The Maestro of Mobility: Akio Toyoda’s Insights on Industry Dynamics
In the ever-evolving world of automotive giants, few figures loom as large as Akio Toyoda. Having embarked on his journey with Toyota in 1984, Toyoda has navigated the tumultuous tides of the industry for nearly four decades. His tenure as CEO, which extended over a decade before he transitioned to chairman of the board in 2023, was marked by strategic decisions that elevated Toyota to its throne as the world’s largest automaker. In 2024, under his stewardship, Toyota held this prestigious title for the fifth consecutive year.
With such a storied career, it’s no surprise that at 68, Toyoda possesses a keen understanding of what fuels success—and what derails it. In a revealing interview, Toyoda shared his thoughts on a high-profile failed merger between two of Japan’s other automotive powerhouses: Honda and Nissan. The merger’s downfall, he suggests, was emblematic of a broader issue plaguing the industry: a lack of focus on the product itself.
The Missed Opportunity: A Product-Centric Perspective
During a joint press conference on December 23, 2024, Honda and Nissan, alongside Mitsubishi, outlined their ambitious goals for a merger. However, as Toyoda pointedly observed, the discussions were steeped in corporate jargon like “synergies” and “business integration,” which overshadowed any mention of the actual vehicles—the heart of any automaker’s identity. Reflecting on the event, Toyoda remarked, I was quite disappointed hearing what they talked about. Because they didn’t talk at all about the products.
Indeed, the memorandum of understanding did nod to plans for standardizing vehicle platforms and model sharing, yet it lacked the concrete details that could excite car enthusiasts and investors alike. In contrast, Nissan has since shifted gears, unveiling a detailed product roadmap that includes the fully electric Leaf crossover and Micra, alongside a new Sentra sedan and an expanded Infiniti lineup.
The Complexity of Consolidation
Toyoda’s skepticism of the merger’s potential benefits goes beyond mere product focus. He questions the notion that combining forces inherently leads to enhanced competitiveness.
Just having volume doesn’t necessarily mean that you’re strong. Short term, you may see some positive impacts. But long term, it can be quite difficult to come to a state where everyone says they’re glad they’ve combined.
One of the pivotal issues that led to the merger’s collapse was Honda’s intent to make Nissan a subsidiary rather than pursuing a merger of equals. This power dynamic echoes the broader challenges of consolidation in the auto industry. While some, like the Volkswagen Group, have successfully managed multiple brands, others, such as Stellantis, continue to face growing pains, as evidenced by recent executive shake-ups.
Toyota’s Multifaceted Empire
Toyota itself is no stranger to the complexities of managing a diverse brand portfolio. The company turned Daihatsu into a wholly owned subsidiary in 2016 and has owned Lexus since its inception in 1989. Toyota’s commercial vehicle arm, Hino, became a subsidiary in 2001. Furthermore, Toyota maintains strategic alliances with several Japanese automakers, including a 20-percent stake in Subaru and minority stakes in Mazda, Suzuki, and Isuzu.
For Toyoda, volume is a double-edged sword. In 2024, Toyota sold a staggering 10,821,480 vehicles worldwide, maintaining its leadership despite a 3.7 percent sales decline. Yet, Toyoda acknowledges the challenges that come with such scale, noting that managing production and sales of over 10 million cars annually becomes really troublesome.
Conclusion: Steering Through Uncertainty
As the automotive landscape continues to shift, Akio Toyoda’s insights remind us of the enduring importance of product innovation and strategic foresight. His reflections on the failed Honda-Nissan merger serve as both a cautionary tale and a call to action for the industry. It’s not just about size or synergy; it’s about crafting vehicles that inspire and sustain the brands that produce them.
In an era where electric vehicles and autonomous technology promise to reshape the roads, Toyoda’s perspective is a valuable compass for navigating the industry’s uncertain future. As car enthusiasts and industry leaders alike ponder the road ahead, his words resonate with clarity and conviction.
