Toyota Is Staking Its Claim on Trucks

By TERRIL YUE JONES

April 29, 2001 12 AM PT

TIMES STAFF WRITER

DETROIT —

With the introduction of three new sport-utility vehicles in the last few months, Toyota is strengthening its assault on the last vehicle segment still dominated by the Big Three: high-profit medium- and full-size trucks.

Now that it has the full-size Sequoia, the smaller, car-based Highlander and the redesigned RAV4, Toyota lays claim to the most extensive lineup of trucks of any auto maker. Toyota has two car-based SUVs (Ford one, GM and Jeep none) three truck-based SUVs (Ford and Jeep three, GM four) and a full lineup of two- and four-door compact and full-size pickups matching the others, including the full-size Tundra, introduced in 1999. It also has two luxury SUVs, more than any other manufacturer.

For the record:

12:00 a.m. May 2, 2001 For the Record
Los Angeles Times Wednesday May 2, 2001 Home Edition Business Part C Page 3 Financial Desk 1 inches; 18 words Type of Material: Correction
Truck model--A chart Sunday erroneously placed General Motors Corp.’s GMC Sierra pickup in a listing of models from Ford Motor Co.

As the U.S. market has shifted to more than 50% light trucks--pickups, SUVs and minivans--Toyota’s emphasis on these vehicles is strategically crucial.

Toyota’s SUV sales are expected to grow 53% from 2000 to 2001 even as the overall U.S. new-vehicle market is expected to shrink 5% to 10% and SUV sales are expected to increase only 1.5%.

Those figures aren’t making the Big Three quake in their boots--yet.

“From the numbers standpoint, you’re probably not going to see Tundra volume in the 600,000-to-800,000 range, but Toyota is taking an a la carte approach with trucks--you want a smaller one, bigger one, more car-like one?” said Jeff Schuster, director of North American forecasting at industry consultant J.D. Power & Associates in Detroit. “They are getting into the bread-and-butter sectors that were traditionally American-dominated.”

“Our message is: We are now a full-line provider of SUVs and pickups,” said Steve Sturm, Toyota’s vice president for marketing. “We will hold our own against all products in all classes.”

Toyota dominates the truck quality and customer satisfaction surveys by J.D. Power. The Tundra came in first among full-size pickups and the Land Cruiser was tops among full-size SUVs in J.D. Power’s 2000 initial quality and most appealing vehicle surveys.

The Sienna minivan and Lexus LX 470 luxury SUV were tops in their categories for initial quality, and Toyota trucks were among the top three in both surveys in all light-truck categories except compact pickup initial quality. The polls were conducted before the Sequoia, the Highlander and the redesigned RAV4 came on the market.

Toyota also is eating into the Big Three’s share of the truck market. Last year, the Tundra already had 4.5% of the full-size pickup truck market. Ford’s F-Series truck, the best-selling vehicle in the country, outsold the Tundra nearly 9 to 1, a respectable showing for the newcomer.

Toyota’s swagger is underscored in a Western movie spoof being shown at various auto shows around the country. The message is clear: Big Three, we’ve got you in our sights.

The film is set in the Old West--except that the townsfolk ride in Toyota trucks and SUVs instead of on horses, tote cell phones instead of guns and order cafe latte at the Starbucks-like saloon. It features actors Greg Kinnear and Jack Palance, plus “Saturday Night Live” veterans Kevin Nealon, Dana Carvey and Cheri O’Teri.

Nealon, playing a newcomer to town, is asked about his SUV, which the townspeople have never seen before.

“The Sequoia combines superior driving attributes with the style and comfort my family needs in a full-size SUV,” deadpans Nealon, wearing an oversized cowboy hat. “It’s big, it’s bold, it’s stylish and with its many safety features, including four-wheel disc brakes with ABS, it’s what customers should buy when considering a large SUV.”

In the film, the town’s residents are terrorized by Bad Guys from Competition County--all of whom drive muddy Ford, GM and Jeep trucks.

The humorous, 20-minute film ends with an OK Corral-like face-off and the American trucks turning tail and fleeing like scared jack rabbits.

“It’s beautifully made, but very controversial,” said Martin Goldstein, a marketing executive who watched the film at the recent New York International Auto Show. “Toyota has a wider range of trucks, and they’re not shy about it.”

The film “shows amazing confidence on the part of Toyota,” said a Honda executive. “I’m astounded by it.”

And what about those guys from Competition County?

Several American executives have viewed the film, including GM North America President Ron Zarrella and Ford division President James O’Connor.

Toyota is “trying to Americanize [itself], but you know what? That ain’t genuine,” O’Connor said. “Ford has been the [truck] market leader for 24 years, and we’re still the leader this quarter.”

Ford sold 876,716 F-Series large pickups last year, a dominating 40% of the market compared with Toyota’s 4.6%. But Ford’s share slipped to 38.6% in the first quarter of this year amid intense pricing pressures in the segment. Toyota, which had 8.4% of the overall U.S. vehicle market in the first quarter, is gunning for 10% of the U.S. market.

“We’re in a battle, and we need to be at the top of our game every day,” said Al Giombetti, Ford’s SUV and truck marketing manager. “The market’s going from 54 SUV nameplates to 80 in a couple of years, and Toyota is a very formidable player.”

But Toyota, Giombetti said, “doesn’t have a strategy like we do with ‘No Boundaries,’ which gives us a way to connect with consumers. Car-based, truck-based--at the end of the day, the customer is concerned about ride, handling and performance.”

“No Boundaries” is Ford’s most recent marketing tool for its SUVs, a slogan that accompanies all Ford sport-utility ads.

A key entry in Toyota’s lineup is the Highlander, a new SUV. It’s Toyota’s second SUV based on a smoother-riding passenger car platform. The Highlander is winning rave reviews in the automotive press and puts Toyota ahead of the competition in the newest emerging vehicle niche: the crossover SUV. These sport-utilities are not based on trucks but are crosses between SUVs and cars, station wagons, minivans or pickup trucks.

“Traditional expectations of trucks and SUVs are no longer the norm. There are new products,” said Toyota marketing chief Sturm. “The market will grow, but someone’s going to take share from somebody.”

The number of competitors will grow too: Nissan already has said it will make full-size pickups and SUVs at the factory it’s building in Mississippi, and Honda is believed to be seriously considering similar vehicles.

Isuzu and GM are planning a joint compact-pickup, and Jeep and Dodge could enter the full-size SUV fray.

“You have other players aiming at traditional American products that will be designed for this market and built here,” said J.D. Power’s Schuster. “It ends up having a substantial impact, and [the Americans] should be concerned.”

As should the other Japanese makers. “Toyota has been very successful at everything they do,” said Jed Connelly, senior vice president for sales and marketing at Nissan North America.

“Dizzy Dean used to say, ‘It ain’t bragging if you can do it,’ ” Connelly said. “Toyota seems to be able to do what they say.”

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Keep On Truckin’

Toyota did not enter the full-size pickup truck market until 1999, but in two years it built up a 4.6% market share, while Ford and Dodge lost ground.

U.S. Full-Size Pickup Truck Market Share

1998

Ford: 42.6%

Chevrolet*: 28.3%

GMC*: 8.2%

Dodge: 20.9%

2000

Ford: 40%

Chevrolet*: 29.4%

GMC*: 8.6%

Dodge: 17.4%

Toyota: 4.6%