A wholly owned subsidiary of Toyota Motor Corporation, Toyota Motor North America is the holding company for all of its parent's North American operations, covering sales, engineering, and manufacturing subsidiaries from offices in New York, Miami, and Washington, DC. It oversees functions related to government and regulatory affairs, energy, economic research, philanthropy, advertising, corporate communications, and investor relations. Through its manufacturing operations, Toyota Motor Engineering & Manufacturing North America, Toyota builds vehicles and parts at a dozen plus plants in North America. Toyota has invested more than $18 billion in its North American operations, which began in 1957.
North American drivers, which constitute almost 30% of Toyota's automotive sales, are (next to the Japanese) the carmaker's most significant market. Toyota's year-over-year automotive revenues declined in 2009 and 2010, largely eroded by North American purchases, which dropped by 34% and 8%, respectively. Nevertheless, the company managed to turn the losses suffered by its North American automotive operations in 2009 around in 2010.
The economic recession and resulting collapse in the automotive industry have hurt Toyota; however, its massive recalls have contributed to the car maker's weak performance. The company recalled more than 1 million cars for an engine defect and about 2 million cars in 2010 in addition to more than 4 million cars recalled in November 2009, to address faulty accelerator pedals and other related safety issues. In addition, Toyota temporarily halted the production and sales of eight of its most popular US models in early 2010, idling five North American assembly lines located in the US (Kentucky and Indiana) and Canada. The eight models represented more than 55% of Toyota's total US sales. (Toyota cars manufactured in Japan were not affected; the parts used are different from those in US vehicles.)
The bumps in the road are navigated by Yoshimi (Yoshi) Inaba, who took back the corporate wheel in mid-2009 to serve as president of Toyota Motor North America and as the chairman of Toyota Motor Sales USA. Inaba was head of Toyota Motor Sales USA from 1999 to 2003.
Under Inaba's leadership, Toyota Motor North America is advocating for increased US production. The effort aims to localize design and manufacture of vehicles and their parts in markets in which they are sold, sidestepping exchange rate fluctuations, as well as tariffs and trade restrictions that drive up unit costs. Only about 60% of the Toyotas sold in the US are actually manufactured in the US -- rival Honda averages more than 85% and Nissan 80%.
Additionally, Toyota plans to introduce smaller, more fuel-efficient cars to the North American market. The company's four-cylinder Scion brand, which gets about 66 mpg, is undergoing an extreme makeover, including a 2.7-liter, 200-horsepower engine. Toyota wants its Scion to compete with the Daimler counterpart, the smart car as well as the Kia Soul. A Lexus-brand compact hybrid vehicle, along with an expansion of Toyota's hybrid model offerings, is also on the workbench. Sketchier, Toyota is planning to build an electric vehicle prototype using Tesla powertrains.