Not long after Honda's chief unveiled a new structure for the automaker, effective 1 April, dominant rival Toyota Motor Corporation (TMC) said it would make "substantial changes to its structure in order to streamline work processes on a company-wide basis", kicking in on 18 April.

TMC has already implemented major structural changes enhancing the strength and autonomy of regional operations, and emphasising the importance of genchi-genbutsu (on-site learning and problem-solving) in training personnel. In 2011 TMC reorganised its structure with the aim of promoting autonomous region-based management, and in 2013 the company split a significant portion of its automotive operations into four business units.

"Despite these structural changes, however, TMC still relies greatly on individual efforts made by its own team members and stakeholders due to its present structure and work processes, and in many cases, cross-functional coordination has been found to consume a disproportionate amount of time and effort," the automaker said in a statement.

It plans to create a company built around product-based rather than function-based organisations.

"Doing so will enable the dissolution of barriers within the company and eliminate unnecessary coordination work," TMC said.

Nine product- and region-based business units will "compete with and learn from one another", while operating alongside TMC's head office responsible for corporate functions.

"This structural change may not be the ultimate solution, but it is certainly an opportunity," said TMC president Akio Toyoda. "I would like to make this an opportunity to strengthen our workforce and further promote making ever-better cars. Whether or not this structural change turns out to be the right solution or not is in our hands," he added.

The key objectives are to link work processes ranging from R&D to manufacturing,  to enable individual business units to make decisions more quickly and independently, and to strengthen the functions responsible for formulating mid-to-long term objectives and corporate strategies.

Seven product-based in-house companies will be responsible for short- to mid-term product strategy and development:

  • Innovative R&D and Engineering Company
  • Toyota Compact Car Company
  • Mid-size Vehicle Company
  • CV Company
  • Lexus International Co.
  • Power Train Company
  • Connected Company

R&D, production engineering, and manufacturing operations, which are organised by function at present, will be divided into "advanced" and "mass production" categories, and then allocated to each company. Toyota Group affiliates responsible for vehicle development and production will also contribute to these in-house companies where necessary.

To help streamline operations from planning through to manufacturing, full responsibility and authority will be given to the president of each in-house company.

TMC's two region-based business units, Toyota No.1 and No2, will be maintained and strengthened, serving to check and balance the operations of the new product-based in-house companies.

To streamline the development of products that can quickly meet local needs, discretion over the use of a certain amount of R&D resources will be allocated on a region-specific basis.

A new Frontier Research Centre will develop new technologies and business models "from a long-term, society-based perspective", actively seeking input from external research organisations and Toyota Group members.

Mid- to long-term strategic planning functions will be grouped under the Corporate Strategy Division, with the aim of determining future strategic directions and optimising operational resources.

Changes will be made to support the operations of each business unit in such areas as profit and cost management capabilities and administrative systems. Additionally, certain functions will partly be transferred to in-house companies.

The usual managing officer shake-up sees Toyota Motor Europe chief Johan van Zyl cease to be CEO of the Africa region while former Europe chief, Didier Leroy, an executive vice president, gains a new title also used by the Renault-Nissan alliance – chief competitive officer. He remains head of the No.1 business unit.