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Updated:2007-03-21 00:17:58
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Why Toyota Is Afraid of Being on Top
Ask consumers why Toyota may soon be the largest automaker in the world, and they will point to the Camry. Or the Prius. Or the RAV4. (It's the cars, stupid.) Ask manufacturing geeks, and they'll tell you it's about just-in-time production and a maniacal focus on constant improvement. (It's the engineering, dummy.)
But there's another drama behind the carmaker's tire-squealing momentum. It's a story that might be called: How Toyota is winning the hearts and minds of America.
With a deft combination of marketing, public relations and lobbying, Toyota has done a remarkable job over the past 20 years of selling itself as an American company. That drives the Big Three to distraction. Here's Chrysler communications chief Jason Vines: "The thing I resent is Toyota wrapping itself in the American flag," he says. "We still employ more people and contribute more to the economy."
More Autos Stories
Other auto articles from Businessweek.com:
Who cares what Detroit thinks? Well, strange as it sounds, Toyota does. Its executives may privately relish victory at the expense of General Motors, Ford, and Chrysler, but here's the truth: Toyota is afraid to be No. 1 -- or at least what that implies. And not just because one of its slogans is "Run scared." It's because the extra scrutiny could undo much of the hard work of the past 20 years. "We constantly need to think about the potential backlash against us," Toyota CEO Katsuaki Watanabe tells BusinessWeek in an exclusive interview. "It's very important for our company and products to earn citizenship in the U.S. We need to make sure we are accepted."
A 17.4 percent retail market share should signal acceptance. But Toyota is not admired from sea to shining sea. Yes, the company has won the coasts. But one-third of car buyers are biased against imports, says Harris Interactive. And most of those Ford- and Chevy-loving holdouts live in the Midwest and Texas. In those precincts, Toyota still has a lot of persuading to do. Which explains why it launched the full-size Tundra pickup -- a red state vehicle from its aggressive hood to its brawny haunches -- and is building it in San Antonio.
Toyota Vehicles
Model Overview Get a Quote
Toyota Highlander Price Quote
Toyota Camry Price Quote
Toyota Prius Price Quote
Toyota RAV4 Price Quote
Toyota Yaris Price Quote
Toyota 4Runner Price Quote
Toyota FJ Cruiser Price Quote
Toyota Tundra Price Quote
Camry Hybrid Price Quote
Here's the thing: The Tundra amounts to an assault on the last redoubt of Big Three profits. But Toyota doesn't want to be seen as the one that pushes Detroit over the edge. So to prevent a backlash, the company is amping up the charm -- launching literacy programs in San Antonio, vowing to share technology with Ford, and pouring money into lobbying, more than doubling since 2002 the amount it spends each year, to $5.1 million. Says Jim San Fillippo, an analyst with Automotive Marketing Consultants Inc.: "Toyota is the best at going native."
In the early '80s, Toyota sold nine models and had 6 percent of the market. But the company was winning converts with fuel-efficient, reasonably priced cars like the Toyota Corolla. Detroit, meanwhile, was beginning to endure the agonies that continue to this day. Japan was ascendant, and xenophobia was in full cry.
Toyota Scion's Shoichiro Toyoda needed to boost sales in the U.S. but feared angering consumers and Washington politicians. So in 1984, he hired a Ford pr guy named James Olson. Dr. Toyoda summoned Olson to Nagoya and exhorted him to undertake genchi genbutsu ("go and see").
What Olson found wasn't terribly surprising: With just one U.S. factory -- and a joint venture with GM, at that -- Toyota was widely viewed as a foreign interloper. At Olson's urging, the company began playing to local sentiment. In 1986, Toyota announced a new plant in Kentucky. In the same year, it rehired many of the 3,000 laid-off GM workers to staff the joint- venture plant in Fremont, Calif. George Nano ran the United Auto Workers local at the time, and recalls company executives and plant bosses eating in the same cafeteria as the rank and file. That never happened when GM was running the factory.
That same year, a Ron Howard comedy called Gung Ho appeared; it contrasted the American and Japanese work ethic at a car plant operated by an Asian company called Assan Motors. (Toyota later used the film as an example of how not to manage Americans.)
Toyota escalated the pr offensive. In 1991, it started funding the National Center for Family Literacy and other do-good works. It was textbook corporate philanthropy. But Toyota also did something few American corporations would consider: dispatching efficiency gurus to companies like Viking Range Corp. and Boeing Co. and to local hospitals. All this was an effort to help make these places work smarter -- and build goodwill.
What Do You Think
BEATING THE TAX
But even the savviest gestures were of little use against rising trade tensions. In 1993, Big Three executives won a sit-down with President Bill Clinton. Why, they wanted to know, could the likes of Toyota flood the U.S. with cars, while domestic automakers were mostly locked out of Japan? "It was clear Detroit was having trouble," recalls Mickey Kantor, who was then Commerce Secretary. So Clinton threatened a 100 percent tax on luxury car imports.
That would have mauled Toyota's 5-year-old Lexus brand. It was time for some Kabuki. In those days, Toyota had no game in Washington. But Toyoda was a friend of Walter F. Mondale, then ambassador to Japan. They made a deal: Toyota would build three plants in the U.S. if Clinton nixed the tax. It seemed like a concession at the time. But one Toyota executive says the company planned to open the factories all along.
Detroit's lobbying had come to naught. Toyota was about to establish a beachhead from which it would double U.S. market share over the next decade. With each new plant, Toyota won friends in Congress, where it began building clout.
Click Here to Continue Reading the Story
- Number One Status - AOL Autos
Number One Status
Why Toyota Is Afraid of Being on Top
Ask consumers why Toyota may soon be the largest automaker in the world, and they will point to the Camry. Or the Prius. Or the RAV4. (It's the cars, stupid.) Ask manufacturing geeks, and they'll tell you it's about just-in-time production and a maniacal focus on constant improvement. (It's the engineering, dummy.)
But there's another drama behind the carmaker's tire-squealing momentum. It's a story that might be called: How Toyota is winning the hearts and minds of America.
With a deft combination of marketing, public relations and lobbying, Toyota has done a remarkable job over the past 20 years of selling itself as an American company. That drives the Big Three to distraction. Here's Chrysler communications chief Jason Vines: "The thing I resent is Toyota wrapping itself in the American flag," he says. "We still employ more people and contribute more to the economy."
More Autos Stories
Other auto articles from Businessweek.com:
Who cares what Detroit thinks? Well, strange as it sounds, Toyota does. Its executives may privately relish victory at the expense of General Motors, Ford, and Chrysler, but here's the truth: Toyota is afraid to be No. 1 -- or at least what that implies. And not just because one of its slogans is "Run scared." It's because the extra scrutiny could undo much of the hard work of the past 20 years. "We constantly need to think about the potential backlash against us," Toyota CEO Katsuaki Watanabe tells BusinessWeek in an exclusive interview. "It's very important for our company and products to earn citizenship in the U.S. We need to make sure we are accepted."
A 17.4 percent retail market share should signal acceptance. But Toyota is not admired from sea to shining sea. Yes, the company has won the coasts. But one-third of car buyers are biased against imports, says Harris Interactive. And most of those Ford- and Chevy-loving holdouts live in the Midwest and Texas. In those precincts, Toyota still has a lot of persuading to do. Which explains why it launched the full-size Tundra pickup -- a red state vehicle from its aggressive hood to its brawny haunches -- and is building it in San Antonio.
Toyota Vehicles
Model Overview Get a Quote
Toyota Highlander Price Quote
Toyota Camry Price Quote
Toyota Prius Price Quote
Toyota RAV4 Price Quote
Toyota Yaris Price Quote
Toyota 4Runner Price Quote
Toyota FJ Cruiser Price Quote
Toyota Tundra Price Quote
Camry Hybrid Price Quote
Here's the thing: The Tundra amounts to an assault on the last redoubt of Big Three profits. But Toyota doesn't want to be seen as the one that pushes Detroit over the edge. So to prevent a backlash, the company is amping up the charm -- launching literacy programs in San Antonio, vowing to share technology with Ford, and pouring money into lobbying, more than doubling since 2002 the amount it spends each year, to $5.1 million. Says Jim San Fillippo, an analyst with Automotive Marketing Consultants Inc.: "Toyota is the best at going native."
In the early '80s, Toyota sold nine models and had 6 percent of the market. But the company was winning converts with fuel-efficient, reasonably priced cars like the Toyota Corolla. Detroit, meanwhile, was beginning to endure the agonies that continue to this day. Japan was ascendant, and xenophobia was in full cry.
Toyota Scion's Shoichiro Toyoda needed to boost sales in the U.S. but feared angering consumers and Washington politicians. So in 1984, he hired a Ford pr guy named James Olson. Dr. Toyoda summoned Olson to Nagoya and exhorted him to undertake genchi genbutsu ("go and see").
What Olson found wasn't terribly surprising: With just one U.S. factory -- and a joint venture with GM, at that -- Toyota was widely viewed as a foreign interloper. At Olson's urging, the company began playing to local sentiment. In 1986, Toyota announced a new plant in Kentucky. In the same year, it rehired many of the 3,000 laid-off GM workers to staff the joint- venture plant in Fremont, Calif. George Nano ran the United Auto Workers local at the time, and recalls company executives and plant bosses eating in the same cafeteria as the rank and file. That never happened when GM was running the factory.
That same year, a Ron Howard comedy called Gung Ho appeared; it contrasted the American and Japanese work ethic at a car plant operated by an Asian company called Assan Motors. (Toyota later used the film as an example of how not to manage Americans.)
Toyota escalated the pr offensive. In 1991, it started funding the National Center for Family Literacy and other do-good works. It was textbook corporate philanthropy. But Toyota also did something few American corporations would consider: dispatching efficiency gurus to companies like Viking Range Corp. and Boeing Co. and to local hospitals. All this was an effort to help make these places work smarter -- and build goodwill.
What Do You Think
BEATING THE TAX
But even the savviest gestures were of little use against rising trade tensions. In 1993, Big Three executives won a sit-down with President Bill Clinton. Why, they wanted to know, could the likes of Toyota flood the U.S. with cars, while domestic automakers were mostly locked out of Japan? "It was clear Detroit was having trouble," recalls Mickey Kantor, who was then Commerce Secretary. So Clinton threatened a 100 percent tax on luxury car imports.
That would have mauled Toyota's 5-year-old Lexus brand. It was time for some Kabuki. In those days, Toyota had no game in Washington. But Toyoda was a friend of Walter F. Mondale, then ambassador to Japan. They made a deal: Toyota would build three plants in the U.S. if Clinton nixed the tax. It seemed like a concession at the time. But one Toyota executive says the company planned to open the factories all along.
Detroit's lobbying had come to naught. Toyota was about to establish a beachhead from which it would double U.S. market share over the next decade. With each new plant, Toyota won friends in Congress, where it began building clout.
Click Here to Continue Reading the Story
- Number One Status - AOL Autos
JUST KIDDING!! This is a TUNDRA forum.
