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Toyota to Trim LineUp

Old 11-07-18, 05:48 AM
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GS69
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Question Toyota to Trim LineUp


http://www.autonews.com/article/2018...PY01/311069977

Toyota takes 'hard look' at trimming U.S. lineup as profits rise

November 6, 2018 @ 3:25 am
TOKYO – Toyota, battling plateauing demand in its biggest market, is reviewing its entire U.S. lineup and could dump nameplates or models that are falling out of favor.

"We are taking a hard look at all of the segments that we compete in to make sure we are competing in profitable segments and that products we sell have strategic value," Jim Lentz, the company’s North America CEO, said here after the automaker reported a rise in quarterly profits Tuesday.

Toyota joins automakers including Ford Motor Co. and Fiat Chrysler Automobiles in rethinking product portfolios in a market that is becoming increasingly dominated by light trucks. Lentz said his company will not abandon passenger cars but it is scrutinizing offerings in some areas, such as convertibles or coupes.

Profits rise

Toyota Motor Corp.'s operating profit increased 11 percent in the latest quarter as Japan's biggest automaker tapped growing demand for light trucks and cranked up cost cutting.

Operating profit rose to 579.1 billion yen ($5.09 billion) in the automaker's fiscal second quarter ended Sept. 30, while net income grew 28 percent to 585 billion yen ($5.15 billion).

Revenue increased 2.3 percent to 7.31 trillion yen ($64.3 billion).
Global retail sales edged ahead 1.9 percent to 2.68 million vehicles in the July-September period, including results from its Daihatsu small-car subsidiary and truck-making affiliate Hino.

Worldwide wholesale volume added just 0.4 percent to 2.18 million.

In announcing the earnings results on Tuesday, Senior Managing Director Masayoshi Shirayanagi partly credited big gains from a richer mix of more profitable models as Toyota concentrates on the booming global demand for crossovers, SUVs and other light trucks.

Profits also ticked higher as the maker of the Camry sedan and RAV4 compact crossover reigned in incentives and lifted pricing power thanks to a new round of vehicles riding on the company’s modular platform, dubbed the Toyota New Global Architecture.

The updrafts offset a 20 billion yen ($175.9 million) hit from foreign exchange rates.



U.S. incentives


Toyota has also refined its incentive strategy for a more tailored approach, he said. The Toyota brand's average U.S. outlays are down $145 per vehicle this year and are about $1,200 below the industry average, he said. Lexus spiffs are flat, even as the segment's average increases.

"We're putting dollars where we're going to get the most bang for our buck," Lentz said. "Most importantly today is incentivizing vehicles that are much more profitable."

While the Toyota brand’s incentives on passenger cars fell 16 percent through September, for instance, spending on light trucks increased 8 percent, according to Autodata.

North American wholesale deliveries dipped 1 percent to 665,000 vehicles in July-September. But regional operating profit rose 12 percent to 58.9 billion yen ($518.1 million).

In Europe, wholesale volume increased 4.8 percent to 240,000 vehicles in the quarter. European regional operating profit more than doubled to 38.7 billion yen ($340.4 million).

Brighter outlookCiting the improved sales footing and a forecast for more cooperative in foreign exchange rates, Toyota lifted its earnings outlooks for the current fiscal year ending March 31, 2019.

Toyota now expects operating profit to essentially break even from last year. It had earlier predicted a 4.2 percent decline in full-year operating profit. In net income, Toyota now sees a 7.8 percent decline, a less severe decrease than the 15 percent drop it had originally forecast.

Naoto Okamura contributed to this report.
You can reach Hans Greimel at [email protected] -- Follow Hans on Twitter: @hansgreimel

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Old 11-07-18, 06:09 AM
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What might they cut? I could see them trimming the prius line up... (v, c) but what else? Yaris? C-hr? If they got rid of the '86 they'd have nothing sporty until the supra arrives.

i think the lexus gs is done too, sadly... maybe the rc too.





Last edited by bitkahuna; 11-07-18 at 06:16 AM.
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Old 11-07-18, 06:09 AM
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Not surprising this might happen. The smaller one-off cars are not as profitable as the larger SUVS and trucks. A recession will eventually come the United States and purging certain models make sense.
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Old 11-07-18, 06:15 AM
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http://www.autonews.com/article/2018...OG06/181109846

Toyota's chopping block: The prime candidates

November 6, 2018 @ 1:00 pm
The Toyota 86 on display during its unveiling at Fuji Speedway in Oyama Town, Shizuoka Prefecture, Japan, on July 5, 2016. Photo credit: BLOOMBERG
The gradual shift in Toyota Motor Corp.'s U.S. product and sales mix over the past decade has exposed some weak performers on the car side.

In 2009, cars accounted for 63 percent of the Toyota brand's U.S. sales. Today, they represent 38 percent.



And the company
acknowledged Tuesday it is looking to pare its U.S. lineup in response to the industrywide shift from cars to light trucks.

While other automakers abandon key car segments such as midsize and compact sedans, Toyota says it won't go that far. The venerable Camry and Corolla are valuable nameplates that no doubt will survive.

But there are some prime candidates for the chopping block:

Yaris: U.S. sales of the subcompact car, available as a two-door or four-door hatchback, are off 38 percent this year. Demand for the two-door has slumped 78 percent. And the Yaris, a rebadged Mazda2, looks even more vulnerable now that Toyota is fielding a Corolla hatchback. Chance of survival: 5 percent

Prius c: Toyota may further reduce the number of Prius hybrid models. The wagonlike v is already gone and the subcompact c, mildly freshened for 2018, is expected to bow out after 2018, according to some reports. Chance of Prius c survival: 0 percent


86: The 86 sport coupe, formerly the Scion FR-S, is a product of a joint program with Subaru, which builds the 86 alongside the similar Subaru BRZ in Japan. But Toyota is also partnering with BMW to resurrect the Supra coupe, and it's unlikely Toyota will field two sport coupes over time. Also, the 86 is long in the tooth for a sport coupe. It debuted in 2013 and needs a major freshening. Toyota and Subaru have squabbled on how to evolve the car. Chance of survival: 0 percent.

Avalon: U.S. sales of large cars are in a slump -- down 18 percent this year -- and Ford and Hyundai plan to abandon the segment altogether. But Avalon sales are up 4 percent this year and the case for the car's future is mixed if other automakers leave the segment. Chance of survival: 75 percent


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Old 11-07-18, 06:22 AM
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Both Yaris models, couple Prius models, Avalon, GS (I wont believe that they don't have something already in the works though) are my picks.
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Old 11-07-18, 06:22 AM
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Originally Posted by bitkahuna View Post
What might they cut? I could see them trimming the prius line up... (v, c) but what else? Yaris? C-hr? If they got rid of the '86 they'd have nothing sporty until the supra arrives.

i think the lexus gs is done too, sadly... maybe the rc too.
Some of the Prius line. 86, Toyota Land Cruiser or Sequoia (they just need one BOF model). GS for sure, RC for sure.
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Old 11-07-18, 07:48 AM
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Well, if they do a new MR2 like some of the talk has been, that certainly won't trim the line-up any, unless they cut more than one line to compensate.

Personally, I think that, if they want to trim the U.S.-market line-up, the best candidate would be the Yaris, which IMO is uncomfortable to sit in and drive. In its place, substitute a decontented, bare-bones Corolla, with less trim and equipment...the Corolla is a much nicer car to drive.
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Old 11-07-18, 08:57 AM
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Originally Posted by bitkahuna View Post
What might they cut? I could see them trimming the prius line up... (v, c) but what else? Yaris? C-hr? If they got rid of the '86 they'd have nothing sporty until the supra arrives.

i think the lexus gs is done too, sadly... maybe the rc too.
I agree about the Prius C. It's already been announced that the current Prius V is wrapping up. C-HR is selling well so I'd be shocked if they trimmed that.

Originally Posted by GFerg View Post
Both Yaris models, couple Prius models, Avalon, GS (I wont believe that they don't have something already in the works though) are my picks.
You really think the Avalon would go? I don't see them cutting it.

As for the Yaris, I don't think it needs to be cut, I just think it needs to be made more competitive.

I think it's time to let the Sequoia go, though.
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Old 11-07-18, 09:09 AM
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Originally Posted by JDR76 View Post
I agree about the Prius C. It's already been announced that the current Prius V is wrapping up. C-HR is selling well so I'd be shocked if they trimmed that.



You really think the Avalon would go? I don't see them cutting it.

As for the Yaris, I don't think it needs to be cut, I just think it needs to be made more competitive.

I think it's time to let the Sequoia go, though.
Avalon as a car might go, but turning it into something else could happen.

Last edited by LexsCTJill; 11-07-18 at 10:49 AM.
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Old 11-07-18, 10:44 AM
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cancelling SUVS in an SUV hot market...FORGET IT.

RC wont be cancelled just cause it just got refreshed...Avalon same thing.

I would assume anything needing a refresh, not an SUV...on the chopping block. Everything else stays.
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Old 11-07-18, 12:26 PM
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I had to take a look at what Toyota was offering in the US these days:

Yaris Liftback
Yaris
Corolla
Corolla Hatchback
Prius
Prius C
Prius Prime
Camry / Hybrid
Avalon / Hybrid
Mirai
86
Sienna
Tacoma
Tundra
C-HR
RAV4 / Hybrid
Highlander / Hybrid
4Runner
Sequoia
Land Cruiser

I would agree, the Yaris, and Prius C probably won't make the cut
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Old 11-07-18, 02:15 PM
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Originally Posted by Hoovey2411 View Post
I had to take a look at what Toyota was offering in the US these days:

...

I would agree, the Yaris, and Prius C probably won't make the cut
Using Hoovey's list...
  • Yaris Liftback - This model is old (has been around since 2012 and refreshed twice since then) and does not sell well, so I can see it being cancelled.
  • Yaris - The Yaris sedan (born as the Scion iA) is a badge-engineered Mazda 2 produced by Mazda in Mexico. It may not be that easy to cancel it, depending on the conditions of the contract between Mazda and Toyota.
  • Corolla - A new model is on its way next year. And the Corolla is second only to the Camry in sales. I don't see it being cancelled. I would hope that Toyota adds a Corolla Hybrid model.
  • Corolla Hatchback - This is a new model. I don't see it being cancelled. I would also like to see a Hybrid model.
  • Prius - I don't see the worldwide standard-bearer for Hybrid vehicles being cancelled.
  • Prius C - The Prius c (yes, lower-case "c") is old, as old as the Yaris Liftback. I can see it being cancelled.
  • Prius v - The Prius wagon version has already been cancelled in the USA but still available in Canada. I can see it being cancelled in Canada also.
  • Prius Prime - I don't see this model being cancelled.
  • Camry / Hybrid - This is Toyota's best-selling car model. I don't see it being cancelled.
  • Avalon / Hybrid - This is a new model. It does not sell that well (but better than the Yaris models) and even worse in Canada. If sales continue to be poor, I could see it being cancelled when it comes time for the facelift.
  • Mirai - This is more of a demonstration model. It will come or go at the whim of management.
  • 86 - Until (and if) an even lower-priced sports coupe comes along, I don't see this being cancelled.
  • Sienna - I don't see this model being cancelled.
  • Tacoma - This is a truck. Trucks are not in danger of being cancelled.
  • Tundra - This is a truck. Trucks are not in danger of being cancelled.
  • C-HR - This is a subcompact crossover, a model that dealers waited forever for. I don't see it being cancelled. I would hope to see a Hybrid model added to the lineup.
  • RAV4 / Hybrid - This is a compact crossover, the best-selling crossover, has a new model coming, and Toyota Canada shuffled the Corolla out of its Canadian plants to drastically increase production of this model. I don't see it being cancelled.
  • Venza - Although this mid-size crossover has already been cancelled, it was a mid-size, 2-row crossover that other automakers have in their lineups -- and Honda and Mazda seem to believe are missing from their lineups -- so I would not be surprised to see some replacement coming.
  • Highlander / Hybrid - This is a mid-size, 3-row crossover, with a new model coming. I don't see it being cancelled.
  • 4Runner - This is a truck, a cult model and with few (if any) real competitors. Trucks are not in danger of being cancelled.
  • Sequoia - This model is getting old. I don't know what will happen to this truck.
  • Land Cruiser - I don't know what will happen to this truck. But, like the 4Runner, this is a cult model and few real competitors.
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Old 11-07-18, 04:32 PM
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Originally Posted by bitkahuna View Post
What might they cut? I could see them trimming the prius line up... (v, c) but what else? Yaris? C-hr? If they got rid of the '86 they'd have nothing sporty until the supra arrives.

i think the lexus gs is done too, sadly... maybe the rc too.
Yaris Hatch and Prius v seem to be almost cut already, maybe Prius c too soon? These 3 cars sold like 800 units total last month. I would guess Sequoia will get new version?

Otherwise, C-HR sells around 50k per year, it is not going anywhere.
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Old 11-07-18, 04:49 PM
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Originally Posted by JDR76 View Post

You really think the Avalon would go? I don't see them cutting it.

I think it's time to let the Sequoia go, though.
I don't know what they will do, but if they do, I think I'll understand why.

Reason why - So much sedan overlap between Camry, Avalon, and ES350 (I'm sure we could potentially throw in IS for those shopping a budget). Just seems like an easy candidate. Give it 2-3 years when the newness wears off, Avalon sales will be down a good amount like it usually is.

Reason why not - Platform sharing. It could be dirt cheap to manufacture an Avalon because of all the shared parts and who knows, the profit margin could be pretty great!
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Old 11-07-18, 05:41 PM
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The cuts will happen in Canada too and that could signal what might happen in the US, although in the States there are far more big market prestige cities than Canada. Anything that's niche, esotoric or expensive to make might get dropped because it's not profitable to have that halo vehicle sitting in your showroom like a big fancy paperweight. In Canada the LC and RC are selling in tiny numbers. They sold 117 LC and 241 RC coupes in 2018 so far. Those are probably going away. GS could go away too, 163 sold in CA in 2018.

They'll keep IS, ES and RX of course.
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