Toyota to Freshen U.S. Approach - By Dropping Mid-Cycle

I woke this morning to a really annoying buzzing sound, coming from somewhere off to the east. It wasn't my alarm clock, and it took me until I read today's headlines before I could understand what was going on.

That's when I saw that Automotive News had published an update on Toyota's future plans for the U.S. market, and I realized what the noise was — someone had pressed the Toyota panic button.

Let's build up to this slowly, though. First off, the report is that Toyota will take a good long look at its lineup of "real" trucks — those built with body-on-frame chassis — with an eye to dropping one or two. Now, that actually makes sense.

Despite the company's big push to get the current-generation Toyota Tundra full-size pickup accepted by the U.S. market, success has been hard to find. U.S. customers purchased only 6,308 Tundras in September, while the Ford F-150 found 33,877 customers; the Chevrolet Silverado/GMC Sierra tandem teamed for nearly 28,000 sales; and the Dodge Ram was good for sales of 13,452 units.

What happened? For one, Toyota was entering into a highly specialized market segment with very loyal customers, and they were doing so with a product that was not clearly better than the competition. Today's Tundra is a far better truck than past iterations, but it's had its share of minor problems and has even been caught up in the Toyota floor-mat debacle.

Further, Toyota had a major stumble over a seemingly minor number back at the Tundra's launch. GM had just introduced its own redesigned big pickups before Toyota did the same with the Tundra, and the General's trucks had set a new benchmark by cracking 20 mpg on the highway. So, right off the bat, the company known for being the green innovator faced the humiliation of not offering best-in-class fuel mileage with this brand-new, supposedly world-beating new product.

In a lot of ways, the Tundra situation was a harbinger of things to come for Toyota, as the company found itself suddenly wrong-footed by changing attitudes in the U.S. market — just as Toyota was making a full-on effort to achieve the same kind of success in the truck segments that it had seen in the car segments, the former drove off ye olde cliff.

Today, when the industry and customers alike are moving ever-more increasingly toward crossovers, Toyota is still faced with trying to sell vehicles like the Toyota FJ Cruiser, whose funkiness doesn't quite outweigh its meager mpg ratings, and the Toyota Land Cruiser Wagon, which inhales fuel at a rate of 13 mpg city and 18 highway.

So, yes, dropping a few of these vehicles to focus on fuel efficiency seems like a pretty safe bet, and a necessary one, too. That's because Toyota has slipped into the same trap that used to bedevil General Motors: The Japanese OEM now doesn't have the resources to adequately support its entire lineup.

Which brings us to the next key bit of info coming out of Automotive News. Unsurprisingly, Toyota will focus on bringing more hybrid models to the U.S. market. That's called playing to one's strength, and, for Toyota, it's happening none to soon.

Yes, the Toyota Prius is still king of Hybrid Mountain. But Toyota's strategy of focusing on this sort of non-traditional design package — as opposed to what's being offered by the Ford Fusion/Mercury Milan, for example — automatically takes the Prius off the consideration list of a significant number of buyers.

I'm betting that plenty of people are comparing the Fusion to a vehicle like the Toyota Camry hybrid, based on their similar body styles, instead of the Prius. And in this comparison, the score is Fusion 39, Camry 34 — at least in terms of combined mpg numbers. Getting Prius-like performance out of a future Camry would give a major boost to Toyota's U.S. operations, especially because the Fusion is, currently, a much better car than the Camry.

Of course, one would expect that to be the case, because the Ford recently went through what's termed a mid-cycle refresh. That's what OEMs call it when they do a bit of redesigning to a current vehicle before the time comes for a complete redesign. Unfortunately, that's also something Toyota is giving up on, at least in the U.S. market.

Per Automotive News, the Japanese company will "drop minor model changes and make a bigger deal of model changes when they do occur." The problem, though, is that consumers don't always consider these changes to be so minor. The Fusion, in fact, is a prime example. Ford's mid-sizer was updated for 2010 and the result is a measurably better vehicle that's seeing measurably better sales.

Toyota, I'm sure, would say that Ford should have had all of its ducks in a row prior to the original Fusion launch, eliminating the need to pump extra resources into the car so soon after its debut. But vehicle generations often last for four or five years (or more), while vehicle technologies and trends and customer tastes can all change drastically in just a few months. Without a regular schedule of mid-cycle refreshes to keep up, I don't see how Toyota is going to compete.

I mean, refresh my memory here, but isn't getting stuck selling vehicles that no longer match up in the marketplace exactly what happened with Toyota's full-size trucks?