global economic i mplications of the t oyota motor c ompany

Global Economic Implications of The Toyota Motor Company

Eric, Charles, Molly, Colby, Gene

Agenda

• Company Overview• Net Revenue / Operating Income• Financial Services Operations• Other Areas of Business• Business In Other Countries• Competition• Product Failure Recovery's• New Technology

Company Overview

• Public Company• Industry– Automotive– Robotics– Financial Services

• Founded: August 28, 1937

• Founder: Kiichiro Toyoda

• Key People– Fujio Cho (Chairman)– Akio Toyoda

(President and CEO)• Employees: 324,747• Divisions– Lexus– Scion

Net Revenue / Operating Income

• Japan– 2010 Domestic sales increase by 11.2% (218,000) to 2.16

million units.– Net Revenues declined 7.9% (966.4 billion) to 11.2 trillion– Cost-reduction efforts / lower fixed costs = $12.3 billion

improvement = (225.2 billion)• North America– Vehicle sales decreased 5.2 % (114,000)to 2.10 million

units.– Net Revenues decreased 8.9 % (552.4 billion) to 5.7

trillion

Financial Services Operations

• OverviewTotal assets: 13.3 trillionNet revenues: 1.2 trillionOperating income: 247.0 billionOperating areas: 33 countries / regionsNumber of customers: About 8.1 milNumber of employees: About 8,000

Toyota Motor Corporation

Overseas Sales Finance

Companies

Toyota Finance Corporation

Toyota Asset Management

Co., Ltd.

Toyota Financial Services

Corporation

Financial Services Operations Organization

Other Areas Of Business

Other Business Operations• Intelligent Transport Systems (ITS) Business

– The planning and development of products and services for ITS. The creation of vehicle-infrastructure cooperative systems that support safe driving.

• Information Technology and Telecommunications Business– Engaged in the planning and commercialization of services that

integrate vehicles and cell phones. Also serving as a sales agency for cellphones provided by KDDI corporation.

• E-TOYOTA Business– Developing e-TOYOTA business operations which offer

additional value to customers by integrating IT services with automobiles.

Other Business Operations 2• Housing Business– Manufacturing luxury houses in Japan.

• Marine Business– Toyota is expanding into the marine business

manufacturing boats and engines.

• Biotechnology and Afforestation Business– Contributing to the creation of a resource recycling society

through its biotechnology and afforestation operations.

Other Business Operations 3

Toyota uses technologies and expertise gained from the automotive operations to operate a variety of businesses.

Business In Other Countries

Business In Other Countries

• Manufacturing and Distributing companies in different countries including:– North America– Latin America– Europe– Africa– Asia (excluding Japan)– Middle East

Business In Other Countries (Shipping)

• Shipping via boat, hauling 8,500 vehicles• Uses NYK Line – Japanese Shipping Company• Expected imports through Newark to

increase by 20% in 2012 compared to 2011• Rebounding from Natural Disasters• United States and Puerto Rico

Business In Other Countries (Advertising)

• Toyota creating two new companies to manage marketing– One for Japan– One for Worldwide

• Stems from reorganization of a global marketing division

• The company spends about $1.2 billion annually on ads

• In 2009, Toyota posted first annual loss in 59 years (during recession)

Competition

Competition on all Fronts• Asia

– Honda– Hyundai– Mitsubishi

• North America– Ford– Chevrolet – Dodge– Chrysler

• Europe – Fiat– BMW– Saab

Hometown Competitor

Category Toyota Toyota

Stripped Toyota Loaded Honda

Honda Stripped

Honda loaded

Small Car Corolla 13330 18880 Civic 13010 21210

Family Sedan Camry 18970 25405 Accord 15880 29886

mini-SUV RAV-4 18975 24287 CR-V 17110 26853

mini-van Sienna 28012 36250 Odyssey 24440 35282

North American Challengers

• Chevrolet– Fuel efficient– Higher safety ratings– Shorter breaking distance

• Ford– Innovative – Clean Running– Pleasing to the eye

Europe

• BMW– Know for higher class– Have a serious following– More expensive

• Mini– Compact– Has a luxury aspect while still comparable

• Fiat

Recovering After Product Failures

Toyota • Faced with big recovery trust

with the product failures

• Did not act early

• Example: Brakes– “brake override system”

Trustworthiness & Recovery

Trust• Gain Trust:

– Take serious actions– Keep issues open in a

positive way– Responding to customers

Recovery• Toyota actions:

– Take full responsibility for mistakes

– Learn from them– When something happens

act immediately

Bonds of Trust

• Maximizing customer satisfaction by strengthening bonds

• Standardizing service quality

• Development of new compact car etios

• Position in market

General Overview

• Toyota focused on customers• Fully investigate• Toyota has grown by quickly responding to market needs• Quality control processes

• Strengthened monitoring function • Strengthening the information gathering function• Increasing the number of technical offices• Human resource development

New Technology

New Technology• Prius

• Safety Technology

• Cabin Electronics

Prius

• Low MPG

• Recyclable batteries

• Solar Technology

Safety Technology

• Controlled Steering

• Heartbeat Monitor

• Pop-up hood/ Airbags

• Headlights

Questions?