Very long article with numerous tables:
Toyota brings to the US market the all-new 2020 Highlander, a 3-row SUV, with a whopping 36 MPG - at least 25% better than the next-best competitors.
It also prices the Highlander hybrid at least $15,000 less than the competition.
The outgoing Highlander hybrid had vastly inferior fuel economy and wasn’t available with front-wheel-drive (FWD), yet its hybrid take-rate grew from 6% to 8%.
Therefore, the all-new Highlander should see its hybrid take-rate increase from 8% to approximately 20%.
The otherwise superior 2020 Toyota Highlander could do even better if was packaged in different or more flexible trim/grade levels.
Everyone has gotten used to many automakers stretching fuel efficiency claims, posting numbers that are difficult to achieve on average, and that later have to be ratcheted down. With the all-new for the 2020 model year Highlander, Toyota (TM) breaks that sad industry pattern.
But first, some background. Let’s start with the three-row SUV segment in the U.S. market. As of the end of the September month, the 2019 year-to-date sales numbers looked like this:
As you can see in the table above, Toyota Highlander leads in a segment that was up 6% overall, but down 2% for the incumbents - taking out the new nameplates that entered the market in 2018 and 2019, such as Subaru Ascent, Kia Telluride, Hyundai Palisade, BMW X7, Cadillac XT6 and Lincoln Aviator. In other words, the new players took a significant bite out of this segment.
In that environment, the Toyota Highlander performed admirably in its last year before the generational shift. Sales being flat year-over-year is better than the incumbent average, and excellent considering that the outgoing generation of the Highlander was naturally dated and tired.
On New Generation Vehicles In General
Let’s discuss all-new generations of cars in the first place. Once every 5-7 years (typically), automakers launch a new-generation vehicle which replaces the previous one. In this most recent industry cycle, this kind of generational change typically brings about these changes:
The exterior gets a fresh redesign that makes the car look better and less dated.
The interior gets a very serious lift in terms of premium feel and look, and with many more features.
The overall refinement, smoothness and “driving dynamics” (steering, handling, etc.) advance one step for the better.