Japan / Korea Trip Presentation:

Toyota
Aaron Fyke Yuki Wada
Gary Mi Grace Webber
Tony Palumbo

Agenda

Headline facts: Toyota

Global auto industry trends
Japanese auto industry history
Toyota company background
Company history
Production history
Business segments

The Toyota Production System

Toyotas strategy
Our questions for Toyota

Headline Facts: Toyota

Toyota has annual sales of $120 Billion
Produces ~5.5 million vehicles per year
From 56 manufacturing plants across
6 continents
Employs ~200,000 people
3rd largest automotive manufacturer

1998 Production Comparison Chart

9,000

GM

8,000
7,000

Ford

6,000

Daimler
VW Chrysler

5,000
4,000
3,000
2,000
1,000
0

T
O
Y
O
T
A

Fiat Nissan

PSA

Honda
Renault

Global auto industry trends

Overcapacity
Economic downturn
Shifting consumer demands
European trade barrier reductions

Company History
Established in 1937 out of Sakichi Toyodas
weaving machine company
Launched first car (SA Model) in 1947
Toyota Production System formed in 1950
based on Just-In-Time principle
First global expansion in 1959 at Brazil
In 1972, cumulative production >10M units

Production History
UNITS (thousands)

Domestic Production

Total Production

6000
5000
4000
3000
2000
1000
0
1935 1936 1937 1940 1957 1960 1972 1980 1982 1988 1996 1999

Business segments
Automotive
Design, manufacture and sales of
passenger cars, recreational vehicles,
SUVs and related parts

Financial services
Provisions of loans to car buyers
and car dealers

Others
Industrial vehicles (forklifts, etc.)

The Toyota Production System

Revolutionized manufacturing industry
At its core is lean
a relentless drive to improve efficiency and
eliminate waste

Beginnings of TPS were born out of

necessity due to lack of resources in
post-war Japan.

Toyota Production System

Key Main Concepts
SMED
Single Minute Exchange of Dies
Promoted flexibility of production runs

JIT
Just In Time manufacturing
Small batches which reduced inventory
costs, tightened relationship with suppliers
and improved quality control

Toyota Production System

Key Main Concepts
5 Whys Quality
Asking Why? 5 times to locate source of
problems
Stopping the production line whenever
there are quality problems to ensure they
are not repeated

Low cost supplier

Long term supplier relationships

Toyotas Strategy
Increase competitive strength through
advanced technology
Environmental technology
fuel consumption, emission, recoverability

Hybrid vehicles and next generation fuel

cells
Cost-reduction efforts
discontinuation, integration of older models

Increased emphasis on financial services

and information communication system

Our questions for Toyota

Current competitive landscape
Local and global competition (Korea,
Daimler-Chrysler, Ford, GM etc.)

Future of automobiles
Development of fuel-cells, integration of
Internet applications and other trends

Japanese auto industry history

From follower to leader
From domestic producer to exporter
Interventionist government