TRAVERSE CITY, MI – Every auto maker in the world is chasing Toyota Motor Corp. – but now they’re going to have to run even faster.

That message seems clear after President Fujio Cho reveals Toyota’s plans to “re-invent” itself during an address Wednesday at the Management Briefing Seminars here.

Toyota leads everyone else in nearly every important category and is breathing down the neck of Ford Motor Co. for the No.2 spot in global sales behind General Motors Corp. The Japanese auto maker accounts for 10% of worldwide automotive sales and targets a 15% share by the end of this decade.

With Toyota sitting on top of the world, why undergo a makeover? “Because any company not willing to take the risk of re-inventing itself is doomed,” says Cho. “The world today is changing much too fast.”

Toyota President Fujio Cho

While “steady success is good,” says Cho, “it can foster serious weaknesses. Complacency sets in, customer focus declines, creative ideas dry up, and before you know it, you are in trouble.”

Cho outlines three areas where Toyota began reshaping itself starting in 2002: The environment, globalization and “developing the skills and knowledge of our people.”

Because of its rapid growth, Cho says Toyota now has a ”short bench” of leaders to keep pace. “Obviously, using only Japanese advisors cannot be done anymore. We are stretched thin here (in North America) and elsewhere around the world.”

Under its re-invention scenario, Toyota has organized new methods to make its global operations more self-reliant, he says. As part of its executive development program, for example, top general managers and vice presidents from around the world gather for a week in Japan to bone up on Toyota’s philosophy and spend a second week in Philadelphia at the Wharton School of business to listen to professors and other experts discuss best management practices.

“This learning from outside helps our executives avoid being too narrow in their thinking and sets up life-long company contacts,” he says.

What he calls a “group leader development program” also is being initiated at Toyota’s plants for line supervisors to stress in-depth knowledge of its famous Toyota Production System. Some 60 group leaders have been certified so far, Cho says. The idea is to develop future local leaders, with less input required from Japan headquarters.

Toyota began looking at ways to reduce emissions and boost fuel economy starting in the 1990s, resulting in such breakthroughs as development of the wildly successful Prius hybrid car. Toyota soon will add hybrid versions of the Lexus RX 330 and Toyota Highlander cross/utility vehicles, and others are to follow. “Our hybrid system will also make up the heart of our hydrogen fuel-cell program,” Cho says.

Toyota also is targeting reductions in water, energy use, emissions and landfill wastes at its plants and boasts it’s ahead of schedule on all targets set for 2006. “In fact, energy use at our North American plants are down 17% since 2000, and four of our engine and parts plants are now at ‘zero landfill status,’” he says.

Such dedication to detail and kaizen – continuous improvement – are Toyota hallmarks. The company’s “re-invention” apparently is merely an extension of its ongoing philosophy.