Toyota to scrap full product lineup until return to profit: Toyoda+

TOKYO, June 25 Kyodo -
Toyota Motor Corp.'s new president Akio Toyoda, a member of the founding
family, said Thursday that the automaker will abandon for now its cornerstone
policy of offering a full product lineup and focus more on local market needs
to return to profitability.

Toyoda also said the company, which is anticipating a second straight year of
deep losses, will aim to return to the black by the year ending in March 2011.
''This is really a start from rock bottom,'' Toyoda said at his first press
conference since taking over the top post on Tuesday.
''We will determine the areas where we need to push forward and the areas where
we need to withdraw,'' he said without elaborating.
Immediately after his appointment, Toyoda assigned four of Toyota's five
executive vice presidents to take charge of specific regions including Europe,
North America, Japan and emerging countries.
''We built our product strategy on offering a full lineup in all regions,'' he
said. ''We would like to continue, but we have to wait on that in view of our
current strength and capability.''
Toyoda suggested that he intends to shift from the aggressive expansion
policies of his predecessors. Part of that shift involves reconsidering the
company's strategy of offering a rich lineup of products in different sizes in
all markets under the Toyota group, which includes minicar maker Daihatsu Motor
Co. and truck maker Hino Motors Ltd.
''It was certainly not wrong to expand our business in order to meet the needs
of our global customers,'' Toyoda said. ''But by overstretching we were not
able to employ Toyota's strength.''
Toyoda, the grandson of company founder Kiichiro Toyoda, was groomed early for
the top job after entering the firm in 1984, but he faces the formidable
challenge of guiding the world's biggest automaker out of a once-in-a-century
crisis in the global auto industry.
Toyota tapped a Toyoda family member for the first time in 14 years after it
fell into the red in the year ended March with a group net loss of 436.9
billion yen, a turnaround from a record-high profit of 1.72 trillion yen in the
previous year.
The company is anticipating a staggering operating loss of 850 billion yen for
the current business year after recording its first loss in 71 years in fiscal
2008.
''Tough conditions are likely to continue for the next two years,'' Toyoda said.
''We will take every possible measure'' to avoid sinking into the red for three
consecutive years through March 2011, he added.
Toyoda also said he will return 30 percent of his monthly salary for a year
from July to take responsibility for the company's dismal performance.
But while many industry observers saw Toyoda's organizational change as a cue
for a departure from a U.S.-focused policy, he emphasized that the North
American region will continue to be a key market that will form ''the pillar of
Toyota's overseas strategy.''
But he added, ''There will be changes to the market structure, which formerly
focused on large-sized cars.''
On the domestic market, Toyoda said the company is studying establishing a new
marketing company to better meet local customer needs.
Toyoda said he will continue to put resources into expanding the lineup of
eco-friendly cars, focusing particularly on gasoline-electric hybrids which
have provided a rare bright spot for Toyota.
The new, lower-priced Prius hybrid, which debuted in Japan in mid-May, has
already received domestic orders for 200,000 units, surpassing last week's
announcement of orders totaling 180,000 units.
Yasuaki Iwamoto, an auto analyst at Okasan Securities Co. who attended the
press conference, said Toyoda failed to provide specifics but added that the
general direction to create a leaner company was positive for Toyota's future.
''I wanted to hear more about how he is going to speed up the pace of reform
and what kind of priorities he has,'' Iwamoto said.
''But in a way, it was fresh to hear about withdrawal, a word Toyota has not
used before,'' he said.
In vowing to bring the struggling automaker back to a healthy state, Toyoda
often turned to the philosophy of his founding family, which emphasizes
manufacturing cars in a way that makes a contribution to society.
But even Toyoda admitted his roots will not make the daunting tasks ahead easier.
''I had no choice in being born with Toyoda as a surname. I will reconfirm and
boldly carry out what needs to be done and what I believe in,'' he said.
==Kyodo