Organization : Toyota MotorCorporationIndustry : Automobile << PreviousCountries : USA ExcerptsTo download Toyota Prius: A Case Hybrid Carsin New Product Development casestudy (Case Code: MKTG118) click Ferdinand Porsche manufactured the first hybrid-electric car in 1898. Inon the button below, and select the the 1960s a few attempts were made to manufacture hybrid cars by applying turbine engines to the production of the vehicles. A turbine-case from the list of available cases: powered race car was introduced in 1967 with the turbine engines powering the wheels through a mechanical transmission. The need for cleaner and more efficient vehicles led to thePrice: development of hybrid vehicles in theFor delivery in electronic format: Rs. 1970s. In 1970, a program called the400; Federal Clean Car Incentive (FCCI) was started by the US government. ThisFor delivery through courier (within program led to the development of aIndia): Rs. 400 + Rs. 25 for Shipping hybrid prototype in 1972.& Handling Charges The program was scrapped in 1976 by the Environmental Protection Agency (EPA) of the US. In 1993, another program called the Partnership for a» Marketing Case Studies New Generation of Vehicles (PNGV)» Marketing Management Short Case was launched in the US. The partnersStudies in the program: Chrysler, Ford, GM,» View Detailed Pricing Info and a few governmental agencies, developed hybrid prototypes but» How To Order This Case never commercialized them...» Business Case Studies» Case Studies by Area Knowledge Management at Toyota» Case Studies by Industry According to analysts, Toyotas success in both the local and global» Case Studies by Company markets was based on its gaining a competitive advantage through implementation of innovative and path-breaking ideas on its production floors. Toyota had focused on learning from the very beginning.
Search At Toyota, knowledge sharing was intertwined with its people-based enterprise culture, referred to as the Toyota Way. The five key principles that summed up the Toyota Way were: Challenge , KaizenPlease note: (improvement), Genchi Genbutsu (go and see), Respect and Teamwork.This case study was compiled from publishedsources, and is intended to be used as abasis for class discussion. It is not intended The Toyota Way recognizedto illustrate either effective or ineffective employees as the companys strengthhandling of a management situation. Nor isit a primary information source. and attached great importance to developing human abilities through training, coaching and mentoring. The principles of “Respect for People” and “Continuous Improvement” were at the core of the Toyota Way. Most experts agree that the TPS system at Toyota worked by combining its explicit , implicit and tacit knowledge... The Original Prius The original Prius was powered by the THS. The THS was an advanced version of the EMS. THS is a power train that combined an internal combustion engine and an electric motor. It was based on the series/parallel hybrid system. It contained a power split mechanism that divided and sent power through two passages...
The case focuses on the worlds first massproduced hybrid passenger car - Prius -manufactured by the worlds second largestautomaker Toyota Motors.The case explains the new hybrid technology usedin the car.It also looks for the reasons for the success of theoriginal Prius in the Japanese market and of thesubsequent models of the Prius launched in theUS and other markets.The strategies for marketing the product in the USare also analyzed.Issues:
• History of hybrid vehicles.• Working and usefulness of hybrid vehicles.• The growing need for clean and green cars in the 21st century.• The system Toyota put in place for the manufacture of the original Prius.• The technology and other aspects and features of the original Prius and its subsequent versions.• Toyotas marketing strategies in the US.• The role of buzz marketing in the marketing of new and innovative products like the Prius.IntroductionIn December 1997, Toyota Motor Corporation(Toyota) of Japan launched its hybrid vehiclePrius in the Japanese market. This was one of thefirst mass-produced hybrid vehicles in the world.It used the Toyota Hybrid System (THS), whichcombined an internal combustion engine fueled bygasoline with an electric motor.Prius achieved a balance between high mileageand low emissions and was the upshot of thecompanys initiative to produce environment-friendly automobiles and its goal ofmanufacturing the Ultimate Eco Car(ReferExhibit I for the Ultimate Eco Car goal ofToyota). The Prius generated a lot of enthusiasmin the industry as it was both efficient and stylish.It was also a safe car. The car conformed to Japanese regulations and standards pertaining toenvironmental pollution. Having sold more than 100,000 units worldwide by 2002, it was thebest selling hybrid car model in the world. The company introduced further refined models in 2000 and 2003. Toyota introduced Prius in the US market in 2000. Before entering, Toyota conducted a research study of the US market and consumer preferences there. It developed various strategies specifically for this market based on its research findings. The price of the new improved Prius was unchanged from that of the original Prius.
These initiatives helped Prius to break successfully into the tough US market even though it was based on a new concept of a hybrid car. In 2001, the Automotive Engineering International3 recognized rius as the worlds best engineeredIntroduction Contd...By 2002, it was being sold in North America, Japan, Europe, Hong Kong, Australia andSingapore. Analysts opined that the demand for hybrid cars would rise because of the unstableoil prices and the growing need for environment friendly products.Commenting on the future of green technologiesand on Prius in particular, Chris Giller ofGrist.org4 said, “In the marketplace, greentechnologies and industries are among the fastestgrowing and most innovative developments.The Toyota Prius has defied every prediction tobecome the must-have car. The organic foodbusiness doubles every time you blink. Greenarchitecture is taking off.Renewable energy, emissions trading,environmentally-conscious investing: many of themost exciting advances in environmental thinkingare happening in the private sector.”5Background NoteToyotaToyotas history goes back to 1897, when Sakichi Toyoda (Sakichi) diversified into the textilemachinery business from his traditional family business of carpentry. He invented a power loomin 1902 and founded the parent organization of Toyota, the Toyoda Group, in the same year. In1926, Sakichi invented an automatic loom that stopped operating when a thread broke. This prevented the manufacture of imperfect cloth. (Calling attention to problems and rectifying them at the earliest later became an important part of the Toyota Production System (TPS)). The same year, Sakichi formed the Toyoda Automatic Loom Works (TALW) to manufacture automatic looms. Sakichis son Kiichiro, an engineer from Tokyo
University, was more interested in automobiles and engines than the familys textile business. In 1929, he traveled to the US and Europe to study the manufacturing processes in car factories there. After returning to Japan, he spent his time studying car engines and experimenting with better ways to manufacture them.In the early 1930s, Kiichiro convinced his father to launch an automobile business and in 1933,Sakichi established an automobile department within TALW. The first passenger car prototypewas developed in 1935. In 1936, Sakichi sold the patent rights of his automatic loom to acompany in England to raise money to set up a new automobile business...Excerpts Contd...The First Generation PriusIn 2000, Toyota introduced its first generation model of the Prius in the US, Europe and other markets.This model was also called Prius NHW11 or Prius Classic. A few modifications were made to the vehicleto meet vehicle standards for California, USA. Modifications were made to the engine by increasing thehorsepower from 58 to 72...Marketing the First Generation Prius in the USFor Toyota, marketing the first generation Prius in theUS was a challenge. Commenting on the launch ofPrius in the US market, Senior Vice President andGeneral Manager of Toyota Motor Sales, Don Edmond(Edmond) said, “Frankly, it was one of the biggestcrapshoots Ive ever been involved in. Not because welacked confidence in the quality of the product. Or thelogic of the concept. Or the significance of thisbreakthrough technology. The key was to convinceconsumers in the U.S. that hybrid technology wasmore than a science project...The Second Generation PriusToyota began evaluating the popularity of its first generation Prius in the market soon after it waslaunched. The evaluation was based on the price, performance and social aspects of the product as seenby buyers and potential customers... The Testing
The most important feature of the new Prius was itsenhanced safety. The company had worked towardchild safety and reducing the impact of collisions to aremarkable degree...OutlookToyota expected higher demand for the new Priusthan the earlier versions. Edmond said, “We aretargeting a sales volume of 36,000 for the first fullyear. Thats three times our sales target for Prius(original) when it launched in the U.S.”...