Marketing Strategies & Plans of Toyota
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Marketing Strategies & Plans of Toyota

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Marketing Strategies & Plans of Toyota Marketing Strategies & Plans of Toyota Document Transcript

  • Page | 1 UNIVERSITY OF MUMBAI PROJECT REPORT ON MARKETING STRATEGIES & PLANS OF TOYOTA MOTORS BY MR. JITEN H MENGHANI ROLL NO 32 M.COM. (PART-1) ACADEMIC YEAR 2013-2014 PROJECT GUIDE PROF. MRS N.A. NERURKAR PARLE TILAK VIDYALAYA ASSOCIATION‟S M.L.DAHANUKAR COLLEGE OF COMMERCE DIXIT ROAD, VILE PARLE (EAST) MUMBAI-400 057
  • Page | 2 DECLARATION I, MR. JITEN H MENGHANI OF PARLE TILAK VIDYALAYA ASSOCIATION‟S, M.L.DAHANUKAR COLLEGE OF COMMERCE of M.COM (PART-1) (Semester-2) hereby Declare that I have completed this project on MARKETING STRATEGIES & PLANS OF TOYOTA MOTORS in The Academic year 2013-2014. The information Submitted is true & original to the best of knowledge. ----------------------- (Signature of student) JITEN.H.MENGHANI
  • Page | 3 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 for giving me chance to do this project. I would like thank my Principal, Dr. Madhavi.S.Pethe 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. MRS N.A. NERURKAR 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.
  • Page | 4 Content a) Introduction b) History c) Toyota’s Global Vision d) Toyota’s Mission e) Strategy: Unrelated Diversification (Creation of ‘Toyota Motors’ from ‘Toyota Industries’) f) Analysis g) Toyota Industries: Sales by Business Segment (FY 2012, Consolidated Basis) h) Logo and Branding i) Marketing j) Company strategy k) Principles of Toyota l) Worldwide presence m) Special Feature: Toyota's Efforts in Emerging Markets n) Innovative International Multipurpose Vehicle o) Vehicle Production, Sales and Exports by Region p) Toyota and Ford collaborate to build Hybrid cars q) History of Technological Development from 1990 r) Majority-owned subsidiaries s) SWOT ANALYSIS OF TOYOTA t) Conclusion u) References
  • Page | 5 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.
  • Page | 6 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").
  • Page | 7 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
  • Page | 8 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
  • Page | 9 syndicates with executives accused of blocking Financial Service Agency 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
  • Page | 10 with the assistance of the U.S.National Highway Traffic Safety 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.
  • Page | 11 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
  • Page | 12 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.
  • Page | 13 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.
  • Page | 14 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.
  • Page | 15 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
  • Page | 16 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.
  • Page | 17 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 "Hɔ ng 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.
  • Page | 18 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.
  • Page | 19 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.
  • Page | 20 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).
  • Page | 21 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.
  • Page | 22 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.
  • Page | 23 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.
  • Page | 24 Innovative International Multipurpose Vehicle The IMV specially 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,
  • Page | 25 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.
  • Page | 26 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.
  • Page | 27 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.
  • Page | 28 Vehicle Production, Sales and Exports By Region Production by region Region 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 North America 1,278.4 1,444.0 1,535.1 1,519.3 1,636.9 1,404.8 1,189.1 1,404.0 1,206.1 1,720.6 Latin America 58.1 80.4 138.5 177.9 183.1 194.8 181.5 204.3 195.1 242.8 Europe 466.1 582.5 638.1 808.8 806.5 688.3 507.3 461.7 460.3 461.4 Africa 93.3 108.8 121.1 143.8 145.7 179.2 102.8 123.4 150.8 151.7 Asia 548.4 717.0 1,029.2 1,137.7 1,387.3 1,590.0 1,501.4 2,027.4 2,062.8 2,565.7 Oceania 113.6 109.9 109.2 111.6 148.9 141.4 96.8 119.4 93.7 101.4 Overseas total 2,558.0 3,042.7 3,571.2 3,899.0 4,308.6 4,198.4 3,579.0 4,340.4 4,168.8 5,243.6 Japan 3,520.3 3,680.9 3,789.6 4,194.2 4,226.1 4,012.1 2,792.2 3,282.8 2,760.0 3,492.9 Worldwide total 6,078.3 6,723.7 7,360.9 8,093.2 8,534.7 8,210.5 6,371.3 7,623.3 6,928.8 8,736.5 (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 North America 2,031.3 2,230.3 2,436.1 2,738.3 2,822.2 2,441.8 1,975.4 1,935.5 1,806.9 2,274.6 Latin America 162.1 214.9 270.5 339.4 379.4 370.2 293.6 342.1 333.5 406.6 Europe 851.5 946.9 995.2 1,124.1 1,238.6 1,119.5 886.0 785.8 801.9 817.7 Africa 160.6 206.7 227.2 265.7 313.5 288.1 201.4 197.6 211.9 243.0 Asia 682.4 846.3 1,062.9 1,106.7 1,329.6 1,438.6 1,533.9 1,895.9 1,998.2 2,340.5 Oceania 215.1 232.8 236.9 250.3 275.9 277.7 231.2 249.6 215.9 258.8 Middle East 251.4 270.9 325.3 404.8 482.7 590.1 482.5 554.6 527.5 683.9 Overseas total 4,354.5 4,948.8 5,554.1 6,229.3 6,841.9 6,526.1 5,604.0 5,961.1 5,895.9 7,025.1 Japan 1,715.9 1,758.8 1,713.1 1,692.3 1,587.3 1,470.0 1,375.5 1,566.1 1,201.0 1,692.2 Worldwide total 6,070.4 6,707.6 7,267.3 7,921.6 8,429.3 7,996.1 6,979.6 7,527.3 7,096.9 8,717.3 (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 North America 782.8 813.5 939.6 1,344.7 1,244.1 1,124.2 574.0 628.2 494.7 704.6 Latin America 71.5 95.6 120.2 148.9 178.9 146.4 61.3 106.9 95.6 116.4 Europe 424.6 419.0 360.7 375.1 441.5 420.3 230.4 293.7 343.0 311.9 Africa 58.2 92.0 107.2 130.0 147.0 148.7 67.5 72.4 54.7 64.9 Asia 154.7 156.2 129.8 112.3 151.2 169.1 127.1 184.0 183.0 205.4 Oceania 154.1 164.6 159.2 171.6 175.2 184.2 144.4 165.8 146.3 174.3 Middle East 182.6 202.1 226.5 246.7 328.3 393.4 240.0 288.6 247.7 363.6 Total 1,836.0 1,951.7 2,043.2 2,529.3 2,666.1 2,586.3 1,444.7 1,745.0 1,568.9 1,945.7 (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.
  • Page | 29 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. 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”
  • Page | 30 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 Engine Driving/Braking Suspension Body Electoronics Materials 1990 | 1999 Aluminium crankshaft damper pulley Active Four-Wheel Steering System Cylinder head with laser cladding Super-Strut Suspension Rotary Tri-blade Coupling 5-speed automatic transimission5 Valve Engine Bumper made with Toyota Super Olefin Polymer (TSOP) Magnesium cylinder head cover Air conditioner with new refrigerant Fabric with deodorizing function Front-passenger seat airbag Comprehensive vehicle control system(i-Four) Next-generation lean- burn engine GPS car navigation Head Up Display Back guide monitor with CCD camera Smokeless diesel engine Elecrtonically controlled throttle 6-speed manual transmission Three-way catalyst for a lean-burn engine GPS voice navigation Combustion pressure sensor Diesel oxidation catalyst Plastic fuel tank Three-way palladium catalyst Diesel Smoke Control System (DSCS) Vehicle Stability Control system(VSC) Variable Valve Timing- intelligent (VVT-i) 4-valve direct-injection diesel engine Flex Lock-up System TSOP-5 for interior parts Multi-zone automatic air conditioning UV-reducing door glass Water-repellent door glass Titanium nitride coating Brake Assist GOA Collision- safety body Fuel Cell Electric Vehicle (FCEV) SRS side airbag Seatbelts with force-limiter Direct-injection engine(D-4) Tire pressure warning system Toyota Hybrid System (THS) SRS curtain shield airbag
  • Page | 31 Blind corner monitor Radar cruise control system Navigation shift control Bumper recycling technology Variable Valve Timing Lift-intelligent (VVTL-i) ARS Diesel oxidation catalyst Common-rail direct- injection diesel turbo engine(D-4D) ABS for EBD Electric power steering system Super CVT 2000 | 2009 Dual-stage SRS airbags for the front-passenger seat Smart Key System Diesel Particulate NOx Reduction System (DPNR) Package tray and door trim made out of the kenaf plant Negative ion generator AC100V power outlet Run flat-tires Back guide monitor with voice recognition Electronically Controlled Brake system(ECB) Electric 4-wheel drive system (E-Four) Dual-stage SRS airbags for the driver's seat Retractable Metal Top System Pedestrian- injury-lessening body Bio-plastics Air conditioner with electric heat pump system using CO2 refrigerant New Tire-production method G-BOOK Power back door system SRS knee airbags for driver Toyota Stop & Go System Fuel Cell Hybrid Vehicle (FCHV-4, FCHV-5) Toyota Hybrid System (THS-C, THS-M, THSII) Pre-crash Safety System Fuel Cell Hybrid Vehicle (Toyota FCHV) Pre-crash seatbelt Toyota Intelligent Idling Stop System Dual VVT-i Stoichiometric D-4 Piezoelectric Common- rail Type Direct-injection Diesel Turbo Engine (D- 4D Clean Power) Diesel Hybrid System Intelligent AFS Front and side monitoring Lane-monitoring system Pollen-removal filter Night View system Toyota Eco-plastic Steering-guided clearance sonar Smart Entry and Start System Plasmacluster Ions Intelligent Parking Assist system VDIM 6 Super ECT (6-speed automatic transmission)
  • Page | 32 VDIM with active steering control SRS twin- chamber airbag Lane-keeping assist system Radar cruise contral with low-speed tracking mode S-VSC + Active Control 4WD Integrated Control Active stabilizer suspension system Pre-crash Safety System with millimeter-wave radar and stereo camera fusion system (Pedestrian detection, steering and obstacle-avoidance assist system) D-4S G-BOOK ALPHA HELPNET THS II with monitor speed reduction device THS II with two-stage motor speed reduction device Wide-view front monitor Variable Valve Timing- intelligent Electric (VVT- iE) SRS seat cushion airbag 8 Super ECT(8-speed automatic transimission) Pre-crash Safety System with driver-monitoring system (Millimeter-wave radar type) "Map on Demand" technology to automatically deliver differential map data to car navigation systems Rear-end Pre-crash Safety System (Warning of approaching rear vehicle, Pre-crash Intelligent Headrests) Radar cruise contral with tracking function Intelligent Parking Assist (IPA) system with ultrasonic sensors Oxygen-level conditioner Eco Drive Indicator THSII with two-stage motor speed reduction device + full-time all- wheel-drive system G-BOOK mX LED headlight Valvematic, a next- generation variable valve lift mechanism Active Headrest Heated seat "Crawl control" system Kinetic dynamic suspension system (KDSS) 8-Speed Sport Direct Shift transmission Improved Pre-crash Safery System with eye-monitoring system Anti-mite allergen seat fabric Emergency brake signal Navigation-linked Brake Assist Night View system with pedestrian detection function 6-speed manual transmission for front-wheel drive Toyota Stop & Start System Fuel Cell Hybrid Vehicle (TOYOTA FCHV-adv) SRS rear window curtain shield airbag
  • Page | 33 Interior vehicle parts using Ecological Plastic Front-side Pre-crash Safety System Pre-crash Seatback SRS rear-seat center airbag Eco-Drive monitor Touch Tracer Display Solar-ventilation system Remote Air Conditioning system Harmonious Driving Navigator Multi-terrain Select switch DSRC Unit Multi-terrain Monitor Self-restoring coat ESPO system THSII Plug-in (with motor speed reduction device) 2010 | 2012 Vehicle Proximity Notification System Bio-PET-Based New Ecological Plastic "Smart G-BOOK" for smartphone New UV- blocking glass Horizontally Opposed D-4S LDH (Lexus Dynamic Handling system) Wrong-way Driving Alert System High-power Lithium- ion Battery G-Station DSSS (Driving Safety Support System) 2.5 liter 4 cylinder inline Atkinson cycle engine Front wheel drive eight-speed automatic transmission Pre-collision System effective at high speeds Laser screw welding Adaptive High-beam System (AHS) Intelligent Clearance Sonar Drive-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)  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)
  • Page | 34 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.  This was possible because of much focused segmentation, targeting and positioning of their products.
  • Page | 35 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.
  • Page | 36 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.
  • Page | 37 b) ANALYSIS :-  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.
  • Page | 38 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.
  • Page | 39 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/