The Roots of Toyota's Strength
08-18-2006, 11:37 PM
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The Roots of Toyota's Strength
The Roots of Toyota's Strength - - By JAMES B. TREECE | AUTOMOTIVE NEWS - - SOurce: Autoweek
TOKYO - To see the roots of Toyota Motor Corp.'s excellence, go beneath its new assembly plant in Guangzhou, China. Toyota group suppliers zip parts through a series of underground tunnels to the line building Camrys.
Some parts never go outside before being installed on a car. They therefore require less packaging than similar parts delivered to assembly plants in Toyota City, reducing their cost.
As the Guangzhou plant shows, Toyota's strength does not lie in a single core competency. It rises from a complex, interlocking set of extraordinary skills. These include working closely with suppliers, continually finding ways to innovate and improve, and constantly challenging itself to cut costs.
The result is a carmaker that today dominates the industry in a way no single company has since the glory days of the Ford Model T or General Motors' global dominance in the 1950s.
This year could mark a milestone: Toyota appears on track to pass General Motors in global vehicle sales. In the first half, Toyota's sales rose 10.4 percent to 4.36 million, narrowing the gap as GM's fell 2.3 percent to 4.60 million.
That changing of the guard is not just the result of Toyota's strength in Asian markets such as Japan or Thailand. Much of Toyota's future growth will come in the United States, at the expense of its U.S. rivals. Indeed, Toyota's total sales in the United States topped Ford's during July.
Profit machine
Investors have shown their faith in Toyota's future by bidding up the share price. Toyota's stock market value is roughly 30 percent of the value of all global carmakers combined.
Irrational exuberance? Not at all. Toyota churns out about 30 percent of the global automotive industry's operating profit every year.
If you combined all carmakers' global profits, Toyota would account for about one-third. Other Japanese carmakers would combine for another third. All European, North American and other Asian carmakers together make up the final third.
Toyota's success allows it to invest heavily in the future.
Although the automaker is firmly committed to hybrid powertrains, it also is researching and developing diesel engines, engines that run on biofuels, fuel cells and all of the other potential power sources of future vehicles.
"We have to go ahead with the development of many and diverse types of powertrains," says Toyota CEO Katsuaki Watanabe. Other carmaker CEOs may feel that way, but few can afford to do it.
Consider the current talks between General Motors and the Nissan Motor Co.-Renault SA alliance. Carlos Ghosn, CEO of Nissan and Renault, would like to build light trucks at GM's underused plants. That would be cheaper than Nissan's building factories in North America.
But Toyota doesn't have to seek cheaper alternatives. With a war chest of $19.69 billion in cash, time deposits and marketable securities, it can afford to build any plants it wants.
And it has. Toyota has been opening new plants at a pace that would do Starbucks proud.
Over the past five years, Toyota has opened three assembly plants in China, one in Mexico and a joint-venture plant with PSA-Peugeot/Citroen in the Czech Republic. It also opened powertrain factories in China, India, Poland and Alabama. It currently is building assembly plants in San Antonio; Woodstock, Ontario; and St. Petersburg, Russia.
Toyota paid cash for all of them. It has not borrowed any money to pay for the new plants.
Beyond loyalty
How did Toyota climb to the top?
Some of its strengths are cultural ones shared by the best Japanese companies. These include a respect for lifelong learning that aids kaizen, or continuous improvement. In addition, a consensus management style, combined with a Confucian respect for hierarchy, allows the rapid implementation of decisions.
The Japanese emphasis of the group over the individual also promotes a devotion to the company that some Westerners find extreme. It has not spread abroad easily.
"Japanese companies essentially are a community, not an economic entity," says James Abegglen, a co-founder of Boston Consulting Group and the dean of Japanese management gurus. Abegglen coined the phrases "Japan Inc." and "lifetime employment."
"Remember quality circles?" he asks. They failed in the West because they ran up against a different workers' mind-set, he says. "Stay after work at no pay to help the company get better? Forget it."
That devotion to the company rather than the individual extends beyond the factory floor all the way to the CEO's office. Consider the issue of executive pay.
"U.S. CEOs' income is 550 times greater than the average employee's," says Abegglen. Citing figures from compensation consultants Tower Perrin, he says that in Japan, "the multiple is about 10 or 11 - almost identical to Germany."
"Compensation is distributed within the community, and no one person is given room to be so overly compensated," he says.
To be sure, Japanese management is not a panacea. Lots of Japanese companies have followed Japanese management methods right into bankruptcy.
What sets Toyota apart is its superb management of so many aspects of a complex business. Here are some areas where it excels.
1. Elimination of waste
Perhaps Toyota's most defining characteristic is its obsession with eliminating waste, or muda in Japanese. It is a mind-set that goes well beyond the cost-cutting espoused by other carmakers.
A month before Watanabe became Toyota's CEO in June 2005, the carmaker announced operating profits of ¥1.67 trillion, or $14.60 billion at then-current exchange rates, for the fiscal year that ended March 31, 2005. It was the fattest profit for any Japanese company ever.
One of his first acts as president was to warn the troops against going soft.
Don't think we're flush, he wrote in a companywide memo. We still need to attack costs and waste as much as ever. When making copies, he wrote, always use both sides of the paper.
Analyst Christopher Richter of CLSA Asia-Pacific Markets connects that aspect of Toyota's corporate culture with the company's leadership in hybrids.
"I can imagine Toyota engineers sitting around and talking about all the energy that is lost to heat in braking and how they can recapture that," he says.
"I'm sure that when that engineer started to sell hybrids to his superiors, the light bulbs all went off: This was a way to eliminate waste," he says. "I'm convinced that's why hybrids have such great appeal to Toyota."
2. A culture rooted in manufacturing
Throughout the company, there is a deep respect for monozukuri. The Japanese term literally means "making things." The term connotes a craftsman's devotion to manufacturing, whether by traditional or high-tech methods.
At other carmakers, executives are often split between "bean counters" and "car guys." Factory experts are a distant third in the race to the CEO's job. At Toyota, there are manufacturing men - and everyone else. Both Watanabe and his predecessor, Fujio Cho, worked in Toyota's manufacturing ranks before becoming CEO.
One byproduct of that manufacturing culture is a rabid devotion to solving problems. Things go wrong in a factory. Machines break down. Workers call in sick.
Toyota managers are indoctrinated into the best ways to solve problems.
Don't treat a problem as a one-time glitch. Find out why it happened, and fix it so it won't happen again. Do root-cause analysis, asking the "five whys" to find out the real reason that machine broke down. Don't rely on a written report. Go to the site of the problem and check it out yourself.
Better yet, anticipate problems.
In a classic encounter, Toyota and GM managers met in the mid-1980s to review that week's production at their new joint venture, New United Motor Manufacturing Inc. in Fremont, Calif. A lifetime GM manager, trained not to bother his boss with problems, brightly reported "no problems" in his department. His new Japanese boss looked him in the eye and said, "No problem is a problem."
It's a mind-set that extends into all areas of Toyota's business. Toyota may not want to admit to a problem publicly, but it rarely is in denial.
For example, it never liked to concede to outsiders that younger buyers were turned off by the company's bland styling. But it formed the Scion division to target a younger audience, and it raised the status of the company's designers.
3. Fast, disciplined product development cycles
GM and Ford tend to renew their vehicles on a "leisurely" six- to seven-year product cycle, says CLSA's Richter. "Toyota never lets its lineup get all that old," he says.
Weighted for sales volume, the average age of Toyota's U.S. model lineup is a mere 38 months, Richter says. That includes pickups and luxury models - which Toyota, like its competitors, leaves unchanged longer than its other passenger cars.
Steady investments in plants, equipment and r&d support a regular cadence of new models. Especially compared to American carmakers' lineups, Toyota's are "always fresher and newer - which means they can charge higher prices and get higher profits, which get turned into more new products," Richter says.
Toyota routinely re-engineers models in 18 months or less. By shortening the development time for redesigns, Toyota can make sure its new models are in tune with current market trends, not last year's.
4. Consistent and relentless
Toyota is astoundingly consistent. Some call it steady. Rivals choose another word: relentless.
"They always know where they want to be five years from now and are working at getting there," says Steven Wilhite, who this month left Nissan in Japan to become COO of Hyundai Motor America.Toyota has had some down years. But in a cyclical industry, it manages to mute the swings. In its worst year of the past 10, operating profits fell 9.5 percent in the year that ended March 31, 1999 - to a profit of $6.55 billion.
Toyota hasn't been in the red once during the past half century. It last posted a loss in the six months that ended March 31, 1950. That was three years before GM CEO Rick Wagoner was born.
What are Toyota's weaknesses? What risks does it face?
It will have to cope with external challenges: rising oil and other raw material prices, currency swings and such. But all carmakers face those risks.
The greatest risk arises from its own phenomenal growth. "Toyota has recognized its management constraints. It can only grow so fast," says Ashvin Chotai, an auto analyst at market researchers Global Insight, based in London.
Building factories is easy. Training new hires to understand the Toyota Production System is much harder. So far, Toyota has been able to do it. Walk into any Toyota assembly plant on the planet, and you'll find it runs the same way as the others. That's no small feat, as any automaker will concede. But the effort is putting a strain on Toyota.
Stretched thin, Toyota is reallocating personnel to keep up. It used to send manufacturing experts to Toyota group affiliates such as Kanto Auto Works Ltd., which assembles the Corolla, Lexus SC 430 and others. Now Toyota is calling those experts back to have enough trainers for workers at its new St. Petersburg, Russia, plant.
Chotai argues that stretched management resources may be the real reason that Toyota is increasing production in Japan, despite flat demand there. Toyota thinks it can bring up new capacity more quickly in Japan than in North America because of the strains already evident in its ability to train new workers, he says.
Troubling recalls
Some cite pell-mell growth as a possible factor behind a notable rise in Toyota's recalls in recent years. In Japan alone, Toyota recalled 1.1 million vehicles through July 20 this year. That's a big increase since 2002, when Toyota recalled just 485,000 vehicles during the entire year.
After accusations that Toyota had refused to issue a recall for a problem that later led to an accident, seriously injuring five people, Japanese who owned Toyota vehicles began calling the company to ask whether their car was safe. Watanabe and other executives issued public apologies and urged owners to bring their cars to dealerships for inspections if they had any concerns.
The company has changed the way it tracks defects and upgraded the status of the executive in charge of quality.
In the United States, Toyota's reputation for quality is intact. But it no longer sets the standard. In the latest J.D. Power and Associates Initial Quality Survey, the Toyota brand came in fourth, behind Porsche, Lexus and Hyundai.
Toyota's future success is not guaranteed. But don't bet against its ability to solve problems.
The day before the official launch of the Camry at the Guangzhou plant, the underground tunnels flooded. A day later, the plant opened on time.
Some parts never go outside before being installed on a car. They therefore require less packaging than similar parts delivered to assembly plants in Toyota City, reducing their cost.
As the Guangzhou plant shows, Toyota's strength does not lie in a single core competency. It rises from a complex, interlocking set of extraordinary skills. These include working closely with suppliers, continually finding ways to innovate and improve, and constantly challenging itself to cut costs.
The result is a carmaker that today dominates the industry in a way no single company has since the glory days of the Ford Model T or General Motors' global dominance in the 1950s.
This year could mark a milestone: Toyota appears on track to pass General Motors in global vehicle sales. In the first half, Toyota's sales rose 10.4 percent to 4.36 million, narrowing the gap as GM's fell 2.3 percent to 4.60 million.
That changing of the guard is not just the result of Toyota's strength in Asian markets such as Japan or Thailand. Much of Toyota's future growth will come in the United States, at the expense of its U.S. rivals. Indeed, Toyota's total sales in the United States topped Ford's during July.
Profit machine
Investors have shown their faith in Toyota's future by bidding up the share price. Toyota's stock market value is roughly 30 percent of the value of all global carmakers combined.
Irrational exuberance? Not at all. Toyota churns out about 30 percent of the global automotive industry's operating profit every year.
If you combined all carmakers' global profits, Toyota would account for about one-third. Other Japanese carmakers would combine for another third. All European, North American and other Asian carmakers together make up the final third.
Toyota's success allows it to invest heavily in the future.
Although the automaker is firmly committed to hybrid powertrains, it also is researching and developing diesel engines, engines that run on biofuels, fuel cells and all of the other potential power sources of future vehicles.
"We have to go ahead with the development of many and diverse types of powertrains," says Toyota CEO Katsuaki Watanabe. Other carmaker CEOs may feel that way, but few can afford to do it.
Consider the current talks between General Motors and the Nissan Motor Co.-Renault SA alliance. Carlos Ghosn, CEO of Nissan and Renault, would like to build light trucks at GM's underused plants. That would be cheaper than Nissan's building factories in North America.
But Toyota doesn't have to seek cheaper alternatives. With a war chest of $19.69 billion in cash, time deposits and marketable securities, it can afford to build any plants it wants.
And it has. Toyota has been opening new plants at a pace that would do Starbucks proud.
Over the past five years, Toyota has opened three assembly plants in China, one in Mexico and a joint-venture plant with PSA-Peugeot/Citroen in the Czech Republic. It also opened powertrain factories in China, India, Poland and Alabama. It currently is building assembly plants in San Antonio; Woodstock, Ontario; and St. Petersburg, Russia.
Toyota paid cash for all of them. It has not borrowed any money to pay for the new plants.
Beyond loyalty
How did Toyota climb to the top?
Some of its strengths are cultural ones shared by the best Japanese companies. These include a respect for lifelong learning that aids kaizen, or continuous improvement. In addition, a consensus management style, combined with a Confucian respect for hierarchy, allows the rapid implementation of decisions.
The Japanese emphasis of the group over the individual also promotes a devotion to the company that some Westerners find extreme. It has not spread abroad easily.
"Japanese companies essentially are a community, not an economic entity," says James Abegglen, a co-founder of Boston Consulting Group and the dean of Japanese management gurus. Abegglen coined the phrases "Japan Inc." and "lifetime employment."
"Remember quality circles?" he asks. They failed in the West because they ran up against a different workers' mind-set, he says. "Stay after work at no pay to help the company get better? Forget it."
That devotion to the company rather than the individual extends beyond the factory floor all the way to the CEO's office. Consider the issue of executive pay.
"U.S. CEOs' income is 550 times greater than the average employee's," says Abegglen. Citing figures from compensation consultants Tower Perrin, he says that in Japan, "the multiple is about 10 or 11 - almost identical to Germany."
"Compensation is distributed within the community, and no one person is given room to be so overly compensated," he says.
To be sure, Japanese management is not a panacea. Lots of Japanese companies have followed Japanese management methods right into bankruptcy.
What sets Toyota apart is its superb management of so many aspects of a complex business. Here are some areas where it excels.
1. Elimination of waste
Perhaps Toyota's most defining characteristic is its obsession with eliminating waste, or muda in Japanese. It is a mind-set that goes well beyond the cost-cutting espoused by other carmakers.
A month before Watanabe became Toyota's CEO in June 2005, the carmaker announced operating profits of ¥1.67 trillion, or $14.60 billion at then-current exchange rates, for the fiscal year that ended March 31, 2005. It was the fattest profit for any Japanese company ever.
One of his first acts as president was to warn the troops against going soft.
Don't think we're flush, he wrote in a companywide memo. We still need to attack costs and waste as much as ever. When making copies, he wrote, always use both sides of the paper.
Analyst Christopher Richter of CLSA Asia-Pacific Markets connects that aspect of Toyota's corporate culture with the company's leadership in hybrids.
"I can imagine Toyota engineers sitting around and talking about all the energy that is lost to heat in braking and how they can recapture that," he says.
"I'm sure that when that engineer started to sell hybrids to his superiors, the light bulbs all went off: This was a way to eliminate waste," he says. "I'm convinced that's why hybrids have such great appeal to Toyota."
2. A culture rooted in manufacturing
Throughout the company, there is a deep respect for monozukuri. The Japanese term literally means "making things." The term connotes a craftsman's devotion to manufacturing, whether by traditional or high-tech methods.
At other carmakers, executives are often split between "bean counters" and "car guys." Factory experts are a distant third in the race to the CEO's job. At Toyota, there are manufacturing men - and everyone else. Both Watanabe and his predecessor, Fujio Cho, worked in Toyota's manufacturing ranks before becoming CEO.
One byproduct of that manufacturing culture is a rabid devotion to solving problems. Things go wrong in a factory. Machines break down. Workers call in sick.
Toyota managers are indoctrinated into the best ways to solve problems.
Don't treat a problem as a one-time glitch. Find out why it happened, and fix it so it won't happen again. Do root-cause analysis, asking the "five whys" to find out the real reason that machine broke down. Don't rely on a written report. Go to the site of the problem and check it out yourself.
Better yet, anticipate problems.
In a classic encounter, Toyota and GM managers met in the mid-1980s to review that week's production at their new joint venture, New United Motor Manufacturing Inc. in Fremont, Calif. A lifetime GM manager, trained not to bother his boss with problems, brightly reported "no problems" in his department. His new Japanese boss looked him in the eye and said, "No problem is a problem."
It's a mind-set that extends into all areas of Toyota's business. Toyota may not want to admit to a problem publicly, but it rarely is in denial.
For example, it never liked to concede to outsiders that younger buyers were turned off by the company's bland styling. But it formed the Scion division to target a younger audience, and it raised the status of the company's designers.
3. Fast, disciplined product development cycles
GM and Ford tend to renew their vehicles on a "leisurely" six- to seven-year product cycle, says CLSA's Richter. "Toyota never lets its lineup get all that old," he says.
Weighted for sales volume, the average age of Toyota's U.S. model lineup is a mere 38 months, Richter says. That includes pickups and luxury models - which Toyota, like its competitors, leaves unchanged longer than its other passenger cars.
Steady investments in plants, equipment and r&d support a regular cadence of new models. Especially compared to American carmakers' lineups, Toyota's are "always fresher and newer - which means they can charge higher prices and get higher profits, which get turned into more new products," Richter says.
Toyota routinely re-engineers models in 18 months or less. By shortening the development time for redesigns, Toyota can make sure its new models are in tune with current market trends, not last year's.
4. Consistent and relentless
Toyota is astoundingly consistent. Some call it steady. Rivals choose another word: relentless.
"They always know where they want to be five years from now and are working at getting there," says Steven Wilhite, who this month left Nissan in Japan to become COO of Hyundai Motor America.Toyota has had some down years. But in a cyclical industry, it manages to mute the swings. In its worst year of the past 10, operating profits fell 9.5 percent in the year that ended March 31, 1999 - to a profit of $6.55 billion.
Toyota hasn't been in the red once during the past half century. It last posted a loss in the six months that ended March 31, 1950. That was three years before GM CEO Rick Wagoner was born.
What are Toyota's weaknesses? What risks does it face?
It will have to cope with external challenges: rising oil and other raw material prices, currency swings and such. But all carmakers face those risks.
The greatest risk arises from its own phenomenal growth. "Toyota has recognized its management constraints. It can only grow so fast," says Ashvin Chotai, an auto analyst at market researchers Global Insight, based in London.
Building factories is easy. Training new hires to understand the Toyota Production System is much harder. So far, Toyota has been able to do it. Walk into any Toyota assembly plant on the planet, and you'll find it runs the same way as the others. That's no small feat, as any automaker will concede. But the effort is putting a strain on Toyota.
Stretched thin, Toyota is reallocating personnel to keep up. It used to send manufacturing experts to Toyota group affiliates such as Kanto Auto Works Ltd., which assembles the Corolla, Lexus SC 430 and others. Now Toyota is calling those experts back to have enough trainers for workers at its new St. Petersburg, Russia, plant.
Chotai argues that stretched management resources may be the real reason that Toyota is increasing production in Japan, despite flat demand there. Toyota thinks it can bring up new capacity more quickly in Japan than in North America because of the strains already evident in its ability to train new workers, he says.
Troubling recalls
Some cite pell-mell growth as a possible factor behind a notable rise in Toyota's recalls in recent years. In Japan alone, Toyota recalled 1.1 million vehicles through July 20 this year. That's a big increase since 2002, when Toyota recalled just 485,000 vehicles during the entire year.
After accusations that Toyota had refused to issue a recall for a problem that later led to an accident, seriously injuring five people, Japanese who owned Toyota vehicles began calling the company to ask whether their car was safe. Watanabe and other executives issued public apologies and urged owners to bring their cars to dealerships for inspections if they had any concerns.
The company has changed the way it tracks defects and upgraded the status of the executive in charge of quality.
In the United States, Toyota's reputation for quality is intact. But it no longer sets the standard. In the latest J.D. Power and Associates Initial Quality Survey, the Toyota brand came in fourth, behind Porsche, Lexus and Hyundai.
Toyota's future success is not guaranteed. But don't bet against its ability to solve problems.
The day before the official launch of the Camry at the Guangzhou plant, the underground tunnels flooded. A day later, the plant opened on time.
08-18-2006, 11:55 PM
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Toyota hasn't been in the red once during the past half century. It last posted a loss in the six months that ended March 31, 1950. That was three years before GM CEO Rick Wagoner was born.
LOL
08-19-2006, 12:32 AM
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Originally Posted by gavriil
LOL
I dont always respect Toyota's cars but I respect the company immensely.
08-19-2006, 01:00 AM
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Originally Posted by SpeedyV6
If only 1sicklex were here to read this article. It would surely bring a tear to his eye. 
I'm sure he still lurks on here
08-19-2006, 01:10 AM
#7
I'm the Firestarter
Wow. Wish my company was run this well.
Trending Topics
08-19-2006, 03:00 AM
#8
When making copies, he wrote, always use both sides of the paper.
I too respect and admire Toyota, but I fear the day when I have no choice but to work at such an anal-rententive company and drive their soulless products every day.
08-19-2006, 01:27 PM
#9
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Originally Posted by shrykhar
I too respect and admire Toyota, but I fear the day when I have no choice but to work at such an anal-rententive company and drive their soulless products every day.
08-19-2006, 08:31 PM
#10
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looks like there cost cuting may have effects like fords did in the future. I went to the toyota dealership a few days ago with a friend, and the new camrys were almost entirely made of plastic. ( the interior at least)
08-19-2006, 11:36 PM
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We were just talking about this article at the WI meet here
https://acurazine.com/forums/showthr...2&page=5&pp=25
The reason Toyota's offerings are not highly respected by many auto enthusiasts is because TOyota does not care very much about us. We are the absolute minority when it comes to who's buying cars out there. A Camry and a Corolla are not bought by "us". But that's what brings gobs of money in which is used for more and better mainstream cars.
However, Toyota may be mainstream but Scion and Lexus are not, dont forget. And this is interrelated with the fact that we now know that the Supra is totally dead as a project. Toyota must remain mainstream is what Toyota decided.
I asked the guys at the meet "the Vette is a great car for the past 7 years especially, but what has the Vette done for GM moneywise?" The Vette does not help sell Malibus or Silverados. GM put money into the exciting part (Vette) but Toyota did the opposite by putting money into the Camry, Corolla and overall way of running their factories. They put money in fundamentals. "They bought blue chips during the dot com upward run." Hell even Honda is ahead now because they rolled the dice and stayed conservative by declining to build big trucks and big engines. Now everyone wants to be Honda when it comes to mid and small size vehicles because energy is expensive.
Back to Lexus and Scion. Toyota decided that the LFA will go and compete against the Vette. It will be sold as a luxury Vette car. That killed the Supra. Toyota decided that Scion will bring in the younger buyers that Toyota is unable to keep currently and Lexus will deal with the excitment factor for buyers with more to spend. However they (Toyota) have admitted and accepted that they do have a problem with Lexus lacking in the excitment factor and this will be fixed in the next 5-6 years. However, they do not recognize that Toyota has a problem with the market's perception about excitment, because Toyota DOES NOT have to be exciting. Mainstream is always more conservative, less exciting. Mainstream is about an appliance. That's what the masses want, that's what Toyota makes.
https://acurazine.com/forums/showthr...2&page=5&pp=25
The reason Toyota's offerings are not highly respected by many auto enthusiasts is because TOyota does not care very much about us. We are the absolute minority when it comes to who's buying cars out there. A Camry and a Corolla are not bought by "us". But that's what brings gobs of money in which is used for more and better mainstream cars.
However, Toyota may be mainstream but Scion and Lexus are not, dont forget. And this is interrelated with the fact that we now know that the Supra is totally dead as a project. Toyota must remain mainstream is what Toyota decided.
I asked the guys at the meet "the Vette is a great car for the past 7 years especially, but what has the Vette done for GM moneywise?" The Vette does not help sell Malibus or Silverados. GM put money into the exciting part (Vette) but Toyota did the opposite by putting money into the Camry, Corolla and overall way of running their factories. They put money in fundamentals. "They bought blue chips during the dot com upward run." Hell even Honda is ahead now because they rolled the dice and stayed conservative by declining to build big trucks and big engines. Now everyone wants to be Honda when it comes to mid and small size vehicles because energy is expensive.
Back to Lexus and Scion. Toyota decided that the LFA will go and compete against the Vette. It will be sold as a luxury Vette car. That killed the Supra. Toyota decided that Scion will bring in the younger buyers that Toyota is unable to keep currently and Lexus will deal with the excitment factor for buyers with more to spend. However they (Toyota) have admitted and accepted that they do have a problem with Lexus lacking in the excitment factor and this will be fixed in the next 5-6 years. However, they do not recognize that Toyota has a problem with the market's perception about excitment, because Toyota DOES NOT have to be exciting. Mainstream is always more conservative, less exciting. Mainstream is about an appliance. That's what the masses want, that's what Toyota makes.
08-20-2006, 03:20 AM
#12
Originally Posted by gavriil
However they (Toyota) have admitted and accepted that they do have a problem with Lexus lacking in the excitment factor and this will be fixed in the next 5-6 years. However, they do not recognize that Toyota has a problem with the market's perception about excitment, because Toyota DOES NOT have to be exciting. Mainstream is always more conservative, less exciting. Mainstream is about an appliance. That's what the masses want, that's what Toyota makes.
(Just to clarify: their cars are fine. Their marketing makes me sick, in the same vein that Apple's "Think Different" garbage turns me off their perfectly good products. You know, it's like those smarmy tv shows or cereals or toys that pander to little kids, and you later find out how much effort goes into kid-attention-span-research and that sort of thing, and it horrifies you. It's not like someone with the soul of a kid made something that kids would enjoy, but instead something that a corporation decided kids SHOULD enjoy, then went ahead brainwashing them into buying their products.)
Lexus makes nice comfy cars, but the IS at 3500+ lbs isn't my idea of exciting. Things only get heavier from there, and I don't see them going "downmarket" with a sportier entry any time soon (see RSX, demise of). For crying out loud, they're coming out with their 4th SUV (I think).
I'm just venting, really. I was in the market for a car recently, and I seriously couldn't believe that there weren't any Toyota products that really grabbed my attention. I'm also disappointed (but not surprised) that Toyota apparently has nothing in the pipeline that makes me care.
(Erm ... sort of like the SRT-4. I sure as hell wouldn't buy it, but it gives me the feeling that its designers were slightly out of their minds, and I envy those whose life's responsibilities allow them to own one.)
08-20-2006, 03:32 AM
#13
As an afterthought, it would be freakin awesome if Toyota focus-grouped true car performance enthusiasts and established another niche brand, say, "Insano." And these cars came with ridiculous power to weight ratios, and the purchase of these cars was guaranteed to make you lose your hearing, continence, sanity, life, or at least your drivers license. ("Insano Debilitator 4000!") I can just imagine NHTSA crash test videos of these tiny go-karts fitted with big honkin' V8s slamming into concrete blocks and the bits of the hapless crash test dummy flying all over the place. I'd get one.
08-20-2006, 02:36 PM
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Originally Posted by shrykhar
My beef with Scion is that their current cars are either cheap tin cans on casters (xA, xB) or recycled Camry parts (tC) with heaps of focus-group marketing BS on top. It feels like they've identified a niche, and tried to fill it with reskinned products trying to be something that they aren't. And no, kids, modding your Scion won't make it any faster or less ugly.
(Just to clarify: their cars are fine. Their marketing makes me sick, in the same vein that Apple's "Think Different" garbage turns me off their perfectly good products. You know, it's like those smarmy tv shows or cereals or toys that pander to little kids, and you later find out how much effort goes into kid-attention-span-research and that sort of thing, and it horrifies you. It's not like someone with the soul of a kid made something that kids would enjoy, but instead something that a corporation decided kids SHOULD enjoy, then went ahead brainwashing them into buying their products.)
Lexus makes nice comfy cars, but the IS at 3500+ lbs isn't my idea of exciting. Things only get heavier from there, and I don't see them going "downmarket" with a sportier entry any time soon (see RSX, demise of). For crying out loud, they're coming out with their 4th SUV (I think).
I'm just venting, really. I was in the market for a car recently, and I seriously couldn't believe that there weren't any Toyota products that really grabbed my attention. I'm also disappointed (but not surprised) that Toyota apparently has nothing in the pipeline that makes me care.
(Erm ... sort of like the SRT-4. I sure as hell wouldn't buy it, but it gives me the feeling that its designers were slightly out of their minds, and I envy those whose life's responsibilities allow them to own one.)
(Just to clarify: their cars are fine. Their marketing makes me sick, in the same vein that Apple's "Think Different" garbage turns me off their perfectly good products. You know, it's like those smarmy tv shows or cereals or toys that pander to little kids, and you later find out how much effort goes into kid-attention-span-research and that sort of thing, and it horrifies you. It's not like someone with the soul of a kid made something that kids would enjoy, but instead something that a corporation decided kids SHOULD enjoy, then went ahead brainwashing them into buying their products.)
Lexus makes nice comfy cars, but the IS at 3500+ lbs isn't my idea of exciting. Things only get heavier from there, and I don't see them going "downmarket" with a sportier entry any time soon (see RSX, demise of). For crying out loud, they're coming out with their 4th SUV (I think).
I'm just venting, really. I was in the market for a car recently, and I seriously couldn't believe that there weren't any Toyota products that really grabbed my attention. I'm also disappointed (but not surprised) that Toyota apparently has nothing in the pipeline that makes me care.
(Erm ... sort of like the SRT-4. I sure as hell wouldn't buy it, but it gives me the feeling that its designers were slightly out of their minds, and I envy those whose life's responsibilities allow them to own one.)
2. There is nothing wrong with using Camry parts within Scion. Look at the Scion pricing. In order to achieve that you need to borrow from your most popular parts bins. Every one is doing it. Most people dont notice things like these. Scions are selling well compared to Toyota's expectations, is the proof of that.
3. Maybe the IS is not the most exciting entry luxury sports sedan, but I dont think it's because of its weight. Look at BMW and the rest of the competition. Lexus is about average with regard to weight in the same category. Now if you talked about its exterior styling not being as exciting as others, I'd say you have a point, however BMWs are not super exciting looking either and they are considered the benchmark in the category. So Lexus does not lack there either. Again, the next 5 years for Lexus will be full of new product. MY 2008 will be a big bang for them (that's next year).
4. Finally, about all these SUVs, etc. Well, that's what sells. Luxury crossovers and SUVs. People want that. So nothing wrong with adding to that product segment.
08-20-2006, 02:53 PM
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Originally Posted by shrykhar
As an afterthought, it would be freakin awesome if Toyota focus-grouped true car performance enthusiasts and established another niche brand, say, "Insano." And these cars came with ridiculous power to weight ratios, and the purchase of these cars was guaranteed to make you lose your hearing, continence, sanity, life, or at least your drivers license. ("Insano Debilitator 4000!") I can just imagine NHTSA crash test videos of these tiny go-karts fitted with big honkin' V8s slamming into concrete blocks and the bits of the hapless crash test dummy flying all over the place. I'd get one.
1. Why would Toyota need to do that? Toyota cares about one thing. Profits! Everything else is linked to that. If there is something out there that will make them more profitable in the future, they will go after it like maniacs. They have dont that again and again in the past. Again, what has the Vette done for GM for profits? Very little. When a Vette potential buyer thinks of a Vette, do they think of other Chevy products? When a Malibu prospect buyer thinks of the Malibu do they ever think that because the Vette is a Chevy then that somehow heps the Malibu become more appealing to them? Absolutely not. So what would a Supra do for Toyota's Camrys, Corrolas and RAV4s? PLUS! These enthusiast products are expensive to develop also. Toyota is smart and using these resources where money comes from. The Camry and the rest of the cash cows. The interesting thing is that Toyota has acted similarly with Lexus also. Look how much attention they pay to the ES and the RX! Why? Cos that's what sells. Now look at the LX. They dont give a crap's ass about it. It will go 8 years without a complete redo the LX after the latest news. Put attention to what people buy, is their mantra, not what people get excited from but CANNOT AFFORD! Who can affort the Vette for what it is? Few people. Fourty thousand or less a year is laughable in this industry where if something does not sell at least 100K units a year, simply is not profitable.
2. On the other hand, Toyota has made some big moves towards adding to its products' excitment. One of these moves which few pay attention to is their entry to Formula 1. The LFA will be the first fruit spawned by that effort. There will be more to come later. They take their time with this because they know it's about perception and it's not directly helping to adding to their wallets in profits. BMW is also much about perception and excitment and look how slowly they go into adding new products and how conservative they have been in general. These similarities in strategy are not coincidental.
GM and Ford tried to do that also. 10, 15 years ago, profits were with trucks. So both put all their eggs into that one basket, however because there was very little competition, they were not even good at it. As long as you made a huge truck and priced it right, you'd sell. It kinda reminded me software sales from 1991 until 1999. My cat could sell it.
Now, two things have added to the equation:
A. The Japanese are getting in the game of trucks which resulted in GM and Ford being exposed with regard to product quality and even design in general.
B. Gas prices make these trucks less appealing to purchase. And also making people that MUST buy a truck, to demand a different type of truck. An example is the Ridgeline which the market basically said, this is different but it's not what I want. But keep trying, cos I know I dont want the Silverado and F150 for much longer either with these gas prices.
The problem with all that is that cars were left to the worst of the worst of the companies (Ford and GM) to continue developing while Toyota and HOnda were doing exactly the opposite. Now add to all that product problem GM' and Ford's financial issues with pensions and the unions in general and you simply have the perfect storm here. How GM is not the third largets company today, let alone second, is a surprise to me looking at all that went wrong so quickly. That tells you the depth and breadth of this company. Which was embedded in its past performance and culture.
Now we see GM trying to become one company and pay attention to cars. The next Malibu will be substantial no doubt, however exactly how good, we'll only know when it's tested. By the market, not the mags.
They have fixed their large trucks for now and the next 3 years. However Toyota's momentus is so powerful, even if GM executed flawlessly (which even that is very unlikely), Toyota will overtake them in the next few years. And that's when a move for Ford will take place. I am not sure by whom, but Ford will either merge or be bought by someone, it's not fixable in my eyes.
08-21-2006, 01:26 AM
#16
I was kidding, y'know ... 
I do realize that Toyota is out to make a profit, and that sports/sporty cars are a vicious business to get into. I'm just sad that they got rid of their fun cars and instead added a few more SUVs and a commercial trying to market the Camry's sportiness (the one calling it an "accomplice.")
I do realize that Toyota is out to make a profit, and that sports/sporty cars are a vicious business to get into. I'm just sad that they got rid of their fun cars and instead added a few more SUVs and a commercial trying to market the Camry's sportiness (the one calling it an "accomplice.")
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