Why Toyota Way is Failing in Foreign markets, countries ?

1) Obvious Quality Discrepancies which initiated a ‘crack’ in the culture of the company – The
Toyota Way :-
Experts reveal that, Toyota grew too fast, and its quality slid. Consumers trusted the Toyota brand so much
that the company had developed a significant competitive advantage on the basis of its customer loyalty. If
you bought one Toyota, there was a good chance you would have a long-term relationship with the
carmaker.
“In late August 2009 - an off-duty California policeman was driving a Toyota Lexus that accelerated in excess
of one hundred miles per hour and crashed, killing the officer and his family”
At the time of the fatal accident, Toyota was well aware of quality and safety questions about unintended
accelerations. Media hiked concerns about whether Toyota vehicles suffered from an electronic defect that
caused uncontrolled acceleration—in turn putting pressure on federal safety regulators responsible for
protecting the public.

The reports of ‘unintended acceleration’ made the culture of Toyota worse and world-over loyalty towards
the Toyota way faltered, which can be evidenced from these facts :-
1) Toyota’s acceleration issues dated back to 2002, when the company began installing drive-by-wire
systems in its vehicles.
2) The company had received 1,200 complaints of unintended accelerations, and the uncontrolled
accelerations continued even when the floor mats in question were removed.
3) Toyota sought to prevent making available the data collected by on-board recorders of vehicles that had
experienced uncontrolled acceleration.
4) And more people had died from uncontrolled accelerations involving Toyota cars than from all the other
car companies put together.

2) Highlights on Toyota’s Deep Organizational Failures:- (Toyota’s failure in US)

1) Bureaucracy

The lines of control of Toyota’s U.S. operations were murky (morally questionable). For a few years, the company’s
top-ranking U.S. exec, James E. Press, was able to establish Toyota Motor North America in New York as the de facto
headquarters in charge of all U.S. operations. He even rose to become the only American on Toyota’s board of
directors in Japan. But Press quit in 2007 to join Chrysler and he was replaced by a series of Japanese executives with
less clout. With Press’ departure, Toyota lost its key bridge between management in Japan and various U.S.
constituencies — and its ability to respond rapidly when crises hit.

2) Overconfidence

Another underlying problem is cultural. Toyota is a secretive and non-communicative organization. American
insiders joke that working for the company is like working for the Central Intelligence Agency, where information
is shared only on a “need to know” basis, confides one American employee. Toyota did not believe it needed a
strong public relations effort. The company thus failed to recognize that the pressures on the No. 1 player in any
market are far more intense than the pressures on No. 2 and No. 3.
 3) Weak Management gently creeped into the ‘Toyota Culture’

For years, the company has been led by a series of world-class professional managers. Then last summer, Akio
Toyoda, 53, grandson of the company’s founder Kiichiro Toyoda, took charge as chief executive and some insiders
did not think he was ready. Which eventually led a poison-pill or germ-warfare enter into the vaunted culture of
the company, by way of non-acceptance, resistance tactics from the working-force. When he took the job, his
grandfather and the founder Kiichiro Toyoda told the world that he would practice “genchi genbutsu,” which
translates roughly as “management by walking around” or “going to where the problem is.” But when the safety flap
came to light, he remained silent and even attended the annual gathering of world leaders in Davos, Switzerland.

4) The Fallout

Toyota’s problem-solving mechanism clearly broke down. The company revealed as much in the series of
explanations it released. Initially, Toyota announced the floor mats were the problem. Then it was the gas pedals,
which were made by an Indiana-based supplier and thus limited the problem only to U.S.-made cars. But that story
didn’t hold up because of a well-publicized case involving a Lexus in California in which four people died — and that
vehicle was made in Japan. Then in early February, problems developed with the Prius hybrid and its brakes in both
the U.S. and Japan. Toyota described it as a software issue.CEO Toyoda has only compounded the crisis. When he
finally held a press conference in Japan to apologize, he pointedly did not make a deep bow to demonstrate regret.
In Japanese cultural terms, Toyoda’s (The un-accepted CEO , Akio Toyoda) bow was perfunctory(done mechanically,
with no feeling in true sense). He did not appear to understand what had gone wrong inside his own company, much
less have a concrete way to address it.

3) Toyota Flopping In China – Anti-Japan Protests are the one reason – The matter drills-down into a
long story!

 Toyota Motor Corp blames its China underperformance on the widespread anti-Japan protests triggered by a
territorial row. Some company insiders and dealers, though, say the world's biggest car maker misread the
world's largest market.

 Toyota's launch of the Yaris subcompact in 2008, aimed at building brand loyalty and driving the Japanese
firm to China sales of 1 million vehicles a year, failed to register with its target market - China's army of price-
conscious buyers.

 The Yaris, a success elsewhere, also failed to attract China's new emerging middle class. To some dealers and
those within the company, the Yaris lacked what the Chinese call 'daqi' or 'road presence'. Next to Nissan
Motor Co Ltd's pricier Tiida, for example, it feels cramped and lacks pizzaz.

 Crucially, for more frugal first-time buyers, the Yaris was over-priced, costing from 87,000 yuan ($13,900), 55
percent more than General Motor's Chevy Sail, and putting Toyota at a competitive disadvantage in a must-
win market.

 "The Yaris is too expensive, way too sleek for its target market. This group of consumers is very, very price
sensitive," said an operator of a few dozen Toyota dealerships across China.

 Sales of the Yaris in China averaged just 1,250 a month, according to January-August data, and that's before
the impact of the often violent protests against Japanese products in a row over disputed islands in the East
China Sea. By contrast, Nissan sold 12,000 of its Tiida subcompacts per month and GM shifted 17,000 Chevy
Sails.
 BLACK EYE: The misstep in China is a black eye for Toyota CEO Akio Toyoda, the founding-family scion who
used to run the firm's China operations, and who also has had to deal with a major recall and last year's
Japan quake and tsunami that paralysed parts production.