Truck Wars: Toyota Challenges Detroit Loyalty

Truck Wars: Toyota Challenges Detroit Loyalty

Just how loyal are American truck buyers really?

Toyota finds out this week when its 2007 Texas-assembled Tundra, the first credible challenger to Detroit-produced full-size pickup trucks, begins arriving in dealerships nationwide.

Tundra advertising kicked off with the NFL Super Bowl, which also saw spots for Ford’s new Super Duty pickup and Chevrolet’s Silverado.

Detroit manufacturers, particularly Ford and GM, are counting on their long history of truck making, segment dominance and brand-loyal owners to ward off Toyota.

Indeed, Edmunds.com statistics show intense loyalty to GM and Ford makes, in particular. Nearly 70 percent of Silverado buyers who traded in a vehicle did so for another GM model; 55 percent traded for another GM truck. GMC’s figures are even higher, and Ford’s are above 50 percent as well. At the same time, Toyota’s truck loyalty figures are below 40 percent; Nissan’s are even lower.

To that end, Toyota is positioning itself as the underdog, “the Little Engine that Could,” as Jim Farley, Toyota Division’s group vice president of marketing, said at the national press briefing on the Tundra marketing held in Detroit last week. “We’re the challenger,” he said. “We’re not assuming anything. We have a chip on our shoulder, and we’re going after this business. We’re starting from scratch.”

And Toyota is going after the business in a big way. Trade journal Advertising Age reports Tundra advertising spending will surpass $100 million; Toyota officials didn’t dispute the figure.

Toyota spent a big chunk on dealership personnel training – more than for any launch in history by “more than a factor of five,” said Farley. For Camry, the previous record holder, Toyota trained 11,000 dealership personnel; for Tundra, it trained more than 30,000. The training included test drives of Tundras, specially hand-built and air-shipped from Japan just for the events, against its competitors.

Toyota hits the road with its “Prove It” tour, a test drive program to turn skeptics into believers.

“We have a lot to prove,” admitted Brian Smith, Toyota corporate truck manager. He said marketing, advertising and promotional events focus on the Tundra’s capability for towing and load carrying, standard safety equipment, powerful performance, sophisticated brakes and value, including fuel efficiency.

The “Prove It” tours, being held in 350 markets and expected to draw more than 140,000 people, will tie into already scheduled music, sporting, hunting, fishing and motorsports events. This grassroots marketing, developed by a collection of small, regional and boutique ad agencies overseen by Toyota’s agency of record, Saatchi & Saatchi, has Toyota going where it – nor, in some cases, has any automaker – gone before, such as Mexican rodeos. Toyota makes its NASCAR debut at the Feb. 18 Daytona 500. It also linked with Brass Pro Shops, 84 Lumber and TSC Tractor Supply Co.

Despite its efforts, winning over truck buyers will be no cakewalk for Toyota. Detroit truck makers say they will see to that. Indeed, they can’t afford for Toyota to eat their lunch in the highly profitable truck market as they have in other car segments.

Ford aired its first ad for its Super Duty just before the Super Bowl kick off. Ford is positioning the new Super Duty as the halo over its F-Series line. And though the F-150, the nation’s best-selling truck and best-selling vehicle for three decades, was last redesigned in 2003, Ford is sprucing up the line with new special editions, including a California and a Texas edition. Ford’s long truck leadership is a major advantage, said the automaker’s marketing chief Cisco Codina. “We’ve held that truck leadership by really knowing our customers,” he said.

GM, meantime, has some momentum with its newly redesigned Chevrolet Silverado and GMC Sierra.

GMC, which sold 210,000 Sierra models last year – in the ballpark of Toyota’s goal for the Tundra, may be GM’s best secret weapon against the Tundra. The brand has grown in sales 11 of the past 13 years and does particularly well in import-dominated areas, said Steve Rosenblum, GMC marketing director. In fact, Southern California – home of Toyota – is its strongest market,

“We line up very well demographically with Toyota because we skew toward the higher educated, higher income households,” he said. GMC launches the fancier Denali version of the Sierra in February, more ammunition against Tundra.

John Schwegman, Silverado marketing manager, sees the Silverado’s two different interiors – one a work truck and another for luxury buyers – as a two-pronged weapon against Tundra, which offers a single interior.

In fact, both Ford and GM are promoting the breadth of their truck lines, that include heavy duty versions that Toyota doesn’t yet offer, as another advantage.

Toyota may have a challenge with its pricing as well. Edmunds.com analysis shows the Tundra’s entry-level base price is higher than its competitors' as is its top-of-the-line base price. Toyota, however, argues its prices include standard equipment, such as safety features, offered as options on competitive models.

Indeed, buzz on Edmunds.com forums has been positive about the Tundra and its attributes but skeptical about the price. Wrote one forum participant: “I can safely say that the new Tundra won’t make it to my list unless there are some substantial price discounts …. the Silverado and (Nissan) Titan are looking a lot better.”

Added Alex Rosten, Edmunds.com’s manager of pricing and market analysis: “After looking at the 2007 Tundra pricing, I think 200,000 units this year (Toyota’s goal) will be a challenge.”

Full-size pickup truck sales will be a challenge for all makers. Segment sales dipped last year from 2004 and 2005 record levels and could be flat or lower for 2007. Any gains Toyota makes will come at someone’s expense since the segment isn’t expanding.

“We hope Toyota’s sales will come out of someone else’s hide,” said Ford’s Codina.

No doubt GM, Chrysler and Nissan wish the same.

Michelle Krebs:  is Editor-in-Chief of AutoObserver.com. Follow @AutoObserver on Twitter.