Toyota (TM): 100 MPG By 2015, Or Bust

Toyota’s (TM) new management means to use every tool at its disposal to bring down the amount of fuel its cars need to operate as the price of oil continues to rise. Katsuaki Watanabe, who is leaving as the firm’s president, told that annual shareholder’s meeting that the world’s largest car company would take out even more expense than the 800 billion yen it announced earlier this year.

Toyota  also announced that it would launch a new fuel cell car by 2015. The car would have to get substantially more than 40 MPG, which many hybrid and diesel models get now, to be a success. According to The Wall Street Journal, “Fuel-cell vehicles are seen as among the most promising green cars, as they run on hydrogen and emit only water, but the high costs of the technology are a major issue for car makers.”

So, Toyota has a secret and it does not seem in a hurry to tell it. Either the company plans to sharply reduce the cost the consumer will pay for hybrids or its plans to push the envelop on fuel-efficiency. VW has a diesel that has delivered 58-MPG, so, if Toyota wants to launch an impressive product six years from now, that number would have to be closer to 100 MPG. VW will certainly have improved on its own technology over that period. Toyota’s leapfrog maneuver will need to be a big one.

Toyota has lost a lot of its momentum, most of which it gained from 2002 to 2007 as became the No.1 car company worldwide. Now it is posting losses like most of the industry and needs some distinct product innovations to bring back recession-weary consumers. A car that gets 100 MPG would do that.

Douglas A. McIntyre