80 years on, Toyota looks to founding spirit for direction as it heads into ‘uncharted territory’

Toyota Motor Corp. sees the need to revive its founding spirit in an era of intense competition amid cataclysmic changes the automobile industry is going through.

Leaving its post-World War II crisis far behind, Toyota, which marked the 80th anniversary of its foundation Aug. 28, has grown into one of the world’s leading automakers, with annual new vehicle sales of over 10 million units.

But its future is not guaranteed. As the industry faces a shift away from gasoline to electric vehicles and challenges from ride-sharing services, competition is heating up, throwing the company into what President Akio Toyoda has described as “uncharted territory.”

It is important to have a “resolve to open up the future,” Toyota Honorary Chairman Shoichiro Toyoda said, stressing the need to go back to the founding spirit.

Recalling the early years of the automaker, Shoichiro, the 92-year-old father of Akio, said, “Japanese industrial products and scientific technologies at that time were poor compared with their European and U.S. counterparts.

“There were many high walls” to overcome before Toyota started auto production, Shoichiro said in a speech late July.

Toyota Motor Co., the predecessor of Toyota Motor Corp., was established on Aug. 28, 1937, by Shoichiro’s father, Kiichiro. It was a start-up created from the automobile division of Toyoda Automatic Loom Works Ltd., now called Toyota Industries Corp.

In the preceding year, the group released the Toyoda Model AA, the first mass-produced Japanese car. But technologies applied in the product were in their infancy.

Facing financial difficulties in the postwar recession, Toyota once nearly went bankrupt.

Toyota began to make big strides after launching the Crown, the first car fully made in Japan, in 1955. Toyota’s trademark Corolla followed by making its debut in 1966, driving the company to lead Japan’s motorization.

Toyota has increased its international presence since starting auto production in the United States.

In 2008, Toyota became the world’s largest auto seller, ending U.S. giant General Motors’ reign over the global market that had lasted nearly eight decades.

On the environment front, Toyota in 1997 released the Prius gasoline-electric vehicle, the world’s first mass-produced hybrid model. It has also become a leader in global competition for developing eco-friendly vehicles.

Now the industry is at a crossroads following the arrival of electric vehicles powered by motors. As the new breed does not use engines, which require design and production expertise proprietary to automakers, a drastic change is sweeping the industry, which has been based on gasoline vehicles for the last 100 years.

The sophistication of technologies used in vehicles has also given rise to competition from companies from outside the industry. U.S. technology giants Apple Inc. and Google Inc. are leading the race to develop automated driving technologies.

Outside Japan, ride-sharing services are spreading rapidly. The sector is even beginning to shake the fundamental assumption that users own their vehicles.

“Even though Toyota has managed to stay in business for 80 years, no one knows what it will look like 20 years from now,” a Toyota top executive says in the face of the “once-in-a-century revolutionary change.”

“Bound by our successful experiences, we have failed to see problems with our way,” another Toyota executive says, showing a sense of crisis over Toyota’s lag in the race to develop electric vehicles.

Toyota has already begun to move forward. It has formed alliances, including a capital and business tie-up with Mazda Motor Corp. announced in early August.

Toyota is trying to end its closed approach to product development and learn from Mazda, which develops a variety of models at low cost and produces them in small volumes with its unique technologies, industry sources said.

“It’s important to set high goals like Kiichiro’s dream of making cars and have a firm resolve to open up the future,” said Shoichiro, who has first-hand knowledge of the company from its early years.


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