Author Archive for Jason Lancaster

Toyota Officially Delays Tundra Diesel Light Duty

Update: Read the complete story of the diesel Tundra

Despite our complete disbelief and our challenge of the original PickupTrucks.com report, Toyota exec Don Esmond (a senior VP) was officially quoted as saying “We’ve pushed back the [Tundra diesel] until we can figure out where the market is going.” Kudos to PickupTrucks.com Mike Levine for confirming his earlier report on the record.

Has Toyota made a smart move, or is this decision an error in judgment?

1. Ford, GM, and Dodge have all announced plans to offer 150(0)’s with diesel engines in the next 18-24 months. Based on this announcement Toyota will be the only serious half-ton truck manufacturer without a diesel. Toyota has made great strides to be considered “one of the big-boys” in the truck business, yet this announcement surrenders truck leadership to the domestics and drains momentum.
2. Toyota has already broadcast their intention to delay the HD Tundra for a few years. This move seemed wise at the time – especially with the Tundra LD diesel on the way – but now it looks as if Toyota is surrendering the HD segment to the domestics as well.
3. As we discussed here a few months ago, the cost-benefit analysis of a light-duty diesel Tundra depends greatly on the price premium for the diesel engine. Toyota probably can’t sell too many Tundra’s with diesel engines unless they can get the diesel engine price increase to less than $2000. Considering the complexity of a modern diesel, that price range might not have been feasible. Yet, somehow, the domestic truck manufacturers have yet to back off their plans to produce half-ton diesel trucks. Is Toyota unable to match the diesel engine pricing of GM, Ford, and Dodge?
4. The analysis from PickupTruck.com says that Toyota didn’t think they could sell enough diesel Tundra trucks to make a profit, with fuel prices being cited as part of the reason for lower sales. Yet Ford and Dodge both have a mountain of evidence to indicate that new truck sales have likely hit bottom. This would seem to agree with common sense – after all, trucks are still necessary equipment for a lot of Americans. If truck sales are likely to increase, why freeze development?

Toyota’s decision to pause the release of the 4.5L Tundra diesel was likely based on nothing more than accounting. It doesn’t make sense from a product development standpoint, and when Ford, GM, and Dodge enjoy strong sales of the 150(0) diesel trucks, Toyota will have to look back on this decision and wonder why they allowed accountants to build vehicles.

At least we can expect an updated Tundra next year…

Ford and Dodge Plan HUGE November Advertising Blitz

With the new 2009 Ram and the new 2009 F150 launching at roughly the same time, it’s fair to expect a pretty healthy advertising blitz. However, considering just how important these two vehicles are to their respective manufacturers, it’s fair to say that November 2008 might just be the biggest new truck advertising month ever.

Here’s the advertising plan for the new Ram:

1. Hire the director of the hit movies Top Gun, Days of Thunder, and Crimson Tide (among others) to produce some awesome ads.
2. Buy 1.3 BILLION INTERNET AD IMPRESSIONS on election day (Nov. 4th) and blanket all the major websites (like MSN.com, Yahoo.com, CNN.com, etc.) with ads about your new truck. Since people are going to be checking online for election returns all day, the chances are good your ads will get noticed. This aspect of the campaign alone could cost as much as $100 million.
3. Hope that this ad blitz is enough to sell out all of your remaining 2008 Ram inventory as well as get the new 2009 Rams moving.
4. Pat yourself on the back for a very clever strategy OR, if it fails, get your bankruptcy paperwork in order.

Here are some previews of the Ram Challenge commercials:

New 09 Ram LAUNCHES With Cash On Hood

You know that the truck market is bad when Dodge has to offer $1000 cash back on the brand new 2009 Ram 1500 that JUST launched.

Only one word for this market – ugly. Really ugly. Really really ugly.

While Dodge will officially say they’re offering cash back on the 2009 because customers need this cash to facilitate a trade-in, that’s a smokescreen. An extra $1000 isn’t going to bail anyone out of an upside-down trade. The truth is that Dodge knows their product has to compete with a brand new 2009 F150 and solid offerings from GM and Toyota. While early reviews of the 2009 Dodge Ram talk about the new truck’s amazing ride (because they’re using a coil-spring rear suspension), improved engine with variable valve timing, and improved fuel economy, the fact is this truck is still a Chrysler product.

Chrysler has a reputation for below-average quality (perhaps undeservedly so) and rumors of a pending bankruptcy certainly aren’t helping sales. Not to mention that Chrysler/Dodge/Jeep dealers no longer have a lease program to speak of.

In other words, it’s tough to be Dodge right now. As much as we like the Tundra, we hope that Dodge makes it through the next 18 months. Auto industry analysts say that car sales will recover in 2010 (or so), so Dodge should get back to profitability by then.

One more note about the new 09 Ram – when Nissan launches the new “Titan” next year (which will basically be a copy of a Dodge Ram), what will they change? What improvements/additions will they make? Anyone want to venture a guess?

Reports That 4.5L Diesel Tundra “Delayed Indefinitely” Don’t Add Up

UPDATE – This news has been confirmed – please see our response “Dropping The Diesel A Dumb Decision”

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Pickuptrucks.com has reported that plans for a light-duty 4.5L diesel Tundra have been shelved. We officially doubt the veracity of this news report.

1. Toyota is rumored to be producing a 4.5L diesel version of the Landcruiser for the Canadian market next year (promotional materials have been described). Making this engine ready for the low-volume Canadian market while canceling it in the U.S. makes no sense. At the very least, if the Tundra doesn’t get the 4.5L, you can bet that nothing else in the North America will either.

2. The 4.5L diesel boosts Toyota’s CAFE average. Toyota will find it easier to meet new CAFE requirements if they find a way to improve truck and large SUV fuel economy by 25%. The 4.5L diesel would improve fuel economy by at least that much.

3. Everyone else is doing it. Dodge, Ford, and GM definitely need to build small diesel motors if they want to have any chance of meeting federal CAFE requirements. This is an absolute, set in stone, iron-clad fact. The domestics WILL be offering diesel versions of the Ram, Silverado/Sierra, and F150 by 2010 or 2011. Toyota can’t be the only manufacturer that doesn’t offer this engine – at least not without officially becoming an “also-ran.”

4. The LandCruiser and the Sequoia would both benefit from a diesel motor. The 4.5L wasn’t just going to be put in the Tundra – it was also going to be offered in the Sequoia and the LandCruiser. Both of these vehicles could use a powerful and fuel efficient motor.

5. Finally, and most importantly, this rumor doesn’t make sense. If we assume for a moment that the U.S. truck market is going “small,” big truck sales (i.e. three-quarter and one-ton trucks) will suffer the most. Ford, GM, and Dodge have already determined that their HD and SuperDuty lines are overkill for 90% of their buyers, hence their commitment to offering diesel half-ton trucks. The rationale is that by offering a powerful diesel in a half-ton truck, you give people currently driving a 3/4 or 1-ton truck a truck to “step down” to. A half-ton diesel can offer tremendous performance (12k lbs towing, 2500lbs payload) while also offering decent fuel economy and lower maintenance costs. After all, less than 5 years ago most heavy duty trucks (3/4 and 1 ton) couldn’t pull much more than 12k lbs. Now half-tons are pulling that much.

We think this rumor has been “floated” by Toyota’s PR people to guage public response to a possible official announcement. It sounds like the penny-pinchers at Toyota are advocating a step in the wrong direction – hopefully the loud public outcry will put them in their place.

Ford’s New F150 SFE Package Just Clever Marketing

Ford Motor Company recently announced an “SFE” – or “Superior Fuel Economy” – package for the upcoming 2009 F150. While Ford touts this package as evidence of their commitment to “unsurpassed fuel economy,” we think this package is more of a marketing ploy than a true product for fuel misers. Here are the details:

Ford’s new 2009 F150 “SFE package” is more about marketing than any real changes over a standard F150.