The uncertainty of toyota as the new world number one carmaker

Abstract

In 2007, the sales volume of Toyota group’s vehicles as a whole recorded 9,366,418 units, which is slightly behind General Motors’ sales, whereas its production volume reached 9,497,754 units, surpassing that of General Motors (GM). This was largely attained by a rapid growth of its overseas production and sales at the start of the twenty-first century, after production and sales stagnation for ten years (see Figure 4.1). It is as if Toyota deployed its explosive global strategy after patient preparation during the 1990s, a decade of stagnation for the Japanese economy and trade conflicts with the USA. In addition, Toyota successfully launched its first hybrid car, the Prius, with a reasonable price in 1997, and became an innovative leading company in the field of ecologically friendly cars. This new approach to Toyota’s product strategy has increased its share in the North American market, where the old ‘big three’ are suffering, and which is now the most important market for Toyota, accounting for 36 per cent of its global sales in 2006, whereas the share of its sales in the Japanese market reduced from 51 per cent in 1990 to 35 per cent in 2000, and to only 21 per cent in 2006. After such a striking success in its foreign markets, Toyota’s global competitive edge now seems solidly established and invincible, and its high production efficiency and products quality are assured by the famous Toyota Production System (TPS). However, during the 1990s Toyota revised its human resource and productivity management system, which constituted the core of TPS founded by Taiichi Ohno, as if Toyota had changed course in its evolutionary trajectory.