After a less-than-stellar sales performance in 2010, Toyota had high hopes coming into last year. Unfortunately, natural disasters in Japan and Thailand rocked the company’s global manufacturing and supply chain forcing the suspension of overtime and Saturday production at all of its North American vehicle assembly plants in November.
Now with all of its parts and vehicle manufacturing problems sorted out, Toyota Canada is looking to rebound with a strong retail performance in 2012.
To the point, Toyota Canada recently named Seiji Ichii as president and chief executive officer of Toyota Canada Inc.
Ichii, 54, has worked in a variety of roles for Toyota dating back to 1981. After just a few weeks on the job, he took time out to chat with Canadian AutoWorld about his volume targets, the dealer body and how Toyota plans on adding a little flavour to its lineup.
Canadian AutoWorld: As new president, what are you immediate plans for Toyota Canada?
Seiji Ichii: For 2012, I want to bring this company back to where we used to be. I don’t know how we measure it, but in terms of volume, I am challenging our dealers and associates to hit 200,000 units. That’s the benchmark for us.
I know it’s not going to be easy, but with the supply situation back to normal and all our global plants in full production, there is a good opportunity to hit our target.
Does that number include Lexus and Scion?
That’s 38,000 more than 2011 and 28,000 more 2009.
Our sales total in 2011 was mainly disrupted by the supply shortage. Now with supply recovered, I think we can move back to that level. In fact, if we take our sales rate over the last three months of 2011 and apply that to an annual timeline, we would hit over 197,000 units. We are on track.
How do you expect to hit that target? More incentives? More media expenditure?
We expect the majority of that number to come simply from the fact we have sorted out supply issues that set us back last year. We also have 18 new models in the coming 18 months combined across Toyota, Scion and Lexus. We are in a good spot for product.
Toyota production around the world was battered by natural disasters in Japan and Thailand last year. Describe the shape of the global supply chain.
It is pretty much back to normal. The supplies to our assembly lines have returned to normal and our supplier base has worked very hard backing up their product production in other areas. I don’t have much worry about supply.
You have traveled extensively in Canada meeting with dealers since you started your new position. What are they telling you?
I have visited Montreal, Toronto, Vancouver, Calgary and will be in Halifax soon. I feel you have to hear the voices of the dealer before you can make good decisions. One of Toyota’s core philosophies is the customer is number 1; the dealer is number 2; the manufacturer is number 3.
The customer is always the most important, but dealers are also very important and we really value their partnership. In general, dealers have been quite positive with supply coming back and 2012’s sales potential. They have told me I came in at the right time. I hope that’s true.
Any plans for the dealer network? Growth? Reduction?
I don’t have any major plans to change direction of our dealer body. We have enough dealers right now. Our dealers have invested a lot to prepare for growth so they are in a good position for the future.
How do you improve dealer profitability?
As a manufacturer, our main job is to provide attractive product to our dealers. Whether it’s the attractiveness of the product or the efficiency of supply, it is our main goal.
Now with supply fixed and so much new product coming, the desire of our global president, Mr. Toyoda, is to add some emotional factor to our products. Toyota has been famous for good quality and reliability, which will not change. But I am hoping the cars from now on will have some more flavour, aesthetic appeal and be fun to drive.
We have seen some style hints recently with the Lexus LFA and the LF-LC.
And not only Lexus, as you can expect that to happen with Toyota and Scion as well.
After nearly a year-and- a half in the Canadian market, has Scion been as successful as Toyota Canada had hoped?
Scion has been successful because we are attracting the customers we had targeted: the young people who had never considered a Toyota before. Scion has definitely been adding value to the Toyota brand by bringing in new customers.
What about its volume?
Volume has never been our number one priority. The goal with Scion was to expand to customers we thought it would have been difficult for Toyota to cover. Scion is doing that.
The value of the yen has been hampering profits for Japanese automakers for years. How is Toyota Canada getting around that?
Roughly 20 per cent of the Toyota vehicles sold in Canada come from Japan. Roughly 50 per cent come from Canada at our Cambridge and Woodstock facilities and approximately 30 per cent comes from U.S. manufacturing plants so we are pretty much cushioned against that.
A lot of people think we have to import over half of our vehicles from Japan, but we make the majority of our vehicles here.