The power of collaborating to build a better tomorrow: Q&A with Toyota

Q&A with Toyota

How are your business and industry transforming? What are some of the major changes and trends you’re anticipating?

The current pace and scale of structural change in society and industry are unprecedented. Values and lifestyles are diversifying, while environmental problems and a wide range of social issues, such as urbanization, are growing more pronounced. At the same time, innovation is driving rapid technological development in areas such as information, intelligence, the Internet of Things (IoT), and robotics.

Today, Toyota provides customers with the value of mobility through cars. Going forward, in addition to evolving this value as provided through cars, we plan to expand it in the directions of social infrastructure and personal living.

Toyota aims to provide value related to social infrastructure by achieving zero life cycle CO2 emissions from its vehicles to help create a sustainable world, eliminating causalities from traffic accidents, and improving transportation efficiency through the combined transport of people and things.

We seek to expand the value we provide into the area of personal living by working to help all people move about freely and enjoyably and by providing services optimized to individual lifestyles.

Going forward, the costs associated with these technologies, such as those of enhancing functionality to meet needs related to environmental regulations, automated driving technology, and connected technologies may significantly impact our businesses. However, mobility services and connected services that utilize such technologies also present opportunities to create new revenue models. Based on this understanding, we believe that Toyota must now endeavor to both make ever-better cars in order to sustain and enhance the automobile manufacturing business, its current mainstay, and shift to new business models for the future.

To achieve the goals of our long-term strategies, we are developing human resources, revamping internal structures, and advancing business innovation while reinforcing alliances with a wide range of partners, including those in other industries. Looking at the enormous changes surrounding cars as opportunities, Toyota is steadily advancing toward the creation of a better mobility society.

How is your company innovating, and what has been the pay-off for those investments?

e-Palette Concept

Toyota’s earliest roots are in automatic looms. Back then, I doubt that anyone could have predicted that an automatic loom company would evolve to make automobiles.

Today, we are faced with a number of new rivals. We share with them the startup mindset of wanting to make the world a better place. Just as no one could have foreseen Toyota’s evolution, no one knows what businesses will give rise to the mobility of the future. What I can say for certain, however, is that the next forms that mobility takes will be created by those with an outstanding passion to make the world a better place.

We are confident that no one wants these things more than we do at Toyota. We also believe that we cannot build the future by ourselves. Having operated this long in the auto industry, working with vast networks of companies, we deeply understand the need for partners who share our aspirations. Rather than taking an adversarial stance, we want to form ties with a wide range of new partners to work with a shared passion to create the future.

Therefore, we are actively collaborating and allying with other companies and partners in other industries, chiefly in new business areas which include:

  • To create “Toyota AI Ventures,” a venture capital fund by Toyota Research Institute, Inc. (US)
  • To launch “e-Palette Concept Vehicle,” a fully autonomous, battery-electric vehicle with an open control interface
  • To launch “TOYOTA NEXT,” an open innovation program

These can significantly reduce costs and shorten the development period, compared with cases where only we develop it. 

Furthermore, in June 2018, we concluded an agreement with Grab Holdings Inc. to strengthen their existing partnership and expand the collaboration between Toyota and Grab in Southeast Asia to drive further advances in Mobility as a Service (MaaS) across the region.

By humbly learning from these new partners and combining our strengths, we are endeavoring to make the mobility society of the future better, looking 10 and 20 years down the line.

How are you creating a seamless customer experience, and what are the challenges to executing that vision?

Even as we move into new territories, like human support robots or car sharing services, there is something about cars, something quite special, something that any form of mobility should continue to inspire: and that is freedom…because when people are free to move, anything is possible. Automated driving is a key technology to realize “Mobility for All.”

Since the 1990s, Toyota has engaged in automated driving technology research and development aimed at contributing to the complete elimination of traffic casualties. Today, Toyota is advancing development in this area based on its Mobility Teammate Concept. This concept is an expression of Toyota’s unique approach to automated driving and is built on the belief that people and vehicles can work together in the service of safe, convenient, and efficient mobility.

As implied by the word “partner,” the inclusion of people is central to this approach, based on our belief that people should have choices. The true value of automated driving technologies, we believe, lies not in the technology itself, but in the social value it creates—helping to create a rich mobility society in which everyone can enjoy safe, convenient, and enjoyable transportation.

To eliminate casualties from traffic accidents, we must develop safe driving systems that are highly effective in real-life situations as quickly as possible and promote their uptake as widely as possible. To do this, Toyota is promoting, in parallel, the development of advanced safety technologies and utilizing insights gained through such development to develop popularized technologies. We have already begun to put our active safety technologies on the market in such packages as Toyota Safety Sense and Lexus Safety System+.

The MaaS market, including car sharing and rideshare services, is expanding. As a mobility service platform provider, Toyota is actively exploring this market’s possibilities. We believe that mobility service platforms will accelerate the development of automated driving technologies and help bring the freedom and joy of movement to all people, including those who cannot drive. Going forward, the spread of automated driving technology through MaaS will enable the collection of enormous volumes of data, which is extremely valuable to the further development of automated driving systems, giving rise to a virtuous cycle that will provide customers with safer, more convenient, and more affordable transportation services.

Toyota believes that safe, fun automated driving technologies will expand freedom of movement for all, bringing cars and people even closer together, such that cars will continue to be loved by people.

How has your brand incorporated advances in AI, data, and Experience Design to enable experiences at scale for your customers?

As the IoT develops, cars are increasingly connected to information networks, enabling consumers to enjoy a variety of new services. Connected technologies have the potential to create new value and new services by creating new modes of use and new roles for cars. In particular, big data collected from connected cars will be put to use in a wide range of services and businesses. As such, connected platforms that encompass information infrastructure will become extremely important business platforms for automakers.

In preparation for the full-scale arrival of connected cars, in April 2016, Toyota established the Connected Company, and in November of the same year, Toyota also announced its Connected Strategy, consisting of three major points (its “three arrows”).

  1. Connect all Toyota and Lexus cars and build a connected platform that will serve as an information infrastructure
  2. Use this platform to utilize big data collected from cars and contribute to the good of customers and society while revolutionizing Toyota’s own businesses
  3. Building on this platform, coordinate with various industries and IT companies to create new mobility services and establish a value chain

Becoming connected will change the very ways that cars interact with customers and society. Toyota will be creating millions of new contact points with customers and society around the world every year, enabling the roll out of a variety of new services and businesses.

In the future, all kinds of information, including that from cars, will be integrated in the cloud.

We believe this kind of big data technology is the key to building a rich mobility society. As it seeks to provide services that exceed customer expectations, Toyota is working with a wide range of partners, taking on the future with a start-up mindset.

How do you make the case for building a strong brand within your company—to your CEO and peers—in order to get for investment for the long-term in the brand?

Since its foundation to the present day, Toyota has handed down the “Five Main Principles of Toyoda” (released in October 1935) which embody the thinking of the founder of the Toyota Group Sakichi Toyoda and is the basis of the corporate management philosophy. In 1992, in response to changes in society and business structure, Toyota established the Guiding Principles (revised in April 1997) to clarify how and what Toyota is expected to be. In 2011, Toyota adopted the “Toyota Global Vision” which explains what Toyota wants to be and the kind of values it should esteem to, which should also be embraced throughout Toyota.

In 2015, Toyota entered into a sponsorship agreement with the International Olympic Committee (IOC), which runs through to the end of 2024 (including the Tokyo Olympic Games), as worldwide partner of The Olympic Games and The Paralympic Games to aim to encourage the creation of a peaceful society without discrimination through sports and  commits to creating a sustainable society through mobility.

Since its founding as a loom manufacturer, Toyota has been driven by a commitment to contribute to society. Over its long history, the company has grown into an innovative leader that has enabled vehicle electrification on a mass scale with the development of the Prius hybrid electric car 20 years ago and, more recently, the Mirai hydrogen fuel cell electric car. Toyota’s values of continuous improvement and respect for people are shared by the Olympic Games and the Paralympic Games.

Since October 2017, Toyota has launched “Start Your Impossible”–a global corporate initiative that aims to inspire Toyota employees, partners, and customers and connect them with the company’s core beliefs. In an age of accelerating technological and environmental developments, “Start Your Impossible” marks Toyota’s commitment to support the creation of a more inclusive and sustainable society in which everyone can challenge the impossible.

Toyota believes that mobility goes beyond cars; it is about overcoming challenges and making dreams come true. The “Start Your Impossible” initiative reflects these values and highlights the company’s goal to provide freedom of mobility for all. We want to share this thinking with all stakeholders, including consumers, so that we can approach this challenge together.