Toyota takes on full-size pickups

Toyota's new truck is called the most significant vehicle of 2007.
DETROIT FREE PRESS
DETROIT -- Toyota Motor Corp. has powered its way into almost every segment of the U.S. auto market, but the Japanese automaker could face its most difficult test as it tries to invade the full-size truck market.
Ford Motor Co., General Motors Corp. and the Chrysler Group's Dodge brand have built strong loyalties among truck buyers, accounting for more than 90 percent of all U.S. full-size truck sales.
This is not the car market of the 1970s and '80s, where the domestic automakers failed to match Toyota in terms of quality, said Bob Lutz, head of GM's global product development and a former executive at Chrysler and Ford. The Detroit brands have the upper hand in full-size trucks, he said.
"All the people who bought American full-size pickup trucks, regardless of manufacturer, or full-size sport-utilities are deliriously happy with their products," Lutz said. "The American truck owner -- Ford, Chevrolet, Dodge, GMC, it doesn't matter -- is intensely loyal and enormously satisfied with the truck."
As Toyota starts production on a new Tundra, Detroit automakers had better hope Lutz is right, said Karl Brauer, editor-in-chief of the consumer Web site Edmunds.com, which named the Tundra the most significant vehicle of the year.
The Tundra, which is being made at a new plant in San Antonio, goes on sale in February. Toyota's first true full-size truck, the 2007 Tundra is a signal that Toyota is ready to compete head-on with the domestic automakers, Brauer said.
Track record
"I'm not saying that it's a matter of fact that the Japanese will take over the domestic truck market," Brauer said. "But I am saying that history has suggested that when they want to take over a market, they've been pretty effective at it."
In the past 30 years, Asian automakers have steadily gained market share in the United States at the expense of domestic automakers. Led first by small fuel-efficient cars, Toyota, Honda Motor Co. and Nissan Motor Co. have become key players in almost every market from minivans to luxury cars.
Toyota's Camry and Corolla are the two best-selling cars in the United States. Toyota and Honda trail only the Chrysler Group in minivan sales, and the Toyota-owned Lexus is the top-selling luxury brand.
The full-size truck market, though, is different, many industry experts say. Ford, GM and Dodge have a loyal customer base.
So far this year, Ford has sold 672,700 F-series trucks, making it the best-selling vehicle in the United States, according to Autodata Corp. GM is second and fourth in full-size pickup sales with the Chevy Silverado and GMC Sierra at 539,300 and 177,800, through October. The Dodge Ram is third at 303,500.
Detroit's automakers are preparing for the increased competition. GM's new full-size pickups came out this year. Dodge has not formally announced a redesigned full-size truck, but a next-generation Ram should be coming within two years.
Ford's strategy
In announcing an acceleration of its Way Forward plan in September, Ford executives said a key part of their strategy is keeping the F-series as the leading full-size truck. And when customers trade in their Ford, GM and Dodge trucks, they often buy a newer version of the same truck.
Almost half of all people who traded in an F-Series this year bought another, according to statistics from the Power Information Network, an auto research arm of J.D. Power and Associates. Loyalty rates for the Dodge Ram and Chevy Silverado were slightly lower but still above 40 percent.
The Asian automakers' success in the full-size truck market so far has been limited. Honda has stayed out of the segment, opting to go with a midsize Ridgeline truck.
Toyota has competed for the past decade with a Tundra that's seven-eighths the size of other full-size trucks. The Titan, Nissan's first full-size pickup, was introduced with great fanfare in 2004, but sales have been disappointing. The Titan and Tundra combined account for less than 10 percent of all U.S. full-size pickup sales.
Toyota will have a tough time taking customers away from Ford, GM and Dodge, said Joe Phillippi, a principal with AutoTrends Consulting in Short Hills, N.J.
"The competition has a tremendous reputation," Phillippi said. "They have strong loyalty among working-truck buyers. That's a tough thing to crack."
Ford, GM and Dodge also have a decided edge because their truck lineups offer a strong stable of features and options that the Asian automakers don't match.
'Heavy duty' versions
The Detroit automakers offer special "heavy duty" versions of their trucks with optional diesel engines, special transmissions and reinforced frames. Toyota and Nissan have only the entry-level full-size trucks.
"If you look at the catalog for each of the Big Three, you can build anything you want in terms of a pickup," Phillippi said.
Although not considered a heavy-duty truck, the new Tundra appears to have strong capabilities, said Brauer of Edmunds.com. The full specs have not been released but Toyota has shown the trucks to journalists and announced several variations for the cab and bed.
"Toyota totally expects people to use their truck as part of how they make a living," Brauer said.
It's also no coincidence that Toyota's new truck plant is in Texas, a move that could help it win over a large audience of hard-core truck buyers, said Erich Merkle, director of forecasting for Grand Rapids, Mich.-based IRN Inc., a consulting firm.
"I don't think we can underestimate the fact that it's being made in Texas, which is the largest pickup market," Merkle said.
Such shrewd moves give Merkle confidence Toyota can make a dent in the truck market.
"From a forecaster's perspective, I have a really hard time betting against Toyota," he said. "If I bet against them, I lose."