• Wall Street Journal, Tuesday, July 21, 2009 10:35 AM

Blaming complacency and arrogance, Yoshimi Inaba, the new chief of Toyota's North American operations, admits that the Japanese automaker lost touch with its customers in recent years and is planning to overhaul how it does business here, Kate Linebaugh reports.

"Our sense has been always that we listen to the market, we listen to customers, we listen to the dealer. That element is a little bit lost," says Inaba.

The automaker's most immediate problem is dealing with overcapacity, analysts say, but Inaba disagrees with those who say that Toyota expanded too fast. "We were having a tough time catching up with demand," he says. He also stresses that the U.S. auto market "remains the most important market for Toyota" and hopes to gain some incremental market share as a result of the restructuring of GM and Chrysler.

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