Toyota - Automaker Market Leader

BY: Khalid Al-Hedary [email protected]

Automaker Market Leader

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TOYOTA Automaker Market Leader Agenda Leader’s Profile & Facts TOYOTO NETWORK / Distribution Products & Services 2008 Market Share Competitive Information Financial Performance Culture Leadership Strengths Concept TOYOTA Production System Innovation Award Offensive Strategy Defensive Strategy Target Customer Is TOYOTA Market-Based?

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Leader’s Profile & Facts

Toyota Motors is 70-years old, established on August 28, 1937 in Japan. Toyota became the world's largest automaker in the first half of 2008, with sales of more than 4.8 million cars and trucks, compared with 4.54 million vehicles for General Motors Corp TOYOTA ranked 5th of the world's largest corporations in the 2008 Fortune Global 500. TOYOTA ranked 1st of the world's largest automaker corporations in the 2008 Fortune Global 500 1st Overseas production starts in 1959 (Brazil) Has 53 overseas manufacturing companies, in 27 countries/regions. Has 168 distributors sell vehicles in more than 170 countries/regions. 3 Number of employees 316,121

TOYOTO Network / Distribution

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TOYOTO Network / Distribution

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Products & Services 2008 Automobile: Passenger Vehicles, diesel & gasoline engines, car airconditioning compressors, foundry parts, electronics components.

Materials handling equipment: Counterbalanced lift trucks, warehouse trucks, automated storage and retrieval systems, truck mount aerial work platform.

Logistics: Transportation services, logistic planning, operating of disruption centers, collection and delivery of cash and managements of sales proceeds and secure storage.

Textile machinery: Air-jet looms, water-jet looms, ring spinning frames 6

World Automobiles Market

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Market Share & Competitive Information

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U.S Market Share U.S.Market Share - May-08 GM Hyundai 5.6%

Toyota Ford Chrysler Honda Nissan Hyundai BMW Volksw agen

Nissan 7.2% Honda 12%

BMW 2.3% Volksw agen 2.2% Mercedes 1.8% GM 19.3%

Chrysler 10.7% Ford 15.4%

Toyota 18.4%

Mercedes

Source http://www.usnews.com/blogs/flowchart/2008/6/9/how-toyota-could-become-the-us-sales-champ.html

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Competitive Information Automaker Profits Ranking

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2008

15 10

15,042.5 B$

5

Volkswagen

5,639.3 B$

0

Daimler

5,446.3 B$

Honda

5,254.2 B$

BMW

4,278.8 B$

Nissan

4,222.9 B$

Million $ USD Billion

Toyota

-5

15 5.6

5.4

5.2

Toyota 4.3

4.2

1

2.8

1.7

Volkswagen

1.2

Daimler Honda

-2.7

BMW

-10

Nissan

-15

Fiat

-20

Hyundai-Kia

-25

Peugeot

-30

Fiat

2,673.2 B$

Hyundai-Kia

1,722.3 B$

-40

Peugeot

1,211.4 B$

-45

Ford

-2,723.0 B$

GM

-38,732.0 B$

Ford

-35

GM -38.7

Profits Rankings - Fortune Global 500

Source http://money.cnn.com/magazines/fortune/global500/2008/index.html

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TOYOTA Financial Performance Report 2008

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Revenues & Expenditure

Capital Expenditure

Net Revenues 280

300 250

224

200 150

143

161

165

2001

2002

184

Million USD Billion USD

Million USD Billion USD

255 198

100 50 0 2000

2003

2004

2005

2006

2007

18 16 14 12 10 8 6 4 2 0

9

2000

10

11

10

2001

2002

2003

16

16

16

2005

2006

2007

11

2004

Source http://www.toyota.co.jp/en/ir/financial_results/2008/index.html 12

TOYOTA Financial Data 2007 Source TOYOTA website

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CULTURE “A culture of quality people working together with shared Toyota Values to continues improve” Developing and motivating their people to drive excellence throughout the production process Humility, because without this culture, team member will not be willing to accept that the current way is not the best. (ego is barrier for improvement & Change) Continues improvement through elimination of waste Organizing all jobs around human activity in the work place, creating an efficient sequence called standardized work Quality is their top priority. Work aggressively to increase quality by identifying the root causes of defected.

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CULTURE Competitiveness is not about competing with others. It is about improving yourself

TOYOTA CULTURE

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LEADERSHIP

Katsuaki Watanabe President

Fujio Cho Chairman

Since its founding, our company has been aiming to enrich society through car making. making Our goal is to be a "good corporate citizen" constantly winning the trust and respect of the international community. Continuing in the 21st century, we aim for stable long-term growth, growth while striving for harmony with people, society and the environment. Under Toyota's Guiding Principles, we practice openness and fairness in our corporate activities, strive for cleaner and safer car making, and work to make the earth a better place to live. We would like to thank everyone for their

continuing support.

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Strengths Contributing to TOYOTA Leadership TOYOTA Production System is always improving….. “Philosophy of complete elimination of waste”

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Strengths Concept Jidoka – Highlighting of problems

- Quality must be built in during the manufacturing process!

Just-in-Time – Productivity improvement - Making only "what is needed, when it is needed, and in the amount needed!

Producing quality products If a defective part or efficiently through the complete equipment malfunction is elimination of waste on the discovered, the machine production line - In order to deliver concerned automatically a vehicle ordered by a customer as stops, and operators stop quickly as possible, the vehicle is work and correct the problem. efficiently built within the shortest possible period. 18

TPS implementation advantages Make what the customer needs, when it is needed, and in the right amount Minimize inventories Separate machine work from human work and fully utilize both Build quality into the process and prevent errors from happening Reduce lead-times to allow for rapid, flexible scheduling Produce a high mix of low volume products efficiently 19

Innovation Toyota has introduced new ideas & technologies which enable them to lead the innovation among others competitors. Example Hybrid gas-electric vehicles. Advanced Parking Guidance System. Eight-speed automatic transmission. Four-speed electronically controlled automatic with buttons for power and economy shifting. 2005

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AWARDS Toyota Prius: no.1 in J.D. Power and Associates’ customer satisfaction index study. 2008 The all-new Toyota Corolla has been awarded a maximum five-star safety rating for adult occupant protection in the highly regarded Euro NCAP tests 2008

2005

Toyota has achieved the premier position in overall customer satisfaction for the fourth consecutive time, according to the J.D. Power and Associates Germany Customer Satisfaction Index (CSI) Study. 21

Offensive Strategy Toyota aggressively marketed their cars to Americans as being fuelefficient, environmentally friendly, small size and having better build quality than other Brands. In the 1980's they had people tell the story of hitting 100,000 miles in their Toyota while other different cars were died at 80,000 miles. Toyota found that many of their cars were going 200,000 miles. That was a huge marketing success and it didn't even cost much money. (Building a Quality Brand Strategy). Now TOYOTA team is improving by concentrating on being a "green" company that cares about the environment. 2005

Diversity in their products which maximize market share, profitability of the company as all the society sectors (Youth, Men/Women, rich) are being served with products that are under their convenience. 22

Defensive Strategy Overseas production for reducing labor cost. Building a Huge Dealers network overall the world, that’s made their products reachable for all around the world. Built the best system (TOYOTA Production system-TPS) that organizes manufacturing and logistics for their automobile manufacturer, including interaction with suppliers and customers. Their system has proven its effectiveness through the past and present. And Now TPS system being studied & followed by other automakers. After many years of the excellence, TOYOTA brand become known in selling a high quality, low maintenance, reliable and fuel efficient vehicles with widely available spare parts. By the excellent reputation that TOYOTA has built through the past, their cars have got the best resale value. This participates in “Captives Customer” and maximizes customer retention, market share, profitability and maximize Net marketing contribution. 2005

In the past TOYOTA MOTOR COMPANY has lunched “Scion” for youth market, because the younger customer has a greater "lifetime value" to the company. (The younger person has more car purchases in his future than does the older one). 23

Targeted Customers Individuals overall the world SCION - Youth market (16-30) College degree, median income $30,000-$50,000 per year. TOYOTA - Medium class (25 and up), college degree, median income $40,000 and up LEXUS - Toyota's luxury division (35 and up), college degree, median income $65,000 and up.

Companies Manufactories Institutions 24

Is TOYOTA Market-Based? Yes, according to TOYOTA achievements, marketing matrix and customer satisfaction index, TOYOTA is a Market-Based organization.

TOYOTA are constantly in tune with customers’ needs, needs competitors’ strategies, strategies changes in the business climate, and emerging technologies, and they seek ways to continuously improve the solutions they bring to

target customers. This process enables them to move with—and often lead change. 0

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Our evaluation toward TOYOTA is 8 out of 10

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