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The Detroit News
Toyota Motor Corp. President Akio Toyoda outlined his goals today to restore the Japanese automaker's core values and increase its sales and profits after two very difficult years.
Toyoda, putting his stamp on the company founded by his grandfather, also streamlined the executive ranks and cut the board to 11 members from 27.
He said the world's largest automaker would focus more on emerging markets, which are expected to account for half of its sales by 2015, up from 40 percent currently.
The company will shift more decision-making to executives in its regional operations to allow them to react faster to developments.
"We will equip them to make decisions in their marketplace, near their customers," Toyoda said.
The Toyota Global Vision outlined at a news conference in Tokyo is Toyoda's first comprehensive plan for the company since he became president in June 2009, a few months before the company spiraled into a crisis with massive safety recalls.
In addition to the recall mess that tarnished Toyota's reputation for top quality, especially in the United States, the automaker has been grappling with a shrinking home market, unfavorable currency trends, and weaker pricing in the U.S. market after the recalls and negative publicity.
Toyota has trailed its leading Japanese rivals in its recovery from the downturn of 2008 and 2009 that plunged most of the industry into the red and two U.S. automakers into bankruptcy.
Toyoda, 54, said he aimed to restore the company's profitability as well as its focus on satisfying customers.
Assuming an exchange rate of 85 yen to the dollar and annual sales of 7.5 million vehicles, the automaker should generate 1 trillion yen, or $12 billion, in operating earnings as soon as possible, he said.
That's still shy of Toyota's record earnings levels but would represent a big improvement over the 550 billion yen, or $6.4 billion, in operating earnings forecast for the fiscal year ending on March 31.
The company said it would seek to build up its Lexus marque into a global premium brand.
Toyota also underscored its commitment to environmentally friendly technology, with plans to launch 10 new hybrids by 2015.
Without dwelling on the recalls, Toyoda said the company aimed to provide "the safest and most responsible" ways of moving people.
Many of the changes announced today reflected lessons learned by the company over the past year and a half — the most challenging period in its history since a near-bankruptcy in 1950.
Among the executive moves, Toyoda's predecessor Katsuaki Watanabe resigned his remaining posts as vice chairman and representative director.
Toyoda said the company should be able to achieve his operating profit goal of a 5 percent return on sales even if another downturn slashes demand 20 percent.
But the shift in global trends, with demand rising faster in emerging markets, poses challenges for all automakers. The most expensive vehicles with the highest profit margins are typically sold in the wealthier but slow-growing regions.
Toyota relies on North America for about 60 percent of its operating profit, according to the company.
Toyota now aims to generate 15 percent of its global sales in China, which has become the world's largest auto market.
"We will focus on emerging markets and environmental vehicles," Toyoda said.
Analysts were mixed in their initial response to the plan, which was announced after the close of stock trading in Tokyo.
"I thought Toyota would come out with a vision that leads its competitors, but I didn't see anything like that," Tatsuya Mizuno, a director at Mizuno Credit Advisory in Tokyo, told Bloomberg News.
"Toyota is definitely behind rivals in emerging markets and in China we are now entering a period where we need to be cautious."
But some analysts were encouraged by the organizational changes. A slimmer board may help Toyota adapt faster to challenges and changes in the industry, said Takeshi Miyao, an analyst at consulting company Carnorama in Tokyo.
In addition to Watanabe, Vice Chairman Kazuo Okamoto, Executive Vice President Yoichi Ichimaru and Director Yoshimi Inaba will leave the board.
Inaba — who was recruited back into Toyota in 2009 to assist the new president — will continue to head its U.S. operations.
Real Tanguay, the head of Toyota's Canadian manufacturing operations, has been appointed senior managing officer, becoming the company's highest ranking non-Japanese executive.
The changes will be put to shareholders for approval in June, Toyota said.
From The Detroit News: Toyota president streamlines ranks, outlines revival plans | detnews.com | The Detroit News
Toyota Motor Corp. President Akio Toyoda outlined his goals today to restore the Japanese automaker's core values and increase its sales and profits after two very difficult years.
Toyoda, putting his stamp on the company founded by his grandfather, also streamlined the executive ranks and cut the board to 11 members from 27.
He said the world's largest automaker would focus more on emerging markets, which are expected to account for half of its sales by 2015, up from 40 percent currently.
The company will shift more decision-making to executives in its regional operations to allow them to react faster to developments.
"We will equip them to make decisions in their marketplace, near their customers," Toyoda said.
The Toyota Global Vision outlined at a news conference in Tokyo is Toyoda's first comprehensive plan for the company since he became president in June 2009, a few months before the company spiraled into a crisis with massive safety recalls.
In addition to the recall mess that tarnished Toyota's reputation for top quality, especially in the United States, the automaker has been grappling with a shrinking home market, unfavorable currency trends, and weaker pricing in the U.S. market after the recalls and negative publicity.
Toyota has trailed its leading Japanese rivals in its recovery from the downturn of 2008 and 2009 that plunged most of the industry into the red and two U.S. automakers into bankruptcy.
Toyoda, 54, said he aimed to restore the company's profitability as well as its focus on satisfying customers.
Assuming an exchange rate of 85 yen to the dollar and annual sales of 7.5 million vehicles, the automaker should generate 1 trillion yen, or $12 billion, in operating earnings as soon as possible, he said.
That's still shy of Toyota's record earnings levels but would represent a big improvement over the 550 billion yen, or $6.4 billion, in operating earnings forecast for the fiscal year ending on March 31.
The company said it would seek to build up its Lexus marque into a global premium brand.
Toyota also underscored its commitment to environmentally friendly technology, with plans to launch 10 new hybrids by 2015.
Without dwelling on the recalls, Toyoda said the company aimed to provide "the safest and most responsible" ways of moving people.
Many of the changes announced today reflected lessons learned by the company over the past year and a half — the most challenging period in its history since a near-bankruptcy in 1950.
Among the executive moves, Toyoda's predecessor Katsuaki Watanabe resigned his remaining posts as vice chairman and representative director.
Toyoda said the company should be able to achieve his operating profit goal of a 5 percent return on sales even if another downturn slashes demand 20 percent.
But the shift in global trends, with demand rising faster in emerging markets, poses challenges for all automakers. The most expensive vehicles with the highest profit margins are typically sold in the wealthier but slow-growing regions.
Toyota relies on North America for about 60 percent of its operating profit, according to the company.
Toyota now aims to generate 15 percent of its global sales in China, which has become the world's largest auto market.
"We will focus on emerging markets and environmental vehicles," Toyoda said.
Analysts were mixed in their initial response to the plan, which was announced after the close of stock trading in Tokyo.
"I thought Toyota would come out with a vision that leads its competitors, but I didn't see anything like that," Tatsuya Mizuno, a director at Mizuno Credit Advisory in Tokyo, told Bloomberg News.
"Toyota is definitely behind rivals in emerging markets and in China we are now entering a period where we need to be cautious."
But some analysts were encouraged by the organizational changes. A slimmer board may help Toyota adapt faster to challenges and changes in the industry, said Takeshi Miyao, an analyst at consulting company Carnorama in Tokyo.
In addition to Watanabe, Vice Chairman Kazuo Okamoto, Executive Vice President Yoichi Ichimaru and Director Yoshimi Inaba will leave the board.
Inaba — who was recruited back into Toyota in 2009 to assist the new president — will continue to head its U.S. operations.
Real Tanguay, the head of Toyota's Canadian manufacturing operations, has been appointed senior managing officer, becoming the company's highest ranking non-Japanese executive.
The changes will be put to shareholders for approval in June, Toyota said.
From The Detroit News: Toyota president streamlines ranks, outlines revival plans | detnews.com | The Detroit News
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