(FORTUNE Magazine) – You'd have a hard time picking Jim Press out of a lineup of auto executives. Middle-aged, with graying hair, slightly stooped--he's nobody's idea of a bigtime car guy. Press doesn't stand out on anybody's org chart either. He's buried among dozens of other executives in the upper levels of Toyota's corporate bureaucracy. His full title is executive vice president and chief operating officer, Toyota Motor Sales USA, which means he's the No. 2 man at the Stateside division of a large Japanese company.

And yet Jim Press arguably has as much influence over the course of the American auto industry as anyone else alive.

In large part, that reflects the power of the company Press works for. Toyota is becoming every bit as dominant as Ford was with the Model T in the 1910s and '20s, and General Motors in the 1950s and '60s with Chevrolet and Cadillac. The company is on course to earn more money this year than GM, Ford, DaimlerChrysler, and Volkswagen combined. For the three months ended June 30, profits at Toyota rose a stunning 29%, to $2.6 billion, at a time when its competitors were struggling. Toyota's global market share has passed 10%; the company's stated goal is to reach 15% by the end of the decade, which would put it on a par with GM.

In Toyota's empire, no flag flies higher than America's. While U.S. sales for the rest of the industry meander along, Toyota's have risen 11.1% ahead of 2003. Analysts believe North America contributes more than half of Toyota's profits and perhaps as much as three-quarters. Net revenue from the North America unit amounted to $46 billion in the fiscal year ended March 31; if it were an independent company, the division would rank 25th on the FORTUNE 500. Consumers covet Toyota cars and trucks above all others, according to buyer surveys. Lexus dealers are second only to Porsche's in terms of gross profits per car. Toyota's cars outsell Ford's and Chevrolet's; and with Lexus and the new Scion brand, Toyota outsold Chrysler, Dodge, and Jeep last month. The Camry is still the bestselling car in America.

But Press is also influential because of his stature within Toyota. If the world-beating company were Admiral Nelson's navy, Jim Press would be the trusted commander of the flagship squadron. He gets inside the minds of the American car buyer, distills what he's learned, and interprets the results for the product planners and engineers in Japan. Then comes the most delicate part of his job: badgering his employers into making vehicles that will sell in the U.S., such as the redesigned Sienna minivan, the hybrid Prius, and the new entry-level Scion line. Reconciling the fickle tastes of the world's richest consumer market and the unyielding perfectionism of the world's most profitable car company is no simple matter, especially for an executive without CEO authority. But Press has a rare blend of attributes: He has a feel for his countrymen's tastes, and he's a 34-year Toyota veteran who has mastered his employer's internationally worshipped engineering and manufacturing systems. That combination gives him enormous clout inside Toyota--which in turn gives him enormous clout in the U.S. auto industry.

An excellent example of how press works is Toyota's success with hybrids, those gas-and-electric-powered cars whose popularity has soared along with gasoline prices. Honda got to the U.S. market first with the Insight in 1999, but Press appropriated its clean-machine crown almost without Honda's knowing it. When it came time to create second-generation hybrids, Honda used a conventional Civic body while Press championed a futuristic design change so that people would notice the technology. Customers, including some Hollywood celebrities--the Prius stole the limelight at this year's Academy Awards--wait up to six months to get one. When dealers clamored for more cars, Press pushed Toyota to boost production. It did: Toyota will up supply by 50% for 2004, and Press wants most of that increase for the U.S. Globally, Toyota president Fujio Cho says the company aims to sell 300,000 hybrids in 2005. (For more on hybrids and their role in reducing our dependence on oil, see cover story.)

Raising Lexus to become the top luxury brand is another trophy on Press's mantel. Press took charge of the division in 1995--he'd had a job in corporate planning--and arrived in a crisis. Lexus's product line was aging, the rising yen had driven up prices, and the Clinton administration was threatening a tax on imported luxury cars. Press invented a new market: luxury SUVs. Executives in the U.S. and Japan debated whether to wait until a new vehicle could be developed or to enter the market right away with an upgraded Toyota Land Cruiser. Press decided on the latter strategy because he wanted to be first to market, and the LX450 turned out to be a solid success. By the time luxury competitors like Mercedes and BMW started rolling out their own SUVs--after having said they would never consider putting one in their lineup of exclusive cars--Lexus was introducing its second-generation model.

Press followed that victory by expanding Lexus's move into crossover SUVs. He redefined the category by pushing for an all-wheel-drive vehicle with a more carlike ride. The resulting vehicle, named the RX300 (now the RX330), was built on a passenger-car platform instead of a truck's and became an immediate hit. It now outsells every other model in the Lexus line.

A more recent success is Scion. Targeting the youth market has been a fool's game for several manufacturers. Toyota's effort started off slowly with a group called Genesis, assigned to figure out ways to nab younger buyers. But the project never gained traction, partly because Genesis repackaged existing models like the stumpy Echo, which attracted more parents and grandparents than it did their children.

So Press tried a new tack. He knew Toyota had developed and begun selling a pair of small but distinctive models in Japan. Would Americans buy them? Press and others gambled they would and arranged to have them exported to the U.S., branded as Scions. To distribute them, he decided not to burden dealers by setting up a separate channel a la Lexus. Instead, starting in 2003, he put Scions in new showrooms carved out of existing Toyota dealerships, appropriately staffed by hip young salespeople. Scion has quickly become wildly popular, blasting by its original target of 100,000 in annual sales.

Press can take personal credit for the success of the tC, the Scion brand's sporty coupe and first model to be developed specifically for the U.S. market. Scion boss Jim Farley says, "Jim fought battles in Japan during the day, and went to sake parties with the engineers at night. He insisted that Scions have high-quality materials like aluminum trim instead of cheap plastic."

Despite his track record, press is mostly unknown even in the car industry. Detroit's motor men seldom pay attention to what goes on at the import companies (although you'd think they would have learned by now). Besides, Toyota products are so bulletproof that they're assumed to sell themselves, and Press hates to toot his own horn. "Jim Press is soft-spoken, thoughtful, extremely intelligent, and humble," says analyst George Peterson of AutoPacific. "Those traits are rare among senior automotive executives."

The low-key approach, however, is essential to Press's modus operandi. At Toyota there's constant tension between American executives, who want larger engines and more horsepower to appeal to U.S. customers, and Japanese engineers, who focus on smaller engines that consume less gasoline. The engineers pride themselves on their efficient use of space and have an inherent aversion to anything that appears wasteful and inefficient. Press has been fighting those battles for years with persistence and determination, and he has won some notable victories.

For example, in the mid-1980s Toyota tried to create the perfect minivan. It would be an engineering marvel. The result was the 1991 Previa, which, among other design quirks, had an engine located between the front and rear seats. The design delighted engineers, but the big hump in the middle of the van made it hard to move between rows of seats, which annoyed consumers. Press persuaded the company to just make what people wanted: a big box with three rows of seats and lots of cup holders. The first Sienna came out in 1998, but it wasn't big enough and didn't sell particularly well. The redesigned 2004 model got the dimensions and cup holders right and has become a huge hit. In fact, it has singlehandedly reversed a long decline in the overall minivan market.

Press pulled off a similar move in pickup trucks: Timid early entries, a couple of underpowered misfires, and some 2006 models brawny enough for American buyers. "It has been difficult for the company to risk entry into the truck market without any ingrained knowledge," he says. "Getting them up to U.S. standards has required patience and understanding."

Patience and understanding happen to be Press's long suit. He certainly gets enough practice on the job: He arrives at his office in Torrance, an industrial suburb of Los Angeles, at 5:45 in the morning and doesn't head home un-til 9 p.m. Lunch hours are spent swimming laps in the company pool; weekends are for triathlons and long-distance ocean races.

Press divides his time between the U.S. and Japan, where he spends two weeks a month. Last year he was named one of 44 managing officers--one of five non-Japanese to hold that title. Toyota's honorary chairman, Dr. Shoichiro Toyoda, told associates that the meetings in Japan wouldn't be the same without Press because he is a "force for change." The managing officers oversee Toyota's global operations and are one rung below the board of directors. Although he's learned some Japanese, Press is accompanied to the meetings by an interpreter. He says the meetings are productive and the company reacts quickly, which would surprise observers who view Toyota as competent but slow moving. The 11-hour plane trips over and back can be wearying but, says Denny Clements, head of the Lexus division, "that's where you've got to go. What Toyota does exceedingly well is listen, and they listen better when you are there."

Press's work habits are a reflection of the corporate culture he's inhabited for the past three decades. This is a deeply paranoid company--there's a pervasive belief that everything could go horribly wrong at any moment. The merest hint of a problem--any problem--instantly registers on the corporate radar. When Toyota's longtime lead in quality over all its rivals began to narrow in the past year, it immediately began to reexamine all manufacturing and engineering processes. Some young buyers, for example, complained about weak air conditioners in one of the Scions. Any other car company would kill for problems as minor as that. Nevertheless, Toyota flew 25 engineers to the U.S. two weeks later to devise a higher-capacity system.

Gasoline has been pumping through Press's veins practically since birth. Born in car-crazy California, he moved at age 7 to Kansas, where his uncle owned a Chevy dealership. Press drove a Go Kart for the first time the same year, and soon made his own. When he got older, he bought a Go Kart kit from an ad in Popular Science magazine, assembled it, and started racing. By age 13, Press was working as a car washer at his uncle's dealership and fixing up old cars on the side. At local drag strips, he began racing a heavily modified 1955 Chevy.

Press graduated from Kansas State University in 1967 with a marketing degree and took a job with Ford Motor in district sales. Three years later he followed his boss to Toyota, then still primarily a small-car company selling 300,000 units a year. That was when Detroit launched its own small-car offensive--the Chevy Vega and the Ford Pinto. Press was undeterred; he thought he could learn more at a smaller company where he would have the opportunity to work different jobs, and he had every intention of going back to run a dealership.

He never did make it back, but he never lost his appreciation for retail either. Most auto executives would like to ignore dealers because they stand between the factory and the car buyer and they don't do what they are told. Press, however, constantly mines his dealers for insights about the car market. "The strength of this company is its relationship with the customers, and dealers are our lifeblood," he says. "They see problems, issues, changes. If we do something wrong, they get bruised." Tales of Press's dealer visits are legendary. He skips past the new-car showroom and heads straight for the back shop, talking to everyone from technicians to receptionists. If he hears about a problem, he jots it down for action later on. That's a lesson from an old Toyota principle: Go and see--experience it for yourself.

Surprisingly, all this dealer focus hasn't raised Toyota's customer satisfaction scores. With their cars in hot demand, Toyota dealers sometimes treat customers as if they--the dealers--are doing them a favor, and they rank well below average in J.D. Power's surveys. Toyota executives concede there is a problem with customer service and say they're dealing with it. The main cause of the problem is simply that dealers have grown too fast--Toyota dealers have the highest sales per outlet of any brand in the country.

Fast growth is a nice problem to have, of course, but it's not one Toyota will have to suffer forever. Since joining Toyota in 1970, Press has watched its sales grow sixfold, a feat that will be pretty much impossible to duplicate in the future now that Toyota sells a car or truck in almost every vehicle category except full-sized vans. Michigan consulting firm CSM Worldwide expects Toyota's North American market share to climb gradually over the coming years, from 10.6% in 2003 to 12.6% in 2009.

But slower growth doesn't mean no growth, and in classic Toyota fashion, Press lays out a detailed map of opportunity. He notes that 63 million young people will reach driving age during this decade, which will translate into four million new-vehicle sales by 2010 and 62 million by 2020, and he intends to get more than his share. One way is by expanding the coverage of Toyota's dealer network. Although it enjoys strong market penetration along the coasts, it is underrepresented in the Midwest and the Mountain states.

Even if Toyota can't cover more product segments, it can fill some niches. One is in full-sized trucks. Toyota won't really have a serious entry in that category until the new San Antonio plant starts producing 150,000 new Tundras annually, and Press and his minions are rubbing their hands in anticipation. They will finally have the opportunity to develop enough truck variants--regular width and superduty, gasoline and diesel engine--to allow the company to catapult sales from last year's 100,000 units to a number closer to the one million big pickups that Ford expects to sell this year.

Lexus has room to grow too. Despite a lack of new models, it's had record sales for the past 16 months. Toyota has positioned Lexus for higher sales by making the styling of future models more elegant, and challenging the Germans for technology bragging rights. On the next-generation GS 300, for instance, computers will sense when the car is going into a skid and make adjustments to the front wheels, accelerator, and brakes to help correct the car's path. Press is still struggling with whether Lexus should develop a $100,000 flagship to compete with top-of-the-line Mercedes, BMWs, and Audis, and whether the new car should be a big sedan or a hybrid-powered sports car.

Press now believes that it will be another ten years before fuel cells make an impact. He likes to say that, taking into account the energy needed to produce hydrogen for fuel cells, hybrid cars are just as efficient "well to wheel." Meanwhile, he'll be attempting to tighten his hold on hybrid supremacy early next year with the introduction of the Lexus RX400h, the electric-gasoline version of the popular RX330 SUV. Besides being the first hybrid marketed under a luxury brand, the vehicle will be marketed not just as a cleaner version of the existing model but as a better-performing one too. Toyota will be promising V-8 performance with four-cylinder fuel economy squeezed out of a V-6 engine--and it's betting customers will be willing to pay a premium. Lexus dealers have already accepted 7,000 paid orders.

As Press describes his plans, you have to wonder what he thinks of his own career trajectory. Here's a guy who could clearly run his own show. But as an American, he's a perpetual outsider with zero chance of ever getting the top job at Toyota. He professes to have no problem with that. "As I've gained insight and experience, I've realized it wouldn't be practical for me to fill that role," he says, stating the obvious with typical diplomacy. "And to be honest, it is far more rewarding, productive, and fun for me to be involved with U.S. operations, where I can be closer to the market, the dealers, the products, and everything that's happening here." Loosely translating from the Japanese, that means he's already got a battlefield with plenty of action, thank you very much.