Toyota’s Lentz Optimistic on U.S. Market in 2007

DEARBORN – The domestic market will go through a “set up” year in 2007, with five generations of Americans in the wings to spur demand in subsequent years, the head of Toyota Motor Sales U.S.A. Inc. says.

“Don’t be fooled,” Jim Lentz, TMSUSA executive vice president, says of 2007, describing it as the “calm before the storm of enormous new growth in our industry.”

Lentz, speaking today at the Automotive News World Congress here, projects a sales growth of 100,000 units a year in the U.S., forecasting an 18 million-unit market by the end of the decade.

Driving the gains will be five generations of Americans, all hungry for new cars and trucks. They include the so-called “Greatest Generation,” born before 1940; their children, the Baby Boomers; their children, known as Generation X; as well as Generation Y young adults born between 1980 and 1994. Finally, there’s Generation Z, whose members are roughly four years from getting a driver’s license.

In the coming years, “five different generations will be our customers,” Lentz says, estimating the sales pace will continue for the next 50 years.

“We’re about to experience a boom like we’ve never seen before,” he says.

Toyota Motor Corp.’s youth-oriented Scion brand is just one attempt to grab younger-generation buyers first and keep them coming back.

Lentz says while Scion represents only 170,000 of Toyota’s 2.5 million U.S. deliveries last year, about 1,100 Scion buyers moved up to purchase Toyota-brand vehicles in 2006.

A critical element linking many generations is the desire for clean and efficient-running vehicles, Lentz says. But he sees the rising tide carrying all OE ships, including restructuring auto makers DaimlerChrysler AG, Ford Motor Co. and General Motors Corp.

However, Toyota still has a long way to go when it comes to its dealer experience, according to Lentz, who notes the auto maker’s reputation still lags competitors.

He also is aware of a potential backlash and protectionism as a result of Toyota’s gains in 2007, the Japanese company’s 50th anniversary of selling vehicles in the U.S.

Lentz notes Toyota is building three out of five units in the U.S. for sale here. By 2008, the auto maker will be assembling 2 million units in North America.

But, “the risk (of backlash) always exists,” he acknowledges.

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