Toyota makes a pretty solid car, except for the recent issues with gas pedals and floor mats. Analysts expect the resulting recalls will put a pretty big dent in Tpyota's sales, and I'd agree. If I was considering a new car purchase I'd don't think "fiery crash" would be on my feature list. So who will benefit with a large number of Toyota models suddenly off the market?
The American manufacturers, particularly Ford, are likely to benefit from the problems in the light truck category, with models like the Tundra, Tacoma, Highlander, Sequoia, and RAV4 pulled from dealer lots. Honda may also benefit from this segment of light truck buyers who don't confine themselves to American brands. The majority of truck buyers simply won't consider a such a purchase, considering a foreign truck the antithesis of of the macho truck ethos.
Buyers who were considering an Avalon are in a pickle. The Avalon is the classic frugal old man car. It is for the buyer who won't bring themselves to buy a luxury brand like a Lexus or Infinity, but still want a a plush ride. The new Avalon model is actually a pretty nice car, a big improvement over Avalon's from the early part of the decade. Those early models seemed to be Toyota's interpretation of a late century Oldsmobile or Cadillac ... a couch on wheels with the suspension of a motorboat. Where will these buyers turn now? Possibly to pre-owned luxury brands coming off lease, where the buyer can still feel like the found a good value (these buyers are often more motivated by the sense that they made a smart purchase or got a deal).
What about the Honda Crosstour? Will it benefit from Toyota's mess? I bet it will. Toyota's problems couldn't come at a better time for Honda's strange new model. The Crosstour seeks to create a space in between the sedan and the small SUV (like the BMW X3 of the Lexus RX300). Unlike other designs that have tried to find that space, like the Volvo V90 and the Subaru Outback, the Crosstour is not a tricked out station wagon. Instead it remains much closer to a sedan design, but with a longer, larger rear-end and sportier suspension. Imagine a souped up, four-door sports Accord with a hatchback. I can't really think of anything else like it on the market.
The interior is very plush, which is a smart call. I find the interiors of most crossover SUVs to be cheap compared to the sedans from the same family. The RX300 is a perfect example. The front seats are very flimsy and small, particularly when compared to the seats in the Lexus sedans. If I am going to spend that kind of money on a car I expect a high-end interior. The CrossTour meets that expectation, which will appeal to the Avalon buyer. The Crosstour also drives much more like performance sedan than an SUV. After back-to back test-drives, the Crosstour made the CR-V feel like driving a surplus army jeep. It performed well at slow speeds and when I opened it up on the highway.
The challenging aspect of the Crosstour is the hatchback element. The extra cargo space it creates might appeal to the small SUV buyer, but the driver doesn't sit nearly as high off the road in a Crosstour as they do in a small SUV. Cross the soccer mom off the list of potential buyers. The high, long rear-end limits visibility, which Honda tried to increase by extending the glass down into what would normally be the rear door panel on a hatchback. The extra visibility is a plus, but it is interrupted by a wide, horizontal band which I found distracting. I'm sure it would fade as an issue over time -- you would get used to it -- but new car buyers don't spend much time driving cars before they purchase them, so I'd expect it to be a problem in showroom discussions.
The American manufacturers, particularly Ford, are likely to benefit from the problems in the light truck category, with models like the Tundra, Tacoma, Highlander, Sequoia, and RAV4 pulled from dealer lots. Honda may also benefit from this segment of light truck buyers who don't confine themselves to American brands. The majority of truck buyers simply won't consider a such a purchase, considering a foreign truck the antithesis of of the macho truck ethos.
Buyers who were considering an Avalon are in a pickle. The Avalon is the classic frugal old man car. It is for the buyer who won't bring themselves to buy a luxury brand like a Lexus or Infinity, but still want a a plush ride. The new Avalon model is actually a pretty nice car, a big improvement over Avalon's from the early part of the decade. Those early models seemed to be Toyota's interpretation of a late century Oldsmobile or Cadillac ... a couch on wheels with the suspension of a motorboat. Where will these buyers turn now? Possibly to pre-owned luxury brands coming off lease, where the buyer can still feel like the found a good value (these buyers are often more motivated by the sense that they made a smart purchase or got a deal).
What about the Honda Crosstour? Will it benefit from Toyota's mess? I bet it will. Toyota's problems couldn't come at a better time for Honda's strange new model. The Crosstour seeks to create a space in between the sedan and the small SUV (like the BMW X3 of the Lexus RX300). Unlike other designs that have tried to find that space, like the Volvo V90 and the Subaru Outback, the Crosstour is not a tricked out station wagon. Instead it remains much closer to a sedan design, but with a longer, larger rear-end and sportier suspension. Imagine a souped up, four-door sports Accord with a hatchback. I can't really think of anything else like it on the market.
The interior is very plush, which is a smart call. I find the interiors of most crossover SUVs to be cheap compared to the sedans from the same family. The RX300 is a perfect example. The front seats are very flimsy and small, particularly when compared to the seats in the Lexus sedans. If I am going to spend that kind of money on a car I expect a high-end interior. The CrossTour meets that expectation, which will appeal to the Avalon buyer. The Crosstour also drives much more like performance sedan than an SUV. After back-to back test-drives, the Crosstour made the CR-V feel like driving a surplus army jeep. It performed well at slow speeds and when I opened it up on the highway.
The challenging aspect of the Crosstour is the hatchback element. The extra cargo space it creates might appeal to the small SUV buyer, but the driver doesn't sit nearly as high off the road in a Crosstour as they do in a small SUV. Cross the soccer mom off the list of potential buyers. The high, long rear-end limits visibility, which Honda tried to increase by extending the glass down into what would normally be the rear door panel on a hatchback. The extra visibility is a plus, but it is interrupted by a wide, horizontal band which I found distracting. I'm sure it would fade as an issue over time -- you would get used to it -- but new car buyers don't spend much time driving cars before they purchase them, so I'd expect it to be a problem in showroom discussions.
Very imformative post. You made some great points. I do agree that it might put a dent in Toyota's profits but nothing they cant bounce back from in my opinion. But I also do believe Honda will benefit short term from this.
Posted by: Brent | May 04, 2010 at 09:28 PM
I have to agree with you. I got to talk to some Orange County used car dealers when I visited my uncle in California last week. And it made me rethink of buying a Toyota, though I find my 2010 Toyota Camry a convenience. What I love about it is the spacious cabin, powerful and fuel-efficient optional V6. But the auto dealer showed to me their used 2008 Chevy Cobalt and 2008 Toyota Corolla, both used in a very reasonable price of less than $9,000 and $13,000.
-Javier Cutts
Posted by: Orange County Used Car Dealers | November 15, 2010 at 08:42 PM
I think the Honda Crosstour has an excellent chance of doing well in the market. The design is surely a bit different then what most consumers expect, however cargo space is pretty spacious plus the interior is pretty sweet.
Posted by: Honda Atlanta | February 08, 2011 at 12:12 PM
I agree Honda Atlanta, the interior is well kitted out, and there is plenty of cargo space. But Americans aren't buying all that many. Through November of 2010 Honda hold sold around 25,000 units. That represents more sales than the Element, the CR-Z, and the Insight, but far less than the 40,000 projected for the year.
Posted by: David Lowey | February 08, 2011 at 12:27 PM
Car manufacturers would do well to take advantage of the Toyota recalls and market their own models increasingly. This would allow for a more competitive market, thus leading to better products and services. Toyota might have already resolved the problem. If so, it would likely be looking to take the market again. Other car companies should up their game if they want to hang in with the big guns.
Posted by: Tari Ledsome | January 09, 2012 at 09:15 AM