BBC News

Toyota targets hybrid growth

By Jorn Madslien
Business reporter, BBC News, Geneva motor show

image captionToyota is extending its range of petrol-electric hybrid models in an effort to bolster sales, both in Europe and across the world

As Toyota Motor gets ready to present its vision for the long-term direction and management strategy for the company on Wednesday, it is clear that much of it has been worked out in response to last year's mass recall of faulty cars.

The recalls, and the way they were dealt with, were seen as a public relations disaster for Toyota, which immediately saw sales suffer.

Toyota's market share has come under fire from eager rivals.

But customer loyalty has proven to be strong, at least in Europe, according to Didier Leroi, president of Toyota Motor Europe.

"It all contributed to a fall in sales at the beginning of 2010," Mr Leroi says in an interview with BBC News.

"But we maintained the trust of Toyota and Lexus customers and that helped us recover our market share and sales volume by the second half of the year."

Steady growth

Efforts to maintain its market share and remain the largest carmaker in the world will not be part of Toyota's strategy, however.

Instead, the company will focus on the quality of its products in the hope that customers will chose them over those offered by rivals without it having to cut prices to attract them.

"We are increasing our sales step by step, country by country, but always in a profitable way," says Mr Leroi.

In Europe, the company sold 808,000 cars last year, as sales picked up during late summer and autumn.

"In the second half of 2010, we had a strong recovery of our sales at pan-European level," says Mr Leroi.

"Every single month since September, we've beaten our sales target in Europe, which shows we have strong trust from our customers."

Hybrid technology

image captionToyota has sold more than three million hybrid models since 1997

This year, Toyota expects sales to rise 10% in Europe.

"We will have unbalanced growth in Europe, with growth in the east but a 2-3% decline in the West. Overall, we expect our sales to grow 10% this year in Europe," says Mr Leroi.

The basis for such strong growth will rely heavily on petrol-electric hybrid cars.

At the Geneva motor show, Toyota is showcasing half a dozen hybrid models with more to come in the years ahead, clearly indicating that "we have strong leadership in this market", according to Mr Leroi.

"At a time when some competitors are showing off prototypes, projects or simply making promises, we have already lined up six hybrid vehicles," he says.

"Those vehicles will contribute strongly to our growth in Europe, along with further vehicles with hybrid technology that we will deliver in the future."

Globally, Toyota has already sold 3.3 million hybrid cars since 1997 when the first Prius was launched.

More hybrids

Hybrid sales are particularly strong for Lexus, Toyota's luxury marque, which sees half its customers in Europe opting for petrol-electric cars.

Only 5% of Toyota's customers in Europe do so at the moment, though Toyota wants one in five of its customers to buy hybrid vehicles by 2013, across the Toyota and Lexus brands.

Last year, almost one in 10 Toyota models sold globally were hybrids, with 690,000 of them sold compared with a total of 7.53 million vehicles in total sales.

The company currently offer 16 hybrid models globally, hoping to add a further 10 by the end of next year.

Air quality

Toyota is facing stiff competition in a global car market where more drivers want cars that emit fewer harmful gases.

Many of the rivals offer diesel models, however, which Toyota insist fall well short of its petrol-electric hybrids, such as the Prius, because they emit more nitric oxide and nitrogen dioxide - Nox for short - which damages air quality.

"Why, in Europe, are we focusing only on carbon dioxide (CO2) emissions?" Mr Leroi asks.

"Off course, CO2 is very important, but we should consider both CO2 and Nox.

"And if you do that and put all the data on the table, you will see what is good for the planet tomorrow and what is good for human health today.

Modern diesel cars have done much to reduce their Nox emissions too, however, and Mr Leroi acknowledges that they are considerably better than diesel from the past.

"But even when they say they are Nox efficient, we are better than them on CO2," he says. "And we are much better than them on Nox."