The makeover of Toyota, the largest car group, under chief executive Akio Toyoda is facing one of its biggest tests with the launch of the new Prius.
Analysts warn that the remodelling of the hybrid car - which has been a pioneer in fuel-saving technology since its 1997 debut - could not have had worse timing. With Brent crude breaching the $40-a-barrel mark for the first time since February 2009, fuel-hungry sports utility vehicles are back in vogue, softening consumer demand for fuel-efficient smaller cars.
"Toyota wants to make hybrids, not just the de facto standard in Japan but also overseas," said Masahiro Akita, car analyst at Credit Suisse.
“There is concern about whether the new Prius will sell well outside Japan against the headwind of lower oil prices.”
Executives boast that the fourth-generation Prius, which went on sale in Japan yesterday, is a testimony to Mr Toyoda’s attempt to build funkier, fun-to-drive cars by fundamentally reviewing the way the company manufactures and designs its vehicles .
Mitsuhisa Kato, Toyota executive vice-president, said: “This Prius is the beginning of an ongoing, long challenge to develop ever better cars.”
The Japanese carmaker said it was aiming for annual global sales of up to 350,000 Prius vehicles, of which roughly 144,000 units are expected to be sold in Japan.
The company has already received pre-orders for about 60,000 vehicles, with consumers likely to wait up to five months for the cars to arrive.
While scepticism was also strong when the Prius first hit the market in 1997, the carmaker has since sold more than 8m units of gasoline-electric hybrids.
The segment, including plug-in hybrids, accounted for about 14 per cent of its car and truck sales last year, and nearly half of its sales at home.
But consumers now have a wider option of advanced, eco-friendly cars including electric vehicles by Tesla and Nissan as well as a fuel-cell vehicle launched by Toyota.
Diesel vehicles were also popular before the emissions scandal at Volkswagen.
The new Prius achieves mileage of 40.8 kilometres per litre under Japanese tests, a 20 per cent improvement on the current model.
However, Mr Kato says that fuel-saving technology is no longer the only selling point for the Prius.
The hybrid is the first model to adopt revamped vehicle platforms and components, which are expected to cover half of Toyota’s vehicles by 2020.
Analysts say the project, called Toyota New Global Architecture, is an attempt to redefine the spine of its production system to meet global trends for quality, cheaper cars.
Toyota claims that the system will cut development costs by 20 per cent through a sharing of parts and platforms across continents.
For the new Prius body, engineers used sturdy but lighter steel sheets for the body and lowered the centre of gravity for more precise and nimble steering, while engine noise and the door’s closing sound are reduced.
In addition to the body structure, Mr Toyoda has prodded engineers to break away from dull designs, resulting in a sleeker and sportier Prius.
“I think we’ve built a car that will be accepted worldwide,” Mr Kato said.
But even Mr Kato appears to be less confident on whether the emotional appeal of the redesigned Prius will override the economics of buying a hybrid car during an era of cheap oil prices.
“We are confident, but at the same time we are worried, since consumers are different [OVERSEAS],” he said.
The Prius, wich has a starting price of €31,450 in Ireland should go on sale early in 2016.
- (Copyright The Financial Times Limited 2015)