Toyota takes 'hard look' at trimming U.S. lineup as profits rise (86 cancelled?)

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http://www.autonews.com/article/201...d-look-at-trimming-u-s-lineup-as-profits-rise
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 outlook

Citing 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.
 

Gecko

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For the US market, it seems to me that the most logical cuts would be Yaris line (-38%), Prius C and 86 (-40%).

Obviously GS is going, but I assume RC may follow suit looking at recent sales numbers.
 

Gecko

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Isn't there some cost savings on 86 because it's a Subaru co-production? That might make it more cut-resistant than it otherwise would be.

Word on the street is we're getting a version of the Supra with a 2.0T I4 at a lower price point, so that will probably replace it all together.
 

Ian Schmidt

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That would be kinda too bad, the 86 isn't really the same kind of thing as the Supra.
 

spwolf

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For the US market, it seems to me that the most logical cuts would be Yaris line (-38%), Prius C and 86 (-40%).

Obviously GS is going, but I assume RC may follow suit looking at recent sales numbers.

Yaris Hatch, not Sedan... and Prius C sure... 86 they already said they are making a new one.

RC will likely be morphed into IS Coupe....
 

mmcartalk

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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.

My own personal opinion is that the best American-market Toyota to trim would be the Yaris. It is too much of a toy for most American tastes, and, probably for the same price, a de-contented Corolla, with little or no frills, could be offered. The Corolla, especially in hatchback form, has more space inside, is more comfortable, rides better, and, IMO, is simply more pleasant to drive.
 
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mmcartalk

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I also think we need to clarify this thread if we are talking about the American-market Toyota lineup, the Lexus line-up, or both.
 

spwolf

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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.

My own personal opinion is that the best American-market Toyota to trim would be the Yaris. It is probably too much of a toy for most American tastes, and, probably for the same price, a de-contented Corolla, with little or no frills, could be offered. The Corolla, especially in hatchback form, has more space inside, is more comfortable, rides better, and, IMO, is simply more pleasant to drive.

They cut Prius v this year, they will cut Yaris Hatch, NOT sedan, they just signed contract with Mazda about it.

But yes, main point is to free up space... there is another SUV coming, and who knows what else.

In Europe, they have cut Avensis and Corolla Verso (MPV), but they are bringing Camry and new small Yaris based CUV next year... so in the end, nothing is "trimmed".
 

mikeavelli

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2nd gen FR-R is still a go.... things are so unpredictable with gas prices, if they cut them now they could be caught flat footed if something changes. \

I've just seen more consolidation with USA/Euro offerings..
 

Gecko

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Toyota won’t make a lIftback version of Yaris for 2019

Toyota has opted to not make a 2019 version of its slow-selling Yaris Liftback in the U.S., appearing to end the run of what had been the brand's most affordable car. CarsDirect first reported the news

Whether you call it "discontinuing" the model depends on who's talking. "It's not that we're discontinuing the Liftback for 2019," spokeswoman Nancy Hubbell told Autoblog, but she said that for now Toyota will simply focus on selling remaining 2018s. She also confirmed CarsDirect's report that Toyota will have an announcement about a 2020 Yaris in April at the New York Auto Show.

The Yaris three- and five-door hatchbacks date back to 2007 and are different vehicles than the Yaris sedan, which traces its lineage to the Scion iA sedan and only dropped the iA moniker for 2019. Despite stuffing it with standard safety features like lane departure warning, automatic high beams and automatic emergency braking, the Liftback's base trim starting price is just $16,565 including destination.

But the diminutive hatchback has found itself out of favor amid a buying public looking for larger utility vehicles and high riders. Toyota sold just 1,940 Liftback Yaris models in 2018, down 77.6 percent. Overall Yaris sales were 27,209, a drop of 38.7 percent from 2017.

CarsDirect reports that Toyota had already issued order guides for a 2019 Yaris Liftback before deciding against it, and that 2018 inventory is largely sold out. As Hubbell says, "Stay tuned for New York."

Source: https://www.autoblog.com/2019/01/24/toyota-yaris-liftback-discontinued/
 

spwolf

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it was rumored that all new hatch is coming late 2019 to Europe, where it is Toyota bestseller with over 200k sold per year.

this NY announcement could also be about Yaris based SUV, which is confirmed kind of through Toyota investment in France to build another model next to new Yaris.
 

Gecko

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it was rumored that all new hatch is coming late 2019 to Europe, where it is Toyota bestseller with over 200k sold per year.

this NY announcement could also be about Yaris based SUV, which is confirmed kind of through Toyota investment in France to build another model next to new Yaris.

How much would a Yaris CUV differ from CH-R? In my mind they seem similar, but maybe Yaris-based CUV would be cheaper?
 

spwolf

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How much would a Yaris CUV differ from CH-R? In my mind they seem similar, but maybe Yaris-based CUV would be cheaper?

C-HR is Corolla sized, so Yaris would be substantially smaller and cheaper due to cheaper platform bits.
Consider that C-HR is 4.36m on wheelbase similar to old Rav4 and larger than Corolla Hatch. Yaris is 3.85m large so it is difference between B class and C class vehicle. I assume Yaris and Yaris CUV will grow to around 4m that is standard in the class.

I know for NA it all looks the same, but it is a difference as Corolla vs Camry.

Best example is likely Renault Captur:
https://en.wikipedia.org/wiki/Renault_Captur

Without checking, it is best selling B class CUV in Europe and there is little chance that anyone would replace it with C-HR.... but what am I talking about, you guys get Kona, and it is Kona class vehicle.
 

ssun30

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And there is also the VW T-Cross based on the Polo, which many in China expect to be a big hit and save VW from its recent slump in market share.

A Yaris CUV will probably be close to the XP150 Yaris at slightly over 4.1m long. That's also close to the size of its competitors.

Then there's the FT-4X at 4.3m long. It's crazy to think they could have three crossovers in the subcompact class but these days one can never have too many crossovers in the lineup.

None of these are interesting to me though. I've always hoped they could build a Jimny competitor based on the Daihatsu Terios (which is BOF and longitudinal RWD) instead of another generic FWD crossover with less ground clearance than a sedan.
 

spwolf

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And there is also the VW T-Cross based on the Polo, which many in China expect to be a big hit and save VW from its recent slump in market share.

A Yaris CUV will probably be close to the XP150 Yaris at slightly over 4.1m long. That's also close to the size of its competitors.

Then there's the FT-4X at 4.3m long. It's crazy to think they could have three crossovers in the subcompact class but these days one can never have too many crossovers in the lineup.

None of these are interesting to me though. I've always hoped they could build a Jimny competitor based on the Daihatsu Terios (which is BOF and longitudinal RWD) instead of another generic FWD crossover with less ground clearance than a sedan.

New EU Yaris should also grow a bit, hopefully. It seems like that Yaris CUV should be released in Geneva then.

If they can make it interesting like C-HR, they will certainly have a hit on their hand. So lets hope they give that job to the whoever created the C-HR, and not usual boring by the numbers Toyota people.
 

ssun30

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New EU Yaris should also grow a bit, hopefully. It seems like that Yaris CUV should be released in Geneva then.

If they can make it interesting like C-HR, they will certainly have a hit on their hand. So lets hope they give that job to the whoever created the C-HR, and not usual boring by the numbers Toyota people.

The Yaris CUV could be a hit in China as well, will put huge pressure on the XR-V that doesn't really compete with the C-HR.

Although this is doubtful since FAW and GAC's resources are spread very thin as is. They may decide it's not worth it to divert effort onto such a cheap model considering Toyota China is chasing margins instead of outright volume.
 

Gecko

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Toyota 86 and Subaru BRZ successor canceled?

Four-cylinder Supra and electric MR2 could take its place at Toyota

Rumors indicate that the Toyota 86 is done for. Japanese Nostalgic Car is quoting Japanese sources as saying Toyota and Subaru have parted ways regarding the 86 and that the current car's replacement is off the table. According to JNC, the Japanese magazine Best Car is readying a report that the 86/BRZ successor has been canceled. JNC also considers the fact that in Japan, there will be a four-cylinder, 197-horsepower version of the new Supra, ready to continue where the 86 will leave the market.

Back in 2016 the automaker seemingly confirmed that a replacement for the rear-drive car was under development, but plans can change and with a cheaper Supra version for sale in markets outside the U.S., we have to wonder if the 86 replacement has been shelved. The 86, while balanced, has only received mild enhancements and not a lot of extra power during its near-decade long time on the market, and it isn't such a strong seller that it would necessarily merit the effort of Toyota developing a successor on its own, particularly without the help of a partner like Subaru or BMW.

At the same time, Autocar quotes Toyota boss Akio Toyoda on the Supra: "At the end of the day, is there anything better than a tight rear-wheel-drive sports car? I hope this won't be the last Toyota sports car you see from us in the future." While that is far from a solid statement of Toyota's future intent, it paves the way to offerings below the Supra, and shows how much the company boss cares about driver involvement. There is a distinct possibility that the company will re-introduce the MR2 as an electrified, rear-drive sports car – which could still be a joint venture with Subaru, as Japanese Nostalgic Car theorizes. Whatever's in the pipeline – and we hope there is something in the pipeline – it seems Toyota's heart is in the right place: driving the rear wheels.

https://www.autoblog.com/2019/01/29/toyota-86-and-subaru-brz-successor-canceled/