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Toyota chief makes extraordinary call for change

Fujio Cho, president of Toyota, has warned that the world's third largest carmaker will soon be in trouble unless it reinvents itself.

“Steady success is good, but it can foster serious weaknesses. Complacency sets in, customer focus declines, creative ideas dry up and before you know it, you are in trouble,” Cho told delegates at an automotive conference in the US on Wednesday.

Cho’s extraordinary call for change is a classic example of Toyota’s tradition of kaizen - the Japanese word for “continuous change“ - which forms the cornerstone of the company’s business philosophy.

“The sense of crisis we feel, despite increasing sales and profits, stems from out fear that we have not kept up,” he said.

Cho’s vision for future contains messages that could be disturbing to a company that prides itself on its Japanese roots. “Japanese? American? European? Does it really matter these days,” he said.

“There used to be a time when we could handle everything from Japan, but starting in the 1980s our business started to move at turbo speed and it has been accelerating ever since,” he said.

He argued Toyota should no longer rely on sending Japanese business managers to educate other managers around the world.

“Using only Japanese advisors cannot be done any more,” he said. “Until everyone - and I mean everyone - sheds their regional or national label we will not be able to reach out potential as individuals, or as a company.”

Cho also unveiled some ambitious business targets. He said Toyota would increase global sales of hybrid cars to 300,000 units a year by 2005, five times the 2003 level.

Toyota sold 53,000 hybrids worldwide in 2003 and 62,000 units in the first six months of this year. The company intends to raise output of the Prius, its main hybrid model, by 50 per cent per cent from the first half of next year, he said.


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