Toyota Motor Corporation FY 2021 Shows The Toyota Way Is Still Relevant

Toyota announced in May 12, 2021 that the pandemic certainly impacted global sales.

Consolidated vehicle sales falls to 7.646.000 units (which was 85.4% of last year units). However, despite the sizable drop in revenue, the company saw an increase in Net Income of 209.1 billion Yen. In addition, Operating Income also increased by 10 billion Yen year-on-year, fueled with their cost reduction effort and other expense reduction amounts to a total of 220 billion Yen that offset their decrease of income from vehicle sales.

It is also important to notice that North America and Asia markets were the two main contributors of this cost reduction outcome, and they were able to have an increased Operating Margin YOY.

This information proves that Toyota is still effectively managing their global business, and their business philosophy is far from being "outdated", as suggested by several articles in the past. In fact, even their sales of electrified vehicles actually showed a 12.3% increase from last year at 2.155.000 units (that is over 2 MILLION units). This reflects their perfect capability to identify customer values, understand what they want, and delivers them effectively, even (or maybe especially) during this pandemic situation.

Having said that, perhaps it is time for us to reflect (Hansei) on whether we truly understand what Toyota Way is. Do we really understand how Just in Time is supposed to be adopted? Do we really have the Kaizen mindset, or do we only have a set of tools? Do we know what Value, Flow, and Stability really is?

Seeing that they are able to drive their non-Japanese market to deliver positive result in Operating Margin comparison, surely we can also say that this is not a result of Japanese cultural "thing", but this is purely a result of a well-nurtured global organizational culture.

Let's all refrain from jumping to Neighbor Way too soon and instead revisit what we do in our organization, and what we can do differently to improve our situation.