The casual observer might think "not much." But Toyota, poised to become the No. 1 automaker in the world, is clearly worried that its success in the U.S. market, where it is the No. 1 carmaker, may spark a backlash. That backlash may not come from consumers as much as from government, which may decide on moves to protect the Big Three. Toyota benefits currently because of union-free labor in its U.S. factories. The company still makes most of its vehicles overseas.
A source close to the company, which may pass GM in global sales this year, says Toyota has been tracking its corporate image in the U.S. for the past five years.
"They are definitely concerned about their continued positive results and growth when Detroit and GM in particular, have been suffering. They started getting concerned five or six years ago about a backlash," he says. "That level of concern has heightened in recent years." He says the problem--one many companies would like to have--is that the media tends to uncritically laud Toyota as a company that can do no wrong, and has much higher-quality vehicles than other makers (which is not at all true, based on quality and durability studies from the likes of J.D. Power & Associates.)
Steve Sturm--group vice president, Americas for strategic research, planning and corporate communications, and keynote speaker at the Advertising Research Foundation convention in New York yesterday--says he isn't worried about a retributive response by government or consumers.
"Sixty percent of our vehicles are built here, so we have become part of American culture and society," he says, repeating a corporate theme that is prevalent in advertisements the company has run in recent years spotlighting its manufacturing footprint on U.S. soil to buff its image as a job provider and domestic make in all but name. For the 2007 Tundra pickup, the company made a point in product ads and corporate communications--directed at traditionally patriotic truck buyers--that the truck is made in America.
Says Sturm, "our marketing and advertising on the corporate front is to talk about the economic contributions we've made, and all of the images and trends we look at say Americans respect what we do and our business plans. We have not seen a backlash from what's happening in Detroit."
In the packed conference hall, a General Motors employee then stood to ask Sturm: "What advice you could give us, and if we continue to go down the path we are going down now, from a Darwinian perspective, do the Big Three deserve to succeed?"
Sturm's response was measured, perhaps not least because it would have been unthinkable in years past for a representative of one of the Big Three to ask advice from a Japanese automaker. His response was also measured because the company has studiously avoided making statements about Detroit automakers that might sound remotely, well, Darwinian.
Echoing statements from other Toyota executives in recent months, Sturm says he wanted nothing more than for GM to succeed. "We want a vibrant car market," he says. "Of the three domestic companies, GM has the best game plan for the future. They've woken up and realized they need to be competitive on the sales and marketing front."
Wes Brown, an analyst with IceOlogy, an L.A.-based market research firm, says he doesn't see a consumer backlash against Toyota merely because the company has been so successful in the U.S. at the expense of the Big Three. "From a consumer standpoint, there is not going to be a backlash," says Brown. "I think consumers, especially GenX and GenY, could care less. In their minds, Toyota has done it on their own without cheating. They build great product at a good price, so why shouldn't they benefit?
"I think where they have another level of concern is Washington, and will there be political backlash. And I think, ultimately, that is a little more difficult to measure since we can all agree Washington is difficult to predict. All you need is one person to create a little noise, and you don't know what the flavor of the day will be as a consequence."
Indeed, several members of Congress, particularly Rep. John Dingell (D-Mich.) have criticized Japan for currency manipulation and Toyota for benefiting from it.
But Brown thinks Toyota has developed too savvy a program around lobbying and community programs near plants and corporate messages to succumb to political efforts to control Toyota's advantage. "So everywhere they are, they are also very well meshed with helping the community; that makes it that much more difficult for a politician to stand up and make noise unless it's Detroit. They are trying to make sure that they are being more proactive than reactive to avoid there being one person to stand up and create that noise, to avoid a media groundswell."
Indeed, the company reportedly plans to spend more than it ever has this year on lobbying and corporate image efforts. Last year, Toyota spent $4.6 million on such efforts.