Business Case Studies, Innovation and New Product Development Case Study, Toyota’s Prius: Car of the Future

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Innovation and New Product Development Case Study

Case Title:

Toyota’s Prius: Car of the Future

Publication Year : 2006

Authors: Abhijit Sinha

Industry: Automobiles

Region:US Japan

Case Code: IPD0061K

Teaching Note: Not Available

Structured Assignment: Not Available

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In 1995, Toyota undertook ‘Project Prius’, but it was not an easy task for the Japanese auto major. Satoshi Ogiso, chief engineer of the project, recalled that the first prototypes of the car had even faced starting problem. It took almost six months to roll the car. Finally, when the car started, it moved for a few yards only. It was hard to imagine that Toyota, which was known for its efficient production systems, was facing such trouble. Analysts felt that ‘Prius’ was a case of technological problems, impossible demands and multiple miscalculations. It proved how a great company could overcome obstacles and turn a dream into reality. Though ‘Prius’ represented only a small fraction of the nine million cars and trucks that the Japanese company planned to produce in 2006, it would be the first vehicle to provide a serious alternative to internal combustion engines, designed for a world of scarce oil and was branded as ‘The car for the future’. The idea of the hybrid car was conceived by Hiroshi Okuda and Fujio Cho, the two former presidents of Toyota. But, it was Katsuaki Watanabe, the chairman of Toyota, who planned to bring hybrid cars into the mainstream automobile market. He planned to make hybrid more affordable to the consumers by improving production systems and developing better technologies in batteries, motors and inverters. The quest was to produce a third generation ‘Prius’ quickly and cheaply and sell one million hybrids annually by 2010. If Katsuaki Watanabe became successful in his venture, Toyota would become the world’s finest automobile manufacturer and a great innovator. The story of the ‘Prius’ suggested that actually it was. The case study offers a scope of discussion whether Toyota would be able to bring the car in mainstream market.

Pedagogical Objectives:

  • To discuss how innovation play a key success factor in automobile industry
  • To discuss the concept of product launching in the context of automobile industry
  • To discuss the concept of hybrid car and how Toyota plan to make the hybrid technology into the mainstream automobile market
  • To discuss how an idea was visualized and then conceptualised and then turn into a reality
  • Hybrid technology and various types of hybrid technology.

Keywords : Toyota Motor Corporation; General Motor; Honda Motor Corporation; Prius; Insight; Hybrid technology; Main stream; Low emission vehicles; Innovation Management Case Study; Internal combustion engines; Greenhouse gas; Tribrid technology; Mibrid technology; Hydrobrid technology; Project G21


  • Toyota motor corporation
  • Hybrid car: tale of a 21st century car
  • The birth of the first hybrid car: Toyota's Prius
  • Strategic initiatives
  • Prius: going mainstream

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