Toyota Rethinks Tundra Pricing
03-30-07, 08:29 AM
#1
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Toyota Rethinks Tundra Pricing
March 29, 2007
Christine Tierney / The Detroit News
When Toyota Motor Corp. set the pricing for its new Tundra pickup, skeptics said $22,290 seemed steep for the base model. Toyota managers countered that the truck didn't cost more than comparably equipped rivals.
But the critics had a point.
Toyota is now offering dealers cash -- as much as $2,000 for a base two-door Tundra -- to help them sell the pickups amid reports of sluggish demand for the entry-level model.
On the other hand, Toyota dealers report brisk sales of the four-door Tundra and strong orders for the top-of-the-line $41,850 CrewMax, with reclining second-row seats and a V-8 engine.
"I'm selling double cabs, and I have almost 100 orders for CrewMaxes," which went on sale in mid-March, said Dianne Whitmire, director of fleet and Internet sales at Toyota of San Juan Capistrano in southern California.
But Whitmire has not sold a single two-door Tundra.
"Those things are not selling," said Alex Rosten, an analyst at online auto research site Edmunds.com. "They're way too expensive."
Pickups from U.S. automakers -- Chevrolet Silverado, Dodge Ram and Ford F-150 -- start in the mid-teens, although more powerful and lavishly equipped versions cost more than twice as much.
Dealers say entry-level pickup buyers, such as gardeners and contractors, aren't looking for stability control, multiple airbags and other features that are standard on the base Tundra.
"They overestimated what the market will bear," Whitmire said. "What they need to do with this vehicle is to de-content it."
Toyota executives say they are reviewing the two-door truck's pricing and equipment levels. "Unfortunately, we may have put a little too much content in it," said Ernest Bastien, vice-president of vehicle operations at Toyota Motor Sales in Torrance, Calif.
He said demand was weakest in southern states with warm climates, where customers tend to buy front-wheel-drive versions. That segment of the pickup market is, "even for us, particularly price-sensitive," Bastien said. "I think there is a little bit of learning going on here."
He noted, however, that the two-door Tundra was expected to generate only about 10 percent of total Tundra sales.
The Japanese automaker has invested heavily in the new truck in an effort to double its share of the full-size pickup market dominated by Detroit automakers. Domestic brands accounted for 90 percent of the 2.2 million full-size pickups sold last year in the United States.
The new Tundra's arrival has heightened competition in the segment, pushing all automakers to jack up incentives.
This month, General Motors Corp. began offering zero-percent financing on its new trucks, which were well received by the market when they came out last fall.
According to Edmunds.com's latest estimates, incentives average $1,529 per vehicle on the Silverado and $1,893 on the GMC Sierra pickup, while Toyota was offering an average $1,647 on the Tundra. Ford's discounts are roughly twice as high, with $3,792 for the F-150 and $5,655 on the aging Dodge Ram.
Auto analysts and executives say the rising incentives also reflect higher gas prices, which dented demand last year for big pickups -- one of the most lucrative segments in the market.
source : detnews
Christine Tierney / The Detroit News
When Toyota Motor Corp. set the pricing for its new Tundra pickup, skeptics said $22,290 seemed steep for the base model. Toyota managers countered that the truck didn't cost more than comparably equipped rivals.
But the critics had a point.
Toyota is now offering dealers cash -- as much as $2,000 for a base two-door Tundra -- to help them sell the pickups amid reports of sluggish demand for the entry-level model.
On the other hand, Toyota dealers report brisk sales of the four-door Tundra and strong orders for the top-of-the-line $41,850 CrewMax, with reclining second-row seats and a V-8 engine.
"I'm selling double cabs, and I have almost 100 orders for CrewMaxes," which went on sale in mid-March, said Dianne Whitmire, director of fleet and Internet sales at Toyota of San Juan Capistrano in southern California.
But Whitmire has not sold a single two-door Tundra.
"Those things are not selling," said Alex Rosten, an analyst at online auto research site Edmunds.com. "They're way too expensive."
Pickups from U.S. automakers -- Chevrolet Silverado, Dodge Ram and Ford F-150 -- start in the mid-teens, although more powerful and lavishly equipped versions cost more than twice as much.
Dealers say entry-level pickup buyers, such as gardeners and contractors, aren't looking for stability control, multiple airbags and other features that are standard on the base Tundra.
"They overestimated what the market will bear," Whitmire said. "What they need to do with this vehicle is to de-content it."
Toyota executives say they are reviewing the two-door truck's pricing and equipment levels. "Unfortunately, we may have put a little too much content in it," said Ernest Bastien, vice-president of vehicle operations at Toyota Motor Sales in Torrance, Calif.
He said demand was weakest in southern states with warm climates, where customers tend to buy front-wheel-drive versions. That segment of the pickup market is, "even for us, particularly price-sensitive," Bastien said. "I think there is a little bit of learning going on here."
He noted, however, that the two-door Tundra was expected to generate only about 10 percent of total Tundra sales.
The Japanese automaker has invested heavily in the new truck in an effort to double its share of the full-size pickup market dominated by Detroit automakers. Domestic brands accounted for 90 percent of the 2.2 million full-size pickups sold last year in the United States.
The new Tundra's arrival has heightened competition in the segment, pushing all automakers to jack up incentives.
This month, General Motors Corp. began offering zero-percent financing on its new trucks, which were well received by the market when they came out last fall.
According to Edmunds.com's latest estimates, incentives average $1,529 per vehicle on the Silverado and $1,893 on the GMC Sierra pickup, while Toyota was offering an average $1,647 on the Tundra. Ford's discounts are roughly twice as high, with $3,792 for the F-150 and $5,655 on the aging Dodge Ram.
Auto analysts and executives say the rising incentives also reflect higher gas prices, which dented demand last year for big pickups -- one of the most lucrative segments in the market.
source : detnews
03-30-07, 09:23 AM
#2
Super Moderator
He said demand was weakest in southern states with warm climates, where customers tend to buy front-wheel-drive versions. That segment of the pickup market is, "even for us, particularly price-sensitive," Bastien said. "I think there is a little bit of learning going on here."
Better question, who the hell MAKES a front wheel drive pickup? The days of the Subaru Brat, Dodge Rampage and VW pickup are LONG since over. The Baja is kind of the spiritual successor to the Brat, but I wouldn't really consider it a pickup, and it's AWD anyway...
03-30-07, 09:23 AM
#3
When I started to see the actual dealer window sticker prices on the new Tundra I was shocked as to how much it had increased over the last version. True, they claim that it's better than every other truck out there, but there is no need to make it a rich man's truck. If they want to take over the market, they have to remember that people don't want to have a TRUCK payment in the thousands. They want something that is affordable and reliable. They have the reliability... they just need to work on the affordability.
03-30-07, 10:34 AM
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I agree that Toyota priced the base Tundra too high. They should make a new "base" model, a stripped-down, total work truck for a much lower price. At the very least, they should price it below 20K. The rest of the Tundra pricing is just fine, it's only the base Regular cabs that are a bit steep.
Double Cab and Crewmax demand is really high, and that shows you where the market is going in terms of pickup trucks. Even ranchers, farmers, contractors ... they are all moving towards buying extended cab or crew cab models, rather than regular cabs.
EDIT: It's also ironic that despite all the criticism that Toyota is offering lots of incentives on the regular Cab Tundra, GM is in fact offering about the same level of incentives on it's Silverado and a bit more on the Sierra. The incentives on the F150 and Ram are just outrageous though.
Double Cab and Crewmax demand is really high, and that shows you where the market is going in terms of pickup trucks. Even ranchers, farmers, contractors ... they are all moving towards buying extended cab or crew cab models, rather than regular cabs.
EDIT: It's also ironic that despite all the criticism that Toyota is offering lots of incentives on the regular Cab Tundra, GM is in fact offering about the same level of incentives on it's Silverado and a bit more on the Sierra. The incentives on the F150 and Ram are just outrageous though.
Last edited by TRDFantasy; 03-30-07 at 10:53 AM.
03-30-07, 04:27 PM
#6
Agreed, not many people want to simply throw cargo in an expensive full-sized truck. A majority of the market just wants something that is big, mean, and hauls cargo well. You don't see many Escalades in a construction lot. :P
03-30-07, 05:07 PM
#7
Lexus Fanatic
I covered some of the price-vs-quality issues in my just-finished review of the new Tundra 4WD 5.7L V8 Limited DoubleCab yesterday.
https://www.clublexus.com/forums/sho...01#post2519201
https://www.clublexus.com/forums/sho...01#post2519201
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03-30-07, 09:14 PM
#8
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You find businesses buy the stripped 2 door pickups much more than individual consumers. Businesses buy them for employees to use and don't want to pay any more than they have to.
Someone who comes to the house here to do pest control, another who reads the electric meter, another I met for some subdivision road repairs ALL had 2 door STRIPPED pickups, and I mean stripped - MANUAL windows, cloth, maybe not even a CD player.
So businesses buy for someone ELSE (their employees) to drive and so don't want to pay for anything not absolutely necessary for their employees to do the job, while consumers buy for themselves and so want the goodies.
Someone who comes to the house here to do pest control, another who reads the electric meter, another I met for some subdivision road repairs ALL had 2 door STRIPPED pickups, and I mean stripped - MANUAL windows, cloth, maybe not even a CD player.
So businesses buy for someone ELSE (their employees) to drive and so don't want to pay for anything not absolutely necessary for their employees to do the job, while consumers buy for themselves and so want the goodies.
03-31-07, 07:39 AM
#9
Super Moderator
Thread Starter
Toyota Increases 2007 Tundra Incentives to $3,000
Date posted: 03-29-2007
TORRANCE, Calif. — Toyota Motor Corp., which has traditionally been sparing with its incentives, has added a nationwide $1,000 trade-in incentive through April 30 for buyers of its 2007 Tundra pickup. The offer comes on top of other discounts worth as much as $2,000 per Tundra, depending on the model.
The Tundra CrewMax model has no incentives, however.
The latest Tundra incentive is aimed squarely at buyers who owe more on their existing vehicle loans than their car or truck is worth. The new incentive can only be applied to help a buyer with a vehicle trade-in allowance. In addition, dealers have the discretion to use the incentive as they see fit. They do not have to use the entire amount.
Toyota is pulling out all the stops to win American buyers to the Tundra as competitors offer discounts as high as $5,000 per truck.
The 2007 Toyota Tundra ranges in price from $22,935 for a base 4x2 regular-cab model with a 236-horsepower 4.0-liter V6 to $42,495 for a CrewMax model with a 381-hp 5.7-liter V8. Prices include a $645 destination charge.
What this means to you: Toyota is still fighting hard to win the hearts — and wallets — of American truck buyers.
Date posted: 03-29-2007
TORRANCE, Calif. — Toyota Motor Corp., which has traditionally been sparing with its incentives, has added a nationwide $1,000 trade-in incentive through April 30 for buyers of its 2007 Tundra pickup. The offer comes on top of other discounts worth as much as $2,000 per Tundra, depending on the model.
The Tundra CrewMax model has no incentives, however.
The latest Tundra incentive is aimed squarely at buyers who owe more on their existing vehicle loans than their car or truck is worth. The new incentive can only be applied to help a buyer with a vehicle trade-in allowance. In addition, dealers have the discretion to use the incentive as they see fit. They do not have to use the entire amount.
Toyota is pulling out all the stops to win American buyers to the Tundra as competitors offer discounts as high as $5,000 per truck.
The 2007 Toyota Tundra ranges in price from $22,935 for a base 4x2 regular-cab model with a 236-horsepower 4.0-liter V6 to $42,495 for a CrewMax model with a 381-hp 5.7-liter V8. Prices include a $645 destination charge.
What this means to you: Toyota is still fighting hard to win the hearts — and wallets — of American truck buyers.
04-01-07, 06:15 AM
#10
Lexus Fanatic
You find businesses buy the stripped 2 door pickups much more than individual consumers. Businesses buy them for employees to use and don't want to pay any more than they have to.
Someone who comes to the house here to do pest control, another who reads the electric meter, another I met for some subdivision road repairs ALL had 2 door STRIPPED pickups, and I mean stripped - MANUAL windows, cloth, maybe not even a CD player.
So businesses buy for someone ELSE (their employees) to drive and so don't want to pay for anything not absolutely necessary for their employees to do the job, while consumers buy for themselves and so want the goodies.
Someone who comes to the house here to do pest control, another who reads the electric meter, another I met for some subdivision road repairs ALL had 2 door STRIPPED pickups, and I mean stripped - MANUAL windows, cloth, maybe not even a CD player.
So businesses buy for someone ELSE (their employees) to drive and so don't want to pay for anything not absolutely necessary for their employees to do the job, while consumers buy for themselves and so want the goodies.
04-01-07, 06:55 PM
#11
Lexus Connoisseur
3.9 APR has been the latest incentive for Teir I/II buyers here in SoCal recently.
04-17-07, 08:41 AM
#13
Super Moderator
Thread Starter
Toyota getting educated, changing Tundra's model mix
Posted Apr 16th 2007 8:54AM by Damon Lavrinc
Toyota's foray into the world of full-sized pickups has taught the company several lessons –- the hard way. According to Automotive News, the automaker is trying to adjust the production of certain trim levels to meet market demand; increasing output on some, while reducing others.
The CrewMax pickup, sporting the range-topping 5.7-liter V8, is Toyota's biggest seller, to the point where supply isn't keeping up with demand. What was originally thought to comprise between 50- and 60-percent of sales is, in actuality, closer to 70- to 80-percent. As such, Toyota is in the process of cutting back production of the standard-cab model, equipped with either the V6 or 4.7-liter V8, since sales of the entry-level truck aren't meeting expectations.
One of the other factors differentiating the Tundra from its domestic competitors is the standard equipment, including safety features, that the Big 2.5 considers optional extras. Naturally, this inclusion of more toys increases the price of the Tundra, possibly scaring off potential customers.
Other lessons learned by Toyota execs include a higher rate of trade-ins (up 20-percent), which is populating dealer lots with an excess of used cars, plus the fact that online inquiries about the Tundra are matching the numbers generated by the Camry –- a sign that Toyota's message is getting out. Which is great for Toyota, as long as they have the stock to meet demand.
Toyota's foray into the world of full-sized pickups has taught the company several lessons –- the hard way. According to Automotive News, the automaker is trying to adjust the production of certain trim levels to meet market demand; increasing output on some, while reducing others.
The CrewMax pickup, sporting the range-topping 5.7-liter V8, is Toyota's biggest seller, to the point where supply isn't keeping up with demand. What was originally thought to comprise between 50- and 60-percent of sales is, in actuality, closer to 70- to 80-percent. As such, Toyota is in the process of cutting back production of the standard-cab model, equipped with either the V6 or 4.7-liter V8, since sales of the entry-level truck aren't meeting expectations.
One of the other factors differentiating the Tundra from its domestic competitors is the standard equipment, including safety features, that the Big 2.5 considers optional extras. Naturally, this inclusion of more toys increases the price of the Tundra, possibly scaring off potential customers.
Other lessons learned by Toyota execs include a higher rate of trade-ins (up 20-percent), which is populating dealer lots with an excess of used cars, plus the fact that online inquiries about the Tundra are matching the numbers generated by the Camry –- a sign that Toyota's message is getting out. Which is great for Toyota, as long as they have the stock to meet demand.