Sustainability Report 2012

Sustainability Report 2012

Full Version

Processing Toyota Loops is a special-purpose subsidiary of Toyota Motor Corporation, founded to provide greater employment opportunities for people with serious disabilities. Toyota Loops handles in-house printing, intra-company mail receipt and delivery, and other such operations that were previously done inside Toyota Motor Corporation. Toyota Loops handles the printing and binding of this report. Editing, Plate Making This report is compiled using the Computer to Plate (CTP) system, resulting in the total elimination of film, an intermediate material, during the plate making process. Paper This report is printed on paper made with wood from forest thinning for sound forest management. Ink The ink used contains less than 1% VOC (volatile organic compound) as petroleum-based solvents are replaced by vegetable oil-based solvents, principally soybean oil.

Toyota has participated in activities of the WBCSD (World Business Council for Sustainable Development) as a member of this organization. WBCSD engages in advocacy activities aimed at realizing sustainable development based on the three pillars of economic growth, environmental protection and social development.

Toyota is a supporter of Education for Sustainable Development (ESD). ESD activities are aimed at creating a sustainable society.

Cover design: The tree on the cover represents the Toyota Global Vision and illustrates what kind of company Toyota wants to be: the firm roots stand for Toyota’s shared values, the fruit for “always better cars” and enriching lives of communities, and the trunk for the stable base of business. The firm roots produce fruit and allow the trunk to grow thick and strong, ensuring the next crop of fruit. This virtuous circle reflects Toyota’s vision to be a company achieving sustainable growth.

Published by Corporate Planning Div., Toyota Motor Corporation Published: September 2012 Next scheduled report: Summer 2013

Web version URL

http://www.toyota-global.com/sustainability/report/sr/ EA-1209


CONTENTS Sustainability Report 2012

Editorial Policy

02

Message from the President

The objective of this report is to convey Toyota’s efforts to realize harmony with people, societies, and the global environment, as well as a sustainable society through monozukuri (manufacturing). In our 2011 report, our efforts were organized according to each stakeholder. Toyota is carrying out management based on the Toyota Global Vision we announced in March 2011, and from 2012 we are rearranging the report according to the three elements (“Always better cars,” “Enriching lives of communities,” and “Stable base of business”) of Toyota Visionary Management that aims for sustainable growth for society and Toyota alike. The information for each element includes 1) the fundamental message, 2) special feature, and 3) information about initiatives. This report is comprised of a printed version and a website. Information of particular importance is included in the printed version, while further initiatives and detailed information are available on the website. The report on environmental initiatives (published in 2011 as the Environmental Report) has been renamed the “Sustainability Report Separate Volume: Environment Facts & Figures.”

03

Toyota Global Vision

Disclosure of CSR Information

04–05

Toyota’s CSR Initiatives Creating the Future of Japan Together from Tohoku

06–07 Special Feature

08

17

Always Better Cars Society/ Environment/ Governance

Sustainability Report 2012 Full Version (Website) PDF: http://www.toyota-global.com/sustainability/report/sr/

08–09 message

Aqua – from Tohoku to the World


HTML: http://www.toyota-global.com/sustainability/

Websites for overseas affiliates’ reports

Sustainability Report 2012 Key Messages

(15 countries and regions)

(Printed version and website)

Sustainability Report 2012 Separate Volume: Environment Facts & Figures

Finance

TOYOTA Annual Report 2012

PDF

http://www.toyota-global.com/ sustainability/report/sr/

HTML http://www.toyota-global.com/ sustainability/

PDF

http://www.toyota-global.com/ sustainability/report/er/

HTML http://www.toyota-global.com/ sustainability/

12–13

Initiatives for Improving Traffic Safety

14–15

Initiatives to Improve Quality

16–17

To Be Rewarded with the Smiles of Customers

(Website)

(Printed version and website) HTML http://www.toyota-global.com/ sustainability/report/overseas/

Always Better Cars

HTML http://www.toyota-global.com/ investors/ir_library/annual/

18

45

Enriching Lives of Communities 18–19 message

Enriching Lives of Communities

Contributing to the Realization of a Low-carbon Society


24–25

A Linked Mobility Society A New Lifestyle/Cooperation with Communities and Infrastructure

26–31

Period covered

The period covered in the report’s data is from April 2011 to March 2012. For major ongoing initiatives, the most recent status update in FY2012 has been included.

Scope of report

Toyota Motor Corporation’s own initiatives and examples of those of its overseas consolidated affiliates, and so on.

Contribution to the Environment Special Feature/Key Initiative-related Data

32–39

Overseas affiliates’ reports In 2012 plans call for separate reports to be issued in a total of 16 countries and regions (including Japan) in which Toyota overseas affiliates and other companies operate. The information disclosed globally by these reports will cover about 89% of Toyota vehicles sold worldwide.

Contributing to Communities Affluent Communities/Social Contribution (Environment/Traffic Safety/Education)

40–42

46

43

59

Stable Base of Business 46–47 message

Mutually Beneficial Relationships with Dealers/Distributors and Suppliers As a Member of the Local Community WBCSD Rio+20

44–45

Respect for Human Rights

Stable Base of Business

Monozukuri Is about Developing People


50–56 Argentina

Australia

Brazil

China

Europe

India

Indonesia

Malaysia * Issued in the UMW Holding Report

57

58–59

Employees Corporate Governance/ Compliance Financial Information 60–61

New Zealand

North America/ Canada

South Africa

The Philippines

Taiwan

Thailand

CSR Achievement Data

62

ISO26000 Comparison

63

Third-party Opinion

Vietnam

1

Message from the President


By delivering “always better cars” to customers and contributing to the betterment of towns and communities, we aim to be a company whose growth is welcomed by as many people as possible I first would like to express my sincere gratitude for your ongoing support and understanding of our company. No matter how harsh the business environment becomes, Toyota has always strived to make better cars that exceed expectations and bring smiles to those who choose them. In our vehicle manufacturing, as well as in our social contribution activities and across the whole of our business activity, we have a responsibility to consider how to respond to society’s expectations in a range of areas—from the environment and safety, to employment, human resource development, and our response to the aging society.

The ‘Toyota Global Vision’ announced in March 2011, is an articulation of what kind of company we want to be — what kind of company we ought to be. It clarifies our value, “we want Toyota to be a company that customers choose and brings a smile to every customer who chooses it.” The ‘Toyota Global Vision’ is a distillation of our resolve at Toyota for the future.

Backdrop and Progress

Rewarded with a Smile by exceeding your expectations Toyota will lead the way to the future of mobility, enriching lives around the world with the safest and most responsible ways of moving people. Through our commitment to quality, constant innovation and respect for the planet, we aim to exceed expectations and be rewarded with a smile. We will meet challenging goals by engaging the talent and passion of people, who believe there is always a better way.

In the backdrop of this vision, there is our fall into the red after the Lehman Brothers collapse, as well as our reflection over a series of quality problems. To unite all Toyota together to advance our efforts for the recovery of business performance, we came to realize the necessity of having a dream or a path that we should take that all people who work for Toyota could have in common, one that would define what kind of company we want to be — what kind of company we should be. We also keenly felt the importance of making what kind of company we are and what kind of values we hold known to all our customers. Based on our ideal for Toyota, the members of our team gathered to discuss and finalize the vision. This is a distillation of our resolve at Toyota.

As stated in the Toyota Global Vision announced in March 2011, making better cars and contributing to the betterment of towns and communities leads to a stable business base. This is the Toyota approach to business: achieving sustainable growth through a virtuous cycle. I believe the new cars we launched in the fiscal year 2011 show the direction we are headed in. It is likely that the very difficult business environment the world is facing now will continue. All 320,000 of us at Toyota around the world will work as one to be a company that can realize sustainable growth. Toyota will move forward, never turning back. I, and everyone at Toyota, request your continued and ongoing support.

August 2012

Akio Toyoda President Toyota Motor Corporation

2


Toyota Visionary Management The image of a tree has been chosen to symbolize the Toyota Global vision — its “roots to fruits.” The roots of the tree are the shared values that have steered Toyota from the beginning and that have underlain our monozukuri. They are values expressed in the Toyoda Precepts, in the Guiding Principles at Toyota, and in the Toyota Way, which are the basis of our business. The “fruit” that Toyota provides for customers is making better cars and enriching lives in communities. Through these efforts, we aim to become an admired and trusted company in the various regions where we conduct businesses. The “trunk” of the tree, the underlying support for Toyota’s creating of products that earn smiles from our customers, is the stable base of business. Toyota’s business activities are based on the concept of ensuring sustainable growth by fostering the virtuous circle, “Always better cars  Enriching lives of communities  Stable base of business.”

Fruit

Always better cars Develop vehicles which exceed customer expectations

Fruit

Enriching lives of communities Contribute to communities Contribute to the future of mobility

Sustainable growth Constantly drive “always better cars” and “enriching lives of communities” by ensuring sustainable profitability under long-range perspective

Trunk Stable base of business

Roots

Toyota values

The Toyoda Precepts The Guiding Principles at Toyota The Toyota Way

3

Toyota’s CSR Initiatives

Safety

Safety

Environment Social aspects

Environmental aspects

Economic aspects Comfort and Society convenience and culture

Resources/ energy sources

Education

Positioning of the CSR Policy

Guiding Principles at Toyota

Toyota Way 2001 4

Sustainabilit y Repor t 2012

The Toyota Code of Conduct

“CSR Policy: Contribution towards Sustainable Development”

Discussion by chief function officers

The CSR Department is responsible for drafting CSR policies, responding to CSR issues across divisions, raising awareness of CSR internally and externally, distributing CSR-related information, and communicating with stakeholders. The CSR committee meets three times a year to discuss topics such as the status of implementation of CSR activities, legal compliance checks, internal controls, social contribution activity policies, and risk management.

Organizational Chart

CSR Committee Chairman: Fujio Cho Established in 2007

Secretariat: CSR Department, Corporate Planning Division

Corporate Citizenship Activity Subcommittee

Assessment of practical work based on the CSR Indices (approx. 100 items)

TSHD* (2) Direct Dialogue with NGO/NPOs, opinion leaders, etc.

“KPI” to Realize the “Global Vision for Those We Serve” • Presenting some numeral targets and time boundaries would increase reliability. And even if some targets are not achieved, explaining the reason why they were not achieved could be part of communication.

Discussion within the CSR Committee Setting KPI Strategic Focus Discussion by chief function officers

• Need for disclosure varies according to country and region. It would be effective to work out numerical values by region or segment as well as global ones. For more details, please refer to the following web page. http://www.toyota-global.com/sustainability/csr_initiatives/ toyota_stakeholder_dialogues/index_csr.html

Global Vision for Those We Serve

CSR Planning Subcommittee

Risk Management Committee

For more details, please refer to the following web page. http://www.toyota-global.com/sustainability/csr_initiatives/csr_concepts/policy.html

Articulating the “Global Vision for Those We Serve”

Opinions Expressed at the 11th Stakeholder Dialogue Held in November 2011

Social issues

Toyota’s CSR Structure

Corporate Ethics Subcommittee

TSHD* (1) Direct Dialogue with NGO/NPOs, opinion leaders, etc.

* Toyota Stakeholder Dialogue

Toyota has been promoting educational opportunities to enable employees to learn about the principles of CSR, including a global training session for the Toyota Way and rank-specific education classes. Study sessions in small groups began in FY2010 as part of the CSR Boost-up Initiative. In FY2011, the CSR study session on the theme of the disaster was held for a large group of participants. In this way, Toyota is raising awareness of it employees with regard to CSR. For more details, please refer to the following web page. http://www.toyota-global.com/sustainability/csr_initiatives/ toyota_stakeholder_dialogues/index_csr.html

Always Better Cars

The Toyoda Precepts embody the thinking of the founder of the Toyota Group, Sakichi Toyoda, and have provided moral support for employees as company principles. They continue that role today in the form of the Guiding Principles at Toyota (adopted in 1992 and revised in 1997). The CSR Policy: Contribution towards Sustainable Development is an interpretation of the Guiding Principles at Toyota and takes into consideration Toyota’s relations with stakeholders. It clearly states Toyota’s basic policies related to social responsibility for stakeholders inside and outside the company. Toyota has shared the statement with its consolidated subsidiaries and takes appropriate action. We also expect our business partners to support this initiative and act in accordance with it. In addition, we participated in the formulation of and observe the standards outlined in the Charter of Corporate Behavior of the Nippon Keidanren (Japan Business Federation), an alliance of leading Japanese corporations.


VOICE

Discussion within the CSR Committee

Compliance


—Guiding Principles at Toyota— “Contribution towards Sustainable Development”

Environment


The Spirit of the Toyoda Precepts That Have Been Passed on since Toyota’s Foundation

Regular business activities

Since 2001, Toyota has held the Toyota Stakeholder Dialogue each year with participants from a range of corporations and institutions, to bolster communication with external experts in CSR. In 2011, such Dialogues were convened twice, with an initial discussion on the concept of the “KPI Strategic Focus,” followed by a second Dialogue to decide which KPIs would be adopted. We understood the expectations of non-Toyota participants and endeavored to improve our activities accordingly.

FY2010

Overview of Toyota’s CSR Activities (automobile manufacturing, new business, and social contribution)

Toyota’s social contribution activities

Company policies, annual policies, regional policies, head office, and divisional policies

After we drew up the Global Vision for Those We Serve, which describes how we embody the Toyota Global Vision, we commenced full-scale KPI (Key Performance Indicators) development. Based on the KPI Strategic Focus, which were newly-established after a process extending over two years, our CSR activities have been further enhanced from FY2012 involving the efforts of both external experts and Toyota executives.

FY2011

Since its foundation, Toyota has continuously strived to contribute to the sustainable development of society through the manufacture and provision of innovative and quality products and services that lead the times. Cars are useful because they afford us freedom of mobility. On the other hand, they impact society and the environment in various ways. Always bearing this in mind, we listen carefully to our customers and neighbors in local communities to pursue our business, seeking harmony with people, society, and the global environment, as well as the sustainable development of society through monozukuri. In the main line of our business automobile manufacturing we develop and introduce environmentally friendly hybrid vehicles in addition to mechanisms for active and passive safety. We also roll out new businesses in such areas as biotechnology, afforestation, and energy. Furthermore, we pursue initiatives for social contributions that focus on “the environment,” “traffic safety,” and “education.” Such activities centering on automobile manufacturing are designed to help people in the wider community and bring them happiness—this is Toyota’s aspiration. The basis of our rationale is our CSR Policy: Contribution towards Sustainable Development. Toyota aims to become a company that is admired and trusted by society by ensuring that all employees recognize and put into practice our CSR Policy.

Medium- to long-term management plans

Communicating with Stakeholders

—Process for devising KPI Strategic Focus—

Seeking Harmony with People, Society, and the Global Environment, and Sustainable Development of Society through Monozukuri (Manufacturing)


Global Vision for Those We Serve

Provide safe and reliable vehicles that inspire enthusiasm at affordable prices.

Main KPIs

 Achieve the highest level of customer appraisal in terms of safety, quality and moving people

Receiving appraisal in each country for high safety standards (NCAP, IIHS, etc.)

Listen sincerely to customer voices and continue to reinvent ourselves through sufficient information disclosure and dialogue.

 Increase customer satisfaction at the Toyota Customer Assistance Center etc.

No. of calls at the Toyota Customer Assistance Center etc.

Contribute for economic development of local communities with open stance to new suppliers and dealers and through sustainable growth based on mutually beneficial business relationships with dealers/distributors and suppliers.

 Suppliers: Promote local purchasing globally

Reduce environmental burdens through lifecycle by developing various eco-friendly vehicles and technologies and making them prevail.

 Aim to improve global average fuel efficiency by 25% by FY2015 (compared with FY2005)

Be aware of responsibilities of developing and producing vehicles and contribute for realization of new mobility society free from traffic accidents and congestion.

 Engage in advanced/cutting-edge research for a new mobility society, and promote the practical application and popularization thereof

No. of models mounted with safety support systems

As a good corporate citizen, respect the culture and customs of every nation and contribute to social development.

 Continue stable social contribution activities at an appropriate level as a good corporate citizen

Total expenses of social contribution activities

Create working environments for various employees to work proudly and with loyalty and confidence in fulfilling their potential, which realize their self-growth.

 Increase the ratio of employees who feel that their jobs are rewarding

Employee Satisfaction

Ensure sustainable growth by fostering the virtuous circle, Always better cars > Enriching lives of communities > Stable base of business.

 Establish a stable base of business

Operating income ratio/Break-even point

Receiving high external appraisal for product quality (JDPower, IQS/VDS, etc.)

Customer satisfaction level

 Dealers/distributors: Establish sales networks together to be rewarded with a smile

 Promote reduction of CO2 emissions from our business activities

Diversification of suppliers (Japanese/non-Japanese) Local purchasing No. of countries where Toyota deploys business Evaluation by dealers Global average fuel efficiency Cumulative HV sales CO2 Emissions

No. of Smart Community Service users

No. of specific program participants

Frequency rate of lost workday cases

CSR/SRI evaluation

For more details, please refer to pp. 60–61.

5

Close up

Creating the Future of Japan Together from Tohoku With “All Toyota” united efforts, continuously supporting Tohoku revitalization in three areas

Tohoku Revitalization Initiatives by Toyota VISION

1

Automotive Business

In the aftermath of the Great East Japan Earthquake, Toyota understood that recovery of production would not be possible without recovery of the affected areas. To this end, Toyota immediately got involved in a range of support programs with swift decision-making and implementation based on the following order of priority: (1) lifesaving efforts; (2) early recovery of the affected areas; and (3) recovery of production.

VISION

1

Automotive Business

Making Tohoku the third car manufacturing hub in Japan Establishment of Toyota Motor East Japan (July 2012) Kanto Auto Works, Ltd., Central Motor Co., Ltd. and Toyota Motor Tohoku Corporation have been merged with the aim of “creating the world’s most attractive compact cars.”

Furthermore, in July 2011, Toyota launched new regional revitalization initiatives in the Tohoku region, based on the concept of building a brighter future for Tohoku in cooperation with local communities through monozukuri. The revitalization initiatives include making Tohoku Toyota s third car manufacturing hub in Japan and boosting the involvement in social contribution activities and programs. With “All Toyota” united efforts, we will continue to carry out initiatives to promote Tohoku revitalization based on the three pillars: the automotive business, social contribution, and new business.

VISION

2

Social Contribution

VISION

3

New Business

Kokoro Hakobu Project

F-Grid Concept*

“All Toyota” revitalization initiatives

Create new-style “smart communities” with the leading plant in the town playing a central role

Kokoro Hakobu means “to deliver one’s heart,” which refers here to delivering the warm supportive hearts (“kokoro” in Japanese) of people all over Japan and our feeling of “wanting to do something useful” for the affected areas. We put these two hearts into carrying out various continuous and long-term revitalization assistance activities.

[Major Approaches of the New Company]

Special open classes of the Toyota First Experience Program were held for elementary students in the affected areas

Build production infrastructure for compact cars • Develop a profitable management structure for compact cars

F-Grid Concepts is a new initiative with the aim of addressing energy issues amplified by the disaster, such as security, environmental performance, and economic efficiency, through comprehensive energy management that is not limited to Toyota plants but also encompasses the entire industrial and surrounding areas. * “F” stands for factory

[F-Grid Concept Initiative] Flexible energy exchange with nearby plants

• Strengthen compact car production capabilities

Energy-independent facility

Stimulating the economy through monozukuri (manufacturing) at one with the Tohoku region

Emergency power supplies for the local community

Toyota plant

Making Tohoku the third car manufacturing hub in Japan

VISION

2

In-house power generation facilities

Social Contribution

External power-supply units fitted to cars in public use (Prius) free of charge

Aqua, the star of the Tohoku revitalization (launched December 2011)

Continuous assistance for the affected areas Kokoro Hakobu Project

VISION

3

Emergency information service

Special Tohoku performance of the Toyota Master Players, Wien (all ticket sales proceeds donated)

Monozukuri at one with the region • Establish a local-procurement-promotion center in Tohoku (January 2012) • Strengthen the Tohoku technical center

F-Grid Center Regional energy management hub

Reduce reliance on external power sources

Utilizing waste heat generated by in-house power generators Heat supplied to plant factories

For more details, please refer to pp. 34-38.

New Business COLUMN

Developing new business capable of promoting revitalization F-Grid Concept combining Toyota strength with lessons learned from the disaster

Aqua component disassembly exhibition and trade show (April 2012)

Medium- to long-term human resources development

Toyota East Japan Technical Skills Academy (scheduled to open in April 2013)

CSR Boost-up Initiative: Toyota’s Initiatives toward Revitalization after the Disaster

The CSR Boost-up Initiative on the theme of Toyota’s Initiatives toward Revitalization after the Disaster was held on March 21, 2012 for the benefit of employees, as a means of raising awareness of the Toyota’s principles to address social challenges and Toyota’s CSR initiatives. The event also provided an opportunity to reexamine our role as a good corporate citizen in the community. Due to the high level of awareness and interest in the revitalization process, the number of applications was far greater than the venue capacity. For employees unable to attend, a video of the event was prepared and shared at a later date. The event gave a general overview of Toyota’s initiatives toward revitalization along with individual presentations of people working on the front line in disasterstricken areas. In addition there were two external speakers who talked about Toyota’s contributions and discussed potential future collaboration.

VOICE

Quotes from Those Who Attended

• It gave me a better overall understanding of Toyota’s work and guiding principles in this area, including things I was not previously aware of. • The stories from those who have actually gone there to help out were very moving. • It has inspired me to do something to help others without thinking just of myself. • It made me think about what I can do to contribute. • I look forward to seeing similar CSR events in the future.

For more details, please refer to pp. 10-11.

6


7

Always Better Cars

Sustainable Growth through Always Better Cars that Akio Toyoda

Exceed Customer Expectations

People’s expectations of cars are constantly changing. People are beginning to experience the pleasure of ownership in emerging countries—which are experiencing rapid economic growth—and everyone has high expectations for greater driving enjoyment and environmental performance. In an era of sudden and drastic change, we need the ability to see what is already apparent, as well as to foresee the next advancement. It is the customer who drives such change. By remaining firmly focused on customers and continuing to listen to them, we can adapt to change and make sustainable growth possible. Continuing to make “always better cars” that earn smiles from our customers is the only way forward to a successful future. Based on this conviction, Toyota will carry on working to meet the diverse needs of different customers and make “always better cars” that can satisfy customers. To enable us to continue meeting this goal, we are working to preserve and strengthen Japan’s monozukuri (manufacturing) tradition.

President

Toyota New Global Architecture (TNGA): A New Approach to Car Manufacturing from Toyota Working Toward Always Better Cars In order to strengthen our research and development systems, we are expanding the role of our chief engineers (CE) as a way of clarifying their position as the development representatives closest to the consumer, thus speeding up the decision-making process. We have also strengthened our design systems by introducing a design process in which the CE plays the central role. In order to make better cars that match the needs of each region, we have strengthened regional R&D bases, posted regional general managers (North America and China, Japan and Europe, and emerging countries), and are coordinating operations with regional sales divisions and research and development bases.

TNGA: A Smart New System for Making Better Cars TNGA represents an initiative to make better cars hereafter and a new framework for car manufacturing that will simultaneously realize a large increase in product appeal and cost reductions at an advanced level. It delivers improved performance in the basic performance of driving, turning, and stopping, and enables the standardizing of parts and major components across different models to reflect the preferences of local markets. Through cooperation between the development and design divisions, newly developed car platforms will help to realize the development of cars with neverbefore-seen inspiring designs and superb handling. The TNGA initiative will commence with three front-wheel-drive platforms (accounting for approximately half the total unit production volume). To coincide with TNGA, Toyota will introduce “grouping development”—the simultaneous planning and development of multiple vehicle models—allowing the standardization of parts and major components across a greater number of car models and cost reductions in cooperation with suppliers. This approach means that development manpower and costs can be targeted at those development processes that relate to customer preferences and region-specific characteristics, thus achieving differentiation and realizing further improvements in product appeal.

Delivering Good Quality at an Affordable Price that Outperforms International Competitors Current R&D Initiatives Improved design

Greater authority to the CE

 Eliminate limiting factors in design and production technology

 Speed up decision-making by responding directly to the chief officer

 Overhaul the design review process (CE is responsible for design review)

 Overall authority of development units for individual models, with responsibility for product group

Stronger emphasis on regional characteristics

Refined organizational structure

 Assess consumer expectations in each market, boost quality and product appeal

 The CE has full responsibility for the whole process of developing a model, and each specialized division develops individual technologies

 Shift resources to expanding markets such as China and other emerging markets

 Further improvements in design  TNGA (Toyota New Global Architecture)  Substantial boost to development efficiency  Stronger focus on markets in emerging economies  Further enhance product appeal through environmental and other technologies

The Toyota Awards were instituted with the aim of making better cars and are determined based on the numbers of votes from all employees.

NS4 (next-generation 4-door concept car: 2.0L PHV) This concept car realizes excellent environmental performance and is fitted with advanced safety technology and technology that links people, cars and social infrastructure. In addition, it achieves high standards across the board, ranging from design and dynamic performance to actual quality feel.

Camry


In order to reflect our policy of “always better cars” in our production phase, we strive for “making better cars” and competitive monozukuri. The automotive industry operates in diverse market environments. While market expansion in emerging nations has created a demand for cars of good quality at an affordable price adapted to regional needs, the limited markets of developed countries are the scene of fierce competition centered around environmentally friendly cars. Moreover, current issues in society ranging from the unprecedented strength of the yen to the crisis in electricity supply—produce very challenging conditions for monozukuri. Nevertheless, Toyota has a strong track record in monozukuri and as a result of technological innovations, the company has overcome a series of major environmental changes in the past, from the oil crises and stringent emissions standards to the bursting of the Japanese economic bubble. Going forward, innovations must focus on the need to become a company capable of Orientation of Production Technology for Making winning in a climate of global competition and delivering to customers quality products at Better Cars more affordable prices. Toyota sees this challenging social environment as a major opportuMaking better cars nity and aims to achieve groundbreaking cost reductions through monozukuri innovations originating in Japan. To reach this goal, we must rebuild our production system, for example Competitive monozukuri by increasing our workplace strength, which is rooted in our knowledge of monozukuri and consummate technological skill; strengthening our technological innovation capabilities by Direction of Technology Innovation integrating advances in production technology together with the creation of new methods and materials and product development; and by developing a three-region system to rebuild (1) One-by-one production production systems based in the Tokai, Kyushu, and Tohoku regions. This policy orientation means (1) One-by-one production, (2) Production at the (2) Production at the optimum speed for sale optimum speed for sale, and (3) Small-scale production, all of which form the basic (3) Small-scale production principles of the Toyota Production System and the concrete realization thereof.

Future Initiatives

The “86” won first place in the New Car Sales category of the 2011 Toyota Awards

8

Innovations in Product Engineering Enable the Making Better Cars

Global Rollout of Innovative Technology Established in Japan In order to manufacture quality products at affordable prices, even in small quantities, we plan to increase the net efficiency rate and universality of our facilities, make possible gradual investment (investment starting at a low level and increasing in line with requirements), and promote the merging and discontinuance of processes as well as other improvements. We believe that this will in turn facilitate localization of production. The following four key phrases form the basis of achieving such technological innovation: “simple and slim,” meaning equipment that is resistant to breakage, easy to repair, and involve reduced depreciation cost; “variable models in variable volume,” meaning introducing small-scale general-purpose lines with simple set-up changeovers to new/different models; “net shaping,” meaning a reduced number of processes and high levels of skill; and “high added value” through miniaturization, higher performance, higher design values, and reasonable prices. Applying this innovative technology will allow timely response to changes in production model or quantity, reducing lost opportunities, and also enable reductions in investment costs, thus strengthening our management systems. Henceforth, Toyota will rapidly develop and mature innovative technologies that focus on Japan and roll them out globally in a timely manner. The basis of production is to manufacture where the market is. We will therefore implement localization of production. Nevertheless, the source of our competitiveness lies in Japan’s strong production sites, advanced production technology, high added-value product manufacturing, and strong sales capacity. In order to maintain and enhance this competitiveness, we are maintaining production in Japan of three million cars and making effective use of this system. This is our approach.

Key Phrases for Technological Innovation Simple and slim  Simple equipment Break-resistant, easy to repair

Variable models in variable volume

 Capital investment reduction Depreciation cost reduction

 High-volume production line Small-scale production line (Eliminate waste of production capacity)

Net shaping

High added value

 Process reduction (Reduce stock removal)

 More compact, higher performance, more stylish, more reasonably priced

 Craftsmanship

Making better cars  Good style, appearance  Stability and controllability  Environment friendly

 Simple set-up changeovers to new/different models

Competitive monozukuri  Following volume fluctuations  Prompt changeovers  More compact at lower cost

*Net efficiency rate: Proportion of input material used effectively in the final output, such as the time and material process yields that increase added value

9

Special Feature Always Better Cars


Launching a world-leading fuel-efficient car, surpassing Prius, “from Tohoku to the world” Debut of the “Made in Tohoku” Aqua, boosting the popularity of hybrid cars and promoting the development of Tohoku

Always Better Cars Special Feature


Toyota has released the hybrid car Aqua for the compact car market—in which demand is the highest—based on the belief that the spread of environmentally-friendly cars will contribute to society. During the launch of the new Aqua, a live broadcast was made from the Iwate Plant in Tohoku where the Aqua is produced. The plant has been reinvigorated by the orders for 60,000 cars prior to the launch and production line operators appeared in the broadcast, speaking passionately about the Aqua. The Iwate Plant commenced production firmly believing that the launch of the Aqua would assist in the revitalization of Tohoku. A plan to make Tohoku into the third car manufacturing hub in Japan after Tokai and Kyushu has now begun.

Seeking to Take Root in Tohoku while Continuing Monozukuri (Manufacturing) Activities at One with the Region, and Aiming to Be a Corporate Citizen that Is Admired In July 2012, Kanto Auto Works, Ltd., which operated the Iwate Plant, Central Motor Co., Ltd., and Toyota Motor Tohoku Corporation were merged to form Toyota Motor East Japan, Inc. The newly formed company will participate in manufacturing globally competitive compact cars, leveraging the innovative technological strengths of its three predecessors. Tohoku’s production sites, including the Iwate Plant, make use of the region’s advantages—such as the local support, outstanding local personnel, and a wide variety of fundamental technologies—to reinforce their capability for compact car production. Toyota Motor East Japan will provide the world’s most attractive compact car that closely fits the needs of customers by creating streamlined and flexible manufacturing sites which handle the production of major components through to assembly, and by making improvements and reforms to car produc-

tion through unified development, manufacturing technology and production. We believe that this will enable us to preserve Japanese monozukuri. Toyota’s quintessential compact car, the new Corolla launched in May 2012, is also produced in Tohoku, at the Miyagi Plant, boosting the local procurement rate to 40% and giving impetus to the car production industry in the region. Production line for the Aqua

Three Key Measures for Providing the World’s Most Attractive Compact Cars Build production infrastructure for compact cars Monozukuri at one with the region Medium- to long-term human resources development

VOICE VOICE

Also, ingenious features support driving to help the driver to better enjoy the capabilities of the hybrid car. These include features to support eco-friendly driving such as Eco Judge, which monitors the level of eco-driving in different driving situations and Eco Wallet, which displays the cost-saving achieved through greater fuel efficiency.

World-leading fuel-efficiency plus exhilarating driving

Stylish, yet surprisingly spacious

A fun and easy-to-use hybrid

Reasonably priced

Aqua received the Selection Committee Special Recognition Award in the New Car Sales category at the 2011 Toyota Awards

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Establish a local-procurement-promotion center in Tohoku (January 2012)

Strengthen local procurement that is at one with regional industry

Strengthen the Tohoku technical center

Promote development of new technologies and parts through partnership with private, public and academic institutions

Establish a training center in April 2013

Contribute to the revitalization of the local economy over the medium- to long-term through development of human resources in manufacturing (accept trainees from local industry)

Comments from the Field

Our motto is “Delivering shiny new cars to our customers”

Aqua – the Ideal Compact Car for 2020 Toyota has sold more than 4 million hybrid cars worldwide since 1997 when it released the world’s first mass-produced hybrid car, Prius, which gained favor with many customers. Over the intervening years, Toyota has expanded its range of cars fitted with hybrid engines to include minivans, sedans, SUVs and wagons, broadening the scope of hybrids. In addition, responding to the increasing environmental awareness of customers in recent years and the demand for fuel-efficient cars, Toyota has developed the compact and affordably-priced car, Aqua. Aqua is not simply a smaller version of the Prius. Instead, the concept behind Aqua is to present a revolutionary hybrid compact car designed for 2020. It is a lighter and more compact, fun and easy-to-drive car, boasting the best fuel efficiency at an affordable price. The car name is derived from the Latin word for water, evoking a clean and free-flowing image, to encourage more people to experience the joy of driving hybrids. It has the same hybrid system as the Prius —the Toyota Hybrid System II (THS II)—but most parts, such as the smaller motor, have been redesigned to make them lighter and more compact.

Rigorously implement manufacturing fundamentals; lean and strong management Strengthen engineering skills and further improve manufacturing capabilities

Develop a profitable management structure for compact cars Strengthen compact car production capabilities

Nobuaki Takahashi

Quality Control Div. Iwate Plant Toyota Motor East Japan, Inc.

Aqua, the first hybrid car we have produced, is the shining star of Iwate for the revitalization of Tohoku. As “Team Iwate,” we have replaced our inspection checklist with an evaluation from the customer’s perspective and, by closely coordinating each process, we succeeded in the early launching of a high quality car. We will continue to aim for even higher quality, with a goal of one day seeing the Aqua sold everywhere as the highest quality car in the world.

Toyota East Japan Technical Skills Academy Contributes to Local Development by Nurturing Talent Toyota has long being engaged in human resource development based on the principle that "monozukuri is about developing people." For Toyota Motor East Japan, it is the Toyota East Japan Technical Skills Academy that will reinforce the foundation of monozukuri by developing people. The Academy's founding concept is to be a school that will cultivate future strength based on three pillars: "human resource development," "environmental and energy management" and "coordination with local communities." In concrete terms, it will establish a Manufacturing Equipment Course for students to learn about production technology and manufacturing equipment, and will recruit new graduates from technical high schools in the Tohoku region. It is a one year program providing approved vocational training based on the Ministry of Health, Labour and Welfare’s Human Resources Development Promotion Act. Of the 1,760 class hours, approximately 60% is dedicated to practical skills training, 30% to general education for the body and mind and 10% to academic subjects. In

addition, programs are planned for learning about the roots of Tohoku monozukuri, club activities and conducting local volunteer work. Through such training opportunities, the Academy will make a medium- to long-term contribution to community development in Tohoku.

Toyota East Japan Technical Skills Academy (artist's rendition)

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Always Better Cars

Always Better Cars


People Lectures etc. to raise awareness of traffic safety


The Front Line of Safety Technology Vehicles

Provide safe and reliable vehicles that

Development of technology for accident avoidance and driver/ passenger protection in a car collision

inspire enthusiasm at affordable prices

Integrated Three Part Initiative to improve traffic safety

Traffic environment Information on traffic jams, and maintenance and management of traffic lights and roads

Basic Concepts of Safety To realize “the safe and responsible ways of moving people” in the Global Vision, Toyota considers safety the most important priority and promotes product development with the ultimate goal of, one day, “completely eliminating traffic casualties.” Toyota promotes the Integrated Three Part Initiative, Safe and Responsible Ways of Moving People viewing people, vehicles and the traffic environment as an integrated whole while pursuing “real-world safety” in product development based on investiga• Ultimate goal to Goal tion of actual road accidents. Also, we advance “completely eliminate traffic casualties” technology development with the Integrated Safety • Integrated Three Part Initiative Approach Management Concept set in 2006 as a basic techno• Pursuing “real-world safety” logical concept ultimately striving toward zero Concept • Integrated Safety Management Concept casualties.

Investigation and analysis of accidents

Active Safety Technology Supports Drivers in Avoiding Dangerous Situations Adaptive High-beam System A high beam that illuminates farther ahead increases visibility when driving after dark. The Adaptive High-beam System controls the headlight projection areas to achieve visibility equal to that of the high beam while reducing vision-impairing glare for other drivers in vehicles ahead (traveling in the same and opposite directions). The headlights' high beams are partially shielded to prevent light from shining directly at preceding and oncoming vehicles detected by an onboard camera, preventing vision-impairing glare to other drivers. Nighttime visibility has also been improved, which further contributes to the quick detection of pedestrians.

The Pre-crash Safety System Evolved from “a System to Minimize Collision Damage” to “a System that Helps to Avoid a Collision”

Pursuing “real-world safety”

Pre-crash Safety System

Pursuing Real-world Safety by Learning from Real Accidents

This technology supports minimizing the damage of collisions by predicting and preparing for a collision. If it registers a high probability of collision with a car driving ahead, it sounds a warning for the driver. When the driver steps on the brake pedal, brake assistance is activated to enhance braking control. If the system recognizes that the collision is unavoidable, it also activates pre-crash brakes to lower the speed of impact as far as possible. In this way, the system supports the minimization of crash damage and avoidance of collisions.

Toyota puts efforts into developing fundamental technology that enables reliable reconstruction of accidents, and has developed a driving simulator for our active safety technology research and a human model known as THUMS*1 for our passive safety technology research. We conduct about 1,600 collision tests annually using actual vehicles. Furthermore, we make research data from our CSRC*2 publicly available. These efforts contribute to the reduction of traffic casualties.

Pre-crash Safety System with Pedestrian Detection and Collision Avoidance Support Functions

*1

*2

Total Human Model for Safety (THUMS), which can simulate the impact on a human body to a degree that cannot be measured with a crash-test dummy. Collaborative Safety Research Center (CSRC) is a research institute for advanced safety technology in Michigan, USA, established by Toyota in March 2011.

Area where the light of a high beam is partially blocked out

Development and assessment

Simulation

Driving simulator to reconstruct accidents for analysis

Stereo camera

This is a system with an advanced Pre-crash Safety System and stereo camera, enabling the detection of pedestrians and supporting the avoidance of collisions with them. The near-infrared projector aids in recognizing pedestrians day or night.

Millimeter-wave radar

Near-infrared projector

Light range Detection range of near-infrared beams Millimeter-wave radar

Detects range beyond headlight beams

Integrated Safety Management Concept Our idea is to improve the safety level through integrating development of various safety systems in a car rather than thinking of each separately. In the pursuit of optimum driving support, the scope of the research is widened from the traditional focus on the moments

immediately before and after an accident, to cover “every stage of the driving experience” from parking, to normal operation, the preand post-crash time-frame, and post-accident rescue.

Integration of Individual Technologies and Systems

Collision Parking

Active Safety

Driving Information and Support

Back Guide Monitor

Distance Warning

Lane Keeping Assist

Lane Departure Warning

Adaptive Frontlighting System (AFS)

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Emergency Response

Damage Mitigation

Passenger Protection

Rescue

Pre-crash Safety System (detects vehicles and pedestrians ahead or to the forward flank)

VDIM Brake Assist Night Vision System

Blind Corner Monitor

Passive Safety

GOA

Radar Cruise Control

Intelligent Parking Assist

G-BOOK, G-Link

Accident Warning & Avoidance

Pre-crash Safety

Network-linked Navigation System

COLUMN

Lexus CT 200h Wins the Five-star Award and the Grand Prix Award under the Japan New Car Assessment Program (JNCAP) Car-safety Evaluation Tests, while 17 Models of Toyota Cars are Granted the American IIHS Top Safety Pick Status in 2012

Since fiscal 2011, the Japan New Car Assessment Program (JNCAP) has integrated car occupant protection and pedestrian protection performance during collisions, providing an overall safety evaluation for automobiles. Safety features of the CT 200h include an impact-absorbing body and highly rigid cabin, Whiplash Injury Lessening (WIL) seats, eight airbags, as well as a state-of-the-art body structure that helps to protect pedestrians from injuries. The CT 200h has received the maximum five-star rating for achieving the highest level of safety, as well as the JNCAP First Prize.

The 17 Toyota cars which received the Top Safety Pick from the IIHS (2012)

Seatbelts, Airbags HELPNET

Toyota: Corolla, Siena, Avalon, Venza, Hilander, Tundra Crew Cab, Prius, Prius v, Prius c, Camry, Yaris

VSC ABS

Vehicle-infrastructure Cooperative System

Rear-end Pre-crash Safety System (detects to the rear)

Toyota received the highest Insurance Institute for Highway Safety (IIHS) automobile assessment, the Top Safety Pick, for 17 models in 2012, the largest number of any automotive manufacturer in the USA. This makes Toyota the leading manufacturer by far.

Collision-safety Body

Lexus: RX, CT 200h, GS Scion: xB, tC, xD CT 200h

The Five-star Award from the 2011 JNCAP

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Always Better Cars

Always Better Cars

Refinement of drawing requirements


Fix it right the first time

Listen sincerely to customer voices and continue

Ji KoteiKanketsu*

EDER (Early Detection, Early Resolution)

to reinvent ourselves through sufficient information disclosure and dialogue

Sales and after-sales service

Purchasing of excellent parts and materials

Ensuring Global Promotion of Quality Initiatives to Regain Customer Confidence

Requirements for processes and parts to produce good products (production engineering)

Maintain and control the standardized work (manufacturing) Enhance teamwork, work related skills and work ethic

Production

*Ji Kotei-Kanketsu: Built-in quality with ownership

Structure of Continuous Quality Improvement Activities in Customer First Program

Basic Concepts of Quality Quality is achieved through the integration of Development, Design, Purchasing, Production and After-sales Service. Each is indispensable in the delivery of satisfactory quality to customers. We continue to aim to put the concepts of “Customer First” and “Quality First” into practice and to respond to the expectations


Purchasing

Development

of customers and society. That is why every member across our operations maintains high consciousness, and takes ownership and the responsibility of striving for continuous improvement and the enhancement of customer confidence and trust by cooperating closely with one another.

The framework for initiatives to regain customer confidence laid down during the 1st to 3rd meetings of the Special Committee for Global Quality was incorporated into the company policy for FY2011 to establish a localized system enabling promotion of activities based on the opinions of customers, implemented at a level closest to the customers of different regions through collaboration between the Quality Function Board and regional quality committees. As part of companywide efforts to increase customer confidence and provide better safety, the main elements of specific quality-related activities in FY2011 were the promotion of the reduction in the failure mode risk ratings, improvement of the confidence ratings, and enhancing of explanations to customers Activities in the Various Fields in FY2011 and Plans for FY2012

Development

• We continued our efforts in activities to achieve zero customer complaints through prevention of recurring problems and prevention of new ones, revised and enhanced our operational processes, implemented early adoption of parts into automobiles incorporating ideas to reduce risk ratings, strived to achieve product safety in diverse projects, endeavored to improve the quality of parts manufactured to Toyota-approved specifications through collaboration with the Purchasing Group and Production Engineering Group, carried out inspections of aged products through the collection of aged parts, and established improvement processes based on external evaluations. • In 2012, we will accelerate our efforts to ensure product safety, and “enhance customer confidence” which is an even more vital theme.

Purchasing

• Focusing on new suppliers, we endeavored to clarify the division of roles with suppliers and enhance mutual confirmation. • In FY2012 we will continue revising our work procedures by clarifying the roles and responsibilities of Toyota and the suppliers, and promote mieruka (visualization) in the supply chain quality control system in association with expansion of suppliers in emerging markets, with the aim of promoting prevention activities.

Production

• As “a key step in delivering high quality cars to customers” we have made concerted efforts to establish “requirements for good products” to realize designers’ intentions in manufacturing processes. At the same time, we have achieved steady progress in our endeavors to enhance the integrity of “Ji Kotei-Kanketsu (built-in quality with ownership)” and thereby build quality into products, and have strengthened final quality inspections. • In FY2012 we will promote “monozukuri (manufacturing) that exceeds customer expectations” by working more closely with Development and other departments.

Sales and after-sales service

• Aiming to establish the industry’s quickest early detection and early resolution system to solve quality problems based on the gathering and analyzing of market information, we have been expanding our customer genchi genbutsu confirmation activities. We respond quickly by gathering customers’ comments from dealers and government offices. • In FY2012, we established a new Customer First Promotion Group to enable us to work closely with and respond to customers as a manufacturer, and we are striving to further enhance customer satisfaction through the integration of manufacturing, service and sales.

“Customer First Promotion Group” Newly Established to Allow Working Closely with and Responding to Customers In an effort to establish a more-reliable system in order to provide customers with a higher level of quality and customer service, we integrated and reorganized the functions of the former Quality Group and Customer Service Operations Group to establish the new Customer First Promotion Group in April 2012. The new group integrates functions to handle quality issues in the service field that is closely involved with customers. The group aims to put our customer first policy into practice by acting from the customer’s perspective and responding quickly and appropriately, striving to

Main Objectives

implement customer-centered sales plans and operational development, and engaging in initiatives to strengthen support for dealers’ service capabilities. A new Customer Service Field has been established within the group, consolidating the support services for dealers and distributors with functions to handle market quality and deal with customers. Initiatives are now underway to establish an early detection, early resolution system to provide one-stop solutions to resolve quality issues quickly and smoothly.

VOICE

Views of the Person in Charge Promoting the enhancement of initiatives bringing together products and services to improve customer satisfaction

 To improve the ability to respond quickly to market quality issues from the customer’s perspective  To strengthen support services for domestic dealers, parts distributors and overseas distributors  To enhance localized collaboration with planning and development functions  To strengthen the establishment of internal systems aimed at quality improvement

Junichi Kobayashi Customer First Promotion Group

Under the new system, we engage in detailed and closer communication with dealers, parts distributors and vehicle distributors to invest the maximum effort into implementing our “customer first” policy, together with our dealers, through the support for repair services, provision and expansion of technological information, and enhancement of services. We also promote the establishment of a system for quickly and appropriately relaying the opinions of customers back to Development, and improving customer safety and confidence through collaboration among Development, Sales and Services.

COLUMN COLUMN

A Quality Web Forum was Held for All Employees to Discuss “What can be Done to be Rewarded with the Smiles of Customers”

During the Month of Quality in November 2011, a Quality Web Forum was held with the aim of “getting each and every employee to think about what they need to do to be rewarded with the smiles of customers.” At this in-house, online forum, the Quality Forum held in 2010 was further developed to allow everyone to hold free discussions on the theme and enhance each other’s awareness. Seven cartoon stories based on real episodes were shown online consecutively over a month, and everyone posted their opinions after reading them. 11,714 members from 264 divisions participated and engaged in active discussion in the forum.

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about our safety features, new technologies and functions. The Toyota Advanced Quality Information Center (T-AQIC) has been deployed globally to gather and analyze quality information for early detection and early resolution to solve quality issues quickly. The system was introduced in North America in November 2011, and in Europe and China in January 2012. In addition, quality risk management was strengthened to clarify the operational rules and processes, and the regulations for quality assurance were also clarified. Furthermore, the principle of “Ji Kotei-Kanketsu (built-in quality with ownership)” was added to the global contents of level-specific education in January 2012 to foster human resources focusing on quality.

Improvement in Evaluation of Quality by Third Party Evaluation Organization

According to the results published in February 2012 of an Initial Quality Study (IQS) of North American automobiles released by J.D. Power and Associates, a global organization specializing in surveys and consulting in customer satisfaction, Lexus rated No. 1 in nameplate ranking while Toyota was ranked No. 7. The results of a Vehicle Dependability Study (VDS) carried out by the same company revealed that Lexus rated No. 1 and Toyota No. 3. As a result, all ratings and scores exceeded those of last year. In addition, in the results of the spring issue of the 2012 Consumer Reports evaluating reliability, road tests and safety, five Toyota cars were chosen in 10 categories. Therefore, we have received proof of the

recovery of customer confidence through a variety of evaluation organizations. We will continue striving to provide automobiles which exceed customer expectations in the belief that “Quality is Toyota’s mainstay.”

Prius

Camry

The Prius and Camry chosen in consumer reports

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Always Better Cars

Always Better Cars



Customer Feedback from Each Country and Region

Delivering universally user-friendly products and At Toyota, in order to offer products and services based on our Customer First principle, we have established customer assistance centers not only in Japan, but also in the U.S., Europe, other Asian countries, and at each distributor around the world. Here we wish to introduce some encouraging customer feedback we have received.

services through monozukuri (manufacturing) that closely responds to customer feedback Customer Assistance Center

Customer Feedback for Toyota

Applying Customer Feedback to the Creation of Better Products and Services Toyota’s principle of Customer First exists for the purpose of providing customers with products and services that earn their smiles. On this basis, we hope to offer cars with superior features in terms of environmental, safety and quality performance, while also offering the intrinsic appeal of cars, such as driving performance, at an affordable price.

Therefore, in order to make better cars, we make rigorous use of customer opinions gleaned from dealers and the Customer Assistance Center.

Toyota Customer Assistance Center and Lexus Information Desk

Ongoing Customer First Staff Education

The Toyota Customer Assistance Center, as well as the Lexus Information Desk dedicated to Lexus brand models, offers toll-free phone consultation 365 days a year and accepts brochure requests 24 hours a day in Japan. With this convenient customer-oriented system, we offer speedy, appropriate and empathetic responses to customer inquiries, and listen to opinions and requests, based on our policy of Customer First. At the same time, we undertake initiatives to link this feedback to the creation of better products and services. Furthermore, in order to support dealers in implementing the Customer First policy, we have established the Salesperson Support Desk. We also conduct surveys of customers who use our telephone service via an automated response system, in an effort to make further improvements. One such improvement made was the establishment of a team specialized in navigation and audio systems to be able to quickly and appropriately respond to technical inquiries.

At Toyota, we have named the nationally designated Consumer’s Month of May as Customer’s Month, and we are continuing to undertake initiatives aimed at permeating awareness of the Customer First principle throughout the company. In FY2012, we held customer feedback experience events, exhibitions, and lectures with the aim of helping each employee to take personal responsibility for customer feedback, and encouraging them to take action. These events were based on the theme “What do you do from the customer’s point of view to gain their confidence and be rewarded with a smile?” The events were attended by representatives from each division, who visited the Customer Assistance Center and monitored customer feedback. At the exhibitions, we conveyed feedback from customers and presented examples from within Japan and overseas of customer feedback activities implemented by each division from the customer’s perspective. A lecture was provided inviting a guest from another company practicing the Customer First policy to speak on the theme of “Excellent monozukuri that emphasizes safety and confidence.”

No. of calls

Consultation

397,000

335,000

CarNavigation related and audio (specifications, systemsequipment, related etc.)

21%

42%

2%

35%

36,000

Promoting the “making better cars” policy • Applying customer feedback on current cars to future development

Sales and After-sales Service

Creation of easier-to-understand customer information tools • Improvement of brochures, instruction manuals, etc. based on customer feedback

Exhibition held during Customer’s Month

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lit While travelling back to my hometown, suddenly a warning lamp up. I had the car checked out at a Toyopet dealer I was passing, and they fixed it for free. Thank you so much!

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The revival of the “86,” like the recent Doraemon commercial, makes me realize the changes at Toyota. I look forward to seeing what’s next in terms of both new Toyota products and overall developments!

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My mother, who is now 90, still drives her 1985 Camry. For me, it shows the durability and vitality of Toyota. There were problems with the car I purchased, but the salesperso ns at the dealer immediately adjusted their schedule to suit my needs and worked hard to sort out the issues. It was great service. I want to thank Toyota for constructing 14 plants in the US.

Europe ●

●

Asia/Africa

I’ve had an MR2 for 10 years, and have driven it 320,000 miles (512,000 km) on the original engine. That’s a record for me.

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My 1986-registered Tercel 4WD is already 25 years old, but is so sturdy that even my friends praise it.

●

●

The Land Cruiser 80 which I bought over 10 years ago is reliable even under Russian weather conditions; it’s powerful, and sets my mind at ease.

ng it in turn to hit the car in My car was struck from behind, causi technology saved me. a’s Toyot ed. front, but nobody was harm Prius. The sales agent was new a t bough I since It’s been one month I want to express our ease. at feel me and young, but made my wife gratitude.

●

and now my father owns Our first family car was a Corolla, I’m proud to be a Toyota owner.

a Camry.

Universal Design (UD) Cars are a means of transportation used by a variety of people under a variety of conditions. Toyota endeavors to build people-friendly automobiles bearing in mind the relationship between diverse needs and cars which meet those needs. Universal design based on ergonomics is part of that effort, and we conduct product development tailored to users and their use environment.

Enhancing the Welcab Lineup for More Comfortable Mobility

26,000

Product Planning


●

the When I had an accident in my LS, I was protected, surrounded by airbag and side-cushioning. I truly believe it is an extremely safe car.

Other Brochures (car delivery Opinions and Salesperson requests date, etc.) requests support

Utilization of Customer Feedback

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●

●

No. and Content of Calls Received by the Center and the Desk in FY2011

North America

Japan

With a philosophy of “providing freedom of moving in comfort to all people,” Toyota has worked towards the development and popularization of its assisted-mobility cars, the Welcab series. In order to respond to diversifying needs in assistedmobility vehicles, in FY2011, we deployed a total of 60 types of 30 models, including care-giving, and self-operation models. Toyota is also encouraging the establishment of Welcab Stations at Toyota dealers nationwide, which have been rolled-out to a total of 112 dealers and 195 sales outlets (as of the end of March 2012).

COLUMN

Welride: A Feature Allowing a Wheelchair User to Board a Minivan with High-positioned Seats The Welride, released in December 2011, is equipped with systems that are first of their kind in Japan, enabling wheelchair users to transfer to the high-positioned seat by themselves and store their wheelchair using a remote control. This was in response to feedback from people who use wheelchairs but have relatively strong upper bodies and who want to drive by themselves or drive their families around. During development, we sought evaluation directly from vehicle users at numerous eminent rehabilitation centers in Japan, and engineered the hook and handrail shapes, and the hoist based upon customer feedback. Welride has been fitted into the Alphard/Vellfire and Estima.

Welride, which offers wheelchair users the new option of driving a multi-passenger minivan

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Nobuyori Kodaira Executive Vice President

Contributing to the creation of next-generation communities, pioneering the future of the automotive industry, and realizing new mobility societies and affluent local communities

A variety of problems exist in our rapidly progressing modern society. These include responses to energy problems and global warming, the preservation of biodiversity, food and water shortages, poverty, discrimination, unemployment, a falling birthrate and the aging of societysome of which are global issues, while others differ by region. Corporations such as Toyota, which are rooted in each local communities, must work to resolve these issues. To achieve this end, our Global Vision declares that we will contribute to enriching lives of communities as well as the making of “always better cars.” Toyota proposes amenable, low-carbon mobility in addition to new lifestyles involving, for example, the early practical application of personal robots that provide support for medical care and nursing. We also contribute to creating comfortable, livable communities by developing and promoting next-generation, eco-friendly cars including hybrid vehicles (HVs), as well as safe mobility through interaction with transport infrastructure. We will proceed forward together with members of each region to accomplish our goal of enriching lives of communities.

More Linked Cars for a More Linked World: Safe Mobility through Interaction with the Transport Infrastructure

Contributing to New Mobility Societies In order to ensure the sound future development of a mobility society that relies on automobiles as a means of transportation, it is necessary to minimize their impact on the environment while significantly reducing traffic accidents, traffic congestion, and other negative aspects. Based on the concept that the spread of eco-friendly cars is the key to their contributing to society, Toyota is developing and promoting various eco-friendly cars that will help realize a low-carbon society. In addition, we provide safe mobility through interaction with transport infrastructure, amenable, low-carbon mobility, and new societies that link people, cars, robots, and houses. In this way we are actively working toward realizing sustainable, affluent societies.

Efforts to improve the safety of the cars themselves are basically a major component of our initiatives. We also work to further improve the safety of cars by linking them with infrastructure. For example, our efforts include improving car safety by automatically detecting dangers in accident-prone areas such as

intersections and warning drivers of such dangers. We introduce such systems and technologies that have passed verification stages through cooperation with the nation, government, and related industries.

More Linked Cars for a More Linked World: New Lifestyles Contributions through Cars Aimed at a Low-carbon Society The Prius went on sale in 1997 as the world’s first mass-produced HV. Other HVs have since been introduced and are currently sold in approximately 80 countries and regions around the world. In April 2012, cumulative sales of HVs exceeded four million units, with a CO2 emissions reduction of roughly 26 million tons. The Prius PHV went on sale in December 2011, and the RAV4 EV is scheduled to go on sale after summer 2012. Furthermore, Toyota intends to enter the fuel cell car market in around 2015.

Unit: 1,000 cars (the right-hand scale applies to the line graph) 4000

Cumulative HV sales 800 700

3500

Aqua

600

3000

500 400

2500 2000

Prius

300

1500

200

1000

100

500

0

With the goal of achieving societies where all people are able to lead more enjoyable, affluent lives, Toyota is developing partner robots that are useful to people by combining cutting-edge technologies from various disciplines including the robotic, automotive, and IT fields. For example, we are currently developing and testing assist robots which provide support in various realms of nursing in order to fulfill the needs of an aging society together with specialized medical institutions, with the aim of practical use in the early 2010s.

’00

’01

Japan

’02 Overseas

’03

’04

’05

’06

’07

’08

’09

’10

’11

’12

0

Contributions through Our Business Activities

(Jan.–Apr.)

Total

More Linked Cars for a More Linked World: Smart Communities Toyota is also resolving issues by linking cars and society—not only with people, but with houses and infrastructure as well. The Smart Grid to which Toyota has been devoting energy in recent years is one representative example. Toyota’s concept of the Smart Grid involves linking cars, houses, and society via Toyota Smart Center, and improving energy efficiency through energy management as a means to contribute to a low-carbon society. Cars account for a sizeable proportion of the energy used in regular households. Because Toyota also sells PHVs and EVs powered by electric motors, we believe there is much we can accomplish in this field.

Patient transfer assist robot

In addition, we have been engaged in our housing business, Toyota Home, for over 30 years. We began selling SINCÉ feelas, a type of Smart House, in April 2012. Furthermore, we have made accomplishments in relation to car telematics through activities including the G-Book. By making use of these strengths for initiatives in this field, we intend to help realize a low-carbon society and create pleasant, convenient lives.

We are working to resolve various issues through the evolution of cars themselves and via links with cars. We have a fundamental role that we must fulfill as we carry out our business, which includes responding to issues related to employment and the aging of societies. Toyota produces automobiles in 50 countries across the globe and has over 300,000 employees. Furthermore, the number of relationships we have is dozens of times greater if we include the dealers and suppliers that support us, as well as the family members that support them. We believe that our role is to contribute to employment and the affluence of communities by carrying out sustainable business—with no peaks or troughs—together with the people who support Toyota. Toyota will continue to contribute to the sustainable growth of local communities through cars themselves, links with cars, and our business activities.

A townscape from the Toyota City pilot project—a Smart Community with the aim of zero CO2 emissions from houses and cars

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Special Feature Enriching Lives of Communities


Linking Cars, Homes, and People—the New Future Envisioned by Toyota

With changing social conditions and technological innovations (as exemplified by declining birth rates, the aging of society, and energy diversification), the role of the car is likely to extend beyond just providing a means of transport to becoming a part of society and people’s lifestyles. To create the possibility of economic growth without the intensive use of energy and resources and contribute to a sustainable, low-carbon society, Toyota is moving beyond the existing framework to produce new cars with added

1

Participating in Demonstration Tests in Various Countries and Regions

value and appeal. Furthermore, with respect to people’s lifestyles and activities, we wish to continue contributing to the creation of genuinely prosperous lifestyles with peace of mind for everyone.

This is the Smart Grid Envisioned by Toyota! Cleverly controlling PHV and EV battery charging and household electricity


Providing an information center for the diverse energy uses of households

2

3

Effective energy use in the whole region

Rokkasho Village, Aomori Prefecture

Collecting data

Ad

vic e

da ta ng cti

Strasbourg

America

Toyota City, Aichi Prefecture Kitakyushu City, Fukuoka Prefecture

Boulder, Colorado

EV/PHV Towns

• As a result of the demonstration tests, several products have been put into production and commercialized (Toyota Smart Center, G-Station, H2V Manager, etc.)

• See below

Kitakyushu City, • Commencement of energy data analysis using FEMS (Factory Energy Management System), a fixed electricity storage system utilizing spent nickel-metal hydride Fukuoka Prefecture batteries from hybrid vehicles, and a solar power generation system

Boulder, United States

• Monitoring of 108 households where 18 PHVs were used on a rotational basis for three-month periods, evaluation of PHV usability, and observation of reactions to battery charging time controls

INES project, France

• Testing of optimal control of PHV battery charging in a large parking lot with solar power generation

PHV demonstrations • Observations of vehicle use and customers’ battery charging behavior in the market and application of findings to the development of the Prius PHV • Application of demonstration test results to increase PHV appeal and to PR activities within Toyota and externally

Aiming to Create Clean and Comfortable Next-generation Communities (Smart Melit: Smart Mobility & Energy Life in Toyota city)

Smartphone Covered by stored electricity

Using no electricity

Toyota’s Role in Creating Communities of the Future


INES project

ata

gd

lle

ctin

lle

Co

Co

Information center

Storage battery

20

Rokkasho Village, Aomori Prefecture

• Steady progress has been made in the horizontal expansion of demonstration tests to Toyota City (smartphone apps, predictive algorithms, etc.)

Solar panels

Toyota is making use of smart grid* technology from the perspective of vehicle users by linking cars, homes, and people to help customers live comfortable, low-carbon, and energy-efficient lifestyles, as well as to assist in creating next-generation “smart communities.” In the future, as the use of eco-friendly vehicles including plug-in hybrid vehicles (PHVs) and electric vehicles (EVs) expands, the peak electricity demands of communities will increase if battery charging commences simultaneously. The optimal way to control battery charging is an important issue in the popularization of eco-friendly vehicles. The “smart house” developed by Toyota Home is equipped with a solar power generator and functions to efficiently control electricity consumption, thus providing an ideal method of utilizing self-supplied electricity and managing battery charging for cars. This initiative for battery charging grew out of a single PHV and one smart house, and will be expanded in stages to eventually create large eco cities. This is the smart grid envisioned by Toyota. Toyota has vast expertise in the numerous technologies needed for the operation of smart grids including of course vehicle technologies, and also IT and housing-related technologies. These will be incorporated into smart grids, or smart communities, in cooperation with various industries and local governments. Cutting-edge information technologies and extensive information management infrastructure are also needed. By coordinating this

Japan

Main Advances and Demonstration Test Results for FY2011

Toyota City, Aichi Prefecture

Substantial electricity usage

China Tianjin/Beijing

France

Toyota participates in demonstration tests in several locations worldwide to realize the smart grid that the company envisions and popularize next-generation environmentally friendly vehicles. Through these tests, Toyota has developed new technologies and evaluated the usability of cars, peripheral devices, and so on from the customer’s perspective.

Information center

Battery charging stand


Special Feature

with future car manufacturing, cars will become not just a means of transport, but also a contact point for people’s daily lives and an important element of social systems. Providing comprehensive lifestyle support services to customers through cars—Toyota believes that this will be a valuable business that will respond to communities’ requirements and contribute to environmentally friendly societies of the future.

* Smart grid: In general terms, the smart grid is a new power network for achieving stable electricity supply and energy saving by controlling supply and demand through the use of information technology.

In one of the demonstration test—the Smart Melit: Smart Mobility & Energy Life in Toyota city—the Ministry of Economy, Trade and Industry and Toyota City, in conjunction with private enterprises including Toyota, is undertaking initiatives relating to the creation of a low-carbon society and alternative energy. The trial involves the monitoring the owners of 67 smart houses, that had undergone demonstration tests, for the optimization of energy use in their daily lives (at home), during transportation (PHV/EV, traffic systems), and at destinations (commercial or public facilities, etc.). Outline of Trial Targets

Aims

Controlling organization

A 20% reduction in CO2 emissions from household energy use and a 40% reduction from the transport sector

As one of the projects in the Ministry of Economy, Trade and Industry’s Demonstration of Next-Generation Energy and Social Systems, creation of consumer-oriented low-carbon communities

Smart Melit: Smart Mobility & Energy Life in Toyota city, comprising 33 organizations including Toyota City and Toyota (as of April 2012)

Demonstration test period Five years from 2010 to 2014

Demonstration test contents The occupants who purchased the 67 Toyota Home’s smart houses are being monitored with the aim of optimizing energy use in their daily life. To link this with the construction of low-carbon traffic systems, approximately 4,000 publicly available PHVs and EVs are included in the trial.

Outline of the Smart Melit: Smart Mobility & Energy Life in Toyota city Combined spheres of life

Support of consumer activities and optimization of energy use by overall society Realization of an environmentally friendly lifestyle with a reasonably high quality of life Analysis of energy usage data using an Energy Data Management System (EDMS) Allowing visualization of energy saving Balance of supply and demand in anticipated battery charging and discharging Provision of incentives by awarding eco-points, etc. Giving commendations, etc. for eco activities

Optimal energy utilization within households Within households

Model regions in urban centers Preliminary introduction of trial technology and provision of locations for showcasing purposes in Japan and overseas

Controlling of devices for energy generation, energy saving, and energy storage, and optimization of electricity use from solar energy

Development of Home Energy Management System (HEMS) devices and systems with storage batteries Visualization of electricity consumption and calorific values, etc.

Toyota Home’s smart house, SINCÉ feelas, launched in April 2012

The aim is to achieve optimal energy use in these combined spheres of life to create next-generation low-carbon societies in regional cities. The plan is to construct low-carbon social systems that provide a high level of resident satisfaction, and which are the most cost-effective in the world, over the five years of the demonstration test period between 2010 and 2014, and then to communicate this to the rest of the world. It is also hoped that the results may be of assistance in creating new communities when rebuilding areas damaged by the Great East Japan Earthquake.

Development of PHVs and EVs with battery charging and discharging capabilities

Construction of low-carbon traffic systems Transportation

Provision of diverse means of transport and their coordination to reduce carbon emissions Promotion of usage of public transportation by utilizing a Traffic Data Management System (TDMS) Promotion of shared use of personal mobility and next-generation vehicles Introduction and promotion of next-generation vehicles Installation and expansion of battery charging infrastructure and hydrogen stations Use of ITS to ease traffic congestion and promotion of eco-driving

Optimization of energy use in commercial and public facilities, etc.

Destinations Maximum use of untapped energy at destinations and at community level

Use of EV and PHV onboard storage batteries for power supply during power failures and disasters Installation of infrastructure for battery charging from renewable energy Utilization of wood and other biomass energy Introduction of power storage equipment at commercial facilities (convenience stores, shopping centers, etc.)

21

Enriching Lives of Communities Special Feature



Special Feature

EDMS Initiatives for Realizing a Comfortable, Environmentally Friendly Society

Demonstration Tests for TDMS as Part of a Low-carbon Transport System

The Smart Melit: Smart Mobility & Energy Life in Toyota city involves the introduction of an original Energy Data Management System (EDMS) to achieve optimal utilization of energy across combined spheres of life. This project is also testing the provision of services for optimal lifestyles. By connecting the energy management systems of each household, data on the electricity consumption of the whole region is gathered and analyzed and the amount of solar power that can be generated is predicted. This information is used to encourage carbon reductions and shift peak electricity demand through measures such as varying the timing of battery charging. Mechanisms for achieving a low-carbon society that can be enjoyed by consumers are also being considered alongside the establishment of indicators for satisfaction with eco-lifestyles. In this way, the project is testing the provision of services for optimal lifestyles. In addition, plans are also being implemented to increase environmental awareness through initiatives such as awarding points according to electricity generation and power saving, and establishing a system of commendation.

In addition to reducing carbon emissions by using next-generation eco-friendly vehicles such as PHVs, EVs, and FCVs for transport, improving traffic flow and promoting the eco-driving of vehicles equipped with ITS, the Traffic Data Management System (TDMS) was developed with the aim of constructing a smooth traffic flow system by providing guidance on optimal modes of transportation according to actual conditions. Demonstration tests of the system will commence in FY2012. TDMS is a traffic system that is intended to form a part of smart communities by balancing supply and demand in traffic and improving energy Outline of the Smart Melit: Smart Mobility & Energy Life in Toyota city utilization effectiveness through coordination with regional energy management Reducing congestion and ITS Transportapromoting eco-driving using ITS systems. Specifically, it will gather tion and Hydrogen station driving data BRT transportation and driving data within FC bus regions by coordinating with the Toyota Smart Center IT platform. The aim is to Charging station Toyota City Hall construct an urban traffic system that will with solar panels PHV Charging Toyota HV bus PHV/EV demand bus Power supply reduce carbon emissions and deliver Smart TDMS Center smooth transportation by providing Toyota Promoting the information and guidance from time to City Station Rail introduction of nexttime on optimal modes of transportation generation automobiles (such as car sharing “park and ride,” etc. Guidance Smart parking and coordinated with public transportation Car sharing Promoting the use of public information Park and ride transportation availability).

* EDMS (Energy Data Management System) EDMS was developed to enable energy management in the pursuit of optimal energy use in living spaces at the community level. Electricity supply and demand is balanced by measures such as the transfer of surplus power, not just between smart houses but also at the level of the surrounding community, including convenience stores and schools. In addition, trials for achieving optimal energy management are being carried out using information and communication terminals such as smartphones to link cars, homes, and people in real time.

Outline of Results of Energy Use Optimization within Households in FY2011 Reduction in Energy Consumption through the Introduction of EDMS

Reduction in Electricity Consumption through EDMS

Trial Results in Shifting of PHV Battery Charging Times Using a system similar to the carbon reduction incentives, trials were conducted on the shifting of PHV battery charging times through a service provided by EDMS for peak electricity consumption. By means of advice on ideal battery charging times and the awarding of points, there was a change in conduct with 84% of users charging batteries at the ideal late night time.

VOICE

Comments from a Smart House User

VOICE

Rate of reduction

Demonstration contents

Data on the power consumption of each household is gathered through EDMS (11 households with EDMS as of May 2012), while trials using the points system as an incentive to encourage carbon reductions are being carried out. Regarding the energy transferred within a community, the lower the amount of carbon, the more points awarded. Compared to smart houses of the same standard in which the service has not been introduced, there was an average reduction in the community in electricity consumption of around 30% (equivalent to a 34% reduction in carbon emissions).

Instructions on ideal battery charging times

Visualization period

-8.1%

*Explanation detailing how late night PHV battery charging is beneficial to local production of energy for local consumption

Incentives given for battery charging times

DR points period

*Introduction of a system in which a large number of points are awarded if PHV batteries are charged late at night

Recommendation period

Information provided on more effective electricity use through analysis

*Information was displayed in special photo frames showing messages such as “Tomorrow will be sunny. Recommended car battery charging time from 11:00 a.m. to 4:00 p.m.”

-30.7%

-25.2%

DR Points and PHV Battery Charging Times (Households with EDMS) kWh 500 450 400 350 300 250 200 150 100 50 0

Power consumption for PHV battery charging before DR points implemented (total for the time zone in the community) Power consumption for PHV battery charging after DR points implemented (total for the time zone in the community) DR points during the implementation period (median)

Points 15 10

Incentive points

(Proportion to carbon coefficient)

0 -5 0:00

12:00

23:00

-10

*DR (demand/response): Indicates regional energy conditions and encourages restraint in power consumption

Striving to balance the environment and consumer satisfaction

 Solar panels and storage batteries provide peace of mind, even in an emergency  I try to do the housework when I have plenty of solar power  It’s handy because I can see how much electricity I’m using in which room.

Masayuki Kawamoto R&D Management Div.

 I decide on my target electricity costs and take care not to exceed them

Based on regional electricity consumption data gathered by EDMS, we are implementing initiatives to allow citizens to lead environmentally friendly lifestyles that are comfortable and enjoyable. In the Smart Melit: Smart Mobility & Energy Life in Toyota city, based on the idea of effectively utilizing natural energy to reduce carbon emissions, power generated by solar panels in each household is saved in storage batteries and excess amounts are shared across the region. The cornerstone of these trials is EDMS. There is strong interest in smart houses among people in the region, and between September 2011 and May 2012 40 households moved into smart houses and are cooperating in the demonstration tests. We are keen to promote activities that balance the environment and consumer satisfaction, and that are aimed at the creation of next-generation communities that are both environmentally friendly and comfortable to live in.

EDMS Demonstration Plans

Construction of basic systems

FY2011

FY2012

EDMS, HEMS, and effective regional energy management (visualization) demonstration outcomes

Commencement of the first occupancy period

Toyota City (Takahashi and Higashiyama districts) 67 houses (consecutively from September)


EDMS, HEMS, cars, people, and incentive models (behavior support) demonstration outcomes Toyota City demonstration tests coordinated with demonstration tests conducted by other regions

HEMS development phase

Fixed controls (nighttime battery charging, daytime use)

EDMS individual services

Optimization through settings done by the consumer based on EDMS information (e.g., PV battery charging in sunny weather)

FY2013

Demonstration tests of regional carbon emissions reductions through total energy management, including transportation

FY2014

As an initiative to achieve a low-carbon society through the utilization of public transportation, Fuel Cell (FC) buses are being trialed in the types of environments in which they will actually be used. FC buses use fuel cells as their power source to generate electricity via an electrochemical reaction of hydrogen with oxygen from the air. Producing no CO2 or exhaust gas by-products other than water, the buses will provide clean and highly efficient public transportation for the near future. In addition, as they can also be used as power generating equipment, a single FC bus can provide supplementary electricity to an ordinary household for a month and thereby FC buses can contribute to society as emergency power sources. FC bus

Use of Ultra-compact EVs in Next Generation One-mile Mobility To promote a modal shift to the coexistence of cars with public transportation, demonstration tests for “one-mile mobility” will commence in FY2012. The objective of one-mile mobility is to construct a next generation feeder transport system using ultra-compact EVs. The “last mile” is the distance between the home or other daily destinations in daily life and rail, bus, and other key transport systems. The aim is to promote the use of public transportation for traveling these short distances and contribute to the realization of a low-carbon society.

Summarization of demonstration results and reconstruction of the system for commercialization

Activities for global standardization of Toyota City’s urban area demand management system

HEMS improvement/validation phase

Predictive learning control (use PV battery to the maximum, late night charging for further use)

EDMS – HEMS coordinated control

Electricity use control corresponding to the EDMS unit price (interlocked with the carbon coefficient)

Demonstration end

FY2010

FC Bus: Clean Energy Public Transport of the Near Future

5

Comments from the Employee in Charge of Demonstration Tests

 Living in a smart house increased my awareness of power saving

22


23



A Linked Mobility Society

A Linked Mobility Society

Cooperation with Communities and Infrastructure: Basic Concept of Vehicle-infrastructure Cooperation

ties to improve the quality of life (QOL) of all people

A New Lifestyle: Basic Concept of Partner Robots Amid the aging of society, declining birth rates, global warming, and other major environmental changes, societal expectations are looking toward further sustainable mobility and universal robots. In line with our philosophy of contributing to the community and people by enriching society through manufacturing, in order to realize societies where all people can lead more enjoyable, affluent

lifestyles, Toyota is developing partner robots that are useful to people by combining cutting-edge technologies from various disciplines including the robotic, automotive, and IT fields. In the future, expanded pilot projects will be carried out at the same time as development, with the goal of practical use in the early 2010s.

Onboard safety equipment and systems are evolving at Toyota, where the latest Intelligent Transport Systems (ITS) technology is being applied to the development of Vehicleinfrastructure Cooperative Systems with relevant government agencies and other private corporations. These systems enable information that onboard sensors fail to acquire to be transferred from sensors installed on the roads to vehicles, as well as shared between vehicles. Providing the driver with such information leads to safe driving and accident prevention.

As society ages and birth rates decline, Toyota aims to improve the quality of life (QOL) of all people in realms such as nursing, medical treatment, and daily life. Toyota develops and tests a wide range of assist robots through medical and engineering cooperation with organizations such as the Toyota Memorial Hospital, Fujita Health University, and the National Center for Geriatrics and Gerontology. These robots are used to support physical functions such as walking, movement, and patient transfer from indoors to outdoors, independence to nursing support, and the recovery of functions to assistance.

VOICE

Comment from a Medical Professional Expectations for practical application based on a high degree of perfection

Eiichi Saito Professor Fujita Health University

Robots are the only solution to providing support in the aging society of the future. Research is being undertaken on various types of robots, and I look forward to the practical application of robots such as the Walk Assist Robot based on its high level of performance.

Reduces the burden on family members, caregivers, and helpers by supporting movement between rooms, as well as when getting onto and off the bed and toilet, during nursing care

Assists walking to support independence in the daily lives of people who have difficulty walking or who have suffered leg paralysis due to a disability Independence

Independent walk assist robot

Patient transfer assist robot

Assist robots that support patient independence, exercise, and nursing are currently being developed and tested Walk training assist robot

Supports the recovery of natural walking functions through walking training for people who have difficulty walking due to a disability

24


Exercise

Autonomous safety systems Autonomous safety systems

Vehicle-infrastructure Cooperative Systems that support safe driving Increased awareness of people

Vehicle-infrastructure Cooperative Systems that support safe driving

20XX (Present – Future)

Head-on collisions

Rear-end collisions

Solo vehicle accidents

Accidents at intersections

Accidents involving motorcycles/ motorbikes

Accidents involving bicycles

Accidents involving pedestrians

Overview and Progress of Vehicle-infrastructure Cooperative Systems that Support Safe Driving Support system 1

Partner Robot Solutions

Effects of Vehicle-Infrastructure Cooperative Systems that support safe driving Reduction of deaths and injuries

create mutual links between cars, people, and communi-

Effects of accident reduction

Through the development of new mobility and robots, we

ITS spot services (Dedicated Short Range Communication [DSRC])

Dedicated Short Range Communication (DSRC) is a traffic information service that, as an addition to conventional ETC services, operates primarily on expressways and uses bidirectional communication between vehicles and infrastructure to support safe driving. Specifically, this system makes it possible to inform the driver of dangers at the earliest opportunity, such as by notifying the driver of any stationary vehicle or traffic congestion beyond a curve that affords poor visibility before the driver reaches the curve, and also by notifying the driver of falling objects before they are encountered. Operation of this system began in FY2009. DSRC units for ITS spot services went on sale at the same time, and the number of adopted models for the service has been expanding gradually. As of May 2012, infrastructure was installed at 1,600 locations throughout Japan, mainly on expressways.

Support system 2

Congestion Roadside sensor

ITS spot (DSRC antenna) Caution

Congestion ahead. Proceed with caution.

Providing information on obstacles ahead

Driving Safety Support Systems (DSSS)

This system supports the safe driving of a vehicle by sending information from transport infrastructure to the vehicle, including information on areas with poor visibility and traffic control information (traffic lights, signs, etc.), with a main focus on ordinary roads. It also supports safe driving by preventing drivers from overlooking red lights by informing them of red lights before they reach intersections with traffic lights, and also by preventing accidents caused by collisions through the provision of information on nearby vehicles at intersections with poor visibility. In tandem with the introduction of this service in 2011, Toyota installed DSSS driving support functions on its HDD Car Navigation Systems.

Probability of running a red light detected

Warning beep: “Red light ahead”

Traffic signal information received Infrared beacon

Sending red light warnings

Nursing

Support system 3

Researching and developing next-generation systems (communication systems among vehicles or between vehicles and pedestrians) to achieve further evolution

In addition to bidirectional communication between vehicles and infrastructure, Toyota is working to develop services that contribute to environmental improvements and further reductions in the number of traffic accidents through the direct communication and continuous exchange of information among vehicles, or between vehicles and pedestrians. These systems aim to prevent collisions between vehicles and pedestrians at intersections where there is poor visibility, as well as to prevent crashes and other accidents with oncoming vehicles when making a right-hand turn. Toyota is engaging in proactive development to enable the early practical application of these systems through participation in Toyota City driving experiments on public roads from March 2012 and other initiatives.

Roadside wireless device

Warning beep Infrared beacon

A vehicle making a right turn Pedestrian

Pedestrian detection sensor

Systems that help drivers avoid overlooking pedestrian crossings

25



Contribution to the Environment

Contribution to the Environment Summary of Toyota’s Initiatives on the Environment

Reduce environmental burdens and create a sustainable society through lifecycle by developing various eco-friendly

Toyota aims at globally “establishing a low-carbon society,” “establishing a recycling-based society,” and “environmental protection and establishing a society in harmony with nature” to contribute to sustainable growth of society and the planet based on the Fifth Toyota Environmental Action Plan. To realize those aims, we reduce the environmental impact at all stages of vehicle life cycle from development and design, procurement, production and logistics, sales to waste and recycling, and promote environmental management.

vehicles and technologies and making them prevail

Establishing a low-carbon society Significantly reduce GHG emissions

Various activities with an eye on energy-saving, lower greenhouse gas emissions at various stages of business activities including development of next-generation environmental vehicles to establish a low-carbon society

Establishing a recycling-based society

Ultimate Eco-Car

Wire harness using pull-tab type grounding terminal

Average Fuel Economy Meter

Diesel HV

Plug-in HV THS II

Use of renewable energy considering the characteristics of each nation and region (Photo: Tsutsumi Plant)

Hybrid Technology

Synthetic fuel CNG

Diesel engines

VVT-i

Gasoline engines

Continually reducing water use (Photo: Australian rain water project team)

EV

The right vehicle for the right place at the right time Alternative fuel engines

Promoting biotechnology and afforestation business (Photo: Example of roof greenery with maintenance-free TM9 Korai turf)

The Fifth Toyota Environmental Action Plan

D-4

Lean burn

Eco-driving enlightenment activities (Photo: A Camry’s average fuel economy meter and current fuel economy meter)

Promoting integrated actions on CO2 reduction (Photo: Smart House collaboratively controls home electric appliances, cars and solar power to use home energy more effectively)

DPNR

Common rail DI

Pull-off direction

* The average fuel economy meter and moment fuel economy meter occupy the same instrument face, so it shows the average figure of 17.5 km/L on the right and the moment figure of 25 km/L on the left.

Further performance improvement through the use of hybrid technology

Bio fuel

When dismantled

Assembled condition

Moment Fuel Economy Meter

FCHV Alternative fuel HV

Promoting 3R (Reduce, Reuse, Recycle) and increase resource productivity on the assumption that various resources are limited

Returnable containers

Activities to reduce CO2 by further improvement of transport efficiency (Illustration shows reduction of total transport distance through transporter truck modification)

The wiring harness can be stripped out without interfering with other components.

Separates at the thinner areas

Use of the “Easy to Dismantle Mark” The “Easy to Dismantle Marks” are added to show key points for disassembly tasks.

Instrument panel removal The positioning of the V grooves makes it easy to remove the instrument panel by pulling it strongly.

Examples of “easy to dismantle vehicles” items

Environmental protection and establishing a society in harmony with nature

Internal reutilization Intra-process reutilization

Products Resource input

Receiving and continuing the blessings of nature

Electrical energy

Wire harness layout innovation

Contributing to the establishment of a society in harmony with nature by reducing the environmental impact and taking into consideration biodiversity

*1. Waste at cost

Recycling for profits Waste at cost*1 Incineration of waste Landfill waste

Waste

Materials discarded that are recycled for a fee

Development of next-generation vehicles using electricity, and promoting combination of different power sources in ways that maximize the strengths of each

Enhancing development of recycling technology for effective reutilization of resources(Fig. Resource flow)

Toyota vehicles have been certified 50% lower than standard levels for 2005 or better.

Enhancing management of harmful chemical substances contained in products (Photo: REACH briefing session)

Expanding the use of waterborne paints worldwide

Promoting community- and society-based forestry initiatives (Photo: Toyota’s Forestry brochure)

TOYOTA Shirakawa-Go Eco-Institute The institute's Nature Coexistence Projects won the Minister of the Environment Award for Corporate Activities on Biodiversity

Commemorative ceremony marking the cumulative total of 100,000 visitors to the Forest of Toyota

Environmental management Promoting environmental management to stakeholders such as consolidated subsidiaries, business partners and employees. Assuming the basis for contributions that can achieve the three types of societies listed above. Design and Prototype

Planning Environmental performance

26


Education Classifications Environmental awareness improvement education for employees

• Customers’ request • CE commitment • Cost • Performance

Chief Engineer (CE) Vehicle planning makes inconsistent matters compatible in an advanced way

Toyota Green Purchasing Guidelines

Pre-production Start

Sequential understanding of target achievement status

Education by level

Quick response

Final check of environmental performance

Consistent achievement of targets

Information disclosure to customers

Promotion of environmental management ECO-VAS in product development

Specialized education

Tree planting event at the Sorocaba Plant in Brazil

Name Toyota Global Environment Month Events (every June) Toyota Eco Drive Month (every November) • Environment e-Learning • Environment Handbook New Employee Education Manager Education Executive Development Program Environmental Protection Leader Education Internal Environmental Auditor Education Overseas Environmental Protection Promoter Education Key Environmental Facility Worker Education

Environmental education system

27



Topics

Special Feature Prius PHV—The Most Promising Next-generation Eco-Vehicles The finite nature of petroleum reserves tells us that energy sources must be diversified (electric, hydrogen, and so on) if automobiles are to have a viable future. With our hybrid vehicle (HV) technology as the core, Toyota developed the Prius Plug-in Hybrid Vehicle (PHV), one of the most promising alternatives for next-generation eco-vehicles. The new vehicle was officially launched in January 2012. Before eco-vehicles can contribute to the environment, they must first penetrate the market. And to do that, they must win wide acceptance among consumers. Thus, leading up to the launch of Prius PHV models, we sought to maximize the vehicles’ performance, ease of use and affordability.

Plug-in Hybrid System EV driving range increased significantly with newly developed high-capacity lithium-ion batteries. The high-capacity onboard charger allows charging from external electricity sources.

High-capacity lithium-ion batteries

Power Control

New lithium-ion batteries offer high capacity, high energy density, and high power output. They supply power to the motor, and they are recharged from energy recovered as the vehicle slows down.

This transformer converts direct current from the battery into three-phase alternating current used by the motor and power generator.

High-efficiency 1.8L engine Uses the Atkinson Cycle to achieve superior engine efficiency.

High-efficiency onboard charger

Motor Drives the wheels with power from the batteries. When the vehicle is decelerating, the motor works as a generator, producing electricity to store in the batteries.

Alternating current from the external source is converted to direct current and efficiently charges the high-capacity batteries. Compatible with AC200V or AC100V systems.

IT Support Optimizes PHV Performance Prius PHV Has Two Driving Modes, which Combine the Advantages of Both Electric Vehicles (EV) and Hybrid Vehicles (HV)

Performance

Short rang •• • •• EV mo de

1

EV-mode cruising range

26.4km

* Cruising range for the Grade S, in JC08 Japanese test cycle, verified by Japanese Ministry of Land, Infrastructure, Transport and Tourism. Differs by grade.

Maximum EV-mode driving speed

100km/h

Fully charged cruising range of 26.4 km in EV-mode driving powered by the electric motor. Should cover most commuting, shopping and other short-range driving needs, and allows speeds of up to 100 km/h.

Performance

2

Lon g d is ta nce • • • • • HV mod e

28

EV-mode driving is ideal for everyday commuting and shopping

61.0km/L

Because the vehicle can travel 26.4 km on a full battery charge, it gets an amazing 61.0 km/L fuel efficiency rating (for the Grade S, in JC08 Japanese test cycle, verified by the Japanese Ministry of Land, Infrastructure, Transport and Tourism). While in EV driving mode, Prius PHV uses no gasoline and produces zero CO2 emissions.

Once the power to drive in EV mode is depleted, Prius PHV operates as a hybrid vehicle

When all the battery power necessary to operate in EV mode is used up, the vehicle automatically switches to HV mode, so the driver needs not worry about the batteries becoming depleted. That means there is no reason to worry about plugging in somewhere away from home. The driver does not have to keep an eye on the amount of charge remaining or find a plug-in charging station, just enjoy driving the Prius PHV as if it were an ordinary vehicle, for as long and as far as you wish.


Toyota has always worked to establish a sustainable recycling-based society. In the field of resource recycling, Toyota is at the very leading edge. Since October 2010, it has promoted the world’ s first battery-to-battery recycling business, which recovers nickel from the nickel-hydrogen batteries used in hybrid vehicles and reuses it in new batteries.

Dismantle

JC08 Japanese test cycle

3

To Make Best Use of Our Limited Resources, Toyota Has Its Own Battery-to-battery Recycling Network

In EV mode, gasoline use is minimal so CO2 emissions are significantly reduced

Plug-in Hybrid fuel efficiency (combined fuel combination)

Performance

With “eConnect” service, Prius PHV drivers can use their smart phones to check on battery charge condition and browse to compare fuel efficiency with that of other Prius PHV drivers. Drivers can also operate the vehicle’ s air conditioning by remote control. Typical comments from owners who have tried eConnect are “I feel like I’m already in the future,” and “I feel I’m always connected to my Prius PHV.”

The vehicles are designed to ensure safe sure battery removal, and Toyota produces manuals outlining the process.

Recycling Rare metals and other such precious materials are recovered from the batteries and recycled as resources.

Recovery

Recovery Network

The batteries are collected and delivered by trucks returning from delivering parts to dealer service centers, which helps minimize CO2 emissions by eliminating the need for extra trips.

Rebuilding and reusing A unique Toyota network, batteries are collected when hybrids receive a battery change, or when a hybrid reaches the end of its service life.

Batteries that are still functional are used when hybrid vehicles need replacements, and Toyota is researching ways to use them as sources of household power.

29



FY2011 Key Environment Data

The icons categorize global and Japan data. Japan data includes TMC non-consolidated and consolidated data.

Toyota has promoted environmental management with three major themes: Establishing a low-carbon society; establishing a recyclingbased society; and environmental protection and establishing a society in harmony with nature. Listed below are the main environmental data collected in Japan and overseas. Detailed information is reported in the Separate Volume : Environment Facts & Figures.

CO2 Reduction Increase of Average Fuel Efficiency Average fuel efficiency in Japan, U.S. and Europe has improved significantly due to the increase in the number of hybrid vehicles (HVs), mainly the Prius and Aqua, and more fuel-efficient conventional vehicles.

Average Fuel Efficiency for Toyota Vehicles in Japan, U.S. and Europe

Cumulative CO2 Reduction with 4.0 Million HVs (Toyota Estimate)

(Index)

1.50

VOC emissions per unit of painted area were reduced through activities at vehicle production affiliates in Japan.

29.2

28.5

1.00 ’97

’98

’99

’00

’01

’02

’03

’04

’05

’06

’07

’08

’09

’11

’10

(FY)

’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 (Jan-Apr)

Camry, Crown Hybrid, SAI, Prius, Prius PHV

Sedan

1.50

Commercial

’01

’02

’03

’04

’05

’06

’07

’08

’09

’10

’11

(FY)

CO2 emissions per unit produced have improved from FY2010 through activities to reduce CO 2 at affiliates in Japan and overseas. However, the total volume increased from the previous year due to an increase in the number of units produced. The index of “per sales unit” was changed to “per unit produced” starting with the Fifth Toyota Environmental Action Plan. Emissions per unit produced (Tons per unit produced)

9.0

2

7.01

7.36

7.08

7.18

7.22 1.5

6.0 5.0

0.88

2.0

0.84

0.85

0.83

0.5

1.0 ’01

The rest of Asia, Australia, the Middle East, South Africa, Latin America Europe

’08

’09

’10

’11 (FY)

0

’09

’10

’11 (FY)

SU-LEV

U-LEV

No. of Models

No. of Models

2

0

Avensis

1

0

Camry

1

0

Pixis Space

0

2

Aqua

1

0

Prius PHV

1

0

Reduction of Waste Volume Total Volume of Waste (Global) Total volume of waste was reduced through activities at affiliates in Japan and overseas. The index of waste was changed starting with the Fifth Toyota Environmental Action Plan. The new waste index started with

200

Japan (excluding TMC)

100 0

144

102

GS

3

0

GS450h

1

0

Total

10

2

the Fifth Toyota Environmental Action Plan (Waste at cost, incineration, landfill)

Incineration + landfill The rest of Asia, Australia, the Middle East, South Africa, Latin America Europe China

105

81

North America

76

Low-Emission Vehicles as a Percentage of Total Production in Japan

’08

’09

’10

’11

(FY)

’08

’09

’10

’11

96%

97%

97%

97%

TMC

* 119 companies (TMC, consolidated subsidiaries and other companies in Japan and overseas) Japan: Companies subject to consolidated EMS (including sub-subsidiaries; excluding Toyota Tsusho) listed in Groups 1-5 in the Separate Volume : Environment Facts & Figures Overseas: Production companies and production/sales companies listed in the Separate Volume : Environment Facts & Figures (excluding TMMR in Russia) * Reduction of incineration and landfill waste volume was reported until the Fourth Toyota Environmental Action Plan (FY2006 – 2010). The volume of waste at cost (materials discarded that are recycled for a fee) is added starting with FY2011 (the Fifth Toyota Environmental Action Plan) * Chinese affiliates have been included since FY2006

60

New U-LEV 50% lower than standard levels for 2005

40 20 0

’07

’08

’09

’10

’11

(FY)

99%

Toyota’s vehicle recycling/ recovery rate (in terms of percentage of entire vehicle)

93%

70

76%

80%

81%

85%

ASR recycling/ recovery rate Legally mandated 70% rate for FY2015

’07

’08

’09

’10

’11

(FY)

* Vehicle recycling/recovery rate: Calculated as the approximate 83% recycling rate of materials recovered from the dismantling and shredding processes (as per documentation of the policy board of Japan, May 2003), plus a 93% ASR recycling/recovery rate multiplied by the 17% ASR remaining after recycling of materials recovered from the dismantling and shredding processes [83 + (93/100 x 17) = 98.81]

Enhancing Consolidated Environmental Management Percentages by Companies Subject to Consolidated EMS Worldwide Percentages of vehicles produced and sold by companies subject to the consolidated EMS worldwide was:

99% of vehicles produced and 91% of vehicles sold. Promotion Structure for Global Environmental Management North America Environment Committee

European Environment Committee (2002~)

conventional low emission vehicle 25% lower than standard levels for 2000

80

(FY)

* 8 companies (TMC, consolidated and other companies in Japan)

(%) 100

Japan (excluding TMC) ’01

’98

FY2011 Vehicles that Meet Japanese LEV Emissions Standards

Prius

The graph shows the volume of waste until 2011 (incineration + landfill)

27.0

(%)

RX450h

400

0

100

SUV

465

27.8

Toyota’s Vehicle Recycling/Recovery Rate and ASR Recycling/Recovery Rate in Japan

Greenery of Emissions

LS600h/LS600hL, GS450h, HS250h

500

29.3

Compliance with Automobile Recycling Laws

0

Model

North America

TMC

’08

CT200h

300

* 119 companies (TMC, consolidated subsidiaries and other companies in Japan and overseas) Japan: Companies subject to consolidated EMS (including sub-subsidiaries; excluding Toyota Tsusho) listed in Groups 1-5 in the Separate Volume : Environment Facts & Figures Overseas: Production companies and production/sales companies listed in the Separate Volume : Environment Facts & Figures (excluding TMMR in Russia) Note 1: In the case of companies for which FY2001 results could not be determined, the oldest subsequent data is used Note 2: Affiliates in China have been included since FY2005 Note 3: The CO2 conversion coefficient has been calculated with reference to the GHG Protocol (See the Separate Volume : Environment Facts & Figures) Sustainability Report 2012

’01

Low-emission level

Volume of waste (Thousand tons)

32.0

TMC

Hatchback/Station wagon

China 1

1.18

3.0

1.0

Lexus Brand

CO2 Emissions (from Energy Sources) and CO2 Emissions per Unit Produced (Stationary Sources such as Plants and Offices) (Global)

Total CO2 emissions (Million tons)

Dyna, Toyoace hybrid model

50

50

Sedan ’00

5

Japan (excluding TMC)

In FY2011, almost 100% of Toyota vehicles produced were certified as meeting the Ultra-Low Emission Vehicle (U-LEV) or higher levels in Ministry of Land, Infrastructure, Transport and Tourism.

1.20

’99

2.0

Aqua, Auris Hybrid (overseas market only)

1.30

’98

10

Vehicles that Meet LEV Emissions Standards in Japan

Harrier Hybrid, Highlander Hybrid (overseas market only)

78.8

75

North America

3.0

Minivan

SUV

’97

3.5

Prius

Hatchback/Station wagon

+68%

3.7

3.6

Alphard hybrid model, Vellfire hybrid model, Estima Hybrid

1.40

1.00

3.8

Wagon

1.60

100

25

* 33 companies (TMC, consolidated and other companies in Japan and overseas) * Chinese affiliates have been included since FY2006

Toyota Brand

Average Fuel Efficiency for Toyota Vehicles in Japan

Europe

4.0

15

(FY)

HV Lineup (as of March 2012)

(Index) 1.70

1.10

Cumulative total from 1997 to April 2012

6.0

Emissions per unit of painted area (g/m2)

China

4.8

0

0

+44%

About 26 million tons of reduced CO2 emissions

Cumulative HV sales

500

1.10

26.9

5.0

20

1,000

1.20

28.1

27.3

25

CO2 emissions from conventional gasoline vehicles of equivalent size and power output CO2 emissions from HVs

The rest of Asia, Australia, the Middle East, South Africa, Latin America

Per unit produced (m3/vehicle) 7.0

30

1,500

1.30

30

Both water consumption per unit produced and total volume decreased through efforts at affiliates in Japan and overseas.

35

2,000

1.40

0

VOC Emissions Volumes in Vehicle Body Painting Processes at Consolidated Companies in Japan

(Thousand vehicles)

2,500

4.0

Water Consumption at Vehicle Assembly Plants and Consumption per Unit Produced (Global)

Water consumption (Million m3)

3,000

1.60

7.0

Reducing Substances of Concern

3,500

1.70

8.0

Reduction of Water Consumption

Global cumulative HV sales, mainly the Prius, exceeded 4 million units, and cumulative CO2 reduction was 26 million tons. 4,000

Japan data

Global data

(2004~)

China Environment Committee

Toyota Environment Committee

(2007~)

(1992~)

Asia Pacific Environment Committee South Africa Environment Committee (2008~)

(2007~)

South America Environment Committee (2006~)

SU-LEV 75% lower than standard levels for 2005

31



Contributing to Communities Creating Affluent Communities

Contributing to Communities Creating Affluent Communities

Diverse Usage Environments

Contributing to society through local employment and providing appealing mobility to as many people and communities as possible

The founder of Toyota, Kiichiro Toyoda, said his reason for beginning the automotive business was to provide wonderful freedom of movement to as many people as possible. Since the beginning, Toyota has performed its corporate activities under the philosophy of “contributing to society through making cars.”

Toyota responds to the needs of consumers in countries and regions throughout the world. We engage in development that is in line with various societies, natural environments, and usage conditions as well as local purchasing and production in order to enrich the lives of communities on a global scale.

Topics Providing “Made by TOYOTA” Quality and Cost to Customers around the World The IMV* Project Promotes the Development of Products that Meet the Conditions and Needs of Countries and Regions around the World, as Well as Local Purchasing and Production. *Innovative International Multipurpose Vehicle (IMV):Toyota’s global strategy models, so named with the aim of creating multipurpose vehicles that can meet the various needs of customers around the world.

Simultaneously Providing Appealing Products at Affordable Prices to Customers in Countries around the World

Hilux (B, C, D cabs) A wide range of cars have been developed and produced ranging from private- to business-use vehicles, as well as reasonably priced to luxury cars.

The IMV Project, which was founded in August 2004, achieved a cumulative total of five million cars sold as of March 2012. The goal of the IMV Project is to simultaneously provide appealing products at affordable prices around the world. Cars are sold in 170 countries and produced by 12 overseas affiliates in emerging markets. The IMV Project has worked for drastic reform from three major viewpoints toward efficient production and distribution on a global scale. During car development, priority was placed on the development of products that best suit emerging markets, based on three models and five body types. Prior to the IMV Project, the production structure included production bases of similarly small scale at 11 affiliates. Under the IMV Project, four plants in Thailand, Indonesia, South Africa, and Argentina were designated global bases for production and exports. Furthermore, the Global Optimum Purchasing System was established for parts with the aim of 100% local purchasing instead of purchasing from Japan. Currently, some business units have high non-Japanese purchasing ratios of up to 95%. The Optimum Purchasing System also covers engines, transmissions and other major components. The number of cars sold is increasing each year, partially because of the expansion of emerging markets. Last year’s Great East Japan Earthquake and floods in Thailand caused major impacts, but production capabilities were restored at a comparatively early stage. The number of cars sold in FY2011 was approximately 770,000 units. We estimate that sales will increase due to market expansion from this fiscal year.

32


Fortuner SUV This luxurious SUV is popular among customers in the Middle East and India.

Innova MPV This car is supported by the taxi industry, large families, and other consumers in India and Indonesia.

Global Supply System

In Thailand and Indonesia

In Africa

In other emerging markets

People completely load the deck of their vehicles with baggage and many family members ride together at the one time. Because major traffic congestion is a daily occurrence, fuel efficiency is particularly important.

There are few paved roads, so most driving is off road in rugged locations. The weather is very hot, and many vehicles are used in coal mines.

In Peru, vehicles require a motive force for high altitudes of 4,000 meters or more. Vehicles must be able to withstand intense heat in the Middle East and severe cold in Russia.

Toyota’s “Global BEST” is Accepted Internationally, while the “Local BEST” Meets the Needs of Each Region’s Usage Environment The three major factors that contributed to achieving sales of five million units are: 1) detailed surveys and analysis of usage environments in various countries and regions around the world, 2) thorough development of products that are tailored to the needs of different countries and regions, and 3) an extensive after-sales service network spanning numerous countries and regions. The world is a big place, and there are many usage environments that are unimaginable in Japan. These harsh conditions include unpaved, rugged roads; deserts; high altitudes of 4,000 meters or more; intense heat of 40° C or greater; and severe cold of -30° C or less. Common understandings of vehicle usage differ by region: some people haul loads of three tons or more while others fully load their car deck with luggage, and some cars are ridden by many people at once. Cars are utilized in a wide range of ways for passengers, commercial use, or a combination of the two. Toyota develops cars for each region and country by understanding the local usage conditions. Based on five unified body types for the entire globe (“Global BEST”), we offer 330 models with 1,250 final specifications (“Local BEST”) to carefully meet a range of needs with attention to detail.

Detailed Service Capabilities in Each Region to Customers Provide Peace of Mind Toyota’s service system offers reassuring service capabilities that make it possible to respond comprehensively and in a detailed manner to a variety of situations in all regions. Our network of dealerships is expanding. As in Japan, dealers in emerging markets are fundamentally in charge of the three areas of new cars, parts, and after-sales service. Large and small service shops have also been established in each region. In addition, we dispatch service staff from dealers for customers who have established service shops inside their companies for work use. In this way Toyota provides careful support for each car’s maintenance, usage conditions, and circumstances.

Export destination (main supply) Export destination (backup supply)

Building large and small service shops in each region

Required Product Conditions

12 business units in emerging markets

Dispatching service staff to customers who have their own service shop

TMV (Vietnam)

Europe

TDV (Venezuela)

IMC (Pakistan)

TMEE (Egypt)

Tough

Eco

Will not break down even in harsh usage environments

Eco-friendly and fuel-economy

Kuozui (Taiwan)

Practical and comfortable

Middle East

Africa

Central and South America

TMP (The Philippines)

Asia TKM (India) TMT (Thailand)

Oceania

TASA (Argentina)

UMWT (Malaysia)

TSAM (South Africa)

Part Purchasing Rate by Source (example: Thailand) Old Hilux

TMMIN (Indonesia)

Production in 2011 Within the country

Overseas

Major export destinations

Extremely practical usage methods for many people and large amounts of baggage

Major related FTAs

TMT

340,000 units

14 (40%)

20 (60%)

TMMIN

110,000 units

7 (64%)

4 (36%)

Asian region, Middle East, Oceania

ASEAN countries, Thailand – Asia Pacific

TSAM

120,000 units

5 (40%)

7 (60%)

African region, Europe EU – South Africa

TASA

70,000 units

2 (31%)

5 (69%)

Central and South America region

Supply from Japan 34% Purchasing in the country 61%

Mercosur countries

IMV Supply from Japan 6% Purchasing from other countries 13%

Purchasing from other countries 5% Local purchasing rate: 66%

Purchasing in the country 81%

We have drastically improved local purchasing rates through the mutual complementation of parts from Asian countries excluding Japan and other regions. We have aggregated production bases for engines and manual transmissions, and have adopted local purchasing in a fundamental way.

Our Mission is to Create More Appealing Cars in Each Region and Develop the Automobile Industry in All Countries and Regions In line with increased numbers of vehicles being produced and sold, Toyota has strengthened its production capabilities, mainly in Asia. In the future we will continue to enhance our production and supply systems while paying attention to sales-related conditions. The IMV Project provides appealing cars to customers around the world as well as employment opportunities in the countries of production. In this way, we are working to fulfill our mission of developing the automobile industry in all countries and regions.

Local purchasing rate: 94%

33


Contributing to Communities Social Contribution (Environment/Traffic Safety/Education)


Contributing to Communities

Social Contribution (Environment/Traffic Safety/Education)

Examples of Initiatives in Japan

As a good corporate citizen, respect the culture and customs of every nation and contribute to social development

Environment

Results of Social Contribution Activities

The Basic Concepts of Social Contribution

Other

Environment Traffic Safety

Toyota laid down the principles and policies for social contribution activities based on the Guiding Principles at Toyota and its CSR Policy, which the company shares globally. Toyota spent approximately 14.4 billion yen on social contribution activities in FY2011, with around 20,000 employees taking part in volunteer activities every year.

Global Focus Fields

For more details, please refer to the following web page.

* Fourth theme of “society and culture” is added in Japan.

Environment

* Approx. 14.4 billion yen

Education

http://www.toyota-global.com/sustainability/corporate_citizenship/

Traffic Safety Society and Culture

Education

* Toyota and major subsidiaries on a consolidated basis. Results for overseas affiliates have been calculated in Japanese yen based on the average exchange rate for FY2011.

Key activities for FY2011

Kokoro Hakobu Project Disaster Area Recovery Support by Toyota Group Aiming for the enrichment of society, Toyota joins forces with a broad range of individuals and organizations to make effective use of resources while engaging in social contribution activities to resolve social issues. Based on this philosophy, Toyota has implemented recovery and revitalization support initiatives for disaster area recovery since the Great East Japan Earthquake by way of monetary donations, supplies aid, provision of automobiles, provision of company dormitories and other forms of housing, support for people involved in agriculture and food production, and the dispatch of aid workers for physical support.

In June 2011, in a bid to deploy a variety of relief efforts to aid the disaster stricken area, Toyota launched the Kokoro Hakobu Project, which is based on the idea of bringing more than temporary allocations of human resources and material resources to the recovery effort. As part of these efforts, the company rearranged and continues to run its former voluntary programs in the field of arts and culture with the aim of helping in any way possible to heal the hearts of disaster victims.

Volunteers

 Provision of support to agricultural and food production industries • Offering of agricultural products from the Tohoku and Kanto regions in employee cafeterias and in-house stores in response to a request from the Keidanren (Japan Business Federation)  Provision of personnel • Volunteer activities by employees from 15 Toyota and Toyota-related companies (approximately 200 people)  Provision of culture and the arts (refer to pages 37 to 38 for details) • Toyota Children Meet Artists Program: Holding of workshops at elementary schools in disaster stricken areas to provide emotional care to children • Toyota Community Concerts: Concerts in disaster stricken areas held by local amateur orchestras and other groups from around the country (13 performances) • Toyota Master Players, Wien: Charity concerts held in Miyagi and Iwate Prefectures and visiting concerts held at schools and other locations across Japan. Donations collected at each venue • Donations to culture and arts support activities

Fifteen Toyota and Toyota-related companies have been conducting support activities for reconstruction in disaster areas to enable the victims of the Great East Japan Earthquake and Tsunami to return to their normal lives as soon as possible. In FY2011, around 200 employees traveled to Iwate Prefecture in a bus driven by a member of an in-house volunteer club, the Heavy Vehicle Drivers' Association, to assist in restoration of the region based on their needs in a 5-days/4-nights volunteer event. Fifteen volunteers participated per event, with the event held 14 times Duration of Total of 14 times between 15 Toyota and Toyota-related companies throughout the year. activities June and November 2011 of Kesen District of Iwate Prefecture These activities are Area Toyota Industries Corporation Aisin Seiki Co., Ltd. Hino Motors, Ltd. activities (Ofunato City, Rikuzentakata City, Sumitacho) Aichi Steel Corporation Denso Corporation Tokai Rika Co., Ltd. being continued in Number of Around 15 people per event. volunteers Total of approximately 200 people JTEKT Corporation Toyota Boshoku Corporation Aisan Industry Co. Ltd. FY2012. Details of Removal of debris and flotsam from rice paddies, farm roads, residential houses, etc., and washing and tidying of photos, among other things

Toyota Auto Body Co., Ltd.

Toyota Central R&D Labs, Inc. Taiho Kogyo Co., Ltd.

Toyota Tsusho Corporation

Toyoda Gosei Co., Ltd.

Toyota Motor Corp.

Removal of flotsam from Rikuzentakata City

34


Launched in the suburbs of Toyota City in October 1997 in a company-owned forest as a model for satoyama restoration, the Forest of Toyota project is open to the general public. The project aims to restore and carry out research into the preservation of forests, plants, and animals, as well as engage in environmental education in collaboration with the local community. Visits by elementary school children have reached 55,000, and the project has firmly become a field for hands-on study in the region. In addition, Toyota operates a transport service using company buses for the greater convenience of local elementary schools. The cumulative total of visitors to the forest reached 100,000 on February 23, 2012. A certificate and a memento were given to each of the 23 first grade students of Hirai Elementary School in Toyota City, which became the 100,000th visitor. Experience nature program

Main Initiatives to Date

Ceremony to commemorate a cumulative total of 100,000 visitors

Total Number of Visitors (Cumulative total / 1,000 people) 11,926 120 11,420

(Differentiated by fiscal year / 1,000 people)

1992: Drafting of the plan for the Forest of Toyota

12

1997: Establishment and opening of a model satoyama restoration forest

10

Holding of “eco monitoring,” a survey to assess the effects of the model forest (until 2008) 2001: Commencement of the hands-on learning program through interaction with nature for elementary school children 2003: Opening of the Satoyama Learning Institute Eco-no-Mori house

Differentiated by fiscal year Cumulative total

10,447

9.623

100

8,973 80

8 6,957

60

6

40

4

3,059

2

For more details, please refer to the following web page. http://www.toyota-global.com/sustainability/corporate_citizenship/environment/

10,509 10,577

10,395

1,819

1,723

’98

’99

1,310

20

1,556

516 0

’97

’00

’01

’02

’03

’04

’05

’06

’07

’08

’09

’10

’11 (FY)

0

The Second Phase of the Human Development Program Toyomori Institute of Sustainable Living is Currently Underway

Implementation Plan for Relief Efforts by the Toyota Group

activities

Cumulative Number of Visitors to the Forest of Toyota Reaches 100,000 since its Opening

1998: Holding of the Eco-no-Mori Seminar, an ecology education program (until 2005)

Details of Initiatives to Date  Provision of funds • Donations made to the Central Community Chest of Japan and Japan Platform, etc. (approximately 300 million yen) • Donation of funds collected from executives and employees to the Japanese Red Cross Society (55 million yen) • Donation of funds for earthquake orphans in Miyagi, Iwate, and Fukushima Prefectures (100 million yen per prefecture)  Provision of supplies • Supplies aid to regions with associated business entities  Provision of vehicles • Provision of rent-a-cars and work vehicles (260 units) • Free-of-charge retrofitting of a system that supplies auxiliary electricity to the Prius in fleets at each prefectural office in the Tohoku region.  Provision of temporary accommodation • Provision of company dormitories and other forms of housing in Aichi Prefecture

Toyota addresses domestic and international environmental issues by publicizing knowhow acquired through the establishment of satoyama (forests and wetlands near populated areas) and experimental studies in the Forest of Toyota, and using the accumulated knowledge for environmental education. The company also implements afforestation, human resource fostering, and support for research and activities with a focus on collaboration with society and local communities, as well as initiatives in environmental preservation by employee volunteers.

The Toyomori Institute of Sustainable Living is a human development project carried out in cooperation with Toyota, Toyota City, and the Support Center for Sustainable Regional Design (NPO) in a bid to connect cities and rural areas. The Toyomori Institute of Sustainable Living, which forms the core of this program, opened in May 2009, and 30 individuals recruited from the general public engaged in classroom sessions and field work over a period of approximately two years in order to gain an understanding of the local region, learn about advanced cases studies in the community and business, and propose businesses for connecting cities to satoyama. Since graduation, some participants have actually moved to satoyama to begin businesses based in the local community. The second phase of the project began in April 2011 with 26 individuals recruited from the general public.

Field work

35



Traffic Safety

As part of activities that aim to achieve zero casualties from traffic accidents, Toyota has continued promoting traffic safety education activities targeting a wide cross section of society, encompassing children to the elderly, since the 1960s. Below we present some representative cases of such activities, including the Toyota Traffic Safety Campaign that we have been engaged in since 1969 and the Toyota Safety Education Center “mobilitas.”

Education

Toyota engages in activities to foster human resources based on the fundamental policy that "Toyota will maximize the benefits of its social contribution activities by working with partners; by using our resources effectively; and by concentrating on initiatives that address real social needs, including fostering future human resources." The Toyota Children Meet Artists program is a representative example of these activities.

Toyota Spring and Autumn Traffic Safety Campaigns and Support to Dealers

Providing Emotional Care to Children through Children Meet Artists

In the Toyota Traffic Safety Campaign held in the spring of FY2011, Toyota distributed approximately 2.44 million copies of traffic safety picture books and 43,000 copies of picture-story show cards to new students at kindergartens and nursery schools all over Japan in cooperation with 419 Toyota dealers and other companies around the country. We, however, refrained from conducting such activities in regions affected by the Great East Japan Earthquake. These activities are now in their 43rd year, and the cumulative number of picture books and picturestory show cards distributed amounts to approximately 126 million copies and 1.33 million copies, respectively. In the autumn campaign, given the high number of accidents involving elderly people at night, Toyota also printed and distributed some 820,000 leaflets explaining the effectiveness of using reflective materials and the difference in visibility depending on the color of clothes. Many other traffic safety events were also held in regions across Japan in conjunction with the support provided by Toyota to dealers nationwide, including the renting out of Driving Under the Influence simulators (DUI Goggles) and other traffic safety education tools.

Toyota Children Meet Artists is a next-generation education program run by Toyota in cooperation with the NPO, Children Meet Artists, and executive committees in each region. The program is designed to foster children’s sensitivity and nurture dreams through interaction with artists, and has been run in regions around Japan since 2004. Activities were carried out in Tottori and Kochi Prefectures in 2011, and in Miyagi, the “Minami-sanrikucho Future in a Song” project was launched based on the idea that the voices of children, who will be the future of the town, will contribute to its revitalization. Workshops were held involving Minami-sanrikucho’s five elementary schools to create and present a song to the people of the town written in the children’s own words with their own melody expressing what they had witnessed first hand in the year following the earthquake. The original song was sung at a memorial service organized by the town on March 11 in the hope that it would help alleviate some of the pain and suffering of local people.

FY2011 Autumn Traffic Safety Campaign leaflet

Traffic safety picture books distributed in FY2011: 2.44 million copies with a cumulative total of 126 million copies Traffic safety picture-story show cards distributed in FY2011: 43,000 copies with a cumulative total of 1.33 million copies

The lyrics reflected the children’s feelings over the past year

The song was sung at a memorial service on March 11 © Masashi Asada Traffic safety event held at TRESSA YOKOHAMA

Other Main Activities in FY2011 to foster Human Resources

Safe-driving Programs and Traffic Safety Classes Held at “mobilitas”

 ‘Scientific Jack-in-the-Box! The Why/What Lecture’ hands down fun of monozukuri (manufacturing) to elementary school children Number of participants in FY2011: 1,226

Safe-driving programs for drivers are currently being held mainly at Toyota Safety Education Center “mobilitas,” which opened at the Fuji International Speedway in Shizuoka Prefecture in 2005. “mobilitas” offers curricula for individuals from the general public as well as corporations and groups that aim to actively improve driving techniques and enhance driver awareness of vehicle safety. Improvements are constantly being made to the curricula with the addition of ways to deal with emergencies as in an earthquake and so forth, in an attempt to boost customer satisfaction. Around 4,200 customers took part in the program in FY2011, with the cumulative number of participants since 1987 reaching around 50,000. In addition, the Toyota Safety School for young children, which has been running at Toyota Kaikan Museum in Toyota City in Aichi Prefecture since 1975, have also been held at “mobilitas” since 2006. In FY2011, 190 local kindergarten children enjoyed learning about traffic safety at “mobilitas.”

 Providing an automobile technical training course in Portuguese for Brazilian residents of Japan Cumulative total of graduates: 241 For more details, please refer to the following web page. http://www.toyota-global.com/sustainability/corporate_citizenship/education/

Topics “mobilitas” program allowing “dangerous” driving to be experienced in a safe environment

Toyota Driver Communication Number of participants in the program in FY2011: 4,210 with a cumulative total of approximately 50,000 Toyota Safety School (“mobilitas”/Toyota Kaikan Museum) Number of participants in the program in FY2011: 5,095 with a cumulative total of over 230,000

How to cross the road at a pedestrian crossing (safety school at “mobilitas”)

Other Main Safety Education Activities in FY2011  The website, Kodomo-bilita a mixture of kodomo 'children' in Japanese and “mobilitas,” which promotes all kinds of traffic safety based on bicycles and other themes, began a new series of riddle-solving anime called Detective Bilita in March 2011. “Road sign fortune telling” also commenced in March 2012. For more details, please refer to the following web page.

Voluntary Activities at Elementary Schools as Part of the New Employee Training Program As part of their training, newly graduated recruits who partake in general office and technical work have been involved in beautification activities at elementary schools in Toyota City since FY2011. The purpose is to raise awareness among the recruits that they are members of a company that supports the local community, and to foster human resources who will actively take part in the development of the region. With the help of the Board of Education, around 500 recruits took part in activities prompted by requests from schools to remove dirt and sand from ditches, establish vegetable gardens, and clean windows in high places at eight elementary schools in Toyota City in April 2012. The recruits worked enthusiastically while interacting with the children. These activities epitomize the strong bonds the Toyota Head Office has with the local community and expectations from the community for these activities are high.

VOICE

Removing dirt and sand from ditches after removing coverings

Comments from Participants

• Seeing the children who greet us every time we meet reinforced the importance of simple greetings.

New recruits taking part in volunteer activities at Koromogaoka Elementary School

• Many children expressed their gratitude and it has inspired me to try and set an example for them in the future. • The children knew a lot about Toyota and Toyota cars, and it made me realize their keen interest in the company, which made me very happy. • It made me realize that I must not forget the basic fact that the business activities of Toyota are sustained by the understanding and support of the local community.

http://www.toyota-global.com/sustainability/corporate_citizenship/traffic_safety/

36


37



Society and Culture

For the enrichment of society, Toyota engages in arts and cultural activities including music and dance, focusing on the promotion of local culture, the fostering of the younger generation, and the expansion of the range of activities. We also ｗork toward creating a harmonious and interdependent society where a diverse range of people respect one another, develop self-reliance and work together to realize a mutually supportive society, and take part in activities to promote regional culture, welfare services and self-reliance.

Examples of Overseas Initiatives Turkey Sends Senbazuru to the DisasterStricken Northeast Japan

Toyota Community Concerts Celebrate 30th Anniversary

Thai Flood Damage Relief Asia: Toyota Motor Thailand Co., Ltd. (TMT)

Europe: Toyota Motor Manufacturing Turkey Inc. (TMMT)

Toyota Community Concerts aim to contribute to the promotion of local culture through music. Local Toyota dealers and Toyota provide support to concerts staged by amateur orchestras performing in their respective regions. These activities began in 1981 and celebrated their 30th anniversary in FY2011. Thirty-one concerts were held in 18 prefectures attracting 26,000 people in FY2011. Apart from the usual concerts held every year, children of nearby schools were given lessons on playing musical instruments, with a portion of the proceeds from admission fees donated to welfare facilities, while other special projects were implemented to mark the 30th anniversary. The September 2011 concert in Misatomachi in Miyagi Prefecture marked a fresh start for members of the orchestra who had lost their houses along with their musical instruments in the Great East Japan Earthquake. In support of revitalization efforts, amateur orchestras from all over Japan visited disaster stricken areas to perform concerts at schools, halls, and commercial facilities. In addition, we invited orchestra members who had lost venues where they could perform due to the earthquake. A total of 13 such concerts were performed. These activities, which have their roots in the local community, will be continued in the future based on the wish to deliver smiles to people all over the country through music.

At an event for TMMT members and their families, the Japanese staff set up a “senbazuru (thousand origami cranes) stand.” They demonstrated paper cranes folding to Turkish employees and their families while explaining the senbazuru tradition. The cranes made by Turkish employees were then collected, and the heartfelt compassion with which the cranes was made was thoroughly communicated to the disaster-stricken town of Sumita in Iwate Prefecture after they were delivered by TMC volunteers in Japan. Meanwhile, TMC and two Turkish affiliates sent 10 million yen in relief money for victims of the 7.2-magnitude quake in eastern Turkey in October 2011.

The flooding of Thailand’s Chao Phraya River basin started in July 2011 and continued for more than 3 months, causing large-scale damage of 6 million hectares of land and over 400 deaths. As relief measures, TMT took a “twin-track” approach that consisted of emergency countermeasures in November and a recovery plan that would run from December to May of the following year. As part of the emergency measures, TMT sent a total of 20.5 million baht in emergency relief funds to organizations such as the Thai Red Cross and the Prime Minister’s office, as well as 2.6 million baht’s worth of survival kits, 31 boats, and finally, approximately 16,000 employee volunteers who contributed daily to relief efforts.

Achievements in FY2011:

31 concerts held in 18 prefectures with approximately 26,000 attendees

Recovery aid concert by the Iwaki Symphony Orchestra

Cumulative achievements:

1,371 concerts held in 45 prefectures with approximately 1.104 million attendees Senbazuru Project

Volunteer clean-up activities

Toyota Master Players, Wien—Charity Concerts Held in Sendai and Morioka Toyota Master Players, Wien has been giving concerts since 2000 in a specially formed orchestra consisting of 30 people, including the head musician of the Vienna Philharmonic and performers from the Vienna State Opera. The concert in 2011 was canceled as a result of the Great East Japan Earthquake, but in 2012, the year of the 10th tour, seven concerts were staged in seven cities across Japan attracting 11,000 people (the Nagoya concert was jointly performed by the Nagoya Philharmonic Orchestra). A special concert in Morioka was added to the tour this time as part of the “Kokoro Hakobu Project,” and all proceeds from ticket sales of the Sendai and Morioka concerts were donated to funds for the educational assistance of children in Iwate, Miyagi, and Fukushima Prefectures, many of whom lost their parents in the disaster. Orchestra members also visited and performed at high schools in Tono City in Iwate Prefecture and Higashi-Matsushima City in Miyagi Prefecture.

Achievements in FY2012:

7 concerts held in 7 prefectures with approximately 11,000 attendees Sendai Concert

c ○Studio 02

Helping Hearts Heal After the Sichuan Earthquake

Helping the St. Bernard Project Rebuild Homes Destroyed by Hurricane Katrina

China: Toyota Motor (China) Investment Co., Ltd. (TMCI)

U.S.: Toyota Production System Support Center (TSSC)

The Sichuan Earthquake in May of 2008 resulted in massive damages. TMCI immediately announced its support for rescue activities by donating emergency assistance funds. A particular focus of the support activities was to help heal the hearts of the local citizens. Initiatives implemented included a project to offer 1,000 complimentary outdoor movie screenings; the Toyota Bookmobile project that utilized Coaster buses to visit and replace books periodically at 50 elementary schools; and the Toyota Study Assistance Fund to students affected by the disaster. The Toyota Bookmobile continued until 2011 and special allocations for the Toyota Study Assistance Fund will continue until 2013.

Tens of thousands of homes were destroyed by Hurricane Katrina when it struck the southeast United States in 2005. The St. Bernard Project is a non-profit organization that has rebuilt over 400 such homes with the help of veterans and volunteers. TSSC undertook a task of reviewing the rebuilding processes and making them more efficient based on the Toyota Production System (TPS). Working together with the St. Bernard Project, we were able to reduce the lead time for rebuilding a home significantly. With the philosophy of Toyota Production System, TSSC will continue to support more companies, public service and nonprofit organizations through development of people.

Main Topics in FY2011 on Other Social and Cultural Activities  A “Table for Two” program to provide meals to African children was launched in June 2011. The program has been adopted in the district around Head Office and at the Tokyo Head Office, Nagoya Office, Higashi-Fuji Technical Center, and Nisshin Training Center as of May 2012. A total of 1.26 million yen, including the matched amount, was donated to the cause. For more details, please refer to the following web page. http://www.toyota-global.com/sustainability/corporate_citizenship/society_and_culture/

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Study Assistance Presentation Ceremony

Rebuilding of destroyed homes

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Mutually Beneficial Relationships with Dealers/Distributors and Suppliers

Mutually Beneficial Relationships with Dealers/Distributors and Suppliers

Holding of the Prius Cup, the First National Competition

Contribute for economic development of local communities with open stance to new suppliers and dealers and through sustainable growth based on mutually beneficial business relationships with dealers/distributors and suppliers

Basic Concept of Business Partners In order to contribute to society through automobile manufacturing and monozukuri and put into practice the principle of “Customer First,” it is necessary to implement various activities in a spirit of cooperation and share principles with our business partners. In addition to steadily pursuing open and fair business activities and

conventional ones including CSR activities, Toyota is committed to working to achieve better quality in terms of safety and confidence to secure higher customer satisfaction, in further united cooperation with its business partners including suppliers and dealers.

The Prius Cup has been held by each branch of TMSA since 2007 with the aim of strengthening ties with dealers and vitalizing Toyota, and all eight branches have had the opportunity to host this event. The first national competition was held in December 2011 at Fuji International Speedway, and was attended by the top 29 companies from branch competitions and over 700 people. This huge car field day is an event that allows people to compete in driving and service contests and provides opportunities for participants to ride in a racing car. It brings together staff from Toyota and dealers nationwide to experience “Waku Doki,” the fun and excitement of automobiles. We plan to continue holding Prius Cup events in the future to increase the number of car fans everywhere.

A Variety of Experiences through Cars for Children Who Will Lead the 21st Century To contribute to local communities, in collaboration with dealers who play an active part in community-rooted activities, Toyota began the First Experience Program involving lectures at local elementary schools in 2008. Around 40,000 children from over 700 schools have participated as of March 2012. Furthermore, as part of the “Kokoro Hakobu Project,” Toyota employees and dealers jointly held open classes in Iwate, Miyagi, and Fukushima Prefectures between July and September 2011, with the desire to cheer up children in the disaster stricken areas through cars, attracting over 500 people to the events held at the three venues. Main Activities in the First Experience Program First Car Experience Class

For fourth grade students

Hands-on learning of the power and control of cars  Experiment using a compressed air engine car  Experiment using a real car

Collaboration with Sales Networks

Class to Fully Understand Cars

The sales network is the front line where Toyota’s “Customer First” principle will be directly observed. Toyota and its dealers always work as one to enhance customer satisfaction based on a strong relationship of trust, close two-way communication, the superiority of Toyota products and services, and shared value.

Relations with Dealers in Japan

Hands-on learning of the relationship between cars and the environment/economy through a car and eco-game  Basic knowledge of cars and the automobile industry  A car and eco-game workshop with a wrap-up class

The Aichi Toyota Team won the Driving Competition at the First National Competition.

Within Japan, Toyota has concluded contracts directly with approximately 280 dealers who operate 5,400 sales outlets including used car outlets. A fundamental principle of Toyota is “Customer First, Dealer Second, Manufacturer Third.” Based on its policy of “Customer First,” Toyota believes that dealer success, which ultimately leads to the growth of Toyota, is achieved by boosting support for dealer initiatives to improve customer satisfaction through the implementation of PDCA (Plan, Do, Check, and Act), as well as by being committed to meeting customer and dealer expectations.

VOICE

Comments by Children Who Participated

 It was good being able to learn about

VOICE

Comments by Participants in the Winning “Aichi Toyota Team”

 There was a variety of events and I had a lot of fun.  I experienced the fun of driving.  It was a fun and lively competition. Thank you very much.  Please continue to hold these events.

cars, factories, and the environment by playing games.  We learned about cars in an easy-to-understand way and had fun.  I liked cars before, but I like them even more now.

Dealers’ CSR Activities Based on the Toyota National Dealers' Advisory Council (TNDAC) CSR Guidelines issued in 2005, every dealer engages in the three pillars of CSR activities: compliance, environmental responsiveness, and social contribution activities. Toyota is ensuring the continuation of the PDCA cycle by sharing knowhow to support the CSR activities of dealers. Toyota cooperates in revising and upgrading the self-auditing tool called the CSR Checklist system every year. The main area of improvement in 2011 was sending of a “feedback sheet” allowing comparison of each dealer’s own results with the average results of dealers throughout the country, making it possible to compare results year-on-year. We have received a lot of feedback from dealers saying that it has become easier to use.

COLUMN

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At the showcase class held in Fukushima

Relations with Dealers Overseas Toyota’s approximately 170 distributors and 8,000 dealers located overseas serve as its key partners in highlighting the appeal of Toyota vehicles to customers. They also engage in a variety of activities to advertise the value of products and cars to customers.

Workshop on Safety and Maintenance for Women in Fiji Feedback on evaluation results (example)

TNDAC Holds CSR Lecture

TNDAC holds the CSR Lecture every year with the aim of enhancing awareness of CSR activities among member companies. In FY2011, it was held in November in Nagoya for the purpose of educating participants on risk management in reference to the Great East Japan Earthquake from the perspectives of business continuity and connections with local communities. The event attracted 323 representatives from dealers around the country. Mr. Tadahiro Aochi, Ph. D., Manager, Chief Consultant of Tokio Marine & Nichido Risk Consulting Co., Ltd. was invited to give a lecture on the theme of “Lessons learned from the Great East Japan Earthquake and business continuity management.” Many positive comments were received from participants such as, “We want to reconsider the business continuity plan (BCP) of our own company.”

For fifth grade students

The Women & Wheels Program was held in the Fijian cities of Nadi and Suva on September 14 and 21, 2011. The organizer of the event was Toyota Tsusho (South Sea) Ltd. (Asco Motors) in Fiji. The 95 female drivers who were invited to the event received safety and maintenance tips, as well as hands-on experience changing flat tires, conducting under-vehicle inspections and jump starting a flat battery. Following the success of the event, Toyota Tsusho (South Sea) Ltd. (Asco Motors) plans to form the Women & Wheels Club, which will publish a quarterly newsletter with information updates and driving ideas to keep program participants safe on the road. Members of the Women & Wheels Club

At the CSR Lecture

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As a Member of the Local Community Collaboration with Suppliers Since its establishment, Toyota has sought to work closely with its suppliers in its manufacturing activities. In good times and bad, Toyota and its suppliers have faced the same issues together and Toyota has built strong and close relationships with them based on the need for mutual support and a harmonious society. The strong foundation based on solid relationships with suppliers helped quickly restore normality to production systems after the Great East Japan Earthquake. With the recent globalization of business activities we will cherish these ties—including those with our new partners—and together we will promote our Customer First policy.

Global Suppliers Convention The annual Toyota Global Suppliers Convention is held to convey Toyota’s policies and approaches towards its suppliers. The 2012 event held in February drew 756 executives from 96 overseas suppliers and 355 Japanese companies. Toyota reconfirmed a commitment for cooperation with all its suppliers. Suppliers win Toyota Global Contribution Award

Toyota’s Basic Purchasing Policies

Supporting Social Contribution Activities of Suppliers

The role that ought to be played by a purchasing function is to ensure stable, long-term purchasing of the best products in the world at the lowest prices and in the most speedy and timely manner. In order to achieve this, Toyota believes that the most important task in purchasing is the creation of relationships in which suppliers in various countries and regions and Toyota do business on an equal footing based on mutual respect, thus building firm bonds of trust and promoting mutual growth and development. Toyota’s global purchasing activities based on close cooperation revolve around the following three policies making up the Basic Purchasing Policies.

CSR Study Meetings held Focusing on Risk Management

1. 2. 3.

Fair competition based on an open-door policy Mutual benefit based on mutual trust Contribution to local economic vitality through localization: good corporate citizenship

For more details, please refer to the following web page. http://www.toyota-global.com/sustainability/csr_initiatives/stakeholders/partners/

Toyota holds CSR Study Meetings to support the CSR activities of suppliers. In FY2011, study meetings targeting around 340 companies were held based on the themes of risk management, labor workplace management, competition laws (antitrust and subcontract laws) and confidential information management.

Promoting the Spread of CSR among Suppliers through AIAG Activities Toyota also participates in the CSR educational activities of AIAG* for the supply chain in an effort to spread awareness of CSR activities among suppliers in and outside the U.S. The AIAG has also focused on the conflict minerals problem, and Toyota has been considering ways of addressing this issue with other U.S. automobile manufacturers and parts suppliers. * AIAG (Automotive Industry Action Group): An organization which lays down the code of conduct in the U.S. automobile industry.

Implementation of Policies

WBCSD Rio+20 Active pioneering of projects particularly in the field of mobility aiming for sustainable growth

World Business Council for Sustainable Development (WBCSD),

Participation in the World Business Council for Sustainable Development (WBCSD)

The Sustainable Mobility Project

As the name suggests, the WBCSD carries out surveys and offers advice based on the three pillars of economic growth, environmental protection and social development in its aim for sustainable development. Furthermore, in regard to ISO, the organization has engaged in activities which have prompted study of the ISO14000 series through seeking to establish international standards regarding environmental management systems. As a member since the establishment of the organization in 1995, Toyota is taking part in a variety of projects such as the Sustainable Mobility Project. A new Secretary-general was appointed in January 2012, and the sustainability proposals to date are now entering a phase of practical application.

1995: Joins WBCSD upon its establishment 2000: Honorary Chairman Shoichiro Toyoda inaugurated as Vice Chairman of the WBCSD Executive Committee 2001: Participates in the Sustainable Mobility Project (SMP) as Joint Chair 2004: In the SMP, seven companies including Toyota cooperate with the Global Road Safety Partnership (GRSP) to launch the Global Road Safety Initiative (GRSI) 2006: Participates in the “Mobility for Development” project as Joint Chair 2008: Participates in Vision 2050 project 2010: Honorary Chairman Shoichiro Toyoda appointed a member of the

Suppliers’ CSR Activities

To clarify the expectations of its suppliers, the Toyota issued the Toyota Supplier CSR Guidelines. Toyota suppliers are asked to implement their own independent CSR activities based on the Toyota Supplier CSR Guidelines, and in turn expand their individual CSR policies and guidelines to their own suppliers. As demands from society are changing every year, Toyota is currently working on a revision to the guidelines for the first time in three years, in order to bring its CSR policies quickly in line with the latest societal trends.

Toyota suppliers also voluntarily engage in various activities to promote CSR. Toyota’s supplier associations, Kyohokai and Eihokai jointly held lectures on CSR in August 2011. Eiichiro Adachi of the Japan Research Institute, Limited was invited to give a lecture in an effort to enhance awareness of CSR among member companies. Furthermore, the Kyohokai and Eihokai took part in the Make a CHANGE Day event as part of their CSR activities. Volunteer activities to collect items such as unused cell phones, and wasted and unused postcards were held to aid areas struck by the Great East Japan Earthquake. These activities won high appraisal as CSR activities and as well as the Encouragement Award in the 3rd Make a CHANGE Day award ceremony held in October 2011.

Conflict Minerals In line with this revision of the Toyota Supplier CSR Guidelines, Toyota intends to clearly indicate its principles to suppliers clarifying its stance regarding conflict minerals*. Toyota will continue to work in cooperation with suppliers to further promote purchasing that takes human rights into consideration. * Conflict minerals: Minerals and their by-products (the four targeted minerals are tantalum, tin, tungsten and gold) which have been stipulated in Section 1502 of the Dodd-frank Wall Street Reform and Consumer Protection Act (regulations laid down to deal with human rights abuses along the supply chain), and which are being used to finance wars in conflict zones in the Democratic Republic of Congo and its neighboring countries.

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To portray its vision of a sustainable, mobile society, the WBCSD launched the Sustainable Mobility Project (SMP) in 2000. In the project, the report, “Mobility 2030: Meeting the challenges to sustainability” was compiled in July 2004. Seven goals were outlined in the report, and it was suggested that there was a necessity to make use of the various forms of new mobility systems in order to improve the mobility opportunities of people all over the world. In 2006, the organization took part in the “Mobility for Development” project, and highlighted the situations in Tanzania, India, China and Brazil.

Toyota’s Involvement in the WBCSD to Date

2010: Participates in Urban Infrastructure Initiative

Implementation of the Toyota Supplier CSR Guidelines

head office: Geneva

Honorary Committee, and Chairman Fujio Cho a member of the WBCSD Executive Committee

COLUMN

20 Years since the Earth Summit

Rio+20, the United Nations Conference on Sustainable Development was held in Rio de Janeiro in June 2012, exactly 20 years after the United Nations Conference on Environment and Development (Earth Summit). In Japan, people with an interest in Rio+20 gathered to stimulate dialog between stakeholders and established the Japanese National Preparatory Committee for Rio+20 with the aim of providing input to Rio+20. Toyota too, took part in the committee as a member of the KEIDANREN (Japan Business Federation), and Toyota do Brasil provided the official car (Prius) at Rio+20.

The Urban Infrastructure Initiative Enters its Third Year Toyota participates in the Urban Infrastructure Initiative (UII), launched in January 2010, as one of 15 corporate members from 8 nations. The aim of the UII is to select several cities around the world and collect and formulate proposals on sustainable urban regeneration through talks with those cities. The project has entered its third year and has reached a stage where discussions with the selected cities are progressing and a report on the proposals is being put together. The UII plans to issue the report in 2013.

The WBCSD issued Changing Pace, a discussion paper on policy recommendations contributing to the realization of Vision 2050 in preparation for Rio+20.

Changing Pace issued in May 2012

The shield awarded as an Encouragement Award at the Make a CHANGE Day award ceremony

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Respect for Human Rights

Respect for Human Rights Holding the “CSR Boost-up Initiative” with the Goal of Raising Each Employee’s Awareness of Sustainability

Respecting and honoring the human rights and other rights of people involved in our business

Basic Concept of Human Rights The Guiding Principles at Toyota and the Toyota Code of Conduct (established in 1998; revised in 2006), which consolidate our approach to putting these principles into practice, contain the concept of “Respecting and honoring the human rights and other rights of the people who work at Toyota.” In addition, our CSR Policy: Contribution towards Sustainable Development, which was drawn up in 2008, stipulates that “We respect and honor the human rights of the people involved in our business.” We work to fully reflect these principles throughout all Toyota business activities, including our suppliers and other parties. In particular, regarding relationships with employees, The Toyota Way—which we have expanded to Toyota employees

worldwide—is Toyota’s action principle for which “Continuous Improvement” and “Respect for People” have always served as the two pillars. “Respect for People” refers to respect for all our stakeholders, while employee growth is inextricably linked to company achievement. The keywords here are “Respect” and “Teamwork.” The Toyota Way is the moral foundation for sharing common values with all business units across the world. In addition, various measures are implemented so that employees can work with confidence, vigor, and enthusiasm. Efforts are also made to fully reflect such concepts throughout Toyota’s entire business activities, which includes our suppliers and other parties.

Toyota set up the CSR Boost-up Initiative for its staff members to directly communicate with various stakeholders in 2010. It has been added to Toyota Stakeholder Dialogue conducted between external stakeholders and Toyota's executives and upper managers. Recognizing that the CSR actors should be individual employees, we strive to enhance our sensitivity and capabilities with regard to sustainability issues. In December 2011, NGO members were invited to present lectures and hold discussions on the theme of “NGOs/NPOs and human rights,” which is a subject of growing interest throughout the world. The attendees included 15 staff members from relevant divisions. There were positive comments from the participants that they could gain a better understanding of NGOs/NPOs and human rights in a global context as active experts in the NGO field gave them clear presentations. Toyota will consider the broad range of views on and expectations for the company, and use them when creating future initiatives.

Direct communication with NGOs and NPOs on the theme of “NGOs/NPOs and human rights”

Explanations and Opinions from NGO Members

Kaori Kuroda Executive Director CSO Network Japan

Hideki Wakabayashi Executive Director Amnesty International Japan

System for Respecting Human Rights Toyota established its in-house CSR Indices to confirm whether business is being executed in line with the concept of respect for human rights, and follow-up is performed for the various functions each year. Toyota requests the drafting and implementation of correction measures based on the results of Consolidated Compliance Check-sheets once a year for its subsidiaries, and once every two years for overseas subsidiaries. For suppliers, Toyota established and distributed the Supplier CSR Guidelines in 2009, which clearly state Toyota’s expectations of its suppliers and Toyota’s policy of respect for human rights. In addition, Toyota asks each company to perform self inspections. Beginning FY2012, as part of our efforts to further strengthen CSR-related initiatives, we intend to examine the situation and ask each company to make their own corrections as necessary, as well as take actions to confirm those corrections. Toyota will continue to listen to the views of our stakeholders and further undertake various types of measures to reflect these views in our management.

Tetsuo Tsutsui

System for Respecting Human Rights Toyota

Subsidiaries

CSR POLICY: Contribution towards Sustainable Development

Suppliers

Dealers

Supplier CSR Guidelines

Dealer CSR Guidelines (Japan)

Self-inspections CSR Indices Education

For more details, please refer to p. 42.

CSR Policy: Contribution towards Sustainable Development (excerpt)  We respect and honor the human rights of people involved in our business and, in particular, do not use or tolerate any form of forced or child labor. (Guiding Principles 5)  We respect our employees and believe that the success of our business is led by each individual’s creativity and good teamwork. We stimulate personal growth for our employees. (Guiding Principles 5)  We support equal employment opportunities, diversity and inclusion for our employees and do not discriminate against them. (Guiding Principles 5)  We strive to provide fair working conditions and to maintain a safe and healthy working environment for all our employees. (Guiding Principles 5)  Through communication and dialogue with our employees, we build and share the value “Mutual Trust and Mutual Responsibility” and work together for the success of our employees and the company.  We recognize our employees' right to freely associate, or not to associate, complying with the laws of the countries in which we operate. (Guiding Principles 5)  Management of each company takes leadership in fostering a corporate culture, and implementing policies, that promote ethical behavior.(Guiding Principles 1 and 5)


COLUMN

Issues concerning international human rights and relationships with corporations were introduced. It is important to recognize that human rights exist beyond country or legislation, and that public mindset should be changed. There was a comment that there is an expectation for Toyota to take a key role to address issues around human rights given its influence as a multinational company. Examples of Shapla Neer’s detailed activities on sites and the collaborative cases with companies were presented. Then, some of the latest situations of Bangladesh were shown, namely, that there are huge improvements on education and literacy rate, and that micro-finance is widely accepted for almost every family, as NGOs are very vital there. A voice of a local NGO was cited as saying that they don't need money but they would like to learn Japanese system or management.

Hiring Employees and Contributing to the Sustainable Development of the Local Economy while Placing Priority on Employee Health South Africa/Toyota South Africa Motors (TSAM)

Consolidated compliance program

 We implement our philosophy of “respect for people” by honoring the culture, customs, history and laws of each country. (Guiding Principles 2)

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Secretary General Shapla Neer: Citizens' Committee in Japan for Overseas Support

Information was shared on the diversity of NGOs/NPOs and their relationships with corporations, and some concrete examples provided. Relationships with corporations are being transformed into two-way relationships involving dialogue, communication, and cooperation. Advice was also given that since such cooperation involves mutual benefits and risks, it is important to spend time building trusting relationships.

Toyota South Africa Motors (TSAM), which employs around 7,950 people and produces approximately 154,000 cars per year (mainly the Corolla and Hilux), implements various measures in relation to human rights in its workplaces. For example, the content of initiatives undertaken by the company in response to the country’s measures to correct employment imbalances, as well as topics such as sexual harassment, form part of the required education. TSAM is working to prevent unjust discrimination and correct imbalances in its workplaces in addition to taking measures such as those related to employment, appointment, and promotion. As a result, drastic, continual improvements have been made in addressing the racial imbalances stemming from the apartheid policy of the past. For example, the percentage of non-white employees in top management has increased from 14.8% in 2009 to 33.3% in 2012. TSAM is also making proactive efforts in response to HIV/AIDS based on a consensus between labor and management to give consideration to employees infected with HIV to enable them to continue working. In 2010 the Government of South Africa introduced Health Counseling Testing (HCT), which is testing related to adult diseases such as blood pressure and blood cholesterol that is carried out at the same time as HIV and AIDS screening. This testing is a new attempt to help prevent adult diseases, which are increasing every year, as well as reduce the number of people who are reluctant to undergo medical examinations. All of TSAM worked to improve the percentage of people who undergo HCT, resulting in a substantial increase. TSAM has also HCT Utilization Percentage of Non-white Employees in Top Management strengthened its medical 100 Total percentage of non-white care for employees who 80 employees 2009: 88.3%, 2012: 91.4% 2009 4.9% 9.8% 14.8% receive positive results, 62 60 51 and the number of 2012 12.5% 20.8% 33.3% 33 40 employees who die or contract diseases has 20 0 10 20 30 40 (%) decreased in recent years. (%) 0 African

Indian

’09

’10

’11 (FY)

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Achieving sustainable growth through the virtuous cycle—Making better cars and enriching lives of communities leads to a stable base of business Satoshi Ozawa Executive Vice President

Contributing to Society through Management that Shows Respect for People and Is Based on Mutual Trust and Mutual Responsibility A Relationship of Mutual Trust and Mutual Responsibility Supporting a Stable Base of Business In order to support making better cars and accomplish a stable base of business, Toyota aims to realize management that shows respect for people and build stable labor-management relations based on mutual trust and mutual responsibility, as well as to have all employees display their abilities to think, be creative, and utilize their strengths to the maximum extent possible. Toyota experienced labor disputes and personnel cuts during the management crisis of the 1950s. These difficult experiences led Toyota to create a company where it would never again have to

dismiss its employees. After holding exhaustive discussions on the best course of action between labor and management, both parties came to a mutual understanding where employees would proactively cooperate to improve productivity, while the company would work to maintain and improve working conditions. Further, by sharing information and enhancing employee awareness in times of crises, Toyota also created a relationship of mutual trust and mutual responsibility based on which all employees execute their duties and responsibilities for the prosperity of the company.

The Four Principles of Building a Relationship of Mutual Trust and Mutual Responsibility First of all, we believe that employment, safety, and health are matters of the highest priority so that employees can work with confidence, and to this end we have developed a range of measures. In addition, we have worked to cultivate teamwork and promote continual improvements by enhancing two-way communication between the company and its employees, sharing information during times of crises and encouraging a sense of unity throughout the entire company. Efforts are also being made to create ample systems and develop human resources with the aim of enabling employees to demonstrate their abilities to the fullest. We believe that carrying out personnel and labor management that is based on these four principles makes it possible to maximize the entire company’s performance and create a stable base of business.

Basic Principles of Human Resources Management 1. Creating a workplace environment where employees can work with their trust in the company 2. Creating a mechanism for promoting constant and voluntary initiatives in continuous improvements 3. Fully committed and thorough human resources development 4. Promoting teamwork aimed at pursuit of individual roles and optimization of the entire team

Establishing a relationship of mutual trust and mutual responsibility Realizing management that shows respect for people

Sharing the Origin of the Toyota Way with All Employees This ideology has been systematically organized as the Personnel and Labor Toyota Way, which is shared throughout all of Toyota’s global business units. In this way, management and various measures based on the Toyota Way are implemented around the world. At Toyota, we believe that we can strengthen the bonds between labor and management for which this relationship of mutual trust and mutual responsibility serves as a foundation. We also believe that we can contribute to society and customer satisfaction by realizing management that shows respect for people.

In order to engage in monozukuri (manufacturing) that exceeds the expectations of customers, it is necessary to have a strong desire to sincerely listen to the opinions of people who support Toyota, as well continue to reinvent ourselves and fulfill challenging goals. Underlying this feeling are Toyota’s values that have been passed down since its establishment—the Toyota Precepts, Toyota Guiding Principles, and Toyota Way. Each of Toyota’s more than 300,000 employees around the world share these values while carrying out their individual business activities. The sharing of such global values is the foundation of making better cars, contributing to society through these cars, and consequently increasing the number of cars sold and profit. This leads to reinvestment in the making always better cars. Toyota’s concept for its business activities is to accomplish sustainable growth through this virtuous cycle. We will work to create solid profitability that is able to respond to environmental changes and support this cycle through further, continual improvements.

Making Efforts toward Continual Improvements to Accomplish Solid Profitability, and Making Better Cars Toyota’s basic management principles entail contributing to society through its business activities while realizing stable, long-term growth. The three key components of Toyota’s financial strategy are “growth,” “efficiency,” and “stability.” We believe that by implementing policies for these three components while maintaining balance over the medium- and long-term, it will be possible to accomplish stable, sustainable growth and at the same time lead, increase our corporate value. In addition, Toyota aims to achieve sustainable growth hinging on always better cars and based on the Global Vision, even in the midst of any type of severe management environment. If customers accept our products as better cars, this will lead to increased numbers of cars sold and higher profits, which will make it possible for us to invest in always better cars. Delivering always better cars and contributing to the enrichment of the lives of communities consequently leads to greater profit. This is the spirit to which we aspire to achieve sustainable growth. This cycle is supported by the aims of the Global Vision. Even amid a harsh management environment with a yen/dollar exchange rate of ¥85 to the dollar and a unit sales volume of 7.5 million cars, we will endeavor to restore Toyota (unconsolidated) to profitability. We will work toward achieving a consistent consolidated operating income of approximately one trillion yen and a consolidated operating income ratio of 5%. Production was reduced in FY2011 due to the Great East Japan Earthquake and the floods in Thailand. However, production was normalized more quickly than expected and we were able to move toward recovery as a result of devoted efforts to restore production. Regarding the sharp appreciation of the yen, the entire Group joined together and made efforts including those to cut costs. In this way we were able to accomplish further constitutional improvement toward the creation of solid profitability. Toyota will continue to work toward becoming a corporation that is capable of realizing sustainable growth, and will move forward with a sense of unity between all 320,000 Toyota employees worldwide.

Stable Base of Business Regional Strategy

Product Strategy

Quality

Cost

HR Development

Business Strategy

Improve competitiveness for products and costs

Solid Profitability  Achieve consolidated operating income ratio of 5% (approximately one trillion yen)  Restore Toyota (unconsolidated) to profitability

Achieve both goals as soon as possible

Regional strategy Providing Toyota’s unique products and services tailored to the needs of each community and country

Product strategy • Strengthening product appeal • Expanding the lineup of eco-friendly vehicles • Positioning Lexus as a truly global premium brand from Japan • Global sales ratio (2015 Sales Plan): Industrialized nations (Japan/North America and Europe) 50%, emerging markets 50%

Supply strategy • Japan: Manufacturing hybrid vehicles and other technologically advanced, high-value-added products • North America and Europe: Striving to maximize productivity at existing plants Signing ceremony for the Joint Declaration of Labor and Management in 1962 (Right: then-President Fukio Nakagawa; Left: Toyota Motor Workers’ Union Chairperson Kazuo Kato)

• Emerging markets: Expanding production capacity as necessary, then analyzing the timing and scale of investments

New business strategy Developing the Smart Community Service to link vehicles, homes, and information networks (contributing to the building of next-generation communities)

46


47

Special Feature Stable Base of Business


Stable Base of Business Special Feature


WorldSkills Competition

An ongoing commitment to developing human resources

The WorldSkills Competition, which consists of 40 events in ten categories and is targeted specifically at young engineers, is a kind of “Olympics for Engineers.” The international version was launched in 1950 in Europe and is held every two years, while the National Skills Competition in Japan, held annually, began in 1963. Toyota’s first entry into the WorldSkills Competition was in the 11th international competition in 1962, where it won gold in the milling machinery category. The company next appeared at the 6th National Skills Competition in 1968, and has attended every competition since. Gold medal winners from the Japanese championships are automatically chosen to represent Japan at the WorldSkills Competition the following year. The aim of the WorldSkills Competition is to promote vocational training in the workplace.

to enhance workplace strengths is the key to staying at the forefront of monozukuri At Toyota, the customer always comes first. This founding credo forms the

Toyota is a staunch supporter of the WorldSkills Competition, which brings rewards in the form of skills enhancement, discipline and increased workplace motivation. The maximum age of competitors is 23, which means that most are specially selected new recruits who have undergone extensive training at the Homi Training Center. In order to create human resources that will form the core of the company’s future “monozukuri,” many hours are spent developing problem-solving techniques that require both technical skills and concentration. Those who take on the challenge of appearing at the WorldSkills Competition have the ability to take on challenges and overcome obstacles through perseverance and hard work. These people will form the next generation of skilled engineers at Toyota.

Seven Japanese and Four International Gold Medals

basis of our everyday business operations. To ensure that we always deliver the best possible products to the market, we maintain a resolute commitment to quality and monozukuri (manufacturing) while constantly striving to refine

The Japanese national championships in December 2011, held in the aftermath of the Great East Japan Earthquake, was spread across 17 sites in four prefectures (including Shizuoka prefecture). There were 1,066 participants. Toyota entered nine events and took home a record tally of seven gold medals. The number of prize-winners by group company also hit a record. Meanwhile, four Toyota employees represented Japan at the WorldSkills Competition in London in October 2011, which attracted a total of 944 participants in Prizewinners at the National Skills Competition Prizewinners at WorldSkills Competition Endeavor Endeavor 850 teams drawn from 51 countries and regions. Silver Bronze Total Silver Bronze Total Gold Gold award award Toyota employees contributed four of Japan’s haul Grand total 115 173 154 213 655 Grand total 23 13 8 6 50 of 11 gold medals, while a Toyota Motor Thailand 7 4 6 10 4 0 0 0 2011 2011 27 4 Co., Ltd. (TMT) employee also won a gold medal 4 8 7 6 25 0 2 0 0 2 2010 2009 for Thailand, bringing Toyota’s global medal tally 5 5 7 7 2 1 1 0 2009 2007 24 4 to five.

and enhance our skills and competencies. Toyota understands that ultimately, products are manufactured by people, and that monozukuri is predicated on workers. Since as a manufacturer, our growth is dependent on the skills and competencies of our workers, all employees have a shared appreciation of the Toyota Way, and our comprehensive system of training and awareness programs based on on-the-job training (OJT) provides a solid foundation for the quality ideals that lie at the heart of the Toyota management philosophy.

Engineers Pursue Global Quality Standards and Strive to Realize World-leading Quality As a global producer with manufacturing operations throughout the world, quality assurance is our single most important objective—in other words, to ensure that every Toyota product, no matter where it is made, meets the same exacting quality standards. We want every one of our products to be “Made by TOYOTA,” as opposed to “made in the respective country of manufacture.” To this end, the GPC* coordinates training and skills programs for local employees at all Toyota plants in order to ensure that quality standards are consistent throughout the world. Meanwhile, in the pursuit of the world’s highest quality, we provide training and development for our young employees and actively support participation in the WorldSkills Competition. *GPC: Global Production Center

equipment as well as training manuals complete with animations and videos that are designed to promote faster and more efficient skills acquisition. Local GPCs have also been set up in the United States, United Kingdom and Thailand in a bid to accommodate increased production capacity and promote skill levels in line with the global standards. The experience of the 2009 recall demonstrated the need for more rigorous quality control in production involving improved training in the fundamentals of manufacturing, higher individual skill levels of managerial staff and production employees based on ongoing quantitative monitoring of quality standards in everyday procedures and specialized pre-process and post-process training. Toyota is working closely with related divisions to ensure that training and skills development programs are both up to date with the latest developments in manufacturing and production technology and tailored to both regional differences and the specific circumstances of production affiliates.

GPC Trainees

In Line with the Made by TOYOTA Principle, GPC Promotes a Uniform Approach Towards Developing Employees Who can Meet Rigorous Global Standards

48

2009

22

2010 The Global Production Center was set up in 2003 to improve the efficiency of skills development programs, provide tools and framework for supervisors and administrators, and maintain the strictest quality standards at production affiliates throughout the world. The GPC has developed and provided a range of training

48


1,488

167 1,507

2,893

1,215

61

1,000

Grand total

Total 3,130

2,967 0

72

956 2,000

Total 5,069

344

59

2011

454

3,000

91 Total 4,145

4,000

33,508

Domestic (Japan): 21,245 3,595 Overseas (Japan): North America (NA-PSC): 4,661 2,033 Europe (E-GPC): Asia and Oceania (AP-GPC): 1,974

5,000

Domestic (Japan)

Overseas (Japan)

Europe (E-GPC)

Asia and Oceania (AP-GPC)

North America (NA-PSC)

VOICE

Winner at the WorldSkills Competition

Atsuya Kamioka

Toyota President Akio Toyoda with gold medalists

Comments from Secretariat

Plant Engineering Div. IT Network Systems Admin category

Tamotsu Nishijima

I’ve been training hard since winning the silver medal last time around. The international event is more difficult because there are so many people watching, so I got everybody to come and watch me train so that I’d get used to it. Thanks for your help! I couldn’t have done it without you!

The WorldSkills Competition gets more difficult every year, so the instructors need to be constantly learning. The longstanding emphasis on education at the heart of the Toyota corporate culture is the reason for our success at the WorldSkills Competition. Skills are hard to regain once lost, which is why Toyota is committed to passing on our proprietary skills and corporate culture to the next generation.

Toyota Secretariat for WorldSkills Competition

Left to right: Keisei Sogabe (creative modeling), Atsuya Kamioka (IT network system admin), President Akio Toyoda, Yuichi Sawaki (autobody repair), Kengo Watanabe (CNC milling)

COLUMN

VOICE

Gold Medal Win by Overseas Affiliate Demonstrates High Technical Prowess

Toyota’s overseas affiliates have been entering the WorldSkills Competition since 2007. In 2011, Thailand and Indonesia each sent two employees as their country’s representatives, and one employee took home the first ever gold medal for an overseas affiliate. Local workers who were trained at the GPC in Japan are now responsible for training the next generation back home. Toyota provides assistance for WorldSkills Competition participants as part of the overall commitment to employee training and development. The four WorldSkills Competition entrants from overseas affiliates came to Japan with their supervisors to undergo additional training alongside the Japanese entrants. It was an inspirational learning experience, with the winner of the gold medal in particular seen as a model young employee who is setting a great example in the workplace. Training for the WorldSkills Competition

VOICE

WorldSkills Competition Winner

Tanongsak Hengsawad, Toyota Motor Thailand (TMT) Creative Modeling category

So many people helped me on my way to winning this gold medal. I look forward to using the experience I have gained in my everyday work. And I want to pass on my skills to subordinates in the future.

49



Employees

Employees Basic Employment Principles

Create working environments for various employees to work proudly and with loyalty and confidence in fulfilling their potential, which realize their

Excerpts from the Guiding Principles at Toyota

self-growth

1. Honor the language and spirit of the law of every nation and undertake open and fair corporate activities to be a good corporate citizen of the world 5. Foster a corporate culture that enhances individual creativity and teamwork value, while honoring mutual trust and respect between labor and management

Sharing the Toyota Way Globally and Implementing Human Resource Measures Since its foundation, Toyota has contributed to society through pursuing “conscientious monozukuri (manufacturing)” as its philosophy. Within this philosophy, beliefs and values for business original to Toyota have been created and techniques for management and implementation have been devised to be fostered as the source of Toyota’s competitive power. Business beliefs and values such as these handed down in Toyota as tacit knowledge have been organized and compiled into the “Toyota Way 2001” so that they can be viewed and understood by anyone. With “Continuous Improvement” and “Respect for People” as its pillars, the Toyota Way 2001 has five keywords, which are “Challenge,” “Kaizen,” “Genchi Genbutsu,” “Respect,” and “Teamwork,” and is shared throughout Toyota globally.

Challenge We form a long-term vision, meeting challenges with courage and creativity to realize our dreams.

Employees We support equal employment opportunities, diversity and inclusion for our employees and do not discriminate against them. (Guiding Principles 5) Employees We strive to provide fair working conditions and to maintain a safe and healthy working environment for all our employees. (Guiding Principles 5)

Genchi Genbutsu We practice genchi genbutsu, go to the source to find the facts to make correct decisions, build consensus and achieve goals at our best speed.

Continuous Improvement

Respect for People

Labor-management Relations Based on Mutual Trust and Respect Respect We respect others, make every effort to understand each other, take responsibility and do our best to build mutual trust.

Teamwork We stimulate personal and professional growth, share the opportunities of development and maximize individual and team performance.

(Continuous Improvement, Respect for People)

is one of Toyota’s most important

Safety and Health

bases for our business activities. Each workplace serves as the individual driving force behind a

Human Resource Development Toyota is working to develop

programs based on the Toyota Way, and strives for creation of a workplace worthy of vigor and enthusiasm.

Pride and Loyalty

Toyota strives to foster employees’

vigorous workplace by greater

pride and loyalty to the company,

enhancement and reinforce-

workplace and colleagues by encouraging a culture of teamwork

based on the Toyota Way with

through communication and mutual ab St

le Em


ili ty)

ment of educational programs OJT as an essential.

50

and reinforcement of educational

Diversity and Inclusion

Pride and Loyalty Human Resource Development

plo po es ym lR en a u t t an Mu dL nd abo st a r-ma u r T al nagem ent Relationship (Mutu

In the 50th year since the Joint Declaration of Labor and Management Joint Declaration of Labor and Management (excerpts)  We will contribute to the development of the national economy through the prosperity of the automotive industry.  The relationship between labor and management shall be based on mutual trust and respect.  We will endeavor to maintain and enhance the company's prosperity and labor conditions through the improvement of productivity. We hereby swear to further reinforce ties between labor and management based on mutual trust and mutual respect like two wheels on a car, traveling down the same road, and, by exceeding expectations for customer satisfaction and social contribution, to pass on the spirit of the Joint Declaration of Labor and Management and Toyota’s monozukuri to the next generation.

At the 50th Anniversary Signing Ceremony (Left: President Toyoda, Right: Chairperson Tsuruoka)

May 29, 2012 Akio Toyoda, President, Toyota Motor Corporation Mitsuyuki Tsuruoka, Chairperson, Toyota Motor Workers' Union

Toyota plans greater enhancement

Work with Vigor and Enthusiasm

company-wide effort.

The approach of "mutual trust between labor and management" became the basis of labor-management relations in the Joint Declaration of Labor and Management concluded in 1962 based on lessons learned from earlier labor disputes. As 2012 marks the 50th year since the signing of the declaration, Toyota has once again vowed to further reinforce ties between labor and management.

Diversity and Inclusion

The Toyota Way

Ensuring employee safety and health

Chapter 1. Through our communication and dialogue with the company, we (people working for TOYOTA) strive to build and share fundamental value of “Mutual Trust and Mutual Responsibility.” TOYOTA (TOYOTA MOTOR CORPORATION and its subsidiaries) endeavors to improve its business achievements so that TOYOTA can continue to provide employment and fair and stable working conditions for each of us. Simultaneously, TOYOTA promotes a work environment in which each of us can work in a harmonious and dynamic manner.

Excerpts from the Toyota CSR Policy

Kaizen We improve our business operations continuously, always driving for innovation and evolution.

Toyota aims to create a corporate culture that reliably reflects the Toyota Way 2001 in actual corporate activities and the work of individual employees. Therefore, founded on a stable employment and labor-management relationship based on mutual trust and mutual responsibility, Toyota promotes various measures including human resource development and healthcare so that employees can work with vigor and enthusiasm. Toyota also respects employees’ diversity in areas such as culture, nationality, race, language, religion, gender, age and perspective.

Safety and Health

Excerpt from the Toyota Code of Conduct

ib ns

cooperation.

Maintaining Employment even during Flooding in Thailand when Global Production was Affected Although no direct damage to Toyota was caused by the flooding in Thailand that occurred in October 2011, parts supply from suppliers affected by the flooding was hindered and operations had to be temporarily suspended in a total of 12 affiliates (approximately 55,000 people/day affected) in Asia, North America and Europe. In order to respond to this situation, Toyota worked as one with its employees, setting up substitute operation days and conducting activities for strengthening of work structures (education, improvement) at each workplace.

Shifts in Number of Global Toyota Employees (Thousand employees)

340 316

320

321

321

326 318

Newly Operating Plants Fiscal year

Name of plant (Region)

Number of new plants

FY2003

TMMAL (Alabama, North America)

1

FY2004

TMMBC (Mexico, North America) FTCE (Changchun, China) TFTD (Tianjin, China)

3

FY2005

TPCA (Czech Republic, Europe) TMIP (Poland, Europe) GTE (Guangzhou, China)

3

FY2006

TMMTX (Texas, North America) SFTM (Sichuan, China) GTMC (Guangzhou, China)

3

FY2007

TMMR (Russia, Europe)

1

FY2011

TMMS (Mississippi, North America) Creation of 2,000 new jobs TDB New Plant (Brazil, South America) Creation of 1,500 new jobs

2

299

300 285 280 264

266

260 240 220 200

’03

’04

’05

’06

’07

’08

’09

’10

’11 (FY)

51


Employees The Gate to Safety

Basic Concept of Safety and Health Ensuring employee safety and health is one of Toyota’s most important business activities and has a universal and timeless value. Upon assuming the position of General Safety and Health Supervisor in 1957, Honorary Advisor Eiji Toyoda explained his basic stance on safety and health: “Safe work is ‘the gate’ to all work. Let us pass through this gate.” With this basic philosophy always in mind, Toyota is striving to create a dynamic working environment that is conducive to the mental and physical well-being of its employees.

Basic Concept of Human Resource Development

Basic Philosophy for Safety and Health

We are working to develop human resources by implementing an educational program based on OJT (on-the-job-training), which is crucial for the development and generational transfer of excellent monozukuri (manufacturing), with the five Toyota Way keywords as a fundamental basis.

Safe work Reliable work Skilled work Safe work is “the gate” to all work. Let us pass through this gate.

Practice of the Toyota Way

For more details, please refer to the following web page. http://www.toyota-global.com/sustainability/ csr_initiatives/stakeholders/employees/

Promotion of 3-pronged Approach to Safety and Health

So that the Toyota Way, which explains Toyota values and ways of thinking, can be understood and practiced by employees globally, we have organized and arranged job types and techniques into what we call “Global Contents.” These Global Contents are communicated to Toyota employees through courses and OJT both in Japan and overseas. List of Global Contents

In FY2011, “building a culture that promotes interactive development of safety and health” was set as the foundation of Toyota’s global policy. Total accidents decreased by 30% over the previous year as a result of basic rule observance and interdependent bottom-up initiatives involving the whole company that were implemented so that employees at every workplace realize the risks present and take independent preventive action with the aim of making safety and health a “custom and culture” at Toyota. In FY2012, we will continue to promote the three pillars of safety in order to further increase our safety level.

Administrative/ Engineering employees Policy management Managers Education of subordinates

Three Important Items for Implementation in FY2012 Safety-oriented culture

Educating employees to enable them to protect themselves

safety management system

Establishing OSHMS that leads to recurrence prevention, incorporation of relevant party viewpoints and enhanced workplace strength

On-premise supplier

Clarification of and absolute adherence to on-premise

safety in plant

management rules at plants

Establishment of a

Frequency of Industrial Accidents

All industries

(frequency rate of lost workday cases) 2

Manufacturing industries

Toyota

Ji Kotei-Kanketsu

General employees

’07

’08

’09

’10

’11

(Year)

Building up Good Health In FY2011, BIP2 activities (BMI reduction and anti-smoking measures) were implemented in order to improve lifestyle habits and “health mindsets” whereby employees protect themselves. Specifically, this included “healthy PDCA” (Plan, Do, Check, and Act) at workplaces, on-site work-out lectures with exercise trainers, mini health seminars on diet and giving up smoking, health and hygiene exhibitions, and individual guidance to those at risk of metabolic syndrome. As a result, we have improved lifestyle habits (a reduction in the proportion of smokers). Smoker rate BMI BMI and Smoker Ratio 39.2

37.6

35.9

26.9

24.7

31.8 33.6

30 20

27.7

Bolstering Mental Health Care In FY2011, to enable early detection and action for people requiring mental health care, active listening courses were held for managers and supervisors in order to enhance care by managers and in turn managers’ ability to notice the signs of poor mental health. For self-care, courses were held for new assistant managers and younger employees. Rehabilitation support for employees taking administrative leave was enhanced through coordination with workplace counselors, and information on mental health was provided on the Toyota intranet Active listening courses at all workplaces. 52


0

26.9 ’07

’08

’09

Global Contents Toyota Way

Values and ways of thinking that should be held by those working for Toyota

Toyota problemsolving techniques

Techniques for improving current conditions in order to realize ideal working conditions

Ji Kotei-Kanketsu (Built-in quality with ownership)

How to work in order to continually produce the best output

Education of subordinates

Systems for training subordinates through one’s daily work

Policy management

Managing implementation items that should be initiated in order to accomplish workplace missions and create new value

Basic skills

Minimum skills necessary for production line work

Production skills

 Knowledge regarding recognizing irregularities and work points  Trouble-shooting capability

Skills and Roles of Management and Supervision

 Manager and supervisor skills for soundly managing standard operations  Group and team operational knowledge, etc. for managing irregularities

25.2

10

Health and hygiene exhibition (diet)

Basic skills

Toyota Way

0.5

40

(Built-in quality with ownership)

Problem-solving

Source: All industries/Manufacturing industries/Automotive manufacturing industry (Results of Ministry of Health, Labour and Welfare 2011 survey on industrial accidents)

On-site work-out lecture

Production skills

1

(%) 50

Skills and roles of management and supervision

Automotive manufacturing industries

1.5

0

Shop floor employees

’10

’11

(Year)

Reinforcing the Health Management of Overseas Personnel In FY2011, we continued to provide health check-ups for overseas personnel and provided industrial physician advice by making use of health follow-up sheets. While industrial physicians routinely made rounds checking on medical conditions at local sites, medical information was also provided using the Internet for locally-stationed staff and follow-up e-mails regarding self-health management were sent out. Tele-conferences were also routinely held with local points of contact and information exchanged.

Human Resource Development in the Workplace (OJT) The foundation of human resource development at Toyota is on-the-job-training (OJT) but we also provide off-the-job-training opportunities for development through guidance by supervisors or superiors. For example, in a globally-shared training program, employees, following group training, spend approximately six months attempting problem-solving during actual work duties.

Development of Human Resources with Strong Language Abilities and a Local View and Local Sense of Regions around the World The OT-clab (Overseas Trainee – culture language business) program started in 2002, is a system for sending young employees to overseas sites as trainees in order to develop human resources. As of January 2012, 84 trainees were working hard at 37 affiliates in 20 countries to study working procedures, business practices and accurate English and host country language communication abilities while respectively reporting to local supervisors under the program.

Ko Nakamura OT-clab Body Assembly Engineering Div. Dispatched to: TGB (UK) Dispatch period: January 1, 2012 to January 1, 2013

ICT Program for Self-reliance of Affiliates and Contribution to Local Communities In order to promote self-reliance in overseas affiliates, the ICT (Intra Company Transferee) program temporarily transfers employees of overseas affiliates to TMC for human resource development through on-the-job training. Transferees learn skills and know-how throughout their training periods which range from six months to three years. As of the end of April 2012, a total of 450 transferees from 48 affiliates in 27 countries were working in Japan under the program.

Heather Nelc ICT Production Engineering Planning Div. Dispatched from: TEMA (North America) Dispatch period: September 2010 to August 2012

COLUMN

Global Human Resource Development of Young Employees New Establishment of Study-abroad Program Prior to Entering TMC for Job-offer Recipients In the face of rapid globalization, Toyota in FY2011 newly established a Study-abroad Program for job-offer recipients in order to quickly develop human resources that can play active roles on the global stage. This program provides opportunities for recipients of job offers to use the period after being given a job offer and prior to entering the company to study abroad. Therefore, the program aims to help participants develop a broad network with university students outside Japan and to learn more about the roles expected of them within the international community. For the first year of this program, 12 participants were selected among applicants from the clerical and technical job-offer recipients of 2011 and dispatched in April 2012. For six months from April to September, they will study language and business skills at the University of Pennsylvania in the United States before entering the company in October. TMC will cover costs for tuition, dormitory fees and roundtrip airfare while participants will be responsible for living expenses.

53


Employees

Over sixties People with disabilities

Basic Concepts of Diversity and Inclusion

Promotion of Localization of Management at Overseas Affiliates

Global human resources

For companies engaged in business around the world, it is important to promote a diverse range of human resources activities while raising the skills of each individual employee. Toyota is establishing a corporate culture with abundant vitality by fostering human resources that include a diverse range of individuals. Although the focus of respect for diversity varies in different countries and regions, Toyota strives to be a company with a working environment that promotes self-realization while respecting diversity of values and ideas among its employees.

Fixed-term contract employees

Work-life balance

Full-time Toyota Employees (unconsolidated basis) As of March 31, 2012 Number of fulltime employees

Male

Female

Total

61,543

7,418

68,961

38.9

31.5

38.1

17.8

10.5

17.0

Average age Average years of service

Promoting Various Measures to Create a Workplace Full of Vigor and Enthusiasm Toyota is currently working to establish various programs to help female workers balance work with childcare and to educate employees on effectively utilizing the programs while refining communication tools for these activities. Trends in Number of Employees Taking Childcare Leave and Using the Flexible Working Hours System in FY2011 System

Male

Female

Childcare Leave

20 (-1)

399 (+17)

Flexible Working Hours System

24 (+13)

724 (+142)

(Figures in brackets are comparisons with the previous fiscal year)

Recent Key Initiatives FY

Support for balancing work with childcare

2009 2010

 Childcare Leave First Guidebook distributed

2011

Support for career development  Networking Event for Female Shop Floor Workers hosted  Social Gathering with Overseas Female Officers hosted  Social Gathering with Overseas Female Officers hosted

Pregnancy, Childbirth and Care-related Benefits for Employees Pregnancy Determined

Maternity Leave Plan

for Female Employees Conducting Work that Requires Standing Up

Childbirth 6-week Maternity Leave

Age 1

Age 2

Age 3

4th Grade Completed

8-week Postnatal Leave

14-week Maternity Leave for multiple pregnancies Nursing Time (2x30 min/day) Parental Leave Exemption from Nonscheduled Work

Toyota has been promoting the localization of management at overseas affiliates from a medium- to long-term perspective. The head office has clarified division of roles, determining what things are to be done and how they will be done at overseas affiliates. In principle, executives responsible for overseas operations (including chief officers) live at the respective overseas location and create a management system that has close ties with the local community. Appointment of local human resources is also being actively promoted and, in our Europe Operations Group, Managing Officer Didier Leroy (President of Toyota Motor Europe (TME)) has become the first native European to be appointed Chief Officer of TME (appointed as Senior Managing Officer from April 2012). As of June 2012, the number of foreign executives at Toyota Motor Corporation (TMC) was six. Toyota will continue to actively foster and promote local personnel on the principle that this ensures the right resources will be in the right places, driving forward the localization of decisionmaking, operation and management posts. This should facilitate the timely understanding of customer and employee needs in each region, enabling us to make appropriate business decisions.

Limiting Overtime Work (up to 24 h/month and 150 h/year) Exemption from Late-night Work Shorter Working Hours (at workplaces instituting flextime) Flextime System with no core time Child nursing leave (5 days for each child up to 4th grade elementary school. Maximum 10 days/year) Working Partially at Home (allowed after 3:00 p.m.) * A regular employee is entitled to take two years of nursing care leave (or four years including applicable periods for Working Hour Reduction, Core Time Exemption and Partial Work at Home)

COLUMN

A Female Employee who Followed Her Own Path, without Worrying about Precedents Hiromi Oda, Project Manager, Japan Service Field Operations Div. I moved to the Customer Service Group following approximately ten years spent in the Engineering Group upon entering Toyota. I was previously in charge of overseas operations, and in my current post act as a mediator between Toyota and sales outlets in Japan. When I first considered what sort of job I really wanted to do, I realized that I wanted to know what kind of cars made customers happy, understand customer needs and the market, and to utilize this information to enable the manufacture of better cars. With this in mind, I put in my transfer request. When my hopes were fulfilled despite the lack of precedent, I was very grateful to my superior and colleagues.

A Male Employee who Respects and Supports His Wife’s Feelings towards Work Takeshi Kasugai, Group Manager, Human Resource Div. My eldest daughter is one year and ten months old. This April, my wife returned to work from childcare leave and our lifestyles were turned upside down. Although we basically try to split housework and childcare duties evenly between the two of us, it is harder to balance both of our jobs with housework and childcare than we had imagined. At first, we were unable to strike a good balance and pace between us and there were times when we clashed. When this happened, I took action to become more considerate. When you exceed your partner’s expectations, they become grateful. I feel that this is also true at work.

Female Executives Help Each Other Maintain Work-life Balance

Nancy Fein, Vice President, Toyota Motor Sales, U.S.A., Inc. (TMS)

In 1997, I was promoted to corporate manager along with five other women. Even for the United States, promoting six women at once to such positions was unusual. I am celebrating my 25th wedding anniversary this year, and in order to ensure the right balance between work and home, the first thing I had to do was structure my life, set a daily schedule, and use my limited time efficiently. The important thing is not to focus entirely on one’s job, but strike a balance between work and one’s private life. Another important thing is developing a network of people who can help you adjust your schedule and work load. The strong, mutually supportive relationships I have with the other women in my situation makes achieving a good work-life balance all the easier.

Job Placement Program for Over-sixties Following the 1991 introduction of the Internal Re-employment Program for Retired Professionals, an Optional Re-employment Application System was launched in 2001 to outplace applicants to external affiliates and other sites, providing a framework for helping over-sixties to continue working at either external or internal workplaces. Programs were updated to their present state based on the revised Law on Stabilization of Employment of Older Persons that came into effect in FY2006, in order to expand re-employment opportunities. A review was also initiated at the same time to refine policies on shortening work hours in response to growing diversity in job preferences and so on.

Employment of Fixed-term Contract Employees With regard to fixed-term contract employees, while we already take steps to ensure that appropriate employment and contract renewals are conducted, we are also putting our utmost efforts into creating stable employment conditions and improving workers’ employability. The full-time staff appointment system gives fixedterm contract employees who have worked for Toyota for at least one year and have a recommendation from their workplace the chance to take an examination for regular employment. This leads to increased motivation and vitality. Fixed-term contract employees can also take the examination in their third year. Toyota plans to continue to promote appointment of fixed-term contract employees as full-time employees.

Employment of People with Disabilities Toyota believes that people with disabilities deserve the chance to become socially self-reliant and we make it a rule to provide them with opportunities to work together with non-challenged individuals. A number of such people are engaged in a range of roles at various workplaces. As of June 2012, the number of people with disabilities employed was 1,015 and the ratio 1.96% (for Toyota only), which is above the legal requirement of 1.8%. Efforts are under way to create an even more employee-friendly working environment, including hosting an internal sign language workshop, deploying counselors to provide all kinds of support, and spreading good workplace examples across the organization.

Increasing Employment Opportunities for People with Disabilities: Toyota Loops Toyota Loops Corporation was established to increase employment opportunities for people with disabilities, and began operations as a special-purpose subsidiary in FY2009. It is mainly entrusted with Toyota’s internal printing (creating manuscripts, printing and bookbinding) and mail service duties (including internal mail, postal collection, delivery and sorting, and sending sales outlet mail). Since FY2011, it has newly been entrusted with document insertion and the issuing of visitor or employee identification cards. Furthermore, the Toyota Loops head office has a universal design throughout the whole company building and provides specially-adapted facilities, as well as mental health care through support staff so that people with disabilities can work at ease with the pleasure of feeling their personal growth. Toyota is also actively conducting information exchange in coordination with welfare institutions, the government and local communities. In October 2011, Toyota Loops participated for the first time in the Aichi Abilympics where people with disabilities compete. All three employees who entered “DTP” and “Product packing” events received prizes. Toyota Loops plans to participate again in 2012.

Prize-winners at the Aichi Abilympics

Number of employees (as of June 2012) Employees with disabilities

103 65

Intellectually challenged employees

29

Employees with physical disabilities

29

Employees with psychological disorders Number of people with disabilities accepted for practical training in FY2011 Number of people accepted for observation in FY2011

7 39 people from 17 groups 565 people from 37 groups

*Affiliated departments at time of interview

54


55


Corporate Governance/Compliance To Be Rewarded with the Smiles of Employees

Corporate Governance

In order to strengthen its human resource base, which supports Toyota’s growth, the company has created a positive working environment in which employees can work with confidence, vigor and enthusiasm. Toyota strives to foster employees’ pride and loyalty to the company, workplace and colleagues by encouraging a culture of teamwork through communication and friendly competition.

“WE LOVE TOYOTA” Initiative to Create an “All Toyota” Sense of Unity In order to develop employee interest in the company’s operations and products, based on the notion of “All Toyota,” and to deepen loyalty, an internal campaign called WE LOVE TOYOTA has been carried out since FY2009. As a part of these activities, the 2nd WE LOVE TOYOTA seminar was held in April 2012. Approximately 350 participants attended including corporate executives and foreign employees. Teamwork and ties between participants were deepened by forming teams consisting of members who had never met before and holding an “Internal Prius Cup” while discussing the joy of driving.

Results of Employee Satisfaction Survey Toyota believes that the greatest assets a company has are its people and that customer satisfaction cannot be achieved without employee satisfaction. The employee satisfaction survey conducted in FY2010 on administrative and engineering employees revealed an affirmative response rate of over 70% regarding “satisfaction with company life” and “feeling that one’s job is rewarding.” The most common reason given for “satisfaction with company life” was “work quality and level” while young employees in particular gave “experiencing a sense of personal growth ” as the most common reason for “feeling that one’s job is rewarding.” The results of the survey conducted in FY2011 on shop floor employees revealed that the number of employees who answered that they were satisfied was 64.4%, an affirmative response rate of over 60% despite the impact of the earthquake disaster. The FY2010 survey conducted overseas had an affirmative response rate of 74% for administrative and engineering employees and 72% for shop floor employees. This employee satisfaction survey is conducted every other year and its analyzed results are used in planning and executing measures to allow employees to work with confidence.

Results of Employee Satisfaction Survey The 350 members who gathered together for the “Internal Prius Cup”

Administrative and engineering

Shop floor

(%)

(%)

80

80

Athletic Clubs Provide Exciting Discussion Topics Toyota has 35 clubs consisting of those for advanced athletes competing for national championships on behalf of the company and for employees who are engaged both in sports and a job function. All employees are proud of the clubs’ good showing and, beyond that, feel motivated and encouraged to see workplace colleagues competing strongly. The women’s softball club and the men’s basketball club Alvark won national championships in November 2011 and April 2012, respectively.

70

66.9

64.2

60

60

50

50

0

’06

’08

’10

(Year)

0

66.7 60.3

Toyota’s Basic Approach to Corporate Governance

Basic Concepts of Compliance

Toyota has a range of long-standing in-house committees and councils responsible for monitoring and discussing management and corporate activities from the viewpoints of various stakeholders. This is in order to make prompt decisions for developing our global strategy, speed up operation, and ensure heightened transparency and the fulfillment of social obligations. Toyota has a unique corporate culture that places emphasis on problem solving and preventative measures. Toyota’s approach is to build in quality through manufacturing processes, enhancing the quality of everyday operations and consequently strengthening corporate governance.

The Guiding Principles at Toyota state that Toyota will “honor the language and spirit of the law of every nation and undertake open and fair corporate activities to be a good corporate citizen of the world.” It is in this process that Toyota seeks to maintain compliance. In accordance with the Basic Approach to Internal Controls, Toyota is promoting initiatives centered on the construction of framework such as that for adopting and implementing the Code of Conduct and human resource development through education and other means. Toyota has also established consultation hotlines so no issues are overlooked and detailed responses can be made.

Systems for Ensuring Appropriate Management and Basic Approach to Internal Controls

Checking Activities to Enhance Compliance

At the general meeting of shareholders in June 2011, the number of directors was drastically reduced to maintain close and vigorous mutual communication and achieve fast decision-making. Toyota has adopted an auditor system to monitor management. Four of Toyota's seven corporate auditors are external auditors employed to increase transparency of corporate activities. As a system to ensure appropriate management, Toyota has convened meetings of its International Advisory Board (IAB) annually since 1996. The IAB consists of approximately 10 distinguished advisors from overseas with backgrounds in a wide range of fields, including politics and economics. In 2011, we established Regional Advisory Committees in major regions—such as North America, Europe and Asia—and we receive advice on diverse business issues from various perspectives. Using the following basic internal control policies established in May 2006 as a foundation, Toyota implements enhancements to its internal control system as necessary. Toyota’s Corporate Governance

71.3 70

64.4

Emphasizing Frontline Operations + Multidirectional Monitoring Appointment Board of Corporate Auditors

’07

’09

’11

(Year)

Majority are outside corporate auditors

External Accounting Auditor

Results of FY2010 Employee Satisfaction Survey (Administrative and Engineering Employees): Reasons for Affirmative Responses Items

Most common reason

Second most common reason

Third most common reason

Satisfaction with company life

Work quality and level

Human relations at the workplace

Pay level (wage, bonus)

Experiencing a sense of personal growth

Social significance

Authority and responsibility

Feeling that one’s job is rewarding

Compliance

Audit for consolidated financial statements and internal control over financial reporting

Disclosure Committee (disclosure systems)

International Advisory Board

Shareholders

Board of Directors

Labor-Management Council/ Joint Labor-Management Round Table Conference CSR Committee*

Senior Managing Officers or Managing Officers

Toyota Environment Committee

Internal Auditing Department (internal control systems)

* The CSR Committee deliberates on and makes decisions concerning CSR-related plans, corporate ethics, legal compliance, risk management and social contribution activities

Basic Approach to Internal Controls Fundamental Approach

Communication Activities within the Workplace

The women’s softball club that has successively won two consecutive league championships

56


Men’s basketball club, Alvark

Toyota is conducting a range of initiatives to ensure smooth communication within the workplace. One of these is lunchtime discussions held with foreign staff regarding anything from personal troubles and worries to differences in culture and ways of thinking, which deepens mutual understanding between Japanese and foreign staff.

• Draw out the good will, enthusiasm, and autonomous decision-making abilities of the people who perform work, based on the idea of “respect for people” • Establish structures within the work processes carried out by people and organizations that incorporate internal controls and establish checks and balances as well as management and oversight by directors • Establish inter-departmental organizations to supplement internal controls

Basic Policy (1) Legal compliance by Directors (6) Appropriateness of the business operations of the group (2) Retention and management of information relating to the execution of (7) Employees assisting the Corporate responsibilities by Directors Auditors (3) Regulations and other systems related (8) Independence of employees described in to the management of risk of losses the preceding item (7) (4) Efficiency of execution of responsibilities (9) Report to Corporate Auditors by Directors (10) Ensure the efficient execution of audits (5) Legal compliance by employees by the Auditors

In FY2008, Toyota started checking activities to enhance its compliance structure. In FY2009, it also started the checking of subsidiaries in addition to internal checking. In FY2010, we further enhanced our checklists and implemented additional strengthening of the structure. The results of the activities were reported to the CSR Committee, and Toyota continues to push ahead with improvements based on the results.

Education and Training to Ensure thorough Compliance To ensure that awareness of compliance issues extends from senior managers to all other employees, Toyota conducts education and training programs for directors, newly-appointed departmental general managers and newly-recruited employees in addition to company-wide e-learning programs. It also conducts seminars on business compliance regarding topics such as copyright, security control and products liability law.

Toyota Code of Conduct The Toyota Code of Conduct (adopted in 1998 as the Code of Conduct for Toyota Employees and revised in March 2006) organizes the basic attitudes necessary for people working at Toyota in order to put the Guiding Principles at Toyota into practice and fulfill social responsibilities, giving indication of some specific important points.

The Compliance Hotline and Other Hotlines Toyota has established a number of hotlines for swift and appropriate resolution of issues related to compliance, gender harassment, working conditions, and mental and physical health. The Compliance Hotline in the chart below allows employees to have consultations concerning compliance-related issues and has been set up at an outside law firm (subcontractor). Upon request, the content of consultations is conveyed anonymously to a secretariat within Toyota and the details are investigated with scrupulous care to ensure that the identity of the employee having the consultation is not revealed. If the results of the investigation indicate a compliance-related issue, a response is immediately Content and No. of Consultations with the Compliance Hotline (FY2011) implemented. Hotlines Established at Toyota

Improper cost and expense accounting procedures Personnel, labor and employment

4 69

Compliance Hotline

Personal information management, confidential matters

Heartful Net e-club

Personal matters

Gender Harassment Prevention Hotline

Other

26

Mental and Physical Health Hotline

Total

111

6 6

57



Financial Information

Financial Information Performance Data (consolidated basis) Making efforts toward continual improvements to

Vehicle Production/Vehicle Sales

accomplish solid profitability, and making better cars

(thousand units)

Vehicle production Overseas

Vehicle Production by Region (FY’12)

Japan

Overseas

Japan

6,000

achieve an operating income of 355.6 billion yen. Furthermore, with the Group as a whole promoting cost reductions and curtailment of fixed expenses, we made progress to accomplish solid profitability. For FY2012, with continuous profit improvement activities, we aim to become even stronger and secure a consolidated operating income of 1 trillion yen through utilizing our competitive product lineup (including our hybrid cars and IMVs as well as our new products,) and actively working to increase sales along with the unified and unceasing cost reduction efforts of all our suppliers.

Consolidated basis

Year ended March 2012 (April 2011 through March 2012)

Year ended March 2011 (April 2010 through March 2011)

Compared to previous year

Reference: (Unconsolidated) year ended March 2012 (April 2011 through March 2012)

18,583.6 bil. yen

18,993.6 bil. yen

-2.2%

8,241.1 bil. yen

(2) Operating income

355.6 bil. yen

468.2 bil. yen

-24.1%

-439.8 bil. yen

(3) Net income

283.5 bil. yen

408.1 bil. yen

-30.5%

35.8 bil. yen

(4) Total assets

30,650.9 bil. yen

29,818.1 bil. yen

2.8%

10,612.7 bil. yen

(5) Shareholders’ equity

10,550.2 bil. yen

10,332.3 bil. yen

2.1%

6,261.7 bil. yen

50 yen

50 yen

–

–

(6) Dividend per share

18.0%

Japan

28.2%

Japan

North America

North America FY ’12

FY ’11

10.8%

* Other regions: Central and South America, Oceania and Africa

Net Revenues and Operating Income by Geographic Segment (trillion yen)

Net revenues

Japan

North America

Europe

Asia

Other regions*


Capital Expenditure and R&D Expenses

(FY’12)

(billion yen)

(billion yen)

Operating income (right)

25.5%

Europe

17.1% FY ’10


(1) Net revenues

Asia

5.2% 53.0%

0

12 10 8 6 4 2 0 −2 −4 −6 −8

Other Regions* 17.5%

Europe

4,000

2,000

On a consolidated basis, Toyota saw an increase of 44,000 in unit sales to 7.352 million cars, but net revenues decreased by 2.2% to 18,583.6 billion yen, operating income fell by 112.6 billion yen to 355.6 billion yen and net income declined by 124.6 billion yen to 283.5 billion yen. The business environment was extremely difficult in the fiscal year that ended March 31, 2012 because of reduced production due to the Great East Japan Earthquake and the flooding in Thailand, the continued strong yen and other factors. Nevertheless, thanks to the efforts of our workforce, and all our suppliers and dealers who have done their utmost in working towards the recovery of production and sales, we were able to

Consolidated total 7,352 thousand units

Other Regions* 5.3%

Asia 19.4%

8,000

Summary of Business Results for FY2011

Vehicle Sales by Region (FY’12)

Consolidated total 7,435 thousand units

Vehicle sales

600 500 400 300 200 100 0 −100 −200 −300 −400

Capital expenditure

(billion yen)

R&D expenses (right)

2,500

1,000

2,000

800

1,500

600

1,000

400

500

200

0

FY’08

FY’09

FY’10

FY’11

FY’12

0

For more details, please refer to the following web page. http://www.toyota-global.com/investors/ir_library/annual/pdf/2012/index.html

Global Expansion Toyota respects the culture and customs of every nation and region and contributes to economic and social development through corporate activities in the communities.

Analysis of Consolidated Net Income* (billion yen)

* Net income attributable to shareholders of Toyota Motor Corporation

Europe Japan

8

Net income* (-124.6)

31 22,000

Operating income (-112.6)

15 Asia and the Middle East

69,000

23

Excluding Valuation Gains/Losses from Interest Rate Swaps (-91.8) Africa

11 5 40,000

32

408.1

North America

154,000 Central and South America

3 Increase in expenses, etc. Cost reduction -100 efforts 150

Effects of FOREX Rates -250

April 2010 – March 2011

58


Marketing efforts 150

283.5 Other -62.6

Non-operating income -17.7

Equity in earnings of affiliated companies -17.3

Income tax, etc. 23

51 24,000

Oceania

4 1

44

16

31,000

12,000 No. of plants and manufacturing companies (as of March 2012) No. of distributors (as of June 2012) No. of employees (manufacturing companies + distributors) * In Japan, Toyota manages the function of distributors and the number of employees counts Toyota on an unconsolidated basis.

For more details, please refer to the following web page. http://www.toyota-global.com/company/profile/overview/in_the_world/

April 2011 – March 2012

59

Data

CSR Achievement Data

Area Stable base of business

Items Employees

Smoking rate (unconsolidated) : “KPI Strategic Focus”

Items Safety

Unit

No. of 5-star models

FY2009

Japan

—

U.S.

—

Europe

Models

China U.S. IIHS Top Safety Pick models Quality Rewarded with the smiles of customers

No. of models that are ranked No. 1 in J.D. Power IQS (Initial Quality Study) Good Design Award Vehicle sales (worldwide, consolidated) Vehicle sales (Japan, consolidated) No. of Welcabs sold (Japan) Market share of Welcab (Japan) No. of Welcab models (Japan) No. of calls to customer call centers (Japan) Call response rate at customer call centers (Japan)

Enriching lives of communities

Contributing to the realization of a mobility society that links people with products and services

(cooperation with communities and infrastructure)

Initiatives for establishing a low-carbon society

Cumulative HV sales (worldwide)*1

CO2 emissions per unit produced (consolidated basis*2)

8

17 4

—

Prius

Passo, Etios

Ractis, Prius α, FJ Cruiser

Thousand vehicles

7,237

7,308

7,352

15,580

14,849

15,887

%

70.8

67.6

68.5

Models

30

28

30

Thousand calls

400

401

397

1,600

89.0 8,570 2,100

Male No. of new employees Male

26.9

35.9

33.6

31.8

69,961

69,178

68,961

62,928

62,109

61,543

7,033

7,069

7,418

37.6

37.8

38.1

38.5

38.6

38.9

30

30.6

31.5

16.6

16.8

17.0

17.4

17.5

17.8

9.7

10.3

10.5

1,150

1,040

1,103

1,036

909

999

114

131

104

Administrative

109

107

93

Male

85

74

69

Female

24

33

24

407

389

460

Male

394

362

443

Female

13

27

17

690

629

550

Male

610

553

487

Female

80

76

63

1,053

942

798

Persons

95.0

Shop floor

2,580

Index with 1997 = 1 base value

1.35

1.34

1.44

Ratio of employees who feel their own growth (unconsolidated)

70.0

70.6

72.6

Thousand vehicles

530

691

629

Ratio of employees who feel pride and loyalty (unconsolidated)*4

83.2

72.3

78.1

2,255

2,945

3,574

Ratio of employees who feel their jobs are rewarding (unconsolidated)*4

71.7

76.6

68.3

66.7

71.2

64.4

18,950.9

18,993.6

18,583.6

Japan

11,220.3

10,986.2

11,167.3

5,670.5

5,429.1

4,751.8

Million tons

14

19

26

7.08

7.18

7.22

Tons/vehicle

0.84

0.85

0.83

%

Ratio of employees satisfied with company life (unconsolidated)

*4

Financial information (Consolidated)

Net revenues

0.279

0.264

0.268

Thousand tons

43.4

39.4

36.0

Europe

2,147.0

1,981.4

1,993.9

kg/vehicle

16.5

15.8

14.1

Asia

2,655.4

3,374.6

3,334.2

26.9

Central and South America/Oceania/Africa

1,673.8

1,809.1

1,760.1

147.5 (0.8)

468.2 (2.5)

355.6 (1.9)

Toyota waste volume (volume per unit)

ASR

Vehicle recycling/recovery rate in Japan

Million m

3

28.1

3.6

3.7

3.5

81

85

93

94

94

94

%

97

97

99

6.7

4.5

4.0

%

93.3

95.1

95.5

29.3

27.8

27.0

%

U-LEVs produced that meet 2005 low emissions vehicle standards SU-LEVs produced that meet 2005 low emissions vehicle standards

27.3

VOC emissions/m2 in Toyota body painting processes (average for all production lines)

Operating income (Operating income ratio: %)

0

Total assets

Social contribution

Total expenses for social contribution activities (consolidated basis*2) Billion yen

12.1

13.9

14.4

Net assets

28,000

33,500

26,000

ROE

No. of visitors

Toyota Environmental Activities Grant Programs

No. of programs (cumulative)

No. of parts suppliers (worldwide total) No. of parts suppliers (overseas total)

Companies

No. of dealers (worldwide total excluding Japan) No. of countries sold to

8,131

8,247

8,485

Countries

170

173

176 5 54.0

Ratio of non-Japanese CEOs/COOs in major overseas subsidiaries

%

Female

29,818.1

30,650.9

10,930.4

10,920.0

11,066.4

%

2.1

3.9

2.7

Yen

45

50

50

579.0

642.3

706.7

725.3

730.3

779.8

6,809

7,169

7,435

15

15

15

11

11

11

8

8

8

25

24

23


7

7

8

North America

3

5

5

29

30

31

32

32

32

106

106

111

87

95

111

(14)

(82)

2,519

Dealerships

Persons

30,349.2

2,401

5

No. of employees using the flexible working hours system (unconsolidated) Male

10,550.2

2,375

52.1

Female

10,332.3

214 2,056

Male

283.5

10,359.7

193

1,056

Persons

160.1 408.1

175

1,022

No. of employees taking childcare leave (unconsolidated)

108.8

115.5 209.4

Capital expenditures

1,975

%

256.7

1,226

5

Employment ratio of people with disabilities (unconsolidated) Figures in brackets include Loops*3 Employment of people with disabilities (unconsolidated) Figures in brackets include Loops*3

313.0

10,447

1,029

%

203.6

1,054

49.7

Project manager or higher

17.7

Asia

11,926

%

Assistant manager or higher

13.1

1,546

Persons

Ratio of female managers (unconsolidated)

-33.0

11,420

Ratio of local employees comprising management at overseas affiliates

No. of foreign executives at Toyota Motor Corporation

186.4

Europe

Dividend per share

1,943

No. of non-Japanese parts suppliers

-207.0

339.5

Shareholders’ equity

0

No. of visitors to the Forest of Toyota

-362.4

85.4


0

No. of Why/What Lecture participants

-225.2

North America

Net income

No. of violations of environmental laws and regulations (unconsolidated) No. of violations No. of Toyota Community Concert participants

R&D expenses Vehicle production Global Expansion

No. of plants and Japan manufacturing North America companies Europe Asia and the Middle East No. of distributors

Europe

41

52

46

1.97

2.23

2.44

Asia and the Middle East

0.6

0.7

0.7


1.877

1.986 (2.067)

1.952 (2.045)

970

995 (1,039)

1,021 (1,075)

359

403

419

5

21

20

354

382

399

509

593

748

9

11

24

500

582

724

Billion yen

Japan

Environmental management

Employees

25.2

Female

Engineer

9,310

0.06

24.7

Million tons

Airbag

Mutually beneficial relationships with dealers/distributors and suppliers

Years

Female

2,071

Vehicles

82.9

Average service years

FY2011

0.09

Toyota CO2 emissions in logistics

Recycling/recovery rate


2

6

Water consumption per vehicle sold (vehicle assembly plants) m3/vehicle (consolidated basis*2)

60

2

Female

FY2010

0.10

Toyota waste volume Water consumption (vehicle assembly plants) (consolidated basis )

Stable base of business

2

1

Years old

FY2009

North America

*2

Initiatives for environmental protection and establishing a society in harmony with nature

1

1,913

Male

1

1

2,162

Female

No. of re-employed retirees

*1

Total CO2 emissions (from energy sources) (consolidated basis*2)

2

Persons

Average age

1

3

7,590

Global average fuel efficiency (Japan, US, Europe) Annual HV Sales (worldwide)

—

Male

FY2011

10

Thousand vehicles

No. of vehicles registered as G-BOOK users (Japan, cumulative)

FY2010

Models

%

No. of shipped vehicles fitted with VICS (cumulative)

No. of vehicles with units capable of providing and gathering traffic information

Cumulative CO2 reduction with HV (worldwide; number for FY2011 includes April 2012)

Initiatives for establishing a a recycling-based society

%

No. of full-time employees

Data List (fiscal year-end)

Always better cars

—

Excessive BMI rate (unconsolidated)

CSR activity results for the past three years are listed in the table below.

Area

Unit

Frequency rate of lost workday cases (unconsolidated)

*2 *3 *4

Billion yen Thousand units

Plants and manufacturing companies

Distributors

Governance

No. of consultations made to the Compliance Hotline (unconsolidated) Consultations

CSR evaluation

FTSE4Good Index (listed) Global 100 Most Sustainable Corporations in the World (listed)

*1

Billion yen

(ranking)

(21)

No. of hybrid vehicles sold is number of vehicles sold each year, not each fiscal year. Toyota and consolidated subsidiaries in Japan and overseas (consolidated base differs by item) No. of people with disabilities employed and their employment ratio are as of June each year. The employee satisfaction survey is conducted every second year on administrative/engineering and shop floor employees. Results for shop floor employees are from surveys conducted in 2009 and 2011, and those for administrative/engineering employees from the 2010 survey.

61

ISO26000 Comparison

Third-party Opinion Eiichiro Adachi

Toyota participated in the developing of international standards regarding CSR—ISO26000: Guidance on social responsibility—since its review stage as a member of the Japan committee representing the business sector. We organized specific actions described in the report according to seven core subjects stated in the standards and made the ISO26000 Comparison for your reference. We hope this will make the report more useful and easier for readers to understand. Toyota works continually to enhance its CSR initiatives. Thank you for your understanding.

Core Subjects and Issues in ISO26000 Organizational Governance 1

Organizational governance

Due diligence

3

Human rights risk situations

4

Avoidance of complicity

5

Resolving grievances

6

Discrimination and vulnerable groups

7

Civil and political rights

8

Economic, social and cultural rights

9

Fundamental principles and rights at work

Page 3, 5, 47

CSR POLICY: Contribution towards Sustainable Development

42, 44, 45

Employment and employment relationships

11

Conditions of work and social protection

12

Social dialogue

13

Health and safety at work

14

Human development and training in the workplace

Prevention of pollution

16

Sustainable resource use

17

Climate change mitigation and adaptation

18

Protection of the environment, biodiversity and restoration of natural habitats

Anti-corruption

20

Responsible political involvement

21

Fair competition

22

Promoting social responsibility in the value chain

23

Respect for property rights

54, 55

51

50, 51



Based on our philosophy of “Customer First,” we develop and provide innovative, safe and outstanding high quality products and services that meet a wide variety of customers’ demands to enrich the lives of people around the world. (Guiding Principles 3 and 4)

25, 27 29, 30



We will endeavor to protect the personal information of customers and everyone else we are engaged in business with, in accordance with the letter and spirit of each country's privacy laws. (Guiding Principles 1)

24, 28

Employees 

We respect our employees and believe that the success of our business is led by each individual’s creativity and good teamwork. We stimulate personal growth for our employees. (Guiding Principles 5)

14



We support equal employment opportunities, diversity and inclusion for our employees and do not discriminate against them. (Guiding Principles 5)

5, 6, 10



We strive to provide fair working conditions and to maintain a safe and healthy working environment for all our employees. (Guiding Principles 5)

11, 13



We respect and honor the human rights of people involved in our business and, in particular, do not use or tolerate any form of forced or child labor. (Guiding Principles 5)

3, 4, 9



Through communication and dialogue with our employees, we build and share the value “Mutual Trust and Mutual Responsibility” and work together for the success of our employees and the company. We recognize our employees' right to freely associate, or not to associate, in compliance with the laws of the countries in which we operate. (Guiding Principles 5)

5, 7 8, 12



Management of each company takes a leadership role in fostering a corporate culture and implementing policies, that promote ethical behavior. (Guiding Principles 1 and 5)

19, 20

51, 56 52 48, 49, 53

26–31

57

40, 41 42, 57

Consumer Issues 24

Fair marketing, factual and unbiased information and fair contractual practices

25

Protecting consumers’ health and safety

26

Sustainable consumption

27

Consumer service, support, and complaint and dispute resolution

28

Consumer data protection and privacy

29

Access to essential services

30

Education and awareness

40, 41 12, 13 14, 15

16, 17

Business Partners 

We respect our business partners such as suppliers and dealers and work with them through long-term relationships to realize mutual growth based on mutual trust. (Guiding Principles 7)

21



Whenever we seek a new business partner, we are open to any and all candidates, regardless of nationality or size, and evaluate them based on their overall strengths. (Guiding Principles 7)

37



We maintain fair and free competition in accordance with the letter and spirit of each country’s competition laws. (Guiding Principles 1 and 7)

21

Shareholders 

We strive to enhance corporate value while achieving a stable and long-term growth for the benefit of our shareholders. (Guiding Principles 6)

—



We provide our shareholders and investors with timely and fair disclosure of our operating results and financial condition. (Guiding Principles 1 and 6)

1

62

Community involvement

32

Environment 

We aim for growth that is in harmony with the environment by seeking to minimize the environmental impact of our business operations, such as by working to reduce the effect of our vehicles and operations on climate change and biodiversity. We strive to develop, establish and promote technologies enabling the environment and economy to coexist harmoniously, and to build close and cooperative relationships with a wide spectrum of individuals and organizations involved in environmental preservation. (Guiding Principles 3)

15, 16 17, 18

Community 

We implement our philosophy of “respect for people” by honoring the culture, customs, history and laws of each country. (Guiding Principles 2)

2, 7, 8



We constantly search for safer, cleaner and superior technology that satisfy the evolving needs of society for sustainable mobility. (Guiding Principles 3 and 4)

26, 34



We do not tolerate bribery of or by any business partner, government agency or public authority and maintain honest and fair relationships with government agencies and public authorities. (Guiding Principles 1)

19, 20

Wherever we do business, we actively promote and engage, both individually and with partners, in social contribution activities that help strengthen communities and contribute to the enrichment of society. (Guiding Principles 2)

31, 32 33, 35 36, 37

25, 36

Education and culture

33

Employment creation and skills development

34

Technology development and access

35

Wealth and income creation

36

Health

37

Social investment


34–39, 43 37, 38

10, 11 32, 33, 59

38 18–25

I have been granted the opportunity to read through Toyota Motor Corporation’s Sustainability Report for the second year in a row. The president’s message at the beginning says that, “I believe the new cars we launched in the fiscal year 2011 show the direction we are headed in.” I have similarly noticed a number of changes to the information disclosure in this report. The Toyota Global Vision formulated in March 2011 included the heading, “Rewarded with a smile by exceeding your expectations.” In my Third-party Opinion last year, I highlighted the fact that Toyota has declared reference points for its corporate conduct to include not just the law, its corporate philosophy, internal rules, and industry customs—but also, its stakeholders’ expectations. This time, as a reader of the new report, my greatest interest was to find out the extent to which this focus on stakeholders’ expectations has been put into practice. The first thing that stands out is the CSR Achievement Data on pages 60 to 61. In the report it is stated that, “Based on the “KPI Strategic Focus”—which were newly-established after a process extending over two years—our CSR activities have been further enhanced from FY2012.” I feel that Toyota’s bold decision to formulate and disclose these “KPI Strategic Focus” represents a breakthrough. I think there is room here to expand on that subject and I hope that, going forward, Toyota will continue to use the “KPI Strategic Focus” in its management. Next, the many specific matters raised in the sections titled “VOICE” from people within and outside Toyota have greatly changed my impressions. Also, I feel that the examples presented of initiatives taken overseas have increased dramatically. Furthermore, I have noticed a basic recognition of the need to raise awareness of the environment and to minimize the problems of traffic accidents and congestion, which are issues that are raised by stakeholders from time to time. In the future, I would like the specific examples featured in the VOICE

sections to include matters that may not necessarily be sweet music to the Toyota Group, together with the communication of measures to be introduced for dealing with them. Thirdly, I feel that there is also clearer transmission of information about the Toyota Group in this report, as seen in the article “The smart grid envisioned by Toyota!” Going forward, I would like Toyota to expand in a similar way regarding its messaging for “always better cars,” “safer vehicles” and “a rich life in an aging society.” Fourthly, I have noticed that the matter of “respect for human rights” has been dealt with as a separate issue. These days, while concern about human rights violations has become central within global policies, it is also a matter that should be considered among people affected by business activities, such as customers. As the Toyota Group's business has expanded to more than 150 countries with over 300,000 employees worldwide, in the future I would like to see further measures to protect human rights, based on the contents of the United Nations’ “Guiding Principles for Business and Human Rights.” In my Third-party Opinion in last year’s report, I proposed that there should be stronger messages and reporting on topics that form the core of the Toyota Group’s CSR and I have noticed the messages and feature articles contained in this report have succeeded in providing a greater variety of information disclosure. I think that changes in the information disclosure in this report show a trend towards greater depth in the discussion of global CSR, and are also consistent with the aims of Toyota’s new Global Vision. I am looking forward to reading a report next year that will also exceed expectations.

Response to the Third-party Opinion

Global Society/Local Communities

Community Involvement and Development 31

1 2 4 22 23 24

Customers

Fair Operating Practices 19

Adachi is responsible for providing financial institutions with corporate information for socially responsible investment (SRI). He specializes in industrial research and corporate assessment from the viewpoints of environmental management and CSR.

ISO26000 Ref. No.

57

The Environment 15

We, TOYOTA MOTOR CORPORATION and our subsidiaries, take initiative to contribute to harmonious and sustainable development of society and the earth through all business activities that we carry out in each country and region, based on our Guiding Principles. We comply with local, national and international laws and regulations as well as the spirit thereof and we conduct our business operations with honesty and integrity. In order to contribute to sustainable development, we believe that management interacting with its stakeholders as described below is of considerable importance, and we will endeavor to build and maintain sound relationships with our stakeholders through open and fair communication. We expect our business partners to support this initiative and act in accordance with it.

Currently the head of JRI’s ESG Research Center, he previously served in the Corporate Strategy Research Department and Technology Research Department in JRI.

From March 2005 until May 2009, he was one of the experts in the Japanese delegation to the ISO/Social Responsibility Standards (ISO26000) Working Group.

Preamble 

Labor Practices 10

Biography

CSR POLICY Comparison

Human Rights 2

Counselor, The Japan Research Institute (JRI)

Social  contribution

Riki Inuzuka Managing Officer General Manager Corporate Planning Div.

Thank you very much for your valuable opinion on the report. The composition of this year’s report has been rearranged to reflect the three elements of the Toyota Global Vision. The report includes Toyota’s concepts of these elements and the special features and initiatives which show them in concrete form. The contents also reflect Toyota’s consciousness of the impact that we have on the society around us. Next year, with your opinion as a reference, and after gaining further understanding of our stakeholders’ expectations, we would like to expand the reporting in relation to KPI Strategic Focus management and communication within and outside the company. In addition, we will push ahead with our management based on the Toyota Global Vision, with the aim of becoming a company that exceeds expectations from society.

63