Toyota's 2006/2007 Tundra tightrope
Toyota unveiled the 2007 Tundra pickup at the Chicago Auto Show earlier this year. The automaker, however, doesn't want potential customers to wait for the new vehicle, which won't arrive at dealerships until early next year.
So the company is spending millions on incentives, low interest rates, and other strategies to clear out this year’s model. According to Edmunds.com, Toyota spent on average $4,485 in incentives on each Tundra its dealers sold last month. That is considerably more than the $2,911 and $700 the company spent in February 2005 and 2004, respectively. The article does point out, though, there was a sales dip on many Toyota vehicles back in February 2006 which may also account for the larger figure.
Financial incentives are not the only strategy the company is using, though. In Chicago, Toyota may have deliberately shown the new model two floors below the current version to prevent people from comparing the two and, again, waiting for next year to make their purchase.
[Source: Express News]
Reader Comments (Page 1 of 2)
Gunnar Heinrich 1:44PM (3/20/2006)
An ugly truck. Those who would buy such a vehicle would be better served with a Dodge Ram or the Ford F150.
http://www.automobilesdeluxe.blogspot.com
Reply
Michael Karesh 1:45PM (3/20/2006)
I update rebate data for my site, http://www.truedelta.com, once or twice per month. I've noticed for the past year or so how Toyota has been getting increasingly aggressive with incentives on many models, including the Camry.
These are consumer rebates; my sense is they've also gotten aggressive with dealer bonuses.
On top of this, the dealer margins for Toyotas and Lexus are much larger than for other brands. So dealers have a lot more room to discount. My site looks at both MSRP and invoice. Often the other vehicle is cheaper at MSRP to MSRP, but the Toyota is cheaper invoice to invoice. If you assume both cars can be bought for X over invoice...
Put it all together, and Toyota isn't just relying on the product to sell itself. They rely on price far more than Honda, and far more than many people think, to sell cars. They will cut actual prices as far as they have to to hit their targets. Anyone who thinks they won't sell as many 2007s as they want to, just wait and see.
Reply
Brian 1:57PM (3/20/2006)
Looks like Toyota has jumped on the "small windows to make the vehicle look bigger" bandwagon. To bad as outward visibility is usually sacrificed.
Reply
VW-Guy 1:59PM (3/20/2006)
Wow, $5k per vehicle. I guess some of their vehicles aren't as golden as some would be led to believe. That's definitely Big 3 tactics with that kind of money being thrown about.
Reply
Voz 1:59PM (3/20/2006)
Yeah this truck is ugly. Element of bad design lol. No really.
Reply
Scott 2:08PM (3/20/2006)
Maybe the windows looks smaller because this truck actually is a lot bigger.
Reply
Doogs 2:13PM (3/20/2006)
Which begs the question...why not schedule the debut of the Tundra until closer to its actual on-sale date?
I mean...they wouldn't exactly be lacking in auto shows if they wanted to debut it in late 2006 / early 2007.
Stupid.
Reply
Mike from Scarborough 2:26PM (3/20/2006)
I'm trying to sell my 2001 tundra,and having a hell of a time,,,no intrest or bad time off year??I'd like to see toyota stop copying their designs around other automakers like ford for trucks,or Benze for their lexus models,andhave the balls to be orriginal.
Reply
cardudeATL 2:43PM (3/20/2006)
I know I'm probably in the minority here, but I like the design of this truck. I would still probably get Ford or Dodge before this, though. But it looks like Toyota is really doing its homework.
Reply
Joe 3:00PM (3/20/2006)
Lets not forget that the figure of $5k per vehicle is not front end rebate stuff. There is actually something around $1300 back on a new Tundra. The other money is in advertising. Take a look at what Nissan or any other low volume truck seller has in per truck marketing expense... Or look at the other trucks that have $3000+ money on the hood, plus the ad expenses, or sponsorship costs...
Reply
Puff Chippy 3:18PM (3/20/2006)
It's kinda like they took a little Dodge Ram and a little F150 then mixed it with a whole lot of fugly. The Asians are going to have a hard time competing with the domestics when it comes to pickups. It's one thing to build a better econobucket, which the big 3 never did well, but another to build a better pickup when the Chevy, the Ford and the Dodge are all top notch, excellent vehicles.
Reply
JW 3:23PM (3/20/2006)
I dont get the incentive thing, if someone really wants the new model then they probably will wait to get it instead of a current one, atleast i would...i wouldnt want a tundra though.
Reply
WolfgangNC 3:49PM (3/20/2006)
#11 said it, this won't be like the 80's and early 90's when the domestics stopped making good cars and the imports came in and setup shop. The imports don't have the "realiability" advantage in the pickup market. All the domestics have top notch products and vast number of configurations. Nissan and Toyota will take some sells; but it sort of like the domestics now taking some sells back from the imports in the car market.
Reply
Brian 4:19PM (3/20/2006)
So the moral of the story is when Toyota does incentives, it's a great strategy and Toyota cannot do any wrong with marketing a vechicle.
http://only-posting-to-pimp-my-blog.com
Reply
whofan 5:17PM (3/20/2006)
"So the moral of the story is when Toyota does incentives, it's a great strategy and Toyota cannot do any wrong with marketing a vehicle"
Recalls (or minor adjustments as they say) too. Must be nice to be Toyota!
Only took Toyota 15 years of trying, to build a FULL size truck. Now it looks bloated, with small wheels.
The Grizwalds could go on vacation with it.
Reply
Bruce 5:22PM (3/20/2006)
I again think the Tundra is homely to ok looking at best, depending on how you option it up. Meanwhile, the Dodge and Ford have nice looking trucks, and the new GM vehicles will look pretty good if the Tahoes are an indication.
It's about more than looks, but they matter. Combine this with the fact that while the current Tundra is a 7/8th's size truck, the new one seems to be more like 9/8ths. This "bigger is better" philosophy is great if you want a bigger truck, but not everyone does. I think a big reason Tundras sell well is that they are just a little smaller, more manageable, and easier to handle than the real Full sizers.
I have learned that I have no handle on American tastes, but I would not be surprised if Toyota sees Tundra sales actually fall with the new model (after the initial buzz sales), or at least the net profits will fall as they have to discount to make the sale on these bigger, pricier trucks.
Why? The new Tundra is now just one of the pack of big trucks, and lacks its seperate niche' in between midsize/compacts and true full sizers. For every new buyer won over by the brute strength and size, they'll lose one who would just as soon have a better looking, cheaper domestic if he's getting a truck that big.
Reply
Car-la 5:54PM (3/20/2006)
Isn't it normal practice to give incentives for expiring models? The problem with Ford and GM is that they have to give incentives on new cars. And as mentioned in the article, Toyota's margins are much larger than those of other manufacturers, so even if they give similar incentives, there'll still be more left for them.
Reply
Matt Keegan 6:36PM (3/20/2006)
It is ugly. I hope Toyota chokes on it...
Reply
Gale 8:48PM (3/20/2006)
I'll admit I'm a very happy Titan owner right up front, but thjs Toyota truck is seriously, hideously ugly. It makes the next ugliest truck - the Dodge, look almost attractive.
Toyotas never set the world on fire with their styling, but this goes waaaaay beyond boring and well into FUGLY. Sure, just because they're Toyota they'll sell more than they deserve to, but our eyeballs will be worse off for it.
Reply
Andrew 11:42PM (3/20/2006)
For everyone complaining how its not attractive:
It is a truck
Time was when trucks weren't bling, they were for, well, getting the job done. Reliable, rugged, etc.
Reply