TM Toyota Motor Corporation

TOKYO—Toyota Motor Corp. President Akio Toyoda is preparing a shake-up in an effort to avoid the curse of 10 million.

That is the global annual vehicle sales threshold that seems to trip up the world's biggest car makers. So far only three have neared or crossed it—General Motors Co., Volkswagen AG and Toyota—and all have stumbled.

In 2009, as Toyota approached the mark, it was hit with complaints of unintended acceleration that led to millions of recalls and a $1.2 billion settlement of a U.S. criminal investigation. Next up was GM, longtime holder of the global sales crown, which recalled millions of vehicles in 2014 over faulty ignition switches linked to more than 120 deaths. Then came Volkswagen, which reached 10 million in 2014 but is grappling with recalls, lawsuits and fines after it admitted to cheating diesel emissions tests.

Now that Toyota has sold 10 million cars for two consecutive years, Mr. Toyoda wants to avoid angering the automotive god, as some people at the car maker put it, for a second time. In March, Toyota intends to outline structural and management changes intended to make the giant car maker more nimble, according to people familiar with the situation.

"Bigger was better in the past, and that's why we were all expanding," one senior executive at Toyota said. "But at this scale, we've come to a point that being too big is perhaps not a good thing."

Mr. Toyoda plans to reorganize the company into units focused on vehicle size and type, according to a person familiar with the matter. One unit might be in charge of Toyota's compact car business, while another might handle sedans. Other units could focus on commercial vehicles or additional business segments.

That is a shift from the existing structure, in place since 2013, under which one unit handles developing markets while another deals with emerging markets. A third division oversees important components such as engines and transmissions, while a fourth one contains Toyota's Lexus luxury division. It wasn't immediately clear whether the new structure would supplant the system put in place in 2013 or coexist with it.

One of the people familiar with the situation said Mr. Toyoda intends to name relatively young members of his senior executive team to head each unit. The goal is to speed up decision-making and groom a new generation of leaders, the person said.

Mr. Toyoda, who took over as president in 2009, believes he has passed his halfway mark at the helm, one person said.

Toyota spokesman Ryo Sakai declined to comment.

Toyota has come a long way since Mr. Toyoda took over seven years ago, shortly after the company posted its first annual loss in decades due to the global financial crisis. It has since overcome a series of crises including the recalls, the effects of the 2011 earthquake and tsunami disaster in Japan and floods in Thailand. Its share price has roughly doubled in seven years and this year the auto maker is expecting its third straight year of record profits.

Despite changes it made following the recall crisis after criticism that it was initially slow to respond, Toyota remains sluggish and hierarchical in some of its decision-making, current and former executives say.

Meanwhile, shifts in the global auto market have blurred lines between developed and emerging countries, posing challenges to the company's existing structure, one person familiar with the situation said.

Emissions and safety standards, once looser in emerging markets, are tightening in most countries. Consumer tastes are converging, too. Yet Toyota still develops and produces many models aimed at specific markets.

For example, in the compact segment, it offers the Vitz in Japan and a sister model Auris in Europe; the Aqua hybrid, also known as the Prius c in Japan and the U.S., and the Etios compact car for India. Developing a global compact model for various markets could help boost efficiency, one person said.

Toyota's rivals are also wrestling with the shifts in the industry as they try to address their recent stumbles. At GM, Chief Executive Mary Barra has vowed to overhaul product development and the legal department to improve communication on quality problems. GM has tried to clarify lines of authority in deciding on recalls.

At Volkswagen, new Chief Executive Matthias Mü ller has replaced more than a dozen senior executives and eliminated three positions on the management board.

At Toyota, the looming reorganization is the latest in a series under Mr. Toyoda.

In 2011, he shrank the board to 11 members from 27. Last year Mr. Toyoda gave more power to senior managing officers to run the new units set up in 2013. He also named several foreigners to senior posts, in a move to dismantle a pyramid structure long dominated by Japanese executives.

While the frequent changes have caused some confusion among employees on the ground, they have helped Toyota act more quickly than it would have in the past, people familiar with Toyota's executive level decision-making say.

Satoshi Nagashima, an automotive expert based in Japan and a managing partner with consulting firm Roland Berger Strategy Consultants, said Toyota's changes over the years have allowed the auto maker to act more swiftly. "What matters now is how effectively the managers could run any new structures that come in place," he said.

Mr. Toyoda has said that for members of the 10-million club, such overhauls are inevitable if they want to continue growing.

"We are painfully feeling the gravity of our responsibility and what it means to sell 10 million vehicles a year," he told investors in March last year. "We can't talk about our future growth unless we come up with new ways of doing our jobs."

Write to Yoko Kubota at yoko.kubota@wsj.com

(END) Dow Jones Newswires

February 29, 2016 07:25 ET (12:25 GMT)

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