Toyota Motor Corp. (TM) continued to thrive in fiscal 2023, generating $247 billion in revenue and $15.7 billion in net income.

Through three main operations: the automotive industry, financial services and other activities, Toyota manages to maintain its position as one of the world’s leading car manufacturers year after year.

Key things

  • Toyota reported global revenue of ¥34.4 trillion, or about $247 billion, in fiscal 2023.
  • Approximately 91% of Toyota’s revenue came from the sale of automobiles. The company’s financial services division and other business operations generated a smaller portion of revenue.
  • In addition to passenger vehicles, Toyota also produced forklifts and other industrial machinery.
  • Toyota remained one of the world’s largest car manufacturers in 2022 and competes with it Volkswagen, Stellanitis and Mercedes-Benz.

Toyota Finance

In fiscal 2023, Toyota sold 10.6 million vehicles, with 6.7 million (61%) outside Japan. Outside of Japan, North America is Toyota’s largest source market. From April 2022 to March 2023, Toyota sold 2.4 million vehicles in North America.

That same year, Toyota reported sales of ¥34.4 trillion, or about $246 billion. Compared to the previous year, this means an increase of 15.4%.

Toyotas Market capitalization was $215 billion on June 14, 2023.

The history of Toyota

Headquartered in Japan, Toyota began in the 1920s as a loom manufacturer. After developing and selling a patent for an automated loom, founder Sakichi Toyoda stepped in automotive business. The first Toyota cars were produced in the early 1930s, while the Toyota Motor Company was founded in 1937.

Toyota first focused on compact cars and eventually expanded to produce pickup trucks, SUVs, trucks, sports cars, and other vehicles. Along the way, the company developed into one of the largest car manufacturers in the world.

Toyota business segments

Toyota generates most of its revenue from its automotive business, which can be further divided into separate sub-segments by brand and geographic focus. The company also generates revenue from its financial services arm and through a third, much smaller wing that focuses on various business activities.

Toyota’s automotive business

Toyota’s automotive industry has several different business units, each of which strives to mirror the efficient Japanese efficiency. In addition to its Toyota brand, it owns Lexus, Daihatsu and Hino.

Lexus is well-known in the US, with sales of more than 68,000 vehicles in the first quarter of 2023.

Quick fact

Toyota’s largest market (including Lexus) is the United States, with 2.4 million vehicles sold in fiscal 2023. In second place was Japan with 2.1 million cars sold, followed by Asia with 1.75 million cars sold.

The Lexus brand was created in the early 1990s as competition for the new luxury brands of other mass-market Japanese automakers such as Honda Acura and Nissan Infiniti. A generation later, Lexus surpassed these brands and directly competed with heavyweights of the luxury division, including BMW and Mercedes-Benz.

The company also has divisions related to vehicle sales by geographic area. For example, Toyota Motor North America is a Texas-based holding company that designs, manufactures, and sells certain Toyota vehicles throughout North America. Stateside, the Toyota RAV4, Highlander, and Camry were the fourth, seventh, and eighth best-selling cars in 2022, respectively.

Toyota Financial Services

Unlike some other major automakers, Toyota derives a relatively small portion of its revenue from its financial operations. While Toyota’s financial services division is a growing asset, the company is still a manufacturer first and a lender second. Automotive activities accounted for 91.8% of global sales in FY2023, while financial services accounted for only 8.2%.

Toyota Financial Services is a subsidiary that focuses on car sales financingcredit cards and other related services.

Quick fact

In 2022, Toyota was among the 50 largest companies in the world by market capitalization.

The latest development from Toyota

The majority of Toyota car sales are in Japan and North America, although a smaller proportion of sales are in Europe and other parts of Asia.

Since its inception, Toyota has been guided by what it calls the “Toyota Guiding Principles,” a set of seven values ​​and guidelines that inform all of the company’s decisions. In its 2023 Corporate Governance Report, the company highlighted the transition to a mobile society to support the emerging mobility-focused society with products and services that align with the company’s movement towards CASE – connected, autonomous/autonomous, shared and electric.

Among other goals, the company is trying to improve the “connected” capabilities of its vehicles and create new mobility services. The company also focuses on sustainability and the environment: Toyota has also set itself the goal of achieving carbon neutrality by 2050.

Toyota’s key challenges

Although Toyota is a dominant automobile company, it still faces various challenges. One of the biggest of them is competition, especially from other established vehicle manufacturers around the world. As Toyota now competes in all vehicle classes, it faces threats to its sales from several competitors.

Adaptation is key

To remain successful, the company must also continue to adapt. Although Toyota enjoys tremendous name recognition and customer loyalty, changing tastes, new technologies, and the increasing sense of customer responsibility towards the environment require Toyota to invest large amounts of money in development of new products and tools. If Toyota doesn’t anticipate how the auto industry will change and react accordingly, it could lose business.

Is Toyota a profitable company?

Toyota is a highly profitable company. In the fiscal year ending March 31, 2023, Toyota reported net income of ¥2.2 trillion, or about $15.7 billion. That was down from the previous year, which saw net income of ¥2.4 trillion.

What is the most popular Toyota car?

The most popular Toyota cars are the RAV4, Highlander and Camry.

How many cars did Toyota sell in 2022?

Toyota sold more than 10.5 million vehicles in fiscal 2023, up 1.6% from fiscal 2022, despite continued supply shortages and rising material costs.

Bottom Line

Toyota is one of the largest car companies in the world. Although he also has other businesses such as financial services, most of them are through vehicle manufacturing and sales. Its biggest markets are in Japan, North America and Asia, where it focuses its efforts and sees opportunities for growth. To remain competitive among the many car companies in the world, Toyota must remain competitive and follow market trends including sustainability, carbon neutrality, connectivity and convenience.

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