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Spain 2019 | INDUSTRY | VIP INTERVIEW

TBY talks to Miguel Carsi, President & CEO of Toyota, on international operations, the role of the public sector, and expectations for 2020.

Toyota is one of the world's largest automotive companies, with operations in over 170 countries across the world. Could you tell us about what differentiates Toyota?

A common differentiator for Toyota and Lexus is that quality is at the base of our product; we listen to the customer. This is easier said than done in an industrial environment with multiple choices, technologies, and combinations. Listening to the customer and trying to provide a solution for them is what we try to do.

Toyota's European activities underwent a transition in the 1990s when you began manufacturing in Europe for European customers. How does being based in Europe affect your operations?

Europe is one of the most challenging markets for the automotive industry. The beginning of Toyota's manufacturing in Europe was difficult because we started with medium-sized cars. Now, we have the whole range of cars being produced in Europe. The challenge lies with the variety of choices and customers in Europe, which I believe is the most diverse in the world. There is so much variety to consider in Europe, unlike other regions such as North America, China, or Japan.

While the year before was record-breaking, car production fell 5.5% during 1Q2019 in Spain. What do you think the role of the public sector should be in dealing with this problem?

The public sector needs to clearly define clear and stable rules that will not change every few years, as changing an industry takes time and we need time to adapt, change, and evolve. Toyota is starting the production of the first model in Vigo (Galicia) at the end of this year alongside the PSA group. We have been a Japanese manufacturer despite having plants all over Europe. Being a manufacturer in Spain adds more value and is a new dimension to Toyota. Coming soon is the Proace City van, which is a small LCV that will have conventional engines, petrol and diesel. Starting in 2021, it will also be the first electric vehicle in Toyota lineup.

You are also launching the Prius PHV, the solar car. How do you think this will revolutionize the sector?

The Prius revolutionized the sector 20 years ago. In those days, people questioned our actions and thought the Prius was strange. But now we have more than nine hybrids each in the Toyota and Lexus ranges. We are launching a second engine in the C-segment, which is a competitive segment for those customers that really want a fun to drive experience. We are also launching a 4x4 in the Prius range. Although we believe that EV is part of the future, it is not the full solution. Therefore, for this special project we want to make EV logical as right now it has limitations, including battery technology and price. This will have to change. We have to increase capacity and reduce charging time. We are not linked to one single technology but prefer to have a variety because we understand that the future will be multi technology.

What do you think some of the other big trends of the future will be, apart from hydrogen? How do you think cultural habits will move with this evolution?

I think that Toyota is changing because the customer is changing. We see a lot of new trends in customers, such as the use of mobile apps to manage cars. These things are pushing us to move into other areas where we did not consider in the past. Previously, each time we launched a car we worried about its size, engine, and the design. However, we were not really interested in the connectivity. Now we have to look for other things and be agile. That is what the customer demands. It is complicated to achieve such agility in this industry. Unlike with clothing, for example, you cannot change your products from one day to the next. A car that has more than 30,000 parts and requires time to adapt to these new trends.

How much do you invest in research on an annual basis?

It is more than JPY 2 trillion billion (USD 22 million) per year, making us one of the companies that spend more in this area. These days we are launching a hydrogen car to the Spanish market. First, we need the infrastructure in place in order to sell the cars with that refuelling system. I feel it is the same experience as with the Prius 20 years ago. Initial reviews are similar. I think hydrogen will become part of the future, not only in terms of mobility but also in terms of energy solutions. It is a
new energy vector that many countries are already investigating. It is a way of storing energy. Instead of losing the energy generated from wind or solar, it can be stored. Once you have the hydrogen, it needs to be consumed. The problem we have is that there is a threshold of investment towards hydrogen made with clean resources. I am convinced it will be a great change for society. For hydrogen solutions, most of the manufacturers already have a prototype. Mirai is the first hydrogen product we launched with more than 6,000 units now in operation worldwide. More than 600 of those are in Europe. Everyone is waiting to see when the demand will come. When the customer requires the product, then we will generate the solution.

What are your main objectives for Toyota in 2020?

2019 has been a year of transition as we have launched many new products and 2020 will be the year of consolidating these changes. We have renewed RAV4, the creator of the SUV segment worldwide. We have also renewed Corolla and we are introducing the Camry for the first time ever in Spain. We have an avalanche of products that take time to be introduced and then consolidated. In terms of services we are introducing many new ones, including a 10 year warranty. We are the only manufacturer in the marketplace to offer this. We are also introducing Mirai at the end of 2019, with its launch expected in 2020. Finally, we will introduce the first Toyota model produced in Spain, the Proace City. 2020 will be another great year for Toyota and Lexus in Spain.