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Toyota Targeting Latin American Growth

Sees Brazil, Mexico key to remaining world’s largest automaker.

by on Aug.30, 2013

Former GM senior exec Mark Hogan recently became the first American on Toyota's board of directors.

Toyota Motor Co., the world’s largest automaker, is looking to expand its presence in Latin America where it has underperformed key competitors such as General Motors, Volkswagen and Nissan, a new member of the automaker’s board of directors said.

Mark Hogan, former president of Magna International and former General Motors executive, who on June 1 became the first American to serve on Toyota’s board of directors, told reporters that Toyota needs to expand its footprint in booming, Latin American markets such as Brazil and Mexico.

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“Toyota is an extremely strong brand in Brazil but it under-performs in the market,” Hogan told reporters during a Toyota press event organized to review the company’s hybrid technology. “We only have about 5% market share. It should be higher,” he said.

“Brazil is a very important market for Toyota,” added Hogan who ran GM do Brasil for several years. One of his key assignments as a new board member will be to help Toyota expand its foothold in Latin America.

Like other makers, it has come to recognize that will require additional production capacity, especially in Brazil – where Toyota is setting up a third assembly plant — as well as in Mexico.

“We also need a new entry level product in Brazil,” he said.

“We have a terrific dealer body in Mexico but we also underperform in Mexico,” added Hogan. Toyota’s market share “South of the Border” is a modest 5% — well under half its share in the U.S. and a fraction of Mexican market leader Nissan.

Toyota has entered into partnership with Mazda to open a new assembly plant in San Luis Petosi, Mexico which will open in 2014, Hogan noted.

Toyota is locked in a three-way battle with rivals Volkswagen AG and GM, which have staked out substantial positions in China to challenge Toyota’s crown as the world’s top-selling automotive company.

Toyota has been struggling in China due to the backlash from a political dispute between the Chinese and Japanese governments over ownership of a chain of uninhabited islands in the East China Sea. But while Toyota also lags in Latin America, it faces future political obstacles to growing its share there.

Hogan also said he was looking forward to serving on Toyota’s board. “I’m excited by Toyota’s future prospects. I believe the direction Akio Toyoda set four years ago are beginning to pay off,” added Hogan, who first met the Toyota chairman 25 years ago when they served together on the board of New United Motor Manufacturing Inc., or NUMMI, the Toyota-General Motors joint venture in Fremont, California.

Toyota’s cars have become more exciting to look at and drive, Hogan said. In addition, regional executives in areas such as North America, South America and Europe have been given more freedom to lay out their future plans.

“There is still no other place I’d rather be right now than Toyota. It’s the best company in the world,” said Hogan, who now runs a consulting and investment firm based in Bloomfield Hills, Michigan. He also found Toyota to be open to his questions. “To have a successful company, you have to have open and frank debate,” he said.

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