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Toyota pushes the reset button Add to ...

It’s been a tough couple of years for Toyota globally and Toyota Canada specifically, and now the auto maker would very much like to turn the page with the launch of the 2012 Camry mid-size sedan.

The face of Toyota in Canada, managing director Stephen Beatty, says that with the arrival of the 2012 Camry, nine years running the best-selling car in North America, the company is essentially pushing the reset button.

“Yes, and remember [in February] NASA and the National Highway Traffic Safety Administration found no electronic causes for unintended acceleration,” he says at the media introduction in Canada of the sedan, which has also been Canada’s best-selling intermediate for some 13 years running, though there won’t be a 14th this year.

Toyota, to be completely honest, needs to re-earn the trust of Canadian and American buyers. As everyone knows, it takes years for a car company to become almost automatically trusted, and it can take a very short while to fall out of favour.

“We earned that position (of trust) over so many years,” Yoshi Inaba recently told Automotive News. The head of U.S. operations added, “You have to keep doing the same thing over and over again and proving it. The third-party research and accolades are working for us now. But just like we’ve been doing for 20 to 30 years, it’s a slow process.”

Beatty says Toyota has been reinventing itself for two years under CEO Akio Toyoda, the family scion who is known for his passion for speed on the racetrack, which Beatty adds is translating into a renewed passion for the product in Toyota dealer showrooms. Part of the remade Toyota includes more local control over quality and product development.

“I’m spending a lot of time in glamorous places like Cincinnati,” laughs Beatty, referring to where Toyota has its North American manufacturing headquarters.

Manufacturing, of course, is a critical part of the Toyota story: Toyota has two large assembly plants in Canada, one in Cambridge, Ont., which builds the Corolla compact and Lexus SUV, and one in Woodstock, Ont., which produces the RAV4 SUV.

The immediate challenge for Toyota in Canada is to turn around flagging sales. Through September, Toyota brand sales were down 12.3 per cent, while sales of Toyota’s Lexus luxury brand were off 11.3 per cent. In the last year, Toyota has lost 1.4 per cent of market share for the Toyota brand, while Lexus has bled off one-tenth of a point. For a company accustomed to steady and uninterrupted growth, this reversal of fortune is unprecedented.

So, too, was the March earthquake and tsunami in Japan which devastated Toyota’s supply chain and a large portion of its manufacturing, too. Supplies of key models such as the Corolla were dramatically hampered by the fallout from the natural disasters. Production now is nearly back to normal.

“We can now get back to selling cars,” says Beatty.

And reinventing how models sold in North America are developed for North American buyers. Beatty says the company has been looking at every process and procedure in an effort to nail features, designs and performance to suit buyers in Canada and the United States. Much of what Toyota has been doing stems from suggestions made by the advisory panel that investigated Toyota’s unintended acceleration crisis.

Beatty says Akio Toyoda was already hard at work changing the company’s culture, long before the panel offered its insights. Toyota years ago started regionalizing its operations, a process accelerated under the new CEO. Increasingly, the regions are enjoying more decision-making power, in stark contrast to the highly centralized organization which had been Toyota for decades.

Over time, the design, development, cost planning, supplier sourcing and production of models intended for North America will be done in North America. The aim is to make North America 100 per cent autonomous.

If this effort is successful, new and updated models will come to market quicker and better focused on what on what consumers want here in Canada and even more so in the United States.

So vehicles such as the Sienna minivan and the Venza wagon will be under the sole purview of the North American team. The Camry, which is assembled in Georgetown, Ky., is another model for which North America will hold sway.

In all this it’s worth remembering that Toyota is starting from a position of strength, despite two years of flagging sales. In the latest long-term J.D. Power and Associates Vehicle Dependability Study, the Lexus brand finished second overall, with the Toyota brand in fifth place and ahead of brands such as Acura, Mercedes-Benz, Cadillac, Hyundai, Honda, Ford, Infiniti, Audi, BMW and Volkswagen.

In individual segments, these Toyota, Lexus and Scion models finished first in their segments for dependability: Prius (compact cars), Scion xB (multi-purpose), Tundra (large pickups), Tacoma (compact pickups), Sienna (minivans), 4Runner (mid-size crossovers/SUVs) and Lexus RX (mid-size premium crossovers/SUVs). No other car company comes close to matching that performance.

In addition, however, these models were runners-up in the study that looks at owner-reported problems in three-year-old vehicles: Toyota’s Yaris (subcompact), Matrix (compact), Lexus ES350 (mid-size premium sedan), Lexus GS (premium sedan), RAV4 (compact SUV/crossover), Lexus GS470 (large premium crossover/SUV) and Sequoia (large crossover/SUV).

Toyota may have been wounded by events over the last two years, but the company’s resourcefulness and attention to detail are not to be underestimated. So, too, is Toyota’s awareness of what the competition is doing, particularly South Korean auto maker Hyundai and its Kia brand, along with the reengineered car companies from Detroit. In particular, the Koreans have Toyota’s eye.

“From now on, the challenge starts for them,” said Inaba of the Koreans. “Maybe their exchange rate is not going to be as favourable as today. There is a sign of it. And product-wise, once they think they’ve reached Toyota, what’s next?

“And they have much less resources. They will have this inherent issue they face. They are very impressive, but at the same time, they will have issues.”

No doubt that’s true, but few expected to see Toyota having issues of its own these last few years. Beatty and others in the company are happy to push the reset button.

Follow on Twitter: @catocarguy

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