Jan. 01, 1983

NEW YEAR'S MESSAGE 1983

Shoichiro Toyoda
President
TOYOTA MOTOR CORPORATION

 

A Year of Challenge

We have just completed a year of challenge and historic change for Toyota. The central event of the year was the merger, last July, of Toyota Motor Co., Ltd. and Toyota Motor Sales Co., Ltd., to form the new TOYOTA MOTOR CORPORATION. Six months have passed, and already the smooth start of our new organization augurs a bright future. The road we must travel to reach it, however, will not be a smooth one.

The past year posed unprecedented challenges for Japan's automobile industry. As the continuing world recession and a rising tide of protectionism slowed exports, the nation's automakers launched aggressive sales campaigns aimed at capturing larger shares of the home market. More new products were released than ever before, in the hope that the economy would turn better toward the end of the year.

On the passenger car front the results were good; the total number of cars sold in Japan rose by five percent, to reach 2.9 million vehicles*. In the commercial vehicle sector, the effects of recession were more direct and more severe, and compounded by the imposition of a higher tax on light vans. Total sales barely reached a million*, bringing total motor vehicle sales in Japan to an estimated 3.9 million*―a figure no worse but no better than the year before. (*All three statistics exclude minisize vehicles.)

Toyota responded to this difficult business environment by releasing a broad array of new products. Topping the list were newly developed front-engine, front-wheel-drive Vista, Camry and Corolla II models, and the 4WD Sprinter Carib, a radically new concept in multifunctional passenger cars. Major model changes were made on Corona, Tercel and Corsa, and new powerplants including the Twin Cam 24-Valve 1G-GEU and Twin Cam Turbo 3T-GTEU engines were introduced. All of these new products proved an immediate hit with consumers.

To complement these new products, Toyota also introduced two major marketing innovations. Toyota dealers began keeping their showrooms open on Sunday and stepped up Quality Control activities to further enhance their already justly famous sales and service capabilities.

Thanks to these efforts, while the domestic market as a whole registered zero growth, Toyota's market share expanded. Total sales of Toyota vehicles reached 1.52 million units, surpassing the 1.5 million mark for the first time in three years.

Compared to the domestic market, the export picture was bleak. Economies the world over were mired in recession, and the forces of protectionism grew stronger. Toyota, along with other Japanese auto makers, continued voluntary restriction of exports to the United States. Europe, too, saw a swelling current of protectionist sentiment and a continued relative strength of the yen vis-a-vis European currencies. Developing economies continued to slide, with both performance and outlook worse than the year before.

This harsh business environment held Toyota exports to 1.66 million vehicles (plus 120,000 knockdown sets), for a second continuous year of negative growth. Toyota responded by strengthening its overseas marketing and production operations, in a renewed and determined effort to contribute to the economic growth of the nations which import Toyota vehicles. High points of this effort in 1982 were the final decision to establish an aluminum parts maker in Canada, the incorporation of a new venture in Malaysia, and the firming up of plans for auto production in Taiwan.

Turning now from sales to production, Toyota manufactured a total of 3.15 million vehicles, falling short of the goals we had set as the year began. It was at the same time a year of momentous change and renewed determination to strive toward a better future.

The Year Ahead

We foresee another difficult year ahead, both at home and overseas. The recession stifling economies the world over shows no signs of a rapid turn for the better, and the outlook for Japan's own economic growth remains uncertain. Under these conditions, we cannot expect an early recovery by the automobile industry. The best we can hope for is a slow increase in demand in world markets.

The picture is not entirely gloomy, however. The American economy is expected to improve toward the end of the year, and this should bring improved sales. The greatest danger we now face is the readiness with which the United States, the nations of Europe and other countries turn to protectionism in mistaken efforts to shield their own automakers.

At Toyota, we firmly believe that the world's economy could not have developed to its present level without the stimulus of free competition to spur manufacturers worldwide to produce more and better products. In my personal view, short-sighted import restrictions will do nothing to restore sagging economies to health and will, instead, obstruct the improvements in corporate structure and operations necessary to achieve that end. They will also run counter to the interests of consumers.

The world economy's most urgent need is not the false panacea of protectionism that will inevitably lead to falling production, but free trade based on cooperation and stronger efforts, especially on the part of the advanced nations, to end the world recession.

This, too, will be a year of challenge for Toyota, a year in which we must work to strengthen the foundations of our company's business. An immense effort will be needed, guided, I believe, by the following five principles

  1. We, at Toyota, shall always remain conscious of the responsibilities vested in the automotive industry, and contribute actively to international social progress and economic prosperity.
  2. We, at Toyota, shall unite the efforts of all Toyota Group companies and affiliated organizations to promote the steady development of a "Global Toyota".
  3. We, at Toyota, shall display creativity and strive to upgrade our efficiency, while maintaining a youthful corporate spirit.
  4. We, at Toyota, shall always practice "Good Thinking, Good Products" and thereby enhance the image of "Toyota for Quality".
  5. We, at Toyota, shall rely on the spirit of mutual trust between management and labor to foster human resources for the coming decades.

We live in a world where technological innovation is an everyday event―a world in which we cannot stress too much the importance of strengthening the research and development capabilities on which the future of our company depends. In line with this conviction, we will be putting a major emphasis on new product development in 1983, coupled with more thorough planning and stronger marketing, especially of popular-size cars and trucks. In addition, we will be working to further improve the efficiency of our production, sales and distribution systems to ensure quick and timely delivery of our products to our customers.

We will continue to follow a prudent, careful policy in our overseas operations, paying close attention to the local situation. We will remain flexible in our dealings with foreign competitors, since we recognize that we must cooperate and extend assistance to each other, while continuing to compete vigorously. Our talks with General Motors are continuing, and we will persevere in our effort to form a tie-up for joint production in the United States.

Taking full account of conditions both in Japan and abroad, we have set our production and marketing goals at 1.6 million vehicles in the domestic market, with exports of 1.65 million finished units, and 120,000 knockdown sets.

This completes my review of our major tasks for 1983. Clearly, the year will not be an easy one. We will face many new difficult problems as we work to realize our slogan for the year: "A total effort to challenge the future." In choosing this slogan, I wish above all to emphasize the need for harmony and cooperation, for the solidarity that, together with the three C's I believe in, Creation, Challenge and Courage, will mean a new and stronger Toyota. It is in this spirit that I call on everyone connected with TOYOTA MOTOR CORPORATION, its dealers and affiliated companies to join with me in meeting the challenges of the new year.