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Updated Sunday, February 7, 2010 1:05 pm TWN, The Straits Times

Japan needs a different kind of acceleration; just in time

Singapore -- One only needs to examine how far Toyota ascended as a corporate behemoth to comprehend the extent of its fall. For the longest time, Toyota was a byword for reliability, quality and performance while its famous just-in-time production system was an invention without peer. In 2008, it reached the summit when it overtook General Motors as the world's biggest carmaker. Now, that victory is starting to look like a Pyrrhic one. This week, Toyota acknowledged brake problems in its iconic Prius petrol-electric hybrid. The embarrassing disclosure comes after a massive recall of nearly eight million cars, more than the number it sold last year. A good many were on account of a dangerous condition called “unintended acceleration”. Increasingly, Toyota's woes are attributable to strategic over-reach as it sought to overtake GM.

But Toyota's problems are not only about the Prius as a model green car, the recalls, or even the expected loss in market share. More significant is that the company's reputation for quality is at stake. This is a state of affairs that its rivals will capitalise on. South Korea's Hyundai has been giving Toyota a run for its money; it can now compete even more aggressively. In time, Chinese marques such as Chery will start to nip at Toyota's heels. Already, bigger makers such as Ford and Volkswagen are now able to match Toyota's offerings in reliability and safety. No wonder Mr Akio Toyoda, the company's chief and grandson of its founder, has given a stark warning about the firm's spiral of decline. Citing from the book How The Mighty Fall by Mr Jim Collins, an American management specialist, Mr Toyoda said that Toyota was in a state of “grasping for salvation”. According to him, a change of fortune will stem less from revolutionary change than from calmness, focus and deliberate action.

Well said. Indeed, it could be argued that Toyota - and Japan, for that matter - needs a strong dose of calmness, focus and deliberate action. Toyota's suddenly exposed weaknesses mirror those of Japan. In the past decade, Japan has suffered from falling corporate profitability, lackadaisical growth, systemic corruption and a revolving syndrome of anaemic political leadership. It sorely needs to find its footing and its purpose again, particularly as China will soon overtake it as the world's second biggest economy. Whether it be leadership renewal at the highest levels or a revitalisation among the corporate samurai, it is hoped that Japan gets out of its blue funk quickly. The country needs to believe in itself again. For Toyota - and Japan - some deliberate (and not unintended) acceleration is definitely in order.

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