Toyota CEO Fujio Cho is Named FORTUNE's Asia Businessman of the Year; Cho is Driving Toyota to New Heights--and Straight Past the Competition

NEW YORK--Jan. 2, 20054, 2005--FORTUNE announced today that Fujio Cho, CEO of Toyota, is the Asia Businessman of the Year. Cho leads a company whose model lineup features some of the U.S. market's most popular vehicles. Smart products and a sterling reputation for quality have lifted Toyota's share of the U.S. market to 12%, and many industry analysts predict it will soon pass DaimlerChrysler to join the ranks of the U.S. Big Three. Cho earns FORTUNE's nomination for his near flawless execution of Toyota's plan for global expansion. The story, "Full Speed Ahead," appears in the February 7 issue of FORTUNE, on newsstands January 24 and at www.fortune.com.

"By nearly every measure, Toyota is the world's best auto manufacturer," says FORTUNE writer Clay Chandler. "It may be the world's best manufacturer, period. Consider: Last year, Toyota's worldwide sales leapt 10%, to 7.5 million vehicles, posting strong growth in all regions. But Toyota has long since kicked the Japanese habit of chasing sales and market share at the expense of profit." Toyota's profits for fiscal year 2003 exceeded those of GM, Ford, DaimlerChrysler, and Volkswagen combined.

Toyota has embarked on an ambitious international expansion plan, though Cho is struggling with the complexities of transplanting Toyota's vaunted production methods to foreign soil. For Cho, running Toyota is like "trying to pull a handcart up a steep hill--there's always tremendous danger if we relax, even for a moment, we could loose momentum and be thrown to the bottom." Cho downplays--but does not disavow--the objective widely reported in the Japanese press of capturing a 15% share of global vehicle sales by the end of the decade. But the multi-front blitzkrieg launched to reach that target has put unprecedented strain on the production process once hailed as the "machine that changed the world."

The dilemma, says Chandler, is how to maintain the pace without diluting what Toyota executives call their corporate DNA--a principle called kaizen, the notion that engineers, managers, and line workers collaborate continually to systematize production tasks and identify incremental changes to make work go more smoothly. Cho not only has to make this approach work in Toyota's U.S. factories--where feedback from workers has made him change some of Toyota's long-held approaches--but also in China, the world's fastest- growing auto market, where Toyota has forged a partnership with First Autoworks in Changchun. One of Toyota's gambles has been the Prius, a hybrid car that critics claim has yet to be profitable. There is high demand in the U.S., and China is pressing for access to the technology. Getting an early grip on this market may turn out to have been a shrewd move on Cho's part, says Chandler.

Some expect Cho, who has been CEO since 1999, to step down in June and take the more ceremonial role of chairman. "Whether Cho stays on," concludes Chandler, "expect Toyota to keep pulling its handcart uphill--and to rush to the next mountain the moment it gains the summit."

ASIA'S BUSINESSMAN OF THE YEAR (first published 1998)
     1998 NOBUYUKI IDEI, CHAIRMAN, SONY
     1999 CHEONG CHOONG KONG, CEO, SINGAPORE AIRLINES
     2000 YUN JUNG YONG CEO, SAMSUNG ELECTRONICS
     2001 KEIJI TACHIKAWA CEO, NTT DOCOMO
     2002 CARLOS GHOSN CEO, Nissan
     2003 NARAYANA R. MURTHY, CHAIRMAN AND NANDAN
          NILEKANI, CEO, INFOSYS
     2004 LI DONGSHENG, CHAIRMAN, TCL