Family star may head Toyota in crisis

"There was no question really about his (Toyoda's) presidency. The only question was when," Mamoru Katou, auto analyst with Tokai Tokyo Research.

While Toyota was on a growth track, the likely scenario was that Toyoda would clinch the top post around 2010, Katou said. Such conditions may have changed, but Watanabe, a procurement and cost-cutting expert, is probably not being replaced immediately, he added.

Until the U.S. financial crisis erupted this year, Watanabe's presidency that started in 2005 has overseen Toyota's stupendous expansion, riding on the success of its fuel-efficient models. Until this year, Toyota's global vehicle sales grew for nine years straight — a string that will almost certainly end this year.

Although recent Toyota presidents have tended to change every five years or so, they don't have terms. And it would be difficult to see what a leadership change could do quickly in achieving a financial turnaround. The problems Toyota is battling — a global recession and a surging yen — are largely beyond its control.

Watanabe has promised to halt expansion plans, cut thousands of jobs in Japan, slash costs and postpone the start of a Mississippi plant, while focusing on ecological technology and developing small cars and hybrids to prepare for the next growth opportunity.

"Things are so horrible I don't see what a personnel change would achieve," said Tsuyoshi Mochimaru, auto analyst with Barclays Capital in Tokyo. "It would make more sense to have a new president after things calm down."

The last three presidents at the company have not been a Toyoda family member. Akio Toyoda is the grandson of Kiichiro Toyoda, who founded the automaker. The company started as a maker of textile looms, founded by Kiichiro's father, Sakichi Toyoda.

In recent years, Akio Toyoda has often been asked about heading the company. He smiles but says the thought has never entered his mind. Appearing power-hungry would be unbecoming in Japanese culture, which values humility and understatement.

In recent years, there has been some speculation about another succession scenario: An older executive would serve as president for a few years after Watanabe — before Toyoda takes over. That's partly because presidents in their 50s at a major company are very rare in Japan.

The names tossed around in the media and informal comments from Toyota officials include Mitsuo Kinoshita, who oversees personnel and finances, and Takeshi Uchiyamada, a technology expert known as "the father of the Prius."

But like Watanabe, such board members now share in the responsibility of a dreary performance.

In the latest bad news, Toyota reported Wednesday that global vehicles sales plunged 21.8 percent in November from the same month last year to 618,000 — its biggest drop in eight years.

Toyota could still dethrone 77-year industry leader GM in global vehicle sales this year because the same dropping demand that's hurting Toyota is also squelching GM sales.

Toyota this week reduced its global vehicles sales target for 2008 for the second time to 8.96 million vehicles. Initially, it had expected to sell 9.85 million vehicles globally. Detroit-based GM does not forecast yearly vehicle sales.

At this week's news conference, Akio Toyoda tried to sound upbeat by comparing the company's woes to a baseball game that could still be won.

"I am hopeful we've reached the bottom of the seventh inning," he said. "The sales declines we are seeing are clearly abnormal."

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