Speaking at the Economic Club of Chicago during the Chicago Auto Show last week, the president and COO of Toyota Motor North America, Yoshi Inaba, laid out his company's near-future plans, and made about as strong a case for hybrids as you're likely to hear this month. This is to be expected, since Toyota is going to launch 19 new or updated vehicles this year (including some from the Scion and Lexus brands) and, Inaba said, "nearly half will be hybrids or electric vehicles."
Now, it's clear that Toyota wants to increase sales of it's most popular hybrids, the Prius family models. In Chicago, Inaba made the point that increased Prius sales would benefit the U.S. by reducing the amount of gasoline we need. In fact, he said, studies show that "if everyone in the U.S. drove a Prius, we could reduce our dependence on foreign oil by 70 percent."

Inaba talked up all the Toyota brand's hybrids, including the Highlander SUV, and gave that gas-electric a U.S. connection by announcing that it will soon be built in America. To date, all the Highlander hybrids have been built in Japan, even though some non-hybrid versions are built in Princeton, IN. Following a $400-million investment in that plant, Toyota will be able to make 50,000 more Highlanders there each year, some of them hybrids. Inaga said this will directly create 400 jobs as well over 1,000 indirect "spin off" jobs.
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2012 Economic Club of Chicago - Yoshi Inaba
The Economic Club of Chicago
Feb. 8, 2012
Yoshi Inaba, President & COO, Toyota Motor North America, Inc.

Thank you very much, Charlie...and good afternoon everyone!

It is GREAT to be back in Chicago!

This is where I landed on my very first trip abroad, on my way to the Kellogg School of Management in Evanston.

To be perfectly honest with you, I had never heard of Northwestern before.

I also didn't know that Kellogg ranked among the best schools of management in the world.

I will admit that I had been lobbying hard to go to Notre Dame, because I heard they had a great golf course on campus!

As it turned out, I began my MBA classes at Kellogg in 1974...a very important year for Toyota.

It marked the beginning of Toyota's expanded globalization.

Although we had been exporting vehicles for many years, we stepped up our pace and entered many new regions.

As a result, Toyota management knew there would be a need to transfer talent overseas to support the company's international growth.

And I was among a group of people chosen to help lead those efforts.

So the time I spent in the Chicago area...and my studies at Kellogg...had a great deal to do with the direction of my life.

In fact, one of the greatest lessons I ever learned, I learned here...

And I'd like to share that lesson with you today:

Chicago's deep dish pizza is the best!

Over my forty-plus year career, I've never lost my passion for the auto business...and I must tell you...I am more excited about the industry today than EVER.


Because after several incredibly tough years, the auto industry is making a strong comeback.

That's positive news for everyone here because the auto industry is the largest manufacturing sector in the nation.

In fact, the auto industry is responsible for 8 million American jobs...and the industry expects to add 150,000 new jobs over the next 4 years, according to the Center for Automotive Research.

As auto sales improve and jobs expand, our industry will act as a POWERFUL engine that tugs the U.S. economy forward.

And if you still need convincing, take note of this.

The auto industry's current 500-BILLION-dollar payroll ranks ONLY below the Defense Department and Social Security.

So we make a tremendous positive impact on this country and...collectively...the industry will help lead America to better days ahead.

I'm equally excited about 2012 because my company will launch 19 new or updated products this year under the Toyota, Scion and Lexus brands, including the Lexus GS and Scion FR-S on display here.

And, nearly half will be hybrids or electric vehicles.

Today, I want to talk about how Toyota and the auto industry are answering environmental and energy conservation needs and delivering what customers want.

Let's start with meeting environmental and energy needs.

In the future, cars will run on a variety of fuels, including gasoline.

As long as anyone here can remember, gasoline has been THE fuel for cars and trucks in America.

And it will continue to be for the foreseeable future.

But fossil fuels are tough on the environment...and supplies are not keeping up with growing world demand as countries like China, India and Brazil develop into industrialized nations.

And...as you well know...when demand is high and supplies are low...prices soar.

We see that at the pump now and the U.S. Energy Department is warning that gas supplies may tighten even further this spring and summer...leading to even HIGHER prices.

So it's prudent to explore other alternative fuels...and that's what Toyota is doing.

Long ago, we realized that no one kind of car would meet the different needs of customers.

After all, what works well in Springfield may not be right for Shanghai, Sydney or Singapore.

So, we are taking a wide portfolio approach to cars of the future.

It all started a decade and a half ago when we introduced Prius to the United States.

We thought it was a novel idea...but at the time...gas cost less than a dollar a gallon and some people thought a car with BOTH an electric motor and gas engine was a silly idea.

Fast-forward to today, and hybrids are mainstream products.

We now offer 9 different Toyota and Lexus hybrids.

We recently sold our one millionth Prius in America.

And we have more than 3 million hybrid vehicles on the road worldwide.

So, if you see a hybrid car on the streets of Chicago today, chances are one in two that it's a Prius...and seven in ten that it's a Toyota or Lexus.

Hybrids are a great solution for high gas prices, cleaner air and U.S. energy independence.

Ours get about twice as much mileage as conventional cars and produce 66% less smog-forming emissions than the average new car on the road.

In fact, compared to the average car since the year 2000, our Prius has saved an estimated:
• 1.1 Billion gallons of gas...
• 16 million tons of CO2...
• And $2.9 Billion in fuel costs.

And...according to a recent study...if everyone in the U.S. drove a Prius, we could reduce our dependence on foreign oil by 70%!

That's why we are introducing an ENTIRE family of Prius products to meet the various needs of American consumers...including a plug-in Prius and the new Prius c coming this spring.

The Prius Plug-in has room for five, a short charging time and combines the benefits of the standard Prius with extended electric vehicle driving.

To judge the efficiency of plug-in hybrids, the EPA created a new mileage measurement called MPG-e...or miles-per-gallon equivalent.

I am happy to report that our new Prius Plug-in is expected to achieve an estimated 95 MPG-e in combined driving.

The Prius c is a small, sporty fun-to-drive hybrid with great technology...the highest city mileage...
and lowest price for any hybrid without a plug.

We will also add two battery electric vehicles to our line-up this year.

An all-electric version of our popular crossover vehicle, the RAV4, featuring the space and advantages of an SUV and a "real world" range of 100 miles.

And the Scion iQ EV, a micro car aimed at short-range urban driving and car-sharing programs.

And our environmental technology goes well beyond the development of better hybrids and electric vehicles.

We are also working on:

Fine-tuning internal combustion engines and reducing vehicle weight for more mileage and fewer emissions...
creating advanced solid-state and metal-air batteries that could double the performance of today's lithium ion cells...
using more carbon-neutral, eco-plastics made from plants to craft interior components for our vehicles...
and selling a zero-emission, hydrogen fuel cell vehicle in 2015.

So, depending on the fuels available, we will be ready to meet customer needs no matter where they live.

And we are always working to make our hybrids even better.

For instance, the Toyota NS4 plug-in hybrid concept illustrates our vision for sporty Toyota sedans around 2015...take a look...

The NS4 brings together expressive design...state-of-the-art safety...and the best of pure electric and hybrid power for maximum efficiency, fuel economy and environmental friendliness.

Look for a car like this from Toyota in the next few years.

Along with meeting the needs of the environment, the auto industry is developing cars that are much more efficient at conserving energy.

Part of this drive has to do with federal fuel economy standards agreed upon by the government and automakers.

And part of it has to do with the rising cost of gasoline.

To reach this goal, automakers are making conventional gas cars much more efficient...while at the same time...developing alternative powertrains.

I already mentioned the many options we're developing for the future, but hybrids will remain the CORE technology for Toyota's future vehicles.

That's because our hybrid systems can easily be adapted to other powertrains to further conserve energy.

For example, if you team a hybrid system with a fuel-cell, the vehicle will get better fuel economy than a standard fuel cell vehicle.

And since hybrid systems are so adaptable, it is possible to drive a great looking car that is more fuel efficient and kinder to the environment... SOONER rather than later.

Let me show you what I mean.

Take a look at the Lexus LF-LC concept coupe...

Did I mention this is a hybrid?

Imagine the fun you could have driving a car like that while doing your part to conserve energy and the environment at the same time.

This is just a concept at this point...but judging from the fantastic reception it received at the recent Detroit Auto Show...people want us to build it.

In fact, hybrids are SO important to the future, that I want to share an announcement with you today that is positive for both consumers AND the American economy.

You may know that Toyota directly employs more than 30 thousand Americans...and that our total U.S. investment stands at 18 billion dollars.

And we currently build our Camry hybrid at our Georgetown, Kentucky factory...one of nine vehicles we build at 10 American plants that are the source of 70 percent of our U.S. sales.

Today...backed by a technical center in Michigan where we employ 1,000 engineers...we are taking the next step in hybrid manufacturing in the United States.

I am happy to announce that Toyota will now build our Highlander SUV hybrid in the United States at our plant in Princeton, Indiana.

To do that, we will invest $400 million to expand the plant so it can build an additional 50,000 Highlanders, including hybrids.

As a result of moving Highlander hybrid production to Princeton from Japan and expanding capacity for the gas model, we will create 400 more American jobs and many more at our U.S. suppliers.

That's great news for this region...for our American customers...and for the U.S economy because every auto job creates three-and-a-half "spin off" jobs that support those workers.

This expansion of our American workforce follows the opening in November of our plant in Mississippi, where we added 2,000 new jobs.

Even better, we plan to export some of those Highlanders to other countries.

Our exports of "made-in-America" products to 21 countries have topped 100,000 vehicles...and we've just begun exporting American Camry sedans and Sienna minivans to South Korea.

So there are a lot of fuel-efficient vehicles coming to America's highways SOONER rather than later.

I should also mention that we will have more good news tomorrow when we make an announcement about a major philanthropic program that will benefit communities across America.

So stay tuned.

Along with answering environmental and energy conservation needs, the auto industry is working hard to deliver what customers want.

Now, when you ask the question..."What do customers want?" most people in business today will answer with one word: "EVERYTHING!"

And in the car industry, that means consumers want looks...efficiency...connectivity...affordability...and fun.

That's a tall order...and even the world's largest automakers are finding that hard to deliver totally by themselves.

So increasingly, car companies are reaching out to form alliances and partnerships that will help them deliver what customers want.

In the past...Toyota was one of those companies that liked to "go-it-alone."

But that's changing in a major way.

Under the leadership of our young, dynamic global president...Akio Toyoda...we are reaching out to cutting-edge companies to ensure that Toyota products will meet the changing needs of our customers and society.

For example, in the last 21 months:

we forged an alliance with Tesla to bring to market an electric RAV4 faster than expected...
we teamed with Ford to develop hybrid systems for pick-ups and large SUVs...
we partnered with Microsoft to ensure we have the latest cloud technology to connect future cars anywhere on earth...
we set up a partnership with computer chip giant... Intel... to develop better inside-car touch,
gesture and voice technologies that reduce driver distraction...
and, we formed a partnership with BMW to jointly work on lithium-ion batteries and other environmental technologies.

So there is more to come from Toyota...A LOT MORE.

And we are not alone.

You will see more automotive alliances as car-makers stretch to meet the growing needs of consumers.

Today's cars are also well on the way to meeting the needs of connected customers.

More and more, car makers are working to make sure their in-car electronics are compatible with the smartphones that have become the communications center of our lives.

In fact, our Lexus Enform system on the new GS you see here provides navigation and sound entertainment as well as popular apps like Pandora radio...Bing search and Open Table for restaurant reservations.

The key is to provide these connected activities in a way that won't distract drivers and create safety issues.

So developing better voice recognition systems is on the "to-do" list of nearly every automaker.

At Toyota, we're also working on:

iPad-type consoles ...
wave switches that operate touchpads even when you have gloves on...
cameras that replace inner and outer rear-view mirrors...
new glass technologies that block 99% of harmful sun rays and splatter rain drops to improve visibility in bad weather...
And even steering wheel health monitors.

As we do these things to serve the needs of our customers, the environment and society, I am extremely optimistic the auto industry will grow, prosper and have a very bright future.

In short, it's a great time to be in the auto business.

We're entering an era of innovation that will significantly alter transportation in the 21st Century.

Well...by now...I hope you are getting a sense of the exciting future we can all expect as automakers develop the cars of tomorrow.

I can't promise you flying cars or Star Trek remotes that beam you up.

But I CAN promise you that Toyota and the rest of the auto industry will be eagerly developing cars that look great...are fun to drive...easy on fuel and the environment...AND will help us reach our dreams in the future.

Thank you...and I wish you good fortune and success.

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    • 1 Second Ago
      Ford Future
      • 3 Years Ago
      Natural Gas is a dead end today, as solar will soon be cheaper. Secondly, Fracking causes massive water pollution and cancer hotspots. As long as you don't know the "negative externalities" natural gas looks good, therefore the oil industry is spending money getting Republicans elected so your STATE EPA does not do cancer studies in these fracking locations.
        2 Wheeled Menace
        • 3 Years Ago
        @Ford Future
        ..same goes for hydrogen, most of it is made from reforming natural gas.. the fossil fuel's wet dream is to be able to repackage that as the green fuel of the future.
          • 3 Years Ago
          @2 Wheeled Menace
          Aaron, just b/c it can be done doesn't mean it is or will be. That isn't how they are doing it now. Since it is being done by the oil/gas industry... it never would be.
          Aaron Gleason
          • 3 Years Ago
          @2 Wheeled Menace
          You know, through electrolysis, you can create hydrogen from water... There are kits to do just this using solar cells for the power source. Don't spread FUD. Check your facts.
      Dave R
      • 3 Years Ago
      You lost points when you called the Prius Pious.
      • 3 Years Ago
      Just to clarify, the number of Prius sold by August 2011 was 2.36 million units. If you include all Toyota hybrids including Lexus, the number is over three million.
      Ford Future
      • 3 Years Ago
      As long as America allows the oil/coal industry to write US Economic and Energy policy we will NEVER be free of oil, and while we may individually attempt to move off oil, the Radio Waves send an endless stream of Propaganda about why the Volt, or any hybrid isn't good for America. Directly in conflict with what is actually a benefit for America. We can only hope that at some point there will be a Shareholder REVOLT at Exxon.
      • 3 Years Ago
      I put 143,000 on my last Prius and have 20k on my 2010 prius an love it, I'm getting 52mpg for the last 20k miles. Never had had a lick of trouble, wonderful car!
      • 3 Years Ago
      Well, politics isn't the biggest reason to drive a Prius. Neither is the idea that you're saving the environment. The best reason to drive a Prius is that it's the most reliable vehicle around. According to TUV Report, Germany's quality testing program, the Prius is the most trouble-free vehicle. As The Truth About Cars reports, "This is no J.D.Power CSI. This is the real world, a report compiled with screwdrivers, flashlights, emission probes, brake testers." About the Prius, they say: "Especially impressive: The complex hybrid technology of the Toyota Prius works perfectly." Lots of people have concerns that hybrids and electrics, which have relatively new technology, might break down more easily, or the hybrid batteries might not last. This should help ease their concerns. http://www.autobild.de/artikel/auto-bild-tuev-report-2012-2320664.html http://www.thetruthaboutcars.com/2011/12/it%E2%80%99s-official-toyota-prius-and-porsche-911-are-germany%E2%80%99s-most-reliable-cars/
      Kevin Gregerson
      • 3 Years Ago
      Just to give him a heads up. For those of us who really like to drive their cars, we actually get better mileage in the sportier more roadworthy vehicles than we do when driving a prius. I got one as a rental one time and over 1500 miles in a week and my average fuel mileage was less than 30mpg. Compared to the 2012 focus where I got about 33mpg on basically the same trip and it was a hell of a lot more fun to drive.
        • 3 Years Ago
        @Kevin Gregerson
        I don't agree with you. When you drive a sportier or powerful cars, the urge to step at the gasoline pedal is more tempting. Take for example the M5, I doubt if you own an M5 and you'll just be slightly tapping at the pedal, that's way more boring than driving a prius. The advantage of driving a prius is noticeable, when you drove one in the crowded cities. Stopping is more frequent, so all those lost energies in the process can be reused again.
          Kevin Gregerson
          • 3 Years Ago
          For City drivers, sure, for the people who climb through the mountains near daily, drive 30k a year, and burn through a set of tires every year. Not really... As for an M5, sadly, the fact that its a BMW means I can't trust it to be reliable. I've had too many friends burned by the 7 series to ever consider another BMW. Though, I've been tempted to find a z3/z4 and get a GM LS series V8 engine. 30mpg and 12 second quarter mile for me. I can also get an Excursion Diesel and modify it to get 30mpg which would give me more cargo, more power, and still yet decent mileage.
      Dan Frederiksen
      • 3 Years Ago
      and how much would it drop if they all drove EVs, grin-san?
        SVX pearlie
        • 3 Years Ago
        @Dan Frederiksen
        not nearly as much as if they all walked or rode bicycles.
        John Fish Kurmann
        • 3 Years Ago
        @Dan Frederiksen
        Dependence on foreign oil isn't the only concern, and it's far from my highest concern. No, that would be the climate impact, and here in the Kansas City area as well as in many other areas of the U.S., an excellent hybrid has a smaller carbon footprint than an EV or plug-in hybrid. Here's how the Union of Concerned Scientists puts it: "If an electric-drive vehicle is recharged primarily using electricity generated from coal, its global warming pollution footprint is only a little better than the average gasoline vehicle today and is significantly worse than a good hybrid—based on emissions from generating, transporting, and using electricity or gasoline.” In other words, if you can charge from your own clean energy source, by all means buy a plug-in vehicle wherever you live; if you live in an area that gets the bulk of its electricity from coal, though, go with an excellent hybrid.
      Jim Illo
      • 3 Years Ago
      And if everyone drove a Volt or Leaf, we could COMPLETELY ELIMINATE our dependence on foreign oil. Only problem is that Mr. Inaba is including things like pickups, SUVs and minvans in his analysis. The Prius can't replace these vehicles. But he makes a very good point: At my work there are tons of 3-row SUV's that my co-workers commute in, and most of these people have at most 2 kids. A Prius (or a Leaf or Volt) would work fine for such people. If people bought vehcicles only as large a vehicle as they actually needed, then we would be well on our way to energy independence.
        SVX pearlie
        • 3 Years Ago
        @Jim Illo
        stupid AB comments... from under 10 mpg to over 15 mpg for a major reduction in the worst oil consumption over the past 5+ years.
        • 3 Years Ago
        @Jim Illo
        Ford and Toyota are working together to build a very high efficiency pickup, which could be interesting. Sometimes you get the best gains by picking the low hanging fruit and a F150 with around 17 mpg combined is pretty low hanging. Jim, I agree with a lot of what you say, but I think that you might be missing what your neighbors are doing with their SUV's once a month or more. They are towing trailer RV's to the mountains or horse trailers to shows or jamming their kids hockey team into them for a trip to the regionals 200 miles a way, or some such. People choose to drive an expensive, larger vehicle because they need the capacity often enough to make it worth their while. A lot like a Volt owner buys the Volt knowing that he will only need the genset 2 or 3 times a month, but those 2 or 3 times make a cheaper Leaf less useful to them.
          Jim Illo
          • 3 Years Ago
          Ziv - you're right that some people need the utility of an SUV, pickup or minivan just a few times a month, so they feel they have to get one. I bought a Volt in March 2011. I actually walked away from it for a few weeks after test driving it because we had used my SUV move furniture just a day before I test drove the Volt. I spoke with a friend and a relative who had a pickup and SUV, and they said they would be happy to loan me their vehicle if I needed it. In the 11 months I've had my Volt, I haven't needed to borrow either vehicle (note: we have just one child). It's interesting: I grew up in a family with six kids. Somehow we managed with a VW bug as the main family car for a while. And yes, we did fit six kids plus my mother in the Beetle often - two behind the rear seat if you can believe it - even on a 200+ mile trip once. Of course the rate of death-by-auto has dropped dramatically since such practices have ended, so the progress is good, even if we do use more oil these days. I work with someone who commutes in a BMW X-5, and the only reason they 'need' it is so that their two kids each have their own row so they don't fight as much. But their getting half the mpg vs. a minivan, and in reality they could drive a Prius and get 4x the mpg, or a Volt or Leaf and get 100x the mpg(e). I guess if U.S. buyers were all 100% rational we'd all be driving Corolla's and Sienna's.
          • 3 Years Ago
          Too bad that low-hanging fruit has been tried - the Silverado/Sierra hybrid (and related Tahoe/Yukon/Escalade hybrid) got 20-21mpg with no drop in towing performance vs. a V8 pickup, yet got basically no sales. The problem is being able to make that pickup cost effective - something hard to do if you have to invest in several thousand dollars' worth of batteries to go with it. Of course, people still sniff when you talk about a hybrid "only" making MPG claims in the 20's... which is partly why the Lexus HS250 didn't take off - not "luxurious" enough for the price/brand, and not fuel-efficient enough for a hybrid.
          SVX pearlie
          • 3 Years Ago
          Those hybrid SUVs and trucks were *exactly* the right technology and decision. Had it become standard, truck mileage would go from
      • 3 Years Ago
      Dependence on foreign cars would be 100%
        Dave R
        • 3 Years Ago
        Good point. We can substitute Chevy Volts instead. If Ford ever produces a real Prius competitor, that would work as well. Or maybe Toyota could start producing the Prius in the USA.
          • 3 Years Ago
          @Dave R
          Not a bad idea, the volt is a good car. However I would like to see everyone rolling around in a Tesla that would be the way to go :D
      • 3 Years Ago
      And if the Prius ran on CNG or E85 we might be able to eliminate foreign oil completely. What or you waiting for Toyota? Don't what to spend the $50 - $100 for E85 capability. CNG would cost more, but have a bigger benefit. It would still likely come in for less than the average transaction price of a new vehicle. I own a Prius, and my work commute is 2.5 miles. I can't plug in a vehicle at home or at work. There are so sidewalks or bike paths that covers my commute and the weather is unpredictable. But I can get both CNG and E85 within a reasonable driving range. I want a way to use less foreign oil (actually, less of any oil). I want options for improvement that are viable and affordable. The technology is here. What are we waiting for?
      2 Wheeled Menace
      • 3 Years Ago
      You'd have to replace trucks, SUVs, Vans by Priuses.. We could also reduce our fossil fuel usage by driving less and picking up a 2 wheel steed; just sayin ;)
        • 3 Years Ago
        @2 Wheeled Menace
        Maybe Toyota should just make a pick-up truck with the Prius engine & battery under the hood. They don't need to make it special or custom compared to the small pick-up they have already (Tundra?). Just try and reduce some weight were possible.
          • 3 Years Ago
          Toyota did try to make a hybrid pick-up and they failed. their system incorporated a transmission that was not capable in a 1-mode drive. It was actually GM who successfully created a properly functioning hybrid pick up, that did not sell due to high cost. Saying "oh why don't they just apply that technology to 'x' " is always easier said than done. people tend to not understand the amount of engineering development costs that go into new technologies and then are shocked when it is reflected in the high sale price
          John Fish Kurmann
          • 3 Years Ago
          Toyota and Ford are now cooperating to develop a hybrid system that will provide the hauling and towing capacity needed by light trucks and truck-based SUVs.
        • 3 Years Ago
        @2 Wheeled Menace
        The Prius couldn't replace the pick-ups, but dropping the drive train of the Mitsubishi Outlander plug-in into one of their pick ups would do the job just fine.
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