As part of ongoing coverage on Toyota Times of the 116th Ordinary General Shareholders’ Meeting held in Japan on June 11, the editorial team here has chosen to focus on one more question and response from the Q&A Session of the meeting. The following was the last question asked, which focused mostly on the impression the shareholder had that Toyota was forecasting a profit for the current year where its suppliers and dealers had not issued similar guidance. The shareholder was concerned about how the other companies might take Toyota’s “winning” forecast.
What I want to ask is that even amid the recent impact of COVID-19, Toyota has firmly forecasted a profit of 500 billion yen for the current fiscal period.
That is something that is extremely happy news for shareholders. But, on the other hand, the present situation is that your suppliers and dealers are not able to extend their profit along the same lines.
I wonder if the various companies may harbor any dissatisfaction with Toyota as the only winner. Please tell me how Toyota thinks about this point.
After carefully considering each word from the shareholder’s question, Akio first ventured to confirm his understanding of the question and provide a brief response:
I think you are wondering whether our forecast was possible because of dissatisfaction endured by the companies that make up our suppliers and dealers. However, we are doing our best together with our suppliers and dealers, so I would like to ask that you rest assured.
After his initial response, Akio then asked the two operating officers in charge of “suppliers” and “dealers” to offer a more in-depth response. While these responses will be introduced later in this article, first, the editorial team has chosen to focus in on an additional scene where Akio gave a powerful response.
I heard the phrase, “Toyota will be the only winner”. I would like to ask what people think would happen if this country had no winners at all.
And if a company becomes the only winner, what would that company use the value of being the only winner for?
I believe that the current Toyota does things not for itself but for the world and for those who regularly support it, and I believe that we are being reborn into a company that can apply the strength of doing things for others.
I feel that if there is not even only one winner, this industry cannot be supported, nor can this country.
We wouldn’t even be able to support our desire to make our production plants the best in town, which Toyota is aiming at.
We are facing a very challenging time…
It is especially because we are in challenging times that I humbly request our shareholders’ understanding of our aspirations, as well as ask for their continued kind support.
Currently, it has been said that the automobile industry is facing a once-in-a-century period of profound transformation. Now, this critical time is also being overlapped with the COVID-19 crisis.
Even doing just a quick review of the speeches that Akio has given since the start of this year (2020), he has frequently used phrases such as “survive” and “survival” in describing the era we are now in.
<Akio’s remarks at the National Toyota Dealership Representatives Meeting in January 2020>
We have reached a time that we have to survive somehow.
Dealers need to survive…Toyota Motor Corporation has to survive…
The Japanese automotive industry has to survive in the world…
We want to share our thoughts of “what kind of world we want to make,” and make real friends…
We are unable to survive if we cannot do that.
This winter is also continuing on the economic environment as well. It could be described as a pretty harsh winter. If you can survive, you will see spring. If the automobile industry survives, it will have a connected impact for many people.
As an industry, I believe we have the tenacious DNA that will help us to survive, so we should do all we can to survive!
The question the shareholder asked was about winning. But what does winning or losing mean for a company?
That is something that may not be so clear.
Regardless, the point that Akio has emphasized is that first, more than anything else, there is a need to “survive”.
But he doesn’t stop there. Akio continues in those messages to remind those listening that those who survive should put their strengths to good use for the benefit of people in society.
Without doing so, it would not be possible to survive together.
In other words, even those that might have survived can’t really continue to survive.
So, to return to the point, Akio has taken time to repeatedly and emphatically explain and reinforce the meaning of “being the only winner,” especially as it applies to challenging times.
The executives in charge of purchasing and domestic sales clearly share the same understanding and feelings as Akio, as they responded in the same way. In fact, their answers conveyed the company’s desire to and importance of what it means to “survive together” with the suppliers and dealers, and how it is by doing so that they will ultimately “revitalize the country together.”
<Operating Officer Masayoshi Shirayanagi>
We are aware that the revenue of our suppliers has been in an extremely severe situation due to market declines in Asia and China that started before COVID-19, as well as due to tough competition with local manufacturers.
On top of that, even while dealing with the current COVID-19 situation, our suppliers are making endless efforts to respond to CASE and to invest in the future.
Even during the COVID-19 catastrophe, for measures for the medical front lines and toward the waning of the virus, they are engaging in various initiatives that will enable them to turn challenging situations into opportunities. For this we are truly grateful.
We, too, are making efforts at closer communication with our suppliers during this time. While taking advantage of online tools, we are working to grasp the problems facing our more than 400 first-tier suppliers, and, through them, the problems faced by our more than 10,000 second-tier suppliers.
Specifically, in addition to financing, we are also assisting them in the form of production support and by adjusting delivery dates. Our communication with them also includes our asking them for help in the production of the medical face shields we are producing.
When it comes to second-tier suppliers and beyond, especially third-tier suppliers, it is very difficult to grasp their situations, and we realize that we are not having them speak up enough. In any case, we are an industry that is able to exist thanks to the support of our greater-than-30,000-strong, broad-based supply chain and suppliers. We were able to forecast a profit thanks to the hard efforts of our suppliers, for which we are truly grateful.
So that we, Toyota and the automotive industry, can serve as a driving force for economic recovery following the COVID-19 pandemic, we intend to do everything we can to firmly maintain our supply chains, human resources, technologies, and foundations of production, which we must protect.
<Operating Officer Yasuhiko Sato>
Earlier, we heard President Toyoda say how he would like to cheer up Japan by way of the automotive industry. First and foremost, prioritizing the safety and security of our customers by using face masks as well as through sanitization and practicing social distancing, our dealers are doing their best to listen to the problems our customers and local communities are facing.
In cases in which a customer needs a car but is having trouble keeping it financed, dealers are slightly extending payment dates.
Or, in cases in which a person needs a car but cannot afford a new vehicle, dealers are offering preowned rental vehicles. Although I think there are customers who wonder if it’s even still OK to buy a car, our dealers, while listening to the problems of their customers and local communities, tell us they want to move forward in an energetic and cheerful attitude. By all means, with everyone’s understanding, I would like to do my best working together with our dealers.
With this article, the series on the Q&A Session is concluded. However, there still remains one more article in the coverage of the 116th Ordinary General Shareholders’ Meeting that will be covered next on Toyota Times. That article is “Akio Toyoda Sheds Tears Thinking About Pain and Gratitude Over 11-Year Term.”