Extreme Toyota: Radical Contradictions That Drive Success at the World's Best Manufacturer

Chapter 5. Local Customization

Toyota began as a small, local company, producing its first automobiles in the Mikawa region near Nagoya in the provincial town of Koromo-cho. The town eventually renamed itself Toyota City. The first Toyota passenger car, the A1 prototype, was produced there in May 1935 followed by the model AA in September 1936 (Figure 5.1). One month later, the AA was renamed the Kokusan Toyoda Goh, meaning "domestically produced Toyota."

Toyota today conducts its worldwide business from the same location, administering 15 plants within Japan, eight of them in its hometown, plus 53 manufacturing companies in 27 countries and regions, selling automobiles in more than 170 markets around the world (as of March 2008). Despite its global presence, Toyota remains a local company at heart. Its headquarters are still in its hometown, and many of its executives boast about being "country folk from Mikawa."^[] When venturing overseas, it tries hard to become a local company, as Akio Matsubara, Senior Managing Director of Human Resource Management, explained:

When we operate in other countries, we are sensitive to the needs and requirements of the countries and regions we have entered. For example, to get a sense of the true situation on the ground in the United States, we ran a test at NUMMI,^[] in California, a joint venture with GM. After that, we started factory operations in Kentucky. The issue then was how to successfully assimilate into the region. We tried to become ...