Toyota Tries To Turn 2021 Share Gains Into Permanent Market Edge

Toyota Tries To Turn 2021 Share Gains Into Permanent Market Edge

Toyota is operating on a number of levels to attempt to solidify the share gains the brand made this year. They include the launch of some new models, enhancement of supply-chain transparency for dealers — and a Super Bowl commercial in February for the tenth year in a row.

All of these tactics are meant to help hold in 2022 the approximately one percent of the U.S. new-car market that Toyota gained this year, to about 13.5% or 13.6% compared with about 12.5% last year.

“At this pace, we could have the highest share we’ve had in a decade,” Mike Tripp, vice president of vehicle marketing and communications for Toyota North America, told me. “That’s incredible.”

It’s well understood that a major reason Toyota managed to squeeze out a share increase in this year’s difficult market was its relatively good position in the supply chain for microchips compared with competitors in the U.S. Toyota long ago mastered important fundamentals of the car business — manufacturing, logistics and product quality — and those endemic advantages have demonstrated their importance this year.

But there are some decidedly current factors also afoot for Toyota that give Tripp and his colleagues optimism about protecting that gain in 2022 — and maybe even building on it, should rivals have more trouble climbing out of the microchip-supply crisis:

New models: There’s always a new-model cadence for major automakers, but Toyota is in the midst of a significant one that includes the introduction of a redesigned Tundra pickup truck this year, a new Cross version of its Corolla subcompact sedan, and a redesign of the Sequoia SUV that, according to Automotive News, is due in 2022.

There’s also the all-new, redesigned version of the Sienna minivan that was introduced this year with category innovations including all-wheel drive and a hybrid powertrain.

“We haven’t stopped promoting our vehicles, and we’ll have marketing campaigns and stories for them,” Tripp said.

Inventory transparency: Tripp said Toyota dealers “have become very adewpt at selling into their pipelines” even though the vehicles available on their lots are limited to historic lows.

“We have less than a 10-day supply” in an industry where a 60-day inventory is considered ideal — and amid a Christmas season that usually is a strong one — “but our dealers have visibility to up to a month’s supply. So they’ve been able to work with customers to pre-order. We’ve been happy with the throughput.”

Customer patience: American car buyers have “become more open-minded to buying something they can’t get today,” Tripp said. “The population has become used to waiting, because of what’s happened” under the pandemic.

Ergo, if someone really wants a specific version of a Toyota Highlander SUV, they’re more willing to place an order and simply wait until it becomes available.

Sedan availability: As the U.S. market overall has flipped over the last five years from about a one-to-two ratio of trucks and SUVs to sedans, to the opposite, Toyota has steadfastly maintained its manufacture, upgrading of and commitment to sedans while other automakers — notably General Motors, Ford and Stellantis — essentially have backed out of the traditional vehicle form.

“We’re still investing in passenger cars,” Tripp said. That makes a difference in a market with tight availability overall.

Trademark reliability: Toyota remains “a brand you can trust,” Tripp noted. “When times get tough, and you’re looking for a high-quality vehicle that maintains its value, Toyota is historically good.”

Super Bowl boost: Toyota has become a dependable Big Game advertiser, and the company recently announced it’s sticking with the practice when it comes to Super Bowl LVI on February 13 in SoFi Stadium in southern California. The company hasn’t said how it will follow up on the moving spot, “Upstream,” its ad during the Big Game last February that focused on the story of paralympic swimmer Jessica Long.

“It’s to be determined what we’ll do exactly, but [Super Bowl advertising] is still the place to tell your brand story even though supplies are constrained,” Tripp said. “We’re still producing vehicles that customers want, so our job is to create desire. The Big Game gives us an opportunity to do that.”