As Cities Fall Out of Love with Cars, Toyota Redefines its Role as "Mobility Provider"
In an era of rapid urbanisation, single-person households and a generational shift away from private car ownership, the world’s largest car manufacturer last year, Toyota, says it is redefining its core mission from making and selling cars to bridging small transport gaps in urban areas.
As Toyota sees it, the future of cars for city drivers – particularly in the US – 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 mid-size urban environments.
“We are about mobility,” Jim Lentz, chief-executive of Toyota North America, told the Guardian. “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.
“I think the number of cars per household over time will drop,” Lentz said. “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 transit 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 to manoeuvre, Lentz said.
“How people get from their residence to public transportation and from public transportation to the place of work”, he said 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.”
The company is testing a number of all-electric vehicles to fill that gap. In Grenoble, Toyota has experimented with a vehicle-sharing service of the three-wheeled i-ROAD, 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 – if ever.
“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.”
Not that Americans have completely forsaken their love for the big gas guzzler, especially for those with long commutes. The country’s top-sellers last yearremained SUVs and large trucks. But there is also a significant and growing number of people ready to opt out entirely of the hassles of car ownership, including traffic and parking. As manufacturers well know, younger generations may never again prove as keen on car ownership as the “golden era” of post-war baby boomers.
This article originally appeared on The Guardian.