LOS ANGELES - For executives at competing companies who thought last year was the worst of the product storm that Toyota Motor Sales U.S.A. could visit upon you, realize this: That was merely the eye of the hurricane.
Intensifying the product barrage it started last summer with the Tundra full-sized pickup, Avalon full-sized sedan, Celica coupe and Echo subcompact, Toyota this year will average one new launch every 40 days for the rest of the year. Including last year's four intros, it adds up to 13 new or redesigned models in all, including Lexus, by year end.
'Thirteen? Really? Thirteen?' one senior executive for a smaller Japanese automaker exclaimed with obvious dismay when told of Toyota's plans. 'Aw, geez.'
But the deluge will not end there: In early 2001, Toyota will launch a Camry-based sport-utility (see photo on Page 1) and Lexus will add a hardtop roadster.
That's the kind of onslaught a company can unleash when it has $30 billion in the bank. This product tour de force is the start of the Japanese giant's push to crack 2 million annual U.S. sales by 2010, said David Danzer, group vice president of corporate planning for Toyota Motor Sales U.S.A. Inc. Toyota and Lexus came just shy of breaking 1.5 million units in 1999.
'Many of the products we're bringing are in market segments in which we are weak or not represented, so this is a big growth opportunity for us,' Danzer said. 'We have a real opportunity to gain several hundred thousand units of volume with this.
'The market is still strong, gas prices haven't gone up too much, interest rates are still OK. We're seeing a lot of people coming off-lease. The timing for this couldn't be better.'
Indeed, two vehicles not even in Toyota's lineup a year ago have brought in some nice incremental volume since their launch. Through January, sales of the Tundra full-sized pickup, launched last June, totaled some 49,700 units, while sales of the Echo subcompact, launched in October, totaled 14,600.
Danzer wouldn't specify from whose hide Toyota will take the added volume. He noted, though, that truck-dependent automakers that have let their car lines go to seed are vulnerable, even though the market right now is gung-ho for off-road vehicles.
One industry analyst also issued a warning to smaller automakers still counting the profits from a bountiful 1999.
'Brand counts, and Toyota means a lot to people,' said Dan Gorrell, vice president of consulting firm Strategic Vision in San Diego. 'Toyota is being very aggressive, and all this growth is going to come out of the hide of the second-tier Japanese and the domestics who insist on supporting the old brands.'
Asked to specify who will be hardest hit, Gorrell said, 'Probably Mitsubishi, Isuzu and even Nissan.'
Recent Strategic Vision surveys show potential buyers gave Toyota as high a purchase consideration rating as Ford and Chevrolet, Gorrell said. That's the first time a Japanese brand has ever stood toe to toe with the two domestic brand giants, which typically outsell Toyota Division by a factor of two.
'There's a lot of consumer receptivity to the brand,' Gorrell said. 'Toyota has a real opportunity, with a lot of upside potential.'
Danzer agrees with Gorrell's assertion that Toyota's one big hurdle this year will be smartly allocating enough resources to handle all these product launches. In the early 1990s, Mazda tried launching five products in a little more than a year and was overwhelmed.
Spending is key
Danzer is not worried about capital or human resources running out. But he does want to make sure Toyota spends its money wisely.
'There's always a concern we might be stretched too thin,' Danzer said. 'We need to make sure we don't have too many multiple messages where everything is new.
'Fortunately, not all of our spending will be to establish new nameplates. Some, like the MR2, have just been missing in action, so they will be easier to bring out.'
Brad Winter, general manager of Sunshine Toyota in Battle Creek, Mich., said his dealership is ready for the new products.
'Tundra has already boosted sales quite a bit, Sequoia is going to be hot, and the RAV4's new style will help sales a lot,' Winter said.
On the car side, he said he expects Toyota to cut back on sales of Corolla a bit, 'but Camry being No. 1 for three years isn't going to slow down any.'