More on Toyota’s Jump to #1


    Not breaking news, but more article about Toyota's expected leap to #1 in global auto sales in 2007.

    The NY Times and the International Herald Tribune both chimed in. All quotes below are from the IHT article.

    Toyota Motor said Friday that it planned to sell 9.34 million vehicles next year, a figure that analysts said would be big enough to put it ahead of the troubled General Motors as the world's largest auto company.

    Toyota reported global group sales this year of 8.8 million cars and trucks, below GM's forecast for 2006 sales of 9.2 million vehicles. But the figures Friday showed the two rival car giants on starkly different trajectories, with Toyota expecting to add a half million in vehicle sales in 2007, at a time when GM is closing plants and laying off workers.

    Both papers recount the long journey that Toyota has taken:

    Surpassing General Motors would be a crowning achievement for Toyota, a company that got its start in the 1930s by reverse-engineering GM and Ford cars, and that spent decades catching up with Detroit. It would also end GM's 81-year reign over the global auto industry, and mark another step in the rise of Asian carmakers.

    Much of the analysis is about how Toyota will have to be politically sensitive after knocking off GM. I'd rather focus on how this validates the Toyota Production System, rather than focusing on the currency advantages or all the other reasons (excuses) that the old Big 3 would give.

    Toyota's rise would also prove a victory of sorts for its unique corporate culture, the so-called Toyota Way, which is rooted in an obsession with craftsmanship and constant improvement, or kaizen. Analysts said the Toyota Way would likely become enshrined as the industry's gold standard and the model to mimic or surpass for new challengers from South Korea and China.

    “This proves that the Toyota Way is more than just an odd, quirky theory,” said Chester Dawson, author of the book “Lexus: the Relentless Pursuit.” “Being No.1 means Toyota now sets the standards that everyone has to beat.”

    Toyota has seen an increase in quality problems and recalls — now that they are #1, will the media quit treating them as the underdog?

    “Now that it's Toyota's turn on top of the industry,” said CSM's Yokoi, “Toyota has to figure out how to keep from following GM into decline.”

    Given Toyota's business acumen and track record of continuous improvement, I doubt that's likely.

    One thing jumped out from the Times article:

    Ford's new chief executive, Alan R. Mulally, readily says he is an avid student of Toyota, something no Detroit leader in the past would admit.

    For American consumers, Toyota vehicles have been “a better value proposition” than Detroit's products, said Mr. Mulally, who owned Toyota and Lexus cars before joining Ford in September.

    That gives Ford an interesting perspective — having a CEO who learned about lean in a different industry and one who actually owned Toyota products.

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    Mark Graban
    Mark Graban is an internationally-recognized consultant, author, and professional speaker, and podcaster with experience in healthcare, manufacturing, and startups. Mark's new book is The Mistakes That Make Us: Cultivating a Culture of Learning and Innovation. He is also the author of Measures of Success: React Less, Lead Better, Improve More, the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, and the anthology Practicing Lean. Mark is also a Senior Advisor to the technology company KaiNexus.


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