Toyota Is Exploring Revving Its Engines in the Ocean
Toyota Motor Sales U.S.A. Inc. of Torrance said Wednesday that it has formed a marine division to explore the possibility of offering high-performance boats that would feature its V-8 Lexus engines.
“We’re a successful auto marketer, and one of the challenges is to diversify operations,” said Doug Plescia, a Toyota vice president and general manager of the new division, also in Torrance. “Certainly, engines and recreation . . . [are] something that we know. It’s a pretty natural segment to go after.”
General Motors Corp. and Ford Motor Co. have manufactured engines for boat companies for at least 30 years, company representatives said. Boat engine sales, though, account for a small part of their overall revenue. For example, GM sells only about 180,000 engines a year for boats, the company said.
“The kinds of volumes that you’re talking about are pretty small relative to the volumes that they can move in automobiles,” said Gary Lapidus, an auto analyst with Sanford C. Bernstein in New York. “I don’t think it will have great material impact on their business. Few people own boats, and fewer own high-end boats with V-8s.”
Plescia declined to speculate as to how much a Lexus-engine boat would cost, but he said company studies show that potential customers would have annual incomes of more than $35,000.
“Basically, they are people who are recreationally oriented and are generally not first-time boat owners,” he said. “The water skiers, the barefooters, the wake boarders--people who are fairly serious into water sport recreation.”
Performance speedboats are a hard sell, said Greg Proteau, spokesman for the National Marine Manufacturers Assn. in Chicago. Sales of powerful-performance boats average 5,500 a year, compared with 215,000 for family and fishing boats, he said.
“They’re not targeting the huge part of the market,” Proteau said. “The market is at the low end. People are price-conscious. That’s why they sell more Camrys than Lexuses.”
The 1UZ 4.0-liter V-8 engine, used in the Lexus LS400 and SC400, is made of aluminum, which would make it lighter than a typical motorboat engine, Plescia said. The engine’s electronic fuel-injection system makes it cleaner-burning, he said, a consideration for boat owners who are often subject to the same clean-air rules as car owners.
The company said it could offer the engines or a boat-engine combination as early as the summer of 1998.
