When the 'giant' Toyota decided to change

Toyota's problem lies in the classic management philosophy that has helped the company succeed for decades.

Laughter erupted from many people in the press conference room when the CEOAkio Toyoda excitedTalking about the new generation Camry with two options, one sexy (XLE version) and one really sexy (XSE version).

Toyota Camry 2018, launched at the 2017 Detroit show. Photo:Thecarconnection.

And as if to cover up his somewhat excessive statement, he smiled a bit awkwardly and said: "I know that calling Camry a sexy car right now sounds like an exaggeration to many people. But I really believe that the design department has done something unprecedented."

The interesting moment above is one of many new slices of change for Toyota, a car company that is associated with a conservative image and slow to innovate.

Neutral is not perfect

With Toyota products, the adjective sexy is rarely used.The neutral philosophy in the product, creating the primary value towards durability and price retention helps Toyota become the world's leading car manufacturer. Along with that is the boring design, everything is normal at the perfect level, from the appearance to the operating features.

The current context with changing customer tastes, Korean cars on the rise, electric car trends or self-driving technology, makes Japan's largest car company have to look back at itself.Toyota Way or Toyota Method with 14 management principles is the handbook that brought the car company from the textile industry to its current position. Hansei, the reflective method is one of them.

Hansei reminds Toyota people to always be open-minded, to look back and correct mistakes. CEO Akio Toyoda, the grandson of the company's founder, is perhaps the person who is most imbued with this philosophy. "I feel something is not right about whether we are producing cars in the way that consumers want," he said at a press conference in May 2017.

Prioritizing function over design makes the emotions of car users become secondary. Toyota admitted that after many years of listening. They changed by giving more power to the design department. The new Camry and C-HR create a strange wind with sporty, dynamic and unconventional designs.

"Toyota's global strategy is to create more emotion in its products.", Jessica Caldwell,"The company has been criticized for making boring cars. Now is the time for a risk - the mid-size sedan segment is struggling," commented an analyst at Edmunds.

The boom of the crossover/SUV segment has pushed sedans into a widespread decline. To reach a shrinking customer base with more demanding product requirements, Toyota had to change.The neutral philosophy is most clearly expressed on Toyota's flagship sedan line.really threatened.

Camry is no longer the quiet style, suitable for the elderly. The design is more attractive with the breath of luxury Lexus cars. Camry versions have clearer differences in appearance and equipment, no longer the "for show" style like the previous product.

"We can reach a lot of new customers who in the past did not consider Toyota cars, because the company's current products are really different," said the engineer.said Hiroyuki Koba, who led the C-HR design project.

C-HR, a new crossover with a sporty, individual design language, is expected to improve Toyota's boring image. Photo: Caradvice.

Mr. Koba added that Toyota aims to design new products for people who do not like Toyota cars. The Japanese automaker's products have always been easy to accept for the majority of customers. This is Toyota's strength. Of course! But consumers demand more, before turning away if there is another product that is good enough.

Cannot be slow to improve

Another important management philosophy in the Toyota Way is to use only necessary, reliable technology and, most importantly, to fit the company's identity. Therefore, Toyota's products are very slow to innovate.

Japanese automakers also do not race to produce according to the whims of consumers. The research process and reaching consensus across many departments and divisions often takes a lot of time before Toyota cars go into production.

The rise of Korean cars with increasingly improved quality and rapidly changing designs may be one of the reasons for Toyota's turnaround. Competitors have exploited Toyota's weakness of slow innovation. With the same pricing strategy, the Koreans have gradually expanded their market share, breathing down the neck of the car company that just lost the world's number one sales position to Volkswagen in 2016.

OriginalNemawashi blockToyota's (cautious change) needs to be adjusted. In addition to design, Toyota needs to show that they are willing to provide more options and quality upgrades to customers.

Toyota's new approach to manufacturing begins with closer collaboration with suppliers. Previously, Toyota engineers had been in contact with suppliers on a monthly basis. Now they work directly with the design team at the R&D Center, where theyheadquartered in Ann Arbor, Michigan, USA.

"We give them the chair and make them part of the production project.t," said Robert Young, vice president of Toyota North America. "Now they're here and talking to us every day."

Involving suppliers earlier and deeper in the manufacturing process is a new feature of Toyota. The Japanese automaker wants to develop new models faster, apply complex techniques, and give the car its personality.

Based on the new TNGA platform and changes in the material supply system, the new generation Camry reduces completion time by 40% and costs 25% less than the previous generation, according to Autonews. Toyota's largest sedan, the new Avalon, also applies the same production method as the Camry. The car is expected to launch in 2018.

Portrait of Toyota captain, CEO Akio Toyoda. Photo: Autonews.

CEO inspires

There is a less obvious change at Toyota, not in the company culture but in the person. CEO Akio Toyoda, a Japanese, runs the Japanese car giant but with a Western-style openness, assertiveness and personality.

Under the timeAkio Toyoda, Toyota went through a difficult period of the 2008 financial crisis. Then came the massive recall in the US due to sudden acceleration. But things gradually returned to normal, the Japanese car company gradually rose to the top position. For the man born in 1956, Toyota's philosophy is now undergoing major changes.

Toyota's 2016 fiscal year report released in March 2017 showed that the company's revenue decreased.2.8%, reaching 242.2 billion USD. Net income decreased 20.8%, at 16.1 billion USD. Business outlook for 2017, the Japanese car company expects revenue to continue to decrease 2.5% and profits fell 18%, according to Bloomberg.

Despite the immediate difficulties, Mr. Toyoda said the company will persist with its new strategy."I think the latest business results show Toyota's solid, consistent positive changes in the future, rather than focusing on short-term profits."

In the past, the race for quantity was one of Toyota's goals and it succeeded. Being number one for a long time strengthened Toyota's reputation, but it also resulted in many boring car designs. Mr. Toyoda said he would not put too much emphasis on that position. What is important for Toyota now is to increase the quality of the product.

The design department under Mr. Toyoda received more power to freely implement ideas. The luxury car division Lexus has a new captain. He personally gave the decision-making power to the head, trying to create a unique Lexus to catch up with the trio of BMW, Mercedes, Audi.

If there was one person who could mirror what Toyota is looking to change, it would be CEO Akio Toyoda.When the "big guys" make a move, everything is worth the wait.

According to VNE