Founded in 1937 in Japan, the Toyota Motor Corporation became one of the automotive market leaders in vehicle production and sales. As of 2022, it was the leading motor vehicle manufacturer worldwide based on global sales, overtaking the Volkswagen Group in 2020. The Toyota brand is the company's best-selling subsegment, with around 8.9 million vehicles sold in 2022. At just over 2.7 million units, electrified vehicles are gaining importance for Toyota. The company made strides in the electric vehicle market by being the first and largest automobile company to offer a hybrid car in its line-up. The Toyota Prius was such a success that the company began to provide a hybrid option for some of its other models, such as the Camry and the Corolla. However, the corporation still lags behind in the plug-in electric vehicle sector, not making it into the top five electric vehicle manufacturers in 2022.
A Road to Economic Recovery Paved With Challenges
Toyota was stalled from recovering financially from the worldwide recession that started in 2008 by a series of recalls and natural disasters in Japan and other production center locations, such as Thailand. Toyota's revenue finally surged in 2013 and recovered from the COVID-19 pandemic throughout its 2022 fiscal year. However, while the company's revenue surged in 2023—making it Toyota Motor's most successful year for net sales since 2012—its operating income decreased, down to nearly 2.73 trillion Japanese yen (around 18.82 billion U.S dollars at a June 29, 2023, exchange rate). This drop was attributed to the soaring raw material prices, which took off in February 2022 due to Russia's invasion of Ukraine. Price inflation and the continuing supply chain shortages were felt throughout the automotive industry during Toyota's 2023 fiscal year, impacting both this company and its competitors. Though on the rise, Toyota Motor Corporation's vehicle production was still below its pre-pandemic output. The global automotive semiconductor shortage led to production halts, including in the company's Czech factory in February 2023.
While the Toyota Motor Corporation records strong performance in the traditional vehicle and luxury car sector, there is still room for improvement in the alternative fuel market. Partly propelled by increasing governmental pushes for zero-emissions passenger cars in various countries, the company has been increasing its research and development expenditures up to 1.24 trillion Japanese yen in the 2023 fiscal year (around 8.57 billion U.S. dollars). Investments were made in parts in integrated vehicle systems and powertrains. Approximately 95.48 percent of its alternative fuel vehicle sales in 2022 were hybrid electric vehicles, leading it to lag behind in the plug-in electric market segment, where Tesla and the Volkswagen Group were market leaders. The Volkswagen Group was Toyota Motor Corporation's main competitor, with Volkswagen Group's eponymous brand holding 6.7 percent of the 2022 global automotive market compared to Toyota's 11.5 percent.
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