is a Japanese multinational automotive manufacturer headquartered in Toyota City, Aichi, Japan. It was founded by Kiichiro Toyoda and incorporated on August 28, 1937. Toyota is the largest automobile manufacturer in the world, producing about 10 million vehicles per year.
The company was founded as a spinoff of Toyota Industries, a machine maker started by Sakichi Toyoda, Kiichiro's father. Both companies are now part of the Toyota Group, one of the largest conglomerates in the world. While still a department of Toyota Industries, the company developed its first product, the Type A engine, in 1934 and its first passenger car in 1936, the Toyota AA.
In the 1960s, Toyota took advantage of the rapidly growing Japanese economy to sell cars to a growing middle-class, leading to the development of the Toyota Corolla, which became the best-selling automobile of all time. The booming economy also funded an international expansion that allowed Toyota to grow into one of the largest automakers in the world, the largest company in Japan and the ninth-largest company in the world by revenue, . Toyota was the world's first automobile manufacturer to produce more than 10 million vehicles per year, a record set in 2012, when it also reported the production of its 200 millionth vehicle. By September 2023, total production reached 300 million vehicles. , Toyota Motor Corporation is one of the largest car manufacturers by market capitalization with a value of approximately US$259.7 billion.
Toyota was praised for being a leader in the development and sales of more fuel-efficient hybrid electric vehicles, starting with the introduction of the original Toyota Prius in 1997. The company now sells more than 40 hybrid vehicle models around the world. More recently, the company has also been criticized for being slow to adopt all-electric vehicles, instead focusing on the development of hydrogen fuel cell vehicles, like the Toyota Mirai, a technology that is much costlier and has fallen far behind electric batteries in terms of adoption.
, the Toyota Motor Corporation produces vehicles under four brands: Century, Daihatsu, Lexus and the namesake Toyota. The company also holds a 25% stake in Archion, a 20% stake in Subaru Corporation, a 5.1% stake in Mazda, a 4.9% stake in Suzuki, a 4.6% stake in Isuzu, and a 3.8% stake in Yamaha Motor Corporation, as well as stakes in vehicle manufacturing joint-ventures in China (FAW Toyota and GAC Toyota), the Czech Republic (TPCA), India (Toyota Kirloskar) and the United States (MTMUS).
Toyota is listed on the London Stock Exchange, Nagoya Stock Exchange, New York Stock Exchange, and on the Tokyo Stock Exchange, where its stock is a component of the Nikkei 225 and TOPIX Core30 indices.
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History
1920s–1930s
In 1924, Sakichi Toyoda invented the Toyoda Model G Automatic loom. The principle of jidoka, which means the machine stops itself when a problem occurs, later became a part of the Toyota Production System. Looms were built on a small production line. In 1929, the patent for the automatic loom was sold to the British company Platt Brothers, generating the starting capital for automobile development.
Under the direction of the founder's son, Kiichiro Toyoda, Toyoda Automatic Loom Works established an Automobile Division on September 1, 1933, and formally declared its intention to begin manufacturing automobiles on January 29, 1934. A prototype Toyota Type A engine was completed on September 25, 1934, with the company's first prototype sedan, the A1, completed the following May. However, the government strongly prioritized the development of trucks, so the company then concentrated on the G1 truck. The G1 truck was completed on August 25, 1935, and debuted on November 21 in Tokyo, becoming the company's first production model. Modeled on a period Ford truck, the G1 chassis sold for ¥2,900, ¥200 cheaper than the Ford truck. A total of 379 G1 trucks were ultimately produced.
In April 1936, Toyoda's first passenger car, the Model AA, was completed. The sales price was ¥3,350, ¥400 cheaper than Ford or GM cars. The company's plant at Kariya was completed in May. In July, the company filled its first export order, with four G1 trucks exported to northeastern China. On September 19, 1936, the Japanese imperial government officially designated Toyota Automatic Loom Works as an automotive manufacturer.
Vehicles were originally sold under the name "Toyoda" (), from the family name of the company's founder, Kiichirō Toyoda. In September 1936, the company ran a public competition to design a new logo. Of 27,000 entries, the winning entry was the three Japanese katakana letters for "Toyoda" in a circle. However, Rizaburo Toyoda, who had married into the family and was not born with that name, preferred "Toyota" () because it took eight brush strokes (a lucky number) to write in Japanese, was visually simpler (leaving off the diacritic at the end), and with a voiceless consonant instead of a voiced one (voiced consonants are considered to have a "murky" or "muddy" sound compared to voiceless consonants, which are "clear").
Since toyoda literally means "fertile rice paddies", changing the name also prevented the company from being associated with old-fashioned farming. The newly formed word was trademarked and the company began trading on August 28, 1937, as the Toyota Motor Company Ltd. Kiichiro's brother-in-law Rizaburo Toyoda was appointed the firm's first president, with Kiichiro as vice-president. Toyota Automatic Loom Works formally transferred automobile manufacturing to the new entity on September 29. The company's founding date is celebrated every November 3, to coincide with the inauguration of the Koromo Plant on November 3, 1938.
The Japanese government supported the company by preventing foreign competitors Ford and General Motors from importing automobiles into Japan.
At the onset of World War II, Toyota almost exclusively produced standard-sized trucks for the Japanese Army, which paid one-fifth of the price in advance and the remainder in cash upon delivery.
1940s
Japan was heavily damaged in World War II and Toyota's plants, which were used for the war effort, were not spared. On August 14, 1945, one day before the surrender of Japan, Toyota's Koromo Plant was bombed by the Allied forces. After the surrender, the U.S.-led occupying forces banned passenger car production in Japan. However, automakers like Toyota were allowed to begin building trucks for civilian use, in an effort to rebuild the nation's infrastructure. The U.S. military also contracted with Toyota to repair its vehicles.
By 1947, there was an emerging global Cold War between the Soviet Union and the U.S., who had been allies in World War II. U.S. priorities shifted (the "Reverse Course") from punishing and reforming Japan to ensuring internal political stability, rebuilding the economy, and, to an extent, remilitarizing Japan. Under these new policies, in 1949, Japanese automakers were allowed to resume passenger car production, but at the same time, a new economic stabilization program to control inflation plunged the automotive industry into a serious shortage of funds, while many truck owners defaulted on their loans. Ultimately, the Bank of Japan, the central bank of the country, bailed out the company, with demands that the company institute reforms.
1950s
As the 1950s began, Toyota emerged from its financial crisis a smaller company, closing factories and laying off workers. Meanwhile, the Korean War broke out, and being located so close to the battlefront, the U.S. Army placed an order for 1,000 trucks from Toyota. The order helped to rapidly improve the struggling company's business performance. In 1950, company executives, including Kiichiro's cousin Eiji Toyoda, took a trip to the United States where they trained at the Ford Motor Company and observed the operations of dozens of U.S. manufacturers. The knowledge they gained during the trip, along with what the company learned making looms, gave rise to The Toyota Way (a management philosophy) and the Toyota Production System (a lean manufacturing practice) that transformed the company into a leader in the manufacturing industry.
Toyota started developing its first full-fledged passenger car, the Toyopet Crown, in 1952 and started production in 1955. Prior to the Crown, Toyota had been outsourcing the design and manufacturing of auto bodies, which were then mounted on truck frames made by Toyota. The project was a major test for Toyota, who would need to build bodies and develop a new chassis that would be comfortable, but still stand up to the muddy, slow, unpaved roads common in Japan at the time. The project had been championed for many years by founder Kiichiro Toyoda, who died suddenly on March 27, 1952. The first prototypes were completed in June 1953 and began extensive testing, before the Crown went on sale in August 1955. The car was met with positive reviews from around the world.
After the introduction of the Crown, Toyota began aggressively expanding into the export market; the company entered Saudi Arabia for the first time in 1955 with Land Cruisers, following an agreement reached with Abdul Latif Jameel (founder of his company of the same name); Toyota also brought Land Cruisers into neighboring Yemen in 1956. In 1958, Toyota established a production facility in Brazil, the company's first outside of Japan.
In 1957, the Corona was released as a smaller alternative to the Crown. Following high Corona sales, and Eiji's suggestion, a new factory was built. This was the Motomachi factory. The building had a capacity of 10,000 units per month. The Motomachi Plant was completed in 1959.
Toyota entered the United States market in 1958, attempting to sell the Toyopet Crown. The company faced problems almost immediately. The company had to confront for the first time how its name sounded to native speakers of the English language; namely, "Toyota" has the English word "toy" in its first syllable. Toyota Motor Sales, USA's first sales administrator James F. McGraw bluntly told his new Japanese supervisors after joining the company in 1959: "'Toy' sounds like a toy and toys break". The Crown was a flop in the U.S. market, with buyers finding it overpriced and underpowered (because it was designed for endurance on the bad roads of Japan, not high-speed performance on the good roads of America). In response, exports of the Crown to the United States were suspended in the early 1960s in favor of the Land Cruiser and the Tiara.
After Kiichiro's death, his cousin Eiji Toyoda led the company for the two decades. Eiji helped establish the company's first plant independent from the Loom Works plant.
1960s–1970s
At the start of the 1960s, the Japanese economy was booming, a period that came to be known as the Japanese economic miracle. As the economy grew, so did the income of everyday people, who now could afford to purchase a vehicle. At the same time, the Japanese government heavily invested in improving road infrastructure. To take advantage of the moment, Toyota and other automakers started offering affordable economy cars like the Toyota Corolla, which became the world's all-time best-selling automobile.