Here are some interesting passages about Toyota from a recent 2005 issue of Fortune:
Profits "in fiscal 2003, which ended in March, jumped 67%, to $10.3 billion--more than the profits of GM, Ford, DaimlerChrysler, and Volkswagen combined."
Judging from the above figures, it can be said that "Toyota has long since kicked the Japanese habit of chasing sales and market share at the expense of profit."
"...Toyota now runs 47 plants in 26 overseas markets--up from 20 plants in
14 foreign countries in 1990--and generates more than 70% of its profits overseas. In the next two years, Toyota will add factories in Mexico, the Czech Republic, and the U.S. and roll out an ambitious campaign to make up lost ground in China. As foreign production lines multiply, executives are struggling to cut months from the time required to launch new models, and they are working with suppliers on a radical program to slash tens of billions of dollars in annual spending on parts.""Until now, the Japanese automaker has pursued a strategy of localization--establishing factories in major markets and building out supply chains in each country. Increasingly, though, Toyota executives are coming to view the world as a single integrated market and are hatching bold plans to launch models simultaneously around the globe, with parts manufactured in one country designed for use in vehicles assembled in another. All this comes as Toyota is pushing harder than ever at home, where it has raised market share to a record 46%."
"At the Tsutsumi plant in Toyota City, 6,600 employees working two shifts on two separate production lines can turn out 500,000 vehicles a year in eight model variations at a rate of one per minute. It is a ballet of astonishing precision, enhanced by a myriad of tiny improvements on the factory floor. Along one segment of the line, workers fastening parts beneath the dashboard straddle mechanized chairs that enable them to bounce in and out of the passenger compartment with a minimum of squatting and bending. At another, robots guide air conditioners into optimum position for manual installation. Further on, engineers have fashioned a mechanism of coils and magnets to lift bolts from a parts bin in the exact size and sequence required."
"The kaizen approach has been widely emulated in the auto industry, but getting it right is harder than it looks. Indeed, Toyota is so certain its methods can't be replicated through observation alone that each year it welcomes tens of thousands of visitors--many from rival carmakers--to tour its factories. The truth is, even Toyota struggles to make the system work effectively outside Japan."
"Toyota is so big now," says Teruo Suzuki, general manager of Toyota's human resources department. "We make so many cars in so many different places with so many people. Our greatest fear is that as we keep growing, our ability to maintain the discipline of kaizen will be lost."
"In an effort to speed the transmission of skills on the factory floor, Toyota recently created a new facility, the Global Production Center, in a corner of its Motomachi plant in Toyota City. Trainees begin by watching "visual manuals" illustrating basic production techniques, then move to a practice area where they perform progressively more complicated tasks. A December visit to the center found a class of about
1,500 workers--half from overseas facilities in China, Malaysia, and Indonesia--being drilled at stations for parts pickup, welding, painting, and plastic stamping."Toyota's CEO since 1999 Fujio Cho, meanwhile, is "trying to apply what he learned on the factory floor to corporate management: He wants to shorten the chain of command, improve accountability, and speed up the decision-making process. Last year he slashed the number of Toyota directors from 58 to 27. He hopes to increase the number of non-Japanese directors, now only five. And he says he wants a management structure that is as instantly responsive as Toyota's production lines. "If there's a problem," Cho says, "I want to hear about it in an hour."
"Cho is an affable and low-key manager who prefers to give credit to his predecessors and subordinates rather than steal attention for himself. He is also a nimble problem solver, quick to adapt to conditions at hand. Cho says he learned the value of flexibility during his nine-year stint a s general manager of the Georgetown plant. The constant questioning from U.S. workers, he says, helped him see that many aspects of Toyota's production process had to be retooled for U.S. factories--and could be improved on in Japan as well. He realized, he says, that "we did a lot of things without thinking, because we had been taught in a certain way by our predecessors, and it seemed to work, so we just did it." Toyota's expansion into the U.S., he argues, "rejuvenated the entire company, forcing everyone to make adjustments and abandon outdated ideas."
Now Toyota faces a similar challenge in China, the world's fastest-growing auto market. In Beijing last spring, Akio Toyoda, grandson of the company's founder and the executive leading its China operation, acknowledged that Toyota "is still the new kid on the block." That's putting it politely. The Japanese company, which makes only about 130,000 vehicles in China and has a market share of less than 5%, trails far behind Volkswagen, GM, and Honda. Toyota hopes to boost production to one million units and raise its China market share to 10% by the end of the decade. But it has made some uncharacteristic blunders."
"After the normalization of relations in the 1970s, Toyota was the odds-on favorite to lead the first wave of foreign investment in China's auto industry. But Toyota, preoccupied with efforts in the U.S., dithered over Beijing's invitation. Chinese leaders took offense. In the 1990s they shrewdly exploited Toyota's desire for an alliance with China's strongest domestic maker, state-run Shanghai Automotive, to secure a sweeter deal with GM. Toyota compounded its problems by turning up its nose at an overture from Guangzhou Automobile, the next-best ally, allowing Honda to rush in and close a deal. Finally, in 2002, with attractive dance partners disappearing, Toyota was permitted to form an alliance with First Autoworks in Changchun."
"This past September, Toyota announced plans to spend $460 million on a plant to produce Camry sedans with Guangzhou Automobile and cooperate with FAW in producing Prius hybrids, now made only in Japan. Bringing hybrids to China is a bold step that signals Toyota's commitment to get in the game. Most Japanese manufacturers are loath to take leading technologies to China for fear they will be stolen. And Chinese consumers aren't exactly clamoring for environmentally friendly cars--especially if they have to pay extra for the privilege of driving them. But the decision makes an important statement. Beijing is eager to promote clean, fuel-efficient vehicles and has made it clear that it expects Toyota to share its best technology with Chinese partners as the price of admission to China's market."
The Chinese aren't the only ones hoping to get their hands on Toyota's hybrid technologies. During a trade mission to Tokyo in November, California Governor Arnold Schwarzenegger made a point of seeing Cho to urge him to build a Prius factory in his state. Cho says Toyota intends to manufacture some form of hybrid vehicle in the U.S. by 2006 and that it will decide on a location within the next few months. In the meantime Toyota is scrambling to meet U.S. demand for hybrids. It will double to 100,000 the number of Prius sedans it ships to the U.S. this year, and it is rolling out sleek hybrid versions of its Highlander and Lexus SUVs. Critics say Toyota is losing money on each hybrid car it sells, but securing early dominance in the hybrid market is likely to yield future dividends."