Toyota case: the power of reinvention

Toyota is a primarily automobile manufacturing company that almost everyone knows, either because they have or had a vehicle of that brand, or simply because they know from popular knowledge. In any case, Toyota is a Japanese multinational that has a history of 90 years and has factories and offices in various countries.

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Throughout its years, it has set trends with technological innovations that positioned it as the second-largest automaker in the world after Volkswagen, according to a 2019 report. In addition, as if this were not enough, Toyota is also listed on the Tokyo Stock Exchange, and the range of products it markets includes not only the manufacture and sale of automobiles but also vehicle maintenance in general and also robots.

The objective of this new case study is to explore the most relevant aspects of Toyota's history, its innovations that make the difference from other car manufacturers, and how the passage of time did not prevent it from reinventing itself until it became the giant that it is today. Learn more about the Toyota case.

Toyota history

Toyota's beginnings date back to 1933 and do not appeal to the classic story of necessity that we have seen in other case studies. Its founder, Toyoda Automatic Loom, was not an engine fanatic or romantically thinking of changing people's lives, but was a loom maker who started a side business producing automobiles with his son.

After manufacturing its first car models between 1934 and 1936, Toyota Motor Corporation established itself as an independent company. Later, during World War II, it turned to manufacture trucks for the Imperial Japanese Army.

Due to the tremendous shortage in Japan, the military trucks being produced were conspicuously simple. And as if that were not enough, they were able to bomb the Toyota factories with a programmed attack, but the end of the war prevented the disaster.

Following World War II, car production resumed in 1947 with the launch of a new model, the SA. Then, in 1953, five units were exported to El Salvador, becoming the first country in the American continent to receive Toyota brand vehicles and the first expansion to the West of the Japanese multinational.

The following year, Toyota continued with its chain of expansion to other countries such as Brazil and Thailand, and thanks to that, the United States was able to access the first vehicles. In 1957 the American divisions of Toyota (Toyota Motor Sales) were created and also in the Brazilian market with Toyota de Brasil SA.

The expansion continued throughout the '70s. At that time the founder created the "just in time" method, and this implementation allowed the company to reach levels of production that no company had reached before within the world of automotive.

In 1982 Toyota Motor Company and Toyota Motor Sales merged to form a single company renamed Toyota Motor Corporation. From there, Toyota continues its expansive career in other countries. This time its objective was aimed at the European market, reaching France and the United Kingdom respectively. In turn, the US market grew exponentially, opening different branches in cities such as California and New York.

In 2006, Toyota overtook Ford in total US vehicle sales, and while it regained its position the following month, it lost it again the following month due to high gas prices. In the first quarter of 2007, Toyota overtook General Motors for first place in the US market.

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The crisis of the recession

During the 2008 Great Recession that hit the United States, Toyota cut its production by 50% to reduce inventories and deal with falling sales in 2009. This was the beginning of a series of unfortunate events in Toyota's history that continued with the forced revision of 2.3 million cars in the United States for technical problems that accelerated the vehicles. However, it was later revealed that these were not production faults but misuse by the users who inadvertently accelerated the cars.

But it will not be until the earthquake and tsunami of 2011 that the company saw its continuity threatened, losing the supply chain in that catastrophe, which produced the largest drop in production that the company suffered in history since its inception. Consequently, Toyota lost its brand leadership as the world's largest manufacturer that it had previously won.

However, as a good resilient, and prosperous company, Toyota managed to recover from the crisis in less than a year, so in 2012 it had already rebounded as the world leader in automobile production and sales.

As of 2018, the company began a kind of strategic alliance with the Uber company, which led it to invest 500 million dollars to jointly develop autonomous vehicles.

Leadership based on constant innovation

In 2018, Toyota presented its first autonomous vehicle prototype, in which people do not need expertise in driving cars, since the design of these autonomous vehicles allows them to react to dangerous circumstances without the need for human intervention. Likewise, the Japanese company plans in its alliance with Uber to develop autonomous vehicles to launch them in the American transport service.

One of the most important and expected innovations in recent years is the launch of space exploration vehicles. In this context, the Japan Aerospace Exploration Agency signed an agreement with Toyota to jointly create space exploration vehicles, prioritizing the objectives of colonizing the Moon and Mars.

Finally, it is worth noting its manufacturing philosophy called the "Toyota production system", which has been adopted by many companies in the rest of the world. This system includes the implementation of factories in different countries, where they manufacture or assemble vehicles destined for local markets. In this way, over the years Toyota has achieved a significant presence in a large number of countries that have opened factories to produce automobiles throughout the globe.

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In final words, we have to say that the Toyota case, like so many other companies that have shown great business and market dominance, has managed to perpetuate itself over time and maintain its leadership as one of the largest automobile brands in the world. Not in vain did they overcome the crisis of the 2008 recession, not in vain do they join forces with other power companies to build important and millionaire businesses... Not in vain are they collaborating to once again lead human beings to conquer outer space.