Toyota pushes U.S. image boost, emerging-market gains
Toyota Motor Corp. president Akio Toyoda set the world’s largest carmaker on a course seeking sales growth in emerging markets and an improved image in the U.S., in a bid to rebound from record recalls and a recession.
Toyoda laid out a “Global Vision” focused as much on boosting emotional ties to customers as on financial targets. His plan also shrinks Toyota’s board to 11 members from 27, the automaker’s biggest management shakeup in eight years.
Toyoda, 54, aims to strengthen his grip on the carmaker almost two years after becoming chief executive amid a global economic crisis that was followed by recalls of more than 10 million autos worldwide, most for flaws tied to unintended acceleration. The Toyota City, Japan-based company is still rebuilding its reputation as an industry benchmark for quality.
“They want to re-establish a peace-of-mind thing,” said Jeremy Anwyl, chief executive officer of Edmunds.com, an industry data provider in Santa Monica, California. “Where Toyota might have let people down with its recalls was problems with some very basic things, like floor mats, that may have caused some to question assumptions about its basic quality.”
The U.S. government said last month it had concluded its review of unintended acceleration issues in Toyota vehicles. The company may still face more recalls, said Takeshi Miyao, an analyst at Carnorama in Tokyo.
“Recalls from shifting their production lines overseas will continue until at least 2013,” Miyao said.
“The word ‘vision’ conjures notions of quantitative targets for things like sales and operating income in some sort of time frame,” Toyoda said during a conference call. “What we have prepared is a vision of a different kind. We have sketched the outlines of the kind of company that we want to be. We have identified the values that we want to cherish.”
Among the quantitative targets that were announced, Toyota said it aims to earn an operating profit of at least 1 trillion yen ($12 billion) by 2015, regardless of global economic conditions. The target is based on an exchange rate of 85 yen to the dollar and annual sales volume of 7.5 million vehicles.
The carmaker expects to sell 7.53 million vehicles in the current fiscal year ending March 31. Sales of Toyota and Lexus models may reach 9 million by 2015, Toyoda said. Including affiliates Daihatsu Motor Co. and Hino Motor Co., annual deliveries may total 10 million by then.
The 1 trillion yen target could be met even if another economic downturn cut sales by 20 percent, Toyoda said at a press conference in Tokyo yesterday.
The company plans to get half its global auto sales from emerging markets, compared with 40 percent in 2010. Toyota is aiming to get 15 percent of its sales from China, the world’s largest car market, where it lags behind General Motors Co. and Volkswagen AG..
As part of its focus on emerging markets, Toyota added the Etios compact in India in December and is readying the small car for sale in China, Thailand and Brazil.
China’s passenger-car sales growth in February fell to the slowest in more than two years after the government ended vehicle-buying incentives and a week-long national holiday stymied demand.
In North America, Toyota’s biggest source of operating profit, the carmaker plans to maximize output at assembly plants as it continues to shift more production from Japan, the company said.
Changes in North America include the promotion of Ray Tanguay, currently a Canada-based managing officer. Tanguay, a 20-year Toyota veteran who has overseen construction of plants in Ontario and Mississippi, will become senior managing officer on April 1, making him the automaker’s highest-ranking non-Japanese executive.
North America will also take over development responsibility for the Camry, the company’s top-selling U.S. model, the automaker said.
Toyota, already the world’s biggest seller of gasoline- electric autos, plans at least 10 more hybrid models by 2015, Toyoda said.
“We will focus on emerging markets and environmental vehicles,” Toyoda said.