Toyota adds Highlander to expanded SUV lineup

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Here comes yet another sport utility from Toyota--the fifth in its expanded lineup.

Toyota Motor Sales USA's Toyota Division launches the first of three TV spots Feb. 14 for the new Highlander midsize SUV, which gets an estimated $30 million blitz that continues into early summer. The executions from Publicis Groupe's Saatchi & Saatchi, Torrance, Calif., aim to portray the Highlander as "a product that can go outdoors but with comfort and refinement," said Steve Sturm, VP-marketing at Toyota.

The car-like Highlander, built on a Camry platform and similar in size to luxury sibling Lexus' RX300, is targeted at couples in their 40s with one or two children and an annual household income of $75,000.

Mr. Sturm estimated some 30% of buyers will move from a competing mid-size SUV, such as Ford Motor Co.'s Ford Explorer, which is readying the launch of its redone 2002 model this spring. Roughly 10% of Highlander buyers will move up from midsize sedans, such as Toyota's Camry. The marketer expects to sell 75,000 Highlanders this year.

In the first spot, a musher is abandoned by his sled dogs after falling off in the middle of a frozen nowhere. A Highlander pulls up, the window rolls down and a hand presents him with a Starbucks' latte before departing. (Toyota got permission from Starbucks but doesn't plan any broader tie-in.) In another, a family of three with a dog in their Highlander hands a man surrounded by wolves a bag of dog biscuits. "It's nature's way to be rough. It's our way to be smooth" is the line that appears throughout the campaign touting the vehicle's smooth ride. Print broke Feb. 7 in USA Today.

Highlander also will get a major promotion tied with retailer Restoration Hardware, offering SUV buyers in-store gifts.

With the launch of the 2001 Highlander, Toyota now sells almost as many SUV models (five) as car models (seven). Toyota also markets a minivan and two pickups.

Toyota launched its first full-size, eight-seat SUV, the Sequoia, late last year for families with two or three children, priced in the low $30,000 range. Also last fall, the marketer introduced the redesigned affordable, small RAV4 SUV, aimed at singles or younger couples.

The marketer's 4Runner midsize SUV is for sports-minded buyers in their 30s who are drawn to its more rugged, truck-like ride and handling. An optional navigational system is available on the top-of-the-line Land Cruiser.

Won't the new SUVs cannibalize sales of Toyota's existing entries? Mr. Sturm said 4Runner sales could fall by as many as 30,000 units this year, mostly because those buyers really wanted a different sort of SUV that hadn't before been offered by Toyota. Some Camry sedan owners had left Toyota for competitors' SUVs.

Jim Hall, a VP at consultancy AutoPacific, argues Toyota offers seven SUVs, if you include its Lexus division's Land Cruiser-like LX470 and hot-selling, smaller, car-based RX300, that brand's best-selling model. Toyota has covered the entire SUV segment, which has continued to splinter, and "none are in the same segment" competing against each other like some other mass marketers, said Mr. Hall.

Toyota wants its trucks-SUVs, minivans, pickups-to account for 40% of its U.S. sales once all the products are fully launched. The automaker's Toyota and Lexus brands sold 646,491 trucks in the U.S. last year vs. 586,472 in 1999, according to Automotive News. Toyota and Lexus sold a total of 1.6 million cars and trucks last year, a 9.7% increase from 1999's 1.47 million units.

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