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Akio's Plan Sounds Good, But Can Toyota Deliver?

There were two stories in Tokyo, Japan when Toyota CEO Akio Toyoda unveiled his Global Vision plan, investors focused on the nuts and bolts. And on paper they look great:

  • Double operating profit to at least $12b
  • Boost operating margin to at least 5% from 2.9%
  • Sell 10 million vehicles around the world annually

Wall Street will cheer Toyoda's plan and his move to cut the bureaucracy at the Japanese automaker by de-centralizing decisions to various regions around the world.

Toyota Dealership
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Toyota Dealership

It's a move that is long overdue.

As a friend of mine who worked with Toyota has told me repeatedly, "When you work for Toyota, you march to the vision of the guys in Japan."

The problem is that vision was blind to the sudden acceleration problems that bubbled up in 2009 and 2010.

We'll see if that changes with Mr. Toyoda's global vision plan.

As important as that story is, the more intriguing story is the message Akio Toyoda sent with the way he handled himself in Tokyo. He walked into the press conference without an entourage of executives from Toyota. That's a very "un-Japanese" thing to do. He also said that he prepared his comments in English, not Japanese. And following the press conference he did a "scrum" with reporters on the scene instead of leaving the podium without further comments. You get the idea, Akio Toyoda is sending a signal his company is not going to be perceived as an elitist Japanese automaker.

Toyota also unveiled a new Prius wagon that will go on sale this spring in Japan and then in the summer here in the U.S.

It's all part of expanding Toyota's hybrid line-up with 10 new models.

Smart move given Toyota's dominance in hybrids and with gas prices moving higher. But beyond that, Akio Toyoda wants Toyota to break with its reputation as making solid, but mundane cars, trucks and SUV's. In other words, Toyoda want Toyota to have style and passion. "We want to deliver cars that will be stimulating and even inspiring and that will thereby earn smiles from our customers," said Toyoda.

I'm encouraged by the message, but waiting to see if Akio Toyoda can execute his plan to make Toyota less bureaucratic. For 50 years Toyota grew quickly (sometimes too quickly) with a formula articulated and sent out from it's headquarters in Japan.

Stylish, heart thumping cars? Rarely.

Getting Toyota to be a more nimble, more engaging company will not be easy and will take time.

Good luck Mr. Toyoda.

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