Akio Toyoda, 52, will take over from Katsuaki Watanabe, 66 as president of Toyota later this year in June. Toyoda who is currently chief executive is the grandson of founder Kiichiro Toyoda.
With the global financial crisis driving down car sales to the lowest depths in decades thzat forced Toyota to announce its first loss in 70 Years (See: Toyota makes first annual loss in seven decades), Toyoda will have his hands full keeping the company afloat. According to a top analyst, given the bad environment, he will have a very difficult time and he can't be expected to work miracles in a very short period of time.
''The change in the world economy is of a magnitude that comes once every hundred years,'' Toyota's president, Katsuaki Watanabe, told a news conference in Nagoya, Japan, near the company's Toyota City headquarters last December. Sales last month dropped ''far faster, wider and deeper than expected.'' Calling the current environment ''extremely tough'', he said that the company was ''facing an unprecedented emergency situation'' and admitted that it ''can't see the bottom''.
Toyoda's priority would like be the US market. Industry-wide car sales are expected to fall to around 10 million down 3.2 million from 2008 sales figures which were the lowest in 16 years.
With the falling market Toyta's manufacturing facilities are saddled with excess capacity. The company's San Antonio pickup plant commenced making full-size Tundras in late 2006, just as gasoline prices started rising. The demand for such trucks plunged in both 2007 and 2008.
Sales in the US, traditionally its most profitable market, plunged 34 per cent in November and European sales dropped 34 per cent.
In Japan, Toyota's sales slumped by 7.4 per cent to 1.47 million vehicles last year. Sales are not expected to rise in 2009 in Japan given an aging population and drop in interest in cars among the youth. According to the Japan Automobile Manufacturers Association, this year will mark the lowest in auto sales levels in 31 years, at around 4.86 million vehicles.
On the plus side Toyoda will be able to bank on the company's $18.5 billion in cash reserves and relatively little debt, which enable it to offer interest-free financing of most of its vehicles in the United States. GM and Chrysler LLC are in dire straits having had to turn to the government for emergency loans.
Toyota's edge in fuel efficiency could increasingly be its unique selling proposition in the current crisis. It has plans to cash that advantage with the launch of a revamped version of the Prius hybrid this year. Also in the pipeline is a tiny, battery-powered car that can be recharge at electrical outlets. A concept version of this car was on display at the North American International Auto Show in Detroit last week.
Toyoda graduated from Tokyo's Keio University in 1979. He holds a law degree and is fluent in English. He received a master's in business administration from Babson College in Wellesley in 1982 and joined Toyota two years later.
Toyoda's elevation to the top job marks the return of the founding family to helm of the company's affairs in 14 years. Kiichiro Toyoda, Akio's grandfather, chose the name Toyota because it is associated with number 8, which symbolises good fortune in Japan. Toyota can be written in 8 brush strokes, one less than the number of brush strokes it takes to write the family name.