Toyota wants to win in pickups

February 8, 2013, 9:24 PM UTC

By Doron Levin, contributor

FORTUNE — One of Toyota Motor Corp.’s rare miscalculations in the U.S. was in full-size pickups, a category dominated by General Motors Co., Ford Motor Co. and less so by Chrysler’s Ram.

But Toyota (TM), an also-ran, isn’t giving up. Exhibit A: a new-generation Tundra pickup shown on February 8 at the Chicago Auto Show. The Tundra’s exterior has been made more stylish and aggressive. The model will offer new features, such as a blind-spot monitor.

The Japan-based automaker was convinced it could capture a much bigger hunk of the segment when it opened a new assembly plant in San Antonio, Texas in 2007. Instead, the financial crisis depressed the entire automotive sector, pickups bearing the brunt of a slowdown in construction activity.

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Most significantly, owners of Ford (F) and Chevrolet (GM) pickups proved stubbornly loyal to their brand when trading for a new truck. The opposite had happened when so many buyers preferred Camrys and Corollas to their Detroit-made sedans. It’s “much harder than we thought,” said Yoshi Inaba, a senior Toyota executive in charge of U.S. operations. “Ford and Chevrolet really saw pickups as the core of their business.”

Toyota will offer the truck in five trim levels, the least expensive aimed at the person who primarily is searching for a work truck. The priciest trim will be the “1794” edition, a truck for fashionistas, named in honor of the year the ranch was founded that became the site of the San Antonio factory.

The most basic model of the 2013 Tundra starts at $25,455.

“They [Ford and Chevrolet owners] are loyal, I can say that,” said Dave Illingworth Jr., a former Toyota executive who now is a Toyota dealer in Warsaw, Ind. “It’s not as easy as it looked” to win over new buyers, he said.

GM just showed its latest generation of the Chevrolet Silverado fullsize pickup — and Ford will offer a new one next year. Fullsize pickups have consistently been Detroit’s biggest moneymaker, regarded by many as the crown jewel of the domestic automotive industry. The big pickup is sold nowhere in the world except the U.S.

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Illingworth said about 30% of the buyers of Tundra actually use them for some work-related purpose, the remainder because they like the style, size, and personality of the vehicle. “I suspect the proportion is the opposite for Ford and Chevy,” he said. In other words: Ford and Chevrolet remain the most popular among those who need a truck for work: farmers, carpenters, masons, plumbers, ranchers.

The U.S. market for fullsize pickup trucks collapsed in 2009 to 1.1 million units, recovering last year to 1.6 million. Toyota expects the market to recover to 1.8 million units in the next few years.

The silver lining in Toyota’s truck strategy for the U.S. has been its compact truck, Tacoma, the leader in the segment. Chevrolet and Ford, once dominant in the segment, have retreated, with Tacoma now the leader. To ensure that the San Antonio plant wasn’t underutilized, Toyota builds Tacoma and Tundra on the line that was anticipated to be for Tundra alone. “We’re at full capacity,” Inaba said.

Many analysts expected that San Antonio would quickly double in size, from an annual truckmaking capacity of 250,000 to 500,000. That’s not to say San Antonio won’t expand — especially if the new Tundra finds a way to expand sales from its current 100,000 or so annually.