TOYOTA MOTOR CORPORATION Annual Report 2008 Year ended March 31, 2008 Annual Report 2008 Driving to Innovate New Value Contents 2 Performance Overview • Financial Highlights • The Year in Review 6 Messages from the Management 6 Chairman’s Message Fujio Cho, Chairman “Toyota aims to achieve sustained, long-term growth by providing high-quality vehicles to people everywhere, and by contributing to the realization of a bountiful and nurturing society.” 8 President’s Message / An Interview with the President Katsuaki Watanabe, President ”A strong, flexible corporate structure for increased corporate value” 16 Message from the Executive Vice President Responsible for Accounting Mitsuo Kinoshita, Executive Vice President “Toward Stable and Long-term Growth” 20 Special Feature Sustainability in Three Areas — Contributing to Sustainable Development of Society and the Earth — Toyota is committed to sustainability in research and development, manufacturing, and nurturing society. Toyota hopes to contribute to the realization of a prosperous, low- carbon society, by satisfying the needs of both environmental preservation and economic growth. 29 Business Overview Toyota’s fiscal 2008 performance by business segment and activities • Solid Foundations for Future Growth • At a Glance • Automotive Operations • Financial Services Operations • Other Business Operations • Motorsports Activities 51 Management & Corporate Information A variety of information relating to the Company and its management • Corporate Philosophy • Corporate Governance • Directors and Auditors • Risk Factors • R&D and Intellectual Property • R&D Organization • Production Sites • Overseas Manufacturing Companies • Toyota Milestones 69 Financial Section 134 Investor Information Cautionary Statement with Respect to Forward-Looking Statements This annual report contains forward-looking statements that reflect Toyota’s plans and expectations. These forward- looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause Toyota’s actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward- looking statements. These factors include: (i) changes in economic conditions and market demand affecting, and the competitive environment in, the automotive markets in Japan, North America, Europe and other markets in which Toyota operates; (ii) fluctuations in currency exchange rates, particularly with respect to the value of the Japanese yen, the U.S. dollar, the euro, the Australian dollar, the Canadian dollar and the British pound; (iii) Toyota’s ability to realize production efficiencies and to implement capital expenditures at the levels and times planned by management; (iv) 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 trade, environmental protection, vehicle emissions, vehicle fuel economy and vehicle safety, as well as changes in laws, regulations and government policies that affect Toyota’s other operations, including the outcome of future litigation and other legal proceedings; (v) political instability in the markets in which Toyota operates; (vi) Toyota’s ability to timely develop and achieve market acceptance of new products; and (vii) fuel shortages or interruptions in 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. A discussion of these and other factors which may affect Toyota’s actual results, performance, achievements or financial position is contained in Toyota’s annual report on Form 20-F, which is on file with the United States Securities and Exchange Commission. Cover: Redesigned Crown (February 2008) Driving to Innovate New Value » Supported by people around the world, Toyota Motor Corporation has endeavored since its establishment in 1937 to serve society by creating better products. Today, the Company manufactures vehicles and parts at 53 production sites in 27 countries and regions around the globe and is an active member in the communities it serves. In fiscal 2008, ended March 31, 2008, the Toyota Group sold approximately 8.91 million vehicles in 170 countries and regions under the Toyota, Lexus, Daihatsu, and Hino brands. As the automobile industry faces a turning point in its history, Toyota aims to achieve sustainable growth by building a more flexible and stronger corporate structure to meet the challenges ahead. Drawing on the strengths of the entire Group, Toyota will continue to innovate and move forward on the road to future growth and the creation of new value. • Annual Report 2008 • TOYOTA 1 Performance Overview Financial Highlights Toyota Motor Corporation Fiscal years ended March 31 Consolidated Performance (U.S. GAAP) U.S. dollars* Yen in millions in millions % change 2006 2007 2008 2008 2007vs2008 For the Year: Net Revenues.................................... ¥21,036,909 ¥23,948,091 ¥26,289,240 $262,394 +9.8 Operating Income............................ 1,878,342 2,238,683 2,270,375 22,661 +1.4 Net Income ....................................... 1,372,180 1,644,032 1,717,879 17,146 +4.5 ROE............................................... 14.0% 14.7% 14.5% — — At Year-End: Total Assets....................................... ¥28,731,595 ¥32,574,779 ¥32,458,320 $323,968 -0.4 Shareholders’ Equity...................... 10,560,449 11,836,092 11,869,527 118,470 +0.3 Yen U.S. dollars* % change 2006 2007 2008 2008 2007vs2008 Per Share Data: Net Income (Basic) ........................... ¥ 421.76 ¥ 512.09 ¥ 540.65 $ 5.40 +5.6 Annual Cash Dividends.................... 90.00 120.00 140.00 1.40 +16.7 Shareholders’ Equity ........................ 3,257.63 3,701.17 3,768.97 37.62 +1.8 Stock Information (March 31): Stock Price..................................... ¥6,430 ¥7,550 ¥4,970 $49.61 -34.2 Market Capitalization (Yen in millions, U.S. dollars in millions)........................ ¥23,212,284 ¥27,255,481 ¥17,136,548 $171,041 -37.1 * U.S. dollar amounts have been translated at the rate of ¥100.19=US$1, the approximate current exchange rate at March 31, 2008. Net Revenues Operating Income Net Income Cash Dividends per Share +9.8% +1.4% +4.5% +¥20.00 Annual Cash Dividends per Share ¥26.29 trillion ¥2.27 trillion ¥1.72 trillion ¥140.00 (¥ Billion) (¥ Billion) (¥ Billion) (¥) 25,000 2,500 2,000 150 20,000 2,000 1,600 120 15,000 1,500 1,200 90 10,000 1,000 800 60 5,000 500 400 30 0 0 0 0 FY ’04 ’05 ’06 ’07 ’08 FY ’04 ’05 ’06 ’07 ’08 FY ’04 ’05 ’06 ’07 ’08 FY ’04 ’05 ’06 ’07 ’08 Note: Fiscal years ended March 31 2 TOYOTA • Annual Report 2008 • Performance Messages from the Management & • Overview • Management • Special Feature • Business Overview • Corporate Information • Financial Section • Investor Information • Consolidated Vehicle Production and Sales Thousands of units % change 2006 2007 2008 2007vs2008 Vehicle Production by Region: Japan ............................................................................ 4,684 5,100 5,160 +1.2 Overseas Total ............................................................. 3,027 3,080 3,387 +10.0 North America............................................................ 1,201 1,205 1,268 +5.2 Europe ........................................................................ 623 709 711 +0.3 Asia.............................................................................. 836 755 961 +27.3 Central and South America....................................... 122 147 150 +2.0 Oceania....................................................................... 113 117 149 +27.4 Africa........................................................................... 132 147 148 +0.7 Consolidated Total ...................................................... 7,711 8,180 8,547 +4.5 Vehicle Sales by Region: Japan ............................................................................ 2,364 2,273 2,188 -3.7 Overseas Total ............................................................. 5,610 6,251 6,725 +7.6 North America............................................................ 2,556 2,942 2,958 +0.5 Europe ........................................................................ 1,023 1,224 1,284 +4.9 Asia.............................................................................. 880 789 956 +21.2 Central and South America....................................... 233 284 320 +12.7 Oceania....................................................................... 251 268 289 +7.8 Africa........................................................................... 253 304 314 +3.3 Middle East ................................................................ 406 433 597 +37.9 Others ......................................................................... 8 7 7 0.0 Consolidated Total ...................................................... 7,974 8,524 8,913 +4.6 Consolidated Vehicle Sales and Production Consolidated Vehicle Sales (Thousands of units) Consolidated Vehicle Production (Thousands of units) FY 2008 +1.2% 5,160 +0.5% 2,958 +4.9% 1,284 +0.3% -3.7% 711 2,188 +5.2% 1,268 +21.2% +27.3% Europe 956 961 North America +37.9% 597 Asia