Japan / Korea Trip Presentation:

Toyota
Aaron Fyke Yuki Wada
Gary Mi Grace Webber
Tony Palumbo
 Agenda
• Headline facts: Toyota
• Global auto industry trends
• Japanese auto industry history
• Toyota company background
– Company history
– Production history
– Business segments
• The Toyota Production System
• Toyota’s strategy
• Our questions for Toyota
 Headline Facts: Toyota
• Toyota has annual sales of $120 Billion
• Produces ~5.5 million vehicles per year
• From 56 manufacturing plants across
6 continents
• Employs ~200,000 people
• 3rd largest automotive manufacturer
1998 Production Comparison Chart
9,000
GM
8,000
Ford
7,000
6,000 Daimler
5,000 VW Chrysler

4,000 T
O
3,000 Fiat Nissan Honda
Y PSA Renault
2,000 O
T
1,000
A
0
 Global auto industry trends
• Overcapacity
• Economic downturn
• Shifting consumer demands
• European trade barrier reductions
 Company History
• Established in 1937 out of Sakichi Toyoda’s
weaving machine company
• Launched first car (SA Model) in 1947
• “Toyota Production System” formed in 1950
based on Just-In-Time principle
• First global expansion in 1959 at Brazil
• In 1972, cumulative production >10M units
 Production History
Domestic Production Total Production
UNITS (thousands)

6000

5000

4000

3000

2000

1000

0
1935 1936 1937 1940 1957 1960 1972 1980 1982 1988 1996 1999
 Business segments
• Automotive
– Design, manufacture and sales of
passenger cars, recreational vehicles,
SUVs and related parts
• Financial services
– Provisions of loans to car buyers
and car dealers
• Others
– Industrial vehicles (forklifts, etc.)
The Toyota Production System

• Revolutionized manufacturing industry

• At its core is “lean”
– a relentless drive to improve efficiency and
eliminate waste
• Beginnings of TPS were born out of
necessity due to lack of resources in
post-war Japan.
Toyota Production System
Key Main Concepts
• SMED
– Single Minute Exchange of Dies
– Promoted flexibility of production runs
• JIT
– Just In Time manufacturing
– Small batches which reduced inventory
costs, tightened relationship with suppliers
and improved quality control
Toyota Production System
Key Main Concepts
• “5 Whys” Quality
– Asking “Why?” 5 times to locate source of
problems
– Stopping the production line whenever
there are quality problems to ensure they
are not repeated
• Low cost supplier
– Long term supplier relationships
 Toyota’s Strategy
• Increase competitive strength through
advanced technology
– Environmental technology
• fuel consumption, emission, recoverability
– Hybrid vehicles and next generation fuel
cells
– Cost-reduction efforts
• discontinuation, integration of older models
– Increased emphasis on financial services
and information communication system
 Our questions for Toyota
• Current competitive landscape
– Local and global competition (Korea,
Daimler-Chrysler, Ford, GM etc.)
• Future of automobiles
– Development of fuel-cells, integration of
Internet applications and other trends
Japanese auto industry history
• From follower to leader
• From domestic producer to exporter
• Interventionist government