Third, Toyota's model proliferation had created confusion most likely internally as well as within the dealer channel. The differentiation of one model from the next was increasingly difficult to define. Toyota had continued to gain market share due to its exceptional new product introduction and product launch processes. Yet auto maker found itself six months into 2009 struggling to keep sales from dropping further, and seeing Hyundai, Honda (HMC), and Ford all generate new auto designs and launch them faster. All of these symptoms taken together pointed to a more fundamental issue for Toyota, and that was they were losing touch with the unmet needs of customers and the pace of customer's preferences changes over time. Summary and Recommendations

Mr. Inaba faces a daunting yet achievable challenge of redefining the processes, systems and mindsets that Toyota will need rely on to stay better aligned with customer needs and preferences while re-energizing the new product development and dealer selling processes. First, there is evidence that the primary means of staying aligned with customer needs is either broken or not as efficient as it used to be. Mr. Inaba needs to concentrate on creating better customer listening systems, and while he is out visiting dealers...

Second, he needs to be more focused on leading-edge designs that can attract new customers while maintaining the loyalty of long-standing Toyota purchasers as well. This can be done by decentralizing product development and engaging in more active design competitions between the U.S. And Japan. BMW regularly has design competitions between Munich and the BMW DesignWorks facility outside of Los Angeles, California (Vasilash). One can infer that the level of urgency and passion for innovation has cooled in Toyota as is the case in most companies who have exceptional success. It is critically important for Mr. Inaba to spark this intensity of competitive spirit and focus on customers again by revitalizing the culture to more existing models to customers while providing dealers with the support they need to also excel.
References

David Kiley. "Toyota Fights to Regain U.S. Traction" Business Week (Online) 27 Jul 2009

Link: http://www.businessweek.com/bwdaily/dnflash/content/jul2009/db20090724_856496.htm

Vasilash, G.. "THE ULTIMATE DESIGN MACHINE: BMW DESIGNWORKS. " Automotive Design & Production 1 Jan. 2008: