Toyota Exec Bill Fay Explains Automaker’s Truck Strategy

December 23, 2019 by Jerry Hirsch, @Jerryhirsch

Toyota built its reputation in the U.S. as a seller of well-thought-out and reliable passenger sedans like the Camry and the Corolla. But now the automaker is looking more like a truck company.

It sold almost 250,000 Tacoma trucks last year. The Tacoma was the nation’s top-selling midsize pickup. Toyota sold about the same amount of Highlander SUVs. The small RAV4 crossover is the best-selling vehicle that isn’t a pickup.

Trucks.com caught up with Bill Fay, senior vice president of automotive operations at Toyota North America, and talked about the automaker’s transition and its strategy. Here is an edited version of that conversation.

What’s the outlook next year for U.S. auto sales?

We are optimistic for a good, strong year. Our initial (industry U.S. sales) look is probably in the mid-16 million range. That is down some from the 17 million where we expect sales to finish this year. But still, there are a whole lot more tailwinds behind us than headwinds. It’s going to be a healthy year for all of us.

Light trucks – pickups, SUVs and crossovers – are now 70 percent of the market. Do you see that rising even more?

You see it starting to level a bit, but we think that it will continue to maybe somewhere in the mid-70 percent range, with the remaining 25 percent passenger cars. But then it will probably level out from there. So maybe there will be a little bit more shift from passenger car into SUVs  and light trucks. But I think the majority of that outflow has already happened.

You’re introducing hybrids for every vehicle. Where do you think your hybrid sales volume is going in the coming year? 

We are working towards 25 percent of our mix by 2025 being hybrids or plug-in hybrids. The company has gone on record to say that we will have an electrified option available on everything we make by then. The 2020 Highlander is a great example of a new 2.5-liter engine and 36 mpg midsized SUV type of fuel efficiency. It provides a great alternative for somebody who is very particular about the fuel efficiency that they get in a vehicle like this. Over the next several years we are not only going to roll out these electrified options in each of the vehicles that we have, but also we’ll have some dedicated hybrids that we’re going to do. There will be one of the things that we talk about down the road that will help us reach that 25 percent penetration level.

Are we talking electrified pickup trucks also? 

We’re not saying anything about that yet. We’ve said that we’re going to have an electrified option of everything we sell. So the details on pickup trucks are still to come.

You have gone to larger touch screens in the new Highlander. Will we see that in the new pickup trucks?

We are busy trying to get consumer feedback on what they like in our products and what they would like to see us change. They like that the interior of the Highlander is updated and upscale. The way that the dash is laid out is a lot more comfortable for the driver to access all the information that’s up there. We are going to continue to get consumer feedback and continue to look to make those improvements and put them in other products. Certainly bigger screens are something consumers are asking for now. But you have to balance price value with the cost some of those upgrades and make sure that you’re putting them in the vehicles where you can still offer some value.

Where do you think the hydrogen fuel cell roll out is headed in the U.S.?  

It’s going to be gradual like the battery electric vehicle roll out is. That’s because like we need with charging stations, we have to get a hydrogen infrastructure in place. That’s probably happened a little bit slower than we anticipated and not only in the stations getting built but also in the reliability of the stations. There are 39 or so stations that are up and running in California, and there will be more than 50 by the end of next year. We are looking to expand into the Northeast. We’re very optimistic that the success of fuel cells will continue across the U.S. But it will be gradual, and it will be tethered to the ability to have the infrastructure come with it.

Do you see an application to larger vehicles like the RAV4 or the Highlander?

Yes. It’s very scalable. The second-generation Mirai (Toyota’s fuel cell passenger car) is now a rear-drive bigger car. But we’re still going to be able to improve the range 30 percent to around 400 miles. And you’ve got the other side of that. We are now in a pilot test with these bigger tractor-trailers coming in and out of the Port of Long Beach. The nice thing about a fuel cell is how it is scalable. We are going to be able to do some things with that in bigger applications that we’re pretty excited about.

Jerry Hirsch November 1, 2019
Land Cruiser cemented Toyota’s U.S. reputation for vehicle reliability and automotive dependability.

One Response

  1. Al D

    If Toyota does to its trucks what it did to the RAV4 Prime – make them considerably superior to the conventional models – it could generate a lot of interest. A plug-in hybrid truck that goes much faster than a conventional truck, handles better, has more range, gets almost double the gas mileage, and can plug in to run mostly in electric mode around town should sell well. It will also qualify for the federal tax credit if the RAV4 Prime doesn’t use it all up.

    Reply

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