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Toyota and the 2017-2020 Bank of America Merrill Lynch Car Wars report

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Every year since 1991, Bank of America’s Merrill Lynch corporate and investment banking division puts together their Car Wars study that assesses the relative strength of each automaker’s product pipeline in the US. Most commentary articles out there tend to fixate on the study’s broad conclusions that X, Y or Z carmaker should see its market share grow, decline or remain flat depending on the strength or weakness of its new model or new generation of existing model launch pipeline 4 years out. “Buried” in the study itself is an actual list of those expected new launches. We recently discussed and analyzed their predictions for the Lexus brand thru the 2020 model year. Here, we’ll comment on what they expect from the Toyota brand itself. Rather than repeat ourselves, we refer you to the first 6 paragraphs of our Lexus article for a summary Bank of America Merrill Lynch’s mission statement and ground rules.

What does bear repeating, however, are Michael Karesh of True Delta‘s observations:

(A)re these predictions accurate? Those made in the same report two years ago have turned out to be overly optimistic, with many launches actually happening a year or two later than predicted. For example, none of the predictions made two years ago for Toyota for the 2017 and 2018 model years remain in the new report. This probably isn’t entirely or even mostly the analysts’ fault. Programs get delayed and even canceled all the time.

My prediction based on the outcome of these past predictions: that huge surge for 2019 and 2020 won’t happen, at least not in 2019 and 2020. Many of the launches currently predicted for 2019 and 2020 will instead happen in 2021 and 2022, if ever.

Indeed, comparing the 2015 and 2016 BOA/ML Car Wars reports shows that half of their 2015 Toyota predictions were pushed back by a model year or two in their 2016 followup.

2017-Toyota-C-HR-45As with their Lexus predictions, the latest Car Wars report errs in pencilling in Toyota’s newest line expansion – the lower C-segment Nissan Juke-rivaling C-HR crossover – for a 2017 model year introduction. 2017 will be a year of mid-cycle refreshes and rebadges with the winding down of the Scion brand, but nothing all-new for either brand. A Toyota USA news release unequivocally states that

The U.S. production version of the C-HR will be shown later this year and the vehicle will go on sale in spring 2017 as a 2018 model.

We do know that it will be the second Toyota (after the 4th-gen/XW50 Prius) to utilize the TNGA (Toyota New Global Architecture) modular platform. Given initial plans to market C-HR as a Scion and that brand’s non-hybrid focus, the Toyota C-HR is expected to launch in North America solely with a 2-liter 4-cylinder engine (most likely the 1986cc Valvematic-endowed 3ZR-FAE). Said powerplant is available in Japan-spec C-HRs solely in conjunction with front-wheel-drive and a CVT (continuously variable transmission). An all-wheel-drive option would probably be considered de rigueur for North America, however, and the fact that all Scions bar the iQ were offered with a manual transmission gives us hope this might be a C-HR option there as well. Now that it’s badged as a Toyota in North America, the likelihood of a C-HR Hybrid with the latest Prius powertrain (as offered in other markets) is much stronger, but don’t expect to see it until some time after the initial gasoline-only launch.

Rivalling – if not exceeding – the C-HR in significance is another major 2018 MODEL YEAR launch, the 8th generation (outside Japan) of the mid-size D-segment Camry sedan. Not much has been predicted on what is still Toyota’s best-selling model in the United States. It is widely expected to join XW50 Prius and C-HR on the TNGA platform (sometimes referred to as NGA-C in this particular iteration), but a couple of basic, rhetorical questions need to be addressed. For one, will the “regular” Camry for North America / “prestige” Camry for Asia dichotomy (with both available in Australia) continue? Or will there be a convergence of the two Camrys? Will Camry remain hybrid-only in Japan? (We think so). Speaking of Australia, the 2017 end of Camry production there (and, with it, the end of Australian car production in general) begs the question of whether 8th-gen/XV60 Camrys for that market will be sourced from the United States, Japan, or one of the other Asian Camry assemblers (Thailand chief among them).

2012-toyota-ns4-plug-in-hybrid-concept_100376985_mIn North America, the bigger question is what powertrain strategy will the 8th-gen/XV60 Camry use. Carmakers’ strategies there are split. The Japanese big 3 (Toyota, Nissan and Honda) plus Chrysler and Volkswagen persist with the traditional 4-cylinder base / V6 optional (all naturally aspirated) strategy, while the rest of their Korean, Japanese and American rivals have gone with a plethora of 4-cylinder-only options, many of them turbocharged to fill the previous V6 role. A good number of pundits predict that Toyota will follow the latter strategy with the new Camry, thus reserving the 2GR-FE (or its 2GR-FKS successor) 3.5-liter V6 for the larger Avalon sedan. This scenario suggests the continuation of the 2AR-FE 2.5-liter 4-cylinder as the base engine (unless Toyota surprises us with added dual Atkinson/Otto cycle, direct injection or expanded VVT-i capabilities) and the first Toyota-branded application outside Japan of the 8AR-FTS 2-liter 4-cylinder turbocharged engine. Hopefully, non-hybrid Camrys will retain torque-converter automatic transaxles, as opposed to the dreaded CVTs some rumors suggest. If so, an upgrade from the current Aisin-sourced U760E 6-speed to the U881E 8-speed from the latest Lexus RX 350 is possible (fingers crossed…)

Speaking of hybrids, we’d be surprised if the XV60 Camry Hybrid powertrain diverged much from the current 2.5-liter 4-cylinder 2AR-FXE engine / P311 CVT transaxle combo. But with Ford Fusion, Hyundai Sonata and, soon, Kia Optima plug-in hybrids available, can we expect a plug-in Camry Prime? Automotive News’ David Undercoffler suggests this is definitely a possibility.

Expect the 8th-gen Camry to see a traditional late summer 2017 unveiling, with production following shortly thereafter. And styling? Here’s hoping Toyota looks to the NS4 concept sedan shown above right for inspiration, as opposed to some of its recent overwrought excesses.

2014-toyota-4runner-trail-rear-badgejpgThe other 2018 model year launch predicted by BOA/ML Car Wars is the 6th generation of the traditional body-on-frame mid-sized SUV 4Runner. Pushed back a year versus the Car Wars 2015 report, the 4Runner has defied logic and expectations with annual U.S. sales rising from 46,531 in 2010 to more than twice that number (97,034) in 2015. And the 2016 year-to-date numbers are running 21.2% higher than the same period last year, an increase second only to its big brother Land Cruiser among Toyota-branded cars sold in the U.S. Thus, Toyota would be foolish to tamper with this popular winning formula. We do expect, however, for the next 4Runner to utilize the 2GR-FKS 3.5-liter V6 that made its Toyota-branded debut in the Tacoma pickup truck. As with Camry, we predict a traditional fall debut, possibly echoing its predecessor’s first reveal at the Texas State Fair on 24 September 2009.

Car Wars 2016 expects a quintet of all-new 2019 MODEL YEAR Toyotas. Starting with the bottom of the lineup is the third iteration of a Yaris-branded subcompact. Which Yaris we’ll get (not to mention when) is an open question. In 2015 Car Wars predicted a 2017 model year launch, but we wonder if an in-between 2018 model year debut makes more sense for this B-segment stalwart. Automotive News’ David Undercoffler suggests

…a redesign for the 2018 or 2019 model year. At that point, it will switch to a smaller version of Toyota’s TNGA modular platform — dubbed NGA-B — and finally dump the 1.5-liter four-cylinder that has been around since 2000 in favor of a more modern iteration of the engine.

Yaris-Logo-1810x1280This assumes, however, that we’ll continue getting the Euro-centric, French-built Yaris closely related to Japan’s Toyota Vitz. Here it’s worth noting that Yaris is beginning to rival Corolla in the bewilderingly different vehicles wearing that badge. Besides the aforementioned Euro/Japan Yaris/Vitz, there’s the so-called “Southeast Asian” Yaris that is simpler and more angular than the Euro Yaris but still a solid step up from the EFC (Emerging markets Frontier Concept) platform Etios. Meanwhile, even as the Southeast Asian Yaris makes its way to some South American markets, North America’s newest Yaris sedans are renosed and rebadged Mazda2s built in Salamanca, Guanajuato, Mexico.

Forgive the tangent we’re going off here, but some Mazda2 background is worth noting. The 4th (DJ) generation of Mazda’s B-segment model was launched in late 2014 in 4-door hatchback (built in Japan, Thailand and Mexico) and 4-door sedan (all Thai-built) guises. Mid-2015 saw the release of a third Mexico-built model: a larger-grilled, Toyota Yaris (or Scion iA)-badged version of the Mazda2 sedan. Meanwhile, plans to offer the Mazda2 hatchback in the United States and Canada were cancelled literally at the 11th hour, after going as far as revealing U.S. EPA fuel economy figures and touting its North American debut at the January 2015 Montréal Auto Show. Most accounts suggest that Mazda simply decided that it wasn’t worth expending meager marketing and corporate resources on such a low-margin vehicle in a declining segment. Better to instead further promote the far more profitable and popular CX-3 small crossover.

The much larger Toyota, on the other hand, still needs to offer an entry-level B-segment hatchback to help with U.S. Corporate Average Fuel Economy (CAFE) numbers, if nothing else. Thus, it seems far more logical and profitable to create a fourth Mexican-built Mazda2 variant: a Toyota-nosed and Yaris-badged hatchback to both complement the sedan and replace the aging and surely less bankable current Euro Yaris. When will this happen? Perhaps when all the stars align in that Toyota Europe replaces the current Yaris with an all-new NGA-B platform version and the Mazda2 sees its mid-life facelift.

261335917841 _Last year, Car Wars predicted a 2017 model year debut for the 4th generation of the Toyota Sienna minivan. This year, its premiere has been pushed back 2 whole model years, to 2019. But why? A clue appears in a seemingly throwaway line in the Toyota USA news release detailing the Highlander crossover’s upcoming mid-life facelift:

In addition to Highlander, the new Direct Shift 8AT (automatic transmission) and 3.5-liter V6 Direct Injection Engine powertrain will be equipped in the 2017 model year Toyota Sienna van.

In other words, the powertrain upgrade from the 2GR-FE port injection-only 3.5-liter V6 and U660 6-speed automatic transaxle combo to the 2GR-FKS 3.5 V6 with dual cycle, dual direct + port injection and VVT-iW for the intake cams and U881 8-speed automatic that first appeared on the 4th generation (AL20) Lexus RX 350 will soon make its way to Toyota’s Highlander and Sienna. And that, in turn, implies not an all-new generation but a second mid-life refresh for Sienna akin to those applied to the 2nd-generation Lexus IS, 3rd-gen Toyota Avalon and 2nd-gen Toyota Tundra. With Chrysler just launching its all-new Pacifica minivan (including a plug-in hybrid version) and a new 5th generation Honda Odyssey expected this fall, the Sienna may well have a tough couple of years ahead of it. For now, its status as the only minivan offering an all-wheel-drive may help in colder climes, but AWD is rumored as a possibility for the new Odyssey as well.

8835_st2400_139Toyota’s largest sedan in North America, the Avalon should see its 5th generation for the traditional autumn 2018 start of the 2019 model year, marching in lockstep with its more luxurious Lexus ES sibling’s 7th generation. Expect an evolution of the current model, but with the upgraded 2GR-FKS 3.5-liter V6 / U881 8-speed automatic combo discussed earlier making an appearance here as well. One possible concern here is that, in the current model, the swoopy, Audi A7-inspired styling, while undeniably attractive, also led it to be pushed out of the U.S. EPA Large Car class it nominally competes in. Perhaps the next Avalon may better balance competing aesthetic and full-size interior demands.

toyota-rav4-logoNone other than Toyota USA’s senior vice president of automotive sales operations Bob Carter predicted that by December 2020 the RAV4 would outsell the Camry sedan. It’s certainly on its way, as it has become the top-selling small SUV/crossover in the United States for the past 6 months. Late summer/early fall 2018 should see the introduction of the 5th-generation (XA50) RAV4. A migration to the TNGA platform is a given, and powertrains for North America will likely mirror those discussed for the 8th-gen Camry in the 10th and 11th paragraph of this story, including the high likelihood of a CVT replacing the current torque-converter automatic transaxle.

The 3rd-gen RAV4 was a pioneer in offering a 3rd-row seating option in a C-segment crossover, an option then only copied by Mitsubishi’s Outlander. Just as Toyota abandoned the third row seat for the current 4th-gen RAV4, however, Nissan offered the extra seating option in its hot-selling Rogue archrival, and persistent rumors suggest that Honda will do the same in the upcoming 5th-gen CR-V. Should Toyota revisit the possibility of offering a 3rd-row version of the next RAV4? We certainly think so…

2015-toyota-tundra-logoThe final 2019 model year Toyota introduction predicted by Car Wars is the waaay overdue introduction of the 3rd-generation Tundra full-sized pickup truck. Among the glaring deficiencies in the current Tundra lineup is the lack of a heavy-duty or even Nissan Titan-like “extra-duty” variant. Rumors of a 5-liter V8 Cummins turbo diesel option date back to at least 2014, if not earlier.

A gasoline-electric hybrid Tundra would seem to be a natural, but the road to hybridization in pickup trucks has been a rocky one. Hybrid versions of General Motors’ Chevy Silverado and GMC Sierra have been a marginal on again-off again proposition, with their latest 2016 model year initiative calling for the California-only sale of 500 Silverados and 200 Sierras equipped with a mild-hybrid eAssist system. Ford and Toyota announced grand plans to collaborate on RWD hybrid truck systems back in 2011, only to cancel them almost 2 years later. Yet, Ford has vowed to produce a RWD conventional hybrid version of their F-150 pickup by the end of 2020. And Toyota? David Undercoffler of Automotive News suggests they could offer a plug-in hybrid version of the next Tundra.

2014-Toyota-Corolla-S-badgeFollowing on the preceding quintet, the 2016 Car Wars report predicts a quartet of all-new Toyota lines for the 2020 MODEL YEAR, The first and most significant of these – bumped back a year from the 2015 Car Wars report – is the 12th-generation Corolla. Like Yaris, the Corolla badge adorns a hodgepodge of different sized – and even different platform – models throughout the world. If current patterns continue, however, we only need to concern ourselves in North America with two of those variants: the so-called larger “International Corolla” sedan (or Corolla Altis in many Asian countries) and the 5-door hatchback version of the Auris. The 3rd generation of the latter may appear as soon as the 2018 Paris Motor Show, and pundits predict a 2019 calendar year debut for the new Corolla sedan. A change to the TNGA-C platform is a given.

5992_st2400_139Unless Toyota pulls an unexpected Sienna-like delay, a 4th generation of the Highlander midsize crossover SUV should be the second 2020MY premiere. A move to the TNGA platform is a given.

The 2016 Car Wars report predicts a 2020 model year launch for the newest (so-called J300) version of the large Land Cruiser, closely aligned with the 4th-generation Lexus LX. Other pundits beg to differ, however. Lexus Enthusiast forums member Carmaker1 suggests that

The Land Cruiser 300 will probably be shown during the second half of (2017), with sales starting in 2018…The Lexus LX might go its separate ways, as the Land Cruiser 200 was given minimal updates by comparison and has a successor already signed-off.

toyota-land-cruiser-chrome-badgeAnd David Undercoffler of Automotive News believes that a redesign is in the cards for 2017 (calendar year, presumably).

The fourth and final prediction is for a third generation of the aging and seemingly abandoned Sequoia full-size SUV. Some pundits remain skeptical that the Sequoia will live that long, but Automotive News’ David Undercoffler states that

Although it’s a perennially slow seller and a drag on Toyota’s corporate average fuel economy, don’t count the full-size, body-on-frame Sequoia out just yet. Look for a redesigned model to return a year after the next Tundra…

9125_st1280_139Perhaps the rumored plug-in hybrid Tundra, and that powertrain’s extension to the Sequoia makes the notion of a new generation a more viable one. And, if this indeed happens, we’d imagine a manufacturing move from Princeton, Indiana to San Antonio, Texas alongside Tundra and Tacoma pickup trucks would make all the sense in the world.

Other comments and possible omissions
Given the breadth of Toyota’s North American lineup, it’s to be expected that there would be a few omissions in the 2016 BOA/ML Car Wars report. Given their 2016 model year introduction, the Mirai fuel cell sedan and the latest iterations of the Tacoma mid-sized pickup truck and Prius midsize hybrid hatchback’s absences are to be expected. But what of the other Prius family siblings? David Undercoffler of Automotive News suggests a 2018 model year debut for the second generation of the plus-size Prius v. Makes sense, with a 2016MY debut for the 4th-gen Prius followed by the 2017MY Prius Prime plug-in hybrid. With the new Prius’ expanded use of more compact lithium-ion batteries, we hope that the third seat option offered in Japanese and European market versions of Prius v finally makes it to North America. As to the smaller, B-segment Prius c hatchback, Automotive News expects a redesign in 2018 and a switch to the TNGA-B platform.

Then there is the question of Toyota’s sports cars. The latest Car Wars report remains silent on the 86 coupe, but suggests that its Subaru BRZ near-identical twin will be all-new for the 2019 model year. Automotive News concurs, suggesting a 2018 calendar year debut. And for those pundits worried about the future of the Toyobaru coupe, a late May 2016 Nikkei report suggests a deepening of Subaru’s product development partnership with Toyota, including discussions of the development of second-generation models for the Toyota 86 and Subaru BRZ sports cars. Given past history, however, don’t be surprised if this slips back to the 2020 model year.

As to Toyota’s bigger sports car, the long-rumored Supra revival, Automotive News suggests a 2017 reveal. There’s some logic to that, given that 2017 is an odd-numbered year with major autumn auto shows in both Germany (home country to development partner BMW) and Japan (for Toyota’s home crowd). But will Frankfurt and Tokyo premiere the actual BMW Z4 (or Z5) and Toyota Supra Mk V production models? Or just teaser concepts to prolong the suspense and agonizing wait? The next year-and-a-half will tell…

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