Toyota envy
Why the world's most successful automaker gets so much grief -- and why it doesn't deserve it.
By Alex Taylor III, FORTUNE senior editor

NEW YORK (FORTUNE) - Always the subject of backbiting and criticism from its rivals, Toyota could be excused these days for feeling as if it has a larger target than usual painted on its back. The more successful it becomes, the more flack it gets.

Lately, the volume and intensity have been increasing. Opponents use a familiar tactic: They take a fact that supposedly puts Toyota (Research) in a bad light and then use that to build an entirely spurious argument. The latest examples:

Hybrid backlash
Robert Wegman led Wegmans like the up-from-the-trenches grocer he was, with merchandising innovation and an employee-friendly focus. (Read the column)

Weak sales of Ford's Escape hybrid and Honda's (Research) Accord hybrid have caused some journalists to roll out the old canard that hybrid gas-electric vehicles will never succeed because they don't pay for themselves. The reasoning: Buyers will never recoup in fuel savings the extra money they laid out for the electric motor.

The equation will certainly change as the price of gasoline zooms past $3 per gallon. But people buy hybrids for a variety of reasons, including being the first on their block with a new gizmo and doing good for the environment.

Toyota marketing addresses those differences by pitching the Toyota brand to tree-huggers and Lexus hybrids to performance seekers. The new GS 450h supposedly goes as fast as a Porsche 911 and still gets 23 miles per gallon. And if anybody cared to look, Prius hybrids are still moving off dealers' lots at a rapid pace.

As one Toyota spokesman pointed out, "People will never save enough money on paper maps either, but they are still willing to pay $1,000 for a navigation system."

Excessive ambition

This fall, Toyota starts production of its latest fullsize pickup truck. Judging from the auto-show concepts, Toyota got it just right. But critics have noticed that rival Nissan was forced to back down from its aggressive production plans for a fullsize truck and they figure Toyota will have the same problem.

They attribute it to the stubborn loyalty of Ford (Research), Chevy, and Dodge truck buyers, who seem to have their brand affiliations tattooed on their skin. So they whisper that Toyota is being far too ambitious by planning capacity to make 300,000 trucks -- more than half again as many as Toyota sells with its current truck.

The boo-birds seem to forget that Toyota controls twice the U.S. market share of Nissan, indicating a huge body of satisfied buyers who are likely truck customers. They also ignore Toyota's sterling reputation for quality and durability, which has earned it a unique position in the market. You simply can't compare the resonance of the Toyota brand with Nissan among U.S. customers.

Creeping arrogance

Journalists love to seize a single fact or incident and inflate it out of proportion. So when the executives unveiled the new Toyota flagship, the LS600hL, at the New York Auto Show in April with some legitimate trade puffery, they jumped on it as a sign of the pride that comes before a fall.

Most notably, the event unleashed a diatribe from influential auto blogger Peter DeLorenzo. "Toyota's press conference for the new Lexus LS600hL was one of the most embarrassing displays of unbridled arrogance ever unleashed by a car company," he wrote.

"The tone, the language and everything about the presentation confirmed to me that the 'creeping' arrogance that has been brewing at Toyota for years has finally blossomed into full bloom for everyone to see. Toyota not only hinted that the 600hL would be the best car in the world, they came right out and said it - and the tone they used suggested that there was no need for us to attend any other manufacturers' press conferences because we had just witnessed the only newsworthy event at the show. These people are headed for a big fall, but predictably, they will be the last to see it coming."

We'll see. When it announces year-end earnings on May 10, Toyota is expected to report a 12 percent gain in revenue and an 11 percent gain in net income - more than enough to secure its position as the world's most profitable automaker. That should be enough to keep it on top of the automotive pecking order for a while longer - and perhaps get the critics to shut up for now.

Plugged in is a daily column from writers of FORTUNE magazine. Today's columnist, Alex Taylor III, can be reached at


Think your car has cool gadgets? See FORTUNE's gallery of cars that drive themselvesTop of page

Follow the news that matters to you. Create your own alert to be notified on topics you're interested in.

Or, visit Popular Alerts for suggestions.
Manage alerts | What is this?