News Article

Toyota Leading Industry Transformation

By Andrea Villar | Wed, 03/24/2021 - 10:00

You can watch the video of this presentation here.

Akio Toyoda, the current President of Toyota Motor Corporation, says the automotive industry is currently going through a transformation process that we will not experience again in the next 100 years. "To put this in perspective, you have to think that Henry Ford's Model T, which reinvented the sector and shaped it as we know it today, is more than 110 years old," said President of Toyota Motor Mexico Luis Lozano during the opening presentation of Mexico Automotive Summit 2021 on Wednesday, Mar. 24. 

“The world is in a permanent transformation. However, the pandemic has accelerated innovation in industrial processes from all sectors, including the automotive industry, where change was already underway,” said Lozano. In all industries, there are three drivers that can accelerate transformation in a significant way, according to Lozano:

  1. New consumer needs

  2. Business disruption

  3. Abrupt public policy changes with the potential to transform a society's reality

In the automotive sector, Lozano explained, the change in consumer needs is quite clear. “In many of the most developed markets in the world, young people no longer want to buy cars. I see it even with my children. When I was old enough to drive, any excuse was good to get my parents to lend me the car. Meanwhile, my children are not interested in driving,” he said. “There are changes in consumers that are more profound than what we can estimate now.” 

All industries today are threatened by disruption, Lozano added. But crises have been a driver for change at Toyota. “We have grown stronger and learned from them (crises). The most severe crises we have suffered in recent years, such as the Fukushima earthquake, were crucial because they broke many value and supply chains,” he said. “It made us question the way we operated in Japan.” 

Today, Toyota is also going through a profound transformation, said Lozano. "We want to move from being an automotive company to being a mobility company. When people can move anything is possible," he continued. The company will focus on developing new products and solutions centered around Connected, Autonomous, Shared, Electrified (CASE) technology. 

When it comes to electrification, Toyota has high aspirations. By 2025, the company plans to have an electric version of every vehicle in its lineup. By 2030, it aims to generate most of its revenue from EVs. Meeting these goals and achieving this transformation, Lozano said, is not just Toyota's job. “There are non-traditional partnerships in the automotive industry that are needed to achieve our CASE goals. We have, for example, partnerships with Uber, Microsoft and even a joint venture with an air taxi company.”

Annually, Toyota produces 10 million vehicles at 53 manufacturing plants worldwide.  Fifteen of them are in North America, 10 in the US, three in Canada and two in Mexico. In addition, Lozano highlighted that the brand markets the world's best-selling car: Corolla. “Toyota has the world's best-selling electrification technology, embedded in the Prius model.” 

Mexico’s challenge in facing the industry’s transformation will not be minor. According to Lozano, comprehensive public policies are required. “It is not only necessary for companies to be convinced of this transformation and to invest resources. We are all part of this transition and we must help to convince our governments to implement comprehensive public policies in terms of time and content.” 

“Many governments are prone to imposing regulations without thinking that this is only one part of public policy. The most comprehensive and successful public policies in the world also involve infrastructure and incentives,” Lozano pointed out. “We also have to make sure that the electricity being generated in the country is produced by renewable and clean sources. There is no point in having electric vehicles if that energy comes from non-renewable sources.”

“Toyota understands its role in the innovation of the future and knows that this transformation will bring many benefits. We continue our commitment to contribute to the communities where we operate. We want to move forward with a vision for the future,” concluded Lozano.

Andrea Villar Andrea Villar Journalist and Industry Analyst