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Discussion Starter · #1 · (Edited)
Mark Rechtin | Automotive News / April 16, 2007 - 1:00 am


NEW YORK -- Three months into the launch of its redesigned Tundra, Toyota is scrambling to revamp its model mix and make a series of other fixes on the run.

Toyota executives admit they have made missteps in their first venture into the full-sized pickup fray.

"As we try to go from 5 percent share to 10 percent segment share, we are learning the hard way," Jim Farley, Toyota Division vice president of marketing, said at the New York auto show.

Toyota is selling more CrewMax units than it can supply. Demand for the top-dog 5.7-liter V-8 also is outstripping supply. And Toyota is cutting production of standard-cab models because it is selling fewer than expected.

But a lot has gone right since the Tundra's launch in February. The company sold 13,196 Tundras in March, 12 percent above sales of the old Tundra in March 2006. Based on availability and inventories, Toyota says that it's on the right track, and that the Tundra will be selling at its planned 200,000 annual pace by summer.

But in studying its miscalculations, Toyota is noticing some intriguing trends.

The extended-cab versions represent 40 percent of sales, as planned. But the CrewMax has proved more popular than expected, said Ernest Bastien, Toyota's vice president of vehicle operations. That presents a supply problem.

The production ramp-up calls for Toyota's Princeton, Ind., plant to build the CrewMax, while the new San Antonio plant gets its feet wet with the standard-cab and extended-cab versions. San Antonio won't build the CrewMax until August.

"We didn't come to the prizefight with all our tools," Bastien said.

And by engaging in the "bar stool debate" with its 5.7-liter V-8, Toyota has sparked more demand for that engine than expected.

"The 5.7 has been 70 to 80 percent of our mix, and we thought it would be 50 or 60 percent," Farley said. "The 4.7 (V-8) and V-6 are not as popular."

On the flip side, the basic two-door model has missed its sales goals, even though it was expected to account for only 10 percent of the mix. Typical basic-truck buyers don't want a lot of extras, even when extras are rolled into the basic sticker price.

The regular cab Tundra starts at $22,935, including shipping. Chevrolet's new Silverado pickup starts at $18,760, with shipping.

Standard goodies

Standard safety features on the Toyota include antilock brakes, brake assist, electronic brake force distribution, vehicle stability control, traction control, and seat and side curtain airbags. Most of those features are optional on domestic trucks.

But Toyota won't decontent the big truck.

"We're not taking the safety equipment off Tundra" to hit a lower entry price, Bastien said. Instead, Toyota is "backing off" production of the standard-cab model. Toyota will push budget-minded shoppers into the largest Tacoma compact pickup, he said. The Tacoma stickers from $14,825 to $25,820 including shipping.

Most frustrating to Toyota is that the number of days Tundras sit on dealer lots is higher than expected.

"Traffic counts have been pretty high, but these (buyers) will wait until you have the exact truck that they want," Farley said.

Toyota needs to do better at tracking regional inventories, so when buyers want a specific package it can get the vehicle from the regional pool to the dealer as fast as possible. Toyota customers traditionally are happy to buy from whatever the dealer had in stock. That's proving different with buyers of full-sized pickups.

More surprises

Meanwhile, transaction prices have varied. Depending upon region, Farley said, prices for identical trucks have swung as much as $2,000. Buyers in some regions appear more willing to pay for standard safety items, he said.

Another surprise: In the past, trade-ins usually accompanied about 40 percent of Tundra sales. In the case of the new Tundra, it is closer to 60 percent. Dealers are scrambling to cope with the additional used vehicles, including lots of domestic pickups.

Many of those owners owe more on their trade-in vehicles than those vehicles are worth, making appraisals and negotiations more difficult for dealers.

Toyota's Farley notes one other surprise -- the amount of Internet shopping done by full-sized truck buyers. He says online visits for the Tundra are about the same as for Camry, the best-selling car in America.

"We have changed our thinking in terms of interactive marketing for Tundra," Farley said. "We got as many eyeballs on AOL as we did for a primetime network spot. Now Internet is as important as broadcast TV."

(link - subscription required) http://www.autonews.com/apps/pbcs.dll/article?AID=/20070416/SUB/70413088/1128/BREAKING&refsect=BREAKING
 

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I should go into auto business managment. How did I know that the Crewmax was going to be the most in-demand Tundra model? (I'm serious!)

And why would anyone buy a 4.7 when the 5.7 is just $1200 more?
 

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Most truck buyers around here drive extended cabs as work trucks, and crew cabs as family trucks. Very few regular cabs are sold around here.

I would think Toyota would sell more "family trucks" which would be the crewmax.

"We didn't come to the prizefight with all our tools," Bastien said.
I like this quote.
 

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The 5.7L comprises 70 to 80 percent of Tundra sales? Not good for Detroit's trucks. If this trend continues, perception will start to change, and when Tundra is mentioned, people will think "big power, big torque, big towing".

This is also not good because Toyota is selling a lot of it's higher end Tundras, equipped with the 5.7L. This means higher profits.
 

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So they're selling because they're not work trucks, but because of the power?

Makes sense, no one wants to use Toyota "trucks" in work biz.

GM should start shoving that 6.2 in it's trucks.
 

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FordFan said:
So they're selling because they're not work trucks, but because of the power?

Makes sense, no one wants to use Toyota "trucks" in work biz.

GM should start shoving that 6.2 in it's trucks.
Ha, GM can just stand next to their 2500 and 3500's, clear their throats and smile.
 

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Realist said:
The 5.7L comprises 70 to 80 percent of Tundra sales? Not good for Detroit's trucks. If this trend continues, perception will start to change, and when Tundra is mentioned, people will think "big power, big torque, big towing".
I don't think that's going to happen

This is also not good because Toyota is selling a lot of it's higher end Tundras, equipped with the 5.7L. This means higher profits.
Yes, this is good for Toyota in one sense. However, it also means that they're not moving as many base models as they hoped. They need to sell one base trim (decontended to match other base trucks) to generate volume.
 

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guitarlix said:
I should go into auto business managment. How did I know that the Crewmax was going to be the most in-demand Tundra model? (I'm serious!)

And why would anyone buy a 4.7 when the 5.7 is just $1200 more?
It seems that marketing/planning/production made a big oops in not starting out with the top of the line models first. Certainly having to ramp up SA was part of the equation but in all other launches they always start with the most loaded versions first and grab all the 'gotta-haves' normally at full sticker.

Then after the excitement dies down a little the middle of the line and standard versions begin to fill out the product line. We're actually seeing this occur as CrewMax's sell out and Reg Cabs gather cobwebs.

Now in 6-18 mo's they'll need all of the Dbl Cabs and Reg Cabs they can get if the pricing is right.

The 4.7L is a dinosaur. The sooner it's gone the better ( 5.0L in the works? ). V6's are just for one product Reg Cab work trucks.
 

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guitarlix said:
I don't think that's going to happen

Yes, this is good for Toyota in one sense. However, it also means that they're not moving as many base models as they hoped. They need to sell one base trim (decontended to match other base trucks) to generate volume.
Not now, but like I said ... if this trend continues long-term, perception will start to change towards that, since most Tundras on the road will be 5.7L models.

I meant to say that it's not good for the domestic makers when Toyota is selling it's high profit models. It's obviously good for Toyota.
 

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PhishPhood said:
The 4.7L is a dinosaur. The sooner it's gone the better ( 5.0L in the works? ). V6's are just for one product Reg Cab work trucks.
Dinosaur indeed. Let's hope they have a replacement sooner rather than later.
 

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Realist said:
Dinosaur indeed. Let's hope they have a replacement sooner rather than later.
Let's hope not, in fact, let's hope they continue to make mistake after mistake.
 

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Toyota executives admit they have made missteps in their first venture into the full-sized pickup fray
I thought this was the third one:D

The 5.7L comprises 70 to 80 percent of Tundra sales? Not good for Detroit's trucks. If this trend continues, perception will start to change, and when Tundra is mentioned, people will think "big power, big torque, big towing".
When gas starts to hover around $3.50 to $4.00 that big power will start to be a trade in for smaller vehicles:D

Most frustrating to Toyota is that the number of days Tundras sit on dealer lots is higher than expected.
And they say the truck is a success:D
 

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It does not surprise me that the 5.7 is selling so well. There is not another engine out there that equals it right now. Whoever thought that Japanese trucks would be known for producing more low end torque than their American counterparts?(answer:nobody) The Titan and Tundra produce their torque peak at 3500rpm where GM's offerings have to be wound up to well over 4000 rpm.(4400?) Can anyone tell me why GM is abandoning the low end in their trucks? My 96 GMC with the old 350 peaked at 2800. My current Titan makes my last 5.3 feel like a 6 cylinder.
This is a real danger zone for GM whether people want to admit or not. GM should always be the leader in power and not give the Japanese this edge which helps them gain credibility and in turn customers. "big power big torque, big towing is a fact now for Japanese trucks and people are starting to recognize. Hell I owned two GMC's in the past but my right foot mashes a Titan gas pedal now. I went with the Titan because it's drivetrain was far superior to anything GM could offer me in 2005, or today for that matter. Now if they can just fix the weak rear differential.
 

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titanguy said:
It does not surprise me that the 5.7 is selling so well. There is not another engine out there that equals it right now. Whoever thought that Japanese trucks would be known for producing more low end torque than their American counterparts?(answer:nobody) The Titan and Tundra produce their torque peak at 3500rpm where GM's offerings have to be wound up to well over 4000 rpm.(4400?) Can anyone tell me why GM is abandoning the low end in their trucks? My 96 GMC with the old 350 peaked at 2800. My current Titan makes my last 5.3 feel like a 6 cylinder.
This is a real danger zone for GM whether people want to admit or not. GM should always be the leader in power and not give the Japanese this edge which helps them gain credibility and in turn customers. "big power big torque, big towing is a fact now for Japanese trucks and people are starting to recognize. Hell I owned two GMC's in the past but my right foot mashes a Titan gas pedal now. I went with the Titan because it's drivetrain was far superior to anything GM could offer me in 2005, or today for that matter. Now if they can just fix the weak rear differential.
I agree. GM must absolutely get on to of the whole powertrain thing. GM needs to be the class leader in power and torque, or else a big perception shift will occur. GM cannot afford to lose the perception advantage in fullsize trucks.
 

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Realist said:
I agree. GM must absolutely get on to of the whole powertrain thing. GM needs to be the class leader in power and torque, or else a big perception shift will occur. GM cannot afford to lose the perception advantage in fullsize trucks.
You are absolutely right. GM execs whine about perception being the problem with their cars so let's see what they do here. It looks like they would have learned by now that they have to do their best across the board. Why no standard air bags and stability control across the board? Instead of taking care of their cash cows they dally with RWD fantasies, etc. regarding cars. They'd be better off getting the Cobalt equal to the Civic in fuel economy.
 

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guitarlix said:
I should go into auto business managment. How did I know that the Crewmax was going to be the most in-demand Tundra model? (I'm serious!)

And why would anyone buy a 4.7 when the 5.7 is just $1200 more?
You would think the 4.7L would get better gas mileage than the 5.7L. That plus the 1200 savings could convince some people. But I think they are very close in mileage, so that kills that idea.
 

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Realist said:
Dinosaur indeed. Let's hope they have a replacement sooner rather than later.
Agreed. That engine is a real clunker.

Realist,

Welcome to GMI!
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http://www.gminsidenews.com/forums/showthread.php?t=48022

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Welcome aboard. We look forward to hearing about your General Motors vehicle purchase and ownership experiences.

Cheers!
 
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