Toyota gives development clout to N.A.

Automotive News reports on Toyota's move to develop and engineer cars in North America.

Automotive News
3 min read
Toyota Tundra
Vehicles unique to North America, such as the Tundra, no longer will require painstaking and frustrating sign-offs from Japan at each step in the development process. Toyota

LOS ANGELES--Toyota is taking product development authority away from Japanese bosses and putting it in the hands of North American executives as part of its response to the quality crisis that slammed the company last year.

Until now, vehicles produced and even "designed and developed" in North America were overseen by a chief engineer in Nagoya. And local engineers and sales and marketing executives had to jump through a succession of hoops to get their way.

But not anymore, Yoshi Inaba, Toyota's top North American executive, said in an interview. Toyota last month adopted a new system that takes Japanese overseers out of the equation.

Vehicles unique to the North American market--the Toyota Avalon, Venza, Sienna, Tacoma, and Tundra--no longer will require painstaking and frustrating sign-offs from Japan at each step in the development process, Inaba said.

"We are going to implement the process from design to preparation for production to development, cost planning, and identifying and selecting suppliers," said Inaba, CEO of Toyota Motor Sales U.S.A. "All these processes are going to be 100 percent done here, without going back to Japan for approval."

Insular management
This new autonomy and authority for local operations is part of Toyota Motor President Akio Toyoda's plan to give regions more authority and control in the wake of last year's unintended-acceleration crisis.

One conclusion from that catastrophe was that Toyota's insular management structure kept the company from realizing it had a quality problem until it was too late. Part of the solution was to streamline Toyota's reporting structure but also to give local operations more power in reporting quality glitches and requesting that recall actions be taken.

Inaba said those structural changes include assigning more Americans as chief engineers, a powerful position within Toyota.

"This is going to be a powerful improvement in timing and design," Inaba said. "We will keep [Japan] informed, but they are not part of the decision process...especially with pricing and profit-loss."

Not that Toyota's U.S. products had been developed in a vacuum in Japan. Many key decisions had been made by North American planners and engineers, including the insistence on equipping the Tundra pickup with a V-8 engine. Design contests between Toyota's three global studios often were won by Toyota's Calty studio in California.

Japanese chief engineers have subscribed to the philosophy of genchi genbutsu--"go and see"--by living in the United States during a vehicle's development and testing. Yuji Yokoya, the chief engineer for the 2004 Toyota Sienna, put 53,000 miles on American roads in a prototype, identifying and correcting many problems before they would have become customer issues.

But the Toyota product development process still ran through Japan.

Inaba said: "When it comes to the really detailed pieces and getting Toyota U.S.A. involved in every process of product development, our desires have not been reflected."

Ego factor
Inaba said the most frustrating part for U.S. product planners was that they would give Japan a wish list for the new product as design and development began--as much as four years before Job 1. But then those specifications would go into a "black box" and further changes would not be allowed, even if the market changed dramatically.

"We have had little contact in updating [Japan], in terms of specifications and varieties," Inaba said. "Then we get close to launch, and we think, 'We should have done this or that.'" The new structure, he said, "will make us more responsive to the market, and market change, during that time."

Of course, executives in Japan whose responsibilities included North America will lose that authority.

"You can talk about ego and making decisions, but this is the most important element," Inaba said.

Vehicles sold globally, such as the Toyota Corolla and most of the Lexus lineup, will still go through the traditional Japan-based R&D structure.

The changes come too late to affect the development of the redesigned 2012 Toyota Camry due this fall, but upcoming models based in North America, such as the next Tundra pickup, will see the result of the new structure.

"There are other side effects," Inaba said. North American "engineers, designers and production engineers will be motivated because now they are empowered."

(Source: Automotive News)