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. However, a series of problems, not least the tragic 2011 Japanese earthquake, caused sales to slump alarmingly at the turn of the decade. Toyota regained the #1 position once again in 2012. The company has a firm grip on its home country with controlling stakes in fellow carmaker Daihatsu and leading truck manufacturer Hino, and combined market share in excess of 40%. 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 has been 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.

Selected Toyota advertising

Advertising

Who handles Toyota's advertising? Click here for agency account assignments for Toyota from adbrands.net. Ad Age estimated global measured advertising expenditure of $3.31bn in 2012. The company declared advertising costs for the year ending March 2013 of Y330,870m ($3.99bn). In the US, Kantar (in Advertising Age) reported measured expenditure of $1.25bn in 2012, out of an estimated total of $2.0bn. Biggest spending brands were Toyota (measured spend $879m) and Lexus ($296m). In France, Kantar (in Strategies) estimated advertising expenditure of E141m in 2013. 

Brand Value

Interbrand's Best Global Brands survey ranked Toyota as the world's #10 brand in 2013, with an estimated brand value of $35.3bn. Millward Brown's Brandz survey ranked Toyota as the #28, with an estimated value of $21.8bn. Both surveys use different measurement criteria.

Competitors

See Cars Sector index for other companies and brands

Contact

Toyota Motor Corp
1 Toyota-Cho
Toyota City
Aichi Prefecture 471-8571
Japan
Tel: +81 565 28 2121

Brands & Activities

"The car in front is a Toyota", claims the marketing. That's been true in spirit for some time, and now the numbers generally prove it. The group seems to have an unfailing sense of what car buyers will want next, from urban runarounds to environmentally friendly hybrids, and it brings those models to market with the utmost efficiency. Never the most stylish or innovative of manufacturers it is nonetheless the most admired by its peers for the general dependability of its cars, its strong and efficient management and steady, relentless growth. Only Toyota's comparative weakness in the fast-expanding Chinese market counts against it. It also has a low profile in Latin America. Rapid growth also arguably led to lapses in quality control and this culminated in the 2010 crisis when problems associated with its accelerator pedals forced the company to make an unprecedented vehicle recall and promoted a federal inquiry in the US. Another setback were the natural disasters of 2011 and 2012 which afflicted all Japanese manufacturers.

Toyota Corporation remains one of the world's most successful auto manufacturers. During the collapse of the global car market in 2008, Toyota was less badly affected by its main rival General Motors, allowing it to seize the crown as global #1 for the first time with sales for calendar 2008 of 8.97m, down 4% on the previous year, but still high enough to beat GM, whose sales fell by 11% to 8.4m. Despite the effect of a massive vehicle recall, it retained that crown in 2010, but the impact on local manufacturing caused by Great East Japan earthquake in March 2011 pushed the group back into the #3 position for that calendar year. Since then, though it has recorded steady growth. Toyota reclaimed its position as the global #1 for calendar 2012, and retained that title in 2013 with an increase to 9.98m units, just short of its 10m target.

The group's biggest brand by far is the main Toyota passenger car and light commercial range. It is the world's best-selling car brand, with registrations of around 8.14m vehicles worldwide in 2013. Its Corolla passenger model is the world's top-selling car, with almost 1.2m new units sold in 2013. The Camry also features among the Top Ten worldwide. The main brand is supported by Lexus luxury cars and the offbeat, youth-oriented Scion brand, sold mainly in North America. 

Toyota also controls or part-owns a group of other Japanese auto manufacturers. Daihatsu manufactures a complementary range of compact passenger cars and mini-vehicles, mostly for the Japanese market, while Hino (in which Toyota has a 50% shareholding) is one of the country's leading makers of heavy trucks and buses. In 2005, Toyota acquired a shareholding of just under 9% in Fuji Heavy Industries, maker of Subaru cars, after GM sold its own 20% stake, and it increased this holding to 16.5% in 2008 as part of a deal to jointly produce a new compact sports car. Toyota also has a capital partnership with Isuzu in order to have access to the smaller company's technology for low-pollution diesel engines. 

The group operates around 50 manufacturing businesses in 27 countries around the globe. Most manufacturing operations are wholly owned, although the company has a joint venture in the Czech Republic with Peugeot Citroen, as well as two partnerships in China with local manufacturers. In 2009, Toyota agreed an alliance with UK-based luxury sports car manufacturer Aston Martin to supply its Japanese iQ ultra-compact for sale in Europe as an entry-level Aston Martin model, the Cygnet. However, a long-standing joint venture in the US with General Motors, known as NUMMI, which makes passenger cars for Toyota and light trucks for GM, was discontinued during 2009, and was sold the following year. The group has seven of its own wholly-owned manufacturing facilities across the country and also produces Camry vehicles at Subaru's local plant in Indiana.

The company has held the position of America's best-selling passenger car manufacturer since 2003, and an increase in sales of light trucks in 2007 secured it the position as the overall local leader in vehicle sales for the first time, ahead of Chevrolet and Ford. Volumes peaked that calendar year at a record 2.62m vehicles. The group retained the #1 position in 2008, despite a 16% decline to a total of 2.2m units sold, but slipped back behind GM in 2010. Negative publicity, the grim economy and then manufacturing problems resulting from the earthquake caused a continuing decline, which bottomed out in calendar 2011 at 1.64m vehicles, before rebounding in 2012. For calendar 2013, Toyota was the local #3 brand behind Ford and Chevrolet with 1.89m passenger cars and light trucks. Lexus added a further 274k units. The Camry was again the best-selling passenger model in America, for the 11th consecutive year (and for the 14th time in 15 years - the exception was 2001, when it was topped by Honda's Accord); and the overall #3 after the F-Series and Silverado trucks with 408k units. The Corolla was the #9 vehicle overall with sales of 302k units. Also among the Top 25 US models overall were the Prius (235k), RAV4 compact SUV (218k units) and Tacoma pickup (159k). Other models include the Yaris subcompact and Avalon sedan cars, and the Highlander, Tundra, Tacoma and Tundra trucks. 

Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 31st Jul 2014: Toyota remained the top-selling automobile company in the first half of 2014, despite a strong challenge from Volkswagen Group. Toyota announced record volumes of almost 5.1m vehicles, up 4% year-on-year. Volkswagen delivered 4.97m vehicles, an increase of nearly 6%, though that figure excludes Scania and MAN trucks. General Motors sits in third place at 4.92m vehicles.

Adbrands Weekly Update 24th July 2014: Ads of the Week: "Dad To The Bone". An entertaining diversion from Saatchi & Saatchi Sydney, designed to demonstrate that the new Toyota Camry passenger car can transform even the meekest of dads into a one bad motherchuckler. Enjoyable fun.

Adbrands Weekly Update 26th Jun 2014: In yet another expansion of the massive vehicle recalls already underway in the US and around the world, Honda, Nissan and Mazda jointly recalled another 2.9m vehicles worldwide to fix a problem where a potential explosion in the airbag system could cause shrapnel to be launched at passengers. This follows an earlier recall last year. Toyota has already recalled more than 2.2m cars for the same problem. All four manufacturers share the same supplier, Takata, for the affected airbag systems. Unfortunately GM also uses Takata airbags in its top-selling Chevrolet Cruze model, so it too has been forced to widen to its own mammoth recall, telling its dealers to stop selling the car pending a fix. 

Adbrands Weekly Update 15th May 2014: Toyota rose the wave of positive exchange rate fluctuations that are boosting most Japanese companies, reporting a 16% jump in reported revenues to Y25,692bn although the dollar equivalent of $256bn was actually lower than the year before. (The average Japanese exchange rate against the dollar has jumped by almost 21% since 2012/13, so increases need to be greater than that to represent growth in dollar terms). Net income soared by almost 90% to the equivalent of $18.2bn. For the current year, though, it forecast no significant increase in revenues and a slight decline in profits, because of an anticipated slowdown in emerging markets offsetting growth or flat performance in North America and Japan respectively. 

Adbrands Weekly Update 10th Apr 2014: GM's vehicle recall woes are clearly contagious. This week, Mazda and Ford both announced sizeable recalls in the US; Ford's covers almost 500,000 vehicles for rust and seat weld problems. But the most serious by far was announced by Toyota, which is recalling 6.4m vehicles worldwide from 27 different model families to fix a variety of mechanical defects including faulty airbags and engine starters. Toyota said it wasn't aware of any accidents caused by the problems identified. Around 2.3m of the affected vehicles are in the US and 1.4m in Japan. Clearly all the major manufacturers are taking the opportunity to clean house for fear that the GM scandal will result in the imposition of punitive laws covering future defects.

More from Adbrands Weekly Update

The Prius was the world's first mass-produced hybrid gas/electric car when it first launched in Japan in 1997. It was introduced to North America and Europe in 2000, and sales took off from 2002 with the launch of the improved second-generation Prius. The group steadily introduced its hybrid technology into other models over the following years, including the Camry and several Lexus models. By March 2012, the group had sold a combined total of over 3.85m hybrid vehicles worldwide, including 2.6m Prius, and plans to convert all its vehicles to hybrids by 2020. In 2010, Toyota acquired a $50m shareholding in Tesla Motors, the US manufacturer of high-performance electric sportscars. Tesla is the new owner of the NUMMI factory previously owned by Toyota and GM. Sister brand Lexus has been the leading luxury marque in the US since 2000, and to boost sales to a younger market, the group launched a second standalone brand, Scion, through selected US Toyota dealerships in 2003. Now with five models, it was rolled out nationally during 2004.

For the year ending March 2014, Toyota's home market of Japan accounted for combined group sales of 2.37m vehicles, up 4% on the previous year. However, domestic unit sales remain below its 1990 peak, when the company sold more than 2.5m vehicles in Japan. Even so, Toyota remains the country's dominant car-maker with an overall 42.2% market share, down on the previous year. Excluding mini-vehicles, a segment in which it has a presence through Daihatsu, domestic market share slipped from a record 48.4% in ye 2013 to 46.7%. In calendar 2013, Toyota was the top-selling brand in Japan with sales of 1.52m vehicles, while Daihatsu was #5 with almost 650k (Focus2move figures). In its home market, the Corolla was the best-selling passenger car for more than 30 years, but has been superceded by the hybrid Aqua (marketed as the Prius C outside Japan), which took the top spot for 2013 with 262k units. It was supported by the regular Prius in second place at 254k. Daihatsu's Move and Tanto mini-vehicles and Mira sub-compact also all featured among the top ten. The Corolla is now the #3 Toyota model, and the #13 seller in Japan in 2013. Other strong sellers for Toyota are the Vitz, Crown, Vellfire, Spade and Voxy, all of them mostly produced for the Japanese market. The group operates four separate sales channels, targeting different consumer types. The main Toyota network serves the luxury market, while Toyopet specialises in the mid-market, and Corolla concentrates on volumes sales, primarily of the car model of the same name. A new channel, Netz, was established in the early 2000s to reach a younger audience. The company is also the local dealer in Japan for Volkswagen through the Duo joint venture. 

Despite the steady fall in Japanese sales, Toyota's volumes had just as steadily increased in virtually every other global territory until the 2008 crash. Toyota remains the largest Japanese carmaker in Europe, despite sharp falls in sales towards the end of that decade. The slide halted in the year to 2012, rising very slightly to 798,000 vehicles, but still only around 60% of the the levels achieved in the mid-2000s. Toyota's biggest markets in the region are Germany, France, the UK and Italy and it is the best-selling car brand in Finland, Norway and Greece. Best-selling model in the region was the Yaris, which accounted for over a quarter of all sales. (The same model is marketed in Japan as the Vitz and in North America and Asia as the Echo). The group has a joint venture with PSA Peugeot Citroen in the region which launched three new small car models in 2005, the Toyota Aygo, as well as the Peugeot 107 and Citroen C1. 

The group is also a major force in Asia, the best-selling car brand in several markets including Thailand, Indonesia, India and Malaysia. In Australia, Toyota overtook Holden as the best-selling manufacturer in 2003, and has continued to increase its lead ever since. It has been the market leader in New Zealand since 1987. It is also now a major force in the Middle East.

However, the group's focus on developed markets has left it, to some extent, playing catch-up in the emerging BRIC markets of Brazil, Russia, India and China, where it lags behind rivals. In 2010, the company launched the Etios, a new low-cost model specifically designed for the Indian market and imported into Brazil from 2011. Toyota has a limited presence in South America, but is aiming to repair this by boosting production and marketing in Brazil and Argentina. Though still small by comparison with other countries, sales volumes in the biggest regional market of Brazil have almost tripled since 2001 to 61,000 vehicles. 

China has also proved a difficult market to crack. Toyota was among the first foreign manufacturers invited to enter China in the 1970s, but the company was too preoccupied with expansion in the US to take up the offer. As a result, the Chinese government returned the snub in the 1990s, and it took Toyota until 2002 to secure a suitable partnership with what was then one of the country's smaller car factories, First Automobile Works (FAW). More recently it has been able to form a second alliance with Guangzou Automobile, already established as Honda's partner in China, to build the Camry model. Sales hit a new high of 880,000 units in the year to 2012. However, sales of all Japanese manufacturers in China were severely impacted later that year by a nationalist dispute between the two countries. This prompted a boycott by Chinese consumers of Japanese goods. Although those feelings began to recede in 2013, Toyota remained in 5th place behind Volkswagen, GM Wuling, Hyundai and ChangAn.

Yet despite - or more accurately because of - Toyota's dramatic growth, the company has repeatedly struggled to maintain quality control. Its record for reliability - arguably the brand's single most important selling-point - was first dented in 2005 by a series of recalls, totalling almost 2.3m cars in the US and 1.9m vehicles in Japan. That led to the creation of a dedicated quality control unit led by group CEO Katsuaki Watanabe. Yet the recalls continued, and in fact grew dramatically in scale. In 2006, the company called in 2.1m vehicles in its two main markets, leading to an order from the Japanese government to act on the situation. In 2007, a further 1.2m cars had been recalled by October, prompting US magazine Consumer Reports to stop automatically recommending Toyota's vehicles. 

In 2009, Toyota issued its biggest ever recall in North America, to replace accelerator pedals on 4.3m Toyota and Lexus vehicles after a fatal high-speed crash caused by a pedal becoming trapped under a floormat. Yet only a few months later it was forced to issue a new recall affecting 3.4m vehicles, half of them already recalled and adjusted, after evidence that some of the reported acceleration problems had been caused not by the floormat but by a faulty accelerator mechanism. At the same time, the original floormat recall was widened to cover another 1.1m vehicles. As it rushed to deal with these problems, the company took the unprecedented step of taking eight models, including versions of the popular Camry and Corolla, off-sale. The recalls soon spread to other markets in early 2010, so that by mid February a massive 8.6m vehicles were being called in for floor mat and accelerator adjustment. affected. At the same time another set of problems emerged with the brakes on the brand's flagship Prius model, leading to a new recall for up to 500,000 of those vehicles as well. The group was subsequently cleared of any electronic defects in connection with its "sticky pedals", but the repercussions from the original problem continued. A further recall of almost 2.2m more vehicles in February 2011 brought the total number of vehicles affected since 2009 to more than 14m. At the end of 2012, Toyota agreed to pay a total of $1.1bn to US car owners to cover a range of complaints including the cost of additional safety features to declines in resale value. In early 2014 it agreed to pay a record fine of $1.2bn to US regulators as a penalty for obscuring and obstructing a speedy fix of the problem.

In addition to its main car businesses, Toyota controls a large collection of satellite companies making automotive parts and components. One of the most significant of these is Toyota Boshoku which makes auto interior parts and and air conditioning systems. The group also has a substantial portfolio of other interests beyond auto manufacturing These are grouped into four sectors. The group's Toyota Financial Services Corporation subsidiary has a large business portfolio including sales finance, vehicle insurance, and credit cards. The group has a 35% controlling stake in Aioi Insurance, Japan's fourth-largest non-life insurer and a leader in motor cover. It was formed from the merger in 2001 of Toyota's Chiyoda Fire & Marine insurance with rival Dai-Tokyo Fire & Marine. Toyota Financial Services Securities Corporation was formed in 2000 to market investment and unit trust products to group and other customers. It introduced TS Cubic and other credit cards in 2001, and also operates e-commerce portal gazoo.com. Separately, Delphys is a marketing services agency wholly owned by Toyota which handles selected assignments in Japan and through a small global network for Toyota and other affiliated companies.

Toyoda Automatic Loom Works is the group's industrial equipment arm, manufacturing a variety of automatic-guided vehicles, automatic rack systems, power shovels, towing tractors, and aerial work platforms, as well as forklift trucks. Swedish subsidiary BT Industries engineers warehouse systems. The group has a variety of telecommunications businesses alongside its 11% stake in KDDI. Mobile Broadcasting Corporation is a joint venture with Toshiba, Fujitsu and other companies to broadcast multimedia content to automobiles through a satellite. The group has two joint venture with Sony to supply internet services, All Planning Inc and Crosswave Communications. Toyota also manufactures prefabricated housing, and makes leisure boats and cabin cruisers in North America and Japan. AirFlite is a US-based aviation services business for corporate travellers providing jet storage, aircraft service, flight planning and more.

The group was involved for several years from 2002 in Formula 1 and NASCAR racing, with its own sponsored team, and as a supplier of engines to the AT&T Williams Team. However in November 2009, it announced plans to quit the sport altogether. The high costs of participation were the main cause for the withdrawal, but the lack of wins by the Toyota team as well as the sport's poor environmental reputation were also important factors.

Until recently, Toyota had proved to be one of the most consistent performers among Japan's major corporations in recent years, guided by a business philosophy centred around the Japanese concept of kaizen, or continuous improvement. This ensures that corporate goals are changed every time the company comes close to hitting them, and also calls for repeated shake-ups of the group's structure and management team to avert stagnation. 

Financials

The dramatic fall in global automobile sales during 2008 was exacerbated for all Japanese manufacturers by the strength of the yen against other currencies. After a record profit of Y1,718bn in the year ending 2008, the group plunged to a net loss of Y437bn ($4.3bn) for the year ending March 2009, mainly the result of a Y766bn deficit in the final quarter of the year, one of the biggest quarterly losses ever recorded by a Japanese company. Despite an initial forecast of a further 20% fall in revenues for the year to 2010, as well as an even deeper loss of Y800bn, there was actually a sharp improvement in performance, despite the massive costs of the global sticky pedal recall. Final revenues for the year to 2010 came in at Y18,950bn, down 8% and the lowest level since 2005, but the group returned to profit, with net income of Y209.5bn. For the year ending March 2011, Toyota's revenues were Y18,993bn ($221.6bn), up fractionally on the year before. However net income almost doubled to Y408bn ($4.8bn). 

The knock-on effects of the 2011 earthquake disaster were felt more keenly the following year, along with the after-effects of severe flooding in Thailand and the soaring value of the yen. Revenues for the year to 2012 slipped back again, in Japanese yen at least, to Y18,584bn (although the dollar equivalent rose to $234.9bn). Net income plunged 30% to Y284bn ($3.59bn). Without problems from disasters and bolstered by better exchange rates, revenues for the year ending March 2013 jumped by almost 19% to Y22,064bn ($266bn), their highest level since ye 2008, while net income soared by almost 240% to Y962bn ($11.6bn). The biggest contributor to profit was the swing from loss to a large profit in Toyota's domestic market.

For the year to March 2014, positive exchange rate fluctuation helped to boost revenues by 16% to Y25,692bn ($256.4bn), while net income made another leap of almost 90% to Y1,823bn ($18.2bn). Sales in Japan accounted for 33% of total revenues, North America for 31%, Asia 17% and Europe 10%.

Management

Takeshi Uchiyamada is chairman of Toyota. Group CEO Katsuaki Watanabe stepped down from the driving seat in 2009 in the wake of the group's disappointing performance, to be succeeded as CEO by Akio Toyoda, great-grandson of the group's founder, and regarded for several years as a future leader for the company. His father, Shoichiro Toyoda, was group president during the 1990. Another family member, Shuhei Toyoda, is president & CEO of Toyoda Boshoku. Despite their traditional influence at the company, the Toyoda family have only a small shareholding in the business, equivalent to around 2% of group's equity.

Other senior officers include Yukitoshi Funo (group EVP, international operations, Asia, Africa, Latin America), Atsushi Niimi (group EVP, North America operations), Satoshi Ozawa (group EVP, general administration & Europe) and Shinichi Sasaki (group EVP, corporate planning & customer service). 

Shigeki Terashi is president of Toyota North America, with Yoshimi Inaba as COO and chairman Toyota USA. Jim Lentz is president & COO of sales and marketing arm Toyota Motor Sales USA. Other senior officers in the US include Robert Daly (SVP), Don Esmond (SVP, automotive operations), Bob Carter (group VP & general manager Toyota division) and Jack Hollis (VP, Scion). See account assignments for local marketing personnel. Didier Leroy is CEO of Toyota Motor Europe.

Background

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.

Last full revision 23rd May 2014


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