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3 Questions: Toyota North America's Jim Lentz

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By Associated Press

NEW YORK -- Critics frequently call the Toyota Camry boring, with an exterior design that's more staid than other cars in the highly competitive midsize car market.

But "boring" has been big business for the Camry, the nation's top-selling car, and if it's not broke, Toyota doesn't plan to fix it. Jim Lentz, Toyota's new North American chief, says it's risky business to experiment with tried-and-true styling when you're selling more than 400,000 cars per year.

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In an interview with The Associated Press at the New York International Auto Show on Wednesday, Lentz said cutting-edge style could alienate some buyers, and Toyota doesn't want to do that. Especially when there are over 5 million Camrys on the road driven by loyal buyers.

Below, more insight from Lentz into the Camry and the future of Toyota's North American manufacturing:

Q: Critics often say the Camry looks bland and old compared to the competition. Will more stylish models from other companies force Toyota to have edgier designs in the future?

A: "I think you have to measure how far you go. And the reason is that if you look at some of the competitors that really kind of changed styling in the midsize segment and kind of forced everyone to be more stylish -- they sell a much lower volume. You can be polarizing with lower volume. If you look at (Hyundai's) Sonata as an example. Great Car. And if you ask their customers why did you buy the car? They'll tell you it was styling. If you ask people that shopped it and bought something else why you didn't buy it, it's styling. If you want to sell 400,000 cars, that's not necessarily a good answer. So I think you cannot get so aggressive in styling on a huge volume car like Camry."

Lentz added that Toyota can be more aggressive in the compact and large car segments because the sales and stakes aren't as high. The next-generation of Corolla, for instance, likely will look a lot like a low-slung, futuristic concept car that Toyota unveiled in Detroit earlier this year, he said.

Q: Can you match Camry's sales increase from last year? (Toyota Camry sales totaled nearly 405,000 in 2012, up 31 percent from 2011 when a earthquake and tsunami in Japan hobbled factories and caused shortages of cars.)

A: "Not percentage increase. We wouldn't have the (factory) capacity to do that. Nor would I think there's necessarily demand to do that. Our plan is to sell about 400,000, which is about equal to last year. I think you're going to see just small incremental increases in overall Camry volumes. We still think it will be the No. 1 selling car in America.

The overall segment is actually growing. It grew tremendously last year, I think it's up probably 14 or 16 percent. So the pie is getting larger. Because of the increase in competition, our share of that pie is getting smaller. But it still allows us to maintain or have slightly incremental volume in that growing segment."

Lentz added that the Camry, redesigned last year, is still a formidable competitor in styling, handling and its interior. But he also said that Ford and Honda have great vehicles in the segment, too.

Q: The strong yen had caused Japanese automakers to produce more cars in North America. But recently the yen's weakened by about 20 percent against the U.S. dollar, helping Japanese exporters. Do you see Toyota shifting its manufacturing strategy back to Japan because of that?

A: "If you look at how much impact the yen has on my operations in North America, roughly 70 percent of what we sell is now made in North America. Domestic content is about 75 percent. It's difficult for a manufacturer to know where currency is going to be at any point and time in the future. The way we hedge against that is to build vehicles where we sell them. So whether the yen is moving up or whether the yen is moving down, we're going to be in a good position in the U.S. because a vast majority of our business is done in dollars. I think what you'll see is even more investment in the U.S."

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