Toyota Tundra Takes Texas, Destroys Detroit Bastion

Toyota Tundra Takes Texas, Destroys Detroit Bastion http://www.bloomberg.com/apps/news?pid 601109&sidrb0Lapiji8&refer=home
an. 11 (Bloomberg) -- Toyota Motor Corp. is winning the battle for
full-sized pickup buyers in Texas, the biggest market for the trucks that are Detroit automakers' best-selling models.
Promoting the redesigned 2007 Tundra, Toyota forced General Motors Corp., Ford Motor Co. and Chrysler LLC to match incentive spending estimated at about $6,000 per truck. While Tundra's Texas market share soared 79 percent, competitors' shrank by 5 percent, said market-research firm R.L. Polk & Co.
Money-losing GM, Ford and Chrysler can ill afford to cede ground to Toyota City, Japan-based Toyota, especially in Texas, which accounts for more than one of every seven large-truck sales. The Texas competition will make it harder for Ford and Chrysler to benefit from the revamped F-Series and Dodge Ram pickups being unveiled at the Detroit auto show Jan. 13.
Tundra sales ``are coming from traditionally Ford, Chevrolet and Dodge'' buyers, said dealer Sam Pack, who owns three Ford stores in the Dallas area. ``Have they negatively affected Ford? No question they have.''
Nationally, 2007 sales soared 58 percent as Toyota redesigned the Tundra to vault it into the full-size category. Meanwhile, GM's Chevrolet Silverado, Ford's F-Series, Chrysler's Ram and Nissan Motor Co.'s Titan fell, leading a 3.2 percent slide for the segment.
Last year's 196,555 Tundra deliveries were less than a third of the total for the Silverado and the F-Series, the nation's top-selling vehicle, and slightly more than half of the tally for the Ram.
Still, Toyota's investment of $1.28 billion to open a Tundra assembly plant in San Antonio in 2006 signals the automaker's aim to win more full-size truck sales.
`Shrinking Market'
``Where once there were three players and 10 percent year- over-year sales growth for these vehicles, now there are five players in what looks to be a shrinking market going forward,'' said Eric Noble, president of industry-consulting firm Car Lab in Orange, California. ``Profits aren't going to plummet, but they are going to be harder to achieve.''
All automakers are being squeezed by gasoline averaging $3.10 a gallon at U.S. pumps and the U.S. housing slump. Unlike GM, Ford and Chrysler, Toyota has a financial cushion to withstand a truck decline: net income of 1.64 trillion yen ($15 billion) in the year ended March 31.
In 2006, GM lost $2 billion, while Ford's deficit was a record $12.6 billion. That year's loss for Auburn Hills, Michigan-based Chrysler, then owned by DaimlerChrysler AG, was $680 million using international accounting standards, or $1.5 billion under traditional U.S. methods. GM and Ford haven't released 2007 results, and Chrysler doesn't have to disclose financial data now that it's closely held.
Toyota Fans
Toyota is rated by 17 analysts as a ``buy,'' compared with two who say hold and two who say sell, based on a Bloomberg survey. Of 19 analysts following Detroit-based GM, six advise buying, 10 holding, and one selling. Four analysts rate Ford a ``buy,'' while seven say hold and five say sell.
GM rose 90 cents to $23.62 at 4:04 p.m. yesterday in New York Stock Exchange composite trading and has tumbled 23 percent in the past year, while Dearborn, Michigan-based Ford gained 18 cents to $6.25 and is down 19 percent for the same period. Toyota declined 2.6 percent to 5,660 yen in Tokyo and has lost 26 percent in the past year.
Texas has been among the industry's few recent bright spots for full-size trucks.
As sales fell 14 percent nationally from 2004 through 2007, they rose 5.2 percent in Texas, R.L. Polk auto-registration data show. Texas's total of 244,945 full-size trucks through Sept. 30 was 61 percent more than runner-up California's.
Falling Fords
Ford's F-Series fell to 31.9 percent of the Texas market through Sept. 30, down 5.5 percentage points from a year earlier, while Silverado was little changed at 26.7 percent and Ram rose 1.4 points to 19.8 percent, according to Southfield, Michigan-based R.L. Polk. Nissan's Titan slipped to 2.9 percent from 3.1 percent. The Tundra rose to 8.4 percent from 4.7 percent.
``I hear the market is down. We're up 120 percent,'' said Dale Minor, general manager of Freeman Toyota in the Dallas-Fort Worth suburb of Hurst.
The new Tundra has a wheelbase as much as 3.7 percent longer than its predecessor, and options include a new V-8 engine. Matching Detroit's size and power lets Toyota keep buyers who chose GM or Ford pickups after driving their cars and SUVs, U.S. sales chief Jim Lentz said in a 2007 interview.
Depending on the model and before incentives are factored in, the Tundra ranges in price from $22,290 to $42,070, while the F-150 ranges from $17,345 to $39,500, according to auto- pricing Web site Edmunds.com.
Automakers' Incentives
Toyota relied on incentives to spur sales, spending up to $6,400 on each Tundra, according to estimates from CNW Marketing Research Inc., which includes items such as rebates and discount financing. Bandon, Oregon-based CNW projects Ford spent $6,647 for each F-150, GM $6,019 on each Silverado and Chrysler $6,477 on each Ram.
The increased competition for buyers takes a toll on profit margins, even in Texas, some dealers say.
Ford dealers now make profit of 10 percent to 11 percent on a full-size truck, down from 14 percent to 15 percent a few years ago, said Pack, the Dallas-area Ford dealer. F-Series trucks are the only Ford model with profit of 10 percent or more, he said. Automakers don't disclose profits by model.
U.S. automakers say they will fight to retain customers. ``It's a hotly competitive segment with extreme owner loyalty,'' GM Vice Chairman Robert Lutz said in a December interview in Sterling Heights, Michigan. ``You'd be hard-pressed to find a domestic pickup owner who says, `I'm dissatisfied and I'm going to look for a Japanese truck.'''
Fighting for Texas
Nor are GM and Ford conceding Texas, where their sales still outpace Toyota's.
``We were successful in Texas. Even in a down market we maintained our market share,'' Craig Eppling, a GM spokesman in Dallas, said in a Jan. 9 interview. ``We held our own against Toyota, whereas some of the market-share gains came out of the other competitors.''
Toyota's Texas results don't appear to be ``all that different from the nation,'' Ford spokesman Jim Cain said in an e-mail. ``They clearly dug deep to reach their sales goals.''
Prices for the new F-Series and Ram haven't been announced. The trucks are scheduled to go on sale in the second half.
``Everyone is still going to keep their nose in the game,'' said Lonnie Miller, director of industry analysis at R.L. Polk. ``They're still probably chasing the same buyer. The number of buyers isn't growing that fast.''
Tundra Misses Target
Even with Tundra's 2007 leap, Toyota trailed the 200,000- truck target it disclosed almost two years ago. The automaker set the same goal for 2008, below its capacity to make as many as 300,000 Tundras at plants at San Antonio and Indiana.
``Marginal pickup buyers'' have switched to more fuel- efficient vehicles, said analyst Joe Barker of CSM Worldwide in Northville, Michigan. ``They are essentially those owners who don't necessarily have a lifestyle need for a pickup.''
Work-truck demand is slipping, too, with U.S. housing starts at their lowest since 1993. Contractors in trades connected to the housing industry make up as much as 28 percent of the pickup market, CNW President Art Spinella said.
``Until these housing-related things turn back up or fuel prices drop, the full-size pickup truck business will continue to be a challenge,'' said Earl Hesterberg, chief executive officer of Group 1 Automotive Inc., a Houston-based auto retailer that represents GM, Ford, Chrysler and Toyota. ``It's a shrinking segment and has more intense competition.''
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"Winning the battle for full-sized pickup buyers in Texas." Get real, Tundra sales are indeed up, but up from what? The previous Tundra was an 'also ran' when it came to GM, Ford and Dodge truck sales. Toyotas total truck sales were only aroung 5% of the truck market, while GM and Ford each were over 30% Percantages are one thing but actual sales are quite differant. Fifty percent increase of meager is still meager. GM and Ford sold more trucks in three month than Tudras did the whole year. Toyota was discounting $7,500 off of MSRP and dumping brand new Tundras at the Manhein Auction for as low as 25K as far back as October. Toyota was also dumping Camry Solars on the rental car companies for $3,000 off invoice, and agreeing to buy them back in six months, to keep the Camry as the number one seller in 2007 LOL

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