TPT May 2010

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78 M ay 2010 ›
Global Marketplace
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.”
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