Japanese automaker Toyota fell from second to tenth place in the 2023 “Future Readiness” annual assessment of automakers conducted by a Swiss business school.
The ranking is based on an analysis of companies’ performances across 7 areas including financial fundamentals, investor expectations, and business diversity. According to the International Institute for Management Development (IMD):
“The conservatism of Toyota has dragged the company down, causing it to drop outside of the top five positions for the first time in more than a decade.”
Howard Yu, director of the IMD Center for Future Readiness, said in an interview that Toyota is a “prudence organization” and it needs to “speed up.” Toyota has a chance of ranking higher if it can “ramp up the speed” of decision-making, especially in the field of vehicle electrification, Yu suggested.
Toyota’s decline occurs as a growing number of countries tighten their regulations on gasoline-powered automobiles. Competition to obtain batteries and chips has increased as demand for EVs grows as a viable solution to minimize carbon footprint.
U.S. EV giant Tesla topped the ranking, unchanged from last year, fending off pressure from Chinese rivals and continuing to grow revenue. Chinese automaker BYD rose from 5th to 2nd place replacing Toyota. Its abilities to produce batteries and chips in-house are “making it completely self-sufficient,” IMD said.
Other Chinese car manufacturers also saw a sharp rise in the rankings, with XPeng climbing to 6th place from 12th and Li Auto jumping to 7th spot from 14th. Germany’s Volkswagen AG remained in third place. Among other Japanese automakers, Honda came 14th, Nissan was placed 20th and Suzuki was seated at 21st place.
Source: Japan Times
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