Case Study of Toyota's Hybrid Vehicle Design

In late 1995, just six months after Toyota decided to use hybrids as a key player in
the future market. During the design and building of a prototype car using a
computer The hybrid system has no problems at all, which is very different from the
actual prototype design experiment, resulting in Satoshi Ogiso and the engineering
team having to spend more than a month tinkering with the software system when it
comes to actual testing. The car returned a few hundred yards, the engine stopped
working. This caused many problems to be solved, but from this lesson, it shows that
Toyota has made great efforts to bring such a car to the market. due to various
problems that are encountered, whether in the field of technology low order
volume and many miscalculations Demonstrates the ability of the company to
overcome various obstacles. to turn the improbable into the inevitable. Although
gas-electric vehicles are only a fraction of one-9 millionth of the number of cars and
trucks the Japanese company will produce this year. But it was the first to focus on
the combustion of automobiles since Stanley Steamer discontinued production in
1924, and it was also a futuristic car design suitable for the era of shortages. Katsuaki
Watanabe's former executive, or even the new executive, is still very focused on the
two Prius hybrid models, defining it as a key strategy for the company and wanting to
produce a cheaper third-generation Prius as quickly as possible. It is expected that in
the next 10 years Toyota will be able to sell approximately 1 million vehicles per
year.
The hybrid car project started in 1993 when Eiji Toyoda, the company's president
who is aware of the future of cars, together with Yoshiro Kimbara, the company's vice
president in charge of R and D, to carry out the project, named G21. To develop
small cars for the global market with two goals: Make new products and use a
different fuel economy of 47.5 miles per gallon. Or more economical than the
Corolla, about 50% until the end of 1993, the problem of fuel prices is much higher.
The team therefore changed its perspective to a broader perspective, namely, to
produce cars that could use other fuels other than oil.

However, this concept is not new. Because it's been discussed more than 20 years
ago by using batteries. But Watanabe agreed with the engineering team and
commissioned the car for the Tokyo Motor Show, where the team only had 12.
Watanabe month is slated to work hard while increasing the compensation of the
team for the best results. Because competitors will be able to keep up, the team has
come up with 80 prototypes and chooses only four of the best, emphasizing the
importance of optimal fuel efficiency.

After Toyota Motor Sales (TMS) in Torrance, Calif., heard from a conference in Japan,
it argued that the concept was too new for customers. From the results of consumer
research, it is not clear that Using hybrid fuel alone will allow the sale of higher-
priced cars. and wants to release waste into the air under the control of the
California Air Resources Board, while the design departments in New Beach and
Japan competed to design the body. This process took about two months, and the
Japanese team had another problem as the Prius had to use larger batteries at low
speeds. It also doesn't work when it's hot or cold.

In October 1997, the Prius was ready to go to market. This is two months ahead of
the original schedule, totaling approximately $100 million in total development
costs. And all the hardships, Watanabe did not expect great success. But production
is rapidly growing to 2000 units a month. California-based TMS is deciding how many
Priuss it should order and what prices it should sell. According to Toyota, TMS of
America buys cars from Toyota. In Japan at an agreed price, TMS then resells it to its
dealers. For the Prius, Toyota wants to set the sale price above $20,000, which
customers pay more than the Camry, but get a smaller car similar to the Corolla. This
could lead to customer disruption according to market research data. TMS solved
the problem by reducing the profit margins at distributors by about 14 - 10%,
enabling Japanese companies to pay. And still be able to make reasonable profits
and it is estimated that sales will be less than 1% of total sales in America The sales
team is more comfortable. The selling price is $19995, causing Toyota to lose from
the launch of this model. As for the launch of the Prius model made in the United
States, It's a car that doesn't stand out because it takes 13 seconds to accelerate to
60 miles per hour. While the Corolla takes just 10 seconds, the engine is noisy and
staggering while driving. However, in Japan it sells better because of its fuel
economy.

Discussion Questions
1. Let you evaluate the planning process of Toyota in detail and give reasons.

2. What kind of basic strategy do you think Toyota uses? Please explain along with
the reasons why.

3. What do you think of Katsuaki Watanabe's vision for Hybrid? Will that vision be
achieved?

4. How did you learn about planning from this case study?