EagleTribune.com, North Andover, MA

Business

March 17, 2013

Toyota deserves credit for innovation

Respect is a hard commodity to come by these days. A lack of respect seems more common than admiration for a job well done. Consider Toyota.

In recent years, the company displaced General Motors from the perch it had occupied for decades as the world’s largest automaker. But while Toyota’s business acumen is held in high regard, their ability to build vehicles is derisively likened to that of an appliance manufacturer. The company rarely gets the credit it deserves for innovation and influence.

The thought occurred to me at the media introduction for the 2013 Toyota RAV4 crossover SUV. When Toyota officials mentioned that the RAV4 is now in its fourth generation, I was stunned. Have there really been four versions? Well, yes.

The RAV4 debuted in 1995 with an SUV body plopped atop the Celica All-Trac platform.

At the time, American automakers were making a mint building SUVs using full-size pickup truck platforms. Given that GM and Ford each typically sold about 1 million pickups annually, using these platforms to create SUVs reduced costs. Considering that pickups and SUVs command higher prices than cars, the profits were, and are, enormous.

Toyota had a vehicle in this space: the 4Runner, a rugged truck, built atop their compact pickup platform. It was a serious off-road warrior, with a high ride height and rough ride. While popular, neither the 4Runner, nor the pickup truck platform it used, sold in the numbers seen by Detroit automakers.

Toyota wanted to tap into this trend, and the profits that came with it. But the company’s high-volume models employed car platforms, not truck platforms. Toyota was able to turn this perceived disadvantage into an advantage.

Like all auto manufacturers, Toyota understood that while the increasing popularity of SUVs came from their rough, go-anywhere-lifestyle image, fewer than 5 percent of buyers ever took their SUVs off-road. Buyers increasingly used them as a replacement for mini-vans and station wagons. Off-road prowess wasn’t needed; nor was the lack of refinement such ability brought with it.

Text Only | Photo Reprints
Business

Financial News
Stocks
Photos of the Week