Toyota ’s Global Strategy

Toyota’s
— Moving toward Global Motorization
—Moving —
Motorization—

April 16, 2003

Toyota Motor Corporation 1
 Cautionary Statement with Respect to Forward-Looking Statements

This presentation 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 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 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 affecting Toyota’s
automotive operations, particularly laws, regulations and policies relating to environmental protection, vehicle
emissions, vehicle fuel economy and vehicle safety, as well as changes in laws, regulations and government
policies affecting 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 the “Operating and Financial Review and Prospects” and “Information on the Company” sections
and elsewhere in Toyota’s annual report on Form 20-F, which is on file with the United States Securities and
Exchange Commission.

2
 Fujio Cho
President
Toyota Motor Corporation

3
I. Global Manufacturing & Marketing in 2002
Growth in Production Volume
Global output Overseas output
(Millions of units) (Millions of units)
33 years
years
6.0 2002
2002 Global
Global
(million
(million units)
units)
Output :: 6.31
Output 6.31**
Sales :: 6.17
Sales 6.17**
13 years
5.0
* includes Toyota/Lexus,
Daihatsu and Hino brands.
2.17 2.0

1.62 Annual sales surpass

4.0 1 million units
1.0

0.45
3.0 0
1986 1999 2002 Corolla
Overseas output Global output
4
II. 2010 Global Vision
Major change in the global
economic environment <Expected society>

Taking
Taking on
on
the
the challenges
challenges
for
for change
change Global
motorization

Achieve
global Market & population growth
production & in the US
sales of
* Regional strategies –
6 million units North America, Europe, Rise of markets in Eastern & Central
Europe and in Russia
Asia, China and Japan
* Technological innovation Strong growth of Asian markets

2002 2010s

5
III. Regional Strategy
North American Market (1):
Creating market through new product launches
2002 sales:
(Millions
of units) 1.91
million units Luxury SUVs Full-sized trucks

15

Commercial vehicle Lexus GX470 Lexus RX330 Tundra Double

Cab
10 (light truck) market
Entry-level vehicle
for young drivers
Passenger vehicle market
No. 1 Scion
5 in 2002
passenger
vehicle
sales
Corolla Camry
xA xB
0
1990 1995 2000 2002
<US market>
6
III. Regional Strategy
North American Market (2):
Production growth centered on light truck manufacturing
#3 Canada ⇒First Lexus
production base

#4 Indiana #2 Kentucky
#1 NUMMI

#5 Mexico
#6 Texas
1.65
⇒“Made-in-Texas” trucks
Texas plant
<Manufacturing capacity (Tundra)
expansion plan> 1.48 1.50
(Millions of units) Mexico plant
1.40
Canada plant (Tacoma)
Indiana plant expansion (Sienna) expansion
(RX330)

Present Fall 2003 2005 2006 7

III. Regional Strategy
European Market: Integrated manufacturing & marketing

2002 sales:
760,000 Marketing
Marketing
units organization
organization
restructuring
restructuring
starting
starting
April
April 2003
2003 Action in
United the wider
Kingdom EU market

France Czech
Republic

New “Avensis” launched

in March 2003
as upper core model
⇒First Japan market Turkey
launch of UK-made
vehicle in fall 2003

Toyota Motor Europe (TME)

Leading marketing companies Manufacturing plants
8
III. Regional Strategy
Asian Market: Manufacturing & export base for
pickups/multipurpose vehicles
⇒Development of global manufacturing base and mutual
distribution network (IMV Project starts in 2004)
Thailand: Global manufacturing base
Other Asian nations: Manufacturing
bases for engines & main components
To more than 80 nations/regions

Japan
South Africa & Argentina:
Intra-regional India
manufacturing bases To Europe & Africa
Thailand
Others
To South America Philippines

Indonesia
South Africa

Argentina
: Pickups & multipurpose vehicles
: Engines & main components 9
III. Regional Strategy
Chinese Market: Manufacturing & marketing
to be strengthened in response to market growth
Luxury Large &
Luxury sedan Crown
Product lineup

SUV
Land Cruiser/Prado Establish full
product lineup
Compact
Compact Vios
Establish
Daihatsu Toyota brand image
(Compact) Corolla

Aggressive product launches

Production

50,000
capacity

units/year Several hundred

30,000
units/year thousand units/year
25,000 units →115,000 units/year
50,000
units/year

2002 2003 2004 2005 2006 2007 2008 2009 2010

10
III. Regional Strategy
Japanese Market: Introduction of Lexus &
Reorganization of Sales Channel
⇒Preparations for future changes (in market structure & customer values)

After reorganization
Lexus Development of new Lexus dealership
(new) network in 2005 (150 dealers)

Toyota brand

11
III. Regional Strategy
Japanese Market: Introduction of Lexus &
Reorganization of Sales Channel
⇒Preparations for future changes (in market structure & customer values)

Present After reorganization

Toyota brand Lexus Development of new Lexus dealership

(new) network in 2005 (150 dealers)
(5 channels)

Vista Consolidation of Netz & Vista

Toyota brand Netz networks in spring 2004
→Foothold in new market segment
Netz (4 channels)
Luxury vehicle channel for
Toyota the Toyota brand
Toyota
Leading channel for the medium-
Toyopet Toyopet size car market
Corolla Largest volume-sales channel,
Corolla centering on compact vehicles

12
IV. Technology Strategy (1)
Development of a wide range of technologies and
products with focus on market creation
<Technology development> <Marketing>
Nanotechnology Material technology
Leading-edge
technologies

Assessing
Biotechnology
Energy customer needs
technology

technologies
Next-generation

Existing
technologies

Engine Body Electronics Proposal of

Transmission Chassis business vision

Environment Safety IT

Products focused on market creation

“Comfort ” “Kindness” “Excitement”
13
IV. Technology Strategy (2)

Harmonizing
Harmonizing “Ecology”
“Ecology” with
with “Emotion”
“Emotion”

Ecology
Ecology Emotion
Emotion

14
V. Conclusion

Global-scale motorization

Rise of markets
Market & in Eastern &
population Strong growth of
Central Europe
growth in the US Asian markets
and in Russia

Addressing challenges for change — toward further growth

15
Toyota ’s Global Strategy
Toyota’s
— Moving toward Global Motorization
—Moving —
Motorization—

April 16, 2003

Toyota Motor Corporation 16
Toyota’s Financial Strategy
Toyota’s

April 16, 2003

Toyota Motor Corporation 1
 Ryuji Araki
Executive Vice President
Toyota Motor Corporation

2
I. Business Performance
Operating income by market segment
(Billions of yen)

FY1998 FY2002 FY2003/9mos.

(April,1997-March,1998) (April,2001-March,2002) (April-Dec.,2002)

Japan 649 870 813

North America 175 265 268

Europe -2 -12 5

Asia & other regions 8 19 41

Consolidated
elimination
-12 -19 -17

Consolidated total 818 1,123 1,110

(Japan GAAP)
3
II. Profit Earnings
Growth and targets in operating income ratio & ROE

9 (%)
9.1% 9%
income ratio

7.4%
Operating

6.1% 6% 6.5%
(Billions
6 of yen)
～
～ ● 11.3% 1,000
(%)
10
8.5% ●10%
6.8% ●
ROE

500

6.3% ●
5.8% ●
●
5 0
FY1999 FY2000 FY2001 FY2002 April-Dec.,2002 Target (Japan GAAP)
Operating income Operating income ratio ROE
4
III. Dividend Payments & Share Buyback
Cash flow allocated to dividend payments
(Billions of yen)
1,000 and share buyback

Capital expenditures R&D

500
～
400 ～

0
FY1999 FY2000 FY2001 FY2002
Cash flow Dividend & share buyback (Japan GAAP)

* Cash flow = Current net income + Depreciation costs - Capital expenditures 5

IV. Change in Share Ownership
Increase in foreign shareholders
(listed on NY and London exchanges
Shareholding in September 1999)
by banks VS
Increase in individual shareholders
(reduction in stock unit in August 2000)

[Sept. 30, 1999] [March 31, 2003 (estimate)]

Banks 34% Dramatic d

rop
Approx. 15%

6
V. Toyota’s Actions on Corporate Governance
and Information Disclosure
Internal Mechanisms ⇒Reinforcement of internal controls
General
General shareholders’
shareholders’
<Internal/external meeting
meeting <Monitoring>
auditing>

International
International Advisory
Advisory

Monitoring
Accounting
Accounting audits
audits Board Board
Board
based
Board of
of directors
directors
based on US &
on US &
Japan auditing
Japan auditing

Monitoring
Monitoring
standards
standards
Monitoring
Labor-Management
Labor-Management
Council
Council &
& Forum
Forum
President
Board
Board of
of statutory
statutory
Monitoring

auditors
auditors Social
Social Contribution
Contribution
Program
Program Committee
Committee
Half
Half are
are external
external Managing Officers
auditors
auditors
Monitoring
Monitoring Corporate
Corporate Ethics
Ethics
Committee
Committee

<Internal information Disclosure

Disclosure Committee
Committee
management>
Stock
Stock Option
Option Committee
Committee
NY/London
NY/London stock
stock listing
listing
-- Disclosure
Disclosure based
based on
on SEC
SEC standards
standards
-- Identical
Identical information
information disclosure
disclosure in
in New
New York,
York,
London and Tokyo
London and Tokyo
7
Toyota’s Financial Strategy
Toyota’s

April 16, 2003

Toyota Motor Corporation 8
Toyota ’s Technology Strategy
Toyota’s

April 16, 2003

Toyota Motor Corporation
1
 Akihiko Saito
Executive Vice President
Toyota Motor Corporation

2
3
Prius: The World’s First Production
Hybrid Vehicle
Power train

Design Packaging

4
Development Goals of First-Generation Prius

Fuel economy
◆ Innovative advances in
fuel economy, surpassing 1.5 times
conventional gasoline-fuel 2.0 times
engine

◆ Drastically cleaner 1/10 of regulation

emissions levels

5
 Toyota Hybrid System (THS)
Generator Battery
Gasoline engine

Power control unit

(Inverter etc.)
Electric motor

Power split device

Start-up Normal driving Acceleration Deceleration Stopping

Engine Engine
Electric operating Motor and Battery charging shuts off
motor only with maximum engine Energy recovery No energy
efficiency consumption

6
 HV Technology Matrix
Strong

Motor Power / Vehicle Power Ratio

THSII SU-HV

THSII NG-Prius
*EV
Drive
European
THS Prius
Toyota Coaster Concept Vehicle
Plug-in/Switching
Estima HV

Japanese
Vehicle A
Mild
non Japanese
EV Vehicle B
Drive
Crown Mild HV

Series/Parallel HV
Series HV Parallel HV
( HV of Hybrids)

* : propelled by electric motor only 7

 Overall Efficiency < Well-to- Wheel >
10-15 mode

Well to Tank Tank to wheel

Overall efficiency (%)
(%) (%)
0 10 20 30
Gasoline-
engine 88 16
vehicle

Diesel-
engine 91 20
vehicle

Prius
(THS) 88 30
Estimated by Toyota
8
Low Environmental Impacts (Emissions)
ppmc
50
Gasoline Engine approaching
Ambient Air level
Hybrids help catalyst warm up hence
Concentration
Gas Concentration

Conventional
reach very low emission level
level
Cold start emission
Hot start emission

5
Gas

Prius

City Air
0

96 98 00 02 04 Year

9
Internal Development of Toyota Hybrid System

Engine
Generator
Secondary
battery
Power
control
unit
Hybrid
Motor
ECU

Engine & Motor & Generator Power control unit

Internally developed
components
10
 Increased Sales of Hybrid Vehicles

Units
Units 100,000
100,000
Total
Total vehicles
vehicles

Crown Mild Hybrid

50,000
50,000
Estima Hybrid (4WD)

Gas
Gas turbine
turbine HV
HV (1969)
(1969) Prius Year
Year 2001
2001

11
 Hybrid Synergy Drive

Fuel Economy Hybrid Synergy Drive

Existing hybrid vehicle

Improvement of conventional engines

Fun to Drive

12
Next-Generation Hybrid System (THS II)

Secondary
battery

Power control unit Voltage boost converter

Generator Inverter

Engine
Motor
(150% increase in
output)
Power split device

Driving wheel

Hybrid Synergy Drive

13
Broader Application of the Next-Generation
Hybrid System

((SU-HV)
SU-HV)

14
Fuel Cell Vehicle

15
 Development of Toyota FCHV
FCHV: Fuel Cell Hybrid Vehicles
1992
Start of FCHV development
1996
Announcement of the hydrogen FCHV at the EVS-13 (Osaka)
1997 1996
The world’s first FCHV with Methanol Reformer
2001
Announcement of the FCHV-3, FCHV-4, FCHV-BUS1,
and FCHV-5
2002
Announcement of FCHV-BUS2 & limited marketing with 1997
the delivery of Toyota FCHV

2002 2002 2001

16
Internal Development of Core Technologies

Independent In-house Development of Total System Including Fuel Cell Stacks

Secondary Air
battery compressor
High-pressure
Power
Motor control hydrogen
Power control unit unit
storage tank
TOYOTA Air compressor
HV EUC FC Stack

Internally developed
components
Motor
TOYOTA FC Stack

17
 Application of Hybrid Technology
PRIUS TOYOTA FCHV

ICE Hybrid Vehicle (PRIUS) Toyota Fuel Cell Hybrid Vehicle

Engine Fuel Cell

Power Power
Control Unit Control Unit

Secondary Secondary
Battery Motor Battery Motor

18
 Overall Efficiency <Well-to-Wheel>
Well to Tank to Overall efficiency (%)
tank( %) Wheel(%) 0 10 20 30 40

Gasoline-
engine 88 16
vehicle

FCV
(High-pressure 38
hydrogen)

58
FCHV
(High-pressure 50
hydrogen)

10-15 modes Estimated by Toyota

* Based on current consumption
19
 Future Image of Powertrain Development
2 (in billions)

Fuel cost + fuel cell cost

Total world vehicle ownership

1
Internal combustion
engine vehicles

Internal
combustion
Internal combustion engine engine HV
fuel cost + Internal
combustion engine cost
0 Fuel cell vehicle
2000 20X0 Year
20
 Toyota’s Environmental Technology
Development
The Ultimate ECO-Car

FCHV
THS
Hybrid Technology
DPNR D-4
CNG Diesel DI Lean Burn EV
VVT-i
Alternative Diesel-engine Gasoline-engine
fuel vehicle vehicle EV & FCV

21
Toyota ’s Technology Strategy
Toyota’s

April 16, 2003

Toyota Motor Corporation
22
Toyota ’s Global Strategy
Toyota’s
— Moving toward Global Motorization
—Moving —
Motorization—

April 16, 2003

Toyota Motor Corporation