Forty-two years after selling its first car in America, Toyota appears poised to shatter a statistical milestone next year and claim 10 percent of the U.S. market.
Toyota and Lexus combined for 10.2 percent of U.S. light-vehicle sales in November, lifting Toyota Motor Sales U.S.A. Inc.'s share for the year to 9.2 percent. If that rate holds this month, 2000 will mark the first time Toyota Motor cracks 9 percent.
Industry analysts expect the company to top 10 percent next year as Toyota outperforms its rivals while industry sales soften.
That pattern played out in November. Toyota Motor sales rose 4.6 percent, while the U.S. industry fell 3.4 percent. Toyota's single-month share topped 10 percent one other time this year, in January, at 10.6 percent.
Jim Press, executive vice president of Toyota Motor Sales, last week downplayed Toyota's market share climb. He shrugged off this year's gains to some new products - such as the Sequoia large sport-utility.
'Those vehicles allowed us to have increased share at a time the industry was declining,' Press said. 'Only because we had new products do we show an increase.'
Despite the recent sales slump, industry sales still are up 3.9 percent this year. Toyota Motor's sales, though, have jumped 9.7 percent.
Toyota's product parade continues in 2001. In the spring, the company will begin selling the Highlander, a Toyota version of the highly successful Lexus RX 300 sport wagon. Next fall, Toyota introduces a redesigned Camry, the best-selling car in the nation.
Press said he expects Toyota's share to stabilize at about 10 percent, but he shied from making projections beyond that.
Before he took command of the company in early 1999, though, Press was less circumspect. He boldly predicted sales of 1.5 million units in 2000. And the company will pass that mark this month.
'We missed it,' he joked last week. 'We were a little bit more than that.'
Already hit it
Analysts cite several reasons why Toyota can hold 10 percent next year.
Toyota has a long history of consistent growth, even in down years.
New high-volume trucks are entering the lineup, and the U.S. market continues to swing to trucks.
Toyota and Lexus are entering several new segments not targeted by Asian automakers. The Sequoia, for example, should allow Toyota to grow without cannibalizing sales from existing sport-utilities.
North American plants are slated for production increases as new plants, such as the Sequoia plant in Princeton, Ind., ramp up.
Wes Brown, an analyst with NexTrend in Thousand Oaks, Calif., predicts Toyota will hit 10 percent exactly next year: 'I see their sales going up minimally next year but in a market that drops 1 million units,' he said. 'To be flat in that sort of market means gaining share.'
Brown expects Toyota's gains to come primarily at the expense of the Big 3.
One handicap, though, is Toyota's reliance on cars. Through November, cars represented 60.4 percent of Toyota and Lexus vehicle sales, while cars represent just 51.8 percent of the total market.
Toyota is rapidly addressing that situation, said George Peterson, president of AutoPacific consulting firm in Santa Ana, Calif.
'Toyota has quickly made itself into a truck company,' Peterson said. 'Its cars are pretty darn good, but Toyota's money has been put into the high-growth segments of the market, so they should do well. Their new stuff is pretty good and right on top of the market.'
Even if a fuel crisis hits the nation, Toyota should be able to reach 10 percent next year, said Mike Robinet, director of forecast services for CSM Worldwide in Northville, Mich.
'The only SUV that gets strongly affected by those conditions would be the Sequoia, and that is so new that it probably will still sell well,' Robinet said. 'The Highlander is another slam-dunk.
'Toyota designs are becoming more aggressive and youthful-looking. They seem not quite as willing to sit back on their heels.'
Conservative in long run
Does Toyota have anything to worry about?
Perhaps in the long term, but nothing that should keep it from reaching 10 percent next year, said Eric Noble, president of CarLab consulting firm in Santa Ana.
'I hate to be part of the chorus, but I don't see anything near-term that will keep Toyota from hitting it,' Noble said.
'Over the long term, their terminal conservatism is going to hurt them, but next year, they are in good shape.
'If Toyota is having problems next year, then something bigger has happened industrywide, and then we're all in the bread line.'
Sudden recent growth
Toyota's growth recalls the glory years of Volkswagen. Its U.S. market share peak was 5.8 percent in 1970. Five years later, Toyota passed VW for the first time and has been the nation's best-selling import nameplate ever since.
Back then, import meant imported. Now, Toyota builds nearly two-thirds of its U.S. volume in North America.
In 1975, Toyota sold 337,409 vehicles, for a 3.1 percent share of the U.S. market. Two years later, Toyota sales hit 500,000.
In 1990, with the addition of Lexus, the company reached 1 million units. The early part of the decade brought a higher emphasis on profits over sales. But from 1996 through this year, Toyota sales have grown at least 6 percent annually.
Friends in Congress
This growth also has come with a limited amount of fleet sales or customer cash incentives. Toyota fleet sales, while they occasionally spike, rarely climb into the double-digit percentage range. And although Toyota is known for its model year-end sales with aggressive financing rates, the automaker has rarely resorted to cash-back tactics.
With major manufacturing and research operations in California, Kentucky, Indiana, West Virginia and Michigan, Toyota has a long list of friends in Congress who may serve to defuse any potential trade friction.
Press, meanwhile, says he's not concerned about trade tension, even if the economy takes a downturn.
'I think some of those questions come from outside more than inside' the industry, Press said.
He was interviewed shortly after taking on a title that served as one more reminder of Toyota's deepening roots in the American automotive landscape. Press was named chairman of the industry's principal trade group, the Alliance of Automobile Manufacturers.