REPORT: Toyota chief admits company is in rough shape, "grasping for salvation"
Akio Toyoda appears to have brought with him the art of plain speaking to the office of company president, a position he's occupied at Toyota since June. Like most every other automaker these days, Toyota has been struggling, having seen its sales targets slip from 10 million units to a 2009 estimate of 7.3 million. But to listen to Toyoda is to understand that the company's mounting troubles can't be blamed solely on the state of the global economy, as he is using the stark language of How the Mighty Fall, a business book by author Jim Collins, to describe the company's state.According to Automotive News, Toyoda says his company is "grasping for salvation," which is stage four of five outlined in Collins' book, with Toyota having already experienced Stage One, "Hubris Born of Success;" Stage Two, "Undisciplined Pursuit of More;" and Stage Three, "Denial of risk and peril." What's Stage Five? "Capitulation to Irrelevance or Death." Yikers.
We think Toyota is a long way from Stage Five, but with everything from a recent massive recall to currency fluctuations and eroding quality perceptions among the masses – to say nothing of mounting competition from Korean, American and European automakers – Toyoda appears to understand that his company has a lot to address in both the near- and long-term, and he's using unsubtle language in his early days in office to make sure the rest of the company knows it, too.
[Source: Automotive News - sub. req.]
Reader Comments (Page 1 of 4)
mk15 4:40PM (10/02/2009)
Good luck to him. He took the helm of Toyota at a bad time.
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the4thheat 5:21PM (10/02/2009)
I'm pretty sure Toyota just has a perception of slipping quality mostly amongst car blog readers and not so much the masses. Amongst the masses even if they don't think Toyota quality is as super fantastic as it used to be they think even worse things about other automakers.
They're in rough shape though but it's mostly for overreaching and building up too many costs to maintain in a rough economy. They should definitely make the interiors nice as they used to be though-this race to the bottom in interior quality has to stop.
Paul 5:26PM (10/02/2009)
Indeed he did. But I think this means a couple things to us car fans:
1. They'll either focus on the profitable boring cars or start to serve the niches of fun they'd abandoned. Either way, it'll be fewer platforms made in fewer factories.
2. There goes F1. Seems Honda really was right.
BoxerFanatic 5:47PM (10/02/2009)
Agreed with most here.
But Paul's point number 1...
They already focus on the appliances, and nothing BUT the appliances.
What will save Toyota is the same thing that would save any other car company willing to listen.
Acheiving the balance in product diversity... not too few cars so that they leave options off the table and send people to other brands...
But not so many options that they are redundant, and over-lap without differences in their target markets.
BIG KEY. LISTEN TO YOUR ENTHUSIAST CUSTOMERS, and your customers in general.
Building BETTER cars with high value at appropriate price points is good. Building cheap crap that looks like a good deal, but then falls apart or lets the owner down... NOT good.
That includes the APPEARANCE. boring as hell is still boring as hell.
That includes the PERFORMANCE. again, boring as hell is still bad.
Your mainstream cars should be reliable, high value, and good looking.
Your enthusiast cars should be those, PLUS FUN. Don't expect everything to cater to everyone, and don't leave niche buyers out in the cold.
Not everyone wants a hybrid... or to look like they are driving one. Don't put all your eggs in one basket.
Sporty is more than LED lights around the speakers in a Scion box-car. Build something for people who KNOW about cars. They'll help you sell more cars, and that also means you might have to build something with Rear wheel drive. FWD is barely adequate for people who don't care. It doesn't cut it for people who DO care about driving.
There are two nearly sure-fire ways to do good business by making things for people to buy...
1: Give people who know what they want, what they want. And to a closer margin than anyone else is offering them... (and by that I mean more than the mindless drones who will buy whatever is put in front of them with a 1500 rebate on it.)
2: Give people something new that is so good that they didn't realize that they want it, but now actually REALLY DO want it. Pull an Apple iPod/iPhone scenario. People didn't even know that they were missing something, but then when they saw it and what it meant for their music, or for their cell phone useage, they WANTED ONE. and everyone else plays catch-up to emulate it.
If all else fails, find someone else who is pioneering the next great idea, and emulate them quickly, to ride the coat tails a bit. It is still marketshare, after all.
Depart from your ways of "our way or the highway. you'll buy what we sell you, and you'll like it." That only works for idiots, and only for so long... and chasing those thin profits will eventually cut down on quality... gee, does that sound familiar to you, Toyota?
You had good ideas before. MR2, some of the Celica iterations. Supra. You could build sport sedan pairings with some of those. The next great alternative to the CUV/Minivan... a sleeker, sportier people mover. Toyota badly lacks appreciable style or performance right now.
ebleyes 5:52PM (10/02/2009)
I hope Toyota go back to its roots and breath some life to their lineup, Hyundai and Ford will eat their lunch if they don't act soon. I think GM was a wake up call to many car makers and it seems that this guy understands that.
zamafir 6:10PM (10/02/2009)
@BoxerFanatic - spot on. basically, be passionate about your products and they'll reflect that, just like you (toyota) and honda used to be.
mk15 9:56AM (10/03/2009)
@BoxerFanatic
I hope Toyota reads this blog and read your post.
Here's a toast, to another Supra (please!).
daleam 12:10PM (10/03/2009)
Boxerfanatic - You are wrong. The rise to mediocrity is the rise to the most sales. Sure, you have to have some hot products for a halo, but most of what you sell needs to hit the middle. Why do you think that Corolla and Camry sell so well?
Polly Prissy Pants 6:36PM (10/03/2009)
Toyota's "problem" has nothing to do with making enthusiast cars or making the next automotive iPod, it has to do with the global pie getting smaller and quality approaching parity at the same time the Koreans, the Indians, the Chinese and even a new resurgent Detroit are demanding a bigger share. It's simply the new reality, although I do give them credit for trying to "fix" it.
Brandon 1:35PM (10/04/2009)
@daleam
I agree with you. Supra or MR2 won't save Toyota. What they need are better looking/more reliable Camry and Corolla. May be they should close Scion brand and bring tC to replace Corolla, name it Corolla (or Corolla Hybrid). Close all other Scion models. Remove Avalon, Tacoma (Just use Tundra design), and most of SUVs (keep one or two SUV design). Get rid of Camry Hybrid, Highlander hybrid. For Lexus side, keep IS, LS, GS, ES, and RX. Close everything else... After that, you can bring Supra back for enthusiasts.
Tom 11:51AM (10/05/2009)
@Brandon
I see what you mean, because at first glance the Scion brand seems unnecessary, right? If you want young people to buy your cars, make cars that young people want to buy, don't create a second brand that sells the same boring cars but are supposed o be 'cool.'
However, if you think about it, Scion serves a purpose that goes beyond the - admittedly small - sales numbers. Without jeopardizing the main brand, Toyota can try things like viral marketing, pure price sales and dealership accessorizing. Part of the problem with Scion is that it suffers from a "Not Invented Here" stigma with the Japanese headquarters. I think because it was something created by the American arm it doesn't get the support from ToMoCo to make it a truly cool/enthusiast brand. I think it still has a purpose, though. Maybe if Honda had an equivalent, it wouldn't have tarnished its reputation with the whole Facebook fiasco, no?
Tricky dicky 4:46PM (10/02/2009)
looks great on them.
Their BS image is rightly being called into question.
They don't have an artificially devalued yen to rely on for free money - which blows the lid off the fact that they rely heavily on Japanese parts, and cars aka they are as american as kiwifruit.
They are being exposed dragging their feet on recalls and suppressing safety data.
Their lineup is uninspiring and suited to baby boomers.
Congrats and welcome to the top, dirtlumps.
Reply
MoonRover 8:43AM (10/03/2009)
You have hit the nail on the head......
Mercennarius 4:51PM (10/02/2009)
How about building interesting cars? Toyotas become the Buick of Japan.
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Sea Urchin 5:02PM (10/02/2009)
I am sure under Toyoda they will make changes, Corolla is super reliable but compared to Civic is it nothing, same with Camry and Accord. Last generation Prius, Yaris, Corolla all have criminally bad interiors.
MPG on all SUVs needs to go up and they really need to stop increasing the size of the car from generation to generation.
Also Toyota needs to spice up their cars, Mazda 3 is not all that on the inside, doesn't get great fuel economy, but the look alone is a major reason people buy it. Toyota definitely needs to make their cars look cooler.
Temple 5:48PM (10/02/2009)
Interesting cars? By how's standard? Building cars for enthusiasts is probably the worst business decision they could do at the moment. Toyota has had hundred times more 'interest' in their Prius then they ever had in the Supra and MR2 combined.
Granted they are building an LF-A and affordable FR coupe with Subaru, but they have to up the ante on quality and reliability if they really want to compete. Most consumers look for reliability, resale value, safety and comfort when they look for a car. Its the second largest investment most people make aside from home-ownership, most people aren't looking for the same infantile criteria that automotive blog readership judge 'interesting' cars by, they are looking at it in a dollars and cents perspective. Toyota need to look out for the narrowing gap with brands like Hyundai, VW's increased presence in the US, and their performance in emerging markets like China.
Sea Urchin 6:03PM (10/02/2009)
Building cars for enthusiasts is probably the worst business decision they could do at the moment. ---------I did not mean Supra, they need to make Corolla more like Mazda3 or Civic, smooth, agile, great cornering, a car which is affordable, efficient, fun to drive and still looks great.
zamafir 6:13PM (10/02/2009)
@Mercennarius - dude, it's fine. this guy drove an LF-A around for a bit, everything's under control.
.>
bwaahahahahahahahahahaha,
seriously though, sea urchin has it, surprisingly, interesting cars... though I think the bigger issue isn't their cars but their business model. They became so refined, so minutely focused and micromanaged that their economies of scale simply couldn’t cope with reality.
John H. 6:38PM (10/02/2009)
Toyota make "interesting" cars? Since when have they been able to do that?
Toyota makes a reliable toaster that's bought by the 40+ crowd. And those Scions are "the bomb" among seniors on a fixed income.
Oh, what a feeling!
Mercennarius 8:16PM (10/02/2009)
Temple,
Toyota hasnt designed one interesting looking car in the last 5+ years, the most exciting car in their line up is the Tundra and its not even a car! If you walk on a Toyota lot and look at all the cars theres not one car that stands out compared to other cars on the road, they are all the vanilla boring bland Japanese Buicks inside and out. They drive boring, they look boring, they are boring. Hondas almost as bad now, but at least their cars drive better. Nissan and Mazda are the only Japanese manufacturers designing cars that actually look interesting....