Toyota Now the World’s Largest Automaker

Toyota named largest automaker in the world

Japanese carmaker Toyota has officially overtaken America’s General Motors (GM) as the world’s largest automaker for the first time in seven decades, after the company’s sales record for the year 2008 disposed off the latter from the top position.

Toyota sold 8.97 million vehicles in 2008, 600,000 more than achieved by General Motors. GM has blamed the falling market in the US as the main culprit of the loss.

Unofficially, Toyota has been touted as the number one carmaker since more than a year ago after showing strong growth with a number of best selling models. It was only about the question of time before it is academically unveiled.

However, both companies are facing tough times as the global economy continues to plunge and the two companies have been recording losses and decline in profits. General Motors, in particular, has been locked on lengthy discussion with the US and UK governments to get financial help, alongside another struggling automaker, Chrysler.

Toyota, on the other hand, will be shutting down all of its factories in Japan for more than a week between February and March as the demand of its vehicles from all regions shows weak improvement.

A study done by the Reputation Institute of New York found Toyota to be the world’s most reputable company for the year 2008, ahead of internet giant, Google and furniture icon, IKEA.

Toyota Workers Finding Job Stressful

Toyota has proved itself as a worldwide respected company and brand, and has won a string of notable accomplishments for the past few years. The company is today a prized asset and pride of Japan.

However, this does not come without its adverse consequences.

Despite named as the world’s most reputable company recently, the Japanese automaker has been under intense criticism after questions were raised about its labor practice, an aspect of operation which has never been questioned before.

In the last 12 months, two Toyota worker died, reported to have been cause by stress at work. And a few months ago, a temp employee went berserk, ran amok and stabbed 7 people to death and left 10 others injured in Akihabara, Tokyo. Before the incident, the 25-year old worker has been expressing his concern and frustration over lack of job stability and respect at work.

In 2007, two Japanese journalists published a book, “The Dark Side of Toyota” which depicts and paints the pictures of the bulk of Toyota workers, many of which were deprived of a balanced work style and has to commit to work dedication and loyalty. Part of the book reported that “Workers aren’t machines… They get sick… and they make mistake…. The Toyota system fails to recognize any of that. It appears to be an extremely rational system. But it is, in fact, totally irrational.”

Much of the criticism is centered around the handling of the temporary workers, who get lower pay, lack of benefits and are subject to lay off at any time.

But permanent workers are not spared.

In 2002, a quality control executive collapsed and died of heart failure in the Toyota Tsutsumi plant. Upon his death, his widow revealed that her husband frequently came back from work after midnight. He only slept a few hours per day. The court later ruled that the worker died of overwork after doing more than 100 hours of overtime, much of it was not paid.

Toyota Named the World’s Most Reputable Company

Toyota is the world’s most reputable company for the year 2008, a study by Reputation Institute, a New York based research firm concluded.

The Japanese company is currently the world’s largest auto maker, ahead of General Motors, the company it overtook since the last two years. Apart from the Toyota brand itself, it also owns other best selling vehicle brands such as Lexus, Scion, and Daihatsu in the form of compact cars, sport utility vehicles and trucks.

Other than the automotive business, Toyota also provides financial services such as financing, equipment leasing and related financial products.

On the second position was Google, which breaks into the top spot for the first time. The world’s largest search engine, which has won numerous business awards in the recent years, came as a little surprise, with the company’s reputation and value rising up almost unstoppable.

Sweden’s IKEA, Italy’s Ferrero and America’s Johnson & Johnson came third, fourth and fifth respectively.

More than 600 largest companies were researched to find those with the best global reputation. Toyota, which is headquartered in Tokyo, Aichi and Nagoya, Japan, was ranked 6th in the last two years – 2006 and 2007. In July 2008, Toyota was named as the world’s 5th largest company in the world, behind Wal-Mart, Exxon Mobil, Shell and BP.

Japan Too Is Heading For Recession

Major economic powerhouses such as United States, Canada and Europe are heading towards recession. Japan too, is not spared.

A recent report by Merrill Lynch indicated that the country is likely to embrace recession in the next 12 months. The cabinet in the Prime Ministers office is expected to officially declare an economic recession in due time.

The falling numbers of exports, drop in public and private investment, and lower consumer spending combine to shake the economic pillar of the country, with its GDP (growth domestic product) shrinking by some 0.6 percent. The rate of the downturn is the fastest and ugliest since the last recession in 2001.

Japanese based automaker, Toyota, which is currently the world’s biggest car maker has seen its profits slumping close to 30% as the continued increase of petrol price put off consumer’s interest to buy vehicles. Its sales in America is the worst hit and its performance of going 7 years with full profits is in grave danger.

“The increase in oil and commodity prices is damaging corporate profits, while rising inflation is hurting households,” Mamoru Yamazaki, chief economist for Japan at RBS Securities told The Times, UK based newspaper.

Japan was struggling during the recession periods declared separately in 1998 and 2001.