Toyota Motor Corp. President Kenta Kon believes the Japanese auto giant must "earnestly" eliminate waste to boost its earning power so it can produce better cars, according to an exclusive interview with The Yomiuri Shimbun.

The 58-year-old spoke on a wide range of topics -- from the reasons he is focused on enhancing Toyota's earning power, to the company's electric vehicle development plans, to his personal history with cars and even his favorite food.

The following is excerpted from the interview.

The Yomiuri Shimbun: Since assuming the president post in April, you have repeatedly mentioned that you want to increase Toyota's earning power. Could you elaborate?

Kenta Kon: I believe the earning power required of Toyota is the resilience to sustain progress amid truly challenging environments. If we were to run a deficit similar to the one faced nearly two decades ago (in the fiscal year ended March 2009), we could be pressured to freeze investment and product development projects. Some might say that making any new investments is out of the question. However, that's not the direction we should take. It would ultimately harm our stakeholders, prevent us from sowing seeds for the future and fail our colleagues 10 or 20 years down the road. What matters most is the ability to persevere even in difficult situations.

There is no silver bullet (in enhancing the earning power). We must earnestly make efforts toward it. Waste exists in various places, so we need to keep finding it, tackling it and eliminating it.

Placing top priority on making better cars

Yomiuri: How do you plan to use the money Toyota has earned? Wage increases, dividends and investments for the future -- all are important, but how will you prioritize them?

Kon: We are an automaker aiming to become a mobility company. Therefore, our top priority is investing in cars and mobility technologies.

Yomiuri: Do you mean to invest in making better cars?

Kon: Exactly. Every employee is working hard to figure out what exactly constitutes a better car. Those developing new vehicles, those envisioning the future of mobility, those working on parts supply, and those providing services to customers -- everyone is tackling the issue. There is no single answer. All workers are striving within their respective roles to build better vehicles. Making better cars can be interpreted in various ways, but our commitment to investing heavily in this purpose and keeping it at the forefront will never change.

High-end cars support affordable cars

Yomiuri: Consumers want to buy cars at affordable prices. How do you respond to such demand?

Kon: Toyota is a full-line manufacturer with a global reach, so we inevitably serve customers who look for high-end cars. Of course, there are also customers seeking affordable cars. Every customer has unique needs, so I am not sure that making all cars cheaper would be the best approach. There are cars for which customers are willing to pay a premium, and those for which they aren't. We need to balance areas where we generate solid profits with those where we maintain affordability.

To some extent, high-end cars -- or flagship models, I should say -- enable us to maintain vehicles with affordable prices. That is part of (Toyota's) strategy. However, what lies at our core is a philosophy of "providing good products at reasonable prices." This is absolutely essential, so we will never change it.

A strong grip on customer needs

Yomiuri: Global sales of hybrid vehicles remain robust. Will Toyota maintain its multi-pathway strategy of offering diverse powertrain options to consumers?

Kon: We are committed to consistently delivering what consumers want, and that will never change. There are many customers who strongly prefer EVs, so we will reliably develop and provide good cars for them. We are also dedicated to product development and investment. I have no intention of changing our overall strategy.

At the same time, we are flexibly adjusting our plans across various areas -- including powertrains -- to align with current customer needs. While our overarching strategy remains unchanged, we are adapting individual plans to create good cars, which includes proactive investment in EVs.

Reviewing sales plan for EVs

Yomiuri: In 2021, Toyota set a target of achieving annual global sales of 3.5 million EVs by 2030, as well as making its luxury Lexus brand 100% battery electric by 2035. How is this progressing?

Kon: There is absolutely no truth to the idea that we are putting the brakes on EV product development. However, our sales plans are driven by the market and our customers. It is true that we are reviewing the plan you are talking about.

We believe in providing the public with EVs that are truly high-quality. When automakers produce EVs, their ability to run, turn and stop remains crucial in any day and age. As one such automaker, (Toyota) has a history that spans dozens of years of making cars. We also have experience interacting with more customers than any other automaker. There are definitely EVs that only Toyota can create. We will leave no stone unturned in developing EVs, and as a result, we hope our EVs gain popularity among customers, leading to a steady increase (in sales).

Aiming zero accidents

Yomiuri: Please share your thoughts on self-driving technologies. What is Toyota's specific approach to their development?

Kon: There are various things we need to do. Our goal is to reduce traffic accidents to zero, and this is something everyone must always keep in mind. To achieve this, focusing solely on automotive (technology development) is not enough. It is natural to work on (developing) infrastructure (such as roads, traffic lights and guardrails), while also protecting cyclists and pedestrians. These are things we simply must do.

We need to think about what we are required to do with the vehicle itself. A car that turns smoothly or stops naturally is, after all, a good car, regardless of whether it is autonomous or not. Toyota is an automaker, so we have the know-how in that area. There are issues that should be addressed in the category of vehicle (technology development), such as finding an appropriate method to manage G-force.

Safety not area to compete

Yomiuri: Cars from various automakers are seen on roads. What are your thoughts on collaboration with industry peers?

Kon: I think it's extremely important.

Yomiuri: Is it possible for Toyota to jointly develop an in-vehicle operating system, for instance?

Kon: Ultimately, safety is not an area where automakers should compete. It is fundamentally a space where they must collaborate and work together. I believe the fields of autonomous driving and advanced driver assistance systems will move in that direction. A question remains as to whether automakers will rush toward (joint OS development), but it might ultimately be easier to standardize it.

Utilize mobility technologies during disasters

Yomiuri: The world has recently been hit by natural disasters. What is Toyota's plan to prepare for future disasters?

Kon: Preparation is absolutely important. I believe that a massive amount of preparation is especially needed in Aichi Prefecture (where Toyota's headquarters is located). Many Toyota-related companies and facilities, including suppliers, are located in the prefecture. We must be aware that if a disaster occurs in Aichi, it will have a tremendous impact.

What Toyota has done since the (2011) Great East Japan Earthquake is follow the priorities set by Chairman Akio Toyoda (then-president). Human lives come first, followed by reconstruction, and finally, the resumption of production. Additionally, we emphasize immediate judgment, decision-making and action at disaster-stricken sites -- a basic policy of assuring them they do not need to seek approval from headquarters.

If a disaster strikes Aichi Prefecture, our employees will be directly affected. We will find ourselves in a situation where we can't even think about our third priority -- resuming production. As seen in Kumamoto and Noto (which have been hit by massive earthquakes), people must first ensure their own safety. Until matters concerning their families and homes are settled, it's difficult for companies to focus on business operations. I believe this reality will be highly prevalent in Aichi.

Provided we adhere to those priorities, we will utilize Toyota's mobility technologies -- both land and air -- to contribute to various reconstruction efforts, as disasters cut off (roads and other transportation). In the end, such a policy will also be most important for production.

Memories of driving

Yomiuri: What kind of cars have you driven so far?

Kon: When I was a student, an acquaintance gave me a car with over 100,000 kilometers on it. That was my first car, and it was made by another carmaker. The first car I drove after joining Toyota was a Carina ED, followed by a station wagon version of the Camry. Then I switched to the Noah and Voxy (minivan sister models smaller than the company's Sienna model) when I got married and had my first child. I upgraded them each time a new version was released, buying a total of four vehicles. Right now, I drive a GR Yaris.

Yomiuri: What makes you like minivans so much?

Kon: I have a wife, two sons and a daughter. Sometimes, the children's grandparents also ride with us. I think it's a great car for a family like ours.

Yomiuri: Will you share a memorable moment involving one of Toyota's cars?

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Kon: When my children were small, I'd install child seats in the second and third rows to take them to and from kindergarten. As I was driving, sometimes the kids would go quiet. I'd worry that the seatbelt might be wrapped around their necks or that they'd slipped out of their seats and were in an awkward position, but I couldn't turn around to check while still driving. So, I looked in the backseat mirror to see the whole interior and confirmed that the children were just sleeping, easing my anxiety. That's something I remember vividly.

Yomiuri: Why did you choose to work at an automaker?

Kon: When I was at university in Sendai, I realized that having a car really broadened my horizons. It gave me the freedom to go out with friends whenever I wanted, which was incredibly fun. It made me realize how great having a car can be.

Yomiuri: Why did you choose Toyota over other automakers?

Kon: A friend at the university had a (Toyota) Corona with about 160,000 kilometers on the odometer. The vehicle had high mileage, but did not have rust, and the transmission shifted smoothly. I could feel the difference (compared to other cars).

Yomiuri: You were assigned to the accounting department after joining Toyota. Was that a department you had hoped to join?

Kon: It's a bit embarrassing to say, but I had actually hoped to be in the advertising department.

Enjoy watching sports

Yomiuri: What is your hobby?

Kon: Getting in a car and driving somewhere helps me unwind completely. I also enjoy watching sports. Some of Toyota's sports teams start their seasons in autumn. I really look forward to watching those games under the delightful pretext of cheering them on.

Yomiuri: Who is someone you admire?

Kon: As you might have guessed, Chairman Akio Toyoda is the one who always comes to mind. Since assuming the presidency, I find myself increasingly reflecting on his past actions.

Yomiuri: What is your favorite food?

Kon: I love eating many different things. When I was living apart from my family for work, I'd always ask my wife to cook an omelet whenever I returned home.

I also eat a lot of snacks. Since the office is always well-stocked, I'll eat some, step out for a meeting, and when I come back, they've been replenished, so I'll eat some more.

Yomiuri: What is your favorite drink?

Kon: Malted soy milk. Drinking it takes me back to the coffee-flavored milk I used to love as a child.

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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.

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