The Departing Toyota CEO Made A Dire Prediction

The world’s largest car manufacturer is staring death in the eye. In a dramatic speech, outgoing Toyota CEO Koji Sato issued a grim prognosis.

– If things do not change, we will not survive.

The world’s largest car manufacturer cannot escape the reality: Chinese competition and uncertainty about customer preferences. The global automotive industry is shaking from its foundations. Changing consumer behavior and cheap cars from China have turned the automotive world upside down. Koji Sato decided to use his last days as CEO to sound the alarm at Toyota’s annual supplier conference, reports Automotive News.

– We are currently fighting for survival in the automotive industry, he warns.

The threat comes from several sides: rapid technological development, artificial intelligence, and a wave of competitors from China. Koji Sato did not mince words. Despite recent record profits, he believes the fundamentals are shaky.

Toyota has been slow to make progress with electric cars and advanced computers, but many customers appreciate that Toyota cars have few problems. Toyota is a car manufacturer with the highest global quality standards. To face the crisis, Toyota is now launching a series of radical initiatives. One of the most important is the Smart Standard Activity. In short, it’s about stopping parts being rejected for cosmetic defects that the customer never sees anyway.

Toyota has been notoriously strict in the past, throwing away thousands of cables or headliners every month simply because the plastic has discolored or had a barely noticeable stain. Now the rules are being relaxed to reduce waste and allow suppliers to reinvest money in future technology instead. The number of variants of spare parts is also decreasing.

On April 1, Sato will hand over the helm to Kenty Cohn, the current CFO. He also issued a chilling warning to those who believe that Toyota’s annual sales of 10 million cars mean safety.

– Some people may think that Toyota is in a safe position because of our financial results. But that’s not really the case.

If the world’s largest manufacturer issues such warnings, you can guess what the rest of the auto industry is in.

• Also See: Toyota To Recall Half A Million Vehicles In the US