1SICKGOAT
12-03-02, 08:23 PM
Toyota Racing Development hits aftermarket slowdown, company scales back ambitions
By MARK RECHTIN | Automotive News
Toyota Racing Development used the 2000 Celica, above, to showcase its performance and appearance products. But the unit now is cutting back on spoilers, air dams and body kits.
LOS ANGELES -- Toyota has scaled back ambitions for its performance parts business.
Only two years ago, Toyota Racing Development's annual revenues were projected to soar to about $50 million by now. Instead, sales have risen to just over $20 million. Growth forecasts have been lowered to a still healthy but less ambitious 15 percent annually.
But Toyota is far from panicking. It said the slowdown was deliberate. Its big move was to cease carrying aerodynamic body part kits that are a big piece of the aftermarket, instead concentrating on street-legal performance parts for a more consistent image.
The company also abandoned its Kazuma line of racing products. And while its sizable display at the Specialty Equipment Market Association show in Las Vegas in November had plenty of vehicles, traffic appeared slow compared with that of other exhibitors.
It also appears that Toyota Racing Development has put Lexus L-Tuned underhood parts on the back burner. Eighteen months ago, executives predicted that supercharged versions of the Lexus IS 300 and GS 300 would be in showrooms within months. It never happened.
A Toyota product-planning source said L-Tuned vehicles were "basically dead."
"Our aftermarket business was expanding rapidly a couple years ago, and while it continues to grow, we have deliberately narrowed our focus," said David Wilson, Toyota Racing Development's vice president of sales and administration. He claims the unit's business is "healthier than ever."
Wilson said Toyota Racing Development felt its supercharger research and sales should be aimed at a broader consumer market, such as the Tundra pickup and outgoing 4Runner sport-utility. A supercharger for the Matrix also is on the way.
But outsiders feel that Toyota Racing Development's slow pace may have more to do with the dowdy image of its parent company. It's hard to sell high-performance parts when your demographic doesn't buy into that sort of thing.
"Toyota got into performance a little late, when its image had already been solidified in a conservative envelope," said Todd Turner, analyst with Car Concepts in Thousand Oaks, Calif. "The base architecture and fundamentals of the cars are sound, but the excitement of the brand is lacking.
"Getting people to see Toyota as something other than a safe choice, they'll have to invest more and get the word out better. It doesn't help that they killed the Supra," Turner said.
Toyota also may be confronting some generational resistance, in that younger buyers traditionally are the ones who modify their vehicles and Toyota customers have aged beyond that demographic boundary, said Joe Ivers, partner with J.D. Power and Associates' office in Troy, Mich.
So why did Toyota stop selling aerodynamic kits when they did such strong business? The cost of designing and holding in inventory all the various rocker panels and valences was too expensive for an operation of Toyota Racing Development's size. Instead, the unit is focusing on performance shocks, brakes, springs and superchargers, said Jim Aust, Toyota Racing Development president.
"It is getting increasingly difficult in this business," Aust said. "Technology changes so fast. You have to be spot-on."
He thinks Toyota Racing Development may have been too aggressive in its growth plans in the past.
As for killing Kazuma, Toyota decided that the parts lineup was not deep enough to justify the expense required to sustain the brand, Wilson said. Those Kazuma products already released were shifted to Toyota Racing Development's "Sport Part" line.
Bringing back Kazuma is a possibility once the unit gets better footing, Wilson said.
Contrary to some industry theories, no Toyota Racing Development resources have been put toward the fledgling Scion youth brand, even though Scion bbX show cars were abundant at the SEMA show. Although Toyota Racing Development communicates with Toyota Motor Sales U.S.A. Inc., it does not take orders from the sales arm.
"We will make go-fast parts for Scion, but we don't respond to Toyota saying, 'Make this.' We look at the business case first," said Gary Boler, Toyota Racing Development senior manager of sales and marketing.
Carl Sheffer, vice president of OEM relations for SEMA, said that some customers may want the reassurance of a Toyota badge on their add-on products, but there is no way Toyota Racing Development can match the speed and agility of smaller independent companies in hitting market trends. Given the access their dealer body provides, Toyota can get a piece of the action, but never the lion's share, because most consumers prefer to chart their own course with modifications.
"Exterior and interior treatments are very individualistic," Sheffer said. "The size and complexity of some systems does not lend itself to short (production) runs by a big company. And 99 percent of our member companies can beat the automaker at a price point.".
Counters Wilson: "Our customers have higher expectations. It's forced us to elevate our game."
Damn
:(
By MARK RECHTIN | Automotive News
Toyota Racing Development used the 2000 Celica, above, to showcase its performance and appearance products. But the unit now is cutting back on spoilers, air dams and body kits.
LOS ANGELES -- Toyota has scaled back ambitions for its performance parts business.
Only two years ago, Toyota Racing Development's annual revenues were projected to soar to about $50 million by now. Instead, sales have risen to just over $20 million. Growth forecasts have been lowered to a still healthy but less ambitious 15 percent annually.
But Toyota is far from panicking. It said the slowdown was deliberate. Its big move was to cease carrying aerodynamic body part kits that are a big piece of the aftermarket, instead concentrating on street-legal performance parts for a more consistent image.
The company also abandoned its Kazuma line of racing products. And while its sizable display at the Specialty Equipment Market Association show in Las Vegas in November had plenty of vehicles, traffic appeared slow compared with that of other exhibitors.
It also appears that Toyota Racing Development has put Lexus L-Tuned underhood parts on the back burner. Eighteen months ago, executives predicted that supercharged versions of the Lexus IS 300 and GS 300 would be in showrooms within months. It never happened.
A Toyota product-planning source said L-Tuned vehicles were "basically dead."
"Our aftermarket business was expanding rapidly a couple years ago, and while it continues to grow, we have deliberately narrowed our focus," said David Wilson, Toyota Racing Development's vice president of sales and administration. He claims the unit's business is "healthier than ever."
Wilson said Toyota Racing Development felt its supercharger research and sales should be aimed at a broader consumer market, such as the Tundra pickup and outgoing 4Runner sport-utility. A supercharger for the Matrix also is on the way.
But outsiders feel that Toyota Racing Development's slow pace may have more to do with the dowdy image of its parent company. It's hard to sell high-performance parts when your demographic doesn't buy into that sort of thing.
"Toyota got into performance a little late, when its image had already been solidified in a conservative envelope," said Todd Turner, analyst with Car Concepts in Thousand Oaks, Calif. "The base architecture and fundamentals of the cars are sound, but the excitement of the brand is lacking.
"Getting people to see Toyota as something other than a safe choice, they'll have to invest more and get the word out better. It doesn't help that they killed the Supra," Turner said.
Toyota also may be confronting some generational resistance, in that younger buyers traditionally are the ones who modify their vehicles and Toyota customers have aged beyond that demographic boundary, said Joe Ivers, partner with J.D. Power and Associates' office in Troy, Mich.
So why did Toyota stop selling aerodynamic kits when they did such strong business? The cost of designing and holding in inventory all the various rocker panels and valences was too expensive for an operation of Toyota Racing Development's size. Instead, the unit is focusing on performance shocks, brakes, springs and superchargers, said Jim Aust, Toyota Racing Development president.
"It is getting increasingly difficult in this business," Aust said. "Technology changes so fast. You have to be spot-on."
He thinks Toyota Racing Development may have been too aggressive in its growth plans in the past.
As for killing Kazuma, Toyota decided that the parts lineup was not deep enough to justify the expense required to sustain the brand, Wilson said. Those Kazuma products already released were shifted to Toyota Racing Development's "Sport Part" line.
Bringing back Kazuma is a possibility once the unit gets better footing, Wilson said.
Contrary to some industry theories, no Toyota Racing Development resources have been put toward the fledgling Scion youth brand, even though Scion bbX show cars were abundant at the SEMA show. Although Toyota Racing Development communicates with Toyota Motor Sales U.S.A. Inc., it does not take orders from the sales arm.
"We will make go-fast parts for Scion, but we don't respond to Toyota saying, 'Make this.' We look at the business case first," said Gary Boler, Toyota Racing Development senior manager of sales and marketing.
Carl Sheffer, vice president of OEM relations for SEMA, said that some customers may want the reassurance of a Toyota badge on their add-on products, but there is no way Toyota Racing Development can match the speed and agility of smaller independent companies in hitting market trends. Given the access their dealer body provides, Toyota can get a piece of the action, but never the lion's share, because most consumers prefer to chart their own course with modifications.
"Exterior and interior treatments are very individualistic," Sheffer said. "The size and complexity of some systems does not lend itself to short (production) runs by a big company. And 99 percent of our member companies can beat the automaker at a price point.".
Counters Wilson: "Our customers have higher expectations. It's forced us to elevate our game."
Damn
:(