Toyota Motor Corp. has recently introduced Corolla, the first new version of its best-selling compact van sedan which has been stricken off its lineup since 2001. Since then, the automaker has not produced said car model. However, lately, the automaker has been busy modifying Toyota Corolla parts in order to pave way for a high-performance sedan than can serve as a mighty rival to other vehicles in same category. The latest Corolla will be introduced in the United States in the year 2008 by Toyota’s president, Katsuaki Watanabe.
According to automotive analysts, Toyota is moving closer to overtaking the world’s largest automaker General Motors Corp. In its aim to move a notch higher, Toyota is releasing a thrilling new Corolla that can efficiently compete with Honda Civic and Nissan Tiida Latio. ”The Corolla will obviously put pressure on the Tiida and the Civic,” says Ashvin Chotai, London-based automotive analyst for Global Insight Inc.
“The Corolla is basically Toyota’s bread and butter. The automaker’s success is led by models such as the Corolla,” says Yoshihiro Okumura, general manager at Chiba-gin Asset Management Co. Said company controls assets amounting to about $365 million.
Toyota Corolla, which was launched in 1966, accounted for 19 percent of the automaker’s sales in the previous year. It was also reported by the automaker that the figure was increased by 8 percent to 1.39 million units in 2005. It is quite comparable with Toyota Prius hybrid which yielded a total of 175,000 sales. Nowadays, Toyota expects to sell 12,000 Corollas a month in Japan.
“Toyota’s Corolla has a major impact on its profits and volume,” says Yasuhiro Matsumoto, senior analyst at Shinsei Securities Co. “There’s no way that demand for Japanese fuel- efficient vehicles will deteriorate, especially in North America,” he further added. Matsumoto estimates that automaker’s profit margin is approximately 300,000 yen ($2,540) for the Corolla.
Toyota will sell two versions of Corolla in Japan. The first version is a sedan called Corolla Axio and the second will be a station wagon dubbed as Corolla Fielder.
In the ironic words of Kermit the Frog, “it isn’t easy being green”. The irony is noted by our present day efforts to conserve energy or in other words become “green”. The notion behind this movement is fueled by two variables: cost and the well being of our global environment. As gas prices at the pump skyrocket, the demand for better gas mileage rises. Also, as fears of global warming start to materialize, the demand of a “green” vehicles rise as well. We have seen automobile manufacturers, who produce hybrids, capitalize on this sellers market, created by the two variables above. Toyota Motor Corporation has been marketing to our fears and petrol price woes with the Prius for just about seven years now in the US. Has the existence of the Prius over the past seven years placated our fears? Many of us would like to think so, especially those of you who are Prius owners. However, the sad truth is that it falls short of the marketed claims, producing unsatisfactory results across the board.
Let us first look at gasoline consumption. The 2007 Prius receives 46 miles per gallon and wears this stat like a green badge of honor. This means that the 11.9 gallon fuel tank on the Prius only needs to be topped off about twice every four weeks (based on the national average automobiles that are driven 12,000 miles per year). Thus, the Prius consumes only $1,043.48 in gasoline per year, with a price per gallon of $4.00. How can these savings be unsavory? Would less gas equate to greater gas savings? It sure would, but let us enter a common scenario. Recent economic conditions force you to cut your costs. Your current car is a gas-guzzling Hummer H2. You decide the best route to go is trade in for a mid sized sedan. Instantly you think “Toyota” and find the 2007 Prius and the 2007 Camry your best two options. Standing on the lot, we see the sticker price and MPG. The Camry shows a base price of $18,085.00 and a total of 24 MPG. On the other side of the balance we have the Prius. With 46 MPG and a base price of $23,730.00, it is hard to tell which automobile will be the most cost efficient.
To help turn this into an effortless decision, I have constructed a schedule of cost comparison between our two prospective cars. The equation used to forecast these costs is Approximate Miles Driven per year/ MPG = Total Gallons Used. To convert this into a dollar figure, multiply Total Gallons Used by the Price of Fuel. This yields the average cost of fuel each vehicle will consume yearly. The average cost of fuel is then added to the sticker price of the vehicle. The schedule will illustrate the cost of purchasing and fueling of each car, allowing us to simply compare and contrast.
Model Prius Camry
Price $23,730 $18,085
1 24,773.48 20,085.00
2 25,816.96 22,085.00
3 26,860.43 24,085.00
4 27,903.91 26,085.00
5 28,947.39 28,085.00
6 29,990.87 30,085.00
* Using 12,000 miles driven per year and $4.00 per gallon. Both models are taken from 2007
The schedule clearly displays the Camry holding the cost advantage over the Prius for the first five years. It is not until the 6th year that exceptionally high gas mileage of the Prius starts to off set the cost. If you are cost conscious, you will most likely decide to finance the Camry for five years and look to trade it in after it is paid off. Or maybe you are environmentally conscious, and it is not the cost that motivates your decision but consumption of gasoline. The person with the “green” mindset would opt for the Prius, but are there hidden environmental infractions committed by the Prius?
The environmentalist who decides on the Prius is only thinking in terms of personal consumption, which is displayed in the schedule above. A true tree hugger would be concerned about total energy consumption, which accounts for all energy used in producing, consuming, and disposing of a product. The Prius boasts high gas mileage, but what it saves in petroleum consumption, it wastes in production. As we know, hybrids consist of an internal combustion engine and a battery powered electric motor. The battery is made from Nickel that is mined in Sudbury, Ontario and smelted a short distance from the mines. The smelting process produces large amounts of sulfur dioxide, directly causing highly concentrated acid rain to fall in the surrounding area. The acid rain has destroyed the surrounding wilderness leaving in its wake a barren waste land with no sign of life. Moreover, NASA often uses this barren area to test and train astronauts in moon buggy maneuver, since the outskirts of Sudbury, Ontario sharply resembles the landscape found on the moon.
Not only is the Prius’ manufacturing pollution one of the worst in the automotive industry, but the smelted nickel goes on a petroleum dependant journey that travels over 10,000 miles. Transported by diesel locomotive and container ship, the amount of fuel used in this stage of production seems to fade the luster Toyota Motor Corporation painted on the Prius and its performance.
Ask Toyota if it is easy being “green”. I am willing to bet their answer would be similar to our proverbial green profits’ ironic statement above. It seems we can not overcome barriers of energy consumption; we restrict energy consumption in one area and double consumption in other areas, allowing companies like Toyota, to hide behind their green badge of marketability gold. Prius brightly displays this badge, but now we find it is just a façade erected by the marketing department, with one objective: to influence public perception before they have a chance to hear or read an article like this.
Volkswagen AG, Europe’s largest automaker and the biggest overseas car maker in China has started selling Magotan sedans in the country and in the process challenging Toyota Motor Corp.’s Camry which is equipped with high quality Toyota thermostat.
The Magotan sedans are equipped with 1.8-liter or 2-liter engine and have a base price starting 192,800 yuan or $25,000 basing in an email coming from Volkswagen. On the other hand Toyota’s China-made Camry has a price that starts at 197,800 yuan more expensive than the Magotan by 5,000 yuan.
The Wolfsburg-based automaker plans to add as many as 14 new models in China by the end of 2009 in an effort to maintain its market lead. Likewise, the automaker’s Santana and Jetta sedans has claimed the top two spots in the first-half sales rankings in the country and comparing that with Camry which went on sale last year and was only able to obtain the fourth rank.
According to Tiecheng, President of FAW-Volkswagen Automotive Co. one of Volkswagen’s China ventures, “The Magotan helps to diversify FAW-Volkswagen’s product structure, allowing us to be more competitive in the market.”
Europe’s largest automaker, Volkswagen has about 19 percent of China’s car market accomplished in the first half of the year after boosting sales by a quarter to 431,369. The FAW-Volkswagen which is a venture with China FAW Group Corp. will make the Magotan which is offered as the Passat in Europe. Volkswagen also has a venture with Shanghai Automotive Co. the listed unit of SAIC Motor Corp.
In other news, Jim Press, the President of Toyota North America has made a rather bold statement saying that “eventually, everything will be a hybrid.” And aside from that he has shown his confidence in Toyota’s ability and so proud of their product line that he goes as far as saying that the ground-breaking Toyota Prius hybrid is just like Ford’s Model T.
It should be noted that the Ford Model T has often been considered as the first of its kind and a car which was made accessible to the masses. It was somewhat advance for its time and has helped in shaping the automotive industry into what it is today. Mr. Press is also saying that the Prius just like the Model T is equally revolutionary.
The everything-will-become-hybrid speech of Mr. Jim Press has aroused various reactions and of course there are those that contradict Mr. Press’ statement saying that not everything will be hybrid. But with the present trend in the auto industry maybe who knows we might all end up driving hybrids.
Japanese car manufacturers, most prominently Toyota, has almost taken over of the US market. The car manufacturer is now poised to take the place of Ford Motor Company as the country’s largest manufacturer of cars. Helped by a loyal buyer base and the positive acceptance of the American public of the Toyota Prius, the company has increased its sales not only in its Toyota division but also in its luxury division Lexus. Both divisions have just posted their sales figures for last month and both show an increase in the number of units sold.
The Toyota Motor Sales, USA, Inc. has improved its sales by 5.1 percent which better than January of last year. Last month’s sales of 175,850 units marks their best ever January sales performance.
The Toyota division posted their record breaking January sales 153,732 which translate to a 4.7 percent increase over last year’s number of units sold. The luxury division of Toyota, which is Lexus also boasts of strong numbers, is also having their best ever January with 22,118 vehicles sold which is an increase of 8 percent compared to last year.
In the passenger car segment, the company’s best-seller is the Toyota Camry with 31,462 units sold against last year’s 27,440 and this is an increase of 10.1 percent while 2,081 units of its hybrid version were sold last month. While their hybrid electric car that has set a new trend in the car industry, the Toyota Prius also reported its best January sales of 8,299 units sold – an increase of 4.1 percent over last year’s sales figures.
Sales of light trucks are also up by 1.6 percent with another record-breaking January sales figure of 67,050 units. The strong sales number is led by the compact sport utility vehicle that is the Toyota RAV 4 which shows that the majority of the public is not turning their backs on the sports utility vehicle market. The Toyota RAV 4 has compiled a sales record of 11,925 units sold which gives it its best ever January in terms of sales. Other noteworthy vehicles that racked up strong number of units sold are the Toyota Highlander and its hybrid version which posted a combined sales figure of 10,322 units for the month of January and this is a 13.3 percent improvement over last year’s number of units sold.
The luxury division of Toyota also posted strong numbers for January of this year with 13,574 units sold which is an 18.7 percent improvement over last year’s sales figures for January. The Lexus ES 350 luxury sedan has the largest number of units sold at 5,320 units, but the all-new Lexus LS 460 bested its predecessor, the LS 430 with an increase in sales of a whooping 142.5 percent.
The upward surge of Toyota in terms of sales and seems to be taking the Japan-based company to the top of the leader board in the US market following decrease in the sales figures of both General Motors and Ford Motor Company. Toyota indeed looks all poised to wrestle the second spot from Ford and closing the gap between them and General Motors at a very exceptional rate. Their acceleration towards the top is very much akin to a Toyota Camry cruising at full speed and the driver’s mind not even considering applying the brakes.
By: Anthony Fontanelle
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