When Jim Lentz announced in 2014 that Toyota would establish an all-new North American headquarters in Plano, Texas, the Toyota Motor North America CEO said the bold move would set the stage for the next generation of the company’s leaders, team members and customers.
Talk about history repeating itself.
That’s because in 1957, Lentz’s predecessors made a similarly bold move — leaving their comfort zone of success in Japan in hopes of establishing a foothold in the vast but foreign U.S. marketplace. Then, as now, there was great risk. But it was outweighed by the promise of far greater reward.
No one can say for certain where the current journey to One Toyota will lead. But, as Toyota celebrates its 60th
year of doing business in the U.S., we can
look back at the twists and turns that led us to this point. Henry Ford once said that “history is bunk.” For Toyota, though, there’s every reason to believe that the past will be the prologue to an even brighter future.
Humble Beginnings (1957-1969)
Toyota’s American adventure got off to a decidedly rocky start. At the time, full-sized gas guzzlers heavily outnumbered small cars. So, in retrospect, perhaps it shouldn’t have come as a surprise that Toyota’s initial entry — the Toyopet Crown — failed to find its footing.
“This thing is underpowered, overpriced and it won’t sell. And the name’s all wrong,” said James McGraw, the sales administrator at Toyota’s first U.S. facility, a converted Rambler dealership in Hollywood, California.
McGraw was right. Americans purchased just 287 of them in 1958. And while sales tripled a year later, Toyota stopped selling the Toyopet in 1960 until it could come up with a vehicle suited to this market.
Meanwhile, the Land Cruiser, as well as the Stout pickup, kept operations afloat and helped promote a gradual build-up of a U.S. dealer network. Johnstons Toyota in Maybrook, New York, was a typical example. It operated for several years as little more than an adjunct to a Texaco station before the gas pumps were replaced by a two-car showroom.
Then came 1965 and the debut of the Corona. Its 90-horsepower engine outgunned the Volkswagen Beetle, the import leader at the time. A heater and radio were standard equipment and air conditioning was an option, a rarity for an entry-level car. Toyota promoted it with its first U.S. television commercials and print ads in such magazines as Life
Americans loved it. By the close of the decade, Toyota had 792 dealers selling more than 130,000 vehicles annually.
And Detroit took notice. In 1969, Ford introduced the Maverick, the domestics’ first significant response to the imports’ domination of the emerging small-car market.
Gaining Traction (1970-1988)
Once Toyota got rolling, it soon got up to full speed. In 1972, it sold its 1 millionth vehicle in the U.S. Just four years after that, it passed the 2 million milestone. And it took only two more years to reach 3 million in cumulative sales.
In part, the growth was fueled by the 1973 oil crisis, leading to gasoline shortages and price increases. But it took a second oil shock, in 1979, to shift small efficient cars from novelty to necessity.
So Toyota had the right product at the right time. Increasingly, it also had the right message. Classic advertising campaigns in the 1970s, such as “You asked for it, you got it” and “Oh, what a feeling!” connected with a car-buying public that wasn’t accustomed to an automaker that actually paid close attention to their needs and wants.
Meanwhile, Toyota began to lay the groundwork for local production. In 1983, it entered into a joint agreement with General Motors to build Corollas in California. In 1986, it broke ground on its first stand-alone U.S. manufacturing plant to build Camrys in Kentucky, investing $800 million and creating 3,000 jobs. The first unit rolled off the line in 1988.
Robust Growth (1989-2007)
Toyota really kicked it into gear over the next two decades, leading off with the debut of the Lexus brand and the LS 400 and ES 250 in 1989. It took Lexus just three years to become the No. luxury import brand.
Toyota, though, remained the core of the business. In 1996, it pioneered what would become a crossover craze with the US introduction of the original RAV4. It invested $2 billion to build new plants in Indiana and West Virginia. In 1997, Camry became the best-selling car in America — a title it still holds to this day. And in 2003, it launched the Scion brand to attract younger buyers, experimenting with pure pricing and personalization.
By 2006, annual sales topped 2.5 million. Lexus outpaced every luxury nameplate, import and domestic. So, Toyota set its sights on the 3 million mark, expanding its product line with such models as the ground-breaking Prius, Sequoia, Highlander, Yaris and, in 2007, a full-size Tundra pickup assembled at a $1 billion plant in San Antonio.
And motorsports went all in on NASCAR, a high-profile sign that Toyota had arrived as a fully fledged U.S. car company.
New Challenges (2008-2013)
Just when it seemed the sky was the limit, Toyota, along with virtually every other automaker, suffered a sales decline in 2008 due to a severe economic downturn. Still, Toyota outsold Chevrolet that year to become the No. 1 automotive brand in the U.S. And it passed GM in global sales to become the world’s largest automaker.
Then, in 2010, Toyota was hit with a series of recalls related to reports of sudden unintended acceleration. That led to Congressional hearings and federal fines. While weathering that storm, an earthquake and subsequent tsunami in Japan in 2011 destroyed four of Toyota’s plants. Flooding in Thailand suspended operations at two more. Yet, by year’s end, production returned to near-normal levels, a testament to the company’s resiliency.
New TMNA headquarters
One Toyota (2014-Present)
Toyota emerged from those trying times determined to not only regain its sales momentum but to reposition itself as a leader in global mobility. Guided by Akio Toyoda, the grandson of the company’s founder, the company pushed ahead with the unification of its North American operations in Plano, the introduction of the Mirai hydrogen fuel cell vehicle, the formation of the Toyota Research Institute — with its focus on artificial intelligence and robotics — and, to leverage breakthroughs in big data, the creation of Toyota Connected.
Meanwhile, Toyota Motor Manufacturing, Kentucky (TMMK), now the largest Toyota plant in the world, produced its 10 millionth vehicle. And nine of Toyota’s North American manufacturing facilities exported nine different models to some 32 countries worldwide. Sixty years after offloading its first shipment of Toyopet Crowns at a California port, Toyota had come full circle.
The company’s economic impact on this country is considerable. Just consider some of these cumulative numbers to date:
- $23.4 billion in direct investment
- 10 manufacturing and assembly facilities
- Nearly 1,500 Toyota and Lexus dealerships
- 136,000 direct, dealer and supplier jobs
- More than $921 million donated to U.S. nonprofits
Looking ahead, Toyota said it will invest an additional $10 billion in capital investments in the U.S. over the next five years.
So what awaits Toyota around the next bend in its ongoing American journey? Odds are, breakthroughs and innovations we can’t even imagine.
Fasten your seatbelts and enjoy the ride!
By Dan Miller