Toyota Motor Corp. plans to bring 25 new or significantly updated models into the U.S. market during the next 16 months, and while other manufacturers might be pulling back on sedans, coupes and sports cars, fully half of the new products will be passenger cars, according to Executive Vice President Bob Carter, the automaker’s head of North American sales.
The automaker is already busy fleshing out its product portfolio, recently launching the reborn Venza, this time as a hybrid-only model. Despite cheap gas, Carter said demand for Toyota and Lexus brand hybrids has been soaring and could account for as much as a quarter of their collective sales in 2021.
During a lengthy conversation with reporters during a virtual “holiday party,” Carter and other officials covered a gamut of topics, including Toyota’s push to bring U.S. production back to normal despite the challenges posed by the coronavirus pandemic, as well as product plans for the new factory in Alabama that Toyota is building as part of a joint venture with Mazda.
“Over the next 16 months (there will be) from our two brands 25 new models,” Carter said, noting that some of those will be substantial updates of existing products, as well as “a lot of new models we’re not selling here today.”
The sales chief for Toyota Motor North America avoided going into specifics but he recently hinted that a major update of the big Tundra pickup is in the works, while Toyota is getting ready to begin production next year at the all-new plant it is building, along with Mazda, in Huntsville, Alabama.
Responding to earlier reports, Carter said the products the partners are planning to build at the new plant “will be two uniquely separate vehicles. Don’t expect similar products.” They won’t even use the same underlying platforms, Carter stressed, and will largely be assembled on separate lines with different workforces. There will be some joint operations, apparently, likely including the paint shop.
Though Carter wouldn’t provide any details about the product Toyota will build in Huntsville, he did emphasize that fully half of the new vehicles will be cars. “We are unusual in that we believe the car market is clearly an opportunity for us. There’s no question that the car market is shrinking, but it’s shrinking slower than competitors are exiting,” which, to Toyota, is a chance to pick up share and still grow sales volumes.
Carter predicted the light truck segment of the U.S. new vehicle market could yet grow to 80% “before it starts to plateau.” Even so, with a large share of what remains, Toyota’s sedans, coupes and sports cars “can be profitable.”
Among the passenger cars coming: a new version of the Toyota 86. It’s an update of the little sports car developed as part of another joint venture with Subaru. The smaller Japanese automaker last month revealed its version, a makeover of the Subaru BRZ.
What Carter also made clear is that a sizable number of the upcoming products will be offered in hybrid form – possibly sold only as hybrids, as is the case with the 2021 Venza, as well as the remade Sienna minivan.
It has become something of conventional wisdom that the plunge in gas prices accompanying the pandemic has sharply reduced interest in electrified vehicles. If anything, however, demand for Toyota’s hybrids has actually outstripped supply this year.
The automaker’s electrified vehicles will end 2020 making up about 16% of its total sales and “As we move into 2021,” said Carter, “you can expect hybrid powertrains to move to 20 to 25% of our business. And we’re not stopping there.”
There are still plenty of uncertainties related to the pandemic, Carter and other Toyota officials stressed during the virtual meeting. “The COVID environment (has) pushed us farther and faster” to adopt. For one thing, a much larger share of Toyota’s sales are now taking place online than had been expected, said David Christ, the U.S. head of the Toyota division.
But perhaps the most difficult challenge has been keeping factories running and filling up the inventory pipeline after the shortages caused by the two-month shutdown of the auto industry last spring.
There are as much as 1 million fewer vehicles on dealer lots than a year ago, according to estimates by JD Power and other analysts. And rebuilding stocks will take Toyota into 2021, even though its North American production network is now operating at essentially normal levels, said Brian Krinock, the senior vice president overseeing U.S., Canadian and Mexican operations. It has taken a lot of work, he said, but “We’re a more nimble company” now.