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How Toyota Became The Most Valuable Car Brand

Tue, Oct 25, 2016 9:41 AM

It isn’t necessarily considered to be a premium marque and its name doesn’t even appear on the list of the UK’s 10 top-selling cars, so how did Toyota get to be listed by Brand Finance as the World’s Most Valuable Car Brand? The most recent figures allow Toyota to retain its title for the 5th year in a row.

As the Japanese manufacturing titan prepares to celebrate 80 years of automotive production with an estimated brand value of $43.1 billion, Oakmere Motor Group proves that Toyota is more than deserving of its success.

Being the only UK Toyota Centre to have received the coveted Ichiban customer satisfaction award twice (2013 and 2015), the Northwich dealership knows only too well the efforts Toyota goes to in order to maintain its position as number one.

 

Where It Began

Of course, the inspiration behind the Toyota brand, Sakitchi Toyoda, didn’t ever plan to become a car producer at all, instead lending his engineering talents to creating a textile loom factory. By employing the Japanese principle of ‘kaizen’ or ‘continuous improvement’, Toyoda’s factory fuelled an economic boom in spinning mills after WWI.

Following research into gasoline powered engines and visits to US and GB automotive plants, Toyoda’s son, Kiichiro was able to adapt some of his father’s success on the loom production line to this new motor technology. After initially establishing an automobile department within his father’s factory, he eventually formed the Toyota Motor Co Ltd in 1937.

It wasn’t until the 1970s that Toyota began to gain a significant place in the global market. The British car industry was littered with strikes, leaving a gap in supply that Toyota was more than happy to fill. And when GB countered by putting a restriction on Japanese imports, Toyota simply built its own factories in the UK, prompting Peugeot’s Jacques Calvert to describe the UK as a ‘Japanese aircraft carrier off the coast of Europe’.

A similar situation in Detroit, the USA’s car manufacturing capital, wasn’t helped by the arrogance of local producers who assumed that the market would continue to crave massive, gas-guzzling cars. This allowed Toyota to make inroads into the American market with more compact and economical cars like the Corolla (more of this later). However, the strategy on this side of the Atlantic was different: Toyota cleverly avoided cities where other marques had a stronghold, concentrating first on California.

By making small but firm steps into overseas markets Toyota production grew from a mere 588,000 units in 1966 to 2,488,000 units in 1975, an increase of more than 423%.

Like most Japanese industrialists, the Toyoda family took advantage of the 5S methodology, a systematic approach to workplace organisation which reduced waste while increasing quality, productivity and safety. The success of this ethos was evident in the variation of 1978 productivity levels from manufacturer to manufacturer. At this time, Detroit motor factories such as Ford and Chrysler were producing an annual average of 6 vehicles per employee, the workforce at Alpha Romeo in Italy managed to complete 14.9 per person while at Toyota, cars were literally rolling off the line at a massive 43 per worker!   

 

What Makes The Difference?

These streamlined systems are no doubt partly responsible for Japanese manufacturers accounting for nearly a third of the top 10 Most Valuable Auto Brands. However, when we consider that Japanese counterparts, Honda and Nissan are rated as being worth less than half that of Toyota, and the German efficient brands of BMW and Mercedes-Benz are lagging up to $11 billion behind Toyota, realisation dawns that working systems are not the only secret behind Toyota’s success.

Is it perhaps the popularity of Toyota that puts it so far ahead of its competitors? According to Brand Finance, Toyota sold just 30,000 more units than VW (worth a mere $18.9 billion) in the first 8 months of 2016, so it’s hardly a case of victory by volume.

Some would claim that marketing has a lot to do with Toyota’s success and indeed, the 1.6% of revenue that has been spent on marketing and advertising in the US has surely raised the marque’s profile. The use of social media platforms, such as Pinterest, portray Toyota as a friendly and approachable brand, appealing particularly to the younger driver with short but dramatic Instagram videos that are clearly aimed at placing the customer at the centre of all things Toyota.

But not all consumers are swayed by promotional campaigns. No, the savvy buyer reacts to two things: service and quality.

It is Toyota’s constant evaluation of (and reaction to) the market which generates its success. Through ‘genchi genbutsu’ or ‘actual place, actual thing’, Toyota assesses the requirements of its customers, constantly improving and innovating to meet their needs.

The Corolla - at 44 million sales, the world’s best-selling car - is a case in point. Although no longer available in Europe, it is still sold elsewhere in the world having undergone 11 different transformations in its 50 years, yes, 50 years of production. A definite case of, “If it ain’t broke, just tweak it,” each reincarnation has incorporated new technology as well as feedback from customers and Toyota’s own personnel.

 

It’s Not Just The Customer That Counts

Because no one is closer to the market frontline than its sales staff, Toyota values their opinion over and above any of its other employees. Following the oil crisis in 2000 when car sales dwindled and Toyota’s dealerships reported a build-up of stock, the manufacturer’s response was to reduce production so as not to swamp the market as well as introduce a 0% finance package to help stimulate sales.

In return, Toyota staff members have also gone above and beyond to prove their loyalty to brand and customer alike. Reports of salespeople sending personal birthday and seasonal cards to their buyers and funding their own promotion of the brand has placed Toyota firmly in the hearts of many buyers.

If the brand wasn’t already loved enough in the USA, Toyota’s actions following Superstorm Sandy in 2012 further increased its public visibility, teaming up with food banks and employing its operational expertise to assist relief efforts. All of this just 18 months after a devastating earthquake and several tsunamis affected Toyota’s own plants and workforce in Japan.

It’s clear that the real value of the Toyota brand is not measured in sales volumes alone. It also takes into account it’s people, ethos and customer experience. Sakitchi and Kiichiro Toyoda would no doubt be proud of Toyota’s successes - fiscal and ethical.

 

If you would like to experience car buying as it should be, visit Oakmere Motor Group’s Toyota showroom in Northwich where the customer always comes first. With 30 years of experience in the motor trade, you can be assured of our expert attention before, during and after your purchase, providing you with nothing but enjoyable motoring from the World’s Most Valuable Car Brand.

 

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