Thomas White Global Investing
Global Players

Global Players

October 2009

Akio Toyoda, President, Toyota


Akio Toyoda

Image Credit: Moto@Club4AG on Flickr under a Creative Commons license

“I have assumed the huge responsibility of steering Toyota at a time when we’re facing a once-in-a-century crisis. Given the circumstances, I take my responsibility very seriously”

— Akio Toyoda, at a news conference in January 2009


The winds of change were blowing even as the smiling gentleman took over the reins of one of the biggest vehicle manufacturers in the world. When Akio Toyoda, the grandson of the Japanese auto titan Kiichiro Toyoda, became the President of Toyota Motor Corporation in June 2009, the global financial crisis had begun steam rolling the company’s profits. Now, Akio has set aside $1 billion to boost the company’s flagging American sales in its most important market.

Akio Toyoda shares his surname with ten former presidents of the company, but he is as different from his predecessors as chalk from cheese. Spending seven years in the U.S., he is an MBA holder, speaks flawless English and likes to race cars. Born in Nagoya, Akio earned his law degree from the prestigious Keio University in Japan, and secured an MBA from Babson College in Boston.

‘The prince,’ as Akio has been dubbed by the Japanese media, seemingly flew up the corporate ladder. He entered the workforce with an investment bank on Wall Street but soon thereafter in 1984, joined Toyota as a management trainee. Changing hats to assume roles from production to selling the finished product, he navigated the corporation from the Toyota assembly floor to the sales showroom. By 2002, Akio was running Toyota’s China unit, moving up to being executive vice president in 2005. Three years later, he reached one of the highest corporate rungs when he entered the sphere of global sales.

Toyoda was appointed president in June 2009; just two months after Toyota posted the biggest annual loss in its history amounting to $4.4 billion. But, at the traditionally conservative Toyota, Akio is considered a bit of a maverick. His often novel and offbeat thinking is perhaps best illustrated when he branched off with a partner in 1996 to form Gazoo.com. Aiming to revamp Toyota’s image, the website venture was focused on selling used Toyotas to young customers who could not afford new models. Today, the site has become a bustling marketplace that is helping dealers sell used cars at twice the speed from before.

At the same time, there is nobody more than Akio who enforces the hands-on principle of, ‘genchi genbutsu,’ a traditional and integral part of the Toyota production system meaning ‘go see for yourself’. Toyota’s chief engineers consider it their responsibility to go out and see for themselves what customers want in a car or a truck and how any current versions come up short. Few expect a senior executive to kick the tires themselves. Akio once shocked his American hosts in Michigan when he arrived at a dealership to satisfy his curiosity about a pickup truck recall. Still in a crisp and clean business suit, he got down on his hands and knees to examine the undercarriage of one of the trucks, leaving his hosts wide eyed with amazement.

But it is this dedication that Akio believes will reduce the number of cars piling up in American dealerships and other key markets. The company’s new advertising blitzkrieg is meant to do just that. Although Akio sports an exemplary track record, when he assumed the Toyota presidency in June, doubtful murmurs arose- Would it be wise to appoint a corporate head who has been so thoroughly steeped in Toyota culture at a time when industries all over were undergoing a radical restructuring?

Akio, however, remains undaunted by his critics. Known for his penchant for auto racing, which he says, “helps develop people as well as cars,” this new generation Toyoda is ready to claim the pole position.

 

 

 

 

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