Remarks by Toyota President Akio Toyoda

Good evening, and thank you all very much for attending our press conference at such short notice. I'm very sorry for any inconvenience the timing of this event may have caused.

I'd like to tell you about the reasoning that led us to make this decision.

Toyota and Daihatsu have frequently held discussions and shared opinions on the topic of sustainable growth. Last autumn, we told Daihatsu that we wanted to strengthen the relationship between our two companies in order to enable us both to make ever-better cars. President Mitsui from Daihatsu might have been a bit taken aback at first, but―as we kept talking―he told me that he hoped to maintain Daihatsu's unique approach to manufacturing, but that, on the other hand, the company's resources would limit his ability to expand the scope of the business, embrace the next wave of technologies, and improve competitiveness.

Daihatsu is a company whose independence and self-support I have always respected, and it was clear to me that President Mitsui's priority―as a leader―was to achieve global competitiveness no matter what, and to make sure that his company can grow sustainably.

I believe that President Mitsui made this decision out of consideration for all of Daihatsu's stakeholders, including employees, suppliers, dealers, customers, and investors.

It's a decision he made for the sake of the future of Daihatsu. As someone who has spent his entire career with Daihatsu, he has given everything to the company, and no-one embodies its values better than him. As a fellow leader, that means a great deal to me.

I honestly believe that maintaining what President Mitsui calls "Daihatsu's unique approach to manufacturing" is of the utmost importance to the entire Toyota Group as we continue with our efforts to make ever-better cars.

My experience with Toyota and Lexus has given me the firm belief that brands are built on trust, which has to be earned. Good brands take time to cultivate, which is why the brands that stick in your mind are the ones with heritage and stories.

Daihatsu has been doing business for 109 years. I believe that I understand and appreciate the value of their brand as well as anyone possibly can. The Daihatsu brand will have a key position, equal to that of Toyota and Lexus, in our efforts to make ever-better cars.

Of course, we at Toyota also have plenty of issues that we must overcome in order to achieve sustainable growth.

Implementing the Toyota New Global Architecture has once again made us aware of the difficulties involved in manufacturing small cars. At the same time, the importance of small cars is increasing as we face ever-greater environmental issues the world over, and as emerging markets continue their inevitable growth.

There are many things we have chosen to focus on as a company: in certain regions like North America, our strength lies in the mid-sized sedan segment and above. More generally, we have a good track record in our development of technologies―particularly environmental technologies.

However, I have frequently worried that we haven't managed to make our presence felt in the small car segment. Unless we gain the know-how necessary to better develop small cars, we may deprive ourselves of the chance to make crucial breakthroughs.

Furthermore, Daihatsu has the benefit of a spontaneous and independent nature. It's the best kind of honest, unpretentious company, with a culture of being down to Earth and respecting the work done on the front lines. I believe they may be in possession of something that Toyota has lost sight of.

I truly feel that we have a lot to learn from them.

We at Toyota are fixated on the need to be able to cover all of our own bases; you might say we are obsessed with self-sufficiency.

So, on one hand, while we have a long and credible history of producing small vehicles ourselves, on the other hand, our desire to go it alone has prevented us from achieving our full potential in terms of global competitiveness. Naturally, this decision was a difficult one to make.

In the end, the only reason we could make such a monumental decision was because we are talking about entrusting part of that obsession to none other than Daihatsu.

Toyota and Daihatsu first began to collaborate in 1967. Over a period of almost 50 years, our two companies have walked hand in hand, growing alongside one another while respecting each other's independence and competing on a friendly basis. This is the essence of collaboration in the Toyota Group, and we are able to entrust this much of our small car business to Daihatsu because they have stood beside us for such a long time.

Daihatsu excels at the kind of engineering that is needed in order to make affordable and high-quality products, and the company has thrived in the fiercely competitive and restrictive minivehicle segment. Going forward, small cars will continue to be the source of Daihatsu's competitiveness.

This is an opportunity for us both to stop feeling that we need to go it alone, and trust each other to take full advantage of our respective strengths. In other words, we can now focus on our core competencies. That, I believe, is the key to achieving and sustaining global competitiveness.

This is the kind of thing I have in mind when I talk about achieving sustainable growth through true competitiveness, and about making ever-better cars.

I would now like to pass the baton to Daihatsu President Masanori Mitsui, who has been, and will continue to be, our partner as Toyota, Daihatsu, and our entire Group join together in forging a path toward the future.