Essay Sample on Toyota Motor Corporation

Toyota Motor Corporation commonly referred to as just Toyota, is a renowned Japanese automaker based in Toyota, a city in Japan. As at March 2014, the company consisted of approximately over 330,000 employees worldwide. In February 2016, Toyota was ranked at position thirteen of the biggest global organizations on the premises of revenue. The company was the largest car producer in 2012 by generation in front of the Volkswagen Group and General Motors. Later that year, the Toyota went ahead to record the creation of its 200-millionth vehicle. These reports coupled up with an array of other sensational recordings, depict the top position that the company has adopted and maintained in the last decade.

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Succinctly, the primary items for the organization are classified into three sections; automobile, financial, and s correspondence framework with the automobile section being the flagship. The automobile section takes part in the outline, fabricates and deals that incorporates smaller than minimal sports cars, trucks, SUVs, and minivans. Additionally, Toyota produces car parts and embellishments for its particular use and available to be purchased to others. The companys yearly deals around achieves 7.5 million models on each of the five landmasses in which the principal markets for both Toyota and Lexus brand vehicle is the United States, trailed by Japan. The other most astounding markets ranges are U.K, China, Australia, Canada, and Germany. Toyota collectively sells in over 170 regions. The companys worldwide fundamental contenders are VW, GM, Nissan, and Ford. Toyota overwhelms the global light vehicle deals with the most elevated piece of the overall industry of 14% by surpassing the primary opponents like GM and Hyundai-Kia amidst subsidence, rather blasts the benefit. The automaker has been stung in the previous year by a progression of reviews identified with defective airbags from supplier Takata. As most people anticipated, that that made headlines on the news and the psyches of administrators up to the next year. Be that as it may, general sales were not as badly hit especially in North American Region.

Toyota Financial Services

As at April 2016, Toyota Financial Services (TFS) finished its fourth Diversity and Inclusion (D&I) Bond Offering in the measure of $1.25 billion, setting a record for the biggest corporate security offering in which D&I firms assume a lead part. Empowering differences firms to fortify their experience chipping away at prominent arrangements, this Diversity, and Inclusion Bond not only serves as an essential segment of Toyota's far-reaching subsidizing the program, but additionally upgrades the companys stage for different qualities by putting a focus on excellent Minority and Women Business Enterprises (MWBE). This D&I bond uses an alternate structure, which sets two-year settled and gliding rate D&I securities with a five-year worldwide security to drive more extensive interest, empowering TFS to finish the biggest minority-and ladies possessed corporate security offering to date. The lead book runners in this exchange were minority-possessed, joined by Citi as a joint lead book runner. Toyota Financial Services' industry-driving D&I Bonds are a historic point inside the business group and has been a genuine pioneer in activities that help similar firms to develop. These bonds are having a genuine effect.

Financial Results

Recently, Toyota released its 2016 quarterly financial statements and for the first time since 2014, the company recorded a profit decline. The drop in profits has been greatly attributed to the ever rising costs such as labor, research, and design. Be that as it may, Toyotas car sales in the United States are still remarkable. The company is also at the center of the robust technology and innovations that are finding their way into the automobile sector and a fascinating pace. Such innovations and new technology include fuel cell vehicles and artificial intelligence. It is, therefore, imperative for the company to reconsider its strategies and in so doing, increase its investment in research frameworks. The increase in such costs is bound to lower the profits as depicted by the fall in the last financial quarter.

Locally, Toyota is constrained by the local government to increase wages as Japan endeavors to strengthen the economy that is currently in a recovery process. The companys management went on record to affirm that whereas they were in control of the increasing costs, they were keen to adopting a long-term strategy that would facilitate continued profits in the future hence the drop in profits. The strategy would also help the company to gain a competitive upper hand against its key global rivals. Adoption of a strategy that invests in the future wellbeing of the company is also the reason behind Toyotas $1 billion investment on an artificial intelligence facility. In the third financial quarter, the increased research and design, labor, and other operational costs brought down the companys profits by close to $9million. These results demand a continued investment because the return on investment also seems to be on a downward slope.

Despite the numerous challenges, Toyota still managed to record remarkable profits. The positivity can be largely attributed to the ever increasing profitability in China and the United States. The company also became the first to hit the three trillion yen mark in Japan. In light of the dull emerging market trends, the company has not recorded much of a change in cars sales compared to the previous financial year. Another setback was the cessation of production in its Japan plants in February for six days not to mention the airbag scandal. Toyota has recalled millions of automobiles globally in a bid to fix airbags believed to be faulty. In February, Honda recalled over 400,000 cars in Japan alone. These were part of the over 5million cars as a result of United States regulations following a series of deaths caused by defective airbags.

Conclusion

In synopsis, Toyotas main strengths include its presence and popularity in Northern America and China. The popularity in the US and continued profitability in China contributed to the profits recorded this year by a great deal. The company is also closely liaising with Asian manufacturers in developing self-driving technology, an innovation that if mass marketed, could propel Toyota to greater heights. On the other hand, Toyota is battling a couple of challenges that limit its increasing profitability trends over the past few financial years. The sedan segment that Toyota has ruled over the past is decreasing not to mention the fact that Toyota does not compete very effectively in full-size vehicles. Additionally, the company also faces fierce competition from General Motors. An increase in gas prices in future could also pose a threat to Toyotas Corollas sales.