Toyota’s no 2 Didier Leroy: “Ten years ago they made fun of our hybrids”
At the age of 59, Toyota’s no.2 worldwide is French, native from Lille, close to the Belgian border: Didier Leroy. He saw Toyota predicting the switch from the combustion engine to electric 15 years ago. Financial newspaper L’Echo interviewed the man on the eve of the Tokyo Motor Show.
Leroy’s career at Toyota got a turbo boost some 12 years ago. After seven years with the company, Didier Leroy was named in 2005 CEO of Toyota’s plant in Valenciennes, France.
In 2007 he entered Toyota’s worldwide executive board and in 2009 he moved to Toyota Europe’s headquarters in Brussels on Akio Toyoda’s demand to be in charge of marketing and sales. One year later he became CEO until 2015, when he moved to Japan to become executive vice-president.
Today the Frenchman, who likes to visit his family in his native town of Lille as often as possible, is chief of Toyota’s worldwide activities, except for Japan itself. There he ‘only’ manages sales and marketing. He is the first non-Japanese to reach this level of responsibility.
How does a European manages to reach this level of responsibility at a Japanese company?
“First you need to have the right basic values in your DNA. These are not unique to the Japanese culture. Respecting people, the way you communicate are merely fundamental human values. Secondly you have to be aware that in a Japanese company, you need to win credibility and be willing to learn.”
“I’ve been on the same post for seven years from 1998 to 2005. In a company like Toyota, once you have this credibility, it can go fast. I have never pursued a promotion. What interested me was to discover new things, to get the impression to experience new things every day to become stronger in the future.”
“Too many people rack their brains in finding out how to behave to please the Japanese. But if you want to behave just like a Japanese, they don’t need you. It’s the difference you bring to them, another way of seeing and approaching things.”
“Lots of people will say that some things are impossible because it is ‘not done’ at the headquarters. What is important, is that you like to bring something to the company of the bottom of your heart”.
And then fight to convince them?
“Yes. And from that moment on you are part of the people who can push out frontiers”.
Push out frontiers, what does that mean at Toyota?
“You have to up to date with your time and being capable to let the company evolve. A company with 340.000 employees needs to have the agility of a startup with 40 people, even if that isn’t easy in every day’s life.”
“The automotive industry is very complex and you need rigorousness. But rigorousness can lead to bureaucracy because you are very process-driven. This can be a brake on change. You need to find the balance between rigorousness and the passion, the fighting spirit, to take risks, even if you don’t have all the answers.”
European car industry is somehow upturned with everybody making plans for electrification. How does Japan sees this?
“We, at Toyota, started that process 15 years ago. We’re not that upturned today. We introduced hybrid technology 20 years ago. Ten years ago a lot of people still made fun of our hybrids. We were the only ones to believe in it. Now we have 11 million hybrids on the roads, of which 1,5 million in Europe. In Europe 98% of all Lexus cars are hybrid.”
“In Eastern Europe 48% of all Toyota cars are hybrid. We launched the C-HR a year ago and it is an instant hit. We already decided in 2014 not to offer a diesel version and this decision was not taken after a scandal”.
Then why no diesel engine?
“We told ourselves it would be useless. We anticipated already the tendencies and the additional costs diesel would generate including the possibility the client would turn away from diesel.”
Everybody jumps onto the hybrid now. Don’t you fear they’re going to attack your meadow?
“On the contrary. Because now everybody sees it isn’t a temporary solution. The fact that some of our competitors have to try to catch up in a hurry with hybrids and electric cars proves that they have pushed the limit to keep on using the traditional engine too long.”
“The threshold of 95 grams of CO2 per km in 2021 is closing in fast. You have to act quickly to reach this goal. Our growth in hybrids in the European market was extremely positive last years. It even accelerated with the diesel phenomena we saw last year.”
“And even before we saw incredible growth, even with the Yaris hybrid of which many journalists believed it would be unsaleable. 45% of the Yaris cars sold is hybrid”.
South Korean brands are main competitors on the European market for you?
“They grow far less than a few years ago. In a market growing with 4% this year, they do 11%. They are far less aggressive than they used to be. In China Hyundai and Kia are not really taking off.”
Can Toyota jump over the Korean brands in Europe?
“We don’t care. It isn’t important. Lots of journalists harassed us for Nissan selling more cars than Toyota in Europe for one year. But none of your colleagues came back next year to say that we jumped over Nissan again. Nobody is interested in this.”
China is becoming a potential competitor in electrification. Do you think there will come a wave of Chinese cars to Europe?
“It isn’t sure yet if this wave will be in China itself or aimed at the world. I don’t know what Chinese government wants to do. What is clear, is their commitment to electricity, which won’t be aimed against their industry. They have confidence in their own capability to develop products of the future.”
“Will they want to put more weight on their local market that is soon to be extended to 30 million cars a year? Or will they use this to boost it on a worldwide level”? Toyota has always maintained a policy of little steps in China. Nothing like Volkswagen. We have sold 1,2 million cars there last year and have 6 or 7% of the market.”
“It’s an important market, being so close to Japan. We will follow it up from close-by, but we’re not going to force a high growth, because I think it is a market you have to be extremely careful with”.
How does Toyota react on the Brexit?
“We decided not to pull back our 240 million pound investment to make the UK factory more competitive. We think this plant is performing and the people are motivated. It was the first factory of Toyota in Europe in 1991. We are confident in their ability to get better and stay competitive, even in the event of more difficult commercial relations with Europe in the future.”
“But in the long term, you have to consider another phenomena. The British government tells us that if we want to stay competitive, we need to source more locally in Great Britain in the future.”
“But don’t fool yourself, it won’t come naturally. We produce 200.000 to 240.000 cars a year there now. We have a lot of suppliers around us in the UK, but they risk to do the opposite and in case of levies, move to the European mainland”.