Toyota Claims Victory

September 21, 2005
For the three or four Americans who haven't already heard the news, Toyota plans to make sure you're completely cognizant of its position as the market's hybrid leader. It's about to launch a nationwide ad blitz likely impossible to escape, even if you take a bus to work. "Miles and miles and miles per gallon," will be the message greeting motorists as they exit the Lincoln Tunnel. Other billboards will feature such messages as "There's nothing like that new planet smell." Digging deep into its marketing budget, Toyota will take its "awareness" campaign to just about anywhere you might be hiding, with radio spots, "pump topper" ads in service stations around the country, TV and movie house ads, even signs in bus shelters.

There's no question that Toyota has come to dominate in the emerging hybrid segment, which nearly doubled in size in 2004, to 85,000, and which already topped 105,000 by the end of August this year. Honda, which actually launched the first hybrid in the U.S., the 2002 Insight, has been struggling to gain real traction, despite a steady increase in offerings, such as the second-generation 2006 Civic Hybrid. In August, Toyota's top U.S. executive, Jim Press, told that his company is looking to add another 10 models of its own by decade's end, in a push to sell at least one million hybrids annually around the world. In the U.S., Press believes hybrid-electric vehicles, or HEVs, will make up 25 percent of Toyota's volume soon after 2010.

There's only one thing: the hybrids Toyota plans to bring to market aren't necessarily going to fit the fuel-sipping, enviro-friendly image that all those billboards and ScreenVision ads would have potential buyers believe. As Toyota division general manager Don Esmond acknowledged in a TCC interview earlier this year, the Japanese automaker is shifting focus, at least on some of its models, and is putting more of an emphasis on performance. That will be particularly true of hybrids sold through the Lexus division, which is strongly considering an entire line-up of gas-electric performance cars to take on the likes of Mercedes' AMG series and BMW's M models. This strategy is stretching the credibility of even the normally hybrid-friendly New York Times, which found that the Lexus RX400h got an average 21.6 miles per gallon (TheCarConnection's test drive came in at a flat 21 mpg). That was barely what the gas-only RX330 got -- yet the hybrid version is about $10,000 more. Not to pick solely on Toyota, Honda's performance-focused Accord Hybrid also delivers little more mileage than the standard V-6 model, though it does launch from 0-60 about a half-second faster,

American motorists are being pitched a message that is not entirely inaccurate -- the Toyota Prius does typically deliver 40 to 50 mpg, though well below the 60 on its sticker -- but which stretches credibility as Japanese automakers shift their focus. Ironically, it's the Big Three who've often been accused of using sleight-of-hand advertising. If Toyota pitches fuel efficiency but starts to shift focus to performance, will buyers ignore the shell game, or will it build negative word-of-mouth that could far exceed the selling power of this nationwide ad campaign?

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