Can Tundra overcome Domestic loyalty?

[Variance 0]

Can Tundra overcome Domestic loyalty?

Toyota hopes to double annual sales with new Tundra

By MARK RECHTIN | AUTOMOTIVE NEWS

6:15 am, February 27, 2006

Traditionally cautious Toyota is taking a gamble on the redesigned 2007 Tundra.

Toyota's new assembly plant in San Antonio will double Tundra production, so the automaker must find lots more buyers for its full-sized pickup.

The problem: The current Tundra is not luring large numbers of Big 3 truck loyalists out of their pickups.

Toyota has been surprised by its inability to win over consumers who already own import-brand cars, says Ernest Bastien, vice president of Toyota's vehicle operations group. In 2005, Toyota sold Tundras to just 8.4 percent of full-sized pickup buyers who already had an import-brand vehicle in their garage, he says.

Toyota also has come up short in attracting first-time buyers of full-sized pickups. "That's where we've missed our greatest opportunities for growth," Bastien says.

Yet Toyota executives are confident they can add 150,000 Tundra buyers a year.

The redesigned truck is due in early 2007. With a 5.7-liter engine, towing capacity of 10,000 pounds and a slew of new model variants, they say the redesigned Tundra should overcome the shortcomings that have hampered its predecessors.

Few domestic trades

Toyota sold 126,529 Tundras last year, a record for the truck. But a surprisingly small number of those buyers were conquested from the Big 3.

Of those who bought a Tundra, just 8 percent traded in a Ford F-150, and fewer than 6 percent left a Chevrolet Silverado, according to Toyota data. By contrast, 30 percent of Tundra purchasers traded in another Tundra or a compact Tacoma pickup. Many more customers were import-brand loyalists who would not buy a big truck unless Toyota made it.

"We've had some success in appealing to traditional domestic owners," says Bastien. "But it has been limited because body and engine configurations were expanding faster than we were able to introduce them."

In the case of the popular four-door configuration, Toyota was late to the party and missed a big opportunity to lure domestic truck owners when it finally arrived in late 2003.

Toyota found that more than half the customers who rejected the Tundra said it did not offer the configuration they needed or that the dealer did not have the right model in inventory.

Another major reason for rejection was the Tundra's low towing capacity. The new model, with more configurations and higher towing capacity, will address both those concerns, Bastien says.

Toyota also loses some rural customers because it lacks a nearby dealership. Toyota has about 1,200 dealerships, compared with 3,800 for Ford, 4,100 for Chevrolet and 2,900 for Dodge. Toyota is adding rural satellite dealerships to appeal to farmers and ranchers. But that plan is expected to add a couple of dozen stores at most.

Then there's the matter of overcoming generations of brand loyalty to Ford, Chevrolet and Dodge, observes Leonard Northcutt, who owns Toyota and GM dealerships in Enid, Okla.

"There is a large cultural difference between Toyota and GM customers," Northcutt says. His Tundra sales are predominantly to Toyota loyalists.

Toyota builds the Tundra in Indiana and Texas. But, Northcutt says, "Buy American" sympathies are less important than product attributes.

More than half of domestic truck buyers looked only at replacing their existing truck with the same nameplate, according to the 2005 New Vehicle Customer Study by automotive consulting firm Maritz Research. About 78 percent disposed of a domestic vehicle when buying a domestic-brand full-sized truck.

On the other hand, Toyota is encouraged by Tundra owners' loyalty. Since the launch of the four-dour Double Cab, 43 percent of Tundra buyers were Tundra owners. For a vehicle with a short sales history, Tundra is competitive with the Ford F-150 at 54 percent loyalty and Chevrolet Silverado at 46 percent, according to Toyota data.

The numbers game

John Wolkonowicz, senior market analyst with Global Insight in Lexington, Mass., doesn't think the new Tundra will win over Big 3 loyalists. He sees the Tundra expanding the overall full-sized truck market, rather than securing a larger piece of the same-sized pie.

Wolkonowicz says shoppers born between 1978 and 1989 love pickups, and there are plenty of white-collar folks with horse trailers and boats who have been waiting for a larger Tundra to arrive. "There is no reason for that truck not to be a success. But customers are going to come from different places than (Toyota) might expect," Wolkonowicz adds.

The huge market for pickups is working in Toyota's favor, says Jim Hossack, an analyst with AutoPacific in Tustin, Calif. "The full-sized half-ton truck universe is 2 million pieces (per year), so Toyota going from 100,000 to 250,000 units is doable," Hossack notes.

"Big 3 truck owners have had a lot of problems, whether it's with GM's engines and transmissions, Ford's Triton with the spark plugs that pop out, or general disenchantment with Dodge quality," says Hossack, who owns two GMC pickups with recurring glitches.

"The Big 3 have given Toyota an opening with their less-than-ideal quality."

Link: http://www.autoweek.com/apps/pbcs.dll/arti...E/60227002/1041

[siegen 20]

5.7L engine? Did Toyota develope their own or is this a GM variant?

[Variance 0]

5.7L engine? Did Toyota develope their own or is this a GM variant?

I don't know if you're being facetious or not but this is a Toyota engine.

[BrewSwillis 0]

Can Tundra overcome Domestic loyalty? 

"Big 3 truck owners have had a lot of problems, whether it's with GM's engines and transmissions, Ford's Triton with the spark plugs that pop out, or general disenchantment with Dodge quality," says Hossack, who owns two GMC pickups with recurring glitches.

"The Big 3 have given Toyota an opening with their less-than-ideal quality."

Nice random quote asshole! Where is the evidence to back this up?? I guess Toyota Tundra's don't have problems.

How come this "anal-ist" has "recurring glitches" with his 2 GMC pickups, and yet he hasn't switched over to the almghty Toyota??.....because he knows that they are not any better!

[w00t_man 0]

Question answered in one word: No.

[siegen 20]

I don't know if you're being facetious or not but this is a Toyota engine.

I was being serious. I have heard of the GM Toyota partnership, and didn't know if maybe the Toyota engine had the heart of a common GM 350 V8.

[cmattson 0]

On the other hand, Toyota is encouraged by Tundra owners' loyalty. Since the launch of the four-dour Double Cab, 43 percent of Tundra buyers were Tundra owners. For a vehicle with a short sales history, Tundra is competitive with the Ford F-150 at 54 percent loyalty and Chevrolet Silverado at 46 percent, according to Toyota data.

Since when is 43 percent loyalty even in the frigging ballpark, let alone "competitive" with the 54 percent that Ford enjoys?!? That is a glaringly large difference to me. And how would Toyota arrive at these numbers pe se? Seeing that GM and Ford EACH sell 1m+ trucks each year, I highly doubt that Ford & GM are anywhere close to 50% loyalty. A "short sales history"? Geez, the Tundra's only been on sale for 10 FULL FREAKING YEARS. That's a "short sales history"?! When the Tundra initially debuted, it had 9x,xxx sales/year. Here we are 10 years later and it's at 12x,xxx? Wow. Way to knock yourslef out guys. Don't break your arm patting yourself on the back.

Goes to reinforce my opinion (even more strongly) that any number from Toyota isn't worth the paper it's printed on.

[Guest lance armstrong's Testicles]

I was being serious. I have heard of the GM Toyota partnership, and didn't know if maybe the Toyota engine had the heart of a common GM 350 V8.

<{POST_SNAPBACK}>

or you could be an idiot, or a moron? maybe both!

[El Scorcho 0]

or you could be an idiot, or a moron? maybe both!

Oh come now, that wasn't called for. It's a valid question seeing as how they did partner for some stuff and GM does have a 5.7L V8 in their full sizers. No more personal attacks pleeze, k? thx.

[siegen 20]

or you could be an idiot, or a moron? maybe both!

Not this guy again. Why don't you try to contribute to something, rather than just make smartass comments?

Btw, love the sig.

[Snate 0]

The question nobody seems to answer is whats going to happen to Toyota's current fans of the conservative Tundra when they try to go all macho...its quite possible they will lose some repeat sales there.

[turbo200 6]

The question nobody seems to answer is whats going to happen to Toyota's current fans of the conservative Tundra when they try to go all macho...its quite possible they will lose some repeat sales there.

That's because there simply is no answer until Toyota tests this out. They are taking a risk by introducing something significantly larger and more "macho", and hoping the risk pays dividends in increased share and volume. I think the risk will pay off.

[BrewSwillis 0]

Not this guy again. Why don't you try to contribute to something, rather than just make smartass comments?

Btw, love the sig.

Creed huh?

Maybe this guy is Scott Stapp.....and he's just drunk again?

[Hudson 16]

Creed huh?

Maybe this guy is Scott Stapp.....and he's just drunk again?

Except for the fact that Scott Stapp doesn't know squat about cars....hey, you might have a point there!

[The O.C. 2]

That's because there simply is no answer until Toyota tests this out. They are taking a risk by introducing something significantly larger and more "macho", and hoping the risk pays dividends in increased share and volume. I think the risk will pay off.

Couple of points......

Can they overcome domestic loyalty? On a smaller scale, YES. My friend went from GM and Ford trucks to Toyota because of his perception that the Toyota would be more reliable (he had numerous problems with his Chevy S-10) and that it was much more luxurious to ride in and drive than the Silverados and F-150s he test drove. I'm sure he's not the ONLY one out there with those experiences....

Do they expect to sell 900K Tundras? NO. Toyota isn't out to outsell the domestics. They do expect to make an impact, however. Toyota has a business plan for this truck that shows them how many they need to sell to make an appropriate R.O.I. for the program. That, more than likely, is their real concern.

Will current Tundra owners be turned off by the bigger and more macho look? Time will tell that as Turbo alluded to. However, when I showed the new Tundra to my friend with the current one, he liked it....but was really attracted to the increased size and towing ability (he's looking to upgrade to a bigger boat.) He actually loved the fact that it looked kinda like a Ram.

[Hudson 16]

Couple of points......

Can they overcome domestic loyalty?  On a smaller scale, YES.  My friend went from GM and Ford trucks to Toyota because of his perception that the Toyota would be more reliable (he had numerous problems with his Chevy S-10) and that it was much more luxurious to ride in and drive than the Silverados and F-150s he test drove.  I'm sure he's not the ONLY one out there with those experiences....

Do they expect to sell 900K Tundras?  NO.  Toyota isn't out to outsell the domestics.  They do expect to make an impact, however.  Toyota has a business plan for this truck that shows them how many they need to sell to make an appropriate R.O.I. for the program.  That, more than likely, is their real concern.

Will current Tundra owners be turned off by the bigger and more macho look?  Time will tell that as Turbo alluded to.  However, when I showed the new Tundra to my friend with the current one, he liked it....but was really attracted to the increased size and towing ability (he's looking to upgrade to a bigger boat.)  He actually loved the fact that it looked kinda like a Ram.

I believe that Toyota will continue to increase it's full-sized market share little by little. While the above example shows that pickup buyers will cross shop brands, the "extreme" owner loyalty comes in the full-sized pickups. I don't see many Silverado or F-Series buyers moving to a Tundra (although a few will), I see more coming from Ram Trucks and even more coming from Colorado, Ranger, Tacoma, and Frontier owners who have outgrown their "little" trucks...just like the S10 example above.

Not only doesn't Toyota expect to sell 900,000 trucks soon...they can't. By the end of 2007, Toyota will have the capacity to build around 300,000 Tundras. They'll expand San Antonio and add another plant before they can even think of rivaling GM and Ford's full-sized truck market.

I think the first-generation Tundra's styling was "macho" and rugged, but 7 years later, it's soft compared to the competition. I don't see why buyers would be turned off by this move to a more rugged look...Dodge buyers appreciated the change in 1993 and Ford buyers don't seem to have been turned off by the latest restyling of the F-Series.

[FUTURE_OF_GM 26]

The article is filled with 'random facts' READ: opinions and quotes.

My favorite is this SUSPENSFUL ENDING!!!!! (enter echoed voice and lightning)

"Big 3 truck owners have had a lot of problems, whether it's with GM's engines and transmissions, Ford's Triton with the spark plugs that pop out, or general disenchantment with Dodge quality," says Hossack, who owns two GMC pickups with recurring glitches.

"The Big 3 have given Toyota an opening with their less-than-ideal quality."

Wonderful way to end the article as a bias against GM, Ford and Dodge. And they did it so well, by saying this guy OWNS GMCs (Loyalist: "Hey this guy is one of us! He must not be lieing!")

I guess that "Most dependable, longest lasting truck on the road" doesn't count for much in these journalists/analysts world of formulated facts.

Then you glance back and see how they WERE SURE TO INCLUDE DODGE AND FORD in the criticism.

THIS bias and these kinds of articles is why the resounding answer to the question posed by the article is a YES

People like this will make SURE Toyota has their way in the truck market an that the loyalists fade faster than a Toyota engine running on 3 month old Quaker State oil.

Do they expect to sell 900K Tundras? NO. Toyota isn't out to outsell the domestics. They do expect to make an impact, however. Toyota has a business plan for this truck that shows them how many they need to sell to make an appropriate R.O.I. for the program. That, more than likely, is their real concern.

Gonna hafta go with NO on that one.... Toyota will sell as MANY Tundras as they can at all costs. Regardless where it leaves Detroit. If it's as successful as I predict, they'll continue uping production yearly (And this is somewhat already planned with the rumors of HD varients)

Toyota is a business, and one that wants it all, for them to simple be 'not aiming to outsell Detroit' would be counter to EVERY move they've ever made.

He actually loved the fact that it looked kinda like a Ram.

If he likes the look of the Ram, then he should buy the Ram.

***Toyota could put their name on ANYTHING and naive americans would FLOCK to the alter. They are one of the only companies that have the legacy (albeit undeserved) of guranteeing a certain degree of success with anything they do.

[Petra 0]

The article is filled with 'random facts' READ: opinions and quotes.

...I guess that "Most dependable, longest lasting truck on the road" doesn't count for much in these journalists/analysts world of formulated facts.

The statement that Chevys are "The most dependable, longest lasting truck on the road" is itself specious. Can you prove it to be true?

At any rate, I'm inclined to agree with Hudson, O.C and the others here: The Tundra will not be a major threat to the Domestics rights out of the gate. Think about it: was the Camry a threat from the moment it debuted? Of course not; it took two or three generations of excellent Camrys and dissapointing Domestics for it to become a true competitor. Like the Camry, the Tundra will slowly chip away at the Domestics, taking a few thousand more sales every year. Unless Detroit can come up with something totally invincible, then, yes, the Tundra will become a serious competitor in about 10 years. Still, that's plenty of time for the Domestics to get their act together in other ways and other market segments, which they desprately need to do. It isn't as though it's impossible to see where this all is leading, after all.

[Hudson 16]

Since when is 43 percent loyalty even in the frigging ballpark, let alone "competitive" with the 54 percent that Ford enjoys?!?  That is a glaringly large difference to me.  And how would Toyota arrive at these numbers pe se?  Seeing that GM and Ford EACH sell 1m+ trucks each year, I highly doubt that Ford & GM are anywhere close to 50% loyalty.  A "short sales history"?  Geez, the Tundra's only been on sale for 10 FULL FREAKING YEARS.  That's a "short sales history"?! When the Tundra initially debuted, it had 9x,xxx sales/year.  Here we are 10 years later and it's at 12x,xxx?  Wow.  Way to knock yourslef out guys.  Don't break your arm patting yourself on the back.

Goes to reinforce my opinion (even more strongly) that any number from Toyota isn't worth the paper it's printed on.

The Tundra went on sale in 1999, that wasn't 10 years ago...and ONE generation of a truck is a "short sales history."

And the reason why production has plateaued at just under 130,000 units is something called CAPACITY. They can't build any more. That's why the NEW Tundra will have TWO plants.

[El Scorcho 0]

Think about it: was the Camry a threat from the moment it debuted? Of course not; it took two or three generations of excellent Camrys and dissapointing Domestics for it to become a true competitor. Like the Camry, the Tundra will slowly chip away at the Domestics, taking a few thousand more sales every year.

I have to disagree with you on this one. The domestic trucks have always been class-leading, and the new 900s and F-series are only going to up the ante. As you can see by the GMT-900 SUVs, GM will not be resting on its laurels, while we know Ford won't be so willing to give up its title of best selling full-size truck.

[El Scorcho 0]

The Tundra went on sale in 1999, that wasn't 10 years ago...and ONE generation of a truck is a "short sales history."

Appears it was just a confusion between the Tundra and T100.

[Hudson 16]

Do they expect to sell 900K Tundras?  NO.  Toyota isn't out to outsell the domestics.  They do expect to make an impact, however.  Toyota has a business plan for this truck that shows them how many they need to sell to make an appropriate R.O.I. for the program.  That, more than likely, is their real concern.

Gonna hafta go with NO on that one.... Toyota will sell as MANY Tundras as they can at all costs. Regardless where it leaves Detroit. If it's as successful as I predict, they'll continue uping production yearly (And this is somewhat already planned with the rumors of HD varients)

What's the problem with OC's comment? Toyota does not expect to...nor do they have the capability to...sell 900,000 Tundras in the upcoming generation of the pickup. GM and Ford have been building their full-sized pickups for decades and have established four or five plants capable of turning out over a million pickups each. Toyota, on the other hand, will open their SECOND plant for Tundras later this year. That will give them the capacity to build about 300,000 Tundras.

So the answer is NO, Toyota is not expecting to sell 900,000 Tundras...or even any number close to the volume of Ford or Chevrolet. They will, however, outsell GMC in about two years. Reaching for the Big2 will take another couple of plants, and that's just not on the books yet. You'll have to wait until the FOLLOWING generation at the earliest.

Sure, Toyota's in business to make money. If that means building 900,000 Tundras and making a couple thousand each on them, then they'll do it. If that means selling 300,000 and making more than three times more than at 900,000, they might just do that instead of investing the money on plants and employees who won't add anything to the corporate bottom line. Market share alone doesn't make a good company...profit does.

[chevyman62 0]

I seriously doubt Toyota will be able to do it. With the GMT-900 Trucks coming and with the F-150, I don't think they'll get too many Domestic Trades. I say they'll just get people trading in their old Tundra's for the new one. I hope so at least...haha

[FUTURE_OF_GM 26]

You know... I thought more about this asshole analyst and came to this conclusion..

The ending of the article was PURPOSEFUL, to make domestic buyers think... As in; "You know; he's right"

And secondly; SINCE the domestics have given the Tundra the 'opportunity' borne of poor quality...Gee, it took the press what? 2 weeks to throw this argument in our faces for no reason (No reason because domestic trucks ARE quality) Then apparently Toyota has done THE same in the coveted MID SIZE CAR SEGMENT for Detroit, since their Camry suffers so badly from sludge problems. OR they've also done THE SAME in the hot HYBRID car segment since Priuses, among other things, seem to be STALLING in freeway traffic.

Oh wait.... You say NO, they haven't... OH WAIT, I FORGOT!!!! The press buries this stuff, it wont be thrown in their faces and played on like Detroits supposed short comings will be.

The ducks are in line folks... I was reading the Car & Driver Truck/SUV buyers guide, where C&D did an excellent job of casting a negative shadow over EVERY domestic vehicle (Including the GMT-900s) and headlined the Tundra article with "First in quality" with quotes throughout like "The quality alone would give anyone reason to consider this truck over ANYTHING from Detroit."

So folks, the stage is set.... Toyota, along with their PEERS in the media will exploit the 'quality advantage' over Detroit and you'll see the curve of domestics buyers falling faster than the fuel gauge in a Hummer H2. And that'll be folowed by a pleathora of articles about how Detroit is so useless and how MORE people would buy Tundras if capacity didn't hinder and how a lot of domestic sales are fleet sales. History repeats itself and we've seen this STORY far too many times already.

Because I know... YOU KNOW and THEY know that all they have to do is mention Toyota, quality and Detroit with LACK THERE OF and the public is sold faster than the first 1000 Solstices. Hook, line and sinker.

It isn't as though it's impossible to see where this all is leading, after all.

That's right... It's leading to an ever spoon-fed-ignorant public and to ALL of us driving imported cars..

Do you guys HONESTLY think that things are EVER going to change for Ford and GM???? Do you HONESTLY think that the MEDIA would let that happen??? Sure, they'll throw GM and Ford a few bones to satisfy the aging loyalists, but after that it's; hello NO DOMESTIC car industry. Well, unless you're a naive analyst or professor that thinks the imports qualify as 'new domestics'

This WILL BE NO CAMRY.... Toyota is ALREADY established and the media blitz IN FAVOR of them and against all else has been building and forging itself into a god-like entity thta IS bulletproof.

I give it 5 years, IF that long, before Toyota has finished GM and Ford off (And by that I mean, they'll dominate the entire market, be bigger and be considered by default BETTER by EVERYONE)

They'll play on the 'domestics poor quality' myth from the 70s & 80s (You know--DESPITE the ACTUAL scores that are now available EVERYWHERE) They'll play on the 'we're an american company building american products' field and counter that with COUNTLESS examples of GM outsourcing (See Hudson here or in national press; Jamie Kittman of automobile for these) just like they've begun to do and they'll play on the consumers need to be right by implying that BETTER people buy imports, as they have BEEN doing for years. Then you'll get all of the subjective measures like 'how soft the dash is" or how shiney the frame is" or something else completely irrelevant.

For example, in the C&D truck/SUV guide tonight they sighted the TUndra as Toyota's first fullsize truck and a bold move... NO mention of the &#036;h&#33; bag T100.... Now if that would've been GM, we'd have had 5-6 paragraphs worth of valiant attempt at an entry-level luxury cars, Allantes, Celebrities and Citations thrown in our face (To reinforce the anti-Detroit bias)

It's pure garbage and it's only going to get worse.

Hudson to the rescue...

The Tundra went on sale in 1999, that wasn't 10 years ago...and ONE generation of a truck is a "short sales history."

8 years.... WOW! I thought those imports were very FAST in reinventing their products!!! 8, 10 years ago... It's pretty much the same.

And the reason why production has plateaued at just under 130,000 units is something called CAPACITY. They can't build any more. That's why the NEW Tundra will have TWO plants.

Of COURSE... And I'm sure they'll sell all they can build!!! (Given the amount of FLAME FANNING it'll have)

As you can see by the GMT-900 SUVs, GM will not be resting on its laurels, while we know Ford won't be so willing to give up its title of best selling full-size truck.

I give it 2 comparison tests and the Tundra will be ranked first....

Think about this: the major publications said that the ONLY reason the F-150 kept it's edge over the Titan (in their eyes) was that it is available in MULTIPLE configurations... With the Tundra, that problem is solved.

It'll be JUST like anything else pertaining to the imports verses the domestics: LIKE TAKING CANDY FROM A BOUND AND TIED BABY.

Market share alone doesn't make a good company...profit does.

WELL HOT DAMN!!!! All those MARKET SHARE ARTICLES CHASTISING DETROIT FOR THEIR "PITIFUL" SHARE NUMBERS could've fooled me.

I seriously doubt Toyota will be able to do it. With the GMT-900 Trucks coming and with the F-150, I don't think they'll get too many Domestic Trades. I say they'll just get people trading in their old Tundra's for the new one. I hope so at least...haha

They'll get the YOUNG, therefore the domestics will suffer the same fate as Buick is now..

[Petra 0]

No reason because domestic trucks ARE quality

I asked you to prove this before. Can you prove it, or are you just ranting?