For Toyota, people will be the centre of the future

It is difficult to believe that Akio Toyoda is 63 years old.

The President of Toyota Motor Corporation was the epitome of energy at the Tokyo Motor Show here on Wednesday as he held forth on some key issues during his speech. It was a buoyant setting at the company’s pavilion which was packed with people listening keenly to its President.

It is only too well known now that Toyota is positioning itself as a mobility company and is keen on driving home the fact that it has moved on beyond just being a manufacturer of cars. In his turn, Toyoda has been implementing some remarkable changes within the organisation especially in the area of human capital.

Moving toward automation

In this backdrop, his talk on Wednesday (in Japanese and translated into English) was significant because he spoke of the importance of people. “Society today is rapidly advancing toward automation, such as in the form of artificial intelligence and robotics,” said Toyoda in his speech.

At the same time, he continued, concerns such as “might the day not come when robots dominate people”? were being voiced. Just how should Toyota respond to such changes in the times, its President wondered as everyone listened intently.

“I think a hint can be found in the history of our predecessors,” said Toyoda while referring to the famous Toyota Production System (TPS). The Japanese automaker’s roots “are found in the automatic loom invented by Sakichi Toyoda” and the greatest trait of that invention was that, if a single thread broke, the loom would automatically stop.

While that helped prevent the manufacture of defective products, the more important part was that it was based on the thinking that “we shouldn’t turn people into machine watchers”. Within Toyota, this is termed ‘automation with people’ or ‘intelligent automation’. It was to this intelligent automation that Kiichiro Toyoda (who took up the challenge of producing automobiles) added the “make only what is needed, when it is needed, and in the amount needed”.

On Wednesday, his grandson explained that this meant “being just a bit ahead of the expectations of our customers”.

According to Toyoda, this was the ultimate in manufacturing omotenashi (hospitality that sincerely and warm-heartedly anticipates and fulfils people’s needs). What the two pillars of TPS, intelligent automation and just-in-time, have in common is placing of people at the centre.

“And that’s exactly why people will continue to be at the centre of the future that we envision. I believe that the more automation advances, the more the ability of human beings will be put to the test,” reiterated Toyoda.

This, in turn, was the underlying message sought to be conveyed at the Toyota pavilion where the concept of ‘people connected’ speaks of a society in which people are linked and where their warmth and kindness can be felt.

“Toyota believes in the power of people,” said its President, clearly an important message especially during a time of rapid automation where companies across the world are looking at substituting manpower with machines.

From Toyoda’s point of view, when various kinds of information are linked, one would expect communities, society, “and, of course, cars” to become more centered on people. “That’s why we made our Toyota booth this time one in which visitors can experience a future society of mobility centered on people,” he said.

e-Palette launch

The e-Palette, scheduled to debut at the Olympic and Paralympic Games Tokyo 2020, is a case in point. “In the future, the e-Palette will be able to be an office, shop, or even a hotel. It will be able to become various kinds of services, and it will go to people,” said Toyoda.

In fact, the Toyota booth at the Tokyo Motor Show is largely about forms of mobility “that link to society and communities and that provide modes of getting around and services to people”. Does this mean that cars would end up not being owned, asked its President even while he promptly answered, “I certainly hope not!”

He then went back over a century ago and referred to the time when the birth of the automobile led to “15 million horses being replaced by cars in the US”. Yet, the world today continues to have racehorses.

“The joy of riding a horse can hold its own against or even outdo what cars have to offer. If there is an obstacle, a horse can avoid it. If there is a hole in the ground, a horse can make its own judgement and jump over it,” elaborated Toyoda. Horses can communicate with people and their hearts. For people who ride them, horses are irreplaceable. “Through the evolution of artificial intelligence, I think that cars, too, can also become able to communicate with people and their hearts,” he said.

Simply put, the cars of the future would be like horses. “If we look at shared forms of mobility, such as the e-Palette, as if they were horse carriages or forms of mobility owned by individuals, like the e-RACER, would be beloved horses,” said Toyoda.

Effectively, this means that the future society of mobility will be one in which horse carriages and beloved horses coexist. And what people want of beloved horses is “heartfelt communication and the joy of moving together”.

Future mobility

Yet, even as Toyoda held forth on the future mobility landscape, his company has been pulling out all the stops to ensure that it is well placed to take on these challenges. One such initiative has been in the area of partnerships/alliances keeping in mind that two heads are better than one especially in a world where uncertainty is the name of the game.

After all, who would have envisaged till not-so-long-ago that the two most powerful countries of the world would lock horns over a bitter trade war that has the potential to be truly disruptive. Likewise, Brexit is a threat that looms large as the UK breaks away from the European Union and there is still no clarity if a deal will be struck much to the anxiety of automakers worldwide.

While geopolitical tensions have been on the rise, there is also uncertainty on oil prices with the added worry of a host of powerful nations in the grip of a slowdown. The automobile industry also has its work cut out in coping with far stricter emission norms and the recent obsession with electricity where profits could nosedive depending on which way the winds blows, especially on input costs.

It is here that Toyota has forged some interesting tie-ups as in the case of Suzuki for markets like India where the latter has a much larger presence. Toyota, in its turn, has the scale and competencies to help out Suzuki where the duo will look at other geographies like South Africa and West Asia.

Banking on Daihatsu

For the ASEAN region, Toyota will bank on group company, Daihatsu, to take the growth story forward. Unlike India, where the potential is tremendous especially in the context of low penetration levels, ASEAN is reaching a stage of maturity in terms of age demographics and even growth prospects. Still, the skills of Daihatsu can be leveraged to grow the overall Toyota presence even further in this part of the world.

Mazda will be the partner for North America where the challenges are completely different from ASEAN and India. Though no details have been specified yet, it would be fair to assume that there could be some interesting technological initiatives in the Toyota-Mazda partnership.

Back home in Japan, the company is gearing up for the Olympics next year where it will put its best foot forward in offering comfortable mobility solutions for participants and visitors.

The idea is to clearly drive home the fact that Toyota is sticking true to its word of being a mobility company.

Beyond that, there is every likelihood that some of the solutions could just end up finding longer term applications in the Japanese landscape. After all, the challenges of urbanisation are true for Tokyo as they are in Beijing, Mumbai or Los Angeles.

Further, with youngsters not keen on car ownership and preferring to go in for ride hailing options instead, companies like Toyota are gearing up to face this new world of renewed mobility priorities. It is in this context that Akio Toyoda’s speech at the Tokyo Motor Show is ample food for thought.

The writer is in Tokyo at the invitation of Toyota

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