Toyota clears the decks for 2011

Most of the models in Toyota's Australian product range are at least three years old. Some, such as the Camry and Aurion date back to 2006, and the company's senior executive director of sales and marketing strongly believes the age of the current models is holding back sales for the brand.

"In 2011, we will launch the FJ Cruiser in March, followed by a significant second-half update for HiLux and the new Yaris hatch later in the year," said David Buttner during a press conference yesterday. "After that, the renewal of our range continues, starting for the fourth quarter with the next generation Camry, followed in 2012 by the Hybrid [Camry]."

"When you look at where Toyota's poised now, in terms of its model offerings, we're fundamentally in the middle of our current generation, or indeed, the end of our current generation [for a large number of models]. When we think back to 2007, when Toyota launched seven next-generation cars, that's always a very buoyant time for the franchise.

"[New models] attract customers and always lead to a huge boom in sales. We are now poised to commence that journey again over the next two years."

The FJ Cruiser is the sort of vehicle that will draw buyers into showrooms, although Toyota doesn't expect the Prado-based retro SUV to sell in massive numbers. When it arrives in Australia, it will be offered with air-conditioning, eight-speaker six-CD audio, Bluetooth connectivity, reversing camera and keyless entry.

Possibly of more interest to mainstream buyers will be a new, small hybrid due here in 2012. Buttner wasn't sure whether the car will fit within the light or small VFACTS segments, but denied that it would be the Yaris hybrid. As we've reported previously, it's likely to be the hybrid variant of the Corolla, sold overseas as the Auris. It would sell as a lower-priced alternative to the Prius, appealing to the same sort of buyers who prefer their hybrids to appear more conventional -- much like the Camry Hybrid.

All the new models are expected to stir up showroom traffic and interest across the full model range. And they will start from scratch with the appropriate pricing and equipment levels. Buttner explained that it's not just how an older car looks and feels to drive that can deter buyers, it's also a 'bracket creep' syndrome in each car's kit.

"What we did with both Corolla and Yaris last year... there was some deterioration in our spec-adjusted price position. Over time the position we'd set [against a benchmark competitor] had been eroded in the market place, as competitors brought out more competitive offerings -- added specification for no price [increase]. So what we fundamentally did was reposition our vehicles back to the spec-adjusted price when we launched the vehicles," he said. That is basically a matter of adding extra equipment to improve each car's value as a package.

Previously Buttner had estimated the difference between new models in the show room and an older range could be as much as two to five per cent. But that flies in the face of Toyota's experience over the last 12 months. The only major new model from Toyota last year was the Prado, but Toyota's total sales for the year rebounded 6.8 per cent over the previous year's -- way more than can be credited to the introduction of the new SUV.

As for most car companies, the jump in sales last year was relative to the performance in 2009, as the GFC's impact slowly faded. Toyota's tally for 2010 was 214,718 -- 81,795 units ahead of second-placed Holden, but over 24,000 units fewer than the company's record in 2009. If not for the GFC, Toyota might have enjoyed sales in 2010 around the quarter of a million mark -- or not...

But the GFC wasn't the only problem faced by Toyota over the past two years. Global recalls may have had some impact on the perception of the brand, although Buttner believes that Aussie customers have not switched allegiance from Toyota and the adverse publicity has "abated" over the last six months.

That has likely resulted from Toyota Australia's very measured response to the high-profile recalls. The company has sent technicians to private homes and work places -- wherever a Prius has been parked -- to upload new software for the braking system within 10 minutes, without inconveniencing owners.

Toyota Australia didn't publish full-page ads in the papers to boost brand image at the time of the recalls, Buttner says, because there was not the same need here as was the case for Toyota in the US.

"We consulted our dealers, we consulted widely internally -- and we felt to [publish such ads] might just add fuel to what wasn't a fire in Australia."

Recalls may have delayed purchase decisions by buyers, but sales for Prius, for instance, are where they should be, according to the Toyota chief. Buttner admits that the hybrid car, which was recalled in Australia for brake pedal feel, is selling at a rate 1400 units lower than for the previous year. That's attributable to what he calls "some degree of substitution" following the introduction of the Camry Hybrid.

Thus, through its handling of the recalls and weathering the GFC by means of retail incentive, Toyota has a broad-brush strategy in place for enhancing sales that had fallen behind over the past couple of years. Maybe 2011 will see Toyota pass a quarter million...

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