Akio Opens Up to Shareholders with In-Depth Introspection

Toyota Strengthens Corporate Composition Amidst Challenges

Toyota Motor Corporation, the world's largest automaker, has been navigating a period of profound transformation over the past decade. In a bid to overcome financial challenges, the company has made significant strides in cost reductions to absorb the increase in fixed costs from TNGA (Toyota New Global Architecture) and CASE (Connected, Autonomous, Shared, and Electric) investments.

This journey began in 2009, when Akio Toyoda took the helm as president. Since then, Toyota has faced numerous crises and gradually strengthened its corporate composition. The company increased its production capacity by more than 500,000 units per year before the global financial crisis, leading to a significant increase in fixed costs. However, Toyota's president keenly felt the difficulty of carrying out reforms in "normal times," as he referred to this period as an "intentional pause."

In the first three years of this period, Toyota aimed to strengthen its true competitiveness during this "intentional pause," but did not obtain sufficient results. Undeterred, Toyota has since implemented measures such as restructuring its business towards a mobile corporate structure, emphasizing innovation in mobility services, increasing investments in electrification and connected technologies, and improving operational efficiency.

Toyota has also made genuine efforts to achieve true mutual understanding with employees during labor consultations. The company revised its executive and organizational structure, including the introduction of an in-house company system, the establishment of a "Seven Samurai" structure, and the discontinuance of the post of executive vice president.

Recently, Toyota held its 116th Ordinary General Shareholder Meeting on June 11, 2020. The meeting consisted of a business report video, opening comments by President Akio Toyoda, a Q&A session, closing comments, and voting. During his opening comments, Toyoda focused on Toyota's efforts in strengthening its corporate composition. He also revealed his innermost thoughts during the meeting, things he dared not say to the media.

Toyota's financial results for March 2020 show that it managed to maintain operating income of over 2.4 trillion yen, limiting its drop in operating profits to just one percent year-on-year despite some impact from COVID-19 in the fourth quarter. The company has also been actively promoting an environment wherewith it can build partnerships for the future, with a basic stance that alliances are not for taking control of partners based on the logic of capital.

Measures to prevent COVID-19 spread were implemented at the shareholder meeting, such as placing transparent screens between shareholders and executives. Toyota has managed to lower its break-even point by more than two million units compared to the global financial crisis periods. Despite these achievements, Toyota is facing and continuing to face a once-in-a-century period of profound transformation.

Akio Toyoda views the shareholder meeting as an opportunity to communicate directly with shareholders. He revealed during the meeting that Toyota has been engaged in both "a fight to bring back what makes us Toyota" and "completely redesigning Toyota for the future." Toyota has strengthened its corporate composition over the past seven years, but the journey is far from over. The company continues to strive for excellence in the face of challenges, aiming to maintain its position as a global leader in the automotive industry.