Toyota
Toyota Motor Corporation is a Japanese multinational automotive manufacturer headquartered in Toyota City, Aichi, Japan. It was founded by Kiichiro Toyoda and incorporated on August 28, 1937. Toyota is the largest automobile manufacturer in the world, producing about 10 million vehicles per year.
The company was founded as a spinoff of Toyota Industries, a machine maker started by Sakichi Toyoda, Kiichiro's father. Both companies are now part of the Toyota Group, one of the largest conglomerates in the world. While still a department of Toyota Industries, the company developed its first product, the Type A engine, in 1934 and its first passenger car in 1936, the Toyota AA.
In the 1960s, Toyota took advantage of the rapidly growing Japanese economy to sell cars to a growing middle-class, leading to the development of the Toyota Corolla, which became the world's all-time best-selling automobile. The booming economy also funded an international expansion that allowed Toyota to grow into one of the largest automakers in the world, the largest company in Japan and the ninth-largest company in the world by revenue, as of 2020. Toyota was the world's first automobile manufacturer to produce more than 10 million vehicles per year, a record set in 2012, when it also reported the production of its 200 millionth vehicle. By September 2023, total production reached 300 million vehicles.
Toyota was praised for being a leader in the development and sales of more fuel-efficient hybrid electric vehicles, starting with the introduction of the original Toyota Prius in 1997. The company now sells more than 40 hybrid vehicle models around the world. More recently, the company has also been criticized for being slow to adopt all-electric vehicles, instead focusing on the development of hydrogen fuel cell vehicles, like the Toyota Mirai, a technology that is much costlier and has fallen far behind electric batteries in terms of adoption.
, the Toyota Motor Corporation produces vehicles under five brands: Century, Daihatsu, Hino, Lexus and the namesake Toyota. The company also holds a 20% stake in Subaru Corporation, a 5.1% stake in Mazda, a 4.9% stake in Suzuki, a 4.6% stake in Isuzu, a 3.8% stake in Yamaha Motor Corporation, and a 2.8% stake in Panasonic, as well as stakes in vehicle manufacturing joint-ventures in China, the Czech Republic, India and the United States.
Toyota is listed on the London Stock Exchange, Nagoya Stock Exchange, New York Stock Exchange and on the Tokyo Stock Exchange, where its stock is a component of the Nikkei 225 and TOPIX Core30 indices.
History
1920s–1930s
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 the British company Platt Brothers, generating the starting capital for automobile development.Under the direction of the founder's son, Kiichiro Toyoda, Toyoda Automatic Loom Works established an Automobile Division on September 1, 1933, and formally declared its intention to begin manufacturing automobiles on January 29, 1934. A prototype Toyota Type A engine was completed on September 25, 1934, with the company's first prototype sedan, the A1, completed the following May. As Kiichiro had limited experience with automobile production, he initially focused on truck production; the company's first truck, the G1, was completed on August 25, 1935, and debuted on November 21 in Tokyo, becoming the company's first production model. Modeled on a period Ford truck, the G1 sold for ¥2,900, ¥200 cheaper than the Ford truck. A total of 379 G1 trucks were ultimately produced.
In April 1936, Toyoda's first passenger car, the Model AA, was completed. The sales price was ¥3,350, ¥400 cheaper than Ford or GM cars. The company's plant at Kariya was completed in May. In July, the company filled its first export order, with four G1 trucks exported to northeastern China. On September 19, 1936, the Japanese imperial government officially designated Toyota Automatic Loom Works as an automotive manufacturer.
Vehicles were originally sold under the name "Toyoda", from the family name of the company's founder, Kiichirō Toyoda. 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. However, Rizaburo Toyoda, who had married into the family and was not born with that name, preferred "Toyota" because it took eight brush strokes to write in Japanese, was visually simpler, and with a voiceless consonant instead of a voiced one.
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 began trading on August 28, 1937, as the Toyota Motor Company Ltd. Kiichiro's brother-in-law Rizaburo Toyoda was appointed the firm's first president, with Kiichiro as vice-president. Toyota Automatic Loom Works formally transferred automobile manufacturing to the new entity on September 29.
The Japanese government supported the company by preventing foreign competitors Ford and General Motors from importing automobiles into Japan.
At the onset of World War II, Toyota almost exclusively produced standard-sized trucks for the Japanese Army, which paid one-fifth of the price in advance and the remainder in cash upon delivery.
1940s
Japan was heavily damaged in World War II and Toyota's plants, which were used for the war effort, were not spared. On August 14, 1945, one day before the surrender of Japan, Toyota's Koromo Plant was bombed by the Allied forces. After the surrender, the U.S.-led occupying forces banned passenger car production in Japan. However, automakers like Toyota were allowed to begin building trucks for civilian use, in an effort to rebuild the nation's infrastructure. The U.S. military also contracted with Toyota to repair its vehicles.By 1947, there was an emerging global Cold War between the Soviet Union and the U.S., who had been allies in World War II. U.S. priorities shifted from punishing and reforming Japan to ensuring internal political stability, rebuilding the economy, and, to an extent, remilitarizing Japan. Under these new policies, in 1949, Japanese automakers were allowed to resume passenger car production, but at the same time, a new economic stabilization program to control inflation plunged the automotive industry into a serious shortage of funds, while many truck owners defaulted on their loans. Ultimately, the Bank of Japan, the central bank of the country, bailed out the company, with demands that the company institute reforms.
1950s
As the 1950s began, Toyota emerged from its financial crisis a smaller company, closing factories and laying off workers. Meanwhile, the Korean War broke out, and being located so close to the battlefront, the U.S. Army placed an order for 1,000 trucks from Toyota. The order helped to rapidly improve the struggling company's business performance. In 1950, company executives, including Kiichiro's cousin Eiji Toyoda, took a trip to the United States where they trained at the Ford Motor Company and observed the operations of dozens of U.S. manufacturers. The knowledge they gained during the trip, along with what the company learned making looms, gave rise to The Toyota Way and the Toyota Production System that transformed the company into a leader in the manufacturing industry.Toyota started developing its first full-fledged passenger car, the Toyopet Crown, in 1952. Prior to the Crown, Toyota had been outsourcing the design and manufacturing of auto bodies, which were then mounted on truck frames made by Toyota. The project was a major test for Toyota, who would need to build bodies and develop a new chassis that would be comfortable, but still stand up to the muddy, slow, unpaved roads common in Japan at the time. The project had been championed for many years by founder Kiichiro Toyoda, who died suddenly on March 27, 1952. The first prototypes were completed in June 1953 and began extensive testing, before the Crown went on sale in August 1955. The car was met with positive reviews from around the world.
After the introduction of the Crown, Toyota began aggressively expanding into the export market; the company entered Saudi Arabia for the first time in 1955 with Land Cruisers, following an agreement reached with Abdul Latif Jameel ; Toyota also brought Land Cruisers into neighboring Yemen in 1956. In 1958, Toyota established a production facility in Brazil, the company's first outside of Japan.
Toyota entered the United States market in 1958, attempting to sell the Toyopet Crown. The company faced problems almost immediately. The company had to confront for the first time how its name sounded to native speakers of the English language; namely, "Toyota" has the English word "toy" in its first syllable. Toyota Motor Sales, USA's first sales administrator James F. McGraw bluntly told his new Japanese supervisors after joining the company in 1959: "'Toy' sounds like a toy and toys break". The Crown was a flop in the U.S. market, with buyers finding it overpriced and underpowered. In response, exports of the Crown to the United States were suspended in the early 1960s in favor of the Land Cruiser and the Tiara.
After Kiichiro's death, his cousin Eiji Toyoda led the company for the two decades. Eiji helped establish the company's first plant independent from the Loom Works plant.
1960s–1970s
At the start of the 1960s, the Japanese economy was booming, a period that came to be known as the Japanese economic miracle. As the economy grew, so did the income of everyday people, who now could afford to purchase a vehicle. At the same time, the Japanese government heavily invested in improving road infrastructure. To take advantage of the moment, Toyota and other automakers started offering affordable economy cars like the Toyota Corolla, which became the world's all-time best-selling automobile.Toyota also found success in the United States in 1965 with the Toyota Corona compact car, which was redesigned specifically for the American market with a more powerful engine. The Corona helped increase U.S. sales of Toyota vehicles to more than 20,000 units in 1966 and helped the company become the third-best-selling import brand in the United States by 1967. Toyota's first manufacturing investment in the United States came in 1972 when the company struck a deal with Atlas Fabricators, to produce truck beds in Long Beach, in an effort to avoid the 25% "chicken tax" on imported light trucks. By importing the truck as an incomplete chassis cab, the vehicle only faced a 4% tariff. Once in the United States, Atlas would build the truck beds and attach them to the trucks. The partnership was successful and two years later, Toyota purchased Atlas.
In Southeast Asia, Toyota made efforts to establish domestic production in the Philippines and Indonesia in early 1970s. In the Philippines, it partnered with local company Delta Motors Corporation. Toyota assisted Delta Motors with capital procurement and technology transfers. In 1973, Delta Motors commenced operations at a new plant, beginning local production of engine blocks for the Toyota Corona 12R engine and other parts. In Indonesia, Toyota established Toyota Astra Motor as a joint venture with local partner Astra International in 1971, and conducted significant retooling at the PT Gaya Motor assembly plant. The plant began assembling various models, including the Toyota Corona, Toyota Land Cruiser, large trucks, and the Toyota Corolla, with production surpassing 10,000 vehicles by 1973. For both countries, Toyota developed a basic utility vehicle with the local partners to meet local needs and support technology transfers, in response to domestic production policies in Asia. The first prototype of the BUV was completed in January 1975. The BUV was launched as the Toyota Tamaraw in the Philippines in December 1976, and as the Toyota Kijang in June 1977. The vehicle was well received in both countries.
The energy crisis of the 1970s was a major turning point in the American auto industry. Before the crisis, large and heavy vehicles with powerful but inefficient engines were common. But in the years after, consumers started demanding high-quality and fuel-efficient small cars. Domestic automakers, in the midst of their malaise era, struggled to build these cars profitably, but foreign automakers like Toyota were well positioned. This, along with growing anti-Japanese sentiment, prompted the U.S. Congress to consider import restrictions to protect the domestic auto industry.
The 1960s also saw the slight opening of the Japanese auto market to foreign companies. In an effort to strengthen Japan's auto industry ahead of the market opening, Toyota purchased stakes in other Japanese automakers. That included a stake in Hino Motors, a manufacturer of large commercial trucks, buses and diesel engines, along with a 16.8 percent stake in Daihatsu, a manufacturer of kei cars, the smallest highway-legal passenger vehicles sold in Japan. That began what became a long-standing partnership between Toyota and the two companies.