Toyota Breaks 10% BarrierGains in North America offset pain in Japan

In 1998 Toyota Motor Corp. will be the first non-American automaker - excluding DaimlerChrysler AG - to capture more than 10% of the U.S. passenger car market.

Japan's largest automaker is on track to sell 1.4 million cars and trucks in the U.S. this year, its best performance to date. With the new Princeton, IN, truck plant launching production of the new full-size Tundra pickup, and increasing output of the Camry Solara coupe at Toyota's Cambridge, Ont., plant, that growth likely will continue into 1999.

Its Lexus luxury division is showing a 59% increase through the first 10 months. The RX 300 luxury activity vehicle has exceeded all expectations. The GS 300 and GS 400 performance sedans have matched the best Mercedes-Benz and BMW have brought to market.

The only downside for Lexus has been that the RX 300's popularity has come at some expense to the ES 300 sedan.

Toyota's mainstream division started the year slowly. Then there was a management shakeup.

In early April Jim Press, formerly general manager of Lexus, moved up to lead a newly created Automotive Operations Group. Donald Esmond, formerly vice president of sales for Toyota division, moved up to group vice president and Toyota general manager, succeeding J. Davis Illingworth, who was assigned to a new planning and development group.

Bryan Bergsteinsson, formerly vice president of human resources, succeeded Mr. Press at the helm of Lexus.

It must have worked. So did other measures, including Toyota's ongoing "New Era" initiative to bring the quality of its dealers up to the quality of its cars and trucks; more aggressive dealer incentives, and the recent launch of the Camry Solara coupe.

In mid-December in Princeton, IN, workers will celebrate production of the first Tundra full-size pickup. The truck, featuring a new dual-overhead-cam 4.7L V-8 engine, will be much more of a competitor to the heavy hauling workhorses from Ford, Chevrolet, GMC and Dodge.

Toyota already has decided to expand the Indiana factory from 100,000 vehicles a year to 150,000.

In Buffalo, WV, Toyota has raised its investment in a new engine plant from $700 million to $900 million. About 800 workers will build up to 360,000

4-cyl. and 6-cyl. engines annually by 2001.

Toyota, like all of its competitors, has suffered a difficult year in Japan. Through the first nine months its total vehicle sales in its home country were 1.3 million, down 13.5% from a year earlier.

Throughout the world Toyota is trying to make future products compelling to young buyers. A group of eight employees work with Toyota's Calty design studio in California, as well as with product planners, to develop marketing concepts targeted at teenagers and young adults.