Toyota is one of the world's largest automakers and a beacon of the Japanese automotive industry. The brand's logo is simple and highly recognizable. In the Chinese market, Toyota has deeply cultivated for decades by establishing joint ventures with FAW Group and GAC Group — FAW Toyota and GAC Toyota — accumulating a massive user base. In addition, the Toyota Group also owns many well-known brands, such as Lexus, Daihatsu, and Hino, constructing a vast product empire that covers everything from economy small cars to luxury cars, passenger vehicles to commercial vehicles, and traditional energy to new energy.
Toyota Motor Corporation was founded in 1937. In 1933, Kiichiro Toyoda established an automobile department within the Toyota Automatic Loom Works founded by his father, Sakichi Toyoda, opening Toyota's journey into car manufacturing. In 1936, Toyota launched its first mass-produced model, the Type AA sedan, equipped with a self-developed inline-six engine, laying a solid technical foundation. On August 28, 1937, the automobile department officially became independent, and Toyota Motor Corporation was proclaimed established.
The current President (CEO) of Toyota is Koji Sato, who took over the baton from Akio Toyoda in April 2023, leading this century-old giant toward the deep waters of electrification and intelligence. Regarding the Chinese market, Toyota conducts business through FAW Toyota, GAC Toyota, and Lexus China. Starting in 2025, it will implement a "China-led" localized R&D, production, and sales integration transformation in the Chinese market, establishing a China Chief Engineer (CE) system to participate in competition with a speed closer to local needs.
Toyota's development history is a legend that started from loom workshops and eventually reached the top of the global automotive industry.
Loom Roots and Automotive Startup (1867–1937): Toyota's origins are far older than automobile manufacturing. Founder Sakichi Toyoda witnessed the hardship of his mother hand-weaving cloth since childhood and vowed to improve production efficiency through invention and creation. He invented a wooden manual loom in 1890 and obtained a patent, laying the foundation for Toyota's future innovative genes. His son, Kiichiro Toyoda, inherited his father's innovative spirit. In the 1930s, he turned his attention to the nascent automotive industry, initiating the historic transformation of the Toyota brand from textile machinery to automobile manufacturing.
Post-War Rise and Lean Production (1945–1980s): Amid the ruins of Japan's post-war economy, Toyota launched a management revolution that would influence the world — the Toyota Production System (TPS). The core of TPS is "Just-in-Time production" and "Jidoka" (automation with a human touch), aiming to thoroughly eliminate waste and pursue extreme production efficiency and excellence. This model transcended the automotive industry to become a management thought system renowned worldwide.
Globalization and Local Deep Cultivation (1980s–2010s): Toyota's globalization steps were solid and powerful. It conquered mature markets such as North America and Europe with models like the Corolla and Camry. In China, Toyota deeply cooperated with FAW and GAC, introducing global strategic models such as the Corolla, Camry, and RAV4 into domestic production, quickly becoming a leading joint venture force in the Chinese passenger car market, constructing a production and sales network covering the country.
Electrification and Multi-Path Exploration (2020s to Present): Entering the 2020s, facing the global wave of electrification, Toyota, based on its global strategy, proposed an all-around electrification strategy with Hybrid Electric Vehicles (HEV) as the cornerstone, and Battery Electric Vehicles (BEV), Plug-in Hybrid Electric Vehicles (PHEV), and Fuel Cell Electric Vehicles (FCEV) running in parallel. This strategy reflects Toyota's, as a global automaker, profound insight and multiple considerations for different markets and user needs. In the Chinese market, facing the strong rise of domestic brands, Toyota initiated deeper transformations in 2025–2026, comprehensively advancing a "China-led" R&D, production, supply, and sales system from management structure, product definition to supply chain integration, attempting to regain the initiative in the new competitive landscape.
Toyota has established a vast and clear product pyramid and built solid competitive barriers in different markets and price points with the model of "flagship leadership, stable base, feature supplement."
Flagship High-End and Performance Series: The Crown has been upgraded from a single model to a high-end sub-brand. The family matrix covers crossover vehicles, sport wagons, and sedans, satisfying high-end user needs with a posture suitable for both business and home. Flagship MPVs Alphard and Vellfire solidify their dominance in the high-end business reception field. Regarding sports cars and performance cars, the legendary sports car Supra and the Toyota GR brand jointly form a performance car matrix, serving as a vivid carrier of the brand's sporty appeal.
Backbone Forces and Global Strategic Models: The Camry, as one of the most successful mid-to-high-end sedans globally, is generally achieving full hybridization. The Corolla is the king of cumulative global sales volume and is the brand's most solid moat. In the SUV field, the RAV4 and Highlander build a powerful barrier covering mainstream family use to luxury large seven-seater SUVs. In the MPV market, the globally popular Sienna provides an excellent choice for multi-child families and business users. In the pickup truck field, the legendary Hilux enjoys a very high reputation in markets such as the Middle East and Southeast Asia.
Entry-Level and Localized Models: Models such as the Vios, Yaris L, and Levin are the market bridgeheads for Toyota's entry-level sedans, absorbing a large number of first-time buyers for the brand. In the Chinese market, the two joint venture companies rely on Toyota's TNGA architecture to develop multiple models specifically designed for Chinese users, such as GAC Toyota's Frontlander and FAW Toyota's Corolla Cross, realizing the fusion of global quality and local aesthetics.
Luxury Brand and Other Commercial Vehicles: Lexus is the luxury brand carefully crafted by Toyota in 1989, contributing about 182,000 units in sales in China in 2025. Daihatsu focuses on micro cars (K-Cars) and small cars, deeply popular in Southeast Asia and the Japanese domestic market. Hino contributes to building a green and efficient logistics system in the heavy truck field. In addition, Toyota has also launched multiple pure electric vehicle models (BEV) globally, such as the bZ4X, and plans to launch more new pure electric vehicles based on the e-TNGA platform successively after 2026, such as the C-HR EV.
Toyota's global sales and profitability remain at the top of the world automotive camp, but it is facing unprecedented challenges in the Chinese market.
Global Champion, Profit Pressure: In 2025, Toyota Motor Corporation, mainly with Toyota and Lexus brands, delivered a mixed report on a global scale. On one hand, sales reached a new historical high again. Toyota's global group sales volume (including Daihatsu and Hino) reached 11.322 million vehicles for the year, a year-on-year increase of 4.6%, holding the title of global automotive sales champion for six consecutive years. On the other hand, its profitability has borne heavy pressure due to high investments in electrification transformation and intensified market competition. In the first three quarters of Fiscal Year 2026 (April to December 2025), Toyota's operating revenue increased by 6.8% year-on-year to 38.09 trillion yen, but net profit plummeted by 26.1% year-on-year to 3.03 trillion yen. This situation of "increasing revenue but not profit" reflects the "pain" in the transformation process of this automotive giant.
Looking at the global power type trend, in 2025, "electrified models" of Toyota, including Hybrid Electric Vehicles (HEV), Plug-in Hybrid Electric Vehicles (PHEV), and Battery Electric Vehicles (BEV), reached a record 5.039 million vehicles globally, accounting for nearly half of total sales. Among them, HEV remains the absolute protagonist, with global sales exceeding 4.4 million vehicles. Although the absolute global sales scale of Toyota's Battery Electric Vehicles (BEV) is still relatively small, its growth rate is bright in key markets such as the US, Europe, and China.
US Market: North America is Toyota's most stable market globally. In 2025, Toyota and Lexus's total annual sales volume in the US market reached about 2.5 million vehicles, up 8% year-on-year. More crucially, the sales proportion of its electrified models (including HEV, PHEV, BEV) in the US reached a surprising 47%, meaning almost one out of every two cars sold has "electricity." The hot sales of models such as the Camry Hybrid and Corolla Hybrid are vivid manifestations of Toyota's "hybrid" advantage in the US.
European Market: 2025 was a year of remarkable achievements for Toyota in Europe. Annual sales reached a record 1.299 million vehicles. Among them, the sales proportion of electrified models reached as high as 77% (up 5% year-on-year), and pure electric vehicle sales even skyrocketed by 46% year-on-year. This indicates that Toyota's "full electrification" transformation pace in the European market is much faster than its rhythm in other markets globally.
China Market: In 2025, Toyota's sales volume in the Chinese market was about 1.78 million vehicles (slightly different in statistical caliber excluding Lexus), a slight increase of 0.23% year-on-year. Although this growth rate is not bright, it is already "the only one standing out" among the three Japanese giants, being the only mainstream joint venture brand to achieve positive growth. The contributions of the two joint venture companies are equally matched: FAW Toyota sales were about 805,500 vehicles, and GAC Toyota were about 772,700 vehicles. However, entering 2026, Toyota faces greater pressure in China, with sales in January and February showing significant year-on-year declines, indicating that the market situation has not improved. Another positive signal is the rapid growth of its pure electric vehicle sales, with nearly 200,000 pure electric sales in China in 2025, surpassing the Volkswagen brand for the first time. The effort to rely on Chinese localization supply chains has begun to show results.
Toyota's core technology is the cornerstone of its century-long dominance in the global automotive market. Among them, the Hybrid Electric Vehicle (HEV) system and TNGA architecture are the two brightest technical labels.
World-Leading Hybrid Technology: Since launching the world's first mass-produced hybrid model, the Prius, in 1997, Toyota's THS (Toyota Hybrid System) hybrid system has become an industry benchmark. The system realizes the most optimized and highest-efficiency dynamic combination of engine and motor through a sophisticated planetary gear set — Power Split Device (PSD). After more than twenty years of development, the Toyota hybrid system has evolved to the fifth generation, featuring miniaturization, lightweighting, and higher efficiency, achieving the ultimate balance of high performance and low fuel consumption. In 2025, Toyota hybrid vehicle sales exceeded 4.4 million vehicles globally, accounting for 88% of the total sales of its electrified models, and is the absolute backbone of Toyota's electrification transformation.
Leading Modular TNGA Architecture: The TNGA (Toyota New Global Architecture), fully introduced to China in 2017, is a revolution of Toyota's "car-making concept." It is not a single chassis platform but an innovation system involving R&D, design, production, procurement, and the entire value chain. The TNGA architecture can be subdivided into many sub-platforms according to different models, such as GA-C for compact cars, GA-K for mid-to-large cars, and e-TNGA for pure electric vehicles. It brought Toyota a comprehensive leap in "mechanical quality, chassis performance, and safety performance."
Pure Electric Power and Smart Chassis: In the pure BEV field, Toyota launched the e-TNGA pure electric dedicated platform. bZ series models, by equipping batteries from giants such as BYD, combined with the fifth-generation Toyota Safety Sense intelligent driving safety system and domestic driving assistance technology from Chinese local suppliers, have made up for the shortcomings on the pure electric track and achieved a leap in battery safety, range, and intelligent driving.
Safety and Hydrogen Fuel Cell Technology: Toyota mounted the first-generation Toyota Safety Sense on the Corolla in the 1990s and has now iterated to advanced versions. On new flagship models such as the 2026 Camry, it is equipped with advanced TSS systems including Pre-Collision System (PCS), Lane Departure Alert (LDA), etc., providing users with comprehensive active safety protection. In the commercial vehicle field, Toyota continues to promote technical verification and demonstration operations of MIRAI hydrogen fuel cell vehicles as one of its backup plans for the future.
Toyota's overseas business has long surpassed the traditional complete vehicle export model and has constructed a vast manufacturing, R&D, and sales network globally.
North America (Market Foundation): North America is the center of Toyota's global production and sales and a key profit source. Toyota has built multiple complete vehicle and parts factories in various locations in the US, achieving high localization production. It is a core strategic asset for resisting trade barriers and exchange rate risks.
European Market (Deep Localization): Toyota has cultivated Europe for many years. In addition to complete vehicle imports, it has production bases in countries such as the UK and Turkey, responsible for supplying market demand in Europe and the Middle East, Africa, and other regions, to better fit local regulations and culture.
Asia and Oceania (Comprehensive Coverage): Toyota takes Japan as the R&D and high-end manufacturing headquarters. It has built strong production bases and supporting systems in Southeast Asian countries such as Thailand and Indonesia, holding a high market share in commercial vehicles and pickup trucks. In addition, Toyota has also started production on multiple products in countries such as India and Pakistan.
Africa and Middle East Markets (Steady Progress): In markets in the Middle East and Africa where infrastructure is poor, road conditions are complex, and durability requirements for products are extremely high, Toyota's Hilux and Land Cruiser series off-road vehicles have won a near-monopoly market position with their super-strong reliability.
China Market (Accelerated Deep Localization): After fully entering the Chinese market in the early 21st century, Toyota established a world-class production and sales network through two joint venture companies, FAW Toyota and GAC Toyota. Since 2025, Toyota has implemented a "In China, For China" localization strategy, comprehensively improving the independent decision-making and rapid response capabilities of its China business from supply chain, R&D to management. The technology and parts of some pure electric vehicles have been led by the Chinese team for development and exported back to the global market, which is also an important reason for the rapid growth of its pure electric vehicle sales in China.
Standing at a new starting point in 2026, Toyota's future strategy is clear and pragmatic.
Global Strategy: At the strategic level, Toyota will continue to adhere to its unique "all-around electrification" path. On the road to global carbon neutrality, Toyota believes that hybrid and plug-in hybrid technologies still have huge value as transitional solutions before charging facilities and consumer habits completely change. Toyota President Koji Sato once emphasized that the future will rely on hybrid vehicles as a stable pillar and accelerate the R&D of pure electric and fuel cell vehicles.
Technical Route: Once Toyota's solid-state battery technology achieves mass production, it will fundamentally solve the core pain points of current electric vehicles in safety and range. Secondly, Toyota will continue to promote hydrogen fuel cell technology. Finally, in the Chinese market, Toyota is accelerating cooperation with local industry chain giants such as CATL, BYD, and Momenta, making up for shortcomings in frontier battery technology and advanced intelligent driving fields.
Brand Adjustment and Product Focus: Facing changes in consumer needs and fierce competition in the Chinese market, Toyota adjusted its brand and product line in its planning. On one hand, it continues to focus on the Lexus high-end brand and GR sports brand to enhance brand value and user stickiness. On the other hand, for the Chinese joint ventures FAW Toyota and GAC Toyota, Toyota is considering optimizing its product line and simplifying some "twin models" with overlapping positions and poor market performance.
Deepening Local Roots: For the Chinese market, Toyota's determination for reform is unprecedented. In 2026, Toyota explicitly proposed to accelerate the promotion of "China-led" R&D, production, and sales integration. This means that from model development, supply chain management to marketing strategies, decisions will be made by local teams who understand Chinese consumers better, rather than by the Japan headquarters issuing orders, aiming to fundamentally improve the response speed and model competitiveness to the Chinese market. This may be the winning hand for Toyota to stand its ground in the future fierce Chinese automotive market.
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