Newsmaker of 2020: Akio Toyoda

The President of Toyota Motor Corporation, a huge proponent of mobility solutions and new thinking, has redefined the new normal for his company and articulated lessons learnt from Covid in terms of lean management.

If change is the only constant that life brings forth, then the best course forward is embracing it. As Charles Darwin once said, “It is not the strongest or the most intelligent who will survive but those who can best manage change.” Perhaps Akio Toyoda, the president of Toyota Motor Corporation, is one of its leading ambassadors. As Toyota Europe’s Senior Vice- President, Miguel Fonseca recently said, “Toyota is adapting to and leading a changing world,” and Toyoda is leading this transformation from the front.

Grandson of Toyota founder Kiichiro Toyoda and heading the world’s largest automaker, Akio Toyoda believes in ‘putting people first’. In fact, his renewed commitment to society is what was instrumental in how he is bringing about a transformation in the Toyota business model from being just automobile manufacturers to one that delivers mobility solutions to produce ‘happiness for all’.

‘People-First’ Policy
Recipient of Japan’s Medal with Blue Ribbon and France’s highest civilian award, Légion d'honneur, Toyoda can almost be credited with crystal ball gazing abilities. Even before, technology became the bedrock of businesses of all types in a world almost under seize by Covid, Toyoda set off the transformation process last December reiterating the need to embrace fresh ideas and new ways of thinking, “As we enter this once-in-a-century period of profound transformation, I believe we should renew once again our focus on the effective development of our people.”

‘People’ in many ways remains cardinal to Toyoda and by its extension Toyota Motor’s way of working. Toyoda believes that ‘monozukuri’ (manufacturing) is about developing people and the “constant Kaizen (continuous improvement) mindset is the spirit of TPS itself, and represents the values that Toyota has long treasured. Regaining these values is what I see as corporate culture reform, reform that will obliterate the ‘concept of non-crisis’.”

But the ultimate test of all these lies in sheer numbers. The question is how has all of these initiatives translated in balance sheet terms. Well, Toyota exceeded its annual target for the financial year ending March 2021 and its September sales globally spiked to record levels. This prompted the company to raise its sales and profit targets for the full year.

Addressing earnings call for the first time during half-yearly results, Toyoda once again highlighted his ‘people-first’ policy, “I believe that the upward revision to our forecast this time are due not only to our initiatives of these six months, but also to our initiatives over the past 11 years, making Toyota stronger as a company step-by-step. The increased strength of our financials and profit structure has also contributed. But I think that the number one factor has been that the people working for Toyota have grown stronger.” 

Better-than-expected sales in North America and China made up for the contraction in Europe. In fact, Toyoda is quite mindful of the fact that scale is a crucial factor that sets Toyota apart from smaller peers. As the company vows to maintain its profitability, expansion in lesser optimised markets like India is also high on its agenda and if the response to the newly launched Glanza and Urban Cruiser is any indication, the strategy seems to be working. 

As Toyoda takes stock of Toyota’s global ride, he highlighted, “We thought that a (upward) forecast by Toyota would serve as a kind of signpost for those in the automotive industry.” Clearly, Akio Toyoda is the torchbearer holding that signpost firmly in place. 

This was first published in Autocar professional's 16th Anniversary issue on December 15, 2020.