Strengths Of Toyota

1228 Words5 Pages
For my analysis, I chose Toyota which is the second biggest car company following Volkswagen. It is known to be really competitive and sold in many places around the world. Toyota has many strengths. It has a strong global position and cars manufactured by Toyota have been sold in many places in the world. It sold 9.7 million cars and trucks, and had 45.5% of the market share in Japan in 2012. It has a market share of 12.2% in North America, 13.4% in Asia and 4.3% in Europe. (Anon, 2015) Such strong global position is because of company’s high quality products and strong brand recognition with its well known environmental friendliness, durability, social responsibility, reliablility and value. Toyota also has been the most valuable auto company…show more content…
It has conducted a numerous number of vehicle recalls over the last few years, which affected its brand image and its financial performance. For instance, during 2009 and 2010, more than 9 million Toyota and Lexus vehicles were recalled due to the wrong floor mats installed that were interfering with the gas pedal, and the firm suspended production and sales. In 2011, 111,000 vehicles from Toyota and Lexus were again recalled due to the damage to the element of the substrate shutdown of hybrid system. And later in the year, Toyota announced to recall 181,000 vehicles due to the non ordinary noise and oil leakage, which have resulted from the bolts that were loosely attached. (MacKenzie, 2015) Beside these recalls, there have been lawsuits for vehicle failure. Toyota has a lower return on equity (13.9%) and return on asset (4.9%) than other auto companies such as Honda and Nissan. If you compare Toyota and Honda, you can tell that asset turnover ratio for Nissan is 81%, while Toyota only has 60%. (Basu, 2015) This shows that Honda is using its asset more efficiently to make profits. Lower return on equity and asset shows that Toyota is not generating much returns for its shareholders compared to other companies and inefficient use of shareholders’
Open Document