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Toyota’s Bob Carter: “By the end of this year, 60% of our lineup will be all new.” Shown here when the 2013 Avalon was revealed in New York, a car designed, engineered and built in the U.S.

How to Achieve Success

It is all about doing it all. Upping the design. Developing engineering. Manufacturing high-quality products. That’s how you spell success in this industry.

Listen to Bob Carter, senior vice president, Automotive Operations, Toyota Motor Sales USA, talking to the Automotive Press Association in Detroit on September 5, the day after the industry released its August sales numbers: “For the industry, the consensus among analysts is for annual sales to increase by about a million vehicles to 15.5-million, up nearly 7% from last year—although it is tracking higher now.”

And he suggested that things “should only get better as pent-up demand is fully realized.”

Carter pointed to R.L. Polk numbers that indicate the average age of vehicles on the road today is 11.4 years, compared to 10.8 years in 2011.  While this speaks, in part, to the fact that the entire industry is making cars that are simply better in terms of longevity, let’s face it: Plenty of people get tired of their cars after a few years, to say nothing of 11.4 years.

Carter noted some figures indicating how they’re addressing the increased demand.  The company has invested more than $2.1-billion over the past 22 months on 11 new North American manufacturing expansions.  They added over 4,000 new jobs, which brings the total to some 37,000.  Toyota has 14 plants in North America, producing 70% of the vehicles that it sells here.  It has produced more than 25-million of them in North America.  To be sure, 25-million isn’t exactly, say, Ford numbers, but realize that Toyota built its first car—a Corolla FX16—in the U.S. in October, 1986, at the then-New United Motor Manufacturing Inc. plant—the Toyota-GM joint-venture.  The Georgetown Plant in Kentucky, which is the biggest Toyota manufacturing facility outside of Japan, didn’t start production until May 1988.

In addition to manufacturing, it is addressing product.  So far this year, they’ve launched nine new or updated Toyota, Lexus and Scion models.  And Carter said, “In addition to the new Tundra, Corolla and Highlander coming out this year, we’re planning to introduce more than two dozen new, updated or hybrid Toyota, Scion and Lexus models during the next 24 months alone.  I’m talking trucks to compact and luxury cars to our first-ever fuel cell hybrid in 2015.”

Yes, fuel-cell hybrid.

Speaking of hybrids, the company presently offers 12 models (Toyota and Lexus) in the U.S., and the company has 70% of the hybrid market in the U.S.  Carter says that they anticipate selling 250,000 Prius models this year: “that’s more than last year’s Acura and Volvo sales combined.”

It wasn’t all that long ago that Toyota was being raked over the coals for the alleged unintended acceleration problem.  Its sales were not only taking a hit from the then-on-going Great Recession, but because of the seemingly endless news reports of still-another Toyota or Lexus that seemed to be out of control.  The National Traffic Highway Safety Administration even called in NASA to assess the electronic throttle control in the Toyota vehicles.  NASA didn’t find any serious problems.*

There is no question that that is behind them.  Carter said they project sales of 2.2-million vehicles in the U.S. this year.

“At Toyota,” Carter said, “we firmly believe we have the right people, the right direction, and the right products to meet the various needs of consumers around the world.”

What’s important about that is the fact that there is a fundamental recognition that it takes people and infrastructure to create products.  It takes a willingness to take a risk and make a commitment to that risk, as is reflected in the company’s dedication to hybrid technology.  There is no sense of entitlement.  No notion that Camry will automatically become the best-selling car in the U.S. for 12 years running.

Rather, it is all about doing it all.  Upping the design.  Developing engineering (the day after Carter spoke Toyota announced a $28-million investment in Toyota Technical Center’s Ann Arbor powertrain development facilities).  Manufacturing high-quality products.  All that.

And that’s how you spell success in this industry.

*One of the things that was under-reported was the NASA study, “Technical Assessment of Toyota Electronic Control (ETC) Systems,” which was released in February 2011.  Included in the report is the following:

“After conducting the most exacting study of a motor vehicle electronic control system ever performed by a government agency, NASA did not find that the ETC electronics are a likely cause of large throttle openings in Toyota vehicles as described in consumers’ complaints to NHTSA. NASA found that many safety features are designed into the ETC system to prevent UA [unintended acceleration] and, if faults are detected, to cause the initiation of safe modes of operation that limit acceleration (e.g., limp home, fuel cut strategies). NASA found no flaws in the software code controlling the Toyota ETC system that would cause UA. NASA also found that electromagnetic compatibility (EMC) testing at exposure levels well above current certification standards did not produce an open throttle. NASA found no evidence that any failures of the ETC system had an effect on the performance of the braking system.”

Who knew?

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