Toyota Reports First-Half Increase In Sales And Operating Income

Ordinary & Net Income Decline Slightly

(All financial information has been prepared in accordance with Generally Accepted Accounting Principles in Japan)

Tokyo—TOYOTA MOTOR CORPORATION (TMC) today announced financial results for the six months ended September 30, 2000.

On a consolidated basis, net sales for the six-month period ended September 30, 2000 totaled 6.4 trillion yen, up 3.2 percent compared to the same period last year. Operating income increased 3.7 percent to 376.1 billion yen, while ordinary income declined 2.6 percent to 393.9 billion yen. Net income for the period decreased 20.9 percent to 159.5 billion yen, and net income per share was 43.2 yen, a decrease of 11.27 yen compared to the six months period ended September 30, 1999.

The 13.6 billion yen increase in consolidated operating income was due largely to a 120 billion yen increase in sales and an additional 90 billion yen in cost reduction, minus a foreign currency exchange loss of 180 billion yen and an increase in research and development and other costs of 16.4 billion yen.

Unconsolidated Net Sales Increase, Net Income Declines

On an unconsolidated basis, net sales for the six months ended September 30, 2000 totaled 3.7 trillion yen, a year-over-year increase of 3.9 percent. Operating income declined 19.9 percent, to 191.3 billion yen, while ordinary income decreased 21.3 percent to 226.7 billion yen. Net income declined 39.9 percent compared with the same period last year, to 104.3 billion yen.

During the period, TMC also announced an interim cash dividend for the fiscal year’s first six months of 11 yen per share, the same amount declared for the six months ended September 30, 1999.

Commenting on the results, TMC President Fujio Cho said, “Implementing structural reforms for enhanced efficiency and cost reduction has born fruit during this period, and we expect it to continue contributing to better earnings into the future. These and other measures have played a key part in helping TMC offset the negative influences of changes in foreign exchange rates, creating first-half results that reflect the successes of our day-to-day business activities.”

TMC’s recent business strategy has been to establish a firm income base in Japan and an overseas sales strategy that is responsive to the strong yen. In order to meet these objectives, TMC has been aggressively 1) focusing on the introduction of more attractive products, 2) increasing its technological competitiveness and 3) striving to achieve ever higher levels of efficiency and cost reduction.

Concerning Japan and the introduction of more attractive products in the Japanese market, Cho said, “The favorable responses received by our youth-targeted bB and FunCargo, as well as by the Crown, Estima and other completely new or totally redesigned models testify to the advances we have made in product development. TMC believes it has been able to increase consumer demand with these products. Additionally, the August releases of the all-new Corolla and Celsior are off to a good start, leading toward expectations for yet greater sales.”

Cho said full production at TMC’s engine manufacturing operation in the U.S. state of West Virginia and at its Tundra pickup truck-producing plant in Indiana has supported sales and contributed to profit increases in North America. “The result of these and other engagements abroad took first-half overseas sales to their highest point ever,” he said.

In addition to the increase in sales, Cho said the release of the Prius hybrid vehicle in North America and Europe has heightened recognition of TMC’s environmental approach.

Forecast for Unconsolidated Second Half

TMC also announced its forecast for the fiscal year ending March 31, 2001. Based on a second-half exchange rate of 105 yen to the dollar and 90 yen to the euro, TMC forecasts unconsolidated sales of 7.8 trillion yen, ordinary income of 570 billion yen and net income of 300 billion yen.

(Please see attached information for details on consolidated and unconsolidated results.

ENDS

Cautionary Statement with Respect to Forward-Looking Statements

This release contains forward-looking statements that reflect our plans and expectations. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. These factors include: (i) changes in economic conditions affecting the automotive markets in Japan, North America, Europe and other markets in which we operate; (ii) fluctuations in currency exchange rates, particularly with respect to the value of the Japanese yen, the United States dollar and the euro; (iii) our ability to realize production efficiencies and to implement capital expenditures at the levels and times planned by management; (iv) changes in the laws, regulations and government policies affecting our automotive operations, particularly laws, regulations and policies relating to the environmental protection, vehicle emissions, vehicle fuel economy and vehicle safety, as well as changes in laws, regulations and government policies affecting our other operations, including our telecommunications operations and the outcome of future litigation and other legal proceedings; (v) political instability in the markets in which we operate; (vi) our ability to timely develop and achieve market acceptance of new products; and (vii) fuel shortages or interruptions in transportation systems, labor strikes, work stoppages or other interruptions to or difficulties in the employment of labor in the major markets where we purchase materials, components and supplies for the production of our products or where our products are produced, distributed or sold. A discussion of these and other factors which may affect our actual results, performance, achievements or financial position is contained in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and elsewhere in our annual report on Form 20-F, which is on file with the United States Securities and Exchange Commission.