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UNIVERSITY OF MUMBAI

PROJECT REPORT

ON

MARKETING STRATEGIES & PLANS OF TOYOTA MOTORS

BY

MR. JITEN H MENGHANI

ROLL NO 32

M.COM. (PART-1)

ACADEMIC YEAR 2013-2014

PROJECT GUIDE

PROF. MRS N.A. NERURKAR

PARLE TILAK VIDYALAYA ASSOCIATION‟S

M.L.DAHANUKAR COLLEGE OF COMMERCE

DIXIT ROAD, VILE PARLE (EAST)

MUMBAI-400 057

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DECLARATION

I, MR. JITEN H MENGHANI OF PARLE TILAK VIDYALAYA

ASSOCIATION‟S, M.L.DAHANUKAR COLLEGE OF

COMMERCE of M.COM (PART-1) (Semester-2) hereby

Declare that I have completed this project on

MARKETING STRATEGIES & PLANS OF TOYOTA MOTORS

in

The Academic year 2013-2014. The information

Submitted is true & original to the best of knowledge.

-----------------------

(Signature of student)

JITEN.H.MENGHANI

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ACKNOWLEGEMENT

To list who all have helped me is difficult because they are so

numerous and the depth is so enormous.

I would like to acknowledge the following as being idealistic

channels and fresh dimensions in the completion of this

project

I take this opportunity to thank the University of Mumbai for

giving me chance to do this project.

I would like thank my Principal, Dr. Madhavi.S.Pethe

for providing the necessary facilities required for completion of

this project.

I would also like to express my sincere gratitude towards my

project guide PROF. MRS N.A. NERURKAR whose guidance and care

made the project successful.

I would like to thank my college library, for having provided

Various reference books and magazines related to my project.

Lastly I would like to thank each & every person who directly

or indirectly helped me in completion of the project especially

my parents & peers who supported me throughout my project.

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Content

a) Introduction

b) History

c) Toyota’s Global Vision

d) Toyota’s Mission

e) Strategy: Unrelated Diversification

(Creation of ‘Toyota Motors’ from ‘Toyota Industries’)

f) Analysis

g) Toyota Industries: Sales by Business Segment (FY 2012, Consolidated Basis)

h) Logo and Branding

i) Marketing

j) Company strategy

k) Principles of Toyota

l) Worldwide presence

m) Special Feature: Toyota's Efforts in Emerging Markets

n) Innovative International Multipurpose Vehicle

o) Vehicle Production, Sales and Exports by Region

p) Toyota and Ford collaborate to build Hybrid cars

q) History of Technological Development from 1990

r) Majority-owned subsidiaries

s) SWOT ANALYSIS OF TOYOTA

t) Conclusion

u) References

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Introduction

Toyota Motor Corporate is a Japanese automotive manufacturer headquartered in Toyota, Aichi,

Japan. In 2013 the multinational corporation consisted of 333,498 employees worldwide and, as of

January 2014, is the fourteenth-largest company in the world by revenue. Toyota was the

largest automobile manufacturer in 2012 (by production). In July of that year, the company reported

the production of its 200-millionth vehicle. Toyota is the world's first automobile manufacturer to

produce more than 10 million vehicles per year. It did so in 2012 according to OICA,[4] and in

2013 according to company data. As of November 2013, Toyota was the largest listed company in

Japan by market capitalization (worth more than twice as much as 2-ranked SoftBank) and by

revenue.

The company was founded by Kiichiro Toyoda in 1937 as a spinoff from his

father's company Toyota Industries to create automobiles. Three years earlier, in 1934, while still a

department of Toyota Industries, it created its first product, the Type A engine, and, in 1936, its first

passenger car, the Toyota AA. Toyota Motor Corporation produces vehicles under 5 brands,

including the Toyota brand, Hino, Lexus, Ranz, and Scion. It also holds a 51.2% stake in Daihatsu,

a 16.66% stake in Fuji Heavy Industries, a 5.9% stake in Isuzu, and a 0.27% stake in Tesla, as well

as joint-ventures with two in China (GAC Toyota and Sichuan FAW Toyota Motor), one in India

(Toyota Kirloskar), one in the Czech Republic (TPCA), along with several "nonautomotive"

companies. TMC is part of the Toyota Group, one of the largest conglomerates in the world.

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History

1920s-1930s

Toyota was started in 1933 as a

division of Toyoda Automatic Loom

Works devoted to the production of

automobiles under the direction of the

founder's son, Kiichiro Toyoda. Its first

vehicles were the A1 passenger car and

the G1 in 1935. The Toyota Motor Co.

was established as an independent

company in 1937. In 2008, Toyota's

sales surpassed General Motors,

making Toyota number one in the

world.

In 1924, Sakichi Toyoda invented the Toyoda Model G Automatic Loom. The principle of Jidoka,

which means the machine stops itself when a problem occurs, became later a part of the Toyota

Production System. Looms

were built on a small

production line. In 1929, the

patent for the automatic loom

was sold to a British company,

generating the starting capital

for the automobile

development.

Vehicles were originally sold

under the name "Toyoda" ,

from the family name of the

company's founder, Kiichirō Toyoda. In April 1936, Toyoda's first passenger car, the Model AA,

was completed. The sales price was 3,350 yen, 400 yen cheaper than Ford or GM cars.

In September 1936, the company ran a public competition to design a new logo. Of 27,000 entries,

the winning entry was the three Japanese katakana letters for "Toyoda" in a circle. But Risaburō

Toyoda, who had married into the family and was not born with that name, preferred "Toyota"

because it took eight brush strokes (a lucky number) to write in Japanese, was visually simpler

(leaving off the diacritic at the end) and with a voiceless consonant instead of a voiced one (voiced

consonants are considered to have a "murky" or "muddy" sound compared to voiceless consonants,

which are "clear").

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Since "Toyoda" literally means

"fertile rice paddies", changing the

name also prevented the company

from being associated with old-

fashioned farming. The newly

formed word was trademarked and

the company was registered in

August 1937 as the "Toyota Motor

Company".

1940s-1950s

From September 1947, Toyota's small-sized vehicles were sold under the name "Toyopet" .The first

vehicle sold under this name was the Toyopet SA, but it also included vehicles such as the Toyopet

SB light truck, Toyopet Stoutlight truck, Toyopet Crown, Toyopet Master, and the Toyopet Corona.

The word "Toyopet (Japanese article)" was a nickname given to the Toyota SA due to its small size,

as the result of a naming contest the Toyota Company organized in 1947. However, when Toyota

eventually entered the American market in 1957 with the Crown, the name was not well received

due to connotations of toys and

pets. The name was soon dropped

for the American market, but

continued in other markets until the

mid-1960s.

1960s-1970s

By the early 1960s, the US had

begun placing stiff import tariffs on

certain vehicles. The chicken tax of

1964 placed a 25% tax on

imported light trucks. In response to

the tariff, Toyota, Nissan Motor

Co. and Honda Motor Co. began

building plants in the US by the

early 1980s.

1980s

Toyota received its first Japanese

Quality Control Award at the start of

the 1980s and began participating in

a wide variety of motorsports. Due

to the 1973 oil crisis, consumers in the lucrative US market began turning to small cars with better

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fuel economy. American car manufacturers

had considered small economy cars to be

an "entry level" product, and their small

vehicles employed a low level of quality to

keep the price low. In 1982, the Toyota

Motor Company and Toyota Motor Sales

merged into one company, the Toyota

Motor Corporation. Two years later,

Toyota entered into a joint venture with General Motors called the New United Motor

Manufacturing, Inc, NUMMI, operating an automobile-manufacturing plant in Fremont, California.

The factory was an old General Motors plant that had been closed for two years. Toyota then started

to establish new brands at the end of the 1980s, with the launch of their luxury division Lexus in

1989.

1990s

In the 1990s, Toyota began to branch out from

producing mostly compact cars by adding many

larger and more luxurious vehicles to its lineup,

including a full-sized pickup, the T100 (and later

the Tundra); several lines of SUVs; a sport

version of theCamry, known as the Camry

Solara; and the Scion brand, a group of several

affordable, yet sporty, automobiles targeted specifically to young adults. Toyota also began

production of the world's best-selling hybrid car, the Prius, in 1997.

With a major presence in Europe, due to the success of Toyota Team Europe, the corporation

decided to set up Toyota Motor Europe Marketing and Engineering, TMME, to help market

vehicles in the continent. Two years later, Toyota set up a base in the United Kingdom, TMUK, as

the company's cars had become very

popular among British drivers. Bases

in Indiana, Virginia, and Tianjin were also

set up. In 1999, the company decided to list

itself on the New York and London Stock

Exchanges.

2000s

In 2001, Toyota's Toyo Trust and

Banking merged with two other banks to

form UFJ Bank, which was accused of

corruption by Japan's government for

making bad loans to alleged Yakuza crime

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syndicates with executives

accused of blocking Financial

Service Agency inspections. The

UFJ was listed among Fortune

Magazine's largest money-losing

corporations in the world, with

Toyota's chairman serving as a

director. At the time, the UFJ was

one of the largest shareholders of

Toyota. As a result of Japan's

banking crisis, UFJ merged with

the Bank of Tokyo-Mitsubishi to become the Mitsubishi UFJ Financial Group.

In 2002, Toyota managed to enter a Formula One works team and establish joint ventures with

French motoring companies Citroën and Peugeot a year after Toyota started producing cars in

France.

Toyota ranked eighth on Forbes

2000 list of the world's leading

companies for the year 2005 but

slid to 55 for 2011. The company

was number one in global

automobile sales for the first

quarter of 2008.

In 2007, Toyota released an

update of its full-size truck,

the Tundra, produced in two

American factories, one in Texas

and one in Indiana. "Motor Trend" named the Tundra "Truck of the Year", and the 2007 Toyota

Camry "Car of the Year" for

2007.

2010s

From November 2009 through

2010, Toyota recalled more than

9 million cars and trucks

worldwide in several recall

campaigns, and briefly halted

production and sales. Toyota

initiated the recalls, the first two

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with the assistance of the U.S.National Highway Traffic Safety

Administration (NHTSA), after reports that several vehicles experienced unintended acceleration.

In 2011, Toyota, along with large parts of the Japanese automotive industry, suffered from a series

of natural disasters. The 2011 Tōhoku earthquake and tsunami led to a severe disruption of the

supplier base and a drop in production and exports. Severe flooding during the

2011 monsoon season in Thailand affected Japanese automakers that had chosen Thailand as a

production base. Toyota estimated to have lost production of 150,000 units to the tsunami and

production of 240,000 units to the floods.

In October 2012, Toyota announced a recall of 7.43 million vehicles worldwide to fix

malfunctioning power window switches, the largest recall since that of Ford Motor Company in

1996. The move came after a series of recalls between 2009 and 2011 in which it pulled back

around 10 million recalls amidst claims of faulty mechanics.

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Analysis of Vision & Mission Statement VISION

A vision statement for a company or organization focuses on the potential inherent in the

company's future, or what they intend to be. It contains references to how the company intends to

make that future into a reality, the vision statement is simply a description of the “what,”meaning,

what the company intends to become.

Toyota’s Global Vision

“Toyota will lead the way to future of mobility, enriching lives around the world with the safest and

the most responsible ways of moving people.

Through our commitment to quality, and respect to the planet, we aim to exceed expectations and

be rewarded with a smile.

We will meet our challenging goals by engaging the talents and passion of people, who believe

there is always a better way.”

Future of Mobility Commitment to Quality

Enriching lives around the World Constant Innovation

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The Statement gives voice to who they are as a global enterprise, the values they embody, an the

good that they are striving to accomplish. Designed to inspire all Team Members to even greater

things, the Statement emphasizes Toyota's commitment to quality, innovation and respect for the

planet. At its heart is this signature statement: We aim to exceed expectations and be rewarded with

a smile.

One aspect of the vision is “respect to the planet”

The process for developing an Environment Action Process begins with the parent company in

Japan, Toyota Motor Corporation (TMC). Every five years, TMC develops a global five-year

environmental action plan (EAP).

Eg The ingenuity and persistence of team members at their Cambridge, Ontario plant, have found a

way to reduce annual water consumption of water by more than 13.2 million gallons (50,000 cubic

meters).

This has made their plant in Princeton, Indiana, honor as one of only two North American

recipients of the Water Champion award.

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MISSION

A mission statement is a statement of the purpose of a company, organization or person, its reason

for existing. The mission statement should guide the actions of the organization, spell out its overall

goal, provide a path, and guide decision-making. It provides "the framework or context within

which the company's strategies are formulated.

Toyota’s Mission

“To provide safe & sound journey. Toyota is developing various new technologies from the

perspective of energy saving and diversifying energy sources. Environment has been first and most

important issue in priorities of Toyota and working toward creating a prosperous society and clean

world.”

The mission statement of Toyota Indus Motors Company Ltd, defines the organization's purpose

and primary objectives. Its prime function is “to provide a safe and sound journey.”

It provides a reason for being, which is one of the most important aspect of a mission statement.

The mission statement is clear and concise and provides focus and a sense of direction.

Toyota‟s focus as mentioned in the mission statement is to develop new technologies and to

conserve energy. They also seek to be environment friendly.

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Strategy: Unrelated Diversification (Creation of ‘Toyota Motors’ from ‘Toyota Industries’)

Background In 1933, Toyoda Automatic Loom Works, Ltd created a new division devoted to the production

of automobiles under the direction of the founder's son, Kiichiro Toyoda.

Toyoda Automatic Loom Works, Ltd was encouraged to develop automobile production by the

Japanese government, which needed domestic vehicle production partly due to the worldwide

money shortage and partly due to the war with China

Toyota Motor Co. was established as an independent and separate company in 1937.

The company was eventually founded by Kiichiro Toyoda in 1937 as a spinoff from his father's

company Toyota Industries to create automobiles.

Toyota currently owns and operates Lexus and Scion brands and has a majority shareholding

stake in Daihatsu Motors, and minority shareholdings in Fuji Heavy Industries Isuzu Motors, and

Yamaha Motors.

Toyota Industries has promoted diversification and expanded the scope of its business domains

to include textile machinery, automobiles (vehicles, engines, car airconditioning compressors, etc.),

and materials handling equipment, electronics, and logistics solutions.

In 1983, Toyota Financial Services became a new subsidiary of Toyota Motor Corporation in

Japan. The Toyota Financial Services brand identity was officially launched in December 1999.

TFS is a service mark that acts as an umbrella brand name used to market the products of

Toyota Motor Credit Corporation (TMCC) and Toyota Motor Insurance Services, Inc.(TMIS).

TMCC was incorporated in California on October 4, 1982, and commenced operations in May 1983

by approving a finance contract for a used Toyota Corolla in Denver, Colorado. TFS provides retail

and wholesale financing, retail leasing, vehicle protection plans and certain other financial services

to authorized Toyota, Lexus and Scion dealers, Toyota forklift and Hino dealers as well as Toyota

Material Handling, U.S.A. dealers, affiliates, and their customers in the United States.

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Analysis Toyota Industries: Sales by Business Segment (FY 2012, Consolidated Basis)

"FY 2012" refers to the fiscal year ended March 31, 2012, and other fiscal years are referred to in a

corresponding manner.

1. Why is it unrelated diversification?

At the time of establishment of Toyota Motor Company, present day „Toyota Industries‟ was in

the business of making handlooms.

This can be seen as a „Conglomerate Diversification‟ as Toyota expanded its

scope from Handloom Industry to Automobile Industry.

2. Reason behind Diversification

Sakichi Toyoda, a prolific inventor, created the Toyoda Automatic Loom Company based on his

groundbreaking designs, one of which was licensed to a British concern for 1 million yen.

This money was used to help found Toyota Motor Company, which was supported by the

Japanese government partly because of the military applications.

The Japanese relied on foreign trucks in the war in Manchuria, but with the Depression, money

was scarce. Domestic production would reduce costs, provide jobs, and make the country more

independent.

By 1936, just after the first successful Toyoda vehicles were produced, Japan demanded that any

automakers selling in the country needed to have a majority of stockholders from Japan, along with

all officers, and stopped nearly all imports.

3. Benefits from Diversification

Less Competition: The Japanese government passed a law forcing the market leaders, General

Motors and Ford, to leave Japan. Also, failure of the Government to encourage the large Japanese

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conglomerates (zaibatsu) to enter the industry, made the government provide

incentives for Toyota to do so, making it the only licensed car manufacturer alongside Nissan in

1930s.

Portfolio Diversification: Toyota would be making vehicles alongside handlooms, which would

help them broaden their scope & grow as a Group. As of today Toyota is the largest producers of

carmakers, having dethroned General Motors again!

The Japanese company sold 9.7 million cars and trucks worldwide in 2012, although it's still

counting. GM sold 9.29 million.

Toyota Motors ranked No.8 in the Fortune 500 list in the year 2011.

Toyota Financial Services has constructed a global network that covers approximately 90% of

the markets in which Toyota sells its vehicles. Mainly concentrated on auto loans, leases and

Toyota dealer floor plan requirements, TFS provides auto sales financing to approximately 5.4

million customers. Thus effectively helping in making their own cars more affordable to their

potential consumers all around the world. Again being a strategy that helps them a stronger

competitor in the market.

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Logo and Branding

In 1936, Toyota entered the passenger car market with its Model AA and held a competition to

establish a new logo emphasizing speed for its new product line. After receiving 27,000 entries, one

was selected that additionally resulted in a change of its moniker to "Toyota" from the family name

"Toyoda". The new name was believed to sound better, and its eight-stroke count in the Japanese

language was associated with wealth and good fortune. The original logo no longer is found on its

vehicles, but remains the corporate emblem used in Japan.Still, no guidelines existed for the use of

the brand name, "TOYOTA", which was used throughout most of the world, which led to

inconsistencies in its worldwide marketing campaigns.To remedy this, Toyota introduced a new

worldwide logo in October 1989 to commemorate the 50th year of the company, and to differentiate

it from the newly released luxury Lexus brand. The logo made its debut on the 1989 Toyota Celsior

and quickly gained worldwide recognition. The three ovals in the new logo combine to form the

letter "T", which stands for Toyota. The overlapping of the two perpendicular ovals inside the larger

oval represent the mutually beneficial relationship and trust between the customer and the company,

while the larger oval surrounding both of these inner ovals represents the "global expansion of

Toyota's technology and unlimited potential for the future." The new logo started appearing on all

printed material, advertisements, dealer signage, and the vehicles themselves in 1990.In

predominantly Chinese-speaking countries or regions using traditional Chinese characters, e.g.

Hong Kong and Taiwan, Toyota is known as "豊田". In predominantly Chinese-speaking countries

using simplified Chinese characters (e.g. China and Singapore), Toyota is known as

"丰田" (pronounced as "Fēngtián" in Mandarin Chinese and "Hɔ ng Tshan" in Minnanese). These are the

same characters as the founding family's name "Toyoda" in Japanese, which translate to "fertile rice

paddies" in the Chinese language, as well.

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Marketing

Toyota's marketing efforts in North America have focused on emphasizing the positive experiences

of ownership and vehicle quality. The ownership experience has been targeted in slogans such as

"You asked for it! You got it!" (1975–1979), "Oh, what a feeling!" (1979 – September 1985, in the

US), "Who could ask for anything more?" (September 1985 – 1989), "I love what you do for me,

Toyota!" (1989–1997), "Everyday" (1997–2001)", "Get the feeling!" (2001–2004), "Moving

Forward" (2004–2012), and "Let's Go Places" (2012–present).

Japan

In Japan, Toyota currently maintains separate dealership sales channels. The first sales channel

established in 1946 called "Toyota Store" sells large luxury sedans such as the Toyota Century, and

the Toyota Crown. In 1955 the "Toyopet Store" arrived, originally established to sell the Toyota

Corona and the Toyopet ToyoAce truck. (Toyota's five channel dealerships in Japan chronology in

Japanese.) Toyota also operated a

commercial dealership called Toyota

Diesel Shop from 1957 until 1988,

that sold various commercial

platform trucks, buses, and forklifts,

such as the Toyota Dyna and

the Toyota Coaster. Hino products

were sold at specific Hino locations,

and shared at Toyota Diesel Store

locations after Toyota acquired the

company in 1967. Starting in 1980, the Diesel Shop also sold the Starlet, Corolla, Corona, Vista and

Crown installed with diesel engines. When the Toyota Diesel Store was disbanded, commercial

products were divided between Toyota Store and Toyopet Store locations.

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Company Strategy

Toyota's management philosophy has evolved from the company's origins and has been reflected in

the terms "Lean Manufacturing" and Just In Time Production, which it was instrumental in

developing. Toyota's managerial values and business methods are known collectively as the Toyota

Way.In April 2001, Toyota adopted the "Toyota Way 2001", an expression of values and conduct

guidelines that all Toyota employees should embrace. Under the two headings of Respect for

People and Continuous Improvement, Toyota summarizes its values and conduct guidelines with

the following five principles:

Challenge

Kaizen (improvement)

Genchi genbutsu (go and see)

Respect

Teamwork

According to external observers, the Toyota Way has four components:

1. Long-term thinking as a basis for management decisions

2. A process for problem-solving

3. Adding value to the organization by developing its people

4. Recognizing that continuously solving root problems drives organizational learning

The Toyota Way incorporates the Toyota Production System.

Operations

Toyota has long been recognized as an industry leader in manufacturing and production. Three

stories of its origin have been found, one that they studied Piggly-Wiggly's just-in-time distribution

system, one that they followed the writings of W. Edwards Deming, and one that they were given

the principles from a WWII US government training program (Training Within

Industry). Regardless of the origin, the principles described by Toyota in its management

philosophy, The Toyota Way, are: Challenge, Kaizen (improvement), Genchi Genbutsu (go and

see), Respect, and Teamwork.

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Principles of Toyota

Some more Principles:

1. Base your management decisions on a long-term philosophy, even at the expense of short-

term goals

2. Create continuous process flow to bring problems to the surface

3. Use "pull" systems to avoid overproduction

4. Level out the workload

5. Build a culture of stopping to fix problems, to get quality right the first time

6. Standardized tasks are the foundation for continuous improvement and employee

empowerment

7. Use visual control so no problems are hidden

8. Use only reliable, thoroughly tested technology that serves your people and processes

9. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to

others

10. Develop exceptional people and teams who follow your company‟s philosophy

11. Respect your extended network of partners and suppliers by challenging them and helping

them improve

12. Go and see for yourself to thoroughly understand the situation (genchi genbutsu)

13. Make decisions slowly by consensus, thoroughly considering all options; implement

decisions rapidly

14. Become a learning organization through relentless reflection and continuous improvement

(kaizen).

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Worldwide Presence

Toyota has grown to a large multinational corporation from where it started and expanded to

different worldwide markets and countries. It displaced GM and became the world's largest

automobile maker for the year 2008. It held the title of the most profitable automobile maker

(US$11 billion in 2006) along with increasing sales in, among other countries, the United States.

The world headquarters of Toyota are located in its home country in Toyota City, Japan. Its

subsidiary, Toyota Financial Services sells financing and participates in other lines of business.

Toyota brands include Scion and Lexus and the corporation is part of the Toyota Group. Toyota

also owns 51% of Daihatsu, and 16.7% of Fuji Heavy Industries, which manufactures

Subaru vehicles. They also acquired 5.9% of Isuzu Motors Ltd. on November 7, 2006 and will be

introducing Isuzu diesel technology into their products.

Toyota has introduced new technologies including one of the first mass-produced hybrid gasoline-

electric vehicles, of which it says it has sold 2 million globally as of 2010, Advanced Parking

Guidance System (automatic parking), a four-speed electronically controlled automatic with buttons

for power and economy shifting, and an eight-speed automatic transmission. Toyota, and Toyota-

produced Lexus and Scion automobiles, consistently rank near the top in certain quality and

reliability surveys, primarily J.D. Power and Consumer Reportsalthough they led in automobile

recalls for the first time in 2009.

In 2005, Toyota, combined with its half-owned subsidiary Daihatsu Motor Company, produced

8.54 million vehicles, about 500,000 fewer than the number produced by GM that year. Toyota has

a large market share in the United States, but a small market share in Europe. Its also sells vehicles

in Africa and is a market leader in Australia. Due to its Daihatsu subsidiary it has significant market

shares in several fast-growing Southeast Asian countries.

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According to the 2008 Fortune Global 500, Toyota is the fifth largest company in the

world. Since the recession of 2001, it has gained market share in the United States. Toyota's market

share struggles in Europe where its Lexus brand has three tenths of one percent market share,

compared to nearly two percent market share as the US luxury segment leader.

In the first three months of 2007, Toyota together with its half-owned subsidiary Daihatsu reported

number one sales of 2.348 million units. Toyota's brand sales had risen 9.2% largely on demand for

Corolla and Camry sedans. The difference in performance was largely attributed to surging demand

for fuel-efficient vehicles. In November 2006, Toyota Motor Manufacturing Texas added a facility

in San Antonio. Toyota has experienced quality problems and was reprimanded by the government

in Japan for its recall practices. In 2007, Toyota maintained over 16% of the US market share and

was listed second only to GM in terms of volume. Toyota Century Royal is the official state car of

the Japanese imperial family, namely for the current Emperor of Japan.

Toyota was hit by the global financial crisis of 2008 as it was forced in December 2008 to forecast

its first annual loss in 70 years. In January 2009 it announced the closure of all of its Japanese plants

for 11 days to reduce output and stocks of unsold vehicles.

Akio Toyoda became the new president and CEO of the company on June 23, 2009 by replacing

Katsuaki Watanabe who became the new vice chairman by replacing Katsuhiro Nakagawa.

Toyota has factories in most parts of the world, manufacturing or assembling vehicles for local

markets. Toyota has manufacturing or assembly plants in Japan, Australia, India, Sri Lanka,

Canada, Indonesia, Poland, South Africa, Turkey, Colombia, the United Kingdom, the United

States, France, Brazil, Portugal, and more recently, Argentina, Czech Republic, Mexico, Malaysia,

Thailand, Pakistan, Egypt, China, Vietnam, Venezuela, the Philippines, and Russia.

Toyota's net revenue by geographical regions for the year ended March 31, 2007.

Geographic region Total sales ( Yen in millions)

Japan 8,152,884

North America 8,771,495

Europe 3,346,013

Asia 1,969,957

Others 1,707,742

In 2002, Toyota initiated the "Innovative International Multi-purpose vehicle" project (IMV) to

optimize global manufacturing and supply systems for pickup trucks and multipurpose vehicles, and

to satisfy market demand in more than 140 countries worldwide. IMV called for diesel engines to

be made in Thailand, gasoline engines in Indonesia and manual transmissions in India and the

Philippines, for supply to the countries charged with vehicle production. For vehicle assembly,

Toyota would use plants in Thailand, Indonesia, Argentina and South Africa. These four main IMV

production and export bases supply Asia, Europe, Africa, Oceania, Latin America and the Middle

East with three IMV vehicles: The Toyota Hilux (Vigo), the Fortuner, and the Toyota Innova.

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Special Feature: Toyota's Efforts in Emerging Markets

We will conduct business that is strongly rooted in the countries in which we operate by adapting to

local needs and pushing for 100% localization.

Toyota‟s emerging market sales ratio reached 45% in 2011, an increase of 10% in the three years

since we achieved 35% in 2008. The Toyota Global Vision calls for an emerging-market sales ratio

of 50% by 2015, and we are striving to hit this target ahead of schedule by strengthening our global

supply system in emerging markets and increasing localization, with Asia as an important base. In

addition, we will actively release compact vehicles specifically designed for emerging markets.

The Shift to Emerging Markets and Toyota's Strategy Making Cars that Meet National and Local Needs

Expanding Production in Emerging Markets - 3.1 million vehicles by 2013

Toyota's overseas business has evolved through three stages, from making in Japan and exporting,

to producing in regions where demand exists and then to the current stage whereby Toyota has an

efficient global production and supply.

Global production and supply are supported

in the emerging markets, where we have

been increasing investment so as to boost

production capacity. We began production of

the Fortuna in India in 2009, followed by the

diesel Corolla and the Etios in 2010, and

expanded investment in factories

accordingly. In Brazil, production of the

Corolla FFV began in 2007, and sales have

steadily increased since then. We plan to start

production at a new compact vehicle plant in

Brazil in the latter half of 2012. As a result of

such efforts, production capacity in emerging markets is forecast to reach approximately 3.1 million

vehicles in 2013, which is the same level as that in Japan and represents a great increase over the

540,000 vehicles output in 2000.

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Innovative International Multipurpose Vehicle

The IMV

specially

developed in 2004 for introduction in over 140 countries. Currently, the IMV series is manufactured

in 11 locations, with sales of locally manufactured vehicles underway in approximately 170

countries. Toyota applied the genchi

genbutsu (onsite, hands-on experience)

approach to observing and analyzing

the kinds of vehicles used in various

parts of the world, and developed and

introduced IMVs to meet the needs of

each region. Thorough aftersales

service programs for IMVs have gained

the trust of customers around the world.

The scale of the market will continue to

grow, and Toyota plans to increase

capacity in Thailand, where the auto

parts supply industry is concentrated, as

the global supply base. Increases in new

investment to strengthen other supply bases, including Indonesia, and sequential production bases,

are planned.

Strengths of the IMV Project

The aims of the IMV Project are product appeal, low cost and efficiency, followed by exchange-

rate-fluctuation response capability. Toyota aims to enhance product value by developing

specialized models optimized to the tastes and environments of consumers in emerging markets. We

have also sought to reduce costs and gain efficiency by consolidating production, transitioning from

smallscale production at 11 companies to large-scale production at four global supply bases. We are

coping with the ever-strengthening yen by creating a structure that maximizes local procurement.

The IMV Project is currently accelerating the process of globalizing production and supply. Among

the four global supply bases, Thailand serves as the base for Asia, with the other global sites

handling exports throughout the rest of the world, such as to Oceania, Europe, the Middle East, and

Central/South America, developing into centralized bases. Localized procurement is also evolving,

Page | 25

so that parts procurement is not handled within individual countries, but rather

through a globally optimized procurement structure for parts.

Asia makes up half of the sales of the IMV series, but sales in the Middle East, Africa, and

Central/South America are also solid, with sales structures based on locally made core models.

Production capacity recovered comparatively quickly amidst the supply shortages caused by the

Japan Earthquake and Thailand floods in 2011, with the number of vehicles sold increasing greatly.

As a result, sales improved from 460,000 in 2005 in the immediate aftermath of the IMV Project

launch to 770,000 in 2011, and with markets predicted to grow from 2012 on, sales are also

expected to increase.

Future Efforts in Emerging Markets

1) New Strategies for Growing Emerging Markets

A Second Home in Asia

Toyota‟s basic attitude toward our efforts in emerging markets

henceforth can be summed up as "Asia is our second mother

base." What this means in practical terms is that we will

follow on from the IMV Project by strengthening our

production and supply bases for compact vehicles in Asia,

move toward thorough localized procurement, and ensure and

enhance our cost competitiveness.

New Compact Vehicle Strategy

The automobile market in emerging markets

is growing each year in tandem with the

economic growth of each country. Within

those markets, there has been marked growth

in the sales of compact vehicles, so Toyota is

promoting a new compact vehicle strategy

that emphasizes the compact vehicle lineup

and seeks to meet the needs of consumers in

emerging markets.

Page | 26

Efforts we are making include the

launch of eight compact vehicle

models specifically designed for

emerging markets, starting with the

Etios in India in December 2012.

There are plans to produce compact

vehicles in emerging markets and

deliver a total of more than 1 million

vehicles a year to customers in over

100 countries. Delivery of the compact

Etios sedan and Etios Liva hatchback

models to South Africa via Toyota

Kirloskar Motors (TKM) of India

began in April 2012.

Future Efforts in Emerging Markets

2) Future Efforts in Each

Market

Russia

Russia is among the markets with the

greatest potential, not only in Europe,

but in the world. Toyota has gained

experience and acclaim from Russian

customers for our core models, such

as the Camry and Land Cruiser

Prado, and we are making steady

progress in localization. We plan to

contribute to the growth of the

Russian auto industry by increasing production of the Camry by Toyota Motors Manufacturing

Russia (TMMR), and also by starting local assembly of the Land Cruiser Prado in the Russian far

east city of Vladivostok at the end of this year.

Africa

Africa, where economies and

populations are steadily growing, is

seen as a market that will continue to

grow. From our base in the Republic

of South Africa, Toyota is looking

into building a vehicle supply system

that can meet the special

characteristics of each African nation.

We aim to open and penetrate new

markets through sales measures

closely aligned to each region. Also,

in April 2012, we started contract

assembly production of the Fortuna

IMV model in Egypt.

Page | 27

India

India‟s auto market is expected

to keep pace with India's

growing economy. Toyota will

continue to develop products

that meet the needs of the

region's growing consumer

base, as we did with the Etios.

In addition, TKM established

the Toyota Technical Training

Institute in 2007 with the goal

of providing specialized technical training for manufacturing, and we intend to continue to engage

in human resources development and job creation so as to contribute to the development of the

Indian economy.

Asia

Toyota's definition of "Asia" (for business

purposes) does not include China, India,

Pakistan, Bangladesh and Japan. In 2012, this

market is expected to recover from the impact

of the Thailand floods, with demand rising

above that of 2011. This market is expected

to grow in tandem with the expansion of the

regional economy in the medium- to long

term, and we are aiming to increase sales

from the current 1.6 million-1.7 million annually to 2 million in the future. Hitting that target will

require an expansion in production facilities in Thailand, Indonesia and elsewhere.

Brazil

We have established a new plant in Sorocaba, in the state of São Paulo, Brazil, and beginning in the

second half of 2012, we will produce and

sell the Etios, a new compact model. In the

future we will offer products that meet the

needs of a broad array of consumers. Our

goal is to steadily expand and cultivate the

Brazilian market through corporate

activities deeply rooted in the region, such

as localized production.

Page | 28

Vehicle Production, Sales and Exports By Region

Production by region Region 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

North America 1,278.4 1,444.0 1,535.1 1,519.3 1,636.9 1,404.8 1,189.1 1,404.0 1,206.1 1,720.6

Latin America 58.1 80.4 138.5 177.9 183.1 194.8 181.5 204.3 195.1 242.8

Europe 466.1 582.5 638.1 808.8 806.5 688.3 507.3 461.7 460.3 461.4

Africa 93.3 108.8 121.1 143.8 145.7 179.2 102.8 123.4 150.8 151.7

Asia 548.4 717.0 1,029.2 1,137.7 1,387.3 1,590.0 1,501.4 2,027.4 2,062.8 2,565.7

Oceania 113.6 109.9 109.2 111.6 148.9 141.4 96.8 119.4 93.7 101.4

Overseas total 2,558.0 3,042.7 3,571.2 3,899.0 4,308.6 4,198.4 3,579.0 4,340.4 4,168.8 5,243.6

Japan 3,520.3 3,680.9 3,789.6 4,194.2 4,226.1 4,012.1 2,792.2 3,282.8 2,760.0 3,492.9

Worldwide total 6,078.3 6,723.7 7,360.9 8,093.2 8,534.7 8,210.5 6,371.3 7,623.3 6,928.8 8,736.5

(1 unit = 1,000 vehicles)

Note: Regional classifications are those of the Japan Automobile Manufacturers Association, Inc.

The number of vehicles produced includes the Toyota and Lexus brands. As a result of rounding,

the numbers do not necessarily add up to the total shown here.

Sales by region Region 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

North America 2,031.3 2,230.3 2,436.1 2,738.3 2,822.2 2,441.8 1,975.4 1,935.5 1,806.9 2,274.6

Latin America 162.1 214.9 270.5 339.4 379.4 370.2 293.6 342.1 333.5 406.6

Europe 851.5 946.9 995.2 1,124.1 1,238.6 1,119.5 886.0 785.8 801.9 817.7

Africa 160.6 206.7 227.2 265.7 313.5 288.1 201.4 197.6 211.9 243.0

Asia 682.4 846.3 1,062.9 1,106.7 1,329.6 1,438.6 1,533.9 1,895.9 1,998.2 2,340.5

Oceania 215.1 232.8 236.9 250.3 275.9 277.7 231.2 249.6 215.9 258.8

Middle East 251.4 270.9 325.3 404.8 482.7 590.1 482.5 554.6 527.5 683.9

Overseas total 4,354.5 4,948.8 5,554.1 6,229.3 6,841.9 6,526.1 5,604.0 5,961.1 5,895.9 7,025.1

Japan 1,715.9 1,758.8 1,713.1 1,692.3 1,587.3 1,470.0 1,375.5 1,566.1 1,201.0 1,692.2

Worldwide total 6,070.4 6,707.6 7,267.3 7,921.6 8,429.3 7,996.1 6,979.6 7,527.3 7,096.9 8,717.3

(1 unit = 1,000 vehicles)

Note: Regional classifications are those of the Japan Automobile Manufacturers Association, Inc.

The number of vehicles produced includes the Toyota and Lexus brands. As a result of rounding,

the numbers do not necessarily add up to the total shown here.

Exports from Japan by region Region 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

North America 782.8 813.5 939.6 1,344.7 1,244.1 1,124.2 574.0 628.2 494.7 704.6

Latin America 71.5 95.6 120.2 148.9 178.9 146.4 61.3 106.9 95.6 116.4

Europe 424.6 419.0 360.7 375.1 441.5 420.3 230.4 293.7 343.0 311.9

Africa 58.2 92.0 107.2 130.0 147.0 148.7 67.5 72.4 54.7 64.9

Asia 154.7 156.2 129.8 112.3 151.2 169.1 127.1 184.0 183.0 205.4

Oceania 154.1 164.6 159.2 171.6 175.2 184.2 144.4 165.8 146.3 174.3

Middle East 182.6 202.1 226.5 246.7 328.3 393.4 240.0 288.6 247.7 363.6

Total 1,836.0 1,951.7 2,043.2 2,529.3 2,666.1 2,586.3 1,444.7 1,745.0 1,568.9 1,945.7

(1 unit = 1,000 vehicles)

Note: Regional classifications are those of the Japan Automobile Manufacturers Association, Inc.

The number of vehicles produced includes the Toyota and Lexus brands. Excludes KD sets. The

total includes other regions. As a result of rounding, the numbers do not necessarily add up to the

total shown here.

Page | 29

Toyota And Ford Collaborate To Build Hybrid Cars

The two car marques will work as equal partners to co-develop a hybrid system for the larger, rear-

wheel drive vehicles, to increase their fuel efficiency.

Toyota is the global lead in hybrid

sales, including the best-selling Prius hybrid

car, and was named the world‟s “greenest

brand” by Interbrand earlier this year. Ford is

one of the leading sellers of pickup trucks,

predominantly sold in the US and Canada.

The range of hybrid trucks will be available by

2020. Details about the cost and scope of the

collaboration have yet to be confirmed.

Toyota‟s vice president for research and

development, Takeshi Uchiyamada, says that the creation of the hybrids will help both companies

meet the strict US fuel economy standards that are set to be enforced in the coming years and

reduce the time it would have taken to design the

system alone.

Ford‟s head of product development, Derrick

Kuzak, says: “This agreement brings together

the capability of two global leaders in hybrid

vehicles and hybrid technology to develop a

better solution more quickly and affordably.”

The firms have also agreed to work on a

standard set of practices for in-car phone,

navigation and entertainment systems.

Ford recently announced its move further towards on board digital services, byscrapping CD

players in its latest Focus range in a bid to shift to an “all digital in car entertainment offering”

Page | 30

History of Technological Development From 1990

Toyota is striving to develop automobiles that meet the needs of our customers while at the same

time achieving an optimal balance between consideration for the environment, safety, drivability,

comfort and reliability.

Year Engine Driving/Braking Suspension Body Electoronics Materials

1990 |

1999

Aluminium crankshaft damper pulley

Active Four-Wheel Steering System

Cylinder head with

laser cladding

Super-Strut Suspension

Rotary Tri-blade Coupling

5-speed automatic transimission

5 Valve Engine

Bumper made

with Toyota Super Olefin Polymer

(TSOP)

Magnesium cylinder

head cover Air conditioner with

new refrigerant

Fabric with

deodorizing function

Front-passenger

seat airbag

Comprehensive vehicle control

system(i-Four)

Next-generation lean-burn engine

GPS car navigation Head Up Display

Back guide monitor with CCD

camera

Smokeless diesel

engine

Elecrtonically controlled throttle

6-speed manual transmission

Three-way catalyst

for a lean-burn engine

GPS voice navigation

Combustion pressure sensor

Diesel oxidation

catalyst

Plastic fuel tank

Three-way palladium

catalyst

Diesel Smoke Control System (DSCS)

Vehicle Stability Control

system(VSC)

Variable Valve Timing-

intelligent (VVT-i)

4-valve direct-injection

diesel engine

Flex Lock-up System

TSOP-5 for interior

parts

Multi-zone automatic air

conditioning

UV-reducing

door glass

Water-repellent

door glass

Titanium nitride coating Brake Assist GOA Collision-

safety body

Fuel Cell Electric Vehicle (FCEV)

SRS side airbag Seatbelts with

force-limiter

Direct-injection

engine(D-4)

Tire pressure warning

system

Toyota Hybrid System

(THS)

SRS curtain shield airbag

Page | 31

Blind corner monitor

Radar cruise control system

Navigation shift control Bumper

recycling

technology

Variable Valve Timing

Lift-intelligent (VVTL-i)

ARS

Diesel oxidation

catalyst

Common-rail direct-injection diesel turbo

engine(D-4D)

ABS for EBD Electric power steering system

Super CVT

2000

|

2009

Dual-stage SRS

airbags for the

front-passenger

seat

Smart Key System Diesel Particulate

NOx Reduction System

(DPNR)

Package tray and

door trim made out of

the kenaf plant

Negative ion generator

AC100V power outlet

Run flat-tires Back guide monitor with

voice recognition

Electronically Controlled Brake

system(ECB)

Electric 4-wheel drive system

(E-Four)

Dual-stage SRS

airbags for the

driver's seat

Retractable

Metal Top System

Pedestrian-injury-lessening

body

Bio-plastics

Air conditioner with

electric heat pump

system using

CO2 refrigerant

New Tire-production method G-BOOK

Power back

door system

SRS knee

airbags for driver

Toyota Stop & Go

System

Fuel Cell Hybrid Vehicle

(FCHV-4, FCHV-5)

Toyota Hybrid System (THS-C, THS-M, THSII)

Pre-crash Safety System

Fuel Cell Hybrid Vehicle

(Toyota FCHV)

Pre-crash

seatbelt

Toyota Intelligent

Idling Stop System

Dual VVT-i

Stoichiometric D-4

Piezoelectric Common-

rail Type Direct-injection

Diesel Turbo Engine (D-

4D Clean Power)

Diesel Hybrid System

Intelligent AFS

Front and side monitoring

Lane-monitoring system

Pollen-removal filter

Night View system Toyota Eco-plastic

Steering-guided clearance

sonar

Smart Entry and Start

System

Plasmacluster Ions

Intelligent Parking Assist system

VDIM

6 Super ECT (6-speed automatic

transmission)

Page | 32

VDIM with active steering control

SRS twin-

chamber airbag

Lane-keeping assist system

Radar cruise contral with

low-speed tracking mode

S-VSC + Active Control 4WD

Integrated Control

Active stabilizer suspension

system

Pre-crash Safety System with

millimeter-wave radar and stereo

camera fusion system

(Pedestrian detection, steering and

obstacle-avoidance assist system)

D-4S

G-BOOK ALPHA

HELPNET

THS II with monitor

speed reduction device

THS II with two-stage

motor speed reduction

device

Wide-view front monitor

Variable Valve Timing-

intelligent Electric (VVT-

iE)

SRS seat

cushion airbag

8 Super ECT(8-speed automatic

transimission)

Pre-crash Safety System with driver-monitoring system

(Millimeter-wave radar type)

"Map on Demand" technology to automatically

deliver differential map data to

car navigation systems

Rear-end Pre-crash Safety

System (Warning of approaching

rear vehicle, Pre-crash Intelligent

Headrests)

Radar cruise contral with

tracking function

Intelligent Parking Assist

(IPA) system with ultrasonic

sensors

Oxygen-level conditioner

Eco Drive Indicator

THSII with two-stage

motor speed reduction

device + full-time all-wheel-drive system

G-BOOK mX

LED headlight

Valvematic, a next-

generation variable valve

lift mechanism

Active Headrest

Heated seat

"Crawl control" system

Kinetic dynamic suspension

system (KDSS)

8-Speed Sport Direct Shift transmission

Improved Pre-crash Safery

System with eye-monitoring

system

Anti-mite allergen

seat fabric

Emergency brake signal

Navigation-linked Brake Assist

Night View system with

pedestrian detection function

6-speed manual transmission for

front-wheel drive

Toyota Stop & Start

System

Fuel Cell Hybrid Vehicle

(TOYOTA FCHV-adv)

SRS rear

window curtain

shield airbag

Page | 33

Interior vehicle parts using Ecological Plastic

Front-side Pre-crash Safety

System

Pre-crash Seatback

SRS rear-seat

center airbag

Eco-Drive monitor

Touch Tracer Display

Solar-ventilation system

Remote Air Conditioning

system

Harmonious Driving

Navigator

Multi-terrain Select switch

DSRC Unit

Multi-terrain Monitor

Self-restoring coat

ESPO system

THSII Plug-in (with

motor speed reduction

device)

2010

|

2012

Vehicle Proximity Notification

System

Bio-PET-Based New Ecological Plastic

"Smart G-BOOK" for

smartphone

New UV-

blocking glass

Horizontally Opposed D-4S

LDH (Lexus Dynamic Handling system)

Wrong-way Driving Alert System

High-power Lithium-ion Battery

G-Station

DSSS

(Driving Safety Support

System)

2.5 liter 4 cylinder inline Atkinson cycle

engine

Front wheel drive eight-speed automatic transmission

Pre-collision System effective at

high speeds

Laser screw

welding

Adaptive High-beam System

(AHS)

Intelligent Clearance Sonar

Drive-start Control

Majority-Owned Subsidiaries

Toyota Industries Corporation (founded in 1926)

JTEKT Corporation (1935)

Toyota Motor Corporation (1937)

Toyota Auto Body, Co. Ltd. (1940)

Kanto Auto Works, Ltd. (1945)

Toyota Tsusho Corporation (1946)

Toyoda Gosei Co., Ltd. (1949)

Denso Corporation (1949)

Towa Real Estate Co., Ltd. (1953)

Toyota Central R&D Labs., Inc. (1960)

Toyota Communication Systems Co., Ltd. (2001)

Toyota Financial Services Corporation (2000)

Daihatsu Motor Co (1907; Toyota owns 51% of the company since 1999.)

Hino Motors (diesel trucks and buses. Toyota owns 50.5% of the company since 2001.)

Toyofuji Shipping Co. (Shipping company for Toyota vehicles overseas)

Page | 34

SWOT Analysis Of Toyota

A. STRENGTHS:

i. New Investments: a). New investment by Toyota in factories in the US and China saw profits rise, against the

worldwide motor industry trend which was suffering heavy losses. Net profits

rose 0.8% to 1.17 trillion yen ($11bn; £5.85bn), while sales were 7.3% higher at 18.55 trillion yen.

b). ANALYSIS :-

The company had the right mix of products for the markets that it served.

USA believes in „living life king size‟ and is obsessed with bigger cars.

Toyota primarily sold bigger cars like Fortuner and Qualis in the American market and this was

a great success.

China on the other hand prefers fuel-efficient sedans. Toyota in China marketed and sold cars

like Prius, Corolla and Camry.

This was possible because of much focused segmentation, targeting and positioning of their

products.

Page | 35

ii. Manufacturing: a). In 2003 Toyota knocked its rivals Ford into third spot, to become the World's second largest

carmaker with 6.78 million units. The company is still behind rivals General Motors with 8.59

million units in the same period.

b). ANALYSIS :-

Its strong industry position is based upon a number of factors including a diversified product

range, highly targeted marketing and a commitment to lean manufacturing and quality.

The company maximizes profits through Total Quality Management or TQM which is an

integrative set of principles and behavior adopted by Toyota‟s management for continuously

improving the quality of products and processes.

The company makes a large range of vehicles for both private customers and commercial

organizations, from the small Yaris to large trucks. Therefore, if the demand in one sector

decreases, the company always has other sectors as back up and the chances of a complete loss are

low.

iii. Strong Brand Image :

a. Toyota currently sells 70 models of cars under its namesake brand with Corolla and Prius as

flagship models. Toyota‟s brand image is also associated with environment friendly cars as it is a

leader in manufacturing of „green‟ cars.

b). ANALYSIS :-

Toyota increases brand awareness, sells more cars in order to increase the existing brand image.

Toyota through a series of surveys and studies of customer behaviour understood that customers

are growing selective in terms of fuel efficiency and CO2 emissions.

The management quickly decided to invest in „green‟ technology and Toyota became one of the

first companies to manufacture environment friendly, hybrid and efficient cars like the Auris.

This greatly boosted their Brand image giving them competitive advantage over their

competitors.

B. WEAKNESSES

i. Large scale Recalls : a) Toyota had quite a few large-scale vehicle recalls over the past few years. The company recalled

9 million vehicles in 2009-2010 and 7.43 million cars in 2012. Such recalls does not only hurt the

firm financially but significantly damages firm‟s brand.

b) ANALYSIS:-

Recalls have taken place mostly because of safety issues that have not been met or because of

certain defects in the cars produced.

Toyota must ensure that the cars produced are faultless and of good quality.

An increase in recalls not only results in losses but also harms the brand image of the company.

ii. Weak presence in emerging markets : a) Toyota markets most of its products in the US, Europe and in Japan. Therefore it is exposed to

fluctuating economic and political conditions those markets. Emerging economies as China or India

make only a small percentage of all Toyota‟s sales.

Page | 36

b) ANALYSIS:-

The company in order to reduce this weakness has started to shift its attention towards India and

China, which is a good move. But, it must do more to increase its market share in these emerging

economies in order to compete with General Motors which has a bigger market share especially

in China.

Toyota must also look towards Africa. Many African nations like Tanzania, South Africa are

experiencing high growth rates. Not many car manufacturing companies have ventured into the

continent. Toyota should increase sales of cheaper, smaller cars in Africa. This will give them an

advantage over GM in the global scenario.

C. OPPORTUNITIES

i. Hybrid and Eco friendly Technology : a) Lexus and Toyota now have a reputation for manufacturing environmentally friendly vehicles.

Lexus has RX 400h hybrid, and Toyota has it Prius. Both are based upon advance technologies

developed by the organization. Toyota has also sold on its technology to other motor manufacturers,

for example

Ford has bought into the technology for its new Explorer SUV Hybrid.

b) ANALYSIS:-

Increasing fuel prices have boosted the demand for more efficient cars. Customers today are

more aware of the harm air pollution by vehicles causes to the environment. Therefore, there is a

big demand for environment friendly cars.

Since Toyota already has a first mover advantage in making hybrid eco friendly cars, it should

capitalize on this opportunity and invest more on hybrid R&D and produce more environment

friendly cars.

This will result in huge profits and increase Toyota‟s market share.

ii. New Customer Segments : a) Toyota is to target the 'urban youth' market. The company has launched its new Aygo, which is

targeted at the streetwise youth market. The vehicle is a unique convertible with inbuilt sub

woofers.

b) ANALYSIS :-

The youth of today have become more independent and wealthy. This has created a big market

for cars. Therefore Toyota is trying to capitalize on this opportunity by introducing the new Aygo

for the youth. It attempts to capture the DJ culture and the nature of dance to market this car.

Even though the profits earned through the new Aygo are not big, it has helped Toyota increase

its market segment, which is crucial for expansion. Moreover, this segment may prove to be highly

profitable in the future.

iii. Global Expansion : a) Toyota is expanding its market share and operations in emerging economies like India and China.

Toyota‟s emerging market sales ratio reached 45% in 2011, an increase of 10% in the three years

since we achieved 35% in 2008. The Toyota Global Vision calls for an emerging-market sales ratio

of 50% by 2015.

Page | 37

b) ANALYSIS :-

Emerging economies have a huge demand for cars. Toyota must make sure it increases its

market share in the developing economies in order to survive and compete in the global scenario.

By increasing localization and strengthening the supply chain system, Toyota is slowly

expanding into emerging markets.

D. THREATS:

i. Competition : a) Toyota faces tremendous competitive rivalry in the car market. Competition is increasing almost

daily, with new entrants coming into the market from China, South Korea and new plants in Eastern

Europe. Volkswagen group is strongly growing and GM steps up after its reorganization to become

more competitive than ever.

b) ANALYSIS :-

There is nothing much that can be done to curb the rising competition. But, competition can be

fought by introducing new products, slashing prices, increasing market segments and innovation.

Toyota has introduced the Yaris which is a very cheap car and has also sliced the costs of older

versions of Corolla. The Aygo and Prius are examples of innovative products by Toyota.

ii. Shifts in exchange rates : a) Most of Toyota‟s revenue and raw material come from foreign countries. The profits earned

abroad must be sent back to Japan and converted to yen. Appreciating yen exchange rate against

other currencies means lower profits for Toyota.

b) ANALYSIS :-

This is a threat, which is very difficult to minimize. Toyota will have to wait till the Yen

depreciates but, this will result in delayed payments and increased debts which is bad for the

company.

Another solution could be setting up new bases in other countries so that they can enjoy their

profits through the exchange rate of that country.

Page | 38

Conclusion

Toyota Industries has promoted diversification through continuous innovation all through its life

and expanded the scope of its business domains to include textile machinery, automobiles (vehicles,

engines, car air-conditioning compressors, etc.), and materials handling equipment, electronics, and

logistics solutions. All these Expansion Strategies adopted by Toyota has resulted in making Toyota

one of the largest Conglomerates.

Toyota Motors in itself has 522 Subsidiaries some of which are individually present in Forbes

Fortune 500 list.

Today Toyota is the largest carmaker in the world leading General motors and the top selling

automaker. The Japanese company has sold 9.7million cars and trucks in 2012 leaving GM in

second place with 9.29million cars.

The backbone of their success being their sharp, well thought out and excellently implemented

strategies. It yielded excellent result over the years it brought them to the No. 1 position and if

maintained, there is no doubt about the fact that they‟ll maintain their position for years to come.

Page | 39

References

http://www.toyotafinancial.com, http://www.toyota.com http://www.toyota-industries.com/corporateinfo/corpdata/

http://www.toyoland.com/history.html http://www.toyota-global.com/investors/ir

http://www.marketingweek.co.uk/toyota-and-ford-collaborate-to-build-hybrid-cars/3029482.article

http://www.toyota-global.com/investors/ir_library/annual/pdf/2012/feature/