Mr. Press was referring to the addition of a second plant for the company's full-size Tundra pickup. This plant is in San Antonio, the heart of the big pickup market and the battleground where Ford's F-Series and Chevrolet's Silverado have dominated for decades.
Mr. Press' statement may have been the most overt challenge Toyota has ever made to its competitors in the North American automotive market.The carmaker means it, with Toyota moving almost 2.1 million new cars and trucks in 2004, up 10.4% from 2003. The second Tundra plant, along with a larger second-generation version of the truck, will make Toyota's full-size pickup a serious contender in the highly profitable U.S. market.
Toyota Motor Sales USA has been selling cars and trucks in the U.S. since 1957. Now, almost 50 years later, Toyota is a major force in the U.S. automotive battleground, selling cars and trucks through three brands-Toyota, Lexus and Scion. A Toyota under any name is in the consideration set of more than one in three new-vehicle buyers in the U.S.
Toyota is an engineering company capable of producing products with outstanding quality and longevity, if not inspiring style. More important, Toyota is a financial powerhouse with fiscal resources so deep it could purchase outright several of its largest competitors-out of the petty cash drawer.
Buyers choose Toyota because of the legendary durability, quality and reliability of its products. Buyers of most vehicles expect them to last 100,000 to 150,000 miles before going to the scrap heap. Toyota buyers commonly expect 200,000 miles (especially with Toyota trucks). They are content to get 300,000 miles and then gloat when they get 350,000 miles. Even though most buyers will trade their vehicle in five or six years, Toyotas are perceived to be indestructible.
Toyota's deep pockets allow it to try things other less flush car companies cannot. Scion is a laboratory. Jim Press admits individual Scion products may fail and that Scion is a test bed for new ideas. The mere admission that everything is not buttoned-down and Scion can try new things-some of which may not work-is rare in the ultraconservative automotive industry. But Toyota can afford to experiment where others dare not try.
Launching its North American sales effort with the Land Cruiser 47 years ago, Toyota has always embraced the American truck market. In the 1970s and early '80s, Toyota pickup trucks were part of the high-profile youth movement. They were lifted and fitted with huge tires and wheels. They were slammed and customized. Young guys used Toyota pickups as a way to display their ingenuity.
Everybody makes mistakes, and Toyota is no exception. Its fumbles have not been because its cars and trucks were not good in their own right; they just fell short of meeting the requirements of U.S. buyers. Remember the midengine Previa? How about the Tercel and the MR2? The final-generation Supra made a run at a part of the market historically defined by Chevrolet's Corvette that functionally brought about the demise of the Supra altogether. The youth-targeted (but boomer accepted) Echo was a clear "miss."
Toyota's T-100 pickup may have been a deliberate flop. Initially available only with a V6 engine and always smaller than the full-size pickups sold by Ford, Chevrolet and Dodge, insult was added to injury when a four-cylinder was added to reduce T-100 prices. The T-100 was an 85% full-size pickup in a market that expects 100% and really wants 125%. Maybe Toyota was shy about attacking the heart of the American market with a fully competitive pickup in the '90s. No longer.
Trucks have contributed mightily to Toyota's success in North America. The Tacoma, now more a midsize pickup than a compact, has been a steady success. The current Tundra may be a 98% full-size pickup, but the products being developed for launch in Toyota's new Texas truck plant promise to be in the 105% range. Sienna may well be the Lexus of minivans.
Toyota launched the crossover SUV market with the RAV4, then followed with the Lexus RX and Highlander. Based on car platforms, the RAV4 and RX may have been considered risky propositions when they were launched because they were not "real trucks." Or so the critics said. All have been consistent revenue generators ever since.
The most recent feather in Toyota's cap is its hybrid powertrain strategy. Launching the Prius as a stand-alone hybrid established an extremely desirable image for both hybrids and Toyota. Prius is the darling of the environmentally conscious and early technology adopters.
While it's a given that there will be many more vehicles offering hybrid propulsion over the next few years, it's unlikely any will be as successful as Prius in creating a buzz. Toyota is there first with the most. No other company could have done it. No other company could have had the credibility to do it.
Perhaps that is the company's true strength-using its cash, engineering capital, manufacturing expertise and well-developed marketing savvy to take chances in the market that fills its competitors with icy cold fear. Then again, the fear may come from Toyota being the wealthiest and arguably the most powerful automobile company on earth.
Mr. Peterson is president of consultancy AutoPacific, Tustin, Calif.