Toyota 2007 Annual Report Download - page 13

ANNUAL REPORT 2007 11
motorization, such as Europe and North America, we expect demand for
cars that offer new technologies and concepts to continue to grow steadily.
However, there is a long list of issues that we must address in order to
benefit from those growing markets—environmental and safety measures,
responses to energy diversification, the maintenance of uniform quality
worldwide, the development of low-cost technologies, cost reductions to
offset hikes in material costs, among others. But, if we change our way of
thinking, overcoming such issues and risks will lead to major business
opportunities. With that in mind, I want to clear these obstacles one at a
time and advance Toyota’s growth.
Management Philosophy and Targets
Since my appointment as president, I have consistently impressed upon
everyone at Toyota that without quality improvement there cannot be
growth. I believe that rather than vehicle sales and other volume-related
results we should take pride in quality—or the extent to which the vehicles
we build meet the needs of our customers. Therefore, I would like to
improve many different aspects of Toyota’s operations to become number
one globally in terms of products, manufacturing speed, manufacturing
cost, and sales services. Through those efforts, I want to build a rock-solid
foundation for further dramatic improvements.
I firmly believe that by strengthening our overall quality in this way we
will achieve high levels of profitability. Our medium-to-long-term profitabil-
ity target is to reach and maintain a consolidated operating income margin
of 10%. It is important to maintain such high levels of profitability so that
growth in net revenues translates directly into growth in earnings.
Strategies for Building Our Foundation
In an effort to build a solid foundation for sustainable growth, we are focus-
ing on three areas: quality, cost competitiveness, and personnel training. Of
those, quality has been my number one priority over the past year. And, the
Toyota Group, including suppliers and dealers, has made concerted efforts to
improve quality, Toyota’s lifeblood.
As part of our Customer First initiative, we are reinforcing our systems
for building in quality that reflects the customer’s perspective. Literally
1,200
800
600
200
400
1,000
More than
1 billion units
0
Worldwide Automobile
Ownership
(Millions of units)
CY ’95’90 ’00 ’05 ’10
(Projection)
Notes 1: Toyota estimates
2: Different from fiscal year figures
Would you explain your basic management approach and
Toyota’s management targets?
With an operating income margin target of 10% in the medium-
to-long term, we will improve quality across many different
facets of our operations.
Specifically, what measures is Toyota taking to secure its
foundation?
We will further improve Toyota’s quality levels.
Q
A
Q
A