment
The automotive operations segment is Toyota’s largest operating segment by sales revenues. Sales revenues
for the automotive segment decreased during fiscal 2021 by ¥2,148.1 billion, or 8.0%, to ¥24,651.5 billion
compared with the prior fiscal year. The decrease mainly reflects the ¥2,080.0 billion unfavorable impact ofchanges in vehicle unit sales and sales mix and the ¥560.0 billion unfavorable impact of changes in exchange
rates.
Operating income from the automotive operations decreased by ¥405.9 billion, or 20.2%, to ¥1,607.1 billion
during fiscal 2021 compared with the prior fiscal year. This decrease in operating income was due mainly to the¥375.0 billion effect of marketing activities and the ¥255.0 billion unfavorable impact of changes in exchange
rates, partially offset by the ¥150.0 billion impact of cost reduction efforts and the ¥70.0 billion decrease in
expenses and expense reduction efforts.
70

Financial Services Operations Segment
Sales revenues for the financial services operations decreased during fiscal 2021 by ¥30.9 billion, or 1.4%,
to ¥2,162.2 billion compared with the prior fiscal year. This decrease was due mainly to the unfavorable impact
of changes in exchange rates.
Operating income from financial services operations increased by ¥211.8 billion, or 74.7%, to ¥495.5 billion
during fiscal 2021 compared with the prior fiscal year. This increase was due primarily to the decrease in
expenses related to credit losses and residual value losses, and the recording of valuation gains on interest rate
swaps stated at fair value in sales finance subsidiaries.
All Other Operations Segment
Sales revenues for Toyota’s other operations segments decreased by ¥452.5 billion, or 30.1%, to¥1,052.3 billion during fiscal 2021 compared with the prior fiscal year. This was mainly due to the full-year
impact of THC and Misawa Homes no longer being Toyota’s consolidated subsidiary companies as of January
2020.
Operating income from Toyota’s other operations segments decreased by ¥18.0 billion, or 17.4%, to¥85.3 billion during fiscal 2021 compared with the prior fiscal year. This decrease includes the negative impact
caused by THC and Misawa Homes no longer being Toyota’s consolidated subsidiary companies.
Related Party Transactions
See note 33 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.
Outlook
The automotive industry facing a once-in-a-century transformational period, we have once again returned to
our founding philosophy and summarized the spirit we have maintained since the Toyoda Precepts into the“Toyota Philosophy” as our guidepost in an era when the future is difficult to be predicted. We have defined our
mission as “Producing Happiness for All,” and have been clearly indicating our view that we pursue thecustomers’ happiness as always, even if the products we produce have changed. We believe that taking action torealize our vision of “Creating Mobility for All” translates into taking care of our “home planet,” just as we dofor our hometown or home country, and leads to sustained efforts to achieve the aims of the SDGs to “make abetter world” while ensuring that “no one will be left behind.” Taking the foregoing external factors and otherfactors into account, Toyota expects that sales revenues for fiscal 2022 will increase compared with fiscal 2021
due mainly to the increase in vehicle unit sales. Toyota expects that operating income will increase in fiscal 2022
compared with fiscal 2021 due mainly to the increase in vehicle unit sales, partially offset by the unfavorable
impact of market fluctuation. Toyota expects that income before income taxes and net income attributable to
Toyota Motor Corporation will also increase in fiscal 2022 compared with fiscal 2021.
For the purposes of this outlook discussion, Toyota is assuming an average exchange rate of ¥105 to the
U.S. dollar and ¥125 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 “Operating and Financial Review and Prospects — Operating Results —Overview — Currency Fluctuations” for further discussion.
71

The foregoing statements are forward-looking statements based upon Toyota’s management’s assumptions
and beliefs regarding exchange rates, market demand for Toyota’s products, economic conditions and others. See“Cautionary Statement With Respect To Forward-Looking Statements”. 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 capital expenditures as well as its research and development activities
through cash generated by operations.
In fiscal 2022, Toyota expects to sufficiently fund its capital expenditures as well as its research anddevelopment activities through cash and cash equivalents on hand, cash generated by operations, the issuance ofcorporate bonds, and debt financing. Toyota will use its funds to efficiently invest in maintenance andreplacement of conventional manufacturing facilities and the introduction of new products, and will focus on
investment in areas contributing to strengthening competitiveness and future growth for realization of a newmobility society. See “Information on the Company — Business Overview — Capital Expenditures andDivestitures” for information regarding Toyota’s material capital expenditures and divestitures for fiscal 2020
and 2021, and information concerning Toyota’s principal capital expenditures and divestitures currently inprogress.
Toyota funds its financing programs for customers and dealers, including loans and leasing programs, fromboth cash generated by operations and borrowings by its sales finance subsidiaries. Toyota seeks to expand its
ability to raise funds locally in markets throughout the world by expanding its network of finance subsidiaries.
Net cash provided by operating activities increased by ¥328.6 billion to ¥2,727.1 billion for fiscal 2021,
compared with ¥2,398.4 billion for fiscal 2020.
This increase was primarily attributable to the ¥513.1 billion increase in accrued trade accounts payable dueto the increase of purchases during the quarter ended March 31, 2021, partially offset by an increase in accrued
trade account receivable of ¥252.5 billion due to the increase of sales during the quarter ended March 31, 2021.
Net cash used in investing activities increased by ¥2,559.5 billion to ¥4,684.1 billion for fiscal 2021,
compared with ¥2,124.6 billion for fiscal 2020. The increase was primarily attributable to the ¥1,988.3 billion
increase in time deposits, which is largely attributable to funds raised through debt financing that was conductedtaking into account the risk that COVID-19 will have a prolonged impact.
Net cash provided by financing activities was ¥2,739.1 billion for fiscal 2021, compared with ¥362.8 billion
for fiscal 2020, a ¥2,376.3 billion change. The change was primarily attributable to the ¥3,965.6 billion increasein funding by long-term debt.
Total capital expenditures for property, plant and equipment, including vehicles and equipment on operatingleases, were ¥3,609.6 billion during fiscal 2021, remaining largely unchanged from the ¥3,582.4 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 ¥1,350.0 billion during fiscal 2022.
Cash and cash equivalents were ¥5,100.8 billion as of March 31, 2021. 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 2021, by ¥3,583.7 billion, or 33.7%, to¥14,212.2 billion as of March 31, 2021.
72

Trade accounts and notes receivable, less allowance for doubtful accounts increased during fiscal 2021 by¥310.3 billion, or 11.7%, to ¥2,958.7 billion. This increase was due mainly to increased revenue from sales
during the quarter ended March 31, 2021.
Inventories increased during fiscal 2021 by ¥354.1 billion, or 14.0%, to ¥2,888.0 billion. This increase wasdue mainly to an increase in unit prices attributable to rising prices in the precious metal market.
Total finance receivables, net increased during fiscal 2021 by ¥2,166.3 billion, or 12.7%, to¥19,205.7 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 54.6%, in Asia 13.5%, in
Europe 13.2%, in Japan 8.3% and in Other 10.4%.
Other financial assets increased during fiscal 2021 by ¥3,254.2 billion, or 32.4%. This increase was due
mainly to an increase in time deposits and other factors.
Property, plant and equipment increased during fiscal 2021 by ¥877.1 billion, or 8.3%. This increase wasdue mainly to capital expenditures.
Accounts and notes payable increased during fiscal 2021 by ¥547.9 billion, or 15.7%. This increase was due
mainly to an increase in production volume during the quarter ended March 31, 2021.
Income taxes payable increased during fiscal 2021 by ¥138.6 billion, or 65.3%. This increase was mainly
due to a decrease in tax expenses associated with the U.S. tax reform in the prior fiscal year.
Toyota’s total borrowings increased during fiscal 2021 by ¥4,318.6 billion, or 20.2%. Toyota’s short-termborrowings consist of loans with a weighted-average interest rate of 1.37% and commercial paper with aweighted-average interest rate of 0.16%. Short-term borrowings decreased during fiscal 2021 by ¥955.5 billion,or 18.0%, to ¥4,339.8 billion. Toyota’s long-term debt consists of unsecured and secured loans, medium-term
notes, unsecured and secured notes etc. with weighted-average interest rates ranging from 1.25% to 6.34%, andmaturity dates ranging from 2021 to 2048. The current portion of long-term debt increased during fiscal 2021 by¥3,016.1 billion, or 66.0%, to ¥7,584.3 billion and the non-current portion increased by ¥2,464.2 billion, or
23.1%, to ¥13,133.8 billion. The increase in total borrowings resulted mainly from debt financing that was
conducted taking into account the risk that COVID-19 will have a prolonged impact. As of March 31, 2021,
approximately 49% of long-term debt was denominated in U.S. dollars, 16% in Japanese yen, 12% in euros, 6%
in Australian dollars, 3% in Canadian dollars, and 14% in other currencies. Toyota hedges interest rate risk
exposure of fixed-rate borrowings by entering into interest rate swaps. There are no material seasonal variations
in Toyota’s borrowings requirements.
As of March 31, 2021, Toyota’s total interest bearing debt was 109.6% of Toyota Motor Corporation
shareholders’ equity, compared with 103.5% as of March 31, 2020.
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, 2021. 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 2021 by¥256.6 billion, or 47.6%, to ¥282.9 billion. The net defined benefit liability (asset) of foreign plans increased73during fiscal 2021 by ¥1.4 billion, or 0.4%, to ¥340.3 billion. The amounts of net defined benefit liability (asset)
will be funded through future cash contributions by Toyota or in some cases will be settled on the retirement dateof each covered employee. The decrease in net defined benefit liability (asset) of the Japanese plans reflects
mainly an increase in plan assets that resulted from an increase in stock prices. See note 24 to the consolidated
financial statements for further discussion.
Toyota’s treasury policy is to maintain controls on all exposures, to adhere to stringent counterparty credit
standards, and to actively monitor marketplace exposures. Toyota remains centralized, and is pursuing global
efficiency of its financial services operations through Toyota Financial Services Corporation.
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 requirements, and that by maintaining its high credit ratings, it will continue to be able toaccess funds from external sources in large amounts and at relatively low costs. Toyota’s ability to maintain 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, aswell as Toyota’s successful implementation of its business strategy.
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 “Information on the Company — Business Overview — Research andDevelopment.”
Toyota’s research and development expenditures were approximately ¥10,904 billion in fiscal 2021 and¥1,110.3 billion in fiscal 2020.
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.
For details of the research and development cost recorded in the consolidated statement of income, seenote 28 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 Motor Co., Ltd., Hino Motors, Ltd., Toyota Auto Body Co., Ltd., Toyota Motor East
Japan, Inc., and many other Toyota group companies. Overseas, Toyota has a worldwide network of technicalcenters as well as design and motorsports research and development centers.
Toyota established Toyota Research Institute, Inc. (“TRI”) in January 2016 to accelerate research anddevelopment of artificial intelligence technology, which has significant potential to support future industrial
technologies. In July 2017, Toyota Research Institute, Inc. invested $100 million to launch a venture capital funddesigned 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 cloud74

technology. In May 2019, Toyota invested another $100 million to launch the second venture capital fund, and ismaking investments.
In Japan, Toyota established a new company, TRI-AD, in March 2018 to further accelerate its efforts inadvanced 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 andcreates 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 thedevelopment of new projects such as Woven City and Arene, a software platform; and Woven Capital, L.P. witha total investment value of $800 million, which invests in growth-stage companies in areas such as autonomous
driving mobility, artificial intelligence, and smart city.
Toyota 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.

75

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 Core, Inc. . . . . . . . . . . . . . . . . . . . . .
Woven Alpha, 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. . . . . . . . . . . .
EuropeToyota Motor Europe NV/SA . . . . . . . . . . . .
Toyota Europe Design Development
S.A.R.L. . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota Motorsport GmbH . . . . . . . . . . . . . .
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. . . . .

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
Planning and evaluation of vehicles manufactured in Europe
DesignDevelopment of motor sports vehicles

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

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.
76

In addition, Toyota wishes to contribute to sustainable mobility by promoting the spread of technologies
with environmental and safety benefits. This is why Toyota takes an open stance to patent licensing and grants
licenses when appropriate terms are met. In April 2019, from the perspective of contributing to the widespreaduse of electrified vehicles, taking its existing basic policy on intellectual property a step further, Toyota decided
to grant royalty-free licenses through the end of 2030 on approximately 23,740 domestic and foreign patents it
independently holds for vehicle electrification-related technologies that it has developed in its hybrid vehicle
development.
For a further discussion of Toyota’s intellectual property, see “Information on the Company — Business
Overview — Intellectual Property.”
5.D TREND INFORMATION
For a discussion of the trends that affect Toyota’s business and operating results, see “— Operating Results”
and “— Liquidity and Capital Resources.”
5.E OFF-BALANCE SHEET ARRANGEMENTS
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 2021.
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 ¥186.8 billion as of March 31, 2021.
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 ¥3,655.4 billion as of March 31, 2021.
Guarantees
Toyota enters into certain guarantee contracts with its dealers to guarantee customers’ payments of theirinstallment payables that arise from installment contracts between customers and Toyota dealers, as and when77requested by Toyota dealers. Guarantee periods are set to match the maturity of installment payments, and as ofMarch 31, 2021, ranged from one 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
payments.
The maximum potential amount of future payments as of March 31, 2021 is ¥3,710.3 billion. Liabilities forthese guarantees of ¥18.4 billion have been provided as of March 31, 2021. Under these guarantee contracts,
Toyota is entitled to recover any amounts paid by it from the customers whose obligations it guaranteed.

5.F TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSContractual Obligations and Commitments
For information regarding the amounts of non-derivative financial liabilities and derivative financial
liabilities by a remaining contract maturity period, see note 20 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, 2021.

Total

Contractual Obligations:Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . 4,339,890
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . 21,079,033
Class share . . . . . . . . . . . . . . . . . . . . . . . . . . . .
240,712
Commitments for the purchase of property,
plant, other assets and services (note 31) . .
359,214

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

5 years
and after

4,339,890———
7,631,457 7,894,787 3,826,167 1,726,622
240,712———217,371

99,201

26,505

16,137

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,018,849 12,429,430 7,993,988 3,852,672 1,742,759
Commercial Commitments (note 31):
Maximum potential exposure to guarantees
given in the ordinary course of business . . .

3,710,352

915,515 1,613,630 1,012,040

169,168

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

3,710,352

915,515 1,613,630 1,012,040

169,168* “Long-term debt” represents future principal payments.
Toyota expects to contribute ¥39,392 million domestically and ¥16,604 million overseas to its postemployment benefit plans in fiscal 2022.

5.G SAFE HARBOR
All information that is not historical in nature disclosed under “— Off-Balance Sheet Arrangements” and“— Tabular Disclosure of Contractual Obligations” is deemed to be a forward-looking statement. See“Cautionary Statement Concerning Forward-Looking Statements” for additional information.
78

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
6.A DIRECTORS AND SENIOR MANAGEMENTIn March 2011, Toyota announced its “Toyota Global Vision.” With respect to its framework for executing
its operations, Toyota, with the aim of realizing the Toyota Global Vision, has been continuing its efforts to
respond swiftly to the external environment, which is changing faster than ever. Following the introduction of“region-based operations,” the “business unit system” and the “in-house company system” in 2011, 2013 and2016, respectively, for the purpose of further accelerating decision-making and operational execution, Toyota
further clarified that members of the board of directors are responsible for decision-making and management
oversight and that operating officers are responsible for operational execution. Furthermore, in 2018, Toyotachanged the commencement 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 inan effort to enable decision-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” andthe development of a diverse and talented workforce, the executive structure was changed to be composed onlyof 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, have been redefined as “operating officers.” In-house company presidents, regional CEOs, and chief
officers, as on-site leaders of business implementation elements, have been given authority while being
consolidated into the classification of “senior professional/senior management.” The roles of operating officers
and senior professionals/senior management are to be determined where and as needed, and persons appointed as
operating officers and senior professionals/senior management will change in accordance with the challenges
faced and the path that should be taken, as the company exercises greater flexibility in making appointments.
Based on its basic policy of appointing the right people to the right positions, Toyota has been swiftly andcontinuously innovating. Toyota will further press forward the tide of such innovations, aiming for a corporate
structure capable of carrying out management from a viewpoint that is optimal for a global company.
In order to convey top management’s aspirations and the company’s direction to all stakeholders, Toyota
communicates what Toyota is really like through “Toyota Times.”
Toyota believes that it is critical to appoint individuals who are capable of contributing to decision-making
aimed at sustainable growth into the future in keeping with the spirit of the Toyoda Precepts, which set forth its
founding philosophy. Moreover, these individuals should be able to play a significant role in transforming
Toyota into a “mobility company” through responding to social transformation by using CASE external
partnerships based on trust and friendship and internal two-way interactive teamwork, while working infurtherance of the Sustainable Development Goals, formally adopted by the United Nations in September 2015
(the “SDGs”), and towards solutions for other social challenges. Toyota maintains its board of directors andsenior management at an adequate size, and ensures they are overall balanced and diverse, including from theperspective of gender and nationality. Three outside members of the board of directors have been appointed inorder to further reflect the opinions of those from outside the company in management’s decision-making
process. Toyota has six audit & supervisory board members, three of whom are outside audit & supervisoryboard members. In order to be prepared in the event Toyota lacks the number of audit & supervisory board
members required by law, one substitute audit & supervisory board member has been appointed pursuant to
Article 329, Paragraph 3 of the Companies Act.
79

Set forth below are brief summaries of Toyota’s members of the board of directors and audit & supervisoryboard members.
Name(Date of birth)

PositionTakeshi Uchiyamada Chairman of the Board(August 17, 1946)
of Directors

Brief career summary and important concurrent duties

1969 Joined Toyota Motor Corporation(“TMC”)
1998 Member of the Board of Directors of
TMC
2001 Managing Director of TMC
2003 Senior Managing Director of TMC
2005 Executive Vice President of TMC
2012 Vice Chairman of TMC
2013 Chairman of TMC (to present)

Number of shares

85,039shares(important concurrent duties)
Director of JTEKT Corporation
Director of Mitsui & Co., Ltd.
Shigeru Hayakawa
Vice Chairman of the(September 15, 1953)
Board of Directors

1977 Joined Toyota Motor Sales Co., Ltd.
2007 Managing Officer of TMC
2007 Toyota Motor North America, Inc.
President
2009 Retired from 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)

43,491shares(important concurrent duties)
Representative Director of Institute forInternational Economic Studies
Akio Toyoda(May 3, 1956)

President,
Member of the Boardof Directors

1984 Joined TMC
2000 Member of the Board of Directors of
TMC
2002 Managing Director of TMC
2003 Senior Managing Director of TMC
2005 Executive Vice President of TMC
2009 President of TMC (to present)(important concurrent duties)
Chairman and CEO of Toyota Motor North
America, Inc.
Chairman of TOWA REAL ESTATE Co., Ltd.
Chairman of the Japan Automobile
Manufacturers Association, Inc.
Director of DENSO Corporation
Representative Director of ROOKIERacing, Inc.

80

4,792,561
sharesName(Date of birth)

Position

Brief career summary and important concurrent duties

Number of shares

Koji Kobayashi(October 23, 1948)

Member of the Boardof Directors,
Operating Officer

1972 Joined TMC
2004 Executive Director of DENSOCORPORATION (“DENSO”)
2007 Senior Executive Director, Member of theBoard of Directors of DENSO
2010 Executive Vice President of DENSO
2015 Vice Chairman of DENSO
2016 Advisor of TMC
2017 Senior Advisor of TMC
2018 Operating Officer (Executive Vice
President) of TMC
2018 Member of the Board of Directors of
DENSO
2018 Retired as Member of the Board of
Directors of DENSO
2018 Member of the Board of Directors of
TMC
2020 Member of the Board of Directors andOperating Officer of TMC (to present)

34,971sharesJames Kuffner(January 18, 1971)

Member of the Boardof Directors,
Operating Officer

1999 Postdoctoral Research Fellow at the Japan
Society for the Promotion of Science
2002 Research Scientist of the Robotics
Institute at Carnegie Mellon University
2005 Assistant Professor of the Robotics
Institute at Carnegie Mellon University
2008 Associate Professor of the Robotics
Institute at Carnegie Mellon University
2009 Adjunct Associate Professor of the
Robotics Institute at Carnegie Mellon
University
2009 Research Scientist at Google Inc.
2013 Engineering Director of Google Inc.
2016 Chief Technology Officer of Toyota
Research Institute, Inc.
2018 Chief Executive Officer of Toyota
Research Institute - Advanced Development,
Inc. (to present)2018 Executive Advisor at Toyota ResearchInstitute, Inc. (to present)
2020 Senior Fellow at TMC
2020 Member of the Board of Directors,
Operating Officer of TMC (to present)
2021 Toyota Research Institute - Advanced
Development, Inc. changed its corporatename to Woven Core, Inc. and was
reorganized into the Woven Planet Group.

111
shares81

Name(Date of birth)

Position

Brief career summary and important concurrent duties

Number of shares

2021 Chief Executive Officer andRepresentative Director of Woven Planet
Holdings, Inc. (to present)(important concurrent duties)
Chief Executive Officer and Representative
Director of Woven Planet Holdings, Inc.
Representative Director of Woven Core, Inc.
President and Representative Director of
Woven Alpha, Inc.
Kenta Kon
(August 2, 1968)

Member of the Boardof Directors,
Operating Officer

1991 Joined TMC
2018 Managing Officer of TMC
2019 Operating Officer of TMC
2021 Member of the Board of Directors,
Operating Officer of TMC (to present)

4,817
shares(important concurrent duties)
Director of Hino Motors, Ltd.
Ikuro Sugawara(March 6, 1957)

Outside Member of the 1981 Joined Ministry of International Trade
Board of Directors
and Industry
2010 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,
Trade and 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
2017 Special Advisor to the Cabinet2018 Retired from Special Advisor to the
Cabinet2018 Outside Member of the Board of
Directors of TMC (to present)—

Sir Philip Craven(July 4, 1950)

Outside Member of the 1989 President of the International Wheelchair
Board of Directors
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
Directors of TMC (to present)—

Teiko Kudo
(May 22, 1964)

Outside Member of the 1987 Joined the Sumitomo Bank, Limited
Board of Directors
2014 Executive Officer of Sumitomo Mitsui
Banking Corporation

1,441
shares82

Name(Date of birth)

Position

Brief career summary and important concurrent duties

Number of shares2017 Managing Executive Officer of
Sumitomo Mitsui Banking Corporation2018 Outside Member of the Board of
Directors of TMC (to present)
2020 Senior Managing Executive Officer of
Sumitomo Mitsui Banking Corporation
2020 Senior Managing Executive Officer of
Sumitomo Mitsui Financial Group, Inc.
2021 Director and Senior Managing Executive
Officer of Sumitomo Mitsui Banking
Corporation (to present)
2021 Senior Managing Corporate Executive
Officer of Sumitomo Mitsui Financial
Group, Inc. (to present)(important concurrent duties)
Senior Managing Corporate Executive Officer
of Sumitomo Mitsui Financial Group, Inc.
Director Senior Managing Executive Officer of
Sumitomo Mitsui Banking Corporation
Haruhiko Kato
(July 21, 1952)

Full-time Audit &Supervisory Board
Member1975 Joined Ministry of Finance2007 Director-General of the Tax Bureau,
Ministry of Finance2009 Commissioner of National Tax Agency
2010 Retired from Commissioner of National
Tax Agency
2011 Senior Managing Director of Japan
Securities Depository Center, Inc.
2011 President of Japan Securities Depository
Center, Inc.
2013 Member of the Board of Directors of
TMC (to present)2015 President and CEO of Japan Securities
Depository Center, Inc.
2018 Retired as Member of the Board of
Directors of TMC
2019 Director of Japan Securities Depository
Center, Inc.
2019 Audit & Supervisory Board Member of
TMC (to present)
2019 Retired as Director of Japan Securities
Depository Center, Inc.

—

Masahide Yasuda(April 1, 1949)

Full-time Audit &Supervisory Board
Member1972 Joined TMC
2000 General Manager of Overseas Parts
Division of TMC
2007 President of Toyota Motor Corporation
Australia Ltd.
2014 Chairman of Toyota Motor Corporation
Australia Ltd.

9,793
shares83

Name(Date of birth)

Position

Brief career summary and important concurrent duties

Number of shares2017 Retired as Chairman of Toyota Motor
Corporation Australia Ltd.
2018 Audit & Supervisory Board Member of
TMC (to present)
Katsuyuki Ogura(January 25, 1963)

Full-time Audit &Supervisory Board
Member1985 Joined TMC
2015 General Manager of AffiliatedCompanies Finance Dept. of TMC
2018 General Manager of Audit & Supervisory
Board Office of TMC
2019 Audit & Supervisory Board Member of
TMC (to present)

4,405
shares(important concurrent duties)
Outside Audit & Supervisory Board Member ofAichi Steel Corporation
Yoko Wake
Outside Audit &(November 18, 1947)
Supervisory Board
Member1970 Joined the Fuji Bank, Limited
1973 Retired from the same1977 Assistant Lecturer of Faculty of Business
and Commerce of Keio University
1982 Associate Professor of the same
1993 Professor of the same2011 Outside Audit & Supervisory Board
Member of TMC (to present)2013 Professor Emeritus of Keio University (topresent)—(important concurrent duties)
Professor Emeritus of Keio University
Hiroshi Ozu(July 21, 1949)

Outside Audit &Supervisory Board
Member2012 Prosecutor-General
2014 Retired from Prosecutor-General
2014 Registered as Attorney2015 Outside Audit & Supervisory Board
Member of TMC (to present)

89
shares(important concurrent duties)
Attorney
Outside Corporate Auditor of Mitsui & Co.,Ltd.
Audit & Supervisory Board Member (External)of Shiseido Company, Limited
Nobuyuki Hirano(October 23, 1951)

Outside Audit &Supervisory Board
Member1974 Joined Mitsubishi Bank
2001 Executive Officer of The Bank of TokyoMitsubishi, Ltd.
2004 Executive Officer of Mitsubishi UFJ
Financial Group, Inc.
2005 Managing Executive Officer of The Bankof Tokyo-Mitsubishi, Ltd.
2005 Director of Mitsubishi UFJ Financial
Group, Inc.
84

493
sharesName(Date of birth)

Position

Brief career summary and important concurrent duties

Number of shares2006 Managing Director of The Bank ofTokyo-Mitsubishi UFJ, Ltd.
2008 Senior Managing Director of The Bank ofTokyo-Mitsubishi UFJ, Ltd.
2009 Managing Executive Officer of
Mitsubishi UFJ Financial Group, Inc.
2010 Deputy President of Mitsubishi UFJ
Financial Group, Inc.
2012 President of The Bank of TokyoMitsubishi UFJ, Ltd.
2012 Director of Mitsubishi UFJ Financial
Group, Inc.
2013 President & CEO of Mitsubishi UFJ
Financial Group, Inc.
2015 Director, President & Group CEO of
Mitsubishi UFJ Financial Group, Inc.
2016 Chairman of the Board of Directors ofBank of Tokyo-Mitsubishi UFJ, Ltd.
2018 Outside Audit & Supervisory Board
Member of TMC (to present)
2019 Director, Chairman of Mitsubishi UFJ
Financial Group, Inc.
2019 Member of the Board of Directors of
MUFG Bank, Ltd.
2021 Retired as Member of the Board of
Directors of MUFG Bank, Ltd.
2021 Director of Mitsubishi UFJ Financial
Group, Inc. (to present)(important concurrent duties)
Director of Mitsubishi UFJ Financial Group,
Inc.
Director of Morgan Stanley
Audit and Supervisory Committee Member of
Mitsubishi Heavy Industries, Ltd.
1.

Mr. Akio Toyoda, who is President and Member of the Board of Directors, concurrently serves as
Operating Officer (President).

2.

Mr. Koji Kobayashi, Dr. James Kuffner and Mr. Kenta Kon who are Members of the Board of
Directors, concurrently serve as Operating Officers.

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.

85Set forth below is a brief summary of Toyota’s substitute audit & supervisory board member.
Name(Date of birth)

Ryuji Sakai(August 7, 1957)

Position

Brief career summary and important concurrent duties

Substitute Audit &Supervisory Board
Member1985 Registered as attorney and joined
Nagashima & Ohno
1990 Wilson Sonsini Goodrich & Rosati
1995 Partner of Nagashima & Ohno
2000 Partner of Nagashima Ohno &Tsunematsu (to present)

Number andkind of shares—(important concurrent duties)
Attorney
Outside Audit & Supervisory Board Member of
Kobayashi Pharmaceutical Co., Ltd.
6.B COMPENSATION
Decision Making Policy and Process
Toyota believes that it is critical to appoint individuals who are capable of contributing to decision-making aimed
at sustainable growth into the future in keeping with the spirit of the Toyoda Precepts, which set forth its
founding philosophy. Moreover, these individuals should be able to play a significant role in transforming TMC
into a “mobility company” and contribute to the solutions of social issues, including by contributing to therealization of the SDGs, through responding to social transformation by using CASE external partnerships basedon trust and friendship and internal two-way interactive teamwork. Toyota’s director compensation system is an
important means through which 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 fromthe same 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 standards in each member’s homecountry are also taken into account when determining remuneration levels and payment methods. Remunerationfor 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.
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.
86The amount of remuneration for each member of the board of directors of the Company and the
remuneration system are decided by the board of directors and the “Executive Compensation Meeting,” amajority of the members of which are outside members of the board of directors, to ensure the independence ofthe decision. The Executive Compensation Meeting consists of chairman of the board of directors Takeshi
Uchiyamada (Chairman) and director Koji Kobayashi, and outside members of the board of directors Ikuro
Sugawara, Sir Philip Craven and Teiko Kudo.
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 for
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 May 2020 and March and April 2021 to discuss anddetermine the amount of remuneration for fiscal 2021 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 August, September and October 2020 and February and March
2021 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 2021•

Evaluation of individual performance•

Determination of the amount of remuneration for each member of the board of directors

Method of Determining Performance-based Remuneration (Bonus and Share Compensation)
Directors with Japanese citizenship (excluding outside members of the board of directors)
Toyota sets the total amount of remuneration (“Annual Total Remuneration”) received by each member ofthe board of directors in a year based on consolidated operating income, the fluctuation of the share price ofToyota 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
by referring to the benchmarking result of remuneration for officers of companies located in Japan.
87Concept of Each Item
Consolidated operating
incomeIndicator for evaluating Toyota’s efforts based on businessperformance

Fluctuation of the share
price

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

Method and Reference Value for Evaluating Indicators and Evaluation Result for Fiscal 2021

Consolidated
operating income

Fluctuation of
the Company’s
share priceEvaluation
WeightEvaluation Method

50%

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

50%

Comparatively evaluate thefluctuation of Toyota’s shareprice up to the end of fiscal 2021,
using the share price of Toyota
and the Nikkei stock average atthe end of fiscal 2020 asreference values

Reference Value

Evaluation
Result for
Fiscal 2021

¥1 trillion
150%
Company’s shareprice: ¥6,501
Nikkei average:¥18,917

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 for eachmember of the board of directors based on consolidated operating income and the fluctuation of the share price ofToyota, and then adjusted based on individual performance evaluation. Individual performance evaluation is set
within the range of 25% above or below Annual Total Remuneration for each position, taking into accountvarious factors such as initiatives in keeping with the spirit of the Toyoda Precepts which set forth Toyota’s
founding philosophy, trust from his or her peers and contribution to the promotion of human resources
development. The amount of the annual total remuneration for each member of the board of directors is
calculated based on such individual performance evaluation.
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.
Performance-based remuneration is set based on consolidated operating income, the fluctuation of the share priceof Toyota and individual performance, taking into account each member’s job responsibilities and the
remuneration standards of such member’s home country. The concept of each item is the same as that for
directors with Japanese citizenship (excluding outside members of the board of directors). There are cases where
Toyota provides income tax compensation for certain members of the board of directors in light of the difference
in income tax rates with those of his or her home country.
88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 ¥3,226 million
during fiscal 2021.
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 24, 2021,
contained the following information concerning compensation in fiscal 2021 on a consolidated basis for membersof the board of directors and audit & supervisory board members whose total compensation exceeded¥100 million during such period:- Takeshi Uchiyamada, Member of the Board of Directors: ¥222 million (¥110 million in basecompensation, ¥61 million in bonus and ¥50 million in share compensation (5,000 shares))- Shigeru Hayakawa, Member of the Board of Directors: ¥140 million (¥66 million in base compensation,¥41 million in bonus and ¥33 million in share compensation (3,000 shares))- Akio Toyoda, Member of the Board of Directors: ¥442 million (¥185 million in base compensation,¥25 million in bonus and ¥231 million in share compensation (23,000 shares))- Koji Kobayashi, Member of the Board of Directors: ¥134 million (¥72 million in base compensation,¥12 million in bonus and ¥49 million in share compensation (4,000 shares))- Didier Leroy, Member of the Board of Directors: ¥1,451 million (¥83 million in base compensation,¥619 million in bonus and ¥747 million in other) *Other refers to income tax compensation that was
granted to Mr. Leroy, with respect to his remuneration during the period in which he served as a memberof the Board of Directors. Mr. Leroy retired on June 11, 2020.
- Shigeki Terashi, Member of the Board of Directors: ¥138 million (¥75 million in base compensation and¥63 million in bonus)- James Kuffner, Member of the Board of Directors: ¥284 million (¥255 million in base compensation and¥28 million in bonus)
The amounts above were recorded as expenses in fiscal 2021.
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.
89Under the provisions of the Companies Act, if Toyota decides the terms of an agreement promising that
Toyota will compensate a director for all or part of certain expenses incurred by the director, such a decisionmust be made by a resolution of the board of directors. Under the provisions of the Companies Act, if Toyota
decides the terms of an insurance agreement to be executed with an insurer, under which a director is the insured,
and which promises that the insurer will compensate for damage arising from the director being held liable inrelation to the execution of his or her duties or from a liability claim filed against the director, such decision 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 arisingin connection with their failure to execute their duties to an amount equal to the minimum liability limit amountprescribed in the laws and regulations.
90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 Takeshi Uchiyamada, the Chairman of the Board of Directors, andKoji Kobayashi, Ikuro Sugawara, Sir Philip Craven and Teiko Kudo, each, a Member of the Board of Directors.
6.D EMPLOYEESThe total number of Toyota employees, on a consolidated basis, was 366,283 as of March 31, 2021 and
361,907 as of March 31, 2020. The following tables set forth a breakdown of persons employed by businesssegment and by geographic location as of March 31, 2021.
Segment

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

Number of
Employees

Location

325,328 Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12,393 North America . . . . . . . . . . . . . . . . . . . . . .
23,457 Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,105 Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . .
366,283 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of
Employees

204,397
51,77424,251
66,471
19,390366,283* “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 87% 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 2.52% in fiscal 2021.
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 80,009 during fiscal 2021.
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 2021, see “— Directors and Senior Management.”
None of Toyota’s shares of common stock entitles the holder to any preferential voting rights. As of
March 31, 2021, 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.
91

Toyota’s board of directors resolves the share compensation within the maximum share compensation
amount of 4.0 billion yen per year established at the 115th Ordinary General Shareholders’ Meeting held on
June 13, 2019. The overview of the share compensation is as follows.
Eligible persons

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

Total amount of the sharecompensation

Maximum of 4.0 billion yen per year

Amount of the sharecompensation
payable to each member of theboard of directors

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

Type of shares to be allotted andmethod of allotment

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

Total number of shares to be
allotted

Maximum of 800,000 shares per year in total to eligible members of theboard of directors

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 is determinedby 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 expiration of theterm of office, death, or other legitimate reasons.

Gratis acquisition by Toyota

Toyota will be able to acquire all allotted shares without consideration in
thecase 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 theirmonthly salary and bonuses to purchase Toyota’s common stock through the employee stock ownershipassociation. As of March 31, 2021, the employee stock ownership association held 15,235,285 shares of Toyota’scommon stock.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
7.A MAJOR SHAREHOLDERS
As of March 31, 2021, 3,262,997,492 shares of Toyota’s common stock (of which 467,048,832 shares weretreasury stock and 2,795,948,660 shares were outstanding) and 47,100,000 First Series Model AA Class Sharesof Toyota (of which 24,387,006 shares were treasury stock and 22,712,994 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 Model92

AA Class Shares pursuant to the Companies 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 ownershipof Toyota’s common stock in the table below was prepared from information known to Toyota or that could beascertained from public filings, including filings made by Toyota’s shareholders regarding their ownership ofToyota’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 ADSs representing such shares) must file a report concerning theshareholding 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 matter set 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

238,466

8.55

According to The Bank of New York Mellon, depositary for Toyota’s ADSs (the “Depositary”), as ofMarch 31, 2021, 54,467,360 shares of Toyota’s common stock were held in the form of ADRs and there were1,764 ADR holders of record and 297,103 beneficial owners in the United States. According to Toyota’s registerof shareholders, as of March 31, 2021, there were 512,745 holders of common stock and First Series Model AA
Class Shares of record worldwide. As of March 31, 2021, there were 497 record holders of Toyota’s common
stock with addresses in the United States, whose shareholdings represented approximately 9.5% of the issued
common stock on that date. Because some of these shares were held by brokers or other nominees, the number ofrecord holders with addresses in the United States 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.
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 will amend its articles of incorporation to increase thetotal 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.
93

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 affiliated companies accounted for by the equity
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 affiliated entities in the amount of¥6,035.2 billion in fiscal 2021. Toyota also sells its products and services, among others, to Toyota’s affiliatedcompanies 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 affiliated entities in the amountof ¥1,637.5 billion in fiscal 2021. See note 33 of Toyota’s consolidated financial statements for additional
information regarding Toyota’s investments in and transactions with affiliated companies.
Loans
Toyota regularly has trade accounts and other receivables by, and accounts payable to, Toyota’s affiliatedcompanies accounted for by the equity method and firms with which certain members of Toyota’s board of
directors are affiliated. Toyota had outstanding trade accounts and other receivables by these affiliated entities in
the amount of ¥310.4 billion as of March 31, 2021. Toyota had outstanding trade accounts and other payables tothese affiliated entities in the amount of ¥856.6 billion as of March 31, 2021.
Toyota, from time to time, provides short- to medium-term loans to its affiliated companies, as well as loans
under a loan program established by certain subsidiaries to assist their executives and members of the board of
directors with the purchase of homes. As of March 31, 2021, an aggregate amount of ¥127.8 billion in loans wasoutstanding to its affiliated companies accounted for by the equity method. Toyota believes that each of theseloans was entered into in the ordinary course of business.
Other
For the year ended March 31, 2021, Akio Toyoda, President of TMC, invested ¥5,000 million in Woven
Planet Holdings, Inc., a consolidated subsidiary of TMC.
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.
4.

Not applicable.

5.

Not applicable.

6.

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

7.

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

8.

Dividend Policy. See “Key Information — Selected Financial Data — Dividend Information.”94

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 Tokyo Stock Exchange and the Nagoya Stock Exchange
under the ticker symbol “7203” in Japan, and on the London Stock Exchange under the ticker symbol “TYT.”
Toyota’s American Depositary Shares, or ADSs, each representing two shares of Toyota common stock, arelisted 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 Tokyo Stock Exchange. The common stock isalso listed on the Nagoya Stock Exchange and on the London Stock Exchange.
Since September 29, 1999, American Depositary Shares, each equal to two shares of Toyota’s common
stock and evidenced by American Depositary Receipts, have been traded and listed on the New York Stock
Exchange through a sponsored ADR facility operated by The Bank of New York Mellon, as Depositary. Prior tothat time, Toyota’s ADSs were listed on the Nasdaq SmallCap Market through five unsponsored ADR 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 will amend 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.
95

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 (the “Book-Entry Transfer Act”) and related legislation.
GeneralToyota’s authorized number of shares as of March 31, 2021 was 10,000,000,000 shares, with the total
number of authorized shares per class being 10,000,000,000 for common stock, 50,000,000 for First Series
Model AA Class Shares, 50,000,000 for Second Series Model AA Class Shares, 50,000,000 for Third Series
Model AA Class Shares, 50,000,000 for Fourth Series Model AA Class Shares and 50,000,000 for Fifth Series
Model AA Class Shares, and the total number of shares authorized to be issued with respect to First Series ModelAA Class Shares through Fifth Series Model AA Class Shares not to exceed 150,000,000 shares. Of theauthorized common stock, 3,262,997,492 shares have been issued. In conjunction with the cancellation of all of
the Model 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, resulting in Toyota’s authorized number of shares
being 10,000,000,000 shares.
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.

96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;•

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 a97

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 andthe 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.
98

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.
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.
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 (“ICJ”) to exercise their voting rights through the use of the Internet, if such institutional investor applies
to use the platform in advance. Shareholders may also exercise their voting rights through proxies, provided thatthose proxies 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;99

(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;(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.
100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).
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 “— 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 those101

shareholdings. 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.
10.C MATERIAL CONTRACTS
All contracts concluded by Toyota during the two years preceding this filing were entered into in theordinary 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 of102

Japan (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; and(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 July 10, 2020, 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 or103

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.”
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);
104

(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.
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;105

(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 notification
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,106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”),
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 ADRs evidencing ADSs will be treated as the owners of the shares of common stock represented bythose ADSs, and exchanges of shares of common stock for ADSs, and exchanges of 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.
107

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
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 individual
shareholder who holds three percent or more of the total issued shares of the relevant Japanese corporation, theaforementioned 20.42 percent withholding tax rate is reduced to 15.315 percent for dividends due and payable onor 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, Singapore and Spain(for dividends due and payable on or before December 31, 2021), 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 the income tax treaties with, among others,
Spain (for dividends due and payable on or after January 1, 2022)).
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 and108

documents). 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 applicable
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.
109

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 includedin 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.”
Subject to generally applicable limitations under U.S. federal income tax law and the Treaty, 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, or alternatively as a deduction in the computation of such U.S. Holder’staxable income if the U.S. Holder does not elect to claim a credit for any foreign taxes paid or accrued for the
taxable year. Special rules generally will apply to the calculation of foreign tax credits in respect of dividend
income that qualifies for preferential U.S. federal income tax rates. Additionally, special rules apply toindividuals whose foreign source income during the taxable year consists entirely of “qualified passive income”
and whose creditable foreign taxes paid or accrued during the taxable year do not exceed $300 ($600 in the caseof 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.
110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, 2021, 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.
111

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 (http://www.sec.gov). In addition, Toyota’s reports, proxy statements and112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: Financial
Reporting Department, Accounting Division, telephone number: +81-565-28-2121.
10.I SUBSIDIARY INFORMATION
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 21 and 22 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 20 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.

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12.D AMERICAN DEPOSITARY SHARESFees and Charges for Holders of American Depositary Receipts
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.
Persons depositing or withdrawing shares must pay:For:

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

Issuance of ADSs, including issuances resulting
from a distribution, sale or exercise of shares orrights or other property•

Cancellation of ADSs for the purpose ofwithdrawal including if the deposit agreement
terminates$0.02 (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 the ADR holder had been sharesand the shares had been deposited for issuance of ADSs•

Distribution of securities distributed to holders
of deposited securities which are distributed by
the Depositary to ADS registered holders

Registration fees•

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

Expenses of the Depositary•

Cable, telex and facsimile transmissions (whenexpressly provided in the deposit agreement)•

Converting foreign currency to U.S. dollars•

As necessary

Taxes and other governmental charges the Depositaryor the custodian have to pay on any ADS or share
underlying an ADS
Fees Incurred in Fiscal 2021

For fiscal 2021, Toyota received $760,657,79 from the Depositary for standard out-of-pocket maintenancecosts for the ADRs (consisting of the expenses of postage and envelopes for mailing annual reports, printing anddistributing dividend checks, stationery, postage, facsimile, and telephone calls), expenses relating to Toyota’s
annual general shareholders’ meeting that are incurred with respect to Toyota’s ADR holders and 50% of the net
dividend fees collected by the Depositary. The Depositary also paid Toyota’s continuing annual stock exchange
listing fees.
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 ADRs, 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 and any other program related expenses. The limit on the amount of expenses forwhich the Depositary will pay is the sum of $300,000 annually. In addition, the Depositary has agreed to pay
Toyota 50% of the net dividend fees collected by the Depositary during each annual period towards theaforementioned expenses.
114

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 2021. 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 Operating Officer who concurrently serves as CFO. Toyota’s disclosure controls and procedures are designed
to provide reasonable assurance of achieving its objectives. Managerial judgment was necessary to evaluate thecost-benefit relationship of possible controls and procedures. The President and Representative Director as wellas the Operating Officer have concluded that Toyota’s disclosure controls and procedures are effective at thereasonable 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.
115

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, 2021.
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, 2021, 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 2021 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.
116

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 2020 and fiscal 2021.
Yen in millions
2020
2021

Audit Fees(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit-related Fees(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax Fees(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other Fees(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,712
132
398
497

4,602
70
373
185

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

5,739

5,230

(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 of117

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 inRule 10A-3(c)(3) under the Exchange Act, which provides an exemption from the NYSE’s listing standards
relating to audit 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 2021:

(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)April 1, 2020 – April 30, 2020 . . . . . . . . . . . . . . . . . . . . . .
May 1, 2020 – May 31, 2020 . . . . . . . . . . . . . . . . . . . . . . .
June 1, 2020 – June 30, 2020 . . . . . . . . . . . . . . . . . . . . . . .
July 1, 2020 – July 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . .
August 1, 2020 – August 31, 2020 . . . . . . . . . . . . . . . . . . .
September 1, 2020 – September 30, 2020 . . . . . . . . . . . . . .
October 1, 2020 – October 31, 2020 . . . . . . . . . . . . . . . . . .
November 1, 2020 – November 30, 2020 . . . . . . . . . . . . . .
December 1, 2020 – December 31, 2020 . . . . . . . . . . . . . .
January 1, 2021– January 31, 2021 . . . . . . . . . . . . . . . . . . .
February 1, 2021 – February 28, 2021 . . . . . . . . . . . . . . . .
March 1, 2021 – March 31, 2021 . . . . . . . . . . . . . . . . . . . .

547
254
1,140
970
914
1,240
709
1,460
1,937
2,398
2,385
1,918

6,636.15
6,358.68
6,886.92
6,788.81
6,750.89
7,033.11
6,949.13
7,205.72
7,651.17
7,824.40
8,049.77
8,133.64

—
—
—
—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—
—
—
—
—

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

15,872———

Period(d)Maximum
Number of
Sharesthat May
Yet BePurchased
Under thePlans or
Programs(2)(1) 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 accordancewith Toyota’s share handling regulations. Toyota is required to comply with such requests pursuant to theCompanies Act. See “Additional Information — Memorandum and Articles of Association — Japanese118

Unit Share System.” The number of shares purchased not pursuant to publicly announced plans or programs
conducted in fiscal 2021 is 15,872.
(2) Toyota did not conduct any share repurchases as a form of shareholder return in fiscal 2021.
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 three 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 the executionof 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) or audit & supervisoryboard 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 the boardof directors or manager or other key employee of Toyota.
119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. Japan’s Corporate Governance Code provides that companies
should appoint at least two “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 audit & supervisory board members, andmembers of the Executive Compensation Meeting, a majority of whom are outside directors, review the
remuneration system for members of board of directors and senior management as well as determine the amountof remuneration for each member of the board of directors.
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 thegeneral 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.
120

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.
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 Japan’s 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 Japan’s Corporate Governance Code, it is required to explain the reasons why itdoes 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
121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 Japan’s
Corporate Governance Code, Toyota is encouraged to adopt a code of conduct regarding ethical businessactivities for members of the board of directors, officers and employees. Toyota has resolved matters relating tomaintenance of an “internal control system,” or “naibu-tosei,” in order to ensure its employees comply withlaws, 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 codeof ethics pursuant to Section 406 of the Sarbanes-Oxley Act. Please see “Code of Ethics” for additional
information.
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.

122

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.

123

TOYOTA MOTOR CORPORATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page

Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-2

Consolidated statement of financial position at April 1, 2019, March 31, 2020 and 2021 . . . . . . . . . . . . .

F-4

Consolidated statement of income for the years ended March 31, 2020 and 2021 . . . . . . . . . . . . . . . . . . .

F-6

Consolidated statement of comprehensive income for the years ended March 31, 2020 and 2021 . . . . . . .

F-7

Consolidated statement of changes in equity for the years ended March 31, 2020 and 2021 . . . . . . . . . . . .

F-8

Consolidated statement of cash flows for the years ended March 31, 2020 and 2021 . . . . . . . . . . . . . . . . .

F-9Notes to consolidated financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F - 10All 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 the registrant’s proportionate share of the income from continuing operations before income taxes is lessthan 20% of consolidated income from continuing operations before income taxes and the investment in andadvances to each company is less than 20% of consolidated total assets.

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, 2021 and 2020, and April 1, 2019, and the related consolidated statement of income,comprehensive income, changes in equity and cash flows for each of the two years in the period ended March 31, 2021, 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 of March 31, 2021, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee ofSponsoring 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, 2021 and 2020, and April 1, 2019, and the results of its operations and its cash flows for each of the two years in
the period ended March 31, 2021 in conformity with International Financial Reporting Standards as issued by the International AccountingStandards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting asof March 31, 2021, 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 that werecommunicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to theF-2

consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit
matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating thecritical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Liabilities for the costs of recalls and other safety measures
As described in Notes 3 and 25 to the consolidated financial statements, the Company accrues for costs of recalls and other safety measures.
As of March 31, 2021, estimated liabilities for the costs of recalls and other safety measures totaled ¥1,034,981 million and were included inliabilities for quality assurance in the consolidated statement of financial position. The Company measures the majority of liabilities for thecosts of 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, the Company measures liabilities for costs of a particular recall or othersafety measures using an individual model when they are probable and reasonably estimable. Management calculates the liabilities for thecosts of recalls and other safety measures that are determined comprehensively based on the accumulated amount of repair cost paid 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 judgement 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 and pattern of actual payment occurrence utilized in developing the estimate. In addition, the audit effort included the involvement ofprofessionals with specialized skills 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. We also utilized professionals with specialized skills and knowledge to assist us in testing theliabilities by developing 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, 9 and 20 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, 2021, ¥198,204 million of the allowance for
credit losses corresponding to ¥15,048,433 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.
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) there was a significant amount of judgment by management when determining assumptions of theprobability of 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 judgement and subjectivity inperforming procedures to evaluate those 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 skills
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. We also used professionals with specialized skills and knowledge to assist us in evaluating the reasonableness of the assumptions
and adjustments determined by management.
/s/ PricewaterhouseCoopers Aarata LLC
Nagoya, Japan
June 24, 2021
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 . . . . . . . . . . . . . . . . . . . . . . . . . . .

7
8
9
10
11

Yen in millions
Transition date
April 1, 2019 March 31, 2020 March 31, 2021

3,602,805
2,954,617
6,657,367
2,640,392
2,731,040
84,574
507,654

4,098,450
2,648,360
6,621,604
2,143,602
2,533,892
237,609679,804

5,100,857
2,958,742
6,756,189
4,215,457
2,888,028
112,458
745,070

19,178,450

18,963,320

22,776,800

12
9
10

3,467,242
10,281,028
7,769,740

4,297,564
10,417,797
7,901,517

4,160,803
12,449,525
9,083,914

13
13
13
13
13

1,359,271
1,318,964
1,345,037
4,833,278
4,741,451
4,999,206
11,956,773 11,979,449 12,753,951
6,139,163
5,928,833
6,203,721
656,067
517,460
675,875

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

1324,944,551

Less - Accumulated depreciation andimpairment losses . . . . . . . . . . . . . . . . . . . . . .

13(14,260,446) (13,952,141) (14,566,638)

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

13

10,684,105

10,534,016

11,411,153

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

14
15
16
24

396,830
908,737
446,383
283,889

337,335
1,000,257
326,364
194,192

390,144
1,108,634
336,224549,942

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

34,237,955

35,009,043

39,490,339

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

53,416,405

53,972,363

62,267,140

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 . . . . . . . . . . . . . . . . . . .

24,486,156

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

25,977,791

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 . . . . . . . . . . . . . . . . . . . . . . . .

17
18

Yen in millions
Transition date
April 1, 2019 March 31, 2020 March 31, 2021

3,856,133
9,701,813
1,350,252
475,302321,316
1,769,514
1,008,032

3,498,029
9,906,755
1,256,794
538,740
212,276
1,552,970
1,176,645

4,045,939
12,212,060
1,397,140
763,875
350,880
1,482,872
1,207,700

18,482,362

18,142,209

21,460,466

11,342,315
189,957
1,002,710
1,227,292
516,560

11,434,219
360,588
1,022,161
1,198,005
476,169

13,447,575
323,432
1,035,096
1,247,220
465,021

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

14,278,833

14,491,142

16,518,344

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

32,761,195

32,633,351

37,978,811

19
25

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

18
19
24
16

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

26
26
26
26
26

397,050
397,050
397,050
487,162
489,334
497,275
20,613,776 22,234,061 24,104,176
1,016,035
585,549
1,307,726(2,606,925) (3,087,106) (2,901,680)

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

26

19,907,100

20,618,888

23,404,547

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

748,110

720,124

883,782

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

20,655,210

21,339,012

24,288,329

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

53,416,405

53,972,363

62,267,140

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

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENT OF INCOME

Notes

Yen in millions
For the year ended
For the year ended
March 31, 2020
March 31, 2021

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

27
27

27,693,693
2,172,854

25,077,398
2,137,195

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

27

29,866,547

27,214,594

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

23,103,596
1,381,755
2,981,965

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

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

27,467,315

25,016,845

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

2,399,232

2,197,748

310,247
305,846(47,155)(94,619)(80,607)351,029435,229(47,537)
15,142(19,257)

2,792,942

2,932,354

681,817649,976

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

2,111,125

2,282,378

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

2,036,140
74,9852,245,261
37,118Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,111,125

2,282,378

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

12
29
29

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

16

Yen

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

30

727.47803.23

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

30

720.10794.67

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

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Yen in millions
For the year ended For the year ended
Notes
March 31, 2020
March 31, 2021

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income, net of tax
Items that will not be reclassified to profit (loss)
Net changes in revaluation of financial assets measured at fairvalue through other comprehensive income . . . . . . . . . . . . . 26
Remeasurements of defined benefit plans . . . . . . . . . . . . . . . . 26
Share of other comprehensive income of equity method
investees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,26

2,111,125

2,282,378(243,853)(43,399)

387,427
216,272

62,56880,472

Total of items that will not be reclassified to profit (loss) . . . .

(224,684)

684,172(362,098)

403,636

113,390(83,503)(35,253)

8,172(283,961)

328,305(508,645)

1,012,476

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

1,602,480

3,294,854

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

1,555,009
47,4723,217,806
77,048Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,602,480

3,294,854

Items that may be reclassified subsequently to profit (loss)
Exchange differences on translating foreign operations . . . . . 26
Net changes in revaluation of financial assets measured at fairvalue through other comprehensive income . . . . . . . . . . . . . 26
Share of other comprehensive income of equity method
investees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,26
Total of items that may be reclassified subsequently to profit(loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total other comprehensive income, net of tax . . . . . . . . . . . . . . . . .

26

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, 2020
Yen in millions

Retainedearnings

Other
componentsof equity

Toyota Motor
Corporation
NonTotal
Treasury shareholders’ controlling shareholders’stockequityinterests
equity397,050 487,162 20,613,776

1,016,035(2,606,925) 19,907,100

Additional
Common paid-in
Notes stock
capitalBalances at April 1, 2019 . . . . . . . . . .
Comprehensive income
Net income . . . . . . . . . . . . . . . . .
Other comprehensive income,net of tax . . . . . . . . . . . . . . . . 26
Total comprehensive income . . .
Transactions with owners and other
Dividends paid . . . . . . . . . . . . . . 26
Repurchase of treasury stock . . . 26
Reissuance of treasury stock . . . 26
Change in scope of equity
method . . . . . . . . . . . . . . . . . .
Equity transactions and other . . .
Total transactions with owners
and other . . . . . . . . . . . . . . . . .
Reclassification to retained
earnings . . . . . . . . . . . . . . . . . . . . . 26
Balances at March 31, 2020 . . . . . . . .

—

—

—

—

—

—

—
—
—

—
—
4,053

—
—

2,036,140

20,655,210

74,9852,111,125———(481,131)—(481,131) (27,514)(508,645)

2,036,140(481,131)—

1,555,009

47,472

1,602,480(618,801)
—
—

—
—
—

—
(500,309)
20,128(618,801) (54,956)(500,309)—
24,181—(673,756)(500,309)
24,181—(1,882)

253,590
—

—
—

—
—

253,590—(1,882) (20,503)

253,590(22,384)—

2,171(365,211)—(480,181)(843,221) (75,458)(918,679)——(50,644)

50,644

397,050 489,334 22,234,061

585,549—

2,036,140

748,110———(3,087,106) 20,618,888

720,124

21,339,012

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 . . . . . . . . . . . . . . . . 26
Total comprehensive income . . .
Transactions with owners and other
Dividends paid . . . . . . . . . . . . . . 26
Repurchase of treasury stock . . . 26
Reissuance of treasury stock . . . 26
Change in scope of
consolidation . . . . . . . . . . . . .
Equity transactions and other . . .
Total transactions with owners
and other . . . . . . . . . . . . . . . . .
Reclassification to retained
earnings . . . . . . . . . . . . . . . . . . . . . 26
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

The accompanying notes are an integral part of these consolidated financial statements.
F-8(345,537)

TOYOTA MOTOR CORPORATIONCONSOLIDATED STATEMENT OF CASH FLOWS
Yen in millions
For the year ended For the year ended
Notes March 31, 2020
March 31, 2021

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 . . . . . . . . . . . . . . . . . . .
(Increase) decrease in trade accounts and other receivables . . . . . . . . . .
(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 refund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,111,125
1,595,347(193,046)

2,282,378
1,644,290(236,862)(310,247)
681,817(1,319,537)
257,588(1,214,742)(163,109)(308,342)(129,053)
258,904
43,270(64,053)
798,458
318,408(506,307)(777,522)(351,029)
649,976(1,063,562)
5,027(1,243,648)(242,769)(163,473)
384,142
282,197
55,281(140,319)
776,748
294,520(459,181)(810,117)

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

2,398,496

2,727,162

Cash flows from investing activities
Additions to fixed assets excluding equipment leased to others . . . . . . . . . . .
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,246,293)(2,195,291)
47,9491,391,193(304,992)(2,405,337)
1,151,463
1,224,185
212,473(1,213,903)(2,275,595)
40,542
1,371,699(278,447)(2,729,171)
1,020,533
1,041,385(1,661,218)(2,124,650)(4,684,175)

279,033
5,690,569(4,456,913)(618,801)(54,956)(476,128)(1,038,438)
9,656,216(5,416,376)(625,514)(36,598)
199,884

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

362,805

2,739,174

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

(141,007)

220,245

34

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 common shareholders . . . . . .
Dividends paid to non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . .
Reissuance (repurchase) of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . .

18
18
18
26

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

495,645

1,002,406

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

73,602,805

4,098,450

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

7

4,098,450

5,100,857

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

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, sport-utility vehicles, 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 their customers 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.
This is Toyota’s first consolidated financial statements in compliance with IFRS, and the date of thetransition to IFRS (“Transition Date”) was April 1, 2019. In the transition to IFRS, TMC has adopted IFRS 1“First-time Adoption of International Financial Reporting Standards” (“IFRS 1”). The effect of the transition to
IFRS on Toyota’s financial position, results of operations and cash flows are presented in “36. First-time
adoption”.
The consolidated financial statements were approved on June 24, 2021 by President, member of the Boardof Directors Akio Toyoda and CFO, member of the Board of Directors Kenta Kon.
(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.

F-10

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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.
(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 fromfinancial 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.
F-11

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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.
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.
F-12

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(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.
(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.
F-13

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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
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.

F-14

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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.
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
Toyota acquires new vehicle lease contracts originated primarily through dealers. The contract periods ofthese 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 andadministration 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.
F-15

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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
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.
F-16

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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.
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 of
F-17

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
each 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.
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.
F-18

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(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.
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.
F-19

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(2) Defined contribution plan
For defined contribution plans, when the employees render services, the contribution payables arerecognized in profit or loss.
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 safetymeasure” 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
F-20

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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.
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.
F-21

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Deferred tax liabilities for deductible 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.
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 25)
Allowance for credit losses on finance receivables (Note 3 “Allowance for credit losses on financereceivables” and Note 20 (2))
Impairment of non-financial assets (Note 3 “Impairment of non-financial assets” and Note 13)
Employee benefit obligations (Note 3 “Employee benefit obligations” and Note 24)
F-22

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Fair value measurements (Note 22)
Recoverability of deferred tax assets (Note 3 “Income taxes” and Note 16)
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, sport-utility vehicles, 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 well as other products. The All other segment includes telecommunications and other businesses.
(2) Segment information
As of transition date April 1, 2019
Yen in millions

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments accounted for using the equity
method . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Automotive

Financialservices

All other

Inter-segment
Elimination/
UnallocatedAmount18,743,549

24,366,422

2,323,909

7,982,524

53,416,405

3,340,218

5,118

36,211

85,695

3,467,242

Inter-segment
Elimination/
UnallocatedAmountConsolidated

Consolidated

As of and for the year ended March 31, 2020
Yen in millions

Financialservices

All other

Sales revenues
Revenues from external customers . . . . . 26,770,379
Inter-segment revenues and transfers . . .
29,3642,172,854
20,316923,314581,606—
29,866,547(631,286)—

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

26,799,743
24,786,609

2,193,170
1,909,429

1,504,920
1,401,564(631,286) 29,866,547(630,287) 27,467,315

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

2,013,134

283,742

103,356(999)

2,399,232

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

19,450,102

25,390,541

2,119,951

7,011,769

53,972,363

3,810,310
821,958
1,437,932

65,471
739,484
2,061,334

283,355
33,90568,363

138,428—
14,8184,297,564
1,595,347
3,582,448

Automotive

F-23

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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

Consolidated

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 April 1, 2019, March 31, 2020 and 2021 are ¥9,343,942 million, ¥8,584,459 million and¥11,344,879 million, respectively.
(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.

F-24

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(i) Consolidated Statement of Financial Position on Non-Financial Services Businesses and Financial
Services BusinessYen in millions
Transition date
April 1, 2019

March 31, 2020

March 31, 2021

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

2,818,313
3,027,544
2,279,004
2,731,040
435,279

2,682,431
2,646,618
1,849,063
2,533,892
738,008

3,274,149
3,063,314
3,778,119
2,888,028
664,097

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

11,291,179

10,450,012

13,667,707

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

6,177,114
12,674,327

6,228,180
13,234,909

6,805,166
14,721,626

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

18,851,441

19,463,089

21,526,792

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

30,142,621

29,913,101

35,194,499(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 . . . . . . . . . . . . . . . . . . . . . . . . .

784,492
180,6076,657,367
834,427
162,315

1,416,020
194,994
6,621,604
1,140,910
186,869

1,826,707
216,767
6,756,189
1,021,738
198,068

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

8,619,207

9,560,397

10,019,469

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

10,281,028
4,506,991
959,196

10,417,797
4,305,837
1,106,509

12,449,525
4,605,988
1,200,256

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

15,747,215

15,830,143

18,255,770

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

24,366,422

25,390,541

28,275,239(Elimination)
Elimination of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,092,638)(1,331,279)(1,202,599)

53,416,405

53,972,363

62,267,140(Consolidated)
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Note: Assets in non-financial services include unallocated corporate assets.

F-25

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions
Transition date
April 1, 2019

March 31, 2020

March 31, 2021

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 . . . . . . . . . . . . . . . . . . . . . .

3,687,407

3,305,034

3,801,753

852,0021,269,615
301,0212,576,512

685,431
1,197,245
197,2132,472,424

2,348,514
1,322,353
262,7272,650,433

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

8,686,557

7,857,347

10,385,779

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

1,567,346
986,860
1,124,943

1,549,676
1,005,538
1,149,254

1,523,134
1,015,156
1,509,535

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

3,679,148

3,704,467

4,047,825

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

12,365,705

11,561,815

14,433,605(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 . . . . . . . . . . . . . . . . . . . . . .

388,838

350,099

510,670

9,244,879
94,707
20,295
781,665

9,942,634
74,50815,064
937,231

10,286,251
102,200
88,153
1,002,615

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

10,530,384

11,319,535

11,989,889

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

9,982,796
15,850959,138

10,016,507
16,623
1,053,466

12,044,994
19,940696,294

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

10,957,784

11,086,596

12,761,228

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

21,488,168

22,406,131

24,751,117(Elimination)
Elimination of liabilities . . . . . . . . . . . . . . . . . . . . . . . . .

(1,092,679)(1,334,595)(1,205,911)

32,761,195

32,633,351

37,978,811(Consolidated) Total Toyota Motor Corporation
shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19,907,100

20,618,888

23,404,547(Consolidated) Non-controlling interests . . . . . . . . . . . . . . . .

748,110

720,124

883,782(Consolidated) Total shareholders’ equity . . . . . . . . . . . . . . .

20,655,210

21,339,012

24,288,329(Consolidated) Total liabilities and shareholders’ equity . . . .

53,416,405

53,972,363

62,267,140(Consolidated)
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shareholders’ equity

F-26

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
March 31, 2020
March 31, 2021

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

27,710,128
23,104,047
2,492,039

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

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

2,114,042

1,697,070

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

394,278

742,785

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

2,508,319

2,439,855

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

615,546

528,413

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

1,892,774

1,911,442

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

1,818,022
74,752

1,875,467
35,975(Financial Services Business)
Sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,193,170
1,397,344
512,085

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

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

283,742495,593

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

835(3,090)

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

284,577

492,503

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

66,284

121,536

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

218,293

370,967

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

218,060
233

369,824
1,143(Elimination)
Elimination of net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

59

(30)

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

2,111,125

2,282,378

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

2,036,140
74,9852,245,261
37,118(Consolidated)

F-27

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
March 31, 2020
March 31, 2021

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

1,892,774
855,863

1,911,442
928,533(298,494)
615,546(154,164)
141,975
316,610(46,217)(700,528)(345,374)
528,413(262,407)
123,606
290,618(35,371)(505,260)

2,623,364

2,634,200(1,222,821)(163,592)(1,203,662)(142,217)

46,76549,892(299,253)(2,220,217)

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

2,249,367(95,852)

1,982,302(1,339,372)(1,655,711)(3,400,534)

45,288247,048(163,486)

213,716
1,662,593(170,373)(618,801)(50,903)(476,128)(625,514)(34,840)
199,884

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

(1,016,982)

1,245,465

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

(86,553)

112,588

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

(135,882)

591,719

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

2,818,313

2,682,431

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

2,682,431

3,274,149

Net cash provided by (used in) operating activities . . . . . . . . . . . .
Cash flows from investing activities
Additions to fixed assets excluding equipment leased to others . . .
Additions to equipment leased to others . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of fixed assets excluding equipment leased toothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 andupon 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 . . . . . . . . . . . . . . . . . . .

F-28

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions
For the year ended For the year ended
March 31, 2020
March 31, 2021

(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 theequity method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities, and other . . . . . . . . . . .
Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes paid, net of refund . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) operating activities . . . . . . . . . . . .

218,293
739,484

370,967
715,757(200,727)(241,016)(11,753)
66,284(1,081,707)
664,167
1,799(467,774)(76,994)(5,655)
121,536(780,798)
661,272
3,901(431,939)(304,856)(148,928)

109,168(23,472)(2,031,699)(10,240)(2,133,378)

1,184
1,341,301(5,739)(185,120)

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

126,281(22,213)79,616(35,893)

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

(799,477)(997,688)

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 . . . . . . . . . . . . . . . . . .

514,196
5,458,616(4,334,374)(4,052)(1,517,259)
8,043,141(5,332,573)(1,757)

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

1,634,387

1,191,551

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

(54,454)

107,657

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

631,527

410,688

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

784,492

1,416,020

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

1,416,020

1,826,707(Consolidated)
Effect of exchange rate changes on cash and cash equivalents . . . . . . . .

(141,007)

220,245

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

495,645

1,002,406

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

3,602,805

4,098,450

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

4,098,450

5,100,857

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

F-29

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(4) Geographic information
As of transition date April 1, 2019
Yen in millions

Japan

North
America

Europe

Asia

Other

Total assets . . . . . . . . . . . . 17,436,485 17,752,487 3,980,823 5,283,390 3,107,162
Non-current assets . . . . . . 4,752,955 5,619,582 473,276 773,293 457,208

Inter-segment
Elimination/
UnallocatedAmountConsolidated

5,856,058 53,416,405— 12,076,315

As of and for the year ended March 31, 2020
Yen in millions

Japan

Sales revenues
Revenues fromexternalcustomers . . . . . . .
Inter-segment
revenues andtransfers . . . . . . . . .

NorthAmerica

Europe

Asia

Other

9,503,238 10,419,869 3,133,227 4,785,489 2,024,724

6,938,614

222,165

222,130

507,741

89,387

Total . . . . . . . . . 16,441,852 10,642,034 3,355,357 5,293,231 2,114,111
Operating expenses . . . . . . 14,856,576 10,388,830 3,211,540 4,929,684 2,030,110
Operating income . . . . . . .

1,585,276

253,205

143,817363,547

Inter-segment
Elimination/
UnallocatedAmountConsolidated—(7,980,038)

29,866,547—(7,980,038) 29,866,547(7,949,425) 27,467,315

84,001(30,613) 2,399,232

Total assets . . . . . . . . . . . . 18,221,453 18,579,078 4,264,022 5,307,513 2,881,536
Non-current assets . . . . . . 4,697,388 5,517,466 570,563 708,066 428,707

4,718,761 53,972,363— 11,922,190

As of and for the year ended March 31, 2021
Yen in millions

Japan

Sales revenues
Revenues fromexternalcustomers . . . . . . .
Inter-segment
revenues andtransfers . . . . . . . . .

8,587,193

6,361,739

Total . . . . . . . . . 14,948,931
Operating expenses . . . . . . 13,799,715
Operating income . . . . . . .

1,149,217

North
America

Europe

Asia

Other

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

165,853

166,200

489,398

95,6309,491,803 3,134,489 5,045,295 1,872,895
9,090,442 3,026,518 4,609,354 1,813,048
401,361

107,971435,940

59,847

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
F-30Inter-segment
Elimination/
UnallocatedAmountConsolidated—(7,278,820)

27,214,594—(7,278,820) 27,214,594(7,322,232) 25,016,845
43,413

2,197,748

7,361,372 62,267,140— 13,048,143

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)“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 of April 1, 2019, March 31, 2020 and 2021 are ¥9,343,942 million, ¥8,584,459 million and¥11,344,879 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,
2020
2021

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

7,229,849
10,546,655
2,932,324
5,217,857
3,939,863

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

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

29,866,547

27,214,594“Other” consists of Central and South America, Oceania, Africa and the Middle East, etc.
6. Business acquisition and transfer
TMC and Panasonic established a new joint venture, Prime Life Technologies, related to a town
development business for the year ended March 31, 2020. Prime Life Technologies became Toyota’s associatecompany accounted for by the equity method, and THC as well as Misawa Homes became subsidiaries of Prime
Life Technologies, causing THC and Misawa Homes to no longer be Toyota’s consolidated subsidiarycompanies.
Specifically, at the meeting of the Board of Directors held on May 9, 2019, TMC resolved to conclude
contracts aimed toward the establishment of Prime Life Technologies with Panasonic. On January 7, 2020, THC
and Misawa Homes, each a subsidiary of TMC, completed a share exchange in which THC became the wholly
owning parent company and Misawa Homes became the wholly owned subsidiary company, pursuant to a shareexchange agreement that was approved at the general meeting of shareholders of Misawa Homes on
November 26, 2019. Also effective January 7, 2020, and pursuant to the share transfer plan that was approved at
the general meeting of shareholders of THC on December 19, 2019, Toyota transferred all of the shares of THC
common stock to Prime Life Technologies, causing it to become the wholly owning parent company of THC.
THC then distributed all issued shares of Misawa Homes to Prime Life Technologies as a dividend of surplus, as
F-31

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
approved at the general meeting of shareholders of THC on January 7, 2020, with Prime Life Technologies
thereby becoming the wholly owning parent company of THC and Misawa Homes. Gains or losses realized fromthese transactions are not material.
In addition to the above, Toyota made several acquisitions and dispositions during the years ended
March 31, 2020 and 2021, however the assets and liabilities acquired or transferred were not material.
7. Cash and cash equivalents
Cash and cash equivalents consist of the following:Transition date
April 1, 2019

Yen in millions
March 31,
2020

2021

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

2,759,412
843,3932,764,771
1,333,679

3,346,401
1,754,456

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

3,602,805

4,098,450

5,100,857

8. Trade accounts and other receivables
Trade accounts and other receivables consist of the following:Transition date
April 1, 2019

Yen in millions
March 31,
2020

2021

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

2,401,348
569,762(16,493)

2,112,153
559,884(23,676)

2,301,976
688,352(31,586)

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

2,954,617

2,648,360

2,958,742

Trade accounts and other receivables which are unconditional rights to considerations are classified as
financial assets measured at amortized cost.
The changes in the allowance for doubtful accounts consist of the following:
Yen in millions
For the years ended March 31,
2020
2021

Allowance for doubtful accounts at beginning of year . . . . . . . . . . . . . . . . . . . . . . . .
Provision for doubtful accounts, net of reversal . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Write-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

90,497837(2,721)
1,653

90,266
7,780(3,112)
2,444

Allowance for doubtful accounts at end of year . . . . . . . . . . . . . . . . . . . . . . . . .

90,266

97,378“Other” includes currency translation adjustments.
F-32

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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.
9. Finance receivables
Finance receivables consist of the following:
Yen in millions
March 31,Transition date
April 1, 2019
2020
2021

Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and other dealer loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,773,344
1,636,536
3,489,756

12,802,072
1,691,418
3,479,613

15,048,433
2,031,280
3,185,484

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

17,899,635

17,973,103

20,265,197

Deferred origination costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Unearned income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Allowance for credit losses
Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and other dealer loans . . . . . . . . . . . . . . . . . . . . . . . . . .

204,305(986,928)

221,200
270,406(919,054) (1,068,587)(121,242)(26,483)(30,893)(159,770)(30,899)(45,179)(198,204)(33,455)(29,642)

Total finance receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,938,395

17,039,401

19,205,715

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,657,367
10,281,028

6,621,604
10,417,797

6,756,189
12,449,525

Total finance receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,938,395

17,039,401

19,205,715

Finance receivables were geographically distributed as follows: in North America 55.2%, in Asia 13.0%, in
Europe 12.3%, in Japan 8.2% and in Other 11.3% as of April 1, 2019, in North America 55.8%, in Asia 13.0%,
in Europe 12.6%, in Japan 8.8% and in Other 9.8% as of March 31, 2020, and in North America 54.6%, in Asia
13.5%, in Europe 13.2%, in Japan 8.3% and in Other 10.4% as of March 31, 2021.
Finance receivables are classified as financial assets measured at amortized cost.

F-33

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The contractual maturity of retail receivables, future lease payments for finance leases receivables,
wholesale receivables and other dealer loans are as follows:

Retail

Yen in millions
Transition date
April 1, 2019
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,094,135
3,035,992
2,434,026
1,728,217
942,876
538,098

418,450
325,744251,888
113,040
42,5826,538

2,495,356
235,985
237,026
140,418
143,747
237,225

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

12,773,344

1,158,242

3,489,756

Retail

Yen in millions
March 31, 2020
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,034,784
3,034,098
2,476,974
1,749,642
964,211542,362446,914335,863
247,389
134,488
48,9148,802

2,453,952
315,532
201,940
160,774
109,507237,907

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

12,802,072

1,222,370

3,479,613

Retail

Yen in millions
March 31, 2021
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,196,724
3,482,932
2,906,322
2,235,116
1,404,273
823,066

540,759
415,673
303,166
171,142
69,241
11,597

1,995,544
348,787
231,969
137,331
145,817
326,037

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

15,048,433

1,511,577

3,185,484

F-34

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Finance leases receivables consist of the following:
Yen in millions
March 31,Transition date
April 1, 2019
2020
2021

Lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Estimated unguaranteed residual values . . . . . . . . . . . . . . . . . . . . . . . .

1,158,242
478,294

1,222,370
469,048

1,511,577
519,703

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

1,636,536

1,691,418

2,031,280

Deferred origination costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Unearned income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Allowance for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11,929(143,838)(26,483)

12,349(146,087)(30,899)

13,701(169,098)(33,455)

Finance leases receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,478,144

1,526,781

1,842,429

10. Other financial assets
Other financial assets consist of the following:
Yen in millions
March 31,Transition date
April 1, 2019
2020
2021

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
incomePublic and corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,141,511
464,897

844,549
680,4542,566,221
554,997

59,426110,991
200,333
286,459

58,711
149,905
503,826
286,182

59,600317,101
282,364
489,824

5,806,502
2,332,625
7,388

5,372,687
2,115,736
33,067

6,075,498
2,945,780
7,986

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

10,410,133

10,045,118

13,299,371

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,640,392
7,769,740

2,143,602
7,901,517

4,215,457
9,083,914

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

10,410,133

10,045,118

13,299,371

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 the
F-35

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
nature 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 ¥2,217,346 million and ¥1,757,903 million for the years ended March 31,
2020 and 2021, respectively.
Major securities included in stocks measured at fair value through other comprehensive income as ofApril 1, 2019, March 31, 2020 and 2021 are as follows:
Yen in millions
March 31,Transition date
April 1, 2019
2020
2021

Issue

KDDI CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NIPPON TELEGRAPH AND TELEPHONE CORPORATION . . . . .
SUBARU CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MS&AD Insurance Group Holdings, Inc. . . . . . . . . . . . . . . . . . . . . . . .
HOTAI MOTOR CO., LTD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

711,905—
325,402179,62175,390952,192——
161,232
98,006

1,075,516
229,563—
173,171
126,049

As Toyota primarily holds long-term investments for business relationships, the investments have been
designated to be measured at fair value through other comprehensive income. For the year ended March 31,
2020, SUBARU CORPORATION became Toyota’s associate company accounted for by the equity method
through Toyota increasing its equity stake.
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,
2020
2021

Total fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30,2804,935

40,903
17,323

11. Inventories
Inventories consist of the following:
Yen in millions
March 31,Transition date
April 1, 2019
2020
2021

Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Work in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplies and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,819,022
326,012474,804
111,2021,614,070
316,756
482,987
120,079

1,749,415
350,308
644,779
143,526

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

2,731,040

2,533,892

2,888,028

F-36

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
12. Investments accounted for using the equity method
Equity in associates and joint ventures is as follows:
Yen in millions
March 31,Transition date
April 1, 2019
2020
2021

Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,119,740
347,5023,703,848
593,716

3,467,503
693,300

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

3,467,242

4,297,564

4,160,803

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,
2020
2021

Net income
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

195,569
114,678

190,998
160,031

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

310,247

351,029

Other comprehensive income, net of tax
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

42,904(15,589)

50,14338,501

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

27,31588,644Comprehensive income
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

238,473
99,089241,141
198,532

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

337,562439,673

F-37

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
13. Property, plant and equipment
The changes in cost and accumulated depreciation and impairment losses are as follows:(Cost)
Yen in millions

Land

Buildings

Vehicles andMachinery and equipment on Construction inequipment
operating leases
progress

Transition date Balance as ofApril 1, 2019 . . . . . . . . . . . . . . . . 1,359,271 4,833,278 11,956,773
Additions . . . . . . . . . . . . . . . .
Sales or disposal . . . . . . . . . . .
Reclassification fromconstruction in progress . . .
Foreign currency translation
adjustments . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . .

Total

6,139,163

656,067

24,944,551
3,426,765(2,801,827)

45,791(9,805)80,490(41,613)379,749 2,188,621(514,608) (2,232,596)

732,114(3,204)

10,510112,228

665,96897(788,803)—(12,252) (80,920)(74,551) (162,012)(303,095)(205,338)(167,022)570(21,350)(57,363)(584,639)(498,694)

Balance as of March 31, 2020 . . . . 1,318,964 4,741,451 11,979,449

5,928,833

517,460

24,486,156
3,448,655(2,689,893)

Additions . . . . . . . . . . . . . . . .
Sales or disposal . . . . . . . . . . .
Reclassification fromconstruction in progress . . .
Foreign currency translation
adjustments . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . .

22,720(13,005)

90,363(36,586)

414,934 2,281,434(472,197) (2,163,259)

639,205(4,846)

6,890

101,216

485,705537(594,347)—

13,448(3,979)57,95244,811

262,808
83,252

180,976(24,799)

20,493
97,910535,677
197,195

Balance as of March 31, 2021 . . . . 1,345,037 4,999,206 12,753,951

6,203,721

675,875

25,977,791

F-38

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(Accumulated depreciation and impairment losses)
Yen in millions

Land

Transition date Balance as ofApril 1, 2019 . . . . . . . . . . . . . . . .
Depreciation . . . . . . . . . . . . . . .
Impairment losses . . . . . . . . . .
Sales or disposal . . . . . . . . . . . .
Foreign currency translation
adjustments . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . .
Balance as of March 31, 2020 . . . . .
Depreciation . . . . . . . . . . . . . . .
Impairment losses . . . . . . . . . .
Sales or disposal . . . . . . . . . . . .
Foreign currency translation
adjustments . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . .
Balance as of March 31, 2021 . . . . .

Buildings

Vehicles andMachinery and equipment on Construction inequipment
operating leases
progress(4,274)(3,097,623) (9,715,155) (1,442,093)

Total(1,301)(14,260,446)—(120,075)(2,446)(4,023)
1,467
31,119(633,167)(8,319)465,994(774,846)—
736,055—(19)—(1,528,087)(14,807)1,234,635

138
1,057

212,323
172,42935,94058,48760
81

290,177
326,388(4,058)(3,054,551) (9,505,895) (1,386,459)(1,178)(13,952,141)

41,716
94,335——
12(118,975)—
24,717(673,612)—
443,307(770,354)—
748,189—(70)—(1,562,940)(70)
1,216,226

(240)
(211)

(34,630)(6,299)(204,607)(64,468)(39,880)
81,587(50)
1,085(279,408)
11,695(4,497)(3,189,737) (10,005,275) (1,366,916)(213)(14,566,638)

Depreciation on “Property, plant and equipment” was 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,Transition date
April 1, 2019
2020
2021

Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,124,664
14,4995,911,838
16,994

Less - Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,139,163(1,442,093)

5,928,833 6,203,721(1,386,459) (1,366,916)

Vehicles and equipment on operating leases, net . . . . . . . . . . . . . .

4,697,070

4,542,374

F-39

6,190,558
13,164

4,836,805

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Future expenses from vehicles and equipment on operating leases are due in installments and rental income
separated as follows:
Yen in millions
March 31,Transition date
April 1, 2019
2020
2021

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

805,907537,742
245,145
50,834
9,860
1,983

802,112531,094
241,459
59,416
13,4576,196

857,997583,059
282,477
55,83818,873
5,706

Total future rentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,651,471

1,653,733

1,803,950

The future rental income as shown above should not be considered indicative of future cash collections.
14. Right of use assets and lease liabilities
The breakdown of right of use assets is as follows:
Yen in millions
March 31,Transition date
April 1, 2019
2020
2021

Types of original assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26,583337,863
32,38438,658253,31245,36646,868285,60257,674

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

396,830

337,335

390,144

The increase in the right of use assets for the years ended on March 31, 2020 and 2021 were¥152,870 million and ¥114,394 million, respectively.
The breakdown of main gains and losses on lessee’s leases:
Yen in millions
March 31,
2020
2021

Depreciation of right of use assets
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,13767,321
16,875

7,277
45,852
22,307

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

92,33375,436

Interest expense on lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,187
44,627

4,118
84,821

140,147

164,375

F-40

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the years ended March 31, 2020 and 2021, the total cash outflows for lessee leases were¥130,830 million and ¥133,698 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,Transition date
April 1, 2019
2020
2021

Within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 1 and 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Later than 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

89,976
162,802167,316

48,255
117,223
181,81252,983130,917219,857

Future lease payment, total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

420,095(26,414)347,291(38,245)

403,757(42,866)

Present value of lease payment, total . . . . . . . . . . . . . . . . . . . . .

393,680

309,045

360,891

Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

87,282306,398

43,166
265,879

47,120313,771

Present value of lease payment, total . . . . . . . . . . . . . . . . . . . . .

393,680

309,045

360,891

15. Intangible assets
The carrying value of intangible assets is as follows:
Yen in millions
March 31,Transition date
April 1, 2019
2020
2021

Capitalized development costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Software and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

611,122297,615

625,473374,784

631,176
477,458

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

908,737

1,000,257

1,108,634

F-41

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The changes in cost, accumulated amortization and impairment losses of intangible assets are as follows:(Cost)
Yen in millions
Capitalized
development costs

Software and other

Total

Transition date Balance as of April 1, 2019 . . . . . . . . . . . . . . . .

980,692

525,105

1,505,797

Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Internally developed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales or disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—164,127(153,144)——

116,450
36,436(66,995)(24,306)
14,025

116,450
200,563(220,139)(24,306)
14,025

Balance as of March 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . .

991,675

600,716

1,592,391

Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Internally developed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales or disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—158,246(45,779)——

62,42359,061(57,047)
6,305
56,41662,423
217,307(102,825)
6,305
56,416

Balance as of March 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . .

1,104,142

727,874

1,832,016(Accumulated amortization and impairment losses)
Yen in millions
Capitalized
development costs

Software and other

Total

Transition date Balance as of April 1, 2019 . . . . . . . . . . . . . . . . .

(369,570)(227,490)(597,060)

Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales or disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(149,776)—
153,144——(67,260)—
66,9442,513(639)(217,036)—
220,088
2,513
(639)

Balance as of March 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . .

(366,202)(225,932)(592,134)

Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales or disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(152,542)—
45,779——(81,350)—
55,354(2,818)4,330(233,892)—
101,132(2,818)
4,330

Balance as of March 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . .

(472,966)(250,417)(723,382)

Amortization of intangible assets was 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)
16. Income taxes(1) Deferred tax assets and liabilities
Significant components of deferred tax assets and liabilities are as follows:
Yen in millions
March 31,Transition date
April 1, 2019
2020
2021

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

248,226
642,680
120,934
334,797
66,044
246,633
413,920

261,078
609,166
123,218
19,21971,142
263,243
370,252

172,237
623,247
127,339
14,26382,467
224,933
400,000

Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,073,234

1,717,318

1,644,486

Deferred tax liabilities
Changes in fair value of financial instruments measured in othercomprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Undistributed earnings of foreign subsidiaries . . . . . . . . . . . . . . . .
Undistributed earnings of associates and joint ventures . . . . . . . . .
Basis difference of acquired assets . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized development costs . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(506,454)(25,972)(871,627)(29,116)(188,837)(946,128)(286,009)(428,541)(24,683)(917,544)(29,756)(193,271)(746,443)(248,719)(661,221)(18,539)(902,680)(48,371)(195,033)(533,167)(196,470)

Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2,854,142)

Net deferred tax assets and liabilities . . . . . . . . . . . . . . . . . . .

(780,909)

F-43(2,588,957) (2,555,481)(871,641)(910,996)

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Of the changes in deferred tax assets and deferred tax liabilities for the year ended March 31, 2020 and
2021, 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,
2020
2021

Defined benefit plan liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16,927
12,473
Accrued expenses and liabilities for quality assurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(18,676) (18,256)
Other accrued employees’ compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,557
3,125
Operating loss carryforwards for tax purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (295,656)
1,265
Allowance for doubtful accounts and credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19,293
6,042
Property, plant and equipment and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(76,680)
4,468
Undistributed earnings of foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,290
6,144
Undistributed earnings of associates and joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(33,008) 47,840
Basis difference of acquired assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(10,033) (18,302)
Capitalized development costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4,434)(1,762)
Lease transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286,869 209,972
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(83,216) 23,104
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(192,767) 276,113

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,Transition date
April 1, 2019
2020
2021

Deductible temporary difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Carryforwards of tax losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Carryforwards of tax credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

277,454
141,7118,194

223,708
184,851
25,963

250,670
379,566
34,800Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

427,359434,521665,037

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,Transition date
April 1, 2019
2020
2021

Within 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 5 and 10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Later than 10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,773
1,619
129,318

22,272
8,636
153,944

13,597
20,475345,493

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

141,711

184,851

379,566

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,Transition date
April 1, 2019
2020
2021

Within 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Between 5 and 10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Later than 10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,643
4,630
921

4,162
464
21,337

5,097
2,340
27,363

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

8,194

25,96334,800Of 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 April 1, 2019, March 31, 2020 and 2021, the temporary differences
totaled ¥3,544,897 million, ¥3,873,059 million and ¥4,362,133 million, respectively, and Toyota estimates anadditional deferred tax liability of ¥158,332 million, ¥169,051 million and ¥202,533 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 year ended Mach 31, 2020 and 2021 consists of the followings:
Yen in millions
For the years ended March 31,
2020
2021

Current income tax expense:
TMC and domestic subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

484,667
4,383

403,230
522,859

Total current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

489,050926,089

Deferred income tax expense (benefit):
TMC and domestic subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

95,27097,498(23,792)(252,321)

Total deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

192,767(276,113)

Total income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

681,817649,976

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, 2020 and 2021. 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,
2020
2021

Statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (reduction) in taxes resulting from:
Non-deductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax-exempt income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities on undistributed earnings of foreign subsidiaries . . . . .
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 of foreignsubsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrecognized tax benefits adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30.9%

30.9%

0.4
(0.5)
0.9
(3.4)

0.5
(0.4)
0.6
(3.7)

2.1
0.9
(4.5)

(0.2)
0.7
(3.2)

(2.4)
(0.4)
0.3

(3.5)
(0.2)
0.6

Average effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24.4%

22.2%

17. Trade accounts and other payables
Trade accounts and other payables consists of the following:
Yen in millions
March 31,Transition date
April 1, 2019
2020
2021

Accounts and notes payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,674,520
1,181,613

2,354,425
1,143,605

2,953,716
1,092,223

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

3,856,133

3,498,029

4,045,939

Trade accounts and other payables are classified as financial liabilities measured at amortized cost.

F-46

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
18. Financial liabilities(1) Financial liabilities
Financial liabilities consist of the following:
Yen in millions
Non-cash changes
Changesin foreign
currency
Transition dateexchange
Changes
April 1, 2019 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 . . . . . . . . . . .

Other

As of
March 31, 2020

5,366,876

279,033——(217,633)—(132,828)

5,295,448

4,247,655(4,421,058)—

4,749,465

28,316—(36,238)

4,568,140

87,282(35,855)—

30,508(354)—(38,415)

43,166
9,906,755

Current liabilities . . . . . . .

9,701,813(4,177,880)—

4,779,973(189,672)—(207,481)

Non-current liabilities
Long-term debt . . . . . . . . . . . .
Long-term lease liabilities . . . .
Class share . . . . . . . . . . . . . . . .

10,538,007
306,398
497,910

5,690,569———
152,870—(4,749,465)(30,508)—(724,879)(1,778)————(84,631) 10,669,599(161,103)
265,879830
498,740

Non-current liabilities . . .

11,342,315

5,690,569

152,870(4,779,973)(726,657)—(244,905) 11,434,219

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

21,044,128

1,512,689

152,870—(916,328)—(452,385) 21,340,973

Derivatives . . . . . . . . . . . . . . . . . . . .

95,895(19,567)——(3,627)110,025—

182,726

Yen in millions
Non-cash changes

As ofApril 1, 2020

Current liabilities
Short-term debt . . . . . . . . . . . .
Current portion of long-term
debt . . . . . . . . . . . . . . . . . . . .
Current portion of long-termlease liabilities . . . . . . . . . . .
Class share . . . . . . . . . . . . . . . .

Changesin foreign
currency
exchange
ChangesCash flow Acquisitions Reclassification
rates
in fair value

Other

As of
March 31, 2021

5,295,448(1,038,438)——

220,056—(137,175)

4,339,890

4,568,140(5,371,616)—

8,421,718——(33,905)

7,584,337

43,166—(44,760)———

30,299240,712

991
—

—
—

17,424—

47,120240,712Current liabilities . . . . . . .

9,906,755(6,454,814)—

8,692,730

221,047—(153,657) 12,212,060

Non-current liabilities
Long-term debt . . . . . . . . . . . .
Long-term lease liabilities . . . .
Class share . . . . . . . . . . . . . . . .

10,669,599
265,879
498,740

9,914,667——
114,394(258,451)—(8,421,718)(30,299)(240,712)

963,179
4,266
—

—
—
—

8,076 13,133,804(40,468)
313,771424—

Non-current liabilities . . .

11,434,219

9,656,216

114,394(8,692,730)

967,445—(31,968) 13,447,575

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

21,340,973

3,201,402

114,394—

1,188,491—(185,625) 25,659,635

Derivatives . . . . . . . . . . . . . . . . . . . .

182,726(44,563)——

55(135,007)—

Short-term and long-term debt is classified as financial liabilities measured at amortized cost.

F-47

3,211

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,Transition date
April 1, 2019
2020
2021

Short-term debt
(Principally from bank)[Weighted average interest rate
2019
2.11%
2020
2.01%
2021
1.37%] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial paper[Weighted average interest rate
2019
2.28%
2020
1.50%
2021
0.16%] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,490,332

1,188,652

1,109,904

3,876,544

4,106,796

3,229,986

5,366,876

5,295,448

4,339,890(3) Long-term debt
The breakdown of “Long-term debt” is as follows:
Yen in millions
March 31,Transition date
April 1, 2019
2020
2021

Unsecured loans(Principally from bank)[2019
Weighted average interest 2.78%
Due 2019 to 2041
2020
Weighted average interest 2.36%
Due 2020 to 2041
2021
Weighted average interest 1.40%
Due 2021 to 2042] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Secured loans(Principally financial receivables securitization)[2019
Weighted average interest 2.47%
Due 2019 to 2026
2020
Weighted average interest 1.98%
Due 2020 to 2034
2021
Weighted average interest 1.25%
Due 2021 to 2034] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-48

3,440,815

3,713,230

5,582,426

1,840,204

1,983,976

3,233,353

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions
March 31,Transition date
April 1, 2019
2020
2021

Medium-term notes of consolidated subsidiaries[2019
Weighted average interest 2.46%
Due 2019 to 2048
2020
Weighted average interest 2.05%
Due 2020 to 2048
2021
Weighted average interest 1.56%
Due 2021 to 2048] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unsecured bonds of the parents[2019
Weighted average interest 1.84%
Due 2019 to 2037
2020
Weighted average interest 1.85%
Due 2020 to 2037
2021
Weighted average interest 1.40%
Due 2021 to 2037] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unsecured bonds of consolidated subsidiaries[2019
Weighted average interest 2.12%
Due 2019 to 2031
2020
Weighted average interest 1.69%
Due 2020 to 2031
2021
Weighted average interest 1.57%
Due 2021 to 2028] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Secured bonds of consolidated subsidiaries[2019
Weighted average interest 7.78%
Due 2019 to 2022
2020
Weighted average interest 7.52%
Due 2020 to 2023
2021
Weighted average interest 6.34%
Due 2022 to 2024] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less - Current portion due within one year . . . . . . . . . . . . . . . . . . . . . .

7,372,550

7,442,590

9,209,453

511,980

650,905

1,161,938

1,566,994

1,412,412

1,495,976

53,12034,62634,996

14,785,662(4,247,655)

15,237,740 20,718,142(4,568,140) (7,584,337)

10,538,007

10,669,599

13,133,804

As of April 1, 2019, March 31, 2020 and 2021, the currencies of long-term debt are 48%, 48% and 49% in
US dollars, 11%, 11% and 16% in Japanese yen, 11%, 13% and 12% in Euros, 9%, 7% and 6% in the Australian
dollar, 5%, 4% and 3% in Canadian dollar, 16%, 17% and 14% in the other currencies.
F-49

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(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,Transition date
April 1, 2019
2020
2021

Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

641,465
1,936,680

644,368
2,010,548

754,132
3,278,448

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

2,578,145

2,654,916

4,032,580

Other assets principally consist of securitized finance receivables.
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, 2020 and 2021 are ¥524,309 million and¥471,505 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.
F-50

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(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.

19. Other financial liabilities
Other financial liabilities consist of the following:
Yen in millions
March 31,Transition date
April 1, 2019
2020
2021

Financial liabilities measured at amortized cost
Deposits received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial liabilities measured at fair value through profit or loss
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

388,375
44,969345,504
116,454440,275
221,052

231,915437,369

425,980

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

665,259

899,328

1,087,307

Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

475,302
189,957

538,740
360,588763,875
323,432

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

665,259

899,328

1,087,307

20. 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.
F-51

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(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.
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 the consolidated financial
statements, are the maximum exposure to the credit risk of Toyota’s financial assets that do not take into account thevalue 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 is measured.
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, 2020
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

43,91826,211—(10,052)

52,55335,488—(21,229)

24,77057,861(80,559)
30,807

121,242
119,561(80,559)(473)

Allowance for credit loss at end of year . . . . . . . . . . . . . .

60,07866,81332,879159,770

Yen in millions
For the year ended March 31, 2021
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

60,07828,378—(9,053)

66,81334,992—(23,380)

32,87946,232(50,485)
11,750159,770
109,602(50,485)(20,683)

Allowance for credit loss at end of year . . . . . . . . . . . . . . .

79,40278,42640,376198,204“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
Transition date April 1, 2019
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 . . . . . . . . . . . . . . .

11,860,985
70,959—698,245
103,789
366

—
1,514
37,487

12,559,230
176,262
37,853

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

11,931,944

802,400

39,001

12,773,344

Expected credit
loss for12 months

Yen in millions
March 31, 2020
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 . . . . . . . . . . . . . . .

11,431,156
265,152—

680,608
346,748894—
30,26547,24912,111,764
642,165
48,143

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

11,696,308

1,028,250

77,514

12,802,072

Expected credit
loss for12 months

Yen in millions
March 31, 2021
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 . . . . . . . . . . . . . . .

13,638,143
213,860—

824,508
273,282
1,381—
17,527
79,731

14,462,651
504,670
81,112

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

13,852,004

1,099,171

97,25815,048,433

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,
2020
2021

Allowance for credit loss at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for credit loss, net of reversal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26,4839,716(3,267)(2,033)30,8998,663(3,310)(2,798)

Allowance for credit loss at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30,89933,455

F-53

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)“Other” primarily includes reversal of allowance for credit loss due to the collection of finance leasereceivables.
The table below shows the finance lease receivables segregated into aging categories based on the numbersof the days outstanding:
Yen in millions
March 31,Transition date
April 1, 2019
2020
2021

Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Past due less than 90 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Past due 90 days or more . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,625,893
6,368
4,275

1,641,292
44,374
5,752

1,945,198
50,99235,089Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,636,536

1,691,418

2,031,280

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, 2020
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,927
15,815—(5,187)

10,4237,220—(4,009)

3,542
654
(105)
(102)

30,893
23,689(105)(9,299)Allowance for credit loss at end of year . . . . . . . . . . .

27,556

13,634

3,989

45,179

Yen in millions
For the year ended March 31, 2021
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27,556
2,293—(12,382)

13,634
1,975—(8,368)

3,989
1,593
(209)
(437)

45,1795,861(209)(21,188)

Allowance for credit loss at end of year . . . . . . . . . . .

17,467

7,241

4,935

29,642“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, 2020 and 2021.
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 April 1, 2019, March 31, 2020 and 2021 are as
follows.
The wholesale and other dealer loan receivables portfolio segment is segregated into following credit
qualities 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
Transition date
April 1, 2019
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 . . . . . . . . . . . . . . . . . .

3,099,802
154,093——
7,926,313
3,047,162—
93,105
112,632—
308,052
31,792——
1,671
28,454——

3,099,802
247,198
114,303
28,454
8,234,366
3,078,955

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

14,227,370

545,583

30,12514,803,078

Expected credit
loss for12 months

Yen in millions
March 31, 2020
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 . . . . . . . . . . . . . . . . . .

3,102,214
138,498——
8,905,778
3,167,831—
100,008
102,074—
274,21437,617——2,888
33,931515—

3,102,214
238,507
104,962
33,931
9,180,507
3,205,448

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

15,314,321

513,91337,334

15,865,569

F-55

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Expected credit
loss for12 months

Yen in millions
March 31, 2021
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 . . . . . . . . . . . . . . . . . .

2,956,452
82,046——
9,917,155
3,574,943—
78,50948,354—96,266
31,465——
2,388
17,736412—

2,956,452
160,554
50,742
17,736
10,013,832
3,606,408

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

16,530,596

254,594

20,535

16,805,725

For the year ended March 31, 2020 and 2021, 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.

F-56

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The amounts of non-derivative financial liabilities and derivative financial liabilities by a remaining contract
maturity period are as follows:
As of April 1, 2019
Yen in millions

Book value

Contractual
cash flows

Maturities
Between 1 and Between 3 andWithin 1 year
3 years
5 years

Later than
5 years

Non-derivative financial
liabilities
Short-term debt . . . . . . . . . . 1,490,332 (1,522,381) (1,522,381)———
Commercial paper . . . . . . . . 3,876,544 (3,964,956) (3,964,956)———
Current portion of long-term
debt . . . . . . . . . . . . . . . . . 4,247,655 (4,358,502) (4,358,502)———
Long-term debt . . . . . . . . . . 10,538,007 (10,807,158)—(6,247,464) (3,427,698) (1,131,995)
Lease liabilities . . . . . . . . . .
393,680(420,095)(89,976)(90,442)(72,359) (167,316)
Class share . . . . . . . . . . . . . .
497,910(522,786)(11,186)(511,600)——
Total . . . . . . . . . . . 21,044,128 (21,595,878) (9,947,002) (6,849,506) (3,500,057) (1,299,311)
Derivative financial liabilities
Interest derivative . . . . . . . .
Currency derivative
In . . . . . . . . . . . . . . . . .
Out . . . . . . . . . . . . . . . .

93,177(64,902)(7,077)(53,859)(28,028)

24,061—
138,738

1,047,147(1,246,694)

67,344(102,360)

469,407(554,602)

432,293(496,390)

78,102(93,342)

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

231,915(264,449)(42,093)(139,054)(92,125)

8,822

Total . . . . . . . 21,276,043 (21,860,327) (9,989,095) (6,988,560) (3,592,182) (1,290,488)

F-57

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As of March 31, 2020
Yen in millions

Book value

Contractual
cash flows

Maturities
Between 1 and Between 3 andWithin 1 year
3 years
5 years

Later than
5 years

Non-derivative financial
liabilities
Short-term debt . . . . . . . . . . 1,188,652 (1,212,128) (1,212,128)———
Commercial paper . . . . . . . 4,106,796 (4,137,362) (4,137,362)———
Current portion of longterm debt . . . . . . . . . . . . . 4,568,140 (4,779,439) (4,779,439)———
Long-term debt . . . . . . . . . . 10,669,599 (11,248,721)— (7,052,355) (2,895,474) (1,300,892)
Lease liabilities . . . . . . . . . .
309,045(347,291)(48,255)(68,680)(48,543) (181,812)
Class share . . . . . . . . . . . . .
498,740(511,599)(511,599)———
Total . . . . . . . . . . 21,340,973 (22,236,539) (10,688,782) (7,121,035) (2,944,017) (1,482,705)
Derivative financial liabilities
Interest derivative . . . . . . . .
Currency derivative
In . . . . . . . . . . . . . . . . .
Out . . . . . . . . . . . . . . .
Total . . . . . . . . . .

278,434(312,443)(49,332)(193,700)(60,827)(8,584)—
158,936

1,319,924(1,498,684)

340,651(389,481)

698,151(802,373)

159,022(175,429)

122,100(131,401)

437,369(491,203)(98,162)(297,922)(77,234)(17,885)

Total . . . . . . 21,778,342 (22,727,742) (10,786,944) (7,418,957) (3,021,251) (1,500,590)
As of March 31, 2021
Yen in millions

Book value

Contractual
cash flows

Maturities
Between 1 and Between 3 andWithin 1 year
3 years
5 years

Later than
5 years

Non-derivative financial
liabilities
Short-term debt . . . . . . . . . . 1,109,904 (1,119,748) (1,119,748)———
Commercial paper . . . . . . . 3,229,986 (3,233,528) (3,233,528)———
Current portion of longterm debt . . . . . . . . . . . . . 7,584,337 (7,781,816) (7,781,816)———
Long-term debt . . . . . . . . . . 13,133,804 (13,615,831)— (8,135,588) (3,871,044) (1,609,200)
Lease liabilities . . . . . . . . . .
360,891(403,757)(52,983)(78,623)(52,294) (219,857)
Class share . . . . . . . . . . . . .
240,712(243,650)(243,650)———
Total . . . . . . . . . . 25,659,635 (26,398,330) (12,431,725) (8,214,211) (3,923,338) (1,829,057)
Derivative financial liabilities
Interest derivative . . . . . . . .
Currency derivative . . . . . .
In . . . . . . . . . . . . . . . . .
Out . . . . . . . . . . . . . . .
Total . . . . . . . . . .

288,853(291,818)(75,477)(147,811)(45,699)(22,832)—
137,127

453,701(593,702)

228,651(353,986)

151,430(163,366)

49,701(51,643)

23,919(24,707)425,980(431,820)(200,812)(159,747)(47,640)(23,620)

Total . . . . . . 26,085,615 (26,830,150) (12,632,537) (8,373,958) (3,970,978) (1,852,677)
F-58

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Toyota has unused short-term lines of credit amounting to ¥1,892,166 million, ¥1,861,792 million and¥1,836,532 million of which ¥274,058 million, ¥374,273 million and ¥550,408 million related to commercial
paper programs as of April 1, 2019, March 31, 2020 and 2021, respectively. Under these programs, Toyota isauthorized to obtain short-term financing at prevailing interest rates for periods not in excess of 360 days.
As of April 1, 2019, March 31, 2020 and 2021, Toyota has unused long-term lines of credit amounting to¥6,457,394 million, ¥5,345,718 million, and ¥6,446,277 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.
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, 2020 and 2021 is as follows:

For the year ended March 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
For the year ended March 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year-end

Yen in millions
VaR
Average
Maximum

Minimum

202,400
196,900

216,200
187,725

202,400
178,400

227,700
196,900

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,
2020
2021

Impact on income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact on other comprehensive income, before tax effect . . . . . . . . . . . . . . . . . . . . .
F-59(74,358)(233,820)(40,536)(238,986)

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(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,
2020 and 2021 is ¥189,518 million and ¥262,396 million, respectively.
21. 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.
(2) Fair value and gain and losses of derivatives
The fair values of the derivatives as of April 1, 2019, March 31, 2020 and 2021 are as follows:
Yen in millions
March 31,Transition date
April 1, 2019
2020
2021

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 . . . . . . . . . . . . . . . . . . . . . . . . . . .

74,971

105,724

37,852

114,642

372,786

236,023

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

189,613478,510

273,876

Foreign exchange forward and option contracts
Current assets- Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current assets- Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,72025,316

8,488

—

—

—

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

10,72025,316

8,488

Total derivative assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

200,333

503,826

282,364

F-60

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Yen in millions
March 31,Transition date
April 1, 2019
2020
2021

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 . . . . . . . . . . . . . . . . . . . . . . .

(28,911)(76,568)(189,157)(343,557) (226,434)

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

(218,068)(420,125) (316,115)

Foreign exchange forward and option contracts
Current liabilities- Other financial liabilities . . . . . . . . . . . . . . . . . . . . . . .
Non-current liabilities- Other financial liabilities . . . . . . . . . . . . . . . . . . . . . . .

(13,847)(17,245) (109,865)

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

(13,847)(17,245) (109,865)

Total derivative liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(231,915)(437,369) (425,980)——(89,681)—

The amount of underlying notional of derivatives as of April 1, 2019, March 31, 2020 and 2021 are as
follows:
Yen in millions
March 31,Transition date
April 1, 2019
2020
2021

Derivative financial instruments not designated as hedging
instruments:
Interest rate and currency swap . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange forward and option contracts . . . . . . . . . . . . . .

21,001,883
4,005,578

20,310,018
3,916,824

21,453,268
4,884,400

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

25,007,461

24,226,842

26,337,668

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, 2020 and 2021 were ¥13,419 million and ¥588
million, respectively. The amounts are included in cost of financial services and foreign 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.

F-61

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(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 April 1, 2019,
March 31, 2020 and 2021 is ¥4,126 million, ¥6,750 million and ¥35,148 million, respectively. The aggregate fairvalue amount of assets that are already posted as cash collateral as of April 1, 2019, March 31, 2020 and 2021 is¥105,460 million, ¥230,830 million and ¥75,394 million, respectively. If the ratings of Toyota decline below
specified thresholds, the maximum amount of assets to be posted or for which Toyota could be required to settle
the contracts is ¥35,148 million as of March 31, 2021. See note 23 to offsetting financial assets and financial
liabilities.
22. 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(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 values of receivables related to financial services are estimated by discounting expected cash flows
to present value using internal assumptions, including prepayment speeds, expected credit losses and collateralvalue.
F-62

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As unobservable inputs are utilized, the fair value of receivables related to financial services are 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 17% and 83% (as of April 1, 2019), 20% and 80% (as of March 31, 2020)
and 28% and 72% (as of March 31, 2021) of public and corporate bonds, respectively. Toyota uses primarily
quoted market prices for identical assets to measure the fair value of these securities.
(Stocks)
Listed stocks on the Japanese stock markets represent 92% (as of April 1, 2019), 90% (as of March 31,2020) and 89% (as of March 31, 2021) of stocks that Toyota holds. Toyota uses primarily quoted market prices
for identical assets to measure 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 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 and 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.
These estimates are based on valuation methods that are considered appropriate in each case. The significant
assumptions involved in the estimations include observable market information as well as the financial condition
and future prospects and trends of the investee and the outcome of the referenced transactions. Due to theuncertain nature of these assumptions or by using 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 is 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.
F-63

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(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, are estimated based on the discounted
amounts of future cash flows using Toyota’s current borrowing rates for similar liabilities. As these inputs areobservable, the fair value of these debts are classified as Level 2.
The fair values of the secured loans entered into in connection with securitization transactions are estimatedbased on current market rates and credit spreads for debt with similar maturities. Internal assumptions including
prepayment speeds and expected credit losses are used to estimate the timing of cash flows to be paid on theunderlying securitized assets. As these valuations utilize unobservable inputs, the fair value of these securedloans are classified as Level 3.
(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 anually at each fiscal year end:

Level 1

Yen in millions
Transition date
April 1, 2019
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19,209——182,470

25,047
15,171—
110,991
200,256
77
103,989—

59,426110,991
200,333
286,459

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

201,678

329,292

657,209

Financial assets measured at fair value through othercomprehensive income
Public and corporate bonds . . . . . . . . . . . . . . . . . . . . . .
Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,359,335
2,155,236
6,920

1,427,428—
469

19,739 5,806,502
177,389 2,332,625—
7,388

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

6,521,490

1,427,897

197,218

8,146,515

Other financial liabilities:
Financial liabilities measured at fair value through profit orloss
Derivative financial instruments . . . . . . . . . . . . . . . . . .

—(231,915)—(231,915)

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

—(231,915)—(231,915)

F-64

126,239

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Level 1

Yen in millions
March 31, 2020
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,676——
188,122

28,203
12,831—
149,905
503,826—
98,060—58,711
149,905
503,826
286,182

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

205,798

630,090998,625

Financial assets measured at fair value through othercomprehensive income
Public and corporate bonds . . . . . . . . . . . . . . . . . . . . . .
Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,197,097
1,895,189
5,964

2,155,491—
27,10420,099 5,372,687
220,547 2,115,736—
33,067

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

5,098,250

2,182,595

240,646

7,521,491

Other financial liabilities:
Financial liabilities measured at fair value through profit orloss
Derivative financial instruments . . . . . . . . . . . . . . . . . .

—(437,369)—(437,369)

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

—(437,369)—(437,369)

162,737

Level 1

Yen in millions
March 31, 2021
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22,926——
366,570

28,2698,406—
317,101
282,364—
123,255—

59,600317,101
282,364
489,824

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

389,495

433,887

325,506

1,148,889

Financial assets measured at fair value through othercomprehensive income
Public and corporate bonds . . . . . . . . . . . . . . . . . . . . . .
Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,075,042
2,623,964
7,986

2,981,239——

19,218321,816—

6,075,498
2,945,780
7,986

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

5,706,991

2,981,239

341,034

9,029,264

Other financial liabilities:
Financial liabilities measured at fair value through profit orloss
Derivative financial instruments . . . . . . . . . . . . . . . . . .

—(425,980)—(425,980)

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

—(425,980)—(425,980)

F-65

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, 2020 and 2021:
Yen in millions
For the year ended March 31, 2020
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 from Level 3 . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

34,910288,38077

323,366

(932)
—
7,284
(8,770)—439(2,507)
13,822
157,643(1,184)(61,008)(24,693)

—
—
—
(77)
—
—

(3,439)13,822
164,927(10,031)(61,008)(24,254)

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . .

32,931

370,452—

403,383

Unrealized gains or losses included in profit or loss
on assets held at March 31 . . . . . . . . . . . . . . . . . . .

(815)(2,507)—(3,322)

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

(815)(2,507)—(3,322)

Yen in millions
For the year ended March 31, 2021
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 from Level 3 . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

32,931

370,452—

403,383980—
316(5,223)(2,760)1,380

162,055
72,01458,578(497)—(23,686)

—
—
—
—
—
—

163,035
72,01458,894(5,720)(2,760)(22,306)

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . .

27,623638,917—666,540

Unrealized gains or losses included in profit or loss
on assets held at March 31 . . . . . . . . . . . . . . . . . . .

983

162,055—

163,038

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

983

162,055—

163,038“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 financial costs”
in the accompanying consolidated statement of income. Transactions related to financial services are included ineach of “Financial services” and “Cost of financial services” in the consolidated statement of income.
In the reconciliation table above, derivative financial instruments are presented as net of assets andliabilities. “Other” includes currency translation adjustments for the year ended March 31, 2020 and 2021.
Transfer from Level 3 recognized in the year ended March 31, 2020 is due to the listing of investees.
F-66

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(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:

Receivables related to financial services . . . . .
Interest-bearing liabilities
Long-term debt (Including current
portion) . . . . . . . . . . . . . . . . . . . . . . . .

Receivables related to financial services . . . . .
Interest-bearing liabilities
Long-term debt (Including current
portion) . . . . . . . . . . . . . . . . . . . . . . . .

Receivables related to financial services . . . . .
Interest-bearing liabilities
Long-term debt (Including current
portion) . . . . . . . . . . . . . . . . . . . . . . . .

Yen in millions
Transition date
April 1, 2019
Fair value
Level 2
Level 3Carrying amount

Level 1

Total

16,938,395——

17,167,354

17,167,354

14,785,662—

12,805,942

1,833,623

14,639,565

Carrying amount

Level 1

Yen in millions
March 31, 2020
Fair value
Level 2
Level 3

17,039,401——

17,235,037

17,235,037

15,237,740—

13,128,224

1,966,646

15,094,870

Carrying amount

Level 1

Yen in millions
March 31, 2021
Fair value
Level 2
Level 3

19,205,715——

19,939,810

19,939,810

20,718,142—

17,749,022

3,244,912

20,993,934

Total

Total

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.

F-67

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
23. 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
Transition date
April 1, 2019
Gross amounts ofrecognizedfinancial assets
and financial
liabilities

Other financial assets Derivatives . . . . . . . . . . . . . . . . . . .
Other financial liabilities Derivatives . . . . . . . . . . . . . . . .

200,333
231,915

Amounts not offset
Collateral of
Financialfinancial
instruments instruments(89,364)(89,364)(46,590)(110,159)

Net amount

64,37932,392

Yen in millions
March 31, 2020
Gross amounts ofrecognizedfinancial assets
and financial
liabilities

Other financial assets Derivatives . . . . . . . . . . . . . . . . . . .
Other financial liabilities Derivatives . . . . . . . . . . . . . . . .

503,826
437,369

Amounts not offset
Collateral of
Financialfinancial
instruments instruments

Net amount(176,541)(176,541)

205,306
25,919(121,979)(234,909)

Yen in millions
March 31, 2021
Gross amounts ofrecognizedfinancial assets
and financial
liabilities

Other financial assets Derivatives . . . . . . . . . . . . . . . . . . .
Other financial liabilities Derivatives . . . . . . . . . . . . . . . .

282,364
425,980

Amounts not offset
Collateral of
Financialfinancial
instruments instruments

Net amount(163,054)(163,054)

56,515173,078(62,795)(89,849)

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.
24. 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.

F-68

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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.
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.

F-69

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(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,
2020
2021
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 . . . . . . . . . . . . . . . . . . . . . .

2,107,986
92,921
10,514

1,186,896
46,86940,3352,058,893
91,07910,9701,207,815
52,33449,914

2,976(15,395)(36,066)(1,090)1,014(48,897)(55,070)

10,997(11,642)(2,220)3,308
2,018(40,200)(28,547)(7,569)13,888(5,835)
1,035
1,397(72,441)(2,155)28,69014,49051,296
3,159
2,093(48,478)
58,5972,058,893

1,207,815

2,089,263

1,419,910

1,606,630
8,400

882,785
33,9291,519,254
8,907

868,90348,729(79,268)
38,303
1,014(15,010)(40,815)(20,508)
29,407
2,018(30,661)(28,067)

286,089
37,4691,397(39,471)(7,380)120,232
31,2272,093(36,217)44,576

Plan assets at end of year . . . . . . . . . . . . . . . . . . .

1,519,254

868,903

1,806,265

1,079,543

Effect of the asset ceiling . . . . . . . . . . . . . . . . . . . . . . .

—

—

—

—

Net defined benefit liability (asset) . . . . . . . . . . . . . . .

539,639

338,912282,999

340,368

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-70

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
Transition date
April 1, 2019Japanese
Foreign
plans
plans

Funded defined benefit
obligations . . . . . . . . . . . . . . . . . .
Plan assets . . . . . . . . . . . . . . . . . . . . .

March 31,2020
2021
Japanese
ForeignJapanese
Foreign
plans
plans
plans
plans

1,587,810 953,639
1,555,715 956,503 1,575,647 1,127,974(1,606,630) (882,785) (1,519,254) (868,903) (1,806,265) (1,079,543)

Subtotal . . . . . . . . . . . . . . . . . . . . . . .

(18,820)70,85436,46187,601(230,618)

48,432

Unfunded defined benefit
obligations . . . . . . . . . . . . . . . . . .

520,176

233,257

503,179

251,311513,616

291,936

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

501,356

304,111539,639

338,912282,999

340,368

The net defined benefit liability (asset) recognized in the consolidated statement of financial position arecomprised of the following:
Yen in millions
Transition date
April 1, 2019Japanese
Foreign
plans
plans

March 31,2020
2021
Japanese
ForeignJapanese
Foreign
plans
plans
plans
plans

Retirement benefit liabilities . . . . . .
Other non-current assets (Retirement
benefit assets) . . . . . . . . . . . . . . . .

693,452

309,258

675,366

346,795

680,021355,075(192,096)(5,147)(135,727)(7,883)(397,023)(14,707)

Net amount recognized . . . . . . .

501,356

304,111539,639

338,912282,999

340,368(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:
Transition date
April 1, 2019Japanese
Foreign
plans
plans

Discount rate . . . . . . . . . . . . . . . . . . .

0.6%

3.8%

March 31,2020
2021
Japanese
ForeignJapanese
Foreign
plans
plans
plans
plans

0.6%

3.5%

0.6%

3.3%

(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
F-71

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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.
The following table summarizes the fair value of classes of plan assets.
Yen in millions
Transition date
April 1, 2019Japanese plans
Quoted prices in active
markets
Available Not available

Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . 531,159
Government bonds . . . . . . . . . . . . . . . .
98,578
Bonds (other) . . . . . . . . . . . . . . . . . . . .
—Commingled funds . . . . . . . . . . . . . . . .
—Insurance contracts . . . . . . . . . . . . . . . .
—Other . . . . . . . . . . . . . . . . . . . . . . . . . . .
84,208
Total . . . . . . . . . . . . . . . . . . . . . . .

713,945

Total

Foreign plans
Quoted prices in active
markets
Available Not Available

Total

—
—
54,652484,934
226,093
127,006

531,159
98,57854,652484,934
226,093
211,214

123,875
141,054———
10,292——
164,877
298,012—
144,675

123,875
141,054
164,877
298,012—
154,967

892,685

1,606,630

275,221607,564

882,785

Yen in millions
March 31, 2020
Japanese plans
Quoted prices in active
markets
Available Not available

Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . 467,885
Government bonds . . . . . . . . . . . . . . . .
86,212
Bonds (other) . . . . . . . . . . . . . . . . . . . .
—Commingled funds . . . . . . . . . . . . . . . .
—Insurance contracts . . . . . . . . . . . . . . . .
—Other . . . . . . . . . . . . . . . . . . . . . . . . . . .
89,986
Total . . . . . . . . . . . . . . . . . . . . . . .

644,083

Total

Foreign plans
Quoted prices in active
markets
Available Not Available

Total

—
—
75,644
420,604
226,043
152,881

467,885
86,21275,644
420,604
226,043
242,867

111,997
181,702———
10,425——
170,650
253,189—
140,939

111,997
181,702
170,650
253,189—
151,364

875,171

1,519,254

304,124564,779

868,903

Yen in millions
March 31, 2021
Japanese plans
Quoted prices in active
markets
Available Not available

Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . 607,727
Government bonds . . . . . . . . . . . . . . . . 110,699
Bonds (other) . . . . . . . . . . . . . . . . . . . .
—Commingled funds . . . . . . . . . . . . . . . .
—Insurance contracts . . . . . . . . . . . . . . . .
—Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 145,801
Total . . . . . . . . . . . . . . . . . . . . . . .

864,227

Total

Foreign plans
Quoted prices in active
markets
Available Not Available

Total

—
—
72,496500,243
216,423
152,876

607,727
110,699
72,496500,243
216,423
298,677

194,927
113,476———
16,182——
203,640
385,663—
165,655

194,927
113,476
203,640
385,663—
181,837

942,038

1,806,265

324,584

754,958

1,079,543

F-72

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)“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
Transition date
April 1, 2019Japanese
Foreign
plans
plans

0.5% decrease . . . . . . . . . . . . . . . . . . . . . . . . .
0.5% increase . . . . . . . . . . . . . . . . . . . . . . . . .

March 31,2020
2021
Japanese
ForeignJapanese
Foreign
plans
plans
plans
plans

181,320 151,579 177,929 109,224 177,741
99,253(158,925) (154,893) (155,770) (91,642) (154,265) (179,276)(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
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, 2022), Toyota expects to contribute ¥39,392 million forJapanese plans and ¥16,604 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,

2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
From 2027 to 2031 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

77,543
81,611
84,23581,46482,566
406,542

50,20652,45754,48055,532
57,408
312,785

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

813,960

582,868(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.
F-73

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(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, 2020 and 2021 are ¥3,403,555 million and ¥3,281,292 million, respectively.
25. 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.
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, 2020 and 2021
consist of the following:
Yen in millions
For the years ended March 31,
2020
2021

Liabilities for quality assurance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . .
Additional provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reversals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,769,514
372,619(482,918)(99,533)(6,712)

1,552,970
345,563(347,806)(77,479)
9,624

Liabilities for quality assurance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,552,970

1,482,872“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, 2020 and 2021.
Yen in millions
For the years ended March 31,
2020
2021

Liabilities for recalls and other safety measures at beginning of year . . . . . . . . . . . .
Additional provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reversals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,302,309
225,373(354,759)(61,099)(7,113)

1,104,711
229,763(228,044)(74,907)
3,458

Liabilities for recalls and other safety measures at end of year . . . . . . . . . . . . . . . . .

1,104,711

1,034,981

F-74

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
26. 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.
The amount of Toyota Motor Corporation shareholder’s equity and short-term and long-term debt are as
follows:
Transition date
April 1, 2019

Toyota Motor Corporation Shareholders’ equity . . . . . . . . . . . . . . .
Short-term and long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19,907,100
21,044,128

Yen in millions
March 31,
2020

2021

20,618,888
21,340,973

23,404,547
25,659,635(2) Number of shares
As of April 1, 2019, March 31, 2020 and 2021, the total number of authorized shares of TMC’s common
stock is 10,000,000,000.
The changes in the number of common stocks issued are as follows:
For the years ended March 31,
2020
2021

Common stock issued:
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase and retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,262,997,492——

3,262,997,492——

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,262,997,492

3,262,997,492

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
(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¥10,276,666 million and ¥11,215,850 million as of March 31, 2020 and 2021, 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-75

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Retained earnings at March 31, 2021 include ¥2,933,901 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, 2020
Repurchase of treasury stock
Reason for repurchasing treasury stock The repurchase was made to return capital to shareholders in addition to promoting capital efficiency andagile capital policy in view of the business environment.
Details of matters relating to repurchase Number of common shares repurchased . . . . . . . . . . . . . . . . . . . . . . . . .
Total purchase price for repurchase of shares . . . . . . . . . . . . . . . . . . . . .

69,532,900 shares¥500,139 million

Reissuance of treasury stock
Reason for reissuing treasury stock On May 9, 2019, TMC resolved to conclude contracts aimed toward the establishment of a new joint
venture, Prime Life Technologies, related to a town development business with Panasonic. Pursuant to thesecontracts, TMC, THC and Misawa Homes conducted a share exchange in which common shares of Toyota wereallotted in exchange for common shares of Misawa Homes so that THC, a consolidated subsidiary of TMC, will
become the wholly owning parent company resulting from the share exchange and Misawa Homes, aconsolidated subsidiary of THC, will become the wholly owned subsidiary resulting from the share exchange.
Details of matters relating to reissuance Number of common shares reissued . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amount of reissuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,269,500 shares¥24,181 million

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.
F-76

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Details of matters relating to reissuance Number of common shares reissued . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amount of reissuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29,730,900 shares¥199,999 million(5) Other components of equity
Other components of equity are as follows:
Yen in millions
Net changes inrevaluation offinancial assets
measured at fairvalue through othercomprehensive
incomeRemeasurements ofdefined benefit
plans

Exchangedifferences ontranslating foreign
operations

Total

Balance at April 1, 2019 . . . . . . . . . . . . . . .
Other comprehensive income, net oftax . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to retained
earnings . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income for theperiod attributable tonon-controlling interests . . . . . . . . .

1,016,035——

1,016,035(58,946)(54,176)(395,523)(508,645)(4,935)55,580—50,644

1,916(1,404)27,002

27,514

Balance at March 31, 2020 . . . . . . . . . . . . .
Other comprehensive income, net oftax . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to retained
earnings . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income for theperiod attributable tonon-controlling interests . . . . . . . . .

954,070—(368,520)

585,549

380,814

221,409410,253

1,012,476(31,321)(219,047)—(250,369)(8,211)(2,362)(29,357)(39,930)

Balance at March 31, 2021 . . . . . . . . . . . . .

1,295,351—

12,375

1,307,726

F-77

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
For the year ended
March 31, 2020
March 31, 2021
BeforeTax
After
Before
Tax
After
tax
effecttax
tax
effecttax

Items that will not be reclassified to profit(loss)Net changes in revaluation of financial
assets measured at fair value throughother comprehensive income
Amount incurred during the year . . . (353,261) 109,409 (243,853)

560,225 (172,798)

387,427

Net changes . . . . . . . . . . . . . . . . . . . (353,261) 109,409 (243,853)

560,225 (172,798)

387,427

Remeasurements of defined benefit plans
Amount incurred during the year . . .

(48,426)

5,026(43,399)

311,360(95,087)

216,272

Net changes . . . . . . . . . . . . . . . . . . .

(48,426)

5,026(43,399)

311,360(95,087)

216,272

Shares of other comprehensive income ofequity method investees
Amount incurred during the year . . .

62,568—62,56880,472—80,472

Net changes . . . . . . . . . . . . . . . . . . .

62,568—62,56880,472—80,472Items that may be reclassified subsequently to
profit (loss)
Exchange differences on translating
foreign operations
Amount incurred during the year . . . (390,427)
Reclassification to profit (loss) . . . .
28,329——(390,427)
28,329403,636———

403,636—

Net changes . . . . . . . . . . . . . . . . . . . (362,098)— (362,098) 403,636
Net changes in revaluation of financial
assets measured at fair value throughother comprehensive income
Amount incurred during the year . . . 141,795 (43,367) 98,427 (119,441)
Reclassification to profit (loss) . . . .
20,380 (5,417) 14,963——

403,636

35,938—(83,503)—(119,441)

35,938(83,503)

8,172
—
8,172

—
—
—

8,172
—
8,172

Net changes . . . . . . . . . . . . . . . . . . .
Shares of other comprehensive income ofequity method investees
Amount incurred during the year . . .
Reclassification to profit (loss) . . . .
Net changes . . . . . . . . . . . . . . . . . . .

162,174 (48,784) 113,390(35,253)—(35,253)———(35,253)—(35,253)

Total other comprehensive income . . . . . . . . . (574,296) 65,651 (508,645) 1,244,424 (231,947) 1,012,476

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, 2020

Resolution

Type of shares

Total amount ofdividends
Dividend per share(yen in millions)(yen)

The Board of
Directors Meetingon May 8,
2019 . . . . . . . . . . . Common shares

339,893120.00

The Board of
Directors Meetingon November 7,
2019 . . . . . . . . . . . Common shares

278,908

100.00Record date

March 31, 2019

Effective date

May 24, 2019

September 30, 2019 November 27, 2019

For the year ended March 31, 2021

Resolution

Type of shares

Total amount ofdividends
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

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, 2021

Resolution

Type of shares

The Board of
Directors Meetingon May 12,2021 . . . . . . . . . . . Common shares

Total amount ofdividends
Dividend per share(yen in millions)(yen)

377,453135.00F-79

Record date

March 31, 2021

Effective date

May 28, 2021

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
27. Sales revenues(1) Summary by business segments and products
The table below shows Toyota’s sales revenues from external customers by business and by product category.
Yen in millions
For the years ended March 31,
2020
2021

Sales of products
Automotive
Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Parts and components for production . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Parts and components for after service . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22,647,701
1,197,089
2,170,448
755,141

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

Total automotive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26,770,379
923,314

24,597,846
479,553

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

27,693,693
2,172,854

25,077,398
2,137,195

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

29,866,547

27,214,594

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,
2020
2021

Finance leases
Financial income related to net lease investment . . . . . . . . . . . . . . . . . . . . . . . .
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

98,865
1,051,822

106,724
1,017,707

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

1,150,688

1,124,431

Financial service revenues other than income from leases mainly consist of interest income using theeffective interest method. The amount of interest income using the effective interest method is not significant.
For the years ended March 31, 2020 and 2021, ¥127,113 million and ¥125,748 million of financial service
revenues were accounted for under IFRS 15.
(2) Contract liabilities
Contract liabilities consist of the following:
Yen in millions
March 31,Transition date
April 1, 2019
2020
2021

Contract liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-80

695,235

700,229854,679

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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, 2020 and 2021, the amounts transferred from contract liabilities
at the beginning of the fiscal year to operating income were ¥372,786 million and ¥370,278 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 ¥553,218 million, ¥587,547 millionand ¥618,668 million as of April 1, 2019, March 31, 2020 and 2021, 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 3 to 120 months. As of
April 1, 2019, the unsatisfied performance obligations related to insurance revenues were ¥212,384 million, andToyota expected to recognize as revenue ¥63,611 million in fiscal 2020, and ¥148,773 million thereafter. As of
March 31, 2020, the unsatisfied performance obligations related to insurance revenues were ¥223,754 million,
and Toyota expected to recognize as revenue ¥65,262 million in fiscal 2021, and ¥158,493 million thereafter. As
of March 31, 2021, the unsatisfied performance obligations related to insurance revenues were ¥237,805 million,
and Toyota expects to recognize as revenue ¥67,537 million in fiscal 2022, and ¥170,268 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.
28. Research and development cost
Research and development costs consist of the following:
Yen in millions
For the years ended March 31,
2020
2021

Research and development expenditures incurred during the year . . . . . . . . . . . . . . .
Amount capitalized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of capitalized development costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,110,369(164,127)
149,776

1,090,424(158,246)
152,542

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

1,096,019

1,084,721

F-81

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
29. Other finance income and costs
Other finance income and costs consist of the following:
Yen in millions
For the years ended March 31,
2020
2021

Other finance income
Interest income
Financial assets measured at amortized cost . . . . . . . . . . . . . . . . . . . . . . . .
Financial assets measured at fair value through other comprehensive
income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividend income
Financial assets measured at fair value through other comprehensive
income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other finance costs
Interest expense
Financial liabilities measured at amortized cost . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

37,201

17,526

84,62988,074110,243
73,772305,846

88,837240,791435,229(44,114)(3,041)(47,155)(42,421)(5,116)(47,537)

The increase in “Other finance income–Other” was due mainly to an increase during fiscal 2021 in profit on
securities revaluation.

F-82

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
30. 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, 2020
Net income attributable to Toyota Motor
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 . . . . . . . . . . . . . . . . . . . . . . . .

2,036,140

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 . . . . . . . . . . . . . . . . . .
Diluted earnings per share attributable to Toyota
Motor Corporation . . . . . . . . . . . . . . . . . . . . . . . .

2,036,140

2,798,918

727.47

13,265

47,1002,049,405

2,846,018

720.102,245,261

2,795,288

803.23

12,56945,9392,257,830

2,841,227

2,245,261

794.67

In addition to the disclosure requirements under IFRS, Toyota discloses the information below in order toprovide financial statements users with valuable information.
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

19,907,100
20,618,888
23,404,547

2,832,439
2,766,153
2,795,949

7,028.25
7,454.00
8,370.88

Yen in millions

As of April 1, 2019 . . . . . . . . . . . . . . . . . . . . . . . . .
As of March 31, 2020 . . . . . . . . . . . . . . . . . . . . . . .
As of March 31, 2021 . . . . . . . . . . . . . . . . . . . . . . .

F-83

Yen

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
31. Contractual commitments and contingent liabilities(1) Contractual commitments
Contractual commitments relating to purchase of property, plant and equipment, other assets, and services
are ¥363,319 million, ¥362,071 million, ¥359,214 million as of April 1, 2019, March 31, 2020 and 2021.
(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, 2021,
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 ¥3,078,955 million, ¥3,333,385 million and¥3,710,352 million as of April 1, 2019, March 31, 2020 and 2021. Liabilities for guarantees totaling¥8,921 million, ¥10,615 million, and ¥18,493 million have been provided as of April 1, 2019, March 31, 2020
and 2021. Under these guarantee contracts, Toyota is entitled to recover any amount paid by Toyota from thecustomers 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, Canada, Australia,
Israel and Brazil, as well as some other actions by states or territories of the United States relating to Takata
airbag issues. The actions in Mexico, Australia, Israel, and Brazil are being litigated. The actions by states or
territories of the United States have been resolved.
As previously disclosed, Toyota entered into a consent decree on January 14, 2021 with the U.S. EPA, theDepartment of Justice (“DOJ”) and the Civil Division of the U.S. Attorney’s Office for the Southern District of
New York (“SDNY”) to resolve investigations stemming from a self-reported process gap in fulfilling certain
emissions defect information reporting requirements. Under the consent decree, Toyota agreed to pay, and has
paid, a $180 million civil penalty and to comply with certain additional periodic reporting requirements. The U.S.
District Court for the Southern District of New York approved the consent decree on April 2, 2021.
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.
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, and is subject to government investigations fromtime 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.
F-84

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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.
32. Details of company organization(1) Major subsidiaries
Toyota’s major subsidiaries are follows;
Toyota primarily conducts business in the automotive industry. Toyota also conducts business in financeand other industries.
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.
Other business consists of information technology business and others.
(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, ¥1,872,564 million, ¥1,906,256 million and ¥3,132,734 million
receivables related to financial services, ¥1,893,073 million, ¥1,979,563 million and ¥3,211,211 million secured
debt were included in Toyota’s consolidated financial statements as of April 1, 2019, March 31, 2020 and 2021,
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.
F-85

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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 ¥22,001 million,¥16,622 million and ¥37,397 million as of April 1, 2019, March 31, 2020 and 2021, respectively. The carrying
value of the special purpose entities totaled ¥351,945 million, ¥748,131 million and ¥1,240,530 million as ofApril 1, 2019, March 31, 2020 and 2021, respectively. Toyota does not provide support that is not contractuallyrequired to the investments.
33. 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,Transition date
April 1, 2019
2020
2021

Trade accounts and other receivables
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

300,177
60,835308,574
45,495265,938
44,481

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

361,012354,069

310,419

Trade accounts and other payables
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

835,671
9,693

771,5786,337

855,997656

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

845,364

777,914856,653

Yen in millions
For the years ended March 31,
2020
2021

Sales revenues
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,928,468
489,735

1,138,144
499,437

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

2,418,202

1,637,582

Cost of products sold (purchases)
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,694,395
86,747

5,983,797
51,434

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

6,781,142

6,035,231

Dividends from associates and joint ventures accounted for under the equity method are ¥208,416 millionand ¥205,101 million for the years ended March 31, 2020 and 2021, respectively. In addition, Toyota does notengage in transactions with associates and joint ventures outside of the normal course of business.
F-86

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(2) Transactions with other related parties
For the year ended March 31, 2021, Akio Toyoda, President of TMC, invested ¥5,000 million in Woven
Planet Holdings, Inc., a consolidated subsidiary of TMC.
(3) 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,
2020
2021

Monthly compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bonus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,023
1,039
477
—

987
748
364
747

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

2,540

2,847

“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.
34. Supplemental cash flow information“Other, net” in cash flows from investing activities includes a net increase in time deposits of¥1,700,254 million for the year ended March 31, 2021.
35. Significant subsequent events
Common stock split
TMC authorized a stock split of shares of its common stock and partial amendment to the Articles ofIncorporation due to the stock split, at a meeting of its board of directors held on May 12th, 2021.
(1) Purpose of the Stock Split
The purpose is to reduce the minimum investment price through the stock split, thereby creating anenvironment where it is easier to invest in TMC’s shares and expanding TMC’s investor base.
(2) Stock Split Method
The record date for the stock split will be September 30, 2021. Each share of TMC’s common stock held byshareholders as of the record date will be split into five shares.
(3) Increase in Number of Shares as a Result of the Stock Split
Number of shares outstanding prior to the stock split: 3,262,997,492 shares
Increase in total number of issued shares as a result of this stock split: 13,051,989,968 shares
Number of issued shares after the stock split: 16,314,987,460 shares
Total number of authorized shares after the stock split: 50,000,000,000 shares(4) Stock Split Schedule
Date of public notice of the record date: September 14, 2021 (Scheduled)
Record date: September 30, 2021 (Scheduled)
Effective date: October 1, 2021 (Scheduled)
F-87

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(5) Partial Amendment to Articles of Incorporation
Due to the stock split described above, TMC will partially amend its Articles of Incorporation, to increase
the total number of shares which the Corporation is authorized to issue from ten billion (10,000,000,000) to fifty
billion (50,000,000,000), effective as of October 1, 2021, pursuant to Article 184, Paragraph 2 of the Companies
Act.
(6) Impact on per share information
Per share information assuming that the stock split was performed at the beginning of the fiscal year ended
March 31, 2020 is as follows:Yen
For the year ended
March 31,
2020
2021

Basic earnings per share attributable to Toyota Motor Corporation . . . . . . . . . . . . . . . . . . .
Diluted earnings per share attributable to Toyota Motor Corporation . . . . . . . . . . . . . . . . .
Toyota Motor Corporation shareholders’ equity per share . . . . . . . . . . . . . . . . . . . . . . . . . .

145.49144.02
1,490.80

160.65158.93
1,674.18

36. First-time adoption(1) Transition to reporting in accordance with IFRSTMC has prepared its consolidated financial statements in accordance with IFRS from the first quarter
ended June 30, 2020.
Up to the fiscal year ended March 31, 2020, Toyota prepared its consolidated financial statements inaccordance with U.S. GAAP. The Transition Date was April 1, 2019.
IFRS 1 stipulates that, in principle, the retrospective application of IFRS is required. However, it provides
some voluntary and mandatory exemptions from full retrospective applications. TMC elected such exemptions
with respect to the following items.
(i) Business combination
IFRS 3 “Business Combinations”, was not applied retrospectively to business combinations that occurred
before the Transition Date.
(ii) Foreign currency translation adjustments of foreign operations
The cumulative foreign currency translation adjustments were reclassified from other comprehensive
income to retained earnings as of the Transition Date.
(iii) Designation of equity financial assets
Equity financial assets recognized before the Transition Date were designated as financial assets measured
at fair value through other comprehensive income based on the facts and circumstances that existed as of theTransition Date.
F-88

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(iv) Deemed cost
IFRS 1 permits a first-time adopter to elect to use fair value at the Transition Date as deemed cost for items
of property, plant and equipment. For some property, plant and equipment, the fair value at the Transition Date isused as deemed cost.
(v) Recognition of right of use assets and lease liabilities
When a first-time adopter that is a lessee recognizes right of use assets and lease liabilities, it is permitted tomeasure right of use assets and lease liabilities at the Transition Date under IFRS 1. Toyota measured all leaseliabilities at the Transition Date, using the present value of the remaining lease payments discounted by thelessee’s incremental borrowing rate at the Transition Date. Toyota measured right of use assets at the Transition
Date, making them equal to the lease liabilities.
For leases for which the lease term ends within 12 months of the Transition Date, lease payments associatedwith those leases were recognized as profit or loss on a straight-line basis over the lease term.
(2) Reconciliation of U.S. GAAP to IFRS
Toyota has made the necessary adjustments to the previously disclosed U.S. GAAP consolidated financial
statements in transition to IFRS.
Items that do not affect retained earnings and comprehensive income are included in “Reclassification,” anditems that affect retained earnings and comprehensive income are included in “Adjustment of recognition andmeasurement” of the reconciliation tables.

F-89

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(i) Reconciliation of equity as of the Transition Date April 1, 2019

Presentation under U.S. GAAP

AssetsCurrent assets
Cash and cash
equivalents . . . . . . . . . . .
Trade accounts and notes
receivable, less allowancefor doubtful accounts . . .
Other receivables . . . . . . . .

Yen in millions
Adjustment ofrecognition and
U.S. GAAP Reclassification measurement

IFRS

Notes

Presentation under IFRS

AssetsCurrent assets
Cash and cash
equivalents

3,574,704—

28,101

3,602,805

2,372,734
568,156

568,156(568,156)

13,728—2,954,617—

6,647,771
1,126,352
1,127,160
2,656,396——
1,508,812(1,127,160)—
84,281

9,596
5,228
—
74,644293

6,657,367
2,640,392 B,C,D—
B
2,731,040
a84,574E

Inventories
Income tax receivable

805,964(297,502)(807)

507,654 C,D,E

Other current assets

Total current assets . . . . . . . 18,879,237

168,431130,781

Finance receivables, net . . .
Time deposits . . . . . . . . . . .
Marketable securities . . . . .
Inventories . . . . . . . . . . . . .
Prepaid expenses and othercurrent assets . . . . . . . . . .

Investments in affiliatedcompanies . . . . . . . . . . . . 3,313,723
Noncurrent financereceivables, net . . . . . . . . 10,281,118
Marketable securities andother securities
investments . . . . . . . . . . . 7,479,926
Employees receivables . . . .
21,683
Property, plant andequipment
Land . . . . . . . . . . . . . . . . 1,386,308
Buildings . . . . . . . . . . . . . 4,802,175
Machinery andequipment . . . . . . . . . . 11,857,425
Vehicles and equipmenton operating leases . . .
Construction inprogress . . . . . . . . . . . .

19,178,450

54,004

99,516

3,467,242—(90)

10,281,028

238,009(21,683)

51,806—(28,391)
45,593

1,359,271
4,833,278(6,097)

105,445

11,956,773

6,139,163——

6,139,163

651,71361

4,293

656,067(19,172)

126,939

Trade accounts and otherreceivables
Receivables related tofinancial services
Other financial assets

Total current assets
Non-current assets
Investments accounted
for using the equity
methodReceivables related tofinancial services

7,769,740 D,F,G,b
—
F

1,353
(14,489)

Total property, plant andequipment, at cost . . . . 24,836,784

AA

c

Other financial assets
Property, plant andequipment
Land
Buildings
Machinery andequipment
Vehicles andequipment on
operating leases
Construction inprogress

24,944,551

Total property, plantand equipment, at
cost

Less - Accumulated
depreciation . . . . . . . . . (14,151,290)(8,140)(101,016)(14,260,446)

Less - Accumulated
depreciation andimpairment losses

Total property, plant andequipment, net . . . . . . . 10,685,494(27,313)25,923

10,684,105

Total property, plantand equipment, net———
1,275,768

27,313297,394
501,872(991,888)

369,517611,343(55,489)9396,830
908,737
446,383
283,889

Other . . . . . . . . . . . . . . . . . .

33,057,712

77,7091,102,535

34,237,955

Total assets . . . . . . . . . . . . . . . 51,936,949

246,140

1,233,316

53,416,405

F-90

d
G,e
G,f
G

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

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Presentation under U.S. GAAPYen in millions
Adjustment ofrecognition and
U.S. GAAP Reclassification measurement

IFRS

Notes

Liabilities
Current liabilities
Accounts payable . . . . . . . . . .
Other payables . . . . . . . . . . . . .

2,645,984
1,102,802

1,180,657(1,102,802)

29,492—

3,856,133—

H
H

Short-term borrowings . . . . . .
Current portion of long-term
debt . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . .

5,344,973

4,254,260

102,580

9,701,813

I,d4,254,260
3,222,446(4,254,260)(1,870,433)—(1,761)—1,350,252

IJ—
320,998

475,409
—

(107)
318

475,302321,316

D,K

Income taxes payable . . . . . . .

—1,769,275

239

1,769,514

J

Other current liabilities . . . . . . 1,335,475
Total current liabilities . . . . . . 18,226,938
Long-term liabilities
Long-term debt . . . . . . . . . . . . 10,550,945(339,131)
112,975

11,688142,449

1,008,032
18,482,362

D,K

498,073

293,298

11,342,315

L,d—189,957—

189,957

D

Accrued pension and severance
costs . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . .

963,406
1,014,851

37,532
11,6701,771
200,771

1,002,710
1,227,292fOther long-term liabilities . . . .

615,599(105,994)

6,955

516,560

Total long-term liabilities . . . . 13,144,801
Total liabilities . . . . . . . . . . . . . . . 31,371,739

631,238
744,213502,794645,244

14,278,833
32,761,195(498,073)——

Mezzanine equity . . . . . . . . . . . . . . .
Shareholders’ equity
Toyota Motor Corporation
shareholders’ equity
Common stock, no parvalue . . . . . . . . . . . . . . . . . .

498,073

Presentation under IFRS

Liabilities
Current liabilities
Trade accounts andother 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
Total current liabilities
Non-current liabilities
Long-term debt
Other financial
liabilities
Retirement benefit
liabilities
Deferred tax liabilities
Other non-current
liabilities
Total non-current
liabilities
Total liabilities

L
Shareholders’ equity

397,050—

Additional paid-in capital . . . .
487,162
Retained earnings . . . . . . . . . . 21,987,515
Accumulated othercomprehensive income(loss) . . . . . . . . . . . . . . . . . .
(916,650)
Treasury stock, at cost . . . . . . . (2,606,925)
Total Toyota Motor
Corporation shareholders’equity . . . . . . . . . . . . . . . . . . 19,348,152———(1,373,738)

487,162
20,613,776——

1,932,686—

1,016,035 b,g,h(2,606,925)—

558,947

19,907,100

718,985—

29,125748,110Non-controllinginterests

Total shareholders’ equity . . . . . . 20,067,137
Total mezzanine equity andshareholders’ equity . . . . . . . . 20,565,210
Commitments and contingencies
Total liabilities, mezzanine equity
and shareholders’ equity . . . . . . . 51,936,949—

588,072

20,655,210

Total shareholders’equity(498,073)

588,072

20,655,210

246,140

1,233,316

53,416,405

Noncontrolling interests . . . . . . .

—

F-91

397,050jCommon stock
Additional paid-in
capitalRetained earnings
Other components ofequityTreasury stock
Total Toyota Motor
Corporation
shareholders’ equity

Total liabilities andshareholders’ equity

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(ii) Reconciliation of equity as of March 31, 2020

Presentation under U.S. GAAPYen in millions
Adjustment ofrecognition and
U.S. GAAP Reclassification measurement

IFRS

Notes

AssetsCurrent assets
Cash and cash equivalents . . . .
Trade accounts and notes
receivables, less allowancefor doubtful accounts . . . . . .
Other receivables . . . . . . . . . . .

4,190,518—(92,068)

4,098,450

2,094,894
564,854564,854(564,854)(11,389)—

2,648,360—

Finance receivables, net . . . . . .
Time deposits . . . . . . . . . . . . .
Marketable securities . . . . . . . .
Inventories . . . . . . . . . . . . . . . .

6,614,171
828,220
678,7312,434,918——
1,316,339(678,731)—
237,333

7,433
(958)
—
98,974275

6,621,604
2,143,602 B,C,D—
B
2,533,892
a
237,609
E

Prepaid expenses and othercurrent assets . . . . . . . . . . . . 1,236,225
Total current assets . . . . . . . . . 18,642,531(578,614)
296,327

22,19324,462

679,804 C,D,E
18,963,320

81,731

92,3804,297,564

49(6,109)10,417,797

502,296(21,484)

50,570—7,901,517 D,F,G,b—
F

Investments in affiliatedcompanies . . . . . . . . . . . . . . 4,123,453
Noncurrent financereceivables, net . . . . . . . . . . 10,423,858
Marketable securities and othersecurities investments . . . . . 7,348,651
Employees receivables . . . . . .
21,484
Property, plant and equipment
Land . . . . . . . . . . . . . . . . . . . 1,346,988
Buildings . . . . . . . . . . . . . . . 4,730,783
Machinery andequipment . . . . . . . . . . . . 11,939,121

165(19,860)(28,189)
30,5281,318,964
4,741,451(43,092)

83,41911,979,449

AA

c

Vehicles and equipment on
operating leases . . . . . . . .

5,929,233

—

(400)

5,928,833

Construction in progress . . .

510,96360

6,438

517,460

Total property, plant andequipment, at cost . . . . . . 24,457,088(62,728)

91,79724,486,156

Less - Accumulated
depreciation . . . . . . . . . . . (13,855,563)

2,355(98,933)(13,952,141)

Total property, plant andequipment, net . . . . . . . . . 10,601,525———(60,373)
337,442374,263354,785(7,136)(107)625,994(28,420)

10,534,016
337,335
1,000,257
326,364GG,eG,f

1,518,934(1,331,576)

6,834

194,192

G

34,037,905
Total assets . . . . . . . . . . . . . . . . . 52,680,436

237,133
533,460

734,005
758,468

35,009,043
53,972,363

Other . . . . . . . . . . . . . . . . . . . .

F-92

Presentation under IFRS

AssetsCurrent assets
Cash and cash
equivalents
Trade accounts andother receivables
Receivables related tofinancial services
Other financial assets
Inventories
Income tax receivable
Other current assets
Total current assets
Non-current assets
Investments accounted
for using the equity
methodReceivables related tofinancial services
Other financial assets
Property, plant andequipment
Land
Buildings
Machinery andequipment
Vehicles andequipment on
operating leases
Construction inprogress
Total property,
plant andequipment, at
cost
Less - Accumulated
depreciation andimpairment
lossesTotal property,
plant andequipment, net
Right of use assets
Intangible assets
Deferred tax assets
Other non-current
assetsTotal non-current
assetsTotal assets

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Presentation under U.S. GAAPYen in millions
Adjustment ofrecognition and
U.S. GAAP Reclassification measurement

IFRS

Notes

Liabilities
Current liabilities
Accounts payable . . . . . . . . . .
Other payables . . . . . . . . . . . . .

2,434,180
1,020,270

1,064,224(1,020,270)

(375)
—

3,498,029—

H
H

Short-term borrowings . . . . . .
Current portion of long-term
debt . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . .

5,286,026

4,611,537

9,192

9,906,755

I

4,574,045
2,926,052(4,574,045)(1,689,158)—
19,901—
1,256,794

IJ—
218,117546,378—(7,637)(5,841)

538,740
212,276

D,K

Income taxes payable . . . . . . .

—1,553,816(846)

1,552,970

J

Other current liabilities . . . . . . 1,443,687
Total current liabilities . . . . . . 17,902,377
Long-term liabilities
Long-term debt . . . . . . . . . . . . 10,692,898(252,101)
240,382(14,942)(549)

1,176,645
18,142,209

D,K

739,633

1,688

11,434,219

L,M—

360,588—

360,588

D

Accrued pension and severance
costs . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . .

978,626
1,043,169

41,356
1,487

2,179
153,349

1,022,161
1,198,005

fOther long-term liabilities . . . .

821,515(345,816)

471

476,169

M

Total long-term liabilities . . . . 13,536,208
Total liabilities . . . . . . . . . . . . . . . 31,438,585

797,247
1,037,629

157,687
157,138

14,491,142
32,633,351(504,169)——

Mezzanine equity . . . . . . . . . . . . . . .
Shareholders’ equity
Toyota Motor Corporation
shareholders’ equity
Common stock, no parvalue . . . . . . . . . . . . . . . . . .

504,169

Short-term and current
portion of long-term
debt
Accrued expenses
Other financial
liabilities
Income taxes payable
Liabilities for quality
assurance
Other current
liabilities
Total current liabilities
Non-current liabilities
Long-term debt
Other financial
liabilities
Retirement benefit
liabilities
Deferred tax liabilities
Other non-current
liabilities
Total non-current
liabilities
Total liabilities

L
Shareholders’ equity

397,050—

Additional paid-in capital . . . .
489,334
Retained earnings . . . . . . . . . . 23,427,613
Accumulated othercomprehensive income(loss) . . . . . . . . . . . . . . . . . . (1,166,273)
Treasury stock, at cost . . . . . . . (3,087,106)———(1,193,552)

489,334
22,234,061——

1,751,822—

585,549 b,g,h(3,087,106)—

558,270

20,618,888

677,064—

43,060720,124

Total shareholders’ equity . . . . . . 20,737,682
Total mezzanine equity andshareholders’ equity . . . . . . . . 21,241,851
Commitments and contingencies
Total liabilities, mezzanine equity
and shareholders’ equity . . . . . . . 52,680,436—

601,330

21,339,012(504,169)

601,330

21,339,012

533,460

758,468

53,972,363

Total Toyota Motor
Corporation shareholders’equity . . . . . . . . . . . . . . . . . . 20,060,618
Noncontrolling interests . . . . . . .

Presentation under IFRS

Liabilities
Current liabilities
Trade accounts andother payables

—

F-93

397,050jCommon stock
Additional paid-in
capitalRetained earnings
Other components ofequityTreasury stock
Total Toyota Motor
Corporation
Shareholders’equityNon-controllinginterests
Total shareholders’equityTotal liabilities andshareholders’ equity

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(iii) Reconciliation of net profit or loss for the year ended March 31, 2020

Presentation under U.S. GAAPYen in millions
Adjustment ofrecognition and
U.S. GAAP Reclassification measurement

IFRS

Net revenues . . . . . . . . . . . . . . . . . . .
Sales of products . . . . . . . . . . . . . . 27,759,749
Financing operations . . . . . . . . . . . 2,170,243——(66,056)
2,611

27,693,693
2,172,854

Total net revenues . . . . . . . . . . . . . 29,929,992—(63,445)

29,866,547(12,761)—(26,387)
2,134

23,103,596
1,381,755(3,391)

20,5972,981,965

Costs and expenses . . . . . . . . . . . . . .
Cost of products sold . . . . . . . . . . 23,142,744
Cost of financing operations . . . . . 1,379,620
Selling, general andadministrative . . . . . . . . . . . . . . 2,964,759(16,153)(3,655)27,467,315

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

Total costs and expenses . . . . . . . . 27,487,123
2,442,869

16,153(59,790)2,399,232

Other income (expense) . . . . . . . . . .

—271,152

39,094

310,247

Interest and dividend income . . . .
Interest expense . . . . . . . . . . . . . .
Foreign exchange gain (loss),
net . . . . . . . . . . . . . . . . . . . . . . .
Unrealized gains (losses) on
equity securities . . . . . . . . . . . .
Other income (loss), net . . . . . . . .

232,870(32,217)

77,241(2,573)(4,266)(12,365)

305,846(47,155)(79,020)—(15,599)(94,619)(24,600)
14,705—(90,821)

24,600(4,491)—(80,607)2,554,607

271,152(32,817)

2,792,942

Provision for income taxes . . . . . . . .
Equity in earnings of affiliatedcompanies . . . . . . . . . . . . . . . . . . .

683,430—(1,613)681,817271,152(271,152)——

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

2,142,329—(31,204)

Income before income taxes andequity in earnings of affiliatedcompanies . . . . . . . . . . . . . . . . . . .

Net income attributable to Toyota
Motor Corporation . . . . . . . . . . . .
Net income attributable tononcontrolling interests . . . . . . . .

2,076,183—(40,043)

Presentation under IFRSSales revenuesi
Sales of products
Financial services
Total sales revenuesi

Costs and expenses
Cost of products soldCost of financial services
Selling, general andadministrative
Total costs and expenses
Operating income
Share of profit (loss) ofinvestments accounted
for using the equity
methodOther finance income
Other finance costs
Foreign exchange gain
(loss), netbOther income (loss), net
Income before incometaxes
b Income tax expense

2,111,125

Net income

2,036,140

Net income attributable to
Toyota Motor
Corporation

66,146—

8,839

74,985

2,142,329—(31,204)

2,111,125

F-94

Notes

Non-controlling interests
Net income

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(iv) Reconciliation of other comprehensive income for the year ended March 31, 2020

Presentation under U.S. GAAPNet income . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss),
net of tax

Yen in millions
Adjustment ofrecognition and
U.S. GAAP Reclassification measurement

IFRS

Notes

Presentation under IFRS

2,142,329—(31,204)

2,111,125

Unrealized gains (losses) on
securities . . . . . . . . . . . . . . . . . .

118,363(118,363)(243,853)(243,853)

Pension liability adjustments . . . .

(60,196)(612)

17,409(43,399)—

612

61,95662,56858,167(118,363)(164,488)(224,684)(333,854)

89,371(117,614)(362,098)—

118,363(4,973)

113,390—(89,371)

54,118(35,253)(333,854)

118,363(68,469)(283,961)

Total other comprehensive income(loss) . . . . . . . . . . . . . . . . . . . . .
Comprehensive income . . . . . . . . . .

(275,687)
1,866,642——(232,958)(264,162)(508,645)
1,602,480

Comprehensive income
attributable to Toyota Motor
Corporation . . . . . . . . . . . . . . . .
Comprehensive income
attributable to noncontrollinginterests . . . . . . . . . . . . . . . . . . .

1,820,764—(265,756)

1,555,009

45,878—1,594

47,472

Non-controlling interests

1,866,642—(264,162)

1,602,480

Comprehensive income

Foreign currency translation
adjustments . . . . . . . . . . . . . . . .

F-95

Net income
Other comprehensive
income, net of tax
Items that will not bereclassified to profit(loss)Net changes inrevaluation offinancial assets
measured at fairvalue through othercomprehensive
incomeb
Remeasurements ofdefined benefit
plans
Shares of othercomprehensive
income of equity
method investees
Total of items that will
not be reclassified
to profit (loss)
Items that may bereclassified
subsequently to profit(loss)
Exchange differenceson translating
foreign operations
Net changes inrevaluation offinancial assets
measured at fairvalue through othercomprehensive
incomeShares of othercomprehensive
income of equity
method investees
Total of items that
may be reclassified
subsequently to
profit (loss)
Total othercomprehensive
income, net of tax
Comprehensive income
Comprehensive income forthe period attributable to
Toyota Motor
Corporation

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(3) Notes to reconciliation(i) Changes in presentation
A.

Other receivables separately presented under U.S. GAAP have been reclassified into trade accounts andother receivables under IFRS.

B.

Marketable securities separately presented under U.S. GAAP have been reclassified into other financial
assets in current assets under IFRS.

C.

Other financial assets included in prepaid expenses and other current assets under U.S. GAAP are
separately presented under IFRS.

D.

Derivative assets and liabilities that meet certain requirements are offset under U.S. GAAP. Under
IFRS they are presented in gross amount.

E.

Income tax receivable included in prepaid expenses and other current assets under U.S. GAAP are
separately presented under IFRS.

F.

Employees receivables separately presented under U.S. GAAP have been reclassified into otherfinancial assets in non-current assets under IFRS.

G.

Right of use assets, intangible assets, deferred tax assets and other financial assets in non-current assets
included in other in investment and other assets under U.S. GAAP are separately presented under
IFRS.

H.

Other payables separately presented under U.S. GAAP have been reclassified into trade accounts andother payables under IFRS.

I.

Current portion of long-term debt separately presented under U.S. GAAP have been reclassified into
short-term and current portion of long-term debt under IFRS.

J.

Liabilities for quality assurance included in accrued expenses under U.S. GAAP are separately
presented under IFRS.

K.

Other financial liabilities included in other current liabilities under U.S. GAAP are separately presented
under IFRS.

L.

Model AA Class Shares presented as mezzanine equity under U.S. GAAP have been reclassified into
long-term debt under IFRS.

M. Lease liabilities included in other long-term liabilities under U.S. GAAP have been reclassified into
long-term debt under IFRS.
(ii) Difference in recognition and measurement
For the following reconciliation, the related allocation to the non-controlling interests is recorded.
a.

Inventory valuation method

Under U.S. GAAP, inventories of some subsidiaries are calculated using the last-in, first-out method, but
under IFRS, they are calculated using the weighted-average method.
b.

Fair value measurement of equity financial assets

Unlisted stocks are recorded at acquisition cost under U.S. GAAP but are measured at fair value under
IFRS. For equity financial assets, U.S. GAAP recognizes valuation gains and losses, gains and losses on sales
and impairment as profit or loss, but under IFRS, changes in fair value are recognized as other comprehensive
income.
F-96

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)c.

Deemed cost

In accordance with IFRS 1, Toyota has elected to use fair value at the Transition Date as deemed cost for
certain items of property, plant and equipment. The carrying amount of property, plant and equipment under U.S.
GAAP to which the exemption is applied is ¥59,456 million and the fair value is ¥21,225 million.
d.

Recognition of right of use assets and lease liabilities

Under IFRS, newly recognized right of use assets and lease liabilities are recorded as a result of the adoptionof IFRS 16 “Leases”.
e.

Capitalization of costs incurred for development of products

Under U.S. GAAP, development expense is expensed as incurred. Under IFRS, costs incurred fordevelopment of products are capitalized if it meets the capitalization requirements.
f.

Deferred income taxes

Deferred income taxes have been adjusted due to the other adjustments from U.S. GAAP to IFRS. The
adjustment mainly related to ¥188,837 million (as of April 1, 2019) and ¥193,271 million (as of March 31, 2020)of the capitalization of development costs.
g.

Exchange differences on translating foreign operations

In accordance with the first-time exemption, the cumulative translation differences of foreign operations asof the Transition Date are transferred from other components of equity to retained earnings.
h.

Retirement benefit obligations for defined benefit plans

Under U.S. GAAP, actuarial gains and losses and past service cost are recognized in other comprehensive
income when they are incurred and amortized over a certain period of future years. Under IFRS, remeasurements
arising from defined benefit plans, including actuarial gains and losses are recognized in other comprehensive
income and reclassified directly from other components of equity to retained earnings when they are incurred.
Past service cost is recognized in profit or loss when incurred.
i.

Unification of a reporting period

For certain consolidated subsidiaries and companies accounted for by the equity method that have closing
dates different from Toyota, the reporting period has been unified to Toyota’s closing date on the Transition
Date.

F-97

TOYOTA MOTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)j.

Reconciliation of retained earnings
Yen in millions
Transition Date
April 1, 2019
March 31, 2020

b. Fair value measurement of equity financial assets . . . . . . . . . . . . . . . . . . . . . . . .
g. Exchange differences on translating foreign operations . . . . . . . . . . . . . . . . . . .
h. Retirement benefit obligations for defined benefit plans . . . . . . . . . . . . . . . . . . .

(990,815)(649,532)(265,867)(799,568)(649,532)(324,014)

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,906,213)(1,773,114)e. Capitalization of cost incurred for development of product . . . . . . . . . . . . . . . . .
i. Unification of a reporting period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

410,531
85,211
36,732432,20251,48095,880Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,373,738)(1,193,552)

Subtotal represents reclassification from other components of equity.
Adjustments on the Cash Flows
Additions, collections and sales of receivables from financial services which were classified as cash flows
from investing activities under U.S. GAAP are classified as cash flows from operating activities under IFRS.

F-98

ITEM 19. EXHIBITS
Index to Exhibit
1.1

Amended and Restated Articles of Incorporation of the Registrant (English translation)

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, 2019, filed with the SEC on June 21, 2019 (file no.
001-14948))

1.3

Amended and Restated Regulations of the Audit & Supervisory Board of the Registrant (English
translation) (incorporated by reference to Exhibit 1.3 to Toyota’s Annual Report on Form 20-F
for the fiscal year ended March 31, 2016, filed with the SEC on June 24, 2016 (file no.
001-14948))

2.1

Amended and Restated Share Handling Regulations of the Registrant (English translation)

2.2

Form of Deposit Agreement among the Registrant, The Bank of New York (predecessor of The
Bank of New York Mellon), as depositary, and the owners and beneficial owners from time totime of American Depositary Receipts, 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 November 7, 2006 (file no. 333-138477))

2.3

Form of ADR (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 “Descriptionof the American Depositary Shares” within Exhibit 2.4 to Toyota’s Annual Report on Form 20-F
for the fiscal year ended March 31, 2020, filed with the SEC on June 24, 2020 (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)

12.1

Certifications of the Registrant’s President and Member of the Board, as well as Operating
Officer, 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 Operating
Officer, pursuant to Section 906 of the Sarbanes-Oxley Act

15.1

Consent of Independent Registered Public Accounting Firm

101.INSXBRL Instance Document

101.SCHXBRL Taxonomy Extension Schema

101.CALXBRL Taxonomy Extension Calculation Linkbase

101.DEFXBRL Taxonomy Extension Definition Linkbase

101.LABXBRL Taxonomy Extension Label Linkbase

101.PREXBRL Taxonomy Extension Presentation Linkbase
124

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 24, 2021

By:

/s/ Kenta Kon

Name:
Title:

Kenta Kon
Member of the Board of Directors

Exhibit 1.1
ARTICLES OF INCORPORATION OF TOYOTA MOTOR CORPORATION(As amended on June 16, 2021)
CHAPTER I. GENERAL PROVISIONS
Article 1. (Trade Name)
The name of the Corporation shall be “Toyota Jidosha Kabushiki Kaisha” to be expressed in English as“TOYOTA MOTOR CORPORATION”.
Article 2. (Purpose)
The purpose of the Corporation shall be to engage in the following businesses:(1) the manufacture, sale, leasing and repair of motor vehicles, industrial vehicles, ships, aircraft, othertransportation machinery and apparatus, spacecraft and space machinery and apparatus, and parts
thereof;(2) the manufacture, sale, leasing and repair of industrial machinery and apparatus and other generalmachinery and apparatus, and parts thereof;(3) the manufacture, sale, leasing and repair of electrical machinery and apparatus, and parts thereof;(4) the manufacture, sale, leasing and repair of measuring machinery and apparatus, and medical
machinery and apparatus, and parts thereof;(5) the manufacture and sale of ceramics and products of synthetic resins, and materials thereof;(6) the manufacture, sale and repair of construction materials and equipment, furnishings and fixtures forresidential buildings;(7) the planning, designing, supervision, execution and undertaking of construction works, civilengineering works, land development, urban development and regional development;(8) the sale, purchase, leasing, brokerage and management of real estate;(9) the service of information processing, information communications and information supply, and thedevelopment, sale and leasing of software;(10) the design and development of product sales systems that utilize networks such as the Internet; sale,leasing, maintenance of computers included within such systems, and sales of products by utilizing
such systems;(11) the inland transportation, marine transportation, air transportation, stevedoring, warehousing andtourism businesses;(12) the printing, publishing, advertising and publicity, general leasing, security and workers dispatch
businesses;(13) the credit card operations, purchase and sale of securities, investment consulting, investment trust
operation, and other financial services;(14) 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;(15) the non-life insurance agency business and life insurance agency business;(16) the production and processing by using biotechnology of agricultural products including trees, and thesale of such products;

(17) power generation and the supply and sale of electric power(18) the sale of goods related to each of the preceding items and mineral oil;(19) the conducting of engineering, consulting, invention and research relating to each of the preceding
items and the utilization of such invention and research; and(20) any businesses incidental to or related to any of the preceding items.
Article 3. (Location of Principal Office)The principal office of the Corporation shall be located in Toyota City, Aichi Prefecture, Japan.
Article 4. (Public Notices)
Public notices of the Corporation shall be given electronically; provided, however, that in the case that anelectronic public notice is impracticable due to an accident or any other unavoidable reason, public notices of the
Corporation shall be given in the newspaper “The Nihon Keizai Shimbun”.

CHAPTER II. SHARESArticle 5. (Total Number of Authorized Shares)
The total number of shares which the Corporation is authorized to issue shall be ten billion(10,000,000,000).
Article 6. (Number of Shares Constituting One Unit (tangen) and Rights to Shares Constituting Less than One
Unit (tangen))1.
(100).

The number of shares constituting one unit (tangen) of shares of the Corporation shall be one hundred

2. The shareholders of the Corporation are not entitled to exercise any rights to shares constituting lessthan one unit (tangen) of shares held by the shareholders, other than the rights provided for in each Item of
Article 189, Paragraph 2 of the Companies Act (Kaisha-hou).
Article 7. (Acquisition of Own Shares)
The Corporation may acquire its own shares by a resolution of the Board of Directors in accordance with theprovisions of Article 165, Paragraph 2 of the Companies Act.
Article 8. (Transfer Agent)
1.

The Corporation shall have a transfer agent (Kabunushimeibo-Kanrinin).

2. The transfer agent and the location of its office shall be designated by a resolution of the Board of
Directors, and public notice thereof shall be given.
The register of shareholders and the register of stock acquisition rights shall be kept at the office of thetransfer agent. The entry or recording into the register of shareholders and the register of stock acquisition rights,
the purchase of shares constituting less than one unit (tangen) and any other matters related to the shares andstock acquisition rights shall be handled by the transfer agent and not by the Corporation.

Article 9. (Share Handling Regulations)
The procedures for and fees for the entry or recording into the register of shareholders and the register ofstock acquisition rights, purchasing shares constituting less than one unit (tangen) and any other matters relating
to the handling of shares and stock acquisition rights shall be subject to the Share Handling Regulations
established by the Board of Directors.
Article 10. (Record Date)
1. The Corporation shall deem any shareholder entered or recorded in the final register of shareholders asof March 31 in such year to be a shareholder entitled to exercise its rights at the ordinary general meeting ofshareholders for that business year.
2. In addition to the case provided for in the preceding paragraph, the Corporation may, after giving priorpublic notice, fix a date as the record date, where it deems it necessary to do so.
CHAPTER III. GENERAL MEETINGS OF SHAREHOLDERS
Article 11. (Ordinary General Meetings and Extraordinary General Meetings of Shareholders)
1. The ordinary general meeting of shareholders of the Corporation shall be convened in June of each year.
Extraordinary general meetings of shareholders may be called whenever necessary.
2. Each general meeting of shareholders may be convened at the place where the principal office of the
Corporation is located, or at a place adjacent thereto, or in Nagoya City.
Article 12. (Resolutions)
1. All resolutions of a general meeting of shareholders shall be adopted by a majority of the votes of theshareholders present at the meeting who are entitled to vote, unless otherwise provided by laws and regulationsor these Articles of Incorporation of the Corporation.
2. Special resolutions as specified by Article 309, Paragraph 2 of the Companies Act shall be adopted by
not less than two-thirds (2/3) of the votes of the shareholders present at the meeting who hold shares representing
in aggregate not less than one-third (1/3) of the voting rights of all shareholders who are entitled to vote.
Article 13. (Chairman of General Meeting)
1. The Chairman of the Board or the President of the Corporation shall preside as chairman at a general
meeting of shareholders.
2. In the event that the positions of both the Chairman of the Board and the President are vacant or thatboth of them are prevented from so presiding as chairman, another Director of the Corporation shall preside in
their place according to the order of precedence previously established by the Board of Directors.
Article 14. (Exercise of Voting Rights by Proxy)
1. A shareholder may exercise its voting rights by proxy, provided, however, that the proxy shall be ashareholder of the Corporation who is entitled to exercise its own voting rights.
2. In cases where the preceding paragraph applies, the shareholder or its proxy shall file with the
Corporation a document establishing the proxy’s power of representation for each general meeting ofshareholders.
3. The Corporation may refuse a shareholder having two (2) or more proxies attend a general meeting ofshareholders.

Article 15. (Deemed Delivery of Reference Documents, etc. for General Meeting of Shareholders)Upon convening a general meeting of shareholders, the Corporation may deem that the information which is
required to be described or indicated in reference documents for the general meeting of shareholders, business
reports, financial statements and consolidated financial statements shall be provided to the shareholders, in theevent that it is disclosed, pursuant to laws and regulations, through the method by which shareholders may
receive such information through an electronic means.
CHAPTER IV. MEMBERS OF THE BOARD OF DIRECTORS AND BOARD OF DIRECTORS
Article 16. (Number of Directors)
The Corporation shall have no more than twenty (20) Directors.
Article 17. (Election of Directors)
1.

Directors shall be elected by a resolution of a general meeting of shareholders.

2. A resolution for the election of Directors shall be adopted by a majority vote of the shareholders present
at the meeting who hold shares representing in aggregate not less than one-third (1/3) of the voting rights of all
the shareholders who are entitled to vote.
3.

The election of Directors shall not be made by cumulative voting.

Article 18. (Term of Office of Directors)
1. The term of office of Directors shall expire at the closing of the ordinary general meeting ofshareholders to be held for the last business year of the Corporation ending within one (1) year after theirelection.
2. The term of office of any Director elected in order to increase the number of Directors or to fill avacancy shall be the balance of the term of office of the other Directors who hold office at the time of his/ herelection.
Article 19. (Board of Directors)
1.

The Corporation shall have a Board of Directors.

2. Notice of a meeting of the Board of Directors shall be dispatched to each Director and each Audit &Supervisory Board Member at least three (3) days before the date of the meeting. In case of urgency, however,such period may be shortened.
3. With respect to matters to be resolved by the Board of Directors, the Corporation shall deem that suchmatters were approved by a resolution of the Board of Directors when all the Directors express their agreement inwriting or by electronic records. Provided, however, that this provision shall not apply when any Audit &Supervisory Board Member expresses his/her objection to such matters.
4. In addition to the preceding two (2) paragraphs, the management of the Board of Directors shall be
subject to the Regulations of the Board of Directors established by the Board of Directors.
Article 20. (Representative Directors and Executive Directors)
1.

The Board of Directors shall designate one or more Representative Directors by its resolution.

2. The Board of Directors may appoint one Chairman of the Board, one President and one or more Vice
Chairmen of the Board and Executive Vice Presidents by its resolution.

Article 21. (Honorary Chairmen and Senior Advisors)
The Board of Directors may appoint Honorary Chairmen and Senior Advisors by its resolution.
Article 22. (Exemption from Liability of Directors)
In accordance with the provisions of Article 426, Paragraph 1 of the Companies Act, the Corporation may,by a resolution of the Board of Directors, exempt Directors (including former Directors) from liabilities provided
for in Article 423, Paragraph 1 of the Companies Act within the limits stipulated by laws and regulations.
Article 23. (Limited Liability Agreement with members of the Board of Directors)
In accordance with the provisions of Article 427, Paragraph 1 of the Companies Act, the Corporation may
enter into an agreement with Members of the Board of Directors (excluding Executive Members of the Board of
Directors, etc.) limiting liabilities provided for in Article 423, Paragraph 1 of the Companies Act; provided,
however, that the limit of the liability under the agreement shall be the minimum amount of liability stipulated bylaws and regulations.

CHAPTER V. AUDIT & SUPERVISORY BOARD MEMBERS AND AUDIT & SUPERVISORY BOARD
Article 24. (Establishment of Audit & Supervisory Board Members and Number of Audit & Supervisory Board
Members)
The Corporation shall have no more than seven (7) Audit & Supervisory Board Members.
Article 25. (Election of Audit & Supervisory Board Members)
1. Audit & Supervisory Board Members shall be elected by a resolution of a general meeting ofshareholders.
2. A resolution for the election of Audit & Supervisory Board Members shall be adopted by a majority
vote of the shareholders present at the meeting who hold shares representing in aggregate not less than one-third(1/3) of the voting rights of all the shareholders who are entitled to vote.
Article 26. (Term of Office of Audit & Supervisory Board Members)
1. The term of office of Audit & Supervisory Board Members shall expire at the closing of the ordinary
general meeting of shareholders to be held for the last business year of the Corporation ending within four(4) years after their election.
2. The term of office of any Audit & Supervisory Board Member elected to fill a vacancy shall be thebalance of the term of office of the Audit & Supervisory Board Member whom he/she succeeds.
Article 27. (Audit & Supervisory Board)
1.

The Corporation shall have an Audit & Supervisory Board.

2. Notice of a meeting of the Audit & Supervisory Board shall be dispatched to each Audit & Supervisory
Board Members at least three (3) days before the date of the meeting. In case of urgency, however, such period
may be shortened.
3. In addition to the provisions of the preceding paragraph, the management of the Audit & Supervisory
Board shall be subject to the Regulations of the Audit & Supervisory Board established by the Audit &Supervisory Board.

Article 28. (Full-time Audit & Supervisory Board Member)
The Audit & Supervisory Board shall, by its resolution, select one or more full-time Audit & Supervisory
Board Members.
Article 29. (Exemption from Liability of Audit & Supervisory Board Members)
In accordance with the provisions of Article 426, Paragraph 1 of the Companies Act, the Corporation may,by a resolution of the Board of Directors, exempt Audit & Supervisory Board Members (including former
Audit & Supervisory Board Members) from liabilities provided for in Article 423, Paragraph 1 of the Companies
Act within the limits stipulated by laws and regulations.
Article 30. (Limited Liability Agreement with Audit & Supervisory Board Members)
In accordance with the provisions of Article 427, Paragraph 1 of the Companies Act, the Corporation may
enter into an agreement with Audit & Supervisory Board Members limiting liabilities provided for in Article 423,
Paragraph 1 of the Companies Act; provided, however, that the limit of the liability under the agreement shall be
the minimum amount of liability stipulated by laws and regulations.

CHAPTER VI. ACCOUNTING AUDITOR
Article 31. (Accounting Auditor)
The Corporation shall have an Accounting Auditor (kaikeikansa-nin).

CHAPTER VII. ACCOUNTS
Article 32. (Business Year)The business year of the Corporation shall be one (1) year from April 1 of each year until March 31 of thefollowing year.
Article 33. (Dividends from Surplus, etc.)
1. Dividends from Surplus of the Corporation shall be paid to the shareholders or registered share pledgees
entered or recorded in the final register of shareholders as of March 31 of each year.
2. The Corporation may, by a resolution of the Board of Directors, distribute dividends from surplus asprovided for in Article 454, Paragraph 5 of the Companies Act to the shareholders or registered share pledgees
entered or recorded in the final register of shareholders as of September 30 of each year.
3. In addition to the preceding two (2) paragraphs, the Corporation may, by a resolution of the Board of
Directors, decide on matters provided for in each Item of Article 459,Paragraph 1 of the Companies Act.
4.

No interest shall be paid on unpaid dividends from surplus.

Article 34. (Dispensation from Payment of Dividends from Surplus, etc.)
In the case where the dividends from surplus are paid by cash, the Corporation shall not be obliged to pay
any dividends from surplus after three (3) years have expired from the date of tender thereof.

Exhibit 2.1(TRANSLATION)SHARE HANDLING REGULATIONSOFTOYOTA MOTOR CORPORATION
Established: November 28, 1951
As last amended on June 16, 2021
CHAPTER I.
GENERAL PROVISIONS
Article 1. (Purpose)
1.

Matters relating to the handling of shares and stock acquisition rights (including the procedures relating to
the exercise of shareholders’ rights) of Toyota Motor Corporation (the “Company”) under the Articles ofIncorporation of the Company, shall be governed by provisions of these share handling regulations (these“Regulations”), in addition to the provisions set forth by Japan Securities Depositary Center, Inc.
(“JASDEC”), the book-entry transfer institution, and account management institutions such as securities
companies and trust banks (each referred to as the “Securities Company”).

2.

Matters relating to the handling of special accounts opened in accordance with agreements executed
between the Company and a trust bank designated by the Company, and the fees in connection with suchspecial accounts shall be governed by these Regulations, in addition to the provisions set forth by the trustbank.

Article 2. (Transfer Agent and its Handling Office)The transfer agent (the “Transfer Agent”) of the Company and its handling office shall be as follows:
Transfer Agent:
Mitsubishi UFJ Trust and Banking Corporation
4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo
Handling office:Mitsubishi UFJ Trust and Banking Corporation,
Corporate Agency Division
4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo
Article 3. (Request or Notification)
1.

Any request or notification with respect to the matters provided for in these Regulations shall be made in a
written format designated by the Company. However, the foregoing shall not apply if such request or
notification is submitted through the Securities Company and JASDEC, or as provided for in Article 17,
Paragraph 1.

2.

Should any request or notification as set forth in the preceding paragraph be submitted by the shareholder
through the Securities Company and JASDEC, or through the Securities Company, it may be deemed thatsuch request or notification has been made by such shareholder.

3.

The Company may request the person who submitted the request or notification as stipulated in Paragraph 1of this article to the Company, to submit materials certifying that the person is a shareholder of theCompany or an agent of a shareholder of the Company.

4.

In the event that the Company requests a person to submit materials as described in the preceding paragraph,
the Company shall not process such request or notification unless such material is submitted.

Article 4. (Agent)
Should the procedure mentioned in Paragraph 1 of the preceding article be taken by an agent, such agent shallsubmit a documentation evidencing his/her power of representation. In addition, if the consent of curator or
assistant is required for the procedure mentioned in Paragraph 1 of the preceding article, the shareholder shallsubmit a documentation evidencing such consent.
Article 5. (Certification Document and Guarantor)
If the Company deems it necessary in connection with the procedure mentioned in Article 3, Paragraph 1, theCompany may require, in addition to those provided for in these Regulations, such certification document or suchguarantor as the Company may deem appropriate.

CHAPTER II.
ENTRY OR RECORDING, ETC. IN THE REGISTER OF SHAREHOLDERS
Article 6. (Entry or Recording in the Register of Shareholders)
1.

The Company shall enter or record items in the register of shareholders (the “Register of Shareholders”) in
accordance with the general shareholders notification (sou kabunushi tsuchi) received from JASDEC.

2.

If the Company receives notification regarding changes in address or other matters indicated in the Registerof Shareholders of a person who is entered or recorded in the Register of Shareholders (the “Shareholder”),
the Company shall revise the Register of Shareholders in accordance with such notification.

3.

In addition to Paragraphs 1 and 2 of this article, the Company shall enter or record, in the Register of
Shareholders, the issuance of new shares and such other matters provided for in laws and regulations.

Article 7. (Letters, Symbols, etc. to be Used in the Register of Shareholders)
Entries in the Register of Shareholders shall be made using the letters and symbols specified by JASDEC.

CHAPTER III.
NOTIFICATION OF VARIOUS MATTERS
Article 8. (Notification of Shareholder’s Name/Corporate Name and Address, etc.)
1.

A Shareholder shall file a notification of name/corporate name and address; provided, however, that if anyof the following items is applicable to the Shareholder, notification of the matters specified in such item
shall be filed:(1) If the Shareholder has a statutory agent such as a person in parental authority or guardian, the name/corporate name and address of such statutory agent.
(2) If the Shareholder is a corporation, the corporate name and address of the judicial person, and the title
and name of its representative.
(3) If the shares are jointly owned, the name/corporate name and address of a representative of the joint
owners.
(4) If the Shareholder resides outside of Japan, in addition to the name/corporate name and address of the
Shareholder, the address in Japan at which such Shareholder shall receive notices or, if the Shareholder
appoints a standing proxy in Japan, the name/corporate name and address of such standing proxy.

2.

A Shareholder shall file a notification of amendment, if there is any amendment to the matters mentioned in
the preceding paragraph.

3.

The notifications or notifications of amendment described in Paragraphs 1 and 2 of this article shall be filed
through the Securities Company and JASDEC. However, this shall not apply to the cases stipulated in
Article 6, Paragraph 3.

Article 9. (Other Notifications)1.

In addition to notifications set forth in the preceding article, a Shareholder submitting any notification to theCompany shall do so through the Securities Company and JASDEC, or through the Securities Company,
unless otherwise designated by the Company. However, this shall not apply to the cases stipulated in Article
6, Paragraph 3.

2.

Notifications which cannot be received or handled by the Securities Company shall be submitted to theTransfer Agent.

Article 10. (Application to Registered Pledgees)
The provisions in this Chapter shall be applied mutatis mutandis to registered pledgees of shares.

CHAPTER IV.
PURCHASE OF COMMON SHARES CONSTITUTING LESS THAN ONE UNIT
Article 11. (Request for Purchase of Shares)
In the event that a shareholder requests the Company for the purchase of common shares constituting less than
one unit, such shareholder shall submit the request through the Securities Company and JASDEC in accordancewith the provisions set forth by JASDEC.
Article 12. (Determination of Purchase Price)
If a purchase request is made for common shares constituting less than one unit, the purchase price of such sharesshall be the amount obtained by multiplying the number of common shares requested to be purchased by theamount equivalent to the closing price of the common shares of the Company on the Tokyo Stock Exchange on
the date on which the purchase request is received at the Handling Office of the Transfer Agent (“Date ofRequest”); provided, however, that if there is no sale and purchase transaction on the Tokyo Stock Exchange on
the Date of Request or if the Date of Request falls on a holiday of the Tokyo Stock Exchange, the amountequivalent to the price at which the common shares of the Company are first traded on the trading day
immediately following such date and thereafter shall be used.
Article 13. (Payment of Purchase Price)
Unless otherwise specified by the Company, the purchase price under the preceding article shall be paid by theCompany to the applicant on the fourth business day of the Transfer Agent from the date immediately following
the date on which the purchase price is determined and the purchase request is received at the Handling Office of
the Transfer Agent.
Article 14. (Transfer of Shares Purchased)
The common shares constituting less than one unit for which the request for purchase is made shall be transferredto the transfer account of the Company on the date on which procedures for the payment of the purchase price as
set forth in the preceding article have been completed.

CHAPTER V.
ENTRY OR RECORDING, ETC. IN REGISTER OF STOCK ACQUISITION RIGHTS
Article 15. (Entry or Recording, etc. in Register of Stock Acquisition Rights)
1.

Any request for (i) entry or recording in the register of the stock acquisition rights (the “Register of theStock Acquisition Rights”), (ii) registration, transfer or cancellation of the right of the pledge in connection
with the stock acquisition rights and (iii) representation or cancellation of the trust assets, shall be made to
the Transfer Agent.

2.

In addition to the provisions set forth in the preceding paragraph, the handling of stock acquisition rights
may be governed separately.

Article 16. (Matters and Methods of Notifications Required to the Holder of Stock Acquisition Rights)
The provisions in Articles 8 and 9 of these Regulations regarding matters and methods of notifications required
shall be applied mutatis mutandis to the holders of the stock acquisition rights that are entered or recorded in theRegister of the Stock Acquisition Rights; provided, however, unless as otherwise governed pursuant to Paragraph
2 of the preceding article, such notifications shall be made to the Transfer Agent.

CHAPTER VI.
PROCEDURES FOR EXERCISE OF MINORITY SHAREHOLDERS’ RIGHTS, ETC.
Article 17. (Procedures for Exercise of Minority Shareholders’ Rights, etc.)
1.

Where minority shareholders’ rights and other rights as provided for in Article 147, Paragraph 4 of the Law
Concerning Book-entry Transfer of Corporate Bonds, Stocks, etc. (the “Transfer Law”) are exercised
directly to the Company, the exercising shareholder shall submit the request in writing bearing the name andseal of the shareholder, with an acceptance form (uketsuke hyou) of an Individual Shareholder Notice(kobetsu kabunushi tsuchi) (a notification set forth in Article 154, Paragraph 3 of the Transfer Law)
delivered by the Securities Company attached. Non-Japanese citizens may provide a signature as a substitutefor the name and seal.

2.

The provisions in Article 3, Paragraphs 3 and 4, Articles 4 and 5 shall be applied to the exercise of minority
shareholders’ rights and other rights as described in the preceding paragraph.

CHAPTER VII.
FEES
Article 18. (Fees)
The fees for the handling of shares shall be free of charge; provided, however, that the fees payable byshareholders to the Securities Company or JASDEC shall be borne by the Shareholders.
SUPPLEMENTARY PROVISIONS
Article 1. (Amendment to Regulations)
Any amendment to these Regulations shall be made by a resolution of the meetings of the Board of Directors of
the Company.
Article 2. (Effective Date)
These Regulations, as amended, shall become effective as of June 16, 2021.
(End of Document)Exhibit 11.1
The Code of Ethics for Directors and Officers
Article 1. (Purpose)
This document comprises a code of ethics (the “Code”) for directors and officers (including presidents,
executive vice presidents and fellows who are appointed under Article 2 of the Regulations Concerning
Operating Officers; together with directors, collectively called the “Officers”) of Toyota Motor Corporation (the“Company”) that sets forth the basic rules that, in addition to those outlined in “Guiding Principles at Toyota,”“Toyota Code of Conduct” and other guidelines and internal regulations of the Company, each Officer shallcomply with in the performance of their professional management duties.
Article 2. (Objective)
This Code seeks to ensure honest and ethical conduct by all Officers, as well as their compliance withapplicable laws and regulations.
Article 3. (Scope of Application)
This Code shall be applicable to all Officers.
Article 4. (Disclosure of this Code of Ethics)
This Code shall be appropriately disclosed in accordance with applicable laws and regulations.
Article 5. (Honest and Ethical Conduct)
1.

Each Officer shall act honestly and ethically in the course of any business activity of the Company.

2.

No Officer may engage in or otherwise enter into any act or transaction that gives rise to an actual or
potential conflict of interest between such Officer and the Company without first reporting such matterto the Board of Directors and obtaining prior approval therefrom in accordance with the applicableprovisions of the Companies Act of Japan and the internal regulations of the Company. Such Officer
may not participate in the determination of the Board of Directors resolution relating to the granting ofsuch approval.

Article 6. (Ensuring Fairness and Accuracy of Financial Disclosure; Appropriate Disclosure)1.

The chairman of the board, president, accounting and financial officers and persons performing similarfunctions shall be responsible for ensuring that documents submitted to applicable governmental
authorities and other information made public by the Company with respect to the Company’s financial
position and financial statements are fair and readily comprehensible in content and the method ofpresentation, and that such documents and information are timely disclosed.

2.

The chairman of the board, president, accounting and financial officers and persons performing similarfunctions shall be responsible for establishing and maintaining disclosure controls and internal controls
for documents and information specified in the previous paragraph.

3.

In connection with the preparation of the Company’s financial statements, an Officer may not act in a
way that may cause a material misunderstanding to or otherwise materially mislead any employee or
independent public accountant involved in the preparation of such financial statements.

Article 7. (Compliance with Laws and Regulations)
The Officers shall comply with all applicable laws, rules and regulations, including those related to theprohibition of insider trading, in each of the countries and regions in which the Company operates.

Article 8. (Reporting of Unlawful Acts and Unethical Conduct)
1.

Each Officer shall promptly report to the Board of Directors, Representative Director, Disclosure
Committee, Sustainability Meeting, or other responsible division or person appointed by thesecommittees, in the event that such Officer or other Officers have acted in violation of the applicablelaws or ethics.

2.

Officers may contact the “Speak-up Hotline” set up by the Company at an outside law firm with any
legal or ethical inquiries or to report any breach of applicable laws or ethics. Upon receiving suchreport or other such inquiry, the designated law firm shall conduct necessary investigations and provide
a report or recommendation to the Company while ensuring the anonymity of the person making such acontact. The Company shall then take appropriate measures based on such report or recommendation.

Article 9. (Accountability for Adherence to the Code)1.

Each Officer recognizes that legal compliance and ethical conduct form the basis for all corporate
activities, and is obligated to comply with this Code.

2.

The Company shall take appropriate disciplinary action in accordance with applicable laws and internal
regulations of the Company against any Officer who acts in violation of the Code.

3.

Officers who are subject to disciplinary action pursuant to the previous paragraph may not participate
in any meeting, relating to the determination of such disciplinary action, of the Board of Directors,
Disclosure Committee, Sustainability Meeting, or other investigative committees appointed thereby.

Article 10. (Exemption)
An exemption from the Code shall only be granted pursuant to a resolution of the Board of Directors, andany such exemption shall be appropriately disclosed in accordance with applicable laws.
Article 11. (Amendment)
1.

Any amendment of this Code shall only be effected by a resolution of the Board of Directors.

2.

The Sustainability Meeting shall be responsible for regularly evaluating the appropriateness of thisCode, and for making recommendations relating to any necessary amendments of the Code to theBoard of Directors.

Supplementary Provision
Article 1. (Effective Date)
This Code shall become effective on May 1, 2021.

Exhibit 12.1
CERTIFICATIONS
I, Akio Toyoda, 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 24, 2021
/S/

AKIO TOYODA

Akio Toyoda
President, Member of the Board of Directors
Toyota Motor Corporation

CERTIFICATIONS
I, Kenta Kon, 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 24, 2021
/S/

KENTA KON

Kenta Kon
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, 2021
(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:
Name:
Title:/S/

AKIO TOYODA

Akio Toyoda
President, Member of the Board of Directors

Date: June 24, 2021

By:
Name:
Title:/S/

KENTA KON

Kenta Kon
Member of the Board of Directors

Date: June 24, 2021
(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. 333225851) of Toyota Motor Corporation of our report dated June 24, 2021 relating to the financial statements andthe effectiveness of internal control over financial reporting, which appears in this Form 20-F.
/s/ PricewaterhouseCoopers Aarata LLC
Nagoya, Japan
June 24, 2021