Toyota chief silences the doubters
Akio Toyoda overcomes shaky start in the job to revive carmaker's fortunes with a hands-on style
He'd heard it so often he began to believe it himself. Too young. Not up to the task. Didn't deserve it. Only there because of his name.
"I probably won't last a year as president, but at least I can finally do something for the company." Akio Toyoda says those doubts haunted him in early 2010, eight months into the top job at the carmaker his father once ran and his grandfather founded. Eight months in which he'd been all but invisible as defects in cars bearing the family name were tied to deadly crashes in the US. And now he was headed for Washington to apologise to Congress and the American people.
"All the vice-presidents were 10 years older than me," Toyota Motor's chief confided in an impromptu interview over tea at a hotel near Tokyo's Imperial Palace. "Compared to them, even though I was president. Well. You know."
Toyoda has since made a convincing case for himself as head of the world's biggest carmaker. As this year's Tokyo Motor Show gets under way, Toyota is on track for a record profit, its Lexus luxury unit predicts the best-ever year of sales, and industry surveys show public questions over quality are fading.
What you’re seeing today is Akio asserting himself. This is what we like
It's a remarkable turnaround for an executive who got off to a shaky start handling one of the worst crises in Toyota's 76-year history. Toyoda has remade his image as a hands-on guy who loves the smell of petrol and whose passion for racing is adding spice to a brand better known as bland and reliable. Far from getting kicked out, he's set the stage for a reign that may outdo even the 17 years his father spent in charge.
"What you're seeing today is Akio asserting himself," said David Herro, chief investment officer at Chicago-based Harris Associates, which holds more than US$280 million of the shares. "This is what we like: more action and results, more focus on protecting the brand. And the numbers speak for themselves."
Toyota earned US$4.4 billion last quarter, more than the combined profits of General Motors and Volkswagen, the second- and third-largest carmakers. Analysts estimate the company will rack up US$18.3 billion in profit in the 12 months to March, beating the previous record set in 2008 by more than US$1 billion.
To get there, Toyoda had to weather an extraordinary run of bad news: He took over at the height of the global financial crisis, after Toyota posted its first annual loss in 59 years. Then came the vehicle recalls, the 2011 earthquake and tsunami in Japan, and floods in Thailand that wiped out parts supplies. To top it off, the yen surged close to a post-second world war record, squeezing profits on every car sold abroad.
Toyoda's June 2009 anointment, at 53 Toyota's youngest president, restored family control of the company they've run for all but 10 years in the past five decades. His father, Shoichiro, was president from 1982 to 1992 and stayed on as chairman for seven more years. Grandfather Kiichiro modified the family name for his carmaker to make it simpler in Japanese.
Shoichiro made a show of saying his son would get "no special treatment," and Akio supposedly had to file a resume just like anyone else, according to a 2009 biography by Aiichiro Mizushima, .
Even so, there was little doubt he'd end up running the family firm, says Keisuke Shiraki, a schoolmate of Toyoda's in their hometown of Nagoya and later on a Babson College MBA programme in Massachusetts in the early 1980s.
"We didn't spend much time thinking about the fact he was different, but of course everybody knew one day he'd probably be head of Toyota," Shiraki said, adding that life on a US campus afforded Akio a rare opportunity to escape the pressure-cooker of expectations back home.
He took it, racing around in a pink Porsche. For once, he could get away with driving a car that wasn't a Toyota.
The grooming started early, says Masaaki Sato, who has reported on Japan's auto industry for four decades and authored , a 2002 family history. "Ever since he was a little boy, his mother always told him: 'one day you'll be president'."
Toyoda says he's still uneasy in the spotlight. In private, though, he's relaxed, says Mike Sullivan, a Santa Monica-based dealer who spent half a day with him this month test-driving new models at a New Orleans speedway. With "the accountants", as Sullivan dubbed past presidents, "the relationship was at arm's length". "Akio greets people with a hug, or sits and grabs a beer, or drives extra laps with them at the track."
Toyoda is more self-assured inside the company, too. He's brought in a new bench of executive vice-presidents, but he picked them all. He also made history this year by installing Toyota's first outside directors.
