Lexus and the 2017-2020 Bank of America Merrill Lynch Car Wars report

Discussion in 'Lexus Lounge' started by Joaquin Ruhi, May 30, 2016.

  1. Joaquin Ruhi
    Joaquin Ruhi Staff Member Moderator
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    Every year since 1991, Bank of America's Merrill Lynch corporate and investment banking division puts together their Car Wars study that assesses the relative strength of each automaker’s product pipeline in the US. Most commentary articles out there tend to fixate on the study's broad conclusions that X, Y or Z carmaker should see its market share grow, decline or remain flat depending on the strength or weakness of its new model or new generation of existing model launch pipeline 4 years out.

    "Buried" in the study itself, and generally given scant attention in the motoring press (Jalopnik being a notable exception) is an actual list of those expected new launches. In other words, the 2016 study revealed in late April includes predictions (based on numerous primary and secondary sources, including industry contacts, auto show visits, trade publications, enthusiast magazines, supply chain relationships, general knowledge of platform strategies, and product cycle planning) of what major volume car brands will launch between the 2017 and 2020 model years.

    Those conclusions, however, are hardly infallible, and going back a year or two, you see how often they are tweaked to account for earlier inaccuracies.

    At this point, I'll go off on a different tangent and offer a shoutout and tip of the hat to Lexus Enthusiast forums member Carmaker1 for his many valuable and informative insights into the future Lexus pipeline. Throw them together with my own thoughts and opinions and those of the BOA/ML Car Wars folks and the end result is this Kaizen Factor article:

    http://kaizen-factor.com/lexus-2017-2020-bank-america-merrill-lynch-car-wars-report/
     
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  2. GSCT
    GSCT Founding Member
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    Not much action on this post and it's a shame. Very interesting and informative....
     
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  3. Joaquin Ruhi
    Joaquin Ruhi Staff Member Moderator
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    Thanks! :grinning:

    Perhaps the article suffers from its very heft and weight, plus my tendencies to be excessively long-winded and detailed. The tl;dr (too long;didn't read) syndrome, in other words.

    If that wasn't bad enough, though, I just finished posting the companion Toyota piece that is over 1100 words longer than the Lexus one!
    http://kaizen-factor.com/toyota-2017-2020-bank-america-merrill-lynch-car-wars-report/

    I'm incorrigible, I guess...
     
  4. Gecko
    Gecko Staff Member Administrator
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    Joaquin, thanks for posting! I read bits and pieces of the study across several different forums, but think it's great for us to discuss here.

    I think 90% of the BOA/Merrill Lynch piece with relation to Toyota and Lexus is pretty accurate, but I think a lot of it assumes the traditional Toyota/Lexus 5-6 year product cycle. If anything, ToMoCo has been acting a bit out of character lately...
    • Tundra - Now essentially 10 years old, one substantial refresh
    • Sequoia - 10 years old with no changes
    • 4Runner - Now 7 years old, Toyota has announced that it won't have the latest safety tech before Jan 1, 2018
    • Camry - substantial refresh 3 years in, redesign in 2018
    • LS - 10 years old
    • GX - also 7 years old, Lexus has announced that it won't have the latest safety/tech suite before Jan 1, 2018
    • CT - 6 years old, rumor is that a redesign could be another 1-2 years off
    The move to TNGA and GA-L has thrown a wrench in what we know as "traditional," and I think Toyota's move to Texas has strained the company as well. I also think we are going to see an accelerated rate of redesigns concentrated in the next 3 years to get all models onto these new platforms, which is evident in how Toyota is restructuring NA manufacturing operations.

    Adding in production year vs. model year distinction, my opinion is:

    Year 2017, MY 2018
    Redesigns:
    Toyota C-HR
    Lexus LC
    Lexus LS
    Toyota Camry
    Toyota Tundra

    Refreshes:
    Lexus RC (RC-C)
    Lexus NX

    Year 2018, MY 2019
    Redesigns:
    Toyota 4Runner
    Lexus GX
    Lexus GS
    Toyota Avalon
    Toyota Rav4
    Lexus UX
    Toyota Land Cruiser
    Lexus LX
    Lexus CT
    Toyota Corolla
    Lexus ES

    Refreshes:
    Lexus RX
    Toyota Prius

    Year 2019, MY 2020
    Lexus IS
    Toyota Highlander
    Toyota Sienna
    Toyota Yaris
    Lexus NX
    Toyota 86

    Refreshes:
    Toyota Tacoma

    Year 2020, MY 2021
    Lexus RC

    Refreshes:
    Toyota C-HR
    Lexus LC
    Lexus LS
    Toyota Camry
    Toyota Tundra
    Lexus ES

    Toyota/Lexus is going to be very heavy with SUV/Crossover redesigns between 2018 and 2020 when you consider Rav4, NX, Highlander, Land Cruiser, LX, GX, 4Runner and UX.

    It would have been much smarter for there to be a 2016/2017MY redesign for 4Runner/GX, leaving breathing room for Rav4 in late 2017 as a 2018 MY, and maybe Highlander in 2018 as 2019 MY, then followed by LC/LX for 2019 MY as well.

    Going to be interesting...
     
    Last edited: Jun 6, 2016
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  5. Joaquin Ruhi
    Joaquin Ruhi Staff Member Moderator
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    Thanks for your awesome, highly detailed and informative post. I'd double or triple-like it if I could!

    One thing you wisely pointed out that I totally overlooked is the Toyota USA news release on the Lexus Safety System + and Toyota Safety Sense packages ( http://toyotanews.pressroom.toyota.com/releases/lexus+toyota+automated+braking+standard+2017.htm ). It explains that four Lexus and Toyota models will not receive this suite of safety features before 1 January 2018 are Lexus GX, Toyota Mirai, 4Runner, and 86 (jointly developed with Subaru), and Scion iA (developed by Mazda). This critical fact means that new-generation versions of those vehicles will not be on sale by that date. This is irrelevant in the case of the limited production, science experiment and California compliance Mirai, but means that the traditional late fall 2017/MY 2018 I suggested for 4Runner won't be happening. BOA/ML Car Wars did predict a 2019 MY launch for its Lexus GX sibling. Technically, though, we could be looking at a January or February 2018 on-sale date for both 4Runner and GX with their respective new Safety Systems. A January 2018 on-sale date (if that is, indeed, the case) could swing either way as far as the model year denomination. At launch, the Lexus CT had a matching 2011 on-sale/2011 MY denomination, while the current GS had a February 2012 on-sale/2013 MY launch. I don't think anyone expects a 2nd-gen Toyota 86 earlier than Year 2018/MY 2019, so that one makes sense.

    Your calendar year/model year predictions are fascinating, and beg a few questions and comments:

    - Do you see a somewhat separate launch schedule for Lexus ES and Toyota Avalon? You show ES leapfrogging ahead of Avalon by a year, whereas consensus between the Bank of America Merrill Lynch Car Wars analysts, Automotive News' David Undercoffler and Carmaker1's predictions on this forum suggest that both will continue marching in lockstep as they did for the current generation.

    - You make no mention of the Toyota Sequoia. Do you think it'll see a 3rd generation?

    - After already being pushed back 2 model years (from 2017 to 2019) by the Car Wars folks, your predictions push the 4th-gen Sienna back yet another year, to Year 2019/MY 2020, alongside the intro of the 4th-gen Highlander. With the current Sienna being 3 years older than Highlander, doesn't a Year 2018/MY 2019 launch for Sienna (a year ahead of the next Highlander) make more sense?

    - Do you disagree with the 2016 Car Wars prediction pushing the 5th-gen Lexus GS back from Year 2018/MY 2019 to Year 2019/MY 2020?

    - Similarly, the 2016 Car Wars pushed back the 12th-gen Toyota Corolla from Year 2018/MY 2019 to Year 2019/MY 2020. Your predictions stick to the earlier timetable. Do you think they're wrong?

    - Perhaps the one I find most eyebrow-raising is your prediction that we won't see a new Toyota Yaris until Year 2019/MY 2020. Even the 2016 Car Wars prediction of Year 2018/MY 2019 seems distant to me given how poorly the current Yaris seems to be aging. And do you have any thoughts or info on whether the next North America market Yaris hatchback will be the next-gen Euro Yaris/Japan Vitz or a Mazda2 clone?

    My apologies if some of these questions and comments could be construed as off-topic Toyota threadjacking. Moderators, feel free to move some of this to a separate The Garage forum thread if need be.
     
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  6. Gecko
    Gecko Staff Member Administrator
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    And same to yours! I love discussing this stuff!

    Admittedly, I am not as savvy with production years and model years as someone like Carmaker1, but my sense is that the Camry, ES and Avalon will probably debut somewhere within 18-20 months of each other. Right now, Camry and Avalon started their current life cycles as 2012 model year vehicles, but with the Camry receiving the "2014.5" refresh, and Avalon getting a 2015 refresh, I think Toyota could see it fit to space the Avalon's redesign out just a bit further. ES will probably stay a year after - you are right. From what I understand about 2017, ALL focus is on the Camry... no mention of Avalon so far.

    I could see the Camry in late summer, early fall of 2017 as a 2018 model, followed by the Avalon in November/December as a 2018 or 2019, and then a 2019 ES in August/September of 2018. The problem there is where to introduce the GS between the LS and ES? Lexus has, once again, stacked all of their sedan redesigns too close together.

    I really don't know, and from what I am hearing, Toyota doesn't either. ToMoCo's view is that BOF SUVs are nearly dead (not worth significant investment beyond Land Cruiser 200, Prado and Hilux platforms) and the Highlander and Land Cruiser can split the remaining customers who might have shopped for a Sequoia. TMS USA is saying, "long live the Tundra, 4Runner, Sequoia, Land Cruiser and Tacoma!" They want BOF to stay. It's an open rift between the two divisions.

    There were rumors a few years ago that Toyota was going to drop the Sequoia and introduce lower priced trims of the Land Cruiser - like SR5 - to try to appeal to some disenfranchised Sequoia shoppers. I know that this idea was floated with dealers who shot it down. Dealers are militant about wanting another Sequoia.

    Allegedly a new Tundra is finally coming, and to my knowledge, after that has been engineered, creating a Sequoia isn't much additional work or investment. My sense is that if gas prices remain lower and consumers keep buying SUVs like they are now, we will indeed see a new Sequoia. If gas prices go back up and SUV sales cool off, I think we won't.

    From what I have heard, Toyota feels that they have the minivan market pretty well covered and they are not in a rush to redesign the Sienna despite it's age. I think it could receive another small refresh (it's getting the Highlander's new 2GR-FKS and 8AT), but a 2020 MY redesign is consistent with what I've heard. Bumping up to 2019 could also happen - I am not 100% sure here.

    Yes. 4GS was introduced in early 2012 for 2013 MY and by 2018, would be 6 years old. The recent GS 300 trademark makes me think that Lexus is already hard at work on the 5GS, and after LS, it's the next product to move to GA-L. Also, if the rumors are true that the LS could be elevated in size, price and status, Lexus is going to need a strong(er) product under it and that is GS. 2020 GS would be a 7 year run for the 4GS and I think we are finally about to see ToMoCo move away from these long model cycles, back to 5-6 years. I think LC in early-2017, LS in mid-2017, GS in early-2018 and ES in mid- to late-2018.

    I think Toyota is making power plays for volume with Camry, Rav4 and Corolla and I think they are aiming to keep those products as fresh as possible. With that in mind, my personal opinion is that we will see a new Corolla in 2018 for 2019 MY. Refresh for 2017, and Toyota generally will redesign 2 years after a refresh.

    Admittedly, I do not follow the Yaris much at all and am very out of touch with this model. Seems to me that with a 2013 redesign and 2016 refresh, it should be redesigned again in 2017 as a 2018 model... but that could be stretched out a year if resources are constrained and smaller cars are still selling poorly vs. SUVs. Toyota could want to prioritize C-HR/UX and delay Yaris a year. Not sure, really.

    Your comments are great! Good follow up points!
     
    Last edited: Jun 7, 2016
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  7. Joaquin Ruhi
    Joaquin Ruhi Staff Member Moderator
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    Indeed, Lexus has historically had product cadence issues with its sedan lines, bunching the new-generation intros too close together then spending years without anything new on that front. If past history has shown us something, though, it's that while they have been more than willing to tamper with the lifecycles of their RWD lines (prolonging 2IS with a second mid-life refresh, skipping model years on GS, keeping 4LS around for a decade), the ES cycle (5 and, later, 6 years with a single mid-cycle refresh) is inviolable and sacrosanct. 6ES and 4th-gen Avalon were unveiled a day apart at the 2012 New York Auto Show (I know, I was there). Since then, the two have marched in lockstep, and most pundits believe this will continue, even though the previous (3rd-gen) Avalon was a pioneer of the 2-midlife-refreshes model and lasted for 8 model years in all.

    I believe that Carmaker1 shares your skepticism that 5GS will be pushed back from 2019 to 2020MY. Nonetheless, my Lexus BOA/ML Car Wars commentary piece has enough in there to allow me to guesstimate this timeline for the next Lexus sedan launches:

    January 2017
    5LS (LS 500 gas engine) is unveiled at Detroit Auto Show

    Early March 2017

    5LSh (LS 500h hybrid) is unveiled at Geneva Motor Show

    Late summer/early autumn 2017
    5LS goes on sale (2018MY)

    Late March 2018
    7ES (ES 350 and ES 300h) (and Avalon5) are unveiled at the New York Auto Show

    April 2018
    7ES (ES 200, ES 200t and ES 250) are unveiled at the Beijing Auto Show

    Late summer/early autumn 2018
    7ES (and Avalon5) go on sale (2019MY)

    2nd half of 2018
    5GS is publicly unveiled. Possibilities are Pebble Beach Concours d'Elegance (August), Paris Motor Show (October), Los Angeles Auto Show (November) and China’s Auto Guangzhou (December). Given the breadth of the GS engine lineup (plus regular, F Sport and F variants), different locales could debut different models.

    January/February 2019
    5GS goes on sale (MY2020)

    1st trimester of 2019
    4IS is publicly unveiled. Possibilities are Detroit (January), Geneva (early March), New York (late March/early April) and Shanghai (April). Given the breadth of the IS engine lineup (plus regular, F Sport and F variants), different locales could debut different models.

    Late summer/early autumn 2019
    4IS goes on sale (MY2020)
     
    Last edited: Jun 7, 2016
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  8. Joaquin Ruhi
    Joaquin Ruhi Staff Member Moderator
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    I agree. Thanks for the additional insights.

    2017 will see Sienna go up against all-new Chrysler Pacifica and 5th-gen Honda Odyssey with a 2nd refresh on the current model. Sure, the 2GR-FKS / 8AT upgrade will help, but it may lose its AWD exclusivity if Honda indeed adds that option to the new Odyssey. And what about the Pacifica Plug-in Hybrid? Toyota would be foolish to wait too long to release the 4th-gen Sienna, unless part of the plan is to follow the latest RAV4 playbook and add a Sienna Hybrid as part of the second refresh (which I highly doubt).

    Good point, unless Corolla follows recent practices on some if not most models that sees 3 years after a refresh. The latest Car Wars report did deliberately bump the 12th-gen Corolla back from 2019 to 2020MY.

    Yaris is a particularly tricky one to predict. It's a marginal seller here in the U.S. (though I've heard it has a good following in Quebec, Canada given its French assembly). But Toyota needs it not only to continue its status as a full-line brand but to help with CAFE numbers. To me, switching from Euro Yaris/Vitz to Mazda2 as a North America Yaris is a no-brainer. With Mazda2 assembly in NAFTA Mexico, it's much more profitable to use it as a Yaris basis than to continue importing the original from France with its higher labor costs. When will this happen? Kinda hard to tell, since it would be a matter of aligning the changeover in France (and Japan?) from 3rd-gen to 4th-gen Yaris and the mid-life refresh of the current Mazda2 (probably due for the 2018MY).
     
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  9. meth.ix
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    So the 5LS will follow to LC in when talking about dates.
     
  10. Joaquin Ruhi
    Joaquin Ruhi Staff Member Moderator
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    Absolutely! LC was unveiled earlier this year and will so on sale in the 1st quarter of 2017, whereas 5LS hasn't even been revealed yet, except as a concept (LF-FC) and as a heavily-camoed test mule.
     
  11. James
    James Founding Member
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    How much longer again do we have to wait for the unveil of LS?
     
  12. Joaquin Ruhi
    Joaquin Ruhi Staff Member Moderator
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    If the rumored January 2017 unveiling at the Detroit Auto Show is correct, just under 7 months.