Toyota will keep passenger cars in U.S. lineup, says brand chief

When Toyota dealers convene for their annual dealer meeting at Mandalay Bay resort in Las Vegas, they'll hear a message that would seem out of place coming from almost any other automaker — especially one about to launch a redesign of its most popular pickup.

"We're still investing in passenger cars," said Dave Christ, head of the Toyota division at Toyota Motor North America. "We just launched the [redesigned] Prius and Prius Prime; we launched the Crown, which is a great kind of in-between car and an SUV, though it's technically a car, and we're going to continue to invest in cars going forward."

That includes a re-engineered Camry sedan due out in the first half of 2024, and a re-engineered Corolla sedan due out in 2025, as detailed in Automotive News' Future Product Pipeline. The redesigned 2024 Toyota Tacoma will reach dealer lots in force in early 2024, as will the revived 2024 Toyota Land Cruiser.

Toyota's commitment to being one of the last full-line brands in the U.S. — with multiple car nameplates, unibody crossovers, and body-on-frame SUVs and pickups — can mean added carrying costs for dealers who must stock a wide array of vehicles, especially as inventories grow. Christ said that as production constraints ease, Toyota is committed to keeping dealer inventory levels manageable, while still offering customers choice on dealership lots.

"If you go back, really as far as our records go, we've always had a lower days' supply and a lower incentive spend than the industry average, and we expect that to be the case again," Christ said. "We do think a comfortable balance between where we are today — which is low inventory, low supply — and high inventory, high supply — we want to be right in that sweet spot, where the customer has inventory to look at, has the ability to make a color, trim and model level selection on the lot, and not have too few and not have too many."

Christ said inventory rising from historic lows means incentives will return.

"Incentives and inventory are kind of tied at the hip; as inventories rise, incentives rise, and as inventories fall, incentives fall. So we're committed to incentives and being competitive in the market," Christ said. "We obviously have had low incentives for a while now and have committed to our dealers that we're going to support them as inventories grow, and as they need incentives." He said incentives will likely go up, "but I think it's going to be tied to the inventory situation."

Christ said customers have responded enthusiastically to the addition of the Toyota Grand Highlander to the lineup this summer. Last month, the larger three-row crossover — designed to offer consumers a more user-friendly and roomier third row of seating — outsold the traditional Highlander 8,663 to 6,917. Christ said he's not sure the Grand Highlander's sales feat will be a long-term trend but that the larger vehicle is filling a much-needed niche in Toyota's lineup.

"I think it's hitting the sweet spot of good-looking, fun-to-drive, but very practical," he said.