Toyota Motor Corp.

2023-2024

TOYOTA MOTOR
(Automotive Manufacture)

01. About the Organization:

Toyota Motor Corporation (commonly known as simply Toyota) 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 originally 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.

After World War II, Toyota benefited from Japan's alliance with the United States to learn
from American automakers and other companies, which gave rise to The Toyota Way and
the Toyota Production System (a lean manufacturing practice) that transformed the small
company into a leader in the industry and was the subject of many academic studies.

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
December 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. 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.

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As of 2024, the Toyota Motor Corporation produces vehicles under four
brands: 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 (FAW Toyota and GAC Toyota),
the Czech Republic (TPCA), India (Toyota Kirloskar) and the United States (MTMUS).

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.

1.1 History
Main article: History of Toyota

Fig:1.1 The mass-produced Toyoda automated loom

In 1924, Sakichi Toyoda invented the Toyoda Model G Automatic loom. The principle
of judoka, 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. [6][9] 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

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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.

Fig:1.2 The 1936 Toyota AA, the first vehicle produced by the company while it was still
a department of Toyota Industries

Vehicles were originally sold under the name "Toyoda" from the family name of the
company's founder, Kiichiro 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 (a lucky number) to write in Japanese, was visually simpler (leaving
off the diacritic at the end), and with a voiceless consonant instead of a voiced one (voiced
consonants are considered to have a "murky" or "muddy" sound compared to voiceless
consonants, which are "clear").

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.[6][13][14][15] 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.

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02.Toyota Products

Toyota officially lists approximately 70 different models sold under its namesake brand,
including sedans, coupes, vans, trucks, hybrids, and crossovers. Many of these models are
produced as passenger sedans, which range from the subcompact Toyota Yaris,
compact Corolla, to mid-size Camry and full-size Avalon. Minivans include
the Innova, Alphard/Vellfire, Sienna, and others. Several small cars, such as the xB and tC,
were sold under the Scion brand.

List of Toyota vehicles

Best-selling Toyota and Lexus

nameplates/series globally, FY2023[117]

Rank
Sales
in Model
(thousands of units)
Toyota

1 Toyota Corolla 1,538

2 Toyota Yaris 900

3 Toyota RAV4 847

4 Toyota Hilux 648

5 Toyota Camry 642

6 Toyota Highlander 379

7 Toyota Tacoma 260

8 Toyota Levin 195

9 Toyota Fortuner 177

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10 Toyota Avanza 175

03.Situational Analysis

Core competencies
The core competence of Toyota Motor Corporation is its ability to produce automobiles of
great quality at best prices, thereby providing a value for money to the customers. This core
competence of quality can be attributed to its innovative production practices. The quality
aspect of Toyota’s products have revolutionized the automobiles in the past and almost all the
automobile companies had to try and better the quality of their products. It is a cornerstone of
the cost leadership strategy that the company pursues.

Distinctive Competency
Toyota’s distinctive competence is its production system known as the “Toyota Production
System” or TPS. TPS is based on the Lean Manufacturing concept. This concept also includes
innovative practices like Just in Time, Kaizen, and Six Sigma and so on. Toyota has worked
tirelessly over the years to establish this distinctive competence. No other automobile
manufacturer can do it as well as Toyota does. This distinct competence has led to a
competitive advantage that has given Toyota a sustainable brand name and a market leader
position. (Toyota Production System)

SWOT Analysis
Strengths:
The company is one of the world's best-known brands with their experience which cannot be
overemphasized in the terms of manufacturing. Strength is that their product list is diverse
with wide variety of segments for the customers to choose from which could fit their lifestyle.
They are the moving assembly line pioneers which made their production very affordable as
well as faster and efficient. The company's international exposure makes the company the
second largest automaker in the world.
Toyota also uses low cost to try and gain a competitive advantage in the automotive industry.
“Toyota is (or was at the time) the low cost producer in the industry. Toyota achieves its cost
leadership strategy by adopting lean production, careful choice and control of suppliers,
efficient distribution, and low servicing costs from a quality product.”(Michael E. Porter)
This quote from Michael Porter sums up how Toyota achieves this low cost strategy
Weaknesses:

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Toyota’s main weaknesses are as follows:
 Hierarchical organizational structure
 Secrecy in organizational culture
 Effects of product recalls in recent years

Toyota’s global hierarchical organizational structure prevents maximum flexibility of regional

operations. Also, the company’s culture of secrecy is a weakness that reduces response times in
addressing emerging problems. In addition, Toyota implemented massive product recalls
starting in 2009. These recalls weaken the firm because the recall processes consume business
capacity that could be used for product distribution instead.

Through the interview with the Sales Manager of BMUC Company, he told us that one of their
weaknesses was both of Toyota And Lexus cars has the same maintenance garage in Beirut
Hazmieh Branch, but now they separated each one to its maintenance garage.
Opportunities:
Toyota Company according to their corporate responsibility to be environment friendly, made
the opportunity to keep cleaner engine emissions. They further had a chance of create a great
image in the public with the help of environmental group works in order to keep the
environment clean. There is one great viable prospect for the company where they already
started investing in solar power. The company has a chance to regionalize and specialize their
worldwide operations which could enhance their transnational linkages. The company's
existing innovations capabilities on automobiles will make them have an opportunity to make
good scope in the market other than the competitors.
Threats:
Very tight competitive rivalry is being running in the automobile industry and so Toyota faces
the same as any other organizations. The company is also affected by risks of prices change of
the raw materials like fuel, rubber, glass and steel. The economies in the Pacific, Europe and
US are also showing slowdowns. Analysis shows that these are active threats to the company
financially. Foreign competitive activities have been largely been affected by the company due
to the overall position in the industry worldwide.

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04.Board of directors

 Chairman: Akio Toyoda (since April 2023)

 Vice chairman: Shigeru Hayakawa
 President & CEO: Koji Sato (since April 2023)
 Members:
 Takeshi Uchiyamada
 James Kuffner
 Kenta Kon
 Masahiko Maeda
 Ikuro Sugawara
 Sir Philip Craven
 Teiko Kudo

List of former chairmen

In 1950, Toyota was split into Toyota Motor Co. and Toyota Motor Sales Co. (sales arm of
Toyota); the two companies merged in 1982 to create one unified company, with then-Toyota
Motor Co. President Eiji Toyoda becoming chairman. Chairmen listed prior to 1982 below
were for the pre-merger Toyota Motor Co. only.

1. Rizaburo Toyoda (1937–1948)

2. Taizo Ishida (1948–1952)
3. Shoichi Saito (1952–1959)
4. Masaya Hanai (1959–1982)
5. Eiji Toyoda (1982–1994)
6. Shoichiro Toyoda (1994–1999)
7. Hiroshi Okuda (1999–2006)
8. Fujio Cho (2006–2013)
9. Takeshi Uchiyamada (2013–2023)

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List of former presidents

Similar to the chairman position, in 1982 the then-Toyota Motor Sales Co. President
Shoichiro Toyoda becoming President. Presidents listed prior to 1982 below were for the pre-
merger Toyota Motor Co. only.

1. Rizaburo Toyoda (1937–1941)

2. Kiichiro Toyoda (1941–1950)
3. Taizo Ishida (1950–1961)
4. Fukio Nakagawa (1961–1967)
5. Eiji Toyoda (1967–1982)
6. Shoichiro Toyoda (1982–1992)
7. Tatsuro Toyoda (1992–1995)
8. Hiroshi Okuda (1995–1999)
9. Fujio Cho (1999–2005)
10. Katsuaki Watanabe (2005–2009)
11. Akio Toyoda (2009–2023)

List of Directors of Toyota in India

1. Ms. Sunita Rajiv Handa -Chairman and Independent Director
2. Mr. Narayanaswamy Raja -Managing Director & Chief Executive Officer
3. Mr. Kazuo Noda -Whole Time Director & Executive Vice President
4. Mr. V. Prakash -Independent Director
5. Mr. Tetsuo Higuchi -Non-Executive Director

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05.FINANCIAL AUDIT DETAILS

1. Consolidated Results for FY2023 (April 1,2022 through March 31, 2023)

(1) Consolidated financial results (% of change from previous

year)
Net income
Income before attributable to Comprehensive
Sales revenues Operating Net income
income taxes Toyota Motor income
income
Corporation
Million % Million % Million % Million % Million % Million %
yen yen yen yen yen yen
FY2023 37,154,2 18.4 2,725,025 -9.0 3,668,733 -8.1 2,492,9 - 2,451,3 - 3,320,681 -
98 67 13.3 18 14.0 17.3
FY2022 31,379,5 15.3 2,995,697 36.3 3,990,532 36.1 2,874,6 25.9 2,850,1 26.9 4,017,742 21.9
07 14 10

Earnings per share Earnings per share Ratio of net income Ratio of income
attributable to attributable to attributable to Toyota before Ratio of operating
Toyota Motor Toyota Motor Motor Corporation to income taxes and income to sales
Corporation Corporation Toyota Motor equity in earnings of revenues
– Basic – Diluted Corporation affiliated companies
shareholders' equity to total assets
Yen Yen % % %
FY2023 179.47 — 9.0 5.2 7.3
FY2022 205.23 205.23 11.5 6.1 9.5

Share of profit (loss) of investments accounted for using the equity method FY2023 643,063
million yen, FY2022 560,346 million
On October 1, 2021, Toyota Motor Corporation ("TMC") effected a five-for-one stock split of
its common stock to shareholders of record as of September 30, 2021. "Earnings per share
attributable to Toyota Motor Corporation (Basic)" and "Earnings per share attributable to
Toyota Motor Corporation (Diluted)" are calculated based on the assumption that the stock split
was implemented at the beginning of the previous fiscal year.
"Earnings per share attributable to Toyota Motor Corporation (Diluted)" is not disclosed for
FY2023, because there were no potential shares during that period as the acquisition of all
outstanding First Series Model AA Class Shares took place on April 2, 2021, and the
cancellation of all First Series Model AA Class Shares was completed on April 3, 2021.

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2. Consolidated financial position

Ratio of Toyota Motor

Total Toyota Motor
Toyota Motor Corporation
Total assets shareholde Corporation Corporation shareholders'
rs' equity shareholders' shareholders' equity
equity equity per share
Million yen Million yen Million yen % Yen
FY2023 74,303,180 29,264,213 28,338,706 38.1 2,089.08
FY2022 67,688,771 27,154,820 26,245,969 38.8 1,904.88

On October 1, 2021, TMC effected a five-for-one stock split of its common stock to
shareholders of record as of September 30, 2021. "Toyota Motor Corporation shareholders'
equity per share" is calculated based on the assumption that the stock split was implemented at
the beginning of the previous fiscal year.

3. Consolidated cash flow

Cash and cash

From operating From investing From financing equivalents at
activities activities activities end of year
Million yen Million yen Million yen Million yen
FY2023 2,955,076 (1,598,890) (56,180) 7,516,966
FY2022 3,722,615 (577,496) (2,466,516) 6,113,655

Annual cash dividends per common share Ratio of total amount

Total amount of Dividends payout of dividends to Toyota
End of End End of
cash dividends ratio (consolidated) Motor Corporation
first of third Year- Total (annual) shareholders' equity
quarter secon quarter end (consolidated)
d
quarte
r
Y Y Y Y Y Million yen % %
FY202 e e e e e 718,211 25.3 2.9
2 n n n n n 816,968 33.4 3.0
FY202 — 120. — 28. —
3 — 00 — 00 60.
25. 35. 00
00 00
FY202 — — — — — —
4
(forecast
)

On October 1, 2021, TMC effected a five-for-one stock split of its common stock to
shareholders of record as of September 30, 2021. The dividend for the second quarter of the
fiscal year 2022 presents the amount prior to the stock split. Annual cash dividends per
common share for the fiscal year ended March 31, 2022 is not stated because the amounts
cannot be simply combined due to the implementation of the stock split. Annual cash
dividends per common share is ¥260 when calculated based on the assumption of no stock
split, and ¥52 when calculated with the stock split taken into account.

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06. Toyota’s Human Rights Policy

We as Toyota refer to and respect the “United Nations Guiding Principles on Business and
Human Rights” (UNGP) and promote activities related to human rights based on the UNGP.
Seeking “the happiness of someone other than ourselves” has always been a part of Toyota’s
Founding Principles and this was a driving force that led to the invention of the automatic
loom which can be considered as the beginning of Toyota. This spirit and pursuit is still
within us today, although our mission has now grown to “producing happiness for all”.
Within every country and every region in which we operate, we aim to be the best company
in town that is both loved and trusted by the people. The automotive industry is supported
by numerous people, including local communities, suppliers, business partners such as
dealers, customers, etc. We will continue to protect and improve the human rights of our
employees, customers, and all people involved in our business activities in order to be
beneficial towards society. This policy stands as the highest-level policy related to human
rights within Toyota and shall be adhered to by everyone employed by Toyota.

1．Commitment for the "respect for human rights"

We recognize that our business operations could be at risk to potential and actual human rights
impacts.
We seek to uphold the human rights of others, and shall address any human rights
infringements that may arise from our business operations by taking responsibility for them.
We expect our business partners and other parties to also respect and not infringe upon human
rights, however if they do, then we will respond appropriately based on this policy.
We respect and refer to international norms such as the Universal Declaration of Human
Rights. Toyota is guided by the United Nations Guiding Principles on Business and Human
Rights and therefore we have a corporate responsibility to respect human rights. This policy
ensures compliance with International human rights obligations together with the laws and
regulations of the countries in which we operate within.
2．Scope of responsibility
This policy applies to all executives and employees in Toyota and its subsidiaries. We also
expect our business partners, including our suppliers, to understand and agree with this policy
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and to work with us to ensure that their business operations respect this policy.
3. Human Rights Due Diligence
order to fulfill the responsibility to respect human rights, we will establish and continuously
implement a Human Rights Due Diligence* system. (*The process which is implemented
for the identification, prevention, and mitigation of negative human rights impacts)

4．Remedy
If it is certain that we have caused or contributed to an adverse impact on human rights, we
shall immediately implement corrective measures. In addition to this, we will continue to
develop and operate a practical remediation mechanism by expanding the function of our
existing grievance mechanism which has been established in Japan and also in other regions.
５．Education and Training
In order to ensure that this policy is embedded within our internal operations and
communicated to our external stakeholders, we provide appropriate education and training
to all our executives and employees, and we concurrently encourage our business partners
such as suppliers and retailers to understand our expectations. We also ensure that this
policy is incorporated within the necessary processes, such as each function’s policies and
guidelines, so as to become institutionalized across all of our corporate activities.
7．Monitoring and disclosure
We will ensure the complete implementation of this policy by continually tracking its
progress, while at the same time, allowing for revisions to the policy if needed. We will
disclose our actions for respecting human rights, together with the appropriate measures,
within our official website and other communication platforms.
7. Consultation with stakeholders
In the event that a human rights violation occurs, Toyota will consult with external
stakeholders to address the issue and ensure continual communication.
This policy was approved by the Board of Directors of Toyota Motor Corporation on
September 29, 2021.

Toyota Motor Corporation

President and Representative Director, Akio Toyoda

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07. GEOGRAPHIC LOCATION

North America

Toyota Motor North America is headquartered in Plano, Texas, and operates as a holding
company for all operations of the Toyota Motor Corporation in Canada, Mexico, and the
United States. Toyota's operations in North America began on October 31, 1957, and the
current company was established in 2017 from the consolidation of three companies: Toyota
Motor North America, Inc., which controlled Toyota's corporate functions; Toyota Motor
Sales, U.S.A., Inc. which handled marketing, sales, and distribution in the United States;
and Toyota Motor Engineering & Manufacturing North America which oversaw operations
at all assembly plants in the region. While all three companies continue to exist in legal
name, they operate as one company out of one headquarters campus.

Australia

In 1963, Australia was one of the first countries to assemble Toyotas outside Japan.
However, in February 2014, Toyota was the last of Australia's major automakers to announce
the end of production in Australia. The closure of Toyota's Australian plant was completed
on October 3, 2017, and had produced a total 3,451,155 vehicles. At its peak in October
2007, Toyota manufactured 15,000 cars a month. Before Toyota, Ford and GM's Holden had
announced similar moves, all citing an unfavorable currency and attendant high
manufacturing costs.

INDIA

On 16 March 2014, Toyota Kirloskar Motor temporarily suspended the production at two of
its assembly plants in Bidadi, Karnataka whose production capacity was 310,000 units
annually and has employee strength of 6,400. Cause for the shutdown was failure to reach an
agreement with the union over the issue of wages, deliberate stoppages of the production line
by certain sections of the employees and abusing & threatening of supervisors thereby
disrupting the production for the past 25 days. Toyota Kirloskar Motor announced on 21
March 2014 to lift the lockout at the plants effective from 24 March 2014 with subject to an
acceptance of a service condition which requires all the employees signing an undertaking on
good conduct.

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08. LATEST TECHNOLOGY

Toyota Unveils New Technology That Will Change the Future of Cars
-Pioneering the future with the power of technology, centered on
innovative battery EV technology and the establishment of a hydrogen
business

On the vehicle axis, through technologies such as the integration of next-generation batteries
and sonic technology, we will achieve a vehicle cruising range of 1,000 km. To bring more
stylish design, Aerodynamic performance is supported by AI, while designers will focus on
expressing natural sensibility. The Arene OS and full OTA will infinitely expand the
possibilities for enjoying cars.

On the manufacturing axis, the car body will be constructed from three main components
in a new modular structure. Adopting giga casting will allow significant component
integration, which contributes to the reduction of vehicle development costs and factory
investment. In addition, self-propelling production technology will reduce the processes and
plant investment by half.

BEV Factory is an "ALL in ONE TEAM" under one leader that unifies functions and
regions beyond the framework of a carmaker, including Woven by Toyota and external
partners.

This ONE TEAM will revolutionize the way work is done, with everyone on the same site
and with the same awareness of the issues, to achieve quick decision-making and initial
response.

The next-generation battery EVs will adopt new batteries, through which we are determined
to become a world leader in battery EV energy consumption. With the resources we earn,
we will improve our product appeal to exceed customer expectations and secure earnings.

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Please look forward to a "carmaker-produced battery EV that inspires the hearts of all
customers."

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