Toyota FT-86 Concept - additional details

So we have all seen and read about the FT-86 Concept, a spiritual successor of the legendary AE86 Corolla Sprinter / Truneo / Levin. Below are additional info we manage to compile from the various sources.

The unofficial understanding is that the car will be launched in 2011, but there is still no word on what nameplate will the car wear. Current speculation is that the long defunct Celica badge could be revived. In its better days, the Celica was a highly sought after driver's car and boasted many World Rally Championship victories as part of its heritage. The last iteration of the Celica was taken on an entirely different path, was nothing other than a purely marketing driven exercise. It was sad to see the last generation Celica being drastically dumbed down to become nothing more than a Corolla clothed in a fancy body. In the USA, the FT-86 Concept could be sold as a Scion tC replacement instead. No word yet on the Subaru badged iteration.

Subaru's new generation boxer engine that powers the FT-86 could spawn into both a naturally aspirated and a turbo charged variant over time. Expect this to happen during its mid life cycle model update (minor change in Japanese auto industry lingo). Also, did you know that the reason Subaru's boxer engine was opted is not only due to Toyota holding 16.5% of Subaru, but also because using a boxer engine is the only way the FT-86's can maintain its sleek design while maintaining compliance to rigid pedestrian crash safety regulation. In order to meet today's strict European pedestrian crash standards, it is estimated that a car must have at least 7cm space between the bonnet and the engine block. Without having a low mounted engine block, there is no way Toyota could maintain the coupe-like silhouette of the FT-86. It would probably look like a short tail two door car with a "dugong" like front.

A convertible version could also be released later in its model life, primarily for the North American market.

Introduction of the FT-86 under the Subaru brand is a bit unclear, although the car will be built by Subaru. In many countries, Subaru have always potrayed themselves as an AWD evangelist. It's a bit like BMW will never do anything front wheel drive (we consider the MINI as a separate brand). BMW had to stick to RWD even for its 1-series, despite the obvious lack of objective advantage in fitting RWD on a small hatchback. For Subaru to suddenly introduce a RWD model into their model line up would contradict their AWD only philosophy. So unless an AWD version of the FT-86 will be made, it will be sold in very limited numbers as a Subaru, to a very limited number of markets only - namely those that sell the 2WD versions of the Impreza. I can't name any but I am sure there are some. Do you know which market have 2WD Subarus? I have seen some 2WD Imprezas in Singapore classifieds but am not sure if they are grey imported versions.

Souped up TRD versions of the FT-86, though not confirmed, have never been ruled out by chief engineer Tetsuya Tada.

The FT-86 is the first model jointly developed between Toyota and Subaru, but certainly not the only one. Both companies are also working together on a compact city EV.

NAP Review 2009

So we have all heard the revised National Automotive Policy (NAP). Details can be found here. And we have also heard the admission from Minister of MITI Mustapa Mohamed admitting that Thailand is very further ahead than Malaysian despite coming in later into the auto industry. It's hard to put a figure but it is generally accepted that in the 1980s Malaysia was at least 10 to 15 years ahead of any other of its neighbours in the ASEAN region. To Mustapa's credit, I think he is first MITI minister who is brave enough to admit this. The previous administration would simply shrug it off and say that Thailand and Malaysia should not be compared as they are both based on two different models - that Thailand is a mere assembly hub while Malaysia is a manufacturer.

A quick look at the key points of the revised NAP.
Local assembly of luxury passenger above 1,800cc and priced above RM150,000 on-the-road fully liberalised. Foreigners can own 100% of assembly operations.
Mercedes-Benz currently assembles entry level variants of the C-class, E-class and S-class in at the DRB-HICOM owned plant in Pekan, Pahang. In 2008, Mercedes-Benz Malaysia recorded a combined annual sales of the C, E and S-class models is around 3,700 units. Hardly a figure that would justify them running a wholly owned plant on their own. BMW Malaysia contracts assembly of its entry level 3 and 5-series model to a Sime Darby run plant in Kulim, Kedah. But as sales of blue propeller badged models lags slightly behind those with a three pointed star in Malaysia, the figure will be even lower for BMW.

BMW Thailand also operates a subsidiary in Thailand; BMW Manufacturing Thailand which runs a plant in Rayong. It currently manufactures the 3, 5 and 7 series (including diesel variants) as well as X3. BMT's Rayong plant is certified by BMW AG as a COC or Centre of Competence, meaning that it serves as a "leader plant" to many other BMW plants around the world. BMT has recently started export operations to Indonesia as well. BMT's Rayong plant has a capacity of 10,000 units a year. The plant is currently operating at less than 3,000 units a year, that's about 30% utilisation rate! ASEAN CEPT currently allows car makers to import cars made in any ASEAN country at 5% import duty. So why would BMW consider another plant in the region?

BMW Manufacturing Thailand's plant in Rayong.


7-series advert in downtown Bangkok

Lexus is particularly paranoid about its cars being allowed to be made outside of Japan. As far as I know, only the RX is also manufactured in both domestic Japan as well as overseas (Canada). The rest of Lexus models are mostly made in TMC's Tahara plant in Japan.

All over the world, car manufacturers are facing a problem of excess manufacturing capacity and under utilized plants. So someone please tell me, why would any car company, luxury makes in particular, would be interested building another plant in Malaysia or even expanding their local assembly operations? VW? Maybe, slim chance given that they are quite happy with the current arrangement of sourcing cars from their South African plant in Uitenhage. But how many VW models will qualify for this exemption? Passat sedan and Passat CC, maybe the GTi and Scirocco? And what would be the market potential of those cars? I love the most of the VW range, but I don't think a large majority of the population share my view. The "intermediate luxury" segment have never been a nice place to be in - just ask Volvo Cars. Crunch the numbers and I keen to believe that it is a lot cheaper to import them than to assemble them locally.

APs to be stopped by Dec 2015.Audit on AP recipients ongoing and checks to be done. Those flouting will be removed from list.
Haven't we heard this before? It was supposed to be scrapped in 2010, but certain politically linked car dealer association group pleaded their case for an extension. Who is so naive to think that the same will not happen? For decades, these politically connected middle men have been raking huge profits (around RM45,000 per AP) from what is essentially a meaningless piece of paper that they got free from the government. In return, they have invested almost nothing to grow the industry, other than hiring salesmen and renting showroom spaces. Authorised vehicle distributors had to compete with under declared grey imported models that competes directly with the models sold by them. When a group is so used to making money with almost little or no effort, what makes anyone think that they will wean off their rent-seeking mentality so easily and work hard to beat the big boys by doing some real manufacturing work?

Gradual introduction of Vehicle End of Life Policy. For starters vehicles above 15 yrs will have to undergo mandatory inspection during renewal of road tax.
Good in intent, but the issue has always been about implementation. As long as Puspakom remains the sole certification body there will always be loopholes for corruption. Then it will be nothing more than another layer of bureaucratic rubbish for the locals to deal with. In the UK, MOT vehicle inspection can be done by any certified garage for a small fee. The garage will then issue a certicate known as VT20, which is required when car owners renew their road tax disc. It's a similar case with Japan's "Shaken" vehicle inspection, though there are various parallel channels (including office of the National Agency of Vehicle Inspection itself) that owners can opt to use.

Companies manufacturing transmission systems, brake systems, airbag systems and steering systems are eligible for better fiscal incentives i.e Pioneer Status (PS) of 100 per cent fiscal deduction for 10 years or Investment Tax Allowance (ITA) of 100 per cent for five years.
Without looking into the finer details, this looks like one of better aspects of NAP. The previous administration failed to realise that the automotive industry is more than just about OEMs setting up plants. Having a strong parts manufacturing and supplier base is critical before any large scale assembly or manufacturing operation can begin. In fact, it was due to this very same reason that has allowed Thailand to leapfrog almost everyone else in the region.

Investing in the development of hybrid and electric vehicles bears the benefits of the acquisition of new, high end technology and the promotion of a more sustainable energy policy. A comprehensive mix of fiscal incentives, duty exemptions and customised training and R&D grants was included in the NAP Review to maximise returns on investment.
Sounds good but as stated above, it all goes back to having a strong supplier base that can sustain such an industry. Hybrid and electric vehicle battery manufacturing is still overly concentrated in Japan, although China is catching up rapidly. Why would anyone want to build a battery manufacturing facility when there is clearly no market nor strong incentive for such type of vehicles in this region, let alone in Malaysia? It would be just plain ignorant to think that companies will open up a plant here and export the finished products to markets thousands of miles away when they could be better off manufacturing them closes to their key market centers. The Thai government have been a lot more pragmatic by pushing for flex fuel, bio-fuel and CNG vehicles, which still runs on pretty much the same internal combustion engine and don't require any fancy pie-in-the-sky sci-fi concept. Provisions were also made by the Thai government for hybrid vehicles, but many question why the exclusion of clean diesels.

Curiously, just a few days before, the ASEAN Automotive Federation (I have never heard of it before this too...seems that it was setup in 1976 but went dormant and was recently revived) announced that the group intends to make ASEAN a green car hub.

And lastly; As one of the measures to enhance the competitiveness and ensuring long-term viability of the national car manufacturer, a strategic partnership between PROTON and a global established OEM will be encouraged. This partnership has to ensure:

* increase in exports and make Malaysia as a production hub for the region;
* transfer of latest technology and implementation of R&D activities in Malaysia;
* increase in local content and enhancement of development of Bumiputera vendor programme;
* increase Bumiputera participation in dealership network; and
* PROTON brand name and its domestic market share for specific segments are preserved.
Enough said. Time and time again many have said this, there is not one single socio-economic case study in the world that proves affirimative action policies serve their intended purpose. They only way forward is through education. Malaysia have the dubious honour of being the only country in the world where an affirmative action policy is aimed squarely at the majority ethnic group (rather than a minority group).

Would like to add further, but this will do for now.

Related link
Thoughts before NAP review announcements

LG is now among the largest supplier of car audio

South Korea's LG Electronics has closed a USD 370 million in-car audio deal with VW. With this, LG is now one of the largest supplier of car audio, supplying for 3 brands under the VW Group - VW, Seat and Skoda. The 7 year deal will start in 2012.

LG Electronics also said that its car audio systems display information from various electronic control units inside the vehicle and provide diagnostics reporting on the condition of components including speakers, antenna and other peripheral devices. It also helps users connect to external media via Bluetooth, USB and SD.

The deal is said to put LG as one of the top 3 car audio suppliers. Not sure who is the largest car audio manufacturer, but I reckon that names like Panasonic, Blaupunkt (formerly division of Robert Bosch GmbH), Fujitsu-Ten (sold under Eclipse brand) and maybe Visteon (spin off from Ford) and Delphi (spin-off from GM) should round up the top 5 car audio makers. Anyone knows what the actual top 5 list should be?

Perodua MPV undisguised images

This is probably the first set of completely undisguised image of Perodua's upcoming MPV aka D46T / MPC-Space. For more images go here.






From the set of images, we can guess that the white car should be of the lower grade variant - note the omission of fog lamps. The high specs variant should have blue instrument panel dials (with Optitron back lighting) while the lower grade will have amber coloured dials. Note also the inclusion of steering wheel audio controls. And I think I see projector headlamps in the images. Wing mirror mounted indicators should be available as standard, as per the current Myvi. Powertrain will come from the 1.5-litre gasoline 3SZ-VE engine mated to a 4-speed automatic transmission (doesn't seem like manual is available - refer to Dodo's comments below). The same powertrain currently powers the Toyota Avanza 1.5 (local version of Daihatsu Xenia sold in Indonesia), Toyota Rush (7-seater ASEAN version, also sold as Daihatsu Terios in Indonesia) as well as the Perodua Nautica (rebadged 5-seater EU / JDM market Toyota Rush / Terios / Daihatsu Bego).

Price will range between RM56,000 and RM67,000. Launch date is on Nov-17 2009.

This photo seems to be taken from a Perodua facility (looking at the staff uniform), and one has to wonder - why was this person allowed to bring in AV recording devices into the facility? It doesn't seem that this photo was taken in secret - seems quite obvious that it is taken with full knowledge of everyone present. Proton had some issues with LG CNS (engineering consultant) when photos of the Saga BLM were leaked out from LG's facility.

This blog have published quite a few articles on the Perodua MPV. Links to them below.
Perodua MPV - a crossover or an MPV?
Perodua MPV aka Passo Sette / Sirion Luminas. More pictures
Passo Sette / Sirion Luminas - preview to Perodua's MPV
Passo Sette / Sirion Luminas hints to MyVi based MPV?

Perodua is not the only one that will be launching a MPV model. Honda wants to join the game too with its Freed next year. Though this will be in an entirely different segment (expect prices above RM110k). Think of it as a proper successor to the Nissan Serena which was discontinued, that segment of the market have not been really filled by anyone (Naza Ria's sales has slowed tremendously). The Freed is expected to be imported from Indonesia.

Update :
Leaked Details on Perodua Alza - Perodua's new MPV

Financial Report Card - Hyundai and Honda leaves others in the dust

Hyundai's Q3 2009 nett profit is reported to be at USD832 million, the highest record achieved by the company ever. With that result, Hyundai now trails behind Volkswagen as the second most profitable mainstream car maker in the world (actually I have always thought the Toyota is the most profitable major car maker, but it seems that financial analysts in the industry believe Volkswagen holds the honour). Hyundai's sales in China soared 88% (first 9 months of 2009) spurred by government incentive to promote sub 1.6-litre passenger cars while in USA, Hyundai posted 1.3% sales growth for the first 9 months of this year. China is now the largest car market in the world and whoever wins there will also win big in the global sales tally. In China, Hyundai (represented by Beijing-Hyundai) outsold Toyota, Honda and Nissan in China, trailing behind only Shanghai-GM, Shanghai-VW and FAW-VW.

In contrast, Toyota saw a contraction of 28% in its sales in USA - it's largest market. Toyota is only scheduled to issue its financial report next month but analysts expect TMC to post a nett loss of 25 billion yen, or equivalent to USD 275 million. Its recent recall in USA is expected to cost USD 440 million.

Honda is the only Japanese car maker that is expected to post a profit. Like Toyota, Honda Motor Co. will only issue its quarterly financial results next month but the Nikkei business daily estimates that Honda will post a nett profit of 60 billion yen or USD 660 million. Honda did not embark on a similar mega expansion plan like Toyota, and was thus less exposed to the current credit crunch and did not have to deal with large excess production capacity like Toyota. Honda's very successful motorcycle business also provided it with some form of cushion against the current recession. As you know, the money is now in Asia but not just any part because it is definitely not in Japan. More specifically, developing parts of Asia. Motorization is still in its early stage in South and South East Asia. Vietnam, Indonesia, Thailand, India, China and even Taiwan have a significantly large motorcycle sector. The motorcycle industry is traditionally more resilient against an economic slowdown.

Not sure what was VW Group's Q3 financial results but the VW Group generated 1.2 billion Euros of profit in the first half of 2009. Like Hyundai, VW's strong growth is very much due to their limited exposure to the US car market and VW's leading position in China as well as many other developing markets like Brazil and Eastern Europe - all of which are less affected by the credit crunch. It's premium segment brand Audi is also rapidly closing in on BMW, Mercedes-Benz and Lexus.

However there is a need to be caution and understand that a large portion of Hyundai's earnings is due to the weak Korean won. In March 2009, the won was at a 11 year low against the greenback. Even though the won have since recovered 30% of its value, it is still 20% lower against its value at the end of 2007. Both VW and Hyundai owe a large portion of their sales record to vehicle scrapping stimulus packages by governments of China, Germany and to a certain extent the USA. Surely this cannot continue into 2010.

Toyota begins South Korean Offensive

On Tuesday, Toyota marks its first offensive to penetrate the highly protected South Korean market by launching the Toyota brand there for the first time after almost 40 years of absence. In 2001, Toyota launched its upscale Lexus brand there and the LS model was quite well received. Toyota is now ready to up the ante by launching 4 Toyota models into the South Korean market - the Camry Hybrid, Prius Hybrid, standard Camry (USDM / JDM model) and RAV4 SUV. If you think the Malaysian car market is protected, you should look at Korea. Hyunda-Kia group controls 72% of the domestic South Korean market - with Hyundai controlling 46% while Kia controlled 26%. Before 1987, the South Korean car market was virtually closed to all foreign cars. Even when the government gradually opened up its car market in 1987, the government still imposes limits on foreign car dealership network, the size and display area permitted and even the number of cars allowed to be on display! Up until today, if you own a foreign car, the South Korean equivalent of the IRA will sometimes subject you to extensive income tax audits.

2009 marks Toyota's third attempt to cracked the South Korean market after two failed attempts (sort of..). The first time Toyota had to pull out of South Korea was in the 1970s, lack lustre sales coupled with political sensitivities forced Toyota to pull out. South Korea at that time maintained diplomatic ties with Taiwan while Toyota is keen to enter the China market, whom as you know viewed Taiwan as a rogue state that needs to be pulled back in line to be part of the greater China. South Korea, being a US ally and a democratic state would not give two hoots about China, who provides financial and arms assistance to North Korea, the sworn enemy of South Korea. Coupled this with a lot of unresolved resentment against the Japanese for their atrocities committed to Korea, particularly with the WWII Japanese imperial army responsible for mass rapes of Korean women and murder of civilians. Up until this day, the Japanese deny this charge and continue to teach Japanese school children that the country did no wrong, causing much anti-Japanese resentment not only in Korea but also in China. The Korean government could not be bothered if Toyota decides to pack up and leave. Toyota again tried to reenter the Korean market in 1996, after the South Korean government began to liberalise its car market. But its Camry and Avalon models were shunned by the Koreans and the company and by 2000, Toyota had to again pull out of the Korean market and alter their game plan - to use Lexus, which was launched in 2001 and competes in a less tightly protected segment.

The younger generation of Koreans are more receptive towards Japanese products. Before Toyota, Honda was the first Japanese company to enter the South Korean market in 2004, with its CR-V SUV. They had quite a good run and by 2008, Honda was the top selling foreign car brand in South Korea, taking 20% of the Korean domestic car market. With Hyundai-Kia controlling 76% of the market, you can imagine that almost all foreign cars in South Korea is a Honda. The rest are high end luxury German luxury models. Honda now sells the Legend, CR-V, Accord, Civic in South Korea.

The volume seller for Toyota is expected to the Camry and its hybrid variant, where it will compete with the Sonata.



Hyundai have been slowly grabbing market share away from Toyota in North America (Toyota's most important overseas market) and to a certain extent China. In China, the Beijing-Hyundai joint venture is the fourth best selling car brand (or third depending on whether do you split the local JVs), trailing behind first place Shanghai GM, second place Shanghai VW and third place FAW VW. Toyota's FAW Toyota JV round up the back markers in 8th place.

While Hyundai have been making great strides to date, we need to pause to consider that Hyundai have one huge problem - that it is almost like a Korean version of GM - deeply hierarchical with a lot of industrial age baggage and legacies. There is a lot of mistrust between Korean auto workers and the management. If you think the American UAW is messy try dealing with Korean auto workers union. Remember how Korean auto workers launched a strike sit down and nearly burnt down the SsangYong factory? At least UAW strikes rarely involve the SWAT team. Throw in the chaebol connections, frequent allegations of corruption and you have primordial soup for a highly dangerous industrial collapse. On paper, Hyundai may have made a lot of improvement in its quality, but Hyundai's solution to its quality issues is not to stop defects from appearing / escalating further down the line, but rather to employ more quality inspectors to rework the cars before they are sent out from the factory gates. This have a serious impact on the financial bottom line and Hyundai-Kia can only afford to do so due to its near monopoly status in the Korean domestic market. In contrast, lean manufacturers like Toyota put a lot of emphasis on detecting the source of the problem and avoid them from appearing in the first place. The best examples of Toyota's factories (some still do) do not have any rework space in the first place, because a) there is no need for them and b) it removes any safety net and use this pressure to emphasise the serious need to ensure quality. I think it was American quality consultant Dr. W. Edwards Deming who said that quality cannot be inspected into a product but must be built in.

Having said that, I have sampled the Elantra X20 (now called Avante) and the Sonata NF - on both occasion I was pleasantly surprised by the level of refinement in both cars. But due to various reasons beyond the scope of this topic, the newer crop of Korean cars continue to be shunned by the Malaysian and Thai public. They are doing fairly well in Singapore though, probably due to the short average lifespan of vehicles there and thus, residual value is less of an issue.

Also, I am not sure to what extent do Korean consumers shun Japanese products now. Once I met this Korean chap, he hated his Sonata so much because of the constant visits it required to the workshop for various problems. He said he would certainly take a foreign brand over an equivalent Korean product. But then again, this guy is educated in America and is an expat for a German company. There is another guy I met, another Korean expat in Malaysia who bought a used Kia Picanto because he disliked the quality of the Naza badged equivalent (Suria). And he would not opt for anything Japanese.

Lancer EX launched in Thailand - ASEAN's first flex fuel car, and is 2010 Lancer to be imported from Thailand?

Mitsubishi Motors Thailand (MMTh) recently launched the 8th generation Mitsubishi Lancer, called the Lancer EX in Thailand, with the tagline "Sensational Intelligence". The 8th generation Lancer has already been on sale in Malaysia and Singapore since 2007. But there are 2 major differences between the Thai made Lancer EX against the Lancer models sold around ASEAN. Firstly the Thai domestic market Lancer is locally assembled, at Mitsubishi's plant Laem Chabang, Chon Buri. If I am not wrong, this is the only other production site for the Lancer in Asia outside Japan and China. Secondly, the Thai market Lancer is the first FFV (flex-fuel vehicle) car produced in Thailand.

Flex fuel vehicles are cars that can run on a wide range of fuel, ranging from regular gasoline to "mild" biofuel mix like E10 or E20 gasohol and all the way to E85 gasohol. FFV are most popular in Brazil as the government imposes a regulation that all cars must be able to run on a blend of ethanol fuel. More than 80% of vehicles in Brazil are FFVs. Though MMTh press release does not mention this, I believe the Lancer EX is also the first FFV car to be made as well as sold in the ASEAN region. The Lancer EX will come in two main variants - the 1.8GL gasoline model which is E20 and E85 gasohol compatible and the 2.0GT gasoline model (only E20 gasohol compatible). Being a FFV, the Lancer EX qualifies for a lower tariff from the Thai government, at 22% versus 25% for a regular E20 gasohol compatible car.

Nobuyuki Murahashi, the President of MMTh also confirmed that the company plans to export the Lancer from Thailand sometime next year. Though production in Thailand started since September, the company is still unable to export the Thai made Lancer to other markets in ASEAN as it has yet to achieve sufficient local content to qualify for lower tariff. MMTh targets to reduce the proportion of imported components from the current 60% to 40% by 2010.

In other words, the Lancer GT that is currently sold in Malaysia and Singapore in CBU form from Japan could see its sourcing being switched from Japan to Thailand to take advantage of the lower tariff. I am bit doubtful if the price in Malaysia is going to drop any further though. At its current price, the Lancer 2.0GT is an amazing value proposition, and I have always doubted if the local distributor Mitsubishi Motors Malaysia made sufficient margin out of it. I am more inclined to believe that the low price is the result of an "introductory price" agreement with the principal in Japan, as Mitsubishi needed to reestablish its brand here after so many years of absence. Any further reduction in pricing will hurt residual values of the current Lancer, and being a Mitsubishi, it already doesn't hang on to its value very well by default. Maybe MMM will decide to either throw in higher specifications or free servicing packages instead.

Like in Singapore and Philippines, the previous generation Lancer, will continue to be sold alongside the new 8th generation Lancer in Thailand. The 7th generation Lancer continues to be made and is now being repositioned as a "value" buy to attract value conscious buyers from both the B (Vios-City) and C (Corolla Altis-Civic) segment. Called the Lancer GLX, it comes with a 1.6-litre gasoline engine (E20 compatible) with a CNG option as well.


The Lancer GLX starts at 592,000 THB while the Lancer EX 1.8 starts at 831,000 THB. MMTh targets to sell 4,000 units of the Lancer EX for the rest of the year and 150 units a month of the Lancer GLX. Apparently, EX is short for "exceeding."

Media preview of the Lancer EX in was held on 16-September in Plaza Atheenee Hotel, Bangkok while the public launch was held recently on 16-October, in Bangkok's upscale CentralWorld mall. Below are some random shots from the roadshow cum public launch of the Lancer EX in Bangkok's CentralWorld.



The Lancer will also form the basis for Proton's next generation Waja / Impian model, under a one-off model-model collaboration. In exchange for granting Proton with the rights to reengineer the Lancer, Mitsubishi will be given the rights to rebadge the Proton's Exora MPV as Mitsubishi currently lacks a competitive model in the developing market MPV segment. Mitsubishi's own Grandis is designed on a cost structure whose baseline is far too high for it to be competitive in rapidly growing developing markets. The Delica D-5 is also on sale in Singapore but was only received with a lukewarm response and is drowned in the sea of cheaper grey imported and reconditioned Toyota Alphards and Estimas. Mitsubishi currently also sells a more conservatively styled version of the Lancer in Taiwan, called the Lancer Fortis. Either one of these Lancer variants could form the basis of the next Waja.

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Fifth Gear TV Series Axed (Unofficial)

The Daily Mail picked up a story, alleging that British automotive TV series Fifth Gear have been cancelled. However Fifth Gear's host Jonny Smith (why is his name without h?) posted on his Twitter acknowledging that the series have been cancelled but added that it is still not official. In his tweet, Johnny said, “Thanks to everyone for your compliments and words of encouragement. Remember, FG isn’t OFFICIALLY finished. Don’t (ever?) believe The Mail.”

Assuming that this is true, I am quite sad that Fifth Gear will no longer be aired. Fifth Gear is a regular resident on my torrent download list (I will glady pay for it if only the show is aired locally). Plus, I don't get it why do people have to always compare between Top Gear and Fifth Gear - as they both serve a different purpose. I watch both Top Gear and FG. I like to watch Top Gear for their entertainment appeal - stupid Clarkson and his co-presenters of Hamster and Captain Slow doing another one of their stupid cross continental races or burning rubber in an empty air field. I watch Fifth Gear for its informational value. TG is my automotive comedy and I don't take even one single bit of their "verdicts" seriously while FG is my sort of auto documentary. I especially appreciate the fact that Fifth Gear presenters include professional racing drivers of Jason Plato, Tiff Needell and Vicki Butler-Henderson. Those power slides are not done by camera and computer tricks. Same can't be said about TG though. Plus you can always count on "Wookie" Tom Ford to give you a rationale family man's perspective. Tom Ford is a father of 2, and doesn't drive press fleet cars like some loony, just like the rest of us. Jonny Smith is an eccentric young bloke with a penchant for cheap, fun, old cars, a character I can identify to easily though I certainly can't match his mechanical aptitude. I find Tim Shaw a bit too annoying sometimes but have grown to tolerate him over the season - being a celebrity DJ, he represents the Max Power crowd.

Hopefully the FG team can somehow come together again in an online format. The problem with TV is that they are designed to appeal to the lowest common denominator, which is what BBC has done with Top Gear. Don't get me wrong I enjoy TG very much, but there are certain times when I want something with a bit more depth. Ever since Internet became a mainstream, TV series have been on a slow decline. TV ratings peaked in the 1980s - with series like Dallas. Even the highest rating TV show of this decade commands only a fraction of top TV ratings from the 1980s. People these days just don't arrange their life schedule around the TV programme schedule. People don't go to school or work and talk about what was shown on last episode of 24 or Prison Break etc etc like they used to with Dallas, Bill Cosby and whatever that was popular back then. Which explain why in their desperation, TV network companies started coming out with those rubbish reality TV programmes and American Idol franchise, which I understand, though is highly popular but is still no match to the most popular TV series 2 or 3 decades ago. Chris Anderson, the chief editor of Wired Magazine discussed this topic of falling radio and TV popularity quite extensively in the early sections of his book Long Tail.

Lexus lacks a critical safety feature for drive-by-wire vehicles?

Some interesting revelation regarding Toyota's highly publicised floor mat recall and stuck accelerator pedal issues in USA. Consumer Report replicated the scenario of a jammed accelerator pedal on two German cars - a Mercedes-Benz E350 and VW Jetta Estate. The result was very surprising. Turns out that many German cars already have a so called "Smart Throttle" built into many of their vehicles since the early part of this decade. Smart Throttle is a safety feature built into cars equipped with electronically controlled drive-by-wire throttle. When both the throttle and brake pedals are depressed at the same time, the engine's computer will always use the brake pedal signals to override the throttle control, allowing the vehicle to be safely brought to a halt. Even with the throttle pedal continued to be pinned to the floor, the engine remained idle. A throttle pedal need not be physically jammed to the floor to cause the problem of unintended acceleration. Sometimes a problem with the throttle position sensor and even the cruise control could cause it. Hence the need for another layer of safety override.

If a similar feature was equipped in the ill fated Lexus ES350 that killed a family of 4, the vehicle would have been stopped with no drama. In fact, after reading this piece from Consumer Report, I am wondering why didn't the VSC (Toyota's speak for electronic stability control) cut engine power when the brake is fully depressed? I am not sure about Lexus vehicles but I understand that Mercedes-Benz vehicles uses the brake lamp switch signal as one of the inputs for the ESP. This also means the enthusiast drivers will not be able to do any left-foot braking as depressing the brake pedal could also cut engine power. So in theory, ESP / VSC is supposed to cut engine power when the system kicks in. No?

The thing about European cars is that while their built quality and overall reliability may still not match the best of Japanese brands, I appreciate the many thoughts that went into the design of their vehicles, most of them go unnoticed and not publicised. I appreciate how Volvo put their ignition key location above and away from the driver's knee (for the obvious benefit in a bad frontal collision). And I appreciate how Mercedes-Benz are putting multi-stage illuminating brake lamps that flashes rapidly in the event of a hard braking. Money were poured in to develop these features despite the fact that there is no obvious demand for such items. Smart throttle is not something you will see in MB and VW brochures and most drivers won't even know that their vehicle is equipped with it.

This not a very clear example of the differences between European and Japanese car companies, but it does give you a glimpse of the differences in their mentality. Why was smart throttle omitted in a Japanese Toyota? Because it is not required by law, because consumers don't see it, because consumers are not willing to pay extra for it, because market data shows that consumers won't appreciate it. Why is it included in a humble VW Jetta? Because the engineers think it is an important safety issue, because the top management is mainly made up of people who are either engineers or are Ph.D holders (just look at the number of people with the title Prof. Dr. in VW's board!), because they believed it is the right thing to do, no further justification required. Of course, this also meant that VW probably made less profit for every car compared to Toyota.

Smart Throttle is standard on all BMW models since 2005 while VW and Audi had them fitted since 2001. Note however these confirmations were made in relation to US spec models.

Volvo Tries To Reassure Public That 2010 S60 Is On Track

Students in many Ivy League schools have been increasingly working on autonomous driving vehicles. The United States Department of Defence holds an annual competition for autonomous vehicles called the DARPA Urban Challenge. Volvo's 2010 S60 sedan is a good example of how many of these technologies, first developed within academia (rather than directly within the industry) is slowly but gradually making its way to the market place.

Volvo have recently gone a publicity stunt, by deliberately driving its S60 prototype around busy streets of Copenhagen, Denmark, purportedly to "test" the S60's party trick feature - Collision Warning with Full Auto Brake and Pedestrian Detection. It's quite a mouthful. Below is extracted from Volvo's press release.

Volvo Cars tests new, unique safety technology in Copenhagen - in a disguised S60 prototype

Recently, sharp-eyed citizens in Copenhagen have had the opportunity to get a sneak preview of the upcoming, sporty Volvo S60 - which won't be introduced to the world until next year.
A disguised prototype of the new sedan model has been rolling through the streets of the Danish capital in order to test a groundbreaking new safety technology that can detect a pedestrian in front of the car and brake automatically if the driver doesn't react in time, to avoid an accident.

The new technology - Collision Warning with Full Auto Brake and Pedestrian Detection - will be introduced together with the all-new Volvo S60 in 2010. Volvo Cars' safety experts have been working with Pedestrian Detection technology for ten years and test cars have been rolling all over the world - most recently in the busy streets of Copenhagen.

"Factors like traffic behaviour, road conditions and climate must be taken into account in the design of the final system. All told we have collected more than 500,000 kilometres of real-life data. We can also use the information from these traffic tests to conduct advanced computer simulations," says Thomas Broberg, Senior Safety Advisor at Volvo Cars.

Continue reading the press release by downloading it here.

Watch the video below.


It is quite odd for a car manufacturer to allow its development mules / prototypes to be seen in public. The standard operating procedures for these cars is that they must never be seen in highly populated areas in the daytime, must not stop unless absolutely necessary and if they do need to stop for extended period of time the vehicles must be covered. Even the interior panels must be hidden under some dark cloth. Whenever manufacturers drive their prototypes around its either they are doing it for publicity or that they are done by clueless local distributors who understands neither the proper industry guideline nor the reason behind such practices. Case in point is Edaran Tan Chong's comical act of driving the Sylphy (before it was launched), masked with white tapes, being driven in the daytime along the LDP highway! When the same car is already launched in Singapore for more than a year, sold by Tan Chong's subsidiary in Singapore! Even I myself saw the ETCM pre-production model (you don't call a model that has gone on sale for years in Japan a prototype) along the LDP once but I didn't bother whipping out my camera and getting all excited like some jokers on the Internet. At the same time, Singapore registered Sylphy models continue to drive across the Causeway, undisguised of course.




Volvo S60 Concept shown.

The 2010 S60 sedan was recently rumoured to be cancelled, due to uncertainty of Volvo Car's future. Volvo Cars is currently being put up for sale by its parent company Ford. The car was supposed to have its global preview in September's Frankfurt Motor Show and European market launch is slated to be in late 2009. But as we all know, the car did not make it to Frankfurt 2009. Volvo Cars had to do something as part of its PR efforts to remind the public that its still business as usual for the company. Launch of the new S60 is expected to be delayed for at least another year, into 2011.

World's Largest Audi Showroom Opens in UK

No the title above is not a repost. Previously, we've read about Audi's largest "Audi Lighthouse" in Sydney, Australia. Well apparently Audi Australia's 16,000+ square meter facility has just been eclipsed by the 17,650+ square meter Audi Centre of West London, operated by the Sytner Group.


Sytner's Audi Centre West London dealership is a 7-storey facility (5 floors above ground with 2 floors housing a 32 bay workshop as well as parking facilities. There is also a 3-storey showroom that can house 116 cars! This new flagship outlet is located on prime real estate area, along an elevated section of the M4 motorway.



To mark this historic occassion, Audi UK did the UK launch of the R8 Spyder V10.


The Sytner Group is a UK based multi-brand mega franchise that runs a large network of luxury car dealerships that includes brands like BMW, MINI, Mercedes-Benz, Porsche, Ferrari, Lamborghini Rolls-Royce as well as regular makes like Toyota and Honda. It is also a subsidiary USA based car dealer giant Penske Automotive Group. Sytner Group was also ranked 4th in the Sunday Times Best Companies to Work For list (Big companies category). The company was founded in the 1960s by 1988 British Touring Car Champion (in a E30 Prodrive BMW M3) Frank Sytner and his brother Alan. They started as a BMW dealership but soon expanded their business into a very successful multi-franchise network. The company was then sold to American Roger Penske's Penske Automotive Group in 2002.


Frank Sytner continues to sit on Sytner's advisory board and races historic racing cars. During his BTCC winning days, Frank Sytner piloting his Prodive BMW M3 is known within racing circles as "Fearless Frank."

Perodua's new MD to be from UMW Toyota?

It seems that there will be a "swap" between the top management of Perodua, Malaysia's second national car maker that manufactures Daihatsu based models and UMW Toyota Motor, the sole importer and distributor of Toyota and Lexus vehicles in Malaysia.

Perodua's current Managing Director Datuk Syed Hafiz Syed Abu Bakar's (picture above) contract with Perodua is expiring by the end of this year. Word on the street is that UMW Toyota's current Executive Director of Strategic Marketing Hj. Aminar Rashid Salleh (picture below) will be Datuk Syed Hafiz's successor.


Both UMW Toyota and Perodua are affiliated companies within the larger UMW group umbrella. UMW Holdings is the largest share holder of Perodua, at 38%. UMW Corporation is the main shareholder of UMW Toyota, at 51%.

Prior to joining Perodua, Datuk Syed Hafiz was formerly attached to Exxon (now known as ExxonMobil) before moving to UMW to head Penzoil and Kayaba operations.

Toyota FT-EV II - Preview to EV jointly-developed with Subaru?

In a report by Japan's Mainichi newspaper on Tuesday, it was said that Toyota is considering to develop an electric vehicle with its affiliated company Fuji Heavy Industries (FHI), which owns the quirky Japanese car maker Subaru. The EV is targetted to be launched in 2012.

Toyota has a 16% stake in Subaru. Both company have establish a capital tie-up to develop new technologies and models. The first result of the collaboration is the FT-86 Concept compact sports car that is being previewed for the Tokyo Motor Show. Subaru supplies the boxer engine as well as manufacture the series production version of the FT-86 Concept.

While Mitsubishi has been going on a strong publicity drive hailing its i-MiEV as the world's first production EV from a mainstream car maker, truth is that although the i-MiEV have gone into series production in Japan, you still can't buy the car off the showroom. That is because the i-MiEV is currently only sold as fleet units to the Japanese government. Consumers can only purchase the i-MiEV from April 2010 onwards. Subaru on the other hand, have already launched the Plug-In Stella since June 2009, and yes you can buy it from any Subaru showroom in Japan for a pricey sum of JPY 4.725 million. The price however is excluding a JPY 1.38 million green car subsidy from the government. The Plug-in Stella runs on lithium-ion batteries supplied by Automotive Energy Supply Corp, a joint venture between Nissan Motor Co and NEC Corp. The car has a rated driving range 90km on a single charge (based on Japan's 10-15 mode driving cycle test methodology).



Plug-in Stella Concept shown.

The Plug-in Stella however is not Subaru's first EV. Prior to this, the company was already operating a fleet of electric drive Subaru R1, called R1e for use by the Japanese government.


Image by Subaru of North America, via Edmunds.

Toyota is said to be studying technical data from Subaru's Plug-in Stella. The paper also reported that FHI will eventually shift all battery procurement from Automotive Energy Supply Corp to Panasonic EV Energy, a joint-venture between Toyota Motor Co. and Panasonic. The car is expected to be based on the FT-EV II that is currently being previewed ahead of this month's Tokyo Motor Show.


The EV is expected to eventually be sold in Europe and USA as well by 2012.

Rumour - Previous Generation Honda City To Form Basis for Honda's Eco-Car in Thailand?

Update : The said vehicle is revealed to the Chinese market only Li Nian S1.


Like a mythical Phoenix bird that never dies and is able to rise from ashes, the latest rumour is that the previous generation Honda City will be revived by Honda Automobiles Thailand as the basis of their new Eco-Car. If the rumour is true, Honda is not the only one tweaking and reengineering its older models and sending out into the sales battle field again as an affordable car for developing markets. Earlier, we have also seen how Ford revived and "repackaged" its outgoing European Fiesta model as the Figo for developing markets.

The Eco-Car is a long term project of the Thai government to remodel their automotive manufacturing hub, expanding away from their current truck centric model to include green cars. Under the scheme, heavy tax incentives will be provided to car manufacturers who invest USD 150 million in manufacturing of vehicles that meet the following key criteria - fuel consumption of 20km per litre of fuel with petrol engines below 1.3-litre (or 1.4-litre diesel) and emits no more than 120g/km of CO2. On top of the, annual production volume must reach at least 100,000 units per year by the 5th year of operation. Read more here.

It is still unclear to what extent the similarities will end and how much underlying components will be reused (of course with newer updates to them), but it is expected that there will be very minimal exterior similarities between Honda's new 4-door eco-car sedan and the previous generation City. The previous generation City is known to be a fuel miser. With a little more tweaks and addition of "mild hybrid" components (i.e. auto engine start-stop, regenerative braking) and some aero and weight saving tweaks, meeting the 20kpl should not be too difficult.

If the rumour is true, positioning the model could be a bit tricky. It could be priced lower in Thailand due to the government incentive, but what about the export destination countries where no such incentive exist? I don't think Singapore's green car incentive is applicable to mild hybrid vehicles with engine start-stop and regenerative braking functions only. So will the model be priced above or below a standard City? Those mild hybrid components will bump up the price premium, but would anyone want to pay more for a car based on an older outgoing model? Unless significant differentiation is engineered into it.

It should be noted too that the Thai Eco-Car project also said to be initiated by Honda, to the ousted Thai former PM Thakshin Shinawatra. As Honda does not have a truck (the unibody Ridgeline is only for North American market, and is hardly a commercial success) model, it plays into Honda's strategic interest to convince the Thai government to promote eco-cars. Toyota Motor Thailand is also said to be involved in some dispute with the Thai government over the eco-car issue because Toyota have invested very heavily to make Thailand its primary manufacturing hub for its truck vehicle based IMV project - which includes models like Fortuner and Hilux (Innova's manufacturing is largely centered in Indonesia, the MPV capital of ASEAN). A shifting buyer demand towards smaller, low running cost eco-cars (expected to be priced around THB 500,000) will surely affect demand for cheap trucks, which still remains the most popular vehicle body type in Thailand. Nevertheless, Toyota has since confirmed its participation in the eco-car project, but not much is known about the model being developed, though we already know for sure a Yaris and Corolla hybrid is on the way by the next model change timing. Some say there will even be a Hilux hybrid.

With an eventual annual production target of 100,000 cars, surely at least a third of them have to be exported to other regional markets with a sizeable passenger car market, Singapore and Malaysia in particular. Sales small passenger cars in Thailand is overly concentrated within Bangkok city only. The rest of Thailand is still a truck dominated market. Currently Honda Automobile Thailand also exports the City to Australia.

By the way, on a recent trip to Bangkok I spotted the W221 S-class facelift model, undisguised, sitting on the back of a flat bed carrier. I was on a taxi on my way out of Survarnabhumi heading towards Bangkok city on a Friday afternoon when I spotted the carrier. But couldn't get my camera out in time. Plus the Hello Kitty pink Corolla Altis taxi was already doing close to 120km/h on the fast lane while the flat bed carrier truck was still lumbering in the slow lane. An Isuzu MU-7 was in between and blocked the view soon anyway. Nothing much to it. It's everything as expected after seeing the images posted in an earlier entry here. Guess the W221 S-class facelift launch will be very soon in Malaysia and Singapore.

Also, an interesting comment I heard is that the rapid development of Thailand as an automotive manufacturing hub and the most popular tourist destination in the region is largely due to the policies of ousted PM Thakshin Shinawatra (in spite of his corruption charges). What else would you expect from a business savvy former CEO of a telecoms giant? It is a controversial thing to say particularly to Thai society elites and large private enterprise business owners. Thailand's direction as an automotive hub is a little less clear under current PM Abhisit Vejjajiva. Still, it is a lot better than the clueless Malaysian government and their misguided open-AP and National Automotive Policies.

Toyota's Solution to Floor Mat Recall - Plastic Zip Ties

An update from an earlier entry regarding the floor mat recall on North American market Toyota and Lexus models. NHTSA have release a photo showing exactly how the accelerator pedal can be caught under the floor mat.

Toyota also revealed that it has came out with a semi-permanent solution - to tie down the floor mats to the driver's seat using plastic zip ties. No doubt it's a practical and cost effective solution. But I am not sure how will those Lexus drivers react when their BMW, Audi and Mercedes buddies look at their new advanced "active safety floor mat retention feature installed."

More problems for Toyota - NHTSA probes Tundra Frame Rust

Seems that quality issues for Toyota's North American market models is never ending. Following this week's massive 3.8 million cars recall in USA, due to a problem that is suspected to cause the death of 4 people in a Lexus ES, the US National Highway Traffic Safety Administration (NHTSA) is opening a probe into chassis corrosion issue affecting 218,000 Toyota Tundra trucks made between 2000 and 2001. Just less than one year ago, Toyota's US division Toyota Motor Sales had already dealt with a similar issue affecting Tacoma pick-up trucks. TMS had to buy back many 1995 - 2000 model year Tacoma trucks whose frames were severely rusted beyond repair. Some of the rust on these were so bad they were no longer driveable. In addition to that, Toyota also had to extend warranties, replace the entire frame at no charge to the remaining number of affected Tacoma models. Both the Tacoma and Tundra shared many similar components.


More images here.

In a report published by NHTSA Office of Defect Investigation, the federal body received 20 complaints, out of which 15 of them involved the spare tire being separated from the vehicle due to rust while another 5 involved broken brake lines at the brake force proportioning valve. You may read the report here.

Pickuptrucks.com quoted Brian Lyons, TMS Safety and Quality communications manager. According to Lyons, "1995-2004 Tacoma pickups and 2000-01 Tundras shared the same frame supplier: Toledo, Ohio-based Dana Holding Corporation. In investigating the Tacoma’s rust complaints, Toyota discovered that Dana hadn’t properly prepped Tacoma frames to resist corrosion before they were shipped to Toyota’s NUMMI manufacturing plant, where the Tacoma was assembled."

But if there is one thing I learned from the industry when it comes to vehicle defects and recall, is to never completely trust the words of assemblers. They ALWAYS push the responsibility back to the suppliers and conveniently ignore the fact that assemblers were the ones who provided the specs, cost, and sometimes even the detail engineering and did the final part inspection and sign-off. Plus, I think pushing the responsibility squarely back to Dana Holding is surely not consistent with the "Toyota Way" of managing lean supplier chain. It sounds more like GM and their difficult relationship with Western part suppliers. The tenets of Toyota Way teaches about the 5-Why(s) of solving problems together, and if necessary Toyota would even loan their own engineers to the supplier's plant, something which is not acceptable in a typical Western context where suppliers and manufacturers operate with the mentality of "what goes on in my plant is my business." Which reminds me of Akio Toyoda's concern of how Toyota have lost its way.

Then again, this is another classic example of the bigger you are the harder you fall. Scroll through the NHTSA ODI website, there are many more equally serious safety issues involving other Japanese brands that are currently being investigated, but the media specifically choose to highlight on Toyota related defects.

Related link :
Largest Safety Recall Ever for Toyota - prompted after 4 deaths in a Lexus ES crash
Recall on China Market Toyota Camry - Defective Brakes

Jump for Joy Viral Videos - BMW vs Audi Ad Wars Revs Up

It's hard to say who started the offensive, but those "Audi vs everyone else" viral videos started getting popular in USA first with the "Meet the Beckers series." And then Audi's offensive continued with their 2009 Superbowl TV ad, which again pokes jibes at its competitors.

During the North American launch of the Audi Q5, Audi of America directed their sarcasm towards the Lexus RX.

Audi then took these cheeky ads to the sunshine state of California and started a billboard war in Santa Monica.


BMW of USA recently retaliated with its own viral video, themed "Jump for Joy," that pokes fun of Audi drivers. Have a look at it below.

What do you think?
I am still not sure of the message though. Audi drivers can't do stunts to get into their cars? Also, I am not sure why an older B7 A4 is used rather than the current B8 generation model. Too beautiful for the video? Still, it's all in good humour. I love these German automotive civil wars.

For some reason, ads are a bit more bland in Europe and Asia. BMW did try to pick a fight with Audi by putting up the ad below in Audi's hometown of Ingolstadt. Apparently, this particular billboard is located within a stone throw away from Audi's flagship Audi Zentrum store in Ingolstadt.

Even non-German speaking readers can spot the play of words with Audi's "Vorsprung durch Technik" (Advancement through technology) tagline. Freude simply means pleasure or joy. The text below "Freudde Beginnt Mit Dem Neuen BMW Z4 Roadster" simply means Joy Begins With a New BMW Z4 Roadster.

The most provocative Audi ad I have come across in Australia is one done in response to a former BMW of Australia MD's comments that Audi is not a true luxury marque because its cars are not RWD.


Personally, I think it is a good sign when a company or a team doesn't take itself too seriously and is able to look at themselves, have a good laugh over a cup of smooth German beer and then goes on to develop some of the best cars in the world. I am referring to both BMW and Audi. There is no more doubt regarding Audi's coming of age, though it has taken them longer to reach here than BMW (which have a shorter history than Audi's Auto Union lineage). Competition brings out the best of the breed. And along the way, regular folks like us get to sit on the sidelines and have a good laugh.

Related link
Meet the Beckers. Audi's viral video
Billboard War - Audi vs BMW
Transporter 3. Yes it's with the A8 again

Toyota - we are grasping for salvation. And FT-86 Concept unveiled

We are grasping for salvation.
Toyota has become too big and distant from its customers.
When you get to this level, it makes it difficult to return to profit on sales growth alone.

These are some quotes made by President of Toyota Motor Co. Akio Toyoda at a recent press conference in Tokyo last week.

In addition, he also made references to the fiery crash of a Lexus ES, whose throttle was stuck wide open, killing all 4 people inside. The topic was discussed previously in this blog.

We would like to pay our deepest condolences for the loss of four precious lives...Customers who chose Toyota and Lexus cars because those brands are safe and secure are now beset with anxiety. I regret and apologize for this development.

Below is an excerpt from a report by AutoNews.
TOKYO -- Toyota President Akio Toyoda said that the money-losing automaker is “grasping for salvation” as it struggles to return to profit.

The world's largest carmaker was once targeting annual sales of 10 million vehicles but now expects sales of 7.3 million this year, down from 8.97 million in 2008, Toyoda said at a news conference here on Friday.

Toyoda said his company is on the brink of “capitulation to irrelevance or death” as he prepares for a second-straight year of substantial financial and unit-sale decreases.

Citing the five stages of corporate decline outlined by Jim Collins, author of How the Mighty Fall, the Toyota chief warned that his company has slumped to stage four.

“We are grasping for salvation,” Toyoda said, adding that the company has already spiraled through the first three stages: Hubris born of success, undisciplined pursuit of more and denial of risk and peril. Read more here.

Acknowledging a weakness is one of the key tenets of Toyota Way, one that is often often preached to the production line operators and low ranking executives, but unfortunately rarely practised at the higher levels where it matter the most. Prior to his ascension, Akio Toyoda have been known to have been very critical of how Toyota have "lost its way" in its quest to become the largest car company in the world. Previous TMC President Katsuaki Watanabe have always denied TMC's quest to be No.1, saying that Toyota is not interested in a purely numbers game, something which is in direct contradiction to Toyota's effort to rapidly ramp up production sites and capacities around the world. A miscalculated move which made Toyota overly exposed to the current recession and leaving the company with far too many excess capacity, relative to its other Japanese brand compatriots. The young (young here is used relative for Japanese standards; Akio Toyoda is pushing 53 years old this year) Toyota scion's courage to acknowledge a weakness should be applauded.

In the article linked above, Akio Toyoda made some references to Jim Collins' book How The Mighty Fall. Below is a summary of the 5 stages of decline explained in the book.

STAGE 1: HUBRIS BORN OF SUCCESS
Great enterprises can become insulated by success; accumulated momentum can carry an enterprise forward for a while, even if its leaders make poor decisions or lose discipline. Stage 1 kicks in when people become arrogant, regarding success virtually as an entitlement, and they lose sight of the true underlying factors that created success in the first place. When the rhetoric of success ("We're successful because we do these specific things") replaces penetrating understanding and insight ("We're successful because we understand why we do these specific things and under what conditions they would no longer work"), decline will very likely follow. Luck and chance play a role in many successful outcomes, and those who fail to acknowledge the role luck may have played in their success—and thereby overestimate their own merit and capabilities—have succumbed to hubris.

STAGE 2: UNDISCIPLINED PURSUIT OF MORE
Hubris from Stage 1 ("We're so great, we can do anything!") leads right to Stage 2, the Undisciplined Pursuit of More—more scale, more growth, more acclaim, more of whatever those in power see as "success." Companies in Stage 2 stray from the disciplined creativity that led them to greatness in the first place, making undisciplined leaps into areas where they cannot be great or growing faster than they can achieve with excellence—or both. When an organization grows beyond its ability to fill its key seats with the right people, it has set itself up for a fall. Although complacency and resistance to change remain dangers to any successful enterprise, overreaching better captures how the mighty fall.

STAGE 3: DENIAL OF RISK AND PERIL
As companies move into Stage 3, internal warning signs begin to mount, yet external results remain strong enough to "explain away" disturbing data or to suggest that the difficulties are "temporary" or "cyclic" or "not that bad," and "nothing is fundamentally wrong." In Stage 3, leaders discount negative data, amplify positive data, and put a positive spin on ambiguous data. Those in power start to blame external factors for setbacks rather than accept responsibility. The vigorous, fact-based dialogue that characterizes high-performance teams dwindles or disappears altogether. When those in power begin to imperil the enterprise by taking outsize risks and acting in a way that denies the consequences of those risks, they are headed straight for Stage 4.

STAGE 4: GRASPING FOR SALVATION
The cumulative peril and/or risks gone bad of Stage 3 assert themselves, throwing the enterprise into a sharp decline visible to all. The critical question is: How does its leadership respond? By lurching for a quick salvation or by getting back to the disciplines that brought about greatness in the first place? Those who grasp for salvation have fallen into Stage 4. Common "saviors" include a charismatic visionary leader, a bold but untested strategy, a radical transformation, a dramatic cultural revolution, a hoped-for blockbuster product, a "game-changing" acquisition, or any number of other silver-bullet solutions. Initial results from taking dramatic action may appear positive, but they do not last.

STAGE 5: CAPITULATION TO IRRELEVANCE OR DEATH
The longer a company remains in Stage 4, repeatedly grasping for silver bullets, the more likely it will spiral downward. In Stage 5, accumulated setbacks and expensive false starts erode financial strength and individual spirit to such an extent that leaders abandon all hope of building a great future. In some cases the company's leader just sells out; in other cases the institution atrophies into utter insignificance; and in the most extreme cases the enterprise simply dies outright.

You may read further on Jim Collins' book here.

But as I have said previously in other entries, the best thing for Toyota is for other competitors, particularly Western car makers in USA and Europe and even Korea to under estimate Toyota. Like every large organization with operations spanning across the globe, Toyota have its own shortcomings. It's just that due its sheer size, Toyota attracts more attention and scrutiny and as the saying goes "the bigger they are the harder they fall." The fact Toyota now have pragmatic chief of staff with enough conviction to call a spade nothing but a spade and get on with solving the problem should allay many concerns. I think Toyota is far from becoming irrelevant. There was once a joke that Toyota's war chest is big enough for it to afford to buy over all major automakers if it really wants to.

Oh and by the way, Toyota did address an issue regarding its boring image - the company have recently previewed the FT-86 Concept ahead of the Tokyo Motor Show on Oct-24 2009. The FT-86 Concept is a thinly veiled successor to the legendary Toyota Trueno / Corolla Sprinter AE86 in the 80s. The AE86's timeless appeal would later extend its appeal beyond Japanese tuners and drifters to become a mainstream cult car in the late 90s after being used as a key character in the hit anime series Initial D. Though I think credit should also be given to previous TMC President Katsuaki Watanabe, who headed the company when the project was commissioned.


The car was previously commonly referred to as a 2-door Toyo-baru sports car, due to the project's joint development with Fuji Heavy Industries automotive division and boxer engine specialist Subaru.

The FT-86 Concept was designed in Toyota Motor Europe's ED2 design studio in France. It will feature a 2.0-litre four cylinder boxer engine from Subaru, with turbocharging rumoured to be considered. Like its AE86 predecessor, it will adhere to a traditional sports car front-engine and rear wheel drive configuration with a long-nose and a short tail body. Price will be below USD20,000 dollars or JPY 3 million yen. The vehicle will be manufactured by Subaru.


According to chief engineer Tetsuya Tada, the car will be built from a completely new bespoke chassis, to appeal to enthusiasts who dislike shared platforms. A new blue-red metallic paint was also developed specifically for this car to express its sporting intentions better. According to Tada-san, the colour developed is shoujyouhi red colour, which is a traditional red color of a Japanese monkey's backside. Normally I dislike a lot of PR rubbish in press releases, but the last part do concern me a little. Hopefully Toyota's PR guys will give the rationale a nicer spin to it rather than erm...monkey arse.

Related link:
The Infallible Toyota and Lumbering GM? Think again
Akio Toyoda - Toyota president who doubles as a race car driver