Under Toyota Kirloskar MD & CEO Masakazu Yoshimura’s leadership, Toyota Kirloskar Motor’s sales have doubled over the last five years, while revenues have almost quadrupled. What’s more, India has become one of Toyota’s top 5 markets, and the volumes have grown without sacrificing profitability.
29 Dec 2024 | 13245 Views | By Ketan Thakkar & Hormazd Sorabjee
Toyota Motor Corporation’s Indian subsidiary, Toyota Kirloskar Motor (TKM), made headlines this July by signing a Memorandum of Understanding (MoU) with the Maharashtra state government. The agreement, that potentially might add up to a million units of production capacity over the next decade, surprised many. This move followed an earlier ...
This is an Autocar Pro Plus article. Subscribe to continue reading.
Toyota Motor Corporation’s Indian subsidiary, Toyota Kirloskar Motor (TKM), made headlines this July by signing a Memorandum of Understanding (MoU) with the Maharashtra state government. The agreement, that potentially might add up to a million units of production capacity over the next decade, surprised many. This move followed an earlier announcement regarding capacity expansion at TKM’s existing facility in Bidadi, Karnataka.
The strategic decision comes as Toyota Motor Corporation faces significant global challenges. The world’s largest carmaker has reported production declines in nine out of the last eleven months of this calendar year. Toyota has witnessed falling sales in its key markets—the United States, Japan and China—while the rapid rise of Chinese electric car manufacturers is testing its dominance in Southeast Asia.
Amid these global headwinds, India has emerged as a beacon of hope, driven by the strong leadership of Masakazu Yoshimura, managing director and chief executive officer of Toyota Kirloskar Motor. Yoshimura, the longest-serving head of TKM, has been instrumental in transforming Toyota’s fortunes in India. A Japanese veteran with over 25 years at Toyota Motor, Yoshimura has honed his expertise across China, Japan and South Africa, specialising in product planning, pricing, sales and marketing.
Under his leadership, TKM has witnessed unprecedented growth: Sales in India have doubled over the last five years, revenues have almost quadrupled, and the company swung from a loss of Rs 55 crore in FY21 to a profit of Rs 4,787 crore (approximately $500 million) in FY24.
When Yoshimura took charge, India did not feature among Toyota’s top 10 markets. This year, it claimed the 5th spot and could overtake Indonesia as the company’s fourth-largest market, with only a 5,000-unit gap separating the two as of November.
In a year when Toyota’s volumes are expected to decline in major markets like the US, Japan, China, Indonesia and Thailand, India stands out as the sole bright spot. TKM is on course to hit a new peak of 3 lakh units in annual domestic sales, marking a remarkable achievement in an otherwise challenging global environment. Toyota has also outpaced competitors like Mahindra & Mahindra in growth rates despite Mahindra’s stellar performance.
What’s particularly noteworthy is that this volume growth has not come at the expense of profitability. TKM has consistently delivered a 10% return on sales, a benchmark in the automotive industry.
Toyota’s confidence in India is evident in its $3 billion investment plan, which aims to leverage India as a key export hub for electric and hybrid vehicles. Yoshimura has also effectively utilised Toyota’s global alliance with Suzuki, allowing the brand to enter new segments such as compact SUVs, premium hatchbacks and compact MPVs. This strategy has delivered incremental sales and boosted market share.
Notably, Yoshimura has achieved what many considered improbable: making the rebadging concept work in India. He has also positioned hybrid technology as a viable, cleaner alternative to transitioning towards sustainable mobility. There was a strong focus on localising hybrid parts, which has supported the bottom line.
Thanks to his vision, the global office’s backing and the key strategic decisions he has made locally, Yoshimura has transformed Toyota’s position in India and established the country as a key pillar of the company’s global growth strategy.
Recognising his recent accomplishments, especially in 2024, Autocar Professional has named him the Automotive Man of the Year.
Breaking the Mould
Over the last two decades, several Toyota Kirloskar CEOs have attempted to position India as a strategic market for the future—to no avail. Yoshimura managed to achieve this feat in just five years. While the global alliance with Suzuki—a strategy with India at its core—provided significant momentum, execution was key. Yoshimura delivered on plans defined in Japan, making India impossible to ignore at Toyota’s headquarters.
Thanks to Yoshimura’s efforts, India has been designated as a strategic base for markets west of the country, including the Middle East, East Asia and Oceania. This realignment underscores the region’s growing significance for the company’s production and export strategy.
This month, Toyota Motor Corporation’s CEO and president, Koji Sato, visited India to evaluate its next growth phase—a testament to Yoshimura’s efforts to champion India’s role. Insiders reveal that Yoshimura’s ability to effectively communicate India’s strategic developments in Japan has elevated the country’s equity within the global group.
“India was outside the top 10 markets volume-wise. Yoshimura has pulled it into the global reckoning and turned it into a manufacturing powerhouse,” shared a senior industry observer.
Consider this: Toyota approved Plant 3 in Bidadi without defining its product line—an unprecedented move for a company known for meticulous planning. Similarly, the new Aurangabad facility is in motion with broad ideas but no finalised products yet. “To put the cart before the horse is Yoshimura’s genius. He secured resources for India before Toyota HQ could question its long-term roadmap,” said an insider.
Speed and Focus
Yoshimura described the past year as both “tremendous and exciting”, attributing Toyota’s success to its unwavering focus on quality, durability and reliability (QDR). “There’s no compromise. QDR is our backbone, and we aim to exceed customer expectations continually,” he affirmed.
While Toyota underestimated market demand for strong hybrids, Yoshimura’s team quickly pivoted to address production delays, announcing plans to increase capacity at Bidadi by over 1,00,000 units and setting sights on the new facility in Maharashtra. “We focus on customer smiles,” he said, crediting dealers, suppliers and the extended Toyota team for their collective success.
One of the key persons among them is Yoshimura’s trusted deputy, Tadashi Asazuma, TKM’s executive vice president, who heads its sales, service and used car function. Known as an “aggressive Ninja,” Asazuma has successfully executed Yoshimura’s ambitious plans.
Under Asazuma’s watch, Toyota expanded its dealership network aggressively, and it has now set a target of touching 1,000 outlets by next year. Asazuma has made some tough calls on the human resources front to prioritise performance and scale operations.
“The idea is simple: reach scale and release funds for Toyota’s future projects instead of relying solely on models from Suzuki alliance,” shared an observer. Yoshimura’s leadership style combines empowerment with accountability. Delegating decision-making and giving his team a “free hand” have allowed TKM to operate with speed and focus. “He has an obvious idea of what he wants to achieve, defines roles clearly and empowers people to deliver,” said an industry insider.
The Hybrid Push and Profit Dynamics
The profitability behind Toyota’s success has two key components:
1. The IMV series: Models like the Innova and Fortuner remain Toyota’s cash cows, consistently delivering high margins.
2. Localised Hybrids: The focus on backward integration of hybrid systems has improved profit margins in hybrid vehicles, though they are still slightly below those of the IMV series.
While Suzuki-badged models have driven volume growth and expanded the customer base, they have strained the bottom line due to thinner margins. Balancing these dynamics remains one of Yoshimura’s greatest challenges.
Challenges: Lexus and the Volume Push
Another area where the company is struggling is its premium brand, Lexus, which once showed promise but lost momentum. Industry experts believe the brand requires a bespoke strategy separate from Toyota’s mass-market approach.
Additionally, the influx of Suzuki-badged models has brought in many first-time buyers, requiring the dealer network to adapt to a culture shift.There’s yet another challenge, which stems from Toyota’s new aggressive stance on volumes.
The sales team has begun pushing entry-level hatchbacks and SUVs, mimicking Maruti Suzuki’s market tactics. While this has delivered impressive numbers, insiders caution that rising stock levels, dealer pressure and steep discounts could erode Toyota’s long-term reputation for conservative, quality-driven operations.
“The mandate is clear: manage high stock, push high volumes—this is the only way to secure future models,” said an industry executive. Dealer profitability remains under strain, especially for models like the Hilux pickup trucks, which are available at significant discounts.
The channel partners will have to manage product upgrades for the next 12 months before Toyota unleashes a wave of global models to whet the appetite of demanding Indian buyers.
The Endless Workday
Managing a vast territory—spanning the Middle East, India, East Asia and Oceania—requires Yoshimura to work tirelessly, sometimes starting his day at 2 am and ending close to midnight.
Overseeing operations that span multiple time zones worldwide, his days are a marathon of back-to-back meetings, strategy sessions and market oversights, leaving only a narrow window for rest and recovery.
His responsibilities stretch across a staggering 22-hour timeline, covering regions as distant as Japan and Europe, with Tahiti on the far edge of the international dateline.
“My territory spans yesterday, today and up to Jordan,” he explains with a mix of humour and reality. Markets are open 24 hours a day in his universe, and his meetings reflect that reality.
Take, for instance, Important Review Meetings every Thursday.
Yoshimura starts his first remote meeting at 3 am. Indian time—a session that aligns with Japan’s early morning schedules.
“Some executives are already there by 7:30,” he says, adding that the schedule is no less gruelling for his European and South American colleagues.
Despite the strain, Yoshimura meets these demands with resilience and a touch of wit. “I wake up at 2:00 am, and the adrenaline keeps me going,” he says. Yet, when the meetings end, sleep remains elusive. His hyperactive mind, charged with adrenaline, refuses to settle. “If you give me 10 seconds in a quiet, dark place, I can sleep,” he says jokingly.
Recharge Time
“Whenever I can, I try to calm down my adrenaline,” he says. His go-to activities include gym workouts, reading and quiet reflection. The gym has become a haven where he walks or jogs to clear his mind. “I spend one to two hours just walking and reading books on my iPad,” he adds.
Interestingly, his reading material of choice isn’t business literature but historical manga comics. “I like comics set before the Edo era—very ancient Japan, comical but rich in history,” he says. These immersive narratives allow him to escape into another world, offering entertainment and insight into the spirit of ancient Japan.
Music as Meditation
Yoshimura’s creative outlet is music—specifically, playing the drums. It has become a therapeutic pursuit. As for the genre, “Rock music is a bit quick for me now,” he admits, acknowledging the evolution of his tastes. Jazz, with its complexity and slower tempo, is more aligned with his current preferences. “Jazz is difficult,” he explains. “It requires a deep understanding of tempo and classical background. But it’s also very rewarding.”
Lessons from the Samurai Spirit
Yoshimura’s connection to history, particularly Japan’s samurai culture, adds a fascinating layer to his personality. He respects the discipline and loyalty of the samurai but admits he doesn’t fully identify with their unwavering spirit. “The samurai always stick to the boss,” he explains. “They can die for their boss. I can try, but only if I want to. That’s why I say I can’t be a samurai.”
For Yoshimura, it isn’t just about surviving the endless workday; it’s about thriving in the moments in between. When asked how he manages different time zones, he smiles and says, “I just need technology to rotate the Earth a little bit slower.”
The Samurai’s Philosophy: Perseverance and Precision
“Anything is possible,” Yoshimura often says, reflecting his unwavering optimism. His ability to balance perseverance with agility—akin to a master samurai—has taken Toyota to new heights in India. The next chapter will test his vision and ability to sustain this hard-won momentum.
As Toyota prepares for the next leg of its India journey, Yoshimura’s challenges will only grow. Sustaining profits while scaling up operations remains the acid test. With Plant 3 in Bidadi running late and Plant 4 in Aurangabad projected for 2028 onwards, success will depend on balancing volume growth, cost structures and innovation.
India’s role as a global hybrid and EV export hub will be pivotal. Models such as the e Vitara-based Toyota are slated to be shipped to Europe, while strong export demand in Africa and the Middle East presents immense potential.
Yet, Yoshimura’s success hinges on whether Toyota can maintain its profitability in an increasingly competitive landscape, and his leadership remains Toyota’s best bet for navigating the challenges ahead.