Improved packaging for Hybrid Camry

Toyota's decision to allow its Australian subsidiary to build the Hybrid Camry midway through the current car's life cycle remains an unexpected event in David Buttner's experience.

Speaking with the Carsales network last weekend, the senior executive director of sales and marketing at Toyota Australia said that landing the Hybrid Camry project for local production has been a real coup for the company.

"I've never seen it in my 24 years with Toyota; you get a model [to build locally] mid-model life," he said. "It was going to be built in Thailand, but we fought and pushed and cajoled -- and were successful at the end of the day."

There has been, of course, an upside for Toyota in Japan. Exposure to the local market with its differing consumer priorities will inevitably broaden the scope of the next-generation Hybrid Camry, which is due here in 2012.

For a start, Americans just don't order their Camrys with towbars, but Australians do. And if Americans want to go away camping they pack up the SUV, not a Camry. Where the current Hybrid Camry has been adequate for the needs of American consumers, it hasn't met all the requirements of Aussie buyers. These are issues that will be addressed in the next-generation model, according to Buttner.

"I've been up to Japan and sat in front of the chief engineer about three times this year, with the next generation product, talking about some of the things we need to enhance and improve. His ears have been very open and I'm confident we can overcome some of the issues that have been perceived by the public -- whether it be boot space or towing capacity… those types of issues -- we will overcome with the next generation."

By his subsequent remarks, Buttner tacitly acknowledged that the Hybrid Camry's lack of luggage-carrying capacity can be a deal breaker in the showroom.

"[For] the next generation car, the Nickel-Metal Hydride battery is being moved 300mm forward and that will lift the boot space considerably. It will overcome that particular concern. We're well down the track of getting some towing capacity for the vehicle, so it will tow a box trailer [or] put a bike rack on the back.

"So Toyota Japan is listening, through their engineering forums and we are up there being quite noisy. We're confident we'll have some success in those two areas."

Buttner's reference to the Nickel-Metal Hydride battery indicates that Toyota won't adopt the lithium-ion battery type of the Plug-in Prius for the larger car, although if the Li-ion batteries operate according to spec in the field, they might trickle through to the mid-life upgrade of the next-gen Hybrid Camry.

Australian consumers will welcome the news that the next-generation Hybrid Camry will be ADR- homologated to tow trailers. We asked Buttner why the current car was not permitted by law to tow.

"It's simply cooling, that's all it is," he replied. "On the Lexus RX 450 h and the GS [they] all had towing capacity, because it was in the design. But in this particular generation [of Hybrid Camry], that sort of cooling capacity hadn't been baked into the design -- so that's being looked at for the next generation."

The boot space and towing capacity have probably discouraged consumers from considering the Hybrid Camry in among their new-car prospects, but according to Buttner, it's the mythos surrounding hybrid-drive technology that has been elemental to the petrol/electric sedan's failure to meet the company's original sales projections.

At the car's local launch, Toyota predicted it would sell around 10,000 units per annum, and of those, private sales would account for as many as 40 per cent. As of the end of October, sales of the Hybrid Camry in Australia were not quite 5200 units and private buyers amounted to less than 1100 -- around 20 per cent of the total. The car hasn't been on sale for the full year and there's still a couple of selling months left in 2010, but short of an aggressive retail campaign between now and the end of the year the Hybrid Camry's sales seem unlikely to surpass 65 per cent of the original sales forecast.

"I don't really see it as a problem, because they're still our aspirations -- and you've gotta have stretch goals for where you want to go," said Buttner.

"The 10,000 units per annum was a goal that we really wanted to achieve -- and now it focuses on getting the monthly running rate up to about 800 per month...

"One of the biggest issues that we have in the marketplace... while we've had Prius here since [2001], there are still a lot of myths in the public's mind about hybrid. As we went into the launch of Camry Hybrid with the third-generation Prius in the lead-up to that, we really embarked on a significant campaign to try and dispel a lot of myths.

"And the myths were things like the battery's going to fail or you've still got to plug it in, it doesn't drive like a normal car... all those sorts of things. So we've done a lot of things to try and dispel the myths, but what we're finding is... it's taking a bit longer than expected... and we've had to change our marketing strategy. We've gone for a bit more upmarket-type advertising, where we focus not just on the features and benefits, but try and dispel some of the myths.

"And to do that, we try to be proactive in our approach, particularly in regards to the battery, wherein we said from day one of the Hybrid Camry launch we had [an] eight-year battery warranty -- that's just to try and take that out of the concern set for the customers.

"We thought we'd landed that quite well, in terms of the consumers' understanding, but the research was showing they're not really fully understanding that, so we've beefed up our point-of-sale materials, additional training for sales people, mirror dangles and things in cars... that show 'eight-year warranty'.

"The plug-in issue is disappearing a bit, but then maybe we confused the market when we started talking about bringing in five Plug-in Priuses to Australia, for trials and evaluation."

As a pioneer of hybrid-drive technology for mass-market vehicles, Toyota faces a tough slog by any standard. Buttner would welcome other companies entering the fray, which we'll likely see happen, starting with Honda's Insight due soon.

"The best thing, frankly, I think could happen for the Australian marketplace would be tomorrow, if 10 competitors [each] launched a hybrid vehicle. Because then you'd have the mass of a number of [companies] trying to dispel myths and really talk about the technology."

In the absence of mass-market inertia working for the acceptance of hybrid technology, Toyota is offering low-interest (2.9 per cent) loans to Hybrid Camry buyers. Buttner also has other tactics available to raise the monthly selling rate to 800 cars.

"We're looking at what more grass-roots things do we need to do. Through our dealer network we're going to start doing displays in shopping centres, drive days... because you've got to get people in the car. It's the only way you're going to dispel the myths; get people in the showroom, sit them in the car, let them drive it, let them experience it first-hand.

"There's still a lot more we can do. Frankly, getting this vehicle mid-model cycle has really given us two years before the next generation, which isn't [due] until the first quarter of 2012, to really understand the mood of the marketplace and to trial a whole lot of things...

"There's a whole host of positives [about Camry Hybrid], we just need to keep communicating [that]..."

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