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Why Toyota's fuel cell play is one big green gamble

Imagine going to the ballet on Saturday evening for an 8 pm performance. The orchestra begins warming up shortly before the show, but it turns out the star performer isn't ready at the appointed time. The orchestra keeps playing, doing its best to keep the audience engaged and, most importantly, in the building. It keeps this up until the star finally shows and is ready to dance ... which turns out to be ten years later. That's a Samuel Beckett play. It's also how many observers, analysts, alt-fuel fans and alt-fuel intenders feel about the arrival of hydrogen fuel cell vehicles (FCVs) – the few of them who are still in the building, that is. Toyota's hydrogen development timeline rivals that of the US space program. In fact, within the halls of Toyota alone, research on FCVs has been going on for nearly 22 years, meaning that one company's development timeline for FCVs rivals that of the US space program – it was 1945 when Werner von Braun's team began re-assembling Germany's World War II V2 rockets and figuring out how to launch them into space and it wasn't until 1969 when a man set landing gear down on that sunlit lunar quarry. The development of the atom bomb only took half as long, and that's if we go all the way back to when Leo Szilard patented the mere idea of it, in 1934. Carmakers didn't give up on hydrogen in spite of the public having given up on carmakers ever making something of it, so there was a good chance that hydrogen criers announcing the mass-market adoption of periodic chart element number two one would eventually be right. Now is that time. And Toyota, not alone in researching FCVs but arguably having done the most to keep FCVs in the news, isn't even going to be first to market. That honor will go to Hyundai, surprising just about everyone at the LA Auto Show with news of a hydrogen fuel cell Tucson going on sale in the spring. The other bit of thunder stolen: while Toyota's talking about trying to get the price of its offering down to something between $50,000 and $100,000, Hyundai is pitching its date with the future at a lease price of $499 per month ($250 more than the lease price of a conventional Tucson), free hydrogen and maintenance, and availability at Enterprise Rent-A-Car if you just want to try it out. We've seen and driven Toyota's offering and we all know its success doesn't depend on cross-shopping, showroom dealing and lease sweeteners.

Scion was Toyota's lost generation

Toyota's top North American leader was succinct in explaining the reasons for killing Scion. "It's the right decision at the right time," Jim Lentz said. It's hard to disagree. In a strong market that saw 17.5 million sales last year, Scion volume dipped three percent. Its product lineup has withered for years, which is always a telltale sign a brand doesn't have the full support of its owner. Though enthusiasts love the FR-S sports car, it's the fruit of a joint project with Subaru that also produced the BRZ. Scion's coolest car has a twin sold by one of its rivals. After the FR-S launched in 2012, Scion got nothing – squat – in the way of new products until the iA and iM arrived late last year, IHS senior analyst Stephanie Brinley noted. "[Scion] was not successful in building a visual brand identity or product personality," she said. Lentz, Scion's first vice president and now CEO of Toyota's North American division, admitted the market has changed. "Younger customers have a different mindset," he said. In the early oughts, a brand that catered to a youthful demographic made some sense, and this is one front where Toyota can declare victory. Seventy percent of Scion's buyers were new to Toyota, and the average age was 36 years old. The problem is, not enough of them buy Scions anymore. Scion hit a highwater sales mark of 173,034 vehicles in 2006 and hasn't come close to reaching that since. The recession hurt Scion, too. It bottomed out in 2010 with just 45,678 sales, a time when the rest of the industry was beginning to recover. There was a brief uptick (73,507) in 2012, but Scion failed to capitalize on that momentum and sales fell for three more years. Toyota is calling Scion's pending death a "transition" back to the main company. Sure, most of the cars will be rebadged Toyotas, like the FR-S, iA, and iM. The C-HR, an attractive future crossover that would have given Scion a boost, will go into production as a Toyota. But make no mistake: This is a failure. Toyota is closing a brand in the same way General Motors scrapped Oldsmobile, Ford shuttered Mercury, and Chrysler dropped Plymouth. Those brands languished for years. Toyota moved quicker to put the fork in Scion, which prevented it from becoming a long-term drain on the parent company. Lentz was dead on. It's the right time. News & Analysis News: Sergio Marchionne is against a Ferrari SUV Analysis: His exact words were, "you have to shoot me first," Bloomberg reported.

Ford Fusion production scaled back just 3 months after it was accelerated

Three months after kicking off production of the Ford Fusion at its Flat Rock, MI factory, Ford Motor Company is taking steps to trim output in the face of heavily discounted competition from Toyota and a growing supply of vehicles.
The addition of Fusion production in Flat Rock - which also builds the Mustang - was meant to be what pushed the handsome mid-sizer past its arch-nemesis, the Toyota Camry. An extra facility building Fusions was also meant to curb the growing demand for Ford's highly profitable sedan.
But with word that Flat Rock would take "approximately" one extra week off for the holidays combined with an 88-day supply of Fusions - reportedly due in no small part to what Morgan Stanley analyst Adam Jonas called "aggressive discounting of the Camry" - some analysts are now beginning to wonder if Ford may have overextended itself by adding a second Fusion facility to the mix.