Quality name of the game, says Toyota

Toyota Motor Corp. President Akio Toyoda speaks during a press conference in Tokyo. Photo / AP

Toyota wants to claim an industry first, reaching an annual sales target of 10 million vehicles by 2015, even as it acknowledges that too rapid growth was at the root of its recall fiasco.

Toyota President Akio Toyoda gave the 10 million figure while outlining the company's "global vision" in his first major strategy announcement since the recall crisis that hit 18 months ago.

The Japanese carmaker reported worldwide sales of 8.42 million vehicles last year - 30,000 more than General Motors. Toyota dethroned GM as the world's No. 1 carmaker by vehicle sales in 2008 - a position GM held for 76 years.

Toyoda said the carmaker wanted to make millions of customers happy, and even denied he was giving a numerical sales target, repeatedly emphasising goals like quality controls, customer satisfaction and solid profits.

Toyota, which makes the Prius hybrid and Lexus luxury models, hopes to achieve an annual operating profit of 1 trillion yen ($16.3 billion) "as soon as possible", even if the yen remains strong and vehicle sales drop by 20 per cent, Toyoda said.

The company is forecasting operating profit of 550 billion yen ($8.9 billion) for the fiscal year ending March 31.

Toyoda said the vision was based on what the carmaker had learned from its quality problems and the sales hammering from the global financial crisis of 2009.

Jesse Toprak, vice-president of Industry Trends and Insights at TrueCar.com, said the vision was too short on specifics such as model plans and marketing strategies, given the recent gains of rival United States carmakers as well as South Korea's Hyundai.

"We need to see more concrete examples of what needs to be done," he said. "There was a lot of wishful thinking."

Still, Toprak said reaching 10 million in annual vehicle sales was not impossible for Toyota - as long as it came up with more exciting model designs and successfully put the quality doubts behind it.

Since late 2009, Toyota has announced recall after recall, covering a wide range of defects, including faulty floor mats, sticky accelerator pedals and glitches in braking software, ballooning to more than 14 million vehicles globally.

The company paid the US government a record US$48.8 million ($66.3 million) in fines for its handling of three recalls. Toyota faces dozens of lawsuits from owners in the US, including fatalities allegedly linked to defects.

Last month, US regulators closed their 10-month investigation, clearing Toyota of electronic flaws and finding that mechanical problems covered by the recalls took care of the unintended acceleration cases.

The company has said quality problems emerged as it went through a period of rapid growth.

Toyoda said that the carmaker's board of directors would be reduced to 11 from 27, but the number of executives overseas would be boosted to 15 from 13, to be more responsive to regional needs and to enable quicker decision-making.

In an unusual move, Toyoda's predecessor Katsuaki Watanabe - seen as a key figure in the go-go growth before the quality lapses - will resign from the board of directors after a June shareholders' meeting. Past presidents have stayed on longer, and Watanabe's predecessor Fujio Cho remains on the board.

Toyoda also said the company would empower its regions, including North America, which would centre around development and production of the Camry sedan to better cater to their needs.

That appeared to answer to criticism that Toyota's response to the quality problems was initially too slow, worsening the image damage that followed.

The carmaker would also focus more on emerging markets for new growth, aiming for 50 per cent of its sales from those nations, up from the current 40 per cent.

Green vehicles would be another pillar for the future, with plans for 10 more hybrid models by 2015.

Two new, station wagon versions of its hit Prius hybrid are set to go on sale in Japan next month. The five-seater version will be in North America later this year, and the seven-seater - packed with a new lithium-ion battery - will be in Europe next year.

"I want Toyota to make good cars that will make everyone smile," Toyoda said.

Each region would work harder when achieving sales growth to ensure that quality was not compromised. He stressed Toyota was not chasing numbers.

"I was just answering a question," he said, when pressed about why he had given the 10 million vehicles number.

Another big change from past visions, where the numbers game was big, was that the latest was written in English, which Toyoda said was the world's international language.

Toyoda often switched to English during the presentation, using phrases like "smiles from customers around the world", and "our commitment to quality and constant innovation."

"This vision is about what kind of company we are, our values and the road to what kind of company we want to be," Toyoda said.

- AP