Information Network Reports Strong Debut for Tundra
Initial trading patterns for the all-new 2007 Toyota Tundra suggest a strong start for this model in the domestic-dominated large pickup segment, according to real-time retail transaction data from the Power Information Network (PIN), a division of J.D. Power and Associates.
Since the all-new 2007 Toyota Tundra large pickup was launched in early February, owner loyalty for this model, which represents the percentage of Tundra owners who traded for another Tundra, is 53 percent (February only) -- more than twice the January rate of its predecessor and more than 20 percentage points higher than in February of 2006. Additionally, trading from the Tundra to each of the mainstream domestic large pickups (Chevrolet Silverado 1500, Ford F-150, Ram 1500) dropped considerably in February when compared with January, while trading in the reverse direction increased.
Nevertheless, owners of domestic large pickups remained relatively loyal to their vehicles. According to PIN data, both the Silverado 1500 and F-150 experienced owner loyalty increases of 4 percentage points when comparing transactions in February to those in January, while the Ram's owner loyalty remained steady. (Loyalty for the Titan is not included since it has only been on the market for three and one-fourth years.)
The combination of increased Tundra loyalty and steady domestic model loyalty raised the large pickup segment share of industry from 12.4 percent in January to 14.4 percent in February.
"It's still early, and owner loyalty is just one measure of marketplace success, but so far the Tundra seems to be gaining strength in the segment," said Tom Libby, senior director of industry analysis at PIN. "This is an interesting scenario because the impressive strength of the Toyota juggernaut is being pitted against the domestics' long-time stronghold."
The Tundra's owner loyalty rose in February even though it sold at a higher average retail transaction price than any of its direct competitors. The actual retail transaction price for the all-new 2007 Tundra in February was $33,182 -- almost $900 more than the F-150 ($32,312) and $1,450 more than the Silverado 1500 ($31,727). The Ram 1500 ($25,564) and the Titan ($27,664) both sold at prices considerably below the competition.
Four of five large pickup models sold with loans that included an annual percentage rate (APR) between 9 and 11 percent, while the F-150's APR was far below the competition at slightly more than 7 percent. The monthly payment for these models, purchased with a 72-month loan, ranged from $558 to $603.
"New products and stable fuel prices will drive a strong rebound in the large pickup segment in 2007, increasing from 13.5 percent of the total sales market in 2006 to 14.2 percent," said Jeff Schuster, executive director of automotive intelligence at J.D. Power and Associates. "Toyota dove head first into a very competitive segment with a solid entry, and although the model lineup is not yet as robust as the competition, we expect the Tundra to nearly double in volume from 124,508 in 2006 to 210,000 in 2007."
PIN data also indicates that while the national transaction price for the 2007 Tundra was the highest in the competitive set, the Tundra did not sell at the highest price in every region of the country. Specifically, the Tundra commanded the highest transaction price in the Midwest, Southwest and West, but its price was second highest in the Northeast (after the F-150) and third in the Southeast (after the Silverado 1500 and F-150). Additionally, the Tundra's price ranged from a high of $34,394 in the West to a low of $32,796 in the Southwest. Transaction prices in the Southwest for each of the five large pickup models were lower than in any other region, reflecting the fierce competition in large pickups in this particular part of the country.