CASE INTRODUCTION: LAUNCHING THE PRIUS Hiroshi Okuda, the president of Toyota Motor Corporation, was at a cross roads in the decision-making process of Toyota’s introduction of the Prius. TMC engineers planned to launch the Prius project towards the end of 1998, but had a few concerns. The engineers of Toyota viewed their launch as overly aggressive since the Priuses hybrid powertrain technology still had technical problems and viewed mass production as a crucial issue. With the rapid development and competition in the automotive industry, Okuda believed the Prius could have a highly beneficial image for Toyota, but was worried that their competition could introduce a similar vehicle at any time. Was the scheduled launch a bit too aggressive or should the company resolve their technical issues to ensure a more feasible entry?
HOW ATTRACTIVE IS THE AUTOMOBILE INDUSTRY •During 1990-1995, oil prices rose again from 2.27 to 2.79 dollars/gallon which was the same during the 1970’s oil crisis. •The US automobile market is the largest in the world, according to exhibit 1a in the case. •US people use cars more frequently than compared to Japanese consumers and drive longer distances.•Most of the attraction in the auto industry comes from the United States, which values car efficiency more than other countries. •Gasoline prices are heavily influenced by the auto industry.
TOYOTA CONCERNS •The US market caters more towards powerful and larger vehicles because the Americans drove on wider streets and longer routes than compared to Asian & European drivers.