Toyota Needs More Discounts for Its Tundra

By: Rain Stockton

The second world largest automaker and producer of high quality , Toyota Motor Corp. according to its North American President needs to discount the Tundra truck to reach its goal of doubling its US share for large pickups.

Jim Press of Toyota Motor North America said in an interview with New York Today, "Incentives for us are not strategic, they are tactical. In the dealer-transaction price game, where the competitors really set the stage with their incentive activity, it drives us to the point where we recognize that incentives are part of this market."

The Japanese automaker last June has began giving discount reaching as much as $3,500 for the 2007 Tundra that is four months after the truck was release for sale. Tundra's list prices range from $22,290 to $41,850. Edmunds.com has estimated that the average Tundra incentive that Toyota has given last month reaches $5,083 which is more than from what GM and Ford has offered for their large pickups.

The revamped Tundra that was built in San Antonio was made even bigger and more powerful than its predecessor and for the very first time Toyota will be directly competing with Ford's F-Series and GM's Chevrolet Silverado trucks. The Tundra US sales have increase by 44 percent to 82,840 in the first half of this year that is despite the fact that the industry-wide total for large pickups fell by 3.1 percent.

According to John Casesa, managing partner of Casesa Strategic Advisors LLC in New York, the size of incentives given for the Tundra is quite unusual for any new Toyota product. He also added, "To some extent they are really struggling with Tundra, and domestic companies are fighting back ferociously."

Last June, the average Tundra price or the price which customers actually pay including incentives has reached $33,605 according to Edmunds.com. The Santa Monica, California-based company also added that the average price for Ford's F-150s was $29,657 while for GM's Silverado 1500s its $29,151.

As usual the increasing gasoline prices was blamed for the slow sales of the trucks but Press assured that consumer demand for pick-ups will not fade for long. He added, "Fuel prices will not substantially change the dynamics and the size of the market, but they will require product attributes that respond more to the environment of higher gas prices or greenhouse-gas concerns or environmental needs."

Press further added, Toyota is selling "about double the volume of the last- generation Tundra in terms of where we were last year, in a segment that's down. We're right on our target. Long term, it's a segment we really need to be in to continue to grow with our customers as they come into our product line."

It can also be noted that for the first quarter of this year Toyota has beaten GM in terms of sales volume which simply shows the increasing demand for Toyota products in the world.

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