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Customer LoginsToyota Tundra's struggles and implications for other OEMs
Sometimes hidden among all the setbacks the domestic OEMs have endured in the past five years is one notable success: thwarting Toyota's efforts to become a major competitor in the fullsize pickup segment. With the launch of the re-designed Tundra in 2007, Toyota hoped to gain a stronger foothold in this segment but the model has fallen short.
The Tundra's share of the half-ton pickup segment jumped by almost five points in 2007 to 13.8%, but since then it has retreated, and so far this year the Tundra's segment share is less than 10%. The domestics as a whole have gained share over the past five years, reaching a high of 88.4% in January/February 2011. One reason for the domestics' success is that they have not let old designs languish; the Silverado and Sierra were re-designed in 2007 and the Ford and Dodge products were all-new two years later. Another reason is that large pickup owners tend to be more segment- and brand-loyal than car owners.
However, anyone who thinks Toyota will "go quietly into the night," so to speak, in this segment is mistaken. Toyota has a history of adjusting course until it gets things right. This approach was vividly illustrated over 50 years ago when the company actually stopped selling cars in this country until they were able to offer a more competitive small car. Everyone knows how that turned out.
But the implications of Toyota's struggles in the large pickup segment go beyond Toyota. Volkswagen of America and Hyundai can only grow so much in the segments in which they are already participating. At some point they are going to have to seriously consider plunging into the high-volume, and lucrative, large pickup arena. The struggles that Toyota, one of the strongest companies in the industry, if not the strongest, has experienced clearly point out that any newcomer to this segment will face a monumental challenge.
Posted by Tom Libby, PolkInsight Advisor, Polk (04.28.2011)