By Christie Schweinsberg
WardsAuto.com, Jan 17, 2007 12:32 PM

DETROIT – The midsize coupe segment in the U.S. is dying, and Toyota Motor Sales U.S.A. Inc. would rather invest its research and development money in “better places,” Jim Lentz, executive vice president-TMSUSA, tells Ward’s here in an interview.

On hand for the 2007 North American International Auto Show, Lentz says Toyota doesn’t foresee the type of growth forecast for the segment by rival American Honda Motor Co. Inc.

American Honda unveiled its Accord Coupe Concept at the Detroit show, and Vice President John Mendel touted research projecting 34% growth in the segment between now and 2011.

Lentz stops short of saying Toyota will kill its Georgetown, KY-built Camry Solara coupe, as has been rumored, but his comments are the closest thing so far to a confirmation of the model’s departure from the auto maker’s U.S. lineup.

“Our sense is that the midsize coupe segment continues to be a deteriorating segment,” Lentz says. “And given that everyone has a limited amount of resources to put against product development, one would think there may be better places to put those resources than a declining segment – a small segment to begin with that’s also declining.”

Ward’s data doesn’t break out sales of midsize coupes from midsize sedans, but Ward’s Upper Middle segment, where the Camry and Accord live, saw sales fall 5.6% last year to 2.2 million units.
And coupes in general are typically famous for their short shelf life.

Lentz says primary buyers of midsize coupes are female Baby Boomers whose children have moved out.
Such women now are flocking to SUVs and cross/utility vehicles.

“And that migration, based on what we see, is continuing,” he says. “Could that somehow turn around and go back towards coupes? Honda must have some insight that they feel that is going to take place. Our research doesn’t really show that.”

Honda says it sees an opportunity with young, male buyers for the new Accord coupe, debuting this fall as an ’08 model.
A report last year indicated Toyota would replace the Camry Solara with a new CUV based on the FT-SX concept shown at the 2005 Detroit auto show. At the time, Toyota said the vehicle was targeted at aging Baby Boomers.
Lentz doesn’t tip his hand about a production FT-SX, but says the challenge with CUVs is determining what attributes to emphasize.

“I think everyone is trying to find the right balance between passenger-car attributes, SUV attributes and van attributes,” Lentz says of CUVs, sales of which grew 9.1% in the U.S. last year, to 2.4 million units, according to Ward’s segmentation data.

While Ford Motor Co. and General Motors Corp. are exiting the minivan segment in favor of CUVs, Lentz doesn’t see Toyota abandoning its Sienna anytime soon.
“I still think there’s a need for a traditional minivan,” he says.

However, he believes the long-term future of the segment depends on how Generation Y buyers, who have memories of being shuttled around in minivans, respond to future versions of the vehicles.

“The question will become, as Gen Y continues to age and have children, will (owning a minivan) be something that’s comfortable for them, or is that something they will shun? If they shun (minivans), that segment will die,” Lentz says.

At the time of the interview, Lentz had yet to take a close look at Chrysler Group’s new ’08 Dodge Caravan and Chrysler Town & Country, but he says from photos he’s seen they appear to have more SUV-like styling cues, particularly their fullsize D-pillars.

And, citing Chrysler minivans’ new swivel seating, Lentz predicts more innovation in seats. Thin seats, being pushed by interior suppliers such as Johnson Controls Inc., will make their way into minivans, creating more interior room and reducing curb weight, he predicts.

“This whole concept of the thin seat is going to go through the industry in the next few years,” he says.
However, Lentz won’t say if that trend includes the next-generation Sienna, expected to appear in 2009 as a ’10 model, according to Ward’s data