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Toyota appoints US affiliate to board

From Finance Times| June 25,2007

For someone responsible for a sprawling and fast-growing business empire, Jim Press has a surprisingly soothing demeanour that belies the enormous pressures anyone in his position is bound to face.

Mr Press, the president of Toyota Motor North America, 60, who last week be-came the only non-Japanese to be appointed to the board of Toyota, makes it sound as though everything is smooth sailing for the carmaker as it expands in the US at a breakneck pace and is set to overtake General Motors this year as the world's largest carmaker.

However, Toyota, along with other Japanese carmakers, faces rising resentment in the US automotive sector, where the success of the Japanese has stood out in stark contrast to the woes of the US big three.

Mr Press must appease an increasingly vocal industry lobby, which claims that Japanese carmakers enjoy an unfair advantage as a result of the yen's persistent weakness.

The Auto Trade Policy Council, an industry lobby, claims that the Japanese government is subsidising Japanese carmakers by maintaining $900bn in currency reserves that hold down the value of the yen and boost exports.

"We don't control currency [moves]," he says.

"I'm from Kansas and it's like rain. Some years it rains and some years it doesn't. The best farmers always have crops," he says, shrugging his shoulders.

Mr Press emphasises that Toyota is a significant contributor to US employment and investment.

The group employs 34,675 workers in the US and has so far spent $15.5bn in direct investment.

"We're adding more capacity [in North America] than some companies have as their [total] production," he says.

"We've been 50 years in the US and we have really gone through the process of becoming part of the fabric of the country, as any immigrant does," Mr Press points out.

He dismisses the idea that Toyota executives are worried that the group is expanding capacity too quickly in the US and needs to slow down to catch up with quality issues.

Surveys by JDPower, the market research group, continue to show that Toyota enjoys high marks for quality, and the group has "substantially reduced . . . recall numbers to a very small number," he says.

With Mr Press now on the Toyota board, and with the domestic car market shrinking, North America is likely to feature even more prominently in Toyota's global strategy.

The North American market "is a great market," Mr Press says, and Toyota is enjoying brisk sales of its best products, such as the Prius; its hybrid car, Lexus, its high-end luxury brand; and Camry, which is the most popular passenger car in the US.

"We are currently building 600,000 units of capacity in North America. That is pretty good evidence of our confidence in the market and our commitment to continue to build vehicles where we sell them," Mr Press says.

"We continue to want to grow [in North America] with honour."

Mr Press has been with the multinational carmaker for 37 years.

He is well practiced and clearly comfortable in his role as the Japanese carmaker's ambassador to its largest market, where it sold 2.73m vehicles last year.

Ever the modest Toyota-man, Mr Press sees his elevation to the top tier of management at the Japanese vehicle maker as "recognition of the great job the North American people have done."

"I didn't get a promotion, everybody got a promotion. We all moved up," he says.

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