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Toyota's Hit and Myth Marketing

There's no doubt that Toyota (TM) has become the world's most-beloved car company. Toyota is gaining market share almost everywhere it does business, and it's a wildly profitable enterprise. Lexus is now the best-selling luxury auto brand in the U.S. (see BW Online, 10/20/05, "Toyota Grows a Greener Lexus"). And when it comes to technology, the Prius hybrid-electric car has given Toyota bragging rights as a clean, green, and tech-savvy company.

But every company takes its body blows. Early this week, a environmental activist group called the Bluewater Network took aim at the mighty carmaker in an effort to challenge Toyota's reputation as green and clean -- an image the green lobby has spent the past five years building up.

The ad shows Toyota President Katsuaki Watanabe (see BW Online, 7/22/05, "The Man Driving Toyota") standing next to a wolf wearing a sheep costume. Bluewater alleges that Toyota's newest hybrids -- the Lexus RX 400h and Toyota Highlander SUVs -- don't have much better fuel economy than the gasoline-only versions of those vehicles (see BW Online, 9/20/05, "Hybrids: More Power, Less Fuel"). It also points out that Toyota, along with Detroit auto makers, is suing to stop pending legislation in California that would reduce greenhouse gas. Plus, the ad flags that Toyota has opposed tougher fuel-economy regulations in Washington.

MONSTER TRUCKS. Calling Toyota is a wolf in sheep's clothing is a bit harsh. The company is, after all, the uncontested leader in hybrid sales. And its other vehicles have long been among the more efficient on the market. Still, the Bluewater Network is on to something. Toyota's constant bleating that it's an altruistic friend of the environment is starting to sound pretty disingenuous.

This is the same company that is erecting a truck plant in San Antonio with the aim of boosting pickup sales in the U.S. market. Lexus seized the luxury sales crown mainly by selling SUVs such as the 15-mpg LX 470. In other words, Toyota is just as culpable in many ways as Ford (F), General Motors (GM), and Chrysler (DCX) when it comes to pollution and burning up gasoline. Its total fuel-economy performance is still strong, but has dropped as the company has sold more trucks.

Back in January at the Detroit Auto Show, I asked Toyota Motor Sales CEO Jim Press about his outfit's increasing reliance on truck sales for U.S. growth. He said, "We're providing solutions to allow customers to have the products they want." That's pretty similar to what Detroit execs have been saying for years. If Press wants to grow his business selling vehicles of every stripe, big and small, that's fine. But he can't have it both ways: Toyota can't rush headlong into the gas-guzzling truck market and still claim to be green.

MIXED MESSAGES. And there's something else that belies Toyota's green claims. The new Lexus RX 400h hybrid and the forthcoming Lexus GS hybrid sedan will emphasize great acceleration with pretty good fuel economy. The RX, Toyota says, will boast V-8 horsepower with the fuel economy of a smaller engine. For 20 years, Detroit auto makers have used improvements in engine technology to boost power instead of increasing fuel economy. Bluewater is worried that Toyota is now doing the same thing with hybrids.

In one sense, Bluewater is off base. Americans love horsepower, and if someone can give the people what they want in a car that gets 25 to 30 miles per gallon, that's great. It means Toyota is making a popular style of vehicle -- in this case, a peppy and luxurious SUV -- more efficient.

But Bluewater is right that Toyota isn't just doing this to be environmentally friendly. The company wants to market the RX 400h and GS hybrids as powerful cars that get fairly good mileage. With today's gas prices, that's smart -- but it's not green.

FROM GREEN TO GOLD. A Toyota spokesperson told me that the company doesn't push a green image. Really? One print ad that will soon hit newsstands boasts that the company's hybrid system is 80% cleaner than others, rounding it out with the message, "Until we find another planet Earth, that seems like a pretty good solution." Sounds green to me.

Hey, don't get me wrong. While GM execs pooh-poohed hybrids like the Prius as money losers that only a few tree huggers would want, Toyota is on pace to sell more than 100,000 of them a year. That's because its marketers found a big cadre of buyers who are just as jazzed about a car that gets 45 mpg as Corvette buyers are about 400 horsepower.

So if Toyota brass want to brag that they make smart business decisions and can successfully sell the latest technology, they'll find no argument here. But fostering an image that Toyota is a green company out of the kindness of their hearts? That's just smoke.


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