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Home Engineering: Technology, News & Trends No Surprises, Akio Toyoda Successfully Re-elected as Toyota Chairman

No Surprises, Akio Toyoda Successfully Re-elected as Toyota Chairman

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The logo of Toyota

June 19, Toyota headquarters in Japan’s Aichi Prefecture, Toyota held a general meeting of shareholders, where an important decision was Akio Toyoda was reappointed as chairman of Toyota Motor.

In addition, including Toyota Motor President Koji Sato and two executive vice president Hiroki Nakajima and Yoichi Miyazaki, including the other nine members of the board of directors were also successfully re-elected.

Although Akio Toyoda was re-elected, the shareholder turnout was the lowest ever, with some foreign media revealing that the shareholder turnout was only 72%, compared to the previous two years, when Akio Toyoda was able to achieve a maximum turnout of 96%.

And the biggest headache for Toyota lies in the fact that the recent counterfeiting incident and the overseas investors’ questioning of Akio Toyoda is very much in the air, and it is against this background that Akio Toyoda was re-elected as chairman.

Even though a number of investors were against it, Toyota chose Akio Toyoda in terms of results.

Record low turnout

In the face of this result, the outside world has long been in mind.

Akio Toyoda

The Toyota shareholders meeting, a total of 4656 shareholders attended, the meeting lasted about 1 hour and 50 minutes, although the details of the vote has not yet been announced, but Toyota said: including the succession of President Akio Toyoda, including 10 directors elected by Toyota, such as the 3 motions proposed by Toyota were passed by more than half of the votes in favor.

Behind this seemingly unruffled result, in fact, there are some turbulent “struggle”.

This is because after the revelation of the Toyota forgery incident in June 2024, overseas investors who hold about a quarter of Toyota’s equity expressed their opposition to the reelection of Akio Toyoda as chairman.

Moreover, two consulting firms that can exercise voting rights, proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis, had already recommended that Akio Toyoda should not be reelected to the position of chairman, citing the lack of independence of Toyota’s board of directors and questioning the board’s strategic holdings and return on equity.

And ISS in a proxy report bluntly, Toyota in recent times the boisterous vehicle test falsification events, its ultimate responsibility is undoubtedly the Toyota chapter male.

Akio Toyoda now although re-elected, but this year’s shareholders’ support rate has hit a record low, a foreign media revealed that this year, Akio Toyoda in the shareholders’ vote in the support rate of only 72%.

For reference, Akio Toyoda was re-elected to a second term at Toyota’s AGM in 2022 with a superb 96% voter turnout, though just last year, after he stepped down as president, his turnout dropped to 85%, already significantly lower than the year before.

And interestingly, the Toyota Group took the lead at the June 12 AGM of its company Automatic Loom, saying that Akio Toyoda would no longer be attending the AGM of his company.

The reason given was to change one’s attitude due to the problem of irregularities in certification in companies such as Daihatsu Industries. “The shareholders’ meeting is a place for companies to have a dialog with their shareholders once a year, and coming out on your own would change the meaning of the shareholders’ meeting, which is not the best policy.” Akio Toyoda said that in the future, he will personally go to the site of each company to communicate.

To put it in layman’s terms, he will no longer attend the annual shareholders’ meeting because he can no longer stand on high because of the frequent problems of his own companies, and he has to go to the front line of the business to understand the company.

However, it is worth mentioning that Akio Toyoda just said in a press conference at the end of January this year, in order to grasp the progress of the company, he will attend the shareholders’ meeting of the group’s 17 major companies.

Local shareholders’ support crucial for Toyoda’s re-election

Although there is a lot of opposition, it is also expected that Akio Toyoda can succeed in re-election.

This can be seen from the shareholding structure of Toyota, which is mainly distributed among local shareholders and overseas investors.

Toyota’s largest shareholders are Japanese companies such as banks, insurance companies and financial institutions, which have a shareholding of about 39%. Other Japanese entities corporate entities account for 25%, foreign investors for nearly 22% and individual shareholders for about 14%. Group company Toyota Loom is the second largest shareholder and parts maker Denso is the sixth largest.

This shareholding structure has allowed the voice of Toyota shareholders to be greatly centralized in the hands of local institutions and Toyota itself.

Much of the opposition to Akio Toyoda comes overwhelmingly from overseas investors, who do not buy into the cross-shareholdings that have long existed in Japanese companies.

The support of local shareholders, who have the largest controlling stake and hold a large number of Toyota shares in other subsidiaries of the Toyota Group, has provided significant backing for Akio Toyoda.

Retail shareholders, who hold nearly 14% of the equity, have been affected by Toyota’s record-high performance in 2023, and with profit returns and share prices rising sharply, Akio Toyoda’s popularity is arguably unaffected by the counterfeiting scandal.

Still, there were a number of direct references to Toyota’s fraudulent certification testing scandal at the AGM, demanding clarification from Toyota’s board and management.

CEO Tsuneji Sato expressed his apologies at the AGM, the first time Sato has spoken in public since the irregularities were made public. Its introspection, “in the absence of the correct certification process” for mass production and sales, and said the company is Toyota chapter man as the center “committed to the fundamental reform of the culture.

See, whether it is adjustment or reform, Akio Toyoda is still the soul of Toyota.

“Is Toyota okay?”

At yesterday’s Toyota AGM Q&A session, a shareholder bluntly asked, “Is Toyota okay?”

Toyota’s stock price and market capitalization have continued to sink since the June 3 forgery revelation, with the stock price falling more than 11 percent cumulatively and losing about 3.83 trillion yen, or about $2.8 million, in market value.

Cars from Toyota

Although a number of executives, including Akio Toyoda, have apologized repeatedly recently, this obviously cannot satisfy all shareholders because Toyota’s sales and brand reputation have indeed been affected.

Some local Japanese consumers have said that they do have Toyota-branded cars, but are considering whether to switch to another brand. “I think things like this may happen again in the future.”

Although Toyota China also quickly responded that the models sold in the Chinese market have nothing to do with this incident, but from the fact that the price has begun to “big dive”, which is how the whole society is responding.

On June 18, the official microblogging of FAW Toyota announced that it would hold a 24-hour sale on the same day. Among them, the compact SUV Corolla Renegade price of 99,800 yuan, limited time comprehensive discount of 30,000 yuan; compact sedan Corolla price of 79,800 yuan, limited time comprehensive discount of 43,000 yuan.

And the counterfeiting thing affects not only the Toyota company, but also the upstream and downstream industry chain.

A Japanese used car dealer staff said that recently almost no customers intending to buy the vehicles involved in the incident can not be seen. Although other vehicles can occasionally be sold, but the overall sales are not ideal. Compared with three months ago, this month’s sales are down by about 50 percent.

Moreover, used car dealers are not the only ones who are having operational problems, and how to deal with the existing inventory has become a major problem.

Since June 6, Toyota has been suspending production of models involved in certification fraud, and until June 28, Toyota Motor East Japan had to suspend production of three models at its Miyagi Ohira Plant and Iwate Plant, namely, “Corolla Field,” “Corolla Aisin,” and “Yaris Cross,” which are now being sold at its Miyagi Ohira Plant. “Yaris Cross” at its Miyagi Ohira Plant and Iwate Plant.

Shuangye Sangyo, a major supplier of body parts for Toyota, is also shutting down some production lines at its plant in Hiraizumi-machi, Iwate Prefecture, from 6 to 28, and employees will be assigned to inspect and maintain equipment or work on other production lines.

Supply chain disruptions and economic impact of Toyota’s production halt

It’s worth noting that as of May of this year, Toyota’s supply chain alone contained 39,000 companies with transactions totaling 20.7 trillion yen. This means that the amount of compensation is even more of an expense. According to Mizuho Securities economic analyst Takataka Ishiyama estimated that due to the production stoppage, Toyota’s monthly compensation to suppliers may be as high as 22 billion yen.

Moreover, the automobile industry is a key economic pillar of Japan, and the outbreak of the counterfeiting incident has made the Japanese economy worse.

To know, Japan’s manufacturing industry was exposed is not the first time, but also coincides with Japan’s domestic economy has long been in a downturn, Japan’s Cabinet Office previously said that, as of March, Japan’s gross domestic product (GDP) converted to an adult rate of contraction of 1.8%, while the preliminary data show a contraction of 2%, less than the economists expected to be flat.

In the first quarter of this year, Japan’s real gross domestic product (GDP) fell 0.5% on a year-on-year basis, or 2.0%, following a positive turn in the fourth quarter of last year, negative growth again. The data show that domestic demand in the quarter fell 0.2%, of which accounted for more than one-half of Japan’s economic weight of personal consumption fell 0.7%, the fourth consecutive quarter of negative growth.

At the end of last year, Toyota Motor’s Daihatsu Industries of Japan, a subsidiary of the counterfeit production stop, resulting in the first quarter of this year’s GDP lower, economic losses of more than 100 billion yen (about $700 million). Japan’s domestic think tank estimates show that if the relevant models to stop shipments for four months, Japan’s GDP or reduced by about 98.4 billion yen (about 688.8 million U.S. dollars), coupled with the loss of related industries, the GDP is expected to decrease by about 244.1 billion yen (about 1.76 billion U.S. dollars).

In addition to the credibility and quality crisis, in the face of new energy trends, Toyota is also losing the advantage of the oil car. Some Japanese media commented that Japan’s electric vehicles are already in a backward situation. Pure electric and hybrid models sold on the Japanese market last year accounted for only 3% to 5% of all car sales, far below the level of China and Europe.

In this series of impact, Toyota can not save the tide, depends on the next Akio Toyoda how to turn the situation.

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