Steeled by 3 years of crises, Toyoda steers toward growth
What kind of advanced technology do you want to pursue, say for transmissions?
AKIO TOYODA It’s not just a matter of specifications. It’s about exceeding customers’ expectations and winning the customers’ smiles. Like I’m always saying: Always better cars.
There has been no normal for Akio Toyoda, 55, in the three years since he took the helm of the car company founded by his grandfather in 1937.
He became president in 2009, just as Toyota Motor Corp. was grappling with its first operating loss in 70 years. The next year his company's sterling reputation for quality was damaged by the global recall debacle. Then on March 11, Japan's earthquake, tsunami and nuclear crisis hammered the company's global supply chain, forcing Toyota to slash production worldwide.
Meanwhile, the Japanese yen has soared to all-time highs against the dollar, putting unprecedented strain on the automaker's export-dependent domestic operations.
Amid the crisis control, he faces the fundamental task of re-energizing the corporate culture that once made Toyota one of the world's most admired companies.
Toyoda spoke through an interpreter with Asia Editor Hans Greimel about revitalizing the company, pursuing sustainable growth and the burden of being a Toyoda.
Q: What is your sales outlook for the U.S. industry this year and next?
A: Regardless of the size of the market, we will always do our best to create better cars that earn the smiles of our customers. By carefully doing so for each vehicle, that will enable us to reach a certain size.
I am personally very interested in growth. But in achieving that growth, you can either drive the outcome by setting yourself numerical targets or you can try to drive the company based upon vision. At this time, I'd rather focus on vision to drive the company.
Rapid growth is often cited as a reason for many of Toyota's problems in recent years. Why are you still pushing expansion, and how will this time be different?
True. When I refer to growth, I would like sustainable growth.
We have many different stakeholders. Shareholders are one. And in their case, we would like to establish a relationship in which they will be glad to have held our shares over the long term, say 10 to 15 years. In the end, they will be happy to have owned our shares.
Employees are another stakeholder. And we want to be a company where it is enjoyable for them to work because they are able to grow personally over time.
And with customers, I want a relationship in which they can say, "I'm happy I have a Toyota product."
In order to achieve sustainable growth, we need to have the support of those stakeholders. And that's why I always repeat a very simple message: Always better cars.
What will make future growth sustainable?
We want to see shareholders with whom we can have a long-term relationship binding them with the corporation. But some investors are after very short-term profits.
I don't fault the activities of those investors because in the net analysis they may help revitalize the capital market itself. But the sort of people we would like to see investing in our company are the sorts of people who persevere over many years to achieve sustainable growth through investment and who want to share in that growth mutually.
Even if there is a sharp growth spurt, if it is followed by losses after a few years, that causes trouble to shareholders. And that's something I never want to repeat.
This year, Toyota's U.S. sales are down in a market that's up about 10 percent. Why? And what is your outlook for the rest of this year and next?
We announced our Global Vision on March 9. And right after that, on March 11, the Great East Japan earthquake hit us. And we soon announced that all the lines probably wouldn't be normalized until November. But through extraordinary efforts, we normalized operations by August. And now just as we are trying to shift gears and move forward from that, we are being hit by the flood in Thailand.
In both cases, through extraordinary efforts of people working on site, the impact of a huge problem was kept to a minimum.
You've had a challenging three years as president. How has your management style changed?
True, this was a very challenging and demanding period. But Toyota has a history of over 70 years. We would like to look back and say these past few years have been a worthwhile period over the long history of Toyota.
Because of the many events of the past three years, it has become crystal clear that I take full and final responsibility for all things Toyota throughout the world.
This is the shared recognition of 300,000 people working for Toyota worldwide, or maybe over 1 million people, including suppliers and dealers. In every respect, I'm the one taking full responsibility for the entire company for the past, present and the future.
My job is to make decisions.
To be able to make decisions, I study a lot. I myself have grown in past three years. If you are focused on quick decision making and implementation, the time available for decision making is only three seconds or so. But to be able to make a decision in that three-second period, I spend numerous hours anguishing over the difficulties and challenges other people are faced with.
But for me to make positive decisions, I need some time to drive cars so I can get my adrenaline flowing. It's not that I spend 100 percent of my time just listening to people's hardships. Sometimes I have to be go-go Akio. Otherwise, I won't be able to make the right decisions.
When you testified about the recalls before Congress last year, you said you take responsibility because your name is on every car. To what degree do family ties give you a special role?
I have always constantly faced this issue of the product name being similar or the same as my family name and the fact that the company was founded by my grandfather. And after I joined the company, there are certain times that the name itself supported me. But other times, the name was a hindrance.
To me, testifying before Congress was like serving as the rear guard during Japan's Warring States period. The rear guard was a feudal warrior who staked his own life to fend off attackers so his own people would have time to flee. To a certain extent, the fact that I was able to fulfill that role was very revealing to me personally. I realized I am the person who has to defend and protect the company when all the chips are down.
But there are three reasons behind my being able to play that role. First of all, it's the customers. Second, it is the people at Toyota, my colleagues, partners, dealers. I thought I was protecting them. But they were also protecting me. Finally, I'm a car guy. And people expect that as car guy who truly loves cars, I simply cannot turn out deficient cars.
How do you counter the charge that Toyotas are good but boring appliances?
I personally make tremendous efforts to speak my opinion about automobiles.
I wanted to establish a common language through which I can communicate with the designers or engineers who actually create the cars. For me to be able to do that, I have been studying design and how to look at design. And I still study today.
The fact that I drive is also an important factor in establishing a common language.
But the main player is the car itself. All I do is serve as a supporting actor.
Often I'm requested to speak. But three minutes after the speech, people will forget what I said. So even if the speech is in a hotel, I always bring in the car to turn on the engine. Because the engine sound is something the audience will never forget.
You often take a personal hand in fine tuning cars. I understand you are paying close attention to the Lexus IS redesign. What products are you watching most?
I want to pay attention to all the products.
We have an internal car of the year award. And when that is announced, the winning car gets all the attention and the other products fall into the shadows. And that's why the first car that I chose as the winner was the Crown Comfort taxi. It's a very long seller, but it's not just that.
It's a product that achieved sustainable growth along with the growth of company. I chose the Crown Comfort because I wanted to show that I'm paying attention to all the products.
Can you give us some concrete examples of ways to make cars like the Corolla fun to drive?
I don't believe that just because it's a sedan it can't be fun to drive.
When the current-generation Corolla was launched, one of the media reviews had a headline that read, "Well made but boring." I was shocked by that.
The Corolla has a long history, and it is the kind of vehicle that changes in tune with the times. It has always maintained its core essence as the Corolla but at the same time changed itself along with the times. That's why it's a long-selling vehicle. And its mission is to keep doing that.
For some people, just hearing the name Corolla engenders peace of mind. Some customers are willing to buy the Corolla without even looking at the actual car.
That is the greatest praise a model like this can attain.
Of course, I was offended when I heard the Corolla being described as boring. And I began to think, well, this is just a Corolla. But after driving it, it far exceeded my expectations. And customers are still coming out of the vehicle with great smiles. I'm sure we can do the same with the next generation.
You can reach Hans Greimel at firstname.lastname@example.org. -- Follow Hans on