Toyota enters NASCAR to win new customers

The Toyota name has been part of the broader NASCAR conversation for at least the past several years as the Tundra has competed in the NASCAR Craftsman Truck Series, a racing series that features modified pickups, for the last three seasons. Last year, it won the Manufacturer’s Championship and Drive Championship.

Toyota, which launched a new, larger Tundra for 2007, hopes to take market share from rivals like Chevy’s Silverado, the Dodge Ram and Ford’s F-Series.

“Toyota has been involved in NASCAR for years, but they have been very subtle about it, progressing very cautiously,” Harrison said. “They started out in the truck series, and now they are stepping up to the big leagues, so for the spectators they are not coming in out of left field; they’ve seen this coming for a while, and [Toyota] knows it will be relatively well accepted.”

Global Insight expects Toyota to sell 175,000 of the new full-size Tundras this year out of a total U.S. market of 2.295 million full-size pickups, up from 2.272 million units last year. The bulk of the year-over-year increase is expected to come from Tundra sales and from sales of GM’s new GMT900 truck.

Toyota’s entry into NASCAR comes as it is expected to surpass GM this year as the world’s No. 1 automaker, but the company is showing some small signs of weakness. Sales of its popular Prius hybrid sedan were flat in 2006, prompting the company to offer low-interest loans and lease incentives.

Toyota’s NASCAR entry is also expected to spur Chevy, Ford and Dodge into action. Some are concerned that Toyota’s deep pockets will lead it to spend its way to the top, disrupting the sport’s competitive balance. The Japanese firm has reportedly has invested between $100 million and $200 million in NASCAR and recruited top-name drivers to its stock car racing ranks.

There are already reports of talent jumping ship to Toyota’s racing division. The Big Three reportedly are looking at ways to retain top talent.

“Any time there is new team forming there is the potential to jump ship,” said Global Insight’s Harrison. “Essentially, the influx of Toyota’s budget is putting increased pressure on the existing Big Three NASCAR teams, and that is requiring them to go back to the Big Three automakers for additional support and money. So budgets are under scrutiny. I don’t know that any significant new investment is required in these cases, just simply a fine-tuning of the investments these companies have already been making.”

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