Lentz: “The next step for me is, I’ve got to get this team working together like hand in glove into the future. We knew that would take a few years.” Photo credit: Bloomberg
DETROIT — After a massive headquarters consolidation that moved thousands of workers from California, Kentucky and New York to the Dallas suburbs, Toyota Motor North America CEO Jim Lentz is finally comfortable that he’s got his people where he wants them to enable better communication and faster decision-making.
The next step, he says, is to actually make that communication happen. And there’s still a ways to go before the kinks are worked out, he concedes.
“To say that I have the sales and manufacturing and engineering and finance companies all working as a 100 percent efficient team would be an overstatement,” Lentz told Automotive News here. “We’re still working at it. The next step for me is, I’ve got to get this team working together like hand in glove into the future. We knew that would take a few years.”
Lentz has little time to waste. He and other executives are facing a mandate from Toyota Motor Corp. President Akio Toyoda to work faster and more creatively to seize on technological changes that are roiling the legacy auto industry. Toyoda has framed this as a do-or-die struggle for the world’s largest automaker.
“A few years back, you just have to figure out the economy, figure out how many vehicles you’re going to build, car vs. truck,” Lentz said. “It’s much more complex today. So you’ve got to do a good job taking care of today’s business to pay the bills, but then you’ve got to have your fingers in all these different directions, whether it’s EV or autonomous vehicles or mobility as a service — all of that — to be able to make sure that you survive for the future.”
Lentz said having the various divisions of the company working together in close proximity is important to expedite research projects, including electric vehicle and autonomous vehicle development.
But Lentz warned against the company getting too far out ahead of the marketplace. He compared the progression of electric technologies to that of hybrid vehicles, noting that 17 years after the North American launch of the Toyota Prius, hybrid vehicles account for just 3 percent of the marketplace. He argues EV penetration will be even slower, given the added concerns about range and charging infrastructure.
Industrywide, Lentz said, EVs make up less than half of 1 percent of the marketplace, and while there’s volume at that level, it’s not a profitable business yet.
“So how quickly is that going to evolve? How quickly do you need to take away from other projects to develop that if it may take 15, 20 years for that to really develop as an industry?”
Autonomous vehicles are even further down the line, Lentz said. They would be too costly for consumers at this juncture, he said, and public trust isn’t likely to grow fast enough for the endeavor to be productive in the near term.
“That’s what everyone’s nervous about a little bit,” Lentz said. “We see change coming; it’s difficult to tell the rate of that change. Are autonomous cars going to be a mainstay in the market in five years or 50 years?
“If you are a believer that it’s in five years, you might be a little bit more nervous about where you might be as a company than where you might be in 50 years, and the reality is it’s probably somewhere between that.”
Lentz said he’s still confident that U.S. negotiators and their counterparts in Mexico and Canada will find a way to move forward on the North American Free Trade Agreement, but if the agreement were to unravel, Toyota would have to re-evaluate its plans for production in Mexico, where it has one pickup plant and another one under construction.