The new model should demand an average transaction price of about $35,000, up from $31,000 on the current generation, says Bill Fay, group vice president-Div.
Toyota expects Highlander XLE to be volume model.
CARMEL, CA –is hoping the new ’14 Highlander can accomplish several key objectives, including raising the average transaction price of the SUV and improving its appeal to male buyers, a top executive says.
The all-new Highlander, on sale now, boasts new exterior and interior styling meant to deliver a more upscale feel than the outgoing model, says Bill Fay, group vice president-Div.
Fay says the new model should raise the average transaction price from $31,000 currently to about $35,000, which is the average sale price in the Middle CUV segment, as defined by WardsAuto.
“The transaction prices in the segment have gone up quite a bit, with what the () Explorer, ( ) Pathfinder and (Jeep) Grand Cherokee have done,” he says during a recent test drive of the Highlander here. “So we’re looking there, because those are our primary competitors.”
The average-transaction price in the segment, fueled by demand for more premium features, has increased more than $4,000 on average since 2008, Fay says, with the Explorer alone increasing by $8,000 over the same time frame.
The ’14 Highlander will start at $30,075, including an $860 destination charge, and top out at $48,160 for the hybrid model debuting next year. Toyota expects the XLE trim, priced at $36,900, to be the most popular model.
Competitors hover in the same price range as the new Highlander, with the Explorer beginning at $28,495 and topping out at $39,675, and Pathfinder costing between $28,950 and $35,050.
“We have a really good chance with the XLE to offer a better vehicle and more value,” Fay says. “And I think it will improve our sales in that mid-$30,000 transaction-price range.”
The 3-row Highlander will continue to be aimed primarily at young families, but the more aggressive sheetmetal and redesigned interior should go a long way in attracting more males to the model, which currently skews 54% female.
Fay says the automaker expects the new-model split will be closer to 50% male, which will allow better conquest opportunities and help increase volumes.
Last year, Highlander sales totaled 121,055, good for seventh place in the Middle CUV segment, according to WardsAuto data. Through November, deliveries are up 5.0% compared with last year to 115,228, placing the Highlander eighth in its segment.
“I think the overall package, including the looks, are a little more appealing to both genders,” Fay says.
Toyota plans to highlight the upgrades made to the Highlander with a series of marketing campaigns, ranging from social media schemes to a 60-second ad during the Super Bowl broadcast in February.
Fay says there was much internal debate about whether to advertise during the Super Bowl, which costs about $4 million for 30 seconds worth of ad time during the game.
A Super Bowl spot by itself is not worth the investment, Fay says, adding that past experiences advertising during the big game have charted a better path toward maximizing the return on investment.
“If you explore all your opportunities, outside of just running your 30- or 60-second spot, and do a lot of your pre-work and tie in your social media opportunities, you get some advanced buzz and viewings of your spot and create opportunities a week or two before the Super Bowl and after,” he says.