As his nation struggles to rebuild after the devastating earthquake and tsunami of March 11, Toyota Motor Co. CEO Akio Toyoda says he won’t contribute to Japan‘s problems by shifting more automotive production offshore – even as it contributes billions of yen in losses to the world’s largest automaker.
There had been mounting fears in the troubled Asian nation – but hope among many investors – that the Toyota family heir would use the crisis to justify a shift away from the home market reliance that has made it difficult to resume production after the disaster. Japan’s largest automaker, Toyota has traditionally positioned its hefty Japanese production base as a matter of civic responsibility, though in the weeks after March 11, Toyoda admitted it was becoming increasingly “illogical.”
Toyota controls roughly half of the home market, but its production base there is far more than what’s needed simply to supply Japanese vehicle needs. Competitors like Nissan have steadily fled offshore – Nissan CEO Carlos Ghosn closing four Japanese plants since taking over that company’s reins in 1999. But while most of Toyota’s growth has been fueled by new plants in places like North America, Europe and China, the maker has been reluctant to walk away from its original production base.
“Toyota is a company that was born and raised in Japan and we can’t just abandon it because the environment is difficult,” said the grandson of the company founder, insisting the automaker would “grit our teeth and protect Japanese manufacturing.”