Bolstering Toyota’s Vision in the 21st Century

Toyota is still one of the top automakers in the world. It has toppled General Motors as the world’s largest automaker. Having displaced Ford as No. 2 in 2003, Toyota has continued to grow while GM’s market share has been falling. Towards the end of 2005, Toyota announced its intention to produce 9.06 million cars in 2006. General Motors prefers not to predict its output publicly, but industry consultant CSM Worldwide estimates it to be 8.92 million vehicles. In 1963, when Yoshio Ishizaka joined Toyota, the company sold 24,380 cars outside of Japan. In 2005, they sold 4.95 million. We have been witness to amazing growth over the span of over 40 years with Toyota’s overseas operations.

Figures are fascinating, of course, but much has been said already about the Toyota Production System. So, when Yoshio Ishizaka spoke at length about Toyota’s achievements and ambitions at the Cambridge-MIT Institute Distinguished Lecture Series, we caught up with him as he stepped down from the podium and into the future.

TWSM Framework

But first, let’s look at the framework on which the future is built. In the Toyota Way in Sales and Marketing (TWSM), Ishizaka talks about the vision and the mission. The vision, he says, “is to become the most successful and respected car company in each market around the world by offering customers the best purchasing and ownership experience.” He then sets two missions for every employee to materialize the vision, “to create lifetime customers by adopting a customer-first strategy, and to become the sales and marketing radar for all of Toyota.”

To help implement The Toyota Way, Ishizaka established the Global Knowledge Center within the University of Toyota, a training division of Toyota Motor Sales USA, in July 2002. He chose the name carefully to avoid the connotations of academy or school, and he set it up outside of Japan, he says, because “I believe the success stories in overseas markets should not be pushed and controlled from Japan.”

Much of what Ishizaka says about Toyota involves the visual, but when it comes to the future of mobility, we move from visual to visionary. April 2002 saw the creation of Toyota Global Vision 2010, which identifies four areas of innovation that are set to have a dramatic effect on the company and its products. The first, ‘true to the earth’, involves Toyota becoming “a leader and driving force in the reduction, reuse, and recycling of resources by implementing the most advanced environmental technologies.”

Toyota Prius produclion lineCorporate Responsibility

‘True to the earth’ recognizes that vehicle ownership is forecast to proliferate, prompting concerns about traffic accidents, global warming, and air pollution. “Our responsibility as an automobile manufacturer will grow accordingly,” says Ishizaka. “The main challenge is how to achieve sustainable development.” Toyota’s approach to the challenge of what Ishizaka calls ‘sustainable mobility’ can be summed up in two words; ‘zeronize’ and ‘maximize.’ The first word may be unfamiliar, even to scholars of English, but is an efficient way of describing the quest for “zero negative impacts on our environment and society.” Maximize, on the other hand, refers to the search for “maximum positive impact on personal enrichment through comfort, fun, and excitement.” Opposite ends of the spectrum, you might justifiably think, and this puzzle is not lost on Ishizaka. “The main task is to build environmentally-friendly vehicles that are of high quality, deliver optimal performance and that please the customer,” he says. Aware that the increase in automobile ownership throughout the world will roughly double consumption of gasoline and diesel fuel by the year 2050, with an inevitable increase in CO2 emissions, he acknowledges that “as the central player in the transportation industry, car manufacturers will take on a very important role.”

Hybrid vehicles may be the current flavor of the month, and many would say ‘a good thing, too’, but fuel-efficient vehicles are only part of the solution. Ishizaka recognizes that the industry has focused too narrowly on “tank-to-wheel” efficiency when the real focus should be on “well-to-tank” efficiency. The tank-to-wheel efficiency of a typical gasoline-powered car is only 16 percent, he points out, meaning that 84 percent of its energy potential is wasted in things like heat and friction, but on the other hand, “we also need to remember that carbon dioxide arises from oil refineries as well as from automobiles.”

Full-Scale Research

Manufacturing the vehicles is another issue. Toyota’s research shows that the production of fuel-cell vehicles consumes more energy than conventional vehicles, so there needs to be a “structural change in the automobile industry and in the fuel and materials industries.”

But hybrid technology, Ishizaka believes, is crucial to the development of the ultimate ‘eco-car.’ The Toyota Prius, of course, was the world’s first mass-produced gasoline-electric hybrid car, (launched in Japan in 1997, and then on the world market two years later), although it must be said, not the only one now. Beyond that, Ishizaka believes in providing an ideal car for the future society: “we must consider and aim for the following; no CO2 from well to wheel; personalized mobility (one car per person, in much the same way people, own mobile phones today); intelligent mobility, a car society that has eliminated accidents and traffic jams through IT and ITS (intelligent transport systems), and finally, bridging the mobility divide (a car society where the physically challenged can drive cars, and all people on every single continent can enjoy the convenience of mobility).”

Which brings us (at last, you may think) to the image of the ‘i-swing’ car on the cover of this magazine. “The i-swing is a new personal mobility vehicle that allows drivers to express their individuality,” says Ishizaka. Well, maybe so, but whether you swing or not, in Massachusetts, in January, I think I’d rather be in a 4X4.