Toyota Confirms Shake-Up in Efficiency Drive – Wall Street Journal

Posted: Wednesday, March 02, 2016

Toyota President Akio Toyoda introducing the Lexus LC 500 Coupe at the North American International Auto Show in Detroit, Mich. on Jan. 11.

TOKYO—Toyota Motor Corp. said Wednesday it will reorganize its corporate structure starting in April, splitting itself into smaller units based on product classes in an effort to develop cars more efficiently.

The world’s biggest auto maker, which sells more than 10 million vehicles a year, will set up new product-type-based units responsible for vehicle development and the short- to mid-term strategy, it said.

Toyota will create seven units to focus on products including compact cars, midsize vehicles, commercial vehicles and the luxury Lexus brand. Others will focus on connected cars, advanced technology and power trains.

“By breaking the company down to a smaller framework than before, each one can decide more quickly and respond to changes,” spokesman Ryo Sakai said.

The Wall Street Journal reported the restructuring earlier this week.

President Akio Toyoda and other executives are concerned that Toyota’s decision-making is sometimes sluggish, even though it restructured several times over the past five years to become more nimble, current and former executives have said.

They believe the company may be too big to decide and act swiftly under the existing structure, the people have said.

The new units, which Toyota plans to position as “in-house companies,” will each have their own presidents, all coming from the ranks of senior managing officers. They will oversee most stages related to that unit, from vehicle development to production, Toyota said.

Mr. Toyoda hopes that giving greater responsibility to those senior officers would nurture a new generation of leaders, people familiar with the matter have said.

In another sign that the auto maker wants to give younger managers greater authority, Toyota said it would cut the number of executive vice presidents to four from six.

In 2013, Mr. Toyoda introduced a region-focused structure under which one unit oversees developed markets, while another focuses on emerging markets. Those units will remain in place and work with the new units, Toyota said.

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