TPT May 2010

G lobal M arketplace

Struck by this “envelopment without hard sell,” the Times ’s critic sought to learn what Toyota hoped to gain from its extraordinary generosity. The company would not grant interviews on the subject. It sent word through an intermediary – the festival’s booker – that Toyota Motor Co “wanted the music to speak for itself.” › While the US is an essential market for Toyota, it is by no means its sole problem-child. In January, Toyota announced that it was responding to reports of accelerator problems with the recall of up to 1.8 million cars across Europe, including about 220,000 in the United Kingdom. And on 1 March, on his way back to Japan from Washington where he testified at a congressional hearing, Toyota’s president Akio Toyoda held a press conference in Beijing to try to shore up his company’s share of its main market: China. As reported by Yomiuri Shimbun staff writers Yasushi Kouchi and Tomoko Echizenya, Mr Toyoda spoke to more than 400 reporters about the massive recalls of his company’s vehicles worldwide; apologised; and stressed the Toyota corporate principle of safety as a top priority. As an indication of the interest taken by Chinese media in what he had to say, the auto maker was obliged to arrange a second press conference conducted in Japanese. According to Daily Yomiuri Online, the news site of the Tokyo-based paper, questions from the reporters gathered at the JW Marriott Hotel Beijing focused on safety, such as whether Toyota planned to install a brake override system in cars it builds for the Chinese market. A reporter even asked whether the quality of Toyotas produced overseas was lower than that of domestically produced cars. The Yomiuri reporters wrote, “[Mr Toyoda] carefully answered individual questions.” Pipelines In a first-ever offer of its kind, the EC pledges significant funding for the Nabucco gas pipeline from Turkey to Austria In what Günther Oettinger, the bloc’s commissioner for energy, termed a “milestone” for European energy policy, the European Commission on 4 March pledged $273 million for a pipeline that would start delivering gas westward by around 2015 from the Caspian Sea region, bypassing Russia and Ukraine. “We’re not just supporting an idea any more, we’re talking about funding,” Mr Oettinger said in a news conference in Brussels. In the first instance of an EC offer of money for the construction phase of a gas pipeline, intended to avoid future crises over supplies, the pledge was significant in another respect: it suggests movement away from the commission’s stated goal of encouraging the development of biofuels, at least for the time being. Europe is only too well aware of the geopolitical and environmental risks of fuel dependency. It has apparently decided to address those risks by traditional means. The pipeline, the Nabucco project, would stretch more than 2,000 miles from Turkey, across Bulgaria and Romania, to Austria. Its cost is estimated at $10.9 billion, or about 40 times the sum pledged in March. But Mr Oettinger said the offer still represented a “trump card on the table” for Nabucco, and he is probably right. Certainly it puts pressure on the backers of the pipeline, including RWE of Germany and OMV of

Automotive Beleaguered Toyota makes offers that cannot be refused in the US, stresses concern for safety in China The ear on the Automotive News story (10 March) read “Toyota Recall Crisis,” but the information conveyed was that unprecedented incentives being offered by Toyota Motor Co – zero percent financing, subsidised leases, free maintenance – were boosting the company’s US sales “big time” in early March; and analysts forecast a 30% bounce for the full month. The disjunction was not untypical of the Japanese car maker, most of whose famously loyal American customers are better satisfied with its products than some other interested parties – notably a federal Cabinet department. The US Dept of Transportation is investigating reports of 52 deaths resulting from unintended acceleration in Toyota vehicles. In January, Toyota said that it would be recalling 5.6 million vehicles in the US, on complaints of problems great and small. On 9 March the company said further that it would likely issue a recall on all Prius models made between 2004 and 2009; and, on 10 March, that it will expand its recall on Tundra pickups to include all 2000 to 2003 US vehicles. Even so, according to Toyota spokesman Win Finklehorn, Toyota is trying moving forward into the new decade. “Our sales are up and so is morale,” he told a press conference reported by the Huffington Post (12 March). “We have no plans of slowing down.” Toyota faces a steep climb if it is to regain its position as of 1 January when it was the top-selling brand in the US, with a 14.3% market share for all of 2009. By the end of February the company had gone to No. 3, with 11%, indicating that Toyota loyalists cannot by themselves rescue the company’s American fortunes. A restoration to dominance of the US market clearly rests with new customers, who will need stronger persuasion than ever before. Given the obvious effectiveness of the incentives offered by Toyota Motor Sales USA Inc in March, the company was considered likely to extend them. But more than one observer noted that such sweeteners have a short shelf-life. And, they are expensive, even for the world’s largest auto maker by sales. › Many months or even years before Toyota’s troubles began, could some intuition have inspired the company’s decision to sponsor an extreme-heavy metal festival named for one of its models? The Scion Rock Fest, held 13 March in Columbus, Ohio, and accorded high praise by New York Times jazz and pop critic Ben Ratliff, could hardly be surpassed for making friends and influencing people. Mr. Ratliff noted that the event had enabled him to hear Yob – in his view perhaps one of the best bands in North America – and hear it properly, in a “festival with midsize clubs and good sound, surrounded by people who didn’t have to pay admission and bands who’d been flown in, put up in hotels, fed and allowed to play sets of at least an hour.” (“Metal Variety: Death, Doom, Black and Cars,” 14 March) As he need not have observed, none of that is usual at metal festivals. This one offered free admission in four clubs on a stretch of a major street, with staggered set times. The “satanic bargain” (apparently, Toyota’s bid to call itself to the attention of the festival-goers) was that the metal fans were offered “rivers of rather handsome Scion bags and T-shirts, which of course they took with them on their endless back and forth between Ohio State University and the [festival] neighbourhood.”

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