Toyota Motor Corporation (Japan)

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Toyota finally toppled General Motors to become the world's biggest carmaker for the first time in 2008. Its namesake brand was already the global top-seller, a position it has held ever since. However, a series of problems, not least the tragic 2011 Japanese earthquake, caused group sales to slump alarmingly at the turn of the decade. Toyota regained the #1 position once again in 2012, before being overtaken in turn by Volkswagen in 2016. The company retains a firm grip on its home country with controlling stakes in fellow carmaker Daihatsu and leading truck manufacturer Hino, and combined market share which hit 45% in the year to 2017. Above all, though, Toyota is keen to establish itself as a global motor manufacturer not a Japanese exporter. It has taken care to adapt its products to local tastes with region-specific cars like the Camry in the US and Avensis and Corolla in Europe, and has worked hard to shift the majority of its non-domestic production outside Japan. Never one to rest on its laurels, Toyota has consistently pushed into new areas, the most notable of which was its pioneering success with the Prius fuel-electric hybrid. Yet not even the best-run of the world's auto manufacturers was able to withstand the impact of the sudden decline in the global car industry from 2008 onwards. This led to a substantial loss for the financial year, the first in Toyota's history. Potentially more damaging, though, were serious lapses in quality control which prompted a massive vehicle recall in 2010, and a criminal investigation by a US federal grand jury. Ultimately no technical faults were proven, but Toyota's reputation was sullied by the whole affair and it received a $1.2bn fine for failing to cooperate with investigators.

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Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 11th May 2017: Despite strong financial performance in the first quarter (revenues and profits both jumped), Volkswagen Group's hold on the global #1 spot in automobiles is far from secure. Though it led the industry during 2016, latest figures from market-watcher Focus2Move show that the German group has slipped back into second place during the first quarter as a result of weak volume growth. Total registrations rose by only 0.8% to 2.52m cars, while Toyota regained the lead with almost 5% uplift to 2.59m. Close behind both groups, though, was Renault-Nissan, which reported a spectacular 11.5% rise in registrations to 2.3m units. If sales were added from Mitsubishi Motors, now effectively under Renault-Nissan's control, the Franco-Japanese group would be slightly higher than Volkswagen.

Adbrands Weekly Update 26th Jan 2017: Ads of the Week "Reflections". The & Partnership and CHI launched their first big push for Toyota in Europe this week, following the capture of that account from Saatchi. There's a cool 70s kinda vibe going on here, and a nice foretaste of summer too, launching the new C-HR crossover. Very stylish. But what we really want to know is where we can get sunglasses with sliding lenses. 

Adbrands Weekly Update 26th Jan 2017: Volkswagen Group may have seized the #1 spot among global car companies for 2016, but Toyota remains the top-selling brand by a considerable margin, despite only a modest increase in volumes of less than 1%, according to figures from researcher Focus2Move. Even so, with sales of 8.48m vehicles it remains almost 2m units ahead of second-placed VW (6.54m). Ford remained in 3rd place (6.23m), but a slight fall by Hyundai - its first in a decade - allowed Nissan to edge into 4th place at 4.95m. Elsewhere in the Top 20, there were big jumps for Buick (up 16%) and Jeep (up 15%) in 16th and 17th place respectively, and also for Renault (up 14%) and Mercedes (up 11%) at #9 and #10. Further down the rankings, there was spectacular growth for homegrown Chinese brands. All hovering around the #30 mark, Geely, Baojun and BAIC delivered soaring growth of between 30% and 48% each. Several other established brands suffered worrying declines, including Mitsubishi (down 9%), Citroen (down 8%), Fiat (down 4%) and GMC and Dodge (both down 2%).

Adbrands Weekly Update 12th Jan 2017: Early estimates appear to show that Volkswagen Group has shrugged off the effects of the "Dieselgate" emissions scandal to seize the top spot among global manufacturers. According to preliminary figures from researcher Focus2Move, the German giant's total light vehicle volumes rose 1.4% to a record 10.1m vehicles, putting its slightly ahead of Toyota, flat at 9.95m. Combined sales of 8.51m vehicles put Renault-Nissan in 3rd place, with Hyundai-Kia 4th at 8.18m. US groups GM and Ford came 5th and 6th respectively, with Honda, Fiat Chrysler, PSA and Suzuki rounding out the Top Ten.

Adbrands Weekly Update 5th Jan 2017: Sales volumes for 2016 showed the US auto industry reaching a new record of 17.55m vehicles sold (up from 17.47m in 2015). That marks a strong recovery from the lows of the 2008 crisis, when sales dropped below 11m. However the banner figures mask troubles lying just below the surface. As Ford's announcement reflected, sales of small and midsize cars have slowed dramatically, despite surging demand for SUVs and pick-ups, leaving all manufacturers with sizeable quantities of unsold inventory. This is expected to impact significantly on profits in the year ahead. Another worry is that the growth was experienced mainly by smaller companies, rather that the big manufacturers, most of whom suffered small declines on the year. GM reported annual sales of 3.04m cars, down just over 1%, while Ford fell marginally to 2.60m. Fiat Chrysler was down by 0.4% at 2.24m, and despite a strong final month Toyota too was down 2% over the year as a whole to 2.45m. The single biggest decline was suffered by BMW, down by just under 10%, compared to a fall of just 3% for Volkswagen Group. The VW brand alone fell by almost 8%, offset by a 4% increase for Audi. The single biggest gain by any manufacturer was notched up by Tesla, with sales soaring by 69%, though total volumes were still tiny at under 40,000 vehicles. There was double-digit growth for Jaguar Land Rover and Volvo, and a mid-single-digit uplift for Nissan, Honda, Subaru and Kia.

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Background

Free for all users | see full profile for current activities: The world's #1 car manufacturer. Not bad for what is still in some ways a family firm. Founded by patriarch Sakichi Toyoda in 1918, it is still run by a family member (although non-family executives held the CEO role from 1995 to 2009). The original Toyota business was very different from the motor manufacturing powerhouse of today. Sakichi Toyoda's company was the Toyoda Spinning & Weaving Company. But the development of automatic looms in the 1930s, and the engines to run them, suggested to Sakichi's son Kiichiro that he might be better off moving into a more productive industry. He renamed the company Toyota - easier to write in Japanese characters than Toyoda - and steered it in a new direction making automotives. The company turned out its first prototype vehicle, the Model AA, in 1936, and Toyota Motor Company was set up the following year. Nevertheless, looms remained a key part of the business for the next 15 years. It was only post-war turmoil that shifted the company's focus more firmly towards the motor industry. 

Development in the 1950s was rapid. The company established overseas offices in Taiwan and Saudi Arabia early in the decade, and moved into industrial vehicles with the launch of a forklift truck in 1956. But the real step forward came in 1957 with the development of the Toyopet Crown automobile, the first model designed for export to the world's largest car market, America. Toyota Motor Sales USA was formed in 1958, and operations were quickly established in Brazil, Australia and South Africa in the years that followed. A UK office was founded in 1965. In fact the Crown was a failure in the US, designed for the compact Japanese environment rather than the wide-open spaces of the US. But Toyota refused to give up, and the Corolla, launched in 1968, was an enormous success, allowing Toyota to displace VW as America's #1 auto importer by 1975. From 1967 to 1982 the company was led by Eiji Toyoda, nephew of founder Sakichi Toyoda, and it was he who spearheaded its expansion into international markets.

Toyota spread around the world over the following years. In 1984, a joint venture was formed with General Motors, New United Motor Manufacturing, to build Toyotas in the US. A similar, but short-lived, operation was formed in Australia four years later. To broaden their range, the company launched its Lexus line of luxury cars in 1987 and in 1992 Toyota established the Duo sales operation to market Volkswagen and Audi cars in Japan. Toyota established another joint venture with General Motors in 1999 to develop environmentally friendly fuel cells to replace petrol, and launched Toyota Mapmaster to develop computerised car navigation systems. 

The group pushed into electric cars with the full launch of the Prius, a hybrid "gas-electric" car competitive with conventional automobiles but twice as fuel efficient. Launched in Japan in 1997, it was rolled out globally from 2000. The Vitz, which launched in Europe in 1999 as the Yaris, was the company's bid in the ultra-compact car market. Also in 1999, the group launched an ambitious consumer project in Japan, forming an alliance with other manufacturers including Panasonic to launch separate products under a shared brand, WiLL. Toyota was the driving force behind the project launching the stylish WiLL Vi sub-compact car in 2000. Two further models followed, the five-door, five-seat WiLL VS in 2001, followed by the WiLL Cypha in 2002, a car with email and internet access facilities built-in. The project was eventually discontinued in 2004.

Meanwhile the company also began aggressively diversifying its business in Japan. In 2000, Toyota acquired a 5% stake in Yamaha Motor, a subsidiary of piano manufacturer Yamaha Corporation, for Y10.5bn ($96m); and increased its stake in ailing Hino to almost 34%. Japanese truck sales plummeted 28% in 1998, and Hino notched up losses of Y35bn ($326m). In April that year Toyota agreed to invest Y120bn ($1.13bn) in KDDI, a new Japanese telecoms group created by the merger of its IDO subsidiary with DDI and KDD. At the same time Toyota announced it would join with railway and cable TV operator Tokyu Corp and Sony to provide an internet service for broadband networks. 

Meanwhile Hino continued to struggle. Toyota boosted its shareholding to over 50% in 2001 and installed one of its own executives as the company's President. Meanwhile the group formed a joint venture with PSA Peugeot Citroen, based in the Czech Republic, to manufacture small cars for launch in 2005. In 2002 the group agreed a joint venture with China's leading motor manufacturer First Automobile Works (FAW) to produce up to 400,000 cars annually by 2010.

Toyota announced an overhaul of its senior management team in early 2005. Fujio Cho, regarded as the architect of the group's aggressive expansion since 2000, announced his retirement from day-to-day management mid-2005. In a highly uncharacteristic situation for Toyota, the company was accused in 2006 of covering up vehicle defects and was ordered by Japan's Transport Ministry to improve recall procedures. The company had already recalled more than 1m vehicles in Japan, and also issued a recall of 400,000 SUVs in the US. See full profile for current activities


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