Toyota Kenya turns to Japanese CEO

Toyota Kenya is set to hire a new Japanese managing director following the resignation of South African Hylton Bannon just two years after his appointment to the helm of the auto dealer. The firm said in a paid advertisement notice that Mr Bannon quit to join his family in Cape Town, but sources at the firm told the Business Daily that he was replaced after failing to fit in Toyota’s corporate culture. The traditional Japanese management style practised by Toyota tends to focus on team spirit and consensus more than a boss who leads from the front as in the western way of running executive suites. Mr Bannon was the first non-Japanese MD to head Toyota Kenya when he replaced Mr Tomonori Umehara in October 2009 and his tenure has been marked by a significant gain in market share by rivals GMEA and Simba Colt. Toyota’s first MD was Ito San, also Japanese. Now, the auto dealer is seeking a replacement from Japan to help grow its market share and cement the company’s position as the number one seller of new motor vehicles. Dennis Awori, the chairman of Toyota Kenya, will double up as the dealer’s managing director for the next five months.“Ambassador Awori will take over the reins of the company …pending the arrival of our newly appointed managing director from Japan in April 2012,” said Toyota Kenya in an statement.Japanese multinationals like Toyota, Sony, and Olympus Corporation have a long tradition of filling their board room and executive suites with Japanese professionals across their global operations. In Japan, top managers often rise through the ranks while avoiding making waves through radical reforms or open disagreements with colleagues, and take the top job once they have proven themselves as a safe pair of hands, reports the Financial Times in one of their editorials.  Data from the Kenya Motor Industry Association (KMI) shows that Toyota’s market share has dropped from 26.6 per cent in 2005 to 25 per cent.  The most striking aspect of the shifting market share in Kenya’s auto market is that gap between Toyota and its nearest rival has narrowed from 8.8 percentage points to less than 0.5 per cent. The firm’s market share along with that of General Motors stood at 25 per cent in the 10 months to October with Toyota sales of 2,525 units being ahead of its main rival by only 19 units. Toyota relies heavily on salon car sales and its market share drop has been linked to the global economic meltdown and Kenya’s 2008 post-election violence that slowed down demand from private companies. The massive earthquake that hit Japan in March this year has also affected supply of new vehicles to local dealers, including Toyota. Rivals like Simba Colt and GMEA have however managed to grow their market shares despite these challenges riding on new demand from the commercial trucks and public transport markets respectively where they are strongly represented. The saloon car market has in the past three years come under serious attack from imported second hand vehicles, increasing the pressure on the major players in this market such as Toyota and CMC Motors.  GMEA has been the largest beneficiary of the government’s policy to phase out 14-seater vans from the public transport sector, especially in major towns and the capital Nairobi. The policy has boosted GMEA’s sales of its Isuzu brand of buses as investors upgrade to higher capacity buses which are hard to buy from foreign second hand markets. Simba Colt, which sells Mitsubishi trucks, has benefited from increased demand for trucks from the trade, manufacturing, construction, and agricultural sectors. The growth opportunities in the commercial trucks market has drawn the interest of local dealers such as Toyota and Tata Africa -which plans to assemble trucks locally to grow its market share. The new Toyota MD will be expected to drive the firm’s diversification plan with a focus on the heavy commercial vehicle segment of the market.