Toyota to compete with Big Three on trucks
07-27-2005, 10:27 PM
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Toyota to compete with Big Three on trucks
Paul
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Remember the Alamo?
Toyota's Trucks Enter Last Bastion
By SHOLNN FREEMAN
Staff Reporter of THE WALL STREET JOURNAL
July 27, 2005
SAN ANTONIO -- Deep in the heart of truck country, Toyota Motor Corp. is getting ready to go after one of the last remaining, and most profitable, strongholds of Detroit's Big Three auto makers.
Central to that strategy is an $800 million assembly plant Toyota is building on the site of a former cattle ranch on this city's south side. When construction is done next year, the factory will employ 2,000 people and produce 150,000 Texas-built pickup trucks, mostly Tundras, a year.
The Tundra light pickup truck has been Toyota's hottest-selling truck this year. But it still has a long way to go to catch up with Ford Motor Co., the No. 1 pickup brand in both Texas and the U.S. While Toyota sold 111,000 Tundras nationwide last year, Ford in a year sells almost as many of its F-Series pickups, about 100,000, in Texas alone, representing some $3 billion in annual revenue and an estimated $500 million a year in pretax profit. Ford's F-Series truck was the best-selling vehicle in the U.S. last year, according to R.L. Polk & Co. data.
The new factory -- and the larger, new Tundra it will build -- are just the start of the effort to get Texans to think of Toyota when they think of trucks. The company is touting the Tundra at home-improvement shows, country-western concerts, rodeos and fiestas and monster-truck jams. Dealers say most of their local advertising spending now goes to promoting the current Tundra, replacing the former emphasis on Camrys and Corollas.
Truck buyers are demanding, viewed in the industry as more "needs-driven" than car buyers, with specific requirements for how much equipment they need to carry or how much boat they need to tow. Salespeople need the technical knowledge to sell them the truck they need, and Toyota has retail trainers fanning out to dealerships to get them up to speed.
Outside the showroom, Toyota has become a significant patron of the arts in San Antonio, winning friends and easing the big Japanese company's entry into the community. It is another kind of challenge to San Antonio Ford dealers, who for the past 13 years have set aside a small percentage of each vehicle sale, combined it with matching money from the auto maker and used the money to fund scholarships and grants to schools and local arts groups.
Toyota has positioned itself to leapfrog Ford in corporate giving by backing "theFund," a nonprofit that collects donations, via payroll deductions of about $2 to $3 per paycheck from employees at local San Antonio businesses. Toyota has already given $25,000 to get theFund started, making it the largest single contributor to the project.
Rod Rubbo, theFund's executive director, says the project is two-thirds of the way toward meeting its first-year goal of giving away $400,000 -- about what the Ford program has been giving away each year. The five-year goal for theFund is to give away $4 million a year.
Detroit auto makers, especially Ford, are already fighting back. Darryl Hazel, president of the Ford division at Ford Motor, flew to San Antonio in June to shore up dealers for the battle. At a meeting with dealers, Mr. Hazel assured the group that the F-Series trucks would continue to dominate the market. Then, sweating under a cowboy hat, he took a propane-heated branding iron and burned a Ford "Built Tough" logo into the side of a Ford truck. "This is how we do it here, I'm told," he said.
Mr. Hazel and other Ford officials say if Toyota manages to grab market share with the new San Antonio-built truck, the gains will come at the expense of Chevrolet and Dodge, not Ford. "The best way for us to defend our position is to continue doing exactly what we have been doing in this part of the business," says Doug Scott, Ford's truck group marketing manager. "We know the customer. We have anticipated the customers' needs, and we've innovated in the segment."
The Texas truck battle will almost certainly pay dividends for buyers in the form of continued price cutting. Indeed, Chevy and Dodge dealers say prices in the pickup truck segment are already under extreme pressure as the result of General Motors Corp.'s offer of employee prices and copycat offers from Ford and DaimlerChrysler AG. At GM, the promotion propelled sales of the Chevrolet Silverado pickup to a new nationwide record in June.
Steven Wolf, a Dodge dealer in Houston, says Texas-built Toyota trucks will turn up the fire under Detroit's trucks, but Toyota will feel the heat, too. "I don't think they've ever had to deal with the kind of competitive pressure that Ford, GM, and Chrysler focus on every day," Mr. Wolf says.
Both Dodge and Chevy are gearing up to offer new truck models in the next two years. Dodge is updating the Ram pickup with technology that boosts fuel economy by shutting down four of eight cylinders during highway cruising. GM is expected to launch redesigned Chevrolet and GMC pickups in about a year.
Meanwhile, Toyota dealers in Texas are getting ready to sell the new Tundra. At Universal Toyota, a major San Antonio dealership, general manager John Mathews has been busy trying to infuse the dealership with truck culture. He points to an area where long rows of Tundras face the freeway -- "the front line," as he calls it. "The front line is the most valuable piece of real estate in the market," he says. "How you use it says everything."
Mr. Mathews, a native Texan who grew up in California, spent eight years at a Ford store before joining the Toyota dealership. He helped turn the Ford store around by focusing on trucks. "I found out what it was like to make one product your franchise," he said, referring to the F-150. Mr. Mathews says he learned that, by dominating full-size truck sales, "we'd get a shot at all the other vehicles in the family."
Mr. Mathews says he has persuaded about half the employees there to make Tundras, not Toyota passenger cars, their personal vehicles, giving them a newfound passion and understanding for trucks. He said Toyota's recent sales surge in San Antonio has "got to be the writing on the wall," says Mr. Mathews, who sits on Toyota's national truck strategy group, made up of the company's most aggressive truck dealers.
"A few years ago, a guy would say, 'I'm going to buy Fords because my daddy bought Ford and his daddy bought Ford,'" Mr. Mathews says. Now, he adds, "attitudes and loyalties are really changing in the full-size pickup truck market."
Allscion -- an e-commerce Web site with news and accessories for your Scion vehicles
http://www.allscion.com/store
Remember the Alamo?
Toyota's Trucks Enter Last Bastion
By SHOLNN FREEMAN
Staff Reporter of THE WALL STREET JOURNAL
July 27, 2005
SAN ANTONIO -- Deep in the heart of truck country, Toyota Motor Corp. is getting ready to go after one of the last remaining, and most profitable, strongholds of Detroit's Big Three auto makers.
Central to that strategy is an $800 million assembly plant Toyota is building on the site of a former cattle ranch on this city's south side. When construction is done next year, the factory will employ 2,000 people and produce 150,000 Texas-built pickup trucks, mostly Tundras, a year.
The Tundra light pickup truck has been Toyota's hottest-selling truck this year. But it still has a long way to go to catch up with Ford Motor Co., the No. 1 pickup brand in both Texas and the U.S. While Toyota sold 111,000 Tundras nationwide last year, Ford in a year sells almost as many of its F-Series pickups, about 100,000, in Texas alone, representing some $3 billion in annual revenue and an estimated $500 million a year in pretax profit. Ford's F-Series truck was the best-selling vehicle in the U.S. last year, according to R.L. Polk & Co. data.
The new factory -- and the larger, new Tundra it will build -- are just the start of the effort to get Texans to think of Toyota when they think of trucks. The company is touting the Tundra at home-improvement shows, country-western concerts, rodeos and fiestas and monster-truck jams. Dealers say most of their local advertising spending now goes to promoting the current Tundra, replacing the former emphasis on Camrys and Corollas.
Truck buyers are demanding, viewed in the industry as more "needs-driven" than car buyers, with specific requirements for how much equipment they need to carry or how much boat they need to tow. Salespeople need the technical knowledge to sell them the truck they need, and Toyota has retail trainers fanning out to dealerships to get them up to speed.
Outside the showroom, Toyota has become a significant patron of the arts in San Antonio, winning friends and easing the big Japanese company's entry into the community. It is another kind of challenge to San Antonio Ford dealers, who for the past 13 years have set aside a small percentage of each vehicle sale, combined it with matching money from the auto maker and used the money to fund scholarships and grants to schools and local arts groups.
Toyota has positioned itself to leapfrog Ford in corporate giving by backing "theFund," a nonprofit that collects donations, via payroll deductions of about $2 to $3 per paycheck from employees at local San Antonio businesses. Toyota has already given $25,000 to get theFund started, making it the largest single contributor to the project.
Rod Rubbo, theFund's executive director, says the project is two-thirds of the way toward meeting its first-year goal of giving away $400,000 -- about what the Ford program has been giving away each year. The five-year goal for theFund is to give away $4 million a year.
Detroit auto makers, especially Ford, are already fighting back. Darryl Hazel, president of the Ford division at Ford Motor, flew to San Antonio in June to shore up dealers for the battle. At a meeting with dealers, Mr. Hazel assured the group that the F-Series trucks would continue to dominate the market. Then, sweating under a cowboy hat, he took a propane-heated branding iron and burned a Ford "Built Tough" logo into the side of a Ford truck. "This is how we do it here, I'm told," he said.
Mr. Hazel and other Ford officials say if Toyota manages to grab market share with the new San Antonio-built truck, the gains will come at the expense of Chevrolet and Dodge, not Ford. "The best way for us to defend our position is to continue doing exactly what we have been doing in this part of the business," says Doug Scott, Ford's truck group marketing manager. "We know the customer. We have anticipated the customers' needs, and we've innovated in the segment."
The Texas truck battle will almost certainly pay dividends for buyers in the form of continued price cutting. Indeed, Chevy and Dodge dealers say prices in the pickup truck segment are already under extreme pressure as the result of General Motors Corp.'s offer of employee prices and copycat offers from Ford and DaimlerChrysler AG. At GM, the promotion propelled sales of the Chevrolet Silverado pickup to a new nationwide record in June.
Steven Wolf, a Dodge dealer in Houston, says Texas-built Toyota trucks will turn up the fire under Detroit's trucks, but Toyota will feel the heat, too. "I don't think they've ever had to deal with the kind of competitive pressure that Ford, GM, and Chrysler focus on every day," Mr. Wolf says.
Both Dodge and Chevy are gearing up to offer new truck models in the next two years. Dodge is updating the Ram pickup with technology that boosts fuel economy by shutting down four of eight cylinders during highway cruising. GM is expected to launch redesigned Chevrolet and GMC pickups in about a year.
Meanwhile, Toyota dealers in Texas are getting ready to sell the new Tundra. At Universal Toyota, a major San Antonio dealership, general manager John Mathews has been busy trying to infuse the dealership with truck culture. He points to an area where long rows of Tundras face the freeway -- "the front line," as he calls it. "The front line is the most valuable piece of real estate in the market," he says. "How you use it says everything."
Mr. Mathews, a native Texan who grew up in California, spent eight years at a Ford store before joining the Toyota dealership. He helped turn the Ford store around by focusing on trucks. "I found out what it was like to make one product your franchise," he said, referring to the F-150. Mr. Mathews says he learned that, by dominating full-size truck sales, "we'd get a shot at all the other vehicles in the family."
Mr. Mathews says he has persuaded about half the employees there to make Tundras, not Toyota passenger cars, their personal vehicles, giving them a newfound passion and understanding for trucks. He said Toyota's recent sales surge in San Antonio has "got to be the writing on the wall," says Mr. Mathews, who sits on Toyota's national truck strategy group, made up of the company's most aggressive truck dealers.
"A few years ago, a guy would say, 'I'm going to buy Fords because my daddy bought Ford and his daddy bought Ford,'" Mr. Mathews says. Now, he adds, "attitudes and loyalties are really changing in the full-size pickup truck market."
07-28-2005, 07:42 AM
#3
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Join Date: Apr 2005
Posts: 42
My dad drives a 2004 F-150 Crewcab Lariat 4x4. It was $32k, its no cheap car, but it is a great deal if you think about it. Its very comfortable, nice leather, very quiet and smooth. And he can haul stuff. Plus its very safe. I will always buy toyota cars, but when i see truck i see FORD.
(even thought the A/C broke at 25k miles) /warrenty covered
If you thnik about it pickups are a lot of value compaired to entrty level luxery sedans, but people make fun of us for driving one.
I still want an xB, but my mom thinks they are ugly, so i can't get one till im 25
(even thought the A/C broke at 25k miles) /warrenty covered
If you thnik about it pickups are a lot of value compaired to entrty level luxery sedans, but people make fun of us for driving one.
I still want an xB, but my mom thinks they are ugly, so i can't get one till im 25
07-28-2005, 08:10 AM
#4
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Join Date: Jun 2005
Location: Louisville, KY
Posts: 19
If expanding Toyota Trucks fails, Toyota will put more focus on making cars (and Scion) #1.
If expanding Toyota Trucks succeeds, Toyota will have a gateway to get Toyota cars (and Scion) to buyers who traditionaly bought domestic.
Win win for us either way.
If expanding Toyota Trucks succeeds, Toyota will have a gateway to get Toyota cars (and Scion) to buyers who traditionaly bought domestic.
Win win for us either way.
07-28-2005, 02:36 PM
#6
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Originally Posted by firesquare
i wanna see a heavy duty tundra. and possibly a 3/4 ton diesel :-p
07-29-2005, 03:54 PM
#7
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Join Date: Jul 2005
Location: Dallas/Fort Worth
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imo, ford = puke
EVERY ford my family has had has spent more time in the shop than on the street! exept for that one 67 mustang......they look nice but thats where it ends......
Lets take out the trash!
EVERY ford my family has had has spent more time in the shop than on the street! exept for that one 67 mustang......they look nice but thats where it ends......
Originally Posted by Fixtion
Mustangs and Ford Trucks infest the streets!
07-30-2005, 06:22 PM
#9
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Join Date: Aug 2004
Location: Lewisville, TX
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Originally Posted by suprememilo
My dad drives a 2004 F-150 Crewcab Lariat 4x4. It was $32k, its no cheap car, but it is a great deal if you think about it. Its very comfortable, nice leather, very quiet and smooth. And he can haul stuff. Plus its very safe. I will always buy toyota cars, but when i see truck i see FORD.
(even thought the A/C broke at 25k miles) /warrenty covered
If you thnik about it pickups are a lot of value compaired to entrty level luxery sedans, but people make fun of us for driving one.
I still want an xB, but my mom thinks they are ugly, so i can't get one till im 25
(even thought the A/C broke at 25k miles) /warrenty covered
If you thnik about it pickups are a lot of value compaired to entrty level luxery sedans, but people make fun of us for driving one.
I still want an xB, but my mom thinks they are ugly, so i can't get one till im 25
But I'll tell you this much: the Tundra is an amazing vehicle. We took a 2001 on trade a few weeks ago. V8, 90,000 miles on it, not a speck of rust, not drop of oil leaking out anywhere, belts tight, all original parts. Very sweet.
07-30-2005, 06:59 PM
#10
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Join Date: Jul 2004
Location: Navarre, FL
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Its so nice of ford to think of & give the truck ppl what they want, but when it comes to there cars its just something thats on the back burner. Ford needs to pull its head out of its ___ & they could be making even more money if they had the #1 truck, van, suv & car. Those 4 things is what makes a company. With fords current views on things, maybe they should just make trucks. Hell cut out making cars, that would save money needing to keep some of the factories going etc. Over all they would make less $ in numbers, but have higher sales because they would only sale Rangers & F series trucks. Ford needs to get a clue 
08-16-2005, 12:01 AM
#11
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Join Date: Jul 2004
Posts: 129
toyota is smart, they are doing it "slowly". New plant will double the production capacity of Tundra yet it will still be made in some 500,000 examples less than F150.
6-7 years ago bovody thought of Toyota trucks and now Toyota sells 300,000 tacomas/tundras per year...
6-7 years ago bovody thought of Toyota trucks and now Toyota sells 300,000 tacomas/tundras per year...
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