Toyota Electric Vehicle, Plus New Prius for Detroit Show

(MoneyWatch)  Toyota will display a battery powered electric vehicle at the Detroit auto show next month, as well as the third-generation Toyota Prius.

The introductions drive home the fact that despite Toyota's short-term challenges, like an operating loss for the current fiscal year, other car companies wish they had Toyota's problems. Given a virtually worldwide automotive recession, Toyota so far is getting off lightly.

Worldwide, Toyota expects an operating loss of about $1.5 billion for the fiscal year ending March 31. That would be the company's first operating loss since Wolrd War II, but that result is a lot better than any of the Detroit Big Three can expect.

In the U.S. market, Toyota sales are down, but not as much as Chrysler, Ford and GM, so Toyota's U.S. market share is up, to almost 17 percent through 11 months, according to AutoData Corp. Toyota is the No. 2 seller in the U.S. market, behind GM but ahead of Ford.

A key to Toyota's long-term success is that as an institution, Toyota learns from its mistakes, going all the way back to its first days in the United States. Starting in 1958, Toyota's first U.S. export, the Toyopet Crown, was a disaster. The company all but quit the U.S. market in 1961, went back to the drawing board, and came back with the much more successful Corona in 1965.

More recently, Toyota learned from its mistakes with the first-generation Prius hybrid, launched in 1999. It was too small and underpowered. The second generation, launched in 2003, was bigger and more powerful, yet still got terrific gas mileage. The all-new Prius to be shown in Detroit is significant in part because Toyota is on its third-generation hybrid-only model, while other car companies are still getting warmed up to produce hybrid models in quantity.

True, the Prius caught a break when gas prices started climbing in 2004, just as the earlier oil embargoes gave Toyota's fuel-efficient products a leg up in the U.S. market in the 1970s and 1980s. But to an extent, Toyota has made its own luck. Before the latest spike in gas prices, the company had already made the product improvements that helped the Prius break out of its tiny niche. Toyota has sold more than 150,000 Priuses in 2008, even though sales are down in recent months.

Details are lacking on the cars to be shown in Detroit next month, but Toyota has dropped hints about its vision for fuel-efficient cars going forward.

The Toyota 1/X concept car, for instance (see photo), has the same interior volume as the Prius but weighs only one-third as much, thanks to the use of strong but light materials like carbon fiber-reinforced plastic. That's a real breakthrough. Other manufacturers measure weight improvements by a few pounds here and there.

Toyota has stubbed its toe hard with its current operating loss, but it will learn its lessons and come back tougher than ever.