OK China You Win: Reactions To Akio Toyoda Removed As Top Dog At Sales Leader Toyota - Updated
Co-publishers Note: Ok China you Win. It looks like the Toyota Board drank the EV Kool-Aide and forced Mr. Akio Toyoda, who advocated for Toyota to offer future Toyota buyers a CHOICE of more than just China's favorite auto power source, made in China Batteries..forced him out of a job he loved and was great at.
We at The Auto Channel have alwways believed that that if our viewers wish to purchase an EV they should be able to, but don't mandate a one size fits all for everyone, it just wont work (as we will see). Mr. Toyoda understood this and took his CHOICE choice into the ring to duke it out with members of his Board who apparently were swayed by EV propagandists, and who will have Toyota join the other examples of the future failures of automobile companies.
The insidious power of the pro EV lobby is now so far reaching and God-Father like that it can dictate when the world's most successful auto exec of the world's most successful car maker must bow deeply deliver platitudes and step aside for an approved member of the EV Claque.
TOKYO, Jan 26, 2023; Reuters reported that Toyota's CEO Akio Toyoda will step down as president and chief executive to become chairman from April 1, and hand over the helm of Japan's biggest automaker to its top branding officer, Koji Sato.
Sato will become the new CEO while the current chairman, Takeshi Uchiyamada, will drop his chairman title but remain on the board, Toyota said.
The issue of who would take over from Toyoda, the 66-year-old grandson of the company's founder, had increasingly been a focus for investors.
Here are some reactions to the news:
KOJI ENDO, SENIOR ANALYST AT SBI SECURITIES
“I myself was surprised. Ten out of 10 analysts had probably been thinking that Toyoda would carry on (as CEO) for a while, so that came as a huge surprise. I don’t know if now was the best timing for the change.”
“Because Sato is 53 – very young compared to many of the fellow executives – he wouldn’t be able to make any major shifts. But the fact that he succeeded Toyoda at that age suggests Sato may continue leading the company for the next decade, so the next few years would be just a kind of apprenticeship period for Sato as the president.”
SEIJI SUGIURA, SENIOR ANALYST, TOKAI TOKYO RESEARCH INSTITUTE
"The timing of this was a surprise. Given that it happened after the share price broke below 2,000 yen, there may have been a sense of stagnation leading to speculation that the top management would be replaced. Koji Sato is a young person who likes cars, and there's the impression that he was chosen to give a certain impression outside the company.
"Probably the day-to-day management will not change. Having Akio Toyoda step away from being CEO may increase his symbolism within the company and it may be hard for the young, new president to really show his hand.
"Toyota has spent a decade raising its value as a company, and the share price also rose. Continuing with the 'Toyoda Route' will lead to stable management. It's a bit unknown if it can grow another level, this will have to be watched for the future.
HIROSHI NAMIOKA, CHIEF STRATEGIST AND FUND MANAGER AT T&D ASSET MANAGEMENT
"As seen in the case of Nidec, another Japanese manufacturer that has extensive supplier networks and is run by a charismatic founder-chairman ... The selection of the next leader is a crucial factor in these companies’ future course.
"Toyota’s Toyoda was from the founder’s family, so today’s transition was especially symbolic. We must closely watch how Sato will lead the company going forward.”
TSUTOMU YAMADA, MARKET ANALYST, AU KABUCOM SECURITIES
"This was a surprising appointment. He's so young ... my initial reaction was 'how many executives has he skipped?'. This is a big decision that nobody else but only Akio Toyoda could make.
"This appointment could accelerate Toyota's generation change, whether it will be good or bad.
"I don't think Toyota can completely shift its business strategy that soon even under Sato's management so we would need to see the progress for a while. But we might be going to see the company with a faster decision-making process, having suffered from a delayed decision-making such as a launch timing of EVs."
TOSHIHIRO SUZUKI, PRESIDENT OF SUZUKI MOTOR
"I was very surprised because President Toyoda has made various remarks from the standpoint of the auto industry, and also about Japanese industry. To have somebody who has such passionate thoughts and has made so many comments suddenly quit makes me wonder what will happen in the future. I'd like him to continue to give us guidance regardless of his position."
JULIE BOOT, ANALYST AT PELHAM SMITHERS ASSOCIATES, LONDON
"I'm afraid at this point we can only speculate. In my view, the new appointment is less about a change in direction and more about careful consideration of the best possible way to organise the handover, avoiding disruption and chaos. Unlike other head of companies who were founders or related to founders (for example Osamu Suzuki or Shigenobu Nagamori), Akio Toyoda has never put his own person first, but focused very much on what is best for the company. While Mr Toyoda is still young enough to lead a company, certainly by Japanese standards, he must have wanted to share responsibilities with another executive, looking ahead to the next five to 10 years. It's likely that he'll remain active as chairman for a long time and continue to put his mark on Toyota. Given the huge challenges that the industry is facing, the bottom line is probably that Akio Toyoda felt that after 13 long and difficult years, the time for change was right, and a new leader could bring new energy and ideas to Toyota."
DAIJU AOKI, CHIEF JAPAN ECONOMIST AT UBS SUMI TRUST WEALTH MANAGEMENT
“The personnel change underscores a transition to the next stage after a decade of recovery from the global financial crisis, led by the founding Toyoda family.
"Toyota, from the overseas investors’ perspective, has been seen as sluggish in the electrification race because the company has deployed a variety of options, not just electric vehicles but hydrogen and existing gasoline-powered cars. This personnel change can be an opportunity for Toyota to cast off its backward image if they can show a focus on businesses based on the next-generation energy, including electric vehicles."
YOSHIAKI KAWANO, ASSOCIATE DIRECTOR AT S&P GLOBAL MOBILITY
"The incoming president will face a challenge of maintaining a full lineup of vehicles. He is tasked to aggressively promote zero-emission battery electric vehicles while making sure existing (gasoline engine) models also sell well, which will take considerable human and financial resources and investment."
By River Davis
Jan. 29, 2023
Toyota's chief executive always said he wasn’t a skeptic about electric vehicles—he was a realist.Akio Toyoda called himself a spokesman for “a silent majority” of people in the auto industry who questioned a single-minded focus on EVs. He argued that hybrid gas-electric vehicles like Toyota’s Prius could be just as environmentally friendly, and said other companies were pushing consumers to make a leap into EVs that they might not be ready for, without a charging infrastructure fully in place.
Then, last week he handed the reins of Toyota to a successor.
“When it comes to digitalization, electrification and connectivity, I personally feel that I belong to the older generation,” said Mr. Toyoda, 66 years old, in announcing that 53-year-old engineer Koji Sato would take over as president and CEO in April, while Mr. Toyoda would become chairman. “For me to take a step back is important.”Catch up on the headlines, understand the news and make better decisions, free in your inbox every day.he transition is a landmark moment not only in the car industry but in the complicated shift to green energy throughout the business world. Some companies, investors and governments are pushing for big leaps into renewable energy and green technology, arguing that the consumer and the infrastructure will catch up to the changes. In the auto world, Mr. Toyoda is among those who have advocated for moving more slowly and deliberately.
Meanwhile, government agencies and investors are incentive's companies to move into EVs with subsidies and tax breaks. New EV tax credits in the U.S. law dubbed the Inflation Reduction Act don’t apply to hybrids that don’t plug in.The European Union has mandated zero-emission new car sales by 2035. The state of California will also only allow new sales of EVs, plug-in hybrids and hydrogen-cell vehicles beginning in 2035.
EVs are taking growing chunks of the European and U.S. markets, and one fifth of the world’s largest car market, China, already consists of EVs.
Even before Toyota’s first change at the top in 13 years, it was weighing some changes to its EV strategy behind the scenes. The company has been studying rivals including Tesla Inc., according to people at Toyota, and considering bigger upfront investment in its EV technology and manufacturing capabilities.
Toyota’s current EV platform—the underlying architecture on which various car models can be built—is partly repurposed from an existing platform for gasoline-powered vehicles. Earlier this month, Mr. Toyoda told The Wall Street Journal that the company was considering rolling out a new platform for its EVs, in what would be a shift in its longtime strategy of piggybacking on its existing technology. Last August, the company said it would spend up to $5.6 billion to expand its EV battery factories in the U.S. and Japan.
Last month, Mr. Toyoda wondered aloud how much longer he could keep up his arguments for a more incremental and multifaceted approach. Thanks to his efforts, “the silent majority has been put more at ease,” he said, speaking at a racetrack in a rural area of eastern Thailand as race cars whizzed by. “But who is going to continue to do this?” he asked. “Until more comrades emerge, am I going to do this until I collapse?”
At the racetrack, Mr. Toyoda pulled aside Mr. Sato with a request. “Can you do me a favor? Can you be the president?” he said. Mr. Sato said yes.
Two generations ago, Toyota was remaking the car industry with innovations like just-in-time manufacturing and an obsession with continuous improvement. Its rise in the 1960s through 1980s was all about trying to match and exceed Detroit’s Big Three with what ultimately became a global network of factories including more than a dozen manufacturing plants in North America.By the time Mr. Toyoda took the top job in 2009, there were signs that the company had been moving too fast. Its quest for global dominance was cutting into profit margins and causing some to question whether quality was being sacrificed. The grandson of Toyota Motor founder Kiichiro Toyoda, Akio Toyoda was 53 at the time—the same age Mr. Sato is today.
Mr. Toyoda was weeks into the job when a car driven by a California patrolman crashed over an embankment and burst into flames, killing the driver and his wife, daughter and brother-in-law. Reports blamed a floor mat that became lodged against the accelerator pedal.
In the months after the crash, Toyota recalled more than eight million vehicles for fixes. The company temporarily halted production and sale of several vehicles in the U.S., and Mr. Toyoda testified before Congress in 2010 to explain.
The day of his congressional testimony, Feb. 24, became an annual remembrance at Toyota dedicated to making sure such problems never happened again, complete with a commemorative tree near a Toyota museum.
In 2010, Mr. Toyoda, at left, with Toyota’s North America President Yoshimi Inaba beside him, testified before a committee of the U.S. House of Representatives.
Mr. Toyoda said he had to clean up problems caused by a rush to expand too quickly, exacerbated by a global financial crisis that pushed Toyota into the red. He has often spoken of his loneliness at the top during that period, saying he felt bullied by career executives who, in his telling, didn’t believe a family scion had the grit to lead a global auto maker. He was determined to prove them wrong.
After Japan’s recovery from a devastating earthquake in 2011, Toyota’s vehicle sales, revenue and profit marched steadily forward. Its lineup of hybrids, which began with the pioneering Prius in the late 1990s, grew into a full range of RAV4s, Corollas and other hybrid-equipped models selling more than two million units a year.
Mr. Toyoda cut costs and pared the executive ranks. By 2020, Toyota was the world’s largest auto maker by unit sales, surpassing Volkswagen AG.
One of his hires was an American chief scientist, Gill Pratt (Hydrogen Vs Lithium Batteries), whose previous jobs included teaching electrical engineering and computer science at the Massachusetts Institute of Technology. Mr. Pratt had researchers run the numbers. He said they showed that factoring in the emissions from manufacturing and generating electricity to charge cars, a diverse lineup of electric and hybrid vehicles has similar lifetime carbon emissions to an EV-only fleet. That was the case even on a power grid getting a significant chunk of its electricity from renewable sources, he said.
Another calculation hinged on the short supplies of lithium for batteries and the fact that hybrid cars, with their smaller batteries, need only a fraction of the lithium used in full EVs. “Let’s not let perfect be the enemy of good,” Mr. Pratt said at a roundtable in Tokyo on Friday.
Mr. Toyoda gave talks making the case for a diverse lineup of vehicles that would include EVs but not only them. He said that it was hardly environmentally friendly to have coal-fired electricity plants powering cars on the road, and in developing nations of Asia it was unlikely renewables could be built out quickly.
“Ford and GM did a great job convincing Washington that EVs were the only solution,” said Steve Gates, chairman of Toyota’s dealer council. “It’s not popular to talk about things that hybrids and plug-in hybrids have done for the environment.”
But as Tesla surpassed Toyota to become the world’s most valuable auto maker by market capitalization, competition grew. General Motors Co. in 2021 set a goal of phasing out gasoline- and diesel-powered vehicles by 2035. It has several EVs in showrooms now and more coming this year. The Detroit auto maker opened its first battery plant last year and has plans for more. Others including Volkswagen AG, Hyundai Motor Co. and Ford Motor Co. are making similar moves.
Toyota, meanwhile, has remained the leader in selling hybrids and plug-in hybrids, two model types that accounted for nearly 30% of its global shipments in 2022 through November. But sales of pure EVs—models that run on electricity only—are still tiny.
In the U.S., where Tesla dominates the EV market, Toyota didn’t rank in the top 10 of EV sellers last year, according to data-research firm Motor Intelligence, although it did introduce an all-electric sport-utility vehicle called the bZ4X.The study included a careful examination of the strategies of Tesla, which has been an all-EV company from the start, these people said. Tesla has shaken up industry practices with innovations such as direct-to-consumer sales methods and over-the-air software updates.
One lesson from Tesla is that big spending upfront on common parts and efficient manufacturing processes can pay dividends later when volumes get big and economies of scale kick in. That is the idea behind the EV-dedicated platform Mr. Toyoda said he was considering: It takes a lot of money to design this architecture, but once it’s ready, large volumes and multiple models can be built off similar blueprints, saving costs over the long term.
A competitive EV business remains, for Toyota, one part of a bigger strategy to promote and invest in a diverse lineup that also includes hybrids and hydrogen-powered cars. “We have to take a 360-degree approach,” said Mr. Sato, the next CEO.
Earlier this month, Mr. Toyoda said he was worried that government policies mandating EV sales had sparked a race between auto makers to put EVs on roads as soon as possible and kill off other promising technologies.
“That’s not Toyota’s approach,” he said. “Energy policies are unique in different countries and people have different uses for cars, so why make just one solution?”
That stance isn’t likely to change, but Toyota observers say Mr. Toyoda’s move to the chairman’s role makes it easier for a new CEO to steer in new directions on EVs. Mr. Toyoda said it was the job of younger people to “come up with the answer of what future mobility should be” and added, “We need to be attentive to not being late.”
Toyota keeps auto sales crown, but will it need a strategy shift?
Jan. 30, 2023 5:19 AM
By Yoel Minkoff
SA News Editor12 Comments
Toyota (NYSE:TM) is not only defending its title as the world's top-selling automaker for a third year in a row, but it is doing so by a wide margin. Including subsidiaries Hino Motors and Daihatsu, group sales reached 10.5M vehicles in 2022, compared to the 8.3M of its second-ranked rival Volkswagen (OTCPK:VWAGY). The news comes after Toyota (TM) shocked the industry with its first CEO transition in 14 years that could indicate a stronger focus on next-generation vehicles.
Bigger picture: Despite production constraints caused by COVID-19 and increased demand for semiconductors, Toyota's (TM) total sales were in line with its figure from 2021 versus a 7% annual drop seen at VW. Pressures from poorly stocked dealerships and dwindling savings have also been seen across the globe, as well as the U.S., which just marked its worst showing for car sales in over a decade. Financing new vehicles is also growing more expensive than ever, with 15.7% of American car buyers having a record high monthly payment of more than $1,000.
In 2021, Toyota even surpassed General Motors (NYSE:GM) as the best-selling automaker in the U.S. (see how here), though it doesn't remain its long-term goal as the company sets its sights on the transformation of the auto industry. Toyota has been diversifying its portfolio into a broad range of vehicle classes, including ICE, EV, hybrid and hydrogen fuel cells, a strategy that it has continued to pursue for decades (the first Prius was released in 1997). While Toyota has recently doubled down on its all battery-electric vehicles, SA author Doron Levin says it is not moving fast enough when factoring in its global footprint, though he does like the company's dividend, which is paying a yield of nearly 3%.
Fully electric or plug-in hybrid? As the BEV or PHEV debate rages on the world stage, many are sizing up how things will play out, especially given governmental intervention (see green energy subsidies and tax breaks) and the starting lines of various automakers. SA contributor Ramy Taraboulsi flags some interesting winners in the race, even if their strategies and business models are flawed. See how he stacks up the visions of Toyota versus Tesla, as well as their core competencies and financial projections.