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Toyota Prius

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Toyota Prius: A Case in New Product
Development
Presenters
Syed Khizer Ali Shah 13967
Murtaza Makati
12805
Naureen Ansari
8696

Toyota Prius: A Case in New Product
Developement

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INTRODUCTION
In 1997, TMC Japan launched its hybrid car, Prius in Japanese market
First mass produced hybrid vehicle
It consists of THS(Toyota Hybrid System) which combined an ICE with

electric motor
Goal of “Ultimate Eco Car”
Efficient and stylish
A safe car
A best selling hybrid car in 2002
Toyota Prius introduced in US market in 2000
Toyota Conducted research study for consumer preferences
Break successfully in tough US market
“World’s best engineered car” by Automotive Engineering
International in 2001
Demand for hybrid cars because of unstable oil prices
Growing need for environment friendly product
Toyota Prius: A Case in New Product
Developement

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HISTORY


Toyota's history goes back to 1897, when Sakichi Toyoda (Sakichi)
diversified into the textile machinery business from his traditional
family business of carpentry.



Invented a power loom in 1902.



In 1926, Sakichi invented an automatic loom that stopped
operating when a thread broke.



In 1929, he traveled to the US and Europe to study the
manufacturing processes in car factories there.



In the early 1930s, Kiichiro convinced his father to launch an
automobile business and in 1933, Sakichi established an
automobile department within TALW.



In 1936, Sakichi sold the patent rights of his automatic loom to a
company in England to raise money to set up a new automobile
business.



Toyota Prius:
A Case in New Product
Kichiiro as a MANAGING
DIRECTOR

Developement

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HISTORY


TOYOTA, a new company, written with 8 brush strokes



Kichiiro visited US again to FORD to learn manufacturing
processes



Avg US worker productivity = 9 times of japenese worker



Introduced Just in time(JIT)



In 1950, a major strike by labour union moved Kichiiro



Eiji Toyoda as a new MD



Eijii travelled to US to study Fords River Rouge manufacturing
facility



Found some inefficiencies so introduced KANBAN system



In 1957, Toyota was renamed to “The Toyota Company”



Toyota Crown, 1st export to US



Received a boost in 1970, oil prices rose



Crisis in Japan, TPS helped to bounce back in 1977

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Developement

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Power loom

Toyota Prius: A Case in New Product
Developement

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HISTORY


New United Motor Manufacturing Inc.(NUMMI), JV with GM in
80’s



1983, name changed to Toyota Motors Corporation



In 1990s Toyota expanded its overseas operation



In 1995, Hiroshi Okuda became Toyota President



In 1999, Toyota listed its shares in NewYork and London stock
exchanges



Biggest Automobile company, in 2000



As of 2005,production bases in 26 overseas countries



Vehicle sales network in 170 countries and region



Employed 260,000 employees world wide



In 2005,Net revenue reached 18.55 trillion YEN



Net income reached 1.17 trillion YEN

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Developement

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HYBRID CARS


Ferdinand Porsche manufactured the first hybrid-electric car in
1898.



In the 1960s a few attempts were made to manufacture hybrid
cars by applying turbine engines to the production of the
vehicles.



WHY HYBRID???



The need of cleaner and more efficient vehicles led to the
development of hybrid vehicles in the 1970s.



In 1970, Federal Clean Car Incentive (FCCI) was started by the
US government



The program was scrapped in 1976 by the Environmental
Protection Agency (EPA) of the US.



In 1993, another program called the Partnership for a New
Toyota Prius:(PNGV)
A Case in New
Product
Generation of Vehicles
was
launched
in the US that
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Developement
focused more on hydrogen-based vehicles.

HYBRID CARS
• Toyota , more than 3 decades in hybrid car market
• Sport 800, 1st ever hybrid car by Toyota in 1988 Tokyo
Motor Show
• Sport 800; based on Series Hybrid System
• Coaster Hybrid vehicle in 1997
• In 2001, launched Crown hybrid and Estima Hybrid in
Japan
• In 2002, FCHV (Fuel cell hybrid vehicle) technology was
introduced in the japanese market

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Developement

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KNOWLEDGE
MANAGEMENT
Toyota's success
in both the local and global markets was
based on its gaining a competitive advantage through
implementation of innovative and path-breaking ideas on its
production floors.



Toyota had focused on learning from the very beginning.



Toyota, knowledge sharing was intertwined with its peoplebased enterprise culture, referred to as the Toyota Way.



The five key principles that summed up the Toyota Way were:
Challenge , Kaizen (improvement), Genchi Genbutsu (go and
see), Respect and Teamwork



Employees as Company's strength



Developing
mentoring



Toyota Prius: A Case in New Product
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TPS system worked
by combining
explicit,
12
Developement
knowledge

human

recourses

by

training,

coaching

and

KNOWLEDGE
MANAGEMENT
all technical knowledge is transferred

• Ensuring
workers at new plant

to the

• Experts identified this knowledge sharing as major
contributor to their success
• Quality Circles, Kaizan, Vendor Conventional programs etc
• Performance measurement; Process v/s result oriented
• Prius as benefits of knowledge creation
• Beating the record of fastest development through out
the world
• Production within 15 months, after both research and
development activities
• Impressive whenToyota
Hybrid
technology was in a crude form
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Developement

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KNOWLEDGE
They tried MANAGEMENT
only 80 hybrid engines and tested them to make a
final choice; “Set based concurrent engineering”



Changed the process of design finalization



Before; Chief engineer discussed with design and planning
department



After; Chief engineer discussed the design concept with design
and planning dept. along with production engineers



Important learning exercise for Young Toyota Engineers



RAV4 and Highlander; World’s 1st mass market seven passenger
hybrid SUV



JIT, KANBAN, AUTONOMATION (Jidoka) e.g.. Andon, Poka Yoke,
SMED



Global Body Line; Flexible assembly line
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Developement

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Original Prius
 Drive by THS
 THS,power train that combines engine with motor
 Series/Parallel hybrid system
 Power split mechanism
 The Orignal Prius(NHW10) launched in Japan in Dec 10,

1997
 Stylish, safe, four door, 5 seater seedan,
 Quite and comfortable driving
 Fuel effieciency is double with conventional car
 52 miles per gallon in the city
 45 miles per gallon on highways
Toyota Prius: A Case in New Product
Developement

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Original Prius
 Most imp aspect??????
 YES…..It reduces the 80% of the smog-forming

emissions
 “Passive Safety Body Technology”; seat bellts, air bags
and other equipments
 Supplement Restraint Sysyem(SRS) in front and rear
seats
 5.8” LCD monitor, displayed energy flow system,
navigation system
 18000units sold in Japan in its 1st year
 Japan’s Car-of-the-year Award in 1997-1998
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Developement

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FIRST GENERATION : PRIUS

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Developement

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FIRST GENERATION :
In 2000, Toyota introduced
its first generation model of
PRIUS
the Prius in the US, Europe and other markets. This
model was also called Prius NHW11 or Prius Classic.

• Few modifications to meet vehicle standard for California,
USA
• Engine HP from 58 to 72
• Battery pack was changes to flat rectangular one from
Standard D
• Touch screen LCD, eliminating hard buttons
• Lighter, smaller and more powerful than original Prius
• Compliance with SULEV (Super Ultra Low Emission
Vehicle) standard set by California Air Recourses Board,
Toyota Prius: A Case in New Product
dept. of EPA
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Developement

• Toyota, marketing the first generation Prius in the US was



FIRST GENERATION :
The key was to convince
consumers in the U.S. that
PRIUS
hybrid technology was more than a science project.

• Before introducing in US, Toyota conducted family demos
in Chicago, New york, LosAngeles, San Francisco and
Washington DC
• Publicized by Internet
• Well received by early adaptors and innovators who are
more tech savvy
• SO, classified their costumers in this region i.e. early
adaptors, innovators and the early majority.
• Toyota researched , US preferred trucks and SUVs
• Also demand for luxury vehicles is rising up
Toyota Prius:
A Case in New
Product
• Advertising through
internet
publically
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Developement

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FIRST GENERATION :
Major concern; Price PRIUS
of a Car

• Company’s strategy;
Technology”

‘Clean

Environment

and

High

• USP(Unique Selling Proposition)
• Same Price as of Original Prius
• The company has sold about 1800 Prius cars through
internet even before the arrival of model at showrooms
• For thorough evaluation, a full day test drive
• Buzz marketing, an important reason for 1st gen Prius
success
• Early adaptors and their word of mouth on internet
• The websites talks about Prius in different versions,
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features, technology
and availability
Developement with pictures



FIRST GENERATION :
It got rave reviews from
Media
PRIUS

• Celebrities like Leonardo DiCaprio, Cameron Diaz, Will
Ferrell, Bill Maher, Alexander Paul are some who bought
Prius
• Leonardo DiCaprio said,”I own a TOYOTA PRIUS; Its the
step in the right direction……..”
• Company declared highly profitable product
• 15556 cars sold within 1 year in US and rose to 20119 in
2002
• World wide sales rose to 100000 units by March 2002

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Developement

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SECOND GENERATION :
PRIUS

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Developement

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SECOND GENERATION :
PRIUS
Toyota began evaluating the popularity of its first generation
Prius in the market soon after it was launched.



The evaluation was based on the price, performance and social
aspects of the product as seen by buyers and potential
customers.



The most important feature of the new Prius was its enhanced
safety.



The company found the product needs some improvements in
terms of looks, quality and performance.



THS-II based on next concept; HSD(Hybrid Synergy Drive)



Low emissions and high power performance.



Engine runs on Atkinson Cycle; compression and expansion
stroke duration can
bePrius:
setA Case
independently.
Toyota
in New Product



Developement

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Prius 2004 or NHW20 launched in US market in April 17, 2003

23



SECOND GENERATION :
PRIUS
Smoother driving experience.



Produces 76hp compared to 1st Gen Prius which produce 70 hp.



High developed electronic control system



Steering Assisted Vehicle Stability Control System(S-VSC) and
Intelligent Parking Assist system; both 1st in monitoring history.



S-VAC system integrates the VSC(Vehicle skid control),
ECB(Electrically controlled brake system),TRC (Traction control
system) and EPS (Electric power steering system).



60 miles per gallon in city.



51 miles per gallon on the highways.



5 doors car, wide cabin.
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Developement

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SECOND GENERATION :
PRIUS

• Electromultivision 7” touch screen monitor,
showing the energy flow, air conditioning and
audio system of vehicle.
• SRS (Supplement Restraint System) safety
feature.

• Advanced partial zero emission vehicle(AT-PZEV)
standards, reduced 50% CO2 and 90% reduction
in CO, hydrocarbons and nitrogen oxide.

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Developement

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The Testing
125 safety tests carried out.
Uses Ultra high strength steel in vital places (2.5

times stronger than high strength steel).
8 air bags, knee protection panel, Child Restrain
System(CRS).
WIL(Whiplesh Injury Lessening).
The new Prius, 1st hybrid car tested by EuroNCAP
(European new car assessment program)
It is a safety assessment program.
EuroNCAP awarded Prius with 4 stars in child
protection & 2 stars in pedestrian protection.
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Developement

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Marketing Strategies of Toyota
Prius in US:
Internet
Print Advertisement.
Television (National TV)
Radio
Celebrity Endorsement

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Developement

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Outlook:
Edmon said: “We are targeting a sales volume

of 36,000 for the first full year.
Price of $19,995.
By Oct 2003, more than 17,500 Prius has been
ordered in Japan.
By Sep 2004, more than 100,000 Prius car
were sold in US alone, while 244,000
worldwide.
Toyota introduced 2005 Prius at cost of
$21,275.
Toyota had about 300 patents for the original
Toyota Prius: A Case in New Product
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Developement
Prius and 370 for the new
Prius.

Toyota has share its hybrid technology with

Nissan Motors CO. Ltd.
Toyota won “Excellence in Environmental
Engineering Award” given by Sierra Club in
2000.
Won “Car of the year” award in 2004.
Won “European car of the year award” in
2005.
Aims to sell a million hybrid cars worldwide by
2010.
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Developement

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Toyota Prius: A Case in New Product
Developement

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