Toyota banks on tech tie-ups to stay agile

A Toyota Motor showroom in Tokyo. The Japanese car giant hopes to learn, through its partnership with Uber Technologies Inc, how the technology upstart collects, manages and uses its data to respond to shifts in consumer demand.
A Toyota Motor showroom in Tokyo. The Japanese car giant hopes to learn, through its partnership with Uber Technologies Inc, how the technology upstart collects, manages and uses its data to respond to shifts in consumer demand.PHOTO: AGENCE FRANCE-PRESSE
A Toyota Motor showroom in Tokyo. The Japanese car giant hopes to learn, through its partnership with Uber Technologies Inc, how the technology upstart collects, manages and uses its data to respond to shifts in consumer demand.
TOYOTA MOTOR'S EXECUTIVE VICE-PRESIDENT DIDIER LEROY.PHOTO: AGENCE FRANCE-PRESSE

TOYOTA • Toyota Motor spent nearly 80 years building a behemoth capable of outselling the rest of the auto industry. It is now staking its long-term survival on learning from upstarts like Uber Technologies Inc how to be nimbler in responding to fundamental shifts in what its customers want.

The world's top carmaker needs to operate with a sense of crisis to keep pace with customers wanting cars to be cleaner, connected and capable of autonomous driving, executive vice-president Didier Leroy said on Wednesday.

The Frenchman has set out to arouse passion among Toyota's bureaucratic ranks in the more than six months since president Akio Toyoda revamped the company into seven business units and named Mr Leroy chief competitive officer.

"In this kind of fast-moving world, nobody can say we are protected; nobody can say we have cash," Mr Leroy, 58, told reporters in Toyota's Tokyo office. "Everything can disappear very quickly."

After notching three consecutive annual profit records, analysts estimate Toyota's industry-leading earnings will tumble this fiscal year largely due to a stronger yen.

The Prius and Corolla maker's limited presence in China relative to closest competitor Volkswagen may also cost the company its worldwide sales leadership after a four-year run atop the charts.

NO GUARANTEES

In this kind of fast-moving world, nobody can say we are protected; nobody can say we have cash. Everything can disappear very quickly.

TOYOTA MOTOR'S EXECUTIVE VICE-PRESIDENT DIDIER LEROY

In the first nine months of this year, worldwide deliveries rose 0.4 per cent to 7.53 million vehicles, Toyota said yesterday, while Volkswagen's sales climbed 2.4 per cent to about 7.61 million in the same period, said an Oct 14 statement.

Mr Leroy, whose automotive career began 34 years ago on Renault's factory floors, suggested Toyota is not focused on the 10 million annual sales scale coveted by his former boss Carlos Ghosn.

During the next two decades, Mr Leroy said, the industry's growth opportunities lie more in the emergence of data and mobility services than in delivering more vehicles.

That's where Toyota's partnership with Uber comes in. While the tie-up is a head-scratcher at first glance - Uber chief executive officer Travis Kalanick's stated mission has been to end car ownership - Mr Leroy said that both sides have agreed to some elements of data sharing.

"What we really want to learn through the partnership with Uber is how they manage their data, how they collect data, how they would use it," said Mr Leroy, who has been on Toyota's board of directors since June last year.

"We can continue to learn and make sure we can grasp the appropriate information before it would be too late for us," he added.

Mr Toyoda, 60, overhauled the carmaker founded by his grandfather into seven in-house companies earlier this year. Their focuses range from vehicle segments to advanced research and development to connected cars and powertrains.

The reorganisation continues a years-long effort by the company president to get the carmaker to become quicker and more agile.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on October 28, 2016, with the headline 'Toyota banks on tech tie-ups to stay agile'. Print Edition | Subscribe