Detroit Unfazed by Toyota Truck
Toyota Motor Corp.’s new full-size Tundra pickup is outscoring segment leaders Ford and Chevrolet in the first buyer-satisfaction surveys completed since the truck hit the streets--and in a seeming repeat of the 1960s, the domestics don’t appear to be worried.
Indeed, Ford Motor Co. executives have reportedly told one independent quality researcher that the company’s F-150 pickups so dominate the market that Toyota’s incursion is of little concern.
That’s what domestic auto makers said four decades ago about the funny little Honda N600s, Toyota Toyopets and other Asian imports whose successors today account for a third of all passenger car sales in the U.S.
In the light-truck market--which includes minivans, sport-utility vehicles and mini-pickups as well as full-size pickups--Japanese brand sales in the U.S. have grown from 70,520 units in 1970 to 1.4 million units last year. At the same time, thanks largely to a huge increase in domestic production beginning in the mid-1980s, total light-truck sales have soared from 1.6 million to 8.3 million units.
Toyota, No. 1 in global sales among the Japanese auto makers, is the first to bring a true full-size pickup with a V-8 engine to market. (Its earlier entry, the T100, was smaller and never caught on with American buyers, in part because of its less powerful V-6.)
The other major Japanese companies are following suit, as No. 2 Nissan Motor Co. last week announced plans to develop a full-size pickup of its own, and executives at the American unit of No. 3 Honda Motor Co. say they are studying the prospects of a full-size pickup for North America.
“It is a huge and incredibly profitable segment” of the automobile market, and the Asian auto makers would be foolish to ignore it, said Tom Lane, head of product planning at Gardena-based Nissan North America Inc.
Citing their existing sales leadership and the strong brand loyalty among pickup buyers, spokesmen at Ford and General Motors Corp. downplayed the Tundra’s first-place standings in the buyer surveys conducted by AutoPacific Inc. and Strategic Vision.
(Consumer market study leader J.D. Power & Associates will release its annual Initial Quality Study in early May, and the Tundra is expected to make a strong showing there too.)
“We take all these studies seriously, but the fact is that the Ford F-Series has been the best-selling vehicle in the U.S. for the past 17 years, and that is clear testimony to the strength of the product,” Ford spokesman John Clinard said.
Auto makers cannot afford to be complacent, said GM spokesman Brian Akre, but Detroit “is a lot different place than it was in the 1960s and ‘70s,” when poor-quality domestic cars allowed Japanese imports to make big inroads.
“Toyota is a strong competitor,” Akre said, “but we think our redesigned [Chevrolet] Silverado and GMC Sierra are competitive in every aspect.”
Although one set of studies doesn’t establish a trend, the Tundra’s high scores show that the quality race that has shaped the car market in the last decade “clearly is moving into the truck market now,” said J. Ferron, head of PricewaterhouseCoopers’ automotive practice.
Although spokesman Clinard called the Ford F-Series trucks the benchmark product in the full-size pickup market, Toyota believes that the Tundra’s high scores position it as the new benchmark that “others have to measure up to,” said Ernest Bastien, head of strategic planning at Toyota Motor Sales USA Inc. in Torrance.
Acknowledging that the domestics, including DaimlerChrysler’s Dodge brand, are likely to continue dominating the market for standard full-size pickups, Nissan’s Lane suggests that there is tremendous room for sales growth and for market share gains through innovation in that arena.
Nissan recently developed a concept “sport-utility truck” with a rear bulkhead that folds flat to eliminate the separation between passenger cab and pickup bed.
“There’s a lot that can be done with the interplay between cab and cargo area, and we’ll have some fun stuff to offer,” Lane said.
Toyota has sold 65,000 Tundras since introducing the model in June--sales that would otherwise have gone to a domestic company.
Although many customers are Toyota loyalists who traded in one of the company’s smaller pickups, a sizable number are fans who traded in domestic-model full-size pickups once Toyota introduced its own, market researchers have found.
“Losing 65,000 sales is one thing, but the prospect of eventually losing 150,000 a year when Toyota gets Tundra production up to full steam is something altogether different,” said George Peterson, president of AutoPacific, an automotive market consulting firm headquartered in Tustin.
“Toyota won’t be able to take over the sales lead, but it can be quite aggravating,” he said.
Add in future Nissan and Honda full-size truck sales, and the Asian attack on the pickup market could become aggravated assault.
AutoPacific’s report, released last week, was the first to log Tundra as a hit with consumers. The survey of 28,000 new-vehicle buyers rated Tundra tops overall in the full-size pickup category, with particularly high marks in perceived quality and reliability.
Dan Gorrell, vice president of Strategic Vision, a San Diego-based market consulting firm, said the Tundra’s strong showing in the buyer survey his firm released this week “means that this is not a flash in the pan.” The study included responses for 18,000 pickup buyers.
In separate market studies in Texas, Strategic Vision found that even Ford and Chevrolet loyalists were attracted to the Toyota.
“These are people the domestics think they have in their back pocket, but a lot of them indicated to us after seeing the Tundra that it was pretty well done,” Gorrell said. He said he discussed the buyer study with Ford executives last week, and they told him they believed that Toyota would be unable to mount a serious challenge.
“If I were a Japanese car company,” Gorrell said, “I’d be banking on the reaction I got from Ford and move while they were sleeping.”
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* HIGHWAY 1: Auto brochures play an important role for buyers. G1
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Picking Up Sales
Japanese auto makers sell 30% of the passenger cars in the U.S. but haven’t been as successful in the light-truck market. That could change, though, now that Toyota has shown that a Japanese company can build a competitive full-size pickup. In just nine months, Japan’s No. 1 auto maker captured 2% of the U.S. market for large pickups with its new Tundra, above. By developing mini-pickups, minivans and SUVs, Japanese companies have quadrupled their share of the light-truck market since 1970:
1970: 4.4%
2000 (estimate): 17.5%
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Sources: The 100 Year Almanac, Automotive News data center, Autodata Corp.
