Toyota USA President Explains Why The Medium & Long-Term Outlook Is Bright

It’s not hard to find the bad news these days. Even Toyota brands, thought to be immune, have suffered a 6.8% drop in sales so far this year. That’s why optimistic words from Lentz to AN reporter Mark Rechtin are worth a second look.

Lentz offered some reassuring words about the future of the auto business in the U.S. And while it is not hard to be discouraged over the poor sales performance in 2008, he offers a few demographic-based rays of hope for the medium and long-term prospects for both the car and truck businesses in this country.

Here are just a few things Lentz told AN in this Q&A formatted article:

He indicated that there was a “knee-jerk reaction” due to the loss of home values, gas prices and more generally a fear of inflation and overall economic collapse. But he also offered some calming words, pointing out that the country will work through its malaise, just as it always has.

Noting the current difficulty of selling trucks, he is quoted as saying, “At some point these prices will hit a level where even at 18 mpg, it’s still a great deal. That will start to turn the overall market.”

Lentz was asked why he is bullish over the medium-term’s prospects. He offered a laundry list of demographic considerations that, in his view, point to a strong market over the next 10 to 12 years. He cited the projection for population growth in this country, due both to increased birth rate and immigration, calling for an additional 32 million people by 2020.

He also cited the increasing affluence of certain growing populations- specifically baby boomers moving into retirement and their kids who stand to inherit trillions in coming years.

Lentz also offered some soothing words about the high price of gasoline and cautioned that you cannot look at today’s conditions and attitudes in a vacuum. He claims that if gasoline had increased in cost gradually, from its $1.50 pump price in 2002 to its plus $4 price today, then we would not have the same problem. He reasons that the public would have adjusted their budgets over time to account for the increased fuel expense. He contends that if gas stays this high for long enough, they will likewise adjust.

As a result, he is not willing to pronounce trucks and SUVs a dead market. He was quoted as saying, “There are still families with three kids who need three-row SUVs who can’t fit into a Prius.”