Summary
Toyota's move to shift production decisions to the US is another of their conservative management approaches that have held them back. They delayed for some time adding Diesel engines to the product line in Europe and they held off in upsizing their minivans for the US market so long that they have never really earned a significant market share of that segment. Toyota protects it brand with a conservative strategy. But these delayed moves have held them back in the past.
Analysis
As an auto maker Toyota does not make many mistakes. However, it seems that they are finally coming to the same realization as many other Japanese companies: The North American auto market is not like that in Japan. In other words certain decisions need to be made in the local region by knowledgeable people instead of back at the headquarters office.
Toyota's strategy has always been to preserve its brand. But their history has shown that this means they sometimes adapt slowly to local market demands. For example, they were slow to offer a Diesel engine in Europe where the majority of passenger cars run with Diesel engines. They were also slow to upsize their minivan to US preferences resulting in a relatively low market share for quite a long time.
Moving production planning decisions to the local market "where the action is" represents one more example of a conservative approach to adapting to the local market.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
