Highlights of Toyota's Global Vision 2015

In addition to the announcement that Toyota is looking to introduce 10 new hybrid models prior to 2015, here are the other highlights of TMC’s long-term plan:

• Introduce a structure that allows for profits of 1 trillion Yen even if sales fall to 7.5 million, the US Dollar is at 85 Yen and profit margins are 5%.
• Achieve annual sales of 10 million units globally by 2015.
• Achieve a 50/50 split between developing market sales and sales in the US, Japan and Europe by 2015.
• Increase market share in the Chinese new car market from the current 11.2% to 15 % by 2015.
• Roll out smart grid-related services worldwide in conjunction with global IT firms.
• Reduce the board of directors from its current head count of 27 down to 11 by 2015
• Allow local Toyota overseas headquarters to decide on products and services in line with their local markets.

These are the headlines, but what can we find if we delve a little deeper.

Well, first of all, we can see Toyota’s commitment to becoming a world player, rather than just a Japanese brand. You can see this both the in targeting of higher sales in the developing markets, as well as giving more  freedom to regional Toyota offices. This shift of focus away from the West in general and from Japan in particular is both crucial to Toyota’s long-term success and at the same time a real challenge to their culture, which is still very much based on the “Japan knows best” outlook.

The second point is the drive for increased efficiency. You can see this both in the focus on higher levels of profitability so that even with adverse sales and exchange rates 1 trillion yen profits can be achieved, and also in the reduction in the size of the board by more than half. In many ways, the latter is one of the most significant announcements as it also cuts to the heart of the Japanese culture of consultation and harmony and points the way to a more dynamic board where leadership is valued over discussion.

Finally, the aim of 1 trillion Yen in profits even with lower sales, an inclement exchange rate and profit margins held steady at 5% can only mean one thing: That Toyota intends to move upmarket with higher-priced models across the range.

So, the Toyota of 2015? Leaner, more upmarket, with more hybrid models and more focused on developing markets and local market preferences. The competition should be worried!