One of the central parts of Toyota’s lasting success is its methodical approach to business. The company studies markets, seeks to understand fundamental consumer needs and carefully examines competitors’ products and business strategies. Toyota then synthesizes that knowledge to create a satisfying experience for its customers. As Toyota sought to increase its presence in the coveted U.S. market, it applied these principals to drive sales and market share. Just like the Toyota cars themselves, the approach wasn’t flashy or revolutionary, just impressively effective. In July 1968 Road Test dedicated an issue to Toyota, and covered in depth the company and its philosophy. The articles provide an early look at Toyota’s approach, as they laid the groundwork for becoming a powerhouse in the U.S.
In its push to enter the U.S. market, Toyota had to carefully examine one competitor that had done phenomenally well in attracting American economy car buyers. That company of course was Volkswagen. Without a doubt, the U.S. market was hungry for a small, economical, affordable car, even as postwar prosperity took hold and Detroit made its chariots ever bigger and fancier. VW took its “people’s car” to the U.S. to fill that void.
One of VW’s best decisions was to hire Doyle Dane Bernbach, the New York City-based Ad Agency. The advertising that was created was arguably some of the most effective ever produced. Imagine the creative brief the Agency received: “ we need to sell a car developed in the 1930s at Hitler’s behest, which is underpowered, ill handling and lacking in basic creature comforts like effective heat. But, hey, at least it is well built!” Talk about a tough challenge…
The resulting campaign brilliantly positioned the VW’s weaknesses as strengths, and in the process gave a counter-cultural middle finger to Detroit and its “bourgeois values.” It was the perfect brand positioning as America entered the culturally turbulent 1960s and the first of the Baby Boomers started getting cars. VW’s sales went through the roof, and soon the distinctive flatulent engine sound emanating from the back of Bugs was common from coast to coast.
VW was able to build a comprehensive dealer network to handle these sales and service needs, and thus VW became the “establishment” import. No other import brand—and there were many in the U.S. by the late 1950s—could even come close to matching VW’s strength.
So how would Toyota’s story be different than the other importers who had tried and failed to emulate VW’s success? Simple. By carefully exploiting consumer needs that were still unmet, Toyota brought in a range of cars designed to offer Americans the features and styling that they had come to expect, effectively packaged into a smaller car, with build quality that was every bit as good as anything on offer from Volkswagen.
“When in America, make cars that sell to Americans.” This was a critical part of Toyota’s strategy, and one they learned through trial and error. When cars like the Tiara did not meet market needs, Toyota adjusted, since their belief was that the “market was always right.” This was in sharp contrast to European import rivals, who felt that if a product was acceptable in their home market, then it should be acceptable anywhere.
Once Toyota mastered the formula for success in the U.S. market with the Corona, they were then able to begin a deeper expansion, both by adding models like the Corolla as well as adding a significant number of dealers.
Arguably, U.S. manufacturers were not applying the right approach to the American small car market in 1968. The economy offerings from Big Three plus AMC were too large and/or too pricey to effectively target a broad base of frugal shoppers. Even when the size and price of the product offerings were right, as in the case of the Cortina and Opel, the distribution strategy was flawed. These small cars were seen as “second fiddles” at Ford and Buick dealers, many of whom disregarded the economy car buyer and preferred instead to concentrate on steering customers into bigger domestic cars.
Due to the gap in effective domestic dealer coverage for the small car buyer, coupled with careful study of the dealer strategy used by European imports including VW, Toyota was able to craft a methodical—and effective—distribution strategy for the U.S.
Toyota set comprehensive standards for dealer performance, and instituted measurements on sales and service satisfaction to ensure that customers would likely be pleased with their Toyota experience. As part of the Japanese continuous improvement mantra, the dealers were given plenty of feedback on their performance and thoughts on how to improve their service and operations.
One key element to ensuring that dealers would listen to feedback was targeting “younger and hungrier” dealers. These businesspeople may not have been as well established in a marketplace, but Toyota felt they would work harder than a wealthy absentee owner to please customers and gain success. Thanks to this approach, Toyota dealerships were soon seen as a ticket to the American dream.
For aficionados of classic American Literature, John Updike captured this phenomenon in his “Rabbit” series, where Harry Angstrom’s father-in-law became rich by opening up a Toyota dealership in Pennsylvania. It was a fantastic way for Toyota to rapidly become integrated in local markets around the country. They had no trouble rapidly opening dealerships in all 50 states (by 1968, for example, my hometown of New Orleans had 3 Toyota dealers serving the metro area), though each dealer did have to meet Toyota’s relatively high standards.
In return for demanding focused performance from dealers, Toyota provided extremely high quality cars. As part of Japan’s emergence from WWII and into the global economy, Japanese companies (and the Japanese government) had decreed that high quality products, across all industries, was the best way to overcome the then-present stigma of “made in Japan” meaning cheap, inferior goods. For motor vehicles, Toyota’s motto became “quality products based on good ideas.” Seems obvious today, but that’s not likely a saying you would have heard in Wolfsburg or Detroit in 1968…
No matter how good the product quality, however, there would always be a need for service. Training was seen as an essential ingredient, and Toyota focused on teaching people to be “service technicians” rather than just being “mechanics.” While the training program started small, with just one instructor, it was geared to flexibly meet the needs of students. Like Toyota itself, the goal was to start small, do things right, and grow from there.
So how did Toyota actually perform as far as the service technicians were concerned? To find out, Road Test interviewed George Wagner, the Service Manager for Len Sheridan Toyota in Santa Monica, CA. Wagner had previously worked for a domestic brand, so he was well positioned to compare Toyota with what he had experienced previously. His feedback was positive: he had ample praise for the quality of the products, the ease of servicing components as well as the speed in getting needed parts. For Toyota, even in 1968, the ‘back of the house” experience and how the customer felt after the sale, were just as important as the initial sale.
With a philosophy of product excellence, an ear for hearing market/consumer needs and an eye for detail, it is little wonder Toyota did so well so fast. While it all seems like common sense, it is actually rather rare even today. But Toyota still practices what they preach, though they have now grown into being a central part of America’s automotive landscape. Thanks to this long-term strategic thinking and customer-centric business approach, what started as big dreams in 1968 is a pleasant reality for Toyota today.
Building from the customer outward. Makes sense
to me! As long as they listen to us handling fanatics
once in a while.
Toyota did listen, here anyway. They put said critic in charge of making their cars handle properly, who else hires a Grand Prix and Can Am star to re-engineer their cars to suit the local market?I had an Amon tuned Corona a 93 2L sedan it could easily out corner most other cars on the road it sat flat on turns no understeer and you could flick the tail out if required, great car galvanised body so no rust shoulda kept it but I went to a 406 which rode and handled better and used a lot less fuel doing it.
Kiwi:
Thanks for sharing! Yeah, I’m one of those few
out there who considers good basic handling
characteristics to be one of the top safety
elements in any decent car. That, being able
to see out of the thing in the first place, mirrors
that allow for proper BGE set up, and of course,
the biggest safety feature – the one behind the
wheel. 🙂
If one word can describe the Japanese attitude toward marketing cars & other things, it’s humility, having a genuine willingness to learn from employees, sellers, & customers. Nothing is more dangerous than believing your own corporate PR that you’re a benefactor of mankind.
I was always under the impression that manufacturers “bought” themselves an issue of Road Test to use as a sales aid. In the half dozen or so issues that I have seen, they all heaped high praise on whatever car was featured, including Rover and Renault.
What was the deal with them?
Good question, I’m not actually sure. I think you could be right about the sales aid, but I know the issues were also delivered to subscribers. Thanks to Hemmings, I purchased my Road Test collection from a guy who’d originally received all the issues. The special issues seemed to replace a “regular” issue for that month, much like their Sports Car issues, etc. Toyota was covered most frequently in the special issues, but as you note, Renault and Rover got them too. Road Test tended to heap praise on these same cars in their regular issues as well, so while the special issues were much more comprehensive on the makes in question, the tone of the coverage was similar to the rest of their write-ups in regular issues. Of course at the time, there were no legal requirements to identify commissioned editorials as “paid content” so it’s tough to say if it was totally “bought” or more legitimately independent. No matter what, I’m sure Toyota (and the others) were thrilled with the issues and would have used them extensively in their marketing.
Toyota, like any company that survives for some time, listens to the customer.
But, It’s not like the U.S. Domestics never did or do listen. But, sometimes they don’t and have missed the boat. Sub compact cars is the place they really missed. Particularly ironic considering Ford and GM’s European products in the ’50s and ’60s.
VW made inroads in the U.S. because it was consistently the best in a fleet of generally craptastic imported sub compacts. Once they emerged as a leader, that allowed them to have a significant dealer network that made their cars consistently cheap and easy to repair. No other import had such a reputation until…………
Toyota made inroads because it equaled or bettered VW’s status as least craptastic of the imports, and was not based on a craptastic design, as was the VW. And, in Southern California, which is a car market rivaling many entire countries, their products didn’t turn to rust in the first week of November. The other bit of Toyota dumb luck was that their culture has always favored somewhat Americanized designs, even in their JDM products as compared to their competitors.
Throw in a dedication to quality and continuous improvement, and the cars they sold in the U.S. eventually overcame issues with cramped interiors, propensity to rust outside a desert environment, poor AC systems, and being a frightening place to be in a collision. The Toyota of 1968 wasn’t so much a great car, but a good concept to build on that was built a bit better than its direct competition. The best 1968 car sold in the United States in terms of total concept and packaging was probably a well optioned full-size Chevy with a three speed automatic, upgraded tires, brakes, suspension, etc. Or, you could just buy a decently optioned Oldsmobile Cutlass, where GM build quality was a bit better and was well on its way to being a sales juggernaut. One place Toyota outsmarted the U.S. Domestics was that you didn’t have to tick so many option boxes to get a good car, creating a perception of value.
Today’s Camry is among the successors to the ’60s Impala and the ’70s Cutlass Supreme.
One thing that helped VW was that the Beetle was designed for high-speed driving, which worked well with the US postwar Interstate Highway System, inspired by the high-speed Autobahns.
Though in hindsight, I suspect the System’s strategic value was overstated by its Cold-War era promoters; at best they would be a refugee parking lot during a nuclear crisis, & railways were much more effective in hauling heavy military materiel. And it also created federally-subsidized competition for the federally-regulated railroads.
You are kidding?
I’ve driven several VWs from the 60s when they were less than 10 years old, they were borderline scary at speeds higher than 60-65 MPH.
And the interstate highway system still had large gaps/unfinished portions in the early-mid 70s. I used to drive between Florida and Pennsylvania in the early 70s and parts of I-95 were yet to be completed in Georgia, and both Carolinas. I came to believe (rightly or wrongly) that these states held up finishing the construction because it would mean the death of many small towns.
I didn’t mean 300SL speeds! The Kdf-Wagen was expressly intended for the Reich’s Autobahn system. Maybe Germans have more “scary driving” tolerance than we do, judging from what I saw there. No wonder their cars tend to have bigger brake discs.
Import-friendly Calif. was an Early Adopter of freeways; e.g. Arroyo Seco Parkway was opened in 1940, & I-10 near Downtown LA was built in the ’50s. That’s what I had in mind.
I had two Beetles that I drove endlessly wide open, at either 72 mph (40 hp) or 78 mph (50) hp. This was over a period of years, and over much of the country. Freeways, highways, mountains, off road, anything and everything. The Beetle was just fine at these speeds, except maybe in a very stiff crosswind.
Maybe you were used to only driving big American cars? Yes, it was a bit different than a big Chevy, but not scary.
I pretty much agree with you, except….in 1968 that Chevy with a 3 speed automatic transmission wasn’t all that common as Powerglide was still quite prevalent except on cars with the big block V8.
If I recall correctly, on the full-size Chevrolets, until 1969 the “base” V-8s were only available with Powerglide.
By 1968, I would rate a properly equipped full-size Ford as being equal to the Chevrolet, and a properly equipped Oldsmobile Cutlass Supreme as better than both.
My Dad’s ’68 Impala was a 327 Powerglide car. When the typical turnpike speed limit was 75mph, he seemed happy to cruise at 75-80.
I’ve looked for my ’68 owners manual, and of course can’t find it right now. It has all the powertrains listed. If you had to go with a 396 to get the 3 speed auto, that wasn’t all bad.
That’s sort of why I threw the Cutlass into “what was the best car sold in America in 1968.” If the Chevy was getting too big for you, the Cutlass was on the path of rightsizing. And, with typical build quality at Oldsmobile being a bit better, and the base auto tranny being a 3 speed, throw in a small 8, pwr steering, brakes, AC and a radio (preferably a stereo) and you had a competent, comfortable family car for about $4k in the top Cutlass four door trim – a good notch nicer than any 1968 Toyota.
As it should be for double the Corona’s price!
True, NLPNT. My point was that while this article and some of the comments are getting all maudlin over the 1968 Corona, We can’t forget the basic history.
The Corona was not a mainstream car, nor a particularly good car. Craptastic was probably a fair word for the first Toyotas imported to the U.S. in 1958. By 1968 it was a penalty box, econobox, or alternative to a used car . But, it was probably the best penalty box on the road and provided the buyer in Southern California with the best experience in its class. By 1968, the VW Bug may have been well built, but it was so dated that it was, in fact, craptastic. In 3/4 of the United States, you had to carry a window scraper for INSIDE your car 6 months of the year. The heater in a 1968 Hillman or Renault may have been better, but you had reliability, parts, and repair issues that would have given a Consumer Reports editor the vapours.
Just about any median priced U.S. domestic car in the $3,000 – $4,000 range provided an experience that was about as good as you were going to get in any car available on the planet. Sure, you could spend more, but did the AC in a Lincoln work any better that what you could get in an Chevrolet Impala? No. You could buy a top 1968 Mercedes or Rolls Royce, and the AC in the 1968 Impala was probably actually better.
Toyota arguably didn’t market a mainstream car by U.S. standards until the first V-6 Camry somewhere in the later 1980s.
I think what constituted a “mainstream” car was starting to shift in the late 1960s and Toyota took advantage of that change in consumer tastes. In the September 1970 issue of Car and Driver, in an article covering the arrival of the Pinto and Vega, the editors noted that 29% of ALL U.S. car sales were in the “economy” segment, with almost half of those sales going to imports. That was a BIG chunk of the U.S. market, and as C&D noted, it was more than twice the size of the “sporty car” market (aka muscle cars).
Even before the Oil Shocks, there was a move afoot to smaller cars, and smart business strategy was to make those cars as nice as possible for the price. With Baby Boomers coming of driving/buying age in record numbers, along with many more households adding a second car to the family fleet, the demand for affordable transportation was surging. Many of these buyers couldn’t stretch to get a $3,000 to $4,000 car, but that didn’t mean they didn’t want the most for their money. Detroit’s philosophy seemed to be to “punish” buyers who didn’t pony up for “more” car, while Toyota gave them lots of features for their money. That did not make the cars perfect, but for day-to-day use, the little features meant a lot, and the power and handling were sufficient to get the job done. No car in 1968 was that safe, though the laws of physics dictates that a larger car will do better in a crash than a smaller one, so the economy imports were at a disadvantage in that regard. However, a muscle car with drum brakes was probably just as lethal.
As for mainstream cars in the U.S., the 1960s’ “renegade” segment of smaller cars would soon be much closer to the core of the market. By the early 1980s Impala sales had fallen off a cliff, Olds was introducing FWD Cutlass Cieras and many of the best selling cars in the U.S. were subcompacts and compacts (both segments being predominately 4-cylinder cars). So Toyota was right in the heart of the American market long before the first V6 Camry appeared.
By 68, THM was available on small block full size (or mid size) Chevies. Not the case prior to ’68.
The page on tech instruction caught my attention. I used to teach electronics in a similar auto-oriented schoolroom. Most of it looked totally familiar, EXCEPT for the dust cover on the test rig.
In other schools a cover like that would have been lost or tossed immediately.
For Toyota, everything counts. Everything has to be right.
I think Japan has a culture of craftsmanship equal to Germany’s; I saw some shipping crates from a Japanese firm which, despite their rough finish, were joined like fine furniture & are marvelous to look at. I would be very surprised to see Americans do that.
America has often lacked skilled craftsmen, hence Eli Whitney’s “American System” of mass-production which preceded Ford. European immigrants often filled this gap.
In 1963, dad took me to the new St. Louis planetarium shortly after it opened one evening. Part of the program showed a slide show detailing the building and the projector.
When one of the slides showed the arrival of the many components of the projector, all of the crates were marked in very large stenciled letters “MADE IN JAPAN”. A lot of chuckles filled the auditorium for a few seconds! At that time, most of the cheap stuff for kids was junk made in Japan. My aunt & uncle gave me as a gift one year a Japanese transistor radio. I wasn’t laughing about that, for it was a great little pocket radio until years later I did it in by fooling around with the guts once too often.
No one laughs now when they see “Made in Japan”. In fact, it’s getting less common due to Chinese manufacturing, at least in electronics and such.
For cars, there is a Toyota & Honda complex under the same corporate banner near where I live, which is real handy for Wifey to take our Honda CR-V for servicing. A friend who is a body repairman once told me about Japanese cars: They don’t build them for the customer who buys it originally, they build it for the second & third buyers. I’m believing that more every day.
At Costco I noticed Canon SLR cameras are made in Thailand. Vietnam is another country to where Asian factories are emigrating. Hey, maybe the Greater East Asia Co-Prosperity Sphere is no longer mere propaganda, as it originally was.
Was the sludge problem “methodically planned”? or just the response of blaming the customer?
Sludge Problem. I know a customer who got a new 3.0 V6 for his Sienna due to a “sludge problem.” He admitted to me that he never changed his oil in the first 56,000 miles.
I had the same motor all the way to 218,000 and had ir checked when I had my second timing belt done. The mechanic said it looked like a new engine inside.
There were 36000 engines replaced for sludge out of 5 million produced. I’m guessing 36,000 people were idiots who infrequently changed their oil.
That’s exactly what Consumer Reports says: regular maintenance is vital on these. While it’s nice to have negligence-tolerant cars, it’s not the manufacturer’s fault if it breaks due to neglect.
Unfortunately companies have to idiot-proof their products as a defense against predatory Americans in court, hence warning labels that insult one’s intelligence, and Black Boxes which record driver behavior.
Interestingly, the Toyota dealer mentioned in the article in 1968, Len Sheridan of Santa Monica, is still in business and thriving.
In 1964, Mr. Scagnelli, a mason and member of the Sons of Italy, who had a small vineyard in his side yard bought a brand new blue Corona 4-door from the local dealer, a hardware store about 3 miles from our neighborhood, where they had about 4 cars in a side lot. The neighbors looked at his purchase with a mix of incredulity and admiration. No one had ever heard of a Toyota, and here was this clean looking, 7/8 size compact, definitely modern and up to date in the American idiom. It seemed to come out of nowhere, and it was a minor sensation. The headlights set into the rectangular grille were the most au currant feature. It didn’t lead to other neighbors’ purchases; only Mr. Scagnelli had the chutzpah to take a flyer on something so exotic. 5 years later, everything had changed.
Gotta love that 1947 SA model. A front engine Beetle water cooled, even has a split oval rear window and suicide door like the ’30’s German prototypes had.
This long, detailed series of articles is a great find and a interesting read as well.
RT: And what if a nuclear bomb were detonated on the roof of a Toyota?
WAGNER: It’d be fine.
A lot of the success of Japanese cars is because they latched onto the ideas of Deming, an American management theorist. His ideas included empowering workers in teams and specifying standards of everything and documenting and continually working together to accomplish specific goals and constant improvement. Not sure if just-in-time and group exercise and singing the company song and not laying off etc. was him or the Japanese. One thing he said was “slogans don’t work”. His ideas fit pre-existing Japanese culture, and subsequently have taken over most of auto and other manufacturing. Of course the other big change is computer everything and robots. But the early robots at GM didn’t work out because the workplace was not according to Deming ideas. His management concepts are the key, robots and computers or not.
I never thought I’d actually miss the Toyota of the 60s and 70s. When I was a boy, Toyota cars and trucks were simple, reliable and durable, and cheap to buy and maintain. but at least they were so with style that was, in my humble opinion, attractive. Today’s Toyotas, with the exception of the Tacoma and the Tundra, are hideous to look at, are more complicated, and expensive to buy, and even more so to maintain.
Car Nut Seattle:
I second that! The best Toyotas and Hondas were built
20-25 years ago. Today, they’re over-engineered, they’ve
put on a LOT of weight, they don’t handle quite like those
of years ago, and ya cain’t SEE out of ’em!
I want to FEEL the road. That doesn’t mean every crack,
bump, deck joint or manhole cover. I do appreciate a
compliant suspension that also keeps sway in check.
I just want steering that doesn’t rob me of all connection
to the road. That’s just something we’re never going
to get with EPS(electric power steering) – fuel economy
considerations be damned! Let the caster & kingpin(that’s
SAI to the modern geeks) do their job of keeping the ride on
the straight and narrow. Hear me Tokyo – and Detroit and
Seoul? I shouldn’t have to buy a BMW or Lamborghini
for what I feel are basics of good design.
I agree with you. I’d buy a 1965 Toyota Corona if I could find one in good condition and was driveable.
I would buy another 1970 Corona Mark II 2 door hardtop. Drove (should I say beat?) one in high school, early 80s. It would, however, have to be a grandpa’s car that has been in clean storage for the last 35 years…
Two doors are nice, but if I could find one in decent condition, I’d buy a 1970 Mark II four door sedan or a station wagon.