Jim Press, president and chief operating officer-Motor Sales U.S.A. Inc., followed Michigan Gov. Jennifer Granholm to the podium Wednesday here at the Management Briefing Seminars. Granholm was in Japan recently trying to woo a Toyota manufacturing facility to the state.
“Toyota has been in the U.S. now for nearly 50 years,” says Press. “(And) Toyota was one of the first international car companies to establish an office here in this state back in the 1950s.”
When complete, the expanded Toyota Technical Center in Ann Arbor will make the Michigan location Toyota’s largest research and development facility in the world, Press says.
“Currently, we are responsible for creating about 16,000 jobs in Michigan,” he says. “And we purchased about $1.8 billion in parts and components from suppliers here last year.”
Even if Granholm did not return from Japan with the promise of a Toyota manufacturing plant for the state, Press reminds she did get expansion promises from two Toyota Group companies: suppliersCorp. and Tokai Rika Co. Ltd. The two will invest a combined $86 million and create 500 new jobs.
“Clearly, (Toyota’s hasn’t invested in Michigan) as much as the Big Three, but it is a substantial contribution to the state, and our presence here is growing larger every year.”
Meanwhile, Press cautions that Michigan’s struggling bread-and-butter companies, the Big Three, should not be discounted just yet.
“Make no mistake about it…Detroit auto makers are rebuilding and preparing for a new era of prosperity,” he says. “They will force all of us to get up on our toes, bring out the best and inspire new customers.”
He cites the blockbuster July sales ofCorp., Motor Co. and Group as proof.
“Thanks to, and ’s creative marketing, striking designs and strong competition, (the U.S. auto industry is) having one of our best years ever,” says Press.
But companies should not bask in the afterglow too long. Press sees customers becoming more demanding and impatient. He says products must get to market faster.
“Today, it’s all about replacement rates and showroom age,” he says. “The faster you bring fresh products to market, the better your sales and profits.”
Press cites Merrill Lynch statistics showing on average vehicles are replaced now about every 5.5 years. And showroom age is declining, as well.
“If you take a look at the next four years, products by Japanese and European auto makers (on a showroom floor) will be about 2.5 years old, while those from GM and Ford will average about 3.5 years. And the Koreans? Their products will be just 1.7 years old.”
Although clever marketing may temporarily halt the sales slide of an older model, “marketing, alone, can’t sell an aging product,” says Press. “Customers are too smart, competition is too tough and new products are too enticing today.”