Monday, 22 December 2014

Why Toyota is World's Leading Brand

Brief History of Toyota:
                                        
              The official Toyota history is, like that of most companies, fairly glossy and bare-bones. Sakichi Toyoda, a prolific inventor, created the Toyoda Automatic Loom Company based on his groundbreaking designs, one of which was licensed to a British concern for 1 million yen; this money was used to help found Toyota Motor Company, which was supported by the Japanese government partly because of the military applications. The Japanese relied on foreign trucks in the war in Manchuria, but with the Depression, money was scarce. Domestic production would reduce costs, provide jobs, and make the country more independent. By 1936, just after the first successful Toyoda vehicles were produced, Japan demanded that any automakers selling in the country needed to have a majority of stockholders from Japan, along with all officers, and stopped nearly all imports.
                  Toyoda's car operations were placed in the hands of Kiichiro Toyoda, Sakichi Toyoda’s son; they started experimenting with two cylinder engines at first, but ended up copying the Chevrolet 65-horsepower straight-six, using the same chassis and gearbox with styling copied from the Chrysler Airflow. The first engine was produced in 1934 (the Type A), the first car and truck in 1935 (the Model A1 and G1, respectively), and its second car design in 1936 (the model AA). In 1937, Toyota Motor Company was split off. From 1936 to 1943, only 1757 cars were made – 1,404 sedans and 353 phaetons (model AB), but Toyoda found more success building trucks and busses.
 In 1959, the company opened its first plant outside Japan - in Brazil. From that point on, Toyota maintained a philosophy of localizing both production and design of its products (that is, adapting vehicles to the places they will be used, as well as building them there). This builds long-term relationships with local suppliers and local labor. Part of this also means that Toyota does not merely build vehicles overseas, but also designs them there, with a network of both design and R&D facilities in North America and Europe.
While Toyota built good near-luxury cars, sales of the Cressida and Crown were not especially strong, especially given the brisk trade in Corollas and Camry’s.                                     
           Toyota first caught the world’s attention in the 1980s, when it became clear there was something special about Japanese quality and efficiency. Japanese cars were lasting longer than American cars and required less repair. And by the 1990s it became apparent that there was something even more special about Toyota compared to other Automakers in Japan (Womack, Jones and Roos, 1991).It was not eye-popping car design or performance thought the ride was smooth and the designs often very refined. It was the way Toyota engineered and manufactured the autos that led to unbelievable consistency in the process and product. Toyota designed autos faster, with more reliability, yet at a competitive cost, even when paying the relatively high wages of Japanese workers. Equally impressive was that every time Toyota showed an apparent weakness and seemed vulnerable to the competition, Toyota miraculously fixed the problem and came back even stronger. Today Toyota is the third-largest auto manufacturer in the world, behind General Motors and Ford, with global vehicles sales of over six millions per year in 170 countries. However, Toyota is far more profitable than any other auto manufacturer. Auto industry analyst estimate that Toyota will pass Ford in global vehicles sold in 2005, and if current trends continues, it will eventually pass GM to become the largest Automaker in the world.
               
Profit Margin and Market Share:
                                                    
               Every automotive industry insider and many consumers are familiar with the Toyota’s dramatic business success and world- leading Quality:
§  Toyota’s annual profits at the end of its fiscal year March 2003,was $8.13 billion larger than the combined earning of GM, Chrysler, and Ford, and the biggest annual profit for any auto maker in at least a decade. Its net profit margin is 8.3 times higher than the industry average.
§  While stock prices of the Big 3 were falling in 2003, Toyota’s shares had increased 24% over 2002. Toyota’s market capitalization (the total value of the company’s stock) was $ 105 billions as of 2003-higher than the combined market capitalization of Ford, General Motors, and Chrysler. This is an amazing statistic. Its returns on assets are 8 times higher than the industry average. The company has made a profit every year over the last 25 years and $20-$30 billions in its cash wars chest on a consistent basis.
§  Toyota’s has for decades been the number one automaker in Japan and a distant fourth behind the “Big 3” automakers in North America. But in August of 2003,for the first time , Toyota sold more vehicles in North America than one of the “Big 3” automakers(Chrysler).It seems that Toyota could eventually become a permanent member of the “Big 3” U.S. automaker.(Of 1.8 millions Toyota/Lexus vehicles sold in North America in 2002,1.2 million were made in North America. Toyota is rapidly building new production capacity in the U.S. at a time when U.S. manufacturer are looking for opportunities to close plants, reduce capacity and move production abroad.)
§  In 2003 the Toyota nameplate was on track to sell more vehicles in the U.S. than either the two brand names that have led U.S. sales for the past 100 years-Ford and Chevrolet. Camry was the top selling U.S. passenger car in 2003 and five of the years prior. Corolla was the top selling small car in the world. 
§  Toyota not long ago was known for making small, basic transportation vehicles, yet in the ten years leaped out to become the leader in luxury vehicles. Lexus was introduced in 1989 and in 2002 outsold BMW, Cadillac, and Mercedes-Benz in the U.S. for the third year in a row.
§  Toyota invented “lean production”(also known as “the Toyota production system” or “TPS”),which has triggered a global transformation in virtually every industry  to Toyota’s manufacturing and supply chain philosophy and methods over the last decades. The  Toyota Production is the foundation of dozens of books on “lean” including two best sellers: The Machine that changed the World: The story of lean Production (Womack,Jones&Roos,1991)and Lean thinking (Womack&Jones,1996). Toyota employees are sought out by companies in almost every industry throughout the world for their expertise.
§  Toyota has the fastest product development process in the world. New cars and trucks take 12 months or less to design, while competitors typically require two to three years.
§  Toyota is benchmarked as the best in class by all of its peers and competitors throughout the world for high quality, high productivity, manufacturing speed, and flexibility. Toyota automobiles have consistency been at the top of quality ranking by J.D. powers and Associates, Consumers Reports, and others for many years. 
            
 Successful Products: 

         Much of the Toyota success comes from its astounding quality reputation. Consumers know that they can count on their Toyota vehicle to work right the first time and keep on working, while most U.S. and European automotives companies produce vehicles that may work when new but almost certainly will spend time in the shop in a year or so. In 2003 Toyota recalled 79 % fewer vehicles in the U.S. than Ford and 92 % fewer than Chrysler. According to 2003 study in Consumer Report, one of the most widely read magazines for auto-buying customers, 15 of the top 38 most reliable from any manufacturer over the last seven years were made by Toyota/Lexus. No other manufacturer comes close. GM, Mercedes, and BMW have no cars on this list. Not a single Toyota is on the dreaded “vehicles to avoid” while a handful of Fords, almost 50 percent of the GMs, and more than 50 percent of the Chryslers are to be avoided, according to Consumer Reports.
      Here are some other statistics from Consumers reports’ 2003 annual auto issue:
§  In the small Car Category (Toyota Corolla, Ford Focus/Escort,  GM Cavalier, and Chrysler Neon), Toyota won each of the last three years for overall reliability ,as well the prior three years, and predicted reliability for the 2003 model year.
§  For family sedans, the Toyota Camry beat out the Ford Taurus, the GM Malibu, and Dodge Intrepid, winning in the last three years, the three prior years, and predicted reliability for the 2003 model year.
§  More than half of all Toyota used cars are singled out as “recommended for purchased,” compared with less than 10 percent of the Fords, 5 percent of the GMs, and none of the Chryslers.
§  Toyota/Lexus has also dominated the J.D.  Powers “initial quality and long-term durability ranking for years. Toyota Lexus was again the # 1 most reliable of Car, according to the J.D.  Powers 2003 quality survey, followed by Porsche, BMW, and Honda.
                                            
      
 Toyota’s Global Vision and Mission:
                                                                       
                          Mission of Toyota is to provide safe & sound journey. Toyota is developing various new technologies from the perspective of energy saving and diversifying energy sources. Environment has been first and most important issue in priorities of Toyota and working toward creating a prosperous society and clean world.
 In 1995, when Okuda was executives vice president of, he directed the management Planning department to create a vision in order give concrete shape to what Toyota would like in ten years. Behind this vision lay ambitious quantitative goal for such things as consolidated sales growth, operating profits, and numbers of vehicles to sale to be achieved by 2005, goals that kept sight of what was occurring at GM and Ford.” Some people call becoming number one in the world ‘hegemony’”, said Okuda,”but the chairman (then Shoichiro Toyoda) and I share an underlying commitment to that goal.”
                                               Toyota had already become a giant corporation, one with a tremendous influence on society. A policy to expand even further necessitated staying in the harmony with the society.”From the 20th to the 21st centuries Okuda predicted,”the new winds of world environmental issues, globalization, and the IT revolution have swept across the automotive industry. Within five or ten years, there will be a major paradigm shift that will redefine the car industry and even cars themselves. 
             
                    Toyota President Katsuaki Watanabe, in his 2007 new year’s greeting, said that Toyota must implement thorough measures concerning quality and reinforce the foundations of manufacturing by implementing additional localization measures, including human resources development from a global perspective and further support for local affiliates to operate autonomously. Toyota intends to introduce a flexible fuel vehicle (FFV) that can run on 100% bio-ethanol in Brazil. The year 2007 will be the 70th anniversary of the establishment of Toyota Motor Corporation. Toyota recently put special Komatsu stamping equipment into its San Antonia plant; the new presses use a third less energy than the prior stumpers, and are quiet enough that employees no longer need sound protection gear. The stamps are smaller as well, so the factory ceilings can be lowered, dramatically cutting heating and cooling costs. The new stamps will be used in all Toyota’s new North American plants, according to Automotive News, and will be retrofitted to older plants. The main difference is the technology, which uses servo motors rather than hydraulics. Toyota is the world’s first automaker to use the new technology.
 
Toyota’s Manufacturing Plants and Operational Countries:

          Toyota is the seventh largest company in the world and the second largest manufacturer of automobiles, with production facilities in 28 nations around the world - and the highest-production facility of any non-domestic automaker in the United States. Generally, Japanese plants are flexible and produce multiple models, while foreign (especially American) plants are devoted to a single model. In June 2006, Toyota had 52 overseas manufacturing companies in 27 countries outside Japan; Toyota markets vehicles in more than 170 countries / regions. The Toyota Motor Group sold about 8.8 million Toyota/Lexus, Daihatsu and Hino vehicles worldwide in 2006, marking a new record. In 2007, the Group is aiming for a 6 percent increase in worldwide sales.


             Now here is the detail of Toyota’s plants all around the world.




North America: United States, Canada, Mexico:

Location
Start
Date
Models (2002)
Models (2003)
Models (2006)
Employees and Capacity (2003)
Notes
Fremont, California, US (NUMMI)
1984
Corolla - 157,561
Tacoma - 151,566
Voltz* - 8,108
Pontiac Vibe - 59,552
Total - 369,836
Corolla - 157,561
Tacoma - 161,566
Voltz* - 1,733
Pontiac Vibe - 74,223
Total - 395,083
Corolla
Vibe
Total: 428,633
5,600 people
370,000 vehicles
Former poor-quality GM plant. UAW. Joint venture. Currently high quality. 5,400 employees in 2006. Japanese president. Free daily tours.
Huntsville, Alabama, US
2003
V6 and V8 engines for Tundra and Tacoma
52,318 V8s

350 people (500 in 2005)
120,000 V8
130,000 V6

Tijuana, Mexico
2002
n/a
Tacoma
34,465 Tacomas
150 people (700 in 2004)
30,000 trucks, 180,000 Tacoma beds
Japanese president; expanded in 2007 to capacity of 50,000. 760 employees in 2007.
Cambridge, Ontario, Canada
1987
95,030 Corollas
42,406 Solaras
80,582 Matrix
158,269 engines
135,428 Corollas
78,781 Matrix
13,334 RX330
200,317 I-4 engines
317,433
Corolla,
Matrix,
RX350
4,230 people
250,000 vehicles
150,000 engines
4,602 employees; North American president; Matrix to be replaced by Blade in 2008
Princeton, Indiana, US (TMMI)
1996
109,025 Tundra
77,561 Sequoias
105,663 Tundra
66,671 Sequoias
119,196 Siennas
324,190 Tundras,
Sequoias,
Siennas
4,700 people
500,000 vehicles
2006: 4,645 people; FX-SX starts Q1 2008
Princeton, Indiana (Toyota Motor Mfg)
1996
n/a
4-speed Camry automatics
5-speed Sienna, RX330 automatics
Corolla/Matrix/Vibe engines

360,000 transmissions

Georgetown, Kentucky (US)
1986
Avalon
Camry
Camry Solara
Avalon
Camry
Camry Solara
Sienna
Avalon
Camry
Solara
Camry Hybrid
6,900 employees
500,000 vehicles
500,000 engines
Toyota’s largest facility outside of Japan; highest production of any foreign plant in the US. Also builds four and six cylinder engines and powertrain parts. American president. Builds Toyota’s first American-made hybrid.
Buffalo, West Virginia (US)

201,273 Fours
152,070 V6s
360,957 Trans
225,402 Fours
171,808 V6s
382,510 Trans

930 people
340,000 Fours
200,000 Sixes
360,000 Trans
Builds four cylinder and V6 engines and automatic transmissions. Started making automatic transmission gears in 2006.
Delta, B.C. (Canadian Autoparts Toyota)
1983
Wheels
Wheels

1.45 million wheels
Makes aluminum alloy wheels for the North American and Japanese markets. “CAPTIN”
Long Beach, CA (TABC)

Parts (see description)
Parts (see description)

Not listed
Toyota’s first U.S. manufacturing plant; produces sheet metal components, steering columns, catalytic converters, and coated catalytic substrates for US and export. Assembles commercial trucks for Hino Motors to be sold in North America and beginning in 2005, will assemble 4-cylinder engines.
San Antonia, TX (TMMTX)
2006
None
One Tundra per minute starting in 2007

2,100 people in 2007
$1.3 billion plant, capacity 200,000/year, production started Nov 2006.
Blue Springs, Mississippi
2010?
None
150,000 Highlanders per year starting in 2010

2,000 people in 2010
$1.3 billion plant started in 2007, near Tupelo
Cambridge, Ontario, Canada
1987
95,030 Corollas
42,406 Solaras
80,582 Matrix
158,269 engines
135,428 Corollas
78,781 Matrix
13,334 RX330
200,317 I-4 engines

4,230 people
250,000 vehicles
150,000 engines

Ontario, Canada
2009?




New plant to build RAV4


Europe and Africa:
Toyota first entered the United Kingdom in 1992, and currently employees nearly 3,000 people there. The Avensis and Corolla are made at Burnaston (near Derby), and engines are made at Deeside, North Wales. The Bernaston plant, Toyota’s first auto assembly plant in Europe, can make up to 220,000 cars per year.
Toyota seems satisfied with its British factories, despite the strength of the pound against the euro. Toyota argued that, while other companies (particularly Ford) are moving to continental Europe to get better exchange rate, Toyota was happy with the efficiency of its British plants, particularly the Burnaston factory.


TMC = Toyota Motor Corp., TEMA = Toyota Motor Engineering & Manufacturing
North America,Inc., TICO = Toyota Industries Corp.
Location
Name
Start of operations
Toyota
equity
Products
Number of employees
2006 production
Czech Republic
Toyota Peugeot Citroën Automobile Czech (TPCA) *
Feb. 2005
TMC 50%
Peugeot-Citroën 50%
Aygo
3,345
100,000
France
Toyota Motor Manufacturing France S.A.S. (TMMF)
Jan. 2001
TME 100%
Yaris, engines
3,829
250,000 Yaris
192,000 engines
Kenya
Associated Vehicle Assemblers Ltd.
Aug. 1977
None
Hiace, Land Cruiser
360
1,000
Poland
Toyota Motor Manufacturing Poland (TMMP)
Apr. 2002
TME 94.3%
Transmissions, engines
1,982
331,000 transmissions
102,000 engines
Poland
Toyota Motor Industries Poland (TMIP)
Mar. 2005
TME 60%
TICO 40%
Engines
932
45,000
Portugal
Toyota Caetano Portugal.
Aug. 1968
TMC 27%
Dyna, Hiace, Optimo
950
4,000
Russia
Toyota Motor Manufacturing Russia (TMMR)
Dec. 2007
TMC 80%
EBRD 20%
Camry
600
South Africa
Toyota South Africa Motors
Jun-62
TMC 75.0%
Corolla, Dyna, Hiace, Hilux, Fortuner, engines
8,690
147,000 vehicles
96,000 engines
Turkey
Toyota Motor Manufacturing Turkey (TMMT)
Sep. 1994
TME 90%
Mitsui 10%
Corolla
3,421
177,000
U.K.
Toyota Motor Manufacturing (UK) (TMUK)
Sep. 1992
TME 100%
Avensis, Corolla, engines
4,897
282,000 vehicles
175,000 engines





Toyota’s Asian Factories:
TMC = Toyota Motor Corp., TEMA = Toyota Motor Engineering & Manufacturing North America,Inc., TICO = Toyota Industries Corp.

China:

Name
Start of operations
TMC-related equity
Products
Number of employees
2006 production
Tianjin Jinfeng Auto Parts Co., Ltd. (TJAC)
July 1997
TMC 30%
Steering assy, propeller shafts
410
Tianjin Fengjin Auto Parts Co., Ltd. (TFAP)
May 1998
TMC 90%
Continuous velocity joints, axles
350
Tianjin FAW Toyota Engine Co., Ltd. (TFTE)
Jul 1998
TMC 50%
Engines
800
134,000 engines
Tianjin Toyota Forging Co., Ltd. (TTFC)
Dec 1998
TMC 100%
Forging parts
100
Tianjin FAW Toyota Motor Co., Ltd. (TFTM)
Oct 2002
TMC 40%
TMCI 10%
Corolla, Vios, Crown, Reiz
2,310
209,000
FAW Toyota (Changchun) Engine Co., Ltd. (FTCE)
Dec 2004
TMC 50%
Engines
250
Toyota FAW (Tianjin) Dies Co., Ltd. (TFTD)
Dec 2004
TMC 90%
Stamping dies for vehicles
160
Guangqi Toyota Engine Co., Ltd. (GTE)
Jan 2005
TMC 57.6%
TMCI 12.4%
Engines, engine parts (cams, cranks)
50
Sichuan FAW Toyota Motor Co., Ltd. (SFTM) *
Dec 2000
TMC 45%
TTC 5%
Coaster, Land Cruiser, Prado, Prius
1,800
16,000
Guangzhou Toyota Motor Co., Ltd. (GTMC)
May 2006
TMC 30.5%
TMCI 19.5%
Camry
1,400
61,000

Other Countries of Asia:

Location
Name
Start of operations
TMC-related equity
Products
Number of employees
2006 production
Bangladesh
Aftab Automobiles*
June 1982
None?!
Land Cruiser
110
Taiwan
Kuozui Motors, Ltd.
Jan 1986
TMC 51.7%
Camry, Corolla, Hiace, Vios, Zace, Wish, Yaris, engines, stamping parts
2,486
97,000
India
Toyota Kirloskar Motor Private Ltd.(TKM)
Dec 1999
TMC 89%
Innova, Corolla
2,567
44,000
India
Toyota Kirloskar Auto Parts Private Ltd.(TKAP)
July 2002
TMC 64%
TICO 26%
Axles, propeller shafts, transmissions
742
Indonesia
PT. Toyota Motor Manufacturing Indonesia
May 1970
TMC 95%
Dyna, Fortuner, Innova, Kijang, engines
3,949
60,000 cars
233,000 engines
Indonesia
P.T. Astra Daihatsu Motor
Jan 1992
TMC 61.75%
Avanza
5,045
63,000
Malaysia
Assembly Services Sdn. Bhd (ASSB)
Feb 1968
UMW Toyota 100%
Camry, Corolla, Vios, Hiace, engines, Hilux, Innova, Fortuner
3,232
54,000 cars
11,000 engines
Malaysia
Perodua Manufacturing Sdn. Bhd
Aug. 1994
TMC 51%
Avanza
6,486
28,000
Pakistan
Indus Motor Company Ltd.*
Mar. 1993
TMC 12.5%
TTC 12.5%
Corolla, Hilux
1,651
35,000
Philippines
Toyota Autoparts Philippines Inc. (TAP)
Sep. 1992
TMC 95%
Transmissions, continuous velocity joints
578
221,000 transmissions
Philippines
Toyota Motor Philippines Corp. (TMP)
Feb. 1989
TMC 34%
Camry, Corolla, Innova
1,289
14,000
Thailand
Siam Toyota Manufacturing Co., Ltd.
Jul 1989
TMC 96%
Engines, propeller shafts, casting (block, head)
1,219
404,000 engines
Thailand
Toyota Auto Body Thailand Co., Ltd.
May 1979
TMT 49%
Stamping parts
141
Thailand
Toyota Motor Thailand Co., Ltd. (TMT)
Dec 1964
TMC 86.4%
Camry, Corolla, Vios, Wish, Hilux VIGO, Yaris
6,172
410,000
Thailand
Thai Auto Work Co., Ltd. (TAW)
May 1988
TABJ 20.0%
TABT 60.0%
Fortuner, Hilux VIGO
477
60,000
Vietnam
Toyota Motor Vietnam Co., Ltd.
Aug 1996
TMC 70%
Camry, Corolla, Vios, Hiace, Land Cruiser, Innova
712
14,000
* Produces vehicles other than Toyotas, too.


Toyota’s Plants in South America:

Location
Name
Start of operations
TMC-related equity
Products
Number of employees
2006 production
Argentina
Toyota Argentina
1997
100%
Hilux, Fortuner
2,523
65,000
Brazil
Toyota do Brasil
1959
100%
Corolla, Fielder
2,525
60,000
Colombia
Sociedad de Fabricacion de Automores
1992
28%
Land Cruiser Prado
1,316
7,000
Venezuela
Toyota de Venezuela
1981
90%
Corolla, Dyna, Land Cruiser, Fortuner, Hilux
1,708
23,000



Toyota’s Factories in Japan:

Name
Main products
Start of Operations
Number of Employees
Equity share (%)
Toyota Motor Kyushu, Inc.
Harrier, Harrier Hybrid, Kluger, Kluger Hybrid, IS, ES
1992
4,191
100
Toyota Motor Hokkaido, Inc.
Transmissions, transfers, aluminum wheels, drivetrain parts, etc.
1992
1,702
100
Toyota Motor Tohoku Co., Ltd.
Mechanical and electronic parts
1998
237
100
Toyota Auto Body Co., Ltd.
Hiace, Liteace, Voxy, Noah, Estima, Prius, Land Cruiser, Alphard, Ipsum, Townace, Regiusace, Coaster, Estima Hybrid, Alphard Hybrid, LX470
1945
10,628
56.03
Kanto Auto Works, Ltd.
Century, Crown, Corolla Spacio, Corolla Fielder, Isis, Belta, SC, Auris, BLADE
1946
5,528
50.08
Central Motor Co., Ltd.
Raum, MR-S, Scion xB, Corolla Axio, Corolla hatchbacks
1950
1,194
77
Gifu Auto Body Industry Co., Ltd.
Hiace
1940
958
47.71
Daihatsu Motor,Co., Ltd.
Rush, Passo, Probox, Succeed, bB, Porte, SIENTA
1907
11,209
51.19
Hino Motors, Ltd.
Dyna, Townace, Liteace, FJ Cruiser, Toyoace, Hilux Surf
1942
9,507
50.11
Toyota Industries Corp.
Vitz, RAV4
1926
10,584
23.51
Tahara plant
Lexus
?
?
100

We know there are more, would anyone care to contribute?







International Diversification and Return of Investment:

                             Toyota has found that international diversification allows it to better exploit its core competence, because sharing knowledge resources across subsidiaries can produce synergy. Also, firm’s returns may affect its decision to diversify internationally .For example ,poor retunes from domestic market may encourage a  firm to expand internationally diversified firms may have access to more flexible labor markets, as the Japanese do in the united states. In June 2006, Toyota had 52 overseas manufacturing companies in 27 countries outside Japan; Toyota markets vehicles in more than 170 countries / regions. The Toyota Motor Group sold about 8.8 million Toyota/Lexus, Daihatsu and Hino vehicles worldwide in 2006, marking a new record. In 2007, the Group is aiming for a 6 percent increase in worldwide sales.

Toyota’s competitive advantage in the automobile sector:

                        There had been this wide, long-standing recognition of Toyota as the premier automobile manufacturer in terms of the unmatched combination of high quality, low cost, short lead-time and flexible production. And Toyota's operating system—the Toyota Production System—had been widely credited for Toyota's sustained leadership in manufacturing performance. Furthermore, Toyota had been remarkably open in letting outsiders study its operations. The American Big Three and many other auto companies had done major benchmarking studies, and they and other companies had tried to implement their own forms of the Toyota Production System. There is the Ford Production System, the Chrysler Operating System, and General Motors went so far as to establish a joint venture with Toyota called NUMMI, approximately fifteen years ago.






Toyota’s Innovation (technology and ideas):
                                                As gas prices continue to soar, American drivers are desperate to find cheaper solutions for the morning commute. Automaker Toyota -- famous for pioneering gasoline-electric hybrid technology -- is prepared to supply that need by producing vehicles powered by ethanol and other alternative fuels. "We're already developing vehicles that can operate in ethanol-rich Brazil," said Toyota North America President Jim Press on Tuesday. "We're optimistic that we can offer similar vehicles to American consumers." Press did not expand on the company's plans for flexible fuels, but noted that Toyota would be expanding its hybrid technology, spearheaded by the Prius model, and is currently developing a plug-in hybrid. "Hybrid technology can be teamed with every other promising technology to make it even more efficient and fuel-stingy, whether it's high-tech gas engines, clean diesels, biodiesel, ethanol, plug-in hybrids or hydrogen fuel cells," Press said. Interest in hybrids has grown proportionately to skyrocketing gasoline prices, but the vehicles still represent a small portion of the overall U.S. market. Roughly 40 percent of the United State's oil still goes to gasoline demand for traditional vehicle use, government figures state. While Toyota is enjoying some success in the hybrid market, American-based competitor Ford has reduced its focus on the technology, moving away from its proposed goal of building 250,000 hybrid vehicles annually by 2010. Ford seems skeptical of the ideas that hybrids will improve the environment, reduce America's dependency on foreign oil, and that enough customers will participate to make it a reasonable investment.


Knowledge to Predict Future Needs Of Industry:

                  Toyota uses its knowledge to predict the future needs of the automobile Industry and going to make hybrid technology. The Toyota Corporation intends to develop a plug-in hybrid vehicle for its demonstration fleet by 2010, according to an announcement made by Chief Executive Officer Katsuaki Watanabe. The planned plug-in hybrids are already under development, with two prototypes currently undergoing demonstration tests by researchers at the University of California. But while existing prototypes operate with nickel-metal-hydride battery packs, Toyota aims for its new hybrids to be equipped with lithium-ion batteries.
                                         Lithium-ion batteries, already widely used in consumer electronics, provide more energy per unit weight than older nickel-metal-hydride batteries, and can store a charge for longer when not in use.
Watanabe cautioned that while successful lithium-ion batteries have already been developed for hybrid electric automobiles, it is premature to assume that such batteries can be mass produced with existing techniques.” As of today in the lab, the small volume of lithium-ion we have already developed is closer to the level we are satisfied with, but that is only in small quality," he said. "There is a huge difference between small volume and mass production of lithium-ion.” The remarks were interpreted as a response to General Motors' (GM) alliance with battery maker A123, which has so far failed to deliver mass production of lithium-ion batteries. Toyota’s other planned efforts in the area of fuel efficiency include the unveiling of new hybrid-only models in 2009, increased investment in the production of ethanol from wood waste, the expansion of a joint Panasonic-Toyota batter factory, the introduction of "clean diesel" V-8 versions of the Tundra pickup and Sequoia SUV and the sale of 1 million hybrid vehicles by 2012. In addition, Watanabe announced the company's intention to meet California's 35 mile per gallon fleet standard "well in advance" of the 2020 deadline. Unlike competitor GM, Toyota is conducting all of its research in-house, rather than in partnership with small or start-up companies. According to Watanabe, this will make technological development "faster and more efficient."

The Training and Development of Personnel’s and Compensation :
                                        
                                    A common expression heard around Toyota is “We do not just build cars, we build people.” Every new product development program, every prototype, every quality defect in the factory, and every kaizen activity is an opportunity to develop people. When former Toyota Motor Manufacturing North American President Atushi (Art) Niimi was asked about his greatest challenge when trying to teach the Toyota Way to his American managers he responded: “They want to be managers not teachers.” He explained that every manager at Toyota is a teacher. Developing exceptional people is their number one priority. This has become ingrained in the Toyota Way as a cultural value throughout the company. It is frequently talked about in other companies, but rarely practiced.
                                           The philosophy of developing people is so pivotal to Toyota that six of the fourteen principles outlined in The Toyota Way are related to it:
                          Principle 1:  Base management decisions on a long-term philosophy even at the expense of short-term financial goals—perhaps the most important long-term investment Toyota makes is in its people and the passion to keep team associates employed for their careers reflects that value.
                          Principle 6:  Standardized processes are the foundation for continuous improvement—as we will see standardized work and job instruction training goes hand in hand and long-term team associates need to learn to see waste and make improvements.
                          Principle 9: Grow leaders who thoroughly understand the work, live the philosophy and teach it to others—teaching is the most highly valued skill of leaders and leaders have to deeply understand the work to teach and coach.
                          
                           Principle 10:  Develop exceptional people and teams who follow your company’s philosophy—Teams depend on well-trained people and part of individual development is learning to work in teams.
                           Principle 11:   Respect your suppliers by challenging them and helping them improve—Suppliers need to have the same talent level as Toyota team associates and are developed in similar ways.
                           Principle 14: Become a learning organization through relentless reflection and continuous improvement—this was intentionally at the top of the hierarchy of the Toyota Way pyramid as becoming a learning organization is the highest level of organizational effectiveness.
  

                 Some might debate whether people are born with talent, or whether it is developed. Toyota’s stand is clear-gives us the seeds of talent and we will plant them, tend the soil, water and nurture the seedlings, and eventually harvest the fruits of our labor. This analogy of planting seeds and growing people is a common one within Toyota, possibly tracing back to the company being founded in a farming community. Of course the wise farmer selects only the best seeds, but even with careful selection there is no guarantee that the seeds will grow, or that the fruits they yield will be sweet, and yet the effort must be made because it provides the best chance of developing a strong crop. Toyota considers people’s native-born gifts to be only about 10% of the total talent picture (or less). In other words, natural talent gifts account for only 10% of the full capability of an individual. Fully 90% or more of what we consider talent in the life of company employees is actually learned through effort and repeated practice. This is the essence of Toyota’s success. Begin with a good foundation— a person who has the capacity and desire to learn and then develop specific talents through repeated effort and practice.


The Toyota’s Production System:
                 Many credit Toyota’s success to aspects of the Toyota Production System, established by Taïchi Ohno and Shigeo Shingo from the late 1950s through 1970 (when it gained the name). It includes aspects of Jidoka, just-in-time production, and kaizen, reducing both inventories and defects. The system is used worldwide, but is only one of the reasons for Toyota’s success.
Jidoka is not letting a defect go from one machine to the next, particularly in automated machinery; essentially, it adds the ability to detect unacceptable quality during the process of production rather than waiting until the end, when it may be hidden. The name itself is a Japanese pun on the term “automation,” adding the character for a person into the middle. Jidoka was actually implemented by the Toyoda power looms before Toyota was created. Jidoka both reduces costs and increases reliability.
Just-in-time production is the principle of having parts ready just as they are needed, rather than maintaining inventories across an assembly plant and in warehouses.  Most writers tend to focus on the cost savings from having less capital tied up in inventory under this system, but there is another advantage: engineering changes (to increase reliability or functionality, or to cut cost) can take effect much more quickly, since stockpiles of parts do not need to be cleared out; and problems with individual parts can be detected much more quickly since they are used closer to the time they are made.









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