Issue of Debt

Toyota Motor Corporation
26 July 2001
                                                    Toyota Motor Corporation
                                             (Toyota Jidosha Kabushiki Kaisha)


Notice Concerning Issue of Bonds with Warrants for the Purpose of an Incentive
Plan

Toyota Motor Corporation ('TMC') has resolved at a meeting of its Board of
Directors held on July 26, 2001, to issue bonds with warrants ('Bonds with
Warrants') as follows.

Such issue is for the purpose of granting options similar to stock options under
the Commercial Code to 58 persons among directors, executive officers and senior
staff of TMC's overseas related companies by using warrants ('Warrants').

Summary of the terms of Bonds with Warrants
 
1.     Name of Bonds:                Unsecured Bonds with Warrants of Toyota
                                     Motor Corporation - First Series

2.     Total amount of Bonds:        JPY 600,000,000

3.     Denomination of each Bond:    A single denomination of JPY 100,000,000 

4.     Form of Bonds:                Bearer Bonds with Coupons

5.     Interest rate:                To be determined by the Representative     
                                     Director(s), within the range not exceeding
                                     2.0% per annum.

6.     Issue price:                  The issue price of the Bonds shall be 100% 
                                     of the principal amount and that of the    
                                     Warrants is to be determined. The issue    
                                     price of the Warrants shall be determined  
                                     by the Representative Director(s) on August
                                     1, 2001, within the range of 5% to 15% per 
                                     Denominated Amount.    The Denominated     
                                     Amount means the aggregated issue price of 
                                     the new shares to be issued upon the       
                                     exercise one Warrant which is calculated by
                                     multiplying the issue price per par value  
                                     share of common stock of TMC to be issued  
                                     upon the exercise of the Warrants (the     
                                     'Exercise Price') by 100.

7.  Redemption price:               100% of the principal amount

8.  Maturity date:                  August 17, 2005

9.  Offering period:                From August 3, 2001 through August 16, 2001

10. Payment Date:                   August 17, 2001 

11. Method of offering:             Subscription by The Nomura Securities Co.,  
                                    Ltd.

12. Security or guarantee:           The Bonds are not secured by any security  
                                     over any assets, nor guaranteed. There are 
                                     no assets reserved as security for the     
                                     Bonds.

13. Special covenants:               The Bonds are subject to certain covenants 
                                     relating to the negative pledge.

14. Redemption prior to maturity:    TMC may, at any time after the issue of the
                                     Bonds, purchase and cancel any of the      
                                     Bonds; provided, however, that no such     
                                     cancellation shall cause the aggregate     
                                     principal amount of all Bonds thereafter   
                                     remaining outstanding to be less than the  
                                     aggregate amount of issue price of the     
                                     shares to be issued upon exercise of all   
                                     Warrants then remaining unexercised.

15. Interest payment dates:          February 17 and August 17 of each year 

16. Place of payment:                Head office of TMC

17. Underwriter:                     The Nomura Securities Co., Ltd. 

18. Matters concerning Warrants:

     (1) Proportion of the amount of Warrants to the principal amount of Bonds:

               Proportion calculated by multiplying the Denominated Amount by   
               194 and dividing such product by JPY 100 million. Each Warrant   
               represents the right to subscribe for the new shares in the      
               Denominated Amount.

     (2) Aggregate amount of issue price of the shares to be issued upon        
          exercise of the Warrants:

               Amount calculated by multiplying the Exercise Price to be        
               determined on August 1, 2001 by 116,400.

     (3) Shares to be issued upon exercise of the Warrants:

               Par value shares of common stock of TMC (par value being JPY 50  
               per share, the 'Shares'); provided, however, that in case TMC    
               decides that the shares to be issued upon exercise of the        
               Warrants be non-par value shares of common stock of TMC, non-par 
               value shares of common stock of TMC.

     (4) Condition to exercise the Warrants:

               The Exercise Price is to be determined. It shall be the closing 
               price of the regular transaction of the Shares on the Tokyo Stock
               Exchange on August 1, 2001 (if there is no transaction made on   
               that day, then the closing price of the latest date prior to such
               day, on which a transaction was made) multiplied by 1.025. Any   
               fractions less than one yen resulting from such calculation shall
               be rounded up to the nearest yen. In any event, the Exercise     
               Price to be calculated in accordance with the above formula shall
               not be less than JPY 3,511.

               The number of Shares to be issued upon exercise of the Warrants  
               shall be as follows:

                                         Aggregate Denominated Amount of the    
                                           Warrants to be presented for the
               Number of Shares =              purpose of the exercise
                                             ---------------------------
                                                    Exercise Price

               Any fraction of a share arising upon exercise of Warrants shall  
               be disregarded.

     (5) Period during which the Warrants may be exercised:

               From August 1, 2003 to August 3, 2005; provided, however, that   
               the Warrants cease to be exercisable when the Bonds become due   
               and payable.

     (6) Partial exercise of a Warrant:

               No Warrant may be exercised in part.

     (7) Dividend to be paid on the Shares to be issued upon exercise of the    
         Warrants:

               With respect to the initial payment of dividends and cash        
               distribution as provided in Article 293-5 of the Commercial Code 
              ('interim dividends') on the Shares issued upon exercise of the   
               Warrants, such exercises shall be deemed to have taken effect on 
               April 1 in case an application for exercise was made during the  
               period from April 1 to September 30, and on October 1 in case an 
               application for exercise was made during the period from October 
               1 to March 31 of the following year.

     (8) Transfer of the Warrants: 

               The Warrants alone may be transferred separately from the Bonds; 
               provided, however, that transfer of the Warrants by directors,   
               executive officers and senior staff of TMC's overseas related    
               companies is restricted pursuant to their agreements with such   
               related companies.

     (9) The portion of the Exercise Price which shall not be accounted for as  
         stated capital:

              The portion of the Exercise Price which shall not be accounted for
              as stated capital shall be the amount of such Exercise Price as   
              adjusted less the amount which will be accounted for as stated    
              capital; the amount to be accounted for as stated capital shall be
              one-half of such Exercise Price as adjusted and any fraction less 
              than one yen resulting from such calculation shall be rounded up  
              to the nearest yen; provided, however, that if the shares to be   
              issued shall be par value shares of common stock of TMC and the   
              amount to be accounted for as stated capital resulting from above 
              calculation shall be less than the par value of the par value     
              shares, the amount to be accounted for as stated capital shall be 
              the par value of the par value shares of common stock of TMC.

19. Payment Handling Place:     Head office of Sumitomo Mitsui Banking          
                                Corporation

20. Place where applications for exercise of the Warrants may be made:

                                Head office of The Nomura Securities Co., Ltd.

21. Recording Agency:           Not applicable.

22. All Warrants shall be repurchased by TMC and almost all shall be sold to its
overseas related companies. Overseas related companies shall execute agreements
pertaining to the incentive plan relating to the acquired Warrants with their
directors, executive officers and senior staff and grant such Warrants to them
in accordance with such agreements.

23. Any other matters necessary in connection with the issue of the Bonds with
Warrants shall be entirely entrusted to the Representative Director(s).

(For reference) 
Matters Concerning Stabilizing Transactions

In connection with the issue of the Bonds with Warrants, stabilizing
transactions provided for under Paragraph 1, Article 20 of the Enforcement Order
of the Securities and Exchange Law of Japan will not be effected.

Contact: TMC, Public Affairs at [phone]-6 (Tokyo Head Office) 
                                (0565)23-1520-4  (Head Office) 
                                [phone]-3  (Nagoya)