GM ready for Toyota trucks
Tuesday, November 07, 2006
GM ready for Toyota trucks
Tundra will claim some of the pickup market, but Detroit automaker is confident in its products.
David Shepardson / Detroit News Washington Bureau
WASHINGTON -- General Motors Corp. Vice Chairman Robert Lutz said Toyota's redesigned Tundra pickup, hitting showrooms in February, is likely to be a strong seller, but GM doesn't expect to cede much market share to the Asian automaker.
"They'll do well," Lutz said in a brief interview with reporters Monday in Washington, but he doesn't think the Tundra will steal much from GM's full-size truck sales, which add up to about 1 million units annually.
Toyota Motor Corp. will open an $850 million, 2.2-million-square-foot manufacturing facility next week in San Antonio, where the Japanese automaker will begin building the pickups, which are bigger than previous versions of the Tundra and more competitive with GM, Ford and Dodge trucks.With the new Tundra, Toyota is taking on Detroit's Big Three in one of the most profitable vehicle segments, one they have long dominated.
GM, Ford Motor Co. and Dodge parent DaimlerChrysler AG's Chrysler Group accounted for about 90 percent of the 2.5 million vehicle full-size pickup truck market last year, led by GM's 935,000 unit sales and Ford's 901,000.
That pecking order is not likely to change even as sales projections vary. Analysts -- and Ford -- estimate sales of full-size trucks will be down as much as 8 percent to 2.3 million units this year. GM sales chief Mark LaNeve expects sales to "be up slightly next year."
Demand has wavered this year amid volatile gas prices.
Ford's F-series sales -- 901,000 in 2005 -- rose 3 percent in October but are off 10.2 percent for the year. Chevy's big pickup sales are down 10.8 percent through October.
In September, Don Esmond, senior vice president of automotive operations at Toyota Motor Sales USA, told The Detroit News the automaker wants to double Tundra volume with the 2007 model.
Sales of the current Tundra rose 17.1 percent in October, to just over 10,000 units.
Lutz said Toyota was relying on heavy incentives to sell the pickup.
GM's new 2007 Silverado, meanwhile, got off to a strong start with sales up 104 percent last month. The vehicle debuted in mid-October.
"The customers will decide," LaNeve said Monday. "I do know that we have done a sensational job of listening to our customers."
Toyota spokeswoman Denise Morrissey agreed the market will decide, but said the automaker expects to sell 200,000 Tundras next year, up from about 126,000 in 2005. Through October, Toyota has sold about 100,000 Tundras.
Morrissey noted that when Dodge launched a redesigned Ram in 1994, sales tripled as 215,000 buyers switched to Dodge.
"We've been competing with Ford, GM and Dodge for 50 years," Morrissey said. "We know the full-size market is very loyal and smart. Once they get familiar with the Tundra, get to know it, I think they will consider it. Loyalty is definitely key in this market, but it will only get you so far."
Jim Quinlin, a Knoxville, Tenn., Chevrolet dealer, expects the Toyota truck to be a tough competitor.
"They are going to take some share," he said. "But the new Chevy truck is great, so I don't think they'll take too much from us."
David Healy, an auto analyst with Burnham Securities, said Toyota will be a formidable rival, but it won't be easy.
"Toyota is not going to get a lot of the good ol' boys out of the Silverados and F-150s," Healy said. "The idea is mostly these are going to be sold to people who already own Toyotas and are looking to upgrade into that area."
Lutz said when Japanese automakers grabbed significant share in the U.S. car market between 1979 and 1981, Toyota and Honda Motor Co. were building better quality vehicles.
In the truck market, Detroit's Big Three build vehicles of comparable quality to Japanese models, he said, which makes it less likely loyal GM buyers will shift to a foreign nameplate.
You can reach David Shepardson at (202) 662-8735 or dshepardson@detnews.com.
© Copyright 2006 The Detroit News. All rights reserved.
GM ready for Toyota trucks
Tundra will claim some of the pickup market, but Detroit automaker is confident in its products.
David Shepardson / Detroit News Washington Bureau
WASHINGTON -- General Motors Corp. Vice Chairman Robert Lutz said Toyota's redesigned Tundra pickup, hitting showrooms in February, is likely to be a strong seller, but GM doesn't expect to cede much market share to the Asian automaker.
"They'll do well," Lutz said in a brief interview with reporters Monday in Washington, but he doesn't think the Tundra will steal much from GM's full-size truck sales, which add up to about 1 million units annually.
Toyota Motor Corp. will open an $850 million, 2.2-million-square-foot manufacturing facility next week in San Antonio, where the Japanese automaker will begin building the pickups, which are bigger than previous versions of the Tundra and more competitive with GM, Ford and Dodge trucks.With the new Tundra, Toyota is taking on Detroit's Big Three in one of the most profitable vehicle segments, one they have long dominated.
GM, Ford Motor Co. and Dodge parent DaimlerChrysler AG's Chrysler Group accounted for about 90 percent of the 2.5 million vehicle full-size pickup truck market last year, led by GM's 935,000 unit sales and Ford's 901,000.
That pecking order is not likely to change even as sales projections vary. Analysts -- and Ford -- estimate sales of full-size trucks will be down as much as 8 percent to 2.3 million units this year. GM sales chief Mark LaNeve expects sales to "be up slightly next year."
Demand has wavered this year amid volatile gas prices.
Ford's F-series sales -- 901,000 in 2005 -- rose 3 percent in October but are off 10.2 percent for the year. Chevy's big pickup sales are down 10.8 percent through October.
In September, Don Esmond, senior vice president of automotive operations at Toyota Motor Sales USA, told The Detroit News the automaker wants to double Tundra volume with the 2007 model.
Sales of the current Tundra rose 17.1 percent in October, to just over 10,000 units.
Lutz said Toyota was relying on heavy incentives to sell the pickup.
GM's new 2007 Silverado, meanwhile, got off to a strong start with sales up 104 percent last month. The vehicle debuted in mid-October.
"The customers will decide," LaNeve said Monday. "I do know that we have done a sensational job of listening to our customers."
Toyota spokeswoman Denise Morrissey agreed the market will decide, but said the automaker expects to sell 200,000 Tundras next year, up from about 126,000 in 2005. Through October, Toyota has sold about 100,000 Tundras.
Morrissey noted that when Dodge launched a redesigned Ram in 1994, sales tripled as 215,000 buyers switched to Dodge.
"We've been competing with Ford, GM and Dodge for 50 years," Morrissey said. "We know the full-size market is very loyal and smart. Once they get familiar with the Tundra, get to know it, I think they will consider it. Loyalty is definitely key in this market, but it will only get you so far."
Jim Quinlin, a Knoxville, Tenn., Chevrolet dealer, expects the Toyota truck to be a tough competitor.
"They are going to take some share," he said. "But the new Chevy truck is great, so I don't think they'll take too much from us."
David Healy, an auto analyst with Burnham Securities, said Toyota will be a formidable rival, but it won't be easy.
"Toyota is not going to get a lot of the good ol' boys out of the Silverados and F-150s," Healy said. "The idea is mostly these are going to be sold to people who already own Toyotas and are looking to upgrade into that area."
Lutz said when Japanese automakers grabbed significant share in the U.S. car market between 1979 and 1981, Toyota and Honda Motor Co. were building better quality vehicles.
In the truck market, Detroit's Big Three build vehicles of comparable quality to Japanese models, he said, which makes it less likely loyal GM buyers will shift to a foreign nameplate.
You can reach David Shepardson at (202) 662-8735 or dshepardson@detnews.com.
© Copyright 2006 The Detroit News. All rights reserved.
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