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Toyota Motor Corporation: Launching PriusThis case, set in the autumn of 1995, examines the choices confronting Hiroshi Okuda, Toyota Motor Company’s newly appointed President, with respect to the hybrid vehicle called the Prius.
OverviewAs of late 1995, Okuda’s engineers had proposed a plan to introduce the car at year-end 1998, with expected production of less than 1000 units per month for at least the first three annual cycles. They view this target as technically aggressive as they were still having significant problems with prototype hybrid vehicles and saw mass-production as an even greater challenge. Variable cost was projected to be quite a bit higher than the cost of a conventional vehicle, especially at the start of the program, and total investment costs would exceed $1 billion and could be quite a bit more. Okuda felt that this car had the potential for radically altering the image of TMC – especially if they would be first to market – and he had some concerns that other automakers were also working on hybrid vehicles.