Toyota’s Lentz Wants More Collaboration

TRAVERSE CITY, MI – Toyota used to be “the lone wolf and tried to do everything ourselves,” but that strategy is changing, says Jim Lentz, president and CEO of Toyota Motor Sales U.S.A.

Speaking at the Center for Automotive Research’s Management Briefing Seminars here, Lentz says the future of the industry is bright, but collaboration is essential for all players to be successful.

“The challenges we face are far too great to go it alone,” he says. “Companies are increasingly joining together to build better cars, develop better in-car connectivity and reach for sustainable mobility.”

The executive points to a number of recent Toyota partnerships, including an agreement with BMW to develop diesels, hybrids, electric drivetrains, fuel cells and lightweight materials.

Toyota also collaborates with upstart Tesla on electric vehicles and with Ford on hybrid-electric systems for fullsize pickups and SUVs.

The alliances will help Toyota and its partners meet new corporate average fuel economy standards requiring every auto maker achieve a fleet average of at least 35.5 mpg (6.6 L/100 km) by 2016 and 54.5 mpg (4.3 L/100 km) by 2025.

“Let’s not kid ourselves. It’s going to be a huge challenge for all brands to reach these regulations without making big investments in new technologies,” Lentz says. “That’s where teamwork and collaboration comes into play.”

Another big challenge facing the industry is getting Generation Y interested in vehicle ownership.

Gen Y, often used to describe those born between 1980 and 1999, have shown little desire to own an automobile, but the trend is beginning to change as many members of the generation enter the workforce and start families, Lentz says.

Some 40% of U.S. vehicles expected to be sold in the next decade will be bought by Gen Y, according to consulting firm Deloitte.

To cash in on the expected inflow of new buyers, Lentz says the industry has to design and build vehicles they want and value. Young buyers desire cars that are fuel-efficient, friendly to the environment, affordable, stylish and loaded with the latest technology.

“That’s a tall order, but doable if we leverage teamwork throughout the industry,” he says. “And there’s strong evidence we’ve already started down that path.”

Lentz says there are more than 150 alternative-fuel vehicles on sale today, and that number keep growing.

To ensure Toyota delivers the products consumers want, the auto maker recently made several changes in its North American operations.

The auto maker formed a group of its top leaders throughout North America to speed decision-making and act with one voice, Lentz sys.

Additionally, Toyota is expanding its North American operations. In the past eight months, the auto maker has hired or announced 3,500 new jobs and invested $1.6 billion on the continent.

As the company grows in North America, so too does its pool of local parts suppliers. Toyota has about 500 North American suppliers and purchases $25 billion in parts, materials and components annually.

“Here again, teamwork will ensure both sides are successful and profitable,” Lentz says. “We fully realize if our suppliers aren’t successful, we won’t be successful. It’s that simple.”

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