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December 2007 - Strategy Magazine
Biz

The greener machine
Yoichi Tomihara incorporates the Toyota Way into his drive for environmental and sales supremacy

by Mary Dickie
page 17

Earlier this year, in a development that would have been unthinkable a few years ago, Toyota Motor Corporation topped General Motors in first-quarter sales, making it the world's largest automaker. Though Toyota's supremacy may not last - GM rebounded in the third quarter - it marked a major milestone for the Japanese upstart, ending seven decades of domination by the U.S. giant.

In Canada, while the rest of the auto industry is struggling, Toyota topped six years of growth with new sales records for both Toyota and Lexus in 2006. And the trend has continued through 2007: in November, Toyota Canada Inc. (TCI) announced that year-to-date sales were up 3.5%. While other manufacturers are closing factories, Toyota is building a new one in Woodstock, Ont., and it's even considering getting into the Canadian auto insurance business.

What's fuelling Toyota's success is no secret, just hard to emulate. A large part of the credit goes to a corporate philosophy called the Toyota Way, which emphasizes constant improvement, intelligent research, open communication and the elimination of waste. Those principles underline the innovative worldwide Toyota Production System,which allows the automaker to produce high-quality vehicles in less time than its competitors, while creating less waste.

For Toyota, that ties in nicely with the increasing demand for more environmentally friendly vehicles. It was a pioneer in the development of fuel-efficient cars back in the '70s, and introduced the world's first mass-produced hybrid car, the Prius, in 1997. Since then, it has sold more than one million hybrid Toyota and Lexus (the company's luxury brand) vehicles worldwide - and more than 16,000 in Canada since hybrids were introduced here in 2000. The emphasis on quality was rewarded at this year's Canadian International Auto Show, when the Toyota Camry Hybrid was named 2007's Car of the Year by the Automotive Journalists Association of Canada.

Environmental initiatives are a major part of what drives Toyota Canada president and CEO Yoichi Tomihara, who has been with Toyota since 1975, working in Japan and Germany in product planning, production management and sales and marketing before taking on his present position last February. Tomihara's personal goal is to increase hybrid sales to 10% of TCI's sales from the current 4% by 2010. He drives a Lexus RX hybrid himself, and is proud of his company's involvement in the Toyota Earth Day Scholarship, which helps cover educational expenses for students who have worked for environmental causes, and the Evergreen Learning Grounds program, which bankrolls the greening of schoolyards across Canada with the help of local Toyota dealerships.

In fact, getting his dealers involved in the community and invested in the Toyota Way is another priority for Tomihara. One way to do that is the Customer One program, which logs all service visits to Toyota's 240 Canadian dealerships and flags problems in an effort to improve the customer experience and lead to positive word of mouth and increased brand loyalty.

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