Attempt to sell too-small T100 pickup was a full-sized failure
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October 29, 2007 01:00 AM

Attempt to sell too-small T100 pickup was a full-sized failure

Dealers complained, buyers stayed with Big 3

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    The 1983 Toyota T100, top, didn't stack up well against real full-sized trucks like Ford's F-150.

    In Nagoya in the early 1990s, you could see the anxiety in the faces of Toyota executives. Many were convinced that trying to sell a full-sized pickup in the United States was a huge and probably unnecessary risk.

    Not only was Toyota going after Detroit's last remaining — and fiercely defended — profit center. It also risked roiling the protectionist waters.

    Oh, and Toyota had zero experience building big trucks.

    But their counterparts at Toyota Motor Sales U.S.A. had persisted. The Americans wanted a big ol' truck, with all the trimmings.

    The two sides never really got together, and the result was a tentative and ultimately unsuccessful first effort to enter the large-pickup segment.

    Getting it right took about 15 years — not the kind of learning curve Toyota is accustomed to. Although Toyota didn't deliberately set out to blunder with its first two efforts, some insiders think the company had to fail before it could succeed.

    "We looked at it as a three-generation strategy," says Chris Hostetter, vice president of advanced product strategy and product planning. "We saw it as, 'Get into the market, improve it, then get it right.' "

    One reason it took so long was that the executives, engineers and product planners in Nagoya simply did not understand the U.S. full-sized pickup market.

    Not that Toyota didn't have experience with pickups. After all, Toyota had made its mark during the Voluntary Restraint Agreement era of the early 1980s, selling scads of bulletproof Hi-Lux compact pickups. But leaping into the full-sized segment was another matter.

    In the United States, Executive Vice President Bob McCurry insisted that a larger truck was necessary. McCurry and his U.S. management team had just gotten Japan to approve a separate luxury channel, so they thought it would be a cinch to get a true full-sized truck approved as well.

    Sorry, Bob, not so fast.

    Each American entreaty for a larger pickup was rebuffed, no matter how much market research was shoveled to Japan. Frustrated U.S. product planners sent ten-gallon cowboy hats to Japan to show the necessary headroom the truck needed. The Americans even invited the Japanese team to California to drive Ford and Chevrolet pickups around shopping mall parking lots.

    It didn't matter. The ruling from Japan was that Toyota could build a smarter, smaller full-sized pickup. This truck, the T100, was one of the few errors Toyota made in its 50 years in America.

    Jim Press, former president of Toyota Motor North America, understands the Japanese engineers who thought smaller would be sufficient.

    "We didn't know how to build it," he said. "It's easy for the sales guy to say, 'This is what we need.' But there's no magic chemical in the lab where we pour some red stuff and blue stuff together, and then there's some smoke and boom, you have a full-sized pickup. It wasn't a matter of scaling up a Tacoma."

    With the third-generation Tundra introduced this year, Toyota thinks it has a real player in the full-sized pickup segment.

    Slow to grow
    It took 14 years for Toyota? largest pickup to reach full size. Here are the specs for the biggest version available at introduction for each of the 3 generations.
     200720001993
     Tundra DOUBLE CAB 4-door pickup (2wd, 4wd)Tundra 2-door pickup (2wd)T100 Pickup
    Wheelbase145.7-164.6 in.128.3 in.121.8 in.
    Length228.7-247.6 in.217.5 in.209.1 in.
    Width79.9 in.75.2 in.75.2 in.
    Height76.0 in.70.5 in.66.7 in.
    GVW6,400-7,000 lbs.5,500-6,600 lbs.6,000 lbs.
    Payload1,390-1,755 lbs.1,455-2,205 lbs.1,650-2,150 lbs.
    Towing capacity10,100 lbs.7,100 lbs.5,200 lbs.
    Standard engineV-6V-6V-6
    Displacement4.0 liters3.4 liters3.0 liters
    Horsepower236190150
    Optional engines4.7, V-8, 271 hp4.7, V-8, 245 hpnone
     5.7, V-8, 381 hp  
    Transmissions5-speed automatic6-speed manual5-speed manual
     6-speed automatic4-speed automatic4-speed automatic
    THEY SHOULDA HAD A V-8

    For one thing, Japanese executives assumed incorrectly that the U.S. pickup market was similar to its car market, with many strata of vehicles, Hostetter says.

    There also was a lot of resistance in Japan to a V-8 engine, despite tons of market research.

    Says Yale Gieszl: "Americans want a V-8 engine, but the Japanese said we can get the same power from a V-6. But in America, who cares about that? They want a V-8, period." In 1992, when Gieszl was executive vice president, his first national dealer meeting included the introduction of the T100, to a lukewarm reception.

    There also was worry — both from a logistical and political standpoint — that such a head-on assault on the Big 3 might have serious repercussions.

    "It was a politically correct truck," Gieszl says.

    Adds Hostetter: "A full-sized T100 could have triggered domestic-content regulations that could have snuffed us. It was a matter of corporate citizenship versus getting it right from the start."

    Dave Illingworth, Toyota's chief planning and administrative officer, says the Japanese also were aware of the truck's environmental footprint.

    "They were conservative for how much sheet metal and resources it would take," Illingworth says. "The company knew a lot about cars and didn't know a lot about trucks and the U.S. truck market."

    TRUCK WAS 'A COMPROMISE'

    John Koenig, part of the T100 product planning team, says the pickup "was a compromise."

    "We pushed for a bigger truck, but (Toyota Japan) didn't want to make the big step right away. I think they were hesitant to attack," Koenig says.

    As a tradeoff for the smaller truck, he says the Japanese engineers gave the T100 three-across adult seating and acceptable headroom.

    There also were practical reasons for staying smaller. Although Toyota had a partner in commercial-truck maker Hino, neither knew how to build a full-sized pickup, says Bryan Bergsteinsson, who headed Toyota's pickup and SUV team before moving on to run Lexus Division. Toyota had never developed heavy-duty components and didn't have the right kind of factory to build a full-sized truck.

    "If you know sales are going to be modest, how much do you really want to invest?" Bergsteinsson says.

    Besides being small and underpowered, the T100 was imported, making it subject to the 25 percent "chicken tax" on imported trucks. That made the V-6 version pricier than some of the domestic V-8 pickups.

    Marketers scrambled to find a way to make the truck appeal to Americans.

    Yoshimi Inaba, a Toyota Motor Sales coordinator in the early 1990s before becoming president in 1999, hoped the T100 would attract buyers of compact trucks who weren't ready to move up to a true full-sized truck.

    "We had been selling so many Toyota (compact) trucks, big numbers," Inaba says. "Those were the bread-and-butter products for Toyota for many years.

    "Based on that customer pool that we own, our thinking was, 'How do we capture them if they need an upgrade?' Obviously, it didn't work. We had to do a lot of quick fixes."

    Even offering an extended cab in 1995 didn't overcome the T100's size deficiency. Sales never topped 38,000 units.

    BACK TO WORK

    U.S. product planners quickly began working on a successor to the T100. Armed with market research and loads of empirical data from dealers, the Americans pressed Japanese engineers even harder for a proper full-sized pickup.

    "We convinced them one by one," said Yoshio Ishizaka, Toyota Motor Sales president from 1996 to 1999, when the redesigned truck was developed.

    "We realized, 'Oh, this is really a different kind of world,' " Ishizaka says. "Although it may be wasteful, this is the customers' life, not mine. I don't drive this kind of large truck, but the customer likes it. To absorb the real customer's needs is really digestion."

    A mock-up of the 2000-model redesign was shown at a product planning meeting in Denver with Japanese engineers and some American dealers. It had a V-6 engine.

    One dealer stood up, fuming. He told the Japanese engineers that if the T100 replacement didn't offer a V-8, he wouldn't bother ordering any of them.

    "You might as well go home," chief engineer Toru Tanaka recalls the dealer saying.

    With a new 150,000-unit assembly plant in Princeton, Ind., committed to building the truck and a large SUV, Toyota's Japanese executives knew that a failure this time around would be disastrous. The V-8 was approved.

    The final version of the truck, named the Tundra, still wasn't completely up to American specs. Despite the presence of a 4.7-liter V-8, the wheelbase, overall length and towing capacity still came up short against the domestics. Some wags called it a seven-eighths-full-sized pickup.

    But for many Toyota buyers, it was close enough. Sales surged past 100,000 the year after the Tundra launched in June 1999. It was far fewer units than the domestics sold, but the outflow from the Tacoma to big domestic pickups had been slowed.

    Better yet, Toyota was starting to make inroads into domestic pickup loyalty. Not that conquest was the main objective, Press said.

    "The idea never was how do we grab full-sized truck share," he said. "It was how do we give more capability to Tacoma customers."

    With that experience and incremental success under their belts, Toyota executives forged ahead with their next effort. The beefy Tundra redesign that arrived in early 2007 shows what Toyota has learned in 15 years. It is every bit as large and brash as the Detroit 3 rivals, and its 5.7-liter V-8 can go toe to toe with the domestics.

    Toyota had so much confidence in its new Tundra that it dedicated a 200,000-unit plant in Texas truck country to supplement the output of the Indiana factory.

    "The Tundra marketed today in the States has the real size," Ishizaka says. "Of course, there was a very strong balance between Japanese engineering philosophy and American requests. It only took three generations."

    But even with the Tundra targeted to sell 200,000 units this year and as many as 300,000-plus units in the future, some executives still aren't satisfied. Bergsteinsson thinks Toyota hasn't finished the process.

    "We're still not there with the new one," he says. "Where's the three-quarter-ton? Where's the dually? At least we got the package and content right." 

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