Much ink has been spilled over the past few months about the Toyota Tundra, which is Toyota's first true competitor to the full size pickup offerings from GM, Ford, and Chrysler in terms of size, capability, and power. (Previous Tundras were about 7/8 the size of the domestic trucks).
The initial launch of the truck did not go well. In fact, Toyota's problems began before a single truck rolled off the line, when construction costs for the new factory that Toyota built in San Antonio, Texas for the Tundra went significantly over budget. The product mix was not appropriate at launch - there were too many lightly-equipped regular cabs and not enough loaded CrewMax four doors. Next, there were a handful of highly publicized camshaft failures in the truck's new flagship 5.7 liter V8 engine, and Toyota had to resort to un-Toyota-like generous incentives to give the truck a sales boost.
Well, the incentives must have worked.
When comparing current Tundra sales against its former, smaller self, only the first two months of 2007 were lower than their comparable periods in 2006. Then, starting in March, Tundra sales exploded, and were up over 120% (i.e., more than double) in May, June, and July compared to the same period in 2006. In fact, if Toyota sells just 18,518 Tundras in August 2008 (it sold 23,150 in July), it will have already matched its total sales for 2006. Through the first seven months of 2007, Toyota has sold an average of 15,141 Tundras per month; extrapolating that through December 31, and Toyota is on pace to sell 181,692 trucks, which is almost 46% more than it did in 2006 (but short of its sales goal of 200,000 trucks in its first year). However, if Toyota can sell July's total of 23,150 trucks per month for the rest of 2007, it will have sold 221,740, and blown away its goal. I don't see any signs of the juggernaut slowing down; sales have increased in each month the truck has been on sale, so meeting their goals - which seemed laughable in the truck's first few months - seems almost inevitable now.
Against its competition, the Tundra's sales are even more impressive. The full size pickup segment is down 4.7% so far in 2007, and every competitor is showing negative sales year to date but Toyota, which is up 56.5%. It's a tough market in which to sell a full size V8 powered pickup with the housing market slowing down and high gas prices, which makes this feat even more impressive. So, whose lunch is the Tundra eating, if its sales are way up in a falling segment?
GM Vice Chairman of Global Product Development Bob Lutz, when asked about the Tundra's likely impact on the domestic pickup market several months ago, speculated that the Nissan Titan would bear the brunt of any sales increase from the Tundra. It turns out that so far, he was partially right; year to date Titan sales are down 12.9%, which is the worst drop among competitors. The Ford F-series is down 12.2%, while the GMC Sierra and Chevy Silverado cousins are down a combined 6.9% so far. The Dodge Ram, in spite of a truck about to be redesigned, is the only competitor whose sales dropped slower than the segment's sales.
Another angle to compare might be the market share that each truck has. The biggest gainer in market share (comparing 2007 market share through July 31 against 2006 market share through December 31) was Toyota, going from 5.6% to 8.5% (up 2.9 percentage points). The biggest loser in market share during the same period was Ford, going from 36.1% to 33.1% (down 3.0 percentage points). In other words, almost all of the Tundra's sales gain has come at the expense of the Ford F-series. Time will tell if this is only a temporary phenomenon, as an all-new F-150 is due for the 2009 model year, but half of the F-series lineup (the Super Duty F-250 and F-350) were recently re-done as early 2008 models, and the new Super Duties aren't propping up F-series sales enough to offset the Tundra's gains.
This all means that the Tundra is doing what it is supposed to do for Toyota - building market share, generating cash and profits, and further weakening the domestic competition - all in the face of a GM product that is superior in many ways. The Tundra's success makes the previous strategy of just ceding the car market to the imports in the 1980s and 1990s in favor of trucks look even more foolish than it already did. Now buyers who are satisfied with their Camry or Corolla who need a work truck are thinking, "well, my sedan has been a good car, so the Tundra will probably be a good truck."