By on January 22, 2010

At the end of an excellent comment on the recent 1989 Camaro RS Curbside Classic, commenter carnick noted:

I remember reading an article at the time which interviewed both Roger Smith, and Toyoda-san, the head of Toyota at the time. Each was asked, ‘is your company in business to make cars, or to make money’? Smith answered, ‘of course, we are in business to make money’. Toyoda answered, ‘we are in business to make cars, and by making the best cars in the world, we will make money’. While Toyota has had its problems lately (they caught some GM virus), I think the general path both of those companies have taken over the past 30 years shows which strategy works best.

This is fantastic encapsulation of the different directions GM and Toyota have been heading over the past several decades, but it’s also a warning sign for Toyota. The company that rose to the top of the global auto industry by virtue of a laser-like focus on cars themselves is facing a flood of recalls and perceptions of declining quality… and it’s just come out with a PR website called “Toyota Beyond Cars.” Coincidence?

Obviously it’s impossible to draw a causal link between declining quality and vacuous public relations initiatives. After all, if Toyota thinks that inviting the public to share “ideas about how you see beyond today to a better tomorrow,” somehow improves the public’s perception of the brand, so be it. In practice “Beyond Cars” is a harmless PR site, featuring plenty of carefully-staged photography and such shared wisdom as this bon mot from “Melissa H”:

But looking past the ruthlessly inoffensive (and unintentionally hilarious) details of the site itself, history tells us that losing focus never happens overnight. It starts with little things… like focusing on feel-good PR and reputational advertising at a time when you’re losing money and prestige. Compare the Toyota site to a similar recently-launched Hyundai site, and the the contrast in message and focus couldn’t be more clear. Instead of moving beyond cars, Toyota needs to regain its practical focus on the here-and-now… or risk a continued slide down the primrose path of GM-ification.

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12 Comments on “Toyota: So Over The Whole Car Thing...”


  • avatar
    Cammy Corrigan

    There are two metrics by which we can measure whether Toyota are failing or not:

    1. Are Toyota losing market share at a time when other around them are gaining? When old GM were losing market share in North America, other around them were posting gains, major ones.

    2. Are Toyota turning a profit?

    These two metrics must work together to get any meaningful data. Remember GM turned profits all the time, but they haemorraged market share at the same time.

    When Toyota starts failing, consistently, on either one of those metrics, then we’ll need to fire up the “deathwatch” series. Remember, one other thing. Toyota changed management when these calamities came to light. I don’t remember GM doing any such thing….

  • avatar
    FromBrazil

    Right on Mr. Edward Niedermeyer, though not often we see eye-to-eye on car related stuff, in this I, like you apparently, see the dangerous road of decline.

    FWIW, I have a dear friend who has worked for many years in the auto industry in Brazil. Fiat, then VW and now Renault. Of these 3 companies he had said that only at Fiat would he and he colleagues go to lunch and talk endlessly about cars. According to him at VW people actually asked you to change the subject if you breached cars at lunch. And at Renault it kind of a mix.

    My friend worked at VW at the height of its decline in Brazil, which may have something to do w/ what I said above. They’re now recovering and will fight all this year w/Fiat for first place.

    Anyway, I do believe decadence is evidenced by such small things. When a car maker decides it’s just too smart to be just a car maker…well the end is nigh!

  • avatar
    ash78

    On one hand, I do see what they’re doing, but it’s a message that really doesn’t need to be shared with the public like this. If they define themselves as “A company that builds cars,” then in 50-100 years when we’re all driving around in electric pods or trains, their mission will be futile. If they’re instead trying to broaden themselves into “We’re a company that provides individual transportation,” then I don’t think the image of a hollow Prius and two people walking conveys that very well.

    That’s more like “Toyota: Hope you’re ready to hoof it”

  • avatar
    geeber

    Maybe Toyota management is preparing for the day when the company has to pull a “Studebaker” move.

  • avatar
    mcs

    Honda uses almost the same line. “HONDA HAS LONG CONSIDERED ITSELF A MOBILITY COMPANY, BEYOND AUTOMOBILES AND MOTORCYCLES.” That quote is located on on their HondaJet web site. http://hondajet.honda.com/default.aspx

  • avatar
    ZoomZoom

    I agree with Cammy’s points.

    Also, I wonder what does Mr. Karesh have to say about the reliability metrics?

  • avatar
    ClutchCarGo

    As to the Smith/Toyoda-san quotes, anyone who believes that a corporation is in business to do anything but make money is a fool or worse. Corporations exist for the sole purpose of creating wealth. Any corporate leader who fails to understand that point is guilty of misfeasance. Now a corporation can fail to understand how it can best create wealth for shareholders, even believe themselves nearly incapable of failing to do so based on their market position, but no corporation exists to make cars, or anything else. What they make is purely a means to the end of creating wealth. There is no higher calling based on human aspiration or morality, simply a matter of providing products or services with the greatest possible spread between selling price and production cost. Corporations that fail to use any and all legal means to maximize shareholder wealth are cheating the shareholders. And thanks to the US Supreme Court, they can now buy the govt they need to facilitate that effort.

    • 0 avatar
      ash78

      I agree there’s an element of splitting hairs. But I do feel there’s a philosophical difference in the Smith/Toyoda comments:

      Smith’s comment comes across as a short-term, make money at all costs and finish the quarter/year strong! Toyoda’s comments indicate a long-term view.

      They’re saying the same thing, but one of them is more deftly crafted in its message and can speak to shareholders and customers both in a positive way.

    • 0 avatar
      ClutchCarGo

      Hair-splitting, perhaps, but those distinctions are very important. The classic example is that of companies at the beginning of the 20th century who thought they were in the railroad business instead of the transportaton business. As technology made railroads increasingly less important, the companies that failed to understand the difference found themselves failing to deliver to shareholders.

  • avatar
    carguy

    Since Toyota is the car company for people who don’t like cars – maybe this is the perfect campaign?

    Or maybe the “greener than thou” mimics oil company advertising which seems to suggest that they are completely beyond the whole oil thing and that hip young people approve of their business?

  • avatar
    YotaCarFan

    The “we see beyond cars” line at the end gives me the impression that cars are somehow bad and while Toyota has no choice but to build them now, they hope that a day will come that they no longer make cars. That doesn’t exactly make me want to run out and buy a car. Instead, I’ll wait until they start building green bicycles or sneakers and buy one of those.

  • avatar
    esldude

    The headline is misleading here on TTAC. It doesn’t suggest they are going to quit making cars or go on to something else. They mention zero waste plants, I assume the plants making the cars. They mention zero emmission cars. It in no way suggests they are beyond cars onto something else. Merely as a car company, they aren’t myopic to merely the car itself, but are aware and sensitive to the fact cars don’t exist in isolation. They exist in a changing world, which means being aware of those changes, Toyota will take that into account to build cars that fit with the times and the rest of the world within which they exist. Frankly, such an approach is something all the other makers better be taking. Otherwise the time will come when what they offer are truly like dinosaurs that don’t fit with the world they exist in.

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