TOYOTA CITY — Akio Toyoda famously downplayed and even tried to hide his lineage while rising through the ranks at the automaker that was founded by his grandfather and later run by his father.
Even after taking the helm as president in 2009, the third-generation boss rarely ruminated publicly on his family ties. But in a rapidly changing industry in which the future is anything but clear, Toyoda is finally feeling the pressure of his ancestors and getting personal about his turn at the wheel.
For perhaps the first time in Toyota Motor Corp.'s history, the top man is breaking the gray-suited mold of his predecessors and putting a flashy, more personalized stamp on things. Toyoda's style unabashedly commingles his journey with that of Japan's biggest automaker.
Now that Toyoda's son has joined the family's namesake business, he is advising the next generation not to hide its heritage, either. To Toyoda, the family is a source of strength and pride.
"I told my son, 'You don't have to hide the family because it's part of yourself, part of who you are,' " Toyoda said during an interview in which he reflected on the burden of his ancestry and his first decade leading one of the world's most admired companies.
"If people ask, you can say it," he said. "You can take pride in it."
Toyoda is now confronting the elephant in the room: the Toyoda family legacy at Toyota Motor Corp. It comes as the 63-year-old leader races to reinvent the old-school metal-bender as a high-tech mobility provider and find the right successor to maintain Toyota's momentum — and profitability — in an industry that is being upended.
To some, the focus on the family is an anachronism in the age of shareholder activism, especially for a family with no controlling stake in the company and a leader with a borderline personality cult.
To others, the family is a flag firmly planted in tradition for the company to rally around.
"It's really starting to change. Just being from the founding family is less and less tolerated by shareholders," said Zuhair Khan, head of Japan research at Jefferies Group and an expert on Japanese corporate governance. "But the family are also the people most likely to care about the company. Their name is on the company, and they tend to own a lot of shares."
‘The biggest risk'
Roles held by the founding Toyoda family at Toyota Motor Corp. and affiliated companies:
- Toyota Motor Corp.: Akio Toyoda, president
- Denso Corp.: Akio Toyoda, board member to become effective in June
- Aisin Seiki Co.: Kanshiro Toyoda, chairman
- Toyota Boshoku Corp.: Shuhei Toyoda, chairman
- Toyota Industries Corp.: Tetsuro Toyoda, chairman
- Towa Real Estate Co.: Akio Toyoda, chairman
- Toyota Tsusho Corp.: Shuhei Toyoda, audit and supervisory board member
- Aichi Steel Corp.: Tetsuro Toyoda, audit and supervisory board member
His favorite pastime is motorsports — not watching, but racing. He hangs with celebrity friends such as retired baseball superstar Ichiro Suzuki. He spins records as a regular guest DJ on the radio.
Employees and others in the know often refer to him simply as Akio, conferring on the Toyota boss a rarefied single-name status akin to that of Sergio (you know the one), Sting or Madonna.
Other times, Akio rolls as "Morizo," a playful alter ego with a penchant for fast cars, fun times, funky clothes and thick-framed hipster eyeglasses. Morizo even has a cutesy anime character patterned after Akio and his former pet terrier, Rookie. Akio doles out limited-run stickers of the cartoon likenesses to eager fans, some of whom collect the series.
The Morizo moniker is derived from the name of the clumpy, green shrubbery mascot of the 2005 World Expo held in Aichi, Japan, the home prefecture of Toyota City. The original Morizo was billed as the Forest Grandfather, an easygoing, kind old man who has been living in the forest for ages and "has seen many things and knows everything."
In public, Toyoda is at once smiley, energetic, confident and maybe a bit macho. If Toyota is serious about making fun-to-drive cars, its boss embodies the ambition.
The closest Japan's staid business world has seen, in recent memory, is Carlos Ghosn — the former rock-star Nissan boss once so popular his exploits were chronicled in a manga comic book.
And that's what worries some Toyoda watchers.
"We need to monitor Akio Toyoda carefully so that he doesn't become another Carlos Ghosn," said Osamu Katayama, a veteran business journalist who has written books about Toyota and is penning a 20-part serial about Toyoda for Japan's Toyo Keizai magazine.
"He has such great charisma that even his critics and those around him can't say no," Katayama said. "This is the biggest risk, and I am told that he himself is aware of this."
Of Toyoda's top lieutenants, CFO Koji Kobayashi is best positioned to speak truth to power, Katayama said. As one of Toyoda's first supervisors, Kobayashi has a history of acting as the candid reality check, not a yes man.
Ghosn, his critics say, was felled partly by the unchecked power he accumulated over a 19-year tenure as the undisputed final arbiter at Nissan. That concentration of authority may have created openings for financial misconduct, of which Ghosn is accused and which led to his stunning November arrest and downfall.
Toyoda's tenure is double the typical term of a Japanese auto boss. And he is widely expected to stay on at least until after the 2020 Summer Olympics in Tokyo. Toyota is a top sponsor and wants to use the games as a global technology showcase.
Family matters
There is another reason Toyoda may keep his hand on the wheel longer.
"From day one of becoming president, I have been always looking for my successor," Toyoda told Automotive News. "But after 10 years, I find that it is even more difficult to find the right one."
Katayama predicts that Toyoda will tap a "salaryman CEO" as a successor until his only son, Daisuke, 31, is old enough to possibly take a leadership role. That would fit the pattern.
Eiji Toyoda, a cousin of Kiichiro Toyoda — the automaker's founder and Akio's grandfather — ran the company from 1967 to 1982. Akio's father, Shoichiro Toyoda, was president from 1982 to 1992.
Tatsuro Toyoda, Akio's uncle and Shoichiro's younger brother, then led until 1995.
Next were three nonfamily presidents until Akio came of age at 53. Akio took the top post in June 2009 amid the chaos of the global financial crisis.
Most details about Daisuke are kept under wraps.
Like his father, he attended Japan's prestigious Keio University and Babson College, a Massachusetts business school skilled in training people to take over a family operation. He graduated from Keio with an economics degree in 2011, according to his LinkedIn page.
Daisuke joined Toyota in 2016 after working at Fidelity Investments in Boston, his profile says. Since 2018, he has been working at the Toyota Research Institute - Advanced Development Inc., the company's artificial intelligence and autonomous driving subsidiary in Tokyo.
Daisuke speaks flawless English and, like his car-crazy father, loves driving.
Akio's advice to his son is an about-face from the directive drilled into him by his father, public relations officials, top executives and — in Toyoda's own words — "everybody at Toyota."
"People would tell me I should never talk about the family," he said. "It was very strange because it was a simple fact that I was born into the family. It was not my choice to be born into this family. But they told me not to talk about it. For many years, I had a dilemma."
Getting personal
By late 2017, however, Toyoda was feeling the weight of the family legacy. In an industry under siege on multiple fronts, from the advent of autonomous driving and electrification to the onslaught of new competition from Silicon Valley and China, he didn't want to be the one dropping the ball.
"Perhaps you have heard the saying that the third generation ruins everything," Toyoda told an investor summit that September at the company's North American headquarters in Plano, Texas. "It's something I've heard all my life. And it's something I'm determined to prove wrong."
Since then, proving that wrong has become a Toyoda mantra. And Toyoda's persona has increasingly veered from his predecessors' low profile.
Take, for example, the We Love Cars event on the sidelines of the 2017 Tokyo Motor Show. The talk show-style fan affair unfolded like a celebration of everything Akio.
The public was ushered in through a gallery of the cars Toyoda has piloted in races over the years. There was his Lexus LFA, a Toyota Altezza and his Toyota 86 — decked in the Gazoo Racing team's black, white and red motif and still emblazoned with their original number plaques.
The stage for the gathering was a spot-on re-creation of the German bar at the Dorint am Nürburgring Hocheifel, the track-side hotel where Toyoda stays when taking in the Nürburgring 24-hour endurance race. Details were exact, down to the bottles of Jägermeister.
Toyoda arrived at the affair in the first car he ever owned, a meticulously preserved, white 1970 Corolla 1600 GT. Afterward, he delighted the masses by doing doughnuts in the lot out back.
It's hard to imagine any other CEO putting on such a show. To his fans — and there are many — this is why Toyoda is the perfect frontman for a company trying to reinvent its cars as "fun to drive."
It's a huge departure from the drab bean counters who came before, said Tatsuo Yoshida, senior auto analyst at Sawakami Asset Management Inc. Toyoda, he said, has learned to cleverly use the branding power of his personality as a symbol of Toyota and Toyoda DNA.
"In the past, the family was not up front. They led from the back row," Yoshida said. "But Akio realized that saying nothing is bad, that he needed to express himself."
Toyoda doesn't disagree. "There are times when the family name comes in handy," he said.
Honoring ancestors
But that name also brings chains of responsibility. Toyoda concedes he feels pressure to ensure the company's success for decades to come — not only for its 370,000 employees but out of obligation to the forefathers who built Toyota into the juggernaut it is today.
"Three of them have been inducted into the U.S. Automotive Hall of Fame: Eiji, Shoichiro and Kiichiro," Toyoda said. "That is to say, society highly recognizes the contributions of these three gentlemen. … I'm working so hard to repay those founding generations."
Toyoda exudes a founder's mentality even though he lacks a founder's financial control.
Other automotive dynasties, such as the Fords, BMW's Quandt clan and the Porsche family at Volkswagen Group, have sizable stakes in their companies that legitimize outsized influence.
Not so at Toyota. The Toyoda family continues to hold sway thanks to a constellation of extended family members with leadership positions at Toyota Group companies. Toyodas, for example, remain chairmen at Aisin Seiki Co., Toyota Boshoku Corp. and Toyota Industries Corp. (See box on Page 32.)
A complicated group cross-holding structure further amplifies the family's clout.
Yet Shoichiro, now 94, and Akio combined are believed to own less than 1 percent of the group's Toyota Motor flagship. Akio has 4,752,895 shares, a 0.1 percent stake. His father had 11,176,193 shares as of 2008, the last time his total was disclosed in the company's financial filings.
Khan said there is nothing necessarily nefarious about such a family keeping control over successive generations if there is an independent management committee to ensure the family executives are qualified. In fact, even small holdings can imbue a special status.
"In Japan, the founding family is often considered a 'legitimate' shareholder," Khan said, drawing a contrast with professional investors who churn trades for quick gains. "Shareholders who hold through thick and thin are seen as 'real' shareholders, and founding families are part of that."
‘I can always be fired'
In fact, Toyoda's minority holding brings pressure not felt by controlling families.
"Because they are the owners of the business, their position is guaranteed. But not for me," Toyoda said. "I have to make sure, day in and day out, that the stakeholders, such as investors, employees, customers, suppliers and whoever, feel happy having me in this position.
"I can always be fired the next day. Often, people in the company or from outside say they envy me because I'm from the family and the president. But believe me, it's not that easy."
And it won't be any easier for whoever succeeds him, Katayama said, because Toyoda's larger-than-life presence will continue to loom if he stays on, as expected, as chairman.
"Akio has a keen sense of it being a family business. For him, becoming president was almost a birthright," Katayama said. "So, it will be very difficult for the next president under Akio as chairman. … Whether Akio will be able to nurture his own successor is one of his challenges."
Yet before any handover, Toyoda has unfinished business. He says he's getting started on a "full model change" of the company. Looking back at his tenure, Toyoda said he spent the first third reacting to crises — from the financial downturn and Toyota's sudden-acceleration recalls to the deadly earthquake-tsunami in Japan. The second third was spent regrouping.
Only in recent years, he said, has he begun restructuring Toyota to confront the challenges of tomorrow, including electrification, connectivity and autonomous driving.
"For the past 10 years, I wanted to get ready for the change," he said. "But I couldn't do it."
His mission now: Lay that groundwork so his successor can sprint from the starting blocks.
"I had to start with reforming the company culture to set the stage for the future," Toyoda said. "By the time I pass the baton to the next-generation president, I hope this cultural reform is completed so they can start sharply focused on the future from day one."
Naoto Okamura contributed to this report.
