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. 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.

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The Adbrands Company Profile of Toyota summarises the company's history and current operations. Subscribers may access the following website links:

Toyota website

Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 17th Nov 2016: Toyota has agreed to pay up to a whopping $3.4bn to settle allegations of inadequate rust protection in its US SUVs and pick-up trucks. A class action from owners of Tacoma, Sequoia and Tundra trucks said that the structural integrity of the vehicles could be at risk as a result of corrosion. The company has agreed to replace the bodywork frames of up to 1.5m affected vehicles.

Adbrands Weekly Update 10th Nov 2016: In a significant blow to Saatchi & Saatchi and parent Publicis Groupe, Toyota has transferred its entire European integrated business into WPP-aligned CHI & Partners. Saatchi and CHI have been fierce rivals for the Toyota account for much of the past decade. Saatchi took charge of the business in 1993, but lost the UK account to CHI in 2007. It won the main account back two years later (though CHI retained Lexus), and has retained it ever since. Until now. In a further blow, Publicis-owned ZenithOptimedia will also lose responsibility for media to CHI's M/Six, a partnership with Mindshare. CHI is to launch a new bespoke agency to handle all creative, media, digital and content across Europe under the name CHI&Toyota. For Publicis, the loss represents a serious setback to its promise that 2017 will demonstrate the efficacy of its new Power of One set-up. With the exception of UK supermarket Asda, major account wins for the new model have been few and far between.

Adbrands Weekly Update 26th May 2016: Toyota and Volkswagen joined the global battle for the car-hailing market, but on opposing sides. Toyota has put its weight behind Uber, investing around $100m in that business and agreeing a strategic alliance to offer its vehicles to drivers in the US and selected other markets at improved terms via Toyota Financial Services. Meanwhile, Volkswagen said it had agreed a similar arrangement with Gett, a rival service in 60 cities in Europe and the US, backed with an investment of $300m. Increasingly, the market is being split between Uber on one side (backed by Google, Facebook and others), and its various regional challengers, whose backers include Apple, GM, Amazon's Jeff Bezos, and now Toyota. The next step will almost certainly see the merger of some or all of the challengers to form a stronger global rival to the ubiquitous Uber.

Adbrands Weekly Update 12th May 2016: Toyota made steady progress in the year to March 2016. Revenues hit a new high of of Y28.4 trillion, but the US$ equivalent fell to around $237bn at average rates (from around $248bn the year before). Net income was up 4% to the equivalent of $19.3bn. However the company warned that the renewed rise in value of the Yen since the beginning of 2016 will impact on future profitability because so many of its costs are paid in other currencies. It forecast a decline in net profit of as much as a third for the current year.

Adbrands Weekly Update 24th Mar 2016: Ads Of The Week: "Superheroes". Been there, done that, got the burnt feet. (Jeez, not even Superman goes around barefoot on a hot day at the beach!). Saatchi & Saatchi ride the wave of excitement over Warner's Batman vs Superman movie with this funny spot for Toyota Australia, which manages to trade off a bit of the hype without paying the license fee.


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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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