Toyota shakes up European business

Toyota has overhauled its European operation as part of a push by the troubled carmaker to devolve more decision-making power away from Japan.

The company said on Monday that Didier Leroy, Toyota Motor Europe’s president, would also become its chief executive and take the additional title of “chief regional officer” from April 1.

Toyota also said that a division responsible for business planning in Europe, based at its headquarters in Japan, would now be placed under the responsibility of its Brussels regional headquarters.

Two of the carmaker’s plants currently under management from Japan – Toyota’s factory in St Petersburg, Russia, and its joint venture plant with PSA Peugeot Citroën in Kolin, Czech Republic – would from now on also answer to its European arm.

Toyota earlier this month said that it would give freer rein to its regional operations to decide on their own how best to serve their customers. This is part of a new “global vision” aimed at resetting priorities after a damaging crisis that saw the company recall millions of cars worldwide.

The recalls exposed flaws in management structure at the company, which employs about 300,000 worldwide, but until recently concentrated most decision making at its Toyota City headquarters.

Mr Leroy, a Frenchman who formerly headed Toyota’s sales and manufacturing operations in Europe, last year became Toyota’s first non-Japanese president for the region.

Earlier this month the company promoted Ray Tanguay, a Canadian, to the role of senior managing officer, making him Toyota’s highest-ranking non-Japanese executive.

“As always within Toyota, it will be incremental,” a company insider said on Monday of the changes in Europe. “It’s not a revolution from day one.”

In Europe, Toyota gained market share earlier this decade until 2007, when its sales peaked at 1.2m. More recently, Toyota has lost share because of the recalls, tough competition and its reluctance to match rivals in offering sales incentives.

Toyota sold just over 800,000 cars last year in Europe, including Russia. Its market share in the region stands at 4.4 per cent, down from 5.9 per cent in 2007, according to JD Power, the consultancy.

The company is refreshing its line-up, including a new version of its Yaris model due out this year and a new-generation Auris expected to launch in 2012-13.

Speaking at the Geneva motor show this month, Mr Leroy said that the group aimed to return to sales of 1m in Europe by 2013-14.

“New product always tends to market share, and that will probably be a boost,” said Jonathon Poskitt, an analyst with JD Power. “As manufacturers ease off on incentivisation, Toyota should benefit.”