The Hybrid Gets a Push from the Top

At this point in 1994, the team still had rejected the notion of a hybrid engine. It was considered too new and risky technology. In September 1994, the team met with Executive VP Akihiro Wada and Managing Director Masanao Shiomi and the hybrid technology came up, but no conclusion was reached. The G21 group was given an additional task besides the continued development of the G21. They were asked to present the G21 as Toyota’s concept vehicle for the Tokyo auto show in October 1995. This meant they had just a year to develop what would become the showcase product of the auto show.

When they met with Wada in November 1994, he casually said, “By the way, your group is also working on the new concept car for the Motor Show, right? We recently have decided to develop that concept as a hybrid vehicle. That way, it would be easy to explain its fuel economy” (Itazaki, 1999). Shortly after this, in another meeting with Wada and Shiomi near the end of 1994, the bar was set even higher. It seems they concluded a 50 percent fuel economy improvement was not enough for a 21st-century car. They wanted double the current fuel economy. Uchiyamada protested that this would be impossible with current engine technology, to which they replied, “Since you are already developing a hybrid vehicle for the Motor Show, there is no reason not to use a hybrid for the production model” (Itazaki, 1999).

It then became apparent to the team what these two executives were trying to do. They did not want to come out and order the team to make a hybrid. Instead, they warmed them up by requesting a hybrid that did not have to be a production model for the auto show. They then led them to the natural conclusion that a true 21st-century car had to have breakthrough fuel economy and thus a hybrid seemed the only practical alternative. Though this approach appears to go against the general spirit of Principle 8, Use only reliable, thoroughly tested technology that serves your people and processes, Toyota always wants to consider every new technology “thoroughly” and adapt it when it is appropriate. And the 21st-century car was about developing a breakthrough. At the time, the hybrid system already was a thoroughly considered technology. What was different for Toyota was that this technology hadn’t yet been proven on a mass production basis. So, when Uchiyamada took up the challenge, he got one important concession from management: that he could select the finest engineers available within the company to work on the hybrid system.