Toyota Appoints Founder's Grandson As Next President
Akio Toyoda will take charge as company faces 'worst crisis in a century'
Faced with the biggest crisis in its history, Toyota returned to its origins for inspiration today with the appointment of Akio Toyoda, the grandson of the car maker's founder, as its next president.
Toyoda, 52, will replace the current president, Katsuaki Watanabe, in June as the company seeks new blood to lift it out of a sales slump that will see it register its first operating loss for more than 70 years.
He is the first member of the founding family to lead Japan's biggest car maker since his uncle, Tatsuro, stepped down in 1995; Akio's father, Shoichiro, ran Toyota throughout most of the 80s and into the early 90s.
Although Toyoda has long been talked about as a future leader, the speed of his ascent took some analysts by surprise given that his family now owns a mere 2% of the company.
"I am determined to do my utmost in being handed this big role of steering Toyota as it faces what is said to be its worst crisis in a century," he told reporters in a nationally televised news conference.
Toyoda, who was elevated to his current position of executive vice-president in 2005, faces a huge task.
His firm is expecting a ?150bn (?1.2bn) operating loss for the year to the end of March caused by a collapse in sales in the US and Europe and a plunge in demand at home.
The reshuffle at the helm of one of Japan's most conservative companies coincided with figures showing its global sales fell to 8.97m vehicles in 2008, down 4% from the previous year. Speculation is mounting, however, that Toyota will become the world's biggest car maker in terms of sales after the current leader, General Motors, announces its global sales figures for 2008 tomorrow. It would be a hollow victory, however ? achieved only because GM's performance was even worse than its own.
GM's sales in the US ? the biggest market for both firms ? fell by 23% last year, while Toyota's dropped by 16%. Toyota's total sales lagged behind those of GM by a mere 3,000 vehicles in 2007, and in the first nine months of last year it had sold 395,000 more vehicles than its US rival.
Toyoda, whose grandfather, Kiichiro, founded the company's motor division in 1933, earned the nickname "the prince" when he joined the board in 2000 after just 16 years with the company. The "d" in the family's name was changed to a "t" when referring to the company because the word Toyota contains an auspicious eight strokes when written in Japanese characters.
While Toyoda's meteoric rise will inevitably prompt charges of nepotism, industry observers believe his outspoken views and successful stints promoting domestic and overseas sales will stand him in good stead as he attempts to drag the firm out of its slump.
Analysts said his priority should be to slash investment. "Right now, the important thing is to stop the bleeding," said Koichi Ogawa at Daiwa SB Investments. "Management of the business has not gone well over the past three years. They expanded too much."
The prospect of becoming the global car industry's undisputed leader is unlikely to prompt celebrations at Toyota plants. The Yomiuri Shimbun newspaper today claimed the firm was preparing to lay off its entire temporary workforce in a desperate effort to cut costs.
Toyota, which employs about 70,000 full-time workers in Japan, recently said it would slash its 6,000-strong temporary workforce by half before the end of March.
Toyoda, 52, will replace the current president, Katsuaki Watanabe, in June as the company seeks new blood to lift it out of a sales slump that will see it register its first operating loss for more than 70 years.
He is the first member of the founding family to lead Japan's biggest car maker since his uncle, Tatsuro, stepped down in 1995; Akio's father, Shoichiro, ran Toyota throughout most of the 80s and into the early 90s.
Although Toyoda has long been talked about as a future leader, the speed of his ascent took some analysts by surprise given that his family now owns a mere 2% of the company.
"I am determined to do my utmost in being handed this big role of steering Toyota as it faces what is said to be its worst crisis in a century," he told reporters in a nationally televised news conference.
Toyoda, who was elevated to his current position of executive vice-president in 2005, faces a huge task.
His firm is expecting a ?150bn (?1.2bn) operating loss for the year to the end of March caused by a collapse in sales in the US and Europe and a plunge in demand at home.
The reshuffle at the helm of one of Japan's most conservative companies coincided with figures showing its global sales fell to 8.97m vehicles in 2008, down 4% from the previous year. Speculation is mounting, however, that Toyota will become the world's biggest car maker in terms of sales after the current leader, General Motors, announces its global sales figures for 2008 tomorrow. It would be a hollow victory, however ? achieved only because GM's performance was even worse than its own.
GM's sales in the US ? the biggest market for both firms ? fell by 23% last year, while Toyota's dropped by 16%. Toyota's total sales lagged behind those of GM by a mere 3,000 vehicles in 2007, and in the first nine months of last year it had sold 395,000 more vehicles than its US rival.
Toyoda, whose grandfather, Kiichiro, founded the company's motor division in 1933, earned the nickname "the prince" when he joined the board in 2000 after just 16 years with the company. The "d" in the family's name was changed to a "t" when referring to the company because the word Toyota contains an auspicious eight strokes when written in Japanese characters.
While Toyoda's meteoric rise will inevitably prompt charges of nepotism, industry observers believe his outspoken views and successful stints promoting domestic and overseas sales will stand him in good stead as he attempts to drag the firm out of its slump.
Analysts said his priority should be to slash investment. "Right now, the important thing is to stop the bleeding," said Koichi Ogawa at Daiwa SB Investments. "Management of the business has not gone well over the past three years. They expanded too much."
The prospect of becoming the global car industry's undisputed leader is unlikely to prompt celebrations at Toyota plants. The Yomiuri Shimbun newspaper today claimed the firm was preparing to lay off its entire temporary workforce in a desperate effort to cut costs.
Toyota, which employs about 70,000 full-time workers in Japan, recently said it would slash its 6,000-strong temporary workforce by half before the end of March.
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