Is Legacy Auto Maker Toyota Days as Number 1 Numbered?

[G. David Felt]

In 2007 the auto media was projecting that GM might fall from being the worlds largest auto company in production terms. In 2009, the final numbers proved that Toyota Motor Corporation had surpassed GM as the worlds largest auto company by production numbers. Also Toyota was growing in sales of their Hybrid line under the Prius moniker.

Fast forward to 2021, battery electric auto's are all the rage by auto companies. Toyota production of auto's in Japan has 50% of them exported to other countries such as the Prius Hybrid and TRD Trucks. The CEO of Toyota has stated that the country is a "export-reliant country" and by shifting Japan as well as other countries shifting to BEVs and requiring production to be local, jobs will be lost. Toyota says up to 5.5 million jobs will be lost by going to BEV's versus keeping Hybrids going and moving to Hydrogen which will achieve the reduction in green house gas but also keep people working.

The largest part of this argument is that Toyota shifted heavy resources to Hydrogen as the future of the auto industry and trucking industry while companies like GM supported Hydrogen research but also was still looking at electric auto's. This does make one think that Toyota also thought Tesla might just be an anomaly that would go away and yet did not have a full embrace by Tech workers all over the world and Europe. China then also choose to go with electric over hydrogen auto's and this found Toyota to be behind everyone else that had chosen to follow China with focusing on electric auto's.

Rivian has also done what no one else had done before and that was to focus on electric auto's as Life Style vehicles.

With this, it should come as no surprise that folks that have been turned off by Tesla have gravitated to Rivian for those wanting an electric vehicle. In the latest Rivian is no Tesla story on CNN Business, it is an interesting observation that many of the reservation holders have stated that they are waiting to replace their 4 Runner or Prius with a Rivian R1T or R1S auto. The down to earth approach of the CEO RJ, life style focus and environmental messages that feel sincere is what has driven people to pre-order the Rivian auto's. With production now in full swing, one has to wonder what Toyota will do as they loose customers to Rivian.

As per multiple news stories about Rivian lately, it seems many Toyota Customers are waiting to get a new Rivian. This has shown in Fords Conquest sales of the Mach-E at a 70% conquest rate for people switching from other brands to the Mach-e. Ford has also taken a page from Rivian's marketing in pushing the Mach-E as a life style BEV for Tailgating and on the road Parties.

Ford has just recently announced the Ford F-150 Lightning electric truck lineup which has already sold out the first year production as they offer both commercial and retail versions of the truck.

As the official largest truck seller for decades in the US, this will make it even harder for Toyota as Ford also enters the electric truck market at a much lower price over the luxury truck from Rivian.

Even with the latest update of the Toyota Tundra:

Toyota faces a monumental challenge in just getting to be competitive with the American truck builders due to the extensive assortment of cabs and beds that are offered along with power trains and now electric as you also have GM entering the Life Style electric auto market with their Hummer by GMC twins of a truck and SUV. As GMC has marketed the worlds first SuperTrucks! 1,000 HP with WATTS to Freedom mode.

This makes one question how a company that thinks Hydrogen is better and invested in the first Hydrogen fueling stations in California can over come the growth of the pure electric market with people able to charge anywhere especially at home over night. Be is a slow 110V charge, 220V or 440V, Toyota is going to have a hard time as the populations in Europe, China and North America move to electric auto's for the future.

Even those that are not fans of Trucks or SUVs but like the performance will have their own Life Style electric option as Dodge rolls out their BEV's.

Toyota has recently committed to spending $13.6 Billion on Solid State Battery technology as they work to catch up with the rest of the auto industry. They believe their Rav 4 Hybrid and pretty much every other product they have can hold them with Hybrids till BEVs are ready, but in a fickle market place, where Tesla is loosing market share to Rivian and Ford, how can Toyota hold onto their global industry lead?

This brings up another question that has to be asked, is Ford ready to be the global leader in Auto sales as they lead the push into a full electric portfolio? What about Rivian as it is backed by Ford and especially by Amazon with a decades long contract to deliver electric vans for package delivery. Could this be what allows Rivian to rise to one of the top auto builders in the next decade?

What are your thoughts on this, could the resistance to electric auto's by Toyota be their downfall?

Who do you think might become the industry leader in auto manufacturing by the end of this Decade, 2030?

Toyota Passes GM To Become #1 (cnbc.com)

Rivian is no Tesla. That's exactly what these EV buyers want - CNN

Tesla’s BEVs vs. Toyota’s hybrids: the battle for the future of low emission cars - Energy Post

Report: Toyota Working Against EV Shift (thetruthaboutcars.com)

Toyota’s Chief Says Electric Vehicles Are Overhyped - WSJ

Toyota President Akio Toyoda: All-EV plan wrong for Japan | Automotive News (autonews.com)

A complete shift to EVs could cost Japan millions of jobs, cautions Toyota CEO (hindustantimes.com)

News | Ford Media Center

View full article

[smk4565]

I think Toyota will still be #1 in 2030, maybe VW overtakes them and Toyota is #2, but they'll be close. And assuming there isn't more merging, and something like Honda and GM merge to make a real big company or something.

Hydrogen isn't going to catch on, maybe that works for trucks in a shipping port or something in a specialty use, but not for general public, because there isn't a hydrogen fueling infrastructure.  BEV is going to replace fuel, end of story. 

Toyota will need to get more EV's going in the 2020s, they hybrids will be good til 2030, but after that they better have BEV's or else they will start to get over taken by VW, Stellantis, Renault/Nissan, GM, etc. 

[riviera74]

Being the sales leader in any market makes you a target for all other competitors.  Now Toyota faces what GM had to deal with for nearly a century: everyone is nipping at its heels.  The leader makes a few wrong decisions judging the future of the marketplace and everyone else pounces on their mistakes one way or another.  Toyota can probably shift from hydrogen to full EV since they have their hybrid lines have taught them a whole lot about the technology and what it takes to deliver.  This is NOT GM of the 1970s and 1980s, where GM was struggling to contain and defeat Toyota and Honda in competition for Boomer buyers.  GM lost a LOT of market share from 1968-2009 (about 1 percentage point per year), which allowed Toyota to surpass them on the sales sheets.  EVs to the left, with Hyundai/KIA to the right, Toyota looks like they might be squeezed if they are not careful.

If Toyota's days at number 1 are numbered, that may not be a bad thing.  If they lost the prize of being the number one sales leader, that would allow Toyota to focus on making the best vehicles, not just merely moving the metal.  Is GM in better shape now, or in 2004 when they ended Oldsmobile, with the last one off the assembly line as an Alero?  GM has not been in as good of shape in at least 15 years or more than right now.  And some of that is AFTER it lost the #1 title to Toyota.  Toyota fears being surpassed by cheaper competitors AND better products that fit tomorrow's markets better than what is currently on offer.  Imagine if FORD or GM had a true Tacoma killer.  Imagine if FORD or GM had an EV that renders the Prius line completely obsolete, at prices Toyota cannot or will not match.  New competitors will give Toyota executives some sleepless nights.

In a competitive environment, NO LEAD is safe from being surpassed.  Ever.  Just ask GM.

[balthazar]

1 hour ago, David said:

Fast forward to 2021, battery electric auto's are all the rage by auto companies.

?

1 hour ago, David said:

many of the reservation holders have stated that they are waiting to replace their 4 Runner or Prius with a Rivian R1T or R1S auto.

How many people are replacing a $24K vehicle with a $75K vehicle??? Not a significant volume, without a doubt.

[smk4565]

Toyota has penetration in a lot of global markets.  But just looking in the USA, the Rav4 is the #4 selling vehicle in the country.  And when you go by segments, the Camry is the best selling car, Rav4 the best selling SUV, the Highlander probably is the #1 selling 3 row SUV, if it isn't it is close, the Civic beats the Corolla, that is an area Toyota needs to improve but the Corolla Cross is now there, so maybe that is their answer.   But then Toyota has the #1 selling mid-size truck, the 4Runner still sells decent despite being ancient.  The Lexus RX is the best selling luxury SUV, the ES350 still sells pretty strong.    

Toyota is strong in a lot of key segments, and much of the competition is giving up on some of those segments.  Mazda dropped the 6 and the CX-3, Ford has dropped all cars but Mustang, and they are dropping Ecosport in 6 months, GM seems to be dropping every car they have at the end of the life cycle except for Corvette.  I feel like a lot of car companies are giving up on segments and making Toyota's job even easier.

[surreal1272]

14 hours ago, balthazar said:

?

How many people are replacing a $24K vehicle with a $75K vehicle??? Not a significant volume, without a doubt.

First of all, good luck find ANY Prius for under $30K much less $24K. Second, the 4 Runner routinely sells for around $50K so that’s not really not that far of a swing for folks looking to make the jump. 

[riviera74]

11 hours ago, smk4565 said:

Toyota has penetration in a lot of global markets.  But just looking in the USA, the Rav4 is the #4 selling vehicle in the country.  And when you go by segments, the Camry is the best selling car, Rav4 the best selling SUV, the Highlander probably is the #1 selling 3 row SUV, if it isn't it is close, the Civic beats the Corolla, that is an area Toyota needs to improve but the Corolla Cross is now there, so maybe that is their answer.   But then Toyota has the #1 selling mid-size truck, the 4Runner still sells decent despite being ancient.  The Lexus RX is the best selling luxury SUV, the ES350 still sells pretty strong.    

Toyota is strong in a lot of key segments, and much of the competition is giving up on some of those segments.  Mazda dropped the 6 and the CX-3, Ford has dropped all cars but Mustang, and they are dropping Ecosport in 6 months, GM seems to be dropping every car they have at the end of the life cycle except for Corvette.  I feel like a lot of car companies are giving up on segments and making Toyota's job even easier.

Is it really a good thing to be #1 in shrinking segments? I think not.

I have no idea when the crossover thing will pass or whether it is long-term trend, but I am not sure whether Toyota wants to be in shrinking segments.  Remember: the Avalon dies after this model year.

[G. David Felt]

14 hours ago, smk4565 said:

Toyota has penetration in a lot of global markets.  But just looking in the USA, the Rav4 is the #4 selling vehicle in the country.  And when you go by segments, the Camry is the best selling car, Rav4 the best selling SUV, the Highlander probably is the #1 selling 3 row SUV, if it isn't it is close, the Civic beats the Corolla, that is an area Toyota needs to improve but the Corolla Cross is now there, so maybe that is their answer.   But then Toyota has the #1 selling mid-size truck, the 4Runner still sells decent despite being ancient.  The Lexus RX is the best selling luxury SUV, the ES350 still sells pretty strong.    

Toyota is strong in a lot of key segments, and much of the competition is giving up on some of those segments.  Mazda dropped the 6 and the CX-3, Ford has dropped all cars but Mustang, and they are dropping Ecosport in 6 months, GM seems to be dropping every car they have at the end of the life cycle except for Corvette.  I feel like a lot of car companies are giving up on segments and making Toyota's job even easier.

You seemed to have glossed over a very important point I made:

 In the latest Rivian is no Tesla story on CNN Business, it is an interesting observation that many of the reservation holders have stated that they are waiting to replace their 4 Runner or Prius with a Rivian R1T or R1S auto. The down to earth approach of the CEO RJ, life style focus and environmental messages that feel sincere is what has driven people to pre-order the Rivian auto's. With production now in full swing, one has to wonder what Toyota will do as they loose customers to Rivian.

Per that CNN story with interviews with actual people who have reservations / orders placed, it is VERY REAL that people who own 4 Runners and Prius auto's are trading them in for a Rivian. That is a Toyota loss. 

As @riviera74 clearly pointed out, being #1 in a shrinking market is NOT a good place to be. 

These are all signs we saw with GM leading up to it's bankruptcy. Ignoring the market, ignoring the customers, believing that the Executives know best.

I personally think Toyota is in a dangerous situation and needs to wake up to what the world is asking for and that is not a drivable Hydrogen generic auto!

Life Style BEVs are the future.

[smk4565]

9 hours ago, riviera74 said:

Is it really a good thing to be #1 in shrinking segments? I think not.

I have no idea when the crossover thing will pass or whether it is long-term trend, but I am not sure whether Toyota wants to be in shrinking segments.  Remember: the Avalon dies after this model year.

Yes, it is good to be #1 in any segment.  Sedans won't disappear from the market.  Others will give up, and the Camry and Corolla will still be there.  Plus Toyota has 5 crossovers, 1 minivan (another segment most are giving up on) and depending on what happens with the full size SUV's, lets assume 2 BOF SUVs.  7 SUVs 2 pickups and a van seems like enough to cover the growth segments.  And look at Ford, they wanted to focus on just SUVs, now they are killing the Ecosport due to slow sales because that market is flooded.  Edge is dying in another year too.  Stuff like the Venza, Sorrento and Santa Fe are better options.  

[smk4565]

6 hours ago, David said:

You seemed to have glossed over a very important point I made:

 In the latest Rivian is no Tesla story on CNN Business, it is an interesting observation that many of the reservation holders have stated that they are waiting to replace their 4 Runner or Prius with a Rivian R1T or R1S auto. The down to earth approach of the CEO RJ, life style focus and environmental messages that feel sincere is what has driven people to pre-order the Rivian auto's. With production now in full swing, one has to wonder what Toyota will do as they loose customers to Rivian.

Per that CNN story with interviews with actual people who have reservations / orders placed, it is VERY REAL that people who own 4 Runners and Prius auto's are trading them in for a Rivian. That is a Toyota loss. 

As @riviera74 clearly pointed out, being #1 in a shrinking market is NOT a good place to be. 

These are all signs we saw with GM leading up to it's bankruptcy. Ignoring the market, ignoring the customers, believing that the Executives know best.

I personally think Toyota is in a dangerous situation and needs to wake up to what the world is asking for and that is not a drivable Hydrogen generic auto!

Life Style BEVs are the future.

First off, Toyota brand doesn't have any $75,000+ vehicles except the Land Cruiser, which they are killing in the USA (I assume for a Lexus Version).  Lexus then does have SUVs and the LS/LC up in that $75k+ range.  But I can't imagine Toyota brand is really going to lose customers to Rivian, sure a handful, but it isn't like Toyota/Lexus sales are going to drop 10% because Rivian and Lucid arrive on market.

Toyota is also a company of 366,000 employees and have $52 billion cash on hand.  If the market demands a lifestyle electric SUV, I am sure they can come up with 1 or 7 of them if they want.  Toyota is a very low risk taking, methodical company.  Maybe that is good, maybe it isn't, but that is how they operate, and it has worked so far for them. 

[balthazar]

33 minutes ago, smk4565 said:

Toyota brand doesn't have any $75,000+ vehicles except the Land Cruiser

It's a cheap, baseline brand. It can't carry a $75K plus vehicle.

[riviera74]

1 hour ago, balthazar said:

It's a cheap, baseline brand. It can't carry a $75K plus vehicle.

If FORD can have an F150 approaching $75K, why can't Toyota?  It was not that long ago where $75K was Lincoln (and MB/BMW/Audi) territory.

[smk4565]

1 hour ago, balthazar said:

It's a cheap, baseline brand. It can't carry a $75K plus vehicle.

Well that is why they have Lexus.

[balthazar]

25 minutes ago, smk4565 said:

Well that is why they have Lexus.

lexuses are just 'rebadged' cheap cars. Right?

30 minutes ago, riviera74 said:

If FORD can have an F150 approaching $75K, why can't Toyota? 

Uhhh... just look at the respective model lines.

[smk4565]

On the current generation, a fairly loaded Tundra is about $55k, if they price the new one like that, and you can get a well equipped Tundra at that price, that is going to be crazy competitive in a world of $75k trucks.  

[balthazar]

It’s not a ‘world of $75K’ trucks- the middle 50% is in the $50K’s.

toyoter apparently is STILL sitting on their hands RE this upcoming tundra. Hey; 100-120K units may be what they want to sell in the hottest segment going. That’s fine.

Edited September 29, 2021 by balthazar

[smk4565]

48 minutes ago, balthazar said:

It’s not a ‘world of $75K’ trucks- the middle 50% is in the $50K’s.

toyoter apparently is STILL sitting on their hands RE this upcoming tundra. Hey; 100-120K units may be what they want to sell in the hottest segment going. That’s fine.

I think they should target 200k.  Toyota could be profitable selling zero pick up trucks.  But Toyota has the size and resources to compete everywhere so they should.

[balthazar]

But they don't.

And they can target/benchmark in the full-size truck segment all they want; they're still just cheap copies of the class leaders.

 

Right?

[regfootball]

The latest RAV4 is a huge seller and actually has a semi stylish exterior. The highlander also it could be said same thing. Those 2 alone sell huge. The fact that they didn’t botch the styling on those 2 compared to their other styling disasters shows at least they are capable of improving parts of their operation that used to suck more. So they could potentially be capable of holding their #1. But then they continue to have sucky Tundras etc. IDK. 

[riviera74]

The Tundra does not matter to Toyota anywhere nearly as much as an F-series matters to Ford or the Silverado/Sierra twins matter to General Motors.  As long as Toyota can sell upgraded Camry and Corolla models as RAV4 and Highlander models (at higher prices), Toyota will be just fine.  The Tundra/4Runner simply do not matter to them in sales very much.

[trinacriabob]

I think Toyota will do fine, but could do better ... numerically.

Their product, which felt and, even smelled, "different" from American cars a long time ago now offers a feel that Americans can feel at home with in no time.

However, what puzzles me, is how, when other automakers - VW, SEAT, Hyundai, Kia - are making their sedans and coupes more attractive, Toyota's are becoming uglier.