Toyota maintains grip as green leader

2011-01-24

Toyota Motor Corp. has flaunted the green-car crown ever since the first Prius rolled off assembly lines in 1997, but rivals, armed with an electric quiver, are finally mounting a legitimate challenge. Or are they? The crown, without question, is still Toyota's to lose, especially considering the iffy prospects of a significant demand spike in battery-powered vehicles. But the competition is giving it a shot. "Toyota is definitely losing some of its image as the tech leader thanks to cars like the Nissan Leaf and Chevy Volt," said Mike Omotoso, senior manager of global powertrain at J.D. Power and Associates. "Car buyers like to be associated with the high-tech brand like, say, Audi. It just helps bring people to the showroom," he said. General Motors Co. is milking its plug-in electric hybrid Volt for every bit of cachet it can bring to the mothership, while Nissan plans to get a lot of mileage out of its all-electric Leaf. Then there's Ford Motor Co., led by executive chairman and long-time green tech advocate Bill Ford Jr. The automaker announced its first plug-in electric production vehicle at the Detroit show just days after showing off its upcoming battery-powered sedan in Las Vegas. But electric cars, while stealing plenty of headlines, will remain nothing more than a niche for the foreseeable future. Lack of punch, loftier price tags and "range anxiety" will combine to keep a lid on sales. In fact, J.D. Power projects that electric cars won't crack 1 percent of the overall market before 2020. Meanwhile, and this plays well into Toyota's hand, hybrids are expected to continue their climb. Hybrids comprised just 2.4 percent of the overall pie in 2010, and that number is seen reaching almost 10 percent by the end of the decade. That's not all Toyota, of course. In total, 13 different car brands have followed Toyota into the hybrid market, selling 30 different models. Despite all the new entrants in the hybrid market and a crippling recall fiasco, Toyota still sells about half of every hybrid vehicle on the road. The strategy of building out the Prius family will only help secure that lead. A total of 11 new hybrids, including a plug-in electric, will be added to Toyota's burgeoning global lineup of Prius vehicles in the next 23 months, the company announced at the Detroit auto show, which closes this weekend. Bob Carter, head of the Toyota brand in the U.S., said sales of the Prius will benefit gas prices poised to move as high as $4 a gallon this year, but not to the degree that they used to. And that's not necessarily a bad thing. "Prius is mainstream now. You don't sell 16,000 in December and outsell several iconic brands without being mainstream," he said. "It's a midsize car that has gone past high technology and mpg. It's a great, high-quality car, and hey, if I can get 50 miles per gallon, why not?" It goes beyond just the sales figures and the profits. Toyota holds a big lead in a recent Consumer Reports survey asking car owners to name the most environmentally favorite car maker, though, as Omotoso pointed out, the company has slipped slightly in the past year. SHAWN LANGLOIS MarketWatch