TOYOTA

SWOT analysis of Toyota (6 Key Strengths in 2020)

Ovidijus Jurevicius | January 10, 2020

This Toyota SWOT analysis reveals how one of the most innovative automotive companies used
its competitive advantages to become the dominant player in the automotive industry.

It identifies all the key strengths, weaknesses, opportunities and threats that affect the company
the most. If you want to find out more about the SWOT of Toyota, you’re in the right place.

For more information on how to do a SWOT analysis please refer to our article.

Keep reading.

Company Background

Key Facts

Name Toyota Motor Corporation

Founded August 28, 1937

Logo

Industries
Automotive, Housing, Financial Services, Other
served

Geographic
Worldwide (over 170 countries)
areas served

Headquarters Toyota, Aichi, Japan

Current CEO Akio Toyoda

Revenue (JP¥) 29.380 trillion (2018) 6.5% increase over 27.597 trillion (2017)
(US$) 265.398 billion (2018) 4.2% increase over 254.798 billion (2017)

Profit (JP¥) 2.494 trillion (2018) 36.2% increase over 1.831 trillion (2017)
(US$) 22.529 billion (2018) 33.3% increase over 16.906 billion (2017)
Employees 369,124 (2018)

Bayerische Motoren Werke AG, Chrysler Group LLC, Daimler AG, Ford
Main Motor Co., General Motors Company, Honda Motor Company, Nissan
Competitors Motor, Tata Motors, Ltd., Volkswagen AG and many other automotive
companies.

Toyota Motor Corporation (further Toyota) is the world’s leading automaker (often tied with
Volkswagen for 1st-2nd place) based in Toyota City, Japan. In 2012, the company was the first
automotive company to produce over 10 million vehicles in a single year.

The company operates 4 different brands: Daihatsu, Hino, Lexus and Toyota. Toyota’s brand is
the world’s 7th most valuable brand in the world and the most valuable automotive brand, worth
US$50.291 billion.

The main Toyota’s markets are Japan, United States and China, where the company sells over
50% of its vehicles. The company produces the best-selling hybrid vehicle Prius.

You can find more information about the business in Toyota's official website or Wikipedia’s
article.

Toyota SWOT analysis

Strengths

1. Strong focus on research and development (R&D) leading to some of the most innovative
vehicles in the world

Toyota is famous for its innovative culture. The company’s goal on being ahead of its
competition by introducing some of the most innovative vehicles in the market has proven to be
a successful strategy.

Toyota’s R&D initiatives, especially in producing environmentally friendly vehicle technologies,

vehicle safety and information technology, provide it with some of the best strategic advantages.
The company operates one of the largest research facility network among the automotive
companies to achieve the best possible results from its R&D expenditure. In total, 15 research
facilities in 8 different countries, including Japan, United States, China, Thailand, Australia,
Germany, France and Belgium, focus on 3 key R&D areas:[1]

 Basic research. This area researches basic vehicle technology.

 Forward-looking and leading-edge technology development. Development of newest

technology and components that surpasses rivals’ technologies.

 Product development. New model development and upgrades for existing ones.

Toyota’s focus on innovation has resulted in one of the highest automotive R&D spending.
Toyota’s R&D expenditures were approximately JP¥1.064.2 billion (US$9.613 billion) in fiscal
2018, ¥1,037.5 billion (US$9.579 billion) in fiscal 2017, and ¥1,055.6 billion (US$8.787 billion)
in fiscal 2016.[1]

Figure 1. Toyota’s and its competitors R&D spending (US$ billions)

Company 2017 R&D As a % of revenues 2016 R&D As a % of revenues

Toyota* 9.613 3.6 9.579 3.8

Ford 8 5.1 7.3 4.8

Volkswagen 15.8 6.7 14.4 7.3

General Motors 7.3 5 8.1 4.9

Source: The respective companies’ financial reports[1][2][3][4] (Toyota’s latest fiscal year only runs
for 3 months in 2018. Most of the company’s financial year is in 2017, so we compare fiscal
2018 with other companies’ 2017 financial year as it is more accurate.)

Among the automotive companies, only Volkswagen spends more on R&D than Toyota.
Nonetheless, Toyota uses its R&D budget the most effectively, spending just 3.6% of its total
revenue on R&D, while Volkswagen spends 6.7%.

This means that Toyota needs to spend less on R&D to generate the same amount of revenue
than its key rivals.

Huge, efficient R&D spending has allowed Toyota to gain a competitive advantage over its
competitors and to become one of the largest automotive manufacturers in the world by
researching and introducing the leading-edge technology and vehicles to the consumers.

2. The most valuable and one of the most recognizable automotive brands in the world
Toyota Motor Corporation was incorporated in 1937 and since then, has become one of the most
recognizable brands in the world.

According to Interbrand[5] and Forbes[6], Toyota’s brand is the world’s 7th and 9th most valuable
brand worth US$50.291 billion and US$44.7 billion, accordingly. In both lists, it is the most
valuable brand out of all automotive companies.

Figure 2. Automotive brand ranking by Interbrand

Ranking Brand Brand Value (in US$ Overall brand ranking in

(Automotive) billions) 2017

1 Toyota 50.291 7

2 Mercedes- 47.829 9
Benz

3 BMW 41.521 13

4 Honda 22.696 20

5 Ford 13.643 33

6 Hyundai 13.193 35

7 Audi 12.023 38

8 Nissan 11.534 39

9 Volkswagen 11.525 40

10 Porsche 10.129 48

Source: Interbrand[5]

Brand value is closely related to brand reputation and recognition. Toyota, which produced and
sold 8.964 million vehicles in 190 countries in 2018 alone, has one of the widest consumer reach
in the world.

Manufacturing, research and sales operations worldwide, combined with a huge number or
vehicles sold, as well as advertising spending has helped the company to create one of the most
recognizable brands in the world. Brand recognition helps the company to introduce new
products to the market more easily and with fewer costs.
Toyota brand is also one of the most reputable brands in the automotive industry. Over its 75
years’ history, the company received hundreds of awards accolades in vehicle design, safety,
environment-friendliness and manufacturing operations.[7]

In 2018 alone, the company has received 7 IIHS (Insurance Institute for Highway Safety) Top
Safety Picks 2018 awards (more than any other automotive company) for its Toyota Corolla,
Prius, Camry, Avalon, Highlander and RAV4 vehicle models as well as 4 other Top Safety
awards for Lexus models.[8]

The company received more 2017 J.D. Power Vehicle Dependability Awards than any other
brand.[9] In addition to the awards for its vehicles, the company ranks the 2nd on the Carbon
Clean 200 List, which ranks the companies according to their efforts to transition to clean
energy.[10]

Toyota’s brand and recognition provides the company with a competitive edge over competitors
as few other automotive brands are so well-known and reputable.

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Table of contents

 Company Overview
 SWOT Analysis
 Strengths
 Weaknesses
 Opportunities
 Threats
 Summary

Toyota Mission statement

Toyota Motor Corporation uses various mission statements for its businesses in different
markets. However, with regard to the business of automobile manufacturing and sales, the
company’s mission statement pertains to its strategic actions in technology. Thus, Toyota’s
mission statement is as follows: “Create vehicles that are popular with consumers.” In expanded
form, Toyota’s mission statement includes the following strategic actions:

Provide world-class safety to protect the lives of customers.

Provide optimization of energy/infrastructure to local communities.

Put high priority on safety and promote product development with the ultimate goal of
“completely eliminating traffic casualties”.

Deliver cars that stimulate and even inspire, and earn smiles from our customers.

Address employees’ education under “Genchi-genbutsu” philosophy, which is to go to the source

to find the facts to make correct decisions, build consensus and achieve goals at our best speed.

Through true mutual trust with partners, contribute to the development of new technology and
improved expertise.

Contribute to economic development of local communities with R&D operations functioning

effectively in each region.

Toyota’s mission statement

Toyota’s mission statement focuses on products. The firm always considers the preferences and
expectations of consumers, arguably based on trends and market research. In the strategic actions
encompassed in its mission statement, Toyota emphasizes quality of products, with reference to
such criteria as safety and customer satisfaction. In addition, Toyota’s mission statement
specifies employee education as a way of achieving the human resource development aim in its
vision statement. Also, this mission statement shows that Toyota maintains its commitment to
technological innovation. Innovation is seen as a way for the company to achieve its aims in
product quality, customer satisfaction, and corporate social responsibility. Thus, Toyota’s
mission statement is holisota’s.

Vision Statement
Toyota Motor Corporation’s vision statement indicates the company’s long-term strategic
direction in the automobile industry. This vision statement reads, “Toyota will lead the way to
the future of mobility, enriching lives around the world with the safest and most responsible
ways of moving people. Through our commitment to quality, constant innovation and respect for
the planet, we aim to exceed expectations and be rewarded with a smile. We will meet our
challenging goals by engaging the talent and passion of people, who believe there is always a
better way.”.

Toyata and it’s Suppliers

Toyota has a wide range of suppliers that also include the likes of Tesla Motors, which
previously signed a $100 million agreement to supply the power train for RAV4 EVs (electric
vehicles); Samsung Electronics, which created a Car Mode App connecting Samsung
smartphones to Toyota radios; Bridgestone Americas to supply tires for the Toyota FJ Cruiser
model; and Cypress Semiconductor to provide the touchscreen for the Toyota Avalon.

In Toyota’s Detroit plant, the Camry model alone has suppliers such as Magnuson Products, IPT
Performance Transmission, Goodridge Fluid Transfer Systems, MagnaFlow, Autometer, Impact
Racing, Goodyear, Nitrous Supply, and Optima Batteries. The finishing touches before the
Camrys are delivered to dealers are provided by Fast Ed's Interiors and the Polishing Shop.

In some instances, Toyota has created downstream industries that were formerly integral parts of
the company. The likes of Nippon Denso Co., which manufactures air conditioners, and Aisin
Seiki Co., which produces components and systems for automobiles, started out as part of
Toyota but later became independent corporate entities. Nippon and Aisin continue to be
principal suppliers for Toyota but also manufacture products for other car manufacturers

Toyota Buyers

Having a car nowadays is more of a necessity than anything else. Whether you need to run
errands near Columbus or you are looking for a vehicle to complement your professional needs,
it is important to have a reliable, efficient vehicle by your side.

Finding one can be difficult, too, especially with so many automotive options out there for you to
choose from. With our wide array of New Toyota vehicles, though, and our team of automotive
experts by your side you can be confident that we will help you find a car, truck, or SUV that
matches your personality and lifestyle

Main Competitors of Toyota Motors

Toyota is a major global vehicle brand and a tough competitor for Ford, Hyundai & Volkswagen.
It is a globally well known maker of cars, SUVs and electrical vehicles. Toyota has
focussed now on sustainable growth and the production of electrical vehicles that have a very
low impact on the environment. North America is the largest market for Toyota, followed by
Japan and Asia. In 2017, North America accounted for the highest sales of Toyota vehicles at
32% of the total 8,970,860 total sales. Toyota has 364,445 employees. Its number of
manufacturing plants and companies around the world was 69 in 2017. In 2017, its net revenue
was 27,597.1 Billion Japanese yen which was 2.8% lower than the previous year. The brand’s
net income in 2017 equalled 1831.1 Billion Japanese yen. The brand brought the world’s first
mass produced hybrid vehicle Toyota Prius in 1997. It plans to invest more in the production of
electrical vehicles and bring new and improved versions of Prius. It has brought some luxury
models to the market too including Camry which is now available in a hybrid version.
This is a list of the main competitors of Toyota Motors. Major names among its competitors
include – Ford, General Motors, Volkswagen, Suzuki, Hyundai, Nissan, Honda, FCA (Fiat
Chrysler Automobiles), BMW & Mercedez.

Ford :
Ford is among the most renowned car makers of the world. The company was incorporated in
Delaware in 1919. It had come into formation through the acquisition of Ford Motor Company
that made and sold vehicles engineered by Henry Ford. Today, Ford Motors Company is a global
brand designing, manufacturing, marketing, selling and servicing a large range of vehicles
including Cars, trucks, SUVs, electrical vehicles and Lincoln Luxury vehicles. Apart from that
the brand also provides financial services through Ford Motor Credit Company LLC. The
company is consistently working to acquire a leadership position in mobility and electrical
vehicles. Its main two business segments are automotive business segment and financial business
segment. The other business segments of Ford Motor Company include Ford Smart Mobility
LLC and Central Treasury Operations. The vehicle brands of Ford Motor Company include Ford
and Lincoln. In 2017, the company sold around 6,607,000 vehicles at wholesale. Ford is an
innovative brand and also one of the most popular brands in the Asian markets. In 2017, it sold
more than 2.5 million vehicles at retail in US. The number of Ford trucks (retail sales) sold in
US equalled 1,123,416 units whereas it sold 867,909 SUVs and 595,390 cars during the same
period.
VW:
Volkswagen is a major car maker which has several brands in its portfolio including luxury
brands like Audi. Despite the diesel scandal of 2015, VW has made a strong return in 2016 and
17. There are several reasons behind the strong position of the brand in the market including its
strong financial position as well as brand image and a large product portfolio. Apart from being a
market leading brand, VW has a large product portfolio that includes both passenger cars and
luxury vehicles. Both Audi and Skoda are popular brands that have achieved an excellent
position in the market and have been highly popular in the Asian markets. The VW group
includes two divisions – automotive and financial services. In 2017, VW achieved a new
vehicles sales record despite a highly competitive and challenging environment. However, the
issues arising from the diesel engine scandal continued to affect its operating profits. Had it not
been for the strong market position of VW, the effects of the scandal would have been stronger
which cost the brand billions in fines. The brand set a new sales record of 10.8 Million vehicles
in 2017 and achieved sales revenue of 230.7 Billion Euros which was 6.2% higher than the
previous year. In North America demand grew higher in US and Canada driving the total sales
figure to 1 million vehicles in the region. The Asia Pacific region saw its sales rising to 4.5
million vehicles from 4.4 million vehicles in the previous year. Apart from Audi and Skoda,
VW’s portfolio also includes Bentley, Porsche and Ducati brands. Its automotive division
produces and sells passenger cars, light commercial vehicles, trucks, buses and motorcycles, as
well as the genuine parts, large-bore diesel engines, turbo-machinery, special gear units,
propulsion components and testing systems businesses.
Hyundai:
Hyundai is also a major global car maker that has grown highly popular in the Asian markets.
Apart from passenger cars and SUVs, Hyundai also brings luxury vehicles and owns the Kia
brand. Its technology and brand image are important factors behind its popularity. It has brought
several market leading cars in the small car segment in Asian markets. It is a leading brand in
several other areas too including owning the largest manufacturing plant. Hyundai’s Ulsan plant
in South Korea is the single largest automobile manufacturing plant in the world. Apart from
Ulsan, it has manufacturing plants in US, Brazil, Russia, China and India. Not just passenger
cars, small family cars and SUVs, the brand also makes MPVs, eco friendly cars and the Genesis
brand cars. Elantra, Sonata, Santa Fe, Tucson and Creta to IONIQ, Hyundai sells a very large
range of highly popular vehicles. Hyundai’s largest market is Asia where it sold more than 1.88
million vehicles in 2017. The brand achieved a revenue of 96,376 Billion Korean Won from the
sales of 4.9 Million vehicles in 2017. Hyundai is also one of the tough contenders in the global
automotive market and a major competitor of Ford Motors whose position in the Asian markets
continues to grow stronger.
General Motors:
General Motors was incorporated in 2009 as a Delaware Corporation. Its automotive segment
business is divided into two segments – GM North America and GM International. GM North
America includes the Buick, Cadillac, Chevrolet and GMC brands and caters to the customers in
North America. GM International on the other hand caters to the needs of the customers outside
North America through its Cadillac, Buick, Chevrolet, GMC and Holden brands. In China, GM
has equity ownership stakes in brands including Baojun, Buick, Cadillac, Chevrolet, Jiefang and
Wuling brands. In 2017 the brand sold around 9.6 Million vehicles where China and US
remained the largest vehicle markets for GM accounting for more than 4 million and more than 3
million vehicles respectively. The brand’s net revenue fell from $149,184 million to $145, 588
millions from 2016 to 2017. Its net income was 9,268 million dollars in 2016 which turned into a
net loss of 3882 million dollars in 2017. In US, the market share of GM saw a small increase of
0.1% in 2017 which reached 17.1% rising from 17%. US is the largest market of GM in North
America and the brand sold around 3 million units there. In China, the brand achieved 14.3%
market share in 2017. This growth was mainly driven by the strong sales of Cadillac and Baojun
passenger vehicles and SUVs as well as positive growth in the sales of Chevrolet vehicles.
Maruti Suzuki:
Suzuki is also a renowned brand of automobiles and motorcycles. Apart from them the brand
also produces marine vehicles. Japan is the home market of Suzuki. However, India is its largest
market. In 2017, the brand sold more than 1.4 million vehicles in India. In Japan it sold around
639,000 units. India and China have grown to become important markets for the passenger and
small car brands. It is why Suzuki is among the major competitors of Ford in India. Apart from a
slight increase in the sales of Suzuki motorcycles in 2017 in Japan, their overseas sales fell
in early all markets including North America and China. Net sales of the brand fell
from 3180.6 Billion Yen in 2016 to 3169.5 Billion Yen.
FCA:
Fiat Chrysler Automobiles (FCA) is a global automotive brand that designs, engineers,
manufactures, distributes and sells vehicles, components and production systems
worldwide through 159 manufacturing facilities and 87 research and development
centers. FCA operates in over 40 countries and sells its vehicles directly or through
distributors and dealers in over 140 countries. It designs, engineers, manufactures,
distributes and sells vehicles for the mass-market under the Abarth, Alfa Romeo,
Chrysler, Dodge, Fiat, Fiat Professional, Jeep, Lancia and Ram brands and the SRT
performance vehicle designation. It also designs, engineers, manufactures, distributes and
sells luxury vehicles under the Maserati brand. North America and specifically US is the
largest market for FCA where it sells the highest number of vehicles. In 2017, it sold total
2.4 million vehicles in North America and in US alone it sold around 2 million vehicles.
There was also a slight decline in the net revenue of the brand which fell from 111,018
million Euros to 110,934 million Euros.
Nissan:
Nissan is also a major global car brand. North America and China are its biggest
markets. The brand achieved sales of 5.6 million vehicles in 2016 and expected to
achieve the sales of 5.8 million vehicles in 2017. In 2016, its net sales in North America
totalled 2.1 million vehicles whereas that in China reached 1.35 million vehicles. In
2016, its net revenue declined by 3.9% to 11.72 trillion Yen. Some of the SUVs made by
Nissan have bene highly popular in the Asian markets. The brand is also working on
releasing electric cars and on making its foray into automated driving.
BMW:
 BMW is another major global brand of luxury cars and motorcycles that saw its
sales and market share climbing in 2017. It owns BMW, Mini and Rolls Royce
brands. 2017 was an year of growth for the brand and China was the main driver
of growth for it. Its core brand BMW sold more than 2 million vehicles in 2017.
The automotive market has grown highly competitive and despite that BMW
managed to grow its sales by around 4 percent to 2.46 million vehicles overall. In
Mainland China, the total deliveries made by BMW rose past 590,000 whereas in
Americas and US there was a slight decline in overall sales. In 2017, it achieved
an important milestone of having sold its 100,000th electrical vehicle and is
planning to move faster ahead in the direction of electrification. Its continuously
improving position in the Asian markets can be a challenge for the other vehicle
brands.
Toyota Customer
Customer First is Toyota’s cornerstone principle. Raising Customer Satisfaction is the
most important theme to be tackled as the basis of constant and stable growth. CR
activities are operational activities to prevent damaging Toyota’s image and win more
Toyota fans by checking the escalation of trouble through swift, accurate and sincere
handling of customers’ inquiries and complaints.

At IMC Customer Relations is focused on providing complete support to customers by

connecting with them, owning their problems & seeing them through to resolution in an
efficient & effective manner. We believe in our customers and keep them at the forefront
by engaging them through different channels. Four key elements to achieve this are:

1. Opening a larger window for customers

2. Swift and sure handling of inquiries and complaints
3. Making the Voice of the Customer (VOC) the basis for corporate renewal
4. Improving the corporate image and better informing customers to support sales
and service activities

Customer satisfaction is the ultimate objective and a strong coordination between all
customer touch-points is a key ingredient. Our Customer Assistance Centre works
tirelessly to provide complete support with the ultimate objective of gaining the approval
and endorsement of our patrons.