Toyota Corolla Cross has shot at segment title

AUSTIN, Texas — Toyota may be late to the traditional subcompact crossover game, but it plans to launch its first core entry with a full hand that includes what it hopes will be an ace or two.

With cars fading from consumer shopping lists, Toyota executives say it was a slam dunk to leverage the venerable Corolla nameplate in fielding the Corolla Cross.

It will slot between the CH-R — technically a subcompact crossover but more of a hatchback in reality — and the RAV4.

The Corolla, launched in Japan in 1966 and the U.S. in 1968, is one of the top-selling nameplates of all time. More than 50 million have been sold worldwide.

U.S. sales of the Corolla Cross will begin in October and deliveries are expected to tally around 6,000 this year, Toyota executives said, before a major media campaign is scheduled to begin in January.

Pricing will start at $23,410, including shipping, for a front-wheel-drive L model and top out at $28,840 for an all-wheel-drive XLE. All models are powered by a 2.0-liter, four-cylinder engine with 169 hp and 150 pound-feet of torque, and its towing capacity will be 1,500 pounds.

"Corolla has been synonymous with dependability, fuel efficiency, safety and value" for decades, said Lisa Materazzo, group vice president of Toyota Division marketing. "We are building upon that foundation and offering even more versatility and creature comforts with the Corolla Cross."

Toyota is targeting U.S. sales of 100,000 in 2022, which would make the Corolla Cross among the segment's top sellers, while giving the brand another core light truck. Toyota already leads two other key crossover segments with the compact RAV4 and large Highlander.

Only two subcompact crossovers have produced annual U.S. sales in excess of 100,000: the Subaru Crosstrek (2017-20) and Chevrolet Trax (2019-20).

The segment has become among the most competitive in the auto industry, with some brands — Chevrolet, Buick, Hyundai, Kia, Mazda and now Toyota — fielding two different vehicles. The Honda HR-V, which is being redesigned specifically for the U.S. — pulled ahead in the segment through June.

In perhaps Toyota's biggest bet on the Corolla Cross, it will be assembled in a new, $2.3 billion plant in Huntsville, Ala., operated jointly with Mazda Motor Corp.

The company is targeting Corolla Cross output of 150,000 vehicles a year, with exports planned to Mexico and Canada.

Even as the chip shortage upends production schedules, Materazzo called the Corolla Cross introduction a priority for Toyota. It is the first major all-new product Toyota has launched during the pandemic. The midsize Venza hybrid crossover was just months from showrooms when the COVID-19 outbreak began.

The marketing campaign for the Corolla Cross — Just Right, Feels Right — will be heavy on digital platforms to reach a wide target audience of young singles, couples and other entry-level buyers.

Because of some price overlap, the vehicle is expected to attract some Corolla sedan and hatchback buyers more than RAV4 shoppers.

Materazzo said all four of Toyota's ad agencies — Saatchi, Burrell, Conill and Intertrend — will be utilized to reach a broad band of consumers, including African Americans, Asians and Hispanics. Toyota also plans some 29 Corolla Cross accessories to be sold through dealers.

Materazzo said research shows 70 percent of buyers are new to the subcompact crossover segment, which is nearing 1 million vehicles. With the steady decline in car sales and consumer shift to crossovers, the segment has become a key entry point for many brands.

Toyota, along with its dealers, has consistently advertised during the pandemic and in recent months amid the global microchip shortage that has put a major dent in dealer stockpiles.

"We want to stay top of mind," said Materazzo. "We still want people to visit our dealers, who are best equipped to handle anything."