By on February 22, 2011

What ever happened to the fabled Japanese job security? Instead of kaizen (continuous improvement), there is continuous change. A week ago, The Nikkei [sub] predicted that Toyota will cut its sprawling board from 27 members down to a more manageable 10-15. The announcement will most likely come at a press conference on March 9. The announcement hasn’t even been made, and Honda is already following suit by reducing its number if suits.

Honda said today it will prune its board to 12 members from currently 20. The idea is to speed up decision-making, says Reuters.

The shake-ups will filter down to the ranks. Also on the 9th, it is expected that Toyota will announce that it will shift 100 of its roughly 1,000 domestic sales personnel to emerging market work.

The reassigned staffers “will work out of Japan for the time being, making trips to local markets as needed.” They are supposed to light a fire under emerging market sales.

“Toyota enjoys a nearly 50 percent market share in Japan but has lagged behind foreign rivals in emerging countries,” says a a finger-wagging Nikkei. “In Brazil, which overtook Germany to become the world’s fourth-largest auto market in 2010, its share amounts to just 3 percent. And in China, now the world’s biggest auto market, it has a share of 7 percent.”

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10 Comments on “Toyota And Honda: All Shook Up...”

  • avatar

    Oh how the mighty have fallen. It’s easy to be bold, when times are easy.

    • 0 avatar

      Toyota is acting boldly right now as they undertake the actions cited in the article.

      Being complacent when times were good, that describes GM, the unions and Detroit politicians perfectly. So now they have a slogan and a demolition plan for decayed buildings; bold moves 30 years after the fact.

  • avatar

    I guess they don’t want to follow in GM’s foot steps and are taking action to correct it before they become a ward of the state.

  • avatar

    What goes around, comes around. There’s a cycle for everything, and Japanese auto makers are no exception. Yes, they showed a better way to build a car and made it more efficient and reliable – years ago – but now? Things have changed. Globalization has changed the world so much that all industries are affected, even the fabled Japanese way of doing things. If they’re going to succeed, they have to adapt as well. Socially, I think the Japanese mindset is fairly intact, although Westernized as far as personal selfishness and individualism goes, and that does have an effect. They’ll be O.K. Here – we have to worry about GM, Ford and Chrysler even surviving for the long term. Ford is definitely showing some serious cracks that TTAC hasn’t fully dealt with yet.

  • avatar

    Paring down board of directors seats at Japanese companies is definitely a necessity.  They hand those out like candy in Japan, and it sinks the entire company into more unneeded bureaucracy.
    What the Japanese automotive industry needs is quite simply consolidation.   Toyota and Honda especially operate on completely insular corporate culture that doesn’t take the opportunity in striking partnerships with rival Japanese companies.
    Honda in particular is guilty of this, they have strong sentiment of staying ‘independent’ even when lucrative platform sharing opportunites exist.  This is best seen in their Acura brand, which only has relevancy in the North American market; the few places the brand exists.  It would have made sense for them to partner with a rival Japanese partner (Nissan or Toyota) for a source of a RWD or V8 to flesh out their line up.  Nissan in particular, which also has difficulties meeting economies of scale for their luxury cars, has been long seeking some partner before they paired with Daimler.  Stated simply, Japan’s resources and R&D talent are being split into 8 different car companies, all of which refuse to cooperate with each other, the US focuses on 2-3, and S. Korea essentially Hyundai.
    And the positive side, while the yen is still strong and the global economy still weak, its a cheap time for the Japanese to expand into emerging markets.  As it stands, while volume is large in those countries, profits aren’t.  It would have been detrimental for the Japanese companies to have invested when the yen was weak and before the global economy crashed.  As the recent article here on the new Toyota plant has shown, the future is about more small cheap factories in various countries that is able to navigate global politics and currencies, rather than expensive mega-factories centered in a manufacturing hub.  Its no coincidence that this change in philosophy is accompanied by renewed expansion in emerging nations.

    • 0 avatar

      “Stated simply, Japan’s resources and R&D talent are being split into 8 different car companies, all of which refuse to cooperate with each other, the US focuses on 2-3, and S. Korea essentially Hyundai.”
      Hmm. Iam not that familiar with the Korean automakers, but I still can tell, besides Hyundai-Kia, there are Samsung (owned by Renault, or so I think) and Ssanyong. Yeah, that one dumped by Chinese SAIC, now being bought by an Indian automaker, I think.

    • 0 avatar

      Samsung isselling Nissan-Renault vehicles in S. Korea.  I remember being driven around in a in what was Samsung version of the Nissan Bluebird a few years back when I went to Seoul.
      Ssangyong are part of India’s Mahindra, Samsung part of Renault, and Daewoo part of GM.    But essentially Hyundai-Kia is where South Korea’s focus is at, and they have 80% of the market to prove it.

  • avatar

    Sounds like Japanese boards of directors actually decide stuff, instead of being a rubber stamp for management, as some say is the case in this country.

  • avatar

    I have a small problem with Bertel, I’m sorry to say. Basically everything he reprints comes from Nikkei. But that is like learning about business in America by reading Bloomberg, while ignoring Wall Street Journal and Investors Business Daily. Also, cars are not just about the business. Is there anything there interesting that Mainichi Yomiuri and Asahi Shinbun publish about cars? Or heck, whatever new media Japan has?

    • 0 avatar

      In fairness, most blogs just reprint stuff from Automotive News (which requires a subscription).
      Nikkei, for what its worth, is more WSJ than Yomiuri or Asahi and are much more influential (you know the Japanese auto execs have heard the recent criticisms).  Most folks don’t want to bother paying for the subscription price of Nikkei outside of Japan so only Bertel covers this stuff.
      Also, as someone with subscriptions to Nikkei myself (along with every other publications), they are excellent and easily to the level of WSJ & FT.  Great analysis, good technical staff, lots of inside info, and really much better than Asashi and Yomiuri.

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