Message from
the President

Throughout our history we at Toyota have sought to build a partnership with Brazilian society based on mutual gains. Just two years away from celebrating the sixtieth anniversary of the implantation of our first factory outside of Japan, demonstrating our confidence in this country, we remain strongly committed to the idea that a company must do more than generate employment, drive the economy and manage its environmental impacts.

Fiscal 2015/2016 was a very tough year for the automotive industry in Brazil, with a retraction in production and in sales. Even so, I am proud to say that TDB faced up to this challenging market with courage, together with its dealers and suppliers and supported by each one of its employees. We ended the year with sales of 175,843 units, maintaining our position among the seven largest auto manufacturers in the country. This was due to the ongoing leadership of the Corolla in the midsize sedan segment and the robust performance of the Etios in Brazil, Paraguay, Uruguay, Argentina and Peru, the latter included in our international sales from 2016.

Even in this recessive conjuncture, the company maintained its investments in developing employees and in expanding the operation, particularly worthy of note being the new logistics center in Suape, which positions us closer to Brazil's northeast region and boosts our capillarity and efficiency. As part of the second phase of the revitalization of the São Bernardo do Campo plant, the site became our corporate headquarters, a third shift was introduced in the pressing plant and a new research center was opened. Shortly a visitors' center will be inaugurated. The period also saw the inauguration of the engine plant in Porto Feliz, initiating domestic manufacture for a key production chain stage.

In parallel, we maintained our social investments, worthy of note being the Fundação Toyota do Brasil and its diverse projects – such as Blue Macaw and Toyota APA Costa dos Corais – which drive environmental education, development and sustainable tourism in high biodiversity value regions. In 2015 alone, direct social investments totaled almost R$ 4 million, impacting the lives of thousands of people.

As with the other Toyota subsidiaries worldwide, our growth vision for Toyota do Brasil (TDB) is aligned with Toyota Motor Corporation strategy. In fiscal 2015/2016, it gained an even bolder outline in the form of the Toyota 2050 Environmental Challenge, which will lead the transformation from a model of managing negative impacts to one in which the company will produce positive outcomes for society.

Major company commitments include managing waste, emissions and water consumption - questions which we have been addressing for years in Brazil by means of five-year target-driven cycles, one of which ended in fiscal 2015/2016 with the achievement of all the established goals. The main change, however, is business-related: Toyota has committed to achieving a 90% reduction in emissions from its vehicles by 2050. What this means in practice is that in the near future we will no longer be manufacturing vehicles powered by fossil fuels.

This target reinforces Toyota Motor Corporation's belief that the automotive industry is undergoing a transformation – and, to respond adequately to the challenges faced by mankind, it must pursue disruptive innovation, consolidating its vision of an eco-company. By the end of the fiscal year, we had reached the mark of 9 million hybrid technology vehicles commercialized. This is the technology used in the Prius, on sale in Brazil since 2013. We have created an aggressive plan to boost sales of lower impact cars, making them attractive and competitive, while maintaining the attributes of quality and reliability that constitute the identity of our brand.

In the coming years, we intend to repeat the pioneering spirit demonstrated with the Prius by leading the introduction of electric and hydrogen cell vehicles in Brazil in a drive towards achieving a low carbon economy. In parallel, we continue to work on increasing the fuel efficiency of the vehicles in our current portfolio– as attested by tools such as the Inmetro Brazilian Vehicle Labeling Program. We want to provide our customers with a singular and gratifying experience, from the conception of the product to the post-sale experience, so that they will pay us back with a smile in recognition of our way of doing business.

In this Sustainability Report, we present a summary of the company's performance in fiscal 2015/2016, as well as some indications of what we are preparing for the future. The contents are aligned with the strategic goals of both the Toyota Motor Corporation and TDB and give an account of our material sustainability topics – identified based on a wide-ranging consultation of the company's stakeholders in Brazil.

Enjoy reading it.

Koji Kondo
President, Toyota do Brasil