Project Report on

INTERNATIONAL MARKETING OF TOYOTA

In partial fulfilment of requirement for the

Award of Degree of M.Com

Subject:
International Marketing

Submitted By:
Mr. Hitesh Rohra
Roll No. 117
M.Com. Part – II, Semester - III

Under the Guidance of:

Prof. Mr. Prakash Mulchandani

SMT. CHANDIBAI HIMATHMAL MANSUKHANI COLLEGE

ULHASNAGAR – 421003

UNIVERSITY OF MUMBAI
2015 – 2016

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International Marketing Of
Toyota

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This is to certify that, Mr. Hitesh Rohra of M.Com Part – II, has successfully

completed the project in International Marketing titled “International Marketing

Of Toyota” under my guidance for the academic year 2015-16. The information

submitted is true and original as per my knowledge.

Mr. Prakash Mulchandani

(Internal Guide)

Prof. Gopi Shamnani Dr. Padma V. Deshmukh

(Coordinator, M.Com) (I/C Principal)

________________
External Examine

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 DECLARATION

I, Mr. Hitesh Rohra student of SMT. CHANDIBAI HIMATMAL MANSUKHANI

COLLEGE, ULHASNAGAR studying in M.Com Part – II, Semester – III, hereby

declare that I have completed this project on “International Marketing Of Toyota”

for the subject “International Marketing” in the academic year 2015-16.The

information submitted is true and original to the best of my knowledge.

_______________
Mr. Hitesh Rohra

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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 forgiving me
chance to do this project.
I would like thank my Principal, Dr. Padma V. Deshmukh 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. Mr. Prakash Mulchandani 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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 Executive Summary

In 2003, Toyota Motor Corporation released their third division known as Scion.

Scion is a youth oriented company that produces stylish and affordable transportation that

meets the needs for the everyday Generation Y person. Generation Y is typically defined

as someone who is in their late teens to early twenties, and who tends to be informationrich,

time-poor, and technologically-savvy. Scion keeps everything as simple as possible

in the car buying experience, from monospec vehicles to pure pricing.

One of the best factors helping Scion is that it is a division of Toyota Motor

Corporation, one of the leading automobile manufacturers in America. This division was

created in attempt to make up for the failure of Toyota’s “Project Genesis,” an earlier

attempt to gain the teenage buyer. The lesson Toyota learned from this failure was that

young people generally categorize the Toyota logo as an older person’s car. With this

knowledge in hand, Scion seemed to be a sure fire way to go.

With three vehicles currently in production, Scion has surprised many with having

over 150,000 units sold in 2005 alone. This number has toppled some of the veteran car

manufacturers of today. These numbers still continue to rise, with Scion showing a

thirtyseven percent increase in sales from April to May of this year.

Scion sees direct competition from other small car manufacturers like Honda,

Mazda, and Kia. However with the introduction of the tC they are also seeing

competition from some of the bigger cars from Chevrolet and Ford.

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 Objectives

1. To study the international market.

2. To study the Comparison of Domestic Marketing with International Marketing.

3. To study the Challenges Firms Faced In International Marketing.

4. To study the International Marketing Process.

5. To study the types of innovations.

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 Content

a) Abstract & Introduction …………………………….03

b) Definitions Of International Marketing ………………………………….05

c) Challenges Firms Faced In International Marketing………………………..06

d) Five Steps Of International Marketing Process…………………………….07

e) Types Of Innovations………………………………………………………..09

f) Advantages For Companies……………………………………………11

g) Benefits To Customers…………………………………………………..11

h) Introduction Of Toyota ………………………………………………..12

i) History …………………………………………………………………13

j) Toyota’s Global Vision ……………………………………………………18

k) Toyota’s Mission…………………………………………………………….20

l) Strategy: Unrelated Diversification…………………………………………21

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

m) Analysis…………………………………………………………………..22

n) Toyota Industries: Sales by Business Segment……………………………..22

(FY 2012, Consolidated Basis)

o) Logo and Branding………………………………………………………24

p) Marketing………………………………………………………………….25

q) Company strategy…………………………………………………………26

r) Principles of Toyota………………………………………………………27

s) Worldwide presence……………………………………………………..28

t) Special Feature: Toyota's Efforts in Emerging Markets………………….30

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u) Innovative International Multipurpose Vehicle………………….31

v) Vehicle Production, Sales and Exports by Region…………………………..35

w) Toyota and Ford collaborate to build Hybrid cars………………………………36

x) History of Technological Development from 1990…………………………..37

y) Majority-owned subsidiaries…………………………………………………..40

z) SWOT ANALYSIS OF TOYOTA………………………………………………..41

a) Conclusion………………………………………………………………….45

b) References……………………………………………………………………..46

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 Abstract

Until a few years ago, the international market had been an avenue to absorb the spillover
from extra production. The entrepreneur used to look at export only if he could spare part of his
production after meeting the national domestic demand. With the economy opening up its doors to
international manufacturers and marketers immediately after foreign exchange crunch of the early
90s, however the scenario changed rapidly. The liberalized economy also provided Indian
consumers internationally acclaimed brands at competitive prices. Today, international market offer
unlimited opportunities to companies like Infosys, Wipro, Videocon, Ranbaxy, Dr. Reddy’s Labs,
Asian Paints and many others. As a result, these firms now look at international markets to gain
global competitiveness through technological advancement, superior marketing strategies and
continue product and service innovations.

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 Introduction

There are 192 countries in the world, each offering an independent yet interdependent market to
manufacturers, service providers and knowledge – and skill- based marketing operators. The
domestic markets now face competition not only from within but even from all remote corners of
the world. The multinational and transnational firms offer tough competition to the domestic
industry by setting vey steep and high standards.

The Indian economy witnessed this when leading multinationals and mega-billion dollars
corporations like Samsung, LG, Panasonic, Whirlpool, Bridgestone and automobile manufacturers
like Hyundai, General Motors, Toyota, Suzuki and Honda walked into the Indian market and not
only created their own space, but also virtually look over more than 60% share of the market from
Indian manufacturers. In the white goods market, such as color television and refrigerators,
multinationals control more than 90% of the market share today. Goods imported from china have
been responsible for the closures of many small-scale manufacturers in the dry cell battery,
kitchenware, cosmetics and toy industries.

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 Concept of International Marketing

It is concerned with the micro aspects of a market and takes the company as a unit of
analysis. The purpose is to find out as to why and how a product succeeds or fails in a foreign
country and how marketing efforts influence the results of international marketing.

Definitions of International Marketing

 International Marketing is the performance of business activities that directs the flow of
goods and services to consumers or users in more than one nation.

- Cateora

 It is the performance of business activities designed to plan, price, and promote &direct the
flow of a company’s goods & services to consumers or users in more than one nation for a
profit.

- Cateora &Graham

 International Marketing is the multi-national process of planning and executing the

conception, prices, promotion and distribution of ideal goods and services to create
exchanges that satisfy the individual and organizational objectives.

American Marketing Association

 The process of planning and conducting transactions across national borders to create
exchanges that satisfy the objectives of individuals and organizations.

 International Marketing can be defined as exchange of goods and services between different
national markets involving buyers and sellers.

A Comparison of Domestic Marketing with International Marketing

Some of the comparative advantages and disadvantages of both marketing systems remain
similar. The firms undertaking international & domestic marketing follow the same basic principle
of marketing. i.e. they adhere to the rules for selecting products that are design on the basis of
customers’ needs, fix the price band according to the segment they want to cater to, look for
logistics and distribution channels necessary to reach the end consumer in cost effective ways and,
fully, in order to generate necessary demand, these companies also undertake country- specific

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promotional efforts for international marketing. Yet, at times, international marketing
poses problems to the firms at their different levels of operational efficiency such hurdles make
international marketing more challenging than domestic marketing.

Challenges Firms Faced In International Marketing

 Political & Legal Environment –
The firm doing business with different countries have to follow rules, regulation,
trade laws, taxation laws, and contractual obligation e.g. a number of countries may follow
English law, countries in some other parts of the world may have their own systems and
laws devised. Besides, local administration in each country would prefer controlling the
international imports to their country in order to protect local industry through non tariff and
non tariff barriers.
Similarly, political ideologies of the nation may not see eye to eye. But an
international firm’s public relations activities will ensure that it overcomes all such
challenges, when entering into business with such nations. Some of the U.S expatriate
managers are expert in handling such situations, as almost all U.S based firms face some
hostile nation or the others. Yet, they manage their relationship in such a manner that the
U.S multinationals keep growing.
 Cultural Environment –
The cultural environment poses yet another challenge to marketers at the
international level. Differences in the customs and traditions followed by different
communities around the world can lead to situation where communication with the
consumers, users and customers can be misinterpreted. The variation in semiotics, values,
ideas, attitude, beliefs, assumptions and traditions pose a challenge to the international
marketing manager. The manager must identify similarities and disparities in cultures and
take steps for adaptations in different countries.
 Competitive environment-
Taken in the right spirit, competition can spur an organization to excellence. At the
same time, however, it can be dispiriting if the opponents indulge in tactics, for instant they
may employ strategies to block channels of distributions, devise prohibitive trading
contracts, resort to negative advertising policies and either suddenly raise prices or lower
them. Pepsi and Cock have often indulged in similar fierce competitive fights.

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 Five Steps of the International Marketing Process

Analyzing Marketing Opportunities

Selection of Target Markets

Offers to the Potential Customers

Developing the International Marketing Mix

Proper Implementation Of Marketing

Programs

FIG-STEPS IN INTERNATIONALMARKETING

1) Analysing Marketing Opportunity-

Analyzing international marketing opportunities to identify unfulfilled or under
fulfilled needs that a marketer may satisfy through its products or services. This analysis can
be done through information seeking and analysis or through market research. A marketer
may have a product or service concept developed first and looks for the needs in the market
that can be satisfied by these products or services. The marketer may also first identify
unfulfilled or under fulfilled needs in the market and then develop a suitable product or
service offer to satisfy these identified needs.

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2) Selection of Target Market-
Once the marketer has identified the potential opportunities in the first step now is
the time to select the groups of potential international customers (target markets) to whom to
sell the products or services. This step also involves identifying the potential buyers,
demand measurement & forecasting, market segmentation, market targeting & market
positioning. Segmentation involved identifying groups of potential customers from the total
potential market that are homogeneous on certain aspects of identity and behaviour and are
heterogeneous on the same aspects from others in the target population. This step also
requires the marketers to decide what key benefits in a product or service to offer to the
selected target customers and on what aspects to differentiate from the competition.

3) Offers to Potential Customers-

Since a firm needs to offer best value to the potential customers to makes its
products and services more profitable compared with competitors, firms have to adopt
appropriate business and marketing strategies. Many activities are to be undertaken in a firm
by many people and in a number of departments to produce and deliver final products and
services to its customers, this requires aligning and coordinating numerous activities and
efforts. At the same time to achieve best value for the buyer and bet profits for the firms, the
firm needs to optimize all the activities, efforts undertaken and resource utilization. This
requires the firm to adopt a coherent and appropriate logic or strategy to direct and control
the alignment, coordination and optimization of its business and marketing effort.

4) Developing The International Marketing Mix-

The fourth step in the marketing process is developing the international marketing
mix, product, place, price & promotion. Marketing mix identifies four key areas for
developing a well coordinated marketing strategy. To create a strong marketing impact a
firm needs to develop appropriate programs in these four key areas and also need to ensure
that all these four aspects of a firms marketing program are well coordinated and in
conformity with each other to give a clear image to the target market of the firm’s brands
and its products.

5) Proper Implementation of Marketing Program-

Developing a good marketing program is not good enough for success. A firm also
needs to manage the international marketing effort properly. Quite often firms fail not

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 because they did not have a viable marketing program, but that they failed in
properly implementing their well designed plans. Firms also need proper analysis, planning,
implementation and control of their marketing programs.

Types of Innovations
1) A product innovation is "introducing a good or service that are new or significantly

Improved in terms of their characteristics or intended uses." These include significant

Improvements in technical specifications, components and materials, the embedded
software, the user-friendly attitude of other functional characteristics. Product innovations
can use new knowledge or technology, or may be based on new uses or combinations of
existing knowledge and technologies. Product term is used to cover both goods and services.
2) Process innovation is implementing new or significantly improved methods of production
(e.g. new manufacturing processes or technology flows) or a new method of delivery. This
includes significant changes in techniques, equipment and / or software. The result of
process innovation should be significant in terms of: the production, product quality or
reduce production costs and distribution.

3) Marketing innovation is implementing a new marketing method involving significant

changes in product design or packaging, new sales methods, product placement, product
promotion or pricing on the policy. Marketing innovations are designed to better meet
customer needs, pursue new markets or opening a ninth position of company products on the
market, with the objective of increasing company sales.

4) Organizational innovation is implementing a new way of organizing the company's

Business practices in employment organization or external company’s relations. Such an

innovation aimed at enhancing business performance by reducing administrative and
transaction costs, improving satisfaction at work (and thus labour productivity) or reduces
supply costs.
In the U.S. many organizational innovations have taken place in distribution.
Examples of organizational innovations include the introduction of supply chain
management, quality management system etc... In a general sense, the term "organizational
innovation" refers to the creation or adoption of new ideas or behaviours organization
through change and innovate the organization's internal adjustments may be introduced
changes in strategy, structure, skills,

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 Processes, systems or cultural stimulation innovation of organization,
reorganization of the whole organization.
Abernathy and Clark (1985) evaluated that in terms of innovation brings benefits to
an organization over its competitors, resulting in four types of innovations:

a) Architectural Innovation (substance) that recombines certain components of a product or

process so that produces a new "architecture". An example of architectural innovation can
replace steel with plastic in some applications.

b) Niche Business Innovation "which allows creation of new markets using existing
technology.

c) Regular innovation "(current) which are incremental changes, continue to have

Significant cumulative effects on cost and performance products. Continuous improvement

of current innovations taking place in the automotive industry, computers, etc...

d) Revolutionary innovation (the break) that produces completely new technologies or

products, involving radical changes (rupture) of industries or the creation of new industries.

Few Examples of Innovations

 People in Madrid buy Coca-Cola trough sms

Media agency Universal McCann has made an interactive mega poster Coke Zero which
Proved to be very beneficial for the brand. A building under construction was completely covered
with posters imitating a very good coffee machine. Poster was displayed on a phone number to
which to send a message puteu Spanish with the word "zero." As a reward, they receive a code that
could get a free bottle of Coke.

 The Dutch follow their phone to find ATM's

ING Wegwijzer is an application for mobile, which allows users to find the nearest ATM.
For this, the application uses the phone's camera and GPS. The user must choose one of the camera
settings and positioning it as if taking a picture. The application displays the picture immediately
above that which is the fastest way to a nearby ATM.

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  Londoners send their content on Facebook in the first MMS phone

Fun Text, a provider of mobile messaging, has developed a function that allows users to
Send MMS content on Facebook. This can send animations, videos and virtual gifts.

Advantages for companies

 Employees with the necessary know-how and skills to develop holistic solutions for
customers.

 Interdisciplinary insights into business processes.

 Interrelated understanding of product and services marketing and sales and service
execution for global brand management.

 Country-specific marketing, sales and service concepts.

 Competitive advantage through the combination of service, marketing and sales.

 Graduates with relevant practical experience.

 Knowledge transfer from student and research projects.

 Successful tool to improve employee retention/loyalty.

Benefits For Customers

 When products and services conform to International Standards consumers can have
confidence that they are safe, reliable and of good quality.
 For example, ISO's standards on road safety, toy safety and secure medical packaging are
just a selection of those that help make the world a safer place.
 International Standards on air, water and soil quality, on emissions of gases and radiation
and environmental aspects of products contribute to efforts to preserve the environment and
the health of citizens.

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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
syndicates with executives accused of
blocking Financial Service Agency

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

23
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.

24
 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.

28
 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

29
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.

30
 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 "Hɔng 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.

31
 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.

32
 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.

33
 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).

34
 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.

35
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.

36
 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.

37
 Innovative International Multipurpose Vehicle

The IMV Project constitutes an important sales strategy in emerging markets. Launched in 2004,
the IMV series consists of five vehicles̶t hree pickup trucks, a minivan and an SUV̶specially
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,

38
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.

39
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.

40
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.

41
 Vehicle Production, Sales and Exports By Region

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

N orth A meric a 1 ,2 7 8 .4 1 ,4 4 4 .0 1 ,5 3 5 .1 1 ,5 1 9 .3 1 ,6 3 6 .9 1 ,4 0 4 .8 1 ,1 8 9 .1 1 ,4 0 4 .0 1 ,2 0 6 .1 1 ,7 2 0 .6

L atin A meric a 5 8 .1 8 0 .4 1 3 8 .5 1 7 7 .9 1 8 3 .1 1 9 4 .8 1 8 1 .5 2 0 4 .3 1 9 5 .1 2 4 2 .8

E urope 4 6 6 .1 5 8 2 .5 6 3 8 .1 8 0 8 .8 8 0 6 .5 6 8 8 .3 5 0 7 .3 4 6 1 .7 4 6 0 .3 4 6 1 .4

A fric a 9 3 .3 1 0 8 .8 1 2 1 .1 1 4 3 .8 1 4 5 .7 1 7 9 .2 1 0 2 .8 1 2 3 .4 1 5 0 .8 1 5 1 .7

A s ia 5 4 8 .4 7 1 7 .0 1 ,0 2 9 .2 1 ,1 3 7 .7 1 ,3 8 7 .3 1 ,5 9 0 .0 1 ,5 0 1 .4 2 ,0 2 7 .4 2 ,0 6 2 .8 2 ,5 6 5 .7

O c eania 1 1 3 .6 1 0 9 .9 1 0 9 .2 1 1 1 .6 1 4 8 .9 1 4 1 .4 9 6 .8 1 1 9 .4 9 3 .7 1 0 1 .4
O vers eas total 2 ,5 5 8 .0 3 ,0 4 2 .7 3 ,5 7 1 .2 3 ,8 9 9 .0 4 ,3 0 8 .6 4 ,1 9 8 .4 3 ,5 7 9 .0 4 ,3 4 0 .4 4 ,1 6 8 .8 5 ,2 4 3 .6

Japan 3 ,5 2 0 .3 3 ,6 8 0 .9 3 ,7 8 9 .6 4 ,1 9 4 .2 4 ,2 2 6 .1 4 ,0 1 2 .1 2 ,7 9 2 .2 3 ,2 8 2 .8 2 ,7 6 0 .0 3 ,4 9 2 .9

Worldwide total 6 ,0 7 8 .3 6 ,7 2 3 .7 7 ,3 6 0 .9 8 ,0 9 3 .2 8 ,5 3 4 .7 8 ,2 1 0 .5 6 ,3 7 1 .3 7 ,6 2 3 .3 6 ,9 2 8 .8 8 ,7 3 6 .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

N orth A meric a 2 ,0 3 1 .3 2 ,2 3 0 .3 2 ,4 3 6 .1 2 ,7 3 8 .3 2 ,8 2 2 .2 2 ,4 4 1 .8 1 ,9 7 5 .4 1 ,9 3 5 .5 1 ,8 0 6 .9 2 ,2 7 4 .6
L atin A meric a 1 6 2 .1 2 1 4 .9 2 7 0 .5 3 3 9 .4 3 7 9 .4 3 7 0 .2 2 9 3 .6 3 4 2 .1 3 3 3 .5 4 0 6 .6

E urope 8 5 1 .5 9 4 6 .9 9 9 5 .2 1 ,1 2 4 .1 1 ,2 3 8 .6 1 ,1 1 9 .5 8 8 6 .0 7 8 5 .8 8 0 1 .9 8 1 7 .7

A fric a 1 6 0 .6 2 0 6 .7 2 2 7 .2 2 6 5 .7 3 1 3 .5 2 8 8 .1 2 0 1 .4 1 9 7 .6 2 1 1 .9 2 4 3 .0

A s ia 6 8 2 .4 8 4 6 .3 1 ,0 6 2 .9 1 ,1 0 6 .7 1 ,3 2 9 .6 1 ,4 3 8 .6 1 ,5 3 3 .9 1 ,8 9 5 .9 1 ,9 9 8 .2 2 ,3 4 0 .5

O c eania 2 1 5 .1 2 3 2 .8 2 3 6 .9 2 5 0 .3 2 7 5 .9 2 7 7 .7 2 3 1 .2 2 4 9 .6 2 1 5 .9 2 5 8 .8

M iddle E as t 2 5 1 .4 2 7 0 .9 3 2 5 .3 4 0 4 .8 4 8 2 .7 5 9 0 .1 4 8 2 .5 5 5 4 .6 5 2 7 .5 6 8 3 .9

O vers eas total 4 ,3 5 4 .5 4 ,9 4 8 .8 5 ,5 5 4 .1 6 ,2 2 9 .3 6 ,8 4 1 .9 6 ,5 2 6 .1 5 ,6 0 4 .0 5 ,9 6 1 .1 5 ,8 9 5 .9 7 ,0 2 5 .1

Japan 1 ,7 1 5 .9 1 ,7 5 8 .8 1 ,7 1 3 .1 1 ,6 9 2 .3 1 ,5 8 7 .3 1 ,4 7 0 .0 1 ,3 7 5 .5 1 ,5 6 6 .1 1 ,2 0 1 .0 1 ,6 9 2 .2

Worldwide total 6 ,0 7 0 .4 6 ,7 0 7 .6 7 ,2 6 7 .3 7 ,9 2 1 .6 8 ,4 2 9 .3 7 ,9 9 6 .1 6 ,9 7 9 .6 7 ,5 2 7 .3 7 ,0 9 6 .9 8 ,7 1 7 .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

N orth A meric a 7 8 2 .8 8 1 3 .5 9 3 9 .6 1 ,3 4 4 .7 1 ,2 4 4 .1 1 ,1 2 4 .2 5 7 4 .0 6 2 8 .2 4 9 4 .7 7 0 4 .6

L atin A meric a 7 1 .5 9 5 .6 1 2 0 .2 1 4 8 .9 1 7 8 .9 1 4 6 .4 6 1 .3 1 0 6 .9 9 5 .6 1 1 6 .4

E urope 4 2 4 .6 4 1 9 .0 3 6 0 .7 3 7 5 .1 4 4 1 .5 4 2 0 .3 2 3 0 .4 2 9 3 .7 3 4 3 .0 3 1 1 .9

A fric a 5 8 .2 9 2 .0 1 0 7 .2 1 3 0 .0 1 4 7 .0 1 4 8 .7 6 7 .5 7 2 .4 5 4 .7 6 4 .9

A s ia 1 5 4 .7 1 5 6 .2 1 2 9 .8 1 1 2 .3 1 5 1 .2 1 6 9 .1 1 2 7 .1 1 8 4 .0 1 8 3 .0 2 0 5 .4

O c eania 1 5 4 .1 1 6 4 .6 1 5 9 .2 1 7 1 .6 1 7 5 .2 1 8 4 .2 1 4 4 .4 1 6 5 .8 1 4 6 .3 1 7 4 .3

M iddle E as t 1 8 2 .6 2 0 2 .1 2 2 6 .5 2 4 6 .7 3 2 8 .3 3 9 3 .4 2 4 0 .0 2 8 8 .6 2 4 7 .7 3 6 3 .6

T otal 1 ,8 3 6 .0 1 ,9 5 1 .7 2 ,0 4 3 .2 2 ,5 2 9 .3 2 ,6 6 6 .1 2 ,5 8 6 .3 1 ,4 4 4 .7 1 ,7 4 5 .0 1 ,5 6 8 .9 1 ,9 4 5 .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.

42
 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.

43
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”

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 E ngine D riving/Braking Suspens ion Body E lec toronic s M aterials

1990 A luminium c rankshaft A ctive Four-Wheel Steering

| damper pulley Sys tem
1999 C ylinder head with Super-Strut Suspension
las er c ladding Rotary Tri-blade Coupling
5 V alve E ngine 5 - speed automatic transimission

Bumper made M agnesium c ylinder

with T oyota Super head c over
O lefin P olymer A ir c onditioner with
(T SO P) new refrigerant
Fabric with
deodorizing function

Front-passenger
s eat airbag
C omprehensive vehicle control
s ystem(i-Four)
N ext-generation lean- G P S car navigation
burn engine H ead U p D isplay
Bac k guide monitor with CCD
c amera

Smokeless diesel
engine
E lecrtonically c ontrolled
throttle
6 - speed manual transmission
T hree-way c atalyst
for a lean-burn engine
G P S voice navigation
C ombustion pressure s ensor
D iesel oxidation
c atalyst
P lastic fuel tank
T hree-way palladium
c atalyst
D iesel Smoke Control
Sys tem (DSCS)
V ehicle Stability Control
s ystem(VSC)
V ariable Valve T iming-
intelligent (VVT-i)
4 - valve direct-injection
diesel engine
Flex L ock-up System
T SO P-5 for interior
parts

M ulti-zone automatic air

c onditioning
U V-reducing
door glass
Water-repellent
door glass
T itanium nitride c oating Brake Assist G O A Collision-
s afety body
Fuel Cell E lectric SRS side airbag
V ehicle (FCEV) Seatbelts with
forc e-limiter
D irect-injection
engine(D-4)

44

T oyota Hybrid System
(T H S)
V ariable Valve T iming
L ift- intelligent (VVTL-i)
C ommon-rail direct-
injec tion diesel turbo
engine(D-4D)
2000
| airbags for the
2009
s ystem(ECB)
(E - Four)
T oyota Stop & G o
Sys tem
Fuel Cell H ybrid Vehicle
(FCHV-4, FCHV-5)
T oyota Hybrid System
(T H S-C, THS-M, THSII)
Fuel Cell H ybrid Vehicle
(T oyota FCHV)
T oyota Intelligent
I dling Stop System
D ual VVT-i
Stoichiometric D -4
P iezoelectric Common-
rail T ype Direct-injection
D iesel T urbo Engine (D -
4 D Clean Power)
D iesel H ybrid System
T ire pressure warning
s ystem
SRS curtain
s hield airbag
Blind corner monitor
Radar cruise c ontrol s ystem
N avigation s hift c ontrol Bumper
rec ycling
tec hnology
A RS
D iesel oxidation
c atalyst
A BS for EBD E lectric power s teering
s ystem
Super CVT
D ual-stage SRS Smart Key System D iesel P articulate
N O x Reduction System
front- passenger (D PNR)
s eat
P ackage tray and
door trim made out of
the kenaf plant
N egative ion generator
A C100V power outlet
Run flat-tires Bac k guide monitor with
voice recognition
E lectronically C ontrolled Brake
E lectric 4-wheel drive s ystem
D ual-stage SRS Bio- plastics
airbags for the A ir c onditioner with
driver's s eat electric heat pump
Retractable s ystem using
M etal Top System C O 2 refrigerant
P edestrian-
injury-lessening
body
N ew T ire-production method G - BOOK
P ower back
door s ystem
SRS knee
airbags for driver
P re-crash Safety System
P re-crash
s eatbelt
I ntelligent AFS
Front and s ide monitoring
L ane-monitoring system
P ollen-removal filter
N ight View system T oyota Eco-plastic
Steering-guided clearance
s onar
Smart Entry and Start
45
 Sys tem
P lasmacluster I ons
I ntelligent P arking Assist
s ystem
V DIM
6 Super ECT (6 -speed automatic
transmission)
V DIM with active steering
c ontrol
SRS twin- L ane-keeping assist s ystem
c hamber airbag
Radar cruise c ontral with
low- speed tracking mode
S- VSC + Active Control 4 WD
I ntegrated Control
A ctive stabilizer suspension
s ystem
P re-crash Safety System with
millimeter-wave radar and stereo
c amera fusion system
(P edestrian detection, s teering and
obs tacle-avoidance assist s ystem)
D - 4S
G - BOOK ALPHA
H E LPNET
T H S II with monitor
s peed reduction device
T H S II with two-stage Wide-view front monitor
motor s peed reduction
device
V ariable Valve T iming-
intelligent E lectric (VVT-
iE )
SRS seat
c us hion airbag
8 Super ECT(8-speed automatic
transimission)
P re-crash Safety System with "M ap on Demand"
driver-monitoring system tec hnology to automatically
(M illimeter-wave radar type) deliver differential map data to
c ar navigation systems
Rear-end Pre-crash Safety Radar cruise c ontral with
Sys tem (Warning of approaching trac king function
rear vehicle, Pre-crash Intelligent
H eadrests)
I ntelligent P arking Assist
(I PA) system with ultrasonic
s ensors
O xygen-level c onditioner
E c o D rive I ndicator
T H SII with two-stage
motor s peed reduction
device + full-time all-
wheel-drive s ystem
G - BOOK mX
L E D headlight
V alvematic, a next-
generation variable valve
lift mechanism
A ctive Headrest
H eated seat
"C rawl c ontrol" system
Kinetic dynamic s uspension
s ystem (KDSS)
8 - Speed Sport D irect Shift
transmission

I mproved Pre-crash Safery A nti-mite allergen

Sys tem with eye-monitoring s eat fabric
s ystem
E mergency brake s ignal
N avigation-linked Brake Assist
N ight View system with
pedestrian detection function
6 - speed manual transmission for

46

T oyota Stop & Start
Sys tem
Fuel Cell H ybrid Vehicle
(T O YOTA FCHV-adv)
T H SII Plug-in (with
motor s peed reduction
device)
2010
| Sys tem
2012
H orizontally O pposed
D - 4S
2 .5 liter 4 cylinder
inline Atkinson c ycle
engine
front- wheel drive
SRS rear
window c urtain
s hield airbag
I nterior vehicle parts
us ing Ecological Plastic
Front-side P re-crash Safety
Sys tem
P re-crash Seatback
SRS rear-seat E c o-Drive monitor
c enter airbag
T ouch Tracer D isplay
Solar-ventilation s ystem
Remote Air Conditioning
s ystem
H armonious D riving
N avigator
M ulti-terrain Select switch
D SRC Unit
M ulti-terrain Monitor
Self-restoring coat
E SPO system
V ehicle Proximity N otification
Bio-PET-Based New
E c ological Plastic
"Smart G-BOOK" for
s martphone
N ew UV -
bloc king glass
LDH Wrong-way D riving Alert H igh-power L ithium-
(L exus D ynamic H andling s ystem) Sys tem ion Battery
G - Station
D SSS
(D riving Safety Support
Sys tem)
Front wheel drive eight-speed
automatic transmission
P re-collision System effective at L as er s crew A daptive H igh-beam System
high s peeds welding (A HS)
I ntelligent Clearance Sonar
D rive-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)

47
  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)

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.

48
 This was possible because of much focused segmentation, targeting and
positioning of their products.

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.

49
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.

b) ANALYSIS :-

50
 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.

51
 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.

52
 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/

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