TOKYO -- President Akio Toyoda is shifting Toyota Motor Corp. into expansion mode after years of dealing with crises and rebuilding.
Tapping record profits and a biggest-ever r&d budget, Toyota has announced plans to add assembly plants and has unveiled the next-generation Prius as the leadoff car for a new commonized platform called the Toyota New Global Architecture.
The company also has said it will virtually phase out traditional internal combustion engines by 2050.
Toyoda, 59, spoke through an interpreter Oct. 29 with Asia Editor Hans Greimel and Staff Reporter David Undercoffler about his strategy for alliances, autonomous driving, Lexus and diversity.
Q: Toyota formed a partnership with Mazda this year, after tie-ups with BMW and Subaru. What does Toyota want from such alliances?
A: What I'm looking for through these alliances is ever-better cars. That's the only reason I engage in alliances.
Toyota doesn't have a great history of alliances. Toyota has not been very good at them. One reason may be the size of Toyota. Another is the financial aspect. People tend to look at such an alliance and think Toyota is trying to exercise its financial wherewithal.
If a company is big, does that mean it's best at everything? No. And since becoming president I have approached alliances from the standpoint of building ever-better cars and that is what we did in partnerships with BMW, Mazda and Subaru.
What can Toyota learn from those companies?
Conveying emotion through vehicles is something BMW is very good at. In Europe, especially Germany, they are very good at close cooperation between industry, government and academia. So suppliers and carmakers are very good at competing on one hand and cooperating on the other. In working with BMW, I think we can learn about the kinds of mobility we can envision for Germany and Europe.
What does Toyota gain from teaming with BMW for fuel cells?
Toyota is more advanced in fuel cell technology than BMW. But BMW is much better at motorsports and the emotional content of its vehicles. At this point in time, whoever is ahead can lead the other partner. In the case of the BMW-Toyota alliance I think in both of those areas we will be able to reach the same level in the future, inspiring and stimulating each other.
They are the forerunner in what we are currently engaged in with the Toyota New Global Architecture. But there is a huge difference between our strategy and Mazda's.
At Toyota, we have operated so long on a business model of selling large volume to achieve big profits. We always try to position ourselves in a market because the market is there.
But Mazda, given its size, will simply be buried if it enters the big market in the same way. Therefore, it tries to make itself stand out with unique products.
What models stand out at Toyota and Lexus? How important is having a halo car?
We are trying to position Lexus vehicles as emotional and cool. For Toyota, I attach greater value to family, convenience, fun-to-drive.
And how do those values manifest themselves in the cars?
In the case of Lexus ... we are now entering a new chapter, which is symbolized by the LF-FC concept. If it had been a few years ago, the vehicle symbolizing the new chapter would have been a station wagon. If your focus is selling more cars, as many as possible, a station wagon would be of interest. But because we shifted our emphasis to the elements of emotional and cool, that brought about our greater emphasis on the RC coupe and what it represents.
We are trying to enhance the brand value and equity in Lexus itself. In addition to simply introducing new models and new vehicles, we came up with the Lexus Intersect cafe, created movies and are conducting various initiatives to enhance the brand.
What's wrong with a station wagon?
When you say "emotional and cool," it's not a station wagon, it's the coupe first.
We started using the RC in motorsports. In the past, there was a clear distinction between cars for motorsports and cars for the mass market. There was no story or narrative connecting them.
So do the brands need a halo?
All I say is make ever-better cars. I want to make my brand cooler and more passionate.
U.S. Lexus dealers want a seven-seat, family-hauling SUV. How does that fit with your vision?
Dealers are telling me that all the time. My answer is: "That's the Toyota brand."
So you are putting the brakes on that?
At the moment, yes. Dealers are always asking for more. But there is a sequence of things, of introducing models.
In the case of Lexus we are trying to enhance the brand value. The vehicles are an important element of Lexus, but they aren't everything. There's delivering the hardware of the vehicles. But focusing on the softer aspects of the brand is what we need to do going forward.
I would very much like Lexus to be sold together with a dream or a story.
In Japan, young people are losing interest in cars. Is the trend expected to spread to other markets, including the U.S.?
I used to think young people not being interested in motor vehicles was unique to Japan. But it seems to be a phenomenon in the United States and Europe as well. This seems to be a common head for all advanced automotive markets.
What has Toyota learned in Japan about how to deal with it?
One thing we have learned is that it's an overstatement to say that young people are not at all interested in cars. I don't think we make enough effort to reach out to younger people. We need to bring our cars to places young people gather and show them how fun vehicles are.
Does autonomous driving make that harder?
In the future cars will diverge into two genres. One is car sharing, with cars being almost commodities. In the other, cars won't be just about transportation from point A to point B. Rather, they will offer freedom through mobility. That is something I should never allow to be lost.
In the first genre, autonomous driving will be relevant by offering space to occupants so they can do something while moving from one place to the other. In the other world, the fun-to-drive world, autonomous driving technology will let drivers who are really interested in driving attain driving skills beyond their actual capabilities. There is a gap between the driver's natural ability and what they want to attain. Autonomous driving will fill that gap.
Diversifying Toyota's leadership and work force has been a hallmark of your tenure. What did Toyota learn from the resignation of Julie Hamp, who had been appointed global chief communications officer?
I didn't promote Julie Hamp from the standpoint of promoting diversity. I didn't decide to put her in that position because she is a non-Japanese or because she is a woman.
I appointed her because I found her to be the optimal person to convey my own feelings as the chief communications officer.
What she told me, which is still very fresh in my memory, is that I gave personality to Toyota, which is a huge company. And she wanted to communicate and convey that personality of Toyota as a corporation to the world at large.
Since she joined Toyota and decided to live in Japan, she made tremendous efforts to have very close communications with our Japanese employees. People who were in contact with her as chief communications officer are now trying to implement what she originally wanted to achieve here in Japan. I personally learned that there is much room for improvement for non-Japanese being stationed in Japan for work.