A New President with a New Mission-Prius Leads the Way

But something important happened in August 1995. Toyota named a new president, Hiroshi Okuda, the first non-Toyoda family member to be the president in the history of the company. From the outside, he was viewed as unusual for the Toyota culture. Okuda was more overtly aggressive in his business dealings, including globalization. He also had a business background, rather than an engineering or manufacturing background, and seemed to call things as he saw them, in contrast to past presidents, who were more indirect and cautious in what they said. Such a big move obviously had a reason. It was clear that there were new challenges ahead to globalize and prepare for the 21st century.

While one might expect a non-engineer and a new executive who wants to put his imprint on the company to significantly change the direction and priorities of the company, Okuda stayed with Toyota’s overall game plan. He just pursued it faster and more aggressively. In the case of the G21, he might have neglected it as the pet project of a former executive. Instead, he embraced it even more aggressively. When he asked Wada when the hybrid vehicle would be ready, Wada explained that they were aiming for December 1998, “if all goes well.” Okuda said, “That is too late; no good. Can you get it done a year earlier? There will be great significance in launching the car early. This car may change the course of Toyota’s future and even that of the auto industry” (Itazaki, 1999).

Wada and his team felt a great deal of pressure, but also renewed excitement, given Okuda’s belief in the seminal importance of the project. The target was moved to December 1997.

At last the prototype Prius was publicly unveiled at the October 1995 Toyota auto show, and it was a hit. The team was energized. But they would need that energy to develop a true production hybrid vehicle, with a new target date less than two years away. Here they were, responsible for a highly advertised vehicle breaking new ground and there was no clay model and no styling design and they still needed to engineer all the major (and mostly new) systems of the vehicle.

The timing pressure was immense, but it did not push project leaders to cut corners. Uchiyamada refused to compromise even on a lower-risk approach. For example, there was a suggestion he use a hybrid-driven Camry for the first hybrid vehicle, since it was larger and could easily house the more complex engine and electric motor. The other advantage was that the difference in fuel economy between the existing model and the hybrid vehicle would be dramatic.

Uchiyamada rejected this suggestion, saying:

We are trying to build a car for the 21st century, and our work isn’t about applying the hybrid system on existing models. If we take the conventional method of first trying out the system in a large car, we would end up making too many compromises in terms of cost and size. There would be less waste if we worked with a smaller car from the beginning.