Akio Toyoda Feature in Automotive News

krew

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Hans Greimel of Automotive News has a new feature on Akio Toyoda, always good to get a perspective into what Toyota has planned.

Akio Toyoda has both feet in the future
Crusading against corporate Empire in brave new world
Hans Greimel

Toyoda: Seeks leaders with 'passion'

TOKYO — Akio Toyoda's penchant for stirring things up dates to his days as a lowly section chief in the 1990s, when he tried to get Toyota to sell used cars online.

Fixated on the future, the young Toyoda — grandson of Toyota's founder — says he felt like a Jedi going up against an Empire ruled by the traditionalists at his family's namesake company.

Today, at 61, Toyoda is still preoccupied with the shapes of things to come as he leads Toyota into an era when old-guard metal benders face a cataclysm of change, from autonomous driving and electrification to the new competition from Silicon Valley.

"The automobile industry is changing at a speed far greater than anyone anticipated," Toyoda said in an Oct. 29 interview. "If we are satisfied with the way it is now, I think Toyota's growth is going to stop. ... Now I'm the president, but I feel like a Jedi."

Toyoda is hardly alone in confronting a rapidly changing landscape. Strategies are as myriad as the companies making the cars, and the view from Toyota is no less cloudy.

The worst peril, he insists, is standing still.

"Thinking that 2030 or 2050 is far in the future and doing nothing is the biggest risk," he said.

With all the uncertainty, a top Toyoda priority is cultivating a corporate culture that keeps things fresh and feisty.

He is trying to reinvent one of the world's most bureaucratic mega companies as one of its biggest little startups. He's investing aggressively in all arenas triggering today's angst and buzz: artificial intelligence, online services, big data analytics, electrified drivetrains and self-driving systems.

Last year, Toyoda began breaking the empire into subcompanies, each empowered to act as a self-contained unit. Small cars are handled by a Compact Car Company, commercial vehicles by the CV Company, connectivity by the Connected Company, and so on.

The goal: faster, nimbler decision-making for faster, more turbulent times.

Chilling wind

"I want those people with the greatest passion and knowledge for a particular field or region to make decisions for that area," Toyoda said. "I want to make that kind of atmosphere."

He recently told investors, "The automobile industry is changing at a speed far greater than anyone anticipated."

For car-crazy Toyoda, a test driver as much at home in his racing suit as his business suit, the future brings an especially chilling wind: the risk that cars become just A-to-B commodity runabouts.

If cars drive themselves and the electronics under the hood are indistinguishable, what will sustain the emotional connection that, to Toyoda, is that all-important love of cars?

"Even Dyson is saying it wants to produce an EV," Toyoda said, referring to the U.K.-based vacuum-maker's new plans. "Now is a major turning point."

Automakers such as Toyota, he says, have a special responsibility to keep cars fun for the next 100 years. That will help them stay one step ahead of interloping rivals from outside the industry.

"That's why we're fighting this fight now," he said.

But restructuring the organization flow chart won't be enough to ensure success.

And it is difficult for any chief executive, even the family scion, to reboot an entire corporate culture, especially at a behemoth such as Toyota.

A radical idea

Still, Toyoda has a history of subverting the system. And that's where the Jedi spirit comes in.

It started in the 1990s, when Toyoda was tasked with boosting domestic sales. Toyoda floated the then-radical idea of listing pictures of used cars on something called the Internet.

"People said you can't sell cars just with pictures. The kaizen system may work for manufacturing but not for dealerships," recounted Senior Managing Officer Shigeki Tomoyama, who worked with Toyoda closely in the early years and now heads a slew of divisions.

"Back then, it was incredibly difficult to bring about change in the face of strong opposition."

Corporate elders wouldn't let the upstart attach the Toyota name to his gambit. But Toyoda went ahead with his idea anyway. For his fledgling online selling platform, he adopted the name Gazoo, a play on the Japanese word for image, or gazou.

Today, Gazoo's website is one of Japan's biggest online automotive malls.

And Toyoda insists he is still taking risks as he focuses laserlike on the distant future.

"Although there may be no precedents," he said, "I believe there is always a better way.

"Several decades from now, how are future generations going to evaluate us? That will be determined by the challenges we take up now. Do I want them to say that those who were working at Toyota before them squandered all the resources?"
 

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ssun30

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It takes a lot of courage to say something like "crusade against a bureaucratic empire", especially in Japan. The determination this man has is incredible.
 

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That was actually just the first in a 5-week series of articles Automotive News is running on the future of the automobile. As they kick off Week 2, there's more from Akio Toyoda:

Toyota: A giant that wants to act small
Hans Greimel

In late August, Toyota Motor Corp. announced a blitz of curious investments.

It channeled millions of dollars into a clutch of obscure Japanese startups with names such as Giftee, Nightley and Ateam that work on everything from online marketing to cybersecurity.

Just what did the Japanese juggernaut see in these relatively unknown tech newcomers?

The answer lies in an internal conviction that Toyota has grown too big and ossified to react quickly to the new technologies buffeting the industry. Even Japan's biggest and richest carmaker, the thinking goes, needs smaller, nimbler partners with the expertise it lacks.

Convinced that his company's unbridled size is a liability, President Akio Toyoda is leading a change in corporate culture to create a new Toyota with the mindset of the world's biggest little startup.

The strategy calls for teaming with a wide array of outside partners, from small-time techy types to big rivals such as Mazda Motor Corp. and BMW.

And to speed decision-making and unleash creativity, Toyoda has broken the Japanese parent company into subcompanies empowered to act as self-contained units. The goal is to replicate the streamlined operations of the Silicon Valley startups triggering so much angst.

"Toyota has become too big to respond speedily to severe changes in the business environment. This prompted us to start finding ways to overhaul our working practices," Toyoda said while launching the strategy last year.

"Rather than being obsessed with doing everything ourselves, we are aiming to enhance competitiveness by reaching out to partners."

It represents a sea change for a company with a tradition of doing almost everything itself, thanks to tentaclelike reach into fields as diverse as carmaking, homebuilding and boats.

But Toyota's new frontier is artificial intelligence, online services, big data analytics, electrified drivetrains and self-driving systems. Changing times mean changing priorities.

"We are trying to use technologies that were not used in automobiles before," Chairman Takeshi Uchiyamada says.

"It is a race against time with today's innovation. So, in that sense, we will work with other companies that have their own strengths in certain fields."

Hence programs such as Toyota NEXT, which provided the seed money to those promising Japanese startups. That was just one of many high tech tie-ups Toyota brokered this year alone.

And the outreach extends to old-school competitors as well.

In such arenas as electric vehicles and sports cars, even giant Toyota sees value in partnering. In September, it formed a joint venture to develop an EV architecture with Mazda, and it is soon expected to introduce a new Supra sports car successor created with BMW.

Toyota is hardly giving up on its own research into tomorrow's cutting-edge technologies. And it remains to be seen whether juggling a growing network of partnerships is more efficient than centralizing r&d in-house. But Toyota is increasingly cognizant of its limits.

"There are a number of new players joining the race," Uchiyamada says. "We don't see them as the enemy. If they have better technology than us, we only need to work with them."
http://www.autonews.com/article/20171112/INDUSTRY_REDESIGNED/171119991/toyota-giant-that-wants-to-act-small?utm_source=dlvr.it&utm_medium=twitter
 

ssun30

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Usually in Japan, small businesses are heavily looked down upon. It has become a social convention that working for big, bulging megacorporations is the only path to career success. With a non-existent unemployment rate and job mobility, startups rarely achieve any success like they do in the rest of the world because the already scarce young talent get sucked away by megacorps. This is also why japanese companies almost always do things in house (or within the Keiretsu), because working with outsiders is dishonorable. Toyota might just have become the first japanese megacorp that let go of their pride and let the startups with more expertise do things for them, and I like to see that. Toyoda-san brought common sense to his company, which is something the japanese seem to miss in the past decade.
 
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CIF

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As a long-time fan of Toyota's culture of quality, reliability, and doing things in-house, I am really not liking this direction change (unless I am misinterpreting these stories). Toyota over the years gained huge respect from all over the world for doings things in-house. Why and how have products like the LS, Land Cruiser, LFA, among many others become legendary Toyota products? It's because Toyota prides itself on doing almost everything in-house. There's a time-tested reason Toyota traditionally did almost everything in-house; it gives Toyota ultimate control over quality, reliability, and even helps in-house suppliers maximize efficiencies and costs through Toyota's economies of scale. It also gives Toyota ultimate production consistency be having almost everything in-house.

Toyota has done partnerships and loose alliances before, and it has burned them in the past. If Toyota doesn't learn from past mistakes, it is doomed to repeat them.

Now yes, there are many changes happening in tech, and coming changes to the industry. How big and influential these changes will be remains to be seen. Likewise, if Toyota wants to stay on the cutting edge of these changes, it's really quite simple. Toyota can simply buy these companies, or bring them into the Toyota Group (keiretsu). That way they would still keep things in-house, while also adding brand new startup expertise previously not available within the Toyota Group. Having arms-length loose alliances in my opinion is a recipe for disaster. Would that make Toyota too big in Akio Toyoda's eyes? Perhaps, but what is Akio Toyoda's ultimate goal here is he feels Toyota has become too big? Will they be shutting down factories? Will they be laying off people? Does Akio Toyoda want to make Toyota a much smaller company? If not, then what is the worry here? Toyota is keeping their size relatively in check, and if worldwide demand is there for Toyota products, Toyota would be fools not to provide for the demand.

Also with these arms-length alliances, the problem becomes that even if a breakthrough or cutting edge product comes out, how can Toyota be proud of it? For example, the coming Supra that is said to be on a BMW chassis? How can you TRULY call that a Toyota? How can Toyota employees be proud of such a vehicle? I personally can't see it. If these loose alliances result in various 'Frankenstein' products, I don't see how that will be anything to be proud of, or a metric of success. Now partnering with some complementary competitors I don't have a big problem with, such as companies like Mazda. That follows in the long Toyota tradition of partnering with companies like Subaru Corporation, and Yamaha. However partnering with a direct competitor in BMW I just don't understand. If a quality problem arises from BMW's side, what happens then?

Now if the future becomes all autonomous, and consumers lose the desire to drive themselves, then in the worst case, automakers will still be suppliers to many of these autonomous companies. Now yes a company like Tesla is technically independent, but it is run by an extremely rare genius of a man, and massively, heavily subsidized and aided by the US government. Google has been working on autonomous vehicles for many years, and a while ago I read a story where Google mentioned they do not intend to ever build their own vehicles, as it would simply be too daunting for them. Some of their prototypes that they've built themselves are extremely rudimentary and do not even meet many current safety standards. Other prototypes they have use RX hybrids as platforms. Likewise, Uber's R&D into autonomous vehicles is using RX hybrids as platforms. Apple I heard was also using some RX hybrids for research. Speaking of Apple, there was a lot of talk in the last few years about Apple secretly trying to develop their own vehicle (semi-autonomous or fully autonomous). Recently though, I heard Apple has quietly shut down the project, because apparently it was simply too difficult for them to get involved in the automotive industry. So two of the biggest tech giants in the world, Google and Apple, and both essentially will not be building their own vehicles. So in the future, those tech companies that want to buy vehicles from automakers, what qualities do you think will matter? I'm pretty sure many of the same qualities that matter in taxis today. Why are Toyotas world-famous as taxis in so many countries around the world? It is because they are reliable, have a low cost of ownership, are comfortable in a wide variety of conditions, and are quite safe. So in the future for autonomous companies, I'm quite sure these same qualities will be important when they're looking at which automaker will supply them with vehicles.

Now I'm sure many automakers will try to directly launch their own autonomous vehicles. If that works for Toyota, great, if not they will still be able to function as a vehicle supplier essentially. Also if in the future consumers don't shun regular non-autonomous vehicles completely, well then there will still be a market for traditional Toyota vehicles.

Also another point about Silicon Valley; while there has largely been a culture of experimentation and nimbleness there, it has not really been that open between competitors. Most Silicon Valley companies are very insular, and do not like to partner with anyone else or form alliances. So ironically even though Toyota wants to be more like a Silicon Valley companies, Silicon Valley companies themselves don't really act in this fashion.

Now if Akio Toyoda wants to bring all these smaller companies into the Toyota Group, I'd be fine with that. However that still would not explain the strange partnerships with companies like BMW.
 

ssun30

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TL;DR: Big, bulging japanese companies fail. All Toyoda-san did is common sense.

Of course what they end up doing will be buying out the startups to incorporate them into the Keiretsu. What he effectively wants to do is letting small companies with more expertise do some side projects for him, instead of a separate internal project that is hard to manage. The core programs will still be done strictly in house. More projects=more trouble, only do things that are absolutely necessary in house, anyone who runs a business has that common sense.

The downsizing of the company does not refer to the actual size, Toyoda-san is not trying to shut down plants, curtail production, fire people or whatnot. It's simply a streamlining of structure, management, and change of corporate culture. TMC today is very streamlined for an international automobile manufacturer, and especially impressive for a japanese megacorp. Now Toyoda-san needs to solve the internal politics (basically to placate the old school execs) so the company doesn't crumble like Sony did under Stringer.

To me one of the things Toyota still needs to streamline is its domestic dealership network which led to too many separate models (and for JDM only) in one segment that reduces economy of scale.

The BMW alliance is simply a way of cost reduction and applies to a single niche model only. Actually, doing a sportscar program entirely in-house (while not being an established sports car brand) in an age of SUVs is the recipe for disaster, not the other way around. Yes I'm talking about the NSX.

I don't see anything that connects to the content in the article in your comment.
 
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CIF

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TL;DR: Big, bulging japanese companies fail. All Toyoda-san did is common sense.

Of course what they end up doing will be buying out the startups to incorporate them into the Keiretsu. What he effectively wants to do is letting small companies with more expertise do some side projects for him, instead of a separate internal project that is hard to manage. The core programs will still be done strictly in house. More projects=more trouble, only do things that are absolutely necessary in house, anyone who runs a business has that common sense.

The downsizing of the company does not refer to the actual size, Toyoda-san is not trying to shut down plants, curtail production, fire people or whatnot. It's simply a streamlining of structure, management, and change of corporate culture. TMC today is very streamlined for an international automobile manufacturer, and especially impressive for a japanese megacorp. Now Toyoda-san needs to solve the internal politics (basically to placate the old school execs) so the company doesn't crumble like Sony did under Stringer.

To me one of the things Toyota still needs to streamline is its domestic dealership network which led to too many separate models (and for JDM only) in one segment that reduces economy of scale.

The BMW alliance is simply a way of cost reduction and applies to a single niche model only. Actually, doing a sportscar program entirely in-house (while not being an established sports car brand) in an age of SUVs is the recipe for disaster, not the other way around. Yes I'm talking about the NSX.

I don't see anything that connects to the content in the article in your comment.
Contents of this article aside, Toyota for years has been streamlining and moving away from being a "bulging" company. They are a large company, but there is no way around that. Toyota is the crown jewel of Japanese corporations. Given how large they are, they are already very streamlined.

I'd be fine if most of what you say is true. The article simply isn't clear or explicit enough on these little details.

The current NSX though is in a different market segment than the coming Supra is going to be. Was TNGA-L (GA-L) too expensive to use for the Supra? I understand the economic aspect of partnering with BMW. Toyota must realize though the significant drawbacks in terms of image and reputation as well. Furthermore as I alluded to in my previous post, Toyota could have partnered with another Japanese company for the Supra. I would have been more fine with that.
 

Joaquin Ruhi

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To me one of the things Toyota still needs to streamline is its domestic dealership network which led to too many separate models (and for JDM only) in one segment that reduces economy of scale.
This is, indeed, a huge issue. There have been 2 or 3 excellent articles on this subject recently in outlets as diverse as Reuters and Jalopnik. When time allows, I might throw my hat into the ring and write something about this on Kaizen Factor.
 
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