Managing Officer, Corporate Planning Division and Research Division for Toyota
Can you talk a little about the green initiatives Toyota has planned for the year ahead?
In our FY2011 five-year plan, we have initiated an activity of “The Fifth Toyota Environmental Action Plan” aimed at “establishing a low-carbon society,” “establishing a recycling-based society,” and “environmental protection and establishing a society in harmony with nature." We are currently addressing programs and specifying actions and objectives in Toyota’s corporate activity fields of development, which include design, procurement, production; logistics, sales, and recycling.
What business drivers prompted your company to actively reduce its use or production of energy, carbon, water, materials and/or waste? (For example, make money, save money, stakeholder expectations, business continuity issues, and competitive advantage.) How have these efforts impacted your top and/or bottom line?
We announced “Toyota Global Vision” in March 2011 to share our vision for Toyota and the path that we will take to reach that ideal with every team member. With regard to the environment, we specified our commitment – “with respect for the planet." Our aim is to reduce the output of carbon dioxide from manufacturing to sales, conserve material resources from recycling, and nurture human resources and afforestation activity in harmony with nature. This is our corporate social responsibility in manufacturing automobiles and we work toward creating “ever-better” cars through these activities. We know that profitability is the result of our efforts. Another benefit is that we've also succeeded in winning the hearts of customers and society. Through this, we are able to reinvest our earnings in creating “ever-better cars,” and by fostering this virtuous circle, we achieve sustainable growth.
Have your green efforts saved your business money? Where have you seen the most pay off?
Take for an example, our activity to pursue greater fuel economy by developing next-generation vehicles such as Prius. The project of the first-generation Prius hybrid vehicle kicked off in 1993, amid a high Japanese yen recession, after the collapse of Japan’s bubble economy. Our challenging goal was to develop a vehicle representative of the 21st century, having double “high fuel efficiency” and also 21st century marketing power. It was a high target goal and development challenge that we had to accomplish within a limited time frame. Our best answer to three essential sustainable mobility initiatives – “CO2 reduction,” “diversification of energy sources,” and “prevention of air pollution” – was the first-generation Prius, which we released as world’s first mass produced hybrid car in December 1997. Fortunately, the cumulative total of Prius sold worldwide has reached 3.1 million as of March 2011.
Last May, Toyota announced a partnership with Tesla. What are some of the green innovations coming out of this partnership?
By partnering with Tesla, we want to learn from Tesla’s venture spirit. Also, we assessed the needs of early EV introduction in relation to U.S. environmental and energy policies. We develop EVs internally as well, but Tesla’s EV system has unique features. For example, it utilizes household batteries. As a result, its technology holds greater potential. Additionally, we believe our joint effort can greatly contribute to the promotion and expansion of green vehicles because our partnership includes support of production and sourcing for Tesla.
Through the Prius, Toyota has become synonymous with hybrid. As more and more automotive companies adopt technology that is used in the Prius, how will you continue to evolve and improve the brand? What’s next in hybrid?
We have been focusing on fossil fuel as automobile energy sources, but the diversification of energy source is inevitable in terms of the future oil balance. Toyota positions its hybrid system as “a core green technology for the 21st century.” At the same time, however, many other technologies including alternative fuels are being developed, as we consider all alternative fuel technologies in regards to our hybrid system. For example:
- A plug-in hybrid, if a charging function is added.
- An electric vehicle in the case of no engine.
- A fuel-cell hybrid if fuel cell introduced.
Toyota will continue to develop every possible technology needed in order to realize sustainable mobility for future.
The earthquake and tsunami in Japan impacted virtually every Japanese business. What was your biggest challenge following the crisis? Did you learn anything vital from the experience?
Whereas 10 of our retail stores were completely destroyed by tsunami, our production facilities recovered in around 10 days, as they were not directly damaged, only affected by the quake. On the other hand, severe damages to our supplier partners and to petrochemical complexes caused a supply shortage of sub-materials such as semi-conductors and other materials, and we were initially concerned about our long-term massive production stoppage. Having engaged in reconstruction support, including the dispatch of team members to help supplier plants get back on line as early as possible (thanks to cooperation with related parties like Japan Automobile Manufacturing Associations, Inc.) we are now recovering faster-than-expected. We are presently considering countermeasures for the future, such as visualized supply chain management, generalized parts and materials, as well as dispersion of production sites.
We know you’ve made moves to change your reporting system and organizational structure following last year’s quality incidents. Can you talk a little about those changes?
Toyota views quality issues as an opportunity for renewal and improvement: We have encouraged every employee to address the issues proactively by re-examining and recommitting to principles such as “Customer First” and “genchi-genbutsu” (on-site, hands-on experience). First, we formed the “Special Committee for Global Quality,” and reviewed all the working steps – development, production, sales, and service – from the customer’s perspective, using a new interface to drastically reinforce the quality control system.
Then, we have newly appointed Chief Quality Officers (CQO) in every region of the world (North America, Europe, China, Asia, Oceania, the Middle East, Africa, and Latin America) to listen to a customer’s voice on the spot and to improve our working procedure. We will continue to make concerted and unified efforts to ensure quality as well as to achieve a higher level of safety.
Riki Inuzuka joined Toyota in 1982 and has filled numerous vital roles at the company. He is now Toyota’s Managing Officer in the Corporate Planning Division and the Research Division. He is a graduate of Kyoto University’s Faculty of Law.