Toyota’s new president vows to start from bottom

Toyota’s new president vows to start from bottom
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First Published: Thu, Jun 25 2009. 04 11 PM IST
Updated: Thu, Jun 25 2009. 04 11 PM IST
Tokyo: Toyota Motor’s new president Akio Toyoda, the grandson of its founder, pledged on Thursday a fresh start for the troubled automaker by revamping its line-up to match demand in different regions.
The new management said it would drive deeper into emerging markets, a bright spot amid the current global economic gloom, and avoid shutting plants in the US, where it expects demand to recover in the next few years.
“We must start again from the very bottom,” Toyoda, 53, told a news conference after he took the helm of the world’s largest automaker earlier this week in the midst of its biggest ever crisis.
“The new management feels like we are setting sail during a storm. We want to return to profit as quickly as possible. I would like to avoid making a loss for three consecutive years and I will do my best to do so,” he said.
The founding family scion acknowledged that the company might have overstretched itself in recent years with its brisk global expansion.
“In some areas, we need to take a step backwards,” he said.
“In the past, we’ve been trying to offer a full line-up all over the world. But from now on, we will consider what kind of cars are necessary for each region.
“Just as roads and highways are different, customers around the world have different needs and tastes,” he said.
Toyoda is the first member of the founding family in 14 years to head the company, and he does so at a crucial time.
Toyota overtook US rival General Motors in 2008 as the world’s top selling automaker.
But it fell into the red for the first time in nearly 70 years in the year to March with a net loss of ¥436.9 billion ($4.6 billion) and expects the shortfall to balloon to ¥550 billion this year.
Toyoda said that he would cut his own pay by 30% for one year from July to aid the company’s recovery.
Toyota actively expanded its global production facilities in recent years to meet strong demand, particularly for its fuel-efficient cars, leaving it vulnerable to the current collapse in worldwide sales.
The Japanese company has made some plants idle and slashed thousands of temporary jobs in response to the slump in demand.
Toyota said on Thursday that its worldwide production was down 38.8% in May from a year earlier at 442,621 vehicles.
Some industry analysts think Toyota will need to take even more drastic ction to recover from its financial difficulties, possibly shedding regular workers.
Vice-president Atsushi Niimi, who is in charge of North American operations, said that the market there was expected to pick up in two or three years.
“We are not going to close down any plants as we aim to prepare for a recovery in demand,” Niimi said.
There are already some signs of improvement. In May Toyota launched its latest Prius hybrid, which was the best-selling car in Japan that month, knocking rival Honda’s Insight hybrid from first spot.
Toyota is striving to maintain its lead in fuel-efficient vehicles and recently announced it would roll out a fuel-cell car by 2015.
“We want to keep thinking where Toyota Motor stands in a post-crude oil society,” Toyoda said.
Analysts say that as a member of the founding family, Toyoda may find it easier to unite the company during its current crisis.
He is the grandson of Kiichiro Toyoda, who founded the automaker in 1937. The company later changed its name to Toyota because it was considered luckier.
But the new boss played down the importance of the family name, saying that whoever is in the driving seat, “the job is going to be extremely tough.”
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First Published: Thu, Jun 25 2009. 04 11 PM IST
More Topics: Japan | Auto | Toyota | Recession | Honda |