History

Towards the end of the nineteenth century, Sakichi Toyoda invented Japan's first power
loom, revolutionising the country's textile industry. January 1918 saw him create the Toyoda
Spinning and Weaving Company, and with the help of his son, Kiichiro Toyoda, Sakichi
fulfilled his lifelong dream of building an automatic loom in 1924. The establishment of
Toyoda Automatic Loom Works followed in 1926. Kiichiro was also an innovator, and visits
he made to Europe and the USA in the 1920s introduced him to the automotive industry.
With the £100,000 that Sakichi Toyoda received for selling the patent rights of his automatic
loom, Kiichiro laid the foundations of Toyota Motor Corporation, which was established in
1937. One of the greatest legacies left by Kiichiro Toyoda, apart from TMC itself, is the
Toyota Production System. Kiichiro's "just- in-time" philosophy - producing only precise
quantities of already ordered items with the absolute minimum of waste - was a key factor in
the system's development. Progressively, the Toyota Production System began to be adopted
by the automotive industry across the world.

Rising from the ashes of industrial upheaval in post-war Japan, Toyota has become the
largest vehicle manufacturer in Japan with over 40% market share. Toyota began to make
inroads into foreign markets in the late 1950s. The first Crown models arrived in the USA in
1957, and by 1965, with models such as the Corolla, Toyota began to build its reputation and
sales to rival those of domestic producers. The first Toyota imported into Europe was via
Denmark in 1963. Toyota has continued to grow in Europe's sophisticated and complex
market, and in 2000 the company delivered its ten millionth car to a customer in Germany. In
fact, growth is currently one of the main words in Toyota's European vocabulary, and the
company plans to reach annual sales of 800,000 in Europe by 2005. Toyota is number one for
customer satisfaction in the majority of European countries and has built an excellent
reputation across Europe for reliability and customer service. This enviable reputation, along
with the support of a network of more than 25 distributors and 3,500 sales outlets, are
important factors in supporting Toyota's European sales growth in the coming years.
 COMPANY PROFILE FOR TOYOTA CO.
Toyota Motor Corporation (Toyota), incorporated on August 27, 1937, conducts business in
the automotive industry. The Company also conducts business in finance and other industries.
The Company's segments include Automotive, Financial Services and All Other. Toyota sells
its vehicles in approximately 190 countries and regions. Toyota's markets for its automobiles
are Japan, North America, Europe and Asia.
Automotive segment
The Company's Automotive segment includes the design, manufacture, assembly and sale of
passenger vehicles, minivans and commercial vehicles, such as trucks and related parts and
accessories. The Company's subsidiaries include Daihatsu Motor Co., Ltd. (Daihatsu), which
produces and sells mini-vehicles and compact cars, and Hino Motors, Ltd. (Hino), which
produces and sells commercial vehicles, such as trucks and buses. Toyota also manufactures
automotive parts, components and accessories for its own use and for sale to others. Toyota's
vehicles (produced by Toyota, Daihatsu and Hino) are classified into three categories: hybrid
vehicles, conventional engine vehicles and fuel cell vehicles. Toyota's product line-up
includes subcompact and compact cars, mini-vehicles, mid-size, luxury, sports and specialty
cars, recreational and sport-utility vehicles, pickup trucks, minivans, trucks and buses.
Toyota's subcompact and compact cars include the four-door Corolla sedan. The Yaris,
marketed as the Vitz in Japan, is a subcompact car. In Europe, Toyota offers the remodeled
Aygo; in Japan, Toyota offers the remodeled Corolla Axio/Fielder, the remodeled Porte and
its variant, the Spade and the remodeled Auris, and in India, Asia, China and other markets, it
offers Etios and Vios. In addition, Toyota offers the AGYA, which is designed and
manufactured by Daihatsu. Mini-vehicles are manufactured and sold by Daihatsu. Daihatsu
manufactures mini-vehicles, passenger vehicles, commercial vehicles and auto parts. Mini-
vehicles are passenger cars, vans or trucks with engine displacements of approximately 660
cubic centimeters.
Toyota's mid-size models include the Camry, which is the passenger car in the United States.
In addition, Toyota's other mid-size models include the REIZ for the Chinese market, the
Avensis for the European market, and the Mark X for the Japanese market. In North America,
Europe, Japan and other regions, Toyota's luxury lineup consists of vehicles sold under the
Lexus brand name. Lexus passenger car models include the LS, the GS, the ES, the IS, the
HS, the CT and the RC. Lexus models also include the LX, the GX, the RX and the NX sold
as luxury sport-utility vehicles. The Lexus brand lineup in Japan includes the LS, the GS, the
HS, the IS, the CT, the LX, the RX, the NX and the RC. Toyota also sells the Century
limousine in Japan. In the United States, Toyota sells the Scion tC, a sports model for young
drivers. Toyota offers the LFA model under the Lexus brand as the sports model, and the 86
(called Scion FR-S in the United States), a compact sports car with a front-mounted engine
and rear-wheel drive. Toyota offers the RC coupe that leads the image of Lexus, which
engages drivers on a sentimental level.

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.
Company name
President and Representative Director
Toyota Motor Corporation
Akio Toyoda
Head Office
1 Toyota-Cho, Toyota City, Aichi Prefecture 471-8571, Japan
Phone: +81-565-28-2121

Tokyo Head Office

Company address 1-4-18 Koraku, Bunkyo-ku, Tokyo 112-8701, Japan
Phone: +81-3-3817-7111

Nagoya Office
4-7-1 Meieki, Nakamura-ku, Nagoya City, Aichi Prefecture 450-8711, Japan
TPhone: +81-52-552-2111
Establishment August 28, 1937
Capital 397.05 billion yen (as of March 31, 2012)
Fiscal year ended March 2012 (consolidated)
- Net revenues: 18,583.6 billion yen
Business results
- Operating income: 355.6 billion yen
- Net income: 283.5 billion yen
Main business activities Motor vehicle production and sales
Number of employees (consolidated) 325,905 (as of March 31, 2012)
Number of employees (unconsolidated) 69,148 (as of March 31, 2012)
Fiscal year From April 1 to March 31 of the following year
Consolidated subsidiaries: 507
Number of affiliates
Affiliates accounted for under the equity method: 57
 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.
rinciples 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 | 20
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 | 21
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.