Despite the ongoing sales downturn, Mexico is slowly developing a taste for electrified vehicles. Due in part to comparatively higher costs than its regular internal combustion counterparts, EVs are still a tiny percentage of overall light-vehicle sales.
Sales of electrified vehicles represented 1.2 percent of the 680,699 cars sold in Mexico in 1H18. According to data from AMIA, 8,082 hybrids and EVs were sold in the Mexican market in that period. Though penetration of electrified options to the Mexican market is still low, sales in this segment increased 60.3 percent in the first six months of 2018 compared to the same period of 2017, when only 5,039 hybrids and EVs were sold.
But more options mean more opportunities and when it comes to electrified options, Toyota is king in the Mexican market. In the first nine months of 2018, the company sold 4,560 units of its flagship hybrid Prius in Mexico, which made this model the champion of the luxury-vehicle segment in that period. The introduction of subcompact Prius C in January 2018, Camry Hybrid last week (which we cannot wait to review) and the future introduction of Prius Prime and Mirai are poised to strengthen the company’s hybrid portfolio as the company works toward its goal of marketing over 5.5 million electrified vehicles by 2030.
Mexico Automotive Review talked with Tom Sullivan, President and Director General of Toyota Motor Sales de México, for its 2018 edition to learn more about how sustainable mobility will impact the company’s strategy for Mexico. Here’s what we found out.
This is an excerpt from an exclusive article from the 2018 edition of Mexico Automotive Review. To read the full interview plus the insights of more key automotive characters, order a hard copy of our latest edition or check out the digital version of MAR 2018!
Q: What segments of the Mexican automotive market is Toyota ready to explore?
A: The launch of C-HR signals our entrance into the compact SUV subsegment. We have also launched Prius C, which is both the first hybrid subcompact in Mexico and the most affordable hybrid option in the domestic market. This launch follows the success that Prius has had in Mexico. The positive results of this strategy are palpable. We grew our vehicle sales by close to 1 percent in 1H18 compared to the same period in 2017, which we consider a significant achievement given the contraction that the market faced during this period.
Q: What role will sustainable mobility have in Toyota’s long-term plans?
A: This trend is very important to our operations. In Mexico, we have become leaders in the hybrid segment. In 1H18 alone, Toyota marketed over 5,000 hybrid units in Mexico and our sales target for 2018 is 10,000 hybrid units. Additionally, as part of our “Project Portal” strategy, Toyota has taken its fuel-cell technology beyond light vehicles and implemented it in a cargo truck. This vehicle offers 670hp and torque of 1,796Nm. It has an autonomy of 320km and can carry 36 ton. The company also plans to build the first hydrogen and renewable-energy generation plant, called Tri-Gen. By 2020, this plant will produce 1.2 ton of hydrogen to support fuel-cell vehicles and 2.3MW of electricity.
Toyota’s global vision is to reduce its vehicles’ CO2 emissions by 90 percent and by 100 percent in its manufacturing operations in accordance with the Toyota Environmental Challenge 2050.
Q: What is Toyota’s strategy to strengthen its position in Mexico’s green-vehicle market?
A: Prius is the first mass-produced electrified vehicle. The main goal of this vehicle was to offer an intelligent mobility solution that respects the environment. Toyota has maintained the concept of Monozukuri and total harmony with the environment since its creation and during its production. Toyota’s goal is to remain the benchmark in hybrid technology. We are convinced that hybrid motorizations are a feasible electrified option for the short term.
We decided to bring Prius to the Mexican market in 2010 with the hope that the country would eventually become ready to adopt it. The main challenge we faced was creating a market for this type of vehicle and we advocated to make this technology more affordable for Mexican markets. Today, Mexican consumers are willing to bet on intelligent and sustainable mobility. In 2017, Mexico became the third country with the most Prius sales after Japan and the US. The introduction of Prius C as a more affordable hybrid option and the launch of two more hybrids before the end of 2018 and in the first months of 2019 should help us underpin Toyota’s position in this segment.
Q: What are the main challenges that Toyota has faced to introduce electrified vehicles into the Mexican market?
A: We are confident that hybrid vehicles will enter the mainstream over the next decades but the development and introduction of new technologies generally comes at a high cost and requires a strong effort to gain mass acceptance. While this is mainly between consumers and the automotive industry, many factors can support this process such as the incentives that governments offer to consumers to help them gain access to new technologies.