2006 Lexus GS430 by TCC Team (2/6/2005)
A fresh stab at the 5-Series/E-Class stalwarts.
Toyota Looking Bullish on Growth by Joseph Szczesny (2/6/2005)
Though recent profits are only modest, Toyota readies for a period of serious growth.
Lexus Eyes Performance Crowd by TCC Team (2/6/2005)
Toyota’s luxury division ponders how to best add more go-fast buzz.
A lawyer by training, Fujio Cho capped a 45-year career when he was named president of Toyota Motor Co. in 1999. In the Japanese system, that put him in charge of the country’s largest automaker — and a manufacturer some say is poised to knock down the industry’s global king-of-the-hill General Motors. At 67, Cho is only the second “outsider” to head Toyota Motor Co. since the members of the founding Toyoda family stepped aside a decade ago.
It has been a period of unprecedented growth, both in sales, profits, and prestige, with
Cho has been a strong advocate of environmentally-friendly automotive technology, such as the hybrid-electric Prius. Indeed, the subject dominated the far-reaching conversation.
TCC: Sales of your Prius hybrid soared last year, as
CHO: As far as our company is concerned, we continue to believe hybrids will be a core technology into the future. Even fuel cell vehicles will use this technology someday. Without a doubt, hybrid technology is a true and viable technology.
TCC: Your newest hybrids, such as the Lexus RX400h, are putting an emphasis on acceleration, as well as mileage. Why?
CHO: The emphasis is also placed on driving performance. I am confident we will be able to further upgrade hybrids in that direction.
TCC: Yet there has been some criticism, even from normally friendly sources like Consumer Reports magazine, noting that hybrids like the Prius deliver significantly lower mileage than their official rating.
CHO: When a hybrid is used under different conditions (than that used for the test to rate mileage) fuel economy figures may not be realized.
TCC: Apparently, customers don’t seem that upset, and you reportedly have waiting lists as long as eight months. What will you do about that?
CHO: We are now making our customers wait a very long time. That problem will be solved (due to a third production capacity increase) and we’ll be able to fill those backorders in this year. Within 2005, we will be able to eliminate all backorders.
TCC: Considering this is your largest hybrid market, will you build one here in the
CHO: That has not been determined and is the subject of heated discussions. By the middle of this year, we’d like to reach some conclusion.
TCC: Let’s turn to other topics. You’re on a path to outsell Chrysler, if not the entire DaimlerChrysler organization, in the
CHO: That is a very difficult question to answer. We’re in a position, internally…however we have never disclosed our targets outside to the public. How many units we should sell is not a part of our strategy. The outcome could depend on emerging markets, (where only a small share of the population currently can afford cars). So competition will become much more serious in these nations.
TCC: One of those emerging markets,
CHO: The Koreans are significant competitors and we should never be complacent about them. We do extensive research about the Koreans and that is reflected in our decision making.
TCC: Considering the current
CHO: Trade friction has largely gone away since 1996…and we do not expect to experience the political pressure we experienced in the past. We still have to make continuing efforts to become a true citizen of
TCC: Perhaps, but American manufacturers are not happy, and they have suggested that
CHO: We have never done anything like that, ever. We have never asked the Japanese government to keep the yen low. The fair value (of the yen) is difficult to be pinpointed. We used to think 105 would be the assumed rate (but now) we assume to dollar to be 107 yen. We are making every effort to reduce costs so profits will not be below last year’s because of the appreciation of the yen.
TCC: You and your colleagues insist
CHO: The regulation itself should best be handled by the federal government and not state government. We’re not trying to avoid the regulation, but it should be handled by the federal government if determined necessary.
TCC: And if the courts let
CHO: We would have to reduce substantially the number of models and range of options…and prices would have to be increased substantially should it (the regulation) be put in place.