Description of the Company's Growth Potential

Description of the company's growth potential

Toyota was founded in 1937 and is now one the most primary auto manufacturing companies worldwide. Toyota currently sells their vehicles in 170 different countries, with operations in Japan, North America, Europe and Asia. As a company, Toyota has a strong history with continuous efforts to successfully grow. (Marketline, 2014) To maintain their growth potential, Toyota strategically partners with other companies to further expand their market presence; one in particular is BMV.  

The company recognizes their opportunities to continuously grow their partnership with BMW. In 2011 BMW and Toyota Motor Europe entered a contract in which BMW would supply 1.6 liter and 2.0 liter diesel engines to Toyota Motor Europe starting in 2014. The engines would be installed in certain Toyota-produced vehicles planned for sale in the European market. In 2012, BMW and Toyota signed a memorandum aimed at long-term strategic collaboration on technological fields. As part of the agreement, the two companies partnered for the joint development of a fuel cell system, collaboration on powertrain electrification and joint research and development on lightweight technologies. In December 2013, BMW and Toyota agreed to develop a joint platform for sports cars, which enabled Toyota to expand their sports car product line up. In addition, they signed a binding agreement on collaborative research in the field of next-generation lithium-ion battery cells. (Marketline, 2014)

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Competitive Advantage

The auto industry is extremely competitive and Toyota continuously maintains their competitive market advantage. Toyota's auto industry strengths include their market position. (Marketline, 2014) Toyota has a strong market position in different geographies across the world. The company's market share for Toyota and Lexus brands, (excluding mini-vehicles) in Japan was 48.4 % in 2013. Similarly, Toyota has a market share of 13.8% in North America, 16.5% market share in Asia (excluding Japan and China), and 4.6% market share in Europe. In addition, the company holds around 5% share of the Chinese market and a significant market share in South and Central America, Oceania, Africa and the Middle East regions. Such strong market position allows the company to gain competitive advantage and also expand into international markets. (Nkomo, 2014)

Globally, auto manufacturers are producing hybrid vehicles, as the emission of carbon dioxide is a threat to our environment. The development of hybrid vehicles will continuously increase in the years ahead. The production of reputable eco-friendly vehicles is a priority in the auto industry. Toyota currently manufactures hybrid electric vehicles such as the Prius, Crown, Lexus RX450h, HS250h, SAI, Lexus CT200h, Camry, Alphard, Vellfire, Aqua and GS450h. By 2015, Toyota plans to launch 14 fuel-efficient engines around the world. Toyota has 27 hybrid models and one plug-in hybrid model on the market in about 80 countries and regions. To compete, Toyota has plans to launch 15 new hybrid models worldwide within the next two years, which gives them the differentiation advantage that will place them ahead of many of their competitors. (Toyota Annual Report, 2014)