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The enthusiasts have taken over Toyota

Akio Toyoda and Tetsuya Tada are changing the face of the most successful car-maker in the world

Tetsuya Tada: “What’s changed at Toyota is what is seen as successful inside the company. It used to be about revenue and margin, but now people are starting to see what value each car brings to its customer.”

Tetsuya Tada: “What’s changed at Toyota is what is seen as successful inside the company. It used to be about revenue and margin, but now people are starting to see what value each car brings to its customer.”

 

Considering that both the Camry and Corolla names are making imminent comebacks, you might be forgiven for assuming the more things change at Toyota, the more they stay the same. Equally, given the wholesale shift towards hybrid power (and eventually, possibly, fuel-cell power), that the end of fun motoring has equally arrived at the Japanese giant.

Toyota is, of course, a corporate behemoth, and the biggest-selling single car brand in the world (VW Group needs multiple brands to out-sell Toyota’s 7.8 million global registrations last year). It reached that point by, to be blunt, creating dull but functional cars and selling them by the bushel. As a corporate strategy, it worked well.

However, it’s changed now. Toyota’s chairperson, Akio Toyoda (grandson of the company’s founder) is an avowed car nut, a true enthusiast who races on his weekend off. It’s tough to translate that kind of keenness on the machinery into profit, as many a small sports car company has found to its cost, but Toyoda decided long ago it wasn’t enough merely to make and sell lots of cars. He wanted Toyota’s millions of customers to love the brand too. That desire for connection with the customers triggered a massive change of corporate mindset.

Tetsuya Tada has been one of the chief architects of that change. When Tada first joined Toyota, he was recruited by brand’s legendary chief engineer, Ichiro Suzuki. Suzuki had developed crucial cars such as the first RAV4 and the Lexus LS400, and had just created the legendary A80 version of the Supra sports car when he hired Tada. “I was asked by Suzuki-san to join his division, because I thought that I’d be working on the next Supra. That was in 1997 . . .”

Every sports car fan knows Toyota pulled the plug on the Supra that same year. Tada was bereft: “That was exactly when Toyota was shedding cars with small margins, exactly when I joined the ‘Z-Division’ where the Supra was born. It was suspended as soon as I joined. I was put, instead, in charge of the Raum . . .”

Deeply dull car

The Raum was a deeply dull car, a Japanese market-only people carrier, explicitly designed for older buyers. Tada didn’t want to do it. “I went to Suzuki-san to complain. But he said I was getting it wrong. Because the basics of car-making are the same, whether for the Raum or the Supra.”

The fact the new Supra is here at all is testament both to Tada’s tenacity, and to the belief of Akio Toyoda that interesting, if low-volume, cars will bring buyers to the Toyota brand. There were wilderness years, years where inside the company you would have been censured for suggesting any new car that wasn’t a high-volume product, but Tada told Business Ireland that this era was critical for understanding what Toyota would eventually need for further success.

“I worked on cars like the Raum, and other compact cars, and then eventually I got to work on the car I wanted – the GT86 coupé. And only then did I remember what Suzuki-san had taught me, and then I truly understood it. He said it’s about thinking through and through about the person who’s going to be owning and driving the car. You have to spend night and day thinking about what they want. Nothing else matters. Of course, you have metrics, and targets, and costs to think about, but that’s really all nonsense. The numbers and targets mean nothing. Think about the people who drive this car, the heart, the feeling, what they get from the car.”

That’s a mindset both Tada and Toyoda have tried to inculcate throughout today’s Toyota. While it’s, obviously, still a big firm, and one as focused on profits and shareholder return as any other, there is now time to think about other things. “What’s changed at Toyota is what is seen as successful inside the company” says Tada. “It used to be about revenue and margin, but now people are starting to see what value each car brings to its customer. We still have to control costs – I calculate my budgets even in my dreams! I would love to work with no budget but I can’t even think what that car would be.”

Enthusiastic

The thing is that every car company has a Tada, or even an entire phalanx of them – engineers and designers who love their cars and are as enthusiastic about them as we are. All of which matters naught if the chief executives, the chairs of the boards, are hard-nosed, revenue-focused suits who think only of shareholder return.

Akio Toyoda is not like that. Tada says: “Akio drove one of our early Supra development cars, and came back in and said ‘This car . . . I can’t really converse with it’.” Converse. Nothing about the cost of the project. Nothing about margins or sales forecasts. Toyoda was concerned about the handling and the talkative nature of the steering.

“What did that mean?” said Tada. “Converse? How could we interpret that. Then we realised that the car he had driven was set up to be accessible to drivers of a lower skill level. So we made a detailed analysis, and came to the conclusion that when driving the car, it didn’t matter whether you were high-skilled or low-skilled, or whatever. It drove the same, gave the same results.

“Is that what you really want from a sports car? So this where we started refining the car into what would become the Supra. You don’t have to have professional skills, but if you put the efforts in, you get the results back. The next time when Akio drove the car, he said: “Now, I can converse with it!’ So now you and the car can grow together – it’s an incubator for better driving skills.”

Imagine that. The corporate monolith that is Toyota, the one that cranks out Aurises, RAV4s, Corollas, and Priuses by the thousand every day, and here is its chairman and its most senior engineer, worrying about how talkative the chassis of its new car is. It’s emblematic of how Toyota has changed.