Toyota, the World's No. 1 Automaker, Invests $10 Billion to Transform an Old Fuji Plant into a 'Future City'

[Hyundai Motor, Over the Mobility] (35)
Toyota's Future Mobility Strategy
Maintaining Global No. 1 with 10 Million Units Sold Annually
9.2% Operating Margin in the First Half, Thanks to Hybrids
Chairman Akio Toyoda: An Extroverted Leader with

Editor's Note[Hyundai Motor, Over the Mobility] is a series that summarizes the secrets behind Hyundai Motor Group's rise to become the world's third-largest automaker. Historically, the country that leads the automotive industry has dominated the global economy. As the crown jewel of manufacturing, the automotive sector exerts a far-reaching influence in technological advancement, exports, and employment. While Hyundai Motor once played the role of a fast follower, it has now emerged as a first mover driving the industry forward. This series delivers first-hand insights into the past, present, and future of Hyundai Motor, as experienced at global reporting sites. After the 40th installment, the series will be published as a book.

The global automotive market is a battlefield where not only technological prowess but also strategy determines success. Only companies that can quickly read the rapidly changing landscape and anticipate their competitors' moves will survive. The starting point of any strategy is competitor analysis. By understanding both the competition and oneself, a company can decide which weapons to deploy amid shifting currents. To thoroughly analyze Hyundai Motor Group, it is essential to examine the current state of its competitors. Over the next three installments, we will analyze the strategies of the three major competitors threatening Hyundai Motor in the global market: Toyota, Tesla, and BYD.

Toyota, the world's number one automaker, is Hyundai Motor's most formidable rival. After the 2008 global financial crisis, Toyota overtook General Motors (GM) to become the global sales leader. Apart from briefly ceding the top spot to Volkswagen between 2016 and 2017, Toyota has consistently maintained its throne since 2020.

Akio Toyoda, chairman of Toyota Group, is presenting the vision for Woven City at the 2025 CES conference. Photo by Toyota Group

The "Toyota Production System" (TPS), which encapsulates Toyota's management philosophy, revolutionized global manufacturing paradigms in the 1990s. The core of TPS lies in two pillars: Jidoka (automation with a human touch, where machines operate automatically but humans intervene immediately to resolve issues when anomalies arise), and Just in Time (supplying only as many parts as needed, without stockpiling inventory). By maximizing productivity, TPS remains a textbook and guidebook for manufacturing companies worldwide to this day.

From the past to the present, Toyota has been Hyundai Motor's benchmark. In the early 2000s, Hyundai Motor Group Honorary Chairman Chung Mongkoo was known for his frequent declaration that "we must catch up with Toyota." When Hyundai Motor surpassed Toyota for the first time in the J.D. Power Initial Quality Study in 2004, the company widely publicized the achievement in its advertising campaigns.

The early model of the Prius, the world's first mass-produced hybrid vehicle launched by Toyota in 1997. Provided by Toyota Group

Similar Yet Different: Two Automotive Giants

From a global automotive industry perspective, Toyota and Hyundai Motor are the two companies with the most similar structures. Worldwide, only Toyota and Hyundai Motor offer a full powertrain portfolio spanning internal combustion engines, hybrids (HEVs), electric vehicles, and hydrogen fuel cell vehicles. Today, the two companies have evolved into both competitors and collaborators. While they fiercely compete for market share in major markets such as the United States, Europe, China, and India, they also cooperate on issues such as promoting the hydrogen economy, responding to global tariffs, and countering the rise of Chinese electric vehicle makers.

The two companies are also fierce rivals in terms of profitability. In 2024 global sales, Toyota ranked first with approximately 10 million units sold, while Hyundai Motor and Kia ranked third with 7.2 million units. As of the first half of 2025, Toyota's operating margin stands at 9.2%, and Hyundai Motor and Kia's at 8.7%-both among the highest in the traditional automotive industry. The secret to this high profitability is hybrids. While other competitors must fight the mobility war with just two portfolios-internal combustion engines and electric vehicles-these two companies have the powerful additional weapon of hybrids. As the electric vehicle market entered a temporary demand plateau (chasm) after 2023, hybrids have become the mainstay during this transitional period.

Another commonality between the two companies is their resilience in times of crisis. The most recent crisis was the COVID-19 pandemic, which shook the global market. In 2020, Toyota reclaimed the top spot in global sales from Volkswagen Group. Hyundai Motor Group jumped from fifth place in 2020 to third in 2021, achieving the highest ranking increase among automakers during the pandemic. A corporate philosophy that turns crises into opportunities and strong organizational cohesion have propelled both companies to the top ranks globally.

Akio Toyoda, chairman of Toyota Group, is presenting the vision for Woven City at the 2025 CES conference. Photo by Toyota Group

Charismatic Extrovert Akio vs. Restrained Strategist Euisun

Their leadership styles, while similar in some respects, are also distinctly different. Chairman Akio Toyoda of Toyota Group and Chairman Chung Euisun of Hyundai Motor Group are both powerful leaders at the helm of massive automotive groups. Both face the shared challenge of proving their management capabilities as grandsons of their respective founders. However, the two differ greatly in personal disposition and corporate management style.

Looking at their personalities, Chairman Toyoda is a classic extroverted leader. He actively communicates with the public by sharing everyday moments on his personal social media accounts. He appears on local radio programs and internal live broadcasts, and even created an alter ego, "Morizo," to participate as a motorsports driver and launched a green tea brand bearing his name, breaking the mold of the traditional executive. At the World Rally Championship (WRC) in Japan in 2024, Chairman Toyoda was seen mingling freely with fans without bodyguards. At a motorsports friendship event co-hosted with Hyundai Motor in Korea last year, he personally performed a driving demonstration. In the lobby of the Shimoyama Toyota Technical Center in Japan, a rally car overturned by Chairman Toyoda during a test drive is on display. Toyota even released footage of this accident on its official YouTube channel, transparently revealing both the vehicle development process and the chairman's mistakes. Chairman Toyoda has built his unique leadership style on communication, on-site management, and authenticity.

Chairman Chung, by contrast, is more of an introverted and restrained leader. He prefers to deliver carefully crafted messages when necessary, rather than taking center stage. He rarely reveals personal character or private life, appearing only on official platforms to communicate the company's strategy and direction. A prime example was his announcement of investment plans at the White House in March 2025. In front of then-President Donald Trump and a global audience, he calmly and assertively explained Hyundai Motor Group's investment plans in the United States and the importance of the U.S. market, reinforcing his image as a "responsible leader" who considers both national and corporate interests. Chairman Chung's management philosophy and vision will be discussed in detail in future installments.

Chairman Chung Euisun of Hyundai Motor Group (left in the photo) and Chairman Akio Toyoda of Toyota Group are greeting each other at a motorsports event co-hosted in Korea last October. Provided by Hyundai Motor Group

Is Toyota a Latecomer to Electric Vehicles? Its Electrification Strategy

Interestingly, the management styles of the two leaders are the opposite of their personal dispositions. Toyota pursues perfection through caution and a keen sense of reality, while Hyundai Motor seeks breakthroughs through speed and boldness. In terms of management style alone, Toyota is closer to being introverted, and Hyundai Motor to being extroverted. The difference in status-Toyota defending its number one position and Hyundai Motor aiming for a quantum leap as a latecomer-is reflected in their respective management strategies.

Toyota prioritizes traditional values such as safety and durability over disruptive innovation that changes the market landscape. This conservative approach was a strategy to maintain technological excellence and quality, but it led to criticism that Toyota was "slow" in transitioning to electric vehicles. In 2020, the shift to electrification centered on electric vehicles was a common challenge in the global automotive industry. The European Union officially announced a ban on new internal combustion engine vehicle sales from 2035, and Volkswagen, Hyundai Motor, and Chinese electric vehicle makers rushed to expand their electric vehicle lineups.

In contrast, Toyota had yet to release a notable pure electric vehicle model by 2020. The company faced criticism for not responding swiftly to market changes and was harshly labeled as "behind the times." However, Chairman Toyoda chose a different path. He emphasized that "the market share of pure electric vehicles will not exceed 30 percent" and that "hybrids, hydrogen vehicles, and internal combustion engine vehicles must coexist." His logic was that reducing carbon emissions itself should be the goal, not pursuing a specific technology for its own sake. He pointed out that relying on a single technology is risky, given that consumer preferences and infrastructure environments vary by region.

At the time, such statements sounded like excuses for Toyota's tardiness in the electric vehicle transition. Yet, just three years later, his prediction became reality. From 2023, electric vehicle demand plateaued, and the so-called "EV chasm" emerged. In Europe, dissatisfaction grew over the perceived impracticality of government carbon reduction targets, and the side effects of rapid transition, such as sluggish consumption and supply chain disruptions, became apparent. Reflecting consumer preferences and market realities, Toyota has maintained its "Multi-Pathway Strategy," simultaneously pursuing hybrids, hydrogen, and internal combustion engine technologies as eco-friendly solutions.

Another defining feature of Toyota is its technology-driven corporate culture. Founder Sakichi Toyoda was an inventor and engineer. His spirit of changing the world through technology has been carried forward to today's Toyota. The company develops new technologies first, secures patents, and then commercializes them when the market is ready. In 1997, Toyota launched the world's first hybrid model, opening the era of eco-friendly vehicles. Now, it is aiming to lead the next-generation electric vehicle market by securing solid-state battery technology ahead of competitors.

According to the World Intellectual Property Organization's (WIPO) "Technology Trends: The Future of Transportation (2024)" report released this year, Toyota held the most patents related to future transportation technologies worldwide from 2000 to 2023. The company owns 37,000 patents related to land transportation alone, and about 55,000 patents in total when including air, sea, and other future transportation technologies. Toyota also develops most of its core future mobility technologies, such as artificial intelligence (AI) and robotics, in its own research labs. Even if it takes time, the company insists on internalizing technology.

In contrast, Hyundai Motor is pursuing a more aggressive technology acquisition strategy through mergers and acquisitions (M&A). It acquired global robotics company Boston Dynamics and established Motional, a joint venture with U.S. company Aptiv in the autonomous driving sector. More recently, it has considered acquiring a Chinese autonomous driving startup, rapidly expanding its technological capabilities.

The Future City Project: Woven City

In Japan, Toyota is more than just a manufacturer-it is a symbol of national identity and industrial spirit. Toyota, which has imprinted the "Made in Japan" image of precision and reliability on the world, accounts for 2-3% of Japan's GDP and more than 10% of its exports, serving as a pillar of the economy.

Recently, through the future city project "Woven City," Toyota is presenting a new Japanese innovation model centered on data, mobility, and AI, moving beyond hardware-focused manufacturing. Toyota has invested over 10 billion dollars (14 trillion won) in this project alone. There is no precedent worldwide for a single company investing such a massive amount in building a future city.

Panoramic view of Woven City officially launched in September 2025. Provided by Toyota Group

Woven City is Toyota's project to transform itself from an automobile manufacturer into a mobility company. The concept of converting an aging internal combustion engine plant site at the foot of Mount Fuji into a future smart city is symbolic in itself. Here, Toyota applies autonomous driving, robotics, AI, and hydrogen infrastructure in a real urban environment to test how technology can coexist with people's daily lives. The range of experiments is broad, from shared mobility services using autonomous robots to studying how coffee affects human creativity and productivity. First unveiled at CES 2020, the project officially launched last month after five years of construction. In the first phase, 300 selected residents have moved in, with plans to expand the population to 2,000 in the future.

At the national level, Woven City represents a "redefinition of the Japanese innovation model." Japan has long been known for its sophisticated manufacturing technology and high-quality reliability, but has been criticized for lagging behind in digital transformation. Woven City marks a turning point, as Japan moves away from its conservative focus on safety and perfection to embrace a culture of innovation that tolerates failure and encourages experimentation. Ultimately, Woven City is both Toyota's vision for the future and a new symbol of Japanese innovation.