While analysts expect Toyota will Tuesday report net income dropped for the first time in three quarters, it’s probably still on track to post annual profit growth for the first time in two years. The shares were down 1.4 percent to 7,520 yen as of 1:37 p.m. in Tokyo. They are still near the highest since the end of 2015.
Still, Akio Toyoda says the automaker his grandfather founded eight decades ago needs to move faster and take more risks to keep up with the likes of Google and Uber Technologies Inc. in the race to make cars connected, autonomous and electric.
“Toyota is developing electric vehicles and other new technologies, but at the same time they’re going back to basics,” said Seiji Sugiura, an analyst at Tokai Tokyo Research Center in Tokyo. “Their strength doesn’t just lie in hardware, but also in soft power. So reinforcing that by creating the TPS Group to implement it across manufacturing and sales is a positive thing.”
In the last two years, Toyota has opened a Silicon Valley research center, set up a $100 million venture-capital fund and started software companies
in Japan and the U.S. with plans to add a European branch this year. The automaker says it will spend a record $9.7 billion on research and development in the 12 months through March. In December, Toyota announced plans to have at least 10 battery-electric vehicles in its lineup by the early 2020s, from zero now.
Last month Tomoyama was promoted to become one of just six executive vice presidents at Toyota. In addition to heading the TPS group, he has a sweeping portfolio that includes being chief of information security, leading the automaker’s big-data drive, and helming the motorsports division.
Tomoyama earned his kaizen credentials in the early 1990s when he worked in the Production Research Division, known within the company as the “temple” of the Toyota Way, where engineers scrutinized every inch of the manufacturing process.
In 1997, he was appointed by Toyoda, then a mid-level manager, to lead a task force working on a knotty problem: despite the company’s success at shaving seconds off production times, cars tended to languish on lots before being shipped to dealers. Tomoyama’s diligence earned him the nickname “kaizen man” from Toyoda.
“If we want to make the most of Toyota’s strength in creating new business models, it’s going to require applying TPS,” Tomoyama said. “We want to show people inside and outside the company that TPS is still central to Toyota.”