For years critics have been saying that a reliance on gas-guzzling but profitable sport-utility vehicles could not keep American car manufacturers afloat forever. On Monday, sales figures for the month of September came out, suggesting that the day of reckoning may be at hand. Large S.U.V. sales were down 43 percent last month from a year earlier. Automakers, of course, pointed a finger at Hurricane Katrina's effect on gas prices. But the explanation is really larger - a total failure of long-term planning.

Toyota's strategists and engineers had no idea what the 2005 weather would bring when they started working on a "21st century vehicle" in 1994. But they certainly realized that a more fuel-efficient car might be one way to succeed in a competitive market. They dedicated the resources and rolled out their first hybrid in 1997. The company spent a reported $800 million developing the Prius, ending up with roughly 650 patents on the technology. It took a little while to catch on, but Toyota nurtured and improved its product until the moment came when the new idea would finally take off. The moment has come. Prius sales were up 90 percent in September.

It's important not to fall back on stereotypes of "good" Toyota with its Prius, and "bad" General Motors with its Hummer. Toyota is a business and not an environmental charity. It sells Land Cruisers and Sequoia S.U.V.'s, both of which suffered right along with American behemoths last month, when consumers turned their backs on oversize vehicles. But Toyota had diversified with a large bet that a new product could be profitable.

G.M. says it will introduce hybrids next year. Ford expects to produce just over 20,000 hybrids this year, and plans to build 250,000 annually by the end of the decade. Meanwhile, Toyota is already doing it.

Executives have to learn to think in years and decades again. As it stands, chief financial officers sweat bullets at the end of the quarter, hoping to beat Wall Street earnings estimates. Chief executives worry about the share prices rather than the underlying health of the business. American companies can keep thinking short-term, but only if they want to get beat in the long run.


	EDITORIAL
	October 5, 2005 Running on Empty For years critics have been saying that a reliance on gas-guzzling but profitable sport-utility vehicles could not keep American car manufacturers afloat forever. On Monday, sales figures for the month of September came out, suggesting that the day of reckoning may be at hand. Large S.U.V. sales were down 43 percent last month from a year earlier. Automakers, of course, pointed a finger at Hurricane Katrina's effect on gas prices. But the explanation is really larger - a total failure of long-term planning. Toyota's strategists and engineers had no idea what the 2005 weather would bring when they started working on a "21st century vehicle" in 1994. But they certainly realized that a more fuel-efficient car might be one way to succeed in a competitive market. They dedicated the resources and rolled out their first hybrid in 1997. The company spent a reported $800 million developing the Prius, ending up with roughly 650 patents on the technology. It took a little while to catch on, but Toyota nurtured and improved its product until the moment came when the new idea would finally take off. The moment has come. Prius sales were up 90 percent in September. It's important not to fall back on stereotypes of "good" Toyota with its Prius, and "bad" General Motors with its Hummer. Toyota is a business and not an environmental charity. It sells Land Cruisers and Sequoia S.U.V.'s, both of which suffered right along with American behemoths last month, when consumers turned their backs on oversize vehicles. But Toyota had diversified with a large bet that a new product could be profitable. G.M. says it will introduce hybrids next year. Ford expects to produce just over 20,000 hybrids this year, and plans to build 250,000 annually by the end of the decade. Meanwhile, Toyota is already doing it. Executives have to learn to think in years and decades again. As it stands, chief financial officers sweat bullets at the end of the quarter, hoping to beat Wall Street earnings estimates. Chief executives worry about the share prices rather than the underlying health of the business. American companies can keep thinking short-term, but only if they want to get beat in the long run.

	Copyright 2005 The New York Times Company