But Toyota is expected to overtake the nearly bankrupt General Motors this year as the world's largest automaker. While GM and Ford are closing factories and losing billions of dollars annually, Toyota is expanding at a red-hot pace around the world.
For years, Toyota recorded solid growth because of its dependable, fuel-efficient cars such as the Camry.
Then, in the 1990s, while U.S. automakers were building bigger and bigger SUVs and trucks, Toyota threw itself into hybrid gasoline-electric research, investing more than $1 billion in the then-little-known field.
Executives at GM, Ford and Daimler-Chrysler derided the hybrids as money-losers and lagged in producing their own models. Toyota pressed ahead, and its resulting hybrids -- the Prius, the Highlander SUV and Lexus RX400h, as well as a half-dozen other hybrid models sold only in Japan -- now dominate the market, accounting for about 80 percent of U.S. hybrid sales.
Hybrids make up only 3 percent of Toyota's overall world sales, but the buzz resulting from their success has added to Toyota's public image as a trend leader.
"Toyota is willing to make investments to gain technological capability, not just for guaranteed returns on investment, like the Big Three," said Jeffrey Liker, the author of a recent book, "The Toyota Way."
"Toyota believes that, 10 years from now, its hybrid technology will be like the Windows platform is now -- most cars will be a version of hybrid," said Liker, a professor of industrial and operations engineering at the University of Michigan. That gamble is "probably correct," he added.
In many ways, the Prius project appears to be a textbook example of Toyota's much-vaunted, much-imitated internal management system and its mantra of kaizen, or continuous improvement, in which top executives steadily ratchet up performance standards for their employees, while also listening closely to suggestions and emphasizing consensus.
The project was the brainchild of Toyota's chairman at the time, Eiji Toyoda, a member of the company's controlling family.
Waterbury Republican American