Toyota Woes Bad News For Nagoya

Stock Holders Lineup For Meetings At Toyota HQ

Nagoya has long been nicknamed "Toyota Town" for the fact over 50% of businesses in Nagoya are tied in some way to the auto giant Toyota Motor Company.

The auto industry is hurtling into a new era, and no one is immune to the changes. For Toyota Motor, the burning question is how to adapt to the emergence of connected cars, self-driving technology, electric vehicles and ride-sharing services.

Its shareholders want answers.

A record 5,227 investors attended the automaker's annual shareholders meeting on Tuesday. Nine spoke up, lobbing questions at management or demanding action.

"Formidable companies like Google and Apple have made inroads into the auto industry," one said. "I want Toyota to work harder."

Another asked: "You expect both sales and profit to drop for the second straight financial year. How are you going to turn this around?"

Indeed, Toyota has sold more than 10 million vehicles for four straight years, but it is bracing for sales and net profit declines again in the fiscal year through next March. President Akio Toyoda recognizes the gravity of the situation.

"We are now at a major turning point," he told the crowd, stressing Toyota would consider "all options," including mergers and acquisitions. In other words, shareholders need to understand that the company is going to have to spend to change with the times.

But that is exactly what investors did not wish to hear.  They wanted to hear Toyota already had a plan and is ready to implement it.  Instead it was more of the same "planning, meetings, and patience".  But after hearing about planning for the last 5 years, several meetings each year, the patience of stock holders is waning.  And justifiably so.

In 2012, Toyota executives told investors that they were developing a 10 year plan that would focus on the future of automobiles and what ownership would entail in the future.  Since then it has been statements and back tracking on statements.  Last year, Toyota management told about exciting plans for self automated cars.  This year, Toyota is no closer to realizing that reality.

As one stock holder said on leaving the meetings, "I feel confident I will be selling my stocks.  I see no competence in this leadership."  If Toyota is to stay the market leader then it will have to shore up the distrust of its investors.

With so much in Nagoya tied in with Toyota any problems facing Toyota will spell trouble for the whole city.

Toyota stock opened at a year low of 6124 on the Nikkei Index.

Asian Business Review