Then the unthinkable happened. After eight years of growth and record profits, Toyota went into loss: 437 billion yen (£2.9 billion) in the financial year to March.
It is now clear that the extent of the global downturn took Toyota by surprise. It was slow to cut production as demand slumped and reluctant to close factories and make any of the workforce redundant. The only casualty was Nummi (New United Motor Manufacturing), the joint venture in California with General Motors created in the 1980s.
The new boss has no instant remedy for Toyota’s financial distress. The company is not predicting a return to profit in this financial year. Indeed, in a plea designed to emphasise the seriousness of the situation, Toyoda described the company as “grasping for salvation”.
Toyota expects its global sales to fall 18% this year compared with 2008, to 7.3m vehicles. The strength of the yen against the dollar is “very challenging for a Japan-based company”, said Toyoda.
“We must understand how to overcome past difficulties. It is management’s job to prepare for the next growth strategy, and that I have to do. I won’t accept Toyota as a shrinking business.”
Toyoda has had a fast-track career development — including spells running Nummi, Toyota’s China operations and in IT, product management, purchasing and sales.
A different kind of fast track has seen him drive in the Nürburgring 24-hour race three years running. The company’s lawyers and insurers were not happy about the president-to-be indulging in a dangerous sport, but he fought to take part.
“We are passionate about leadership in automobile engineering and these races train people and they train machines. And they enable us to communicate the taste and flavours of the cars we create.”
Much of that communication comes through Gazoo, which is also the entrance to Toyota Metapolis, a virtual world where Toyoda’s avatar talks to the Japanese internet generation and gets reaction to Toyota’s products. This was a response to the criticism, which Toyoda accepted, that the company had become “too big, too distant”.
Last year at the Nürburgring, Toyota’s new boss drove a prototype of the 200mph Lexus LFA supercar. This exotic two-seater coupé will cost £325,000 when it goes on sale at the end of next year. It is the extreme example of Toyoda’s intention to focus on making Toyota — and Lexus, its premium brand — appeal to driving enthusiasts.
It is said that young people in Japan do not have the interest in cars of their parents’ generation, but Toyoda thinks the car companies bear some responsibility for that.
Toyota has dropped all its more affordable sports models in recent years. The FT-86 concept car unveiled at the Tokyo motor show last week showed the company’s intention to re-introduce performance cars such as the Celica and Supra.
The FT-86 will go on sale in 2011 and it will be made alongside a new Subaru, a marque in which Toyota has a 16.7% interest.
Toyoda may love fast cars but he thinks that the Prius, Toyota’s fast-selling, fuelefficient and fashionable saloon, is “very exciting”.
Hybrids such as the Prius, in which Toyota is the world leader, have more prospect of returning the company to profit — the new Prius has been the best-selling car in Japan for the past three months. Some in the company believe the next big success will be a plug-in version that can have its batteries charged at night and will run for 20km on electricity alone.
Toyoda wants to exploit further the clever little iQ, a city car that seats four. There is a new, dressed-up version and, thanks to talks with Ulrich Bez, head of Aston Martin, in the pits at the Nürburgring, Toyoda has agreed to supply iQs to be converted into a supermini, the Aston Martin Cygnet.
Of that deal, Toyoda said: “It is an honour for us. After all, Aston Martin created the first James Bond car.”
Green beats speed
Toyota may be planning a 200mph supercar, but mainstream car buyers in Japan seem to be more concerned with the environment than speed.
Manufacturers at the Toyko motor show, which opened last week, said environmental impact had become the No 1 concern for buyers. The vehicles on display reflected the change in priorities, with green models from standard hybrids, such as the Prius, to all-electric cars and a new type of vehicle, halfway between a car and a scooter.
Carlos Ghosn, chief executive of Nissan, said: “This is a new era for the automobile industry.” Takeshi Uchiyamada, a vice-president of Toyota, said his company expected petrol-electric hybrids to account for 30% of global sales by 2020. Uchiyamada said that pure electric cars would have only a limited market — though Nissan expects 20% of sales to be electric by 2020.
Honda has big hopes for the all-electric EV-N, pictured right. The tiny city car has a retro style remini — cent of the N360, made in the 1960s.
The Nissan Land Glider is a cross between a car and a scooter, with two seats arranged like a tandem and four wheels that lean as it goes through corners. Renault, Nissan’s partner on the technology, showed a similar vehicle, called the Twizy, at the Frankfurt motor show. A production model is expected in 2011.
Nissan electric cars sold in Europe will be powered by lithium-ion batteries to be made in Britain and in Portugal. The two countries have committed themselves to a subsidy for electric cars and plug-in hybrids — in Britain this will be between £2,000 and £5,000, available from 2011. Nissan is expected shortly to confirm production of the Leaf saloon and other electric vehicles in Sunderland.
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