The recalls tarnished Toyota's reputation for quality and raised questions about its ability to respond to problems that crop up in its rapidly expanding global empire. Then the tsunami and quake hit in northeastern Japan, in 2011, crippling production.
Despite crawling its way back to the top, Toyota still faces major challenges, such as intense competition not only from U.S. automakers but leaner rivals like Hyundai of South Korea and Volkswagen of Germany. Toyota's sales are plunging in China, the world's biggest auto market, because of a territorial dispute that has set off anti-Japanese sentiments, rallies and boycotts.
Toyota is expecting an 860 billion yen ($9.2 billion) profit for the fiscal year through March 2013, but its parent operation, centered on its Japan business, is still in the red.
Speculation has been rife Toyota may move more production abroad, where profitability chances are better. Toyota has repeatedly denied such speculation, vowing to keep production of 3 million vehicles in Japan..
Despite his introduction of foreigners in top ranks of management — still a rarity among conservative Japanese companies like Toyota — Toyoda stressed the changes he hopes to spearhead herald a return to Toyota's roots.
The Toyota Way, a production method that empowers each worker for quality control, also encourages employees to be innovative and independent.
Toyota's beginnings were humble.
Kiichiro Toyoda's father Sakichi Toyoda invented the automatic loom in a backyard shed, mainly because he wanted to help his mother, who often was weaving in their home. Those around him, including his carpenter father, thought he was crazy and laughed at him.
When Kiichiro Toyoda wanted to develop cars in 1933, not just keep making the by-then successful looms, people again laughed. Back then, Japan only had imported cars like GMs and Fords.
These days, the founding family has a status akin to legend in Japan. Its haiku-like sayings such as "always be studious and creative," and "always have respect for God," remain mottos at Toyota today.
But Toyoda shrugged them off, saying with a hearty, perhaps a trifle embarrassed laugh, that he didn't have them memorized.
If anything, being a member of the founding family was always tremendous pressure on him, especially while he was growing up in conformist Japan. He was typecast as a spoiled brat, and not evaluated fairly as an individual, he said, and he considered choosing another career.
Since joining Toyota in 1984, Toyoda has worked in NUMMI, headed the China operations and introduced Internet services at Toyota, when such projects were still relatively rare, because of his personal interest in online technology. He holds a law degree from the prestigious Keio University, and an MBA from Babson College in the U.S.
"He kept saying the same thing: We must make better cars. He never waffled. He was consistent," Takeshi Uchiyamada, promoted to chairman under this week's overhaul, said of Toyoda.
Under Toyoda and Uchiyamada's leadership, Toyota has continued to develop gas-electric hybrids, a technology in which the automaker has led the world.
The company has also introduced flashier edgier design not only in its Lexus luxury models but also its entry-level Corolla subcompact. Toyota raised eyebrows in the Japanese market recently by selling a hot-pink version of its Crown sedan, long seen as targeting the staid establishment.
The most important lesson of recent crises, Toyota said, was that Toyota should not ever grow too big or powerful as to forget the original spirit of making something from nothing. That was partly why he chiseled together the three-year electric-vehicle partnership with California startup Tesla Motors.
"I'm trying to apply the founding family's principles to present-day society, globally, and for the Internet generation," he said.
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