Automotive News Europe - December 2017 - Talk from the Top Supplement - 35

AUTOMOTIVE NEWS EUROPE

TALK FROM THE TOP

of a task force to find cost savings. Is
that accurate?
Competitiveness cannot be based just
on cost savings. As I often say, I never
see anybody jumping on the table to say,
"Yes! My boss asked me for 20 percent
cost savings." Of course, cutting costs
is a must in the organization, but if you
start by talking about cost savings -- like
many companies are doing -- you will
never succeed. If you think about how
to create passion and a fighting spirit for
the future, the cost reductions will be
the result of those actions and not the
target. When you strongly motivate your
workers, there is high potential that they
will come up with 25 percent cost reductions by themselves.
In Europe, Toyota's sales growth
has been well above the market average. What do you attribute that
to, and what are your sales targets
for this year?
We have three criteria for steady and
sustainable growth in Europe. One, we
have developed a strong differentiator
with our hybrid technology. The second point is new products, such as the
RAV4 hybrid, the C-HR [compact crossover] and the new Yaris. The third is
that we continue to make a lot of effort
to attract more and more customers
through product appeal and customer
service. We should remain modest -our market share is still between 4.5
and 5 percent at the pan-European
level, but we are in the top five in half
the countries we cover in Europe. This
year we plan to sell 975,000 units [in
Europe, which includes Turkey and Russia] which is better than last year when
we sold 928,000 units.

from Europe because they lost money
for years. We are not losing money. Over
the past few years, our profitability has
been at 3 to 4 percent at the pan-European level, which is much lower than in
the U.S. However, you don't see [highmargin vehicles such as] Tundras, Highlanders or Tacomas on the streets here.
Competitiveness also means what is our
profitability versus others, and clearly
we are not so bad. But you're right, this
is not at all our most profitable region in
the world. Nevertheless, this is a region
where we battle many strong companies
and in many ways it is the heart of the
global automotive business.
Are you satisfied with Toyota's production footprint in Europe?
Yes. Seventy percent of what we sell in
Europe is produced in Europe. Our logic
and strategy for our manufacturing activity is the following: When we establish a
plant, we make sure we achieve at least
the same level of quality as our factory
in Japan. That means the Yaris produced
in Valenciennes [France] is as good as
the Vitz produced in Japan. Then we create a strong kaizen spirit, we involve the
workers to make sure that they bring
new ideas and innovation to improve the
performance of their factory. Our factories outside Japan are often benchmarks
in terms of the way we manage people
and our relationships with unions. One
of the big challenges for the UK plants

now is how to stay competitive after
Brexit. We trust the British government
to remain open, but if it cannot succeed
in [establishing] free trade with the EU27, it could be severe for the UK. At the
same time, we believe that in our UK
factories in Burnaston and Deeside, the
workers' motivation is extremely high.
They demonstrate every single day that
they have a lot of ideas, a lot of kaizen,
a lot of proposals to improve the performance of the factory. We trust them and
we really expect that we will be able to
stay competitive in the UK.
New French President Emmanuel
Macron wants to change the French
work rules to make it easier to hire
and fire and provide employers with
more flexibility. What would you like
to see from that effort?
Everything that can make manufacturing in France more competitive is, of
course, more than welcome. But this
kind of change will succeed only if it's a
win-win between companies and workers. Companies will have more competitiveness versus what is happening
in the world and at the same time many
French citizens will find a new job. This
is what I call a win-win. It will be challenging, but I think President Macron
has very good ideas and a strong desire
to change the country. The key thing
now is to make it happen. ANE

What prevents Toyota from making a
big leap in market share in Europe?
We should be realistic -- if you look
at Japan, 75 percent of the market is
covered by four brands. In the U.S., six
brands account for 75 percent of the
market. However, in Europe the first
75 percent of sales is covered by 13
brands. If you expect us to be like we
are in the U.S., at around 14 percent
market share, or in Japan, at 47 percent, this does not exist. No individual
brand is at this level in Europe.
Despite steady and sustainable sales
increases, Europe has not necessarily been the biggest profit center for
Toyota. Why?
Some companies have disappeared

2017

In Partnership with

Strong demand for the C-HR small crossover helped Toyota boost its European market share to 4.4 percent in the first half from 3.9 percent during
the same period last year.

www.autonewseurope.com

http://www.autonewseurope.com

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