In the race to be the world’s biggest carmaker Toyota has just been pipped at the post by General Motors, which, unexpectedly, has clung to the industry’s top spot by a tiny margin. No matter: observers expect the Japanese company to claim first place this year, even if they do not expect the sort of champagne-spraying high spirits that usually accompany motoring triumphs. It’s not Toyota’s style. It plays the long game, with a reputation built on steady growth and high-quality products.

Looking ahead is paying off richly at present. Toyota stole a march on many of its competitors by launching the increasingly popular Prius, the hybrid car, which has been around for ten years. When it hit the market, environmental issues were not high on the industry’s agenda, but now, like Toyota, the Prius’s time seems to have come. It has become the most recognisable symbol of carmakers’ attempts to embrace green concerns, even if some rivals have been sceptical about the technology.

Environmental issues will dominate next week’s Geneva motor show, the industry’s leading European event, and Toyota will be in the spotlight. It is planning to field the Prius, along with its new small urban car, iQ.

Tadashi Arashima, president of European operations and based in Brussels, was surprised at how often he saw a Prius during a recent visit to London. Yet the car seems well-suited to the capital and to urban living: it escapes London’s congestion charge and gets off very lightly, sometimes completely, in local authority parking schemes that are designed to punish high emissions.

If Toyota could build more of the models, it surely would. It cannot build as many as it could sell because of constraints with the production of batteries. This year it hopes to sell 450,000 Prius and Lexus hybrids worldwide and 550,000 the following year.

The United States is the biggest market and Mr Arashima, who worked in America for several years, says: “The US is quite a diverse market. There are many people who like the trucks with the big V8 engines, but there are also people who like the environmentally friendly vehicles and so the Prius is quite a big statement.”

Toyota is wedded to the hybrid concept. At the Detroit show this year, it unveiled a plug-in vehicle that it plans to manufacture by 2010. The plug-in is a hybrid, but it can do about 18km on one charge from a household socket alone.

Some manufacturers, such as General Motors, are researching biofuels, but Toyota is not keen. Mr Arashima says: “There is a lot of controversy over biofuels. In general it is a good way to reduce CO2, no question about it, but there are still many people on this Earth starving and is it ethically right to convert corn and whatever you can eat into fuel? So we need to come up with different ways.”

Carmakers have other concerns, such as cost-cutting, making cars more affordable and moving into emerging markets. Tata, the Indian conglomerate that is poised to buy Land Rover and Jaguar, stunned many when it produced the Nano, a small car costing about £1,300. With echoes of Volkswagen’s Beetle, the Nano was designed to be a people’s car for India.

Mr Arashima says that Toyota is not aiming to build a comparable car: “No way for us. Tata Nano is an incredible idea. This is what should be, what customers need and what can be offered. If we had to do this kind of thing, it would be a major different way of thinking and we are not going there. We are looking at environmental performance, comfort, safety, those sort of things. Those are where we concentrate our efforts. We are going into emerging markets, but with a $10,000-$13,000 car, not $2,500.”

Toyota’s latest venture in emerging markets is a new factory in Russia, where Mr Arashima believes there is the potential for enormous growth. The St Petersburg plant is ramping up its production line to begin manufacturing 20,000 cars a year from this spring. Growth in Russia – which has a small proportion of car owners among the 140 million population, an emerging middle class and a relatively old vehicle fleet – and Eastern Europe will balance any stagnation in Western Europe, Mr Arashima says.

Like all carmakers, Toyota has to struggle with fluctuating currencies. Several years ago it was one of the most powerful advocates of Britain joining the euro. Mr Arashima laughs at the thought of reviving the campaign. “Well, we don’t say any more about that. Certainly it is much easier if the UK is part of the euro, but we don’t strongly lobby,” he says.

In the foyer of the Brussels offices a Formula One car symbolises Toyota’s long-term involvement in all forms of motor sport, helping it to earn a reputation for technical development. Now that the green flag is being waved, Mr Arashima sees no conflict with continuing to pursue the chequered version.

“Day-to-day cars have to be reliable, good-quality and environmentally friendly. But at the same time there is a huge emotion to driving the cars and racing. This aspect is undeniable. We like to offer the fun element,” he says, somewhat sheepishly considering the marque’s Formula One performance last year, when it often started towards the back of the grid and rarely finished in the points. “I don’t even want to talk about it. But maybe this year.” Most would consider the likelihood of Toyota becoming the world’s largest carmarker a much safer bet.



CV

Born: 1949, Ise City, Japan
Education: Graduated in Political Science from Keio University, 1973
Career:
1973: began in the North America division of Toyota, but based in Tokyo.
1977: moved to California with Toyota Sales.
1983 to 1989: helped to launch Lexus in Japan.
1990: returned to California, in a sales and marketing role.
1993: vice-president corporate planning in United States.
1995 to 1997: production control division in Toyota City in Japan.
1998: general manager of marketing for Europe and Africa.
2000: vice-president of marketing, Europe.
2003: president of marketing, Europe.
2006: president of Toyota Europe
Family: Married to Sachiko. They have two sons

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