1

Automaker Market Leader

BY:BY:

Khalid AlKhalid Al--HedaryHedary

TOYOTATOYOTA--ALJ KSAALJ KSA

2

TOYOTATOYOTA

Automaker Market Leader AgendaAutomaker Market Leader Agenda

Leader’s Profile & Facts

TOYOTO NETWORK / Distribution

Products & Services 2008

Market Share

Competitive Information

Financial Performance

Culture

Leadership

Strengths Concept

TOYOTA Production System

Innovation

Award

Offensive Strategy

Defensive Strategy

Target Customer

Is TOYOTA Market-Based?

3

LeaderLeader’’s Profile & Factss Profile & Facts

Toyota Motors is 70-years old, established on August 28, 1937 in Japan.

Toyota became the world's largest automaker in the first half of 2008, with

sales of more than 4.8 million cars and trucks, compared with 4.54 million

vehicles for General Motors Corp

TOYOTA ranked 5th of the world's largest corporations in the 2008 Fortune

Global 500.

TOYOTA ranked 1st of the world's largest automaker corporations in the 2008

Fortune Global 500

1st Overseas production starts in 1959 (Brazil)

Has 53 overseas manufacturing companies, in 27 countries/regions.

Has 168 distributors sell vehicles in more than 170 countries/regions.

Number of employees 316,121

More than 8,500 Millions units produced.

More than 8,900 Millions units sold.

4

TOYOTO Network / DistributionTOYOTO Network / Distribution

5

TOYOTO Network / DistributionTOYOTO Network / Distribution

6

Automobile:Passenger Vehicles, diesel & gasoline engines, car air-conditioning compressors, foundry parts, electronics components.

Materials handling equipment: Counterbalanced lift trucks, warehouse trucks, automated storageand retrieval systems, truck mount aerial work platform.

Logistics: Transportation services, logistic planning, operating of disruption centers, collection and delivery of cash and managements of sales proceeds and secure storage.

Textile machinery: Air-jet looms, water-jet looms, ring spinning frames

Products & Services 2008Products & Services 2008

7

World Automobiles MarketWorld Automobiles Market

8

Market ShareMarket Share

&&

Competitive Information Competitive Information

9

U.S Market ShareU.S Market Share

U.S.Market Share - May-08

GM 19.3%

Toyota

18.4%

Chrysler

10.7%

Honda 12%

Nissan 7.2%

Hyundai

5.6%

Volksw agen

2.2%

Mercedes

1.8%

BMW 2.3%

Ford 15.4%

GM

Toyota

Ford

Chrysler

Honda

Nissan

Hyundai

BMW

Volksw agen

Mercedes

Source http://www.usnews.com/blogs/flowchart/2008/6/9/how-toyota-could-become-the-us-sales-champ.html

10

Competitive Information Competitive Information

1,211.4 B$Peugeot

1,722.3 B$Hyundai-Kia

2,673.2 B$Fiat

4,222.9 B$Nissan

5,639.3 B$Volkswagen

5,254.2 B$Honda

5,446.3 B$Daimler

4,278.8 B$BMW

-38,732.0 B$GM

-2,723.0 B$Ford

15,042.5 B$ Toyota

2008

Automaker Profits Ranking

15

5.6 5.4 5.2 4.3 4.2 2.8 1.7 1.2

-2.7

-38.7-45

-40

-35

-30

-25

-20

-15

-10

-5

0

5

10

15

20

1

Profits Rankings - Fortune Global 500

Million $

Toyota

Volkswagen

Daimler

Honda

BMW

Nissan

Fiat

Hyundai-Kia

Peugeot

Ford

GM

Billion USD

Source http://money.cnn.com/magazines/fortune/global500/2008/index.html

11

TOYOTA TOYOTA

Financial Performance ReportFinancial Performance Report

20082008

12

Revenues & ExpenditureRevenues & Expenditure

Net Revenues

143161 165

184198

224

255

280

0

50

100

150

200

250

300

2000 2001 2002 2003 2004 2005 2006 2007

Million USD

Capital Expenditure

910 11 10

11

16 16 16

0

2

4

6

8

10

12

14

16

18

2000 2001 2002 2003 2004 2005 2006 2007

Million USD

SourceSource http://www.toyota.co.jp/en/ir/financial_results/2008/index.htmlhttp://www.toyota.co.jp/en/ir/financial_results/2008/index.html

Billion USD

Billion USD

13

TOYOTA Financial Data 2007TOYOTA Financial Data 2007Source TOYOTA website

14

CULTURECULTURE

Developing and motivating their people to drive excellence throughout the production process

Humility, because without this culture, team member will not be willing to accept that the current way is not the best. (ego is barrier for improvement & Change)

Continues improvement through elimination of waste

Organizing all jobs around human activity in the work place, creating an efficient sequence called standardized work

Quality is their top priority.

Work aggressively to increase quality by identifying the root causes of defected.

“A culture of quality people working together with

shared Toyota Values to continues improve”

15

TOYOTA CULTURETOYOTA CULTURE

CULTURECULTURE

Competitiveness Competitiveness is not about competing with others. is not about competing with others.

It is about improving yourselfIt is about improving yourself

16

LEADERSHIPLEADERSHIP

Since its founding, our company has been aiming to enrich society through car our company has been aiming to enrich society through car

makingmaking. Our goal is to be a "good corporate citizen"Our goal is to be a "good corporate citizen" constantly winning the trust and respect of the international community. Continuing in the 21st century, we we aim for stable longaim for stable long--term growthterm growth, while striving for harmony with people, society and the environment.

Under Toyota's Guiding Principles, we practice openness and fairness in our corporate activities, strive for cleaner and safer car making, and work to work to

make the earth a better place to live.make the earth a better place to live.We would like to thank everyone for their continuing support.

Fujio Cho

Chairman

Katsuaki Watanabe

President

17

Strengths Contributing to Strengths Contributing to

TOYOTA LeadershipTOYOTA Leadership

TOYOTA Production System TOYOTA Production System is always improvingis always improving……....“Philosophy of complete elimination of waste”

18

Strengths ConceptStrengths Concept

Jidoka – Highlighting of problems Just-in-Time – Productivity improvement

- Quality must be built in during

the manufacturing process!

If a defective part or If a defective part or

equipment malfunction is equipment malfunction is

discovered, the machine discovered, the machine

concerned automatically concerned automatically

stops, and operators stop stops, and operators stop

work and correct the problem.work and correct the problem.

- Making only "what is needed, when it

is needed, and in the amount needed!

Producing quality products Producing quality products

efficiently through the complete efficiently through the complete

elimination of waste on the elimination of waste on the

production line production line -- In orderIn order to deliver to deliver

a vehicle ordered by a customer as a vehicle ordered by a customer as

quickly as possible, the vehicle is quickly as possible, the vehicle is

efficiently built within the shortest efficiently built within the shortest

possible period.possible period.

19

TPS implementation advantagesTPS implementation advantages

Make what the customer needs, when it is needed, and in the right amount Minimize inventories Separate machine work from human work and fully utilize both Build quality into the process and prevent errors from happening Reduce lead-times to allow for rapid, flexible scheduling Produce a high mix of low volume products efficiently

20

InnovationInnovation

2005

Toyota has introduced new ideas & technologies which enable them to lead the innovation among others competitors.

Example

Hybrid gas-electric vehicles.

Advanced Parking Guidance System.

Eight-speed automatic transmission.

Four-speed electronically controlled automatic with buttons for power and economy shifting.

21

AWARDSAWARDS

Toyota has achieved the premier position in overall customer satisfaction for the fourth consecutive time, according to the J.D. Power and Associates Germany Customer Satisfaction Index (CSI) Study.

Toyota Prius: no.1 in J.D. Power and Associates’customer satisfaction index study.

The all-new Toyota Corolla has been awarded a maximum five-star safety rating for adult occupant protection in the highly regarded Euro NCAP tests

2005

2008

2008

22

Offensive StrategyOffensive Strategy

2005

Toyota aggressively marketed their cars to Americans as being fuel-efficient, environmentally friendly, small size and having better build quality than other Brands.

In the 1980's they had people tell the story of hitting 100,000 miles in their Toyota while other different cars were died at 80,000 miles. Toyota found that many of their cars were going 200,000 miles. That was a huge marketing success and it didn't even cost much money. (Building a Quality Brand Strategy).

Now TOYOTA team is improving by concentrating on being a "green" company that cares about the environment.

Diversity in their products which maximize market share, profitability of the company as all the society sectors (Youth, Men/Women, rich) are being served with products that are under their convenience.

23

Defensive StrategyDefensive Strategy

2005

Overseas production for reducing labor cost.

Building a Huge Dealers network overall the world, that’s made their products reachable for all around the world.

Built the best system (TOYOTA Production system-TPS) that organizes manufacturing and logistics for their automobile manufacturer, including interaction with suppliers and customers. Their system has proven its effectiveness through the past and present. And Now TPS system being studied & followed by other automakers.

After many years of the excellence, TOYOTA brand become known in selling a high quality, low maintenance, reliable and fuel efficient vehicles with widely available spare parts.

By the excellent reputation that TOYOTA has built through the past, their cars have got the best resale value. This participates in “Captives Customer” and maximizes customer retention, market share, profitability and maximize Net marketing contribution.

In the past TOYOTA MOTOR COMPANY has lunched “Scion” for youth market, because the younger customer has a greater "lifetime value" to the company. (The younger person has more car purchases in his future than does the older one).

24

Targeted CustomersTargeted Customers

Individuals overall the worldIndividuals overall the worldSCIONSCION -- Youth market (16-30) College degree, median income $30,000-$50,000 per year.

TOYOTATOYOTA -- Medium class (25 and up), college degree, median income $40,000 and up

LEXUSLEXUS -- Toyota's luxury division (35 and up), college degree, median income $65,000 and up.

CompaniesCompanies

Manufactories Manufactories

InstitutionsInstitutions

25

Is TOYOTA MarketIs TOYOTA Market--Based?Based?

TOYOTA are constantly in tune withcustomerscustomers’’ needsneeds, competitorscompetitors’’ strategiesstrategies,

changes in the business climate, and emerging emerging

technologiestechnologies, and they seek ways tocontinuously improvecontinuously improve the solutions they bring to target customers. This process enables them

to move with—and often lead change.lead change.

YesYes, according to TOYOTA achievements, marketing matrix , according to TOYOTA achievements, marketing matrix

and customer satisfaction index, TOYOTA is a Marketand customer satisfaction index, TOYOTA is a Market--Based Based

organization.organization.

0 1 2 3 4 5 6 7 98 108

Our evaluation toward TOYOTA is 8 out of 10

26