Annual Report 2007

In the fiscal year ended March 31, 2007, Toyota posted record business results across the board. On a consolidated basis, Toyota achieved a year-on-year increase of 550,000 units in vehicle sales, to 8,524,000 vehicles; a 13.8% increase in net revenues, to ¥23,948.0 billion; a 19.2% increase in operating income, to ¥2,238.6 billion; and a 19.8% increase in net income, to ¥1,644.0 billion.

Due to various factors contributing a total of ¥720.0 billion to income, which offset expenses associated with operational expansion of ¥359.7 billion, operating income increased ¥360.3 billion and surpassed ¥2 trillion for the first time. Factors that contributed to increased income were sales efforts (¥330.0 billion), cost reductions (¥100.0 billion), and the effect of changes in currency exchange rates (¥290.0 billion).

In fiscal 2007, we were able to advance the development of technologies and products for the future while achieving a large increase in earnings, which resulted from increased vehicle sales through favorable overseas sales and cost reductions and other factors. Also, we believe that we have managed to move toward a more globally balanced earnings structure by growing earnings in Europe and Central and South America. Toyota will continue to build a rock-solid base through the improvement of technology, supply, and marketing and their supporting factors: product quality, cost, and human resources. Toyota will continue to work toward stable, long-term growth by taking in opportunities while avoiding or absorbing risks in all product segments and regions.

In Japan, earnings were significantly higher, with a 13.0% increase in net revenues, to ¥14,815.3 billion, and a 35.4% rise in operating income, to ¥1,457.2 billion. Earnings were up due to a significant increase in vehicle exports resulting from Toyota's raising of domestic production capacity in the previous fiscal year to meet heavier overseas demand.

In North America, net revenues increased 17.5%, to ¥9,029.7 billion, while operating income decreased 9.3%, to ¥449.6 billion. Despite incurring temporary expenses related to the start-up of the Texas plant, Toyota maintained high income levels due to strong sales of such new models as the RAV4, Camry, FJ Cruiser, and Yaris.

In Europe, Toyota recorded a large rise in earnings, with increases of 29.9% in net revenues, to ¥3,542.1 billion, and 46.2% in operating income, to ¥137.3 billion. Favorable sales of core models, including the Yaris, Aygo, and RAV4, contributed to higher earnings.

In Asia, net revenues were up 8.9%, to ¥2,225.6 billion, but operating income was down 19.2%, to ¥117.6 billion. The decrease in operating income was mainly attributable to lower vehicle sales associated with downturns in certain markets, such as Indonesia and Taiwan.

In Other Regions, net revenues grew 20.0%, to ¥1,922.7 billion, and operating income was up 24.3%, to ¥83.5 billion. This increase resulted from strong sales of the IMV*2 series in Central and South America and Africa and the Camry in Oceania.

Furthermore, equity in earnings of affiliated companies was up 27.5%, to ¥209.5 billion, mainly due to the strong performances of domestic affiliated companies and joint venture companies in China.