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European Environmental &Social Report 2005Towards Sustainability

TOYOTA

New_Rapport_TOYOTA_OK 29/09/05 10:04

Reporting Context and ScopeToyota first published its European Environmental Report in 2001, in order to enhance information disclosure about its environmentalactivities. This is the fourth report published so far and it complements the Toyota Motor Corporation (TMC) Environmental & SocialReport 2005. The European Environmental Report has expanded its scope to address both environmental and social issues. Hencethe name change to the European Environmental & Social Report 2005 (Towards Sustainability). The purpose is to demonstratetransparency on Toyota’s commitments, policies and performance in environmental and social areas that affect its business andstakeholders in Europe. The key target audience is employees, authorities, NGOs and academics.

This report covers initiatives and activities handled by TMC subsidiaries in Europe and the progress of Toyota’s consolidatedenvironmental management in Europe, with the exclusion of the licensed commercial vehicle manufacturing (Salvador Caetano,Portugal).

Facts and figures in this edition cover Toyota’s 2003 & 2004 fiscal years (April 2003 – March 2005) and major developments are covereduntil June 2005. The material chosen is based on stakeholder feedback as well as extensive internal dialogues through processes thatare part of the company’s daily operations. Toyota believes that the report covers a balanced and complete set of topics and showsour commitment and results as a company based in Europe.

Many departments and data sources have provided input and information for this report. Much time and focus has been placed on ensuring thatthis information is neither incomplete nor misleading. As a baseline for reporting, this report builds on previous experience and makesreference to the GRI ”Sustainability Reporting Guidelines 2002”, as well as other reporting guidelines with reference to overallstructural elements and environmental and social aspects.

For further information on Toyota and the environment, please visit our Web site at www.toyota-europe.com/environment/. A questionnaire related to this report is also available online, at the same address. Toyota welcomes all comments and opinions relatedto this report.

1 Vision & Strategy 04

2 Integrated Environmental Management 08

3 Product Design & Development 16

4 Production 27

5 Logistics 35

6 Sales & Marketing / After Sales 42

7 Recycling of Vehicles 50

8 Social Engagement 54

9 Corporate Profile 69

Table of ContentPage


Dear Reader,

We are pleased to present Toyota’s European Environmental & Social Report 2005 (Towards Sustainability). This is Toyota’s

fourth European environmental report whose scope has now been expanded to address both environmental and social issues.

Covering Toyota’s 2003 & 2004 fiscal years (April 2003 – March 2005), this report seeks to demonstrate Toyota’s transparency on its

commitments, policies and performance in environmental and social areas that affect its business and stakeholders in Europe.

Toyota’s approach is both long-term and holistic: the total life cycle of the product, from design and use of materials to end-of-life recycling

is examined for environmental impact. But we are also concerned with the socio-economic aspects of our operations, such as the

health and safety of employees, and contributing positively to the communities in which we operate. Toyota’s No. 1 position for the

automotive sector in the Dow Jones Sustainability Index in 2004 clearly illustrates this commitment.

Alongside a number of improvements in our environmental performance, our environmental technology has also enjoyed great success.

A prime example has been the rising sales of the Toyota Prius hybrid. Cumulative global sales of the Prius have now reached almost

400,000 units, since its launch in 1997. With over 450,000 hybrid vehicles sold to date, Toyota is the leader in the world-wide hybrid

vehicle market.

Alongside the continued sales success of our vehicle line-up in Europe, and increased market share, Toyota’s commitment to the

environment and sustainable development remains steadfast. When discussing the developments that affect the automotive industry,

we at Toyota believe that none will shape us more than the need to achieve genuine and profitable sustainable mobility.

Our company recognises the link between mobility, a sustainable environment and economic growth, and believes that the growth of

our business depends on the success of sustainable mobility.

We hope you enjoy our European Environmental & Social Report 2005 (Towards Sustainability), and thank you for your continued

interest in Toyota.

Shinichi SasakiPresident & CEOToyota Motor Europe

Tadashi ArashimaExecutive Vice-PresidentToyota Motor Europe

Dr. Takis AthanasopoulosExecutive Vice-PresidentToyota Motor Europe

Message from Top Management

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As one of the world’s largest car manufacturers, Toyota is com-mitted to tackling environmental and social issues. The company’sapproach is both long-term and holistic. The total life cycle of theproduct, from design and use of materials to end-of-life recycling,is examined for environmental impact, as will be shown in this

report. But Toyota is also concerned with the socio-economicaspects of its operations, such as the health and safety ofemployees, as well as that of the communities in which the com-pany operates.

The Toyota Guiding Principles and Contribution towards Sustainable DevelopmentTo help put Toyota’s management philosophy into practice, the“Toyota Guiding Principles” were established in 1992. Updated in1997 to further bolster Toyota’s commitment to achieving sustainable

development, these Guiding Principles today inform every aspect ofthe group’s activities and practices and are explained in detail in thepaper “Contribution Towards Sustainable Development”.

Guiding Principles1. Honour the language and spirit of the law of every nation and undertake open and fair corporate activities to be

a good corporate citizen of the world.

2. Respect the culture and customs of every nation and contribute to economic and social development throughcorporate activities in the communities.

3. Dedicate ourselves to providing clean and safe products and to enhancing the quality of life everywhere throughall our activities.

4. Create and develop advanced technologies and provide outstanding products and services that fulfil theneeds of customers worldwide.

5. Foster a corporate culture that enhances individual creativity and teamwork value, while honouring mutual trustand respect between labour and management.

6. Pursue growth in harmony with the global community through innovative management.

7. Work with business partners in research and creation to achieve stable, long-term growth and mutual benefits,while keeping ourselves open to new partnerships.

1 Vision & Strategy

Toyota’s response to the challenges of promoting environmentaland social excellence involves a total commitment from manage-ment and employees. This commitment is informed by a set ofmanagerial values, business methods and beliefs collectivelyknown as “The Toyota Way”.

All Toyota employees are expected to embody these values intheir daily work and other activities, including environmental pro-tection and social initiatives. To “respect” the environment, otherpeople and the communities around them, they must “go to thesource” to identify and analyse problems (Genchi Genbutsu),move on to “challenge” conventional ideas and old habits, therebyimplementing their commitment to ”continuous improvement”(Kaizen) through “teamwork”. Among other things, the frameworkprovided by the Toyota Way enables the company to respond to

a wide variety of social and environmental challenges at variousstages and areas of its operations and activities.

To summarise, the Toyota Way is based on two main objectives:Continuous Improvement (Kaizen) and Respect for People.

These main objectives, in turn, are each reflected in the five keyvalues that make up the Toyota Way:

• Challenge• Kaizen (continuous improvement)• Genchi Genbutsu (going to the source to make

correct decisions)• Respect • Teamwork

The Toyota Way

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5

Contribution towards Sustainable Development We, TOYOTA MOTOR CORPORATION and our subsidiaries, take initiative to contribute to harmonious and sustainable development of societyand the earth, based on our Guiding Principles.

We comply with local, national and international laws and regulations as well as the spirit thereof and we conduct our business operations withhonesty and integrity.

In order to contribute to sustainable development, we believe that management interacting with its stakeholders as described below is ofconsiderable importance, and we will endeavour to build and maintain sound relationships with our stakeholders through open and fair communication.

Customers

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

We will endeavour to protect the personal information of customers in accordance with the letter and spirit of each country’s privacy laws.(Guiding Principles 1)

Employees

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

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

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

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

Through communication and dialogue with our employees, we build and share the value “Mutual Trust and Mutual Responsibility” and worktogether for the success of our employees and the company. (Guiding Principles 5)

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

Business Partners

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

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

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

Shareholders

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

Global Society/Local Communities

EnvironmentWe aim for growth that is in harmony with the environment throughout all areas of business activities. We strive to develop, establish andpromote technologies enabling the environment and economy to coexist harmoniously and to build close and cooperative relationshipswith a wide spectrum of individuals and organizations involved in environmental preservation. (Guiding Principles 3)

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

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

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

PhilanthropyWherever we do business, we actively promote and engage, both individually and with partners, in philanthropic activities that help strengthencommunities and contribute to the enrichment of society. (Guiding Principles 2)


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Global Vision 2010The company’s approach is developed further in Toyota’s “GlobalVision 2010”, which was adopted in April 2002 and proposes aseries of long-term policies on the theme of ”Innovation into theFuture”. Toyota’s Global Vision 2010 guides management in its

response to long-term social changes, combining considerationfor the environment, the benefit to customers of value-addedproducts and the encouragement of employees through sharedprosperity and social involvement.

Innovation into the Future Working with Passion and Dedication to Create a Prosperous Society.

Toyota is again reflecting on the meaning of its business spirit since its foundation – « contributing to society by making things and making automobiles » - and is working with tremendous passion and dedication to « realize a prosperous society in the new century. »

* Ubiquitous Networks :

An environment under which the advance of information and telecommunications allows anyone to access all information anytime from any location.

Kind to the EarthToyota will use outstanding environmental technologies

to promote recycling on a global scale.

Comfort of LifeToyota will create cars and a motorized society that allow people to live safely, securely

and comfortably.

Excitement for the WorldToyota will spread the appeal of automobiles throughout the world to increase the number

of Toyota fans.

Respect for all PeopleToyota will become a truly global corporation that is

respected by peoples around the world.

Toyota’s Corporate

Vision

What Society is Expected to be Like from 2020 to Around 2030

Toward Development of Motorization on a Global Scale• People around the world will be able to enjoy the high degree of mobility afforded by automobiles.

Toward a Mature Society• Nationalism will steadily decline and respect for all peoples will expand throughout the world.• People of a variety of nationalities and ethnicities will be able to engage in lively exchanges of ideas in global companies.

Toward a Recycle-oriented Society• The shift to a recycle-oriented society on a global scale is progressing.• Transition from the era of large-scale production and large volume consumption toward a recycle-oriented society that promotes « Reduce (conservation of resources), Reuse and Recycle ».

Toward the Age of ITS and Ubiquitous Networks*

• Information and telecommunications technologies are advancing and the use of IT in automobiles is increasing.• Mobile information services are improving rapidly.• Infrastructure-respondent preventive safety is developing.

The Toyota Earth CharterAnother significant step in Toyota’s commitment to sustainabledevelopment is the Toyota Earth Charter for implementing conso-lidated environmental management. The Charter, adopted in 1992and subsequently revised in 2000, embodies a comprehensiveapproach to global environmental issues, outlining Toyota’s basicpolicy and action guidelines towards effective environmentalmanagement and improvements. The Toyota Earth Charter under-lines a commitment to environmental excellence, not only throughbroad principles, but also in concrete examples of what can bedone through action guidelines.


Zeronize refers to Toyota’s aim of reducing the harmfuleffects of automobiles on people and the environment tozero. In other words:

• Zero emissions,• Zero accidents/serious injuries• Zero congestion

Maximize represents Toyota’s goals of providing ever-greater comfort, fun and excitement in its vehicles.

Zeronize and MaximizeToyota’s vision for sustainable development that promotes a truly sustainable mobility solution can be summed up in justtwo words: Zeronize and Maximize.

Corporate StructureIn order to put these policies and programmes into practice inEurope, Toyota has established three committees for manage-ment discussion and decision-making on actions to be taken.These committees are the Environmental Committee, theCorporate Social Responsibility (CSR) Committee and the SocialContribution Fund (SCF) Committee. The structure and functions

of the Environmental Committee are discussed in theEnvironmental Management Chapter and the CSR Committee ispresented in Social Engagement Chapter. For more informationon Toyota’s programmes of social engagement and the SocialContribution Fund (Toyota Fund for Europe), please see the SocialEngagement Chapter of this report.

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Global Vision 2010

Toyota Earth Charter

ZeronizeMaximize

Toyota Way

Contribution towards Sustainable Development

Toyota Guiding Principles

CSR Committee

Environmental Committee

SCF Committee


Commitment to the Environment“The freedom of mobility afforded by the invention of the automobilehas led to unprecedented social and economic development over thepast century. But today, these benefits must be weighed against thepotential risks to the earth’s environment. For the automobile toremain a positive force for progress, the automotive industry mustmake the environment a priority management issue. Toyota believesthat only in this way can automakers successfully meet the chal-lenges of the future.”

Arata FukadaVice-PresidentEnvironmental AffairsToyota Motor Europe

2 Integrated Environmental Management

Aim: Zero EmissionsFor Toyota, minimising environmental impact throughout thevehicle’s life cycle has been a top priority at every level of thecompany. Thanks to its extensive R&D efforts, Toyota has takena leading role in developing and marketing new technologies and

designs that limit the environmental burden of its automobiles.These efforts have become the hallmark of Toyota’s businessphilosophy for the 21st century, an approach based on a com-prehensive vision of sustainable mobility.

Aim:Zero Emissions

Production• Energy usage• Water usage• VOC (Volatile organic compounds)• Reducing waste• Reducing environmental risk

Logistics• CO2 from transport• Environmental team• Hazardous materials• Use of resources• Reduction of waste

Sales & Marketing / After Sales • Environmental awareness• Surveys• Incentives• Procurement of environmentally friendly parts and materials• Retailer / repairer compliance

Recycling of Vehicles (ELV)• Collection network• Providing information• Design for recycling

Product Design & Development• LCA / Eco-VAS• CO2 & other emissions• Powertrain technologies• Next generation technologies

Environmental Aspects Diagram

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To reinforce its responses to environmental issues in all its businessactivities, Toyota has developed a consolidated EnvironmentalManagement System (EMS), which sets specific requirementsfor each of its various business activities. These requirementsinclude the adoption of the Toyota Earth Charter, the drafting ofindividual environmental policies, the promotion of environ-mental action plans and the attainment of top-level environmentalperformance, on a national and regional basis.

Toyota’s Environmental Management System also involvesmeticulous environmental management in all areas and inevery stage of the vehicle life cycle, from product design anddevelopment, to production, logistics, sales and marketing,

after-sales service, and – lastly – recycling and disposal ofend-of-life vehicles. The Environmental Aspects Diagramprovides an overview of the significant environmentalissues considered by Toyota through-out the life cycle ofits vehicles and operations.Toyota’s Environmental Management System determineshow the company deals with each of these issues in eachpart of the vehicle life cycle. The actual steps taken tocontrol and reduce the environmental impact of itsvehicles and production and marketing processes arefully examined in the following chapters. The role of thecurrent chapter is to explain how management of environ-mental considerations and impacts is achieved.

EuropeanEnvironmental

CommitteeToyota Environmental Committee (TMC)Product Environmental CommitteeProduction Environmental CommitteeRecycling Committee

ProductWorking Group

Topics• CO2 Agreement(1) • Euro V(2)

• Bio-fuels• SOC(3) heavy metal ban • Environmental Purchasing Guidelines (EPG)• Design for recycling (LCA(4))

ProductionWorking Group

Topics• Legal compliance at EMCs(5)

• Zero emissions• EMS(6) & environmental assessment• Chemical aspects• EU ETS(7) for EMC

LogisticsWorking Group

Topics• Legal compliance• Environmental Impact Management • Packaging• Transportation emissions

Sales & MarketingWorking Group

Topics• Environmental Brand Image• Environmental information & communications in Sales & Marketing• Toyota Hybrid Synergy Drive

CommunicationsWorking Group

Topics• External environmental communications strategy o Product o Production o Corporate

EU EmissionsTrading Task Force• Kyoto ProtocolMechanisms

CO2 Task Force• 140g/km(1)

SOC Task Force• Substances of concern

Clean Air Task Force• Toyota D-CAT(8), Euro V, CO2

taxation, incentives, bio-fuels

Fuel Cell Task Force REACH Project(9)

ELV Project(10)

Chairman: S. SasakiVice-chairmen: T. Arashima T. Athanasopoulos

(1) Voluntary agreement between the EU and the Japanese Automobile Manufacturers Association (JAMA) to limit CO2 emissions for new car sales to 140g/km by 2009.(2) Euro V is currently under discussion. For Euro IV standards, please refer to the Product Design & Development Chapter.(3) Substances of concern (SOC) – heavy metals such as lead, cadmium, mercury and hexavalent chromium have been restricted or banned by EU Directive.(4) Life Cycle Assessment, Toyota’s comprehensive analysis of CO2 emissions throughout the life of a vehicle from material and parts production to maintenance and disposal.(5) European Manufacturing Companies.(6) Environmental Management System.(7) Emissions Trading Scheme - an international trading system for CO2 emissions, designed to help EU Member States achieve compliance to the Kyoto Protocol.(8) Toyota Diesel Clean Advanced Technology greatly reduces NOx and PM emissions (please see Product Design & Development Chapter)(9) REACH – Registration, Evaluation, Authorisation of Chemicals. Monitoring of the EC’s REACH proposal outlining a new chemicals policy for Europe. (10) Monitoring EC activities pertaining to the End-of-Life Vehicles Directive, adopted September 2000.

The European Environmental CommitteeTo ensure effective consolidated environmental management,Toyota restructured its integrated European Environmental

Committee in January 2003 to serve as a management umbrellafor all its European operations. The current structure is as follows:

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The heads of the various working groups within the EuropeanEnvironmental Committee are of vice-presidential level andcharged with ensuring cooperation between individual workinggroups, as well as deciding which topics need to be addressedat committee level. As shown in the diagram, a number of taskforces have been established to supply information to the workinggroups. These tasks forces handle issues such as EU emissions

trading, CO2 standards, substances of concern (chemicals, heavymetals, etc.), the Euro V emission standard, CO2 taxation andincentives, end-of-life vehicle restrictions and EU chemicals policy.Decisions taken by the European Environmental Committeeand/or within the different working groups regarding policy,strategy or actions to be taken are fully incorporated into group,divisional and individual employee objectives.

The European Environmental Committee was set up to integra-te all key environmental issues into company-wide operationalworking groups, and to put in place an EnvironmentalManagement System (EMS) certified as complying with the ISO14001 international standard. Composed of key executivesfrom all the operations, the European Environmental Committeemeets four times a year to decide on policy, strategy andactions. Closely linked to the Corporate EnvironmentalCommittee at Toyota Motor Corporation in Japan, the European

Environmental Committee demonstrates Toyota’s commitmentto facing environmental challenges and ensures that communicationand coordination on environmental issues are maximised withinToyota’s European operations. A number of working groups andtask forces report to the European Environmental Committee,with the aim of implementing annual action plans, reportingresults, providing information on the regulatory environment,and integrating the decisions of the Committee into dailyoperations.

Principal topics covered by the working groups’ annual plans for the fiscal years 2003-2004 included:

• Product Working Group : reaching the target value for CO2 emissions set for new car sales and banning hazardoussubstances in line with legislation; following developments with respect to the Euro V emission standard;

• Production Working Group : attaining zero non-compliance and zero complaints at factory level; reaching the goal ofzero waste to landfill; following developments and initiating actions in line with the EU Emissions Trading Scheme (ETS);

• Logistics Working Group : ensuring continuous compliance with hazardous materials requirements, reducingpackaging and packaging waste as well as transportation emissions;

• Sales & Marketing Working Group : enhancing ”environmental marketing” of the new-generation Toyota Priusand Lexus RX400h; establishing cost-control mechanisms for end-of-life vehicles, supporting efforts leading to ISO14001 certification of the National Marketing and Sales Companies (NMSC);

• Communications Working Group : promoting environmental communication about the company’s products andproduction methods as well as about the corporation in general, and engaging in lobbying activities.

Working Groups of the Environmental Committee

Environmental PolicyIn an effort to distil the environmental values inherent in the ToyotaGuiding Principles and the Toyota Earth Charter, top managementproduced a short and concise environmental policy for itsemployees linking overall corporate environmental principles,goals and targets to the company’s European operations. All ofToyota Motor Europe’s employees are expected to remain mind-ful of these three basic principles at all times and to ensurethat they are respected in every aspect of their daily routines.

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Toyota’s European Environmental Action Plan – FY 2004Achievement (by end FY2004)

1. Compliance on:SOCs: Set up SOC Operating Procedures based on European situation.- Quality Division began parts audits.- Collected 100% IMDS data.

HAZMAT: Gap analysis conducted for risk management. Electronic management system to be introduced for FY2005.

2. TMEM implemented risk-reduction activities at all plantsthrough audits.

3. Data gathered for global approach for emissions management,monitoring, reporting. Vehicle, manufacturing and spare parts: CO2 inventory was worked out for 2003/04.

4. Ongoing

1. Target achieved.

2. Target achieved:

3. Target achieved.4. Target achieved.5. Target achieved: TMMP certified in FY2003

1. Target achieved.

2. Prius won many awards: European Car of the Year 2005,VCD environmentally friendly car, Nr. 1.

1. “Company car fuel saving” campaign conducted, savingspartly used to plant 1,000 trees at TPCE. All EMCs and someNMSCs tackled campaign based on their own scheme.

2. Target achieved: conducted every month at head office.

Status end 2004: JAMA 171 g CO2/km.

LCA data collected, calculations finalised and being checked by TMC Chief Engineer. To be used for consumer product declaration at the end of 2005.

TMMT feasibility study completed. Implementation started.Parts Logistics: Improved waste separation activities at TPCE, increased the recycling and compliance level.

Data gathered – need global approach for emissions management, monitoring, reporting.- CO2 inventory was worked out for 2003/04.- Train project for manufacturing parts has been started.

2004 : Toyota 69%, Lexus 61%.

1. Target exceeded: 8,136 units sold.2. Many fiscal incentives accorded to Prius.

1. Analysis conducted, business case developed. On schedule.

2. In full legal compliance in each of the countries where legis-lation is applicable. On schedule.

Sustainable Mobility Project launched, "Mobility 2030" Reportin July 2004.

Item

Environmental Management

Legal Compliance with Legislation and VoluntaryCompliance

Consolidated EnvironmentalManagement

EnvironmentalCommunications

Environmental Education

Product Design &Development

Life Cycle AnalysisEco-VAS

ProductionZero Emissions

Logistics

Sales & Marketing /After Sales

Toyota Hybrid Synergy Drive

RecyclingEnd-of-Life Vehicle

SocialEngagement

Action/ Target

1. Full legal compliance on hazardous material issues. Enhance management system for SOCs (substances of concern): Pb, Cd, Hg, Cr6+), from the development to the production stages at Design, Purchasing and Quality Control levels. Sell-out of all passenger and commercial vehicles containing SOCs.HAZMAT Target: Strengthen risk management at Toyota facilities to achieve zero non-compliance and zero complaints.

2. Risk-reduction activities - Audit and Yokoten (knowledgesharing) to minimise environmental risk.

3. Total CO2 management: Make an Emissions inventory ofCO2 emissions from vehicle & parts / components logistics,from manufacturing and from other site activities.

4. Green House Gas Emissions Trading System (GHG ETS) -Support remaining EMC/ permit/ allowance.

1. Expand and improve the consolidated EMS, ISO 14001, at Toyota Europe and at NMSCs, EMCs. Change the internal audit to focus on the performance of the aspects, rather than the procedures.

2. Conduct full re-certification audit for Toyota Europe integratedISO 14001 for head office operations.

3. Integrate 5 VLCs and 5 PDCs into TME Certification.4. 8 additional NMSCs to obtain ISO 14001.5. 1 additional EMC to obtain ISO 14001.

1. Enhance Environmental Communications: provideinformation to internal and external stakeholders by:- Producing an Environmental Brochure.- Updating key data from Environmental Report 2003 and

putting it on www.toyota-europe.com (Report 2004 Update).2. Improve the environmental brand image of Toyota in Europe

by using Prius to create the platform for future mainstreammodels contributing to CO2 emissions reduction and promotingand supporting Toyota D-CAT, fuel cell technology.

1. Upgrade environmental awareness level of Toyota associatesby conducting Toyota Green Month Campaign based on TMC catchphrase “Think & Act“ (all sites).

2. Include environmental training in the New Hire Orientation.

Further reduction of CO2 levels of vehicle emissions in order toreach a target of 140g/km by 2009.

Trial for new-generation Yaris. Collect energy data: - Parts data from suppliers. - Assembly energy data from manufacturing plant TMMF- Engine performance data from TMC.

Complete feasibility study for zero waste to landfill at TMMT.

See Emissions section under Environmental Management-Total CO2 management: Make an inventory of CO2 emis-sions from vehicle and parts / components logistics, frommanufacturing and from other site activities.

Improve Euro IV sales ratio.

1. Meet sales objectives of Toyota Prius. Target: 7,200 units.2. Obtain Prius “incentives”.

1. Set up a vehicle database for invoice validation and cost allocation within NMSC and Toyota Group. -Detailed requirements analysis.

2. Meet all legal requirements with regard to prevention ofwaste, coding and dismantling information, reporting andconsumer information, setting up collection and treatmentnetworks, and reach the targets set.

Participate in WBCSD’s Sustainable Mobility Project.

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Continuous Environmental Planning

This latest five-year plan sets forth the steps that Toyota must take between FY2006 and FY2010 in order to achieve thestated goal of the company’s planning document, Global Vision 2010. Based on a projection of the environmental chal-lenges to be confronted in the future,

TMC’s Fourth Environmental Action Plan focuses on four major issues:

For the full Action Plan, please see the TMC Environmental & Social Report 2005 http://www.toyota.co.jp/en/environ-mental_rep/05/download/pdf/eco_01.pdf

1. Energy/global warming

2. Recycling of resources

3. Management of substances of concern

4. Atmospheric quality

The purpose of the European Environmental Action Plan is to setfive-year goals and targets designed to help the European operationsachieve Toyota’s overarching environmental mission and vision asexpressed in the Toyota Earth Charter and the Guiding Principles.Every year, the company reports on progress made towardachieving these environmental goals, some of which have alreadybeen achieved while others are on track for achievement by the

end of the five-year planning horizon. This year, a new five-yearaction plan is being devised for the period of 2006-2010. The newplan, like the current one, will reflect broader global goals andtargets as well as the goals and targets of the European affiliatecompanies. The next Global Five-Year Environmental Action PlanFY2006-2010 lists the initiatives that the company plans to imple-ment from FY2006 through FY2010.

The key issues contained in Toyota’s European Five-Year Environmental Action Plan for FY2006-2010 include:

• Management of CO2 emission levels from all of Toyota’s operations in Europe.• Reinforcing consolidated environmental management with all business partners, including

suppliers, retailer/repairers and NMSCs.• Promoting the effective use of resources to further contribute to the realization of a

recycling-based society.• Reducing and eliminating SOCs (substances of concern) based on European standards.• Enhancing collaboration with society, as a respected and recognized industrial leader.

Toyota’s European Five-Year Environmental Action Plan forFY2006 - 2010, currently under preparation, is a blueprint for thecompany’s contribution to the development of a sustainableEuropean society through corporate growth in harmony with society.

This five-year action plan also covers each EMC and NMSC,which draws up its own five-year plan. Based on the five-yearplans, annual plans are also created for all Toyota companies.

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Toyota's European Environment Committee


Currently, 14 National Marketing and Sales Companies(NMSCs) have obtained ISO 14001 certification, namely:

NMSC: ISO 14001certified since:

1. Sweden 19982. Great Britain 20013. The Netherlands 20034. France 20035. Italy 20036. Hungary 20047. Poland 20048. Spain 20049. Austria 2005

10. Finland 200511. Switzerland 200512. Belgium 200513. Denmark 200514. Germany 2005

An additional eight NMSCs have set up detailed plansand have started implementation in order to be certifiedby the end of FY2005. Newly acquired NMSCs will set upplans for certification during the next five-year planningperiod.

The ISO 14001 standard specifies requirements for environmental management systems, and requires companiesto develop and maintain a system that includes:

• Establishing an environmental policy;• Determining environmental aspects and impacts of their products, activities and services;• Planning environmental objectives and measurable targets; • Implementing programs to meet objectives and targets; • Checking and taking corrective action, and; • Conducting a management review.

ISO 14001 Implementation

The Toyota Environmental Management System is being imple-mented across all operations in Europe, all along the supply chain.

All plants and all European head office operations have an EMS inplace.

Production Plants

The transmission plant in Walbryzch, Poland, was the latest plantto be certified ISO 14001 compliant. The plant achieved certifi-cation in October 2003, which means that all plants in operationin Europe are now certified to meet the ISO 14001 standard. Thenew plants TMIP (in Poland) and TPCA (in the Czech Republic)are currently implementing ISO 14001 and expect certification byFY2006.

FY2002 FY2003 FY20040

1

2

3

4

5

6 PlannedCertified

Production Plants: ISO 14001 Certification

Num

ber

of p

lant

s

National Marketing and Sales Companies

FY2002 FY2003 FY20040

5

10

15

20

25

PlannedCertified

NMSCs: ISO 14001 Certification

Num

ber

of N

MS

Cs

Certification ceremony at Toyota Motor Poland.

Production Plants: ISO 14001 Certification

NMSCs: ISO 14001 Certification

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Logistics Centres

The following logistics centres have attained ISO 14001 certifica-tion. As can be seen in the tables, five additional vehicle logisticscentres and seven parts logistics centres achieved certification in

FY2003 and FY2004. A further three logistics centres have begunimplementing their EMS and expect to achieve certification by theend of FY2005.

Vehicle Logistics: ISO 14001certified since:

1. Zeebrugge, Belgium 20032. Derby, UK 20033. Grimsby, UK 20034. Valenciennes, France 20035. Malmö, Sweden 20046. Adapazari, Turkey 2004

Parts Logistics: ISO 14001certified since:

1. TPCE, Belgium 20012. TPCGB, UK 20013. TPCDK, Denmark 20024. TPCNO, Norway 20035. PDC, Switzerland 20036. PDC, Italy 20037. TPCAT, Austria 20048. TPCSF, France 20049. TPCFI, Finland 2005

10. TPCES, Spain 2005

FY2002 FY2003 FY20040

4

2

6

10

14

18

8

12

16

20PlannedCertified

Logistics Sites: ISO 14001 Certification

Num

ber

of s

ites

Suppliers

By the end of March 2005, over 85% of Toyota’s suppliers hadachieved ISO 14001/EMAS* certification – up from 66% at the endof FY2002 (suppliers subject to the Toyota EnvironmentalPurchasing Guidelines, see Social Engagement Chapter).

FY2002 FY2003 FY20040

100

50

150

250

350

200

300

400 To be confirmedPlannedCertified

Suppliers: ISO 14001 Certification

Num

ber

of S

uppl

iers

* The Eco-Management and Audit Scheme (EMAS) is the EU voluntary scheme for organisations willing to commit themselves to evaluate, improve and report on theirenvironmental performances. The scheme was launched in April 1995 and revised in 2001

Logistics Sites: ISO 14001 Certification

Suppliers: ISO 14001 Certidication14


Eco-efficiency refers to the volume of business activity per unit ofenvironmental impact, and is a guideline for reducing environmentalimpact through improvements in technology and economicefficiency.

Toyota will continue to seek a balance between environmental andeconomic effects in its efforts to control environmental impactand raise eco-efficiency.

For Toyota’s operations in Europe, “Sustainable Mobility”* – asdefined in the “Mobility 2030” Report prepared under the aus-pices of the World Business Council for SustainableDevelopment (WBCSD) – is a viable business case (see SocialEngagement Chapter).

Eco-efficiency =Net sales

Environmental impact

Eco-Efficiency & Environmental AccountingLinking Environmental Performance with Economic Performance

* Sustainable Mobility = the ability to meet society’s need to move freely, gain access, communicate, trade and establish relationships without sacrificing other human or ecological values, today or in the future.

Environmental Accounting

Although EU-wide directives on conventional financial reportinghave been applicable for many years, there are no equivalentrequirements with respect to corporate environmental disclosureand reporting of environmental costs per se. However, there hasbeen clear encouragement from the European Commission (EC)in this direction.

Toyota defines “Environmental Cost” as expenditures for the pur-pose of reducing the environmental impact caused by the com-pany's business activities.

Some articles of the EU End-of-Life Vehicle Directive, forexample, could have a bearing on the company’s economicperformance, or even turn out to be an environmental liability forthe company. The reduction and ban of certain heavy metals invehicles and components, or the imposition of responsibility forthe take-back of an end-of-life vehicle (at no cost to the lastowner/holder), have led Toyota to take concrete actions in Europeto switch over to non-SOC-containing vehicles and components(according to the requirements of the directive) and to set up thenecessary accruals to cover potential future costs related to thetake-back policy. These provisions are reviewed annually basedon the current and future Toyota car fleet in each country, andbased on detailed dismantling studies, taking into account materialprice fluctuations to evaluate and to simulate actual and futurepotential costs (or revenues) of end-of-life vehicles.

For Toyota’s European operations, and during the period coveredby this report (April 2003 to March 2005), there have been nofines, official notices of violation and/or enforcements by theauthorities with respect to Toyota’s legal compliance in the areasof hazardous materials and substances of concern.

Internal and external audits are regularly conducted to monitorand further reduce potential risks in these areas (see FY2004Environmental Action Plan).

Because Toyota operations in Europe have a fully integrated environ-mental management system based on the internationally recognisedISO 14001 standard, the actual cost of acquiring certification orre-certification, including the cost of the numerous internal andexternal audits that are either required or performed on a voluntarybasis, is quite high. However, this cost is considered negligible byToyota’s European management in view of the company’sestablished target of “zero” as the number of allowable majornon-compliances.

Another potential source of environmental cost is the purchasingof CO2 emissions allocations, which can become necessarywhen higher production offsets improvements in per-unit environ-mental performance. For example, for phase 1 of the EUEmissions Trading Scheme (EU ETS), covering allocations of CO2emissions for 2005-2007, the Toyota manufacturing plant inBurnaston, UK, is expected to emit more CO2 than allocated bythe UK authorities – due to rising production volumes, eventhough the amount of CO2 emitted per vehicle produced hasdecreased. This means that Toyota might need to purchase themissing allowances on the market.

Suppliers also must bear their share of environmental costs. Bysubscribing to Toyota’s “Environmental Purchasing Guidelines”(see Social Engagement Chapter), they agree to deliver onlySOC-free parts, materials and products to Toyota (withinthe requirements of the law) and to follow all regulations onhazardous materials with regard to storage, labelling andtransportation of hazardous goods.

Finally, an accurate environmental accounting should take intoconsideration the fact that costs are often offset by indirectrewards. Toyota in Europe has received “environmental-related”indirect subsidies or “incentives” in certain countries based onsales of low CO2-emitting hybrid vehicles (see Sales &Marketing/After Sales Chapter ).

15


“Sustainable mobility comes from minimising any negative impactderiving from the vehicle’s design. The Ultimate Eco-car is a targetfor all aspects of our design and development activity. We follow amulti-track approach with hybrid technology as our common threadwhile proactively addressing all surrounding issues that may have anegative environmental impact.”

Kazuhiko MiyaderaExecutive Vice-PresidentResearch & Development GroupToyota Motor Europe

3 Product Design & Development

Towards the Ultimate "Eco-Car"As discussed in the previous chapter on IntegratedEnvironmental Management, Toyota is committed to preservingthe environment while recognizing that mobility will nonethelesscontinue to play an essential role in the social, economic andindustrial development of the world. If current trends continue, itis estimated that the 740 million vehicles on the road today willnearly double by 2020, rising to 1.2 billion. It is up to the auto-motive industry to ensure that this growth does not lead to a

drastic increase in exhaust emissions – especially the greenhousegas, carbon dioxide (CO2). Toyota’s approach is to act today fortomorrow, following the vision of “Zeronize and Maximize”. To dothis, Toyota simultaneously explores a broad variety of technolo-gical solutions for developing cleaner, greener vehicles, each ofwhich is examined in detail in this chapter. Each promising newtechnology is a step forward towards the goal of sustainablemobility through the concept and strategy of the ultimate eco-car.

16


Toyota actively carries out LCA

CLEANER MANUFACTURING

To ensure the proper application of environmental best practice, Toyota has introduced a consolidated Environmental Management System (EMS), which governs all manufacturing operations as well as the entire supply chain. Such an initiative stems from a company-wide commitmentto make the complete life cycle of Toyota cars as environmentally friendly as possible.

• CO2 reduction • Reduction of waste generated • Energy saving • Reduction of substances of concerns

BETTER RECYCLING

Toyota recycle vision sets specific targets for improving vehicle recovery rates, increasing the use of recyclable resources, recycled material and used parts, and reducing use of substances of environmental concern.

• Design for better recyclability • Wider use of recycled materials • Development of efficient dismantling and recyclability

CLEANER DRIVING

Toyota is investing in a number of technologies in parallel and deploying the appropriate engine technologies to provide the customers with the right car for the right place at the right time.

• Exhaust emission reduction • CO2 reduction

Environmental issues

MethodologyLife Cycle Assessment – LCA

Toyota actively carries out Life Cycle Assessment (LCA) as a systematicapproach to assessing environmental performance over the entire lifecycle of its products. Toyota also established the Automobile Recycle

Technical Centre in Japan in 2001 with the purpose of working towardmore effective dismantling and recycling technologies, as well asdeveloping designs that facilitate and enhance recycling efforts.

This ideal target would generate zero emissions from its engineand be totally recyclable. Hydrogen fuel cells already have thepotential to provide practical, reliable, and affordable zero-emissionpropulsion, but commercialisation of this technology is still yearsaway. As exciting as the ideal is, it is nonetheless important tomeet the real needs of society today and tomorrow by providingcustomers with products that reflect the specific energy situation,infrastructure and regulations of each country and market, in

other words: the right car for the right place at the right time. Inthis chapter on product design and development, Toyota reportson how it has managed to develop innovative and practicaltechnologies that rationalise market demand for ever-increasingengine power, vehicle utility, increased safety and conveniencewith a minimal environmental impact – a feat previously consideredimpossible. Each of these achievements clearly reflects Toyota’svision of “Zeronize and Maximize” in application.

LCA involves analysing environmental impact during all phases of the vehicle’s life:

• Material production• Vehicle production• Driving• Maintenance• Disposal

17


In Europe, Toyota is investigating three main areas of the environmental impact of local product development:

1. CO2 and exhaust emissions; through a strategy for the reduction of total car fleet CO2 emissions and new technology for reducingexhaust emissions.

2. Substances of concern, such as heavy metals and other banned chemicals through a thorough analysis of their use, and thedevelopment of alternative technology proposals and their transmission to Toyota’s Research and Development division in Japan.

3. New vehicle recyclability; both through studies on the application of design for recycling as well as on the use of recycled materials.

Indexed comparison of CO2 emissions during the Prius life cycle

Petrol vehicle

Diesel vehicle

NG Prius

0 0.5 1.0

MaterialProduction

VehicleProduction

Driving Maintenance

15% reduction45% reduction

Disposal

Case Study – LCA of the new Toyota Prius LCA results show that with the new generation (NG) Prius, Toyotahas achieved a reduction of both exhaust emissions and CO2compared to the older generation Prius, not only during the driving

phase, but all throughout the vehicle life cycle, from production todisposal. CO2 emissions are also substantially lower in comparisonto diesel or petrol vehicles in the same class.

Comprehensive Environmental Impact Assessment – “Eco-VAS” Although LCA already represents a thorough approach to assessinga vehicle’s impact, Toyota wants to go even further. One of thetools developed by Toyota for accomplishing this challengingobjective is a comprehensive environmental impact assessmentsystem for calculating the burden of a vehicle on the environment.This new system, called Eco-VAS (Eco-Vehicle AssessmentSystem), makes it possible — throughout the entire vehicle developmentprocess — to systematically assess a vehicle’s environmentalburden as the result of its production, use and disposal. Eco-VASaims to heighten Toyota's vehicle-related environmental responses,in an effort to further reinforce its approach toward comprehensive

environmental impact assessment. Eco-VAS is based on theconcept of life cycle assessment (LCA) and will serve as avaluable environmental-management tool for those responsiblefor vehicle development at the company. TMC began implementingLCA for major vehicle series with the Estima Hybrid, launchedin June 2001. Eco-VAS is being implemented in earnest in2005 as part of Toyota’s efforts to promote initiatives for thedevelopment of a comprehensive prior assessment system. Toyotaplans to carry out comprehensive environmental impactassessments during the planning stage for all newly developedvehicles.

• Improved fuel efficiency • Reduced CO2 emissions • Each new Prius sold saves more than 1 tonne of CO2 every year

• Flexible Toyota Production System is applied during manufacturing process • Reduced energy consumption during manufacturing 31% cut in CO2 emissions • All factories have achieved ISO 14001 certification

• Using recyclable materials conserves resources • Reduced CO2 throughout the life cycle • The proportion of recyclable plastics has increased in NG Prius

Prius NG Prius Petrol Diesel NG Prius Primarymaterials

RecycledMaterials

Production Driving RecyclingComparison of CO2 emissions Comparison of CO2 emissions after driving 150,000 km Comparison of CO2 emissions during new material production

CO2 reduction in each stage of the life cycle

31% cut

Save 1 tonne of CO2 a year

18


Toyota’s strategy for improving its CO2 performances is based on:

• Technological developments, such as the improved fuel efficiency of both diesel and petrol engines discussed later in thischapter, and wider use of hybrid technology;

• Increasing consumer awareness of environmentally friendly vehicles through advertising and marketing. In the final ana-lysis, all of the advanced technology in the world will not help reduce CO2 emissions unless consumers make informedchoices to purchase vehicles offering an improved environmental performance. Toyota’s “Aim: Zero Emissions” corpora-te advertising campaign is an example of Toyota’s approach to this important role of raising consumer awareness. Formore information, please see the Sales & Marketing /After Sales Chapter.

Eco-VAS• At the very start of planning, the person responsible for a particular vehicle sets environmental impact reduction targets for

that vehicle. • Assessment of environmental impact is carried out covering a wide range of items, including fuel efficiency, emissions and

noise during vehicle use, the disposal recovery rate, the reduction of substances of environmental concern, and CO2 emissionsthroughout the entire life cycle of the vehicle from production to disposal.

• A computer network, which became operational in 2004, allows the project leader or other responsible person to accessan environmental database from a personal computer, check the status of target achievement, continually confirm results andobtain feedback during the entire development process, in order to assess vehicle recovery rates and the usage ofsubstances of environmental concern, and to carry out LCA.

• Using the Eco-VAS process improves the results of LCA. Through these processes, and under the direct management ofthe person in charge, necessary measures to reduce the environmental impact of each vehicle can be devised in the initialstages of development, facilitating steady development progress with an eye toward achieving targets and raising a vehicle'soverall environmental performance.

• Planning • Design and prototype

• Before start of production

• Customer demands • Special considerations by the chief engineer • Cost • Performance

Environmental performance

Vehicle planning to achieve a high level of coexistence for mutually contradictory matters

Steady progress toward target achievement

Disclosure of information to customers

Progressive assess-ment of the state of target attainment

Final verification of environmental performance

Rapid response

Persons in charge of vehicle development set environmental impact reduction targets for vehicles at the planning stage and continually check target-achievement status from the start of the development process through to the start of production.

Chiefengineer

CO2 EmissionsIn line with its commitments under the Kyoto Protocol, the EuropeanCommission (EC) has outlined a strategy to reduce CO2 emissionsfrom passenger cars and improve fuel economy.

An environmental agreement with the automobile industry is crucialto such a strategy, and some voluntary agreements are already inplace. The European Automobile Manufacturers Association (ACEA)Agreement seeks a gradual reduction in emissions from newvehicles sold in Europe to attain a target of 140g CO2/km by 2008.The Japanese Automobile Manufacturers Association (JAMA), of

which Toyota is a member, has signed a voluntary agreement withthe EC to reach a reduction target of 140g CO2/km by 2009, withan intermediate reduction of between 165g CO2/km and 175gCO2/km by 2003. JAMA achieved a figure of 171g CO2/km in 2003,which indicates that the association is on track to meet the target.These figures are based on actual sales data.

An emission level of 140g CO2/km is equivalent to an average fuelconsumption of 5.3 litres per 100 km for a diesel vehicle and 5.9litres per 100 km for a petrol vehicle.

Eco-VAS Operational Flow

19


Exhaust EmissionsThe EU has issued a series of directives on emission limits forboth petrol and diesel vehicles. Euro III applies to new passengervehicles sold after 1/1/2000; Euro IV applies to new vehicles as of1/1/2005. Toyota is responding to society’s demands for cleaneremissions by achieving steady reductions through engine com-bustion improvement and after-treatments. Toyota’s Engineering

Division in Japan as well as in Europe (Brussels, Belgium) carryout the research and great attention is paid to new Europeanregulations. For example, the Toyota Diesel Clean AdvancedTechnology (Toyota D-CAT) system has been developed to gowell beyond the Euro IV standard values for NOx and particulateemissions.

g/km CO (Carbon monoxide) HC (Hydrocarbons) NOx (Nitrogen oxides)

Euro III 2.300 0.200 0.150

Euro IV 1.000 0.100 0.080

Petrol

g/km CO NOx NOx + HC Particulate matter (PM)

Euro III 0.640 0.500 0.560 0.050

Euro IV 0.500 0.250 0.300 0.025

Diesel

* Measurements should be made over a cycle – or standard driving profile – so that each emission can be quantified in grammes per kilometre covered.

Emission Limits Set by Directives*

End-of-Life Vehicles (ELV)In order to comply with the European Union’s End-of-Life VehicleDirective, Toyota has a number of mechanisms in place. TheDirective includes a ban on certain heavy metals as well as

recycling and recovery targets. These are explained in more detailin the Recycling of Vehicles Chapter.

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009130

140

150

160

170

180

190

200 JAMAACEA

ASE (Average Standard Emission) Performanceg

CO

2 /

km

Sou

rce:

EU

, JA

MA

, AC

EA

20


Case Study: Clean PowerThe 177 DIN hp 2.2-litre D-4D inaugurates Toyota’s revolutio-nary new concept for diesel engines – Clean Power – nowpossible through the adoption of innovative diesel technolo-gies. Thanks to Toyota D-CAT, this Clean Power engine hasthe lowest combined NOx and PM emissions among all dieselengines on the market. But such eco-friendly results do notmean a sacrifice in performance and comfort. The unit leadsits segment in levels of power and torque, combined with thelowest noise, vibration and harshness (NVH) and, on average,20% lower fuel consumption among engines of equivalentpower.

The 2.2-litre D-4D engine is lighter than most engines in the1.9-2.2 category, thanks to its all-aluminium construction –still a rare feature among diesel engines in the segment. Cleverengineering – such as integrating the water and oil pump onthe chain cover, allowing for a 5% cut in the weight of the oilpump, and a 20% reduction in volume – has made the newengine 11% lighter than the current 2.0-litre D-4D available onthe Avensis.

Toyota’s new piezoelectric injectors are 10 times quickerthan solenoids when producing an injection, and can performup to five injections per cycle with single pilot injection at hotidle, and multiple injection at partial load. With piezoelectrictechnology, pilot injection timing can be optimised, leading toa major reduction in combustion noise.

Toyota D-CAT features a Diesel Particulate NOx Reduction(DPNR) four-way catalyst, which is the only after-treatmenttechnology in production that reduces NOx and PM simulta-neously via a combination of a NOx-reduction catalyst with aparticulate filter. The effective operation of the DPNR relies onthe engine management system varying the air-fuel ratio in theexhaust gases. To do this, a fifth injector, or Exhaust PortInjector (EPI), has been added and placed on the exhaust port.To perform the automatic catalyst generation, fuel is injectedinto the exhaust gas flow in order to create the right stoichio-metric conditions for the DPNR catalyst. This allows the DPNRcatalyst to reduce emissions.

DieselDiesel engines are more energy-efficient than petrol engines, havelower fuel consumption and emit less CO2 per kilometre. Theirdrawback, however, is higher emissions of nitrogen oxides (NOx)and particulate matter (PM). Toyota, however, has a long historyof developing technology for cleaner diesel engines. Its commonrail diesel engines (D-4D) are among the most fuel-efficient on themarket today. The Toyota Avensis was available with the first EuroIV diesel engine in its segment (D-segment). The Toyota D-CAT(Diesel Clean Advanced Technology) system is the only dieselafter-treatment in production which simultaneously reduces PM

and NOx. In January 2003, Toyota began building diesel engines at its engine plants in Valenciennes, France, and Deeside, UK.The French plant now has the capacity to assemble 30,000 unitsof the 1.4 D-4D diesel engine annually, and the UK plant over70,000 2.0 litre D-4D engines. In March 2005, the new engineplant in Poland started production of 2.0-litre diesel engines forthe Corolla, produced in the UK and Turkey, and for the ToyotaAvensis, built in the UK, as well as the 2.2-litre D-4D “CleanPower” engines for the Toyota Avensis.

Powertrain TechnologiesIt is customers’ use of the product – the actual driving of cars –that generates the largest portion of greenhouse gases (GHGs)emitted during a vehicle’s life cycle. Toyota makes every effort tosupply vehicles with advanced technologies that minimise fuelconsumption and the related GHG emissions.

Toyota’s engineers are continually researching every possible avenueleading towards the development of vehicles that produce feweremissions (both GHGs and other pollutants). The following sectiondescribes the latest developments being employed in diesel andpetrol engines, hybrid synergy drive and fuel cell technologies.

2003 Avensis (116 hp)2005 Avensis (177 hp)

0,00

0,05

0,10

0,15

0,20

0,25

NO

X, P

M g

/km

*

NOXPM

* According to 1999/100/EC

21


Petrol

Toyota has introduced advanced petrol direct-injection enginesfor the company’s core models, such as the Toyota Avensis, theToyota Yaris and the new Toyota AYGO.

The 2.0-litre direct-injection petrol engine for the Toyota Avensisis the latest derivative of the advanced direct-injection petrol unitavailable in the current model range. Now with a modified EngineControl Unit (ECU), it combines improved emission levels (redu-ced NOx) with better performance and acceleration, thanks to ahighly accurate fuel-metering system and the efficient combus-tion of the direct injection. Further improvements to this engine tomeet Euro IV emissions levels include an under-floor catalyst andan engine ECU that can retard the ignition of the engine during

cold starts in order to warm the catalyst more rapidly. The ToyotaYaris 1.0-litre (65 DIN hp) and 1.5-litre (105 DIN hp) engines havebeen upgraded to full Euro IV standards thanks to new pistondesigns, an improved exhaust manifold and catalytic converter,and alterations to the engine’s ECU. The new Toyota Yaris 1.3-litre engine, which already complies with Euro IV standards, isnow more powerful than its predecessor.

A 1.0 VVT-i 3-cylinder petrol engine has been developed for thenew Toyota AYGO, which arrived on the European market inMarch 2005. Compact and fuel-efficient, this new Toyota modelalso features advanced safety and environmental protection tech-nologies (see Case Study: Light-Weight Petrol Power).

Case Study: Light-Weight Petrol PowerThe new Toyota AYGO has a 1.0 VVT-i 3-cylinder petrol engine and boasts the following key features:

• Lightest passenger car engine (69kg)o Engine block and cylinder head entirely produced in aluminiumo Engine cover and intake system built as a single module

• Higher low- to mid-range torque than Yaris 1.0o Optimised intake systemo Optimal diameter for the intake porto Optimal intake manifoldo VVT-i action favours low- to mid-range torque

• Class-leading fuel consumption and CO2 for petrol engines o Three-cylinder configuration (less friction losses)o Low-tension piston rings and new piston coatingo Adoption of offset crankshaft and VVT-i

Due to its advanced conception and light weight, fuel consumption and CO2 emissions are extremely low:

• Combined fuel consumption: 4.6 l/100km• Combined CO2 emissions: 109 g/km

Toyota AYGO

22


Next Generation TechnologiesIn 1997, Toyota launched the Toyota Prius, the world’s firstmass-produced hybrid vehicle. Toyota believes that althoughdiesel and petrol engines will remain the dominant technologyin Europe for the next decade or more, hybr id and

f u e l cell technology will progressively take their placebeside them as mainstream technologies. By the end ofMarch 2005, Toyota had sold over 360,000 hybrid vehiclesworldwide.

Hybrid Synergy Drive

Hybrid Synergy Drive is the most promising solution for realisingenvironmental benefits as well as driving performance. A hybridsystem combines the power of a conventional engine with theefficiency of an electric motor. It is, in fact, the most efficient wayof blending the old with the new; keeping the performancebenefits of petrol, while enjoying the environmental advantagesof clean, electric power. Toyota’s hybrid technology has beendeveloped in-house. In the field of electric vehicles, which rely

on a battery and a motor for their power source, Toyota hasamassed an array of technologies such as high-performancebatteries, high-output compact motors, motor controls andregenerative brakes. With further improvements to electricvehicle technology, combined with hybrid control technology,Toyota launched its revolutionary petrol hybrid vehicles.The Toyota Prius has now been joined by the newlylaunched Lexus RX400h.

How it works: no need to plug in

Electricity for Auxiliary lampAirconditioner

Audio

Engine operating withmaximum efficiency

Energy

Engine turns off

Deceleration

Chargingenergy

Chargingenergy

Battery

Store energy

Ene

rgy

Electric motor

Internal combustion engine

Energy source:

23


The Lexus RX400h also shows the potential of hybrid technology,offering a new driving experience as well as outstanding envi-

ronmental performance. It’s V6 engine has the performance of aV8, yet delivers the efficiency of a four-cylinder engine.

180 200 220 240 260 280 300 320 340 360

7

8

9

10

11

12

Lexus RX400h

13

Acc

eler

atio

n tim

e (0

-100

km

/h)

High power dieselterritory

V8 petrolterritory

V6 petrolterritory

Dieselterritory

Combined CO2 (g/km)

Case Study: Lexus RX400h

24

Outstanding in low CO2 emissions


Fuel Cell Technologies

With further assimilation of the fuel cell vehicle technologycomes the fusing of the Toyota Fuel Cell stack and thehybrid technology, creating the Toyota Fuel Cell HybridVehicle (FCHV). This truly is the way forward towards theultimate eco-car. The FCHV achieves high vehicle efficiency,

while offering a smooth and quiet drive. The FCHV wasmade commercially available in December 2002 - anotherworld first from Toyota - and gained Japanese type approvalin July 2005. The FCHV is currently only available in Japanand the USA.

Key components of Toyota’s FCHV

Precisely controls the electric power distribution between fuel cell, motor

and battery

(In-house development)

Power Control Unit

Stores recovered energy and supplements fuel cell output

during acceleration

Battery

Stores recovered energy and supplements fuel cell output

during acceleration

High-pressure Hydrogen Tank

Generates electricity from hydrogen and the oxygen in the air


Toyota FC Stack

Generates the vehicle’s propulsive force. During deceleration it functions as an electrical generator to recover

kinetic energy.


Motor

Hydrogen fueling receptacle

Comparison of Well to Wheel CO2 Emissions(Petrol vehicle = 1.0)

PetrolVehicle

DieselVehicle

Prius

FCHVNatural gas > H2

FCHVH2O > H2

(by solar)

0.2 0.4 0.6 0.8 1.0

Japanese 10-15 Mode - test cycle

Well to tankTank to Wheel(calculated by Toyota)

25

Technical specifications

Overall length/width/height (mm) 4735/1815/1685

Seating capacity 5

Max cruising distance (km) * 300

Maximum speed (km/h) 155

Vehicle

Performance

Fuel Cell Name Toyota FC Stack

Type Polymer Electrolyte

Output (kW) 90

* Japanese 10-15 Mode - test cycle

Motor Type Permanent Magnet

Maximum output (kW) 80

Maximum torque (Nm) 260

Fuel Type Hydrogen

Storage system High pressure H2 tank

Max storage capacity (MPa) 35

Battery Type NiMH


Environmental Vehicle Impact DataThe table below presents data for a sample of Toyota and Lexusvehicles available on the European market. The models presentedwere the best-selling variant of the best-selling models in 2004,as well as the new generation Toyota Prius and Lexus RX400h.

Three of the models have already achieved fuel consumption andCO2 emission levels significantly under those set by the EU’sVoluntary Agreement with JAMA for 2009, and seven of them fall

below the intermediate JAMA target of 165-175g CO2/km. Allbut five of the models comply with the Euro IV standard well inadvance of the deadline, and the remaining models will meet theEuro IV standard by the compulsory date of 31 December 2005.

For details on other models please consult local retailers orToyota’s European website: www.toyota-europe.comLexus’ European website: www.lexus-europe.com

26

Model Model Type Engine Fuel Fuel CO2 European NoiseType Consumption Emission Drive-by

[l/100km] [g/km] Standard [dB-A]

Toyota Prius Sedan 1.5 VVT-i Hybrid Petrol 4.3 104 Euro IV 69

Toyota AYGO Hatchback 1.0 VVT-i 5M/T Petrol 4.6 109 Euro IV 70

Toyota Yaris HB - 5-door 1.0 VVT-i 5M/T Petrol 5.6 134 Euro IV 70

HB - 5-door 1.4 D-4D 5M/T Diesel 4.2 113 Euro III 69

Toyota Corolla HB - 5-door 1.4 VVT-i 5M/T Petrol 6.7 159 Euro IV 73

HB - 5-door 2.0 D-4D 5M/T Diesel 5.7 151 Euro IV 73

Toyota Avensis Liftback 1.8 VVT-i 4A/T Petrol 7.7 187 Euro IV 71

Wagon 2.0 D-4D 5M/T Diesel 6.0 158 Euro IV 72

Toyota RAV4 5-door 2.0 VVT-i 5M/T Petrol 8.8 211 Euro IV 72

5-door 2.0 D-4D 5M/T Diesel 7.1 190 Euro III 73

Toyota Land 5-door 4.0 V6 VVT-i 4A/T Petrol 12.6 301 Euro III 73Cruiser

5-door 3.0 D-4D 5M/T Diesel 9.0 242 Euro III 71

Lexus IS200 Sedan 2.0 VVT-i 6M/T Petrol 9.7 231 Euro III 72

Lexus RX300 5-door 3.0 VVT-i 5A/T Petrol 12.2 288 Euro IV 74

Lexus RX400h 5-door 3.3 V6 VVT-i Hybrid Petrol 8.1 192 `Euro IV 71


European Production Capacity Increase“Towards Sustainable Production” means building an operationalstructure that is less vulnerable to currency fluctuations, and thatmakes a tangible contribution to the societies in which Toyotadoes business. Toyota believes it can successfully combineincreased output and profitability with measures that actuallyreduce the impact on the environment. This is reflected in thecontinued progress towards Toyota’s aim of “Zero Emissions”production. In February 2005, a joint-venture plant with PSAPeugeot Citroen launched production of the Toyota Aygo in Kolìn,Czech Republic. The Aygo will make up one-third of the plant’stotal 300,000-unit production capacity. The transmission plant in

Walbrzych, Poland, has been expanded to include new castingand engine lines. This site is now producing engines and transmis-sions for the AYGO, Yaris, Corolla and Avensis models manufacturedin Europe. Toyota has also opened a second engine plant inJelcz-Laskowice, Poland. The plant has begun to supply 2.0-litreand 2.2-litre diesel engines for the Toyota Corolla, Corolla Versoand Avensis vehicles made in the UK and in Turkey. The plant hasa production capacity of 180,000 units/year. During 2004, capacityat the assembly plants in France and the UK was expanded. Intotal, Toyota now has an annual production capacity in Europe ofabout 775,000 vehicles.

"As Toyota's production capacity increases significantly in Europe, wecontinue to actively demonstrate our commitment to the protection ofthe environment. Each production plant’s Management System fullyincorporates the principles of the Toyota Global Earth Charter and prac-tices the values of ‘green, clean and lean’. To achieve the best environmen-tal manufacturing performance, we strive to:• Develop our members as environmental ‘champions’• Achieve zero waste to landfill, promoting a recycling society• Adopt best practice to minimise the impact of climate change• Minimise the use of all natural resources • Promote the use of the most environmentally friendly materials." Alan Jones

Executive Vice-PresidentToyota Motor Europe& Chairman TMUK

4 Production

Environmental Impact from Production

Input

Total energy consumption930,496 MWh

Water consumption1,521,764 m 3

Volume of gases emitted

256,668 tonnes CO21,905 tonnes VOCs

Total amount of waste water

1,149,228 m 3

Volume of generated (tonnes)

Total volume (100,342)Volume recycled (94,650)Volume to landfi ll (1,680)Volume treated (4,011)

Press Welding Painting

Casting Machine Processing

Engine, Transmissions,...

Assembly

Volume of resources input and volume of substances released into the environment in 2004

waste

27


Annual targets are set by each plant for each key performan-ce indicator, and data is reported on a monthly basis toToyota’s European Head Office via an intranet-based system.This ensures that the progress towards achieving our “ThirdEnvironmental Action Plan FY 2001-2005” targets can beclosely monitored and evaluated. This year’s report highlightsthe progress made against the 5-year target for each keyperformance indicator. To support the achievement of thesetargets, Toyota introduced the Yokoten concept in Europe in

2003. Yokoten is a Japanese word that roughly translatesto “best practice sharing”. Yokoten was strengthenedthrough the work and regular quarterly meetings of theProduction Working Group, which is made up of represen-tatives of all plants and reports directly to Toyota’sEuropean top management. With careful attention paid to“Best Practice” at all of Toyota’s European production facilities,Yokoten helps to ensure that all plants “level up” to the bestperformance in the group.

Environmental Yokoten (best practice sharing) between Toyota’s European manufacturing sites.

The six key performance indicators are:

1. Energy usage 2. Water usage 3. VOCs (volatile organic compounds) released from painting operations4. Reducing waste5. Degree of compliance with environmental regulations6. Number of complaints from external (neighbourhood) parties

The manufacturing of cars, engines and transmissions has apotentially significant impact on the environment. Toyota hastherefore established a set of key environmental performance

indicators (KPIs) for each of the most significant aspects ofproduction, and this chapter provides a summary of eacharea in turn.

28

Production line at TMMF.


0

500

1000

1500

2000

2001 2002 2003 2004

2500

2005

-35%

Target* (1750kWh/vehicle)

Fiscal year 2001 2002 2003 2004

Number of plants included 4 5 5 5

Data (kWh/unit) 2,424 1,949 1,697 1,560

Consolidated Data

All of Toyota’s plants in Europe have made valuable contributionstowards achieving their targets by continuously seeking ways tomake step-by-step improvements (Kaizen) in electricity and gasusage. As the following graph shows, our focus on reducing energyusage has already succeeded in us achieving our ‘ThirdEnvironmental Action Plan FY2001-2005’ target of 1750kWh/vehicle, and therefore further reduction targets have been set.

In 2003 and 2004, reductions in compressed air usage and impro-vements in the efficiency of heating, ventilation and air-conditioning(HVAC) systems were carried out. In general, energy savings andthe effect of increased production volumes have resulted in a 35%reduction in energy usage since 2001 - to 1560 kWh/vehicle in2004.

Energy Use – Best PracticeAt most Toyota plants, a series of compressors is neededto supply compressed air to hand-tools and machinery.The difference between normal and peak demands

usually means that the last compressor is used intermit-tently. This often presents an opportunity to improveenergy efficiency.

TMMT (Toyota Motor Manufacturing Turkey)

At TMMT, all compressors initially were turbo compressors,which release excess compressed air into the atmosphere intimes of low demand. Applying Yokoten (knowledge transfer)based on the experience of Toyota’s UK plants, TMMTexchanged the third compressor with a variable-speed-drivecompressor, which automatically adjusts the amount ofcompressed air supplied to meet the current demand, therebyreducing overall energy consumption by 12%.

TMUK – Burnaston (Toyota Motor Manufacturing UK)

At the Weld Shop in TMUK, production robots and hand tools were powered by compressed air, which is a convenient wayof supplying power to equipment. While compressed air iseffective, it is not the most energy efficient method, with 12times more electricity needed to power the air compressorthan is used by electricity powered equipment. Through theinstallation of a new Global Body Line at TMUK, compressedair usage in the Weld Shop has been reduced by 35%.

68.7 60.440

60

80

20

Old Compressor New Compressor

kWh

/ c

ar

Saving 12.1%

Before After

Air

use

per

car

(N

m3 )

35% reductionafter GBL 1 launch

Energy Usage

29

Energy consumption (kWh/unit)

VSD Compressor Application Result

Weld Shop compressed Air Use

* The 2005 target was set in 2001 as part of the Environmental Action Plan FY2001-2005. As the 2005 target has already been achieved, stricter targets have been set for FY 2005.


Water UsageToyota’s continuing efforts in the area of water conservation haveyielded a steadily declining per-unit figure for water use. In 2004water use was reduced to an all-time low of 2.6 m3 / vehicle,which is 13% below our ‘Third Environmental Action Plan FY2001-2005’ target. The decrease in water use in 2003 and 2004was mainly due to improvements in the efficiency of reverse-osmosis units and improved cleaning of surface-treatment dip-tanks. The re-use of wastewater as boiler raw-water feed and theeffect of increased production volumes have also contributed tothis 25% reduction since 2001.

2001 2002 2003 20040

1

2

3

4

5

2005 Target* (3m3/vehicle)

-25%

Water Use – Best PracticeAt Toyota’s vehicle paint shops, a series of dip-tanks is used tocoat the car bodies with water-based, anti-corrosive paint.Wastewater is treated through an ion-exchange resin andrecycled from one dip-tank to another. To maintain paintquality, the dip-tanks and ion-exchange resin need to becleaned and refilled from time to time. Lengthening the periodsof time between cleanings can lead to significant watersavings.

In 2004, Toyota’s production facility in France (TMMF) achievedjust such savings. By making several modifications to theramps that guide the car bodies into the dip tank, the concen-tration of the paint mixture in the tanks could be reduced,which in turn led to a reduction in the required number ofcleanings with the ion-exchange resin.

All together, TMMF’s conservation measures have contributedto a 40% drop in water consumption since 2001.

Fiscal year 2001 2002 2003 2004


Data (m3/unit) 3.5 3.2 2.9 2.6

Consolidated Data

Water consumption (m3/unit)

30

* The 2005 target was set in 2001 as part of the Environmental Action Plan FY 2001-2005. As the 2005 target has already been achieved,stricter targets have been set for FY 2005.


VOC - Best PracticeAt Toyota’s paint shops, a series of robots are used to coat thecar bodies with the different layers of paint. To maintain thequality of paint finish, the paint guns need to be flushed fromtime to time – either to change paint colour, or to prevent smallparticles or “seeds” from forming. Typically, solvent is used toflush the robots, but this leads to the emission of VOCs.

During 2003 and 2004, TMUK worked on optimising the useof solvent in their flush cycles. Previously, solvent was pulsedthrough the paint gun to clean the spray bell. Between pulses,the solvent was redirected to a recovery tank.

Benefiting from Yokoten (knowledge transfer) based onexperience at other Toyota plants, TMUK was able to switch toa less-frequent flush cycle that uses just one short pulse ofsolvent through the spray bell. This allows more solvent to beredirected to the recovery tank, resulting in a solvent reductionof almost 160 litres per week.

Colour Change Valve (CCV)

Spray Bell

FlushSolvent

SolventRecovery

Avoid solvent into paint booth

Paint

VOC (Volatile Organic Compound)Yokoten (knowledge transfer) once again played an important rolewhen the Production Working Group decided to sponsor aseries of investigations by Toyota’s global expert on VOC emis-sions to uncover further means of reducing VOC emissions at thecompany’s European plants. Implementing knowledge gainedfrom experience across the group contributed substantially to theimprovements that were realised during 2004.

Volatile organic compounds (VOCs) are released into the air whenorganic solvents – a constituent of many paints and sealers usedin vehicle manufacturing – evaporate. Some VOCs may causeground level ozone contributing to the creation of urban smog.

VOC emissions from Toyota’s three paint shops in Europe fell toan average of 34.3 g/m2 in 2004. The 9% reduction in total VOCemissions since 2001 is mainly due to a reduction of the solventused for cleaning and improved solvent recycling and recovery.The introduction of robots that use paint cartridges and thereforerequire less solvent rinsing has also contributed to this reductionand will ensure that the ‘Third Environmental Action Plan 2001-2005’ of 34.1 g/m2 can be achieved in 2005.

-9%

2005 Target (34.1 g/m2)

2001 2002 2003 20040

10

20

30

40

50

Fiscal year 2001 2002 2003 2004

Number of plants included 3 3 3 3*

Data (g/m2) 37.7 37.5 35.6 34.3

* Toyota only operates three paint shops in Europe.

Consolidated Data

Paint cartridge robots at Toyota’s European manufacturing sites.

Paint shop VOC emissions (g/m2)

31


Reducing Waste Since 2001, Toyota has been successful in reducing its total land-fill waste from all European plants by 65%, to 2.8 kg/vehicle in2004, down from 8.1 kg/vehicle in 2001. This was a direct resultof the achievement of the Zero Waste to Landfill* objective atToyota’s plants in France and the UK.

Reducing the amount of waste still further has been challenging.Nevertheless, in 2003 and 2004, enhanced waste segregationand recycling resulted in further reductions. The plant atWalbrzych, Poland, has set a target of Zero Waste to Landfill forFY2005.

This target will be achieved by involving all plant employees ina review and analysis of the wastes currently going to landfilland by the application of the principles of Yokoten and Kaizen(continuous improvement) to reuse or recycle any wastes thatcannot be eliminated.

2005 Target* (4.7 kg/vehicle)

-65%

2001 2002 2003 20040

4

8

10

6

2

Reduction of Waste - Best Practice

Not only does Toyota strive to reduce the amount of waste going to landfill, but also thetotal amount of waste. One such example is from TMMP, Toyota’s engine and transmis-sion plant in Poland.

Machining plants use a lot of oil and coolant to maintain correct cutting temperatures,prolong tool life and achieve the required surface finish. Toyota’s engine and transmissionplants, therefore, are continually looking for opportunities to use oil and coolant moreefficiently. At TMMP, a large amount of lubricant oil was being lost along with the cutmetal chips from the machining lines. This oil could regularly be seen settling in the metalchip collection containers.

TMMP added a metal mesh wall to all collection containers so that the coolant oil couldbe drained off and reused. This modification currently reduces waste oil by 400 litres permonth at TMMP.

Before

After

Fiscal year 2001 2002 2003 2004


Data (kg/unit) 8.1 2.5 2.4 2.8

* Zero Waste to Landfill is defined as <3% of waste in the baseline year.

Consolidated Data

Waste to Landfill (kg/unit)

32

* The 2005 target was set in 2001 as part of the Environmental ActionPlan FY 2001-2005. As the 2005 target has already been achieved,stricter targets have been set for FY 2005.

Waste segregation at TMUK


Initiatives to Reduce Environmental RiskIn order to ensure strict compliance with legal standards Toyotahas further enhanced its proactive approach towards minimisingthe risk of a legal non-compliance.

At each of our European manufacturing facilities, the environmentaldepartment has been working closely with production departmentsto identify where any further improvements can be made in thedaily control and operation of significant environmental equipmentsuch as waste water treatment plants or thermal oxidisers, and toreduce the potential risk of soil and groundwater contaminationfor example from bulk chemical storage and handling.

For each significant piece of environmental equipment, a processcontrol standard has been developed to strengthen the linkbetween the legal standards and the key control parametersthat must be controlled to ensure strict legal compliance. Forexample, internal control limits have been tightened, and the riskof spillage has been reduced by improving the design of secon-dary containment used for spillage retention.

In support of this activity, training has been provided to each plant,to share best practice and to help enhance their skill and knowledgein managing the risks associated with manufacturing operations.

Internal audits have been undertaken at each of our Europeanmanufacturing facilities to follow-up and verify this activity.

In parallel to this activity, the environmental design of new pro-cesses has also been improved through the implementation of anaudit system that verifies environmental standards have beenincorporated into the design of new equipment such as dust col-lectors or oil containment for new presses.

As a result of these activities, there have been no legal non-compliances (fines, prosecutions or notices of violation) fromToyota’s manufacturing operations in Europe in 2004. Therehave also been no incidences of leakage to soil or groundwatercontamination that presented a danger to the environment.

Absolute Emissions FY2002 FY 2003 FY 2004Total CO2 (1,000 tonnes)(6) 203 234 257Total Waste to Landfill (tonnes) 1,179 1,252 1,680Total Solvent Emissions (tonnes) 1,368 1,672 1,905Total Water Usage (1,000 m3) 1,337 1,496 1,522

Other IndicatorsTotal Energy Usage (MWh) 817,943 873,611 930,496Total Waste (tonnes)(3) 11,272 13,464 14,789Total Number of Complaints 0 2 1

Legal ComplianceTotal Number of Fines 0 0 0Total Number of Prosecutions 0 0 0

(2)

(2)

(2)

(5)(4)

(1)

Key performance indicators have been devised to identify thesignificant environmental aspects of Toyota’s manufacturing operationsand to track performance. Consolidated targets for FY2005 havebeen set and targets for 2010 are now being developed.

Absolute figures have increased due to increased production.However, looking at the per-vehicle data on the previous pages,it is clear that significant improvements in environmental perfor-mance continue to be made.

(1) FY2002 is 12 months at all plants except France, where performance data has been calculated using data from January 2002 to March 2003.(2) Data has been corrected since publishing the 2004 Update (3) Excludes scrap steel at all plants and some recycled wastes for which revenue was gained.(4) One noise complaint and one odour complaint.(5) One noise complaint was received and fully investigated. This was attributed to a temporary contractor activity. Immediate corrective measures were implemented

and confirmed with the complainant. No subsequent complaints have been received.(6) This includes direct emissions from fuels and indirect emissions from purchased electricity

Key Environmental Performance Indicators33

Risk reduction audit at TMMT


Toyota’s European Manufacturing - Overview

Plant Location: Valenciennes, France

2004 Production: 203,880 units (Yaris)

Start of Production: 2001

Number of Employees: approx. 3,250

ISO 14001 Certification: 2002

Toyota Motor Manufacturing France (TMMF)

Plant Location: Nehirkent/Adapazari, Turkey

2004 Production: 134,380 units (Corolla Verso, sedan and station wagon)


Number of Employees: 3,126


Toyota Motor Manufacturing Turkey (TMMT)

Plant Location: Walbrzych, Poland

2004 Production: 195,163 gasoline engines and manual transmissions




Toyota Motor Manufacturing Poland (TMMP)

Plant Location: Jelcz-Laskowice, Poland

Production: diesel engines


Number of Employees: 330

ISO 14001 Certification: Planned 2006 (no data in this report)

Toyota Motor Industries Poland (TMIP)

Plant Location: Deeside, UK

2004 Production: 109,320 engines


Number of Employees: approx. 859


Toyota Motor Manufacturing UK (TMUK) Engine Plant

Plant Location: Burnaston, UK

2004 Production: 244,435 units (Corolla Hatchback & Avensis)


Number of Employees: 4,500


Toyota Motor Manufacturing UK (TMUK) Vehicle Plant

Plant Location: Kolin, Czech Republic

Production: Toyota AYGO, Citroën C1, Peugeot 107



ISO 14001 Certification: Planned 2005 (no data in this report)

Toyota Peugeot Citroën Automobile Czech (TPCA)

34


“Reducing emissions from vehicles and production alone is notenough to reduce Toyota’s overall global emissions. Also non-production areas, such as logistics, must take measures to reduceCO2 emissions.”

TMC Environmental CommitteeOctober 2004Fujio ChoPresidentToyota Motor Corporation

The auto industry relies on a great deal of logistical support.From the transport of parts and materials to the production sites andretailers, to the delivery of the finished product to the customer, theefficiency of logistics operations and methods represents a significantcontribution to an automaker’s environmental balance sheet.

Toyota carefully studies all available logistics options in order toensure that the most efficient and environmentally responsiblemethods and processes are favoured. Modes of transport withthe least environmental impact are selected whenever possible.And both deliveries and returns of parts are always organisedwith an eye to maximising the efficient use of logistics materialsand resources.

Proximity is another important factor. Toyota locates its regionalparts depots as close as possible both to suppliers and end-customers. This not only helps to keep a finger on the pulse ofmarket trends, it also ensures that logistics resources are neverstretched unnecessarily. In addition, Toyota introduces localenvironmental initiatives in the communities in which it hasmajor logistics operations.

The efficient and environmentally conscious management oflogistics operations represents another way in which Toyotaseeks to become a leader in environmentally sustainable economicdevelopment.

5 Logistics

35

Zeebrugge Vehicle Centre Toyota Parts Centre Europe


The VLG’s management has introduced additional specific environmental guidelines for all its employees:

• Increased employee awareness – requiring full understanding of the Toyota Earth Charter and TME EnvironmentalPolicy as well as a clear understanding by individual employees of the impact of their own activities on the environment.

• Prioritising emissions reduction – by selecting routes and modes of transport whenever possible to minimise productionof CO2, notably by increased use of rail transport.

• Zero Waste – implementing waste planning to reduce the amount of waste produced by logistics activities and consequentlythe amount of waste going to landfill sites. Waste planning guidelines include:

o Improved waste segregation for more cost-efficient recycling.o An increase in the number of specific waste “streams” (to achieve a higher percentage of recyclable wastes).o Waste reduction (via recyclable packaging, etc.).

Vehicle Logistics

General Logistics Process

The Vehicle Logistics Group (VLG) has continued to expand andis experiencing rapid growth throughout Europe. The group nowhas operations in Belgium, France, the UK, Sweden, Turkey,Finland and most recently, the Czech Republic.

The logistics hubs handle not only the import and export of newfinished vehicles, but also their preparation – that is, the customi-sing of orders with options and accessories – before transporta-tion to the final delivery points. A variety of waste streams are thusgenerated at the hubs (for example, when factory-standard texti-le seat covers are replaced with leather ones, or metal wheels arereplaced with alloy wheels).

Vehicles and parts are transported from one location to the nextusing vessel, truck and rail.

To ensure a fully coordinated corporate approach to the potentialenvironmental impact of its expanding operations, Toyota MotorEuope’s VLG is implementing the ISO 14001 international envi-ronmental standard for all its operations. This implementationprogramme ensures that operational activities fully comply with

environmental regulations in each country and that essential pro-cedures for processing waste produced and controlling the useof resources and hazardous chemicals are fully covered. Theseefforts aim to minimise the environmental impact of operationalactivities on the surrounding area.

Erik Van De WieleDirectorVehicle LogisticsToyota Motor Europe

Ludo VanderveldenVice-PresidentIT & Vehicle LogisticsToyota Motor Europe

36

"With ISO14001 certification for all our operationalunits, the Vehicle Logistics Group has committed to fullcompliance with environmental legislation. Inaddition, we have introduced guidelines for ouremployees to actively contribute to a reduction in CO2emissions and the amount of waste produced andgoing to landfill sites."

Zeebrugge Vehicle Centre


In line with the VLG master plan, the team’s ultimate objectives include such specific items as:

• Maintenance/implementation of ISO 14001 certification for VLG hubs (including the updating of procedures/processesin accordance with any modifications to the ISO 14001 standards).

• Improved employee awareness of environmental concerns (via specific VLG environmental awareness posters).• Reduction in resource usage.• Waste reduction.

Absolute CO2 Emissions 55,669 tonnes

Information is given by our transportation contractors and calculation factors areprovided by DEFRA. The data includes transportation from either the port of entryfrom Japan or from our production plants in Europe all the way to the retailer deliverypoint.

CO2 Emissions - Vehicle Logistics 2004

An inventory was started in 2004 to track the amounts of CO2emissions from the vehicle logistics process. With this inventory,data is now available to investigate where reductions can bemade. Many different solutions have been looked into and imple-mented, such as optimised route planning and changing trans-port modes, mainly increasing the use of rail.

On-Site Environmental Actions

As Toyota’s VLG operations continue to expand, so does theirpotential impact on the environment. Therefore, in addition to theapproved plans and programmes outlined above, VLG has nowcreated an Environmental Team to further contribute to themonitoring, control and improvement of its environmental proce-dures, thereby reducing the potential impact in this area.

The VLG Environmental Team was formed at the start of 2005.The team’s primary objective is not only across-the-boardmaintenance of ISO 14001 certification for existing logisticsfacilities, but also support for the certification efforts of all futurefacilities across Europe. The team is also responsible for definingspecific VLG environmental objectives, implementing them atevery hub and monitoring the consequent improvements.

Made up of representatives from all of VLG’s Europeanlogistics hubs and from across all functions, the team benefitsfrom the operational and environmental experiences ofeach member. Regular meetings are held at each of thehubs in Europe.

This provides representatives with the opportunity to gainfirsthand experience of innovative new operations andenvironmental activities on a pan-European basis (GenchiGenbutsu, or going to the source), allowing them to practiceYokoten (knowledge transfer) through the sharing ofbest practices in al l aspects of logistics operations, butespecial ly with respect to the environmental impact ofVLG’s activit ies.

6,045

22,065

27,558

Truck

Vessel

Rail

VLG Environmental Team meeting

Vehicle Logistics:Total CO2 emissions (tonnes) per transport mode (2004)

37


Parts Logistics"In the area of logistics, reducing environmentalimpact and cost go hand-in-hand. Therefore, redou-bling our efforts on ‘green’ issues not only improvesour environment but also contributes to the bottomline. CO2 reduction is our duty.”

Norio HayakawaSenior General ManagerProduction & Logistics ControlToyota Motor EuropeGeneral Logistics Process

The distribution of parts within Europe is organised in two differentflows. The first is distribution from suppliers to manufacturingplants for assembly of vehicles, engines and transmissions. Thesecond is distribution of spare parts and accessories to retailers.Fairly unique to Toyota is that the delivery of parts to both plantsand retailers is the responsibility of Toyota and not the suppliers.This allows for more efficient and optimised route planning andcontrol. It also gives more control as to tracking and reducing CO2

emissions.

An inventory was started in 2004 to track the amounts of CO2

emissions from the parts logistics process. With this inventory,data is now available to investigate where reductions can bemade. Many different solutions have been looked into and imple-mented, such as improving load capacity, optimising route plan-ning and changing transport modes. Two specific projects ofchanging transport modes are highlighted as case studies in thefollowing pages. Also, absolute reduction targets are being set for thenext 5-Year Environmental Action Plan (FY 2006 – 2010).

2003 2004

Carton (kg) 438,198 776,347Wood (kg) 646,933 1,239,732Plastic (kg) 15,197 34,869

Total (kg) 1,100,327 2,050,948

The distribution of spare parts and accessories to retailers ishandled by regional depots and by national parts distributioncentres. The replenishment of these depots is done from partscentres in Japan and from TPCE, as well as directly from localsuppliers.

As successive logistics hubs have earned ISO 14001 certification (see list of certification dates by logistics hub,Environmental Management Chapter), activities aimed at redu-cing the environmental impact of spare parts logistics operationshave been increasingly enhanced. These activities include thestorage, physical handling and transport of hazardous materialsaccording to the highest standards and all applicable legislation,prevention of chemical contamination of the soil or groundwater, as well as elimination of risks for the people involved inToyota’s logistics operations. It also includes continuous effortsto reduce packaging waste wherever possible, in line with thecompany’s Environmental Policy. With the continuous introduc-tion of more and more returnable packaging, TPCE alone pre-vented the use and waste of 2050 tonnes of packaging materialin 2004, as can be seen in the following table. This represents an86% improvement over 2003.

Returnable Packaging:Prevention of packaging waste due to increased use of returnable packaging

Absolute CO2 Emissions 121,298 tonnes

Information is given by our transportation contractors and calculation factors providedby DEFRA. The data includes transportation from either our production plants orsuppliers, through our parts logistics depots all the way to the retailer and repairer.

CO2 Emissions - Parts Logistics 2004

38

Bas KasteelDirectorParts Supply ChainToyota Motor Europe


Further actions are planned to reduce CO2 emissions, including:

• Increased load density through better packaging, stacking and loading.• Optimised planning of transport modes.• Use of bio-fuel by the transportation contractor’s trucks.

To reduce CO2 emissions from the transportation of parts formanufacturing, Toyota has looked at a number of opportunityareas for changing the mode of transport from road to rail.Assessments are conducted to check the efficiency optimisationand feasibility of changing the mode of transport. The assessmentpoints include lead time, service frequency, operational level,

environmental impact, quality as well as cost. One such studyshowed that the parts delivered from central Europe to themanufacturing plant in Turkey (TMMT) could be changed fromtruck transportation to rail. It meant that there had to be a numberof logistical changes, but the shift also reduces annual CO2emissions by 1,654 tonnes.

Case Study: Train Project – Reducing CO2 Emissions

Poland

CZECH

Hungary

KCD

HBCP

TMMT

3 Trailers/day

3 Trailers/day

Poland

CZECH

HungarySoprontrain station

KCD

Halkalltrain station

HBCP

TMMT

Train 6container/day

Toyota’s central European depot in Belgium (TPCE) hasconducted an inventory of all logistics routes in and out of itswarehouse. This inventory provided baseline data for the deve-lopment of specific projects targeting a reduction in CO2 emis-sions. One particular project involved changing the route for allnon-time-specific parts between Rotterdam and TPCE. In June

2004, the route was changed from road transport to inlandwater barge. The CO2 emission of inland water barges is lowerthan that generated by road transport. As a result, the annualCO2 emissions have been significantly reduced, as shown in thetable below:

Case Study: Barge Project – Reducing CO2 Emissions

553,457 kg CO2/year 302,921 kg CO2/year 250,536 kg CO2/year

Transport by truck Transport by barge CO2 emission savings

Before After 39


Hazardous Materials (HAZMAT)

The transportation and storage of parts containing hazardousmaterials (HAZMAT), such as batteries, airbags, paints andaerosols, is a complex issue. Each year, approximately 2.6 millionparts – categorised as dangerous goods – are shipped byToyota across 29 European countries by road and sea. (As amatter of principle, Toyota has taken the decision not to shipany HAZMAT by air.) Some of these materials bear UN codes,which were established by the United Nations to identify certainchemicals and materials. These codes must be clearly displayed onall packaging. Other chemicals and materials require a MaterialSafety Data Sheet (MSDS) containing health, safety and

environmental information for people handling the materials, suchas physical data (melting point, boiling point, flash point, etc.),toxicity, health effects, first aid, reactivity, storage, disposal,protective equipment, and spill handling procedures. Toyota iscommitted to ensuring continuous compliance with all legislationin effect throughout Europe and to taking the necessary stepsto minimise risk during operations.

In 2004, a number of tools were developed to improve the fol-low-up of HAZMAT handling and ensure legal compliance throu-ghout the parts logistics network.

The Material Safety Data Sheet (MSDS) constitutes an inva-luable source of safety information for people who handle hazar-dous materials on the job. Toyota undertook a major initiative inEurope to develop a computerised system that would make iteasy to review any MSDS online, check for updates, or searchthe MSDS database.

Every MSDS is currently available in 11 different languages,although Toyota plans to increase the number of available lan-guages to 20 in 2005. The Data Sheets are available on anInternet site that is accessible to every European retailer/repairerthrough their own local intranet.

Moreover, a European hotline with a central phone number hasbeen set up for emergency response, available around the clock,to provide assistance to anyone requesting additional informationor advice about the chemicals and materials used by Toyota. Thetelephone number is printed on the packaging or container of everychemical or material, separately from the MSDS, so that informationon the contents is a phone call away.

Still more steps were taken in 2004 to improve the handling of HAZMAT.Several years ago, a software system was developed to drasticallysimplify warehouse operations by providing computerisedinformation to warehouse personnel with respect to partsshipments, indicating order destinations, contents and deadlines.

In 2004, this system was further enhanced with the addition ofinformation about HAZMAT, including packaging, labelling andhandling requirements, as different requirements apply to road andsea transport.

Clear operating procedures are now in place and warehouse per-sonnel will have access to all the information needed. This will leadto improved packaging, which in turn contributes to better loadsecurity and helps minimise the risk of leakage and spills duringtransport. Damaged parts or HAZMAT claims can now be traced inthe system (via a HAZMAT flag at the part-number level), which alsoblocks return shipments of HAZMAT. In the past, such return ship-ments were problematic due to poor packaging, lack of paperwork,and occasionally very poor or even nonexistent load security.

While the main reason behind the implementation of this systemwas to improve environmental performance and HAZMAT-related,legal compliancy, other benefits also accrue to its implementation,including improved workload management, heightened efficiencyand lower costs.

After testing began in December 2004, TPCE launched the newsystem in March 2005. The fully developed system will gradually berolled out to all regional depots in Europe. The target is to have thenew HAZMAT system and procedures implemented at all regionaldepots by the end of FY2005.

Location Parts with no UN Code Parts with UN Code TOTAL(Pieces) (Pieces) (Pieces)

TPCE 1,249,610 1,354,163 2,603,773

TPCSF (France) 75,110 100,280 175,390

TPCES (Spain) 80,423 52,028 132,451

TPCAT (Austria) 31,121 30,119 61,240

TPCDE (Germany) 33,057 86,609 119,666

TPCDK (Denmark) 26,080 37,634 63,714

TPCFI (Finland) 65,828 25,632 91,460

TPCGB (UK) 207,955 500,074 708,029

TPCNO (Norway) 51,361 49,141 100,502

TPCIE (Ireland) 23,521 8,916 32,437

TPCPL (Poland) 16,633 6,532 23,165

TOTAL 1,860,699 2,251,128 4,111,827

The table above gives an overview of the amount of HAZMAT handled by Toyota’s European parts distribution toretailers and repairers, showing the total volume as well as the data breakdown per depot.

Volume of handled HAZMAT distributed to retailers and repairers - 2004

40


After being awarded the “Milieucharter” environmental certificate for 2003, TPCE committed to the environmentalcharter of 2004, in which emphasis was placed on the following three topics:

• Ideas put forward in the spirit of Kaizen (continuous improvement) will be rewarded with an invitation to takepart in a tree-planting event to improve the facility’s integration into the landscape.

• Sponsorship of the composting activities of the City of Diest, with encouragement of TPCE employees tocompost at home and participate in the organisation of a Green Month Campaign.

• Reduction of air pollution by monitoring CO2 emissions and identifying ways to reduce CO2 emissions fromTPCE’s activities.

Case Study: TPCE AwardIn 2003 and 2004, the Toyota Parts Centre Europe (TPCE) wasawarded the “Milieucharter” environmental certificate by theBelgian Province of Vlaams Brabant. To be eligible, a companymust submit three projects for consideration, and the projectsmust in some way exceed the legal requirements in application.

In other words, the projects must be entirely voluntary. Beforeawarding a certificate, the Chamber of Commerce of theProvince of Vlaams Brabant reviews the company’s projectsand conducts site audits to verify legal compliance as well asproject completion.

For the calendar year 2003, TPCE focussed on the following items:

• Rational water consumptionTo avoid unneeded spillage of city water, a modification was made on the sprinkler installation to avoiddirect release of city water into the sewage system.

• Integration of the facility in the landscapeThe staff parking area was extended using hollow cinderblocks instead of traditional asphalt, producing agrass parking area with water infiltration.

• Waste preventionA study was conducted to determine the most environmentally friendly manner to dry hands, but thisinitial effort wound up becoming a complete review of all waste removal processes.

Frank Parent (left) of OVAM (Flemish Environment Agency), handing over the“Milieucharter” to Pierre Van San, General Manager, TPCE.

TPCE has shown its commitment to the continuation ofthese efforts by registering for the environmental charter

of 2005. It is currently carrying out activities eligible forthat award.

41


“The role of Sales & Marketing is to define the product range (specifications,price, colours, etc) and communicate it in a way that makes people want todrive a Toyota or Lexus. Through the Toyota Prius and Lexus RX400h, forexample, we can offer some of the most beneficial environmental technologyin the world, but it will make little difference unless people know and want todrive them. And talk about them. The role of After Sales is to offer ways tomaintain the car’s performance throughout its life cycle while not burdening theenvironment, for example through the use of remanufactured products and ourwaterborne paints project."

Thierry DombrevalExecutive Vice-President & COOSales GroupToyota Motor Europe

Toyota’s complete vehicle-life-cycle approach to environmentalconcerns means that every part of the corporation and its affiliatedcompanies are bound by the Toyota Earth Charter to makeprotection of the environment a top priority. In the previoussections of this report, we have already seen how environmentalconcerns are shaping the design process at Toyota. We have alsoseen how the company’s production facilities and logistics operationsare held to strict environmental standards, in many cases exceedinglegal requirements. This report also demonstrates how the principlesof Kaizen (continuous improvement), Yokoten (knowledge transfer)and Genchi Genbutsu (going to the source) are constantly beingapplied to improve environmental performance in these areas.

Toyota’s Sales & Marketing/After Sales operations are no exceptionto this rule. One could even say that the Toyota operation having thegreatest possible impact on the health of the environment is preciselySales & Marketing, as the environmental impact of all of Toyota’seco-friendly design, production, and logistics would remaininconsequential without strong sales of Toyota’s “green, clean

and lean” eco-cars. Toyota’s marketing efforts are thus two-pron-ged. One aspect of the company’s marketing strategy is to raiseawareness in general of the environmental impact of automobilesand the lengths to which Toyota is going to reduce that impact.Just as important, however, is the careful collection and analysisof customer-satisfaction data, allowing the company to betterunderstand customers’ purchasing decisions and thereby tohone an ever-more successful marketing strategy for the variousToyota and Lexus models.

With every sale of an eco-friendly vehicle like the Prius or the newToyota AYGO, regardless of the reason behind the purchase, anet improvement in environmental impact is made. Driving a newPrius saves roughly one tonne of CO2 per year as compared to adiesel vehicle in the same segment, or 1.9 tonnes in comparisonwith a petrol vehicle in the same segment. Global sales of the newPrius totalled 125,000 in 2004, with over 360,000 Toyota hybridssold in total.

Corporate Environmental AwarenessIn 2003, Toyota embarked on its first pan-European corporateadvertising campaign conducted by its Corporate Affairs department.Spanning an initial three-year period (2003-2005), this campaignseeks to enhance Toyota's corporate awareness and image inEurope by outlining its corporate citizenship and explaining whythe company is the automotive leader in environmentally friendlytechnologies. Under the "Aim: Zero Emissions" tag line, Toyotacommunicates its aspiration to reduce harmful emissions in all itsareas of activity, from the design and planning phase all the wayto the recycling of end-of-life vehicles.

In 2004, the corporate advertising campaign's media plan wide-ned to include television. A series of vignettes focusing on "GreenDesign" appeared on three pan-European television channels.Using this form of sponsored advertising, Toyota seeks to showhow clever design and technology can make people’s lives betterwhile also reducing the environmental impact.

6 Sales & Marketing /After Sales

42

Toyota’s 2005 European Corporate Advertising Campaign


In order to better communicate its environmental principals andactivities – and support the "Aim: Zero Emissions" message –Toyota created an Environmental Brochure in early 2004. TheEnvironmental Brochure was designed and published to targetthe general public, presenting Toyota’s basic environmental mes-sages with a clear focus on the environmental technologies thatare beneficial to consumers.

Concretely, the following issues are addressed within theEnvironmental Brochure:

• Outline of today's environmental challenges and what Toyota isdoing to address them.

• Focus on Toyota's leading environmental technologies(HybridSynergy Drive/Prius, Toyota ‘Clean Power’ D-4D, fuel cell sys-tems and so forth).

• Communicate basic environmental messages using variousexamples (Zero waste to landfill, recyclability, etc.).

Toyota's first European Environmental Brochure was translatedinto nine different languages, giving audiences in many

of Europe's markets a clearer and more comprehensive understanding of Toyota's environmental stance and activities.

Sales & MarketingBrand Environmental Awareness

The Toyota and Lexus brands also carry out awareness raisingcampaigns for environmental technologies. The Toyota Prius andthe Lexus RX400h, featuring Hybrid Synergy Drive, as well asToyota D-CAT technology is perhaps the most relevant and signi-ficant evidence of Toyota's dedication to the ultimate goal of zeroemissions.

Named 2005 European Car of the Year, the Toyota Prius repre-sents the cutting edge in the industry's quest for a cleaner, greenercar. This concrete evidence of Toyota's desire to safeguard theenvironment was used by the Toyota brand in both pan-Europeanand focussed awareness raising and marketing.

At times, this was done in conjunction with the corporateadvertising campaign that ran in several pan-European printpublications as well as in national media in the UK, Italy, Germany,France and Spain.

Toyota Prius stand at the Brussels International Airport.

Toyota Prius advertisement on the front of Toyota Motor Europe’shead office in Brussels, Belgium.

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Toyota’s 2004 European Corporate Advertising Campaign

Environmental Brochure


The Toyota Avensis D-4D Clean Power and the Lexus RX400hrepresent two more products where it is important to build anunderstanding of the technology with the customer.

In order to do this, both Toyota and Lexus have carried out awa-reness campaigns as shown below. The campaigns have hadvery successful results; for example 40% of Avensis’ sold inGermany have the Toyota D-CAT technology. Due to thedemand, Toyota has decided to introduce the Toyota D-CAT

technology in the new Corolla Verso and the next generation RAV-4. In the new RX400h, Lexus Division engineers have createdcompletely new, SUV oriented hybrid components based on theHybrid Synergy Drive concept, resulting in superior SUV fuelefficiency and driving performance.

For more information regarding the Toyota D-CAT and HybridSynergy Drive technology, please see the Product Design &Development Chapter.

Survey: Prius Customer Satisfaction

Example of Toyota D-CAT awareness campaign. Example of Lexus RX400h awareness campaign.

From an independent survey commissioned by Toyota targetingPrius owners in the UK and Germany, Toyota has obtained the

following findings for the new generation Prius as compared tothe original Prius.

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The key findings of 267 new Prius owners are:

• Key purchase reasons: o low fuel consumption (spontaneously mentioned by 50% of buyers),o environmental/ green issues (41%) and o the new technology (21%).

• When asked what they like best about their car, buyers of the new Prius are very likely to spontaneously mentionfuel consumption (43%), quietness of operation (28%), low running costs (19%) and environmental friendliness (18%).

• Prius owners’ satisfaction has almost doubled on exterior styling (completely satisfied buyers: 52% for the newPrius, up from 27% for the original Prius).

• Satisfaction has also significantly increased on:o Interior-related items such as interior styling (62% completely satisfied buyers, up from 54% for the original

Prius), roominess (73%, up from 53%), luggage capacity (36%, up from 24%).o Equipment level (61% completely satisfied buyers, up from 51%), o Quality-related items like safety (71% completely satisfied buyers, up from 47%) and reliability (77%, up from 67%),o Value for money (29% completely satisfied buyers, up from 24%),o Performance-related items such as acceleration (52% completely satisfied buyers, up from 33%), road-holding

(61%, up from 47%), braking (69%, up from 54%) and sportiness (30%, up from 13%)• Satisfaction is very high on environmental friendliness (with 91% of buyers completely satisfied)• Satisfaction remains high (though it has decreased vs. previous generation, due to high and increasing customer

expectations) on fuel economy (with 64% completely satisfied buyers), quietness when driving (with 67% com-pletely satisfied buyers), body workmanship & finish (with 71% completely satisfied buyers), no squeaks andrattles (with 67% completely satisfied buyers)


The new Prius:

• Is the first hybrid car to win the European Car of the Year award (2005);• Has won important awards in the areas of safety, environment, technology,

design and others (see below);• Has received critical awards complemented by strong sales performance worldwide;• Has worldwide sales totalling 125,000 units in 2004, with 8,136 units sold in Europe

(global sales thus exceeded Toyota’s initial sales target of 76,000 units by 64%);• Has a European sales target of over 20,000 units for 2005;• Is expected to see worldwide production increase to 180,000 units in 2005.

Not only are Prius customers satisfied with the car, but anindependent survey commissioned by Toyota and conductedin the main five European markets (UK, Germany, France, Italyand Spain), shows that the general perception and knowledgeof the Toyota Prius has increased dramatically since the laun-ch of the new-generation Prius (January 2004). This survey notonly included Prius owners, but also incorporates the general

perception of car owners within the Prius segment. For Toyota,this is a very important step as, together with increased sales,it shows that people are becoming increasingly aware of thecar and its technology and are embracing it. It is also furtherconfirmation that Toyota’s strategy on the ultimate eco-car iscorrect and that the Toyota Prius is the most viable eco-caravailable on the market at this time.

Survey: Prius General Perception and Knowledge

Prius - The European Car of the Year 2005

In 2005, the world’s best-selling hybrid car also became thefirst hybrid ever to win the title of European Car of the Year.Having received votes from every member of the jury, theToyota Prius achieved 406 points, one of the highest scoresever, with a large margin over second place.

The Prius’ Hybrid Synergy Drive system has been namedInternational Engine of the Year 2004, with a record score. Inaddition, it came top in three separate award categories in thesame year, including Best Fuel Economy and Best New Engine.

The new Prius has also been recognised in the 2004 and 2005ADAC EcoTests, organised by Germany’s auto club ADAC and

supported by the FIA (Fédération Internationale del’Automobile). This test is particularly important as it measuresemissions and fuel consumption of vehicles under severalconditions, including high-speed, motorway driving with airconditioner operation. Prius recorded the lowest emissionsoverall, and its fuel consumption was only beaten by diesel citycars.

In October 2004, the Prius triumphed in the ChallengeBibendum Rally, held at the Formula 1 racetrack in Shanghai,where it went head-to-head against the most prominent eco-cars in the world, both prototype and standard-productionvehicles.

The new Toyota Prius represents the culmination of all Toyota’s efforts to promote a greener, cleanermobility solution, and those efforts have not gone unnoticed or unrewarded. The new Prius:

Toyota Prius 2001 2002 2003 2004 Explanation

% % % %

Awareness 26 24 28 39 % of respondents who at least know the name (2-5 on 5 point scale)

Knowledge 2 2 2 5 % of respondents who know it fairly well or very well (4-5 on 5 point scale)

Positive 26 30 25 36 % liking the car out of those who at least know the name Awareness (7-10 on a 10 point scale)

Technical 16 20 20 28 % scoring 8-10 on 10 point scaleadvancement

Fuel economy 12 14 16 20 % scoring 8-10 on 10 point scale

Performance 14 14 16 23 % scoring 8-10 on 10 point scale

Safety 12 18 20 26 % scoring 8-10 on 10 point scale

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Incentives for Environmentally Friendly Vehicles

Consumers are not the only stakeholders interested in the newPrius. With a reduction in greenhouse gases ranking at the topof the European Union’s priorities, many EU Member States havestarted offering a variety of fiscal incentives towards the purchaseof environmentally friendly vehicles (annual taxation, VAT, import

duties, etc.). The following chart shows some examples of thefiscal incentives currently available throughout Europe. Othercountries that also have similar incentives in place are Austria,Cyprus, France, Monaco, Portugal, Spain, Italy, Slovenia,Norway and Ireland.

Country Description Incentive Frequency(Euro)

The Netherlands Exemption of luxury tax 9,456 Once

Belgium Reduction of basis for taxable income 4,000 Once

United Kingdom Direct support scheme – Powershift 1,200 Once

(promotion of alternative clean

fuel initiatives)

Exemption of London Congestion Charge £8 (approx. €12) Daily

Greece Exemption of registration duty (25%)

Exemption of odd/even circulation 3,328 Once

system in Athens

Sweden 50% reduction on benefits in kind 519 Once

Denmark Preferential “green owner” tax

based on CO2 minimum advantage 230 Annually

Case Study: The London Congestion ChargeOne of the more interesting regulatory developments in thefield of transport has been the introduction of a congestioncharge in London. The scheme was designed to reducecongestion in the very centre of the city by charging moto-rists £5 to enter the area between early morning and earlyevening, Monday to Friday. A system of perimeter cameras wasestablished that could read car license plates and then matchthe details against a central database of fee payers. Failureto pay would result in heavy fines and, ultimately, confiscationof the vehicle for repeat offenders.

Although conceived as a scheme to reduce urban conges-tion, the London scheme is also a very powerful environmen-tal tool. Toyota and other vehicle manufacturers workedtogether to persuade the regulatory authority, Transport forLondon (TfL), to exempt the cleanest vehicles. Hence the"congestion" charge acts as another incentive to purchasecleaner vehicles such as Prius. By linking qualification for theexemption to the UK Government's existing Powershiftgrant, only the very cleanest vehicles (those with emissionperformance more than 60% better than the relevantEuropean Emission Standard) were exempt.

The Toyota Prius easily meets this criteria so Prius ownerswho have need to drive into the centre of London can do so

without paying the fee – given that the fee was raised to£8/day (approx. €12) in July 2005, this gives a potentialsaving of £2,000 (approx. €3,000) a year for a London com-muter. All they need do is register the vehicle with TfL andthen enjoy the savings - and the benefits of the congestioncharge which has reduced traffic by some 20%, reducingjourney times significantly.

Sales of vehicles offering environmentally friendly technologies,such as the hybrid Prius, have increased significantly as aresult, helping to improve the air quality of one of Europe'smost congested cities.

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Remanufactured Part Units sold per calendar year

2001 2002 2003 2004

ATM (automatic transmission) 206 281 325 444Starter 10,495 9,750 9,345 9,309Alternator 9,256 8,538 8,020 8,158Clutch Kit 24,341 23,976 25,048 21,528AC Compressor 144 354 986 991Power Steering Rack 0 1,450 7,397 10,302Engine* 0 0 2 19Shortblock* 0 0 26 131Cylinder Head* 0 0 23 203

* Introduced August 2003

After SalesEvery year, After Sales performance in environmental issues hasimproved. This has been accomplished by Toyota’s continuingefforts to procure environmentally friendly parts and materials, as

well as through working with Toyota’s network of retailers andrepairers to ensure that they are in compliance with the company’senvironmental guidelines.

Procurement of Environmentally Friendly Parts and Materials

Greening the supply chain means that Toyota does not only lookinwards to improve its environmental performance. Most of thecompany’s parts and materials are supplied by third parties andToyota therefore enlists the participation of those suppliers in theeffort to provide environmentally friendly parts and materials to itscustomers. To do this, Toyota developed a set of EnvironmentalPurchasing Guidelines (see Social Engagement Chapter), whichthe company encourages suppliers to follow.

It also works directly with suppliers when product innovations arerequired. Some examples of such product innovations includethe:

• Remanufactured Parts• SMART Repairs• Chemicals & Oils

Greening the Supply Chain

Toyota is expanding its remanufactured parts range. By reusingmany components and thereby reducing its demand for new rawmaterials, Toyota also saves the energy needed to turn those rawmaterials into finished products. The benefits of this approach arereflected not only in the reduced environmental impact, but alsoin a lower cost of ownership, higher customer satisfaction andtechnical feedback to support future product development.

Three new product ranges were introduced on the Europeanmarket in August 2003: engines, shortblocks and cylinder heads.Sales of remanufactured starters and clutch kits decreased slightlyin 2004 from the previous year. However, sales of other remanu-factured parts showed gains, notably the continued strongincrease in sales of power steering racks.

Remanufactured Parts

Toyota has also coordinated the development and implementa-tion of a more efficient parts-return system in Europe. Used partsare returned through TPCE, Toyota’s main European parts distri-

bution centre, rather than directly from dealers to the supplier. Inthe long term, this will ensure that more cores are returned cor-rectly and that the system is managed more efficiently.

Some examples of After Sales environmental efforts are:

• Continuously expanding Toyota’s remanufactured parts offering;• Launching Toyota’s own paint products, in cooperation with Dupont, that are fully in line with European environmental

requirements.• After Sales also contributes to a “lean and green” repairers network through the use of an online repair manual,

Tech.Doc. Use of the online version rather than a printed one saves the paper required for approximately 22,000 manuals of 2,000 pages each.

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The SMART (SMall Area Repair Technique) Repair Programmewas introduced several years ago as an initiative to reduce theenvironmental impact of repairs. Toyota developed and nowoffers its repairers a SMART kit that allows them to make minorrepairs to slightly damaged materials or components, rather thanmaking a full replacement. The idea is catching on. Customers andinsurance companies alike are enthusiastic because of the lowerrepair costs. As a result, more repairers are opting to use theSMART kit. Currently, 15% of Toyota repairers have opted to offerSMART repairs.

SMART Repairs

Traditional Repair SMART Repair

Replace windscreen Windscreen repair

Replace bumper, protectors, mirror Exterior plastic repair

Replace dashboard and other interior

plastics Interior plastic repair

Replace seat cover Velour repair

Replace leather cover Leather repair

Chemicals & Oils

Some examples of these include:

• Super Long Life Coolanto Only needs to be changed every 150,000 km instead of 45,000 km

• Fuel Additives (source: Chevron)o Reduce exhaust emissions by up to:

-10% HC (hydrocarbons)-23% CO (carbon monoxide)-26% NOx (nitrogen oxides)

o Reduce fuel consumptiono Increase engine durability

• Toyota Genuine Motor Oilo Use of the Toyota 5W-30 fuel economy motor oil versus mineral oil reduces fuel consumption by 4.9%.

(Source: ExxonMobil and DAT Germany)• Synthetic Manual Transmission Fluid (source: Chevron)

o Better fuel consumption (-0.7%)o Lower CO2 emissions (-8 g/km)

These are only a few examples of the “green” products and ser-vices that Toyota promotes and recommends to its retailers and

repairers. Another Toyota effort is the Water-Based Paint Project,which is outlined in the following case study.

Toyota’s After Sales division has also sought to make environmentally conscious changes to the chemicals it uses.

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In order to ensure environmental compliance at retailer/repairerlevel, Toyota last year initiated the Authorised RepairerEnvironmental Risk Audit Programme (ARERAP). This programmeconsists of an “Environmental Guideline for Retailers/Repairers” aswell as a self-audit.

A total of 2,879 out of 3,093 retailers/repairers (93%) conductedthe self-audit. Any necessary corrective actions are being followedup by the NMSCs and the retailers/repairers themselves.

To track compliance with the company’s minimum requirementsfor its retailers/repairers, Toyota has developed an intranet-basedtool called the Toyota Service Marketing (TSM) Manual. Toyota’sfield staff makes regular visits to network retailers/repairers andenters any issues into the database to ensure quick follow-up andmonitoring.

Retailer/Repairer Compliance

Volatile organic compounds (VOC) are found in a wide rangeof products from paints, coatings and consumer healthcare pro-ducts to cleaning fluids. These compounds are the solventcontained in the product that evaporates into the atmosphere.

For the automotive industry, such solvents are added duringthe paint application process in manufacturing or by the painttechnician in a “Body & Paint” operation. VOCs have beenfound to be a major contributing factor to ozone in the loweratmosphere, a common air pollutant that has been linked to res-piratory problems in certain individuals.

The European Union is becoming increasingly stringent withregard to the permissible amount of emissions produced byvehicle refinishing products, aiming to reduce VOC emissionsin solvents by 60% by 2007. Recent legislation calls for a limi-tation in the total content of VOCs in these products in orderto prevent or reduce air pollution.

The new legislation further requires, as of 2004, that all newBody & Paint shops be equipped to comply with the newaccepted VOC levels. All existing Body & Paint shops must beconverted by 31 December 2006, at the latest. At that time,vehicle refinishing products that are non-VOC compliant(i.e. that contain more than the regulated maximum level of sol-

vent) will be banned in Europe and will no longer be availablefor sale.

Although legislators in each Member State can choose howthe guidelines are implemented, the most cost-efficient andeffective means for paint shops to comply with the regulationsis to opt now for compliant products.

Toyota is proactively assisting its European network to meetthe terms of the legislation quickly, easily and in the most cost-effective way by providing a paint refinishing product solutionat an early stage. The development, together with a leadingpaint supplier, of a complete VOC-compliant product rangefurther demonstrates Toyota’s commitment to environmentalprotection. These products are suitable for use in all Europeancountries, taking into account repair habits and temperatureconstraints. Technologies that combine high solid and water-borne products enable full compliance without affecting theapplication process.

Much of the organic solvent in the waterborne-basecoat pro-duct range has been replaced by water (fully de-ionised and de-mineralised water). For example, whereas a conventio-nal base paint contains 85% organic solvents in their ready-to-use state, this hydro basecoat contains a maximum of 10%.

0

20%

40%

60%

80%

100%Traditional product offer Toyota-DuPont cobrand product offers

2K filler

1K primer

Basecoat

1K metal primer

Repair filler

Hydro basecoatHS dea

2K cleancoat 40% reductionin emissions

Solventbornebasecoats

Waterborne basecoats

0%

20%

40%

60%

80%

100% MetallicSolid85%

80%

10% 10%

88% reductionin emissions

Case Study: Meeting Tomorrow’s Regulations Today

Under the programme, retailers/repairers are reques-ted to fill out a check sheet to determine whether theyhave met the following five minimum environmentalrequirements:

1. Assignment of a person responsible for environmental affairs

2. Compliance with applicable environmental legislation

3. Proper treatment of hazardous waste4. Compliance with local legal requirements

regarding wastewater discharge5. Proper recovery of air-conditioning refrigerants

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VOC emissions: Total paint process VOC emissions Solvant content of ready-to-use basecoats


“The efficient recovery of materials is one of the most important elementsin Toyota’s drive to attain sustainable development. Every year, end-of-lifevehicles (ELV) generate between eight and nine million tonnes of waste in theEuropean Union. Managed properly, much of this waste can be reprocessedand placed back into service, thereby not only reducing the environmentalimpact of ELVs but also returning key raw materials and natural resources to thesupply chain. By combining ecology with economy, Toyota seeks to develop awin-win approach to recycling and waste management.”

Willy TomboyEnvironmental OfficerToyota Motor Europe

7 Recycling of Vehicles

In 1997, the European Commission prepared a Proposal for aDirective aiming to make vehicle dismantling and recovery moreenvironmentally friendly. The Directive 2000/53/EC on End-of-LifeVehicles was officially adopted by the European Parliament andCouncil in September 2000 and was published in the Official

Journal on October 21, 2000. The Directive sets out clear, quanti-fied targets for reuse, recycling and recovery of vehicles and theircomponents, and encourages producers to manufacture newvehicles with a view to their recoverability.

Legislation under preparationJoint (fund) systemJoint manufacturer systemManufacturer specific system

Joint (fund) systemJoint manufacturer systemManufacturer specific system

The map above shows the European Union Member States, EU candidate statesand EFTA (European Free Trade Association) Members and their status as of May2005 with regard to the Directive.

An End-of-Life Vehicle (ELV) yard in Spain.

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Toyota ensures that the recovery process is easy and convenientfor the last owner of an ELV. When a Toyota or Lexus vehiclereaches the end of its life, the driver can simply return it to one ofthe many authorised take-back points that Toyota has set upthroughout Europe. Thanks to the Toyota ELV collection network,drivers can be sure that their vehicles will be reprocessed accor-ding to the latest environmental specifications and technologies.

In collaboration with the National Marketing and SalesCompanies, Toyota in Europe has contracts either under nego-

tiation or already established with treatment facilities in more than30 countries.

In each of these countries, Toyota has taken steps to ensure thatthe last owners know where they can find the nearest authorisedtake-back point. Information on these points can be foundin promotional literature or simply by telephoning a dedicatedservice number. Should vehicle owners have any questions aboutthe process, Toyota and Lexus retailers and repairers are prepa-red to help provide any additional information they may require.

Toyota Initiatives

Automakers in Spain, together with the national associationsof dismantlers (AEDRA) and shredders (FER), have created anon-profit association known as Sigrauto.

This non-profit association has signed contracts with 309authorised treatment facilities and a further 39 contracts arecurrently under negotiation.

As proof that the end-of-life vehicle has been transferred to aSigrauto-contracted, authorised take-back point, the lastowner of an ELV receives a certificate of destruction. Thisdocument is essential to completing the deregistration pro-cess of the old vehicle.

In 2004, 4,890 Toyota and Lexus vehicles were deregistered in

Spain and this figure is expected to rise to 23,000 annually by2015, in line with increased European sales.

Case Study: Spain’s ELV Network

Using a Geographic Information System (GIS) tool, Sigrauto has developed location maps to help vehicle owners find the nearest ELV take-back point.

Organisation of an ELV Collection Network

The European Directive indicates that as of January 1, 2006, 85%of the car by weight should be reused or recovered. By 2015 thispercentage will rise to as high as 95%, of which only 10% can beused for thermal recovery. In Europe, Toyota is committed to

achieving the treatment targets through intense collaboration withall the partners in the treatment chain. Throughout all vehicle-dismantling processes, Toyota places the priority on reuse andrecycling.

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Providing Information to Economic Operators and Consumers

Toyota has joined 25 other automobile manufacturers to set upthe International Dismantling Information System (IDIS).

The system has been designed to provide treatment facilities withessential dismantling information on best environmental practicesfor processing end-of-life vehicles. This information identifies thevarious components and materials and the location of all hazardoussubstances in the vehicles, in particular in terms of their potentialreuse and recovery.

IDIS is currently available in 23 languages and provides informa-tion on a total of 51 brands and 477different models, including43 Toyota and eight Lexus models (current and former genera-tions). More information can be found at www.idis2.com

International Dismantling Information System (IDIS)

In line with Article 9 of the European ELV Directive, the leafletinforms consumers and economic operators about the opportu-nities created by Toyota for the reuse, recovery and recycling of

Toyota end-of-life vehicles and their components. The “CarRecycling” leaflet is in the progress of being published in the lan-guages of countries where the relevant legislation is in place.

Car Recycling Leaflet

Design for Recycling

Toyota’s Engineering division continuously strives to improve its“Design for Recycling” approach, incorporating innovation both inmaterials and in vehicle structure to facilitate dismantling andrecoverability as well as to increase the use of recycled materials.As mentioned in the Product Design & Development chapter,Toyota uses Eco-VAS to develop vehicles that are designed withrecycling in mind.

Toyota continues to review and adjust targets for new productsproduced in Europe, both in terms of the weight of recycled andrenewable materials used as well as vehicle content of substancesof concern (substances banned due to their hazardous properties).

In close collaboration with dismantlers in the Netherlands andGermany, Toyota conducted dismantling studies on 24 modelsthat are currently in the market. In addition to the average timeneeded to de-pollute and dismantle a vehicle, Toyota studiedrecommendations for new technologies to improve the envi-

ronmentally sound processing of the vehicle, in particular theremoval of all fluids and dismantling. In an effort to gather evenmore information, Toyota has conducted shredder trials with 426vehicles in Finland. These trials have provided precise informationon the mass balance and chemical composition of the various fractions.

Design for recycling initiatives include:•Development of eco-friendly materials and the

use of recycled materials•Use of internationally approved coding standards

for the identification of materials and componentsthat are suitable for reuse and recovery

•Reduction of substances of environmentalconcern (SOC) – including polyvinylchloride

Dismantling Studies and Shredder Trials

Dismantling studies Shredder trials: Toyota vehicles prior to shredding. Shredder trials: Toyota vehicles after shredding.

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In order to reduce the time and effort of dismantling vehicles,Toyota started to introduce the ‘Easy to Dismantle Mark’ on thefuel tank, wire harness and other parts.

Vehicles contain plastics that are hard to recycle. Toyota has deve-loped a special recyclable plastic called Toyota Super OlefinPolymer, or TSOP, that is applied both in vehicle interior and exterior,such as on both front and rear bumpers and the instrument panel.

Improved Recoverability

Easy Dismantling

The ELV Directive places a ban on certain heavy metals that needto be phased out of materials and parts by specific dates. Theseheavy metals include:

• Cd Cadmium• Cr6+ Hexavalent chromium• Hg Mercury• Pb Lead

This diagram provides an overview of Toyota’s phase-out status.It shows which heavy metals have been phased out completelyand in which parts and materials. It also shows the current andfuture projects for phasing out heavy metals. Toyota worksclosely with its suppliers of parts and materials in order to complywith the ELV Directive (for more information, please see the SocialEngagement Chapter).

In addition to the phasing out of heavy metals that are bannedby the EU ELV Directive, Toyota seeks to reduce other sub-stances of concern as well. An example of this is PVC (polyvi-

nyl chloride), which Toyota has reduced to one tenth of that whichwas contained in previous models.

2003 2004 2005 2006 2007 2008

Lead: Bulbs, Sparks, Plugs, Motor

Lead: Protective Paints, Elastomers

Cadmium: Thick film pastes

Lead: Valve seats,Lead: Initiators

Hexavalent chromium: Corrosion preventive coatings

Lead: Aluminium

CompletedOngoing

(Lead, Mercury, Cadmium and Hexavalent chromium)

Substances of Concern

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Comply with ELV DirectiveNo use for 4 heavy metals


"Growth can only be sustainable when companies provide positive value, notjust toward their own immediate business interests, or even those of theircustomers or partners, but rather toward the long-term development of ahealthy and prosperous society as a whole."

8 Social Engagement

Commitment to StakeholdersEver since the founding of Toyota Motor Corporation in 1937, thecompany has continuously worked to contribute to the creationof a prosperous society. Toyota aims to grow in harmony with allof its stakeholders, including customers, employees, shareholders,business partners and society at large. The Toyota business culture,values and principles stimulate the company and its people to gobeyond mere compliance with local, national and internationallaws and regulations. Toyota is committed to conducting busi-ness in a fair way, based on sound ethical guidelines and principles.

Social engagement – be it at an individual level, in local commu-nities or toward society as a whole – is a key component ofToyota’s management approach. As outlined by Fujio Cho, Toyotatakes up the challenge of meeting society’s expectations and –through its core business and through multiple forms of socialengagement – making a positive contribution to society. Toyota’svision with respect to its relationship to all of its stakeholders issummarised in the basic policy, “Contribution towardsSustainable Development”. (See Vision and Strategy Chapter)

Corporate Social Responsibility (CSR) Strategy CommitteeTo ensure that the company lives up to these values and is ableto continuously improve its contribution to sustainable developmentand its good corporate citizenship, Toyota established inEurope a new strategic top management committee in 2004:the CSR Strategy Committee. Together with the EnvironmentalCommittee (see Integrated Environmental ManagementChapter) and the Toyota Fund for Europe, this committee ana-lyses any possible gaps between societal expectations of Toyota

and the company’s actual economic, environmental and socialperformance in Europe. Based on this gap analysis, theCommittee decides on the overall CSR strategy to improve perfor-mance and to translate that strategy into business operationsthrough the committee’s various working groups. Members arekey executives from all related divisions and representativesfrom the affiliated national manufacturing and sales and marketingcompanies.

CSR StrategyCommittee

Business PrinciplesHR ManagementCSR Supply chain managementAffiliates support

Environmental & Social Reporting & Stakeholder relations

1. The Business Principles working group assisted Toyota Motor Corporation in establishing its overall basic CSR policy and started reviewingand reshaping the Employee Code of Conduct and Behaviour. The publication and implementation of this code is set for October 2005.

2. The Human Resources working group started to review overall performance and, in 2005, aims to develop more comprehensive policies ondiversity, equal opportunities and work- life balance.

3. The Supply Chain working group conducted a risk-based analysis on the European supply base and prepared the communicationon the “Contribution to Sustainable Development” sent to all suppliers.

4. The Affiliates Support working group began work to create a support network for CSR development in all plants and national distributorsin Europe.

5. The Reporting & Stakeholder Engagement working group aims to improve the external reporting on environmental and socialperformance by establishing more consolidated key performance indicators and sets out a policy for stronger stakeholder engagement.

With this approach, Toyota has made a clear commitment to deliver on the principles and values previously outlined. Thekey task will be to ensure that this important work is conducted through the various divisions and affiliatedcompanies within their normal business practice.

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Shigenobu UchikawaSenior Vice-PresidentCorporate PlanningToyota Motor Europe


Customer Relations & Customer Satisfaction

Customer satisfaction is a key ingredient in Toyota’s approach tosocietal responsibility. After all, making environmentally friendlyvehicles is only the first step; getting drivers to want to drive themis the next, equally important mission. For Toyota, high customersatisfaction makes not only good business sense, it makes goodenvironmental sense.

Toyota’s goal is to achieve “Complete Customer Satisfaction”,which means delivering beyond expectations. It means listeningto customers and constantly seeking to do things better. And itmeans going the extra distance to ensure that owners feel positiveabout their Toyota vehicle at every stage of the customer experience.

Building Loyalty

The secret to any successful relationship is mutual trust and loyalty.Toyota seeks to earn this trust with each and every customer.From design and production to sales and after-sales service,every aspect of the customer experience receives the same highlevel of consideration. At the heart of Toyota’s approach lies

an uncompromis ing commitment to quality. Here, too, theprinciple of Kaizen, or continuous improvement, plays a key role.This ongoing drive for excellence ensures that customers can feelconfident that their vehicle will continue to conform to Toyota’shighest standards of quality, safety, performance and driving pleasure.

Meeting Customer Needs

The concept of “Customer First” originated in the ToyotaProduction System. Irrespective of how flawless the final productmight be, it was considered by Toyota to be meaningless if itdid not meet customers’ demands and satisfy their needs. Thechallenge for Toyota was to put the customer’s needs first, thereby

allowing customer demands to actually shape the final productfrom the ground up. That’s what Toyota really means by“Customer First”. Today, this same spirit is in evidence throughoutall of Toyota’s operations – from product design through customerservice.

Customer Satisfaction Surveys

If putting customers first has always been a key objective of thecompany, Toyota is also proud to say that in Europe, customers arealso putting Toyota first.

The Toyota and Lexus brands have enjoyed the top positions inJ.D. Power’s Customer Satisfaction surveys in the UK andGermany. In 2004, Toyota models ranked the highest in three outof seven vehicle segments in J.D. Power’s 2004 GermanyCustomer Satisfaction Index – with Toyota ranked as the top car

brand overall. Lexus achieved the No. 1 position in J.D. Power’s2004 UK Customer Satisfaction Index, while Toyota was rankedsecond in Germany’s ADAC AutoMarxX December report – thefirst non-German manufacturer to achieve such a high position.

Surveys are not the only indication of this positive trend. Toyota’ssales in Europe have continued to climb steadily. Toyota hasonce again posted record sales in Europe in 2004 for the eighthyear in a row.

Basic Quality Policy

“Customer First, Quality First” is Toyota’s basic quality policy. Thekey to ensuring this is the control of quality functions. Divisionsranging from product planning, development, productionengineering and manufacturing to purchasing and sales and

marketing are responsible for maintaining high levels of quality intheir respective fields, and division managers draft annual policiesregarding quality functions.

Toyota’s efforts in this area take the following three principle directions.

1. All Toyota products and services must meet customer expectations and comply with the laws of the particular coun-try where business is conducted, and preventative action must be taken to ensure that quality issues do not arise.

2. Should such issues arise, the causes must be swiftly clarified and countermeasures initiated. This is accomplished byToyota’s European Customer Quality & Engineering (E-CQE) department, which takes appropriate action with respectto products that have already been sold, so that issues are both detected and resolved promptly (see below, QualityProcedures and Systems in Place).

3. Audits must be performed to confirm whether each division is taking appropriate action to maintain high quality levels;areas requiring improvement must be identified and improved.

Social Engagement - Towards Customers

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Providing Information to Customers

Toyota strives to provide information to customers about thequality and safety of its products and services in a timelyfashion, employing the following methods:

1) Explanations to customers by retailer staff2) Labels attached to products and instruction manuals3) Technical support via telephone help lines for customers4) Distribution of information on Toyota Web sites.

TOYOTA

Cooperation

Feedback

Customer

NMSC

Toyota retailer/repairerService

CustomerRelations

Quality

Technical

After Sales Group

ProductionGroup

Research &DevelopmentGroup

TOYOTA MOTOR EUROPE

Quality Procedures and Systems in PlaceFor several years now, in conjunction with the increasingglobalisation of its business, Toyota has been accelerating theimplementation of measures to obtain information on productconcerns from remote markets quickly and convey thatinformation “directly to the source” of the relevant departmentscapable of taking action. This principle is known as “EarlyDetection Early Resolution” (EDER).

Covering both the Toyota and Lexus brands, the company’sEDER activities aim to reduce lead-time from problemdetection in the field to resolution. By detecting field problemsearly and channelling all relevant information (such as problemoccurrence conditions, probable causes, etc.) back to theappropriate divisions promptly, early action can be taken asnecessary to improve the production quality of vehicles. Inaddition, EDER activities also aim to provide customers with the

parts and information necessary for repairs.

For an early detection system to work properly, a prompt visit tothe site to study the problem (Genchi Genbutsu) is essential inorder to reduce the lead-time for the customer. All of the com-pany’s early detection organisations are therefore located closeto the customer, and the early resolutions organisations are locatedclose to the design and manufacturing divisions and suppliersthat are responsible for taking action.

In 2003, Toyota’s European engineering, quality, and service divi-sions established a Joint Quality Management Office (JQMO).This office played a key role in EDER promotion. In 2005, addi-tional resources have been allocated to establish the EuropeanCustomer Quality & Engineering (E-CQE) division in Brussels –thus further strengthening EDER in Europe.

Should a product concern be discovered and corrective measures are deemed necessary,the following types of measures will be implemented:

1. Contacting the authorities in accordance with procedures stipulated bythe laws in each country

2. Notifying customers through various media streams (newspapers, directmail, etc.) and providing explanations at the dealer

3. Collecting products and repairing them

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Schematic Diagram of Customer Responses


Traffic Safety

Traffic safety is a critical issue for a mobile society. And here, too,Toyota has an important role to play. Toyota vehicles are alreadyamong the safest on the market. But for Toyota, this is not enough.As a leader in automobile safety, Toyota promotes a wide range ofinitiatives aimed at achieving its vision of “zero accidents/seriousinjuries”, or “Zeronize”. These initiatives include not only the design

and development of safer vehicles that offer the latest in active andpassive safety features and technologies, but also educationalprogrammes to raise awareness about road safety, and partner-ships with various institutions and organizations to promote a safetraffic environment.

Toyota’s approach is based on three main concepts:

• Automobiles: Ensuring High Safety Standards – Toyota is a world leader in “preventive safety” and “colli-sion safety” technologies.

• People: Raising Awareness – With its educational ini-tiatives, Toyota focuses its efforts where they countmost: people.

• Traffic Environment: Creating a Safe TrafficEnvironment – Toyota works with various groups to reduce the risk of accidents and maximize traffic safety.

Raising Awareness Creating a Safe Traffic Environment

Ensuring High Safety Standards

Automobiles

People Traffic Environment

Automobiles - Ensuring High Safety Standards

At Toyota, vehicle safety remains a top design priority. Toyota andLexus models are developed, designed, and manufactured to meetthe highest safety standards, giving equal attention to active (accidentavoidance) and passive (occupant protection) safety features. Inthe field of active safety, Toyota was the first car manufacturer tomarket Vehicle Stability Control in its 1997 Lexus passenger cars.Today, it leads the industry in adopting this technology across a widevariety of vehicle types. While dynamic body control technologiessuch as ABS, Traction Control, Vehicle Stability Control andBrake/assist use electronic systems to assist drivers on differenttypes of road conditions, Toyota has also developed what is knownas “Pre-Crash Safety System” – a system using radar to detectobstacles in front of a vehicle, thereby helping to prevent or minimisethe effects of a crash.

Toyota introduced the world’s first self-contained, mechanicalignition, steering-wheel airbag in 1989, and was the first carmakerin the world to offer a side curtain shield airbag in a passenger carin 1998. Toyota has now introduced front, side, curtain and kneeairbags, along with pre-tensioners and force limiters. Toyota alsoseeks to enhance collision protection with more advanced airbagsystems including those for the chest/abdomen/waist. The newToyota Avensis, for example, was the first car in Europe to be launchedwith a knee airbag as standard equipment. It is designed to protectthe driver’s knees and lower legs from injury. The new ToyotaAvensis is one of the safest cars in its class, as confirmed by thestringent Euro NCAP(1) safety tests in which the Avensis was awardedthe top safety rating of five stars.

In addition to the Avensis, the Corolla Verso and the Prius havebeen awarded the maximum of five stars for safety by EuroNCAP1). Prius is the first hybrid car tested by Euro NCAP. The carreceived a score of no less than 34 out of a possible 36 points. Thismakes Prius the safest car in its class, especially in the area ofchildren’s’ safety. The ISOFIX Child Restraint System with threeanchor points and an ingenious child seat lead to a score of 43points, the highest score ever. The Lexus GS300 has also beenawarded the same amount of stars as the Toyota Prius.

(1) Euro NCAP = New Car Assessment Programme, a consortium of agencies publishing tests that provide consumers with independent information, based on in-depthresearch about safety performance of individual car models.

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Crash test of the Toyota Prius


People – Raising Awareness

Toyota is not just concerned about its own customers in Europe,but also about the health and safety of the general public. In 2003,within the context of one of its social contribution projects ToyotaMotor Europe supported a 10-month campaign of support foreducational campaigns on road safety and first-aid for children in26 European countries. The project, organised by the EuropeanRed Cross Societies, helped over half a million school childrenaged seven to ten to learn about road safety, and what to do inthe event of an accident.

Toyota Motor Europe did not just provide financial support. Inmore than 10 countries, NMSCs and retailers actively participa-ted in campaigns in cooperation with the National Red Crossorganisations. They gave first-aid demonstrations in urban loca-tions such as shopping centres and fairgrounds and distributedpamphlets and fluorescent reflectors to be attached to bags andclothing. Toyota also provided vehicles for the campaign. For theclosing ceremony of the campaign, held in April 2004 in Berlin,Germany, a collection of successful examples of road safety andfirst-aid awareness activities was assembled and produced in theform of a Good Practice Guide. This guide has been translated into13 languages and distributed to schools and educational organi-

sations in the 26 participating countries. The guide can be vie-wed online at www.1-life.info/guide. Building on its partner-ship with the European Red Cross arising from these campai-gns, Toyota plans to continue to provide support and coope-ration to a variety of road safety and first-aid educational pro-jects in 2005. Toyota has further expanded its road safety acti-vities in Europe by sponsoring road safety seminars and confe-rences to share company views with a wider audience and tolearn from their experience and concerns.

Traffic Environment

Toyota’s safety effort extend beyond vehicles and people. Since2002, Toyota Motor Europe has been supporting the EuropeanRoad Assessment Programme (EuroRAP), which is an internationalnot-for-profit organisation partnering with motoring organisations,regional and national authorities, and other road experts. It rates

roads according to the risk of serious traffic accidents acrossEurope and shares information about improvements to be madewith road planners, engineers and the general public in order toreduce the likelihood of accidents.

GRSP/GRSI

Toyota has been a member of the Global Road Safety Partnership (GRSP) since the beginning of 2005. GRSP is a globalpartnership involving businesses, civil society and governments dedicated to the sustainable reduction of road crashesin developing and transition countries.

Toyota’s membership was triggered by joining the Global Road Safety Initiative (GRSI). The GRSI is a consortium of sevenglobal companies in the automotive and oil sectors. Over the next five years, GRSI will channel around $10 million to GRSPfor three main activities:

1. Dissemination of good practice2. Establishing regional centres to deliver training and project support linked to good practice3. Direct funding of demonstration projects that apply good practice

The members of GRSI have previously worked together on the Sustainable Mobility Project of the World Business Council forSustainable Development (WBCSD), which had identified the lack of road safety as one of the barriers to sustainable mobility.

First Aid demonstration in April 2004 in Berlin, Germany.

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Social Engagement - Towards Employees

Toyota could never have supported its tremendous growth inEurope on the strength of its capacity for innovation alone.Without the Toyota family, this success story would not have beenpossible. From the outset, and especially as the company expanded,with volume growing from 592,000 units sold in Europe in 1999to over 900,000 units in 2004, Toyota committed itself to makingemployment stability a pillar for trust among its employees.

Today, Toyota provides approximately 55,000 jobs in Europe(including retailers), with the entire expansion occurring within aperiod of only moderate economic growth for the continent as a whole.

Over the last two years alone (2002-2004), headcount has grownby about 80%, of which 75% represents blue collar workers forplants and parts warehouses, 15% engineers(prduction, R&D,

after sales, purchasing), 6% business support (HR, IT, finance)and 4% marketing (product planning, brand, sales).

Commitment to Stable Employment

0 20 40 60 80

Blue Collars

Engineers

Business Support

Marketing

Percentages

4

6

15

75

The Toyota European Forum (TEF) was set up in 1996 inBelgium and was one of the very first such bodies to be setup following the adoption and implementation of theEuropean Works Council Directive. The initial agreementwas signed for six years, and was subsequently renewed in2003 and adapted following the company’s expansion. TheForum is a window of opportunity to improve informationsharing and enhance communication at European level,while fully respecting national and local bodies for socialdialogue. Over the years, it has helped to promote mutualunderstanding between management and employees in line withthe “Toyota Way” values of respect, trust and responsibility.Twice a year, employee representatives have the possibilityof meeting with senior executives to exchange informationon the company’s operations in Europe. Initially the Forumwas composed of representatives from the UK, Germany,Finland and Sweden. Today, following business growth andexpansion throughout Europe, representatives come from10 countries: the initial four as well as France, Spain, Italy,Hungary, Poland and Denmark.

Through the Toyota European Forum, Toyota wishes to promo-te productive and harmonious relationships to support the achie-vement of strong and effective operations. Over the years, theForum has contributed to mutual understanding of the compa-nies’ activities and employees’ interests.

Respect of Social Dialogue: Toyota’s European Forum

Members of top management and employee representatives at the Toyota Forum in July 2004.

Training and Development of Employees

The rapid growth, diversification and globalisation of Toyota in thepast decade have increased the scope of the company’s manu-facturing and marketing presence throughout the world. TheToyota Way is an integral feature of Toyota’s efforts to form a trulyglobal company guided by a common corporate culture, mana-gerial values and business methods. It was progressively imple-mented throughout Europe, so that all business units would beable to participate and derive benefit.

Growing out of Toyota’s Guiding Principles, the Toyota Way issupported by two major pillars:

• Respect for people• Continuous improvement

These, in turn, support five key concepts:

Sharing Values: the Toyota Way

Headcount: %-age growth per category 2002-2004

59


An interesting application of the Toyota Way may be seen in thedevelopment of the 10 core competencies.

Toyota first initiated training to facilitate implementation of theToyota Way with a pilot project involving executives from acrossEurope. The training was then rolled out to NMSCs and the headoffice operations, involving all employees from administrative staffto executives.

The training has been implemented by means of workshops heldat various levels of the company over a four-year period startingin 2002. Countries covered include Belgium, France, the UK,Spain, Italy, Germany, Poland, Denmark, Norway, Sweden andFinland.

Another innovative employee training initiative isthe Toyota Academy, founded in 2002. TheAcademy was set up to convey Toyota’s mana-gement philosophy and values, but also to makesure that employees have an opportunity to deve-lop their creativity and knowledge. Its very aimis to “develop a strong training organisationincorporating skills, product and technical

education to support rapid capability growth at all levels of theorganisation”. It is composed of the School for EmployeeDevelopment (SED) and the School for Retail Development(SRD). Both promote adapted training programmes that are tailo-red to business needs. The Academy also developed a knowled-ge-sharing model based on the exchange of best practiceswithin and between business units in each country.

On a regular basis, employees take part in surveys as part of an ove-rall health check and benchmark. The latest survey, carried out inthe manufacturing and sales groups, revealed high commitmentand job satisfaction rates as well as strong expectations in training

and development. The surveys are a good way to obtain direct feed-back from employees and promote involvement, and they allow thecompany to regularly check the effectiveness of efforts towardscontinuous improvement.

Listening to Employees: Internal Employee Surveys

Health & Safety

The Toyota Way in Safety:

• Purpose: Demonstrating management’s respect for its people

• Principle: Workplaces must protect the health and safety of all employees

• Policy: First priority for management is the safety of their employees

Pan-E H&SSub Committee

EuropeanProduction andKaizen Meeting

Pan-E HRT/SMeeting

CompanyH&S Meeting

Toyota Academy Europe

The Toyota Way: 10 Competencies

1. Effective fact finding and analysis for problem solving2. Delivering innovation and continuous improvement3. Developing and sharing action plans4. Effective decision making5. Perseverance6. Efficient use of resources and work methods7. Developing organisational learning8. Managing own and others performance9. Long term development of self and others

10. Awareness of and commitment to company’smission

• A European Production and Kaizen Meeting (EPKM) wasformed with European top management for the purpose ofimproving health and safety measures and authorising pan-European health and safety policy;

• A Health & Safety Sub-committee was also set up with healthand safety managers and other professionals for the purposeof discussing European health and safety activities inpractical terms and identifying ways to promote greaterawareness of issues and overall health and safety.

Health and safety are top priorities for all Toyota companies andoperations within Europe, with multiple detailed policies andprocedures in place. The manufacturing group, for example, has

established the following organisation for health and safetymanagement in Europe:

60


At Toyota’s plant in France, for example, employees’ safetyawareness development is being promoted through:

• Regular safety communications and safety campaigns;• Developing a Safety Eyes & Team Members Observation

Programme;• Training for the prevention of musculoskeletal symptoms

(or ergonomics problems)

To further ensure ergonomics and machine conformity, allprocesses were evaluated in order to allow for three shifts andchanged processes for new models. New machines wereprepared to ensure compliance with European Union standards.

Toyota’s efforts at continuous health and safety improvementshave been rewarded in the UK. The company received the UK’smost prestigious award in occupational health and safety, the SirGeorge Earl Trophy in 2001 from the Royal Society for thePrevention of Accidents (RoSPA). In 2002, Toyota received the“Engineering Sector Award”, followed in 2003 by “The

Manufacturing Sector Award”, both from the RoSPA. Thisrecognition reflects Toyota’s ongoing commitment to achievinghigh levels of performance in this crucial area.

Green Months Campaign

The Toyota Green Months campaign is a global campaign runningbetween the months of June and September in conjunctionwith the UN-declared “World Environment Day”. The aim of thecampaign is to get all employees involved in reducing Toyota’s

environmental impact and achieving the company’s long-termaim of zero emissions. In Europe, the Green Months campaignhas now been conducted for a number of years. The following aresome examples of projects conducted at various Toyota sites in Europe.

The Manufacturing Sector Award

Case Study: Green Months Campaign NMSC – Louwman & Parqui (NL)The Green months activities in 2004 focused mainly onpaper reduction and the proper handling of office waste.The number of copies that people made on copyingmachines was published every month in the internal newsletter.Tips on saving paper were also communicated. A specialissue of the internal newsletter dedicated to the environmentwas printed and communicated together with an office wasteposter. This special issue covered several topics, such asproper handling of office waste, hazardous materials, the

recycling of waste, as well as the results on paper reduction forthe first half of 2004 compared to 2003. To raise awareness onenergy, tips on energy saving in the office as well as at homewere communicated. The catering company also joined inby offering a special “eco” menu for one week. This campaignresulted in a 2.5% reduction of packaging material shipped toretailers. It also resulted in a 21.5% reduction of copied paperand a 12.5% reduction of paper use. Three departmentswere then rewarded with Bonsai trees for their outstanding results.

Case Study: Green Months Campaign European Head OfficeAt the European head office in Brussels, the following campaignswere successfully completed:

“Waste disposal and paper consumption” - 2003An award was set up for those floors that managed toreach a 30% reduction in paper use and, although this wasa very ambitious target, two floors managed to reach it andthree others came very close.

Not only did many departments take initiatives to reducepaper consumption, but the campaign also generated:

- Increased awareness- Great improvements in the order and control of stock

rooms and copy areas- Spin-offs into other initiatives, i.e. energy-saving tips,

wood-reduction campaign at TPCE, etc.

“Fuel consumption from company cars” - 2004The main action from the campaign was to reduce the fuelconsumption of company cars. Eco-driving tips werepublished in the internal newsletter and communicated

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through e-mail. The average fuel consumption per car drop-ped from 195 litres/month in 2003 to 185 litres/month in2004. Multiplying those 10 litres by the number of companycars amounts to a great reduction in environmental impact,not to mention a substantial cost saving. Part of these costsavings went into a tree planting action at TPCE. Allemployees were invited to plant 1,000 trees on the groundsof Toyota’s European parts warehouse in Diest, Belgium.


Toyota Motor Manufacturing Poland (TMMP)

• “Think & Act” – theme of the Green Months campaign – wasprinted on posters and spread around the company.

• Zero Waste to Landfill Programme to all employees.• “Aim: Zero Emission” posters were hung.• An “Eco-Brochure” was published describing the impact

of the automotive industry on the environment and Toyota’sconcrete solutions for minimising that impact.

• The concept of the “5 Rs” (Refine, Reduce, Reuse, Recycle,Retrieve Energy) was presented as the basic approachfor the TMMP Zero Waste to Landfill Programme.

• An “Environmental Training” programme was launched to get al l employees actively involved in identifyingpossible environmental risks resulting from bad segregationor careless usage of chemicals, etc.

Toyota Motor Manufacturing UK (TMUK)

• Employee awareness of the Green Months campaign waspromoted through Tmag, TMUK’s internal newsletter, as wellas through issuing TMUK “Green Cards” and disseminatingthe company’s environmental policy.

• Community activity was promoted through sending a“Family Pack” to employees’ homes, offering simple tips forfamilies to help the environment. In addition, DerbyshireWildlife Trust completed a wildlife survey at Burnaston,which identified a large number and variety of plants, birdsand insects in the local environment.

• A new environmental award was set up to recognizeemployees’ green focus.

• TMUK collected two environmental awards for achieving thegoal of sending zero waste to landfill – two years ahead of tar-get. The two awards – oak trees – were planted on site.

Toyota Motor Manufacturing France (TMMF)

• Launched weekly news flashes, featuring environment-related issues. The newsletter added a special environ-mental folder. An environmental information board wascreated.

• Participated with students on an environmental commu-nication project.

• An environmental patrol was set up with weekly reportingduring the manufacturing meeting.

• Genchi Genbutsu was put into action when managers visited the plastics shop as well as the waste managementcompany (Tsusho Waste) to conduct risk-assessmentactivities.

Toyota Motor Manufacturing Turkey (TMMT)

• Green Months information boards were created, a ToyotaGreen Magazine was launched and the company sponsoreda photography competition for all employees to increaseenvironmental awareness and motivate TMMT employees.

• An environmental panel, consisting of people from universities,

the chemicals industry, association councils, and ecologymagazine editors was set up to discuss improvement ofenvironmental awareness and waste control. After the panelmeeting, a site tour of the environmental facilities wasorganised for the visitors.

Case Study: Greens Months Campaigns - Manufacturing

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Tsunami Disaster Relief EffortsTo contribute to the relief effort for the Tsunami disaster ofDecember 2004, Toyota’s European companies supportedvarious aid agencies with financial donations, as well as supportingemployee initiatives. Nearly 10 Toyota companies in Europesupported or organised fund-raising initiatives by providingcommunications and matching funds to demonstrate the company’ssupport for the concerns of their employees.

In total, 20 Toyota companies, as well as some of their retailers,contributed to these efforts. Total donations in Europe fromToyota companies and employees amounted to more than€ 570,000.Toyota believes that supporting employee initiativesis important, since good corporate citizenship can only beachieved through the commitment of both the company and itsemployees.

Running for AfricaToyota head-office employees responded enthusiastically to acall to participate in the Brussels 20km run in May 2004 and2005 to collect funds for the development NGO,“Vredeseilanden” (Peace Islands). More than forty employeesparticipated in this event and both fellow employees andToyota Europe financially sponsored their efforts.

Relations with SuppliersToyota seeks to establish and maintain strong and stablelong-term relationships with its suppliers based on mutualbenefit and trust. To foster this, Toyota promotes close and

wide-ranging communication with suppliers, encouraging frankdialogue and exchange of ideas.

Toyota in Europe Association of Manufacturers

The Toyota in Europe Association of Manufacturers (TEAM) is agood example of such strong collaboration. Established in1997, this association consists of 42 European suppliers andhas as its core objective mutual improvement among membercompanies – with support from Toyota – in the areas of quality,delivery and cost-performance. The results and key conclusionsof these shop-floor and practical problem-solving activities areshared among the association’s members and also presentedat the Toyota Annual Business Meeting (ABM). This year's pro-jects focused on developing further practical problem-solvingcapabilities within member suppliers.

The ABM, to which all suppliers are invited, is an opportunity forToyota to outline its objectives for the coming years, includingenvironmental issues and key purchasing messages.

In February 2005, 570 people (representing 298 different sup-pliers) attended the event. Awards were given to suppliers whohad demonstrated significant achievements in quality, delivery,cost and production preparation. Toyota conducted a corporateadvertising campaign to highlight and congratulate the awardwinners. Toyota presented three main policy priorities: quality, theenvironment and the Toyota Way values. The key TMC guest forthe occasion was Mr. Kinoshita, TMC Senior Managing Director,

Member of the Board of TMC and Chief Purchasing Officer of theGlobal Purchasing Center of TMC.

The partnership between Toyota and its suppliers is based on ashared commitment to creating quality products, developingtechnological capabilities, and ensuring reliability in delivery aswell as in cost-competitiveness. As part of the business partnership,Toyota encourages its suppliers to support its initiative to be"good corporate citizens", urging them to incorporate Toyota'senvironmental guidelines into their own environmental programme.These guidelines are called the Toyota Europe EnvironmentalPurchasing Guidelines.

Toyota Annual Business Meeting

Social Engagement - Towards Business Partners

Mr. Kinoshita at the Annual Business Meeting in February 2005.

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Environmental Purchasing Guidelines (EPG)

The knowledge gained by Toyota in its comprehensive andstructured management approach to environmental issues isshared with suppliers. The EPG sets out Toyota’s aims for envi-ronmental protection in Europe, and they apply to suppliers ofparts and raw materials for Toyota’s European manufacturingplants as well as suppliers of car accessories and serviceparts.

Under the umbrella of the Toyota Earth Charter and endorsedby top management, the EPG explains the significance of envi-ronmental issues and provides the necessary data to Toyota toshow whether or not these issues are being adequately addressed.The EPG also covers such key issues as the achievement ofISO 14001/EMAS certification and the implementation of abanned-chemicals list. A key component of the EPG is the

standardisation of environmental control of packaging – ensu-ring that returnable packaging is used for components and thatgoods are supplied in returnable or recyclable packaging.

Toyota has been working with suppliers to remove substances ofconcern (SOC) by the deadlines set by the European Commission.Toyota is working closely with its suppliers to ensure the smoothremoval of SOC material, which enables Toyota and its suppliers tobe ready to meet the End-of-Life Vehicle (ELV) Directive. The nextphase underway is the removal of hexavalent chromium from sup-plied parts, as can be seen in the chapter, Recycling of Vehicles.

Toyota’s suppliers provide information regarding SOCs through theInternational Material Data System (IMDS). The diagram belowshows that this has been completed for the current models onthe market and that work is already underway for the next genera-tion Yaris as well as future models.

Substances of Concern

Material and SoC data collection via IMDS(IMDS: International Material Data System)

Avensis, Corolla, Yaris

Corolla Verso

NG Yaris

2003 2004 2005 2006 2007 2008

CompletedOngoing

Future models

Supplier response to Toyota’s drive for ISO 14001 accreditation hasbeen extremely positive: by early 2005, over 85% of Toyota's

suppliers had achieved ISO 14001 certification, with the remainingcompanies committed to completion of the process by the end of the year.

ISO 14001 Certification

The five key environmental areas for suppliers to act upon are:

• Environmental management systems (ISO 14001)/EMAS• Control of substances of environmental concern (SOCs)• Declarations of material composition• Safe transportation and storage of goods• Environmental control of packaging

Toyota also encourages its suppliers to adopt the key corporatevalues described in the Toyota Way. These focus on respect forpeople and continuous improvement, and this has become afundamental part of the company’s relationships with its suppliers.

The Toyota Way has been presented to suppliers at the ABM andalso at other external events. Presenting the Toyota Way helps tohighlight what suppliers can expect when working with Toyota andwhat is expected of suppliers by Toyota.

The Toyota Way Values

Toyota is currently in the process of encouraging its businesspartners to be good corporate citizens and to follow policies and

requirements in the field of Corporate Social Responsibility forsuppliers, reflecting the Corporate Guidelines and Policies.

Corporate Social Responsibility

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If current mobility trends were to continue, social, economic andenvironmental costs worldwide would be unacceptably high.However, those costs can be avoided if society as a wholefocuses on the achievement of the seven goals set out in the report.

Dr. Shoichiro Toyoda, Honorary Chairman of Toyota and theproject co-chair, emphasises the report’s finding that “the key tosustainable mobility on a global basis will be achieving it in thedeveloping world, thereby narrowing the mobility opportunitydivides that exist within countries as well as between the world’spoorest countries and the developed world.” For moreinformation, see www.sustainablemobility.org

Mobility 2030: Meeting the Challenges to Sustainability

- Global action needed to make transport sustainable

1. Ensuring conventional emissions from transport arenot a significant health concern anywhere in theworld;

2. Limiting “greenhouse gas” emissions from transportto sustainable levels;

3. Significantly reducing traffic-related deaths andserious injuries worldwide;

4. Reducing transport-related noise;5. Mitigating traffic congestion;6. Narrowing mobility “divides” that exist today bet-

ween and within different societies and regions ofthe world;

7. Preserving and improving existing mobility opportu-nities available to the general public.

Toyota – Shell Partnership

In July 2004, Toyota and Shell launched a three-month trial ofShell’s Gas-to-Liquids Fuel (GTL), a clean, colourless and syntheticfuel, derived from gas. The fuel was launched in a fleet of 10Toyota Avensis vehicles equipped with Toyota Diesel CleanAdvanced Technology (Toyota D-CAT). The trial was part of ajoint Toyota-Shell research programme developing newvehicles and fuel technologies, which combine sustainablemobility with improved performance.

The GTL-fuelled trial cars were driven in the London area bymembers of the British Red Cross, Shelter, Guy’s & St.Thomas’ Hospital Trust and the Energy Saving Trust.

The “Driving Tomorrow’s Clean Technology” trial demonstratedthat low-emission GTL can be used in today’s diesel carengines, without any conversion or investment. In addition,when used in advanced clean diesel vehicles, such as the com-mercially available Toyota D-CAT Avensis, emissions are vastlyimproved without sacrificing performance.

Shell’s GTL is the most cost-effective of alternative fuels, and itsunique properties – it offers excellent combustion characteristicsand is virtually free of sulphur – deliver significant emissionbenefits.

WBCSDThe World Business Council for Sustainable Development(WBCSD) is a coalition of 175 international companies, unitedby a shared commitment to sustainable development via thethree pillars of economic growth, ecological balance and socialprogress. The essence of this commitment is to provide businessleadership as a catalyst for change in the direction of sustainabledevelopment and to promote the role of eco-efficiency, innovationand corporate social responsibility.

The Council has undertaken five sector projects over the past eightyears, of which Sustainable Mobility is the largest. As the envi-ronment and sustainable development are high on Toyota’s agenda,Toyota is one of the main sponsors of the WBCSD and hasco-chaired the Sustainable Mobility Project and Report.

On July 5, 2004, the WBCSD released a report, Mobility 2030:Meeting the Challenges to Sustainability, stating that globalcooperation to limit the adverse social and environmental impact ofmotor vehicles, complemented by further technology advances, isneeded to fulfil transport’s vital role in the development ofmodern society. The report was developed by 121 global automotive and energy companies who have worked together overthe past four years under the sponsorship of the WBCSD.

The report defines sustainable mobility as:

“The ability to meet the needs of society to move freely, gainaccess, communicate, trade and establish relationships withoutsacrificing other essential human or ecological values today orin the future.”

1 The companies involved in the project include BP, DaimlerChrysler, Ford, General Motors, Honda, Norsk Hydro, Michelin, Nissan, Renault, Shell, Toyota and Volkswagen. GeneralMotors, Shell and Toyota have served as co-chairs of the project, in which over 200 personnel from the various companies have participated.

65


CSR Europe

In 2003, Toyota Motor Europe became a member of CSREurope, a non-profit organisation that promotes corporatesocial responsibility. CSR Europe is a business-driven mem-bership network with more than 65 member companies(such as Shell, Microsoft, Sony, VW, Dow Europe, Levi

Strauss and BP) and 18 national partner organisations. Thepartner organisations stimulate CSR development at nationaland regional level. In December 2003, the CSR Manager ofToyota Motor Europe was elected as a member of the Boardof Directors of CSR Europe.

The objectives of CSR Europe are:

• To promote the business case for CSR through the dissemination of corporate social responsibility publications,best practices and tools;

• To offer learning, benchmarking and capacity-building opportunities;• To energise a broader stakeholder dialogue between businesses, European policy makers, governments, investors,

social partners, civil society and academics.

The organisation’s main achievements are:

• The creation of a sizeable and politically highly visible and respected network of businesses;• The creation of a major European reference point on CSR strategies and practices;• The launch of the European Academy of Business in Society (EABIS);• The creation of the “CSR Marketplace” (a joint intranet for best practice in CSR);• The establishment of a strong relationship with the European Commission in developing the EU’s approach to CSR.

Communication with Stakeholders

Toyota is committed to dialogue with the widest possible rangeof stakeholders in Europe – not only those involved directly inpublic policy but also representatives of various interest groupsand non-governmental organisations. This commitment is notlimited to dialogue: Toyota wants to give people a chance totouch and experience its innovative products. Throughout theyear, the company organizes meetings with representatives ofNGOs, parliamentarians and officials of EU Member States and

the European Commission. One particularly notable event wasToyota’s Technology Seminar that took place in June 2005 at theADAC test facility at Hanau near Frankfurt, Germany.Presentations and ride-and-drive opportunities were offered,highlighting leading-edge safety and environmental technologies.Such initiatives are complemented by partnerships with NGOsengaged in specific project-based activities, some of which aredescribed in this chapter.

Working with the Future Generation

Social Engagement - Towards Global Society & Local Community

In 2003, Toyota Europe launched the Toyota Schools forSustainable Development (SSD) programme in partnership with theNGOs Groundwork UK and the Environmental Partnership (Polandand the Czech Republic). SSD is a programme that is open toschools and communities in those countries and that aims to pro-mote local community environmental action by giving schools andtheir communities the opportunity to make improvements in theirneighbourhoods for the benefit of the whole community. In 2003 and 2004, a total of 40 projects were implemented. Afterpositive evaluation by the local communities and schools, the NGOsinvolved and Toyota, it was decided that the partnership and theprogramme would continue through 2005. For more information: http://www.schoolsforsustainabledevelopment.org

Schools for Sustainable Development

Children, parents and kindergarten staff create a relaxing area at their kindergartenin Walbrzych, Poland.

66


Children represent the future. That is why Toyota is activelyengaged in the promotion of education and in raising children’sawareness about environmental issues. Toyota believes thatenvironmental education should work both from a top-down andbottom-up approach in order to bring about real and lasting change.

Since 2000, Toyota has been partnering with the RegionalEnvironmental Centre for Central and Eastern Europe (REC), anenvironmental non-profit organisation. Toyota has supportedthe REC in the development and production of a Green Pack,which is a unique multi-media environmental education kit desi-gned to be used during school lessons by teachers and pupils,containing a teacher’s handbook with lesson plans and factsheets for students, a video cassette, an interactive CD-ROM,etc. [For further information, go to http://greenpack.rec.org/] In collaboration with the national ministries of education and/orthe environment, the Green Pack is disseminated in Poland,Hungary, Bulgaria, Czech Republic and Slovakia, and furtherexpansion is planned to include Russia and Turkey in the next few years.

Green Pack

In 1990, Toyota Motor Corporation in Japan introduced a humanresources development initiative aimed at technical schools andinstitutions worldwide. Toyota’s Technical Education Programme(T-TEP) consists in providing training (for faculty) and supplyingtechnical education materials to the schools to enable them totrain superior technicians for the Toyota network.

Last spring, the programme covered 374 schools spread over 50countries worldwide. In Europe, the programme is supported byTMC, Toyota in Europe, the NMSCs and the local authorisedrepairers.

The role of the NMSCs, in cooperation with the repairer, is to helpinstil in the students the basic philosophy of the Toyota Way. Therepairers also provide on-the-job training to give students hands-onexperience and broaden their technical knowledge. The strong jointsupport of the NMSCs and the repairers helps to motivate studentsto become talented technicians capable of providing quality serviceworthy of the Toyota name. At the same time, T-TEP also fostersrecruitment and helps to promote Toyota as the most desiredemployer.

Toyota supplies a great deal of technical materials to the schools,including simulators and engine cut-aways, as well as transparen-cies and other resources and materials. For future Body & Painttechnicians, Toyota supplies panel stands, body repair tools, andcolour-matching training kits. In some cases, cars are provided,depending on the availability and the budget established for theschools. Training manuals and training DVDs and CDs complete thewide range of tools supplied.

T-TEP: Toyota – Technical Education Programme

Students using technical education materials provided by Toyota’s TechnicalEducation Programme.

Toyota Fund for Europe

Since its foundation, Toyota has been engaged in various socialcontribution activities. The Toyota Fund for Europe was created in2004 as a continuation of the Social Contributions Fund that wasestablished in 2002. The purpose of the Fund is to enhance goodcorporate citizenship through social contribution activities inEurope. A committee consisting of executives of the Europeanhead office as well as the national affiliates, defines the overall policyof the Fund and selects projects. The Fund is charged withdeveloping Toyota’s strategy for supporting projects by NGOs,educational institutions and national affiliates in the fields of theenvironment and road safety that are related to Toyota’s coreconcern and competence.

Over the past three years, a total of 27 projects and 20organisations have received support from Toyota. In 2004,Technical and Engineering Education was added as a thirdfocus area for the Fund. One of the principal aims of the Fundis to promote teamwork among various stakeholders and toprovide hands-on experience. The Fund also seeks to promoteopportunities for practical collaboration between NGOs andToyota employees.

In addition to the Fund, each national affiliate is also activelyengaged in social contribution activities that seek to respondto the specific needs of their local communities.

67


Toyota has supported the Red Cross road safety campaign andthe European Road Assessment Program (EuroRAP). In addition,the Toyota Deutschland NMSC regularly works in partnershipwith ADAC in Germany on a campaign to avoid fatalities byraising awareness of the importance of special child seats andconsistent seatbelt use.

Case Study: Road Safety

68

Other examples from the environmental field include:

• Funding of the Toyota Chair for Sustainability and Industry: amasters-level course on sustainability offered by the College ofEurope (Brugge, Belgium, and Natolin, Poland, campuses)

• Funding for “The World is My Village”: a project conducted bythe International Yehudi Menuhin Foundation that encouragedchildren to present their views and desires on the environmentthrough artistic work, with guidance from educational artists.

• Toyota Ireland(Poland)(Pola(Pond)(Poland)(Poland)(Poland)Support for the “Special Olympics Ireland”

•Toyota Hellas (Greece)(Pol(and)(Poland)(Poland)(Po(Pland)“Raising awareness of eco-friendly technology”: This projectaimed to raise awareness among students aged 14-15 yearsold in urban areas about the problems created by a lack ofknowledge about pollution problems. The students examinedrecent technological developments and were offered opportunitiesto present their findings and propose countermeasures.

•Toyota’s European Head Office (Belgium)(P(oland)(Poland)In the local town of Diest, where Toyota’s European parts centre(TPCE) is located, all inhabitants were offered a special barrel –free of charge – for composting kitchen and garden wastes athome and local volunteers provided special training.

• TMMP (Poland).“Clean up the world”: in cooperation with the mayor ofWalbrzych, TMMP organised this action for school children.Pupils gathered rubbish and took part in eco-competitions.

• TMUK (UK)(“Toyota Technology Challenge”: In partnership with RapidElectronics (an educational resources supplier), TMUK launcheda project for school children to design and build an eco-friendlymodel vehicle using recycled or recyclable components with asolar-powered or PIC (programmable micro-controller) engine.

Students construct their own model vehicles at the “Toyota Technology Challenge”


Toyota Motor Corporation (TMC) is a Top 10 Fortune Global 500(1)

enterprise, and ranks among the world’s leading global corpora-tions (15th on the FT500 in terms of market capital). Toyota is oneof the world’s largest automobile manufacturers, selling over 7.5million models annually(2) on all five continents, generating almost€130 billion in net revenues. Toyota has 52 manufacturing com-panies in 26 countries and regions excluding Japan, and marketsvehicles in more than 140 countries, supported by a consolidatedworkforce of over 264,000 people.

Toyota is proud to be one of the most admired automakers of alltime(3), an achievement the company believes stems from its dedi-cation to customer satisfaction. Toyota has been shaped by aunique set of values and principles that have their roots in thecompany’s formative years in Japan.

Toyota first began selling cars in Europe under an official distributoragreement in 1963. Since then, the company has matured intothe leading Japanese automaker in this highly competitive market.Toyota has invested over €6 billion throughout Europe since

1990, and currently employs approximately 55,000 people, bothdirectly and through retailer channels.

Toyota’s operations in Europe are supported by a network of 26National Marketing and Sales Companies in 44 countries, a totalof 2,784 sales outlets, and – in 2005 – eight manufacturingplants. As an important player in Europe, Toyota continues togrow, both geographically and in terms of market share – with thegoal of putting its customers first.

Toyota believes in a policy of localisation, adapting its vehicles tomeet the specific needs of Europe’s varied customers. This means the company’s operations in Europe – be theymanufacturing, research and development or marketing – aregenerally located within the communities they serve.

A new holding company, Toyota Motor Europe (TME), was createdin July 2002, to ensure better coordination between marketing,research and development, manufacturing and external affairsactivities in Europe.

9 Corporate Profile

(1) As published in the 2004 edition of Fortune Magazine(2) Including Hino and Daihatsu(3) As published in the 2005 edition of Fortune Magazine

2003 2004

Total unit sales 834,661 915,966

Market share for 4.7% 5.1%passenger vehicles

Toyota and Lexus European Sales and Market Share

2003 2004

Toyota Avensis 115,966 145,111Toyota Avensis Verso 17,281 13,120Toyota Camry 10,637 13,265Toyota Celica 8,595 6,627Toyota Corolla 177,998 185,136Toyota Corolla Verso 43,515 64,249Toyota MR2 3,647 2,875Toyota Previa 6,268 5,445Toyota Prius 859 8,136Toyota RAV4 105,076 109,059Toyota Yaris 216,453 227,517Toyota Yaris Verso 23,403 21,806Toyota Land Cruiser 47,247 52,389Toyota 4 Runner 79 158Lexus LS430 1,047 1,539Lexus GS300/430 1,255 748Lexus SC430 945 826Lexus IS200/300 8,671 7,196Lexus RX300 9,440 14,137

Toyota & Lexus European Sales by Model – Passenger Vehicles

Key Figures 69

Employment & Investments in Europe as of July 2005 Employment Investment(including ongoing and planned) (in million €)

Marketing & Toyota’s European Head Office - Brussels, BelgiumSales Toyota Accessory & Service Centre -

Brussels, BelgiumToyota Training Centre - Zaventem, BelgiumToyota Parts Centre Europe -Diest, BelgiumToyota Parts Centre South of France -Le Pouzin, FranceToyota Logistics Services Austria Vienna, AustriaToyota Regional Parts CentresGrimsby and Derby Logistics Centre -Grimsby and Derby, United KingdomToyota Logistics Services France -Valenciennes, FranceZeebrugge Vehicle Centre -Zeebrugge, BelgiumMalmo Nordic Hub Toyota Logistics Services Sverige – Malmö, SwedenLe Rendez-Vous Toyota - Paris, France

Engineering & Toyota Motor Manufacturing France - Manufacturing Valenciennes, France - Vehicle & Engine Plant

Toyota Motor Manufacturing UK Ltd - Burnaston, UK - Vehicle PlantToyota Motor Manufacturing UK Ltd - Deeside, Wales - Engine PlantToyota Motor Manufacturing Turkey -Adapazari, Turkey - Vehicle PlantToyota Motor Manufacturing Poland -Walbrzych, Poland - Vehicle and Engine PlantToyota Motor Industries Poland -Jelcz- Laskowice, Poland - Engine PlantToyota Peugeot Citroën Automobile Czech -Kolin, Czech Republic - Vehicle Plant**Toyota Technical Centre - Zaventem, BelgiumSalvador Caetano - Ovar, Portugal

Design European Design Development - Nice, France

TOTAL (through direct and indirect employment)

Investments & Employment in Europe

580

199

7

471

49

35

398

8

9

7

7

4

2,700

4,500

860

3,250

1,800

900

3,000

490

34033

Approx55,000

174

38

6

88

10

218.4

18

11

15.3

9.5

4.6

787

£1,100*

£600*

730

400

322

650

130

0.6813.7

6,051.18

* £1 = €1.5** 50/50 joint venture Toyota/PSA Peugeot Citroën


Glossary of Terms

5R Refine, Reduce, Reuse, Recycle, RetrieveABM Annual Business MeetingACEA European Automobile Manufacturers

AssociationARERAP Authorised Repairer

Environmental Risk Audit Programme

ASE Average Specific EmissionASR Automotive Shredded ResidueA/T Automatic TransmissionBAT Best Available TechniqueCARE Consortium For Automobile RecyclingCFC ChlorofluorocarbonCNG Compressed Natural GasCO Carbon monoxideCO2 Carbon DioxideCSR Corporate Social ResponsibilityCVT Continuously Variable TransmissionCY Calendar Year (1 Jan – 31 December)D4 Direct Injection 4-Stroke Petrol EngineD-4D Direct Injection 4-Stroke Diesel EngineDfR Design for RecyclingDEFRA Department for Environment, Food &

Rural Affairs (UK)DPNR Diesel Particulate and NOx Reduction

catalystE-CQE European Customer Quality & EngineeringEACO Environmental Affairs Coordination OfficeEco-VAS Eco-Vehicle Assessment SystemECU Engine Control UnitsED2 Toyota Europe Design DevelopmentEDER Early Detection, Early ResolutionEGR Exhaust Gas RecirculationELV End Of Life VehicleEMAS Eco-Management and Audit SchemeEMC European Manufacturing CompanyEMS Environmental Management SystemsEPG Environmental Purchasing GuidelinesEPI Exhaust Port InjectorETS Emissions Trading SchemeFCHV Fuel Cell Hybrid VehicleFY Fiscal Year (1 April – 31 March)GHG Green House GasGRI Global Reporting InitiativeGRSP Global Road Safety PartnershipGRSI Global Road Safety InitiativeGTL Gas-to-liquidHAZMAT Hazardous MaterialsHB HatchbackHC HydrocarbonsHFC HydrofluorocarbonsHV Hybrid VehicleHVAC Heating, Ventilation, Air ConditioningIDIS International Dismantling Information

SystemIMDS International Material Data SystemISO International Organisation for

Standardisation

JAMA Japanese Automobile Manufacturers Association

JQMO Joint Quality Management OfficeKPI Key Performance IndicatorLCA Life Cycle AssessmentM/T Manual TransmissionMSDS Material Safety Data SheetNCAP New Car Assessment ProgrammeNGO Non-Governmental OrganisationNMSC National Marketing and Sales CompanyNOx Nitrogen OxideODS Ozone Depleting SubstancePCB Polychlorinated BiphenylPDC Parts Distribution CentrePDI Pre-Delivery InspectionPM Particulate MatterPP PolypropylenePVC Polyvinyl ChlorideR&D Research & DevelopmentREACH Registration, Evaluation, Authorisation

of ChemicalsREC Regional Environmental CentreSCF Social Contributions FundSED School for Employee DevelopmentSOC Substances of Environmental ConcernSOx Sulphur OxideSRD School for Retail DevelopmentSSD Schools for Sustainable DevelopmentVVT-i Variable Valve Timing-intelligentTEAM Toyota in Europe Association of

ManufacturersTEF Toyota European ForumTHS Toyota Hybrid SystemTMC Toyota Motor CorporationTME Toyota Motor EuropeTMIP Toyota Motor Industries PolandTMMF Toyota Motor Manufacturing FranceTMMP Toyota Motor Manufacturing PolandTMMT Toyota Motor Manufacturing TurkeyTMUK Toyota Motor Manufacturing UKToyota D-CAT Toyota Diesel - Clean Advanced

TechnologyTPCA Toyota Peugeot Citroën AutomobileTPCE Toyota Parts Centre EuropeTPCDK Toyota Parts Centre DenmarkTPCGB Toyota Parts Centre Great BritainTPCNO Toyota Parts Centre NorwayTPS Toyota Production SystemTSM Toyota Service Marketing ManualTSOP Toyota Super Olefin PolymerT-TEP Toyota Technical Education ProgrammeVLG Vehicle Logistics GroupVOC Volatile Organic CompoundsVVT-i Variable Valve Timing-intelligentWBCSD World Business Council for Sustainable

Development

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Independent Statement

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Toyota Motor EuropeAvenue du Bourget 60 – 1140 Brussels, Belgium

Tel +32 2 745 21 11 / Fax +32 2 745 20 68

Corporate Affairs: [email protected]

Environmental Affairs: [email protected]

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