Business / Corporate | FOCUS

Going on 80, Toyota navigates 'uncharted territory' beset by fierce competition, disruptive technology

JIJI

Toyota Motor Corp. is looking to revive its founding spirit amid an era of intense competition and drastic changes in the auto industry.

Leaving its origins in the postwar era far behind, Toyota recently marked its 80th anniversary and has grown into one of the world’s leading automakers, with annual new vehicle sales of over 10 million units.

But, as the industry faces a shift away from gasoline to electric vehicles as well as disruption from ride-sharing services, the company is now navigating what President Akio Toyoda has described as “uncharted territory.”

It is important to have a “resolve to open up the future,” Toyota Honorary Chairman Shoichiro Toyoda said, stressing the need to go back to the founding spirit.

Recalling the early years of the automaker, Shoichiro, the 92-year-old father of Akio, said, “Japanese industrial products and scientific technologies at that time were poor compared with their European and U.S. counterparts.”

“There were many high walls” to overcome before Toyota started auto production, Shoichiro said in a speech late July.

Toyota Motor Co., the predecessor of Toyota Motor Corp., was established on Aug. 28, 1937, by Shoichiro’s father, Kiichiro. It was a start-up created from the automobile division of Toyoda Automatic Loom Works Ltd., now called Toyota Industries Corp.

In the preceding year, the group released the Toyoda Model AA, the first mass-produced Japanese car.

Financial troubles in the postwar recession brought Toyota close to bankruptcy.

Toyota began to make big strides after launching the Crown, the first car fully made in Japan, in 1955. That was followed by the debut of the iconic Corolla in 1966, and Toyota took the lead in Japan’s motorization.

Toyota has increased its international presence since starting production in the U.S.

In 2008, Toyota became the world’s largest auto seller, ending U.S. giant General Motors’ global dominance that had lasted nearly eight decades.

Toyota in 1997 released the Prius gasoline-electric vehicle, the world’s first mass-produced hybrid model. It has become a global leader in developing eco-friendly vehicles.

Now the industry is at a crossroads following the arrival of electric vehicles. As the new technology does not use engines, a drastic change is sweeping the industry, which has been based on gasoline vehicles for the last century.

The sophistication of technologies used in electric vehicles has also given rise to competition from outside the industry. U.S. technology giants Apple Inc. and Google Inc. are leading the race to develop automated driving technologies.

Outside Japan, ride-sharing services are spreading rapidly. The sector is even beginning to shake the fundamental assumption that users own their vehicles.

“Even though Toyota has managed to stay in business for 80 years, no one knows what it will look like 20 years from now,” a Toyota top executive says in the face of the “once-in-a-century revolutionary change.”

“Bound by our successful experiences, we have failed to see problems with our way,” another Toyota executive says, showing a sense of crisis over Toyota’s lag in the race to develop electric vehicles.

Toyota has already begun to move forward. It has formed alliances, including a capital and business tie-up with Mazda Motor Corp. announced in early August.

Toyota is changing its closed approach to product development and learn from Mazda, which develops models at low cost and produces them in small volumes with its unique technologies, industry sources said.

“It’s important to set high goals like Kiichiro’s dream of making cars and have a firm resolve to open up the future,” said Shoichiro, who has first-hand knowledge of the company from its early years.

Coronavirus banner