Toyota shareholders approved the appointment of the company founder's grandson Akio Toyoda as new president Tuesday, hoping that reaching back to the automaker's family roots will help steer the manufacturer out of its worst ever crisis.
More than 3,300 shareholders packing a hall at Toyota Motor Corp. headquarters — a record attendance — showed their approval by applause for the selection of 29 new directors, mostly company executives and directors, including Toyoda.
Toyoda faces the daunting task of reviving the world's largest automaker, which lost 436.9 billion yen ($4.6 billion) during the fiscal year through March, its worst loss since it was founded in 1937. The company expects an even larger loss this year.
Toyoda, 53, formally became president at a directors' meeting later in the day, the company said in a statement. He replaces Katsuaki Watanabe, who presided over the shareholders' meeting in this central Japanese city that shares its name with the corporation. Reporters saw the proceedings live on a TV monitor at Toyota headquarters.
Toyoda, the grandson of founder Kiichiro Toyoda and the son of Shoichiro Toyoda, a former president, spoke only once in the meeting, in his role as executive vice president overseeing Japan sales.
He responded to the worries of a shareholder about the delay in Prius hybrid deliveries because production hasn't kept up with booming demand, with deliveries not arriving until about November.
"We are very sorry to make customers wait," he told shareholders, standing at the corner of the stage with other executives. He assured shareholders everything was being done to boost production.
(The founder's family name is spelled with a "d," but the company name was changed to Toyota because that was considered luckier.)
Many Japanese companies, including conservative ones like Toyota, don't allow incoming chief executives to speak up too much until they officially assume their new position.
Watanabe, the outgoing president, who remains on the board as vice chairman, did almost all the talking at the two-hour shareholders meeting. Watanabe had led Toyota since 2005 on an aggressive — and until recently a largely successful — growth track.
The company, which makes the Camry sedan and Lexus luxury line, has been hit hard by the global slump, particularly in the U.S., Europe and its home market of Japan.
Watanabe apologized for Toyota's recent losses, and said directors would forego bonus pay. He also said Toyota will stay nimble to develop products that will appeal to consumer tastes, including green cars.
The only bright spot in Toyota's performance lately has been the popularity of the third-generation Prius hybrid, partly due to government incentives on green vehicles. Even then, analysts say its booming sales are biting into sales of other models.
Toyota is planning to roll out a small electric car by 2012, according to Masatami Takimoto, executive vice president in charge of technology. He also said that by 2015, Toyota plans to introduce an improved fuel cell vehicle. Last year, it unveiled fuel cell hybrid car that is powered by hydrogen and electricity.
Hopes were high among shareholders for leadership from a Toyoda — a name that holds a mystique in this city that depends on the company and its related businesses for thousands of jobs.
"He can bring people together," said stockholder Yuzo Watanabe, 59, who works for an auto parts-maker and owns 1,000 Toyota shares.
Like many other shareholders, he was sympathetic, pointing out that all manufacturers had been battered by the downturn.
About a dozen shareholders rose to ask questions, mostly about ecological and safety technology. There were no direct demands or expressions of outrage about the dismal earnings results.
One investor, who gave his last name as Yoshida, asked about dividends, which have fallen by 40 yen to 100 yen per share. He suggested Toyota give out discounts on car inspections or restaurant coupons instead of dividends.
Another investor who identified himself as Sasaki pleaded for managerial leadership, pointing out that many people's hopes were resting on Toyota's future.
Toyoda clearly faces an enormous challenge to turn around the company that his grandfather founded more than 60 years ago. It forecasts a net loss of 550 billion yen ($5.8 billion) for the year through March 2010.
In a news conference in January when his appointment was first announced, Toyoda promised a back-to-basics approach, valuing rank-and-file and consumer needs. He has another news conference set for Thursday in Tokyo, where he may disclose more details of his turnaround plan.
Toyota's recovery is important for nation's overall economy, said Masaaki Sato, who has written books on the company but was not at the meeting. The auto industry is a pillar of Japan's economy, and Sato urged the new president to clarify his recovery strategy.
"We can say that if Toyota fails, then the Japanese economy will surely fail," he said. "If Toyota can properly do its job, then the economy can recover."