Toyota Motor Corporation (7203) Earnings Call Transcript & Summary

Good afternoon, Yuta Tomikawa speaking. Toyota Times News just began quite recently, but this time, we are having a new broadcast, which -- because Akio Toyoda, the President, wants the message to deliver to the stakeholders, and therefore, we are having this a news broadcast. Good afternoon, audience and viewers of Toyota Times. Effective April 1 this year, the Takeshi, Toyota Chairman, will resign and I will resign for President and become a Chairman of the company and new President will be served by Mr. Koji Sato, as it was decided on the meetings of BoD today. And in order to convey that accurately and swiftly, I set up at this meeting. First of all, I would like to start by sharing with you my thinking behind this decision. These developments were triggered by the pending resignation of Chairman, Uchiyamada. I thought that the best way to further Toyotas transformation would be for me to become Chairman in support of a new President and this lead to today's decision. Chairman Uchiyamada that has long supported me in all imaginable way. I would like to take this opportunity to express my most profound appreciation. Thank you, indeed, so much Chairman Uchiyamada truly. Now appointed President immediately after our companies fall into the red due to the global financial crisis, and following that, our company faced a series of crises that threatened our survival, such as the global recall crisis and the Great East Japan earthquake. In retrospect, these 13 years have been a period of struggling to survive one day after the next, and that's my honest feeling. I believe that in terms of crisis took path appear before us. One is the path toward a short-term success or a quick victory. There other is a path that leads to back to the essential qualities and philosophies that gave us strength. I chose the latter. This was the past word through the philosophy to make ever better cars and to become a best-in-town company, beloved and relied upon by stakeholders in each region around the world. In other words, it entailed centering our operations around products and regions. This has been a rough path requiring tremendous amount of time to bear fruit and one understood or appreciated by those who focus on the short term, and time, indeed, it has taken even so as a result of 370,000 members of Toyota striving in their various roles in each town around the world to make ever-better cars. Our product had been greatly transformed. We have revamped long-term best sellers such as the Crown and Corolla, and we have brought back sports cars in the form of the 86, Supra and GR Yaris. At the same time, we have also paid attention to our commercial vehicles. The synergy between the 3 pillars of TNGA, our in-house company system and our region-based structure means we have people focused on fulfilling the world's needs regardless of the job of vehicle. And I believe that with them, we were able to create such gamble in Toyota. Then in 2020, we laid down the Toyota philosophy, which clearly state the beliefs and values that must be passed on. I hope that the Toyota philosophy will be serve as a place to which the next generation of top management can return. Should it ever lose its way, I believe that over the past 13 years, I have built a solid foundation for passing the baton forward. Next, I would like to explain the reasons for appointing Mr. Sato as the new President. One is that he has worked hard in both places of car making to embrace Toyota's philosophy, techniques and practices. Those are exactly the traits I would want. Who ever stands at the top of Toyota to embody. Another reason is that he loves cars. There was a time when Mr. Sato was struggling with what he should convey at a Lexus dealer convention. My advice was, rather than try to be like me, I want you to value your individuality. That's all I said. He responded by saying, if Morizo is someone who loves driving cars, I'm someone who loves making cars that makes drivers smile. Being able to say that you love your company's products is truly important. I believe that Mr. Sato, as our new President, will take our product-centered management even further forward. Another thing that he has going for him is youth. To promote change in an era in which the future is unpredictable, the Head of Management must continue to stand on the front line. For that, stamina, energy and passion are indispensable. Being young is itself a key attribute. I told Sato, don't try to run the company on your own, but as a team. He is not the only member of staff I have nurtured over these 13 years. I believe that I have nurtured many colleagues with diverse personalities. Innovation is essential for creating the future. I believe that innovation is created when diverse personalities work together towards a shared goal. When I look at incoming President, Sato, I see someone who, rather than try to please me as company President, has faced a challenged master driver in Morizo and wanted to protect the driving feel of Toyota and Lexus. He has wanted to make ever-better cars. He has wanted to earn the smile from the master driver, Morizo, himself. I think that is a passion that has driven him. I myself am a car maker through and thorough. I believe that's how I've successfully transformed Toyota. However, a carmaker is all that I am, and I see that as my own limit. A new team under upcoming President Sato has a mission to transform Toyota into a mobility company. I think that Sato too is a carmaker like me. He is now the same age I was when I became President. He has the youth and like-minded colleagues. I expect this new team to go beyond the limits that I can't break through. I believe in the future that the next generation will create. I invite you to look forward to the future of Toyota. Thank you very much. So as it was mentioned by President Toyota, the Chairman, Mr. Takeshi Uchiyamada, that will be resigning and President Toyoda will become Chairman Toyota. And then Operating Officer, Mr. Koji Sato, will become the new President. So just a moment ago, there was a photo session by the 3 gentlemen, and we're going to be showing this photo that was just taken a few minutes ago. So probably the journalists and media people would like to do a screenshot. So please use this time to do screenshots. So I will take 30 seconds to share this picture. 10 seconds remaining for the screenshot. Five. And we are done. If there are People who was not in time to do the screenshot, after we and this live broadcast, there will be sharing it on Toyota Times website. So from here, we would like to invite Chairman, Uchiyamada and also Mr. Sato, Operating Officer. Thank you both for joining us. And I'd like to introduce the profile of Mr. Uchiyamada. He has joined Motor Corporation in 1969 April. So this was a Toyota Motor Company before changing its name to Toyota Motor Corporation. 1994, he has been appointed to Chief Engineer of the Vehicle Development Center 2, and that is where he led the development of the Prius. In 2005, he became Executive Vice President, and 1998, he became the Director and the Managing Officer. And 2003, the Senior Managing Director and 2005, Executive Vice President. And after that, under President Toyota, he has served as the Executive Vice President, Vice Chairman and Chairman. So from Mr. Uchiyamada, we would like to receive on some more awesome words.

I am Takeshi Uchiyamada, Chairman of Toyota Corporation, and I will resign my post as Chairman as of April 1. As President Toyota mentioned earlier, the current -- the Toyota structural change has been triggered by my resignation. So I should begin by discussing that decision. I had been considering the timing of my retirement for some time because I saw a need for generational change. The longer you wait, the older you get. I felt I should resign before these young people told me to. Looking back on my own life this career was fixed when I decided in my second year of a junior high school that I would join a car company in the future because I wanted to develop cars, and I'm very happy that I was able to join the car company of my choice and work in development. My 54 years at Toyota can be summed up in one word, grateful. I am extremely grateful to the senior employees and supervisors who trained and nurtured me and to my colleagues and subordinates with whom I have worked with. I'm also grateful to the company for having giving me the opportunity to be involved in various forms of development. The first half of my 25 years as a Board member was focused on globalization, and the second half was centered on structural reform. I witnessed President Toyota's leadership as he devoted his heart and soul to the struggle to recover from the global financial crisis and the recall crisis. And with that background, one of the reasons that I decided to resign was that the foundation for passing the baton to the next generation has been laid. Finally, I would also like to convey how grateful I am to our customers and shareholders for their warm support. I humbly request their continued support and assistance for the soon-to-come new structure. I have had a truly fulfilling life as a Toyota man. Thank you very much.

Thank you, Chairman, Uchiyamada. I mentioned that he was able to join the car company of his choice and work in development. But talking about Chairman Uchiyamada, he's the father of the Prius. The development of hybrid vehicles. So from here on, we would like to look back at Chairman Uchiyamada and the history of Prius. [Presentation]

Prius, of course has been evolving in terms of exterior looking and also the -- what's inside. But the basis of that, I think, is the spirit that's been passed on from Mr. Uchiyamada.

And the light ordinary model change, in the case of Prius, it's not the conventional engine but it introduced, the new powertrain. And as Mr. Uchiyamada mentioned in the video, sometimes it's very convenient, but it has caused issues as well. And right before the entry into the 21st century, the Prius minimized those lows and impact on the site and maximized the convenience of that and develop -- let's develop such a car. And I think doubling the fuel economy is really an outstanding target and not as a company management, but rather as a position of Chief Engineer. He took the leadership and led the entire work. With no established image, it created the concept and also he created the Prius. And that's why he's called Mr. Prius. I think to create 1 from 0 is really an outstanding accomplishment, but [indiscernible], Mr. Uchiyamada, as President mentioned, doubling the fuel economy is something that cannot be accomplished with existing internal combustion technology. And because such a high target was given such innovative breakthrough was done. But at that time, it was still in the process of research and the actual introduction of concrete product will be further into the future. But for such a planning, we approved to come from a certain project was the top management of then. And without their decision, we were not able to given this opportunity to develop hybrid technologies. It was really demanding work, but it was a great opportunity given to the engineer and chief engineer. And of course, I guess, the entire team was unified in development. But as a newcomer, new entrant to the company, Sato-san was there. When Uchiyamada San was joined at Toyota, I was born in the same year. So it was a series of challenge. Of course, focusing on hybrid -- we are working on the Prius. But of course, the teams engaged in the development of others. They wanted to compete against those Prius projects, and therefore, the entire Toyota was very passionate in developing an engaged and dedicated efforts. And that resulted in new Prius. Now what sort of significance Mr. Uchiyamada has to [indiscernible]. Well of course, he is the Chairman, but before that, he's like a very gentle and generous older brother. He has always had been supportive of me like a big brother, looking after a mischievous younger brother. And for the things that -- what I don't want to hear from the Honorary Chairman, for example, he says -- for example, don't go into the races and stop driving cars. But I'm not an engineer, and when in order to show the path towards making better cars, the only way I thought I could do it is to drive myself. That's what I explained to Uchiyamada-san. Although he said that I shouldn't, I just continue to do it my way. But on the other hand, when I'm in challenging times, he is the most supportive person. And recently, we have a very good teamwork between us like the product development meetings. In this new product development new meetings, I think the atmosphere of the discussions we have there has changed between the top management. Even when I changed and turned completely the direction, he will be talking from a very practical side and a very neutral way and be able to convince the people and fix us back on track. So he's a very respected person with his unique -- with his personal characteristics. Well, for my part, I see President Toyoda having the full motivation to push the reform. But in front of everyone, I will be always supportive on the side of President Toyota, but of course, there's times that I have a different opinion. But I would say, the different opinion is where no one is listening. So in the very early timing that we haven't decided or made a decision yet, we -- the two of us would be talking behind the scenes and discussing about the different opinions that we have. We try to adjust our direction through this discussion. And then once we stand in front of the other team members, then we'll be talking about this same decisions and judgment. But I was a little worried when he comes to me and says, well, I want to take some time to talk about a matter because he's always raised his objections. Well, what I was always been against with was about Mr. Toyoda engaged in Motor Sports being -- participating as a driver of -- he is an indispensable person. And of course, to me, he's saying, I'm not a racing driver. I'm just driving and not doing racing. That's what he says. But when you just do a rally, you're fighting, competing yourself. But when you do on the circuit, you're competing against others. But even though he pushed through his own ways, he has been able to contribute to create more funds and create the momentum for rally and racing motor sports. But right now, you're changing your position. So I hope that you will contribute from a different angle, but about hydrogen society -- in order to achieve hydrogen society, it was actually Mr. Uchiyamada who made this story very easy to understand and made that proposal that is possible to support. And then the project was worked on by Sato-san. And then for the hydrogen engine, Mr. Sato worked on preparing the vehicle. And I thought the most to drive it because everyone thought hydrogen is dangerous because it might explode, but I showed that having the President organization drive it, it is safe. And I've made so much contribution, but he doesn't commend me. He doesn't compliment me. Well, I think you are having your great -- having great relationships. So President Toyoda, is there something you want to say to Mr. Uchiyamada?

Yes. So before I became President, Chairman Uchiyamada has always supported me as my senior, and when we were both Executive Vice President. He also was very supportive to me as Executive Vice President responsible for Technology and Chairman -- after I became President. So he was like this big brother, always looking after the mischievous younger brother, and it was Chairman Uchiyamada, who most supported our pursuit of making ever-better cars. He is Mr. Prius and Chairman Uchiyamada is a great engineer who embodied through cars, the idea of taking on challenges for the future. And for me, he's someone who offered the greatest understanding, someone I could respect for his greater experience in life and who always gave me objective neutral advice. I would like to take this opportunity to thank him once again. Thank you so very much. And also, he loves to get on the yachts, and he's -- so after resigning as Chairman, I think he'll have much more time to get on the ships and yachts that he loves. So be careful, that will be my only advice. Now let us continue on. And Mr. Koji Sato, Operating Officer, who is going to take that position vacant in April. Mr. Koji Sato joined Toyota Motor Corporation in 1992. And since '94, he has been engaged in the development of parts and components of Corolla and Lexus. And in 2016, became Chief Engineer for LC. And since 2020, he became President of Lexus International Company and GAZOO Racing Company, and he is currently 53 years old. So I'd like to ask Mr. Sato to say a few words.

Thank you for the introduction. I am Koji Sato. I am immensely humbled to be entrusted with this tremendous responsibility of carrying forward the passion of President Toyoda. When I received the unofficial notice that I would be appointed President, President Toyoda told me two things your way. My thoughts are now about how to fulfill my role in my way in the new management team. We're talking about doing things my way. That means I'm an engineer and have long been involved in car making. I love making cars, and for that reason, I want to be a President who continues to make cars. I would like to show what kind of company Toyota should be through our cars. That's what I want to do. Cars that are fun to drive and cars that support mobility. And cars in the future will evolve into the concept of mobility itself. Amidst such, I hope to preserve the essential value of the car and propose new forms of mobility. Our new team under the theme of inheritance and evolution will implement product-centered and vision-centered management while valuing the philosophy of our company's founding, and we'll endeavor to fully redesign data into a mobility company. I look forward to your support. Now as President of Lexus Company and also President of GR, what sort of challenges did Koji Sato took up? I would like to share with you the video images. You can see smiles on his face together with cars. [Presentation]

Sorry, the microphone was not on. So could you repeat what you have just said. Once again, truly, he really loves cars and he shows great smiles when he talks about cars. It's the first time that he ever praised me.

No, I never praised you, Sato-san, but the trial on those vehicles, both of you look like children.

And that was the film created for Lexus convention and master driver driving the car. -- trying to check out the last point before putting it into the market, and that was taken. And I didn't realize we were really looking like children, and both of you -- we really felt that both of you love cars, and that was seen in that video.

I do, but rather than just driving it, I really love car making itself. Akio-san really loves cars itself. It can't be hidden or you can't just suppress it. But I really want to have those people who love cars to try the great cars and you want to offer such cars. So in the different types of careers. And of course, the mission is different. In my case, limitation of myself as a carmaker. And he's also a car maker, but his mission is to transform the company to a mobility company and with a young team accomplish that, that's an important mission and that's on his shoulders. So the President will continue to make cars was mentioned meetings. This scene was shown in the VTR when the Lexus President was handed over to you. And that really somehow shown this handover of the presidency that we have today. Yes, we could use that as it is. But this time for this, how did you receive this information from Akio-san? How did he cap you to be president?

In December, in Premium in Thailand, there was the endurance basis. And when rates was going on, I think -- can I have a moment, he said. Can I have a word? And really, we were still accelerated in the circuit after the race. He just called me to talk with him, and he said, can you listen to my request? And I said, of course. And he said, can you be President? And I don't have words. I don't know how to react to that. I didn't fully realize what was taking place there. As I look back, when I accept that he didn't want me to become nervous or to take it too seriously. So he had that in his mind, but at that time, I thought he must be joking. What is waiting for me after joke. That's how that was conveyed to me informally. Did you predetermine that you're going to convey that?

Well, I thought informal information provision is important, but I think I have my own way of capping him and giving him informal information. And of course, rather than just receiving approval in the President's office, as you saw in the video, in the car together. In many cases, we met each other with other mechanics and technicians in the gemba. So rather than calling him to come to my office, but rather as an extension of those ordinary contact with him other people probably giving him the information would be better. And I was looking for the timing, but of course, I didn't wait until the new year comes, but that's the race of circuit, and of course, it must have been very noisy. So there surrounded by other people, but they couldn't hear. So even if you didn't introduce yourself to the closed room, other people wouldn't be able to hear. So if I take into a special room, other people will become suspicious, what are they talking about? So in the ordinary normal setting, I put that request to him. So in the circuit and racing cars driving and we were watching them together, and he brought me very casually. But after that, we discussed together just between us and that was full of passion about cars and with sort of passion and philosophy President Akio led the company and actually watching racing cars racing in the circuit is what we discussed with him. And that gave me the time to somehow to calm me down, but it was really when quintessentially, you guys to handle this baton, I believe. So next, there is another slide that I want to share with you. In Toyota, we have an executive appointment committee, and these are the members here on the slide that consists of this committee. More than half are the outside directors of -- Board Directors of Toyota, and with these members, this top management has been decided. How was it decided this time? So we have an interview, a clip from [indiscernible], who is also a member of this external appointment committee and also a former Chairman of IP.

The process followed the process for every -- the appointment of every senior executive, and that was that Akio-san and Uchiyamada-san came to the executive appointment meeting and put forward their suggestions to that meeting. We were very fortunate to have 1 hour with Sato-san, who explained to us his journey through Toyota from being a university graduate, which was very, very interesting. But the procedure was very clear. It was the executive appointment meeting that considered the change with Uchiyamada-san retiring and Akio-san taking his place as Chairman of the Board with Sato-san coming in as the new President and CEO. I have very positive ideas and thoughts. The outside Board of Directors, the three of us, were fortunate that last year, Sato San presented to us on GAZOO Racing, the organization that he is President of. Immediately, I felt this exchange of positive energy between him and ourselves, and I was inspired by that. In fact, I told several people after having met him, and he talked of challenges and overcoming them, and this tied in perfectly with a key element of the Toyota way from 2001, which was the spirit of challenge. He talked of giving to the team and the creation of teams and him leading some teams and being just a member of others. And I really like that, and he talked of creating true partnerships, both internally within -- with the workforce at Toyota, but externally with stakeholders and with the wider society as a whole, our current and future customers and believers in Toyota. I know that this man can be trusted, Sato-san. So Sato-san, for me, he will take Toyota forward through mobility for all. He will help create mobility for all. And I'm confident that he will produce [indiscernible] in teams happens for all.

So for this decision on the top management, it was a unanimous decision by this Executive Appointment Committee, and everyone has been determined to support the new top management. Actually, President Toyoda had made several times comments about who would be suitable to become the next President, and I picked up some of those comments. 370,000 employees throughout the company would be a candidate, and he has mentioned that someone who has mastered the company's philosophy, skills and conduct, namely the Toyota philosophy and TPF. He also mentioned that it will be the person -- the person will need to keep an unwavering commitment to Toyota's purpose as a company. And moreover, in last year's General Shareholders' Meeting, when there was a question from the shareholder about what kind of person will be suitable to be the next President, he responded in this way. He said, I came on the scene as President that not may have been -- not many welcomed. I'm considering the options for personnel and timing to ensure that the next President is someone that all will want. So I'd like to ask frankly, President Toyoda, what made you think that he, Mr. Sato, is suitable as the next President?

Well, first of all, I think it's his youth. Also the fact that he loves cars. He says that he loves to make cars that make the master driver smiles. It's not the just one time that he said that, he has said this many repeated times. And these two will be the minimum requirements, I think. And another thing will be -- he is the person who embraces Toyota's philosophy, skills and conduct. He's a person who has made great efforts at the gemba of cars, and that's what I've always been observing. And if he is a person who becomes the top management of Toyota, it needs to be a person who will be able to show people, by example, at the gemba. And in that sense, I think he has the qualities. If I were to add another factor -- and this is what I've communicated to him also. I think it's important for the President, not the next President, to manage the company by himself, but as a team. So in that sense, I believe the new team that we are now discussing together, and we want to work together with our new management team and Toyota. I think I expect a big expectations that he's going to create a good team to work together and that will be the main reasons why I have decided on him. Well, it's less than a year that I've joined -- after I joined Toyota, and I've always been watching you. I think you have a very sensitive sensor to capture those ideas, and then you take actions immediately. And I think that connects into the strength of Toyota. So your sensor again clicked. My sensor? So about this timings. Well, about Sato-san, Koji-san. I don't look -- think about the titles that people hold. I always think about what role this person is playing or try to think about that person's personality. What will be most suitable for the skills and personality that this person has. That's the way I look at people. That's why I said, of the 370,000 employees who will be the candidate, and I said, I want to have a person work with the team. And his role would be President. When you think about the team, the next team that will be managing the company, I thought Mr. Sato will be suitable to take the role of the President. And the reason why I thought of that is because he was the person who was the successor to be the President of Lexus International Company and also GR company. At that time, he has brought the changes to the companies to the next chapter. He brought the companies to the next chapter, and there are a lot of engineers in the company organization. There's a lot of people who want to work with Morizo, but there's also a lot of people who don't want to be so close to Morizo. But these people also want to make ever-better cars, and those kinds of people are in this team. And also there's people who've not really have got in contact with me before, but in his team. Therefore, when we think about transforming into a mobility company, up to now, I was able to use my own personal skills to lead the company to this point of time. But going forward, Toyota needs to continuously and also with itself continue to develop. And that I think it shouldn't always be under me. There should be a new team that combines their strengths and brings Toyota to the next stage. I want to bet on that new team. And also he has youth. So for that young new team, I hope that everyone will have strong expectations. But in terms of the timing of the change, right now, the automotive industry is now right in the middle of once-in-a-century transformation and change us facing various challenges. And so you took up various challenges. But why now to change the top leadership because Uchiyamada-san is resigning his position. So that's a key factor. So because Uchiyamada-san is willing to stay.

I might have been able to consider the position, which is neither President nor Chairman. That was conceivable. However, initially I presented that idea as a suggestion. And at that time, he wasn't really happy judging from his expression, but changing a new situation. Right now, when I told him I will succeed you, he said at long last, you made that decision. That's how he expressed in his face. I think personally, he was feeling that now is the right time to change the leadership, but I think he was waiting for me to make that decision. And he gave me the opportunity and forum to present this change. So that's why I told you that Uchiyamada-san has been a big brother to me.

Is that how you feel about that, Mr. Uchiyamada?

Well, the change shouldn't come suddenly in the past few years. Various ideas have been explored and preparations have been made. And as we did that, initially, we had to have a certain image of the successor as President. So after that as more concrete image has been presented have started talking about the specific names. So probably through a very good process. I think we've been able to decide on the natural generation the successor to the President. Of course, who is going to be Chairman initially, we didn't agree we had different opinions. But for Akio Toyoda, in a broader sphere, of course, we have 370,000 people for the Toyota Group, but we have 5.5 million workers in the automotive industry. And going even beyond that, for the entire Japanese industry, I want Akio Toyoda to play an active role for the entire Japanese industry while paying your attention to his own personal health. But for him to be able to do that, the title that is appropriate to assume such a role is necessary, such as Chairman of TMC. So I personally feel that it's been able to a place very appropriate situation, and a good decision was made at the good timing. I think on the remotely any media representatives are participating, and we would like to receive and entertain questions from the media at this juncture. So Mr. Yuri of External Relations Department of MC for this part.

Thank you very much. Those journalists and media representatives participating through Zoom, I would like to entertain questions. [Operator Instructions] First of all, Ms. Masatoshi-san of [indiscernible] Journal. [Operator Instructions]

Masatoshi of [indiscernible]. The announcement was made quite suddenly, and I was really surprised and listening to this press conference. I have been listening to President Toyoda's voice, but he's going to stay on as Representative Director and Chairman. But how are you going to be involved with the corporate management as Chairman? And Mr. Uchiyamada mentioned that, he wants with President Toyoda to take a broader active road for the entire industry. Could you share with the policy market of contacts going forward? And in relation to that, in terms of the next-generation management team, what is your thought about that? Of course, Mr. Sato as present as you saw on news, but could you share your view on that, Mr. Toyoda?

Yes. Well, effective January, I'll become Chairman and Representative Director. And as was mentioned by Chairman earlier the new President, Sato, will be the President. That will ensure happiness of 370,000 employees of Toyota and creating ever-better cars. And if that is his role here in Japan for the entire 5.5 million people and throughout the world, for those people engaged in the automotive industry, I think the automotive industry should be at the center and the heart of the industry that can create and shape the future. So I would like to assume a role of a cheerleader for that, supporting the automotive industry throughout the world. And for that, I will continue to support and cheer for the executive team, focusing on new President Sato. In terms of the team structure of the next management team, of course, President will be handed over. And therefore, we made an announcement here in this company's office. But as a team, with the right person in the right position, I hope that the mission can be continued to create ever better cars. And also another important mission, to transform the mobility company. And I hope the younger members of the team, what kind of vision and what kind of action they take? And also, as I said, I'm a carmaker. If I tend to could get myself involved there, probably what I can say would be just limited to the views and ideas of carmakers. I feel my personal limit as a carmaker and fully understanding being a carmaker. But as a mobility company, well Sato-san isn't a carmaker used as a weapon here with other members of the new team, I hope the mission that I couldn't accomplish, that is transform to the mobility company is something that Sato-san can really accomplish as a leader of that. Is there are any comments that you would like to add?

Thank you very much. In terms of the structure of the meeting, what Toyota has accumulated over the years, that is the common value for the company, and the team members fully share that value. And I would like to achieve this scaled management. And because we share the same philosophy and value, we would like to have the new team fully embodying that. Of course, we live in the world where the right answer is not known. And therefore, the part and ability to take action, to implement things and focusing on those abilities, I would like to create a new management team.

We'll go on to the next question from [indiscernible] [Operator Instructions].

I'm [indiscernible]. I hope you hear me. It is slightly similar to what Masatoshi-san just asked. But once again, I'd like to ask now Mr. Toyoda becoming Chairman. You said that up to now, you relied on your personal skills to lead the team, and I think you were the center of this organization. But now becoming Chairman, what kind of role would you like to play in the organization? That is what I want to hear from you.

To be more concrete, the role inside of the organization will be the Chairman of the Board of Directors meeting and also being the master driver. I believe that will be my roles in Toyota. And my role as master driver will be that for the product that will be developed, I need -- I have the role to check if it has the taste as Toyota and its cars in order to -- sharing my opinion will be my role. So Mr. Chairman is next to me. So I'm a little hesitant to say so, but probably my activity as [indiscernible] will not change largely. That's what I believe.

So for outside of the company, what are you envisioning?

Well, for the activities outside the company, when we look -- think about the car industry, we're in a once-in-a-century change in timing. And thinking about that big change, I mean we also -- you want to protect the competitiveness of this country. In order to improve that and also to strengthen that, the new team with the new Chairman, the new President will have to bring our forces together and focus on improving the competitive -- strengthening the competitiveness of the country to be able -- if we can enhance the competitiveness of carmaking, that can be the center of the development -- further development of the country and also to contribute to the country. And also, it will be contributing to create more supporters of this industry. So for now -- we have -- are going through a transformation and also we see these many challenges in front of us. So there will be -- I will be supportive in my new role, too, but not -- a little different to my current position as President. I will have a different position -- from a little different position to support the new management team. I think that will become my role. Thank you.

[indiscernible] Let me move on to the next question [indiscernible] [Operator Instructions].

[indiscernible] Newspaper. President, several times you mentioned that you feel the limitation as a car maker. You said it several times. But to put it from a different perspective, the issues Toyota is faced with or challenges that you are faced with is related to that. When you talk about limitation as a carmaker, could you elaborate that more concretely? And how do you intend to improve that to pave the road -- pathways to the next generation?