(Bloomberg News) Toyota Motor Corp. plans to sell half of its vehicles in emerging markets and roll out ten more hybrid models as part of efforts to make at least 1 trillion yen ($12 billion) in operating profit by 2015.
Toyota, the world's largest carmaker, will also shrink its board to 11 members from 27 as part of the biggest management shakeup in eight years, the company said in a statement today.
President Akio Toyoda outlined Toyota's "Global Vision" today, which may help him strengthen his grip on the company after succeeding Katsuaki Watanabe in 2009 amid the recession. The carmaker, struggling to recover its reputation after record recalls, aims to get 15% of global unit sales in China, raise deliveries in Brazil and India, and make the 1 trillion yen in operating profit even if another financial crisis were to hit.
"We will focus on emerging markets and environmental vehicles," Toyoda, 54, said at a Tokyo press conference. "We will decide when and how much to increase capacity in emerging markets if we need to."
The financial crisis and Toyota's recalls of more than 8 million cars for problems linked to unintended acceleration led Toyota to fall behind rival Honda Motor Co. in terms of profit and operating margin. Toyota plunged to a 461 billion yen operating loss in the fiscal year ended March 2009 from a peak of 2.27 trillion yen a year earlier.
'Not Too Difficult'
The operating profit target is based on an exchange rate of 85 yen to the U.S. dollar and annual sales of 7.5 million vehicles, and could be met even if another economic downturn cuts sales by 20%, Toyoda said.
The carmaker expects sales to reach 7.53 million units this fiscal year ending March 31. Given current global trends, Toyota and Lexus sales may total 9 million vehicles by 2015, Toyoda said today.
"Profit of a trillion yen may not seem too difficult to achieve, but changing Toyota's governance will be tougher than you think," said Yuuki Sakurai, who manages about 180 billion yen in Tokyo, including the automaker's shares. "This last financial crisis has been described as something happening once in a hundred years, but we should not be lulled into thinking it won't happen again soon."
With the strong yen, turmoil in the Middle East and rising oil prices, Toyota needs to improve its risk management, Sakurai said. The company is planning a separate mid- to long-term management plan "soon," Toyoda said.