Toyota Hopes Flex-Fuel Option Will Boost Midwest Tundra Sales

Toyota Motor Sales U.S.A. Inc. is pushing ahead with plans to offer a flex-fuel version of its Tundra fullsize pickup truck.

Besides wanting to make sure “all (our) bases are covered,” Bob Carter, group vice president and general manager-Toyota Div., says a flex-fuel Tundra is especially important to appeal to buyers in the Midwest, who have not typically shopped – much less purchased –Toyotas.

“If you take a look at flex-fuel (a blend of gasoline and ethanol), where is it gaining the most traction? The Midwest is where we’re seeing our strongest sales growth percentage-wise, not volume-wise, (for the Tundra),” Carter tells Ward’s in a recent phone interview.

Sales of Toyota’s fullsize pickup have increased the most on a percentage basis in Illinois and Missouri since the new-generation truck went on sale in February, Carter says.

Toyota in January announced it would offer in late 2008 a flex-fuel option on the ’09 Tundra that runs on E85, a mix of 85% ethanol and 15% gasoline. Carter declines to say whether that plan is still on schedule.

In addition to being a bastion of pickup truck owners, the Midwest also is home to many corn-producing farms. Ethyl alcohol derived from corn is the key ingredient used to formulate ethanol in the U.S.

Illinois has 151 gas stations selling E85, according to the U.S. Dept. of Energy’s Alternative Fuels and Advanced Vehicles Data Center. Minnesota boasts 312 such stations and Missouri has 65.

Toyota offering flex-fuel Tundra for ’09.

Domestic auto makers, particularly General Motors Corp. with its “Live Green, Go Yellow” marketing campaign, have been the biggest proponents of flex-fuel vehicles in the U.S.

GM, Ford Motor Co. and Chrysler LLC say they already have produced a combined 6 million FFVs capable of running on E85 and have pledged to collectively build another 2 million FFVs annually for the U.S. market by 2010, which they call “the single largest commitment to renewable fuels in our nation’s history.”

But, Toyota, known best for its hybrid-electric technology, along with other transplant auto makers – with the exception of Nissan North America Inc., which retails flex-fuel versions of its Titan fullsize pickup and Armada large SUV – have been openly critical of flex-fuel technology.

They contend the most promoted form of ethanol in the U.S., E85, requires more energy to produce than ethanol derived from second-generation cellulosic materials, such as corn stalks, woods and grasses. Scientists in a number of countries are exploring the best methods to produce cellulosic ethanol.

“You look at the land use. You look at water use. It’s a longer-term strategy. What we’re not going to do, in the short-term, is say: ‘Look at us! Aren’t we green?’” Bill Reinhert, national manager-advanced technology group for TMSUSA told Ward’s earlier this year.

“To make a million or 2 million flex-fuel vehicles that run primarily on gasoline is not what we would like (to do).”

The U.S. Dept. of Agriculture’s World Agricultural Supply and Demand report released last week forecast a 100 million bushel drop in corn allotted for ethanol in the U.S. in the 2007-2008 timeframe, citing capacity utilization issues and falling ethanol prices as the reasons.

A gallon of E85 cost $2.23 on Oct. 16, down from $2.41 a month ago and below the $2.76 per gallon for regular unleaded, according to AAA.

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