[volkman10]

Doing the unthinkable: Toyota wants to sell less cars, mulls 4-day work week.

The reason? Its record-breaking pace is taking a toll on Toyota employees and suppliers, and the company now wants to slow down, take a zen moment to observe its surroundings, before thinking about its next steps.

President Koji Sato, the former chief engineer of the Lexus LC and protege of Chairman Akio Toyoda, believes that the current pace of growth is not sustainable, and if continued, will hurt quality.

In the last financial year ending March 2024, Toyota Motor doubled its profit to 2.73 trillion Yen (~RM 83.4 billion). Its profit margin jumped from 7.3% to 11.9%, overtaking Tesla to become one of the world’s most profitable car companies.
This pace of growth is good for the short-term, but Toyota thinks decades ahead.
The quality setbacks at its compact car unit Daihatsu, whose root cause has been traced to pressure on its engineers to keep to a very tight new car model launch schedule, is a wake-up call for Toyota that it needs to slow down.

For the current financial year ending March 2025 (FY2025), Toyota wants to sell 140,000 fewer units (1.3% lower) than the previous financial year, to 10.95 million units across the entire group (including Daihatsu and Hino).



At the FY2024 results press conference in May, President Sato said that it is important for Toyota to take a pause to strengthen its foundation, even if it means some reduction in productivity in the short-term. Sato said:

“Therefore, this fiscal year (FY2025), we will determinedly devote the money and time needed to strengthen our work foundation.

[quote]Desiring to create today how we will work 10 years from now, we will strive to generate reserve capacity to ensure thorough safety and quality and firmly endeavor to develop a skilled workforce by improving individual skills based on job descriptions. [quote]

President Sato acknowledged that the lower sales target will have some impact to productivity in the near-term but said “While at first glance it may seem like a drop in efficiency, I’m certain that total efficiency and productivity will rise.”

Toyota’s efforts to improve working conditions of its staff are not just limited to its factories and offices, but also its dealers and suppliers.

Of the 380 billion Yen (~RM 11.6 billion) budgeted for human resources development for FY2025 (financial year ending March 2025), 79% is allocated for dealers and suppliers, not as additional payment, but as financial support to improve working conditions of their employees – installing air-conditioners and better rest areas, for example.


Link:

[Raghu M]

Well it has been doing something of that sort in India for a while. Time to share best practices round the globe!

[amitoj]

Wow. Mad respect to Toyota if this indeed is true. Boeing: Please take note.
My respect for Toyota increased massively when they introduced the GR Corolla. This is not just cherry on the cake but a whole layer of cherries!

[porsche_guy]

I call BS on this. It's just an attempt to turn a positive spin to the slowing overall global market after a strong rally in the past few years. Toyota knows this and cheekily is trying to portray itself as a saint.

[ABHI_1512]

Originally Posted by volkman10

President Koji Sato, the former chief engineer of the Lexus LC and protege of Chairman Akio Toyoda, believes that the current pace of growth is not sustainable, and if continued, will hurt quality.

Toyota’s efforts to improve working conditions of its staff are not just limited to its factories and offices, but also its dealers and suppliers.

If they really mean what Toyota President has said, then it’s will be a stupendous move and massive respect for them. That a President has said indeed carries some weight. At a time when car makers are struggling to focus on the future while transitioning from ICE to EV’s, Toyota has still not jumped on to the bandwagon like other manufacturers, showing that they are different. And they continue to amaze and different with this move as well. They should be applauded massively

[sumeethaldankar]

I am not sure why they cannot just start a new factory, higher and train more workers so that existing workers are not burdened. I think this all hogwash on Toyota's part that they want to sell less cars. Which company will say they want to sell less of their output. If this is the case with Toyota it means they have not planned for their growth and have become complacent.

[Vijay T]

Looking at the allocated budget for supplier work force well being,the famous TPS (Toyota Production System) might have evolved to include HR of suppliers as well it seems.

Great move by Toyota to safeguard & sustain consistent high level of involvement by all stake holders especially suppliers.

[androdev]

This is a positive PR spin to say they want to sell fewer cars. If they say they want to focus on well being of employees and suppliers, etc. it won’t get as much good karma as saying they want sell fewer cars. By not selling EVs and by not selling cheap hybrids, their true intentions are for everyone to see. They do go to great lengths to make reliable cars but they do extract their pound of flesh like any other commercial entity.

Europeans are very good at marketing their heritage and Japanese are very good at marketing their cultural aspects. These things come so naturally to them that even they don’t realise they are doing it.

[chiekennugget]

Originally Posted by androdev

This is a positive PR spin to say they want to sell fewer cars.

They have been getting a lot of bad PR in recent times, so makes sense why they would say something like this.

They are currently recalling 1,02,000 cars equipped with their new V6 engine.

NHTSA filings state that Toyota may not have removed machining debris from some of these engines during the production process. Per the filings, "if the aforementioned machining debris adheres to the bearings and operation of the engine continues at higher loads over time, failure of the bearings may occur. This can lead to potential engine knocking, engine rough running, engine no start and/or an engine stall."

source:https://www.edmunds.com/car-news/toy...ne-issues.html

They have announced a recall for 2,80,000 cars a few months ago, due to faulty transmission software.

Toyota is recalling 280,000 pickups and SUVs in the U.S. over a transmission issue that could cause the vehicle to keep moving even when it is in neutral.

The company said Wednesday that "certain parts of the transmission may not immediately disengage when the vehicle is shifted to the neutral position."

This can cause the power to continue to be transferred to the wheels and "allow the vehicle to inadvertently creep forward at a low speed when it is on a flat surface and no brakes are applied, leading to an increased risk of a crash," Toyota continued.

source:https://www.foxbusiness.com/lifestyl...smission-issue

There were more recalls, but they were related to other electronics and not drivetrain.

All of this is putting a dent in their Toyota=reliable/reliable=Toyota reputation.
This is the perfect statement to make in these times.

[i74js]

Originally Posted by sumeethaldankar

I am not sure why they cannot just start a new factory, higher and train more workers so that existing workers are not burdened. I think this all hogwash on Toyota's part that they want to sell less cars. Which company will say they want to sell less of their output. If this is the case with Toyota it means they have not planned for their growth and have become complacent.

Toyota is not the only one. Philips is leading the pack (they are in different business) and have aligned to the theory of "degrowth is the new growth"; this is certainly not BS as one of the fellow members said and several profit-making global players are evaluating this. The idea is linked to following thoughts.
- prospority (instead of profits)
- being purpose led business
- Reducing impact of climate change

Of course, implementation remains the key!

[L8ButV8]

To me this feels like either: (a) they are trying to put a positive spin on sales shrinking from market factors or (b) an attempt to increase prices, by creating supply/demand imbalance. They’ve massively increased prices for the last decade, and need to set the grounds for more increases.

I find it hard to believe that cutting projections by 1.3% will have any meaningful impact on quality. Why not keep it flat? Why not increase by a small percentage? Why is a 1.3% decline in production what is needed?

[Thyag]

Seriously , Toyota is trying to pull a fast one in here. Anyway this is a tried & tested methodology all over the world. It's called Scarcity Technique or Scarcity Error

[1.2GT3GT]

Originally Posted by androdev

Europeans are very good at marketing their heritage and Japanese are very good at marketing their cultural aspects. These things come so naturally to them that even they don’t realise they are doing it.

@androdev, that is an interesting way to put it. Probably reflects on their pride in their respective aspects.

[Freespirit27]

Smart move! Their cars a selling well despite being expensive hence they have enough waiting demand and therefore profitability is maintained. The waiting period in fact, adds to the premium value. Impatient customers will move on and it won't be a big loss for the company which relies on brand value.
Now if they are in a space where they are happy with what is being achieved and flat line sales figures are acceptable, then only the normal demands have to be supplied, which may well be possible even with a 4 day work week.
Moreover, the rapidly changing technology demands of Petrol, diesel, EV etc are not conducive to managing factory production lines requiring frequent re-configuring according to market demands. So it makes sense to wait and watch and step in, once the best selling tech and demands for the same has stabilised and then commit to it.

[Mystic]

I think Toyota has become so big now that they are trying to bite off more than they can chew. The competition now is becoming challenging and also there is no clarity in the automobile industry on what will be the next biggest change from ICE (like what happened from horse drawn carriages to IC engines one hundred years back ). All the so called visionaries in top automotive companies have no clue and hence they are revising their strategies on the fly. To cover this, Toyota is coming up with some story ( confuse the world when you can not convince) to tell the world and its employees. There is nothing wrong in this and even Mercedes has revised their strategy to EV from ICE.

I am a great fan of Toyota having owned one of their last production diesel automatic Z innova. I paid 3.2 million rupees for this car in 2021. This car has no sunroof or ADAS etc. With this kind of money, one can get much better options in the market but Toyota is selling 6K innovas every month because of its reputation of quality. Toyota learned the value of quality over a long time after a lot of struggle in quality issues two decades back and perfected this aspect. They are lacking in innovations and high tech in cars and the competition from the Koreans is becoming very tough.