New Toyota CEO more EV-minded

The future Toyota CEO (as of April 1st), Koji Sato, declared on Monday that he wanted to accelerate the group’s development of electrification. However, he also pointed out that the number one car manufacturer in the world had a “communication problem” over its electrification strategy until now.

At the end of January, Toyota’s heir and actual CEO, Akio Toyoda, announced that he would leave his job to Mr. Sato and become Chairman of the group. On Monday, the Japanese giant announced a whole reshuffle of its executive structure, and it was there that the future CEO made his first statement.

“Today, I would like to explain our new management team structure from April. The theme of this new structure is ‘inheritance and evolution’. We should inherit the product-centered and region-centered management that President Toyoda has built over the past 13 years.”

A mobility company

Sato emphasized that his predecessor and future Chairman has led the way for a long time (13 years) and that he will further work out the fundaments laid out. “The evolution for which our new management team aims is to transform Toyota into a mobility company. We will do so under three car-making themes. They are Electrification, Intelligence, and Diversification.”

Sato pointed out that the first topic is critical; without changing Toyota’s general viewpoint, the company has to be as open-minded as possible. “The energy situation varies around the world. So we want to stay in tune with customers worldwide and provide diverse options. That is why we will continue an omnidirectional approach without wavering from our multi-pathway. In that multi-pathway, battery electric vehicles, or BEVs, are also an important option.”

In 2021, Toyota fixed itself a target of selling 3,5 million EVs by 2030. In 2022, however, it couldn’t sell more than 28 000 pure electrical vehicles worldwide, including the hydrogen-driven Mirai. In response to a question about this “laziness,” Sato answered that “half of the problem was based on a lack of communication. We have to do better there”.

Until now, Mr. Sato was the President of Lexus, Toyota’s luxury brand, and he has big plans for it. “Now that the time is right, we will accelerate BEV development with a new approach. Specifically, we will develop next-generation BEVs for the Lexus brand by 2026, with everything – from the battery and platform to how a car is built – optimized for BEVs while expanding our current BEV line-up.” More details about the future electric platform of the group will be published after he has started as CEO in April.

On both other topics, Mr. Sato had this to say. “The second important theme is intelligence. With more interactive cars, we will make them safer, more comfortable, and more enjoyable. I believe that there is vehicle intelligence that only a carmaker can achieve.”

“By listening to what cars have to say, and by controlling information to a higher, more integrated degree, we can increase the value of cars in a way that is tailored to each customer, such as by improving fuel efficiency, optimizing ride quality, and supporting safe driving. The software platform Arene will help us to achieve that world. Arene will also lead to new services through collaboration with dealers and apps.”

Nevertheless, Toyota won’t change its multi-solution approach. Koji Sato: “The third theme is diversification. Toyota operates all over the world. Customers’ diverse needs and values vary by region and generation. That is why we need diverse options in terms of both products and services.”

“Take, for example, the IMV 0 concept vehicle we unveiled in Thailand last year. By prioritizing ease of customization, we are directly addressing the needs of customers who use pickup trucks in their work. As a global company with full line-ups, we will advance car-making that is in tune with regions and meets diverse needs.”

Three business pillars

To realize these three themes, the new management team at Toyota will prioritize three business pillars. “The first is business reform starting with next-generation BEVs. To deliver attractive BEVs to more customers, we must streamline the car’s structure, and – with a BEV-first mindset – we must drastically change the way we do business, from manufacturing to sales and service. Lexus will lead this transformation.”

“The second is strengthening our Woven initiatives. Woven’s mission is to consider, together with Toyota, the shape that mobility, including social infrastructure, should take to create a new mobility society. It also plays an important role in promoting our concept of vehicle intelligence. That is why, more than ever, Toyota and Woven will unite to accelerate the development of Arene and strongly pursue demonstration tests in the mobility test course  of Woven City.”

“And the third is achieving carbon neutrality in Asia,” Sato concluded. “We will promote demonstrations of electrification and mobility through cross-industry and cross-border collaboration based on a cornerstone partnership with the Charoen Pokphand Group, Thailand’s largest private-sector company. Our new management team will develop specific initiatives for these three pillars.”

Management changes

The reason for this first speech of Mr. Kato as the future big boss was the management changes going to be implemented as he takes the CEO position. Many top managers have been confirmed in their responsibilities or changed to other positions in a major reshuffle.

What took our attention was the announcement that the Design chief, Simon Humphries, will become a member of the Board of Directors. Secondly, Toyota Motor Europe CEO Matthew Harrison will have a new regional boss again, Yoshihiro Nakata, who he will assist as Deputy Chief Executive Officer. A bit of a strange move when you know Toyota Europe had been doing very well in 2022.