Toyota Latam chief adopts root-and-branch approach

Q: The Latin American economy has been slowing for a few years now. How is Toyota adjusting in the region? 

A: We’ve been continuously focusing on the basics and we treat our company like a tree. So we’ve been focusing on the roots of our tree with things such as improving the skills of our service department, of our team members, doing cost deduction, optimising our portfolio of vehicles, making changes to our vehicles by listening more closely to the customers, and so on. Other companies focus on the fruits: car sales, car sales, car sales. We focus on processes. If you have good processes and take care of the customer, you give them what they want and need and exceed their expectations, that fruit will come all by itself.

Q: You were named head of Toyota operations in Latin American (excluding Mexico) in 2013. What have you achieved so far?

A: Our market share in the region was 5.3% for the region in 2013, and right now we’re shooting for 10%. In Brazil, our biggest market, we increased from 3.1% to 9%.

Q: So are you gaining shares because you are increasing sales, or because others are struggling in the slowdown?

A: The market itself has really come down. In Brazil alone a total of 3.8 million vehicles were sold in 2013, today that figure is just above 2 million. But we think we’re gaining market share because we’re taking care of that tree. We’re not chasing market shares; it’s coming because our trunk is healthy.

Q: Toyota sold 378,000 vehicles in the region in 2015, down 6% from 2014. What are your projections for this year?

A: We think we’re going to surpass the 378,000 of last year. Our record high was 403,000 in 2014. It will be somewhere between those two figures.

Q: What are the drivers of growth and opportunities you foresee for the Latin American market?

A: Well a key measurement for me is if you look at how many drivers or how many owners of cars there are per 10 people. In the US it is eight out of 10, in South Korea it’s about six out of 10, Japan five out of 10, Mexico three out of 10 and in Latin America as a whole it’s 1.6 out of 10. Even if we just get up to [the rate in] Mexico, it would mean doubling what we have today. Also, the population is increasing rapidly in Latin America, so it is still an emerging region, and it’s going to grow.

Q: What’s the overall picture in Argentina, and what has changed since Mauricio Macri became president?

A: A lot of economic policies have changed that have helped us. And also the exchange rate has been freed up, which has allowed [Toyota Argentina] to pay our bills to Japan and other countries. Besides, settling with the bond hold-outs has provided a little more confidence in the country. When I talk to people outside Argentina, even outside the region, they all have a positive perspective on the potential for Argentina.

Q: How do you handle inflation levels of 30% to 40%, such as those Argentina continues to experience?

A: Maybe inflation is too high, but you deal with it. You carry out cost reductions, productivity improvements, you export more, you find ways to deal with it. We don’t like it, but strong companies figure a way around it. And our way has been cost reduction, productivity improvements and exporting. There is some discussion back and forth, but also salaries do track inflation.