Categories: Automobile

Toyota North America CEO Ted Ogawa manages enlargement amid manufacturing challenges

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Q: What do you view as your main accomplishments to date?

A: By way of product, I’ve a fairly constructive view [of where we are], together with the total mannequin adjustments. Sellers and prospects have proven robust confidence in our merchandise. Nonetheless, the availability chain is difficult, and the present drawback is manufacturing. I simply acquired again from a three-day supplier occasion in Miami, and certainly, they’re fairly assured.

We’re all the time saying to sellers, “Promote, promote, promote,” however they’re saying to us proper now, “Provide, provide, provide.” That signifies that the market itself is kind of robust; that is the constructive information. Nonetheless, we have to maintain the availability chain extra rigorously.

The place do the manufacturers stand at present? Let’s begin with Toyota: Past the availability constraints, is it stronger than it was three years in the past?

I believe our model itself is kind of robust, primarily based on nice product. Toyota particularly, we’ve got the fitting product and proper timing out there. Additionally as a result of provide scarcity, our residual values are rising, so these values are fairly excessive. These parts make the model stronger.

The place do you assume Lexus stands in contrast with three years in the past?

Lexus can also be fairly comparable. Prior to now, Lexus had a tough time about product cadence. Some years, Lexus would have two new fashions, then the subsequent yr, nothing. Prior to now two years and shifting ahead, Lexus could have an ideal product cadence: two or three new fashions per yr and particular editions. Lexus sellers are fairly assured, and that has been constructive.

What has been your greatest problem? Simply conserving the factories working?

For certain. After which to fulfill the velocity of electrification. That may be a large situation.

Let’s discuss electrification: Toyota has the bZ4X arriving and Lexus will quickly launch the RZ450e, plus there have been all of these different future fashions that had been lined up behind Akio Toyoda final yr. That is numerous product, however it’s additionally product that is not right here but. Is that irritating for Toyota and Lexus sellers?

From our conversations with them, sellers aren’t annoyed. Nonetheless, they’re asking, they usually preserve asking: How is your preparation for the BEVs of the long run? So we’re constructing our portfolio out for 2025 to 2030, to have an extended look into the long run.

Are there segments that you simply wish to get again into?

Sure, sure. The product lineup, particularly for BEV, is underneath dialogue. Nonetheless, we want a key BEV in every phase, Lexus particularly, with its extra prosperous purchaser. So possibly the electrification velocity is greater than that of Toyota. So, for Lexus, we’ve got to organize a full lineup of BEVs after which subsequent do the identical for Toyota.

Are conventional product life cycles nonetheless acceptable?

It relies upon. Tundra is an instance. We took a very long time [to redesign it], 15 to 16 years. Nonetheless, we have to focus on the fitting cycle to vary every mannequin, together with the powertrain. There isn’t any V-Eight for Tundra now, however a V-6 turbo and one motor hybrid. We’d like extra aggressive powertrains, [so updates and redesigns are] not solely about physique design.

Toyota made a transparent assertion about staying within the full-size truck enterprise with the Tundra redesign. How vital is the phase to your enterprise?

First, our core phase is the midsize pickup, Tacoma. As well as, we at the moment are wanting on the full-size phase, and Tundra and Sequoia are new weapons for us. Volumewise, we’ve got a robust [units-in-operation] and a wealthy historical past on this phase. We aren’t going to be the biggest on this phase, however we’re on the lookout for prospects that need one thing completely different than the [full-size pickups from the Detroit 3].

Ford has had some success over the past yr with a smaller pickup, the Maverick, which is far smaller than the current-generation Tacoma, however comparable in dimension to what the Tacoma was traditionally. Is there room in Toyota’s lineup for a compact pickup just like the Maverick?

It’s a good suggestion, however we aren’t centered on that. Latin America, for instance, has one of these product already. I am all for listening to what occurs [in that segment]. Nonetheless, presently, I believe Tacoma can cowl that space.

Wright here does the connection between Toyota Motor North America and Toyota Motor Corp. stand? Are the targets aligned, and is Toyota Motor North America performing because it must?

In fact, we’ve got very shut communication with the TMC facet. We attempt to relay the temperature of the market to TMC. Generally, we’ve got a spot and it takes time to erase these sorts of gaps, however I am making an attempt to [ensure mutual understanding]. Throughout COVID, in fact, we have had frequent Zoom conferences, much less in-person conferences, however the conferences are extra frequent because of this.

What’s the long-term outlook for BEVs? The shift is going on, however will it proceed to be gradual?

I believe the shift will certainly occur, together with rules and buyer acceptance. Nonetheless, no person is aware of the velocity of that change. We have to put together our greatest merchandise for the BEV lineup, and we’re making ready the lineup now. We’re additionally doing a multipath method — hybrids, plug-in hybrids, gas cells, BEVs. It is a good answer to cut back carbon, however BEV is coming for certain.

What does the transition to BEVs characterize for Toyota’s North American manufacturing footprint over the long run?

We introduced earlier the [$1.3 billion] funding in North Carolina for our battery plant, and we at the moment are considering easy methods to broaden that battery capability sooner or later. By way of our BEV lineup, that’s underneath examine to make sure that we’ve got the fitting lineup, and the very best plan to construct them.

As automakers race to develop BEVs, the stress on uncooked supplies is rising intense, elevating costs. Is the phase changing into value prohibitive?

It’s a very troublesome problem, together with the uncooked supplies. We now have much less expertise in BEVs in comparison with [ICE] automobiles. However we’re studying rather a lot.

Toyota has a protracted historical past of partnerships, together with holding stakes in Mazda and Subaru, in addition to cooperating with Tesla a decade in the past. Are these preparations vital?

I believe, as we talked about, Mazda and Toyota each have shareholder holdings basically, so on this sense it’s a typical variation. After which we’ve got a three way partnership [assembly plant] in Alabama. And naturally, joint initiatives with Subaru as effectively. However within the case of batteries, our battery plant is 100 p.c Toyota; nonetheless, there are various helps from Panasonic as effectively.

Is there room for extra, in your opinion?

Partnerships must be expanded, as a result of challenges forward. Additionally the challenges in autonomous as effectively.

Toyota has been within the crosshairs politically due to its lobbying and donations within the U.S. What’s the position of company political involvement?

My philosophy is that we must be good residents right here or good neighbors right here. So on this sense, politics, it ought to all the time be within the center. It does not matter if it is Democrats or Republicans, we must always all the time be within the middle. And when it comes to donations, we must always donate equally to each events.

You spent a while final yr lobbying Sen. Joe Manchin in individual on the Toyota plant in Buffalo, W.Va. Have you ever carried out a lot in-person lobbying? What’s the message you are delivering?

I’ve met with some secretaries and a few key authorities leaders to get their feedback and to make sure that they perceive what we’re doing and our targets. Our message is that we help rules, the electrification motion, and our contribution to the U.S. when it comes to jobs and funding.

When manufacturing ranges normalize, what do you assume the brand new regular might be when it comes to supplier inventories?

Earlier than the pandemic, supplier inventories had been 45 to 50 days; now it’s lower than 5 days. One thing between the 2 might be proper — maybe 30 days or much less.

Is Canada a gorgeous place for Toyota to take a position proper now?

Sure. We now have a robust relationship with Canada and the Canadian authorities. We now have the [Lexus] NX popping out of our Canadian plant, and we’re on the lookout for sustainable enterprise there.

Final yr, Toyota Motor North America completed because the No. 1 automaker when it comes to gross sales within the U.S. for the primary time. Do you need to take any credit score for that?

Being No. 1 just isn’t our precedence. We must be the very best firm for sellers and prospects. Akio does not say to me, “Congratulations for being No. 1.”

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