To analysis the environments by using STEP framework that Toyota was situated, we could understand the reasons why Toyota was pursuing the Prius Project.
Pattern of consumption was a factor influencing all industries including automobile industry. Consumers liked to choose brands to build their own identities. Honda was doing well in building their brand young that Honda was popular among younger generation and the customers kept buying when they grew older. In contrast, Toyota’s clientele tended to be older. TMC believed introduction of Pruis could generate excitement about TMC’s products and its innovative capabilities hence altering TMC’s image.
Governments had put a great deal of regulations to automobile industry because of the public concern about air pollution and fuel scarcity. CAFE imposed by U.S. Congress and ZEV by CARB were the typical examples to retard the air pollution. Governments also encouraged manufacturers to enhance the fuel efficiency of their vehicles to slow the depletion of oil supplies, as oil was a limited resource of the world.
Governments put the regulations was not only from environmental perspective, but also mitigation of concerns about reliance on oil imports. Oil supply could fluctuate dramatically depending the political conditions in Middle East and the ability of OPEC to control its member’s oil output that were out of other governments’ control.
There were few technologies available for improving the fuel efficiency, such as Improved Gasoline and Diesel Engines, Hybrid Powertrain, Electric Vehicles and Fuel Cell Vehicles. After investigation, only hybrid powertrain could improve the fuel efficiency by 100% and the technology of fuel cell was still uncertain.
The hybrid powertrain created an opportunities for improving the fuel efficiency, but in the mean time, it also presented a challenge in delivering safe and value for money vehicles.