Toyota - Analysis of Success

TOYOTA:

Introduction of the company:

Toyota’s history is quite long and interesting. Sakichi Toyoda was born in Japan in 1867 during the modernization and industrialization era. He was an engineer, and begun in the textile field. Under the firm’s name Toyoda Automatic Loom Works, he created the G-Type Automatic Loom in 1897, the most technologically advanced loom of that time.

Sakichi’s dream, though, was to produce automobiles. Shortly after his success in the textile environment, he decided to follow his dream with the financial aid he gained from the loom, and the help of his so, Kiichiro Toyoda. Moreover, the Japanese Government aided him because they needed domestic vehicle production because of the war with China. He begun investing in research and development in 1930, and in September 1933 Toyoda created the first Automobile Department within the Toyoda Automatic Loom Works Company.

In April 1935, they completed the first prototype of an engine, but shortly after, the first automobile prototype was completed too. The first automobile was called A1, and in April 1936, they begun mass-producing it. It was such a success that on August 1937 his son, created the “Toyota Motor Corporation Ltd.,”. The “d” from Toyoda was replaced for the current “t” of Toyota because it was easier to pronounce, and as you know, the name of the company is as important as the product itself.

During World War II, the company produced trucks for the Imperial Japanese Army. Japan was suffering economically, so the trucks were made as simpler as possible to be cost-efficient. After WWII, Japan continued having economic problems. They continued making trucks, and by December 1945,the United States gave permission to Toyota to start peacetime production. In 1947, Toyota begun producing a commercial passenger car called SA. In 1949 the company was nearly in bankruptcy, but fortunately, they obtained a loan from a group of banks that wanted to achieve independent sales and eliminate the “excess of manpower”.

This aid was not enough at first sight, as by June 1950, the company only produced 300 trucks and they were on the edge to disappear. The manager announced layoffs and wage reductions. Kiichiro Toyoda had to renounce to his position, and Taizo Ishida, the chief executive of the Toyoda Automatic Loom Works Company, succeeded it. The Korean War saved the company, as more than 5.000 US military vehicles were ordered to Toyota. All the credits were given to Ishida, as he focused the small budget they had for investment and equipment. Because of these, at the end of the 1950, Toyota created a small mass-production car, which was cheap but reliable, and was targeted to the use of masses. Since then, Toyota became a referent on automobile brands.

This was the beginning of the “Toyotism”. The system of production created by Toyota combined the strict quality control, the close relations with the local communities, selection and training of labour force, and the mid and high managerial levels, which minimized the hierarchy in the company. Their policy of using the most advanced technology in the production and the car itself, brought the company to what is it today.

By 1957, Toyota set up a headquarters in Hollywood, but it was not until 1959 that they opened its first plant outside Japan. It was in Brazil and since then, they maintained the philosophy of localizing the production and design of each product, which means that they would adapt the products for the places they would be used as well as building them up. Due to this, they created a network of design and research and development facilities overseas, in North America and later in Europe.

In 1960 Toyota opened a new research and development facility in Thailand, and furthermore, in the same year, they created partnerships as the one with Hino Motors and Daihatsu. Years later, in 1966, Toyota acquired Hino and in 1967 they took control of Daihatsu, until 1999 where they bought all of it.

Toyota took their time to become globalised. It begun in 1953, where the first car arrived to El Salvador, North America. In 1962, the first car was sent to Europe, concretely to Finland, but only to evaluate it. So the first import in Europe was made by Denmark in May 1963. Also in 1963, the first Toyota was built outside Japan, in Melbourne, Australia. This was not a casualty, but Australia was Toyota’s biggest export country from 1963 to 1965. By 1970, Toyota had already exported its one million unit.

In April 2002, Toyota decided to enrol in the 2010 Global Vision, a program to respect the environment and people. With this enrolment, the company decided to pursuit a new global image, with 4 new key concepts: the earth, comfort of life, and excitement for the world and respect for all people.

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