What cross your mind when someone says Toyota? The answer is car and automobiles manufacturer. Toyota is one of the largest automobiles companies of the world today in terms of manufacturing automobiles and revenue collection. Toyota success is largely due to its working culture and continuous improvement.
Let us go deep down memory lane to track Toyota’s success to the top from its humble beginnings as a textile machinery manufacturer in the mill town of Koromo-now Toyota City.
Toyota Company began in 1891 in Japan when cars barely existed. Toyota was founded by, who was born in the family of farmers but went on to become “King of Japanese Inventions”.
Sakichi Toyoda a Japanese inventor and industrialist invented, designed and patented Toyoda Model G Automatic Loom in 1924. His son used same model to start automatic loom manufacturing. He also went on exhibit the circular loom at the Fourth Inventors Exposition in Tokyo in 1932.
Early Years of Toyota
The manufacturing and production of Toyota automobiles officially started in 1933 as a division of Toyoda Automatic Loom Works under Kiichioro Toyoda. The first ever vehicle manufactured by Toyota were the A1 passenger car and the G1 truck in 1935.
Up to 1937, vehicles were sold under the name Toyoda, so Toyota Motor Company was established as independent company in 1937.
The Great Kanto Earthquake of 1923 completely destroyed Japan’s railway services. There was huge demand for vehicles in Japan, so American company such as Ford and General Motors entered Japan’s market to enhance their business. The world war brought heap of changes in Japan. It became obligatory to use domestic parts in Japan starting in 1938 making it hard for the American Companies.
Till then Toyota had already manufactured its first model vehicles, which increased the problem for Ford and General Motors forcing them to halt their production. Toyota reaped the benefits of restriction imposed by the government and went on to largest selling vehicle manufacturer within few years and this stat.
Growth over the Years of Toyota
Toyota struggled and earned its way to the top; its rise wasn’t quick or inevitable. The company did not get overnight success. Toyota gradually improved over the years to overtake other automobiles manufacturer. Till the early 1980s, Ford and GM made bigger, better looking and plusher cars than Toyota. Toyota focused making reliable and fuel efficient car during this period and this contributed a lot in Toyota success.
Toyota closed the gap among its competitors little by little, improvement by improvement. Toyota’s progression is best captured by the Japanese word jojo: “slowly, gradually, and steadily ” and this is the success mantra for Toyota.
Toyota cares about everything, they even measure the sound car makes when it door opens and closes. Management technique is totally different from other business school and multinational company. So it’s hard to emulate Toyota. Toyota started making reliable and full efficient cars but now it also tops the list of making luxury cars.
Toyota means strong and reliable cars. That was the brand image of Toyota in its early years and seed of success for Toyota. Now it is the global leader of automobiles manufacturer.
Despite all its success and good works, Toyota has never strayed far from controversy. Toyota had to recall its car and trucks in several campaigns around the world. Toyota recalled 9 million cars and trucks in 2009 after several complaints were registered for unintended acceleration of vehicles.Similarly in 2012, Toyota recalled 7.43 million vehicles worldwide to fix malfunctioning power window switches. Although Toyota never agreed to be fault at problem, it agreed to pay fine of $1.2 billion for concealing information and misleading the public about the safety issues behind the recalls on Toyota and Lexus vehicles affected by unintended acceleration.
Present Situation of Toyota
In 2014 Toyota became the world’s largest automaker. As of September 2018, Toyota is the sixth largest company of the world by revenue. As of 2017, Toyota consisted of 364445 employees worldwide. Started as single division unit, now Toyota manufactures its vehicles under five brands, including the Toyota brand, Hino, Lexus, Ranz, and Daihatsu. Toyota is the perfect success example of slow and steady wins the race.
Factors for Toyota Success
The list of Key Factors for Toyota Success are as follows:
- Continuous Improvement
Toyota has been able to make continuous improvement over the years. Some may argue about being slow in their development. But this slow and continuous improvement has played a critical role in toyota success.
- Focused strategy
Toyota focused on making fuel efficient and reliable car. Their kept working on that same strategy for over the years and carried it out successfully. Toyota trains its employees in “Toyota Production System” (TPS). This assist them to create the high quality vehicles at the lowest cost and fastest pace.
- Research and Development
Toyota are never know for making quick move. They generally take time to make business decision and this actually has played a significant role in Toyota success. Before making any business move and innovation, Toyota works on research. They take time for research and development and come out with the best.
- Operational Efficiency
Over the years Toyota has been able to achieve operational efficiency. It has minimized waste and redundancy and successfully utilized its workforce, technology, business process and to get best out of them.