INTEGRATED
REPORT 2024
1
Messages from Management
Message from the Chairman
3
Message from the President
4
Sustainability Issues and Initiatives: Materiality
5
Transition to Company with Audit and
Supervisory Committee Structure
9
Source of Value Creation—
Toyota’s Identity
Group Governance
11
Toyota Group Vision: “Inventing Our Path Forward, Together” 14
Our Founding Spirit
18
Toyoda Principles and Toyota Philosophy
20
Toyota Production System
21
Making Ever-Better Cars
23
Product-Centered Management
23
Making Ever-Better Cars from a Starting Point in Motorsports
26
Toyota and Sports
28
Value Creation Story—
Future Mobility Society Envisioned by
an Automobile Manufacturer
Toyota’s Vision for the Mobility Society
30
Toyota Mobility Concept
30
Product-Centered Management
34
Region-Centered Management
37
Human-Centered Automobile Manufacturing
39
Our Inheritance of Craftsmanship
39
Factories of the Future
40
Empowerment of Diverse Human Resources
41
Lexus LBX
42
Land Cruiser 250
44
Woven City
47
Toyota’s Vision for Carbon Neutrality—
Overview of the Multi-Pathway Strategy
50
Full Lineup for Meeting Diverse Needs
52
Development of Compact Engines
53
Battery Electric Vehicle Strategies
57
Innovative Battery Electric Vehicle Technologies
60
Hydrogen Business Strategies
65
Technologies Supporting Our Hydrogen Business Strategies
67
Commercial Sector Initiatives
68
Development of Hydrogen Engines for Motorsports
70
Carbon-Neutral Fuel Initiatives
71
Circular Economy
73
Toyota’s Aim to Expand the Value of Mobility
75
Software Defined Vehicles (SDVs)
75
Diversifying Mobility: Enhancing Freedom of Movement
79
Value Creation Foundations
Message from the CSO
81
Roundtable Discussion among Outside Officers
83
Dialogues with Shareholders and Investors
90
Corporate Governance
92
Risk Management and Compliance
96
Message from the CFO
97
Capital Strategies
101
Environmental Initiatives
(Disclosure Based on TCFD Recommendations)
102
Human Resource Development
108
Labor—Management Discussions
110
Diversity, Equity, and Inclusion
115
Global Women’s Conference
117
Health and Safety and Social Contribution Activities
119
Respect for Human Rights
120
Value Chain Collaboration
121
Vehicle Safety
123
Commitment to Traffic Safety and Activities of the Tateshina Meeting
and Subcommittees: Transforming Passion into Action
124
Quality and Information Security
125
Intellectual Property and Privacy
126
Corporate Data
Board of Directors and Audit & Supervisory Board Members 127
Operating Officers and Organizational Structure
130
Overview of Operations
131
History
132
Financial Summary (Consolidated)
133
Corporate Information and Stock Information
135
CONTENTS
T OYO TA I N T E G R AT E D R E P O R T 2 0 2 4
Inheritance
We unite as one team regardless
of rank in order to contribute to
our people, society,
and communities.
We develop and learn from
outstanding ideas and cutting-edge
technologies across the world.
We enhance our capabilities utilizing
our own wisdom and create new
value to continue to lead the change.
We focus on work that is
value-adding, with integrity
and practicality, by avoiding
superficial matters.
We build a sense of community and
promote the personal growth of
our people while valuing mutual trust
and equal partnership with
our stakeholders.
We show humility for the support
of our business by our valued
stakeholders and society while also
respecting the diversity of the world.
The Toyota Way
—Combining Software, Hardware, and Partnership to Create Unique Value—
Producing Happiness for All
Transformation into a mobility company
Creating Mobility for All
“For the sake of others”
Strong Production &
Business Operation
Active Participation
for All
Supporting the
Community &
Employment
Coexistence of
Humanity & the Earth
(including carbon
neutrality)
Safety & Reliability
Expanding the Value
of Mobility
“Best-in-town”
“Ever-better cars”
Materiality
(key issues)
Evolution
The Toyota Principles
(DNA / Philosophy)
Value
Mission
Vision
What Toyota
holds dear
“Let’s change the future of cars”
Toyota’s Origins and Materiality (Key Issues)
2
Integrated Report 2024 is intended to communicate to stakeholders Toyota’s policies and
strategies for addressing management issues with the aim of achieving its vision for the
future. More detailed information is available in Toyota’s other reports as well as on the
Toyota Times website and the Company’s other websites. (Published in February 2025)
Note Regarding Publication
The names of certain people, businesses, organizations, etc., that appear in this publication’s text have
been abbreviated.
Reporting Period
This report covers fiscal 2024, the period from April 1, 2023, to March 31, 2024. Information on certain
initiatives in the first 10 months of fiscal 2025, the period from April 1, 2024, to January 31, 2025, is
also included.
Reporting Scope
This report covers initiatives and activities of Toyota Motor Corporation and consolidated subsidiaries, etc.,
in Japan and overseas.
Reference Guidelines
This report was prepared with reference to the International Integrated Reporting Framework issued by the
IFRS Foundation.
Features of PDF
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Non-Financial Information
Financial Information
Sustainability Data Books
Securities Reports, SEC Filings
Corporate Governance Reports
Financial Results Briefings, Business Reports
Sustainability Section of Toyota’s Website
Investor Relations Section of Toyota’s Website
Integrated Reports
Toyota Times Website
Toyota’s Reports and Publications
3
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Even when encountering various day-to-day challenges, we
are able to move forward thanks to all of our stakeholders,
including the customers worldwide who choose Toyota cars
and the shareholders who support our efforts. I would like to
express our sincere gratitude to everyone.
Toyota’s founder, Kiichiro Toyoda, once said, “Rather than
simply making automobiles, we must create a domestic auto-
mobile industry through the intellect and skills of the
Japanese people.” Accordingly, the Company was not estab-
lished simply to manufacture automobiles. Rather, it was also
founded to realize the ideals of “producing happiness for all”
and “building a better future.”
At present, Toyota is taking on the challenge of making a
“full model change” that will transform it into a mobility
company. We declared our intention of transforming into such
a company at the CES consumer technology tradeshow in
2018. The same event served as the stage for our 2020
unveiling of the concept of Woven City as well as for the
2025 announcement of its launch this fall.
At this year’s CES, I was often asked about the meaning of
mobility and about my vision for the future. I recall similar
questions being posed when, having just become Toyota’s
president, I emphasized the need to focus on making ever-
better cars.
The difference between then and now is that our team
has become even more proactive and tackled tasks head-on
in response to my call for the building of a test course for the
mobility of the future. Even when the best way forward was
not entirely clear, they took it upon themselves to conduct
exhaustive analysis, which has borne fruit in the form of
Woven City Phase 1.
The driving force behind Woven City is Woven by Toyota,
Inc., which has a workforce comprising personnel who origi-
nate from more than 60 countries and regions and have
diverse experience, expertise, and values. They began by set-
ting out a vision: “producing happiness for all.” In other words,
the project used one of Toyota’s founding ideals as a starting
point. A common ideal was needed precisely because of the
diverse countries of origin, cultures, and languages among
the personnel.
Today, the world is characterized by an increase in conflict
and division. I believe that our position as a global company
gives us a role to play in such times. Each country and region
has a different culture and lifestyle. If the roads are different,
the ways people use cars also differ. Nonetheless, they are all
our customers. A Toyota hallmark has been the ability to
reflect actual situations in each country and region, respect
differences among them, and develop in harmony with a
diverse world.
“One World, One Dream, One People” is a motto sug-
gested by Sir Philip Craven (currently an outside director
of Toyota) when he was president of the International
Paralympic Committee. We will do everything within our
power to become “One Toyota” and thereby advance steadily
toward the realization of such a world. As we pursue such
ambitious goals, I would like to ask all of our stakeholders
for their support.
Akio Toyoda
Chairman of the Board of Directors
(Representative Director)
Message from the Chairman
Message from the Chairman | Message from the President | Sustainability Issues and Initiatives: Materiality | Transition to Company with Audit and Supervisory Committee Structure
4
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Koji Sato
President,
Member of the
Board of Directors
Message from the President
I would like to express my heartfelt gratitude to all of our
stakeholders for their ongoing support of Toyota’s activities.
I would also like to sincerely apologize for any inconvenience
or concern caused by a series of inspection problems. To pre-
vent their recurrence, we are conducting Companywide
efforts that use on-site problems as the starting points of
improvements. Toyota will continue developing an in-house
culture and environment that is conducive to realizing best
practices.
Approximately 16 years ago, Chairman Akio Toyoda called
on us to make ever-better cars. By formulating and
implementing new solutions as they tackle this task head-on,
Toyota personnel have built the Company’s full product
lineup and the business foundations that support it. Now is
the time for all in-house personnel to rigorously strengthen
our foundations in such areas as safety and quality and to
reaffirm our basic goal, namely, the manufacture and delivery
of better cars that make customers happy.
Cars will be central to the mobility company that we aim
to become under the Toyota Mobility Concept. To ensure that
cars remain an essential part of society, we aim to change
their future by minimizing the negative effects that they have
on society—such as congestion and increases in traffic acci-
dents and pollution—while maximizing the benefits, including
convenience, comfort, and the enjoyment of driving.
With this aim in mind, our fundamental approach will be
to improve the essential features of cars based on expertise
gained from motorsports while nurturing technology seeds
acquired from the exploration of advanced technologies.
Based on this approach, we will not only realize mobility that
seamlessly connects people and cars but also create cars
that are unique to Toyota as a carmaker. We want customers
to continue loving our cars regardless of how much the times
change. Therefore, with undiminished passion, we will pursue
the realization of cars with value that makes mobility even
more enjoyable.
Meanwhile, looking ahead to carbon neutrality and the
future of energy, we will further clarify our multi-pathway
strategy by developing a variety of concrete options that
match each region’s particular fuel and infrastructure needs.
We will also advance a range of other initiatives. For example,
by laying foundations for Software Defined Vehicles (SDVs)
that it is uniquely qualified to create, Toyota aims to elimi-
nate traffic accidents through the utilization of data and AI.
Further, we will build battery and hydrogen value chains with
our sights set on the integration of cars and social systems.
In the fall of this year, we will begin demonstrations at
the Woven City mobility test course. To integrate the evolu-
tion of cars, services, and social infrastructure and to accel-
erate demonstrations and social implementation, we will
intensify collaborations with suppliers and dealers and with
partners outside the automotive industry.
As we continue advancing bold initiatives with a wide
spectrum of like-minded partners, I would like to ask all of
our stakeholders for their support.
Message from the Chairman | Message from the President | Sustainability Issues and Initiatives: Materiality | Transition to Company with Audit and Supervisory Committee Structure
Toyota’s Origins and Materiality (Key Issues)
Inheritance
We unite as one team regardless
of rank in order to contribute to
our people, society,
and communities.
We develop and learn from
outstanding ideas and cutting-edge
technologies across the world.
We enhance our capabilities utilizing
our own wisdom and create new
value to continue to lead the change.
We focus on work that is
value-adding, with integrity
and practicality, by avoiding
superficial matters.
We build a sense of community and
promote the personal growth of
our people while valuing mutual trust
and equal partnership with
our stakeholders.
We show humility for the support
of our business by our valued
stakeholders and society while also
respecting the diversity of the world.
The Toyota Way
—Combining Software, Hardware, and Partnership to Create Unique Value—
Producing Happiness for All
Transformation into a mobility company
Creating Mobility for All
“For the Sake of Others”
Strong Production &
Business Operation
Active Participation
by All
Supporting the
Community &
Employment
Coexistence of
Humanity & the Earth
(Including Carbon
Neutrality)
Safety & Reliability
Expanding the Value
of Mobility
“Best-in-Town”
“Making Ever-Better-Cars”
Materiality
(key issues)
Evolution
The Toyoda
Principles
(DNA / Philosophy)
Value
Mission
Vision
What Toyota
holds dear
“Let’s change the future of cars”
5
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Sustainability Issues and Initiatives: Materiality
Toyota’s Origins
The Toyoda Principles represent the origins of Toyota. As
expressed in “We unite as one team regardless of rank in
order to contribute to our people, society, and communities,”
our engagement in work that benefits the world and its
people and our contributions to people’s happiness and
social progress through car manufacturing constitute
values and a code of conduct that Toyota holds dear.
Reflecting on our origins, we established “producing
happiness for all” as Toyota’s mission under the Toyota
Philosophy, which was formulated in 2020. To contribute
to the happiness of our customers and all our stakeholders
around the world, we aim to contribute to the sustainable
development of society and the Company. In other words,
we aim to implement sustainability management.
Formulation of Materiality
During the 14 years that Chairman Akio Toyoda served as
president, he sought to deeply ingrain the values of “making
ever-better cars,” “best-in-town,” and “for the sake of others”
as well as the essence of what makes us Toyota, which in turn
formed the foundation of Toyota’s products and businesses.
Message from the Chairman | Message from the President | Sustainability Issues and Initiatives: Materiality | Transition to Company with Audit and Supervisory Committee Structure
6
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Carbon Neutrality and
Expansion of the
Value of Mobility: Two
Principles of the
Toyota Mobility Concept
Sustainability Issues and Initiatives: Materiality
Looking ahead, we must establish a pathway for more
robust growth strategies and our sustainability management
and clarify the path toward reaching this vision if we are to
achieve our mission of “producing happiness for all.”
To that end, we aim to pursue our transformation into a
mobility company that offers freedom of movement for all,
without leaving anyone behind. Accordingly, we have estab-
lished Expanding the Value of Mobility, Safety & Reliability,
Coexistence of Humanity & the Earth, Supporting the
Community & Employment, Active Participation by All, and
Strong Production & Business Operation as our six key issues
(materiality) in achieving our vision for transforming into a
mobility company, taking into account the perspectives of
our stakeholders, including customers, local communities,
business partners, and employees.
Ideas Expressed in “Let’s Change the Future of Cars”
We encapsulated our ideas regarding automobile manufac-
turing, a core activity for our transformation into a mobility
company, in our shared motto “Let’s change the future
of cars.”
We want to ensure that automobiles continue to serve as
a form of mobility that benefits society and brings smiles to
people around the world well into the future. To that end, we
will work to minimize the detrimental effects that cars have
on society—including traffic accidents, pollution, and con-
gestion—while maximizing the emotional value of cars—
including convenience, comfort, and the enjoyment of
driving—and boosting their positive impact.
To realize our aspirations, we have formulated the Toyota
Mobility Concept, which summarizes three specific initiatives
for achieving our transformation into a mobility company.
Placing cars at the center, we will focus our efforts on
enhancing the mobility of data and energy while pursuing
their integration with social systems. By doing so, we will
strive to create new mobility value. For Toyota, transforma-
tion into a mobility company means creating a new industrial
structure that benefits the development of a mobility society
through the evolution of the automobile. We will lead the
transformative journey to shape the future with a sense of
mission, working together with business partners who share
the same purpose.
We are now in an era in which it is hard to predict the
future. That is why we believe that persistent and purposeful
action makes a difference. In the spirit of hyaku-setsu futo
(indefatigability), one of the cherished phrases of our
founder, Sakichi Toyoda, we will live up to our convictions and
challenge ourselves to change the future of cars.
In formulating our materiality (key issues), we placed
emphasis on the following two ideas.
• Ensuring that these issues are thoroughly understood inter-
nally and serve as a guidepost for all employees, thereby
leading to concrete actions
• Ensuring that our responses to these issues help stakehold-
ers understand and relate to the vision we have for ourselves
as a company and how we aim to contribute to society
To ensure that our responses to materiality lead to con-
crete actions by employees, we have grouped the key issues
presented on the previous page into specific categories.
Using a dual-axis framework, we created a materiality map
Message from the Chairman | Message from the President | Sustainability Issues and Initiatives: Materiality | Transition to Company with Audit and Supervisory Committee Structure
7
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Message from the Chairman | Message from the President | Sustainability Issues and Initiatives: Materiality | Transition to Company with Audit and Supervisory Committee Structure
Sustainability Issues and Initiatives: Materiality
Mission
DE&I
Producing Happiness for All
Very High
High
Impact materiality (Toyota’s impact on the environment and society)
Very High
Financial materiality (Financial impact on Toyota)
Biodiversity
Risk
management
Transparency
and
accountability
Energy
Compliance
Human
resource
development
Health
and
safety
Workforce
in the
value chain
Respect
for
human
rights
Circular
economy
Privacy
Dialogue
with
employees
Labor
practices
Product
safety
and quality
Mobility
for all
Climate
change
Expanding the Value
of Mobility
Mobility for all
With the aim of realizing a mobility society where everyone can move freely, happily, and comfortably, we
will provide mobility options to customers around the world that are in tune with a diverse range of energy
situations and customer needs.
BEVs offer new possibilities in such ways as serving as mobility that transports electricity, collectively
acting as an energy grid, and enhancing society’s energy security. Toyota will build a CO2-free hydrogen
supply chain that starts from Woven City as well as demonstrate potential uses of hydrogen in our daily
lives.
By promoting the development of Software Defined Vehicles (SDVs), we will form connections between
cars, people, goods and services, and information. In this way, we will not only enhance the effectiveness
and productivity of people’s social activities but also offer safety and security that help people live in the
manner they so choose.
As part of our efforts to “make ever-better cars” from the starting point of motorsports, we will continue
to promote the development of new technologies and work to enhance our existing ones. At the same
time, we aim to broaden the foundation of motorsports culture, bringing the joy of driving to even more
people.
Safety & Reliability
Product safety
and quality
Privacy
Transparency and
accountability
To achieve a safe mobility society, Toyota believes it will be important to implement an integrated three-
pronged initiative involving people, vehicles, and the traffic environment as well as pursue real-world
safety by learning from actual accidents and incorporating that knowledge into vehicle development. We
have adopted the Integrated Safety Management Concept as the basic philosophy behind our safety
technologies and are promoting technological development based on this concept.
We will enhance safety, peace of mind, and satisfaction for customers by improving the quality of each
employee’s work, which underpins the quality of our products, sales activities, and services.
The targets of cyberattacks include confidential information, information systems, and plant and vehicle
control system networks, such as those for onboard devices, as well as supply chains. We strive to protect
information assets against cyberattacks and thereby ensure customer safety and peace of mind.
Coexistence of
Humanity & the
Earth (Including
Carbon Neutrality)
Climate change
Energy
Circular economy
Respect for
human rights
Biodiversity
Guided by our multi-pathway strategy, we have made it our mission to work toward the realization of a
carbon-neutral society in which no one is left behind.
As the first step in carefully managing valuable resources, we are working to build new ecosystems
together with all of our stakeholders through development, production, sales, and recovery activities
based on a circular economy.
Guided by our Human Rights Policy and Supplier Sustainability Guidelines, we will implement human
rights due diligence and appropriate educational activities on human rights.
Supporting the
Community &
Employment
Workforce in the
value chain
In collaboration with our suppliers, dealers, and other business partners, we will promote activities based
on our customer first policy. We will also examine employment and workforce initiatives in response to
changes in the business environment, such as electrification, by pursuing various transitions that include
the entire value chain.
Active Participation
by All
Human resource
development
DE&I
Labor practices
Dialogue with
employees
Health and safety
We place value on each employee’s ambition to make the workplace better and strive to establish frame-
works that allow them to discover and pursue opportunities for individual growth. By doing so, we will
develop human resources who can think for themselves and continue to take action for the sake of
others, while building strong connections with their peers.
In order to promote “Active Participation by All” by maximizing the diverse talents, strengths, and abilities
of each team member to deliver better value to our customers, we are working to bolster systems and ini-
tiatives from the perspective of establishing employee-friendly and fulfilling work environments. We are
also striving to enhance the awareness of all Toyota employees.
We will strive to improve the “life well-being” and “work well-being” of all employees so that they can
feel a sense of enjoyment and happiness through their involvement in car manufacturing.
Toyota cherishes the ideals of sports, including taking on challenges, never giving up, and promoting
teamwork and respect. These ideals serve as the backbone of our corporate culture. By promoting
sports-related initiatives, we aim to realize an inclusive society where all people have the opportunity to
challenge their own perceived limits.
Strong Production &
Business Operation
Risk management
Compliance
Drawing on the improvements we have made to existing functions, we are working to apply these
improvements in our development and sales activities as well as our after-sales services. In this way, we
will pursue comprehensive operational reforms together with internal and external partners.
In an era when the business environment is undergoing massive changes and constant innovation is
required, we will bolster our global risk management system to address increasing uncertainties that
arise in such times.
Based on the idea of placing the right person in the right position, we will pursue innovations in an agile
and continuous manner with the aim of achieving sustainable growth and stable, long-term corporate
value enhancement. By doing so, we aim to establish an optimized management structure for a Global
Toyota.
To achieve our mission of producing happiness for all, we will fulfill the corporate social responsibility
expected of Toyota by not only complying with laws but also acting with integrity in accordance with the
Toyota Code of Conduct.
Note: As a result of a dual-axis evaluation, “biodiversity,” “pollution,” “water security,” and “animal welfare” were not established as material issues.
Main Initiatives
Materiality (Key Issues)
assessing the importance of these issues based on Toyota’s impact on the environment and
society (impact materiality) and on the impact of the environment and society on Toyota
(financial materiality).
The upper-right quadrant of this map, which represents areas of the greatest importance,
highlights the following two items.
• Mobility for all: Provision of sustainable mobility for all, leaving no one behind
• Product safety and quality: A core principle valued by Toyota that serves as a basis for “making
ever-better cars”
In addition, the map includes items pertaining to the environment, starting with climate
change, and items concerning human capital within the Company and across the value chain.
The materiality map displays our pathway toward “producing happiness for all,” which is our
mission as a monozukuri (manufacturing) company that we aim to achieve by providing the free-
dom of movement to customers in each region through products that they truly need based on
their feedback. The map also contains important sustainability elements to be considered as we
pursue this mission.
By fulfilling our mission, we aim to create an even better society by using our technological
capabilities to overcome the many social issues facing the world today.
8
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
President Koji Sato has identified the follow-
ing key initiatives to carry out in order to
address our material issues. These key initia-
tives were selected with a focus on the next
decade and beyond and because, although
they should be tackled immediately, they
span multiple functions or present chal-
lenges in terms of decision-making on an
individual corporate function basis, due to
such factors as a lack of short-term cost-
effectiveness. Sustainability issues cannot be
resolved overnight, and it will take a certain
amount of time before our initiatives result in
tangible improvements. At Toyota, we place
the utmost importance on pursuing practical
solutions to sustainability issues, guided
by the idea of taking action today for the
people of tomorrow. Together with all Group
employees, we will strive to address our
material issues while taking steps in our
day-to-day work to achieve our vision for
the future.
Sustainability Issues and Initiatives: Materiality
Major Themes of Sustainability Initiatives
Promoting the active role of
diverse human resources
At Toyota, we aim to promote “Active Participation by All” by maximizing the diverse talents, strengths, and
abilities of each team member to deliver better value to our customers. To that end, we are working to bolster
systems and initiatives from the perspective of establishing employee-friendly and fulfilling work environ-
ments. We are also striving to enhance the awareness of all Toyota employees. Moreover, to empower female
employees, we aim to eliminate differences in the turnover rate between male and female employees, which is
a significant issue across the automotive industry.
Dramatically improving plant
environments and reforming
workstyles
Amid the ongoing issue of the declining workforce in Japan, we will transform the environment of our plants
with the aim of realizing sustainable monozukuri centered on productivity and fulfillment. In this way, we will
create attractive work environments that allow employees to experience the enjoyment and happiness of
manufacturing.
Strengthening initiatives
toward carbon neutrality,
including for vehicle ownership
Guided by the multi-pathway strategy, we have made it our social mission to realize a carbon-neutral society
that leaves no one behind and are advancing initiatives therein. For us to achieve carbon neutrality, we must
focus on not only new vehicles but also vehicles customers already own and use. By demonstrating leadership,
we will lay the groundwork toward realizing a carbon-neutral world.
Pursuing comprehensive
corporate DX
Toyota aims to realize an affluent mobility society where cars, people, goods and services, and information are
all interconnected in a manner that delivers greater peace of mind and convenience in people’s lives. To pursue
a broad range of efforts and accelerate innovations aimed at achieving such a society, we must establish an
information infrastructure via digital transformation (DX). As the first step in doing so, we will build a compre-
hensive information management system that goes beyond corporate functions to form linkages between
everything from development to sales and after-sales services.
Promoting a circular economy
The automotive industry requires vast resources, and it is therefore essential that we promote a circular econ-
omy from various perspectives, including the environment, human rights, and economic security. As the first
step in carefully managing valuable resources, we are working to build new ecosystems together with all of
our stakeholders through development, production, sales, and recovery activities based on a circular economy.
Message from the Chairman | Message from the President | Sustainability Issues and Initiatives: Materiality | Transition to Company with Audit and Supervisory Committee Structure
9
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
2013: 3
2011–2016: 11–16
2024: 10
Transition to Company with Audit and Supervisory Committee Structure
Note: Toyota plans to transition to the company with audit and supervisory committee structure, subject to approval at the Ordinary General Shareholders’ Meeting scheduled to be held in June 2025.
Over the past several years, Toyota has been transforming its approach toward work based on its
own unique identity. Centered on the concepts of “making ever-better cars” and “best-in-town,”
we have promoted autonomous growth and long-term improvements in corporate value by
encouraging frontline employees to think and act with autonomy. This approach heightened the
appeal of our products while transforming Toyota into a company that is responsive toward cus-
tomers around the world.
Corporate reforms have been a constant on our path of ongoing transformation. To further
such reforms and accelerate Toyota’s transformation into a mobility company, it was decided
that, in 2025, the Company will transition from the company with board of company auditors
structure described in the Companies Act of Japan to the company with audit and supervisory
committee structure defined in the same law.
The transition will further invigorate the Board of Directors by facilitating discussions in
which all inside and outside Board members participate, irrespective of title, while further expe-
diting decision-making through the delegation of authority to the executive team and strength-
ening the monitoring function of the Board of Directors.
Major reforms
Number of members of the Board of
Directors
Of whom, outside members of the
Board of Directors
Members of the Board of Directors who
are Audit & Supervisory Board members
Of whom, outside Audit &
Supervisory Board members
Numbers of
executives
Operating officers*
Advisors and senior
advisors
Committees
Executive Appointment
Meeting and Executive
Compensation Meeting
* Executive vice presidents, senior managing officers, and managing officers prior to introduction of executive officer system
2024: 4
2011–2018: Approx. 50
64
27
2018: 9
2011–2017: 55–68
7
4
2014: 6
2014: 3
Invigoration of discussions at meetings of the Board of Directors,
enhancement of transparency
Product- and region-centered management
Invigoration of discussions at meetings of the Board of Directors,
enhancement of monitoring functions
2011: Reduction of number of
members of the Board of Directors
2013: Appointment of
outside members of
the Board of Directors
2017: Outside members accounting for
half of members of the Board of
Directors
2016: Introduction of in-house company system
2025: Transition to company with audit
and supervisory committee structure
2019: Introduction of executive officer system
2020: Abolishment of advisors and
senior advisors
2025
2020
2015
–2010
(Abolished)
2023: Revision of management team
22 members in 2019; 8 in 2024
2024: Clarification of roles and expectations of outside
members of the Board of Directors
Revision of independence criteria
2015: Establishment of Executive Appointment
Meeting and Executive Compensation Meeting
Message from the Chairman | Message from the President | Sustainability Issues and Initiatives: Materiality | Transition to Company with Audit and Supervisory Committee Structure
2019: Outside members of the Board of Directors accounting for a majority
10 (five outside members)
Of whom, four Audit & Supervisory
Board members
(three outside members)
Abolished
2025: 9
10
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Transition to Company with Audit and Supervisory Committee Structure
Message from the Chairman | Message from the President | Sustainability Issues and Initiatives: Materiality | Transition to Company with Audit and Supervisory Committee Structure
Key Focuses of Transition to Company with Audit and Supervisory Committee Structure
All inside and outside members who comprise the Board
of Directors will further invigorate the Board by participating
in decision-making and oversight, irrespective of title.
Post-Transition Structure (Company with Audit and Supervisory Committee)
Board of Directors
Appointment/
Dismissal
Reporting
Auditing
Submission/
Reporting
Oversight
Auditing
Executive Appointment Meeting
Executive Compensation Meeting
Appointment/
Dismissal
Input
Auditing
Coordination
Appointment/
Dismissal
Coordination
Internal Audit
Department
Shareholders’ Meeting
Operational execution
Sustainability Meeting
Product and Design Decision Meeting
Governance Risk
Compliance Meeting
Operating officers
Operating officer meetings
Head office
Business units
In-house
companies
Audit and Supervisory Committee
Delegation of authority
Accounting auditor
Auditing
Enhancing
coordination
3
1
5
5
Current Structure (Company with Board of Company Auditors)
Inside members
Outside members
Auditing
Board of Directors
Appointment/
Dismissal
Reporting
Auditing
Auditing
Auditing
Submission/
Reporting
Appointment/
Dismissal
Coordination
Coordination
Appointment/
Dismissal
Coordination
Accounting auditor
Shareholders’ Meeting
Operational execution
Sustainability Meeting
Product and Design Decision Meeting
Governance Risk
Compliance Meeting
Operating officers
Audit & Supervisory Board
Internal Audit
Department
Executive Appointment
Meeting
Executive Compensation
Meeting
Auditing
Operating officer meetings
Head office
Business units
In-house
companies
Oversight
Membership
Members of the Board
of Directors
10
(Of whom, four outside members and one woman)
Audit & Supervisory
Board members
6
(Of whom, three outside members and two women)
Delegation of
authority
No delegation of authority for important operational execution matters to
executive team
Auditing
activities
Audits emphasizing actual sites and items
Membership
Members of the Board
of Directors
10 (five outside members and two women)
Of whom, four members of the Board of Directors who are Audit and
Supervisory Committee members (three outside members and one woman)
Members of the Audit &
Supervisory Board
Abolished
Delegation of
authority
Delegation of authority to executive team to further expedite decision-making
and strengthen monitoring
Auditing
activities
Continuation of audits of actual sites and items and improvement of organiza-
tional audits through enhanced coordination with Internal Audit Department
Inside members
Outside members
3
3
4
6
• Establish an Audit and Supervisory Committee comprising certain members chosen from the Board of Directors as a company with audit and
supervisory committee structure
• In addition to auditing directors’ execution of duties, Audit and Supervisory Committee members have voting rights and participate in meetings of
the Board of Directors as directors to determine whether business is being executed appropriately.
• The transition will facilitate the delegation of decision-making on important matters of business execution to the executive team by the Board of
Directors, thereby expediting decision-making and allowing the Board to focus on oversight.
11
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Group Governance
Issues have been discovered regarding the model certifica-
tion application processes that have been used by Hino
Motors, Ltd., Daihatsu Motor Co., Ltd., Toyota Industries
Corporation, and Toyota Motor Corporation since 2022.
The Toyota Group offers its sincere apologies for the con-
cern and inconvenience that the issues discovered have
caused for the customers and other stakeholders who have
trusted it thus far. We are firmly committed to taking
Groupwide action to prevent the recurrence of such issues.
Group Governance Reinforcement Initiatives
Toyota’s Group Governance Policy
To ensure that work is done correctly, we emphasize the
importance of the prevention of incidences and the spillover
thereof in a manner akin to quality control in manufacturing.
Incidence prevention initiatives are a means of fostering a
corporate culture in which everyone works correctly based on
shared values and rules, and doing so the Toyota Way serves
as our foundation. Such initiatives change people’s attitudes
over time, and we believe it is important for members of
senior management to repeatedly demonstrate our vision
and values and to continue communicating them to the
genba (front lines) through their own actions.
As part of our spillover prevention initiatives, we are devel-
oping frameworks and systems to ensure that operations are
halted immediately in the event of unforeseen circumstances.
Through comprehensive measures in terms of corporate
culture, frameworks, and systems, we will pursue an effective
and distinctly Toyota approach toward governance.
Toyota Group Vision
Chairman Akio Toyoda unveiled the Toyota Group Vision in
January 2024. By outlining the direction the Toyota Group
should take and putting forth a vision and set of values to
which all Toyota Group members can refer, we aim to
empower everyone at the genba (front lines) to engage in
autonomous action that is consistent with the common
vector defined for the Group.
Since announcing the vision, we have been advancing
numerous initiatives to entrench this vision and the associ-
ated values throughout the organization.
At the Groupwide level, Chairman Toyoda met with frontline
leaders at Group companies to take part in frank discussions
and provide advice. He also attended meetings of Daihatsu
dealer representatives to gather input from dealers and cus-
tomers so as to better understand actual conditions and issues
on a genchi genbutsu (on-site, hands-on experience) basis.
At Toyota Motor Corporation, meanwhile, steps have been
taken to share our vision and values among members of man-
agement and frontline staff through the ongoing issuance of
messages from President Koji Sato to employees, labor–
management discussions, and regular visits to frontline orga-
nizations by management. Via these concerted efforts, we
seek to foster an appropriate workplace environment.
Certification-Related TPS Self-Study Activities
An important part of preventing the recurrence of model cer-
tification application issues is ensuring that our initiatives are
effective from the perspective of actual functionality, rather
than simply focusing on creating perfect recurrence preven-
tion frameworks.
For this purpose, Akio Toyoda kicked off Toyota
Production System (TPS) self-study activities related to the
certification process in February 2024. Through these activi-
ties, we are reviewing our work processes in their entirety and
at a very fundamental level based on the shared values of
TPS. We thereby aim to shorten lead times and install frame-
works that will ensure prompt detection and immediate
action in the event of an abnormality. TPS self-study activi-
ties are being advanced through a joint effort by members of
senior management and frontline staff with the goal of
encouraging everyone to reassess and revise their approach
toward work and to enhance the capabilities of both our
people and organizations.
These activities were first enacted in September 2024
at Hino, Daihatsu, and Toyota Industries before being
expanded to Toyota Motor, Toyota Auto Body Co., Ltd.,
and Toyota Motor East Japan, Inc. Representatives of the
Toyota’s Group Governance Policy
Sustainability Improvement of Corporate Value
Correct approach toward work
Confirmation and protection of Toyota’s
identify
Prevention of leaks
Vision-driven management, culture
of autonomous genba
Prevention of incidents
Distinctly
Toyota Systems and
Frameworks
Toyota’s Culture of
Making-Ever Better Cars
Correct
Work
Group Governance | Toyota Group Vision: “Inventing Our Path Forward, Together” | Our Founding Spirit | Toyoda Principles and Toyota Philosophy | Toyota Production System | Making Ever-Better Cars | Toyota and Sports
Mass Production
of Happiness
12
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
six companies—including their presidents, executive vice
presidents, relevant officers, supervisors, and frontline staff
members—are sharing information on issues in a manner
that transcends the boundaries of companies and areas
of operation.
The self-study activities revealed that the need to
compile certification applications that could require up to
1,300 pages for a single vehicle model combined with an
overemphasis on fulfilling schedules was creating significant
pressure, and the associated burden was being placed on
certification sites. This situation was a source of concern with
regard to our ability to perform tests appropriately given the
pressure of one-shot tests.
Recognizing this pressure, Chairman Toyoda addressed
certification sites by explaining how the investigations had
revealed many factors that were previously not readily appar-
ent and how this newfound understanding represented an
important step forward. He also stated his desire to foster a
culture that focused on the causes of incidents, rather than
the people involved.
System and Framework Initiatives
Toyota is moving ahead with effective system and framework
initiatives for reinforcing Group governance.
For example, in October 2023 we redefined our prior code
of conduct to create the Toyota Code of Conduct, a shared
code observed by the more than 380,000 Toyota Group
employees at all subsidiaries worldwide. In addition, video
messages by President Sato are distributed to employees to
ensure that expectations are effectively communicated to
everyone in the Group.
We have also set up whistleblowing hotlines, including the
All Toyota Speak Up hotline, on a global basis. Such whistle-
blowing hotlines are available at all subsidiaries around the
world. Toyota Motor Corporation functions as the secretariat
for hotlines in Japan, whereas North American subsidiary
Toyota Motor North America, Inc., acts as the secretariat for
overseas hotlines. We are promoting understanding and
awareness of these hotlines among employees in order to
provide a safe working environment.
Group Governance
Model Certification Application Process
Before beginning mass production of a new automobile model,
an automobile manufacturer must first confirm that the vehicle
meets the necessary safety and environmental standards.
However, when considering the burden placed on testing equip-
ment and automobile manufacturers, it is not feasible to test
each of the thousands or even hundreds of thousands of vehi-
cles that may be manufactured.
This is the reason why the Japanese government has intro-
duced a model certification process through which manufac-
turers can test and verify that a given model meets the
necessary safety and environmental standards. If approval is
received through this process, the manufacturer is able to
mass-produce vehicles of the same model without testing each
individual vehicle. The model certification process is illustrated
in the diagram below. This system provides options for certifica-
tion by manufacturers and certification by government agen-
cies. Certification by manufacturers requires an automobile
manufacturer to exercise their own responsibility to verify that
a vehicle meets the necessary standards before producing and
selling the vehicle. In the case of certification by manufactur-
ers, government authorities may randomly select on-market
vehicles to perform their own tests if deemed necessary.
Certification by government agencies, meanwhile, involves
either inspectors from certification agencies observing tests at
manufacturers or manufacturers conducting their own tests to
be submitted to inspection agencies. The areas of the process
in which the model certification application issues occurred are
indicated in red in the diagram below (“Certification tests by
manufacturer” and “Submission of viable certification data
from development tests”). Given the complexity of this process,
action is being taken across the Toyota Group to prevent the
recurrence of such issues. These efforts are being advanced
through the TPS self-study activities related to the certifica-
tion process kicked off by Akio Toyoda, representative and
chairman of the Toyota Group.
In these activities, the TPS framework is being utilized to
track all processes ranging from certification tests to planning,
development, and mass production. We thereby aim to elimi-
nate complexities and difficulties that could lead to miscon-
duct and to create a system that allows for immediate
detection of and prompt response to abnormalities.
Vehicle
Development
Manufacturer
Certification
Application
MLIT
Application
Document lists
Quality control
guidelines
Specification
sheets
Exterior
schematics
Written pledges
Others
Development
Testing
Manufacturer
Development
test goals
Collision safety
Exhaust
Fuel efficiency
Engine output
Others
Certification
Tests (Inspections)
National Agency
for Automobile
and Land
Transport
Technology*
* Independent
administrative
agency under
control of MLIT
Safety and
environmental
inspections
Document
screening
Vehicle and
equipment tests
Collision tests
Exhaust tests
Fuel efficiency
tests
Others
Model
Certification
MLIT
Mass production
possible without
testing each indi-
vidual vehicle
Loss of ability to conduct
mass production if model
certification is revoked by MLIT
Reapplication
and reinspection
4
5
3
2
1
Certification Patterns
Certification system
Random tests of
on-market vehicles by
government authorities
Confirmation of compli-
ance with standards
before production/sales
Certification by
manufacturer
Certification by
government agency
Observation of tests at manufacturers by inspectors
from certification agencies
Certification tests by
manufacturer
Submission of
viable certification
data from
development tests
Confirmation of
manufacturers’ tests
by inspection agencies
Group Governance | Toyota Group Vision: “Inventing Our Path Forward, Together” | Our Founding Spirit | Toyoda Principles and Toyota Philosophy | Toyota Production System | Making Ever-Better Cars | Toyota and Sports
13
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Group Governance
Furthermore, staff with specialized knowledge pertaining
to relevant business areas, human resources, and legal affairs
now take part in audits of subsidiaries alongside the Internal
Audit Department. This approach allows for various perspec-
tives to be adopted when confirming the conditions at subsid-
iaries in relation to governance, compliance, risk management,
administrative management, labor management, and corpo-
rate culture. We also use these audits as a training opportu-
nity that enables staff from specialized function divisions to
learn important corporate governance principles by engaging
with them in practice at subsidiaries. The scope of these
audits is being gradually expanded, and such audits were
conducted at 17 Group companies, including major domestic
subsidiaries, in 2024.
Toyota also emphasizes coordination and communication with
and among Group companies. In 2024, we organized three morning
meetings of the leaders of 18 Toyota Group companies as well as five
afternoon meetings of corporate division representatives. In addition,
five meetings of leaders from 24 parts and distribution companies
were arranged. By encouraging multilayered communication at all
levels of the organization, we are facilitating the sharing of concerns
and thoughts among individuals at all Group companies. We also
conduct internal control training for officers of subsidiaries and
provide these officers with information on case studies at other
companies as part of our practical and concrete training programs.
Meanwhile, subsidiary Daihatsu has established the GRC
Committee to make governance, risk management, and compliance
decisions that pertain to its entire organization and to promote con-
crete measures based on these decisions. The first meeting of this
committee was convened in May 2024. This subsidiary has also cre-
ated its Governance, Risk and Compliance Management Division to
expand its staff of specialists with regard to governance, risk man-
agement, and compliance and has thereby significantly augmented
its capacities in these areas. Governance, risk management, and
compliance initiatives at Daihatsu are being advanced by members
of this company together with specialists dispatched from Toyota.
At Toyota Motor Corporation, the Governance, Risk, and
Compliance Committee was established in June 2024 to implement
initiatives for bolstering the management frameworks of the
Company and of Toyota Group companies.
Model Certification Application Issues at Toyota
Based on the instructions issued by the Ministry of Land,
Infrastructure, Transport and Tourism (MLIT), Toyota began
investigating its model certification application processes
over the past decade in January 2024. These investigations
revealed six cases pertaining to seven vehicle models over the
last 10 years, including some that are no longer produced, in
which tests were performed based on methods that did not
comply with government-prescribed standards. The results of
the investigations were reported to the MLIT in May 2024.
Following this, in July 2024, the MLIT issued a correction
order to Toyota urging it to make drastic reforms to ensure
appropriate certification operations. Specific areas cited as
needing improvement included certification process regula-
tions and procedures and management’s involvement in certi-
fication processes. Furthermore, an on-site investigation by
the MLIT found, in addition to those reported in May 2024,
eight new cases involving seven vehicle models that were not
certified in accordance with the prescribed procedures.
Toyota acknowledges that management was not suffi-
ciently involved in the model certification application pro-
cesses and that there are multiple areas requiring
improvement concerning data management systems and fun-
damental certification provisions such as process regulations
and procedures. Based on this recognition, we submitted a
recurrence prevention report to the MLIT in August 2024.
Toyota is taking a three-pronged approach toward recurrence
prevention initiatives focused on human resource development,
manufacturing processes, and foundation reinforcement. Through
a united effort by management and the front lines, we are review-
ing our systems and frameworks as we seek to develop a corporate
culture that supports appropriate certification processes and
facilitates the quick detection and correction of abnormalities.
The foundation for our recurrence prevention initiatives is
labor–management communication.
Guided by the shared labor–management value of the
Company wishing for the happiness of its employees who in
turn hope for the development of the Company, Toyota has
been advancing forward-looking initiatives based on the
common understanding that its people are its greatest asset.
These initiatives were shaped by labor–management discus-
sions, and we took steps to confirm concrete measures, which
were advanced through coordination between labor and
management, to facilitate swift reforms.
In 2024, frank discussions were held with the goals of cre-
ating leeway at frontline organizations and cementing our
foundations so that we can create today the workstyles we
will use a decade from now.
Toyota organizes numerous venues for labor–management
discussions, including meetings of the Labor–Management
Council and the Joint Labor Management Round Table
Conference. More than 200 such venues were arranged in 2024.
We emphasize two-way communication between labor
and management and see frank and exhaustive discussions as
a means of accelerating the implementation of new systems
and frameworks and the reform of our corporate culture.
Moreover, we seek to reach out to Toyota employees who
are unable to voice their opinions during labor–management
discussions through well-being surveys, the All Toyota Speak
Up hotline, and other means.
Approaches
Focuses
Initiatives
Human resource
development
Culture cultivation
1. Frequent messages from president and communication with front lines by
president
2. Regular inspections of and communication with certification sites by
management
Compliance
awareness
promotion
3. Introduction of training programs for ongoing compliance improvements
and awareness fostering in relation to certification processes
4. Fostering of understanding and compliance awareness with regard to
certification processes among development and certification staff through
Customer Quality Learning Center exhibits and lectures
5. Measures for informing staff that certification tests are underway (uniforms, etc.)
Manufacturing
processes
Appropriate
certification
scheduling
6. Revision of regulations pertaining to certification processes
Proper automobile
design and testing
(regulation)
7. Introduction of facility operation regulations to ensure sufficient records
8. Utilization of digital technologies to reduce human errors and workloads
9. Improvement of transparency and soundness of certification processes
Foundation
reinforcement
Management
awareness fostering
10. Introduction of model certification system training programs for managers
and executives
Support for collision
safety testing sites
11. Appointment of collision experts to support development and certifi-
cation sites
Certification site
enhancement
12. Allocation of human and physical resources to certification organizations
13. Enhancement of frontline oversight by chief risk officer, chief technology
officer, and global chief quality officer
Improvement of
certification
process accuracy
14. Bolstering of certification process auditing systems
Note: TPS self-study activities launched in September 2024 to shorten lead times and foster culture with focus on underly-
ing issues with development processes
Group Governance | Toyota Group Vision: “Inventing Our Path Forward, Together” | Our Founding Spirit | Toyoda Principles and Toyota Philosophy | Toyota Production System | Making Ever-Better Cars | Toyota and Sports
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
14
Toyota Group Vision:
“Inventing Our Path Forward, Together”
On January 30, 2024, Chairman Akio Toyoda
addressed an audience of chairmen, presidents, and
frontline leaders from 17 Toyota Group companies at
the Toyota Commemorative Museum of Industry and
Technology, outlining his vision for the Group’s future
direction and reflecting on the aspirations of our
predecessors and on the core duty of an automobile
manufacturer. Chairman Toyoda also set forth the
attitudes needed to be embraced by Toyota Group
employees in the future.
Committing to our next step forward
One of the reasons I invited everyone here to the
Commemorative Museum of Industry and Technology,
which is rich in Toyota Group history, is because I
wanted us all to consider what lies ahead.
Let’s follow the threads of history back to August 27,
1945, less than two weeks after the war’s end. On this
day, the Toyota Group’s holding company, Toyoda
Sangyo, held its first postwar board meeting.
All those in attendance had sustained the Company
since its founding.
When they met immediately after the war, what did
they discuss?
At that time, the Toyota Group was making a major
shift in its business areas, from the textile industry to
automobiles and machinery manufacturing, primarily
for aircraft production.
With the end of the war, demand for machinery
manufacturing instantly dried up, and the Group
urgently needed to figure out how it would operate.
This board meeting was of tremendous significance in
determining the direction of the entire Toyota Group.
The session was held not at the Toyoda Sangyo head
office, but rather at Toyoda Automatic Loom Works,
the Group’s spiritual core.
When faced with a crisis, everyone comes together
and returns to the Company’s origins.
I believe that’s how our forefathers overcame
numerous crises.
And now the same is needed of us.
Today, I stand here in the hope that, on this day,
the Toyota Group will commit to our next step.
Toyota Unveils Group Vision—Chairman
Toyoda: “I Will Lead the Transformation”
“Inventing Our Path Forward, Together”—
Chairman Toyoda Presents His Vision for Toyota
Group Governance | Toyota Group Vision: “Inventing Our Path Forward, Together” | Our Founding Spirit | Toyoda Principles and Toyota Philosophy | Toyota Production System | Making Ever-Better Cars | Toyota and Sports
15
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
“Inventing Our Path Forward, Together”
Passion for invention is the Toyota Group’s
true starting point.
The chart below depicts the Toyota Group’s lineage,
starting with the establishment of Toyoda Shoten in 1895.
Eager to ease the burden on his mother, Sakichi Toyoda
immersed himself in researching weaving machines, and
in 1890 he invented the Toyoda Wooden Hand Loom.
Thinking of others, learning, honing skills, making things,
and bringing smiles to people’s faces—I believe that this
passion and attitude toward invention is truly the
Toyota Group’s starting point.
From there, Toyoda Boshoku and Toyoda Automatic
Loom Works were established, extending the Company
vertically like the warp threads on a loom.
In the 1930s, Kiichiro Toyoda began to get actively
involved in the business.
“It is not just about making automobiles. With Japanese
ideas and skills, we must create an automobile industry
for Japan.”
At that time, the technological standards of Japanese
industry were lagging far behind the West.
He, therefore, sought to revamp the country’s industrial
base by producing automobiles domestically.
In addition to automobiles, Kiichiro studied aircraft. He
is said to have told his son, Shoichiro, to “build a house
no fire can burn down.”
What Kiichiro wanted to create was happiness for the
people of Japan, and a future that allowed the next
generation to dream.
Of course, neither an automobile nor the future can be
created by a single person.
We need partners to share the struggle, to encourage
and elevate each other.
Many companies in the parts, steel, rubber, and electronics
industries started following in Toyoda’s footsteps.
Not all bore the Toyoda name.
Despite their different backgrounds, Toyota joined
forces with partners who possessed a shared purpose:
to establish an automobile industry.
As we formed alliances with companies possessing their
own unique character and strengths, the Toyota Group’s
lineage extended horizontally, like the weft on a loom.
Group Governance | Toyota Group Vision: “Inventing Our Path Forward, Together” | Our Founding Spirit | Toyoda Principles and Toyota Philosophy | Toyota Production System | Making Ever-Better Cars | Toyota and Sports
16
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
“Inventing Our Path Forward, Together”
The Company’s founding spirit, the
carmaker’s core duty
Next, please look at the lineage chart.
In the Group’s vertical and horizontal expansions,
I found distinct meanings.
Our vertical lineage continues to evolve through our
unwavering commitment to paving the way for the future.
And our horizontal lineage continues to evolve together
with our like-minded partners.
You could say we have been operating in an automobile
industry that was woven together by the vertical and
horizontal threads spun by our predecessors.
Do we understand and appreciate how fortunate we are?
I think the first to forget this sentiment was none other
than Toyota Motor Corporation.
To make the mobility that sustains people’s lives more
enjoyable and richer, we need to make ever-better cars.
This is the Company’s founding spirit and our core duty
as a carmaker.
However, somewhere along the way, we turned into a
company that prioritizes volumes and profits—a
company that makes money, not cars.
When the numbers go up, you get showered with
praise. And people want to be praised. No one can
criticize that desire.
What we must consider, however, is where those vol-
umes and profits are coming from.
If you merely reap from the fields seeded, plowed, and
cultivated by those who came before, such a business
cannot last long.
That was the case at Toyota Motor Corporation when I
first became president.
The 2008 global financial crisis caused us to fall into
the red for the first time in the Company’s history,
causing trouble for the many people who support the
automobile industry.
Furthermore, global recalls caused us to lose the trust of
our customers, which is of the utmost importance to us.
I consider Toyota Motor Corporation to have collapsed
at that point.
Over the next 14 years I gave my all, and together with
our partners managed to rebuild the Company to the
point where we can once more be called a carmaker.
And yet, if we are not careful, I think we will soon find
ourselves back in the same situation.
The Toyota Group’s path forward
This is not just about Toyota Motor Corporation.
Given the horizontal threads that connect us so closely,
I believe that, just as Toyota Motor Corporation lost
sight of its origins, the same thing is now happening
at other Group companies.
When a crisis threatens a company’s survival, as
managers, we are always given two paths.
One heads for short-term success via stopgap
measures and all-or-nothing bets.
The other leads back to the founding origins that give
our existence meaning.
For us, there is only one right path—returning to the
Company’s starting point and fixing what had gone
wrong with our character.
Yet, that is not all.
At the same time, we must always continue to sow
seeds and take on new challenges for the future.
Personally, while continuing the fight to restore Toyota’s
essence, I vowed not to stop sowing seeds for the future,
including Toyota New Global Architecture (TNGA) and
other R&D investments, as well as building partnerships
in new fields. I carried on with unwavering commitment.
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17
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
“Inventing Our Path Forward, Together”
Because such efforts weave the vertical warp threads
of our lineage.
Sowing seeds does not grant immediate results.
However, you also don’t need to struggle alone.
Our forefathers left us Toyota’s horizontal weft threads
of our lineage.
Today, I am truly grateful for these connecting threads.
The future is something we all build together.
Creating mutual gratitude and being
needed in the future
Although the history of our companies and the prod-
ucts we make are different, I believe that all of us
here share the same love and passion for monozukuri
(manufacturing) and the same desire to make the
world’s children happy.
The Toyota Group’s essence is about valuing the ori-
gins and characters of each company and engaging
earnestly and honestly with monozukuri.
That is, loving humanity and serving society.
With this in mind, I have formulated a vision to which all
of us at the Toyota Group can return.
“Inventing our path forward, together.”
Even as times change, the spirit of invention—a desire
to create something better—has been passed down to
us through the generations.
I believe these are our true roots.
We should all embrace the spirit of invention within us,
think of others, hone our skills, and continue to make
the right things.
By doing so, we will build a culture of mutual gratitude
and ensure the Toyota Group is needed in the future.
I have put together a list of attitudes to guide our way.
– Aim high and care deeply.
– Trust and uplift your colleagues.
– Endlessly improve your craft.
– Honesty first, integrity always.
– Connect and collaborate.
We create the path.
The world we live in is undergoing a once-in-a-century
transformation.
A time when there is no right answer.
Instead of seeking instant recognition, wouldn’t it be
great to receive a “thank you” from those who will live
in the future and those who paved the path that
brought us here?
In this age of constant division, conflict, discord, and
vilification, wouldn’t you like to show how adults can
live for the sake of children, for someone other than
ourselves, and for the future?
A path was left for us by those who came before. But as
yet, no path lies ahead.
It is up to us to create it.
“Inventing our path forward, together”
With mobility as our core business, we will bring smiles
to people around the world.
We will build a future in which the children of tomorrow
can dream more freely and more richly.
To everyone at the Toyota Group: let’s invent our path
forward, together.
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18
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Our Founding Spirit
Origins in Our Founder Seeking to Ease
His Mother’s Burden
Sakichi Toyoda, the
founder of the Toyota
Group, was born the son
of a carpenter in the vil-
lage of Yamaguchi, now
part of Kosai City,
Shizuoka Prefecture, in
1867. Full of curiosity,
Sakichi is said to have
spent his early years
reading a wide range of
books, always thinking
of ways he could con-
tribute to society. One
day, he came to realize
how his mother toiled at
her loom late into every
night and he wondered
if there might be a way
to make her work easier. At the time, weaving was a laborious
process, requiring the use of both hands and legs to control
the threads of warp and weft in sequence. This desire to ease
his mother’s burden led Sakichi to invent his first loom at the
young age of 23. This loom, the Toyoda Wooden Hand Loom,
could be operated with only one hand and realized significant
increases in efficiency. Sakichi obtained a patent for the loom
in May 1891.
In pursuit of greater increases to capacity, Sakichi under-
took the development of a powered loom, eventually invent-
ing Japan’s first, the Toyoda Power Loom. He received a
patent for this loom in August 1898.
Sakichi continued to invent and refine looms for more
than two decades, with his efforts culminating in the inven-
tion of the Non-Stop Shuttle Change Toyoda Automatic
Loom, Type G. Completed in 1924, this loom was created
together with his son, Kiichiro.
At the time, automatic looms required operators’ con-
stant attention as there was no way of knowing when a
thread may break or another irregularity might occur. The
Type G automatic loom, meanwhile, was equipped with a
mechanism for detecting when a warp or weft thread ran out
or broke, automatically stopping the loom in such cases.
Moreover, the Type G was capable of automatically
changing the loom’s shuttle when the weft thread was close
to running out. Previously, to change the shuttles holding the
weft thread, operators were required to use their mouths to
suck the end of the thread through the eye of the shuttle. It
was thus common for operators to inhale cotton dust and
develop lung complications as a result. The Type G employed
an innovative method to pull the thread through a simple
hand-based action that took advantage of the thread’s
tension.
Kiichiro inherited his father Sakichi’s passion for serving
others and making their work easier—as seen in the consider-
ation Sakichi showed for his mother and his employees who
launched his career as an inventor—and this spirit remains a
core value of Toyota today.
The Type G automatic loom boasted the pinnacle for per-
formance among the looms of the time, increasing productiv-
ity more than twentyfold and dramatically increasing textile
quality in comparison with other existing looms. The success
of the Type G fueled the drive that would lead Kiichiro to
devote his life to establishing a Japanese automotive industry
more than 80 years ago, at a time when it was considered
impossible to conduct automobile production in Japan.
Creation of a Japanese Automotive Industry
through Domestic Automobile Production
Kiichiro Toyoda, the son of Sakichi, was born in 1894. After
graduating from university in 1921, he joined his father’s
company, Toyoda Boshoku. At this company, he made his first
trip to Europe and the United States. Ford Model Ts were a
common sight on streets in the United States in the 1920s,
symbolizing the dawn of the automotive era. At this time,
Japan was also witnessing a gradual rise in the number of
imported automobiles, though only people of wealth or
high social status were able to use vehicles.
Kiichiro was already determined to establish a Japanese
automotive industry through the domestic production of
automobiles. In 1926, Kiichiro became a managing director
of newly established Toyoda Automatic Loom Works, Ltd. It
Toyoda Wooden Hand Loom, Sakichi’s
first invention
(Photograph provided by the Toyota
Commemorative Museum of Industry
and Technology)
For the Sake of Others
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Type G
automatic loom
19
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
was at this time that he began researching automobiles in
earnest. Subsequently, Toyoda Automatic Loom Works went
on to establish an automotive department in September
1933 and enter the automotive business officially in 1934,
completing its first engine prototype soon thereafter.
The first Toyoda Model A1 prototype passenger car was
completed in 1935, and the Toyoda Model G1 Truck was
announced in the same year. The following year, mass pro-
duction of the Model AA passenger car commenced. Later,
in 1937, Toyota Motor Co., Ltd., was established, and Kiichiro
became its president in 1941.
Management Crisis, Labor Disputes, and
Commitment to Providing Employment
In postwar 1949 Japan, rapid stabilization of prices triggered
a reduction in the currency supply, which in turn sparked seri-
ous shortages in funds for industry and led to what would
become known as the Dodge Line Recession. During this
recession, the officially fixed price of automobiles remained
unchanged, even as the prices of iron, steel, and other materi-
als rose, striking a devastating blow to the profitability of
Japan’s automotive industry.
In a move to overcome this crisis, Toyota Motor Co., Ltd.,
and its labor union signed a memorandum in December 1949
stating that the Company was at all costs to avoid job cuts as
a means of dealing with the crisis. Kiichiro had faced employ-
ment issues at Toyoda Automatic Loom Works during the
Showa Depression in 1930, and this experience cemented his
commitment to never again allow such a situation to arise.
Entry into the automotive business was, in part, a means of
diversifying operations with the goal of preventing any recur-
rence of employment problems. He was thus firm in his
resolve to avoid job cuts at all costs, even in the face of the
1949 management crisis.
Negotiations with the Bank of Japan regarding a recon-
struction plan for Toyota Motor Co., Ltd., began in January
1950. In April of that year, Toyota Motor Sales Co., Ltd., was
established to resolve the problem of delays in payments for
vehicles, a major cause of the Company’s financial troubles.
Far from improving, however, the situation worsened further.
With no signs of improvements in performance, labor–man-
agement negotiations with the Toyota Motor Co., Ltd., labor
union escalated into a protracted dispute. During collective
bargaining that April, the Company proposed a reconstruc-
tion plan that focused on job cuts. The labor union, however,
expressed its dissatisfaction with the plan, and the dispute
continued for another month and a half until a memorandum
was finally signed in June.
Accepting responsibility for the labor disputes, Kiichiro
Toyoda stepped down from his position as president of the
Company in May 1950. In March 1952, he agreed to make his
much-awaited return to the position. However, he passed
away before he could do so, at the age of 57. Nevertheless,
his aspirations were kept alive by his colleagues, who upheld
his commitment to realizing an entirely made-in-Japan vehi-
cle, even as other Japanese automobile manufacturers
formed technical alliances with U.S. and European manufac-
turers. These efforts led to the 1955 launch of the Toyopet
Crown, the first passenger car to be developed and built
entirely in Japan, a long-held dream of Kiichiro.
Enduring Spirit of Sakichi and Kiichiro Toyoda
Born into a poor farming family, Sakichi Toyoda was driven by
his desire to make others’ work easier. Such was his desire, he
pursued the self-learning that enabled him to invent auto-
matic looms and eventually build the foundations of Toyota.
His son, Kiichiro Toyoda, was not content to merely follow the
easy path his father had laid out for him. Rather, he took on
the challenge of producing automobiles in Japan, something
that was considered impossible at the time, overcoming tre-
mendous social changes as he built the Company and conse-
quently the foundations of Japan’s automotive industry. The
spirit they embodied—of striving to stay ahead of the times
and endeavoring to be studious and creative for the better-
ment of lives and society—lives on in Toyota today and has
become a core part of the Toyota identity.
Our Founding Spirit
Kiichiro Toyoda
Sakichi Toyoda
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Ceremony commemorating the completion of Model A1 passenger car prototype
20
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Toyoda Principles and Toyota Philosophy
With an eye toward “Producing Happiness for All”—Selections from
the Q&A session of Toyota’s 1H/2Q financial results briefing
In 1935, five years after the passing of Sakichi Toyoda, the Company
had grown to more than 10,000 employees, welcoming many new
employees as it developed its automotive business in earnest. To
accommodate this broadening employee base, a way was needed
to convey Sakichi’s principles to all employees and confirm that
these principles are being embodied in every aspect of their work. It
was this need that led to the formulation of the Toyoda Principles.
In addition, the management team that took over after the res-
ignation of Kiichiro, Sakichi’s son, further codified the Toyota
Philosophy, encompassing Toyota’s values, priorities, and strengths,
to answer the fundamental question “What is Toyota?” and to
ensure that we never lose sight of our origins.
The automotive industry is undergoing a once-in-a-century
transformation. In the same way that Toyota transitioned from a
loom manufacturer to an automobile manufacturer, the Company
is now once again reinventing itself as a mobility company.
Thus, we have created the Toyota Philosophy Cone—a graphical
representation of the Toyota Philosophy presented in a shape that
evokes both the spools of thread used in looms and the traffic
cones used to direct cars—to serve as a signpost to guide our steps
in this era of uncertainty.
DNA Toyota’s basic principles
Toyoda Principles
The Toyoda Principles, or Five Main Principles of Toyoda, have always formed the core tenants of the Toyota Group and functioned as the basic principles underpinning the
corporate philosophies of all Toyota Group companies and the actions of all employees.
Modern Interpretation
• We unite as one team regardless of rank in order to contribute to our people, society, and communities.
• We develop and learn from outstanding ideas and cutting-edge technologies across the world. We enhance our capabilities utilizing our own wisdom and create
new value to continue to lead the change.
• We focus on work that is value-adding, with integrity and practicality, by avoiding superficial matters.
• We build a sense of community and promote the personal growth of our people while valuing mutual trust and equal partnership with our stakeholders.
• We show humility for the support of our business by our valued stakeholders and society while also respecting the diversity of the world.
Value Value that Toyota can promise to stakeholders
Toyota Way
Our goal is to transform mobility into new possibilities for society, but the road toward reaching this destination will not always be easy.
Together with an exhaustive commitment to monozukuri (manufacturing), we must also exercise our imagination regarding the possibilities of people and society.
These tangible and intangible aspects together power Toyota.
Our imagination is a tool for refining our monozukuri, and our monozukuri sparks new inspirations that drive our imagination. In advancing this cycle, it is essential to adopt
the perspectives of others and to seek to accommodate their needs.
We work with our stakeholders and partners, each elevating the other, uniting our strengths to create new and unique value. This is New Toyota Way 2020.
Mission Toyota’s mission since its founding
Producing Happiness for All
Born into a family of poor farmers, Sakichi Toyoda built the bedrock of the Toyota we know today by teaching himself the skills needed to invent the Toyoda Power Loom.
Abandoning the easy path left by his father, Kiichiro Toyoda took on the challenge of making automobiles, despite many saying it was impossible at the time.
Their aspirations were carried on by their colleagues and those who came after them to shape the Toyota of today. Their true aim was to produce happiness for any customer
who used their products as well as happiness for every person involved in the work related to those products. At the core of their aspirations was the mission of producing
happiness for all.
However, during Toyota’s long history, there have been times when we focused more on numbers than on people, particularly during our period of rapid expansion in the late
20th century when we faced many problems, including quality concerns and trade friction.
Let us not forget that there are some things that machines cannot create. Only humans can invest the time and energy to bring life to such things. We strive to stay ahead of
the times, endeavoring to be studious and creative for the betterment of lives and society. By leveraging our technological prowess, we bring a future of convenience and
happiness within the reach of all. This is our mission—producing happiness for all—and the core of what makes us Toyota.
Vision The future vision that Toyota aspires to
Creating Mobility for All
Toyota strives to increase the mobility of people and things to unlock new possibilities for people, companies, municipalities, and communities while maintaining a sustainable
and harmonious relationship with the planet. This is our new destination.
The development of the automotive industry has made mobility more accessible, bringing people and society closer. As a result, more people than ever can now experience
mobility and with it the joy of driving.
Nevertheless, there is still so much that mobility can do to eliminate inconveniences and make the impossible possible.
“To move” can refer to physical motion as well as to the experience of being emotionally moved. In other words, mobility has the power to move not only things but also
hearts, minds, and bodies and even society itself.
Toyoda
Principles
Toyota Philosophy Cone
What is Toyota?
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21
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
1. Desire to Make Others’ Work Easier
There are two key concepts that have remained a core part of
the Company even before the birth of the Toyota Motor
Corporation we know today: “just-in-time” and “automation
with a human touch.”
Our history of automation can be traced back to the
automatic loom developed by the Company’s founder, Sakichi
Toyoda. The first loom Sakichi made was based on his desire
to help ease the burden on his mother, who toiled long into
every night at her loom. This automatic loom could be
operated using only one hand, a breakthrough innovation at a
time when looms required the use of both hands to control
the threads of warp and weft. Sakichi’s loom thus dramati-
cally improved productivity.
These concepts shaped the Toyota Production System
(TPS). People often think of TPS as being a process of making
things more efficient, and TPS is often spoken of as though
its main purpose was the transformation of work processes to
improve efficiency. In truth, however, the purpose of TPS is to
make others’ work easier.
2. Main Purpose Outside of Productivity
Improvements
The Type G automatic loom is the machine that helped trans-
form the structure of Toyota’s business.
At the time, each automatic loom needed to be monitored
by one operator at all times. Operators were the “guard” of
their machines, and that was because they were unable to
predict abnormalities.
The most common abnormalities were when automatic
looms would run out of thread or when the thread would
break. The Type G was able to detect such abnormalities, even
at this time before sensors.
The Type G was also capable of automatically changing
the loom’s shuttle when the thread ran out to another shuttle
with a new thread. As the shuttle needs to have the end of the
thread sticking out, prior to the invention of this machine, it
was necessary for operators to use their mouths to suck the
end of the thread through the eye of the shuttle. And, because
there was a lot of cotton dust in the air in textile factories, it
was thus common for operators to inhale this dust and
develop lung complications as a result.
Another feature of the Type G was that the end of the
thread would come out on its own after the thread was cut.
This feature, also invented by Sakichi, eliminated the need for
operators to suck out the thread.
This invention was the result of Sakichi simply exploring a
desire to do something for his team members on the manufac-
turing front lines who were suffering damage in their lungs.
Sakichi started first by determining what constituted an
abnormality and then developed a system to prevent said
abnormality. This process in the end resulted in improved pro-
ductivity, but the gains in productivity were not the initial goal.
Akio Toyoda’s View on the
Toyota Production System
Toyota Production System
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22
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Automation is about being centered on people,
thinking from the perspective of people working
at a company.
3. Akio Toyoda’s View on Automation
For Chairman of the Board of Directors Akio Toyoda, automa-
tion is about being centered on people, thinking from the per-
spective of people working at a company. One cannot just
order improvements to efficiency or reductions to staff from
the safety of a position removed from the front lines.
At Toyota, we embrace the concept of adjusting the
amount of work per person to match the full output of one
unit of manpower.
There are only 24 hours in a day, and this applies equally
to everyone. Employees spend a lot of that time devoted to
work for a company. For this reason, it is important for
supervisors to ensure that the work being done by team
members is as meaningful as possible.
Efforts are being made on the front lines of Toyota’s man-
ufacturing operations to increase the amount of time
devoted to work that creates value and to reduce time spent
waiting or redoing tasks.
The focus, which is about valuing each person’s time, is on
creating more free time for workers by eliminating wasted
time in work processes to reduce overtime.
4. Akio Toyoda’s Understanding of Just-in-Time
Just-in-time is a concept introduced by Kiichiro Toyoda, son
of Sakichi Toyoda and founder of Toyota Motor Corporation.
A phrase that is commonly used when explaining the concept
of just-in-time is “provide what is needed, when needed, in the
amount needed.”
Chairman Akio Toyoda, however, chooses to explain this
concept by using the term “lead time,” which refers to the
amount of time required between the receipt of an order and
the delivery of that ordered product or service.
Toyota serves over 10 million customers a year, and it is
impossible for us to accurately understand the needs of each
of these customers.
Accordingly, responding to these needs requires a frame-
work that allows us to detect abnormalities right away and
halt the pipeline in the event of an abnormality so that we
can rectify problems and make improvements quickly. This is
the reason why just-in-time is so important, and the idea of
lead time is the most effective tool for explaining this
importance.
If we take sushi as an example, supermarkets sell ready-
to-eat sushi, for which they stock inventories. On the other
hand, sushi restaurants, where a chef prepares sushi right in
front of the customer, do not have such inventories of pre-
made sushi. When chefs receive an order, they reach for the
necessary ingredients, then cut and otherwise prepare those
ingredients, before serving the finished sushi to the customer.
A short lead time makes that possible.
We may be able to deliver cars to customers just in time if
we maintain a stock of all the necessary items, but that is not
realistic. Nevertheless, we cannot give up on this idea; we
must continue working to provide just-in-time deliveries while
constantly shortening lead times.
Toyota Production System
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23
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
In fiscal 2009, Toyota recorded its first operating loss since
its founding. In the past, Toyota had demonstrated the tenac-
ity needed to weather seemingly any crisis, including the
1970s energy crisis and the collapse of Japan’s asset price
bubble, without incurring an operating loss. Despite the sig-
nificance of the impacts of the global financial crisis trig-
gered by the bankruptcy of Lehman Brothers and the
subsequent global recession, this operating loss still clearly
indicated the fragility of Toyota’s earnings structure and cor-
porate constitution. The operating loss at Toyota struck a
massive blow to not only the automotive industry but also
the economies of numerous countries and regions.
It was at this time that Akio Toyoda (current chairman)
assumed the position of president of Toyota. The message
he communicated to employees was incredibly simple: “Let’s
make ever-better cars.” Accomplishing this goal, however,
would require Toyota to transition to a product lineup shaped
by regional organizations, as opposed to the head office in
Japan. Recognizing this fact, Toyoda appointed regional CEOs
who were well versed on their respective regions and person-
ally took part in the frontline development of products that
could win the favor of customers in specific regions. Toyota
was thus reborn as an automotive manufacturer boasting a
full, global lineup.
Toyoda’s vision of “ever-better car-making” is now
enshrined as a core part of Toyota’s global identity, shaping
our motorsports activities, our carbon-neutrality initiatives,
and even the world itself.
Product-Centered Management
Product-centered management is imperative to the making of
ever-better cars.
At the November 2021 Nationwide Toyota Dealers
Convention, Chairman Toyoda spoke about product-centered
management as follows.
Over the decades, Toyota has provided society with a
wide range of products aimed at meeting customer needs,
beginning with the Toyoda Model AA in 1936. Looking back on
our history of car-making, I see two key themes.
The first is “sports cars.”
The 1960s were a key era for Toyota’s sports cars.
This decade saw the birth of many sports cars that would
eventually achieve legendary status, such as the Publica
Sports, Sports 800, and 2000GT. Then, in the 1980s, Toyota
launched the Supra, MR2, Celica, and Levin/Trueno. In this
way, Toyota had created sports cars that brought together
the most cutting-edge technological prowess of the era
every two decades.
Why is that?
I think it was because Toyota was treating sports car devel-
opment as the front line for developing the skills and knowl-
edge that will be passed down as well as for human resource
development. For Toyota, sports car development was like a
rite of renewal and rebirth carried out every 20 years.
Following this cycle, the next generation of Toyota sports
cars should have hit the scene in the 2000s.
They did not. Around that time, Toyota was growing its
vehicle sales, mainly outside Japan, and pursuing scale expan-
sion. Amid that push, the role of its traditional renewal and
rebirth rite was forgotten, and sports cars disappeared from
Toyota’s vehicle lineup.
I was not the only one who sensed how dangerous this was.
Our test drivers, in fact, felt the danger more keenly than I
Making Ever-Better Cars
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24
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Toyota’s History of Car-Making
Based on Two Key Themes
1. Sports Cars
2. Long Sellers
did. I think that feeling was part of why Hiromu Naruse, then
Toyota’s chief test driver, told me, very frankly, that he didn’t
want to be preached to about cars by someone who didn’t
know anything about them. But, he said, if I were interested,
he would teach me to drive.
That was the start of my journey, under the new nickname
Morizo, to becoming a master driver.
From there, though a decade later, Toyota went on to
develop the LFA in the 2010s, recapturing the “secret sauce,”
that flavor unique to Toyota and Lexus cars.
We then revived the 86 and the Supra as well, but all of
these vehicles were made in collaboration with outside
partners.
We still wanted to once again make a sports car that
would be all our own. This dream led to the development of
the GR Yaris.
For years, I have constantly been talking about “ever-
better car-making.” Now, as the number of my colleagues
joining me in taking action has risen, this has evolved into
“ever-better car-making from a starting point in motorsports.”
The second key theme is “long sellers.”
Toyota’s long sellers have included the Crown and
Corolla, which drove the motorization of Japan, as well as the
Prius, which created the hybrid electric vehicle market. More
rugged long sellers include the Land Cruiser, Hiace, and
Probox. The Coaster and Century were long sellers, too.
Indeed, Toyota boasts numerous models that have been
beloved by customers for decades.
Despite this, when Toyota was focusing on the number of
vehicles sold and making vehicles mainly for overseas mar-
kets, the position of long-selling cars within the Company
shifted greatly. The Crown and Corolla began to undergo reg-
ular model changes based solely on an annual schedule,
while rugged vehicles like the Land Cruiser and Hiace no
longer had model changes at all. These long-selling cars had
been beloved by customers and an integral part of their lives
for so long, but now it was considered unimportant for them
to change or evolve.
However, I believe that only by constantly changing to
meet the needs of the times can a car be a long seller.
We have already begun working to reclaim this approach.
Making Ever-Better Cars Product-Centered Management
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25
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
The Vitz, as it was known in Japan, was unified under the
name Yaris, which had taken root overseas, and we expanded
its lineup to include the GR Yaris and Yaris Cross. Similarly,
the Corolla lineup saw the addition of the Corolla Sport and
Corolla Cross. Our strategy was to build a lineup tailored to
current needs while leveraging the brand strength of our long
sellers.
“Let’s make ever-better cars.”
This idea was the impetus for the transformation of
Toyota’s car-making.
Three pillars supported this transformation.
The first pillar, and the first that we took on, was the
Toyota New Global Architecture (TNGA).
To achieve excellent performance in the basic functions
of a car—propulsion, turning, and stopping—a solid platform
is essential.
However, creating a new platform and promoting stan-
dardization are not so easy. I found myself wishing that
Toyota had moved away from the one-model, one-platform
approach and implemented platform reforms while its sales
volumes and revenues had been expanding. During the very
difficult time after the 2008 global financial crisis, when
Toyota fell into the red and we could not increase unit sales,
we all had to grit our teeth and work even harder. The fruit of
this labor was a powerful tool—the TNGA.
I believe that it is precisely because we have the TNGA
that we are able to restore the sports cars and long sellers
that for so many years have supported the Toyota brand to
their proper places and tackle the challenge of building up
their lineups.
The second pillar is the in-house company system.
A defining characteristic of Toyota is its full lineup of
diverse vehicles that meet a comprehensive range of cus-
tomer needs.
Offering a full lineup means that we must always have
people who are passionate and responsible about creating
cars in all genres, from sports cars to commercial vehicles.
Ensuring this is the true objective of the in-house company
system.
The lure of increasing unit sales and revenues in the short
term is hard to resist. This is why we must nurture people and
organizations capable of focusing and placing the highest pri-
ority on creating the cars that Toyota and society really need.
The final pillar is a figure at the top who can take final
responsibility. It’s embarrassing to say so myself, but I think
that one thing that sets Toyota apart from other OEMs is a
master driver in top management.
A president who can take responsibility for the “flavor” of
the products we put out. A president who is able to defini-
tively say “no” to projects, even ones that our development
teams have worked hard on, if they don’t have that unique
Toyota or Lexus flavor.
Morizo, master driver, and president of Toyota.
Wearing these three hats at once, I have gone to front
lines myself and worked alongside my colleagues these past
12 years. I am sure that all of that effort shows in our
products.
By continuing to make ever-better cars, our brand will
continue to evolve.
This is what I believe to be the essence of product-cen-
tered management.
It means not aiming to be the biggest in the world in
terms of units sold, but aiming to be the best in town by cre-
ating better cars that bring smiles to customers’ faces.
At first, when I spoke about making ever-better cars, few
understood me, or even tried to. However, thanks to the sup-
port of my colleagues who believed in me and to the support
of our dealers, I think that Toyota’s products have slowly but
surely changed for the better.
Going forward, we will continue to do our utmost to make
ever-better cars.
I hope to convey the heart and the story of Toyota, which
we put into every product, to all our dealers and as many cus-
tomers as possible.
Nothing would please me more than if that story were to
become one of the many new stories connecting the hearts
of our dealers and customers.
The Three Pillars of Ever-Better Car-Making
1. Platform reforms via the TNGA
2. An in-house company system transforming
people and organizations
3. A master driver in top management taking
final responsibility
Group Governance | Toyota Group Vision: “Inventing Our Path Forward, Together” | Our Founding Spirit | Toyoda Principles and Toyota Philosophy | Toyota Production System | Making Ever-Better Cars | Toyota and Sports
Making Ever-Better Cars Product-Centered Management
26
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Making Ever-Better Cars from a Starting Point
in Motorsports
Chairman Akio Toyoda has often been adding “from a
starting point in motorsports” when using the phrase
“making ever-better cars.” He spoke of his feelings toward
this concept at the press conference held in December
2021 announcing the 2022 TOYOTA GAZOO Racing team
members.
In 1952, shortly before his death, Toyota founder Kiichiro
Toyoda wrote the following.
I think that these
words provide the core
principle of “making
ever-better cars from a
starting point in motors-
ports.” There were two
cars that led me to this
core principle. I rode in
the first of these cars with racer Kamui Kobayashi at
Gamagori four months before entering the Super Taikyu
24-hour race. It was while I was in the car that I made up my
mind to enter the race. Although four months was hardly
enough time for the engineers to prepare, I safely finished the
24-hour race as well as three subsequent races. For each
race, they continued to improve the car, making it stronger
and faster.
The other car is the GR Yaris.
We made this car for a specific purpose: to win the World
Rally Championship.
Until now, Toyota has made its race cars by modifying
its mass production cars. That was the limit of what we
could do.
The GR Yaris is our attempt to flip this approach by
designing a race car from the ground up. From the initial
stages of development, we reached out to professional driv-
ers to have them drive the car. When problems came to light
during their drives, they were fixed, and then we had them
drive the car again. Development progressed nimbly, and the
car evolved into one that is fun to drive. As Morizo (my driver
name), I partnered with this car on the Gamagori dirt
course for training to hone my driving skills.
Drive it, break it, fix it, strengthen it, drive it again,
and break it again.
By repeating this process, the engineers not only
advanced the car’s development, they also changed
themselves. I think that they came to understand
Kiichiro’s words not just intellectually, but in a deeper,
visceral way.
Come to think of it, it has been 14 years since Hiromu
Naruse and I drove used Altezzas in the 24 Hours of
Nürburgring endurance race. Racing on the streets toughens
people up and makes cars stronger. I want to enable Toyota
to make cars that way again. That may be what I have been
working toward all along.
In 2009, when I became president, I implored our employ-
ees to make ever-better cars.
Since then, I often get asked, “What kind of cars are ever-
better cars?”
I have a certain idea of what makes a better car.
It’s not necessarily the same as someone else’s idea of a
better car.
What makes a better car depends on the driver. It is for
this reason that cars can only be made in the streets and not
at a desk.
However, back in 2009, not many people understood
what I meant by this. It’s not enough to simply tell someone
that the streets make the car. I knew I had to show them what
it means.
“The Japanese automobile production industry must master the art of
manufacturing passenger vehicles. In order to test the durability and per-
formance of their cars, companies ought to participate in auto races, dem-
onstrate the full performance of their vehicles, and compete for superiority.
This will both lead to progress in their vehicles and spark the enthusiasm of
automobile fans. Such races must not be regarded as a simple matter of
curiosity, for they are indispensable to the development of Japan’s automo-
bile manufacturing industry.”
Making Ever-Better Cars Making Ever-Better Cars from a Starting Point in Motorsports
Group Governance | Toyota Group Vision: “Inventing Our Path Forward, Together” | Our Founding Spirit | Toyoda Principles and Toyota Philosophy | Toyota Production System | Making Ever-Better Cars | Toyota and Sports
27
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
That’s why I continued to take part in the 24 Hours of
Nürburgring endurance race.
“The streets make cars and toughen people up” became
something of a catchphrase. However, changes in car-making
do not happen so fast.
On the front lines, each department was focused on its
own specialized area of car-making, and they were not han-
dling the overarching car-making process as a united team.
That was when I first went to Le Mans. It was the year
after the car driven by Kazuki Nakajima, which was in the lead,
suffered a mechanical failure just before the finish line.
When I dropped into
the pit, the drivers talked
with me. In a qualifying
race, Kamui Kobayashi
had seized pole position
with an astounding time.
He passed the trophy to
me while thanking me. It made me want to get closer to the
drivers and race alongside them.
Racing, however, is hard. That year, only Kazuki’s car fin-
ished the race, with the team coming in 8th overall, and 2nd in
its class. The other two cars had to be retired from the race.
After the race, the drivers said to me, “We’re sorry it won’t
be at the very top, but would you stand on the winner’s
podium with us?”
The difference between the first- and second-place
podium was a height of about 70 centimeters. I thought, is
this frustration—this second-place podium—the highest we
can reach? I desperately wanted to help the drivers stand at
the top. I wanted to prove that Toyota could make the kind of
strong car that they would want to drive. I swore to myself,
standing on that podium one level down, that we would
change Toyota to be capable of the kind of car-making
needed to achieve that, no matter what.
That year, we took on another new challenge: the World
Rally Championship, or WRC. We entrusted the task of putting
together a team from scratch to Tommi Mäkinen. A legend
himself, having won the WRC four times, he knew how to win.
However, that was not the only reason I asked for his help.
There were many things I wanted to learn from him, with
his knowledge of a wide range of cars, including those of
Mitsubishi and Subaru.
We made only one promise to each other: to make the GR
Yaris at the end of the season the strongest Yaris ever. The
team kept this promise.
Our current team principal, Jari-Matti Latvala, was a star
driver for other teams before Toyota returned to the WRC. He
was such a star, in fact, that I waited in the hotel lobby for him
to come out when I first went to watch the WRC. Since then,
he has helped secure numerous victories as a Toyota driver,
and this season, as team principal, he became a triple crown
holder. Over the past five years, Latvala has, without a doubt,
constantly helped make the Yaris stronger as both a driver
and principal.
For next year’s WRC, to which Toyota will bring a new car, I
am sure he will assemble a team of professionals that is like
a close family and hates to lose.
Recently, I have been deliberately adding “from a starting
point in motorsports” to the phrase “making ever-better cars.”
For 12 years, people have told us that there’s no way that
Toyota can realize this kind of car-making. Now, however,
Toyota has finally changed, realizing a kind of car-making
in which not only its engineers and mechanics, but also its
professional drivers, professional engineers, and professional
mechanics all work together, as a team, to advance car-mak-
ing. Now that this team has come together, we have at last
reached the point where we can begin making ever-better
cars from a starting point in motorsports.
Motorsports are a starting point for an ever-better car.
We will leverage motorsports to make ever-better cars,
from the top categories driven by professional drivers to cus-
tomer motorsports vehicles driven by amateur racing drivers,
the sports cars driven by our many customers, and even down
to family cars, and beyond that, automated driving.
As for myself, what I know is that I love cars, and I love
driving.
I am very fortunate to now have others who love cars, love
driving, and are passionate about motorsports working along-
side me.
Races are an integral part of making ever-better cars
from a starting point in motorsports. Chairman Toyoda
has long engaged in automobile races as a way to build
relationships and invigorate the motorsports scene.
In Rally Japan, the final race of the World Rally
Championship held in November 2024, TOYOTA GAZOO
Racing went into its home event chasing the top-placed
Hyundai team. The season closed with a thrilling finale,
as Toyota staged a miraculous comeback to claim the
crown. Despite being rivals in rally, Hyundai and Toyota
are partners in creating the future mobility society and
boosting the presence of motorsports in Asia.
Making Ever-Better Cars Making Ever-Better Cars from a Starting Point in Motorsports
Group Governance | Toyota Group Vision: “Inventing Our Path Forward, Together” | Our Founding Spirit | Toyoda Principles and Toyota Philosophy | Toyota Production System | Making Ever-Better Cars | Toyota and Sports
28
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Toyota and Sports
Growth of Sports Clubs Alongside the Company
Following the track and field club, a judo club was created in
1938. As the years went on, Toyota added more sports clubs
to its roster, notably soccer, rugby, and volleyball clubs. Club
activities were put on hold during the war years but resumed
in earnest immediately thereafter. Four clubs, including men’s
and women’s volleyball clubs, were established in 1946 alone,
and a total of twelve were set up in the five years through
to 1951.
It was also in 1951 that the Company held the first-ever
All-Toyota Games, an event in which Toyota Group companies
competed against each other in various athletic events, dem-
onstrating growing enthusiasm for sports activities at Toyota.
In 1964, Tokyo hosted the Olympic and Paralympic
Games, a proud moment for Japan that led to increased pop-
ularity of corporate sports leagues and teams around the
country. Around this time, Toyota helped establish a corpo-
rate-backed sports league, the Japan League, to allow com-
panies from across the country to come together in friendly
competition. The birth of this league helped forge ties across
Japan’s economic sector. It was also at this time that Toyota
began expanding overseas, and its sports activities grew
overseas as well alongside its business operations.
By the 1970s, Toyota had 35 different sports clubs divided
among its primary working locations in Japan. For example,
the Tokyo office had the basketball club, while the track and
field club was in Aichi Prefecture, where the Tahara Plant is
located, and at the Higashi-Fuji Technical Center in Shizuoka
Prefecture it was the soccer club.
Sports as Embodiments of the Values and Corporate
Culture That Toyota Cherishes
Passion for Sports Passed Down Since
Toyota’s Founding
Toyota’s passion for sports has been a constant since
the Company’s founding in 1937. That same year,
founder Kiichiro Toyoda organized Toyota’s first sports
club: the track and field club. Since then, Toyota and
its athletic clubs have grown and developed together.
Chairman Akio Toyoda explains why he thinks this
came to be.
More than 80 years ago, our founder Kiichiro Toyoda created a sports club along
with the Automobile Division. But what was the sports club for? The spirit of
“never giving up” and the spirit of “working for the team,” which encourages effort
on the behalf of others—I believe these were exactly the mindsets the founding
members needed as they recklessly took on the challenge of establishing an
automotive industry in Japan. Kiichiro must have felt that sports could help
strengthen the values they should cherish, creating Toyota as we know it today.
low resolution
Group Governance | Toyota Group Vision: “Inventing Our Path Forward, Together” | Our Founding Spirit | Toyoda Principles and Toyota Philosophy | Toyota Production System | Making Ever-Better Cars | Toyota and Sports
Toyota Teams & Athletes
Track and field club established together with the Company
29
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Toyota and Sports
Some of these clubs started to include athletes who par-
ticipated regularly in worldwide competitions. Sports had taken
a prominent position in the minds of employees at Toyota.
Support That Places People and Athletes First
Through his interactions with various Para athletes, Chairman
Akio Toyoda came to a certain realization. Stated in his own
words, “I have become even more committed to the idea that
Toyota should provide mobility solutions for all people. With
this in mind, we are taking steps as a mobility company, not
just by making ever-better cars but also by aiming to address
various mobility needs above and beyond cars.” This commit-
ment has propelled Toyota forward with efforts to shape the
future of the mobility society based on the principle of pro-
viding mobility for all and thereby creating a world that
allows anyone to enjoy the freedom of movement. In this
manner, we hope to help build a society in which everyone is
able to participate.
As part of this quest, we concluded worldwide partner
contracts with, and acted as the first mobility category part-
ner of, the International Olympic Committee and the
International Paralympic Committee spanning four competi-
tions over the period from 2017 to the Paris 2024 Summer
Olympic Games.
The decision to sponsor these events was inspired by the
commitment of then-President Toyoda to support people in
enjoying their lives and chasing their dreams.
Our contracts with the International Olympic Committee
and the International Paralympic Committee concluded with
the Paris 2024 Summer Olympic Games, but this has not
weakened our resolve to support people’s lives and dreams
and the efforts of athletes striving to overcome all odds to
accomplish the impossible. Approximately 300 Global Team
Toyota Athletes from 50 countries and regions compete in
the Olympic and Paralympic Games. Going forward, we will
continue to offer support that places people and athletes
first by lending aid to these athletes and the staff members
who assist them and by helping out with equipment
development.
We believe that sports are not just about competition;
first and foremost they are about bringing people together. In
this spirit, we have worked with local chapters of the Special
Olympics* over the years, and in 2017 we became an official
global partner.
The Special Olympics strives to create a better world by
fostering the acceptance and inclusion of all people through
sport and promotes Unified Sports that join people with and
without intellectual disabilities on the same team in order to
build relationships of mutual understanding and support. We
endorse this pursuit and see the opportunity to work with the
Special Olympics as a way to expand our own view of the
world and help create a more inclusive, harmonious society.
* The Special Olympics is an international sports organization that supports children and
adults with intellectual disabilities in participating in society through the organization
of regular sports training and various athletic competitions throughout the year. The
victors of these competitions are announced immediately at the end of each competi-
tion, rather than victory being determined through season points or other ongoing scor-
ing methods.
Sports as Embodiments of the Values of Toyota
Since its founding, Toyota has continued to believe in the
power of sport to bring people together and boost morale,
regardless of the broader business challenges it faces or how
the social climate might change. We are proud of the long
history of our sports teams, and we will continue to cherish
them.
The values embodied in sports —taking on challenges,
never giving up, working for the team, and showing respect—
are also the values and corporate culture of Toyota.
Every day, across the globe, athletes demonstrate the
values of hard work, determination, and perseverance.
It is our admiration for these values that continues to drive
us to support the creation of a more inclusive and sustainable
society in which all people can achieve the impossible.
Opening ceremony for the All-Toyota Games in May 1965
Group Governance | Toyota Group Vision: “Inventing Our Path Forward, Together” | Our Founding Spirit | Toyoda Principles and Toyota Philosophy | Toyota Production System | Making Ever-Better Cars | Toyota and Sports
30
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
Carbon Neutrality and Expansion of the
Value of Mobility: Two Principles of the
Toyota Mobility Concept
Toyota is committed to evolving automobiles to be more useful to
society based on the essential values for which they have become
known—being safe, secure, and fun to drive. We also seek to realize a
mobility society in which everyone can move freely, happily, and
comfortably. As we work toward such a future, we will continue our
transformation into a mobility company in three domains. Mobility
lies beyond the future of the car. Cars lie at the center of our trans-
formation into a mobility company.
To expand the possibilities of automobiles, it is essential we evolve
them based on our long-cherished values of being the best in town
and making ever-better cars.
Accelerating the shift to a Mobility Company:
President Sato Talks about Toyota’s Future
Toyota’s Vision for the Mobility Society
31
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Toyota’s Vision for the Mobility Society Toyota Mobility Concept
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
32
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
“Producing happiness for all” is Toyota’s mission. Since our
founding, our goal has been car manufacturing that contrib-
utes to the development of society and helps customers and
other stakeholders around the world lead happy lives.
We want to provide the freedom and enjoyment of mobility
to all, leaving no one behind. Moreover, we want to realize a
mobility society that is safe, reliable, and sustainable. Therefore,
we aim to transform ourselves into a mobility company.
Toyota Mobility Concept—Let’s Change the Future of
Cars!
The motto “Let’s change the future of cars” expresses our
commitment to car manufacturing, which is at the heart of
our transformation efforts.
To ensure cars remain a useful form of mobility that makes
people happy, we must minimize the negative effects that cars
have on society—such as congestion and increases in traffic
accidents and pollution—while maximizing the benefits,
including convenience, comfort, and the enjoyment of driving.
Positioning cars front and center, we aim to evolve toward
mobility. The Toyota Mobility Concept breaks down this evo-
lutionary process into three stages: Mobility 1.0 Transitioning
Cars to Mobility, Mobility 2.0 Expanding Mobility Access, and
Mobility 3.0 Synergy of Mobility & Infrastructure.
The diagram on the previous page offers an overview of our
initiatives, including specific measures. It shows that Toyota’s
initiatives to transform into a mobility company are premised
on two key themes: carbon neutrality and expanding the value
of mobility. The horizontal axis displays contributions to energy
diversification, while the contributions to various types of
mobility needs are set out on the vertical axis.
Energy enables our daily lives. To change the future of
cars, we must face the issue of energy’s future. With the
spread of renewable energy, electricity and hydrogen are
likely to become the main forms of energy upon which soci-
ety relies. However, the pace of transition will differ in each
country and region due to their particular energy situations.
With these differences in mind, we have adopted a multi-
pathway strategy, which allows transitions that align with
actual energy situations. In the short term, we will provide a
range of options that can be used to reflect actual situations
and meet diverse customer needs. In conjunction with these
efforts, we will take steps that anticipate the medium- to
long-term trend toward electricity and hydrogen.
We are making steady progress in clarifying our multi-
pathway strategy by using our array of hybrid vehicles, which
contribute to practical CO2 reduction, as the basis for a menu
of concrete options.
We are developing new compact internal combustion
engines with high levels of efficiency and advanced environ-
mental performance by refining combustion technology devel-
oped over many years, such as hydrogen engine technologies
honed through motorsports. We are also utilizing the small
electric units of next-generation battery electric vehicles
(BEVs) with the aim of creating electric-rich hybrid electric
vehicles (HEVs) and plug-in hybrid electric vehicles (PHEVs).
In developing the structures and designs of next-genera-
tion BEVs and streamlining their manufacture, we are return-
ing to first principles. As well as reconsidering designs, we are
focusing on optimizing aerodynamics and other aspects of
BEV performance. We will also utilize technologies we have
honed, such as compact electric power units, to advance the
evolution of other powertrains.
As for fuel cell electric vehicles (FCEVs), which run on
hydrogen, we are building business and market foundations by
first concentrating on commercial vehicles. Setting our sights
on promoting the spread of e-fuel made from hydrogen, we
are working with energy companies and other entities to
establish an entire value chain that extends from the produc-
tion and transportation of hydrogen through to its use.
Roles of Our Brands
In advancing the aforementioned initiatives, the Lexus brand
is leading innovation focused on electrification. Meanwhile,
by making ever-better cars from a starting point in motors-
ports, the GR brand is spearheading the development of
essential features and basic technologies that will serve as
foundations for electrification and intelligence. This brand is
also at the forefront of forward-looking hydrogen initiatives,
such as hydrogen engines and e-fuel. Under the Toyota brand,
we will mass-produce technologies proven by the Lexus and
GR brands. We will deliver quality, affordable cars to a wide
range of customers by leveraging the strengths of our well-
designed Toyota New Global Architecture (TNGA) platform
and a full lineup of vehicles tailored to regional markets
worldwide.
Toyota’s Vision for the Mobility Society Toyota Mobility Concept
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
33
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Mobility 1.0 SDVs Unique to Toyota
In addition to providing mobility that contributes to energy
diversification, we aim to cater to an array of mobility needs.
To this end, at the Mobility 1.0 stage, Transitioning Cars to
Mobility, we will create new value by connecting cars with
society. The key to these efforts will lie in increasing the
potential uses of data and energy through the implementa-
tion of the Arene OS software platform.
In building this platform, the leading role will be played by
ambitious initiatives to create Software Defined Vehicles
(SDVs), which form part of our efforts to develop next-gener-
ation BEVs. We believe that safety and reliability are the most
important types of value provided by SDVs. Together with
Nippon Telegraph and Telephone Corporation (NTT) and
other partners, we will build seamless communication and AI
infrastructures that enable us to enhance the value provided
by cars, particularly in relation to safety and reliability. For
example, we will advance the development of automated
driving, thereby helping eliminate traffic accidents. Further,
by providing connections to a wide variety of services and
apps and extending the scope of AI utilization, we will create
mobility value that matches customer needs.
Mobility 2.0 Diverse Mobility
Transitioning Cars to Mobility will in turn enable initiatives
aimed at Expanding Mobility Access through the provision of
mobility in new fields—the goal of the Mobility 2.0 stage.
Toyota is working on many different types of mobility, from
personal mobility and wheelchair mobility through to com-
mercial mobility such as e-Palette, boats, and flying mobility.
Together with many partners, we will go beyond the scope of
our current business domain to support the mobility of cus-
tomers worldwide.
Mobility 3.0 Synergy of Mobility & Infrastructure
At the Mobility 3.0 stage, we will create value by integrating
mobility with social systems: Synergy of Mobility &
Infrastructure.
The advancement of automated driving, which we are pur-
suing as part of the development of SDVs, is also an initiative
aimed at establishing social systems that provide safety and
reliability by integrating the trinity of people, cars, and
infrastructure.
We are advancing regional projects in various countries.
For example, in Thailand we are working with partners on a
project tasked with the social implementation of a system for
the integration of data, energy, and mobility. In China, mean-
while, we are working toward the realization of automated
driving and a hydrogen-powered society.
Our energy storage business aims to build sustainable
social systems that help spread renewable energy. In evolving
mobility, we will focus on the creation of battery ecosystems
and other initiatives for the establishment of a circular econ-
omy based on an approach of using less resources in manu-
facturing, using products longer, and producing no waste
when collecting products.
To realize mobility that enhances safety and reliability,
reduces traffic congestion, increases logistics efficiency,
improves the environment, and contributes to energy man-
agement, our efforts aimed at integrating cars and infra-
structure will adopt a society-wide viewpoint.
Woven City: A Mobility Test Course
Our ambitious initiatives to create new technologies and ser-
vices in the Mobility 1.0 through Mobility 3.0 stages will be
supported by Woven City, a mobility test course scheduled to
open in 2025. By conducting demonstrations of technologies
and services at Woven City and then nurturing them through
social implementation, we will rapidly realize value in the
form of mobility that is integrated with social systems.
We will continue heightening the clarity of the Toyota
Mobility Concept and steadily transform into a mobility
company.
Toyota’s Vision for the Mobility Society Toyota Mobility Concept
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
34
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
The Toyota Mobility
Concept is centered on
enhancing the value of
cars, expanding new
mobility and freedom of
movement, and providing
new services and energy
solutions as part of social
systems.
I will explain the three approaches that hold the key to realiz-
ing this vision: electrification, intelligence, and diversification.
Electrification
Let’s start with electrification. I want to begin by saying we
remain firmly committed to our multi-pathway strategy. We
will continue to tailor electrification to the needs of custom-
ers and individual regions by drawing on the strengths and
characteristics of each vehicle type.
1 Battery Electric Vehicles
We have plans to release next-generation battery electric
vehicles (BEVs) entirely different from those of today—BEVs
created by automobile manufacturers. This new generation of
BEVs will double driving range by using batteries with far
greater efficiency while also offering design and driving per-
formance to set hearts racing.
At the same time, we will transform manufacturing.
Drawing on the strengths of the Toyota Production System
(TPS), we will change the way we work to reduce the number
of processes by half. This will entail a shift to more efficient
lines, including autonomous inspections and unmanned trans-
port powered by connected technology. We will completely
transform the landscape of our production plants.
We also aim to achieve carbon neutrality at all of our
plants around the world by 2035.
At the same time, we will overhaul existing supply chains
by working with suppliers to procure superior quality parts at
lower prices.
To realize these transformations, we created a new spe-
cialized unit in May 2023.
Working under a single leader entrusted with full author-
ity, this all-in-one team handles every function, from develop-
ment to production and business operation.
Supporting these efforts is our competitiveness in such
areas as per-unit development cost and investment in
in-house production, both of which have been halved by the
Toyota New Global Architecture (TNGA). We will provide the
team with comprehensive support through the power of our
10-million-unit-strong sales base.
2 Plug-in Hybrid Electric Vehicles
By increasing battery efficiency to extend the EV-mode driv-
ing range beyond 200 km, we will reposition plug-in hybrid
electric vehicles (PHEVs) as “practical BEVs” and put greater
focus on developing PHEVs.
3 Fuel Cell Electric Vehicles
We will pursue mass production of fuel cell electric vehicles
(FCEVs) centered on commercial vehicles.
One feature of FCEVs is that the energy source, hydrogen,
is lightweight. As such, even when designed for greater driving
ranges, vehicles are not as heavy as BEVs, and less space is
required. Also, refueling is much quicker.
Taking advantage of these strengths, we will work with
business operators to promote FCEVs by starting with com-
mercial vehicles, such as medium- to heavy-duty trucks.
Additionally, we started basic research on hydrogen
engines for heavy-duty commercial vehicles in 2022.
4 Hybrid Electric Vehicles
We will continue to improve our hybrid electric vehicles (HEVs)
with a focus on high quality and affordable prices by account-
ing for local energy conditions and customer ease of use.
We are also committed to reducing CO2 emissions by
offering carbon-neutral fuel options not only for new vehicles
but also for vehicles already on the road, which outnumber
new vehicles by a factor of about 20.
Intelligence
Next is intelligence, and specifically, the role of intelligence
in the cars themselves, the underlying services, and the
expansion of our connection to society.
First is the shift to intelligent cars.
This will involve expanding advanced safety technology,
multimedia, and other constantly evolving feature updates to
all of our vehicles. At the same time, alongside advances in
the onboard operating system, our next-generation BEVs will
enable users to customize “ride feel” according to their pref-
erences for how the vehicle accelerates, turns, and stops.
By also honing the vehicles’ essential attributes, we will
create cars that are more fun to drive in terms of both hard-
ware and software.
Second is intelligent services.
In 2023, we began the public rollout of new services that
connect cars to cities and infrastructure. Examples of such
services include logistics systems that use real-time traffic
information to boost transport efficiency and systems that
provide optimal energy management.
Partnering with cities and public facilities, we will also
expand our BEV charging network while providing a variety of
services that support the energy grid and daily living as a way
of contributing to society. These efforts are already under
way at Lexus.
Last, there is the role of intelligence in society. Woven City,
our mobility test course, will serve as a living laboratory for
trialing various ways of connecting people, cars, and society.
For example, in the area of connected logistics services,
we will use Woven City to address any issues that come to
Toyota’s Vision for the Mobility Society
Product-Centered Management
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
35
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Toyota’s Vision for the Mobility Society Product-Centered Management
light through real-world trials, before once again implement-
ing these services on public roads.
By repeating this process, we will accelerate the realiza-
tion of an intelligent society.
Diversification
Finally, we come to diversification.
Our approach to diversification goes beyond cars to
mobility itself and even the energy sector.
First, the diversification of cars will involve expanding our
product lineup, bolstering services that utilize connected
technology, and growing parts and accessory businesses in
collaboration with new partners.
Second is the diversification of mobility.
For example, we have developed a one-touch system for
securing wheelchairs in vehicles that utilizes the know-how
we have accumulated over many years of developing assisted
mobility vehicles. Sales of the system commenced in 2023.
We remain committed to ensuring stress-free travel for
wheelchair users to allow them to reach their destination
whether traveling by land, sea, or air. We will also expand our
efforts to new mobility businesses, as seen in our partnership
with Joby Aviation, Inc.
Next, we have energy diversification.
Verification tests using hydrogen extracted from water as
well as unused food and other waste, in addition to carbon-
neutral fuels made from biomass and other resources, have
already begun in Japan and Thailand. We will hone these
energy-use technologies through motorsports, aiming to pro-
mote their widespread adoption in society.
Through our cars, we aim to shape the future by working
together with like-minded partners to spread the value of
these ideas to all of society.
Electrification
Multi-Pathway
Solutions
BEVs created by
an automobile
manufacturer
Practical BEVs
Mass production
centered on
commercial vehicles
Catering to
local needs
Intelligence
Expansion of Our Connection
to Society
Intelligent cars
Intelligent services
Intelligent
societies
Diversification
Contributions to society
through cars
Car diversification
Mobility
diversification
Energy
diversification
Cars
Cars
Services
Mobility
Society
Energy
Cutting-
edge
Real-time management
Car test courses
Mobility test courses
Living laboratories
Public trials
Accelerate
Turn
Stop
Customization
of “ride feel”
Advanced safety
Updates
Multimedia
Optimization
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
36
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
On November 2, 2024, Toyota announced that an electric
vertical take-off and landing (eVTOL*1) aircraft built by its air
mobility partner Joby Aviation had made its first test flight
outside of the United States.
This test flight served as an opportunity for Joby CEO
JoeBen Bevirt and Akio Toyoda, the chairman of Toyota, to
share their commitment and passion toward the idea of air
mobility, which had been a dream of their respective compa-
nies since their founding.
Since its founding, Toyota has been working to realize a
society in which everyone can move freely.
In 1925, Toyota Founder Sakichi Toyoda offered a prize to
encourage the development of a storage battery capable of
“flying an airplane across the Pacific Ocean.” Since then,
Toyota has continued to pursue its dream of air mobility by
exploring the potential of batteries as a power source, which
would eventually contribute to the creation of eVTOL air-
craft. Kiichiro Toyoda, founder of Toyota Motor Corporation,
also expressed a strong interest in the aircraft business,
making prototypes of helicopters and aircraft components.
After World War II, Dr. Shoichiro Toyoda was involved, among
other projects, in the joint development of the world’s first
electronically controlled aero piston engine with a U.S. com-
pany at Toyota’s Higashi-Fuji Technical Center, which could
be described as the birthplace of Toyota’s development of air
mobility. Today, Sakichi’s dream lives on, with batteries seen
as a viable source of power for eVTOL aircraft.
As Toyota transforms into a mobility company, it has been
able to work with amazing partners like Joby to find new and
exciting opportunities. Joby CEO JoeBen Bevirt is driven by his
passion and dreams that “look forward to a world where our
environmental footprint is smaller and where we are able to
spend more time with the people and places that matter
most to us, without having to worry about traffic jams.” Akio
Toyoda has ambitions to bring the freedom of mobility to all
people. Sharing similar ambitions, these two leaders
embarked on a journey to revolutionize air mobility. The cul-
mination of the efforts of both companies over the last seven
years, in which Joby’s dreams and passion for air mobility as a
start-up encountered Toyota’s expertise in production pro-
cesses and technology development, has led to Joby’s first
eVTOL aircraft exhibition flight in Japan.*2
Toyota is committed to building on its mobility businesses
to deliver mobility for all and to bring smiles to the faces of
people around the world. Together, Joby and Toyota will work
to help realize a future that offers more freedom and pros-
perity to all.
*1 An eVTOL aircraft is a type of aircraft designed for short-range, high-frequency
operations suitable for the on-demand air taxi market, which is expected to be
utilized by commuters, business travelers, and tourists in urban areas. Combining
elements from helicopters, drones, and small aircraft, eVTOL aircraft are
designed to excel in reliability, environmental performance (zero operating emis-
sions), quiet operation, operational and maintenance costs, enhanced safety fea-
tures, and more.
*2 The partnership between Joby and Toyota began in 2019, and the companies
invested U.S.$394 million in January 2020 and agreed to invest an additional
U.S.$500 million in October 2024, for a combined total of U.S.$894 million in
investment. In this partnership, Toyota is sharing its production technology per-
spective and its insight pertaining to engineering better production processes
and developing support and other tools. In addition, the Company began provid-
ing Joby with electrification-related components in 2023.
Air Mobility (Air Taxis) and Leaders’ Deep Ties in Partnership—
Joby’s First Flight Outside of the United States
Toyota’s Vision for the Mobility Society Product-Centered Management
Joby Aviation and Toyota Accelerate Efforts to Realize
Air Mobility
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
37
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Europe
Style, driving
range
Style,
electrification
Compact cars,
minivans
Quality, durability, reliability, affordability
Large cars,
pickup trucks
China
North America
Japan
Asia, etc.
Products Aligned with Regional Characteristics
Ongoing efforts to maintain and strengthen our solid busi-
ness foundation through region-centered management will
remain essential to realizing the Toyota Mobility Concept.
CO2 Emissions Reductions Equivalent to Roughly
Nine Million BEVs
Aiming to become a best-in-town automobile manufacturer,
based on the slogan of “making ever-better cars,” Toyota has
proceeded to provide high-quality cars developed based on
the TNGA. Taking care to account for the unique market char-
acteristics and customer needs of each region, we have sold
these cars under the leadership of regional CEOs.
As a result, we have seen increased sales in emerging markets
and achieved an exceptionally well-balanced regional sales mix.
In addition to lowering R&D and incentive costs through
the TNGA, the steady, continued application of our strengths
in timely product improvements to meet the needs of each
region and cost reductions in cooperation with suppliers have
led to a dramatic increase in earnings power. As a result, we
have evolved to be able to grow earnings while investing in
the future for further growth.
Together with our employees, shareholders, suppliers, and
other stakeholders, we have built a cycle of growth.
We have also actively promoted the introduction of elec-
trified vehicles. Since the introduction of the first-generation
Prius, we have sold a cumulative total of 27.0 million units,
(as of March 31, 2024), resulting in a CO2 emissions reduction
equivalent to that of approximately 9.0 million BEVs.
The lead role has been played by HEVs, which have seen
improvements in performance and reductions to costs with
each successive generation. As a result, the cost of hybrid
systems has dropped to one-sixth of the original cost, making
the profitability of HEVs comparable with that of gasoline
vehicles.
Toyota has thus been able to greatly enhance its earning
power while investing in the future, growing with stakehold-
ers, and reducing CO2 emissions.
This truly is an achievement of our region-centered man-
agement based on efforts to make ever-better cars.
We will continue to evolve our region-centered manage-
ment to further solidify our business foundation.
Borderless Nature of Carbon Emissions
To do so, what we must first consider is how to achieve
carbon neutrality.
Carbon emissions are not bound by borders, and finding
ways to reduce CO2 emissions is an issue that cannot wait to
be addressed. We need to immediately start with what we
can do now.
To spread the use of electrified vehicles as quickly as pos-
sible and with as many vehicles as possible, we need to be
very attentive to the specific needs of our customers, taking
into account local electrification progress and the diverse
ways that cars are used.
Accordingly, alongside the enhancement of our BEV
lineup, we will continue to enhance the attractiveness and
competitiveness of all powertrains, including HEVs and PHEVs.
Toyota’s Vision for the Mobility Society
Region-Centered Management
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
Results of Region-Centered Management
2023
2005
Japan
24%
North America
35%
Europe
14%
Asia
12%
Other
13%
Japan
15%
North America
26%
Europe
11%
Asia
14%
Other
15%
China
18%
China
3%
7.2 million units
10.3 million units
Sales Volume
Improvements in HEV Profitability
Cost of HEVs (Compared with Gasoline Vehicles)
Per-Unit Profit for HEVs (Gasoline Vehicles
Indexed to 100; Figures for SUVs Marketed in
North America)
1st-gen
(1997)
2nd-gen
(2003)
5th-gen
(2022)
3rd-gen
88
100
4th-gen
110
3rd-gen 4th-gen
Down to 1/6
Need for Finely Tuned Approach to Accommodate Differences in
Electrification Progress
Indonesia
United States
China
Germany
6
17
59
18
10
9
59
22
2
11
79
8
0
5
93
2
Source: S&P Global Inc.
ICE
HEVs
PHEVs
BEVs
Distribution of Market by Powertrain (2024)
(%)
(Millions of units)
(Millions of units)
Aggregate Electrified Vehicle Sales
CO2 emissions reductions
effect equivalent to
approx. 9 million BEVs
0
1.5
1.0
0.5
2.0
2.5
3.0
3.5
4.0
2024
2019
2014
2009
2004
1997
0
10.0
5.0
15.0
20.0
25.0
30.0
27.0 million
(aggregate)*2
*1 Vehicle sales figures are the total of HEV, PHEV, BEV, and FCEV sales.
*2 As of March 31, 2024
Annual sales (left axis)*1, 2
Aggregate sales (right axis)
38
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Developed
Countries
China
Emerging
Countries
United
States
Enhancement of performance and expansion
of bZ series lineup
Introduction of two locally
developed models
(2024–2025)
Response to diverse needs
Pickup trucks and small BEVs
Commencement of local
production of three-seat-
row SUVs (2026)
Bolstering of battery
production
BEV Initiatives by Region (Up to 2026)
Preparation of Next-Generation BEVs While Greatly
Expanding Product Lines in Developed Markets
From here, I will touch upon our BEV initiatives by region.
In developed countries, as we move forward with the
preparation of next-generation BEVs, we will greatly expand
our product lineup, focusing primarily on models in the bZ
series with further refined performance.
In the United States, in 2026 we will start the local pro-
duction of three-seat-row SUVs. These SUVs will be equipped
with batteries made in North Carolina, the United States,
where we are bolstering production capacity.
In China, along with the bZ4X and the bZ3, which was
announced in March 2023, we launched one BEV model
locally developed to fit local needs in 2024 and plan to
launch a second in 2025. We will continue to increase the
number of models in subsequent years.
In Asia and other emerging markets, we will diligently work
to meet rising demand for BEVs. Specifically, we have com-
menced local production of BEV pickup trucks launched in
2023, and smaller BEV models will be introduced in the future.
In developed countries, the switch to BEVs is expected to
advance as markets mature. Meanwhile, in emerging coun-
tries, markets are anticipated to expand due to new auto-
mobile launches as well as increases in the number of
existing models on the market.
With a full lineup of profitable HEVs and PHEVs and a
growing selection of diverse BEV options, Toyota will steadily
meet wide-ranging global demand and pursue further growth.
Response to Growth of Emerging Markets with
HEVs as a Source of Income
Increasingly more profitable HEVs will be positioned as a source
of income for use in addressing the growth of emerging markets.
With a value chain of over 10 million units, we will also
work to capture a wide range of business opportunities. In
addition, we will make the most of cost reductions achieved
by leveraging the strengths of TPS and of the benefits of
kaizen (continuous improvement).
We thereby expect to be able to generate greater future
investment capacity for the expansion of BEVs and the mobility
domain, and we will seek to build a strong business foundation
whereby carbon neutrality and growth can both be achieved.
Efforts to Be Deeply Accepted by Local Communities
Next, I will explain how we will work to implement the Toyota
Mobility Concept.
With technological innovations in electrification, intelli-
gence, and diversification progressing, we will ambitiously
work toward contributing to local communities and the
greater good through industry from a broader perspective.
For example, in the United States, the automotive industry
is facing major challenges, with people moving away from the
manufacturing sector and structural costs increasing.
By combining worksite-honed craftsman skills with intelli-
gence to propose new manufacturing and automation processes,
we can give back to the United States by keeping manufacturing
in the country while helping solve the labor shortage problem.
We also announced an overview of collaboration ventures
with the Charoen Pokphand Group and the Siam Cement
Group in Thailand on April 3, 2023.
Such collaboration is the start of the implementation of
electrification and connected technologies to link vehicles,
people, commodities, and information and to utilize mobility
as if it were part of social infrastructure.
Through these initiatives, we will take on the challenge of
solving such local problems as heavy traffic congestion, air
pollution, and frequent road accidents.
We believe that this approach is one way of implementing
the Toyota Mobility Concept.
While leaving no one behind, contributing to the achieve-
ment of carbon neutrality, and addressing local social issues,
we will advance our transformation into a mobility company.
The source of further growth will be to have people in
each region happy to see Toyota growing and doing more in
their communities.
We will strive to align our standards and ways of thinking with
the broader communities where we operate and look inward at
ourselves from the outside. With flexible thinking and a willing-
ness to take on challenges, we will promote positive action.
Putting these principles into practice, we will grow as a com-
pany that is even more deeply accepted by local communities.
Toyota’s Vision for the Mobility Society Region-Centered Management
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
Global Lineup for Addressing Electrification Trend and
Growth in Emerging Markets
Emerging
Countries
Developed
Countries
Growth and
electrification
Electrification
10 million units
More than 10 million units
Breakdown of Business Growth
HEVs
HEVs
BEVs
BEVs
PHEVs
HEVs
HEVs
39
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
In an era in which the path forward is not clear, we will be
required to transcend the boundaries between development and
production and work together in a manner similar of a start-up
company to shape the future if we are to enhance the strengths
of Toyota’s genba (front lines). We will also need to create plants
where everyone is empowered to contribute and succeed.
Unmatched Strengths of Toyota’s Monozukuri
Toyota’s manufacturing genba has many key strengths.
One strength can be seen in how the founding spirit of want-
ing to make someone else’s work easier and make everyone
smile, which has been present since the Company’s inception, is
still alive and well at Toyota’s genba and can be sensed through-
out the entirety of the organization. The unique driving force of a
start-up company that was seen when Sakichi Toyoda invented
the automatic loom continues to be a part of Toyota even today.
This force propels us to create something from nothing, make
improvements, and introduce the world to appealing products.
Another strength comes from our success in handing down
the superior skills and techniques that underpin our monozukuri
to each new generation of employees. Even when we utilize
automation, human operators teach robots the skills used to
achieve both high quality and high productivity while also raising
the level of their own skills and, in turn, teaching robots more
advanced skills. This cycle drives the ongoing refinement of
Toyota’s skills and techniques.
A third strength is the effectiveness of Toyota’s genba in our
training of human resources. The power of our genba comes
from entrenching the Toyota Production System (TPS), having
everyone act with a passion for manufacturing and pursuing
kaizen (continuous improvement), and training people to adopt
this approach. This genba power has enabled us to create a full
lineup of automobiles that generates annual sales volumes of
over 10 million units by responding to the diverse needs of our
customers.
The automotive industry is undergoing a massive transforma-
tion, and this upheaval is placing the survival of players in the
industry at stake. In such a time, it is all the more important to
effectively hand down Toyota’s unique techniques and genba
power—the monozukuri strengths that only Toyota possesses.
Evolution of Monozukuri
Toyota aspires to change the future of automobile manufactur-
ing through its expert craftsmanship. To accomplish that, we
need to evolve our monozukuri through the fusion of skills and
techniques with digital and innovative technologies and to
shorten lead times so that we can swiftly and continuously take
on new challenges.
Toyota has a TPS-based technique called lead-time reduction.
The strength of Toyota’s monozukuri lies in our ability to increase
the speed of evolution and respond to the changing times.
We also aim to change the future of monozukuri by changing
plant environments. To do this, we will even go as far as to break
the status quo of our production divisions.
We look to halve the number of processes using Toyota’s
techniques along with digital and innovative technologies. At the
same time, we will eliminate the barriers between development
and production to swiftly provide new mobility. In addition,
efforts will be made to resolve issues at the foundation of our
monozukuri, including those related to the carbon neutrality of
plants and logistics. All these objectives will be achieved using
the power of Toyota’s genba through a mutually beneficial rela-
tionship between people and technology.
Toyota has been, and always will be, a pioneer, shaping the
times and mass-producing happiness for all by creating people-
centered genba where work is done to bring smiles to others, where
gratitude overflows, and where people can work with enthusiasm.
Time of massive transformation
Commitment to changing the future of automobile
manufacturing through expert craftsmanship
Founding Spirit
Superior Skills and
Techniques
Effectiveness of Genba in
Training Human Resources
Fusion of skills and tech-
niques with digital and
innovative technologies
Ability to take on new
challenges swiftly
and continuously
Evolution
Toyota’s Expert Craftsmanship
Toyota’s Vision for the Mobility Society
Human-Centered Automobile Manufacturing Our Inheritance of Craftsmanship
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
Inherited
Craftsmanship
We will change plant environments and the future of automobiles
through human-centered monozukuri (manufacturing).
The advanced technologies that will change the future of automobiles take shape at the
manufacturing genba.
40
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
The environment surrounding the manufacturing industry is
undergoing major changes, such as declining work popula-
tions, the changing lifestyles of people, and rapid technologi-
cal advancements, and accordingly the industry is facing
various challenges.
Recognizing this situation as a significant opportunity for
change, we will come together with our employees, our sup-
pliers, and local communities to envision and realize our ideal
factory of the future that will invent our path forward and
produce happiness for all, so that monozukuri (manufactur-
ing) continues to bring excitement to Japan and the rest of
the world 10 years from now and beyond.
In 2024, we launched a Factories of the Future Team,
which aims to establish a vision for our factories 10 years
from now and to consider future workstyles for employees
working in these factories. Guided by this aim, the team is
currently examining concepts for future factories.
In addition, by pursuing changes in not only the environ-
ment of factories but also workstyles, the team aims to real-
ize sustainable human-centered monozukuri focused on
employee fulfillment and productivity. By doing so, the team
is promoting the creation of attractive future factories that
enable employees to experience the happiness and joy of
monozukuri.
Ensuring Satisfaction
By adopting cutting-edge technologies and fully automating
arduous tasks, we will shift our employees’ focus to highly
skilled tasks that provide high added value. At the same time,
we will create a workplace where diverse people can grow and
gain a sense of satisfaction and happiness through their work.
Over the years, we have cultivated genuine, robust
monozukuri capabilities through our employees’ commitment
to Toyota’s structures and systems. Going forward, utilizing
these capabilities as a foundation, we will develop our facto-
ries into a place with structures and systems tailored to our
employees, where diverse people of all genders, ages, and
capabilities can play an active role and work comfortably,
and where people desire to work. To that end, we are con-
ducting pilot tests to transition from conventional values and
systems and are working to create new standards to be
deployed on our factory floors.
For example, those who aim to balance childcare or nurs-
ing care will be able to work on their own time. To enable
senior citizens, even those with declines in physical strength
or visibility, to continue their involvement in car manufactur-
ing for as long as desired, we will revise manufacturing
processes and systems and strive to change our workplace
culture and mindset while expanding the environment in
which diverse people can play a diverse and active role.
We will also provide opportunities for education on AI,
robotics, and digital technologies so that employees con-
tinue to develop within the changing environment.
Enhancing Productivity
Anticipating a declining global workforce 10 years from now,
rather than focusing on conventional drivers of production
efficiency, we will promote the advancement of diverse per-
sonnel and pursue significant automation and labor-saving to
further evolve the structure and monozukuri of automobiles.
• Redefine productivity and expand the range of human-friendly
processes in which diverse people can play an active role
• Reduce lead times through automation and labor-saving via
the use of cutting-edge technologies (including digital
transformation, robotics, and AI)
• Pursue the advancement of innovative processes that
enhance both vehicle structures and manufacturing
Toyota’s factories should be a place where monozukuri continues to bring
excitement 10 years from now and beyond.
Toyota’s Vision for the Mobility Society Human-Centered Automobile Manufacturing
Factories of the Future
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
Two Essential Axes for Future Factories
Sustainable Human-Centered Monozukuri
Human–
robot
collaboration
Structural
reform
Digitalization
Parts
inventory
management
Automation
Changes to
monozukuri
processes
Human resource
development
Diversity
Work environment
Relationships
Skills
development
Multiple
career
options
Sense of
accomplish-
ment and
growth
Contributions
to local
communities
and society
Rewarding
work
conditions
Partnerships
with suppliers
Ensuring Satisfaction
Productivity
41
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
positive outlooks and thereby will become a vessel for the
dreams of a diverse range of people.
Moreover, Toyota is developing new business styles grounded
on the principles of diversity. These efforts are founded on our
desire to help everyone—including people who face challenges in
working on the front lines due to disability, illness, injury, or the
need to work shortened hours to look after children or family
members—make contributions and feel motivated in their work.
For example, people working shortened hours or who are
unable to engage in work under the normal two-shift system are
entrusted with tasks such as process improvement activities,
using computer-aided development, AI, serial input/output con-
trol, or programming, or with the creation of new processes, such
as waste-recycling activities. This approach enables these indi-
viduals to acquire new skills pertaining to process improvement
and other activities, which will expand their range of contribu-
tions should they return to conventional workplace environments.
Furthermore, the new processes created at Challenged Park can
then be assigned to individuals with disabilities or to employees
of Toyota Loops Corporation* to broaden their possibilities for
contributing to manufacturing operations and thereby make
everyone feel more empowered at Toyota.
Challenged Park was originally established as a new diversity
organization within the Machining Division based on the strong
desire of the division’s general manager. Today, however, the role
of this organization has been expanded to include activities at
the Companywide level. The organization is also offering support
for making work easier for people working at the employment
support center of Toyota City and otherwise contributing to
making the city even better for everyone.
To help create the factories of the future envisioned by
Toyota (see previous page for details), the Company is developing
production lines on which anyone, including women, senior citi-
zens, and people with disabilities, can contribute. Also, we are
broadcasting information on the new diversity initiatives being
implemented at the Honsha Plant throughout the Company.
* Toyota Loops Corporation is a special-purpose subsidiary established with the
goal of expanding opportunities for employment for people with disabilities and
forging new connections among workplace colleagues and with society. To this
company, Toyota Motor Corporation outsources parts assembly, cleaning, nurs-
ing care assistance, office support services, and various other tasks.
Example of Process Improvement Activities:
Improvement of Power Line Recyclability via
Disassembly
Disassembly of waste power lines and sorting of materials
into outer coating, inner coating, and copper wires allow
these resources to be reused or recycled.
Benefits: ¥10 million per year
Toyota’s Vision for the Mobility Society Human-Centered Automobile Manufacturing
Empowerment of Diverse Human Resources
As part of its transformation into a mobility company, Toyota is
pursuing never-ending evolution in its existing business fields
while exploring new fields and working to ensure that human
resources with diverse talents and values are able to fully
exercise their skills.
To facilitate these efforts, we set up Challenged Park within the
Honsha Plant, in Toyota City, Aichi Prefecture, in April 2023.
Challenged Park was established with the goal of ensuring
inclusion for all and is meant to serve as a site for creating and
testing new and flexible workstyles. We hope that this facility will
help people who face challenges in working to adopt more
Comment from Mother of Four
My ability to work is sometimes impacted by the need
to drop off or pick up my kids or to look after them
should one become sick. At Challenged Park, there are
a lot of people facing similar circumstances. As such, I
am able to have peace of mind at work, feeling grate-
ful for their understanding, whereas in the past I would
often feel bad about how I was inconveniencing others.
Comment from Woman Working at Toyota Loops
In the past, my work involved office delivery and clean-
ing tasks. Today, I am working on a production line and
taking part in car-making. I find this position really
motivating. I also feel pride in knowing that people are
driving the cars I helped build, and I look forward to
continuing to build cars.
Comments from Employees
Working at Challenged Park
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
Power line materials
and plastic
products from
material recycling
Thermal recycling
fuel oil, solid fuel
Reuse
power lines,
copper products
Materials
Previously
Treated as Waste
Power lines, wires
Outer Coating
Inner Coating
Copper Wires
Sorting Process
Newly Recycled
Materials
Collection
Recycling
Sorting
42
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Toyoda
It took a lot to get here. I’d like to thank you
all again. Thank you very much.
I was president for 14 years, and one thing I often said
during that time was “Let’s make even-better cars.” Over the
years, I had a lot of people ask me what an “ever-better car”
was. To this, I would respond by saying that everyone should
think of that for themselves.
With regard to the LBX, all I asked for was to make a car
that is like a sneaker.
The development team never asked me directly what sort
of car constitutes a sneaker. If I had said what I meant by
sneaker as Morizo, I don’t think the LBX would exist. There
were three key players in the development team: the chief
engineer, other experts, and driver Sasaki, who mentors me,
Morizo. The LBX was born out of the process of these players
exploring questions like: “What kind of car would be like a
sneaker?” “What type of car might make Morizo smile?” and
“What would be a good new genre for Lexus?”
Sasaki
When I heard the request for a “car that’s just
like a sneaker,” I imagined a sort of car that is
comfortable, with a casual yet stylish look, and suitable for
anywhere, one that matched both the place and the driver.
Chief Engineer Kunihiko Endo and I ran our ideas for this
car by each other on several occasions.
Toyota’s Vision for the Mobility Society Human-Centered Automobile Manufacturing
Lexus LBX
The “Sneaker” Taking Steps from Iwate to the
World: Thoughts behind Developing the LBX
“I want you to make a car that’s like a sneaker.”
This was the request from Akio Toyoda, then president and now chairman of Toyota, that launched the development of the Lexus LBX.
At a kick-off party held in April 2024 at the Iwate Plant of Toyota Motor East Japan, Inc., where production of the new LBX had begun,
Akio Toyoda, also known as master driver Morizo, and development driver Masahiro Sasaki spoke of the background for the development
of this new vehicle.
One reason why Toyota Motor East Japan was chosen to produce the LBX was Toyoda’s desire to contribute to the ongoing process of
reconstruction from the impacts of the Great East Japan Earthquake.
Toyota Motor East Japan was founded in 2012, the year after this devastating earthquake, in an area that was heavily impacted by the
disaster. Since then, its factory has continued to act as a venue for employment, the number of suppliers that provide parts to this com-
pany has increased, and the tax revenues it generates for the local government have grown. These are all ways that Toyota Motor East
Japan is contributing to the reconstruction of the damaged areas.
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
Masahiro Sasaki
Development Driver
43
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Our initial design was rejected by Morizo, but the next
design was amazing. I remember being stunned by this really
attractive car, characterized by large tires and substantial
fenders with just the right amount of curves. I often say that,
from behind, the car looks like kagami mochi, the two-ball
mochi (rice cake) stacks put out as decorations at New Year
in Japan. The design with a smaller ball on top of a larger ball
illustrates a low center of gravity that makes it look well-
balanced. This is the type of car that we ended up with.
Toyoda
In the past, Toyota cars looked like whiskey
barrels, with the middle sticking out and
the lower part slightly narrower, but now our cars look like
kagami mochi. I’m not an engineer, but before becoming a
master driver, I studied design and drivability a lot. The Toyota
cars that left an impression on me all have something in
common. They all have that kagami mochi shape. I suspect
that the development process began with looking into what it
means for a car to drive like a Lexus and what it meant to
have a racing driver on the development team.
Sasaki
As a racing driver, I’m really good at making
cars faster, and I want to build cars that
corner well. You steer with the front wheels of a car. The back
follows the traction, but the rear tires want to go straight. In
order to turn well, you need to slide the back out so you are,
in essence, drifting.
When we had Morizo drive a car designed based on this
principle, he told us it was difficult to drive. That taught me a
lot; a car can’t just turn by sliding its back, it needs to turn
with its front wheels while keeping the back firmly on the
ground.
Toyoda
Racing drivers try to get the best out of a car
while matching it with the individual’s skills. I
think the team must have debated a lot over what type of car
would allow Morizo to enjoy driving the most at my skill level.
I didn’t give them the answer; all I did was assign the
chefs, and they found the dish that best fits the customer.
That dish was the LBX.
Sasaki
The other day, Morizo and I went driving on
the roads of Iwate Prefecture in the LBX. I
feel that Iwate’s roads are very similar to those of Europe.
They see a lot of snowfall, and they are bumpy, unlike the flat
roads of Tokyo. Morizo praised how if felt driving on those
bumpy roads. We had worked hard to get the right body rigid-
ity and undercarriage to ensure the car was well-
balanced, even on bad roads, and we were praised
for this.
Toyoda
Roads build cars and people. I
think that understanding what
roads Sasaki has driven on and what roads shaped
his driving skills will lead to greater coordination
and ever-better cars.
One car is made by many people working
together. A car is something that cannot be made
by one person; it requires coordination between
people at the plant, suppliers, and sales staff.
It’s the job of a master driver to understand
that starting point. So, in that sense, I’m glad I was
able to drive on the roads of Iwate in this car and together
with Sasaki—both born here in Iwate.
After the Great East Japan Earthquake, Toyota acted on
its desire to contribute to the afflicted regions through its
business, develop an automotive industry rooted in this busi-
ness, and never forget this disaster. At the Iwate Plant, I was
reminded of how cooperation based on a mutual sense of
appreciation is a sure way to create results that are reflected
in the numbers.
I believe we need the automotive industry to energize
Japan. It is my desire to energize a lot of people in and around
the Tohoku region so that we can deliver news that will ener-
gize people across Japan. I hope you will all lend us a hand in
the belief that, if we don’t work hard, we cannot make every-
one happy.
Toyota’s Vision for the Mobility Society Human-Centered Automobile Manufacturing
Lexus LBX
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
44
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
The world premiere of the new Land Cruiser 250 Series took place in Tokyo on August 2, 2023. The event showcased a lineup of
Land Cruisers which, since the 1951 Toyota BJ model, have charted new roads in roughly 170 countries and regions. The event also
presented the Land Cruiser 70 Series, which will be reintroduced in Japan as a regular model.
Simon Humphries, Toyota’s chief branding officer and senior general manager of design, took the stage as presenter to outline
the Land Cruiser’s history and the concept behind the latest model.
The history of the Land Cruiser is a history of
Toyota.
It is no exaggeration to say that the history of the Land
Cruiser is a history of Toyota itself. Let us reflect on exactly
72 years ago, when the Land Cruiser legend was born. It was
the time of Kiichiro Toyoda, founder of Toyota Motor
Corporation. The Company was only 14 years old and was
proving to be a disruptive “start-up” in the automotive world.
The Corolla and the Crown had not yet been created, and
Toyota was hardly known outside Japan. Fast forward to
today, and the Land Cruiser is sold in about 170 countries and
regions around the world. The Land Cruiser is what literally
put Toyota on the map.
The car makes the road.
Lifelong bonds are often formed in the most demanding of
circumstances, and our customers have experienced the
extremes of life alongside their Land Cruisers. From prairies
to deserts, from the North to the South poles, it is safe to say
the Land Cruiser has seen more sides of life than any other
automobile in history. Mud, ice, sand, salt—across the planet
there are many perilous roads. At Toyota, we often say “the
Toyota’s Vision for the Mobility Society Human-Centered Automobile Manufacturing
Land Cruiser 250
The Vehicle That Takes You Wherever You Need to Go and Always
Brings You Back
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
road makes the car.” With the Land Cruiser, however, “the car
makes the road.”
These roads connect communities and enable irreplace-
able ways of life.
— In rural Africa, a doctor rushes to a patient through
floodwaters.
— In the Australian outback, an elderly woman takes a two-
day round trip to the nearest town.
— In Antarctica, an observation team works in a minus
45-degree blizzard.
In fact, one of the first cars to fully traverse Antarctica
was a Land Cruiser 40 Series.
Shifting gears to one of the hottest places on Earth, the
first exports of the Land Cruiser were to the Middle East in
the mid-1950s. Thanks to Saudi Arabian car distributor Abdul
Latif Jameel, there is now a local folklore that says, “Only a
Land Cruiser, or a camel, can get you over these dunes.”
Back to the Origin—“250” World Premiere
Signals New Chapter in Land Cruiser Legend
45
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
The value of the Land Cruiser
The story of the Land Cruiser began in Japan, in an area only
accessible on horseback. In 1951, on the steep volcanic
slopes of Mt. Fuji, the development of the first-generation
Land Cruiser, the Toyota BJ, started at the request of the
Japan National Police Reserve.
This sounds like the perfect story, but in reality, the first-
generation Land Cruiser lost out to the competition and was
not selected by the police reserve. However, the Land Cruiser’s
engineers turned this setback into a steppingstone to demon-
strate their strength. Through this determination, the Land
Cruiser became the first-ever vehicle to reach the 6th station
of Mt. Fuji, an altitude of 2,700 meters. This resilience paid off;
the Land Cruiser was commissioned as a police patrol car and
its goal as a vehicle became clear—to protect livelihoods.
At this event, there are many examples of Land Cruisers
throughout the years. What unites all these models is simple:
their ultimate mission is to take you wherever you need to go and
always bring you back. If a Land Cruiser breaks down, it is not just
a matter of inconvenience; it can become a threat to life itself.
The value of the Land Cruiser comes down to one word—trust.
The trust of passengers to put their lives in its hands.
Keeping the legend alive
The Toyota BJ that laid that foundation of trust has a direct
descendant—the 70 Series. This workhorse vehicle has risen
to icon status —the legend itself. We received many com-
ments from fans on social media, pleading with us not to ever
discontinue sales of the Land Cruiser and not to change a
thing with our new model.
We listened carefully to this feedback, and I am pleased
to reveal today that we committed to updating the 70 Series
to keep that legend alive. Seeing this refreshed Land Cruiser
70 Series positioned next to its ancestors, there is no ques-
tioning its loyalty to its roots. It is proud to be raw and utili-
tarian. Under the revised
bodywork, we made just
the updates functionally
necessary: a new, more
efficient engine and trans-
mission and the addition of
advanced safety features.
Going back to the origin reveals the soul of the
Land Cruiser.
If the 70 Series is the essence of the Land Cruiser, then the flag-
ship Land Cruiser 300 Series is the pinnacle. Today, however, I
want to talk about what lies between those two worlds. Today is
all about defining the core of the Land Cruiser. The Land Cruiser
was first introduced by the grandfather of Chairman Akio
Toyoda, and the vehicle has a special meaning for Toyota as a
whole. When it came to developing the new core model,
Chairman Toyoda’s task to us was quite simple: genten kaiki.
Taken literally, this Japanese means “Back to the origin.”
Chairman Toyoda intentionally provided no further details. It
was up to us to work it out. Our immediate reaction was to
look backward. Do we reinvent the bare-bones 70 Series? Do
we go retro? No, these options were too obvious.
He was giving us a chance to hit the reset button: to reas-
sess the real meaning and values of the Land Cruiser in
Toyota’s portfolio and to create a vehicle that distilled those
values so they would act as a foothold to the future.
We embraced that chance to define the unwavering core
beliefs of the Land Cruiser and put them into a form that
would transcend trends—a product in which all our customers
could place their unconditional trust. When we introduced
our proposal for the new Land Cruiser to others, they were
equally unwavering: “Let’s do it,” they said. Ladies and gentle-
men, I present to you the new soul of the Land Cruiser.
Redesigned from the ground up
As a member of the development team, and a long-term Land
Cruiser owner myself, seeing the new model come to life was
a dream come true. We reassessed every past aspect of the
Land Cruiser for its relevance and redesigned it from the
ground up to embody Land Cruiser values for the modern day.
The new Land Cruiser is honest, lean, agile, and fit for pur-
pose. I will now introduce the five key areas that make this
model the true soul of the Land Cruiser.
Toyota’s Vision for the Mobility Society Human-Centered Automobile Manufacturing
Land Cruiser 250
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
46
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
1 Capability
The first area is capability. At the core of the vehicle’s robust
build is the GA-F platform. Reliability and durability are built
into the vehicle, and its performance over rough terrain is on
a par with that of the flagship Land Cruiser 300 Series. This
capability is now more practical and accessible than ever; it is
the first Land Cruiser to have electric power steering, rather
than hydraulic, which improves ease and comfort on-road and
reduces kickback off-road.
2 Choice
The second key area is choice. As the Land Cruiser traverses
terrain all over the world, the powertrain lineup reflects
diverse regional requirements. For the first time, this lineup
includes a hybrid powertrain in a Land Cruiser. This tried-and-
tested technology increases fuel efficiency, as well as perfor-
mance, without compromising durability. It was an extremely
difficult task to introduce this technology, but doing so has
allowed customers in all corners of the world the chance to
participate in the journey toward carbon neutrality.
3 Intuitive operation
The third area is intuitive operation. Vehicle control is funda-
mental to building trust between driver and machine. We
designed the cockpit controls to be easy to identify and oper-
ate simply by feel alone. To that extent, we sought the exper-
tise of Dakar Rally champion Akira Miura, who has a wealth of
experience driving under pressure in extreme environments.
He told us it is crucial that the human–machine interface
supports the driver with maximum accuracy and minimal
effort, whatever the conditions.
4 Beauty is function.
Beauty is function is the fourth area. Every aspect of the vehi-
cle’s design is based on the premise that beauty comes from
functionality. There are rough roads around the world that only
the Land Cruiser can traverse. For this reason, we calculated
the proportions for maneuverability in extreme environments.
The sides have been kept slim, the overhangs short, and the
corners carefully sculpted. The low belt line, narrow A pillars,
and angular structure have been designed for visibility and
easy, accurate orientation. Customers also reminded us of the
importance of damage mitigation and repairability. The high-
mounted headlights are designed to rise above debris—and
long savanna grass. The segmented front bumper is designed
to be easy to repair. But the objective approach to design and
functionality was not our entire focus. Great effort was placed
on creating a subjective feeling of trust. For example, the
wheel-to-body offset imparts a feeling of
strength and stability, giving the driver confi-
dence in the capability of the vehicle. Every
design choice we made has a story and a
reason.
5 Reach even more people
The final key area is to reach even more
people. I am proud to announce that the Land
Cruiser is coming back to the United States.
Mobility as a lifeline
By returning to the origin, we ended up looking toward the
future. This genten kaiki journey was a soul-searching exer-
cise in many respects. As a mobility company, we believe that
freedom in motion is a universal right. One to be enjoyed by
everyone in the world, wherever they live. The Land Cruiser
development process reminded us that, in many parts of the
world, individual mobility is not a luxury but a lifeline. Our
customers place their trust in us to keep the Land Cruiser rel-
evant and thriving toward the future. Doing so could mean
anything—from pursuing carbon-neutral approaches to
ensuring that the Land Cruiser brand is more affordable and
within reach of even more people around the world. Or, it may
even mean exploring new approaches to mobility that
enhance not only the Land Cruiser experience but also fur-
ther people’s freedom in motion. Suffice it to say, there are
lots of exciting paths to changing the future of cars.
Toyota’s Vision for the Mobility Society Human-Centered Automobile Manufacturing
Land Cruiser 250
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
47
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Woven City
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
TOYOTA Woven City, a Test Course for Mobility:
Producing Well-Being for All
Toyota aspires to transform into a mobility company. On our
road toward accomplishing this goal, Woven City will function
as a venue for creating new value. Toyota and its group com-
pany Woven by Toyota, Inc., are advancing the Woven City
project. Construction of the buildings for Phase 1 of this
mobility test course project were completed in October
2024, and actual demonstration tests using the facility are
scheduled to begin in fall 2025 or thereafter. Access to this
facility will not be limited to the Toyota Group. Rather, we
hope to make Woven City a place where external stakehold-
ers who share our desire to act “for others” can also use the
environment, in which people actually live, to create new
mechanisms and services to help shape a better future and
enhance well-being for all.
Testing of Mobility of People, Goods,
Information, and Energy
In its quest to become a mobility company, Toyota is adopting a
broad definition of mobility that goes beyond simply movement
in physical spaces. The word “move,” from which “mobility” is
derived, can refer to movement from point A to point B as well as
to the feeling of being emotionally moved. Accordingly, Toyota
views “mobility” as referring to things that can move people both
physically and emotionally. Thus, at Woven City we will start
testing the mobility of people, goods, information, and energy.
“For others” and “for a better future”—they are what
Woven City is founded on. Not for short-term gains, it is a
long-term investment in, and a commitment to, a brighter
tomorrow.
48
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Woven City
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
Why does Toyota carry out to such a degree? That is
because we believe we have a responsibility, as a corporate
citizen living on this planet, to invest in the collective future,
to share the insight and technologies amassed by Toyota over
the years, and to help create ideas that benefit people and
the world. To fulfill this responsibility, Woven City is where we
develop products and services for enhancing future well-
being for all.
“Come and join”, Team of Like-Minded Inventors
and Weavers
Woven City is a test course for mobility in the form of a city,
based on the concepts of A Living Laboratory™, Human-
Centered, and Ever Evolving City™. The people involved in the
Woven City project are referred to as “Inventors” and
“Weavers.” Inventors are Toyota Group companies as well as
the like-minded outside companies, research institutions,
start-ups, and other organizations who have joined this quest
for expanding mobility. Five companies have already raised
their hands to accompany us on this journey, and they plan to
use the mechanism of Woven City to conduct tests that capi-
talize on their respective strengths.
Company
Business Description
Theme of Co-Creation
in Woven City
Daikin Industries, Ltd.
Manufacturing, sales
and after-sales services
of air-conditioning prod-
ucts, fluorochemical
products, etc.
Testing pollen-free spaces
and personalized func-
tional environments
DyDo DRINCO, INC.
Manufacturing and sales
of soft drinks and other
beverages, etc.
Creating new value
through innovative vending
machine concepts
NISSIN FOOD
PRODUCTS CO., LTD.
Manufacturing and sales
of instant noodles and
related products, etc.
Creating and evaluating
food environments to
inspire new food cultures
UCC Japan Co., Ltd.
Regional headquarters
of Japanese operating
companies engaged in
coffee manufacturing
and sales
Exploring the potential
value of coffee through
futuristic cafe experiences
Zoshinkai Holdings Inc.
Comprehensive educa-
tional services offering
correspondence educa-
tion and classroom
programs
Leveraging data to realize
innovative educational
methods and new learning
environments
Note: As of January 7, 2025
Toyota plans to launch an accelerator program in summer
2025 to invite start-ups and entrepreneurs to utilize Woven City.
Toyota and Woven by Toyota will also take advantage of
Woven City to conduct tests as Inventors. We expect to test our
e-Palette as an autonomous driving service platform and smart
logistics automation concept for logistics.
The products and services developed by Inventors and
exhibited at Woven City will be tested by Weavers, the residents
and visitors. These individuals are indispensable to the testing
processes and co-creation activities and will serve a similar
function to the test drivers who take part in the automobile
development process. Their contributions to tests will come in
the form of the feedback they provide with regard to the prod-
ucts and services being tested.
At the time of the official launch (start of testing) of Woven
City, scheduled for fall 2025 or thereafter, approximately 100
residents—primarily Toyota and Woven by Toyota staff and their
families—are expected to reside in Woven City as Weavers. The
community will then gradually expand
to include external Inventors and their
families. Phase 1 is projected to
accommodate around 360 residents,
with the total population of Woven
City expected to reach approximately
2,000 in the future. Initially, visitors
will be limited to related parties, with
plans to welcome the general public
to participate as Weavers in co-
creation activities starting in fiscal
2026 and beyond.
Both Inventors and Weavers are united by their commit-
ment to Toyota’s goal of working for others. Guided by this
shared commitment, the like-minded individuals gathering at
Woven City will band together to pursue the goal of produc-
ing happiness for all through the expansion
of mobility.
Testing Using Toyota Assets and Feedback from
a Physical Environment
Woven City provides a mechanism that acts as the founda-
tion for demonstration testing. Inventors are able to acceler-
ate their testing and development activities by receiving data
and feedback from the Weavers in Woven City and by using
the Company’s assets.
These assets include the hardware mass production
expertise of Toyota as well as the software technologies of
Woven by Toyota. Such assets can be utilized to support
Inventors in developing new products, services, software, and
applications. Moreover, data and feedback gained from physi-
cal environments can be incorporated into the testing and
development of hardware and software. The development
and testing possibilities granted by the Company’s assets and
49
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
physical environment data and feedback are key characteris-
tics of the mechanism of Woven City.
Another characteristic of this mechanism is how it pro-
vides a physical environment modeled after a city. This char-
acteristic makes it possible to recreate simulations
conducted in digital environments using digital twin technol-
ogies in a physical environment to gain additional feedback.
The incorporation of this feedback into digital simulations
enhances the accuracy of said simulations. This cycle of digi-
tal and physical verification can be advanced rapidly to
accelerate testing and development activities. Moreover, our
digital twin technologies are not only applicable to Woven
City; they can also be used in relation to other areas like fac-
tories, logistics, automated driving, and traffic safety.
Toyota shares these assets with Inventors. Woven City is
designed for collaboration. By combining the strengths of
Toyota with those of partners in other industries and special-
ized fields, we aim to create unprecedented new value, prod-
ucts, and services.
As Woven City is an Ever Evolving City™, we will be carry-
ing out kaizen, or continuous improvement, which will never
end.
Pedestrian-only roads, mixed pedestrian and personal
mobility roads, and autonomous mobility-only roads are the
three types of threads that weave the fabric that is Woven
City to allow for tests that comprehensively evaluate factors
pertaining to people, mobility, and infrastructure. The goal of
this approach is to help realize the safe and secure mobility
society that Toyota envisions. Up until now, Toyota has pur-
sued this vision by focusing on the development of automo-
biles and working to make ever-better cars on dedicated
automobile test courses. However, realizing a truly safe and
secure mobility society requires that we expand our focus
beyond automobiles and other forms of mobility to also con-
sider the people who use these mobility options and the
infrastructure that supports mobility.
It is said that only around 5% of a car’s time in existence is
spent being driven. How the remaining roughly 95% is spent is
something that we will investigate by incorporating real
feedback at Woven City, a physical environment that is home
to people, mobility, and infrastructure.
Quest to Become a Mobility Company That Moves
People’s Hearts
Woven City will see its official launch in 2025. This city will be
used as a proving ground for creating true mobility that moves
people’s hearts, paving the way toward the next generation of
mobility, and crafting a society that unlocks the full potential
of people. This is our vision for expanding mobility, and for
Woven City itself. Together with allies who share our vision, we
will leverage Woven City to further our transformation into a
mobility company that will help weave the future.
Timeline
January 2020
Announcement of concept at CES 2020
February 2021
Phase 1 Groundbreaking Ceremony; start of site prepa-
ration work in March 2021
October 2022
Phase 1 safety prayer ceremony; start of building work
for Phase 1 in November 2022
October 2024
Completion of Phase 1 construction
Fall 2025 or later
Phase 1 official launch
Woven City
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
Connecting the Past to the Future—Transformation of
Former Higashi-Fuji Plant into Woven City
Woven City is being constructed on the site of the former Higashi-
Fuji Plant of Toyota Motor East Japan, Inc. This plant functioned as a
production site for Toyota for 53 years, starting in 1967. At its peak,
the plant had about 2,000 employees, and around 7,000 individuals
worked there over its history, producing such diverse vehicles as the
Corolla Levin and the Century as well as the JPN Taxi, a vehicle that
required substantial durability.
The idea to transform the Higashi-Fuji Plant into Woven City
traces back to the Great East Japan Earthquake of 2011. Under
Chairman Akio Toyoda’s leadership, we sought to create jobs for the
region’s people, who were hit hardest by the disaster, by creating a
third base of operations in the Tohoku region. Guided by his strong
leadership, Toyota established Toyota Motor East Japan, Inc., in 2012.
However, the shift in production to the Tohoku region also led to the
difficult decision to close the Higashi-Fuji Plant.
When Toyoda, who was still president at the time, visited the
plant, a member of the plant’s staff approached him, thinking of his
colleagues who were unable to uproot their lives and move to the
Tohoku region due to family or other circumstances. Toyoda was
moved by their feelings for their colleagues, and this experience was
what first inspired the proposal to use the threads of the Higashi-Fuji
Plant, which remained unbroken for 53 years, to weave a brighter
future by creating a massive testing city.
Just as the members of the Higashi-Fuji Plant thought of their
colleagues, Toyota has continued to treasure the spirit of working for
others since its founding. This spirit was first seen in Toyota Group
founder Sakichi Toyoda’s drive to invent an automatic loom out of a
desire to make his mother’s work easier.
The name “Woven City” comes from the concept of how multi-
ple threads can be woven together to create a fabric that is stronger
than the threads themselves. It also encapsulates our hope that
Woven City, just like a fabric woven from threads of various colors,
will come to be a team project, advanced by diverse individuals to
accomplish feats that could not be done alone. Inheriting Founder
Sakichi’s desire to work for others, Woven City will be a proving
ground for creating innovations and paving the way toward the next
generation of mobility needed for producing happiness for all.
50
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy
Carbon Neutrality
The push for carbon neutrality is a matter of urgency if automobiles are to remain a necessary
part of society.
Efforts to provide our customers around the world with options for mobility under our multi-
pathway strategy, while also promoting the decarbonization of our monozukuri (manufacturing)
and supply chains, serve as the core of our activities.
It is important to consider the ways in which mobility takes into account the future of energy.
The multi-pathway strategy’s basic premise is that we need to move away from fossil fuels
from the perspectives of the global environment and sustainability. Furthermore, over the
medium to long term, renewable energy sources are expected to continue to proliferate, with
electricity and hydrogen emerging as the primary energy sources sustaining society. In the short
term, however, it is critical to acknowledge global realities and implement changes in practical
ways that maintain energy security.
That is precisely why we are committed to providing mobility options that are in tune with a
diverse range of energy situations and customer needs, while also keeping an eye on the future
of electricity and hydrogen. In short, the underlying concept of our multi-pathway strategy is to
focus on promoting a practical transition even as we pursue carbon neutrality.
Greenhouse Gas Reduction Targets
We are fully committed to the goal of achieving carbon neutrality
throughout the entire life cycle of our vehicles by 2050. We aim to reduce
the average greenhouse gas emissions of vehicles sold worldwide by more
than 33% by 2030 and by more than 50% by 2035 compared with 2019.
Global (including emerging countries)
Global greenhouse gas emissions per new vehicle (including emerging countries)
*2 Includes greenhouse gases emitted during the production of fuel and electricity in addition to green-
house gases emitted while driving
Diverse Options (Multi-Pathway Solutions)
Next-generation
BEVs expected to
be launched in
2026
Toyota sales vol-
ume to reach 3.5
million units per
year by 2030
Effective means to
reduce CO2 emissions
immediately
Development of
hydrogen engines
utilizing internal
combustion engine
technologies
Positioned as prac-
tical BEVs
Development of
PHEVs with EV driv-
ing range of 200 km
or more
Contributions to
CO2 emissions
reduction from
owned vehicles*1
*1 New and previ-
ously sold vehicles
Mass production and
commercialization of
vehicles mainly used for
commercial purposes
Annual number of
Toyota vehicles
equipped with fuel cells
anticipated to total
100,000 by 2030
Overview of the Multi-Pathway Strategy
Well-to-Wheel Greenhouse Gas Reduction Targets*2
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
Approx. 20 years
Approx. 15 years
30% reduction compared with 2000
2030 Target
More than 33% reduction compared with 2019
(SBTi 2030 target certified value)
2035 Target
More than 50% reduction
compared with 2019
2050 Target
Carbon neutrality
2019
2000
2010
2019
2030
2040
2050
2
51
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
BEV
Battery Electric Vehicle
BEVs are electric vehicles that lack
engines and are therefore powered
solely by motors. BEVs can run without
directly emitting CO2 while in operation.
Global Market Scale (2023)
9.1 million units
Projected Major Adopting Markets
China, North America, Europe
PHEV
Plug-in Hybrid Electric Vehicle
PHEVs feature rechargeable batteries
and, like BEVs, are capable of running
solely on electricity without emitting
CO2 in various situations as part of daily
use. For long-distance driving, PHEVs
can run on both motor and engine
power, offering a long driving range.
Operation is possible without charging
infrastructure
Global Market Scale (2023)
3.9 million units
Projected Major Adopting Markets
Developed countries, China
HEV
Hybrid Electric Vehicle
HEVs are hybrid vehicles that achieve
low fuel consumption by effectively
using two propulsion systems: an engine
and a motor.
No need for new infrastructure facilities
Global Market Scale (2023)
9.6 million units
Projected Major Adopting Markets
Emerging and other countries
CN Fuel
Carbon–Neutral Fuel
In conventional internal combustion
engines, Toyota seeks to utilize e-fuel
(synthetic fuel) and sustainable biofu-
els. Although CO2 is emitted during the
combustion of such fuels, they are
referred to as carbon neutral because
they are produced using CO2 found in
the atmosphere and thus have no effect
on the total amount of CO2.
No need for new infrastructure facilities
Can be used with already owned vehicles
Projected Major Adopting Markets
Emerging and other countries
H2
Hydrogen Engine Vehicle
Hydrogen engine vehicles use hydrogen
to fuel conventional internal combus-
tion engines. Despite being internal
combustion engine vehicles, these can
run with virtually no CO2 emissions while
in operation. Development of hydrogen
engine vehicles is underway geared
toward offering these vehicles as a new
option for the future.
Projected Major Adopting Markets
China, Europe, North America,
Japan
FCEV
Fuel Cell Electric Vehicle
FCEVs are fuel cell vehicles, also known
as hydrogen fuel cell vehicles. These
engine-less vehicles run on a motor
powered by electricity generated
through a chemical reaction between
the hydrogen and oxygen in the tank.
FCEVs can run without directly emitting
CO2 while in operation.
Global Market Scale (2023)
10,000 units
Projected Major Adopting Markets
China, Europe, North America,
Japan
Energy Situations by Region Source: STEPS scenario, World Energy Outlook 2023, International Energy Agency
Medium- to Long-Term Trends in Energy Use
Electricity
Carbon–neutral fuels
Hydrogen
Japan
China
North America
Asia and Oceania (Southeast Asia)
Europe (Excluding Russia)
Middle East and Africa
Central and South America
Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
References Source: Global unit sales (S&P Global)
Motor
Battery
Engine
Gasoline tank
Hydrogen tank
Fuel cell
(%)
(%)
(%)
(%)
(%)
(%)
Others
Renewable
energy
2023
2030
56
27
17
39
45
16
2023
2030
34
45
21
17
66
17
2023
2030
65
31
5
5
43
52
2023
2030
74
26
0
71
29
0
2023
2030
74
24
1
59
39
2
2023
2030
24
74
2
19
78
2
Thermal
power
(natural
gas, coal)
(%)
Battery
Motor
Gasoline
tank
Battery
Engine
Gasoline
tank
Engine
Engine
Fuel
cell
Battery
Motor
Motor
Gasoline
tank
Battery
Engine
Motor
Hydrogen
tank
Hydrogen
tank
2023
2030
64
23
12
40
37
23
52
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy
Full Lineup for Meeting Diverse Needs (Fiscal 2024)
Sales by Series
Sales by Series
Sales by Series
Sales by Series
Sales by Series
Sales by Series
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
FCEV 0.1%
BEV 0.2%
BEV 0.8%
Highlander
Tacoma
Camry
Aygo
Proace
C-HR
Hilux
Innova
Lexus ES
Land Cruiser
Sienna
Wildlander
Land Cruiser Prado
Fortuner
Prius
Hiace
Sienta
Corolla
Yaris
RAV4
Lexus RX
ICE
42%
Electrification
rate
58%
ICE
67%
Electrification
rate
33%
ICE
81%
ICE
63%
ICE
82%
HEV
19%
HEV
34%
HEV
18%
Electrification
rate
19%
Electrification
rate
37%
Electrification
rate
18%
Europe
(Thousands of units)
Series
Units
Yaris
356
Corolla
228
C-HR
105
Aygo
95
RAV4
90
Proace
83
Hilux
61
Lexus NX
27
bZ4X
22
Lexus UX
19
BEV 3.1%
FCEV 0.1%
(Thousands of units)
Powertrain
Units
ICE
346
HEV
732
PHEV
42
BEV
36
FCEV
1
Total
1,157
ICE
30%
HEV
63%
Asia (Excluding China)
Japan
China
North America
Other
PHEV
3.6%
(Thousands of units)
Powertrain
Units
ICE
642
HEV
857
PHEV
27
BEV
3
FCEV
1
Total
1,530
(Thousands of units)
Series
Units
Yaris
184
Corolla
150
Sienta
123
Prius
107
Hiace
79
Roomy
77
Harrier
71
Aqua
67
Noah
88
Voxy
80
(Thousands of units)
Powertrain
Sales
ICE
1,841
HEV
805
PHEV
61
BEV
22
FCEV
2
Total
2,731
(Thousands of units)
Series
Units
RAV4
580
Corolla
400
Camry
316
Highlander
242
Tacoma
226
Tundra
149
4Runner
139
Lexus RX
134
Lexus NX
88
Sienna
84
(Thousands of units)
Powertrain
Units
ICE
1,131
HEV
267
PHEV
4
BEV
2
FCEV
0
Total
1,403
(Thousands of units)
Series
Units
Innova
191
Hilux
179
Yaris
160
Avanza
129
Corolla
118
Fortuner
92
Agya
85
Vios
64
Glanza
51
Urban Cruiser
Hyryder
46
(Thousands of units)
Powertrain
Units
ICE
1,193
HEV
651
PHEV
6
BEV
52
FCEV
0
Total
1,902
(Thousands of units)
Series
Units
Corolla
541
Camry
215
RAV4
189
Wildlander
149
Sienna
126
Lexus ES
124
Highlander
123
Levin
109
Avalon
93
Harrier
50
(Thousands of units)
Powertrain
Units
ICE
1,301
HEV
282
PHEV
1
BEV
2
FCEV
0
Total
1,587
(Thousands of units)
Series
Units
Hilux
360
Corolla
264
Land Cruiser
158
Yaris
156
RAV4
91
Camry
79
Fortuner
77
Land Cruiser Prado
64
Hiace
36
Granvia
27
Electrification
rate
70%
HEV
56%
HEV
29%
PHEV
1.8%
PHEV
2.2%
BEV 0.1%
BEV 2.7%
BEV 0.2%
PHEV 0.3%
PHEV
0.3%
PHEV 0.1%
Global
Major Vehicle Models
ICE 63%
PHEV 1.1%
BEV
1.4%
HEV
35%
Distribution of Sales by Powertrain
(Thousands of units)
Powertrain
Units
Internal combustion engine (ICE)
6,454
Hybrid electric vehicle (HEV)
3,594
Plug-in hybrid vehicle (PHEV)
141
Battery electric vehicle (BEV)
117
Fuel cell electric vehicle (FCEV)
4
Total
10,309
Sales by Series
(Thousands of units)
Series
Units
Corolla
1,701
RAV4
1,003
Yaris
878
Camry
648
Hilux
629
Highlander
391
Lexus RX
241
Tacoma
227
Sienna
212
Lexus ES
205
Electrification
rate 37%
Distribution
of Sales by
Region
Other 15%
Japan 15%
China 18%
North
America 26%
Asia
(Excluding
China) 14%
Europe 11%
Avanza
53
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Developing New Engines for the
Electrification Era
On May 28, 2024, Subaru Corporation, Mazda Motor Corporation, and
Toyota Motor Corporation held a joint workshop at which they
expressed their commitment to developing new engines tailored to the
electrification era.
The CEOs of the three companies shared their thoughts on how their
signature technologies—which include the horizontally opposed engine
of Subaru, the rotary engine of Mazda, and the inline 4-cylinder engine
of Toyota—will play crucial roles in the transition to electrified vehicles.
Co-Creation
and Competition
TOYOTA
SUBARU
MAZDA
Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy
Development of Compact Engines
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
Presentation with Subaru President Atsushi Osaki and
Mazda President Masahiro Moro
Subaru President
Atsushi Osaki
Mazda President
Masahiro Moro
54
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Toyota President Koji Sato
To achieve carbon neutrality, it is important to consider the
future of energy and prepare diverse options to ensure
reduced CO2 emissions. At the G7 Hiroshima Summit, held in
2023, we communicated to the world the Japanese automo-
tive industry’s belief in diverse options, using the key mes-
sages of “diversity in carbon neutrality” and “there is a
uniquely Japanese way to climb the mountain that is carbon
neutrality.”
As one of those diverse options, Subaru, Mazda, and Toyota
are pursuing their own battery EV (BEV) initiatives. However,
engines also represent a necessary multi-pathway technol-
ogy. To promote widespread adoption of electrified vehicles,
we will pursue new value required of powertrains and seek to
evolve powertrains so that they are better suited for the
future energy environment.
Guided by these aspirations, we are advancing the devel-
opment of new engines.
Throughout their history, internal combustion engines have
evolved to meet the social challenges of the times. In the
1970s, when air pollution began to become a problem, the
automotive industry met strict emissions regulations by pursu-
ing various technologies, such as those that yielded improve-
ments in combustion and catalyst performance. The challenge
of creating the first-generation Prius, for which we adopted
the goal of doubling fuel efficiency before the 21st century,
was also an effort that pursued a new direction for engines.
Similarly, over the past few years, we have taken on the
challenge of achieving carbon neutrality and continuously
refining our engine technology in motorsports by leveraging
aspects that are unique to Subaru, Mazda, and Toyota.
We have realized that learning from each other’s
strengths and challenges drastically increases the speed of
technological evolution.
It is against this backdrop that we are developing the
engines that each company is announcing today. Toyota is
developing new low-displacement inline 4-cylinder engines.
This effort is based on two development concepts. One con-
cept is the pursuit of greater efficiency and compactness by
combining engines and electric power units. Based on this con-
cept of adding an engine to an electric power unit, we are
refining our technology to achieve higher efficiency than
before by leveraging the respective areas in which electric
motors and engines excel.
Co-Creation and Competition
Refining the Characteristics
to Create Diverse Cars
Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy Development of Compact Engines
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
55
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Based on the premise of electrification, we will optimize
the structure of our engines and work to make them more
compact, which in turn will lead to more flexibility in engine
installation in cars. By doing so, we will develop engines that
are optimized for the electrification era and make it possible
to create hybrid and plug-in hybrid vehicles that are
“electric-rich.”
The other development concept is responding to the
diversification of fuels, such as biofuels and e-fuels.
To date, Toyota has internally developed D-4S and other
advanced combustion technologies. By leveraging this strength,
we aim to enable engines to efficiently use diverse fuels, thereby
contributing to the popularization of carbon-neutral fuels.
We also believe that widespread adoption of carbon-
neutral fuels requires increasing their use. We will work with
Idemitsu Kosan, ENEOS, and Mitsubishi Heavy Industries to
consider establishing a carbon-neutral fuel supply chain as
part of this effort.
The inline 4-cylinder engine has been refined over its long
history. Its simple structure and highly flexible installation
requirements have enabled it to support a diverse product
lineup, from family cars to sports cars.
We will seek to thoroughly refine the characteristics of
Toyota’s new inline 4-cylinder engines and develop them into
powertrains that can help create a diverse range of cars in
the age of carbon neutrality.
I believe that the key to creating the future is to pursue
co-creation and competition. Technology evolves through
friendly competition with colleagues who share the same
aspirations for the future.
By drawing on what makes each of our three companies
unique, we will pursue the potential of engines through a
multi-pathway strategy with a view to achieving carbon
neutrality.
Toyota’s 1.5L inline 4-cylinder
engine under development
Co-Creation and Competition
Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy Development of Compact Engines
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
56
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Toyota’s 1.5L and 2.0L inline 4-Cylinder Engines
Under its multi-pathway strategy, Toyota has been leveraging
the technologies it has cultivated in each of its powertrains
to enhance the competitiveness of its products. When analyz-
ing BEVs based on fundamental principles, the greatest
factor impacting driving distance is aerodynamics. Building a
car with an emphasis on aerodynamics naturally changes its
design and structure. For a car to have a low center of gravity
and a low hood, the size of its components must be reduced.
By applying the insight gained through the development of
BEVs to the development of PHEVs and HEVs, we can further
improve the fuel economy of these vehicles.
To that end, we are developing new engines with a shift in
perspective, which is to create a PHEV using a BEV package
or a PHEV that is essentially a practical BEV with an engine.
ENGINE ReBORN
Developing a New Concept Engine Based on
Electrification
The 1.5L inline 4-cylinder engine being developed by Toyota
Furthermore, as these electrified vehicles run on both an
engine and a motor, there is no need for the engine to cover
all driving ranges, since the motor can be relied on to a mod-
erate degree. In this way, the new engines truly cater to the
characteristics of electrified vehicles.
By designing the new engines with electrified vehicles in
mind, we are able to actively control the engine using the
motor, a hitherto unaccomplished feat for Toyota. We can
also control the fuel injection volume and level of motor
assistance to optimize combustion of the engine cylinders by
calculating the combustion status in each cylinder using the
motor signal. In this way, we can realize powertrains with
enhanced environmental performance.
The concept for these new engines differs completely
from that used in Toyota’s conventional engines. This new
concept is encapsulated in the phrase “ENGINE ReBORN.”
As a starting point, we prepared two models for the 1.5L
inline 4-cylinder engine, one naturally aspirated and the
other turbocharged. The naturally aspirated model reduces
both volume and height by 10% compared with the current
1.5L 3-cylinder engine.
By adding another cylinder, we have allowed our engi-
neers to lower the height and make the overall engine more
compact.
For its current engine to clear the strict emissions regulations
slated to be enforced in Europe and the United States, Toyota
would need to curb the engine’s power output and use expen-
sive catalysts to clean up exhaust gases.
By contrast, the new engine retains output thanks to
improved combustion technology. At the same time, its com-
pact size allows for lower hood design, reducing aerodynamic
drag. These changes are expected to yield 12% better fuel
economy in sedan-class vehicles.
Furthermore, the 1.5L turbo model of the engine can
cover the territory of Toyota’s 2.5L naturally aspirated engine,
which is used in vehicles that tow heavy loads.
The new turbocharged engine also complies with regula-
tions that would require the existing model’s power to be cut
by 30%. It can also reduce volume by 20% and height by 15%.
Similarly, the 2.0L turbocharged engine is expected to
have 10% lower volume and height than the existing 2.4L
turbo engine.
Despite this lower volume and height, the 2.0L turbo-
charged engine drastically improves output and will serve
a wide range of applications where power is required, from
trucks and other heavy-duty vehicles to sports cars.
By combining highly efficient, compact, and powerful
engines with electric power units, we will expand the poten-
tial for offering more affordable BEVs.
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Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy Development of Compact Engines
57
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Cars
Let’s Change the Future with BEVs
Monozukuri
(Manufacturing)
Work
In May 2023, Toyota established the BEV Factory, a special-
ized organization that brings together all the functions and
authority needed for the development of the type of next-
generation battery electric vehicles (BEVs) that only an auto-
mobile manufacturer can create. The BEV Factory is tasked
with the mission of transforming cars, monozukuri (manufac-
turing), and work to change the future with BEVs.
Future of Cars
The BEV Factory seeks to change the future of cars, which
will entail evolving the products we provide to customers.
Through the integration of next-generation batteries and
sonic technology, we aim to achieve a game-changing BEV
driving range of 1,000 km.
Our next step will be to capture customers’ hearts with
stylish designs. AI will be used to help ensure excellent aero-
dynamic performance, doubling the time that designers can
devote to creating attractive cars.
Our BEVs will also feature customizable ride feel. The
Arene OS and the full over-the-air system, which provides
vehicle software updates via wireless transmission, will infi-
nitely expand the possibilities for enjoying cars.
Moreover, Toyota will deliver exciting surprises and fun,
like the manual EV, to its customers with technologies that
only an automobile manufacturer can create.
Future of Monozukuri
Toyota’s hitherto labor-intensive business practices are trans-
forming together with its manufacturing processes. In our full
assembly processes, we will seek to create opportunities for
employees to think about how to improve processes and pro-
duce other innovations. Moreover, we will adopt people-ori-
ented processes and work with our suppliers to construct the
factories of the future that empower employees and provide
a sense of emotional security.
Automobile bodies will be constructed from three main com-
ponents in a new modular structure. The finished automobiles are
then assembled after each of the three modules is completed.
This structure allows each module to be evolved separately,
expediting action, which is particularly important in the race to
develop better batteries.
Furthermore, the use of giga casting will allow significant
component integration, contributing to the reduction of vehi-
cle development costs and plant investment.
In this manner, the future of monozukuri will feature halved
processes and production lead times for BEVs.
Specifically, the new modular structure and self-propelling
production and other automation technologies will halve the
number of processes required. Self-propelling production will
be key to building next-generation BEVs. By greatly reducing
the time and cost, as well as efforts on the part of production
and technical staff, required to modify plants and expand
buildings whenever a new model is introduced, this technology
will accelerate the launch of new products to market.
Such new approaches to manufacturing, combined with the
use of digital twin technology, will halve production lead times.
Future of Work
The BEV Factory is an all-in-one team guided by a single
leader that extends beyond the framework of an automobile
manufacturer to encompass all functions and regions, includ-
ing Woven by Toyota, Inc., and external partners.
This one organization is charged with developing the
entire lineup from start to finish—from development to pro-
duction planning, business planning, domestic and overseas
product fleet designing, and procurement and battery strat-
egy formulation.
This all-in-one team brings all functions to the same site,
allowing everyone to share the same awareness of issues in
order to achieve quick decision-making and initial response.
Furthermore, by using the Arene OS, we are improving
development and evaluation efficiency. At the same time, we
Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy
Battery Electric Vehicle Strategies
Takeo Kato
President, BEV Factory
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New Modular Structure for Automobile Bodies
Center
Front
Rear
Rapid incorporation of advances in batteries
Labor–Savings
People-Oriented Processes
Full Assembly Processes
Cramped, poorly lit, and
stressful processes
Today
Today
Today
Future
Future
Staff
50% reduction
Future
Open, well-lit,
and worker-friendly
processes
Opportunities to think
1. Low height and high energy density 2. Compact eAxle 3. Compact air-conditioning system
Driving range: 1,000 km (CLTC mode)
LF-ZC
RAV4
LC
2
2
3
1
58
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
are practicing wide-ranging external collaboration to foster
new, creative thinking, and the resulting growth of individuals
will change the future of the Company.
Let’s Change the Future with BEVs
The earnings of Toyota’s next-generation BEVs will be driven
by our next-generation batteries, which will be developed
with a focus on achieving world-leading levels of efficiency.
Our development approach entails viewing batteries and
vehicles as a set, and this approach is the starting point for
the development of BEVs.
Toyota’s development of both batteries and vehicles in-
house provides an advantage in this area.
The resources afforded by this advantage will be used to
improve our product appeal to exceed customer expecta-
tions and secure earnings.
Toyota has disclosed its projections for base unit sales, which
are 1.5 million units for 2026 and 3.5 million units for 2030.
We are advancing the integrated planning of our full global
lineup of next-generation BEVs. The first of these vehicles will
be launched in 2026. We plan to begin with the simultaneous
launch of two large-class models, a sedan and an SUV, in
2026, followed by several models in 2028 and beyond.
In addition to efforts to increase product appeal, we will
transform our manufacturing approaches to eliminate pro-
cesses as well as reduce investment and lead times while
securing earnings and increasing sales volume.
Base Unit Sales Projections
Toyota is targeting global BEV sales of 1.5 million units in
2026 and 3.5 million units in 2030. These figures are shaped
by customer demand and represent the base unit amount
based on which supply systems will be prepared together
with suppliers and dealers. However, we will adopt a flexible
approach toward sales in recognition of the fact that it is cus-
tomers who will ultimately decide what they purchase.
Next-Generation BEVs: Smaller Is More
Our next-generation BEVs will be an amalgamation of new
initiatives and undertakings. We have been focusing on the
potential for constant evolution of the augmentation capacity
of BEVs—making components smaller and vehicle interiors
more spacious. Examples of these initiatives can be seen in
three models.
Meanwhile, our new batteries are playing a key role in the
evolution of BEVs with their low height and high energy density.
Low-height batteries utilize more compact peripheral compo-
nents to create and enable unparalleled stylish design.
Performance will also be greatly improved, with a driving
range of 1,000 km and charge time of 20 minutes.
Charge Time
30 min.
Conventional
batteries
New, in-house pro-
duced batteries
30%
reduction
Driving Range
615 km
Conventional
batteries
New, in-house pro-
duced batteries
1,000 km
1.7 times
higher
20 min.
Transformation of the Shape of Cars
More compact components have the potential to transform the
shape of cars. On a BEV, the battery is mounted under the floor
of the cabin, near the middle of the vehicle. The larger the bat-
tery installed there, the greater the driving range. However, the
use of larger batteries requires increasing the distance between
the front and rear tires, leading to a long, stretched-looking car
body, and limits the possibilities for vehicle design.
Conversely, the higher energy density of the new batteries
means that the batteries themselves can be smaller without
sacrificing driving range, allowing for overall smaller vehicles
and greater freedom of design.
The Lexus LF-ZC fea-
tures a condensed,
ground-hugging form.
The low-height battery,
small eAxle, and down-
sized air-conditioning
system together create a new silhouette.
This design shatters the notion that BEVs have to be tall.
The combination of downsized components achieves sleek, ele-
gant styling.
Transformation will also be seen in vehicle interiors. The
dashboard will sit lower, providing a superior range of vision,
with the sky stretching out in front of the driver. The lower dash-
board will mean that the seats can be lower, so that, with the
same vehicle height, the ceiling feels strikingly high. This change
should make time spent in vehicles feel more comfortable and
relaxing for passengers of all heights.
We are also focusing
on the basics to trans-
form the way vehicles
drive. Specifically, we are
developing a new suspen-
sion to create a drive feel
worthy of the vehicle’s styling and to enhance responsiveness.
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59
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Expansion from Cars to Mobility
Software is expanding the range of possibilities for vehicles.
With software, one vehicle can, for example, replicate the feel
of any other—the handling, the sound, the vibration—be it that car
you loved when you were young or the model you have always
dreamed of driving. Any vehicle can become a beloved car that
helps customers connect to their memories or look forward to
their future lifestyle.
For Toyota, nothing is more important than its connections with
the customers who have chosen and loved its cars over the years.
By effectively using intelligent BEVs as a medium for transfer-
ring energy and data and linking vehicle, lifestyle, and energy data,
we will expand our efforts from cars to a world of mobility.
In October 2024, Primearth EV Energy Co., Ltd.,* made a fresh
start under its new name of TOYOTA BATTERY Co., Ltd.
Now bearing the Toyota name, TOYOTA BATTERY will be
spearheading the Group’s battery business while also striving
to boost Japan’s competitiveness in the battery industry.
At a ceremony commemorating this new departure held in
Kosai City, Shizuoka Prefecture, where TOYOTA BATTERY is
headquartered, Chairman
Akio Toyoda offered the fol-
lowing words.
In a quiet spot about a
kilometer from the Sakaijuku
Plant stands a stone monu-
ment acknowledging Kiichiro
Toyoda’s assistance in devel-
oping rice fields on behalf of
the local community.
Originally, however, it seems he intended this location to host
an engine plant.
In his efforts to build engines in Kosai, I couldn’t help but
sense Kiichiro’s affection for his father, Sakichi, who devoted
his life to studying sources of power.
This fascination was sparked in 1890 when a young
Sakichi was awed by the capabilities of the powerful steam
engines and machinery he saw at the National Industrial
Exhibition held in Ueno, Tokyo.
This encounter stirred a passion for harnessing that “limit-
less power,” leading Sakichi to invent the power loom and
later storage batteries.
In 1925, Sakichi offered a prize of ¥1 million, or more than
¥10 billion in today’s money, to encourage battery develop-
ment. His requirement was for batteries that could fly an air-
plane across the Pacific Ocean. Even today, nearly a century
on, the world has not yet created a battery capable of such a
feat.
Why did Sakichi put his money behind a quixotic battery
quest that remains unrealized 100 years later? For me, the
story holds two messages.
One is about the potential of batteries as a source of
power. Sakichi believed that energy would become a major
challenge for Japan, where oil and other resources are scarce,
and I think he saw great promise in storage batteries that
could utilize electricity generated by hydropower.
The other message is about the unlimited potential of the
human mind. Sakichi lived by the conviction that nothing
remains impossible forever and that intelligence and ingenuity
could overcome any difficulty.
I believe that’s why he brushed aside the naysayers and
put up the prize money, entrusting his dream to the next
generation.
All of us here today are the inheritors of Sakichi’s dream. I
am surely not alone in hoping that, by working together, we
may one day create the batteries envisioned by Sakichi right
here in Kosai.
Even if this proves beyond the reach of our generation,
there are many children here who know the joy of inventing
and creating.
“Creating something new means racking your brains, toil-
ing, and losing yourself in the process. These moments are the
ultimate pleasure. There is no greater joy or excitement than
seeing someone enjoying or benefiting from a product that
you worked hard to make. That’s what drives me to keep learn-
ing and striving to create something even better.”
These were the words of my father, Shoichiro. I believe
that the human passion for helping others and for making the
world a better place, which is passed down from generation to
generation, is the true source of limitless power.
Today, I pledge to keep this passion alive.
* After starting out as Panasonic EV Energy Co. in 1996, Primearth EV Energy
supported Toyota’s electrification efforts from the first-generation Prius,
which was launched in 1997, producing batteries for approximately 25 mil-
lion vehicles.
Constant Evolution of Augmentation Capacity
Vehicle Perspective
Memories of younger days
Vehicle data
Lifestyle data
Energy data
Cloud
Intelligent BEV
RWD
Car one loved
when young
4WD
Overseas-only
model
V10
Dream car
FWD
Car for loved ones
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Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
Social Perspective Effective use as a medium for energy and data transfer
60
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
—Future Mobility Society Envisioned
by an Automobile Manufacturer
Batteries
The battery is the heart of the battery electric vehicle
(BEV). Just as the heart pumps blood through the
body, the battery transmits electricity throughout the
vehicle. As Toyota advances initiatives aimed at intro-
ducing next-generation BEVs in 2026, it is also evolv-
ing batteries with new technologies to meet customer
expectations.
For liquid lithium-ion batteries, which are currently
the mainstream, Toyota will work to enhance perfor-
mance through improvement to the energy density of
prismatic batteries, an area in which the Company has
longstanding expertise. In addition, we will expand our
lineup to provide customers with a variety of options—
from low-cost batteries for popularization to batteries optimized for maximum performance—by
using the bipolar battery structure developed for hybrid electric vehicles (HEVs) in BEVs.
Furthermore, all-solid-state batteries, which are garnering attention as an innovative new type of
battery, are finally approaching the phase of practical application for use in BEVs. By assembling a
full lineup of competitive batteries, we will seek to support the ongoing evolution of Toyota’s BEVs.
Note: The performance versions of next-generation batteries are being developed with Prime Planet Energy & Solutions, Inc., while the popularization and high-
performance versions of the next-generation batteries and all-solid-state batteries for BEVs are being developed with Toyota Industries Corporation,
combining the knowledge of the Toyota Group.
Liquid Lithium-Ion Battery Development
1. Next-Generation Batteries: Performance Version
The next-generation BEVs to be introduced in 2026 will have a driving range of 1,000 km.* For these
vehicles, we are developing a performance-focused prismatic battery to increase the degree of free-
dom in vehicle design. This battery will feature higher energy density along with improved aerody-
namics and reduced weight aimed at extending driving ranges by improving vehicle efficiencies. At the
same time, we look to reduce costs by 20% in comparison with the current bZ4X and achieve a quick
charge time of 20 minutes or less (state of charge (SOC) = 10%–80%).
* Includes driving range gains through vehicle efficiency improvements such as aerodynamics and weight reductions
2. Next-Generation Batteries: Popularization Version
Toyota is also developing high-quality, low-cost liquid lithium-ion batteries that are anticipated to
contribute to the widespread use of BEVs to provide customers with a variety of battery options.
Bipolar structure batteries, which have been used in the Aqua and Crown hybrid vehicles, are now
being used in BEVs. These batteries utilize inexpensive
lithium iron phosphate (LFP), and we are working to
commercialize these batteries in 2026 or 2027.
We are aiming for a 20% increase in driving range*
and a 40% reduction in cost compared with the current
bZ4X as well as a quick charge time of 30 minutes or
less (SOC = 10%–80%). We are also examining the pos-
sibility of installing these batteries in BEVs in the popu-
larization price range.
In a standard battery, individual current collectors
are coated on both sides with either an anode or cathode, then paired to make a set. In contrast,
every current collector in a bipolar configuration is coated with an anode on one side and a cathode
on the other, making for a simpler structure that requires only one-third as many components. At the
same time, material costs can be reduced by using LFP for the cathode in place of rare metals, such
as nickel and cobalt.
However, to make these batteries a reality, Toyota must overcome three challenges: applying the
cathode and anode materials evenly, doing so at high speeds, and simultaneously sealing all the cells.
Furthermore, all that needs to be achieved in batteries large enough to power a car.
In tackling these challenges, Toyota is drawing on its battery production technologies honed
through its 27 years of developing HEVs as well as its bipolar nickel-metal hydride battery technolo-
gies and expertise, precision coatings used for fuel cell electric vehicles (FCEVs), and various digital
technologies. By combining these assets, we are making strides in development projects aimed at
mass production.
Battery type
Shape
Structure
Cathode
Start of production
EV driving range
(CLTC mode, including
gains through vehicle
improvements)
Costs
(For same driving range)
Charge time
(SOC =
10%–80%)
Conventional
bZ4X battery
Prismatic
Monopolar
NCM
2022
615 km
–
30 min.
or less
Next-
generation
batteries
1. Performance
version
Prismatic
Monopolar
NCM
2026
100%
increase
Compared
with bZ4X
20%
reduction
Compared
with bZ4X
20 min.
or less
2. Popularization
version
New
structure
Bipolar
LFP
2026–2027
(Targeted
commercialization)
20%
increase
Compared with bZ4X
40%
reduction
Compared with bZ4X
30 min.
or less
Evolved
batteries
3. High-
performance
version
New
structure
Bipolar
Ni
2027–2028
(Targeted
commercialization)
10% increase
Compared with
next-generation
batteries
(performance version)
10% reduction
Compared with
next-generation
batteries
(performance version)
20 min.
or less
Widening Range of Options for BEVs
Evolution
(Bipolar)
Performance Version of
Performance Version of
Next-Generation
Next-Generation
Batteries (Prismatic)
Batteries (Prismatic)
Popularization Version of
Next-Generation Batteries
(Bipolar: LFP)
Driving range
Longer
Lower
Costs
bZ4X Battery
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Innovative Battery Electric Vehicle Technologies
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Conventional
Monopolar
Battery
Bipolar Battery
Current
Collector
Separator
Anode
Cathode
Case
61
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
—Future Mobility Society Envisioned
by an Automobile Manufacturer
3. Bipolar Lithium-Ion Batteries: High-Performance Version
The high-performance version of our bipolar lithium-ion batteries combines the best aspects of both
the performance and popularization versions.
These batteries have evolved through the combination of a bipolar structure and a high-
nickel cathode.
Compared with the performance version, the high-performance version will boast an impressive
10% increase in driving range* and a 10% reduction in cost as well as a quick charge time of 20 min-
utes or less (SOC = 10%–80%).
We aim to commercialize this battery in 2027 or 2028.
All-Solid-State Battery Development
All-solid-state batteries have a solid electrolyte, allowing faster movement of ions and greater toler-
ance of high voltages and temperatures. It is hoped that
this technology will contribute to increased power output,
longer driving ranges, and shorter charge times.
However, one of the issues faced with all-solid-state
batteries had been short battery life. Solid electrolytes
repeatedly expand and contract as the battery charges
and discharges, which can create cracks in the all-solid-
state battery that inhibit the movement of ions between
the cathode and anode. Toyota, fortunately, has been able
to develop a new technology that overcomes this issue.
Aiming for commercialization in 2027 or 2028, Toyota
continues to advance product development and the devel-
opment of mass production methods.
Current battery production consists of three main processes: materials processing, battery pro-
cessing, and battery assembly. While the sequence is the same for all-solid-state batteries, the
assembly process for these batteries requires high-speed, high-precision stacking that does not
damage the materials in order to ensure the battery’s performance. Advanced technologies are
imperative for achieving such level of speed and precision in mass production.
The equipment developed by Toyota resolves this issue by making the pallets that carry and
receive batteries all move at the same speed—that is, at zero relative velocity. In addition, the pallets
and machinery are equipped with karakuri (non-powered mechanical gadgets that help improve pro-
ductivity and reduce costs) to prevent misalignment as batteries are passed through. Together, these
solutions enable the high-speed, high-precision stacking that is crucial for mass production.
In October 2023, Toyota announced a partnership with Idemitsu Kosan Co., Ltd., in which the com-
panies will work toward the mass production of all-solid-state batteries for BEVs. By integrating the
two companies’ materials development technologies, along with Idemitsu’s materials manufacturing
technologies and Toyota’s battery processing and assembly technologies honed in electrified vehicle
development, the partners aim to achieve mass production of solid electrolytes and all-solid-state
batteries that will be widely used throughout society.
Aerodynamics Technologies Based on Rocket Technologies
Battery development is not the sole factor that determines
the performance of BEVs. Vehicle design considerations,
such as minimizing aerodynamic drag, improving energy
regeneration, and overall energy and heat management,
must also be addressed as part of the vehicle development
process.
One such aspect of vehicle design is aerodynamics
technologies. In this area, Toyota is working with the Space
Systems Division of Mitsubishi Heavy Industries, Ltd., to apply hypersonic rocket technologies to cars.
Through this partnership, we are studying technologies that protect rockets from the heat caused by air
friction and compression and looking for ways to transfer that knowledge to the speed range of a car.
Aerodynamic drag can be lowered by controlling points of contact with the airflow—for example,
through body surface treatment. Toyota hopes to reduce the drag coefficient (Cd) to around a tenth
of that for existing car bodies (0.20).
This technology has the potential to enable designs that are both stylish and aerodynamic with-
out placing restrictions on the shape of a car or whether the material is steel or aluminum.
Development is moving forward with the goal of achieving commercialization in 2026. In addition
to battery innovation, we strive to extend driving ranges by minimizing aerodynamic drag as one facet
of our ongoing efforts to improve the appeal of our BEV products to surpass customer expectations.
Evolution in Manufacturing: Halving of Production Processes
Toyota is advancing initiatives in the areas of both vehicle technology and manufacturing to ensure the
profitability of its BEVs. For example, we are making vehicle bodies simpler and slimmer in structure
and utilizing giga casting molding processes to realize greater parts integration. We will also seek to
create highly flexible production plants without conveyors by introducing self-propelling conveyance
systems and other innovations. Moreover, digital technologies will be introduced into the designs of
BEV production plants to increase the accuracy of process verification. Through these efforts, we aim
Technology enabling even longer driving
ranges than Toyota’s next-generation bat-
teries together with charge times under 10
minutes
Model for wind tunnel testing
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Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
—Future Mobility Society Envisioned
by an Automobile Manufacturer
to reduce production preparation lead times and production processes for mass-produced vehicles to
half their current levels while achieving a significant reduction in fixed costs.
1. Giga Casting
Toyota’s next-generation BEVs will employ a new modu-
lar structure in which car bodies are divided into three
sections: front, center, and rear. One of the production
technologies that will make such modular structures
possible is a casting method known as giga casting.
At present, the rear section of a bZ4X is made with
86 sheet metal parts and requires 33 press processes.
However, integrated molding using aluminum die-cast-
ing can reduce this to a single part made by a single process.
Through this approach, we seek to reduce both the cost and the weight below that of conven-
tional models while also boosting productivity by leveraging the Toyota Production System (TPS),
which represents one of the Company’s strengths.
Currently, we are building prototypes at our factories in Japan and working to improve productiv-
ity with an eye toward application to mass production.
Giga casting requires molds to be replaced on a regular basis. A typical changeover might take 24
hours and require a large crane. Giga casting molds, meanwhile, weigh more than 100 tons, meaning
that replacements can lead to even greater time loss. Toyota’s approach to giga casting addresses
this issue by dividing molds into two pieces: general-purpose molds that remain mounted on the
machinery and specialized molds, the shape of which differs by car model. During a replacement, only
the compact specialized molds are detached from and then mounted on the general-purpose molds,
and this is done automatically. With these just-in-time mold changes—replacing only what is needed,
when it is needed, in the quantity needed—Toyota aims to bring lead times down to 20 minutes or less
and thus reduce operational downtime.
This use of separate molds and the automated mounting and detaching of specialized molds is
the culmination of improvements made over many years of handling every aspect of mold design,
fabrication, and maintenance in-house. When molds expand or contract under the heat of casting, the
general-purpose and specialized mold parts may become misaligned, with the latter unable to
release. The necessary dimensions are maintained by the skills of our mold craftsmen.
Furthermore, Toyota’s proprietary giga casting analysis technologies are being used to help
improve cast quality and prevent defects. Toyota uses proprietary simulation software that draws on
expertise accumulated in the mass production of engine blocks and other components and combines
this expertise with its giga casting analysis technologies. The advanced craftsmanship and skills of
Toyota’s people have also been digitized and incorporated into parameters and computation methods
to create quality products.
Although it is common for our peers to use commercially available equipment, we conduct in-
house development to allow us to add parameters or change computation methods as necessary. We
are thereby able to build high quality into our machinery to reduce the rate of defects in our resulting
products.
Through these and other efforts based on TPS, we are reducing waste to achieve higher
productivity.
2. Next-Generation BEV Production Lines
With our next-generation BEV production lines, we aim to halve the number of production processes
required by utilizing a new modular structure and self-propelling conveyance systems.
The new modular structure entails dividing the
underbody (the lower part of a vehicle’s body that
includes the front frame and the cabin and trunk floor)
into three sections—front, center, and rear. Each sec-
tion is fitted with its own parts. This approach is
expected to improve work efficiency, as workers will no
longer need to climb inside a vehicle during assembly.
After parts are attached to each module, the three
sections are combined and the car proceeds forward autonomously. With this new vehicle structure,
seats and other components can be mounted before the roof and side panels are attached, simplify-
ing the designs and operations of robots and other equipment.
Toyota is endeavoring to adopt in-house options for all steps of processes, from development to
production, pertaining to both plant equipment and mass-produced vehicles. Drawing on this
strength, the Company is striving to simplify and automate operations with the aim of minimizing the
need for heavy-duty conveyor equipment and enabling a more flexible response to change.
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63
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
—Future Mobility Society Envisioned
by an Automobile Manufacturer
3. Next-Generation Production Plant Design
Toyota is exploring means of applying digital technol-
ogies to next-generation BEV plants. Technologies
such as giga casting and self-propelling assembly
lines are highly compatible with digitalization, and
digital technologies are being actively employed in
process planning and improvement and other aspects
of plant design. We intend to shorten mass production
preparation lead times through reproduction accuracy
at the 1 mm error level. Moreover, Toyota will shift to
more efficient production lines with unmanned trans-
port using connected technologies and autonomous
inspections while also incorporating the TPS concept
to transform the way plants operate.
We are also using digital technologies in the engi-
neering of our facilities.
In our quest to supply the products customers
want, when they want them, it is crucial that we be
able to set up production facilities capable of manu-
facturing said products in a timely manner. However,
in the process of setting up new production facilities,
we often discover problems and difficulties not anticipated in the drawings, resulting in wasteful
redoing and long lead times. To address this issue, we first use digital technologies to create 3D
models to allow equipment designers, manufacturing managers, and frontline workers to identify
potential issues in advance.
This approach has enabled the knowledge and experience of Toyota’s frontline workers to be
incorporated into 3D models from the design stage, ensuring that equipment is already highly refined
when introduced at actual production sites. This eliminates the need for reworking and has helped
cut in half the lead time from design to the start of production.
Toyota is working to expand such digitally driven monozukuri (manufacturing) activities among
Group companies and manufacturing partners in an effort to maximize the competitiveness of the
entire Toyota Group.
Equipment development is not the only area in which we are embracing new technologies. At
mold and equipment parts processing facilities, material loading and other operations that had previ-
ously relied on human labor have been improved and automated using 3D models. Changes first
made to 3D models are then reflected at actual facilities. The result has been to triple productivity
while lead times have been reduced to one-third of
previous times.
Digital technologies are also being employed in
human resource development. We have developed
training equipment that uses augmented reality
technologies to teach specialized skills that are
difficult to explain and tend to become tacit
knowledge.
The use of digital tools is typically a one-way
process, with such technologies helping design
things for the actual front lines. At Toyota, however,
we aim to create continuously evolving plants
through two-directional digital twins via a process
in which frontline improvements are reflected in digital models and further improvements are made
to these models before being fed back to the front lines.
Fundamental Technologies for Improving BEV Product Appeal
We are advancing the development of fundamental technologies by leveraging the wealth of tech-
nologies we have cultivated through manufacturing. The Toyota Group as a whole will take advan-
tage of the compact eAxle and internalize next-generation semiconductor technologies to improve
the appeal of BEV products under development.
1. Compact eAxle
In BEVs and other motor-powered cars, the eAxle combines the main components needed to make
the vehicle run (motor, gear train, and inverter). We are moving forward with the development of a
more compact eAxle. The project brings together the
technologies of Aisin Corporation, DENSO Corporation,
and Toyota as well as BluE Nexus Corporation, a joint
venture set up with funding from said companies.
Along with increasing the motor’s RPM and optimiz-
ing the shape and placement of magnet slots, the com-
pact eAxle leverages technologies that have been
cultivated for HEVs, including lubrication design and
fluid analysis technologies, reduced condenser (device
that stores and releases electricity) capacity for power
control units (devices that control electricity used to
Contributions of eAxles to Vehicles
Conventional BEVs
Next-Generation BEVs
Improved design, reduced
aerodynamic drag
Compact
eAxle
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Toyota’s Digital Monozukuri Technologies
Development of Continuously Evolving Plants
Digital
twins
Front
lines
Two-
directional
Feedback
Feedback
Feedback
Continuous improvement of front lines through two-
directional use of digital twins
Technologies Highly Compatible with Digital Technologies
Digital Manufacturing Research
Giga
Giga
casting
casting
Self-propelling assembly lines
· No need for parts matching
· High-precision body crafting
through machining
· No equipment required
· Simple bottom-up
assembly
64
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
—Future Mobility Society Envisioned
by an Automobile Manufacturer
power motors in electrified vehicles), and improved cooling performance. The motor is roughly 40%
smaller than that of an HEV, while the gear train and inverter are slimmed down by 53% and 58%,
respectively.
These improvements allow us to increase cabin and cargo space while reducing aerodynamic drag,
which in turn contributes to increased driving ranges together with enhanced comfort and design.
2. BEV Inverter-Use SiC Wafers (Next-Generation Semiconductors with 50% Lower Power Loss)
Toyota is developing next-generation semiconductor
materials from the crystal growth stage to contribute to
improved electricity efficiency for BEVs. In addition to the
gas method, which has the advantage of a crystal growth
speed that is 10 times faster than the industry standard,
we are developing the industry’s largest 8-inch wafer and
promoting the internalization of such technologies within
the Toyota Group.
3. Steer-by-Wire
Steer-by-wire is a control system that translates steering
inputs into electronic signals that are used to control tires.
This system provides a new driving experience deliver-
ing intuitive operation and a significant reduction in the
amount of steering operation required.
Multi-Pathway Platform
Our ongoing development of the multi-pathway plat-
form, which enables us to offer a variety of electrified
vehicles, has granted us the technological capabilities
necessary to rapidly provide BEV models. We intend to
expand our BEV product lineup prior to the introduction
of next-generation BEVs, with a baseline of 1.5 million
units in 2026.
As an example of the technological capabilities that allow us to provide both the bZ series and
fun-to-drive BEVs that meet the diverse needs of our customers, we have converted the powertrain
of the Crown into a BEV.
Furthermore, the same production lines are used to manufacture the cars with various pow-
ertrains (BEVs, FCEVs, HEVs, and internal combustion engines) and silhouettes (sedans, minivans,
and SUVs) that support Toyota’s multi-pathway strategy and allow us to cater to customer needs.
This approach is made possible by the wisdom and inge-
nuity cultivated on the front lines. For example, to make it
easier for workers to attach parts to models of varying sizes,
we use a wheeled step platform that allows workers to flexi-
bly adjust their elevation, reducing the burden on workers
while helping improve work quality. In addition, the floor at
assembly lines is painted in sections of yellow and green,
making the line brighter and significantly enhancing both
safety and operational efficiency.
Toyota’s multi-pathway production is supported by steadfast improvement activities, quality edu-
cation, leader training, multiskilled worker cultivation programs, and other human resource develop-
ment activities.
Manual BEVs
Toyota has developed BEVs that use motor control to
reproduce the feel of a manual transmission, despite the
vehicles lacking an actual engine or gearbox. The use of
the shift lever and clutch pedal further delivers the sensa-
tion of driving a vehicle with a manual transmission.
The distinctive attention to detail we possess as an
automobile manufacturer has been lavished on this fea-
ture, which reproduces everything from powerful acceler-
ation experienced in the lower gears to the shift shock that accompanies a mistimed gear change.
Also, the transmission can be switched from manual to automatic at the touch of a button, allow-
ing family members who only drive automatic to feel at ease behind the wheel.
Investment of Around ¥5 Trillion in BEVs and Batteries by 2030
In May 2023, Toyota announced its plans to invest around ¥5 trillion in BEV- and battery-related
facilities by 2030.
Starting in 2025, the assembly of an all-new, three- seat- row, battery electric SUV will
commence at Toyota Motor Manufacturing Kentucky, Inc. This vehicle, the Company’s first U.S.-
assembled BEV, will be powered by batteries from Toyota Battery Manufacturing North Carolina, Inc.
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Electrified steer-by-wire system
Note: Diagrams are based on excerpts from
DENSO’s website.
Internalization of Technologies within the Toyota Group
Pursuit of 10% Improvement in Electricity Efficiency
Silicon
SiC
Crystal
growth
Epitaxial
growth
SiC power
semiconductor
wafers
Power
cards
Modules
Cars
65
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
山形 光正
水素ファクトリープレジデント
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
Business Axes of the Hydrogen Factory
Development
and production
in large markets
(Mass produc-
tion and
localization)
Strengthening of
coordination
with prime
partners
(Standardization
of specifications)
Enhancement of
competitiveness
and technologies
(Innovative evolu-
tion of next-gener-
ation fuel cell
technologies)
Fuel Cell Market Outlook and Offers Received by Toyota
Mitsumasa Yamagata
President, Hydrogen Factory
In 2030, it is projected that China, Europe, and North America
will be by far the largest markets for hydrogen. Moreover,
China and Europe have set specific targets for the use of
hydrogen in mobility.
The fuel cell market is similarly anticipated to see rapid
growth in the run-up to 2030, reaching a scale of ¥5 trillion
per year, and medium- and heavy-duty trucks and light-duty
commercial vehicles are expected to account for the major-
ity of this market.
Meanwhile, Toyota is also pursuing external sales of fuel
cells using the Mirai’s hydrogen units. We have already
received offers that will equate to external sales of 100,000
units leading up to 2030, most of which are for commercial
vehicles.
Three Key Axes for Advancing Hydrogen Business
Established in July 2023 to facilitate responses to rapid
changes in the market, the new Hydrogen Factory is an orga-
nization, under a single leader, capable of prompt decision-
making on aspects ranging from sales and marketing to
development and production.
The Hydrogen Factory is advancing business activities
based on three key axes.
The first axis is to conduct development and production in
large markets.
In Europe, we are currently performing development at
Toyota Motor Europe N.V./S.A., through which we conduct
sales to external customers. We plan to establish a produc-
tion base in this region as soon as possible.
In China, we have already established a development and
production base in collaboration with Beijing SinoHytec Co.,
Ltd. This base began production of fuel cells in August 2024.
The market for fuel cells in China is gaining momentum
ahead of other regions, and Toyota is moving ahead with
product development and production to respond to these
emerging needs.
The second axis is to strengthen coordination with prime
partners.
In Europe, we announced a partnership with Daimler Truck
Holding AG in May 2023. The scope of this partnership
includes collaboration on hydrogen-related development.
Moreover, we unveiled plans to bolster coordination with
Bayerische Motoren Werke AG (BMW) in the field of hydro-
gen, based on which we are jointly advancing development of
fuel cell systems and installation of related infrastructure.
Note: Prepared by Toyota based on data from market research by FUJI KEIZAI GROUP CO., LTD.
100,000 units per year
¥5 trillion per year
Fuel Cell Market Outlook
(Trillions of yen)
Offers Received
by Toyota
(Thousands of units)
Portable/Backup
Material handling
Medium-/Heavy-
duty trucks, buses
Light-duty commer-
cial vehicles and
passenger vehicles
Residential
Industrial/Commercial
2020
2022
2025
2030
2030
Heavy-duty
trucks
Others
Light-duty
commercial
vehicles and
passenger
vehicles
Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy
Hydrogen Business Strategies
66
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
In China, meanwhile, we entered into a six-company alliance
in 2020 with Guangzhou Automobile Group Co., Ltd., China
FAW Group Corporation Limited, Beiqi Foton Motor Co., Ltd.,
Dongfeng Motor Corporation, and Beijing SinoHytec Co., Ltd.
Moreover, we have succeeded in building relationships
with OEMs that collectively hold approximately half the
Chinese market share. By leveraging these relationships, we
aim to provide customers in the Chinese market with afford-
ably priced fuel cells in sufficient quantities.
The third axis is the enhancement of competitiveness and
technologies.
Cell technologies are the most important aspect of the
competitiveness of fuel cells. We will fully utilize our mea-
surement, analysis, and predictive technologies, including our
world-first measurement technology, to develop competitive
fuel cells.
Furthermore, we will take advantage of the production
technologies we have honed in this area over more than three
decades to perform the mass production of high-perfor-
mance next-generation fuel cells.
Outlook
As we move forward with these initiatives, we will also be
advancing the full-fledged commercialization of our hydro-
gen business.
With our next-generation fuel cell systems, we will target
a 37% reduction in costs in comparison with the current Mirai
fuel cell system through technological progress, economies
of scale, and localization.
Business and Profit Outlook
200,000
units
100,000
units
Current
50% reduction
37% reduction
100,000 units per year
Technological
progress
+
Economies of
scale
+
Localization
Additional
mass
production
Cost
per unit
Volume of
offers
received
in 2030
Potential
for
increasing
volume
through
coordina-
tion, etc.
Current Generation
Next Generation
Accomplishing this goal will enable us to meet the expec-
tations of customers who make us offers in 2030, thus
making it possible to generate profits on an ongoing basis.
In addition, if we were to receive offers for sales of
200,000 units in 2030 through coordination with the afore-
mentioned partners, we would be able to achieve a 50%
reduction in costs and meet the targets set by the respective
governments for that year. Although possibly overly ambi-
tious, this goal will be a substantial source of competitive-
ness if accomplished.
We will therefore advance concerted efforts across
development, production, and sales functions in each region
to achieve this goal.
Quest to Change the Future with Hydrogen
The price of hydrogen is still very high, and lowering its price
is imperative to popularizing this type of fuel.
Toyota is working together with its partners in terms of
the production, transportation, and use of hydrogen.
Hydrogen production equipment using water electrolysis at DENSO Fukushima
Hydrogen Production Market Initiatives
We recently introduced hydrogen production equipment
that uses water electrolysis in Fukushima Prefecture. This
equipment is based on Toyota’s cell stack technology.
The hydrogen market is expected to experience rapid
growth around the world. In anticipation of this growth,
Toyota is partnering with Chiyoda Corporation in the develop-
ment of a competitive large-scale electrolysis system that
will incorporate this company’s plant process engineering and
large-scale plant construction technologies. This partnership
is one way we are making steady progress in commercializing
hydrogen.
Leveraging the opportunities presented by these relation-
ships with prime partners, we will establish bases for cus-
tomer-oriented development, production, and sales within
large markets and provide affordable products in sufficient
quantities. Toyota will take this opportunity to further accel-
erate the commercialization of hydrogen.
Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy Hydrogen Business Strategies
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Oliver Zipse
Chairman of the Board
of Management
Bayerische Motoren
Werke AG
Frank Weber
Member of the Board
of Management
and in Charge of
Development
Bayerische Motoren
Werke AG
67
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
—Future Mobility Society Envisioned
by an Automobile Manufacturer
Hydrogen has been positioned as an important fuel in Toyota’s CO2 emissions reduction efforts in
its quest to achieve carbon neutrality. We are promoting the utilization of this fuel to contribute
to the creation of a hydrogen-powered society. Our efforts to this end include the development
and testing of fuel cell electric vehicles (FCEVs), such as passenger cars and commercial trucks
and buses; fuel cell stationary generators; and hydrogen engine vehicles with internal combus-
tion engines. Through such initiatives, we are working with various industry partners in the areas
of producing, transporting, and using hydrogen.
Next-Generation Fuel Cell Systems for Commercial Use
Fuel cell systems comprise stacks of circuits embedded in thin sheets—which are referred to as
“cells”—that generate electricity through chemical reactions between oxygen and hydrogen.
Toyota is developing innovative next-generation fuel cell systems that deliver industry-leading
performance meeting the requirements for commercial use—namely, long life, low cost, and low
fuel consumption. These next-generation systems, which we aim to commercialize in 2026, are
expected to improve generating capacity by 30% compared with current fuel cells. On the dura-
bility front, FCEVs could stay on the road 2.5 times longer than standard diesel vehicles before
requiring maintenance, making them virtually maintenance-free over the life of a vehicle.
Compared with current cells, Toyota’s next-generation systems will also halve the cost of fabri-
cating a stack and increase driving range by 20%. This improvement will make it possible to drive
from Tokyo to Osaka without refueling.
These next-generation fuel cells reflect the expertise that Toyota has built up over 30 years:
real-time measurement and analysis of the processes occurring within cells; simulations for
nanoscale mapping of chemical reactions; and precision coating of the catalysts that drive
these reactions. Toyota’s advanced technical capabilities help inhibit deterioration caused by
corrosion and other factors, lowering the cost of materials needed for manufacturing.
Standardization of Large Commercial Tanks
To accelerate the growth of hydrogen demand, we are pursuing the standardization of hydrogen
tanks for large commercial vehicles, which are expected to consume hydrogen on a large scale.
We aim to reduce manufacturing costs by 25% by encouraging the development of uniform tank
standards across European, U.S., and Japanese standardization organizations in order to realize
economies of scale. We are also developing liquid hydrogen tanks for large commercial vehicles.
Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy Hydrogen Business Strategies
Technologies Supporting Our Hydrogen Business Strategies
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Next-
generation
Next-
generation
Next-Generation Fuel Cell Systems
Large Commercial Hydrogen Tanks
Pursuit of More Affordable Hydrogen
Maintenance Interval
Stack Cost
Driving Range
Reduction in Cell Numbers
30% higher
than prior
systems
80% higher
than rival
offerings
Improved Efficiency
Greater Durability
Maintenance-free
Approx. 2.5 times longer
50% reduction
20% increase
Electrode
power density
16.3 kW/L
Improvement of cell performance to meet requirements for commercial use
(long life, low cost, and low fuel consumption)
Innovative Cell Performance
Tank Standardization
Hydrogen Production Using Electrolyzer
Ideal Conditions for
Commercial Use
Long Driving Range, Large
Load-Bearing Capacity
Next-
generation
cells
Ability to drive
between
major cities on
single H2 refill
Japan
Germany
Osaka
Stuttgart
Tokyo
Frankfurt
Munich
Heavy-Duty Truck
Verification Test Targeting Commercialization
(DENSO Fukushima)
Gantry Crane
Accelerated popularization of large commercial tanks (known for consumption of large amounts
of hydrogen) through standardization of hydrogen tanks
Full-fledged attempts to popularize hydrogen-powered mobility utilizing
Toyota’s hydrogen production technologies
Base Unit for Commercial Tanks
Liquid Hydrogen
European
company A
European
company B
U.S. company C
U.S. company D
Japanese
company E
Japanese
company F
830–950 mm
Vehicle width
2,490 mm
760–850 mm
Diameter range
470–500 mm
Length range
1,800–2,200 mm
3 types
3,000
units/
year × 3
1 type
10,000
units/
year
25% reduction
Tank
Module
Diesel
Current
Current
Current
Next-
generation
Tank Costs
Independent cycle development using hydrogen technologies created for the
Mirai to produce hydrogen
Current hydrogen price: ¥1,650/kg
Diesel fuel parity: ¥560/kg
R&D costs
Other
costs
Part
and
material
costs
Electrolysis stack
(Using Fuel Cell
Technology)
68
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
The Acceleration and Spread of CASE through
Commerce
In April 2021, Isuzu Motors
Limited, Hino Motors, Ltd., and
Toyota Motor Corporation
established Commercial
Japan Partnership
Technologies Corporation
(CJPT), a new company, to
accelerate the implementa-
tion and spread of CASE (con-
nected, autonomous, shared,
and electric) in society to
help address various difficul-
ties facing the transportation industry as well as help achieve a
carbon-neutral society. Suzuki Motor Corporation and Daihatsu
Motor Co., Ltd., joined the partnership in July 2021.
Distribution by truck accounts for about 90% of overland
logistics in Japan, and the transportation sector (including buses
and taxis) involves 2.7 million people. Commercial vehicles account
for about 40% of the total distance traveled by automobiles and
about half of all CO2 emissions from automobiles in Japan.
Furthermore, the more than 60,000 logistics companies operat-
ing in Japan currently face numerous management issues, such as
high-frequency distribution, harsh work environments, labor short-
ages, and rising operating costs. The power of CASE, centered on
connected technologies and services, is a promising approach to
affecting improvements that will help resolve these issues. Given
the increasingly pressing circumstances surrounding carbon neu-
trality (CN), CJPT seeks a wide range of like-minded partners,
aiming to apply their diverse strengths for the sake of those sup-
porting transportation and for society.
The Two Pillars of Carbon Neutrality
Our efforts to achieve carbon neutrality center on two pillars:
electrification and enhanced logistics efficiency.
In the area of electrification, we will work ambitiously with
more partners to find solutions to a variety of problems while
giving customers more electrified vehicle options in accordance
with their specific needs.
We also intend to make significant contributions toward
enhancing logistics efficiency. We plan to take the ideas under-
pinning the Toyota Production System (TPS) to streamline on-
site work while using connected technologies to facilitate
real-time processing of various logistics and traffic flow data,
which can be used to optimize operations. These are carbon–
neutrality-focused initiatives that can be enacted immediately
and will serve to lower operating costs for logistics companies
while simultaneously reducing CO2 emissions.
Projects Connecting Fukushima and Tokyo and
Projects in Fukuoka
We are working with shippers and logistics companies in
Fukushima Prefecture and Tokyo on the large-scale social imple-
mentation of electric vehicles. A total of 580 vehicles will be
used, including heavy- and light-duty fuel cell electric trucks as
well as light-duty BEV trucks and mini-commercial vans, to com-
prehensively cover transportation from trunk lines to the last
mile. As of the end of October 2024, 220 electrified vehicles
have hit the roads. In addition to promoting implementation in
cities with populations of around 300,000, which is typical of
Japan, we will work to develop standards for these vehicles and
develop an energy management system that is integrated with
operation management to lessen the social burden associated
with the introduction and use of electric vehicles and address
transportation-related issues. Furthermore, in a public—private
initiative aimed at carbon neutrality, we have begun sharing data
with national bodies promoting digital transformation for com-
mercial vehicles. This includes data about electrified vehicles on
the road, such as that on driving, batteries, charging, and refuel-
ing with hydrogen.
The city of Fukuoka, Fukuoka Prefecture, has begun imple-
menting FCEVs as garbage compactor trucks, ambulances, food
delivery trucks, BRT buses, and other vehicles that support daily
living, utilizing hydrogen stations operated by the city and other
entities. Tokyo has launched a staged support project for intro-
ducing these vehicles that aims to put fuel cell garbage com-
pactor trucks into action and is working with local governments
to bring hydrogen-powered vehicles into key areas of the Tokyo
metropolitan area to encourage familiarity among residents and
Contributing to Carbon Neutrality through Commercial
Vehicle Electrification and Enhanced Logistics Efficiency
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Commercial Sector Initiatives
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Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
facilitate widespread use across multiple municipalities.
CJPT Initiatives and Government Policy
The Japanese government has set targets for 2030 regarding the
use of commercial electrified vehicles; for small light-duty trucks
under eight tons, the target is a 20%–30% electrification rate,
and for heavy-duty trucks of eight tons or more, the target is
5,000 vehicles. In addition, the target for hydrogen consumption
for FCEVs is 80,000 tons. The Basic Hydrogen Strategy, revised
in 2023, and the interim report of the Mobility Hydrogen Public-
Private Conference include provisions for looking into focused
support for commercial FCEVs, which are expected to elicit
greater demand for hydrogen in the future, as well as for select-
ing areas to concentrate the introduction of FCEVs in an effort
to create demand clusters and ensure viability. From this govern-
ment policy, both public and private sectors will work together to
promote the popularization of commercial electric vehicles.
Logistics Reforms in Collaboration with AEON
In April 2021, CJPT began collaboration with AEON to improve
logistics at the Minami-Osaka distribution center for AEON
GLOBAL SCM Co., Ltd. AEON has combined its retail logistics
know-how with the TPS philosophy to better visualize and
streamline the flow of goods, resulting in increased loading effi-
ciency thanks to improved operations at the distribution center,
as well as optimized delivery using real-time data. These
improvements have manifested as a
10% increase in efficiency of total
truck travel distances and a 10% drop
in CO2 emissions. From September
2022, the scope of these activities was
extended to wholesalers and suppliers,
and through cross-industry efforts, we
have helped streamline transportation
and delivery from upstream to downstream.
Starting in July 2024, the company will consolidate these
optimized operations at its new logistics center, AEON Fukuoka
XD, to maximize the benefits of this heightened logistics effi-
ciency. We will also promote the electrification of vehicles,
aiming to reduce CO2 emissions by 35% by 2030. Our overall
goal in these endeavors is to create a model that will both
resolve logistics-related issues while moving toward carbon neu-
trality and expanding the model nationwide.
Expansion to Asia and Thailand
CJPT’s domestic initiatives have expanded their reach into
Thailand, and it has signed a memorandum of understanding
with Charoen Pokphand Group (CP) and Siam Cement Group
(SCG) for collaboration in three areas: data solutions, mobility
solutions, and energy solutions, aiming toward happiness for all
in the country. With the various companies involved in this proj-
ect working together across industries, CJPT-Asia was estab-
lished in Thailand to better promote activities. In terms of data
solutions, CJPT-Asia analyzed on-site issues at CP and SCG
logistics warehouses and took steps to improve efficiency, utiliz-
ing real-time data for parcels and other items to improve the
efficiency of deliveries. We have since confirmed that on-site
improvements made at SCG’s distribution centers have improved
container loading rates, while driving distances for CP Group’s
online deliveries have been reduced by 15% and transportation
routes have been optimized. As for mobility solutions, CJPT-Asia
has introduced light and heavy fuel cell trucks, the Hilux Revo e,
the JPN Taxi LPG-HEV, and commercial vans. We are currently
conducting demonstration testing using carbon–neutrality-
oriented vehicles suited to Thailand’s economic environment,
energy situation, and usage patterns, which differ from those of
Japan. For energy solutions, CP is investigating the possibility of
utilizing energy sources well-suited to Thailand’s environment,
such as biogas derived from manure collected from CP’s large-
scale poultry farms to produce hydrogen in a hydrogen produc-
tion facility, which can be used by the fuel cell trucks introduced
in the aforementioned demonstration testing.
Going forward, Toyota will use this project to deepen collab-
orative ties with other partners and make broad contributions
both in Japan and throughout Asia, helping fulfill the automotive
industry’s mission of improving people’s lives and leaving a better
Earth for the next generation.
Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy Hydrogen Business Strategies
Commercial Sector Initiatives
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
70
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
Ongoing Advancement of the Hydrogen-Powered Corolla
In 2024, Toyota’s efforts to race a Corolla equipped with one of
the Company’s hydrogen engines currently in development
entered their fourth year.
Hydrogen engines are partially modified versions of conven-
tional gasoline engines that burn 100% pure hydrogen,
unmixed with gasoline, directly as fuel. As no fossil fuels are
burned, hydrogen-engine vehicles emit almost no CO2 when in
operation, with the only emissions being from the combustion
of minute amounts of engine oil. The hydrogen-powered engine
is an option with significant potential to contribute to carbon
neutrality while making use of technologies for internal com-
bustion engines built up over past decades and protecting
engine-related jobs in the automotive industry.
In late 2020, after taking a test drive in a hydrogen-engine
prototype car, master driver Morizo (Chairman Akio Toyoda)
decided on the spot to enter a hydrogen engine car in Super
Taikyu Series races. The development of race vehicles is dra-
matically faster and more agile than that of mass production
vehicles. We decided that racing would provide the ideal envi-
ronment for refining our hydrogen engines, which are being
developed with the goal of achieving carbon neutrality.
Since its first time entering a hydrogen-powered Corolla in
the 2021 Super Taikyu Series season, Toyota has continued to
develop technologies for producing, transporting, and using
hydrogen. In the 2021 and 2022 seasons, we raced a Corolla
with a hydrogen engine that ran on gaseous hydrogen fuel.
These efforts shifted to the next stage in the 2023 season,
when we launched a world-first initiative to utilize liquid hydro-
gen fuel.
The switch to liquid hydrogen fuel increases the volumetric
energy density of the fuel, approximately doubling a vehicle’s
driving range, an important advancement given that short driv-
ing ranges have been an issue with gaseous fuel. In addition,
liquid hydrogen fueling stations take up only a quarter of the
space required to install a gaseous hydrogen station, enabling
refueling in the pit itself.
In the 2024 season, we took another step forward in the
evolution of our hydrogen engines by increasing the durability
of pumps, which had needed to be replaced numerous times in
prior races; extending driving ranges by modifying tank shapes;
automating the processes of switching CO2 collection units;
and implementing other substantial improvements.
Expansion of Partnerships
Toyota could not have made such progress alone.
In 2023, a portion of the liquid hydrogen used in the hydro-
gen-powered Corolla in the Fuji 24 Hours Race was lignite-
derived hydrogen produced in and transported from Australia in
the Suiso Frontier liquefied hydrogen carrier built by Kawasaki
Heavy Industries, Ltd., as part of the HySTRA project. In addition,
the mobile liquid hydrogen fueling station used at the circuit
was jointly developed by Iwatani Corporation and Toyota.
Moreover, accompanying the switch to liquid hydrogen fuel,
many parts required modification.
In 2024, Toyota partnered with Japan Metals & Chemicals
Co., Ltd., to develop an electricity supply system that used
hydrogen storage alloy in order to address the boil-off gas*
issues faced with prior liquid hydrogen fueling systems. A con-
cept model of an engine that reused boil-off gas produced
during driving as fuel or for generating electricity was displayed
at the final race of the Super Taikyu Fuji Final 4 Hour Race,
attracting individuals with similar ambitions to join us in the
development process.
Through cooperation with our numerous partners, the liquid
hydrogen-fueled Corolla has successfully completed its races,
and, as a result of such efforts, the number of partners has
grown from eight in May 2021 to 56 at the end of the 2024
season.
* Vaporized hydrogen produced due to the evaporation of liquid hydrogen fuel con-
tained within tanks as a result of natural influx of outside heat
Continuous Efforts to Develop Hydrogen Engines
The scope of hydrogen engine development is expanding
beyond motorsports. For example, a verification test of a hydro-
gen-powered Hiace was conducted on public roads in Australia
over the period from October 2023 to February 2024. In addi-
tion, Japan’s first verification test of a mobile liquid hydrogen
fueling system was carried out at the Iwatani Hydrogen Station
in Kariya City, Aichi Prefecture, in October 2024.
Toyota will continue in its efforts to expand the possibilities
of hydrogen engines. Aiming to contribute to the realization of a
carbon-neutral society, we will continue to evolve alongside our
partners in line with the principle of “making ever-better cars
from a starting point in motorsports” and our multi-pathway
strategy.
Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy Hydrogen Business Strategies
Development of Hydrogen Engines for Motorsports
71
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
—Future Mobility Society Envisioned
by an Automobile Manufacturer
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy
Carbon-Neutral Fuel Initiatives
To realize carbon neutrality, it is important to not only promote widespread adoption of electri-
fied vehicles, primarily for new vehicle sales, but also reduce the amount of CO2 emissions from
vehicles customers already own and use. It is also necessary to provide a wide range of energy
options to meet the needs of diverse vehicles, regions, and customers. With regard to hydrogen,
synthetic fuels, bioethanol fuels, and other products based on electricity derived from renew-
able energy sources, we are collaborating with a diverse range of partners from across various
industries to reduce CO2 emissions throughout the entire production process, starting from raw
material procurement, and to achieve the practical application of such products.
In May 2024, with the aim of realizing a carbon-neutral society, we commenced a study for
the introduction and popularization of carbon-neutral fuels* that contribute to the decarboniza-
tion of automobiles together with Idemitsu Kosan Co., Ltd., ENEOS Corporation, and Mitsubishi
Heavy Industries, Ltd. Seeking to introduce carbon-neutral fuels in Japan around 2030, we
embarked on this study together with these companies, fulfilling major roles respectively in
supply, technology, and demand.
In the United States, we are carrying out on-road evaluations of fuels used for research pur-
poses together with Exxon Mobil Corporation and are implementing fueling demonstrations of
low-carbon fuels in new vehicles in collaboration with Chevron Corporation. In these ways, we
are working closely with domestic and overseas fuel companies, including oil companies, to raise
awareness and promote the practical application of carbon-neutral fuels.
* Carbon-neutral fuels are fuels that limit CO2 emissions across the entire product life cycle. It is a collective term that includes
synthetic fuels (e-fuel) made using hydrogen and CO2 and biofuels made from raw materials such as plants that absorb CO2 via
photosynthesis. Liquid carbon-neutral fuels in particular are advantageous in terms of energy storage and transportation and
are suitable as energy sources that can be transported.
E-fuel
E-fuel refers to fuels
produced by synthesiz-
ing CO2 captured from
the air and other sources
with hydrogen produced
by water electrolysis.
In regions where
hydrogen is inexpensive,
it is commonly used
directly in fuel cells (FCs) under a local production and consumption model. However, in regions
with high hydrogen prices, there is potential to achieve lower overall costs by producing e-fuel in
regions with lower production costs and transporting them to demand areas. Research is cur-
rently underway to verify the feasibility of this strategy.
Biofuels
Biofuels are biomass-based products such as bioethanol and biodiesel.
In July 2022, Toyota and six private companies established the Research Association of
Biomass Innovation for Next Generation Automobile Fuels, through which we have been promot-
ing research with the aim of improving manufacturing technologies for second-generation bio-
ethanol fuels. In November 2024, a ceremony was held to celebrate the completion of a
bioethanol production research facility in Okuma Nishi Industrial Park, located in Okuma Town,
Fukushima Prefecture.
Compatible Vehicles
· Blends of 10% biofuel compatible
with all vehicles types
· In Brazil, sale of HEVs that make use
of 100% biofuel
· In India, announced introduction of
HEVs compatible with biofuel
(November 2022)
· In Brazil, unveiled prototypes of
plug-in hybrid ethanol vehicles and
biomethane vehicles at G20 in 2024
Initiatives of the Research Association (Fukushima Prefecture)
Utilization of Toyota Yeast
Framework of the Research Association
In emerging countries, the use of biofuels is expanding, and efforts are being promoted to intro-
duce biofuel (ethanol)-compatible vehicles in a timely manner and in the best possible locations.
World-class ethanol
fermentation
concentration
Integrated promotion of manufacture,
transportation, and utilization
Glucose
Acetic
acid
10%
increase in production
Xylose
Ethanol
Fermentation
inhibitors
ENEOS Corporation, Suzuki Motor Corporation,
Subaru Corporation, Daihatsu Motor Co., Ltd.,
Toyota Tsusho Corporation, Mazda Motor
Corporation, and Toyota Motor Corporation
Utilization of E-fuel in the Multi-Pathway Strategy
Research
under-
way on
lowering
costs
Region where hydrogen is
inexpensive (local production,
local consumption)
As-is hydrogen
usage
Manufacture of e-fuel
using hydrogen
Universal
energy
Transporting and
utilizing e-fuel
Yen
Region where
hydrogen
is expensive
Region where hydro-
gen is inexpensive
(local production,
local consumption)
Region where
hydrogen is
expensive
(import of e-fuel)
Universal utilization through low-cost pro-
duction and efficient transportation
Transportation
costs (liquid)
Utilization in previ-
ously sold vehicles
Utilization of hydrogen (example: Truck FCs)
Utilization of e-fuel
Hydrogen
e-fuel
e-fuel
ICE vehicle
ICE vehicle
Hydrogen
FC
vehicle
FC
vehicle
72
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy Carbon-Neutral Fuel Initiatives
Carbon Neutrality in Brazil
Popularization of Bioethanol in Brazil
Brazil is the world’s largest producer of not only sugar but also bioethanol made from sugar-
cane. Because sugarcane absorbs CO2 from the air as it grows through photosynthesis, the
resulting ethanol is an environmentally friendly biofuel that does not increase atmospheric
carbon when burned. Moreover, the fuel is 20% to 30% cheaper than gasoline, making it a
popular choice at gas stations. In Brazil, 97% of cars produced domestically are flex-fuel
vehicles, which can run on 100% gasoline, 100% ethanol, or any mixture of the two.
Promotion of Toyota Technology That Reduces CO2 Emissions by at Least
30% of Gasoline Cars
In 2007, Toyota rolled out its first flex-fuel vehicle for the Brazilian market and has been pro-
ducing ethanol-powered cars ever since. In 2019, engineers from Toyota do Brasil Ltda. joined
forces with counterparts in Japan, combining their respective expertise in flex-fuel vehicles
and hybrid technology to develop a flex-fuel HEV.
Initially, the locally produced lineup included only the Corolla sedan, with the Corolla
Cross added in 2021. In 2024, the manufacture of a compact flex-fuel HEV commenced.
Compared with conventional engines, hybrid technology improves efficiency by at least 30%
and, when combined with renewable fuel technology, can reduce CO2 emissions by some
70%. In addition, as enhanced safety and environmental technologies continue to push vehi-
cle prices upward, Toyota aims to offer a flex-fuel HEV option among lower-priced compact
cars, thereby further boosting the adoption of this technology.
Production of Cleaner BEVs and FCEVs Using Sugarcane
Sugarcane and bioethanol can be used not only for fueling engines; they can also help make
electrified vehicles carbon neutral. For example, biogas can be obtained from the straw that
remains after harvesting sugarcane or bagasse left over from the ethanol production pro-
cess. This biogas can be used to generate green electricity.
Furthermore, since ethanol (C2H5OH) contains abundant hydrogen, research is underway
to produce green hydrogen from bioethanol.
By harnessing these technologies, BEVs could be charged with electricity generated from
sugarcane-derived fuels, while FCEVs could run on hydrogen made from ethanol. To that end,
we will continue our efforts toward sugarcane and bioethanol as a practical and sustainable
option toward achieving carbon neutrality.
Initiatives of the G20 Energy Transitions Ministerial Meeting
At the G20 Energy Transitions Ministerial Meeting, which was held in Brazil in 2024, Toyota
introduced its efforts toward biofuels that combine internal combustion engines with electri-
fication technologies as an option for promoting carbon-neutral mobility. At the same time,
Toyota unveiled a prototype of a vehicle equipped with hybrid flex-fuel plug-in technologies
and a pickup truck powered by biomethane.
73
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
—Future Mobility Society Envisioned
by an Automobile Manufacturer
73
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy
Circular Economy
Toyota believes in the principles of conducting business for the public good and contributing to
people’s happiness and social development. To ensure that we can reflect upon these principles,
it is important that we address the material issue of Coexistence of Humanity & the Earth. To
build relationships of mutual gratitude with stakeholders in each country and region, we must
conduct our business activities in a manner that carefully considers the global environment.
Some of the challenges faced by the automotive industry in this regard are waste manage-
ment and the extraction of rare metals, which has been driven by the major shift toward electri-
fication. As the use of powertrains evolves from conventional internal combustion engines to
HEVs, PHEVs, BEVs, and FCEVs, Toyota is proceeding with multifaceted examinations focused on
each drive system and on reducing environmental burden.
One idea that we are pursuing is the circular economy.
Toyota aims to transition to a circular economy in which efforts to reduce, reuse, and recycle
resources are balanced with economic growth.
The circular economy is formed through collaboration between core industries, engaged in
the manufacture and sale of cars, and supportive industries, involved in the collection, disassem-
bly, and resource recycling of vehicles as well as their disposal. By promoting the recovery and
Make cars using fewer resources
Utilize resources for longer
Eliminate waste
Vehicle
development
Easy
disassembly
Recycled
materials
Materials and compo-
nents manufacturers
Manufacture
Reuse of
components
Upgrades
Utilization
Maintenance
Vehicle disposal
(disassembly)
Shredders
Sorting and
processing
Information
Logistics
Chemical recycling
Material recycling
Establishment
of regulations
Diagnostics and repair
Sharing and sub-
scription services
recycling of rare resources, minimizing waste, and utilizing recycled materials, we aim to not only
maintain the value of cars throughout the value chain but also reduce environmental burden. We
will also take steps to re-evaluate and leverage the value of materials for over 30,000 automo-
tive parts while recovering, reusing, and recycling automobiles as a valuable resource. In this way,
we will help establish a circular economy ecosystem across the entire automotive industry.
The Three Pillars of the Circular Economy at Toyota
1. Make cars using fewer resources
Toyota has been working to standardize parts and reduce the number of parts needed. At the
same time, we have pursued car manufacturing that avoids the use of rare resources. Moreover,
we have been utilizing recycled materials and used components by digitalizing our technological
development with the aim of establishing a lineup of cars that meets the needs of our custom-
ers and caters to the conditions in each country and region.
2. Utilize resources for longer
For our customers to be able to use our cars for longer periods of time, we have endeavored to
create highly durable vehicles with specifications that enable long-term, ongoing use. Moving
forward, through analysis of the data we have thus far accumulated on vehicles and compo-
nents, we will promote appropriate vehicle diagnostics and repairs and support decision-making
for the right timing to do so. Furthermore, by enhancing hardware (components) crucial for cus-
tomers to maintain and continue to use their favorite automobile and upgrading software, we
will aim to ensure that customers can use the same car for longer.
3. Eliminate waste
Toyota has promoted the appropriate disposal of vehicles so as to prevent pollution from used
automobiles. To make disposal as easy and appropriate as possible, we have been making efforts
to develop components with simple structures using a single material. In addition, we have
worked to recover usable components from used vehicles and reuse other resources therefrom.
We have also been promoting the development of technologies that make use of residue from
shredded vehicles.
74
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
—Future Mobility Society Envisioned
by an Automobile Manufacturer
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
Battery Ecosystems
In our battery ecosystems, we aim to utilize resources effectively and reduce environmental
burden by recovering, reusing, and recycling batteries.
1. Battery recovery
At the Toyota HV Recovery Center, we recover and appropriately dispose of nickel-hydrogen bat-
teries (recovered and disposed of approximately 40,000 batteries in 2023). Furthermore, we
collaborate with the Japan Auto Recycling Partnership to recover lithium-ion batteries.
2. Sweep energy storage system
Drawing on the technologies we have cultivated in the development of electrified vehicles
(HEVs, PHEVs, BEVs, and FCEVs), we have developed a sweep energy storage system that utilizes
the drive batteries of electrified vehicles. This system has many features, such as the ability to
simultaneously use a variety of battery types, as well as batteries with varying degrees of degra-
dation; the ability to greatly simplify power conversion equipment, resulting in lower facility
costs and less energy loss during power conversion; and the ability to replace degraded batter-
ies while the system is operating, thereby realizing lower operating costs.
3. Non-calcined batteries
Lithium-ion batteries have conventionally been incinerated during disposal. However, by using a
direct-crushing recycling method, which we are currently developing and verifying, we have been
able to recover not only rare metals from these batteries but also electrolytes. Through this
method, we have both reduced CO2 emissions and improved the rate of resource recovery.
Toyota’s Sweep Energy Storage System
Conventional Energy Storage System
Enables direct connection with battery and allows charging and dis-
charging without being constricted by point of connection
Solar panels
Alternating
current
Battery and
Connection point
limitations
Direct
current
Batteries
Direct current
Alternating
current
Solar power
DC/DC
Converters
Solar power
PCS
Battery A
DC/DC
Converters
Battery A
PCS
Battery B
DC/DC
Converters
Battery B
PCS
Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy Circular Economy
75
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
Toyota offers new value based in software toward the realiza-
tion of a mobility society. By seamlessly integrating cars and
daily living and proposing and delivering experiences and ser-
vices that are one step ahead of customers’ expectations, we
will alter people’s lifestyles, transform mobility into excite-
ment, and enrich the lives of customers. To connect people,
cars, and social systems is to create an ecosystem of which
cars become an integral part and lead to the achievement of
well-being.
Accelerating such intelligence and enabling open innova-
tion is a software platform called Arene OS. For the in-car
experience, Arene OS provides applications that ensure a
comfortable riding experience through advanced safety tech-
nologies and infotainment. These applications are updated
regularly to keep pace with the changing times. For the
out-car experience, Arene OS will expand the value we offer
through cross-industry collaboration with partners in housing,
energy, logistics, and other essential sectors of social systems.
Toyota’s Aim to Expand the Value of Mobility
Aiming for Zero Traffic Accidents through the Integration of Mobility and
AI/Telecommunications
Joint Initiative between Toyota and NTT
Software Defined Vehicles (SDVs)
Joint Initiative between Toyota and NTT in the
Field of Mobility and AI/Telecommunications to
Realize a Society with Zero Traffic Accidents
On October 31, 2024, Nippon Telegraph and Telephone
Corporation (NTT) and Toyota held a press conference to
announce a joint initiative in the field of mobility and AI/tele-
communications with the aim of realizing a society with zero
traffic accidents, during which President Koji Sato outlined
his vision of “changing the future of cars.”
NTT and Toyota reached an agreement to build a mobility
AI platform toward realizing a society with zero traffic acci-
dents. I would like to begin by sharing the background behind
this new joint initiative.
Toyota’s relationship with NTT stems from the mutual
desire to provide more enrichment to people’s lives. Based on
this desire, the two companies have continued to deliver
products and services that enhance the value of mobility for
people, goods, and information over the years, in order to
create a safe, secure, and convenient society. As we enter
an era in which cars are connected to society through the
advancement of connected technologies, it will become
more important than ever to develop a social infrastructure
that integrates cars and telecommunications. Recognizing
this fact, we have come together with NTT on this joint
initiative.
Toyota and NTT have worked together since 2017 to
develop data processing infrastructure and other technolo-
gies in anticipation of the spread of connected cars. In addi-
tion, since 2020, we have deepened collaborative
relationships from the broad perspective of developing a
mobility society by expanding our business scope from cars to
cities and building foundations for smart cities. The next step
is to accelerate our collective efforts to change the future of
automobiles, by building an AI and communication infrastruc-
ture that contributes to the development of a mobility
society.
We aim to realize reliable accident prevention solutions
by continuously collecting data on people, cars, and infra-
structure, training AI on these data, and predicting various
driving situations while advancing driver-assistance systems.
To that end, we must establish a high-quality communication
environment specific to automobiles, which includes a seam-
less communication environment and high-speed, low-
latency communication.
Akira Shimada
President of Nippon Telegraph and
Telephone Corporation (NTT)
76
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Rear-end collisions
No. of traffic accidents
630,000
Other
2013
2016
2019
2022
Right- and
left-hand turns
Poor-visibility
accidents
300,000
Traffic Accidents
Need for
further
measures
36
13
17
10
25
31
13
19
12
25
(%)
Toyota’s Aim to Expand the Value of Mobility Software Defined Vehicles (SDVs)
Moreover, we must develop a large-scale data center to
handle the large volume of information. In this area, however,
Toyota intends to take the lead without relying on the IT and
telecommunications sectors by continuously reviewing the
details of its collaboration with NTT. Despite the various ele-
ments to consider from a technological development aspect,
we will standardize communication methods by continuing to
proceed with demonstration experiments in Woven City.
AI and Telecommunications Infrastructure
While continuing to expand the value of cars, Toyota will
create diverse forms of mobility value by focusing on its
synergy with social systems, and we believe the driving
force of this value creation are Toyota’s Software Defined
Vehicles (SDVs).
From the standpoint of an automaker, Toyota believes
safety and security are the greatest types of value provided
by SDVs, in other words, the ability to help realize a society
with zero traffic accidents, enabling everyone to enjoy the
freedom of mobility.
To realize safe and reliable SDVs that are connected to
society, we will continue to update the software platform
Arene OS and Toyota’s electronic platforms. For example,
we will revamp the electronic control system to extract the
necessary data, collect data through intelligent and suitable
communication methods, and update the software in a timely
manner. The key to achieving this is the advancement of
automated driving technology that utilizes AI and
telecommunications.
The graph above, which shows the number of traffic acci-
dents by type, indicates that the number of traffic accidents
has declined over the past 10 years due to the proliferation
of preventive safety technologies. However, we must expand
measures to reduce the number of rear-end collisions, which
still account for a large proportion of traffic accidents, and
the vast number of accidents that occur due to poor visibility
and during right- and left-hand turns. We will take the follow-
ing two approaches to address these issues.
First is the development of data-driven solutions.
In addition to continuously training AI on driving data, it
will be used to create various driving scenarios using as few
data as possible. This will enhance the accuracy of simula-
tions and rapidly improve software to further strengthen the
autonomous control performance of vehicles.
Another essential element in drawing closer to zero traffic
accidents is the three-pronged coordination of people, cars,
and infrastructure. Cars that continuously collect information
on people, other cars, and infrastructure can reduce blind
intersections, which are a cause of many accidents. In addition,
training AI on such data will enable the realization of driver-
assistance systems that predict the movement of people and
vehicles with a high degree of accuracy.
Through these measures, we will strive to achieve higher
levels of safety and security in a variety of scenarios, includ-
ing poor-visibility driving in urban areas, smooth merging on
expressways, and automated driving services that address
mobility issues in suburban areas. AI, telecommunications
infrastructure, and vehicles will coordinate to bring us closer
to a society with zero traffic accidents, which we aim to real-
ize through the development of three types of infrastructure
that make up our mobility AI platform.
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Development of Data-Driven Solutions
Collect driving
data
Train and create driving
scenarios
Assess using simu-
lation vehicle
Promptly update and improve accuracy
2000
2020
Risk of
accidents
Three-pronged approach
Coordination between people, cars, and infrastructure
Address limitations of automated driving, such as blind
intersections
· Anticipate scenarios through coordination with
infrastructure
· Monitor and predict human behavior
Merging
Poor visibility
Until now
Toyota Safety Sense, etc.
Data-driven approach
Vehicles (autonomous)
Enhance performance using
AI training data
Three-Pronged Approach to Achieving Zero Traffic Accidents
Involving pedestrians
77
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
First is the development of distributed computing
resources (data centers). Based on our calculations, a rise in
the number of SDVs will expand the volume of communica-
tion and computations necessary in 2030 by 22-fold and
150-fold, respectively. In view of this, we will establish data
centers that support vast amounts of such computations in
distributed locations utilizing NTT’s IOWN technology.
Next is highly reliable next-generation communications.
By using AI to determine the most optimal form of communi-
cation for each traffic environment in real time, we will
establish the high-speed, low-latency communication infra-
structure necessary for three-pronged infrastructure
collaboration.
Finally, there is the development of an AI infrastructure.
Utilizing data collected from computational resources and
communication infrastructure, we will create an AI model
that will spur the implementation of various services, such as
automated driving and AI agents, and the creation of new
value. We will work together with NTT to develop our mobility
AI platform, aiming for widespread adoption in 2030. Through
open innovation, we will promote use of this platform by a
wide range of partners with the intent to standardize the
mobility field. Together with NTT, we will take a major step
forward in changing the future of cars through this
collaboration.
Comfortable Ride Experience (In-Car Experience)
1. Interacting with Cars
Using the latest AI technology, we continuously enhance the
quality of the in-car experience. Toyota’s in-house developed
voice recognition system enables fast response, even with
multiple requests or changing requests, allowing flexible and
quick interactions that resemble conversation with a human
operator, rather than mere voice commands.
By continuously linking AI to data and training it on such
data through interactions, we will evolve the system into a
partner that identifies with the user, making recommenda-
tions based on an understanding of their preferences and
circumstances.
2. Enhanced Driving Experience through Cockpit
Innovation
Digitalization and intelligence will greatly enhance the driv-
ing experience. In addition to intuitive operation and signifi-
cant reductions in steering volume achieved through the
steer-by-wire system, the control panel is conveniently
located to enable simple hand-held operation, allowing the
driver to keep their eyes on the road at all times.
Meanwhile, the screen in front of the passenger’s seat
allows the user to enjoy a range of applications that cater to
their needs.
Eyes on the road
Hands on the wheel
Limitless contents
on the screen
Digital driver UI
Per unit
Eyes constantly on the road and
multifunctional, simple
hand-held operation
Open platform options
Respond to diverse needs
Driver & Passenger
Equal Access to Intelligence
3. Interactions Linking People, Cars, and Society
While driving, users will also be able to connect with sur-
rounding towns, stores, people, and cars. As the car evolves, it
will connect the inside and outside of the car, enabling freer
communication. Cars will be able to read the user’s emotions,
offer services that cater specifically to their needs, and sug-
gest routes and stores based on their circumstances.
Toyota’s Aim to Expand the Value of Mobility Software Defined Vehicles (SDVs)
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
Intelligent Communications
Infrastructure
Overview of Mobility AI Platform
AI Platform
Distributed Computing
Infrastructure
Zero accidents
through coordi-
nation between
people, cars, and
infrastructure
People-oriented AI
agents
Advancement of
data-driven auto-
mated driving
Energy-saving
and efficient
logistics
Radio
environment
Surrounding
environment
Local
information
Occupant status
Vehicle
condition
Broadband
Narrowband
P2P
Optimal Communication
Decisions Made by AI in
Real Time
Private cloud
On-premise
data center
Public cloud
Creation of new value and services
78
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Toyota’s Aim to Expand the Value of Mobility Software Defined Vehicles (SDVs)
Toyota’s Vision for the Mobility Society | Woven City | Toyota’s Vision for Carbon Neutrality—Overview of the Multi-Pathway Strategy | Toyota’s Aim to Expand the Value of Mobility | Diversifying Mobility: Enhancing Freedom of Movement
Enriching People’s Lives and Resolving Social
Issues (Out-Car Experience)
We will propose services that seamlessly connect cars to
cities and their infrastructure. For example, enabling cars to
utilize and relay back not only the data they receive from the
driver but also vital data on daily life collected from other
sources will enable safer, more secure driving. By inputting
lifestyle data such as schedules, contacts, and communities,
cars will be able to suggest the most suitable services
according to the user’s needs and situation, including recom-
mendations on outings and other aspects of the user’s life-
style based on their calendar or condition, as well as planning
one-trip itineraries. Seamlessly connecting cars with society
enables the provision of experiences and services that sur-
pass customers’ expectations.
We will also help resolve social issues by realizing a real-
time delivery system using vehicle data and connected tech-
nologies to improve transportation efficiency while reducing
CO2 emissions and use of labor. Moreover, advanced safety is
key to enriching people’s lives through mobility. We will utilize
the knowledge and large volume of data accumulated over
the years to pursue our goals of zero traffic accidents, free-
dom of movement for all, and industry contributions through
mobility.
1. Addressing Logistics Issues with Connected
Technologies
To address logistics issues, Toyota has developed the
Efficient Transport Operation Support System (E-TOSS).
Based on the Toyota Production System (TPS) concept,
this system aims to improve efficiency of transport from
warehouses to retailers by combining Toyota’s real-time
information processing capabilities, big data, and information
specific to commercial vehicles, such as truck traffic restric-
tions and driving data, to create efficient transportation
plans that accurately identify daily fluctuations in cargo
volume.
E-TOSS has improved truck load efficiency, the industry
average for which is said to be less than 50%, and reduced
the distance and number of journeys by identifying efficient
transport routes.*
For details on E-TOSS, please refer to “Commercial
Sector Initiatives” on page 68.
* According to total mileage reduction results of demonstrations conducted at AEON distribution
centers, E-TOSS contributes an estimated 10%–15% reduction in transportation costs and CO2
emissions.
2. Enhancing Safety Performance Using Large
Volumes of Data
Toyota is enhancing the safety performance of its
advanced driver-assistance systems (ADASs) by
utilizing the significant volume of data that could
only be amassed by a company with the capacity
to produce over 10 million cars per year.
The next-generation ADAS in development
uses data collected from vehicles equipped with
third-generation Toyota Safety Sense (TSS).
Cases involving emergency braking and steering
are recognized and studied by AI. The greater the
number of similar cases, the higher the rate and
accuracy of recognition. Therefore, a company
like Toyota that produces a large number of vehi-
cles has an advantage in acquiring such data, even
for rare near-miss scenarios.
Arene OS
Arene OS is a software platform that provides a personalized,
new experience for every customer through learning. TOOLS
in Arene OS allows Toyota and its partners to efficiently
develop and evaluate car software. In addition, the Software
Development Kit (SDK) enables applications to be quickly
and easily integrated into the vehicle. Arene OS serves as an
interface between cars, people, and social systems.
Safer and Ever-Better Cars
New Ways to Use
Connecting Cars and People
Connecting People, Cars, and Social Systems
Tools
API
Software Development Kit
(SDK)
User Interface
(UI)
Connecting Cars and People
Linking Mobility AI Platform to Arene OS
79
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Mobility that offers greater comfort and freedom is an impor-
tant aspect of making everyday life with cars a richer experi-
ence. Toyota operates around the world, and the needs and
values of our customers differ from region to region and gen-
eration to generation. To meet these expectations, we seek
to offer a diverse selection of products and services.
e-Palette
As the first step in its transfor-
mation into a mobility company,
Toyota is proceeding with the
development of the e-Palette
and conducting a myriad of
trials at various locations with a
view toward its public rollout.
One such location is Toyota Motor Kyushu’s Miyata Plant
(Miyawaka City, Fukuoka Prefecture), where Toyota has been
conducting trials in three categories: people, goods, and services.
In terms of people, the e-Palette was tested as a com-
muter shuttle moving employees within the plant. For goods,
the e-Palette was used to transport work-related gear and
other equipment. With regard to services, the e-Palette was
trialed as a mobile vending service and a mobile store. Guided
by the concept of “creating a mobility service that transforms
our cities and supports people’s lives,” Toyota will draw on the
various insight gained through these trials with the aim of
swiftly achieving the public rollout of the e-Palette.
KAYOIBAKO
The KAYOIBAKO (configurable shipping containers) is designed
for safely and efficiently transporting parts and products
between different facilities. With dividers that can be adjusted in
accordance with the layout of the production floor or items being
transported, the KAYOIBAKO is able to meet diverse needs. In this
way, the KAYOIBAKO serves as a battery electric vehicle (BEV)
that incorporates the concept of a
returnable container.
Drawing on its properties as a
BEV, the KAYOIBAKO has a flat
floor and spacious interior. It also
features an “ultra-expandable”
design that allows customization to support different applica-
tions, including being able to rearrange the internal dividers to
move various objects. With its simple interior design, the
KAYOIBAKO can contribute to enhancing the efficiency of
last-mile logistics. It can also be customized for additional
passenger seats so that it can improve mobility for people in
local communities. Also, the floor of the KAYOIBAKO is
equipped with Toyota’s one-touch wheelchair fastening device,
enabling it to serve as an assisted mobility vehicle.
NEO Steer
The NEO Steer, which Toyota is
developing in collaboration
with para-alpine skier Taiki
Morii, allows individuals to drive
using only their hands. Using a
design similar to the handlebars
of a motorcycle, the Neo Steer
integrates accelerator and brake pedals into the steering
wheel mechanism. Not only does this design make driving
easier for those with lower limb impairments, it also offers a
greater degree of freedom for drivers in general.
By employing steer-by-wire technology to control the
tires via electronic signals, the Neo Steer enables full steer-
ing control with just a 90-degree turn of the steering wheel.
As a result, drivers can operate this system with peace of
mind, as they do not need to remove their hands.
In the future, Toyota will move forward with initiatives
focused on the practical implementation of the Neo Steer,
with the aim of making it an option for steering in the future.
Micro Palette
Toyota’s Micro
Palette is a
small delivery
robot that can
deliver physi-
cal goods to a loved one, along with the feelings that go with
it. It serves as a form of last-mile mobility that gives a
glimpse of what logistics could look like in the future. The
Micro Palette was developed with the expectation of playing
a role in the final stage of logistics, where a product pur-
chased online is handed over to the recipient. When a person
approaches the robot, it adjusts its angle to look up at the
person. By incorporating this kind of unconscious communica-
tion that typically occurs between humans into the move-
ment of the Micro Palette, Toyota has placed emphasis on
fostering trust between people and technology.
Round Palette
The Round Palette is a four-pas-
senger, eco-friendly vehicle
designed to move at a pace slower
than walking with the aim of con-
necting people and immersing
them in cityscapes and daily life.
The upper section of the Round Palette can be replaced,
allowing for various ways of riding that meet a wide range of
needs, including standing rides for easier ride-sharing and
seated rides for leisurely conversations and dining.
Mobile Toilet (Mobile Barrier-Free Toilet Trailer)
Toyota has developed a mobile barrier-free toilet trailer to
respond to the needs of wheelchair users for a “toilet that
comes to where you need it.” This toilet was developed based
Diversifying Mobility: Enhancing Freedom of Movement
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80
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Diversifying Mobility: Enhancing Freedom of Movement
on the premise that it can be
used anytime, anywhere, and by
anyone.
The mobile toilet features a
gradual incline that enables
wheelchair users to move independently as well as a spacious
interior equipped with a built-in assistance bed, making for a fully
accessible design. The toilet is user-friendly for not only people
with disabilities but also senior citizens and families with children.
Furthermore, no special towing license is required for the trailer,
as it can be driven with only a standard driver’s license.
The mobile toilet has a wide range of applications, both
during normal times and emergencies. In fact, the toilet was
used by those impacted by the 2024 Noto Earthquake who
were in need of a barrier-free toilet.
Sales of the toilet commenced in summer 2024, with a
focus on introduction at local government facilities. We also
have plans to build networks among government facilities that
have introduced these toilets so that they can be shared
between said facilities, particularly during times of disaster.
Moving forward, we will promote the widespread adoption
of the mobile barrier-free toilet trailer with the aim of creat-
ing a society where people can go on outings freely without
having to worry about if they have access to toilet facilities.
C+walk
The C+walk series is a form of
pedestrian mobility assis-
tance. In the series, we offer
the sitting-type C+walk S and
the standing-type C+walk T
models. Both C+walk models, which do not require users to
have a driver’s license, adopt a slim form to ensure that they
can move smoothly and naturally in the same space as
pedestrians without standing out.
The C+walk also offers simple operation, which allows
users to accelerate by squeezing the accelerator lever and to
come to a stop by releasing the lever. This mechanism
enables smooth maneuvering on even narrow roads. The
accelerator and brake levers are positioned on both the left
and right sides of the mobility vehicle, making for easy opera-
tion regardless of the user’s dominant hand, while ergonomic
considerations for the steering wheel angle, grip shape, and
lever and reverse button arrangement ensure intuitive
operation.
With travel speeds that are roughly the same as pedestri-
ans, the C+walk pursues a high level of affinity with pedes-
trian spaces, such as allowing users to hold conversations
with the pedestrians around them while in motion. The C+walk
also comes with safety functions, such as an obstacle detec-
tion function that helps users avoid people and objects in
front of them when in motion. By doing so, the C+walk aims to
achieve a harmonious existence with pedestrians.
One-Touch Wheelchair Fastening Device
Drawing on the know-how it
has long cultivated in the
development of assisted
mobility vehicles, Toyota has
developed a system that
allows anyone to easily and securely anchor a wheelchair in a
vehicle to enable freedom of movement for wheelchair users.
Many conventional anchoring methods used on public
buses and other vehicles require the bus crew to secure the
wheelchair in place using a belt with three hooks. Even for
experienced crew members, this anchoring process takes
around two minutes and therefore can take an emotional toll
on wheelchair users, making them feel self-conscious as
other passengers are kept waiting. The process is also physi-
cally taxing for crew members, who must squat down to
attach the hooks.
With Toyota’s newly developed device, once the wheelchair is
in position, the one-touch fastening arm installed in the vehicle
latches onto the anchor bar mounted on the base of the wheel-
chair with the press of a switch, securing it in just two seconds.
Widespread adoption of this technology could make it
more practical for wheelchair users to, for example, take their
private car from their home to a bus stop, transfer onto a bus
to the airport, and from there fly to their destination. Stress-
free travel by taxi or boat at the wheelchair user’s travel des-
tination could also be possible. To that end, the wheelchair,
bus, and automotive industries are working together to create
standards to make such a scenario a reality.
Toyota aims to roll out this device for various forms of
mobility, including ships and airplanes, to ensure that wheel-
chair users can enjoy the freedom of stress-free mobility.
JUU Electric Wheelchair (Under Development)
The JUU electric
wheelchair is a
form of mobility
that can go up and
down stairs and
traverse uneven
surfaces, contributing to barrier-free access.
The JUU’s most significant feature is its ability to navigate
steps up to 16 cm tall while the user remains seated. When
climbing stairs, the JUU’s rear flipper, referred to as the
wheelchair’s “tail,” drops down from behind the backrest to
support the wheelchair as it moves upward. Similarly, on the
descent, the tail prevents the wheelchair from tipping over,
maintaining stability as the JUU backs down the stairs.
The drive system for the wheelchair makes use of electric
power steering motors normally found on board vehicles. The
torque that these motors deliver improves safety by ensuring
that the tires do not counter-rotate when ascending or
descending. In addition, the use of automotive components
offers advantages in terms of cost.
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81
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
As chief sustainability officer (CSO), I have continued to pursue
activities focused on engagement with Toyota’s stakeholders.
In 2024, I feel we made good progress with gaining the under-
standing and support of an even larger number of stakeholders.
In particular, the focus of global discussions on carbon neu-
trality has moved from establishing targets to implementing
initiatives, and as such Toyota’s multi-pathway strategy has been
receiving greater recognition both in Japan and overseas.
This recognition reflects a clearer understanding of the
importance of offering inclusive solutions through a diverse
range of energy and powertrain options in order to meet the
varied needs of each region and their customers. It also
shows an understanding of the importance of immediate
efforts to reduce CO2 emissions as much as possible by
offering affordable powertrains.
Toyota’s Sustainability
Our formulation and implementation of the unique multi-pathway
strategy reflect our unwavering commitment to sustainability.
The multi-pathway strategy stems from our founding ideal of
“for the sake of others.” Guided by this ideal, we have focused
not on short-term gains or accolades but rather on reflecting on
how we can contribute to the realization of a sustainable society
and taking continuous action to do so.
Even amid the difficult operating environment of the early
2010s, when we faced six major challenges, we prioritized main-
taining domestic production volumes in order to protect Japan’s
technological and industrial foundations. In a similar manner,
after the Great East Japan Earthquake, we relocated our pro-
duction bases so that we could support the long-term recovery
of the Tohoku region. With our product lineup, we allocated
resources not to producing high-profit models that sold in large
volumes but rather to restoring sports cars and other vehicles
long-cherished by customers in each region. In these ways, we
made decisions that may have potentially impacted profits neg-
atively over the short term.
However, through such decisions, we were able to bolster our
competitiveness and cultivate the ability to contribute to soci-
ety. We were also able to build strong, trust-based relationships
with our stakeholders, which in turn helped us form the founda-
tion for addressing broader sustainability issues, starting with
carbon neutrality.
Collaboration with Stakeholders
Collaboration with our vari-
ous stakeholders based on
trust-based relationships
established therewith is
essential in tackling issues
related to realizing a carbon-
neutral society.
For example, Toyota Motor Europe NV/SA holds a sustain-
ability forum each year, which provides a valuable opportu-
nity to engage in dialogue with diverse stakeholders,
including corporations, academic institutions, government
organizations, and NGOs.
At this forum, Toyota openly shares its approach to sustain-
ability, specific examples of sustainability issues, and the issues it
is facing, all while receiving constructive feedback and proposals
from stakeholders.
The 2024 forum was held in Paris at the same time as the
Paris 2024 summer Olympic Games. The forum explored the
theme of what it takes to realize an inclusive mobility society.
Based on the belief that the best way to convey Toyota’s
vision is through our products, we set up the Toyota Inclusive
Mobility Park at which participants could personally experience
Message from the CSO | Roundtable Discussion among Outside Officers | Dialogues with Shareholders and Investors | Corporate Governance | Risk Management and Compliance | Message from the CFO | Capital Strategies
Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
Message from the CSO
Embracing the virtue of “for the sake of others”
as a driving force, we strive to
provide opportunities for all Toyota Group
employees, transcending the boundaries of
companies and countries.
Yumi Otsuka
Chief Sustainability Officer
82
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
mobility solutions such as our Accessible People Mover and
C+walk, which were being used around Paris and at the
Paralympic Village during the Paralympic Games.
Although Paris was still experiencing high temperatures
during that time of the games, participants actively engaged
with and operated our mobility solutions. At meetings held after
the Toyota Inclusive Mobility Park event, we were able to hold
grounded discussions on building partnerships, creating infra-
structure, and promoting sustainable business models.
By gaining hands-on experience with these mobility solu-
tions and receiving direct explanations about them from rele-
vant employees, participants were able to get a sense of the
genuine passion and dedication of Toyota employees, driven by
the virtue of “for the sake of others.” In this way, I feel the
event helped create a dynamic exchange with stakeholders
and realize strong bonds.
New Initiatives Led by Employees
The broad range of sustainability efforts we are pursuing has
motivated our employees, a crucial stakeholder group, to take
on new initiatives.
Among the mobility solutions Toyota offered during the
Paris 2024 summer Olympic Games, Yosh-E was a device that
garnered much attention.
Developed in collaboration with external partners, Yosh-E
turns a manual wheelchair into an electrified one through the
addition of a kit. The developers of Yosh-E were committed to
realizing a stylish design and ensuring the device could be easily
operated by anyone. Observing the strong passion of the devel-
opers, I gained a sense of how the ideal of “for the sake of
others” not only helps contribute to a sustainable society and
brings pride and joy to our employees but also serves as the driv-
ing force for creating better products.
With regard to Toyota’s material issue of Active Participation
for All, we are encouraging employees to take on new initiatives
based on the ideal of “for the sake of others.”
Taking into account the diversity of our employees, including
physical differences, at our plant in Poland, we began the initia-
tive Any Member Any Process.
In the past, many employees were hesitant to speak up when
facing difficulties at work. As the Any Member Any Process initia-
tive progressed, however, employees began realizing the need to
change various work processes through their own actions, not
just for their own sake but for the benefit of their colleagues and
future employees.
By sharing information on hardships, employees can pool
together their various insights to pursue improvements, including
the establishment of new work-related mechanisms. In turn,
such improvements make work easier and help foster talent
development and strengthen teamwork.
The Any Member Any Process initiative has expanded to all
plants across Europe and is now being implemented at our Texas
Plant in the United States, led by members who visited the plant
in Poland after hearing about the success of the initiative.
We also held a global conference where we discussed the
topic of production. Whether it was in 2023 at the plant in
Poland or in 2024 at the plant in Texas, the pride and passion
that employees showed when explaining the initiative demon-
strated to me how the ideal of “for the sake of others” is firmly
entrenched across the globe and provides the driving force for
transforming the Company.
Teams of Employees Who Work “for the Sake of
Others”
Action is what is now required for sustainability.
However, it can be very difficult to determine the right
approach toward complex sustainability issues and to continue
efforts over a lengthy period of time in this highly uncertain era.
For this reason, we place emphasis on cultivating talent who
are inspired by the ideal of “for the sake of others” to take the
next step forward.
We believe that acting “for the sake of others” brings
together people with shared aspirations who can make a tre-
mendous positive impact on our business and on society as a
whole. Guided by this belief, we will continue to move forward
together with colleagues across companies and countries.
Message from the CSO
Message from the CSO | Roundtable Discussion among Outside Officers | Dialogues with Shareholders and Investors | Corporate Governance | Risk Management and Compliance | Message from the CFO | Capital Strategies
Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
83
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
83
Message from the CSO | Roundtable Discussion among Outside Officers | Dialogues with Shareholders and Investors | Corporate Governance | Risk Management and Compliance | Message from the CFO | Capital Strategies
Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
Roundtable Discussion among Outside Officers*
* Outside Members of the Board of Directors and Outside Audit & Supervisory Board Members
Looking Back on Inspection Problems
Olcott
It was clearly a big disappointment to have
the inspection problems appear, one after the
other, starting at Group companies and then gradually
spreading out and finally being discovered at Toyota. This
disappointment was widely and deeply felt and showed
that there were significant cultural issues that needed to
be addressed.
I think one unique feature of the Company and Toyota
Group companies is the strong level of trust that exists
between management and frontline employees, in other
words, the genba. And I think this level of trust at the
genba has made, to a certain extent, management com-
placent about placing huge pressure and responsibility
that have increasingly been placed on frontline
employees.
When current Chairman Akio Toyoda was CEO, we saw
significant top- and bottom-line growth, based on fast-
rising production combined with strong cost control.
While the genba responded to the production chal-
lenges as it always has, I think management either slightly
forgot, or neglected, the amount of pressure that the
genba had been put under. Frontline employees were
unable to raise their voices and express their concerns in
a timely fashion. This led to the crisis that we have experi-
enced over the last year.
From my perspective, the sense of responsibility for
both causing and fixing these problems has been felt at
all levels of management, and both leadership and front-
line employees are responding in the right way.
President Koji Sato has been energetically visiting
multiple parts of the manufacturing organization and
coming out with almost a weekly message to all the
employees analyzing the cause of the problems and what
remedial actions are being taken. That is the most
George Olcott
Outside Member of the Audit &
Supervisory Board
Hiromi Osada
Outside Member of the Audit &
Supervisory Board
Masahiko Oshima
Outside Director
84
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
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impressive part for me—the energetic way in which senior
management and frontline employees have worked
together to try and create the necessary cultural and
procedural changes to make sure that this kind of thing
doesn’t happen again.
Oshima
In response to the inspection problems at
Group companies, the entire Group was ear-
nestly considering measures to prevent recurrence, and in
my capacity as an outside officer I had begun taking steps
to help as much as possible. It was truly unfortunate that
at this point inspection problems also emerged at the
Company.
However, the chairman, president, and all other offi-
cers are doing their utmost to resolve the problems.
These efforts have left me with the impression that the
senior management team is tackling the matter with a
sincerity that borders on naivety.
The statement of frank opinions on misconduct is an
important responsibility of outside officers. When the
inspection problems occurred at Toyota, the senior man-
agement team, including the chairman and president,
and the outside officers discussed the matter for approxi-
mately two hours. President Sato subsequently led three
more meetings focused on the inspection problems. As an
outside officer, after listening to explanations of the cir-
cumstances that had been discovered, I rigorously pro-
vided a range of opinions and discussed the matter.
Although my involvement has taught me a great deal
about the practical aspects of on-site operations and
other things, I have come to realize that the inspection
problems cannot be readily solved through theory-based
third-party advice on the best course of action. Those
who are unfamiliar with production sites tend to think
that, as with ordinary cases of misconduct, a third-party
committee should be formed and improvements should
be made by exercising firm governance from a completely
external standpoint. However, inspection processes are
extremely complex because they are intertwined with
efficiently constructed production practices. I am keenly
aware that problems related to inspections cannot be
solved without an understanding of which operations are
conducted on-site and how they are conducted.
To address problems in relation to statutory certifica-
tion and realize improvements, Group companies and
Toyota have established and are currently holding Toyota
Production System (TPS) self-study meetings. The offi-
cers of respective companies, including outside officers,
are visiting sites frequently to receive briefings from
frontline personnel. Based on their understanding of what
the issues are, the officers check and discuss where and
how improvements have been made in relation to each
issue. In this way, by repeatedly listening to accounts of
the cumulative results of on-site employees’ earnest
efforts, outside officers are now able to understand
initiatives and monitor their progress.
At Toyota, not only the senior management team but
almost all employees are seriously committed to making
ever-better cars and doing everything they can to over-
come their respective challenges. When I visit frontline
operations and talk with employees, it is clear that they
are doing their utmost to solve the issues. Although the
inspection problems were extremely unfortunate, I am
hopeful that by overcoming them the Company will be
able to grow and further solidify its business foundations.
Utilizing Statutory Certification and the TPS
Self-Study Meetings
Osada
When I heard about the inspection problems, I
was still a member of the media and had yet
to become an outside officer. I was honestly shocked to
discover that even Toyota was not immune to problems of
this kind.
After I became an outside officer, I learned about the
statutory certification and the TPS self-study meetings,
and I have attended almost every meeting. Participants
wear the work clothes of their respective companies, but I
was surprised to see that when we had discussions the
statements of all attendees reflected the same set of
TPS values. There is a sense of unity at the meetings. TPS
is known worldwide as a production method. However, I
felt firsthand that it also definitely exists as a common
set of values in non-production sites.
The holding of statutory certification and the TPS
self-study meetings in which everyone participates was
initiated by Chairman Toyoda to fundamentally revise the
certification process. We are perhaps witnessing a
moment when Group companies truly transcend their
boundaries.
Continued up-close observation of such honest
efforts in this way has reassured me that this is the same
sincere Toyota that I have always known.
The inspection problems are still attracting public
attention. However, the chairman has clearly stated that
Toyota must keep addressing the problems even after
they are no longer a focus of attention. I agree with this
view. As it overcomes the crisis associated with the
inspection problems, the Toyota Group is becoming more
connected through the common language of TPS. This
will undoubtedly have a positive effect on the Group’s
competitiveness. I am excited about seeing what kind of
future developments will result from this greater
Groupwide connectedness. The chairman was the driving
force that transformed a negative event into positive
energy, and I am always highly impressed by his intuition,
ideas, and behavior.
Roundtable Discussion among Outside Officers
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Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
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To date, TPS has been particularly emphasized at pro-
duction sites. However, Toyota has many workplaces that
are not production sites, with an example being certifica-
tion sites. Toyota began to promote TPS in workplaces
other than production sites around 2021. While I believe
that these awareness-raising activities were insufficient in
some respects, at this point about half of the Company’s
employees have already undergone TPS-related training. I
also took such a training program recently. Targeting all
employees, Toyota is regularly conducting training on the
TPS concept. I feel that this training will establish strong
foundations that help avoid repetition of such mistakes.
Oshima
At the TPS self-study meetings, personnel
from Toyota and from Group companies
gather for lively discussions. The non-hierarchical atmo-
sphere is truly impressive. For example, managers in their
30s and executive vice presidents discuss matters on an
equal footing. Rather than agreeing with the assertations
of whoever is of the highest rank, each participant
expresses their opinion based on their background and
on-site experience, and everyone listens to and discusses
these opinions.
This is completely different from the atmosphere in
many companies where the opinions of senior personnel
tend to prevail. The approach to discussions at Toyota’s
self-study meetings makes me strongly conscious of a
common awareness that is focused on always aiming for
better results and making ever-better cars, which is very
reassuring. I feel that this kind of well-established corpo-
rate culture underpins Toyota’s strength as a company.
Olcott
There are two things I’d like to say in relation
to that question. The first is, as a non-Japanese
Board member, I am often concerned that Toyota is per-
haps too Japan-centric and that when we talk about shain
(employees) we have in our minds our Japanese employ-
ees. Toyota is a very global company and our overseas
business is much bigger than our domestic business. The
kinds of problems we have had domestically over the last
year could easily occur outside of Japan and cause repu-
tational damage on a much more global scale. We need
to make sure that all members of global management
and frontline employees are just as aware of the causes
and consequences of the certification problems and
potential reputational damage that they can inflict way
beyond Japan and harm our relationship with our custom-
ers, shareholders, and all of our other stakeholders.
When I go overseas, I’m always very interested to see
whether the same values that drive TPS, that drive the
three pillars, are adhered to in the same way at our over-
seas plants as they are in Japan.
I’m happy to say that my experience has been that the
overseas genba is just as strong as that domestically. In
relation to the Toyota Group, it’s a very interesting ques-
tion and I wonder sometimes whether on the Board we
need to be more conscious about what is going on outside
of the Company: the strength of Toyota, in my view, lies
very much in the Toyota Group and the kinds of synergies
that we derive being part of a group with so many excel-
lent Group companies operating with common goals and
values. I think that the role of the chairman in Group gov-
ernance is very important and not well understood out-
side the Company, and perhaps even within the Company.
We need a unified vision of not just where Toyota
needs to be in 10 years’ time but what the wider Group
will look like in the future. Mobility of the future is going
to be very different from that of the present.
The Toyota Group a decade from now will require dif-
ferent strengths, different skills, and different strategies
from what we currently have. We will need partnerships
with companies that have skills that we lack to contribute
to our cars of the future. These companies will be operat-
ing in new areas with which we have less familiarity and
may become future members of the Toyota Group. It is
likely that the Group may look very different in 10 years’
time. It is very important that the chairman continues to
play a strong Groupwide role, to consider the future of
mobility and how we meet the challenges that will be
thrown up as the Toyota Group.
In the last year, we have seen the chairman focus more
on the long-term vision and goals both for Toyota and the
Group as a whole, with the president focusing much more
on the Company and execution. I think that split of
responsibilities is extremely important and working well.
Evaluating the Multi-Pathway Strategy
Oshima
When I became an outside officer in 2023, the
multi-pathway strategy advocated by Toyota
was not well known among the public, and the media
often included negative reporting claiming Toyota and
Roundtable Discussion among Outside Officers
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Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
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other Japanese automakers were behind the curve with
respect to electric vehicles. Therefore, when the topic of
electric vehicles came up at a meeting of the Board of
Directors, as a newly appointed officer I asked questions
about Toyota’s efforts in relation to electric vehicles.
After the officer in charge had explained the situation,
the chairman urged me to make comments based on an
understanding of actual situations that I had acquired by
myself rather than by accepting media reports unques-
tioningly. I thought that, while this was true, gaining an
understanding of situations would not be easy for an out-
side officer. Since then, however, Toyota has actually pro-
vided many opportunities for outside officers to study
important topics, such as the multi-pathway strategy. For
example, we visit production and development sites to
talk with chief officers and production line managers, and
we travel to the United States to get direct feedback
from local dealers.
In fact, after listening to various explanations from a
wide range of viewpoints, I have come to understand that,
given the range of issues and the diverse preferences of
customers, switching to electric vehicles at a stroke is
unrealistic. In the absence of a clear solution, the multi-
pathway strategy is the most appropriate way to steadily
reduce carbon emissions and pursue carbon neutrality.
Today, the number of people in Japan and around the
world who believe that Toyota was right to continue advo-
cating the multi-pathway strategy has risen markedly.
In the face of much criticism, Chairman Toyoda contin-
ued to insist that, as there was no clear solution, Toyota
would pursue carbon reductions through multiple routes.
As a result, many people who had criticized him gradually
came to understand and agree with his viewpoint. As an
outside officer, I have witnessed this shift in sentiment
over the last two years, which has led me to appreciate
the chairman’s foresight and unshakable strength. I am
proud of Toyota for having leaders who hold true to their
beliefs without being discouraged by criticism.
Olcott
Visiting the Company’s operations in various
countries, as we do, we see firsthand the
extremely contrasting nature of transportation infra-
structure in various parts of the world. The needs of our
customers and the conditions in which our cars are driven
vary enormously, and as a customer and shareholder, it is
easy to understand how sensible Toyota’s multi-pathway
strategy has been.
Mr. Oshima has pointed to the need to reduce carbon
emissions as an overriding aim in making ever-better cars,
and I believe that, as Toyota, we have managed to do this
successfully with the multi-pathway strategy. You’ve got
to have a range of products to offer consumers to enable
them to best meet local driving conditions.
It has been a difficult period, and certainly during the
first year I was a member of the Audit & Supervisory
Board, there was much criticism of Toyota’s strategy. But
the results of the last two years have shown that we can
both meet customer needs in diverse markets and pro-
duce cars in volumes that are leading to significant reduc-
tions in carbon emissions, The coming years, however, will
continue to throw up challenges.
I think Mr. Oshima again has already referred to the
strength of Toyota’s balance sheet. It is very unclear at
this stage which paradigm will win out and we are fortu-
nate that our financial strength will continue to enable us
to explore multiple pathways to sustainable mobility and
meet the needs of our customers.
Osada
Considering what Toyota has achieved up until
now and the scale of the Company, moving
toward a multi-pathway strategy seems to be a natural
progression. However, as Mr. Oshima mentioned earlier, in
2023 media reports on the multi-pathway strategy were
negative. I can well imagine how the questions asked by
outside officers at meetings of the Board of Directors after
reading such media articles put pressure on in-house deci-
sion-makers. The strength of Chairman Toyoda’s leadership,
demonstrated by his steely resolve amid such circum-
stances, has not changed since the era of his presidency,
and this determination is now producing results. In compa-
nies, the enthusiasm of leaders and the weight of their
words are extremely important. Partly due to the dynamism
of the executive team led by President Sato, Toyota is able
to turn a crisis into a strength. For this reason, the Company
has the potential for further evolution.
There may be pros and cons to the multi-pathway
strategy, but I think the results speak for themselves. If a
company moves, it means that someone is making deci-
sions. I am amazed at the magnitude of what the chair-
man has undertaken to date while shouldering a weighty
responsibility. Although praising someone after the
answer has become apparent is simple, we must not
forget that the process has not been easy.
Roundtable Discussion among Outside Officers
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Olcott
If I may just add one thing. The chairman often
says that one of the things he fears the most
is for Toyota to become an “ordinary company.” While
there may be some debate about what it means to be an
“ordinary company,” I can safely say that with my experi-
ence of the boards of many Japanese companies, there is
no company like Toyota. The Company is very strongly
mission-driven.
Ms. Osada has said that the multi-pathway strategy
was an obvious choice for us. And, yes, in some ways it was.
But with many of our competitors announcing the total
cessation of traditional car production in the near future in
favor of battery electric vehicles, it was not easy for us to
stick to our mission. There was, and remains, a strong con-
viction that we are on the right road. I think this strong
“backbone” will keep Toyota unique, but the chairman is
correct to be concerned: there is no room for complacency.
Oshima
Mr. Olcott’s current point is very important.
Since 2023, the chairman has said many times
that Toyota risks becoming an “ordinary company” if it
takes the wrong course of action. Everyone at Toyota,
from the chairman and president through to the frontline
employees, is serious about making ever-better cars and
about “producing happiness for all” through the manufac-
ture of quality cars. The multi-pathway strategy resulted
from serious, reality-based analysis of how to reduce
carbon emissions and save the planet.
The question is whether a company possesses the
strength to stay on a course that it believes to be correct
even when criticized. In other words, can it resist changing
course toward electric vehicles due to the pressure result-
ing from a focus on electric vehicles in the media and
among large sections of the public? Having come to real-
ize that this kind of resilience is the true meaning of the
chairman’s warning about becoming an “ordinary
company,” I feel that such steadfastness is laudable. As a
company that differs from ordinary companies in many
respects, Toyota is taking on unparalleled initiatives.
Participating on Toyota’s Board of Directors
Olcott
I’ve only had two and a half years’ experience,
but I think that makes me the longest-serving
outside member of the Audit & Supervisory Board. I have
never been at a company where non-executive directors
and members of an audit and supervisory board are
involved in so many meetings. Taking a negative view, it
means we commit way above the average amount of time
to Toyota compared with the average independent board
member of a “normal” company. Viewed positively, I feel
that the Company is very keen for us to get to know it
well, its strengths and weaknesses, so that we can discuss
the future from a position of knowledge. This leads to
improved Board discussions and better-informed
decision-making.
One example of this is the fact that we have recently
started, as a non-executive group, to take part in the
Product and Design Decision Meeting, at which senior
executives decide “go” or “no go” regarding the cars that
will be rolled out in several years’ time. On the one hand,
we have a monitoring role. The Audit & Supervisory Board
continues to monitor and minimize risks, make sure that
the three-line defense framework is in place, and ensure a
compliance culture and infrastructure is in place to reduce
the likelihood that the kinds of issues we have had—the
kinds of inspection problems that we have been dealing
with—do not occur again in the future. But, at the same
time, we feel the Company also wants us to be part of the
future-looking decision-making process, including what
the vehicle lineup will look like in 2027 and 2028 and
beyond. This is also extremely exciting—to be part of that
process, to see how the decision-making process works.
I believe that during the last two and a half years, the
nature of Board meetings has changed really quite a lot—
resource allocation of decision, including discussions
around strategic shareholdings. These meetings have
been held in an open way, more so than when I joined the
Board. Toyota is not going to change overnight. We will
not lose our long-term orientation and discussions at
Board meetings are held in a way to promote stable, sus-
tainable growth for the long term. Resources will be allo-
cated accordingly. I hope that most shareholders and our
other stakeholders will draw some comfort from this.
Oshima
I agree with Mr. Olcott, and I am grateful for
the very large number of opportunities that
Toyota provides to proactive Board members.
Over the past year and a half, I have been given a very
wide range of opportunities to participate in discussions.
For example, at least seven or eight times a month, I have
online and in-person discussions with members of the
senior management team and divisional leaders, and I
also visit sites.
In addition, I participate in discussions at the Product
and Design Decision Meeting. My understanding is that
Toyota encourages such participation for two reasons.
First, it wants outside officers to express opinions based
on their respective expertise and point out things that the
Company does not know or is not aware of. Second,
Toyota wants them to become thoroughly familiar with its
operations before offering opinions. They provide so many
opportunities, and the chief officers and other in-house
personnel readily engage with us. I do not know of any
other company that goes this far. They consistently
adhere to an approach of ensuring that outside officers
are able to express opinions in light of a good
Roundtable Discussion among Outside Officers
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—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
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understanding of the Company. I would like to utilize
these wonderful opportunities to steadily make small
contributions that help Toyota’s advance in an even better
direction.
Although Toyota is an excellent company, I believe that
this excellence is not effectively communicated to the out-
side world. Toyota employees are truly earnest and con-
tinue to work hard to make ever-better cars. However, they
are not good at communicating this properly to society at
large. In the process of learning about various aspects of
the Company in my capacity as an outside officer, I have
often found out about amazing things that Toyota is doing
and wished that I had been told about them sooner.
I believe that one of our jobs as outside officers is to
fairly convey to the outside world the kind of company
Toyota is. While it is a company with a great deal of depth,
this is not communicated well enough to the public. Such
a state of affairs is frustrating. Put another way, however, I
believe this situation is indicative of the considerable
scope that Toyota has for improvement and growth.
Osada
At the first meeting of the Board of Directors I
attended, the chairman emphasized that titles
did not matter and that we were a team of professionals
working toward the same goal, which made a strong
impression on me. At Toyota, each inside officer and out-
side officer has their own professional background and
frankly expresses opinions on agenda items in accordance
with their respective viewpoints.
When there are information gaps between outside
officers and inside officers, the chairman and other inside
officers engage with us and answer our questions very
sincerely.
Not only during meetings but also before and after the
meetings outside officers have many opportunities to
interact with inside officers. For example, we have
numerous luncheon meetings with the chairman, where
we exchange opinions on his views and the state of soci-
ety. I feel that Toyota intentionally provides us with
opportunities for communication outside of the main
meetings.
For the past six months, almost every day I have met
individuals related to Toyota to hear what they have to
say. I also have a great many chances to visit sites
together with members of the executive team.
I once missed a TPS self-study meeting due to
unavoidable circumstances. Afterwards, a member of the
executive team commented on my absence, which
pleased me because they were treating an outside officer
as one of their number.
I think Toyota is unique in that, instead of the length of
the Board meetings being the primary consideration, the
Company has established “processes” before and after the
meetings that give Board members many chances to meet
each other in a range of different places and situations.
Transitioning to a Company with Audit and
Supervisory Committee Structure
Olcott
I think this is a very positive development for
the Company. While I think the previous board
of company auditors structure served us well, in terms of
strengthening the monitoring function of the Board, I
think the transition to a company with audit and supervi-
sory committee structure is sensible. Indeed, many
Japanese companies have already made this move and it
is something that should be well-received, particularly by
shareholders.
It will enable us Audit & Supervisory Board members
to perform a much stronger audit role as Board members
and will strengthen governance. Combined with the very
strong desire of the Company, which I alluded to earlier,
outside Board members developing a strong knowledge
of the Company will, I think, lead to better discussions
and better decisions at Board meetings to promote long-
term sustainable growth.
Osada
I agree with Mr. Olcott. It is a very positive
change. Given that the initiative is aimed at
evolving with the times, it is forward looking and, as such,
typical of Toyota. In the current system, Audit &
Supervisory Board members participate in discussions at
meetings of the Board of Directors and actively state
opinions. So, in a sense, there never has been much of a
barrier between Toyota’s Audit & Supervisory Board mem-
bers and directors. Nonetheless, I think that bolstering the
relationship between them even further will strengthen
governance. Moreover, the advancement of governance is
likely to attract the attention of external stakeholders.
I believe that this change in governance will enable
outside officers to develop their knowledge of the
Company. It will also facilitate in-depth collaboration and
discussion among officers that draws on their respective
fields of professional expertise. I hope to offer advice
based on the know-how I have acquired as a result of ana-
lyzing society from various perspectives during my media
career. I am prepared and determined to perform this role
to the best of my ability.
Transforming into a Mobility Company
Oshima
International awareness of Toyota’s commit-
ment to and initiatives aimed at transforming
into a mobility company was heightened by the chair-
man’s presentation at the CES consumer technology
tradeshow held in Las Vegas in January 2025. To my
Roundtable Discussion among Outside Officers
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—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
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knowledge, there were almost no negative media reports
about the announcement.
At this point, Toyota must convey to an even wider audi-
ence that its vision is to utilize mobility to boost the happi-
ness of people everywhere and to make the world more
fun. Anticipation will increase as unprecedented means of
transportation, such as mobility in the sky enabled by Joby
aircraft (air taxi), take on tangible forms that we can actu-
ally see. I am very happy that Toyota’s concrete actions
have given me the feeling that Japan’s automotive industry
can expand into a new world of mobility. With the aim of
encouraging collaborations in which a wide variety of
people can create positive trends together, I will tell as
many external stakeholders as possible about Toyota’s
efforts to transform into a mobility company.
Osada
In Las Vegas, I saw both the rehearsal and the
final version of the chairman’s presentation. I
think the announcement was very typical of Toyota. I felt
that the straightforward manner of the progress report—
which stated that Woven City Phase 1 had been
completed—was in keeping with the Company’s identity.
The Woven City project is an extremely important part of
Toyota’s evolution into a mobility company.
Woven City has many possibilities, and the overall pic-
ture is not yet clear. On the other hand, I think it would be
less interesting if everything could be seen. Given that the
future is unknowable and takes shape gradually, the
incompleteness of Woven City makes sense to me.
It has the potential to become a location that focuses
the combined strength not only of the Toyota Group but
also of non-Group companies from around the world. What
kind of collaborations will emerge? What new insights will
Toyota gain? I am really looking forward to seeing how
such developments initiate trends that drive major social
changes! I would like to closely follow each advance.
A transportation robot is currently being used at
Toyota Memorial Hospital, which is operated by Toyota.
The Company’s inquiry into the hospital’s labor shortage
issue revealed that only about 40% of working hours are
spent on patient care, with the remaining 60% used in
transporting medicine and medical equipment. Viewed
through the lens of the Toyota Way, transportation is
waste. Nurses are spending time doing work that is not
their primary task. Toyota’s personnel have focused on
this issue, which they are trying to solve by using robots.
The Company is working to make nurses in hospitals
throughout Japan and around the world happier.
These transportation robots and Woven City are
examples of the array of initiatives that Toyota is steadily
advancing with the aim of solving social issues. Given the
large number of issues faced by society, there are numer-
ous areas where the Company can demonstrate its capa-
bilities and further its transformation into a mobility
company. I want to help realize such advances in any way
that I can. Given the Company’s track record, I am confi-
dent Toyota can reach its goal.
Olcott
I think Mr. Oshima and Ms. Osada have said
everything that needs to be said about the
theme of mobility and the chairman’s presentation at
CES. I think I would maybe like to focus on the role of the
chairman himself and my impression when I was watching
his presentation. The overriding impression is what a
unique performer he is: he is someone who can connect
with an audience in a way that very, very few business
leaders around the world can, and certainly no other
Japanese business leader that I've ever met.
But he’s not just a performer, a player, he’s also a
manager, and a visionary coach. He is someone who
can simultaneously think 10 years ahead, but also five
seconds ahead.
Watching his presentation, I was reminded that the
chairman plays a unique role transmitting Toyota’s values
and the Company’s ambitions to make the world a better
place. And I think for a new employee who is thinking
about a career, I think that kind of passion, that dream,
will make him or her attracted to Toyota. For customers, it
provides the confidence that the Company will keep pro-
ducing cars that he or she will enjoy driving, but with
lower carbon emissions. For shareholders or potential
shareholders who want to invest in a company with a
strategy for long-term, sustainable, and value-enhancing
competitiveness, the kinds of messages that the chair-
man was giving at CES were very compelling.
I would like to see the chairman focus on the things
that he is so good at, which nobody else can do. And I
think President Sato is proving to be a very effective
leader, executing, as the president should, the Board’s
vision and strategy that the chairman has played such a
key role in forging.
Roundtable Discussion among Outside Officers
Transforming into a Mobility Company
90
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Dialogues with Shareholders and Investors
Toyota creates various opportunities for holding dialogues with
shareholders and investors, including financial results briefings
and small meetings.
The Company’s primary investor relations activities in fiscal
2024, the year ended March 31, 2024, were as follows.
In addition, during the year under review, Toyota received a
written request from a major shareholder, calling for measures to
address governance issues, including Group governance, and for
the disclosure of information on such measures.
Based on our desire to engage directly with shareholders that
have long supported Toyota’s management and to create oppor-
tunities for the management team to inform shareholders of our
approach and details of initiatives, we conducted multiple dia-
logue sessions, in addition to issuing regular communications, as
outlined below.
Furthermore, the major shareholder that made the afore-
mentioned written request published a stewardship report in
which it introduced examples of Toyota’s initiatives and eval-
uated them favorably.
Date held
Details
Number of participants
Participants from Toyota
Thursday, April 11,
2024
Dialogue with institutional inves-
tors and analysts
257 (including online
participants)
CEO Koji Sato, CRO Jun Nagata, and
Accounting Group Chief Officer
Masahiro Yamamoto
April 15 to April 19,
2024
Dialogues with individual and
institutional investors
(One-on-one and small meetings)
24 companies
CEO Koji Sato, CRO Jun Nagata, and
Accounting Group Chief Officer
Masahiro Yamamoto
April 23, 2024
Governance dialogue provided by
outside officers
138 (including online
participants)
Outside Director Ikuro Sugawara,
Outside Director Emi Osono, and
Outside Audit & Supervisory Board
Member George Olcott
Note: Chief risk officer (CRO) Jun Nagata stepped down in January 2025.
Dialogue with Institutional Investors and
Analysts
We held a dialogue lasting over two hours involving numerous
investors from both Japan and overseas. President Sato began
the dialogue by summarizing the initiatives being promoted
under the new executive structure before discussing key themes
for the future. Furthermore, President Sato explained Toyota’s
approach to securing a strong management foundation and
enhancing governance, along with details of the initiatives for
achieving these goals.
He also expressed his view that it is the responsibility of the
new management team to outline a strategy for further growth
and create a road map for achieving such a strategy, based on a
strong management foundation in terms of products, businesses,
and finance. The cornerstone of this foundation is the value
system of “What Makes Us Toyota,” which was fostered by
Chairman Akio Toyoda over his 14 years as CEO. The president
also discussed during the dialogue the Company’s direction as it
enters the execution phase regarding its mission to transform into
a mobility company.
Financial results briefings
Four
Small meetings
11
Dialogues with individual shareholders and
institutional investors
Over 900
Conferences organized by securities
companies
Over 40
Message from the CSO | Roundtable Discussion among Outside Officers | Dialogues with Shareholders and Investors | Corporate Governance | Risk Management and Compliance | Message from the CFO | Capital Strategies
Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
91
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Dialogues with Shareholders and Investors
Additionally, he conveyed that securing a strong management
foundation is the top priority for ensuring long-term management
stability. President Sato emphasized the importance of fostering
a culture of “preventing issues before they occur,” similar to qual-
ity control in manufacturing, and establishing systems and struc-
tures to prevent the leakage and loss of sensitive information,
both of which are crucial for ensuring that employees properly
and reliably carry out their tasks. Next, the president expressed
how seriously Toyota takes the issues that occurred regarding the
model certification application processes at certain Group com-
panies, providing explanations on future efforts to prevent recur-
rences by these Group companies and the kind of role Toyota will
play in such efforts.
Regarding efforts to strengthen Group governance, he
explained the measures formulated immediately after the discov-
ery of said issues at Group companies. These measures were the
result of intensive discussions held by the Governance Risk
Subcommittee, in which outside directors also participate.
Through such comprehensive initiatives, Toyota will enhance the
effectiveness of its governance while fulfilling its responsibilities
from a Groupwide perspective.
In his closing remarks, President Sato outlined the impor-
tance of staying true to “What Makes Us Toyota,” which is in
essence promoting management focused on products, while
closely catering to the needs of local customers. He also touched
on the essential nature of working together with various partners
to create cars that bring smiles to people’s faces, guided by the
slogan of “let’s change the future of cars!” as the Company accel-
erates efforts to transform into a mobility company. He con-
cluded by stating, “I believe the future is something we create
together. Thanks to the support of our business partners and
stakeholders, starting with our shareholders and other investors,
we have been able to constantly take on various challenges with
a view to the future. For this reason, we will continue to proac-
tively disclose information to you all regarding our aims and what
we are doing to achieve those aims. We will hold dialogues with
our investors on an ongoing basis going forward and would like to
ask for your continued support as we do so.”
Upon finishing his remarks, President Koji Sato, CRO Jun
Nagata, and Accounting Group Chief Officer Masahiro Yamamoto
fielded questions from investors, thereby deepening the dialogue.
Dialogues with Individual and Institutional
Investors (One-on-One and Small Meetings)
Following the dialogue, we conducted seven one-on-one and
small meetings with 24 shareholders and institutional investors.
At these meetings, we answered questions about our efforts to
prevent the recurrence of issues related to the model certifica-
tion application processes of certain Group companies, the
Toyota Group’s management direction and strategies, and the
Company’s approach to information disclosure.
Governance Dialogue Provided by Outside
Officers
We held a dialogue on our governance initiatives from the stand-
point of our outside officers. Outside Director Ikuro Sugawara,
Outside Director Emi Osono, and Audit & Supervisory Board
Member George Olcott gave the dialogue, engaging with numer-
ous institutional investors and analysts from Japan and overseas
for over two hours.
During the dialogue, questions were asked regarding strategic
shareholdings, the model certification issues, and other matters.
Furthermore, with regard to Toyota’s transformation into a mobil-
ity company, there were questions on how to manage and control
risks in new fields as the Company expands its business into soft-
ware domains. In response to these various concerns, the three
outside officers provided explanations on their individual
approaches and efforts from their perspectives.
Message from the CSO | Roundtable Discussion among Outside Officers | Dialogues with Shareholders and Investors | Corporate Governance | Risk Management and Compliance | Message from the CFO | Capital Strategies
Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
92
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Corporate Governance
Fundamental Approach
Toyota regards sustainable growth and the stable, long-term enhancement of corporate value as important management priorities.
Key to addressing these priorities is building good relationships with all stakeholders—including shareholders, customers, business partners, local communities, and
employees—and consistently providing products that satisfy customer needs. To those ends, Toyota constantly seeks to enhance corporate governance.
Corporate Governance Report
Securities Report
Corporate Governance Structure
Accounting auditor
Appointment/Dismissal
Coordination
Coordination
Coordination
Appointment/Dismissal
Auditing
Reporting
Oversight
Submission/
Reporting
Dialogue
Submission/
Reporting
Submission/
Reporting
Proposal
Proposal
Auditing
Auditing
Reporting
Submission/
Reporting
Board of Directors
(Members include outside members of the Board
of Directors)
Operational execution
Executive Appointment Meeting
(Majority of members are outside directors)
Sustainability Meeting
(Inside and outside members of the Board of
Directors and full-time and outside Audit &
Supervisory Board members)
Disclosure Committee
Labor–Management Council, Joint Labor
Management Round Table Conference
Executive Compensation Meeting
(Majority of members are outside directors)
Shareholders’ Meeting
Audit & Supervisory Board
(Half of members are outside
Audit & Supervisory Board
members)
Accounting and internal
control audits
Internal Audit Department
Operating officers
Operating officer meetings
Product and Design Decision Meeting
(Members of the Board of Directors and
Audit & Supervisory Board members)
Governance Risk Compliance Meeting
(Inside and outside members of the Board of
Directors and full-time and outside Audit &
Supervisory Board members)
Operational execution
Appointment/
Dismissal
Operational Execution and Supervision
Corporate Governance Structure
Toyota has adopted the board of company auditors structure described in the Companies Act of Japan. Under this structure, inside executives who have long engaged
in and have deep knowledge of manufacturing and outside executives who are capable of providing advice for the creation of new value from a broad perspective can
participate in well-balanced decision-making at Board of Directors’ meetings. This structure is ideal given that the basis of Toyota’s corporate value is contributing to
society through monozukuri (manufacturing).
With respect to its framework for operational execution, Toyota has been focused on making ever-better cars since the 2008 global financial crisis, aiming to pro-
vide a full lineup of high-quality, affordably priced products in the right place at the right time while offering products and services suited to customers in each country
and region that it serves. To this end, the Company introduced a region-based management approach in 2011, a business unit system in 2013, and an in-house company
system in 2016. Later, in 2017, Toyota further clarified the division of duties between members of the Board of Directors and operating officers, with the former responsi-
ble for decision-making and management oversight and the latter responsible for operational execution. This move was meant to further accelerate the implementation
of decisions.
Furthermore, in 2018, Toyota brought forward the timing of executive changes from April to January in order to expedite management oversight and better unite
workplaces. In addition, Toyota transformed its organizational structure into one that enables decision-making that closely reflects the needs of both customers and
frontline organizations through measures such as the revision of corporate strategy functions and the restructuring of the Japan Sales Business Group into an organiza-
tion based on regions rather than sales channels.
In 2019, Toyota made executive and organizational changes as follows: 1. executives are composed of only senior managing officers and people of higher rank and
2. a new classification, called “senior professional/senior management” (kanbushoku), grouped and replaced the titles or ranks of managing officers, executive general
managers, (sub-executive managerial level) senior grade 1 and senior grade 2 managers, and grand masters. The goals of these changes were to further the acceleration
of management and the development of human resources.
With an eye to appointing the right people to the right positions, those in the senior professional/senior management category hold a wide range of posts, from
chief officer, deputy chief officer, plant general manager, and senior general manager to group manager. People can be assigned to these positions regardless of age or
length of employment. This approach toward position is meant to allow individuals in the senior professional/senior management category to address management
issues as they arise and to thereby enhance human resource development through a focus on a genchi genbutsu (on-site, hands-on experience) basis.
In April 2020, Toyota consolidated the positions of executive vice president and operating officer into the position of operating officer, and in July 2020, it clarified
the responsibilities of operating officers.
We redefined the role of operating officer to be members who, together with the president, have cross-functional oversight of the entire Company. Furthermore,
in-house company presidents, regional CEOs, and chief officers have been positioned as on-site leaders of business implementation elements, resulting in them being
consolidated into the rank of senior professional/senior management and assigned additional authority.
The roles of operating officers and senior professionals/senior management are determined where and as needed, and the individuals assigned to these positions
are changed in accordance with the challenges to be addressed and the course to be taken. This approach is designed to give the Company greater flexibility in appoint-
ing the right people to the right positions.
However, Toyota recognizes that the rapidly changing operating environment is creating an increasing need for such executives to fulfill management roles
(related to people, goods, and money) alongside the president. Therefore, in April 2022, Toyota again reorganized the roles of operating officers and reestablished the
position of executive vice president, defining it as an operating officer who is focused on business from a management perspective.
In April 2023, based on the theme of inheritance and evolution, Toyota revised its description of operating officers, defining them as a team that practices product-
centered (making ever-better cars) management and region-centered (best in town) management and selected executive vice presidents who have abundant knowledge
and experience in terms of both products and regions.
In accordance with its basic policy of appointing the right people to the right positions, Toyota has proceeded to reform its corporate governance structure in a
flexible and ongoing manner. We will continue to implement such reforms going forward with the aim of developing a structure that allows for management to be con-
ducted from a viewpoint that is optimal for a global company.
Changes in Governance Structure
As of June 30, 2024
–2010
2011–2015
2016–2020
2021–
Number of members of the Board of Directors
27
2011–2016: 11–16 (temporary increase due to the introduction of outside
members of the Board of Directors)
June 2023–: 10
Of whom, outside members of the Board of
Directors
June 2023–: 4
Numbers of
executives
Executive vice presidents
2011–2020: 4–7
April 2023–: 2
Senior managing officers /
Managing officers
64
2011–2018: 42–49
April 2022: Position
reestablished
Operating officers
(Excluding president and executive vice presidents)
June 2023–: 5
Advisors / Senior advisors
2011–2017: 55–68
2018: 9 (due to organizational changes)
July 2020: 0
Number of Audit & Supervisory Board members
7
2014–: 6
Of whom, outside Audit & Supervisory Board
members
4
2014–: 3
Committees
Executive Appointment Meeting
2017: Outside members of
the Board of Directors
accounting for half
2019: Outside members of the Board of
Directors accounting for a majority
Executive Compensation Meeting
Sustainability-related body
2007–2014: CSR Committee
2014–2017: Corporate Governance Meeting
2018: Sustainability Meeting
April 2011
• Reduced the number of members of the Board of Directors from 27 to
11 (currently 10)
• Reduced decision-making layers (discontinued the positions of execu-
tives responsible for organizations and introduced a two-tiered arrange-
ment of executive vice presidents and chief officers)
• Flexibly assigned senior managing officers or managing officers to chief
officer posts (abolished the position of senior managing director)
• Established the role of executive general manager
• Stationed, in principle, regional chief officers in their respective regions
April 2013
• Established business units
• Reorganized regional groups
• Appointed outside members of the Board of Directors
April 2015
• Changed the roles of officers
• Enhanced diversity (appointed non-Japanese executives and female
executives)
April 2016
• Implemented an in-house company system, shifted from functional to
product-based focus
April 2017
• Clarified the responsibilities of members of the Board of Directors as
decision-making and management oversight and of operating officers
as operational execution
• Reduced the number of members of the Board of Directors (including
outside members of the Board of Directors) to 9 (June 2017)
October 2017
• Changed the advisor system and the senior advisor system
January 2018
• Increased the number of appointments of people with high-level exper-
tise from both inside and outside the Company (individuals from Group
companies, external individuals, people with technical backgrounds, etc.)
• Shifted to an arrangement under which executive vice presidents, in addi-
tion to supporting the president, personally lead frontline operations as
in-house company presidents and organizational group chief officers
• Established a fellow system to secure people with high levels of specialist
expertise and expand the breadth of executive human resource
development
January 2019
• Created a new classification of “senior professional/senior manage-
ment” encompassing managing officers, executive general managers,
(sub-executive managerial level) senior grade 1 and senior grade 2 man-
agers, and grand masters
January 2020
• Discontinued use of the field general manager rank, shifting to senior
general manager and fellow
April 2020
• Integrated the positions of executive vice president and operating offi-
cer into the position of operating officer
July 2020
• Further clarified the roles of operating officers
April 2022
• Reorganized the roles of operating officers and reestablished the posi-
tion of executive vice president to create a position for focusing on busi-
ness from a management perspective alongside the president
April 2023
• Revised the description of operating officers, defining them as a team
that practices product-centered (ever-better cars) management and
region-centered (best in town) management based on the theme of
inheritance and evolution
Message from the CSO | Roundtable Discussion among Outside Officers | Dialogues with Shareholders and Investors | Corporate Governance | Risk Management and Compliance | Message from the CFO | Capital Strategies
Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
93
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Corporate Governance
Members of the Board of Directors and Audit & Supervisory Board Members
Board of Directors and Related Structures
Members of the Board of Directors are selected based on comprehensive consideration of their responsibilities to ensure sustainable growth of Toyota and to
enhance its corporate value over the medium to long term.
Toyota believes that it is critical to appoint individuals who are capable of practicing product-centered and region-centered management and contributing
to decision-making aimed at sustainable growth in accordance with the Toyoda Principles, which describe the Company’s founding philosophy. Moreover, these
individuals should be able to play significant roles in transforming Toyota into a mobility company in the areas of electrification, intelligence, diversification, and
the formation of partnerships. They must also possess the ability to contribute to the resolution of social issues, such as those pertaining to climate change.
In order to make important business decisions and supervise management appropriately, the Board of Directors should consist of diverse members with a
balance of abilities. The knowledge, experience, and abilities of members of the Board of Directors are consolidated and disclosed in a skills matrix.
The Executive Appointment Meeting, which comprises a majority of outside members of the Board of Directors, makes recommendations to the Board of
Directors regarding individual candidates for positions as members of the Board of Directors.
Furthermore, four outside members of the Board of Directors have been appointed in order to adequately reflect the opinions of outside stakeholders in
the management decision-making process. All of the outside members of the Board of Directors have been registered as independent directors with the relevant
financial instrument exchanges.
In the appointment of outside members of the Board of Directors designated as independent directors, the Company considers both the requirements for
outside directors stipulated in the Companies Act of Japan and the independence standards put forth by the relevant financial instrument exchanges.
Outside members of the Board of Directors provide advice in Toyota’s management decision-making process from a standpoint independent of operational
execution based on their broad experience and insight.
The following measures are implemented to better incorporate the insight of outside members of the Board of Directors and outside Audit & Supervisory
Board members.
1. Review of the criteria for the submission of proposals to the Board of Directors as needed to regulate the inflow of proposals submitted in order to secure suffi-
cient time to discuss each proposal
2. Provision of explanations of proposals in advance to facilitate better understanding of their background
3. Provision of regular opportunities, outside Board of Directors’ meetings, for two-way communication between members of the executive team with outside mem-
bers of the Board of Directors and outside Audit & Supervisory Board members on important management issues and medium- to long-term issues
To facilitate active discussions at Board of Directors’ meetings, Toyota reduced the number of meeting participants (members of the Board of Directors and
Audit & Supervisory Board members) from 34 in 2010 to 15 in 2020. As a result, opportunities for each participant to speak at Board of Directors’ meetings have
increased, and outside members of the Board of Directors and outside Audit & Supervisory Board members are able to voice opinions on almost all proposals.
Members of the Board of Directors (As of June 2024)
Name
Sex
Age
Years
of
Service
Outside/Independent
Current Position / Responsibility at Toyota
Rate of Attendance
at Board of Directors’
Meetings
(Number of Meetings
Attended)*
Committee Membership
Responsibility
Executive
Appointment
Meeting
Executive
Compensation
Meeting
Akio Toyoda
Male
68
24
Chairman of the Board of
Directors
94% (15/16)
Shigeru Hayakawa
Male
70
9
Chairperson
Chairperson
Chief Privacy Officer
100% (16/16)
Koji Sato
Male
54
1
Chief Executive Officer
100% (13/13)
Hiroki Nakajima
Male
62
1
Chief Technology Officer
100% (13/13)
Yoichi Miyazaki
Male
60
1
Member
Member
Chief Financial Officer
Chief Competitive Officer
100% (13/13)
Simon Humphries
Male
57
1
Chief Branding Officer
100% (13/13)
Ikuro Sugawara
Male
67
6
Outside,
independent
Member
Member
100% (16/16)
Sir Philip Craven
Male
73
6
Outside,
independent
Member
Member
94% (15/16)
Masahiko Oshima
Male
63
1
Outside,
independent
Member
Member
100% (13/13)
Emi Osono
Female
58
1
Outside,
independent
Member
Member
100% (13/13)
* Figures represent attendance at Board of Directors’ meetings in fiscal 2024.
Analysis and Evaluation of the Effectiveness of the Board of Directors
In order to improve the effectiveness of the Board of Directors, Toyota conducts an analysis and evaluation of the Board of Directors every year. Details of the
most recent analysis and evaluation are as follows..
1. Analysis and Evaluation
A survey assessing the membership, meeting proceedings, and supervisory function efficacy of the Board of Directors was carried out. Views and proposals
regarding the background and causes of issues identified by the survey, as well as regarding the improvement of such issues, were compiled and reported to the
Board of Directors and then discussed at a meeting of the Board of Directors.
Method of evaluation: Self-evaluation through questionnaires
Subject of evaluation: Members of the Board of Directors and Audit & Supervisory Board members
Implementation period: March–April 2024
Matters to be evaluated: 1. Membership and meeting proceedings of the Board of Directors
2. Management and business strategies
3. Corporate ethics and risk management
4. Communication with shareholders and other stakeholders
2. Summary of Findings
In fiscal 2024, a new management team was instituted with the addition of a number of new outside members of the Board of Directors and outside Audit &
Supervisory Board members. To invigorate discussions at Board of Directors’ meetings, the Company has been offering more opportunities for communication
between members of the executive team and outside members of the Board of Directors and outside Audit & Supervisory Board members, providing outside
members of the Board of Directors and outside Audit & Supervisory Board members with on-site tours of facilities and information, and enhancing advance
explanations of Board of Directors’ meeting proposals.
Against this backdrop, it was determined that improvements had been achieved with regard to advance explanations and provision of information to
outside members of the Board of Directors and outside Audit & Supervisory Board members. Conversely, time allocation, consideration of business strategies,
and management with an awareness of sustainability, areas that were identified as issues in fiscal 2023, were once again identified as representing issues in
fiscal 2024.
In order to further improve the effectiveness of the Board of Directors, Toyota will secure more opportunities for the Board of Directors to discuss impor-
tant management strategy topics and promote the appropriate selection of topics to be proposed. At the same time, Toyota will work to make further improve-
ments through such measures as enhancing opportunities for dialogue and exchange with the executive team to provide more information to outside members
of the Board of Directors and outside Audit & Supervisory Board members, thereby facilitating more effective and vigorous discussions.
Audit & Supervisory Board System
Toyota has adopted the board of corporate auditors system. The six Audit & Supervisory Board members, including three outside Audit & Supervisory Board mem-
bers, play a key role in Toyota’s corporate governance by undertaking audits in line with the audit policies and plans determined by the Audit & Supervisory Board.
In order to appropriately audit Toyota as it transforms into a mobility company with the aim of sustainable global growth, the Audit & Supervisory Board is
composed of full-time Audit & Supervisory Board members, all of whom possess deep knowledge of internal Company matters, and outside Audit & Supervisory
Board members, all of whom have a high level of expertise and knowledge. Toyota takes steps to ensure that each Audit & Supervisory Board member is able to
exert audit authority independently.
In appointing Audit & Supervisory Board members, Toyota believes it is necessary to select individuals who have broad experience and insight in their
respective fields of expertise and who can advise management from a fair and impartial perspective and are capable of auditing operational execution. Toyota’s
Executive Appointment Meeting discusses recommendations to the Audit & Supervisory Board regarding the appointment or dismissal of Audit & Supervisory
Board members.
Toyota has appointed three outside Audit & Supervisory Board members, all of whom are registered as independent auditors with the relevant financial
instrument exchanges.
When appointing outside Audit & Supervisory Board members, Toyota considers the requirements set out in the Companies Act of Japan as well as the
independence standards established by the relevant financial instrument exchanges.
Message from the CSO | Roundtable Discussion among Outside Officers | Dialogues with Shareholders and Investors | Corporate Governance | Risk Management and Compliance | Message from the CFO | Capital Strategies
Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
94
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Corporate Governance
Training for Members of the Board of Directors and Audit & Supervisory Board Members
Outside members of the Board of Directors and outside Audit & Supervisory Board members are expected to understand and practice Toyota’s spirit of making ever-bet-
ter cars and genchi genbutsu (on-site, hands-on experience) and to contribute to the making of decisions aimed at sustainable growth. For this reason, Toyota offers a
variety of opportunities to provide these individuals with the information necessary to perform this expected role.
Also, we provide opportunities for facilitating deeper understanding outside of meetings of the Board of Directors, such as pre-meeting explanations on proposals
submitted to the Board of Directors and two-way communication with executives on important management issues and medium- to long-term issues.
Executive Compensation
The amount of executive compensation, the calculation methods used, and the process for determining compensation methods are as follows.
Policy and Process for Determining Compensation
Toyota believes that it is critical to appoint individuals who are capable of practicing product-centered and region-centered management and contributing to decision-
making aimed at sustainable growth in accordance with the Toyoda Principles, which describe the Company’s founding philosophy. Moreover, these individuals should be
able to play significant roles in transforming Toyota into a mobility company in the areas of electrification, intelligence, diversification, and the formation of partnerships.
They must also possess the ability to contribute to the resolution of social issues, such as those pertaining to climate change.
Toyota’s executive compensation system is an important means to promote various initiatives and is determined based on the following policy.
The system should encourage members of the Board of Directors to work to improve the medium- to long-term corporate value of Toyota.
The system should support compensation levels that will allow Toyota to secure and retain talented personnel.
The system should motivate members of the Board of Directors to practice management based on the same perspective as shareholders and with a stronger sense of
responsibility as corporate managers.
The Board of Directors decides by resolution the policy for determining compensation for and other payments issued to each member of the Board of Directors.
Compensation amounts and methods are determined in a manner that effectively links them with corporate performance while reflecting the job responsibilities and
performance of each individual.
Compensation for outside members of the Board of Directors and outside Audit & Supervisory Board members consists only of fixed compensation. By providing
compensation in a manner that is not readily impacted by business performance, this system helps ensure independence from management.
The amounts of compensation and other payments issued to each member of the Board of Directors and the compensation system are decided by the Board of
Directors and the Executive Compensation Meeting, which comprises a majority of outside members of the Board of Directors, to ensure the independence of decisions.
The Board of Directors delegates to the Executive Compensation Meeting authority for determining amounts of compensation and other payments issued to each
member of the Board of Directors, the executive compensation system, the total amount of compensation for a given fiscal year, and the amount of compensation issued
to each member of the Board of Directors.
The Executive Compensation Meeting reviews the executive compensation system and provides advice to the Board of Directors thereon. This body also deter-
mines the amount of compensation issued to each member of the Board of Directors in accordance with the policy for determining compensation and other payments
issued to each member of the Board of Directors established by the Board of Directors. This decision is made while taking into account such factors as corporate perfor-
mance as well as individual job responsibilities and performance.
The Board of Directors has judged that such decisions made by the Executive Compensation Meeting are in line with the policy for determining compensation and
other payments issued to each member of the Board of Directors.
Compensation for Audit & Supervisory Board members is determined by the Audit & Supervisory Board within the scope decided via resolution of the Ordinary
General Shareholders’ Meeting.
To decide the compensation for fiscal 2024, the Executive Compensation Meeting met in June, September, October, and December 2023 and in February, March,
and April 2024.
Also, preparatory meetings attended solely by outside directors were arranged four times—in July 2023 and in January, February, and April 2024—as forums for
discussions in preparation discussions by the Executive Compensation Meeting.
Compensation for members of the Board of Directors was decided with the agreement of all members of the Executive Compensation Meeting.
Major Matters Discussed by the Executive Compensation Meeting
Revision of compensation levels based on position and responsibilities
Revision of compensation composition based on position and responsibilities
Revision of benchmarks and evaluation of results for fiscal 2024
Determination of individual compensation amounts
Method of Determining Performance-Based Compensation (Bonuses, Share-Based
Compensation)
1. Members of the Board of Directors with Japanese Citizenship (Excluding Outside Members of the
Board of Directors)
Toyota sets the total amount of compensation that each member of the Board of Directors receives annually at an appropriate level commensurate with position and
responsibilities by referencing benchmarks incorporating both Japanese and global companies and based on the degree of each individual’s role and other factors.
Short-term incentives and long-term incentives are set at levels so that they respectively account for around 20% and 50% of total annual compensation.
Accordingly, performance-based compensation, which represents the combination of short-term incentives and long-term incentives, accounts for around 70% of total
annual compensation. Short-term incentives are provided in the form of cash compensation based on consolidated operating income and the rate of fluctuation of
Toyota’s market capitalization.* Long-term incentives are provided in the form of share compensation based on multiple financial indicators, a non-financial indicator, and
individual performance evaluations.
* Calculated by multiplying the closing price of Toyota’s common stock on the Tokyo Stock Exchange by the number of shares issued after deducting
treasury stock
Composition of Compensation
Compensation Type
Percentage of Total Compensation
Compensation Method
Policy
Fixed compensation
Approx. 30%
Cash compensation
Percentage of total compensation represented by long-
term incentives to be increased to reflect the degree of an
individual’s role and responsibilities
Short-term incentives
Approx. 20%
Cash compensation
Long-term incentives
Approx. 50%
Share compensation
Policies Regarding Performance Evaluation Indicators
Short-Term
Incentives
Financial indicators
(1) Consolidated operating income (single year)
Indicator for evaluating Toyota’s efforts based on short-term business performance
(2) Fluctuation of Toyota’s market capitalization
Corporate value indicator for shareholders and investors to evaluate Toyota’s efforts
Long-Term
Incentives
Financial indicators
(3) Consolidated operating income (multiple years)
Indicator for evaluating Toyota’s medium- to long-term efforts based on business
performance
(4) Total shareholder return
Corporate value indicator for shareholders and investors to evaluate Toyota’s medium-
to long-term efforts
(5) Return on equity
Non-financial indicator
(6) Progress of efforts to address sustainability issues
Indicator for evaluating Toyota’s medium- to long-term efforts based on the degree of
corporate value enhancement
Individual performance
evaluations*
Qualitative evaluations of performance of each member of the Board of Directors
* Performed taking into account factors such as ESG and other initiatives based on the Toyota Philosophy as well as the level of trust in the individual
from their peers and the individual’s contribution to the development of human resources
Method and Base Value for Performance Evaluation Indicators and Evaluation Result in Fiscal 2024
Short-Term Incentives
Evaluation
Weight
Evaluation Method
Base Value
Evaluation
Result
(1) Consolidated operating income
(single year)
70%
Evaluation of the degree of attainment of consolidated operating income in the given
fiscal year using average consolidated operating income over past 10 fiscal years as a
base value (set in 2023)
¥2.5 trillion
191%
(2) Fluctuation of Toyota’s market
capitalization
30%
Comparative evaluation of the fluctuation of Toyota’s market capitalization for the given
fiscal year (average from January through March), using the market capitalization of Toyota
and TOPIX for the prior fiscal year (average from January through March) as base values
Toyota: ¥25.5 trillion
TOPIX: ¥1,990.68
Long-Term Incentives
Evaluation
Weight
Evaluation Method
Base Value
Evaluation
Result
(3) Consolidated operating income
(multiple years)
35%
Evaluation of the degree of attainment of consolidated operating income for the past
three years, including the given fiscal year, using average consolidated operating income
over past 10 fiscal years as a base value (set in 2023)
¥2.5 trillion
139%
(4) Total shareholder return
17.5%
Comparative evaluation of Toyota’s total shareholder return, using the rate of change cal-
culated by dividing the sum of the stock price of Toyota on the last day of the given fiscal
year and the aggregate amount of dividend per share during the period from the fiscal year
that is four years before the given fiscal year through the given fiscal year by the stock
price on the last day of the fiscal year that is five years before the given fiscal year and the
rate of change in TOPIX Net Total Return calculated in the same manner as base values
TOPIX: 196.2%
(5) Return on equity
17.5%
Comparative evaluation of Toyota’s return on equity for the given fiscal year, using the
levels recommended by the Ito Review as base values
8%
(6) Progress of efforts to resolve sus-
tainability issues
30%
Evaluation of the degree of contribution of business activities during the given fiscal year in
accordance with the six key issues (materiality)
Six key issues
(materiality)
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Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Corporate Governance
Policies for Individual Performance Evaluations
When determining total annual compensation, the base amount for long-term incentives is subject to adjustment based on individual performance evaluations.
Individual performance evaluations take into account various factors, such as ESG and other initiatives based on the Toyota Philosophy and initiatives for enhanc-
ing medium- to long-term corporate value, as well as the level of trust from the individual’s peers and the individual’s contribution to the development of human
resources.
The range of adjustments based on individual performance evaluations is set commensurate with position and responsibilities within the range of 50% above or
below 40% of the base amount for long-term incentives. The amount of long-term incentives issued to each member of the Board of Directors is calculated based on
individual performance evaluation results.
Method of Determining Performance-Based Compensation (Bonuses, Share-Based Compensation) for
Resigning Members of the Board of Directors
The total amount of compensation received by resigning members of the Board of Directors is determined based on consolidated operating income, fluctuation in
Toyota’s market capitalization, and individual performance evaluations.
The outstanding amount after deducting fixed monthly compensation payments for total annual compensation constitutes performance-based compensation.
Toyota sets the total amount of compensation that each resigning member of the Board of Directors receives annually at an appropriate level commensurate with
each individual’s position and responsibilities by referencing benchmarks incorporating both Japanese and global companies and based on the degree of each individual’s
role and other factors.
Method of Determining Total Annual Compensation for Resigning Members of the Board of Directors
Total annual compensation for resigning members of the Board of Directors is determined according to a formula based on the benchmark results for executive
compensation.
Total annual compensation levels determined based on consolidated operating income and fluctuation in Toyota’s market capitalization are then adjusted based
on individual performance evaluations.
Individual performance evaluations take into account various factors, such as ESG and other initiatives based on the Toyota Philosophy, as well as the level of trust
from the individual’s peers and the individual’s contribution to the development of human resources.
Rates of adjustment are set in accordance with the role and responsibilities of the individual within the range of 50% above or below the total annual compensa-
tion amount, and these rates are used to determine total annual compensation for resigning members of the Board of Directors based on individual performance evalua-
tion results.
2. Members of the Board of Directors with Non-Japanese Citizenship (Excluding Outside Members of
the Board of Directors)
Fixed compensation and performance-based compensation for members of the Board of Directors with non-Japanese citizenship are determined based on the compen-
sation levels and structures designed to allow Toyota to secure and retain talented personnel.
Total annual compensation levels as well as the ratios of fixed compensation and performance-based compensation included in total compensation are decided
taking into account each individual’s job responsibilities and the compensation standards of the entity for which the individual has worked previously (application deter-
mined individually).
Performance-based compensation for members of the Board of Directors with non-Japanese citizenship consists of short-term incentives and long-term incen-
tives as is the case with members of the Board of Directors with Japanese citizenship (excluding outside members of the Board of Directors). The amounts of short-term
incentives and long-term incentives are adjusted in the same manner by reflecting performance evaluation indicators for short-term incentives and long-term incentives
set for members of the Board of Directors with Japanese citizenship (excluding outside members of the Board of Directors) and individual performance evaluation
results.
Performance-Based Compensation and Method of Determining Thereof for Resigning Members of the
Board of Directors with Non-Japanese Citizenship
Performance-based compensation is determined based on consolidated operating income, fluctuation in Toyota’s market capitalization, and individual performance
evaluations, with consideration paid to the job responsibilities and home country of each resigning member of the Board of Directors with non-Japanese citizenship
(application determined individually). The approach used with regard to each item is the same as that applied to resigning members of the Board of Directors with
Japanese citizenship (excluding outside members of the Board of Directors).
In addition, there are cases in which the Company provides income tax compensation for certain members of the Board of Directors in light of the difference in
income tax rates with those of their home country.
Share-Based Compensation System
The Board of Directors determines amounts of share-based compensation using the maximum values for share-based compensation set at the 115th and 118th Ordinary
General Shareholders’ Meetings held on June 13, 2019, and June 15, 2022, respectively (a maximum of ¥4.0 billion per year, with the total number of common shares of
Toyota to be allotted to members of the Board of Directors, excluding outside members of the Board of Directors, capped at 4 million).
For more details, please refer to page 114 of the Securities Report for fiscal 2024 (in Japanese only).
Compensation by Executive Category, Number of Applicable Executives, and Compensation by Type
Executive Category
Number of Applicable Executives
Compensation by Type (Millions of yen)
Total Compensation
(Millions of Yen)
Fixed Compensation
Performance-Based Compensation
Bonuses
Share-Based
Compensation
Members of the Board of Directors
(Of whom, outside members of the
Board of Directors)
15
(5)
844
(178)
985
1,862
(518,000 shares)
3,692
(178)
Audit & Supervisory Board members
(Of whom, outside Audit &
Supervisory Board members)
8
(4)
263
(57)
—
—
263
(57)
Notes: 1. Monthly compensation and bonuses constitute cash compensation.
2. Performance-based compensation is granted in the amount calculated by multiplying the closing price of common stock on the date immedi-
ately before the date of the allotment resolution by the number of shares stated above, pursuant to the resolution by the Board of Directors at
a meeting held on May 8, 2024.
3. The above amounts of compensation include ¥68 million paid to resigned Member of the Board of Directors James Kuffner as performance-
based compensation for fiscal 2022.
Names and Details of Individuals Who Have Received Total Consolidated Compensation of ¥100 Million or More
Name (Executive Category)
Company
Total Consolidated Compensation by type (Millions of Yen)
Total Consolidated
Compensation
(Millions of Yen)
Fixed
Compensation
Performance-Based Compensation
Retirement
Benefits
Bonuses
Share-Based Compensation
Akio Toyoda
(Member of the Board of Directors)
Toyota Motor Corporation
289
324
1,009 (280,000 shares)
—
1,622
Shigeru Hayakawa
(Member of the Board of Directors)
Toyota Motor Corporation
77
133
179 (50,000 shares)
—
389
Koji Sato
(Member of the Board of Directors)*1
Toyota Motor Corporation
87
187
349 (97,000 shares)
—
623
Hiroki Nakajima
(Member of the Board of Directors)*1
Toyota Motor Corporation
48
110
137 (38,000 shares)
—
295
Yoichi Miyazaki
(Member of the Board of Directors)*1
Toyota Motor Corporation
50
110
137 (38,000 shares)
—
297
Simon Humphries
(Member of the Board of Directors)*1
Toyota Motor Corporation
36
55
51 (14,000 shares)
—
143
James Kuffner
(Member of the Board of Directors)*2
Toyota Motor Corporation
27
101
—
—
531
Woven by Toyota, Inc. (consolidated subsidiary)
133
271
—
—
*1 Figures for members of the Board of Directors Koji Sato, Hiroki Nakajima, Yoichi Miyazaki, and Simon Humphries, who were newly appointed to their
positions at the Ordinary General Shareholders’ Meeting held on June 14, 2023, represent compensation paid for nine months.
*2 Figures for Member of the Board of Directors James Kuffner, who resigned from his position following the Ordinary General Shareholders’ Meeting
held on June 14, 2023, represent compensation paid for three months. Fixed compensation paid to Member of the Board of Directors James Kuffner
by consolidated subsidiary Woven by Toyota, Inc., comprises the amounts of fixed compensation paid every three months and fixed compensation paid
every 12 months.
In addition to the above fixed compensation, Toyota Motor Corporation and consolidated subsidiary Woven by Toyota, Inc., paid compensation of
¥44 million to Member of the Board of Directors James Kuffner to compensate for differences in income tax rates between Japan and his home
country.
The figure for performance-based compensation paid to Member of the Board of Directors James Kuffner includes performance-based compensa-
tion of ¥68 million for fiscal 2022.
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Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Risk Management and Compliance
Risk Management
Fundamental Approach
The automotive industry is undergoing tremendous change in terms of conditions and values, as seen in trends
toward carbon neutrality and connected, autonomous, shared, and electric (CASE) technologies. Amid this
change, Toyota is working to reinforce its risk management structures in order to support its ability to con-
stantly tackle new challenges and advance kaizen (continuous improvement) and to respond to the resulting
increases in uncertainty. The Company has appointed a chief risk officer (CRO), who is charged with global risk
management and working to prevent and mitigate the impact of risks that could arise in business activities
from a global perspective.
Beneath the CRO are regional CEOs, who are responsible for overseeing risk management in their respec-
tive regions.
At accounting, procurement, and other head office departments, function-specific risk management tasks
are assigned to the chief officers and risk managers of individual divisions. At in-house companies, meanwhile,
product-specific risk management tasks are assigned to the company presidents and to the risk managers of
individual divisions. This structure enables coordination and cooperation between regional head offices and
sections.
Risk Management Framework
Risks are identified, assessed, aggregated, addressed, and monitored on a regular basis in accordance with the
Toyota Global Risk Management Standard (TGRS), a Companywide risk management framework based on the
standards of ISO and the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
The TGRS is used to identify significant risks and to assemble cross-organizational task forces, as appro-
priate, to promote risk management, while the Governance, Risk, and Compliance Subcommittee, which is
chaired by the CRO, and other organizations confirm the progress of such measures.
Important matters are discussed by the Governance Risk Compliance Meeting and reported to the Board
of Directors as appropriate to facilitate the advancement of business activities.
Business Continuity Management
Toyota formulates business continuity plans (BCPs) to ensure that business operations can be continued and
quickly restored if halted by major disasters, such as earthquakes and floods, by preparing for potential
impacts on business sites and employees, disruptions in the supply chain, and interruptions in the delivery of
essential goods.
The Company works to constantly improve the practical effectiveness of its BCPs through the drills and
other aspects of the plan–do–check–act (PDCA) cycle.
These activities constitute our approach to business continuity management, which is promoted
through coordination among employees and their families; Group companies, suppliers, and dealers; and the
Company itself.
Through this process of BCP formulation and revision, we aim to train employees who are adept at
responding to emergency situations and thereby ensure that our organizations, workplaces, and individuals are
resilient to crisis at all times.
Compliance
Fundamental Approach
The Toyota Code of Conduct, established in 1998, outlines the basic frame of mind that all Toyota personnel
should adopt. It serves to guide us in fulfilling our mission of “producing happiness for all” based on the values,
methods, and corporate philosophy (Toyota Philosophy and Guiding Principles) that all Toyota members have
shaped through years of diligent effort and passed down from generation to generation as they have contrib-
uted to the sustainable growth of society and the planet.
The code was amended in October 2023 with expanded provisions related to such matters as bribery and
corruption prevention and human rights. We distribute the code to all employees of Toyota, including those of
consolidated subsidiaries, with the aim of raising awareness and facilitating training.
Under the leadership of the chief compliance officer and the deputy chief compliance officer, Toyota con-
ducts compliance activities to ensure that all employees act responsibly and maintain strict compliance
based on the Toyota Code of Conduct.
Toyota Code of Conduct
Bribery and Corruption Prevention Measures
Toyota has enacted the Toyota Global Anti-Bribery and Anti-Corruption Policy as a shared policy for its global
operations to ensure rigorous action toward the eradication of bribery and corruption.
Furthermore, we have implemented the Anti-Bribery Guidelines for internal divisions and business part-
ners. These guidelines inform efforts to prevent bribery and corruption.
Toyota Global Anti-Bribery and Anti-Corruption Policy
Anti-Bribery Guidelines
Taxation
Since its founding, Toyota has aspired to enrich people’s lives by manufacturing automobiles and to enrich
local economies by creating employment opportunities and paying taxes as a corporate presence firmly
rooted in local communities.
Toyota views the payment of taxes as both an obligation and the most basic form of social contribution to
the communities in which it operates. Accordingly, we seek to generate stable earnings and thereby pay appro-
priate taxes through exhaustive efforts to utilize the Toyota Production System (TPS) and reduce costs.
Our Tax Policy
Speak Up Hotline
Toyota’s Speak Up Hotline facilitates quick and appropriate responses to workplace- and work-related con-
cerns, complaints, or questions that employees or other relevant parties may have. We promote awareness of
the hotline using the Company intranet and various other media. Consultations can be submitted via a law
firm, Company website, telephone, or other means.
The factuality of consultations is investigated with care to ensure that hotline users who wish to remain
anonymous cannot be identified. If the investigation indicates an issue, prompt response measures are taken.
(Hotline consultations in fiscal 2024: 884)
In addition, we offer multiple avenues for consultation at domestic and overseas subsidiaries operated
by Toyota Motor Corporation, including the Global Speak Up Hotline, All Toyota Speak Up hotline, and Toyota
Consolidated Helpline.
Toyota Code of Conduct (Speak Up)
Toyota Speak Up Policy
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97
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
15%
26%
11%
14%
18%
15%
Japan
North
America
Europe
Asia
China
Other
Global Full Lineup of Vehicles
Retail Vehicle Sales in FY2024
By region
Strength of 100 Million Units
Owned by Our Customers
HEV Business Supporting
the Multi-Pathway Strategy
Profit Structure
(FY2020–FY2023 cumulative
operating income)
Retail Vehicle Sales by Powertrain in
FY2023
Operating Income by Powertrain in
FY2023
Value
chain
New
vehicles
Alignment of Investment Decisions with Actual Demand
Volume of Net Liquid Assets*1
(Trillions of yen)
0
5
10
15
243
24
23
22
21
8.1
8.3
9.0
12.6
13.1
FY2021
FY2022
FY2023
FY2024
2024/9
ICE
70%
HEVs
28%
PHEVs/FCEVs/BEVs
ICE
HEVs
Investments in
new business
domains*4
BEVs,
batteries,
software, etc.
2.5
FY2020
FY2021
2.4
FY2022
2.5
FY2023
2.8
FY2024
3.2
*1. Net liquid assets = Cash and cash equivalents, time deposits, public and corporate bonds, and
investment in monetary trust funds, excluding in each case those related to financial services,
less interest-bearing debt (not including lease liabilities), excluding that related to financial
services
*2. R&D activity-related expenses incurred during the reporting period
*3. Excluding vehicles under operating leases and right-of-use assets
*4. R&D expenses and capital expenditures related to battery electric vehicles, batteries,
hydrogen business, software business, etc.
Realizing a Cycle of Growing
Together with Our
Stakeholders
Message from the CFO
Yoichi Miyazaki, Executive Vice President
Chief Financial Officer
Chief Competitive Officer
President, Business Planning & Operation
Characteristics of Toyota’s Business Foundation
Toyota’s business foundation has three major characteristics
that are deeply rooted in making ever-better cars.
The first is our full lineup of vehicles worldwide and our
balanced regional representation.
Second is our global customer base, with ownership of
more than 100 million units.
And the third is our hybrid options, which provide both
CO2 emissions reductions and profitability.
These characteristics help stabilize our earnings power,
making it less susceptible to the effects of fluctuations in
economic and market environments around the world.
Another important aspect of our business foundation is
the careful timing of our investment decisions.
Our comprehensive assessment of investments in BEVs
and batteries encompasses the energy situation and infra-
structure in each country and region, technological advance-
ments, and changes in the actual needs of customers.
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R&D Expenses*2 and Capital Expenditures*3
(Trillions of yen)
98
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Message from the CFO
Earnings Capacity Generating ¥5 Trillion
Please allow me to reflect on our recent past and in particular the chal-
lenging operating environment we have faced. Factors such as the
impact of the COVID-19 pandemic and semiconductor shortages
placed downward pressure on profits. In response to this environment,
we sought to reform our workstyles and create new mechanisms. For
example, we introduced J-SLIM in Japan and launched an AI-based
supply and demand system.
As a result, in the fiscal year ended March 31, 2024, we experienced
calm business conditions unlike what we have seen over the past few
years. During the year, the results of our steady and earnest efforts to
strengthen the profit structure were largely evident.
Our aims for the fiscal year ending March 31, 2025, are to maintain
the profit structure of the previous year, which we were able to build
with the support of our stakeholders, and to enhance the attractiveness
of the automotive industry as a whole and grow together with all our
stakeholders. By doing so, we will accelerate our investment in the
future with determination.
The ¥5.3 trillion in operating income for the fiscal year ended March
31, 2024, included the effect of curtailing selling expenses in response
to the favorable market environment as well as the impact of asking our
employees and suppliers to temporarily make an extra effort while we
addressed a large order backlog.
Looking ahead to the fiscal year ending March 31, 2025, we aim to
maintain a profit structure of ¥5 trillion, excluding these temporary
effects, while accelerating investments in human resources and our
transformation into a mobility company.
Reinforcement of Our Operational Foundation
I would now like to explain the efforts we have been making to reinforce
our operational foundation since 2024. Our goal has been to shorten
Companywide lead times. To achieve this, we need to eliminate waste,
end the redoing of work, and make it possible for all employees to
achieve success in their work.
Specifically, amid a shortage of human resources, we have been
working Companywide to create environments in which all employees
can achieve success and to improve what we call the “rate of value-
added work,” which is the ratio of work that is truly meaningful and that
increases added value.
Strengthening of Our Work Foundation: Shorten Lead Times
Companywide
1. Create environments open to all workers
Assist handling of heavy parts
To respond swiftly and flexibly to our diverse global customers with a full lineup and multi-pathway
strategy, we will enhance our business foundation through the participation of all employees.
18 kg part carried
manually
Machines reduce
workload
(2) Stratify gap
factors
Gap
(1) Comparison of output
levels and actual results
2. Improve the rate of value-added work
Identify impediments and
pursue solutions
Standard Work
Combination
Table
Discuss counter-
Discuss counter-
measures in
measures in
an intensive,
an intensive,
face-to-face
face-to-face
meeting
meeting
Factor 1
Factor 2
(3) Promoting measures and
creating opportunities
for teaching and
learning through
collaborative
activities
There are two main goals we aim to accomplish.
The first is to increase how quickly we can respond to environmental
changes in an age in which it is hard to predict the future. The second is
to improve our fundamental capabilities that will enable us to carry on
into the future Toyota’s mission of producing happiness for all, even as
advancements in vehicle functionality make it more difficult to pursue
full-lineup, multi-pathway automobile manufacturing.
As a specific example, we are advancing the “AREA 35” project,
which aims to improve our rate of value-added work through efforts
that integrate development, production, and sales. To meet the diverse
needs of our customers around the world, we are preparing numerous
specifications for our vehicles. However, certain specifications do not
translate to strong sales.
By improving our accuracy in forecasting customer needs, we are
working to optimize the types of specifications and parts we offer. We
are also striving to expand the space for finished vehicle production and
raise development efficiency. Although such activities have just begun,
primarily focusing on domestic plants, we have managed to realize a
production capacity of 80,000 units per year and generate surplus
development capacity equivalent to three vehicle model redesign
projects.
Toyota has 54 assembly plants worldwide. Going forward, we will
expand our efforts to optimized specifications and parts globally to
create further growth drivers.
Expand Value Chain Operating Income
Trend in Value Chain Operating
Income
Parts and accessories
Other
(Billions of yen)
+330.0
+150.0
+170.0
+140.0
FY2025 (forecast)
FY2024
FY2023
FY2022
FY2021
We are also making efforts to expand operating income in the value
chain. Backed by our dealers who have maintained touchpoints with
customers, which has helped increase the number of units retained by
ownership, we have grown operating income in the value chain to above
the ¥100.0 billion level since 2020.
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No. of Units Retained by Duration of Ownership (Major Markets)
1st year
2nd year
3rd year
4th year
5th year
7th year
6th year
8th year
0
2023
Maintenance package
+
Existing value chain
Parts, supplies, services, used cars,
insurance, finance, etc.
New value chain: Hardware and software
upgrades (SDV), etc.
SAWA: Extended warranty
(Service activate warranty)
• Through our value chain business that draws on the ownership of 100 million
units, we aim to stabilize and expand our earnings base.
We plan to both grow
our existing businesses as well as add new areas such as SDVs
Expand Value Chain Operating Income
Manufacturer warranty period*
Extended warranty service period
* In principle, 3 years and 150,000 km. Depending on the region
2020
99
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Message from the CFO
Our steady efforts such as expanding the variety of maintenance pack-
ages and introducing extended warranties have produced solid results.
Our European business has led the way with such efforts, and looking
ahead we will seek to expand them globally.
Also, in tandem with the increase in Software Defined Vehicles
(SDVs), we will strengthen our hardware and software upgrade services,
aiming to stabilize and expand our earnings in new business domains.
• Strengthening of the business foundation based on making ever-better cars
• Expansion of business domains aimed at transformation into a mobility
company
New peripheral
businesses
BEV and hydrogen
businesses
Value chain
expansion
Making ever-better cars
Making ever-better cars
Maximization
Maximization
of sales
of sales
efforts
efforts
TPS
Cost
Cost
reductions
reductions
Expanding business domains
• Promoting highly competitive BEV
and hydrogen businesses
• Creating business based on software
and energy
Strengthening the business foundation
• Making ever-better cars
• Expanding sales of HEVs and PHEVs
in emerging markets
• Continuously strengthening the
financial structure through TPS and
cost reduction
• Maintaining and expanding customer
touchpoints worldwide
We will continue striving to deliver ever-better cars that meet the
needs of customers in each country and region, cultivate new customers
in emerging markets, and further strengthen our unique and solid busi-
ness foundation.
We also aim to expand and strengthen our investments in future-
oriented areas such as BEVs, hydrogen, software, and energy while
broadening touchpoints with customers and partners beyond the auto-
motive industry as part of an integrated approach. Through these
efforts, we seek to drive the expansion of our business domains toward
becoming a mobility company and to transform the Group’s business
structure.
Future-Oriented Investment
The future does not come all at once but is made up of the steady
accumulation of the efforts we make each day.
To leave as many options as possible for the future, we are advanc-
ing forward-looking investment in technological capabilities in various
domains. At the same time, we plan to actively sow the seeds for the
future by combining our manufacturing techniques with digital and inno-
vative technologies.
As a future-oriented investment, in the fiscal year ending March 31,
2025, we intend to invest a total of more than ¥2 trillion in human
resources and growth areas. Our investment in human resources
includes our suppliers and dealers, as we aim to enhance the attractive-
ness of the automotive industry. Growth investments entail investments
in areas such as electrification and software and are geared toward our
transformation into a mobility company. In terms of electrification, our
efforts to shorten lead times, which we have been working on as part of
efforts to reinforce our operational foundation, also enhance the flexi-
bility of our production readiness and efforts to review projects for elec-
trified vehicles. This flexibility allows us to adapt more effectively to
changes in actual demand and make last-minute investment decisions.
Due to the fact that our strategies leave all options available, including
HEVs, we are able to maximize the benefits of this flexibility, which in
turn strengthens our competitive edge.
Since it is the customer who ultimately chooses the product, we are
making keen preparations to build a system that can flexibly accommo-
date our customers’ choices.
The internal creation of battery technologies will be crucial to pro-
moting the widespread adoption of our electrified vehicles. From that
perspective, we are promoting in-house production of all types of bat-
teries, including ternary lithium, lithium iron phosphate (LFP), and all-
solid-state batteries. By doing so, we will be able to develop batteries
optimized for the kinds of vehicles we wish to create. At the same time,
an important key factor to battery development and production is rais-
ing production efficiency per battery type. We are working to ensure
production flexibility such as through common usage of batteries for
BEVs and PHEVs so that we can respond to customer needs regardless
of what products they choose.
We will ultimately need to internalize production technology for
aptly mass-producing different types of batteries in the same plant and
buildings. For this reason, we made battery manufacturer Primearth EV
Energy Co., Ltd., our wholly owned subsidiary, and it began operations as
TOYOTA BATTERY Co., Ltd., in October 2024. In this way, we have made
steady progress in strengthening our operational foundation in terms of
our battery strategy.
No. of EV Unit Sales in 2026
Production Readiness Responding to Actual Demand
Flexibly revise plans
in response to actual demand
The customer chooses the products.
Shortening lead times Companywide allows
for last-minute investment decisions.
BEVs
PHEVs
HEVs
In-House Development of All
Types of Batteries
Standardizing batteries for BEVs and PHEVs and establishing
a flexible supply system
PHEVs
BEVs
Integrated Development of
Vehicles and Batteries
Developing batteries in a timely manner
tailored to the vehicles we wish to
create
Ternary
LFP
All-
solid-
state
Internalization of Technology and Establishment of a Flexible Supply
Structure
Message from the CSO | Roundtable Discussion among Outside Officers | Dialogues with Shareholders and Investors | Corporate Governance | Risk Management and Compliance | Message from the CFO | Capital Strategies
Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
Technological capabilities
(Shifting of resources to advanced fields)
Future of mobility overflowing
with diverse options
Manufacturing techniques
(Integration of TPS/on-site capabilities
and digital/innovative technologies)
Digital
On-site
improvements
100
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Shareholder Returns
The Company deems meeting the expectations of its shareholders as
an important element of its management policy, and its basic policy for
shareholder returns is to reward long-term shareholders. Specifically,
the Company strives to ensure stable and continuous dividend pay-
ments. The Company also flexibly repurchases its common stock while
comprehensively considering such factors as the price of common
stock. Moving forward, the Company will utilize stock repurchases to
meet the demand for the sale of shares, as necessary.
Furthermore, in the financial results briefing for November 2024, we
announced our forecast for a year-end dividend to further reassure our share-
holders of our commitment to stable and continuous dividend payments.
*1 Excluding dividends on First Series Molde AA Class Shares
*2 For illustrative purposes only; not a forecast
Capital Strategy
Our transformation into a mobility company requires a robust balance sheet.
While selling strategic shareholdings that have declined in signifi-
cance for us and promoting a “Home & Away” strategy, we have been
building alliances to accelerate our transformation.
By continuing to reduce our strategic shareholdings, reviewing intra-
Group cross-shareholdings, and utilizing treasury stock and cash on
hand, we aim to build a capital formation optimized for a mobility com-
pany and thereby maintain and further enhance our competitiveness.
Striving to Realize a Cycle of Growing Together
To realize a cycle of growth with our stakeholders, we will continue to
strengthen our earnings power, accelerate future-oriented investment,
leverage our accumulated assets, and build a capital formation opti-
mized for a mobility company to gain a competitive advantage.
*1 Earnings power = Automotive business operating cash flows + R&D expenses (R&D activity-
related expenditures incurred during the reporting period)
*2 Investment and shareholder returns = R&D expenses (R&D activity-related expenditures
incurred during the reporting period) + Capital expenditures + Dividends + Share repurchases
*3 For illustrative purposes only. These are not forecasts of the amounts in question for or as of
the relevant periods or dates, or breakdowns thereof.
*4 R&D expenses and capital expenditures for businesses related to internal combustion engine
vehicles, etc.
*5 R&D expenses and capital expenditures for battery electric vehicles, batteries, hydrogen busi-
ness, software business, etc.
We find ourselves in an age in which it is hard to predict the future,
and this is precisely why we hope to work together with our stakehold-
ers, with their support and encouragement, to create the future of
mobility. To this end, we will draw on the results we have thus far gener-
ated together with our customers, shareholders, suppliers, employees,
and local communities—the many stakeholders to whom we thank as
the source of our growth.
We must take action if we are to carve out a future for ourselves.
We would like to ask for your continued support and hope that you look
forward in anticipation to the future of Toyota.
Suppliers
Suppliers
Stable and continuous
wage increases
Purchasing
Employees
Employees
Business foundation
Asia and emerging
markets, HEVs,
TPS and cost
improvements,
value chain
Investing in the
future
Carbon neutrality
and electrification,
software, mobility
Customers
Customers
Optimal mobility
Shareholders
Shareholders
Shareholder
Shareholder
returns
returns
Tax
payments
Local
Local
communities
communities
Growing Together with Our Stakeholders Going Forward
• Further strengthening earnings power and accelerating investment for
sustainable growth
• Leveraging accumulated assets to gain a competitive advantage
Investment
for new
business
domains*5
Message from the CSO | Roundtable Discussion among Outside Officers | Dialogues with Shareholders and Investors | Corporate Governance | Risk Management and Compliance | Message from the CFO | Capital Strategies
Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
FY2023
FY2022
FY2021
FY2020
FY2019
610.8
199.9
671.0
249.9
718.2
435.6
816.9
299.9
1,011.7
1,099.9
• Policy of implementing stable and continuous dividend increases
• Shifting of focus to dividends to reward long-term shareholders
Total dividends*1
Repurchases of common stock
Future*2
(Billions of yen)
Capital Strategy
Earnings power
Investment and
shareholder returns
Financial base
Note: Excluding financial services
Total:
Approx. ¥16.6 trillion
Average:
Approx. ¥4.2 trillion
Earnings
power
Earnings
power
Shareholder
returns
Investment
Investment
for existing
for existing
business
business
domains*
domains*4
Investment
Investment
for existing
for existing
business
business
domains*
domains*4
Investment for
new business
domains*5
Shareholder
returns
Treasury
stock
Strategic
shareholdings,
etc.
Net liquid
assets
Net liquid
assets
Strategic share-
holdings, etc.
Treasury
stock
Capital
strategy
Conducting
M&As and
building
alliances
“Home &
Away”
Ensuring
business
continuity
FY2020–
FY2023*1
FY2020–
FY2023*2
FY2023
FY2024–
FY2027*3
FY2024–
FY2027*3
FY2027*3
Use*3
Total:
Approx. ¥14.2 trillion
Average:
Approx. ¥3.5 trillion
• Building a formation optimized for a mobility company
to maintain and improve competitiveness
• Reducing strategic shareholdings, reviewing
intra-Group cross-shareholdings, and utilizing
treasury stock and cash on hand
OEM
CASE
出資※
Asset
sales
Investments
FY2021
FY2023
FY2024
FY2019
FY2018
¥500 billion
¥500 billion
FY2022
Future
FY2020
Asset replacement
• Reducing strategic
shareholdings
• Reviewing cross-
shareholdings within
the Group
Note: Total amounts of share acquisitions and sales during respective periods
Building alliances
“Home & Away”
• In addition to asset
replacements, we will
use treasury stock
and cash on hand.
Message from the CFO
101
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Capital Strategies
Three Pillars
The three pillars of Toyota’s financial strategies are stability, growth,
and efficiency. By maintaining sufficient stability while pursuing
growth and efficiency over the medium to long term, we aim to build a
robust financial base to support sustainable growth.
1 Stability: Securing of On-Hand Funds
Based on its experiences with financial crises and the Great East
Japan Earthquake, Toyota seeks to secure a sufficient level of on-hand
funds, which has been defined as an amount able to cover both six
months of fixed costs in the automotive business and six months of
refinancing requirements in the financial services business. With this
level of liquidity, we aim to ensure business continuity under any oper-
ating conditions.
Sufficient on-hand funds are essential to maintaining a full lineup
of vehicles in all regions of operation and retaining the ability to
respond to all options. In this manner, liquidity is a vital part of the
foundation supporting the creation of corporate value.
2 Growth: Proactive Up-front Investments
As the automotive industry approaches a once-in-a-century turning
point, Toyota is advancing technological innovation to further its
transformation into a mobility company. The Company invests around
¥1 trillion in research and development each year to fund projects for
enhancing efficiency in existing business areas. Such proactive up-
front investments are carried out to strategically increase the portion
of R&D expenses allocated to cutting-edge fields.
3 Efficiency: Improvement of Capital Efficiency
Through cost reductions and thorough application of the Toyota
Production System (TPS), we are reinforcing our earnings structures
and securing funds for use in conducting up-front investments in
advanced technologies.
For both R&D expenses and capital expenditures, we assign priori-
ties to individual projects and track the progress of these projects
while advancing measures to improve efficiency. Examples of such
measures include streamlining development in existing business fields,
making equipment more compact, shortening processes, and facilitat-
ing faster responses to changes in production volumes.
Furthermore, we are pursuing ongoing increases in return on equity
through share buybacks while also ramping up investment manage-
ment by regularly evaluating the rationality of cross-shareholdings
in terms of the needs of our business strategies and economic utility.
In these ways, we strive to enhance capital efficiency.
Shareholder Returns
Toyota has positioned the enhancement of shareholder returns as an
important element of its management policy and has adopted a basic
policy to issue shareholder returns in a way that rewards long-term
holding of the Company’s shares. Specifically, Toyota endeavors to
issue stable and continuous payment of dividends. With regard to
share buybacks, we will continue to flexibly repurchase shares based
on consideration of factors such as our share price. Repurchased
shares will be utilized as necessary to respond to requests for the
sale of the Company’s stock.
For fiscal 2024, Toyota issued annual dividend payments of ¥75
per share, which comprised an interim dividend of ¥30 per share and a
year-end dividend of ¥45 per share and represented a year-on-year
increase of ¥15 per share.
In addition, the Company conducted share buybacks totaling
¥99.9 billion midway through fiscal 2024 and set an upper limit for
share buybacks of ¥1 trillion at the end of the fiscal year. In May 2024,
520 million shares of treasury stock (with a market value of approxi-
mately ¥2 trillion) were canceled for the purpose of mitigating the
risk of dilution of the Company’s share price due to future treasury
stock cancellations.
Retained earnings are primarily used to fund forward-looking
growth investments in environmental technologies for contributing to
carbon neutrality and safety technologies for the safety and security
of customers as well as for the benefit of employees, business part-
ners, local communities, and other stakeholders. Through this
approach, we seek to ensure that Toyota can win out against intense
competition and transform into a mobility company.
Cross-Shareholdings
1 Policies for Cross-Shareholdings
Toyota’s policy is to refrain from cross-shareholdings except for in
cases where such holdings are deemed to be meaningful. Cross-
shareholdings may be deemed meaningful in cases where the holdings
are anticipated to contribute to the improvement of corporate value
from a medium- to long-term perspective. Such judgments are made
based on comprehensive consideration of factors including benefits in
terms of business strategies; the establishment, maintenance, and
strengthening of relationships with business partners; and contribution
to and cooperation in the development of society in the automotive
business, where cooperative relationships are imperative in processes
spanning from development, procurement, and production to distribu-
tion and sales.
2 Assessment of the Rationale of
Cross-Shareholdings
Toyota engages in constructive dialogue with cross-shareholding
counterparties as deemed appropriate for the purpose of stimulating
ongoing growth and improvements in corporate value. These dialogues
provide opportunities to share and address management issues.
Moreover, the Board of Directors conducts annual assessments of the
rationale of individual cross-shareholdings. In these assessments, the
meaningfulness of holdings is reevaluated in light of changes in the
operating environment and detailed examinations are performed to
determine whether the benefits and risks from such holdings are com-
mensurate with the cost of capital. Based on these assessments, the
Board of Directors judges whether or not holdings should be
maintained.
If it is determined that a shareholding is no longer meaningful or
the meaning of a shareholding has been diluted due to changes in the
operating environment or other reasons, Toyota will proceed with the
sale of the associated shares once it has adequately explained its rea-
sons for doing so to the counterparty in question.
As of September 30, 2024, the number of cross-shareholdings has
been reduced to 126 (including 34 listed companies) from 189 (includ-
ing 80 listed companies) as of March 31, 2018.
Cross-Shareholdings
FY2020
FY2021
FY2022
FY2023
FY2024
2024/9
Number of
holdings
Listed
65
54
53
49
40
34
Unlisted
109
103
95
92
84
85
Deemed holdings
54
41
31
24
17
7
Total
228
198
179
165
141
126
Book value
(Billions of yen)
Listed
1,781.0
2,472.8
3,032.4
3,094.9
3,508.7
2,827.0
Unlisted
294.9
299.8
90.2
115.1
124.0
124.4
Deemed holdings
206.4
234.4
195.5
127.0
145.0
33.3
Total
2,282.3
3,007.1
3,318.0
3,337.0
3,777.7
2,984.8
Percentage of consolidated net assets
10.7%
12.4%
12.2%
11.4%
10.7%
8.5%
Holdings of Listed Shares among Cross-Shareholdings
FY2020
FY2021
FY2022
FY2023
FY2024
Cash dividends per share*1 (Yen)
44
48
52
60
75
Total dividend payments (Billions of yen)
610.8
671.0
718.2
816.9
1,011.7
Payout ratio*2 (%)
30.2
29.8
25.3
33.4
20.4
Share buybacks*3 (Billions of yen)
199.9
249.9
435.6
299.9
1,099.9
(Upper limit)
*1 Figures show dividends per common share on a post-stock split basis (values for after the five-
for-one stock split of shares of common stock conducted on October 1, 2021).
*2 Payout ratio is the ratio of (i) the amount of cash dividends per share to (ii) net income attrib-
utable to Toyota Motor Corporation per common share.
*3 Figures exclude dividends paid for First Series Model AA Class Shares.
Number of Holdings and Book Value
Change in Book Value
Book value (billions of yen)
Number of holdings
(Billions of yen)
FY2024 2024/9
FY2022
FY2020
2024/9
2024/3
350.8
350.8
Acquisition
Acquisition
Sale*
(61.0)
(6 holdings)
282.7
282.7
(34 holdings)
(34 holdings)
Market
price
fluctuation
(7.3)
* Based on sales price
Acquisition
0.2
178.1
178.1
65
54
53
49
40
40
34
247.2
247.2
303.2
303.2
309.4
309.4
350.8
350.8
282.7
282.7
Message from the CSO | Roundtable Discussion among Outside Officers | Dialogues with Shareholders and Investors | Corporate Governance | Risk Management and Compliance | Message from the CFO | Capital Strategies
Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
102
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Environmental Initiatives (Disclosure Based on TCFD Recommendations)
In April 2019, Toyota endorsed and signed up to the recommendations of the Financial Stability Board’s Task
Force on Climate-related Financial Disclosures (TCFD). Based on these recommendations, the Company ana-
lyzes the climate-related risks and opportunities it faces and conducts appropriate information disclosure.
Governance
a Frameworks for Oversight of Climate-Related Risks and Opportunities by the Board of
Directors
Toyota addresses climate-related issues at Board of Directors’ meetings to ensure effective strategy formula-
tion and implementation in line with the latest social developments. The Board of Directors deliberates and
oversees related strategy, major action plans, and business plans, and important climate-related matters are
included in agendas for meetings of the Board of Directors.
The Board of Directors monitors progress toward qualitative and quantitative targets for addressing cli-
mate-related issues. As part of such monitoring, the Board of Directors examines the potential financial
impact of factors with the possibility of becoming climate-related issues, including risks and opportunities
related to products, such as fuel efficiency and emissions regulations, as well as risks and opportunities
related to low-carbon technology development. These governance mechanisms are used to formulate long-
term strategies, including Toyota Environmental Challenge 2050, and in formulating and revising medium- to
long-term targets and action plans.
Examples of decisions made by the Board of Directors in 2023 include the following.
A resolution was adopted at a Board of Directors’ meeting to invest in securing the required supply of bat-
teries for electric vehicles by 2030 to work toward carbon neutrality. Also in 2023, Board of Directors’
approval was granted to engage in research and development on powertrains (evolution of combustion tech-
nology) as part of a multi-pathway strategy for contributing to the realization of a carbon-neutral society.
Toyota to Invest Up to ¥730 Billion in Japan/U.S. Battery Production
b Role of Management in Assessing and Managing Climate-Related Risks and Opportunities
The Board of Directors is Toyota’s ultimate decision-making and oversight body for addressing climate-related
issues. The committees indicated in the table below are the primary bodies for assessing and managing cli-
mate-related risks and opportunities.
Strategy
Toyota’s Strategies (Fundamental Approach of the Multi-Pathway Strategy)
The core idea of Toyota’s multi-pathway strategy is to offer a diverse range of mobility options that align
with the future of energy and the needs and expectations of local communities and customers. The strategy’s
basic premise is that we need to move away from fossil fuels from the perspectives of the global environment
and sustainability. Furthermore, over the medium to long term, renewable energy sources will continue to pro-
liferate, with electricity and hydrogen emerging as the primary energy sources sustaining society. In the short
term, however, it is critical to acknowledge global realities and implement changes in practical ways that
maintain energy security. This is precisely why we are committed to contributing to the goal of carbon neutral-
ity through a diverse lineup of mobility options that can utilize electricity derived from renewable energy,
hydrogen, synthetic fuels, biofuels, and other energy sources in anticipation of a future of electricity and
hydrogen.
Existing infrastructure and assets must be used to reduce CO2 emissions. Energy policies, such as those
related to renewable energy and charging infrastructure, and industrial policies, including those pertaining to
purchase subsidies, supplier support, and battery recycling systems, are indispensable in the goal of achieving
carbon neutrality in the automotive industry. Responses must also be developed to address uncertainties
related to national energy policies, industrial policies, and customer choice. Toyota’s multi-pathway strategy,
which offers varied mobility options, is designed to allow us to respond to uncertainty with any one of the
options, irrespective of social conditions. As various industries are involved, Toyota is actively engaged in build-
ing partnerships to accelerate the development of an environment in which electricity and hydrogen can be
used to protect the global environment.
Toyota verifies the resilience of the multi-pathway strategy through scenario analysis.
Scenario Analysis Overview
Toyota endorsed and signed up to the TCFD recommendations in April 2019 and joined the TCFD Consortium,
a platform for promoting collective action by companies, financial institutions, and other entities in Japan.
Toyota acknowledges climate-related risks and opportunities as key management concerns, uses the TCFD
recommendations to identify risks and opportunities, and verifies the resilience of its strategies through sce-
nario analysis. In 2022, Toyota launched a project involving relevant organizations to conduct an analysis using
scenarios looking at two temperature projections—1.5ºC and 4ºC—based on the TCFD framework. We con-
ducted assessments to identify climate-related risks and opportunities and evaluated financial impacts to
confirm the effectiveness of Toyota’s responses.
The scenarios used are as follows.
1.5ºC scenario (Net Zero Emissions by 2050 Scenario (NZE) and Announced Pledges Scenario (APS) of the
International Energy Agency (IEA), etc.)
4ºC scenario (SSP5-8.5)
Diverse Options (Multi-Pathway Solutions)
Electricity
Biofuel / E-fuel
BEVs
· Next-generation BEVs to
be launched in 2026
· Toyota sales volume
expected to reach 3.5 mil-
lion units per year by 2030
PHEVs
· Positioned as practical
BEVs
· Development of PHEVs
with EV driving range of
200 km or more
HEVs
· Effective means to reduce
CO2 emissions immediately
Biofuel / E-fuel
· Contributions to CO2 emis-
sions reduction from
owned vehicles*1
*1 New and previously sold
vehicles
H2
· Development of hydrogen
engines utilizing internal
combustion engine
technologies
FCEVs
· Mass production and com-
mercialization of vehicles
mainly used for commer-
cial purposes
· Annual number of Toyota
vehicles equipped with
fuel cells anticipated to
total 100,000 by 2030
Hydrogen
H2
Engine
HEV
BEV
PHEV
Bodies for Addressing Climate-Related Issues
Sustainability Meeting
Sustainability Subcommittee
CN Strategy Subcommittee
Governance Risk Subcommittee
Chairperson or facilitator
President
Deputy chief officer, General
Administration & Human Resources
Group
President, CN (Carbon Neutral)
Engineering Development Center
Deputy chief officer, General
Administration & Human Resources
Group
DCRO/DCCO
Members
Executive vice presidents (2), outside
members of the Board of Directors
(4), outside Audit & Supervisory
Board members (1), CPO, CSO,
CHRO, others (5)
Outside members of the Board of
Directors (1), CRO/CCO, CSO, CISO,
CHRO, others (7)
Executive vice presidents (2), CRO/
CCO, CPO, CSO, CISO, full-time
Audit & Supervisory Board members
(1), others (11)
Executive vice presidents (2), outside
members of the Board of Directors
(1), outside Audit & Supervisory
Board members (1), CRO/CCO, CSO,
CISO, CHRO, full-time Audit &
Supervisory Board members (1),
others (5)
Number of times held in
FY2024
4
3
3
6
Timing of reports to the
Board of Directors
When an important matter arises
When an important matter arises
When an important matter arises
When an important matter arises
Duties
• Contribution to increases in corpo-
rate value by deliberating, making
decisions, and promoting activities
in relation to important sustainabil-
ity-related issues
• Monitoring of internal and external
developments and reporting and
deliberation on important manage-
ment matters related to enhancing
medium- to long-term competitive-
ness and responding to risks associ-
ated with environmental, social, and
governance issues and SDGs
• Cultivation of shared understanding
regarding important global trends
pertaining to carbon neutrality and
environmental issues
• Reporting and deliberation on tar-
gets, key performance indicators,
and other important management
provisions related to above duties
• Deliberation, decision-making, and
promotion of activities in relation to
important matters pertaining to
governance, internal control, corpo-
rate ethics, compliance, incidents,
and risk management in business
and product strategies
CPO: Chief production officer
CHRO: Chief human resources officer
CCO: Chief compliance officer
DCRO: Deputy chief risk officer
CSO: Chief sustainability officer
CRO: Chief risk officer
CISO: Chief information & security officer
DCCO: Deputy chief compliance officer
Message from the CSO | Roundtable Discussion among Outside Officers | Dialogues with Shareholders and Investors | Corporate Governance | Risk Management and Compliance | Message from the CFO | Capital Strategies
Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
103
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Environmental Initiatives (Disclosure Based on TCFD Recommendations)
Businesses subject to analysis include the automotive businesses and supply chains of Toyota Motor
Corporation and its consolidated subsidiaries as well as Toyota Group production sites in Japan and overseas.
The risk periods used are as shown in the following table.
Period
Reason
Long term
Until 2050
Target year for Toyota Environmental Challenge
2050
Medium term
Until 2030
2030 Milestone in line with SBTi criteria*1
Short term
Present day to 2025
7th Toyota Environmental Action Plan
a Climate-Related Risks and Opportunities the Organization Has Identified over the Short,
Medium, and Long Terms
Toyota strives to identify the various risks and opportunities that will arise from environmental issues, takes
action while continuously confirming the validity of strategies, such as Toyota Environmental Challenge 2050,
and works to enhance its competitiveness. The Company needs to take measures to respond to changes asso-
ciated with climate change that may have various impacts on its business fields. In accordance with this
understanding, we have identified significant climate-related risks in line with the Toyota Global Risk
Management Standard (TGRS) risk management process and based on the degree of impact and stakehold-
ers’ interest. The progress of climate change may pose risks to Toyota’s business; however, we believe that we
can achieve enhanced competitiveness and gain access to new business opportunities if we can respond
appropriately.
Significant Climate-Related Risks Identified from TGRS Risk Assessments (Risks (1), (3), (4), (5), and (9) Are
Particularly Significant.)
Risk Type
Risk Item
Risks
Impacts
Transition Risks
Policy / Regulations
(1) Tightening of regu-
lations for fuel effi-
ciency and ZEVs*1
• Penalties or fines and suspension of production or sales for failure to
comply with fuel efficiency, CO2, or ZEV regulations
• Decrease in sales due to ZEV mandates and market shift to ZEVs
• Payment of fines and credits for failure to comply with
regulations
• Rising product development costs to expand Toyota’s
ZEV lineup
(2) Introduction and
expansion of
carbon pricing
• Increases in procurement and production costs due to introduction
and expansion of carbon taxes
• Increases in procurement and production costs
Technology / Market
(3) Development of
decarbonization
technologies
(electrification)
• Increase in costs associated with promotion of electrification strate-
gies to achieve carbon neutrality
• Rising development costs for electrification
• Rising development costs for carbon-neutral technolo-
gies and materials
(4) Scarcity and rising
costs of resources
• Difficulty in procuring raw materials due to delays in resource devel-
opment and investment decisions (supply shortages and rising costs
of battery units)
• Surge in prices for raw materials
• Rising development costs for alternative technologies
(5) Introduction of
renewable energy
• Delays in development of vehicles and technologies tailored to local
energy conditions
• Slowdown in pace of decarbonizing vehicles across
lifespan (well-to-wheel)
• Drops in sales volume of new vehicles and market share
• Regulations on use of fossil fuels and high prices of renewable energy
• Reduced flexibility in market to select products
(6) Changes in con-
sumer preferences
• Delayed response to market changes (specifications and prices fail to
meet consumer expectations)
• Drops in sales volume of new vehicles and market share
(7) Market uncertainty
• Business instability due to environmental changes (market shifts due
to measures to curb inflation in United States)
• Impacts on inventory and fixed asset valuation due to
higher cost of sales ratios and lower sales
Reputation
(8) Industry criticism
and litigation
• Significant damage to corporate image or litigation due to intense
criticism of automotive industry triggered by previously mentioned
policy and legislation and technology- and market-related risks
• Decreases in sales volume of new vehicles and market
share
• Inclusion of product development costs for lineup
changes
• Increases in procurement and production costs
Risk Type
Risk Item
Risks
Impacts
Physical Risks
Acute
(9) Increases in frequency
and severity of natural
disasters
• Suspension of factory operations due to disruptions in supply of parts and
materials from suppliers
• Suspension of production or logistics due to natural disasters (heavy rain,
earthquakes, and other extreme events)
• Drop in revenue from sales due to factory shutdowns
• Material losses in assets due to disasters
• Costs incurred for business continuity plan (BCP) responses
Chronic
(10) Water shortages and
heatwaves
• Impacts on plant operations due to difficulties in securing stable water supply
• Deteriorating labor conditions due to heatwaves
• Drop in revenue from sales due to lower production output
• Labor shortages
*1 Zero emission vehicles: BEVs, FCEVs, and other vehicles that have the potential not to emit CO2 and NOx (nitrogen oxide) during vehicle operation
b Resilience of the Organization’s Strategy Under 1.5°C, 4°C, and Other Climate-Related
Scenarios in Terms of Business, Strategy, and Financial Planning
Step 1
Set Future Storylines Assuming Climate-Related Effects
We envisioned the external environment in 2030 in terms of transition risks and opportunities under the 1.5ºC
scenario using multiple scenarios, such as the IEA’s NZE and APS. We then conducted detailed impact assess-
ments on climate-related risks identified in the TGRS that are expected to have significant impacts. Analyses
of physical risks under the 4ºC scenario were conducted based on future forecasts for 2050 and 2090 using
the Intergovernmental Panel on Climate Change (IPCC) scenario (SSP5-8.5). Preliminary assessments on cli-
mate change impacts and screenings for priority sites requiring further investigation were also conducted for
business locations in Japan (137) and overseas (73) in order to better understand the impacts of an increase in
weather-related disasters due to climate change on the operations of the Toyota Group.
Step 2
Consider the Impacts on Toyota Envisioned in Step 1
Under the 1.5ºC scenario, we project there will be a global increase in the adoption of renewable energy
(electricity and carbon-neutral fuels*1), which will amplify the role of electric vehicles (especially ZEVs), while
the speed of adoption and types of renewable energy adopted (solar, wind, biomass, etc.) will vary by country
and region. With a substantial rise in the ratio of ZEVs in new car sales in certain countries and regions, and
focused efforts in others to promote the use of carbon-neutral fuels, we believe it will be necessary for Toyota
to offer products (vehicles) that are tailored to the distinct needs of each market. The introduction of carbon-
neutral fuels will be effective in reducing CO2 emissions from vehicles already out in the market and will
enable a reduction in CO2 emissions without exclusively relying on new car sales. Concerns about rising costs
due to the introduction of carbon taxes and higher tax rates may impact production and procurement, leading
to a shift to the use of energy-efficient technologies, renewable energy, and hydrogen to reduce risks.
Certain sites have been identified where there will be changes in terms of inland flooding and storm
surges in the future under the 4ºC scenario. Furthermore, there are growing concerns that society’s climate
change measures may be inadequate, leading to increased possibility of suspended production due to more
frequent and severe natural disasters, such as floods, and production cuts and stoppages due to supply chain
disruptions.
*1 Sustainable biofuels, synthetic fuels, etc.
Number of Sites Showing Future Changes Due to Climate Change*1
Assessed Hazards
Assessed Sites
Present Day to Latter Half of 21st Century
RCP8.5
River flooding risk
Japan: 137 sites
0 sites
Overseas: 73 sites
0 sites
Inland flooding risk
Overseas: 73 sites
3 sites
Storm surge risk
Overseas: 73 sites
8 sites
*1 Limited to sites assessed as being at risk (grade B or above)
Hazard Grade Legend
*1 Certified as compliant with criteria for Scope 1 and Scope 2 emissions
reduction targets being in line with the science-based criteria estab-
lished by the Science Based Targets initiative (SBTi) to limit the global
average temperature increase to 1.5ºC above pre-industrial levels as
well as Scope 3 Category 11 emissions (gCO2e/km) reduction targets
in line with the science-based criteria to hold the increase in the
global average temperature to well below 2ºC above pre-industrial
levels
Message from the CSO | Roundtable Discussion among Outside Officers | Dialogues with Shareholders and Investors | Corporate Governance | Risk Management and Compliance | Message from the CFO | Capital Strategies
Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
E
D
C
B
A
Assessment Conditions
Assessment of changes in hazard grades from the present day to the latter half of the 21st century under the 4°C scenario based on the following conditions:
Domestic Sites:
Logic: MS&AD InterRisk Research & Consulting, Inc. (i.e., Flood Risk Finder, etc.)
Assessment Items: Inundation hazards due to river flooding
Overseas Sites:
Logic: Tokio Marine dR Co., Ltd. (i.e., Fathom Global Flood Map, etc.)
Assessment Items: Inundation hazards due to river flooding, inland flooding, and storm surges
Low
High
Hazard
104
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Step 3
Determine Toyota’s Strategies
Toyota affirms its commitment to enhancing resilience in the management of its business operations in the
medium to long term through a multi-pathway strategy with the use of scenario analysis. Through a compara-
tive analysis with multiple scenarios, including the IEA’s NZE, Toyota has verified the potential of its strategy
for transition risks, which incorporates carbon-neutral fuels, to meet the 1.5ºC target set out in the Paris
Agreement on climate change.
Toyota strives to achieve its goal of carbon neutrality by 2050 through a holistic approach tailored to
energy conditions in different regions, which includes offering customers a range of options such as BEVs,
PHEVs, HEVs, and hydrogen engines, as well as electricity, hydrogen, and new fuels (carbon-neutral fuels), that
can make effective use of existing infrastructure and initiatives to reduce CO2 emissions from vehicles on the
market through these measures.
According to the CNF scenario report by the Japan Automobile Manufacturers Association, the shift to
low-carbon fuels for automobiles is also important, and, not only the scenario of a rapid shift to BEVs but also
the scenario of effective use of HEVs, PHEVs, and carbon-neutral fuels could be consistent with the IPCC
1.5ºC scenario for 2050.
Toyota is considering conducting risk assessments in terms of physical risks for sites in Japan and overseas
that have been identified as potentially at risk (grade B or higher) in climate disaster hazard screenings due to
anticipated impacts from climate change. The Company intends to review flood mitigation measures and
BCPs based on the results of these risk assessments.
Toyota will continue to perform scenario analysis to identify, prioritize, and assess risks and opportunities
for significant climate change impacts.
Environmental Initiatives (Disclosure Based on TCFD Recommendations)
Transition Risks (Significant Risks under the 1.5°C Scenario)
Risk Type
Major Risks
Time Frame
Impact Level*1
Major Opportunities
Key Initiatives
Policy /
Regulations
Electrification
(Response to changes in regula-
tions and actual demand)
• Increase in BEV production
costs
• Increased investment in required equipment/facilities and development
• Increased costs associated with promoting electrification
Medium
term
High
• Increased customer engagement
through battery and peripheral
energy management businesses
• Promotion of research and development to improve fuel and electrical
performance
• Expanded investment in batteries and resource shift
• Expanded lineup of electric vehicles
• Adoption of multi-pathway strategy to adapt to regulatory changes quickly
and flexibly
• Return on investment
• Difficulty in recovering investments due to sudden changes in regulations
• Inability to achieve expected sales volume, even with increases in production
• Delays in increasing BEV
production
• Fines for failure to comply with fuel efficiency regulations
• Lower sales due to delays in compliance with ZEV regulations
Technology /
Market
Scarcity and rising costs of
resources
(Difficulty in procuring raw
materials)
• Escalating material shortage and scarcity due to delays in resource development amid rising demand for BEVs
• Risk of inability to procure optimal resources due to delays in investment decisions on BEVs
Medium
term
High
• Securing of resources by promoting
battery 3R initiatives
• Maintenance of sales volume of
electric vehicles other than BEVs by
increasing sales of PHEVs
• Securing of supply from partners
• Collaboration with partners on joint research
• Development of diverse next-generation battery technologies (LFP batteries)
• Advancements in combustion technology and development of engines capa-
ble of reducing CO2 emissions
Introduction of renewable
energy
• Regional variations in avail-
ability of renewable energy
• Slow and stagnant sales due to delays in development of vehicles and technolo-
gies tailored to local energy conditions
Medium
to long
term
Medium
• Sales of BEVs and carbon-neutral-
fueled vehicles that meet regional
demand
Vehicles
Promotion of development to improve fuel efficiency and electrical cost
performance
Fuels
Development of technologies and collaboration with other companies in rela-
tion to carbon-neutral fuels (sustainable biofuels, e-fuel and other synthetic
fuels, etc.) and hydrogen
Power management
Promotion of use of renewable energy and power management technologies
and businesses
• Continuously elevated prices
for renewable energy
• Accelerated shift away from car ownership due to increased manufacturing
costs and energy prices
• Increased sales of fuel-efficient
vehicles and expansion of renewable
energy businesses
Physical Risks (Significant Risks under the 4°C Scenario)
Risk Type
Major Risks
Time Frame
Impact Level*1
Major Opportunities
Key Initiatives
Acute
Increases in frequency and
severity of natural disasters
• Production shutdowns due to damage to production sites or disruptions in supply chains stemming from floods,
storm surges, droughts, or other extreme weather events
Short to
long term
Low
• Provision of solutions to address natural
disasters (vehicles designed to be resis-
tant to disasters, emergency power
sources, mapping information, etc.)
• Selection of sites factoring in water hazards when building new factories
• Promotion of measures based on results of water risk assessments
• Ongoing revisions to BCPs based on disaster experiences
*1 Definitions of financial impacts High: Significant global impact Medium: Impact on regional/local businesses Low: Minor impact on regional/local businesses
Message from the CSO | Roundtable Discussion among Outside Officers | Dialogues with Shareholders and Investors | Corporate Governance | Risk Management and Compliance | Message from the CFO | Capital Strategies
Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
105
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Environmental Initiatives (Disclosure Based on TCFD Recommendations)
Carbon-Neutral Initiatives (Specific Items in Transition Plan)
2021
2022
2023
2024
Overall
Strategy
BEVs
Batteries
Hydrogen and
Carbon-
Neutral Fuels
Commercial
Sector
HEVs and
PHEVs
Other
*1 Connected, autonomous, shared, and electric technologies
April 2021
· Declaration of commitment to take on global
challenge of working to realize carbon neutrality
by 2050
April 2023
· Announcement of commitment to achieve carbon neu-
trality as key theme under Company’s new manage-
ment team
December 2021
· Briefing on BEV
strategies
April 2022
· Announcement of Lexus RZ
May 2022
· Launch of all-new
bZ4X
May 2023
· Announcement of plans to
invest ¥5 trillion in BEVs and
batteries by 2030
· Establishment of BEV Factory
June 2023
· Additional investment
in BEV production and
battery plants in
United States
October 2023
· Next-generation BEV concept
announced at Japan Mobility Show 2023
April 2024
· Additional investment of
U.S.$1.4 billion for produc-
tion of new BEVs in United
States
July 2021
· Launch of all-new Aqua
equipped with bipolar nickel-
hydrogen battery
August 2022
· Announcement of plans to invest
maximum of ¥730 billion in bat-
teries for BEVs in Japan and
United States
May 2023
· Start of development and verifi-
cation of stationary storage bat-
tery system with Toyota Tsusho
Corporation and Tokyo Electric
Power Company Holdings,
Incorporated
June 2023
Announcement of
next-generation
technologies at
Technical Workshop
· Next-generation
BEV strategy
· Three types of next-
generation batter-
ies, all-solid-state
batteries
· Aerodynamic tech-
nologies using
rocket technologies
· Multi-pathway
platform
· Hydrogen business
strategy
· Next-generation
fuel cell system
· Standardization of
large commercial
tanks
September 2023
Announcement at
Toyota Monozukuri
Workshop on mono-
zukuri (manufactur-
ing) that shapes
advanced
technologies
· Halving of produc-
tion processes (giga
casting, next-gener-
ation BEV lines,
next-generation
factory designs)
· Mixed model pro-
duction lines
· Digital twins
October 2023
· Additional investment of approximately U.S.$8
billion in production of automobile batteries in
United States
· Announcement of collaboration with Idemitsu
Kosan Co., Ltd., pertaining to mass production of
all-solid-state batteries for BEVs
· Conclusion of long-term supply contract for EV
batteries in United States with LG Energy
Solution, Ltd.
March 2024
· Primearth EV Energy Co., Ltd.,
becomes wholly owned subsidiary
of Toyota Motor Corporation to
improve systems for mass produc-
tion of automotive batteries (name
changed to TOYOTA BATTERY Co.,
Ltd., in October 2024)
May 2021
· Participation of hydrogen engine Corolla in
Super Taikyu Fuji Final 4 Hour Race
· Expansion of options in areas of producing,
transporting, and using hydrogen
March 2022
· Promotion of production and use of
CO2-free hydrogen in Woven City with
ENEOS Corporation
December 2022
· Participation of hydrogen-powered
Corolla in Thailand 25-Hour
Endurance Race
March 2023
· Start of operation of electrolysis
system
July 2023
· Establishment of
Hydrogen Factory
September 2023
· Completion of Tri-Gen system for producing
hydrogen, electricity, and water with FuelCell
Energy, Inc., in United States
February 2024
· Joint development of large-scale elec-
trolysis system with Chiyoda Corporation
April 2021
· Establishment of Commercial Japan Partnership Technologies
(CJPT) to address social issues and engage in commercial sector
decarbonization efforts
December 2022
· Collaboration with
Charoen Pokphand
Group Co., Ltd., in
Thailand
April 2023
· Collaboration with The Siam Cement Group
Public Company Ltd. in Thailand
May 2023
· Collaboration with Daimler Truck Holding AG, Mitsubishi Fuso Truck
and Bus Corporation, and Hino Motors, Ltd., on development of
hydrogen and CASE*1 technologies
October 2023
· Announcement with CJPT of plans
to accelerate initiatives for realizing
carbon neutrality and addressing
logistics issues in Thailand
December 2023
· Conclusion on basic agreement on collaboration
for carbon neutrality in Thailand
July 2022
· Announcement
of new Crown
November 2022
· Announcement
of new Prius
June 2021
· Announcement of goal of
making plants carbon neutral by
2035
December 2021
· Start of disclosure of public
relations activities on climate
change policies (updated
annually)
November 2023
· Announcement of efforts to step
up battery 3R initiatives to con-
tribute to realization of circular
economy
c Impact of Climate-Related Risks and Opportunities on the Organization’s Businesses,
Strategy, and Financial Planning
Toyota has set greenhouse gas emissions reduction targets as part of its transition plan in response to the
aforementioned risks and opportunities. Multiple scenarios are used to validate the feasibility of Toyota’s tran-
sition plan.
Risks and opportunities are incorporated into project-related financial planning to solidify transition plans
under Toyota’s multi-pathway strategy. Project investments that exceed a specified amount must be approved
by the Board of Directors.
Transition Plan (Greenhouse Gas Emissions Reduction Targets)
Scope 1 and Scope 2
Scope 3
2035: 68% reduction (from 2019 levels)*
2030: 33.3% reduction (from 2019 levels)* for passenger light-duty
vehicles/light commercial vehicles; 11.6% reduction (from 2019 levels)
for medium/heavy freight trucks
2035: Carbon neutrality at plants
2035: 50% reduction or more (from 2019 levels)*
* Certified as compliant with criteria for Scope 1 and Scope 2 emissions reduction targets being in line with the science-based criteria established by the
Science Based Targets initiative (SBTi) to limit the global average temperature increase to 1.5ºC above pre-industrial levels as well as Scope 3
Category 11 emissions (gCO2e/km) reduction targets in line with the science-based criteria to hold the increase in the global average temperature to
well below 2ºC above pre-industrial levels
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Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
September 2022
· Organization of first meeting of Keidanren’s Committee on Mobility
· Certification and approval received from SBTi
106
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Risk Management
a Organization’s Processes for Identifying and Assessing Climate-Related Risks
Toyota has in place the TGRS, a Companywide risk management system that covers all risks related to its
global business activities. All risks, including those related to climate change, are identified, assessed, and
managed based on the TGRS.
Toyota carries out risk assessments based on the two perspectives of magnitude of impact and vulnerabilities
and provides explanations of when the risk is expected to materialize to clarify the substantive financial or
strategic impact on Toyota’s business.
The magnitude of impact is assessed with respect to four elements—finance, reputation, violation of laws
and regulations, and business continuity—on a five-point scale. For finance, the ratio to sales is indexed.
Vulnerabilities are assessed based on the two elements of the current status of countermeasures and the
probability of occurrence.
Identified Climate-Related Risks and Potential Impacts
Risk Type
Potential Impact
Transition
Risks
Policy /
Regulations
• Tightening of regulations, including fuel efficiency and greenhouse gas emissions regulations, in relevant countries and
regions with potential to have significant impact on technology development and product or production planning
• Possibility that lawsuits may be filed due to differences in interpretation between entities, such as investors and compa-
nies, in relation to tightening or introduction of regulations
Technology
• Global tightening of fuel efficiency regulations for automobiles as climate change response measure and rising cus-
tomer needs for low-carbon vehicles
• Positioning of development and cost reduction of low-carbon technologies centered on electrification as important
management issues
Market
• Decreases in sales affecting financial conditions due to market changes
Reputation
• Concern that damage to corporate image could affect Toyota’s sales and stock prices
Physical
Risks
Acute
• Concern that natural disasters (floods, storm surges, etc.) caused by climate change could damage 210 locations in
Japan and overseas
Chronic
• Concern that increases in droughts associated with climate change could have significant impact on production plans
and rising water costs at some Toyota plants
b Organization’s Processes for Managing Climate-Related Risks
After risks by region, function (manufacturing, sales, etc.), and product are identified by each division and
assessed in terms of magnitude of impact and vulnerabilities, cooperation is pursued among the relevant
regions and divisions and mutual support is offered to bring about a prompt response. Group chief officers and
in-house company presidents supervise the activities of in-house companies and, at lower organizational
levels, general managers supervise the activities of divisions and implement and monitor countermeasures.
Furthermore, climate-related risks and opportunities are identified and assessed by the CN Strategy
Subcommittee and the Sustainability Subcommittee and then deliberated on by the relevant divisions and
officers. The CN Strategy Subcommittee monitors the status of and implements revisions to initiatives for
addressing issues such as fuel economy regulations and procurement as well as issues that could have an
effect on direct operations, such CO2 emissions regulations affecting plants, logistics, and other non-produc-
tion locations, and water risks. The Sustainability Subcommittee performs such monitoring and revisions in
relation to the appropriateness of the initiatives in consideration of issues related to the promotion of sustain-
ability as well as external stakeholders.
Meetings of the above subcommittees are held about four times a year to assess risks with the participa-
tion of executive- or general manager-level members of relevant divisions, such as those related to technol-
ogy, the environment, finance, procurement, production, and sales. Important risks and opportunities that
require prompt response are reported to the Board of Directors as they arise to allow for response measures
to be determined.
c Method of Integrating Processes for Identifying, Assessing, and Managing Climate-Related
Risks into the Organization’s Overall Risk Management
As described above, the processes using the TGRS constitute a Companywide risk management system that
covers all risks and opportunities related to global business activities, including those pertaining to climate
change.
At meetings of the CN Strategy Subcommittee and the Sustainability Subcommittee where members
from relevant divisions gather, climate-related risks and opportunities are identified, assessed, and managed
and countermeasures are examined.
Metrics and Targets
a Metrics Used by the Organization to Assess Climate-Related Risks and Opportunities in Line
with Strategies and Risk Management Processes
Toyota believes that adopting multiple metrics to comprehensively manage climate-related risks and oppor-
tunities is an important measure for adaptation to and mitigation of climate change. Accordingly, the metrics
include not only the amount of greenhouse gas emissions but also other elements closely related to climate
change, such as energy, water, resource recycling, and biodiversity.
The following targets have been set based on these indicators, and related efforts are systematically pro-
moted as “six challenges” through initiatives in six areas.
Long-term strategy (2050 Target): Toyota Environmental Challenge 2050
Medium-term strategy (2030 Target): 2030 Milestone, certification and approval by SBTi
Short-term strategy (2025 Target): 7th Toyota Environmental Action Plan
Toyota aims to achieve carbon neutrality with regard to Scope 1, Scope 2, and Scope 3 emissions by 2050
through the promotion of the following initiatives pertaining to the six challenges.
Initiatives
Scope and Relationship to Scope 1, Scope 2, and Scope 3 Emissions
Life Cycle Zero CO2 Emissions Challenge
Scope 1, Scope 2, and Scope 3
New Vehicle Zero CO2 Emissions Challenge
Average greenhouse gas emissions from new vehicles (Scope 3, Category 11)*1
Corporate Activities
Scope 1, Scope 2, and voluntary actions*2
Plant Zero CO2 Emissions Challenge
Scope 1 and Scope 2 emissions for production processes and voluntary actions*2
*1 Per vehicle, gCO2e/km, well to wheel, includes greenhouse gas emissions from the production of fuel and electricity as well as greenhouse gas
emissions from vehicle operation
*2 Production sites of Toyota Motor brands other than consolidated subsidiaries
Internally, certain carbon prices are used as indicators to examine capital investment and other activities.
b Scope 1, Scope 2, and, When Applicable, Scope 3 Greenhouse Gas Emissions and Related Risks
Requests for the disclosure of climate change and other non-financial information are growing and increas-
ingly being legislated in different parts of the world.
Toyota has worked extensively over the years to disclose environmental information and will continue to
review conditions for disclosure, as needed, so that information is released in accordance with local systems.
Emissions from Scope 1 and Scope 2 in fiscal 2024 increased due to record-breaking production volumes
and revisions in the scope of coverage for legal disclosures. Nevertheless, Toyota remains committed to pro-
moting efforts to reduce emissions.
CO2 Emissions Data
(Millions of t-CO2)
FY2022
FY2023
FY2024
Scope 1
248
237
256
Scope 2
339
287
287
Scope of calculation: CO2 emissions attributable to energy use by Toyota Motor Corporation and its wholly owned subsidiaries
Emissions coefficients: See “Reference Factors (For FY2024 Calculations)” on page 54 of Toyota’s sustainability data book for fiscal 2024
Reporting period:
April 1–March 31 of respective year
Environmental Initiatives (Disclosure Based on TCFD Recommendations)
Third-Party Verification
: Figures for which third-party verification has been received
Message from the CSO | Roundtable Discussion among Outside Officers | Dialogues with Shareholders and Investors | Corporate Governance | Risk Management and Compliance | Message from the CFO | Capital Strategies
Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
107
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
c Targets Used by the Organization to Manage Climate-Related Risks and Opportunities and
Related Performance
Structure of Environmental Strategies
Toyota is continuously monitoring social trends and customer opinions. Toyota takes steps to determine which
issues it should focus on, quickly identify future issues, and address environmental issues by applying new
ideas and technologies. However, global environmental issues, such as those related to climate change, water
shortages, resource depletion, and biodiversity loss, continue to spread and grow more serious every day.
We formulated Toyota Environmental Challenge 2050 in 2015 and the 2030 Milestone in 2018 to enable
all employees to better understand these issues and continue to tackle challenges from a long-term perspec-
tive, looking at the world 20-to-30 years in the future. In 2020, we set the 2025 Target as the most recent
target of the 7th Toyota Environmental Action Plan, a five-year plan for achieving the aforementioned targets.
In September 2022, we confirmed that our reduction targets for Scope 1, Scope 2, and Scope 3 Category
11 emissions were in line with SBTi criteria*1 and updated our medium-term targets accordingly.
SBTi-Certified Targets
Emissions Type
Target Year
Base Year
Reduction Rate
Scenario /
Approval Class
Scope 1 and Scope 2
2035
2019
68%
1.5ºC
Scope 3, Category 11
(emissions intensity)
Passenger light-duty vehicles and
light commercial vehicles
2030
33.3%
Well below
2ºC
Medium and heavy freight trucks
11.6%
*1 Certified as compliant with criteria for Scope 1 and Scope 2 emissions reduction targets being in line with the science-based criteria established by
the Science Based Targets initiative (SBTi) to limit the global average temperature increase to 1.5ºC above pre-industrial levels as well as Scope 3
Category 11 emissions (gCO2e/km) reduction targets in line with the science-based criteria to hold the increase in the global average temperature to
well below 2ºC above pre-industrial levels
In April 2023, Toyota announced its intention to reduce average greenhouse gas emissions from vehicles
sold worldwide by more than 33% by 2030 and by more than 50% by 2035 (compared with 2019 levels).
Medium- and Long-Term Targets
Life Cycle Zero CO2
Emissions Challenge
New Vehicle Zero CO2 Emissions
Challenge
All Corporate Activities
Plant Zero CO2
Emissions
Challenge
Contribution
to SDGs
Long term
Achieve carbon neutrality for green-
house gas emissions throughout vehicle
life cycle by 2050
Achieve carbon neutrality for average greenhouse
gas emissions from new vehicles by 2050
Achieve carbon neutrality for green-
house gas emissions from business activ-
ities by 2050
Achieve zero CO2 emissions
from production at plants
by 2050
Medium
term
Reduce greenhouse gas emissions
throughout vehicle life cycle by 30%
by 2030 (compared with 2019
levels)
Reduce average greenhouse gas emissions from
new vehicles by 2030
• Passenger light-duty vehicles and light commer-
cial vehicles: 33.3% reduction (compared with
2019 levels)
• Medium and heavy freight trucks: 11.6% reduc-
tion (compared with 2019 levels)
Short term
Environmental Management System: Scope and Management Steps
We have implemented an environmental management system that covers 512 companies considered consoli-
dated subsidiaries on an accounting basis and seven unconsolidated vehicle production companies (as of
December 31, 2023). Under this system, we carry out the following three steps.
We will continue to improve this system going forward to facilitate the ongoing promotion of environmen-
tal initiatives.
Environmental Management Steps
1. Organize internal structures (governance frameworks)
2. Ensure thorough risk management and compliance (including voluntary actions)
3. Maximize environmental performance
ISO 14001 Certification
As of December 31, 2023, all plants of Toyota Motor Corporation and its consolidated subsidiaries (130 com-
panies) have obtained ISO 14001 certification.
Awards Received
External Recognition for Climate- and Water-Related Initiatives
CDP Lists
In December 2023, Toyota was selected for inclusion in the Climate Change A- List and the Water Security B
List by CDP.*1
*1 An international NGO that encourages and assesses corporate disclosures on environmental actions based on calls from global institutional
investors with high levels of interest in environmental issues
Disclosure of Climate-Related External Relations Activities
Toyota publishes annual reports on its basic stance on important climate change policies, its approach to
external relations activities, and an overview of the economic and industry associations to which it belongs.
Toyota’s Views on Climate Public Policies 2024
Toyota Environmental Challenge 2050
Reduce average greenhouse gas emissions from
new vehicles by more than 50% by 2035 (com-
pared with 2019 levels)
Reduce greenhouse gas emissions
from corporate activities by 68% by
2035 (compared with 2019 levels)
SBT
Achieve carbon neutrality for
CO2 emissions from produc-
tion at plants by 2035
2030 Milestone
SBT
7th Toyota Environmental Action Plan (2025 Target)
Environmental Initiatives (Disclosure Based on TCFD Recommendations)
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108
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Human Resources
Fundamental Approach
Since its founding, Toyota has undertaken human resource development
efforts shaped by the belief that monozukuri (manufacturing) depends
on the development of human resources. We seek to develop human
resources with the ability not only to continuously think and act for the
benefit of others but also to forge connections with others. In addition,
we endeavor to advance our transformation into a mobility company
and fulfill our corporate mission of “producing happiness for all” in the
face of a once-in-a-century transformation. For that reason, we will
emphasize the importance of employees—Toyota’s most important
asset—working and challenging themselves as we aspire to become a
company where anyone can take on new challenges at any time, as
many times as possible, without fear of mistakes.
To this end, we are working to develop human resources with empa-
thy* and expertise who have a positive impact on others, are capable of
winning trust, are deemed reliable, and are proficient at advancing proj-
ects and training others. In this manner, our human resource develop-
ment approach entails workplace-driven efforts to foster the type of
people who are able to excel and succeed even without the backing of the Toyota brand. At the same time, we
are implementing initiatives based on three main pillars—diversity, growth, and contributions—designed to
transform the Company into a place where anyone can take on new challenges at any time, as many times as
possible, without fear of mistakes. These initiatives have proven effective at cementing our foundations. As we
continue to implement such initiatives, we will also attempt to instill a future-oriented perspective into our
human resource base through efforts to craft today the workstyles we will use in a decade from now. We
thereby aim to develop a workplace environment that empowers all employees to seek out their own personal
motivations at work and discover and exploit opportunities for growth.
* Empathy in this context is defined as the capacity to exert effort on behalf of others, including customers and colleagues, and the capacity to be
humble in learning from others and continuously improving.
Recruitment
To recruit ideal candidates, Toyota has revised its prior recruitment practices as follows.
1. Recruitment criteria
Recruit individuals with a personality that makes others want to work with them
Attract individuals who are passionate about chasing their dreams at Toyota
2. Acceleration of mid-career recruitment
Increase mid-career recruits from 10% to 49% (fiscal 2024) to introduce external knowledge and promote
the reexamination of work processes and workstyles; continue efforts going forward to maintain the ratio of
mid-career recruits (administrative and engineering positions) at approximately 50%
Introduce referral programs (introduction by Toyota employees) and other new means of recruitment
Introduce direct recruiting frameworks for use by actual workplaces and expand recruitment through refer-
ral programs (introduction by Toyota employees)
Promote recruitment of new graduates from doctorate programs with the potential to begin making immedi-
ate contributions
3. Recruitment of new graduates with diverse backgrounds
Increase opportunities for contact with first- and second-year high school and university students and pro-
mote the recruitment of diverse people from universities from which no graduates have previously been hired
by Toyota, technical colleges, vocational schools, and high schools
4. Course-specific recruitment of new graduates
Recruit students who have aspirations for what they want to do at Toyota to accelerate the development of
professional human resources
Prepare 20 assignment courses to allow students to choose the course that best suits their personal growth
goals and promote recruitment of IT-related personnel, graduates from overseas universities, and other
diverse human resources suited to the characteristics of specific workplaces
Evaluation of and Feedback to Employees
The roles of Toyota employees and the main focuses of their work are to be defined in accordance with poli-
cies. Evaluation and feedback are based on close communication between subordinates and superiors to facil-
itate human resource development, and these evaluations and feedback are based on individual employees’
defined roles and work focuses.
Specifically, employees’ roles and main focuses are determined at the beginning of each fiscal year, and
employees consult with their supervisors periodically. Through these consultations, supervisors assess the
employees’ self-evaluations and provide feedback. Repeating this cycle drives the development of human
resources. In addition, we carry out 360-degree feedback for the purpose of employee growth. By giving
employees feedback on their strengths and weaknesses from people working with them, we help them reflect
on their own actions and make improvements.
In 2019, our personnel system was revised to better reward hard workers regardless of age or qualifica-
tions. Furthermore, in 2020, we introduced a system for centrally managing employee information, including
employee evaluations, results of consultations with supervisors, and results of questionnaires regarding work-
place management. This system has made it possible to refer to each employee’s previous evaluations, per-
sonnel information, and stated intent, thereby enabling the development and allocation of employees with
consistency through job assignment based on a better understanding of employee aptitude and intent. Results
for each six-month period are reflected in bonuses, and performance demonstrated over the past year is
reflected in salary raises for the following year.
Global Employee Development
We seek to develop human resources who can act in line with the Toyota Philosophy with the aim of trans-
forming into a mobility company while inheriting the precept of the Toyoda Principles.
Global Executive Human Resource Development
The Global 21 Program is a global executive training program that is designed to provide skilled employees
around the world with skills and knowledge suitable for global Toyota executives and to enable them to exer-
cise their strengths to the fullest in their respective areas of responsibility.
The program comprises the following three pillars.
1. Indication of management philosophy and expectations of executives
Dissemination of the Toyota Philosophy and incorporation thereof into global human resource systems and
training
2. Human resource management
Utilization of personnel evaluation standards and processes suited to specific regions of operation based on
Toyota’s shared values
3. Assignment-based education and training programs
Utilization of global assignments and executive training
Organization of regional succession committees to accelerate the identification and training of next-gener-
ation leaders
Human Resource Development
Anyone can take on new challenges
at any time, as many times as possi-
ble, without fear of mistakes
Three Main Pillars of Our Initiatives
Diversity: Living the life you choose
Growth: Seeing challenges and mis-
takes as fuel for growth
Contributions: Acting for the future
of the industry
Strengthening of the Foundation of
the Three Pillars
• Resource enhancement
• Management support
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109
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Human Resource Development
Shifting of Resources to Transform into a Mobility Company
If Toyota is to transform into a mobility company, it is crucial for the Company to swiftly shift resources from
existing automobile manufacturing and sales operations to connected, autonomous, shared, and electric
(CASE) technologies, value chain solutions, and other new operations.
For this reason, we are proactively advancing recruitment, reskilling, and redeployment to heighten the
potential of our employees. We are also carefully examining the roles and abilities of each individual in order
to ensure the placement of the right person in the right position. By doing so, we aim to enhance the competi-
tiveness of the Company and its organizations.
In addition, Toyota is leveraging its strength in promoting
innovation as a united team in order to further its transforma-
tion into a mobility company. To enhance the effectiveness of
this collaborative effort, we are bolstering communication,
including through the organization of labor–management
discussions throughout the year and by fostering a culture
that encourages active participation by all.
Toyota believes that a diverse workforce is what drives
innovation. One initiative for securing diverse human
resources is the push to acquire new software talent for
CASE-related businesses.
Furthermore, we aim to contribute to the development
of a mobility society. To this end, we have revised the soft-
ware development structure of the Toyota Group, establishing a new organization in October 2023 for inte-
grated promotion of software-related businesses and software development, replacing the existing in-house
structure of decentralized functions.
In addition, Toyota is ramping up its collaboration with Woven by Toyota, Inc., to implement the Toyota
Mobility Concept through initiatives at Woven City, a mobility test course for software development to accel-
erate vehicle intelligence and the verification of various technologies that connect people, vehicles, and
society.
In our quest to eliminate traffic accidents, it is imperative for development to be advanced through strong
coordination among colleagues with specific expertise or passions that spreads beyond the boundaries of, as
opposed to being contained within, individual companies or functions. Effective human resource development
is crucial to achieving such coordination. Based on this recognition, we are strengthening coordination in
human resource development by sharing training practices and providing venues that allow employees to fully
exercise their technical skills. We aim to ensure that everyone’s areas of expertise are respected and all are
encouraged to build up their expertise as well as to seek and create cross-company learning opportunities in
order to help accelerate the industry’s efforts to build a safe mobility society.
Well-Being Surveys Gauging Happiness and Sense of Purpose
Toyota seeks to be a company where all employees are able to lead happy lives and feel motivated with a
sense of purpose.
To gauge our progress toward this aspiration, we implement life well-being surveys, which measure how
happy employees feel and how accepting they are of the Company’s measures, as well as work well-being
surveys, which look at employee engagement through the lens of the motivation employees feel at work and
their level of pride in their workplace. The results of these surveys are utilized when planning and implement-
ing measures for empowering employees. Specifically, the results of life well-being surveys are communicated
to individual employees and to management to guide labor–management discussions and improvement activi-
ties for fostering a healthier workplace environment. Meanwhile, the results of work well-being surveys are
relayed to the relevant workplaces for use in engagement and improvement activities within the respective
organizations. This approach allows for organizational culture reforms to be advanced via communication-
driven organization development initiatives (bottom-up perspective) as well as via culture-shaping initiatives
positioned as a corporate management task (top-down perspective).
Improvement of Well-Being
Toyota Motor Corporation is working to improve well-being (happi-
ness) with the aim of ensuring that employees gain a sense of joy
and happiness from being involved in automobile manufacturing.
Highly specialized staff members are implementing measures
for improving the well-being of all employees. Information regard-
ing the true feelings and circumstances of employees obtained
through activities conducted by our dedicated staff is anonymized
and sent directly to management, which uses this information to
evaluate and improve Company policies. Then, employees are sur-
veyed again and further improvements are made.
As part of our fundamental initiatives, we have created an
environment in which all employees can freely access and apply
for consultation services and a variety of training at any time.
Our well-being improvement training programs include man-
datory ongoing group psychoeducation for all supervisors and offi-
cers aimed at preventing harassment and promoting well-being. In addition, all employees are offered
optional psychoeducation provided by dedicated staff to encourage them to value well-being and bring about
changes in awareness and behavior that help both them and others mutually enhance their well-being.
Also, since fiscal 2024, we have been administering well-being surveys to all employees as part of our well-
being monitoring efforts. These surveys gather information about subjective well-being and experiences of hap-
piness as well as satisfaction with Company measures designed to be primary drivers of action. We perform
statistical correlation analysis using the results and select measures that are deemed to be highly promising or
offer significant contributions in order to efficiently promote measures for driving our ongoing development.
Promotion of a DCAP Cycle Emphasizing Taking Action First
To survive in a time when the ideal path is not clearly apparent, it is important to continue to take action based on the
perspective of the front lines. In the past, Toyota implemented a PDCA cycle to examine the actions to be taken and
to formulate and implement plans. Going forward, however, we must emphasize taking action first (Do), then review
the results (Check) and make any necessary improvements (Adjust), and finally formulate ways to promote product-
and region-centered management in an ongoing and autonomous manner (Plan). The resulting DCAP cycle will be
advanced by leaders to serve as an example for other employees and thereby further their development.
Results of Life Well-Being Survey
(Life Satisfaction Score)*1
(Points)
FY2024
FY2025
Toyota Motor Corporation (comparison
with similar organizations*4)
21.8*2
(21.94)
22.5*3
(22.69)
*1 Calculated based on The Satisfaction with Life Scale
(Diener, E., Horwitz, J. & Emmons, R. A., 1985), a methodology for gauging
happiness that rates five items on seven levels for a maximum score of
35 points; the average life satisfaction score considered to be between
20 and 24 points
*2 Participation in survey for FY2024
Number of applicable employees: 69,247
Number of eligible responses: 58,044
Number of eligible responses from individuals consenting to be subject
of research: 48,315
*3 Participation in survey for FY2025
Number of applicable employees: 69,428
Number of eligible responses: 60,959
Number of eligible responses from individuals consenting to be subject
of research: 54,765
*4 Number of eligible responses from individuals consenting to be subject
of research for two consecutive years: 37,873
Results of Work Well-Being Survey
Percentage of Toyota employees who feel a sense of purpose and
fulfillment (engagement)
(%)
FY2024
FY2025
Toyota Motor Corporation
(Comparison with similar
organizations*5)
57
(58)
60
(59)
Percentage of Toyota employees who feel that diversity and individuality
are valued (inclusion)
(%)
FY2024
FY2025
Toyota Motor Corporation
(Comparison with similar
organizations*5)
52
(52)
55
(55)
*5 Number of eligible responses from individuals responding for two
consecutive years: 51,334
Fundamental
initiatives
Well-being
improvement
training
Well-being
monitoring
Sustainable,
growing, and
healthy company
Management
True feelings
and circum-
stances of
employees
Checks and
improvements
Improvement of fundamental skills, flexibility,
and agility to enhance workforce potential
Fostering of a culture that promotes the active
participation of diverse human resources with the right
person in the right position
Recruitment
Reskilling
Redeployment
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110
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Human Resource Development
Labor–Management Discussions
Toyota does not engage in labor–management negotiations not
focused on having union members and Company representatives
engage in disputes over wages and bonuses. Rather, we promote
labor–management discussions for the purpose of helping both
sides come to a better understanding of the business environ-
ment in which Toyota operates to aid in its transformation into a
mobility company and for all parties involved to engage in frank
and vigorous exchanges of opinion on the issues at hand.
Herein lies the essence of the 1962 Joint Declaration of Labor
and Management, which was signed by members of both labor
and management. With phrases like “standing on common
ground,” the declaration lays out a labor–management relation-
ship in which “the Company wishes for the happiness of its
employees and the union wishes for the development of the
Company.” Based on this sentiment, the Company considers the
employment of its personnel to be of the utmost importance, and
the labor–management alliance is thus committed to ensuring
the job security of Toyota employees.
At a labor–management council meeting held in spring 2023,
President Koji Sato expressed his belief that people are Toyota’s
greatest asset and explained his desire for everyone to contribute
while exercising their individuality, which he sees as an important
part of Toyota’s transformation into a mobility company. Based
on the issues discussed at the meeting, a concrete action plan
comprising three pillars—diversity, growth, and contribution—was
declared to guide efforts to help Toyota become a company
where anyone can take on new challenges at any time, as many
times as possible, without fear of mistakes. In conjunction with
the implementation of this action plan, regular discussions aimed
at fostering a culture of frank exchanges of opinion began taking
place on a nearly daily basis, with executive officers, chief offi-
cers, and even the president regularly visiting frontline
organizations.
These initiatives have cultivated a sense of unity in our quest
to make ever-better cars and shape the future. At the same time,
however, this openness has cast light on the fact that numerous
frontline workplaces have been subject to constantly burden-
some workloads. This recognition prompted President Sato to
pen a letter to employees in December 2023.
In this letter, he explained that, even if we were to scale back
our efforts a little in 2024, we would need to dedicate significant
energy to creating leeway at frontline organizations and cement-
ing our foundations. He also expressed his intent to temporarily
scale back burdensome workloads during the first half of 2024 to
provide employees with a period of relief.
At the spring 2024 labor–management council meeting that
followed the issuance of this letter, President Sato stated that he
wanted everyone to share their frank opinions to ensure that the
period of workload relief had its desired benefits. He also dis-
cussed Toyota’s approach to human resource investments. During
the discussions, participants delved deep into the important and
integral theme of motivation. These discussions led to the recog-
nition that it is the passion our people direct toward automobile
manufacturing that fuels our drive to tackle new challenges.
Preoccupation with Numerical Targets on the
Front Lines
At the start of the spring 2024 discussions, the labor union made
it apparent that a culture of being overly preoccupied with effi-
ciency and other numerical targets lies behind many of the issues
faced at production sites. In addition, various examples of condi-
tions at workplaces were shared.
For example, it was stated that an overemphasis on numerical
targets had distorted the true purpose of the Toyota Production
System (TPS), which is “to make others’ work easier,” and trans-
formed it into “to make others overburden themselves at work.”
Although we had succeeded in reducing inefficiencies and incon-
sistencies, we had seen less success when it came to addressing
burdensome workloads. As this approach became more ingrained,
Quest to Become a Company Where Anyone Can Take On New
Challenges at Any Time, as Many Times as Possible, Without Fear of
Mistakes
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Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
the result was even more difficult and encumbering work and a
greater amount of time required to learn new processes, a far cry
from a culture where everyone is able to contribute.
Others spoke of how the deadlines for projects were priori-
tized above all else and how this situation created concerns
regarding safety. Frontline workers described how prototypes
were constructed while efforts were made to train the people
who had been sent to the workplace to help shorten project lead
times, which made many worry for the safety of those involved. It
was also mentioned that forcing new items to be put out through
development processes prioritizing the schedule was not normal.
In response to such comments, Toyota Cheif Production Officer
Kazuaki Shingo stated his belief that forcing such burdens on
people was not a viable way to heighten competitiveness. Quite
the contrary, such an approach, Shingo believed, threatened to
impede skill development and led to employee shortages and
consequently increased cases of people having to be sent to other
workplaces to help with greater workloads thereat. He ended by
expressing his desire for us to work together to address the root
causes of such issues. Executive Vice President Yoichi Miyazaki
followed up by explaining how management can become overly
preoccupied with achieving numerical targets during the course of
everyday work. He also stressed that the importance of the targets
lies not in the numbers themselves, but in how these numbers
function as signs of abnormalities. He then went on to talk of the
need to change approaches given how important it is for commu-
nication to be based on a shared understanding of this outlook.
Meanwhile, Executive Vice President Hiroki Nakajima voiced
his thoughts on safety concerns, stating that a lead time not
backed by safety and quality was not a proper lead time.
Sugawara, senior general manager of the Vehicle Development
Center, interjected to explain that, if we were to lose sight of our
safety-first mentality, it could fundamentally undermine our
operations. He continued by emphasizing the importance of a
safety-first mentality, stating that a company that cannot ensure
safety, cannot promise quality or meet deadlines; Toyota’s most
important mission is protecting labor union members and other
employees.
Takahiro Imura, chief officer of the Production Group, offered
concrete solutions to the issues. Specifically, he stated that it had
been decided to halt the monitoring of management indicators
such as efficiency and productivity for one year in order to ensure
greater workplace health and safety. As he explained, efficiency
and productivity are important tools for enhancing competitive-
ness. However, as everyone at Toyota is well aware of this fact, it
is possible to remove these indicators from the targets pursued
on an organization-wide basis. It is more important to ensure that
employees are free from excessive time pressures and feel psy-
chological safety in order to create leeway at frontline organiza-
tions. He also spoke to the necessity of everyone contributing to
taking stock of our successes and shortcomings to overcome any
issues faced. We should then discuss and implement initiatives to
foster workplaces in which essential tasks are performed effec-
tively and develop frameworks that drive improvements and help
everyone grow and contribute to their organization.
Adoption of Workstyles That Produce Feelings of
Tangible Growth
Next, discussions turned to the need for organization and team
leaders to dedicate more attention to human resource develop-
ment given current employee shortages. The labor union stated
that it is rare for such leaders to play active roles in their teams
by being attentive toward all members. The union also explained
that the burdensome workloads that have forced individuals to
focus exclusively on immediate tasks do not contribute to moti-
vation or feelings of growth and that the large burden the current
approach places on supervisors has made it difficult for them to
be attentive to or train subordinates, which in turn has led to
increased employee turnover and diminished organizational
capabilities. In citing these issues, the union suggested that there
might be a need to shift to an approach in which, rather than
being solely focused on the task at hand, employees are able to
think, learn, and grow for themselves. Such an approach was cited
as having the possibility to help employees devote more atten-
tion to their career and their job of contributing to their
organization.
Executive Vice President Miyazaki responded by warning of
the dangers of simply waiting to be provided with the environ-
ment needed for growth. He stressed that employees can find
role models and sources of learning around them if they look.
Although people often say that there are no opportunities for
them to be taught, Miyazaki believes it is the duty of individual
employees to pursue their own growth.
Then-Chief Risk Officer Jun Nagata offered his own proposal:
managers must learn to become experts at managing. He
described a need for managers to reassess and transform how
they work as leaders of the Group and detailed the importance of
involving all teams or even all Group members in this process. He
had personally kicked off this process at his workplace with dis-
cussions of the goals of the team or of the Group as a whole that
included everyone. Nagata stated that it was his desire to get
everyone involved in discussing these matters in order to stimulate
such evaluations at a Group company level. By offering examples
of initiatives taken at his own workplace, he highlighted the impor-
tance of communication to reforming organizational cultures.
Human Resource Development Labor-Management Discussions
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112
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
The labor union added that motivation contributes to one’s
personal feelings of growth and happiness. If people feel they are
working toward a goal they believe in, their workplace will be
empowered as a result. A situation in which transformation at the
individual level drives organization-wide transformation would be
ideal. The union also expressed its intent to contribute to the fur-
ther transformation it felt Toyota was capable of. Furthermore,
strong commitment was voiced toward the exploration of rele-
vant themes through a joint labor–management effort while con-
ducting fixed-point measurements of the resulting changes in
workstyles and individual career plans.
Crafting of Workstyles Today for a Decade from Now
In response to the points raised in discussions at the spring 2024
labor–management council meeting, President Sato explained
his feelings with regard to the planned period of workload relief
as well as on comprehensive investments in human resources.
Sato
At this labor–management council meeting, I would like
to speak about my feelings regarding the future of the
automotive industry.
Let me start by expressing my gratitude for our 5.5 million
colleagues in Japan. As I have engaged in labor–management dis-
cussions, I have also been advancing activities to promote price
reforms and investments in people by our suppliers and dealers.
These efforts have been guided by conscious thought about what
I can do to ensure that we can grow together with our colleagues.
I also want to put forth my desire for us to craft today the
workstyles we will use in a decade from now.
“Producing happiness for all” requires constant effort. If we
are to create a mobility society that provides joy for all, we will
first need to ensure that we ourselves feel happy and are moti-
vated in our work. This is why I want to guarantee that our period
of workload relief generates the desired benefits. I would now
like to offer a step-by-step explanation of how we will accom-
plish this.
During the labor–management discussions I have engaged in
in 2024, I have gained an understanding of the approach we
should take in conducting comprehensive investments in human
resources.
Even if we are in a period of workload relief, that will not
change the fact that improvements to productivity are a source
of strength for Toyota. We must first reconfirm our commitment
toward productivity through labor–management discussions, and
then move forward with efforts to achieve such improvements.
I am a firm believer that the automotive industry is a remark-
able industry with the potential to grant people feelings of tangi-
ble growth and to make everyone happy. This is why it is so
important that we protect and cultivate our industry together.
In this most recent discussion between labor and manage-
ment, I feel that we were able to reconfirm two important things.
The first is the mutual trust that exists between labor and
management.
Management heard the voices of the front lines, which cried
out about how unbending numerical targets were overburdening
our workers. We responded by deciding to halt the monitoring of
management indicators such as efficiency and productivity for
one year in order to ensure greater workplace health and safety.
Some feared that this decision would diminish Toyota’s
competitiveness.
However, the labor union eased these fears by reasserting
their commitment to the belief that productivity is the source of
competitiveness. The union also communicated their firm support
for the implementation of ongoing reforms. The decision to halt
monitoring was only possible because of this relationship of
mutual trust between labor and management.
The second thing we were able to reconfirm was the impor-
tance of motivation.
Members of the labor union underscored this fact with state-
ments of how motivation toward one’s work has a way of shaping
an individual. It was also explained that if everyone—at all
levels—feels motivated toward accomplishing their goals, it was
sure to invigorate the entire organization and facilitate greater
contributions from workers.
I could not agree more.
Our ability to tackle new challenges is driven by the passion
of people who are highly motivated and engage actively with the
process of manufacturing automobiles in a variety of ways.
We also discussed the approach we should take toward
investments in human resources, and these talks as well led to the
consensus that motivation was a fundamental and integral theme.
The strong labor–management relationship that gives rise to
such discussions is not something that should be taken for
granted; rather, this relationship is an important part of the
Company’s foundation.
I want everyone to recognize their role at Toyota and to take
part in discussions for shaping concrete action. Through these
discussions, members of both labor and management should seek
ways to make our work more motivating.
Let’s all act as a united and happy front.
Two Perspectives for Preventing the Recurrence of
Verification Process Issues
Following the spring 2024 labor–management council meeting,
Toyota became the subject of a correction order pertaining to
model certification applications as it was in the process of creat-
ing leeway at frontline organizations and cementing the founda-
tions for supporting its future endeavors. President Sato
responded to this order by issuing a statement to employees call-
ing on members of both management and frontline organizations
to join hands in crafting more appropriate workplace
environments.
At a labor–management council meeting held in August
2024, the labor union inquired into the steps Toyota planned to
take in response to the model certification application issues.
President Sato responded with the following statement.
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Source of Value Creation
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Value Creation Story
—Future Mobility Society Envisioned by an
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Value Creation Foundations
Corporate Data
Sato
I understand that the order for corrective measures can
be viewed from two perspectives. The first perspective is
the lack of involvement by management in the overall certifica-
tion process. There is a need for us to reflect on our actions and
the degree to which we understood and acted based on our
responsibility with regard to managing various certification
processes.
The second perspective is our need to build greater under-
standing with regard to the certification processes on a
Companywide basis. Toyota has in place frameworks for the pro-
cess of developing automobiles, the collection of data for use in
certification, and the delivery of this data. However, there is some
doubt about whether these frameworks are organized and easy-
to-understand when viewed from an outside perspective. By
examining our processes, we were able to find certain areas per-
taining to data management as well as other aspects pertaining
to certification in which our frameworks were lacking. Looking
ahead, it will be important for us to take steps to prevent the
recurrence of such issues based on these two perspectives.
At the same time, we must carefully consider whether our
efforts will be truly effective for preventing recurrence as we
search for the prevention measures that will be most effective.
The more we put frameworks in place, the more we will rely
on those frameworks and become complacent. This dependence
on frameworks threatens to make our organization one in which it
is difficult to detect changes.
This is why we need to set up provisions that allow for the var-
ious frameworks we use in our work to be assessed from an over-
arching perspective. These provisions should allow us to track
who is doing what and where items and information are in all
areas of, for example, certification processes. Such monitoring
might lead us to the recognition that procedures we had taken as
a given previously are not actually necessary. This level of scru-
tiny is something that we should all practice together.
If we can use such provisions to eliminate inefficiencies and
shorten lead times, it will enable us to take action promptly in
response to incidents. The capacity for quick responses is the best
way that we can prevent the recurrence of issues. We must work
to reduce human error and to respond quickly when incidents
occur due to such error. At the same time, we have to eliminate
inefficiencies and shorten lead times. This approach should be
seen as the foundation for our recurrence prevention measures.
We need to always remain cognizant of the need to imple-
ment real reforms at frontline organizations, and we should act
based on this recognition. Rather than taking an all-encompass-
ing approach, it would be better to tackle the issues faced by the
front lines by looking at each issue individually, no matter how
small, so that we can implement reforms as a united team. Also, it
is crucial for everyone to consider what exactly their role is. By
examining the impact one has on front-end and back-end pro-
cesses, one will become more proficient at fulfilling their individ-
ual roles. It is also important to think about what one’s role is in
terms of who one is trying to please. In the future, I want to be
more aggressive in advancing the initiatives that we are able to
implement thanks to the relationship of mutual trust between
labor and management. I look forward to everyone’s continued
support in the future.
Labor–Management Sharing of Issues for Preventing
Recurrence of Model Certification Application Issues
and Commitment to Improving Workplace Culture
On November 25, 2024, Toyota submitted a progress report on
measures to prevent the recurrence of model certification appli-
cation issues to the Ministry of Land, Infrastructure, Transport and
Tourism (MLIT).
The submission of this report was preceded by a labor–man-
agement council meeting held on November 14, 2024, 11 days
earlier.
The first half of this meeting was devoted to sharing informa-
tion on the initiatives that had been advanced since the receipt of
the MLIT correction order on July 31, 2024. Management spoke
about the multitude of design changes that had been occurring
after certification tests and about how slow progress in updating
aged equipment was resulting in lower ratios of time devoted to
productive work. The thinking behind the increase in investments
in human resources announced at the interim financial results
presentation held in November 2024 was also explained. These
subjects were discussed from the perspectives of both human
resource development and manufacturing.
In regard to the TPS self-study activities related to the certi-
fication process spearheaded by Chairman Akio Toyoda, Shigeki
Tomoyama, chief officer of the Japan Sales Business Group,
explained how the shared values of TPS were becoming
entrenched within the organization.
Tomoyama
Around the time the self-study activities started, I
mentioned to Chairman Toyoda that we could not
merely let our response to the model certification application
issues end with recurrence prevention measures. I told him that
we needed to identify issues with the implementation of TPS in
all processes, spanning from planning and development to mass
production, and to fundamentally reform our frameworks and
culture in order to drive human resource development and bolster
the competitiveness of the Toyota Group.
It is important to entrench the principles of TPS as a shared
set of values. One of these shared values is the end goal of short-
ening lead times. However, this does not mean to do things
quicker or to rush; it entails preventing halts in the movement of
items and information. In fact, we actually drafted charts
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Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
detailing the flow of items and information at individual Group
companies. These charts indicated that around half of the lead
time between development and certification could be attributed
to halts due to reworking or revisions.
I want to eliminate such halts to make things easier for
people in engineering and testing positions. It is my hope that this
will allow these individuals to engage in more meaningful work.
Another shared TPS value is the dedication to making sure
worksites are able to detect abnormalities and immediately halt
operations in the event of an abnormality.
“Abnormalities” specifically refers to instances of deviation
from our defined quality standards. I believe that quality stan-
dards are imperative for all processes carried out by both techni-
cal and administrative employees, and we should also establish
conditions for high-quality products to guide us in instilling qual-
ity in all aspects of operations.
This is the view of both labor and management, and this
shared understanding has enabled us to maintain a consistent
approach as we advance initiatives for bolstering competitive-
ness driven by the commitment of management and of frontline
staff.
Since the August 2024 labor–management council meeting,
we have been engaged in more extensive efforts to gather infor-
mation on conditions and opinions on the front lines. Meanwhile,
the labor union has expressed its desire to ensure that frontline
organizations are capable of defining clear actions for preventing
the recurrence of issues that become apparent as a result of pro-
cesses being set into motion. It was based on this framing that I
reported the input gained from the front lines to management.
Union Representative
In terms of both preventing the recur-
rence of model certification application
issues and cementing our foundations, it is important for every-
one, including members of labor and management, to stop and
think, engage in ongoing communication with their colleagues
and supervisors, and use the insight gained therefrom to practice
introspection. Unfortunately, frontline organizations have not
been doing this effectively. If we do not examine why this is so, we
cannot hope to reach a fundamental resolution to this issue.
After the August 2024 labor–management council meeting,
we delved even deeper into the issues currently faced by various
workplaces and their causes. This investigation identified three
main themes that are acting as the underlying causes for a lot of
the issues we are seeing: the overburden resulting from the
demand for constant progress, the approach toward work of
focusing primarily on getting things done, and the abandonment
of communication. These are the issues that surfaced as we
advanced measures for preventing the recurrence of model
certification application issues.
These issues have become deeply ingrained throughout the
organization, and they are thus something that cannot be fixed
overnight. Fortunately, President Sato and Labor Union Chairman
Keisuke Kito have expressed their dedication to ongoing labor–
management efforts to steadily resolving the issues we face.
Kito
Preventing the recurrence of the previously mentioned
issues will require fundamental reforms to Toyota’s
workplace culture.
We have to be able to identify the difference between normal
operations and abnormalities and to swiftly address any abnor-
malities that are detected. These are the basics of manufacturing
and principles that Toyota has treasured since its founding.
If we cannot effectively perform these essential tasks, there
is no way that we will be able to make the ever-better cars that
customers expect.
Even as we talk here today, issues are occurring on the front
lines. As we seek to drive steady improvements, the labor union
will also endeavor to gather input from worksites to pinpoint
issues and formulate responses. Such initiatives are an area of
specific focus and will be continued going forward.
The issues we discussed today are complicated and deeply
rooted; they are not something for which we can find an immedi-
ate fix. Steadfast and exhaustive action will have to be taken
based on the conditions at individual workplaces if we are to see
improvements. This is the only way to truly prevent the recurrence
of model certification application issues. As we move forward, I
hope that labor and management will join forces to accelerate
efforts for building excellent workplaces where everyone is able
to feel motivated.
Sato
When we think about how best to promote communica-
tion, it is important we remember that we are all mem-
bers of team Toyota. I feel great pride in working at a company
where everyone is clearly aware of the fact that car-making is a
team effort.
This is why we have to remind ourselves that we are all on the
same team and to practice communication aimed at finding the
best way each of us can contribute to and ensure the success of
the team.
As a team, we can produce a wide variety of ideas, which will
make the team more competitive as a whole. This is something
that we should all strive to remain cognizant of.
We have ramped up our amount of human resource invest-
ments in comparison with initial plans. These investments are
being conducted with a focus on ensuring that they make contri-
butions not only within Toyota but also at dealers and suppliers.
This is because we recognize that teamwork is instrumental in
Toyota’s quest to make ever-better cars. For this reason, I am
committed to ongoing efforts to transform how we communicate
based on a reaffirmed understanding of the fact that Toyota is
able to advance with such momentum only because it is such a
big team.
Roughly one year has passed since we declared our intent to
cement our foundations, but we still have a long way to go. At the
heart of our efforts is culture reforms. Such reforms require dedi-
cation; we need to continue to advance our efforts, no matter
how small, through steadfast labor–management coordination.
As we go about this, we must never forget the basics of our
job. Making ever-better cars, this is the starting point for what we
do, and the way we go about doing this should be a key focus in
determining how we transform the way we communicate.
At the same time, I hope to make Toyota into a company at
which the cycle that propels us forward is fueled by the joy we
bring to customers. I look forward to transforming how we com-
municate to facilitate even stronger teamwork at team Toyota.
Let us work together to make Toyota a place where everyone
is happy, empowered, and encouraged to play an active role.
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Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Diversity, Equity, and Inclusion
Fundamental Approach
Toyota is working to transform from an automotive company into a mobility company by promoting continuous
innovation in existing areas while exploring new areas. To facilitate these efforts, we aim to ensure that
employees with diverse skills and values can exercise their abilities to the fullest.
Toyota does not tolerate any form of discrimination, whether on the basis of gender, age, nationality, race,
ethnicity, creed, religion, sexual orientation, gender identity, disability, marital status, or parental status. We
respect diverse lifestyles and workstyles and provide opportunities for all employees to contribute according
to their ambitions and abilities. We also strive to create open, harassment-free workplaces.
Women’s Participation in the Workplace
Although we have consistently striven to promote the professional participation and advancement of women
globally, we recognize that gender diversity remains an issue, particularly at Toyota Motor Corporation in
Japan, and we are implementing initiatives that include the following.
2002: Launch of initiatives centered on expanding and entrenching measures to support women who are bal-
ancing work and childcare
2012: Launch of initiatives focused on creating work environments that motivate and inspire women and on
supporting their participation, particularly through the cultivation of female managers
2020: Strengthening of career development measures, including mentoring activities and participation in
external programs
2021: Introduction of unconscious bias training for all internal management personnel and supervisors
2022: Start of diversity training, including basic courses and management courses
2023: Launch of a campaign led by senior management positioning the promotion of women’s participation in
the workplace as an important Companywide priority involving discussion and information sharing on
current conditions and challenges at meetings of the Sustainability Meeting and the acceleration of
concrete initiatives
Promotion of Female Employee Participation: Our Challenge and Course of Action (Toyota Motor Corporation)
Our Challenge
· Creation of a workplace environment that is comfortable and motivating for diverse employees
See “Ratios of Women in Various Positions at Business Entities by Country/Region (FY2024)” on page 116
Target
· Increase number of women in managerial positions in 2014 fourfold by 2025 and fivefold by 2030
Our Course of
Action
Hiring
• Maintain certain hiring rates for female new-graduate candidates (40% or above for
administrative positions and 10% or above for engineering positions) and promote
active hiring of women year-round
System Development
• Assembly of department- and in-house-company-specific promotion teams
• Regular reporting to Sustainability Meeting and discussion among management
Career Development
• Development and implementation of plans for individual employee development and
promotion of mentoring and internal and external networking
Culture Fostering
• Global women’s conferences, meetings with supervisors, etc.
Efforts to Empower People with Disabilities
We provide various work opportunities in a variety of workplaces for people with disabilities by setting up work
environments that allow them to fully leverage their individual attributes and abilities based on the concept
of a harmonious society in which all persons, with or without disabilities, work and live together.
For example, to help enable such individuals to utilize their abilities, we set up a consultation hotline that
ensures privacy and introduced a special holiday system that can be used by employees to receive medical
care. To ensure that people with disabilities are given fair opportunities, we dispatch sign language interpret-
ers, provide a variety of support tools, and make workplace improvements as needed. Toyota Motor
Corporation’s rate of employment of people with disabilities, including those serving at a special-purpose sub-
sidiary, was 2.51% as of June 2024.
Initiatives at Special-Purpose Subsidiary Toyota Loops
Toyota Loops Corporation began operation with employees with disabilities in April 2009. As of June 2024,
this company employed 437 such employees. Toyota Loops primarily handles office support work outsourced
from Toyota, such as internal printing, the collection and delivery of internal mail, and document digitalization.
In addition, some Toyota Loops employees participate in the development of assisted mobility vehicles, a
form of work and contribution uniquely available to people with disabilities. For example, during vehicle devel-
opment, wheelchair users have participated in evaluating the ease of getting in and out of vehicles and pro-
vided their opinions on aspects of the development of automated driving vehicles.
Support for the LGBTQ+ Community
To ensure respect for individuals’ sexual orientation and gender identity, Toyota promotes the development of
a corporate culture of proper understanding, recognition, and acceptance.
At Toyota Motor Corporation, the prohibition of discrimination or harassment targeting members of the
LGBTQ+ community has been incorporated into the employee behavioral guidelines, and we no longer require
new-graduate candidates to fill in their gender on job applications. We have also been advancing facility-
related measures, such as establishing an internal consultation hotline and gender-neutral restrooms.
Moreover, in July 2020, we introduced revised internal systems to allow employees in same-sex or common-
law marriages to use the same internal benefit systems (holidays, employee benefits, etc.) as those in mar-
riages legally recognized in Japan.
In addition, we require all employees and officers to receive internal training covering basic knowledge
about LGBTQ+ issues.
External Recognition
PRIDE Index
In November 2024, Toyota Motor Corporation was awarded a Gold rating in the PRIDE
Index 2023. The PRIDE Index was established by work with Pride, a Japanese volunteer
organization that supports the promotion and entrenchment of diversity management
initiatives related to sexual minorities.
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Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Diversity, Equity, and Inclusion
Initiatives at Major Global Bases
Toyota Motor Europe NV/SA
(Belgium)
Toyota Motor North America, Inc.
(United States)
Toyota Motor (China)
Investment Co., Ltd. (China)
Toyota do Brasil Ltda. (Brazil) and
Toyota Argentina S.A. (Argentina)
Toyota South Africa Motors (Pty.) Ltd.
(South Africa)
Companywide events organized during the week of
International Women’s Day (video message from
senior management, workshops, etc.)
Working couple support: Telecommuting system,
shortened workhour system, support in finding employ-
ment for spouses of employees temporarily trans-
ferred to Toyota Motor Europe
Women’s career development support: Mentorship
system, sponsorship system
Annual North American Women’s Conference, to which
all executive-level women and many high-potential
junior-level women, as well as male directors and
executives, are invited to attend for networking and
encouraging women’s participation and advancement
in the workplace
Nursing break of up to one
hour each day for female
employees who are
breast-feeding
Designation of
International Women’s
Day as a day for promot-
ing open conversation
about the challenges
women face in balancing
their professional and
personal lives
Healthy pregnancy program for pregnant employees
Guidance and advice related to health as well as infor-
mation sessions on breast-feeding and baby care
TSAM Women Leading the
Change workshops for encour-
aging women in manufacturing
positions to pursue higher-
level positions
Setting of employment
targets
Set childcare facilities at multiple operation sites to allow
flexible workstyles for employees taking care of their children.
Events sponsored by the Business Partnering Group (which
provides networking and educational opportunities)
Telecommuting system
Networking for promoting
gender diversity
Active hiring of promising
candidates to career positions
Unconscious bias awareness
training for all managers
Setting of targets for recruit-
ment and for management
positions
Unconscious bias aware-
ness training for all
managers
KPIs Related to the Promotion of Women’s Participation in the Workplace
Various Toyota business entities are implementing ongoing initiatives to promote
women’s participation and advancement in the workplace with the aim of achieving
consistent increases in the ratios of women in positions ranging from new recruits to
executive positions.
Ratios of Women in Various Positions at Business Entities by Country/Region (FY2024)
Ratios of women (%)
Average number of consecutive years of
recruitment
New hires
Full-time
employees
Managerial
positions
Director
positions
Men
Women
Global total*
25
14
11
7
12.6
10.0
Japan
19
14
3.7
19
16.3
13.9
North America
26
22
25
29
7.6
5.9
Europe
32
20
17
6
11.4
7.3
China
14
10
28
0
10.5
13.5
Asia-Pacific
23
7
19
2
14.9
12.3
Latin America
42
10
12
0
8.9
4.3
Africa
22
27
31
13
17.6
13.7
Unconscious bias awareness training for all managers
Setting of recruitment targets
Communication between human resource division and
management to promote internal diversity via employee
positioning
Mentor system to support female leaders
Soft-Landing Program to support employees returning
to work after childbirth
Support for child daycare costs for employees who
return to work early
Provision of essential school supplies to all employees
with children
* Data for companies in Japan and from 47 overseas companies
Toyota Motor Asia Co., Ltd.
(Thailand)
Nursing rooms
Women-only prayer room
Reserved parking area for
pregnant employees
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Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
We are promoting the empowerment of female employees as we
encourage active participation by all in order to maximize the
diverse talents, strengths, and abilities of each team member to
deliver better value to our customers.
Under the leadership of President Koji Sato, the empower-
ment of diverse human resources was positioned as a core theme
in 2023. Based on this theme, the Sustainability Meeting con-
venes once every two months to share and discuss the current
status, challenges, and progress of initiatives and to shape future
initiatives guided by these discussions.
Moreover, Toyota held the Global Women’s Conference in May
2024. The conference saw participation by some 160 individuals,
including President Sato, Chief Scientist Gill A. Pratt, and Chief
Sustainability Officer Yumi Otsuka as well as operating officers,
chief officers, female employees, and representatives from over-
seas business entities. The attendees engaged in discussions on
initiatives that could change how everyone at Toyota works and
achieves results, with the aim of realizing active participation
by all and creating a workplace that is even more conducive to
the contributions of women. These discussions are promoting
informed action. On the day of the conference, President Sato
explained his thoughts on the event as follows.
Thoughts on the Global Women’s Conference
In 2023, I put forth the promotion of wom-
en’s participation in the workplace as a
core sustainability theme, and I have voiced
my feelings on this theme on numerous
occasions.
We are already seeing various people
take action to transform the culture and
workstyles at workplaces across the
organization.
At the same time, I have received a lot of frank opinions from
people at Toyota.
For example, some have said that talk of “promoting women’s
participation in the workplace” makes it sound like women are not
already actively participating at Toyota. Others have mentioned
that, as we are supposed to be fostering a culture of active par-
ticipation by all, they could not understand why we are focusing
just on women. I have received such input from people across all
genders, and this has reminded me of the plurality of ways our
efforts can be received.
The diverse range of opinions people can have is exactly the
reason why it is so important for us to start by looking at the situ-
ation now when we are trying to assess how people may feel and
the issues we might face.
Ms. Otsuka proposed holding the Global Women’s Conference
as an opportunity to speak with everyone and gain a better
understanding of these matters.
This is an idea I could really get behind, and that is why I am
standing here today as a participant.
I hope that this conference will serve as the right jump-off
point we need for starting to think about how exactly we can
encourage contributions from diverse individuals.
Workplace Comfort and Motivation for Fostering
a Culture of Active Participation by All
I want Toyota to have a culture that promotes active participa-
tion by all.
We should be a company that allows diverse individuals to
feel empowered and to exercise their skills.
This requires a workplace environment that is both comfort-
able and motivating.
The reason I defined the promotion of women’s participation
in the workplace as a core sustainability theme was the retention
rate for women working at Toyota.
You see, while men have a 90% retention rate when looking
at all job types, the retention rate for women is only 70%.
I am confident that, if Toyota were to provide an environment
in which everyone felt comfortable in the workplace, regardless
of their gender, we would not see any significant difference in
retention rates.
After looking into the reasons behind this disparity, I was
made aware that many of our female employees begin to feel
concerns with regard to their work–life balance and career vision
during the course of developing their careers. These concerns can
then lead to the decision to leave the Company.
Such a situation points to the fact that we are not yet provid-
ing a workplace environment that is comfortable regardless of an
Diversity, Equity, and Inclusion
Global Women’s Conference
Global Women’s Conference
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Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
individual’s life stage.
A particularly large disparity is seen in retention rates by
gender for technical personnel. The reason for this disparity is
cited as being workstyle issues that affect individuals during the
period of their lives when they are seeking to balance their work
with childrearing.
We must address the pressing tasks of making our plants con-
ducive to the contributions of women and offering diverse work-
styles to ensure we can sustain our manufacturing foundations
going forward.
The issues to be tackled in addressing these tasks can vary by
workplace, and they might include issues pertaining to workplace
atmosphere, organizational structures, or systems and other
frameworks.
Our first step in developing a culture that promotes active
participation by all must be to address these issues and create an
environment in which everyone feels equally comfortable in the
workplace. In other words, we need to foster an environment in
which there is no difference in retention rates by gender.
I want everyone to join me in thinking about what we can do
to accomplish these objectives.
Emphasis on Valuing Individuality
I believe that it is okay for our contributions and motivations to
be diverse.
What is important is to place emphasis on valuing one’s
individuality.
The 1990s and 2000s were a time of continuous growth for
the Japanese automotive industry.
Back in the day, I too believed that the more I worked and the
harder I worked would inevitably lead to better products.
Today, however, the path we should take is not as clear.
Nevertheless, we must continue our quest to create new value
for the future as a mobility company.
Imagination will be more important than anything as we seek
to shape the future.
We do not necessarily have to work long hours to exercise the
imagination that enables us to envision new appealing forms of
mobility or think up possible ways for improving our workstyles.
Rather, the heightening of our imagination requires that we
turn a discerning eye toward society and toward ourselves.
The hint for our next breakthrough might not be found at
work; it could come to us during the course of our daily lives or
while engaged in activities we enjoy.
Toyota’s mission is “producing happiness for all.”
To accomplish this mission, we must continue to engage
actively with the diversity of our customers and of society.
This is why the ideas and imagination of employees with
diverse backgrounds and values are crucial to our transformation
into a mobility company.
Toyota is now in a prime position to promote diversity.
Under the leadership of Chairman Akio Toyoda, we developed
a clear and shared understanding of what makes us Toyota.
Because we have a shared understanding of our origins as an
an automobile manufacturer—that is, the quest to make ever-
better cars—and of our vision and values, we can allow everyone
the freedom to be diverse in how they act.
I think that talking with a lot of different people and acting is
one way to explore one’s individuality.
I hope that everyone will continue to act based on unwaver-
ing principles while exercising their individuality and seeking their
own motivations.
United Approach toward Learning and Action
If you think you have a good idea, it is important to act.
You will likely encounter issues while you act, but you can
address those as you continue to act. The ongoing process of
acting and addressing issues is sure to generate change.
I too want to listen to everyone and work together with you
all in tackling issues so that I can find the role I need to play.
Diversity, Equity, and Inclusion Global Women’s Conference
Following President Sato’s speech was a presentation by
Toyota’s Chief Scientist and Executive Fellow for Research
Gill A. Pratt, who offered a scientific explanation of diver-
sity and unconscious bias. In this presentation, he explained
how, based on research data, the differences between men
and women in general are not as large as the differences
seen between individuals of the same gender, illustrating
how important it is to respect the diversity of individuals.
The Global Women’s Conference also included discussions
of overseas case studies as well as panel discussions for shar-
ing best practices seen throughout Toyota’s global operations
and group discussions featuring participation by management.
The discussions of overseas case studies were led by a
woman who serves as a senior vice president of Toyota
Motor North America as well as her supportive male super-
visor. These leaders shared information on the struggles of
balancing one’s career with their children and how to find
one’s own unique approach toward leadership and career
development.
The panel discussions, meanwhile, were divided into dis-
cussions by subgroups on five topics: finding one’s own
approach toward leadership, continuing one’s career while
raising small children, communicating in a way that trans-
forms workplaces, utilizing one’s strengths to succeed, and
transforming diversity into strength (being a male sup-
porter). The frank exchange of opinions and deep examina-
tion of these topics by leaders and employees active in
Toyota’s global operations proved to be a stimulating expe-
rience for all that provided an opportunity to learn and
make new discoveries.
The insight gained through the conference is trans-
forming the day-to-day activities of individual employees
and guiding concrete action for creating workplace envi-
ronments that are comfortable and motivating for diverse
individuals of all genders.
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Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
119
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Health and Safety and Social Contribution Activities
Health and Safety
Fundamental Approach
Toyota aims to provide safe workplaces in which all people working for Toyota can maintain good physical and
mental health and continue to be energized and play active roles.
Health and safety policies and key performance indicators are formulated by the Company’s safety and
health supervising manager, and accordingly efforts are made based on these policies and indicators at all
workplaces in all regions.
Health Initiatives
With health as a top priority, Toyota implements health initiatives focused on prevention, including the promo-
tion of lifestyle disease prevention, mental health, and improvement activities to create more fulfilling,
employee-friendly work environments. Through health and productivity management, we aim to foster the
mutual growth of employees and the Company while increasing productivity through the active participation
of all of our employees.
To fulfill our mission of “producing happiness for all,” it is important for everyone at Toyota to be healthy
and energized and gain a sense of joy and happiness from being involved in automobile manufacturing. We
have defined health objectives to guide us in accomplishing these goals.
2010
2022
2030
Fostering of individual health awareness
Cultivation of workplaces at which
diverse individuals can feel empowered
Producing
happiness for all
Well-being
Development of people and
organizations that are less
prone to illnesses
Early diagnosis and treat-
ment of illnesses
See “Initiative for Safety” on page 105 of Toyota’s sustainability data book for FY2024
Toyota Motor Corporation (non-consolidated)
Health objectives
Background
Priority actions
Fostering of individ-
ual health
awareness
· Need for enhanced support frameworks to
include and accommodate everyone in current
era of aging populations and increased diversity
· Health improvement measures for senior citizens
· Systems for supporting individuals with disabilities or those balancing
work and medical treatment
· Measures for preventing occurrence or recurrence of mental health
issues
Cultivation of work-
places at which
diverse individuals
can feel empowered
· Need for workplace environment improvement
support to develop comfortable workplaces at
suppliers, overseas entities, and other Group
constituents to encourage active participation
by all
· Data-driven workplace improvement initiatives advanced through
coordination among workplace management
· Coordination among relevant parties (human resource divisions,
health insurance associations, hospitals, labor unions, suppliers, etc.)
to develop comfortable, diversity-respecting workplaces
Initiatives for Accomplishing Health Objectives
Safety Initiatives
Based on a policy of promoting health through mutual awareness-raising and the establishment and entrenchment
of a safety-focused work culture, Toyota implements activities based on the three pillars of safe people, safe work,
and safe places/environments. Toyota promotes worksite-rooted safety and health activities with the aim of ulti-
mately reaching and maintaining zero accidents at all worksites.
Three Pillars of Safety
1 Safe People
Promotion of development of human resources who are capable of predicting risks, complying with rules, and think-
ing and acting proactively
Leaders who take the initiative to always demonstrate a safety-first attitude are the foundation of our people-
based efforts. Safety educational programs are aimed at developing safety-oriented human resources based on
the experiences of our predecessors while reflecting changes in operations, an approach that encourages us to
review our daily awareness and behavior.
2 Safe Work (Risk Management)
Reduction and management of high-risk operations with
goal of lowering number of serious accidents to zero
In addition to promoting the 4Ss—seiri (organization),
seiton (orderliness), seiso (cleanliness), and seiketsu
(hygiene)—we assess workplace safety risks and use the
information gathered to standardize processes with
consideration for the ease of the actual work involved.
3 Safe Places/Environments
Development of positive and people-friendly processes, identification of issues, and quick decision-making
regarding response measures
Work environments are managed in accordance with statutory and regulatory environmental measurements.
Equipment-related measures are implemented in order of priority, as work environments are significantly
affected by production equipment used, season, and other factors.
See “Initiative for Safety” on page 105 of Toyota’s sustainability data book for FY2024
Social Contribution Activities
Fundamental Approach
In its social contribution activities, Toyota partners
with local communities to effectively utilize its resources
to advance initiatives in such areas as human capital
development*1 to aid in the enrichment and ongoing
development of society. We approach issues in specific
areas with a sense of ownership and take action on a
genchi genbutsu (on-site, hands-on experience) basis.
Furthermore, we actively coordinate with partners to
contribute to the resolution of a broader range of social
issues.
Toyota has identified the focus areas of “contribution
to a harmonious society,” “human capital development,”
and “community co-creation” as well as “mobility for all,”
which is the Company’s fundamental aim. In these areas,
we work with stakeholders to fulfill our mission of “pro-
ducing happiness for all” and contribute to the achieve-
ment of the United Nations Sustainable Development Goals.
*1 Human capital development: Efforts to develop the diverse and essential potential possessed by each individual
Examples of Social Contribution Activities
· Social contribution programs (contribution to a harmonious society, human capital development, and com-
munity co-creation)
· Promotion of employee volunteer activities (Toyota Volunteer Center)
· Support of activities undertaken by NPOs, NGOs, etc. (donations, sponsorships, etc.)
· Activities to promote understanding of automobile and mobility culture as well as Toyota’s corporate culture
(Toyota Kaikan Museum, Toyota Automobile Museum, etc.)
Social Contribution
Before
After
Total
Expenditures
Approx.
¥23.5 billion*2
Breakdown of Expenditures for Social
Contribution Activities by Area (FY2024)
*2 Figures are for Toyota Motor Corporation and its major subsidiaries
(64 companies). Results for major subsidiaries have been con-
verted to yen based on the average exchange rate for fiscal 2024.
Environment
9%
Traffic safety
7%
Human resource
development
38%
Society and
culture
14%
Other
32%
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Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
120
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Respect for Human Rights
Fundamental Approach
Toyota endorses the United Nations Guiding Principles on Business and Human Rights (UNGPs) and promotes
human rights activities based on these principles. Seeking the happiness of others is a part of Toyota’s found-
ing principles and was a driving force that led to the invention of the automatic loom, which can be considered
the beginning of Toyota. This spirit is still within us today. Guided by our mission of “producing happiness for
all,” we aim to be the best company in town, one that is both loved and trusted by people in every country and
every region in which we operate. The automotive industry is dependent on the support of various stakehold-
ers, including members of local communities; suppliers, dealers, and other business partners; and customers.
We will continue to protect the human rights of our employees, our customers, and all other individuals
involved in our business activities and to improve such protections to ensure that Toyota is viewed as a
necessary entity to these stakeholders and to society.
Toyota’s Human Rights Policy
Human Rights Due Diligence
To guide efforts to address human rights issues across the supply chain, the Toyota Supplier Sustainability
Guidelines contain provisions that clearly express our expectation for our suppliers to respect human rights. In
addition, Toyota provides information and support to potentially affected stakeholders by working together
with suppliers to conduct risk monitoring, tracking, and mitigation activities.
Furthermore, we work with NGOs and other external stakeholders to both understand social expectations
and assess our priorities from a third-party perspective. By practicing such human rights due diligence,*1 we
hope to increase transparency and ensure that corporate activities are fair and appropriate.
Toyota’s action taken for Forced Labour of Migrant Workers
(Statement on the Modern Slavery Acts)
Based on the United Kingdom’s Modern Slavery Act 2015 and similar legislation in other countries,*2 Toyota
issues statements in Japan in the form of Toyota’s action taken for Forced Labour of Migrant Workers
(Statement on the Modern Slavery Acts), a report on the initiatives and conditions pertaining to forced labor
of migrant workers at its domestic and overseas production facilities.
In this report, we describe Toyota’s commitment to compliance with the relevant laws and disclose infor-
mation on measures we have implemented to prevent modern slavery, including human trafficking, in either
our direct operations or across our supply chain.
Toyota’s action taken for Forced Labour of Migrant Workers (Statement on the Modern Slavery Acts)
Responses to Human Rights Issues Related to Migrant Workers—Participation in the Japan
Platform for Migrant Workers towards Responsible and Inclusive Society
Toyota has been participating in the Japan Platform for Migrant Workers towards Responsible and Inclusive
Society (JP MIRAI),*3 a multi-stakeholder framework for addressing issues faced by migrant workers in Japan,
since its establishment in 2020. As part of our participation in JP MIRAI, we have been involved in a consulta-
tion and grievance mechanism for migrant workers with the aim of tracking and addressing issues in a timely
manner. We also promote the use of this mechanism within the Company and at Group companies as well as
at our suppliers and dealers.
*1 Process for identifying, preventing, and mitigating negative human rights impacts
*2 Australia’s Modern Slavery Act 2018, etc.
*3 Organization comprising over 700 members, including private-sector companies, local government agencies and NPOs as well as academics, lawyers,
and various other stakeholders
Japan Platform for Migrant Workers towards Responsible and Inclusive Society
Human Rights Education
Toyota conducts the following training programs to facilitate accurate understanding regarding human rights
issues, the prohibition of discrimination, and open and honest communication among executives, employees,
and business partners.
General Human Rights
Targets
Details
Executives (Toyota Motor Corporation)
• Explanation of international human rights guidelines and associated expectations, responsibilities
required of companies, and recent key human rights issues
All employees (Toyota Motor Corporation)
• Education on corporate responsibilities and their scope based on international norms using positive and
negative examples to ensure protection of human rights in daily operations
Newly appointed overseas base managers
and human resource function employees to
be transferred to overseas affiliates
(including those at major suppliers)
• Sharing of examples of positive labor–management communications, past labor disputes, labor–man-
agement negotiations, recent human rights trends, international norms, and regulations
Purchasing function employees to be
transferred to overseas affiliates (Toyota
Motor Corporation)
• Training on human rights and other matters pertaining to building healthy labor–management relation-
ships at local suppliers to support everyday purchasing duties at overseas affiliates
Message from the CSO | Roundtable Discussion among Outside Officers | Dialogues with Shareholders and Investors | Corporate Governance | Risk Management and Compliance | Message from the CFO | Capital Strategies
Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
121
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Value Chain Collaboration
Fundamental Approach
Toyota is advancing activities based on its customer first policy through collaboration with suppliers and
dealers.
Toyota is steadily implementing sustainability initiatives founded on open and fair business practices. At
the same time, we collaborate with suppliers and dealers to improve quality and provide our customers with
safety and peace of mind as we strive to achieve a high level of customer satisfaction.
Supply Chains
Since its founding, Toyota has continued to collaborate with suppliers in its manufacturing operations. As part
of these efforts, Toyota has implemented its Basic Purchasing Policies on a global basis in accordance with
the spirit of mutual benefit based on mutual trust between suppliers and Toyota. We strive to maintain close
relationships with existing and new suppliers as we work together to promote our customer first policy.
When conducting business transactions, we conclude contracts that clearly stipulate provisions pertaining
to legal compliance, respect for human rights, and considerations for local and global environments.
Promotion Structure
The Purchasing Group, which is supervised by the chief officer and deputy chief officer for purchasing, spear-
heads value chain collaboration activities through close cooperation with relevant departments, including
those responsible for the environment, human resources, compliance, and sustainability. Directives and chal-
lenges for sustainability initiatives are reported to and discussed by the Sustainability Subcommittee.
Important projects are discussed by the Sustainability Meeting, and the Board of Directors supervises and
makes final decisions.
Compliance with the Toyota Supplier Sustainability Guidelines
Toyota Supplier Sustainability Guidelines
Toyota established the Toyota Supplier Sustainability Guidelines in 2009 to share the importance of sustain-
ability initiatives with suppliers and request that they conduct their business activities in line with said
guidelines.
As of March 2024, Toyota’s major domestic suppliers (approximately 1,000 companies) had endorsed the
principles of and become signatories to the Toyota Supplier Sustainability Guidelines. The guidelines stipulate
that tier 1 suppliers must expand the implementation of the guidelines to tier 2 suppliers and beyond to ensure
that these principles are disseminated and implemented throughout the supply chain.
The guidelines are also shared globally, as regional purchasing divisions apply them to overseas suppliers.
Inspections Based on Sustainability Surveys
(2024 Results)
Scope
Major domestic suppliers (approx. 1,000)
Focus
Policies, training programs, initiatives, etc., based on following themes:
· Corporate management
· Human rights and labor conditions
· Occupational health and safety
· Corporate ethics
· The environment
· Responsible supply chain management
· Responsible material sourcing
Improvement activities
Tabulated results to be communicated to relevant divisions after collection and confirmation by Toyota
Responses to Identified Issues
Should an issue be identified, we communicate with the supplier concerned and ask that supplier to make
improvements. Our stance has always been that the business relationship may be reconsidered if no improve-
ments are made. In addition, to prevent the occurrence of similar issues at other suppliers, we send notices
explaining such issues to suppliers and ask them to implement thorough preventive measures.
Toyota Supplier Sustainability Guidelines
Prevention of Bribery
In response to the globalization of operations and rising social expectations, Toyota has implemented its Anti-
Bribery Guidelines to ensure the thorough prevention of bribery and corruption. Moreover, Toyota is strength-
ening its preventive measures by promoting awareness of the guidelines among its suppliers.
Anti-Bribery Guidelines
Supplier Hotline
The supplier hotline has been set up to allow suppliers to report any violations of laws, regulations, rules, or
the Toyota Supplier Sustainability Guidelines while assuring anonymity.
See “Speak-up” on page 123 of Toyota’s sustainability data book for FY2024
Awareness-Raising Activities
Toyota is working to educate and raise awareness among buyers and all other employees. We request that
suppliers promote sustainability through their own, voluntary initiatives while also pursuing close coordination
to promote sustainability in a collaborative manner.
Major Initiatives by Toyota
Targets
Details
Toyota
All purchasing divi-
sion staff
Training on sus-
tainability for
those newly
assigned to pur-
chasing divisions
Training related to sustainability
Regular seminars
Regular seminars related to human rights, the environment, and other sustainability topics
Employees dis-
patched overseas
from purchasing
divisions
Training prior to
overseas dispatch
Labor relations training provided by human resource divisions
Suppliers
Domestic suppliers
Briefings
Recent seminar topics:
Dissemination of information on human rights due diligence (2024)
• Briefing sessions held on human rights due diligence trends and Toyota’s efforts to promote and
improve human rights awareness throughout the entire supply chain; sustainability surveys
conducted
Dissemination of information on carbon neutrality (2021–2024)
• Dissemination of specific emissions reduction calculation methods and tools to achieve CO2
reduction targets
• Presentation about items for reducing CO2 emissions
• Implementation of matching service to link companies providing emissions reduction solutions
with suppliers in need of emissions reductions
• Calculation of emissions reduction targets for suppliers (Scope 1, Scope 2, and Scope 3) and the
identification of green materials*1 as well as products and technologies that utilize eco-friendly
energy sources to help achieve these targets
Promotion of initiatives throughout supply chain by having tier 1 suppliers encourage tier 2 and lower
suppliers to participate in initiatives indicated above
*1 Materials, such as recycled plastic, that emit less CO2 than conventional options
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Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
122
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Voluntary Supplier Activities*2
Details
Corporate Executive
Round-table Conference
Conference for encouraging corporate executives to exercise leadership in advancing activities
Kyohokai Thematic Research
Group (Environment) and
Eihokai Sustainability Study
Group
Exchanges of information among suppliers to mutually enhance awareness; improve understanding of environmental and
carbon-neutral management, circular economies, carbon footprints, energy-saving measures, and other topics; and com-
pile insight collections to be distributed to and shared with all participants
Volunteer Activities
Volunteer activities carried out by Kyohokai and Eihokai
*2 Activities carried out by Toyota supplier associations Kyohokai and Eihokai
Kyohokai: Comprising mainly automotive parts and materials suppliers
Eihokai: Comprising mostly equipment, construction, and logistics service suppliers
Responsible Material Sourcing
Toyota carefully appraises the negative impacts of its business activities on human rights and the environment
and strives to identify, prevent, and mitigate risks.
A cross-functional task force has been established to promote close cooperation between related
divisions.
Major Potential Material-Related Risks*1 and Response Measures*2
: High risk
: Potential risk
: Response measures underway
Cobalt
Lithium
Nickel
Natural
graphite
Tin
Tantalum
Tungsten
Gold
Natural
rubber
Mica
Major poten-
tial risks
Child labor
Forced labor
Impacts on indigenous people / local communities
Environmental impacts (e.g., greenhouse gas emissions,
pollutants)
Response measures
• Implementation of measures to comply with European Union
battery regulations
• Dialogue with and surveys of major battery manufacturers
(since 2023)
• Survey on cobalt (2020)
• Identification of several smelters in the battery supply chain,
a major component that uses cobalt
• Annual surveys using questionnaire provided by RMI*3 (Conflict
Minerals Reporting Template*4) in accordance with the U.S.
Dodd-Frank Act (since 2013)*5
• Participation by Toyota Motor North America, Inc. (U.S.) in the
activities of the Conflict-free Sourcing Working Group and the
Automotive Industry Action Group working group on conflict
minerals originating from the Democratic Republic of the
Congo in cooperation with RMI
Example:
• Background surveys of smelters and refiners, encouragement
of smelters and refiners to participate in the Responsible
Minerals Assurance Process
• Formulation of Policy for Sustainable Natural Rubber
Procurement*6 to prevent deforestation and ecological
changes in the natural rubber supply chain
• Surveys using the questionnaire provided by RMI (Extended
Minerals Reporting Template*7) (since 2024)
Dealers
Dealers are at the forefront of the implementation of Toyota’s customer first policy. Toyota and its dealers
share the value of its products and services and advance united efforts to enhance customer satisfaction
based on a strong relationship of trust through close two-way communication as partners.
Based on a “Customer First, Dealer Second, Manufacturer Third” approach, Toyota works alongside dealers
to meet customer expectations and raise the level of customer satisfaction. We believe that, through these
efforts, we can achieve growth for both dealers and Toyota.
Support for the Compliance Activities of TNDAC*1 and Dealers (Japan)
Details
TNDAC
initiatives
Promotion of efforts by dealers using various inspection tools and Legal Compliance Manual*2 in accordance with TNDAC’s annual compli-
ance initiative schedule
Explanation of and checklists related to the following laws, deployment of various inspection tools, etc.
— Laws related to dealers’ duties, including sales negotiations and responses to customers (Act on the Protection of Personal Information,
Act against Unjustifiable Premiums and Misleading Representations, Copyright Act, Consumer Contract Act, Insurance Business Act,
Installment Sales Act, Act on Specified Commercial Transactions, Act on Securing Parking Spaces for Motor Vehicles, Civil Code, and
Penal Code)
— Laws related to safety and the environment (Road Transport Vehicle Act and Act on Recycling of End-of-Life Automobiles)
— Laws related to labor and employment (Labor Standards Act, Industrial Safety and Health Act, Act on Equal Opportunity and Treatment
between Men and Women in Employment, and laws and ordinances related to harassment)
— Laws related to transactions (Act on Prohibition of Private Monopolization and Maintenance of Fair Trade and Act against Delay in
Payment of Subcontract Proceeds, etc. to Subcontractors)
General inspections of all dealers (self-inspections) related to designated service maintenance (every June to August since 2020)
• Addition of body paint (sheet metal paint) inspections to designated maintenance services (since 2023)
Operation verification activities by dealer groups for Toyota dealers (since April 2024)
• Encouragement of companies to create operation verification teams in dealer groups and conduct regular checks to verify that operations
are being properly carried out in line with legal requirements and company policies and procedural guidelines in accordance with business
processes
• Provision of basic guides (detailed/excerpted versions), checklist items, and sample confirmation documents and checklists
TNDAC Helpline
• Repeated notices to dealers and employees to prevent and quickly detect any legal or regulatory violations
Support from
Toyota
Implementation of following initiatives in response to designated vehicle maintenance violations and improper handling of personal infor-
mation of customers by dealers (since fiscal 2022)
• Compliance seminars for dealer representatives and other personnel
• Support for improvement activities at dealers by disseminating Toyota Production System (TPS) know-how and holding training sessions
• Support for dealers’ initiatives through distribution of Privacy Governance Guidebook reflecting amendments of Act on the Protection of
Personal Information promulgated in April 2022
Dissemination of Toyota’s Human Rights Policy to dealers
• Issuance of requests to dealers to ensure appropriate management of non-Japanese technical internship trainees and creation of harass-
ment-free workplaces
*1 Toyota National Dealers’ Advisory Council (TNDAC), an organization comprising Toyota dealers in Japan
*2 A set of tools to support voluntary legal compliance activities by dealers
Support for the Improvement of Customer Satisfaction and Employee Satisfaction to Enhance the
Management of Domestic Dealers
Details
Support from
Toyota
Provision of customer satisfaction survey system to dealers and implementation of support activities according to status of each dealer’s
initiatives to improve customer satisfaction
• Collection and sharing of examples of dealer initiatives that are useful for improving customer satisfaction; creation of opportunities for
information exchange among dealers
Provision of workplace environment surveys for dealers and recommendation to dealers they conduct periodic surveys
• Regular holding of Ever-better Company Building Workshops to promote application of results of workplace environment surveys at
dealers
• Introduction of information website and consultation service (JP-MIRAI) for migrant workers in Japan
See “Initiatives for Migrant Labor (Forced Labor)” on page 63 of Toyota’s sustainability data book for FY2024
Value Chain Collaboration
*1 Table created based on information from “Material Change” (Drive
Sustainability, Responsible Minerals Initiative, Dragonfly Initiative, and
other sources)
*2 External affiliated organizations (year joined)
•
Responsible Business Alliance (RBA) (2024)
• Global Platform for Sustainable Natural Rubber (GPSNR) (2019)
*3 Responsible Minerals Initiative
*4 Please refer to the following website for more information on the
Conflict Minerals Reporting Template.
https://www.responsiblemineralsinitiative.org/reporting-templates/
cmrt/
*5 Please refer to the following website for Toyota’s conflict minerals
reports.
https://global.toyota/en/ir/library/sec/#conflict-minerals
*6 Please refer to “Initiatives with Suppliers” on page 14 of Toyota’s
sustainability data book for fiscal 2024 for more information on the
Policy for Sustainable Natural Rubber Procurement.
*7 Please refer to the following website for more information on the
Extended Minerals Reporting Template.
https://www.responsiblemineralsinitiative.org/reporting-templates/emrt/
See “Human Rights Due Diligence” on page 62 of Toyota’s sustainability
data book for FY2024
Message from the CSO | Roundtable Discussion among Outside Officers | Dialogues with Shareholders and Investors | Corporate Governance | Risk Management and Compliance | Message from the CFO | Capital Strategies
Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
123
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Vehicle Safety
Fundamental Approach
The development of safe vehicles is of undeniable importance for Toyota
to achieve its ultimate goal of eliminating traffic accident casualties. At
the same time, however, it is crucial to educate drivers, pedestrians, and
individuals and to install traffic safety infrastructure, including traffic sig-
nals and roads.
To achieve a safe mobility society, Toyota believes it will be important
to adopt an integrated three-pronged approach involving people, vehicles,
and the traffic environment. It will also be vital for us to pursue real-world
safety by learning from actual accidents and incorporating that knowl-
edge into vehicle development.
Toyota has defined its Integrated Safety Management Concept as the
basic philosophy behind its technologies for eliminating traffic accident
casualties and is moving forward with the development of technologies
based on this concept.
Integrated Safety Management Concept
Toyota provides optimized driver support for safety at every stage of driv-
ing, from parking to normal operation, the moment before a collision,
during a collision, and post-collision emergency response. We also aim to
enhance safety by reinforcing links between vehicle safety systems, rather than thinking about each system as
a separate component. These are the approaches behind our Integrated Safety Management Concept.
Preventive Safety
The Toyota Safety Sense system packages multiple preventive safety functions that help reduce serious
traffic accidents with the potential to cause death or injury. These functions include Pre-Collision Safety,
which assists in avoiding and mitigating damage from collisions with cars in front of a vehicle or with pedes
trians; Lane Departure Alert, which helps prevent accidents caused by a vehicle leaving its current lane; and
Automatic High Beam, which helps ensure optimal forward visibility during nighttime driving.
Since its market launch in 2015, Toyota Safety Sense has been installed in more than 50 million vehicles
globally (as of October 2024). Toyota Safety Sense is now available on nearly all passenger car models (as
standard or option) in the Japanese, U.S., and European markets. It has also been introduced in a total of 144
countries and regions, including such key markets as China, other select Asian countries, the Middle East, and
Australia.
Collision Safety
Collision safety measures combine vehicle bodies that absorb the energy of collisions with devices that
provide support to protect drivers, passengers, and pedestrians and thereby minimize collision damage.
In the pursuit of world-leading safety, Toyota has formulated a target related to collision safety perfor-
mance called the Global Outstanding Assessment (GOA) and developed a collision safety body structure and
passenger protection devices in 1995. Since then, Toyota has continued to evolve GOA, striving to improve the
real-world safety performance of its vehicles in a wide variety of accidents.
To analyze vehicle-related injuries, Toyota collaborated with Toyota Central R&D Labs., Inc., to develop the
Total Human Model for Safety (THUMS), a virtual human body model. THUMS is being used in the research and
development of a variety of safety technologies, including seat belts, airbags, and other safety devices, as
well as vehicle structures that mitigate injuries in accidents involving pedestrians. Toyota made the THUMS
software available on its website free of charge in January 2021, and the Company is currently exploring
future applications for this software in automotive assessments, an area where virtual evaluations are gaining
momentum.
Emergency Response
Time is of the essence when it comes to responding to an accident or medical emergency. In the event of an
accident or medical emergency, Toyota’s HELPNET® emergency reporting system service contacts a dedicated
operator that then contacts police or fire services to ensure the rapid dispatch of emergency vehicles.
Moreover, HELPNET® automatically contacts an operator when the airbags deploy and supports D-Call Net®, a
service that makes quick deployment decisions for air ambulances.
Automated Driving Technologies
Toyota has been engaged in the research and development of automated driving technologies since the
1990s. The Mobility Teammate Concept is an automated driving concept unique to Toyota that is designed to
enhance communication between drivers and their cars, enabling them to assist one another in coordinated
driving as companions. Rather than cars taking over driving from people and replacing them, drivers and cars
act as partners to protect one another so that drivers can enjoy the experience of driving while deferring to
automated driving at times, achieving truly safe, secure, and unrestricted mobility.
The Lexus LS and Mirai models launched in April 2021 are equipped with Toyota/Lexus Teammate state-
of-the-art driving assist technology, with some grades including Advanced Drive, a system that assists driving
on motor-vehicle-only roadways. The Advanced Drive onboard system will accurately recognize the vehicle’s
surroundings, make decisions, and assist driving under the driver’s supervision according to actual traffic con-
ditions. This system can keep the vehicle in its lane, maintain the appropriate distance from other vehicles,
navigate a lane split, change lanes, and overtake other vehicles until leaving the motor-vehicle-only roadway
for the driver’s destination. The system contributes to high levels of safety and peace of mind, reducing driver
fatigue and providing a pleasant journey to the driver’s destination.
Deep learning and other AI technologies support driving by predicting and responding to a wide variety of
situations that could occur when driving. In addition, Advanced Drive uses software updates, allowing cars to
stay up to date with the latest software via either a wireless or wired connection.
Cars have many uses, and driver needs continue to diversify. Accordingly, Toyota is advancing research and
development of automated driving technologies not only for personally owned vehicles but also in the field of
mobility as a service (MaaS) for people and goods. Toyota was one of the first companies to launch advanced
automated driving technology for vehicles sold to corporate customers. Data gathered from these vehicles is
being collected, analyzed, and fed back into development to further evolve automated driving technologies.
Traffic Safety Awareness-Raising Initiatives
Toyota conducts traffic safety awareness-raising initiatives targeting drivers and pedestrians to help prevent
traffic accidents.
One such initiative for drivers is the Toyota Driver Communication safe driving technique seminar held
periodically at Toyota Safety Education Center Mobilitas, which is located on the grounds of Fuji Speedway.
For pedestrians, in cooperation with Toyota dealers across Japan, Toyota has been donating traffic safety
teaching materials to kindergartens and nursery schools nationwide since 1969.
Accident investigation
and analysis
Investigation and analy-
sis of actual accidents
Development
and assessment
Evaluation of
actual vehicles
to increase
levels of safety
and incorpora-
tion of preven-
tive technologies
into vehicles
People
Traffic safety
awareness
raising
through lec-
tures, etc.
Vehicles
Development
of technolo-
gies for acci-
dent
avoidance and
driver/passen-
ger protection
in collisions
Traffic
environment
Provision of
information
on traffic con-
gestion and
maintenance
and manage-
ment of traf-
fic lights,
roads, etc.
Simulations
Accident simu-
lation to
develop pre-
ventive
measures
Pursuit of Real-World Safety
Cycle of
Pursuing
Real-World
Safety
Message from the CSO | Roundtable Discussion among Outside Officers | Dialogues with Shareholders and Investors | Corporate Governance | Risk Management and Compliance | Message from the CFO | Capital Strategies
Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
124
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Vehicle Safety
Commitment to Traffic Safety and Activities of the Tateshina Meeting and Subcommittees: Transforming Passion into Action
Tateshina Meeting Subcommittees and Participating Companies
Subcommittee
Participating Entities
Data utilization and visualization of dan-
gerous locations subcommittee
Safe driving support for the elderly
subcommittee
New awareness-raising activities for
children subcommittee
Bicycles and motorbikes subcommittee
Overseas subcommittee
The Tateshina Meeting, held during the summer festival, was
inaugurated in 2019 in response to then-President Akio
Toyoda’s insistence that safety technology can only contribute
to society if it is widespread and that such an endeavor calls
for partnerships, rather than just competition. The meeting
serves as a forum for discussion and partnership building aimed
at eliminating traffic accident fatalities. In 2023, at the second
such meeting, Toyoda expressed his desire to make the day an
occasion to think first and foremost about safety. This was also
the meeting that gave rise to Tateshina Meeting subcommit-
tees for advancing concrete initiatives.
Today, these subcommittees are implementing initiatives
based on five themes: data utilization and visualization of dan-
gerous locations; safe driving support for the elderly; new
awareness-raising activities for children; bicycles and motor-
bikes; and overseas. A total of 170 members from 39 compa-
nies and other entities (as of November 30, 2024) are
promoting cross-organizational coordination to contribute to
reductions in the number of traffic accident victims through
initiatives focused on people, vehicles, and traffic
environments.
In the verdant foothills of Mt. Tateshina in Chino City, Nagano Prefecture, is nestled Shoko-ji Temple.
Shoko-ji Temple was established by Toyota and Toyota dealers in 1970 as a site to pray for victims of traffic accidents and for the elimination
of future accidents, as traffic accidents are considered a leading cause of death in Japan. Since then, every year, on July 17 and 18, members of
Toyota’s senior management and representatives from dealers throughout Japan gather at Shoko-ji Temple for a summer festival, offering
prayers for the safety of all drivers.
The 54th annual festival was held in 2024. At this gathering, Toyota Chairman Akio Toyoda and President Koji Sato, together with other
attendees, lit candles around the temple grounds as a prayer for traffic accident victims.
Message from the CSO | Roundtable Discussion among Outside Officers | Dialogues with Shareholders and Investors | Corporate Governance | Risk Management and Compliance | Message from the CFO | Capital Strategies
Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
125
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Quality and Information Security
Quality
Fundamental Approach
The origins of Toyota’s customer first and quality first principles lie in the Toyoda Principles, which
embody the thinking of Sakichi Toyoda, and the spirit of auditing and improvement espoused by Kiichiro
Toyoda. Since its founding, Toyota has continued to build a corporate culture that focuses particular
attention on the quality that provides joy to customers and the pursuit of kaizen (continuous improve-
ment) through an emphasis on genchi genbutsu (on-site, hands-on experience). All employees are
expected to maintain a keen awareness of potential issues and exercise a sense of ownership as they
make ongoing efforts to pursue kaizen and collaborate closely with personnel in other fields in order to
enhance customer safety, peace of mind, and satisfaction.
Toyota sees quality as the combination of product quality, sales and service quality, and, as the
foundation supporting these, the quality of the work performed by each employee.
We believe that products and services capable of gaining the confidence of customers can be cre-
ated only when all employees involved in all processes—ranging from development, purchasing, pro-
duction, and sales to after-sales services—build quality into their work, coordinate with other
functions, and implement quality assurance cycles.
Quality Assurance Frameworks
Fostering of Awareness and Corporate Culture
To foster a corporate culture in which each member is committed to high quality, Toyota works to
develop human resources and improve work quality by holding quality awareness promotion events for
all employees every year and by providing position-specific quality assurance education. Furthermore,
February 24, the anniversary of the day that then-President Akio Toyoda attended the U.S.
Congressional hearings held to investigate the series of recall issues that occurred in 2010, has been
designated Toyota Restart Day. We have created mechanisms and are taking steps to raise awareness
in order to continuously communicate the lessons learned from the series of recall issues.
In 2014, Toyota established the Customer Quality Learning Center as a crucial education facility
for conveying the experiences and lessons learned from the series of recall issues to future genera-
tions of employees. Recent quality issues are added to update the center’s program every year and
maintain focus on the lessons we have learned. In addition, individual plants and global sites have set
up their own customer quality learning centers as part of efforts to ensure employees in all regions and
at all plants fully understand the importance of quality.
Information Security
Fundamental Approach
Cyberattacks are growing increasingly more sophisticated and complex. These attacks target areas of
companies including confidential information, information systems, and plant and vehicle control
system networks, such as those for onboard devices, as well as supply chains. Toyota strives to protect
information assets against the threat and risks of cyberattacks in order to ensure customer safety and
peace of mind. We implement measures to prevent information leakage based on our Information
Security Policy.
Information Security Policy
Information Security Initiatives
Toyota conducts inspections and audits based on its All Toyota Security Guidelines (ATSG) to prevent
leaks of confidential information and protect information assets from cyberattacks.
ATSG ensures information security through a multi-faceted approach encompassing organizational
management, human resource management, technical security, physical security, and incident and
accident response.
ATSG is revised periodically to adapt to the latest environmental changes. By annually inspecting
the information security initiatives that are being implemented in line with ATSG at consolidated sub-
sidiaries and other Group companies, Toyota works to ensure the continuous maintenance and
improvement of their information security provisions. Furthermore, a specialized team regularly con-
ducts on-site audits of Group companies to check responses to ATSG surveys and confirm the status of
the implementation of physical security measures at each company.
In terms of automobile-related initiatives, Toyota is a member of the automotive information shar-
ing and analysis centers (Auto-ISACs) of Japan and the United States. Auto-ISACs are frameworks for
sharing knowledge related to information security. Toyota actively utilizes these frameworks to obtain
up-to-date information on cases that occur within the automotive industry and put this information
into use in its development activities.
Information Leaks and External Attack Preparedness Measures
At Toyota, a specialized team has been assembled to perform information gathering and monitoring as
part of preparedness measures in response to information leaks and external attacks. When problems
arise, a response team, which includes members of management, is formed to address the situation
promptly and appropriately.
The specialized team conducts training at least once a year based on simulating increasingly com-
plex and sophisticated threats and prepares procedure scenarios for rapid recovery to ensure readiness
in case of a large-scale incident.
In addition, we receive third-party evaluations based on NIST SP800-82/53, ISO 27001/27002,
IEC 62443, and other standards regarding the status of security measures pertaining to management
and technical aspects of security systems. We implement measures to address problems identified
through these evaluations as needed to enhance our information security.
Production
• Manufacturing quality assurance
• Process maintenance and control, etc.
Purchasing
• Verification of supplier capabilities
• Conclusion of business contracts, etc.
Sales and After-Sales Services
• Gathering of market quality information
• Dealer education and instruction
• Service parts warranty, etc.
Logistics
• Establishment of and instruction on transportation
standards
• Quality deterioration prevention, etc.
Development
• Basic product plan formulation
• Design quality assurance
• Prototype evaluation, etc.
Product Planning
• Product plan formulation
• Development target formulation
• Quality target formulation, etc.
Production Preparations
• Process and equipment planning
• Process capacity acquisition
• Inspection method establishment and measurement
of initial products, etc.
Inspection
• Inspection planning and implementation
• Checking and maintenance of inspection tools, equip-
ment, etc.
Quality Assurance
(Auditing and Improvement)
Message from the CSO | Roundtable Discussion among Outside Officers | Dialogues with Shareholders and Investors | Corporate Governance | Risk Management and Compliance | Message from the CFO | Capital Strategies
Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
126
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Intellectual Property and Privacy
Intellectual Property
Fundamental Approach
Toyota strives to enhance its technological prowess and the appeal of its products, both consistent
sources of competitiveness, through a constant commitment to forward-looking research and devel-
opment. At the core of the products it creates through this research and development lies intellectual
property, including inventions, know-how, and brands. This intellectual property constitutes an impor-
tant management resource. By ensuring our intellectual property is appropriately protected and uti-
lized, we endeavor to contribute to society.
Intellectual Property Activities
Toyota advances intellectual property activities in line with management priorities in order to contrib-
ute to the future of the mobility society. For example, we are focusing resources on such areas as
carbon neutrality, including the development of electrified vehicles and batteries, and on software and
connected initiatives, including connected and automated driving technologies. We are also redoubling
efforts to obtain and utilize intellectual property licenses in these areas to strengthen our future
competitiveness.
Promotion Structure
With intellectual property functions at its R&D centers in Japan, the United States, Europe, and China,
Toyota supports technological development globally through the organic and systematic coordination
of research and development and intellectual property activities. We work in collaboration with
approximately 110 highly capable law firms around the world to collect intellectual property informa-
tion and respond appropriately to any intellectual property disputes that may arise in specific coun-
tries or regions.
Also, we established the Intellectual Property Management Committee to facilitate close coordi-
nation between management, R&D, and intellectual property functions. The members of the commit-
tee discuss and make decisions on matters related to obtaining and utilizing important intellectual
property conducive to management as well as policies for responding to management risks related to
intellectual property.
Intellectual Property Activity Achievements
Toyota files approximately 15,000 patent applications in Japan and overseas each year and has regis-
tered approximately 9,000 patents. In 2022, Toyota was the holder of the most patents among car
manufacturers in Japan, the United States, and other countries.
Privacy
Fundamental Approach
Based on its customer first policy, Toyota complies with the relevant laws and regulations of the coun-
tries and regions in which it operates and respects privacy as a responsible member of international
society. By appropriately managing and correctly utilizing information, Toyota strives to make ever-
better cars and contribute to the enrichment of communities and of the greater society.
Specifically, based on the Toyota Code of Conduct and the basic policy for the protection of per-
sonal information established in relevant countries and regions, we implement a privacy governance
framework centered on the appropriate management and protection of personal information and
other data related to privacy. While maintaining compliance with the Act on the Protection of Personal
Information and other laws and regulations, Toyota strives to utilize information to address social
issues and provide better products and services.
Toyota Code of Conduct (Personal Information)
Basic Policy for the Protection of Personal Information (in Japanese only)
Privacy
Code of Conduct
Customer first
Quality first
Product and
experience
Compliance
Stakeholders
Human resource
development
Promote a corporate culture that respects privacy via continuous training and
education
Electrified vehicles
14%
Batteries
18%
Batteries
7%
Electrified
vehicles
18%
Automated
driving
3%
Automated
driving
5%
Connected
technologies
1%
Connected
technologies
9%
Other vehicle
technologies
(engine, body,
chassis, etc.)
75%
Other vehicle
technologies
(engine, body,
chassis, etc.)
50%
Breakdown of
Registered Patents
by Technological
Field in 2012
Breakdown of
Registered Patents
and Patent
Applications Filed by
Technological Field
in 2023
Carefully and sincerely listen to and consider consumer feedback on privacy issues
Practice Privacy by Design by taking privacy considerations into account early in the
development and operation of products and services
Use consumer personal information responsibly to develop products and services
tailored to the consumer with the goal of achieving consumer happiness and
satisfaction
Ensure that personal information is managed and processed throughout the enter-
prise in a manner that complies with applicable laws and regulations
By cooperating and coordinating on privacy issues across all business functions
throughout the enterprise, work to create and sustain an appropriate personal
information management system
Message from the CSO | Roundtable Discussion among Outside Officers | Dialogues with Shareholders and Investors | Corporate Governance | Risk Management and Compliance | Message from the CFO | Capital Strategies
Environmental Initiatives (Disclosure Based on TCFD Recommendations) | Human Resource Development | Diversity, Equity, and Inclusion | Health and Safety and Social Contribution Activities | Respect for Human Rights
Value Chain Collaboration | Vehicle Safety | Quality and Information Security | Intellectual Property and Privacy
127
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Board of Directors and Audit & Supervisory Board Members | Operating Officers and Organizational Structure | Overview of Operations | History | Financial Summary | Corporate Information and Stock Information
Board of Directors and Audit & Supervisory Board Members (As of February 2025)
Brief career summary
Apr.
1984
Joined Toyota Motor Corporation
Jun. 2000
Member of the Board of Directors of Toyota Motor Corporation
Jun.
2001
Chief Officer of the Asia and China Operations Center of Toyota Motor
Corporation
Jun. 2002
Managing Director of Toyota Motor Corporation
Jun. 2003
Senior Managing Director of Toyota Motor Corporation
Jan. 2005
Chief Officer of the Asia, Oceania & Middle East Operations Group
Chief Officer of the China Operations Group of Toyota Motor
Corporation
Jun. 2005
Executive Vice President of Toyota Motor Corporation
Representative Director in Charge of IT & ITS, etc., of Toyota Motor
Corporation
Jun. 2009
President of Toyota Motor Corporation
Apr.
2023
Chairman of Toyota Motor Corporation (to present)
Akio Toyoda
Chairman of the Board
of Directors
Male
May 3, 1956
Position and areas of
responsibility
Chairman of the Board of
Directors
Brief career summary
Apr.
1987
Joined Toyota Motor Corporation
Apr.
2014
Executive General Manager of Toyota Motor Corporation
Apr.
2015
Managing Officer of Toyota Motor Corporation
Jan. 2020
Operating Officer of Toyota Motor Corporation
President of Mid-Size Vehicle Company of Toyota Motor
Corporation (to present)
Feb.
2021
President of CV Company of Toyota Motor Corporation
Apr.
2023
Operating Officer and Executive Vice President of Toyota Motor
Corporation
Jun.
2023
Member of the Board of Directors, Operating Officer and
Executive Vice President of Toyota Motor Corporation
(to present)
Hiroki Nakajima
Member of the Board
of Directors
Male
April 10, 1962
Position and areas of
responsibility
Chief Technology Officer
Brief career summary
Apr.
1986
Joined Toyota Motor Corporation
Apr.
2015
Managing Officer of Toyota Motor Corporation
Apr.
2017
Chief Executive Officer, East Asia & Oceania Region of Toyota
Motor Corporation
Jan.
2019
Operating Officer of Toyota Motor Corporation
Jun. 2020
Regional CEO of Asia Operations of Toyota Motor Corporation
Apr.
2022
Operating Officer of Toyota Motor Corporation
President of Business Planning & Operation of Toyota Motor
Corporation (to present)
Apr.
2023
Operating Officer, Executive Vice President of Toyota Motor
Corporation
Jun.
2023
Member of the Board of Directors, Operating Officer and
Executive Vice President of Toyota Motor Corporation
(to present)
Yoichi Miyazaki
Member of the Board
of Directors
Male
October 19, 1963
Position and areas of
responsibility
Chief Financial Officer
Chief Competitive Officer
Member of the Executive
Appointment Meeting
Member of the Executive
Compensation Meeting
Brief career summary
Apr.
1977
Joined Toyota Motor Sales Co., Ltd.
Jun.
2007
Managing Officer of Toyota Motor Corporation
Sep. 2007
President of Toyota Motor North America, Inc.
Apr.
2012
Senior Managing Officer of Toyota Motor Corporation
Apr.
2013
Chief Officer of the External Affairs & Public Affairs Group of
Toyota Motor Corporation
Jun.
2015
Member of the Board of Directors and Senior Managing Officer
of Toyota Motor Corporation
Apr.
2017
Vice Chairman of Toyota Motor Corporation (to present)
Shigeru Hayakawa
Vice Chairman of the
Board of Directors
Male
September 15, 1953
Position and areas of
responsibility
Chief Privacy Officer
Chairman of the Executive
Appointment Meeting
Chairman of the Executive
Compensation Meeting
Brief career summary
Sep. 1988
Joined DCA Design, U.K.
Nov.
1989
Joined ILI Design Inc., Japan
Sep.
1994
Joined Toyota Motor Corporation
Jul.
2016
President of Toyota Europe Design Development S.A.R.L.
Jan.
2018
Executive General Manager of Toyota Motor Corporation
Apr.
2023
Operating Officer of Toyota Motor Corporation
Jun.
2023
Member of the Board of Directors, Operating Officer of Toyota
Motor Corporation (to present)
Simon Humphries
Member of the Board
of Directors
Male
March 30, 1967
Position and areas of
responsibility
Chief Branding Officer
Brief career summary
Apr.
1992
Joined Toyota Motor Corporation
Apr.
2017
Executive General Manager of Toyota Motor Corporation
Jan. 2020
Operating Officer of Toyota Motor Corporation
President of Lexus International Co. of Toyota Motor Corporation
Sep. 2020
President of GAZOO Racing Company of Toyota Motor
Corporation
Jan.
2021
Operating Officer of Toyota Motor Corporation
Apr.
2023
Operating Officer and President of Toyota Motor Corporation
Jun.
2023
Member of the Board of Directors, Operating Officer and
President of Toyota Motor Corporation (to present)
Koji Sato
President, Member of
the Board of Directors
Male
October 19, 1969
Position and areas of
responsibility
Chief Executive Officer
128
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Board of Directors and Audit & Supervisory Board Members | Operating Officers and Organizational Structure | Overview of Operations | History | Financial Summary | Corporate Information and Stock Information
Board of Directors and Audit & Supervisory Board Members
Brief career summary
Apr.
1981
Joined Ministry of International Trade and Industry
Jul.
2010
Director-General of the Industrial Science and Technology
Policy and Environment Bureau, Ministry of Economy, Trade and
Industry
Sep.
2012
Director-General of the Manufacturing Industries Bureau,
Ministry of Economy, Trade and Industry
Jun.
2013
Director-General of the Economic and Industrial Policy
Bureau, Ministry of Economy, Trade and Industry
Jul.
2015
Vice-Minister of Ministry of Economy, Trade and Industry
Jul.
2017
Retired from Ministry of Economy, Trade and Industry
Aug.
2017
Special Advisor to the Cabinet
Jun.
2018
Retired as Special Advisor to the Cabinet
Member of the Board of Directors of Toyota Motor Corporation
(to present)
Ikuro Sugawara
Member of the Board
of Directors
Male
March 6, 1957
Position and areas of
responsibility
Member of the Executive
Appointment Meeting
Member of the Executive
Compensation Meeting
Outside
Independent
Brief career summary
Apr.
1984
Joined The Mitsui Bank Limited
Apr.
2012
Executive Officer of Sumitomo Mitsui Banking Corporation
Apr.
2014
Managing Executive Officer of Sumitomo Mitsui Banking
Corporation
Mar.
2017
Director and Managing Executive Officer of Sumitomo Mitsui
Banking Corporation
Apr.
2017
Director and Senior Managing Executive Officer of Sumitomo
Mitsui Banking Corporation
Apr.
2018
Senior Managing Corporate Executive Officer of Sumitomo
Mitsui Financial Group, Inc.
Director and Senior Managing Executive Officer of Sumitomo
Mitsui Banking Corporation
Apr.
2019
Director and Deputy President of Sumitomo Mitsui Financial
Group, Inc.
Deputy President and Executive Officer of Sumitomo Mitsui
Banking Corporation
Apr.
2023
Deputy Chairman of Sumitomo Mitsui Banking Corporation
Jun.
2023
Member of the Board of Directors of Toyota Motor Corporation
(to present)
Apr.
2024
Advisor, Sumitomo Mitsui Banking Corporation (to present)
Aug. 2024
Ares Management Asia Japan K.K.
Chairman and Representative Director (to present)
Masahiko Oshima
Member of the Board
of Directors
Male
September 13, 1960
Position and areas of
responsibility
Member of the Executive
Appointment Meeting
Member of the Executive
Compensation Meeting
Outside
Independent
Brief career summary
Apr.
1988
Joined The Sumitomo Bank, Limited
Apr.
1998
Visiting Lecturer at Waseda Institute of Asia-Pacific Studies
(WIAPS)
Apr. 2000
Full-Time Lecturer at School of International Corporate
Strategy, Hitotsubashi University Business School
Oct. 2002
Assistant Professor at School of International Corporate
Strategy, Hitotsubashi University Business School
Apr.
2010
Professor at School of International Corporate Strategy,
Hitotsubashi University Business School
Apr.
2018
Professor at School of Business Administration, Hitotsubashi
University Business School
Apr.
2022
Dean and Professor at School of International Corporate
Strategy, Hitotsubashi University Business School (to present)
Jun.
2023
Member of the Board of Directors of Toyota Motor Corporation
(to present)
Emi Osono
Member of the Board
of Directors
Female
August 8, 1965
Position and areas of
responsibility
Member of the Executive
Appointment Meeting
Member of the Executive
Compensation Meeting
Outside
Independent
Brief career summary
Jul.
1989
Founding President of the International Wheelchair
Basketball Federation
Dec. 2001
President of the International Paralympic Committee
Jul.
2002
Retired as President of the International Wheelchair
Basketball Federation
Sep.
2017
Retired as President of the International Paralympic Committee
Jun.
2018
Member of the Board of Directors of Toyota Motor Corporation
(to present)
Sir Philip Craven
Member of the Board
of Directors
Male
July 4, 1950
Position and areas of
responsibility
Member of the Executive
Appointment Meeting
Member of the Executive
Compensation Meeting
Outside
Independent
129
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Board of Directors and Audit & Supervisory Board Members | Operating Officers and Organizational Structure | Overview of Operations | History | Financial Summary | Corporate Information and Stock Information
Board of Directors and Audit & Supervisory Board Members
Brief career summary
Oct.
1972
Joined Toyota Motor Corporation
Jan. 2000
General Manager, Overseas Parts Division of Toyota Motor
Corporation
Jun.
2007
President of Toyota Motor Corporation Australia Ltd.
May
2014
Chairman of Toyota Motor Corporation Australia Ltd.
Jun.
2018
Audit & Supervisory Board Member of Toyota Motor Corporation
(to present)
Brief career summary
Apr.
1985
Joined Toyota Motor Co., Ltd.
Jan.
2012
Seconded to Toyota Motor (China) Investment Co., Ltd. (TMCI)
Jan.
2015
General Manager, Affiliated Companies Finance Dept. of Toyota
Motor Corporation
Jan.
2018
General Manager of Audit & Supervisory Board Office of Toyota
Motor Corporation
Jun.
2019
Audit & Supervisory Board Member of Toyota Motor Corporation
(to present)
Brief career summary
Apr.
1977
Joined Toyota Motor Co., Ltd.
Jan.
2001
General Manager, Production Control Division of Toyota Motor
Corporation
Jan. 2004
General Manager of Global Procurement Planning Division of
Toyota Motor Corporation
Jun. 2005
Managing Officer of Toyota Motor Corporation
Jun. 2009
Senior Managing Director of Toyota Motor Corporation
Jul.
2012
President of Toyota Motor East Japan, Inc.
Oct. 2019
Chairman, Member of the Board of Directors of Toyota Motor
East Japan, Inc.
Apr.
2023
Senior Executive Advisor to Toyota Motor East Japan, Inc. (to
present)
Jun.
2023
Audit & Supervisory Board Member of Toyota Motor Corporation
(to present)
Masahide Yasuda
Full-Time Audit &
Supervisory Board
Member
Male
April 1, 1949
Katsuyuki Ogura
Full-Time Audit &
Supervisory Board
Member
Male
January 25, 1963
Takeshi Shirane
Full-Time Audit &
Supervisory Board
Member
Male
September 5, 1952
Brief career summary
Jul.
1986
Joined S.G. Warburg & Co., Ltd.
Feb.
1999
President of UBS Asset Management, Japan
Jun. 2000
Managing Director of Equity Capital Market of UBS Warburg
Tokyo
Sep. 2001
Doctoral Program, Judge Business School, University of
Cambridge
Mar. 2005
FME Teaching Fellow of Judge Business School, University of
Cambridge
Mar. 2008
Senior Fellow of Judge Business School, University of Cambridge
Jun.
2022
Audit & Supervisory Board Member of Toyota Motor Corporation
(to present)
Brief career summary
Nov.
1994
Senior Solicitor of Anderson Lloyd Barristers & Solicitors, New
Zealand
Nov. 2002
In-House Counsel of Olympus Corporation
Jan. 2004
Senior In-House Counsel of Matsushita Electric Industrial Co.,
Ltd., Senior In-House Counsel of Matsushita Electronic
Components Co., Ltd.
Jan. 2008
Joined Hogan Lovells Horitsu Jimusho Gaikokuho Kyodo Jigyo
Mar.
2012
Head of Legal of Molex Japan LLC
Jun.
2017
President of O’Connell Consultants
Jan.
2018
CEO of Catherine O’Connell Law (to present)
Jun.
2023
Audit & Supervisory Board Member of Toyota Motor Corporation
(to present)
Brief career summary
Apr.
1999
Joined Chunichi Shimbun Co., Ltd.
Apr.
2021
Editorial Writer and Leader for Reserve Reporters in the Business
News Department of Chunichi Shimbun Co., Ltd.
Mar. 2023
Editorial Committee Member and International General Desk,
Chunichi Shimbun Co., Ltd.
May 2024
Retired from Chunichi Shimbun Co., Ltd.
Jun.
2024
Audit & Supervisory Board Member of Toyota Motor Corporation
(to present)
George Olcott
Audit & Supervisory
Board Member
Male
May 7, 1955
Outside
Independent
Catherine
O’Connell
Audit & Supervisory
Board Member
Female
February 10, 1967
Outside
Independent
Hiromi Osada
Audit & Supervisory
Board Member
Female
June 11, 1973
Outside
Independent
130
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Koji Sato
President
Chief Executive Officer
Hiroki Nakajima
Executive Vice President
Chief Technology Officer
Takahiro Imura
General Manager,
Production Group
Simon Humphries
Chief Branding Officer
Kenta Kon
Woven by Toyota, Inc.
Kazuaki Shingo
Chief Production Officer
Yoichi Miyazaki
Executive Vice President
Chief Financial Officer
Chief Competitive Officer
Takeshi Uchiyamada
Executive Fellow
Mitsuru Kawai
Executive Fellow (Oyaji)
Koji Kobayashi
Executive Fellow (Banto)
Shigeki Tomoyama
Executive Fellow
Gill A. Pratt
Chief Scientist and Executive Fellow
for Research
Masashi Asakura
Senior Fellow
Keiji Yamamoto
Senior Fellow
Chief Information & Security Officer
Fellows
Board of Directors and Audit & Supervisory Board Members | Operating Officers and Organizational Structure | Overview of Operations | History | Financial Summary | Corporate Information and Stock Information
Operating Officers and Organizational Structure (As of February 2025)
Business Units
Regions
Products
North America Region
Advanced R&D and Engineering Company
Europe Region
Carbon-Neutral Engineering Development Center
Japan Business Group
Software Development Center
China Region
Vehicle Development Center
Asia Region
Toyota Compact Car Company
India, Middle East, East Asia & Oceania Region
Mid-Size Vehicle Company
Latin America & Caribbean Region
CV Company
Africa Support Div. /
Business Planning Dept. /
Sales & Operation Planning Div. /
KD Business Planning Div. /
Mobility Business Planning Div. /
VC Operations Div.
Lexus International Co.
Powertrain Company
Production Engineering Development Center
GAZOO Racing Company
Head Office
CEO Office / Digital Transformation Promotion Dept. / Toyota System Supply /
BR Next-Generation Supply Process Office / Sustainability Management Dept.
BEV Factory
Information Systems Group
Hydrogen Factory
Accounting Group
Frontier Research Center
Sales Financial Business Group
TPS Group
Purchasing Group
Business Development Group
Customer First Promotion Group
External Affairs & Public Affairs Group
General Administration & Human Resources Group
Production Group
Audit & Supervisory Board Office / Internal Audit Dept.
Tatsuro Ueda
Chief Executive Officer,
China Region
Tetsuo Ogawa
Chief Executive Officer,
North America Region
131
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Consolidated Vehicle Sales
9,443 thousand
621 thousand
Sales Revenues
¥45,095.3 billion
¥7,941.1 billion
Total Shareholder Return
¥2,111.7 billion
¥994.8 billion
Operating Income
¥5,352.9 billion
¥2,627.9 billion
R&D Expenses
¥1,202.3 billion
¥39.3 billion
Net Income Attributable to
Toyota Motor Corporation
¥4,944.9 billion
¥2,493.6 billion
Capital Expenditures
¥2,010.8 billion
¥405.0 billion
Total Liquid Assets
¥15,079.5 billion
¥3,765.8 billion
Fiscal 2024 Financial Highlights (Consolidated)
The lower of each pair of figures represents the year-on-year change.
Global Network and Data by Region
Number of Production Bases and Manufacturing Companies
(As of January 31, 2025)
Number of R&D Sites
(As of January 31, 2025)
Other
Asia
(excluding
Japan)
Europe
North America
Japan
North America
Other
Asia
(excluding
Japan)
Japan
Japan
Other
Asia
(excluding
Japan)
Europe
North America
Number of Employees
380,793
(As of March 31, 2024)
Total Vehicle Production
9,263,035
(As of March 31, 2024)
Total Vehicle Sales
9,442,770
(As of March 31, 2024)
Europe
Board of Directors and Audit & Supervisory Board Members | Operating Officers and Organizational Structure | Overview of Operations | History | Financial Summary | Corporate Information and Stock Information
Overview of Operations
13
5
North America
6
3
Europe
27
6
Asia
(Excluding Japan)
16
8
Japan
7
0
Other
0
2,000
4,000
6,000
8,000
10,000
12,000
132
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
History
1935
1940
1950
1960
1970
1980
1990
2000
2010
2020
Launch of Toyoda Model
AA passenger car (1936)
Launch of Toyopet
Crown (1955)
Launch of
Soarer (1981)
Launch of Levin/
Trueno (1983)
Launch of Hilux
Vigo (2004)
Launch of
Mirai (2014)
Launch of
bZ4X (2022)
Launch of 16th-gen-
eration Crown (2022)
Great East Japan Earthquake and
Thailand floods (2011)
COVID-19 pandemic (2019)
Automobile-related trade friction
(1990s)
Rio Earth Summit (1992)
Global financial crisis
(2008)
Adoption of United Nations
Sustainable Development
Goals (2015)
Adoption of Paris
Agreement (2015)
Russia–Ukraine war (2022)
Adoption of Kyoto Protocol
(1997)
Domestic/Overseas Vehicle Production
(Thousands of units)
Domestic
Overseas
Establishment of Toyota Motor Co., Ltd. (1937)
Labor disputes (1950)
Merger of Toyota Motor Co., Ltd., and Toyota Motor Sales
Co., Ltd. (1982)
Recall issues (2009–2010)
Establishment of Toyota Research
Institute, Inc. (2016)
Recording of operating loss (Fiscal 2009)
Start of construction of
Woven City (2021)
Launch of Prius (1997)
Introduction of Total Quality Control (1961)
Launch of Toyoda Model AA passenger car (1936)
Adoption of Kanban method (1963)
Formulation of Guiding
Principles at Toyota (1992)
Formulation of Toyota Global Vision
(2011)
Formulation of Toyota Philosophy
and New Toyota Way 2020 (2020)
Formulation of Toyota Way (2001)
Establishment of Toyota Environmental Challenge 2050 (2015)
Establishment of New United Motor
Manufacturing, Inc., U.S.-based joint venture
with General Motors Company (1984)
Launch of Mirai (2014)
Establishment of Toyoda
Principles (1935)
Introduction of Toyota Production
System
History of Toyota
Rapid growth as global company
Advancement toward future mobility society
Launch of Publica
Sports (1962)
Launch of
2000GT (1967)
Launch of
MR2 (1984)
Launch of
Supra (1986)
Launch of
LFA (2009)
Launch of GR
Yaris (2020)
Launch of Lexus LS400*
(1989) * Celsior in Japan
Launch of
Prius (1997)
Major World Events
Launch of Sports
800 (1965)
Launch of
Celica (1970)
Founding and entry into
automobile industry
Establishment of Toyota identity
75 Years of Toyota
Board of Directors and Audit & Supervisory Board Members | Operating Officers and Organizational Structure | Overview of Operations | History | Financial Summary | Corporate Information and Stock Information
World War II (1939–1945)
Japanese economic miracle (1960s–1970s)
Fall of Berlin Wall (1989)
U.S.–Japan trade friction (1980s)
Oil crises (1973 and 1979)
Institution of stricter regulations on exhaust
emissions (1970s)
133
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
*1 Figures for “Net income attributable to Toyota Motor Corporation” are displayed.
*2 Figures represent dividends per common share on a post-stock split basis (values for after the five-for-one stock split of shares of common stock conducted on October 1, 2021).
*3 Figures represent value of common shares repurchased (shareholder returns on net income attributable to Toyota Motor Corporation for the respective fiscal year, excluding shares constituting less than one unit that were purchased upon request and repurchases made to avoid the dilution of shares).
*4 Figures for depreciation expenses and capital expenditures do not include vehicles under operating leases and right-of-use assets.
*5 Figures represent cash and cash equivalents, time deposits, and investments in public and corporate bonds and trust funds, excluding those associated with the financial services business.
*6 Depreciation methods were revised in fiscal 2020.
Fiscal years ended March 31
2015
2016
2017
2018
2019
2020
2020
2021
2022
2023
2024
U.S. GAAP
IFRS
Consolidated vehicle sales
(Thousands
of units)
8,972
8,681
8,971
8,964
8,977
8,958
8,955
7,646
8,230
8,822
9,443
Foreign
exchange
rates
(Average)
Yen to U.S. dollar rate
110
120
108
111
111
109
109
106
112
135
145
Yen to euro rate
139
133
119
130
128
121
121
124
131
141
157
Net revenues
Sales revenues
(Billions
of yen)
27,234.5
28,403.1
27,597.1
29,379.5
30,225.6
29,929.9
29,866.5
27,214.5
31,379.5
37,154.2
45,095.3
Operating
income
Operating income
(Billions
of yen)
2,750.5
2,853.9
1,994.3
2,399.8
2,467.5
2,442.8
2,399.2
2,197.7
2,995.6
2,725.0
5,352.9
Income before
income taxes
Income before income
taxes
(Billions
of yen)
2,892.8
2,983.3
2,193.8
2,620.4
2,285.4
2,554.6
2,792.9
2,932.3
3,990.5
3,668.7
6,965.0
Net income*1
Net income
attributable to Toyota
Motor Corporation
(Billions
of yen)
2,173.3
2,312.6
1,831.1
2,493.9
1,882.8
2,076.1
2,036.1
2,245.2
2,850.1
2,451.3
4,944.9
Common
shares
Cash dividends
(Billions
of yen)
631.3
645.5
627.5
642.6
626.8
610.8
610.8
671.0
718.2
816.9
1,011.7
Cash dividends per share*2
(Yen)
40
42
42
44
44
44
44
48
52
60
75
Payout ratio
(%)
29.0
28.3
34.6
26.1
33.8
29.9
30.2
29.8
25.3
33.4
20.4
Value of shares repurchased
(Shareholder return basis)*3
(Billions
of yen)
293.3
639.3
449.9
549.9
549.9
199.9
199.9
249.9
435.6
299.9
1,099.9
R&D expenses
(Billions
of yen)
1,004.5
1,055.6
1,037.5
1,064.2
1,048.8
1,110.3
1,110.3
1,090.4
1,124.2
1,241.6
1,202.3
Depreciation expenses*4
(Billions
of yen)
806.2
885.1
893.2
964.4
984.8
812.8
803.3*6
876.9
1,007.2
1,185.0
1,248.4
Capital expenditures*4
(Billions
of yen)
1,177.4
1,292.5
1,211.8
1,302.7
1,465.8
1,393.0
1,372.3
1,293.2
1,343.0
1,605.8
2,010.8
Total liquid assets*5
(Billions
of yen)
8,508.2
9,229.9
9,199.5
9,372.1
9,454.4
8,685.1
8,602.6
11,579.4
10,517.3
11,313.7
15,079.5
Total assets
(Billions
of yen)
47,729.8
47,427.5
48,750.1
50,308.2
51,936.9
52,680.4
53,972.3
62,267.1
67,688.7
74,303.1
90,114.2
Toyota Motor
Corporation
shareholders’
equity
Toyota Motor
Corporation
shareholders’ equity
(Billions
of yen)
16,788.1
16,746.9
17,514.8
18,735.9
19,348.1
20,060.6
20,618.8
23,404.5
26,245.9
28,338.7
34,220.9
Return on
equity
Return on equity
(%)
13.9
13.8
10.6
13.7
9.8
10.4
10.0
10.2
11.5
9.0
15.8
Return on
assets
Return on assets
(%)
4.9
4.9
3.8
5.0
3.7
4.0
3.8
3.9
4.4
3.5
6.0
SEC Filings
U.S. GAAP
IFRS
Board of Directors and Audit & Supervisory Board Members | Operating Officers and Organizational Structure | Overview of Operations | History | Financial Summary | Corporate Information and Stock Information
Financial Summary (Consolidated)
134
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
6,000
5,000
3,000
2,000
1,000
0
2020
2024
2023
2022
2021
4,000
12.0
10.0
8.0
4.0
2.0
0
6.0
2,036.1
4,944.9
2,451.3
2,850.1
2,245.2
6.8
11.0
6.6
9.1
8.3
1,500
8.0
6.0
4.0
2.0
0
1,200
900
600
300
0
2020
2024
2023
2022
2021
1,110.3
1,202.3
1,241.6
1,124.2
1,090.4
3.7
2.7
3.3
3.6
4.0
2,500
2,000
1,500
1,000
500
0
2020
2024
2023
2022
2021
1,372.3
2,010.8
1,605.8
1,343.0
1,293.2
803.3
1,185.0
1,248.4
1,007.2
876.9
10,000
8,000
6,000
4,000
2,000
0
2020
2024
2023
2022
2021
8,955
9,443
8,822
8,230
7,646
50
40
30
20
10
0
2020
2024
2023
2022
2021
29.8
45.0
37.1
31.3
27.2
6,000
12.0
10.0
8.0
4.0
2.0
0
5,000
4,000
3,000
2,000
1,000
0
2020
2024
2023
2022
2021
6.0
2,399.2
5,352.9
2,725.0
2,995.6
2,197.7
8.0
11.9
7.3
9.5
8.1
R&D Expenses*
1,202.3
39.3
Net Income Attributable to
Toyota Motor Corporation
4,944.9
2,493.6
Capital Expenditures
2,010.8
405.0
(Billions of yen)
(%)
(Billions of yen)
(%)
(Billions of yen)
Consolidated Vehicle Sales
9,443
621
Sales Revenues
45.0
7.9
Operating Income
5,352.9
2,627.9
FY
FY
FY
FY
FY
Net income attributable to Toyota Motor Corporation
Net income ratio (right scale)
R&D expenses
Ratio to sales revenues (right scale)
* R&D expenses incurred in connection with R&D activities during the respective fiscal year
Capital expenditures
Depreciation expenses
Operating income
Operating income ratio (right scale)
FY
Board of Directors and Audit & Supervisory Board Members | Operating Officers and Organizational Structure | Overview of Operations | History | Financial Summary | Corporate Information and Stock Information
Financial Summary (Consolidated)
Note: Figures for fiscal 2020–fiscal 2024 are based on IFRS.
(Thousands of units)
(Trillions of yen)
(Billions of yen)
(%)
135
Messages from Management
Source of Value Creation
—Toyota’s Identity
Value Creation Story
—Future Mobility Society Envisioned by an
Automobile Manufacturer
Value Creation Foundations
Corporate Data
Foreign corporate
entities, etc.
3,369,424,000 shares
25.01%
Financial institutions and
securities companies, etc.
5,103,918,000 shares
37.88%
Individuals, etc.
1,695,819,000 shares
12.58%
Other domestic
corporate entities
3,305,011,000 shares
24.53%
Distribution of Shares Held and Percentage of
Shareholding by Shareholder Type
Note: Percentage of shareholding is calculated based on the total number
of shares issued and outstanding, excluding treasury stock of
2,840,815 thousand shares.
Corporate Data
Company Name
Toyota Motor Corporation
Established
August 28, 1937
Capital
¥635,402 million
Fiscal Year-End
March 31
Accounting Auditor
PricewaterhouseCoopers Japan LLC
Number of Affiliates
Consolidated subsidiaries: 577
Affiliates accounted for by the equity
method: 165
Number of Employees
380,793 (parent company: 70,224)
Stock Data
Number of Shares
Authorized
50,000,000,000
Number of Common
Shares Issued
16,314,987,460
Number of Shareholders 947,533
Stock Listings
Japan: Tokyo, Nagoya
Overseas: New York, London
Securities Code
Japan: 7203
American Depositary
Ratio: 1 ADR = 10 common shares
Receipts (ADRs)
Symbol: TM
Transfer Agent in Japan Mitsubishi UFJ Trust and Banking Corporation
1-1, Nikko-cho, Fuchu City,
Tokyo 183-0044, Japan
Japan toll-free: (0120) 232-711
Depository and Transfer The Bank of New York Mellon
Agent for ADRs
240 Greenwich Street,
New York, NY 10286, United States
Contact Information
Head Office
1, Toyota-cho, Toyota City,
Aichi Prefecture 471-8571, Japan
Tel: (0565) 28-2121
Tokyo Head Office
1-4-18, Koraku, Bunkyo-ku,
Tokyo 112-8701, Japan
Tel: (03) 3817-7111
Major Shareholders
Name
Number of
common shares
(Thousands of shares)
Percentage of
shareholding
(%)
The Master Trust Bank of Japan, Ltd.
1,808,404
13.42
Toyota Industries Corporation
1,192,331
8.85
Custody Bank of Japan, Ltd.
836,489
6.21
Nippon Life Insurance Company
633,230
4.70
JP Morgan Chase Bank, N.A.
(Standing Proxy: Settlement & Clearing Services
Division, Mizuho Bank, Ltd.)
585,585
4.35
DENSO Corporation
449,576
3.34
State Street Bank and Trust Company
(Standing Proxy: Settlement & Clearing Services
Division, Mizuho Bank, Ltd.)
378,847
2.81
The Bank of New York Mellon as Depositary
Bank for Depositary Receipt Holders
(Standing Proxy: Sumitomo Mitsui Banking
Corporation)
321,674
2.39
Mitsui Sumitomo Insurance Company, Limited
284,072
2.11
Tokio Marine & Nichido Fire Insurance Co., Ltd.
255,324
1.89
Note: Percentage of shareholding is calculated based on the total number of shares issued and outstanding,
excluding treasury stock of 2,840,815 thousand shares.
Corporate Website
Corporate Information
https://global.toyota/en/
Investor Relations Information
https://global.toyota/en/ir/
Toyota Times
https://toyotatimes.jp/en/
Board of Directors and Audit & Supervisory Board Members | Operating Officers and Organizational Structure | Overview of Operations | History | Financial Summary | Corporate Information and Stock Information
Corporate Information and Stock Information (As of March 31, 2024)
Toyota and Lexus brand vehicles
Cautionary Statement with Respect to Forward-Looking Statements
This report contains forward-looking statements that represent forecasts and other
projections made by Toyota and its consolidated subsidiaries. These forward-looking
statements reflect judgments and hypotheses made based on the information avail-
able at the time of publication of this report. Actual outcomes may differ signifi-
cantly from these forward-looking statements due to uncertainties inherent in the
aforementioned judgments and hypotheses or due to changes in future business poli-
cies, internal or external conditions, or other potential variable factors.
These uncertainties and variable factors include, but are not limited to, the following.
• Changes in economic conditions, market demand, or competition affecting the
automotive markets of Japan, North America, Europe, Asia, or other markets in which
Toyota operates
• Fluctuations in foreign exchange rates (particularly with respect to the value of the
Japanese yen, the U.S. dollar, the euro, the Australian dollar, the Canadian dollar,
and the British pound), stock prices, or interest rates
• Changes in funding conditions in financial markets or increased competition in the
financial services industry
• Changes in Toyota’s ability to market and distribute effectively
• Changes in Toyota’s ability to conduct production efficiently or to conduct capital
investment at the levels and times planned by management
• Changes in the laws, regulations, or government policies in markets in which Toyota
operates that affect the Company’s automotive operations, particularly pertaining
to remedial measures such as recalls and other aspects of vehicle safety, trade,
environmental preservation, vehicle emissions, and vehicle fuel economy, or changes
in the laws, regulations, or government policies that affect Toyota’s other opera-
tions, including the outcomes of current and future litigation and other legal
proceedings
• Political or economic instability in markets in which Toyota operates
• Changes in Toyota’s ability to achieve timely development of new products that
cater to customer needs and to secure market acceptance of these products
• Damage to Toyota’s brand image
• Factors pertaining to Toyota’s reliance on particular suppliers for the provision of
supplies
• Increases in prices of raw materials
• Factors pertaining to Toyota’s reliance on various digital and information technolo-
gies and on information security
• Fuel shortages, disruptions to electricity or transportation systems, labor strikes,
work stoppages, or other disruption to, or difficulties in, securing labor in the major
markets where Toyota purchases materials, components, or supplies for the produc-
tion of its products or where its products are produced, distributed, or sold
• Impacts from natural disasters, epidemics, political or economic instability, fuel
shortages, disruptions to social infrastructure, wars, acts of terrorism, or labor
strikes, including their negative effects on Toyota’s production and sales operations
• Impacts from climate change and the transition toward a low-carbon economy
• Changes in Toyota’s ability to recruit or retain diverse and talented human resources
Details of these and other factors that may affect future outcomes can be found in
Toyota’s annual report on Form 20-F, which is on file with the United States Securities
and Exchange Commission.
SEC Filings
Daihatsu and Hino brand vehicles
Vehicles produced for wholesale by
Toyota Motor Corporation and
its consolidated subsidiaries
Vehicles produced for wholesale by
unconsolidated entities
(joint ventures in China, etc.)
Flow of Vehicle Sales
Customers
Total retail vehicle sales
Toyota and Lexus vehicle sales
Distributors or dealers outside of consolidation
Consolidated vehicle sales
Note: In certain cases, vehicle sales are not conducted in accordance with the flow indi-
cated above.
Toyota Motor Corporation
1, Toyota-cho, Toyota City, Aichi Prefecture 471-8571, Japan
https://global.toyota/en/