TOKYO -- Not long ago, Toyota engineers prepared a special treat for President Akio Toyoda, with an eye to the electrified future. It was an all-electric version of his beloved Toyota 86, the sporty coupe Toyoda had a personal hand in creating and still drives today in rally races.
Toyoda took the modified car for a spin. He wasn't impressed.
"The first question I got was: "What is your impression?'" Toyota's self-proclaimed "master driver" recounted last week to Automotive News. "And my answer was, "It's an electric car.'"
His disappointment spotlighted a key challenge confronting old-guard automakers in a rapidly changing industry. Like other traditional metal-benders from Detroit to Wolfsburg, Toyota Motor Corp. finds itself struggling to mold conventional ideas about what a car should be into the new reality of zero emissions, autonomous driving and on-the-go connectivity.
"What I meant was, for an OEM manufacturer, you're choking yourself. It is commoditizing your vehicle," Toyoda said of the proposition of next-generation battery-powered cars.
The conflict was on full display in the latest earnings report Toyota released last week. The company reported a 21 percent tumble in net income for the fiscal year that ended March 31 and warned that net income was poised to fall again, by 18 percent, in the current fiscal year.
That would be the first back-to-back net profit decline in more than 20 years for the company founded by Toyoda's grandfather. In announcing the gloomy results, Toyoda minced no words.
"I feel a strong sense of crisis," he said, "about whether or not we are actually executing carmaking from the perspective of the customer in all Toyota workplaces, from development, production, procurement and sales, all the way to administrative divisions."