Cars and Drivers

Toyota Is The World's Greatest Car Company

Douglas A. McIntyre

Published: December 18, 2022 4:46 pm

A look at the world’s global car companies shows that America’s are run by bunglers. Ford’s management cannot keep track of its expenses. GM sits well behind most in its move into the EV business. VW, BMW, and Mercedes make cars widely admired for their quality, but they are late to the EV and self-driving vehicle markets. Kia and Hundia have done well in sales and quality surveys but are too new to the global markets for any reasonable judgment about their management or the skills which have built their strategies. This leaves the Japanese companies, which have been makers of the highest quality cars in the world for several decades. The largest of these Japanese companies has often been the largest car company on earth-the immensely well-run Toyota.

Toyota was started in 1937. Its predecessor, Toyota Automated Loom Works, began experimenting with cars in 1935. Many of its plants were damaged by bombing in WWII. The American occupying forces allowed it to restart car manufacturing in 1949. It became the largest car company selling cars in its home market in the 1950s and 1960s

Toyota moved into the U.S. in 1958. Its cars were considered poorly made, with small engines underpowered for the American market. In 1965, Toyota made another push toward gaining U.S. sales. The Corolla was a success. By the 1970s, Toyotas began to find themselves at the top of studies of the highest-quality cars sold in America. American car companies had held close to 100% of the market in the US, and GM at one point had a market share of 50%. Toyota’s sales ended that dominance. Often, Toyota is now the second best-selling brand in the U.S., topping perennial No.2 Ford.

At the same time, it began its rapid U.S. expansion, its sales in other large car markets, particularly Europe, began to surge. Toyota has had the global unit sales lead at about 10 million vehicles for many years. From time to time, it swaps that position with VW, which otherwise runs a close second.

Toyota’s domination of the U.S. market holds several clues to its global success. It sells an extremely wide array of sedans, coupes, crossovers, and SUVs. This allows it to sell cars at price points that attract many Americans based on their incomes. The base Corolla has a price of slightly more than $21,000. Toyota’s luxury brand, Lexus, sells models for over $100,000. It has become the top-selling luxury brand in America, a distinction held by BMW and Mercedes for years.

Toyota has taken a long shot as the world moves toward EVs. It has decided to hedge its bets by making EV hybrids. These marry small gas-powered engines with electric vehicle engines. Among other things, this relieves some buyers’ anxiety about the range of EV engines.

One final sign of Toyota’s success is how the capital markets view it. Toyota’s market cap is almost $200 billion. GM’s is $50 billion.