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Toyota Business Model

Toyota is one of the leading automakers in the world, and its strong brand recognition has assured a significant share of the worldwide market. Such a global position has made it a sustainable long-term business model . Let’s take a look at the Toyota business model .

A brief history of Toyota

The history of Toyota began in the 1920s, as a loom manufacturer founded by Sakichi Toyoda . In little time, Toyoda developed and sold the patent for an automated loom and, after that, decided to enter the automobile industry. The first vehicles were made in the early 1930s, but Toyota Motor Company would be established only in 1937.

The company started by manufacturing compact cars and, later, expanded to other types, such as pickups, SUVs, trucks, and sports cars. Nowadays, Toyota is one of the largest car manufacturers in the world, with more than 10 million vehicles sold annually. The multinational company is headquartered in Japan, but it has operations in 27 countries and sells to more than 170 countries in the world.

Who Owns Toyota

Toyota is a part of Toyota Motor Corporation, which has Takeshi Uchiyamada as the Chairman and Akio Toyoda as the President. Among many subsidiaries, the company has the following divisions: Lexus, Ranz, Scion (which had its activities suspended in February 2016), and Toyota itself.

Toyota’s Mission Statement

Toyota’s mission statement is “ To attract and attain customers with high-valued products and services and the most satisfying ownership experience “.

How Toyota makes money

It is true that 90% of Toyota’s revenue comes from automotive sales, but the company also generates revenue from other operations, such as financial services, investments, and machinery.

• Toyota’s Automotive Business: Most of Toyota’s automobile sales take place in Japan and North America. Its strongest and most profitable brand is Lexus, with more than 10 million sales all over the world;
• Toyota’s Financial Services Business: Its financial services division grows faster, but it still represents only around 6% of Toyota’s business model’s revenue. It focuses on automotive sales financing, credit cards, and others, operating in 30 countries (about 90% of Toyota Motor Corporation markets);
• Toyota’s other business: Toyota holds stakes in other automotive manufacturers, such as Subaru, Isuzu, and Mazda. It also has interests in biotechnology, robotics, aerospace, etc. Lately, the company has been particularly oriented towards developing hybrid electric vehicles and related technology.

Toyota’s Business Model’s Performance

Toyota invests in development, design, production, and after-sales in order to maintain top quality. That has put the brand among the top automotive ones in terms of reliability, quality, and durability.

Speed and dependability

Toyota has managed to reorganize its production flow, by focusing on simplicity, thus increasing the speed of delivery. Now, the company has a just-in-time production system, with a controlled cost structure.

Toyota aims at building a strong foundation at all stages of the supply chain, from development to after-sales. In order to reach that, the company has built close and trustworthy relationships with most of its suppliers, by minimizing the number of suppliers, thus creating a long-term partnership and, this way, achieving cooperation, cost reduction, and quick response to fluctuations and innovations.

Wide range and cost

Toyota’s business model is not based on just one car, instead, it provides a wide range of products to the customers, since the company produces different models for different markets, in a well-established flexible production system. Besides, Toyota has managed to manufacture high-quality vehicles at reasonable prices. The company has tested and implemented several initiatives to reduce its operating costs and focused on local production capacities to meet the customers’ demands.

Toyota’s Business Model Canvas

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Toyota’s Customer Segments

Toyota’s customer segments consist of:

• General worldwide public
• Freight companies

Toyota’s Value Propositions

Regarding Toyota’s value propositions , it can be described as reliable and high-quality cars at a reasonable price.

Toyota’s Channels

Toyota’s channels consist of:

• Service Centers
• Social media

Toyota’s Customer Relationships

Toyota’s customer relationships consist of:

• Delivery time
• Personal assistance
• After-sales

Toyota’s Revenue Streams

Toyota’s revenue streams consist of:

• Sales of products (automobiles, commercial vehicles, and engines)
• Sales of spare parts
• Services of banking
• Financing, leasing
• Commissions
• Sales from non-automotive businesses

Toyota’s Key Resources

Toyota’s key resources consist of:

• Human resources
• Intellectual property

Toyota’s Key Activities

Toyota’s key activities consist of:

• Manufacturing
• Engineering
• Supply chain

Toyota’s Key Partners

Toyota’s key partners consist of:

• Manufacturers of parts and components
• Distributors

Toyota’s Cost Structure

Toyota’s cost structure can be described as lean-oriented, with low-cost operational expenses, which include:

• Manufacturing facilities and operations
• Raw materials and components
• Distribution and logistics
• Staff compensation
• Investments in technology and R&D
• Maintenance
• Marketing and advertising

Toyota’s Competitors

• Ford: Founded in 1903 by Henry Ford, Ford Motor Company is a  multinational automobile manufacturer headquartered in Michigan. With an impressive number of 4.2 million sold units in 2020, it has a revenue of around US$ 136.3 billion;
• Chevrolet: The automobile division of the manufacturer General Motors (GM) was founded in 1911, in Michigan, just like its rival Ford. Chevrolet had around 2.4 million vehicles sold worldwide in 2021;
• Nissan: It is a Japanese multinational automobile manufacturer, based in Yokohama, Japan, and accounts for an impressive number of 4.75 million sold units in 2020, with revenue of around US$ 90.8 billion;
• Honda: Another Japanese multinational automobile manufacturer, Honda is headquartered in Tokyo, Japan, and it is also responsible for designing, manufacturing, and selling motorcycles and power equipment;
• Mercedes-Benz: Headquartered in Stuttgart, Germany, Mercedes-Benz is a luxury and commercial vehicle automotive manufacturer founded in 1926. Although it competes in the luxury segment, Mercedes was has sold over 2.1 million units globally in 2020, making it the largest brand of premium vehicles in the world;
• BMW: Another German luxury and commercial vehicle automotive manufacturer, BMW is headquartered in Munich, Germany, and it is also responsible for designing, manufacturing, and selling motorcycles, which — same as its vehicles — compete in the luxury sector of the market;
• Tesla: Last but not least, Elon Musk’s automotive and clean energy company aims exclusively at electric vehicles — but not just that. It also works with battery energy storage, solar panels, solar roof tiles, and related services. As far as it concerns Toyota, Tesla sold over 930,400 vehicles in the year 2021, and over 295,300 units of Tesla’s Model 3 and Model Y were sold in the first quarter of 2022, according to Tesla itself.

Toyota’s SWOT Analysis

Below, there is a detailed swot analysis of Toyota:

Toyota’s Strengths

• Comfortable and practical: Most of Toyota’s cars are well-equipped, with a spacious trunk and yet greatly comfortable, practical, and with technological interior space;
• Fuel consumption: Toyota’s vehicles usually present very relatively efficient results in terms of fuel consumption;
• Brand reputation: Toyota’s brand is a strong one worldwide.

Toyota’s Weaknesses

• Pricing: When compared to its close competitors, some of Toyota’s vehicle models can be seen as expensive for what they provide to the buyer;
• Conservative models: Toyota’s cars are often considered kind of conservative, usually linked to middle-aged guys.

Toyota’s Opportunities

• Hybrid and electric vehicles: As sustainability rises even further each year, Toyota can keep it going with its hybrid and electric models.

Toyota’s Threats

• Electric vehicle competitors: Tesla and other companies that emphasize their value for sustainability can be a thorn in the side of Toyota in the near future.

-> Read More About Toyota’s SWOT Analysis

Toyota has always followed its “Five Main Principles” since its foundation. They have been revised and, nowadays, the company has a set of values and guidelines that actually guide all of its decisions and operations. Besides, according to its Corporate Governance Report from 2019, Toyota has been focusing on innovative technology, especially in robotics and artificial intelligence, in order to follow any tendencies and to create new mobility services. Moreover, the company has been a leader in environmentally friendly vehicle technologies and has set a goal of killing off carbon dioxide emissions from its automobiles by the year 2050.

As to the challenges Toyota may face, its biggest one should probably remain competition from many well-established brands around the world, particularly because the company competes in all classes of vehicles, all over the globe. That’s why the company is always investing in innovation and in developing new products and tools, in order to keep adapting and anticipating how the automotive industry might change, react accordingly, and avoid losses.

Daniel Pereira

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More From Forbes

Toyota’s radical 3-year plan to redefine the company.

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The LF-30 Electrified concept car points to a future with autonomous driving, wireless charging and ... [+] front door pickup.

In January 2018 at the Consumer Electronics Show, Toyota president Akio Toyoda announced that his firm would shift from being an automaker to become a mobility company. 

And to achieve this goal, Toyota joined forces with SoftBank, which focuses on AI development, to create a next-generation mobility services company called MONET Technologies Corporation boasting investment and cooperative relationships with Uber and Grab among others.

However, Toyota crowning achievement as it slowly morphs into a mobility company will be its highly ambitious Woven City complex to be built at the base of Mt Fuji. This “living laboratory” will include full time residents and researchers who will live in a fully connected ecosystem powered by hydrogen fuel cells while they test and develop technologies such as autonomous driving, robotics, personal mobility and smart homes in a real-world environment.

That all sounds supremely impressive, and it is, make no mistake. But the Toyota Group, which includes Lexus of course, is a car company, and generates its profits from making and selling cars. So while it’s busy spending hundreds of millions of dollars on Woven City, it will still focus the bulk of its energy on making next generation cars and SUVs. And according to Toyota the four main strategies for the next three years are as follows: 1) to expand the number of SUV models; 2) advancing and improving hybrid models; 3) introduction of sports models; and 4) expansion of EV technology.

In the SUV genre, over the next year, Toyota Group will introduce a new Land Cruiser 300, the Corolla Cross, a new Lexus NX, Then, in 2022, the group will launch a new Land Cruiser Prado and a new super luxurious Lexus SUV.

Slated for a September 2021 debut, The Land Cruiser 300 will employ a Toyota New Global Architecture (TNGA) platform and a newly developed 3.5-liter V6 turbo and a 3.3-liter diesel turbo. A planned 3.5-liter V6 hybrid has been put on the back burner until at least 2022, according to one Toyota insider.

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An all-new Lexus NX crossover is expected to land in showrooms in October 2021 featuring slightly larger dimensions and the same TNGA platform as the RAV-4 and Lexus RX. The NX will offer a choice of either a new 2.5-liter hybrid or a 2.4-liter gasoline turbo.A plug-in hybrid version will come out a year later.

In terms of its second hybrid strategy, this phraseology actually refers to six powertrains—gasoline, diesel, hybrid, plug-in hybrid, electric vehicles and hydrogen-powered electric vehicles. From what we’re hearing out of Toyota though, the most effective way to reduce CO2 emissions is not to hybridize everything, but rather to improve the efficiency and emissions of the base gasoline and diesel engines. Toyota will also use its hybrid technology to boost the power of its high performance and racing engines that propel its World Endurance Championship entries, powerplants that have helped it win the famed Le Mans 24 hour race.

That brings us to the third strategy, that of sports cars. The firm will use its more than 24 years of hybrid knowhow—since the original Prius was launched—to build a new wave of sports cars. One example we could see as early as next spring is a next-gen hybrid-powered GT86 coupe. For 2022, we can also expect to see hybrid technology appear on the next Lexus IS F and a 660-hp LS F, a new Corolla Sports GRMN (short for Gazoo Racing Meister of Nurburgring), while in 2023, the Toyota Group is readying a GR Hyper Sports, and Supra GRMN.

While Toyota may have been late to the EV party, it will accelerate its electric efforts in the next few years starting with an EV SUV concept slated to be revealed at this year’s Tokyo Motor Show. It is also expected that Toyota will launch two EVs in the U.S. market this year and one plug-in hybrid. One of the EVs rumored to land in America by December is the C-HR EV, which is currently sold in China.

Toyota plans to sell at least 1 million EVs and fuel cell cars by 2030 with one of those cars being a production version of its radical LF-30 Electrified concept car first seen at the 2019 Tokyo Motor Show. Mirroring many of the technologies we can expect to see in future EVs and hybrids, the LF-30 employs wireless charging technology, in-wheel electric motors, self-parking and front door pickup. This is the future of mobility according to Toyota. And while most of this autonomous EV tech will probably be honed at Woven City, Toyota through its other ventures will remain a car company for the foreseeable future. There’s no doubt about that.

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The Leading Source of Insights On Business Model Strategy & Tech Business Models

The Toyota Business Model In A Nutshell

• Toyota is a Japanese automobile manufacturer founded in 1937 by Kiichiro Toyoda. Toyoda started the company with funding from the sale of his father’s automatic loom technology.
• Toyota makes almost 90% of its revenue through the sale of passenger and commercial vehicles. The company also makes money through its Toyota Financial Services arm, funding automotive loans and credit cards while also leasing vehicles. 
• Toyota earns a small percentage of its total revenue through investments in other car manufacturers and industries such as biotechnology, aerospace, and robotics.

Table of Contents

Toyota origin story

Toyota is a Japanese automobile manufacturer founded in 1937 by Kiichiro Toyoda.

The Toyota story begins almost twenty years before the company was incorporated. In 1918, Kiichiro’s father Sakichi invented the world’s first automatic loom. The loom, which reduced manufacturing defects and increased yields, was later sold to British company Platt Brothers for £100,000.

Sakichi then gave the proceeds to his son to develop automotive technology at Toyota, with the first passenger car dubbed the Model AA created in 1936. During the late 1940s, Toyota was able to benefit from Japan’s alliance with the United States. This would give rise to The Toyota Way management philosophy and Toyota Production System lean manufacturing process, with the latter also inspired by Sakichi’s original loom technology.

Toyota was also quick to profit from the emerging Japanese middle class in the 1960s with the release of the Corolla mid-size passenger sedan. The company experienced a period of rapid growth during this time, exporting large numbers of vehicles to foreign markets where they quickly gained a reputation for reliability, affordability, and fuel efficiency. 

In 1986, Toyota partnered with General Motors to develop a new manufacturing facility in California. Luxury subsidiary Lexus was launched in 1989, with the company’s first hybrid vehicle, the Toyota Prius, launched in 1997. 

Today, Toyota produces vehicles under five different brands: Toyota, Daihatsu, Hino, Lexus, and Ranz. The company also has significant stakes in Mazda, Subaru, Suzuki, Isuzu, and Yamaha, among others. 

Though figures vary from year to year, the Camry, RAV4, and Corolla are often among the top five best-selling car models in the world. More broadly speaking, Toyota sold 9.386 million passenger vehicles during 2020 .

Value Proposition:

• Quality and Reliability: Toyota is renowned for the quality and reliability of its vehicles. Customers trust Toyota for producing cars that are built to last, have minimal issues, and hold their value well.
• Innovation: Toyota continually invests in innovation , offering advanced technology, safety features, and eco-friendly options, including hybrid and electric vehicles like the Prius and Mirai.
• Variety and Range: Toyota provides a wide range of vehicles, from compact cars like the Corolla to trucks like the Tacoma and SUVs like the RAV4. This variety allows them to cater to diverse customer needs .
• Global Presence: Toyota’s global presence ensures that customers worldwide have access to its vehicles and services, providing a sense of reliability and accessibility.

Customer Segments:

• General Consumers: Toyota serves a broad consumer base, from individuals seeking affordable and reliable transportation (e.g., Corolla buyers) to families in need of spacious and safe vehicles (e.g., Sienna minivan) and adventure enthusiasts (e.g., 4Runner and Land Cruiser buyers).
• Commercial and Fleet Customers: Toyota offers commercial vehicles, including trucks and vans, targeting businesses and fleet operators.
• Environmentally Conscious: Customers who prioritize eco-friendliness are attracted to Toyota’s hybrid and electric models, like the Prius and Mirai.
• Luxury Segment: Through its Lexus brand , Toyota caters to luxury-oriented consumers who seek premium vehicles with advanced features and comfort.

Distribution Strategy:

• Global Network: Toyota has a vast global distribution network , including dealerships, authorized service centers, and showrooms, ensuring accessibility to customers worldwide.
• Local Manufacturing: Toyota often adopts a strategy of manufacturing vehicles locally in key markets to reduce costs and meet regional demand effectively.
• Online Presence: Toyota maintains an online presence, allowing customers to explore models, schedule test drives, and even purchase vehicles through their website.
• Collaboration: Toyota collaborates with dealerships and franchise partners to ensure a consistent brand experience across different markets.

Marketing Strategy:

• Quality and Reliability Messaging: Toyota’s marketing often emphasizes the quality, reliability, and longevity of its vehicles, reassuring customers of their investment.
• Safety Focus: Safety features and achievements, such as high crash test ratings and advanced driver-assistance systems, are highlighted in marketing campaigns.
• Innovation Promotion: Toyota showcases its commitment to innovation , whether through hybrid technology, fuel efficiency, or advancements in autonomous driving.
• Community and Environmental Initiatives: Toyota promotes its commitment to sustainability and community engagement, fostering a positive brand image.
• Localized Marketing: Toyota adapts its marketing strategies to suit local cultures and preferences, ensuring relevance in various markets.
• Digital Engagement: The company utilizes digital marketing channels, social media platforms, and online advertising to reach a tech-savvy audience.
• Sponsorships: Toyota engages in sponsorships and partnerships, including sports events, to enhance brand visibility and association.

Toyota revenue generation

Toyota generates the bulk of its revenue through the sale of automotive vehicles, with a smaller percentage coming from its financial services division.

Let’s take a look at these streams in more detail.

Vehicle sales

Approximately 88% of Toyota’s revenue comes from automotive sales .

Automotive sales encompass passenger vehicles, minivans, and commercial vehicles such as trucks, buses, and forklifts. Vehicle sales are segmented into distinct business units based on brand and geographic region. Luxury brand Lexus is considered one of the most profitable.

Toyota also manufactures and sells automotive parts, components, and accessories to other car manufacturers. 

Financial services division

Toyota Financial Services is a subsidiary that finances automotive loans, credit cards, and other services such as vehicle leasing.

Revenue from this subsidiary was 7.9% for the 2021 financial year. 

Other services

The remainder of Toyota’s revenue , approximately 4%, comes from other services. 

This includes investments the company has made in the housing, telecommunications, biotechnology, aerospace, and robotics industries. It also includes the aforementioned stakes Toyota has taken in competing automotive companies.

Key Highlights

• Company Origins : Toyota, founded in 1937 by Kiichiro Toyoda, originated from the invention of the world’s first automatic loom by Kiichiro’s father, Sakichi Toyoda.
• Vehicle Sales : The bulk of Toyota’s revenue (approximately 88%) is derived from the sale of passenger and commercial vehicles, including automotive parts.
• Financial Services : Toyota Financial Services, a subsidiary, generates revenue by financing automotive loans, credit cards, and vehicle leasing (approximately 7.9%).
• Other Services : The company also earns a portion of its revenue (approximately 4%) through investments in various industries and stakes in other automotive manufacturers.
• Toyota’s journey began with the creation of its first passenger car, the Model AA, in 1936.
• Toyota benefited from Japan’s alliance with the United States in the late 1940s, leading to the development of The Toyota Way management philosophy and Toyota Production System lean manufacturing process.
• In the 1960s, Toyota capitalized on the emerging Japanese middle class with the release of the Corolla, experiencing rapid growth and international success.
• Partnerships with General Motors, the launch of the luxury brand Lexus, and the introduction of the Toyota Prius hybrid marked key milestones in the company’s history.
• Quality and Reliability : Toyota is known for producing durable, reliable vehicles that hold their value well.
• Innovation : The company invests in technology, safety features, and eco-friendly options, including hybrids and electric vehicles.
• Variety and Range : Toyota offers a diverse range of vehicles to cater to a wide array of customer needs .
• Global Presence : Toyota’s global network ensures accessibility and reliability for customers worldwide.
• General Consumers : Toyota serves individuals, families, and adventure enthusiasts with a variety of models.
• Commercial and Fleet Customers : The company offers commercial vehicles targeting businesses and fleets.
• Environmentally Conscious : Toyota’s hybrid and electric models appeal to eco-friendly consumers.
• Luxury Segment : Through Lexus, Toyota caters to luxury-oriented consumers.
• Global Network : Toyota has an extensive global distribution network , including dealerships and service centers.
• Local Manufacturing : The company often manufactures vehicles locally to meet regional demand effectively.
• Online Presence : Toyota maintains an online presence for vehicle exploration, test drives, and online purchasing.
• Collaboration : Toyota collaborates with dealerships and franchise partners for consistent brand experiences.
• Quality and Reliability Messaging : Marketing emphasizes the quality and reliability of Toyota vehicles.
• Safety Focus : Safety features and achievements are highlighted, including high crash test ratings and advanced driver-assistance systems.
• Innovation Promotion : Commitment to innovation , fuel efficiency, and hybrid technology is showcased.
• Community and Environmental Initiatives : Toyota promotes sustainability and community engagement.
• Localized Marketing : Strategies are adapted to suit local cultures and preferences.
• Digital Engagement : Utilizes digital marketing channels and online advertising.
• Sponsorships : Engages in sponsorships and partnerships to enhance brand visibility.

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• 75-Year History TOP
•  >  A 75-Year History through Data
•  >  Management and Company Information
•  >  Management and Finances
•  >  Management
•  > Business Objectives
• Business Objectives

The adoption and revision of the business objectives specified in the company's Articles of Incorporation are described in order. The business objectives of Toyota Motor Sales Co., Ltd. are also listed from 1950 until its merger with Toyota Motor Co., Ltd. in 1982.

Toyota Motor Co., Ltd.

Adopted august 27, 1937, revised may 8, 1940, revised november 27, 1945, revised november 15, 1949, revised november 27, 1951, toyota motor sales co., ltd., adopted april 3, 1950, revised january 29, 1975, revised june 27, 1980, toyota motor corporation, revised july 1, 1982, revised september 26, 1990, revised june 25, 1998, revised june 23, 2009.

• Changes and Innovations
• Organizational Changes
• List of Executives
• Past Chairmen, Vice Chairmen, and Presidents (including National Honors and Decorations)
• Changes in Balance Sheets
• Changes in Income
• Changes in Shareholders' Equity
• Changes in Large Shareholders
• Changes in R&D Expenditures
• Automotive Organizations
• Economic Organizations
• Personnel Systems
• Developments in Education
• Training Facilities
• Changes in the Number of Employees
• Human Relations Activities: HUREAI Activities
• Human Relations Activities: Toyota Clubs
• Types of Facilities
• Dormitories and Company Housing
• Toyota Memorial Hospital, Toyota Motor Health Insurance Society, and Toyota Motor Pension Fund
• Joint Declaration of Labor and Management-Signed Declaration
• Past Officers and Union Membership
• Information Systems
• Quality Assurance Activities
• Customer Relations Activities
• Chronology of Environmental Initiatives by Field
• Environment
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Toyota’s Operations Management, 10 Critical Decisions, Productivity

Toyota Motor Corporation’s operations management (OM) covers the 10 decisions for effective and efficient operations. With the global scale of its automobile business and facilities around the world, the company uses a wide set of strategies for the 10 critical decisions of operations management. These strategies account for local and regional automotive market conditions, including the trends examined in the PESTLE analysis (PESTEL analysis) of Toyota . The automaker is an example of successful multinational operations management. These 10 decisions indicate the different areas of the business that require strategic approaches. Toyota also succeeds in emphasizing productivity in all the 10 decisions of operations management.

Toyota’s approaches for the 10 strategic decisions of operations management show the importance of coordinated efforts for ensuring streamlined operations and high productivity in international business. Successful operations management leads to high productivity, which supports competitive advantages over other automakers, such as Ford , General Motors , Tesla , BMW , and Hyundai. Nonetheless, these competitors continuously enhance their operations and create challenges to Toyota’s competitive advantages.

Toyota’s Operations Management, 10 Critical Decision Areas

1. Design of Goods and Services . Toyota addresses this strategic decision area of operations management through technological advancement and quality. The company uses its R&D investments to ensure advanced features in its products. Toyota’s mission statement and vision statement provide a basis for the types and characteristics of these products. Moreover, the automaker accounts for the needs and qualities of dealership personnel in designing after-sales services. Despite its limited influence on dealership employment, Toyota’s policies and guidelines ensure the alignment between dealerships and this area of the company’s operations management.

2. Quality Management . To maximize quality, the company uses its Toyota Production System (TPS). Quality is one of the key factors in TPS. Also, the firm addresses this strategic decision area of operations management through continuous improvement, which is covered in The Toyota Way, a set of management principles. These principles and TPS lead to high-quality processes and outputs, which enable innovation capabilities and other strengths shown in the SWOT analysis of Toyota . In this regard, quality is a critical success factor in the automotive company’s operations.

3. Process and Capacity Design . For this strategic decision area of operations management, Toyota uses lean manufacturing, which is also embodied in TPS. The company emphasizes waste minimization to maximize process efficiency and capacity utilization. Lean manufacturing helps minimize costs and supports business growth, which are objectives of Toyota’s generic strategy for competitive advantage and intensive strategies for growth . Thus, the car manufacturer supports business efficiency and cost-effectiveness in its process and capacity design. Cost-effective processes support the competitive selling prices that the company uses for most of its automobiles.

4. Location Strategy . Toyota uses global, regional, and local location strategies. For example, the company has dealerships and localized manufacturing plants in the United States, China, Thailand, and other countries. The firm also has regional facilities and offices.  Toyota’s marketing mix (4Ps) influences the preferred locations for dealerships. The automaker addresses this strategic decision area of operations management through a mixed set of strategies.

5. Layout Design and Strategy . Layout design in Toyota’s manufacturing plants highlights the application of lean manufacturing principles. In this critical decision area, the company’s operations managers aim for maximum efficiency of workflow. On the other hand, dealership layout design satisfies the company’s standards but also includes decisions from dealership personnel.

6. Job Design and Human Resources . The company applies The Toyota Way and TPS for this strategic decision area of operations management. The firm emphasizes respect for all people in The Toyota Way, and this is integrated in HR programs and policies. These programs and policies align with Toyota’s organizational culture (business culture) . Also, the company has training programs based on TPS to ensure lean manufacturing practice. Moreover, Toyota’s company structure (business structure) affects this area of operations management. For example, the types and characteristics of jobs are specific to the organizational division, which can have human resource requirements different from those of other divisions.

7. Supply Chain Management . Toyota applies lean manufacturing for supply chain management. In this strategic decision area of operations management, the company uses automation systems for real-time adjustments in supply chain activity. In this way, the automotive business minimizes the bullwhip effect in its supply chain. It is worth noting that this area of operations management is subject to the bargaining power of suppliers. Even though the Five Forces analysis of Toyota indicates that suppliers have limited power, this power can still affect the automotive company’s productivity and operational effectiveness.

8. Inventory Management . In addressing this strategic decision area of operations management, Toyota minimizes inventory levels through just-in-time inventory management. The aim is to minimize inventory size and its corresponding cost. This inventory management approach is covered in the guidelines of TPS.

9. Scheduling . Toyota follows lean manufacturing principles in its scheduling. The company’s goal for this critical decision area of operations management is to minimize operating costs. Cost-minimization is maintained through HR and resource scheduling that changes according to market conditions.

10. Maintenance . Toyota operates a network of strategically located facilities to support its global business. The company also has a global HR network that supports flexibility and business resilience. In this strategic decision area of operations management, the company uses the global extent of its automotive business reach to ensure optimal and stable productivity. Effective maintenance of assets and business processes optimizes efficiency for Toyota’s sustainability and related CSR and ESG goals .

Productivity at Toyota

Toyota’s operations management uses productivity measures or criteria based on business process, personnel, area of business, and other variables. Some of these productivity measures are as follows:

• Number of product units per time (manufacturing plant productivity)
• Revenues per dealership (dealership productivity)
• Number of batch cycles per time (supply chain productivity)
• Cannas, V. G., Ciano, M. P., Saltalamacchia, M., & Secchi, R. (2023). Artificial intelligence in supply chain and operations management: A multiple case study research. International Journal of Production Research , 1-28.
• Jin, T. (2023). Bridging reliability and operations management for superior system availability: Challenges and opportunities. Frontiers of Engineering Management , 1-15.
• Toyota Motor Corporation – Form 20-F .
• Toyota Motor Corporation – R&D Centers .
• Toyota Production System .
• U.S. Department of Commerce – International Trade Administration – Automotive Industry .
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Toyota Business Model: Revolutionizing The Automotive World

The Toyota business model represents a paradigm shift in the automotive industry. Toyota has managed to build an empire by combining efficiency, quality, and innovation while putting customers at the center of its operations.

Toyota’s Core Values and Principles

Lean manufacturing: eliminating waste, just-in-time (jit) production system, total quality management (tqm), customer-centric approach, embracing innovation, collaborative supplier relationships, toyota production system (tps), sustainability and environmental responsibility, global expansion and localization, continuous learning and adaptation, toyota’s key achievements, toyota’s innovative technologies, toyota’s commitment to social responsibility, future outlook for toyota, toyota’s global impact, toyota’s competitive advantage, lessons from toyota’s business model, toyota’s commitment to safety, toyota’s vision for sustainable mobility, the toyota way: a guiding philosophy.

Let’s take a closer look at the key elements that make up Toyota’s business model.

At the core of Toyota’s business model is the “Toyota Way.” This guiding philosophy encompasses two main pillars: continuous improvement (kaizen) and respect for people.

Toyota believes in fostering a culture of learning, innovation, and respect among its employees, which ultimately translates into superior products and services.

One of the cornerstones of the Toyota business model is lean manufacturing. By eliminating waste and optimizing production processes, Toyota has been able to achieve remarkable efficiency.

The company focuses on value creation, minimizing defects, and streamlining operations to deliver high-quality vehicles at competitive prices.

Toyota’s just-in-time (JIT) production system is another critical component of its business model. By closely managing inventory levels and production schedules, Toyota reduces waste and ensures efficient resource utilization.

JIT enables Toyota to respond quickly to market demands, avoid excess inventory, and maintain a lean and agile operation.

Toyota’s commitment to quality sets it apart from its competitors. The company adheres to a rigorous Total Quality Management (TQM) approach, which emphasizes continuous improvement, error prevention, and customer satisfaction.

TQM is deeply ingrained in Toyota’s organizational culture and extends to every aspect of the business, from design and manufacturing to sales and after-sales service.

Toyota’s success can be attributed in large part to its relentless focus on customers. The company strives to understand customer needs and preferences, actively engaging with them to gather feedback and insights.

This customer-centric approach enables Toyota to design and deliver vehicles that exceed expectations, fostering long-term loyalty and driving sustainable growth.

Innovation has been a driving force behind Toyota’s business model. The company has consistently invested in research and development to pioneer groundbreaking technologies and sustainable mobility solutions.

From hybrid and electric vehicles to autonomous driving systems, Toyota continues to push the boundaries of innovation, shaping the future of the automotive industry.

Toyota recognizes the importance of strong relationships with its suppliers. The company fosters collaborative partnerships based on mutual trust, shared goals, and continuous improvement.

Toyota works closely with suppliers to ensure a steady supply of high-quality components, promote innovation, and enhance overall efficiency across the value chain.

The Toyota Production System (TPS) is a comprehensive approach to manufacturing that integrates various principles and practices. TPS emphasizes waste reduction, standardized processes, continuous improvement, and employee empowerment.

This system enables Toyota to achieve exceptional productivity, quality, and flexibility in its manufacturing operations.

Toyota is committed to sustainable practices and environmental responsibility. The company actively pursues initiatives to reduce carbon emissions, conserve resources, and promote eco-friendly mobility solutions.

Toyota’s business model aligns with its vision of creating a more sustainable future, making it a leader in the global drive toward cleaner and greener transportation.

Toyota’s business model extends beyond its home market of Japan. The company has successfully expanded its operations worldwide, establishing manufacturing plants, research facilities, and distribution networks in key markets.

Toyota’s strategy combines global scale with local adaptation, allowing it to cater to diverse customer preferences and effectively compete in different regions.

A notable aspect of Toyota’s business model is its commitment to continuous learning and adaptation. The company encourages a culture of innovation, where employees are empowered to identify opportunities for improvement and drive change.

Toyota’s ability to adapt to evolving market conditions and customer demands has been instrumental in its sustained success.

Toyota’s business model has led to several notable achievements in the automotive industry. Here are some of the key accomplishments:

• Top-Selling Automaker: Toyota consistently ranks among the top-selling automakers worldwide, demonstrating the success of its business model and the popularity of its vehicles;
• Leadership in Hybrid Technology: Toyota’s introduction of the Prius, the world’s first mass-produced hybrid vehicle, established the company as a pioneer in eco-friendly mobility solutions. Toyota continues to lead the hybrid market with a diverse lineup of hybrid models;
• Continuous Quality Recognition: Toyota’s commitment to quality has been recognized through numerous awards and accolades. The company consistently ranks high in reliability and customer satisfaction surveys, further solidifying its reputation for producing dependable vehicles;
• Lean Manufacturing Benchmark: Toyota’s lean manufacturing practices and the Toyota Production System (TPS) have become a benchmark for other industries seeking to improve operational efficiency and reduce waste.

Toyota’s commitment to innovation has resulted in the development of cutting-edge technologies. Here are some of the innovative technologies pioneered by Toyota:

• Hybrid Powertrains: Toyota’s Hybrid Synergy Drive technology revolutionized the automotive industry by combining the power of an internal combustion engine with the efficiency of electric motors. Hybrid vehicles offer reduced emissions and improved fuel efficiency;
• Fuel Cell Vehicles: Toyota has been at the forefront of fuel cell vehicle development with models like the Toyota Mirai. Fuel cell vehicles use hydrogen as a fuel source, emitting only water vapor and offering long-range capabilities;
• Autonomous Driving: Toyota is actively investing in autonomous driving technology to enhance safety and convenience. Through advanced sensors, artificial intelligence, and extensive testing, Toyota aims to bring self-driving vehicles to the market;
• Connected Cars: Toyota is leveraging the power of connectivity to create a seamless driving experience. Connected cars enable real-time data exchange, enhanced navigation systems, and remote vehicle management capabilities.

Toyota places a strong emphasis on corporate social responsibility. Here are some of the initiatives and commitments undertaken by the company:

• Environmental Sustainability: Toyota is dedicated to reducing its environmental impact. The company aims to achieve carbon neutrality by 2050 and has implemented various initiatives to promote recycling, reduce emissions, and conserve resources;
• Community Engagement: Toyota actively engages with local communities through initiatives focused on education, environmental conservation, and social welfare. The company strives to be a responsible corporate citizen wherever it operates;
• Diversity and Inclusion: Toyota promotes diversity and inclusion within its workforce, fostering an environment that values different perspectives and backgrounds. The company recognizes that diverse teams lead to better innovation and decision-making;
• Safety Initiatives: Toyota prioritizes safety by continuously improving vehicle technologies and promoting safe driving practices. The company actively collaborates with organizations and stakeholders to enhance road safety worldwide.

Toyota’s business model positions the company for continued success in the future. Here are some areas where Toyota is focusing its efforts:

• Electrification: Toyota is expanding its lineup of electric vehicles (EVs) to meet the growing demand for emission-free transportation. The company aims to offer a diverse range of EVs to cater to different customer needs and preferences;
• Mobility as a Service (MaaS): Toyota is exploring new mobility solutions beyond traditional car ownership. By embracing MaaS, the company envisions a future where customers have access to a range of mobility options, including ride-sharing, car-sharing, and multimodal transportation;
• Artificial Intelligence and Robotics: Toyota is investing in AI and robotics to develop advanced driver-assistance systems and autonomous driving technologies. The company aims to enhance safety, improve traffic flow, and provide a more seamless and enjoyable driving experience;
• Smart Cities and Sustainable Mobility: Toyota envisions a future where vehicles are integrated into smart cities, enabling efficient transportation systems and reducing congestion. The company is actively involved in collaborative projects that explore sustainable mobility solutions and urban planning.

Toyota’s business model has not only influenced the automotive industry but has also had a significant global impact. Here are three key aspects of Toyota’s global influence:

• Job Creation and Economic Growth: As one of the largest automakers in the world, Toyota’s operations have created employment opportunities in various countries. The company’s manufacturing plants, research centers, and dealership networks contribute to local economies, fostering economic growth and development;
• Supply Chain Integration: Toyota’s global presence has led to the integration of suppliers and business partners across different regions. By collaborating with local suppliers, Toyota has played a vital role in developing and strengthening supply chains worldwide, benefiting both local businesses and the global economy;
• Technological Advancements : Toyota’s commitment to innovation and research and development has resulted in technological advancements that extend beyond the automotive industry. Many of Toyota’s breakthroughs in areas such as hybrid technology, fuel cell technology, and robotics have broader applications, influencing other sectors and contributing to technological progress on a global scale.

Toyota’s business model has provided the company with a competitive advantage in the automotive industry. Here are three key factors that contribute to Toyota’s strong market position:

• Quality and Reliability: Toyota’s relentless focus on quality has earned the company a reputation for producing reliable vehicles. The high-quality standards set by Toyota give it a competitive edge, attracting customers who value durability and dependability in their vehicles;
• Operational Efficiency : Toyota’s lean manufacturing practices and the Toyota Production System (TPS) have enabled the company to achieve exceptional operational efficiency. By minimizing waste, streamlining processes, and optimizing resource utilization, Toyota can offer competitive pricing while maintaining profitability;
• Strong Brand and Customer Loyalty: Toyota has cultivated a strong brand image globally, associated with attributes such as reliability, innovation, and customer satisfaction. The company’s commitment to understanding customer needs and delivering vehicles that exceed expectations has resulted in a loyal customer base, further enhancing Toyota’s competitive advantage.

Toyota’s business model provides valuable lessons for businesses across industries. Here are three key takeaways:

• Continuous Improvement: Toyota’s emphasis on continuous improvement and the pursuit of excellence is a lesson for all businesses. By fostering a culture of innovation, learning, and adaptability, companies can stay ahead of the competition and drive long-term success;
• Customer-Centric Approach: Placing customers at the center of business operations is crucial for sustainable growth. Toyota’s commitment to understanding customer needs, engaging in feedback, and delivering exceptional value has resulted in customer loyalty and market leadership;
• Efficiency and Waste Reduction: Toyota’s lean manufacturing principles demonstrate the importance of efficiency and waste reduction in achieving operational excellence. Businesses can benefit from evaluating their processes, identifying areas of waste, and implementing strategies to optimize efficiency and resource utilization.

Safety has always been a top priority for Toyota. The company’s business model reflects its unwavering commitment to ensuring the safety of drivers, passengers, and pedestrians. Here are two key aspects of Toyota’s commitment to safety:

• Advanced Safety Technologies: Toyota invests heavily in research and development to advance safety technologies in its vehicles. From active safety features like collision avoidance systems and lane departure warning to passive safety features like advanced airbag systems and reinforced vehicle structures, Toyota integrates cutting-edge technologies to enhance vehicle safety and protect occupants in the event of an accident;
• Safety Education and Advocacy: Toyota goes beyond the development of safe vehicles by actively promoting safety education and advocacy. The company conducts extensive safety research, collaborates with organizations and institutions to raise awareness about safe driving practices, and supports initiatives that aim to reduce road accidents and fatalities. Toyota’s commitment to safety extends to all road users, with a focus on fostering a culture of responsible driving.

Toyota’s business model aligns with its vision for sustainable mobility. The company recognizes the global challenges posed by climate change, urbanization, and resource scarcity and aims to address them through its business practices. Here are two key elements of Toyota’s vision for sustainable mobility:

• Electrification and Alternative Fuels: Toyota is actively pursuing the development of electric vehicles (EVs) and exploring alternative fuel options to reduce dependence on fossil fuels and lower greenhouse gas emissions. Through its Toyota Environmental Challenge 2050, the company aims to achieve zero CO2 emissions from its vehicles and operations;
• Mobility Solutions for the Future: Toyota envisions a future where mobility is not limited to individual car ownership but encompasses a range of integrated solutions. The company is investing in initiatives such as connected cars, shared mobility services, and smart city integration to create a more efficient, convenient, and sustainable transportation ecosystem. As innovations emerge, owners may seek options to sell or trade in used Toyota models in any condition for fair cash offers through specialized services. By embracing buyback solutions like cash for Toyota in any condition , outdated vehicles can exit circulation sustainably. This allows consumers to upgrade while ensuring responsible recycling under Toyota’s vision for maximized ecology. By embracing these solutions, Toyota aims to contribute to reduced traffic congestion, improved air quality, and enhanced overall mobility experiences.

The Toyota business model has redefined the automotive industry, setting new standards for operational excellence, quality, and customer satisfaction. Through its principles of continuous improvement, lean manufacturing, customer-centricity, and innovation, Toyota has achieved remarkable success on a global scale.

As the industry continues to evolve, Toyota remains at the forefront, shaping the future of mobility.

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Toyota Texas to Expand and Add More Than 400 New Jobs

$531 million investment boosts plant’s capabilities; reinforces commitment to stable employment

SAN ANTONIO (June 21, 2024 ) –Toyota Texas is expanding its footprint with a $531 million investment bringing more than 400 new, high-quality jobs to San Antonio. The new on-site 500,000-square-foot facility will be dedicated to drivetrain parts production, further affirming Toyota’s commitment to reinvesting profits in its U.S. operations.

“Our team members are ready for this new opportunity to grow our plant’s capabilities and workforce,” said Susann Kazunas, Toyota Texas president. “They are highly capable, innovative and have a steadfast commitment to our products. We are proud to celebrate that spirit and the long-term job stability the investment represents, and we are excited to welcome 400 new team members to Toyota Texas.”

For nearly two decades, Toyota Texas has rolled out top-quality trucks and SUVs with more than 181,000 vehicles assembled last year. Toyota’s total investment in the plant has grown to more than $4.7 billion.

“Texas is proud to be the home of a global powerhouse like Toyota,” said Texas Governor Greg Abbott. “For more than two decades, Texas has been home to Toyota manufacturing. Toyota Texas’ new $531 million investment to expand their manufacturing facility in San Antonio that will create over 400 good-paying jobs is a testament to Texas’ unmatched business-friendly environment, low taxes and young, growing and skilled workforce. I thank Toyota for their continued expansion in Texas, and I look forward to strengthening our partnership as we build a bigger, better Texas for generations to come.”

$531 million investment brings more than 400 high-quality jobs and a new facility to Toyota Texas.

“This is an incredible victory for both the City of San Antonio and Toyota Texas,” said San Antonio Mayor, Ron Nirenberg. “Over 400 stable, high-quality jobs will be created in our community, demonstrating Toyota’s willingness to continue to invest in the people of San Antonio. We are extremely proud of this corporate partnership, and I look forward to all the great things that San Antonio and Toyota Texas will continue to build together.”

This investment also reinforces the plant’s flexibility with advanced manufacturing technologies as the company expands its diverse capabilities across its North American operations.

“It is exciting to see Toyota expand its footprint in Southern Bexar County. I look forward to the hundreds of new jobs and boost to our local economy, especially for the area school districts,” said Bexar County Judge, Peter Sakai. “Toyota has been a loyal and dedicated community partner for two decades, and this initiative shows the confidence one of the world’s leading companies has in Bexar County’s future.”

Team members help drive Toyota Texas forward.

“Job stability, growth and competitive pay are all reasons I found a passion for assembling trucks at Toyota,” said Christopher Rivera, Toyota Texas team leader. “During my 17-year career with Toyota, I have seen firsthand Toyota’s commitment to our team. It is exciting to help bring new capabilities to our plant.”

Toyota Texas is the exclusive home to the Tundra truck and all-hybrid Sequoia SUV, both assembled on the same production line.

Toyota Texas is hiring. To learn more, visit toyotatracktexas.com .

Additional quotes available for media use 

U.S. Senator Ted Cruz  “Texas is the best state in the nation for jobs and opportunity, and Toyota’s massive investment in the San Antonio area is further proof that if you want to do business in the United States, the Lone Star State is the place to be. This $531 million investment will bring over 400 incredible new jobs to San Antonio, and further support Toyota’s flourishing production and manufacturing in the U.S. This is a great move by Toyota, and an incredible win for the entire San Antonio region and Texas.”

U.S. Congressman Tony Gonzales  “Toyota’s expansion in San Antonio is a great achievement that will create hundreds of new jobs and spur manufacturing capabilities in South Texas,” said Congressman Tony Gonzales. “I look forward to continue working alongside Toyota to support innovation in the automotive industry.”

State Representative John Lujan  “As a proud Texas State Representative, I am delighted to see Toyota’s significant investment in our community. Investing in local infrastructure and workforce development, Toyota contributes to the overall well-being of the community. This kind of commitment fosters long-term relationships and enhances Toyota’s reputation as a responsible corporate citizen.  This expansion brings valuable jobs and underscores Bexar County’s growing reputation as a hub for advanced manufacturing and innovation,” said Rep. John Lujan.

Jenna Saucedo-Herrera, President & CEO, greater:SATX  “greater:SATX is proud to have supported Toyota Motor Manufacturing, TX Inc. (Toyota Texas) with their latest investment in our San Antonio region and we remain steadfast in our commitment to continue supporting their continued growth. Toyota Texas will invest more than $500M and create 400 new jobs for San Antonians, in addition to the more than 3,700 current direct employees and 5,600 employed by Toyota Texas’ on-site suppliers. With investments of this size and scale, particularly within the advanced manufacturing industry, we expect a significant ripple effect of additional jobs and economic impact to our region.”

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About Toyota   Toyota (NYSE:TM) has been a part of the cultural fabric in the U.S. for more than 65 years, and is committed to advancing sustainable, next-generation mobility through our Toyota and Lexus brands, plus our nearly 1,500 dealerships.

Toyota directly employs more than 49,000 people in the U.S. who have contributed to the design, engineering, and assembly of more than 34 million cars and trucks at our nine manufacturing plants. By 2025, Toyota’s 10th plant in North Carolina will begin to manufacture automotive batteries for electrified vehicles. With more electrified vehicles on the road than any other automaker, Toyota currently offers 29 electrified options.

To help inspire the next generation for a career in STEM-based fields, including mobility, Toyota launched its virtual education hub at www.TourToyota.com with an immersive experience and chance to virtually visit many of our U.S. manufacturing facilities. The hub also includes a series of free STEM-based lessons and curriculum through Toyota USA Foundation partners, virtual field trips and more.

For more information about Toyota, visit www.ToyotaNewsroom.com .

Melinda Louden 210-748-6103 [email protected]

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Toyota Announces New Global Business Plan

Tokyo―TOYOTA MOTOR CORPORATION (TMC) announced today a new global business plan that will provide mid- and long-term direction to its future business activities.

The plan was created in response to increased globalization of economies and to the new economic environment resulting from recent rapid valuation of the yen. It focuses upon "Further Localization" and "Increase of Imports", and will accelerate TMC's international business activities toward 1998. Toyota will work towards achieving the "Mid-Term Global Business Plan" announced in March 1994 as well as the plan announced today. The specifics of the plan are as follows:

Further Localization

• Local production of vehicles The proportion of overseas-produced vehicles in worldwide sales (excluding sales in Japan) will increase as production in foreign countries/regions is expanded further. Specifically, the percentage is projected to increase from the 1994 level of 48% to around 60% in 1996, and around 65% in 1998. The shift from vehicle exportation to local production will accelerate and be most evident in North America. In Europe, Asia, and Oceania, the ratio of locally-produced cars will be increased as well, taking in consideration the changes in economic circumstances such as the exchange rate.
• Procurement of parts, materials, and equipment Local procurement activities of parts, materials, and equipment will be further strengthened in each region through the seeking of capable suppliers and various support activities for current suppliers. Toyota will also engage aggressively in technology transfer, increased investment, and establishing regional parts complementary programs in areas where localization has previously been difficult. To further strengthen the relationships with overseas suppliers, a "Toyota Global Optimized Purchase System" will also be introduced at various locations worldwide. (See 2. Increase of imports for further details)
• Increase annual production capacity at Toyota Motor Manufacturing, U.S.A., Inc. (TMM) to 500,000 units in 1998. (1994 production was 285,000 units.)
• Increase annual production capacity at Toyota Motor Manufacturing Canada, Inc. (TMMC) to 200,000 units in 1998. (1994 production was 86,000 units.)
• Addition of models produced The models produced in North America will also be increased. Presently, there are four models: the Corolla, the Camry, the Avalon, and the Tacoma. The addition by 1998 of three to four vehicles, including a new minivan, will be considered.
• At present, the 2.2- and 3.0-liter engines are produced in North America. The machining operation on the engine blocks, heads, connecting rods, and crankshafts of 3.0-liter engine production will be localized, similar to the 2.2-liter engines.
• In addition to the engine plant currently under construction in Canada, U.S. production of Corolla engines will be considered. (Localization of assembly to machining operations, combined production targets are to be around 350,000 units/year)
• In addition to large-size stamped parts, approximately 300 mid- and small-sized stamped parts will be made in North America by 1998. Mid- and small-sized stamping requires particular precision and thus has been difficult to localize.
• Increase of exports Vehicle exports from North America will also be further increased. Toyota will especially work towards increasing vehicle exports from the U.S. (1994 figure: 63,000 units)
• Increase in local production capacity Annual production capacity at Toyota Motor Manufacturing (UK) Ltd. (TMUK) is targeted to increase to 200,000 units in 1998. (1994 production: 85,000 units)
• Addition of models produced In addition to the Carina E currently produced, TMUK is to start producing a car in the Corolla series from 1998.
• Engine production capacity will be increased to 170,000 units in 1998. (1994 production: 76,000 units)
• Also, molds, jigs, mid- and small-sized stamped parts, engine parts, and materials will be procured locally.
• Increase of exports Exports of TMUK-produced cars, which are presently only exported to other European countries, to regions outside of Europe will start. Exports of engines and engine parts to Japan and other regions will also be increased. Last year, TMUK exported 2,500 engines to Turkey, and over 35,000 units worth of engine block and crankshaft units to Japan.
• Construction of a commercial vehicle plant in Taiwan (Scheduled production capacity to be 110,000 units/year combined with the existing passenger vehicle production. 1994 production was 65,000 units.)
• Philippines plant to be expanded (Increase in capacity to around 60,000 units/year in 1998. 1994 production was 30,000 units.)
• Thailand plant to be expanded (Increase in capacity to around 200,000 units/year in 1998. 1994 production was 110,000 units.)
• Expansion of the Indonesia plant (Increase in capacity to around 150,000 units/year in 1998. 1994 production was 80,000 units.)
• Continued investigation of possibilities of passenger car production in China. Furthermore, the Toyota Technical Center, China, opened this spring, will support localization of auto parts, motor vehicle production, and product development.
• Addition of models produced Toyota will begin development and local production of a passenger car specifically for Thailand, Indonesia, and the Philippines.
• Start of power steering production (target production capacity in 1996: 130,000 units/year) and production of lower ball joints (target production capacity in 1997: 100,000 units/year) in Malaysia
• Increase engine production capacity in 1996 to 100,000 units/year in Indonesia (1994 production: 70,000 units)
• Start production of constant velocity universal joints in the Philippines (target production capacity in 1997:110,000 units)
• Increase engine block production capacity in Thailand to 350,000 units in 1998 (1994 production: 53,000 units)
• Increase of exports Toyota will seek to expand exports of auto parts in the ASEAN complementary auto parts scheme to countries in other regions. Exports from Australia will expand from current destinations in Asia and Oceania to include Middle Eastern countries from 1996.

Increase of imports

• Toyota will strengthen its sales structure in order to sell 28,000 VW/AUDI cars in 1996 (1994 sales: 19,000 cars).
• Toyota will utilize the 1,084 "Toyota" dealerships nationwide and work towards selling 20,000 Toyota Cavaliers in 1996.
• Increase imports of Toyotas produced in the U.S. In addition to increasing sales of the Scepter line already introduced in Japan, the Avalon was introduced this May. Target sales in 1996 for these cars are set at 25,000 units.
• Overseas Supplier Guidebook An "Overseas Supplier Guidebook" will be published, outlining Toyota's purchasing policy, its procurement system, evaluation criteria, and ways to access the company.
• Search program for new suppliers and technology Toyota will further promote the following; organizing exhibitions for new products of overseas suppliers at local Toyota entities, searching for competitive parts which are currently being used in other makers' vehicles, organizing design competitions for parts among qualified suppliers, and making the full use of business meetings.
• Support programs for current suppliers A program in which the supplier and Toyota discuss and agree on mid- to long-term improvement targets, and work continuously toward achieving them, thereby enhancing competitiveness and expanding business opportunities.
• Global Cost-Comparison System As a backup system to 1) and 2), Toyota will keep a database which will enable all Toyota entities around the world to make a comparative analysis of the cost competitiveness of parts around the world.
• Study the establishment of a new company for procuring and marketing foreign and domestic general replacement parts and accessories during 1996.
• Strengthen support for the parts wholesalers to increase sales of imported parts.
• Send out a letter to the dealers, stating once again that the handling of foreign makers' vehicles are not subject to prior consultation with Toyota, and that they are free to handle them.
• Send out a letter to the parts wholesalers, stating that they are free to handle foreign makers' parts and accessories.
• In response to the concerns among foreign makers that they will face problems in gaining access to Toyota dealers, Toyota will consider establishing an internal "grievance body" to handle questions and concerns on handling foreign makers' cars.

The numerical figures raised in this business plan may change depending on economic circumstances such as the exchange rate and market conditions. Toyota will do its utmost to accomplish the plan.