• by Karl Greenberg , March 9, 2011

Toyota Motor is trying to get its bearings back after what many critics charge was too much of a focus on expanding its portfolio at the expense of its legendary fit, finish, and durability.

The company has announced it is resetting its global-strategy GPS with a new "Global Vision" whose goal is, among other things, to "Exceed expectations and be rewarded with a smile." Toyota, which concedes the new corporate philosophy is consequent to its recall turmoil and sales declines during the recession, says the road map is intended both to give direction to some 300,000 employees worldwide and to convey to the public where Toyota is heading.

The company has also laid out global initiatives covering the next five calendar years. A lot of the language the company is using around its forthcoming product strategy has to do with emotion and design. Toyota says it plans to improve the design and "feel" of new models, and make way for a "leading role in localization in vehicle production."

Todd Turner, president of West Coast auto consultancy Car Concepts, takes that with a grain of salt, pointing out that being design-forward in a global market only allows so much risky business. "Toyota builds cars as a mass-market brand and emotive cars are really best left to the niche brands," he says.

"Sure, they could have a little more emotion and aesthetic design language, but they have to play it safe, they have to appeal to mom and pop in Iowa as well as any 15-year-old." Competitor Hyundai is succeeding hugely with its Sonata sedan in the U.S., which is partly successful for its swooping design, but Turner says that very quality is causing it problems in its home market. "In Korea, they have an even more conservative market than here."

Toyota says it also plans to use local operations to help the company build "distinctive products and services" and address what consumers want within different regions. It plans to "build a global framework in which the global headquarters will provide overall direction and furnish support for initiatives undertaken by the regional operations; and regional operations will decide on their own how best to serve their customers." The automaker said the regions will start drawing up plans in April to define their roles as part of Toyota's global strategy.

Turner says the company is essentially pulling back the reins to try to get a handle on quality by bringing vehicle operations back to the mothership at Toyota City. "It means they will consider regional input, but they are centralizing operations. It's about vehicle quality. The point of this is that they had kind of farmed out so much responsibility for many levels of engineering parts and procurement that it had become largely decentralized and left to local markets. They lost control of some of the things that made them 'Toyota.'"

Toyota also asserts that its product strategy will also put green vehicles at the forefront by adding 10 more hybrid vehicles by 2015, and continuing to expand its portfolio of plug-in electrics, fuel-cell vehicles, and conventional gasoline cars designed for fuel efficiency.

The "Global Vision" boilerplate also has designs on its luxury brand, Lexus, which the company says will become a "truly global premium brand." In addition to focusing on quality and value, the company says it will emphasize development on emotionally compelling vehicles to drive, original design and advanced technology. Lexus will also be a more global brand, with Toyota saying it will introduce a growing lineup to emerging markets, and expand networks in established markets.

Ultimately, the company wants a portfolio balanced in Japan, the U.S., Europe and emerging markets: Toyota said last year 60% of sales were in industrialized nations, and 40% in emerging markets. By 2015, it wants a 50/50 split.