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The 4.5L Diesel Tundra – Does It Make Sense?

Update: Read the complete story of the diesel Tundra

For the 2010 model year, the rumor is that Toyota has decided to take the 4.5 liter diesel engine that currently resides in the Australian LandCruiser 200 and shoehorn it into the Tundra. Given that each of the

4.5L Diesel Tundra Confirmed, Bigger Diesel Coming?

Update: Read the complete story of the diesel Tundra

According to Edmunds.com, the Tundra will be offered with a 4.5L diesel V8 for the 2010 model year. While we predicted a diesel for the 2010 model Toyota Tundra a few months ago, Edmunds.com has offered a couple of new points. First, the 4.5L diesel currently being used in the Aussie Land Cruiser is being adapted to the Tundra. We’ve since confirmed this with a couple of Toyota sources we have. Second, Toyota is also planning a larger diesel for an HD version of the Tundra, possibly due out in 2011.

The 4.5L diesel found in the Australian LandCruiser 200

We’ve confirmed that the 4.5L diesel twin-turbo found in the Australian LandCruiser 200 is the basis for the 2010 Tundra Diesel.

Toyota Tundra Diesel CONFIRMED

UPDATE: Unfortunately, this is old news. Toyota back-tracked on this announcement and these plans are dead. Read the full story on the diesel Toyota Tundra.

Boy, do we like it when we’re right…here’s the Reuter’s press release trimmed-down to the important facts:

Toyota President Katsuaki Watanabe said on Sunday the Japanese automaker will launch a diesel-powered Tundra pickup truck and Sequoia SUV in the United States…Toyota has repeatedly hesitated to committing a diesel vehicle for the U.S. market…especially for use in larger vehicles.

“I am happy to confirm that a new clean-diesel V8 engine will be offered in both the Tundra and the Sequoia in the near future,” Watanabe told a news conference at the North American International Auto Show.

The “near future” is likely to be next year…we think the Diesel Tundra will debut in late 2009 as a 2010 model.

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Diesel Tundra Update: Diesel Tundra Likely in 2009

UPDATE – This post is out-of-date – see the latest news on the Diesel Tundra for more info.

Isuzu and Toyota made a recent announcement about a diesel they’re developing that shines some light on their development of a diesel Toyota Tundra.

GOOD NEWS: While not specifically having anything to do with the Tundra, Toyota’s recent announcement (see link below) contains some enlightening information. The press release indicates that Toyota and Isuzu can recuperate diesel development costs even if the diesel engine they’ve developed only sells 20k units per year. If Toyota can recover their R&D costs on on such a small number of engines, the sales volume needed to justify producing a diesel variant of the Tundra is probably lower than we estimated in our last discussion of a Diesel Toyota Tundra.

If we conservatively assume that Toyota will need to sell 40k diesel engines per year to cover R&D costs, Toyota only needs to boost Tundra sales by 20% to reach their “break-even” point. In 2006, Dodge sold 150k diesels, GM 200k, and Ford about 320k diesel powered pickups. Granted, some of those vehicles were “fleet” heavy duty offerings that Toyota may not compete with, but if Toyota only reaches 10% diesel market share, they’ll more than break-even on their diesel development costs.

Is this an indicator that Toyota is producing a Diesel Tundra? We think so — Toyota continues to demonstrate interest and investment in the diesel market, and the pending passage of new CAFE regulations requiring better fuel economy encourage Toyota to put more emphasis on diesel technology. Considering that Toyota Vice President Kazuo Okamoto has stated the Tundra is going to be Toyota’s first U.S. diesel, consider this another sign that a Diesel Tundra is coming ASAP.

Why do you think the Diesel Tundra will debut in 2009? The industry consensus is that engine development takes 2 – 3 years. Toyota announced a partnership with Isuzu to develop diesel engines in June of this year, the idea being that Toyota would be able to bring diesel variants to market faster with Isuzu’s help. If R&D for a diesel Tundra began immediately after the partnership with Isuzu was solidified, (which is easy to imagine based on the Tundra’s sales performance this year) that would mean that the Tundra diesel engine will be ready for production in 2009 or 2010. We believe that Toyota will most likely assemble the new Tundra diesel engine from components already available, making 2 years a likely time frame.

How big will the Tundra’s diesel engine be? It’s still a mystery. Toyota may be adapting a diesel for the U.S. from one currently in production somewhere else in the world, or they may be developing a completely new engine. The 2007 Tundra Diesel SEMA concept featured an 8.0L Hino engine, but we doubt that will be the final offering…Ford is planning to offer a 4.4L diesel in the F150 in 2010, and Ford will offer a slightly larger version in their SuperDuty line. Certainly not anything as big as the 8.0L Hino though — such a big engine would only worsen emissions and fuel economy. Expect the Tundra diesel in the 6.0L range, with the possibility that Toyota’s first diesel might be a little smaller than everyone else’s (just like their first V8 was).

We’ll continue to update you about diesel development as more information comes in. Read the press release.

Toyota Tundra Diesel Near Development

We’ve heard a lot of rumors about Toyota offering a diesel engine in the new Tundra, but we’ve just read of official acknowledgment that a Diesel Tundra is near development.

“In terms of (diesel) introduction into the U.S., the Tundra is the best (vehicle) to do that…The question is when is the best time to do that? That is determined by the customer…It’s something we’re looking at, but we have to see if we can price a diesel and still make it affordable.”

Those are the words of Toyota Executive Vice President Kazuo Okamoto, and the following is clear:

1. The Tundra will have the first Toyota diesel to debut in the US market.

Toyota has been making noise about developing diesels with Hino for use in the European and Asian markets. Considering Hino’s commercial success with large diesels in Asia, it’s reasonable to assume that Hino also has the expertise to assist Toyota in producing a diesel engine for the US market that can compete with Isuzu’s Duramax, the Cummins, and the Powerstroke. Okamoto’s words confirm Toyota would like to bring out a diesel Tundra, and their previous statements about bringing diesels to the US mean they’d like to develop a diesel Tundra soon.

2. Toyota has “put a pencil” to the Diesel Tundra

Clearly, Okamoto’s words indicate that Toyota has determined integrating a diesel into the Tundra would result in an expensive truck. However, his words also indicate that the ultimate cost has as much to do with consumer demand as anything else. That means that Toyota has determined the sales volume the Tundra needs to achieve in order to make the diesel’s development costs affordable. In other words, Toyota knows how many Tundra’s they need to sell in order to bring the Tundra Diesel online. The magic sales number, whatever it is, has got to be less than 400k units. That’s the most Toyota can produce out of San Antonio and Indiana combined.

3. Cost-cutting and a Diesel engine are both needed to fill-out the Tundra’s line-up

The current Tundra is too expensive — $3k to $4k more than competing vehicles. In response, Toyota has offered $3k worth of incentives in order to help reach their sales goal of 200k units. But if Toyota reduces the cost of their trucks in 2008 (and they will be reducing content, we’ve shown that) then their overall profitability and sales volume will increase because they will be more competitive. The question is by how much? If Tundra sales grow by 25% in 2008, would that be enough to justify diesel development? We think so. The Tundra diesel will need 2 or 3 years to develop. If Toyota commits to developing the engine at the end of next year, that means the diesel debuts in 2010 or 2011. At that time, based on a 25% sales growth next year and 10% each year after, Toyota will be selling 300k to 325k Tundras. They can bring out a diesel and have the capacity to sell 75k units. For most automakers, 75k units is more than enough to recover all the development costs of a niche model.

Toyota needs a Diesel Tundra if they’re going to compete with Ford, GM, and Dodge. We all know how many more buyers they would attract if they offered a diesel option.

This is exciting news for anyone who’s interested in a diesel Tundra — they should be coming out in 3 or 4 years.