This fall Toyota (TM-NYSE) became the first automaker to sell over 500,000 hybrid vehicles. Through October it had sold almost 200,000 this year alone, on pace to double its 2004 sales. The company has a significant lead in the hybrid market and plans to rapidly increase the number of vehicles offered as hybrids. The company expects to sell one million hybrids annually by early in the 2010s. Meanwhile, the company has been taking market share from the Big Three U.S. automakers and has built a reputation for quality and innovation. Toyota is also one of the most efficient and flexible auto manufacturers in the world, allowing the company to achieve industry-leading profitability.
Toyota is the second largest automaker in the world in terms of sales and production and is the largest automaker in Japan. Its product portfolio consists of a full range of models, from mini vehicles to large trucks. The company’s operations are classified into three segments: automobiles (92%), financial services (4%), and all other (4%). Besides its main brands, Toyota produces and sells vehicles under the luxury label Lexus in North America and Europe. Approximately 60% of all Toyota vehicles sold in the U.S. are built in North America with parts sourced from over 500 North American suppliers.
Toyota’s U.S. market share is expected to reach 12.4% in 2005, up from 8.9% in 2000. Given a strong pipeline of new models/remodels in 2006, combined with lessening interest in big SUVs (which is a smaller portion of its portfolio), Toyota seems poised to continue to grow its market share. In Japan, despite a basically flat market for the past few years, Toyota has achieved some modest market share gains to the mid-40s. Europe remains a challenge, but the rest of the world has been growing faster than expectations.