The new Hilux is too good for assertive sales techniques so often associated with Toyota, the brand says.
NO DISCOUNTING, no dominance at all costs: Sentiment no-one would surely ever expect to hear from Toyota, a brand that historically likes to win by whatever means – including sweet deals - were uttered at the launch for the latest Hilux.
Comment from the brand’s general manager of sales about the first year strategy for a bedrock vehicle that, in its long-awaited eighth generation is set to account for one fifth of TNZ’s annual sales, was unequivocal.
Discounting from its December 1 public on-sale and through into in 2016 would be selling the new, higher-tech model cheap and if someone else – basically, that’s Ford - beats the market leader to dominance of the one-tonne sector then so be it.
“We are not going to enter the discount war.”
Steve Prangnell’s thoughts came to air when Motoring Network asked him if he considered any other contender in the well-stocked one tonne utility sector, other than the Blue Oval’s Ranger that beat it to No.1 in 2014 – when Hilux was in its ninth year and looking old against the higher-tech, gruntier rival - and should do so again this year, could pose continuing threat to the new generation Toyota.
His quick reply: “I don’t see ANY other ute being a threat.”
Outwardly that might sound like a firm statement of Toyota New Zealand’s intent to re-establish their rig back to sector leadership, the status it held for 32 years until last year’s fall.
A pugnacious approach would be in historic keeping; throughout the last two decades TNZ has played hard to win the market and to dominate as many sectors as possible.
TNZ’s discounting practices to secure fleet and rental business is stuff of legend. No other brand has been able to match, let alone better, their discounting, buy-back and customer support plans. Those assists all came into play for the outgoing Hilux in its final year; though to be fair the truck has performed admirably for a 10-year-old design anyway.
That it has held No.2 in a red hot sector and, at time of writing, was just 1000 units behind Ranger (and still leading in four-wheel-drive count) speaks volumes about the power of the brand and also the market’s enduring respect for the old truck.
That TNZ has provisioned replacement in an unprecedented 21 derivatives – against 12 before – might also suggest it is arming up for a counter-attack designed to knock Ford back a peg or two.
Certainly, the Blue Oval’s model advantage is eradicated. From now on, every Ranger has a Toyota equivalent in spec and in price. The rear-drive sector where Toyota previously had model gaps exploited by Ford now holds nine models, from $36,990 to $54,990, with Ranger HiRider now countered by Hilux PreRunner, considered a crucial weapon.
Before now, Toyota hasn't offered a raised-height rear-drive Hilux at all, nor has it been able to offer a rear-drive diesel version at any altitude with an automatic transmission, despite two-pedal gearboxes now accounting for half of two-wheel-drive one-tonne sales. Those two things alone accounted for an 1100-unit sales deficit to Ranger this year.
There are also a dozen four-wheel-drives, at $51,990 to $70,990. The latter line now cap with a new luxury derivative, the SR5 Limited. It’s also a new thing for Toyota, which has found need to have a fully-loaded flagship variant to act as a kind of SUV-substitute, to match the likes of the Ranger Wildtrak and Holden Colorado Z71.
TNZ admits it could really want the new derivatives with the outgoing Hilux, but couldn’t get them because Toyota Japan froze ongoing development of the old generation 2013.
So now TNZ has the weapons; all carefully configured in single, extra-cab and double cab body formats. The 2.8-litre turbo-diesel four is the main engine, making 123kW/343Nm in rear-drive five-speed manual low-rider models, 130kW/420Nm with the PreRunner and four-wheel-drive six-speed manuals and 130kW/450Nm in PreRunner and four-by-four six-speed automatics. Also offered in a 4.0-litre V6 petrol with 175kW/376Nm in rear and four-wheel-drive, across most body styles.
… and while Prangnell is keen to remind that, if not for product gaps in two-wheel-drive, TNZ would not have lost its crown to Ford, he also seeks to suggest that desire for revenge is tempered.
That’s a big backdown from the fighting talking when this new model was unveiled, as part of a global reveal, to Kiwi press at TNZ headquarters on May 22. Back then Prangnell told this writer that “No.1 is a priority for us in every segment” and “…we’re looking at Hilux being back on top in 2016.”
Now? While he expects Hilux to continue to beat Ranger in the four-wheel-drive sector – where TNZ has never relinquished control - when asked directly if the focus was specifically to outsell Ranger overall, Prangnell replied: “It’s not our game plan. Our game plan is not to watch the competitors.”
Asked if he thought Ford’s Ranger count in 2016 could be higher that the Hilux target for that period, he replied: “I don’t know. They will achieve more than that this year. But I don’t know about 2016... We are not going to watch the scoreboard.”
He agreed TNZ took it hard when Ford won the sector in 2014, but added: “To chase that title at all costs ... to chuck discounts at the car … (makes this) a meaningless title. Because the model will only be one year old.”
The stated sales target for 2016 is 5400 units, a big but not overt reach given that the Ute market is going gangbusters. In 2014 TNZ secured 5784 Hilux registrations, an all-time best for the type though, still not enough to better Ford, which accrued an impressive 6345 Ranger sales.
Ranger has continued to run strong this year – on current trend it seems likely to break 6000 units. At time of writing, Ranger was beating Hilux by almost 1000 units.
TNZ anticipates decline in new vehicle sales in 2016 of at least eight percent but says the Palmerston North based distributor will hold its current market share of 21 percent.
Notwithstanding, the general fallback in sales, the light truck market will continue growth. From 2010 the market for light commercial vehicles such as Hilux has grown by 50 percent, Prangnell says. It’s taking share from sedans and hatches, as buyers move into pick-ups as they have become more car-like to drive and offer better specification and safety features.
The sector is expected to achieve 27,500 sales this year, meaning a 21 percent share of a predicted overall market of 133,000 vehicles. Five years ago, utes looked good with a 15 percent stake (13,600 units) of an 85,000 unit total market.
Says Prangnell: “This new Hilux, with its expanded range, will deliver us sales volume from conquest customers and market segments we haven’t been in before.”
If Ranger continues to dominate next year, TNZ believes Ford will still be worried. While Ranger achieves 60 percent of all Blue Oval sale traffic some months, Ford overall isn’t doing very well vehicle sales-wise. This year it has been the only leading brand to fall back for passenger car registrations, which are 14.5 percent down year on year despite the passenger market being up 5.3 percent, according to Prangnell. Ford, overall, is also two percent down on where it was at this time last year.
TNZ expects to sell 27,000 new passenger and commercial vehicles in 2015, a fourth consecutive sales record and enough to easily maintain overall dominance, but it believe the market will soften in 2016 “based on a saturated new vehicle market, the softening economy due to dairy, weaker GDP growth and a weaker exchange rate that will lead to vehicle prices rising,” Prangnell says. TNZ according believes it will achieve 25,500 sales next year, still enough to comprise their second-highest tally if reached.
Specifically within the Ute sector, TNZ identifies that 90 percent of volume is achieved by double cabs and that won’t change: He reckons 4750 Hiluxes sold next year will be in that format.
Automatic gearboxes also rule; since 2011 more than 30 percent of the market has shifted from manual to auto – the tip is a 60 percent take-up in 2016.
Four-wheel-drive is set to remain a primary choice, with an anticipated take of 3400 sales, rear-drive editions – notably those that have a high ride height to affect an off-roader look, are growing in popularity.
It’s a trend TNZ has responded to with its PreRunner, which has 100mm more ground clearance than standard rear-drive models. There are five PreRunner models, three in automatic and Prangnell reckons these alone can add 1200 annual registrations for Hilux.
When it comes to trim level, he says the workhorse SR and more upmarket SR5 are set to be the big choices.