2007 Chicago Auto Show: Don Esmond Intros 2008 Toyota Highlander

Senior Vice President of Automotive Operations Toyota Motor Sales, U.S.A., Inc. 2008 Toyota Highlander Reveal 2007 Chicago Auto Show, McCormick Place, February 7, 2007

Thanks, Irv, and good morning everyone. Thanks for joining us for the opening press conference of the 99th Chicago Auto Show, and for the world premiere of the all-new 2008 Toyota Highlander and Highlander Hybrid.

Last year, right here, we unveiled the all-new Tundra. That event marked the official kick-off of the single-most important launch in Toyota's 50-year history.

Not only was it fitting to stage that world premiere here in Chicago, it is appropriate that as we meet again this year for the premiere of Highlander, the first Tundras are now arriving at dealerships.

The first-generation Highlander was launched in 2001 to give buyers a real choice in the highly competitive mid-size SUV segment.

With more and more buyers entering the segment from passenger cars, it made sense to diversify our line-up.

For buyers seeking the real-deal in traditional mid-size SUV performance, we offered 4Runner. For buyers demanding the image and versatility of an SUV, but who prioritize the ride, handling and comfort of a premium sedan, we offered Highlander.

The arrival of FJ last year gave us one of the industry's only three-vehicle mid-SUV line-ups, allowing us to diversify our portfolio even further.

Secondly, and equally significant, the Highlander Hybrid, Camry Hybrid and Prius together give Toyota Division the only, three-vehicle hybrid line-up in the industry. Last year, these vehicles posted combined sales of more than 170,000 units, accounting for about 67 percent of all hybrids sold in the U.S.

Of that total, you might be surprised to know that Highlander accounted for more than 31,000 units, making it the second best-selling hybrid in the U.S., behind only Prius.

This year, our combined Toyota/Lexus hybrid sales will exceed a quarter-million. That's because we believe mainstream new-car buyers have discovered hybrids. They are actively cross-shopping them in two of the industry's highest-volume segments. In fact, Prius has higher long-term buyer intentions than Corolla, the second-best-selling vehicle in our lineup.

This significant penetration of hybrid sales makes a statement that mainstream buyers have an awareness and a desire for innovation and advanced technology that is user-friendly and makes a difference in their lives. The new Highlander will appeal to that awareness and desire while establishing a clearer differentiation between our three mid-size offerings.

This move, up-scale and up-market, was a product of listening carefully to our customers and, more importantly, to those customers who shopped Highlander, but purchased something else.

Customers who rejected Highlander in the past told us they needed to be inspired by their SUV. They wanted a roomier and more comfortable interior with surprising innovations and versatility. They told us to give Highlander more power, without compromising economy.

Finally, and quite clearly, they told us that the next Highlander needed to make a more forceful, more compelling styling statement, both inside and out.

We were happy to oblige. Ladies and gentlemen, the 2008 Toyota Highlander…

The 2008 Highlander takes the car-based SUV concept to a new level. I say that with conviction. Because it's a category we invented.

The new Highlander is significantly larger and roomier and more powerful than the vehicle it replaces. Yet its fuel efficiency is virtually unchanged. It is noticeably quieter, smarter and more versatile.

It will offer the highest level of standard safety equipment in the segment in a segment where safety is at the top of purchase considerations.

And it's all wrapped in a package styled for buyers to whom design is a motivation.

The development of the new Highlander was driven by four words: "Smart in, strong out." Smart on the inside, strong on the outside.

On the outside, Highlander moves away from traditional SUV styling cues of "tough" and "rugged," to a look and feel that is intelligent and advanced.

Our Calty Design Center in California sculpted clean, crisp lines, a wide, stable stance, and muscular contours to give Highlander a dynamic personality.

Highlander rides on an all-new platform derived from the current Camry and Avalon. It is nearly four inches longer and three inches wider, with an inch more ground clearance and three inches of additional wheelbase.

Engineers took full advantage of Highlander's substantial dimensions by increasing total interior volume by nearly 12 cubic feet. Design intelligence is carried through to the interior, where smart and sophisticated blend with practical, flexible and versatile. The passenger compartment is open and airy, with expansive leg and shoulder room.

Convenient and innovative interior features such as flexible seating arrangements, and ease of entry and exit, were directly related to customer input.

For example, Highlander's second-row features captain's chairs that, if needed, convert to a bench-seat for three passengers with a segment-first "Center Stow" seat.

The folding seat, when not in use, is hidden in a compartment under the front center console. In its place, passengers can easily snap in a storage tray or choose to leave the area open as a walk-through to the third row, now much more accessible for kids.

The second row also slides forward and back and reclines up to 14 degrees. Clever and convenient standard features include a third-row bench seat with foldable headrests for a flat rear cargo area, a rear glass hatch for quick access to the back on Sport and Limited models, and Smart Start and Entry for Limited and all hybrid models.

But more important than getting to your destination quickly, stylishly or comfortably, is getting there safely.

Highlander will have no equal to its comprehensive list of standard safety features. It will provide a total of seven airbags, including a driver's knee airbag and roll-sensing side curtain airbags for all three rows.

As with all Toyota SUVs for the last three years, Highlander will provide Toyota's STAR safety system, featuring anti-lock brakes, traction control, electronic brake-force distribution, brake assist, and, for the first time, enhanced vehicle stability control with electronic power steering.

On all models except the base model, it will provide a stand-alone backup camera with a multi-information screen, not tied to a navigation system.

And, Highlander will have the distinction of being the first Toyota Division vehicle to feature both active head restraints and a new hood and fender system designed to crumple on impact with a pedestrian.

When Highlander arrives in July, it will be offered in Base, Sport and Limited grades. All three grades will be powered by a new 3.5-liter V6 that delivers an impressive 270 horsepower, a 55 horsepower gain over the previous generation's 3.3-liter engine.

Two months later, the all-new Highlander Hybrid, like the one we have on stage today, will arrive at dealerships.

Offered in both Base and Limited grades, all Highlander Hybrids will feature Toyota's advanced VDIM stability system that integrates full-time four-wheel drive, electronic brake and throttle control with true electronically controlled, active steering.

Highlander's advanced Hybrid Synergy Drive system has been extensively upgraded and refined for 2008 for both power and economy, including a first-ever full EV mode.

Not only were engineers able to increase output to 270 horsepower, they were able to maintain the 2007 Highlander Hybrid's impressive fuel economy of 31 city and 27 highway.

By a large measure, the 2008 Highlander Hybrid will remain the most-fuel efficient mid-size SUV.

As you can see, the new Highlander has raised the bar significantly in the mid-size SUV class. Most notably, Highlander reflects a shift in strategy by standardizing a wide array of key features that are typically offered as options.

Last year, we did the same with RAV4. And in about a year, we'll do the same with both Land Cruiser and Sequoia.

Sport utilities account for nearly a fourth of the new-vehicle market. The Toyota Division now markets a six-vehicle SUV lineup. Because of its range and diversity, we can appeal to specific buyer demographics and life-stages. It is a line-up that gives us enormous flexibility in responding to shifts in the marketplace. And, it's a line-up we are committed to keeping fresh and at the front of the pack.

I'd like to recognize, and thank, the person most responsible for moving the new Highlander to the front of the pack. Ladies and gentlemen, it is my pleasure to introduce the executive chief engineer for the second-generation Highlander, Mr. Okane.

Mr. Okane, thanks for taking time out of your schedule to join us this morning.

And, thanks to all of you for joining us today for the opening of what I am sure will be a terrific auto show. I'll now turn the meeting back over to Irv Miller.

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