The upcoming Tercel replacement, due to hit the U.S. market this fall as a '00 model, is the first in a raft of new cars aimed at drawing younger buyers back to Toyota showrooms. If it hits its targets, the high-content, low-priced Echo also could be one of the vehicles that breathes a little more life into the small-car market.
Toyota made its mark in America by cultivating Baby Boomers in the '60s and '70s, first capturing the hearts and dollars of trend-setting West Coasters, then repeating its success nationwide. Its not-so-simple formula was to offer buyers high-value, high-quality small cars, often with clever features that weren't to be found on domestic makes.
That generation continues to provide the basis for much of the automaker's U.S. sales. Typical Toyota buyers - 53% are women - are 46-years old with a median income of $60,000. And they've made Camry a perennial top seller and have driven Toyota to become the No.4 light vehicle brand in the U.S. behind Ford, Chevrolet and Dodge.
But, as most automakers know, the future is youth. And Toyota, not wanting to face the kind of graying of its customer base that the U.S. Big Three have been battling, last September created the Genesis group, a nine-member team chartered with repeating Toyota's Baby Boomer recipe with new generations of "Baby Busters" (born between 1965 and 1979) and Internet-savvy "NetGeners" (1980-1994). Those groups will have spawned 123 million American consumers under the age of 30 by the year 2010 - one-and-a-half times the size of the same group in Western Europe and triple the size of the youth market in Japan, Toyota says.
The Genesis team roster is packed with those same Baby Busters and NetGeners Toyota wants to reach. Genesis head Mark Del Rosso, 34, is the oldest member of the group. On the whole, the team averages 30 years of age, and members come from diverse backgrounds. A couple arrived at Genesis from Toyota management trainee programs, some have marketing backgrounds, and one worked for ESPN, the national sports television network. But all have some key things in common, says Mr. Del Rosso.
"The team is part of our target market," Mr. Del Rosso says. "All of our people are individuals, with strong beliefs. They're all very entrepreneurial."
Research methods used by Genesis team members include an occasional trip to a rock concert to poll younger consumers on vehicle dos and don'ts. "The team is a great resource, in itself," says Mr. Del Rosso. "They're not very shy. They'll go out and talk to people. Everybody likes to talk about their car, what they like, don't like. The guerrilla research has been valuable."
What those buyers are looking for is quality, dependability and reliability - values the automaker believes it built its reputation on. "We were really excited that that was so resonant with post Baby Boomers," says Mr. Del Rosso. "They look at price, value, fuel economy, styling, interior design and room, plus the dealership experience."
And they also pay a lot of attention to image, he adds.
Enter the Echo, the first car from Toyota with Genesis pedigree. Although Echo was well along by the time the marketing group was created, Mr. Del Rosso is promising some interesting Genesis influences in both the car and its marketing.
The Echo, based on the Yaris supermini already on sale in Europe, was shown for the first time at the Detroit auto show in January. Its styling is similar to the Prius electric hybrid sold in Japan, but under the hood is a 108-hp 1.5L twin-cam 4-cyl. with the same variable-valve-timing system employed by Lexus.
The lightweight - less than 2,000 lbs. (907 kg) - car will be offered in both 2- and 4-door body styles. It features a sport/utility-like seating position and a uniquely styled dashboard with center-mounted instrumentation. The car is rife with storage bins and pockets and includes a top-notch audio system - a key feature to the under-30 age group - as standard.
Toyota says the Echo will be priced "substantially below" the Corolla, which bases around $12,300, and its target buyer will be at least a couple of years younger than the Tercel's 35.
"We were very excited to get involved in Echo, even though it was already far along in the pipeline," says Mr. Del Rosso.
Even so, Echo was mildly panned by Britain's Car magazine in March, and it was roughed up in a Detroit News article in January by a panel of high school students during a tour of the Detroit auto show.
"Most have found the car to be futuristic, very much original, very much a complete package," Mr. Del Rosso counters. "It's not one thing people are looking for. It's got great gas mileage, value, great utility."
But a bigger impact from Mr. Del Rosso's group likely will be seen in other upcoming image-building models. A new Celica, based on the XYR concept shown in Detroit is due this fall. And a new 2-seat roadster, shown in concept form in Chicago in February, is slated to hit the U.S. in spring 2000. Both will have some Genesis ingredients.
Longer term, even Genesis may have to reinvent itself to stay in tune with new generations of car buyers, Mr. Del Rosso admits.
"If anyone tells you they have a pulse on the market, they're kidding," he says. "It will be important for us to evolve. So if it means I'm not here a year from now, that's fine. That may be in the best interest of Toyota."
