Lu Bai, MBA, Ph.D.

How did Toyota keep expanding exports to U.S. in the face of ramped up U.S. tariffs on all those cars? Read my exclusive interview with Toyota CEO Koji Sato here in Automotive News to find out. TOKYO — Toyota’s secret to navigating industry upheaval isn’t advanced technology or bold sales forecasts. It’s an old-fashioned commitment to listening to dealers and customer needs. While competitors dove headlong into electric vehicles based on market predictions and policy trends, Toyota Motor Corp. CEO Koji Sato says the world’s largest automaker stayed grounded in real consumer demand through its decentralized regional management structure. The result: record sales and production levels even as rivals such as Honda Motor Co. book massive EV-related losses. Moreover, Toyota’s exports to the U.S. are soaring, thanks to its growing stable of hybrid vehicles. The higher-margin models are a cash cow propping up earnings and sales. In an interview with Automotive News, Sato said the key to success is listening to dealers through Toyota’s strong decentralized leadership structure in crucial markets such as the U.S. By tuning in to customer needs, Toyota was able to keep its focus on hybrids while avoiding the all-in trap of EVs, Sato said. Meanwhile, booming demand for these gasoline-electrics, still mainly made in Japan, has kept exports surging to the U.S. while their margins offset tariffs. It’s a simple principle introduced by Chairman Akio Toyoda when he was CEO, said Sato, who took the wheel of the Toyoda family’s namesake carmaker from the founder’s grandson in 2023. “Product-based management and region-based management have been our central core, an unwavering axis,” Sato said in late October on the sidelines of the Japan Mobility Show. Regional CEOs, such as Ted Ogawa in North America, skillfully gather on-the-ground intel. And Toyota’s tight-knit relationship with dealers helps leaders get the real scoop of what’s going on. “Even if we create a good product launch plan on paper, unless customers actually want the car, we won’t be able to sell it. So we’re really focusing on what customers want,” Sato said. Even as the rest of the market rushed into EVs, Sato said Toyota saw something different. “This regional CEO takes the lead in looking at customers, understanding customers. And these regional CEOs were seeing there was not strong demand being created on the customer side,” he said. “We therefore kept aligned with the real demand.” CEO Koji Sato says Toyota dealer trust is key to pinpointing real demand The factory has a bead on the market, Sato said, thanks to close communication with dealers. He noted that he and Toyoda regularly attend the U.S. national dealer meetings. “The local dealers make business investments based on the trust that they have in us. This bond makes our business feasible.”

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