The Toyota Way in Automobile Industry

After recalling 10 million cars worldwide can Toyota Motor change the topic of conversation by shattering a few champagne flutes? In fairness, it’s too much to expect that the LFA, on its own, could lift the shadow which has descended over the whole company. Provided the automaker takes swift measures to correct the defects that have been disclosed, the recall scandal likely will die down of its own accord in due time. Much like Bridgestone Corp., which rebuilt its image after a massive 6.5 million tire recall in 2001, Toyota Motor’s good name is eminently capable of being restored to its former perch. While it can do little to speed that healing process, a successful launch of the LFA could help solidify chief patron and President Akio Toyoda’s support base with both internal and external stakeholders. It could also go a long way toward spurring sales of other models in the line-up by adding a certain zest to a lackluster luxury brand.

Of course, if the commercialized version of the 2011 LFA turns out to be a racetrack laggard or showroom dud, it would seriously undermine the current leaderships’ legitimacy. A sputtering LFA could also dent sales of other Lexus and Toyota vehicles by reflecting poorly on the fraternal twin brands – kind of a “reverse halo” effect. Indeed, one of the most “myths” shattered by the recall crisis was that Toyota and Lexus are in any way separate entities. The fact that both brands suffered recalls put them in the same muck bucket in the public mind, thereby undermining 20 years of largely successful work to build semi-distinct identities.

Who’s to blame for this epic bungle? In one colorful version of the story (as entertained by a former senior American executive at TMS), Toyota Motor’s upper echelons were “hijacked, some years ago, by anti-family, financially oriented pirates.” A less ribald retelling is that well-meaning officials-both in the U.S. and Japan – got caught up in the irrational exuberance of the era and abandoned the careful and deliberate approach to car making that had made Toyota Motor, Lexus Malaysia famous.

Exactly how the automaker lost its way is a complex and multi-dimensional tale, one that the guest author of this book’s Coda tries to shed some light on. However, explaining Toyota Motor’s road back to the good graces of car buyers is a far easier task. It simply involves returning to what the company does best: mono-zukuri. In other words, mastering the production of high quality, low-glitch vehicles imbued with what a senior TMC executive in Japan once termed “value for the money.” The “value” is somewhat of an intangible for a luxury car like Lexus CT200h, something that can only be bestowed by an artisan.

Surely there is no little degree of schadenfreude in the rush to condemn a once celebrated corporate culture. Yet such mirth may be misplaced as the Toyota Way is in no way dead. What makes that philosophy so powerful is that its dual central tenets are not so much a codified mantra as a state of mind: continuous improvement and respect for people. Those are powerful ideas in any walk of life.