On Wednesday, September 12, the Woodrow Wilson International Center for Scholars hosted a Director's Forum with Dr. Shoichiro Toyoda, honorary chairman of Toyota Motor Corporation. Dr. Toyoda recounted the rise of Toyota since the early 1950s, specifically its expansion to the United States, and described how the company will continue to evolve as it responds to the shifting landscape of the automotive industry in the 21st century.

In 1952, Toyota made only 14,000 vehicles in a year. In 2006, the company had greatly expanded, making over nine million vehicles. According to Toyoda, this dramatic increase in production is attributable to Toyota's steadfast commitment to adding value to society by making things and gaining the confidence of its customers.

Toyota Motor Corporation has been in operation for seventy years, since 1937. The company was founded by Toyoda's father, Kiichiro, whose dream was "to make cars in Japan, made entirely by Japanese ingenuity and labor." Unfortunately, Toyoda explained, his father was unable to see this dream fulfilled; but with the debut of the first real passenger car in Japan in 1955—the Toyopet Crown—Toyoda and his team were able to make his father's vision a reality.

The Crown was enthusiastically received among the Japanese, and Toyoda had immediate ambitions to begin exporting to the United States. This proved no simple matter, however, due to the vastly different driving terrain in the U.S. as compared to Japan. "I still remember the time I drove [the car] on American highways," said Toyoda. "It turned out to be dangerous to enter a highway on an uphill slope. That was because the Crown had poor acceleration. So I was forced to find an entrance to the highway on a downhill slope. In those days, we didn't have any test course that would allow us to run cars for long periods without stopping. It was a bad situation. We had exported cars to America without performing enough driving tests. After reflecting on it, we decided to give up export for the time being."

This experience, although a failure, was highly instructive for Toyoda and his team. It taught them the value and necessity of Genchi Genbutsu, which Toyoda described as "going to the source in all our operations to find the facts to make correct decisions."

Toyoda discussed other key aspects of his company's approach to building a successful corporation, namely its commitment to quality control at every level of production (which earned Toyota the prestigious Deming Award in 1965); its adherence to cost reduction strategies like Just-in-Time production; and its focus on cultivating human resources. "To make things," Toyoda explained, "the first step is to develop the people who are doing the making. Based on our slogan, ‘Making things is developing people,' we have consistently worked on our personnel training as a fundamental pillar of our management."

Toyoda went on to describe the evolution of his company's relationship with the U.S. market, which just celebrated its fifty-year anniversary. "At present, many Americans favor Toyota cars," he said. "We should never forget that we have benefited from our good partners and friends in the United States at the turning points in our business."

In particular, Toyoda discussed the important role played by Jim Moran, who had been Ford's biggest dealer in the United States, but who, after only one test-drive in a Corona Coupe, agreed to start selling Toyotas instead. Moran became the first president of Southeast Toyota, and according to Toyoda, "his experience and administrative ability were crucial factors in the success of sales of Toyota cars in America." Following Moran's advice, Toyoda introduced the Lexus series to the U.S. market, and this proved to be an extremely successful venture. Soon, Toyota Motor Corporation had become one of the most internationally competitive automakers in the industry.

In the early 1980s, however, trade disputes threatened to undermine the company's ability to export to the United States. It became increasingly apparent that Toyota would need to open its own manufacturing plants in the U.S. Seeking guidance from people like James Hodgson, former Secretary of Labor and former ambassador to Japan, and William Usery, the former Secretary of Labor under President Ford, Toyoda eventually launched the company's first U.S. Greenfield plant in Kentucky, in 1986.

"Nowadays, Toyota is regarded by parts manufacturers as the most trustworthy and reliable automaker, according to a wide range of surveys. I believe this is one of our great strengths," said Toyoda. Recognizing the value of localization, the company continues to follow this approach. Earlier this year Toyota announced the opening of its eighth North American assembly plant, to be completed in 2010, which will not only expand vehicle production capacity in the U.S. but create thousands of American jobs and strengthen the American economy.

Additionally, Toyota has taken the idea of corporate citizenship and turned it into a fundamental company priority. "We are good corporate citizens," Toyoda declared, "and we keenly sense the importance of putting down deep local roots." In Kentucky, for example, the company has become a key member of the community, providing support to state universities, contributing to scholarship programs, funding local organizations, and donating to NGOs like the National Center for Family Literacy.

Toyoda concluded his speech with a discussion of the future of Toyota Motor Corporation, in particular the company's need to remain flexible amidst new challenges such as increased global competition, rising energy prices, and resource depletion. Environmental considerations, he said, cannot be underestimated. Citing the United Nation's Intergovernmental Panel on Climate Change (IPCC), Toyoda recognized that CO2 emissions are becoming increasingly harmful and that the transportation sector is responsible for more than 20 percent of these emissions. In his view, the automobile industry must take the lead in helping strike a balance between vehicle dependency and our commitment to the environment; in other words, the achievement of sustainable mobility.

Toyoda reaffirmed the importance of the relationship between Japan and the United States. Both countries, he said, "are irreplaceable foundations of Toyota's business. This is why I fervently hope for an even closer relationship between our two countries and better understanding." In addition to economic and political ties, however, Toyoda stressed the need to diversify the countries' relationship. "Up to now, the Japan-U.S. relationship has overemphasized economic aspects," he explained. "I think that right now we have a wonderful opportunity for a re-emphasis centered on down-to-earth exchanges of human resources."

Toyoda applauded the Wilson Center's recent launching of its Japan Initiative, which will broaden programming to allow for a greater focus on Japan and increase opportunities for Japanese scholars to come and conduct research in Washington, D.C.

"I am convinced," he said, "that such exchanges at the citizen-to-citizen level will create fertile ground leading to much stronger mutual trust between Japan and the United States over the long term."