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Japan Times
4 days ago
- Automotive
- Japan Times
Toyota's internal inertia stifles digital transformation effort
Inside Toyota, a group of employees are worried about the company's future in an era when a car's software matters just as much as its sheet metal. The world's biggest automaker is known for churning out reliable cars like clockwork, but it's been struggling to keep up with Elon Musk's Tesla, China's BYD and other front-runners in the industry's shift toward electric vehicles (EVs) with sophisticated software. A somewhat obscure Toyota business unit called the Digital Transformation Promotion Department aims to change that. Established four years ago at the behest of then-Chief Executive Officer and now Chairman Akio Toyoda, the little known group's mandate is to bring the carmaker up to speed by modernizing it from within. The division's rank-and-file members are drawn from a wide cross-section of the corporate flow chart — everyone from R&D technicians to blue collar mechanics on factory floors. They all share a broad vision to introduce a more digitized future to a company with a stubbornly analog culture. While they've managed to foster some changes, Toyota's core competency remains very much in hardware — with one foot in the world of EVs and its other planted in gas-powered cars. That cautious approach has been key to the Japanese automaker's success so far. Yet it's also a source of frustration for some inside and outside the company who are pushing for quicker progress. "Toyota sees the importance of software, but it's still slow,' said Kani Munidasa, chief executive officer of Code Crysalis, a Tokyo-based startup that's working with Toyota to put workers through Silicon Valley-style coding boot camps. Lukewarm commitment Some advocates for a software-led rethink at Toyota have grown disillusioned by what they see as a lukewarm commitment to reform from within, according to people familiar with the matter. They point to a recent decision to fold the Digital Transformation Promotion Department into a larger business unit, threatening to short-circuit its mission as a change agent. The division, which previously reported directly to Chief Executive Officer Koji Sato, was absorbed by the Digital Information and Communication Group "to accelerate the internal promotion of digital transformation,' Toyota said in a statement. "We aim to create new value and transform business by accelerating collaboration among the various infrastructures and the use of AI,' it said. In some ways a similar fate befell Toyota's effort to create a digitally focused, quasi-independent subsidiary called Woven. Despite bold ambitions to usher in a "software-first' approach to car manufacturing, in the end Woven was quietly folded back into the corporate mothership in September 2023 after its American executive departed and its portfolio was downsized. Toyota CEO Koji Sato | Bloomberg While Toyota's software team isn't directly involved in the development of the cars it sells, they've undertaken a number of projects focused on the company itself. That includes creating a database to keep track of the company's fleet of test cars, overhauling a system employees use to apply for time off, replacing white boards with touch screens on factory floors and deploying robots to deliver medicine inside Toyota's 527-bed company hospital in Aichi Prefecture, according to people familiar with the matter. Another project involved extending access for remote workers to computer assisted design software using a virtual desktop infrastructure in partnership with Nvidia. "Moving forward, our plan is to roll out similar systems not only to Toyota Motor but also to Toyota group companies,' Masanobu Takahisa, a Digital Transformation project general manager, was quoted as saying in a 2021 press release about the campaign. Those efforts might not be transformative, but they're notable in a company where scissors are banned in the office out of an abundance of safety-minded precaution, and erasable billboards are still used to keep employees informed at factories. Looming 'digital cliff' Toyota isn't unique among Japanese companies. While the country dominates in some high-tech fields such as industrial robots, its business culture is known for clinging to fax machines and other bygone technologies. The government in Tokyo has warned about failing to surmount what it terms a "digital cliff' separating Japan from other advanced economies. In March 2021, sitting across from union members during the final round of annual wage negotiations, Toyoda, scion of the founding family and then CEO, said he wanted to break down internal information silos and put the automaker's digital innovation on par with top global companies within three years. "Inside Toyota, it's still the case that only people 'in the know' are considered valuable, and that knowledge only belongs to a small group,' he said. "By moving forward with our digital transformation, we can rid ourselves of that inequity and build an environment where it's easier for everyone to focus on their work.' The carmaker based in Toyota, Aichi Prefecture, hatched the Digital Transformation division to heed that call with a team of innovative minds looking to break down antiquated systems and practices. The idea was that, if all went well, that reform agenda would rub off on other parts of the company, boosting resiliency and productivity. But the progress has been piecemeal and the division is far from achieving its long-term goals, the people familiar with the matter said. Former employees who spoke anonymously described a workplace bound by conformity, with a paternalistic bureaucracy that values harmony over new ideas. One ex-employee joined Toyota because they were interested in autonomous driving, but instead felt trapped for several years doing quality control on mundane electronic parts. Toyota's global success — its record as the world's biggest automaker for five consecutive years and its status as Japan's biggest and most important company — has arguably created a self-enforcing inertia. Talk among employees of transferring or quitting usually triggered the same reaction: Why would anyone want to leave? It's not the only legacy carmaker struggling to adapt to modern technology. Volkswagen's Cariad software unit has been downsized following glitches and delays, while Ford recently downgraded its next-generation advanced software project known as FNV4 by merging it with an existing architecture platform. That speaks to a larger issue involving the industry's ability to innovate fast enough to compete with the likes of Tesla and China's Xiaomi as well as Big Tech, which has moved aggressively into automotive dashboards with popular features such as Apple's CarPlay and Alphabet's Google Android operating system. Reinvention won't come easy for established automakers, said John Murphy, a senior automotive analyst at Bank of America. "It goes into structures, platforms, technology — sort of the whole integrated operating system of a vehicle, I think, needs to be done differently,' he said. "It's an uphill battle.'
Bloomberg
4 days ago
- Automotive
- Bloomberg
Toyota's Internal Inertia Stifles Digital Transformation Effort
Inside Toyota Motor Corp., a group of employees are worried about the company's future in an era when a car's software matters just as much as its sheet metal. The world's biggest automaker is known for churning out reliable cars like clockwork, but it's been struggling to keep up with Elon Musk's Tesla Inc., China's BYD Co. and other frontrunners in the industry's shift toward electric vehicles with sophisticated software.
Top Gear
26-06-2025
- Automotive
- Top Gear
Toyota Aygo X Interior Layout & Technology
Interior What is it like on the inside? Welcome to the Nineties: ovals are back! Just look at that great big ovoid dashboard, like a squashed Mini fascia. Amid it lives the usual Toyota infotainment system, looking like a great big oblong peg in a round hole. Like the old Ford Ka, the Aygo X makes a virtue of exposed metal on its doors. So long as you've gone for one of the cheerier colour options, it's a vibrant place to sit. Advertisement - Page continues below If you've sat up front in a current-gen Yaris, there's plenty of bits you'll recognise inside the Aygo X. The steering wheel, infotainment and climate control panel (yep, it has a proper one) all migrate from the larger, hybrid-only hatch and are all sturdy, easy-to-use bits of kit. What about tech? The X's driver display is very basic, with a small screen nestled inside a larger speedometer with a rev counter and fuel gauge either side. It might not be a high-tech setup but it's clear enough. There are three different grades of Aygo X: Pure, Edge, and Exclusive. The first two get a 9.0-inch touchscreen, while the latter gets a 10.5-inch touchscreen, which kinda looks out of place in a car this small. All get Toyota's latest Touch 3 operating system (looks clean, works well and includes shortcut buttons down the left-hand side), plus wireless Apple CarPlay/Android Auto connectivity. All too sit inside the aforementioned oval, while underneath sits the dedicated physical climate control unit. We approve. Advertisement - Page continues below There's also a gorgeous and pearly JBL Edition with a very tasty sound system – definitely one to keep in mind, if only to cover up the incessant engine noise. Is it practical? There's plenty of space in the front, though passengers might grumble at the lack of height adjustment in their seat. There's plenty of shoulder space if you're two-up. You wouldn't want to be using the rear seats regularly, though: legroom isn't great and although it's lovely, the optional canvas roof does eat into headroom in the back. The rear doors are also a lot bigger than their opening too: it's like heaving open a church door to find an aperture the size of an advent calendar. The boot is reasonable for a car this size at 231 litres – smaller than the Fiat 500 yet larger than the Hyundai i10. Anything else? The fabric rollback roof (an £900 extra) doesn't do anything for refinement. There's really two trains of thought here: one, it adds to the fun factor, but two, until cities are dominated by EVs and trees, why would you want to breathe in everyone else's fumes? Only you know where you stand.
CNA
12-06-2025
- Automotive
- CNA
Toyota chairman re-elected against backdrop of $33 billion buyout bid
TOYOTA CITY, Japan :Toyota Motor shareholders re-elected Akio Toyoda as chairman on Thursday, highlighting support among mom-and-pop investors even as the Japanese automaker's $33 billion buyout of a group company draws criticism from overseas shareholders. Toyoda, formerly chief executive of the world's top-selling automaker and grandson of its founder, was widely expected to be re-elected at Thursday's annual general meeting. For the first year in three, he was not opposed by either of the leading proxy advisory firms which had previously flagged governance concerns. The breakdown of voting is yet to be released so it is unclear whether he secured more than last year's 72 per cent, the lowest on record for a Toyota director. On Tuesday, shareholders of group company Toyota Industries peppered executives with questions about the carmaker's 4.7 trillion yen ($33 billion) buyout bid that foreign investors have called unfair for minority shareholders. Toyoda, who is not on Toyota Industries' board, was not present at that meeting. "There had already been a lot in the press about Toyota Industries ... so I think many shareholders thought they had enough information," said Akihiro Horiuchi, a Toyota Motor shareholder in his forties who was attending the AGM in central Japan for the second time. He said the automaker had explained its rationale for the deal on its Toyo Times news website. "Toyota (Motor) is the best company in Japan and I think it will continue to grow," Horiuchi said. Toyota Motor plans to take forklift-maker Toyota Industries private through a complex deal that will see Chairman Toyoda invest 1 billion yen of his own money and spur restructuring of Japan's most powerful corporate group. Priced 16,300 yen a share, some overseas shareholders have said the price undervalues the target's intrinsic value and strengthens the founding family's control over the group. Toyota Motor has said the acquisition will allow Toyota Industries to deepen collaboration with group companies, without the concern of short-term profit targets, as the group develops a broader mobility identity. This year, proxy advisers Glass Lewis and Institutional Shareholder Services recommended shareholders re-elect Toyoda. Glass Lewis recommended voting against in the previous two years and ISS had last year. Toyoda's position came under scrutiny due to broader governance concerns. Neither adviser gave specific reasons for their change in recommendation this year. The chairman has seen shareholder support slip in recent years. Last year's 72 per cent was down from 85 per cent and 96 per cent in the prior two. In a July interview with Toyo Times, Toyoda acknowledged his seat could be at risk if shareholder support continued to fall.
Reuters
11-06-2025
- Automotive
- Reuters
Toyota chairman to face scrutiny over $33 billion deal at shareholder meeting
TOYOTA CITY, Japan, June 12 (Reuters) - Toyota Motor (7203.T), opens new tab Chairman Akio Toyoda is likely to face scrutiny over a $33 billion take-private deal of a key supplier when shareholders assemble for the Japanese automaker's annual general meeting on Thursday. This year's gathering, set to kick off at 10:00 a.m. (0100 GMT), marks the first time in three years that Toyoda isn't being opposed by a shareholder proxy adviser. Nevertheless, the grandson of the automaker's founder is likely to face some tough questions about governance - if this week's meeting of supplier Toyota Industries (6201.T), opens new tab is anything to go by. Shareholders of forklift maker Toyota Industries on Tuesday voiced disapproval of the 4.7 trillion yen ($33 billion) take-private bid from its parent that they said was unfair to minority shareholders. The world's top-selling automaker plans to take its supplier private in a complex, multi-part transaction that includes an offer price of 16,300 yen a share. While the price might be a good deal for Toyota Motor shareholders, critics of the bid, including London-based Zennor Asset Management, have raised concern about the transaction, particularly around the treatment of minority shareholders. "This was not a decision that neglected minority shareholders, but rather one that was taken with all the factors in mind," Toyota Industries' President Koichi Ito told shareholders on Tuesday. Under the deal, a new holding company will be set up. Unlisted real estate company Toyota Fudosan will invest 180 billion yen while Toyoda will invest 1 billion yen. Toyota Motor will invest 700 billion yen for non-voting preferred shares. Tuesday's meeting ran for almost two hours, Toyota Industries' longest ever, the company said. Executives also took some two dozen questions from shareholders, the most ever. Hong Kong-based Oasis Management, which has shares in both Toyota Motor and Toyota Industries, has said it would push for a higher price. Toyota has said the acquisition would allow Toyota Industries to deepen collaboration with group companies, without concerns of short-term profit targets, as Toyota itself becomes a broader "mobility company". This year, prominent proxy advisory firms Glass Lewis and Institutional Shareholder Services have both recommended that shareholders re-elect Toyoda. Glass Lewis had recommended voting against him the previous two years and ISS had last year. Toyoda's position at the automaker had come under scrutiny over broader governance concerns. Neither proxy adviser gave specific reasons for the change in their recommendations this year. Toyoda has seen shareholder support slip in recent years. He was re-elected to the board with 72% backing in 2024, in what he later said marked the lowest support rating ever for a Toyota director. That was down from 85% and 96%, respectively, in the prior two years. In a July 2024 interview by Toyota's own news outlet, Toyoda said his seat on the board could be at risk if shareholder support continued to fall. Toyota Industries, formerly Toyoda Automatic Loom Works, was founded in 1926 to make automatic looms. An automotive division within the company was set up and later spun off as Toyota Motor.
