Toyota will this week detail a strategy for growth in emerging markets in a 10-year plan, two people familiar with the plan have said.
Toyota also plans to cut two vice-chairman positions and shrink its board to 17 or fewer members as part of the biggest management shakeup in eight years, two people told Bloomberg News. Former president Katsuaki Watanabe will become an advisor without a board vote and former head of research and development Kazuo Okamoto will move to an affiliate, the sources said.
President Akio Toyoda will present a ‘Global Vision 2020’ plan on 9 March to help boost sales a year after the carmaker’s biggest recall crisis. Toyota has begun to focus on emerging markets with a specially developed car, the Etios compact launched in India in December, with variants planned for China, Thailand and Brazil.
Bloomberg noted that executive vice president Yukitoshi Funo has dubbed the Etios the ’21st century Corolla’, in a reference to its bestselling compact model. Investors and analysts have called on Toyota to reveal more about plans for next-generation models, shifting production away from Japan and boosting sales of luxury models. The automaker made about 60% of its operating profit from North America in the three fiscal quarters ended 31 December, according to its financial statement.
“As the recall problem has settled down, there’s hope that Toyota will turn around and get on the offensive, but I’m not optimistic,” Koji Endo, a Tokyo-based auto analyst at Advanced Research Japan, told Bloomberg. “Toyota has been trying to return to a less aggressive way of doing things after being so fixated on profit.”
Toyota’s slimmer board may help it adapt to challenges and changes in the global industry quickly, the sources said.
“Toyota has seemed cluttered with too many board members, and that has had consequences,” Tadashi Usui, an analyst at Moody’s KK in Tokyo, said.
Toyota is continuing a cautious approach even as analysts say the company lags behind rivals in emerging markets such as China and India, Karl Schlicht, head of the global product and marketing division at Lexus, told the news agency.
“We’re not going all out to go as fast as we can in China,” he said. “We’ve learned a big lesson. We want to be careful.”
Toyoda’s 2020 vision revises a plan outlined by Watanabe in November 2007, which included a goal of offering hybrid versions of all its models and commercialising next-generation battery technology and new modes of mobility.
Watanabe, 69, said in 2006 he expected the company’s operating margin to grow to 10% from 8.5% at the time. That compares with 2.9% for the nine-month period to the end of December.
The company expects to earn JPY490bn yen (US$5.95bn) in net income in the year ending 31 March, a figure that may almost double to JPY922bn yen in the year ending March 2013, according to the average of 14 analyst estimates compiled by Bloomberg. That’s still below the record JPY1.7 trillion it earned in fiscal 2007.