SWOT analysis of Toyota (Toyota SWOT)

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SWOT analysis of Toyota (Toyota SWOT)

This detailed SWOT analysis of Toyota aims to provide readers with a comprehensive insight into the strengths and the weaknesses of Toyota Motor Corporation. It also aims to examine the opportunities the company should explore and the threats it should keep an eye on. Toyota is a Japanese multinational automotive manufacturer which was founded on the 28th of August 1937.

Strengths of Toyota

Toyota is the largest automotive manufacturer in the world. Its global car market share for the year 2018 was 9.46% (Wagner, 2019). In 2013, it became the first auto maker to produce more than 10 million vehicles a year (Takahashi, 2014). It sold 10.6 million vehicles in 2018 and aims to sell 10.8 million by the end 2019.

Toyota has been able to reduce the production costs and improve the quality of its vehicles over the years by adopting quality mechanisms such as Just-in-time (JIT) and Lean production systems. According to many researchers, JIT is generally associated with Toyota company and was initially known as the ‘Toyota Production System’. Taiichi Ohno of Toyota is widely regarded as the father of JIT.

Though Toyota sells its vehicles in more than 170 countries and territories, its major markets are its home market (Japan), the USA, the UK, Germany, France, Italy, Mexico, Thailand, India, and Indonesia. These are very large markets, and some of them are growing very rapidly as well. As of December 2017, Toyota works with 51 overseas manufacturing companies in 28 countries and territories (Toyota Motor Corporation, 2018).

Toyota is one of the most reputable brands in the automotive industry in the world due to its quality, durability, safety, innovation, and great designs. Over the years, it has won numerous awards and accolades in different categories. Toyota is widely famous for manufacturing fuel-efficient and affordable vehicles. It has also been at the forefront of manufacturing alternative fuel vehicles for a long time.

Weaknesses of Toyota

In October 2018, Toyota announced recalling of 2.4 million hybrid cars over a technical fault that could cause crashes. In September 2018, it also announced recalling 1.3 million hybrid cars globally. Similarly, the recall of 3.37 million vehicles globally due to the problems with air bags and a fuel emission control unit, was also announced in 2016. These recalls certainly damage Toyota’s brand perception, and lead to a loss of customer loyalty.

While Toyota is one of the best brands in the global automotive industry, not all its vehicles have been successful as its Prius. For instance, Master Ace was considered the ugliest vehicle ever manufactured by Toyota. Likewise, Yaris was one of the biggest failures for the Toyota company.

Opportunities for Toyota

China represents approximately 30% of global car sales. Therefore, it is no wonder that Toyota eyes on gaining substantial momentum in the Chinese market. The plants in Guangzhou and Tianjin are working on increasing production capacities of Toyota vehicles by 20% to reach the production of approximately 240,000 vehicles a year (Wagner, 2019). Likewise, many other developing nations offer Toyota a huge potential to expand its operations.

Developing new vehicles are also worth exploring as the markets and the tastes of customers change very often. It is worth mentioning that Toyota aims to transform its entire fleet by 2025. It aims to make the entire fleet available in an electric or hybrid variant to meet the growing demands in the markets (Smith, 2017).

Threats to Toyota

Threat is the last issue to discuss in the SWOT analysis of Toyota. Though Toyota is one of the biggest automotive brands in the world, it is always in fierce competition with some powerful automakers such as  Ford Motor Company, Volkswagen, General Motors, Tata Motors, Hyundai, Tesla, Nissan, PSA Peugeot Citroen, Honda, BMW, Mercedez, Mitsubishi, and Fiat Chrysler Automobiles.

Toyota operates in a complex global auto industry. Like all other auto makers, it faces some enormous challenges e.g. the rising costs of raw materials such as rubber, steel and fuel, global economic slowdown, and political & trade tensions between China and the USA. These are likely to increase the costs of vehicle production and decrease profit margin.

We hope the article ‘SWOT analysis of Toyota’ has been helpful. You may also like reading SWOT analysis of Volkswagen and SWOT analysis of Uber. Other relevant articles for you are:

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Last update: 24 August 2019


France 24 (2019) Toyota announces new recall of 2.4 million hybrid cars, available at: https://www.france24.com/en/20181005-toyota-announces-new-recall-24-million-hybrid-cars (20 August 2019)

Smith, L. (2017) Toyota to introduce ten new electric cars by 2020, available at: https://www.express.co.uk/life-style/cars/894224/Toyota-electric-car-hybrid-2020-Prius (accessed 24 August 2019)

Toyota Motor Corporation (2019) Overview, available at: https://global.toyota/en/company/profile/overview/ (accessed 05 August 2019)

Toyota Motor Corporation (2018) Worldwide Operations, available at: https://global.toyota/en/detail/5286101 (accessed 24 August 2019)

Takahashi, Y. (2014) Toyota Output Sets Industry Record, available at: https://www.wsj.com/articles/toyota-output-sets-industry-record-1390986041 (accessed 20 August 2019)

Wagner, I. (2019) Global car market share of the world’s largest automobile OEMs in 2018, available at: https://www.statista.com/statistics/316786/global-market-share-of-the-leading-automakers/ (accessed 05 August 2019)

Photo credit: Pixabay

Author: M Rahman

M Rahman writes extensively online with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He is a graduate of Leeds Metropolitan University and London South Bank University.