Toyota redefines itself as a Mobility Provider

In the past few years, the world has flung itself into a period of rapid urbanisation populated by single-person households. This trend has altered our views on urban mobility and now we are seeing a generation drift away from private car ownership, opting to use public transport, ride-sharing and fractional car ownership schemes. In many places, the drift has been so dramatic that the world’s second largest car manufacturer, Toyota, has announced that it is redefining its core mission from making and selling cars to bridging the small transport gap within an urban setting. This, as they say, is defined as ‘the last mile’ – the short journey from station to home or office – and to achieve its newly created mission goal, Toyota has already begun developing a range of vehicles specifically for car-sharing in cities.

As Toyota sees it, cities have fallen out of love with the automobile and the future for city dwellers and drivers, particularly in the US of A, is covering the last bit of the journey where public transport infrastructure ends and there is an unwelcome walk to home or office. So the company wants to rebrand itself as a public transport provider and not just a vehicle manufacturer. This strategy will see Toyota develop more vehicles like the i-Road which was designed specifically for the urban environment. (See: Toyota i-Road making headway in Europe and Japan.)

“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 forced on manufacturers due to changing demographics in the urban environment and changes in consumer behaviour as a result. Cities in the US of A are in the middle of a radical shift with a boom in the number of single-person households, up to 45% in cities such as Washington and Atlanta, where sales of large sized SUV’s are already rare as younger customers are eschewing outright car ownership. Lentz thinks that the number of cars per household will drop over time: “It may be that they don’t have two or three cars. It may be that they have one or two cars.”

The phenomenon is not restricted to the US of A. Many European cities are already pushing for a new age of mobility based around public transport, and shared bicycle and car fleets, with cities such as Hamburg and Oslo looking to ban the automobile entirely (see Oslo to ban the private motor car). But Lentz said this still leaves a niche for Toyota in “the last mile” and he points out that getting around by public transport in the US is not as easy as in European cities. This is where Toyota sees an opportunity.

“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.”

Toyota is already testing a number of what they hope will become viable alternatives to fill the gap. In Grenoble and Tokyo, they have already been trialling an experimental electric vehicle programme with the i-Road, a sort of three-wheeled cross between a motorcycle and Smart car. The company hopes that the same vehicle sharing scheme can be tested in an American city sometime next year.

“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.”

This may be the time to point out to Mr Lentz that the average US commuter has not yet fallen out of love with their gas guzzling SUV, especially for those long commutes. In the past year, since gas prices have once again fallen, sales of vehicles have once again risen in North America, and once again SUV’s and large trucks are the best sellers. There is, however a significant and growing number of people ready to relinquish car ownership to avoid the bother that comes with it, like finding parking and traffic congestion. As manufacturers are realising, the boomtime of automobiles, which began with the post-war baby boomers, are reaching its end, and the newer generations may never again be as keen on owning their own car.

(Read also: Ford’s solution for the 'last mile')