TOYOTA MOTOR CORPORATION

A Group Research Paper

Presented to the
Accountancy Department
De La Salle University

In partial fulfillment
Of the course requirements
In ACYCST1 Section K32

SUBMITTED TO:
Dr. Joy Lynn Legaspi

SUBMITTED BY:
Cariaso, Angel Love
Limos, Carol
Nalupta, Raoul Arnaldo Primicias
Ramas-Uypitching, Antonio III
Wee, Justin Lim

June 26, 2023

 Table of Contents

Introduction 3
Company Profile 3
Industry 5
Products 6
Market 6
Financial Statements 8
References 11
I. Introduction

Toyota Motor Corporation, or Toyota, has been the largest automobile

manufacturer in Japan and, arguably, the global automotive economy. Since its
inception in the early 1900s, the Japanese car brand has undoubtedly grown to become
a pioneer for automobile production and development. From the early launch of its first
domestically developed passenger car, the 1955 Toyopet Crown, to the debut of the
world-acclaimed, and unorthodox Toyota Production System (TPS), the company
continues to diversify its product offerings, extending to premier markets worldwide.
The top-selling company, after all, designs, manufactures and sells its own vast
product line of passenger motor vehicles that include: cars, buses, minivans, trucks,
specialty cars, recreational and sport-utility vehicles. Even decades later, the popularity
of Toyota has not wavered, and only extended further outside the Asia-Pacific—tapping
several markets in Northern America and even in the Middle East.
A now major player in the future of mobility—the manufacturer’s unwavering
people-centered philosophy has vastly influenced their commitment to innovation,
constantly redefining what monozukuri (manufacturing) truly entails in the new
economy. Now, the household brand has positioned itself at the forefront of the
ever-growing mobility industry; from motors to mobility, the manufacturing giant is
accelerating its pursuit to purposeful initiatives that now intersect innovation and social
impact.

II. Company Profile

Toyota is a Japanese multinational corporation headquartered in Toyota City,

Aichi Prefecture 471-8571, Japan, with various overseas offices worldwide. Strategically
located at the heart of the Chubu region, Aichi Prefecture is known to be the heartland
of advanced manufacturing in Japan; the metropolitan area, after all, houses the
country’s largest automotive cluster, with other related corporations including Aisin,
Denso, and Toyota Boshoku centered therein.

Image 1. Toyota Motor Corporation headquarters in Aichi Prefecture

Founded by Sakichi Toyoda in the late 1920s, the once humble Japanese
manufacturer of automatic looms has now evidently grown into a global industry
leader–boasting a highly-diversified product portfolio in the automotive market. The
automobile manufacturer currently employs more than 360,000 people across all
continents (Kudo, 2017); It also operates a divisional organizational structure that
functions around specific market, product, and geographic groups.

Image 2. Organizational structure of Toyota Motor Corporation

With its mammoth scale, Toyota Motors has inevitably endured and recorded
steady market-share growth over the past 40 years. As of fiscal year 2023, moreover,
the manufacturing giant is now moving towards a production volume forecasted at 10.6
million units worldwide by the end of fourth quarter–approximately 900,000 units per
month (350,000 units in Japan and 550,000 units overseas) (Toyota, 2023).

Image 3. Automobile assembly plant layout of Toyota Motor Corporation

However, Toyota believes that efficiency alone cannot guarantee success

(Takeuchi, Osono, Shimizu, 2008). Beyond its organizational capacities, Toyota Motor
Corporation also has several CSR programs in place aimed at promoting sustainable
development, environmental conservation, and promoting social welfare. According to
Toyota's Global CSR Report 2019, some of the programs include the Toyota
Environmental Challenge 2050, which aims to achieve zero carbon emissions and
promote recycling and the effective use of resources, the Toyota Safety Education
Program, which is designed to promote traffic safety and reduce accidents, and the
Toyota Technological Institute Scholarship Program, which provides scholarships to
students pursuing graduate degrees in science and technology (Toyota Motor
Corporation, 2019).

B. Industry

Toyota is primarily involved in automobile manufacturing, particularly in the

production of passenger vehicles. Ever since its founding, the Japanese car
manufacturer has sought to contribute to a more prosperous economy by constantly
pursuing newer vehicle technologies in the industry—which, undoubtedly, commenced
the local automarket in Japan. By further growing into the manufacturing powerhouse it
is now, the company even enabled the logistics and transportation sector in the
Asia-Pacific region, and other overseas markets. Toyota, alongside other automotive
players, has undoubtedly accelerated the growth of the automotive industry to become
a mainstay in any urban economy. However, major disruptions in the industry have
started to show otherwise.
Throughout the years, automobile manufacturing has slowly shifted away from
the usual product-out type commerce to one that is more service-oriented—which,
ideally, entails an already dying industry. The emergence of mobility-as-a-service, in
particular, proves the industry is already primed for reinvention to reflect a new era of
decarbonization, electrification, and digital connectivity.

C. Products

The Toyota Motor Corporation primarily develops, and manufactures its own line
of vehicles under various sub-brands. There are five brands under which the Japanese
car brand produces vehicles, particularly: the Toyota brand, Hino, Lexus, Ranz, and
Daihatsu (Iron FX, 2021). On top of that, the manufacturer also produces secondary
automobile-related products, such as vehicles, engines, car air-conditioning
compressors, car electronics components and devices, and stamping dies (Toyota
Industries Corporation, n.d.).
 Image 4. Toyota product line

An article by Vehicle Service Pros, sponsored by Toyota, mentions the various

materials the manufacturer uses to produce these vehicles, which particularly include:
steel, aluminum, carbon fiber, and iron (2022).
The materials used by the manufacturer are chosen based on weight, durability,
and performance. As previously said, steel is employed in the construction of Toyota
vehicles, specifically in the body and frame of the vehicle. The steels utilized are
high-quality steel alloys that lessen weight without sacrificing the car's strength. This is
due to the fact that this material is stronger and lighter than traditional steel. Aluminum
is another material used by automobile builders in the trunk, doors, and hood.
Aluminum has been shown to be a good choice for this application since it is
corrosion-resistant and lightweight. Furthermore, carbon fiber is used in Toyota's
high-end sports automobile, the Lexus LFA, because it is lightweight and robust, making
it suitable for high-performance purposes. Finally, because iron is heat-resistant and
durable, the producer uses it in the production of the product's transmission and engine
components (Collision Pros, 2022) .

D. Market
 From sports-utility vehicles to family sedans, Toyota positions itself as a
top-selling auto brand across numerous customer segmentations. As the car
manufacturer operates under various sub-brands, and produces a vast product
portfolio—ultimately tackling low, middle and high-end markets—the Japanese brand
may oftentimes be the forerunner for a myriad of vehicle buyers. However, the main
audience in terms of Toyota demographics is generally younger-to-older middle age
consumers, in the 30 to 50 years bracket (Start.io, 2022). Though the profile includes
both males and females, the report further stated that the target market for Toyota also
varies depending on the particular car model.
As of Q1 of 2023, Focus2Move reports that Toyota dominated the World Car
Group Ranking and, “stood at the 1st position with a market share of 12.6% by 2021 in
manufacturing vehicles worldwide” (2023). The report further mentions that the
Japanese car brand has solidly maintained a substantial distance from runner-up
Volkswagen.
Evidently, the close competitors of Toyota are Volkswagen, Daimler, Ford Motors,
General Motors, Honda Motors, BMW group, SAIC motors, Stellantis, Hyundai motors,
Nissan Motors, Tesla, and Suzuki motors.
 Image 5. Toyota market share

E. Financial statements for the year ended

It is possible to determine the Cost of Goods Manufactured for Toyota Motor

Corporation using the annual reports and the accompanying disclosures for the current
financial year. Upon reviewing the income statement, the Cost of Goods Sold or Cost of
Sales was found to be 2,097,501 million yen for the financial year 2022. However, this
information alone is insufficient to determine the Cost of Goods Manufactured. The
notes accompanying the consolidated financial statements provided disclosures
regarding inventories, as a result, it has become possible to calculate the Cost of Goods
Manufactured for the financial year 2022, which amounted to 2,160,849 million yen.
 Image 6. Income Statement for Toyota Corporation

Image 7. Note 8 for Inventories

While the cost of goods manufactured for Toyota Corporation was successfully
derived by the group, this is not applicable for the financial statements of many other
companies. After all, these reporting entities do not often and extensively disclose
information about their product costs for a vast amount of reasons. Mainly, it is due to
the aspect of competitive advantage which can be weakened if competitors learned
about the details of the costs that are related to rival products. Such information can
significantly affect the state of the market positions of the involved companies.
Companies may also be negatively impacted by further disclosure of their
product costs since this could potentially lead to the identification of the company
pricing strategies by the public. Discovering that certain companies have profit margins
that are enormous may hurt their brand image and reputation. Furthermore, consumers
are more concerned with the product's perceived worth than its actual cost. As a result,
if the company discloses the true cost of creating such a product, it may change the
customers' perception of the product's value. Further disclosure of more detailed
product costs is also not mandated by related regulatory agencies which makes such
further disclosure an unnecessary burden. Thus, companies ensure that valuable
information about their product costs are kept confidential.
 References

Toyota Motor Corporation. (2022). Toyota Annual Report 2022. Retrieved from
https://www.toyota-industries.com/investors/item/2022_annual_financial_report_E.pdf

Toyota Motor Corporation. (2019). Toyota Global CSR Report 2019. Retrieved from
https://global.toyota/en/sustainability/report/2019/

Toyota says to produce 10.6 million vehicles in 2023. (2023). Reuters. Retrieved from
https://www.reuters.com/business/autos-transportation/toyota-says-produce-106-mln-v
ehicles-2023-2023-01-16/

75 Years of Toyota: A Brief History. (n.d.). Toyota UK Magazine. Retrieved from

https://mag.toyota.co.uk/75-years-of-toyota-a-brief-history/

How Toyota Went From Humble Beginnings to Automotive Giant. (2021). Cascade.
Retrieved from
https://www.cascade.app/studies/how-toyota-went-from-humble-beginnings-to-automo
tive-giant

Toyota's Vehicle Metals. (2017). Furuno ITS. Retrieved from

https://www.furuno.com/en/its/articles/20170324/
Toyota target market analysis: Toyota customer base & market segmentation
competitors. (2020). Start.io. Retrieved from
https://www.start.io/blog/toyota-target-market-analysis-toyota-customer-base-market-s
egmentation-competitors/#:~:text=Who%20is%20Toyota%27s%20target%20market,b
ase%20is%20in%20North%20America.

Toyota Industries Corporation. (n.d.). Toyota Automobiles. Retrieved from

https://www.toyota-industries.com/products/automobile/

Toyota Motor North America, Inc. exploring Toyota's vehicle metals. (2019). Vehicle
Service Pros. Retrieved from
https://www.vehicleservicepros.com/collision-repair/body-shop-and-repair/article/21253
149/toyota-motor-north-america-inc-exploring-toyotas-vehicle-metals

Toyota Org Chart. (n.d.). The Org. Retrieved from

https://theorg.com/org/toyota/org-chart/full-screen

World Car Group Ranking - 2022. (2022). Focus2Move. Retrieved from

https://www.focus2move.com/world-car-group-ranking/

The Contradictions That Drive Toyota's Success. (2008). Harvard Business Review.
Retrieved from https://hbr.org/2008/06/the-contradictions-that-drive-toyotas-success

Toyota's days on easy street are over. (2022). Nikkei Asia. Retrieved from
https://asia.nikkei.com/Business/Toyota-s-days-on-easy-street-are-over

Toyota. (2020). Toyota. Retrieved from

https://cdn.uconnectlabs.com/wp-content/uploads/sites/82/2020/02/Toyota.pd