Tatsuhide Hoshi is the kind of young customer Toyota Motor Corp. wants. He's 29. He's hip. And he has cash. But he doesn't like a single car in Toyota's lineup enough to buy one. He believes Chevrolets have more style--old Chevrolets, that is. He drives a 1961 Corvette.
Funny thing is, Hoshi is also a Toyota designer. Only a year ago, for a Toyota employee to admit to a Corvette obsession would have seemed like treason. But Hoshi's boss recruited him from headquarters to join a team of young designers in Tokyo's trendy Sangenjaya district precisely because Hoshi doesn't like Toyotas. Hoshi has been working on the interiors of such models as the Premio and Corolla. But someday soon, he may be styling entire cars for young customers of the company brand.
Hoshi is one player in the Japanese car industry's newest high-risk game: creating daring designs that give carmakers an edge in a hypercompetitive arena. Toyota, Honda, Nissan, and others are overhauling styling procedures, hiring foreign designers, and spending big bucks to create a new image. "Japanese carmakers were pretty risk-averse before," says Noriaki Hirakata, an automotive analyst at Morgan Stanley Dean Witter in Tokyo. "Now they are trying to make their models a smash hit or a smash failure."
At first glance, it's hard to figure out why the Japanese are getting so hot and bothered. After all, bland is beautiful for them. The looks of the Honda Accord and Toyota Camry are the equivalent of a gray flannel suit. But their solid performance makes these sedans perennial contenders for the top-selling car in America, while equally bland models such as the Corolla compact are crowd-pleasers in Japan. Why tinker with success?
The short answer: Because success, even for Japan's best, can be fleeting. Auto executives already see a disturbing trend: "The traditional sedan is fading out," says Katsuhiko Kawasoe, president of Mitsubishi Motors Corp. Sales of medium-class sedans in Japan, the backbone of the market, have shrunk to 28,000 vehicles a month, down from 52,000 just four years ago. Old favorites, such as Toyota's stodgy Mark II, just aren't selling. And the Japanese recession is making it imperative to come out with breakthrough products. By the end of this year, 7 of Japan's 11 auto makers will probably be in the red, with only Toyota and Honda showing real strength.
What is happening in Japan could eventually affect Camrys and Accords in the U.S., where pickup trucks, sport-utility vehicles, and minivans have been encroaching on sedans for a decade. Chrysler, Ford, and General Motors' Cadillac are also putting a lot more emphasis on design. In January, Cadillac will unveil the Evoq, a two-seater concept car that features sharp-edged, postmodernist styling. And in Europe, the Japanese face an even bigger challenge: They will have to go head to head with Volkswagen and Fiat in the market for compact cars, a category the Europeans dominate on their home turf.
LOOK-ALIKES. So if younger, budget-conscious drivers are unwilling to plunk down money for a me-too car, the Japanese see new design as the only way out. "Styling will become the most important point for selling cars," reasons Yoshikazu Hanawa, president of Nissan Motor Co. "Before, it was important what type of engine or suspension you had. But now, people pay attention to the distinctiveness of the design." In that area, say competitors, the Japanese have a long way to go. Says Helmut Panke, a member of BMW's management board: "If you take the label away [from a Japanese car], you don't know if it's a Mitsubishi, a Toyota, or a Honda."
Ouch. That hurts. Sort of true, though. The Japanese, however, are determined to play catch-up. On one level, that means a tremendous diversification in the lineup. Just three years ago, Honda had only sedans such as the Accord and Civic. Now, it's churning out a whole range of minivans and sport-utilities, and a convertible roadster is next. Toyota, too, is spreading its wings. Think of the $16,000 Toyota RAV4, which introduced a bubbly, playful body to the sport-utility category and became a hit. And there's the $16,500 Toyota Prius, the hybrid gasoline-electric car that has such a short front hood a driver can hardly tell there's an engine there.
Carmakers will unveil an estimated 64 new models this fiscal year in Japan, more than twice as many as last year. The efforts fall into several categories. First, there's the development of a new category of "crossover" vehicles that merge the attributes of sport-utes, vans, and cars. Another move is to add nicely styled alternatives to such old standbys as the Corolla. A third tactic is to revolutionize car interiors to make maximum use out of every cubic inch. And another is to play with the look of Japan's minicars--those tiny vehicles that make up 25% of light vehicle sales there. Many are now sporting superhigh hoods that give them a funny, boxy look that appeals to young buyers.
The cross-breed vehicles offer a good view of the new approach. The idea is to build sport-utes and vans on car platforms for easier handling and then jazz up the styling. These car-truck crossovers should soon be the fastest-growing segments of the auto markets in both Japan and North America. Mutant sport-utes and minivans account for an estimated 20% of Japan's light-vehicle sales. At the top of this heap is Toyota's $24,600 Lexus RX300, known as the Harrier in Japan. It competes with Mercedes' M-Class with looks that are sporty but sleek enough to be parked in front of the best hotels. But unlike the Mercedes, the RX300 has a car chassis. The vehicle is a big hit, selling more than 37,000 in Japan since its appearance in late December. It's also leading Lexus sales in the U.S.
Even second-tier players are trying their hand at new styling. At Isuzu Motors Ltd., a team of designers, including two British members, spent five years developing a sport-ute that looks like a vehicle from Star Wars. Isuzu wanted its new $22,300 VehiCross to leave no doubt that the company could dream up radical designs. "`Boring but reliable.' That's our image. We wanted to change that," says Shiro Nakamura, general manager of Isuzu's design center. The VehiCross may be too revolutionary for Japanese, who still prefer the utilitarian Wizard sport-ute. But Isuzu hopes Californians will be more receptive when the VehiCross arrives there next year.
Japanese carmakers also are rewriting the rules for interiors. Younger Japanese buyers see their vehicles as an extension of their living room, yet they also want small vehicles to navigate Japan's narrow, crowded roads. That's a tall order. Honda Motor Co. designer Tomoko Ogawa knew that when she was ordered to make enough room for passengers to stretch out or pack their bicycles in Honda's new $10,800 Capa miniaturized minivan. "We threw out many different designs," she says. Yet with forward-sliding rear seats and a front seat that can fold down into a table, she helped produce a hit that has sold 24,000 vehicles since April.
The space revolution extends to the exterior styling in minicars and compacts, with the Japanese devising a boxy look that adds headroom and departs radically from rounded aerodynamic forms. Nissan has racked up sales with the $9,000 Cube. It has a superhigh roof for such a tiny car and sports an offbeat, cubish profile. In the same vein, designers of the $15,000 Honda S-MX, for example, envisioned a "barn" on wheels that could carry a young couple's bicycles and surfboards but that would also feel as comfortable up front as a sofa. Executive Chief Engineer Yoshio Ui and 31-year-old designer Jiro Ikeda designed a boxlike interior that could handle sports gear and seats that could turn into a bed. The S-MX's popular nickname: "love hotel on wheels." Says Ikeda: "It's just a box. But I wanted it to stand out."
RADICAL SEDANS. The car companies also want to reach out to foreign customers. At Toyota's European Design Center in Brussels, designers are styling cars that can replace Toyota's traditional rounded, sober look and compete with the broad-shouldered German design of the Volkswagen Passat, the Opel Astra, and the Audi A4. "We needed to come to Europe to learn this," says Tadao Otsuki, director of the center. A Brussels-designed concept car, the Yaris, is the inspiration for the subcompact Toyota will roll out in Europe and Japan next year. The Yaris has a stubby, snub-nosed look that has nothing in common with the Camry. If it works, the Yaris may revolutionize the look of Toyota subcompacts everywhere. Nissan is looking abroad, too. In the U.S., Nissan's 50-designer studio will have design authority over 85% of the vehicles rolled out in North America by 2001.
As Toyota, Honda, and Nissan spin out new minivans and sport-utes, the big question is whether the mainstream sedans will go radical too. While the Accord, Camry, and Nissan Altima will not start sporting way-out looks in the next year or so, they may look quite different in the next three years. "The present design of the Camry is too soft," says Toru Kimura, general manager at Toyota's design center in Nagoya.
A taste of things to come is the summer launch of Toyota's $16,300 Nadia, which it dubs the "monospace sedan." Its sharply lined doors, short overhang in front, and rounded hatchback lined with Jetson-like rear lamps give the car a futuristic look. Meanwhile, its raised roof makes it look more like a mix between a station wagon and a minivan than a sedan. So far, the Nadia is off to a so-so start, selling 2,000 units a month. But Toyota is patient: It wants to keep advertising the Nadia and build a customer base for it, to capture more of those buyers who have drifted away from the Camry and Mark II.
Meanwhile, the designers are getting stranger, too. Mazda Motor Corp.'s chief designer has colleagues study crystals, lakes, and deserts to observe "harmony in tension" and apply it to their work. Near Tokyo's Ginza, a battalion of British, Italian, Japanese, and Korean designers have analyzed everything from Honda's role in world history to the evolution of man to come up with new Honda contours. They even consulted architects and artisans on how traditional crafts, such as lacquerware, can improve Honda interiors. "We must clean our designers' minds," says Honda designer Masahito Nakano. Sounds odd. But Zen and the art of automotive design could raise car styling to new heights.