Let's talk BOF

ssun30

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There are lots of discussions recently concerning Lexus' future in utility vehicles (and TMC in general), mostly from the not well understood boom in BOF vehicles recently. I think this deserves a dedicated discussion.

In the midst of the crossover craze, many expected traditional BOF utility vehicles to see a considerable decline for many obvious reasons. However, the market doesn't seem to think so, at least in the U.S. Currently Lexus' SUV lineup is topped by the GX and LX, both BOF vehicles that are no longer offered by any premium brand. These two seemed to secure comfortable niches of their own. But their success really brings a series of questions that I hope can get more insight of:

1) Is there any concrete evidence that the apparent success of these vehicles is the result of being BOF and having no competition?

My take: I'm not really sure about this one without seeing the impact RX-L will have on GX sales.

2) Is it worth going into the premium unibody SUV market with two GA-L vehicles?*

My take: Obviously this is a very lucrative market, but with cutthroat competition the risk will be very high. So far Lexus has been very smart to avoid direct confrontation with the Germans, and occupy complete market segments with no challengers. But not having a direct answer to the GLE/X5 has been very problematic. At the very top, full-size luxury SUVs have become the de facto flagship for all premium brands. Having a GLS/X7/Q8/RR Autobiography/Levante is very important for brand image.

*The LF-1 news came while I was typing this. So it's confirmed, Lexus will do a GA-L based crossover, but will come in the "raised 4-door coupe nonsense" body style as an answer to the X6/GLE Coupe. The question still stands: is it worth making the GX/LX GA-L too?

3) If GX/LX go unibody, is it worth keeping a BOF Lexus? And if a BOF Lexus continues to exist, what are the implications on its Toyota stable mate?

My take: I bring up this question because of recent difficulties with the LC200. OK it is still somewhat popular among big oil/gas people in Russia and Middle East. But it seems that the LC200 is nowhere close to its historical success. The LC200 is arguably the best Land Cruiser Comfort ever made, but I've always thought Toyota went too far with it: it's too big, too luxurious, too powerful, and too gimmick-packed, that it's no longer accessible to people wanting a full-size offroader (well for the Americans there's the crappy Sequoia). The direct result is that those who can afford the LC200 will almost definitely get the Lexus badge for a little bit more. The LC80 has a nice balance of offroad performance and comfort at a reasonable price, that role has been assumed by the Prado and, to a lesser extent, the 4Runner; the LC100/200 are just too much.

A tough, nature-conquering offroader doesn't suit the Lexus brand well; that thing should always carry a Land Cruiser badge. I'm thinking Toyota should just make two Land Cruiser variants*: the Prado as the comfort option and the FJ as the hardcore option, and fully focus on unibody with Lexus.

*And make a serious Sequoia that has some quality.
 

CIF

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I think this is a topic more meant for the garage.
 

Gecko

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I am going to share a post I recently wrote on T4R.org because a lot of the info is very similar:

It's a bit too much to go into tremendous depth right now, but a lot of the things you see are related to management changes and a company that has been historically very, very slow to anticipate and react to market shifts - in a market that has been more unpredictable it's ever been at any point in history.

After Akio Toyoda took over as chairman, he completely reshuffled the company, gave Lexus more autonomy, reduced the number of people needed to make strategic decisions, shut down Scion, committed to improving quality, streamlined operations by region instead of consolidating power in Japan, and mandated that all Toyota products needed to be more emotional and engaging. Think about the Camrys and Avalons we had in the 90s and early 2000s compared to what we have right now.

Prior to Akio's leadership, there was little emphasis on "sports," enthusiast vehicles, powertrain advancement/leadership and quality dipped significantly. There were some products like Supra and LS 400 that were positive developments, but overall, Toyotas were reliable, but they were not often great to look at - with trucks being an exception. This is the period where Toyota really rested on their laurels and coasted on the reputation they'd been building for decades.

Akio is the one who called for the new TNGA modular architecture and an entire new family of engines - Dynamic Force - because he saw an opportunity to streamline manufacturing operations, cut costs and increase speed to market (historically a Toyota weak spot). Keep in mind that many of these decisions were made around 2009-2010 when gas prices were $4 per gallon, nobody wanted SUVs, dealers couldn't even keep a Prius on the lot and the world still recovering from the worst financial crisis in many decades. Toyota's goal was to reinvent the core of their portfolio - Camry, Rav4, Corolla, Prius and similarly sized global models - to be better than they'd ever been before. It seemed at this time that sports cars, trucks and SUVs would never bounce back because consumers didn't want the liability of paying $4/gallon for gas on something that got 14MPG. It was then that products like Tacoma, Tundra, Sequoia, 4Runner and Land Cruiser were terminated, put on hold or temporarily delayed, and it's hard to deny the business case when you think about how difficult that period was for consumers, OEMs and dealers.

Right now, Toyota has their foot in their mouth because they delayed all of their BOF redesigns and then waited too long to pick up the torch and recommit. Tacoma is really only a heavy refresh. Tundra gets mild updates over 11 years, Sequoia just for it's first update of any kind in a decade, the Land Cruiser has been nipped and tucked twice, and the 4Runner seems to be selling so well that Toyota is content to let it soldier on as-is. All of these moves wreak of indecision and lack of commitment. Coming out of the financial crisis and thinking about a new world that is leaner and faster to react, Toyota made the conscious effort to de-prioritize BOF and it will be 2020 or so before we have next-gen BOF products that we should have had a decade prior at that point. Similarly, the market for sports cars has dropped significantly so to reduce their investment and risk, Toyota has partnered with BMW and Subaru to develop the Supra and 86... this is the new way of doing things. New Camry is a great car and the new Avalon and Rav4 will be here within 12 months. More horsepower, more performance, more tech across the board.

With everything above, also consider market trends over the last decade:
- Stricter CAFE laws
- Stricter safety standards and an OEM "arms race" over safety tech like Toyota Safety Sense
- Rapid abandonment of SUVs, trucks and sports cars in 2008-2010, then unbelievable resurgence in 2014+, now outpacing passenger cars
- Rise of hybrid technology, only for popularity to wane as gas prices fall
- Battery and plug-in hybrid tech starts as a disruptive technology and then becomes mainstream
- Consumer expectations around infotainment and connected cars
- Toyota moving from Torrance to Dallas which cost them 70% of their North American corporate workforce.

...and all of this happened at a time when leadership was changing, the world was coming out of crisis and the tech boom came to automobiles and massively shifted consumer expectations.

I am not making excuses, but we have to step back and look at the full picture to understand how and why things are like they are. I believe that within the next 5 years, Toyota will have all of their products on TNGA architectures (FWD, RWD, BOF, unibody), everything will have new ICE engines, new hybrid options, advanced infotainment, more safety tech and we know that next gen 4Runner, Tundra, Sequoia and Land Cruiser are all in development. Once Toyota has caught up, I think we will begin to see even more really great products. In the meantime, if you are annoyed that we don't have enough exciting product, Akio is the man you want at the helm - he is the most enthusiast-minded leader the company has ever had. However, he also realizes there were foundational issues that needed to be fixed on a global scale before getting to "nice to have" products and initiatives.

That was probably a lot to digest, but once you take that in, from the Lexus side, there are a few things to consider:

A few years ago in an interview with LXE, Mark Templin flat out said longer term, that they see the LX staying BOF but not the GX. I think this is reflective of the period when Lexus thought they'd kill the GX off because its popularity would wane with consumers and there would be little business case to support it. What happened? GX has really become a core Lexus product, reliably selling 2k units a month for almost 4 years now. People love them. I think the GX's success has little to do with being BOF but is rather tied to being the only reasonably attainable Lexus 3 row vehicle, and also that there is a hole in the lineup around $60k and people want something nicer than an RX. GX is old, underpowered, inefficient and technologically outdated but lets be honest... outside of all the marketing hype, people buy cars based on how they make us feel. GX is very solid, comfortable, luxurious and it drives like a truck, which many people do still like.

I think Lexus could pretty easily turn the GX into a unibody GA-L-based X5 competitor and satisfy most current consumers. It's not hard to make a vehicle "drive like a truck," or a sports car or anything else. I'm confident Lexus could make it unibody and still provide the sense of solidarity and heft that you get behind the wheel of a GX. But we also need to consider RX L and now, a forthcoming, 2 row GA-L based sporty crossover.

There is still a lot of unknown information here. Is RX L just going to be a stopgap until a 3 row GA-L unibody CUV arrives? Or does Lexus see "RX L" as the forward solution for consumers wanting three rows? What will the price point and powertrain options be like for LF-1 once it arrives in production form?

Let's not also forget that the GX and LX both are literally cash cows for ToMoCo. Rebadges of these existing platforms are easy, and when chocked full of leather and wood, then marked up accordingly, the margins are huge.

I do believe that LX will remain BOF and related very closely to the Land Cruiser. From an engineering perspective, Land Cruiser is one of Toyota's most celebrated, cherished and impressive products and as Lexus' flagship SUV, the Land Cruiser only makes sense as the starting place.

I think we will see the future shake out like this:

UX: FWD/AWD, CH-R/TNGA-based small CUV, 2.0L I4, hybrid, one upmarket 4cyl engine option, be it a 2.0T or the A25A-FKS. $30 - 42k

NX: FWD/AWD, Rav4/TNGA-based compact CUV, 2.0T I4 base engine, 2.5L hybrid option, upmarket 2.0T or 2.5T I4 option $36 - 48k

RX/RX L: FWD/AWD, TNGA-K-based midsize CUV, V6, optional V6 hybrid, optional upmarket V6 option (possibly turbo) for F Sport package, optional third row with RX L $45 - 68k

GX: 4x2 or 4x4, TNGA-F body-on-frame 4Runner/Prado-based midsize SUV, base V6, optional turbodiesel, optional V8, think of this as a less expensive take on the Mercedes G Class, 2 rows or 3 rows, Something decidedly off-road oriented with a niche audience $55 - 75k*

LF-1 or "LT": RWD/AWD, GA-L-based performance midsize CUV, two rows, base V6 engine, optional turbocharged V6 engine, F variant with V8, $65 - 80k*

LX: full time 4x4, TNGA-F body-on-frame Land Cruiser-based full size flagship SUV, base turbocharged V6 engine, optional V8 engine, optional executive package that eliminates the third row and provides similar accommodations to LS executive package. $90 - 110k

* Longer term, I think Lexus will spend a few years seeing how RX, RX L, GX and "LT" play together and probably adjust accordingly. GX could go away, or they could morph it into a GA-L-based crossover that truly challenges the X5 and Q7, while also making the "LT" even more coupe-like to create some differentiation. Time will tell.

With the market turning so sharply towards light trucks, I think we will see Lexus hedge their bets and renew GX for at least one more generation. It's too lucrative and they own the market. I do think they'll be watching to see how RX L impacts GX, but I also they they will be curious to see how much more $$ they can make with a third gen GX. Similarly, I think that at least for the next decade, we will see Lexus increase their SUV offerings to catch consumers fleeing from IS, ES, GS, LS and RC into SUVs because if Lexus doesn't offer what they want, these folks will surely go elsewhere.

A lot of people view RX as being a class under the X5 and Q7, and there is a lot of space between RX L at $50k and LX 570 at $90k. They need to find something to fill that hole from a product and prestige perspective. GX has a certain level of charm being V8 and BOF, and a sporty RWD CUV would be great as well and very differentiated. What Lexus is really missing right now is this product segment above RX and below LX, and LF-1 is proof that they're going to fix it. The big question is whether or not they'll keep the GX when they do it.
 
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bogglo

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I am going to share a post I recently wrote on T4R.org because a lot of the info is very similar:




That was probably a lot to digest, but once you take that in, from the Lexus side, there are a few things to consider:

A few years ago in an interview with LXE, Mark Templin flat out said longer term, that they see the LX staying BOF but not the GX. I think this is reflective of the period when Lexus thought they'd kill the GX off because its popularity would wane with consumers and there would be little business case to support it. What happened? GX has really become a core Lexus product, reliably selling 2k units a month for almost 4 years now. People love them. I think the GX's success has little to do with being BOF but is rather tied to being the only reasonably attainable Lexus 3 row vehicle, and also that there is a hole in the lineup around $60k and people want something nicer than an RX. GX is old, underpowered, inefficient and technologically outdated but lets be honest... outside of all the marketing hype, people buy cars based on how they make us feel. GX is very solid, comfortable, luxurious and it drives like a truck, which many people do still like.

I think Lexus could pretty easily turn the GX into a unibody GA-L-based X5 competitor and satisfy most current consumers. It's not hard to make a vehicle "drive like a truck," or a sports car or anything else. I'm confident Lexus could make it unibody and still provide the sense of solidarity and heft that you get behind the wheel of a GX. But we also need to consider RX L and now, a forthcoming, 2 row GA-L based sporty crossover.

There is still a lot of unknown information here. Is RX L just going to be a stopgap until a 3 row GA-L unibody CUV arrives? Or does Lexus see "RX L" as the forward solution for consumers wanting three rows? What will the price point and powertrain options be like for LF-1 once it arrives in production form?

Let's not also forget that the GX and LX both are literally cash cows for ToMoCo. Rebadges of these existing platforms are easy, and when chocked full of leather and wood, then marked up accordingly, the margins are huge.

I do believe that LX will remain BOF and related very closely to the Land Cruiser. From an engineering perspective, Land Cruiser is one of Toyota's most celebrated, cherished and impressive products and as Lexus' flagship SUV, the Land Cruiser only makes sense as the starting place.

I think we will see the future shake out like this:

UX: FWD/AWD, CH-R/TNGA-based small CUV, 2.0L I4, hybrid, one upmarket 4cyl engine option, be it a 2.0T or the A25A-FKS. $30 - 42k

NX: FWD/AWD, Rav4/TNGA-based compact CUV, 2.0T I4 base engine, 2.5L hybrid option, upmarket 2.0T or 2.5T I4 option $36 - 48k

RX/RX L: FWD/AWD, TNGA-K-based midsize CUV, V6, optional V6 hybrid, optional upmarket V6 option (possibly turbo) for F Sport package, optional third row with RX L $45 - 68k

GX: 4x2 or 4x4, TNGA-F body-on-frame 4Runner/Prado-based midsize SUV, base V6, optional turbodiesel, optional V8, think of this as a less expensive take on the Mercedes G Class, 2 rows or 3 rows, Something decidedly off-road oriented with a niche audience $55 - 75k*

LF-1 or "LT": RWD/AWD, GA-L-based performance midsize CUV, two rows, base V6 engine, optional turbocharged V6 engine, F variant with V8, $65 - 80k*

LX: full time 4x4, TNGA-F body-on-frame Land Cruiser-based full size flagship SUV, base turbocharged V6 engine, optional V8 engine, optional executive package that eliminates the third row and provides similar accommodations to LS executive package. $90 - 110k

* Longer term, I think Lexus will spend a few years seeing how RX, RX L, GX and "LT" play together and probably adjust accordingly. GX could go away, or they could morph it into a GA-L-based crossover that truly challenges the X5 and Q7, while also making the "LT" even more coupe-like to create some differentiation. Time will tell.

With the market turning so sharply towards light trucks, I think we will see Lexus hedge their bets and renew GX for at least one more generation. It's too lucrative and they own the market. I do think they'll be watching to see how RX L impacts GX, but I also they they will be curious to see how much more $$ they can make with a third gen GX. Similarly, I think that at least for the next decade, we will see Lexus increase their SUV offerings to catch consumers fleeing from IS, ES, GS, LS and RC into SUVs because if Lexus doesn't offer what they want, these folks will surely go elsewhere.

A lot of people view RX as being a class under the X5 and Q7, and there is a lot of space between RX L at $50k and LX 570 at $90k. They need to find something to fill that hole from a product and prestige perspective. GX has a certain level of charm being V8 and BOF, and a sporty RWD CUV would be great as well and very differentiated. What Lexus is really missing right now is this product segment above RX and below LX, and LF-1 is proof that they're going to fix it. The big question is whether or not they'll keep the GX when they do it.
That was a long one, but I agree with you. Especially with the new 2 row LX they are about to start offering. what I imagine in the future for the LX is
2 row LX (Base LX)
3 row LX
2 row LX (Executive LX. Autobiography competitor).
 

Brooks2IS

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Perhaps our purchase of 3 BOF Toyota's will keep them alive? We also have have a 4Runner and 2010 Tundra...
 

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spwolf

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In many important markets for Toyota such as Southeast Asia, Africa, South America and Arab countries, BOF vehicles are important sellers for Toyota and their best profit drivers.

People need to keep in mind that for instance Toyota small car division worldwide that makes such big sellers as Corolla and Yaris, is NOT profitable (last few months ago, Toyota executive mentioned this in interview, Toyota separated divisions for this purpose too). Profits come from larger, more expensive vehicles, including BOF vehicles. And Toyota is most profitable manufacturer in the world, so you can imagine how profitable those vehicles are.

So in short, they are not going anywhere at all. While being all that and selling well over 1M vehicles per year, it is profitable for Toyota to sell them at lesser quantities in Europe and NA. I dont see why would anyone want them not to be sold there, why not have choice?
 

ssun30

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In many important markets for Toyota such as Southeast Asia, Africa, South America and Arab countries, BOF vehicles are important sellers for Toyota and their best profit drivers.

People need to keep in mind that for instance Toyota small car division worldwide that makes such big sellers as Corolla and Yaris, is NOT profitable (last few months ago, Toyota executive mentioned this in interview, Toyota separated divisions for this purpose too). Profits come from larger, more expensive vehicles, including BOF vehicles. And Toyota is most profitable manufacturer in the world, so you can imagine how profitable those vehicles are.

So in short, they are not going anywhere at all. While being all that and selling well over 1M vehicles per year, it is profitable for Toyota to sell them at lesser quantities in Europe and NA. I dont see why would anyone want them not to be sold there, why not have choice?
I'm not implying any changes to Toyota's own utility vehicle line. The Hilux and LC family are their bread and butter in many countries. The question is about whether BOF for premium market makes sense. Engineering a vehicle is not free, especially for a market it is not intended to go into.

A BOF LX makes obvious sense if the formula of the next Land Cruiser doesn't change from LC100/200, i.e. the no-compromise crown jewel of TMC.
 

maiaramdan

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UX: FWD/AWD, CH-R/TNGA-based small CUV, 2.0L I4, hybrid, one upmarket 4cyl engine option, be it a 2.0T or the A25A-FKS. $30 - 42k

NX: FWD/AWD, Rav4/TNGA-based compact CUV, 2.0T I4 base engine, 2.5L hybrid option, upmarket 2.0T or 2.5T I4 option $36 - 48k

RX/RX L: FWD/AWD, TNGA-K-based midsize CUV, V6, optional V6 hybrid, optional upmarket V6 option (possibly turbo) for F Sport package, optional third row with RX L $45 - 68k

GX: 4x2 or 4x4, TNGA-F body-on-frame 4Runner/Prado-based midsize SUV, base V6, optional turbodiesel, optional V8, think of this as a less expensive take on the Mercedes G Class, 2 rows or 3 rows, Something decidedly off-road oriented with a niche audience $55 - 75k*

LF-1 or "LT": RWD/AWD, GA-L-based performance midsize CUV, two rows, base V6 engine, optional turbocharged V6 engine, F variant with V8, $65 - 80k*

LX: full time 4x4, TNGA-F body-on-frame Land Cruiser-based full size flagship SUV, base turbocharged V6 engine, optional V8 engine, optional executive package that eliminates the third row and provides similar accommodations to LS executive package. $90 - 110k
I agree with you on the UX, NX & RX
Regarding the GX & LX they must have the winning formula
I imagined the GX as Urus , Q8 , GLEcoupe & X6 competitor where the LX as Bentayga, Vogue, G, GL, X7 & etc. competitor
As both will be based on the LC/LS new chassis and take the engines also from

Then leave the BOF vehicles be to Toyota or maybe even turn LandCruiser name to a brand instead a model and put all the BOF under it.
 

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If anyone needed more confirmation that TNGA-F is happening:


Toyota earmarks $391 million for next era of Texas pickup production



Toyota is pushing ahead with its plan to boost efficiencies in the production of its midsize Tacoma and full-size Tundra pickups, which are moving onto a common platform, with a $391 million investment in its pickup plant near San Antonio.

The Japanese automaker said Tuesday it will "introduce advanced manufacturing technologies" to its production line before moving the two pickups onto a new platform, internally called F1, over the next four years.


Automotive News first reported in April that Toyota's next-generation Tundra and Tacoma would share the platform, which the automaker plans to spread to all of its pickups globally.

In July, Bexar County commissioners approved a request from the automaker for a 10-year, 80 percent tax abatement for the proposed investment in the 16-year-old Toyota Motor Manufacturing Texas body-on-frame plant.

No additional jobs at the plant are anticipated, a spokesman for Toyota Motor North America said. The investment would boost the plant's capabilities through the installation of additional robotics and other technologies. However, Toyota Group transmission supplier Aisin AW Co., which supplies the plant, in July announced a $400 million investment to bring 900 jobs to a new plant nearby in Cibolo, Texas.

Current-generation Tundras and Tacomas are built in sequence on a shared assembly line in San Antonio, while the Tacoma is also assembled at a pair of plants in Mexico. Although the two pickups share the assembly line at Toyota Motor Manufacturing Texas, they are built on different platforms, increasing complexity far beyond that of the 37 cab and powertrain variations of the two pickups.

Toyota's investment also includes a $500,000 donation from Toyota Motor Manufacturing Texas to Alamo Promise, a local agency dedicated to addressing poverty, enhancing economic and social mobility and meeting work force demands locally. The donation will take place over five years.

Including the most recent investment, Toyota Motor North America says it has invested over $3 billion into its San Antonio truck plant.
Development of the shared-platform pickups is near completion and is expected to be introduced beginning in 2021 with the 2022 Tundra. The Tacoma is expected to move onto the F1 platform in 2023 for the 2024 model year. Details of what the shared platform will mean, in terms of design or potential features, remain unknown, although top Toyota executives have pledged to introduce fuel-saving hybrid technology into all Toyota models, including pickups.

Toyota's pickup lineup is the industry's oldest. The current-generation Tundra dates to 2007, with major updates last introduced in the 2014 model year, while the third-generation Tacoma dates from 2015, with a freshened 2020 model introduced in February at the Chicago Auto Show.
Through August, U.S. sales of the Tundra are up 2.2 percent from a year earlier to 78,012, while Tacoma sales have risen 4.7 percent to 169,292.
 
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