Kazunari Kumakura, Purchasing Group Chief Officer

A single car requires around 1,000 chips of various types, ranging from brake control to navigation and audio. We can’t make cars if we lack even one of these.

Vehicle electrification and advances in automated driving make chips increasingly critical components

We asked our suppliers to stock three to six months of inventory in response to similar chip supply difficulties after the 2011 Great East Japan Earthquake. Even so, the current tight chip supply and strong demand make it very hard to maintain inventory and production.

We sense the supply situation gradually improving as chip manufacturers boost production capacity. However, supply is still unable to keep up with demand. We will continue working with suppliers to get production going.

One concrete measure will involve building up inventory to prevent impacts on production. We are also establishing strong relationships with chip manufacturers via parts manufacturers, and clearly communicating our manufacturing plans to facilitate smooth production.

Discussions within the Japan Automobile Manufacturers Association’s supply chain committee inform me that other automakers are in a similarly difficult state.

We will also communicate with other automakers and the Ministry of Economy, Trade and Industry to develop measures for improving the overall chip supply.

Masahiko Maeda, Executive Vice President

For us, carbon neutrality means eliminating carbon emissions from materials procurement, production, and driving.

We are pursuing various green technologies to achieve this goal, but such technologies become green only through widespread use.

How does a technology become widely used? It must be selected by customers. Different customers have different needs and usage environments. Therefore, I believe we should not limit our options at this point.

Toyota is developing a full lineup of vehicles as a result of trying to meet various customer needs around the world.

Europe, for example, has relatively abundant renewable energy. In such areas, battery EVs and similar options appear likely to spread relatively quickly.

Places like Brazil, meanwhile, already have cars running on biofuels made from sugarcane, available at prices 30% cheaper than gasoline.

As a result, bioethanol is currently the preferable choice for consumers in these regions.

We need to ensure that our products fit these different regional conditions and customer preferences.

From a policy communications perspective, the key question is: “How do we increase uptake?” To this end, we need to continue talks with regional policymakers to accelerate carbon-neutral options, including the parallel infrastructure development for BEVs and hydrogen-powered cars.

Takahiro Imura, Production Group Chief Officer

Toyota’s first priority in responding to an emergency is humanitarian aid, followed by regional recovery, and finally production restoration. On this occasion too, we will do our utmost to assist with recovery.

The current situation at Meiji Yosui has led to the suspension of operations at two production lines: the parts-producing Honsha Plant and the Toyota Industries Nagakusa Plant. Approximately 600 vehicles were affected.

We resumed plant operations alongside company-wide efforts to conserve water, such as encouraging remote work, closing cafeterias, and using well water as an emergency measure during unavoidable shortages.

To date, we have also worked to conserve water by eliminating water use in production and making continuous improvements, including water reuse in manufacturing. Our paint shops draw water only to wash cars as they come onto the line.

These improvements have enabled us to halve our industrial water intake compared to 20 years ago. The prospects for full recovery remain highly uncertain. Given that the agricultural water supply has stopped entirely, we will closely monitor the impact on the local community as we continue operations.

Mitsuru Kawai

I would just like to add that I commute via the Suigen bridge at Meiji Yosui Toshuko. It was always full of water, so I was shocked to see the riverbed when passing through on May 17. It brought back childhood memories of crossing the river over wooden planks.

I used to grow rice for a long time, so I understand that lacking water at this time of year is a critical situation. Watching the TV footage of planted crops withering and dried up fields that should have been ready for planting, it was truly heartbreaking to think of how the farmers must feel.

Currently, 162 temporary pumps deliver agricultural water once every four days. The industrial water supply is at 50%. In terms of how much industrial water Toyota uses, we are supplied by just 1% of the 162 pumps. We are eager to assist as much as we can.

Every day, I have a chance to see the construction work in progress. Steel plates and sandbags have been used to contain leaks, and water is allowed to flow naturally into the dam. We will also continue doing our part to restore the facility as quickly as possible.

Yoichi Miyazaki, Chief Competitive Officer

Toyota’s business is driven by the desire to deliver happiness to people in all countries and regions through mobility.

We believe that the first step in producing happiness for all is to deliver quality cars that fulfill the needs of our customers in a timely manner at an affordable price.

To this end, it is important for us to examine supply chains to ensure robustness for smooth production.

At the same time, the environment surrounding our day-to-day business is changing more rapidly than anticipated. In response, we are working closely with regional CEOs to enable us to react more swiftly to change.

Regarding our approach to business in individual regions, we will monitor the situation to determine the best course of action, without wavering from our focus on earning the understanding and support of our customers and other stakeholders worldwide.

President Toyoda often says that, in handling crises, “This is precisely when management needs to keep its cool.” If the higher-ups panic, the frontline members only become more uneasy.

It is also true that President Toyoda’s words and actions reassure Toyota’s global team and help them carry on.

Various risks exist, but we will continue to deal with them as appropriate.

Yasuhiko Sato, Japan Sales Business Group Chief Officer

In the period between last year and today’s shareholder meeting, we uncovered improper inspections affecting 7,000 vehicles at 39 outlets nationwide. These are legal violations that must not be allowed to occur.

To identify the causes, we are also visiting service facilities and outlets to hear how workers feel, their troubles, and concerns. These efforts are still ongoing.

One contributing factor was quick inspections, a service in which a car is inspected and returned to the customer within the hour. A one-hour turnaround time was regarded as a required target.

Continual improvement of standard operations through TPS was not adequately followed, even though it was necessary due to changes in cars and mechanics’ experience. We found a lack of continuous improvement and personnel development.

We also learned that this situation could have been prevented through closer coordination between the sales staff who make inspection appointments and the mechanics who service cars.

In reality, these genba had prioritized getting the job done over TPS, safety and security, and providing the quality that ensures customer peace of mind.

Dealerships are part of Toyota. We will continue working with dealerships to create better outlets that help to bring smiles to our customers.