After an uncharacteristically harsh year of negative headlines and downward-trending sales,Motor Corp. is eager to start 2010 with a fresh outlook.
The auto maker enjoyed a brief reign as the world’s No.1 auto maker in 2009, only to be quickly dethroned byAG.
Jim Lentz, president-Motor Sales U.S.A. Inc., knows the auto maker’s stature in the global sales race is less important than its perception in the marketplace.
“What’s most important is we don’t become distracted by current events and take our focus away from wanting to be the No.1 brand in the eyes of the consumer,” Lentz says.
The negatives may seem overwhelming at the moment: monthly sales plunging more steeply than those of certain fellow Japanese auto makers; its first U.S. plant closure (New United Motor Mfg. Inc.); and a devastating recall over floor mats following a deadly crash of a Lexus in San Diego in August.
Lentz understands his company’s fundamentals are sound. Financially, Toyota is doing better than most. Its manufacturing plants remain the envy of the global industry; and the product is well-regarded in the marketplace and relatively fresh, although still incorporating fullsize pickups and SUVS as consumer preferences are shifting to smaller vehicles.
Next year, Toyota will roll out 10 new or refreshed models in the U.S., including the ’11 Sienna minivan. Although once downbeat about the minivan market, Lentz now believes there will be enough volume to go around for those auto makers staying in the segment.
In addition to new product to bolster sales, Lentz anticipates a slight rebound in Toyota’s major West Coast markets of California, Nevada, and Arizona.
“I don’t know if you’re going to be able to call those markets in recovery. They will be recovering, and as a result you’ll get a pretty big boost.”
Toyota forecasts an industry seasonally adjusted annual sales rate improving to the mid-11-million-unit range in 2010, up about 1 million units from what it expected this year.
Also on tap for late 2010 is the debut of the Lexus LFA supercar. Slated for near-term fleet introduction in the coming weeks is the Prius plug-in hybrid.
The latter experiment will gauge vehicle performance and charging experience before Toyota retails the car.
“I think, long-term, hybrids are going to be our mainstay because we still need to see improvements in overall battery performance and overall cost and infrastructure before we can really say how large plug-ins or electric vehicles are going to be.”
Other possible models for 2010 include a new Camry and Scion tC, although Lentz doesn’t tip his hat to either.
The Camry typically has four years between generations. The current Camry debuted in early 2006 as an ’07 model.
Lentz promises more emotional styling with the next-generation model but still sees it as having wide generational appeal.
Expect more decisions on Toyota models and manufacturing for the U.S. to be made locally, rather than in Japan.
New TMC President Akio Toyoda this year granted certain new authority to Lentz; Yoshimi Inaba, president of Toyota Motor North America; Atsushi Niimi, Toyota Motor Corp. executive vice president-manufacturing; and Tetsuo Agata, president and chief operating officer of Toyota Motor Engineering & Mfg. North America Inc.
“We are working much closer together, being able to make more decisions autonomously as a North American unit, than we have before,” Lentz says.
“I think that’s where Akio really wants to push the decision-making process: closer to the market, and closer to the customer. I think that’s going to be very effective over time,” he says.
Even though it has seen hefty monthly declines for most of the year, recording seven months of losses broken only by the government’s “Cash for Clunkers” stimulus in August, Toyota managed to maintain a 16.8% share, according to Ward’s data.
Lentz predicts Toyota will end the year with a sales volume of 1.7 million units, based on a market share of 16.7%.
While he agrees 2009 has been hellish for the industry, with consumer confidence shattered for most of the year, Lentz says there’s an upside, too.
As Washington grappled with the question of federal aid for the auto industry, the nation gained an appreciation for the troubles facing Detroit auto makers, he says. “The debate over the industry and the Big Three really demonstrated to the U.S. how important the auto industry is to the United States and the fact that this is a global business.”
Toyota’s undisputed star in 2009 has been the third-generation Prius, which launched in May. It has proven resilient in the marketplace despite the recession, with sales down 16.9% compared with the total industry’s decline through October of 25.3%.
It also held its own against theInsight.
AlthoughMotor Co. Ltd. expected much bigger volumes for its second-generation hybrid-electric vehicle, which is larger than its predecessor and has a sub-$20,000 starting price, sales amounted to just 17,530 in the first 10 months, compared with 118,290 Prius deliveries.
“I think what it shows is consumers buy on value and not necessarily price,” Lentz says of Prius’ success over Insight.
He says his vision of a whole lineup of Prius models in the U.S. remains just a dream, contrary to media reports.
Toyota’s only hiccup with the Prius was its stated intention in 2008 to produce the HEV at a new plant in Blue Springs, MS.
The Prius was going to replace the Highlander cross/utility vehicle, which initially was slated for Blue Springs, until rising fuel prices forced Toyota to pick a domestic assembly site for the Prius.
But as consumers dramatically cut back on new-vehicle purchases, Toyota was caught with too much inventory worldwide, forcing the auto maker to mothball the Blue Springs plant before it even opened.
The plan still is to build the Prius in Mississippi, but reviving the plant depends on consumers buying cars again, especially hybrids.