Toyota 2011 Annual Report Download - page 37

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Management and
Corporate Information
Business and
Performance Review
Financial Section and
Investor InformationSpecial Feature
Message/Vision
Risk Factors
Political, Regulatory, Legal and Other Risks
The automotive industry is subject to various governmental regulations.
The worldwide automotive industry is subject to various laws and governmental regulations including those
related to vehicle safety and environmental matters such as emission levels, fuel economy, noise and
pollution. In particular, automotive manufacturers such as Toyota are required to implement safety measures
such as recalls for vehicles that do not or may not comply with the safety standards of laws and governmental
regulations. In addition, Toyota may, in order to reassure its customers of the safety of Toyota’s vehicles,
decide to voluntarily implement recalls or other safety measures even if the vehicle complies with the safety
standards of relevant laws and governmental regulations. Many governments also impose tariffs and other
trade barriers, taxes and levies, or enact price or exchange controls. Toyota has incurred, and expects to
incur in the future, significant costs in complying with these regulations. If Toyota launches products that
result in safety measures such as recalls, Toyota may incur various costs including significant costs for free
repairs. Furthermore, new legislation or changes in existing legislation may also subject Toyota to additional
expenses in the future. If Toyota incurs significant costs related to implementing safety measures or meeting
laws and governmental regulations, Toyota’s financial condition and results of operations may be adversely
affected.
Toyota may become subject to various legal proceedings.
As an automotive manufacturer, Toyota may become subject to legal proceedings in respect of various
issues, including product liability and infringement of intellectual property. Toyota may also be subject to
legal proceedings brought by its shareholders and governmental proceedings and investigations. Toyota is
in fact currently subject to a number of pending legal proceedings and government investigations. A negative
outcome in one or more of these pending legal proceedings could adversely affect Toyota’s financial
condition and results of operations.
Toyota may be adversely affected by natural calamities, political and economic instability,
fuel shortages or interruptions in social infrastructure, wars, terrorism and labor strikes.
Toyota is subject to various risks associated with conducting business worldwide. These risks include natural
calamities; political and economic instability; fuel shortages; interruption in social infrastructure including
energy supply, transportation systems, gas, water, or communication systems resulting from natural hazards
or technological hazards; wars; terrorism; labor strikes and work stoppages. Should the major markets in
which Toyota purchases materials, parts and components and supplies for the manufacture of Toyota
products or in which Toyota’s products are produced, distributed or sold be affected by any of these events,
it may result in disruptions and delays in the operations of Toyota’s business. Should significant or prolonged
disruptions or delays related to Toyota’s business operations occur, it may adversely affect Toyota’s financial
condition and results of operations.
0725
R&D and Intellectual Property
Corporate Philosophy
Management Team
Corporate Governance
Risk Factors
Other Management and Corporate Data
37TOYOTA ANNUAL REPORT 2011