Toyota's expansion and hybrid vehicle market dominance in 2005

Toyota Corporation

Industry Facts

The objective of this work is to research Toyota Corporation in relation to the car industry by providing information concerning the history, current mission and purpose, locations and number of employees, product and service description, and market analysis.. This work will further research the competition both direct and indirectly, the promotional tactics, pricing tactics and price tactics inclusive of distribution in relation to retailers, wholesalers and any relevant others.

In a news release May 2, 2005 it was stated that "Toyota announced today a $120 million expansion of its engine and transmission plant here, boosting employment by 150 to about 1,150." (TOYOTA News Release Online) Apparently in 2007 Toyota Motor Manufacturing in West Virginia will begin the manufacture of 240,000 more automatic transmission a year than are presently being manufactured bringing the total units manufactured up to 600,000 units. Further stated is that fact that Toyota will have the capability of manufacturing 1.66 million cars and trucks per year, 1.44 million engines, with 37,000 employed in the U.S. Direct investment amount is in excess of $16.6 billion including annual parts, materials, goods and services that have been purchased by Toyota from U.S. suppliers in the amount exceeding $25 billion. Toyota has practically every benefit of market segmentation in that the market is very well covered due to the production of its vehicles in the U.S. which are the: "Avalon, Camry, Corolla, Matrix, Sienna, Solara, Sequoia, Tacoma, Tundra, and the Lexus RX 330. The chart below labeled figure 1.0 provides information concerning the sales, growth, number of employees, and employee 1-year growth for the company. Recent news reports for April and May of 2005 include information stating that increases in production will be seen in Thailand with a Toyota Camry plant to open in Russia as well as production increases in Indonesia.

Source: Hoovers Online

Industry Must Join in Building Hybrid Cars

Metaldyne Corporation CEO, Tim Leuilette, announced to a group of auto industry executives that the industry must join together in the initiative to produce cars powered on hydrogen fuel cells. According to Leuilette the only way of accomplishing this is if the, "auto industry flexes its lobbying muscle and pushes Congress to enact a gas tax to pay for research and development. Otherwise, according to Leuliette, the United States will become even more dependent on shrinking foreign oil supplies. Toyota is the second-largest carmaker worldwide and reported that it intends to increase its' lead over Ford. Toyota is expected to remain the worlds most profitable carmaker after making a net profit last year of double its' nearest competitor. Further stated is that, "Japanese manufacturers have been able to steal market share from the American producers in their home market, recently starting to compete against U.S. pick-up trucks and large offroaders, the most profitable vehicles.

Toyota is also rapidly gaining share in Europe and is building new factories there as well as in China and the U.S. On Tuesday the scale of the problem facing U.S. carmakers was underlined when Ford slipped back into loss in its automotive business, although record financial services profits helped it beat its own forecasts for the second quarter. According to CEO, Don Leclair the north American market had already been sacrificed through reduction of the least profitable sales. Leclair further predicted that the high stock prices of automobiles is the reason for the price war in the U.S." And finally stated was that, " Toyota is aiming to take 15 per cent of the world car market in the next decade, almost exactly on a par with GM." (NewsTarget, 2005)

Summary

It is clear that with the demand presently being experienced in the auto industry and one that continues to show evidence of further growth in relation to hybrid vehicles that Toyota is a leader in the market as well as in the industry. Combined with the information that production increases are set for several countries and new production plants are being planned, sales for the upcoming fiscal years should notice a significant increase over previous years financial reporting.