Toyota recently held their annual U.S. dealership meeting in Las Vegas. At this meeting, CEO Akio Toyoda announced plans to turn Prius into a sub-brand of Toyota by the end of 2012. A sub-brand is usually a product or service brand that has its own name and visual identity to differentiate it from its parent’s brand.
Toyota used sub-branding when marketing its Scion lineup. The primary reason for sub-branding the Scion was so Toyota could reach the youth-oriented market better. Although the Scion has done well in the past, its sales have been slumping lately.
The primary purpose of sub-branding the Prius is to help Toyota with growing its “green” credibility. The company desires to become the world leader in the manufacturing of top quality, low cost, yet eco-friendly vehicles. Toyota currently has a tarnished reputation due to recalling over eight million vehicles worldwide. The recall was due to sudden-acceleration incidents, anti-lock braking failures, and slipping floor mats.
Toyota will be facing some stiff competition, especially in the U.S. market. Due to the federal fuel-energy regulations, most auto manufacturers are racing to dominate the U.S. hybrid and electric vehicle market. The popularity of the Prius has been well-established since its introduction in 1997. This gives Toyota some leverage in the U.S. hybrid market, but Toyota still has a long way to go to dominate the market.
Expanding Prius and other eco-friendly product lines
To capture more of the hybrid market, Toyota plans on expanding its lineup of hybrids, plug-ins, battery electric cars, and fuel cell vehicles. The company will be adding two more hybrid models to the Prius line by the end of 2012. One will be a plug-in model while the other one will be more like an SUV or station wagon model.
The plug-in Prius model will be made using Tesla battery technology. It’ll be capable of able to go 13 miles before the gasoline engine kicking in and will be easy to recharge. Numerous people believe the smaller of the two vehicles will be the concept called the FT-CH, which Toyota demonstrated at the Detroit auto show last January. The other new 2012 Prius hybrid model will be a sub-compact about the size of the Yaris. However, it will be smaller than the current Prius hatchback.
The larger new Prius model will be a roomy, sport-utility type vehicle. According to some of the Toyota dealers, this larger model will have 50% more interior space than the 2011 Prius sedan, and may be a 7-seater. According to the senior editor of GreenCarAdvisor.com, John O’Dell, the larger model will be Camry-sized but more wagon-like. Other people think it will be more MPV-like, perhaps similar to the Mazda5.
Toyota’s strategy
Toyota’s strategy is to try to appeal to various customers by offering a wider variety of eco-friendly vehicles. Takeshi Uchiyamada, Toyota’s executive vice president, has previously stated that the company will introduce six new gasoline-electric hybrid models worldwide by the end of 2012. The hybrids will be spread across its other brands, excluding the Scion.
Another part of the strategy includes using Tesla battery technology to build the RAV-4 electric car. Yet another part of the plan includes assisting Toyota dealers to boost their annual U.S. sales up to two million vehicles by 2013. Toyota will be purchasing additional advertisement for the Prius lineup.
Toyota also plans on improving the quality of service by making the “Toyota Care” standard to all its models. This is a 2-year free maintenance program, which helps to make the cars more affordable. Moreover, to help improve the quality of the products sold in North America, Toyota is committing to giving the U.S. plants more autonomy. Toyota intends to manufacture its hybrid vehicles in the southern United States.
References:
Freep
USA Today
Wall Street Journal
- Used Toyota Prius Hybrid
- 2010 Toyota Prius Hybrid II
- 2011 Toyota Camry Hybrid
- What Car Gets the Best Gas Mileage?
- How Does a Hybrid Car Work?
