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Toyota not only predicts a good year for itself but sees the auto industry on the cusp of a major turnaround, according to an Automotive News report.
Jim Lentz, executive vice president of Toyota Motor Sales U.S.A. Inc., said Tuesday (Jan. 16) during the Automotive News World Congress that 2007 is going to be a “setup year” in which the industry will take time to reflect, reorganize and rededicate itself to customers.
Lentz called 2007 “the calm before the storm of enormous new growth.”
Addressing the Detroit 3, Lentz said that Ford Motor Co., General Motors Corp. and the Chrysler group are taking “bold steps to restructure and redeploy resources around the world, and there are signs those measures are working.”
“It will take some time,” Lentz said, adding that Toyota firmly believes the Detroit 3 will bounce back and be successful.
“We see the potential for a run-up in sales each year as we approach 2010, leading to a major turnaround for the auto industry early in the next decade,” Lentz said.
Specifically, he said, Toyota thinks it is possible for industry sales to grow by as much as 100,000 vehicles a year, eventually reaching 18 million in the next decade. In 2006, automakers sold 16.6 million vehicles in the United States.
Fueling Toyota’s optimism is an incredible population boom, sound economic fundamentals and great products, he said.
About 2011, the automotive industry will be serving five generations of customers, the newest being “Gen Z.”
“It’s hard to believe, but the oldest members of Gen Z are now 12 years old, just four years away from driving themselves,” he said. Gen Z already is 48 million strong, a third larger than the population of California, Lentz said.
Lentz identified several trends that will help fuel this predicted turnaround.
A “new urbanism,” an influx of mostly young professionals to major cities, will create a need for smaller, more efficient vehicles – minicars, compact SUVs and compact luxury vehicles, Lentz said.
Another emerging trend is buyers who are living healthier lives and are more conscious of the environment.
This means that Toyota and other automakers must create and market products that meet both green and conventional product needs, Lentz said.
“Hybrids certainly fit that bill but so do clean diesels, ethanol flex-fuel products and eventually fuel cells,” he said.
He concluded by recommending that the industry listen to customers.
“The more we listen, the more we’ll learn about their needs, wants and desires for tomorrow,” Lentz said. “Then we can design and build vehicles to meet those needs.”