Toyota Admits To Losing Previously Loyal Customers To Tesla

It comes as no surprise that the Tesla Model 3 is impacting Toyota Prius Sales.

Automotive News reminds us that Toyota is a top dog in the automotive industry. The automaker boasts very loyal customers and high profitability. However, at a recent meeting surrounding Lexus facilities upgrades, the company’s future outlook was a critical topic, primarily due to Tesla. This is likely due in part to the fact that Lexus sales were flat in 2018. Moreover, Toyota is seeing increased customer defection. Lexus National Dealer Council outgoing chairman Carl Sewell III said:



We’ve got great product today, but in this type of market, we need to make sure that we’re not only solving one part of the equation, which is sub-$50,000. We’ve got to look for the future, in that more premium luxury utility-vehicle space.



This comment doesn’t seem to be directly related to Tesla or electrification. However, one can easily see that there are concerns about Lexus not reaching the higher-end market or focusing enough on the future. Clearly, the Model S and X are surely not first-rate luxury cars. Still, they fit in a much higher price bracket and are arguably more future-proof than many rivals.

When it comes to Toyota in general, the automaker is seeing an increasing loss of customers. More specifically, Prius owners are moving to the Tesla Model 3. According to Automotive News, Toyota’s defection rate is around nine percent. Interestingly, CEO of Toyota Motor North America Jim Lentz admitted that half of those previously loyal customers are moving to Tesla.

Toyota has already made some plans to negate this. The Prius now comes standard with Toyota Safety Sense. In addition, all-wheel drive is available. Toyota National Dealer Council chairman Dan Abel shared:



They like [technology] advancement, they like state-of-the-art. That vehicle has that, and those are things that draw customers to continue to purchase the vehicle. Then, you add in that new e-all-wheel-drive system, and it makes it even better.



Nonetheless, according to a report by Tesla, the Toyota Prius tops the list of non-Tesla cars that are traded in by Model 3 buyers. It will be interesting to see what the future brings for Toyota.

Source: Automotive News

This article originally appeared on Inside EVs.

 

[TonyPham]

Received a very nice courtesy phone call from Roseville Toyota today & the gentleman kindly offered very "special" sales of Sedans, Trucks and Vans. I said, "Um, thanks, appreciate the call, but going a different direction for a while."

 

[Dre78]

Am I alone in dreaming of Tesla Engineering and Technology built by Toyota?

 

[jboy210]

Am I alone in dreaming of Tesla Engineering and Technology built by Toyota?

History could repeat itself. The Fremont factory was NUMMI, and joint Toyota and GM venture.

 

[HGREY]

Right after I bought my Model S in Aug 2017, I wrote to Lexus corporate brass in Japan and informed them that they had just lost a loyal customer of 13 years due to the lack of even an announcement about a future all electric Lexus vehicle. I know Lexus/Toyota believes that drivers want hybrid technology (and I'm not sure what they're thinking with the Mirai!?) What did I hear back....[crickets, crickets...]

 

[PrGrPa]

Hybrids. 'neither nowt nor summat'.

 

[jboy210]

I could envision Tesla becoming Toyota's premium EV auto brand. Leave Lexus there for ICE/Hybrids and let it die out over time.

 

[scaesare]

History could repeat itself. The Fremont factory was NUMMI, and joint Toyota and GM venture.

More than that... the Rav4 Electric had Tesla guts.

 

[Kandiru]

They are lying of course, their customer base are such herd followers that an EV would look odd.

 

[CarlK]

Am I alone in dreaming of Tesla Engineering and Technology built by Toyota?

Don't get your wishes up. Toyota reliability, or for that matter all Japanese or German if they have that, is build upon doing pretty much same things year after year again. Look at the first gen Lexus RX and the current 4th gen 30 years later how much difference do you see? Even the engine is basically the same.

 

[SMAlset]

Both of our cars prior to our Teslas were Toyotas. After a number of service issues with our cars we ended up really disliking the dealership in our area and we both disliked the styling and new models they came out with, plus no commitment to Apple Play for the longest time (was something I had felt was important to me at that point) and no commitment to BEV. Did not want a hybrid and no way willing to look at a hydrogen car. Despite holding up pretty well, we were more than happy to turn our backs on Toyota and embrace Tesla with our second car a year after our first.

I remember looking at the Model S and Model 3 ordering spreadsheets here while waiting for our deliveries and remember the spreadsheet column on what are you trading in or coming from. Lots of owners with Toyotas listed so I’m not surprised they lost a good chunk of marketshare. Like us, many former Toyota owners also remarked on TMC that their Tesla was the most expensive car purchase they had made. I saw this brought up in an article I read today saying new car buyers were willing to spend more on EV technology over traditional cars. I think many here already saw that trend. Guess that left many manufacturers in the dust with their future model thinking.