The Toyota Prius: the most important '04 model? Yes

Automotive Design & Production, Oct, 2003 by Gary S. Vasilash

Toyota is diligently working to change the automotive landscape. Sure, the numbers aren't big now, but consider this: in Toyota's first full year of business in the U.S., 1957, it sold 287 Toyopets. Two years of similarly anemic sales followed. Toyota withdrew from the market. The Camry was the number-one selling car in America in 1997, 1998, 1999, 2000, and 2002. Don't let initial small numbers lull you into a sense that everything will remain the same. It won't. Which is why the Prius is so important to the industry.

Don't Play Craps with These Guys.

If you want to understand the future of automotive design and production--what you do for a living, not this publication-then you have to understand the Toyota Prius. The 2004 Prius. The second-generation. While some vehicle manufacturers are researching and developing, or hemming and hawing, Toyota, which is certainly on track to achieving a technology position that's commensurate with its quality and productivity positions (which ought to scare the hell right out of vehicle manufacturers everywhere), has been deliberately working toward bringing alternative power trains to the streets of the world. This began in earnest in the early 1990s, when the G21 committee was established. That's "globe" and "21st century." The goal was to determine how the company could develop and market vehicles that would have low emissions. Late in 1994, about a year after the committee was formed, a concept vehicle was developed called the "Prius," taken from the Latin word for before, as in "ahead," not something from the past.

The concept was shown to the world on October 27, 1995 at the Tokyo Motor Show. But prior to that and not on the world's stage, on June 30, 1995, the development of a hybrid vehicle was approved by Toyota corporate officials. It was code-named "890T." The vehicle would be powered with what was (and is) called the "Toyota Hybrid System," a system that would combine an internal combustion engine with an electric motor. The undertaking went in short order from being the sort of thing that committees do to a full-out product development program. In December 1995 it was announced that the hybrid vehicle would go on sale in Japan in two years' time. And on December 10, 1997, it did.

In August 2000, Prius was launched in the U.S. with an MSRP of $19,995. Prius sales in the U.S. were 15,556 in 2001. They increased to 20,119 in 2002. Certainly this is not a whole lot of cars by any measure. But there was Toyota (joined only by Honda with its Insight and Civic Hybrid), selling a compact car that was providing an estimated 52 miles per gallon in the city and 45 on the highway, learning not only about developing hybrid vehicles but about selling them in a market where horsepower tends to be king. (The '03 Prius has a four-cylinder DOHC, 16-valve engine that provides 70 hp @ 4,500 rpm that can be supplemented by a 44-hp permanent magnet electric motor for a total of 98 hp in action.)

Speaking of the launch in the U.S., Don Edmond, senior vice president and general manager of Toyota Motor Sales, admits, "Frankly, it was one of the biggest crapshoots I've ever been involved in. Not because we lacked confidence in the quality of the product. Or the logic of the concept. Or the significance of this breakthrough technology. The key was to convince consumers in the U.S. that hybrid technology was more than a science project. More to the point, the key would be convincing them that Prius was a real car." Arguably, other efforts by other companies did smack of Dr. Science and Rodney ("Remember: He knows more than you do"), or seemed to be put off to some point in the ever-receding Future.

This Is A Business (or, It Takes Money To Make Money).

At this point, there is an oft-heard objection regarding Toyota selling the Prius at a loss and subsidizing the cost of the vehicles. Here's Masao Inoue, Prius chief engineer, Toyota Motor Corp.: "Toyota has largely recovered its initial long-term investment in the first-generation Prius." Here's Dave Hermance, executive engineer, Regulatory Affairs, Toyota Technical Center, U.S.A.: "The product is profitable." How profitable is a question that's unanswered. At least at this point in time. Presumably, in the years ahead, that will be something that should become clear.

The Benefit of Doing It Yourself.

But there's something that needs to be understood about the development of the first-generation Prius, development that has led to a superior electric-gas hybrid technology that's designated "Hybrid Synergy Drive" (which is actually the third generation gas-electric hybrid system Toyota has developed). According to Inoue, "Back in the early '90s, when Toyota was developing a business case for hybrid technology, it was decided that the engineering program would need to be done almost entirely in-house. This meant that nearly every bit of design, engineering, parts production, and assembly would be done in-house. No partnerships. No contractors. No suppliers of major components or systems." In other words, when most vehicle manufacturers were looking for the ways and means to outsource the design, engineering and manufacturing of even conventional technology components and systems, the people at Toyota decided that it would be in their long-term best interest if they did the development.