20-F

As filed with the U.S. Securities and Exchange Commission on June 24, 2020

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: March 31, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-14948

TOYOTA JIDOSHA KABUSHIKI KAISHA

(Exact name of registrant as specified in its charter)

TOYOTA MOTOR CORPORATION

(Translation of registrant’s name into English)

Japan

(Jurisdiction of incorporation or organization)

1 Toyota-cho, Toyota City

Aichi Prefecture 471-8571

Japan

+81 565 28-2121

(Address of principal executive offices)

Nobukazu Takano

Telephone number: +81 565 28-2121

Facsimile number: +81 565 23-5800

Address: 1 Toyota-cho, Toyota City, Aichi Prefecture 471-8571, Japan

(Name, telephone, e-mail and/or facsimile number and address of registrant’s contact person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
American Depositary Shares*	TM	The New York Stock Exchange
Common Stock**

* American Depositary Receipts evidence American Depositary Shares, each American Depositary Share representing two shares of the registrant’s Common Stock.

** No par value. Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the U.S. Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 2,766,152,532 shares of common stock (including 43,321,651 shares of common stock in the form of American Depositary Shares) and 47,099,900 First Series Model AA class shares as of March 31, 2020

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act: Yes  ☒    No  ☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934: Yes  ☐    No  ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files): Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ☒	Accelerated filer  ☐	Non-accelerated filer  ☐
		Emerging growth company  ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange
 Act: ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☒

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP  ☒             International Financial Reporting Standards as issued by the International Accounting Standards Board  ☐            Other  ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to
 follow: Item  17  ☐    Item  18  ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):Yes  ☐    No  ☒

TABLE OF CONTENTS

ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	1
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	1
ITEM 3.	KEY INFORMATION	1
3.A	SELECTED FINANCIAL DATA	1
3.B	CAPITALIZATION AND INDEBTEDNESS	4
3.C	REASONS FOR THE OFFER AND USE OF PROCEEDS	4
3.D	RISK FACTORS	4
ITEM 4.	INFORMATION ON THE COMPANY	8
4.A	HISTORY AND DEVELOPMENT OF THE COMPANY	8
4.B	BUSINESS OVERVIEW	8
4.C	ORGANIZATIONAL STRUCTURE	50
4.D	PROPERTY, PLANTS AND EQUIPMENT	51
ITEM 4A.	UNRESOLVED STAFF COMMENTS	52
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	52
5.A	OPERATING RESULTS	52
5.B	LIQUIDITY AND CAPITAL RESOURCES	83
5.C	RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES	85
5.D	TREND INFORMATION	88
5.E	OFF-BALANCE SHEET ARRANGEMENTS	88
5.F	TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS	89
5.G	SAFE HARBOR	90
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	90
6.A	DIRECTORS AND SENIOR MANAGEMENT	90
6.B	COMPENSATION	97
6.C	BOARD PRACTICES	100
6.D	EMPLOYEES	102
6.E	SHARE OWNERSHIP	102
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	103
7.A	MAJOR SHAREHOLDERS	103
7.B	RELATED PARTY TRANSACTIONS	104
7.C	INTERESTS OF EXPERTS AND COUNSEL	105
ITEM 8.	FINANCIAL INFORMATION	105
8.A	CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION	105
8.B	SIGNIFICANT CHANGES	105
ITEM 9.	THE OFFER AND LISTING	105
9.A	LISTING DETAILS	105
9.B	PLAN OF DISTRIBUTION	105
9.C	MARKETS	106
9.D	SELLING SHAREHOLDERS	106
9.E	DILUTION	106
9.F	EXPENSES OF THE ISSUE	106
ITEM 10.	ADDITIONAL INFORMATION	106
10.A	SHARE CAPITAL	106
10.B	MEMORANDUM AND ARTICLES OF ASSOCIATION	106
10.C	MATERIAL CONTRACTS	114
10.D	EXCHANGE CONTROLS	114

10.E	TAXATION	118
10.F	DIVIDENDS AND PAYING AGENTS	124
10.G	STATEMENT BY EXPERTS	124
10.H	DOCUMENTS ON DISPLAY	125
10.I	SUBSIDIARY INFORMATION	125
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	125
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	126
12.A	DEBT SECURITIES	126
12.B	WARRANTS AND RIGHTS	126
12.C	OTHER SECURITIES	126
12.D	AMERICAN DEPOSITARY SHARES	127
ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	128
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	128
ITEM 15.	CONTROLS AND PROCEDURES	128
ITEM 16.	[RESERVED]	129
ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT	129
ITEM 16B.	CODE OF ETHICS	129
ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	130
ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	131
ITEM 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	131
ITEM 16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	132
ITEM 16G.	CORPORATE GOVERNANCE	132
ITEM 16H.	MINE SAFETY DISCLOSURE	135
ITEM 17.	FINANCIAL STATEMENTS	136
ITEM 18.	FINANCIAL STATEMENTS	136
ITEM 19.	EXHIBITS	137

As used in this annual report, the term “fiscal” preceding a year means the twelve-month period ended March 31 of the year referred to. All other references to years refer to the applicable calendar year, unless the context otherwise requires. As used herein, the term “Toyota” refers to Toyota Motor Corporation and its consolidated subsidiaries as a group, unless the context otherwise indicates.

CAUTIONARY STATEMENT WITH RESPECT TO FORWARD-LOOKING STATEMENTS

Written forward-looking statements may appear in documents filed with the U.S. Securities and Exchange Commission, or the SEC, including this annual report, documents incorporated by reference, reports to shareholders and other communications.

The U.S. Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking information to encourage companies to provide prospective information about themselves without fear of litigation so long as the information is identified as forward looking and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in the information. Toyota relies on this safe harbor in making forward-looking statements.

Forward-looking statements appear in a number of places in this annual report and include statements regarding Toyota’s current intent, belief, targets or expectations or those of its management. In many, but not all cases, words such as “aim,” “anticipate,” “believe,” “estimate,” “expect,” “hope,” “intend,” “may,” “plan,” “predict,” “probability,” “risk,” “should,” “will,” “would,” and similar expressions, are used as they relate to Toyota or its management, to identify forward-looking statements. These statements reflect Toyota’s current views with respect to future events and are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may vary materially from those which are anticipated, aimed at, believed, estimated, expected, intended or planned.

Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ from those in forward-looking statements as a result of various factors. Important factors that could cause actual results to differ materially from estimates or forecasts contained in the forward-looking statements are identified in “Risk Factors” and elsewhere in this annual report, and include, among others:

(i) changes in economic conditions, market demand, and the competitive environment affecting the automotive markets in Japan, North America, Europe, Asia and other markets in which Toyota operates;

(ii) fluctuations in currency exchange rates (particularly with respect to the value of the Japanese yen, the U.S. dollar, the euro, the Australian dollar, the Russian ruble, the Canadian dollar and the British pound), stock prices and interest rates fluctuations;

(iii) changes in funding environment in financial markets and increased competition in the financial services industry;

(iv) Toyota’s ability to market and distribute effectively;

(v) Toyota’s ability to realize production efficiencies and to implement capital expenditures at the levels and times planned by management;

(vi) changes in the laws, regulations and government policies in the markets in which Toyota operates that affect Toyota’s automotive operations, particularly laws, regulations and government policies relating to vehicle safety including remedial measures such as recalls, trade, environmental protection, vehicle emissions and vehicle fuel economy, as well as changes in laws, regulations and government policies that affect Toyota’s other operations, including the outcome of current and future litigation and other legal proceedings, government proceedings and investigations;

(vii) political and economic instability in the markets in which Toyota operates;

(viii) Toyota’s ability to timely develop and achieve market acceptance of new products that meet customer demand;

(ix) any damage to Toyota’s brand image;

(x) Toyota’s reliance on various suppliers for the provision of supplies;

(xi) increases in prices of raw materials;

(xii) Toyota’s reliance on various digital and information technologies;

(xiii) fuel shortages or interruptions in electricity, transportation systems, labor strikes, work stoppages or other interruptions to, or difficulties in, the employment of labor in the major markets where Toyota purchases materials, components and supplies for the production of its products or where its products are produced, distributed or sold; and

(xiv) the impact of natural calamities as well as the outbreak and spread of epidemics, including the negative effect on Toyota’s vehicle production and sales.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

I TEM 3. KEY INFORMATION

3.A SELECTED FINANCIAL DATA

You should read the U.S. GAAP selected consolidated financial information presented below together with “Operating and Financial Review and Prospects” and Toyota’s consolidated financial statements contained in this annual report.

U.S. GAAP Selected Financial Data

The following selected financial data have been derived from Toyota’s consolidated financial statements. These financial statements were prepared in accordance with U.S. GAAP.

	Year Ended March 31,
	2016			2017			2018			2019			2020
	(Yen in millions, except share and per share data)
Consolidated Statement of Income Data:
Automotive:
Revenues	¥	25,977,416		¥	25,081,847		¥	26,397,940		¥	27,079,077		¥	26,863,514
Operating income		2,448,998			1,692,973			2,011,135			2,038,884			2,052,346
Financial Services:
Revenues		1,896,224			1,823,600			2,017,008			2,153,547			2,190,559
Operating income		339,226			222,428			285,546			322,821			292,183
All Other:
Revenues		1,177,387			1,321,052			1,646,118			1,676,377			1,504,550
Operating income		66,507			81,327			100,812			105,538			96,655
Elimination of intersegment:
Revenues		(647,909	)		(629,306	)		(681,556	)		(683,320	)		(628,631	)
Operating income		(760	)		(2,356	)		2,369			302			1,685
Total Company:
Revenues		28,403,118			27,597,193			29,379,510			30,225,681			29,929,992
Operating income		2,853,971			1,994,372			2,399,862			2,467,545			2,442,869
Income before income taxes and equity in earnings of affiliated companies		2,983,381			2,193,825			2,620,429			2,285,465			2,554,607
Net income attributable to Toyota Motor Corporation		2,312,694			1,831,109			2,493,983			1,882,873			2,076,183
Net income attributable to Toyota Motor Corporation per common share (yen):
Basic		741.36			605.47			842.00			650.55			735.61
Diluted		735.36			599.22			832.78			645.11			729.50
Shares used in computing net income attributable to Toyota Motor Corporation per common share, basic (in thousands)		3,111,306			3,008,088			2,947,365			2,871,534			2,798,918
Shares used in computing net income attributable to Toyota Motor Corporation per common share, diluted (in thousands)		3,144,947			3,055,826			2,994,766			2,918,674			2,846,018

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	Year Ended March 31,
	2016		2017		2018		2019		2020
	(Yen in millions, except per share and numbers of vehicles sold data)
Consolidated Balance Sheet Data (end of period):
Total Assets:		47,427,597		48,750,186		50,308,249		51,936,949		52,680,436
Short-term debt, including current portion of long-term debt		8,521,088		9,244,131		9,341,190		9,599,233		9,860,071
Long-term debt, less current portion		9,772,065		9,911,596		10,006,374		10,550,945		10,692,898
Toyota Motor Corporation shareholders’ equity		16,746,935		17,514,812		18,735,982		19,348,152		20,060,618
Common stock		397,050		397,050		397,050		397,050		397,050
Other Data:
Dividends per share (yen)	¥	210.0	¥	210.0	¥	220.0	¥	220.0	¥	220.0
Number of vehicles sold
Japan		2,059,093		2,273,962		2,255,313		2,226,177		2,239,549
North America		2,839,229		2,837,334		2,806,467		2,745,047		2,713,165
Europe		844,412		924,560		968,077		994,060		1,028,537
Asia		1,344,836		1,587,822		1,542,806		1,684,494		1,604,870
Other*		1,593,758		1,347,182		1,391,731		1,327,017		1,372,302
Worldwide total		8,681,328		8,970,860		8,964,394		8,976,795		8,958,423

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

Dividend Information

Toyota normally pays dividends twice per year, including an interim dividend and a year-end dividend. Toyota’s articles of incorporation provide that retained earnings can be distributed as dividends pursuant to a resolution of its board of directors. Toyota’s board of directors resolves to pay year-end dividends to holders of common shares and registered pledgees of common shares of record as of March 31, the record date, in each year.

At the 111th Ordinary General Shareholders’ Meeting held in June 2015, Toyota’s shareholders approved amendments to Toyota’s articles of incorporation permitting the issuance of Model AA Class Shares in the future. The articles of incorporation currently provide that in the event that Toyota pays a year-end dividend to holders of common shares, it will pay a year-end dividend to any holders of Model AA Class Shares or registered pledgees of Model AA Class Shares of record as of the record date for the year-end dividend, in the amount payable on the Model AA Class Shares pursuant to their terms (“AA Dividends”), in preference to holders of common shares or registered pledgees of common shares.

In addition to these year-end dividends, Toyota may pay an interim dividend in the form of cash distributions from its distributable surplus to holders of common shares and pledgees of common shares of record as of September 30, the record date, in each year by a resolution of its board of directors. The articles of incorporation currently provide that in the event that Toyota pays such interim dividends, Toyota will pay an amount equivalent to one-half of the AA Dividends (“AA Interim Dividends”) as an interim dividend to any holders of Model AA Class Shares or registered pledgees of Model AA Class Shares of record as of the record date for the interim dividend, in preference to holders of common shares or registered pledgees of common shares.

If the amount of the dividends from surplus paid to holders of Model AA Class Shares or registered pledgees of Model AA Class Shares is less than the prescribed amount of AA Dividends in any fiscal year, the amount of the shortfall will be carried forward to and accumulate in the following fiscal year and thereafter. Dividends from surplus will be paid to holders of Model AA Class Shares or registered pledgees of Model AA Class Shares in preference to the payment of interim and year-end dividends until such payment reaches the amount of the accumulated unpaid dividends on the Model AA Class Shares.

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For a further discussion of Model AA Class Shares, please see “Additional Information — Memorandum and Articles of Association.”

In addition, under the Companies Act of Japan (the “Companies Act”), dividends may be paid to holders of common shares and pledgees of record of common shares as of any record date, other than those specified above, as set forth in Toyota’s articles of incorporation or as determined by its board of directors from time to time. Under the Companies Act, dividends may be distributed in cash or (except in the case of interim dividends mentioned in the third preceding paragraph) in kind, subject to limitations on distributable surplus and to certain other conditions.

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

	Cash Dividends per Common Share
Period Ended	Yen		U.S. dollars
September 30, 2014		75.0		0.68
March 31, 2015		125.0		1.04
September 30, 2015		100.0		0.83
March 31, 2016		110.0		0.97
September 30, 2016		100.0		0.98
March 31, 2017		110.0		0.98
September 30, 2017		100.0		0.88
March 31, 2018		120.0		1.12
September 30, 2018		100.0		0.88
March 31, 2019		120.0		1.08
September 30, 2019		100.0		0.92
March 31, 2020		120.0		1.10

Toyota deems the benefit of its shareholders as one of its priority management policies, and it continues to work to improve its corporate structure to realize sustainable growth in order to enhance its corporate value. Toyota will strive to continue to pay stable dividends on its common shares aiming at a consolidated dividend payout ratio, defined as dividends per common share divided by net income attributable to Toyota Motor Corporation per common share, of 30%. Toyota will pay dividends on the First Series Model AA Class Shares in accordance with a prescribed calculation method.

In order to successfully compete in this highly competitive industry, Toyota plans to utilize its internal funds for the early commercialization of technologies for next-generation environment and safety giving priority to customer safety and sense of security. Considering these factors, with respect to the dividends for fiscal 2020, Toyota has determined to pay a year-end dividend of 120 yen per common share by a resolution of the board of directors pursuant to Toyota’s articles of incorporation. As a result, combined with the interim dividend of 100 yen per common share, the annual dividend will be 220 yen per common share, and the total amount of the dividends on common shares for the year will be 610.8 billion yen. Furthermore, Toyota will flexibly repurchase shares with the aim to promote capital efficiency by comprehensively taking into consideration cash reserves, stock price levels and the like.

In fiscal 2020, Toyota repurchased 26 million common shares, for an aggregate purchase price of 199.9 billion yen, in order to return to shareholders the profits derived from Toyota’s business operations in the interim period.

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3.B CAPITALIZATION AND INDEBTEDNESS

Not applicable.

3.C REASONS FOR THE OFFER AND USE OF PROCEEDS

Not applicable.

3.D RISK FACTORS

Industry and Business Risks

The worldwide automotive market is highly competitive.

The worldwide automotive market is highly competitive. Toyota faces intense competition from automotive manufacturers in the markets in which it operates. Competition in the automotive industry has further intensified amidst difficult overall market conditions. In addition, competition is likely to further intensify in light of further continuing globalization in the worldwide automotive industry, possibly resulting in industry reorganizations. Factors affecting competition include product quality and features, safety, reliability, fuel economy, the amount of time required for innovation and development, pricing, customer service and financing terms. Increased competition may lead to lower vehicle unit sales, which may result in a further downward price pressure and adversely affect Toyota’s financial condition and results of operations. Toyota’s ability to adequately respond to the recent rapid changes in the automotive market and to maintain its competitiveness will be fundamental to its future success in existing and new markets and to maintain its market share. There can be no assurances that Toyota will be able to compete successfully in the future.

The worldwide automotive industry is highly volatile.

Each of the markets in which Toyota competes has been subject to considerable volatility in demand. Demand for vehicles depends to a large extent on economic, social and political conditions in a given market and the introduction of new vehicles and technologies. As Toyota’s revenues are derived from sales in markets worldwide, economic conditions in such markets are particularly important to Toyota.

Reviewing the general economic environment for the fiscal year ended March 2020, the economy changed from a trend of moderate expansion to a sharp slowdown due to the effects of trade frictions and the impact of COVID-19 spreading from China to North America, Europe and the rest of Asia. Automotive markets slumped in China and some emerging countries, but remained stable in developed countries and declined only slightly in the world as a whole. However, COVID-19 has begun to have a major impact, leading to the suspension of operations at factories and the suspension of business at dealers worldwide.

The changes in demand for automobiles are continuing, and it is unclear how this situation will transition in the future. Toyota’s financial condition and results of operations may be adversely affected if the changes in demand for automobiles continues or progresses further. Demand may also be affected by factors directly impacting vehicle price or the cost of purchasing and operating vehicles such as sales and financing incentives, prices of raw materials and parts and components, cost of fuel and governmental regulations (including tariffs, import regulation and other taxes). Volatility in demand may lead to lower vehicle unit sales, which may result in downward price pressure and adversely affect Toyota’s financial condition and results of operations.

Toyota’s future success depends on its ability to offer new, innovative and competitively priced products that meet customer demand on a timely basis.

Meeting customer demand by introducing attractive new vehicles and reducing the amount of time required for product development are critical to automotive manufacturers. In particular, it is critical to meet customer

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demand with respect to quality, safety and reliability. The timely introduction of new vehicle models, at competitive prices, meeting rapidly changing customer preferences and demand is more fundamental to Toyota’s success than ever, as the automotive market is rapidly transforming in light of the changing global economy. There is no assurance, however, that Toyota will adequately and appropriately respond to changing customer preferences and demand with respect to quality, safety, reliability, styling and other features in a timely manner. Even if Toyota succeeds in perceiving customer preferences and demand, there is no assurance that Toyota will be capable of developing and manufacturing new, price competitive products in a timely manner with its available technology, intellectual property, sources of raw materials and parts and components, and production capacity, including cost reduction capacity. Further, there is no assurance that Toyota will be able to implement capital expenditures at the level and times planned by management. Toyota’s inability to develop and offer products that meet customers’ preferences and demand with respect to quality, safety, reliability, styling and other features in a timely manner could result in a lower market share and reduced sales volumes and margins, and may adversely affect Toyota’s financial condition and results of operations.

Toyota’s ability to market and distribute effectively is an integral part of Toyota’s successful sales.

Toyota’s success in the sale of vehicles depends on its ability to market and distribute effectively based on distribution networks and sales techniques tailored to the needs of its customers. There is no assurance that Toyota will be able to develop sales techniques and distribution networks that effectively adapt to changing customer preferences or changes in the regulatory environment in the major markets in which it operates. Toyota’s inability to maintain well-developed sales techniques and distribution networks may result in decreased sales and market share and may adversely affect its financial condition and results of operations.

Toyota’s success is significantly impacted by its ability to maintain and develop its brand image.

In the highly competitive automotive industry, it is critical to maintain and develop a brand image. In order to maintain and develop a brand image, it is necessary to further increase customers’ confidence by providing safe, high-quality products that meet customer preferences and demand. If Toyota is unable to effectively maintain and develop its brand image as a result of its inability to provide safe, high-quality products or as a result of the failure to promptly implement safety measures such as recalls when necessary, vehicle unit sales and/or sale prices may decrease, and as a result revenues and profits may not increase as expected or may decrease, adversely affecting its financial condition and results of operations.

Toyota relies on suppliers for the provision of certain supplies including parts, components and raw materials

Toyota purchases supplies including parts, components and raw materials from a number of external suppliers located around the world. For some supplies, Toyota relies on a single supplier or a limited number of suppliers, whose replacement with another supplier may be difficult. Inability to obtain supplies from a single or limited source supplier may result in difficulty obtaining supplies and may restrict Toyota’s ability to produce vehicles. Furthermore, even if Toyota were to rely on a large number of suppliers, first-tier suppliers with whom Toyota directly transacts may in turn rely on a single second-tier supplier or limited second-tier suppliers. Toyota’s ability to continue to obtain supplies from its suppliers in a timely and cost-effective manner is subject to a number of factors, some of which are not within Toyota’s control. These factors include the ability of Toyota’s suppliers to provide a continued source of supply, and Toyota’s ability to effectively compete and obtain competitive prices from suppliers. A loss of any single or limited source supplier or inability to obtain supplies from suppliers in a timely and cost-effective manner could lead to increased costs or delays or suspensions in Toyota’s production and deliveries, which could have an adverse effect on Toyota’s financial condition and results of operations.

The worldwide financial services industry is highly competitive.

The worldwide financial services industry is highly competitive. Increased competition in automobile financing may lead to decreased margins. A decline in Toyota’s vehicle unit sales, an increase in residual value

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risk due to lower used vehicle prices, an increase in the ratio of credit losses and increased funding costs are additional factors which may impact Toyota’s financial services operations. If Toyota is unable to adequately respond to the changes and competition in automobile financing, Toyota’s financial services operations may adversely affect its financial condition and results of operations.

Toyota’s operations and vehicles rely on various digital and information technologies.

Toyota depends on various information technology networks and systems, some of which are managed by third parties, to process, transmit and store electronic information, including sensitive data, and to manage or support a variety of business processes and activities, including manufacturing, research and development, supply chain management, sales and accounting. In addition, Toyota’s vehicles may rely on various digital and information technologies, including information service and driving assistance functions. Despite security measures, Toyota’s digital and information technology networks and systems may be vulnerable to damage, disruptions, shutdowns due to unauthorized access or attacks by hackers, computer viruses, breaches due to unauthorized use, errors or malfeasance by employees and others who have or gain access to the networks and systems Toyota depends on, service failures or bankruptcy of third parties such as software development or cloud computing vendors, power shortages and outages, and utility failures or other catastrophic events like natural disasters. In particular, cyber-attacks or other intentional malfeasance are increasing in terms of intensity, sophistication and frequency, and Toyota may be the subject of such attacks. Such attacks could materially disrupt critical operations, disclose sensitive data, interfere with information services and driving assistance functions in Toyota’s vehicles, and/or give rise to legal claims or proceedings, liability or regulatory penalties under applicable laws, which could have an adverse effect on Toyota’s brand image and its financial condition and results of operations.

Financial Market and Economic Risks

Toyota’s operations are subject to currency and interest rate fluctuations.

Toyota is sensitive to fluctuations in foreign currency exchange rates and is principally exposed to fluctuations in the value of the Japanese yen, the U.S. dollar and the euro and, to a lesser extent, the Australian dollar, the Russian ruble, the Canadian dollar and the British pound. Toyota’s consolidated financial statements, which are presented in Japanese yen, are affected by foreign currency exchange fluctuations through translation risk, and changes in foreign currency exchange rates may also affect the price of products sold and materials purchased by Toyota in foreign currencies through transaction risk. In particular, strengthening of the Japanese yen against the U.S. dollar can have an adverse effect on Toyota’s operating results.

Toyota believes that its use of certain derivative financial instruments including foreign exchange forward contracts and interest rate swaps and increased localized production of its products have reduced, but not eliminated, the effects of interest rate and foreign currency exchange rate fluctuations. Nonetheless, a negative impact resulting from fluctuations in foreign currency exchange rates and changes in interest rates may adversely affect Toyota’s financial condition and results of operations. For a further discussion of currency and interest rate fluctuations and the use of derivative financial instruments, see “Operating and Financial Review and Prospects — Operating Results — Overview — Currency Fluctuations,” “Quantitative and Qualitative Disclosures About Market Risk,” and notes 21 and 22 to Toyota’s consolidated financial statements.

High prices of raw materials and strong pressure on Toyota’s suppliers could negatively impact Toyota’s profitability.

Increases in prices for raw materials that Toyota and Toyota’s suppliers use in manufacturing their products or parts and components such as steel, precious metals, non-ferrous alloys including aluminum, and plastic parts, may lead to higher production costs for parts and components. This could, in turn, negatively impact Toyota’s future profitability because Toyota may not be able to pass all those costs on to its customers or require its suppliers to absorb such costs.

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A downturn in the financial markets could adversely affect Toyota’s ability to raise capital.

Should the world economy suddenly deteriorate, a number of financial institutions and investors will face difficulties in providing capital to the financial markets at levels corresponding to their own financial capacity, and, as a result, there is a risk that companies may not be able to raise capital under terms that they would expect to receive with their creditworthiness. If Toyota is unable to raise the necessary capital under appropriate conditions on a timely basis, Toyota’s financial condition and results of operations may be adversely affected.

Regulatory, Legal, Political and Other Risks

The automotive industry is subject to various governmental regulations and actions.

The worldwide automotive industry is subject to various laws and governmental regulations including those related to vehicle safety and environmental matters such as emission levels, fuel economy, noise and pollution. In particular, automotive manufacturers such as Toyota are required to implement safety measures such as recalls for vehicles that do not or may not comply with the safety standards of laws and governmental regulations. In addition, Toyota may, in order to reassure its customers of the safety of Toyota’s vehicles, decide to voluntarily implement recalls or other safety measures even if the vehicle complies with the safety standards of relevant laws and governmental regulations. If Toyota launches products that result in safety measures such as recalls (including where parts related to recalls or other measures were procured by Toyota from a third party), Toyota may incur various costs including significant costs for free repairs. Many governments also impose tariffs and other trade barriers, taxes and levies, or enact price or exchange controls. Toyota has incurred significant costs in response to governmental regulations and actions, including costs relating to changes in global trade dynamics and policies, and expects to incur such costs in the future. Furthermore, new legislation or regulations or changes in existing legislation or regulations may also subject Toyota to additional costs in the future. If Toyota incurs significant costs related to implementing safety measures or responding to laws, regulations and governmental actions, Toyota’s financial condition and results of operations may be adversely affected.

Toyota may become subject to various legal proceedings.

As an automotive manufacturer, Toyota may become subject to legal proceedings in respect of various issues, including product liability and infringement of intellectual property. Toyota may also be subject to legal proceedings brought by its shareholders and governmental proceedings and investigations. Toyota is in fact currently subject to a number of pending legal proceedings and government investigations. A negative outcome in one or more of these pending legal proceedings could adversely affect Toyota’s financial condition and results of operations. For a further discussion of governmental regulations, see “Information on the Company — Business Overview — Governmental Regulation, Environmental and Safety Standards” and for legal proceedings, please see “Information on the Company — Business Overview — Legal Proceedings.”

Toyota may be adversely affected by natural calamities, epidemics, political and economic instability, fuel shortages or interruptions in social infrastructure, wars, terrorism and labor strikes.

Toyota is subject to various risks associated with conducting business worldwide. These risks include natural calamities; epidemics; political and economic instability; fuel shortages; interruption in social infrastructure including energy supply, transportation systems, gas, water, or communication systems resulting from natural hazards or technological hazards; wars; terrorism; labor strikes and work stoppages. Should the major markets in which Toyota purchases materials, parts and components and supplies for the manufacture of Toyota products or in which Toyota’s products are produced, distributed or sold be affected by any of these events, it may result in disruptions and delays in the operations of Toyota’s business. Should significant or prolonged disruptions or delays related to Toyota’s business operations occur, it may adversely affect Toyota’s financial condition and results of operations.

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Toyota has been, and is expected to continue to be, adversely affected by the spread of COVID-19.

The global spread of COVID-19 and the responses to it by governments and other stakeholders have adversely affected Toyota in a number of ways. For example, for reasons such as government directives as well as anticipated reduced demand for its vehicles, Toyota has temporarily suspended, or intends to temporarily suspend, production of automobiles and components at selected plants in a number of countries and jurisdictions. COVID-19 has also affected, and is expected to continue to affect, the businesses of Toyota dealers and distributors, as well as certain of Toyota’s third-party suppliers and business partners. In addition, the global spread of COVID-19 and related matters have adversely affected businesses in a wide variety of industries, as well as consumers, all of which negatively impacted demand for Toyota’s vehicles and related financial services.

The aforementioned factors adversely affected Toyota’s net revenues and operating income for the fourth quarter of the fiscal year ended March 31, 2020, in particular through reducing Toyota’s vehicle sales and through increases in provisions relating to credit losses and residual value losses. See “Operating and Financial Review and Prospects — Operating Results — Results of Operations — Fiscal 2020 Compared with Fiscal 2019.” Such factors are expected to adversely affect results for the fiscal year ending March 31, 2021 as well.

The duration of the COVID-19 outbreak and the resulting future effects are uncertain, and the foregoing impacts and other effects not referenced above, as well as the ultimate impact of the COVID-19 outbreak, are difficult to predict. The impact of the COVID-19 outbreak and the resulting future effects may thus adversely affect Toyota’s financial condition and results of operations in later periods as well.

ITEM 4. INFORMATION ON THE COMPANY

4.A HISTORY AND DEVELOPMENT OF THE COMPANY

Toyota Motor Corporation is a limited liability, joint-stock company incorporated under the Commercial Code of Japan and continues to exist under the Companies Act. Toyota commenced operations in 1933 as the automobile division of Toyota Industries Corporation (formerly, Toyoda Automatic Loom Works, Ltd.). Toyota became a separate company in August 1937. In 1982, the Toyota Motor Company and Toyota Motor Sales merged into one company, the Toyota Motor Corporation of today. As of March 31, 2020, Toyota operated through 528 consolidated subsidiaries (including variable interest entities) and 201 affiliated companies, of which 72 companies were accounted for through the equity method.

See “— Business Overview — Capital Expenditures and Divestitures” for a description of Toyota’s principal capital expenditures and divestitures between April 1, 2017 and March 31, 2020 and information concerning Toyota’s principal capital expenditures and divestitures currently in progress.

Toyota’s principal executive offices are located at 1 Toyota-cho, Toyota City, Aichi Prefecture 471-8571, Japan. Toyota’s telephone number in Japan is +81-565-28-2121.

The SEC maintains a website (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Toyota also maintains a website (https://global.toyota/en/) through which its annual reports on Form 20-F and certain of its other SEC filings may be accessed. Information contained on or accessible through Toyota’s website is not part of this annual report on Form 20-F.

4.B BUSINESS OVERVIEW

Toyota primarily conducts business in the automotive industry. Toyota also conducts business in finance and other industries. Toyota sold 8,958 thousand vehicles in fiscal 2020 on a consolidated basis. Toyota had net revenues of ¥29,929.9 billion and net income attributable to Toyota Motor Corporation of ¥2,076.1 billion in fiscal 2020.

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Toyota’s business segments are automotive operations, financial services operations and all other operations. The following table sets forth Toyota’s sales to external customers in each of its business segments for each of the past three fiscal years.

	Yen in millions
	Year Ended March 31,
	2018		2019		2020
Automotive		26,347,229		27,034,492		26,834,485
Financial Services		1,959,234		2,120,343		2,170,243
All Other		1,073,047		1,070,846		925,264

Toyota’s automotive operations include the design, manufacture, assembly and sale of passenger vehicles, minivans and commercial vehicles such as trucks and related parts and accessories. Toyota’s financial services business consists primarily of providing financing to dealers and their customers for the purchase or lease of Toyota vehicles. Toyota’s financial services business also provides mainly retail installment credit and leasing through the purchase of installment and lease contracts originated by Toyota dealers. Related to Toyota’s automotive operations, Toyota is working towards having all of its vehicles become connected vehicles, creating new value and reforming businesses by utilizing big data obtained from those connected vehicles, and establishing new mobility services. Toyota’s all other operations business segment includes the design and manufacture of prefabricated housing and information technology related businesses including a web portal for automobile information called GAZOO.com, etc. Please see “— Automotive Operations — Realizing a Smart Mobility Society that expands through connected car technologies — Connected with people (COMFORT) — Connected Service” for details on GAZOO.com.

Toyota sells its vehicles in approximately 200 countries and regions. Toyota’s primary markets for its automobiles are Japan, North America, Europe and Asia. The following table sets forth Toyota’s sales to external customers in each of its geographical markets for each of the past three fiscal years.

	Yen in millions
	Year Ended March 31,
	2018		2019		2020
Japan		9,273,672		9,520,148		9,522,905
North America		10,347,266		10,585,934		10,416,582
Europe		2,940,243		3,055,654		3,138,755
Asia		4,497,374		4,832,392		4,828,635
Other*		2,320,955		2,231,553		2,023,115

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

During fiscal 2020, 25.0% of Toyota’s automobile unit sales on a consolidated basis were in Japan, 30.3% were in North America, 11.5% were in Europe and 17.9% were in Asia. The remaining 15.3% of consolidated unit sales were in other markets.

The Worldwide Automotive Market

Toyota estimates that annual worldwide vehicle sales totaled approximately 92 million units in 2019.

Automobile sales are affected by a number of factors including:

• social, political and economic conditions;

• introduction of new vehicles and technologies; and

• costs incurred by customers to purchase and operate automobiles.

These factors can cause consumer demand to vary substantially from year to year in different geographic markets and in individual categories of automobiles.

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In fiscal 2020, the world economy experienced a significant slowdown through December 2019 due to U.S.-China trade frictions and the weak Chinese economy, mainly in the manufacturing sector. Since January 2020, the outbreak of COVID-19 spread globally, causing a difficult situation in which many countries in the world were driven into an unprecedented crisis requiring public spending and the launch of substantial monetary easing measures. The United States saw a sudden shift from steady employment growth to a situation in which it has diverted a significant part of its focus to overcoming these difficulties by providing substantial financial support to both businesses and individuals. Europe, which was affected by weak economic sentiment following the slowdown of the Chinese economy, lost momentum due to the UK’s exit from the EU at the end of January 2020 and the direct impact of the subsequent spread of COVID-19 in Italy, Spain and other major countries. In Japan, the consumption tax increase in October, as well as effects related to the spread of COVID-19, put downward pressure on consumer spending. The Chinese economy experienced downward pressure from credit contraction triggered by sluggish domestic and international demand due to trade frictions with the United States and other countries, as well as effects related to the spread of COVID-19. As a result, emerging countries in Asia and other regions also saw a slowdown in consumption owing to the recession.

The automotive industry was also impacted by the foregoing factors and experienced a year-on-year contraction for the second straight year. With respect to developed countries, the United States and Japan recorded year-on-year contractions, where Europe recorded a slight year-on-year increase, partly owing to a surge in sales prior to the introduction of strengthened emission controls. The automotive market in China shrank for the second straight year, and other emerging countries also had poor results resulting in their markets shrinking, such as India, which recorded double-digit year-on-year contraction due to corporate debt problems.

In the medium- to long-term, Toyota expects the automotive market to continue growing driven principally by growth in China and other emerging markets. However, global competition is expected to be severe, as competition in compact and low-price vehicles intensifies, and the pace of technological advancement and development of new products quickens, including in response to a heightened global awareness of the environment and more stringent fuel economy standards.

In 2019, China, North America, Europe and Asia were the world’s largest automotive markets. The share of each market across the globe, which Toyota estimates based on the available automobile sales data in each country and region information, was 29% for China, 22% for North America (21% excluding Mexico and Puerto Rico), 23% for Europe and 11% for Asia. In China, new vehicle sales decreased for the second straight year to approximately 25.8 million units. In North America, new vehicle sales were approximately 20.4 million units, down from the previous year. In Europe, new vehicle sales also decreased from the previous year at approximately 20.7 million units. In Asia (including India but excluding Japan and China), new vehicle unit sales also decreased from the previous year to approximately 9.7 million units.

The worldwide automotive industry is affected significantly by government regulations aimed at reducing harmful effects on the environment, enhancing vehicle safety and improving fuel economy. These regulations have added to the cost of manufacturing vehicles. Many governments also mandate local procurement of parts and components and impose tariffs and other trade barriers, as well as price or exchange controls as a means of creating jobs, protecting domestic producers or influencing their balance of payments. Changes in regulatory requirements and other government-imposed restrictions can limit or otherwise burden an automaker’s operations. Government laws and regulations can also make it difficult to repatriate profits to an automaker’s home country.

The development of the worldwide automotive market includes the continuing globalization of automotive operations. Manufacturers seek to achieve globalization by localizing the design and manufacture of automobiles and their parts and components in the markets in which they are sold. By expanding production capabilities beyond their home markets, automotive manufacturers are able to reduce their exposure to fluctuations in foreign exchange rates as well as to trade restrictions and tariffs.

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Over the years, there have been many global business alliances and investments entered into between manufacturers in the global automotive industry. There are various reasons behind these transactions including the need to address excessive global capacity in the production of automobiles, and the need to reduce costs and improve efficiency by increasing the number of automobiles produced using common vehicle platforms and by sharing research and development expenses for environmental and other technology, the desire to expand a company’s global presence through increased size and the desire to expand into particular segments or geographic markets.

Toyota believes that its research and development initiatives, particularly the development of environmentally friendly new vehicle technologies, vehicle safety and information technology, provide it with a strategic advantage.

Toyota’s ability to compete in the global automotive industry will depend in part on Toyota’s successful implementation of its business strategy. This is subject to a number of factors, some of which are not in Toyota’s control. These factors are discussed in “Operating and Financial Review and Prospects” and elsewhere in this annual report.

Toyota Global Vision

In March 2011, Toyota unveiled its “Toyota Global Vision” corporate outline for the future, which serves not only to give direction to Toyota employees around the world, but also to convey such direction to customers and to the public at large. Toyota will work to achieve sustained growth through the realization of the following ideals which are parts of the Vision:

Toyota Global Vision

Toyota will lead the way to the future of mobility, enriching lives around the world with the safest and most responsible ways of moving people.

Through our commitment to quality, constant innovation and respect for the planet, we aim to exceed expectations and be rewarded with a smile.

We will meet challenging goals by engaging the talent and passion of people, who believe there is always a better way.

“The safest and most responsible ways of moving people”

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

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

“Enriching lives around the world”

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

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

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“Lead the way to the future of mobility”

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

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

“Our commitment to quality, constant innovation”

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

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

“Respect for the planet”

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

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

“Exceed expectations and be rewarded with a smile”

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

“There is always a better way”

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

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

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

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

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

The automotive industry is facing a time of profound transformation that could happen only once in a hundred years in response to rapid progress of technological innovation such as electrification, autonomous driving, connected vehicles and car sharing. Toyota is committed to realizing a mobility society of the future that enables everyone to enjoy freedom of movement beyond the conventional concept of vehicles.

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Toyota announced the outline for the “Connected City” project at CES 2020 held in Las Vegas, Nevada, United States in January 2020. This project will expand the use of the site of Toyota Motor East Japan, Inc.’s Higashi-Fuji Factory to create a concept city where technologies such as autonomous driving, MaaS (Mobility as a Service), personal mobility, robotics, smart home technology and AI will be introduced and tested in a real world environment where people live. With a view toward an era of connected goods and services that support people’s lives, the project aims to continue creating value and business models by rotating swiftly between development and testing of technologies and services in the city. Toyota named the city “Woven City” based on the concept of interwoven mesh of roads laid throughout the city.

We think that by demonstrating future technologies in both the virtual and real world, it will be possible to maximize the potential of connecting people, buildings, vehicles and other goods and services in the city through information. We will work with various partner companies and researchers to create the new city in our quest to create an even-better way of life and mobility for all.

Toyota Environmental Challenge 2050

Positioning responding to environmental issues as one of the most prioritized challenges for management, Toyota has tackled head-on activities such as the development and promotion of electrified vehicles including hybrid vehicles (“HVs”) and fuel cell vehicles (“FCVs”), efficient production that puts less of a burden on the environment, appropriate treatment of end-of-life vehicles and the recycling of hybrid vehicle batteries, and planting trees and ecosystem conservation for the coexistence of humans and nature in harmony.

However, in recent years, the seriousness of environmental issues has increased globally, as evidenced by climate change, water shortages, resource depletion, and degradation of biodiversity. In response to the situation, Toyota believes it is necessary to take on new challenges that consider the world 20 or 30 years in the future, in order to remain closely aligned with the global environment. Accordingly, Toyota announced Toyota Environmental Challenge 2050 in October 2015.

In order to contribute to the realization of a sustainable society, the Toyota Environmental Challenge 2050 has set forth the six challenges listed below for Toyota to address. Those challenges are to reduce CO2 emissions from driving and producing, as well as throughout the lifecycle of, vehicles, and to ensure a net positive impact on the Earth and society toward 2050. In addition, in September 2018, Toyota announced the 2030 Milestone, which indicates Toyota’s milestones for each of the six challenges as of 2030. We will also strengthen collaboration with all stakeholders, consolidate new ideas, dynamism and technology in concert with the Toyota Environmental Action Plan, which lays out specific action plans and targets for every five-year period, to contribute to the realization of a truly sustainable society from a long-term perspective.

1. New Vehicle Zero CO2 Emissions Challenge: Reduce global average CO2 emissions during operation from new vehicles by 90% from Toyota’s 2010 global level by 2050

2030 Milestone:

• Make annual global sales of more than 5.5 million electrified vehicles, including more than 1 million zero-emission vehicles (electric vehicles (“EVs”) and FCVs)

Global average CO2 emissions, in g-CO2/km, from new vehicles are estimated to be reduced by 35% or more compared to 2010 levels, though that may vary depending on market conditions

2. Life Cycle Zero CO2 Emissions Challenge : Completely eliminate all CO2 emissions from the entire vehicle life cycle

2030 Milestone:

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

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3. Plant Zero CO2 Emissions Challenge : Achieve zero CO2 emissions at all plants worldwide by 2050

2030 Milestone:

• Reduce CO2 emissions from global plants by 35% compared to 2013 levels

4. Challenge of Minimizing and Optimizing Water Usage : Minimize water usage and implement water discharge management based on individual local conditions

2030 Milestone:

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

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

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

• Disclose information appropriately and communicate actively with local communities and suppliers

5. Challenge of Establishing a Recycling-Based Society and Systems : Promote global deployment of End-of-life vehicle treatment and recycling technologies and systems developed in Japan

2030 Milestone:

• Complete establishment of battery collection and recycling systems globally

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

6. Challenge of Establishing a Future Society in Harmony with Nature : Connect these nature conservation activities beyond the Toyota group and its business partners to communities, with the world, and to the future

2030 Milestone:

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

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

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

Automotive Operations

Toyota’s revenues from its automotive operations were ¥26,863.5 billion in fiscal 2020, ¥27,079.0 billion in fiscal 2019, and ¥26,397.9 billion in fiscal 2018.

Toyota produces and sells passenger vehicles, minivans and commercial vehicles such as trucks. Toyota Motor Corporation’s subsidiary, Daihatsu Motor Co., Ltd. (“Daihatsu”), produces and sells mini-vehicles and compact cars. Hino Motors, Ltd. (“Hino”), also a subsidiary of Toyota Motor Corporation, produces and sells commercial vehicles such as trucks and buses. Toyota also manufactures automotive parts, components and accessories for its own use and for sale to others.

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Vehicle Models

Toyota’s vehicles (produced by Toyota, Daihatsu and Hino) can be classified into three categories: HVs, conventional engine vehicles, and FCVs. Toyota’s product line-up includes subcompact and compact cars, mini-vehicles, mid-size, luxury, sports and specialty cars, recreational and sport-utility vehicles, pickup trucks, minivans, trucks and buses.

Toyota has set, as a milestone to strive towards in seeking to realize a low-carbon, sustainable society, a target of “annual global sales of more than 5.5 million electrified vehicles by 2030.”

Hybrid Vehicles

The world’s first mass-produced hybrid car was Toyota’s Prius. It runs on an efficient combination of a gasoline engine and motor. This system allows the Prius to travel more efficiently than conventional engine vehicles of comparable size and performance. The hybrid design of the Prius also results in the output of 75% less emission than the maximum amount allowed by Japanese environmental regulations. Toyota views the Prius as the cornerstone of its emphasis on designing and producing eco-friendly automobiles.

In the last three years, Toyota has strengthened its hybrid lineup by introducing the new model LC HV in March 2017, the fully remodeled Camry HV in June 2017, the fully remodeled LS HV and JPN TAXI, which employs a newly developed LPG HV, in October 2017, as well as adding the fully remodeled Avalon HV in April 2018, the fully remodeled Corolla Sport in May 2018, the fully remodeled Crown HV and Century HV in June 2018, the new model ES HV in October 2018, the new model UX HV in November 2018, the fully remodeled RAV4 HV in December 2018, the fully remodeled Corolla SD and WG HV in February 2019 and the remodeled Yaris HV, new Lexus models LM and HV and the fully remodeled Highlander HV in February 2020. In the area of HVs, where strong growth is seen, Toyota aims to continue its efforts to offer a diverse line-up of HVs, enhance engine power while improving fuel economy and otherwise work towards increasing the sales of HVs.

Fuel Cell Vehicles

Toyota began limited sales of a fuel cell vehicle in Japan and the United States in December 2002. Since then, Toyota has made advances by solving technological issues such as the above and worked towards the practical use of such solutions, culminating in the general sale of the world’s first mass produced fuel cell vehicle MIRAI in Japan beginning in December 2014, in the United States beginning in June 2015 and in Europe beginning in September 2015. Toyota also launched “SORA,” the first production model fuel cell bus to receive vehicle type certification in Japan, in March 2018.

Conventional Engine Vehicles

Subcompact and Compact

Toyota’s subcompact and compact cars include the four-door Corolla sedan, which is one of Toyota’s bestselling models. The Yaris is a compact car designed to perform better and offer greater comfort than other compact cars available in the market with attractive specifications such as low emissions. In Europe, Toyota introduced the fully remodeled Corolla in January 2019. In Japan, in addition to the Corolla Sport, which was introduced in May 2018, and a new Yaris model, which was introduced in February 2020, Toyota introduced the Aqua and Daihatsu introduced four OEM vehicles: the Passo, Roomy, Tank and Raize. In India, Asia, China and other markets, Toyota introduced the Etios and Vios, as well as the AGYA and Rush, which are designed and manufactured by Daihatsu, GLANZA, which is designed and manufactured by Suzuki Motor Corporation (“Suzuki”), and Yaris iA, which is designed and manufactured by Mazda Motor Corporation (“Mazda”).

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Mini-Vehicles

Mini-vehicles are manufactured and sold by Daihatsu. Daihatsu manufactures mini-vehicles, passenger vehicles, commercial vehicles and auto parts. Mini-vehicles are passenger vehicles, vans or trucks with engine displacements of 660 cubic centimeters or less. Daihatsu sold approximately 545 thousand mini-vehicles and 222 thousand automobiles on a consolidated basis during fiscal 2020. Daihatsu’s largest market is Japan, which accounted for approximately 80% of Daihatsu’s unit sales during fiscal 2020. From 2011, Toyota began to sell some mini-vehicles manufactured by Daihatsu under the Toyota brand.

Mid-Size

Toyota’s mid-size models include the Camry, which has been the bestselling passenger car in the United States for 22 of the past 23 calendar years (from 1997 to present) and also for the last 18 consecutive years. The Camry was fully remodeled in June 2017. Camry sales in the United States for 2019 were approximately 337 thousand units (including Camry hybrids). In addition, Toyota’s other mid-size models include the REIZ for the Chinese market.

Luxury and Large

In North America, Europe, Japan and other regions, Toyota’s luxury lineup consists primarily of vehicles sold under the Lexus brand name. Lexus passenger car models include the LS, the GS, the ES, the IS, the CT, the LC and the RC. Toyota also sells the LX, the GX, the RX, the NX and the UX as luxury sport-utility vehicles and the LM as a luxury minivan. Toyota commenced sales of its luxury automobiles in Japan under the Lexus brand in August 2005. As of March 31, 2019, the Lexus brand lineup in Japan includes the LS, the GS, the ES, the IS, the CT, the LX, the RX, the NX, the UX, the LC and the RC. The Toyota brand’s full-size luxury car, the Avalon, was remodeled in April 2018, and the Crown was fully remodeled in June 2018. The Lexus brand’s passenger vehicle ES was fully remodeled in October 2018 and the new luxury minivan model LM was introduced in February 2020. Toyota also fully remodeled the Century limousine in Japan in June 2018.

Sports and Specialty

In March 2017, Toyota introduced LC, the new model flagship coupe for Lexus. Furthermore, in May 2019, Toyota introduced a new Supra for the first time in 17 years.

Recreational and Sport-Utility Vehicles and Pickup Trucks

Toyota sells a variety of sport-utility vehicles and pickup trucks. Toyota’s sport-utility vehicles available in North America include the Sequoia, the 4Runner, the RAV4, the Highlander and the Land Cruiser, and pickup trucks available are the Tacoma and Tundra. The Tacoma, the Tundra, the Highlander and the Sequoia are manufactured in the United States. Toyota also offers five types of sport-utility vehicles under the Lexus brand, including the LX, the GX, the RX, the NX and the UX. Toyota also manufactures the RX and RAV4 models in Canada. Toyota’s pickup truck, the Hilux, has been the bestselling model of all Toyota cars sold in Thailand. Toyota introduced the Lexus brand’s new model UX in November 2018, the fully remodeled RAV4 in January 2019, and the fully-remodeled Highlander in December 2019.

Minivans, Cabwagons, and Semi-Bonnet Wagon

Toyota offers several basic models for the global minivan market. Its largest minivans in Japan, the Alphard and the Vellfire, were remodeled in January 2015. In addition, the Noah/Voxy was remodeled in January 2014 and the new model Esquire was introduced in October 2014 in Japan. The new model Calya, an original equipment manufacturing (“OEM”) vehicle by Daihatsu, was introduced in July 2016 in Indonesia. Further, the Hiace was remodeled overseas in June 2019. Toyota’s other minivan models include, in Japan, the Estima and the Sienta, and, in North America, the Sienna.

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Trucks and Buses

Toyota’s product lineup includes trucks (including vans) up to a gross vehicle weight of five tons and micro-buses that are sold in Japan and in overseas markets. Toyota launched “SORA,” a production model fuel cell bus, in Japan in March 2018. Trucks and buses are also manufactured and sold by Hino, a subsidiary of Toyota. Hino’s product lineup includes large trucks with a gross vehicle weight of over eleven tons, medium trucks with a gross vehicle weight of between five and eleven tons and small trucks with a gross vehicle weight of up to five tons. Hino’s bus lineup includes medium to large buses used primarily as tour buses and public buses, as well as small buses and micro-buses.

Product Development

New cars introduced in Japan during fiscal 2019 and thereafter include the new Supra, Raize, and Granace. The remodeled car in Japan during fiscal 2019 and thereafter is the RAV4, Corolla, Corolla Touring, and Yaris. New cars introduced outside of Japan during fiscal 2020 and thereafter include the Lexus LM, and GLANZA, which is designed and manufactured by Suzuki. Remodeled cars outside of Japan during fiscal 2020 and thereafter include the Yaris, the Highlander, and the Hiace.

In addition, the IMV product lineup based on the IMV project to optimize global manufacturing and supply systems is a lineup of strategic multipurpose vehicles produced from a single platform to meet market demand. The IMV product lineup includes, as of March 31, 2020, the Hilux, Fortuner, and Innova, one or all of which are available in all regions.

Markets, Sales and Competition

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

	Year Ended March 31,
	2016					2017					2018					2019					2020
	Units		%			Units		%			Units		%			Units		%			Units		%
Market
Japan		2,059,093		23.7	%		2,273,962		25.4	%		2,255,313		25.2	%		2,226,177		24.8	%		2,239,549		25.0	%
North America		2,839,229		32.7			2,837,334		31.6			2,806,467		31.3			2,745,047		30.6			2,713,165		30.3
Europe		844,412		9.7			924,560		10.3			968,077		10.8			994,060		11.1			1,028,537		11.5
Asia		1,344,836		15.5			1,587,822		17.7			1,542,806		17.2			1,684,494		18.7			1,604,870		17.9
Other*		1,593,758		18.4			1,347,182		15.0			1,391,731		15.5			1,327,017		14.8			1,372,302		15.3
Total		8,681,328		100.0	%		8,970,860		100.0	%		8,964,394		100.0	%		8,976,795		100.0	%		8,958,423		100.0	%

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

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The following table sets forth Toyota’s vehicle unit sales and market share in Japan, North America, Europe and Asia on a retail basis for the periods shown. Each market’s total sales and Toyota’s sales represent new vehicle registrations in the relevant year (except for the Asia market where vehicle registration does not necessarily apply). All information on Japan excludes mini-vehicles. The sales information contained below excludes unit sales by Daihatsu and Hino, each a consolidated subsidiary of Toyota. Vehicle unit sales in Asia do not include sales in China.

	(Thousands of Units)
	Fiscal Year Ended March 31,
	2016			2017			2018			2019			2020
Japan:
Total market sales (excluding mini-vehicles)		3,126			3,360			3,340			3,339			3,185
Toyota sales (retail basis, excluding mini-vehicles)		1,462			1,607			1,565			1,532			1,553
Toyota market share		46.8	%		47.8	%		46.9	%		45.9	%		48.8	%
	(Thousands of Units)
	Calendar Year Ended December 31,
	2015			2016			2017			2018			2019
North America:
Total market sales		20,804			21,191			20,887			21,186			20,379
Toyota sales (retail basis)		2,817			2,798			2,791			2,798			2,757
Toyota market share		13.5	%		13.2	%		13.4	%		13.2	%		13.5	%
Europe:
Total market sales		18,971			19,968			20,721			21,324			20,751
Toyota sales (retail basis)		874			928			1,002			1,035			1,089
Toyota market share		4.6	%		4.6	%		4.8	%		4.9	%		5.3	%
Asia (excluding China):
Total market sales		9,287			9,541			10,078			10,710			9,726
Toyota sales (retail basis)		1,249			1,305			1,318			1,365			1,347
Toyota market share		13.4	%		13.7	%		13.1	%		12.7	%		13.8	%

Japan

Japan is one of the leading countries with respect to technological advancements and improvements in the automotive industry and will continue to demonstrate such strength. Toyota strives to earn customer satisfaction by introducing products distinctive of Japan’s manufacturing ability such as value-added products including Lexus models, FCVs, plug-in hybrid vehicles (“PHVs”) and HVs, vehicles with 3-seat rows and mini-vehicles. Toyota’s consolidated vehicle sales in Japan in fiscal 2020 was 2,240 thousand units, an increase of 14 thousand units in comparison with the previous year. Toyota endeavors to secure and maintain its large share of and position atop the Japanese market. Toyota held a domestic market share (excluding mini-vehicles) on a retail basis of 46.9% in fiscal 2018, 45.9% in fiscal 2019, and 48.8% in fiscal 2020.

Although Toyota’s principle is to conduct production in regions where it enjoys true competitiveness, it considers Japan to be the source of its good manufacturing practices. Toyota supports its operations worldwide through measures such as the development of new technologies and products, low-volume vehicles to complement local production, production of global vehicle models which straddle multiple regions and supporting overseas factories. Toyota is currently implementing the new platform and the new unit for the Toyota New Global Architecture (“TNGA”) globally, with Japan at the core. In Japan, Toyota is implementing flexible production based on market needs, in order to support its large share of domestic sales. Toyota also plans to close the Higashi Fuji plant of Toyota Motor East Japan, Inc. at the end of December 2020 and consolidate its production in northeastern Japan so that the competitiveness of the Japanese “manufacturing (monozukuri)” will be further strengthened on a continuing basis.

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Since Toyota formed an alliance with SUBARU CORPORATION (“SUBARU”) in 2005, Toyota and SUBARU have utilized each other’s resources in development and production. In July 2008, SUBARU transferred 61 million SUBARU shares owned by SUBARU to Toyota with the aim to promote smooth collaboration. As a result of this transfer, Toyota owns 16.5% of SUBARU issued shares. In September 2019, in order to further strengthen the relationship, the two companies agreed that Toyota will increase its equity stake in Subaru up to 20% and at the same time Subaru will acquire shares in Toyota, promoting their collaboration to “make ever-better cars beyond what either company has been able to achieve thus far” and to “expand their collaboration to survive during this once-in-a-century period of profound transformation.”

In 2011, Toyota and the BMW Group agreed to conduct collaborative research in the field of next-generation lithium-ion battery technologies and for BMW to supply diesel engines to Toyota Motor Europe, Toyota’s European subsidiary. In 2013, as part of their strategic long-term cooperation in the field of sustainable mobility, Toyota and BMW Group entered into agreements for the joint development of a fuel cell system, joint development of architecture and components for sports vehicles and joint research and development of lightweight technologies. The two companies completed collaborative research on lithium-air batteries, a post-lithium-battery solution as planned by conducting the second phase of collaborative research into next-generation lithium-ion battery cells. The supply of diesel engines by BMW from 2014 through 2018 was completed as planned under the agreement. As a result of the joint development of sports vehicles, the production of new Supra commenced in March 2019.

Toyota and Mazda have been engaged in collaboration such as the licensing of Toyota’s hybrid technologies to Mazda and the production of compact cars for Toyota at Mazda’s plant in Mexico. In May 2015, towards the goal of making cars with more appeal, Toyota and Mazda entered into an agreement to build a long-term partnership that would create synergies for both companies through such means as leveraging the resources of both companies and complementing each other’s products and technologies. After subsequent discussions, Toyota signed an agreement to enter into a business and capital alliance with Mazda in August 2017. As part of this business and capital alliance, the companies agreed to mutually acquire shares of the other company with the aim of advancing and strengthening their long-term collaboration, as well as to: 1) establish a joint venture that produces vehicles in the United States, 2) jointly develop technologies for EVs, 3) jointly develop connected-car technology, 4) collaborate on advanced safety technologies and 5) expand replenishment of products. Pursuant to this agreement, in October 2017 Toyota and Mazda mutually acquired 50 billion yen worth of shares of each other. Toyota also established EV C.A. Spirit Corporation with Mazda and Denso Corporation (“Denso”) to jointly develop basic structural technologies for EVs. Furthermore, in March 2018, Toyota and Mazda established Mazda Toyota Manufacturing, U.S.A., Inc., a new joint venture company, to produce vehicles in the United States starting in 2021.

In February 2017, Toyota and Suzuki, aiming to contribute jointly to resolution of social issues and achievement of the sound and sustainable development of an automobile-based society, entered into a memorandum of understanding on beginning concrete examination of a business partnership. In November 2017, the two companies agreed to move forward in considering a cooperative structure for introducing EVs in India, and in March 2018, concluded a basic agreement toward the mutual supply of products. In May 2018, Toyota and Suzuki agreed that Toyota will provide Suzuki development support for a compact, ultrahigh-efficiency powertrain, to have Toyota Kirloskar Motor Private Ltd. (“TKM”) produce models developed by Suzuki and to collaborate with respect to African markets. In addition, in March 2019, Toyota and Suzuki began considering the concrete details of collaboration in new areas, such as collaboration in the area of production and promotion of the widespread use of electrified vehicles, by bringing together Toyota’s strength in technologies for electrification and Suzuki’s strength in technologies for compact vehicles. In August 2019, the two companies agreed that Toyota will acquire 4.94% of Suzuki’s shares and that Suzuki will also acquire Toyota shares, further strengthening their relationship and promoting collaboration. As a first step of their collaboration in Africa, starting from the end of 2020, small passenger hatchback cars, which are designed and manufactured by Maruti Suzuki, will be marketed and sold at Toyota’s distributors in South Africa and other African countries.

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In December 2017, Toyota and Panasonic entered into an agreement to study the feasibility of a joint automotive prismatic battery business. Having repeatedly held discussions since then on the concrete details of their collaboration to achieve high-capacity and high-output automotive prismatic batteries that lead the industry in terms of both performance and cost as well as to contribute to the popularization of Toyota’s and other automakers’ electrified vehicles, in January 2019, Toyota and Panasonic agreed to establish a joint venture related to the automotive prismatic battery business. Specifically, the two companies agreed that the scope of the joint venture’s business operations will cover research, development, manufacturing and others, related to automotive prismatic lithium-ion batteries, solid-state batteries and next-generation batteries and that the joint venture will integrate management and other resources from both companies. Toyota and Panasonic established Prime Planet Energy & Solutions, Inc. in April 2020.

In June 2018, Toyota and Denso agreed to begin to consider consolidating the core electronic component operations of both companies within Denso, and entered into a formal agreement concerning this in April 2019. On April 1, 2020, the production and development functions of electronic components at Toyota’s Hirose Plant will be consolidated within Denso. In doing so, the companies aim to establish a speedy and competitive development and production structure.

In April 2019, as part of the initiative to further promote the widespread use of EVs, Toyota announced that it will grant royalty-free licenses on the patents it holds (including some pending applications) for vehicle electrification-related technologies, such as electric motors, power control units (PCUs), and system controls. Toyota also announced that it will provide technical support to other manufacturers developing and manufacturing electrified vehicles when they utilize Toyota’s power train systems.

In Japan, there are five major domestic manufacturers, five specialized domestic manufacturers and a growing volume of imports from major United States and European manufacturers. The prolonged economic slump in the Japanese economy and the recent increases in environmental awareness have also shifted consumer preference towards more affordable automobiles such as compact and subcompact vehicles and towards utility vehicles such as mini-vans. For more than 40 years, Toyota has maintained its position as the largest automobile manufacturer in Japan. Every year since fiscal 1999, Toyota, excluding Daihatsu and Hino, has achieved a market share (excluding mini-vehicles) of over 40%, reflecting in part the success of the introduction of new models for subcompact and compact cars, mini-vans and sedans. In August 2005, Toyota launched the Lexus brand in Japan and achieved a record top market share of 25.6% in the luxury market in 2011. Toyota aims to further distinguish the Lexus brand by continuing to attract new and affluent customers including customers that typically had purchased imported vehicles.

North America

The North American region is one of Toyota’s most significant markets. Toyota has reorganized its production structure and made improvements to its product lineup. In addition, Toyota is actively working to promote increased local operations independence in North America, in accordance with the Toyota Global Vision, announced in 2011.

In the North American region, of which the United States is the main market, Toyota has a wide product lineup (excluding large trucks and buses), and sold 2,713 thousand vehicles on a consolidated basis in fiscal 2020. This represents approximately 30% of Toyota’s total unit sales on a consolidated basis. The United States, in particular, is the largest market in the North American region, which accounts for 87% of the retail sales of Toyota in such region. Sales figures for fiscal 2020 were 98.8% of those in the prior fiscal year.

Toyota commenced sales of the first-generation Prius hybrid model in North America in 2000. The Prius became Toyota’s bestselling model behind the Corolla and Camry, having gained particular support among customers concerned with the environment. Toyota continued further expansion of its environmentally friendly

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vehicles with the introduction of models such as, the fully remodeled all-new Prius and the all-new fuel cell vehicle MIRAI in 2015, the Prius PHV in 2016, the Camry HV in 2017, the fully remodeled Avalon HV and RAV4 HV in 2018, and Highlander HV and Sienna HV in 2020 (scheduled).

Since the introduction of the LS and ES models under the premium brand model, Lexus, in the United States in 1989, Toyota has expanded its Lexus sales with models including the GS, IS and RX. Toyota sold 344 thousand units through the introduction of the new RX model in 2015, 352 thousand units in 2016, 305 thousand units in 2017, 298 thousand units in 2018, when the new model UX and the fully remodeled ES were introduced, and 298 thousand units in 2019.

Toyota is continuing to revise its vehicle models and North American production capacities in response to changes in market conditions. Through the business alliance with Mazda Motor Corporation, the production of Toyota brand compact cars for sale mainly in North America began at Mazda’s plant in Mexico in June 2015. In addition, Toyota commenced production of the Lexus ES350 at its Kentucky plant for sale in the North America market starting in October 2015. Toyota also launched the all-new Camry with the first TNGA platform in North America at the Kentucky plant in 2017 and redesigned Avalon into an all-new model in 2018. Toyota increased the production capacity of the Tacoma from 100,000 to 160,000 in Baja California, Mexico in 2018 and of the Highlander at its Indiana plant in 2019. Toyota’s Mississippi plant started production of the remodeled new Corolla with the TNGA platform in 2019, and its new Mexico plant (Guanajuato) commenced operations at the end of 2019 and began producing the Tacoma. In the meantime, consignment production that started at SIA in 2007 ceased in May 2016.

In terms of auto parts, Toyota increased production capacity of engine plants in Kentucky and Alabama in 2013 and 2014, respectively, to meet rising demand, and also increased production capacity of auto parts at its automatic transmission plant in West Virginia in 2014.

In order to further strengthen competitiveness in North America, Toyota will continue the realignment of North American manufacturing operations going forward. As part of this effort, in addition to the building of a new plant in Mexico in 2019, production of the NEW SUV is planned to commence at a new plant in Alabama that will be established by the joint venture with Mazda around 2021. In addition to the plant in Mississippi, compact cars will also be produced at the new plant in Alabama. Toyota will focus its production of mid-sized vehicles in the plant in Canada, along with the plants in Indiana and Kentucky, by commencing production of the mid-sized SUV RAV4 instead of the Corolla in Canada starting in 2019. Toyota also introduced the RAV4 at the Kentucky plant in January 2020 in order to catch up with the expanding SUV market. For powertrains, Toyota plans to start producing 120,000 hybrid transaxles (hybrid vehicle transmissions) per year at its West Virginia plant starting in 2020 and further increase the production capacity by 120,000 units per year in 2021. Toyota also plans to raise the production capacity of four-cylinder engines and V6 engines by 230,000 units by 2021.

As for Toyota’s vehicle development in North America, the Toyota Technical Center spearheads the design, planning, and evaluation of vehicles and parts as to their ability to meet customer needs. Toyota will continue to promote self-reliance towards producing even better cars in the future.

In July 2017, Toyota launched its new North American headquarters in Plano, Texas and unified its North American manufacturing, sales and marketing, financial services and other functions. Toyota plans to promote collaboration and efficiencies across functions, position itself to deliver “ever-better cars” to customers and work towards realizing sustainable growth in the North America market.

Europe

Toyota’s principal European markets are Germany, France, the United Kingdom, Italy, Spain and Russia. Toyota’s principal competitors in Europe are Volkswagen, Renault, Ford, Opel and Peugeot, as well as Korean manufacturers Hyundai and Kia.

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While competition in Europe continues to intensify, Toyota has expanded its lineup of hybrid models to further strengthen its sales operations, and has entered into supply agreements with PSA for light commercial vehicles in 2012. To strengthen its business setup so that it is less likely to be affected by exchange rates, Toyota launched RAV4 for Russia at OOO “TOYOTA MOTOR” (“TMR”) and C-HR at Toyota Motor Manufacturing Turkey Inc. (“TMMT”) in 2016 in the form of local production. In addition, Toyota is actively promoting production and sales measures that meet local demand by strengthening its value chain including used car dealerships, after-sales services and finance and insurance services. From January 2021, Toyota will take financial ownership of the Toyota Peugeot Citroën Automobile (TPCA) plant in Kolin (Czech Republic). TPCA is the manufacturing joint venture with PSA that produces the compact A-segment models since 2005.

In 2019, the European automotive market was unchanged from the previous year as the sluggishness in Russia, Turkey, the United Kingdom and Spain was offset by the growth of other markets such as Germany, France and Poland.

Toyota sales in 2020 exceeded that of the previous year due to an increase in units sold for Yaris, AYGO, and RAV4, and the expansion of a new hybrid powertrain to Camry and Corolla Sedan. Higher sales in most markets made up for the slowdown in Russia and Turkey; sales in France, Poland, the Baltic countries, Israel and Kazakhstan hit a record high. Toyota’s consolidated vehicle sales in Europe in fiscal 2020 was 1,029 thousand units, an increase of 3.5% from fiscal 2019.

Toyota has increased European production capacity in response to sales growth. For example, in August 2016, Toyota increased the production capacity in Russia to 100,000 units and the production of the RAV4 commenced in addition to the Camry. Also, Toyota commenced production of the compact crossover C-HR by increasing the annual production capacity of TMMT from 150,000 units to 280,000 units (three-shift) in September 2016.

In terms of model change, Toyota Motor Manufacturing (UK) Ltd. (“TMUK”) and TMMT implemented a model change for the Corolla in 2018 and 2019, respectively. Also, in Russia, Toyota redesigned the Camry into an all-new model on the TNGA platform in April 2018. In February 2020, Toyota launched a new compact van range, PROACE CITY, supplied by PSA, as part of its plan to strengthen Toyota’s line-up in the growing European light commercial vehicle market. To cater to customers seeking the ultimate fun-to-drive vehicle, Toyota also launched GR Supra, the first global model of Toyota motor sports brand Toyota GAZOO Racing, produced at BMW’s Magna Steyr plant in Austria. The first vehicles were delivered to customers in July 2019.

In terms of auto parts, in October 2016, Toyota decided to produce hybrid transaxles and gasoline engines in Poland. Toyota started production of hybrid transaxles in 2018 at Toyota Motor Manufacturing Poland (“TMMP”), a production plant for transmissions and engines, and added two gasoline engines — a 1.5L in 2017 and a 2.0L in 2019 — at Toyota Motor Industries, Poland (“TMIP”), a production plant for diesel engines. In concert with the enhancement of the gasoline engine business, the two companies were integrated in April 2017.

As part of Toyota’s global vision to evolve into a mobility company, Toyota launched a new mobility brand, KINTO, in Europe in January 2020. Using a distinct and dedicated brand, Toyota aims to appeal to a new category of MaaS customers. KINTO-branded services will range from full-service leasing to car sharing, carpooling and subscription. KINTO-branded services will be deployed market-by-market based on viability and sustainability of the business case.

Asia

Toyota’s consolidated vehicle sales in Asia (including China) in fiscal 2020 was 1,605 thousand units, a decrease of 4.7% from fiscal 2019.

In light of the importance of the Asian market that is further expected to grow in the long term, Toyota aims to build an operational framework that is efficient and self-reliant as well as a predominant position in the

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automotive market in Asia. Toyota has responded to increasing competition in Asia by making strategic investments in the market and developing relationships with local suppliers. Toyota believes that its existing local presence in the market provides it with an advantage over new entrants to the market and expects to be able to promptly respond to demand for vehicles in the region.

In this region, Toyota has been further strengthening its business foundations by improving its product line-up, expanding local procurement and increasing production capacities.

Toyota’s principal Asian markets are Thailand, India, Indonesia and Taiwan.

In Thailand, Toyota has three plants capable of producing approximately 800 thousand units per year, not only to meet domestic demands but to serve as a production base for regions inside and outside the ASEAN region, and produces and exports the Hilux, the Hiace, the Corolla, the Camry and the Vios. Toyota implemented a model change for the Hiace and Corolla in 2019, and is steadily working on the redesigning of such models.

In India, Toyota constructed a second plant with an annual production capacity of 70 thousand units in 2011 and has increased the production capacity as necessary up to 210 thousand units. In 2018, Toyota newly launched the Yaris compact model in such second plant. Moreover, in line with the global redesigning of the Camry, Toyota implemented a model change in India and began producing the TNGA model as well.

In Indonesia, Toyota introduced the Etios and commenced operation of a second plant in Karawang in 2013 in order to meet the diverse customer needs and the expanding market. Currently, Toyota is producing the Vios, the Yaris and the Sienta, and the initial production capacity of 70 thousand units per year has become 130 thousand units per year. Similar to the plant in Thailand, PT Toyota Motor Manufacturing Indonesia (“TMMIN”) is positioned as a production base for regions inside and outside of the ASEAN region, including the production of Innova and the Fortuner at the first plant. Toyota also constructed a passenger vehicle engine plant that commenced production in February 2016.

In 2016 Toyota began production and sales of the Sienta in Taiwan in response to diversifying demands.

In March 2019, Toyota implemented a model change for Corolla in Taiwan.

China

Toyota has been conducting operations in China through joint ventures, and its success in producing products that meet local demands and in establishing its sales and service network has significantly contributed to Toyota’s profits. Based on the firm business foundation that it has established, Toyota is conducting its operations with the aim of promoting further growth and increasing profitability through further development of its sales and service network and expansion of its product lineup.

In China, Toyota has been conducting joint ventures with two major partners, namely, China FAW Group Corporation and Guangzhou Automobile Group Co., Ltd. First, with respect to the joint venture with China FAW Group Corporation, from when production and sales of the Vios started in 2002, production and sales of the Land Cruiser Prado, the Corolla, the Crown, the Coaster and the RAV4 has expanded to include such models. The joint venture has developed production bases in three regions, namely, Tianjin, Changchun and Sichuan, and in Tianjin, the joint venture completed the construction of a new production line to replace an aging existing line in the Teda area in June 2018, and introduced the new-model SUV IZOA, which is a TNGA platform vehicle. In Changchun, where the new plant was launched in 2012, the initial production capacity of 100 thousand units per year has now become 130 thousand units per year. The joint venture also increased annual production capacity of the plant in Sichuan from 30 thousand units to 50 thousand units in the spring of 2015 to increase production of the Prado, and is steadily increasing its production capacity of these three plants, which on an aggregate basis is currently approximately 690 thousand units per year. In addition, the joint venture sought to improve production efficiency by closing small, aging production lines at the Changchun East Plant of Sichuan FAW Toyota Motor Co., Ltd. in December 2016 and the Xiqing Plant of Tianjin FAW Toyota Motor Co., Ltd. in February 2017.

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GAC Toyota Motor Co., Ltd. (“GAC Toyota”), a joint venture between Toyota and Guangzhou Automobile Group Co., Ltd., expanded the production and sales of the Camry, the Yaris, the Highlander, the Levin, etc. With regard to production capacity, GAC Toyota has an annual production capacity of approximately 560 thousand units in total due to starting a third plant in early 2018 in addition to the existing first and second plant. GAC Toyota redesigned the Camry in 2017 and the C-HR in 2018 into an all-new model with the TNGA platform as well as launched new models.

In terms of auto parts, in 2014, Toyota opened a plant in Changshu in Jiangsu, China for the production of the Continuously Variable Transmission (“CVT”) as the first CVT plant outside of Japan and in September 2015, Toyota also began production of HV Transaxles at the CVT plant. Toyota also launched a plant to produce hybrid vehicle batteries in October 2015.

Total vehicle sales in the Chinese market decreased 9% from 28.18 million in 2018 to 25.78 million in 2019. In this market, Toyota’s sales in 2019 were 1.61 million vehicles, up 9% from the previous year. In the domestically produced passenger vehicle market in mainland China (20.72 million units), Toyota had a market share of 8%. In 2019, sales of SUVs expanded as a result of customers’ value diversification. As for Toyota’s distribution network, Toyota has been expanding the distribution network for locally produced vehicles in cooperation with Chinese joint venture partners under Tianjin FAW Toyota Motor Co., Ltd. and Guanqi Toyota Motor Co., Ltd., and for imported vehicles, Toyota has also been expanding primarily the Lexus brand sales network. Toyota plans to further increase sales by expanding the number of dealers and the product lineup for both locally produced and imported vehicles. In addition, as the market in China develops and becomes more sophisticated, Toyota plans to promote the so-called “Value Chain” businesses such as used cars, services, financing and insurance so as to contribute to the development of a mobility society.

South and Central America, Oceania, Africa and the Middle East

Toyota’s consolidated vehicle sales in South and Central America, Oceania, Africa and the Middle East (collectively, the “Four Regions”) in fiscal 2020 were 1,372 thousand units, an increase of 3.4% from fiscal 2019.

In these regions, which are expected to become increasingly important to Toyota’s business strategy, Toyota aims to develop new products which meet the specific demands of each region, increase production and further promote sales.

Toyota’s principal markets in the Four Regions are Brazil in South and Central America, Australia in Oceania, South Africa in Africa and Saudi Arabia in the Middle East.

The core models in this region are global models such as the Corolla, IMV (the Hilux) and Camry. In order to increase production of IMVs, Toyota increased annual production capacity of the plant in Argentina to 140 thousand units per year at the end of 2015. In order to expand business in Brazil, Toyota constructed a new factory in Sorocaba with an annual production capacity of 70 thousand units, and in 2012, began production and sales of compact vehicles. Starting from the beginning of 2016, Toyota increased production capacity to 110 thousand units per year and started production of the Yaris from June 2018.

Moreover, in terms of auto parts, Toyota commenced first line production at a plant in Brazil for passenger vehicle engines in February 2016, and opened the second line in July 2019.

Production

Toyota and its affiliated companies produce automobiles and related parts and components through more than 50 overseas manufacturing companies in 27 countries and regions besides Japan. Toyota’s major manufacturing facilities include plants in Japan, the United States, Canada, the United Kingdom, France, Turkey,

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Czech Republic, Russia, Poland, Thailand, China, Taiwan, India, Indonesia, South Africa, Argentina and Brazil. Daihatsu brand vehicles are produced at four factories in Japan and two manufacturing companies in two other countries of Indonesia and Malaysia. Hino brand vehicles are produced at four factories in Japan and eleven manufacturing companies in eleven countries, including Indonesia and Thailand, and Toyota is planning to increase the bases in the United States and Russia. For a listing of Toyota’s principal production facilities, see “Information on the Company — Property, Plants and Equipment.”

In promoting a sustainable growth strategy, establishing a system capable of providing optimal supply of products in the global market is integral to Toyota’s strategy.

In line with its basic policy of manufacturing in countries or regions where there is demand and where Toyota is truly competitive, Toyota will make efficient use of and maximize capacity utilization at its existing plants to respond to the expanding market and will continue to focus on making efficient capital investments as necessary. Furthermore, Toyota will continue to place top priority on safety and quality in strengthening true competitiveness with the aim of achieving sustainable growth.

In fiscal 2019, Toyota produced on a consolidated basis 4,309 thousand vehicles in Japan and 4,676 thousand vehicles overseas, and 4,413 thousand vehicles in Japan and 4,406 thousand vehicles overseas in fiscal 2020.

The following table shows Toyota’s worldwide vehicle unit production by geographic market for the periods shown. These production figures do not include vehicles produced by Toyota’s unconsolidated affiliated companies. The sales unit information elsewhere in this annual report includes sales of vehicles produced by these affiliated companies. Vehicles produced by Daihatsu and Hino are included in the vehicle production figures set forth below.

	Fiscal Year Ended March 31,
	2016		2017		2018		2019		2020
Units Produced
Japan		3,980,576		4,109,038		4,285,844		4,308,903		4,413,162
North America		1,970,053		2,062,862		1,902,304		1,840,502		1,807,289
Europe		564,934		637,352		681,048		679,380		674,125
Asia		1,605,345		1,674,468		1,601,473		1,681,783		1,521,551
Other*		454,991		491,789		493,464		474,618		403,495
Total		8,575,899		8,975,509		8,964,133		8,985,186		8,819,622

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

Toyota closely monitors its actual units of sale, market share and units of production data and uses this information to allocate resources to existing manufacturing facilities and to plan for future expansions.

See “— Capital Expenditures and Divestitures” for a description of Toyota’s recent investments in completed plant constructions and for a description of Toyota’s current investments in ongoing plant constructions.

The Toyota Production System

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

• “Just-in-Time,” and

• “Jidoka.”

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Just-in-Time is an approach in which necessary parts and components are manufactured and delivered in just the right quantity in a timely manner just as they are needed. This allows Toyota to maintain low levels of inventory while maintaining operating efficiency.

Jidoka is a production concept which involves immediate stop of work when problems arise in the production line in order to stop the production of defective items from being passed on to subsequent stages of the process, and therefore making quality assurance an inherent part of the production process. To achieve this, Toyota’s equipment is designed to detect and highlight abnormalities and to stop whenever abnormalities occur. Toyota also authorizes its machine operators and other members of its production team to stop production whenever they note anything suspicious. This helps Toyota to build quality into the production process by avoiding defects and preventing the waste that would result from producing a series of defective items.

Toyota believes that the TPS allows it to achieve mass-production efficiencies even in high-mix, low-volume production. This belief gives Toyota the flexibility to respond to changing consumer demand without significantly increasing production costs. While the TPS remains the basis of Toyota’s automobile production, the system has been expanded for use in Toyota’s parts production, logistics and customer service activities as well.

Through the TPS, issues are identified and analyzed at the actual site, the entire production process is made visible and production efficiency as well as product quality are improved through the application of measures to address the sources of problems. As one method to implement these measures, Toyota utilizes sophisticated information technologies to improve each step of its vehicle development process, from product planning to commencement of mass-production. These technologies are intended to enhance flexibility, simplification, quality, cost competitiveness and speed. Specifically, detailed virtual assembly and other simulations of manufacturing processes are conducted on computers for a new vehicle or new production equipment/systems before a prototype is made. An actual prototype is made only after defects and related issues have been identified and resolved by computer simulation, thereby minimizing the time required for rebuilding prototypes and significantly shortening the time required before starting mass production. Moreover, this system is used to prepare virtual factories and other visual aids in order to facilitate training and communication at overseas plants and enable the efficient transfer of necessary technology and skills.

In January 2018, Toyota established the TPS Group, and in order to stay true to itself, Toyota has gone back to its roots, positioning TPS as the bedrock of its management, and is moving forward with initiatives to ensure that TPS is passed on to the future as part of Toyota’s DNA. Specifically, Toyota will have the concepts of “Just-in-Time” and “jidoka,” which are the two main pillars of the TPS, spread within the entire company and have all divisions, including technical and administrative divisions, work to reduce lead time and ensure that abnormalities are made visible, through which Toyota will achieve results by both cost reduction through improved productivity as well as improved work quality.

Toyota is currently working towards producing even better cars across the company. With the aim of realizing “cars that offer a rewarding experience for customers” through “truly competitive manufacturing” in terms of production technology and manufacturing, Toyota is developing innovative production systems, equipment and processing technology and introducing them to its mass-production line in due course.

Distribution

Toyota’s automotive sales distribution network is the largest in Japan. As of March 31, 2020, this network consisted of 275 dealers employing approximately 32 thousand sales personnel and operating approximately 4.6 thousand sales and service outlets. Toyota owns 6 of these dealers and the remainder is independent.

Toyota believes that this extensive sales network has been an important factor in its success in the Japanese market. A large number of the cars sold in Japan are purchased from salespersons who visit customers in their

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homes or offices. In recent years, however, the traditional method of sales through home visits is being replaced by showroom sales and the percentage of automobile purchases through showrooms has been gradually increasing. Toyota expects this trend to continue, and accordingly, is working to improve its sales activities such as customer reception and meticulous service at showrooms to increase customer satisfaction.

Sales of Toyota vehicles in Japan have been conducted through four sales channels — “Toyota,” “Toyopet,” “Corolla” and “Netz.” In addition, Toyota introduced the Lexus brand to the Japanese market in August 2005, and currently distributes the Lexus brand vehicles through a network of 172 Lexus sales outlets in order to enhance its competitiveness in the domestic luxury automotive market. The following table provides information for each channel as of March 31, 2020.

	Dealers
Channel	Toyota Owned		Independent		Total		Market Focus
Toyota		1		47		48	Luxury channel for Toyota brand vehicles
Toyopet		2		49		51	Leading channel for the medium market
Corolla		1		71		72	Volume retail channel centering on compact models
Netz		1		103		104	Sales channel targeting customers with new values for the 21st century
Other		1		—		1	Toyota Mobility Tokyo * Integration of Toyota’s four directly owned sales companies in Tokyo (since April 2019)
Brand					Sales Outlets		Market Focus
Lexus						172	Premium brand

Starting in May 2020, Toyota’s sales channels, each of which had carried different car models, will start offering all Toyota vehicles, except for the Lexus brand vehicles which will continue to be distributed through the Lexus sales outlets.

Outside Japan, Toyota vehicles are sold through approximately 169 distributors in approximately 203 countries and regions. Through these distributors, Toyota maintains networks of dealers. The chart below shows the number of Toyota distributors as of March 31, 2020 by country and region:

Country/Region	Number of Countries		Number of Distributors
North America		3		5
Europe		53		29
China		1		4
Asia (excluding China)		19		13
Oceania		17		15
Middle East		16		14
Africa		55		49
Central and South America		39		40

Improving Efficiency

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

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

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• creating a production structure that can better withstand fluctuations in demand and currency exchange rates; and

• strengthening sales capabilities in line with local conditions.

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

• improving product development and production efficiencies through the re-integration and improvement of vehicle platforms and power trains as well as through the development of electronic platforms which organize electronic devices of vehicles as a package and standardize electronic structure and infrastructure;

• reinforcing and promoting Ryohin-Renka Cost Innovation (“RR-CI”) activity, which aims for the elimination of waste in all processes from design to production while ensuring the reliability and safety of each part;

• “developing a real cost-competitive structure” by working together with suppliers;

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

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

• streamlining production systems; and

• improving the efficiency of domestic and international distribution.

Toyota is further improving production efficiency by installing more versatile equipment and systems, modifying vehicle body designs to allow for a greater variety of models on each production line and sharing more parts among vehicles, not simply among different models but also among different platforms.

In April 2012, Toyota announced a new development framework, the TNGA, which reconciles sweeping advances in product appeal with cost reductions. The new framework sets forth an architecture that incorporates not only the three fundamental vehicle functions of moving, turning and stopping, but also ergonomics such as driving position as well as freedom of design. Toyota plans to efficiently develop cars with high basic-performance attributes by developing parts and modules based on this architecture. The TNGA provides for handling multiple models simultaneously in grouped development projects that will increase the sharing of parts and core vehicle components. This sharing, carried out in cooperation with suppliers, will result in lowered costs, thereby allowing developmental manpower and funds to be reinvested in R&D to meet consumer preferences and R&D to meet regional needs, resulting in further product improvement.

By April 2013, Toyota established systems to rapidly promote the TNGA and carried out product development under this new way of doing business. As a result, Toyota realized high basic performance and marketability in the Prius that was introduced in Japan in December 2015. Toyota subsequently applied the TNGA initiatives to the Camry, Lexus LC and LS in 2017 and the Crown and Corolla Sport in 2018. Toyota has rolled out, and plans to continue to roll out, the results of such development to other vehicles as well.

Realizing a Smart Mobility Society that expands through connected car technologies

In the midst of rapidly changing societies, including the falling birth rate and aging populations in developed nations, an increasingly diverse range of energy sources and the evolution of IoT, among others, the automotive industry is facing a time of profound transformation that could happen only once in a hundred years. As a company responsible for the freedom of mobility, which is one aspect of social infrastructure, Toyota is firmly determined to contribute to solving social issues by changing the very ways in which people, things, and information flow through the world. Based on this commitment, Toyota is moving forward with initiatives

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striving to realize a smart mobility society, in which people can “enjoy freedom of movement and feel at ease and excited,” by connecting vehicles, people and communities with its connected car technologies.

Our Connected Strategy for Realizing Connected Platforms

Connecting cars is not only providing new value and services to customers, but creating new modes of use and new roles in society for cars. To stay at the forefront of this evolution, Toyota established an in-house Connected Company in April 2016 and announced its Connected Strategy in November of the same year. This strategy comprises three pillars that we initiated almost simultaneously.

• Pillar 1 — Connect All Cars

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

• Pillar 2 — Creation of New Value and Business Revolution

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

• Pillar 3 — Creation of New Mobility Services

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

The Connected Strategy has three facets: defense, Kaizen (improvement) and offense. Defense means to establish long-term relationships of trust with customers, and to secure and expand the existing value chains; Kaizen (improvement) means to rapidly improve productivity, quality, and lead time of work by changing existing work habits; and Offense means to create new value for our cars and to create our new mobility business.

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As practical measures for realizing a Smart Mobility Society based on the Connected Platforms, Toyota is promoting: 1. “Connected with vehicles and roads (SAFETY) — Cooperative ITS, driving assistance functions and automated driving”; 2. “Connected with people (COMFORT) — Connected Service”; and 3. “Connected with society and the community (ECO & CONVENIENCE) – Maas (Mobility as a Service).”

Connected with vehicles and roads (SAFETY) — Cooperative ITS

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

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

• “ITS Connect,” a driving safety support system that uses a dedicated ITS frequency of 760 MHz, was introduced in the fall of 2015. Through direct and continuous exchange of information between vehicles and the road and among vehicles, this system aims to mitigate accidents near intersections, which have been difficult to mitigate to date. The system also includes Communicating Radar Cruise Control features, which supports smooth acceleration and deceleration when following behind another vehicle. From August 2017, Toyota and Mazda started a partnership in the field of advanced safety technologies and a collaboration between the two companies concerning Toyota’s vehicle-to-vehicle and vehicle-to-infrastructure technologies is undergoing. 

Toyota is promoting the development of systems with further enhanced functions, and will aim at the realization of automated driving in which all drivers can move safely, smoothly and freely by harmonizing ITS technology and vehicle control technology.

Connected with vehicles and roads (SAFETY) — driving assistance functions and automated driving

Toyota’s driving assistance functions offer functions that assist drivers with an aim to lessen the burden of driving, enhance safety and provide to everyone the pleasure of driving. Toyota has commercialized enhancements to various functions that assist the driver in sensing external information, avoiding danger and making appropriate maneuvers.

In 2015, Toyota commercialized the Toyota Safety Sense, a package that includes the Pre-collision System and driving assistance functions. In 2018, Toyota commercialized the new-generation Toyota Safety Sense (Toyota Safety Sense 2.0 in the United States), which has brakes capable of mitigating collision damage and advanced driving assistance functions. The most recent Toyota Safety Sense 2.0 has the following functions:

• “Pre-collision System” is a system that perceives possibilities of a crash with obstacles, cars in front, crossing pedestrians during both day and night as well as crossing bicycles in daytime, all through a sensor installed in a vehicle. If a collision seems likely, it proceeds to activate warnings as well as brake assistance, which aids the driver’s operation of the brake, or the automatic braking system, which aids in avoiding the collision altogether or mitigates any damage.

• “Radar Cruise Control (with all-speed tracking function)” allows the vehicle to keep a constant distance between itself and the preceding vehicle within a speed range from zero to a preset speed, automatically slowing down and stopping if necessary to avoid collision. When the car in front speeds up, it allows the driver to accelerate.

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• “Lane Tracing Assist” is a system that, when the Radar Cruise Control function is running, uses a camera to detect white or yellow lane markers while driving and assists the driver’s operation of the steering wheel by controlling the electric power steering in order to help keep the vehicle traveling between lane markers.

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

Toyota has completed installation of Toyota Safety Sense on nearly all models sold in Japan, the United States and Europe at an affordable price aimed at widespread adaption. The accumulated global shipments of vehicles with Toyota Safety Sense installed exceeded 16 million vehicles (of which approximately 7 million vehicles were shipped to the United States) as of the end of December 2019.

In addition to the above, with the aim to realize the ultimate goal of zero casualties from traffic accidents, Toyota is promoting the development of technologies such as “Parking Support Brake (pedestrians),” which supports avoiding collisions by detecting pedestrians in the rear of the vehicle using a camera, and “Active Steering Assist — Pre-Collision System,” which is a system that, in situations where the system decides that a collision cannot be avoided by automatic braking alone and there is room in the driver’s lane to avoid a collision, supports avoiding collisions by automatically controlling the steering after the Pre-Collision System controls the brake.

Connected with people (COMFORT) — Connected Service

The driving experience can be enriched and its convenience can be improved through information communication technologies that add a new “connecting” function to the basic vehicle functions of “running, turning and stopping.” Examples of the connecting function include the following:

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

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

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

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

In addition to the above, Toyota also operates a Japanese-language web portal for automobile information, GAZOO.com. The name “GAZOO” originates from the Japanese word gazo, meaning images. GAZOO was established as an Internet membership service linking Toyota, its national dealer network and GAZOO members, and has provided information on new and used Toyota vehicles and related services, as well as online shopping services. GAZOO later expanded to include information on other automakers, as well as a rich blog feature as a social networking portal site on automobiles.

Furthermore, in 2010, by utilizing technology cultivated through the Internet and telematics services, Toyota developed the Toyota Smart Center (“TSC”) that optimally controls electricity and links EVs and PHVs with homes. Toyota aims to offer new services, achieve better vehicle quality and enhance product attractiveness as well as contribute further to society by utilizing the vehicle information, road conditions and other parameters collected via telematics services and stored at the TSC. With regard to contribution to society, Toyota began offering the Big Data Traffic Information Service in June 2013, through which traffic information, statistics and other related information are provided to local governments, universities and businesses to support traffic flow improvement and assist disaster prevention measures. In December 2016, Toyota launched the TC Smartphone Navigation free-of-charge to users, including those other than Toyota users, to provide readily usable route history maps. Toyota plans to continue to work with new information technologies and the IT industry to establish a framework for TSC’s global implementation and to realize a mobility society of the future.

In 2016, Toyota has been working actively on “connected car technology” and alliances with other companies for effective vehicle data utilization to “make ever-better cars” and for safer and securer “connected” service. In January 2016, Toyota announced a “connected vehicle framework” to increase installation of DCMs into a broader range of its vehicles starting in the United States from 2017. In April 2016, Toyota established a new company, “Toyota Connected, Inc.,” in the United States to consolidate and analyze information collected from vehicles and to develop new products, and thereby promoting “making ever-better cars” through utilizing big data.

As a further engagement in the insurance industry, Toyota established Toyota Insurance Management Solutions USA, LLC (“TIMS”), a new U.S. telematics car insurance services company, to promote analysis of big data and development of algorithms. TIMS provides telematics insurance services best suited to Toyota’s customers by consolidating Toyota’s data, financing and insurance knowhow.

Connected with society and the community (ECO & CONVENIENCE) — MaaS (Mobility as a Service)

In November 2016, based on the proliferation and popularity of mobility services such as car-sharing, Toyota started to establish MSPF, which has various functions to support mobility services. MSPF is a platform

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that aggregates and covers individual business functions, such as vehicle management systems and leasing programs, that Toyota developed and offered to mobility service providers such as ride-sharing operators when working together with them. In addition, as one example of the functions that MSPF offers, Toyota developed the smart key box (“SKB”) that enables users to lock and unlock doors and to start the engine with their smartphones — thus providing a safer and more secure way of locking/unlocking doors and starting the engine. Using the MSPF and SKB, Toyota started a pilot program in collaboration with Getaround, a venture company providing car-sharing services targeted at individuals in the United States, in March 2017 in San Francisco, California. In addition, Toyota is working with Toyota Financial Services Corporation (“TFSC”) to make vehicles with expired leases available on Getaround, in order to effectively utilize TFSC’s assets. Toyota is also examining the viability of car sharing using SKBs. Furthermore, Servco Pacific Inc., a Toyota dealer in Hawaii, began a car-sharing services program in July 2018.

In terms of ride-sharing, in May 2016, Toyota and Uber entered into a memorandum of understanding to explore collaboration with respect to ride-sharing. In August 2018, the scope of collaboration was expanded: Toyota and Uber will be developing vehicles utilizing the technologies of both companies and used exclusively for ride-sharing, and introducing the same into Uber’s ride-share network. Technology establishment of the in-vehicle equipment and control interface is underway. Furthermore, in April 2019, in order to accelerate the development and practical realization of automated driving vehicles for ride-sharing, Toyota announced that it will invest in Uber Advanced Technologies Group together with Denso Corporation and SoftBank Vision Fund L.P. Toyota is currently developing automated driving MaaS vehicles to realize its pilot program in short order .

In anticipation of various possibilities, such as collaboration on automated driving, operations and vehicle offerings in the future, Toyota invested in May Mobility, a pioneering venture company engaged in the mobility service businesses, including automated driving, in North America.

In China, Toyota announced its collaboration with Didi Chuxing (“DiDi”) on e-Palette in January 2018, and launched vehicle-related services, including a vehicle leasing service and various services for DiDi ride-hailing drivers at a Toyota dealer in May 2018. Those cars are equipped with Toyota’s in-vehicle device, TransLog, leveraging intelligent analysis capabilities of Toyota’s MSPF to provide quality automobile maintenance support and safe driving guidance to ride-hailing drivers through connected services. In April 2019, Toyota and DiDi agreed to expand their collaboration to include MaaS in China, pursuant to which Toyota has established a joint venture with GAC Toyota Motor Co., Ltd. (GTMC) for vehicle-related services for ride-hailing drivers. Through this agreement, Toyota and DiDi plan to shift to full-scale implementation of services that they have been developing in China to realize more-efficient and high-quality ride-hailing businesses.

Toyota also invested in Pony ai in February 2019, and the two companies are discussing specific details of the collaboration, centered on automated driving technologies.

In Southeast Asia, Toyota started to collaborate with Grab in August 2017, and commenced a pilot program in Singapore to collect driving data generated from vehicles owned by Grab. In June 2018, Toyota further expanded the collaboration with Grab, invested in Grab, and moved forward with providing various connected services that use MSPF to Grab. As a specific example of such services, in December 2018 Toyota provided the Toyota-developed total care service for vehicles to 1,500 vehicles owned by Grab and started both to provide high-efficiency maintenance reflecting TPS as well as to cooperate with local insurance companies with the aim to effectively utilize driving data collected from MSPF in insurance services.

In August 2016, Toyota and Japan Federation of Hire-Taxi Associations entered into a memorandum of understanding to explore areas for collaboration, so as to develop and introduce the “Japanese taxi of the future.” Through use of taxis to collect and analyze information concerning the road traffic environment, and applying those results to the development of the Mobility Teammate Concept, which embodies Toyota’s vision of automated driving, Toyota and the Japan Federation of Hire-Taxi Associations will continue to be important partners in helping to develop Japanese taxis into the “world’s safest, most pleasant, world-class public transportation service” and to strengthen the Japanese transportation infrastructure.

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In October 2018, Toyota agreed with SoftBank Corp. (“SoftBank”) in the realization of a Mobility Network that delivers safe and comfortable mobility to all people. In February 2019, Toyota and SoftBank established a joint venture, MONET Technologies Inc. (“MONET”). Anticipating the realization of an automated driving society, cooperation with 17 local governments in Japan to provide next-generation on-demand mobility service began. In March 2019, MONET established the Monet Consortium with the participation of 88 companies in an effort to promote inter-corporate cooperation as a way of ‘team building’ that aims for the realization of mobility innovation.

With the background of expanding mobility services and the tightening of data regulations in Europe, Toyota has established Toyota Connected Europe, Limited in April 2018, and plans to utilize MSPF in Europe as well to promote car-sharing businesses in coordination with local dealers.

In January 2018, at “2018 International CES” held in Las Vegas, Nevada in the United States, Toyota announced the “e-Palette Concept,” a next generation EV designed exclusively for MaaS, leveraging electrification, connected vehicles and automated driving technologies. The e-Palette Concept can be adapted for various services, such as passenger transportation, logistics services or retail services, and is the embodiment of Toyota’s concept of “new mobility” that supports the lifestyles of its customers. Amazon.com, Inc., DiDi Chuxing, Pizza Hut, LLC, Uber and Mazda Motor Corporation are collaborating with Toyota as initial launch partners in order to explore vehicle specifications that are even more practical and to ensure the realization of a new mobility service. Going forward, Toyota is planning to support the transportation of athletes and staff in the Olympic and Paralympic village in the 2020 Tokyo Olympic and Paralympic Games, as well as commercialization around 2023 upon conducting a pilot program with alliance partners.

In addition, Toyota joined the “Toyota City Low-Carbon Society Verification Council” (established in August 2010), and carried out experiments relating to the “Establishment of a System for Low-Carbon Emission Transportation” until March 2015. As a way of building on the results of such experiments, Toyota launched an experimental ultra-compact electric vehicle sharing program in Tokyo from April 2015. It also launched an experimental ultra-compact electric vehicle program for tourism using a Toyota developed car-sharing system in Okinawa from January 2016. Furthermore, in Toyota City and Okinawa in April 2017, and in Tokyo in April 2019, these experimental programs were commercialized, and management was transferred to local companies and organizations.

In March 2020, Toyota and Nippon Telegraph and Telephone Corporation (“NTT”) agreed to enter into a business and capital alliance with the aim of realizing smart cities that continue to evolve in accordance with response to the needs of residents. The two companies will jointly build a “Smart City Platform” for smart cities that will offer value to all areas, from people, cars and houses, to everyday life, business, infrastructure and public services related to residents, businesses, local governments, and the like. As a precedent model, it will first be implemented in the Higashi-Fuji area of Susono City, Shizuoka Prefecture (the Woven City) and in the Shinagawa area in Minato-ku, Tokyo (a part of the NTT block in front of Shinagawa Station), and is expected to be rolled out to other cities in succession.

Financial Services

Toyota’s financial services include loan programs and leasing programs for customers and dealers. Toyota believes that its ability to provide financing to its customers is an important value-added service. In July 2000, Toyota established a wholly-owned subsidiary, TFSC, to oversee the management of Toyota’s finance companies worldwide, through which Toyota aims to strengthen the overall competitiveness of its financial business, improve risk management and streamline decision-making processes. Toyota has expanded its network of financial services, in accordance with its strategy of developing auto-related financing businesses in significant markets. Accordingly, Toyota currently operates financial services companies in 38 countries and regions, which support its automotive operations globally.

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Toyota’s revenues from its financial services operations were ¥2,190.5 billion in fiscal 2020, ¥2,153.5 billion in fiscal 2019, and ¥2,017.0 billion in fiscal 2018. In fiscal 2020, downward pressure on revenue in the financing business from the previous year remained, including an increase in interest rates in the United States and some emerging countries, as well as increased vehicles with expired leases, but the business as a whole saw steady growth mainly due to the accumulated balance of earning assets. In fiscal 2020, the business was generally stable with a steady increase in the balance of earning assets and a decrease of interest rates in the United States and other countries; however, deteriorating future outlook due to the impact of COVID-19 was factored in at the end of the term. Under such circumstances, as a result of Toyota’s continued collaboration with dealers in various countries and regions and efforts to expand products and services that meet customer needs, Toyota’s share of financing provided for new car sales of Toyota and Lexus vehicles in regions where TFSC operates remained at a high level of approximately 35% and the balance of earning assets continued to steadily increase globally, with the exception of some countries. In addition, Toyota is making efforts to provide both its customers and dealers with stable financial services by diversifying its funding methods in recent years, such as issuing Green Bonds in addition to using already existing means as commercial paper, corporate bonds, bank borrowings, ABCP (Asset Backed Commercial Paper) and ABS (Asset Backed Securities). Furthermore, Toyota continued to perform detailed credit appraisals and serve customers by monitoring bad debt and loan payment extensions, and the percentage of credit losses remained low, at 0.29% and 0.27% in fiscal years 2020 and 2019, respectively. Toyota continues to work towards improving its risk management measures in connection with credit and residual value risks.

Toyota Motor Credit Corporation is Toyota’s principal financial services subsidiary in the United States. Toyota also provides financial services in 37 other countries and regions through various financial services subsidiaries, including:

• Toyota Finance Corporation in Japan;

• Toyota Credit Canada Inc. in Canada;

• Toyota Finance Australia Ltd. in Australia;

• Toyota Kreditbank GmbH in Germany;

• Toyota Financial Services (UK) PLC in the United Kingdom;

• Toyota Leasing (Thailand) Co., Ltd. in Thailand; and

• Toyota Motor Finance (China) Co., Ltd. in China.

Toyota Motor Credit Corporation provides a wide range of financial services, including retail financing, retail leasing, wholesale financing and insurance. Toyota Finance Corporation also provides a range of financial services, including retail financing, retail leasing and credit cards. Toyota’s other finance subsidiaries provide services including retail financing, retail leasing and wholesale financing.

In response to the the shift from “owning” cars to “using” cars, Toyota started a nationwide rollout of KINTO beloved-car subscription service at KINTO Corporation, which Toyota established in Japan in January 2019. Toyota is enhancing the provision of full service leasing in Europe through Toyota Fleet Mobility GmbH, which Toyota established in Germany in September 2018. Furthermore, Toyota developed and started provision of the payment application “TOYOTA Wallet” as a platform that contributes to improving the convenience of customers’ daily payments and creating a foundation for a mobility society.

Net finance receivables for all of Toyota’s dealer and customer financing operations were ¥17,038.0 billion as of March 31, 2020, representing an increase of 0.7% as compared to the previous year. The majority of Toyota’s financial services are provided in North America. As of March 31, 2020, 55.8% of Toyota’s finance receivables were derived from financing operations in North America, 13.0% from Asia, 12.6% from Europe, 8.8% from Japan and 9.8% from other areas.

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Approximately 45% of Toyota’s unit sales in the United States during fiscal 2020 included a finance or lease arrangement with Toyota. Because the majority of Toyota’s financial services operations are related to the sale of Toyota vehicles, a decrease in vehicle unit sales may lead to a contraction of Toyota’s financial services operations.

The worldwide financial services market is highly competitive. Toyota’s competitors in retail financing and retail leasing include commercial banks, credit unions and other finance companies. Commercial banks and other automobile finance subsidiary companies serving their parent automobile companies are competitors of Toyota’s wholesale financing activities. Competitors in Toyota’s insurance operations are primarily national and regional insurance companies.

For information on Toyota’s finance receivables and operating leases, please see “Operating and Financial Review and Prospects — Operating Results — Financial Services Operations.”

Retail Financing

Toyota’s finance subsidiaries acquire new and used vehicle installment contracts primarily from Toyota dealers. Installment contracts acquired must first meet specified credit standards. Thereafter, the finance company retains responsibility for installment payment collections and administration. Toyota’s finance subsidiaries acquire security interests in the vehicles financed and can generally repossess vehicles if customers fail to meet their contractual obligations. Almost all retail financings are non-recourse, which relieves the dealers from financial responsibility in the event of repossession. In most cases, Toyota’s finance subsidiaries require their retail financing customers to carry automobile insurance on financed vehicles covering the interests of both the finance company and the customer.

Toyota has historically sponsored, and continues to sponsor, special lease and retail programs by subsidizing below market lease and retail contract rates.

Retail Leasing

In the area of retail leasing, Toyota’s finance subsidiaries acquire new vehicle lease contracts originated primarily through Toyota dealers. Lease contracts acquired must first meet specified credit standards after which the finance company assumes ownership of the leased vehicle. The finance company is generally permitted to take possession of the vehicle upon a default by the lessee. Toyota’s finance subsidiaries are responsible for contract collection and administration during the lease period. The residual value is normally estimated at the time the vehicle is first leased. Vehicles returned to the finance subsidiaries at the end of their leases are sold by auction. For example, in the United States, vehicles are sold through a network of auction sites as well as through the Internet. In most cases, Toyota’s finance subsidiaries require lessees to carry automobile insurance on leased vehicles covering the interests of both the finance company and the lessee.

Wholesale Financing

Toyota’s finance subsidiaries also provide wholesale financing primarily to qualified Toyota dealers to finance inventories of new Toyota vehicles and used vehicles of Toyota and others. The finance companies acquire security interests in vehicles financed at wholesale. In cases where additional security interests would be required, the finance companies take dealership assets or personal assets, or both, as additional security. If a dealer defaults, the finance companies have the right to liquidate any assets acquired and seek legal remedies.

Toyota’s finance subsidiaries also make term loans to dealers for business acquisitions, facilities refurbishment, real estate purchases and working capital requirements. These loans are typically secured with liens on real estate, other dealership assets and/or personal assets of the dealers.

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Insurance

Toyota provides insurance services in the United States through Toyota Motor Credit Corporation’s wholly-owned subsidiary, Toyota Motor Insurance Services, Inc. (“TMIS”) and its wholly-owned insurance company subsidiaries. Their principal activities include marketing, underwriting and claims administration. TMIS also provides coverage related to vehicle service agreements through Toyota dealers to customers. In addition, TMIS also provides coverage and related administrative services to affiliated companies of Toyota Motor Credit Corporation. Toyota dealers in Japan and in other countries and regions also engage in vehicle insurance sales.

Other Financial Services

Toyota Finance Corporation launched its credit card business in April 2001 and began issuing Lexus credit cards in 2005 when the Lexus brand was introduced in Japan. As of March 31, 2020, Toyota Finance Corporation has 15.9 million card holders (including Lexus credit card holders).

All Other Operations

In addition to its automotive operations and financial services operations, Toyota is involved in a number of other non-automotive business activities. Net sales for these activities totaled ¥1,504.5 billion in fiscal 2020, ¥1,676.3 billion in fiscal 2019, and ¥1,646.1 billion in fiscal 2018.

Housing

Toyota established Toyota Housing Corporation (“THC”) as a subsidiary in April 2003 and transferred to it product planning and sales operations related to the manufacture and sale of housing. Furthermore, in April 2008, Toyota transferred the product development operation to THC. In October 2010, Toyota spun-off its housing operations (project planning, technology development and manufacturing) and integrated them into THC. In March 2005, Toyota, together with institutional investors, agreed to jointly invest in Misawa Home Holdings, Inc. (“Misawa Homes”; renamed Misawa Homes Co., Ltd.) pursuant to its request for assistance in its rehabilitation. In April 2010, determining that a stronger collaboration with Misawa Homes would be desirable in order to achieve further growth, THC agreed to purchase Misawa Homes shares from an institutional investor. In addition, Toyota transferred ownership of Misawa Homes to THC in October 2010. THC made Misawa Homes its subsidiary in January 2017 in order to strengthen competitiveness through their enhanced collaboration. Through these activities, Toyota strengthened its housing business.

In January 2020, Toyota and Panasonic Corporation (“Panasonic”) established Prime Life Technologies Corporation (“Prime Life Technologies”), a new joint venture related to the town development business. Both companies aim to fuse the “mobility services” initiatives promoted by Toyota and the “lifestyle updates” initiatives spearheaded by Panasonic through collaboration based on the establishment of the joint venture, thereby creating new value for the entire town as a whole.

As part of the establishment of Prime Life Technologies, Toyota, through THC, acquired approximately 49% of the shares in Misawa Homes which were owned by Misawa Homes’ shareholders other than THC by conducting a triangular share exchange. In addition, Toyota made THC its wholly-owned subsidiary through a number of transactions, including causing THC to acquire shares in THC from Toyota group companies and other parties, and thereafter transferred all of the shares in THC to Prime Life Technologies as part of a joint share transfer. To realize Prime Life Technologies’ mission of “achieving a lifestyle beyond imagination through future-oriented technologies,” Prime Life Technologies will bring about an unconventional yet more comfortable and convenient way of life, valuing safety and security for people, the environment and society.

Information Technology

See “— Enhancing Vehicle Functionality and Intelligent Transport Systems” for a description of Toyota’s information technology.

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Governmental Regulation, Environmental and Safety Standards

Toyota is inevitably required to comply with the regulations applied to its products relating to the emission levels, fuel economy, noise, safety and so on. In addition, Toyota is subject to laws in various jurisdictions regulating the levels of pollutants generated by its plants. Toyota has incurred significant costs in complying with these laws and regulations and expects to incur significant compliance costs in the future. Toyota’s management views leadership in environmental protection as an important competitive factor in the marketplace.

International Harmonization of Vehicle Regulations

The World Forum for Harmonization of Vehicle Regulations (WP.29) of the United Nations Economic Commission for Europe (UNECE) has developed certain international rules and regulations such as the UN Regulations (UNR) under the 1958 Agreement and the Global Technical Regulations (GTR) under the 1998 Agreement and has been working to promote international harmonization of the technical prescriptions for the construction and approval of wheeled vehicles. The UNR has been adopted in jurisdictions such as Japan, EU and Russia, and each participating party’s type approvals are mutually recognized under the 1958 Agreement. The parties to the 1998 Agreement include the U.S., China and India in addition to Japan, EU and Russia, and 20 Global Technical Regulations have been established to date. As the progress of the international harmonization of technical prescriptions will lead to the reduction of the variations in product specifications from country to country, it is expected to lead to greater efficiency in Toyota’s product development.

Vehicle Emissions

Japanese Standards

The Air Pollution Control Act of Japan and the Road Transport Vehicle Act and the Act Concerning Special Measures for Total Emission Reduction of Nitrogen Oxides and Particulate Matter from Automobiles in Specified Areas regulate vehicle emissions in Japan. In recent years, in addition to the strengthened regulations on particulate matters emitted from gasoline-fueled vehicles, as can be seen from the adoption of the Worldwide Harmonized Light Vehicles Test Procedure (WLTP) driving cycles and the introduction of the Real Driving Emission (RDE), more stringent regulations have been decided to be introduced to match the European Europe. Moreover, both the Noise Regulation Act and the Road Transport Vehicle Act provide for noise reduction standards on automobiles in Japan.

U.S. Federal Standards

The federal Clean Air Act directs the Environmental Protection Agency (“EPA”) to establish and enforce air quality standards, including emission control standards on passenger vehicles, light-duty trucks and heavy-duty vehicles. Manufacturers are not permitted to sell vehicles in the United States that do not meet the standards. In March 2014, the EPA finalized new “Tier 3” tailpipe emission and evaporative emission standards for passenger vehicles, light-duty trucks, medium-duty passenger vehicles and some heavy-duty vehicles. Under the rule, tailpipe emission standards for volatile organic compounds, carbon monoxide, nitrogen oxides, and particulate matter, as well as standards for evaporative emissions and guaranteed useful life (which relates to a vehicle’s ability to meet emission limits over time), would become increasingly stringent in phases from 2017 to 2025. The rule would bring federal emission standards for these pollutants in line with California’s emission standards.

The new Tier 3 rule also required reductions in gasoline’s sulfur content beginning in 2017.

California Standards

Under the federal Clean Air Act, the State of California has been permitted to establish its own vehicle emission control standards if it receives a waiver from the EPA that allow the California standards to preempt less-stringent federal standards. The EPA granted such a preemption waiver to California in January 2013. The

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waiver provides a legal basis for California’s mandate for zero-emission vehicles. Pursuant to the mandate, the CARB requires that a specified percentage of a manufacturer’s passenger vehicles and light-duty trucks sold in California be “zero-emission vehicles” (vehicles producing no emissions of regulated pollutants), as well as permits certain advanced technology vehicles such as PHVs, and alternative fuel vehicles that meet “partial zero-emission vehicles requirements,” to be granted partial qualification as EVs or FCVs. Toyota’s MIRAI qualifies as a zero-emission vehicle. The current Prius Prime has been certified as a partial zero-emission vehicle. Toyota intends to continue to develop additional advanced technologies and alternative fuel technologies that will allow other vehicles to qualify as zero-emission vehicles or partial-zero-emission vehicles.

In January 2012, the CARB adopted the Advanced Clean Cars (“ACC”) program. The ACC program, developed in coordination with the EPA and the federal National Highway Traffic Safety Administration (“NHTSA”), includes Low-Emission Vehicle (LEV) regulations, known as the LEV III regulations, that reduce emissions of smog-causing pollutants (volatile organic compounds, carbon monoxide, nitrogen oxides and particulate matter) and greenhouse gases from cars and light-duty trucks for model years 2015 to 2025. The regulations also include standards for evaporative emissions and guaranteed useful life.

California has adopted On-Board Diagnostics (OBD) regulations. The OBD regulations, which makes the detection of emission control system malfunctions mandatory, are the most stringent regulations in the world in terms of subject parts and regulatory values.

Other States’ Standards

Thirteen states (Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont and Washington) have adopted regulations substantially similar to California’s low-emission vehicle requirement, and eleven of these have adopted California’s zero-emission vehicle requirement. In September 2019, the Governors of Minnesota and New Mexico indicated that they planned to adopt California’s low vehicle emissions requirement as well.

Canadian Standards

Canada has finalized vehicle emission standards equivalent to the federal standards in the United States in October 2014, in response to the strengthening of the federal vehicle emission standards in the United States applicable to model years 2017 to 2025. Furthermore, certain Canadian provinces are currently considering enacting their own regulations. On January 11, 2018, the Ministry of Sustainable Development, Environment and the Fight against Climate Change of the Province of Quebec issued regulations on zero-emission vehicles including EVs, FCVs and PHVs, among others. In November 2018, the premier of British Columbia announced that the government would introduce legislation concerning zero-emission vehicles (indicating the phase-in introduction starting from model year 2020). Canada also adopted a more stringent fuel rule, which is based on the fuel rule in the United States, that reduces refineries’ annual average sulfur concentration of gasoline to 10mg/kg from 2017 with a new addition of credit system to secure compliance.

European Standards

In 2007, the European Parliament adopted more stringent emission standards for passenger vehicles and light commercial vehicles. The effective date for phasing in these stricter standards for passenger vehicles was September 2014 for Euro 6. For light commercial vehicles, the effective date was September 2015 for Euro 6.

The primary focus of Euro 6 is to limit further emissions of diesel powered vehicles and bring them down to a level equivalent to gasoline powered vehicles. In addition, Euro 6 is being implemented in two stages, and beginning with the second stage (September 2017 for passenger vehicles and September 2018 for commercial vehicles), the EU is implementing the Real Driving Emission (“RDE”) regulations, which requires manufacturers to conduct on-road emissions tests using portable emissions testers. Since September 2017, manufacturers have

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been required to reduce the divergence between the regulatory limit tested in laboratory conditions and the values of RDE tests. The EU has also decided to implement the Worldwide harmonized Light vehicles Test Procedure (WLTP), which were introduced on September 1, 2017 and will be phased in for all new cars between 2018 and 2019. The On-Board Diagnostics (OBD) regulations have also been tightened in terms of both subject parts and regulatory values. Effective January 1, 2019, the EU implemented an improved WLTP procedure that purports to eliminate test flexibilities and introduces on-board fuel and energy consumption monitoring devices.

Chinese Standards

The next-generation emissions regulations for passenger vehicles, or Level 6 Emissions Regulations (China 6), were issued as GB18352.6-2016 at the end of 2016, pursuant to which tighter requirements will be implemented in two steps, depending on the regulated subjects and the implementation timing. Specifically, China 6a will apply to all models to be sold or registered in July 2020 and beyond, and China 6b will apply to all models to be sold or registered in July 2023 and beyond. China 6b will also introduce the RDE Regulations adopted under Euro 6. The On-Board Diagnostics (OBD) regulations have also been tightened in terms of both subject parts and regulatory values. With respect to fuels in the market, the quality standards and the implementation from January 2019 for China 6 gasoline fuel and China 6 diesel fuel have been provided in GB17930-2016 and GB19147-2016 so as to keep up with the implementation timing of China 6 emissions regulations. Moreover, for areas where the air quality improvement is an urgent necessity, China 6 is scheduled to be implemented from July 2019 ahead of the implementation throughout China.

For heavy-duty diesel-powered commercial vehicles, pursuant to GB17691-2005, the China V Emissions Regulations are being implemented from July 2017. With the establishment of GB17691-2018, which provides next-level China VI Emissions Regulations (China VI), it has been decided that China VIa will be implemented from July 2021 and China VIb from July 2023 (these regulations will apply to gas-fueled vehicles and public vehicles for urban areas earlier than those dates). For heavy-duty gasoline-powered commercial vehicles, pursuant to GB14762-2008, Level IV Emissions Regulations (China IV) apply to new models after July 2012. After the first day the regulation is implemented to a new model, all new models released during the following one-year period also become subject to the regulation. Tightening of the next-generation emissions regulations (China V and China VI) is currently considered for heavy-duty gasoline-powered commercial vehicles.

Standards of Other Countries or Regions

In particular, in India, given the worsening air pollution, in December 2015, the Supreme Court banned the registration of diesel cars with engines that are two liters or larger in the National Capital Region, including the Delhi metropolitan area. In August 2016, the ban on registration was lifted on the condition that a deposit equal to 1% of the vehicle’s retail price is to be paid to the Environment Pollution Control Authority. Furthermore, the government accelerated the implementations of BS-6 (equivalent to EURO6) to 2020. Moreover, Thailand has also decided to introduce regulations equivalent to Euro 5 and Euro 6.

Vehicle Fuel Economy

Japanese Standards

The Act on Rationalizing Energy Use requires automobile manufacturers to improve their vehicles to meet specified fuel economy standards. Fuel economy standards are established according to the types of vehicles, and are required to be met by either fiscal 2011 (April 2010-March 2011), fiscal 2016 (April 2015-March 2016), fiscal 2021 (April 2020-March 2021), fiscal 2023 (April 2022-March 2023), fiscal 2026 (April 2025-March 2026) or fiscal 2031 (April 2030-March 2031). From 2020, if the WLTP mode is applied as a vehicle emissions test cycle, fuel economy test must be also conducted based on the WLTP mode.

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U.S. Standards

The Federal Motor Vehicle Information and Cost Savings Act requires automobile manufacturers to comply with CAFE standards. A manufacturer is subject to substantial civil penalties if, in any model year, its vehicles do not meet the CAFE standards. Manufacturers that exceed the CAFE standards earn credits determined by the difference between the average fuel economy performance of their vehicles and the CAFE standards. Credits earned for the five model years preceding the current model year, and credits projected to be earned for the next three model years, can be used to meet CAFE standards in a current model year.

In December 2011, the EPA and the NHTSA issued a joint proposed rule to further reduce greenhouse gas emissions and improve fuel economy for passenger vehicles, light-duty trucks and medium-duty passenger vehicles for model years 2017 through 2025. Pursuant to the rule, which was finalized in August 2012, these vehicles are required to meet an estimated combined average emission level of 163 grams of carbon dioxide per mile in model year 2025, equivalent to 54.5 miles per gallon if these requirements are met through improvements in fuel economy standards. At the same time, the NHTSA issued CAFE standards for passenger vehicles and light-duty trucks that would require manufacturers to meet an estimated combined average fuel economy level of 49.6 miles per gallon in model year 2025.

On August 24, 2018, however, the EPA and the NHTSA proposed the Safer Affordable Fuel Efficient (“SAFE”) rule, which was meant to replace the rule enacted in 2012 with less stringent greenhouse gas emission standards and CAFE standards. On September 27, 2019, the EPA and the NHTSA issued Part 1 of the final SAFE rule, which is also referred to as the One National Program rule. The One National Program rule withdraws California’s waiver to issue its own, more stringent greenhouse gas emission standards under the LEV III program. The One National Program rule also calls into question the validity of California’s zero emission vehicle mandate (and the other state laws adopting it.) On March 31, 2020, the EPA and NHTSA issued Part 2 of the final SAFE rule, which calls for a 1.5% annual increase in the stringency of greenhouse gas emissions and CAFE standards for cars and light trucks for model years 2021 through 2026, as opposed to the 5% annual increase called for in the prior rule enacted in 2012. The EPA and NHTSA project that average fuel economy for 2026 model year vehicles will be 40.4 miles per gallon, compared with 46.7 miles per gallon projected for 2025 model year vehicles under the previous rule enacted in 2012.

California has pledged, despite the SAFE rule, to maintain its more stringent greenhouse gas emission standards under the LEV III program as well as its zero-emissions vehicle mandate. On November 15, 2019, California, 22 other states, the District of Columbia, and the cities of Los Angeles and New York filed suit in the U.S. Court of Appeals for the District of Columbia to challenge the revocation, pursuant to the One National Program rule, of California’s waiver. Whatever the outcome, Toyota plans to meet applicable fuel economy standards by further developing fuel-efficient technology, alternative fuel technology and other advanced technology.

European Standards

In February 2014, the European Parliament and the Council of the European Union reduced the average carbon dioxide emissions target for light commercial vehicles to 147 grams per kilometer beginning in 2020. In March 2014, the European Parliament and the Council reduced the average carbon dioxide emissions target for passenger vehicles to 95 grams per kilometer beginning in 2021. 95% of each manufacturer’s new vehicles must comply with this new standard by 2020. Penalties apply to those manufacturers who fail to meet their targets, in amounts corresponding to the degree of shortfall. Manufacturers failing to meet their targets incur penalties of between €5 and €95 per each gram of carbon dioxide per kilometer shortfall for each non-compliant vehicle, and such penalties will rise to €95 from the first gram of exceedance onwards in 2019 and beyond.

In April 2019, the European Parliament and the Council adopted new carbon dioxide standards for cars and light commercial vehicles for the period after 2020. Average emissions of the EU fleet of new cars and light

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commercial vehicles in 2025 must be 15% lower than in 2021, and by 2030, emissions must be reduced further to 37.5% and 31% of 2021 levels for cars and light commercial vehicles, respectively. Starting from 2021, the emissions targets will be tested using the WLTP procedures. From 2025, a crediting system will be introduced to relax a manufacturer’s specific carbon dioxide emissions targets where the manufacturer produces numbers of “zero and low-emission vehicles” above specified benchmarks.

An EU directive on motor vehicle air conditioning units requires manufacturers to replace the refrigerants with that having a lower global warming impact for all newly registered vehicles starting in January 2017.

Chinese Standards

Fuel consumption regulations are being implemented pursuant to the Chinese National Standards (“GB”), and the manufacture and sale of vehicle models not meeting these regulations are prohibited. For light-duty passenger vehicles, GB27999-2011 was issued. In these Level 3 Fuel Consumption Regulations for passenger cars, the regulation framework was substantially revised, such as the introduction of new regulations requiring automobile manufacturers to meet standards of corporate average fuel consumption across models in addition to existing regulations requiring each model to meet consumption standards. Furthermore, in order to achieve the national target for average fuel efficiency for 2020, the following more stringent fuel consumption regulations have been enacted and enforced. First, GB19578-2014, which has been enacted to strengthen regulations for each model, is being applied to new models after January 2016. Second, GB27999-2014, which has been enacted as Level 4 Fuel Consumption Regulations for passenger vehicles to strengthen corporate average regulations, has been in effect since 2016. In addition, Level 5 Fuel Consumption Regulations for passenger vehicles are being examined as more stringent next-generation fuel consumption regulations. For light-duty commercial vehicles, GB20997-2015 was enacted, which further applied Level 3 Fuel Consumption Regulations to all new vehicles from January 2018 and is currently being enforced.

With respect to large commercial vehicles, pursuant to GB30510-2014, Level 2 Fuel Consumption Regulations apply to new vehicles from July 2014 and are currently being enforced. In addition, in an effort to further strengthen fuel consumption regulations, GB30510-2018 was enacted, pursuant to which Level 3 Fuel Consumption Regulations are scheduled to be applied to new vehicles from July 2019.

Vehicle Safety

Japanese Standards

Japan has been participating in the 1958 Agreement of the UN and has a number of technical standards that are harmonized with the UN Regulations.

Furthermore, unique to Japan, the safety standards for automated driving systems were established in March 2020, requiring, in addition to a certain level of performance of automated driving system, the installation of an event data recorder and cyber security measures against unauthorized access. In addition, a certification program was introduced in April 2020 with respect to the system to control sudden acceleration by mixing up the gas and brake pedals as well as the collision damage mitigation brake system.

In addition, fuel-cell vehicles using compressed hydrogen are subject to the approval and control under the High Pressure Gas Safety Act in addition to the Road Vehicles Act.

U.S. Standards

In the U.S., in light of the Executive Order issued by President Trump on January 30, 2017, few safety standards providing new technical requirements have been issued. With respect to automated driving vehicles, the policy guidance Automated Driving System 2.0 issued by the U.S. Department of Transportation in

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September 2017 recommends the submission and publication of the Voluntary Safety Self-Assessment. Moreover, with respect to the operation of automated driving vehicles, California and many other states have adopted an approval system, so it must be compliant with regulations and systems that vary from state to state.

European Standards

In December 2019, the EU issued the revised General Safety Regulation to tighten the requirements concerning safety and the protection of vehicle occupants and vulnerable road users. This revised General Safety Regulation will make certain vehicle safety equipment mandatory in stages starting 2022, including: advanced emergency braking, emergency lane keeping systems, driver drowsiness and attention warning, intelligent speed assistance, reversing detection systems, tire pressure monitoring systems, and data recorders in case of an accident (“event data recorders”). In relation to this, various UN Regulations are being developed, but it is provided that the equipment for which UN Regulations have not been developed, EU will establish its own technical standards.

Furthermore, a major overhaul of the EU-type approval framework for motor vehicles was issued in May 2018. The new regulation purports to raise the quality and independency of vehicle type-approval and testing, to increase checks of vehicles that are already on the EU market, and to strengthen European Commission oversight of the framework. It becomes mandatory for all new vehicle models as of September 1, 2020. Automated driving vehicles must obtain exemption under this framework.

United Nations Standards

The United Nations restructured the existing working parties and established the Working Party on Automated/Autonomous and Connected Vehicles (GRVA) that is dedicated to the development of regulations on automated driving. The GRVA is developing regulations covering functional safety requirements, new evaluation test method requirements, cybersecurity, software updates, data recording for automated driving vehicles and data recording in case of an accident. It is expected that the new regulations on cyber security, software updates and automated lane keeping system will be adopted in June 2020.

Chinese Standards

Vehicle safety regulations in China were in general established having regard to the UN regulations. However, China’s own national technical standards on functions such as batteries, motors, the charging and remote surveillance of EVs have been made mandatory. Fuel-cell vehicles are subject to the supervising regulations on the safety of high pressure gas in addition to the vehicle type approval requirement. Moreover, in accordance with the Made in China 2025 policy, more than 100 standards for intelligent connected vehicles (ICV) are being developed (including automation, telecommunication and security).

Environmental Matters

Japanese Standards

Toyota’s automotive operations in Japan are subject to substantial environmental regulation under laws such as the Air Pollution Control Act the Water Pollution Prevention Act, the Noise Regulation Act and the Vibration Control Act. Under these laws, if a business entity establishes or alters any facility that is regulated by these laws, the business entity is required to give prior notice to regulators, and if a business entity discharges, uses or stores substances that are environmental burdens or causes noise or vibration from such facility, the business entity is also required to comply with the applicable standards. Toyota is also subject to local regulations, which in some cases impose more stringent obligations than the Japanese central government requirements. Toyota has complied with these regulations. Under the Waste Management and Public Cleansing Act, producers of industrial waste must dispose of industrial waste in the manner prescribed in the same act. Toyota has also complied with the same act.

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The Soil Contamination Countermeasures Act of Japan requires that land owners conduct contamination testing and submit a report at the time they cease to use hazardous substances, such as in connection with the sale of a former factory, or if there is a possibility of health hazards due to land contamination. If it is found that land contamination exceeds a certain level, the relevant prefectural authority designates the area as considered to be contaminated, orders the land owner to submit a plan for decontamination (such plan must describe the measures to be taken in the area, the reasons therefor, and the deadline for implementing such measures, etc.), and has the land owner take such measures in accordance with such plan. Toyota is suitably managing its land in accordance with the same law. In addition, under the Act on Recycling, etc. of End-of-Life Vehicles, vehicle manufacturers are required to take back and recycle specified materials (automotive shredder residues, air bags and fluorocarbons) of end-of-life vehicles and the provisions concerning such obligations of vehicle manufacturers became effective in January 2005. Toyota has coordinated with relevant parties to establish a vehicle take-back and recycle system throughout Japan. As a result, in fiscal 2019, Toyota achieved a recycling/recovery rate of 97% for automobile shredder residue (the legal requirement being 70%) and 94% for air bags (the legal requirement being 85%) and reached the targets set forth in this law.

U.S. Standards

Toyota’s assembly, manufacturing and other operations in the United States are subject to a wide range of environmental regulation under the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the Pollution Prevention Act of 1990 and the Toxic Substances Control Act. Toyota is also subject to a variety of state legislation that parallels, and in some cases imposes more stringent obligations than, federal requirements. These federal and state regulations impose severe restrictions on air- and water-borne discharges of pollution from Toyota facilities, and stringent requirements governing the handling of hazardous materials at Toyota facilities and the disposal of wastes from Toyota operations. Toyota is subject to many similar requirements in its operations in Europe, Canada and other countries.

Pursuant to the Clean Air Act, the EPA has promulgated National Ambient Air Quality Standards (“NAAQS”) for six “criteria” pollutants, including for ozone and particulate matter. The Clean Air Act requires that the EPA review and possibly revise these NAAQS every five years. On December 14, 2012, the EPA made the annual health-based particulate matter NAAQS more stringent. On October 1, 2015, the EPA made the annual health-based and welfare-based ozone NAAQS more stringent. The revised annual health-based particulate matter NAAQS and the revised annual health-based and welfare-based ozone NAAQS, as well as any future NAAQS revisions, could lead to additional pollution control requirements on the industry, including on Toyota’s manufacturing operations.

Toyota expects growing pressure in the next several years to further reduce emissions from motor vehicles and manufacturing facilities.

European Standards

In 2014, the EU adopted a regulation to reduce noise produced by cars, vans, buses, coaches and light and heavy trucks. Noise limit values must ultimately be lowered by four A-weighted decibels for vehicles other than trucks, and three A-weighted decibels for trucks. Compliance must be achieved in three steps over a ten to twelve year period.

Toyota believes that its operations are materially in compliance with environmental regulatory requirements concerning its facilities and products in each of the markets in which it operates. Toyota continuously monitors these requirements and takes necessary operational measures to ensure that it remains in material compliance with all of these requirements.

Toyota believes that environmental regulatory requirements have not had a material adverse effect on its operations. However, compliance with environmental regulations and standards has increased costs and is expected to lead to higher costs in the future. Therefore, Toyota recognizes that effective environmental cost

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management will become increasingly important. Moreover, innovation and leadership in the area of environmental protection are becoming increasingly important to remain competitive in the market. As a result, Toyota has proceeded with the development and production of environmentally friendly technologies, such as hybrid vehicles, FCVs and high fuel efficiency, low emission engines.

In addressing environmental issues, based on an assessment of the environmental impact of its products through their entire life cycles, from production through sales, disposal and recycling, Toyota, as a manufacturer, strives to take all possible measures from development stage and continues to work towards technological innovations to make efficient use of resources and to reduce the burden on the environment.

Disclosure of Iranian Activities under Section 13(r) of the Securities Exchange Act of 1934

None.

Research and Development

The overriding goals of Toyota’s technology and product development activities are to minimize the negative aspects of cars, such as traffic accidents and impact on the environment, and maximize the positive aspects, such as driving pleasure, comfort and convenience. By achieving these sometimes conflicting goals to a high degree, Toyota seeks to open the door to the automobile society of the future. To ensure efficient progress in research and development activities, Toyota coordinates and integrates all research and development phases, from basic research and advanced research to forward-looking technology and product development. With respect to long-term basic research in areas such as energy, the environment, information technology, telecommunications and materials, projects are regularly reviewed and evaluated in consultation with outside experts to achieve research and development cost control. With respect to forward-looking, leading-edge technology and product development, Toyota establishes cost-performance benchmarks on a project-by-project basis to ensure efficient development investment.

The chart below provides an overview of Toyota’s R&D at each phase.

Basic research	Phase to discover development theme Research on basic vehicle-related technology
Forward-looking and leading-edge technology development	Phase requiring technological breakthroughs such as components and systems Development of leading-edge components and systems that are more advanced than those of competitors
Product development	Phase mainly for development of new models Development of all-new models and existing-model upgrades

Toyota is promoting research and development into the early commercialization of next generation environmentally friendly, energy-efficient and safe-vehicle technology. Toyota is also moving forward with the development of innovative technologies such as electrification, connected vehicles and automated driving so as to realize a mobility society of the future that enables everyone to enjoy freedom of movement beyond the conventional concept of vehicles. To this end, Toyota is focusing on the following areas:

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

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

• development of EVs, FCVs and other alternative fuel vehicles;

• development of advanced safety technology designed to promote driving and vehicle safety;

• development of automated driving technologies

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• connected car technologies; and

• development of technology to bring about more comfortable travel (driving).

For a detailed discussion of the company’s research and development infrastructure, see “Operating and Financial Review and Prospects — Research and Development, Patents and Licenses.”

Components and Parts, Raw Materials and Sources of Supply

Toyota purchases parts, components, raw materials, equipment and other supplies from multiple competing suppliers located around the world. Toyota works closely with its suppliers to pursue optimal procurement. Toyota believes that this policy encourages technological innovation, cost reduction and other measures to strengthen its vehicle competitiveness. Toyota plans to continue purchases based on the same principle and does not anticipate any difficulty in obtaining stable supplies in the foreseeable future. For example, in 2019, Japan suffered major flooding caused by Typhoon Hagibis, but the operations of Toyota were not affected thanks to utmost efforts with all Toyota suppliers to realize early restoration of damaged local areas and suppliers, as well as alternative production by other suppliers. In 2020, the impact of COVID-19 spread globally and has had an effect on the purchase by Toyota of some parts. In order to minimize the impact, Toyota is studying alternative production methods, working together with all of its suppliers.

Because Toyota had more than 50 overseas operations in 27 countries and regions as of March 31, 2020, procurement of parts and components is being carried out not only locally in the country of the production site but also from third countries. As a result, the distribution network has become increasingly complex. In order to realize timely and efficient distribution while minimizing costs, Toyota is promoting efforts to optimize each stage of the supply chain. To this end, Toyota has developed a standardized system of global distribution and is supporting the operation of the system at each production base. The use of the global distribution system aims at implementing parts procurement that meets changes in vehicle production in a timely manner. These varying efforts, combined together, have led to maximized customer satisfaction, as well as to building a good working relationship with Toyota’s suppliers.

Toyota aims to share information and collaborate among the procurement divisions in each of the regions throughout the world in order to procure parts and materials from the most competitive suppliers among Toyota factories located in various areas worldwide. At the same time, Toyota carries out streamlining efforts together with suppliers in each country in order to achieve sustainable growth. Toyota has been working on cost reduction measure, referred to as RR-CI and VA activities. Through RR-CI activities, which are conducted in conjunction with TNGA, Toyota aims to ensure cost competitiveness through such means as thorough localization, sharing parts and components and manufacturing reforms, together with producing products matching customers’ needs in each region and vehicle category, and reinforcing activities from a medium- to long-term perspective as the third phase of RR-CI. Toyota has been continuously working on VA (value analysis) activities for the various types of vehicles already on sale in collaboration with in-house vehicle companies. In pursuit of cost reduction, Toyota focuses on “developing a real cost-competitive structure” by working together with suppliers.

In the raw material market during 2019, the impact of coordinated production cuts resulted in prices for crude oil and naptha-related products to remain high like last year, and the increase in actual demand for raw materials for automobiles also pushed up the prices of precious metals (palladium and rhodium) even higher. Furthermore, market prices of steel increased against the backdrop of higher material costs. Due to the impact of the COVID-19 from early 2020, the direction of prices of raw material is unforeseeable. Toyota is continually promoting cost reduction activities, such as the optimization of requirements for quality and packaging and reducing redundancies by reviewing the entire supply chain.

Intellectual Property

Toyota holds numerous Japanese and foreign patents, trademarks, design patents and some utility model registrations. It also has a number of applications pending for Japanese and foreign patents. While Toyota

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considers all of its intellectual property to be important, it does not consider any specific subset of its patents, trademarks, design patents or utility model registrations to be so important that their expiration or termination would materially affect Toyota’s business.

Capital Expenditures and Divestitures

Set forth below is a chart of Toyota’s principal capital expenditures between April 1, 2017 and March 31, 2020, the approximate total costs of such activity, as well as the location and method of financing of such activity, presented on a “by subsidiary” basis and as reported in Toyota’s annual Japanese securities report filed with the director of the Kanto Local Finance Bureau.

Description of Activity	Total Cost (Yen in billions)		Location	Primary Method of Financing
Japan
Investment primarily in technology and products by Toyota Motor Corporation		1,080.6	Japan	Internal funds, financing from issuance of bonds, etc.
Investment primarily in technology and products by Toyota Motor Kyushu, Inc.		108.1	Japan	Internal funds
Investment primarily in technology and products by Toyota Auto Body Co., Ltd.		93.9	Japan	Internal funds
Investment primarily in technology and products by Primearth EV Energy Co., Ltd.		92.4	Japan	Borrowings
Investment primarily in technology and products by Daihatsu Motor Co., Ltd.		85.3	Japan	Internal funds
Investment primarily in technology and products by Hino Motors, Ltd.		79.7	Japan	Internal funds
Outside of Japan
Investment primarily to promote localization by Toyota Motor Manufacturing, Indiana, Inc.		202.6	United States	Internal funds
Investment primarily to promote localization by Toyota Motor Manufacturing Kentucky, Inc.		167.4	United States	Internal funds
Investment primarily to promote localization by Toyota Motor Manufacturing, Canada, Inc.		143.8	Canada	Internal funds
Investment primarily to promote localization by Toyota do Brazil Ltda.		109.5	Brazil	Internal funds
Investment primarily to promote localization by Toyota Motor Thailand Co., Ltd.		106.1	Thailand	Internal funds
Investment primarily to promote localization by Toyota Motor Europe NV/SA		81.5	Belgium	Internal funds
Investment primarily to promote localization by Toyota Motor Manufacturing Mississippi, Inc.		70.3	United States	Internal funds
Investment primarily to establish office facilities by Toyota Motor North America, Inc.		57.7	United States	Internal funds
Investment primarily in leased automobiles by Toyota Motor Credit Corporation		5,875.9	United States	Internal funds, financing from issuance of bonds, etc.

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Set forth below is information with respect to Toyota’s material plans to construct, expand or improve its facilities between April 2020 and March 2021, presented on a “by subsidiary” basis and as reported in Toyota’s annual Japanese securities report filed with the director of the Kanto Local Finance Bureau.

Description of Activity	Total Cost (Yen in billions)		Location		Primary Method of Financing
Japan
Investment primarily in manufacturing facilities by Toyota Motor Corporation		350.0		Japan		Internal funds
Investment primarily in manufacturing facilities by Daihatsu Motor Co., Ltd.		70.8		Japan		Internal funds
Investment primarily in manufacturing facilities by Toyota Auto Body Co., Ltd.		41.9		Japan		Internal funds
Investment primarily in manufacturing facilities by Primearth EV Energy Co., Ltd.		38.4		Japan		Borrowings
Outside of Japan
Investment primarily in manufacturing facilities by Toyota Motor Manufacturing, Indiana, Inc.		105.9		United States		Internal funds
Investment primarily in manufacturing facilities by Toyota Motor Europe NV/SA		44.2		Belgium		Internal funds

Set forth below is additional information with respect to Toyota’s material plans to construct, expand or improve its facilities.

In Mexico, Toyota established a new plant (TMMGT) with annual capacity of 100 thousand units in Guanajuato, which started operations in December 2019. In the United States, Toyota plans to construct a new joint-manufacturing plant with Mazda in 2021. Toyota also plans to start new production lines of hybrid transaxles with annual capacity of 200,000 units in its West Virginia plant during 2020 and 2021. In Alabama, Toyota will increase annual engine production capacity by 230,000 units by the end of 2021.

Toyota does not collect information on the amount of expenditures already paid for each plant under construction because Toyota believes that it is difficult and it would require unreasonable effort or expense to identify and categorize each expenditure item with reasonable accuracy as past and future expenditures. Toyota’s construction projects consist of numerous expenditures, each of which is continually being adjusted and incurred in variable and constantly changing amounts as part of the overall work-in-progress.

Seasonality

Toyota does not consider its seasonality material in the sense of significantly higher sales during any certain period of the year as compared to other periods of the year.

Legal Proceedings

From time-to-time, Toyota issues vehicle recalls and takes other safety measures including safety campaigns relating to its vehicles. Since 2009, Toyota has issued safety campaigns related to the risk of floor mat entrapment of accelerator pedals and vehicle recalls related to slow-to-return or sticky accelerator pedals. Personal injury and wrongful death claims involving allegations of unintended acceleration are still pending in consolidated proceedings in federal and California state courts, as well as in individual cases in various other states. The judges in the consolidated federal action and the consolidated California state action have approved an Intensive Settlement Process (“ISP”) for such claims in those actions. Under the ISP, all individual claims within the consolidated actions remain pending completion of a process to assess whether they can be resolved

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on terms acceptable to the parties. Cases not resolved after completion of the ISP will then proceed to discovery and toward trial. Toyota has offered the ISP to plaintiffs in individual cases as well. While the ISP is ongoing, a majority of the claims in the consolidated actions and the individual cases are in settlement discussions or have been settled. Toyota believes that the remaining claims in the consolidated actions and the individual cases will not have a material effect on Toyota’s financial position, results of operations or cash flows.

Toyota has been named as a defendant in 33 economic loss class action lawsuits in the United States, which, together with similar lawsuits against Takata and other automakers, have been made part of a multi-district litigation proceeding in the United States District Court for the Southern District of Florida, arising out of allegations that airbag inflators manufactured by Takata are defective. Toyota has reached a settlement with the plaintiffs in the United States economic loss class actions. The court approved the settlement on October 31, 2017, and subsequent appeals have been withdrawn, making the settlement final. The economic loss class action lawsuits against Toyota have been dismissed. Toyota and other automakers have also been named in certain class actions filed in Mexico, Canada, Australia, Israel and Brazil, as well as some other actions by states or territories of the United States. The remaining actions in Mexico, Australia, Israel, Brazil and some other actions by states or territories of the United States are being litigated.

Toyota has self-reported a process gap in fulfilling certain emissions defect information reporting requirements of the U.S. Environmental Protection Agency (“EPA”) and California Air Resources Board, including updates on its repair completion rates for recalled emissions components and certain other reports concerning emissions related defects. Toyota is cooperating with civil investigations by the EPA and the Civil Division of the Southern District of New York (“SDNY”) on this reporting issue and continues to have discussions with the EPA and the SDNY. The investigations could result in the imposition of civil penalties, fines or other sanctions, or litigation by the SDNY or the EPA.

Toyota also has various other pending legal actions and claims, including without limitation personal injury and wrongful death lawsuits and claims in the United States, and is subject to government investigations from time to time.

Beyond the amounts accrued with respect to all aforementioned matters, Toyota is unable to estimate a range of reasonably possible loss, if any, for the pending legal matters because (i) many of the proceedings are in evidence gathering stages, (ii) significant factual issues need to be resolved, (iii) the legal theory or nature of the claims is unclear, (iv) the outcome of future motions or appeals is unknown and/or (v) the outcomes of other matters of these types vary widely and do not appear sufficiently similar to offer meaningful guidance. Therefore, for all of the aforementioned matters, which Toyota is in discussions to resolve, any losses that are beyond the amounts accrued could have an adverse effect on Toyota’s financial position, results of operations or cash flows.

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4.C ORGANIZATIONAL STRUCTURE

As of March 31, 2020, Toyota Motor Corporation had 219 Japanese subsidiaries and 309 overseas subsidiaries. The following table sets forth for each of Toyota Motor Corporation’s principal subsidiaries, the country of incorporation and the percentage ownership interest and the voting interest held by Toyota Motor Corporation.

Name of Subsidiary	Country of Incorporation	Percentage Ownership Interest		Percentage Voting Interest
Toyota Financial Services Corporation	Japan		100.00		100.00
Hino Motors, Ltd.	Japan		50.21		50.28
Toyota Motor Kyushu, Inc.	Japan		100.00		100.00
Daihatsu Motor Co., Ltd.	Japan		100.00		100.00
TOYOTA Mobility Tokyo Inc.	Japan		100.00		100.00
Toyota Finance Corporation	Japan		100.00		100.00
Toyota Auto Body Co., Ltd.	Japan		100.00		100.00
Toyota Motor East Japan, Inc.	Japan		100.00		100.00
Daihatsu Motor Kyushu Co., Ltd.	Japan		100.00		100.00
Toyota Motor Engineering & Manufacturing North America, Inc.	United States		100.00		100.00
Toyota Motor Manufacturing, Kentucky, Inc.	United States		100.00		100.00
Toyota Motor North America, Inc.	United States		100.00		100.00
Toyota Motor Credit Corporation	United States		100.00		100.00
Toyota Motor Manufacturing, Indiana, Inc.	United States		100.00		100.00
Toyota Motor Manufacturing, Texas, Inc.	United States		100.00		100.00
Toyota Motor Sales, U.S.A., Inc.	United States		100.00		100.00
Toyota Motor Manufacturing de Baja California, S. de R.L. de C.V.	Mexico		100.00		100.00
Toyota Motor Manufacturing Canada Inc.	Canada		100.00		100.00
Toyota Credit Canada Inc.	Canada		100.00		100.00
Toyota Canada Inc.	Canada		51.00		51.00
Toyota Motor Europe NV/SA	Belgium		100.00		100.00
Toyota Motor Manufacturing France S.A.S.	France		100.00		100.00
Toyota Kreditbank GmbH	Germany		100.00		100.00
Toyota Motor Finance (Netherlands) B.V.	Netherlands		100.00		100.00
Toyota Motor Manufacturing (UK) Ltd.	United Kingdom		100.00		100.00
Toyota Financial Services (UK) PLC	United Kingdom		100.00		100.00
Toyota (GB) PLC	United Kingdom		100.00		100.00
Toyota Motor Manufacturing Turkey Inc.	Turkey		90.00		90.00
OOO “TOYOTA MOTOR”	Russia		100.00		100.00
Toyota Motor (China) Investment Co., Ltd.	China		100.00		100.00
Toyota Motor Finance (China) Co., Ltd.	China		100.00		100.00
P.T. Astra Daihatsu Motor	Indonesia		61.75		61.75
P.T. Toyota Motor Manufacturing Indonesia	Indonesia		95.00		95.00
Toyota Motor Asia Pacific Pte Ltd.	Singapore		100.00		100.00
Toyota Leasing (Thailand) Co., Ltd.	Thailand		87.16		87.16
Toyota Motor Thailand Co., Ltd.	Thailand		86.43		86.43
Toyota Daihatsu Engineering & Manufacturing Co., Ltd.	Thailand		100.00		100.00
Toyota Motor Corporation Australia Ltd.	Australia		100.00		100.00
Toyota Finance Australia Ltd.	Australia		100.00		100.00
Toyota Argentina S.A.	Argentina		100.00		100.00
Toyota do Brasil Ltda.	Brazil		100.00		100.00
Toyota South Africa Motors (Pty) Ltd.	South Africa		100.00		100.00

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4.D PROPERTY, PLANTS AND EQUIPMENT

As of March 31, 2020, Toyota and its affiliated companies produced automobiles and related components through more than 50 overseas manufacturing organizations in 27 countries and regions besides Japan. The facilities are located principally in Japan, the United States, Canada, the United Kingdom, France, Turkey, Czech Republic, Russia, Poland, Thailand, China, Taiwan, India, Indonesia, South Africa, Argentina and Brazil.

In addition to its manufacturing facilities, Toyota’s properties include sales offices and other sales facilities in major cities, repair service facilities and research and development facilities.

The following table sets forth information, as of March 31, 2019, with respect to Toyota’s principal facilities and organizations, all of which are owned by Toyota Motor Corporation or its subsidiaries. However, small portions, all under approximately 20%, of some facilities are on leased premises.

Facility or Subsidiary Name	Location	Land Area (thousand square meters)		Number of Employees		Principal Products or Functions
Japan (Toyota Motor Corporation)
Tahara Plant	Tahara City, Aichi Pref.		4,032		6,503	Automobiles
Toyota Technical Center Shimoyama	Toyota City, Aichi Pref.		3,736		39	Research and Development
Toyota Head Office and Technical Center	Toyota City, Aichi Pref.		2,766		23,621	Research and  Development
Higashi-Fuji Technical Center	Susono City, Shizuoka Pref.		2,719		3,043	Research and Development
Motomachi Plant	Toyota City, Aichi Pref.		1,574		7,806	Automobiles
Takaoka Plant	Toyota City, Aichi Pref.		1,317		4,364	Automobiles
Kamigo Plant	Toyota City, Aichi Pref.		894		3,105	Automobile parts
Kinu-ura Plant	Hekinan City, Aichi Pref.		808		2,896	Automobile parts
Honsha Plant	Toyota City, Aichi Pref.		622		2,203	Automobile parts
Nagoya Office	Nagoya City, Aichi Pref.		5		2,508	Office
Japan (Subsidiaries)
TOYOTA Mobility Tokyo Inc.	Minato-ku, Tokyo, etc.		341		6,814	Sales facilities
Hino Motors, Ltd.	Hino City, Tokyo, etc.		6,283		12,805	Automobiles
Daihatsu Motor Co., Ltd. .	Ikeda City, Osaka, etc.		7,746		11,444	Automobiles
Toyota Auto Body Co., Ltd.	Kariya City, Aichi Pref., etc.		2,269		11,300	Automobiles
Toyota Motor Kyushu, Inc.	Miyawaka City, Fukuoka Pref., etc.		1,949		8,262	Automobiles
Outside Japan (Subsidiaries)
Toyota Motor Manufacturing, Kentucky, Inc.	Kentucky, U.S.A.		5,161		7,795	Automobiles
Toyota Motor Manufacturing, Indiana, Inc.	Indiana, U.S.A.		4,359		5,928	Automobiles
Toyota Motor Manufacturing Canada, Inc.	Ontario, Canada		4,752		7,508	Automobiles
Toyota Motor Thailand Co., Ltd.	Samutprakan, Thailand		4,414		9,818	Automobiles
Toyota Motor Sales, U.S.A., Inc.	Texas, U.S.A.		3,267		5,019	Sales facilities

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Toyota is constantly engaged in upgrading, modernizing and revamping the operations of its manufacturing facilities based on its assessment of market needs and prospects. To respond flexibly to fluctuations in demand in each of its production operations throughout the world, Toyota continually reviews and implements appropriate production measures such as revising takt time and adjusting days of operation. As a result, Toyota believes it would require unreasonable effort to track the exact productive capacity and the extent of utilization of each of its manufacturing facilities with a reasonable degree of accuracy.

As of March 31, 2020, property, plant and equipment having a net book value of approximately ¥644.3 billion was pledged as collateral securing indebtedness incurred by Toyota Motor Corporation’s consolidated subsidiaries. Toyota believes that there does not exist any material environmental issues that may affect the company’s utilization of its assets.

Toyota considers all its principal manufacturing facilities and other significant properties to be in good condition and adequate to meet the needs of its operations.

See “— Business Overview — Capital Expenditures and Divestitures” for a description of Toyota’s material plans to construct, expand or improve facilities.

ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

5.A OPERATING RESULTS

Financial information discussed in this section is derived from Toyota’s consolidated financial statements that appear elsewhere in this annual report. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America.

Overview

The business segments of Toyota include automotive operations, financial services operations and all other operations. Automotive operations are Toyota’s most significant business segment, accounting for 88% of Toyota’s total revenues before the elimination of intersegment revenues for fiscal 2020. Toyota’s primary markets based on vehicle unit sales for fiscal 2020 were: Japan (25.0%), North America (30.3%), Europe (11.5%) and Asia (17.9%).

Automotive Market Environment

The worldwide automotive market is highly competitive and volatile. The demand for automobiles is affected by a number of factors including social, political and general economic conditions; introduction of new vehicles and technologies; and costs incurred by customers to purchase or operate vehicles. These factors can cause consumer demand to vary substantially in different geographic markets and for different types of automobiles.

During fiscal 2020, automotive markets slumped in China and some emerging countries, but remained stable in developed countries and declined only slightly in the world as a whole. However, COVID-19 has begun to have a major impact, leading to the suspension of operations at factories and the suspension of business at dealers worldwide.

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The following table sets forth Toyota’s consolidated vehicle unit sales by geographic market based on location of customers for the past three fiscal years.

	Thousands of units
	Year Ended March 31,
	2018		2019		2020
Japan		2,255		2,226		2,240
North America		2,806		2,745		2,713
Europe		968		994		1,029
Asia		1,543		1,684		1,605
Other*		1,392		1,327		1,372
Overseas total		6,709		6,751		6,719
Total		8,964		8,977		8,958

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

During fiscal 2019, Toyota’s consolidated vehicle unit sales in Japan decreased compared to the previous fiscal year, while during fiscal 2020, vehicle unit sales in Japan increased primarily as a result of the active introduction of new products and the efforts of dealers nationwide. For fiscal 2019 and fiscal 2020, the Toyota and Lexus brands’ market share excluding mini-vehicles in Japan was 45.9% and a record high of 48.8%, and the market share (including Daihatsu and Hino brands) including mini-vehicles was 43.6% and a record high of 45.5%, each remaining at a high level, consistent with the previous fiscal year. Overseas consolidated vehicle unit sales increased as a whole during fiscal 2019, due mainly to increases in Asia and Europe, while vehicle unit sales decreased as a whole during fiscal 2020, due mainly to decreases in Asia and North America, despite an increase in Europe and Other. Toyota’s consolidated vehicle unit sales for fiscal 2020 reflects a 127 thousand unit negative impact from the effects of the global spread of COVID-19.

Toyota’s share of total vehicle unit sales in each market is influenced by the quality, safety, reliability, price, design, performance, economy and utility of Toyota’s vehicles compared with those offered by other manufacturers. The timely introduction of new or redesigned vehicles is also an important factor in satisfying customer needs. Toyota’s ability to satisfy changing customer preferences can affect its revenues and earnings significantly.

The profitability of Toyota’s automotive operations is affected by many factors. These factors include:

• vehicle unit sales volumes,

• the mix of vehicle models and options sold,

• the level of parts and service sales,

• the levels of price discounts and other sales incentives and marketing costs,

• the cost of customer warranty claims and other customer satisfaction actions,

• the cost of research and development and other fixed costs,

• the prices of raw materials,

• the ability to control costs,

• the efficient use of production capacity,

• the adverse effect on production due to the reliance on various suppliers for the provision of supplies,

• the adverse effect on market, sales and productions of natural calamities as well as the outbreak and spread of epidemics and interruptions of social infrastructure, and

• changes in the value of the Japanese yen and other currencies in which Toyota conducts business.

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Changes in laws, regulations, policies and other governmental actions can also materially impact the profitability of Toyota’s automotive operations. These laws, regulations and policies include those attributed to environmental matters, vehicle safety, fuel economy and emissions that can add significantly to the cost of vehicles.

Many governments also impose local content requirements, impose tariffs and other trade barriers, and enact price or exchange controls that can limit an automaker’s operations and can make the repatriation of profits unpredictable. Changes in these laws, regulations, policies and other governmental actions may affect the production, licensing, distribution or sale of Toyota’s products, cost of products or applicable tax rates. From time-to-time when potential safety problems arise, Toyota issues vehicle recalls and takes other safety measures including safety campaigns relating to its vehicles. Since 2009, Toyota issued safety campaigns related to the risk of floor mat entrapment of accelerator pedals and vehicle recalls related to slow-to-return or sticky accelerator pedals. The recalls and other safety measures described above have led to a number of claims and lawsuits against Toyota. For a more detailed description of these claims and lawsuits, see “Information on the Company — Business Overview — Legal Proceedings” and note 24 to the consolidated financial statements.

The worldwide automotive industry is in a period of global competition which may continue for the foreseeable future, and in general the competitive environment in which Toyota operates is likely to intensify. Toyota believes it has the resources, strategies and technologies in place to compete effectively in the industry as an independent company for the foreseeable future.

Financial Services Operations

The competition in the worldwide automobile financial services industry is intensifying. As competition increases, margins on financing transactions may decrease and market share may also decline as customers obtain financing for Toyota vehicles from alternative sources.

Toyota’s financial services operations mainly include loans and leasing programs for customers and dealers. Toyota believes that its ability to provide financing to its customers is an important value added service. Therefore, Toyota has expanded its network of finance subsidiaries in order to offer financial services in many countries.

Toyota’s competitors for retail financing and retail leasing include commercial banks, credit unions and other finance companies. Meanwhile, commercial banks and other captive automobile finance companies also compete against Toyota’s wholesale financing activities.

Toyota’s total finance receivables increased during fiscal 2020 mainly due to an increase in retail receivables. Also, vehicles and equipment on operating leases, net decreased during fiscal 2020 mainly due to the impact of changes in exchange rates.

For a detail of finance receivables and vehicles and equipment on operating leases, see note 6 and 9 to the consolidated financial statements.

Toyota’s finance receivables are subject to collectability risks. These risks include consumer and dealer insolvencies and insufficient collateral values (less costs to sell) to realize the full carrying values of these receivables. See discussion in “Critical Accounting Estimates — Allowance for Doubtful Accounts and Credit Losses” and note 10 to the consolidated financial statements.

Toyota continues to originate leases to finance new Toyota vehicles. These leasing activities are subject to residual value risk. Residual value losses could be incurred when the lessee of a vehicle does not exercise the option to purchase the vehicle at the end of the lease term. See discussion in “Critical Accounting Estimates — Investment in Operating Leases” and note 2 to the consolidated financial statements.

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Toyota enters into interest rate swap agreements and cross currency interest rate swap agreements to convert its fixed-rate debt to variable-rate functional currency debt. A portion of the derivative instruments are entered into to hedge interest rate risk from an economic perspective and are not designated as a hedge of specific assets or liabilities on Toyota’s consolidated balance sheet and accordingly, unrealized gains or losses related to derivatives that are not designated as a hedge are recognized currently in operations. See discussion in “Critical Accounting Estimates — Derivatives and Other Contracts at Fair Value” and “Quantitative and Qualitative Disclosures about Market Risk” and notes 21 and 28 to the consolidated financial statements.

The fluctuations in funding costs can affect the profitability of Toyota’s financial services operations. Funding costs are affected by a number of factors, some of which are not in Toyota’s control. These factors include general economic conditions, prevailing interest rates and Toyota’s financial strength. Funding costs increased during fiscal 2019 and fiscal 2020, mainly as a result of higher interest rates.

Toyota launched its credit card business in Japan in April 2001. As of March 31, 2019, Toyota had 15.8 million cardholders, an increase of 0.5 million cardholders compared with March 31, 2018. As of March 31, 2020, Toyota had 15.9 million cardholders, an increase of 0.1 million cardholders compared with March 31, 2019. Credit card receivables as of March 31, 2019 increased by ¥42.9 billion from March 31, 2018 to ¥475.6 billion, and that as of March 31, 2020 increased by ¥6.1 billion from March 31, 2019 to ¥481.7 billion.

Other Business Operations

Toyota’s other business operations consist of information technology related businesses (including information technology and telecommunications and GAZOO), housing (including the manufacture and sale of prefabricated homes) and other businesses. As of January 2020, the parent company and Panasonic established a new joint venture, Prime Life Technologies, relating to the town development business. Prime Life Technologies became Toyota’s affiliated company, and THC as well as Misawa Homes became subsidiaries of Prime Life Technologies, causing THC and Misawa Homes to no longer be the parent company’s consolidated subsidiary companies. See note 4 to the consolidated financial statements for additional information.

Toyota does not expect its other business operations to materially contribute to Toyota’s consolidated results of operations.

Currency Fluctuations

Toyota is affected by fluctuations in foreign currency exchange rates. Toyota is exposed to fluctuations in the value of the Japanese yen against the U.S. dollar and the euro as well as the Australian dollar, the Russian ruble, the Canadian dollar, the British pound and others. Toyota’s consolidated financial statements, which are presented in Japanese yen, are affected by foreign currency exchange fluctuations through both translation risk and transaction risk.

Translation risk is the risk that Toyota’s consolidated financial statements for a particular period or for a particular date will be affected by changes in the prevailing exchange rates of the currencies in those countries in which Toyota does business compared with the Japanese yen. Even though the fluctuations of currency exchange rates to the Japanese yen can be substantial, and, therefore, significantly impact comparisons with prior periods and among the various geographic markets, the translation risk is a reporting consideration and does not reflect Toyota’s underlying results of operations. Toyota does not hedge against translation risk.

Transaction risk is the risk that the currency structure of Toyota’s costs and liabilities will deviate from the currency structure of sales proceeds and assets. Transaction risk relates primarily to sales proceeds from Toyota’s non-domestic operations from vehicles produced in Japan.

Toyota believes that the location of its production facilities in different parts of the world has significantly reduced the level of transaction risk. As part of its globalization strategy, Toyota has continued to localize

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production by constructing production facilities in the major markets in which it sells its vehicles. In calendar 2018 and 2019, Toyota produced 72.8% and 70.2%, respectively, of its non-domestic sales outside Japan. In North America, 68.9% and 67.3% of vehicles sold in calendar 2018 and 2019, respectively, were produced locally. In Europe, 78.3% and 73.4% of vehicles sold in calendar 2018 and 2019, respectively, were produced locally. Localizing production enables Toyota to locally purchase many of the supplies and resources used in the production process, which allows for a better match of local currency revenues with local currency expenses.

Toyota also enters into foreign currency transactions and other hedging instruments to address a portion of its transaction risk. This has reduced, but not eliminated, the effects of foreign currency exchange rate fluctuations, which in some years can be significant. See notes 21 and 28 to the consolidated financial statements for additional information.

Generally, a weakening of the Japanese yen against other currencies has a positive effect on Toyota’s revenues, operating income and net income attributable to Toyota Motor Corporation. A strengthening of the Japanese yen against other currencies has the opposite effect. In fiscal 2019, the Japanese yen was on average weaker against the U.S. dollar in comparison to the previous fiscal year, but in fiscal 2020, was on average stronger against the U.S. dollar in comparison to the previous fiscal year. The Japanese yen was at the end of fiscal 2019 weaker against the U.S. dollar in comparison to the end of fiscal 2018, but was at the end of fiscal 2020 stronger against the U.S. dollar in comparison to the end of fiscal 2019. In fiscal 2019 and 2020, the Japanese yen was on average stronger against the euro in comparison to fiscal 2018 and 2019, respectively. At the end of each of fiscal 2019 and 2020, the Japanese yen was stronger against the euro in comparison to the end of fiscal 2018 and 2019, respectively. See “Quantitative and Qualitative Disclosures about Market Risk — Market Risk Disclosures — Foreign Currency Exchange Rate Risk” for a further discussion.

Segmentation

Toyota’s most significant business segment is its automotive operations. Toyota carries out its automotive operations as a global competitor in the worldwide automotive market. Management allocates resources to, and assesses the performance of, its automotive operations as a single business segment on a worldwide basis and assesses financial and non-financial data such as vehicle unit sales, production volume, market share information, vehicle model plans and plant location costs to allocate resources within the automotive operations. Toyota does not manage any subset of its automotive operations, such as domestic or overseas operations or parts, as separate management units.

Geographic Breakdown

The following table sets forth Toyota’s net revenues in each geographic market based on the country location of the parent company or the subsidiaries that transacted the sale with the external customer for the past three fiscal years.

	Yen in millions
	Year ended March 31,
	2018		2019		2020
Japan		9,273,672		9,520,148		9,522,905
North America		10,347,266		10,585,934		10,416,582
Europe		2,940,243		3,055,654		3,138,755
Asia		4,497,374		4,832,392		4,828,635
Other*		2,320,955		2,231,553		2,023,115

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

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Results of Operations — Fiscal 2020 Compared with Fiscal 2019

	Yen in millions
	Year ended March 31,						2020 v. 2019 Change
	2019			2020			Amount			Percentage
Net revenues:
Japan		16,625,361			16,461,521			(163,840	)		(1.0	)%
North America		10,817,247			10,638,748			(178,499	)		(1.7	)
Europe		3,238,851			3,360,878			122,027			3.8
Asia		5,513,031			5,338,656			(174,375	)		(3.2	)
Other*		2,333,443			2,112,502			(220,941	)		(9.5	)
Intersegment elimination/unallocated amount		(8,302,252	)		(7,982,313	)		319,939			—
Total		30,225,681			29,929,992			(295,689	)		(1.0	)
Operating income (loss):
Japan		1,691,675			1,567,978			(123,697	)		(7.3	)
North America		114,515			270,629			156,114			136.3
Europe		124,868			150,545			25,677			20.6
Asia		457,489			370,999			(86,490	)		(18.9	)
Other*		91,110			90,724			(386	)		(0.4	)
Intersegment elimination/unallocated amount		(12,112	)		(8,006	)		4,106			—
Total		2,467,545			2,442,869			(24,676	)		(1.0	)
Operating margin		8.2	%		8.2	%		(0.0	)%
Income before income taxes and equity in earnings of affiliated companies		2,285,465			2,554,607			269,142			11.8
Net margin from income before income taxes and equity in earnings of affiliated companies		7.6	%		8.5	%		0.9	%
Equity in earnings of affiliated companies		360,066			271,152			(88,914	)		(24.7	)
Net income attributable to Toyota Motor Corporation		1,882,873			2,076,183			193,310			10.3
Net margin attributable to Toyota Motor Corporation		6.2	%		6.9	%		0.7	%

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

Net Revenues

Toyota had net revenues for fiscal 2020 of ¥29,929.9 billion, a decrease of ¥295.6 billion, or 1.0%, compared with the prior fiscal year. The decrease resulted mainly from the ¥880.0 billion unfavorable impact of changes in exchange rates, partially offset by the ¥440.0 billion impact of changes in vehicle unit sales and sales mix. Net revenues for fiscal 2020 reflects a ¥380.0 billion negative impact attributable to the decrease in consolidated vehicle unit sales due to the effects of the global spread of COVID-19.

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The table below shows Toyota’s net revenues from external customers by product category and by business.

	Yen in millions
	Year ended March 31,				2020 v. 2019 Change
	2019		2020		Amount			Percentage
Vehicles		23,066,190		22,852,916		(213,274	)		(0.9	)%
Parts and components for overseas production		625,483		603,928		(21,555	)		(3.4	)
Parts and components for after service		2,093,437		2,103,478		10,041			0.5
Other		1,249,382		1,274,163		24,781			2.0
Total Automotive		27,034,492		26,834,485		(200,007	)		(0.7	)
All Other		1,070,846		925,264		(145,582	)		(13.6	)
Total sales of products		28,105,338		27,759,749		(345,589	)		(1.2	)
Financial Services		2,120,343		2,170,243		49,900			2.4
Total		30,225,681		29,929,992		(295,689	)		(1.0	)%

Toyota’s net revenues include net revenues from sales of products, consisting of net revenues from automotive operations and all other operations, which decreased by 1.2% during fiscal 2020 compared with the prior fiscal year to ¥27,759.7 billion, and net revenues from financial services operations which increased by 2.4% during fiscal 2020 compared with the prior fiscal year to ¥2,170.2 billion. The decrease in net revenues from sales of products is mainly due to the unfavorable impact of fluctuations in foreign currency translation rates.

The following table shows the number of financing contracts by geographic region at the end of fiscal 2020 and 2019, respectively.

	Number of financing contracts in thousands
	Year ended March 31,				2020 v. 2019 Change
	2019		2020		Amount			Percentage
Japan		2,249		2,414		165			7.3	%
North America		5,404		5,394		(10	)		(0.2	)
Europe		1,220		1,318		98			8.0
Asia		1,803		1,864		61			3.4
Other*		890		926		36			4.0
Total		11,566		11,916		350			3.0	%

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

Geographically, net revenues (before the elimination of intersegment revenues) for fiscal 2020 decreased by 1.0% in Japan, 1.7% in North America, 3.2% in Asia, and 9.5% in Other, while they increased by 3.8% in Europe compared with the prior fiscal year. Excluding the impact of changes in exchange rates of ¥880.0 billion, net revenues in fiscal 2020 would have decreased by 1.0% in Japan and 0.5% in Asia, as well as would have increased by 0.5% in North America, 10.4% in Europe and 5.0% in Other compared with the prior fiscal year.

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The following is a discussion of net revenues in each geographic market (before the elimination of intersegment revenues).

Japan

	Thousands of units
	Year ended March 31,				2020 v. 2019 Change
	2019		2020		Amount			Percentage
Toyota’s consolidated vehicle unit sales*		4,173		4,284		111			2.6	%
* including number of exported vehicle unit sales
	Yen in millions
	Year ended March 31,				2020 v. 2019 Change
	2019		2020		Amount			Percentage
Net revenues:
Sales of products		16,485,093		16,309,165		(175,928	)		(1.1	)%
Financial services		140,268		152,356		12,088			8.6
Total		16,625,361		16,461,521		(163,840	)		(1.0	)%

Despite Toyota’s domestic and exported vehicle unit sales having increased by 111 thousand vehicles compared with the prior fiscal year, net revenues in Japan decreased due primarily to the unfavorable impact of changes in exchange rates related to export transactions. For fiscal 2019 and 2020, exported vehicle unit sales were 1,947 thousand units and 2,044 thousand units, respectively.

North America

	Thousands of units
	Year ended March 31,				2020 v. 2019 Change
	2019		2020		Amount			Percentage
Toyota’s consolidated vehicle unit sales		2,745		2,713		(32	)		(1.2	)%
	Yen in millions
	Year ended March 31,				2020 v. 2019 Change
	2019		2020		Amount			Percentage
Net revenues:
Sales of products		9,295,132		9,091,397		(203,735	)		(2.2	)%
Financial services		1,522,115		1,547,351		25,236			1.7
Total		10,817,247		10,638,748		(178,499	)		(1.7	)%

Net revenues in North America decreased due primarily to the 32 thousand vehicles decrease in vehicle unit sales compared with the prior fiscal year.

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Europe

	Thousands of units
	Year ended March 31,				2020 v. 2019 Change
	2019		2020		Amount		Percentage
Toyota’s consolidated vehicle unit sales		994		1,029		35		3.5	%
	Yen in millions
	Year ended March 31,				2020 v. 2019 Change
	2019		2020		Amount		Percentage
Net revenues:
Sales of products		3,107,687		3,212,984		105,297		3.4	%
Financial services		131,164		147,894		16,730		12.8
Total		3,238,851		3,360,878		122,027		3.8	%

Net revenues in Europe increased due primarily to the 35 thousand vehicles increase in vehicle unit sales compared with the prior fiscal year.

Asia

	Thousands of units
	Year ended March 31,				2020 v. 2019 Change
	2019		2020		Amount			Percentage
Toyota’s consolidated vehicle unit sales		1,684		1,605		(79	)		(4.7	)%
	Yen in millions
	Year ended March 31,				2020 v. 2019 Change
	2019		2020		Amount			Percentage
Net revenues:
Sales of products		5,348,385		5,166,175		(182,210	)		(3.4	)%
Financial services		164,646		172,481		7,835			4.8
Total		5,513,031		5,338,656		(174,375	)		(3.2	)%

Net revenues in Asia decreased due primarily to the 79 thousand vehicles decrease in vehicle unit sales compared with the prior fiscal year. The vehicle unit sales decreased due mainly to markets having slumped in such countries as Thailand, India, Indonesia.

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Other

	Thousands of units
	Year ended March 31,				2020 v. 2019 Change
	2019		2020		Amount			Percentage
Toyota’s consolidated vehicle unit sales		1,327		1,372		45			3.4	%
	Yen in millions
	Year ended March 31,				2020 v. 2019 Change
	2019		2020		Amount			Percentage
Net revenues:
Sales of products		2,148,134		1,940,249		(207,885	)		(9.7	)%
Financial services		185,309		172,253		(13,056	)		(7.0	)
Total		2,333,443		2,112,502		(220,941	)		(9.5	)%

Net revenues in Other decreased due primarily to the unfavorable impact of fluctuations in foreign currency translation rates despite vehicle unit sales increasing by 45 thousand vehicles compared with the prior fiscal year.

Operating Costs and Expenses

	Yen in millions
	Year ended March 31,				2020 v. 2019 Change
	2019		2020		Amount			Percentage
Operating costs and expenses
Cost of products sold		23,389,495		23,142,744		(246,751	)		(1.1	)%
Cost of financing operations		1,392,290		1,379,620		(12,670	)		(0.9	)
Selling, general and administrative		2,976,351		2,964,759		(11,592	)		(0.4	)
Total		27,758,136		27,487,123		(271,013	)		(1.0	)%

	Yen in millions
	2020 v. 2019 Change
Changes in operating costs and expenses:
Effect of changes in vehicle unit sales and sales mix		700,000
Effect of changes in exchange rates		(575,000	)
Effect of increase of cost of financing operations		27,100
Effect of cost reduction efforts		(170,000	)
Increase or decrease in expenses and expense reduction efforts		(45,000	)
Other		(208,113	)
Total		(271,013	)

Operating costs and expenses decreased by ¥271.0 billion, or 1.0%, to ¥27,487.1 billion during fiscal 2020 compared with the prior fiscal year. This decrease resulted from the ¥575.0 billion favorable impact of changes in exchange rates, the ¥170.0 billion decrease in cost reduction efforts, the ¥45.0 billion decrease in expenses and expense reduction efforts, and the ¥208.1 billion decrease in other, partially offset by the ¥700.0 billion impact of changes in vehicle unit sales and sales mix, and the ¥27.1 billion increase in cost of financing operations (excluding the effects of changes in exchange rates).

The effect of changes in vehicle unit sales and sales mix includes a ¥220.0 billion decrease due to the effects of the global spread of COVID-19.

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Other includes the ¥173.2 billion decrease due to the change in the depreciation method of the parent company and Japanese subsidiaries to the straight-line method, which started from fiscal 2020.

The decrease in expenses and expense reduction efforts was due mainly to the ¥235.0 billion decrease in product quality related expenses, partially offset by the ¥65.0 billion increase in research and development expenses, the ¥60.0 billion increase in labor costs, and the ¥55.0 billion increase in other various costs.

The decrease in product quality related expenses was due mainly to a decrease in provisions for recalls and other safety measures resulting from a decrease in actual payments during fiscal 2020. See note 13 to the consolidated financial statements for further discussion.

Cost Reduction Efforts

During fiscal 2020, continued cost reduction efforts together with suppliers contributed to a reduction of operating costs and expenses by ¥170.0 billion. This was due to ¥100.0 billion in cost reduction efforts concerning design related costs due mainly to ongoing value engineering activities, and ¥70.0 billion in cost reduction efforts at plants and logistics departments.

These cost reduction efforts related to ongoing value engineering and value analysis activities, the use of common parts resulting in a reduction of part types and other manufacturing initiatives designed to reduce the costs of vehicle production. The amount of the effect of cost reduction efforts includes the impact of fluctuation in the price of steel, precious metals, non-ferrous alloys including aluminum, plastic parts and other production materials and parts.

Cost of Products Sold

Cost of products sold decreased by ¥246.7 billion, or 1.1%, to ¥23,142.7 billion during fiscal 2020 compared with the prior fiscal year. The decrease resulted mainly from the favorable impact of changes in exchange rates, the decrease in product quality related expenses, the decrease in depreciation expenses due to the change in the depreciation method of the parent company and Japanese subsidiaries to the straight-line method, which started from fiscal 2020, and the impact of cost reduction efforts, partially offset by the impact of changes in vehicle unit sales and sales mix, increased research and development expenses, and increased labor costs.

The global spread of COVID-19 decreased cost of products sold. The impact of this on changes in operating costs and expenses is mainly included in changes in vehicle unit sales and sales mix.

Cost of Financing Operations

Cost of financing operations decreased by ¥12.6 billion, or 0.9%, to ¥1,379.6 billion during fiscal 2020 compared with the prior fiscal year. The decrease mainly reflected the favorable impact of changes in exchange rates, offset in part by the global spread of COVID-19 which increased the cost of financing operations.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased by ¥11.5 billion, or 0.4%, to ¥2,964.7 billion during fiscal 2020 compared with the prior fiscal year. This decrease mainly reflected the favorable impact of changes in exchange rates.

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Operating Income

	Yen in millions
	2020 v. 2019 Change
Changes in operating income and loss:
Effect of marketing activities		(90,000	)
Effect of cost reduction efforts		170,000
Effect of changes in exchange rates		(305,000	)
Increase or decrease in expenses and expense reduction efforts		45,000
Other		155,324
Total		(24,676	)

Toyota’s operating income decreased by ¥24.6 billion, or 1.0%, to ¥2,442.8 billion during fiscal 2020 compared with the prior fiscal year. This decrease was due to the ¥305.0 billion unfavorable impact of changes in exchange rates and the ¥90.0 billion impact of marketing activities, partially offset by the ¥170.0 billion increase in cost reduction efforts and the ¥45.0 billion increase in expenses and expense reduction efforts.

In fiscal 2020, the effect of marketing activities includes a negative impact of ¥100.0 billion due to the decrease in consolidated unit sales and a negative impact of ¥60.0 billion due to the increase in provisions relating to credit losses and residual value losses in the financial services operations, both due to the effects of the global spread of COVID-19. Other includes the ¥173.2 billion decrease in depreciation expenses due to the change in the depreciation method of the parent company and Japanese subsidiaries to the straight-line method, which started from fiscal 2020.

Marketing efforts and marketing activities include changes in vehicle unit sales and sales mix, sales expenses and other. “Other” includes valuation gains and losses from interest rate swaps etc.

The unfavorable impact of changes in exchange rates was due mainly to the ¥325.0 billion impact of overseas transactions such as imports and exports denominated in foreign currencies.

During fiscal 2020, operating income (before elimination of intersegment profits) compared with the prior fiscal year decreased by ¥123.6 billion, or 7.3%, in Japan, ¥86.4 billion, or 18.9%, in Asia, and ¥0.3 billion, or 0.4%, in Other, and increased by ¥156.1 billion, or 136.3%, in North America, and ¥25.6 billion, or 20.6%, in Europe.

The following is a description of operating income in each geographic market.

Japan

	Yen in millions
	2020 v. 2019 Change
Changes in operating income and loss:
Effect of marketing activities		(225,000	)
Effect of cost reduction efforts		170,000
Effect of changes in exchange rates		(175,000	)
Increase or decrease in expenses and expense reduction efforts		(40,000	)
Other		146,303
Total		(123,697	)

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North America

	Yen in millions
	2020 v. 2019 Change
Changes in operating income and loss:
Effect of marketing efforts		115,000
Effect of cost reduction efforts		(5,000	)
Effect of changes in exchange rates		(15,000	)
Increase or decrease in expenses and expense reduction efforts		50,000
Other		11,114
Total		156,114

Europe

	Yen in millions
	2020 v. 2019 Change
Changes in operating income and loss:
Effect of marketing efforts		20,000
Effect of cost reduction efforts		15,000
Effect of changes in exchange rates		(5,000	)
Increase or decrease in expenses and expense reduction efforts		(10,000	)
Other		5,677
Total		25,677

Asia

	Yen in millions
	2020 v. 2019 Change
Changes in operating income and loss:
Effect of marketing efforts		10,000
Effect of cost reduction efforts		(5,000	)
Effect of changes in exchange rates		(90,000	)
Increase or decrease in expenses and expense reduction efforts		15,000
Other		(16,490	)
Total		(86,490	)

Other

	Yen in millions
	2020 v. 2019 Change
Changes in operating income and loss:
Effect of marketing activities		(10,000	)
Effect of cost reduction efforts		(5,000	)
Effect of changes in exchange rates		(20,000	)
Increase or decrease in expenses and expense reduction efforts		25,000
Other		9,614
Total		(386	)

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Other Income and Expenses

Interest and dividend income increased by ¥7.3 billion, or 3.3%, to ¥232.8 billion during fiscal 2020 compared with the prior fiscal year.

Interest expense increased by ¥4.1 billion, or 14.7%, to ¥32.2 billion during fiscal 2020 compared with the prior fiscal year.

Foreign exchange gain (loss), net decreased by ¥91.4 billion to a loss of ¥79.0 billion during fiscal 2020 compared with the prior fiscal year. Foreign exchange gains and losses include the differences between the value of foreign currency denominated assets and liabilities recognized through transactions in foreign currencies translated at prevailing exchange rates and the value at the date the transaction settled during the fiscal year, including those settled using forward foreign currency exchange contracts, or the value translated by appropriate year-end exchange rates. The ¥91.4 billion decrease in foreign exchange gain (loss), net was due mainly to the losses recorded in fiscal 2020 resulting from the Japanese yen being stronger against foreign currencies at the maturity dates of the foreign currency loans than at the dates of the lending.

Unrealized gains (losses) on equity securities increased by ¥316.4 billion to ¥24.6 billion in losses during fiscal 2020 compared with the prior fiscal year.

Other income (loss), net increased by ¥65.5 billion, to ¥14.7 billion during fiscal 2020 compared with the prior fiscal year.

Income Taxes

The provision for income taxes increased by ¥23.4 billion, or 3.6%, to ¥683.4 billion during fiscal 2020 compared with the prior fiscal year. This increase was due mainly to the increase in income before income taxes, partially offset by a decrease in tax expenses associated with the U.S. tax reform. The effective tax rate for fiscal 2020 was 26.8%.

Net Income Attributable to Noncontrolling Interests and Equity in Earnings of Affiliated Companies

Net income attributable to noncontrolling interests decreased by ¥36.5 billion, or 35.6%, to ¥66.1 billion during fiscal 2020 compared with the prior fiscal year. This decrease was due mainly to a decrease during fiscal 2020 in net income attributable to the shareholders of consolidated subsidiaries.

Equity in earnings of affiliated companies during fiscal 2020 decreased by ¥88.9 billion, or 24.7%, to ¥271.1 billion compared with the prior fiscal year. This decrease was due mainly to a decrease during fiscal 2020 in net income attributable to the shareholders of affiliated companies accounted for by the equity method.

Net Income Attributable to Toyota Motor Corporation

Net income attributable to the shareholders of Toyota Motor Corporation increased by ¥193.3 billion, or 10.3%, to ¥2,076.1 billion during fiscal 2020 compared with the prior fiscal year.

Net income attributable to common shareholders during fiscal 2020 is ¥2,058.8 billion, which is derived by deducting dividends and accretion to Model AA Class Shares of ¥17.2 billion from net income attributable to Toyota Motor Corporation.

Other Comprehensive Income and Loss

Other comprehensive income and loss improved by ¥1,102.7 billion to losses of ¥249.6 billion for fiscal 2020 compared with the prior fiscal year. This resulted from the recognition in fiscal 2019 of a cumulative-effect

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adjustment to retained earnings of ¥1,309.7 billion as of April 1, 2018 for unrealized gains (losses) on equity securities due mainly to the adoption of the new guidance for financial instruments, as well as from foreign currency translation adjustment losses of ¥313.1 billion in fiscal 2020 compared with income of ¥29.4 billion in the prior fiscal year due mainly to appreciation of the Japanese yen against the U.S. dollar.

Segment Information

The following is a discussion of the results of operations for each of Toyota’s operating segments. The amounts presented are prior to intersegment elimination.

	Yen in millions
	Year ended March 31,						2020 v. 2019 Change
	2019			2020			Amount			Percentage
Automotive:
Net revenues		27,079,077			26,863,514			(215,563	)		(0.8	)%
Operating income		2,038,884			2,052,346			13,462			0.7
Financial Services:
Net revenues		2,153,547			2,190,559			37,012			1.7
Operating income		322,821			292,183			(30,638	)		(9.5	)
All Other:
Net revenues		1,676,377			1,504,550			(171,827	)		(10.2	)
Operating income		105,538			96,655			(8,883	)		(8.4	)
Intersegment elimination/unallocated amount:
Net revenues		(683,320	)		(628,631	)		54,689			—
Operating income		302			1,685			1,383			—

Automotive Operations Segment

The automotive operations segment is Toyota’s largest operating segment by net revenues. Net revenues for the automotive segment decreased during fiscal 2020 by ¥215.5 billion, or 0.8%, to ¥26,863.5 billion compared with the prior fiscal year. The decrease mainly reflects the ¥810.0 billion unfavorable impact of changes in exchange rates, partially offset by the ¥440.0 billion impact of changes in vehicle unit sales and sales mix.

Operating income from the automotive operations increased by ¥13.4 billion, or 0.7%, to ¥2,052.3 billion during fiscal 2020 compared with the prior fiscal year. This increase in operating income was due mainly to the ¥173.2 billion impact of the change in depreciation method, the ¥170.0 billion impact of cost reduction efforts, and the ¥45.0 billion decrease in expenses, partially offset by the ¥300.0 billion unfavorable impact of changes in exchange rates, and the ¥85.0 billion effect of marketing activities. The effect of marketing activities includes a negative impact of ¥100.0 billion due to a decrease in consolidated unit sales on account of the effects of the global spread of COVID-19.

The decrease in expenses was due mainly to the ¥235.0 billion decrease in product quality related expenses, partially offset by the ¥65.0 billion increase in research and development expenses, the ¥60.0 billion increase in labor costs and the ¥55.0 billion increase in other various costs.

Financial Services Operations Segment

Net revenues for the financial services operations increased during fiscal 2020 by ¥37.0 billion, or 1.7%, to ¥2,190.5 billion compared with the prior fiscal year. This increase was due mainly to the increase in the balance of retail receivables at finance subsidiaries in North America, partially offset by the unfavorable impact of changes in exchange rates.

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Operating income from financial services operations decreased by ¥30.6 billion, or 9.5%, to ¥292.1 billion during fiscal 2020 compared with the prior fiscal year. This decrease was due primarily to an increase in expenses related to credit losses, partially offset by the increase in financing volume at finance subsidiaries in North America. Operating income in fiscal 2020 includes a negative impact of ¥60.0 billion due to the increase in provisions relating to credit losses and residual value losses associated with the global spread of COVID-19.

All Other Operations Segment

Net revenues for Toyota’s other operations segments decreased by ¥171.8 billion, or 10.2%, to ¥1,504.5 billion during fiscal 2020 compared with the prior fiscal year. This was mainly due to THC and Misawa Homes no longer being the parent company’s consolidated subsidiary companies.

Operating income from Toyota’s other operations segments decreased by ¥8.8 billion, or 8.4%, to ¥96.6 billion during fiscal 2020 compared with the prior fiscal year. This was mainly due to THC and Misawa Homes no longer being the parent company’s consolidated subsidiary companies.

Results of Operations — Fiscal 2019 Compared with Fiscal 2018

	Yen in millions
	Year ended March 31,						2019 v. 2018 Change
	2018			2019			Amount			Percentage
Net revenues:
Japan		16,024,844			16,625,361			600,517			3.7	%
North America		10,574,410			10,817,247			242,837			2.3
Europe		3,185,224			3,238,851			53,627			1.7
Asia		5,148,139			5,513,031			364,892			7.1
Other*		2,453,299			2,333,443			(119,856	)		(4.9	)
Intersegment elimination/unallocated amount		(8,006,406	)		(8,302,252	)		(295,846	)		—
Total		29,379,510			30,225,681			846,171			2.9
Operating income (loss):
Japan		1,659,918			1,691,675			31,757			1.9
North America		138,899			114,515			(24,384	)		(17.6	)
Europe		75,026			124,868			49,842			66.4
Asia		433,199			457,489			24,290			5.6
Other*		112,663			91,110			(21,553	)		(19.1	)
Intersegment elimination/unallocated amount		(19,843	)		(12,112	)		7,731			—
Total		2,399,862			2,467,545			67,683			2.8
Operating margin		8.2	%		8.2	%		(0.0	)%
Income before income taxes and equity in earnings of affiliated companies		2,620,429			2,285,465			(334,964	)		(12.8	)
Net margin from income before income taxes and equity in earnings of affiliated companies		8.9	%		7.6	%		(1.3	)%
Equity in earnings of affiliated companies		470,083			360,066			(110,017	)		(23.4	)
Net income attributable to Toyota Motor Corporation		2,493,983			1,882,873			(611,110	)		(24.5	)
Net margin attributable to Toyota Motor Corporation		8.5	%		6.2	%		(2.3	)%

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

Net Revenues

Toyota had net revenues for fiscal 2019 of ¥30,225.6 billion, an increase of ¥846.1 billion, or 2.9%, compared with the prior fiscal year. The increase resulted mainly from the ¥860.0 billion impact of changes in

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vehicle unit sales and sales mix, partially offset by the ¥510.0 billion unfavorable impact of changes in exchange rates.

The table below shows Toyota’s net revenues from external customers by product category and by business.

	Yen in millions
	Year ended March 31,				2019 v. 2018 Change
	2018		2019		Amount			Percentage
Vehicles		22,631,201		23,066,190		434,989			1.9	%
Parts and components for overseas production		498,802		625,483		126,681			25.4
Parts and components for after service		2,044,104		2,093,437		49,333			2.4
Other		1,173,122		1,249,382		76,260			6.5
Total Automotive		26,347,229		27,034,492		687,263			2.6
All Other		1,073,047		1,070,846		(2,201	)		(0.2	)
Total sales of products		27,420,276		28,105,338		685,062			2.5
Financial Services		1,959,234		2,120,343		161,109			8.2
Total		29,379,510		30,225,681		846,171			2.9

Toyota’s net revenues include net revenues from sales of products, consisting of net revenues from automotive operations and all other operations, which increased by 2.5% during fiscal 2019 compared with the prior fiscal year to ¥28,105.3 billion, and net revenues from financial services operations which increased by 8.2% during fiscal 2019 compared with the prior fiscal year to ¥2,120.3 billion. The increase in net revenues from sales of products is mainly due to the impact of changes in vehicle unit sales and sales mix.

The following table shows the number of financing contracts by geographic region at the end of fiscal 2019 and 2018, respectively.

	Number of financing contracts in thousands
	Year ended March 31,				2019 v. 2018 Change
	2018		2019		Amount			Percentage
Japan		2,103		2,249		146			6.9	%
North America		5,465		5,404		(61	)		(1.1	)
Europe		1,112		1,220		108			9.7
Asia		1,672		1,803		131			7.8
Other*		846		890		44			5.2
Total		11,198		11,566		368			3.3	%

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

Geographically, net revenues (before the elimination of intersegment revenues) for fiscal 2019 increased by 3.7% in Japan, 2.3% in North America, 1.7% in Europe, and 7.1% in Asia, while they decreased by 4.9% in Other compared with the prior fiscal year. Excluding the impact of changes in exchange rates of ¥510.0 billion, net revenues in fiscal 2019 would have increased by 3.0% in Japan, 2.5% in North America, 4.5% in Europe, 8.0% in Asia, and 12.1% in Other compared with the prior fiscal year.

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The following is a discussion of net revenues in each geographic market (before the elimination of intersegment revenues).

Japan

	Thousands of units
	Year ended March 31,				2019 v. 2018 Change
	2018		2019		Amount		Percentage
Toyota’s consolidated vehicle unit sales*		4,137		4,173		36		0.9	%

* including number of exported vehicle unit sales

	Yen in millions
	Year ended March 31,				2019 v. 2018 Change
	2018		2019		Amount		Percentage
Net revenues:
Sales of products		15,893,465		16,485,093		591,628		3.7	%
Financial services		131,379		140,268		8,889		6.8
Total		16,024,844		16,625,361		600,517		3.7	%

Toyota’s domestic and exported vehicle unit sales increased by 36 thousand vehicles compared with the prior fiscal year and net revenues in Japan increased. For fiscal 2018 and 2019, exported vehicle unit sales were 1,882 thousand units and 1,947 thousand units, respectively.

North America

	Thousands of units
	Year ended March 31,				2019 v. 2018 Change
	2018		2019		Amount			Percentage
Toyota’s consolidated vehicle unit sales		2,806		2,745		(61	)		(2.2	)%
	Yen in millions
	Year ended March 31,				2019 v. 2018 Change
	2018		2019		Amount			Percentage
Net revenues:
Sales of products		9,173,277		9,295,132		121,855			1.3	%
Financial services		1,401,133		1,522,115		120,982			8.6
Total		10,574,410		10,817,247		242,837			2.3	%

Net revenues in North America increased due primarily to the impact of changes in vehicle sales mix despite vehicle unit sales decreasing by 61 thousand vehicles compared with the prior fiscal year.

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Europe

	Thousands of units
	Year ended March 31,				2019 v. 2018 Change
	2018		2019		Amount		Percentage
Toyota’s consolidated vehicle unit sales		968		994		26		2.7	%
	Yen in millions
	Year ended March 31,				2019 v. 2018 Change
	2018		2019		Amount		Percentage
Net revenues:
Sales of products		3,074,396		3,107,687		33,291		1.1	%
Financial services		110,828		131,164		20,336		18.3
Total		3,185,224		3,238,851		53,627		1.7	%

Despite the unfavorable impact of changes in exchange rates, net revenues in Europe increased due primarily to the 26 thousand vehicles increase in vehicle unit sales compared with the prior fiscal year. The vehicle unit sales increased due mainly to strong sales of C-HR and other hybrid vehicles.

Asia

	Thousands of units
	Year ended March 31,				2019 v. 2018 Change
	2018		2019		Amount		Percentage
Toyota’s consolidated vehicle unit sales		1,543		1,684		141		9.2	%
	Yen in millions
	Year ended March 31,				2019 v. 2018 Change
	2018		2019		Amount		Percentage
Net revenues:
Sales of products		4,996,339		5,348,385		352,046		7.0	%
Financial services		151,800		164,646		12,846		8.5
Total		5,148,139		5,513,031		364,892		7.1	%

Despite the unfavorable impact of changes in exchange rates, net revenues in Asia increased due primarily to the 141 thousand vehicles increase in vehicle unit sales compared with the prior fiscal year. The vehicle unit sales increased due mainly to strong sales in Thailand and China. 

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Other

	Thousands of units
	Year ended March 31,				2019 v. 2018 Change
	2018		2019		Amount			Percentage
Toyota’s consolidated vehicle unit sales		1,392		1,327		(65	)		(4.6	)%
	Yen in millions
	Year ended March 31,				2019 v. 2018 Change
	2018		2019		Amount			Percentage
Net revenues:
Sales of products		2,270,150		2,148,134		(122,016	)		(5.4	)%
Financial services		183,149		185,309		2,160			1.2
Total		2,453,299		2,333,443		(119,856	)		(4.9	)%

Net revenues in Other decreased due primarily to the 65 thousand vehicles decrease in vehicle unit sales compared with the prior fiscal year. The decrease in vehicle unit sales was due mainly to decreased sales in the Middle East.

Operating Costs and Expenses

	Yen in millions
	Year ended March 31,				2019 v. 2018 Change
	2018		2019		Amount			Percentage
Operating costs and expenses
Cost of products sold		22,600,474		23,389,495		789,021			3.5	%
Cost of financing operations		1,288,679		1,392,290		103,611			8.0
Selling, general and administrative		3,090,495		2,976,351		(114,144	)		(3.7	)
Total		26,979,648		27,758,136		778,488			2.9	%

	Yen in millions
	2019 v. 2018 Change
Changes in operating costs and expenses:
Effect of changes in vehicle unit sales and sales mix		750,000
Effect of changes in exchange rates		(460,000	)
Effect of increase of cost of financing operations		118,500
Effect of cost reduction efforts		(80,000	)
Increase or decrease in expenses and expense reduction efforts		165,000
Other		284,988
Total		778,488

Operating costs and expenses increased by ¥778.4 billion, or 2.9%, to ¥27,758.1 billion during fiscal 2019 compared with the prior fiscal year. This increase resulted from the ¥750.0 billion impact of changes in vehicle unit sales and sales mix, the ¥165.0 billion increase in expenses, the ¥118.5 billion increase in cost of financing operations (excluding the effect of changes in exchange rates), and the ¥284.9 billion increase in other, partially offset by the ¥460.0 billion favorable impact of changes in exchange rates, and the ¥80.0 billion impact of cost reduction efforts.

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The increase in expenses was due mainly to the ¥45.0 billion increase in labor costs, the ¥20.0 billion increase in depreciation expenses and the ¥190.0 billion increase in other various costs, partially offset by the ¥75.0 billion decrease in product quality related expenses.

The decrease in product quality related expenses was due mainly to a decrease in provisions for recalls and other safety measures resulting from a decrease in actual payments during fiscal 2019. See note 13 to the consolidated financial statements for further discussion.

Cost Reduction Efforts

During fiscal 2019, continued cost reduction efforts together with suppliers contributed to a reduction of operating costs and expenses by ¥80.0 billion. This was due to ¥25.0 billion in cost reduction efforts concerning design related costs due mainly to ongoing value engineering activities, and ¥55.0 billion in cost reduction efforts at plants and logistics departments.

These cost reduction efforts related to ongoing value engineering and value analysis activities, the use of common parts resulting in a reduction of part types and other manufacturing initiatives designed to reduce the costs of vehicle production. The amount of the effect of cost reduction efforts includes the impact of fluctuation in the price of steel, precious metals, non-ferrous alloys including aluminum, plastic parts and other production materials and parts.

Cost of Products Sold

Cost of products sold increased by ¥789.0 billion, or 3.5%, to ¥23,389.4 billion during fiscal 2019 compared with the prior fiscal year. The increase resulted mainly from the impact of changes in vehicle unit sales and sales mix, as well as the increase in labor costs and depreciation expenses, partially offset by the favorable impact of changes in exchange rates, the impact of cost reduction efforts and the decrease in product quality related expenses.

Cost of Financing Operations

Cost of financing operations increased by ¥103.6 billion, or 8.0%, to ¥1,392.2 billion during fiscal 2019 compared with the prior fiscal year. The increase was mainly due to the increased funding costs as a result of higher interest rates.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased by ¥114.1 billion, or 3.7%, to ¥2,976.3 billion during fiscal 2019 compared with the prior fiscal year. This decrease mainly reflected the favorable impact of changes in exchange rates.

Operating Income

	Yen in millions
	2019 v. 2018 Change
Changes in operating income and loss:
Effect of marketing efforts		275,000
Effect of cost reduction efforts		80,000
Effect of changes in exchange rates		(50,000	)
Increase or decrease in expenses and expense reduction efforts		(165,000	)
Other		(72,317	)
Total		67,683

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Toyota’s operating income increased by ¥67.6 billion, or 2.8%, to ¥2,467.5 billion during fiscal 2019 compared with the prior fiscal year. This increase was due to the ¥275.0 billion impact of marketing efforts, and the ¥80.0 billion impact of cost reduction efforts, partially offset by the ¥165.0 billion increase in expenses, and the ¥50.0 billion unfavorable impact of changes in exchange rates.

Marketing efforts and marketing activities include changes in vehicle unit sales and sales mix, sales expenses and other. “Other” includes valuation gains and losses from interest rate swaps etc.

The unfavorable impact of changes in exchange rates was due mainly to the ¥95.0 billion impact of overseas transactions such as imports and exports denominated in foreign currencies, the ¥60.0 billion translational impact concerning provisions at the end of the fiscal year, and the ¥25.0 billion translational impact concerning operating income of overseas subsidiaries. This was partially offset by the ¥136.2 billion impact of the change of exchange rate used to translate foreign currency-denominated transactions as well as foreign currency-denominated monetary receivables and payables to the Telegraphic Transfer Middle Rate from fiscal 2019.

During fiscal 2019, operating income (before elimination of intersegment profits) compared with the prior fiscal year increased by ¥49.8 billion, or 66.4%, in Europe, ¥31.7 billion, or 1.9%, in Japan, and ¥24.2 billion, or 5.6%, in Asia, and decreased by ¥24.3 billion, or 17.6%, in North America, and ¥21.5 billion, or 19.1%, in Other.

The following is a description of operating income in each geographic market.

Japan

	Yen in millions
	2019 v. 2018 Change
Changes in operating income and loss:
Effect of marketing efforts		70,000
Effect of cost reduction efforts		90,000
Effect of changes in exchange rates		5,000
Increase or decrease in expenses and expense reduction efforts		(120,000	)
Other		(13,243	)
Total		31,757

North America

	Yen in millions
	2019 v. 2018 Change
Changes in operating income and loss:
Effect of marketing efforts		115,000
Effect of cost reduction efforts		5,000
Effect of changes in exchange rates		(20,000	)
Increase or decrease in expenses and expense reduction efforts		(85,000	)
Other		(39,384	)
Total		(24,384	)

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Europe

	Yen in millions
	2019 v. 2018 Change
Changes in operating income and loss:
Effect of marketing efforts		20,000
Effect of cost reduction efforts		5,000
Effect of changes in exchange rates		(15,000	)
Increase or decrease in expenses and expense reduction efforts		35,000
Other		4,842
Total		49,842

Asia

	Yen in millions
	2019 v. 2018 Change
Changes in operating income and loss:
Effect of marketing efforts		80,000
Effect of cost reduction efforts		(20,000	)
Increase or decrease in expenses and expense reduction efforts		(40,000	)
Other		4,290
Total		24,290

Other

	Yen in millions
	2019 v. 2018 Change
Changes in operating income and loss:
Effect of marketing activities		(10,000	)
Effect of changes in exchange rates		(20,000	)
Increase or decrease in expenses and expense reduction efforts		35,000
Other		(26,553	)
Total		(21,553	)

Other Income and Expenses

Interest and dividend income increased by ¥45.9 billion, or 25.6%, to ¥225.4 billion during fiscal 2019 compared with the prior fiscal year.

Interest expense increased by ¥0.4 billion, or 1.8%, to ¥28.0 billion during fiscal 2019 compared with the prior fiscal year.

Foreign exchange gain, net decreased by ¥10.2 billion, or 45.3%, to ¥12.4 billion during fiscal 2019 compared with the prior fiscal year. Foreign exchange gains and losses include the differences between the value of foreign currency denominated assets and liabilities recognized through transactions in foreign currencies translated at prevailing exchange rates and the value at the date the transaction settled during the fiscal year, including those settled using forward foreign currency exchange contracts, or the value translated by appropriate year-end exchange rates. The ¥10.2 billion decrease in the foreign exchange gains, net was due mainly to the

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change of exchange rate used to translate foreign currency-denominated transactions as well as foreign currency-denominated monetary receivables and payables to the Telegraphic Transfer Middle Rate from fiscal 2019. This decrease was partially offset by gains recorded in fiscal 2019 resulting from the Japanese yen being weaker against foreign currencies at the dates of settlement of the foreign currency trade accounts receivable than at the dates of the transactions.

Toyota adopted new guidance for financial instruments from fiscal 2019. Equity securities are measured at fair value and any changes in fair value are recognized in net income. According to this adoption, a ¥341.0 billion loss was recorded as unrealized gains (losses) on equity securities.

Other income (loss), net decreased by ¥96.7 billion, to ¥50.8 billion in losses during fiscal 2019 compared with the prior fiscal year.

Income Taxes

The provision for income taxes increased by ¥155.5 billion, or 30.8%, to ¥659.9 billion during fiscal 2019 compared with the prior fiscal year. This increase was due mainly to revaluation of deferred tax assets and liabilities resulting from the Tax Cuts and Jobs Act of 2017 of the United States. The effective tax rate for fiscal 2019 was 28.9%.

Net Income Attributable to Noncontrolling Interests and Equity in Earnings of Affiliated Companies

Net income attributable to noncontrolling interests increased by ¥10.5 billion, or 11.5%, to ¥102.7 billion during fiscal 2019 compared with the prior fiscal year. This increase was due mainly to an increase during fiscal 2019 in net income attributable to the shareholders of consolidated subsidiaries.

Equity in earnings of affiliated companies during fiscal 2019 decreased by ¥110.0 billion, or 23.4%, to ¥360.0 billion compared with the prior fiscal year. This decrease was due mainly to the losses of unrealized gains (losses) on equity securities due to the adoption of the new guidance for financial instruments and a decrease during fiscal 2019 in net income attributable to the shareholders of affiliated companies accounted for by the equity method.

Net Income Attributable to Toyota Motor Corporation

Net income attributable to the shareholders of Toyota Motor Corporation decreased by ¥611.1 billion, or 24.5%, to ¥1,882.8 billion during fiscal 2019 compared with the prior fiscal year.

Net income attributable to common shareholders during fiscal 2019 is ¥1,868.0 billion, which is derived by deducting dividends and accretion to Model AA Class Shares of ¥14.7 billion from net income attributable to Toyota Motor Corporation.

Other Comprehensive Income and Loss

Other comprehensive income and loss decreased by ¥1,147.1 billion to losses of ¥1,352.3 billion for fiscal 2019 compared with the prior fiscal year. This decrease resulted from recognition of a cumulative-effect adjustment to retained earnings of ¥1,309.7 billion as of April 1, 2018 for unrealized gains (losses) on equity securities due mainly to the adoption of the new guidance for financial instruments, and from pension liability adjustment losses in fiscal 2019 of ¥51.0 billion compared with gains of ¥21.7 billion in the prior fiscal year due mainly to changes in fair value of plan assets.

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Segment Information

The following is a discussion of the results of operations for each of Toyota’s operating segments. The amounts presented are prior to intersegment elimination.

	Yen in millions
	Year ended March 31,						2019 v. 2018 Change
	2018			2019			Amount			Percentage
Automotive:
Net revenues		26,397,940			27,079,077			681,137			2.6	%
Operating income		2,011,135			2,038,884			27,749			1.4
Financial Services:
Net revenues		2,017,008			2,153,547			136,539			6.8
Operating income		285,546			322,821			37,275			13.1
All Other:
Net revenues		1,646,118			1,676,377			30,259			1.8
Operating income		100,812			105,538			4,726			4.7
Intersegment elimination/unallocated amount:
Net revenues		(681,556	)		(683,320	)		(1,764	)		—
Operating income		2,369			302			(2,067	)		—

Automotive Operations Segment

The automotive operations segment is Toyota’s largest operating segment by net revenues. Net revenues for the automotive segment increased during fiscal 2019 by ¥681.1 billion, or 2.6%, to ¥27,079.0 billion compared with the prior fiscal year. The increase mainly reflects the ¥860.0 billion favorable impact of changes in vehicle unit sales and sales mix, partially offset by the ¥480.0 billion unfavorable impact of changes in exchange rates.

Operating income from the automotive operations increased by ¥27.7 billion, or 1.4%, to ¥2,038.8 billion during fiscal 2019 compared with the prior fiscal year. This increase in operating income was due mainly to the ¥205.0 billion impact of marketing efforts, and ¥80.0 billion impact of cost reduction efforts, partially offset by the ¥165.0 billion increase in expenses, and the ¥50.0 billion unfavorable impact of changes in exchange rates.

The impact of marketing efforts was due mainly to improvement of the vehicle sales mix in North America, Europe and Asia. The increase in expenses was due mainly to the ¥45.0 billion increase in labor costs, the ¥20.0 billion increase in depreciation expenses and the ¥190.0 billion increase in other various costs, partially offset by the ¥75.0 billion decrease in product quality related expenses.

Financial Services Operations Segment

Net revenues for the financial services operations increased during fiscal 2019 by ¥136.5 billion, or 6.8%, to ¥2,153.5 billion compared with the prior fiscal year. This increase was primarily due to the ¥58.4 billion increase in rental income from vehicles and equipment on operating leases in sales finance subsidiaries in North America.

Operating income from financial services operations increased by ¥37.2 billion, or 13.1%, to ¥322.8 billion during fiscal 2019 compared with the prior fiscal year. This increase was due primarily to the decrease in expenses related to residual value losses and the increase in financing volume, in sales finance subsidiaries.

All Other Operations Segment

Net revenues for Toyota’s other operations segments increased by ¥30.2 billion, or 1.8%, to ¥1,676.3 billion during fiscal 2019 compared with the prior fiscal year.

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Operating income from Toyota’s other operations segments increased by ¥4.7 billion, or 4.7%, to ¥105.5 billion during fiscal 2019 compared with the prior fiscal year.

Related Party Transactions

Toyota does not have any significant related party transactions other than transactions with affiliated companies in the ordinary course of business. See note 11 to the consolidated financial statements for further discussion.

Basic Concept Regarding the Selection of Accounting Standards

Toyota intends to replace the currently applied U.S. generally accepted accounting principles and voluntarily adopt International Financial Reporting Standards (“IFRS”) for its consolidated financial statements in order to improve the international comparability of its financial information in the capital markets, among other reasons. The period for disclosure based on IFRS will begin with the first quarter of the fiscal year ending March 31, 2021.

Critical Accounting Estimates

The consolidated financial statements of Toyota are prepared in conformity with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Toyota believes that of its significant accounting policies, the following may involve a higher degree of judgments, estimates and assumptions:

As for the global economy going forwards, there is concern that there will be a sharp decline in many countries and regions due to the impact of COVID-19. The production and sales of automobiles have already been greatly affected. While we assume that the global automobile market as a whole, will gradually recover after bottoming out during April, May and June of 2020, leading the market to return to the same level as the previous year during the end of 2020 and the first half of 2021, the impact of COVID-19 is wide-ranging, significant and serious, and it is expected that weakness will continue for the time being.

Product Warranties and Recalls and Other Safety Measures

Toyota generally warrants its products against certain manufacturing and other defects. Provisions for product warranties are provided for specific periods of time and/or usage of the product and vary depending upon the nature of the product, the geographic location of the sale and other factors. All product warranties are consistent with commercial practices. Toyota includes a provision for estimated product warranty costs as a component of cost of sales at the time the related sale is recognized. The accrued warranty costs represent management’s best estimate at the time of sale of the total costs that Toyota will incur to repair or replace product parts that fail while still under warranty. The amount of accrued estimated warranty costs is primarily based on historical experience of product failures as well as current information on repair costs. The amount of warranty costs accrued also contains an estimate of warranty claim recoveries to be received from suppliers. The foregoing evaluations are inherently uncertain, as they require material estimates and some products’ warranties extend for several years. Consequently, actual warranty costs may differ from the estimated amounts and could require additional warranty provisions. If these factors require a significant increase in Toyota’s accrued estimated warranty costs, it would negatively affect future operating results of the automotive operations.

An estimate of warranty claim accrued for each fiscal year is calculated based on the estimate of warranty claim per unit. The estimate of warranty claim per unit is calculated by dividing the actual amounts of warranty claim, net of claim recovery cost received from suppliers, by the number of sales units for the fiscal year.

As the historical recovery amounts received from suppliers is used as a factor in Toyota’s calculation of estimated accrued warranty cost, the estimated accrued warranty cost may change depending on the average

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recovery amounts received from suppliers in the past. However, Toyota believes that there is not a significant uncertainty of estimated amounts based on historical experience regarding recoveries received from suppliers. Toyota may seek recovery to suppliers over the life of the warranty, and there are no other significant special terms and conditions including cap on amounts that can be recovered.

Toyota accrues for costs of recalls and other safety measures, as well as product warranty cost described above, as a component of cost of sales. Toyota generally measures such “liabilities for recalls and other safety measures” at the time of vehicle sales comprehensively by aggregate sales of various models in a certain period by geographical regions. However, when circumstances warrant, Toyota measures “liabilities for a particular recall or other safety measure” using an individual model when they are probable and reasonably estimable. While there is no difference in the calculation method among geographical regions, Toyota believes it is reasonable to calculate the liabilities by geographical regions because of factors such as varying labor costs among geographical regions.

The portion of “liabilities for the costs of recalls and other safety measures” recorded in the balance sheet comprehensively is calculated by deducting the “accumulated amount of repair cost paid” from the “expected liability for the cost of recalls and other safety measures”. As such, this liability is evaluated every period based on new data and are adjusted as appropriate. Toyota calculates these liabilities for units sold in the current period and each of the past 10 fiscal years, and aggregates such liabilities in determining the final liability amount.

The “expected liability for the cost of recalls and other safety measures” are calculated by multiplying the “sales unit” by the “expected average repair cost per unit”. The “expected average repair cost per unit” is calculated based on dividing the “accumulated amount of repair cost paid per unit” by the “pattern of payment occurrences”. The “pattern of payment occurrence” represents a ratio that shows the measure of payment occurrence over 10 years based on actual payments with regard to units sold within 10 years.

Factors that may cause a difference between the amount accrued comprehensively at the time of vehicle sale and actual payment on individual recalls and other safety measures mainly include actual cost of recalls and safety measures during the period being significantly different from the accumulated amount of repair cost paid per unit (generally comprised of parts and labor) and the actual pattern of payment occurrence during the period being significantly different from the pattern of the payment occurrence in the past, which is considered as part of our estimation process for future recalls and other safety measures.

As described above, in estimating the comprehensive provision, the actual cost of individual recalls and other safety measures is included as a component of the calculation such as the accumulated amount of repair cost paid per unit. Thus, an individual recall announcement generally does not directly impact the financial statements when it occurs.

Allowance for Doubtful Accounts and Credit Losses

Natures of estimates and assumptions

Retail receivables and finance lease receivables consist of retail installment sales contracts secured by passenger cars and commercial vehicles. Collectability risks include consumer and dealer insolvencies and insufficient collateral values (less costs to sell) to realize the full carrying values of these receivables. As a matter of policy, Toyota maintains an allowance for doubtful accounts and credit losses representing management’s estimate of the amount of asset impairment in the portfolios of finance, trade and other receivables. Toyota determines the allowance for doubtful accounts and credit losses based on a systematic, ongoing review and evaluation performed as part of the credit-risk evaluation process, historical loss experience, the size and composition of the portfolios, current economic events and conditions, the estimated fair value and adequacy of collateral, and other pertinent factors. This evaluation is inherently judgmental and requires material estimates, including the amounts and timing of future cash flows expected to be received, which may be susceptible to significant change. Although management considers the allowance for doubtful accounts and credit losses to be adequate based on information currently available, additional provisions may be necessary due to (i) changes in

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management estimates and assumptions about asset impairments, (ii) information that indicates changes in expected future cash flows, or (iii) changes in economic and other events and conditions. To the extent that sales incentives remain an integral part of sales promotion with the effect of reducing new vehicle prices, resale prices of used vehicles and, correspondingly, the collateral value of Toyota’s retail receivables and finance lease receivables could experience further downward pressure. If these factors require a significant increase in Toyota’s allowance for doubtful accounts and credit losses, it could negatively affect future operating results of the financial services operations. The level of credit losses, which has a greater impact on Toyota’s results of operations, is influenced by two factors: frequency of occurrence and expected severity of loss. For evaluation purposes, exposures to credit losses are segmented into the two primary categories of “consumer” and “dealer”.

Toyota’s “consumer” category consists of smaller balances that are homogenous retail receivables and finance lease receivables. The “dealer” category consists of wholesale and other dealer loan receivables. The overall allowance for credit losses is evaluated at least quarterly, considering a variety of assumptions and factors to determine whether reserves are considered adequate to cover probable losses.

Sensitivity analysis

The level of credit losses, which could significantly impact Toyota’s results of operations, is influenced by two factors: frequency of occurrence and expected severity of loss. The overall allowance for credit losses is evaluated at least quarterly, considering a variety of assumptions and factors to determine whether reserves are considered adequate to cover probable losses. The following table illustrates the effect of an assumed change in frequency of occurrence or expected severity of loss mainly in the United States, assuming all other assumptions are held consistent. The table below represents the impact on the allowance for credit losses in Toyota’s financial services operations of the change in frequency of occurrence or expected severity of loss as any change impacts most significantly on the financial services operations.

	Yen in millions
	Effect on the allowance for credit losses as of March 31, 2020
10 percent change in frequency of occurrence or expected severity of loss		6,312

Investment in Operating Leases

Natures of estimates and assumptions

Vehicles on operating leases, where Toyota is the lessor, are valued at cost and depreciated over their estimated useful lives using the straight-line method to their estimated residual values. Toyota utilizes industry published information and its own historical experience to determine estimated residual values for these vehicles. Toyota evaluates the recoverability of the carrying values of its leased vehicles for impairment when there are indications of declines in residual values, and if impaired, Toyota recognizes an allowance for losses on its residual values.

Throughout the life of the lease, management performs periodic evaluations of estimated end-of-term fair values to determine whether estimates used in the determination of the contractual residual value are still considered reasonable. Factors affecting the estimated residual value at lease maturity include, but are not limited to, new vehicle incentive programs, new vehicle pricing, used vehicle supply, projected vehicle return rates, and projected loss severity. The vehicle return rate represents the number of leased vehicles actually returned at contract maturity as a percentage of the number of lease contracts originally scheduled to mature in the same period less lease contracts subject to early terminations. A higher rate of vehicle returns exposes Toyota to higher potential losses incurred at lease termination. Severity of loss is the extent to which the end-of-term fair value of a lease is less than its carrying value at lease end.

To the extent that sales incentives remain an integral part of sales promotion, resale prices of used vehicles and, correspondingly, the fair value of Toyota’s leased vehicles could be subject to downward pressure. The

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extent of the impact this will have on the end of term residual value depends on the significance of the incentive programs and whether they are sustained over a number of periods. This in turn can impact the projection of future used vehicle values, adversely impacting the expected residual value of the current operating lease portfolio and increasing the provision for residual value losses. However, various other factors impact used vehicle values and the projection of future residual values, including the supply of and demand for used vehicles, interest rates, inflation, the actual or perceived quality, safety and reliability of vehicles, the general economic outlook, new vehicle pricing, projected vehicle return rates and projected loss severity, which may offset this effect. Such factors may adversely affect the results of operations for financial services due to significant charges reducing the estimated residual value.

Sensitivity analysis

The following table illustrates the effect of an assumed change in the vehicle return rate and end-of-term market values mainly in the United States, which Toyota believes are the critical estimates, in determining the residual value losses, holding all other assumptions constant. The following table represents the impact on the residual value losses in Toyota’s financial services operations of the change in vehicle return rate and end-of-term market values for returned units as those changes have a significant impact on financial services operations.

	Yen in millions
	Effect on the residual value losses over the remaining terms of the operating leases on and after April 1, 2020
1 percent increase in vehicle return rate		3,483
1 percent increase in end-of-term market values		12,407

Impairment of Long-Lived Assets

Toyota periodically reviews the carrying value of its long-lived assets held and used and assets to be disposed of, including intangible assets, when events and circumstances warrant such a review. This review is performed using estimates of future cash flows. If the carrying value of a long-lived asset is considered impaired, an impairment charge is recorded for the amount by which the carrying value of the long-lived asset exceeds its fair value. Management believes that the estimates of future cash flows and fair values are reasonable. However, changes in estimates of such cash flows and fair values would affect the evaluations and negatively affect future operating results of the automotive operations.

Pension Costs and Obligations

Natures of estimates and assumptions

Pension costs and obligations are dependent on assumptions used in calculating such amounts. These assumptions include discount rates, benefits earned, interest costs, expected rate of return on plan assets, mortality rates and other factors. Actual results that differ from the assumptions are accumulated and amortized over future periods and, therefore, generally affect recognized expense in future periods. While management believes that the assumptions used are appropriate, differences in actual experience or changes in assumptions may affect Toyota’s pension costs and obligations.

The two most critical assumptions impacting the calculation of pension costs and obligations are the discount rates and the expected rates of returns on plan assets. Toyota determines the discount rates mainly based on the rates of high quality fixed income bonds or fixed income governmental bonds currently available and expected to be available during the period to maturity of the defined benefit pension plans. Toyota determines the expected rates of return for pension assets after considering several applicable factors including, the composition of plan assets held, assumed risks of asset management, historical results of the returns on plan assets, Toyota’s

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principal policy for plan asset management, and forecasted market conditions. A weighted-average discount rate of 0.6% domestically and 3.8% overseas and a weighted-average expected rate of return on plan assets of 2.4% domestically and 5.2% overseas were used in calculating Toyota’s consolidated pension costs for fiscal 2020. Also, a weighted-average discount rate of 0.6% domestically and 3.5% overseas were used in calculating Toyota’s consolidated pension obligations for fiscal 2020.

Sensitivity analysis

The following table illustrates the effects of assumed changes in weighted-average discount rates and the weighted-average expected rate of return on plan assets, which Toyota believes are critical estimates in determining pension costs and obligations, assuming all other assumptions are consistent.

	Yen in millions
	Domestic						Overseas
	Effect on pre-tax income for the year ended March 31, 2021			Effect on obligations for the year ended March 31, 2020			Effect on pre-tax income for the year ended March 31, 2021			Effect on obligations for the year ended March 31, 2020
Discount rates
0.5% decrease		(11,667	)		177,285			(9,397	)		109,224
0.5% increase		10,231			(155,206	)		7,908			(91,642	)
Expected rate of return on plan assets
0.5% decrease		(7,565	)					(4,345	)
0.5% increase		7,565						4,345

Derivatives and Other Contracts at Fair Value

Toyota uses derivatives in the normal course of business to manage its exposure to foreign currency exchange rates and interest rates. The accounting for derivatives is complex and continues to evolve. Toyota estimates the fair value of derivative financial instruments using industry-standard valuation models that require observable inputs including interest rates and foreign exchange rates, and the contractual terms. In other certain cases when market data is not available, key inputs to the fair value measurement include quotes from counterparties, and other market data. These estimates are based upon valuation methodologies deemed appropriate under the circumstances. However, the use of different assumptions may have a material effect on the estimated fair value amounts.

Marketable Securities and Other Securities Investments

Toyota evaluates debt securities designated as available-for-sale to be measured at fair value. Equity securities without readily determinable fair values are measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

Individual securities classified as available-for-sale are reduced to the fair value for other-than-temporary declines in market value. In determining if a decline in value is other-than-temporary, Toyota considers the length of time and the extent to which the fair value has been less than the carrying value, the financial condition and prospects of the entity issuing such securities and Toyota’s ability and intent to continue its investment in the entity for a period of time sufficient to allow for any anticipated recovery in market value. Realized gains and losses, which are determined based on the average-cost method, are reflected in the consolidated statements of income when realized.

Equity securities without readily determinable fair values are monitored for signs of impairment and assessed qualitatively to evaluate whether the investment is impaired. If the fair value of the investment is less than its carrying value, it shall be written down to its fair value.

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These estimates are based on valuation methods that are considered appropriate in each case. The significant assumptions involved in the estimations include observable market information as well as the financial condition and future prospects and trends of the investee. Due to the uncertain nature of these assumptions or by using different assumptions and estimates, the fair value may be impacted materially.

Deferred Tax Assets

The factors used to assess the likelihood of realization of the deferred tax assets are the future reversal of existing taxable temporary differences, the future taxable income and available tax planning strategies that are prudent and feasible. All available evidence, both positive and negative, is considered to determine whether, based on the weight of that evidence, a valuation allowance is needed for deferred tax assets which are not more-likely-than-not to be realized.

The accounting for deferred tax assets represents Toyota’s current best estimate based on all available evidence. Unanticipated events or changes could result in re-evaluating the realizability of deferred tax assets.

Outlook

Toyota intends to voluntarily adopt IFRS for its consolidated financial statements from fiscal 2021. Accordingly, Toyota’s forecast of consolidated financial results for fiscal 2021 is based on IFRS.

As for the global economy going forward, there is concern that there will be a sharp decline in many countries and regions due to the impact of COVID-19. The production and sales of automobiles have already been greatly affected. We hope that the outbreak will be contained as soon as possible, and the entire Toyota group will work as one to deal with this issue.

While we assume that the global automobile market as a whole, will gradually recover after bottoming out during April, May and June of 2020, leading the market to return to the same level as the previous year during the end of 2020 and the first half of 2021, the impact of COVID-19 is wide-ranging, significant and serious, and it is expected that weakness will continue for the time being.

Toyota expects that sales revenues for fiscal 2021 will decrease compared with fiscal 2020 due mainly to the decrease in vehicle unit sales. Toyota expects that operating income will decrease in fiscal 2021 compared with fiscal 2020 due mainly to the decrease in vehicle unit sales and the unfavorable impact of changes in exchange rates. Note that forecasts of income before income taxes, as well as net income attributable to owners of the parent, for the fiscal 2021 are not disclosed due to the difficulty of reasonably estimating those figures at this time, as such figures would reflect numerous factors of the impact of COVID-19, in addition to the assumptions above, which remain uncertain.

For the purposes of this outlook discussion, Toyota is assuming an average exchange rate of ¥105 to the U.S. dollar and ¥115 to the euro. Exchange rate fluctuations can materially affect Toyota’s operating results. In particular, a strengthening of the Japanese yen against the U.S. dollar can have a material adverse effect on Toyota’s operating results. See “Operating and Financial Review and Prospects — Operating Results — Overview — Currency Fluctuations” for further discussion.

The foregoing statements are forward-looking statements based upon Toyota’s management’s assumptions and beliefs regarding exchange rates, market demand for Toyota’s products, economic conditions and others. See “Cautionary Statement Concerning Forward-Looking Statements”. Toyota’s actual results of operations could vary significantly from those described above as a result of unanticipated changes in the factors described above or other factors, including those described in “Risk Factors,” particularly “— Regulatory, Legal, Political and Other Risks — Toyota has been, and expects to be adversely affected in the future by, the COVID-19 outbreak.”

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5.B LIQUIDITY AND CAPITAL RESOURCES

Historically, Toyota has funded its capital expenditures as well as its research and development activities through cash generated by operations.

In fiscal 2021, Toyota expects to sufficiently fund its capital expenditures as well as its research and development activities through cash and cash equivalents on hand, cash generated by operations, and debt financing taking into consideration its funding plans, which take into account the risk that COVID-19 will have a prolonged impact, and market trends. Toyota will use its funds to efficiently invest in maintenance and replacement of conventional manufacturing facilities and the introduction of new products, and will focus on investment in areas contributing to strengthening competitiveness and future growth for realization of a new mobility society. See “Information on the Company — Business Overview — Capital Expenditures and Divestitures” for information regarding Toyota’s material capital expenditures and divestitures for fiscal 2018, 2019 and 2020, and information concerning Toyota’s principal capital expenditures and divestitures currently in progress.

Toyota funds its financing programs for customers and dealers, including loans and leasing programs, from both cash generated by operations and borrowings by its sales finance subsidiaries. Toyota seeks to expand its ability to raise funds locally in markets throughout the world by expanding its network of finance subsidiaries.

Net cash provided by operating activities decreased by ¥175.9 billion to ¥3,590.6 billion for fiscal 2020, compared with ¥3,766.5 billion for fiscal 2019.

This decrease was mainly due to a decrease in operating income of ¥24.6 billion. Toyota changed the depreciation method of the parent company and Japanese subsidiaries to the straight-line method, effective as of April 1, 2019. The impact of this change for fiscal 2020 was a decrease in depreciation expense of ¥173.2 billion, which positively impacted operating income but not net cash provided by operating activities. In addition, booked operating income includes receivables and payables, so it is different from the movement of cash that is brought about or used by sales activities.

Net cash provided by operating activities decreased by ¥456.5 billion to ¥3,766.5 billion for fiscal 2019, compared with ¥4,223.1 billion for fiscal 2018.

The decrease was primarily attributable to the ¥380.0 billion decrease in accrued income tax due mainly to increase in fixed payment amount and the ¥141.4 billion increase in notes and accounts receivable due to the impact of the increased sales.

Net cash used in investing activities increased by ¥453.6 billion to ¥3,150.8 billion for fiscal 2020, compared with ¥2,697.2 billion for fiscal 2019. The increase was primarily attributable to the ¥572.7 billion increase in purchases of marketable securities and security investments and a decrease of ¥340.7 billion marketable securities and security investments being redeemed at maturity, partially offset by decrease in time deposits of ¥298.1 billion in order to secure liquidity of funds considering funding plans and market trends.

Net cash used in investing activities decreased by ¥962.8 billion to ¥2,697.2 billion for fiscal 2019, compared with ¥3,660.0 billion for fiscal 2018. The decrease was primarily attributable to the ¥1,212.5 billion decrease in purchase of marketable securities and security investments, partially offset by the ¥444.4 billion increase in investments and other assets.

Net cash provided by financing activities was ¥397.1 billion for fiscal 2020, compared with net cash used in financing activities of ¥540.8 billion for fiscal 2019, a ¥937.9 billion change. The change was primarily attributable to the ¥690.5 billion increase in funding by long-term debt.

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Net cash used in financing activities increased by ¥91.7 billion to ¥540.8 billion for fiscal 2019, compared with ¥449.1 billion for fiscal 2018. The increase was primarily attributable to the ¥183.4 billion impact of repayments of short-term debt having exceeded borrowings of short-term debt and ¥101.8 billion increase in repurchase and cancellation of treasury stock, partially offset by the ¥206.9 billion increase in funding by long-term debt.

Total capital expenditures for property, plant and equipment, excluding vehicles and equipment on operating leases, were ¥1,407.8 billion during fiscal 2020, remaining largely unchanged from the ¥1,452.7 billion in total capital expenditures during the prior fiscal year.

Total capital expenditures for vehicles and equipment on operating leases were ¥2,195.3 billion during fiscal 2020, remaining largely unchanged from the ¥2,286.1 billion in total capital expenditures during the prior fiscal year. Toyota expects investments in property, plant and equipment, excluding vehicles and equipment on operating leases, to be approximately ¥1,350.0 billion during fiscal 2021.

Cash and cash equivalents and restricted cash and cash equivalents were ¥4,412.1 billion as of March 31, 2020. Most of Toyota’s cash and cash equivalents and restricted cash and cash equivalents are held in Japanese yen or in U.S. dollars. In addition, time deposits were ¥828.2 billion and marketable securities were ¥678.7 billion as of March 31, 2020.

Liquid assets, which Toyota defines as cash and cash equivalents, time deposits, marketable debt securities and its investment in monetary trust funds were ¥10,447.4 billion during fiscal 2020, remaining largely unchanged from the prior fiscal year.

Trade accounts and notes receivable, less allowance for doubtful accounts decreased during fiscal 2020 by ¥277.8 billion, or 11.7%, to ¥2,094.8 billion. This decrease was due mainly to decreased revenue from sales.

Inventories decreased during fiscal 2020 by ¥221.4 billion, or 8.3%, to ¥2,434.9 billion. This decrease was due mainly to THC and Misawa Homes no longer being the parent company’s consolidated subsidiary companies.

Total finance receivables, net increased during fiscal 2020 by ¥109.2 billion to ¥17,038.0 billion, remaining largely unchanged from the end of the prior fiscal year. Finance receivables were geographically distributed as follows: in North America 55.8%, in Asia 13.0%, in Europe 12.6%, in Japan 8.8% and in Other 9.8%.

Marketable securities and other securities investments, including those included in current assets, decreased during fiscal 2020 by ¥579.7 billion, or 6.7%. This decrease was due mainly to SUBARU Co., Ltd. becoming an equity-method affiliated company.

Property, plant and equipment decreased during fiscal 2020 by ¥83.9 billion, or 0.8%, primarily reflecting THC and Misawa Homes no longer being the parent company’s consolidated subsidiary companies, partially offset by capital expenditures.

Accounts and notes payable decreased during fiscal 2020 by ¥211.8 billion, or 8.0%. This decrease was due mainly to a decrease in production volume.

Accrued expenses decreased during fiscal 2020 by ¥296.3 billion, or 9.2%. This decrease was due mainly to a decrease in accrued expenses resulting from quality related expenses.

Income taxes payable decreased during fiscal 2020 by ¥102.8 billion, or 32.1%. This decrease was mainly due to a decrease in tax expenses associated with the U.S. tax reform.

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Toyota’s total borrowings increased during fiscal 2020 by ¥402.7 billion, or 2.0%. Toyota’s short-term borrowings consist of loans with a weighted-average interest rate of 2.03% and commercial paper with a weighted-average interest rate of 1.50%. Short-term borrowings decreased during fiscal 2020 by ¥58.9 billion, or 1.1%, to ¥5,286.0 billion. Toyota’s long-term debt consists of unsecured and secured loans, medium-term notes, unsecured and secured notes etc. with weighted-average interest rates ranging from 1.85% to 7.52%, and maturity dates ranging from 2020 to 2048. The current portion of long-term debt increased during fiscal 2020 by ¥319.7 billion, or 7.5%, to ¥4,574.0 billion and the non-current portion increased by ¥141.9 billion, or 1.3%, to ¥10,692.8 billion. The increase in total borrowings resulted mainly from the increasing demand for financing associated with the increase in the lending balance. As of March 31, 2020, approximately 48% of long-term debt was denominated in U.S. dollars, 13% in euros, 11% in Japanese yen, 7% in Australian dollars, 5% in Thai baht, and 16% in other currencies. Toyota hedges interest rate risk exposure of fixed-rate borrowings by entering into interest rate swaps. There are no material seasonal variations in Toyota’s borrowings requirements.

As of March 31, 2020, Toyota’s total interest bearing debt was 102.5% of Toyota Motor Corporation shareholders’ equity, compared with 104.1% as of March 31, 2019.

The following table provides information on credit ratings of Toyota’s short-term borrowing and long-term debt from Standard & Poor’s Ratings Group (S&P), Moody’s Investors Services (Moody’s), and Rating and Investment Information, Inc. (R&I), as of May 31, 2020. A credit rating is not a recommendation to buy, sell or hold securities. A credit rating may be subject to withdrawal or revision at any time. Each rating should be evaluated separately of any other rating.

	S&P	Moody’s	R&I
Short-term borrowing	A-1+	P-1	—
Long-term debt	A+	A1	AAA

Toyota’s unfunded pension liabilities of Japanese plans increased during fiscal 2020 by ¥38.8 billion, or 7.8%, to ¥538.4 billion. The liabilities of foreign plans increased during fiscal 2020 by ¥34.8 billion, or 11.4%, to ¥338.9 billion. The unfunded amounts will be funded through future cash contributions by Toyota or in some cases will be settled on the retirement date of each covered employee. The increase in unfunded pension liabilities of the Japanese plans reflects mainly a decrease in plan assets that resulted from a decrease in stock prices. See note 20 to the consolidated financial statements for further discussion.

Toyota’s treasury policy is to maintain controls on all exposures, to adhere to stringent counterparty credit standards, and to actively monitor marketplace exposures. Toyota remains centralized, and is pursuing global efficiency of its financial services operations through Toyota Financial Services Corporation.

The key element of Toyota’s financial strategy is maintaining a strong financial position that will allow Toyota to fund its research and development initiatives, capital expenditures and financial services operations efficiently even if earnings are subject to short-term fluctuations. Toyota believes that it maintains sufficient liquidity for its present requirements, and that by maintaining its high credit ratings, it will continue to be able to access funds from external sources in large amounts and at relatively low costs. Toyota’s ability to maintain its high credit ratings is subject to a number of factors, some of which are not within Toyota’s control. These factors include general economic conditions in Japan and the other major markets in which Toyota does business, as well as Toyota’s successful implementation of its business strategy.

5.C RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES

Toyota’s research and development is dedicated to capturing the increasingly diverse and sophisticated market through the development of attractive, affordable, high-quality products for customers worldwide. The intellectual property that R&D generates is a vital management resource that Toyota utilizes and protects to maximize its corporate value. For a more detailed discussion of the company’s research and development objectives and policies, see “Information on the Company —Business Overview — Research and Development.”

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Toyota’s research and development expenditures were approximately ¥1,110.3 billion in fiscal 2020, ¥1,048.8 billion in fiscal 2019 and ¥1,064.2 billion in fiscal 2018.

Toyota operates a global research and development organization with the primary goal of building automobiles that meet the needs of customers in every region of the world. In Japan, research and development operations are led by Toyota and Toyota Central Research & Development Laboratories, Inc., which works closely with Daihatsu Motor Co., Ltd., Hino Motors, Ltd., Toyota Auto Body Co., Ltd., Toyota Motor East Japan, Inc., and many other Toyota group companies. Overseas, Toyota has a worldwide network of technical centers as well as design and motorsports research and development centers.

Toyota established Toyota Research Institute, Inc. (“TRI”) in January 2016 to accelerate research and development of artificial intelligence technology, which has significant potential to support future industrial technologies. In July 2017, Toyota Research Institute, Inc. invested $100 million to launch a venture capital fund designed to provide financing to startup companies, and is making investments in newly established promising startup companies in the four areas of artificial intelligence, robotics, autonomous mobility, and data and cloud technology. In May 2019, Toyota invested another $100 million to launch the second venture capital fund, and is making investments.

In Japan, Toyota established a new company, Toyota Research Institute-Advanced Development (“TRI-AD”), in March 2018 to further accelerate its efforts in advanced development for automated driving technology and related technologies. Its key objectives include creating a smooth software pipeline from research to commercialization, leveraging data-handling capabilities, strengthening collaboration in development within the Toyota group, including TRI, to accelerate development, and recruiting and employing top-level engineers globally, while cultivating and coordinating strong talent within the Toyota group.

Toyota also established a technical development center in Otemachi, Tokyo, Japan in October 2018 as a site for development of key IT technologies that will support automated driving in collaboration with TRI-AD, as well as promotion of collaboration with venture companies and creation of new value by utilizing big data.

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The following table provides information on Toyota’s principal research and development facilities.

Facility	Principal Activity
Japan
Toyota Technical Center	Product planning, style, design, prototype production and vehicle evaluation
Higashi-Fuji Technical Center	Advanced development
Tokyo Design Research & Laboratory	Advanced styling designs
Toyota Research Institute-Advanced Development (TRI-AD)	Development of artificial intelligence technology with a focus on automated driving technology
Otemachi Office	Development of key IT technologies, creation of new values by utilizing big data and collaboration with venture companies
Shibetsu Proving Ground	Evaluation
Toyota Central R&D Labs., Inc.	Basic research
United States
Toyota Motor Engineering and Manufacturing North America, Inc.	Product planning, design and evaluation of vehicles manufactured in North America
Calty Design Research, Inc.	Design
Toyota Research Institute of North America (TRI-NA)	Advanced research relating to “energy and environment,” “safety” and “mobility infrastructure”
Toyota Research Institute, Inc.	Research and development of artificial intelligence technology
Europe
Toyota Motor Europe NV/SA	Planning and evaluation of vehicles manufactured in Europe
Toyota Europe Design Development S.A.R.L.	Design
Toyota Motorsport GmbH	Development of motor sports vehicles
Asia Pacific
Toyota Daihatsu Engineering and Manufacturing Co., Ltd.	Planning and evaluation of vehicles manufactured in Australian and Asia.
China
Toyota Motor Engineering and Manufacturing (China) Co., Ltd.	Environmental technology design and evaluation in China
FAW Toyota Research & Development Co., Ltd	Design, evaluation and certification of vehicles manufactured in China
GAC Toyota Motor Co., Ltd. R&D Center	Design, evaluation and certification of vehicles manufactured in China
BYD Toyota EV Technology Co., Ltd.	Design and evaluation of EVs

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Toyota carefully analyzes patents and the need for patents in each area of research to formulate more effective research and development strategies. Toyota identifies research and development projects in which it should build a strong global patent portfolio.

In addition, Toyota wishes to contribute to sustainable mobility by promoting the spread of technologies with environmental and safety benefits. This is why Toyota takes an open stance to patent licensing and grants licenses when appropriate terms are met. In April 2019, from the perspective of contributing to the widespread use of electrified vehicles, taking its existing basic policy on intellectual property a step further, Toyota decided to grant royalty-free licenses through the end of 2030 on approximately 23,740 domestic and foreign patents it independently holds for vehicle electrification-related technologies that it has developed in its hybrid vehicle development.

For a further discussion of Toyota’s intellectual property, see “Information on the Company — Business Overview — Intellectual Property.”

5.D TREND INFORMATION

For a discussion of the trends that affect Toyota’s business and operating results, see “— Operating Results” and “— Liquidity and Capital Resources.”

5.E OFF-BALANCE SHEET ARRANGEMENTS

Toyota uses its securitization program as part of its funding through special purpose entities for its financial services operations. Toyota is considered as the primary beneficiary of these special purpose entities and therefore consolidates them. Toyota has not entered into any off-balance sheet securitization transactions during fiscal 2020.

Lending Commitments

Credit Facilities with Credit Card Holders

Toyota’s financial services operations issue credit cards to customers. As customary for credit card businesses, Toyota maintains credit facilities with holders of credit cards issued by Toyota. These facilities are used upon each holder’s requests up to the limits established on an individual holder’s basis. Although loans made to customers through these facilities are not secured, for the purposes of minimizing credit risks and of appropriately establishing credit limits for each individual credit card holder, Toyota employs its own risk management policy which includes an analysis of information provided by financial institutions in alliance with Toyota. Toyota periodically reviews and revises, as appropriate, these credit limits. Outstanding credit facilities with credit card holders were ¥193.7 billion as of March 31, 2020.

Credit Facilities with Dealers

Toyota’s financial services operations maintain credit facilities with dealers. These credit facilities may be used for business acquisitions, facilities refurbishment, real estate purchases, and working capital requirements. These loans are typically collateralized with liens on real estate, vehicle inventory, and/or other dealership assets, as appropriate. Toyota obtains a personal guarantee from the dealer or corporate guarantee from the dealership when deemed prudent. Although the loans are typically collateralized or guaranteed, the value of the underlying collateral or guarantees may not be sufficient to cover Toyota’s exposure under such agreements. Toyota evaluates the credit facilities according to the risks assumed in entering into the credit facility. Toyota’s financial services operations also provide financing to various multi-franchise dealer organizations, referred to as dealer groups, often as part of a lending consortium, for wholesale inventory financing, business acquisitions, facilities refurbishment, real estate purchases, and working capital requirements. Toyota’s outstanding credit facilities with dealers totaled ¥3,167.1 billion as of March 31, 2020.

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Guarantees

Toyota enters into certain guarantee contracts with its dealers to guarantee customers’ payments of their installment payables that arise from installment contracts between customers and Toyota dealers, as and when requested by Toyota dealers. Guarantee periods are set to match the maturity of installment payments, and as of March 31, 2020, ranged from one month to 8 years. However, they are generally shorter than the useful lives of products sold. Toyota is required to execute its guarantee primarily when customers are unable to make required payments.

The maximum potential amount of future payments as of March 31, 2020 is ¥3,333.3 billion. Liabilities for these guarantees of ¥10.6 billion have been provided as of March 31, 2020. Under these guarantee contracts, Toyota is entitled to recover any amounts paid by it from the customers whose obligations it guaranteed.

5.F TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

Contractual Obligations and Commitments

For information regarding debt obligations, finance lease obligations, operating lease obligations and other obligations, including amounts maturing in each of the next five years, see notes 12, 23 and 24 to the consolidated financial statements. In addition, as part of Toyota’s normal business practices, Toyota enters into long-term arrangements with suppliers for purchases of certain raw materials, components and services. These arrangements may contain fixed/minimum quantity purchase requirements. Toyota enters into such arrangements to facilitate an adequate supply of these materials and services.

The following tables summarize Toyota’s contractual obligations and commercial commitments as of March 31, 2020.

	Yen in millions
	Total		Payments Due by Period
			Less than 1 year		1 to 3 years		3 to 5 years		5 years and after
Contractual Obligations:
Short-term borrowings (note 12)
Loans		1,179,230		1,179,230		—		—		—
Commercial paper		4,106,796		4,106,796		—		—		—
Long-term debt* (note 12)		15,238,006		4,568,585		6,701,743		2,781,914		1,185,764
Estimated amount of interest expense on long-term debt		844,233		290,361		312,509		98,700		142,663
Finance lease obligations (note 23)		28,937		5,460		5,870		4,157		13,450
Non-cancelable operating lease obligations (note 23)		280,955		39,136		56,096		39,254		146,469
Commitments for the purchase of property, plant, other assets and services (note 24)		362,071		177,007		130,948		35,599		18,517
Total		22,040,228		10,366,575		7,207,166		2,959,624		1,506,863

* “Long-term debt” represents future principal payments.

Toyota is unable to make reasonable estimates of the period of cash settlement with respect to liabilities recognized for uncertain tax benefits, and accordingly such liabilities are excluded from the table above. See note 15 to the consolidated financial statements for further discussion.

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Toyota expects to contribute ¥38,667 million domestically and ¥17,749 million overseas to its pension plans in fiscal 2021.

	Yen in millions
	Total Amounts Committed		Amount of Commitment Expiration Per Period
			Less than 1 year		1 to 3 years		3 to 5 years		5 years and after
Commercial Commitments (note 24):
Maximum potential exposure to guarantees given in the ordinary course of business		3,333,385		823,856		1,445,449		890,552		173,528
Total Commercial Commitments		3,333,385		823,856		1,445,449		890,552		173,528

5.G SAFE HARBOR

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

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

6.A DIRECTORS AND SENIOR MANAGEMENT

In March 2011, Toyota announced its “Toyota Global Vision.” With respect to its framework for executing its operations, Toyota, with the aim of realizing the Toyota Global Vision, has been continuing its efforts to respond swiftly to the external environment, which is changing faster than ever. Following the introduction of “region-based operations,” the “business unit system” and the “in-house company system” in 2011, 2013 and 2016, respectively, for the purpose of further accelerating decision-making and operational execution, Toyota further clarified that members of the board of directors are responsible for decision-making and management oversight and that operating officers are responsible for operational execution. Furthermore, in 2018, Toyota changed the commencement of operating officers’ terms of office from April to January, reduced corporate strategy functions and restructured the Japan Sales Business Group based on regions rather than sales channels in an effort to enable decision-making closer to customers and the field, in order to further accelerate execution in full coordination with each site. In 2019, in order to further advance Toyota’s “acceleration of management” and the development of a diverse and talented workforce, the executive structure was changed to be composed only of senior managing officers and people of higher rank, and a new classification called “senior professional/senior management” (kanbushoku) grouped and replaced the following titles or ranks: managing officers, executive general managers, (sub-executive managerial level) senior grade 1 and senior grade 2 managers, and grand masters. From the perspective of appointing the right people to the right positions, senior professionals/senior management were positioned in a wide range of posts, from those of chief officer, deputy chief officer, plant general manager, and senior general manager to group manager, to deal with management issues as they arise and to strengthen their development as part of a diverse and talented workforce through on-site learning and problem-solving (genchi genbutsu). In April 2020, Toyota consolidated the posts of executive vice president and operating officer into the post of operating officer. With these consolidations, operating officers will serve as chief officers, as presidents of in-house companies, as regional CEOs, and as persons in charge of various functions, and their roles will be further clarified. Such roles will not be fixed, so as to allow the right people to take on responsibilities where and as needed. Based on its basic policy of appointing the right people to the right positions, Toyota has been swiftly and continuously innovating. Toyota will further press forward the tide of such innovations, aiming for a corporate structure capable of carrying out management from a viewpoint that is optimal for a global company.

Toyota believes that it is critical to appoint individuals who comprehend and are capable of putting into practice the Precepts, which set forth our founding philosophy, and contribute to decision-making aimed at

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sustainable growth into the future. Moreover, these individuals should be able to play a significant role in transforming TMC into a “mobility company” through responding to social transformation by using CASE* external partnerships based on trust and friendship and internal two-way interactive teamwork. Toyota maintains its board of directors and senior management at an adequate size, and ensures they are overall balanced and diverse, including from the perspective of gender and nationality. Three outside members of the board of directors have been appointed in order to further reflect the opinions of those from outside the company in management’s decision-making process. Toyota has six audit & supervisory board members, three of whom are outside audit & supervisory board members. In order to be prepared in the event Toyota lacks the number of audit & supervisory board members required by law, one substitute audit & supervisory board member has been appointed pursuant to Article 329, Paragraph 3 of the Companies Act.

* “CASE” is an acronym for Connected, Autonomous / Automated, Shared, and Electric.

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

Name (Date of birth)	Position	Brief career summary and important concurrent duties	Number and kind of shares
Takeshi Uchiyamada (August 17, 1946)	Chairman of the Board of Directors	1969 Joined Toyota Motor Corporation (“TMC”) 1998 Member of the Board of Directors of TMC 2001 Managing Director of TMC 2003 Senior Managing Director of TMC 2005 Executive Vice President of TMC 2012 Vice Chairman of TMC 2013 Chairman of TMC (to present) (important concurrent duties) Audit & Supervisory Board Member of Tokai Rika Co., Ltd. Audit & Supervisory Board Member of Toyoda Gosei Co., Ltd. Director of JTEKT Corporation Director of Mitsui & Co., Ltd.		77,039 common shares
Shigeru Hayakawa (September 15, 1953)	Vice Chairman of the Board of Directors	1977 Joined Toyota Motor Sales Co., Ltd. 2007 Managing Officer of TMC 2007 Toyota Motor North America, Inc. President 2009 Retired from Toyota Motor North America, Inc. President 2012 Senior Managing Officer of TMC 2015 Member of the Board of Directors and Senior Managing Officer of TMC 2017 Vice Chairman of TMC (to present) (important concurrent duties) Representative Director of Institute for International Economic Studies		36,480 common shares
Akio Toyoda (May 3, 1956)	President, Member of the Board of Directors	1984 Joined TMC 2000 Member of the Board of Directors of TMC 2002 Managing Director of TMC		4,752,927 common shares

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Name (Date of birth)	Position	Brief career summary and important concurrent duties	Number and kind of shares
		2003 Senior Managing Director of TMC 2005 Executive Vice President of TMC 2009 President of TMC (to present) (important concurrent duties) Chairman and CEO of Toyota Motor North America, Inc. Chairman of TOWA REAL ESTATE Co., Ltd. Chairman of the Japan Automobile Manufacturers Association, Inc. Director of DENSO Corporation
Koji Kobayashi (October 23, 1948)	Member of the Board of Directors, Operating Officer	1972 Joined TMC 2004 Executive Director of DENSO CORPORATION (“DENSO”) 2007 Senior Executive Director, Member of the Board of Directors of DENSO 2010 Executive Vice President of DENSO 2015 Vice Chairman of DENSO 2016 Advisor of TMC 2017 Senior Advisor of TMC 2018 Operating Officer (Executive Vice President) of TMC 2018 Member of the Board of Directors of DENSO 2018 Retired as Member of the Board of Directors of DENSO 2018 Member of the Board of Directors of TMC 2020 Member of the Board of Directors and Operating Officer of TMC (to present) (important concurrent duties) Chairman and Executive Director of TOYOTA Mobility Tokyo Inc.		24,216 common shares
Shigeki Terashi (February 16, 1955)	Member of the Board of Directors, Operating Officer	1980 Joined TMC 2008 Managing Officer of TMC 2008 Executive Vice President of Toyota Motor Engineering & Manufacturing North America, Inc. 2011 President and COO of Toyota Motor Engineering & Manufacturing North America, Inc. 2012 President and CEO of Toyota Motor Engineering & Manufacturing North America, Inc. 2012 President and COO of Toyota Motor North America, Inc. 2013 Retired from Toyota Motor Engineering & Manufacturing North America, Inc. President and CEO		49,602 common shares

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Name (Date of birth)	Position	Brief career summary and important concurrent duties	Number and kind of shares
		2013 Retired from Toyota Motor North America, Inc. President and COO 2013 Senior Managing Officer of TMC 2013 Member of the Board of Directors and Senior Managing Officer of TMC 2015 Executive Vice President, Member of the Board of Directors of TMC 2017 Member of the Board of Directors and Executive Vice President of TMC 2020 Member of the Board of Directors and Operating Officer of TMC (to present)
		(important concurrent duties) Director of Hino Motors, Ltd. President, Representative Director of EV C.A. Spirit Corporation
James Kuffner (January 18, 1971)	Member of the Board of Directors, Operating Officer	1999 Postdoctoral Research Fellow at the Japan Society for the Promotion of Science 2002 Research Scientist of the Robotics Institute at Carnegie Mellon University 2005 Assistant Professor of the Robotics Institute at Carnegie Mellon University 2008 Associate Professor of the Robotics Institute at Carnegie Mellon University 2009 Adjunct Associate Professor of the Robotics Institute at Carnegie Mellon University 2009 Research Scientist at Google Inc. 2013 Engineering Director of Google Inc. 2016 Chief Technology Officer of Toyota Research Institute, Inc. 2018 Chief Executive Officer of Toyota Research Institute - Advanced Development, Inc. (to present) 2018 Executive Advisor at Toyota Research Institute, Inc. (to present) 2020 Senior Fellow at TMC 2020 Member of the Board of Directors, Operating Officer at TMC (to present) (important concurrent duties) Chief Executive Officer of Toyota Research Institute - Advanced Development, Inc.
Ikuro Sugawara (March 6, 1957)	Outside Member of the Board of Directors	1981 Joined Ministry of International Trade and Industry 2010 Director-General of the Industrial Science and Technology Policy and Environment Bureau, Ministry of Economy, Trade and Industry		—

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Name (Date of birth)	Position	Brief career summary and important concurrent duties	Number and kind of shares
		2012 Director-General of the Manufacturing Industries Bureau, Ministry of Economy, Trade and Industry 2013 Director-General of the Economic and Industrial Policy Bureau, Ministry of Economy, Trade and Industry 2015 Vice-Minister of Ministry of Economy, Trade and Industry 2017 Retired from the Ministry of Economy, Trade and Industry 2017 Special Advisor to the Cabinet 2018 Retired from Special Advisor to the Cabinet 2018 Outside Member of the Board of Directors of TMC (to present)
Sir Philip Craven (July 4, 1950)	Outside Member of the Board of Directors	1989 President of the International Wheelchair Basketball Federation 2001 President of the International Paralympic Committee 2002 Retired as President of the International Wheelchair Basketball Federation 2017 Retired as President of the International Paralympic Committee 2018 Outside Member of the Board of Directors of TMC (to present)		—
Teiko Kudo (May 22, 1964)	Outside Member of the Board of Directors	1987 Joined the Sumitomo Bank, Limited 2014 Executive Officer of Sumitomo Mitsui Banking Corporation 2017 Managing Executive Officer of Sumitomo Mitsui Banking Corporation 2018 Outside Member of the Board of Directors of TMC (to present) 2020 Director and Senior Managing Executive Officer of Sumitomo Mitsui Banking Corporation (important concurrent duties) Senior Managing Executive Officer of Sumitomo Mitsui Banking Corporation		915 common shares
Haruhiko Kato (July 21, 1952)	Full-time Audit & Supervisory Board Member	1975 Joined Ministry of Finance 2007 Director-General of the Tax Bureau, Ministry of Finance 2009 Commissioner of National Tax Agency 2010 Retired from Commissioner of National Tax Agency 2011 Senior Managing Director of Japan Securities Depository Center, Inc. 2011 President of Japan Securities Depository Center, Inc.		—

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Name (Date of birth)	Position	Brief career summary and important concurrent duties	Number and kind of shares
		2013 Member of the Board of Directors of TMC (to present) 2015 President and CEO of Japan Securities Depository Center, Inc. 2018 Retired as Member of the Board of Directors of TMC 2019 Director of Japan Securities Depository Center, Inc. 2019 Audit & Supervisory Board Member of TMC (to present) 2019 Retired as Director of Japan Securities Depository Center, Inc. (important concurrent duties) Outside Director of Canon Inc.
Masahide Yasuda (April 1, 1949)	Full-time Audit & Supervisory Board Member	1972 Joined TMC 2000 General Manager of Overseas Parts Division of TMC 2007 President of Toyota Motor Corporation Australia Ltd. 2014 Chairman of Toyota Motor Corporation Australia Ltd. 2017 Retired as Chairman of Toyota Motor Corporation Australia Ltd. 2018 Audit & Supervisory Board Member of TMC (to present)		9,793 common shares
Katsuyuki Ogura (January 25, 1963)	Full-time Audit & Supervisory Board Member	1985 Joined TMC 2015 General Manager of Affiliated Companies Finance Dept. of TMC 2018 General Manager of Audit & Supervisory Board Office of TMC 2019 Audit & Supervisory Board Member of TMC (to present)		4,405 common shares
Yoko Wake (November 18, 1947)	Outside Audit & Supervisory Board Member	1970 Joined the Fuji Bank, Limited 1973 Retired from the same 1977 Assistant Lecturer of Faculty of Business and Commerce of Keio University 1982 Associate Professor of the same 1993 Professor of the same 2011 Outside Audit & Supervisory Board Member of TMC (to present) 2013 Professor Emeritus of Keio University (to present) (important concurrent duties) Professor Emeritus of Keio University		—
Hiroshi Ozu (July 21, 1949)	Outside Audit & Supervisory Board Member	2012 Prosecutor-General 2014 Retired from Prosecutor-General 2014 Registered as Attorney 2015 Outside Audit & Supervisory Board Member of TMC (to present)		89 common shares

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Name (Date of birth)	Position	Brief career summary and important concurrent duties	Number and kind of shares
		(important concurrent duties) Attorney Outside Corporate Auditor of Mitsui & Co., Ltd. Audit & Supervisory Board Member (External) of Shiseido Company, Limited
Nobuyuki Hirano (October 23, 1951)	Outside Audit & Supervisory Board Member	1974 Joined Mitsubishi Bank 2001 Executive Officer of The Bank of Tokyo-Mitsubishi, Ltd. 2004 Executive Officer of Mitsubishi UFJ Financial Group, Inc.		493 common shares
		2005 Managing Executive Officer of The Bank of Tokyo-Mitsubishi, Ltd. 2005 Director of Mitsubishi UFJ Financial Group, Inc. 2006 Managing Director of The Bank of Tokyo-Mitsubishi UFJ, Ltd. 2008 Senior Managing Director of The Bank of Tokyo-Mitsubishi UFJ, Ltd. 2009 Managing Executive Officer of Mitsubishi UFJ Financial Group, Inc. 2010 Deputy President of Mitsubishi UFJ Financial Group, Inc. 2012 President of The Bank of Tokyo-Mitsubishi UFJ, Ltd. 2012 Director of Mitsubishi UFJ Financial Group, Inc. 2013 President & CEO of Mitsubishi UFJ Financial Group, Inc. 2015 Director, President & Group CEO of Mitsubishi UFJ Financial Group, Inc. 2016 Chairman of the Board of Directors of Bank of Tokyo-Mitsubishi UFJ, Ltd. 2018 Outside Audit & Supervisory Board Member of TMC (to present) 2019 Director, Chairman of Mitsubishi UFJ Financial Group, Inc. (to present) 2019 Member of the Board of Directors of MUFG Bank, Ltd. (important concurrent duties) Director, Chairman of Mitsubishi UFJ Financial Group, Inc. Directors of MUFG Bank, Ltd. Director of Morgan Stanley Audit and Supervisory Committee Member of Mitsubishi Heavy Industries, Ltd.

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

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

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None of the persons listed above was selected as member of board of directors, audit & supervisory board member or member of senior management pursuant to an arrangement or understanding with Toyota’s major shareholders, customers, suppliers or others.

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

Name (Date of birth)	Position	Brief career summary and important concurrent duties	Number and kind of shares
Ryuji Sakai (August 7, 1957)	Substitute Audit & Supervisory Board Member	1985 Registered as attorney and joined Nagashima & Ohno 1990 Wilson Sonsini Goodrich & Rosati 1995 Partner of Nagashima & Ohno 2000 Partner of Nagashima Ohno & Tsunematsu (to present) (important concurrent duties) Attorney Outside Audit & Supervisory Board Member of Kobayashi Pharmaceutical Co., Ltd.		—

6.B COMPENSATION

Decision Making Policy and Process

Toyota believes that it is critical to appoint individuals who comprehend and are capable of putting into practice the Toyoda Precepts, which set forth our founding philosophy, and contribute to decision-making aimed at sustainable growth into the future. Moreover, these individuals should be able to play a significant role in transforming TMC into a “mobility company” through responding to social transformation by using CASE external partnerships based on trust and friendship and internal two-way interactive teamwork. Toyota’s director compensation system is an important means through which to promote various initiatives and is determined based on the following policy.

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

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

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

Remuneration for members of the board of directors is effectively linked to corporate performance while reflecting individual job responsibilities and performance. Remuneration standards in each member’s home country are also taken into account when determining remuneration amounts and methods. Remuneration for outside members of the board of directors and audit & supervisory board members consists only of fixed payments. As a result, this remuneration is not readily impacted by business performance, helping to ensure independence from management.

Based on the resolution of the 115th Ordinary General Shareholders’ Meeting held on June 13, 2019 concerning remuneration for the members of the board of directors of Toyota, the maximum cash compensation was set at 3.0 billion yen per year (of which, the maximum amount payable to outside members of the board of directors is 0.3 billion yen per year), and the maximum share compensation was set at 4.0 billion yen per year. The number of members of the board of directors as of the conclusion of the 115th Ordinary General Shareholders’ Meeting was nine (including three outside members of the board of directors).

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The amount of remuneration for audit & supervisory board members of Toyota was set at 30 million yen or less per month at the 104th Ordinary General Shareholders’ Meeting held on June 24, 2008. The number of audit & supervisory board members as of the conclusion of the 104th Ordinary General Shareholders’ Meeting was seven.

The amounts of remuneration for the Company’s members of the board of directors and the remuneration system are decided by the board of directors and the “Executive Compensation Meeting,” a majority of the members of which are outside members of the board of directors. The Executive Compensation Meeting consists of Representative Directors Takeshi Uchiyamada (Chairman) and Koji Kobayashi, and outside members of the board of directors Ikuro Sugawara, Sir Philip Craven and Teiko Kudo.

The board of directors resolves the total amount of remuneration for a given fiscal year and delegates the determination of the amount of remuneration for each member of the board of directors to the Executive Compensation Meeting.

The Executive Compensation Meeting reviews the remuneration system for members of board of directors and senior management and determines the amount of remuneration for each member of the board of directors, taking into account factors such as corporate performance as well as individual job responsibilities and performance.

Remuneration for audit & supervisory board members is determined by the audit & supervisory board within the scope determined by resolution of the shareholders’ meeting.

Executive Compensation Meetings were held in April 2019 and March and April 2020 to discuss and determine the amount of remuneration for fiscal 2020 and other relevant matters.

Furthermore, preliminary examination meetings, consisting only of outside members of the board of directors, were held on a total of five occasions in August, September, October and December 2019 and February 2020 to discuss matters for the Executive Compensation Meetings. Remuneration for the members of the board of directors were determined with the unanimous consent of the Executive Compensation Meeting.

The principal topics discussed at Executive Compensation Meetings included:

• Remuneration level for each position and job responsibility

• Evaluation of benchmarks and actual results of fiscal 2020

• Evaluation of individual performance

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

Method of Determining Performance-based Remuneration

Directors with Japanese citizenship (excluding outside members of the board of directors)

Toyota sets the total amount of remuneration (“Annual Total Remuneration”) received by each member of the board of directors in a year based on consolidated operating income, the volatility of the share price of Toyota and individual performance evaluation. The balance after deducting fixed remuneration from Annual Total Remuneration constitutes performance-based remuneration.

Toyota determines the annual total remuneration level appropriate for each position and job responsibility by referring to the benchmarking result of remuneration for officers of Japanese major companies.

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Concept of Each Item

Consolidated operating income	Indicator for evaluating Toyota’s efforts based on business performance
Volatility of the share price	Corporate value indicator for shareholders and investors to evaluate Toyota’s efforts
Individual performance evaluation	Qualitative evaluation of performance of each member of the board of directors

Method and Reference Value for Evaluating Indicators and Evaluation Result for Fiscal 2020

	Evaluation Method	Reference Value	Evaluation Result for   Fiscal 2019
Consolidated operating income	Evaluate the degree of attainment of consolidated operating income in fiscal 2020, using required income (set in 2011) for Toyota’s sustainable growth as reference value	¥1 trillion	180%
Volatility of the Company’s share price	Comparatively evaluate the volatility of Toyota’s share price up to the end of fiscal 2020, using the share price of Toyota and the Nikkei stock average at the end of fiscal 2019 as reference values	Company’s share price: ¥6,487 Nikkei average: ¥21,205

Method of Setting Annual Total Remuneration

Annual Total Remuneration is set using a theoretical formula that takes into account the benchmarking results of remuneration for members of the board of directors. Annual Total Remuneration is set for each member of the board of directors based on consolidated operating income and the volatility of the share price of Toyota, and then adjusted based on individual performance evaluation. Individual performance evaluation is set within the range of 15% above or below Annual Total Remuneration for each position.

Directors with foreign citizenship (excluding outside members of the board of directors)

Fixed remuneration and performance-based remuneration are set based on the remuneration levels and structures that allow Toyota to secure and retain talented personnel. Fixed remuneration is set, taking into account each member’s job responsibilities and the remuneration standards of such member’s home country. Performance-based remuneration is set based on consolidated operating income, the volatility of the share price of Toyota and individual performance, taking into account each member’s job responsibilities and the remuneration standards of such member’s home country. The concept of each item is the same as that for directors with Japanese citizenship (excluding outside members of the board of directors).

Compensation

The aggregate amount of remuneration, including bonuses, accrued for all members of the board of directors and audit & supervisory board members as a group by Toyota for services in all capacities was ¥2,690 million during fiscal 2020.

Toyota Motor Corporation and its subsidiaries have not set aside or accrued any amounts to provide pension, retirement or similar benefits to members of the board of directors and audit & supervisory board members of Toyota Motor Corporation.

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Toyota’s Annual Securities Report filed with the Kanto Local Bureau of Finance on June 24, 2020, contained the following information concerning compensation in fiscal 2020 on a consolidated basis for members of the board of directors and audit & supervisory board members whose total compensation exceeded ¥100 million during such period:

- Takeshi Uchiyamada, Member of the Board of Directors: ¥216 million (¥99 million in base compensation, ¥60 million in bonus and ¥56 million in share compensation (8,000 shares))

- Shigeru Hayakawa, Member of the Board of Directors: ¥138 million (¥61 million in base compensation, ¥41 million in bonus and ¥36 million in share compensation (5,000 shares))

- Akio Toyoda, Member of the Board of Directors: ¥449 million (¥160 million in base compensation, ¥8 million in bonus and ¥280 million in share compensation (39,000 shares))

- Koji Kobayashi, Member of the Board of Directors: ¥145 million (¥72 million in base compensation and ¥72 million in share compensation (10,000 shares))

- Didier Leroy, Member of the Board of Directors: ¥1,239 million (¥257 million in base compensation and ¥980 million in bonus)

- Shigeki Terashi, Member of the Board of Directors: ¥141 million (¥73 million in base compensation, ¥37 million in bonus and ¥31 million in share compensation (4,000 shares))

The amounts above were recorded as expenses in fiscal 2020.

6.C BOARD PRACTICES

Toyota’s articles of incorporation provide for a board of directors of not more than 20 members and for not more than seven audit & supervisory board members. Shareholders elect the members of the board of directors and audit & supervisory board members at the general shareholders’ meeting. The normal term of office of a member of the board of directors is one year and that of an audit & supervisory board member is four years. Members of the board of directors and audit & supervisory board members may serve any number of consecutive terms.

The board of directors may appoint one Chairman of the Board of Directors and one President, as well as one or more Vice Chairmen of the Board and Executive Vice Presidents. The board of directors elects, pursuant to its resolutions, one or more Representative Directors. Each Representative Director represents Toyota generally in the conduct of its affairs. The board of directors has the ultimate responsibility for the administration of Toyota’s affairs. None of Toyota’s members of the board of directors is party to a service contract with Toyota or any of its subsidiaries that provides for benefits upon termination of employment.

Under the Companies Act and Toyota’s articles of incorporation, Toyota may, by a resolution of its board of directors, exempt members of the board of directors (including former members of the board of directors) from their liabilities to Toyota arising in connection with their failure to execute their duties within the limits stipulated by laws and regulations. In addition, Toyota may enter into a liability limitation agreement with each member of the board of directors (excluding executive members of the board of directors, among others) which limits the maximum amount of their liabilities owed to Toyota arising in connection with their failure to execute their duties to an amount equal to the minimum liability limit amount prescribed in the laws and regulations.

Under the Companies Act, Toyota must have at least three audit & supervisory board members. At least half of the audit & supervisory board members are required to be an “outside” audit & supervisory board member, which is any person who satisfies all of the following requirements:

(a) the person has never been a member of the board of directors, accounting counselor (in the case that an accounting counselor is a legal entity, an employee of such entity who is in charge of its affairs), executive

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officer, manager or employee of Toyota or its subsidiaries during the ten year period before becoming an outside audit & supervisory board member;

(b) if the person was an audit & supervisory board member of Toyota or any of its subsidiaries at any time during the ten year period before becoming an outside audit & supervisory board member, such person has not been a member of the board of directors, accounting counselor (in the case that an accounting counselor is a legal entity, an employee of such entity who is in charge of its affairs), executive officer, manager or employee of Toyota or any of its subsidiaries during the ten year period before becoming an audit & supervisory board member of Toyota or any of its subsidiaries; and

(c) the person is not a spouse or relative within the second degree of kinship of any member of the board of directors or manager or other key employee of Toyota.

The audit & supervisory board members may not at the same time be a member of the board of directors, accounting counselor (in case that an accounting counselor is a judicial person, a member of such judicial person who is in charge of its affairs), executive officers, general managers or employees of Toyota or any of its subsidiaries. Together, these audit & supervisory board members form the audit & supervisory board. The audit & supervisory board members have the duty to examine the financial statements and business reports which are submitted by the board of directors to the general shareholders’ meeting. The audit & supervisory board members also monitor the administration of Toyota’s affairs by the members of the board of directors. Audit & supervisory board members are not required to be, and Toyota’s audit & supervisory board members are not, certified public accountants. They are required to participate in meetings of the board of directors but are not entitled to vote.

Under the Companies Act and Toyota’s articles of incorporation, Toyota may, by a resolution of its board of directors, exempt audit & supervisory board members (including former audit & supervisory board members) from their liabilities to Toyota arising in connection with their failure to execute their duties within the limits stipulated by laws and regulations. In addition, Toyota may enter into a liability limitation agreement with each audit & supervisory board member which limits the maximum amount of their liabilities owed to Toyota arising in connection with their failure to execute their duties to an amount equal to the minimum liability limit amount prescribed in the laws and regulations.

Toyota does not have a remuneration committee. However, members of Toyota’s Executive Compensation Meeting discuss remuneration for members of the board of directors.

The Executive Compensation Meeting reviews the remuneration system for members of the board of directors and senior management and determines the amount of remuneration for each member of the board of directors, taking into account factors such as corporate performance as well as individual job responsibilities and performance. The members of the meeting are Takeshi Uchiyamada, the Chairman of the Board of Directors, and Koji Kobayashi, Ikuro Sugawara, Sir Philip Craven and Teiko Kudo, each, a Member of the Board of Directors.

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6.D EMPLOYEES

The total number of Toyota employees, on a consolidated basis, was 359,542 as of March 31, 2020, 370,870 as of March 31, 2019 and 369,124 as of March 31, 2018. The following tables set forth a breakdown of persons employed by business segment and by geographic location as of March 31, 2020.

Segment	Number of Employees	Location	Number of Employees
Automotive	320,389	Japan	200,244
Financial services	11,618	North America	51,080
All other	22,559	Europe	21,956
Unallocated	4,976	Asia	64,613
		Other*	21,649
Total	359,542	Total	359,542
		* “Other” consists of Central and South America, Oceania, Africa and the Middle East.

Most regular employees of Toyota Motor Corporation and its consolidated subsidiaries in Japan, other than management, are required to become members of the labor unions that compose the Federation of All Toyota Workers’ Unions. Approximately 87% of Toyota Motor Corporation’s regular employees in Japan are members of this union.

In Japan, basic wages and other working conditions are negotiated annually. In addition, in accordance with Japanese national custom, each employee is also paid a semi-annual bonus. Bonuses are negotiated at the time of wage negotiations and are based on Toyota’s financial results, prospects and other factors. The average wage increase for all union members, excluding bonuses, in Japan was approximately 2.39% in fiscal 2020.

In general, Toyota considers its labor relations with all of its workers to be good. However, Toyota is currently a party to, and otherwise from time to time experiences, labor disputes in some of the countries in which it operates. Toyota does not expect any disputes to which it is currently a party to materially affect Toyota’s consolidated financial position.

Toyota’s average number of temporary employees on a consolidated basis was 86,219 during fiscal 2020.

6.E SHARE OWNERSHIP

For information on the number of shares of Toyota’s common stock held by each member of the board of directors and audit & supervisory board member as of June 2020, see “—Directors and Senior Management.”

None of Toyota’s shares of common stock entitles the holder to any preferential voting rights. As of March 31, 2020, Toyota does not have any stock option plan for which stock options or stock acquisition rights are exercisable or will become exercisable in the future.

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

Eligible persons	Members of the board of directors of Toyota (excluding outside members of the board of directors)
Total amount of the share compensation	Maximum of 4.0 billion yen per year
Amount of the share compensation payable to each member of the board of directors	Set each year considering factors such as corporate results, duties, and performance
Type of shares to be allotted and method of allotment	Issue or disposal of common shares (with transfer restrictions under an allotment agreement)
Total number of shares to be allotted	Maximum of 800,000 shares per year in total to eligible members of the board of directors
Amount to be paid	Determined by the board of directors of Toyota based on the closing price of Toyota’s common shares on the Tokyo Stock Exchange on the business day prior to each resolution of the board of directors, within a range that is not particularly advantageous to eligible members of the board of directors
Transfer restriction period	A period of three to fifty years from the allotment date, which is determined by the board of directors of Toyota in advance
Conditions for removal of transfer restrictions	Restrictions will be removed upon the expiration of the transfer restriction period. However, restrictions will also be removed in the case of expiration of the term of office, death, or other legitimate reasons.
Gratis acquisition by Toyota	Toyota will be able to acquire all allotted shares without consideration in the case of violations of laws and regulations or other reasons specified by the board of directors of Toyota during the transfer restriction period.

Members of the board of directors of Toyota with foreign citizenship are not eligible for the share compensation.

Toyota also has an employee stock ownership association in Japan for employees and full time and part time company advisors. Members of the employee stock ownership association set aside certain amounts from their monthly salary and bonuses to purchase Toyota’s common stock through the employee stock ownership association. As of March 31, 2020, the employee stock ownership association held 14,734,167 shares of Toyota’s common stock.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

7.A MAJOR SHAREHOLDERS

As of March 31, 2020, 3,262,997,492 shares of Toyota’s common stock (of which 496,844,960 shares were treasury stock and 2,766,152,532 shares were outstanding) and 47,100,000 First Series Model AA Class Shares of Toyota (of which 100 shares were treasury stock and 47,099,900 shares were outstanding) were issued. Information concerning beneficial ownership of Toyota’s common stock in the table below was prepared from information known to Toyota or that could be ascertained from public filings, including filings made by Toyota’s shareholders regarding their ownership of Toyota’s common stock under the Financial Instruments and Exchange Law of Japan.

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Under the Financial Instruments and Exchange Law, any person who becomes, beneficially and solely or jointly, a holder, including, but not limited to, a deemed holder who manages shares for another holder pursuant to a discretionary investment agreement, of more than 5% of the total issued shares of a company listed on a Japanese stock exchange (including ADSs representing such shares) must file a report concerning the shareholding with the director of the relevant local finance bureau. A similar report must be filed, with certain exceptions, if the percentage of shares held by a holder, solely or jointly, of more than 5% of the total issued shares of a company increases or decreases by 1% or more, or if any change to a material matter set forth in any previously filed reports occurs.

Based on information known to Toyota or can be ascertained from public filings, the following table sets forth the beneficial ownership of holders of 5% or more of Toyota’s common stock as of the most recent practicable date. Toyota is not aware of any holder of First Series Model AA Class Shares who beneficially owns 5% or more of Toyota’ outstanding First Series Model AA Class Shares.

Name of Beneficial Owner	Number of Shares of Common Stock (in thousands)		Percentage of Outstanding Voting Shares of Common Stock
Toyota Industries Corporation		238,466		8.48

According to The Bank of New York Mellon, depositary for Toyota’s ADSs (the “Depositary”), as of March 31, 2020, 43,321,651 shares of Toyota’s common stock were held in the form of ADRs and there were 1,783 ADR holders of record and 185,878 beneficial owners in the United States. According to Toyota’s register of shareholders, as of March 31, 2020, there were 587,947 holders of common stock and First Series Model AA Class Shares of record worldwide. As of March 31, 2020, there were 486 record holders of Toyota’s common stock with addresses in the United States, whose shareholdings represented approximately 8.6% of the issued common stock on that date. Because some of these shares were held by brokers or other nominees, the number of record holders with addresses in the United States might not fully show the number of beneficial owners in the United States.

None of Toyota’s shares of common stock entitles the holder to any preferential voting rights.

To the extent known to Toyota, Toyota is not owned or controlled, directly or indirectly, by another corporation, any foreign government or any natural or legal person.

Toyota knows of no arrangements the operation of which may at a later time result in a change of control.

7.B RELATED PARTY TRANSACTIONS

Business Relationships

Toyota purchases materials, supplies and services, among others, from numerous suppliers throughout the world in the ordinary course of business, including Toyota’s affiliated companies accounted for by the equity method and those firms with which certain members of Toyota’s board of directors are affiliated. Toyota purchased materials, supplies and services, among others, from these affiliated entities in the amount of ¥6,781.2 billion in fiscal 2020. Toyota also sells its products and services, among others, to Toyota’s affiliated companies accounted for by the equity method and firms with which certain members of Toyota’s board of directors are affiliated. Toyota sold products and services, among others, to these affiliated entities in the amount of ¥2,423.3 billion in fiscal 2020. See note 11 of Toyota’s consolidated financial statements for additional information regarding Toyota’s investments in and transactions with affiliated companies.

Loans

Toyota regularly has trade accounts and other receivables by, and accounts payable to, Toyota’s affiliated companies accounted for by the equity method and firms with which certain members of Toyota’s board of

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directors are affiliated. Toyota had outstanding trade accounts and other receivables by these affiliated entities in the amount of ¥357.8 billion as of March 31, 2020. Toyota had outstanding trade accounts and other payables to these affiliated entities in the amount of ¥7,809 billion as of March 31, 2020.

Toyota, from time to time, provides short- to medium-term loans to its affiliated companies, as well as loans under a loan program established by certain subsidiaries to assist their executives and members of the board of directors with the purchase of homes. As of March 31, 2020, an aggregate amount of ¥32.6 billion in loans was outstanding to its affiliated companies accounted for by the equity method. As of March 31, 2020, an aggregate amount of ¥35.2 billion in loans was outstanding to those of its affiliated companies not accounted for by the equity method, which are 20% to 50% owned by Toyota. Toyota believes that each of these loans was entered into in the ordinary course of business.

7.C INTERESTS OF EXPERTS AND COUNSEL

Not applicable.

ITEM 8. FINANCIAL INFORMATION

8.A CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

1-3. Consolidated Financial Statements. Toyota’s audited consolidated financial statements are included under “Item 18 — Financial Statements.” Except for Toyota’s consolidated financial statements included under Item 18, no other information in this annual report has been audited by Toyota’s auditors.

4. Not applicable.

5. Not applicable.

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

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

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

8.B SIGNIFICANT CHANGES

Except as disclosed in this annual report, there have been no significant changes since the date of Toyota’s latest annual financial statements.

ITEM 9. THE OFFER AND LISTING

9.A LISTING DETAILS

Shares of Toyota common stock are traded on the Tokyo Stock Exchange and the Nagoya Stock Exchange under the ticker symbol “7203” in Japan, and on the London Stock Exchange under the ticker symbol “TYT.” Toyota’s American Depositary Shares, or ADSs, each representing two shares of Toyota common stock, are listed on the New York Stock Exchange, or NYSE, under the ticker symbol “TM.” Toyota’s Model AA Class Shares are not listed on any securities exchange.

9.B PLAN OF DISTRIBUTION

Not applicable.

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9.C MARKETS

The primary trading market for Toyota’s common stock is the Tokyo Stock Exchange. The common stock is also listed on the Nagoya Stock Exchange and on the London Stock Exchange.

Since September 29, 1999, American Depositary Shares, each equal to two shares of Toyota’s common stock and evidenced by American Depositary Receipts, have been traded and listed on the New York Stock Exchange through a sponsored ADR facility operated by The Bank of New York Mellon, as Depositary. Prior to that time, Toyota’s ADSs were listed on the Nasdaq SmallCap Market through five unsponsored ADR facilities.

9.D SELLING SHAREHOLDERS

Not applicable.

9.E DILUTION

Not applicable.

9.F EXPENSES OF THE ISSUE

Not applicable.

ITEM 10. ADDITIONAL INFORMATION

10.A SHARE CAPITAL

Not applicable.

10.B MEMORANDUM AND ARTICLES OF ASSOCIATION

Except as otherwise stated, set forth below is information relating to Toyota’s common stock and Model AA Class Shares, including brief summaries of the relevant provisions of Toyota’s articles of incorporation and share handling regulations, as currently in effect, and of the Companies Act, Act Concerning Book-Entry Transfer of Corporate Bonds, Shares and Other Securities (the “Book-Entry Transfer Act”) and related legislation.

General

Toyota’s authorized number of shares as of March 31, 2019 was 10,000,000,000 common shares, of which 3,262,997,492 shares were issued. The articles of incorporation was amended at the 111th Ordinary General Shareholders’ Meeting held in June 2015 and Toyota’s authorized number of shares was changed to 10,000,000,000 shares, with the total number of authorized shares per class, of 10,000,000,000 for common shares, 50,000,000 for First Series Model AA Class Shares, 50,000,000 for Second Series Model AA Class Shares, 50,000,000 for Third Series Model AA Class Shares, 50,000,000 for Fourth Series Model AA Class Shares and 50,000,000 for Fifth Series Model AA Class Shares, and the total number of shares authorized to be issued with respect to First Series Model AA Class Shares through the Fifth Series Model AA Class Shares not to exceed 150,000,000 shares. As of June 21, 2019, there were 47,100,000 shares of First Series Model AA Class Shares issued and outstanding. Neither the common shares nor the First Series Model AA Class Shares have any par value.

Toyota does not issue share certificates for its shares. In accordance with the Companies Act, the Book-Entry Transfer Act and Toyota’s articles of incorporation, Toyota’s common shares are recorded or registered on (i) Toyota’s register of shareholders and (ii) transfer account books of the Japan Securities Depository Center, Inc. (“JASDEC”) which is a book-entry transfer institution and securities firms, banks or other account

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management institutions. The transfer of common shares will generally become effective once the transfer is recorded in the transferee’s account. There are no restrictions imposed by Toyota’s articles of incorporation or share handling regulations on the transfer of common shares. In order to assert shareholders’ rights against Toyota, a shareholder must generally have his or her name and address recorded or registered on Toyota’s register of shareholders. A holder of common shares can assert minority shareholders’ rights (shareholders’ rights for which Toyota has not set a record date) against Toyota if JASDEC provides an individual shareholder notice to Toyota upon the shareholder’s request. The shareholder of deposited shares underlying the ADSs is the Depositary for the ADSs. Accordingly, holders of ADSs will not be able directly to assert shareholders’ rights.

A holder of common shares must have a transfer account to transfer shares. Holders of common shares who do not have a transfer account with JASDEC must have an account with an account management institution that directly or indirectly has a transfer account with JASDEC. Once Toyota decides on the record date for its shareholders’ meeting or makes a request to JASDEC based on justifiable grounds, JASDEC will promptly provide to Toyota names, addresses and other information with respect to the holders of Toyota’s common shares who are recorded on the transfer account books of JASDEC or account management institutions. Upon receiving such information, Toyota will record or register such information received from JASDEC on its register of shareholders. Accordingly, holders of common shares recorded or registered on Toyota’s register of shareholders will be treated as holders of common shares of Toyota and may exercise rights, such as voting rights, and will receive dividends (if any) and notices to holders of common shares directly from Toyota. Holders of common shares wishing to assert minority shareholders’ rights against Toyota must request an individual shareholder notice to JASDEC or the account management institution at which the shareholder has opened a transfer account. In response to such request, JASDEC will provide the individual shareholders notice to Toyota. A holder of common shares may assert his or her minority shareholders’ rights against Toyota for a period of four weeks after the date the individual shareholder notice is provided to Toyota. The shares held by a person who is deemed to hold additional shares according to the transfer account books are aggregated for these purposes.

Model AA Class Shares, once issued, will be recorded or registered on Toyota’s register of shareholders. The transfer of Model AA Class Shares, once issued, will be effective upon an agreement between the transferor and the transferee, but entry or record of a change of holder in the register of shareholders will require an approval from the board of directors.

Corporate Purpose

Article 2 of Toyota’s articles of incorporation states that its purpose is to engage in the following businesses:

• the manufacture, sale, leasing and repair of:

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

• industrial machinery and apparatus, other general machinery and apparatus, and parts thereof;

• electrical machinery and apparatus, and parts thereof; and

• measuring machinery and apparatus, medical machinery and apparatus, and parts thereof.

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

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

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

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

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• the service of information processing, information communications and information supply and the development, sale and leasing of software;

• the design and development of product sales systems that utilize networks such as the Internet, sale, leasing and maintenance of computers included within such systems, and sale of products by utilizing such systems;

• the inland transportation, marine transportation, air transportation, stevedoring, warehousing and tourism businesses;

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

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

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

• the non-life insurance agency business and the life insurance agency business;

• the production and processing by using biotechnology of agricultural products including trees, and the sale of such products;

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

• the sale of goods related to each of the preceding items and mineral oil;

• the conducting of engineering, consulting, invention and research relating to each of the preceding items and the utilization of such invention and research; and

• any businesses incidental to or related to any of the preceding items.

Dividends

Dividends — General

Toyota normally pays dividends twice per year, including an interim dividend and a year-end dividend. Toyota’s articles of incorporation provide that retained earnings can be distributed as dividends pursuant to a resolution of its board of directors. Toyota’s board of directors resolves to pay year-end dividends to holders of common shares and registered pledgees of common shares of record as of March 31, the record date, in each year. In addition, the articles of incorporation provide that in the event that Toyota pays a year-end dividend to holders of common shares, it will pay AA Dividends in cash from surplus to any holders of Model AA Class Shares or registered pledgees of Model AA Class Shares entered or recorded in the final register of shareholders as of the record date for the year-end dividend, in preference to holders of common shares or registered pledgees of common shares. The amount of annual AA Dividends per Model AA Class Share is calculated by multiplying the amount per Model AA Class Share paid to Toyota as consideration by a rate determined by the board of directors prior to the issuance of such Model AA Class Share, which rate is not to exceed 5%.

In addition to these year-end dividends, Toyota may pay an interim dividend in the form of cash distributions from its distributable surplus to holders of common shares and pledgees of common shares of record as of September 30, the record date, in each year by a resolution of its board of directors. The articles of incorporation provide that in the event that Toyota pays such interim dividends, Toyota will pay AA Interim Dividends in cash as interim dividend to any holders of Model AA Class Shares or registered pledgees of Model AA Class Shares entered or recorded in the final register of shareholders as of the record date for the interim dividend, in preference to holders of common shares or registered pledgees of common shares. If AA Interim Dividends are paid during the fiscal year in which the record date for the year-end dividend falls, the amount of AA Interim Dividends is deducted from AA Dividends to be paid per the above paragraph.

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If the amount of the dividends from surplus paid in cash to holders of Model AA Class Shares or registered pledgees of Model AA Class Shares is less than the prescribed amount of AA Dividends in any fiscal year, the amount of the shortfall will be carried forward to and accumulate in the following fiscal year and thereafter. Dividends from surplus will be paid in cash to holders of Model AA Class Shares or registered pledgees of Model AA Class Shares in preference to the payment of interim and year-end dividends until such payment reaches the amount of the accumulated unpaid dividends.

In addition, under the Companies Act, dividends may be paid to holders of common shares and pledgees of record of common shares as of any record date, other than those specified above, as set forth by Toyota’s articles of incorporation or as determined by its board of directors from time to time. Under the Companies Act, dividends may be distributed in cash or (except in the case of interim dividends mentioned in the second preceding paragraph) in kind, subject to limitations on distributable surplus and to certain other conditions.

Dividends — Distributable amount

Under the Companies Act, Toyota is permitted to make distributions of surplus to the extent that the aggregate book value of the assets to be distributed to shareholders does not exceed the distributable amount provided for by the Companies Act and the ordinance of the Ministry of Justice as at the effective date of such distribution of surplus.

The amount of surplus at any given time shall be the amount of Toyota’s assets and the book value of Toyota’s treasury stock after subtracting and adding the amounts of items provided for by the Companies Act and the ordinance of the Ministry of Justice, and the amount of surplus distributable for dividends is calculated by adding to and subtracting from this amount the amounts of items provided for by the Companies Act and the ordinance of the Ministry of Justice.

Dividends — Prescription

Under its articles of incorporation, Toyota is not obligated to pay any dividends in cash which are left unclaimed for a period of three years after the date on which they first became payable.

Capital Accounts

The amount of the cash or assets paid or contributed by subscribers for new shares (with certain exceptions) is required to be accounted for as stated capital, although Toyota may account for an amount not exceeding one-half of such cash or assets as additional paid-in capital.

Under the Companies Act, Toyota may reduce its additional paid-in capital and legal reserve without limitation on the amount to be reduced, generally, by a resolution of a general shareholders’ meeting and if so decided by the same resolution, may account for the whole or any part of the amount of the reduction of additional paid-in capital as stated capital. The whole or any part of surplus which may be distributed as dividends may also be transferred to stated capital by a resolution of a general shareholders’ meeting.

Stock Splits

Toyota may at any time split the outstanding shares into a greater number of shares by a resolution of the board of directors. Toyota must give public notice of the stock split, specifying a record date for the stock split, not less than two weeks prior to the record date. Toyota shall conduct any stock split simultaneously and in the same proportion with respect to the common shares and the Model AA Class Shares.

Consolidation of Shares

Toyota may at any time consolidate shares in issue into a smaller number of shares by a special shareholders resolution (as defined in “Voting Rights”). When a consolidation of shares is to be made, Toyota must give

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public notice of certain matters two weeks prior to the effective date of the consolidation. Toyota must disclose the reason for the consolidation of shares at a general shareholders’ meeting. Toyota shall conduct any consolidation of shares simultaneously and in the same proportion with respect to the common shares and the Model AA Class Shares.

Japanese Unit Share System

General. Consistent with the requirements of the Companies Act, Toyota’s articles of incorporation provide that 100 common shares or Model AA Class Shares each constitute one “unit.” Although the number of shares constituting a unit is included in the articles of incorporation, any amendment to the articles of incorporation reducing (but not increasing) the number of shares constituting a unit or eliminating the provisions for the unit of shares may be made by a resolution of the board of directors rather than by a special shareholders resolution, which is otherwise required for amending the articles of incorporation.

Voting Rights under the Unit Share System. Under the unit share system, shareholders have one voting right for each unit of shares that they hold. Any number of common shares or Model AA Class Shares less than a full unit will carry no voting rights.

Purchase by Toyota of Shares Constituting Less Than a Unit. A holder of shares constituting less than a full unit may require Toyota to purchase those shares at their market value in the case of common shares and at fair price in the case of Model AA Class Shares in accordance with the provisions of Toyota’s share handling regulations and the Companies Act.

Voting Rights

Toyota holds its ordinary general shareholders’ meeting each year. In addition, Toyota may hold an extraordinary general shareholders’ meeting whenever necessary by giving at least two weeks’ advance notice. Under the Companies Act, notice of any shareholders’ meeting must be given to each shareholder having voting rights or, in the case of a non-resident shareholder, to his or her resident proxy or mailing address in Japan in accordance with Toyota’s share handling regulations, at least two weeks prior to the date of the meeting.

Holders of common shares and holders of Model AA Class Shares shall have voting rights exercisable at a general shareholders’ meeting. A holder of shares constituting one or more whole units is entitled to one vote per unit of shares subject to the limitations on voting rights set forth in this paragraph. In general, under the Companies Act, a resolution can be adopted at a general shareholders’ meeting by a majority of the shares having voting rights represented at the meeting. The Companies Act and Toyota’s articles of incorporation require a quorum for the election of members of the board of directors and audit & supervisory board members of not less than one-third of the total number of outstanding shares having voting rights. Toyota’s shareholders are not entitled to cumulative voting in the election of members of the board of directors. A corporate shareholder, the management of which is substantially under Toyota’s control as provided by an ordinance of the Ministry of Justice, either through the holding of voting rights or for any other reason, does not have voting rights.

Shareholders may exercise their voting rights by attending the general shareholders’ meeting or in writing by mail. Shareholders who choose to exercise their voting rights by mail must fill out and return to Toyota the voting right exercise form enclosed with the convocation notice of the general shareholders’ meeting by the date specified in such convocation notice. In addition, from the general shareholders’ meeting for fiscal 2009, shareholders may exercise their voting rights through the internet. Shareholders electing to exercise their voting rights through the internet must log on to the “Website to Exercise Voting Rights” using the login ID and temporary password provided in the voting right exercise form enclosed with the convocation notice and submit their votes by a date specified in the convocation notice, following instructions appearing on the website. Institutional investors may also use the Electronic Proxy Voting Platform operated by Investor Communications Japan (“ICJ”) to exercise their voting rights through the use of the Internet, if such institutional investor applies

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to use the platform in advance. Shareholders may also exercise their voting rights through proxies, provided that those proxies are also shareholders who have voting rights. Toyota may refuse a shareholder having two or more proxies attend a general shareholders’ meeting.

The Companies Act provides that a quorum of at least one-third of outstanding shares with voting rights must be present at a shareholders’ meeting to approve any material corporate actions such as:

(1) any amendment of the articles of incorporation with certain exceptions in which a shareholders’ resolution is not required;

(2) acquisition of its own shares from a specific party;

(3) consolidation of shares;

(4) any issue or transfer of its shares at a “specially favorable” price (or any issue of stock acquisition rights or bonds with stock acquisition rights at “specially favorable” conditions by Toyota) to any persons other than shareholders;

(5) the removal of an audit & supervisory board member;

(6) the exemption of liability of a director or audit & supervisory board member with certain exceptions;

(7) a reduction of stated capital which meets certain requirements with certain exceptions;

(8) a distribution of in-kind dividends which meets certain requirements;

(9) dissolution, merger, or consolidation with certain exceptions in which a shareholders’ resolution is not required;

(10) the transfer of the whole or a material part of the business;

(11) the transfer in entirety or in part of shares or equity interest of a subsidiary under certain conditions;

(12) the taking over of the entire business of any other corporation with certain exceptions in which a shareholders’ resolution is not required;

(13) share exchange or share transfer for the purpose of establishing 100% parent-subsidiary relationships with certain exceptions in which a shareholders’ resolution is not required; or

(14) company split with certain exceptions in which a shareholders’ resolution is not required.

At least two-thirds of the shares having voting rights represented at the meeting must approve these actions.

The voting rights of holders of ADSs are exercised by the Depositary based on instructions from those holders.

Rights to be Allotted Shares

Holders of common shares and Model AA Class Shares have no preemptive rights under Toyota’s articles of incorporation. Under the Companies Act, the board of directors may, however, determine that shareholders shall be given rights to be allotted shares or stock acquisition rights on request in connection with a particular issue or transfer of shares, or issue of stock acquisition rights, respectively. In this case, such rights must be given on uniform terms to all shareholders as of a specified record date by at least two weeks’ prior public notice to shareholders of the record date.

Rights to be allotted shares are nontransferable. However, a shareholder may be allotted stock acquisition rights without consideration thereto, and may transfer such rights.

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Liquidation Rights

In the event of a liquidation of Toyota, the assets remaining after payment of all debts, liquidation expenses and taxes will be distributed as follows. First, an amount per First Series Model AA Class Share through Fifth Series Model AA Class Share, determined by resolution of the board of directors or calculated using a formula determined by a resolution of the board of directors prior to the issuance of such Model AA Class Shares based on the amount per Model AA Class Shares paid to Toyota as consideration (the “Base Amount”), shall be paid in cash to holders of Model AA Class Shares or registered pledgees of Model AA Class Shares. No other distribution of residual assets shall be made to holders of Model AA Class Shares or registered pledgees of Model AA Class Shares. The remaining residual assets shall be distributed among the holders of common shares or registered pledgees of common shares in proportion to the respective number of shares they own.

Liability to Further Calls or Assessments

All of Toyota’s currently outstanding shares, including shares represented by the ADSs, are fully paid and nonassessable.

Transfer Agent

Mitsubishi UFJ Trust and Banking Corporation is the transfer agent for all shares. Mitsubishi UFJ Trust and Banking Corporation’s office is located at 4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo, 100-8212 Japan. Mitsubishi UFJ Trust and Banking Corporation maintains Toyota’s register of shareholders and records transfers of record ownership (in the case of common shares, upon receiving notification from JASDEC).

Record Date

The close of business on March 31 is the record date for Toyota’s year-end dividends, if paid. A holder of common shares or Model AA Class Shares constituting one or more whole units who is recorded or registered as a holder on Toyota’s register at the close of business as of March 31 is also entitled to exercise shareholders’ voting rights at the ordinary general shareholders’ meeting with respect to the business year ending on March 31. The close of business on September 30 of each year is the record date for interim dividends, if paid. In addition, Toyota may set a record date for determining the shareholders entitled to other rights and for other purposes by giving at least two weeks’ prior public notice.

The shares generally trade ex-dividend or ex-rights on the Japanese stock exchanges on the business day preceding a record date (or if the record date is not a business day, one business day prior thereto), for the purpose of dividends or rights offerings.

Acquisition by Toyota of Shares

Toyota may acquire its own common shares (i) through a stock exchange on which such shares are listed or by way of tender offer (pursuant to an ordinary resolution of a general shareholders’ meeting or a resolution of the board of directors), (ii) by purchase from a specific party (pursuant to a special resolution of a general shareholders’ meeting) or (iii) from a subsidiary of Toyota (pursuant to a resolution of the board of directors). In addition, Toyota may acquire its own Model AA Class Shares (i) by purchase from all holders of the relevant series of Model AA Class Shares who make an offer to transfer the shares to Toyota upon notice from Toyota to acquire the shares (pursuant to an ordinary resolution of a general shareholders’ meeting), (ii) by purchase from a specific party (pursuant to a special resolution of a general shareholders’ meeting) or (iii) from a subsidiary of Toyota (pursuant to a resolution of the board of directors). When such acquisition of common shares is made by Toyota from a specific party other than a subsidiary of Toyota, any other holder of common shares may make a demand to a representative director, more than five calendar days prior to the relevant shareholders’ meeting, that Toyota also purchase the common shares held by such holder. However, the acquisition of its own common

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shares at a price not exceeding the market price to be provided under an ordinance of the Ministry of Justice will not trigger the right of any shareholder to include him/her as the seller of his/her shares in such proposed purchase.

Any acquisition of shares must satisfy certain requirements that the total amount of the acquisition price may not exceed the amount of the distributable dividends. See “— Dividends.”

Shares acquired by Toyota may be held by it for any period or may be cancelled by resolution of the board of directors. Toyota may also transfer to any person the shares held by it, subject to a resolution of the board of directors, and subject also to other requirements applicable to the issuance of new shares. Toyota may also utilize its treasury stock for the purpose of transfer to any person upon exercise of stock acquisition rights or for the purpose of acquiring another company by way of merger, share exchange or corporate split through exchange of treasury stock for shares or assets of the acquired company.

The Companies Act generally prohibits any subsidiary of Toyota from acquiring shares of Toyota.

Model AA Class Shareholder’s Conversion Right into Common Shares

Holders of Model AA Class Shares may, at certain times specified in resolution of the board of directors as the conversion period at the time of the issuance of First Series Model AA Class Shares to Fifth Series Model AA Class Shares, demand that Toyota acquire some or all of such Model AA Class Shares held by such holder of Model AA Class shares in exchange for common shares in a number determined by a formula specified in such board resolution. Any fractions of less than one common share to be delivered in exchange for such Model AA Class Shares shall be disregarded, in which case payment of money as provided in the Companies Act shall not be made.

Model AA Class Shareholder’s Cash Put Option

Holders of Model AA Class Shares may, at certain times specified in resolution of the board of directors as the cash put option period at the time of the issuance of First Series Model AA Class Shares to Fifth Series Model AA Class Shares, demand that Toyota acquire some or all of such Model AA Class Shares in exchange for cash in an amount equivalent to the Base Amount. If demand for acquisition exceeds the amount available under the Companies Act for distribution as of the date of demand for such acquisition, Model AA Class Shares to be acquired by Toyota shall be determined by a resolution of the board of directors, and the cash put option in respect of Model AA Class Shares not so acquired shall be deemed not to have been exercised.

Toyota’s Cash Call Option

After the lapse of period specified in resolution of its board of directors at the time of the issuance of First Series Model AA Class Shares to Fifth Series Model AA Class Shares, on an acquisition date separately determined by a resolution of the board of directors, Toyota may acquire all of such Model AA Class Shares in exchange for cash in an amount equivalent to the Base Amount.

Report of Substantial Shareholdings

The Financial Instruments and Exchange Law of Japan and regulations under the Law require any person who has become a holder (together with its related persons) of more than 5% of the total issued shares of a company listed on any Japanese stock exchange (including ADSs representing such shares) to file with the Director of a competent Local Finance Bureau, within five business days, a report concerning those shareholdings. A similar report must also be filed to reflect any change of 1% or more in any shareholding or any change in material matters set out in reports previously filed. Any such report shall be filed with the Director of a competent Local Finance Bureau through the Electronic Disclosure for Investor’s Network (“EDINET”) system.

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For this purpose, shares issuable to a shareholder upon exercise of stock acquisition rights are taken into account in determining both the number of shares held by that stock acquisition rights holder and the company’s total issued shares.

10.C MATERIAL CONTRACTS

All contracts concluded by Toyota during the two years preceding this filing were entered into in the ordinary course of business.

10.D EXCHANGE CONTROLS

The following is a general summary of major Japanese foreign exchange control regulations applicable to holders of shares of capital stock or voting rights (including ADSs) of Toyota, and to others intending to consummate other actions such as obtaining consent from other investors holding voting rights and consenting to certain proposals at a general shareholders meeting, who are “exchange non-residents” or “foreign investors,” as described below. The statements regarding Japanese foreign exchange control regulations set forth below are based on the laws and regulations in force and as interpreted by the Japanese authorities as of the date of this annual report and are subject to subsequent changes in the applicable Japanese laws or interpretations thereof. This summary is not exhaustive of all possible foreign exchange control considerations that may apply to a particular investor, and potential investors are advised to satisfy themselves as to the overall foreign exchange control consequences of the acquisition, ownership and disposition of shares of capital stock or voting rights of Toyota by consulting their own advisors.

The Foreign Exchange and Foreign Trade Act of Japan (Act No. 228 of 1949, as amended, the “FEFTA”) and the cabinet orders and ministerial ordinances thereunder (collectively, the “Foreign Exchange Regulations”) govern the acquisition and holding of shares of capital stock and voting rights of Toyota by “exchange non-residents” and by “foreign investors.” The Foreign Exchange Regulations currently in effect do not, however, affect transactions between exchange non-residents to purchase or sell shares outside Japan using currencies other than Japanese yen.

Exchange non-residents are:

(i) individuals who do not reside in Japan; and

(ii) corporations whose principal offices are located outside Japan.

Generally, branches and other offices of non-resident corporations that are located within Japan are regarded as residents of Japan. Conversely, branches and other offices of Japanese corporations located outside Japan are regarded as exchange non-residents.

Foreign investors are:

(i) individuals who are exchange non-residents;

(ii) corporations or other organizations that are organized under the laws of foreign countries or whose principal offices are located outside of Japan;

(iii) Japanese corporations of which 50% or more of their total voting rights are held directly or indirectly by individuals who are exchange non-residents and/or corporations or other organizations falling within (i) and/or (ii) above;

(iv) partnerships under the Civil Code of Japan (Act No. 89 of 1896, as amended) established to invest in corporations, limited partnerships for investment under the Limited Partnership Act for Investment of

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Japan (Act No. 90 of 1998, as amended), or any other similar partnerships under foreign law, of which (a) 50% or more of the total contributions are made by individuals and/or corporations falling within (i), (ii), (iii) above and/or (v) below or any other persons prescribed under the Foreign Exchange Regulations or (b) a majority of the general partners are individuals and/or corporations falling within (i), (ii), (iii) above and/or (v) below or any other persons prescribed under the Foreign Exchange Regulations; and

(v) corporations or other organizations, a majority of whose officers, or officers having the power of representation, are individuals who are exchange non-residents.

Acquisition of Shares

In general, the acquisition of shares of a Japanese company (such as the shares of capital stock of Toyota) by an exchange non-resident from a resident of Japan is not subject to any prior filing requirements (other than those relating to an “inward direct investment” set out below). In certain limited circumstances, however, the Minister of Finance may require prior approval of an acquisition of this type. While prior approval, as described above, is not required in general, in the case where a resident of Japan transfers shares of a Japanese company (such as the shares of capital stock of Toyota) for consideration exceeding ¥100 million to an exchange non-resident, the resident of Japan who transfers the shares is required to report the transfer to the Minister of Finance within 20 days from the date of the transfer or the date of receipt of payment, whichever comes later, unless (i) the transfer was made through a bank or financial instruments business operator licensed or registered under Japanese law or other entity prescribed by the Foreign Exchange Regulations acting as an agent or intermediary or (ii) the acquisition constitutes an “inward direct investment” described below.

Inward Direct Investment in Shares of Listed Companies

On May 8, 2020, an amendment to the Foreign Exchange Regulations came into effect. Upon the full implementation of the Amendment as of June 7, 2020, the requirements and procedures regarding the prior notifications of inward direct investments to the Minister of Finance and any other competent Ministers under the FEFTA, were amended. After the implementation of the Amendment, Japanese listed companies are classified into the following categories:

(i) companies engaged in businesses excluding certain businesses designated by the Foreign Exchange Regulations as designated businesses (the “Designated Businesses”);

(ii) companies engaged in Designated Businesses designated by the Foreign Exchange Regulations as core sector businesses (the “Core Sector Designated Businesses”); and

(iii) corporations engaged in Designated Businesses other than the Core Sector Designated Businesses (the “Non-Core Sector Designated Businesses”).

For reference purposes only, the Minister of Finance publishes, and may update from time to time, a list that classifies Japanese listed companies into the above categories. According to the list published by the Minister of Finance as of May 8, 2020, the businesses which are currently engaged in by Toyota are classified as category (ii) i.e., the Core Sector Designated Businesses above.

Definition of Inward Direct Investment

If a foreign investor acquires shares or voting rights of a Japanese company that is listed on a Japanese stock exchange (such as the shares of capital stock of Toyota) and, as a result of the acquisition, the foreign investor, in combination with any existing holdings, directly or indirectly holds 1% or more of the issued shares or the total number of voting rights of the relevant company, such acquisition constitutes an “inward direct investment.” In addition, an acquisition of the authority to exercise, or instruct to exercise, voting rights held by other shareholders that results in the foreign investor, in combination with any existing shareholding, directly or

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indirectly holding 1% or more of the total number of voting rights of the relevant company constitutes an “inward direct investment.” Furthermore, if a foreign investor manages, on a discretionary basis, shares or voting rights of a Japanese company that is listed on a Japanese stock exchange and in combination with any existing management, directly or indirectly manages 1% or more of the issued shares or the total number of voting rights of the relevant company, such discretionary investment management generally constitutes an “inward direct investment.”

In addition to the acquisitions of shares or voting rights described above, if a foreign investor (i) is granted the authority to exercise proxy voting rights on behalf of other shareholders of the relevant company regarding certain matters which may control substantially or have a material influence on the management of such company, such as the election or removal of directors, or (ii) obtains consent from another foreign investor holding the voting rights of the relevant company to exercise the voting rights of such company jointly, and, in each case, as a result of these arrangements, the number of the voting rights directly or indirectly held by the foreign investor, including the total number of the voting rights subject to such proxy, or the sum of the number of the voting rights directly or indirectly held by the foreign investor and such other foreign investors subject to such joint voting agreement, as the case may be, is 10% or more of the total number of voting rights of the relevant company, each such arrangement regarding voting rights (hereinafter referred to as a “voting arrangement”) also constitutes an “inward direct investment.” Additionally, if a foreign investor who directly or indirectly holds 1% or more of the total voting rights of a Japanese listed company consents, at a general meeting of shareholders, to certain proposals having a material influence on the management of such company such as (i) election of such foreign investor or its related persons (as defined in the Foreign Exchange Regulations) as directors or audit & supervisory board members of the relevant company or (ii) transfer or discontinuation of its business, such consent will also constitute an “inward direct investment.”

Prior Notification Requirements

If a foreign investor intends to consummate an “inward direct investment” as described above, in certain circumstances, such as where the foreign investor is in a country that is not listed on an exemption schedule in the Foreign Exchange Regulations or where that Japanese company is engaged (as Toyota is currently) in one or more Designated Businesses, prior notification of the relevant inward direct investment must be filed with the Minister of Finance and any other competent Ministers.

However, a foreign investor seeking to consummate an “inward direct investment” may be eligible for the exemptions, if certain conditions are met.

In the case of an acquisition (including investment discretionary management) of shares or voting rights or the authority to exercise, directly or through instructions, voting rights of a Japanese listed company that is engaged (as Toyota is currently) in one or more Core Sector Designated Businesses, the foreign investor may be exempted from the prior notification requirement, if, as a result of such acquisition, the foreign investor directly or indirectly holds less than 10% of the total number of issued shares or voting rights of the relevant company, and such foreign investor complies with the following conditions:

(i) the foreign investor or its closely-related persons (as defined in the Foreign Exchange Regulations) will not become directors or audit & supervisory board members of the relevant company;

(ii) the foreign investor will not make certain proposals (as prescribed in the Foreign Exchange Regulations) at a general meeting of shareholders, including transfer or discontinuation of the Designated Businesses of the relevant company;

(iii) the foreign investor will not access non-public technical information in relation to the Designated Businesses of the relevant company, or take certain other actions that may lead to the leak of such non-public technical information (as prescribed in the Foreign Exchange Regulations);

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(iv) the foreign investor will not attend, and will not cause any persons designated by it to attend, meetings of the relevant company’s board of directors, or meetings of committees having authority to make important decisions, in respect of the Core Sector Designated Businesses of the relevant company; and

(v) the foreign investor will not make, and will not cause any persons designated by it to make, proposals to such board or committees or their members in writing or electronic form requesting any response or actions by certain deadlines in respect of the Core Sector Designated Businesses of the relevant company.

In addition, in the case of an acquisition (including investment discretionary management) of shares or voting rights or the authority to exercise, either directly or through instructions, voting rights of a Japanese listed company that is engaged in one or more Non-Core Sector Designated Businesses, the foreign investor may be exempted from the prior notification requirement, including in the case where, as a result of such acquisition, the foreign investor holds 10% or more of the total number of issued shares or the total number of voting rights of the relevant company, which would have required prior notification, if such foreign investor complies with the conditions (i) through (iii) above (the “Exemption Conditions”).

Notwithstanding the above, if a foreign investor falls under a category of disqualified investors designated by the Foreign Exchange Regulations (including (a) investors who have records of certain sanctions due to violations of the FEFTA and (b) certain investors who are state-owned enterprises or other related entities excluding those who are accredited by the Minister of Finance), in no event may such foreign investor be eligible for the exemptions described above. On the other hand, if a foreign investor, excluding the disqualified investors described in the foregoing sentence, falls under a category of certain foreign financial institutions (as prescribed in the Foreign Exchange Regulations) and complies with the Exemption Conditions, such foreign investor may be eligible for the exemptions, even if the acquisition results in such foreign investor’s directly or indirectly holding 10% or more of the total number of issued shares or voting rights of a corporation engaged in one or more Core Sector Designated Businesses.

In addition, if a foreign investor intends to make a voting arrangement with respect to a Japanese listed company engaged one or more Designated Businesses or consents to a proposal at a general meeting of shareholders of such company, in each case, that constitutes an “inward direct investment” as described above, in certain circumstances, prior notification of the relevant inward direct investment must be filed with the Minister of Finance and any other competent Ministers. However, the exemptions from the prior notification requirements may be available in the cases where the relevant voting arrangement is regarding matters other than certain matters which may control substantially or have a material influence on the management of the relevant company, such as the election or removal of directors, which would have required prior notification.

Acquisitions of shares by foreign investors by way of stock split are not subject to the foregoing notification requirements.

Procedures for Prior Notification

If such prior notification is filed, the proposed inward direct investment may not be consummated until after 30 days have passed from the date of filing, although this screening period may be shortened to two weeks unless such Ministers deem it necessary to review the proposed inward direct investment. The Ministers may extend the screening period up to five months if they deem it necessary to review the proposed inward direct investment and may recommend any modification or abandonment of the proposed inward direct investment and, if the foreign investor does not accept such recommendation, the Ministers may order the modification or abandonment of such inward direct investment. In addition, if the Ministers consider the proposed inward direct investment to be an inward direct investment that is likely to cause damage to the national security of Japan and, if a foreign investor (i) consummates such inward direct investment without filing the prior notification described above; (ii) consummates such inward direct investment before the expiration of the screening period described above;

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(iii) in connection with such inward direct investment, makes false statements in the prior notification described above; or (iv) does not follow the recommendation or order issued by the Ministers to modify or abandon such inward direct investment, the Ministers may order such foreign investor to dispose of all or part of the shares acquired or take other measures.

Post Facto Reporting Requirements

A foreign investor who consummates an inward direct investment as described above relating to a Japanese listed company that is engaged in one or more Designated Businesses, but is not subject to the prior notification requirements described above due to the exemptions from such prior notification requirements, in general, must file a report of the relevant inward direct investment with the Minister of Finance and any other competent Ministers having jurisdiction over such Japanese company within 45 days of such inward direct investment when, as a result of such acquisition, the foreign investor (excluding, in the cases of (i) and (ii) below, a foreign investor who falls under a category of certain foreign financial institutions (as prescribed in the Foreign Exchange Regulations)) directly or indirectly holds (i) 1% or more but less than 3% of the total number of issued shares or voting rights, for the first time, (ii) 3% or more but less than 10% of the total number of issued shares or voting rights, for the first time, or (iii) 10% or more of the total number of issued shares or voting rights.

In addition, if a foreign investor consummates the inward direct investment described above through the acquisition (including investment discretionary management) of shares or voting rights or the authority to exercise, directly or through instructions, voting rights of a Japanese listed company that is not engaged in the Designated Businesses (which is not subject to the prior notification requirements described above) and, as a result of such acquisition, such foreign investor holds 10% or more of shares or voting rights of the total number of issued shares or voting rights of the relevant company, such foreign investor must file a report of the relevant inward direct investment with the Minister of Finance and any other competent Ministers having jurisdiction over such Japanese company within 45 days of such inward direct investment.

Additionally, if a foreign investor consummates the inward direct investment described above through a voting arrangement with respect to a Japanese listed company that is not engaged in the Designated Businesses (which is not subject to the prior notification requirements described above), such foreign investor must file a report of the relevant inward direct investment with the Minister of Finance and any other competent Ministers having jurisdiction over such Japanese company within 45 days of such inward direct investment.

Acquisitions of shares by foreign investors by way of stock split are not subject to the foregoing notification requirements.

Dividends and Proceeds of Sale

Under the Foreign Exchange Regulations, dividends paid on, and the proceeds of sales in Japan of, shares held by non-residents of Japan may in general be converted into any foreign currency and repatriated abroad. Under the terms of the deposit agreement pursuant to which Toyota’s ADSs are issued, the Depositary is required, to the extent that in its judgment it can convert yen on a reasonable basis into dollars and transfer the resulting dollars to the United States, to convert all cash dividends that it receives in respect of deposited shares into dollars and to distribute the amount received (after deduction of applicable withholding taxes) to the holders of ADSs.

10.E TAXATION

The following discussion is a general summary of the principal U.S. federal income and Japanese national tax consequences of the acquisition, ownership and disposition of shares of common stock or ADSs. This summary does not purport to address all material tax consequences that may be relevant to holders of shares of common stock or ADSs, and does not take into account the specific circumstances of any particular investors,

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some of which (such as tax-exempt entities, banks, insurance companies, broker-dealers, traders in securities that elect to use a mark-to-market method of accounting for their securities holdings, regulated investment companies, real estate investment trusts, partnerships and other pass-through entities, investors liable for the U.S. alternative minimum tax, investors that own or are treated as owning 10% or more of Toyota’s stock (by vote or value), investors that hold shares of common stock or ADSs as part of a straddle, hedge, conversion transaction or other integrated transaction, U.S. Holders (as defined below) subject to special tax accounting rules as a result of any item of gross income with respect to shares of common stock or ADSs being taken into account in an “applicable financial statement” (as defined in section 451 of the Internal Revenue Code of 1986, as amended) and U.S. Holders (as defined below) whose functional currency is not the U.S. dollar) may be subject to special tax rules. This summary is based on the tax laws and regulations of the United States and Japan, judicial decisions, published rulings and administrative pronouncements all as in effect on the date hereof, as well as on the current income tax convention between the United States and Japan (the “Treaty”), as described below, all of which are subject to change (possibly with retroactive effect), and to differing interpretations.

For purposes of this discussion, a “U.S. Holder” is any beneficial owner of shares of common stock or ADSs that, for U.S. federal income tax purposes, is:

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

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

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

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

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

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

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

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

This summary does not address any aspects of U.S. federal tax law other than income taxation and does not discuss any aspects of Japanese taxation other than income taxation, as limited to national taxes, inheritance and gift taxation. This summary also does not cover any state or local, or non-U.S., non-Japanese tax considerations. Investors are urged to consult their tax advisors regarding the U.S. federal, state and local and Japanese and other tax consequences of acquiring, owning and disposing of shares of common stock or ADSs. In particular, where relevant, investors are urged to confirm their status as Eligible U.S. Holders with their tax advisors and to discuss with their tax advisors any possible consequences of their failure to qualify as Eligible U.S. Holders. In addition, this summary is based in part upon the representations of the Depositary and the assumption that each obligation in the deposit agreement, and in any related agreement, will be performed in accordance with its terms.

In general, for purposes of the Treaty and for U.S. federal income and Japanese income tax purposes, owners of ADRs evidencing ADSs will be treated as the owners of the shares of common stock represented by those ADSs, and exchanges of shares of common stock for ADSs, and exchanges of ADSs for shares of common stock, will not be subject to U.S. federal income or Japanese income tax.

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The discussion below is intended for general information only and does not constitute a complete analysis of all tax consequences relating to ownership of shares of common stock or ADSs. Prospective purchasers of shares of common stock or ADSs should consult their own tax advisors concerning the tax consequences of their particular situations.

Japanese Taxation

The following is a summary of the principal Japanese tax consequences (limited to national taxes) to non-residents of Japan or non-Japanese corporations without permanent establishments in Japan (“non-resident Holders”) who are holders of shares of common stock or of ADSs of Toyota. The following information regarding taxation in Japan is based on the tax treaties and tax laws in force and their interpretation by Japan’s tax authorities as of the date of this annual report. Tax laws and treaties and their interpretations may change (including with retroactive effect). Toyota will not revise this summary on the basis of any such change occurring after the date of this annual report.

Generally, non-resident Holders are subject to Japanese withholding tax on dividends paid by Japanese corporations. Stock splits are, in general, not taxable events.

In the absence of an applicable income tax treaty, convention or agreement reducing the maximum rate of Japanese withholding tax or allowing an exemption from Japanese withholding tax, the rate of Japanese withholding tax applicable to dividends paid by Japanese corporations to non-resident Holders is generally 20.42 percent, provided that, with respect to dividends paid on listed shares issued by a Japanese corporation (such as the shares of common stock or ADSs of Toyota) to non-resident Holders, other than any individual shareholder who holds three percent or more of the total issued shares of the relevant Japanese corporation, the aforementioned 20.42 percent withholding tax rate is reduced to 15.315 percent for dividends due and payable on or before December 31, 2037. These rates include a special additional withholding tax (2.1 percent of the original withholding tax amount) to secure funds for reconstruction from the Great East Japan Earthquake.

At the date of this annual report, Japan has income tax treaties, conventions or agreements whereby the above-mentioned withholding tax rate is reduced, in most cases to 15 percent or ten percent for portfolio investors (15 percent under the income tax treaties in force with, among other countries, Canada, Denmark, Finland, Germany, Iceland, Ireland, Italy, Luxembourg, New Zealand, Norway, Singapore, and Spain, and ten percent under the income tax treaties with, among other countries, Australia, Austria, Belgium, France, Hong Kong, the Netherlands, Portugal, Sweden, Switzerland, the U.K. and the United States).

Under the Treaty, the maximum rate of Japanese withholding tax which may be imposed on dividends paid by a Japanese corporation to an Eligible U.S. Holder that is a portfolio investor is generally reduced to ten percent of the gross amount actually distributed, and dividends paid by a Japanese corporation to an Eligible U.S. Holder that is a pension fund (as defined in the Treaty) are exempt from Japanese income tax by way of withholding or otherwise, provided that such dividends are not derived from the carrying on of a business, directly or indirectly, by such pension fund.

If the maximum tax rate provided for in the income tax treaty applicable to dividends paid by Toyota to any particular non-resident Holder is lower than the withholding tax rate otherwise applicable under Japanese tax law or if any particular non-resident Holder is exempt from Japanese income tax with respect to such dividends under the income tax treaty applicable to such particular non-resident Holder, such non-resident Holder who is entitled to a reduced rate of or exemption from Japanese withholding tax on the payment of dividends on shares of common stock by Toyota is required to submit an Application Form for Income Tax Convention Regarding Relief from Japanese Income Tax and Special Income Tax for Reconstruction on Dividends (together with any other required forms and documents) in advance through the withholding agent to the relevant tax authority before the payment of dividends. A standing proxy for non-resident Holders of a Japanese corporation may provide this application service. In addition, a simplified special filing procedure is available for non-resident Holders to claim treaty benefits of exemption from or reduction of Japanese withholding tax by submitting a

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Special Application Form for Income Tax Convention Regarding Relief from Japanese Income Tax and Special Income Tax for Reconstruction on Dividends of Listed Stock (together with any other required forms and documents). With respect to ADSs, this reduced rate or exemption is applicable if the Depositary or its agent submits, together with other documents, two Special Application Forms (one before payment of dividends, the other within eight months after the recording date concerning such payment of dividends) to the Japanese tax authority. To claim this reduced rate or exemption, any relevant non-resident Holder of ADSs will be required to file proof of taxpayer status, residence and beneficial ownership (as applicable) and to provide other information or documents as may be required by the Depositary. A non-resident Holder who is entitled, under an applicable income tax treaty, to a reduced treaty rate lower than the withholding tax rate otherwise applicable under Japanese tax law or an exemption from the withholding tax, but fails to submit the required application in advance, will be entitled to claim the refund of Japanese taxes withheld in excess of the rate under an applicable tax treaty (if such non-resident Holder is entitled to a reduced treaty rate under the applicable income tax treaty) or the entire amount of Japanese tax withheld (if such non-resident Holder is entitled to an exemption under the applicable income tax treaty) by complying with a certain subsequent filing procedure. Toyota does not assume any responsibility to ensure withholding at the reduced rate, or exemption therefrom, for non-resident Holders who would be so eligible under an applicable tax treaty, but where the required procedures as stated above are not followed.

Gains derived from the sale of shares of common stock or ADSs outside Japan by a non-resident Holder holding such shares of common stock or ADSs as portfolio investors are, in general, not subject to Japanese income tax or corporation tax under Japanese law. In addition, Eligible U.S. Holders are exempt from Japanese income or corporation tax with respect to such gains under the Treaty so long as filings required under Japanese law are made.

Japanese inheritance and gift taxes at progressive rates may be payable by an individual who has acquired from another individual shares of common stock or ADSs as a legatee, heir or donee even though neither the individual, nor the deceased, nor donor is a Japanese resident.

Holders of shares of common stock or ADSs should consult their tax advisors regarding the effect of these taxes and, in the case of U.S. Holders, the possible application of the Estate and Gift Tax Treaty between the United States and Japan.

U.S. Federal Income Taxation

U.S. Holders

The following discussion is a summary of the principal U.S. federal income tax consequences to U.S. Holders that hold shares of common stock or ADSs as capital assets (generally, for investment purposes).

Taxation of Dividends

Subject to the passive foreign investment company (“PFIC”) rules discussed below, the gross amount of any distribution made by Toyota in respect of shares of common stock or ADSs (without reduction for Japanese withholding taxes) will constitute a taxable dividend to the extent paid out of current or accumulated earnings and profits, as determined under U.S. federal income tax principles. The U.S. dollar amount of such a dividend generally will be included in the gross income of a U.S. Holder, as ordinary income, when actually or constructively received by the U.S. Holder, in the case of shares of common stock, or by the Depositary, in the case of ADSs. Dividends paid by Toyota will not be eligible for the dividends-received deduction generally allowed to U.S. corporations in respect of dividends received from other U.S. corporations.

Dividends received on shares and ADSs of certain foreign corporations by non-corporate U.S. investors may be subject to U.S. federal income tax at lower rates than other types of ordinary income if certain conditions are met. Dividends received by non-corporate U.S. Holders with respect to shares of common stock or ADSs of

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Toyota are expected to be eligible for these reduced rates of tax. U.S. Holders should consult their own tax advisors regarding the eligibility of such dividends for a reduced rate of tax.

The U.S. dollar amount of a dividend paid in Japanese yen will be determined based on the Japanese yen/U.S. dollar exchange rate in effect on the date that the dividend is included in the gross income of the U.S. Holder, regardless of whether the payment is converted into U.S. dollars on that date. Generally, any gain or loss resulting from currency exchange fluctuations during the period from the date the dividend payment is included in the gross income of a U.S. Holder through the date that payment is converted into U.S. dollars (or otherwise disposed of) will be treated as U.S.-source ordinary income or loss. U.S. Holders should consult their own tax advisors regarding the calculation and U.S. federal income tax treatment of foreign currency gain or loss.

To the extent, if any, that the amount of any distribution received by a U.S. Holder in respect of shares of common stock or ADSs exceeds Toyota’s current and accumulated earnings and profits, as determined under U.S. federal income tax principles, the distribution first will be treated as a tax-free return of capital to the extent of the U.S. Holder’s adjusted tax basis in those shares or ADSs, and thereafter will be treated as U.S.-source capital gain.

Distributions of additional shares of common stock that are made to U.S. Holders with respect to their shares of common stock or ADSs, and that are part of a pro rata distribution to all of Toyota’s shareholders, generally will not be subject to U.S. federal income tax.

For U.S. foreign tax credit purposes, dividends included in gross income by a U.S. Holder in respect of shares of common stock or ADSs will constitute income from sources outside the United States, and will generally be “passive category income” or, in the case of certain U.S. Holders, “general category income.” Subject to generally applicable limitations under U.S. federal income tax law and the Treaty, any Japanese withholding tax imposed in respect of a Toyota dividend may be claimed as a credit against the U.S. federal income tax liability of a U.S. Holder, or alternatively as a deduction in the computation of such U.S. Holder’s taxable income if the U.S. Holder does not elect to claim a credit for any foreign taxes paid or accrued for the taxable year. Special rules generally will apply to the calculation of foreign tax credits in respect of dividend income that qualifies for preferential U.S. federal income tax rates. Additionally, special rules apply to individuals whose foreign source income during the taxable year consists entirely of “qualified passive income” and whose creditable foreign taxes paid or accrued during the taxable year do not exceed $300 ($600 in the case of a joint return). Further, under some circumstances, a U.S. Holder that:

(i) has held shares of common stock or ADSs for less than a specified minimum period; or

(ii) is obligated to make payments related to Toyota dividends,

will not be allowed a foreign tax credit for Japanese taxes imposed on Toyota dividends.

U.S. Holders are urged to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.

Taxation of Capital Gains and Losses

In general, upon a sale or other taxable disposition of shares of common stock or ADSs, a U.S. Holder will recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the amount realized on the sale or other taxable disposition and the U.S. Holder’s adjusted tax basis in those shares of common stock or ADSs. A U.S. Holder generally will have an adjusted tax basis in a share of common stock or an ADS equal to its U.S. dollar cost. Subject to the PFIC rules discussed below, gain or loss recognized on the sale or other taxable disposition of shares of common stock or ADSs generally will be capital gain or loss and, if the U.S. Holder’s holding period for those shares or ADSs exceeds one year, will be long-term capital gain or loss. Non-corporate U.S. Holders, including individuals, currently are eligible for preferential rates of U.S. federal income tax in respect of long-term capital gains. Under U.S. federal income tax law, the deduction

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of capital losses is subject to limitations. Any gain or loss recognized by a U.S. Holder in respect of the sale or other disposition of shares of common stock or ADSs generally will be treated as U.S.-source income or loss for U.S. foreign tax credit purposes.

Deposits and withdrawals of common stock in exchange for ADSs will not result in the realization of gain or loss for U.S. federal income tax purposes.

Passive Foreign Investment Companies

A non-U.S. corporation generally will be classified as a PFIC for U.S. federal income tax purposes in any taxable year in which, after applying look-through rules, either (1) at least 75% of its gross income is passive income or (2) on average at least 50% of the gross value of its assets is attributable to assets that produce passive income or are held for the production of passive income. Passive income for this purpose generally includes dividends, interest, royalties, rents and gains from commodities and securities transactions. The PFIC determination is made annually and generally is based on the value of a non-U.S. corporation’s assets (including goodwill) and composition of its income.

Toyota does not believe that it was a PFIC for U.S. federal income tax purposes for its taxable year ended March 31, 2020, and currently intends to continue its operations in such a manner that it will not become a PFIC in the future. Because the PFIC determination is made annually and the application of the PFIC rules to a corporation such as Toyota (which among other things is engaged in leasing and financing through several subsidiaries) is not entirely clear, no assurances can be made regarding determination of its PFIC status in the current or any future taxable year. If Toyota is determined to be a PFIC, U.S. Holders could be subject to additional U.S. federal income taxes on gain recognized with respect to the shares of common stock or ADSs and on certain distributions. In addition, an interest charge may apply to the portion of the U.S. federal income tax liability on such gains or distributions treated under the PFIC rules as having been deferred by the U.S. Holder. Moreover, dividends that a non-corporate U.S. Holder receives from Toyota will not be eligible for the reduced U.S. federal income tax rates on dividends described above if Toyota is a PFIC either in the taxable year of the dividend or the preceding taxable year. If a U.S. Holder owns shares of common stock or ADSs in any taxable year in which Toyota is a PFIC, such U.S. Holder generally would be required to file Internal Revenue Service (“IRS”) Form 8621 (or other form specified by the U.S. Department of the Treasury) on an annual basis, subject to certain exceptions based on the value of PFIC stock held. Toyota will inform U.S. Holders if it believes that it will be classified as a PFIC in any taxable year.

Prospective investors should consult their own tax advisors regarding the potential application of the PFIC rules to shares of common stock or ADSs.

Non-U.S. Holders

The following discussion is a summary of the principal U.S. federal income tax consequences to beneficial owners of shares of common stock or ADSs that are neither U.S. Holders, nor partnerships, nor entities taxable as partnerships for U.S. federal income tax purposes (“Non-U.S. Holders”).

A Non-U.S. Holder generally will not be subject to any U.S. federal income or withholding tax on distributions received in respect of shares of common stock or ADSs unless the distributions are effectively connected with the conduct by the Non-U.S. Holder of a trade or business within the United States (and, if an applicable tax treaty requires, are attributable to a U.S. permanent establishment or fixed base of such Non-U.S. Holder).

A Non-U.S. Holder generally will not be subject to U.S. federal income tax in respect of gain recognized on a sale or other disposition of shares of common stock or ADSs, unless:

(i) the gain is effectively connected with a trade or business conducted by the Non-U.S. Holder within the United States (and, if an applicable tax treaty requires, is attributable to a U.S. permanent establishment or fixed base of such Non-U.S. Holder); or

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(ii) the Non-U.S. Holder is an individual who was present in the United States for 183 or more days in the taxable year of the disposition and other conditions are met.

Income that is effectively connected with a U.S. trade or business of a Non-U.S. Holder, and, if an income tax treaty applies and so requires, is attributable to a U.S. permanent establishment or fixed base of the Non-U.S. Holder, generally will be taxed in the same manner as the income of a U.S. Holder. In addition, under certain circumstances, any effectively connected earnings and profits realized by a corporate Non-U.S. Holder may be subject to an additional “branch profits tax” at the rate of 30% or at a lower rate that may be prescribed by an applicable income tax treaty.

Backup Withholding and Information Reporting

In general, information reporting requirements will apply to dividends paid to a U.S. Holder in respect of shares of common stock or ADSs, and to the proceeds received upon the sale, exchange or redemption of the shares of common stock or ADSs within the United States by U.S. Holders. Furthermore, backup withholding may apply to those amounts (currently at a 24% rate) if a U.S. Holder fails to provide an accurate taxpayer identification number to certify that such U.S. Holder is not subject to backup withholding or to otherwise comply with the applicable requirements of the backup withholding requirements.

Dividends paid to a Non-U.S. Holder in respect of shares of common stock or ADSs, and proceeds received upon the sale, exchange or redemption of shares of common stock or ADSs by a Non-U.S. Holder, generally are exempt from information reporting and backup withholding under current U.S. federal income tax law. However, a Non-U.S. Holder may be required to provide certification of non-U.S. status in order to obtain that exemption.

Persons required to establish their exempt status generally must provide such certification under penalty of perjury on IRS Form W-9, entitled Request for Taxpayer Identification Number and Certification, in the case of U.S. persons, and on IRS Form W-8BEN, entitled Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals), or IRS Form W-8BEN-E, entitled Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities) (or other appropriate IRS Form W-8), in the case of non-U.S. persons. Backup withholding is not an additional tax. The amount of backup withholding imposed on a payment generally may be claimed as a credit against the holder’s U.S. federal income tax liability, provided that the required information is properly furnished to the IRS in a timely manner.

In addition, certain U.S. Holders who are individuals that hold certain foreign financial assets (which may include shares of common stock or ADSs) are required to report information relating to such assets, subject to certain exceptions. U.S. Holders should consult their tax advisors regarding the effect, if any, of this legislation on their ownership and disposition of shares of common stock or ADSs.

THE SUMMARY OF U.S. FEDERAL INCOME AND JAPANESE NATIONAL TAX CONSEQUENCES SET OUT ABOVE IS INTENDED FOR GENERAL INFORMATION PURPOSES ONLY. PROSPECTIVE PURCHASERS OF COMMON STOCK OR ADSs ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF OWNING OR DISPOSING OF COMMON STOCK OR ADSs, BASED ON THEIR PARTICULAR CIRCUMSTANCES.

10.F DIVIDENDS AND PAYING AGENTS

Not applicable.

10.G STATEMENT BY EXPERTS

Not applicable.

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10.H DOCUMENTS ON DISPLAY

Toyota files annual reports on Form 20-F and reports on Form 6-K with the SEC. You may access this information through the SEC’s website (http://www.sec.gov). In addition, Toyota’s reports, proxy statements and other information may be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. Copies of the documents referred to herein may also be inspected at Toyota’s offices by contacting Toyota at 1 Toyota-cho, Toyota City, Aichi Prefecture 471-8571, Japan, attention: Financial Reporting Department, Accounting Division, telephone number: +81-565-28-2121.

10.I SUBSIDIARY INFORMATION

Not applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and Qualitative Disclosures about Market Risk

Toyota is exposed to market risk from changes in foreign currency exchange rates, interest rates, certain commodity and equity security prices. In order to manage the risk arising from changes in foreign currency exchange rates and interest rates, Toyota enters into a variety of derivative financial instruments.

A description of Toyota’s accounting policies for derivative instruments is included in note 2 to the consolidated financial statements and further disclosure is provided in notes 21 and 28 to the consolidated financial statements.

Toyota monitors and manages these financial exposures as an integral part of its overall risk management program, which recognizes the unpredictability of financial markets, and seeks to reduce the potentially adverse effects on Toyota’s operating results.

The financial instruments included in the market risk analysis consist of all of Toyota’s cash and cash equivalents, equity securities with readily determinable fair values, debt securities designated as available-for-sale, finance receivables, securities investments, long-term and short-term debt and all derivative financial instruments. Toyota’s portfolio of derivative financial instruments consists of forward foreign currency exchange contracts, foreign currency options, interest rate swaps, interest rate currency swap agreements and interest rate options. Anticipated transactions denominated in foreign currencies that are covered by Toyota’s derivative hedging are not included in the market risk analysis. Although operating leases are not required to be included, Toyota has included these instruments in determining interest rate risk.

Foreign Currency Exchange Rate Risk

Toyota has foreign currency exposures related to buying, selling and financing in currencies other than the local currencies in which it operates. Toyota is exposed to foreign currency risk related to future earnings or assets and liabilities that are exposed due to operating cash flows and various financial instruments that are denominated in foreign currencies. Toyota’s most significant foreign currency exposures relate to the U.S. dollar and the euro.

Toyota uses a value-at-risk analysis (“VAR”) to evaluate its exposure to changes in foreign currency exchange rates. The VAR of the combined foreign exchange position represents a potential loss in pre-tax earnings that was estimated to be ¥224.0 billion and ¥202.4 billion as of March 31, 2019 and 2020, respectively. Based on Toyota’s overall currency exposure (including derivative positions), the risk during fiscal 2020 to pre-tax cash flow from currency movements was on average ¥216.2 billion, with a high of ¥227.7 billion and a low of ¥202.4 billion.

The VAR was estimated by using a Monte Carlo Simulation Method and assumed 95% confidence level on the realization date and a 10-day holding period.

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Interest Rate Risk

Toyota is subject to market risk from exposures to changes in interest rates based on its financing, investing and cash management activities. Toyota enters into various financial instrument transactions to maintain the desired level of exposure to the risk of interest rate fluctuations and to minimize interest expense. The potential decrease in fair value resulting from a hypothetical 100 basis point upward shift in interest rates would be approximately ¥249.1 billion as of March 31, 2019 and ¥307.9 billion as of March 31, 2020.

There are certain shortcomings inherent to the sensitivity analyses presented. The model assumes that interest rate changes are instantaneous parallel shifts in the yield curve. However, in reality, changes are rarely instantaneous. Although certain assets and liabilities may have similar maturities or periods to repricing, they may not react correspondingly to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate with changes in market interest rates, while interest rates on other types of assets may lag behind changes in market rates. Finance receivables are less susceptible to prepayments when interest rates change and, as a result, Toyota’s model does not address prepayment risk for automotive related finance receivables. However, in the event of a change in interest rates, actual loan prepayments may deviate significantly from the assumptions used in the model.

Commodity Price Risk

Commodity price risk is the possibility of higher or lower costs due to changes in the prices of commodities, such as non-ferrous alloys (e.g., aluminum), precious metals (e.g., palladium, platinum and rhodium) and ferrous alloys, which Toyota uses in the production of motor vehicles. Toyota controls its commodity price risk by holding minimum stock levels.

Equity Price Risk

Toyota holds investments in various equity securities with readily determinable fair values that are subject to price risk. The fair value of equity securities with readily determinable fair values was ¥2,154.9 billion as of March 31, 2019 and ¥1,895.6 billion as of March 31, 2020. The potential change in the fair value of these investments, assuming a 10% change in prices, would be approximately ¥215.4 billion as of March 31, 2019 and ¥189.5 billion as of March 31, 2020.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

12.A DEBT SECURITIES

Not applicable.

12.B WARRANTS AND RIGHTS

Not applicable.

12.C OTHER SECURITIES

Not applicable.

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12.D AMERICAN DEPOSITARY SHARES

Fees and Charges for Holders of American Depositary Receipts

The Bank of New York Mellon, as Depositary for the ADSs, collects its fees for delivery and surrender of ADSs directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The Depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The Depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.

Persons depositing or withdrawing shares must pay:	For:
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)	•Issuance of ADSs, including issuances resulting from a distribution, sale or exercise of shares or rights or other property •Cancellation of ADSs for the purpose of withdrawal including if the deposit agreement terminates
$0.02 (or less) per ADS	•Any cash distribution to ADS registered holders
A fee equivalent to the fee that would be payable if securities distributed to the ADR holder had been shares and the shares had been deposited for issuance of ADSs	•Distribution of securities distributed to holders of deposited securities which are distributed by the Depositary to ADS registered holders
Registration fees	•Registration of transfer of shares on Toyota’s share register to the name of the Depositary or its nominee or the custodian or its nominee when shares are deposited or withdrawn
Expenses of the Depositary	•Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement) •Converting foreign currency to U.S. dollars
Taxes and other governmental charges the Depositary or the custodian have to pay on any ADS or share underlying an ADS	•As necessary

Fees Incurred in Fiscal 2020

For fiscal 2020, Toyota received $750,206,93 from the Depositary for standard out-of-pocket maintenance costs for the ADRs (consisting of the expenses of postage and envelopes for mailing annual reports, printing and distributing dividend checks, stationery, postage, facsimile, and telephone calls), expenses relating to Toyota’s annual general shareholders’ meeting that are incurred with respect to Toyota’s ADR holders and 50% of the net dividend fees collected by the Depositary. The Depositary also paid Toyota’s continuing annual stock exchange listing fees.

Fees to be Paid in the Future

With regards to the ADS program, the Depositary has agreed to pay the standard out-of-pocket maintenance costs for the ADRs, which includes the expenses of postage and envelopes for mailing annual reports, printing and distributing dividend checks, stationery, postage, facsimile and telephone calls. It has also agreed to pay for investor relations expenses and any other program related expenses. The limit on the amount of expenses for which the Depositary will pay is the sum of $300,000 annually. In addition, the Depositary has agreed to pay Toyota 50% of the net dividend fees collected by the Depositary during each annual period towards the aforementioned expenses.

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PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

None.

ITEM 15. CONTROLS AND PROCEDURES

(a) DISCLOSURE CONTROLS AND PROCEDURES

Toyota performed an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures as of the end of fiscal 2020. Disclosure controls and procedures are designed to ensure that information required to be disclosed in the Form 20-F that Toyota files under the Exchange Act is accumulated and communicated to its management, including the chief executive officer and the principal accounting and financial officer, to allow timely decisions regarding required disclosure. The disclosure controls and procedures also ensure that the Form 20-F that it files under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. The evaluation was performed under the supervision of Toyota’s President and Representative Director, who concurrently serves as CEO, and Operating Officer who concurrently serves as CFO. Toyota’s disclosure controls and procedures are designed to provide reasonable assurance of achieving its objectives. Managerial judgment was necessary to evaluate the cost-benefit relationship of possible controls and procedures. The President and Representative Director as well as the Operating Officer have concluded that Toyota’s disclosure controls and procedures are effective at the reasonable assurance level.

(b) MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Toyota’s management is responsible for establishing and maintaining effective internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Toyota’s internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that in reasonable detail, accurately and fairly reflect the transactions and dispositions of Toyota’s assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that Toyota’s receipts and expenditures are being made only in accordance with authorizations of Toyota’s management and members of the board of directors; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of Toyota’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

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Toyota’s management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in “Internal Control — Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this evaluation, management concluded that Toyota’s internal control over financial reporting was effective as of March 31, 2020.

PricewaterhouseCoopers Aarata LLC, an independent registered public accounting firm that audited the consolidated financial statements included in this report, has also audited the effectiveness of Toyota’s internal control over financial reporting as of March 31, 2020, as stated in its report included herein.

(c) ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM

Toyota’s independent registered public accounting firm, PricewaterhouseCoopers Aarata LLC, has issued an audit report on the effectiveness of Toyota’s internal control over financial reporting. This report appears in Item 18.

(d) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have been no changes in Toyota’s internal control over financial reporting during fiscal 2020 that have materially affected, or are reasonably likely to materially affect, Toyota’s internal control over financial reporting.

ITEM 16. [RESERVED]

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

Toyota maintains an audit & supervisory board system, in accordance with the Companies Act. Toyota’s audit & supervisory board is comprised of six audit & supervisory board members, three of whom are outside audit & supervisory board members. Each audit & supervisory board member has been appointed at Toyota’s meetings of shareholders and has certain statutory powers independently, including auditing the business affairs and accounts of Toyota.

Toyota’s audit & supervisory board has determined that it does not have an “audit committee financial expert” serving on the audit & supervisory board. The qualifications for, and powers of, the audit & supervisory board member delineated in the Companies Act are different from those anticipated for any audit committee financial expert. Audit & supervisory board members have the authority to be given reports from a certified public accountant or an accounting firm concerning audits, including technical accounting matters. At the same time, each audit & supervisory board member has the authority to consult internal and external experts on accounting matters. Each audit & supervisory board member must fulfill the requirements under Japanese laws and regulations and otherwise follow Japanese corporate governance practices and, accordingly, Toyota’s audit & supervisory board has confirmed that it is not necessarily in Toyota’s best interest to nominate as audit & supervisory board member a person who meets the definition of audit committee financial expert. Although Toyota does not have an audit committee financial expert on its audit & supervisory board, Toyota believes that Toyota’s current corporate governance system, taken as a whole, including the audit & supervisory board members’ ability to consult internal and external experts, is fully equivalent to a system having an audit committee financial expert on its audit & supervisory board.

ITEM 16B. CODE OF ETHICS

Toyota has adopted a code of ethics that applies to its members of the board of directors and operating officers, including its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of Toyota’s code of ethics is included as an exhibit to this annual report on Form 20-F.

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ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

PricewaterhouseCoopers Aarata LLC has audited the financial statements of Toyota included in this annual report on Form 20-F.

The following table presents the aggregate fees for professional services and other services rendered by PricewaterhouseCoopers Aarata LLC and the various network and member firms of PricewaterhouseCoopers to Toyota in fiscal 2019 and fiscal 2020.

	Yen in millions
	2019		2020
Audit Fees(1)		4,517		4,712
Audit-related Fees(2)		84		132
Tax Fees(3)		462		398
All Other Fees(4)		233		497
Total		5,296		5,739

(1) Audit Fees consist of fees billed for the annual audit services engagement and other audit services, which are those services that only the external auditor reasonably can provide, and include the services of annual audit, quarterly reviews and assessment and reviews of the effectiveness of internal controls over financial reporting of Toyota and its subsidiaries and affiliated companies; the services associated with SEC registration statements or other documents issued in connection with securities offerings such as comfort letters and consents; and consultations as to the accounting or disclosure treatment of transactions or events.

(2) Audit-related Fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of its financial statements or that are traditionally performed by the external auditor, and mainly include services such as due diligence; agreed-upon or expanded audit procedures; internal control reviews and assistance; review of the information system; and financial statement audits of employee benefit plans.

(3) Tax Fees include fees billed for tax compliance services, including services such as tax planning, advice and compliance of federal, state, local and international tax; the review of tax returns; assistance with tax audits and appeals; tax-only valuation services including transfer pricing and cost segregation studies; expatriate tax assistance and compliance.

(4) All Other Fees primarily include fees billed for risk management advisory services of assessment and testing of security infrastructure controls; services providing information related to automotive market conditions; IT advisory services; and other advisory services.

Policies and Procedures of the Audit & Supervisory Board

Below is a summary of the current policies and procedures of the audit & supervisory board for the pre-approval of audit and permissible non-audit services performed by Toyota’s independent public accountants.

Under the policy, specified operating officers or managers submit a request for general pre-approval of audit and permissible non-audit services for the following fiscal year, which shall include details of the specific services and estimated fees for the services, to the audit & supervisory board, which reviews and determines whether or not to grant the request in advance. Upon the general pre-approval of the audit & supervisory board, the specified operating officers or managers are not required to obtain any specific pre-approval for audit and permissible non-audit services so long as those services fall within the scope of the general pre-approval provided.

The audit & supervisory board makes a further determination of whether or not to grant a request to revise the general pre-approval for the applicable fiscal year if such request is submitted by specified operating officers

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or managers. Such request may include (i) adding any audit or permissible non-audit services other than the ones listed in the general pre-approval and (ii) obtaining services that are listed in the general pre-approval but of which the total fee amount exceeds the amount affirmed by the general pre-approval. The determination of whether or not to grant a request to revise the general pre-approval noted in the foregoing may alternatively be made by an audit & supervisory board member (full time), who is designated in advance by a resolution of the audit & supervisory board, in which case such audit & supervisory board member (full time) shall report such decision at the next meeting of the audit & supervisory board. The performance of audit and permissible non-audit services and the payment of fees are subject to review by the audit & supervisory board at least once every fiscal half year.

None of the audit related fees, tax fees or all other fees described in the table above were approved by the audit & supervisory board pursuant to the de minimis exception provided by paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Toyota does not have an audit committee. Toyota is relying on the general exemption contained in Rule 10A-3(c)(3) under the Exchange Act, which provides an exemption from the NYSE’s listing standards relating to audit committees for foreign companies like Toyota that have an audit & supervisory board. Toyota’s reliance on Rule 10A-3(c)(3) does not, in its opinion, materially adversely affect the ability of its audit & supervisory board to act independently and to satisfy the other requirements of Rule 10A-3.

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

The following table sets forth purchases of Toyota’s common stock by Toyota and its affiliated purchasers during fiscal 2020:

Period	(a) Total Number of Shares Purchased(1)		(b) Average Price Paid per Share (Yen)(1)		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2)		(d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(2)
April 1, 2019 – April 30, 2019		1,577		6,782.21		—		—
May 1, 2019 – May 31, 2019		679		6,693.88		—		—
June 1, 2019 – June 30, 2019		8,100,984		6,701.95		8,099,800		—
July 1, 2019 – July 31, 2019		11,601,802		6,990.64		11,599,900		—
August 1, 2019 – August 31, 2019		15,997,860		6,864.98		15,995,800		—
September 1, 2019 – September 30, 2019		7,653,704		7,163.37		7,652,000		—
October 1, 2019 – October 31, 2019		1,736		7,266.22		—		—
November 1, 2019 – November 30, 2019		3,227,320		7,807.68		3,224,400		—
December 1, 2019 – December 31, 2019		5,805,290		7,745.63		5,803,100		—
January 1, 2020 – January 31, 2020		5,933,097		7,722.45		5,929,400		—
February 1, 2020 – February 28, 2020		6,986,560		7,683.72		6,984,400		—
March 1, 2020 – March 31, 2020		4,245,526		7,167.43		4,244,100		—
Total		69,556,135		—		69,532,900		—

(1) A portion of the above purchases were made as a result of holders of shares constituting less than one unit, which is 100 shares of common stock, requesting Toyota to purchase shares that are a fraction of a unit, in

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accordance with Toyota’s share handling regulations. Toyota is required to comply with such requests pursuant to the Companies Act. See “Additional Information — Memorandum and Articles of Association — Japanese Unit Share System.” The number of shares purchased not pursuant to publicly announced plans or programs conducted in fiscal 2020 is 23,235.

(2) Toyota announced on May 8, 2019, that it would repurchase up to 50 million common shares between May 15, 2019 and September 30, 2019 at a total price up to ¥300 billion, in order to return to shareholders the profits derived in the fiscal year ended March 31, 2019. Toyota also announced on November 7, 2019 that it would repurchase up to 34 million common shares between November 11, 2019 and March 31, 2020 at a total price up to ¥250 billion in order to return to shareholders the profits derived in the interim period ended September 30, 2019.

ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

Not applicable.

ITEM 16G. CORPORATE GOVERNANCE

Significant Differences in Corporate Governance Practices between Toyota and U.S. Companies Listed on the NYSE

Pursuant to home country practices exemptions granted by the NYSE, Toyota is permitted to follow certain corporate governance practices complying with Japanese laws, regulations and stock exchange rules in lieu of the NYSE’s listing standards. The SEC approved changes to the NYSE’s listing standards related to corporate governance practices of listed companies (the “NYSE Corporate Governance Rules”) in November 2003, as further amended in November 2004. Toyota is exempt from the approved changes, except for requirements that (a) Toyota’s audit & supervisory board satisfies the requirements of Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (b) Toyota must disclose significant differences in its corporate governance practices as compared to those followed by domestic companies under the NYSE listing standards, (c) Toyota’s principal executive officer must notify the NYSE in writing after any executive officer of Toyota becomes aware of any non-compliance with (a) and (b), and (d) Toyota must submit annual and interim written affirmations to the NYSE. Toyota’s corporate governance practices and those followed by domestic companies under the NYSE Corporate Governance Rules have the following significant differences:

1. Members of the Board of Directors. Toyota currently does not have any members of the board of directors who will be deemed an “independent director” as required under the NYSE Corporate Governance Rules for U.S. listed companies. Unlike the NYSE Corporate Governance Rules, the Companies Act does not require Japanese companies with an audit & supervisory board such as Toyota to have any independent directors on its board of directors. While the NYSE Corporate Governance Rules require that the non-management directors of each listed company meet at regularly scheduled executive sessions without management, Toyota currently has no non-management member on its board of directors. Unlike the NYSE Corporate Governance Rules, the Companies Act does not require, and accordingly Toyota does not have, an internal corporate organ or committee comprised solely of independent directors.

Toyota currently has three outside members of the board of directors under the Companies Act. An “outside” member of the board of directors refers to:

(a) a person who is not, and has never been during the ten year period before becoming an outside member of the board of directors, an executive director (a member of the board of directors who engages in the execution of business), executive officer, manager or employee (collectively, “Executive Director, etc.”) of Toyota or its subsidiaries;

(b) if a person was a member of the board of directors, accounting counselor (in the case that an accounting counselor is a legal entity, an employee of such entity who is in charge of its affairs) or audit & supervisory

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board member (excluding those who have ever been Executive Directors, etc.) of Toyota or any of its subsidiaries at any time during the ten year period before becoming an outside member of the board of directors, such person who has not been an Executive Director, etc. of Toyota or any of its subsidiaries during the ten year period before becoming a member of the board of directors, accounting counselor or audit & supervisory board member; and

(c) a person who is not a spouse or relative within the second degree of kinship of any member of the board of directors or manager or other key employee of Toyota.

Such qualifications for an “outside” member of the board of directors are different from the director independence requirements under the NYSE Corporate Governance Rules.

In addition, pursuant to the regulations of the Japanese stock exchanges, Toyota is required to have one or more “independent director(s)/audit & supervisory board member(s),” defined under the relevant regulations of the Japanese stock exchanges as “outside directors” or “outside audit & supervisory board members” (as defined under the Companies Act), who are unlikely to have any conflicts of interests with Toyota’s general shareholders, and is also required to make efforts to have at least one “independent director(s)/audit & supervisory board member(s)” who is also a director. Each of the outside members of the board of directors of Toyota satisfies the “independent director/audit & supervisory board member” requirements under the regulations of the Japanese stock exchanges. Japan’s Corporate Governance Code provides that companies should appoint at least two “independent outside directors” as defined based on the criteria for assessing director independence established by Toyota in line with the independence standards of the Japanese stock exchanges. The content of the criteria for assessing director independence established by Toyota is the same as that of the independence standards of the Japanese stock exchanges, and each of the outside members of the board of directors of Toyota satisfies the “independent outside director” requirements under such independence standards. The definition of “independent director/audit & supervisory board member” and “independent outside director” is different from that of the definition of independent director under the NYSE Corporate Governance Rules.

2. Committees. Under the Companies Act, Toyota has elected to structure its corporate governance system as a company with audit & supervisory board members who are under a statutory duty to monitor, review and report on the management of the affairs of Toyota. Toyota, as with other Japanese companies with an audit & supervisory board, does not have certain committees that are required of U.S. listed companies subject to the NYSE Corporate Governance Rules, including those that are responsible for director nomination, corporate governance and executive compensation. However, members of Toyota’s Executive Appointment Meeting, a majority of whom are outside directors, discuss recommendations to the board of directors concerning the appointment and dismissal of members of the board of directors and audit & supervisory board members, and members of the Executive Compensation Meeting, a majority of whom are outside directors, review the remuneration system for members of board of directors and senior management as well as determine the amount of remuneration for each member of the board of directors.

Pursuant to the Companies Act, Toyota’s board of directors nominates and submits a proposal for the appointment of members of the board of directors for shareholder approval. The shareholders vote on such nomination at the general shareholders’ meeting. The Companies Act requires that the limits or calculation formula and kind (in case that the remuneration, bonus and any other benefits in compensation for the execution of duties (“remuneration, etc.”) are to be paid in other than cash) of remuneration, etc. to be paid to directors as well as limits of remuneration, etc. to be paid to audit & supervisory board members must be determined by a resolution of the general shareholders’ meeting, unless their remuneration, etc. is provided for in the articles of incorporation. The distribution of remuneration, etc. among each member of the board of directors is broadly delegated to the board of directors and the distribution of remuneration among each audit & supervisory board member is determined by consultation among the audit & supervisory board members.

133

3. Audit Committee. Toyota avails itself of paragraph (c)(3) of Rule 10A-3 of the Exchange Act, which provides a general exemption from the audit committee requirements to a foreign private issuer with an audit & supervisory board, subject to certain requirements which continue to be applicable under Rule 10A-3.

Pursuant to the requirements of the Companies Act, Toyota elects its audit & supervisory board members through a resolution adopted at a general shareholders’ meeting. Toyota currently has six audit & supervisory board members, which exceeds the minimum number of audit & supervisory board members required pursuant to the Companies Act.

Unlike the NYSE Corporate Governance Rules, the Companies Act, among others, does not require audit & supervisory board members to establish an expertise in accounting or financial management nor are they required to present other special knowledge and experience. Therefore, none of Toyota’s audit & supervisory board members has “an expertise in accounting or financial management” as set forth in the NYSE Corporate Governance Rules. The Japanese Corporate Governance Code indicates that persons with appropriate experience and skills as well as necessary knowledge of finance, accounting, and laws should be appointed as audit & supervisory board members, and in particular, one or more audit & supervisory board members who have sufficient knowledge of finance and accounting matters should be appointed. Toyota has appointed persons who are able to provide opinions and advice regarding management based on their broader experience and discretion beyond finance and accounting. Under the Companies Act, the audit & supervisory board may determine the auditing policies and methods of investigating the conditions of Toyota’s business and assets, and may resolve other matters concerning the execution of the audit & supervisory board member’s duties. The audit & supervisory board also prepares auditors’ reports and gives consent to proposals of the nomination of audit & supervisory board members. Further, the audit & supervisory board makes decisions concerning proposals relating to the appointment and dismissal of accounting auditors; it also has the authority to dismiss the accounting auditor when certain matters specified under the Companies Act occur.

Toyota currently has three outside audit & supervisory board members under the Companies Act. Under the Companies Act, at least half of the audit & supervisory board members must be an “outside” audit & supervisory board member, which is any person who satisfies all of the following requirements:

(a) the person has never been a member of the board of directors, accounting counselor (in the case that an accounting counselor is a legal entity, an employee of such entity who is in charge of its affairs), executive officer, manager or employee of Toyota or its subsidiaries during the ten year period before becoming an outside audit & supervisory board member;

(b) if the person was an audit & supervisory board member of Toyota or any of its subsidiaries at any time during the ten year period before becoming an outside audit & supervisory board member, such person has not been a member of the board of directors, accounting counselor (in the case that an accounting counselor is a legal entity, an employee of such entity who is in charge of its affairs), executive officer, manager or employee of Toyota or any of its subsidiaries during the ten year period before becoming an audit & supervisory board member of Toyota or any of its subsidiaries; and

(c) the person is not a spouse or relative within the second degree of kinship of any member of the board of directors or manager or other key employee of Toyota.

Such qualifications for an “outside” audit & supervisory board member are different from the audit committee independence requirement under the NYSE Corporate Governance Rules.

Each of the outside audit & supervisory board members of Toyota satisfies the “independent director/audit & supervisory board member” requirements under the regulations of the Japanese stock exchanges, as described above in “1. Members of the Board of Directors.”

4. Corporate Governance Guidelines. Unlike the NYSE Corporate Governance Rules, Toyota is not required to adopt Japan’s Corporate Governance Code under Japanese laws and regulations, including the

134

Companies Act, the Financial Instruments and Exchange Law of Japan and stock exchange rules. However, if Toyota does not comply with Japan’s Corporate Governance Code, it is required to explain the reasons why it does not do so in accordance with the regulations of the Japanese stock exchanges. In addition, Toyota is required to resolve at the board of directors matters relating to a system, which is required under the ordinance of the Ministry of Justice (“internal control system” or “naibu-tosei”), to ensure the execution of duties of the members of the board of directors to comply with laws, regulations and articles of incorporation, and any other systems to ensure the adequacy of the business, and to disclose such matters resolved, policies and the present status of its corporate governance in its business reports, annual securities report and certain other disclosure documents in accordance with the regulations under the Financial Instruments and Exchange Law and stock exchange rules in respect of timely disclosure.

5. Code of Business Conduct and Ethics. Similar to the NYSE Corporate Governance Rules, under Japan’s Corporate Governance Code, Toyota is encouraged to adopt a code of conduct regarding ethical business activities for members of the board of directors, officers and employees. Toyota has resolved matters relating to maintenance of an “internal control system,” or “naibu-tosei,” in order to ensure its employees comply with laws, regulations and the articles of incorporation, etc. pursuant to the Companies Act, and Toyota maintains guidelines and internal regulations such as “Guiding Principles at Toyota,” “Toyota Code of Conduct” and a code of ethics pursuant to Section 406 of the Sarbanes-Oxley Act. Please see “Code of Ethics” for additional information.

ITEM 16H. MINE SAFETY DISCLOSURE

Not applicable.

135

PART III

ITEM 17. FINANCIAL STATEMENTS

Not applicable.

ITEM 18. FINANCIAL STATEMENTS

The following financial statements are filed as part of this annual report on Form 20-F.

136

TOYOTA MOTOR CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm		F-2
Consolidated balance sheets at March 31, 2019 and 2020		F-4
Consolidated statements of income for the years ended March 31, 2018, 2019 and 2020		F-6
Consolidated statements of comprehensive income for the years ended March 31, 2018, 2019 and 2020		F-7
Consolidated statements of shareholders’ equity for the years ended March 31, 2018, 2019 and 2020		F-8
Consolidated statements of cash flows for the years ended March 31, 2018, 2019 and 2020		F-10
Notes to consolidated financial statements		F-11

All financial statements schedules are omitted because they are not applicable or the required information is shown in the financial statements or the notes thereto.

Financial statements of 50% or less owned persons accounted for by the equity method have been omitted because the registrant’s proportionate share of the income from continuing operations before income taxes is less than 20% of consolidated income from continuing operations before income taxes and the investment in and advances to each company is less than 20% of consolidated total assets.

F-1

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of

Toyota Jidosha Kabushiki Kaisha

(“Toyota Motor Corporation”)

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Toyota Motor Corporation and its subsidiaries (collectively referred to as the “Company”) as of March 31, 2019 and 2020, and the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended March 31, 2020, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of March 31, 2020, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of March 31, 2019 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2020 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2020, based on criteria established in Internal Control—Integrated Framework (2013) issued by the COSO.

Changes in Accounting Principles

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for depreciation of property, plant and equipment beginning April 1, 2019 and the manner in which it accounts for investments in equity securities beginning April 1, 2018.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control Over Financial Reporting appearing under Item 15(b). Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

F-2

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Liabilities for the costs of recalls and other safety measures

As described in Notes 2 and 13 to the consolidated financial statements, the Company accrues for costs of recalls and other safety measures. As of March 31, 2020, liabilities for the estimated costs of recalls and other safety measures totaled ¥1,104,711 million and were included in accrued expenses in the consolidated balance sheet. The Company measures the majority of liabilities for recalls and other safety measures at the time of vehicle sales comprehensively by aggregate sales of various models in a certain period by geographical regions. However, when circumstances warrant, the Company measures liabilities for a particular recall or other safety measures using an individual model when probable and reasonably estimable. Management’s estimate is based on historical costs and pattern of payment occurrence.

The principal considerations for our determination that performing procedures relating to liabilities for the costs of recalls and other safety measures that are determined comprehensively is a critical audit matter are 1) significant judgment and estimation was required by management when developing the liabilities which in turn led to a high degree of auditor judgement and subjectivity in performing procedures to evaluate management’s significant assumptions; and 2) significant audit effort was necessary relating to testing the historical costs utilized in the comprehensive model and pattern of payment occurrence utilized in developing the estimate. In addition, the audit effort included the involvement of professionals with specialized skills and knowledge to assist in performing these procedures and evaluating the audit evidence obtained.

Our approach to addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. We tested the effectiveness of controls relating to liabilities for the costs of recalls and other safety measures, including controls related to the determination of significant assumptions and data used to calculate the liability determined comprehensively. Our procedures also included, among others: 1) testing management’s process for estimating the liabilities, including evaluating the reasonableness of significant assumptions; and 2) testing of the completeness and accuracy of the data used in the estimate. We also utilized professionals with specialized skills and knowledge to assist us in testing the liability by developing an independent range of reasonable estimated loss based on the Company’s data and independently developed assumptions.

Allowance for Credit Losses—Retail finance receivables

As described in Notes 2, 6, and 10 to the consolidated financial statements, the Company estimates and records an allowance for credit losses for its retail finance receivables by applying reserve rates to such receivables. Reserve rates are estimated primarily based on historical loss experience, current economic events and conditions, and other pertinent factors. As of March 31, 2020, ¥151,490 million of the allowance for credit losses corresponding to ¥12,795,076 million of retail finance receivables was recorded in the consolidated financial statements. Retail finance receivables and the allowance for credit losses within the United States represent a majority of the consolidated retail finance receivables and the associated allowance as of March 31, 2020.

The principal considerations for our determination that performing procedures relating to the allowance for credit losses for retail finance receivables is a critical audit matter are 1) there was a significant amount of judgment required by management when developing assumptions used in the determination of the allowance for credit losses based on historical loss experience, current economic events and conditions, and other pertinent factors which in turn led to a high degree of auditor judgement and subjectivity in performing procedures to evaluate management’s significant assumptions; 2) there was a high level of complexity in assessing audit evidence related to management’s estimate. In addition, the audit effort included the involvement of professionals with specialized skills and knowledge to assist in performing these procedures and evaluating the audit evidence obtained.

Our approach to addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. We tested the effectiveness of controls over the Company’s allowance for credit losses for retail finance receivables, including controls over historical loss experience and data supporting the assumptions used to determine the allowance. Our procedures included, among others, testing management’s process for estimating the allowance, including evaluating the reasonableness of assumptions based on the historical loss experience, current economic events and conditions, and other pertinent factors. We also used professionals with specialized skills and knowledge to assist us in evaluating the reasonableness of assumptions utilized by management.

/s/ PricewaterhouseCoopers Aarata LLC

Nagoya, Japan

June 24, 2020

We have served as the Company’s auditor since 2006.

F-3

TOYOTA MOTOR CORPORATION

CONSOLIDATED BALANCE SHEETS

	Yen in millions
	March 31,
	2019			2020
Assets
Current assets
Cash and cash equivalents		3,574,704			4,190,518
Time deposits		1,126,352			828,220
Marketable securities*1		1,127,160			678,731
Trade accounts and notes receivable, less allowance for doubtful accounts of ¥16,370 million in 2019 and ¥23,944 million in 2020		2,372,734			2,094,894
Finance receivables, net		6,647,771			6,614,171
Other receivables		568,156			564,854
Inventories		2,656,396			2,434,918
Prepaid expenses and other current assets		805,964			1,236,225
Total current assets		18,879,237			18,642,531
Noncurrent finance receivables, net		10,281,118			10,423,858
Investments and other assets
Marketable securities and other securities investments*1		7,479,926			7,348,651
Affiliated companies		3,313,723			4,123,453
Employees receivables		21,683			21,484
Other		1,275,768			1,518,934
Total investments and other assets		12,091,100			13,012,522
Property, plant and equipment
Land		1,386,308			1,346,988
Buildings		4,802,175			4,730,783
Machinery and equipment		11,857,425			11,939,121
Vehicles and equipment on operating leases		6,139,163			5,929,233
Construction in progress		651,713			510,963
Total property, plant and equipment, at cost		24,836,784			24,457,088
Less - Accumulated depreciation		(14,151,290	)		(13,855,563	)
Total property, plant and equipment, net		10,685,494			10,601,525
Total assets		51,936,949			52,680,436

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

F-4

TOYOTA MOTOR CORPORATION

CONSOLIDATED BALANCE SHEETS (CONTINUED)

	Yen in millions
	March 31,
	2019			2020
Liabilities
Current liabilities
Short-term borrowings		5,344,973			5,286,026
Current portion of long-term debt		4,254,260			4,574,045
Accounts payable		2,645,984			2,434,180
Other payables		1,102,802			1,020,270
Accrued expenses		3,222,446			2,926,052
Income taxes payable		320,998			218,117
Other current liabilities		1,335,475			1,443,687
Total current liabilities		18,226,938			17,902,377
Long-term liabilities
Long-term debt		10,550,945			10,692,898
Accrued pension and severance costs		963,406			978,626
Deferred income taxes		1,014,851			1,043,169
Other long-term liabilities		615,599			821,515
Total long-term liabilities		13,144,801			13,536,208
Total liabilities		31,371,739			31,438,585
Mezzanine equity
Model AA Class Shares, no par value,*2		498,073			504,169
authorized: 150,000,000 shares in 2019 and 2020; issued: 47,100,000 shares in 2019 and 2020
Shareholders’ equity
Toyota Motor Corporation shareholders’ equity
Common stock, no par value,*2 authorized: 10,000,000,000 shares in 2019 and 2020; issued: 3,262,997,492 shares in 2019 and 2020		397,050			397,050
Additional paid-in capital		487,162			489,334
Retained earnings		21,987,515			23,427,613
Accumulated other comprehensive income (loss)		(916,650	)		(1,166,273	)
Treasury stock, at cost, 430,558,325 shares in 2019 and 496,844,960 shares in 2020		(2,606,925	)		(3,087,106	)
Total Toyota Motor Corporation shareholders’ equity		19,348,152			20,060,618
Noncontrolling interests		718,985			677,064
Total shareholders’ equity		20,067,137			20,737,682
Commitments and contingencies
Total liabilities, mezzanine equity and shareholders’ equity		51,936,949			52,680,436

*1: Marketable securities and Marketable securities and other securities investments for the fiscal year ended March 31, 2020 include securities loaned of ¥156,051 million and ¥2,061,295 million, respectively.

*2: The total number of authorized shares for common stock and Model AA Class Shares is 10,000,000,000 shares.

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

F-5

TOYOTA MOTOR CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Net revenues
Sales of products		27,420,276			28,105,338			27,759,749
Financing operations		1,959,234			2,120,343			2,170,243
Total net revenues		29,379,510			30,225,681			29,929,992
Costs and expenses
Cost of products sold		22,600,474			23,389,495			23,142,744
Cost of financing operations		1,288,679			1,392,290			1,379,620
Selling, general and administrative		3,090,495			2,976,351			2,964,759
Total costs and expenses		26,979,648			27,758,136			27,487,123
Operating income		2,399,862			2,467,545			2,442,869
Other income (expense)
Interest and dividend income		179,541			225,495			232,870
Interest expense		(27,586	)		(28,078	)		(32,217	)
Foreign exchange gain (loss), net		22,664			12,400			(79,020	)
Unrealized gains (losses) on equity securities		—			(341,054	)		(24,600	)
Other income (loss), net		45,948			(50,843	)		14,705
Total other income (expense)		220,567			(182,080	)		111,738
Income before income taxes and equity in earnings of affiliated companies		2,620,429			2,285,465			2,554,607
Provision for income taxes		504,406			659,944			683,430
Equity in earnings of affiliated companies		470,083			360,066			271,152
Net income		2,586,106			1,985,587			2,142,329
Less - Net income attributable to noncontrolling interests		(92,123	)		(102,714	)		(66,146	)
Net income attributable to Toyota Motor Corporation		2,493,983			1,882,873			2,076,183
Note: Net income attributable to common shareholders for the fiscal year ended March 31, 2018, 2019 and 2020 is ¥2,481,692 million, ¥1,868,085 million and ¥2,058,899 million, respectively, which is derived by deducting dividend and accretion to Model AA Class Shares of ¥12,291 million, ¥14,788 million and ¥17,284 million, respectively, from Net income attributable to Toyota Motor Corporation.
	Yen
Net income attributable to Toyota Motor Corporation per common share
- Basic		842.00			650.55			735.61
- Diluted		832.78			645.11			729.50

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

F-6

TOYOTA MOTOR CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Net income		2,586,106			1,985,587			2,142,329
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		(120,606	)		27,016			(333,854	)
Unrealized gains (losses) on securities		(94,559	)		(21,165	)		118,363
Pension liability adjustments		22,315			(54,836	)		(60,196	)
Total other comprehensive income (loss)		(192,850	)		(48,985	)		(275,687	)
Comprehensive income		2,393,256			1,936,602			1,866,642
Less - Comprehensive income attributable to noncontrolling interests		(93,096	)		(96,458	)		(45,878	)
Comprehensive income attributable to Toyota Motor Corporation		2,300,160			1,840,144			1,820,764

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

F-7

TOYOTA MOTOR CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

	Yen in millions
	Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive income (loss)			Treasury stock, at cost			Total Toyota Motor Corporation shareholders’ equity			Noncontrolling interests			Total shareholders’ equity
Balances at March 31, 2017		397,050		484,013			17,601,070			640,922			(1,608,243	)		17,514,812			668,264			18,183,076
Equity transaction with noncontrolling interests and other				1,817			11,400			(11,400	)					1,817			(3,476	)		(1,659	)
Comprehensive income
Net income							2,493,983									2,493,983			92,123			2,586,106
Other comprehensive income (loss)
Foreign currency translation adjustments										(118,977	)					(118,977	)		(1,629	)		(120,606	)
Unrealized gains (losses) on securities										(96,581	)					(96,581	)		2,022			(94,559	)
Pension liability adjustments										21,735						21,735			580			22,315
Total comprehensive income																2,300,160			93,096			2,393,256
Accretion to Mezzanine equity							(4,849	)								(4,849	)					(4,849	)
Dividends to Toyota Motor Corporation class shareholders							(7,442	)								(7,442	)					(7,442	)
Dividends paid to Toyota Motor Corporation common shareholders							(620,698	)								(620,698	)					(620,698	)
Dividends paid to noncontrolling interests																			(63,764	)		(63,764	)
Repurchase of treasury stock													(500,177	)		(500,177	)					(500,177	)
Reissuance of treasury stock				1,672									50,687			52,359						52,359
Balances at March 31, 2018		397,050		487,502			19,473,464			435,699			(2,057,733	)		18,735,982			694,120			19,430,102
Cumulative effect of accounting changes							1,282,082			(1,309,620	)					(27,538	)					(27,538	)
Equity transaction with noncontrolling interests and other				105												105			(2,226	)		(2,121	)
Comprehensive income
Net income							1,882,873									1,882,873			102,714			1,985,587
Other comprehensive income (loss)
Foreign currency translation adjustments										29,448						29,448			(2,432	)		27,016
Unrealized gains (losses) on securities										(21,111	)					(21,111	)		(54	)		(21,165	)
Pension liability adjustments										(51,066	)					(51,066	)		(3,770	)		(54,836	)
Total comprehensive income																1,840,144			96,458			1,936,602
Accretion to Mezzanine equity							(4,850	)								(4,850	)					(4,850	)
Dividends to Toyota Motor Corporation class shareholders							(9,938	)								(9,938	)					(9,938	)
Dividends paid to Toyota Motor Corporation common shareholders							(636,116	)								(636,116	)					(636,116	)
Dividends paid to noncontrolling interests																			(69,367	)		(69,367	)
Repurchase of treasury stock													(550,107	)		(550,107	)					(550,107	)
Reissuance of treasury stock				(445	)								915			470						470
Balances at March 31, 2019		397,050		487,162			21,987,515			(916,650	)		(2,606,925	)		19,348,152			718,985			20,067,137

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

F-8

TOYOTA MOTOR CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (CONTINUED)

	Yen in millions
	Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive income (loss)			Treasury stock, at cost			Total Toyota Motor Corporation shareholders’ equity			Noncontrolling interests			Total shareholders’ equity
Balances at March 31, 2019		397,050		487,162			21,987,515			(916,650	)		(2,606,925	)		19,348,152			718,985			20,067,137
Equity transaction with noncontrolling interests and other				(1,881	)					5,796						3,915			(32,854	)		(28,939	)
Comprehensive income
Net income							2,076,183									2,076,183			66,146			2,142,329
Other comprehensive income (loss)
Foreign currency translation adjustments										(313,186	)					(313,186	)		(20,668	)		(333,854	)
Unrealized gains (losses) on securities										118,403						118,403			(40	)		118,363
Pension liability adjustments										(60,636	)					(60,636	)		440			(60,196	)
Total comprehensive income																1,820,764			45,878			1,866,642
Accretion to Mezzanine equity							(4,850	)								(4,850	)					(4,850	)
Dividends to Toyota Motor Corporation class shareholders							(12,434	)								(12,434	)					(12,434	)
Dividends paid to Toyota Motor Corporation common shareholders							(618,801	)								(618,801	)					(618,801	)
Dividends paid to noncontrolling interests																			(54,945	)		(54,945	)
Repurchase of treasury stock													(500,309	)		(500,309	)					(500,309	)
Reissuance of treasury stock				4,053									20,128			24,181						24,181
Balances at March 31, 2020		397,050		489,334			23,427,613			(1,166,273	)		(3,087,106	)		20,060,618			677,064			20,737,682

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

F-9

TOYOTA MOTOR CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Cash flows from operating activities
Net income		2,586,106			1,985,587			2,142,329
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		1,734,033			1,792,375			1,605,383
Provision (reversal) for doubtful accounts and credit losses		76,069			80,065			142,982
Pension and severance costs, less payments		4,286			31,645			15,699
Losses on disposal of fixed assets		35,289			35,902			56,913
Unrealized losses (gains) on securities		846			339,472			20,082
Deferred income taxes		(237,961	)		(86,594	)		192,147
Equity in earnings of affiliated companies		(470,083	)		(360,066	)		(271,152	)
Changes in operating assets and liabilities, and other
(Increase) decrease in accounts and notes receivable		(105,435	)		(246,845	)		248,895
Increase in inventories		(171,148	)		(166,902	)		(114,096	)
Increase in other current assets		(149,463	)		(102,472	)		(447,598	)
Increase (decrease) in accounts payable		46,648			94,887			(76,410	)
Increase (decrease) in accrued income taxes		238,753			(141,329	)		(101,739	)
Increase in other current liabilities		211,452			351,122			40,402
Other		423,736			159,750			136,806
Net cash provided by operating activities		4,223,128			3,766,597			3,590,643
Cash flows from investing activities
Additions to finance receivables		(15,058,516	)		(15,884,610	)		(16,896,588	)
Collection of finance receivables		14,013,204			14,834,709			15,641,681
Proceeds from sales of finance receivables		33,108			24,394			25,781
Additions to fixed assets excluding equipment leased to others		(1,291,117	)		(1,452,725	)		(1,407,832	)
Additions to equipment leased to others		(2,307,590	)		(2,286,162	)		(2,187,299	)
Proceeds from sales of fixed assets excluding equipment leased to others		71,820			65,437			48,751
Proceeds from sales of equipment leased to others		1,211,272			1,385,074			1,391,215
Purchases of marketable securities and security investments		(3,052,916	)		(1,840,355	)		(2,413,087	)
Proceeds from sales of marketable securities and security investments		275,574			1,134,127			1,146,444
Proceeds upon maturity of marketable securities and security investments		2,247,964			1,564,671			1,223,962
Payment for additional investments in affiliated companies, net of cash acquired		(576	)		5,010			(14,763	)
Changes in investments and other assets, and other		197,681			(246,811	)		290,874
Net cash used in investing activities		(3,660,092	)		(2,697,241	)		(3,150,861	)
Cash flows from financing activities
Proceeds from issuance of long-term debt		4,793,939			5,000,921			5,691,499
Payments of long-term debt		(4,452,338	)		(4,442,232	)		(4,424,923	)
Increase in short-term borrowings		347,738			164,282			291,623
Dividends paid to Toyota Motor Corporation class shareholders		(6,194	)		(8,690	)		(11,186	)
Dividends paid to Toyota Motor Corporation common shareholders		(620,698	)		(636,116	)		(618,801	)
Dividends paid to noncontrolling interests		(63,764	)		(69,367	)		(54,945	)
Reissuance (repurchase) of treasury stock		(447,818	)		(549,637	)		(476,129	)
Net cash provided by (used in) financing activities		(449,135	)		(540,839	)		397,138
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents		(43,588	)		(41,641	)		(131,245	)
Net increase in cash and cash equivalents and restricted cash and cash equivalents		70,313			486,876			705,675
Cash and cash equivalents and restricted cash and cash equivalents at beginning of year		3,149,326			3,219,639			3,706,515
Cash and cash equivalents and restricted cash and cash equivalents at end of year		3,219,639			3,706,515			4,412,190

Cash and cash equivalents and restricted cash and cash equivalents for the fiscal year ended March 31, 2020 include restricted cash and cash equivalents of ¥131,811 million and ¥221,672 million at the beginning of the year and the end of the year, respectively. Restricted cash and cash equivalents were included in Prepaid expenses and other current assets in the consolidated balance sheets.

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

F-10

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Nature of operations:

Toyota and its affiliated companies are primarily engaged in the design, manufacture, and sale of sedans, minivans, compact cars, sport-utility vehicles, trucks and related parts and accessories throughout the world. In addition, Toyota and its affiliated companies provide financing, vehicle leasing and certain other financial services primarily to its dealers and their customers to support the sales of vehicles and other products manufactured by Toyota and its affiliated companies.

2. Summary of significant accounting policies:

The parent company and its subsidiaries in Japan and its foreign subsidiaries maintain their records and prepare their financial statements in accordance with Japanese generally accepted accounting principles and those of their countries of domicile. Certain adjustments and reclassifications have been incorporated in the accompanying consolidated financial statements to conform to U.S.GAAP.

Significant accounting policies after reflecting adjustments for the above are as follows:

Basis of consolidation and accounting for investments in affiliated companies -

The consolidated financial statements include the accounts of the parent company, its majority-owned subsidiary companies and variable interest entities of which Toyota is the primary beneficiary. All significant intercompany transactions and accounts have been eliminated. Investments in affiliated companies in which Toyota exercises significant influence, but which it does not control, are stated at cost plus equity in undistributed earnings. Consolidated net income includes Toyota’s equity in current earnings of such companies, after elimination of unrealized intercompany profits. Investments in such companies are reduced to fair value if a decline in market value is determined other-than-temporary.

Estimates -

The preparation of Toyota’s consolidated financial statements in conformity with U.S.GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The more significant estimates include: product warranties, liabilities accrued for recalls and other safety measures, allowance for doubtful accounts and credit losses, residual values for leased assets, impairment of long-lived assets, pension costs and obligations, fair value of derivative financial instruments, other-than-temporary losses on debt securities, litigation liabilities and valuation allowance for deferred tax assets.

Translation of foreign currencies -

All asset and liability accounts of foreign subsidiaries and affiliated companies are translated into Japanese yen at appropriate year-end current exchange rates and all income and expense accounts of those subsidiaries are translated at the average exchange rates for each period. The foreign currency translation adjustments are included as a component of accumulated other comprehensive income.

Foreign currency receivables and payables are translated at appropriate year-end current exchange rates and the resulting transaction gains or losses are recorded in operations currently.

Revenue recognition -

In the automotive operations, performance obligations are considered to be satisfied when completed vehicles and parts are delivered to the agreed locations with dealers. For parts for overseas production, it is when

F-11

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

they are loaded on a ship to foreign manufacturing companies. We do not have any material significant payment terms as payment is received at or shortly after the point of sale.

Toyota’s sales incentive programs principally consist of cash payments to dealers calculated based on vehicle volume or a model sold by a dealer during a certain period of time. Toyota accrues these incentives as revenue reductions upon the sale of a vehicle corresponding to the program by the amount determined in the related incentive program utilizing the most likely outcome method.

The sale of certain vehicles includes a contractual right, which entitles customers to free vehicle maintenance. We use an observable price to determine the stand-alone selling price for separate performance obligations or a cost plus margin approach when one is not available. Such revenues from free maintenance contracts are deferred and recognized as revenue over the period of the contract in proportion to the costs expected to be incurred in satisfying the obligations under the contract.

Revenues from the sales of vehicles under which Toyota conditionally guarantees the minimum resale value are recognized on a pro rata basis from the date of sale to the first exercise date of the guarantee in accordance with lease accounting. The underlying vehicles of these transactions are recorded as assets and are depreciated in accordance with Toyota’s depreciation policy.

We have elected to recognize the cost of transport service activities after the customer gains control as expenses at the time that control of products transfers.

Revenues from retail financing contracts and finance leases are recognized using the effective yield method. Revenues from operating leases are recognized on a straight-line basis over the lease term.

All other operations business of Toyota includes the design, manufacture and sales of housing. Certain revenues from the housing business, such as those of ordered housing are recognized only to the extent of the costs incurred until such time that it can reasonably measure the outcome of the performance obligation.

If the period between satisfaction of the performance obligation and receipt of consideration is expected to be within one year or less, as a practical expedient, we do not adjust the promised amount of consideration for the effects of a significant financing component.

Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities.

Other costs -

Advertising and sales promotion costs are expensed as incurred. Advertising costs were ¥509,653 million, ¥490,093 million and ¥470,849 million for the years ended March 31, 2018, 2019 and 2020, respectively.

Toyota generally warrants its products against certain manufacturing and other defects. Provisions for product warranties are provided for specific periods of time and/or usage of the product and vary depending upon the nature of the product, the geographic location of the sale and other factors. Toyota records a provision for estimated product warranty costs at the time the related sale is recognized based on estimates that Toyota will incur to repair or replace product parts that fail while under warranty. The amount of accrued estimated warranty costs is primarily based on historical experience as to product failures as well as current information on repair costs. The amount of warranty costs accrued also contains an estimate of warranty claim recoveries to be received from suppliers.

In addition to product warranties above, Toyota accrues for costs of recalls and other safety measures based on management’s estimates when it is probable a liability has been incurred and the amount of loss can be reasonably estimated. Toyota mainly employs an estimation model, to accrue at the time of vehicle sale, an amount that represents management’s best estimate of expenses related to future recalls and other safety measures. The estimation model for recalls and other safety measures takes into account Toyota’s historical experience of recalls and other safety measures.

F-12

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Litigation liabilities are established to cover probable losses on various lawsuits based on the information currently available. Attorneys’ fees are expensed as incurred.

Research and development costs are expensed as incurred. Research and development costs were ¥1,064,269 million, ¥1,048,882 million and ¥1,110,369 million for the years ended March 31, 2018, 2019 and 2020, respectively.

Restricted cash and cash equivalents-

Cash and cash equivalents include all highly liquid investments with original maturities of three months or less, that are readily convertible to known amounts of cash and are so near maturity that they present insignificant risk of changes in value because of changes in interest rates. Restricted cash and cash equivalents mainly include customer collections on securitized receivables to be distributed to investors as payments on the related secured debt.

Marketable securities and other securities investments -

Marketable securities and other securities investments consist of debt and equity securities. Debt securities designated as available-for-sale are carried at fair value and the difference between fair value and acquisition cost is reflected as a component of accumulated other comprehensive income in shareholders’ equity, net of applicable taxes. Individual securities classified as available-for-sale are reduced to fair value for other-than-temporary declines in market value. In determining if a decline in value is other-than-temporary, Toyota considers the length of time during and the extent to which the fair value has been less than the carrying value, the financial condition and prospects of the entity issuing such securities and Toyota’s ability and intent to retain its investment in the entity for a period of time sufficient to allow for any anticipated recovery in market value. Realized gains and losses, which are determined based on the average-cost method, are reflected in the consolidated statements of income when realized.

Changes in fair value on equity securities with readily determinable fair values are recognized in net income. Equity securities without readily determinable fair values are measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

Finance receivables -

Finance receivables recorded on Toyota’s consolidated balance sheets are comprised of the unpaid principal balance, plus accrued interest, less charge-offs, net of any unearned income and deferred origination costs and the allowance for credit losses. Deferred origination costs are amortized so as to approximate a level rate of return over the term of the related contracts.

The determination of portfolio segments is based primarily on the qualitative consideration of the nature of Toyota’s business operations and finance receivables. The three portfolio segments within finance receivables are as follows:

Retail receivables portfolio segment -

The retail receivables portfolio segment consists of retail installment sales contracts acquired mainly from dealers (“auto loans”) including credit card loans. These contracts acquired must first meet specified credit standards. Thereafter, Toyota retains responsibility for contract collection and administration.

F-13

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The contract periods of auto loans primarily range from 2 to 7 years. Toyota acquires security interests in the vehicles financed and has the right to repossess vehicles if customers fail to meet their contractual obligations. Almost all auto loans are non-recourse, which relieves the dealers from financial responsibility in the event of repossession.

Toyota classifies retail receivables portfolio segment into one class based on common risk characteristics associated with the underlying finance receivables, the similarity of the credit risks, and the quantitative materiality.

Finance lease receivables portfolio segment -

Toyota acquires new vehicle lease contracts originated primarily through dealers. The contract periods of these primarily range from 2 to 5 years. Lease contracts acquired must first meet specified credit standards after which Toyota assumes ownership of the leased vehicle. Toyota is responsible for contract collection and administration during the lease period.

Toyota is generally permitted to take possession of the vehicle upon a default by the lessee. The residual value is estimated at the time the vehicle is first leased. Vehicles returned to Toyota at the end of their leases are sold by auction.

Toyota classifies finance lease receivables portfolio segment into one class based on common risk characteristics associated with the underlying finance receivables and the similarity of the credit risks

Wholesale and other dealer loan receivables portfolio segment -

Toyota provides wholesale financing to qualified dealers to finance inventories. Toyota acquires security interests in vehicles financed at wholesale. In cases where additional security interests would be required, Toyota takes dealership assets or personal assets, or both, as additional security. If a dealer defaults, Toyota has the right to liquidate any assets acquired and seek legal remedies.

Toyota also makes term loans to dealers for business acquisitions, facilities refurbishment, real estate purchases and working capital requirements. These loans are typically secured with liens on real estate, other dealership assets and/or personal assets of the dealers.

Toyota classifies wholesale and other dealer loan receivables portfolio segment into three classes of wholesale, real estate and working capital, based on the risk characteristics associated with the underlying finance receivables.

A receivable account balance is considered impaired when, based on current information and events, it is probable that Toyota will be unable to collect all amounts due according to the terms of the contract. Factors such as payment history, compliance with terms and conditions of the underlying loan agreement and other subjective factors related to the financial stability of the borrower are considered when determining whether a loan is impaired. Impaired finance receivables include certain nonaccrual receivables for which a specific reserve has been assessed. An account modified as a troubled debt restructuring is considered to be impaired. A troubled debt restructuring occurs when an account is modified through a concession to a borrower experiencing financial difficulty.

All classes of wholesale and other dealer loan receivables portfolio segment are placed on nonaccrual status when full payment of principal or interest is in doubt, or when principal or interest is 90 days or more

F-14

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

contractually past due, whichever occurs first. Collateral dependent loans are placed on nonaccrual status if collateral is insufficient to cover principal and interest. Interest accrued but not collected at the date a receivable is placed on nonaccrual status is reversed against interest income. In addition, the amortization of net deferred fees is suspended.

Interest income on nonaccrual receivables is recognized only to the extent it is received in cash. Accounts are restored to accrual status only when interest and principal payments are brought current and future payments are reasonably assured. Receivable balances are written-off against the allowance for credit losses when it is probable that a loss has been realized. Retail receivables class and finance lease receivables class are not placed generally on nonaccrual status when principal or interest is 90 days or more past due. However, these receivables are generally written-off against the allowance for credit losses when payments due are no longer expected to be received or the account is 120 days contractually past due, whichever occurs first.

As of March 31, 2019 and 2020, finance receivables on nonaccrual status are as follows:

	Yen in millions
	March 31,
	2019		2020
Retail		9,401		10,434
Finance leases		2,431		3,300
Wholesale		18,217		13,023
Real estate		18,281		10,703
Working capital		—		7,712
		48,330		45,172

As of March 31, 2019 and 2020, finance receivables 90 days or more past due and accruing are as follows:

	Yen in millions
	March 31,
	2019		2020
Retail		28,438		37,709
Finance leases		3,821		5,161
		32,259		42,870

Allowance for credit losses -

Allowance for credit losses is established to cover probable losses on finance receivables and vehicles and equipment on operating leases, resulting from the inability of customers to make required payments. Provision for credit losses is included in selling, general and administrative expenses.

The allowance for credit losses is based on a systematic, ongoing review and evaluation performed as part of the credit-risk evaluation process, historical loss experience, the size and composition of the portfolios, current economic events and conditions, the estimated fair value and adequacy of collateral and other pertinent factors. Vehicles and equipment on operating leases are not within the scope of accounting guidance governing the disclosure of portfolio segments.

F-15

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Retail receivables portfolio segment -

Toyota calculates allowance for credit losses to cover probable losses on retail receivables by applying reserve rates to such receivables. Reserve rates are calculated mainly by historical loss experience, current economic events and conditions and other pertinent factors.

Finance lease receivables portfolio segment -

Toyota calculates allowance for credit losses to cover probable losses on finance lease receivables by applying reserve rates to such receivables. Reserve rates are calculated mainly by historical loss experience, current economic events and conditions and other pertinent factors such as used car markets.

Wholesale and other dealer loan receivables portfolio segment -

Toyota calculates allowance for credit losses to cover probable losses on wholesale and other dealer loan receivables by applying reserve rates to such receivables. Reserve rates are calculated mainly by financial conditions of the dealers, terms of collateral setting, current economic events and conditions and other pertinent factors.

Toyota establishes specific reserves to cover the estimated losses on individually impaired receivables within the wholesale and other dealer loan receivables portfolio segment. Specific reserves on impaired receivables are determined by the present value of expected future cash flows or the fair value of collateral when it is probable that such receivables will be unable to be fully collected. The fair value of the underlying collateral is used if the receivable is collateral-dependent. The receivable is determined collateral-dependent if the repayment of the loan is expected to be provided by the underlying collateral. For the receivables in which the fair value of the underlying collateral was in excess of the outstanding balance, no allowance was provided.

Troubled debt restructurings in the retail receivables and finance lease receivables portfolio segments are specifically identified as impaired and aggregated with their respective portfolio segments when determining the allowance for credit losses. Impaired loans in the retail receivables and finance lease receivables portfolio segments are insignificant for individual evaluation and Toyota has determined that allowance for credit losses for each of the retail receivables and finance lease receivables portfolio segments would not be materially different if they had been individually evaluated for impairment.

Specific reserves on impaired receivables within the wholesale and other dealer loan receivables portfolio segment are recorded by an increase to the allowance for credit losses based on the related measurement of impairment. Related collateral, if recoverable, is repossessed and sold and the account balance is written-off.

Any shortfall between proceeds received and the carrying cost of repossessed collateral is charged to the allowance. Recoveries are reversed from the allowance for credit losses.

Allowance for residual value losses -

Toyota is exposed to risk of loss on the disposition of off-lease vehicles to the extent that sales proceeds are not sufficient to cover the carrying value of the leased asset at lease termination. Toyota maintains an allowance to cover probable estimated losses related to unguaranteed residual values on its owned portfolio. The allowance is evaluated considering projected vehicle return rates and projected loss severity. Factors considered in the determination of projected return rates and loss severity include historical and market information on used vehicle sales, trends in lease returns and new car markets, and general economic conditions. Management evaluates the foregoing factors, develops several potential loss scenarios, and reviews allowance levels to determine whether reserves are considered adequate to cover the probable range of losses.

F-16

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The allowance for residual value losses is maintained in amounts considered by Toyota to be appropriate in relation to the estimated losses on its owned portfolio. Upon disposal of the assets, the allowance for residual losses is adjusted for the difference between the net book value and the proceeds from sale.

Inventories -

Inventories are valued at cost, not in excess of net realizable value, cost being determined on the “average-cost” basis, except for the cost of finished products carried by certain subsidiary companies which is determined on the “specific identification” basis or “last-in, first-out” (“LIFO”) basis. Inventories valued on the LIFO basis totaled ¥470,208 million and ¥291,639 million at March 31, 2019 and 2020, respectively. Had the “first-in, first-out” basis been used for those companies using the LIFO basis, inventories would have been ¥25,302 million and ¥21,194 million higher than reported at March 31, 2019 and 2020, respectively.

Property, plant and equipment -

Property, plant and equipment are stated at cost. Major renewals and improvements are capitalized; minor replacements, maintenance and repairs are charged to current operations. Depreciation of property, plant and equipment is computed on the straight-line method at rates based on estimated useful lives of the respective assets according to general class, type of construction and use. The estimated useful lives range from 2 to 65 years for buildings and from 2 to 20 years for machinery and equipment.

Vehicles and equipment on operating leases to third parties are originated by dealers and acquired by certain consolidated subsidiaries. Such subsidiaries are also the lessors of certain property that they acquire directly. Vehicles and equipment on operating leases are depreciated primarily on a straight-line method over the lease term, generally from 2 to 5 years, to the estimated residual value. Incremental direct costs incurred in connection with the acquisition of operating lease contracts are capitalized and amortized on a straight-line method over the lease term. 

Leases -

At the inception of a contract Toyota assesses whether the contract is, or contains, a lease.

Lessee -

Toyota recognizes a right of use asset and a lease liability at the lease commencement date, for finance leases and operating leases. After the commencement date for finance leases, Toyota applies a cost model and subsequently depreciates the right of use asset using the straight-line method from the commencement date to the earlier of the end of the useful life of the right of use asset or the end of the lease term. Operating lease expenses are recognized on a straight-line basis over the lease term after the commencement date. Lease liabilities are measured at amortized cost using the effective interest method. Toyota uses its incremental borrowing rate as of the commencement date as a discount rate to measure lease liabilities. Many lease contracts relating to land and buildings entered by Toyota include extension options that can be exercisable by Toyota for various purposes such as to ensure the business flexibility. Toyota assesses whether it is reasonably certain to exercise an extension option, and if it assesses it to be reasonably certain, the extension option is included in the lease term.

Toyota recognizes lease payments associated with lease terms of 12 months or less as an expense on a straight-line basis over the lease term.

F-17

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Lessor -

With respect to lessor lease transactions, Toyota determines at the commencement of the lease whether each lease is a finance lease or operating lease. A lease is classified as a finance lease if it transfers substantially all of the risks and rewards incidental to the ownership of an underlying asset. Otherwise leases are classified as operating leases. Toyota recognizes the operating lease payments in profit or loss on a straight-line basis over the lease term.

Long-lived assets -

Toyota reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset group exceeds the estimated undiscounted cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess of the carrying value of the asset group over its fair value. Fair value is determined mainly using a discounted cash flow valuation method.

Goodwill and intangible assets -

Goodwill is not material to Toyota’s consolidated balance sheets.

Intangible assets consist mainly of software. Intangible assets with a definite life are amortized on a straight-line basis with estimated useful lives mainly of 5 years. Intangible assets with an indefinite life are tested for impairment whenever events or circumstances indicate that a carrying amount of an asset (asset group) may not be recoverable.

An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted cash flows used in determining the fair value of the asset. The amount of the impairment loss to be recorded is generally determined by the difference between the fair value of the asset using a discounted cash flow valuation method and the current book value.

Employee benefit obligations -

Toyota has both defined benefit and defined contribution plans for employees’ retirement benefits. Retirement benefit obligations are measured by actuarial calculations in accordance with U.S.GAAP. The funded status of the defined benefit postretirement plans is recognized on the consolidated balance sheets as prepaid pension and severance costs or accrued pension and severance costs, and the funded status change is recognized in the year in which it occurs through other comprehensive income.

Environmental matters -

Environmental expenditures relating to current operations are expensed or capitalized as appropriate. Expenditures relating to existing conditions caused by past operations, which do not contribute to current or future revenues, are expensed. Liabilities for remediation costs are recorded when they are probable and reasonably estimable, generally no later than the completion of feasibility studies or Toyota’s commitment to a plan of action. The cost of each environmental liability is estimated by using current technology available and various engineering, financial and legal specialists within Toyota based on current law. Such liabilities do not reflect any offset for possible recoveries from insurance companies and are not discounted. There were no material changes in these liabilities for all periods presented.

F-18

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Income taxes -

The provision for income taxes is computed based on the pretax income included in the consolidated statements of income. The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.

Derivative financial instruments -

Toyota employs derivative financial instruments, including forward foreign currency exchange contracts, foreign currency options, interest rate swaps, interest rate currency swap agreements and interest rate options to manage its exposure to fluctuations in interest rates and foreign currency exchange rates. All derivative financial instruments are recorded on the consolidated balance sheets at fair value, taking into consideration the effects of legally enforceable master netting agreements that allow us to net settle positive and negative positions and offset cash collateral held with the same counterparty on a net basis. Toyota does not use derivatives for speculation or trading purposes. Changes in the fair value of derivatives are recorded each period in current earnings or through other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and the type of hedge transaction.

Net income attributable to Toyota Motor Corporation per common share -

Basic net income attributable to Toyota Motor Corporation per common share is calculated by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding during the reported period. The calculation of diluted net income attributable to Toyota Motor Corporation per common share is done by adjusting net income attributable to common shareholders and the weighted-average number of common shares outstanding, which includes the additional dilution from the assumed conversion of model AA class shares and the assumed exercise of dilutive stock options.

Stock-based compensation -

Toyota measures compensation expense for its stock-based compensation plan based on the grant-date fair value of the award, and accounts for the award.

Other comprehensive income -

Other comprehensive income refers to revenues, expenses, gains and losses that, under U.S.GAAP are included in comprehensive income, but are excluded from net income as these amounts are recorded directly as an adjustment to shareholders’ equity. Toyota’s other comprehensive income is primarily comprised of unrealized gains/losses on marketable securities designated as available-for-sale, foreign currency translation adjustments and adjustments attributed to pension liabilities associated with Toyota’s defined benefit pension plans.

Accounting changes -

Adoption of new accounting standard -

In February 2016, the Financial Accounting Standards Board (“FASB”) issued updated guidance for leases. This guidance requires lessees to recognize substantially all leases on their balance sheet as a right of use asset and a lease liability. Toyota adopted this guidance on April 1, 2019 using the modified retrospective method of

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TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

adoption and elected the transition method that allows for application of the standard at the adoption date. Additionally, Toyota elected the package of practical expedients of not reassessing lease classifications and others for lease contracts that expired or exist as of the adoption date. As a result of adoption, Toyota recognized an additional balance of ¥277,118 million as right of use assets as of March 31, 2020, which is included in “Other” of “Investments and other assets” of Toyota’s consolidated balance sheet. Lease liabilities are included in “Other current liabilities” and “Other long-term liabilities,” and were ¥37,385 million and ¥239,623 million, respectively. See note 23 to the consolidated financial statements for the disclosure by adoption of this guidance.

In August 2017, the FASB issued updated guidance for hedge accounting. This guidance simplifies and expands the application of hedge accounting. Toyota adopted this guidance on April 1, 2019. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

Change in depreciation method -

Toyota used the declining-balance method mainly for the parent company and Japanese subsidiaries, and the straight-line method for foreign subsidiary companies, regarding the depreciation method of property, plant and equipment. In recent years, Toyota has been strengthening competitiveness globally through the investments in areas such as the remodeling of cars by introducing a new platform and powertrain units, the improvement of technological capabilities and productivity, as well as the promotion of equipment versatility. In response to such recent changes, effective as of April 1, 2019, Toyota changed the depreciation method of the parent company and Japanese subsidiaries to the straight-line method because Toyota believes it better reflects the future economic benefit from the stable usage of property, plant and equipment. The impact of the change in depreciation method is recognized prospectively as a change in accounting estimate in accordance with the FASB Accounting Standards Codification (ASC) 250 “Accounting Changes and Error Corrections”.

As a result of the change in depreciation method, depreciation expense for the fiscal year ended March 31, 2020 decreased by ¥173,201 million. Net income attributable to Toyota Motor Corporation and basic net income attributable to Toyota Motor Corporation per common share for the fiscal year ended March 31, 2020 increased by ¥117,001 million and ¥41.80, respectively.

Recent pronouncements to be adopted in future periods -

Toyota intends to replace the currently applied U.S.GAAP and voluntarily adopt IFRS for its consolidated financial statements in order to improve the international comparability of its financial information in the capital markets, among other reasons. The period for disclosure based on IFRS will begin with the first quarter of the fiscal year ending March 31, 2021. As a result, recent pronouncements to be adopted in future periods under U.S.GAAP have been excluded from this disclosure.

Reclassifications -

Certain prior year amounts have been reclassified to conform to the presentations as of and for the year ended March 31, 2020.

3. Supplemental cash flow information:

Cash payments for income taxes were ¥500,214 million, ¥836,619 million and ¥752,205  million for the years ended March 31, 2018, 2019 and 2020, respectively. Interest payments during the years ended March 31, 2018, 2019 and 2020 were ¥422,720 million, ¥507,812 million and ¥529,555 million, respectively.

Finance lease obligations of ¥4,467 million and ¥6,086 million were incurred for the years ended March 31, 2018 and 2019, respectively. See note 23 to the consolidated financial statements for finance lease obligations for the year ended March 31, 2020.

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TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. Acquisitions and dispositions:

The parent company and Panasonic established a new joint venture, Prime Life Technologies, related to a town development business. Prime Life Technologies became Toyota’s affiliated company, and THC as well as Misawa Homes became subsidiaries of Prime Life Technologies, causing THC and Misawa Homes to no longer be the parent company’s consolidated subsidiary companies.

Specifically, at the meeting of the Board of Directors held on May 9, 2019, the parent company resolved to conclude contracts aimed toward the establishment of Prime Life Technologies with Panasonic. On January 7, 2020, THC and Misawa Homes, each a subsidiary of Toyota, completed a share exchange in which THC became the wholly owning parent company and Misawa Homes became the wholly owned subsidiary company, pursuant to a share exchange agreement that was approved at the general meeting of shareholders of Misawa Homes on November 26, 2019. Also effective January 7, 2020, and pursuant to the share transfer plan that was approved at the general meeting of shareholders of THC on December 19, 2019, Toyota transferred all of the shares of THC common stock to Prime Life Technologies, causing it to become the wholly owning parent company of THC. THC then distributed all issued shares of Misawa Homes to Prime Life Technologies as a dividend of surplus, as approved at the general meeting of shareholders of THC on January 7, 2020, with Prime Life Technologies thereby becoming the wholly owning parent company of THC and Misawa Homes.

Gains or losses realized from these transactions are not material.

In addition to the above, Toyota made several acquisitions and dispositions during the years ended March 31, 2018, 2019 and 2020, however the assets and liabilities acquired or transferred were not material.

5. Marketable securities and other securities investments:

Marketable securities and other securities investments include public and corporate bonds and common stocks for which the aggregate cost, gross unrealized gains and losses and fair value are as follows:

	Yen in millions
	March 31, 2019
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Available-for-sale
Public and corporate bonds		5,837,423		82,022		73,256		5,846,189
Other		289,285		5,406		845		293,846
Total		6,126,708		87,428		74,101		6,140,035
Securities not practicable to determine fair value
Public and corporate bonds		32,922

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TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Yen in millions
	March 31, 2020
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Available-for-sale
Public and corporate bonds		5,237,131		196,260		22,092		5,411,299
Other		313,014		9,651		3,416		319,249
Total		5,550,145		205,911		25,508		5,730,548
Securities not practicable to determine fair value
Public and corporate bonds		36,551

Public and corporate bonds include government bonds, and “Other” includes investment trusts.

Unrealized losses continuing over a 12 month period or more in the aggregate were not material as of March 31, 2019 and 2020.

As of March 31, 2019 and 2020, maturities of public and corporate bonds included in available-for-sale are mainly from 1 to 10 years.

Proceeds from sales of available-for-sale securities was ¥248,046 million for the year ended March 31, 2018. On those sales, gross realized gains was ¥7,684 million and gross realized losses was ¥278 million.

During the year ended March 31, 2018, Toyota recognized impairment losses on available-for-sale securities of ¥846 million, which was included in “Other income (loss), net” and other in the accompanying consolidated statements of income.

As of March 31, 2019 and 2020, the carrying amount of equity securities with readily determinable fair values were ¥2,154,951 million and ¥1,895,690 million, respectively.

Gain and losses related to equity securities are as follows:​​​​​​​

	Yen in millions
	For the years ended March 31,
	2019			2020
Net gains (losses) recognized on equity securities		(334,636	)		(3,837	)
Less: Net gains (losses) recognized on equity securities sold		4,836			16,245
Unrealized gains (losses) on equity securities		(339,472	)		(20,082	)

Toyota did not recognize any material impairment or other adjustments on equity securities without readily determinable fair values for the years ended March 31, 2019 and 2020. As of March 31, 2019 and 2020, the carrying amount of equity securities without readily determinable fair values were ¥279,178 and ¥364,593 million, respectively.

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TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

6. Finance receivables:

Finance receivables consist of the following:

	Yen in millions
	March 31,
	2019			2020
Retail		12,768,305			12,795,076
Finance leases		1,636,536			1,691,371
Wholesale and other dealer loans		3,489,757			3,479,613
		17,894,598			17,966,060
Deferred origination costs		204,304			221,200
Unearned income		(986,928	)		(919,053	)
Allowance for credit losses
Retail		(117,594	)		(151,490	)
Finance leases		(26,483	)		(30,899	)
Wholesale and other dealer loans		(39,008	)		(47,789	)
Total allowance for credit losses		(183,085	)		(230,178	)
Total finance receivables, net		16,928,889			17,038,029
Less - Current portion		(6,647,771	)		(6,614,171	)
Noncurrent finance receivables, net		10,281,118			10,423,858

Finance receivables were geographically distributed as follows: in North America 55.2%, in Asia 13.0%, in Europe 12.3%, in Japan 8.2% and in Other 11.3% as of March 31, 2019, and in North America 55.8%, in Asia 13.0%, in Europe 12.6%, in Japan 8.8% and in Other 9.8% as of March 31, 2020.

The contractual maturities of retail receivables, the future minimum lease payments on finance leases and the contractual maturities of wholesale and other dealer loans at March 31, 2020 are summarized as follows:

	Yen in millions
Years ending March 31,	Retail		Finance leases		Wholesale and other dealer loans
2021		4,027,784		446,901		2,476,011
2022		3,034,099		335,850		308,745
2023		2,476,975		247,378		197,597
2024		1,749,643		134,481		157,317
2025		964,212		48,912		107,152
Thereafter		542,363		8,801		232,791
		12,795,076		1,222,323		3,479,613

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TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Finance leases consist of the following:

	Yen in millions
	March 31,
	2019			2020
Minimum lease payments		1,158,242			1,222,323
Estimated unguaranteed residual values		478,294			469,048
		1,636,536			1,691,371
Deferred origination costs		11,929			12,349
Less - Unearned income		(143,838	)		(146,087	)
Less - Allowance for credit losses		(26,483	)		(30,898	)
Finance leases, net		1,478,144			1,526,735

Toyota is exposed to credit risk on Toyota’s finance receivables. Credit risk is the risk of loss arising from the failure of customers or dealers to meet the terms of their contracts with Toyota or otherwise fail to perform as agreed. Toyota estimates allowance for credit losses by variety of credit-risk evaluation process to cover probable and estimable losses above.

The table below shows the amount of the finance receivables segregated into aging categories based on the number of days outstanding as of March 31, 2019 and 2020:

	Yen in millions
	March 31, 2019
	Retail		Finance leases		Wholesale		Real estate		Working capital
Current		12,554,265		1,625,893		1,806,305		873,427		808,755
30-59 days past due		141,111		4,972		191		—		—
60-89 days past due		35,090		1,396		100		—		—
90 days or greater past due		37,839		4,275		393		106		480
Total		12,768,305		1,636,536		1,806,989		873,533		809,235

	Yen in millions
	March 31, 2020
	Retail		Finance leases		Wholesale		Real estate		Working capital
Current		12,525,020		1,675,523		1,642,637		857,407		967,105
30-59 days past due		176,991		7,670		2,008		47		—
60-89 days past due		44,922		2,426		1,132		43		—
90 days or greater past due		48,143		5,752		9,011		196		27
Total		12,795,076		1,691,371		1,654,788		857,693		967,132

The tables below show the recorded investment for credit quality of the finance receivable within the wholesale and other dealer loan receivables portfolio segment as of March 31, 2019 and 2020:

The wholesale and other dealer loan receivables portfolio segment is primarily segregated into credit qualities below based on internal risk assessments by dealers.

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TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Performing: Account not classified as either Credit Watch, At Risk or Default

Credit Watch: Account designated for elevated attention

At Risk: Account where there is an increased likelihood that default may exist based on qualitative and quantitative factors

Default: Account is not currently meeting contractual obligations or we have temporarily waived certain contractual requirements

	Yen in millions
	March 31, 2019
	Wholesale		Real estate		Working capital		Total
Performing		1,566,475		743,379		789,948		3,099,802
Credit Watch		156,740		81,848		8,610		247,198
At Risk		58,550		45,564		10,189		114,303
Default		25,224		2,742		488		28,454
Total		1,806,989		873,533		809,235		3,489,757

	Yen in millions
	March 31, 2020
	Wholesale		Real estate		Working capital		Total
Performing		1,441,320		729,474		931,420		3,102,214
Credit Watch		133,892		82,322		22,293		238,507
At Risk		54,251		37,379		13,332		104,962
Default		25,325		8,518		87		33,930
Total		1,654,788		857,693		967,132		3,479,613

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TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The tables below summarize information about impaired finance receivables:

	Yen in millions
	Recorded investment				Unpaid principal balance				Individually evaluated allowance
	March 31,				March 31,				March 31,
	2019		2020		2019		2020		2019		2020
Impaired account balances individually evaluated for impairment with an allowance:
Wholesale		18,187		11,687		18,187		11,687		3,141		2,005
Real estate		10,545		7,948		10,545		7,948		1,280		1,003
Working capital		7,451		10,040		7,451		10,040		6,670		4,163
Total		36,183		29,675		36,183		29,675		11,091		7,171
Impaired account balances individually evaluated for impairment without an allowance:
Wholesale		14,429		10,121		14,429		10,121
Real estate		16,870		16,157		16,870		16,157
Working capital		2,220		2,068		2,220		2,068
Total		33,519		28,346		33,519		28,346
Impaired account balances aggregated and evaluated for impairment:
Retail		29,537		30,753		28,788		30,109
Finance leases		99		103		75		42
Total		29,636		30,856		28,863		30,151
Total impaired account balances:
Retail		29,537		30,753		28,788		30,109
Finance leases		99		103		75		42
Wholesale		32,616		21,808		32,616		21,808
Real estate		27,415		24,105		27,415		24,105
Working capital		9,671		12,108		9,671		12,108
Total		99,338		88,877		98,565		88,172

The amount of finance receivables modified as a troubled debt restructuring for the year ended March 31, 2020 was not significant for all classes of finance receivables. Finance receivables modified as troubled debt restructurings for the year ended March 31, 2020 and for which there was a payment default were not significant for all classes of such receivables.

7. Other receivables:

Other receivables relate to arrangements with certain component manufacturers whereby Toyota procures inventory for these component manufactures and is reimbursed for the related purchases.

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TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

8. Inventories:

Inventories consist of the following:

	Yen in millions
	March 31,
	2019		2020
Finished goods		1,746,159		1,517,173
Raw materials		475,504		485,069
Work in process		324,921		315,139
Supplies and other		109,812		117,537
Total		2,656,396		2,434,918

9. Vehicles and equipment on operating leases:

Vehicles and equipment on operating leases consist of the following:

	Yen in millions
	March 31,
	2019			2020
Vehicles		6,383,788			6,153,695
Equipment		14,499			17,148
Less - Deferred income and other		(259,124	)		(241,610	)
		6,139,163			5,929,233
Less - Accumulated depreciation		(1,428,779	)		(1,374,172	)
Less - Allowance for credit losses		(13,314	)		(12,171	)
Vehicles and equipment on operating leases, net		4,697,070			4,542,890

Rental income from vehicles and equipment on operating leases was ¥927,443 million, ¥959,497 million and ¥945,091 million for the years ended March 31, 2018, 2019 and 2020, respectively. Future minimum rentals from vehicles and equipment on operating leases are due in installments as follows:

Years ending March 31,	Yen in millions
2021		802,119
2022		531,098
2023		241,462
2024		59,415
2025		13,455
Thereafter		6,195
Total minimum future rentals		1,653,744

The future minimum rentals as shown above should not be considered indicative of future cash collections.

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TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

10. Allowance for doubtful accounts and credit losses:

The net changes in the allowance for doubtful accounts relating to trade accounts and notes receivable for the years ended March 31, 2018, 2019 and 2020 are as follows:

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Allowance for doubtful accounts at beginning of year		100,712			98,590			90,373
Provision for doubtful accounts, net of reversal		(74	)		(1,375	)		5,689
Write-offs		(2,374	)		(2,472	)		(2,691	)
Other		326			(4,370	)		(3,019	)
Allowance for doubtful accounts at end of year		98,590			90,373			90,352

“Other” includes the impact of currency translation adjustments for the years ended March 31, 2018, 2019 and 2020.

A portion of the allowance for doubtful accounts balance at March 31, 2019 and 2020 totaling ¥74,003 million and ¥66,408 million, respectively, is attributed to certain non-current receivable balances which are reported as “Other” assets in the consolidated balance sheets.

The net changes in the allowance for credit losses relating to finance receivables and vehicles and equipment on operating leases for the years ended March 31, 2018, 2019 and 2020 are as follows:

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Allowance for credit losses at beginning of year		178,101			184,087			196,399
Provision for credit losses, net of reversal		76,143			81,440			137,293
Charge-offs		(96,444	)		(91,698	)		(98,352	)
Recoveries		25,344			26,178			25,578
Other		943			(3,608	)		(18,569	)
Allowance for credit losses at end of year		184,087			196,399			242,349

“Other” primarily includes the impact of currency translation adjustments for the years ended March 31, 2018, 2019 and 2020.

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TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The net changes in the allowance for credit losses above relating to retail receivables portfolio segment, finance lease receivables portfolio segment and wholesale and other dealer loan receivables portfolio segment for the years ended March 31, 2018, 2019 and 2020 are as follows:

	Yen in millions
	For the year ended March 31, 2018
	Retail			Finance leases			Wholesale and other dealer loans
Allowance for credit losses at beginning of year		104,354			23,962			30,896
Provision for credit losses, net of reversal		52,891			7,115			6,497
Charge-offs		(74,868	)		(2,708	)		(823	)
Recoveries		20,511			315			59
Other		569			133			171
Allowance for credit losses at end of year		103,457			28,817			36,800

	Yen in millions
	For the year ended March 31, 2019
	Retail			Finance leases			Wholesale and other dealer loans
Allowance for credit losses at beginning of year		103,457			28,817			36,800
Provision for credit losses, net of reversal		68,470			710			3,990
Charge-offs		(72,657	)		(2,903	)		(1,111	)
Recoveries		20,485			345			45
Other		(2,161	)		(486	)		(716	)
Allowance for credit losses at end of year		117,594			26,483			39,008

	Yen in millions
	For the year ended March 31, 2020
	Retail			Finance leases			Wholesale and other dealer loans
Allowance for credit losses at beginning of year		117,594			26,483			39,008
Provision for credit losses, net of reversal		107,784			9,716			12,544
Charge-offs		(82,613	)		(3,267	)		(105	)
Recoveries		20,277			353			33
Other		(11,552	)		(2,386	)		(3,691	)
Allowance for credit losses at end of year		151,490			30,899			47,789

F-29

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

11. Affiliated companies and variable interest entities:

Investments in and transactions with affiliated companies -

Summarized financial information for affiliated companies accounted for by the equity method is shown below:

	Yen in millions
	March 31,
	2019		2020
Current assets		13,555,478		16,551,569
Noncurrent assets		12,464,250		14,869,913
Total assets		26,019,728		31,421,482
Current liabilities		8,322,336		9,819,357
Long-term liabilities and noncontrolling interests		6,398,659		9,421,112
Affiliated companies accounted for by the equity method shareholders’ equity		11,298,733		12,181,013
Total liabilities and shareholders’ equity		26,019,728		31,421,482
Toyota’s share of affiliated companies accounted for by the equity method shareholders’ equity		3,313,703		4,090,790
Number of affiliated companies accounted for by the equity method at end of period		63		72

	Yen in millions
	For the years ended March 31,
	2018		2019		2020
Net revenues		30,680,535		32,200,711		35,340,807
Gross profit		4,065,344		4,070,621		4,315,967
Net income attributable to affiliated companies accounted for by the equity method		1,344,687		857,832		841,938
Equity in earnings of affiliated companies attributable to Toyota Motor Corporation		470,083		360,066		271,152

Entities comprising a significant portion of Toyota’s investment in affiliated companies and percentage of ownership are presented below:

	Percentage of ownership
	March 31,
Name of affiliated companies	2019			2020
Denso Corporation		24.5	%		24.5	%
Subaru Corporation		—			20.0	%
Toyota Industries Corporation		24.9	%		24.9	%
Aisin Seiki Co., Ltd.		24.9	%		24.9	%
Toyota Tsusho Corporation		22.0	%		22.0	%

Certain affiliated companies accounted for by the equity method with carrying amounts of ¥2,430,251 million and ¥2,895,656 million at March 31, 2019 and 2020, respectively, were quoted on various established markets at an aggregate value of ¥2,513,886 million and ¥2,247,107 million, respectively. Toyota 

F-30

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

evaluated its investments in affiliated companies, considering the length of time and the extent to which the quoted market prices have been less than the carrying amounts, the financial condition and near-term prospects of the affiliated companies and Toyota’s ability and intent to retain those investments in the companies for a period of time. Toyota did not recognize any impairment loss for the years ended March 31, 2018, 2019 and 2020.

Account balances and transactions with affiliated companies are presented below:

	Yen in millions
	March 31,
	2019		2020
Trade accounts and notes receivable, and other receivables		362,831		357,849
Accounts payable and other payables		845,755		780,935

	Yen in millions
	For the years ended March 31,
	2018		2019		2020
Net revenues		2,004,632		2,213,236		2,423,338
Purchases		5,749,430		6,431,464		6,781,279

Dividends from affiliated companies accounted for by the equity method for the years ended March 31, 2018, 2019 and 2020 were ¥196,403 million, ¥204,322 million and ¥208,950 million, respectively.

Toyota does not have any significant related party transactions other than transactions with affiliated companies in the ordinary course of business.

Variable Interest Entities -

Toyota enters into securitization transactions using special-purpose entities, that are considered variable interest entities (“VIEs”). Although the finance receivables and vehicles on operating leases related to securitization transactions have been legally sold to the VIEs, Toyota has both the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance and the obligation to absorb losses of the VIEs or the right to receive benefits from the VIEs that could potentially be significant to the VIEs. As a result, Toyota is considered the primary beneficiary of the VIEs and therefore consolidates the VIEs.

Related to securitization transactions, ¥1,872,564 million and ¥1,906,256 million retail finance receivables, ¥609,694 million and ¥621,633 million vehicles on operating leases, ¥131,804 million and ¥140,750 million restricted cash and ¥1,893,073 million and ¥1,979,563 million secured debt were included in Toyota’s consolidated financial statements as of March 31, 2019 and 2020, respectively. The creditors of the VIEs do not have recourse to Toyota’s general credit with the exception of debts guaranteed by Toyota. Risks to which Toyota is exposed including credit, interest rate, and/or prepayment risks are not incremental compared with the situation before Toyota enters into securitization transactions.

F-31

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Toyota has variable interests in investment trusts that are VIEs and debt securities issued by a VIE. With respect to some of the investment trusts, Toyota has both the obligation to absorb losses of or the right to receive benefits from the VIEs that could potentially be significant to the VIEs and the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance through the asset manager. As a result, Toyota is considered the primary beneficiary of the VIEs and therefore consolidates the VIEs. Related to such investment trusts, ¥2,790,679 million and ¥2,767,681 million marketable securities and other securities investments were included in Toyota’s consolidated financial statements as of March 31, 2019 and 2020.

As for other VIEs, Toyota determined that it was not the primary beneficiary due to lack of the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance and, therefore, does not consolidate the VIEs. The investments are held at fair value and are included in “Marketable securities and other securities investments” in the accompanying consolidated balance sheets. The maximum exposure to loss is limited to the carrying value of its investment. The carrying value of the trusts totaled ¥22,001 million and ¥16,622 million as of March 31, 2019 and 2020, respectively. The carrying value of the debt securities totaled ¥351,945 million and ¥748,131 million as of March 31, 2019 and 2020, respectively. Toyota does not provide support that is not contractually required to the investments.

As for VIEs other than those specified above, neither the aggregate size nor Toyota’s involvements are material to Toyota’s consolidated financial statements.

12. Short-term borrowings and long-term debt:

Short-term borrowings at March 31, 2019 and 2020 consist of the following:

	Yen in millions
	March 31,
	2019		2020
Loans, principally from banks, with a weighted-average interest at March 31, 2019 and March 31, 2020 of 2.11% and of 2.03% per annum, respectively		1,468,430		1,179,230
Commercial paper with a weighted-average interest at March 31, 2019 and March 31, 2020 of 2.28% and of 1.50% per annum, respectively		3,876,544		4,106,796
		5,344,973		5,286,026

As of March 31, 2020, Toyota has unused short-term lines of credit amounting to ¥1,861,792 million of which ¥374,273 million related to commercial paper programs. Under these programs, Toyota is authorized to obtain short-term financing at prevailing interest rates for periods not in excess of 360 days.

F-32

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Long-term debt at March 31, 2019 and 2020 comprises the following:

	Yen in millions
	March 31,
	2019			2020
Unsecured loans, representing obligations principally to banks, due 2019 to 2041 in 2019 and due 2020 to 2041 in 2020 with a weighted-average interest at March 31, 2019 and March 31, 2020 of 2.78% and of 2.37% per annum, respectively		3,441,336			3,713,541
Secured loans, representing obligations principally to finance receivables securitization due 2019 to 2026 in 2019 and due 2020 to 2034 in 2020 with a weighted-average interest at March 31, 2019 and March 31, 2020 of 2.47% and of 1.98% per annum, respectively		1,840,204			1,983,976
Medium-term notes of consolidated subsidiaries, due 2019 to 2048 in 2019 and due 2020 to 2048 in 2020 with a weighted-average interest at March 31, 2019 and March 31, 2020 of 2.46% and of 2.05% per annum, respectively		7,372,550			7,442,590
Unsecured notes of parent company, due 2019 to 2037 in 2019 and due 2020 to 2037 in 2020 with a weighted-average interest at March 31, 2019 and March 31, 2020 of 1.84% and of 1.85% per annum, respectively		511,980			650,905
Unsecured notes of consolidated subsidiaries, due 2019 to 2031 in 2019 and due 2020 to 2031 in 2020 with a weighted-average interest at March 31, 2019 and March 31, 2020 of 2.12% and of 1.70% per annum, respectively		1,566,994			1,412,368
Secured notes of consolidated subsidiaries, due 2019 to 2022 in 2019 and due 2020 to 2023 in 2020 with a weighted-average interest at March 31, 2019 and March 31, 2020 of 7.78% and of 7.52% per annum, respectively		53,120			34,626
Long-term finance lease obligations, due 2019 to 2035 in 2019 and due 2020 to 2049 in 2020 with interest ranging from 0.12% to 14.73% per annum in 2019 and from 0.01% to 14.73% per annum in 2020		19,021			28,937
		14,805,205			15,266,943
Less - Current portion due within one year		(4,254,260	)		(4,574,045	)
		10,550,945			10,692,898

As of March 31, 2020, approximately 48%, 13%, 11%, 7%, 5% and 16% of long-term debt are denominated in U.S. dollars, euros, Japanese yen, Australian dollars, Thai baht and other currencies, respectively.

As of March 31, 2020, property, plant and equipment with a book value of ¥644,368 million and other assets aggregating ¥2,010,548 million were pledged as collateral mainly for certain debt obligations of subsidiaries. These other assets principally consist of securitized finance receivables.

The aggregate amounts of annual maturities of long-term debt during the next five years are as follows:

Years ending March 31,	Yen in millions
2021		4,574,045
2022		3,692,634
2023		3,014,979
2024		1,575,717
2025		1,210,354

F-33

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Standard agreements with certain banks include provisions that collateral (including sums on deposit with such banks) or guarantees will be furnished upon the banks’ request and that any collateral furnished, pursuant to such agreements or otherwise, will be applicable to all present or future indebtedness to such banks. During the year ended March 31, 2020, Toyota has not received any significant requests from these banks.

As of March 31, 2020, Toyota has unused long-term lines of credit amounting to ¥5,345,718 million.

Interest expense during the years ended March 31, 2018, 2019 and 2020 were ¥415,094 million, ¥499,871 million and ¥512,677 million, respectively. Interest expense related to the financial services business is included in “Cost of financing operations” in the accompanying consolidated statements of income.

13. Product warranties and recalls and other safety measures:

Toyota provides product warranties for certain defects mainly resulting from manufacturing based on warranty contracts with its customers at the time of sale of products. Toyota accrues estimated warranty costs to be incurred in the future in accordance with the warranty contracts. In addition to product warranties, Toyota initiates recalls and other safety measures to repair or to replace parts which might be expected to fail from products safety perspectives or customer satisfaction standpoints. Toyota accrues for costs of recalls and other safety measures based on the amount estimated from historical experience.

Liabilities for product warranties and liabilities for recalls and other safety measures have been combined into a single table showing an aggregate liability for quality assurances due to the fact that both are liabilities for costs to repair or replace defects of vehicles and the amounts incurred for recalls and other safety measures may affect the amounts incurred for product warranties and vice versa.

Liabilities for quality assurances are included in “Accrued expenses” in the consolidated balance sheets.

The net changes in liabilities for quality assurances above for the years ended March 31, 2018, 2019 and 2020 consist of the following:

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Liabilities for quality assurances at beginning of year		1,696,938			1,702,312			1,769,275
Payments made during year		(586,943	)		(489,461	)		(490,117	)
Provision for quality assurances		649,377			565,012			314,494
Changes relating to pre-existing quality assurances		(56,769	)		(1,411	)		(34,345	)
Other		(291	)		(7,177	)		(6,194	)
Liabilities for quality assurances at end of year		1,702,312			1,769,275			1,553,113

“Other” primarily includes the impact of currency translation adjustments and the impact of consolidation and deconsolidation of certain entities due to changes in ownership interest.

F-34

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The table below shows the net changes in liabilities for recalls and other safety measures which are comprised in liabilities for quality assurances above for the years ended March 31, 2018, 2019 and 2020.

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Liabilities for recalls and other safety measures at beginning of year		1,275,200			1,275,256			1,302,309
Payments made during year		(456,177	)		(396,971	)		(363,708	)
Provision for recalls and other safety measures		454,391			428,613			169,134
Other		1,842			(4,589	)		(3,024	)
Liabilities for recalls and other safety measures at end of year		1,275,256			1,302,309			1,104,711

14. Other payables:

Other payables are mainly related to purchases of property, plant and equipment and non-manufacturing purchases.

15. Income taxes:

The components of income before income taxes comprise the following:

	Yen in millions
	For the years ended March 31,
	2018		2019		2020
Income before income taxes:
Parent company and domestic subsidiaries		1,880,971		1,552,975		1,704,397
Foreign subsidiaries		739,458		732,490		850,210
		2,620,429		2,285,465		2,554,607

The provision for income taxes consists of the following:

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Current income tax expense:
Parent company and domestic subsidiaries		565,998			599,521			483,087
Foreign subsidiaries		176,369			147,017			8,196
Total current		742,367			746,538			491,283
Deferred income tax expense (benefit):
Parent company and domestic subsidiaries		45,097			(110,608	)		45,739
Foreign subsidiaries		(283,058	)		24,014			146,408
Total deferred		(237,961	)		(86,594	)		192,147
Total provision		504,406			659,944			683,430

F-35

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Net deferred liabilities as of March 31, 2018 decreased by ¥218,323 million and provision for income taxes for the year ended March 31, 2018 decreased by ¥249,694 million, respectively, resulting from the Tax Cuts and Jobs Act of 2017 of the United States.

Toyota is subject to a number of different income taxes which, in the aggregate, indicate a statutory rate in Japan of approximately 31.1%, 30.9% and 30.9% for the years ended March 31, 2018, 2019 and 2020, respectively. The statutory tax rates in effect for the year in which the temporary differences are expected to reverse are used to calculate the tax effects of temporary differences which are expected to reverse in the future years. Reconciliation of the differences between the statutory tax rate and the effective income tax rate is as follows:

	For the years ended March 31,
	2018			2019			2020
Statutory tax rate		31.1	%		30.9	%		30.9	%
Increase (reduction) in taxes resulting from:
Non-deductible expenses		0.4			0.4			0.4
Deferred tax liabilities on undistributed earnings of foreign subsidiaries		1.1			1.2			1.0
Deferred tax liabilities on undistributed earnings of affiliated companies accounted for by the equity method		3.8			3.1			1.7
Valuation allowance		(2.0	)		0.2			0.5
Tax credits		(4.3	)		(5.3	)		(4.9	)
The difference between the statutory tax rate in Japan and that of foreign subsidiaries		(1.5	)		(2.3	)		(2.7	)
Unrecognized tax benefits adjustments		0.2			(0.1	)		(0.4	)
Revision to reduce deferred tax assets and liabilities at the fiscal year-end due to changes in tax rates		—			—			—
Effect of the Tax Cuts and Jobs Act of 2017 of the United States		(9.5	)		—			—
Other		(0.1	)		0.8			0.3
Effective income tax rate		19.2	%		28.9	%		26.8	%

F-36

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Significant components of deferred tax assets and liabilities are as follows:

	Yen in millions
	March 31,
	2019			2020
Deferred tax assets
Accrued pension and severance costs		256,478			277,528
Accrued expenses and liabilities for quality assurances		664,950			601,108
Other accrued employees’ compensation		121,024			118,961
Operating loss carryforwards for tax purposes		364,220			55,918
Allowance for doubtful accounts and credit losses		69,049			73,620
Property, plant and equipment and other assets		266,866			282,136
Other		338,744			268,040
Gross deferred tax assets		2,081,331			1,677,311
Less - Valuation allowance		(93,599	)		(110,642	)
Total deferred tax assets		1,987,732			1,566,669
Deferred tax liabilities
Unrealized gains on securities, net		(493,052	)		(421,846	)
Undistributed earnings of foreign subsidiaries		(25,972	)		(24,808	)
Undistributed earnings of affiliated companies accounted for by the equity method		(836,860	)		(952,660	)
Basis difference of acquired assets		(29,116	)		(29,756	)
Lease transactions		(946,128	)		(739,911	)
Other		(169,583	)		(86,072	)
Gross deferred tax liabilities		(2,500,711	)		(2,255,053	)
Net deferred tax liability		(512,979	)		(688,384	)

The deferred tax assets and liabilities above that comprise the net deferred tax liability are included in the consolidated balance sheets as follows:

	Yen in millions
	March 31,
	2019			2020
Deferred tax assets
Investments and other assets - Other		501,872			354,785
Deferred tax liabilities
Deferred income taxes (Long-term liabilities)		(1,014,851	)		(1,043,169	)
Net deferred tax liability		(512,979	)		(688,384	)

The factors used to assess the likelihood of realization of the deferred tax assets are the future reversal of existing taxable temporary differences, the future taxable income and available tax planning strategies that are prudent and feasible. All available evidence, both positive and negative, is considered to determine whether, based on the weight of that evidence, a valuation allowance is needed for deferred tax assets which are not more-likely-than-not to be realized.

F-37

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The accounting for deferred tax assets represents Toyota’s current best estimate based on all available evidence. Unanticipated events or changes could result in re-evaluating the realizability of deferred tax assets.

Operating loss carryforwards for tax purposes as of March 31, 2020 in Japan and foreign countries were ¥18,776 million and ¥402,628 million, respectively, and are available as an offset against future taxable income. The majority of these carryforwards in Japan and foreign countries expire in years 2021 to 2030 and expire in years 2021 to 2040, respectively. Tax credit carryforwards as of March 31, 2020 in Japan and foreign countries were ¥4,579 million and ¥67,098 million, respectively, and the majority of these carryforwards in Japan and foreign countries expire in years 2021 to 2023 and expire in years 2021 to 2040, respectively.

The valuation allowance mainly relates to deferred tax assets of operating loss and foreign tax credit carryforwards for tax purposes that are not more-likely-than-not to be realized. The net changes in the total valuation allowance for deferred tax assets for the years ended March 31, 2018, 2019 and 2020 consist of the following:

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Valuation allowance at beginning of year		146,623			93,814			93,599
Additions		16,106			13,967			27,629
Deductions		(74,435	)		(9,801	)		(6,089	)
Other		5,520			(4,381	)		(4,497	)
Valuation allowance at end of year		93,814			93,599			110,642

“Other” includes the impact of consolidation and deconsolidation of certain entities due to changes in ownership interest and currency translation adjustments during the years ended March 31, 2018, 2019 and 2020.

Because management intends to reinvest undistributed earnings of foreign subsidiaries to the extent not expected to be remitted in the foreseeable future, management has made no provision for income taxes on those undistributed earnings aggregating ¥4,205,058 million as of March 31, 2020. Toyota estimates an additional tax provision of ¥152,190 million would be required if the full amount of those undistributed earnings were remitted.

A summary of the gross unrecognized tax benefits changes for the years ended March 31, 2018, 2019 and 2020 is as follows:

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Balance at beginning of year		21,553			21,564			17,268
Additions based on tax positions related to the current year		612			1,212			2,199
Additions for tax positions of prior years		13,954			1,304			127
Reductions for tax positions of prior years		(13,217	)		(819	)		(9,586	)
Reductions for tax positions related to lapse of statute of limitations		—			—			—
Reductions for settlements		(26	)		(6,696	)		(298	)
Other		(1,312	)		703			(1,363	)
Balance at end of year		21,564			17,268			8,347

 

F-38

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was not material at March 31, 2018, 2019 and 2020, respectively. Toyota does not believe it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months.

Interest and penalties related to income tax liabilities are included in “Other income (loss), net”. The amounts of interest and penalties accrued as of and recognized for the years ended March 31, 2018, 2019 and 2020, were not material.

Toyota remains subject to income tax examination for the tax returns related to the years beginning on and after April 1, 2013 and April 1, 2002, with various tax jurisdictions in Japan and foreign countries, respectively.

16. Class Shares:

TMC issued First Series Model AA Class Shares (the “Model AA Class Shares”) on July 24, 2015. Presented below is additional information regarding the Model AA Class Shares:

Total number of shares issued	:	47,100,000 shares
Issue price	:	10,598 yen per share
Purchase price	:	10,121.09 yen per share
Voting rights	:	Model AA Class Shares shall have voting rights. The number of shares constituting one unit with respect to Model AA Class Shares shall be 100.
Restrictions on transfer	:	Model AA Class Shares shall have restrictions on transfer.
Dividends	:	(1) If the record date falls in the fiscal year ending on March 31, 2016 : 0.5% of the issue price
		(2) If the record date falls in the fiscal year ending on March 31, 2017 through March 31, 2020 : the annual dividend rate for the previous fiscal year plus 0.5% of the issue price
		(3) If the record date falls in the fiscal year ending on March 31, 2021 or later : 2.5% of the issue price
Shareholder’s right	:	(1) Shareholder’s conversion right into Common Shares Shareholders of the Model AA Class Shares may demand TMC to acquire all or a part of their Model AA Class Shares in exchange for Common Shares on the first business day of April and October of every year, starting October 1, 2020.
		(2) Shareholder’s cash put option Shareholders of the Model AA Class Shares may demand TMC to acquire all or a part of their Model AA Class Shares in exchange for cash on the last business day of March, June, September and December of each year, starting on September 1, 2020.
TMC’s right	:	TMC may acquire, on or after April 2, 2021, all of the outstanding Model AA Class Shares in exchange for cash.

F-39

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Model AA Class Shares will not be treated as shareholders’ equity because the shareholders of the Model AA Class Shares will have cash put options and hence, the Model AA Class Shares will be reported as mezzanine equity, a separate line item between liabilities and shareholders’ equity.

Unpaid dividends included in mezzanine equity as of March 31, 2019 and 2020 were ¥4,969 million and ¥6,217 million, respectively.

The difference between the issuance amount and initial carrying amount of the mezzanine equity is adjusted for accretion of the mezzanine equity over a period of time from the issuance date until the Class Shares can first be redeemed.

17. Shareholders’ equity:

Changes in the number of shares of common stock issued have resulted from the following:

	For the years ended March 31,
	2018		2019		2020
Common stock issued
Balance at beginning of year		3,262,997,492		3,262,997,492		3,262,997,492
Issuance during the year		—		—		—
Purchase and retirement		—		—		—
Balance at end of year		3,262,997,492		3,262,997,492		3,262,997,492

Annual dividends per common share were ¥220, ¥220 and ¥220 for the years ended March 31, 2018, 2019 and 2020, respectively.

The Companies Act provides that an amount equal to 10% of distributions from surplus paid by the parent company and its Japanese subsidiaries be appropriated as a capital reserve or a retained earnings reserve. No further appropriations are required when the total amount of the capital reserve and the retained earnings reserve reaches 25% of stated capital.

The retained earnings reserve included in retained earnings as of March 31, 2019 and 2020 were ¥198,605 million and ¥201,490 million, respectively. The Companies Act provides that the retained earnings reserve of the parent company and its Japanese subsidiaries is restricted and unable to be used for dividend payments, and is excluded from the calculation of the profit available for dividend.

The amounts of statutory retained earnings of the parent company available for dividend payments to shareholders were ¥9,958,581 million and ¥10,276,666 million as of March 31, 2019 and 2020, respectively. In accordance with customary practice in Japan, the distributions from surplus are not accrued in the financial statements for the corresponding period, but are recorded in the subsequent accounting period after shareholders’ approval has been obtained. Retained earnings at March 31, 2020 include amounts representing year-end cash dividends of ¥331,938 million, ¥120 per common share, which were resolved at the Meeting of the Board of Directors held on May 12, 2020.

Retained earnings at March 31, 2020 include ¥3,063,866 million relating to equity in undistributed earnings of affiliated companies accounted for by the equity method.

F-40

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The repurchase, reissuance and retirement of treasury stock for the years ended March 31, 2018, 2019 and 2020 are as follows:

For the year ended March 31, 2018

Repurchase of treasury stock

Reason for repurchasing treasury stock -

The repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.

Details of matters relating to repurchase -

Number of common shares repurchased	73,708,400 shares
Total purchase price for repurchase of shares	¥499,989 million

Reissuance of treasury stock

Reason for reissuing treasury stock -

On August 4, 2017, the parent company and Mazda Motor Corporation (Mazda) signed an agreement to enter a business and capital alliance, with the aim of further strengthening their lasting partnership. The parent company acquired common stock newly issued by Mazda through a third-party allotment. Mazda acquired the parent company’s shares that were equivalent in value to the Mazda shares through a disposition of treasury stock involving a third-party allotment implemented by the parent company.

Details of matters relating to reissuance -

Number of common shares reissued	8,293,300 shares
Amount of proceeds	¥50,000 million

For the year ended March 31, 2019

Repurchase of treasury stock

Reason for repurchasing treasury stock -

The repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.

Details of matters relating to repurchase -

Number of common shares repurchased	77,622,700 shares
Total purchase price for repurchase of shares	¥549,986 million

F-41

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the year ended March 31, 2020

Repurchase of treasury stock

Reason for repurchasing treasury stock -

The repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.

Details of matters relating to repurchase -

Number of common shares repurchased	69,532,900 shares
Total purchase price for repurchase of shares	¥500,139 million

Reissuance of treasury stock

Reason for reissuing treasury stock -

On May 9, 2019, the parent company resolved to conclude contracts aimed toward the establishment of a new joint venture, Prime Life Technologies, related to a town development business with Panasonic. Pursuant to these contracts, the parent company, THC and Misawa Homes conducted a share exchange in which common shares of Toyota were allotted in exchange for common shares of Misawa Homes so that THC, a consolidated subsidiary of the parent company, will become the wholly owning parent company resulting from the share exchange and Misawa Homes, a consolidated subsidiary of THC, will become the wholly owned subsidiary resulting from the share exchange.

Details of matters relating to reissuance -

Number of common shares reissued	3,269,500 shares
Amount of reissuance	¥24,181 million

F-42

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

18. Accumulated other comprehensive income:

Changes in accumulated other comprehensive income (loss) are as follows:

	Yen in millions
	Foreign currency translation adjustments			Unrealized gains (losses) on securities			Pension liability adjustments			Accumulated other comprehensive income (loss)
Balance at March 31, 2017		(560,108	)		1,426,003			(224,973	)		640,922
Other comprehensive income (loss) before reclassifications, net of taxes of ¥(3,624) million, ¥38,539 million, ¥(7,568) million and ¥27,347 million		(113,942	)		(72,501	)		15,814			(170,629	)
Reclassifications, net of taxes of ¥— million, ¥9,729 million, ¥(2,500) million and ¥7,229 million		(6,664	)		(22,058	)		6,501			(22,221	)
Other comprehensive income (loss), net of tax		(120,606	)		(94,559	)		22,315			(192,850	)
Less - Other comprehensive income attributable to noncontrolling interests		1,629			(2,022	)		(580	)		(973	)
Equity transaction with noncontrolling interests and other		—			162			(11,562	)		(11,400	)
Balance at March 31, 2018		(679,085	)		1,329,584			(214,800	)		435,699
Effect of change in accounting policy		105			(1,309,725	)		—			(1,309,620	)
Other comprehensive income (loss) before reclassifications, net of taxes of ¥8,703 million, ¥3,382 million, ¥25,795 million and ¥37,880 million		25,639			(6,139	)		(62,288	)		(42,788	)
Reclassifications, net of taxes of ¥— million, ¥6,963 million, ¥(2,892) million and ¥4,071 million		1,377			(15,026	)		7,452			(6,197	)
Other comprehensive income (loss), net of tax		27,016			(21,165	)		(54,836	)		(48,985	)
Less - Other comprehensive income attributable to noncontrolling interests		2,432			54			3,770			6,256
Balance at March 31, 2019		(649,532	)		(1,252	)		(265,866	)		(916,650	)
Other comprehensive income (loss) before reclassifications, net of taxes of ¥1,865 million, ¥(50,969) million, ¥26,259 million and ¥(22,845) million		(333,854	)		113,978			(66,203	)		(286,079	)
Reclassifications, net of taxes of ¥— million, ¥(1,960) million, ¥(2,400) million and ¥(4,360) million		—			4,385			6,007			10,392
Other comprehensive income (loss), net of tax		(333,854	)		118,363			(60,196	)		(275,687	)
Less - Other comprehensive income attributable to noncontrolling interests		20,668			40			(440	)		20,268
Equity transaction with noncontrolling interests and other		3,432			(124	)		2,488			5,796
Balance at March 31, 2020		(959,286	)		117,027			(324,014	)		(1,166,273	)

F-43

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Reclassifications for the years ended March 31, 2018, 2019 and 2020 consist of the following:

	Yen in millions
	For the years ended March 31,									Affected line items in the consolidated statements of income
	2018			2019			2020
Foreign currency translation adjustments:
		(6,664	)		1,377			—		Other income (loss), net
		(6,664	)		1,377			—		Income before income taxes and equity in earnings of affiliated companies
		(6,664	)		1,377			—		Net income
Unrealized gains (losses) on securities:
		(4,567	)		1,243			(93	)	Financing operations
		(25,247	)		(22,374	)		8,823		Foreign exchange gain (loss), net
		(1,993	)		(827	)		(2,484	)	Other income (loss), net
		(31,807	)		(21,958	)		6,246		Income before income taxes and equity in earnings of affiliated companies
		9,729			6,963			(1,960	)	Provision for income taxes
		20			(31	)		99		Equity in earnings of affiliated companies
		(22,058	)		(15,026	)		4,385		Net income
Pension liability adjustments:
Recognized net actuarial loss		12,914			14,029			12,611		*1
Amortization of prior service costs		(3,913	)		(3,685	)		(4,204	)	*1
		9,001			10,344			8,407		Income before income taxes and equity in earnings of affiliated companies
		(2,500	)		(2,892	)		(2,400	)	Provision for income taxes
		6,501			7,452			6,007		Net income
Total reclassifications, net of tax		(22,221	)		(6,197	)		10,392

Amounts of reclassifications in parentheses indicate gains in the consolidated statements of income.

*1: Reclassifications of pension liability adjustments are affected under Cost and expenses for the year ended March 31, 2018 and Other income (loss), net for the years ended March 31, 2019 and 2020, respectively, in the consolidated statements of income.

19. Stock-based compensation:

In June 1997, the parent company’s shareholders approved a stock option plan for board members. In June 2001, the shareholders approved an amendment of the plan to include both board members and key employees. Each year until June 2010, since the plans’ inception, the shareholders have approved the authorization for the grant of options for the purchase of the parent company’s common stock. Authorized shares for each year that remain ungranted are unavailable for grant in future years. Stock options granted in and after August 2006 have terms of 8 years and an exercise price equal to 1.025 times the closing price of Toyota’s common stock on the date of grant. These options generally vest 2 years from the date of grant.

F-44

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

There were no stock-based compensation expenses for stock options as selling, general and administrative expenses for the years ended March 31, 2018, 2019 and 2020, respectively.

The following table summarizes Toyota’s stock option activity:

				Yen				Yen in millions
	Number of shares			Weighted- average exercise price		Weighted- average remaining contractual life in years		Aggregate intrinsic value
Options outstanding at March 31, 2017		1,192,300			3,682		0.80		2,813
Granted		—			—
Exercised		(643,800	)		3,726
Canceled		(264,900	)		4,154
Options outstanding at March 31, 2018		283,600			3,153		0.33		1,041
Granted		—			—
Exercised		(155,100	)		3,156
Canceled		(128,500	)		3,153
Options outstanding at March 31, 2019		—			—		—		—
Granted		—			—
Exercised		—			—
Canceled		—			—
Options outstanding at March 31, 2020		—			—		—		—
Options exercisable at March 31, 2018		283,600			3,153		0.33		1,041
Options exercisable at March 31, 2019		—			—		—		—
Options exercisable at March 31, 2020		—			—		—		—

The total intrinsic value of options exercised for the years ended March 31, 2018 and 2019 was ¥1,881 million and ¥618 million, respectively. There were no stock options exercised for the year ended March 31, 2020.

Cash received from the exercise of stock options for the years ended March 31, 2018 and 2019 was ¥2,399 million and ¥490 million, respectively. There were no cash proceeds from stock options exercised for the year ended March 31, 2020.

F-45

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

20. Employee benefit plans:

Pension and severance plans -

Upon terminations of employment, employees of the parent company and subsidiaries in Japan are entitled, under the retirement plans of each company, to lump-sum indemnities or pension payments, based on current rates of pay and lengths of service or the number of “points” mainly determined by those. Under normal circumstances, the minimum payment prior to retirement age is an amount based on voluntary retirement. Employees receive additional benefits on involuntary retirement, including retirement at the age limit.

Effective October 1, 2004, the parent company amended its retirement plan to introduce a “point” based retirement benefit plan. Under the new plan, employees are entitled to lump-sum or pension payments determined based on accumulated “points” vested in each year of service.

There are three types of “points” that vest in each year of service consisting of “service period points” which are attributed to the length of service, “job title points” which are attributed to the job title of each employee, and “performance points” which are attributed to the annual performance evaluation of each employee. Under normal circumstances, the minimum payment prior to retirement age is an amount reflecting an adjustment rate applied to represent voluntary retirement. Employees receive additional benefits upon involuntary retirement, including retirement at the age limit.

Effective October 1, 2005, the parent company partly amended its retirement plan and introduced the quasi cash-balance plan under which benefits are determined based on the variable-interest crediting rate rather than the fixed-interest crediting rate as was in the pre-amended plan.

The parent company and most subsidiaries in Japan have contributory funded defined benefit pension plans, which are pursuant to the Corporate Defined Benefit Pension Plan Law (CDBPPL). The contributions to the plans are funded with several financial institutions in accordance with the applicable laws and regulations. These pension plan assets consist principally of common stocks, government bonds and insurance contracts.

Most foreign subsidiaries have pension plans or severance indemnity plans covering substantially all of their employees under which the cost of benefits are currently invested or accrued. The benefits for these plans are based primarily on lengths of service and current rates of pay.

Toyota uses a March 31 measurement date for its benefit plans.

F-46

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Information regarding Toyota’s defined benefit plans is as follows:

	Yen in millions
	March 31,
	Japanese plans						Foreign plans
	2019			2020			2019			2020
Change in benefit obligation
Benefit obligation at beginning of year		2,019,310			2,100,073			1,097,981			1,186,897
Service cost		99,838			93,298			46,930			46,869
Interest cost		12,967			10,514			40,708			40,335
Plan participants’ contributions		974			1,014			1,045			2,018
Plan amendments		(1,067	)		(988	)		13			3,308
Net actuarial (gain) loss		67,391			(48,602	)		7,755			(2,865	)
Acquisition and other		(20,786	)		(55,070	)		21,634			(28,548	)
Benefits paid		(78,554	)		(48,796	)		(29,169	)		(40,200	)
Benefit obligation at end of year		2,100,073			2,051,443			1,186,897			1,207,814
Change in plan assets
Fair value of plan assets at beginning of year		1,612,879			1,600,491			815,483			882,784
Actual return on plan assets		3,208			(70,503	)		59,237			13,421
Acquisition and other		(13,705	)		(41,105	)		12,696			(28,068	)
Employer contributions		41,276			38,144			18,952			29,407
Plan participants’ contributions		974			1,014			1,045			2,018
Benefits paid		(44,141	)		(15,010	)		(24,629	)		(30,661	)
Fair value of plan assets at end of year		1,600,491			1,513,031			882,784			868,901
Funded status		499,582			538,412			304,113			338,913

Amounts recognized in the consolidated balance sheets as of March 31, 2019 and 2020 are comprised of the following:

	Yen in millions
	March 31,
	Japanese plans						Foreign plans
	2019			2020			2019			2020
Accrued expenses (Accrued pension and severance costs)		34,298			33,422			3,234			7,934
Accrued pension and severance costs		657,380			639,764			306,026			338,862
Investments and other assets - Other (Prepaid pension and severance costs)		(192,096	)		(134,774	)		(5,147	)		(7,883	)
Net amount recognized		499,582			538,412			304,113			338,913

F-47

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Amounts recognized in accumulated other comprehensive income (loss) as of March 31, 2019 and 2020 are comprised of the following:

	Yen in millions
	March 31,
	Japanese plans						Foreign plans
	2019			2020			2019			2020
Net actuarial loss		(339,814	)		(383,485	)		(91,072	)		(116,171	)
Prior service costs		29,801			21,538			(1,612	)		(5,352	)
Net transition obligation		—			—			—			—
Net amount recognized		(310,013	)		(361,947	)		(92,684	)		(121,523	)

The accumulated benefit obligation for all defined benefit pension plans was ¥2,040,344 million and ¥1,993,624 million in Japanese plans, ¥1,120,453 million and ¥1,134,977 million in Foreign plans at March 31, 2019 and 2020, respectively.

The projected benefit obligation and fair value of plan assets for which the projected benefit obligations exceed plan assets are as follows:

	Yen in millions
	March 31,
	Japanese plans				Foreign plans
	2019		2020		2019		2020
Projected benefit obligation		878,009		846,068		681,025		1,025,234
Fair value of plan assets		203,277		188,241		357,583		678,522

The accumulated benefit obligation and fair value of plan assets for which the accumulated benefit obligations exceed plan assets are as follows:

	Yen in millions
	March 31,
	Japanese plans				Foreign plans
	2019		2020		2019		2020
Accumulated benefit obligation		847,017		783,561		515,918		403,810
Fair value of plan assets		198,315		155,345		215,006		93,717

Components of the net periodic pension cost are as follows:

	Yen in millions
	For the years ended March 31,
	Japanese plans									Foreign plans
	2018			2019			2020			2018			2019			2020
Service cost		88,964			99,838			93,298			35,887			46,930			46,869
Interest cost		13,252			12,967			10,514			37,817			40,708			40,335
Expected return on plan assets		(36,409	)		(38,551	)		(37,813	)		(41,048	)		(37,530	)		(43,003	)
Amortization of prior service costs		(4,226	)		(3,904	)		(4,346	)		313			219			142
Recognized net actuarial loss		7,462			6,927			8,356			5,452			7,102			4,255
Amortization of net transition obligation		—			—			—			—			—			—
Net periodic pension cost		69,043			77,277			70,009			38,421			57,429			48,598

F-48

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) are as follows:

	Yen in millions
	For the years ended March 31,
	Japanese plans									Foreign plans
	2018			2019			2020			2018			2019			2020
Net actuarial gain (loss)		39,852			(102,734	)		(59,714	)		(17,163	)		13,952			(26,717	)
Recognized net actuarial loss		7,462			6,927			8,356			5,452			7,102			4,255
Prior service costs		58			1,067			988			12			(13	)		(3,308	)
Amortization of prior service costs		(4,226	)		(3,904	)		(4,346	)		313			219			142
Amortization of net transition obligation		—			—			—			—			—			—
Other		(7,979	)		4,610			2,782			9,004			7,289			(3,211	)
Total recognized in other comprehensive income (loss)		35,167			(94,034	)		(51,934	)		(2,382	)		28,549			(28,839	)

“Other” includes the impact of consolidation and deconsolidation of certain entities due to changes in ownership interest and currency translation adjustments during the years ended March 31, 2018, 2019 and 2020.

The estimated prior service costs and net actuarial loss that will be amortized from accumulated other comprehensive income (loss) into net periodic pension cost during the year ending March 31, 2021 are ¥(3,400) million and ¥13,300 million in Japanese plans, ¥100 million and ¥6,000 million in Foreign plans, respectively.

Weighted-average assumptions used to determine benefit obligations as of March 31, 2019 and 2020 are as follows:

	March 31,
	Japanese plans						Foreign plans
	2019			2020			2019			2020
Discount rate		0.6	%		0.6	%		3.8	%		3.5	%
Rate of compensation increase		3.1	%		2.5	%		3.5	%		3.4	%

As of March 31, 2019 and 2020, the parent company and certain subsidiaries in Japan employ “point” based retirement benefit plans and do not use the rates of compensation increase to determine benefit obligations.

Weighted-average assumptions used to determine net periodic pension cost for the years ended March 31, 2018, 2019 and 2020 are as follows:

	For the years ended March 31,
	Japanese plans									Foreign plans
	2018			2019			2020			2018			2019			2020
Discount rate		0.7	%		0.7	%		0.6	%		4.0	%		3.9	%		3.8	%
Expected return on plan assets		2.4	%		2.4	%		2.4	%		6.0	%		5.6	%		5.2	%
Rate of compensation increase		2.9	%		3.3	%		3.1	%		3.8	%		3.6	%		3.5	%

During the years ended March 31, 2018, 2019 and 2020, the parent company and certain subsidiaries in Japan employ “point” based retirement benefit plans and do not use the rates of compensation increase to determine net periodic pension cost.

F-49

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The expected rate of return on plan assets is determined after considering several applicable factors including, the composition of plan assets held, assumed risks of asset management, historical results of the returns on plan assets, Toyota’s principal policy for plan asset management, and forecasted market conditions.

Toyota’s policy and objective for plan asset management is to maximize returns on plan assets to meet future benefit payment requirements under risks which Toyota considers permissible. Asset allocations under the plan asset management are determined based on plan asset management policies of each plan which are established to achieve the optimized asset compositions in terms of the long-term overall plan asset management. In Japanese plans, excepting equity securities contributed by Toyota, approximately 40% of the plan assets is invested in equity securities, approximately 30% is invested in debt securities, and the rest of them is invested in insurance contracts and other products. In Foreign plans, excepting equity securities contributed by Toyota, approximately 40% of the plan assets is invested in equity securities, approximately 50% is invested in debt securities, and the rest of them is invested in other products. When actual allocations are not in line with target allocations, Toyota rebalances its investments in accordance with the policies. Prior to making individual investments, Toyota performs in-depth assessments of corresponding factors including category of products, industry type, currencies and liquidity of each potential investment under consideration to mitigate concentrations of risks such as market risk and foreign currency exchange rate risk. To assess performance of the investments, Toyota establishes bench mark return rates for each individual investment, combines these individual bench mark rates based on the asset composition ratios within each asset category, and compares the combined rates with the corresponding actual return rates on each asset category.

The following table summarizes the fair value of classes of plan assets as of March 31, 2019 and 2020. See note 28 to the consolidated financial statements for three levels of input which are used to measure fair value.

Japanese plans

	Yen in millions
	March 31, 2019
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		531,159		—		—		531,159
Commingled funds		—		192,012		—		192,012
		531,159		192,012		—		723,171
Debt securities
Government bonds		98,578		—		—		98,578
Commingled funds		—		286,783		—		286,783
Other		—		54,652		—		54,652
		98,578		341,435		—		440,013
Insurance contracts		—		226,093		—		226,093
Other		84,208		38,439		4,242		126,889
Investments measured at net asset value		—		—		—		84,325
Total		713,945		797,979		4,242		1,600,491

F-50

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Yen in millions
	March 31, 2020
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		467,885		—		—		467,885
Commingled funds		—		135,979		—		135,979
		467,885		135,979		—		603,864
Debt securities
Government bonds		86,212		—		—		86,212
Commingled funds		—		278,394		—		278,394
Other		—		75,644		—		75,644
		86,212		354,038		—		440,250
Insurance contracts		—		226,043		—		226,043
Other		89,986		59,780		6,199		155,965
Investments measured at net asset value		—		—		—		86,909
Total		644,083		775,840		6,199		1,513,031

Foreign plans

	Yen in millions
	March 31, 2019
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		123,875		—		—		123,875
Commingled funds		—		215,386		—		215,386
		123,875		215,386		—		339,261
Debt securities
Government bonds		141,054		—		—		141,054
Commingled funds		—		—		—		—
Other		—		164,877		—		164,877
		141,054		164,877		—		305,931
Insurance contracts		—		—		—		—
Other		10,292		24,810		27,903		63,005
Investments measured at net asset value		—		—		—		174,587
Total		275,221		405,073		27,903		882,784

F-51

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Yen in millions
	March 31, 2020
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		111,997		—		—		111,997
Commingled funds		—		186,918		—		186,918
		111,997		186,918		—		298,915
Debt securities
Government bonds		181,702		—		—		181,702
Commingled funds		—		—		—		—
Other		—		170,650		—		170,650
		181,702		170,650		—		352,352
Insurance contracts		—		—		—		—
Other		10,425		24,410		28,251		63,086
Investments measured at net asset value		—		—		—		154,548
Total		304,124		381,978		28,251		868,901

Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

The following is description of the assets, information about the valuation techniques used to measure fair value, key inputs and significant assumptions:

Quoted market prices for identical securities are used to measure fair value of common stocks. Japanese stocks and foreign stocks represent 73% and 27% (as of March 31, 2019) and 75% and 25% (as of March 31, 2020) of common stocks, respectively, in Japanese plans. Common stocks include mainly foreign stocks as of March 31, 2019 and 2020 in Foreign plans.

Quoted market prices for identical securities are used to measure fair value of government bonds. Japanese government bonds and foreign government bonds represent 33% and 67% (as of March 31, 2019) and 37% and 63% (as of March 31, 2020) of government bonds, respectively, in Japanese plans. Government bonds include mainly foreign government bonds as of March 31, 2019 and 2020 in Foreign plans.

Commingled funds are beneficial interests of collective trust. The fair values of commingled funds are measured using the net asset value (“NAV”) provided by the administrator of the fund, and are categorized by the ability to redeem investments by the NAV.

The fair values of insurance contracts are measured using contracted amount with accrued interest.

“Other” consists of cash equivalents, other private placement investment funds and other assets. The fair values of other private placement investment funds are measured using the NAV provided by the administrator of the fund, and are categorized by the ability to redeem investments by the NAV.

F-52

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following tables summarize the changes in Level 3 plan assets measured at fair value for the years ended March 31, 2018, 2019 and 2020:

Japanese plans

	Yen in millions
	For the years ended March 31,
	2018									2019									2020
	Debt securities			Other			Total			Debt securities			Other			Total			Debt securities		Other			Total
Balance at beginning of year		81			496			577			19			—			19			—		4,242			4,242
Actual return on plan assets		—			(4	)		(4	)		—			(164	)		(164	)		—		(43	)		(43	)
Purchases, sales and settlements		(62	)		(492	)		(554	)		(19	)		—			(19	)		—		—			—
Other		—			—			—			—			4,406			4,406			—		2,000			2,000
Balance at end of year		19			—			19			—			4,242			4,242			—		6,199			6,199

Foreign plans

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
	Other			Other			Other
Balance at beginning of year		30,903			31,288			27,903
Actual return on plan assets		2,024			(4,784	)		891
Purchases, sales and settlements		—			—			—
Other		(1,639	)		1,399			(543	)
Balance at end of year		31,288			27,903			28,251

Toyota expects to contribute ¥38,667 million in Japanese plans and ¥17,749 million in Foreign plans to its pension plans in the year ending March 31, 2021.

The following pension benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

	Yen in millions
Years ending March 31,	Japanese plans		Foreign plans
2021		82,748		43,815
2022		86,207		45,841
2023		87,914		47,645
2024		90,887		49,795
2025		87,909		50,854
from 2026 to 2030		441,675		281,343
Total		877,340		519,293

F-53

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Postretirement benefits other than pensions and postemployment benefits -

Toyota’s U.S. subsidiaries provide certain health care and life insurance benefits to eligible retired employees. In addition, Toyota provides benefits to certain former or inactive employees after employment, but before retirement. These benefits are provided through various insurance companies, health care providers and others. The costs of these benefits are recognized over the period the employee provides credited service to Toyota. Toyota’s obligations under these arrangements are not material.

21. Derivative financial instruments:

Toyota employs derivative financial instruments, including foreign exchange forward contracts, foreign currency options, interest rate swaps, interest rate currency swap agreements and interest rate options to manage its exposure to fluctuations in interest rates and foreign currency exchange rates. Toyota does not use derivatives for speculation or trading.

Fair value hedges -

Toyota enters into interest rate swaps and interest rate currency swap agreements mainly to convert its fixed-rate debt to variable-rate debt. Toyota uses interest rate swap agreements in managing interest rate risk exposure. Interest rate swap agreements are executed as either an integral part of specific debt transactions or on a portfolio basis. Toyota uses interest rate currency swap agreements to hedge exposure to currency exchange rate fluctuations on principal and interest payments for borrowings denominated in foreign currencies. Notes and loans payable issued in foreign currencies are hedged by concurrently executing interest rate currency swap agreements, which involve the exchange of foreign currency principal and interest obligations for each functional currency obligations at agreed-upon currency exchange and interest rates.

For the years ended March 31, 2018, 2019 and 2020, the ineffective portion of Toyota’s fair value hedge relationships was not material. For fair value hedging relationships, the components of each derivative’s gain or loss are included in the assessment of hedge effectiveness.

Undesignated derivative financial instruments -

Toyota uses foreign exchange forward contracts, foreign currency options, interest rate swaps, interest rate currency swap agreements, and interest rate options, to manage its exposure to foreign currency exchange rate fluctuations and interest rate fluctuations from an economic perspective, and for some of which Toyota is unable to or has elected not to apply hedge accounting.

F-54

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Fair value and gains or losses on derivative financial instruments -

The following table summarizes the fair values of derivative financial instruments as of March 31, 2019 and 2020:

	Yen in millions
	March 31,
	2019			2020
Derivative assets
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Prepaid expenses and other current assets		—			—
Investments and other assets - Other		—			—
Total		—			—
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Prepaid expenses and other current assets		74,971			105,724
Investments and other assets - Other		114,642			372,786
Total		189,613			478,510
Foreign exchange forward and option contracts
Prepaid expenses and other current assets		10,720			25,316
Investments and other assets - Other		—			—
Total		10,720			25,316
Total derivative assets		200,333			503,826
Counterparty netting		(89,364	)		(176,541	)
Collateral received		(46,590	)		(121,979	)
Carrying value of derivative assets		64,379			205,306
Derivative liabilities
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Other current liabilities		—			—
Other long-term liabilities		—			—
Total		—			—
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Other current liabilities		(28,911	)		(76,492	)
Other long-term liabilities		(189,157	)		(343,271	)
Total		(218,068	)		(419,763	)
Foreign exchange forward and option contracts
Other current liabilities		(13,847	)		(17,245	)
Other long-term liabilities		—			—
Total		(13,847	)		(17,245	)
Total derivative liabilities		(231,915	)		(437,008	)
Counterparty netting		89,364			176,541
Collateral posted		110,159			234,937
Carrying value of derivative liabilities		(32,392	)		(25,530	)

F-55

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes the notional amounts of derivative financial instruments as of March 31, 2019 and 2020:

	Yen in millions
	March 31,
	2019				2020
	Designated derivative financial instruments		Undesignated derivative financial instruments		Designated derivative financial instruments		Undesignated derivative financial instruments
Interest rate and currency swap agreements		—		21,001,883		—		20,310,018
Foreign exchange forward and option contracts		—		4,005,578		—		3,916,824
Total		—		25,007,461		—		24,226,842

The following table summarizes the gains and losses on derivative financial instruments and hedged items reported in the consolidated statements of income for the years ended March 31, 2018, 2019 and 2020:

	Yen in millions
	For the years ended March 31,
	2018					2019					2020
	Gains or (losses) on derivative financial instruments		Gains or (losses) on hedged items			Gains or (losses) on derivative financial instruments			Gains or (losses) on hedged items		Gains or (losses) on derivative financial instruments		Gains or (losses) on hedged items
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Cost of financing operations		782		(227	)		(822	)		799		—		—
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Cost of financing operations		42,220					(18,433	)				51,552
Foreign exchange gain (loss), net		30,339					37,124					67,142
Foreign exchange forward and option  contracts
Cost of financing operations		6,442					2,240					33,538
Foreign exchange gain (loss), net		73,115					(69,826	)				8,281

Undesignated derivative financial instruments are used to manage economic risks of fluctuations in foreign currency exchange rates and interest rates of certain receivables and payables. Those economic risks are offset by changes in the fair value of undesignated derivative financial instruments.

F-56

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Cash flows from transactions of derivative financial instruments are included in cash flows from operating activities in the consolidated statements of cash flows.

Credit risk related contingent features -

Toyota enters into International Swaps and Derivatives Association Master Agreements with counterparties. These Master Agreements contain a provision requiring either Toyota or the counterparty to settle the contract or to post assets to the other party in the event of a ratings downgrade below a specified threshold.

The aggregate fair value amount of derivative financial instruments that contain credit risk related contingent features that are in a net liability position after being offset by cash collateral as of March 31, 2020 is ¥6,750 million. The aggregate fair value amount of assets that are already posted as cash collateral as of March 31, 2020 is ¥230,830 million. If the ratings of Toyota decline below specified thresholds, the maximum amount of assets to be posted or for which Toyota could be required to settle the contracts is ¥6,750 million as of March 31, 2020.

22. Other financial instruments:

Toyota has certain financial instruments, including financial assets and liabilities which arose in the normal course of business. These financial instruments are executed with creditworthy financial institutions, and virtually all foreign currency contracts are denominated in U.S. dollars, euros and other currencies of major developed countries. Financial instruments involve, to varying degrees, market risk as instruments are subject to price fluctuations, and elements of credit risk in the event a counterparty should default. In the unlikely event the counterparties fail to meet the contractual terms of a foreign currency or an interest rate instrument, Toyota’s risk is limited to the fair value of the instrument. Although Toyota may be exposed to losses in the event of non-performance by counterparties on financial instruments, it does not anticipate significant losses due to the nature of its counterparties. Counterparties to Toyota’s financial instruments represent, in general, international financial institutions. Additionally, Toyota does not have a significant exposure to any individual counterparty. Toyota believes that the overall credit risk related to its financial instruments is not significant.

The following table summarizes the estimated fair values of Toyota’s financial instruments, excluding marketable securities, other securities investments, investments and other assets in affiliated companies and derivative financial instruments. See note 28 to the consolidated financial statements for three levels of input which are used to measure fair value.

	Yen in millions
	March 31, 2019
				Estimated fair value
	Carrying amount			Level 1		Level 2			Level 3			Total
Assets (Liabilities)
Cash and cash equivalents		3,574,704			2,980,504		594,200			—			3,574,704
Time deposits		1,126,352			—		1,126,352			—			1,126,352
Total finance receivables, net		15,450,745			—		—			15,668,542			15,668,542
Other receivables		568,156			—		—			568,156			568,156
Short-term borrowings		(5,344,973	)		—		(5,285,807	)		(59,166	)		(5,344,973	)
Long-term debt including the current portion		(14,786,184	)		—		(12,786,541	)		(1,833,623	)		(14,620,164	)

F-57

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Yen in millions
	March 31, 2020
				Estimated fair value
	Carrying amount			Level 1		Level 2			Level 3			Total
Assets (Liabilities)
Cash and cash equivalents		4,190,518			3,598,318		592,200			—			4,190,518
Time deposits		828,220			—		828,220			—			828,220
Total finance receivables, net		15,511,294			—		—			15,703,737			15,703,737
Other receivables		564,854			—		—			564,854			564,854
Short-term borrowings		(5,286,026	)		—		(5,274,071	)		(11,955	)		(5,286,026	)
Long-term debt including the current portion		(15,238,006	)		—		(12,644,187	)		(1,966,646	)		(14,610,833	)

Cash and cash equivalents and time deposits -

In the normal course of business, substantially all cash and cash equivalents and time deposits are highly liquid and are carried at amounts which approximate fair value due to its short duration. Cash equivalents and time deposits include negotiable certificate of deposit measured at fair value on a recurring basis. Where money market funds produce a daily net asset value in an active market, this value is used to determine the fair value of the fund investment, and the investment is classified in Level 1. All other types of cash and cash equivalents and time deposits are classified in Level 2.

Finance receivables, net -

The fair values of finance receivables are estimated by discounting expected cash flows to present value using internal assumptions, including prepayment speeds, expected credit losses and collateral value. Certain impaired finance receivables are measured at fair value on a nonrecurring basis based on collateral values.

As unobservable inputs are utilized, finance receivables are classified in Level 3.

Other receivables -

Other receivables are short-term receivables. These receivables are carried at amounts which approximate fair value, and the difference between the carrying amount and the fair value is not material. These receivables are classified in Level 3.

Short-term borrowings and long-term debt -

The fair values of short-term borrowings and long-term debt including the current portion, except for secured loans provided by securitization transactions using special-purpose entities, are estimated based on the discounted amounts of future cash flows using Toyota’s current borrowing rates for similar liabilities. As these inputs are observable, these debts are classified in Level 2.

The fair values of the secured loans provided by securitization transactions are estimated based on current market rates and credit spreads for debt with similar maturities. Internal assumptions including prepayment speeds and expected credit losses are used to estimate the timing of cash flows to be paid on the underlying securitized assets. As these valuations utilize unobservable inputs, the secured loans are classified in Level 3. See note 11 to the consolidated financial statements for information regarding the secured loans.

F-58

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

23. Lease commitments:

Toyota leases certain assets under finance lease and operating lease arrangements.

An analysis of leased assets under finance leases is as follows:

	Yen in millions
	March 31,
	2019			2020
Class of property
Building		18,519			22,790
Machinery and equipment		28,836			62,337
Less - Accumulated depreciation		(30,016	)		(25,036	)
		17,339			60,091

Amortization expenses under finance leases for the years ended March 31, 2018 and 2019 were ¥5,541 million and ¥7,879 million, respectively.

Rental expenses under operating leases for the year ended March 31, 2018 and 2019 were ¥112,934 million and ¥115,503 million, respectively.

The minimum rental payments required under operating leases relating primarily to land, buildings and equipment having initial or remaining non-cancelable lease terms in excess of one year at March 31, 2019 are as follows:

Years ending March 31,	Yen in millions
2020		16,078
2021		13,396
2022		11,862
2023		10,219
2024		8,034
Thereafter		32,598
Total minimum future rentals		92,187

An analysis of lease payment is as follows:

	Yen in millions
	March 31, 2020
Lease payment
Finance lease expense
Amortization of right-of-use asset		14,676
Interest on lease liabilities		805
Operating lease expense		80,343
Short term lease expense		44,440
		140,264

F-59

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Other supplementary information is as follows:

	Yen in millions
	March 31, 2020
Other supplementary information
Cash paid for amounts included in the measurement of finance lease liabilities
Cash flow from operating activities		805
Cash flow from financing activities		5,860
Cash paid for amounts included in the measurement of operating lease liabilities
Cash flow from operating activities		80,101
Right of use assets obtained in exchange for lease liabilities
Finance lease		47,082
Operating lease		105,913
Weighted average remaining lease term (years)
Finance lease		5.6
Operating lease		8.4
Weighted average discount rate
Finance lease		4.23	%
Operating lease		2.13	%

Future minimum lease payments under finance leases and operating leases together with the present value of the net minimum lease payments as of March 31, 2020 are as follows:

	Yen in millions
Years ending March 31,	Finance lease			Operating lease
2021		6,378			41,618
2022		4,320			33,648
2023		3,124			26,890
2024		2,842			22,640
2025		2,525			20,437
Thereafter		17,629			165,454
Total minimum lease payments		36,818			310,687
Less - Amount representing interest		(7,881	)		(29,732	)
Present value of net minimum lease payments		28,937			280,955
Current liability		5,460			39,136
Noncurrent liability		23,477			241,819
Total minimum lease present value		28,937			280,955

F-60

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

24. Other commitments and contingencies, concentrations and factors that may affect future operations:

Commitments -

Commitments outstanding as of March 31, 2020 for the purchase of property, plant and equipment, other assets and services totaled ¥362,071 million.

Guarantees -

Toyota enters into contracts with Toyota dealers to guarantee customers’ payments of their installment payables that arise from installment contracts between customers and Toyota dealers, as and when requested by Toyota dealers. Guarantee periods are set to match maturity of installment payments, and as of March 31, 2020, range from 1 month to 8 years; however, they are generally shorter than the useful lives of products sold. Toyota is required to execute its guarantee primarily when customers are unable to make required payments.

The maximum potential amount of future payments as of March 31, 2020 is ¥3,333,385 million. Liabilities for guarantees totaling ¥10,615 million have been provided as of March 31, 2020. Under these guarantee contracts, Toyota is entitled to recover any amount paid by Toyota from the customers whose original obligations Toyota has guaranteed.

Legal proceedings -

From time-to-time, Toyota issues vehicle recalls and takes other safety measures including safety campaigns relating to its vehicles. Since 2009, Toyota has issued safety campaigns related to the risk of floor mat entrapment of accelerator pedals and vehicle recalls related to slow-to-return or sticky accelerator pedals. Personal injury and wrongful death claims involving allegations of unintended acceleration are still pending in consolidated proceedings in federal and California state courts, as well as in individual cases in various other states. The judges in the consolidated federal action and the consolidated California state action have approved an Intensive Settlement Process (“ISP”) for such claims in those actions. Under the ISP, all individual claims within the consolidated actions remain pending completion of a process to assess whether they can be resolved on terms acceptable to the parties. Cases not resolved after completion of the ISP will then proceed to discovery and toward trial. Toyota has offered the ISP to plaintiffs in individual cases as well. While the ISP is ongoing, a majority of the claims in the consolidated actions and the individual cases are in settlement discussions or have been settled. Toyota believes that the remaining claims in the consolidated actions and the individual cases will not have a material effect on Toyota’s financial position, results of operations or cash flows.

Toyota has been named as a defendant in 33 economic loss class action lawsuits in the United States, which, together with similar lawsuits against Takata and other automakers, have been made part of a multi-district litigation proceeding in the United States District Court for the Southern District of Florida, arising out of allegations that airbag inflators manufactured by Takata are defective. Toyota has reached a settlement with the plaintiffs in the United States economic loss class actions. The court approved the settlement on October 31, 2017, and subsequent appeals have been withdrawn, making the settlement final. The economic loss class action lawsuits against Toyota have been dismissed. Toyota and other automakers have also been named in certain class actions filed in Mexico, Canada, Australia, Israel and Brazil, as well as some other actions by states or territories of the United States. The remaining actions in Mexico, Australia, Israel, Brazil and some other actions by states or territories of the United States are being litigated.

Toyota has self-reported a process gap in fulfilling certain emissions defect information reporting requirements of the U.S. Environmental Protection Agency (“EPA”) and California Air Resources Board, including updates on its repair completion rates for recalled emissions components and certain other reports

F-61

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

concerning emissions related defects. Toyota is cooperating with civil investigations by the EPA and the Civil Division of the Southern District of New York (“SDNY”) on this reporting issue and continues to have discussions with the EPA and the SDNY. The investigations could result in the imposition of civil penalties, fines or other sanctions, or litigation by the SDNY or the EPA.

Toyota also has various other pending legal actions and claims, including without limitation personal injury and wrongful death lawsuits and claims in the United States, and is subject to government investigations from time to time.

Beyond the amounts accrued with respect to all aforementioned matters, Toyota is unable to estimate a range of reasonably possible loss, if any, for the pending legal matters because (i) many of the proceedings are in evidence gathering stages, (ii) significant factual issues need to be resolved, (iii) the legal theory or nature of the claims is unclear, (iv) the outcome of future motions or appeals is unknown and/or (v) the outcomes of other matters of these types vary widely and do not appear sufficiently similar to offer meaningful guidance. Therefore, for all of the aforementioned matters, which Toyota is in discussions to resolve, any losses that are beyond the amounts accrued could have an adverse effect on Toyota’s financial position, results of operations or cash flows.

The parent company has a concentration of labor supply in employees working under collective bargaining agreements and a substantial portion of these employees are working under the agreement that will expire on December 31, 2020.

25. Segment data:

The operating segments reported below are the segments of Toyota for which separate financial information is available and for which operating income/loss amounts are evaluated regularly by executive management in deciding how to allocate resources and in assessing performance.

The major portions of Toyota’s operations on a worldwide basis are derived from the Automotive and Financial Services business segments. The Automotive segment designs, manufactures and distributes sedans, minivans, compact cars, sport-utility vehicles, trucks and related parts and accessories. The Financial Services segment consists primarily of financing, and vehicle leasing operations to assist in the merchandising of the parent company and its affiliated companies products as well as other products. The All Other segment includes the design, manufacturing and sales of housing, telecommunications and other businesses.

F-62

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following tables present certain information regarding Toyota’s industry or geographic segments and overseas revenues by destination as of and for the years ended March 31, 2018, 2019 and 2020.

Segment operating results and assets -

As of and for the year ended March 31, 2018:

	Yen in millions
	Automotive		Financial Services		All Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		26,347,229		1,959,234		1,073,047		—			29,379,510
Inter-segment sales and transfers		50,711		57,774		573,071		(681,556	)		—
Total		26,397,940		2,017,008		1,646,118		(681,556	)		29,379,510
Operating expenses		24,386,805		1,731,462		1,545,306		(683,925	)		26,979,648
Operating income		2,011,135		285,546		100,812		2,369			2,399,862
Assets		17,054,209		23,055,981		2,178,118		8,019,941			50,308,249
Investment in equity method investees		3,054,583		11,713		—		96,415			3,162,711
Depreciation expenses		976,735		723,061		34,237		—			1,734,033
Capital expenditure		1,381,122		2,166,805		62,447		(11,667	)		3,598,707

As of and for the year ended March 31, 2019:

	Yen in millions
	Automotive		Financial Services		All Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		27,034,492		2,120,343		1,070,846		—			30,225,681
Inter-segment sales and transfers		44,585		33,204		605,531		(683,320	)		—
Total		27,079,077		2,153,547		1,676,377		(683,320	)		30,225,681
Operating expenses		25,040,193		1,830,726		1,570,839		(683,622	)		27,758,136
Operating income		2,038,884		322,821		105,538		302			2,467,545
Assets		17,799,376		24,044,700		2,125,271		7,967,602			51,936,949
Investment in equity method investees		3,215,856		12,172		—		85,675			3,313,703
Depreciation expenses		997,312		758,847		36,216		—			1,792,375
Capital expenditure		1,520,366		2,165,609		66,075		(13,163	)		3,738,887

F-63

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of and for the year ended March 31, 2020:

	Yen in millions
	Automotive		Financial   Services		All Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		26,834,485		2,170,243		925,264		—			29,929,992
Inter-segment sales and transfers		29,029		20,316		579,286		(628,631	)		—
Total		26,863,514		2,190,559		1,504,550		(628,631	)		29,929,992
Operating expenses		24,811,168		1,898,376		1,407,895		(630,316	)		27,487,123
Operating income		2,052,346		292,183		96,655		1,685			2,442,869
Assets		18,754,728		24,858,837		2,023,111		7,043,760			52,680,436
Investment in equity method investees		3,711,151		61,852		180,425		137,362			4,090,790
Depreciation expenses		824,777		743,710		36,896		—			1,605,383
Capital expenditure		1,454,142		2,062,718		71,554		14,818			3,603,232

Geographic information -

As of and for the year ended March 31, 2018:

	Yen in millions
	Japan		North America		Europe		Asia		Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		9,273,672		10,347,266		2,940,243		4,497,374		2,320,955		—			29,379,510
Inter-segment sales and transfers		6,751,172		227,144		244,981		650,765		132,344		(8,006,406	)		—
Total		16,024,844		10,574,410		3,185,224		5,148,139		2,453,299		(8,006,406	)		29,379,510
Operating expenses		14,364,926		10,435,511		3,110,198		4,714,940		2,340,636		(7,986,563	)		26,979,648
Operating income		1,659,918		138,899		75,026		433,199		112,663		(19,843	)		2,399,862
Assets		15,797,024		16,936,704		3,346,179		4,893,582		2,986,661		6,348,099			50,308,249
Long-lived assets		3,511,663		5,179,139		359,355		797,435		420,081		—			10,267,673

F-64

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of and for the year ended March 31, 2019:

	Yen in millions
	Japan		North America		Europe		Asia		Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		9,520,148		10,585,934		3,055,654		4,832,392		2,231,553		—			30,225,681
Inter-segment sales and transfers		7,105,213		231,313		183,197		680,639		101,890		(8,302,252	)		—
Total		16,625,361		10,817,247		3,238,851		5,513,031		2,333,443		(8,302,252	)		30,225,681
Operating expenses		14,933,686		10,702,732		3,113,983		5,055,542		2,242,333		(8,290,140	)		27,758,136
Operating income		1,691,675		114,515		124,868		457,489		91,110		(12,112	)		2,467,545
Assets		16,465,702		17,452,216		3,872,301		5,176,990		3,067,270		5,902,470			51,936,949
Long-lived assets		3,607,843		5,469,262		453,921		729,494		424,974		—			10,685,494

As of and for the year ended March 31, 2020:

	Yen in millions
	Japan		North America		Europe		Asia		Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		9,522,905		10,416,582		3,138,755		4,828,635		2,023,115		—			29,929,992
Inter-segment sales and transfers		6,938,616		222,166		222,123		510,021		89,387		(7,982,313	)		—
Total		16,461,521		10,638,748		3,360,878		5,338,656		2,112,502		(7,982,313	)		29,929,992
Operating expenses		14,893,543		10,368,119		3,210,333		4,967,657		2,021,778		(7,974,307	)		27,487,123
Operating income		1,567,978		270,629		150,545		370,999		90,724		(8,006	)		2,442,869
Assets		17,517,032		18,012,336		4,192,858		5,241,588		2,837,944		4,878,678			52,680,436
Long-lived assets		3,880,118		5,374,456		561,371		668,252		394,446		—			10,878,643

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

Revenues are attributed to geographies based on the country location of the parent company or the subsidiary that transacted the sale with the external customer.

There are no any individually material countries with respect to revenues, and long-lived assets included in other foreign countries.

Unallocated amounts included in assets represent assets held for corporate purposes, which mainly consist of cash and cash equivalents and marketable securities and other securities investments. Such corporate assets were ¥9,386,399 million, ¥9,329,020 million and ¥8,630,468 million, as of March 31, 2018, 2019 and 2020, respectively.

F-65

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Transfers between industry or geographic segments are made at terms and conditions in the ordinary course of business. In measuring the reportable segments’ income or losses, operating income consists of revenue less operating expenses.

Overseas revenues by destination -

The following information shows revenues that are attributed to countries based on location of customers, excluding customers in Japan. In addition to the disclosure requirements under U.S.GAAP, Toyota discloses this information in order to provide financial statements users with valuable information.

	Yen in millions
	For the years ended March 31,
	2018		2019		2020
North America		10,403,647		10,675,298		10,543,638
Europe		2,730,915		2,873,737		2,937,216
Asia		4,793,110		5,355,991		5,263,943
Other		4,186,666		3,944,854		3,936,572

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

F-66

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Certain financial statements data on non-financial services and financial services businesses -

The financial data below presents separately Toyota’s non-financial services and financial services businesses.

Balance sheets -

	Yen in millions
	March 31,
	2019			2020
Assets
Non-Financial Services Businesses
Current assets
Cash and cash equivalents		2,790,212			2,774,498
Marketable securities		1,108,540			648,982
Trade accounts and notes receivable, less allowance for doubtful accounts		2,489,105			2,155,943
Inventories		2,656,396			2,434,916
Prepaid expenses and other current assets		2,118,922			2,413,274
Total current assets		11,163,175			10,427,613
Investments and other assets		11,643,209			12,435,115
Property, plant and equipment		6,178,503			6,293,992
Total Non-Financial Services Businesses assets		28,984,887			29,156,720
Financial Services Business
Current assets
Cash and cash equivalents		784,492			1,416,020
Marketable securities		18,620			29,749
Finance receivables, net		6,647,771			6,614,171
Prepaid expenses and other current assets		997,116			1,205,912
Total current assets		8,447,999			9,265,852
Noncurrent finance receivables, net		10,281,118			10,423,858
Investments and other assets		808,592			861,594
Property, plant and equipment		4,506,991			4,307,533
Total Financial Services Business assets		24,044,700			24,858,837
Eliminations		(1,092,638	)		(1,335,121	)
Total assets		51,936,949			52,680,436

Assets in the non-financial services include unallocated corporate assets.

F-67

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Yen in millions
	March 31,
	2019			2020
Liabilities
Non-Financial Services Businesses
Current liabilities
Short-term borrowings		579,901			483,871
Current portion of long-term debt		173,379			156,664
Accounts payable		2,616,143			2,404,385
Accrued expenses		3,075,411			2,789,153
Income taxes payable		300,703			201,200
Other current liabilities		1,755,737			1,773,883
Total current liabilities		8,501,274			7,809,156
Long-term liabilities
Long-term debt		784,256			818,371
Accrued pension and severance costs		948,377			963,061
Other long-term liabilities		1,059,237			1,303,628
Total long-term liabilities		2,791,870			3,085,060
Total Non-Financial Services Businesses liabilities		11,293,144			10,894,216
Financial Services Business
Current liabilities
Short-term borrowings		5,113,888			5,432,180
Current portion of long-term debt		4,127,133			4,508,666
Accounts payable		39,187			39,226
Accrued expenses		161,105			151,857
Income taxes payable		20,295			16,917
Other current liabilities		997,842			982,892
Total current liabilities		10,459,450			11,131,738
Long-term liabilities
Long-term debt		9,974,516			10,006,491
Accrued pension and severance costs		15,029			15,566
Other long-term liabilities		722,279			725,769
Total long-term liabilities		10,711,824			10,747,826
Total Financial Services Business liabilities		21,171,274			21,879,564
Eliminations		(1,092,679	)		(1,335,195	)
Total liabilities		31,371,739			31,438,585
Mezzanine equity		498,073			504,169
Total Toyota Motor Corporation shareholders’ equity		19,348,152			20,060,618
Noncontrolling interests		718,985			677,064
Total shareholders’ equity		20,067,137			20,737,682
Total liabilities, mezzanine equity and shareholders’ equity		51,936,949			52,680,436

F-68

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Statements of income -

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Non-Financial Services Businesses
Net revenues		27,448,165			28,133,676			27,775,932
Costs and expenses
Cost of revenues		22,613,450			23,400,550			23,143,209
Selling, general and administrative		2,721,362			2,591,249			2,483,501
Total costs and expenses		25,334,812			25,991,799			25,626,710
Operating income		2,113,353			2,141,877			2,149,222
Other income (expense), net		222,326			(161,608	)		130,259
Income before income taxes and equity in earnings of affiliated companies		2,335,679			1,980,269			2,279,481
Provision for income taxes		738,763			580,031			618,252
Equity in earnings of affiliated companies		467,718			357,527			260,149
Net income		2,064,634			1,757,765			1,921,378
Less - Net income attributable to noncontrolling interests		(89,533	)		(97,500	)		(67,559	)
Net income attributable to Toyota Motor Corporation - Non-Financial Services Businesses		1,975,101			1,660,265			1,853,819
Financial Services Business
Net revenues		2,017,008			2,153,547			2,190,559
Costs and expenses
Cost of revenues		1,320,348			1,418,636			1,395,211
Selling, general and administrative		411,114			412,090			503,165
Total costs and expenses		1,731,462			1,830,726			1,898,376
Operating income		285,546			322,821			292,183
Other income (expense), net		(794	)		(17,658	)		(17,103	)
Income before income taxes and equity in earnings of affiliated companies		284,752			305,163			275,080
Provision for income taxes		(234,356	)		79,903			65,164
Equity in earnings of affiliated companies		2,365			2,539			11,003
Net income		521,473			227,799			220,919
Less - Net income attributable to noncontrolling interests		(2,589	)		(5,214	)		1,413
Net income attributable to Toyota Motor Corporation - Financial Services Business		518,884			222,585			222,332
Eliminations		(2	)		23			32
Net income attributable to Toyota Motor Corporation		2,493,983			1,882,873			2,076,183

F-69

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Statements of cash flows -

	Yen in millions									Yen in millions
	For the year ended March 31, 2018									For the year ended March 31, 2019
	Non-Financial Services Businesses			Financial Services Business			Consolidated			Non-Financial Services Businesses			Financial Services Business			Consolidated
Cash flows from operating activities
Net income		2,064,634			521,473			2,586,106			1,757,765			227,799			1,985,587
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		1,010,972			723,061			1,734,033			1,033,528			758,847			1,792,375
Provision (reversal) for doubtful accounts and credit losses		(74	)		76,143			76,069			(1,375	)		81,440			80,065
Pension and severance costs, less payments		5,027			(741	)		4,286			30,477			1,168			31,645
Losses on disposal of fixed assets		35,010			279			35,289			33,676			2,226			35,902
Unrealized losses (gains) on securities		459			387			846			338,626			846			339,472
Deferred income taxes		64,143			(302,103	)		(237,961	)		(110,346	)		23,742			(86,594	)
Equity in earnings of affiliated companies		(467,718	)		(2,365	)		(470,083	)		(357,527	)		(2,539	)		(360,066	)
Changes in operating assets and liabilities, and other		205,434			312,828			494,543			(17,488	)		15,557			(51,789	)
Net cash provided by operating activities		2,917,887			1,328,962			4,223,128			2,707,336			1,109,086			3,766,597
Cash flows from investing activities
Additions to finance receivables		—			(25,153,088	)		(15,058,516	)		—			(26,000,249	)		(15,884,610	)
Collection of and proceeds from sales of finance receivables		—			24,117,335			14,046,312			—			24,925,930			14,859,103
Additions to fixed assets excluding equipment leased to others		(1,276,788	)		(14,329	)		(1,291,117	)		(1,435,964	)		(16,761	)		(1,452,725	)
Additions to equipment leased to others		(155,114	)		(2,152,476	)		(2,307,590	)		(137,314	)		(2,148,848	)		(2,286,162	)
Proceeds from sales of fixed assets excluding equipment leased to others		70,755			1,065			71,820			63,955			1,482			65,437
Proceeds from sales of equipment leased to others		63,402			1,147,870			1,211,272			60,657			1,324,417			1,385,074
Purchases of marketable securities and security investments		(2,273,805	)		(779,111	)		(3,052,916	)		(1,737,107	)		(103,248	)		(1,840,355	)
Proceeds from sales of and maturity of marketable securities and security investments		1,762,189			761,349			2,523,538			2,255,635			443,163			2,698,798
Payment for additional investments in affiliated companies, net of cash acquired		(576	)		—			(576	)		5,010			—			5,010
Changes in investments and other assets, and other		260,015			(106,597	)		197,681			(268,946	)		(4,130	)		(246,811	)
Net cash used in investing activities		(1,549,922	)		(2,177,982	)		(3,660,092	)		(1,194,074	)		(1,578,244	)		(2,697,241	)
Cash flows from financing activities
Proceeds from issuance of long-term debt		212,387			4,666,579			4,793,939			286,085			4,747,506			5,000,921
Payments of long-term debt		(170,072	)		(4,314,294	)		(4,452,338	)		(142,556	)		(4,336,250	)		(4,442,232	)
Increase (decrease) in short-term borrowings		(122,222	)		461,052			347,738			49,161			144,277			164,282
Dividends paid to Toyota Motor Corporation class shareholders		(6,194	)		—			(6,194	)		(8,690	)		—			(8,690	)
Dividends paid to Toyota Motor Corporation common shareholders		(620,698	)		—			(620,698	)		(636,116	)		—			(636,116	)
Dividends paid to noncontrolling interests		(63,764	)		—			(63,764	)		(69,367	)		—			(69,367	)
Reissuance (repurchase) of treasury stock		(447,818	)		—			(447,818	)		(549,637	)		—			(549,637	)
Net cash provided by (used in) financing activities		(1,218,381	)		813,337			(449,135	)		(1,071,120	)		555,533			(540,839	)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents		(16,124	)		(27,464	)		(43,588	)		(42,454	)		813			(41,641	)
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents		133,460			(63,147	)		70,313			399,688			87,188			486,876
Cash and cash equivalents and restricted cash and cash equivalents at beginning of year		2,257,064			892,262			3,149,326			2,390,524			829,115			3,219,639
Cash and cash equivalents and restricted cash and cash equivalents at end of year		2,390,524			829,115			3,219,639			2,790,212			916,303			3,706,515

F-70

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Yen in millions
	For the year ended March 31, 2020
	Non-Financial Services Businesses			Financial Services Business			Consolidated
Cash flows from operating activities
Net income		1,921,378			220,919			2,142,329
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		861,673			743,710			1,605,383
Provision (reversal) for doubtful accounts and credit losses		5,689			137,293			142,982
Pension and severance costs, less payments		14,880			819			15,699
Losses on disposal of fixed assets		54,549			2,364			56,913
Unrealized losses (gains) on securities		21,069			(987	)		20,082
Deferred income taxes		193,438			(1,305	)		192,147
Equity in earnings of affiliated companies		(260,149	)		(11,003	)		(271,152	)
Changes in operating assets and liabilities, and other		(305,705	)		(46,610	)		(313,740	)
Net cash provided by operating activities		2,506,822			1,045,200			3,590,643
Cash flows from investing activities
Additions to finance receivables		—			(26,668,185	)		(16,896,588	)
Collection of and proceeds from sales of finance receivables		—			25,557,953			15,667,462
Additions to fixed assets excluding equipment leased to others		(1,377,238	)		(30,594	)		(1,407,832	)
Additions to equipment leased to others		(155,601	)		(2,031,698	)		(2,187,299	)
Proceeds from sales of fixed assets excluding equipment leased to others		47,488			1,263			48,751
Proceeds from sales of equipment leased to others		49,913			1,341,302			1,391,215
Purchases of marketable securities and security investments		(2,236,585	)		(176,502	)		(2,413,087	)
Proceeds from sales of and maturity of marketable securities and security investments		2,245,119			125,287			2,370,406
Payment for additional investments in affiliated companies, net of cash acquired		—			(14,763	)		(14,763	)
Changes in investments and other assets, and other		(18,895	)		(20,037	)		290,874
Net cash used in investing activities		(1,445,799	)		(1,915,974	)		(3,150,861	)
Cash flows from financing activities
Proceeds from issuance of long-term debt		235,080			5,466,618			5,691,499
Payments of long-term debt		(130,695	)		(4,335,145	)		(4,424,923	)
Increase (decrease) in short-term borrowings		51,406			520,468			291,623
Dividends paid to Toyota Motor Corporation class shareholders		(11,186	)		—			(11,186	)
Dividends paid to Toyota Motor Corporation common shareholders		(618,801	)		—			(618,801	)
Dividends paid to noncontrolling interests		(54,945	)		—			(54,945	)
Reissuance (repurchase) of treasury stock		(476,129	)		—			(476,129	)
Net cash provided by (used in) financing activities		(1,005,270	)		1,651,941			397,138
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents		(71,467	)		(59,778	)		(131,245	)
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents		(15,714	)		721,389			705,675
Cash and cash equivalents and restricted cash and cash equivalents at beginning of year		2,790,212			916,303			3,706,515
Cash and cash equivalents and restricted cash and cash equivalents at end of year		2,774,498			1,637,692			4,412,190

F-71

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

26. Net revenues

(1) Summary by business segments and products

The table below shows Toyota’s net revenues from external customers by business and by product category.

	Yen in millions
	For the year ended March 31, 2019		For the year ended March 31, 2020
Sales of products
Automotive
Vehicles		23,066,190	22,852,916
Parts and components for overseas production		625,483	603,928
Parts and components for after service		2,093,437	2,103,478
Other		1,249,382	1,274,163
Total automotive		27,034,492	26,834,485
All other		1,070,846	925,264
Total sales of products		28,105,338	27,759,749
Financial services		2,120,343	2,170,243
Total net revenues		30,225,681	29,929,992

The majority of sales of products are revenues recognized from contracts with customers based on ASC 606 “Revenue from Contracts with Customers,” and receivables related to such revenues are recognized as “Trade accounts and notes receivable, less allowance for doubtful accounts.”

For the year ended March 31, 2019 and 2020, ¥84,230 million and ¥85,192 million of financial service revenues were accounted for under ASC 606 “Revenue from Contracts with Customers.”

The breakdown of income from leases included in financial service revenues is as follows;

	Yen in millions
	For the year ended March 31, 2019		For the year ended March 31, 2020
Finance leases
Financial income related to net lease investment		91,703		98,865
Operating leases		1,056,080		1,051,804
Total		1,147,783		1,150,669

(2) Contract liabilities

Contract liabilities consist of the following:

	Yen in millions
	March 31, 2019		March 31, 2020
Contract liabilities		675,018		691,954

Contract liabilities are mainly related to advances received from customers. On the consolidated financial statements, contract liabilities are included in “Other current liabilities” or “Other long-term liabilities.” For the year ended March 31, 2019 and 2020, the amount of revenue recognized which were included in the contract liability balance as of April 1, 2018 and 2019 were ¥336,206 million and ¥366,655 million.

F-72

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(3) Performance obligations

As of March 31, 2020, which is the end of the reporting period, the aggregate amount of transaction prices allocated to unsatisfied performance obligations related to contracts that have original expected durations in excess of one year was ¥589,844 million.

The main contents of unsatisfied performance obligations related to contracts are insurance revenues and maintenance revenues.

For insurance revenues, Toyota receives payment agreed upon in the contract at the inception of the contract, and revenue is recognized over the term of the contract, which ranges from 3 to 120 months. As of March 31, 2020, the unsatisfied performance obligations related to insurance revenues was ¥223,754 million, and Toyota expects to recognize as revenue ¥65,168 million in fiscal 2021, and ¥158,586 million thereafter.

For maintenance revenues, Toyota receives payment agreed upon in the contract at the inception of the contract, and revenue is recognized over the term of the contract, which ranges from 18 to 84 months.

Unsatisfied performance obligations for sales of products related to contracts that have an original expected duration of one year or less have been excluded from this disclosure.

F-73

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

27. Per share amounts:

Reconciliations of the differences between basic and diluted net income attributable to Toyota Motor Corporation per common share for the years ended March 31, 2018, 2019 and 2020 are as follows:

	Yen in millions			Thousands of shares		Yen
	Net income attributable to Toyota Motor Corporation			Weighted- average common shares		Net income attributable to Toyota Motor Corporation per common share
For the year ended March 31, 2018
Net income attributable to Toyota Motor Corporation		2,493,983
Accretion to Mezzanine equity		(4,849	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders		(7,442	)
Basic net income attributable to Toyota Motor Corporation per common share		2,481,692			2,947,365		842.00
Effect of dilutive securities
Model AA Class Shares		12,291			47,100
Assumed exercise of dilutive stock options		(4	)		301
Diluted net income attributable to Toyota Motor Corporation per common share		2,493,979			2,994,766		832.78
For the year ended March 31, 2019
Net income attributable to Toyota Motor Corporation		1,882,873
Accretion to Mezzanine equity		(4,850	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders		(9,938	)
Basic net income attributable to Toyota Motor Corporation per common share		1,868,085			2,871,534		650.55
Effect of dilutive securities
Model AA Class Shares		14,788			47,100
Assumed exercise of dilutive stock options		(0	)		40
Diluted net income attributable to Toyota Motor Corporation per common share		1,882,873			2,918,674		645.11
For the year ended March 31, 2020
Net income attributable to Toyota Motor Corporation		2,076,183
Accretion to Mezzanine equity		(4,850	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders		(12,434	)
Basic net income attributable to Toyota Motor Corporation per common share		2,058,899			2,798,918		735.61
Effect of dilutive securities
Model AA Class Shares		17,284			47,100
Assumed exercise of dilutive stock options		—			—
Diluted net income attributable to Toyota Motor Corporation per common share		2,076,183			2,846,018		729.50

In addition to the disclosure requirements under U.S.GAAP, Toyota discloses the information below in order to provide financial statements users with valuable information.

F-74

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table shows Toyota Motor Corporation shareholders’ equity per share as of March 31, 2019 and 2020. Toyota Motor Corporation shareholders’ equity per share amounts are calculated by dividing Toyota Motor Corporation shareholders’ equities’ amount at the end of each period by the number of shares issued and outstanding, excluding treasury stock at the end of the corresponding period.

	Yen in millions		Thousands of shares		Yen
	Toyota Motor Corporation shareholders’ equity		Common shares issued and outstanding at the end of the year (excluding treasury stock)		Toyota Motor Corporation shareholders’ equity per share
As of March 31, 2019		19,348,152		2,832,439		6,830.92
As of March 31, 2020		20,060,618		2,766,153		7,252.17

28. Fair value measurements:

In accordance with U.S.GAAP, Toyota classifies fair value into three levels of input as follows which are used to measure it.

Level 1:	Quoted prices in active markets for identical assets or liabilities
Level 2:	Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; valuation of assets or liabilities using inputs, other than quoted prices, that are observable
Level 3:	Valuation of assets or liabilities using unobservable inputs which reflect the reporting entity’s assumptions

The following table summarizes the fair values of the assets and liabilities measured at fair value on a recurring basis as of March 31, 2019 and 2020. Transfers between levels of the fair value are recognized at the end of their respective reporting periods:

	Yen in millions
	March 31, 2019
	Level 1		Level 2			Level 3		Total
Assets
Cash equivalents		249,193		594,200			—		843,393
Time deposits		—		520,000			—		520,000
Marketable securities and other securities investments
Public and corporate bonds		4,378,543		1,452,475			15,171		5,846,189
Common stocks		2,154,951		—			—		2,154,951
Other		189,389		6,007			—		195,396
Investments measured at net asset value		—		—			—		98,451
Derivative financial instruments		—		200,256			77		200,333
Total		6,972,076		2,772,938			15,248		9,858,713
Liabilities
Derivative financial instruments		—		(231,915	)		—		(231,915	)
Total		—		(231,915	)		—		(231,915	)

F-75

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Yen in millions
	March 31, 2020
	Level 1		Level 2			Level 3		Total
Assets
Cash equivalents		711,106		592,200			—		1,303,306
Time deposits		—		350,000			—		350,000
Marketable securities and other securities investments
Public and corporate bonds		3,214,773		2,183,695			12,831		5,411,299
Common stocks		1,895,690		—			—		1,895,690
Other		194,085		27,477			—		221,562
Investments measured at net asset value		—		—			—		97,687
Derivative financial instruments		—		503,826			—		503,826
Total		6,015,654		3,657,198			12,831		9,783,370
Liabilities
Derivative financial instruments		—		(437,008	)		—		(437,008	)
Total		—		(437,008	)		—		(437,008	)

Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

The following is description of the assets and liabilities measured at fair value, information about the valuation techniques used to measure fair value, key inputs and significant assumptions:

Cash equivalents and time deposits -

Cash equivalents include money market funds and other investments with original maturities of three months or less. Cash equivalents classified in Level 2 include negotiable certificate of deposit with original maturities of three months or less. These are measured at fair value using primarily observable interest rates in the market. Time deposits consist of negotiable certificates of deposit with original maturities over three months. These are measured at fair value using primarily observable interest rates in the market.

Marketable securities and other securities investments -

Marketable securities and other securities investments include public and corporate bonds, common stocks and other investments. Public and corporate bonds include government bonds. Japanese bonds and foreign bonds including U.S., European and other bonds represent 17% and 83% (as of March 31, 2019) and 20% and 80% (as of March 31, 2020) of public and corporate bonds, respectively. Listed stocks on the Japanese stock markets represent 91% and 90% of common stocks as of March 31, 2019 and 2020, respectively. Toyota uses primarily quoted market prices for identical assets to measure fair value of these securities.

Derivative financial instruments -

See note 21 to the consolidated financial statements about derivative financial instruments. Toyota primarily estimates the fair value of derivative financial instruments using industry-standard valuation models that require observable inputs including interest rates and foreign exchange rates, and the contractual terms. The usage of these models does not require significant judgment to be applied. These derivative financial instruments are classified in Level 2. In other certain cases when market data is not available, key inputs to the fair value

F-76

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

measurement include quotes from counterparties, and other market data. Toyota assesses the reasonableness of changes of the quotes using observable market data. These derivative financial instruments are classified in Level 3. Toyota’s derivative fair value measurements consider assumptions about counterparty and Toyota’s own non-performance risk, using such as credit default probabilities.

The following table summarizes the changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the periods ended March 31, 2018, 2019 and 2020:

	Yen in millions
	For the year ended March 31, 2018
	Marketable securities and other securities investments			Derivative financial instruments			Total
Balance at beginning of year		8,947			(7,522	)		1,425
Total gains (losses)
Included in income (loss)		17			805			822
Included in other comprehensive income (loss)		(12	)		—			(12	)
Purchases and issuances		3,860			—			3,860
Settlements		(4,739	)		4,320			(419	)
Other		(585	)		185			(400	)
Balance at end of year		7,488			(2,212	)		5,276
	Yen in millions
	For the year ended March 31, 2019
	Marketable securities and other securities investments			Derivative financial instruments			Total
Balance at beginning of year		7,488			(2,212	)		5,276
Total gains (losses)
Included in income (loss)		1			3,169			3,170
Included in other comprehensive income (loss)		82			—			82
Purchases and issuances		5,254			—			5,254
Settlements		(2,875	)		(784	)		(3,659	)
Other		337			(96	)		241
Balance at end of year		10,287			77			10,364
	Yen in millions
	For the year ended March 31, 2020
	Marketable securities and other securities investments			Derivative financial instruments			Total
Balance at beginning of year		10,287			77			10,364
Total gains (losses)
Included in income (loss)		(346	)		—			(346	)
Included in other comprehensive income (loss)		(671	)		—			(671	)
Purchases and issuances		5,305			—			5,305
Settlements		(1,547	)		(77	)		(1,624	)
Other		(197	)		—			(197	)
Balance at end of year		12,831			—			12,831

F-77

TOYOTA MOTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

“Included in income (loss)” in marketable securities and other securities investments and derivative financial instruments are included in “Other income (loss), net” and “Cost of financing operations” in the accompanying consolidated statements of income, respectively.

In the reconciliation table above, derivative financial instruments are presented net of assets and liabilities. “Other” includes the currency translation adjustments for the years ended March 31, 2018, 2019 and 2020.

As of March 31, 2020, the Level 3 assets and liabilities measured at fair value on a recurring basis are not significant.

Certain assets and liabilities are measured at fair value on a nonrecurring basis. During the years ended March 31, 2019 and 2020, Toyota measured certain finance receivables at fair value of ¥58,611 million and ¥50,850 million based on the collateral value, resulting in loss of ¥3,305 million and gain of ¥3,761 million, respectively. This fair value measurement on a nonrecurring basis is classified in Level 3. See note 22 to the consolidated financial statements for the fair value measurement. These Level 3 financial assets are not significant.

29. Significant subsequent events:

Plant suspensions -

For reasons such as government directives as well as anticipated reduced demand for its vehicles due to the global spread of COVID-19, Toyota had continued after April 2020 to suspend temporarily the production of automobiles and components at selected plants in Japan and overseas. Production is subsequently being resumed. It is uncertain how this suspension will affect Toyota’s financial results.

Borrowing funds -

Taking into consideration its funding plans, which take into account the risk that COVID-19 will have a prolonged impact, and market trends, in April 2020 Toyota entered into loan agreements and borrowed funds in an aggregate amount of ¥1,250,000 million with multiple domestic financial institutions. The interest rates under the loan agreements are approximately the same as prevailing market rates, and the tenor of the loans are around one year. None of these agreements has collateral or other material covenant provisions.

F-78

ITEM 19. EXHIBITS

Index to Exhibits

1.1	Amended and Restated Articles of Incorporation of the Registrant (English translation)
1.2	Amended and Restated Regulations of the Board of Directors of the Registrant (English translation) (incorporated by reference to Exhibit 1.2 to Toyota’s Annual Report on Form 20-F for the fiscal year ended March 31, 2019, filed with the SEC on June 21, 2019 (file no. 001-14948))
1.3	Amended and Restated Regulations of the Audit & Supervisory Board of the Registrant (English translation) (incorporated by reference to Exhibit 1.3 to Toyota’s Annual Report on Form 20-F for the fiscal year ended March 31, 2016, filed with the SEC on June 24, 2016 (file no. 001-14948))
2.1	Amended and Restated Share Handling Regulations of the Registrant (English translation) (incorporated by reference to Exhibit 2.1 to Toyota’s Annual Report on Form 20-F for the fiscal year ended March 31, 2015, filed with the SEC on June 24, 2015 (file no. 001-14948))
2.2	Form of Deposit Agreement among the Registrant, The Bank of New York (predecessor of The Bank of New York Mellon), as depositary, and the owners and beneficial owners from time to time of American Depositary Receipts, including the form of American Depositary Receipt (incorporated by reference to Exhibit 1 to Toyota’s Registration Statement on Form F-6, filed with the SEC on November 7, 2006 (file no. 333-138477))
2.3	Form of ADR (included in Exhibit 2.2)
2.4	Description of Securities
8.1	List of Principal Subsidiaries (See “Organizational Structure” in “Item 4. Information on the Company”)
11.1	Code of Ethics of the Registrant applicable to its members of the board of directors and operating officers, including its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions (English translation) (incorporated by reference to Exhibit 11.1 to Toyota’s Annual Report on Form 20-F for the fiscal year ended March 31, 2019, filed with the SEC on June 21, 2019 (file no. 001-14948))
12.1	Certifications of the Registrant’s President and Member of the Board, as well as Operating Officer, pursuant to Section 302 of the Sarbanes-Oxley Act
13.1	Certifications of the Registrant’s President and Member of the Board, as well as Operating Officer, pursuant to Section 906 of the Sarbanes-Oxley Act
15.1	Consent of Independent Registered Public Accounting Firm
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	The cover page for the Company’s Annual Report on From 20-F for the year ended March 31, 2020, has been formatted in Inline XBRL

137

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

TOYOTA MOTOR CORPORATION
By:	/s/ Kenta Kon
Name:	Kenta Kon
Title:	Operating Officer

Date: June 24, 2020

EX-1.1

Exhibit 1.1

ARTICLES OF INCORPORATION OF TOYOTA MOTOR CORPORATION

(As amended on June 11, 2020)

CHAPTER I. GENERAL PROVISIONS

Article 1. (Trade Name)

The name of the Corporation shall be “Toyota Jidosha Kabushiki Kaisha” to be expressed in English as “TOYOTA MOTOR CORPORATION”.

Article 2. (Purpose)

The purpose of the Corporation shall be to engage in the following businesses:

(1) the manufacture, sale, leasing and repair of motor vehicles, industrial vehicles, ships, aircraft, other transportation machinery and apparatus, spacecraft and space machinery and apparatus, and parts thereof;

(2) the manufacture, sale, leasing and repair of industrial machinery and apparatus and other general machinery and apparatus, and parts thereof;

(3) the manufacture, sale, leasing and repair of electrical machinery and apparatus, and parts thereof;

(4) the manufacture, sale, leasing and repair of measuring machinery and apparatus, and medical machinery and apparatus, and parts thereof;

(5) the manufacture and sale of ceramics and products of synthetic resins, and materials thereof;

(6) the manufacture, sale and repair of construction materials and equipment, furnishings and fixtures for residential buildings;

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

(8) the sale, purchase, leasing, brokerage and management of real estate;

(9) the service of information processing, information communications and information supply, and the development, sale and leasing of software;

(10) the design and development of product sales systems that utilize networks such as the Internet; sale, leasing, maintenance of computers included within such systems, and sales of products by utilizing such systems;

(11) the inland transportation, marine transportation, air transportation, stevedoring, warehousing and tourism businesses;

(12) the printing, publishing, advertising and publicity, general leasing, security and workers dispatch businesses;

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

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

(15) the non-life insurance agency business and life insurance agency business;

(16) the production and processing by using biotechnology of agricultural products including trees, and the sale of such products;

(17) power generation and the supply and sale of electric power

(18) the sale of goods related to each of the preceding items and mineral oil;

(19) the conducting of engineering, consulting, invention and research relating to each of the preceding items and the utilization of such invention and research; and

(20) any businesses incidental to or related to any of the preceding items.

Article 3. (Location of Principal Office)

The principal office of the Corporation shall be located in Toyota City, Aichi Prefecture, Japan.

Article 4. (Public Notices)

Public notices of the Corporation shall be given electronically; provided, however, that in the case that an electronic public notice is impracticable due to an accident or any other unavoidable reason, public notices of the Corporation shall be given in the newspaper “The Nihon Keizai Shimbun”.

CHAPTER II. SHARES

Article 5. (Total Number of Authorized Shares, etc.)

The total number of shares which the Corporation is authorized to issue shall be ten billion (10,000,000,000), and the total number of authorized shares in each class of class shares shall be as set forth below; provided, however, that the aggregate number of shares authorized to be issued with respect to First Series Model AA Class Shares through Fifth Series Model AA Class Shares shall not exceed one hundred fifty million (150,000,000).

Common Shares:

ten billion (10,000,000,000) shares

First Series Model AA Class Shares:

fifty million (50,000,000) shares

Second Series Model AA Class Shares:

fifty million (50,000,000) shares

Third Series Model AA Class Shares:

fifty million (50,000,000) shares

Fourth Series Model AA Class Shares:

fifty million (50,000,000) shares

Fifth Series Model AA Class Shares:

fifty million (50,000,000) shares

Article 6. (Number of Shares Constituting One Unit (tangen) and Rights to Shares

Constituting Less than One Unit (tangen))

1.    The number of shares constituting one unit (tangen) of shares of the Corporation shall be one hundred (100) with respect to Common Shares and each class of Model AA Class Shares.

2.    The shareholders of the Corporation are not entitled to exercise any rights to shares constituting less than one unit (tangen) of shares held by the shareholders, other than the following:

(1) the rights provided for in each Item of Article 189, Paragraph 2 of the Companies Act (Kaisha-hou); and

(2) the rights provided for in Article 166, Paragraph 1 of the Companies Act, in respect of the right provided for in Article 18 of the Articles of Incorporation.

Article 7. (Acquisition of Own Shares)

The Corporation may acquire its own shares by a resolution of the Board of Directors in accordance with the provisions of Article 165, Paragraph 2 of the Companies Act.

Article 8. (Absence of seller put options when the Corporation acquires Model AA Class Shares)

If the Corporation decides to acquire some or all of the Model AA Class Shares held by any holder of Model AA Class Shares (“Model AA Class Shareholder”) under an agreement with such Model AA Class Shareholder pursuant to a resolution of the general meeting of shareholders, and further decides to notify such Model AA Class Shareholder of matters prescribed in any item of Article 157, Paragraph 1 of the Companies Act, the provisions of Article 160, Paragraphs 2 and 3 of such act shall not apply.

Article 9. (Transfer Agent)

1.    The Corporation shall have a transfer agent (Kabunushimeibo-Kanrinin).

2.    The transfer agent and the location of its office shall be designated by a resolution of the Board of Directors, and public notice thereof shall be given.

The register of shareholders and the register of stock acquisition rights shall be kept at the office of the transfer agent. The entry or recording into the register of shareholders and the register of stock acquisition rights, the purchase of shares constituting less than one unit (tangen) and any other matters related to the shares and stock acquisition rights shall be handled by the transfer agent and not by the Corporation.

Article 10. (Share Handling Regulations)

The procedures for and fees for the entry or recording into the register of shareholders and the register of stock acquisition rights, purchasing shares constituting less than one unit (tangen) and any other matters relating to the handling of shares and stock acquisition rights shall be subject to the Share Handling Regulations established by the Board of Directors.

Article 11. (Record Date)

1.    The Corporation shall deem any shareholder entered or recorded in the final register of shareholders as of March 31 in such year to be a shareholder entitled to exercise its rights at the ordinary general meeting of shareholders for that business year.

2.    The preceding paragraph shall apply mutatis mutandis to class meetings, where the relevant class meeting is to be held on the same date as an ordinary general meeting of shareholders.

3.    In addition to the case provided for in the preceding two (2) paragraphs, the Corporation may, after giving prior public notice, fix a date as the record date, where it deems it necessary to do so.

CHAPTER III. MODEL AA CLASS SHARES

Article 12. (AA Dividends)

1.    In the event that the Corporation pays dividends from surplus as provided for in Article 46, Paragraph 1 of these Articles, it shall pay in cash year-end dividends from surplus in the amount specified below (“AA Dividends”) to Model AA Class Shareholders or registered pledgees of Model AA Class Shares (“AA Registered Pledgees”) entered or recorded in the final register of shareholders as of the record date for the dividends, in preference to holders of Common Shares (“Common Shareholders”) or registered pledgees of Common Shares (“Common Share Registered Pledgees”), respectively; provided that if AA Interim Dividends, as provided for in Article 13 of these Articles, have been paid during the fiscal year in which the record date falls, the amount of the AA Interim Dividends so paid shall be deducted from such AA Dividends.

First Series Model AA Class Shares through Fifth Series Model AA Class Shares:

An amount per Model AA Class Share calculated by multiplying the amount per relevant Model AA Class Share paid to the Corporation as consideration by a rate to be determined by the Board of Directors prior to the issuance of each Model AA Class Share (subject to a maximum of 5%).

2.    If the amount of the dividends from surplus paid in cash to Model AA Class Shareholders or AA Registered Pledgees is less than the prescribed amount of AA Dividends in any fiscal year, the amount of the shortfall per Model AA Class Share (“Cumulative Unpaid Dividends”) shall be carried forward and accumulated in the following fiscal year and thereafter. With respect to the Cumulative Unpaid Dividends, dividends from surplus shall be paid in cash to Model AA Class Shareholders or AA Registered Pledgees until such payment reaches the amount of the Cumulative Unpaid Dividends per Model AA Class Share, in preference to the payment of dividends from surplus as provided in the preceding paragraph or Article 13 of these Articles.

3.    No distribution of dividends from surplus shall be made to any Model AA Class Shareholder or AA Registered Pledgee in excess of the amount of AA Dividends, except for a distribution from surplus in the process of a corporate split (kyushu-bunkatsu) by the Corporation pursuant to Article 758, Item 8 (ii) or Article 760, Item 7 (ii) of the Companies Act, or a distribution from surplus in the process of a corporate split (shinsetsu-bunkatsu) by the Corporation pursuant to Article 763, Paragraph 1, Item 12 (ii) or Article 765 Paragraph 1, Item 8 (ii) of such act, in which case, the distribution from surplus shall be made to all Model AA Class Shareholders or AA Registered Pledgees simultaneously and in the same proportion as that made to any Common Shareholders or Common Share Registered Pledgees.

Article 13. (AA Interim Dividends)

In the event that the Corporation pays dividends from surplus as provided in Article 46, Paragraph 2 of these Articles, the Corporation shall pay an amount equivalent to one-half of the prescribed amount of AA Dividends in cash as interim dividends (“AA Interim Dividends”) per Model AA Class Share to Model AA Class Shareholders or AA Registered Pledgees entered or recorded in the final register of shareholders as of the record date with respect to such AA Interim Dividends, in preference to Common Shareholders or Common Share Registered Pledgees.

Article 14. (Distribution of residual assets)

1.    In the event of a distribution by the Corporation of its residual assets, the Corporation shall pay the amount set forth below in cash to Model AA Class Shareholders or AA Registered Pledgees, in preference to Common Shareholders or Common Share Registered Pledgees, respectively.

First Series Model AA Class Shares through Fifth Series Model AA Class Shares:

An amount per Model AA Class Share determined by resolution of the board of directors or an amount calculated under a formula determined by resolution of the board of directors, in either case based on the amount per relevant Model AA Class Share paid to the Corporation as consideration (“Base Price”).

2.    No distribution of residual assets shall be made to Model AA Class Shareholders or AA Registered Pledgees other than as provided in the preceding item.

Article 15. (Voting rights)

Model AA Class Shareholders shall have voting rights exercisable at general meetings of shareholders of the Corporation.

Article 16. (Consolidation of shares, stock split or gratis allotment of shares)

1.    The Corporation shall effect any consolidation of shares or stock split simultaneously and in the same proportion with respect to Common Shares and Model AA Class Shares.

2.    If the Corporation grants its shareholders rights to receive any allotment of shares offered for subscription or stock acquisition rights offered for subscription, the Corporation shall grant Common Shareholders rights to receive Common Shares or stock acquisition rights for Common Shares and shall grant Model AA Class Shareholders rights to receive Model AA Class Shares of the Series held by such shareholders or stock acquisition rights for such Model AA Class Shares, as the case may be, simultaneously and in the same proportion.

3.    If the Corporation makes a gratis allotment to its shareholders of shares or stock acquisition rights, the Corporation shall make the gratis allotment to Common Shareholders of Common Shares or stock acquisition rights for Common Shares, and shall make the gratis allotment to Model AA Class Shareholders of Model AA Class Shares of the Series held by such shareholders or stock acquisition rights for such Model AA Class Shares, as the case may be, simultaneously and in the same proportion.

Article 17. (Shareholder’s conversion right into Common Shares)

Model AA Class Shareholders may, at certain times specified therefor in resolutions of the board of directors to be adopted upon issuance of First Series Model AA Class Shares through Fifth Series Model AA Class Shares, demand that the Corporation acquire some or all of the relevant Model AA Class Shares held by such Model AA Class Shareholders in exchange for Common Shares, in numbers determined by formula specified in such resolutions. Any fractions of less than one share among Common Shares to be delivered in exchange for such Model AA Class Shares shall be disregarded, in which case payment of money, as provided in Article 167, Paragraph 3 of the Companies Act, shall not be made.

Article 18. (Shareholder’s cash put option)

Model AA Class Shareholders may, at certain times specified as put option periods in resolutions of the board of directors to be adopted upon issuance of First Series Model AA Class Shares through Fifth Series Model AA Class Shares, demand that the Corporation acquire some or all of the relevant Model AA Class Shares in exchange for cash in an amount equivalent to the Base Price. If the demand for acquisition exceeds the amount available for distribution as of the date of demand for such acquisition, as specified in Article 461, Paragraph 2 of the Companies Act, Model AA Class Shares to be acquired by the Corporation shall be determined by resolution of its board of directors, and the cash put option in respect of Model AA Class Shares not so acquired shall be deemed not to have been exercised.

Article 19. (Corporation’s cash call option)

After the lapse of the period specified in resolutions of the board of directors to be adopted upon issuance of First Series Model AA Class Shares through Fifth Series Model AA Class Shares following the issue of the relevant Model AA Class Shares, at an acquisition date separately determined by resolution of the board of directors of the Corporation, the Corporation may acquire all of the relevant Series of Model AA Class Shares in exchange for cash in an amount equivalent to the Base Price.

Article 20. (Priority)

Each Model AA Class Share shall rank pari passu with every other Model AA Class Share in respect of the AA Dividends, the AA Interim Dividends, the distributions from surplus provided for in the exceptions to Article 12, Paragraph 3, and the distribution of residual assets.

Article 21. (Restrictions on transfer)

1.    Acquisition of Model AA Class Shares by means of transfer will require the approval of the board of directors of the Corporation.

2.    In the event that a tender offer as provided in Article 27-2, Paragraph 6 of the Financial Instruments and Exchange Act is commenced for Model AA Class Shares and any Model AA Class Shareholder tenders its Model AA Class Shares, upon the delivery of Model AA Class Shares or other transfer upon settlement, the Board of Directors shall be deemed to have given approval as set forth in the preceding paragraph.

Article 22. (Prescription Period)

The provisions of Article 46, Paragraph 4 and Article 47 of these Articles shall apply mutatis mutandis to the payment of AA Dividends and AA Interim Dividends.

CHAPTER IV. GENERAL MEETINGS OF SHAREHOLDERS

Article 23. (Ordinary General Meetings and Extraordinary General Meetings of Shareholders)

1.    The ordinary general meeting of shareholders of the Corporation shall be convened in June of each year.

Extraordinary general meetings of shareholders may be called whenever necessary.

2.    Each general meeting of shareholders may be convened at the place where the principal office of the Corporation is located, or at a place adjacent thereto, or in Nagoya City.

Article 24. (Resolutions)

1.    All resolutions of a general meeting of shareholders shall be adopted by a majority of the votes of the shareholders present at the meeting who are entitled to vote, unless otherwise provided by laws and regulations or these Articles of Incorporation of the Corporation.

2.    Special resolutions as specified by Article 309, Paragraph 2 of the Companies Act shall be adopted by not less than two-thirds (2/3) of the votes of the shareholders present at the meeting who hold shares representing in aggregate not less than one-third (1/3) of the voting rights of all shareholders who are entitled to vote.

Article 25. (Chairman of General Meeting)

1.    The Chairman of the Board or the President of the Corporation shall preside as chairman at a general meeting of shareholders.

2.    In the event that the positions of both the Chairman of the Board and the President are vacant or that both of them are prevented from so presiding as chairman, another Director of the Corporation shall preside in their place according to the order of precedence previously established by the Board of Directors.

Article 26. (Exercise of Voting Rights by Proxy)

1.    A shareholder may exercise its voting rights by proxy, provided, however, that the proxy shall be a shareholder of the Corporation who is entitled to exercise its own voting rights.

2.    In cases where the preceding paragraph applies, the shareholder or its proxy shall file with the Corporation a document establishing the proxy’s power of representation for each general meeting of shareholders.

3.    The Corporation may refuse a shareholder having two (2) or more proxies attend a general meeting of shareholders.

Article 27. (Deemed Delivery of Reference Documents, etc. for General Meeting of Shareholders)

Upon convening a general meeting of shareholders, the Corporation may deem that the information which is required to be described or indicated in reference documents for the general meeting of shareholders, business reports, financial statements and consolidated financial statements shall be provided to the shareholders, in the event that it is disclosed, pursuant to laws and regulations, through the method by which shareholders may receive such information through an electronic means.

Articles 28. (Resolutions at class meetings)

1.    The provisions of Articles 25, 26 and 27 of these Articles shall apply mutatis mutandis to class meetings.

2.    The provisions of Article 24, Paragraph 1 of these Articles shall apply mutatis mutandis to the resolutions of class meetings made pursuant to Article 324, Paragraph 1 of the Companies Act.

3.    The provisions of Article 24, Paragraph 2 of these Articles shall apply mutatis mutandis to the resolutions of class meetings made pursuant to Article 324, Paragraph 2 of the Companies Act.

4.    No resolution of a class meeting of Model AA Class Shareholders shall be required in respect of any act prescribed in any item of Article 322, Paragraph 1 of the Companies Act, unless otherwise specifically provided by law or regulation.

5.    No resolution of a class meeting of Model AA Class Shareholders shall be required under the provisions of Article 199, Paragraph 4 or Article 238, Paragraph 4 of the Companies Act.

CHAPTER V. MEMBERS OF THE BOARD OF DIRECTORS AND BOARD OF DIRECTORS

Article 29. (Number of Directors)

The Corporation shall have no more than twenty (20) Directors.

Article 30. (Election of Directors)

1.    Directors shall be elected by a resolution of a general meeting of shareholders.

2.    A resolution for the election of Directors shall be adopted by a majority vote of the shareholders present at the meeting who hold shares representing in aggregate not less than one-third (1/3) of the voting rights of all the shareholders who are entitled to vote.

3.    The election of Directors shall not be made by cumulative voting.

Article 31. (Term of Office of Directors)

1.    The term of office of Directors shall expire at the closing of the ordinary general meeting of shareholders to be held for the last business year of the Corporation ending within one (1) year after their election.

2.    The term of office of any Director elected in order to increase the number of Directors or to fill a vacancy shall be the balance of the term of office of the other Directors who hold office at the time of his/ her election.

Article 32. (Board of Directors)

1.    The Corporation shall have a Board of Directors.

2.    Notice of a meeting of the Board of Directors shall be dispatched to each Director and each Audit & Supervisory Board Member at least three (3) days before the date of the meeting. In case of urgency, however, such period may be shortened.

3.    With respect to matters to be resolved by the Board of Directors, the Corporation shall deem that such matters were approved by a resolution of the Board of Directors when all the Directors express their agreement in writing or by electronic records. Provided, however, that this provision shall not apply when any Audit & Supervisory Board Member expresses his/her objection to such matters.

4.    In addition to the preceding two (2) paragraphs, the management of the Board of Directors shall be subject to the Regulations of the Board of Directors established by the Board of Directors.

Article 33. (Representative Directors and Executive Directors)

1.    The Board of Directors shall designate one or more Representative Directors by its resolution.

2.    The Board of Directors may appoint one Chairman of the Board, one President and one or more Vice Chairmen of the Board and Executive Vice Presidents by its resolution.

Article 34. (Honorary Chairmen and Senior Advisors)

The Board of Directors may appoint Honorary Chairmen and Senior Advisors by its resolution.

Article 35. (Exemption from Liability of Directors)

In accordance with the provisions of Article 426, Paragraph 1 of the Companies Act, the Corporation may, by a resolution of the Board of Directors, exempt Directors (including former Directors) from liabilities provided for in Article 423, Paragraph 1 of the Companies Act within the limits stipulated by laws and regulations.

Article 36. (Limited Liability Agreement with members of the Board of Directors)

In accordance with the provisions of Article 427, Paragraph 1 of the Companies Act, the Corporation may enter into an agreement with Members of the Board of Directors (excluding Executive Members of the Board of Directors, etc.) limiting liabilities provided for in Article 423, Paragraph 1 of the Companies Act; provided, however, that the limit of the liability under the agreement shall be the minimum amount of liability stipulated by laws and regulations.

CHAPTER VI. AUDIT & SUPERVISORY BOARD MEMBERS AND AUDIT & SUPERVISORY BOARD

Article 37. (Establishment of Audit & Supervisory Board Members and Number of Audit & Supervisory Board Members)

The Corporation shall have no more than seven (7) Audit & Supervisory Board Members.

Article 38. (Election of Audit & Supervisory Board Members)

1.    Audit & Supervisory Board Members shall be elected by a resolution of a general meeting of shareholders.

2.    A resolution for the election of Audit & Supervisory Board Members shall be adopted by a majority vote of the shareholders present at the meeting who hold shares representing in aggregate not less than one-third (1/3) of the voting rights of all the shareholders who are entitled to vote.

Article 39. (Term of Office of Audit & Supervisory Board Members)

1.    The term of office of Audit & Supervisory Board Members shall expire at the closing of the ordinary general meeting of shareholders to be held for the last business year of the Corporation ending within four (4) years after their election.

2.    The term of office of any Audit & Supervisory Board Member elected to fill a vacancy shall be the balance of the term of office of the Audit & Supervisory Board Member whom he/she succeeds.

Article 40. (Audit & Supervisory Board)

1.    The Corporation shall have an Audit & Supervisory Board.

2.    Notice of a meeting of the Audit & Supervisory Board shall be dispatched to each Audit & Supervisory Board Members at least three (3) days before the date of the meeting. In case of urgency, however, such period may be shortened.

3.    In addition to the provisions of the preceding paragraph, the management of the Audit & Supervisory Board shall be subject to the Regulations of the Audit & Supervisory Board established by the Audit & Supervisory Board.

Article 41. (Full-time Audit & Supervisory Board Member)

The Audit & Supervisory Board shall, by its resolution, select one or more full-time Audit & Supervisory Board Members.

Article 42. (Exemption from Liability of Audit & Supervisory Board Members)

In accordance with the provisions of Article 426, Paragraph 1 of the Companies Act, the Corporation may, by a resolution of the Board of Directors, exempt Audit & Supervisory Board Members (including former Audit & Supervisory Board Members) from liabilities provided for in Article 423, Paragraph 1 of the Companies Act within the limits stipulated by laws and regulations.

Article 43. (Limited Liability Agreement with Audit & Supervisory Board Members)

In accordance with the provisions of Article 427, Paragraph 1 of the Companies Act, the Corporation may enter into an agreement with Audit & Supervisory Board Members limiting liabilities provided for in Article 423, Paragraph 1 of the Companies Act; provided, however, that the limit of the liability under the agreement shall be the minimum amount of liability stipulated by laws and regulations.

CHAPTER VII. ACCOUNTING AUDITOR

Article 44. (Accounting Auditor)

The Corporation shall have an Accounting Auditor (kaikeikansa-nin).

CHAPTER VIII. ACCOUNTS

Article 45. (Business Year)

The business year of the Corporation shall be one (1) year from April 1 of each year until March 31 of the following year.

Article 46. (Dividends from Surplus, etc.)

1.    Dividends from Surplus of the Corporation shall be paid to the shareholders or registered share pledgees entered or recorded in the final register of shareholders as of March 31 of each year.

2.    The Corporation may, by a resolution of the Board of Directors, distribute dividends from surplus as provided for in Article 454, Paragraph 5 of the Companies Act to the shareholders or registered share pledgees entered or recorded in the final register of shareholders as of September 30 of each year.

3.    In addition to the preceding two (2) paragraphs, the Corporation may, by a resolution of the Board of Directors, decide on matters provided for in each Item of Article 459, Paragraph 1 of the Companies Act.

4.    No interest shall be paid on unpaid dividends from surplus.

Article 47. (Dispensation from Payment of Dividends from Surplus, etc.)

In the case where the dividends from surplus are paid by cash, the Corporation shall not be obliged to pay any dividends from surplus after three (3) years have expired from the date of tender thereof.

EX-2.4

Exhibit 2.4

DESCRIPTION OF THE COMMON STOCK AND RELATED MATTERS

Except as otherwise stated, set forth below is information relating to Toyota’s common stock and Model AA Class Shares, including brief summaries of the relevant provisions of Toyota’s articles of incorporation and share handling regulations, as currently in effect, and of the Companies Act, the Book-Entry Transfer Act and related legislation. Capitalized terms used but not defined herein have the meanings given to them in Toyota’s annual report on Form 20-F for the fiscal year ended March 31, 2019.

General

Toyota’s authorized number of shares as of March 31, 2018 was 10,000,000,000 common shares, of which 3,262,997,492 shares were issued. The articles of incorporation was amended at the 111th Ordinary General Shareholders’ Meeting held in June 2015 and Toyota’s authorized number of shares was changed to 10,000,000,000 shares, with the total number of authorized shares per class, of 10,000,000,000 for common shares, 50,000,000 for First Series Model AA Class Shares, 50,000,000 for Second Series Model AA Class Shares, 50,000,000 for Third Series Model AA Class Shares, 50,000,000 for Fourth Series Model AA Class Shares and 50,000,000 for Fifth Series Model AA Class Shares, and the total number of shares authorized to be issued with respect to First Series Model AA Class Shares through the Fifth Series Model AA Class Shares not to exceed 150,000,000 shares. As of June 23, 2017, there were 47,100,000 shares of First Series Model AA Class Shares issued and outstanding. Neither the common shares nor the First Series Model AA Class Shares have any par value.

Toyota does not issue share certificates for its shares. In accordance with the Companies Act, the Book-Entry Transfer Act and Toyota’s articles of incorporation, Toyota’s common shares are recorded or registered on (i) Toyota’s register of shareholders and (ii) transfer account books of JASDEC, which is a book-entry transfer institution and securities firms, banks or other account management institutions. The transfer of common shares will generally become effective once the transfer is recorded in the transferee’s account. There are no restrictions imposed by Toyota’s articles of incorporation or share handling regulations on the transfer of common shares. In order to assert shareholders’ rights against Toyota, a shareholder must generally have his or her name and address recorded or registered on Toyota’s register of shareholders. A holder of common shares can assert minority shareholders’ rights (shareholders’ rights for which Toyota has not set a record date) against Toyota if JASDEC provides an individual shareholder notice to Toyota upon the shareholder’s request. The shareholder of deposited shares underlying the ADSs is the Depositary for the ADSs. Accordingly, holders of ADSs will not be able directly to assert shareholders’ rights.

A holder of common shares must have a transfer account to transfer shares. Holders of common shares who do not have a transfer account with JASDEC must have an account with an account management institution that directly or indirectly has a transfer account with JASDEC. Once Toyota decides on the record date for its shareholders’ meeting or makes a request to JASDEC based on justifiable grounds, JASDEC will promptly provide to Toyota names, addresses and other information with respect to the holders of Toyota’s common shares who are recorded on the transfer account books of JASDEC or account management institutions. Upon receiving such information, Toyota will record or register such information received from JASDEC on its register of shareholders. Accordingly, holders of common shares recorded or registered on Toyota’s register of shareholders will be treated as holders of common shares of Toyota and may exercise rights, such as voting rights, and will receive dividends (if any) and notices to holders of common shares directly from Toyota. Holders of common shares wishing to assert minority shareholders’ rights against Toyota must request an individual shareholder notice to JASDEC or the account management institution at which the shareholder has opened a transfer account. In response to such request, JASDEC will provide the individual shareholders notice to Toyota. A holder of common shares may assert his or her minority shareholders’ rights against Toyota for a period of four weeks after the date the individual shareholder notice is provided to Toyota. The shares held by a person who is deemed to hold additional shares according to the transfer account books are aggregated for these purposes.

Model AA Class Shares, once issued, will be recorded or registered on Toyota’s register of shareholders. The transfer of Model AA Class Shares, once issued, will be effective upon an agreement between the transferor and the transferee, but entry or record of a change of holder in the register of shareholders will require an approval from the board of directors.

Dividends

Dividends — General

Toyota normally pays dividends twice per year, including an interim dividend and a year-end dividend. Toyota’s articles of incorporation provide that retained earnings can be distributed as dividends pursuant to a resolution of its board of directors. Toyota’s board of directors resolves to pay year-end dividends to holders of common shares and registered pledgees of common shares of record as of March 31, the record date, in each year. In addition, the articles of incorporation provide that in the event that Toyota pays a year-end dividend to holders of common shares, it will pay AA Dividends in cash from surplus to any holders of Model AA Class Shares or registered pledgees of Model AA Class Shares entered or recorded in the final register of shareholders as of the record date for the year-end dividend, in preference to holders of common shares or registered pledgees of common shares. The amount of annual AA Dividends per Model AA Class Share is calculated by multiplying the amount per Model AA Class Share paid to Toyota as consideration by a rate determined by the board of directors prior to the issuance of such Model AA Class Share, which rate is not to exceed 5%.

In addition to these year-end dividends, Toyota may pay an interim dividend in the form of cash distributions from its distributable surplus to holders of common shares and pledgees of common shares of record as of September 30, the record date, in each year by a resolution of its board of directors. The articles of incorporation provide that in the event that Toyota pays such interim dividends, Toyota will pay AA Interim Dividends in cash as interim dividend to any holders of Model AA Class Shares or registered pledgees of Model AA Class Shares entered or recorded in the final register of shareholders as of the record date for the interim dividend, in preference to holders of common shares or registered pledgees of common shares. If AA Interim Dividends are paid during the fiscal year in which the record date for the year-end dividend falls, the amount of AA Interim Dividends is deducted from AA Dividends to be paid per the above paragraph.

If the amount of the dividends from surplus paid in cash to holders of Model AA Class Shares or registered pledgees of Model AA Class Shares is less than the prescribed amount of AA Dividends in any fiscal year, the amount of the shortfall will be carried forward to and accumulate in the following fiscal year and thereafter. Dividends from surplus will be paid in cash to holders of Model AA Class Shares or registered pledgees of Model AA Class Shares in preference to the payment of interim and year-end dividends until such payment reaches the amount of the accumulated unpaid dividends.

In addition, under the Companies Act, dividends may be paid to holders of common shares and pledgees of record of common shares as of any record date, other than those specified above, as set forth by Toyota’s articles of incorporation or as determined by its board of directors from time to time. Under the Companies Act, dividends may be distributed in cash or (except in the case of interim dividends mentioned in the second preceding paragraph) in kind, subject to limitations on distributable surplus and to certain other conditions.

Dividends — Distributable amount

Under the Companies Act, Toyota is permitted to make distributions of surplus to the extent that the aggregate book value of the assets to be distributed to shareholders does not exceed the distributable amount provided for by the Companies Act and the ordinance of the Ministry of Justice as at the effective date of such distribution of surplus.

The amount of surplus at any given time shall be the amount of Toyota’s assets and the book value of Toyota’s treasury stock after subtracting and adding the amounts of items provided for by the Companies Act and

the ordinance of the Ministry of Justice, and the amount of surplus distributable for dividends is calculated by adding to and subtracting from this amount the amounts of items provided for by the Companies Act and the ordinance of the Ministry of Justice.

Dividends — Prescription

Under its articles of incorporation, Toyota is not obligated to pay any dividends in cash which are left unclaimed for a period of three years after the date on which they first became payable.

Japanese Unit Share System

General. Consistent with the requirements of the Companies Act, Toyota’s articles of incorporation provide that 100 common shares or Model AA Class Shares each constitute one “unit.” Although the number of shares constituting a unit is included in the articles of incorporation, any amendment to the articles of incorporation reducing (but not increasing) the number of shares constituting a unit or eliminating the provisions for the unit of shares may be made by a resolution of the board of directors rather than by a special shareholders resolution, which is otherwise required for amending the articles of incorporation.

Voting Rights under the Unit Share System. Under the unit share system, shareholders have one voting right for each unit of shares that they hold. Any number of common shares or Model AA Class Shares less than a full unit will carry no voting rights.

Purchase by Toyota of Shares Constituting Less Than a Unit. A holder of shares constituting less than a full unit may require Toyota to purchase those shares at their market value in the case of common shares and at fair price in the case of Model AA Class Shares in accordance with the provisions of Toyota’s share handling regulations and the Companies Act.

Voting Rights

Toyota holds its ordinary general shareholders’ meeting each year. In addition, Toyota may hold an extraordinary general shareholders’ meeting whenever necessary by giving at least two weeks’ advance notice. Under the Companies Act, notice of any shareholders’ meeting must be given to each shareholder having voting rights or, in the case of a non-resident shareholder, to his or her resident proxy or mailing address in Japan in accordance with Toyota’s share handling regulations, at least two weeks prior to the date of the meeting.

Holders of common shares and holders of Model AA Class Shares shall have voting rights exercisable at a general shareholders’ meeting. A holder of shares constituting one or more whole units is entitled to one vote per unit of shares subject to the limitations on voting rights set forth in this paragraph. In general, under the Companies Act, a resolution can be adopted at a general shareholders’ meeting by a majority of the shares having voting rights represented at the meeting. The Companies Act and Toyota’s articles of incorporation require a quorum for the election of members of the board of directors and audit & supervisory board members of not less than one-third of the total number of outstanding shares having voting rights. Toyota’s shareholders are not entitled to cumulative voting in the election of members of the board of directors. A corporate shareholder, the management of which is substantially under Toyota’s control as provided by an ordinance of the Ministry of Justice, either through the holding of voting rights or for any other reason, does not have voting rights.

Shareholders may exercise their voting rights by attending the general shareholders’ meeting or in writing by mail. Shareholders who choose to exercise their voting rights by mail must fill out and return to Toyota the voting right exercise form enclosed with the convocation notice of the general shareholders’ meeting by the date specified in such convocation notice. In addition, from the general shareholders’ meeting for fiscal 2009, shareholders may exercise their voting rights through the internet. Shareholders electing to exercise their voting rights through the internet must log on to the “Website to Exercise Voting Rights” using the login ID and temporary password provided in the voting right exercise form enclosed with the convocation notice and submit their votes by a date specified in the convocation notice, following instructions appearing on the website.

Institutional investors may also use the Electronic Proxy Voting Platform operated by Investor Communications Japan to exercise their voting rights through the use of the Internet, if such institutional investor applies to use the platform in advance. Shareholders may also exercise their voting rights through proxies, provided that those proxies are also shareholders who have voting rights. Toyota may refuse a shareholder having two or more proxies attend a general shareholders’ meeting.

The Companies Act provides that a quorum of at least one-third of outstanding shares with voting rights must be present at a shareholders’ meeting to approve any material corporate actions such as:

(1) any amendment of the articles of incorporation with certain exceptions in which a shareholders’ resolution is not required;

(2) acquisition of its own shares from a specific party;

(3) consolidation of shares;

(4) any issue or transfer of its shares at a “specially favorable” price (or any issue of stock acquisition rights or bonds with stock acquisition rights at “specially favorable” conditions by Toyota) to any persons other than shareholders;

(5) the removal of an audit & supervisory board member;

(6) the exemption of liability of a director or audit & supervisory board member with certain exceptions;

(7) a reduction of stated capital which meets certain requirements with certain exceptions;

(8) a distribution of in-kind dividends which meets certain requirements;

(9) dissolution, merger, or consolidation with certain exceptions in which a shareholders’ resolution is not required;

(10) the transfer of the whole or a material part of the business;

(11) the transfer in entirety or in part of shares or equity interest of a subsidiary under certain conditions;

(12) the taking over of the entire business of any other corporation with certain exceptions in which a shareholders’ resolution is not required;

(13) share exchange or share transfer for the purpose of establishing 100% parent-subsidiary relationships with certain exceptions in which a shareholders’ resolution is not required; or

(14) company split with certain exceptions in which a shareholders’ resolution is not required.

At least two-thirds of the shares having voting rights represented at the meeting must approve these actions.

The voting rights of holders of ADSs are exercised by the Depositary based on instructions from those holders.

Rights to be Allotted Shares

Holders of common shares and Model AA Class Shares have no preemptive rights under Toyota’s articles of incorporation. Under the Companies Act, the board of directors may, however, determine that shareholders shall be given rights to be allotted shares or stock acquisition rights on request in connection with a particular issue or transfer of shares, or issue of stock acquisition rights, respectively. In this case, such rights must be given on uniform terms to all shareholders as of a specified record date by at least two weeks’ prior public notice to shareholders of the record date.

Rights to be allotted shares are nontransferable. However, a shareholder may be allotted stock acquisition rights without consideration thereto, and may transfer such rights.

Liquidation Rights

In the event of a liquidation of Toyota, the assets remaining after payment of all debts, liquidation expenses and taxes will be distributed as follows. First, an amount per First Series Model AA Class Share through Fifth Series Model AA Class Share, determined by resolution of the board of directors or calculated using a formula determined by a resolution of the board of directors prior to the issuance of such Model AA Class Shares based on the amount per Model AA Class Shares paid to Toyota as consideration, shall be paid in cash to holders of Model AA Class Shares or registered pledgees of Model AA Class Shares. No other distribution of residual assets shall be made to holders of Model AA Class Shares or registered pledgees of Model AA Class Shares. The remaining residual assets shall be distributed among the holders of common shares or registered pledgees of common shares in proportion to the respective number of shares they own.

Liability to Further Calls or Assessments

All of Toyota’s currently outstanding shares, including shares represented by the ADSs, are fully paid and nonassessable.

Record Date

The close of business on March 31 is the record date for Toyota’s year-end dividends, if paid. A holder of common shares or Model AA Class Shares constituting one or more whole units who is recorded or registered as a holder on Toyota’s register at the close of business as of March 31 is also entitled to exercise shareholders’ voting rights at the ordinary general shareholders’ meeting with respect to the business year ending on March 31. The close of business on September 30 of each year is the record date for interim dividends, if paid. In addition, Toyota may set a record date for determining the shareholders entitled to other rights and for other purposes by giving at least two weeks’ prior public notice.

The shares generally trade ex-dividend or ex-rights in the Japanese stock exchanges two business day prior to a record date (or if the record date is not a business day, three business days prior thereto), for the purpose of dividends or rights offerings. However, in connection with the scheduled shortening of the settlement period of shares listed on any Japanese stock exchange, the ex-dividend date and ex-rights date is expected to become the preceding business day before the record date (or if the record date is not a business day, two business days prior thereto) if the record date is on or after July 18, 2019 (provided, however, such transition date is subject to change).

Acquisition or Disposition of Shares or ADS

Under the Foreign Exchange and Foreign Trade Law and the cabinet orders and ministerial ordinances thereunder, all aspects of regulations on foreign exchange and foreign trade transactions are, with minor exceptions (which are not generally applicable to the purchase and sale of Toyota’s shares), only subject to post transaction reporting requirements. Acquisitions and dispositions of shares of common stock or ADS by non-residents of Japan (including foreign corporations not resident in Japan) are generally not subject to this reporting requirement. However, the Minister of Finance has the power to impose a licensing requirement for transactions in limited circumstances.

Report of Substantial Shareholdings

The Financial Instruments and Exchange Law of Japan and regulations under the Law require any person who has become a holder (together with its related persons) of more than 5% of the total issued shares of a company listed on any Japanese stock exchange (including ADSs representing such shares) to file with the Director of a competent Local Finance Bureau, within five business days, a report concerning those shareholdings. A similar report must also be filed to reflect any change of 1% or more in any shareholding or any change in material matters set out in reports previously filed. Any such report shall be filed with the Director of a competent Local Finance Bureau through the Electronic Disclosure for Investor’s Network system. For this

purpose, shares issuable to a shareholder upon exercise of stock acquisition rights are taken into account in determining both the number of shares held by that stock acquisition rights holder and the company’s total issued shares.

DESCRIPTION OF THE AMERICAN DEPOSITARY SHARES

An American Depositary Receipt, or ADR, is a negotiable certificate delivered by a United States bank or trust company acting as depositary. In the same way that a share certificate of a U.S. issuer would evidence shares, an ADR evidences American Depositary Shares, which are also referred to as ADSs. Each ADS represents an ownership interest in two shares of Toyota’s common stock, which shares are held in Japan on deposit by the depositary or its agent for the benefit of holders of ADRs.

The terms of the ADRs are contained in the deposit agreement dated as of September 27, 1999 among Toyota, The Bank of New York Mellon, as depositary, and the owners and beneficial owners of ADRs issued thereunder. The principal executive office of the depositary is located at 240 Greenwich Street, New York, New York 10286. The following is a summary of the material provisions of the deposit agreement and, thus, it does not contain all information that may be relevant to holders of ADRs. Investors should read the entire deposit agreement (including the form of ADR) for complete information. Toyota has filed a copy of the deposit agreement as an exhibit to Toyota’s annual report on Form 20-F, which can be accessed on the SEC’s website (http://www.sec.gov).

The depositary will deliver ADRs based on the deposit of common shares with Sumitomo Mitsui Banking Corporation as custodian under the deposit agreement. Deposited common shares will be represented by ADSs. If a holder’s ownership interest is held through a broker, dealer or other third party, that broker, dealer or third party will provide documentation showing the holder’s beneficial interest in the ADSs. Only persons in whose names ADRs are registered on the books of the depositary will be treated as holders of ADRs by the depositary and by Toyota. In this “Description of the American Depositary Shares,” the term “holders” shall refer only to persons in whose name ADRs are registered on the books of the depositary. The depositary owes no duties to anyone other than Toyota and holders of ADSs.

Deposit of Common Shares and Issuance of ADRs

Common shares deposited with the custodian must be accompanied by documents specified in the deposit agreement, including instruments showing that those common shares have been properly transferred to the person on whose behalf the deposit is being made. The custodian will hold all deposited common shares for the account of the depositary. Holders thus have no direct ownership interest in the common shares and only have those rights as are contained in the deposit agreement. The custodian will also hold any additional securities, property and cash received on or in substitution for the deposited common shares. The deposited common shares and any additional items are referred to as deposited securities.

Upon each deposit of common shares, receipt of related delivery documentation and compliance with the other provisions of the deposit agreement, including the payment of the fees and charges of the depositary, the depositary will execute and deliver an ADR or ADRs in the name of the person entitled thereto evidencing the number of ADSs to which that person is entitled. ADRs will be delivered at the depositary’s Corporate Trust Office.

Surrender of ADRs and Delivery of Deposited Securities

Holders are entitled to receive the deposited securities underlying the ADSs upon surrender of ADRs to the depositary with delivery instructions for the deposited securities. In addition, holders must pay all fees, taxes and governmental charges that may apply. Deposited securities are normally delivered at the custodian’s office unless

the holder requests, at his own risk and expense, that they be delivered to another place. The depositary may only restrict the withdrawal of deposited securities in connection with:

• temporary delays caused by closing transfer books of the depositary or Toyota’s transfer books or the deposit of common shares in connection with voting at a shareholders’ meeting, or the payment of dividends,

• the payment of fees, taxes and similar charges, or

• compliance with any U.S. or foreign laws or governmental regulations relating to the ADRs or the withdrawal of deposited securities.

Dividends and Other Distributions on Deposited Securities

Toyota may make various types of distributions with respect to its securities. Except as stated below, to the extent the depositary is legally permitted it will deliver those distributions to holders in proportion to their interests in the following manner:

Cash

The depositary shall convert cash dividends or other distributions from foreign currency to U.S. dollars if this is permissible and can be done on a reasonable basis. The depositary will hold the foreign currency it cannot convert for the account of the ADR holders who have not been paid. The depositary will not invest the foreign currency and it will not be liable for interest. The depositary will endeavor to distribute cash in a practicable manner, and may deduct any taxes required to be withheld, its fees, any expenses of converting foreign currency and transferring funds to the United States, and other expenses and adjustments.

Common Shares

In the case of a distribution in common shares, the depositary may execute and deliver additional ADRs to evidence the number of ADSs representing those common shares. Only whole ADSs will be issued. Any common shares which would result in fractional ADSs will be sold and the net proceeds will be distributed to the holders entitled thereto. If the depositary does not distribute additional ADRs, the existing ADRs will also represent the new common shares.

Rights

In the case of a distribution of rights to subscribe for additional common shares or other rights, if Toyota provides satisfactory evidence that the depositary may lawfully distribute those rights, the depositary may arrange for holders to instruct the depositary as to the exercise of those rights. However, if Toyota does not furnish that evidence, the depositary may:

• sell those rights if practicable and distribute the net proceeds as cash, or

• allow those rights to lapse, whereupon holders of ADRs will receive nothing.

Toyota has no obligation to file a registration statement under the Securities Act to make any rights available to holders. Any sale or lapse of rights may reduce the holders’ equity interest in Toyota.

Other Distributions

In the case of a distribution of securities or property other than those described above, the depositary may either: distribute those securities or property in any manner it deems fair and equitable; or sell those securities or property and distribute any net proceeds as cash.

The depositary may choose any practicable method of distribution for any specific holder, including the distribution of foreign currency, securities or property, or it may retain such items on behalf of the holder as deposited securities.

There can be no assurance that the depositary will be able to convert any currency at a specified exchange rate or sell any property, rights, common shares or other securities at a specified price, nor that any of those transactions can be completed within a specified time period.

Record Date

The depositary may fix a record date for determining the holders who shall be entitled to receive distributions, exercise voting rights, receive notices, or act on other matters. This record date will be as near as possible to the corresponding record date set by Toyota.

Voting of Deposited Securities

After receiving voting materials from Toyota and if Toyota requests, the depositary will notify the holders of any shareholder meeting or solicitation of consents or proxies. This notice will describe how the holder may instruct the depositary to exercise the voting rights for the common shares which underlie that holder’s ADRs. If the depositary receives instructions on or before a date set by the depositary, the depositary will endeavor to vote the common shares in accordance with the holder’s instructions. If the depositary does not receive instructions from a holder on or before the date established by the depositary for that purpose, the depositary will deem that holder to have instructed the depositary to give a proxy to a person designated by Toyota to vote the number of common shares underlying that holder’s ADRs. However, if Toyota informs the depositary that Toyota does not wish to have any proxy given or if substantial opposition to the proposal exists or if the proposal materially and adversely affects the rights of shareholders, a discretionary proxy will not be issued. Because there is no guarantee that holders will receive voting materials in time to instruct the depositary to vote, it is possible that holders or persons who hold their ADRs through brokers, dealers or other third parties will not have the opportunity to exercise their rights to vote. The depositary will not itself exercise any voting discretion. Furthermore, neither the depositary nor its agents are responsible for any failure to carry out any voting instructions, for the manner in which any vote is cast or for the effect of any vote.

In voting or exercising the right to vote, the depositary will, to the extent possible, aggregate the common shares for which the same or similar instructions have been given so as to be able to vote the largest number of whole units as possible. As a result of this aggregation, holders of ADRs representing less than a whole unit of common shares may or may not have their votes counted with respect to any particular matter voted upon.

Inspection of Transfer Books

The depositary will maintain books for the registration, transfer, combination and split-up of ADRs. These books will be available for inspection by the holders for the purpose of communicating with holders in the interest of Toyota’s business or a matter related to the deposit agreement.

Changes Affecting Deposited Securities

If Toyota takes actions that affect the deposited securities, including (1) any split-up, consolidation or other reclassification of deposited securities and (2) any recapitalization, reorganization, merger, consolidation or sale of all or substantially all Toyota’s assets, then the depositary may choose to:

1. amend the form of ADR,

2. distribute the additional or amended ADRs,

3. distribute cash, securities or other property it has received in connection with those actions,

4. sell any securities or property received and distribute the proceeds as cash, or

5. none of the above.

If the depositary does not choose any of 1 to 4 above, any of the cash, securities or other property it receives shall constitute part of the deposited securities and each ADR will then represent a proportionate interest in that property.

Amendment and Termination of Deposit Agreement

Toyota and the depositary may jointly amend the deposit agreement. The holders must be given at least 30 days’ notice of any amendment that imposes or increases any fees or charges (except for taxes and other charges specifically payable by holders under the deposit agreement), or affects any substantial existing right of holders. If a holder continues to hold ADRs after being so notified, that holder is deemed to agree to this amendment. No amendment may take away any holder’s right to cancel ADRs and to receive the deposited securities underlying the ADRs, except to comply with requirements of law.

If directed by Toyota, the depositary shall terminate the deposit agreement by giving the holders at least 90 days’ prior notice. The depositary may also terminate the deposit agreement by providing notice if it has resigned and no successor has been appointed within 90 days after its resignation. After termination, the depositary’s only responsibility will be to deliver deposited securities to holders who surrender their ADRs, and to hold or sell distributions received on deposited securities. At any time after the expiration of one year from the termination date, the depositary may sell the deposited securities which remain and hold the net proceeds from those sales, without liability for interest, in trust for the holders who have not yet surrendered their ADRs. After making the sale, the depositary shall have no obligations except to account for those proceeds and other cash.

Liability of Holders for Taxes

Holders must also pay any tax or other governmental charge payable by the custodian or the depositary on any ADR, deposited security or distribution. If a holder owes any tax or other governmental charge, the depositary may (1) deduct the amount of taxes owed from any cash distributions, or (2) sell deposited securities and deduct the amount owing from the net proceeds of that sale. In either case the holder remains liable for any shortfall. If any tax or governmental charge is required to be withheld on any non-cash distribution, the depositary may sell the distributed property or securities to pay those taxes and distribute any remaining net proceeds to the holder entitled thereto.

Conditions to the Issuance of ADRs and Other Transactions

The depositary, the custodian or Toyota may refuse to:

• deliver, register or transfer an ADR or ADRs,

• effect a split-up or combination of ADRs,

• deliver distributions on any ADRs, or

• permit the withdrawal of deposited securities (unless the deposit agreement provides otherwise)

until the following conditions have been met:

• the holder has paid all taxes, governmental charges, and fees and expenses as required in the deposit agreement,

• the holder has provided the depositary with any information it may deem necessary or proper, including without limitation, proof of identity and the genuineness of any signature, and

• the holder has complied with all regulations that the depositary may establish under the deposit agreement.

The depositary may also suspend the issuance of ADRs, the deposit of common shares, the registration, transfer, split-up or combination of ADRs, or the withdrawal of deposited securities (unless the deposit agreement provides otherwise), if the register for ADRs or any deposited securities is closed or if the depositary or Toyota decides that this action is advisable.

Limitation on Liability

The deposit agreement expressly limits the obligations and liability of the depositary, Toyota and its and Toyota’s respective agents. The depositary and Toyota will not be liable:

• if they are prevented or hindered in performing any obligations by circumstances beyond their control, including, without limitation, requirements of law, the terms of the deposited securities and acts of God,

• for exercising or failing to exercise discretion under the deposit agreement,

• if they perform their obligations without negligence or bad faith, or

• for any action based on advice or information from legal counsel, accountants, any person presenting common shares for deposit, any holder, or other qualified person.

The deposit agreement also provides that the depositary and Toyota have no obligation to become involved in a lawsuit or other proceeding related to the ADRs or the deposit agreement on behalf of the owners of ADRs or any other party unless Toyota or it has received an indemnity satisfactory to it. In addition, the deposit agreement permits the depositary and Toyota to rely upon any documents they believe in good faith to be genuine and to have been signed or presented by the proper party.

Pre-released ADRs

The depositary may deliver ADRs not only against the deposit with the custodian of common shares (or rights to receive common shares from Toyota or any registrar, transfer agent, clearing agent or similar entity), but also against the agreement by a qualified third party to deliver to the depositary the common shares within a specified period of time. ADRs issued against this type of agreement are called “pre-released ADRs.” Pre-released ADRs may be issued only if:

• the depositary has received collateral for the full market value of the pre-released ADRs,

• the pre-released ADRs are terminable by the depositary upon not more than five business days’ notice, and

• each recipient of pre-released ADRs agrees in writing that he or she:

• owns the underlying common shares,

• assigns all rights in those common shares to the depositary, and

• will not transfer those common shares except to close out the pre-release.

Governing Law

The deposit agreement is governed by the laws of the State of New York except with respect to its authorization and execution by Toyota, which are governed by the laws of Japan.

EX-12.1

Exhibit 12.1

CERTIFICATIONS

I, Akio Toyoda, certify that:

1. I have reviewed this annual report on Form 20-F of Toyota Motor Corporation (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the Audit & Supervisory Board (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: June 24, 2020

/S/    AKIO TOYODA        

Akio Toyoda

President, Member of the Board of Directors

Toyota Motor Corporation

CERTIFICATIONS

I, Kenta Kon, certify that:

1. I have reviewed this annual report on Form 20-F of Toyota Motor Corporation (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the Audit & Supervisory Board (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: June 24, 2020

/S/    KENTA KON      

Kenta Kon

Operating Officer

Toyota Motor Corporation

EX-13.1

Exhibit 13.1

CERTIFICATION

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of Toyota Motor Corporation, a Japanese corporation (the “Company”), does hereby certify that, to such officer’s knowledge:

1. The accompanying Annual Report of the Company on Form 20-F for the period ended March 31, 2020 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/S/    AKIO TOYODA
Name:	Akio Toyoda
Title:	President, Member of the Board of Directors
Date: June 24, 2020
By:	/S/    KENTA KON
Name:	Kenta Kon
Title:	Operating Officer
Date: June 24, 2020

(A signed original of this written statement required by Section 906 has been provided to Toyota Motor Corporation and will be retained by Toyota Motor Corporation and furnished to the U.S. Securities and Exchange Commission or its staff upon request.)

EX-15.1

Exhibit 15.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statement on Form F-3 (No. 333-225851) of Toyota Motor Corporation of our report dated June 24, 2020 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 20-F.

/s/ PricewaterhouseCoopers Aarata LLC

Nagoya, Japan

June 24, 2020

XML

Segment data (Tables)

12 Months Ended

Mar. 31, 2020

Segment Operating Results and Assets

Segment operating results and assets -

As of and for the year ended March 31, 2018:

	Yen in millions
	Automotive		Financial Services		All Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		26,347,229		1,959,234		1,073,047		—			29,379,510
Inter-segment sales and transfers		50,711		57,774		573,071		(681,556	)		—
Total		26,397,940		2,017,008		1,646,118		(681,556	)		29,379,510
Operating expenses		24,386,805		1,731,462		1,545,306		(683,925	)		26,979,648
Operating income		2,011,135		285,546		100,812		2,369			2,399,862
Assets		17,054,209		23,055,981		2,178,118		8,019,941			50,308,249
Investment in equity method investees		3,054,583		11,713		—		96,415			3,162,711
Depreciation expenses		976,735		723,061		34,237		—			1,734,033
Capital expenditure		1,381,122		2,166,805		62,447		(11,667	)		3,598,707

As of and for the year ended March 31, 2019:

	Yen in millions
	Automotive		Financial Services		All Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		27,034,492		2,120,343		1,070,846		—			30,225,681
Inter-segment sales and transfers		44,585		33,204		605,531		(683,320	)		—
Total		27,079,077		2,153,547		1,676,377		(683,320	)		30,225,681
Operating expenses		25,040,193		1,830,726		1,570,839		(683,622	)		27,758,136
Operating income		2,038,884		322,821		105,538		302			2,467,545
Assets		17,799,376		24,044,700		2,125,271		7,967,602			51,936,949
Investment in equity method investees		3,215,856		12,172		—		85,675			3,313,703
Depreciation expenses		997,312		758,847		36,216		—			1,792,375
Capital expenditure		1,520,366		2,165,609		66,075		(13,163	)		3,738,887

As of and for the year ended March 31, 2020:

	Yen in millions
	Automotive		Financial   Services		All Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		26,834,485		2,170,243		925,264		—			29,929,992
Inter-segment sales and transfers		29,029		20,316		579,286		(628,631	)		—
Total		26,863,514		2,190,559		1,504,550		(628,631	)		29,929,992
Operating expenses		24,811,168		1,898,376		1,407,895		(630,316	)		27,487,123
Operating income		2,052,346		292,183		96,655		1,685			2,442,869
Assets		18,754,728		24,858,837		2,023,111		7,043,760			52,680,436
Investment in equity method investees		3,711,151		61,852		180,425		137,362			4,090,790
Depreciation expenses		824,777		743,710		36,896		—			1,605,383
Capital expenditure		1,454,142		2,062,718		71,554		14,818			3,603,232

Geographic Information

Geographic information -

As of and for the year ended March 31, 2018:

	Yen in millions
	Japan		North America		Europe		Asia		Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		9,273,672		10,347,266		2,940,243		4,497,374		2,320,955		—			29,379,510
Inter-segment sales and transfers		6,751,172		227,144		244,981		650,765		132,344		(8,006,406	)		—
Total		16,024,844		10,574,410		3,185,224		5,148,139		2,453,299		(8,006,406	)		29,379,510
Operating expenses		14,364,926		10,435,511		3,110,198		4,714,940		2,340,636		(7,986,563	)		26,979,648
Operating income		1,659,918		138,899		75,026		433,199		112,663		(19,843	)		2,399,862
Assets		15,797,024		16,936,704		3,346,179		4,893,582		2,986,661		6,348,099			50,308,249
Long-lived assets		3,511,663		5,179,139		359,355		797,435		420,081		—			10,267,673

As of and for the year ended March 31, 2019:

	Yen in millions
	Japan		North America		Europe		Asia		Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		9,520,148		10,585,934		3,055,654		4,832,392		2,231,553		—			30,225,681
Inter-segment sales and transfers		7,105,213		231,313		183,197		680,639		101,890		(8,302,252	)		—
Total		16,625,361		10,817,247		3,238,851		5,513,031		2,333,443		(8,302,252	)		30,225,681
Operating expenses		14,933,686		10,702,732		3,113,983		5,055,542		2,242,333		(8,290,140	)		27,758,136
Operating income		1,691,675		114,515		124,868		457,489		91,110		(12,112	)		2,467,545
Assets		16,465,702		17,452,216		3,872,301		5,176,990		3,067,270		5,902,470			51,936,949
Long-lived assets		3,607,843		5,469,262		453,921		729,494		424,974		—			10,685,494

As of and for the year ended March 31, 2020:

	Yen in millions
	Japan		North America		Europe		Asia		Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		9,522,905		10,416,582		3,138,755		4,828,635		2,023,115		—			29,929,992
Inter-segment sales and transfers		6,938,616		222,166		222,123		510,021		89,387		(7,982,313	)		—
Total		16,461,521		10,638,748		3,360,878		5,338,656		2,112,502		(7,982,313	)		29,929,992
Operating expenses		14,893,543		10,368,119		3,210,333		4,967,657		2,021,778		(7,974,307	)		27,487,123
Operating income		1,567,978		270,629		150,545		370,999		90,724		(8,006	)		2,442,869
Assets		17,517,032		18,012,336		4,192,858		5,241,588		2,837,944		4,878,678			52,680,436
Long-lived assets		3,880,118		5,374,456		561,371		668,252		394,446		—			10,878,643

Revenues that are Attributed to Countries Based on Location of Customers, Excluding Customers in Japan

The following information shows revenues that are attributed to countries based on location of customers, excluding customers in Japan. In addition to the disclosure requirements under U.S.GAAP, Toyota discloses this information in order to provide financial statements users with valuable information.

	Yen in millions
	For the years ended March 31,
	2018		2019		2020
North America		10,403,647		10,675,298		10,543,638
Europe		2,730,915		2,873,737		2,937,216
Asia		4,793,110		5,355,991		5,263,943
Other		4,186,666		3,944,854		3,936,572

Balance Sheets - Non-financial Services and Financial Services Businesses

The financial data below presents separately Toyota’s non-financial services and financial services businesses.

Balance sheets -

	Yen in millions
	March 31,
	2019			2020
Assets
Non-Financial Services Businesses
Current assets
Cash and cash equivalents		2,790,212			2,774,498
Marketable securities		1,108,540			648,982
Trade accounts and notes receivable, less allowance for doubtful accounts		2,489,105			2,155,943
Inventories		2,656,396			2,434,916
Prepaid expenses and other current assets		2,118,922			2,413,274
Total current assets		11,163,175			10,427,613
Investments and other assets		11,643,209			12,435,115
Property, plant and equipment		6,178,503			6,293,992
Total Non-Financial Services Businesses assets		28,984,887			29,156,720
Financial Services Business
Current assets
Cash and cash equivalents		784,492			1,416,020
Marketable securities		18,620			29,749
Finance receivables, net		6,647,771			6,614,171
Prepaid expenses and other current assets		997,116			1,205,912
Total current assets		8,447,999			9,265,852
Noncurrent finance receivables, net		10,281,118			10,423,858
Investments and other assets		808,592			861,594
Property, plant and equipment		4,506,991			4,307,533
Total Financial Services Business assets		24,044,700			24,858,837
Eliminations		(1,092,638	)		(1,335,121	)
Total assets		51,936,949			52,680,436

	Yen in millions
	March 31,
	2019			2020
Liabilities
Non-Financial Services Businesses
Current liabilities
Short-term borrowings		579,901			483,871
Current portion of long-term debt		173,379			156,664
Accounts payable		2,616,143			2,404,385
Accrued expenses		3,075,411			2,789,153
Income taxes payable		300,703			201,200
Other current liabilities		1,755,737			1,773,883
Total current liabilities		8,501,274			7,809,156
Long-term liabilities
Long-term debt		784,256			818,371
Accrued pension and severance costs		948,377			963,061
Other long-term liabilities		1,059,237			1,303,628
Total long-term liabilities		2,791,870			3,085,060
Total Non-Financial Services Businesses liabilities		11,293,144			10,894,216
Financial Services Business
Current liabilities
Short-term borrowings		5,113,888			5,432,180
Current portion of long-term debt		4,127,133			4,508,666
Accounts payable		39,187			39,226
Accrued expenses		161,105			151,857
Income taxes payable		20,295			16,917
Other current liabilities		997,842			982,892
Total current liabilities		10,459,450			11,131,738
Long-term liabilities
Long-term debt		9,974,516			10,006,491
Accrued pension and severance costs		15,029			15,566
Other long-term liabilities		722,279			725,769
Total long-term liabilities		10,711,824			10,747,826
Total Financial Services Business liabilities		21,171,274			21,879,564
Eliminations		(1,092,679	)		(1,335,195	)
Total liabilities		31,371,739			31,438,585
Mezzanine equity		498,073			504,169
Total Toyota Motor Corporation shareholders’ equity		19,348,152			20,060,618
Noncontrolling interests		718,985			677,064
Total shareholders’ equity		20,067,137			20,737,682
Total liabilities, mezzanine equity and shareholders’ equity		51,936,949			52,680,436

Statements of Income - Non-financial Services and Financial Services Businesses

Statements of income -

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Non-Financial Services Businesses
Net revenues		27,448,165			28,133,676			27,775,932
Costs and expenses
Cost of revenues		22,613,450			23,400,550			23,143,209
Selling, general and administrative		2,721,362			2,591,249			2,483,501
Total costs and expenses		25,334,812			25,991,799			25,626,710
Operating income		2,113,353			2,141,877			2,149,222
Other income (expense), net		222,326			(161,608	)		130,259
Income before income taxes and equity in earnings of affiliated companies		2,335,679			1,980,269			2,279,481
Provision for income taxes		738,763			580,031			618,252
Equity in earnings of affiliated companies		467,718			357,527			260,149
Net income		2,064,634			1,757,765			1,921,378
Less - Net income attributable to noncontrolling interests		(89,533	)		(97,500	)		(67,559	)
Net income attributable to Toyota Motor Corporation - Non-Financial Services Businesses		1,975,101			1,660,265			1,853,819
Financial Services Business
Net revenues		2,017,008			2,153,547			2,190,559
Costs and expenses
Cost of revenues		1,320,348			1,418,636			1,395,211
Selling, general and administrative		411,114			412,090			503,165
Total costs and expenses		1,731,462			1,830,726			1,898,376
Operating income		285,546			322,821			292,183
Other income (expense), net		(794	)		(17,658	)		(17,103	)
Income before income taxes and equity in earnings of affiliated companies		284,752			305,163			275,080
Provision for income taxes		(234,356	)		79,903			65,164
Equity in earnings of affiliated companies		2,365			2,539			11,003
Net income		521,473			227,799			220,919
Less - Net income attributable to noncontrolling interests		(2,589	)		(5,214	)		1,413
Net income attributable to Toyota Motor Corporation - Financial Services Business		518,884			222,585			222,332
Eliminations		(2	)		23			32
Net income attributable to Toyota Motor Corporation		2,493,983			1,882,873			2,076,183

Statement of Cash Flows - Non-financial Services and Financial Services Businesses

Statements of cash flows -

	Yen in millions									Yen in millions
	For the year ended March 31, 2018									For the year ended March 31, 2019
	Non-Financial Services Businesses			Financial Services Business			Consolidated			Non-Financial Services Businesses			Financial Services Business			Consolidated
Cash flows from operating activities
Net income		2,064,634			521,473			2,586,106			1,757,765			227,799			1,985,587
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		1,010,972			723,061			1,734,033			1,033,528			758,847			1,792,375
Provision (reversal) for doubtful accounts and credit losses		(74	)		76,143			76,069			(1,375	)		81,440			80,065
Pension and severance costs, less payments		5,027			(741	)		4,286			30,477			1,168			31,645
Losses on disposal of fixed assets		35,010			279			35,289			33,676			2,226			35,902
Unrealized losses (gains) on securities		459			387			846			338,626			846			339,472
Deferred income taxes		64,143			(302,103	)		(237,961	)		(110,346	)		23,742			(86,594	)
Equity in earnings of affiliated companies		(467,718	)		(2,365	)		(470,083	)		(357,527	)		(2,539	)		(360,066	)
Changes in operating assets and liabilities, and other		205,434			312,828			494,543			(17,488	)		15,557			(51,789	)
Net cash provided by operating activities		2,917,887			1,328,962			4,223,128			2,707,336			1,109,086			3,766,597
Cash flows from investing activities
Additions to finance receivables		—			(25,153,088	)		(15,058,516	)		—			(26,000,249	)		(15,884,610	)
Collection of and proceeds from sales of finance receivables		—			24,117,335			14,046,312			—			24,925,930			14,859,103
Additions to fixed assets excluding equipment leased to others		(1,276,788	)		(14,329	)		(1,291,117	)		(1,435,964	)		(16,761	)		(1,452,725	)
Additions to equipment leased to others		(155,114	)		(2,152,476	)		(2,307,590	)		(137,314	)		(2,148,848	)		(2,286,162	)
Proceeds from sales of fixed assets excluding equipment leased to others		70,755			1,065			71,820			63,955			1,482			65,437
Proceeds from sales of equipment leased to others		63,402			1,147,870			1,211,272			60,657			1,324,417			1,385,074
Purchases of marketable securities and security investments		(2,273,805	)		(779,111	)		(3,052,916	)		(1,737,107	)		(103,248	)		(1,840,355	)
Proceeds from sales of and maturity of marketable securities and security investments		1,762,189			761,349			2,523,538			2,255,635			443,163			2,698,798
Payment for additional investments in affiliated companies, net of cash acquired		(576	)		—			(576	)		5,010			—			5,010
Changes in investments and other assets, and other		260,015			(106,597	)		197,681			(268,946	)		(4,130	)		(246,811	)
Net cash used in investing activities		(1,549,922	)		(2,177,982	)		(3,660,092	)		(1,194,074	)		(1,578,244	)		(2,697,241	)
Cash flows from financing activities
Proceeds from issuance of long-term debt		212,387			4,666,579			4,793,939			286,085			4,747,506			5,000,921
Payments of long-term debt		(170,072	)		(4,314,294	)		(4,452,338	)		(142,556	)		(4,336,250	)		(4,442,232	)
Increase (decrease) in short-term borrowings		(122,222	)		461,052			347,738			49,161			144,277			164,282
Dividends paid to Toyota Motor Corporation class shareholders		(6,194	)		—			(6,194	)		(8,690	)		—			(8,690	)
Dividends paid to Toyota Motor Corporation common shareholders		(620,698	)		—			(620,698	)		(636,116	)		—			(636,116	)
Dividends paid to noncontrolling interests		(63,764	)		—			(63,764	)		(69,367	)		—			(69,367	)
Reissuance (repurchase) of treasury stock		(447,818	)		—			(447,818	)		(549,637	)		—			(549,637	)
Net cash provided by (used in) financing activities		(1,218,381	)		813,337			(449,135	)		(1,071,120	)		555,533			(540,839	)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents		(16,124	)		(27,464	)		(43,588	)		(42,454	)		813			(41,641	)
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents		133,460			(63,147	)		70,313			399,688			87,188			486,876
Cash and cash equivalents and restricted cash and cash equivalents at beginning of year		2,257,064			892,262			3,149,326			2,390,524			829,115			3,219,639
Cash and cash equivalents and restricted cash and cash equivalents at end of year		2,390,524			829,115			3,219,639			2,790,212			916,303			3,706,515

	Yen in millions
	For the year ended March 31, 2020
	Non-Financial Services Businesses			Financial Services Business			Consolidated
Cash flows from operating activities
Net income		1,921,378			220,919			2,142,329
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		861,673			743,710			1,605,383
Provision (reversal) for doubtful accounts and credit losses		5,689			137,293			142,982
Pension and severance costs, less payments		14,880			819			15,699
Losses on disposal of fixed assets		54,549			2,364			56,913
Unrealized losses (gains) on securities		21,069			(987	)		20,082
Deferred income taxes		193,438			(1,305	)		192,147
Equity in earnings of affiliated companies		(260,149	)		(11,003	)		(271,152	)
Changes in operating assets and liabilities, and other		(305,705	)		(46,610	)		(313,740	)
Net cash provided by operating activities		2,506,822			1,045,200			3,590,643
Cash flows from investing activities
Additions to finance receivables		—			(26,668,185	)		(16,896,588	)
Collection of and proceeds from sales of finance receivables		—			25,557,953			15,667,462
Additions to fixed assets excluding equipment leased to others		(1,377,238	)		(30,594	)		(1,407,832	)
Additions to equipment leased to others		(155,601	)		(2,031,698	)		(2,187,299	)
Proceeds from sales of fixed assets excluding equipment leased to others		47,488			1,263			48,751
Proceeds from sales of equipment leased to others		49,913			1,341,302			1,391,215
Purchases of marketable securities and security investments		(2,236,585	)		(176,502	)		(2,413,087	)
Proceeds from sales of and maturity of marketable securities and security investments		2,245,119			125,287			2,370,406
Payment for additional investments in affiliated companies, net of cash acquired		—			(14,763	)		(14,763	)
Changes in investments and other assets, and other		(18,895	)		(20,037	)		290,874
Net cash used in investing activities		(1,445,799	)		(1,915,974	)		(3,150,861	)
Cash flows from financing activities
Proceeds from issuance of long-term debt		235,080			5,466,618			5,691,499
Payments of long-term debt		(130,695	)		(4,335,145	)		(4,424,923	)
Increase (decrease) in short-term borrowings		51,406			520,468			291,623
Dividends paid to Toyota Motor Corporation class shareholders		(11,186	)		—			(11,186	)
Dividends paid to Toyota Motor Corporation common shareholders		(618,801	)		—			(618,801	)
Dividends paid to noncontrolling interests		(54,945	)		—			(54,945	)
Reissuance (repurchase) of treasury stock		(476,129	)		—			(476,129	)
Net cash provided by (used in) financing activities		(1,005,270	)		1,651,941			397,138
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents		(71,467	)		(59,778	)		(131,245	)
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents		(15,714	)		721,389			705,675
Cash and cash equivalents and restricted cash and cash equivalents at beginning of year		2,790,212			916,303			3,706,515
Cash and cash equivalents and restricted cash and cash equivalents at end of year		2,774,498			1,637,692			4,412,190

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Employee benefit plans (Tables)

12 Months Ended

Mar. 31, 2020

Information Regarding Defined Benefit Plans

Information regarding Toyota’s defined benefit plans is as follows:

	Yen in millions
	March 31,
	Japanese plans						Foreign plans
	2019			2020			2019			2020
Change in benefit obligation
Benefit obligation at beginning of year		2,019,310			2,100,073			1,097,981			1,186,897
Service cost		99,838			93,298			46,930			46,869
Interest cost		12,967			10,514			40,708			40,335
Plan participants’ contributions		974			1,014			1,045			2,018
Plan amendments		(1,067	)		(988	)		13			3,308
Net actuarial (gain) loss		67,391			(48,602	)		7,755			(2,865	)
Acquisition and other		(20,786	)		(55,070	)		21,634			(28,548	)
Benefits paid		(78,554	)		(48,796	)		(29,169	)		(40,200	)
Benefit obligation at end of year		2,100,073			2,051,443			1,186,897			1,207,814
Change in plan assets
Fair value of plan assets at beginning of year		1,612,879			1,600,491			815,483			882,784
Actual return on plan assets		3,208			(70,503	)		59,237			13,421
Acquisition and other		(13,705	)		(41,105	)		12,696			(28,068	)
Employer contributions		41,276			38,144			18,952			29,407
Plan participants’ contributions		974			1,014			1,045			2,018
Benefits paid		(44,141	)		(15,010	)		(24,629	)		(30,661	)
Fair value of plan assets at end of year		1,600,491			1,513,031			882,784			868,901
Funded status		499,582			538,412			304,113			338,913

Amounts Recognized in Consolidated Balance Sheet Associated with Defined Benefit Plans

Amounts recognized in the consolidated balance sheets as of March 31, 2019 and 2020 are comprised of the following:

	Yen in millions
	March 31,
	Japanese plans						Foreign plans
	2019			2020			2019			2020
Accrued expenses (Accrued pension and severance costs)		34,298			33,422			3,234			7,934
Accrued pension and severance costs		657,380			639,764			306,026			338,862
Investments and other assets - Other (Prepaid pension and severance costs)		(192,096	)		(134,774	)		(5,147	)		(7,883	)
Net amount recognized		499,582			538,412			304,113			338,913

Amounts Recognized in Accumulated Other Comprehensive Income (Loss)

Amounts recognized in accumulated other comprehensive income (loss) as of March 31, 2019 and 2020 are comprised of the following:

	Yen in millions
	March 31,
	Japanese plans						Foreign plans
	2019			2020			2019			2020
Net actuarial loss		(339,814	)		(383,485	)		(91,072	)		(116,171	)
Prior service costs		29,801			21,538			(1,612	)		(5,352	)
Net transition obligation		—			—			—			—
Net amount recognized		(310,013	)		(361,947	)		(92,684	)		(121,523	)

Projected Benefit Obligation, Accumulated Benefit Obligation and Fair Value of Plan Assets for which Accumulated Benefit Obligations Exceed Plan Assets

The projected benefit obligation and fair value of plan assets for which the projected benefit obligations exceed plan assets are as follows:

	Yen in millions
	March 31,
	Japanese plans				Foreign plans
	2019		2020		2019		2020
Projected benefit obligation		878,009		846,068		681,025		1,025,234
Fair value of plan assets		203,277		188,241		357,583		678,522

The accumulated benefit obligation and fair value of plan assets for which the accumulated benefit obligations exceed plan assets are as follows:

	Yen in millions
	March 31,
	Japanese plans				Foreign plans
	2019		2020		2019		2020
Accumulated benefit obligation		847,017		783,561		515,918		403,810
Fair value of plan assets		198,315		155,345		215,006		93,717

Components of Net Periodic Pension Cost

Components of the net periodic pension cost are as follows:

	Yen in millions
	For the years ended March 31,
	Japanese plans									Foreign plans
	2018			2019			2020			2018			2019			2020
Service cost		88,964			99,838			93,298			35,887			46,930			46,869
Interest cost		13,252			12,967			10,514			37,817			40,708			40,335
Expected return on plan assets		(36,409	)		(38,551	)		(37,813	)		(41,048	)		(37,530	)		(43,003	)
Amortization of prior service costs		(4,226	)		(3,904	)		(4,346	)		313			219			142
Recognized net actuarial loss		7,462			6,927			8,356			5,452			7,102			4,255
Amortization of net transition obligation		—			—			—			—			—			—
Net periodic pension cost		69,043			77,277			70,009			38,421			57,429			48,598

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss)

Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) are as follows:

	Yen in millions
	For the years ended March 31,
	Japanese plans									Foreign plans
	2018			2019			2020			2018			2019			2020
Net actuarial gain (loss)		39,852			(102,734	)		(59,714	)		(17,163	)		13,952			(26,717	)
Recognized net actuarial loss		7,462			6,927			8,356			5,452			7,102			4,255
Prior service costs		58			1,067			988			12			(13	)		(3,308	)
Amortization of prior service costs		(4,226	)		(3,904	)		(4,346	)		313			219			142
Amortization of net transition obligation		—			—			—			—			—			—
Other		(7,979	)		4,610			2,782			9,004			7,289			(3,211	)
Total recognized in other comprehensive income (loss)		35,167			(94,034	)		(51,934	)		(2,382	)		28,549			(28,839	)

Weighted-Average Assumptions Used to Determine Benefit Obligations and Net Periodic Pension Cost

Weighted-average assumptions used to determine benefit obligations as of March 31, 2019 and 2020 are as follows:

	March 31,
	Japanese plans						Foreign plans
	2019			2020			2019			2020
Discount rate		0.6	%		0.6	%		3.8	%		3.5	%
Rate of compensation increase		3.1	%		2.5	%		3.5	%		3.4	%

As of March 31, 2019 and 2020, the parent company and certain subsidiaries in Japan employ “point” based retirement benefit plans and do not use the rates of compensation increase to determine benefit obligations.

Weighted-average assumptions used to determine net periodic pension cost for the years ended March 31, 2018, 2019 and 2020 are as follows:

	For the years ended March 31,
	Japanese plans									Foreign plans
	2018			2019			2020			2018			2019			2020
Discount rate		0.7	%		0.7	%		0.6	%		4.0	%		3.9	%		3.8	%
Expected return on plan assets		2.4	%		2.4	%		2.4	%		6.0	%		5.6	%		5.2	%
Rate of compensation increase		2.9	%		3.3	%		3.1	%		3.8	%		3.6	%		3.5	%

Summary of Fair Value of Classes of Plan Assets

The following table summarizes the fair value of classes of plan assets as of March 31, 2019 and 2020. See note 28 to the consolidated financial statements for three levels of input which are used to measure fair value.

Japanese plans

	Yen in millions
	March 31, 2019
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		531,159		—		—		531,159
Commingled funds		—		192,012		—		192,012
		531,159		192,012		—		723,171
Debt securities
Government bonds		98,578		—		—		98,578
Commingled funds		—		286,783		—		286,783
Other		—		54,652		—		54,652
		98,578		341,435		—		440,013
Insurance contracts		—		226,093		—		226,093
Other		84,208		38,439		4,242		126,889
Investments measured at net asset value		—		—		—		84,325
Total		713,945		797,979		4,242		1,600,491

	Yen in millions
	March 31, 2020
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		467,885		—		—		467,885
Commingled funds		—		135,979		—		135,979
		467,885		135,979		—		603,864
Debt securities
Government bonds		86,212		—		—		86,212
Commingled funds		—		278,394		—		278,394
Other		—		75,644		—		75,644
		86,212		354,038		—		440,250
Insurance contracts		—		226,043		—		226,043
Other		89,986		59,780		6,199		155,965
Investments measured at net asset value		—		—		—		86,909
Total		644,083		775,840		6,199		1,513,031

Foreign plans

	Yen in millions
	March 31, 2019
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		123,875		—		—		123,875
Commingled funds		—		215,386		—		215,386
		123,875		215,386		—		339,261
Debt securities
Government bonds		141,054		—		—		141,054
Commingled funds		—		—		—		—
Other		—		164,877		—		164,877
		141,054		164,877		—		305,931
Insurance contracts		—		—		—		—
Other		10,292		24,810		27,903		63,005
Investments measured at net asset value		—		—		—		174,587
Total		275,221		405,073		27,903		882,784

	Yen in millions
	March 31, 2020
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		111,997		—		—		111,997
Commingled funds		—		186,918		—		186,918
		111,997		186,918		—		298,915
Debt securities
Government bonds		181,702		—		—		181,702
Commingled funds		—		—		—		—
Other		—		170,650		—		170,650
		181,702		170,650		—		352,352
Insurance contracts		—		—		—		—
Other		10,425		24,410		28,251		63,086
Investments measured at net asset value		—		—		—		154,548
Total		304,124		381,978		28,251		868,901

Changes in Level 3 Plan Assets Measured At Fair Value

The following tables summarize the changes in Level 3 plan assets measured at fair value for the years ended March 31, 2018, 2019 and 2020:

Japanese plans

	Yen in millions
	For the years ended March 31,
	2018									2019									2020
	Debt securities			Other			Total			Debt securities			Other			Total			Debt securities		Other			Total
Balance at beginning of year		81			496			577			19			—			19			—		4,242			4,242
Actual return on plan assets		—			(4	)		(4	)		—			(164	)		(164	)		—		(43	)		(43	)
Purchases, sales and settlements		(62	)		(492	)		(554	)		(19	)		—			(19	)		—		—			—
Other		—			—			—			—			4,406			4,406			—		2,000			2,000
Balance at end of year		19			—			19			—			4,242			4,242			—		6,199			6,199

Foreign plans

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
	Other			Other			Other
Balance at beginning of year		30,903			31,288			27,903
Actual return on plan assets		2,024			(4,784	)		891
Purchases, sales and settlements		—			—			—
Other		(1,639	)		1,399			(543	)
Balance at end of year		31,288			27,903			28,251

Expected Benefit Payments Associated with Pension and Postretirement Benefit Plans

The following pension benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

	Yen in millions
Years ending March 31,	Japanese plans		Foreign plans
2021		82,748		43,815
2022		86,207		45,841
2023		87,914		47,645
2024		90,887		49,795
2025		87,909		50,854
from 2026 to 2030		441,675		281,343
Total		877,340		519,293

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Class Shares (Tables)

12 Months Ended

Mar. 31, 2020

Additional Information Regarding Model AA Class Shares

Presented below is additional information regarding the Model AA Class Shares:

Total number of shares issued	:	47,100,000 shares
Issue price	:	10,598 yen per share
Purchase price	:	10,121.09 yen per share
Voting rights	:	Model AA Class Shares shall have voting rights. The number of shares constituting one unit with respect to Model AA Class Shares shall be 100.
Restrictions on transfer	:	Model AA Class Shares shall have restrictions on transfer.
Dividends	:	(1) If the record date falls in the fiscal year ending on March 31, 2016 : 0.5% of the issue price
		(2) If the record date falls in the fiscal year ending on March 31, 2017 through March 31, 2020 : the annual dividend rate for the previous fiscal year plus 0.5% of the issue price
		(3) If the record date falls in the fiscal year ending on March 31, 2021 or later : 2.5% of the issue price
Shareholder’s right	:	(1) Shareholder’s conversion right into Common Shares Shareholders of the Model AA Class Shares may demand TMC to acquire all or a part of their Model AA Class Shares in exchange for Common Shares on the first business day of April and October of every year, starting October 1, 2020.
		(2) Shareholder’s cash put option Shareholders of the Model AA Class Shares may demand TMC to acquire all or a part of their Model AA Class Shares in exchange for cash on the last business day of March, June, September and December of each year, starting on September 1, 2020.
TMC’s right	:	TMC may acquire, on or after April 2, 2021, all of the outstanding Model AA Class Shares in exchange for cash.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Net income	¥ 2,142,329	¥ 1,985,587	¥ 2,586,106
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments	(333,854)	27,016	(120,606)
Unrealized gains (losses) on securities	118,363	(21,165)	(94,559)
Pension liability adjustments	(60,196)	(54,836)	22,315
Other comprehensive income (loss), net of tax	(275,687)	(48,985)	(192,850)
Total comprehensive income	1,866,642	1,936,602	2,393,256
Less - Comprehensive income attributable to noncontrolling interests	(45,878)	(96,458)	(93,096)
Comprehensive income attributable to Toyota Motor Corporation	¥ 1,820,764	¥ 1,840,144	¥ 2,300,160

XML

Net revenues (Summary of Contract Liabilities) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Disaggregation of Revenue [Line Items]
Contract liabilities	¥ 691,954	¥ 675,018

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Segment data (Statement of Cash Flows - Non-financial Services and Financial Services Businesses) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities
Net income	¥ 2,142,329	¥ 1,985,587	¥ 2,586,106
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation	1,605,383	1,792,375	1,734,033
Provision (reversal) for doubtful accounts and credit losses	142,982	80,065	76,069
Pension and severance costs, less payments	15,699	31,645	4,286
Losses on disposal of fixed assets	56,913	35,902	35,289
Unrealized losses (gains) on securities	20,082	339,472	846
Deferred income taxes	192,147	(86,594)	(237,961)
Equity in earnings of affiliated companies	(271,152)	(360,066)	(470,083)
Changes in operating assets and liabilities, and other	(313,740)	(51,789)	494,543
Net cash provided by operating activities	3,590,643	3,766,597	4,223,128
Cash flows from investing activities
Additions to finance receivables	(16,896,588)	(15,884,610)	(15,058,516)
Collection of and proceeds from sales of finance receivables	15,667,462	14,859,103	14,046,312
Additions to fixed assets excluding equipment leased to others	(1,407,832)	(1,452,725)	(1,291,117)
Additions to equipment leased to others	(2,187,299)	(2,286,162)	(2,307,590)
Proceeds from sales of fixed assets excluding equipment leased to others	48,751	65,437	71,820
Proceeds from sales of equipment leased to others	1,391,215	1,385,074	1,211,272
Purchases of marketable securities and security investments	(2,413,087)	(1,840,355)	(3,052,916)
Proceeds from sales of and maturity of marketable securities and security investments	2,370,406	2,698,798	2,523,538
Payment for additional investments in affiliated companies, net of cash acquired	(14,763)	5,010	(576)
Changes in investments and other assets, and other	290,874	(246,811)	197,681
Net cash used in investing activities	(3,150,861)	(2,697,241)	(3,660,092)
Cash flows from financing activities
Proceeds from issuance of long-term debt	5,691,499	5,000,921	4,793,939
Payments of long-term debt	(4,424,923)	(4,442,232)	(4,452,338)
Increase (decrease) in short-term borrowings	291,623	164,282	347,738
Dividends paid to Toyota Motor Corporation class shareholders	(11,186)	(8,690)	(6,194)
Dividends paid to Toyota Motor Corporation common shareholders	(618,801)	(636,116)	(620,698)
Dividends paid to noncontrolling interests	(54,945)	(69,367)	(63,764)
Reissuance (repurchase) of treasury stock	(476,129)	(549,637)	(447,818)
Net cash provided by (used in) financing activities	397,138	(540,839)	(449,135)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents	(131,245)	(41,641)	(43,588)
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents	705,675	486,876	70,313
Cash and cash equivalents and restricted cash and cash equivalents at beginning of year	3,706,515	3,219,639	3,149,326
Cash and cash equivalents and restricted cash and cash equivalents at end of year	4,412,190	3,706,515	3,219,639
Non Financial Services Businesses
Cash flows from operating activities
Net income	1,921,378	1,757,765	2,064,634
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation	861,673	1,033,528	1,010,972
Provision (reversal) for doubtful accounts and credit losses	5,689	(1,375)	(74)
Pension and severance costs, less payments	14,880	30,477	5,027
Losses on disposal of fixed assets	54,549	33,676	35,010
Unrealized losses (gains) on securities	21,069	338,626	459
Deferred income taxes	193,438	(110,346)	64,143
Equity in earnings of affiliated companies	(260,149)	(357,527)	(467,718)
Changes in operating assets and liabilities, and other	(305,705)	(17,488)	205,434
Net cash provided by operating activities	2,506,822	2,707,336	2,917,887
Cash flows from investing activities
Additions to fixed assets excluding equipment leased to others	(1,377,238)	(1,435,964)	(1,276,788)
Additions to equipment leased to others	(155,601)	(137,314)	(155,114)
Proceeds from sales of fixed assets excluding equipment leased to others	47,488	63,955	70,755
Proceeds from sales of equipment leased to others	49,913	60,657	63,402
Purchases of marketable securities and security investments	(2,236,585)	(1,737,107)	(2,273,805)
Proceeds from sales of and maturity of marketable securities and security investments	2,245,119	2,255,635	1,762,189
Payment for additional investments in affiliated companies, net of cash acquired		5,010	(576)
Changes in investments and other assets, and other	(18,895)	(268,946)	260,015
Net cash used in investing activities	(1,445,799)	(1,194,074)	(1,549,922)
Cash flows from financing activities
Proceeds from issuance of long-term debt	235,080	286,085	212,387
Payments of long-term debt	(130,695)	(142,556)	(170,072)
Increase (decrease) in short-term borrowings	51,406	49,161	(122,222)
Dividends paid to Toyota Motor Corporation class shareholders	(11,186)	(8,690)	(6,194)
Dividends paid to Toyota Motor Corporation common shareholders	(618,801)	(636,116)	(620,698)
Dividends paid to noncontrolling interests	(54,945)	(69,367)	(63,764)
Reissuance (repurchase) of treasury stock	(476,129)	(549,637)	(447,818)
Net cash provided by (used in) financing activities	(1,005,270)	(1,071,120)	(1,218,381)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents	(71,467)	(42,454)	(16,124)
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents	(15,714)	399,688	133,460
Cash and cash equivalents and restricted cash and cash equivalents at beginning of year	2,790,212	2,390,524	2,257,064
Cash and cash equivalents and restricted cash and cash equivalents at end of year	2,774,498	2,790,212	2,390,524
Financial Services Business
Cash flows from operating activities
Net income	220,919	227,799	521,473
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation	743,710	758,847	723,061
Provision (reversal) for doubtful accounts and credit losses	137,293	81,440	76,143
Pension and severance costs, less payments	819	1,168	(741)
Losses on disposal of fixed assets	2,364	2,226	279
Unrealized losses (gains) on securities	(987)	846	387
Deferred income taxes	(1,305)	23,742	(302,103)
Equity in earnings of affiliated companies	(11,003)	(2,539)	(2,365)
Changes in operating assets and liabilities, and other	(46,610)	15,557	312,828
Net cash provided by operating activities	1,045,200	1,109,086	1,328,962
Cash flows from investing activities
Additions to finance receivables	(26,668,185)	(26,000,249)	(25,153,088)
Collection of and proceeds from sales of finance receivables	25,557,953	24,925,930	24,117,335
Additions to fixed assets excluding equipment leased to others	(30,594)	(16,761)	(14,329)
Additions to equipment leased to others	(2,031,698)	(2,148,848)	(2,152,476)
Proceeds from sales of fixed assets excluding equipment leased to others	1,263	1,482	1,065
Proceeds from sales of equipment leased to others	1,341,302	1,324,417	1,147,870
Purchases of marketable securities and security investments	(176,502)	(103,248)	(779,111)
Proceeds from sales of and maturity of marketable securities and security investments	125,287	443,163	761,349
Payment for additional investments in affiliated companies, net of cash acquired	(14,763)
Changes in investments and other assets, and other	(20,037)	(4,130)	(106,597)
Net cash used in investing activities	(1,915,974)	(1,578,244)	(2,177,982)
Cash flows from financing activities
Proceeds from issuance of long-term debt	5,466,618	4,747,506	4,666,579
Payments of long-term debt	(4,335,145)	(4,336,250)	(4,314,294)
Increase (decrease) in short-term borrowings	520,468	144,277	461,052
Net cash provided by (used in) financing activities	1,651,941	555,533	813,337
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents	(59,778)	813	(27,464)
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents	721,389	87,188	(63,147)
Cash and cash equivalents and restricted cash and cash equivalents at beginning of year	916,303	829,115	892,262
Cash and cash equivalents and restricted cash and cash equivalents at end of year	¥ 1,637,692	¥ 916,303	¥ 829,115

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CONSOLIDATED BALANCE SHEETS - JPY (¥) ¥ in Millions		Mar. 31, 2020	Mar. 31, 2019
Current assets
Cash and cash equivalents		¥ 4,190,518	¥ 3,574,704
Time deposits		828,220	1,126,352
Marketable securities	[1]	678,731	1,127,160
Trade accounts and notes receivable, less allowance for doubtful accounts of ¥16,370 million in 2019 and ¥23,944 million in 2020		2,094,894	2,372,734
Finance receivables, net		6,614,171	6,647,771
Other receivables		564,854	568,156
Inventories		2,434,918	2,656,396
Prepaid expenses and other current assets		1,236,225	805,964
Total current assets		18,642,531	18,879,237
Noncurrent finance receivables, net		10,423,858	10,281,118
Investments and other assets
Marketable securities and other securities investments	[1]	7,348,651	7,479,926
Affiliated companies		4,123,453	3,313,723
Employees receivables		21,484	21,683
Other		1,518,934	1,275,768
Total investments and other assets		13,012,522	12,091,100
Property, plant and equipment
Land		1,346,988	1,386,308
Buildings		4,730,783	4,802,175
Machinery and equipment		11,939,121	11,857,425
Vehicles and equipment on operating leases		5,929,233	6,139,163
Construction in progress		510,963	651,713
Total property, plant and equipment, at cost		24,457,088	24,836,784
Less - Accumulated depreciation		(13,855,563)	(14,151,290)
Total property, plant and equipment, net		10,601,525	10,685,494
Total assets		52,680,436	51,936,949
Current liabilities
Short-term borrowings		5,286,026	5,344,973
Current portion of long-term debt		4,574,045	4,254,260
Accounts payable		2,434,180	2,645,984
Other payables		1,020,270	1,102,802
Accrued expenses		2,926,052	3,222,446
Income taxes payable		218,117	320,998
Other current liabilities		1,443,687	1,335,475
Total current liabilities		17,902,377	18,226,938
Long-term liabilities
Long-term debt		10,692,898	10,550,945
Accrued pension and severance costs		978,626	963,406
Deferred income taxes		1,043,169	1,014,851
Other long-term liabilities		821,515	615,599
Total long-term liabilities		13,536,208	13,144,801
Total liabilities		31,438,585	31,371,739
Mezzanine equity
Model AA Class Shares, no par value,authorized: 150,000,000 shares in 2019 and 2020;issued: 47,100,000 shares in 2019 and 2020	[2]	504,169	498,073
Toyota Motor Corporation shareholders' equity
Common stock, no par value, authorized: 10,000,000,000 shares in 2019 and 2020; issued: 3,262,997,492 shares in 2019 and 2020	[2]	397,050	397,050
Additional paid-in capital		489,334	487,162
Retained earnings		23,427,613	21,987,515
Accumulated other comprehensive income (loss)		(1,166,273)	(916,650)
Treasury stock, at cost, 430,558,325 shares in 2019 and 496,844,960 shares in 2020		(3,087,106)	(2,606,925)
Total Toyota Motor Corporation shareholders' equity		20,060,618	19,348,152
Noncontrolling interests		677,064	718,985
Total shareholders' equity		20,737,682	20,067,137
Commitments and contingencies
Total liabilities, mezzanine equity and shareholders' equity		¥ 52,680,436	¥ 51,936,949

[1] Marketable securities and Marketable securities and other securities investments for the fiscal year ended March 31, 2020 include securities loaned of ¥156,051 million and ¥2,061,295 million, respectively.

[2] The total number of authorized shares for common stock and Model AA Class Shares is 10,000,000,000 shares.

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Allowance for doubtful accounts and credit losses (Allowance for Credit Losses Relating to Retail Receivables, Finance Lease Receivables and Wholesale and Other Dealer Loan Receivables Portfolio Segments) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for credit losses at beginning of year	¥ 183,085
Allowance for credit losses at end of year	230,178	¥ 183,085
Retail Receivables Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for credit losses at beginning of year	117,594	103,457	¥ 104,354
Provision for credit losses, net of reversal	107,784	68,470	52,891
Charge-offs	(82,613)	(72,657)	(74,868)
Recoveries	20,277	20,485	20,511
Other	(11,552)	(2,161)	569
Allowance for credit losses at end of year	151,490	117,594	103,457
Finance Lease Receivables Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for credit losses at beginning of year	26,483	28,817	23,962
Provision for credit losses, net of reversal	9,716	710	7,115
Charge-offs	(3,267)	(2,903)	(2,708)
Recoveries	353	345	315
Other	(2,386)	(486)	133
Allowance for credit losses at end of year	30,899	26,483	28,817
Wholesale and Other Dealer Loan Receivables Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for credit losses at beginning of year	39,008	36,800	30,896
Provision for credit losses, net of reversal	12,544	3,990	6,497
Charge-offs	(105)	(1,111)	(823)
Recoveries	33	45	59
Other	(3,691)	(716)	171
Allowance for credit losses at end of year	¥ 47,789	¥ 39,008	¥ 36,800

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Finance receivables (Amount of Finance Receivables Segregated into Aging Categories Based on Number of Days Outstanding) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	¥ 17,966,060	¥ 17,894,598
Retail Receivables Portfolio Segment
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	12,525,020	12,554,265
Total	12,795,076	12,768,305
Retail Receivables Portfolio Segment | 30-59 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	176,991	141,111
Retail Receivables Portfolio Segment | 60-89 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	44,922	35,090
Retail Receivables Portfolio Segment | 90 days or greater past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	48,143	37,839
Finance Lease Receivables Portfolio Segment
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,675,523	1,625,893
Total	1,691,371	1,636,536
Finance Lease Receivables Portfolio Segment | 30-59 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	7,670	4,972
Finance Lease Receivables Portfolio Segment | 60-89 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	2,426	1,396
Finance Lease Receivables Portfolio Segment | 90 days or greater past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	5,752	4,275
Wholesale and Other Dealer Loan Receivables Portfolio Segment
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	3,479,613	3,489,757
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,642,637	1,806,305
Total	1,654,788	1,806,989
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale | 30-59 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	2,008	191
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale | 60-89 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	1,132	100
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale | 90 days or greater past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	9,011	393
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	857,407	873,427
Total	857,693	873,533
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Real estate | 30-59 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	47
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Real estate | 60-89 days past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	43
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Real estate | 90 days or greater past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	196	106
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Working capital
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	967,105	808,755
Total	967,132	809,235
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Working capital | 90 days or greater past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	¥ 27	¥ 480

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Vehicles and equipment on operating leases (Summary of Vehicles and Equipment on Operating Lease) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Property Subject to or Available for Operating Lease [Line Items]
Less - Deferred income and other	¥ (241,610)	¥ (259,124)
Vehicles and equipment on operating leases, gross	5,929,233	6,139,163
Less - Accumulated depreciation	(1,374,172)	(1,428,779)
Less - Allowance for credit losses	(12,171)	(13,314)
Vehicles and equipment on operating leases, net	4,542,890	4,697,070
Vehicles
Property Subject to or Available for Operating Lease [Line Items]
Vehicles and equipment on operating leases, gross	6,153,695	6,383,788
Equipment
Property Subject to or Available for Operating Lease [Line Items]
Vehicles and equipment on operating leases, gross	¥ 17,148	¥ 14,499

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Affiliated companies and variable interest entities (Account Balances and Transactions with Affiliated Companies) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Schedule of Equity Method Investments [Line Items]
Trade accounts and notes receivable, and other receivables	¥ 357,849	¥ 362,831
Accounts payable and other payables	780,935	845,755
Net revenues	2,423,338	2,213,236	¥ 2,004,632
Purchases	¥ 6,781,279	¥ 6,431,464	¥ 5,749,430

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Other receivables

12 Months Ended

Mar. 31, 2020

Other receivables

7. Other receivables:

Other receivables relate to arrangements with certain component manufacturers whereby Toyota procures inventory for these component manufactures and is reimbursed for the related purchases.

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Supplemental cash flow information

12 Months Ended

Mar. 31, 2020

Supplemental cash flow information

3. Supplemental cash flow information:

Cash payments for income taxes were ¥500,214 million, ¥836,619 million and ¥752,205  million for the years ended March 31, 2018, 2019 and 2020, respectively. Interest payments during the years ended March 31, 2018, 2019 and 2020 were ¥422,720 million, ¥507,812 million and ¥529,555 million, respectively.

Finance lease obligations of ¥4,467 million and ¥6,086 million were incurred for the years ended March 31, 2018 and 2019, respectively. See note 23 to the consolidated financial statements for finance lease obligations for the year ended March 31, 2020.

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Employee benefit plans (Expected Benefit Payments Associated with Pension and Postretirement Benefit Plans) (Detail) ¥ in Millions	Mar. 31, 2020 JPY (¥)
Japan
Schedule of Pension Expected Future Benefit Payments [Line Items]
2021	¥ 82,748
2022	86,207
2023	87,914
2024	90,887
2025	87,909
from 2026 to 2030	441,675
Total	877,340
Foreign Plans
Schedule of Pension Expected Future Benefit Payments [Line Items]
2021	43,815
2022	45,841
2023	47,645
2024	49,795
2025	50,854
from 2026 to 2030	281,343
Total	¥ 519,293

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Derivative financial instruments - Additional Information (Detail) ¥ in Millions	Mar. 31, 2020 JPY (¥)
Derivative [Line Items]
Credit risk derivatives, fair value, net liability	¥ 6,750
Credit risk derivatives, aggregate fair value of assets posted	230,830
Maximum amount of assets to be posted if the ratings decline below specified thresholds	¥ 6,750

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Other financial instruments

12 Months Ended

Mar. 31, 2020

Other financial instruments

22. Other financial instruments:

Toyota has certain financial instruments, including financial assets and liabilities which arose in the normal course of business. These financial instruments are executed with creditworthy financial institutions, and virtually all foreign currency contracts are denominated in U.S. dollars, euros and other currencies of major developed countries. Financial instruments involve, to varying degrees, market risk as instruments are subject to price fluctuations, and elements of credit risk in the event a counterparty should default. In the unlikely event the counterparties fail to meet the contractual terms of a foreign currency or an interest rate instrument, Toyota’s risk is limited to the fair value of the instrument. Although Toyota may be exposed to losses in the event of non-performance by counterparties on financial instruments, it does not anticipate significant losses due to the nature of its counterparties. Counterparties to Toyota’s financial instruments represent, in general, international financial institutions. Additionally, Toyota does not have a significant exposure to any individual counterparty. Toyota believes that the overall credit risk related to its financial instruments is not significant.

The following table summarizes the estimated fair values of Toyota’s financial instruments, excluding marketable securities, other securities investments, investments and other assets in affiliated companies and derivative financial instruments. See note 28 to the consolidated financial statements for three levels of input which are used to measure fair value.

	Yen in millions
	March 31, 2019
				Estimated fair value
	Carrying amount			Level 1		Level 2			Level 3			Total
Assets (Liabilities)
Cash and cash equivalents		3,574,704			2,980,504		594,200			—			3,574,704
Time deposits		1,126,352			—		1,126,352			—			1,126,352
Total finance receivables, net		15,450,745			—		—			15,668,542			15,668,542
Other receivables		568,156			—		—			568,156			568,156
Short-term borrowings		(5,344,973	)		—		(5,285,807	)		(59,166	)		(5,344,973	)
Long-term debt including the current portion		(14,786,184	)		—		(12,786,541	)		(1,833,623	)		(14,620,164	)

	Yen in millions
	March 31, 2020
				Estimated fair value
	Carrying amount			Level 1		Level 2			Level 3			Total
Assets (Liabilities)
Cash and cash equivalents		4,190,518			3,598,318		592,200			—			4,190,518
Time deposits		828,220			—		828,220			—			828,220
Total finance receivables, net		15,511,294			—		—			15,703,737			15,703,737
Other receivables		564,854			—		—			564,854			564,854
Short-term borrowings		(5,286,026	)		—		(5,274,071	)		(11,955	)		(5,286,026	)
Long-term debt including the current portion		(15,238,006	)		—		(12,644,187	)		(1,966,646	)		(14,610,833	)

Cash and cash equivalents and time deposits -

In the normal course of business, substantially all cash and cash equivalents and time deposits are highly liquid and are carried at amounts which approximate fair value due to its short duration. Cash equivalents and time deposits include negotiable certificate of deposit measured at fair value on a recurring basis. Where money market funds produce a daily net asset value in an active market, this value is used to determine the fair value of the fund investment, and the investment is classified in Level 1. All other types of cash and cash equivalents and time deposits are classified in Level 2.

Finance receivables, net -

The fair values of finance receivables are estimated by discounting expected cash flows to present value using internal assumptions, including prepayment speeds, expected credit losses and collateral value. Certain impaired finance receivables are measured at fair value on a nonrecurring basis based on collateral values.

As unobservable inputs are utilized, finance receivables are classified in Level 3.

Other receivables -

Other receivables are short-term receivables. These receivables are carried at amounts which approximate fair value, and the difference between the carrying amount and the fair value is not material. These receivables are classified in Level 3.

Short-term borrowings and long-term debt -

The fair values of short-term borrowings and long-term debt including the current portion, except for secured loans provided by securitization transactions using special-purpose entities, are estimated based on the discounted amounts of future cash flows using Toyota’s current borrowing rates for similar liabilities. As these inputs are observable, these debts are classified in Level 2.

The fair values of the secured loans provided by securitization transactions are estimated based on current market rates and credit spreads for debt with similar maturities. Internal assumptions including prepayment speeds and expected credit losses are used to estimate the timing of cash flows to be paid on the underlying securitized assets. As these valuations utilize unobservable inputs, the secured loans are classified in Level 3. See note 11 to the consolidated financial statements for information regarding the secured loans.

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Accumulated other comprehensive income (Components of Accumulated Other Comprehensive Income (Loss) and Related Changes, Net of Taxes) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balances	¥ 20,067,137	¥ 19,430,102	¥ 18,183,076
Effect of change in accounting policy		(27,538)
Other comprehensive income (loss) before reclassifications, net of taxes	(286,079)	(42,788)	(170,629)
Reclassifications, net of taxes	10,392	(6,197)	(22,221)
Other comprehensive income (loss), net of tax	(275,687)	(48,985)	(192,850)
Less - Other comprehensive income attributable to noncontrolling interests	20,268	6,256	(973)
Equity transaction with noncontrolling interests and other	(28,939)	(2,121)	(1,659)
Balances	20,737,682	20,067,137	19,430,102
Foreign currency translation adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balances	(649,532)	(679,085)	(560,108)
Effect of change in accounting policy		105
Other comprehensive income (loss) before reclassifications, net of taxes	(333,854)	25,639	(113,942)
Reclassifications, net of taxes		1,377	(6,664)
Other comprehensive income (loss), net of tax	(333,854)	27,016	(120,606)
Less - Other comprehensive income attributable to noncontrolling interests	20,668	2,432	1,629
Equity transaction with noncontrolling interests and other	3,432
Balances	(959,286)	(649,532)	(679,085)
Unrealized gains (losses) on securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balances	(1,252)	1,329,584	1,426,003
Effect of change in accounting policy		(1,309,725)
Other comprehensive income (loss) before reclassifications, net of taxes	113,978	(6,139)	(72,501)
Reclassifications, net of taxes	4,385	(15,026)	(22,058)
Other comprehensive income (loss), net of tax	118,363	(21,165)	(94,559)
Less - Other comprehensive income attributable to noncontrolling interests	40	54	(2,022)
Equity transaction with noncontrolling interests and other	(124)		162
Balances	117,027	(1,252)	1,329,584
Pension liability adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balances	(265,866)	(214,800)	(224,973)
Other comprehensive income (loss) before reclassifications, net of taxes	(66,203)	(62,288)	15,814
Reclassifications, net of taxes	6,007	7,452	6,501
Other comprehensive income (loss), net of tax	(60,196)	(54,836)	22,315
Less - Other comprehensive income attributable to noncontrolling interests	(440)	3,770	(580)
Equity transaction with noncontrolling interests and other	2,488		(11,562)
Balances	(324,014)	(265,866)	(214,800)
Accumulated other comprehensive income (loss)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balances	(916,650)	435,699	640,922
Effect of change in accounting policy		(1,309,620)
Equity transaction with noncontrolling interests and other	5,796		(11,400)
Balances	¥ (1,166,273)	¥ (916,650)	¥ 435,699

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Net revenues

12 Months Ended

Mar. 31, 2020

Net revenues

26. Net revenues

(1) Summary by business segments and products

The table below shows Toyota’s net revenues from external customers by business and by product category.

	Yen in millions
	For the year ended March 31, 2019		For the year ended March 31, 2020
Sales of products
Automotive
Vehicles		23,066,190	22,852,916
Parts and components for overseas production		625,483	603,928
Parts and components for after service		2,093,437	2,103,478
Other		1,249,382	1,274,163
Total automotive		27,034,492	26,834,485
All other		1,070,846	925,264
Total sales of products		28,105,338	27,759,749
Financial services		2,120,343	2,170,243
Total net revenues		30,225,681	29,929,992

The majority of sales of products are revenues recognized from contracts with customers based on ASC 606 “Revenue from Contracts with Customers,” and receivables related to such revenues are recognized as “Trade accounts and notes receivable, less allowance for doubtful accounts.”

For the year ended March 31, 2019 and 2020, ¥84,230 million and ¥85,192 million of financial service revenues were accounted for under ASC 606 “Revenue from Contracts with Customers.”

The breakdown of income from leases included in financial service revenues is as follows;

	Yen in millions
	For the year ended March 31, 2019		For the year ended March 31, 2020
Finance leases
Financial income related to net lease investment		91,703		98,865
Operating leases		1,056,080		1,051,804
Total		1,147,783		1,150,669

(2) Contract liabilities

Contract liabilities consist of the following:

	Yen in millions
	March 31, 2019		March 31, 2020
Contract liabilities		675,018		691,954

Contract liabilities are mainly related to advances received from customers. On the consolidated financial statements, contract liabilities are included in “Other current liabilities” or “Other long-term liabilities.” For the year ended March 31, 2019 and 2020, the amount of revenue recognized which were included in the contract liability balance as of April 1, 2018 and 2019 were ¥336,206 million and ¥366,655 million.

(3) Performance obligations

As of March 31, 2020, which is the end of the reporting period, the aggregate amount of transaction prices allocated to unsatisfied performance obligations related to contracts that have original expected durations in excess of one year was ¥589,844 million.

The main contents of unsatisfied performance obligations related to contracts are insurance revenues and maintenance revenues.

For insurance revenues, Toyota receives payment agreed upon in the contract at the inception of the contract, and revenue is recognized over the term of the contract, which ranges from 3 to 120 months. As of March 31, 2020, the unsatisfied performance obligations related to insurance revenues was ¥223,754 million, and Toyota expects to recognize as revenue ¥65,168 million in fiscal 2021, and ¥158,586 million thereafter.

For maintenance revenues, Toyota receives payment agreed upon in the contract at the inception of the contract, and revenue is recognized over the term of the contract, which ranges from 18 to 84 months.

Unsatisfied performance obligations for sales of products related to contracts that have an original expected duration of one year or less have been excluded from this disclosure.

XML

Class Shares (Additional Information Regarding Model AA Class Shares) (Parenthetical) (Detail) - Model AA Class Shares	Jul. 24, 2015
If the record date falls in the fiscal year ending on March 31, 2016
Class of Stock [Line Items]
Dividends rate	0.50%
If the record date falls in the fiscal year ending on March 31, 2017 through March 31, 2020
Class of Stock [Line Items]
Dividends rate	0.50%
If the record date falls in the fiscal year ending on March 31, 2021 or later
Class of Stock [Line Items]
Dividends rate	2.50%

XML

Summary of significant accounting policies (Policies)

12 Months Ended

Mar. 31, 2020

Basis of consolidation and accounting for investments in affiliated companies

Basis of consolidation and accounting for investments in affiliated companies -

The consolidated financial statements include the accounts of the parent company, its majority-owned subsidiary companies and variable interest entities of which Toyota is the primary beneficiary. All significant intercompany transactions and accounts have been eliminated. Investments in affiliated companies in which Toyota exercises significant influence, but which it does not control, are stated at cost plus equity in undistributed earnings. Consolidated net income includes Toyota’s equity in current earnings of such companies, after elimination of unrealized intercompany profits. Investments in such companies are reduced to fair value if a decline in market value is determined other-than-temporary.

Estimates

Estimates -

The preparation of Toyota’s consolidated financial statements in conformity with U.S.GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The more significant estimates include: product warranties, liabilities accrued for recalls and other safety measures, allowance for doubtful accounts and credit losses, residual values for leased assets, impairment of long-lived assets, pension costs and obligations, fair value of derivative financial instruments, other-than-temporary losses on debt securities, litigation liabilities and valuation allowance for deferred tax assets.

Translation of foreign currencies

Translation of foreign currencies -

All asset and liability accounts of foreign subsidiaries and affiliated companies are translated into Japanese yen at appropriate year-end current exchange rates and all income and expense accounts of those subsidiaries are translated at the average exchange rates for each period. The foreign currency translation adjustments are included as a component of accumulated other comprehensive income.

Foreign currency receivables and payables are translated at appropriate year-end current exchange rates and the resulting transaction gains or losses are recorded in operations currently.

Revenue recognition

Revenue recognition -

In the automotive operations, performance obligations are considered to be satisfied when completed vehicles and parts are delivered to the agreed locations with dealers. For parts for overseas production, it is when

they are loaded on a ship to foreign manufacturing companies. We do not have any material significant payment terms as payment is received at or shortly after the point of sale.

Toyota’s sales incentive programs principally consist of cash payments to dealers calculated based on vehicle volume or a model sold by a dealer during a certain period of time. Toyota accrues these incentives as revenue reductions upon the sale of a vehicle corresponding to the program by the amount determined in the related incentive program utilizing the most likely outcome method.

The sale of certain vehicles includes a contractual right, which entitles customers to free vehicle maintenance. We use an observable price to determine the stand-alone selling price for separate performance obligations or a cost plus margin approach when one is not available. Such revenues from free maintenance contracts are deferred and recognized as revenue over the period of the contract in proportion to the costs expected to be incurred in satisfying the obligations under the contract.

Revenues from the sales of vehicles under which Toyota conditionally guarantees the minimum resale value are recognized on a pro rata basis from the date of sale to the first exercise date of the guarantee in accordance with lease accounting. The underlying vehicles of these transactions are recorded as assets and are depreciated in accordance with Toyota’s depreciation policy.

We have elected to recognize the cost of transport service activities after the customer gains control as expenses at the time that control of products transfers.

Revenues from retail financing contracts and finance leases are recognized using the effective yield method. Revenues from operating leases are recognized on a straight-line basis over the lease term.

All other operations business of Toyota includes the design, manufacture and sales of housing. Certain revenues from the housing business, such as those of ordered housing are recognized only to the extent of the costs incurred until such time that it can reasonably measure the outcome of the performance obligation.

If the period between satisfaction of the performance obligation and receipt of consideration is expected to be within one year or less, as a practical expedient, we do not adjust the promised amount of consideration for the effects of a significant financing component.

Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities.

Other costs

Other costs -

Advertising and sales promotion costs are expensed as incurred. Advertising costs were ¥509,653 million, ¥490,093 million and ¥470,849 million for the years ended March 31, 2018, 2019 and 2020, respectively.

Toyota generally warrants its products against certain manufacturing and other defects. Provisions for product warranties are provided for specific periods of time and/or usage of the product and vary depending upon the nature of the product, the geographic location of the sale and other factors. Toyota records a provision for estimated product warranty costs at the time the related sale is recognized based on estimates that Toyota will incur to repair or replace product parts that fail while under warranty. The amount of accrued estimated warranty costs is primarily based on historical experience as to product failures as well as current information on repair costs. The amount of warranty costs accrued also contains an estimate of warranty claim recoveries to be received from suppliers.

In addition to product warranties above, Toyota accrues for costs of recalls and other safety measures based on management’s estimates when it is probable a liability has been incurred and the amount of loss can be reasonably estimated. Toyota mainly employs an estimation model, to accrue at the time of vehicle sale, an amount that represents management’s best estimate of expenses related to future recalls and other safety measures. The estimation model for recalls and other safety measures takes into account Toyota’s historical experience of recalls and other safety measures.

Litigation liabilities are established to cover probable losses on various lawsuits based on the information currently available. Attorneys’ fees are expensed as incurred.

Research and development costs are expensed as incurred. Research and development costs were ¥1,064,269 million, ¥1,048,882 million and ¥1,110,369 million for the years ended March 31, 2018, 2019 and 2020, respectively.

Restricted cash and cash equivalents

Restricted cash and cash equivalents-

Cash and cash equivalents include all highly liquid investments with original maturities of three months or less, that are readily convertible to known amounts of cash and are so near maturity that they present insignificant risk of changes in value because of changes in interest rates. Restricted cash and cash equivalents mainly include customer collections on securitized receivables to be distributed to investors as payments on the related secured debt.

Marketable securities and other securities investments

Marketable securities and other securities investments -

Marketable securities and other securities investments consist of debt and equity securities. Debt securities designated as available-for-sale are carried at fair value and the difference between fair value and acquisition cost is reflected as a component of accumulated other comprehensive income in shareholders’ equity, net of applicable taxes. Individual securities classified as available-for-sale are reduced to fair value for other-than-temporary declines in market value. In determining if a decline in value is other-than-temporary, Toyota considers the length of time during and the extent to which the fair value has been less than the carrying value, the financial condition and prospects of the entity issuing such securities and Toyota’s ability and intent to retain its investment in the entity for a period of time sufficient to allow for any anticipated recovery in market value. Realized gains and losses, which are determined based on the average-cost method, are reflected in the consolidated statements of income when realized.

Changes in fair value on equity securities with readily determinable fair values are recognized in net income. Equity securities without readily determinable fair values are measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

Finance receivables

Finance receivables -

Finance receivables recorded on Toyota’s consolidated balance sheets are comprised of the unpaid principal balance, plus accrued interest, less charge-offs, net of any unearned income and deferred origination costs and the allowance for credit losses. Deferred origination costs are amortized so as to approximate a level rate of return over the term of the related contracts.

The determination of portfolio segments is based primarily on the qualitative consideration of the nature of Toyota’s business operations and finance receivables. The three portfolio segments within finance receivables are as follows:

Retail receivables portfolio segment -

The retail receivables portfolio segment consists of retail installment sales contracts acquired mainly from dealers (“auto loans”) including credit card loans. These contracts acquired must first meet specified credit standards. Thereafter, Toyota retains responsibility for contract collection and administration.

The contract periods of auto loans primarily range from 2 to 7 years. Toyota acquires security interests in the vehicles financed and has the right to repossess vehicles if customers fail to meet their contractual obligations. Almost all auto loans are non-recourse, which relieves the dealers from financial responsibility in the event of repossession.

Toyota classifies retail receivables portfolio segment into one class based on common risk characteristics associated with the underlying finance receivables, the similarity of the credit risks, and the quantitative materiality.

Finance lease receivables portfolio segment -

Toyota acquires new vehicle lease contracts originated primarily through dealers. The contract periods of these primarily range from 2 to 5 years. Lease contracts acquired must first meet specified credit standards after which Toyota assumes ownership of the leased vehicle. Toyota is responsible for contract collection and administration during the lease period.

Toyota is generally permitted to take possession of the vehicle upon a default by the lessee. The residual value is estimated at the time the vehicle is first leased. Vehicles returned to Toyota at the end of their leases are sold by auction.

Toyota classifies finance lease receivables portfolio segment into one class based on common risk characteristics associated with the underlying finance receivables and the similarity of the credit risks

Wholesale and other dealer loan receivables portfolio segment -

Toyota provides wholesale financing to qualified dealers to finance inventories. Toyota acquires security interests in vehicles financed at wholesale. In cases where additional security interests would be required, Toyota takes dealership assets or personal assets, or both, as additional security. If a dealer defaults, Toyota has the right to liquidate any assets acquired and seek legal remedies.

Toyota also makes term loans to dealers for business acquisitions, facilities refurbishment, real estate purchases and working capital requirements. These loans are typically secured with liens on real estate, other dealership assets and/or personal assets of the dealers.

Toyota classifies wholesale and other dealer loan receivables portfolio segment into three classes of wholesale, real estate and working capital, based on the risk characteristics associated with the underlying finance receivables.

A receivable account balance is considered impaired when, based on current information and events, it is probable that Toyota will be unable to collect all amounts due according to the terms of the contract. Factors such as payment history, compliance with terms and conditions of the underlying loan agreement and other subjective factors related to the financial stability of the borrower are considered when determining whether a loan is impaired. Impaired finance receivables include certain nonaccrual receivables for which a specific reserve has been assessed. An account modified as a troubled debt restructuring is considered to be impaired. A troubled debt restructuring occurs when an account is modified through a concession to a borrower experiencing financial difficulty.

All classes of wholesale and other dealer loan receivables portfolio segment are placed on nonaccrual status when full payment of principal or interest is in doubt, or when principal or interest is 90 days or more

contractually past due, whichever occurs first. Collateral dependent loans are placed on nonaccrual status if collateral is insufficient to cover principal and interest. Interest accrued but not collected at the date a receivable is placed on nonaccrual status is reversed against interest income. In addition, the amortization of net deferred fees is suspended.

Interest income on nonaccrual receivables is recognized only to the extent it is received in cash. Accounts are restored to accrual status only when interest and principal payments are brought current and future payments are reasonably assured. Receivable balances are written-off against the allowance for credit losses when it is probable that a loss has been realized. Retail receivables class and finance lease receivables class are not placed generally on nonaccrual status when principal or interest is 90 days or more past due. However, these receivables are generally written-off against the allowance for credit losses when payments due are no longer expected to be received or the account is 120 days contractually past due, whichever occurs first.

As of March 31, 2019 and 2020, finance receivables on nonaccrual status are as follows:

	Yen in millions
	March 31,
	2019		2020
Retail		9,401		10,434
Finance leases		2,431		3,300
Wholesale		18,217		13,023
Real estate		18,281		10,703
Working capital		—		7,712
		48,330		45,172

As of March 31, 2019 and 2020, finance receivables 90 days or more past due and accruing are as follows:

	Yen in millions
	March 31,
	2019		2020
Retail		28,438		37,709
Finance leases		3,821		5,161
		32,259		42,870

Allowance for credit losses

Allowance for credit losses -

Allowance for credit losses is established to cover probable losses on finance receivables and vehicles and equipment on operating leases, resulting from the inability of customers to make required payments. Provision for credit losses is included in selling, general and administrative expenses.

The allowance for credit losses is based on a systematic, ongoing review and evaluation performed as part of the credit-risk evaluation process, historical loss experience, the size and composition of the portfolios, current economic events and conditions, the estimated fair value and adequacy of collateral and other pertinent factors. Vehicles and equipment on operating leases are not within the scope of accounting guidance governing the disclosure of portfolio segments.

Retail receivables portfolio segment -

Toyota calculates allowance for credit losses to cover probable losses on retail receivables by applying reserve rates to such receivables. Reserve rates are calculated mainly by historical loss experience, current economic events and conditions and other pertinent factors.

Finance lease receivables portfolio segment -

Toyota calculates allowance for credit losses to cover probable losses on finance lease receivables by applying reserve rates to such receivables. Reserve rates are calculated mainly by historical loss experience, current economic events and conditions and other pertinent factors such as used car markets.

Wholesale and other dealer loan receivables portfolio segment -

Toyota calculates allowance for credit losses to cover probable losses on wholesale and other dealer loan receivables by applying reserve rates to such receivables. Reserve rates are calculated mainly by financial conditions of the dealers, terms of collateral setting, current economic events and conditions and other pertinent factors.

Toyota establishes specific reserves to cover the estimated losses on individually impaired receivables within the wholesale and other dealer loan receivables portfolio segment. Specific reserves on impaired receivables are determined by the present value of expected future cash flows or the fair value of collateral when it is probable that such receivables will be unable to be fully collected. The fair value of the underlying collateral is used if the receivable is collateral-dependent. The receivable is determined collateral-dependent if the repayment of the loan is expected to be provided by the underlying collateral. For the receivables in which the fair value of the underlying collateral was in excess of the outstanding balance, no allowance was provided.

Troubled debt restructurings in the retail receivables and finance lease receivables portfolio segments are specifically identified as impaired and aggregated with their respective portfolio segments when determining the allowance for credit losses. Impaired loans in the retail receivables and finance lease receivables portfolio segments are insignificant for individual evaluation and Toyota has determined that allowance for credit losses for each of the retail receivables and finance lease receivables portfolio segments would not be materially different if they had been individually evaluated for impairment.

Specific reserves on impaired receivables within the wholesale and other dealer loan receivables portfolio segment are recorded by an increase to the allowance for credit losses based on the related measurement of impairment. Related collateral, if recoverable, is repossessed and sold and the account balance is written-off.

Any shortfall between proceeds received and the carrying cost of repossessed collateral is charged to the allowance. Recoveries are reversed from the allowance for credit losses.

Allowance for residual value losses

Allowance for residual value losses -

Toyota is exposed to risk of loss on the disposition of off-lease vehicles to the extent that sales proceeds are not sufficient to cover the carrying value of the leased asset at lease termination. Toyota maintains an allowance to cover probable estimated losses related to unguaranteed residual values on its owned portfolio. The allowance is evaluated considering projected vehicle return rates and projected loss severity. Factors considered in the determination of projected return rates and loss severity include historical and market information on used vehicle sales, trends in lease returns and new car markets, and general economic conditions. Management evaluates the foregoing factors, develops several potential loss scenarios, and reviews allowance levels to determine whether reserves are considered adequate to cover the probable range of losses.

The allowance for residual value losses is maintained in amounts considered by Toyota to be appropriate in relation to the estimated losses on its owned portfolio. Upon disposal of the assets, the allowance for residual losses is adjusted for the difference between the net book value and the proceeds from sale.

Inventories

Inventories -

Inventories are valued at cost, not in excess of net realizable value, cost being determined on the “average-cost” basis, except for the cost of finished products carried by certain subsidiary companies which is determined on the “specific identification” basis or “last-in, first-out” (“LIFO”) basis. Inventories valued on the LIFO basis totaled ¥470,208 million and ¥291,639 million at March 31, 2019 and 2020, respectively. Had the “first-in, first-out” basis been used for those companies using the LIFO basis, inventories would have been ¥25,302 million and ¥21,194 million higher than reported at March 31, 2019 and 2020, respectively.

Property, plant and equipment

Property, plant and equipment -

Property, plant and equipment are stated at cost. Major renewals and improvements are capitalized; minor replacements, maintenance and repairs are charged to current operations. Depreciation of property, plant and equipment is computed on the straight-line method at rates based on estimated useful lives of the respective assets according to general class, type of construction and use. The estimated useful lives range from 2 to 65 years for buildings and from 2 to 20 years for machinery and equipment.

Vehicles and equipment on operating leases to third parties are originated by dealers and acquired by certain consolidated subsidiaries. Such subsidiaries are also the lessors of certain property that they acquire directly. Vehicles and equipment on operating leases are depreciated primarily on a straight-line method over the lease term, generally from 2 to 5 years, to the estimated residual value. Incremental direct costs incurred in connection with the acquisition of operating lease contracts are capitalized and amortized on a straight-line method over the lease term. 

Leases

Leases -

At the inception of a contract Toyota assesses whether the contract is, or contains, a lease.

Lessee -

Toyota recognizes a right of use asset and a lease liability at the lease commencement date, for finance leases and operating leases. After the commencement date for finance leases, Toyota applies a cost model and subsequently depreciates the right of use asset using the straight-line method from the commencement date to the earlier of the end of the useful life of the right of use asset or the end of the lease term. Operating lease expenses are recognized on a straight-line basis over the lease term after the commencement date. Lease liabilities are measured at amortized cost using the effective interest method. Toyota uses its incremental borrowing rate as of the commencement date as a discount rate to measure lease liabilities. Many lease contracts relating to land and buildings entered by Toyota include extension options that can be exercisable by Toyota for various purposes such as to ensure the business flexibility. Toyota assesses whether it is reasonably certain to exercise an extension option, and if it assesses it to be reasonably certain, the extension option is included in the lease term.

Toyota recognizes lease payments associated with lease terms of 12 months or less as an expense on a straight-line basis over the lease term.

Lessor -

With respect to lessor lease transactions, Toyota determines at the commencement of the lease whether each lease is a finance lease or operating lease. A lease is classified as a finance lease if it transfers substantially all of the risks and rewards incidental to the ownership of an underlying asset. Otherwise leases are classified as operating leases. Toyota recognizes the operating lease payments in profit or loss on a straight-line basis over the lease term.

Long-lived assets

Long-lived assets -

Toyota reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset group exceeds the estimated undiscounted cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess of the carrying value of the asset group over its fair value. Fair value is determined mainly using a discounted cash flow valuation method.

Goodwill and intangible assets

Goodwill and intangible assets -

Goodwill is not material to Toyota’s consolidated balance sheets.

Intangible assets consist mainly of software. Intangible assets with a definite life are amortized on a straight-line basis with estimated useful lives mainly of 5 years. Intangible assets with an indefinite life are tested for impairment whenever events or circumstances indicate that a carrying amount of an asset (asset group) may not be recoverable.

An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted cash flows used in determining the fair value of the asset. The amount of the impairment loss to be recorded is generally determined by the difference between the fair value of the asset using a discounted cash flow valuation method and the current book value.

Employee benefit obligations

Employee benefit obligations -

Toyota has both defined benefit and defined contribution plans for employees’ retirement benefits. Retirement benefit obligations are measured by actuarial calculations in accordance with U.S.GAAP. The funded status of the defined benefit postretirement plans is recognized on the consolidated balance sheets as prepaid pension and severance costs or accrued pension and severance costs, and the funded status change is recognized in the year in which it occurs through other comprehensive income.

Environmental matters

Environmental matters -

Environmental expenditures relating to current operations are expensed or capitalized as appropriate. Expenditures relating to existing conditions caused by past operations, which do not contribute to current or future revenues, are expensed. Liabilities for remediation costs are recorded when they are probable and reasonably estimable, generally no later than the completion of feasibility studies or Toyota’s commitment to a plan of action. The cost of each environmental liability is estimated by using current technology available and various engineering, financial and legal specialists within Toyota based on current law. Such liabilities do not reflect any offset for possible recoveries from insurance companies and are not discounted. There were no material changes in these liabilities for all periods presented.

Income taxes

Income taxes -

The provision for income taxes is computed based on the pretax income included in the consolidated statements of income. The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.

Derivative financial instruments

Derivative financial instruments -

Toyota employs derivative financial instruments, including forward foreign currency exchange contracts, foreign currency options, interest rate swaps, interest rate currency swap agreements and interest rate options to manage its exposure to fluctuations in interest rates and foreign currency exchange rates. All derivative financial instruments are recorded on the consolidated balance sheets at fair value, taking into consideration the effects of legally enforceable master netting agreements that allow us to net settle positive and negative positions and offset cash collateral held with the same counterparty on a net basis. Toyota does not use derivatives for speculation or trading purposes. Changes in the fair value of derivatives are recorded each period in current earnings or through other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and the type of hedge transaction.

Net income attributable to Toyota Motor Corporation per common share

Net income attributable to Toyota Motor Corporation per common share -

Basic net income attributable to Toyota Motor Corporation per common share is calculated by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding during the reported period. The calculation of diluted net income attributable to Toyota Motor Corporation per common share is done by adjusting net income attributable to common shareholders and the weighted-average number of common shares outstanding, which includes the additional dilution from the assumed conversion of model AA class shares and the assumed exercise of dilutive stock options.

Stock-based compensation

Stock-based compensation -

Toyota measures compensation expense for its stock-based compensation plan based on the grant-date fair value of the award, and accounts for the award.

Other comprehensive income

Other comprehensive income -

Other comprehensive income refers to revenues, expenses, gains and losses that, under U.S.GAAP are included in comprehensive income, but are excluded from net income as these amounts are recorded directly as an adjustment to shareholders’ equity. Toyota’s other comprehensive income is primarily comprised of unrealized gains/losses on marketable securities designated as available-for-sale, foreign currency translation adjustments and adjustments attributed to pension liabilities associated with Toyota’s defined benefit pension plans.

Accounting changes

Accounting changes -

Adoption of new accounting standard -

In February 2016, the Financial Accounting Standards Board (“FASB”) issued updated guidance for leases. This guidance requires lessees to recognize substantially all leases on their balance sheet as a right of use asset and a lease liability. Toyota adopted this guidance on April 1, 2019 using the modified retrospective method of

adoption and elected the transition method that allows for application of the standard at the adoption date. Additionally, Toyota elected the package of practical expedients of not reassessing lease classifications and others for lease contracts that expired or exist as of the adoption date. As a result of adoption, Toyota recognized an additional balance of ¥277,118 million as right of use assets as of March 31, 2020, which is included in “Other” of “Investments and other assets” of Toyota’s consolidated balance sheet. Lease liabilities are included in “Other current liabilities” and “Other long-term liabilities,” and were ¥37,385 million and ¥239,623 million, respectively. See note 23 to the consolidated financial statements for the disclosure by adoption of this guidance.

In August 2017, the FASB issued updated guidance for hedge accounting. This guidance simplifies and expands the application of hedge accounting. Toyota adopted this guidance on April 1, 2019. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

Change in depreciation method

Change in depreciation method -

Toyota used the declining-balance method mainly for the parent company and Japanese subsidiaries, and the straight-line method for foreign subsidiary companies, regarding the depreciation method of property, plant and equipment. In recent years, Toyota has been strengthening competitiveness globally through the investments in areas such as the remodeling of cars by introducing a new platform and powertrain units, the improvement of technological capabilities and productivity, as well as the promotion of equipment versatility. In response to such recent changes, effective as of April 1, 2019, Toyota changed the depreciation method of the parent company and Japanese subsidiaries to the straight-line method because Toyota believes it better reflects the future economic benefit from the stable usage of property, plant and equipment. The impact of the change in depreciation method is recognized prospectively as a change in accounting estimate in accordance with the FASB Accounting Standards Codification (ASC) 250 “Accounting Changes and Error Corrections”.

As a result of the change in depreciation method, depreciation expense for the fiscal year ended March 31, 2020 decreased by ¥173,201 million. Net income attributable to Toyota Motor Corporation and basic net income attributable to Toyota Motor Corporation per common share for the fiscal year ended March 31, 2020 increased by ¥117,001 million and ¥41.80, respectively.

Recent pronouncements to be adopted in future periods

Recent pronouncements to be adopted in future periods -

Toyota intends to replace the currently applied U.S.GAAP and voluntarily adopt IFRS for its consolidated financial statements in order to improve the international comparability of its financial information in the capital markets, among other reasons. The period for disclosure based on IFRS will begin with the first quarter of the fiscal year ending March 31, 2021. As a result, recent pronouncements to be adopted in future periods under U.S.GAAP have been excluded from this disclosure.

Reclassifications

Reclassifications -

Certain prior year amounts have been reclassified to conform to the presentations as of and for the year ended March 31, 2020.

XML

Income taxes (Components of Deferred Tax Assets and Liabilities) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2017
Deferred tax assets
Accrued pension and severance costs	¥ 277,528	¥ 256,478
Accrued expenses and liabilities for quality assurances	601,108	664,950
Other accrued employees' compensation	118,961	121,024
Operating loss carryforwards for tax purposes	55,918	364,220
Allowance for doubtful accounts and credit losses	73,620	69,049
Property, plant and equipment and other assets	282,136	266,866
Other	268,040	338,744
Gross deferred tax assets	1,677,311	2,081,331
Less - Valuation allowance	(110,642)	(93,599)	¥ (93,814)	¥ (146,623)
Total deferred tax assets	1,566,669	1,987,732
Deferred tax liabilities
Unrealized gains on securities, net	(421,846)	(493,052)
Undistributed earnings of foreign subsidiaries	(24,808)	(25,972)
Undistributed earnings of affiliated companies accounted for by the equity method	(952,660)	(836,860)
Basis difference of acquired assets	(29,756)	(29,116)
Lease transactions	(739,911)	(946,128)
Other	(86,072)	(169,583)
Gross deferred tax liabilities	(2,255,053)	(2,500,711)
Net deferred tax liability	(688,384)	(512,979)
Deferred tax assets
Investments and other assets - Other	354,785	501,872
Deferred tax liabilities
Deferred income taxes (Long-term liabilities)	(1,043,169)	(1,014,851)
Net deferred tax liability	¥ (688,384)	¥ (512,979)

XML

Segment data (Segment Operating Results and Assets) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Net revenues
Sales to external customers	¥ 29,929,992	¥ 30,225,681	¥ 29,379,510
Total net revenues	29,929,992	30,225,681	29,379,510
Operating expenses	27,487,123	27,758,136	26,979,648
Operating income	2,442,869	2,467,545	2,399,862
Assets	52,680,436	51,936,949	50,308,249
Investment in equity method investees	4,090,790	3,313,703	3,162,711
Depreciation expenses	1,605,383	1,792,375	1,734,033
Capital expenditure	3,603,232	3,738,887	3,598,707
Inter-segment Elimination
Net revenues
Inter-segment sales and transfers	(628,631)	(683,320)	(681,556)
Total net revenues	(628,631)	(683,320)	(681,556)
Operating expenses	(630,316)	(683,622)	(683,925)
Operating income	1,685	302	2,369
Assets	7,043,760	7,967,602	8,019,941
Investment in equity method investees	137,362	85,675	96,415
Capital expenditure	14,818	(13,163)	(11,667)
Automotive | Operating Segments
Net revenues
Sales to external customers	26,834,485	27,034,492	26,347,229
Inter-segment sales and transfers	29,029	44,585	50,711
Total net revenues	26,863,514	27,079,077	26,397,940
Operating expenses	24,811,168	25,040,193	24,386,805
Operating income	2,052,346	2,038,884	2,011,135
Assets	18,754,728	17,799,376	17,054,209
Investment in equity method investees	3,711,151	3,215,856	3,054,583
Depreciation expenses	824,777	997,312	976,735
Capital expenditure	1,454,142	1,520,366	1,381,122
Financial Services | Operating Segments
Net revenues
Sales to external customers	2,170,243	2,120,343	1,959,234
Inter-segment sales and transfers	20,316	33,204	57,774
Total net revenues	2,190,559	2,153,547	2,017,008
Operating expenses	1,898,376	1,830,726	1,731,462
Operating income	292,183	322,821	285,546
Assets	24,858,837	24,044,700	23,055,981
Investment in equity method investees	61,852	12,172	11,713
Depreciation expenses	743,710	758,847	723,061
Capital expenditure	2,062,718	2,165,609	2,166,805
All Other | Operating Segments
Net revenues
Sales to external customers	925,264	1,070,846	1,073,047
Inter-segment sales and transfers	579,286	605,531	573,071
Total net revenues	1,504,550	1,676,377	1,646,118
Operating expenses	1,407,895	1,570,839	1,545,306
Operating income	96,655	105,538	100,812
Assets	2,023,111	2,125,271	2,178,118
Investment in equity method investees	180,425
Depreciation expenses	36,896	36,216	34,237
Capital expenditure	¥ 71,554	¥ 66,075	¥ 62,447

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Lease commitments - (Summary of lease cost) (Detail) ¥ in Millions	12 Months Ended
	Mar. 31, 2020 JPY (¥)
Finance lease expense
Amortization of right-of-use asset	¥ 14,676
Interest on lease liabilities	805
Operating lease expense	80,343
Short term lease expense	44,440
Lease payment	¥ 140,264

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Stock-based compensation - Additional Information (Detail) - JPY (¥)	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Compensation Related Costs Share Based Payments Disclosure [Line Items]
Stock-based compensation expense related to stock options	¥ 0	¥ 0	¥ 0
Total intrinsic value of stock options exercised	0	618,000,000	1,881,000,000
Cash received from options exercised	¥ 0	¥ 490,000,000	¥ 2,399,000,000
Stock options granted in and after August 2006
Compensation Related Costs Share Based Payments Disclosure [Line Items]
Term of options (in years)	8 years
Exercise price ratio	1.025%
Vesting period	2 years

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Stock-based compensation

12 Months Ended

Mar. 31, 2020

Stock-based compensation

*1: Reclassifications of pension liability adjustments are affected under Cost and expenses for the year ended March 31, 2018 and Other income (loss), net for the years ended March 31, 2019 and 2020, respectively, in the consolidated statements of income.

19. Stock-based compensation:

In June 1997, the parent company’s shareholders approved a stock option plan for board members. In June 2001, the shareholders approved an amendment of the plan to include both board members and key employees. Each year until June 2010, since the plans’ inception, the shareholders have approved the authorization for the grant of options for the purchase of the parent company’s common stock. Authorized shares for each year that remain ungranted are unavailable for grant in future years. Stock options granted in and after August 2006 have terms of 8 years and an exercise price equal to 1.025 times the closing price of Toyota’s common stock on the date of grant. These options generally vest 2 years from the date of grant.

There were no stock-based compensation expenses for stock options as selling, general and administrative expenses for the years ended March 31, 2018, 2019 and 2020, respectively.

The following table summarizes Toyota’s stock option activity:

				Yen				Yen in millions
	Number of shares			Weighted- average exercise price		Weighted- average remaining contractual life in years		Aggregate intrinsic value
Options outstanding at March 31, 2017		1,192,300			3,682		0.80		2,813
Granted		—			—
Exercised		(643,800	)		3,726
Canceled		(264,900	)		4,154
Options outstanding at March 31, 2018		283,600			3,153		0.33		1,041
Granted		—			—
Exercised		(155,100	)		3,156
Canceled		(128,500	)		3,153
Options outstanding at March 31, 2019		—			—		—		—
Granted		—			—
Exercised		—			—
Canceled		—			—
Options outstanding at March 31, 2020		—			—		—		—
Options exercisable at March 31, 2018		283,600			3,153		0.33		1,041
Options exercisable at March 31, 2019		—			—		—		—
Options exercisable at March 31, 2020		—			—		—		—

The total intrinsic value of options exercised for the years ended March 31, 2018 and 2019 was ¥1,881 million and ¥618 million, respectively. There were no stock options exercised for the year ended March 31, 2020.

Cash received from the exercise of stock options for the years ended March 31, 2018 and 2019 was ¥2,399 million and ¥490 million, respectively. There were no cash proceeds from stock options exercised for the year ended March 31, 2020.

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Employee benefit plans (Amounts Recognized in Accumulated Other Comprehensive Income (Loss)) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Japan
Schedule of Pension and Other Postretirement Benefits Recognized in Accumulated Other Comprehensive Income (Loss) [Line Items]
Net actuarial loss	¥ (383,485)	¥ (339,814)
Prior service costs	21,538	29,801
Net transition obligation	0	0
Net amount recognized	(361,947)	(310,013)
Foreign Plans
Schedule of Pension and Other Postretirement Benefits Recognized in Accumulated Other Comprehensive Income (Loss) [Line Items]
Net actuarial loss	(116,171)	(91,072)
Prior service costs	(5,352)	(1,612)
Net transition obligation	0	0
Net amount recognized	¥ (121,523)	¥ (92,684)

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Income taxes

12 Months Ended

Mar. 31, 2020

Income taxes

15. Income taxes:

The components of income before income taxes comprise the following:

	Yen in millions
	For the years ended March 31,
	2018		2019		2020
Income before income taxes:
Parent company and domestic subsidiaries		1,880,971		1,552,975		1,704,397
Foreign subsidiaries		739,458		732,490		850,210
		2,620,429		2,285,465		2,554,607

The provision for income taxes consists of the following:

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Current income tax expense:
Parent company and domestic subsidiaries		565,998			599,521			483,087
Foreign subsidiaries		176,369			147,017			8,196
Total current		742,367			746,538			491,283
Deferred income tax expense (benefit):
Parent company and domestic subsidiaries		45,097			(110,608	)		45,739
Foreign subsidiaries		(283,058	)		24,014			146,408
Total deferred		(237,961	)		(86,594	)		192,147
Total provision		504,406			659,944			683,430

Net deferred liabilities as of March 31, 2018 decreased by ¥218,323 million and provision for income taxes for the year ended March 31, 2018 decreased by ¥249,694 million, respectively, resulting from the Tax Cuts and Jobs Act of 2017 of the United States.

Toyota is subject to a number of different income taxes which, in the aggregate, indicate a statutory rate in Japan of approximately 31.1%, 30.9% and 30.9% for the years ended March 31, 2018, 2019 and 2020, respectively. The statutory tax rates in effect for the year in which the temporary differences are expected to reverse are used to calculate the tax effects of temporary differences which are expected to reverse in the future years. Reconciliation of the differences between the statutory tax rate and the effective income tax rate is as follows:

	For the years ended March 31,
	2018			2019			2020
Statutory tax rate		31.1	%		30.9	%		30.9	%
Increase (reduction) in taxes resulting from:
Non-deductible expenses		0.4			0.4			0.4
Deferred tax liabilities on undistributed earnings of foreign subsidiaries		1.1			1.2			1.0
Deferred tax liabilities on undistributed earnings of affiliated companies accounted for by the equity method		3.8			3.1			1.7
Valuation allowance		(2.0	)		0.2			0.5
Tax credits		(4.3	)		(5.3	)		(4.9	)
The difference between the statutory tax rate in Japan and that of foreign subsidiaries		(1.5	)		(2.3	)		(2.7	)
Unrecognized tax benefits adjustments		0.2			(0.1	)		(0.4	)
Revision to reduce deferred tax assets and liabilities at the fiscal year-end due to changes in tax rates		—			—			—
Effect of the Tax Cuts and Jobs Act of 2017 of the United States		(9.5	)		—			—
Other		(0.1	)		0.8			0.3
Effective income tax rate		19.2	%		28.9	%		26.8	%

Significant components of deferred tax assets and liabilities are as follows:

	Yen in millions
	March 31,
	2019			2020
Deferred tax assets
Accrued pension and severance costs		256,478			277,528
Accrued expenses and liabilities for quality assurances		664,950			601,108
Other accrued employees’ compensation		121,024			118,961
Operating loss carryforwards for tax purposes		364,220			55,918
Allowance for doubtful accounts and credit losses		69,049			73,620
Property, plant and equipment and other assets		266,866			282,136
Other		338,744			268,040
Gross deferred tax assets		2,081,331			1,677,311
Less - Valuation allowance		(93,599	)		(110,642	)
Total deferred tax assets		1,987,732			1,566,669
Deferred tax liabilities
Unrealized gains on securities, net		(493,052	)		(421,846	)
Undistributed earnings of foreign subsidiaries		(25,972	)		(24,808	)
Undistributed earnings of affiliated companies accounted for by the equity method		(836,860	)		(952,660	)
Basis difference of acquired assets		(29,116	)		(29,756	)
Lease transactions		(946,128	)		(739,911	)
Other		(169,583	)		(86,072	)
Gross deferred tax liabilities		(2,500,711	)		(2,255,053	)
Net deferred tax liability		(512,979	)		(688,384	)

The deferred tax assets and liabilities above that comprise the net deferred tax liability are included in the consolidated balance sheets as follows:

	Yen in millions
	March 31,
	2019			2020
Deferred tax assets
Investments and other assets - Other		501,872			354,785
Deferred tax liabilities
Deferred income taxes (Long-term liabilities)		(1,014,851	)		(1,043,169	)
Net deferred tax liability		(512,979	)		(688,384	)

The factors used to assess the likelihood of realization of the deferred tax assets are the future reversal of existing taxable temporary differences, the future taxable income and available tax planning strategies that are prudent and feasible. All available evidence, both positive and negative, is considered to determine whether, based on the weight of that evidence, a valuation allowance is needed for deferred tax assets which are not more-likely-than-not to be realized.

The accounting for deferred tax assets represents Toyota’s current best estimate based on all available evidence. Unanticipated events or changes could result in re-evaluating the realizability of deferred tax assets.

Operating loss carryforwards for tax purposes as of March 31, 2020 in Japan and foreign countries were ¥18,776 million and ¥402,628 million, respectively, and are available as an offset against future taxable income. The majority of these carryforwards in Japan and foreign countries expire in years 2021 to 2030 and expire in years 2021 to 2040, respectively. Tax credit carryforwards as of March 31, 2020 in Japan and foreign countries were ¥4,579 million and ¥67,098 million, respectively, and the majority of these carryforwards in Japan and foreign countries expire in years 2021 to 2023 and expire in years 2021 to 2040, respectively.

The valuation allowance mainly relates to deferred tax assets of operating loss and foreign tax credit carryforwards for tax purposes that are not more-likely-than-not to be realized. The net changes in the total valuation allowance for deferred tax assets for the years ended March 31, 2018, 2019 and 2020 consist of the following:

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Valuation allowance at beginning of year		146,623			93,814			93,599
Additions		16,106			13,967			27,629
Deductions		(74,435	)		(9,801	)		(6,089	)
Other		5,520			(4,381	)		(4,497	)
Valuation allowance at end of year		93,814			93,599			110,642

“Other” includes the impact of consolidation and deconsolidation of certain entities due to changes in ownership interest and currency translation adjustments during the years ended March 31, 2018, 2019 and 2020.

Because management intends to reinvest undistributed earnings of foreign subsidiaries to the extent not expected to be remitted in the foreseeable future, management has made no provision for income taxes on those undistributed earnings aggregating ¥4,205,058 million as of March 31, 2020. Toyota estimates an additional tax provision of ¥152,190 million would be required if the full amount of those undistributed earnings were remitted.

A summary of the gross unrecognized tax benefits changes for the years ended March 31, 2018, 2019 and 2020 is as follows:

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Balance at beginning of year		21,553			21,564			17,268
Additions based on tax positions related to the current year		612			1,212			2,199
Additions for tax positions of prior years		13,954			1,304			127
Reductions for tax positions of prior years		(13,217	)		(819	)		(9,586	)
Reductions for tax positions related to lapse of statute of limitations		—			—			—
Reductions for settlements		(26	)		(6,696	)		(298	)
Other		(1,312	)		703			(1,363	)
Balance at end of year		21,564			17,268			8,347

The amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was not material at March 31, 2018, 2019 and 2020, respectively. Toyota does not believe it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months.

Interest and penalties related to income tax liabilities are included in “Other income (loss), net”. The amounts of interest and penalties accrued as of and recognized for the years ended March 31, 2018, 2019 and 2020, were not material.

Toyota remains subject to income tax examination for the tax returns related to the years beginning on and after April 1, 2013 and April 1, 2002, with various tax jurisdictions in Japan and foreign countries, respectively.

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Employee benefit plans (Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss)) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Japan
Schedule of Pension and Other Postretirement Benefits Recognized in Accumulated Other Comprehensive Income (Loss) [Line Items]
Net actuarial gain (loss)	¥ (59,714)	¥ (102,734)	¥ 39,852
Recognized net actuarial loss	8,356	6,927	7,462
Prior service costs	988	1,067	58
Amortization of prior service costs	(4,346)	(3,904)	(4,226)
Amortization of net transition obligation	0	0	0
Other	2,782	4,610	(7,979)
Total recognized in other comprehensive income (loss)	(51,934)	(94,034)	35,167
Foreign Plans
Schedule of Pension and Other Postretirement Benefits Recognized in Accumulated Other Comprehensive Income (Loss) [Line Items]
Net actuarial gain (loss)	(26,717)	13,952	(17,163)
Recognized net actuarial loss	4,255	7,102	5,452
Prior service costs	(3,308)	(13)	12
Amortization of prior service costs	142	219	313
Amortization of net transition obligation	0	0	0
Other	(3,211)	7,289	9,004
Total recognized in other comprehensive income (loss)	¥ (28,839)	¥ 28,549	¥ (2,382)

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Affiliated companies and variable interest entities

12 Months Ended

Mar. 31, 2020

Affiliated companies and variable interest entities

11. Affiliated companies and variable interest entities:

Investments in and transactions with affiliated companies -

Summarized financial information for affiliated companies accounted for by the equity method is shown below:

	Yen in millions
	March 31,
	2019		2020
Current assets		13,555,478		16,551,569
Noncurrent assets		12,464,250		14,869,913
Total assets		26,019,728		31,421,482
Current liabilities		8,322,336		9,819,357
Long-term liabilities and noncontrolling interests		6,398,659		9,421,112
Affiliated companies accounted for by the equity method shareholders’ equity		11,298,733		12,181,013
Total liabilities and shareholders’ equity		26,019,728		31,421,482
Toyota’s share of affiliated companies accounted for by the equity method shareholders’ equity		3,313,703		4,090,790
Number of affiliated companies accounted for by the equity method at end of period		63		72

	Yen in millions
	For the years ended March 31,
	2018		2019		2020
Net revenues		30,680,535		32,200,711		35,340,807
Gross profit		4,065,344		4,070,621		4,315,967
Net income attributable to affiliated companies accounted for by the equity method		1,344,687		857,832		841,938
Equity in earnings of affiliated companies attributable to Toyota Motor Corporation		470,083		360,066		271,152

Entities comprising a significant portion of Toyota’s investment in affiliated companies and percentage of ownership are presented below:

	Percentage of ownership
	March 31,
Name of affiliated companies	2019			2020
Denso Corporation		24.5	%		24.5	%
Subaru Corporation		—			20.0	%
Toyota Industries Corporation		24.9	%		24.9	%
Aisin Seiki Co., Ltd.		24.9	%		24.9	%
Toyota Tsusho Corporation		22.0	%		22.0	%

Certain affiliated companies accounted for by the equity method with carrying amounts of ¥2,430,251 million and ¥2,895,656 million at March 31, 2019 and 2020, respectively, were quoted on various established markets at an aggregate value of ¥2,513,886 million and ¥2,247,107 million, respectively. Toyota 

evaluated its investments in affiliated companies, considering the length of time and the extent to which the quoted market prices have been less than the carrying amounts, the financial condition and near-term prospects of the affiliated companies and Toyota’s ability and intent to retain those investments in the companies for a period of time. Toyota did not recognize any impairment loss for the years ended March 31, 2018, 2019 and 2020.

Account balances and transactions with affiliated companies are presented below:

	Yen in millions
	March 31,
	2019		2020
Trade accounts and notes receivable, and other receivables		362,831		357,849
Accounts payable and other payables		845,755		780,935

	Yen in millions
	For the years ended March 31,
	2018		2019		2020
Net revenues		2,004,632		2,213,236		2,423,338
Purchases		5,749,430		6,431,464		6,781,279

Dividends from affiliated companies accounted for by the equity method for the years ended March 31, 2018, 2019 and 2020 were ¥196,403 million, ¥204,322 million and ¥208,950 million, respectively.

Toyota does not have any significant related party transactions other than transactions with affiliated companies in the ordinary course of business.

Variable Interest Entities -

Toyota enters into securitization transactions using special-purpose entities, that are considered variable interest entities (“VIEs”). Although the finance receivables and vehicles on operating leases related to securitization transactions have been legally sold to the VIEs, Toyota has both the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance and the obligation to absorb losses of the VIEs or the right to receive benefits from the VIEs that could potentially be significant to the VIEs. As a result, Toyota is considered the primary beneficiary of the VIEs and therefore consolidates the VIEs.

Related to securitization transactions, ¥1,872,564 million and ¥1,906,256 million retail finance receivables, ¥609,694 million and ¥621,633 million vehicles on operating leases, ¥131,804 million and ¥140,750 million restricted cash and ¥1,893,073 million and ¥1,979,563 million secured debt were included in Toyota’s consolidated financial statements as of March 31, 2019 and 2020, respectively. The creditors of the VIEs do not have recourse to Toyota’s general credit with the exception of debts guaranteed by Toyota. Risks to which Toyota is exposed including credit, interest rate, and/or prepayment risks are not incremental compared with the situation before Toyota enters into securitization transactions.

Toyota has variable interests in investment trusts that are VIEs and debt securities issued by a VIE. With respect to some of the investment trusts, Toyota has both the obligation to absorb losses of or the right to receive benefits from the VIEs that could potentially be significant to the VIEs and the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance through the asset manager. As a result, Toyota is considered the primary beneficiary of the VIEs and therefore consolidates the VIEs. Related to such investment trusts, ¥2,790,679 million and ¥2,767,681 million marketable securities and other securities investments were included in Toyota’s consolidated financial statements as of March 31, 2019 and 2020.

As for other VIEs, Toyota determined that it was not the primary beneficiary due to lack of the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance and, therefore, does not consolidate the VIEs. The investments are held at fair value and are included in “Marketable securities and other securities investments” in the accompanying consolidated balance sheets. The maximum exposure to loss is limited to the carrying value of its investment. The carrying value of the trusts totaled ¥22,001 million and ¥16,622 million as of March 31, 2019 and 2020, respectively. The carrying value of the debt securities totaled ¥351,945 million and ¥748,131 million as of March 31, 2019 and 2020, respectively. Toyota does not provide support that is not contractually required to the investments.

As for VIEs other than those specified above, neither the aggregate size nor Toyota’s involvements are material to Toyota’s consolidated financial statements.

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Marketable securities and other securities investments (Tables)

12 Months Ended

Mar. 31, 2020

Aggregate Cost, Gross Unrealized Gains and Losses and Fair Value of Marketable Securities and Other Securities Investments

Marketable securities and other securities investments include public and corporate bonds and common stocks for which the aggregate cost, gross unrealized gains and losses and fair value are as follows:

	Yen in millions
	March 31, 2019
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Available-for-sale
Public and corporate bonds		5,837,423		82,022		73,256		5,846,189
Other		289,285		5,406		845		293,846
Total		6,126,708		87,428		74,101		6,140,035
Securities not practicable to determine fair value
Public and corporate bonds		32,922

	Yen in millions
	March 31, 2020
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Available-for-sale
Public and corporate bonds		5,237,131		196,260		22,092		5,411,299
Other		313,014		9,651		3,416		319,249
Total		5,550,145		205,911		25,508		5,730,548
Securities not practicable to determine fair value
Public and corporate bonds		36,551

Gains and Losses Related to Equity Securities

Gain and losses related to equity securities are as follows:

	Yen in millions
	For the years ended March 31,
	2019			2020
Net gains (losses) recognized on equity securities		(334,636	)		(3,837	)
Less: Net gains (losses) recognized on equity securities sold		4,836			16,245
Unrealized gains (losses) on equity securities		(339,472	)		(20,082	)

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Allowance for doubtful accounts and credit losses (Tables)

12 Months Ended

Mar. 31, 2020

Allowance for Doubtful Accounts Relating to Trade Accounts and Notes Receivable

The net changes in the allowance for doubtful accounts relating to trade accounts and notes receivable for the years ended March 31, 2018, 2019 and 2020 are as follows:

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Allowance for doubtful accounts at beginning of year		100,712			98,590			90,373
Provision for doubtful accounts, net of reversal		(74	)		(1,375	)		5,689
Write-offs		(2,374	)		(2,472	)		(2,691	)
Other		326			(4,370	)		(3,019	)
Allowance for doubtful accounts at end of year		98,590			90,373			90,352

Allowance for Credit Losses Relating to Finance Receivables and Vehicles and Equipment on Operating Leases

The net changes in the allowance for credit losses relating to finance receivables and vehicles and equipment on operating leases for the years ended March 31, 2018, 2019 and 2020 are as follows:

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Allowance for credit losses at beginning of year		178,101			184,087			196,399
Provision for credit losses, net of reversal		76,143			81,440			137,293
Charge-offs		(96,444	)		(91,698	)		(98,352	)
Recoveries		25,344			26,178			25,578
Other		943			(3,608	)		(18,569	)
Allowance for credit losses at end of year		184,087			196,399			242,349

Allowance for Credit Losses Relating to Retail Receivables, Finance Lease Receivables and Wholesale and Other Dealer Loan Receivables Portfolio Segments

The net changes in the allowance for credit losses above relating to retail receivables portfolio segment, finance lease receivables portfolio segment and wholesale and other dealer loan receivables portfolio segment for the years ended March 31, 2018, 2019 and 2020 are as follows:

	Yen in millions
	For the year ended March 31, 2018
	Retail			Finance leases			Wholesale and other dealer loans
Allowance for credit losses at beginning of year		104,354			23,962			30,896
Provision for credit losses, net of reversal		52,891			7,115			6,497
Charge-offs		(74,868	)		(2,708	)		(823	)
Recoveries		20,511			315			59
Other		569			133			171
Allowance for credit losses at end of year		103,457			28,817			36,800

	Yen in millions
	For the year ended March 31, 2019
	Retail			Finance leases			Wholesale and other dealer loans
Allowance for credit losses at beginning of year		103,457			28,817			36,800
Provision for credit losses, net of reversal		68,470			710			3,990
Charge-offs		(72,657	)		(2,903	)		(1,111	)
Recoveries		20,485			345			45
Other		(2,161	)		(486	)		(716	)
Allowance for credit losses at end of year		117,594			26,483			39,008

	Yen in millions
	For the year ended March 31, 2020
	Retail			Finance leases			Wholesale and other dealer loans
Allowance for credit losses at beginning of year		117,594			26,483			39,008
Provision for credit losses, net of reversal		107,784			9,716			12,544
Charge-offs		(82,613	)		(3,267	)		(105	)
Recoveries		20,277			353			33
Other		(11,552	)		(2,386	)		(3,691	)
Allowance for credit losses at end of year		151,490			30,899			47,789

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Income taxes (Tables)

12 Months Ended

Mar. 31, 2020

Components of Income Before Income Taxes

The components of income before income taxes comprise the following:

	Yen in millions
	For the years ended March 31,
	2018		2019		2020
Income before income taxes:
Parent company and domestic subsidiaries		1,880,971		1,552,975		1,704,397
Foreign subsidiaries		739,458		732,490		850,210
		2,620,429		2,285,465		2,554,607

Provision for Income Taxes

The provision for income taxes consists of the following:

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Current income tax expense:
Parent company and domestic subsidiaries		565,998			599,521			483,087
Foreign subsidiaries		176,369			147,017			8,196
Total current		742,367			746,538			491,283
Deferred income tax expense (benefit):
Parent company and domestic subsidiaries		45,097			(110,608	)		45,739
Foreign subsidiaries		(283,058	)		24,014			146,408
Total deferred		(237,961	)		(86,594	)		192,147
Total provision		504,406			659,944			683,430

Reconciliation of Differences Between Statutory Tax Rate and Effective Income Tax Rate

Reconciliation of the differences between the statutory tax rate and the effective income tax rate is as follows:

	For the years ended March 31,
	2018			2019			2020
Statutory tax rate		31.1	%		30.9	%		30.9	%
Increase (reduction) in taxes resulting from:
Non-deductible expenses		0.4			0.4			0.4
Deferred tax liabilities on undistributed earnings of foreign subsidiaries		1.1			1.2			1.0
Deferred tax liabilities on undistributed earnings of affiliated companies accounted for by the equity method		3.8			3.1			1.7
Valuation allowance		(2.0	)		0.2			0.5
Tax credits		(4.3	)		(5.3	)		(4.9	)
The difference between the statutory tax rate in Japan and that of foreign subsidiaries		(1.5	)		(2.3	)		(2.7	)
Unrecognized tax benefits adjustments		0.2			(0.1	)		(0.4	)
Revision to reduce deferred tax assets and liabilities at the fiscal year-end due to changes in tax rates		—			—			—
Effect of the Tax Cuts and Jobs Act of 2017 of the United States		(9.5	)		—			—
Other		(0.1	)		0.8			0.3
Effective income tax rate		19.2	%		28.9	%		26.8	%

Components of Deferred Tax Assets and Liabilities

Significant components of deferred tax assets and liabilities are as follows:

	Yen in millions
	March 31,
	2019			2020
Deferred tax assets
Accrued pension and severance costs		256,478			277,528
Accrued expenses and liabilities for quality assurances		664,950			601,108
Other accrued employees’ compensation		121,024			118,961
Operating loss carryforwards for tax purposes		364,220			55,918
Allowance for doubtful accounts and credit losses		69,049			73,620
Property, plant and equipment and other assets		266,866			282,136
Other		338,744			268,040
Gross deferred tax assets		2,081,331			1,677,311
Less - Valuation allowance		(93,599	)		(110,642	)
Total deferred tax assets		1,987,732			1,566,669
Deferred tax liabilities
Unrealized gains on securities, net		(493,052	)		(421,846	)
Undistributed earnings of foreign subsidiaries		(25,972	)		(24,808	)
Undistributed earnings of affiliated companies accounted for by the equity method		(836,860	)		(952,660	)
Basis difference of acquired assets		(29,116	)		(29,756	)
Lease transactions		(946,128	)		(739,911	)
Other		(169,583	)		(86,072	)
Gross deferred tax liabilities		(2,500,711	)		(2,255,053	)
Net deferred tax liability		(512,979	)		(688,384	)

The deferred tax assets and liabilities above that comprise the net deferred tax liability are included in the consolidated balance sheets as follows:

	Yen in millions
	March 31,
	2019			2020
Deferred tax assets
Investments and other assets - Other		501,872			354,785
Deferred tax liabilities
Deferred income taxes (Long-term liabilities)		(1,014,851	)		(1,043,169	)
Net deferred tax liability		(512,979	)		(688,384	)

Net Changes in Total Valuation Allowance for Deferred Tax Assets

The net changes in the total valuation allowance for deferred tax assets for the years ended March 31, 2018, 2019 and 2020 consist of the following:

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Valuation allowance at beginning of year		146,623			93,814			93,599
Additions		16,106			13,967			27,629
Deductions		(74,435	)		(9,801	)		(6,089	)
Other		5,520			(4,381	)		(4,497	)
Valuation allowance at end of year		93,814			93,599			110,642

Summary of Gross Unrecognized Tax Benefits Changes

A summary of the gross unrecognized tax benefits changes for the years ended March 31, 2018, 2019 and 2020 is as follows:

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Balance at beginning of year		21,553			21,564			17,268
Additions based on tax positions related to the current year		612			1,212			2,199
Additions for tax positions of prior years		13,954			1,304			127
Reductions for tax positions of prior years		(13,217	)		(819	)		(9,586	)
Reductions for tax positions related to lapse of statute of limitations		—			—			—
Reductions for settlements		(26	)		(6,696	)		(298	)
Other		(1,312	)		703			(1,363	)
Balance at end of year		21,564			17,268			8,347

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Income taxes (Components of Income Before Income Taxes) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Income before income taxes:
Parent company and domestic subsidiaries	¥ 1,704,397	¥ 1,552,975	¥ 1,880,971
Foreign subsidiaries	850,210	732,490	739,458
Income before income taxes and equity in earnings of affiliated companies	¥ 2,554,607	¥ 2,285,465	¥ 2,620,429

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Marketable securities and other securities investments (Aggregate Cost, Gross Unrealized Gains and Losses and Fair Value of Marketable Securities and Other Securities Investments) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Gain (Loss) on Securities [Line Items]
Cost	¥ 5,550,145	¥ 6,126,708
Gross unrealized gains	205,911	87,428
Gross unrealized losses	25,508	74,101
Fair value	5,730,548	6,140,035
Public and Corporate Bonds
Gain (Loss) on Securities [Line Items]
Cost	5,237,131	5,837,423
Gross unrealized gains	196,260	82,022
Gross unrealized losses	22,092	73,256
Fair value	5,411,299	5,846,189
Other
Gain (Loss) on Securities [Line Items]
Cost	313,014	289,285
Gross unrealized gains	9,651	5,406
Gross unrealized losses	3,416	845
Fair value	319,249	293,846
Securities Not Practicable to Determine Fair Value [Member] | Public and Corporate Bonds
Gain (Loss) on Securities [Line Items]
Cost	¥ 36,551	¥ 32,922

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Summary of significant accounting policies - Additional Information (Detail) - JPY (¥)	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Significant Accounting Policies [Line Items]
Advertising costs	¥ 470,849,000,000	¥ 490,093,000,000	¥ 509,653,000,000
Research and development costs	1,110,369,000,000	1,048,882,000,000	¥ 1,064,269,000,000
Inventories, LIFO basis	291,639,000,000	470,208,000,000
Inventory increase had LIFO been replaced by FIFO basis	¥ 21,194,000,000	¥ 25,302,000,000
Intangible assets with a definite life, estimated useful lives	5 years
Change in Accounting Method Accounted for as Change in Estimate [Member]
Significant Accounting Policies [Line Items]
Decrease in depreciation expense due to change in method	¥ 173,201,000,000
Increase in net income	117,001,000,000
Basic net income attributable to toyota motor corporation per common share	41.80
Investments And Other Assets [Member]
Significant Accounting Policies [Line Items]
Additions to right-of-use assets	277,118,000,000
Other Current Liabilities [Member]
Significant Accounting Policies [Line Items]
Current lease liabilities	37,385,000,000
Other Long Term Liabilities [Member]
Significant Accounting Policies [Line Items]
Non-current lease liabilities	¥ 239,623,000,000
Building | Minimum
Significant Accounting Policies [Line Items]
Property, plant and equipment, estimated useful lives	2 years
Building | Maximum
Significant Accounting Policies [Line Items]
Property, plant and equipment, estimated useful lives	65 years
Machinery and equipment | Minimum
Significant Accounting Policies [Line Items]
Property, plant and equipment, estimated useful lives	2 years
Machinery and equipment | Maximum
Significant Accounting Policies [Line Items]
Property, plant and equipment, estimated useful lives	20 years
Assets Leased to Others | Minimum
Significant Accounting Policies [Line Items]
Property, plant and equipment, estimated useful lives	2 years
Assets Leased to Others | Maximum
Significant Accounting Policies [Line Items]
Property, plant and equipment, estimated useful lives	5 years
Retail Receivables Portfolio Segment | Minimum
Significant Accounting Policies [Line Items]
Contract period	2 years
Retail Receivables Portfolio Segment | Maximum
Significant Accounting Policies [Line Items]
Contract period	7 years
Finance Lease Receivables Portfolio Segment | Minimum
Significant Accounting Policies [Line Items]
Contract period	2 years
Finance Lease Receivables Portfolio Segment | Maximum
Significant Accounting Policies [Line Items]
Contract period	5 years

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Short-term borrowings and long-term debt (Long-term Debt) (Parenthetical) (Detail)	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Long-term Finance Lease Obligations | Minimum
Debt Instrument [Line Items]
Long-term debt, interest rate	0.01%	0.12%
Long-term Finance Lease Obligations | Maximum
Debt Instrument [Line Items]
Long-term debt, interest rate	14.73%	14.73%
Range Start | Long-term Finance Lease Obligations
Debt Instrument [Line Items]
Debt maturity year	2020	2019
Range End | Long-term Finance Lease Obligations
Debt Instrument [Line Items]
Debt maturity year	2049	2035
Bank Loan Obligations | Unsecured Debt
Debt Instrument [Line Items]
Long-term debt, weighted average interest rate	2.37%	2.78%
Bank Loan Obligations | Range Start | Unsecured Debt
Debt Instrument [Line Items]
Debt maturity year	2020	2019
Bank Loan Obligations | Range End | Unsecured Debt
Debt Instrument [Line Items]
Debt maturity year	2041	2041
Finance Receivables Securitization | Secured Debt
Debt Instrument [Line Items]
Long-term debt, weighted average interest rate	1.98%	2.47%
Finance Receivables Securitization | Range Start | Secured Debt
Debt Instrument [Line Items]
Debt maturity year	2020	2019
Finance Receivables Securitization | Range End | Secured Debt
Debt Instrument [Line Items]
Debt maturity year	2034	2026
Consolidated Subsidiaries | Medium-term Notes
Debt Instrument [Line Items]
Long-term debt, weighted average interest rate	2.05%	2.46%
Consolidated Subsidiaries | Unsecured Notes
Debt Instrument [Line Items]
Long-term debt, weighted average interest rate	1.70%	2.12%
Consolidated Subsidiaries | Secured Notes
Debt Instrument [Line Items]
Long-term debt, weighted average interest rate	7.52%	7.78%
Consolidated Subsidiaries | Range Start | Medium-term Notes
Debt Instrument [Line Items]
Debt maturity year	2020	2019
Consolidated Subsidiaries | Range Start | Unsecured Notes
Debt Instrument [Line Items]
Debt maturity year	2020	2019
Consolidated Subsidiaries | Range Start | Secured Notes
Debt Instrument [Line Items]
Debt maturity year	2020	2019
Consolidated Subsidiaries | Range End | Medium-term Notes
Debt Instrument [Line Items]
Debt maturity year	2048	2048
Consolidated Subsidiaries | Range End | Unsecured Notes
Debt Instrument [Line Items]
Debt maturity year	2031	2031
Consolidated Subsidiaries | Range End | Secured Notes
Debt Instrument [Line Items]
Debt maturity year	2023	2022
Parent Company | Unsecured Notes
Debt Instrument [Line Items]
Long-term debt, weighted average interest rate	1.85%	1.84%
Parent Company | Range Start | Unsecured Notes
Debt Instrument [Line Items]
Debt maturity year	2020	2019
Parent Company | Range End | Unsecured Notes
Debt Instrument [Line Items]
Debt maturity year	2037	2037

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Segment data (Geographic Information) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Net revenues
Sales to external customers	¥ 29,929,992	¥ 30,225,681	¥ 29,379,510
Total net revenues	29,929,992	30,225,681	29,379,510
Operating expenses	27,487,123	27,758,136	26,979,648
Operating income (loss)	2,442,869	2,467,545	2,399,862
Assets	52,680,436	51,936,949	50,308,249
Long-lived assets	10,601,525	10,685,494	10,267,673
Long-lived assets, include operating lease right-of-use assets	10,878,643
Geography Eliminations
Net revenues
Inter-segment sales and transfers	(7,982,313)	(8,302,252)	(8,006,406)
Total net revenues	(7,982,313)	(8,302,252)	(8,006,406)
Operating expenses	(7,974,307)	(8,290,140)	(7,986,563)
Operating income (loss)	(8,006)	(12,112)	(19,843)
Assets	4,878,678	5,902,470	6,348,099
Japan | Reportable Geographical Components
Net revenues
Sales to external customers	9,522,905	9,520,148	9,273,672
Inter-segment sales and transfers	6,938,616	7,105,213	6,751,172
Total net revenues	16,461,521	16,625,361	16,024,844
Operating expenses	14,893,543	14,933,686	14,364,926
Operating income (loss)	1,567,978	1,691,675	1,659,918
Assets	17,517,032	16,465,702	15,797,024
Long-lived assets		3,607,843	3,511,663
Long-lived assets, include operating lease right-of-use assets	3,880,118
North America | Reportable Geographical Components
Net revenues
Sales to external customers	10,416,582	10,585,934	10,347,266
Inter-segment sales and transfers	222,166	231,313	227,144
Total net revenues	10,638,748	10,817,247	10,574,410
Operating expenses	10,368,119	10,702,732	10,435,511
Operating income (loss)	270,629	114,515	138,899
Assets	18,012,336	17,452,216	16,936,704
Long-lived assets		5,469,262	5,179,139
Long-lived assets, include operating lease right-of-use assets	5,374,456
Europe | Reportable Geographical Components
Net revenues
Sales to external customers	3,138,755	3,055,654	2,940,243
Inter-segment sales and transfers	222,123	183,197	244,981
Total net revenues	3,360,878	3,238,851	3,185,224
Operating expenses	3,210,333	3,113,983	3,110,198
Operating income (loss)	150,545	124,868	75,026
Assets	4,192,858	3,872,301	3,346,179
Long-lived assets		453,921	359,355
Long-lived assets, include operating lease right-of-use assets	561,371
Asia | Reportable Geographical Components
Net revenues
Sales to external customers	4,828,635	4,832,392	4,497,374
Inter-segment sales and transfers	510,021	680,639	650,765
Total net revenues	5,338,656	5,513,031	5,148,139
Operating expenses	4,967,657	5,055,542	4,714,940
Operating income (loss)	370,999	457,489	433,199
Assets	5,241,588	5,176,990	4,893,582
Long-lived assets		729,494	797,435
Long-lived assets, include operating lease right-of-use assets	668,252
Other Countries | Reportable Geographical Components
Net revenues
Sales to external customers	2,023,115	2,231,553	2,320,955
Inter-segment sales and transfers	89,387	101,890	132,344
Total net revenues	2,112,502	2,333,443	2,453,299
Operating expenses	2,021,778	2,242,333	2,340,636
Operating income (loss)	90,724	91,110	112,663
Assets	2,837,944	3,067,270	2,986,661
Long-lived assets		¥ 424,974	¥ 420,081
Long-lived assets, include operating lease right-of-use assets	¥ 394,446

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Lease commitments - (Summary of Other supplementary information) (Detail) ¥ in Millions	12 Months Ended
	Mar. 31, 2020 JPY (¥)
Cash paid for amounts included in the measurement of finance lease liabilities
Cash flow from operating activities	¥ 805
Cash flow from financing activities	5,860
Cash paid for amounts included in the measurement of operating lease liabilities
Cash flow from operating activities	80,101
Finance lease	47,082
Operating lease	¥ 105,913
Finance lease years	5 years 7 months 6 days
Operating lease years	8 years 4 months 24 days
Finance lease discount rate	4.23%
Operating lease discount rate	2.13%

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Class Shares

12 Months Ended

Mar. 31, 2020

Class Shares

16. Class Shares:

TMC issued First Series Model AA Class Shares (the “Model AA Class Shares”) on July 24, 2015. Presented below is additional information regarding the Model AA Class Shares:

Total number of shares issued	:	47,100,000 shares
Issue price	:	10,598 yen per share
Purchase price	:	10,121.09 yen per share
Voting rights	:	Model AA Class Shares shall have voting rights. The number of shares constituting one unit with respect to Model AA Class Shares shall be 100.
Restrictions on transfer	:	Model AA Class Shares shall have restrictions on transfer.
Dividends	:	(1) If the record date falls in the fiscal year ending on March 31, 2016 : 0.5% of the issue price
		(2) If the record date falls in the fiscal year ending on March 31, 2017 through March 31, 2020 : the annual dividend rate for the previous fiscal year plus 0.5% of the issue price
		(3) If the record date falls in the fiscal year ending on March 31, 2021 or later : 2.5% of the issue price
Shareholder’s right	:	(1) Shareholder’s conversion right into Common Shares Shareholders of the Model AA Class Shares may demand TMC to acquire all or a part of their Model AA Class Shares in exchange for Common Shares on the first business day of April and October of every year, starting October 1, 2020.
		(2) Shareholder’s cash put option Shareholders of the Model AA Class Shares may demand TMC to acquire all or a part of their Model AA Class Shares in exchange for cash on the last business day of March, June, September and December of each year, starting on September 1, 2020.
TMC’s right	:	TMC may acquire, on or after April 2, 2021, all of the outstanding Model AA Class Shares in exchange for cash.

The Model AA Class Shares will not be treated as shareholders’ equity because the shareholders of the Model AA Class Shares will have cash put options and hence, the Model AA Class Shares will be reported as mezzanine equity, a separate line item between liabilities and shareholders’ equity.

Unpaid dividends included in mezzanine equity as of March 31, 2019 and 2020 were ¥4,969 million and ¥6,217 million, respectively.

The difference between the issuance amount and initial carrying amount of the mezzanine equity is adjusted for accretion of the mezzanine equity over a period of time from the issuance date until the Class Shares can first be redeemed.

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Employee benefit plans (Components of Net Periodic Pension Cost) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Japan
Net Period Benefit Cost Assumptions [Line Items]
Service cost	¥ 93,298	¥ 99,838	¥ 88,964
Interest cost	10,514	12,967	13,252
Expected return on plan assets	(37,813)	(38,551)	(36,409)
Amortization of prior service costs	(4,346)	(3,904)	(4,226)
Recognized net actuarial loss	8,356	6,927	7,462
Amortization of net transition obligation	0	0	0
Net periodic pension cost	70,009	77,277	69,043
Foreign Plans
Net Period Benefit Cost Assumptions [Line Items]
Service cost	46,869	46,930	35,887
Interest cost	40,335	40,708	37,817
Expected return on plan assets	(43,003)	(37,530)	(41,048)
Amortization of prior service costs	142	219	313
Recognized net actuarial loss	4,255	7,102	5,452
Amortization of net transition obligation	0	0	0
Net periodic pension cost	¥ 48,598	¥ 57,429	¥ 38,421

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Short-term borrowings and long-term debt

12 Months Ended

Mar. 31, 2020

Short-term borrowings and long-term debt

12. Short-term borrowings and long-term debt:

Short-term borrowings at March 31, 2019 and 2020 consist of the following:

	Yen in millions
	March 31,
	2019		2020
Loans, principally from banks, with a weighted-average interest at March 31, 2019 and March 31, 2020 of 2.11% and of 2.03% per annum, respectively		1,468,430		1,179,230
Commercial paper with a weighted-average interest at March 31, 2019 and March 31, 2020 of 2.28% and of 1.50% per annum, respectively		3,876,544		4,106,796
		5,344,973		5,286,026

As of March 31, 2020, Toyota has unused short-term lines of credit amounting to ¥1,861,792 million of which ¥374,273 million related to commercial paper programs. Under these programs, Toyota is authorized to obtain short-term financing at prevailing interest rates for periods not in excess of 360 days.

Long-term debt at March 31, 2019 and 2020 comprises the following:

	Yen in millions
	March 31,
	2019			2020
Unsecured loans, representing obligations principally to banks, due 2019 to 2041 in 2019 and due 2020 to 2041 in 2020 with a weighted-average interest at March 31, 2019 and March 31, 2020 of 2.78% and of 2.37% per annum, respectively		3,441,336			3,713,541
Secured loans, representing obligations principally to finance receivables securitization due 2019 to 2026 in 2019 and due 2020 to 2034 in 2020 with a weighted-average interest at March 31, 2019 and March 31, 2020 of 2.47% and of 1.98% per annum, respectively		1,840,204			1,983,976
Medium-term notes of consolidated subsidiaries, due 2019 to 2048 in 2019 and due 2020 to 2048 in 2020 with a weighted-average interest at March 31, 2019 and March 31, 2020 of 2.46% and of 2.05% per annum, respectively		7,372,550			7,442,590
Unsecured notes of parent company, due 2019 to 2037 in 2019 and due 2020 to 2037 in 2020 with a weighted-average interest at March 31, 2019 and March 31, 2020 of 1.84% and of 1.85% per annum, respectively		511,980			650,905
Unsecured notes of consolidated subsidiaries, due 2019 to 2031 in 2019 and due 2020 to 2031 in 2020 with a weighted-average interest at March 31, 2019 and March 31, 2020 of 2.12% and of 1.70% per annum, respectively		1,566,994			1,412,368
Secured notes of consolidated subsidiaries, due 2019 to 2022 in 2019 and due 2020 to 2023 in 2020 with a weighted-average interest at March 31, 2019 and March 31, 2020 of 7.78% and of 7.52% per annum, respectively		53,120			34,626
Long-term finance lease obligations, due 2019 to 2035 in 2019 and due 2020 to 2049 in 2020 with interest ranging from 0.12% to 14.73% per annum in 2019 and from 0.01% to 14.73% per annum in 2020		19,021			28,937
		14,805,205			15,266,943
Less - Current portion due within one year		(4,254,260	)		(4,574,045	)
		10,550,945			10,692,898

As of March 31, 2020, approximately 48%, 13%, 11%, 7%, 5% and 16% of long-term debt are denominated in U.S. dollars, euros, Japanese yen, Australian dollars, Thai baht and other currencies, respectively.

As of March 31, 2020, property, plant and equipment with a book value of ¥644,368 million and other assets aggregating ¥2,010,548 million were pledged as collateral mainly for certain debt obligations of subsidiaries. These other assets principally consist of securitized finance receivables.

The aggregate amounts of annual maturities of long-term debt during the next five years are as follows:

Years ending March 31,	Yen in millions
2021		4,574,045
2022		3,692,634
2023		3,014,979
2024		1,575,717
2025		1,210,354

Standard agreements with certain banks include provisions that collateral (including sums on deposit with such banks) or guarantees will be furnished upon the banks’ request and that any collateral furnished, pursuant to such agreements or otherwise, will be applicable to all present or future indebtedness to such banks. During the year ended March 31, 2020, Toyota has not received any significant requests from these banks.

As of March 31, 2020, Toyota has unused long-term lines of credit amounting to ¥5,345,718 million.

Interest expense during the years ended March 31, 2018, 2019 and 2020 were ¥415,094 million, ¥499,871 million and ¥512,677 million, respectively. Interest expense related to the financial services business is included in “Cost of financing operations” in the accompanying consolidated statements of income.

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Accumulated other comprehensive income (Reclassifications Out of Accumulated Other Comprehensive Income (Loss)) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Foreign exchange gain (loss), net	¥ 79,020	¥ (12,400)	¥ (22,664)
Other income (loss), net	(14,705)	50,843	(45,948)
Costs and Expenses	27,487,123	27,758,136	26,979,648
Income before income taxes and equity in earnings of affiliated companies	(2,554,607)	(2,285,465)	(2,620,429)
Provision for income taxes	683,430	659,944	504,406
Equity in earnings of affiliated companies	(271,152)	(360,066)	(470,083)
Net income	(2,142,329)	(1,985,587)	(2,586,106)
Reclassification from AOCI, Current Period, Tax	(4,360)	4,071	7,229
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	10,392	(6,197)	(22,221)
Foreign currency translation adjustments | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other income (loss), net		1,377	(6,664)
Income before income taxes and equity in earnings of affiliated companies		1,377	(6,664)
Net income		1,377	(6,664)
Unrealized gains (losses) on securities | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Foreign exchange gain (loss), net	8,823	(22,374)	(25,247)
Other income (loss), net	(2,484)	(827)	(1,993)
Income before income taxes and equity in earnings of affiliated companies	6,246	(21,958)	(31,807)
Provision for income taxes	(1,960)	6,963	9,729
Equity in earnings of affiliated companies	99	(31)	20
Net income	4,385	(15,026)	(22,058)
Unrealized gains (losses) on securities | Reclassification out of Accumulated Other Comprehensive Income | Financial Service [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Financing operations	(93)	1,243	(4,567)
Recognized net actuarial loss | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other income (loss), net	12,611	14,029
Costs and Expenses			12,914
Amortization of prior service costs | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other income (loss), net	(4,204)	(3,685)
Costs and Expenses			(3,913)
Pension liability adjustments
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	8,407	10,344	9,001
Reclassification from AOCI, Current Period, Tax	(2,400)	(2,892)	(2,500)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	¥ 6,007	¥ 7,452	¥ 6,501

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Employee benefit plans

12 Months Ended

Mar. 31, 2020

Employee benefit plans

20. Employee benefit plans:

Pension and severance plans -

Upon terminations of employment, employees of the parent company and subsidiaries in Japan are entitled, under the retirement plans of each company, to lump-sum indemnities or pension payments, based on current rates of pay and lengths of service or the number of “points” mainly determined by those. Under normal circumstances, the minimum payment prior to retirement age is an amount based on voluntary retirement. Employees receive additional benefits on involuntary retirement, including retirement at the age limit.

Effective October 1, 2004, the parent company amended its retirement plan to introduce a “point” based retirement benefit plan. Under the new plan, employees are entitled to lump-sum or pension payments determined based on accumulated “points” vested in each year of service.

There are three types of “points” that vest in each year of service consisting of “service period points” which are attributed to the length of service, “job title points” which are attributed to the job title of each employee, and “performance points” which are attributed to the annual performance evaluation of each employee. Under normal circumstances, the minimum payment prior to retirement age is an amount reflecting an adjustment rate applied to represent voluntary retirement. Employees receive additional benefits upon involuntary retirement, including retirement at the age limit.

Effective October 1, 2005, the parent company partly amended its retirement plan and introduced the quasi cash-balance plan under which benefits are determined based on the variable-interest crediting rate rather than the fixed-interest crediting rate as was in the pre-amended plan.

The parent company and most subsidiaries in Japan have contributory funded defined benefit pension plans, which are pursuant to the Corporate Defined Benefit Pension Plan Law (CDBPPL). The contributions to the plans are funded with several financial institutions in accordance with the applicable laws and regulations. These pension plan assets consist principally of common stocks, government bonds and insurance contracts.

Most foreign subsidiaries have pension plans or severance indemnity plans covering substantially all of their employees under which the cost of benefits are currently invested or accrued. The benefits for these plans are based primarily on lengths of service and current rates of pay.

Toyota uses a March 31 measurement date for its benefit plans.

Information regarding Toyota’s defined benefit plans is as follows:

	Yen in millions
	March 31,
	Japanese plans						Foreign plans
	2019			2020			2019			2020
Change in benefit obligation
Benefit obligation at beginning of year		2,019,310			2,100,073			1,097,981			1,186,897
Service cost		99,838			93,298			46,930			46,869
Interest cost		12,967			10,514			40,708			40,335
Plan participants’ contributions		974			1,014			1,045			2,018
Plan amendments		(1,067	)		(988	)		13			3,308
Net actuarial (gain) loss		67,391			(48,602	)		7,755			(2,865	)
Acquisition and other		(20,786	)		(55,070	)		21,634			(28,548	)
Benefits paid		(78,554	)		(48,796	)		(29,169	)		(40,200	)
Benefit obligation at end of year		2,100,073			2,051,443			1,186,897			1,207,814
Change in plan assets
Fair value of plan assets at beginning of year		1,612,879			1,600,491			815,483			882,784
Actual return on plan assets		3,208			(70,503	)		59,237			13,421
Acquisition and other		(13,705	)		(41,105	)		12,696			(28,068	)
Employer contributions		41,276			38,144			18,952			29,407
Plan participants’ contributions		974			1,014			1,045			2,018
Benefits paid		(44,141	)		(15,010	)		(24,629	)		(30,661	)
Fair value of plan assets at end of year		1,600,491			1,513,031			882,784			868,901
Funded status		499,582			538,412			304,113			338,913

Amounts recognized in the consolidated balance sheets as of March 31, 2019 and 2020 are comprised of the following:

	Yen in millions
	March 31,
	Japanese plans						Foreign plans
	2019			2020			2019			2020
Accrued expenses (Accrued pension and severance costs)		34,298			33,422			3,234			7,934
Accrued pension and severance costs		657,380			639,764			306,026			338,862
Investments and other assets - Other (Prepaid pension and severance costs)		(192,096	)		(134,774	)		(5,147	)		(7,883	)
Net amount recognized		499,582			538,412			304,113			338,913

Amounts recognized in accumulated other comprehensive income (loss) as of March 31, 2019 and 2020 are comprised of the following:

	Yen in millions
	March 31,
	Japanese plans						Foreign plans
	2019			2020			2019			2020
Net actuarial loss		(339,814	)		(383,485	)		(91,072	)		(116,171	)
Prior service costs		29,801			21,538			(1,612	)		(5,352	)
Net transition obligation		—			—			—			—
Net amount recognized		(310,013	)		(361,947	)		(92,684	)		(121,523	)

The accumulated benefit obligation for all defined benefit pension plans was ¥2,040,344 million and ¥1,993,624 million in Japanese plans, ¥1,120,453 million and ¥1,134,977 million in Foreign plans at March 31, 2019 and 2020, respectively.

The projected benefit obligation and fair value of plan assets for which the projected benefit obligations exceed plan assets are as follows:

	Yen in millions
	March 31,
	Japanese plans				Foreign plans
	2019		2020		2019		2020
Projected benefit obligation		878,009		846,068		681,025		1,025,234
Fair value of plan assets		203,277		188,241		357,583		678,522

The accumulated benefit obligation and fair value of plan assets for which the accumulated benefit obligations exceed plan assets are as follows:

	Yen in millions
	March 31,
	Japanese plans				Foreign plans
	2019		2020		2019		2020
Accumulated benefit obligation		847,017		783,561		515,918		403,810
Fair value of plan assets		198,315		155,345		215,006		93,717

Components of the net periodic pension cost are as follows:

	Yen in millions
	For the years ended March 31,
	Japanese plans									Foreign plans
	2018			2019			2020			2018			2019			2020
Service cost		88,964			99,838			93,298			35,887			46,930			46,869
Interest cost		13,252			12,967			10,514			37,817			40,708			40,335
Expected return on plan assets		(36,409	)		(38,551	)		(37,813	)		(41,048	)		(37,530	)		(43,003	)
Amortization of prior service costs		(4,226	)		(3,904	)		(4,346	)		313			219			142
Recognized net actuarial loss		7,462			6,927			8,356			5,452			7,102			4,255
Amortization of net transition obligation		—			—			—			—			—			—
Net periodic pension cost		69,043			77,277			70,009			38,421			57,429			48,598

Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) are as follows:

	Yen in millions
	For the years ended March 31,
	Japanese plans									Foreign plans
	2018			2019			2020			2018			2019			2020
Net actuarial gain (loss)		39,852			(102,734	)		(59,714	)		(17,163	)		13,952			(26,717	)
Recognized net actuarial loss		7,462			6,927			8,356			5,452			7,102			4,255
Prior service costs		58			1,067			988			12			(13	)		(3,308	)
Amortization of prior service costs		(4,226	)		(3,904	)		(4,346	)		313			219			142
Amortization of net transition obligation		—			—			—			—			—			—
Other		(7,979	)		4,610			2,782			9,004			7,289			(3,211	)
Total recognized in other comprehensive income (loss)		35,167			(94,034	)		(51,934	)		(2,382	)		28,549			(28,839	)

“Other” includes the impact of consolidation and deconsolidation of certain entities due to changes in ownership interest and currency translation adjustments during the years ended March 31, 2018, 2019 and 2020.

The estimated prior service costs and net actuarial loss that will be amortized from accumulated other comprehensive income (loss) into net periodic pension cost during the year ending March 31, 2021 are ¥(3,400) million and ¥13,300 million in Japanese plans, ¥100 million and ¥6,000 million in Foreign plans, respectively.

Weighted-average assumptions used to determine benefit obligations as of March 31, 2019 and 2020 are as follows:

	March 31,
	Japanese plans						Foreign plans
	2019			2020			2019			2020
Discount rate		0.6	%		0.6	%		3.8	%		3.5	%
Rate of compensation increase		3.1	%		2.5	%		3.5	%		3.4	%

As of March 31, 2019 and 2020, the parent company and certain subsidiaries in Japan employ “point” based retirement benefit plans and do not use the rates of compensation increase to determine benefit obligations.

Weighted-average assumptions used to determine net periodic pension cost for the years ended March 31, 2018, 2019 and 2020 are as follows:

	For the years ended March 31,
	Japanese plans									Foreign plans
	2018			2019			2020			2018			2019			2020
Discount rate		0.7	%		0.7	%		0.6	%		4.0	%		3.9	%		3.8	%
Expected return on plan assets		2.4	%		2.4	%		2.4	%		6.0	%		5.6	%		5.2	%
Rate of compensation increase		2.9	%		3.3	%		3.1	%		3.8	%		3.6	%		3.5	%

During the years ended March 31, 2018, 2019 and 2020, the parent company and certain subsidiaries in Japan employ “point” based retirement benefit plans and do not use the rates of compensation increase to determine net periodic pension cost.

The expected rate of return on plan assets is determined after considering several applicable factors including, the composition of plan assets held, assumed risks of asset management, historical results of the returns on plan assets, Toyota’s principal policy for plan asset management, and forecasted market conditions.

Toyota’s policy and objective for plan asset management is to maximize returns on plan assets to meet future benefit payment requirements under risks which Toyota considers permissible. Asset allocations under the plan asset management are determined based on plan asset management policies of each plan which are established to achieve the optimized asset compositions in terms of the long-term overall plan asset management. In Japanese plans, excepting equity securities contributed by Toyota, approximately 40% of the plan assets is invested in equity securities, approximately 30% is invested in debt securities, and the rest of them is invested in insurance contracts and other products. In Foreign plans, excepting equity securities contributed by Toyota, approximately 40% of the plan assets is invested in equity securities, approximately 50% is invested in debt securities, and the rest of them is invested in other products. When actual allocations are not in line with target allocations, Toyota rebalances its investments in accordance with the policies. Prior to making individual investments, Toyota performs in-depth assessments of corresponding factors including category of products, industry type, currencies and liquidity of each potential investment under consideration to mitigate concentrations of risks such as market risk and foreign currency exchange rate risk. To assess performance of the investments, Toyota establishes bench mark return rates for each individual investment, combines these individual bench mark rates based on the asset composition ratios within each asset category, and compares the combined rates with the corresponding actual return rates on each asset category.

The following table summarizes the fair value of classes of plan assets as of March 31, 2019 and 2020. See note 28 to the consolidated financial statements for three levels of input which are used to measure fair value.

Japanese plans

	Yen in millions
	March 31, 2019
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		531,159		—		—		531,159
Commingled funds		—		192,012		—		192,012
		531,159		192,012		—		723,171
Debt securities
Government bonds		98,578		—		—		98,578
Commingled funds		—		286,783		—		286,783
Other		—		54,652		—		54,652
		98,578		341,435		—		440,013
Insurance contracts		—		226,093		—		226,093
Other		84,208		38,439		4,242		126,889
Investments measured at net asset value		—		—		—		84,325
Total		713,945		797,979		4,242		1,600,491

	Yen in millions
	March 31, 2020
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		467,885		—		—		467,885
Commingled funds		—		135,979		—		135,979
		467,885		135,979		—		603,864
Debt securities
Government bonds		86,212		—		—		86,212
Commingled funds		—		278,394		—		278,394
Other		—		75,644		—		75,644
		86,212		354,038		—		440,250
Insurance contracts		—		226,043		—		226,043
Other		89,986		59,780		6,199		155,965
Investments measured at net asset value		—		—		—		86,909
Total		644,083		775,840		6,199		1,513,031

Foreign plans

	Yen in millions
	March 31, 2019
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		123,875		—		—		123,875
Commingled funds		—		215,386		—		215,386
		123,875		215,386		—		339,261
Debt securities
Government bonds		141,054		—		—		141,054
Commingled funds		—		—		—		—
Other		—		164,877		—		164,877
		141,054		164,877		—		305,931
Insurance contracts		—		—		—		—
Other		10,292		24,810		27,903		63,005
Investments measured at net asset value		—		—		—		174,587
Total		275,221		405,073		27,903		882,784

	Yen in millions
	March 31, 2020
	Level 1		Level 2		Level 3		Total
Equity securities
Common stocks		111,997		—		—		111,997
Commingled funds		—		186,918		—		186,918
		111,997		186,918		—		298,915
Debt securities
Government bonds		181,702		—		—		181,702
Commingled funds		—		—		—		—
Other		—		170,650		—		170,650
		181,702		170,650		—		352,352
Insurance contracts		—		—		—		—
Other		10,425		24,410		28,251		63,086
Investments measured at net asset value		—		—		—		154,548
Total		304,124		381,978		28,251		868,901

Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

The following is description of the assets, information about the valuation techniques used to measure fair value, key inputs and significant assumptions:

Quoted market prices for identical securities are used to measure fair value of common stocks. Japanese stocks and foreign stocks represent 73% and 27% (as of March 31, 2019) and 75% and 25% (as of March 31, 2020) of common stocks, respectively, in Japanese plans. Common stocks include mainly foreign stocks as of March 31, 2019 and 2020 in Foreign plans.

Quoted market prices for identical securities are used to measure fair value of government bonds. Japanese government bonds and foreign government bonds represent 33% and 67% (as of March 31, 2019) and 37% and 63% (as of March 31, 2020) of government bonds, respectively, in Japanese plans. Government bonds include mainly foreign government bonds as of March 31, 2019 and 2020 in Foreign plans.

Commingled funds are beneficial interests of collective trust. The fair values of commingled funds are measured using the net asset value (“NAV”) provided by the administrator of the fund, and are categorized by the ability to redeem investments by the NAV.

The fair values of insurance contracts are measured using contracted amount with accrued interest.

“Other” consists of cash equivalents, other private placement investment funds and other assets. The fair values of other private placement investment funds are measured using the NAV provided by the administrator of the fund, and are categorized by the ability to redeem investments by the NAV.

The following tables summarize the changes in Level 3 plan assets measured at fair value for the years ended March 31, 2018, 2019 and 2020:

Japanese plans

	Yen in millions
	For the years ended March 31,
	2018									2019									2020
	Debt securities			Other			Total			Debt securities			Other			Total			Debt securities		Other			Total
Balance at beginning of year		81			496			577			19			—			19			—		4,242			4,242
Actual return on plan assets		—			(4	)		(4	)		—			(164	)		(164	)		—		(43	)		(43	)
Purchases, sales and settlements		(62	)		(492	)		(554	)		(19	)		—			(19	)		—		—			—
Other		—			—			—			—			4,406			4,406			—		2,000			2,000
Balance at end of year		19			—			19			—			4,242			4,242			—		6,199			6,199

Foreign plans

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
	Other			Other			Other
Balance at beginning of year		30,903			31,288			27,903
Actual return on plan assets		2,024			(4,784	)		891
Purchases, sales and settlements		—			—			—
Other		(1,639	)		1,399			(543	)
Balance at end of year		31,288			27,903			28,251

Toyota expects to contribute ¥38,667 million in Japanese plans and ¥17,749 million in Foreign plans to its pension plans in the year ending March 31, 2021.

The following pension benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

	Yen in millions
Years ending March 31,	Japanese plans		Foreign plans
2021		82,748		43,815
2022		86,207		45,841
2023		87,914		47,645
2024		90,887		49,795
2025		87,909		50,854
from 2026 to 2030		441,675		281,343
Total		877,340		519,293

Postretirement benefits other than pensions and postemployment benefits -

Toyota’s U.S. subsidiaries provide certain health care and life insurance benefits to eligible retired employees. In addition, Toyota provides benefits to certain former or inactive employees after employment, but before retirement. These benefits are provided through various insurance companies, health care providers and others. The costs of these benefits are recognized over the period the employee provides credited service to Toyota. Toyota’s obligations under these arrangements are not material.

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Employee benefit plans (Amounts Recognized in Consolidated Balance Sheet Associated with Defined Benefit Plans) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Defined Benefit Plan Disclosure [Line Items]
Accrued pension and severance costs	¥ 978,626	¥ 963,406
Japan
Defined Benefit Plan Disclosure [Line Items]
Accrued expenses (Accrued pension and severance costs)	33,422	34,298
Accrued pension and severance costs	639,764	657,380
Investments and other assets - Other (Prepaid pension and severance costs)	(134,774)	(192,096)
Net amount recognized	538,412	499,582
Foreign Plans
Defined Benefit Plan Disclosure [Line Items]
Accrued expenses (Accrued pension and severance costs)	7,934	3,234
Accrued pension and severance costs	338,862	306,026
Investments and other assets - Other (Prepaid pension and severance costs)	(7,883)	(5,147)
Net amount recognized	¥ 338,913	¥ 304,113

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Product warranties and recalls and other safety measures (Tables)

12 Months Ended

Mar. 31, 2020

Net Changes in Liabilities for Quality Assurances

The net changes in liabilities for quality assurances above for the years ended March 31, 2018, 2019 and 2020 consist of the following:

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Liabilities for quality assurances at beginning of year		1,696,938			1,702,312			1,769,275
Payments made during year		(586,943	)		(489,461	)		(490,117	)
Provision for quality assurances		649,377			565,012			314,494
Changes relating to pre-existing quality assurances		(56,769	)		(1,411	)		(34,345	)
Other		(291	)		(7,177	)		(6,194	)
Liabilities for quality assurances at end of year		1,702,312			1,769,275			1,553,113

Net Changes in Liabilities for Recalls and Other Safety Measures which are Comprised in Liabilities for Quality Assurances

The table below shows the net changes in liabilities for recalls and other safety measures which are comprised in liabilities for quality assurances above for the years ended March 31, 2018, 2019 and 2020.

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Liabilities for recalls and other safety measures at beginning of year		1,275,200			1,275,256			1,302,309
Payments made during year		(456,177	)		(396,971	)		(363,708	)
Provision for recalls and other safety measures		454,391			428,613			169,134
Other		1,842			(4,589	)		(3,024	)
Liabilities for recalls and other safety measures at end of year		1,275,256			1,302,309			1,104,711

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Summary of significant accounting policies (Tables)

12 Months Ended

Mar. 31, 2020

Finance Receivables on Nonaccrual Status

As of March 31, 2019 and 2020, finance receivables on nonaccrual status are as follows:

	Yen in millions
	March 31,
	2019		2020
Retail		9,401		10,434
Finance leases		2,431		3,300
Wholesale		18,217		13,023
Real estate		18,281		10,703
Working capital		—		7,712
		48,330		45,172

Finance Receivables 90 Days or More Past Due and Accruing

As of March 31, 2019 and 2020, finance receivables 90 days or more past due and accruing are as follows:

	Yen in millions
	March 31,
	2019		2020
Retail		28,438		37,709
Finance leases		3,821		5,161
		32,259		42,870

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Vehicles and equipment on operating leases (Tables)

12 Months Ended

Mar. 31, 2020

Summary of Vehicles and Equipment on Operating Lease

Vehicles and equipment on operating leases consist of the following:

	Yen in millions
	March 31,
	2019			2020
Vehicles		6,383,788			6,153,695
Equipment		14,499			17,148
Less - Deferred income and other		(259,124	)		(241,610	)
		6,139,163			5,929,233
Less - Accumulated depreciation		(1,428,779	)		(1,374,172	)
Less - Allowance for credit losses		(13,314	)		(12,171	)
Vehicles and equipment on operating leases, net		4,697,070			4,542,890

Future Minimum Rentals from Vehicles and Equipment on Operating Leases

Future minimum rentals from vehicles and equipment on operating leases are due in installments as follows:

Years ending March 31,	Yen in millions
2021		802,119
2022		531,098
2023		241,462
2024		59,415
2025		13,455
Thereafter		6,195
Total minimum future rentals		1,653,744

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Significant subsequent events - Additional Information (Detail) ¥ in Millions	Apr. 30, 2020 JPY (¥)
Subsequent event | Multiple domestic financial institutions
Debt instrument face amount	¥ 1,250,000

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Income taxes (Provision for Income Taxes) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Current income tax expense:
Current income tax expense	¥ 491,283	¥ 746,538	¥ 742,367
Deferred income tax expense (benefit):
Deferred income tax expense (benefit)	192,147	(86,594)	(237,961)
Provision for income taxes	683,430	659,944	504,406
Parent Company And Domestic Subsidiaries
Current income tax expense:
Current income tax expense	483,087	599,521	565,998
Deferred income tax expense (benefit):
Deferred income tax expense (benefit)	45,739	(110,608)	45,097
Foreign Subsidiaries
Current income tax expense:
Current income tax expense	8,196	147,017	176,369
Deferred income tax expense (benefit):
Deferred income tax expense (benefit)	¥ 146,408	¥ 24,014	¥ (283,058)

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Marketable securities and other securities investments - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Net Investment Income [Line Items]
Proceeds from sales of available-for-sale securities			¥ 248,046
Gross realized gains on sales of available-for-sale securities			7,684
Gross realized losses on sales of available-for-sale securities			278
Impairment losses recognized on available-for-sale securities			¥ 846
Carrying amount of equity securities with readily determinable fair values	¥ 1,895,690	¥ 2,154,951
Carrying amount of equity securities without readily determinable fair values	¥ 364,593	¥ 279,178
Available-for-sale Securities | Public and Corporate Bonds
Net Investment Income [Line Items]
Maturity period for securities, minimum	1 year	1 year
Maturity period for securities, maximum	10 years	10 years

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Summary of significant accounting policies (Finance Receivables on Nonaccrual Status) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables on nonaccrual status	¥ 45,172	¥ 48,330
Retail Receivables Portfolio Segment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables on nonaccrual status	10,434	9,401
Finance Lease Receivables Portfolio Segment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables on nonaccrual status	3,300	2,431
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables on nonaccrual status	13,023	18,217
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables on nonaccrual status	10,703	18,281
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Working capital
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables on nonaccrual status	¥ 7,712	¥ 0

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Short-term borrowings and long-term debt (Aggregate Amounts of Annual Maturities of Long-term Debt During Next Five Years) (Detail) ¥ in Millions	Mar. 31, 2020 JPY (¥)
Long Term Debt And Capital Lease Obligations Repayments Of Principal [Line Items]
2021	¥ 4,574,045
2022	3,692,634
2023	3,014,979
2024	1,575,717
2025	¥ 1,210,354

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Derivative financial instruments (Tables)

12 Months Ended

Mar. 31, 2020

Fair Values of Derivative Financial Instruments

The following table summarizes the fair values of derivative financial instruments as of March 31, 2019 and 2020:

	Yen in millions
	March 31,
	2019			2020
Derivative assets
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Prepaid expenses and other current assets		—			—
Investments and other assets - Other		—			—
Total		—			—
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Prepaid expenses and other current assets		74,971			105,724
Investments and other assets - Other		114,642			372,786
Total		189,613			478,510
Foreign exchange forward and option contracts
Prepaid expenses and other current assets		10,720			25,316
Investments and other assets - Other		—			—
Total		10,720			25,316
Total derivative assets		200,333			503,826
Counterparty netting		(89,364	)		(176,541	)
Collateral received		(46,590	)		(121,979	)
Carrying value of derivative assets		64,379			205,306
Derivative liabilities
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Other current liabilities		—			—
Other long-term liabilities		—			—
Total		—			—
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Other current liabilities		(28,911	)		(76,492	)
Other long-term liabilities		(189,157	)		(343,271	)
Total		(218,068	)		(419,763	)
Foreign exchange forward and option contracts
Other current liabilities		(13,847	)		(17,245	)
Other long-term liabilities		—			—
Total		(13,847	)		(17,245	)
Total derivative liabilities		(231,915	)		(437,008	)
Counterparty netting		89,364			176,541
Collateral posted		110,159			234,937
Carrying value of derivative liabilities		(32,392	)		(25,530	)

Notional Amounts of Derivative Financial Instruments

The following table summarizes the notional amounts of derivative financial instruments as of March 31, 2019 and 2020:

	Yen in millions
	March 31,
	2019				2020
	Designated derivative financial instruments		Undesignated derivative financial instruments		Designated derivative financial instruments		Undesignated derivative financial instruments
Interest rate and currency swap agreements		—		21,001,883		—		20,310,018
Foreign exchange forward and option contracts		—		4,005,578		—		3,916,824
Total		—		25,007,461		—		24,226,842

Gains and Losses on Derivative Financial Instruments and Hedged Items Reported in Consolidated Statement of Income

The following table summarizes the gains and losses on derivative financial instruments and hedged items reported in the consolidated statements of income for the years ended March 31, 2018, 2019 and 2020:

	Yen in millions
	For the years ended March 31,
	2018					2019					2020
	Gains or (losses) on derivative financial instruments		Gains or (losses) on hedged items			Gains or (losses) on derivative financial instruments			Gains or (losses) on hedged items		Gains or (losses) on derivative financial instruments		Gains or (losses) on hedged items
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Cost of financing operations		782		(227	)		(822	)		799		—		—
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Cost of financing operations		42,220					(18,433	)				51,552
Foreign exchange gain (loss), net		30,339					37,124					67,142
Foreign exchange forward and option  contracts
Cost of financing operations		6,442					2,240					33,538
Foreign exchange gain (loss), net		73,115					(69,826	)				8,281

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Shareholders' equity (Tables)

12 Months Ended

Mar. 31, 2020

Changes in Number of Shares of Common Stock Issued

Changes in the number of shares of common stock issued have resulted from the following:

	For the years ended March 31,
	2018		2019		2020
Common stock issued
Balance at beginning of year		3,262,997,492		3,262,997,492		3,262,997,492
Issuance during the year		—		—		—
Purchase and retirement		—		—		—
Balance at end of year		3,262,997,492		3,262,997,492		3,262,997,492

Additional Information Regarding Repurchase, Reissuance and Retirement of Treasury Stock

The repurchase, reissuance and retirement of treasury stock for the years ended March 31, 2018, 2019 and 2020 are as follows:

For the year ended March 31, 2018

Repurchase of treasury stock

Reason for repurchasing treasury stock -

The repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.

Details of matters relating to repurchase -

Number of common shares repurchased	73,708,400 shares
Total purchase price for repurchase of shares	¥499,989 million

Reissuance of treasury stock

Reason for reissuing treasury stock -

On August 4, 2017, the parent company and Mazda Motor Corporation (Mazda) signed an agreement to enter a business and capital alliance, with the aim of further strengthening their lasting partnership. The parent company acquired common stock newly issued by Mazda through a third-party allotment. Mazda acquired the parent company’s shares that were equivalent in value to the Mazda shares through a disposition of treasury stock involving a third-party allotment implemented by the parent company.

Details of matters relating to reissuance -

Number of common shares reissued	8,293,300 shares
Amount of proceeds	¥50,000 million

For the year ended March 31, 2019

Repurchase of treasury stock

Reason for repurchasing treasury stock -

The repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.

Details of matters relating to repurchase -

Number of common shares repurchased	77,622,700 shares
Total purchase price for repurchase of shares	¥549,986 million

For the year ended March 31, 2020

Repurchase of treasury stock

Reason for repurchasing treasury stock -

The repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.

Details of matters relating to repurchase -

Number of common shares repurchased	69,532,900 shares
Total purchase price for repurchase of shares	¥500,139 million

Reissuance of treasury stock

Reason for reissuing treasury stock -

On May 9, 2019, the parent company resolved to conclude contracts aimed toward the establishment of a new joint venture, Prime Life Technologies, related to a town development business with Panasonic. Pursuant to these contracts, the parent company, THC and Misawa Homes conducted a share exchange in which common shares of Toyota were allotted in exchange for common shares of Misawa Homes so that THC, a consolidated subsidiary of the parent company, will become the wholly owning parent company resulting from the share exchange and Misawa Homes, a consolidated subsidiary of THC, will become the wholly owned subsidiary resulting from the share exchange.

Details of matters relating to reissuance -

Number of common shares reissued	3,269,500 shares
Amount of reissuance	¥24,181 million

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Net revenues (Tables)

12 Months Ended

Mar. 31, 2020

Summary of Net Revenues from External Customers by Business and by Product Category

The table below shows Toyota’s net revenues from external customers by business and by product category.

	Yen in millions
	For the year ended March 31, 2019		For the year ended March 31, 2020
Sales of products
Automotive
Vehicles		23,066,190	22,852,916
Parts and components for overseas production		625,483	603,928
Parts and components for after service		2,093,437	2,103,478
Other		1,249,382	1,274,163
Total automotive		27,034,492	26,834,485
All other		1,070,846	925,264
Total sales of products		28,105,338	27,759,749
Financial services		2,120,343	2,170,243
Total net revenues		30,225,681	29,929,992

Summary of lease income

The breakdown of income from leases included in financial service revenues is as follows;

	Yen in millions
	For the year ended March 31, 2019		For the year ended March 31, 2020
Finance leases
Financial income related to net lease investment		91,703		98,865
Operating leases		1,056,080		1,051,804
Total		1,147,783		1,150,669

Summary of Contract Liabilities

Contract liabilities consist of the following:

	Yen in millions
	March 31, 2019		March 31, 2020
Contract liabilities		675,018		691,954

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Allowance for doubtful accounts and credit losses (Allowance for Credit Losses Relating to Finance Receivables and Vehicles and Equipment on Operating Leases) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for credit losses at beginning of year	¥ 196,399	¥ 184,087	¥ 178,101
Provision for credit losses, net of reversal	137,293	81,440	76,143
Charge-offs	(98,352)	(91,698)	(96,444)
Recoveries	25,578	26,178	25,344
Other	(18,569)	(3,608)	943
Allowance for credit losses at end of year	¥ 242,349	¥ 196,399	¥ 184,087

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Finance receivables (Summary of Finance Leases) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Schedule of Finance Lease Obligations [Line Items]
Minimum lease payments	¥ 1,222,323	¥ 1,158,242
Estimated unguaranteed residual values	469,048	478,294
Capital Leases, Net Investment in Direct Financing Leases, Gross, Total	1,691,371	1,636,536
Deferred origination costs	12,349	11,929
Less - Unearned income	(146,087)	(143,838)
Less - Allowance for credit losses	(30,898)	(26,483)
Finance leases, net	¥ 1,526,735	¥ 1,478,144

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Inventories (Components of Inventories) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Inventory [Line Items]
Finished goods	¥ 1,517,173	¥ 1,746,159
Raw materials	485,069	475,504
Work in process	315,139	324,921
Supplies and other	117,537	109,812
Total	¥ 2,434,918	¥ 2,656,396

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Affiliated companies and variable interest entities - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Schedule of Equity Method Investments [Line Items]
Certain affiliated companies accounted for by the equity method	¥ 2,895,656	¥ 2,430,251
Affiliated companies aggregate value	2,247,107	2,513,886
Dividends from affiliated companies accounted for by the equity method	208,950	204,322	¥ 196,403
Finance receivables	17,038,029	16,928,889
Operating leases	5,929,233	6,139,163
Investment In Trusts
Schedule of Equity Method Investments [Line Items]
Maximum exposure to loss related to VIEs	16,622	22,001
Debt Securities
Schedule of Equity Method Investments [Line Items]
Maximum exposure to loss related to VIEs	748,131	351,945
Vehicles
Schedule of Equity Method Investments [Line Items]
Operating leases	6,153,695	6,383,788
Variable Interest Entity, Primary Beneficiary
Schedule of Equity Method Investments [Line Items]
Restricted cash	140,750	131,804
Secured debt	1,979,563	1,893,073
Marketable securities and other securities investments	2,767,681	2,790,679
Variable Interest Entity, Primary Beneficiary | Vehicles
Schedule of Equity Method Investments [Line Items]
Operating leases	621,633	609,694
Retail Receivables Portfolio Segment | Variable Interest Entity, Primary Beneficiary
Schedule of Equity Method Investments [Line Items]
Finance receivables	¥ 1,906,256	¥ 1,872,564

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - JPY (¥) ¥ in Millions	Total	Common stock	Additional paid-in capital	Retained earnings	Accumulated other comprehensive income (loss)	Treasury stock, at cost	Total Toyota Motor Corporation shareholders' equity	Noncontrolling interests
Balances at Mar. 31, 2017	¥ 18,183,076	¥ 397,050	¥ 484,013	¥ 17,601,070	¥ 640,922	¥ (1,608,243)	¥ 17,514,812	¥ 668,264
Equity transaction with noncontrolling interests and other	(1,659)		1,817	11,400	(11,400)		1,817	(3,476)
Comprehensive income
Net income	2,586,106			2,493,983			2,493,983	92,123
Other comprehensive income (loss)
Foreign currency translation adjustments	(120,606)				(118,977)		(118,977)	(1,629)
Unrealized gains (losses) on securities	(94,559)				(96,581)		(96,581)	2,022
Pension liability adjustments	22,315				21,735		21,735	580
Total comprehensive income	2,393,256						2,300,160	93,096
Accretion to Mezzanine equity	(4,849)			(4,849)			(4,849)
Dividends to Toyota Motor Corporation class shareholders	(7,442)			(7,442)			(7,442)
Dividends paid to Toyota Motor Corporation common shareholders	(620,698)			(620,698)			(620,698)
Dividends paid to noncontrolling interests	(63,764)							(63,764)
Repurchase of treasury stock	(500,177)					(500,177)	(500,177)
Reissuance of treasury stock	52,359		1,672			50,687	52,359
Balances at Mar. 31, 2018	19,430,102	397,050	487,502	19,473,464	435,699	(2,057,733)	18,735,982	694,120
Cumulative effect of accounting changes	(27,538)			1,282,082	(1,309,620)		(27,538)
Equity transaction with noncontrolling interests and other	(2,121)		105				105	(2,226)
Comprehensive income
Net income	1,985,587			1,882,873			1,882,873	102,714
Other comprehensive income (loss)
Foreign currency translation adjustments	27,016				29,448		29,448	(2,432)
Unrealized gains (losses) on securities	(21,165)				(21,111)		(21,111)	(54)
Pension liability adjustments	(54,836)				(51,066)		(51,066)	(3,770)
Total comprehensive income	1,936,602						1,840,144	96,458
Accretion to Mezzanine equity	(4,850)			(4,850)			(4,850)
Dividends to Toyota Motor Corporation class shareholders	(9,938)			(9,938)			(9,938)
Dividends paid to Toyota Motor Corporation common shareholders	(636,116)			(636,116)			(636,116)
Dividends paid to noncontrolling interests	(69,367)							(69,367)
Repurchase of treasury stock	(550,107)					(550,107)	(550,107)
Reissuance of treasury stock	470		(445)			915	470
Balances at Mar. 31, 2019	20,067,137	397,050	487,162	21,987,515	(916,650)	(2,606,925)	19,348,152	718,985
Equity transaction with noncontrolling interests and other	(28,939)		(1,881)		5,796		3,915	(32,854)
Comprehensive income
Net income	2,142,329			2,076,183			2,076,183	66,146
Other comprehensive income (loss)
Foreign currency translation adjustments	(333,854)				(313,186)		(313,186)	(20,668)
Unrealized gains (losses) on securities	118,363				118,403		118,403	(40)
Pension liability adjustments	(60,196)				(60,636)		(60,636)	440
Total comprehensive income	1,866,642						1,820,764	45,878
Accretion to Mezzanine equity	(4,850)			(4,850)			(4,850)
Dividends to Toyota Motor Corporation class shareholders	(12,434)			(12,434)			(12,434)
Dividends paid to Toyota Motor Corporation common shareholders	(618,801)			(618,801)			(618,801)
Dividends paid to noncontrolling interests	(54,945)							(54,945)
Repurchase of treasury stock	(500,309)					(500,309)	(500,309)
Reissuance of treasury stock	24,181		4,053			20,128	24,181
Balances at Mar. 31, 2020	¥ 20,737,682	¥ 397,050	¥ 489,334	¥ 23,427,613	¥ (1,166,273)	¥ (3,087,106)	¥ 20,060,618	¥ 677,064

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Per share amounts (Reconciliations of Differences Between Basic and Diluted Net Income Attributable to Toyota Motor Corporation Per Common Share) (Detail) - JPY (¥) ¥ / shares in Units, shares in Thousands, ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share Disclosure [Line Items]
Net income attributable to Toyota Motor Corporation	¥ 2,076,183	¥ 1,882,873	¥ 2,493,983
Accretion to Mezzanine equity	(4,850)	(4,850)	(4,849)
Dividends to Toyota Motor Corporation Model AA Class Shareholders	(12,434)	(9,938)	(7,442)
Net income attributable to Toyota Motor Corporation, basic	2,058,899	1,868,085	2,481,692
Effect of dilutive securities
Model AA Class Shares	17,284	14,788	12,291
Assumed exercise of dilutive stock options		0	(4)
Net income attributable to Toyota Motor Corporation, diluted	¥ 2,076,183	¥ 1,882,873	¥ 2,493,979
Weighted-average shares, basic	2,798,918	2,871,534	2,947,365
Effect of dilutive securities
Model AA Class Shares	47,100	47,100	47,100
Assumed exercise of dilutive stock options		40	301
Weighted-average shares, diluted	2,846,018	2,918,674	2,994,766
Net income attributable to Toyota Motor Corporation per share, basic	¥ 735.61	¥ 650.55	¥ 842.00
Net income attributable to Toyota Motor Corporation per share, diluted	¥ 729.50	¥ 645.11	¥ 832.78

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Net revenues (Summary of Net Revenues from External Customers by Business and by Product Category) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Disaggregation of Revenue [Line Items]
Total net revenues	¥ 29,929,992	¥ 30,225,681
Product [Member]
Disaggregation of Revenue [Line Items]
Total net revenues	27,759,749	28,105,338
Product [Member] | Vehicles
Disaggregation of Revenue [Line Items]
Total net revenues	22,852,916	23,066,190
Product [Member] | Parts and Components for Overseas Production
Disaggregation of Revenue [Line Items]
Total net revenues	603,928	625,483
Product [Member] | Parts and Components for After Service
Disaggregation of Revenue [Line Items]
Total net revenues	2,103,478	2,093,437
Product [Member] | Other
Disaggregation of Revenue [Line Items]
Total net revenues	1,274,163	1,249,382
Product [Member] | Automotive
Disaggregation of Revenue [Line Items]
Total net revenues	26,834,485	27,034,492
Product [Member] | All Other
Disaggregation of Revenue [Line Items]
Total net revenues	925,264	1,070,846
Financial Services
Disaggregation of Revenue [Line Items]
Total net revenues	¥ 2,170,243	¥ 2,120,343

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Trade accounts and notes receivable, allowance for doubtful accounts, current	¥ 23,944	¥ 16,370
Model AA Class Shares, no par value	¥ 0	¥ 0
Model AA Class Shares, authorized	150,000,000	150,000,000
Model AA Class Shares, issued	47,100,000	47,100,000
Common stock, no par value	¥ 0	¥ 0
Common stock, authorized	10,000,000,000	10,000,000,000
Common stock, issued	3,262,997,492	3,262,997,492
Treasury stock, shares	496,844,960	430,558,325
Total number of authorized shares for common stock and Model AA Class Shares	10,000,000,000	10,000,000,000
Marketable Securities [Member]
Marketable securities loaned asset	¥ 156,051
Marketable Securities And Other Securities Investment [Member]
Marketable securities loaned asset	¥ 2,061,295

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Employee benefit plans (Changes in Level 3 Plan Assets Measured At Fair Value) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Japan
Defined Benefit Plan Disclosure [Line Items]
Balance at beginning of year	¥ 1,600,491	¥ 1,612,879
Actual return on plan assets	(70,503)	3,208
Balance at end of year	1,513,031	1,600,491	¥ 1,612,879
Foreign Plans
Defined Benefit Plan Disclosure [Line Items]
Balance at beginning of year	882,784	815,483
Actual return on plan assets	13,421	59,237
Balance at end of year	868,901	882,784	815,483
Level 3 | Japan
Defined Benefit Plan Disclosure [Line Items]
Balance at beginning of year	4,242	19	577
Actual return on plan assets	(43)	(164)	(4)
Purchases, sales and settlements		(19)	(554)
Other	2,000	4,406
Balance at end of year	6,199	4,242	19
Level 3 | Foreign Plans
Defined Benefit Plan Disclosure [Line Items]
Balance at beginning of year	27,903
Balance at end of year	28,251	27,903
Level 3 | Debt securities | Japan
Defined Benefit Plan Disclosure [Line Items]
Balance at beginning of year		19	81
Purchases, sales and settlements		(19)	(62)
Balance at end of year			19
Level 3 | Other | Japan
Defined Benefit Plan Disclosure [Line Items]
Balance at beginning of year	4,242		496
Actual return on plan assets	(43)	(164)	(4)
Purchases, sales and settlements			(492)
Other	2,000	4,406
Balance at end of year	6,199	4,242
Level 3 | Other | Foreign Plans
Defined Benefit Plan Disclosure [Line Items]
Balance at beginning of year	27,903	31,288	30,903
Actual return on plan assets	891	(4,784)	2,024
Other	(543)	1,399	(1,639)
Balance at end of year	¥ 28,251	¥ 27,903	¥ 31,288

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Derivative financial instruments (Gains and Losses on Derivative Financial Instruments and Hedged Items Reported in Consolidated Statement of Income) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Fair value hedging derivative financial instruments | Interest rate and currency swap agreements | Cost of financing operations
Derivative Instruments, Gain (Loss) [Line Items]
Gains or (losses) on derivative financial instruments	¥ 0	¥ (822)	¥ 782
Gains or (losses) on hedged items	0	799	(227)
Undesignated derivative financial instruments | Interest rate and currency swap agreements | Cost of financing operations
Derivative Instruments, Gain (Loss) [Line Items]
Gains or (losses) on derivative financial instruments	51,552	(18,433)	42,220
Undesignated derivative financial instruments | Interest rate and currency swap agreements | Foreign exchange gain (loss), net
Derivative Instruments, Gain (Loss) [Line Items]
Gains or (losses) on derivative financial instruments	67,142	37,124	30,339
Undesignated derivative financial instruments | Foreign exchange forward and option contracts | Cost of financing operations
Derivative Instruments, Gain (Loss) [Line Items]
Gains or (losses) on derivative financial instruments	33,538	2,240	6,442
Undesignated derivative financial instruments | Foreign exchange forward and option contracts | Foreign exchange gain (loss), net
Derivative Instruments, Gain (Loss) [Line Items]
Gains or (losses) on derivative financial instruments	¥ 8,281	¥ (69,826)	¥ 73,115

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Inventories

12 Months Ended

Mar. 31, 2020

Inventories

8. Inventories:

Inventories consist of the following:

	Yen in millions
	March 31,
	2019		2020
Finished goods		1,746,159		1,517,173
Raw materials		475,504		485,069
Work in process		324,921		315,139
Supplies and other		109,812		117,537
Total		2,656,396		2,434,918

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Acquisitions and dispositions

12 Months Ended

Mar. 31, 2020

Acquisitions and dispositions

4. Acquisitions and dispositions:

The parent company and Panasonic established a new joint venture, Prime Life Technologies, related to a town development business. Prime Life Technologies became Toyota’s affiliated company, and THC as well as Misawa Homes became subsidiaries of Prime Life Technologies, causing THC and Misawa Homes to no longer be the parent company’s consolidated subsidiary companies.

Specifically, at the meeting of the Board of Directors held on May 9, 2019, the parent company resolved to conclude contracts aimed toward the establishment of Prime Life Technologies with Panasonic. On January 7, 2020, THC and Misawa Homes, each a subsidiary of Toyota, completed a share exchange in which THC became the wholly owning parent company and Misawa Homes became the wholly owned subsidiary company, pursuant to a share exchange agreement that was approved at the general meeting of shareholders of Misawa Homes on November 26, 2019. Also effective January 7, 2020, and pursuant to the share transfer plan that was approved at the general meeting of shareholders of THC on December 19, 2019, Toyota transferred all of the shares of THC common stock to Prime Life Technologies, causing it to become the wholly owning parent company of THC. THC then distributed all issued shares of Misawa Homes to Prime Life Technologies as a dividend of surplus, as approved at the general meeting of shareholders of THC on January 7, 2020, with Prime Life Technologies thereby becoming the wholly owning parent company of THC and Misawa Homes.

Gains or losses realized from these transactions are not material.

In addition to the above, Toyota made several acquisitions and dispositions during the years ended March 31, 2018, 2019 and 2020, however the assets and liabilities acquired or transferred were not material.

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Shareholders' equity (Changes in Number of Shares of Common Stock Issued) (Detail) - shares	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Reconciliation of Common Stock Outstanding [Line Items]
Balance at beginning of year	3,262,997,492	3,262,997,492	3,262,997,492
Issuance during the year	0	0	0
Purchase and retirement	0	0	0
Balance at end of year	3,262,997,492	3,262,997,492	3,262,997,492

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Significant subsequent events

12 Months Ended

Mar. 31, 2020

Significant subsequent events

29. Significant subsequent events:

Plant suspensions -

For reasons such as government directives as well as anticipated reduced demand for its vehicles due to the global spread of COVID-19, Toyota had continued after April 2020 to suspend temporarily the production of automobiles and components at selected plants in Japan and overseas. Production is subsequently being resumed. It is uncertain how this suspension will affect Toyota’s financial results.

Borrowing funds -

Taking into consideration its funding plans, which take into account the risk that COVID-19 will have a prolonged impact, and market trends, in April 2020 Toyota entered into loan agreements and borrowed funds in an aggregate amount of ¥1,250,000 million with multiple domestic financial institutions. The interest rates under the loan agreements are approximately the same as prevailing market rates, and the tenor of the loans are around one year. None of these agreements has collateral or other material covenant provisions.

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Income taxes (Net Changes in Total Valuation Allowance for Deferred Tax Assets) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Valuation Allowance [Line Items]
Valuation allowance at beginning of year	¥ 93,599	¥ 93,814	¥ 146,623
Additions	27,629	13,967	16,106
Deductions	(6,089)	(9,801)	(74,435)
Other	(4,497)	(4,381)	5,520
Valuation allowance at end of year	¥ 110,642	¥ 93,599	¥ 93,814

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Derivative financial instruments

12 Months Ended

Mar. 31, 2020

Derivative financial instruments

21. Derivative financial instruments:

Toyota employs derivative financial instruments, including foreign exchange forward contracts, foreign currency options, interest rate swaps, interest rate currency swap agreements and interest rate options to manage its exposure to fluctuations in interest rates and foreign currency exchange rates. Toyota does not use derivatives for speculation or trading.

Fair value hedges -

Toyota enters into interest rate swaps and interest rate currency swap agreements mainly to convert its fixed-rate debt to variable-rate debt. Toyota uses interest rate swap agreements in managing interest rate risk exposure. Interest rate swap agreements are executed as either an integral part of specific debt transactions or on a portfolio basis. Toyota uses interest rate currency swap agreements to hedge exposure to currency exchange rate fluctuations on principal and interest payments for borrowings denominated in foreign currencies. Notes and loans payable issued in foreign currencies are hedged by concurrently executing interest rate currency swap agreements, which involve the exchange of foreign currency principal and interest obligations for each functional currency obligations at agreed-upon currency exchange and interest rates.

For the years ended March 31, 2018, 2019 and 2020, the ineffective portion of Toyota’s fair value hedge relationships was not material. For fair value hedging relationships, the components of each derivative’s gain or loss are included in the assessment of hedge effectiveness.

Undesignated derivative financial instruments -

Toyota uses foreign exchange forward contracts, foreign currency options, interest rate swaps, interest rate currency swap agreements, and interest rate options, to manage its exposure to foreign currency exchange rate fluctuations and interest rate fluctuations from an economic perspective, and for some of which Toyota is unable to or has elected not to apply hedge accounting.

Fair value and gains or losses on derivative financial instruments -

The following table summarizes the fair values of derivative financial instruments as of March 31, 2019 and 2020:

	Yen in millions
	March 31,
	2019			2020
Derivative assets
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Prepaid expenses and other current assets		—			—
Investments and other assets - Other		—			—
Total		—			—
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Prepaid expenses and other current assets		74,971			105,724
Investments and other assets - Other		114,642			372,786
Total		189,613			478,510
Foreign exchange forward and option contracts
Prepaid expenses and other current assets		10,720			25,316
Investments and other assets - Other		—			—
Total		10,720			25,316
Total derivative assets		200,333			503,826
Counterparty netting		(89,364	)		(176,541	)
Collateral received		(46,590	)		(121,979	)
Carrying value of derivative assets		64,379			205,306
Derivative liabilities
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Other current liabilities		—			—
Other long-term liabilities		—			—
Total		—			—
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Other current liabilities		(28,911	)		(76,492	)
Other long-term liabilities		(189,157	)		(343,271	)
Total		(218,068	)		(419,763	)
Foreign exchange forward and option contracts
Other current liabilities		(13,847	)		(17,245	)
Other long-term liabilities		—			—
Total		(13,847	)		(17,245	)
Total derivative liabilities		(231,915	)		(437,008	)
Counterparty netting		89,364			176,541
Collateral posted		110,159			234,937
Carrying value of derivative liabilities		(32,392	)		(25,530	)

The following table summarizes the notional amounts of derivative financial instruments as of March 31, 2019 and 2020:

	Yen in millions
	March 31,
	2019				2020
	Designated derivative financial instruments		Undesignated derivative financial instruments		Designated derivative financial instruments		Undesignated derivative financial instruments
Interest rate and currency swap agreements		—		21,001,883		—		20,310,018
Foreign exchange forward and option contracts		—		4,005,578		—		3,916,824
Total		—		25,007,461		—		24,226,842

The following table summarizes the gains and losses on derivative financial instruments and hedged items reported in the consolidated statements of income for the years ended March 31, 2018, 2019 and 2020:

	Yen in millions
	For the years ended March 31,
	2018					2019					2020
	Gains or (losses) on derivative financial instruments		Gains or (losses) on hedged items			Gains or (losses) on derivative financial instruments			Gains or (losses) on hedged items		Gains or (losses) on derivative financial instruments		Gains or (losses) on hedged items
Derivative financial instruments designated as hedging instruments
Interest rate and currency swap agreements
Cost of financing operations		782		(227	)		(822	)		799		—		—
Undesignated derivative financial instruments
Interest rate and currency swap agreements
Cost of financing operations		42,220					(18,433	)				51,552
Foreign exchange gain (loss), net		30,339					37,124					67,142
Foreign exchange forward and option  contracts
Cost of financing operations		6,442					2,240					33,538
Foreign exchange gain (loss), net		73,115					(69,826	)				8,281

Undesignated derivative financial instruments are used to manage economic risks of fluctuations in foreign currency exchange rates and interest rates of certain receivables and payables. Those economic risks are offset by changes in the fair value of undesignated derivative financial instruments.

Cash flows from transactions of derivative financial instruments are included in cash flows from operating activities in the consolidated statements of cash flows.

Credit risk related contingent features -

Toyota enters into International Swaps and Derivatives Association Master Agreements with counterparties. These Master Agreements contain a provision requiring either Toyota or the counterparty to settle the contract or to post assets to the other party in the event of a ratings downgrade below a specified threshold.

The aggregate fair value amount of derivative financial instruments that contain credit risk related contingent features that are in a net liability position after being offset by cash collateral as of March 31, 2020 is ¥6,750 million. The aggregate fair value amount of assets that are already posted as cash collateral as of March 31, 2020 is ¥230,830 million. If the ratings of Toyota decline below specified thresholds, the maximum amount of assets to be posted or for which Toyota could be required to settle the contracts is ¥6,750 million as of March 31, 2020.

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Accumulated other comprehensive income (Components of Accumulated Other Comprehensive Income (Loss) and Related Changes, Net of Taxes) (Parenthetical) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive income (loss) before reclassifications, taxes	¥ (22,845)	¥ 37,880	¥ 27,347
Reclassifications, taxes	(4,360)	4,071	7,229
Foreign currency translation adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive income (loss) before reclassifications, taxes	1,865	8,703	(3,624)
Reclassifications, taxes	0
Unrealized gains (losses) on securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive income (loss) before reclassifications, taxes	(50,969)	3,382	38,539
Reclassifications, taxes	(1,960)	6,963	9,729
Pension liability adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive income (loss) before reclassifications, taxes	26,259	25,795	(7,568)
Reclassifications, taxes	¥ (2,400)	¥ (2,892)	¥ (2,500)

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Segment data

12 Months Ended

Mar. 31, 2020

Segment data

25. Segment data:

The operating segments reported below are the segments of Toyota for which separate financial information is available and for which operating income/loss amounts are evaluated regularly by executive management in deciding how to allocate resources and in assessing performance.

The major portions of Toyota’s operations on a worldwide basis are derived from the Automotive and Financial Services business segments. The Automotive segment designs, manufactures and distributes sedans, minivans, compact cars, sport-utility vehicles, trucks and related parts and accessories. The Financial Services segment consists primarily of financing, and vehicle leasing operations to assist in the merchandising of the parent company and its affiliated companies products as well as other products. The All Other segment includes the design, manufacturing and sales of housing, telecommunications and other businesses.

The following tables present certain information regarding Toyota’s industry or geographic segments and overseas revenues by destination as of and for the years ended March 31, 2018, 2019 and 2020.

Segment operating results and assets -

As of and for the year ended March 31, 2018:

	Yen in millions
	Automotive		Financial Services		All Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		26,347,229		1,959,234		1,073,047		—			29,379,510
Inter-segment sales and transfers		50,711		57,774		573,071		(681,556	)		—
Total		26,397,940		2,017,008		1,646,118		(681,556	)		29,379,510
Operating expenses		24,386,805		1,731,462		1,545,306		(683,925	)		26,979,648
Operating income		2,011,135		285,546		100,812		2,369			2,399,862
Assets		17,054,209		23,055,981		2,178,118		8,019,941			50,308,249
Investment in equity method investees		3,054,583		11,713		—		96,415			3,162,711
Depreciation expenses		976,735		723,061		34,237		—			1,734,033
Capital expenditure		1,381,122		2,166,805		62,447		(11,667	)		3,598,707

As of and for the year ended March 31, 2019:

	Yen in millions
	Automotive		Financial Services		All Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		27,034,492		2,120,343		1,070,846		—			30,225,681
Inter-segment sales and transfers		44,585		33,204		605,531		(683,320	)		—
Total		27,079,077		2,153,547		1,676,377		(683,320	)		30,225,681
Operating expenses		25,040,193		1,830,726		1,570,839		(683,622	)		27,758,136
Operating income		2,038,884		322,821		105,538		302			2,467,545
Assets		17,799,376		24,044,700		2,125,271		7,967,602			51,936,949
Investment in equity method investees		3,215,856		12,172		—		85,675			3,313,703
Depreciation expenses		997,312		758,847		36,216		—			1,792,375
Capital expenditure		1,520,366		2,165,609		66,075		(13,163	)		3,738,887

As of and for the year ended March 31, 2020:

	Yen in millions
	Automotive		Financial   Services		All Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		26,834,485		2,170,243		925,264		—			29,929,992
Inter-segment sales and transfers		29,029		20,316		579,286		(628,631	)		—
Total		26,863,514		2,190,559		1,504,550		(628,631	)		29,929,992
Operating expenses		24,811,168		1,898,376		1,407,895		(630,316	)		27,487,123
Operating income		2,052,346		292,183		96,655		1,685			2,442,869
Assets		18,754,728		24,858,837		2,023,111		7,043,760			52,680,436
Investment in equity method investees		3,711,151		61,852		180,425		137,362			4,090,790
Depreciation expenses		824,777		743,710		36,896		—			1,605,383
Capital expenditure		1,454,142		2,062,718		71,554		14,818			3,603,232

Geographic information -

As of and for the year ended March 31, 2018:

	Yen in millions
	Japan		North America		Europe		Asia		Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		9,273,672		10,347,266		2,940,243		4,497,374		2,320,955		—			29,379,510
Inter-segment sales and transfers		6,751,172		227,144		244,981		650,765		132,344		(8,006,406	)		—
Total		16,024,844		10,574,410		3,185,224		5,148,139		2,453,299		(8,006,406	)		29,379,510
Operating expenses		14,364,926		10,435,511		3,110,198		4,714,940		2,340,636		(7,986,563	)		26,979,648
Operating income		1,659,918		138,899		75,026		433,199		112,663		(19,843	)		2,399,862
Assets		15,797,024		16,936,704		3,346,179		4,893,582		2,986,661		6,348,099			50,308,249
Long-lived assets		3,511,663		5,179,139		359,355		797,435		420,081		—			10,267,673

As of and for the year ended March 31, 2019:

	Yen in millions
	Japan		North America		Europe		Asia		Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		9,520,148		10,585,934		3,055,654		4,832,392		2,231,553		—			30,225,681
Inter-segment sales and transfers		7,105,213		231,313		183,197		680,639		101,890		(8,302,252	)		—
Total		16,625,361		10,817,247		3,238,851		5,513,031		2,333,443		(8,302,252	)		30,225,681
Operating expenses		14,933,686		10,702,732		3,113,983		5,055,542		2,242,333		(8,290,140	)		27,758,136
Operating income		1,691,675		114,515		124,868		457,489		91,110		(12,112	)		2,467,545
Assets		16,465,702		17,452,216		3,872,301		5,176,990		3,067,270		5,902,470			51,936,949
Long-lived assets		3,607,843		5,469,262		453,921		729,494		424,974		—			10,685,494

As of and for the year ended March 31, 2020:

	Yen in millions
	Japan		North America		Europe		Asia		Other		Inter-segment Elimination/ Unallocated Amount			Consolidated
Net revenues
Sales to external customers		9,522,905		10,416,582		3,138,755		4,828,635		2,023,115		—			29,929,992
Inter-segment sales and transfers		6,938,616		222,166		222,123		510,021		89,387		(7,982,313	)		—
Total		16,461,521		10,638,748		3,360,878		5,338,656		2,112,502		(7,982,313	)		29,929,992
Operating expenses		14,893,543		10,368,119		3,210,333		4,967,657		2,021,778		(7,974,307	)		27,487,123
Operating income		1,567,978		270,629		150,545		370,999		90,724		(8,006	)		2,442,869
Assets		17,517,032		18,012,336		4,192,858		5,241,588		2,837,944		4,878,678			52,680,436
Long-lived assets		3,880,118		5,374,456		561,371		668,252		394,446		—			10,878,643

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

Revenues are attributed to geographies based on the country location of the parent company or the subsidiary that transacted the sale with the external customer.

There are no any individually material countries with respect to revenues, and long-lived assets included in other foreign countries.

Unallocated amounts included in assets represent assets held for corporate purposes, which mainly consist of cash and cash equivalents and marketable securities and other securities investments. Such corporate assets were ¥9,386,399 million, ¥9,329,020 million and ¥8,630,468 million, as of March 31, 2018, 2019 and 2020, respectively.

Transfers between industry or geographic segments are made at terms and conditions in the ordinary course of business. In measuring the reportable segments’ income or losses, operating income consists of revenue less operating expenses.

Overseas revenues by destination -

The following information shows revenues that are attributed to countries based on location of customers, excluding customers in Japan. In addition to the disclosure requirements under U.S.GAAP, Toyota discloses this information in order to provide financial statements users with valuable information.

	Yen in millions
	For the years ended March 31,
	2018		2019		2020
North America		10,403,647		10,675,298		10,543,638
Europe		2,730,915		2,873,737		2,937,216
Asia		4,793,110		5,355,991		5,263,943
Other		4,186,666		3,944,854		3,936,572

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

Certain financial statements data on non-financial services and financial services businesses -

The financial data below presents separately Toyota’s non-financial services and financial services businesses.

Balance sheets -

	Yen in millions
	March 31,
	2019			2020
Assets
Non-Financial Services Businesses
Current assets
Cash and cash equivalents		2,790,212			2,774,498
Marketable securities		1,108,540			648,982
Trade accounts and notes receivable, less allowance for doubtful accounts		2,489,105			2,155,943
Inventories		2,656,396			2,434,916
Prepaid expenses and other current assets		2,118,922			2,413,274
Total current assets		11,163,175			10,427,613
Investments and other assets		11,643,209			12,435,115
Property, plant and equipment		6,178,503			6,293,992
Total Non-Financial Services Businesses assets		28,984,887			29,156,720
Financial Services Business
Current assets
Cash and cash equivalents		784,492			1,416,020
Marketable securities		18,620			29,749
Finance receivables, net		6,647,771			6,614,171
Prepaid expenses and other current assets		997,116			1,205,912
Total current assets		8,447,999			9,265,852
Noncurrent finance receivables, net		10,281,118			10,423,858
Investments and other assets		808,592			861,594
Property, plant and equipment		4,506,991			4,307,533
Total Financial Services Business assets		24,044,700			24,858,837
Eliminations		(1,092,638	)		(1,335,121	)
Total assets		51,936,949			52,680,436

Assets in the non-financial services include unallocated corporate assets.

	Yen in millions
	March 31,
	2019			2020
Liabilities
Non-Financial Services Businesses
Current liabilities
Short-term borrowings		579,901			483,871
Current portion of long-term debt		173,379			156,664
Accounts payable		2,616,143			2,404,385
Accrued expenses		3,075,411			2,789,153
Income taxes payable		300,703			201,200
Other current liabilities		1,755,737			1,773,883
Total current liabilities		8,501,274			7,809,156
Long-term liabilities
Long-term debt		784,256			818,371
Accrued pension and severance costs		948,377			963,061
Other long-term liabilities		1,059,237			1,303,628
Total long-term liabilities		2,791,870			3,085,060
Total Non-Financial Services Businesses liabilities		11,293,144			10,894,216
Financial Services Business
Current liabilities
Short-term borrowings		5,113,888			5,432,180
Current portion of long-term debt		4,127,133			4,508,666
Accounts payable		39,187			39,226
Accrued expenses		161,105			151,857
Income taxes payable		20,295			16,917
Other current liabilities		997,842			982,892
Total current liabilities		10,459,450			11,131,738
Long-term liabilities
Long-term debt		9,974,516			10,006,491
Accrued pension and severance costs		15,029			15,566
Other long-term liabilities		722,279			725,769
Total long-term liabilities		10,711,824			10,747,826
Total Financial Services Business liabilities		21,171,274			21,879,564
Eliminations		(1,092,679	)		(1,335,195	)
Total liabilities		31,371,739			31,438,585
Mezzanine equity		498,073			504,169
Total Toyota Motor Corporation shareholders’ equity		19,348,152			20,060,618
Noncontrolling interests		718,985			677,064
Total shareholders’ equity		20,067,137			20,737,682
Total liabilities, mezzanine equity and shareholders’ equity		51,936,949			52,680,436

Statements of income -

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Non-Financial Services Businesses
Net revenues		27,448,165			28,133,676			27,775,932
Costs and expenses
Cost of revenues		22,613,450			23,400,550			23,143,209
Selling, general and administrative		2,721,362			2,591,249			2,483,501
Total costs and expenses		25,334,812			25,991,799			25,626,710
Operating income		2,113,353			2,141,877			2,149,222
Other income (expense), net		222,326			(161,608	)		130,259
Income before income taxes and equity in earnings of affiliated companies		2,335,679			1,980,269			2,279,481
Provision for income taxes		738,763			580,031			618,252
Equity in earnings of affiliated companies		467,718			357,527			260,149
Net income		2,064,634			1,757,765			1,921,378
Less - Net income attributable to noncontrolling interests		(89,533	)		(97,500	)		(67,559	)
Net income attributable to Toyota Motor Corporation - Non-Financial Services Businesses		1,975,101			1,660,265			1,853,819
Financial Services Business
Net revenues		2,017,008			2,153,547			2,190,559
Costs and expenses
Cost of revenues		1,320,348			1,418,636			1,395,211
Selling, general and administrative		411,114			412,090			503,165
Total costs and expenses		1,731,462			1,830,726			1,898,376
Operating income		285,546			322,821			292,183
Other income (expense), net		(794	)		(17,658	)		(17,103	)
Income before income taxes and equity in earnings of affiliated companies		284,752			305,163			275,080
Provision for income taxes		(234,356	)		79,903			65,164
Equity in earnings of affiliated companies		2,365			2,539			11,003
Net income		521,473			227,799			220,919
Less - Net income attributable to noncontrolling interests		(2,589	)		(5,214	)		1,413
Net income attributable to Toyota Motor Corporation - Financial Services Business		518,884			222,585			222,332
Eliminations		(2	)		23			32
Net income attributable to Toyota Motor Corporation		2,493,983			1,882,873			2,076,183

Statements of cash flows -

	Yen in millions									Yen in millions
	For the year ended March 31, 2018									For the year ended March 31, 2019
	Non-Financial Services Businesses			Financial Services Business			Consolidated			Non-Financial Services Businesses			Financial Services Business			Consolidated
Cash flows from operating activities
Net income		2,064,634			521,473			2,586,106			1,757,765			227,799			1,985,587
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		1,010,972			723,061			1,734,033			1,033,528			758,847			1,792,375
Provision (reversal) for doubtful accounts and credit losses		(74	)		76,143			76,069			(1,375	)		81,440			80,065
Pension and severance costs, less payments		5,027			(741	)		4,286			30,477			1,168			31,645
Losses on disposal of fixed assets		35,010			279			35,289			33,676			2,226			35,902
Unrealized losses (gains) on securities		459			387			846			338,626			846			339,472
Deferred income taxes		64,143			(302,103	)		(237,961	)		(110,346	)		23,742			(86,594	)
Equity in earnings of affiliated companies		(467,718	)		(2,365	)		(470,083	)		(357,527	)		(2,539	)		(360,066	)
Changes in operating assets and liabilities, and other		205,434			312,828			494,543			(17,488	)		15,557			(51,789	)
Net cash provided by operating activities		2,917,887			1,328,962			4,223,128			2,707,336			1,109,086			3,766,597
Cash flows from investing activities
Additions to finance receivables		—			(25,153,088	)		(15,058,516	)		—			(26,000,249	)		(15,884,610	)
Collection of and proceeds from sales of finance receivables		—			24,117,335			14,046,312			—			24,925,930			14,859,103
Additions to fixed assets excluding equipment leased to others		(1,276,788	)		(14,329	)		(1,291,117	)		(1,435,964	)		(16,761	)		(1,452,725	)
Additions to equipment leased to others		(155,114	)		(2,152,476	)		(2,307,590	)		(137,314	)		(2,148,848	)		(2,286,162	)
Proceeds from sales of fixed assets excluding equipment leased to others		70,755			1,065			71,820			63,955			1,482			65,437
Proceeds from sales of equipment leased to others		63,402			1,147,870			1,211,272			60,657			1,324,417			1,385,074
Purchases of marketable securities and security investments		(2,273,805	)		(779,111	)		(3,052,916	)		(1,737,107	)		(103,248	)		(1,840,355	)
Proceeds from sales of and maturity of marketable securities and security investments		1,762,189			761,349			2,523,538			2,255,635			443,163			2,698,798
Payment for additional investments in affiliated companies, net of cash acquired		(576	)		—			(576	)		5,010			—			5,010
Changes in investments and other assets, and other		260,015			(106,597	)		197,681			(268,946	)		(4,130	)		(246,811	)
Net cash used in investing activities		(1,549,922	)		(2,177,982	)		(3,660,092	)		(1,194,074	)		(1,578,244	)		(2,697,241	)
Cash flows from financing activities
Proceeds from issuance of long-term debt		212,387			4,666,579			4,793,939			286,085			4,747,506			5,000,921
Payments of long-term debt		(170,072	)		(4,314,294	)		(4,452,338	)		(142,556	)		(4,336,250	)		(4,442,232	)
Increase (decrease) in short-term borrowings		(122,222	)		461,052			347,738			49,161			144,277			164,282
Dividends paid to Toyota Motor Corporation class shareholders		(6,194	)		—			(6,194	)		(8,690	)		—			(8,690	)
Dividends paid to Toyota Motor Corporation common shareholders		(620,698	)		—			(620,698	)		(636,116	)		—			(636,116	)
Dividends paid to noncontrolling interests		(63,764	)		—			(63,764	)		(69,367	)		—			(69,367	)
Reissuance (repurchase) of treasury stock		(447,818	)		—			(447,818	)		(549,637	)		—			(549,637	)
Net cash provided by (used in) financing activities		(1,218,381	)		813,337			(449,135	)		(1,071,120	)		555,533			(540,839	)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents		(16,124	)		(27,464	)		(43,588	)		(42,454	)		813			(41,641	)
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents		133,460			(63,147	)		70,313			399,688			87,188			486,876
Cash and cash equivalents and restricted cash and cash equivalents at beginning of year		2,257,064			892,262			3,149,326			2,390,524			829,115			3,219,639
Cash and cash equivalents and restricted cash and cash equivalents at end of year		2,390,524			829,115			3,219,639			2,790,212			916,303			3,706,515

	Yen in millions
	For the year ended March 31, 2020
	Non-Financial Services Businesses			Financial Services Business			Consolidated
Cash flows from operating activities
Net income		1,921,378			220,919			2,142,329
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		861,673			743,710			1,605,383
Provision (reversal) for doubtful accounts and credit losses		5,689			137,293			142,982
Pension and severance costs, less payments		14,880			819			15,699
Losses on disposal of fixed assets		54,549			2,364			56,913
Unrealized losses (gains) on securities		21,069			(987	)		20,082
Deferred income taxes		193,438			(1,305	)		192,147
Equity in earnings of affiliated companies		(260,149	)		(11,003	)		(271,152	)
Changes in operating assets and liabilities, and other		(305,705	)		(46,610	)		(313,740	)
Net cash provided by operating activities		2,506,822			1,045,200			3,590,643
Cash flows from investing activities
Additions to finance receivables		—			(26,668,185	)		(16,896,588	)
Collection of and proceeds from sales of finance receivables		—			25,557,953			15,667,462
Additions to fixed assets excluding equipment leased to others		(1,377,238	)		(30,594	)		(1,407,832	)
Additions to equipment leased to others		(155,601	)		(2,031,698	)		(2,187,299	)
Proceeds from sales of fixed assets excluding equipment leased to others		47,488			1,263			48,751
Proceeds from sales of equipment leased to others		49,913			1,341,302			1,391,215
Purchases of marketable securities and security investments		(2,236,585	)		(176,502	)		(2,413,087	)
Proceeds from sales of and maturity of marketable securities and security investments		2,245,119			125,287			2,370,406
Payment for additional investments in affiliated companies, net of cash acquired		—			(14,763	)		(14,763	)
Changes in investments and other assets, and other		(18,895	)		(20,037	)		290,874
Net cash used in investing activities		(1,445,799	)		(1,915,974	)		(3,150,861	)
Cash flows from financing activities
Proceeds from issuance of long-term debt		235,080			5,466,618			5,691,499
Payments of long-term debt		(130,695	)		(4,335,145	)		(4,424,923	)
Increase (decrease) in short-term borrowings		51,406			520,468			291,623
Dividends paid to Toyota Motor Corporation class shareholders		(11,186	)		—			(11,186	)
Dividends paid to Toyota Motor Corporation common shareholders		(618,801	)		—			(618,801	)
Dividends paid to noncontrolling interests		(54,945	)		—			(54,945	)
Reissuance (repurchase) of treasury stock		(476,129	)		—			(476,129	)
Net cash provided by (used in) financing activities		(1,005,270	)		1,651,941			397,138
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents		(71,467	)		(59,778	)		(131,245	)
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents		(15,714	)		721,389			705,675
Cash and cash equivalents and restricted cash and cash equivalents at beginning of year		2,790,212			916,303			3,706,515
Cash and cash equivalents and restricted cash and cash equivalents at end of year		2,774,498			1,637,692			4,412,190

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Accumulated other comprehensive income

12 Months Ended

Mar. 31, 2020

Accumulated other comprehensive income

18. Accumulated other comprehensive income:

Changes in accumulated other comprehensive income (loss) are as follows:

	Yen in millions
	Foreign currency translation adjustments			Unrealized gains (losses) on securities			Pension liability adjustments			Accumulated other comprehensive income (loss)
Balance at March 31, 2017		(560,108	)		1,426,003			(224,973	)		640,922
Other comprehensive income (loss) before reclassifications, net of taxes of ¥(3,624) million, ¥38,539 million, ¥(7,568) million and ¥27,347 million		(113,942	)		(72,501	)		15,814			(170,629	)
Reclassifications, net of taxes of ¥— million, ¥9,729 million, ¥(2,500) million and ¥7,229 million		(6,664	)		(22,058	)		6,501			(22,221	)
Other comprehensive income (loss), net of tax		(120,606	)		(94,559	)		22,315			(192,850	)
Less - Other comprehensive income attributable to noncontrolling interests		1,629			(2,022	)		(580	)		(973	)
Equity transaction with noncontrolling interests and other		—			162			(11,562	)		(11,400	)
Balance at March 31, 2018		(679,085	)		1,329,584			(214,800	)		435,699
Effect of change in accounting policy		105			(1,309,725	)		—			(1,309,620	)
Other comprehensive income (loss) before reclassifications, net of taxes of ¥8,703 million, ¥3,382 million, ¥25,795 million and ¥37,880 million		25,639			(6,139	)		(62,288	)		(42,788	)
Reclassifications, net of taxes of ¥— million, ¥6,963 million, ¥(2,892) million and ¥4,071 million		1,377			(15,026	)		7,452			(6,197	)
Other comprehensive income (loss), net of tax		27,016			(21,165	)		(54,836	)		(48,985	)
Less - Other comprehensive income attributable to noncontrolling interests		2,432			54			3,770			6,256
Balance at March 31, 2019		(649,532	)		(1,252	)		(265,866	)		(916,650	)
Other comprehensive income (loss) before reclassifications, net of taxes of ¥1,865 million, ¥(50,969) million, ¥26,259 million and ¥(22,845) million		(333,854	)		113,978			(66,203	)		(286,079	)
Reclassifications, net of taxes of ¥— million, ¥(1,960) million, ¥(2,400) million and ¥(4,360) million		—			4,385			6,007			10,392
Other comprehensive income (loss), net of tax		(333,854	)		118,363			(60,196	)		(275,687	)
Less - Other comprehensive income attributable to noncontrolling interests		20,668			40			(440	)		20,268
Equity transaction with noncontrolling interests and other		3,432			(124	)		2,488			5,796
Balance at March 31, 2020		(959,286	)		117,027			(324,014	)		(1,166,273	)

Reclassifications for the years ended March 31, 2018, 2019 and 2020 consist of the following:

	Yen in millions
	For the years ended March 31,									Affected line items in the consolidated statements of income
	2018			2019			2020
Foreign currency translation adjustments:
		(6,664	)		1,377			—		Other income (loss), net
		(6,664	)		1,377			—		Income before income taxes and equity in earnings of affiliated companies
		(6,664	)		1,377			—		Net income
Unrealized gains (losses) on securities:
		(4,567	)		1,243			(93	)	Financing operations
		(25,247	)		(22,374	)		8,823		Foreign exchange gain (loss), net
		(1,993	)		(827	)		(2,484	)	Other income (loss), net
		(31,807	)		(21,958	)		6,246		Income before income taxes and equity in earnings of affiliated companies
		9,729			6,963			(1,960	)	Provision for income taxes
		20			(31	)		99		Equity in earnings of affiliated companies
		(22,058	)		(15,026	)		4,385		Net income
Pension liability adjustments:
Recognized net actuarial loss		12,914			14,029			12,611		*1
Amortization of prior service costs		(3,913	)		(3,685	)		(4,204	)	*1
		9,001			10,344			8,407		Income before income taxes and equity in earnings of affiliated companies
		(2,500	)		(2,892	)		(2,400	)	Provision for income taxes
		6,501			7,452			6,007		Net income
Total reclassifications, net of tax		(22,221	)		(6,197	)		10,392

Amounts of reclassifications in parentheses indicate gains in the consolidated statements of income.

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Other payables

12 Months Ended

Mar. 31, 2020

Other payables

14. Other payables:

Other payables are mainly related to purchases of property, plant and equipment and non-manufacturing purchases.

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Stock-based compensation (Summary of Toyota's Stock Option Activity) (Detail) - JPY (¥) ¥ / shares in Units, ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2017
Number of shares
Options outstanding, beginning balance	0	283,600	1,192,300
Granted	0	0	0
Exercised	0	(155,100)	(643,800)
Canceled	0	(128,500)	(264,900)
Options outstanding, ending balance	0	0	283,600	1,192,300
Options exercisable at year end	0	0	283,600
Weighted-average exercise price
Options outstanding, beginning balance	¥ 0	¥ 3,153	¥ 3,682
Granted	0	0	0
Exercised	0	3,156	3,726
Canceled	0	3,153	4,154
Options outstanding, ending balance	0	0	3,153	¥ 3,682
Options exercisable at year end	¥ 0	¥ 0	¥ 3,153
Weighted-average remaining contractual life in years
Options outstanding, Weighted- average remaining contractual term	0 years	0 years	3 months 29 days	9 months 18 days
Options exercisable at year end		0 years	3 months 29 days
Aggregate intrinsic value
Option outstanding aggregate intrinsic value at year end	¥ 0	¥ 0	¥ 1,041	¥ 2,813
Options exercisable at year end	¥ 0	¥ 0	¥ 1,041

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Employee benefit plans - Additional Information (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2019
Japan
Pension and Other Postretirement Benefits Disclosure [Line Items]
Accumulated benefit obligation for all defined benefit pension plans		¥ 1,993,624	¥ 2,040,344
Japan | Equity securities
Pension and Other Postretirement Benefits Disclosure [Line Items]
Percentage of plan assets invested		40.00%
Japan | Equity securities | Common stocks
Pension and Other Postretirement Benefits Disclosure [Line Items]
Plan asset allocation		75.00%	73.00%
Japan | Debt securities
Pension and Other Postretirement Benefits Disclosure [Line Items]
Percentage of plan assets invested		30.00%
Japan | Debt securities | Government bonds
Pension and Other Postretirement Benefits Disclosure [Line Items]
Plan asset allocation		37.00%	33.00%
Japan | Scenario Forecast
Pension and Other Postretirement Benefits Disclosure [Line Items]
Estimated prior service costs	¥ (3,400)
Estimated net actuarial loss	13,300
Expected contribution to pension plans	38,667
Foreign Plans
Pension and Other Postretirement Benefits Disclosure [Line Items]
Accumulated benefit obligation for all defined benefit pension plans		¥ 1,134,977	¥ 1,120,453
Foreign Plans | Equity securities
Pension and Other Postretirement Benefits Disclosure [Line Items]
Percentage of plan assets invested		40.00%
Foreign Plans | Equity securities | Common stocks
Pension and Other Postretirement Benefits Disclosure [Line Items]
Plan asset allocation		25.00%	27.00%
Foreign Plans | Debt securities
Pension and Other Postretirement Benefits Disclosure [Line Items]
Percentage of plan assets invested		50.00%
Foreign Plans | Debt securities | Government bonds
Pension and Other Postretirement Benefits Disclosure [Line Items]
Plan asset allocation		63.00%	67.00%
Foreign Plans | Scenario Forecast
Pension and Other Postretirement Benefits Disclosure [Line Items]
Estimated prior service costs	100
Estimated net actuarial loss	6,000
Expected contribution to pension plans	¥ 17,749

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Segment data (Revenues that are Attributed to Countries Based on Location of Customers, Excluding Customers in Japan (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
North America
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	¥ 10,543,638	¥ 10,675,298	¥ 10,403,647
Europe
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	2,937,216	2,873,737	2,730,915
Asia
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	5,263,943	5,355,991	4,793,110
Other Countries
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	¥ 3,936,572	¥ 3,944,854	¥ 4,186,666

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Other commitments and contingencies, concentrations and factors that may affect future operations - Additional Information (Detail) ¥ in Millions	12 Months Ended
	Mar. 31, 2020 JPY (¥)
Commitments and Contingencies Disclosure [Line Items]
Guarantee contracts obligations, maximum potential amount of future payments	¥ 3,333,385
Guarantee contracts obligations, liabilities	10,615
Purchase Commitment
Commitments and Contingencies Disclosure [Line Items]
Commitments outstanding for purchase of property, plant and equipment, service and other assets	¥ 362,071
Minimum
Commitments and Contingencies Disclosure [Line Items]
Payment guarantee period	1 month
Maximum
Commitments and Contingencies Disclosure [Line Items]
Payment guarantee period	8 years

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Lease commitments (Minimum Rental Payments Required Under Operating Leases Relating to Land, Buildings and Equipment) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Schedule of Operating Leases [Line Items]
2020	¥ 41,618	¥ 16,078
2021	33,648	13,396
2022	26,890	11,862
2023	22,640	10,219
2024	20,437	8,034
Thereafter	165,454	32,598
Total minimum lease payments	¥ 310,687	¥ 92,187

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Finance receivables (Schedule of Finance Receivables) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2017
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables	¥ 17,966,060	¥ 17,894,598
Deferred origination costs	221,200	204,304
Unearned income	(919,053)	(986,928)
Allowance for credit losses	(230,178)	(183,085)
Total finance receivables, net	17,038,029	16,928,889
Less - Current portion	(6,614,171)	(6,647,771)
Noncurrent finance receivables, net	10,423,858	10,281,118
Retail Receivables Portfolio Segment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables	12,795,076	12,768,305
Allowance for credit losses	(151,490)	(117,594)	¥ (103,457)	¥ (104,354)
Finance Lease Receivables Portfolio Segment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables	1,691,371	1,636,536
Allowance for credit losses	(30,899)	(26,483)	(28,817)	(23,962)
Wholesale and Other Dealer Loan Receivables Portfolio Segment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables	3,479,613	3,489,757
Allowance for credit losses	¥ (47,789)	¥ (39,008)	¥ (36,800)	¥ (30,896)

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Fair value measurements - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Level 3
Fair Value Measurements [Line Items]
Finance receivables, fair value	¥ 50,850	¥ 58,611
Level 3 | Financing receivable
Fair Value Measurements [Line Items]
Fair value, assets measured on nonrecurring basis, gain (loss)	¥ 3,761	¥ (3,305)
Japanese bonds | Available-for-sale Securities | Public and Corporate Bonds
Fair Value Measurements [Line Items]
Percentage of Assets	20.00%	17.00%
U.S., European and other bonds | Available-for-sale Securities | Public and Corporate Bonds
Fair Value Measurements [Line Items]
Percentage of Assets	80.00%	83.00%
Japan | Available-for-sale Securities | Common stocks
Fair Value Measurements [Line Items]
Percentage of Assets	90.00%	91.00%
Maximum
Fair Value Measurements [Line Items]
Cash equivalents maturity period	3 months
Maximum | Level 2 | Cash Equivalents
Fair Value Measurements [Line Items]
Negotiable certificate of deposit original maturities	3 months
Maximum | Level 2 | Time Deposit
Fair Value Measurements [Line Items]
Negotiable certificate of deposit original maturities	3 months

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Income taxes (Reconciliation of Differences Between Statutory Tax Rate and Effective Income Tax Rate) (Detail) - Japanese Tax Authority	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Reconciliation of Statutory Federal Tax Rate [Line Items]
Statutory tax rate	30.90%	30.90%	31.10%
Increase (reduction) in taxes resulting from:
Non-deductible expenses	0.40%	0.40%	0.40%
Deferred tax liabilities on undistributed earnings of foreign subsidiaries	1.00%	1.20%	1.10%
Deferred tax liabilities on undistributed earnings of affiliated companies accounted for by the equity method	1.70%	3.10%	3.80%
Valuation allowance	0.50%	0.20%	(2.00%)
Tax credits	(4.90%)	(5.30%)	(4.30%)
The difference between the statutory tax rate in Japan and that of foreign subsidiaries	(2.70%)	(2.30%)	(1.50%)
Unrecognized tax benefits adjustments	(0.40%)	(0.10%)	0.20%
Revision to reduce deferred tax assets and liabilities at the fiscal year-end due to changes in tax rates	0.00%	0.00%	0.00%
Effect of the Tax Cuts and Jobs Act of 2017 of the United States	0	0	(9.5)
Other	0.30%	0.80%	(0.10%)
Effective income tax rate	26.80%	28.90%	19.20%

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Product warranties and recalls and other safety measures (Net Changes in Liabilities for Recalls and Other Safety Measures which are Comprised in Liabilities for Quality Assurances) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Product Liability Contingency [Line Items]
Liabilities for recalls and other safety measures at beginning of year	¥ 1,302,309	¥ 1,275,256	¥ 1,275,200
Payments made during year	(363,708)	(396,971)	(456,177)
Provision for recalls and other safety measures	169,134	428,613	454,391
Other	(3,024)	(4,589)	1,842
Liabilities for recalls and other safety measures at end of year	¥ 1,104,711	¥ 1,302,309	¥ 1,275,256

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Supplemental cash flow information - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Schedule of Cash Flow, Supplemental [Line Items]
Cash payments for income taxes	¥ 752,205	¥ 836,619	¥ 500,214
Interest payments	¥ 529,555	507,812	422,720
Finance lease obligations incurred		¥ 6,086	¥ 4,467

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Fair value measurements (Tables)

12 Months Ended

Mar. 31, 2020

Fair Values of Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes the fair values of the assets and liabilities measured at fair value on a recurring basis as of March 31, 2019 and 2020. Transfers between levels of the fair value are recognized at the end of their respective reporting periods:

	Yen in millions
	March 31, 2019
	Level 1		Level 2			Level 3		Total
Assets
Cash equivalents		249,193		594,200			—		843,393
Time deposits		—		520,000			—		520,000
Marketable securities and other securities investments
Public and corporate bonds		4,378,543		1,452,475			15,171		5,846,189
Common stocks		2,154,951		—			—		2,154,951
Other		189,389		6,007			—		195,396
Investments measured at net asset value		—		—			—		98,451
Derivative financial instruments		—		200,256			77		200,333
Total		6,972,076		2,772,938			15,248		9,858,713
Liabilities
Derivative financial instruments		—		(231,915	)		—		(231,915	)
Total		—		(231,915	)		—		(231,915	)

	Yen in millions
	March 31, 2020
	Level 1		Level 2			Level 3		Total
Assets
Cash equivalents		711,106		592,200			—		1,303,306
Time deposits		—		350,000			—		350,000
Marketable securities and other securities investments
Public and corporate bonds		3,214,773		2,183,695			12,831		5,411,299
Common stocks		1,895,690		—			—		1,895,690
Other		194,085		27,477			—		221,562
Investments measured at net asset value		—		—			—		97,687
Derivative financial instruments		—		503,826			—		503,826
Total		6,015,654		3,657,198			12,831		9,783,370
Liabilities
Derivative financial instruments		—		(437,008	)		—		(437,008	)
Total		—		(437,008	)		—		(437,008	)

Changes in Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes the changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the periods ended March 31, 2018, 2019 and 2020:

	Yen in millions
	For the year ended March 31, 2018
	Marketable securities and other securities investments			Derivative financial instruments			Total
Balance at beginning of year		8,947			(7,522	)		1,425
Total gains (losses)
Included in income (loss)		17			805			822
Included in other comprehensive income (loss)		(12	)		—			(12	)
Purchases and issuances		3,860			—			3,860
Settlements		(4,739	)		4,320			(419	)
Other		(585	)		185			(400	)
Balance at end of year		7,488			(2,212	)		5,276
	Yen in millions
	For the year ended March 31, 2019
	Marketable securities and other securities investments			Derivative financial instruments			Total
Balance at beginning of year		7,488			(2,212	)		5,276
Total gains (losses)
Included in income (loss)		1			3,169			3,170
Included in other comprehensive income (loss)		82			—			82
Purchases and issuances		5,254			—			5,254
Settlements		(2,875	)		(784	)		(3,659	)
Other		337			(96	)		241
Balance at end of year		10,287			77			10,364
	Yen in millions
	For the year ended March 31, 2020
	Marketable securities and other securities investments			Derivative financial instruments			Total
Balance at beginning of year		10,287			77			10,364
Total gains (losses)
Included in income (loss)		(346	)		—			(346	)
Included in other comprehensive income (loss)		(671	)		—			(671	)
Purchases and issuances		5,305			—			5,305
Settlements		(1,547	)		(77	)		(1,624	)
Other		(197	)		—			(197	)
Balance at end of year		12,831			—			12,831

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Short-term borrowings and long-term debt (Long-term Debt) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Debt Instrument [Line Items]
Long-term debt	¥ 10,692,898	¥ 10,550,945
Long-term Debt and Capital Lease Obligations, Including Current Maturities, Total	15,266,943	14,805,205
Less - Current portion due within one year	(4,574,045)	(4,254,260)
Unsecured Debt | Bank Loan Obligations
Debt Instrument [Line Items]
Long-term debt	3,713,541	3,441,336
Secured Debt | Finance Receivables Securitization
Debt Instrument [Line Items]
Long-term debt	1,983,976	1,840,204
Medium-term Notes | Consolidated Subsidiaries
Debt Instrument [Line Items]
Long-term debt	7,442,590	7,372,550
Unsecured Notes | Consolidated Subsidiaries
Debt Instrument [Line Items]
Long-term debt	1,412,368	1,566,994
Unsecured Notes | Parent Company
Debt Instrument [Line Items]
Long-term debt	650,905	511,980
Secured Notes | Consolidated Subsidiaries
Debt Instrument [Line Items]
Long-term debt	34,626	53,120
Long-term Finance Lease Obligations
Debt Instrument [Line Items]
Long-term debt and finance lease obligations	¥ 28,937	¥ 19,021

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Finance receivables (Tables)

12 Months Ended

Mar. 31, 2020

Schedule of Finance Receivables

Finance receivables consist of the following:

	Yen in millions
	March 31,
	2019			2020
Retail		12,768,305			12,795,076
Finance leases		1,636,536			1,691,371
Wholesale and other dealer loans		3,489,757			3,479,613
		17,894,598			17,966,060
Deferred origination costs		204,304			221,200
Unearned income		(986,928	)		(919,053	)
Allowance for credit losses
Retail		(117,594	)		(151,490	)
Finance leases		(26,483	)		(30,899	)
Wholesale and other dealer loans		(39,008	)		(47,789	)
Total allowance for credit losses		(183,085	)		(230,178	)
Total finance receivables, net		16,928,889			17,038,029
Less - Current portion		(6,647,771	)		(6,614,171	)
Noncurrent finance receivables, net		10,281,118			10,423,858

Summary of Contractual Maturities

The contractual maturities of retail receivables, the future minimum lease payments on finance leases and the contractual maturities of wholesale and other dealer loans at March 31, 2020 are summarized as follows:

	Yen in millions
Years ending March 31,	Retail		Finance leases		Wholesale and other dealer loans
2021		4,027,784		446,901		2,476,011
2022		3,034,099		335,850		308,745
2023		2,476,975		247,378		197,597
2024		1,749,643		134,481		157,317
2025		964,212		48,912		107,152
Thereafter		542,363		8,801		232,791
		12,795,076		1,222,323		3,479,613

Summary of Finance Leases

Finance leases consist of the following:

	Yen in millions
	March 31,
	2019			2020
Minimum lease payments		1,158,242			1,222,323
Estimated unguaranteed residual values		478,294			469,048
		1,636,536			1,691,371
Deferred origination costs		11,929			12,349
Less - Unearned income		(143,838	)		(146,087	)
Less - Allowance for credit losses		(26,483	)		(30,898	)
Finance leases, net		1,478,144			1,526,735

Amount of Finance Receivables Segregated into Aging Categories Based on Number of Days Outstanding

The table below shows the amount of the finance receivables segregated into aging categories based on the number of days outstanding as of March 31, 2019 and 2020:

	Yen in millions
	March 31, 2019
	Retail		Finance leases		Wholesale		Real estate		Working capital
Current		12,554,265		1,625,893		1,806,305		873,427		808,755
30-59 days past due		141,111		4,972		191		—		—
60-89 days past due		35,090		1,396		100		—		—
90 days or greater past due		37,839		4,275		393		106		480
Total		12,768,305		1,636,536		1,806,989		873,533		809,235

	Yen in millions
	March 31, 2020
	Retail		Finance leases		Wholesale		Real estate		Working capital
Current		12,525,020		1,675,523		1,642,637		857,407		967,105
30-59 days past due		176,991		7,670		2,008		47		—
60-89 days past due		44,922		2,426		1,132		43		—
90 days or greater past due		48,143		5,752		9,011		196		27
Total		12,795,076		1,691,371		1,654,788		857,693		967,132

Recorded Investment for Credit Quality of Finance Receivable within Wholesale and Other Dealer Loan Receivables Portfolio Segment

The tables below show the recorded investment for credit quality of the finance receivable within the wholesale and other dealer loan receivables portfolio segment as of March 31, 2019 and 2020:

The wholesale and other dealer loan receivables portfolio segment is primarily segregated into credit qualities below based on internal risk assessments by dealers.

Performing: Account not classified as either Credit Watch, At Risk or Default

Credit Watch: Account designated for elevated attention

At Risk: Account where there is an increased likelihood that default may exist based on qualitative and quantitative factors

Default: Account is not currently meeting contractual obligations or we have temporarily waived certain contractual requirements

	Yen in millions
	March 31, 2019
	Wholesale		Real estate		Working capital		Total
Performing		1,566,475		743,379		789,948		3,099,802
Credit Watch		156,740		81,848		8,610		247,198
At Risk		58,550		45,564		10,189		114,303
Default		25,224		2,742		488		28,454
Total		1,806,989		873,533		809,235		3,489,757

	Yen in millions
	March 31, 2020
	Wholesale		Real estate		Working capital		Total
Performing		1,441,320		729,474		931,420		3,102,214
Credit Watch		133,892		82,322		22,293		238,507
At Risk		54,251		37,379		13,332		104,962
Default		25,325		8,518		87		33,930
Total		1,654,788		857,693		967,132		3,479,613

Impaired Finance Receivables

The tables below summarize information about impaired finance receivables:

	Yen in millions
	Recorded investment				Unpaid principal balance				Individually evaluated allowance
	March 31,				March 31,				March 31,
	2019		2020		2019		2020		2019		2020
Impaired account balances individually evaluated for impairment with an allowance:
Wholesale		18,187		11,687		18,187		11,687		3,141		2,005
Real estate		10,545		7,948		10,545		7,948		1,280		1,003
Working capital		7,451		10,040		7,451		10,040		6,670		4,163
Total		36,183		29,675		36,183		29,675		11,091		7,171
Impaired account balances individually evaluated for impairment without an allowance:
Wholesale		14,429		10,121		14,429		10,121
Real estate		16,870		16,157		16,870		16,157
Working capital		2,220		2,068		2,220		2,068
Total		33,519		28,346		33,519		28,346
Impaired account balances aggregated and evaluated for impairment:
Retail		29,537		30,753		28,788		30,109
Finance leases		99		103		75		42
Total		29,636		30,856		28,863		30,151
Total impaired account balances:
Retail		29,537		30,753		28,788		30,109
Finance leases		99		103		75		42
Wholesale		32,616		21,808		32,616		21,808
Real estate		27,415		24,105		27,415		24,105
Working capital		9,671		12,108		9,671		12,108
Total		99,338		88,877		98,565		88,172

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Affiliated companies and variable interest entities (Tables)

12 Months Ended

Mar. 31, 2020

Summary of Financial Information for Affiliated Companies Accounted for by Equity Method

Summarized financial information for affiliated companies accounted for by the equity method is shown below:

	Yen in millions
	March 31,
	2019		2020
Current assets		13,555,478		16,551,569
Noncurrent assets		12,464,250		14,869,913
Total assets		26,019,728		31,421,482
Current liabilities		8,322,336		9,819,357
Long-term liabilities and noncontrolling interests		6,398,659		9,421,112
Affiliated companies accounted for by the equity method shareholders’ equity		11,298,733		12,181,013
Total liabilities and shareholders’ equity		26,019,728		31,421,482
Toyota’s share of affiliated companies accounted for by the equity method shareholders’ equity		3,313,703		4,090,790
Number of affiliated companies accounted for by the equity method at end of period		63		72

	Yen in millions
	For the years ended March 31,
	2018		2019		2020
Net revenues		30,680,535		32,200,711		35,340,807
Gross profit		4,065,344		4,070,621		4,315,967
Net income attributable to affiliated companies accounted for by the equity method		1,344,687		857,832		841,938
Equity in earnings of affiliated companies attributable to Toyota Motor Corporation		470,083		360,066		271,152

Entities Comprising Significant Portion of Toyota's Investment in Affiliated Companies and Percentage of Ownership

Entities comprising a significant portion of Toyota’s investment in affiliated companies and percentage of ownership are presented below:

	Percentage of ownership
	March 31,
Name of affiliated companies	2019			2020
Denso Corporation		24.5	%		24.5	%
Subaru Corporation		—			20.0	%
Toyota Industries Corporation		24.9	%		24.9	%
Aisin Seiki Co., Ltd.		24.9	%		24.9	%
Toyota Tsusho Corporation		22.0	%		22.0	%

Account Balances and Transactions with Affiliated Companies

Account balances and transactions with affiliated companies are presented below:

	Yen in millions
	March 31,
	2019		2020
Trade accounts and notes receivable, and other receivables		362,831		357,849
Accounts payable and other payables		845,755		780,935

	Yen in millions
	For the years ended March 31,
	2018		2019		2020
Net revenues		2,004,632		2,213,236		2,423,338
Purchases		5,749,430		6,431,464		6,781,279

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Allowance for doubtful accounts and credit losses (Allowance for Doubtful Accounts Relating to Trade Accounts and Notes Receivable) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for doubtful accounts at beginning of year	¥ 90,373	¥ 98,590	¥ 100,712
Provision for doubtful accounts, net of reversal	5,689	(1,375)	(74)
Write-offs	(2,691)	(2,472)	(2,374)
Other	(3,019)	(4,370)	326
Allowance for doubtful accounts at end of year	¥ 90,352	¥ 90,373	¥ 98,590

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Fair value measurements (Fair Values of Assets and Liabilities Measured at Fair Value on Recurring Basis) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Assets
Derivative financial instruments	¥ 503,826	¥ 200,333
Liabilities
Derivative financial instruments	(437,008)	(231,915)
Fair Value, Measurements, Recurring
Assets
Cash equivalents	1,303,306	843,393
Time deposits	350,000	520,000
Derivative financial instruments	503,826	200,333
Total	9,783,370	9,858,713
Liabilities
Derivative financial instruments	(437,008)	(231,915)
Total	(437,008)	(231,915)
Fair Value, Measurements, Recurring | Public and Corporate Bonds
Assets
Marketable securities and other securities investments	5,411,299	5,846,189
Fair Value, Measurements, Recurring | Common stocks
Assets
Marketable securities and other securities investments	1,895,690	2,154,951
Fair Value, Measurements, Recurring | Other Investments
Assets
Marketable securities and other securities investments	221,562	195,396
Fair Value, Measurements, Recurring | Investments
Assets
Marketable securities and other securities investments	97,687	98,451
Level 1 | Fair Value, Measurements, Recurring
Assets
Cash equivalents	711,106	249,193
Total	6,015,654	6,972,076
Level 1 | Fair Value, Measurements, Recurring | Public and Corporate Bonds
Assets
Marketable securities and other securities investments	3,214,773	4,378,543
Level 1 | Fair Value, Measurements, Recurring | Common stocks
Assets
Marketable securities and other securities investments	1,895,690	2,154,951
Level 1 | Fair Value, Measurements, Recurring | Other Investments
Assets
Marketable securities and other securities investments	194,085	189,389
Level 2 | Fair Value, Measurements, Recurring
Assets
Cash equivalents	592,200	594,200
Time deposits	350,000	520,000
Derivative financial instruments	503,826	200,256
Total	3,657,198	2,772,938
Liabilities
Derivative financial instruments	(437,008)	(231,915)
Total	(437,008)	(231,915)
Level 2 | Fair Value, Measurements, Recurring | Public and Corporate Bonds
Assets
Marketable securities and other securities investments	2,183,695	1,452,475
Level 2 | Fair Value, Measurements, Recurring | Other Investments
Assets
Marketable securities and other securities investments	27,477	6,007
Level 3 | Fair Value, Measurements, Recurring
Assets
Derivative financial instruments		77
Total	12,831	15,248
Liabilities
Derivative financial instruments	0
Total	0
Level 3 | Fair Value, Measurements, Recurring | Public and Corporate Bonds
Assets
Marketable securities and other securities investments	¥ 12,831	¥ 15,171

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Prepaid expenses and Other current assets
Restricted cash and cash equivalents	¥ 221,672	¥ 131,811

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Finance receivables - Additional Information (Detail) - Geographic Concentration Ratio - Finance receivables	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
North America
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration Risk Percentage	55.80%	55.20%
Europe
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration Risk Percentage	12.60%	12.30%
Japan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration Risk Percentage	8.80%	8.20%
Asia
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration Risk Percentage	13.00%	13.00%
Other Countries
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration Risk Percentage	9.80%	11.30%

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Finance receivables (Credit Quality of Finance Receivable within Wholesale and Other Dealer Loan Receivables Portfolio Segment) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	¥ 17,966,060	¥ 17,894,598
Wholesale and Other Dealer Loan Receivables Portfolio Segment
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	3,479,613	3,489,757
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Performing
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	3,102,214	3,099,802
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Credit Watch
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	238,507	247,198
Wholesale and Other Dealer Loan Receivables Portfolio Segment | At Risk
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	104,962	114,303
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Default
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	33,930	28,454
Wholesale | Wholesale and Other Dealer Loan Receivables Portfolio Segment
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	1,654,788	1,806,989
Wholesale | Wholesale and Other Dealer Loan Receivables Portfolio Segment | Performing
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	1,441,320	1,566,475
Wholesale | Wholesale and Other Dealer Loan Receivables Portfolio Segment | Credit Watch
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	133,892	156,740
Wholesale | Wholesale and Other Dealer Loan Receivables Portfolio Segment | At Risk
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	54,251	58,550
Wholesale | Wholesale and Other Dealer Loan Receivables Portfolio Segment | Default
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	25,325	25,224
Real estate | Wholesale and Other Dealer Loan Receivables Portfolio Segment
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	857,693	873,533
Real estate | Wholesale and Other Dealer Loan Receivables Portfolio Segment | Performing
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	729,474	743,379
Real estate | Wholesale and Other Dealer Loan Receivables Portfolio Segment | Credit Watch
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	82,322	81,848
Real estate | Wholesale and Other Dealer Loan Receivables Portfolio Segment | At Risk
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	37,379	45,564
Real estate | Wholesale and Other Dealer Loan Receivables Portfolio Segment | Default
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	8,518	2,742
Working capital | Wholesale and Other Dealer Loan Receivables Portfolio Segment
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	967,132	809,235
Working capital | Wholesale and Other Dealer Loan Receivables Portfolio Segment | Performing
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	931,420	789,948
Working capital | Wholesale and Other Dealer Loan Receivables Portfolio Segment | Credit Watch
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	22,293	8,610
Working capital | Wholesale and Other Dealer Loan Receivables Portfolio Segment | At Risk
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	13,332	10,189
Working capital | Wholesale and Other Dealer Loan Receivables Portfolio Segment | Default
Financing Receivable, Recorded Investment [Line Items]
Finance Receivable	¥ 87	¥ 488

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Affiliated companies and variable interest entities (Summary of Financial Information for Affiliated Companies Accounted for by Equity Method) (Detail) ¥ in Millions	12 Months Ended
	Mar. 31, 2020 JPY (¥) Entity	Mar. 31, 2019 JPY (¥) Entity	Mar. 31, 2018 JPY (¥)
Schedule of Equity Method Investments [Line Items]
Current assets	¥ 16,551,569	¥ 13,555,478
Noncurrent assets	14,869,913	12,464,250
Total assets	31,421,482	26,019,728
Current liabilities	9,819,357	8,322,336
Long-term liabilities and noncontrolling interests	9,421,112	6,398,659
Affiliated companies accounted for by the equity method shareholders' equity	12,181,013	11,298,733
Total liabilities and shareholders' equity	31,421,482	26,019,728
Toyota's share of affiliated companies accounted for by the equity method shareholders' equity	¥ 4,090,790	¥ 3,313,703	¥ 3,162,711
Number of affiliated companies accounted for by the equity method at end of period | Entity	72	63
Net revenues	¥ 35,340,807	¥ 32,200,711	30,680,535
Gross profit	4,315,967	4,070,621	4,065,344
Net income attributable to affiliated companies accounted for by the equity method	841,938	857,832	1,344,687
Equity in earnings of affiliated companies attributable to Toyota Motor Corporation	¥ 271,152	¥ 360,066	¥ 470,083

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CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Net income attributable to common shareholders	¥ 2,058,899	¥ 1,868,085	¥ 2,481,692
Dividend and accretion to Model AA Class Shares	¥ 17,284	¥ 14,788	¥ 12,291

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Net revenues - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Disaggregation of Revenue [Line Items]
Revenue	¥ 29,929,992	¥ 30,225,681
Contract with customer liability reclassified to revenue	366,655	336,206
Revenue remaining performance obligation	589,844
Insurance Revenues
Disaggregation of Revenue [Line Items]
Revenue remaining performance obligation	223,754
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | Insurance Revenues
Disaggregation of Revenue [Line Items]
Revenue remaining performance obligation	¥ 65,168
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | Insurance Revenues | Minimum
Disaggregation of Revenue [Line Items]
Revenue remaining performance obligation, period of recognition	3 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | Insurance Revenues | Maximum
Disaggregation of Revenue [Line Items]
Revenue remaining performance obligation, period of recognition	120 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | Insurance Revenues
Disaggregation of Revenue [Line Items]
Revenue remaining performance obligation	¥ 158,586
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | Maintenance Revenue | Minimum
Disaggregation of Revenue [Line Items]
Revenue remaining performance obligation, period of recognition	18 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | Maintenance Revenue | Maximum
Disaggregation of Revenue [Line Items]
Revenue remaining performance obligation, period of recognition	84 months
Accounting Standards Update 2014-09
Disaggregation of Revenue [Line Items]
Revenue	¥ 85,192	¥ 84,230

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Segment data (Statements of Income - Non-financial Services and Financial Services Businesses) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Net revenues	¥ 29,929,992	¥ 30,225,681	¥ 29,379,510
Costs and expenses
Selling, general and administrative	2,964,759	2,976,351	3,090,495
Total costs and expenses	27,487,123	27,758,136	26,979,648
Operating income	2,442,869	2,467,545	2,399,862
Other income (expense), net	111,738	(182,080)	220,567
Income before income taxes and equity in earnings of affiliated companies	2,554,607	2,285,465	2,620,429
Provision for income taxes	683,430	659,944	504,406
Equity in earnings of affiliated companies	271,152	360,066	470,083
Net income	2,142,329	1,985,587	2,586,106
Less - Net income attributable to noncontrolling interests	(66,146)	(102,714)	(92,123)
Net income attributable to Toyota Motor Corporation	2,076,183	1,882,873	2,493,983
Eliminations
Costs and expenses
Net income attributable to Toyota Motor Corporation	32	23	(2)
Non Financial Services Businesses
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Net revenues	27,775,932	28,133,676	27,448,165
Costs and expenses
Cost of revenues	23,143,209	23,400,550	22,613,450
Selling, general and administrative	2,483,501	2,591,249	2,721,362
Total costs and expenses	25,626,710	25,991,799	25,334,812
Operating income	2,149,222	2,141,877	2,113,353
Other income (expense), net	130,259	(161,608)	222,326
Income before income taxes and equity in earnings of affiliated companies	2,279,481	1,980,269	2,335,679
Provision for income taxes	618,252	580,031	738,763
Equity in earnings of affiliated companies	260,149	357,527	467,718
Net income	1,921,378	1,757,765	2,064,634
Less - Net income attributable to noncontrolling interests	(67,559)	(97,500)	(89,533)
Net income attributable to Toyota Motor Corporation	1,853,819	1,660,265	1,975,101
Financial Services Business
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Net revenues	2,190,559	2,153,547	2,017,008
Costs and expenses
Cost of revenues	1,395,211	1,418,636	1,320,348
Selling, general and administrative	503,165	412,090	411,114
Total costs and expenses	1,898,376	1,830,726	1,731,462
Operating income	292,183	322,821	285,546
Other income (expense), net	(17,103)	(17,658)	(794)
Income before income taxes and equity in earnings of affiliated companies	275,080	305,163	284,752
Provision for income taxes	65,164	79,903	(234,356)
Equity in earnings of affiliated companies	11,003	2,539	2,365
Net income	220,919	227,799	521,473
Less - Net income attributable to noncontrolling interests	1,413	(5,214)	(2,589)
Net income attributable to Toyota Motor Corporation	¥ 222,332	¥ 222,585	¥ 518,884

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Short-term borrowings and long-term debt (Short-term Borrowings) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Short-term Debt [Line Items]
Loans, principally from banks, with a weighted-average interest at March 31, 2019 and March 31, 2020 of 2.11% and of 2.03% per annum, respectively	¥ 1,179,230	¥ 1,468,430
Commercial paper with a weighted-average interest at March 31, 2019 and March 31, 2020 of 2.28% and of 1.50% per annum, respectively	4,106,796	3,876,544
Short-term borrowings	¥ 5,286,026	¥ 5,344,973

XML

Vehicles and equipment on operating leases - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Leases Disclosure [Line Items]
Rental income from vehicles and equipment on operating leases	¥ 945,091	¥ 959,497	¥ 927,443

XML

Cover Page	12 Months Ended
	Mar. 31, 2020 shares
Document Type	20-F
Amendment Flag	false
Document Period End Date	Mar. 31, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Entity Registrant Name	TOYOTA MOTOR CORP/
Entity Central Index Key	0001094517
Current Fiscal Year End Date	--03-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	2,766,152,532
Entity Voluntary Filers	No
Entity Shell Company	false
Entity Emerging Growth Company	false
Document Registration Statement	false
Document Annual Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes
Document Shell Company Report	false
Entity File Number	001-14948
Entity Incorporation, State or Country Code	M0
Entity Address, Address Line One	1 Toyota-cho
Entity Address, City or Town	Toyota City
Entity Address, Country	JP
Entity Address, Postal Zip Code	471-8571
Document Accounting Standard	U.S. GAAP
American Depositary Shares [Member]
Trading Symbol	TM
Title of 12(b) Security	American Depositary Shares
Security Exchange Name	NYSE
Common Stock [Member]
Title of 12(b) Security	Common Stock
Security Exchange Name	NONE
No Trading Symbol Flag	true
Business Contact [Member]
Entity Address, Address Line One	Toyota-cho
Entity Address, City or Town	Toyota City
Entity Address, Country	JP
Entity Address, Postal Zip Code	471-8571
Contact Personnel Name	Nobukazu Takano
City Area Code	565
Local Phone Number	28-2121

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Lease commitments (Tables)

12 Months Ended

Mar. 31, 2020

Analysis of Leased Assets Under Capital Leases

An analysis of leased assets under finance leases is as follows:

	Yen in millions
	March 31,
	2019			2020
Class of property
Building		18,519			22,790
Machinery and equipment		28,836			62,337
Less - Accumulated depreciation		(30,016	)		(25,036	)
		17,339			60,091

Minimum Rental Payments Required Under Operating Leases Relating to Land, Buildings and Equipment

The minimum rental payments required under operating leases relating primarily to land, buildings and equipment having initial or remaining non-cancelable lease terms in excess of one year at March 31, 2019 are as follows:

Years ending March 31,	Yen in millions
2020		16,078
2021		13,396
2022		11,862
2023		10,219
2024		8,034
Thereafter		32,598
Total minimum future rentals		92,187

Summary of lease cost

An analysis of lease payment is as follows:

	Yen in millions
	March 31, 2020
Lease payment
Finance lease expense
Amortization of right-of-use asset		14,676
Interest on lease liabilities		805
Operating lease expense		80,343
Short term lease expense		44,440
		140,264

Summary of Other supplementary information

Other supplementary information is as follows:

	Yen in millions
	March 31, 2020
Other supplementary information
Cash paid for amounts included in the measurement of finance lease liabilities
Cash flow from operating activities		805
Cash flow from financing activities		5,860
Cash paid for amounts included in the measurement of operating lease liabilities
Cash flow from operating activities		80,101
Right of use assets obtained in exchange for lease liabilities
Finance lease		47,082
Operating lease		105,913
Weighted average remaining lease term (years)
Finance lease		5.6
Operating lease		8.4
Weighted average discount rate
Finance lease		4.23	%
Operating lease		2.13	%

Future Minimum Lease Payments Under Capital Leases Together with Present Value of Net Minimum Lease Payments

Future minimum lease payments under finance leases and operating leases together with the present value of the net minimum lease payments as of March 31, 2020 are as follows:

	Yen in millions
Years ending March 31,	Finance lease			Operating lease
2021		6,378			41,618
2022		4,320			33,648
2023		3,124			26,890
2024		2,842			22,640
2025		2,525			20,437
Thereafter		17,629			165,454
Total minimum lease payments		36,818			310,687
Less - Amount representing interest		(7,881	)		(29,732	)
Present value of net minimum lease payments		28,937			280,955
Current liability		5,460			39,136
Noncurrent liability		23,477			241,819
Total minimum lease present value		28,937			280,955

Future Minimum Lease Payments Under Finance And Operating Leases Together with Present Value of Net Minimum Lease Payments

Future minimum lease payments under finance leases and operating leases together with the present value of the net minimum lease payments as of March 31, 2020 are as follows:

	Yen in millions
Years ending March 31,	Finance lease			Operating lease
2021		6,378			41,618
2022		4,320			33,648
2023		3,124			26,890
2024		2,842			22,640
2025		2,525			20,437
Thereafter		17,629			165,454
Total minimum lease payments		36,818			310,687
Less - Amount representing interest		(7,881	)		(29,732	)
Present value of net minimum lease payments		28,937			280,955
Current liability		5,460			39,136
Noncurrent liability		23,477			241,819
Total minimum lease present value		28,937			280,955

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Stock-based compensation (Tables)

12 Months Ended

Mar. 31, 2020

Summary of Toyota's Stock Option Activity

The following table summarizes Toyota’s stock option activity:

				Yen				Yen in millions
	Number of shares			Weighted- average exercise price		Weighted- average remaining contractual life in years		Aggregate intrinsic value
Options outstanding at March 31, 2017		1,192,300			3,682		0.80		2,813
Granted		—			—
Exercised		(643,800	)		3,726
Canceled		(264,900	)		4,154
Options outstanding at March 31, 2018		283,600			3,153		0.33		1,041
Granted		—			—
Exercised		(155,100	)		3,156
Canceled		(128,500	)		3,153
Options outstanding at March 31, 2019		—			—		—		—
Granted		—			—
Exercised		—			—
Canceled		—			—
Options outstanding at March 31, 2020		—			—		—		—
Options exercisable at March 31, 2018		283,600			3,153		0.33		1,041
Options exercisable at March 31, 2019		—			—		—		—
Options exercisable at March 31, 2020		—			—		—		—

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Shareholders' equity (Additional Information Regarding Repurchase, Reissuance and Retirement of Treasury Stock) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Repurchase of Treasury Stock | To return capital to shareholders
Equity, Class of Treasury Stock [Line Items]
Reason for repurchasing treasury stock	For the years ended March 31, 2020, 2019 and 2018, The repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.
Number of common shares repurchased	69,532,900	77,622,700	73,708,400
Total purchase price for repurchase of shares	¥ 500,139	¥ 549,986	¥ 499,989
Reissuance of Treasury Stock | Business Cooperation With Mazda
Equity, Class of Treasury Stock [Line Items]
Number of common shares reissued	3,269,500
Amount of reissuance	¥ 24,181

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Class Shares (Additional Information Regarding Model AA Class Shares) (Detail) - JPY (¥) ¥ / shares in Units, ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Jul. 24, 2015
Class of Stock [Line Items]
Total number of shares issued	47,100,000	47,100,000
Unpaid dividends included in mezzanine equity	¥ 6,217	¥ 4,969
Model AA Class Shares
Class of Stock [Line Items]
Total number of shares issued			47,100,000
Issue price			¥ 10,598
Purchase price			¥ 10,121.09
Voting rights	Model AA Class Shares shall have voting rights. The number of shares constituting one unit with respect to Model AA Class Shares shall be 100.
Restrictions on transfer	Model AA Class Shares shall have restrictions on transfer.
Dividends	(1) If the record date falls in the fiscal year ending on March 31, 2016 : 0.5% of the issue price (2) If the record date falls in the fiscal year ending on March 31, 2017 through March 31, 2020 : the annual dividend rate for the previous fiscal year plus 0.5% of the issue price (3) If the record date falls in the fiscal year ending on March 31, 2021 or later : 2.5% of the issue price
Shareholder's right	(1) Shareholder's conversion right into Common Shares Shareholders of the Model AA Class Shares may demand TMC to acquire all or a part of their Model AA Class Shares in exchange for Common Shares on the first business day of April and October of every year, starting October 1, 2020. (2) Shareholder's cash put option Shareholders of the Model AA Class Shares may demand TMC to acquire all or a part of their Model AA Class Shares in exchange for cash on the last business day of March, June, September and December of each year, starting on September 1, 2020.
TMC's right	TMC may acquire, on or after April 2, 2021, all of the outstanding Model AA Class Shares in exchange for cash.

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Lease commitments

12 Months Ended

Mar. 31, 2020

Lease commitments

23. Lease commitments:

Toyota leases certain assets under finance lease and operating lease arrangements.

An analysis of leased assets under finance leases is as follows:

	Yen in millions
	March 31,
	2019			2020
Class of property
Building		18,519			22,790
Machinery and equipment		28,836			62,337
Less - Accumulated depreciation		(30,016	)		(25,036	)
		17,339			60,091

Amortization expenses under finance leases for the years ended March 31, 2018 and 2019 were ¥5,541 million and ¥7,879 million, respectively.

Rental expenses under operating leases for the year ended March 31, 2018 and 2019 were ¥112,934 million and ¥115,503 million, respectively.

The minimum rental payments required under operating leases relating primarily to land, buildings and equipment having initial or remaining non-cancelable lease terms in excess of one year at March 31, 2019 are as follows:

Years ending March 31,	Yen in millions
2020		16,078
2021		13,396
2022		11,862
2023		10,219
2024		8,034
Thereafter		32,598
Total minimum future rentals		92,187

An analysis of lease payment is as follows:

	Yen in millions
	March 31, 2020
Lease payment
Finance lease expense
Amortization of right-of-use asset		14,676
Interest on lease liabilities		805
Operating lease expense		80,343
Short term lease expense		44,440
		140,264

Other supplementary information is as follows:

	Yen in millions
	March 31, 2020
Other supplementary information
Cash paid for amounts included in the measurement of finance lease liabilities
Cash flow from operating activities		805
Cash flow from financing activities		5,860
Cash paid for amounts included in the measurement of operating lease liabilities
Cash flow from operating activities		80,101
Right of use assets obtained in exchange for lease liabilities
Finance lease		47,082
Operating lease		105,913
Weighted average remaining lease term (years)
Finance lease		5.6
Operating lease		8.4
Weighted average discount rate
Finance lease		4.23	%
Operating lease		2.13	%

Future minimum lease payments under finance leases and operating leases together with the present value of the net minimum lease payments as of March 31, 2020 are as follows:

	Yen in millions
Years ending March 31,	Finance lease			Operating lease
2021		6,378			41,618
2022		4,320			33,648
2023		3,124			26,890
2024		2,842			22,640
2025		2,525			20,437
Thereafter		17,629			165,454
Total minimum lease payments		36,818			310,687
Less - Amount representing interest		(7,881	)		(29,732	)
Present value of net minimum lease payments		28,937			280,955
Current liability		5,460			39,136
Noncurrent liability		23,477			241,819
Total minimum lease present value		28,937			280,955

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Per share amounts

12 Months Ended

Mar. 31, 2020

Per share amounts

27. Per share amounts:

Reconciliations of the differences between basic and diluted net income attributable to Toyota Motor Corporation per common share for the years ended March 31, 2018, 2019 and 2020 are as follows:

	Yen in millions			Thousands of shares		Yen
	Net income attributable to Toyota Motor Corporation			Weighted- average common shares		Net income attributable to Toyota Motor Corporation per common share
For the year ended March 31, 2018
Net income attributable to Toyota Motor Corporation		2,493,983
Accretion to Mezzanine equity		(4,849	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders		(7,442	)
Basic net income attributable to Toyota Motor Corporation per common share		2,481,692			2,947,365		842.00
Effect of dilutive securities
Model AA Class Shares		12,291			47,100
Assumed exercise of dilutive stock options		(4	)		301
Diluted net income attributable to Toyota Motor Corporation per common share		2,493,979			2,994,766		832.78
For the year ended March 31, 2019
Net income attributable to Toyota Motor Corporation		1,882,873
Accretion to Mezzanine equity		(4,850	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders		(9,938	)
Basic net income attributable to Toyota Motor Corporation per common share		1,868,085			2,871,534		650.55
Effect of dilutive securities
Model AA Class Shares		14,788			47,100
Assumed exercise of dilutive stock options		(0	)		40
Diluted net income attributable to Toyota Motor Corporation per common share		1,882,873			2,918,674		645.11
For the year ended March 31, 2020
Net income attributable to Toyota Motor Corporation		2,076,183
Accretion to Mezzanine equity		(4,850	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders		(12,434	)
Basic net income attributable to Toyota Motor Corporation per common share		2,058,899			2,798,918		735.61
Effect of dilutive securities
Model AA Class Shares		17,284			47,100
Assumed exercise of dilutive stock options		—			—
Diluted net income attributable to Toyota Motor Corporation per common share		2,076,183			2,846,018		729.50

The following table shows Toyota Motor Corporation shareholders’ equity per share as of March 31, 2019 and 2020. Toyota Motor Corporation shareholders’ equity per share amounts are calculated by dividing Toyota Motor Corporation shareholders’ equities’ amount at the end of each period by the number of shares issued and outstanding, excluding treasury stock at the end of the corresponding period.

	Yen in millions		Thousands of shares		Yen
	Toyota Motor Corporation shareholders’ equity		Common shares issued and outstanding at the end of the year (excluding treasury stock)		Toyota Motor Corporation shareholders’ equity per share
As of March 31, 2019		19,348,152		2,832,439		6,830.92
As of March 31, 2020		20,060,618		2,766,153		7,252.17

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Employee benefit plans (Weighted-Average Assumptions Used to Determine Benefit Obligations and Net Periodic Pension Cost) (Detail)	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Japan
Defined benefit plan, weighted average assumptions used in calculating benefit obligation
Discount rate	0.60%	0.60%
Rate of compensation increase	2.50%	3.10%
Defined benefit plan, weighted average assumptions used in calculating net periodic benefit cost
Discount rate	0.60%	0.70%	0.70%
Expected return on plan assets	2.40%	2.40%	2.40%
Rate of compensation increase	3.10%	3.30%	2.90%
Foreign Plans
Defined benefit plan, weighted average assumptions used in calculating benefit obligation
Discount rate	3.50%	3.80%
Rate of compensation increase	3.40%	3.50%
Defined benefit plan, weighted average assumptions used in calculating net periodic benefit cost
Discount rate	3.80%	3.90%	4.00%
Expected return on plan assets	5.20%	5.60%	6.00%
Rate of compensation increase	3.50%	3.60%	3.80%

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Allowance for doubtful accounts and credit losses

12 Months Ended

Mar. 31, 2020

Allowance for doubtful accounts and credit losses

10. Allowance for doubtful accounts and credit losses:

The net changes in the allowance for doubtful accounts relating to trade accounts and notes receivable for the years ended March 31, 2018, 2019 and 2020 are as follows:

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Allowance for doubtful accounts at beginning of year		100,712			98,590			90,373
Provision for doubtful accounts, net of reversal		(74	)		(1,375	)		5,689
Write-offs		(2,374	)		(2,472	)		(2,691	)
Other		326			(4,370	)		(3,019	)
Allowance for doubtful accounts at end of year		98,590			90,373			90,352

“Other” includes the impact of currency translation adjustments for the years ended March 31, 2018, 2019 and 2020.

A portion of the allowance for doubtful accounts balance at March 31, 2019 and 2020 totaling ¥74,003 million and ¥66,408 million, respectively, is attributed to certain non-current receivable balances which are reported as “Other” assets in the consolidated balance sheets.

The net changes in the allowance for credit losses relating to finance receivables and vehicles and equipment on operating leases for the years ended March 31, 2018, 2019 and 2020 are as follows:

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Allowance for credit losses at beginning of year		178,101			184,087			196,399
Provision for credit losses, net of reversal		76,143			81,440			137,293
Charge-offs		(96,444	)		(91,698	)		(98,352	)
Recoveries		25,344			26,178			25,578
Other		943			(3,608	)		(18,569	)
Allowance for credit losses at end of year		184,087			196,399			242,349

“Other” primarily includes the impact of currency translation adjustments for the years ended March 31, 2018, 2019 and 2020.

The net changes in the allowance for credit losses above relating to retail receivables portfolio segment, finance lease receivables portfolio segment and wholesale and other dealer loan receivables portfolio segment for the years ended March 31, 2018, 2019 and 2020 are as follows:

	Yen in millions
	For the year ended March 31, 2018
	Retail			Finance leases			Wholesale and other dealer loans
Allowance for credit losses at beginning of year		104,354			23,962			30,896
Provision for credit losses, net of reversal		52,891			7,115			6,497
Charge-offs		(74,868	)		(2,708	)		(823	)
Recoveries		20,511			315			59
Other		569			133			171
Allowance for credit losses at end of year		103,457			28,817			36,800

	Yen in millions
	For the year ended March 31, 2019
	Retail			Finance leases			Wholesale and other dealer loans
Allowance for credit losses at beginning of year		103,457			28,817			36,800
Provision for credit losses, net of reversal		68,470			710			3,990
Charge-offs		(72,657	)		(2,903	)		(1,111	)
Recoveries		20,485			345			45
Other		(2,161	)		(486	)		(716	)
Allowance for credit losses at end of year		117,594			26,483			39,008

	Yen in millions
	For the year ended March 31, 2020
	Retail			Finance leases			Wholesale and other dealer loans
Allowance for credit losses at beginning of year		117,594			26,483			39,008
Provision for credit losses, net of reversal		107,784			9,716			12,544
Charge-offs		(82,613	)		(3,267	)		(105	)
Recoveries		20,277			353			33
Other		(11,552	)		(2,386	)		(3,691	)
Allowance for credit losses at end of year		151,490			30,899			47,789

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Derivative financial instruments (Fair Values of Derivative Financial Instruments) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Derivatives, Fair Value [Line Items]
Total derivative assets	¥ 503,826	¥ 200,333
Counterparty netting	(176,541)	(89,364)
Collateral received	(121,979)	(46,590)
Carrying value of derivative assets	205,306	64,379
Total derivative liabilities	(437,008)	(231,915)
Counterparty netting	176,541	89,364
Collateral posted	234,937	110,159
Carrying value of derivative liabilities	(25,530)	(32,392)
Interest rate and currency swap agreements
Derivatives, Fair Value [Line Items]
Derivative assets	478,510	189,613
Derivative liabilities	0
Derivative liabilities	(419,763)	(218,068)
Interest rate and currency swap agreements | Prepaid expenses and Other current assets
Derivatives, Fair Value [Line Items]
Derivative assets	105,724	74,971
Interest rate and currency swap agreements | Investments and other assets - Other
Derivatives, Fair Value [Line Items]
Derivative assets	372,786	114,642
Interest rate and currency swap agreements | Other current liabilities
Derivatives, Fair Value [Line Items]
Derivative liabilities	0
Derivative liabilities	(76,492)	(28,911)
Interest rate and currency swap agreements | Other long-term liabilities
Derivatives, Fair Value [Line Items]
Derivative liabilities	0
Derivative liabilities	(343,271)	(189,157)
Foreign exchange forward and option contracts
Derivatives, Fair Value [Line Items]
Derivative assets	25,316	10,720
Derivative liabilities	(17,245)	(13,847)
Foreign exchange forward and option contracts | Prepaid expenses and Other current assets
Derivatives, Fair Value [Line Items]
Derivative assets	25,316	10,720
Foreign exchange forward and option contracts | Investments and other assets - Other
Derivatives, Fair Value [Line Items]
Derivative assets	0
Foreign exchange forward and option contracts | Other current liabilities
Derivatives, Fair Value [Line Items]
Derivative liabilities	(17,245)	¥ (13,847)
Foreign exchange forward and option contracts | Other long-term liabilities
Derivatives, Fair Value [Line Items]
Derivative liabilities
Fair value hedging derivative financial instruments | Interest rate and currency swap agreements
Derivatives, Fair Value [Line Items]
Derivative assets	0
Fair value hedging derivative financial instruments | Interest rate and currency swap agreements | Prepaid expenses and Other current assets
Derivatives, Fair Value [Line Items]
Derivative assets	0
Fair value hedging derivative financial instruments | Interest rate and currency swap agreements | Investments and other assets - Other
Derivatives, Fair Value [Line Items]
Derivative assets	¥ 0

XML

Finance receivables

12 Months Ended

Mar. 31, 2020

Finance receivables

6. Finance receivables:

Finance receivables consist of the following:

	Yen in millions
	March 31,
	2019			2020
Retail		12,768,305			12,795,076
Finance leases		1,636,536			1,691,371
Wholesale and other dealer loans		3,489,757			3,479,613
		17,894,598			17,966,060
Deferred origination costs		204,304			221,200
Unearned income		(986,928	)		(919,053	)
Allowance for credit losses
Retail		(117,594	)		(151,490	)
Finance leases		(26,483	)		(30,899	)
Wholesale and other dealer loans		(39,008	)		(47,789	)
Total allowance for credit losses		(183,085	)		(230,178	)
Total finance receivables, net		16,928,889			17,038,029
Less - Current portion		(6,647,771	)		(6,614,171	)
Noncurrent finance receivables, net		10,281,118			10,423,858

Finance receivables were geographically distributed as follows: in North America 55.2%, in Asia 13.0%, in Europe 12.3%, in Japan 8.2% and in Other 11.3% as of March 31, 2019, and in North America 55.8%, in Asia 13.0%, in Europe 12.6%, in Japan 8.8% and in Other 9.8% as of March 31, 2020.

The contractual maturities of retail receivables, the future minimum lease payments on finance leases and the contractual maturities of wholesale and other dealer loans at March 31, 2020 are summarized as follows:

	Yen in millions
Years ending March 31,	Retail		Finance leases		Wholesale and other dealer loans
2021		4,027,784		446,901		2,476,011
2022		3,034,099		335,850		308,745
2023		2,476,975		247,378		197,597
2024		1,749,643		134,481		157,317
2025		964,212		48,912		107,152
Thereafter		542,363		8,801		232,791
		12,795,076		1,222,323		3,479,613

Finance leases consist of the following:

	Yen in millions
	March 31,
	2019			2020
Minimum lease payments		1,158,242			1,222,323
Estimated unguaranteed residual values		478,294			469,048
		1,636,536			1,691,371
Deferred origination costs		11,929			12,349
Less - Unearned income		(143,838	)		(146,087	)
Less - Allowance for credit losses		(26,483	)		(30,898	)
Finance leases, net		1,478,144			1,526,735

Toyota is exposed to credit risk on Toyota’s finance receivables. Credit risk is the risk of loss arising from the failure of customers or dealers to meet the terms of their contracts with Toyota or otherwise fail to perform as agreed. Toyota estimates allowance for credit losses by variety of credit-risk evaluation process to cover probable and estimable losses above.

The table below shows the amount of the finance receivables segregated into aging categories based on the number of days outstanding as of March 31, 2019 and 2020:

	Yen in millions
	March 31, 2019
	Retail		Finance leases		Wholesale		Real estate		Working capital
Current		12,554,265		1,625,893		1,806,305		873,427		808,755
30-59 days past due		141,111		4,972		191		—		—
60-89 days past due		35,090		1,396		100		—		—
90 days or greater past due		37,839		4,275		393		106		480
Total		12,768,305		1,636,536		1,806,989		873,533		809,235

	Yen in millions
	March 31, 2020
	Retail		Finance leases		Wholesale		Real estate		Working capital
Current		12,525,020		1,675,523		1,642,637		857,407		967,105
30-59 days past due		176,991		7,670		2,008		47		—
60-89 days past due		44,922		2,426		1,132		43		—
90 days or greater past due		48,143		5,752		9,011		196		27
Total		12,795,076		1,691,371		1,654,788		857,693		967,132

The tables below show the recorded investment for credit quality of the finance receivable within the wholesale and other dealer loan receivables portfolio segment as of March 31, 2019 and 2020:

The wholesale and other dealer loan receivables portfolio segment is primarily segregated into credit qualities below based on internal risk assessments by dealers.

Performing: Account not classified as either Credit Watch, At Risk or Default

Credit Watch: Account designated for elevated attention

At Risk: Account where there is an increased likelihood that default may exist based on qualitative and quantitative factors

Default: Account is not currently meeting contractual obligations or we have temporarily waived certain contractual requirements

	Yen in millions
	March 31, 2019
	Wholesale		Real estate		Working capital		Total
Performing		1,566,475		743,379		789,948		3,099,802
Credit Watch		156,740		81,848		8,610		247,198
At Risk		58,550		45,564		10,189		114,303
Default		25,224		2,742		488		28,454
Total		1,806,989		873,533		809,235		3,489,757

	Yen in millions
	March 31, 2020
	Wholesale		Real estate		Working capital		Total
Performing		1,441,320		729,474		931,420		3,102,214
Credit Watch		133,892		82,322		22,293		238,507
At Risk		54,251		37,379		13,332		104,962
Default		25,325		8,518		87		33,930
Total		1,654,788		857,693		967,132		3,479,613

The tables below summarize information about impaired finance receivables:

	Yen in millions
	Recorded investment				Unpaid principal balance				Individually evaluated allowance
	March 31,				March 31,				March 31,
	2019		2020		2019		2020		2019		2020
Impaired account balances individually evaluated for impairment with an allowance:
Wholesale		18,187		11,687		18,187		11,687		3,141		2,005
Real estate		10,545		7,948		10,545		7,948		1,280		1,003
Working capital		7,451		10,040		7,451		10,040		6,670		4,163
Total		36,183		29,675		36,183		29,675		11,091		7,171
Impaired account balances individually evaluated for impairment without an allowance:
Wholesale		14,429		10,121		14,429		10,121
Real estate		16,870		16,157		16,870		16,157
Working capital		2,220		2,068		2,220		2,068
Total		33,519		28,346		33,519		28,346
Impaired account balances aggregated and evaluated for impairment:
Retail		29,537		30,753		28,788		30,109
Finance leases		99		103		75		42
Total		29,636		30,856		28,863		30,151
Total impaired account balances:
Retail		29,537		30,753		28,788		30,109
Finance leases		99		103		75		42
Wholesale		32,616		21,808		32,616		21,808
Real estate		27,415		24,105		27,415		24,105
Working capital		9,671		12,108		9,671		12,108
Total		99,338		88,877		98,565		88,172

The amount of finance receivables modified as a troubled debt restructuring for the year ended March 31, 2020 was not significant for all classes of finance receivables. Finance receivables modified as troubled debt restructurings for the year ended March 31, 2020 and for which there was a payment default were not significant for all classes of such receivables.

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Other financial instruments (Estimated Fair Value of Toyota's Financial Instrument, Excluding Marketable Securities, Other Securities Investments, Investments and Other Assets in Affiliated Companies and Derivative Financial Instruments) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Assets (Liabilities)
Cash and cash equivalents	¥ 4,190,518	¥ 3,574,704
Time deposits	828,220	1,126,352
Other receivables	564,854	568,156
Short-term borrowings	(5,286,026)	(5,344,973)
Carrying amount
Assets (Liabilities)
Cash and cash equivalents	4,190,518	3,574,704
Time deposits	828,220	1,126,352
Total finance receivables, net	15,511,294	15,450,745
Other receivables	564,854	568,156
Short-term borrowings	(5,286,026)	(5,344,973)
Long-term debt including the current portion	(15,238,006)	(14,786,184)
Estimated fair value
Assets (Liabilities)
Cash and cash equivalents	4,190,518	3,574,704
Time deposits	828,220	1,126,352
Total finance receivables, net	15,703,737	15,668,542
Other receivables	564,854	568,156
Short-term borrowings	(5,286,026)	(5,344,973)
Long-term debt including the current portion	(14,610,833)	(14,620,164)
Estimated fair value | Level 1
Assets (Liabilities)
Cash and cash equivalents	3,598,318	2,980,504
Estimated fair value | Level 2
Assets (Liabilities)
Cash and cash equivalents	592,200	594,200
Time deposits	828,220	1,126,352
Short-term borrowings	(5,274,071)	(5,285,807)
Long-term debt including the current portion	(12,644,187)	(12,786,541)
Estimated fair value | Level 3
Assets (Liabilities)
Total finance receivables, net	15,703,737	15,668,542
Other receivables	564,854	568,156
Short-term borrowings	(11,955)	(59,166)
Long-term debt including the current portion	¥ (1,966,646)	¥ (1,833,623)

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Summary of significant accounting policies

12 Months Ended

Mar. 31, 2020

Summary of significant accounting policies

2. Summary of significant accounting policies:

The parent company and its subsidiaries in Japan and its foreign subsidiaries maintain their records and prepare their financial statements in accordance with Japanese generally accepted accounting principles and those of their countries of domicile. Certain adjustments and reclassifications have been incorporated in the accompanying consolidated financial statements to conform to U.S.GAAP.

Significant accounting policies after reflecting adjustments for the above are as follows:

Basis of consolidation and accounting for investments in affiliated companies -

The consolidated financial statements include the accounts of the parent company, its majority-owned subsidiary companies and variable interest entities of which Toyota is the primary beneficiary. All significant intercompany transactions and accounts have been eliminated. Investments in affiliated companies in which Toyota exercises significant influence, but which it does not control, are stated at cost plus equity in undistributed earnings. Consolidated net income includes Toyota’s equity in current earnings of such companies, after elimination of unrealized intercompany profits. Investments in such companies are reduced to fair value if a decline in market value is determined other-than-temporary.

Estimates -

The preparation of Toyota’s consolidated financial statements in conformity with U.S.GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The more significant estimates include: product warranties, liabilities accrued for recalls and other safety measures, allowance for doubtful accounts and credit losses, residual values for leased assets, impairment of long-lived assets, pension costs and obligations, fair value of derivative financial instruments, other-than-temporary losses on debt securities, litigation liabilities and valuation allowance for deferred tax assets.

Translation of foreign currencies -

All asset and liability accounts of foreign subsidiaries and affiliated companies are translated into Japanese yen at appropriate year-end current exchange rates and all income and expense accounts of those subsidiaries are translated at the average exchange rates for each period. The foreign currency translation adjustments are included as a component of accumulated other comprehensive income.

Foreign currency receivables and payables are translated at appropriate year-end current exchange rates and the resulting transaction gains or losses are recorded in operations currently.

Revenue recognition -

In the automotive operations, performance obligations are considered to be satisfied when completed vehicles and parts are delivered to the agreed locations with dealers. For parts for overseas production, it is when

they are loaded on a ship to foreign manufacturing companies. We do not have any material significant payment terms as payment is received at or shortly after the point of sale.

Toyota’s sales incentive programs principally consist of cash payments to dealers calculated based on vehicle volume or a model sold by a dealer during a certain period of time. Toyota accrues these incentives as revenue reductions upon the sale of a vehicle corresponding to the program by the amount determined in the related incentive program utilizing the most likely outcome method.

The sale of certain vehicles includes a contractual right, which entitles customers to free vehicle maintenance. We use an observable price to determine the stand-alone selling price for separate performance obligations or a cost plus margin approach when one is not available. Such revenues from free maintenance contracts are deferred and recognized as revenue over the period of the contract in proportion to the costs expected to be incurred in satisfying the obligations under the contract.

Revenues from the sales of vehicles under which Toyota conditionally guarantees the minimum resale value are recognized on a pro rata basis from the date of sale to the first exercise date of the guarantee in accordance with lease accounting. The underlying vehicles of these transactions are recorded as assets and are depreciated in accordance with Toyota’s depreciation policy.

We have elected to recognize the cost of transport service activities after the customer gains control as expenses at the time that control of products transfers.

Revenues from retail financing contracts and finance leases are recognized using the effective yield method. Revenues from operating leases are recognized on a straight-line basis over the lease term.

All other operations business of Toyota includes the design, manufacture and sales of housing. Certain revenues from the housing business, such as those of ordered housing are recognized only to the extent of the costs incurred until such time that it can reasonably measure the outcome of the performance obligation.

If the period between satisfaction of the performance obligation and receipt of consideration is expected to be within one year or less, as a practical expedient, we do not adjust the promised amount of consideration for the effects of a significant financing component.

Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities.

Other costs -

Advertising and sales promotion costs are expensed as incurred. Advertising costs were ¥509,653 million, ¥490,093 million and ¥470,849 million for the years ended March 31, 2018, 2019 and 2020, respectively.

Toyota generally warrants its products against certain manufacturing and other defects. Provisions for product warranties are provided for specific periods of time and/or usage of the product and vary depending upon the nature of the product, the geographic location of the sale and other factors. Toyota records a provision for estimated product warranty costs at the time the related sale is recognized based on estimates that Toyota will incur to repair or replace product parts that fail while under warranty. The amount of accrued estimated warranty costs is primarily based on historical experience as to product failures as well as current information on repair costs. The amount of warranty costs accrued also contains an estimate of warranty claim recoveries to be received from suppliers.

In addition to product warranties above, Toyota accrues for costs of recalls and other safety measures based on management’s estimates when it is probable a liability has been incurred and the amount of loss can be reasonably estimated. Toyota mainly employs an estimation model, to accrue at the time of vehicle sale, an amount that represents management’s best estimate of expenses related to future recalls and other safety measures. The estimation model for recalls and other safety measures takes into account Toyota’s historical experience of recalls and other safety measures.

Litigation liabilities are established to cover probable losses on various lawsuits based on the information currently available. Attorneys’ fees are expensed as incurred.

Research and development costs are expensed as incurred. Research and development costs were ¥1,064,269 million, ¥1,048,882 million and ¥1,110,369 million for the years ended March 31, 2018, 2019 and 2020, respectively.

Restricted cash and cash equivalents-

Cash and cash equivalents include all highly liquid investments with original maturities of three months or less, that are readily convertible to known amounts of cash and are so near maturity that they present insignificant risk of changes in value because of changes in interest rates. Restricted cash and cash equivalents mainly include customer collections on securitized receivables to be distributed to investors as payments on the related secured debt.

Marketable securities and other securities investments -

Marketable securities and other securities investments consist of debt and equity securities. Debt securities designated as available-for-sale are carried at fair value and the difference between fair value and acquisition cost is reflected as a component of accumulated other comprehensive income in shareholders’ equity, net of applicable taxes. Individual securities classified as available-for-sale are reduced to fair value for other-than-temporary declines in market value. In determining if a decline in value is other-than-temporary, Toyota considers the length of time during and the extent to which the fair value has been less than the carrying value, the financial condition and prospects of the entity issuing such securities and Toyota’s ability and intent to retain its investment in the entity for a period of time sufficient to allow for any anticipated recovery in market value. Realized gains and losses, which are determined based on the average-cost method, are reflected in the consolidated statements of income when realized.

Changes in fair value on equity securities with readily determinable fair values are recognized in net income. Equity securities without readily determinable fair values are measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

Finance receivables -

Finance receivables recorded on Toyota’s consolidated balance sheets are comprised of the unpaid principal balance, plus accrued interest, less charge-offs, net of any unearned income and deferred origination costs and the allowance for credit losses. Deferred origination costs are amortized so as to approximate a level rate of return over the term of the related contracts.

The determination of portfolio segments is based primarily on the qualitative consideration of the nature of Toyota’s business operations and finance receivables. The three portfolio segments within finance receivables are as follows:

Retail receivables portfolio segment -

The retail receivables portfolio segment consists of retail installment sales contracts acquired mainly from dealers (“auto loans”) including credit card loans. These contracts acquired must first meet specified credit standards. Thereafter, Toyota retains responsibility for contract collection and administration.

The contract periods of auto loans primarily range from 2 to 7 years. Toyota acquires security interests in the vehicles financed and has the right to repossess vehicles if customers fail to meet their contractual obligations. Almost all auto loans are non-recourse, which relieves the dealers from financial responsibility in the event of repossession.

Toyota classifies retail receivables portfolio segment into one class based on common risk characteristics associated with the underlying finance receivables, the similarity of the credit risks, and the quantitative materiality.

Finance lease receivables portfolio segment -

Toyota acquires new vehicle lease contracts originated primarily through dealers. The contract periods of these primarily range from 2 to 5 years. Lease contracts acquired must first meet specified credit standards after which Toyota assumes ownership of the leased vehicle. Toyota is responsible for contract collection and administration during the lease period.

Toyota is generally permitted to take possession of the vehicle upon a default by the lessee. The residual value is estimated at the time the vehicle is first leased. Vehicles returned to Toyota at the end of their leases are sold by auction.

Toyota classifies finance lease receivables portfolio segment into one class based on common risk characteristics associated with the underlying finance receivables and the similarity of the credit risks

Wholesale and other dealer loan receivables portfolio segment -

Toyota provides wholesale financing to qualified dealers to finance inventories. Toyota acquires security interests in vehicles financed at wholesale. In cases where additional security interests would be required, Toyota takes dealership assets or personal assets, or both, as additional security. If a dealer defaults, Toyota has the right to liquidate any assets acquired and seek legal remedies.

Toyota also makes term loans to dealers for business acquisitions, facilities refurbishment, real estate purchases and working capital requirements. These loans are typically secured with liens on real estate, other dealership assets and/or personal assets of the dealers.

Toyota classifies wholesale and other dealer loan receivables portfolio segment into three classes of wholesale, real estate and working capital, based on the risk characteristics associated with the underlying finance receivables.

A receivable account balance is considered impaired when, based on current information and events, it is probable that Toyota will be unable to collect all amounts due according to the terms of the contract. Factors such as payment history, compliance with terms and conditions of the underlying loan agreement and other subjective factors related to the financial stability of the borrower are considered when determining whether a loan is impaired. Impaired finance receivables include certain nonaccrual receivables for which a specific reserve has been assessed. An account modified as a troubled debt restructuring is considered to be impaired. A troubled debt restructuring occurs when an account is modified through a concession to a borrower experiencing financial difficulty.

All classes of wholesale and other dealer loan receivables portfolio segment are placed on nonaccrual status when full payment of principal or interest is in doubt, or when principal or interest is 90 days or more

contractually past due, whichever occurs first. Collateral dependent loans are placed on nonaccrual status if collateral is insufficient to cover principal and interest. Interest accrued but not collected at the date a receivable is placed on nonaccrual status is reversed against interest income. In addition, the amortization of net deferred fees is suspended.

Interest income on nonaccrual receivables is recognized only to the extent it is received in cash. Accounts are restored to accrual status only when interest and principal payments are brought current and future payments are reasonably assured. Receivable balances are written-off against the allowance for credit losses when it is probable that a loss has been realized. Retail receivables class and finance lease receivables class are not placed generally on nonaccrual status when principal or interest is 90 days or more past due. However, these receivables are generally written-off against the allowance for credit losses when payments due are no longer expected to be received or the account is 120 days contractually past due, whichever occurs first.

As of March 31, 2019 and 2020, finance receivables on nonaccrual status are as follows:

	Yen in millions
	March 31,
	2019		2020
Retail		9,401		10,434
Finance leases		2,431		3,300
Wholesale		18,217		13,023
Real estate		18,281		10,703
Working capital		—		7,712
		48,330		45,172

As of March 31, 2019 and 2020, finance receivables 90 days or more past due and accruing are as follows:

	Yen in millions
	March 31,
	2019		2020
Retail		28,438		37,709
Finance leases		3,821		5,161
		32,259		42,870

Allowance for credit losses -

Allowance for credit losses is established to cover probable losses on finance receivables and vehicles and equipment on operating leases, resulting from the inability of customers to make required payments. Provision for credit losses is included in selling, general and administrative expenses.

The allowance for credit losses is based on a systematic, ongoing review and evaluation performed as part of the credit-risk evaluation process, historical loss experience, the size and composition of the portfolios, current economic events and conditions, the estimated fair value and adequacy of collateral and other pertinent factors. Vehicles and equipment on operating leases are not within the scope of accounting guidance governing the disclosure of portfolio segments.

Retail receivables portfolio segment -

Toyota calculates allowance for credit losses to cover probable losses on retail receivables by applying reserve rates to such receivables. Reserve rates are calculated mainly by historical loss experience, current economic events and conditions and other pertinent factors.

Finance lease receivables portfolio segment -

Toyota calculates allowance for credit losses to cover probable losses on finance lease receivables by applying reserve rates to such receivables. Reserve rates are calculated mainly by historical loss experience, current economic events and conditions and other pertinent factors such as used car markets.

Wholesale and other dealer loan receivables portfolio segment -

Toyota calculates allowance for credit losses to cover probable losses on wholesale and other dealer loan receivables by applying reserve rates to such receivables. Reserve rates are calculated mainly by financial conditions of the dealers, terms of collateral setting, current economic events and conditions and other pertinent factors.

Toyota establishes specific reserves to cover the estimated losses on individually impaired receivables within the wholesale and other dealer loan receivables portfolio segment. Specific reserves on impaired receivables are determined by the present value of expected future cash flows or the fair value of collateral when it is probable that such receivables will be unable to be fully collected. The fair value of the underlying collateral is used if the receivable is collateral-dependent. The receivable is determined collateral-dependent if the repayment of the loan is expected to be provided by the underlying collateral. For the receivables in which the fair value of the underlying collateral was in excess of the outstanding balance, no allowance was provided.

Troubled debt restructurings in the retail receivables and finance lease receivables portfolio segments are specifically identified as impaired and aggregated with their respective portfolio segments when determining the allowance for credit losses. Impaired loans in the retail receivables and finance lease receivables portfolio segments are insignificant for individual evaluation and Toyota has determined that allowance for credit losses for each of the retail receivables and finance lease receivables portfolio segments would not be materially different if they had been individually evaluated for impairment.

Specific reserves on impaired receivables within the wholesale and other dealer loan receivables portfolio segment are recorded by an increase to the allowance for credit losses based on the related measurement of impairment. Related collateral, if recoverable, is repossessed and sold and the account balance is written-off.

Any shortfall between proceeds received and the carrying cost of repossessed collateral is charged to the allowance. Recoveries are reversed from the allowance for credit losses.

Allowance for residual value losses -

Toyota is exposed to risk of loss on the disposition of off-lease vehicles to the extent that sales proceeds are not sufficient to cover the carrying value of the leased asset at lease termination. Toyota maintains an allowance to cover probable estimated losses related to unguaranteed residual values on its owned portfolio. The allowance is evaluated considering projected vehicle return rates and projected loss severity. Factors considered in the determination of projected return rates and loss severity include historical and market information on used vehicle sales, trends in lease returns and new car markets, and general economic conditions. Management evaluates the foregoing factors, develops several potential loss scenarios, and reviews allowance levels to determine whether reserves are considered adequate to cover the probable range of losses.

The allowance for residual value losses is maintained in amounts considered by Toyota to be appropriate in relation to the estimated losses on its owned portfolio. Upon disposal of the assets, the allowance for residual losses is adjusted for the difference between the net book value and the proceeds from sale.

Inventories -

Inventories are valued at cost, not in excess of net realizable value, cost being determined on the “average-cost” basis, except for the cost of finished products carried by certain subsidiary companies which is determined on the “specific identification” basis or “last-in, first-out” (“LIFO”) basis. Inventories valued on the LIFO basis totaled ¥470,208 million and ¥291,639 million at March 31, 2019 and 2020, respectively. Had the “first-in, first-out” basis been used for those companies using the LIFO basis, inventories would have been ¥25,302 million and ¥21,194 million higher than reported at March 31, 2019 and 2020, respectively.

Property, plant and equipment -

Property, plant and equipment are stated at cost. Major renewals and improvements are capitalized; minor replacements, maintenance and repairs are charged to current operations. Depreciation of property, plant and equipment is computed on the straight-line method at rates based on estimated useful lives of the respective assets according to general class, type of construction and use. The estimated useful lives range from 2 to 65 years for buildings and from 2 to 20 years for machinery and equipment.

Vehicles and equipment on operating leases to third parties are originated by dealers and acquired by certain consolidated subsidiaries. Such subsidiaries are also the lessors of certain property that they acquire directly. Vehicles and equipment on operating leases are depreciated primarily on a straight-line method over the lease term, generally from 2 to 5 years, to the estimated residual value. Incremental direct costs incurred in connection with the acquisition of operating lease contracts are capitalized and amortized on a straight-line method over the lease term. 

Leases -

At the inception of a contract Toyota assesses whether the contract is, or contains, a lease.

Lessee -

Toyota recognizes a right of use asset and a lease liability at the lease commencement date, for finance leases and operating leases. After the commencement date for finance leases, Toyota applies a cost model and subsequently depreciates the right of use asset using the straight-line method from the commencement date to the earlier of the end of the useful life of the right of use asset or the end of the lease term. Operating lease expenses are recognized on a straight-line basis over the lease term after the commencement date. Lease liabilities are measured at amortized cost using the effective interest method. Toyota uses its incremental borrowing rate as of the commencement date as a discount rate to measure lease liabilities. Many lease contracts relating to land and buildings entered by Toyota include extension options that can be exercisable by Toyota for various purposes such as to ensure the business flexibility. Toyota assesses whether it is reasonably certain to exercise an extension option, and if it assesses it to be reasonably certain, the extension option is included in the lease term.

Toyota recognizes lease payments associated with lease terms of 12 months or less as an expense on a straight-line basis over the lease term.

Lessor -

With respect to lessor lease transactions, Toyota determines at the commencement of the lease whether each lease is a finance lease or operating lease. A lease is classified as a finance lease if it transfers substantially all of the risks and rewards incidental to the ownership of an underlying asset. Otherwise leases are classified as operating leases. Toyota recognizes the operating lease payments in profit or loss on a straight-line basis over the lease term.

Long-lived assets -

Toyota reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset group exceeds the estimated undiscounted cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess of the carrying value of the asset group over its fair value. Fair value is determined mainly using a discounted cash flow valuation method.

Goodwill and intangible assets -

Goodwill is not material to Toyota’s consolidated balance sheets.

Intangible assets consist mainly of software. Intangible assets with a definite life are amortized on a straight-line basis with estimated useful lives mainly of 5 years. Intangible assets with an indefinite life are tested for impairment whenever events or circumstances indicate that a carrying amount of an asset (asset group) may not be recoverable.

An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted cash flows used in determining the fair value of the asset. The amount of the impairment loss to be recorded is generally determined by the difference between the fair value of the asset using a discounted cash flow valuation method and the current book value.

Employee benefit obligations -

Toyota has both defined benefit and defined contribution plans for employees’ retirement benefits. Retirement benefit obligations are measured by actuarial calculations in accordance with U.S.GAAP. The funded status of the defined benefit postretirement plans is recognized on the consolidated balance sheets as prepaid pension and severance costs or accrued pension and severance costs, and the funded status change is recognized in the year in which it occurs through other comprehensive income.

Environmental matters -

Environmental expenditures relating to current operations are expensed or capitalized as appropriate. Expenditures relating to existing conditions caused by past operations, which do not contribute to current or future revenues, are expensed. Liabilities for remediation costs are recorded when they are probable and reasonably estimable, generally no later than the completion of feasibility studies or Toyota’s commitment to a plan of action. The cost of each environmental liability is estimated by using current technology available and various engineering, financial and legal specialists within Toyota based on current law. Such liabilities do not reflect any offset for possible recoveries from insurance companies and are not discounted. There were no material changes in these liabilities for all periods presented.

Income taxes -

The provision for income taxes is computed based on the pretax income included in the consolidated statements of income. The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.

Derivative financial instruments -

Toyota employs derivative financial instruments, including forward foreign currency exchange contracts, foreign currency options, interest rate swaps, interest rate currency swap agreements and interest rate options to manage its exposure to fluctuations in interest rates and foreign currency exchange rates. All derivative financial instruments are recorded on the consolidated balance sheets at fair value, taking into consideration the effects of legally enforceable master netting agreements that allow us to net settle positive and negative positions and offset cash collateral held with the same counterparty on a net basis. Toyota does not use derivatives for speculation or trading purposes. Changes in the fair value of derivatives are recorded each period in current earnings or through other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and the type of hedge transaction.

Net income attributable to Toyota Motor Corporation per common share -

Basic net income attributable to Toyota Motor Corporation per common share is calculated by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding during the reported period. The calculation of diluted net income attributable to Toyota Motor Corporation per common share is done by adjusting net income attributable to common shareholders and the weighted-average number of common shares outstanding, which includes the additional dilution from the assumed conversion of model AA class shares and the assumed exercise of dilutive stock options.

Stock-based compensation -

Toyota measures compensation expense for its stock-based compensation plan based on the grant-date fair value of the award, and accounts for the award.

Other comprehensive income -

Other comprehensive income refers to revenues, expenses, gains and losses that, under U.S.GAAP are included in comprehensive income, but are excluded from net income as these amounts are recorded directly as an adjustment to shareholders’ equity. Toyota’s other comprehensive income is primarily comprised of unrealized gains/losses on marketable securities designated as available-for-sale, foreign currency translation adjustments and adjustments attributed to pension liabilities associated with Toyota’s defined benefit pension plans.

Accounting changes -

Adoption of new accounting standard -

In February 2016, the Financial Accounting Standards Board (“FASB”) issued updated guidance for leases. This guidance requires lessees to recognize substantially all leases on their balance sheet as a right of use asset and a lease liability. Toyota adopted this guidance on April 1, 2019 using the modified retrospective method of

adoption and elected the transition method that allows for application of the standard at the adoption date. Additionally, Toyota elected the package of practical expedients of not reassessing lease classifications and others for lease contracts that expired or exist as of the adoption date. As a result of adoption, Toyota recognized an additional balance of ¥277,118 million as right of use assets as of March 31, 2020, which is included in “Other” of “Investments and other assets” of Toyota’s consolidated balance sheet. Lease liabilities are included in “Other current liabilities” and “Other long-term liabilities,” and were ¥37,385 million and ¥239,623 million, respectively. See note 23 to the consolidated financial statements for the disclosure by adoption of this guidance.

In August 2017, the FASB issued updated guidance for hedge accounting. This guidance simplifies and expands the application of hedge accounting. Toyota adopted this guidance on April 1, 2019. The adoption of this guidance did not have a material impact on Toyota’s consolidated financial statements.

Change in depreciation method -

Toyota used the declining-balance method mainly for the parent company and Japanese subsidiaries, and the straight-line method for foreign subsidiary companies, regarding the depreciation method of property, plant and equipment. In recent years, Toyota has been strengthening competitiveness globally through the investments in areas such as the remodeling of cars by introducing a new platform and powertrain units, the improvement of technological capabilities and productivity, as well as the promotion of equipment versatility. In response to such recent changes, effective as of April 1, 2019, Toyota changed the depreciation method of the parent company and Japanese subsidiaries to the straight-line method because Toyota believes it better reflects the future economic benefit from the stable usage of property, plant and equipment. The impact of the change in depreciation method is recognized prospectively as a change in accounting estimate in accordance with the FASB Accounting Standards Codification (ASC) 250 “Accounting Changes and Error Corrections”.

As a result of the change in depreciation method, depreciation expense for the fiscal year ended March 31, 2020 decreased by ¥173,201 million. Net income attributable to Toyota Motor Corporation and basic net income attributable to Toyota Motor Corporation per common share for the fiscal year ended March 31, 2020 increased by ¥117,001 million and ¥41.80, respectively.

Recent pronouncements to be adopted in future periods -

Toyota intends to replace the currently applied U.S.GAAP and voluntarily adopt IFRS for its consolidated financial statements in order to improve the international comparability of its financial information in the capital markets, among other reasons. The period for disclosure based on IFRS will begin with the first quarter of the fiscal year ending March 31, 2021. As a result, recent pronouncements to be adopted in future periods under U.S.GAAP have been excluded from this disclosure.

Reclassifications -

Certain prior year amounts have been reclassified to conform to the presentations as of and for the year ended March 31, 2020.

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CONSOLIDATED STATEMENTS OF INCOME - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Net revenues
Total net revenues	¥ 29,929,992	¥ 30,225,681	¥ 29,379,510
Costs and expenses
Selling, general and administrative	2,964,759	2,976,351	3,090,495
Total costs and expenses	27,487,123	27,758,136	26,979,648
Operating income	2,442,869	2,467,545	2,399,862
Other income (expense)
Interest and dividend income	232,870	225,495	179,541
Interest expense	(32,217)	(28,078)	(27,586)
Foreign exchange gain (loss), net	(79,020)	12,400	22,664
Unrealized gains (losses) on equity securities	(24,600)	(341,054)
Other income (loss), net	14,705	(50,843)	45,948
Total other income (expense)	111,738	(182,080)	220,567
Income before income taxes and equity in earnings of affiliated companies	2,554,607	2,285,465	2,620,429
Provision for income taxes	683,430	659,944	504,406
Equity in earnings of affiliated companies	271,152	360,066	470,083
Net income	2,142,329	1,985,587	2,586,106
Less - Net income attributable to noncontrolling interests	(66,146)	(102,714)	(92,123)
Net income attributable to Toyota Motor Corporation	¥ 2,076,183	¥ 1,882,873	¥ 2,493,983
Net income attributable to Toyota Motor Corporation per common share
- Basic	¥ 735.61	¥ 650.55	¥ 842.00
- Diluted	¥ 729.50	¥ 645.11	¥ 832.78
Product [Member]
Net revenues
Total net revenues	¥ 27,759,749	¥ 28,105,338	¥ 27,420,276
Costs and expenses
Cost of goods and services sold	23,142,744	23,389,495	22,600,474
Financial Service [Member]
Net revenues
Total net revenues	2,170,243	2,120,343	1,959,234
Costs and expenses
Cost of goods and services sold	¥ 1,379,620	¥ 1,392,290	¥ 1,288,679

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Net revenues (Summary of lease income) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Disclosure Of Lease Income [Line Items]
Financial income related to net lease investment	¥ 98,865	¥ 91,703
Operating leases	1,051,804	1,056,080
Total	¥ 1,150,669	¥ 1,147,783

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Short-term borrowings and long-term debt (Short-term Borrowings) (Parenthetical) (Detail)	Mar. 31, 2020	Mar. 31, 2019
Short Term Bank Loans and Notes Payable
Short-term Debt [Line Items]
Short-term borrowings, weighted-average interest rate	2.03%	2.11%
Commercial Paper
Short-term Debt [Line Items]
Short-term borrowings, weighted-average interest rate	1.50%	2.28%

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Segment data (Balance Sheets - Non-financial Services and Financial Services Businesses) (Detail) - JPY (¥) ¥ in Millions		Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2017
Current assets
Cash and cash equivalents		¥ 4,190,518	¥ 3,574,704
Marketable securities	[1]	678,731	1,127,160
Finance receivables, net		6,614,171	6,647,771
Inventories		2,434,918	2,656,396
Prepaid expenses and other current assets		1,236,225	805,964
Total current assets		18,642,531	18,879,237
Noncurrent finance receivables, net		10,423,858	10,281,118
Investments and other assets		13,012,522	12,091,100
Property, plant and equipment		10,601,525	10,685,494	¥ 10,267,673
Total assets		52,680,436	51,936,949	50,308,249
Current liabilities
Short-term borrowings		5,286,026	5,344,973
Current portion of long-term debt		4,574,045	4,254,260
Accrued expenses		2,926,052	3,222,446
Income taxes payable		218,117	320,998
Other current liabilities		1,443,687	1,335,475
Total current liabilities		17,902,377	18,226,938
Long-term liabilities
Long-term debt		10,692,898	10,550,945
Accrued pension and severance costs		978,626	963,406
Other long-term liabilities		821,515	615,599
Total long-term liabilities		13,536,208	13,144,801
Total liabilities		31,438,585	31,371,739
Mezzanine equity	[2]	504,169	498,073
Total Toyota Motor Corporation shareholders' equity		20,060,618	19,348,152
Noncontrolling interests		677,064	718,985
Total shareholders' equity		20,737,682	20,067,137	¥ 19,430,102	¥ 18,183,076
Total liabilities, mezzanine equity and shareholders' equity		52,680,436	51,936,949
Eliminations
Current assets
Total assets		(1,335,121)	(1,092,638)
Long-term liabilities
Total liabilities		(1,335,195)	(1,092,679)
Non Financial Services Businesses
Current assets
Cash and cash equivalents		2,774,498	2,790,212
Marketable securities		648,982	1,108,540
Trade accounts and notes receivable, less allowance for doubtful accounts		2,155,943	2,489,105
Inventories		2,434,916	2,656,396
Prepaid expenses and other current assets		2,413,274	2,118,922
Total current assets		10,427,613	11,163,175
Investments and other assets		12,435,115	11,643,209
Property, plant and equipment		6,293,992	6,178,503
Total assets		29,156,720	28,984,887
Current liabilities
Short-term borrowings		483,871	579,901
Current portion of long-term debt		156,664	173,379
Accounts payable		2,404,385	2,616,143
Accrued expenses		2,789,153	3,075,411
Income taxes payable		201,200	300,703
Other current liabilities		1,773,883	1,755,737
Total current liabilities		7,809,156	8,501,274
Long-term liabilities
Long-term debt		818,371	784,256
Accrued pension and severance costs		963,061	948,377
Other long-term liabilities		1,303,628	1,059,237
Total long-term liabilities		3,085,060	2,791,870
Total liabilities		10,894,216	11,293,144
Financial Services Business
Current assets
Cash and cash equivalents		1,416,020	784,492
Marketable securities		29,749	18,620
Finance receivables, net		6,614,171	6,647,771
Prepaid expenses and other current assets		1,205,912	997,116
Total current assets		9,265,852	8,447,999
Noncurrent finance receivables, net		10,423,858	10,281,118
Investments and other assets		861,594	808,592
Property, plant and equipment		4,307,533	4,506,991
Total assets		24,858,837	24,044,700
Current liabilities
Short-term borrowings		5,432,180	5,113,888
Current portion of long-term debt		4,508,666	4,127,133
Accounts payable		39,226	39,187
Accrued expenses		151,857	161,105
Income taxes payable		16,917	20,295
Other current liabilities		982,892	997,842
Total current liabilities		11,131,738	10,459,450
Long-term liabilities
Long-term debt		10,006,491	9,974,516
Accrued pension and severance costs		15,566	15,029
Other long-term liabilities		725,769	722,279
Total long-term liabilities		10,747,826	10,711,824
Total liabilities		¥ 21,879,564	¥ 21,171,274

[1] Marketable securities and Marketable securities and other securities investments for the fiscal year ended March 31, 2020 include securities loaned of ¥156,051 million and ¥2,061,295 million, respectively.

[2] The total number of authorized shares for common stock and Model AA Class Shares is 10,000,000,000 shares.

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Vehicles and equipment on operating leases (Future Minimum Rentals from Vehicles and Equipment on Operating Leases) (Detail) ¥ in Millions	Mar. 31, 2020 JPY (¥)
Future Minimum Payments Receivable [Line Items]
2021	¥ 802,119
2022	531,098
2023	241,462
2024	59,415
2025	13,455
Thereafter	6,195
Total minimum future rentals	¥ 1,653,744

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Per share amounts (Toyota Motor Corporation Shareholders' Equity Per Share) (Detail) - JPY (¥) ¥ / shares in Units, shares in Thousands, ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Total Toyota Motor Corporation shareholders' equity	¥ 20,060,618	¥ 19,348,152
Common shares issued and outstanding at the end of the year (excluding treasury stock)	2,766,153	2,832,439
Toyota Motor Corporation shareholders' equity per share	¥ 7,252.17	¥ 6,830.92

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Allowance for doubtful accounts and credit losses - Additional Information (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Financing Receivable, Allowance for Credit Losses [Line Items]
Trade accounts and notes receivable, allowance for doubtful accounts, non-current	¥ 66,408	¥ 74,003

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CONSOLIDATED STATEMENTS OF CASH FLOWS - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities
Net income	¥ 2,142,329	¥ 1,985,587	¥ 2,586,106
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation	1,605,383	1,792,375	1,734,033
Provision (reversal) for doubtful accounts and credit losses	142,982	80,065	76,069
Pension and severance costs, less payments	15,699	31,645	4,286
Losses on disposal of fixed assets	56,913	35,902	35,289
Unrealized losses (gains) on securities	20,082	339,472	846
Deferred income taxes	192,147	(86,594)	(237,961)
Equity in earnings of affiliated companies	(271,152)	(360,066)	(470,083)
Changes in operating assets and liabilities, and other
(Increase) decrease in accounts and notes receivable	248,895	(246,845)	(105,435)
Increase in inventories	(114,096)	(166,902)	(171,148)
Increase in other current assets	(447,598)	(102,472)	(149,463)
Increase (decrease) in accounts payable	(76,410)	94,887	46,648
Increase (decrease) in accrued income taxes	(101,739)	(141,329)	238,753
Increase in other current liabilities	40,402	351,122	211,452
Other	136,806	159,750	423,736
Net cash provided by operating activities	3,590,643	3,766,597	4,223,128
Cash flows from investing activities
Additions to finance receivables	(16,896,588)	(15,884,610)	(15,058,516)
Collection of finance receivables	15,641,681	14,834,709	14,013,204
Proceeds from sales of finance receivables	25,781	24,394	33,108
Additions to fixed assets excluding equipment leased to others	(1,407,832)	(1,452,725)	(1,291,117)
Additions to equipment leased to others	(2,187,299)	(2,286,162)	(2,307,590)
Proceeds from sales of fixed assets excluding equipment leased to others	48,751	65,437	71,820
Proceeds from sales of equipment leased to others	1,391,215	1,385,074	1,211,272
Purchases of marketable securities and security investments	(2,413,087)	(1,840,355)	(3,052,916)
Proceeds from sales of marketable securities and security investments	1,146,444	1,134,127	275,574
Proceeds upon maturity of marketable securities and security investments	1,223,962	1,564,671	2,247,964
Payment for additional investments in affiliated companies, net of cash acquired	(14,763)	5,010	(576)
Changes in investments and other assets, and other	290,874	(246,811)	197,681
Net cash used in investing activities	(3,150,861)	(2,697,241)	(3,660,092)
Cash flows from financing activities
Proceeds from issuance of long-term debt	5,691,499	5,000,921	4,793,939
Payments of long-term debt	(4,424,923)	(4,442,232)	(4,452,338)
Increase in short-term borrowings	291,623	164,282	347,738
Dividends paid to Toyota Motor Corporation class shareholders	(11,186)	(8,690)	(6,194)
Dividends paid to Toyota Motor Corporation common shareholders	(618,801)	(636,116)	(620,698)
Dividends paid to noncontrolling interests	(54,945)	(69,367)	(63,764)
Reissuance (repurchase) of treasury stock	(476,129)	(549,637)	(447,818)
Net cash provided by (used in) financing activities	397,138	(540,839)	(449,135)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents	(131,245)	(41,641)	(43,588)
Net increase in cash and cash equivalents and restricted cash and cash equivalents	705,675	486,876	70,313
Cash and cash equivalents and restricted cash and cash equivalents at beginning of year	3,706,515	3,219,639	3,149,326
Cash and cash equivalents and restricted cash and cash equivalents at end of year	¥ 4,412,190	¥ 3,706,515	¥ 3,219,639

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Finance receivables (Summary of Contractual Maturities) (Detail) ¥ in Millions	Mar. 31, 2020 JPY (¥)
Retail Receivables Portfolio Segment
Contractual Maturities [Line Items]
2021	¥ 4,027,784
2022	3,034,099
2023	2,476,975
2024	1,749,643
2025	964,212
Thereafter	542,363
Financing Receivables, Gross , Total	12,795,076
Finance Lease Receivables Portfolio Segment
Contractual Maturities [Line Items]
2021	446,901
2022	335,850
2023	247,378
2024	134,481
2025	48,912
Thereafter	8,801
Financing Receivables, Gross , Total	1,222,323
Wholesale and Other Dealer Loan Receivables Portfolio Segment
Contractual Maturities [Line Items]
2021	2,476,011
2022	308,745
2023	197,597
2024	157,317
2025	107,152
Thereafter	232,791
Financing Receivables, Gross , Total	¥ 3,479,613

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Finance receivables (Impaired Finance Receivables) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	¥ 88,877	¥ 99,338
Unpaid principal balance	88,172	98,565
Retail Receivables Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	30,753	29,537
Unpaid principal balance	30,109	28,788
Finance Lease Receivables Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	103	99
Unpaid principal balance	42	75
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	21,808	32,616
Unpaid principal balance	21,808	32,616
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	24,105	27,415
Unpaid principal balance	24,105	27,415
Wholesale and Other Dealer Loan Receivables Portfolio Segment | Working capital
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	12,108	9,671
Unpaid principal balance	12,108	9,671
Impaired account balances individually evaluated for impairment with an allowance | Wholesale and Other Dealer Loan Receivables Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	29,675	36,183
Unpaid principal balance	29,675	36,183
Individually evaluated allowance	7,171	11,091
Impaired account balances individually evaluated for impairment with an allowance | Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	11,687	18,187
Unpaid principal balance	11,687	18,187
Individually evaluated allowance	2,005	3,141
Impaired account balances individually evaluated for impairment with an allowance | Wholesale and Other Dealer Loan Receivables Portfolio Segment | Real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	7,948	10,545
Unpaid principal balance	7,948	10,545
Individually evaluated allowance	1,003	1,280
Impaired account balances individually evaluated for impairment with an allowance | Wholesale and Other Dealer Loan Receivables Portfolio Segment | Working capital
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	10,040	7,451
Unpaid principal balance	10,040	7,451
Individually evaluated allowance	4,163	6,670
Impaired account balances individually evaluated for impairment without an allowance | Wholesale and Other Dealer Loan Receivables Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	28,346	33,519
Unpaid principal balance	28,346	33,519
Impaired account balances individually evaluated for impairment without an allowance | Wholesale and Other Dealer Loan Receivables Portfolio Segment | Wholesale
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	10,121	14,429
Unpaid principal balance	10,121	14,429
Impaired account balances individually evaluated for impairment without an allowance | Wholesale and Other Dealer Loan Receivables Portfolio Segment | Real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	16,157	16,870
Unpaid principal balance	16,157	16,870
Impaired account balances individually evaluated for impairment without an allowance | Wholesale and Other Dealer Loan Receivables Portfolio Segment | Working capital
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	2,068	2,220
Unpaid principal balance	2,068	2,220
Impaired Account Balances Aggregated and Evaluated for Impairment
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	30,856	29,636
Unpaid principal balance	30,151	28,863
Impaired Account Balances Aggregated and Evaluated for Impairment | Retail Receivables Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	30,753	29,537
Unpaid principal balance	30,109	28,788
Impaired Account Balances Aggregated and Evaluated for Impairment | Finance Lease Receivables Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded investment	103	99
Unpaid principal balance	¥ 42	¥ 75

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Affiliated companies and variable interest entities (Entities Comprising Significant Portion of Toyota's Investment in Affiliated Companies and Percentage of Ownership) (Detail)	Mar. 31, 2020	Mar. 31, 2019
Denso Corporation
Schedule of Equity Method Investments [Line Items]
Percentage of ownership	24.50%	24.50%
Subaru Corporation
Schedule of Equity Method Investments [Line Items]
Percentage of ownership	20.00%
Toyota Industries Corporation
Schedule of Equity Method Investments [Line Items]
Percentage of ownership	24.90%	24.90%
Aisin Seiki Co Ltd
Schedule of Equity Method Investments [Line Items]
Percentage of ownership	24.90%	24.90%
Toyota Tsusho Corporation
Schedule of Equity Method Investments [Line Items]
Percentage of ownership	22.00%	22.00%

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Other financial instruments (Tables)

12 Months Ended

Mar. 31, 2020

Estimated Fair Value of Toyota's Financial Instrument, Excluding Marketable Securities, Other Securities Investments, Investments and Other Assets in Affiliated Companies and Derivative Financial Instruments

The following table summarizes the estimated fair values of Toyota’s financial instruments, excluding marketable securities, other securities investments, investments and other assets in affiliated companies and derivative financial instruments. See note 28 to the consolidated financial statements for three levels of input which are used to measure fair value.

	Yen in millions
	March 31, 2019
				Estimated fair value
	Carrying amount			Level 1		Level 2			Level 3			Total
Assets (Liabilities)
Cash and cash equivalents		3,574,704			2,980,504		594,200			—			3,574,704
Time deposits		1,126,352			—		1,126,352			—			1,126,352
Total finance receivables, net		15,450,745			—		—			15,668,542			15,668,542
Other receivables		568,156			—		—			568,156			568,156
Short-term borrowings		(5,344,973	)		—		(5,285,807	)		(59,166	)		(5,344,973	)
Long-term debt including the current portion		(14,786,184	)		—		(12,786,541	)		(1,833,623	)		(14,620,164	)

	Yen in millions
	March 31, 2020
				Estimated fair value
	Carrying amount			Level 1		Level 2			Level 3			Total
Assets (Liabilities)
Cash and cash equivalents		4,190,518			3,598,318		592,200			—			4,190,518
Time deposits		828,220			—		828,220			—			828,220
Total finance receivables, net		15,511,294			—		—			15,703,737			15,703,737
Other receivables		564,854			—		—			564,854			564,854
Short-term borrowings		(5,286,026	)		—		(5,274,071	)		(11,955	)		(5,286,026	)
Long-term debt including the current portion		(15,238,006	)		—		(12,644,187	)		(1,966,646	)		(14,610,833	)

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Accumulated other comprehensive income (Tables)

12 Months Ended

Mar. 31, 2020

Components of Accumulated Other Comprehensive Income (Loss) and Related Changes, Net of Taxes

Changes in accumulated other comprehensive income (loss) are as follows:

	Yen in millions
	Foreign currency translation adjustments			Unrealized gains (losses) on securities			Pension liability adjustments			Accumulated other comprehensive income (loss)
Balance at March 31, 2017		(560,108	)		1,426,003			(224,973	)		640,922
Other comprehensive income (loss) before reclassifications, net of taxes of ¥(3,624) million, ¥38,539 million, ¥(7,568) million and ¥27,347 million		(113,942	)		(72,501	)		15,814			(170,629	)
Reclassifications, net of taxes of ¥— million, ¥9,729 million, ¥(2,500) million and ¥7,229 million		(6,664	)		(22,058	)		6,501			(22,221	)
Other comprehensive income (loss), net of tax		(120,606	)		(94,559	)		22,315			(192,850	)
Less - Other comprehensive income attributable to noncontrolling interests		1,629			(2,022	)		(580	)		(973	)
Equity transaction with noncontrolling interests and other		—			162			(11,562	)		(11,400	)
Balance at March 31, 2018		(679,085	)		1,329,584			(214,800	)		435,699
Effect of change in accounting policy		105			(1,309,725	)		—			(1,309,620	)
Other comprehensive income (loss) before reclassifications, net of taxes of ¥8,703 million, ¥3,382 million, ¥25,795 million and ¥37,880 million		25,639			(6,139	)		(62,288	)		(42,788	)
Reclassifications, net of taxes of ¥— million, ¥6,963 million, ¥(2,892) million and ¥4,071 million		1,377			(15,026	)		7,452			(6,197	)
Other comprehensive income (loss), net of tax		27,016			(21,165	)		(54,836	)		(48,985	)
Less - Other comprehensive income attributable to noncontrolling interests		2,432			54			3,770			6,256
Balance at March 31, 2019		(649,532	)		(1,252	)		(265,866	)		(916,650	)
Other comprehensive income (loss) before reclassifications, net of taxes of ¥1,865 million, ¥(50,969) million, ¥26,259 million and ¥(22,845) million		(333,854	)		113,978			(66,203	)		(286,079	)
Reclassifications, net of taxes of ¥— million, ¥(1,960) million, ¥(2,400) million and ¥(4,360) million		—			4,385			6,007			10,392
Other comprehensive income (loss), net of tax		(333,854	)		118,363			(60,196	)		(275,687	)
Less - Other comprehensive income attributable to noncontrolling interests		20,668			40			(440	)		20,268
Equity transaction with noncontrolling interests and other		3,432			(124	)		2,488			5,796
Balance at March 31, 2020		(959,286	)		117,027			(324,014	)		(1,166,273	)

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

Reclassifications for the years ended March 31, 2018, 2019 and 2020 consist of the following:

	Yen in millions
	For the years ended March 31,									Affected line items in the consolidated statements of income
	2018			2019			2020
Foreign currency translation adjustments:
		(6,664	)		1,377			—		Other income (loss), net
		(6,664	)		1,377			—		Income before income taxes and equity in earnings of affiliated companies
		(6,664	)		1,377			—		Net income
Unrealized gains (losses) on securities:
		(4,567	)		1,243			(93	)	Financing operations
		(25,247	)		(22,374	)		8,823		Foreign exchange gain (loss), net
		(1,993	)		(827	)		(2,484	)	Other income (loss), net
		(31,807	)		(21,958	)		6,246		Income before income taxes and equity in earnings of affiliated companies
		9,729			6,963			(1,960	)	Provision for income taxes
		20			(31	)		99		Equity in earnings of affiliated companies
		(22,058	)		(15,026	)		4,385		Net income
Pension liability adjustments:
Recognized net actuarial loss		12,914			14,029			12,611		*1
Amortization of prior service costs		(3,913	)		(3,685	)		(4,204	)	*1
		9,001			10,344			8,407		Income before income taxes and equity in earnings of affiliated companies
		(2,500	)		(2,892	)		(2,400	)	Provision for income taxes
		6,501			7,452			6,007		Net income
Total reclassifications, net of tax		(22,221	)		(6,197	)		10,392

Amounts of reclassifications in parentheses indicate gains in the consolidated statements of income.

*1: Reclassifications of pension liability adjustments are affected under Cost and expenses for the year ended March 31, 2018 and Other income (loss), net for the years ended March 31, 2019 and 2020, respectively, in the consolidated statements of income.

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Other commitments and contingencies, concentrations and factors that may affect future operations

12 Months Ended

Mar. 31, 2020

Other commitments and contingencies, concentrations and factors that may affect future operations

24. Other commitments and contingencies, concentrations and factors that may affect future operations:

Commitments -

Commitments outstanding as of March 31, 2020 for the purchase of property, plant and equipment, other assets and services totaled ¥362,071 million.

Guarantees -

Toyota enters into contracts with Toyota dealers to guarantee customers’ payments of their installment payables that arise from installment contracts between customers and Toyota dealers, as and when requested by Toyota dealers. Guarantee periods are set to match maturity of installment payments, and as of March 31, 2020, range from 1 month to 8 years; however, they are generally shorter than the useful lives of products sold. Toyota is required to execute its guarantee primarily when customers are unable to make required payments.

The maximum potential amount of future payments as of March 31, 2020 is ¥3,333,385 million. Liabilities for guarantees totaling ¥10,615 million have been provided as of March 31, 2020. Under these guarantee contracts, Toyota is entitled to recover any amount paid by Toyota from the customers whose original obligations Toyota has guaranteed.

Legal proceedings -

From time-to-time, Toyota issues vehicle recalls and takes other safety measures including safety campaigns relating to its vehicles. Since 2009, Toyota has issued safety campaigns related to the risk of floor mat entrapment of accelerator pedals and vehicle recalls related to slow-to-return or sticky accelerator pedals. Personal injury and wrongful death claims involving allegations of unintended acceleration are still pending in consolidated proceedings in federal and California state courts, as well as in individual cases in various other states. The judges in the consolidated federal action and the consolidated California state action have approved an Intensive Settlement Process (“ISP”) for such claims in those actions. Under the ISP, all individual claims within the consolidated actions remain pending completion of a process to assess whether they can be resolved on terms acceptable to the parties. Cases not resolved after completion of the ISP will then proceed to discovery and toward trial. Toyota has offered the ISP to plaintiffs in individual cases as well. While the ISP is ongoing, a majority of the claims in the consolidated actions and the individual cases are in settlement discussions or have been settled. Toyota believes that the remaining claims in the consolidated actions and the individual cases will not have a material effect on Toyota’s financial position, results of operations or cash flows.

Toyota has been named as a defendant in 33 economic loss class action lawsuits in the United States, which, together with similar lawsuits against Takata and other automakers, have been made part of a multi-district litigation proceeding in the United States District Court for the Southern District of Florida, arising out of allegations that airbag inflators manufactured by Takata are defective. Toyota has reached a settlement with the plaintiffs in the United States economic loss class actions. The court approved the settlement on October 31, 2017, and subsequent appeals have been withdrawn, making the settlement final. The economic loss class action lawsuits against Toyota have been dismissed. Toyota and other automakers have also been named in certain class actions filed in Mexico, Canada, Australia, Israel and Brazil, as well as some other actions by states or territories of the United States. The remaining actions in Mexico, Australia, Israel, Brazil and some other actions by states or territories of the United States are being litigated.

Toyota has self-reported a process gap in fulfilling certain emissions defect information reporting requirements of the U.S. Environmental Protection Agency (“EPA”) and California Air Resources Board, including updates on its repair completion rates for recalled emissions components and certain other reports

concerning emissions related defects. Toyota is cooperating with civil investigations by the EPA and the Civil Division of the Southern District of New York (“SDNY”) on this reporting issue and continues to have discussions with the EPA and the SDNY. The investigations could result in the imposition of civil penalties, fines or other sanctions, or litigation by the SDNY or the EPA.

Toyota also has various other pending legal actions and claims, including without limitation personal injury and wrongful death lawsuits and claims in the United States, and is subject to government investigations from time to time.

Beyond the amounts accrued with respect to all aforementioned matters, Toyota is unable to estimate a range of reasonably possible loss, if any, for the pending legal matters because (i) many of the proceedings are in evidence gathering stages, (ii) significant factual issues need to be resolved, (iii) the legal theory or nature of the claims is unclear, (iv) the outcome of future motions or appeals is unknown and/or (v) the outcomes of other matters of these types vary widely and do not appear sufficiently similar to offer meaningful guidance. Therefore, for all of the aforementioned matters, which Toyota is in discussions to resolve, any losses that are beyond the amounts accrued could have an adverse effect on Toyota’s financial position, results of operations or cash flows.

The parent company has a concentration of labor supply in employees working under collective bargaining agreements and a substantial portion of these employees are working under the agreement that will expire on December 31, 2020.

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Fair value measurements

12 Months Ended

Mar. 31, 2020

Fair value measurements

28. Fair value measurements:

In accordance with U.S.GAAP, Toyota classifies fair value into three levels of input as follows which are used to measure it.

Level 1:	Quoted prices in active markets for identical assets or liabilities
Level 2:	Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; valuation of assets or liabilities using inputs, other than quoted prices, that are observable
Level 3:	Valuation of assets or liabilities using unobservable inputs which reflect the reporting entity’s assumptions

The following table summarizes the fair values of the assets and liabilities measured at fair value on a recurring basis as of March 31, 2019 and 2020. Transfers between levels of the fair value are recognized at the end of their respective reporting periods:

	Yen in millions
	March 31, 2019
	Level 1		Level 2			Level 3		Total
Assets
Cash equivalents		249,193		594,200			—		843,393
Time deposits		—		520,000			—		520,000
Marketable securities and other securities investments
Public and corporate bonds		4,378,543		1,452,475			15,171		5,846,189
Common stocks		2,154,951		—			—		2,154,951
Other		189,389		6,007			—		195,396
Investments measured at net asset value		—		—			—		98,451
Derivative financial instruments		—		200,256			77		200,333
Total		6,972,076		2,772,938			15,248		9,858,713
Liabilities
Derivative financial instruments		—		(231,915	)		—		(231,915	)
Total		—		(231,915	)		—		(231,915	)

	Yen in millions
	March 31, 2020
	Level 1		Level 2			Level 3		Total
Assets
Cash equivalents		711,106		592,200			—		1,303,306
Time deposits		—		350,000			—		350,000
Marketable securities and other securities investments
Public and corporate bonds		3,214,773		2,183,695			12,831		5,411,299
Common stocks		1,895,690		—			—		1,895,690
Other		194,085		27,477			—		221,562
Investments measured at net asset value		—		—			—		97,687
Derivative financial instruments		—		503,826			—		503,826
Total		6,015,654		3,657,198			12,831		9,783,370
Liabilities
Derivative financial instruments		—		(437,008	)		—		(437,008	)
Total		—		(437,008	)		—		(437,008	)

Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

The following is description of the assets and liabilities measured at fair value, information about the valuation techniques used to measure fair value, key inputs and significant assumptions:

Cash equivalents and time deposits -

Cash equivalents include money market funds and other investments with original maturities of three months or less. Cash equivalents classified in Level 2 include negotiable certificate of deposit with original maturities of three months or less. These are measured at fair value using primarily observable interest rates in the market. Time deposits consist of negotiable certificates of deposit with original maturities over three months. These are measured at fair value using primarily observable interest rates in the market.

Marketable securities and other securities investments -

Marketable securities and other securities investments include public and corporate bonds, common stocks and other investments. Public and corporate bonds include government bonds. Japanese bonds and foreign bonds including U.S., European and other bonds represent 17% and 83% (as of March 31, 2019) and 20% and 80% (as of March 31, 2020) of public and corporate bonds, respectively. Listed stocks on the Japanese stock markets represent 91% and 90% of common stocks as of March 31, 2019 and 2020, respectively. Toyota uses primarily quoted market prices for identical assets to measure fair value of these securities.

Derivative financial instruments -

See note 21 to the consolidated financial statements about derivative financial instruments. Toyota primarily estimates the fair value of derivative financial instruments using industry-standard valuation models that require observable inputs including interest rates and foreign exchange rates, and the contractual terms. The usage of these models does not require significant judgment to be applied. These derivative financial instruments are classified in Level 2. In other certain cases when market data is not available, key inputs to the fair value

measurement include quotes from counterparties, and other market data. Toyota assesses the reasonableness of changes of the quotes using observable market data. These derivative financial instruments are classified in Level 3. Toyota’s derivative fair value measurements consider assumptions about counterparty and Toyota’s own non-performance risk, using such as credit default probabilities.

The following table summarizes the changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the periods ended March 31, 2018, 2019 and 2020:

	Yen in millions
	For the year ended March 31, 2018
	Marketable securities and other securities investments			Derivative financial instruments			Total
Balance at beginning of year		8,947			(7,522	)		1,425
Total gains (losses)
Included in income (loss)		17			805			822
Included in other comprehensive income (loss)		(12	)		—			(12	)
Purchases and issuances		3,860			—			3,860
Settlements		(4,739	)		4,320			(419	)
Other		(585	)		185			(400	)
Balance at end of year		7,488			(2,212	)		5,276
	Yen in millions
	For the year ended March 31, 2019
	Marketable securities and other securities investments			Derivative financial instruments			Total
Balance at beginning of year		7,488			(2,212	)		5,276
Total gains (losses)
Included in income (loss)		1			3,169			3,170
Included in other comprehensive income (loss)		82			—			82
Purchases and issuances		5,254			—			5,254
Settlements		(2,875	)		(784	)		(3,659	)
Other		337			(96	)		241
Balance at end of year		10,287			77			10,364
	Yen in millions
	For the year ended March 31, 2020
	Marketable securities and other securities investments			Derivative financial instruments			Total
Balance at beginning of year		10,287			77			10,364
Total gains (losses)
Included in income (loss)		(346	)		—			(346	)
Included in other comprehensive income (loss)		(671	)		—			(671	)
Purchases and issuances		5,305			—			5,305
Settlements		(1,547	)		(77	)		(1,624	)
Other		(197	)		—			(197	)
Balance at end of year		12,831			—			12,831

“Included in income (loss)” in marketable securities and other securities investments and derivative financial instruments are included in “Other income (loss), net” and “Cost of financing operations” in the accompanying consolidated statements of income, respectively.

In the reconciliation table above, derivative financial instruments are presented net of assets and liabilities. “Other” includes the currency translation adjustments for the years ended March 31, 2018, 2019 and 2020.

As of March 31, 2020, the Level 3 assets and liabilities measured at fair value on a recurring basis are not significant.

Certain assets and liabilities are measured at fair value on a nonrecurring basis. During the years ended March 31, 2019 and 2020, Toyota measured certain finance receivables at fair value of ¥58,611 million and ¥50,850 million based on the collateral value, resulting in loss of ¥3,305 million and gain of ¥3,761 million, respectively. This fair value measurement on a nonrecurring basis is classified in Level 3. See note 22 to the consolidated financial statements for the fair value measurement. These Level 3 financial assets are not significant.

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Shareholders' equity - Additional Information (Detail) - JPY (¥) ¥ / shares in Units, ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Stockholders Equity Note [Line Items]
Annual dividends per common share	¥ 220	¥ 220	¥ 220
Percentage of distributions from surplus appropriated as capital or retained earnings reserve	10.00%
Percentage of total amount of capital reserve and retained earnings reserves to stated capital	25.00%
Retained earnings, reserve	¥ 201,490	¥ 198,605
Retained earnings related to the equity in undistributed earnings of companies accounted for by the equity method	3,063,866
Parent Company
Stockholders Equity Note [Line Items]
Retained earnings, available for dividend payments	10,276,666	¥ 9,958,581
Cash dividends included in retained earnings at year-end	¥ 331,938
Cash dividends per common share	¥ 120

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Income taxes (Summary of Gross Unrecognized Tax Benefits Changes) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Income Tax Contingency [Line Items]
Balance at beginning of year	¥ 17,268	¥ 21,564	¥ 21,553
Additions based on tax positions related to the current year	2,199	1,212	612
Additions for tax positions of prior years	127	1,304	13,954
Reductions for tax positions of prior years	(9,586)	(819)	(13,217)
Reductions for tax positions related to lapse of statute of limitations	0	0	0
Reductions for settlements	(298)	(6,696)	(26)
Other	(1,363)	703	(1,312)
Balance at end of year	¥ 8,347	¥ 17,268	¥ 21,564

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Marketable securities and other securities investments

12 Months Ended

Mar. 31, 2020

Marketable securities and other securities investments

5. Marketable securities and other securities investments:

Marketable securities and other securities investments include public and corporate bonds and common stocks for which the aggregate cost, gross unrealized gains and losses and fair value are as follows:

	Yen in millions
	March 31, 2019
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Available-for-sale
Public and corporate bonds		5,837,423		82,022		73,256		5,846,189
Other		289,285		5,406		845		293,846
Total		6,126,708		87,428		74,101		6,140,035
Securities not practicable to determine fair value
Public and corporate bonds		32,922

	Yen in millions
	March 31, 2020
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Available-for-sale
Public and corporate bonds		5,237,131		196,260		22,092		5,411,299
Other		313,014		9,651		3,416		319,249
Total		5,550,145		205,911		25,508		5,730,548
Securities not practicable to determine fair value
Public and corporate bonds		36,551

Public and corporate bonds include government bonds, and “Other” includes investment trusts.

Unrealized losses continuing over a 12 month period or more in the aggregate were not material as of March 31, 2019 and 2020.

As of March 31, 2019 and 2020, maturities of public and corporate bonds included in available-for-sale are mainly from 1 to 10 years.

Proceeds from sales of available-for-sale securities was ¥248,046 million for the year ended March 31, 2018. On those sales, gross realized gains was ¥7,684 million and gross realized losses was ¥278 million.

During the year ended March 31, 2018, Toyota recognized impairment losses on available-for-sale securities of ¥846 million, which was included in “Other income (loss), net” and other in the accompanying consolidated statements of income.

As of March 31, 2019 and 2020, the carrying amount of equity securities with readily determinable fair values were ¥2,154,951 million and ¥1,895,690 million, respectively.

Gain and losses related to equity securities are as follows:​​​​​​​

	Yen in millions
	For the years ended March 31,
	2019			2020
Net gains (losses) recognized on equity securities		(334,636	)		(3,837	)
Less: Net gains (losses) recognized on equity securities sold		4,836			16,245
Unrealized gains (losses) on equity securities		(339,472	)		(20,082	)

Toyota did not recognize any material impairment or other adjustments on equity securities without readily determinable fair values for the years ended March 31, 2019 and 2020. As of March 31, 2019 and 2020, the carrying amount of equity securities without readily determinable fair values were ¥279,178 and ¥364,593 million, respectively.

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Lease commitments (Analysis of Leased Assets Under Capital Leases) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Class of property
Less - Accumulated depreciation	¥ (25,036)	¥ (30,016)
Capital Leases, Balance Sheet, Assets by Major Class, Net, Total	60,091	17,339
Building
Class of property
Capital leased assets, gross	22,790	18,519
Machinery and equipment
Class of property
Capital leased assets, gross	¥ 62,337	¥ 28,836

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Nature of operations

12 Months Ended

Mar. 31, 2020

Nature of operations

1. Nature of operations:

Toyota and its affiliated companies are primarily engaged in the design, manufacture, and sale of sedans, minivans, compact cars, sport-utility vehicles, trucks and related parts and accessories throughout the world. In addition, Toyota and its affiliated companies provide financing, vehicle leasing and certain other financial services primarily to its dealers and their customers to support the sales of vehicles and other products manufactured by Toyota and its affiliated companies.

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Employee benefit plans (Summary of Fair Value of Classes of Plan Assets) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2017
Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	¥ 868,901	¥ 882,784	¥ 815,483
Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	1,513,031	1,600,491	1,612,879
Equity securities | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	298,915	339,261
Equity securities | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	603,864	723,171
Equity securities | Common stocks | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	111,997	123,875
Equity securities | Common stocks | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	467,885	531,159
Equity securities | Commingled funds | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	186,918	215,386
Equity securities | Commingled funds | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	135,979	192,012
Debt securities | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	352,352	305,931
Debt securities | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	440,250	440,013
Debt securities | Commingled funds | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	278,394	286,783
Debt securities | Government bonds | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	181,702	141,054
Debt securities | Government bonds | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	86,212	98,578
Debt securities | Other | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	170,650	164,877
Debt securities | Other | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	75,644	54,652
Insurance Contracts | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	226,043	226,093
Other | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	63,086	63,005
Other | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	155,965	126,889
Investments measured at net asset value | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	154,548	174,587
Investments measured at net asset value | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	86,909	84,325
Level 1 | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	304,124	275,221
Level 1 | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	644,083	713,945
Level 1 | Equity securities | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	111,997	123,875
Level 1 | Equity securities | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	467,885	531,159
Level 1 | Equity securities | Common stocks | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	111,997	123,875
Level 1 | Equity securities | Common stocks | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	467,885	531,159
Level 1 | Debt securities | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	181,702	141,054
Level 1 | Debt securities | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	86,212	98,578
Level 1 | Debt securities | Government bonds | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	181,702	141,054
Level 1 | Debt securities | Government bonds | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	86,212	98,578
Level 1 | Other | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	10,425	10,292
Level 1 | Other | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	89,986	84,208
Level 2 | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	381,978	405,073
Level 2 | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	775,840	797,979
Level 2 | Equity securities | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	186,918	215,386
Level 2 | Equity securities | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	135,979	192,012
Level 2 | Equity securities | Commingled funds | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	186,918	215,386
Level 2 | Equity securities | Commingled funds | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	135,979	192,012
Level 2 | Debt securities | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	170,650	164,877
Level 2 | Debt securities | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	354,038	341,435
Level 2 | Debt securities | Commingled funds | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	278,394	286,783
Level 2 | Debt securities | Other | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	170,650	164,877
Level 2 | Debt securities | Other | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	75,644	54,652
Level 2 | Insurance Contracts | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	226,043	226,093
Level 2 | Other | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	24,410	24,810
Level 2 | Other | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	59,780	38,439
Level 3 | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	28,251	27,903
Level 3 | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	6,199	4,242	¥ 19	¥ 577
Level 3 | Other | Foreign Plans
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	28,251	27,903
Level 3 | Other | Japan
Schedule of Pension and Other Postretirement Plan Assets by Fair Value [Line Items]
Plan assets	¥ 6,199	¥ 4,242

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Vehicles and equipment on operating leases

12 Months Ended

Mar. 31, 2020

Vehicles and equipment on operating leases

9. Vehicles and equipment on operating leases:

Vehicles and equipment on operating leases consist of the following:

	Yen in millions
	March 31,
	2019			2020
Vehicles		6,383,788			6,153,695
Equipment		14,499			17,148
Less - Deferred income and other		(259,124	)		(241,610	)
		6,139,163			5,929,233
Less - Accumulated depreciation		(1,428,779	)		(1,374,172	)
Less - Allowance for credit losses		(13,314	)		(12,171	)
Vehicles and equipment on operating leases, net		4,697,070			4,542,890

Rental income from vehicles and equipment on operating leases was ¥927,443 million, ¥959,497 million and ¥945,091 million for the years ended March 31, 2018, 2019 and 2020, respectively. Future minimum rentals from vehicles and equipment on operating leases are due in installments as follows:

Years ending March 31,	Yen in millions
2021		802,119
2022		531,098
2023		241,462
2024		59,415
2025		13,455
Thereafter		6,195
Total minimum future rentals		1,653,744

The future minimum rentals as shown above should not be considered indicative of future cash collections.

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Derivative financial instruments (Notional Amounts of Derivative Financial Instruments) (Detail) - Undesignated derivative financial instruments - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative financial instruments, notional amount	¥ 24,226,842	¥ 25,007,461
Interest rate and currency swap agreements
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative financial instruments, notional amount	20,310,018	21,001,883
Foreign exchange forward and option contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative financial instruments, notional amount	¥ 3,916,824	¥ 4,005,578

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Employee benefit plans (Information Regarding Defined Benefit Plans) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Japan
Change in benefit obligation
Benefit obligation at beginning of year	¥ 2,100,073	¥ 2,019,310
Service cost	93,298	99,838	¥ 88,964
Interest cost	10,514	12,967	13,252
Plan participants' contributions	1,014	974
Plan amendments	(988)	(1,067)
Net actuarial (gain) loss	(48,602)	67,391
Acquisition and other	(55,070)	(20,786)
Benefits paid	(48,796)	(78,554)
Benefit obligation at end of year	2,051,443	2,100,073	2,019,310
Change in plan assets
Balance at beginning of year	1,600,491	1,612,879
Actual return on plan assets	(70,503)	3,208
Acquisition and other	(41,105)	(13,705)
Employer contributions	38,144	41,276
Plan participants' contributions	1,014	974
Benefits paid	(15,010)	(44,141)
Balance at end of year	1,513,031	1,600,491	1,612,879
Funded status	538,412	499,582
Foreign Plans
Change in benefit obligation
Benefit obligation at beginning of year	1,186,897	1,097,981
Service cost	46,869	46,930	35,887
Interest cost	40,335	40,708	37,817
Plan participants' contributions	2,018	1,045
Plan amendments	3,308	13
Net actuarial (gain) loss	(2,865)	7,755
Acquisition and other	(28,548)	21,634
Benefits paid	(40,200)	(29,169)
Benefit obligation at end of year	1,207,814	1,186,897	1,097,981
Change in plan assets
Balance at beginning of year	882,784	815,483
Actual return on plan assets	13,421	59,237
Acquisition and other	(28,068)	12,696
Employer contributions	29,407	18,952
Plan participants' contributions	2,018	1,045
Benefits paid	(30,661)	(24,629)
Balance at end of year	868,901	882,784	¥ 815,483
Funded status	¥ 338,913	¥ 304,113

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Employee benefit plans (Projected Benefit Obligation, Accumulated Benefit Obligation and Fair Value of Plan Assets for which Accumulated Benefit Obligations Exceed Plan Assets) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Japan
Schedule of Pension Plans with Projected and Accumulated Benefit Obligations in Excess of Plan Assets [Line Items]
Projected benefit obligation	¥ 846,068	¥ 878,009
Fair value of plan assets	188,241	203,277
Accumulated benefit obligation	783,561	847,017
Fair value of plan assets	155,345	198,315
Foreign Plans
Schedule of Pension Plans with Projected and Accumulated Benefit Obligations in Excess of Plan Assets [Line Items]
Projected benefit obligation	1,025,234	681,025
Fair value of plan assets	678,522	357,583
Accumulated benefit obligation	403,810	515,918
Fair value of plan assets	¥ 93,717	¥ 215,006

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Shareholders' equity

12 Months Ended

Mar. 31, 2020

Shareholders' equity

17. Shareholders’ equity:

Changes in the number of shares of common stock issued have resulted from the following:

	For the years ended March 31,
	2018		2019		2020
Common stock issued
Balance at beginning of year		3,262,997,492		3,262,997,492		3,262,997,492
Issuance during the year		—		—		—
Purchase and retirement		—		—		—
Balance at end of year		3,262,997,492		3,262,997,492		3,262,997,492

Annual dividends per common share were ¥220, ¥220 and ¥220 for the years ended March 31, 2018, 2019 and 2020, respectively.

The Companies Act provides that an amount equal to 10% of distributions from surplus paid by the parent company and its Japanese subsidiaries be appropriated as a capital reserve or a retained earnings reserve. No further appropriations are required when the total amount of the capital reserve and the retained earnings reserve reaches 25% of stated capital.

The retained earnings reserve included in retained earnings as of March 31, 2019 and 2020 were ¥198,605 million and ¥201,490 million, respectively. The Companies Act provides that the retained earnings reserve of the parent company and its Japanese subsidiaries is restricted and unable to be used for dividend payments, and is excluded from the calculation of the profit available for dividend.

The amounts of statutory retained earnings of the parent company available for dividend payments to shareholders were ¥9,958,581 million and ¥10,276,666 million as of March 31, 2019 and 2020, respectively. In accordance with customary practice in Japan, the distributions from surplus are not accrued in the financial statements for the corresponding period, but are recorded in the subsequent accounting period after shareholders’ approval has been obtained. Retained earnings at March 31, 2020 include amounts representing year-end cash dividends of ¥331,938 million, ¥120 per common share, which were resolved at the Meeting of the Board of Directors held on May 12, 2020.

Retained earnings at March 31, 2020 include ¥3,063,866 million relating to equity in undistributed earnings of affiliated companies accounted for by the equity method.

The repurchase, reissuance and retirement of treasury stock for the years ended March 31, 2018, 2019 and 2020 are as follows:

For the year ended March 31, 2018

Repurchase of treasury stock

Reason for repurchasing treasury stock -

The repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.

Details of matters relating to repurchase -

Number of common shares repurchased	73,708,400 shares
Total purchase price for repurchase of shares	¥499,989 million

Reissuance of treasury stock

Reason for reissuing treasury stock -

On August 4, 2017, the parent company and Mazda Motor Corporation (Mazda) signed an agreement to enter a business and capital alliance, with the aim of further strengthening their lasting partnership. The parent company acquired common stock newly issued by Mazda through a third-party allotment. Mazda acquired the parent company’s shares that were equivalent in value to the Mazda shares through a disposition of treasury stock involving a third-party allotment implemented by the parent company.

Details of matters relating to reissuance -

Number of common shares reissued	8,293,300 shares
Amount of proceeds	¥50,000 million

For the year ended March 31, 2019

Repurchase of treasury stock

Reason for repurchasing treasury stock -

The repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.

Details of matters relating to repurchase -

Number of common shares repurchased	77,622,700 shares
Total purchase price for repurchase of shares	¥549,986 million

For the year ended March 31, 2020

Repurchase of treasury stock

Reason for repurchasing treasury stock -

The repurchase was made to return capital to shareholders in addition to promoting capital efficiency and agile capital policy in view of the business environment.

Details of matters relating to repurchase -

Number of common shares repurchased	69,532,900 shares
Total purchase price for repurchase of shares	¥500,139 million

Reissuance of treasury stock

Reason for reissuing treasury stock -

On May 9, 2019, the parent company resolved to conclude contracts aimed toward the establishment of a new joint venture, Prime Life Technologies, related to a town development business with Panasonic. Pursuant to these contracts, the parent company, THC and Misawa Homes conducted a share exchange in which common shares of Toyota were allotted in exchange for common shares of Misawa Homes so that THC, a consolidated subsidiary of the parent company, will become the wholly owning parent company resulting from the share exchange and Misawa Homes, a consolidated subsidiary of THC, will become the wholly owned subsidiary resulting from the share exchange.

Details of matters relating to reissuance -

Number of common shares reissued	3,269,500 shares
Amount of reissuance	¥24,181 million

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Product warranties and recalls and other safety measures

12 Months Ended

Mar. 31, 2020

Product warranties and recalls and other safety measures

13. Product warranties and recalls and other safety measures:

Toyota provides product warranties for certain defects mainly resulting from manufacturing based on warranty contracts with its customers at the time of sale of products. Toyota accrues estimated warranty costs to be incurred in the future in accordance with the warranty contracts. In addition to product warranties, Toyota initiates recalls and other safety measures to repair or to replace parts which might be expected to fail from products safety perspectives or customer satisfaction standpoints. Toyota accrues for costs of recalls and other safety measures based on the amount estimated from historical experience.

Liabilities for product warranties and liabilities for recalls and other safety measures have been combined into a single table showing an aggregate liability for quality assurances due to the fact that both are liabilities for costs to repair or replace defects of vehicles and the amounts incurred for recalls and other safety measures may affect the amounts incurred for product warranties and vice versa.

Liabilities for quality assurances are included in “Accrued expenses” in the consolidated balance sheets.

The net changes in liabilities for quality assurances above for the years ended March 31, 2018, 2019 and 2020 consist of the following:

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Liabilities for quality assurances at beginning of year		1,696,938			1,702,312			1,769,275
Payments made during year		(586,943	)		(489,461	)		(490,117	)
Provision for quality assurances		649,377			565,012			314,494
Changes relating to pre-existing quality assurances		(56,769	)		(1,411	)		(34,345	)
Other		(291	)		(7,177	)		(6,194	)
Liabilities for quality assurances at end of year		1,702,312			1,769,275			1,553,113

“Other” primarily includes the impact of currency translation adjustments and the impact of consolidation and deconsolidation of certain entities due to changes in ownership interest.

The table below shows the net changes in liabilities for recalls and other safety measures which are comprised in liabilities for quality assurances above for the years ended March 31, 2018, 2019 and 2020.

	Yen in millions
	For the years ended March 31,
	2018			2019			2020
Liabilities for recalls and other safety measures at beginning of year		1,275,200			1,275,256			1,302,309
Payments made during year		(456,177	)		(396,971	)		(363,708	)
Provision for recalls and other safety measures		454,391			428,613			169,134
Other		1,842			(4,589	)		(3,024	)
Liabilities for recalls and other safety measures at end of year		1,275,256			1,302,309			1,104,711

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Lease commitments (Future Minimum Lease Payments Under Finance And Operating Leases Together with Present Value of Net Minimum Lease Payments) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Schedule of Future Minimum Lease Payments for Finance Leases [Abstract]
2021	¥ 6,378
2022	4,320
2023	3,124
2024	2,842
2025	2,525
Thereafter	17,629
Total minimum lease payments	36,818
Less - Amount representing interest	(7,881)
Present value of net minimum lease payments	28,937
Current liability	5,460
Noncurrent liability	23,477
Total minimum lease present value	28,937
Schedule of Future Minimum Lease Payments for Operating Leases [Abstract]
2021	41,618	¥ 16,078
2022	33,648	13,396
2023	26,890	11,862
2024	22,640	10,219
2025	20,437	8,034
Thereafter	165,454	32,598
Total minimum lease payments	310,687	¥ 92,187
Less - Amount representing interest	(29,732)
Present value of net minimum lease payments	280,955
Current liability	39,136
Noncurrent liability	241,819
Total minimum lease present value	¥ 280,955

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Lease commitments - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Lease and Rental Expense [Line Items]
Capital leases, amortization expenses	¥ 7,879	¥ 5,541
Operating lease, rental expenses	¥ 115,503	¥ 112,934

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Segment data - Additional Information (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Segment Reporting Information [Line Items]
Total assets	¥ 52,680,436	¥ 51,936,949	¥ 50,308,249
Corporate
Segment Reporting Information [Line Items]
Total assets	¥ 8,630,468	¥ 9,329,020	¥ 9,386,399

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Product warranties and recalls and other safety measures (Net Changes in Liabilities for Quality Assurances) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Product Liability Contingency [Line Items]
Liabilities for quality assurances at beginning of year	¥ 1,769,275	¥ 1,702,312	¥ 1,696,938
Payments made during year	(490,117)	(489,461)	(586,943)
Provision for quality assurances	314,494	565,012	649,377
Changes relating to pre-existing quality assurances	(34,345)	(1,411)	(56,769)
Other	(6,194)	(7,177)	(291)
Liabilities for quality assurances at end of year	¥ 1,553,113	¥ 1,769,275	¥ 1,702,312

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Summary of significant accounting policies (Finance Receivables 90 Days or More Past Due and Accruing) (Detail) - JPY (¥) ¥ in Millions	Mar. 31, 2020	Mar. 31, 2019
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables past due over 90 days and still accruing	¥ 42,870	¥ 32,259
Retail Receivables Portfolio Segment
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables past due over 90 days and still accruing	37,709	28,438
Finance Lease Receivables Portfolio Segment
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables past due over 90 days and still accruing	¥ 5,161	¥ 3,821

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Per share amounts (Tables)

12 Months Ended

Mar. 31, 2020

Reconciliations of Differences Between Basic and Diluted Net Income Attributable to Toyota Motor Corporation Per Common Share

Reconciliations of the differences between basic and diluted net income attributable to Toyota Motor Corporation per common share for the years ended March 31, 2018, 2019 and 2020 are as follows:

	Yen in millions			Thousands of shares		Yen
	Net income attributable to Toyota Motor Corporation			Weighted- average common shares		Net income attributable to Toyota Motor Corporation per common share
For the year ended March 31, 2018
Net income attributable to Toyota Motor Corporation		2,493,983
Accretion to Mezzanine equity		(4,849	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders		(7,442	)
Basic net income attributable to Toyota Motor Corporation per common share		2,481,692			2,947,365		842.00
Effect of dilutive securities
Model AA Class Shares		12,291			47,100
Assumed exercise of dilutive stock options		(4	)		301
Diluted net income attributable to Toyota Motor Corporation per common share		2,493,979			2,994,766		832.78
For the year ended March 31, 2019
Net income attributable to Toyota Motor Corporation		1,882,873
Accretion to Mezzanine equity		(4,850	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders		(9,938	)
Basic net income attributable to Toyota Motor Corporation per common share		1,868,085			2,871,534		650.55
Effect of dilutive securities
Model AA Class Shares		14,788			47,100
Assumed exercise of dilutive stock options		(0	)		40
Diluted net income attributable to Toyota Motor Corporation per common share		1,882,873			2,918,674		645.11
For the year ended March 31, 2020
Net income attributable to Toyota Motor Corporation		2,076,183
Accretion to Mezzanine equity		(4,850	)
Dividends to Toyota Motor Corporation Model AA Class Shareholders		(12,434	)
Basic net income attributable to Toyota Motor Corporation per common share		2,058,899			2,798,918		735.61
Effect of dilutive securities
Model AA Class Shares		17,284			47,100
Assumed exercise of dilutive stock options		—			—
Diluted net income attributable to Toyota Motor Corporation per common share		2,076,183			2,846,018		729.50

Toyota Motor Corporation Shareholders' Equity Per Share

The following table shows Toyota Motor Corporation shareholders’ equity per share as of March 31, 2019 and 2020. Toyota Motor Corporation shareholders’ equity per share amounts are calculated by dividing Toyota Motor Corporation shareholders’ equities’ amount at the end of each period by the number of shares issued and outstanding, excluding treasury stock at the end of the corresponding period.

	Yen in millions		Thousands of shares		Yen
	Toyota Motor Corporation shareholders’ equity		Common shares issued and outstanding at the end of the year (excluding treasury stock)		Toyota Motor Corporation shareholders’ equity per share
As of March 31, 2019		19,348,152		2,832,439		6,830.92
As of March 31, 2020		20,060,618		2,766,153		7,252.17

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Short-term borrowings and long-term debt - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Debt Instrument [Line Items]
Unused short-term lines of credit	¥ 1,861,792
Assets pledged as collateral mainly for certain debt obligations of subsidiaries	644,368
Other assets pledged as collateral mainly for certain debt obligations of subsidiaries	2,010,548
Unused long-term lines of credit	5,345,718
Debt interest expense	¥ 512,677	¥ 499,871	¥ 415,094
Currency, U.S. Dollar
Debt Instrument [Line Items]
Percentage of debt	48.00%
Euro Member Countries, Euro
Debt Instrument [Line Items]
Percentage of debt	13.00%
Currency, Japanese Yen
Debt Instrument [Line Items]
Percentage of debt	11.00%
Currency, Australian Dollar
Debt Instrument [Line Items]
Percentage of debt	7.00%
Thai bahts
Debt Instrument [Line Items]
Percentage of debt	5.00%
Other Foreign Currency Denominated Debt
Debt Instrument [Line Items]
Percentage of debt	16.00%
Commercial Paper
Debt Instrument [Line Items]
Unused short-term lines of credit	¥ 374,273

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Marketable Securities and Other Securities Investments - Gains and Losses Related to Equity Securities (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Net gains (losses) recognized on equity securities	¥ (3,837)	¥ (334,636)
Less: Net gains (losses) recognized on equity securities sold	16,245	4,836
Unrealized gains (losses) on equity securities	¥ (20,082)	¥ (339,472)

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Income taxes - Additional Information (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Income Taxes [Line Items]
Decrease in net deferred liabilities			¥ 218,323
Decrease in provision for income taxes			¥ 249,694
Japanese Tax Authority
Income Taxes [Line Items]
Statutory tax rate	30.90%	30.90%	31.10%
Operating loss carryforwards for tax purposes	¥ 18,776
Tax credit carryforwards	4,579
Undistributed earnings of foreign subsidiaries	4,205,058
Undistributed earnings of foreign subsidiaries, additional tax provision, estimate	¥ 152,190
Tax years remain open to examination by various tax jurisdictions	on and after April 1, 2013
Japanese Tax Authority | Minimum
Income Taxes [Line Items]
Expiration date for operating loss carryforwards	2021
Expiration date for tax credit carryforwards	2021
Japanese Tax Authority | Maximum
Income Taxes [Line Items]
Expiration date for operating loss carryforwards	2030
Expiration date for tax credit carryforwards	2023
Foreign Tax Authority
Income Taxes [Line Items]
Operating loss carryforwards for tax purposes	¥ 402,628
Tax credit carryforwards	¥ 67,098
Tax years remain open to examination by various tax jurisdictions	April 1, 2002
Foreign Tax Authority | Minimum
Income Taxes [Line Items]
Expiration date for operating loss carryforwards	2021
Expiration date for tax credit carryforwards	2021
Foreign Tax Authority | Maximum
Income Taxes [Line Items]
Expiration date for operating loss carryforwards	2040
Expiration date for tax credit carryforwards	2040

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Fair value measurements (Changes in Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis) (Detail) - JPY (¥) ¥ in Millions	12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance at beginning of year	¥ 10,364	¥ 5,276	¥ 1,425
Total gains (losses)
Included in income (loss)	(346)	3,170	822
Included in other comprehensive income (loss)	(671)	82	(12)
Purchases and issuances	5,305	5,254	3,860
Settlements	(1,624)	(3,659)	(419)
Other	(197)	241	(400)
Balance at end of year	12,831	10,364	5,276
Derivative financial instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance at beginning of year	77	(2,212)	(7,522)
Total gains (losses)
Included in income (loss)		3,169	805
Settlements	(77)	(784)	4,320
Other		(96)	185
Balance at end of year		77	(2,212)
Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance at beginning of year	10,287	7,488	8,947
Total gains (losses)
Included in income (loss)	(346)	1	17
Included in other comprehensive income (loss)	(671)	82	(12)
Purchases and issuances	5,305	5,254	3,860
Settlements	(1,547)	(2,875)	(4,739)
Other	(197)	337	(585)
Balance at end of year	¥ 12,831	¥ 10,287	¥ 7,488

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Inventories (Tables)

12 Months Ended

Mar. 31, 2020

Components of Inventories

Inventories consist of the following:

	Yen in millions
	March 31,
	2019		2020
Finished goods		1,746,159		1,517,173
Raw materials		475,504		485,069
Work in process		324,921		315,139
Supplies and other		109,812		117,537
Total		2,656,396		2,434,918

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Short-term borrowings and long-term debt (Tables)

12 Months Ended

Mar. 31, 2020

Short-term Borrowings

	Yen in millions
	March 31,
	2019		2020
Loans, principally from banks, with a weighted-average interest at March 31, 2019 and March 31, 2020 of 2.11% and of 2.03% per annum, respectively		1,468,430		1,179,230
Commercial paper with a weighted-average interest at March 31, 2019 and March 31, 2020 of 2.28% and of 1.50% per annum, respectively		3,876,544		4,106,796
		5,344,973		5,286,026

Long-term Debt

Long-term debt at March 31, 2019 and 2020 comprises the following:

	Yen in millions
	March 31,
	2019			2020
Unsecured loans, representing obligations principally to banks, due 2019 to 2041 in 2019 and due 2020 to 2041 in 2020 with a weighted-average interest at March 31, 2019 and March 31, 2020 of 2.78% and of 2.37% per annum, respectively		3,441,336			3,713,541
Secured loans, representing obligations principally to finance receivables securitization due 2019 to 2026 in 2019 and due 2020 to 2034 in 2020 with a weighted-average interest at March 31, 2019 and March 31, 2020 of 2.47% and of 1.98% per annum, respectively		1,840,204			1,983,976
Medium-term notes of consolidated subsidiaries, due 2019 to 2048 in 2019 and due 2020 to 2048 in 2020 with a weighted-average interest at March 31, 2019 and March 31, 2020 of 2.46% and of 2.05% per annum, respectively		7,372,550			7,442,590
Unsecured notes of parent company, due 2019 to 2037 in 2019 and due 2020 to 2037 in 2020 with a weighted-average interest at March 31, 2019 and March 31, 2020 of 1.84% and of 1.85% per annum, respectively		511,980			650,905
Unsecured notes of consolidated subsidiaries, due 2019 to 2031 in 2019 and due 2020 to 2031 in 2020 with a weighted-average interest at March 31, 2019 and March 31, 2020 of 2.12% and of 1.70% per annum, respectively		1,566,994			1,412,368
Secured notes of consolidated subsidiaries, due 2019 to 2022 in 2019 and due 2020 to 2023 in 2020 with a weighted-average interest at March 31, 2019 and March 31, 2020 of 7.78% and of 7.52% per annum, respectively		53,120			34,626
Long-term finance lease obligations, due 2019 to 2035 in 2019 and due 2020 to 2049 in 2020 with interest ranging from 0.12% to 14.73% per annum in 2019 and from 0.01% to 14.73% per annum in 2020		19,021			28,937
		14,805,205			15,266,943
Less - Current portion due within one year		(4,254,260	)		(4,574,045	)
		10,550,945			10,692,898

Aggregate Amounts of Annual Maturities of Long-term Debt During Next Five Years

The aggregate amounts of annual maturities of long-term debt during the next five years are as follows:

Years ending March 31,	Yen in millions
2021		4,574,045
2022		3,692,634
2023		3,014,979
2024		1,575,717
2025		1,210,354