Former Toyota CEO wants Japanese car brands to team up
With China’s car industry continuing to grow at a rapid pace, ex-Toyota CEO Koji Sato believes Japan’s carmakers should cooperate to stay afloat.
The past decade has seen China become a force in the automotive industry, having already taken the top spot as Australia’s leading source of vehicles this year, while making an impact on almost every market globally.
This has put the pressure on many ‘legacy’ brands, and despite remaining the global leader and the only company to sell more than 11 million vehicles in a year, Toyota is feeling it too.
Now its former CEO, Koji Sato, is calling for greater alliance between Japan’s car brands, even if the only result is cutting development times and production costs.
“Right now, the most important theme facing the Japanese auto industry is improving ‘international competitiveness,’” Sato, now the chairman of the Japan Automobile Manufacturers Association, and Toyota vice chairman, told Automotive News.
“We aim to strategically create ‘areas of cooperation’ to improve efficiency, thereby accelerating coexistence in the essential ‘areas of competition.’”
According to the report, parts standardisation is one of the seven aspects the JAMA wants to tackle to better spread the load across the industry.
Currently, Toyota has a stake in Mazda, Subaru and Suzuki, while Nissan and Mitsubishi are a part of a global alliance with Renault. Only Honda exists on its own, though it is eyeing up a partnership with Nissan.
“We have a strong sense of crisis that the Japanese auto industry is in a massive period of transition,” Sato added.
“Now is exactly the time to further develop and evolve with the challenges and reform initiatives that the auto industry as a whole must face.”
It’s not the first time that Sato has sounded the alarm bell, having said in March – while he was still Toyota CEO – that the carmaker and the wider industry would need to adapt or die.
“Unless things change, we will not survive. I want everyone to acknowledge this sense of crisis,” Sato said at Toyota’s Supply Partners Convention.
“We continue to keep many customers waiting. Many of these stoppages stemmed from equipment or quality issues at both Toyota and our suppliers.
Jordan Mulach
“To enable us to make more cars, we must step things up a gear in areas such as building quality into every process.”
At the time, Sato said suppliers needed to do more to elevate the brand’s overall output, as China’s rising car industry poses a looming threat to Toyota.
“Right now, we in the automotive industry are battling for our very survival,” Sato said.
“A difficult battle lies ahead. We must work together as one and strengthen our ability to prevail. To do that, we need to improve productivity across the board. Both as individual companies and as an industry, let’s transform how we fight to ensure our survival.”
Jordan Mulach
Even new Toyota CEO Kenta Con – who most recently served as chief financial officer – warned there are tough days ahead for the world’s biggest automotive company.
“Going by the figures released in our financial results, some may feel that Toyota is in a secure and comfortable position. But that is certainly not the case,” Kon said.
“Each side drives the other to grow stronger. The only way to achieve this, I believe, is to rebuild our weakened competitive foundations and restore Toyota’s strength.”
Last year, the Toyota Motor Corporation - which includes Toyota, Lexus, Daihatsu and Hino - delivered 11,322,575 automobiles globally, a new record which surpassed its own previous top figure.
