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Ask consumers why Toyota may soon be the largest auto maker in the world, and they will point to the Camry. Or the Prius. Or the RAV4. (It's the cars, stupid.) Ask manufacturing geeks, and they'll tell you it's about just-in-time production and a maniacal focus on constant improvement. (It's the engineering, dummy.)
But there's another drama behind the car maker's tire-squealing momentum. It's a story that might be called: How Toyota is winning the hearts and minds of America.
With a deft combination of marketing, public relations and lobbying, Toyota Motor (TM, news, msgs) has done a remarkable job over the past 20 years of selling itself as an American company. That drives the Big Three to distraction. Here's Chrysler communications chief Jason Vinesz: "The thing I resent is Toyota wrapping themselves in the American flag," he says. "We still employ more people and contribute more to the economy."
- Video: Toyota on top
Who cares what Detroit thinks? Well, strange as it sounds, Toyota does. Its executives may privately relish victory at the expense of General Motors (GM, news, msgs), Ford Motor (F, news, msgs) and DaimlerChrysler (DCX, news, msgs), but here's the truth: Toyota is afraid to be No. 1 -- or at least what that implies. And not just because one of its slogans is "Run scared." It's because the extra scrutiny could undo much of the hard work of the past 20 years.
"We constantly need to think about the potential backlash against us," Toyota CEO Katsuaki Watanabe said in an interview. "It's very important for our company and products to earn citizenship in the U.S. We need to make sure we are accepted."
A 17.4% retail market share should signal acceptance. But Toyota is not admired from sea to shining sea. Yes, the company has won the coasts. But one-third of car buyers are biased against imports, says Harris Interactive.
And most of those Ford- and Chevy-loving holdouts live in the Midwest and Texas. In those precincts, Toyota still has a lot of persuading to do. Which explains why it launched the full-size Tundra pickup -- a red state vehicle from its aggressive hood to its brawny haunches -- and is building it in San Antonio.
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Amping up the charm
Here's the thing: The Tundra amounts to an assault on the last redoubt of Big Three profits. But Toyota doesn't want to be seen as the one that pushes Detroit over the edge. So to prevent a backlash, the company is amping up the charm -- launching literacy programs in San Antonio, vowing to share technology with Ford, and pouring money into lobbying, more than doubling since 2002 the amount it spends each year, to $5.1 million.Says Jim San Fillippo, an analyst with Automotive Marketing Consultants: "Toyota is the best at going native."
In the early 1980s, Toyota sold nine models and had 6% of the market. But the company was winning converts with fuel-efficient, reasonably priced cars like the Corolla. Detroit, meanwhile, was beginning to endure the agonies that continue to this day. Japan was ascendant, and xenophobia was in full cry.
Toyota scion Shoichiro Toyoda needed to boost sales in the United States but feared angering consumers and Washington pols. So in 1984, he hired a Ford public relations guy named James Olson. Toyoda summoned Olson to Nagoya and exhorted him to undertake genchi genbutsu ("go and see").
What Olson found wasn't terribly surprising: With just one U.S. factory –- and a joint venture with GM, at that -- Toyota was widely viewed as a foreign interloper.
At Olson's urging, the company began playing to local sentiment. In 1986, Toyota announced a new plant in Kentucky. In the same year, it rehired many of the 3,000 laid-off GM workers to staff the joint-venture plant in Fremont, Calif. George Nano ran the United Auto Workers local at the time, and recalls company executives and plant bosses eating in the same cafeteria as the rank and file. That never happened when GM was running the factory.
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