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• Toyota’s 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 across6 continents

• Employs ~200,000 people

• 3rd largest automotive manufacturer

1998 Production Comparison Chart

GM

Ford

TOYOTA

VWDaimlerChrysler

Fiat NissanPSA

HondaRenault

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Global auto industry trends

• Overcapacity

• Economic downturn

• Shifting consumer demands

• European trade barrier reductions

Company History

• Established in 1937 out of Sakichi Toyoda’s 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

0

1000

2000

3000

4000

5000

6000

1935 1936 1937 1940 1957 1960 1972 1980 1982 1988 1996 1999

Domestic Production Total ProductionUNITS (thousands)

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 SystemKey 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

• “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

Toyota Production SystemKey Main Concepts

Toyota’s 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