Hammer Time: The Toyota Reality

Steven Lang
by Steven Lang
hammer time the toyota reality

A quarter century ago, give or take a year, my brother Paul became the first in the family to drive a Toyota. A 1984 Toyota Celica-Supra. It was a true shifting of gears for the Lang Gang. Everyone up to that time had bought a GM. Mom and Dad drove Cadillacs (only one saw 100k). The eldest one had a Monte Carlo (a.k.a. Crapo) that didn’t see the road half the time. Second in line had a Regal (a.k.a. the dying diesel) that ended up stolen and trashed in the Grand Canyon. He actually felt sorry for the Canyon. Within three years both these Roger Smith specials were replaced with 1988 Celica GT’s. Great cars with no nicknames necessary. Three years later I had a Celica GT-S sitting on my driveway. Even better. Still no nicknames. By the end of the decade everyone in the family had a Toyota. But then things changed…

Toyota’s quality took a sharp U-Turn and unintentionally accelerated towards the ‘decontenting’ highway starting in the late-90’s. The 1997 Camry, 1998 Corolla, and pretty much every other Toyota that wasn’t a luxury car or first generation (RAV-4 and Sienna) went straight to the crematorium of cost cutters. “Affordability is the No.1 priority,” said the 1997 Camry chief engineer Kosaku Yamada. “The Camry is not a luxury car.” and so it became the harbinger of things to come.

The fourth generation Camry (1997 – 2001) in fact became number one. Not just by beating the Accord and Taurus. But by crushing them into a fine red mist for its entire model run. This was Toyota’s first truly competitive ‘decontented’ model and the net result was about $1500 to $2000 per vehicle. Multiply that by the nearly 2 million Camrys that went out the door and Toyota had finally found it’s true cash cow. ‘Cost improvement’ instead of ‘decontenting’ became a big part of the Toyota way.

Some of the decontenting was based on the reduction of parts. Front bumper clips and components were reduced from 57 to 15. The doors triple seal rubber in the prior generation gave way to a single seal. Others were a bit more pronounced. The dashboard material felt a bit cheaper compared with the old model. Items that were once power, such as the antenna, became manual. Bulbs became cheaper. The engine bay became a little less ostentatious. The biggest issue though became the increased incidences of engine sludge inside the 2.2L four and 3.0L V6. Toyota would eventually have over 3.5 million engines subject to the settlement. This would be Toyota’s first real black eye on the media front along with 10 safety recalls during this generation’s model run. Judging on the feedback from owner enthusiast sites around the net, the ‘real’ customer satisfaction ratings also started to take a beating.

At the time of the Camry’s release in 1997, still had an ironclad reputation to fall back on. Go to carsurvey.com and look up the Toyotas that came before that time. A 1990 to 1996 ‘anything’ with the name Toyota on it was literally two clicks above anything else save the occasional Civic or Accord. You couldn’t kill these models once you turned the key. Even when my beloved Celica GT-S was hit by a meat truck driven by a drunk Greek, the underpowered engine kept right on ticking away. I’m sure someone’s using that engine somewhere.

But damn were Toyotas expensive before the ‘decontenting’ period. In 1994 I could not get a Camry with ABS to replace the Celica for less than $20,000 retail in my neck of the woods. We’re not talking MSRP…. but retail… before tax, tag and title. I should know because I eventually had to go several states away to find one close to that price. That one has lasted 280k+… but Toyota’s problem was that folks simply didn’t buy on the perception of quality alone. Price, features, and performance were the elixirs for most car buyers of the time. Toyota had flashes of greatness with features (Lexus LS and SC) and performance (Supra). But the big P was where Toyota simply didn’t have it anywhere in their line-up.

Part of the fault was with the Yen. Toyota couldn’t make the big jump from being the ‘quality champion’ to ‘sales champion’ because their cars were just too expensive out the door if they were sourced and built in Japan. Honda offered a smaller and cheaper Accord that was heavily sourced in America by the early-90s. Ford had a Taurus that was corner cut and subsidized by everything from rental car companies to an absurdly ancient powertrain. While Toyota would offer families a $20,000 Camry with ABS. You could far more easily get one from Ford that was $4,000 cheaper… the Accord was $2,000 cheaper. Both of them were well thought of in the marketplace with Honda’s Accord being the retail sales chamption.

Unfortunately for Toyota, that wasn’t even the half of it. The bigger problem was Toyota itself. It was old. As in lifetime employment, perhaps one quarter of their corporate employees hanging out and reading newspapers old. Maryann Keller had written a book pretty much highlighting the fact that Toyota’s bureaucracy was riddled with a conservative and intensely loyal faithful that made ‘The Toyota Way’ front and center. But by the time 1997 reared it’s head, they were pulling down big salaries with little to do.

To make matters worse, Toyota really couldn’t stop spending once it fell in love with an idea. The 1st generation Lexus SC400 was the perfect example of this cost no object approach. Toyota wanted to build a coupe that was completely different from the conventional styles of the time. All curves, no flat edges, no flat surfaces. It was done… but the costs for developing the body stamps and assembly line technologies went well into the mid-hundreds of millions. Throw in the the SC 400’s 4.0 L V8 1UZ-FE engine which reportedly cost over $400 million, and Toyota had a billion dollar financial bomb in it’s hand. Even though the Lexus SC would beloved and sought after by many, few were willing to pay for a luxury coupe whose price would rise from $40k to nearly $60k within a single generation.

The period right up to 1996 represented a very unique point in time for Toyota. They could offer customers a great car. But oftentimes the engineering prowess would simply run roughshod over the financial realities of the marketplace. The same unprofitable fate for the SC would eventually be true for other Toyota models. The eight year run of the pathetically spartan Tercel, the tin can mid-1990’s Toyota Corolla, even arguably the last generation Supra. Toyota simply wasn’t the leader in any particular segment when it came to offering value in the marketplace.

By the late-1990’s Toyota was all too ready to move in a more profitable direction. A shift that would be heavily based on replacing the ‘Q’ word with the $ sign.

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  • Blue adidas Blue adidas on Jan 29, 2010

    Everyone I knew in the early 90s drove either an Integra or Camry. In 1995 I wanted an Integra, but they were in such huge demand that I cound't find one with the right options. So I got a new GTI. Now I don't know anyone who drives either a Camry or any Acura. Both brands seemed so brilliant at the time. But wow. Now Cadillac and Buick are quickly becoming more appealing. The only Japanese brands that seem to be on a good track is Infiniti with their G37 and Subaru with their quirky cars. The plates have really shifted in the last week.

  • ASISEEIT ASISEEIT on Jan 29, 2010

    With the current problem with Toyota's accelerater pedal/ accelerater throttle assembly and the fact they were manufactured in Indiana the problem must be the no-good union labor! Right!? I haven't read any union bashing about this! This isn't normal! Maybe this CTS company isn't union! No that can't be! If they aren't it must be that the union has been trying to unionize CTS and that's what caused the quality problem! Yes that has to be the reason!! It can't be bad engineering design like many of our domestic auto quality problems, it just has to have SOMETHING to do with the union!

  • Jeff S Corey--We know but we still want to give our support to you and let TTAC know that your articles are excellent and better than what the typical articles are.
  • Jeff S A sport utility vehicle or SUV is a car classification that combines elements of road-going passenger cars with features from off-road vehicles, such as raised ground clearance and four-wheel drive.There is no commonly agreed-upon definition of an SUV and usage of the term varies between countries. Thus, it is "a loose term that traditionally covers a broad range of vehicles with four-wheel drive." Some definitions claim that an SUV must be built on a light truck chassis; however, broader definitions consider any vehicle with off-road design features to be an SUV. A [url=https://en.wikipedia.org/wiki/Crossover_(automobile)]crossover SUV[/url] is often defined as an SUV built with a unibody construction (as with passenger cars), however, the designations are increasingly blurred because of the capabilities of the vehicles, the labelling by marketers, and electrification of new models.The predecessors to SUVs date back to military and low-volume models from the late 1930s, and the four-wheel drive station wagons and carryalls that began to be introduced in 1949. The 1984 [url=https://en.wikipedia.org/wiki/Jeep_Cherokee_(XJ)]Jeep Cherokee (XJ)[/url] is considered to be the first SUV in the modern style. Some SUVs produced today use unibody construction; however, in the past, more SUVs used body-on-frame construction. During the late 1990s and early 2000s, the popularity of SUVs greatly increased, often at the expense of the popularity of large [url=https://en.wikipedia.org/wiki/Sedan_(automobile)]sedans[/url] and station wagons.More recently, smaller SUVs, mid-size, and crossovers have become increasingly popular. SUVs are currently the world's largest automotive segment and accounted for 45.9% of the world's passenger car market in 2021. SUVs have been criticized for a variety of environmental and safety-related reasons. They generally have poorer fuel efficiency and require more resources to manufacture than smaller vehicles, contributing more to climate change and environmental degradation. Between 2010 and 2018 SUVs were the second largest contributor to the global increase in carbon emissions worldwide. Their higher center of gravity increases their risk of rollovers. Their larger mass increases their stopping distance, reduces visibility, and increases damage to other road users in collisions. Their higher front-end profile makes them at least twice as likely to kill pedestrians they hit. Additionally, the psychological sense of security they provide influences drivers to drive less cautiously. https://en.wikipedia.org/wiki/Sport_utility_vehicleWith the above definition of SUV any vehicle that is not a pickup truck if it is enclosed, doesn't have a trunk, and is jacked up with bigger tires. If the green activists adhere to this definition of what an SUV is there will be millions of vehicles with flat tires which include HRVs, Rav4s, CRVs, Ford Escapes, Buick Encores, and many of compact and subcompact vehicles. The green movement is going to have to recruit millions of new followers and will be busy flattening millions of tires in the US and across the globe. Might be easier to protest.
  • Sckid213 I actually do agree that most Nissans are ultimately junk. (I also think many BMWs are also). I was talking challenging the 3 in terms of driving dynamics. Agree all were failures in sales.
  • THX1136 More accurately said, we are seeing exponential growth in the manufacturing capabilities in this market. Unless, of course, all those vehicles are sold with customers waiting until more a produced so they can buy. Indeed, there are certainly more EVs being purchased now than back in 2016. Is demand outstripping manufacturing? Maybe or maybe not. I sincerely don't know which is why I ask.
  • ToolGuy The page here (linked in the writeup) is ridiculously stupid https://www.tyreextinguishers.com/how-to-spot-an-suvLike, seriously stupid, e.g., A) Not sure that particular Volvo is killing the planet as quickly as some other vehicles we might choose. B) A Juke is "huge"??? C) The last picture shows a RAV4 Hybrid?
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