TOKYO -- Akio Toyoda, scion of Toyota Motor Corp.'s founding family and now its next president, will bring fresh thinking and U.S. perspective to the worlds top carmaker as it fights an unprecedented financial crisis.
Toyoda will succeed current President Katsuaki Watanabe in June, the company said today, ending weeks of speculation. An executive vice president since 2005, Toyoda will be 53 when he takes the helm, making him the youngest president in the companys history.
Some Japanese media are already portraying the affable, motor racing fan as the anointed family prince finally riding to the rescue of a national icon. Speaking at news conference, Toyoda himself said he hopes to someday be seen as the flag that rallied a corporate comeback.
In the meantime, the Toyoda heir will inject an international outlook into a company whose overseas operations, including the United States, now account for most of its sales and are contributing to the first operating loss in 70 years. Toyota is tapping to its dynastic roots for new direction in uncharted waters.
Innovative and youthful ideas will be required, Toyota Chairman Fujio Cho said at a hastily called press conference to announce the change.
We need a new generation to make bold change and reform.
Indeed, todays Toyota would be unrecognizable to Akios grandfather Kiichiro, who founded the auto maker in 1937, or his father Shoichiro, himself a president from 1981 to 1992.
Most of the company's history has been a march of progress. But now, Toyota is slashing production, cutting jobs and reeling from tumbling sales amid a global financial crisis. The company says it will post an operating loss for the fiscal year ending March 31.
North America accounts for a third of Toyota's worldwide revenue. U.S. sales fell 15.4 percent to 2,217,660 vehicles last year.
The world's largest carmaker announced separately today that global sales dropped 4 percent to 8.972 million units in 2008. It marks Toyota's first sales decline since 2003.
We are now faced with unprecedented difficulties that come along only once in a hundred years, Toyoda told reporters. I need to focus on the rapidly changing environment.
Looking at his resume, Toyoda:
Will be the first president to have gone to school in America and work there.
Has experience in the increasingly important China market.
Has a reputation for challenging old-guard conservatism.
Toyoda's international portfolio includes stints heading Toyota's China and Asian operations and serving as a vice president at its General Motors joint venture in California, New United Motor Manufacturing Inc. Last summer he was put in charge of all overseas business.
He is deeply grounded in U.S. business practices, customs, and finances.
Like Edsel Ford II, Akio Toyoda graduated from Babson College in Massachusetts, a school that specializes in educating the children of business leaders. After graduating in 1983, he worked at a New York investment bank.
A top priority for Akio Toyoda will be rethinking the company's overseas business, analysts say. His team will have to consider shifting more production offshore to replace domestic output as it battles a soaring yen and rising raw-material costs.
"Toyota is the strongest manufacturer in the world, but it is strategically weak because it has not embedded itself in the richest market in the world, the U.S.," says Michael Wynn-Williams, an analyst at IHS Global Insight. He sees more production shifting overseas "as quickly as possible."
Watanabe is chairing an "emergency profit" committee charged with trimming fat. But aside from production and job cuts, there has been little to show in the way of broad overhauls.
Honda Motor Co., by contrast, held a year-end news conference last month to outline a litany of drastic measures meant to keep the company in the black. They included canceling President Takeo Fukui's beloved Formula One program and the long-anticipated replacement for the NSX sports car.
Toyoda may come under pressure to deliver similar sacrifices.
He has a track record of pushing through unpopular decisions.
Long before e-commerce was a buzz word, Akio Toyoda pioneered Toyota's online business initiatives -- against stiff opposition from the executive floor.
He began by trying to apply Toyota's fabled production system to dealerships. Toyota could build a car in less than a day, but dealers took another 40 days to deliver it to a customer and get paid. Akio wanted to cut that time by more than 10 days to improve dealers' cash flow.