Changes in Toyota’s Reporting Practices

Toyota Motor Corporation, Japan’s largest and the world’s #4 carmaker by 2003 sales (after General Motors, Ford, and Daimler Chrysler), had a wide range of products and strong brand names with a high-quality image. Toyota’s growing reputation for quality and the very small numbers of technical problems in its vehicles generated interesting customer loyalty and growing demand for its products. Toyota management was managing the company’s inventory, costs, and capacity very successfully and was applying for cost reduction programs very well. Toyota had a driving ambition to become greener. The company made a hybrid-powered (gas and electric) sedan- the Prius- that had already been snapped up in U.S. and European markets. Toyota also made huge investments in developing fuel-cell technology for its vehicles. Its gas-powered cars, pick-ups, minivans, and SUVs included such models as the Camry, Celica, Corolla, 4Runner, Echo, Land Cruiser, Sienna, the luxury Lexus line, and a full-sized pick-up truck, the v-8 Tundra. With its wide distribution channels, strong channel efficiency and effectiveness, Toyota was successfully competing with the world’s upper three automakers and poised to replace GM in the top spot this decade.
Toyota was known worldwide for its up-to-date vehicles, strong vehicle design, comfortableness, safety, strong resistance to wind and rollover, low fuel consumption, presence of electronic and other devices in the vehicles, and a strong reputation for luxury. Surveys, however, rated the attractiveness and comfort of its passenger cars as mediocre. Also rated mediocre was the off-road excellence of its SUVs. Toyota was a leader in technological improvements, such as drive, production, and vehicle construction technology and had a solid ability to design and innovate new products, to differentiate its products, to innovate new vehicle lines, and to extend existing vehicle lines.