Toyota mulls lineup change in U.S. market

As Toyota looks at dropping some models with lacklustre U.S. sales, Canadians looking at buying those same models could get side-swiped as a result, according to a top industry analyst.

“When they make changes, it will be North America-wide changes,” auto industry analyst Dennis Desrosiers said of the potential for lineup changes. “With all due respect, we’re a fly speck compared to the U.S.”

A report in the Wall Street Journal quoted the head of operations for Toyota’s North America division as saying that some underperforming models could be dropped from the company’s U.S. menu.

“We are taking a hard look at all the segments we compete in, to make sure we are competing in profitable segments and that products that we sell have strategic value to the brand,” Jim Lentz told the Journal.

Among the models cited were the subcompact Yaris, some Prius models, as well as “niche” products like sports cars.

“From a manufacturing standpoint, we produce top-selling vehicles here in Canada,” said Toyota Canada spokesperson Jennifer Okoeguale. “From a market perspective, we view each market independently and although there are similarities, we take independent decisions on supply. and demand.

“While we can’t comment on what decisions are being made in the U.S., the Yaris will continue to be part of our sales plan here in Canada,” added Okoeguale, noting that Lentz also said the company plans to add 31 models to the Lexus and Toyota brands over the next three years.

“So while some products may be eliminated, others will likely take their place,” Okoeguale said.

But even if a car is selling well in Canada, the relative size of the two markets dictates that what goes for the U.S. goes for Canada, Desrosiers said. In 2017, roughly 2.1million new vehicles were sold in Canada, according to Desrosier. In the U.S. market, most estimates suggest there were more than17 million new vehicles sold last year.

“There are going to be vehicles dropped that disappoint Canadians, or Canadian dealers,” Desrosiers said.

As an example of differing tastes, Desrosiers pointed to the top-selling consumer vehicle category here and south of the border. In Canada, it’s the compact SUV. In the U.S., the biggest draw is the intermediate SUV.

Toyota also manufactures several models in Canada, including some varieties of Corolla, the Lexus RX and RAV4, the latter of which falls into the compact SUV category. While a generation ago the prospect of a vehicle being dropped from production at a given plant would have almost certainly meant the loss of jobs, Desrosiers said that’s highly unlikely to be the case today.

Even if the RAV4 gets dropped — something which Toyota hasn’t said is the case — the Woodstock, Ont. plant which builds it could be retooled to produce different vehicles.

“It’s a relatively flexible plant,” Desrosier said.