Interview: Toyota Motor
>> welcome back. toyota, world’s second largest carmaker by production, plans to make itself number one. suzy assaad spoke with jim press, executive vice president of toyota motor sales, about his company’s performance in north america.
>> we’ve seen an uptick, on a record sales pace so far this year, as we’re introducing a number of new vehicles. our new sion brand and have had tremendous reaction from the hybrid prius lines.
>> can you give us more details, quantify how well the prius is doing, whether it makes sense for toyota to start building that model with technology here in the u.s.?
>> it makes sense for us to see hybrids on the road because it’s the solution for tomorrow’s problems, it’s responsible and a great car on its own but when you add the environmental aspect, the low fuel use, it’s a great solution everybody needs. we’re studying the construction of them here in the united states and we’ll look at that soon and hopefully have an announcement in the not too distant future.
>> does it so far look like it’s making sense to do it in the u.s., or not adding up? >> it does make sense. our demand has been tremendous. we’ll do about 50,000 this year and have the capacity to do 100,000 next year and we need to go way beyond that for the future. at that volume, we want to make them here. our goal is to make everything in the markets where we sell them and that car makes sense.
>> could you give us―quantify for us how well sales have been going?
>> our sales have been tremendous. in fact, i just read somewhere an article where they said the waiting list for hybrids is longer than organ transplants. the fact is that society understands the importance of being responsible for the future. this car on its own is a great car but when you add the environmental aspect, there’s no way to say no to it. our original forecast of sales was 36,000. we will do 50,000, supply constrained. we could do 100,000 this year if we had the production as the demand is overwhelming.
>> in terms of toyota’s vision, as we’ve heard you’re trying to become number one, ougating general motors by 2010 -- for you to do that, there was an article that said you’re going to have to increase sales by 50% in order to get to that target. is that realistic?
>> well, first of all, just to clarify, we really don’t have a goal to be number one or unseat any competitor. we really want the ocean to ris so all the competitors rise with it. our goal is to try to achieve 15% market share, which means that we can expand our customer base that we have now and keep giving them additional vehicles. we will have to increase our volume. we’ll be doing that by getting involved in full-sized trucks. about threat 38% of our small truck buyers moved to full-sized trucks who want a legitimate big full-sized truck for hem and other new models like sion and hybrids that will allow us to grow.
>> the incentives, the incentives wars, your competitor at g.m. has said that toyota is leading on incentives, not general motors. what do you think of that?
>> if you look at the numbers, our incentives are the lowest in the industry per vehicle. what we do is price our vehicles, we have a great quality, great resale value and the biggest piece of it is the value of the car is lower, our prices to begin with are much lower. we don’t inflate the prices and then add a discount to woo customers in. we give them good value. that’s not an incentive but built-in quality and value and that’s what we do, is we work for the customers.
>> the customers don’t seem to be too happy. according to many surveys, the j.d. power survey, that your sales satisfaction ratings are coming in at the bottom of the surveys from customers. what do you plan on doing about that?
>> that’s something we take very seriously and of course our customers have higher expectations. we want to give them a delivery of a higher level of service. sion customers are thrilled. lexus customers are amongst the highest in the industry. we’ve had latest information to dealers and new processes that we’ll confident that soon we’ll be able to turn that over and have leadership in not only quality of vehicle, but quality of service.
>> are you instituting any changes, managerial or otherwise to do that?
>> it’s in our culture to give quality service and it really doesn’t take changes in management. our growth has been part of the issue and we have to have expansions. our dealers are going through a $1.8 billion facility expansion investment. that will help a lot when we have the capacity in the dealerships to provide that level of service. we have the best dealers in the industry, but they need the facilities.
>> on the day, toyota american depository receipts traded under t.m., fell for the second day in a row but year to date, that chart showing up 9.5% so far in 2004. also out with earnings tomorrow, general motors. chief executive richard wagoner likely boosting third-quarter profit by persuading more people to borrow from the loan and mortgage unit. wagoner offered higher rebates for those who signed up for auto loans, likely to boost profit in the quarter. g.m. is expected to post profit of 90 cents a share. when we return, japanese retailer daiei applied for its third government bailout in three years. we’ll bring you details and a preview of the asia-pacific region, next.
