DETROIT — Falling car sales are likely to stabilize at their current level of about 30 percent of the overall market, while automakers will struggle to find buyers for all the electric vehicles they plan to introduce over the next three years, says Jim Lentz, CEO of Toyota Motor North America.
Lentz also told the 2019 Automotive News World Congress here that the company's 2017 move from California to Texas went about as well as possible. His advice to other companies plotting cross-country moves: "Take time, and make sure you take care of your people."
Lentz said Toyota retained 72 percent of its employees in the cross-country move, when most companies average a 75 percent loss of talent during similar periods.
In a conversation with Automotive News Publisher Jason Stein, Lentz said stable fuel prices and improved fuel economy from utility vehicles mean consumers no longer pay much of a fuel economy penalty for choosing a crossover. However, sedans and other cars will continue to have a significant share of the market.
"I think 30 percent [cars] is probably where we're going to be for the foreseeable future," Lentz explained. "Even if you look at fuel prices — last week, I bought gas for my car for $1.69 a gallon in Texas — if fuel prices go up, if you look at a Camry versus a RAV4, the fuel economy between those vehicles is about the same."
Lentz said if fuel prices do rise, it's clear that consumers "will just buy more fuel-efficient SUVs and not necessarily go back to sedans. But with that said, I don't think we're going to see a drop in the percentage of sedans at the rate that it's been. I think we're pretty close to where that's going to be."
No demand, yet
Speaking of a coming wave of battery-electric vehicles, Lentz said that consumers have yet to show great demand for electric vehicles. Toyota does not sell a battery-electric vehicle in the U.S., and has placed most of its bets on fuel cell technology, including limited sales of the Murai sedan. However, sales of the hydrogen-powered Murai have been limited because of a basic lack of refueling infrastructure, outside a few dozen stations in California and one in Hawaii.
"I worry a little bit that we are overstimulated in our belief that EVs are going to take over the world quickly," Lentz said, pointing out that only 16 of the 94 alternative-fuel nameplates in the market today sold more than 2,000 units per month in 2018. And in terms of the 16 battery-electric vehicles offered today, the Tesla Model 3 was the only one to cross that threshold. Meanwhile, global automakers have scores of battery-electric vehicles late in development.
"The question is, how are we all going to afford to get share, because right now, cost and range anxiety is still an issue with customers," Lentz said, "and gas at $1.69 a gallon isn't going to make things easier for us."