Toyota Motor (TM)

In conjunction with growth, Toyota’s high profit level is particularly exciting. Growth normally signals a downturn in profits as prices fall to accommodate business expansion.They have become great not by making giant leaps but by continous, steady improvement over a long period of time. Day to day it might not seem like much progress. But over a long period of time their growth and increased powers have become apparent. Plus, this was a great extract on TM --

The answer has a lot to do with another distinctive element of Toyota’s approach: defining innovation as an incremental process, in which the goal is not to make huge, sudden leaps but, rather, to make things better on a daily basis. (The principle is often known by its Japanese name, kaizen—continuous improvement.) Instead of trying to throw long touchdown passes, as it were, Toyota moves down the field by means of short and steady gains..... Cumulatively, every day, Toyota knows a little more, and does things a little better, than it did the day before.

- “The Open Secret of Success” , James Surowiecki, The New Yorker, May 12, 2008

Japan’s Mitsubishi Heavy Industries Ltd. (PINK: MHVYF) has unveiled a plan to develop a "regional" jetliner for use by airlines all around the world. The controversial project gained global credibility in recent weeks after analysts began to speculate that Toyota Motor Corp. (TM) - the world’s No. 1 automaker by sales - would join the development team. Toyota subsequently confirmed its involvement, announcing plans to take a 10% stake in the venture and injecting $67 million to help get the initiative off the ground. The Japanese government is backing the program.

The potential payoff is hefty enough to warrant the risk. Such key global trends as rocketing fuel prices, soaring global travel, fast growth in Asia, Latin America and the Middle East, and ongoing problems with major air carriers across the world are stoking worldwide demand for efficient, economic regional jets. And that demand could persist until 2030, many experts predict.

Toyota's profit for the fourth quarter in 2007 jumped 7.5% from the previous year as booming sales in emerging markets such as China, Africa and South America offset declining US sales and about a 20 Billion Yen loss due to an unfavorable exchange rate. The robust sales are expected to continue with increasing demand for its hybrid cars and smaller models due to soaring oil prices .

The Prius has set the standard for hybrids, so Toyota’s sales are not as dependent on fluctuations in oil prices. In general, the fuel economy of Toyota’s fleet is a significant asset.