Toyota CEO Sees Post Election Sales Boost
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TRAVERSE CITY (WWJ) – This year’s election could be the best thing for the auto industry, says Toyota North America CEO Jim Lentz.
INTERVIEW: Toyota North America CEO Jim Lentz talks with WWJ’s Jeff Gilbert.
“Regardless of who wins the election, I think we all feel that people will then know, with some reasonable degree of certainty where things are headed. They will either decide to buy or not buy, but I think there’s gonna be a big shift.”
Lentz said while overall sales have been rising this year, sales on the retail level have been fairly flat. He attributes that to a high level of uncertainty among consumers.
“Before they make that step into greater debt, they just want to have some sense of stability into the future,” said Lentz. “As soon as we have that, I think you’re going to see this industry rocket.”
Toyota, meanwhile, has seen double digit sales increases in recent months, in comparison with last year, when their inventories were hampered by the earthquake and tsunami in Japan.
“Between tsunami and flood in Thailand, we’re back,” said Lentz. “In fact this month— 300,000 units in inventory is about our optimal level—and we began this month with 299,000.”
And while Toyota’s market share has returned to its pre-tsunami level, Lentz said they are not yet back to the levels they were at before Toyota’s 2010 recall issues. He said a lot of that is due to increased competition in areas like small cars and hybrids, that Toyota once virtually owned.
Lentz said while Toyota is exploring bringing more production to North America, no decisions have been made, and at this time they feel “right sized.” About 70 percent of the vehicles Toyota sold in the U.S. are built here.
Toyota is doing more work developing products in the U.S. The new Avalon big car that’s about to debut, Lentz says, was developed almost entirely here, with the engineering work done at Toyota’s two technical centers near Ann Arbor.
While Lentz wouldn’t rule out another North American plant, he said Toyota will take a hard look at the economics behind a new plant. While building where you sell can protect a company from fluctuating currency, that’s only one of many issues.
“Investment in plant in North America is in excess of a billion dollars,” Lentz said. “You better be right on your currency forecast if you’re going to do that.”