Toyota bets big on hybrids for its U.S. sales revival
Photo credit: BLOOMBERG
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TOKYO -- Toyota Motor Corp. is betting on a burst of hybrid vehicles to revive its lagging U.S. sales, hammered by recalls and the Japan earthquake.
Toyota will introduce two new Prius models next spring and will enter new hybrid segments such as big pickups. The blitz would culminate in shifting more hybrid production to North America, a move designed to fight the rising yen.
Top executives who outlined the strategy to Automotive News said the company could double the number of gasoline-electric vehicles sold annually in North America to 400,000 by 2015.
Achieving such volume would enable Toyota to shift production to North America of more hybrids as well as their key components such as motors, batteries and inverters.
The strategy has risks. Demand for pricey hybrids correlates closely with gasoline prices, which have dipped. And rivals are catching up in fuel economy, often through less costly improvements to internal-combustion drivetrains.
Takeshi Uchiyamada, the company's global r&d chief, freely admits that Toyota is somewhat of a laggard in direct injection and advanced transmissions because of its commitment to hybrid technology.
Uchiyamada, who was chief engineer of the first Prius, says hybrid cars are on the cusp of going mainstream -- at least in Toyota's expanding lineup.
"Hybrid technology is a trump card for fuel-economy improvement," he said while introducing the production version of the Prius plug-in hybrid ahead of the Tokyo Motor Show. That car is a beefed-up normal Prius that gets a lithium ion battery instead of the conventional Prius' nickel-metal hydride one. The plug-in has a longer electric-only driving mode.
The company recently launched the wagon-style Prius V in the United States. And this spring, Toyota will add the plug-in as well as the subcompact Prius C hatchback, based on the Yaris.
Uchiyamada said Toyota expects next year to finish a prototype hybrid pickup system it is developing with Ford Motor Co. Toyota hopes to use the system in the Tundra full-sized pickup. Ford also will use the technology in large pickups.
Bob Carter, Toyota Division general manager, said, "Hybrids are a big part of our growth strategy." He said he expects the Prius hybrid family will surpass the Camry in the second half of this decade as Toyota's top-selling nameplate.
Other key points of Toyota's hybrid blitz:
-- Boost global hybrid sales to 1.2 million units annually by 2015, from about 690,000 last year.
-- Expand the number of traditional models, such as the Camry, offered with a hybrid option.
-- Continue shifting from nickel-metal hydride to lithium ion batteries in hybrid vehicles, including upper-trim versions of the next generation Prius. The plug-in Prius has lithium.
Expanded output of hybrid drivetrain components in North America would reduce Toyota's imports from Japan, which are prohibitively expensive because of the strong yen. Currently, only the Camry hybrid is built in North America. Its electric motor, inverter and battery are imported from Japan.
"Unless we can start production of parts around" 2015, said global procurement chief Shinichi Sasaki, "we will see our business face difficulty in the United States."
Toyota sold 195,882 hybrids in North America in 2010, including 143,890 Priuses, but will sell fewer this year because of supply disruptions from the March earthquake. The company foresees incremental sales of 15,000 a year starting in 2012 from the plug-in Prius. Satoshi Ogiso, chief engineer for the Prius family, says the small Prius' sales will be close to the standard Prius'.
Ogiso hopes to see faster gains in fuel efficiency from fast-changing hybrid technology than the company can squeeze from the traditional internal combustion engine.
You can reach Hans Greimel at hgreimel@crain.com. -- Follow Hans on 
