Young guns

Toyota, which wooed youthful Baby Boomers way back when, is now going after their kids and grandkids with a freshened-up entry-level sedan and an all-new crossover utility vehicle (CUV), both debuting this month at dealerships as 2003 models.

They'll share the Corolla name and a new platform. But the Corolla sedan and Corolla Matrix CUV will sport different looks and appeal to different segments of the coveted youth market.

It's a market that Toyota product planners admit they've neglected in recent years.

“We took our eye off the ball,” says Irving A. Miller, a group vice president at Toyota Motor Sales USA Inc. “We captured the Baby Boomers years ago and kept them as customers. We've got to do that with Generation X and Y. They're a huge market. We're thinking 10 years up.”

The Corolla sedan is the ninth generation of a small car that's sold 25 million units worldwide since debuting in Japan in 1966 and two years later in the U.S.

The median age of the current Corolla buyer is 44. That's three years older than the segment average and five years older than the segment-leader, Honda Civic.

“We'd be thrilled for Corolla to have the youngest buyer demographic in the segment. But that would still give us a 38-year-old buyer,” says David Terai, assistant chief engineer for Toyota Motor Corp.

He adds, “What was needed was a second vehicle, a new concept in cool for everyone too young and too hip for the Corolla sedan.”

That's why the Matrix is making the scene.

It's designed to blend the functionality of an SUV with the style and image of a little sports car, says Terai.

The angular-looking Matrix and its competitor cousin, the Pontiac Vibe, enter a rapidly expanding crossover segment as vehicles that look like an SUV and drive like a car. CUVs are the only truly hot segment in the market today. Market share has gone from 2.3% in 2000 to 5.7% in 2001. By comparison, the small car segment dropped from 14.1% to 13.9% in the same period.

Both the Matrix and Vibe are also influenced by the sport compact car phenomenon that's swept the West Coast and the South. Toyota's Newport Beach, CA design studio styled the Matrix.

The designers' theme for the Matrix was “street performance utility.” Their assignment was to render a sporty new take on the basic SUV configuration of four doors and a hatch. Sort of like a new rendition of that granddaddy of vehicles — the station wagon.

The Matrix is designed to appeal to what Terai calls “the most heavily pursued buyer on the planet”: members of the youth set who are “easily identified but tough to win over.”

The Matrix comes in three grade levels, Standard, XR and XRS sport model with a high performance 1.8-liter four-cylinder 180-hp engine and various standard equipment such as ABS brakes and 16-inch aluminum alloy wheels.

Toyota redesigned its Corolla sedan because the arena in which it competes has changed dramatically, especially in the U.S.

It's a segment with 23 small-car entries. It's a segment that is driven by a new wave of stylish and well-equipped models with up-market features, larger dimensions and lower prices, says Takeshi Yoshida, chief engineer at Toyota Motor Corp.

“It is a segment in which profits are small and market incentives are the norm,” he says. “It is also a segment in which Corolla no longer leads the class in value, image and owner loyalty.”

The Corolla's styling is more muscular and upscale. It's larger and heavier, and a bit faster with a 1.8-liter engine with 130 hp, up 5 hp from the previous generation Corolla. The same engine is in the Matrix Standard and XR.

Toyota expects to produce 225,000 new Corollas for the North American market. Half will be built at the GM-Toyota NUMMI plant in Fremont, CA, the same factory that's making the Pontiac Vibe. The other half of Corolla sedan production will be at Toyota's plant in Cambridge, Ontario, Canada.

Toyota will produce about 70,000 to 75,000 Matrixes in 2002. The Cambridge plant is building those.

“We are often asked why we bother with small cars, since the market is so tough and the profits are so small,” says Terai. “The answer is that small cars are the seeds of brand loyalty. If we can attract young buyers early, we can retain them for life.”

Dealer Mike Fox agrees.

“You can't plant those seeds early enough,” says Fox, who owns a Toyota store in Rochester Hills, MI. “The Corolla and the Matrix speak to young buyers.”

He adds, “The funny thing about Toyota is that they make the best vehicles but they are a little devoid of appealing to the youth market.

“The old Corolla's price point might have appealed to young buyers. But the car itself didn't. The new Corolla looks refreshing and the Matrix will strike a unique chord.

“Now it's up to Toyota to market them well.”