Toyota, the world’s largest automotive company by revenue, is redefining its strategy regarding the making and selling of cars, as it prepares for a future in which it believes public transport will play a bigger role in city life.
As Toyota sees it, the future of cars for city drivers – particularly in America – lies in covering the short distances between bus or subway stop and home. And so it wants to rebrand itself as a public transport provider, not merely a vehicle manufacturer.
In a strategy that could expand commuting options for city dwellers, the company is developing a number of new vehicles aimed specifically at car-sharing in medium-sized town and cities.
“We are about mobility,” said Jim Lentz, chief executive of Toyota North America. “We still are about making cars and trucks but other forms of mobility as well – not limiting ourselves to just thinking about traditional passenger cars, SUVs and trucks.”
The rethink has been foisted on car companies by rising rates of urbanisation and changes in consumer behaviour. America’s big cities are in the midst of a boom, and single-person households now account for a rising share of the US urban population: up to 45% in cities such as Washington DC and Atlanta. Such residents are not necessarily in the market for big, people-moving vehicles, while younger millennials are also proving averse to outright car ownership.
In an interview with the Guardian, Lentz said: “I think the number of cars per household over time will drop. It may be that they don’t have two or three cars. It may be that they have one or two cars.”
In European cities, planners are actively hastening an age when people get around by public transport, and shared bicycle and car fleets. But Lentz said this still leaves a niche for Toyota in what the company is calling “the last mile”: the relatively short distance between home and office and local public transport systems. Getting around by public transport is not as easy in the US as in European cities – and that is where Toyota sees new room for manoeuvre, Lentz said.
He identified the issue as “how people get from their residence to public – transportation, and from public transportation to the place of work”, in an interview on the sidelines of last month’s Aspen Ideas festival.
“In many US cities, while there may be public transportation, it probably is not quite as convenient as it is in other cities. Someone may be a mile or so away from where they need to go,” he said.
The company is testing a number of all-electric vehicles to fill that gap. In Grenoble, Toyota has experimented with a vehicle-hire service using its slimline i-Road three-wheeler, which looks like a cross between a motorcycle and a Smart car. It hopes to test the i-Road in an American city in 2016, Lentz said. But he admitted it was years away from deployment.
“We hope it will encourage people to use public transport in cities to help reduce overall congestion,” Lentz said. “I think it is inevitable that we are going to have to be spending more time on mass transit, so we might as well be part of the solution.”