Image: Toyota Prius ad
Toyota’s new TV ad shows a Prius sedan formed by natural elements, and then melting back into the landscape.
By Roland Jones Business news editor
updated 11/28/2007 7:02:02 PM ET 2007-11-29T00:02:02

Thanks to the popularity of its low-emission Prius hybrid sedan, and the fact that its fleet of vehicles is one of the most fuel-efficient on the road, the Toyota name has been synonymous with green driving in America for years.

Why then, you might ask, has the automaker launched one of its biggest-ever advertising campaigns to tout its commitment to the environment, social responsibility and support of local communities?

A television ad now airing shows a Prius being formed by natural elements — tree branches, leaves and moss — on a rugged moor, and then decomposing, melting back into the natural landscape. It’s an unmistakably green image.

Toyota also was at pains to show off its eco-friendly credentials at the recent Los Angeles Auto Show, where visitors to the automaker’s display found carpet made from recycled plastic, and cars and trucks on turntables made from recycled aluminum and bamboo.

In case the onslaught of information was confusing, Toyota provided a handy “eco-friendly materials overview” printed on recycled paper using soy ink.

“With any aspect of our retail operations, we’re trying to be as green as possible," said Denise Morrissey, a spokeswoman  for Toyota Motor Sales USA

One reason for Toyota's extra green push could be an unusual surge in negative publicity for the Japanese automaker, which this year celebrates its 50th year selling cars in the United States.

Toyota’s decision to team up with the Big Three U.S.-based automakers to challenge a Senate bill that would require average fleetwide fuel economy of 35 miles per gallon by 2020 — an increase of 10 mpg — from current levels, has sparked a backlash against the company. Critics such as the Natural Resources Defense Council, an environmental group, have called Toyota hypocritical.

Toyota also has seen an unusual wave of product recalls and has suffered from criticism that its once-unassailable quality control has slipped.

On fuel economy, Toyota and other automakers argue that the more stringent standards would hurt their businesses by limiting production of pickup trucks and SUVs, which are more profitable than cars. But that argument carries little weight among environmentalists.

"[Toyota] has gone from the darling child of environmentalists to the bad guy for environmentalists fairly rapidly,” said Jack Nerad, executive market analyst for Kelley Blue Book, which tracks the automotive industry.

Toyota has moved decisively into the pickup and SUV sectors, launching its full-size Toyota Tundra truck last year and taking on Ford’s market-leading F-150 and Chevy’s Silverado. At this month's Los Angeles show, known for its focus on alternative-fuel vehicles, Toyota’s major announcement was its second-generation Toyota Sequoia full-size SUV. Video: Gas debate

“Some in the environmental community feel duped by Toyota,” he continued. “They feel Toyota’s production of hybrids like the Prius gave the company the cover to make their larger sedans, pickup trucks and large SUVs. I think that’s a rather cynical view of things because those product plans were in place long ago, and to be a full-line automobile manufacturer in the U.S. market you have to sell vehicles in all these segments.”

Certainly, Toyota’s stance on the fuel-economy standards has taken some of the sheen off its  reputation in the United States. The Japanese-based automaker has maintained the image of a scrappy underdog even as it has grown into a global behemoth, Nerad said. Soaring oil prices have driven consumers to more fuel-efficient cars like the Prius, and the midsize Camry sedan has been the best-selling model on the U.S. market for eight of the last nine years.

Now, with Toyota set to overtake GM as the world’s biggest automaker, the company is eager to burnish its image in the United States, its most lucrative market. A likely reason: The quality ranking of its vehicles — usually at the top of influential reports such as the one issued by Consumer Reports magazine — has slipped as production has grown.

In a severe blow to a company that has developed a solid reputation for quality and reliability, Consumer Reports said recently it would no longer automatically recommend new Toyota vehicles to car buyers.

And a whistleblower lawsuit filed this month by an employee at a California plant run jointly by General Motors and Toyota says managers allowed major defects — such as faulty seat belts and braking — to go unchecked.

A beneficiary of Toyota’s troubles could be Honda, its closest Asian rival, says Nerad.

“Honda is pushing very strongly that they are the most fuel-efficient car company in the country, and they haven’t gone the route of large pickups and SUVs,” he said. “They’ve dipped their toes in that pool, but they haven’t waded in to the extent that Toyota has.”

Another boon for Honda is the FCX Clarity, a sedan that runs on a hydrogen-powered fuel cell with water as the only tailpipe emission. The car, introduced at the L.A. show, will be available for lease to a limited number of Southern California drivers next summer.

“I think Honda is doing some very interesting things, and the FCX is among them,” said Nerad. “I’m interested to hear what they’re going to do with diesels, and what their next hybrid will be. It’s not going to be a replacement for the Accord hybrid; it’ll be a new entrant in the subcompact area.”

And, presumably, a competitor to Toyota’s Prius.

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