LOS ANGELES - Maybe it isn't fear. Maybe it is more of a sinking feeling, watching its owners turn gray.
While Toyota Motor Sales U.S.A. Inc. is having its most successful sales year ever, the company is fretting about the future. Its leaders wonder whether Toyota could be a one-generation wonder. The gnawing question: Will the Toyota brand end up being beloved only by baby boomers but as relevant to younger generations as Buick?
The median age of Toyota Division buyers is 45 years old. Three years ago, it was 43. In 1990, it was 39. The trend has set off some alarms.
'We've done a great job with the boomers, but we've taken our eye off the ball with the younger generations,' admitted Don Esmond, Toyota Division general manager.
To find a way to connect with younger consumers, Toyota last year created the Genesis Group -a collection of nine Young Turks, between 29 and 37 years old. Their mission: Make Toyota, and to a lesser extent Lexus, as important to Generation X and NetGen as it is to baby boomers.
Now, one year later, the group faces some fresh challenges. Already, its goal has been scaled back. And while Genesis' scope remains broad - marketing, advertising, product planning and more - there is a nascent feeling within Toyota that the effort may not be enough to sway younger buyers.
Other issues remain unsettled, too. How far should Genesis go? Should it concentrate just on 'youth' products, such as the RAV4 sport-utility? Or should it focus on every product within Toyota and Lexus?
REACHING YOUNGER BUYERS
Even though Generation X represents just 17 percent of the population, it is a rich demographic segment. By Toyota's count, it has nearly $900 billion in disposable income. And around the corner is the NetGen, the kids of the boomers, a giant demographic clot.
'We need to have intellectual and thought-provoking marketing,' said Mark Del Rosso, the 35-year-old head of the group.
'These people are telling us, `I can figure it out on my own.' We can have the greatest product in the world, but if we approach this customer wrong, he'll say, `Dude, you just blew it.' And we won't get a second chance,' Del Rosso said.
For now, Genesis Group's main focus lies in launching the Echo and Celica, two cars that will arrive this fall.
Already, Toyota Division's marketing vice president, Steve Sturm, has told all departments that Genesis must sign off before any pricing, promotion or placement plan moves ahead. Toyota ad agency Saatchi & Saatchi also has created its own splinter group to deal directly with Genesis.
But Toyota will not simply play cutting-edge music, have a hip spokesman and show edgy typestyles. Generation X is not just Mountain Dew-swilling snowboarding slackers, just as baby boomers were not merely pot-smoking, free-love hippies. And the sooner businesses realize that, the sooner they will connect with Generation X, Del Rosso said.
THE GENESIS OF GENESIS
Although it's too early to rate Genesis' performance, Toyota already has scaled back the expectations of the group.
'Just getting into the consideration set of the post-boom consumer is important. While the initial mission was to become the preferred brand, now we have a more realistic goal to be in the upper tier of the consideration set,' Del Rosso said.
The Genesis Group was formed long after the first two products it is supposed to oversee - the Echo entry-level subcompact and the Celica sporty coupe - had reached the end of their development pipelines. But Genesis nonetheless brought about changes that, while minor, might make the difference between a sale and a walkaway.
For instance, for the Echo, older executives felt the car would do fine with an AM/FM radio with four speakers. But the Genesis Group knew that Generation X values premium audio systems and persuaded the Echo's chief engineer, Yasuhiko Ichihashi, to install premium Fujitsu Ten systems with CD players and six speakers as standard. Genesis also pushed through styling for the sport packages and wheel caps for the Echo.
'The Genesis guys were pretty bold,' Esmond said. 'They had never dealt with chief engineers and their egos, but they accomplished way more than we could have done alone.'
Esmond, 55, noted that the Genesis Group is more attuned to making certain product- and marketing-related decisions than the veteran executives: 'We can't have old farts like me deciding what today's youth buyer wants and what `looks' youthful.'
As far as future product decisions go, Genesis will have a hand in design theory and driving feel, but not in the actual execution. So while Genesis will suggest how a product should look and feel, Toyota designers still will create the vehicle and engineers still will set up the hardware.
'If there are risk and financial implications, then we have to get approval from Toyota managers. But we have a dictatorship over stuff like brochures,' said Scott Grant, the liaison between Genesis and the mainline Toyota departments.
Has Grant run into opposition from Toyota managers protecting their turf? A little.
'I hear it in the coffee room or the bathroom and can take action before it blows up. But Toyota really needs to have buy-in from the ground up. We can't try to make Genesis happen just because the boss said it has to. And management has been smart in deliberately not being dictatorial with our cause,' Grant said.
THE PITCH TO DEALERS
Also important is getting dealers to buy in to the plan. Already, several Genesis team members have barnstormed the country, talking to the national dealer council and to regional dealer groups, indoctrinating them into selling to this much-different customer. Toyota is even mulling creating a separate dealer advisory board to work solely on Genesis issues.
'Everything is subjective. Everyone has their own idea of what the youth market is. We need to make sure we're all on the same song sheet,' Del Rosso said.
At the same time, Toyota's brass envisions the second stage of the Genesis project: Where it goes from here.
'Should Genesis be product-specific with influence from the beginning on a few specific products, or should it be strategic with influence over all parts of Toyota?' Grant asked.
But what it all comes down to is whether the Genesis plans succeed.
Jim Hall, industry analyst with AutoPacific Inc., a consulting firm in Southfield, Mich., said Toyota needs to be careful about how much power Genesis gets in making things different from traditional Toyota products.
'Every generation thinks it is different, but Generation X and the baby boom are more similar than they would like to think. Genesis will be doing a lot of talking about how different they are, but when Echo comes out, Toyota will still do a traditional TV commercial and sell it through dealers. If they were really serious about the youth market, they'd sell Echo and Celica only on the Internet,' Hall said.
Hall added a rather dark premonition: 'If all these kids are so distrustful of big corporations, can a monolith like Toyota ever really fit in with them?'
Del Rosso carries the same lurking question when he leaves work every night: 'Ask my fiancee how I sleep.'