Payne: Q&A with Toyota marketing guru
Unlike Ford and Honda which were founded by passionate car guys, Toyota's founder Sakichi Toyoda started as a loom-maker. The Japanese company expanded into autos years later. It's a manufacturing conglomerate with a corporate culture built on efficiency. As a result it has often struggled in making an emotional connection with its customers — even as it delivered superbly engineered vehicles. Most Toyotas have had the sex appeal of a toaster.
But efficiency isn't enough anymore. According to the folks at JD Power – which have cheered Toyota quality for years — buyers now rank style as the third most important reason they choose a car. Time for Toyota to up its game. Time for some new flavors other than vanilla. Peanut butter fudge swirl Camry? Double chocolate mocha chip Yaris?
Fortunately, Toyota has a veteran car guy as its U.S. marketing guru to conduct the taste test.
Rick Lofaso grew up with oil under his fingernails. He is one of a team of American executives – beginning with CEO Jim Lentz – that run Toyota North America as a US-focused unit with manufacturing, sales, and management now all headquartered in the heart of Texas. I sat down with Lofaso to talk about Toyota's evolution, Akio, and lunar modules.
Q: What are your car roots?
Lafaso: My father was an aeronautical engineer. He worked on the Lunar Excursion Module that landed on the moon and navigation systems for subs and airplanes. So I grew up in that analytical, engineering environment. I had a sixth grade teacher who introduced me to cars. He was into amateur racing and for those kids who really wanted to learn more about automobiles he said: "Hey, stick around and I'll teach you more." When I got older, I went to work for an auto parts store and I ultimately decided I wanted to be in the auto business. I got an associates degree in automotive technology, transferred to Western Michigan University, and got a degree in automotive management. Toyota hired me right on campus and I've been with them for 32 years.
Q: We hear that Toyota CEO Akio Toyoda wants more excitement from his products. Is that a big change for the company you know?
Lofaso: That is one of the most significant changes I have seen in this company. When I joined . . . we didn't have a single manufacturing plant in this country. Lexus didn't exist. Scion didn't exist. Those were all major milestones . . . towards this long term vision of Americanization. Today we are truly a North American company – 75 percent of vehicles we sell in the US are built (here). We have some of the highest domestic content of any manufacturer selling in the US. Camry is an example with 75 percent domestic content. Every one of those cars comes out of Georgetown, Kentucky or its sister plant in Indiana. Akio's vision is the next step. We have always been known for quality, reliability, dependability, safety. That's (what) built the company. That's why we are on everyone's consideration list. We've been known for cars people ought to own. Now we want to be a car people want to own. That a different statement – that's an emotional attachment. It's interesting to watch. As you go to more expressive styling, it's polarizing. We hear commentary like: "That's a Camry?! Wow!"
Q: Is there something changing in the mid-size segment as well?
Lofaso: I don't think it's just the segment, it's the industry. When we tested the full model change in 2012, we got a huge response to the SE (ed. note: S is sports trim) over LE. We built a strategy around it. We built for 28 percent SE in 2012 (up from 14 percent). As we sit here today SE is 45 percent of our sales.
Q: How do you scratch your car itch? Do you race Toyotas?
Lofaso: I interact with Toyota in a 60-hour work week. After that I have to find time for a wife and two kids who I love more than life itself. But we do have opportunities to put our cars through the paces at test tracks.
Q: What does Toyota look like going forward?
Lofaso: We concentrate on six key areas: Fuel economy, safety, technology, premium interiors, more expressive styling, better driving dynamic. We're moving to Plano, Texas because we're a different company today than we were in 1957 when we started. Our sales and management was West Coast because we were an import company. Today we see an opportunity to become a more collaborative company. Being (headquartered) in Plano, the middle of the country, is an ideal location.
Henry Payne is auto critic for The Detroit News. Find him at email@example.com or Twitter @HenryEPayne.