THE TOYOTA COMPANY: AN EXAMPLE OF GLOBALIZATION

Overseas sales by region (in millions)

Timeline: Milestones in Toyota’s History
1996 2000 2006 2011
1933 Automobile department established within textile 

loom maker Toyota Automatic Loom Works N. Am. 1.23 1.74 2.74 1.81
1935 First vehicle built, the Model G1 truck
Lat. Am. 0.1 0.13 0.34 0.33
1936 Product starts on its first car, the Model AA
Europe 0.44 0.67 1.12 0.80
1962 First overseas vehicle plant in Brazil
1964 First Asian vehicle plant outside Japan (Thailand) Africa 0.14 0.12 0.27 0.21

1972 Cumulative production in Japan reaches 10 
 China 0.02 0.02 0.32 0.90
million vehicles
M.E. 0.11 0.17 0.40 0.53
1984 Toyota’s first U.S. car assembly plant, a joint 

venture with General Motors Corporation, opens 
 Oceania 0.14 0.18 0.25 0.22
in California
TOTAL 2.62 3.38 6.23 5.9
1989 Toyota launches luxury Lexus brand in N. Am.
Source: Toyota
1992 First European car plant begins production in U.K.
1997 Prius, the first mass-produced hybrid car, launched
1999 100 millionth Toyota vehicle produced in Japan
2003 Toyota makes 6.78 M vehicles and overtakes Ford 

to become world number 2 behind GM
2006 Toyota’s global sales of 8.8 M vehicles exceeds 

GM’s, making it the world’s largest automaker
TodayToyota’s largest vehicle manufacturing plant is 

located in Georgetown, KY, employing 8,000
Sources: Reuters and ToyotaKY.com

1 of 2
“Toyota closure heralds the end of car-making in “Toyota joins rivals promoting U.S. growth with
Australia” $600M Indiana expansion”
Toyota closed   its Victorian car manufacturing plant Japanese automaker Toyota joined the   parade of
on   Tuesday   after Ford closed its doors in October last manufacturers seeking to highlight their U.S. investments
year and Holden closes its Adelaide plant on October 20, in the President Trump age   with an announcement
leaving Australia without a car manufacturing industry. Tuesday that it would expand its Princeton, Ind. factory.
After more than half a century making cars in Australia, Toyota spokesman Scott Vazin confirmed that the $600
the final model of the Japanese-owned Toyota—a petrol million Indiana investment was already in the works
Camry—was completed at Victoria's Altona North plant before Trump's victory in November's election. It does
on Tuesday, when the factory was shut down ending the not involve shifting any production from other plants to
jobs of 2,700 workers. The Australian Manufacturing Indiana.
Workers Union says up to five times that number will be
But the decision to highlight the announcement falls in
affected throughout the component supply chain.
line with the new normal in the automotive industry:
Toyota announced in 2014 it was pulling out of Australia, emphasizing American manufacturing investments as
four years after the company said it was building a new Trump threatens a border tax for importing vehicles from
$300 million engine plant at Altona. Workers have been Mexico to the U.S. Others that have recently highlighted
provided with retraining but the union said the job market U.S. expansions include GM, Ford, Fiat Chrysler and
for people aged in their 40s and 50s is tough, estimating Volkswagen.
only 5 per cent of the 2,700 workers have secured full-
The Indiana investment is part of a $10 billion, 5-year
time work and only half the 600 Ford workers who lost
U.S. spending plan   announced by Toyota CEO Akio
their job in October have been re-employed.
Toyoda at the Detroit auto show earlier this month. Those
“It’s an industry that’s been running for now 90-odd investments include the company's new U.S. headquarters
years,” the union's national vehicle division secretary in Texas, autonomous vehicle technology and retooling,
Dave Smith told reporters outside the factory. “All up Toyota North America CEO Jim Lentz told USA TODAY
today, there is about 6000 Victorians going to lose their in an interview at the auto show.
jobs because Toyota is shutting.”
Toyota described Tuesday's announcement as part of its
Source: Financial Review (AUS) (2017) strategy to "build vehicles where they are sold," which
typically minimizes shipping costs and avoids
unfavorable currency rates.
Overall, about 49% of Toyota's U.S. sales come from
“Toyota touts free trade in opposition to U.S. auto vehicles made outside the U.S., including 4% from
tariffs” Mexico, according to Barclays analysts.
Toyota Motor Corp. said Thursday it is opposed to the Source: USA Today (2017)
U.S. move to raise tariffs on imported vehicles, which
could hit the domestic auto industry and economy.
Mexico has become a major manufacturing base for most
The United States is the biggest market for Japanese global car brands, including U.S. ones, as assembly-line
carmakers and increasingly they have been shifting their workers there earn about one-tenth of what their U.S.
production to the country. If U.S. President Donald counterparts make. Trump has blamed low-cost Mexican
Trump decides to rein in auto imports, that shift in production for the outsourcing of U.S. manufacturing jobs
production could accelerate, hollowing out the domestic south of the border.
industry that contributes much to Japan’s growth. “We
Trump’s measure could force Japanese carmakers to
believe free and fair trade is the best way to create
increasingly shift their manufacturing to the United States,
sustained growth for the auto industry and provides more
even as they have benefited from keeping production at
choices and greater value for American consumers,”
home. “By concentrating production in Japan, we can
Toyota said in a statement.
achieve mass production and create jobs domestically,”
The Wall Street Journal reported Wednesday that Trump said Mazda President Masamichi Kogai. More than 20
is seeking new tariffs of as much as 25 percent on percent of domestically produced Mazda vehicles are
automobile imports, up from the current 2.5 percent duty exported to the United States.
on imported passenger cars. Japanese carmakers exported
The potential tariff hike triggered opposition even from
around 1.77 million units to the U.S. in the 2017 fiscal
within the United States. It “would deal a staggering blow
year, according to the Japan Automobile Manufacturers
to the very industry it purports to protect and would
Association. Although Japanese auto exports to the
threaten to ignite a global trade war,” U.S. Chamber of
world’s largest economy have been declining due to
Commerce President Thomas Donohue said in a
increasing production at local plants, the figure still
statement.
means nearly 40 percent of car exports from Japan were
bound for the U.S. market. Source: The Japan Times (2018)
2 of 2