Why is Toyota Land Cruiser Abandoning America?

Toyota Land Cruiser is one of the longest lasting and widely respected brand in the automobile industry because of its off-road capability, reliability and luxury in modern models.

Toyota Land Cruiser 2020

It has been in continuous production since the 1950s making it the longest selling vehicle in Toyota’s history. Land Cruiser helped Toyota immensely to gain its credibility of manufacturing tough, reliable cars in the time of skeptical buyers. This was actually the first vehicle which Toyota introduced in United States back in 1958. And its safe to say that it is what made Toyota one of the best selling brands in the U.S.


Early version of Land Cruisers were popular for their off-road capability, hardy design while later models became well known for its high end luxury and a family hauler during the 1990s SUV frenzy. But in 2019 Land Cruiser is disappearing from the United States, only selling about one-fifth of vehicles now as compared to its peak demand. There are reports that Toyota will cancel Land Cruiser in the US by 2023. Some people in the automobile industry say that its time that Land Cruiser is finally laid to rest, but others say that what Toyota needs to do it strip it down and go back to its roots of being a tough off-roader.

So, what really happened to LC? Why is Toyota selling so few units in the US when the SUVs are popular and high in demand? How did it go from being a prime offering from Toyota to being an overlooked product?

The Origin of Land Cruiser

Toyota’s truck heritage can be traced back to its earliest days as a company. Toyota Motors was founded in late 1930s by a young businessman named Kiichiro Toyoda who wanted to expand his fabric weaving business which he inherited from his father and to safeguard from uncertainty in the textile industry. He saw the potential in the young but growing automobile industry. He did in-depth study of car makers in those days and made genuine effort to make vehicles. But soon after his plans were hindered by Japan’s involvement in WWII as Toyota became a supplier of vehicles for the military. After the end of war, Toyota made trucks and buses to help with Japan’s restoration.

Toyota Jeep BJ

There was a turning point in 1950 when North Korea invaded South Korea which led to United States ordering 100 four wheel drive trucks with the new Willys Jeep specifications and tasked Toyota to manufacture them. Toyota also bid to supply trucks to the Japanese police, but lost to Mitsubishi who made trucks similar to legendary Willy’s Jeep. After this Toyota improved its own design and launch its first Toyota Jeep or BJ (B series engine, Jeep). To market its capability, Toyota drove this vehicle to the route of a legendary samurai’s climb up Japan’s Mount Otago and Mount Fuji which could only be ventured on horseback. After the changes Toyota made to its model and show off its capability, it won the police contract from the Mitsubishi.

The Name Change

Willys trademarked the name Jeep which forced Toyota to abandon it. Therefore in 1954 Toyota renamed its BJ to Land Cruiser, and shortly after Toyota started delivering it internationally. Land Cruiser was actually the first vehicle Toyota exported to most of the countries. Actually, it was called the Land Cruiser Strategy when going international. Other passenger vehicles were having a hard time competing with Land Cruiser. It became so popular that in 40% of vehicles exported from Japan were Land Cruisers by 1957.

Willy’s Jeep 1942

Land Cruiser in United States

Introduction

Land Cruiser was first introduced in United States in 1958 and in that year it only sold one unit, but it also sold 287 units of its Tokyopet Crown sedans. There were some problem with Crowns, so Land Cruiser ended up being sole vehicle offered by Toyota in the United States from 1961 to 1965. There was little change to the design of the vehicle from 1950s to 1970s. But eventually Toyota did update it, making it more luxurious and full of features while increasing in size. Many of the features offered were similar to other SUVs during the 90s SUV frenzy when people are lining up to buy luxury family SUVs. The SUVs like Cadillac Escalade, Range Rover and Lincoln Navigator were exploding in popularity. This is when peak happened for Land Cruiser in United States. Even with excessive marketing and advertising, the sales declined.


The Downfall

The largest number of Land Cruisers sold by Toyota in United States throughout the history was 16,802 in year 1999. It then only sold 7,591 units in 2001, about half of last year and they fell further from there and is currently in 3000 range. It was not just Land Cruiser but competition was hurting too. Their sales dropped as well. But after years to follow their sales rebounded while Land Cruiser stagnated. For example, Land Rovers and Range Rovers were priced comparatively, but they sold 5,771 in 2001 to 8,549 in 2002,12,086 in 2003, and 13,546 in 2004, that is more than double from 2001.

Land Cruiser sales in United States from 1973 to 2018

In late 2000s SUV sales again suffered because of economic recession and fuel economy. But after the American recovery from recession, people are flocking to buy SUVs and pick-up trucks. There is also increasing demand of cross-over vehicles which is a type of sports utility vehicle with unibody construction. Crossovers are often based on a platform shared with a passenger car; as a result they typically have better interior comfort, a more compliant ride, and superior fuel economy, but less off-road capability than truck-based SUVs.

Land Cruiser vs Range Rover historic sales chart

Demand for high end SUVs have grown along with other vehicles, but Land Cruiser sales haven’t recovered. Partly because Land Cruiser is now in a very competitive market, this isn’t the old days. Especially in high end sports utility vehicles there are endless choices, you can buy Porsche Cayenne. You can even get electrified SUV now, Tesla Model X. The choices are growing with time. If you are really looking for presence, then you can take a Range Rover, sales of which have risen from 7,800 in 2012 to 19,000 in 2018. Land Cruiser only sold a little more than 3,000 vehicles in the same year.

Inhouse Competition

Its not just the other brand competitors, Land Cruiser is facing competition from within Toyota lineup as well. Customers who want a SUV with Toyota reliability can get 4Runner at much lower price tag. If people want three row seats then there are numerous midsize to full size SUVs that offer it at less cost, but also has less off-road capability. Lets be frank here, most people don’t buy SUVs now for its off-road capability, they buy it for the comfort, safety and road presence. Toyota also offers another vehicle under a different badge which is Land Cruiser under the skin. Lexus LX sold 4,753 units in 2018. It is pertinent to mention here that we are talking $90,000 vehicles here and that is starting price. Lexus is a luxury brand from Toyota, so it makes much more sense to buy Land Cruiser under Lexus badge. And that price tag also doesn’t make sense in current market.

Toyota 4Runner 2020

Automakers are under a lot of pressure to keep their products fresh. So, what does Land Cruiser bring to the table? Compare it to other large flagship SUVs. They’re just not competing in the same space because they’ve gone on for so long about a redesign. Toyota also spends little, if any, money marketing the Land Cruiser in the US. This, combined with its high price and declining sales, have led some to argue that it is time to cut the Land Cruiser entirely from Toyota’s U.S. lineup and leave only its Lexus twin. Toyota have given no comments on this report.

International Sales

While Land Cruiser may be cancelled in United States, its still doing pretty well in other countries, especially where people want off-road capable vehicles like in Middle East. Toyota sold 319,200 units in 2018. Its a very popular SUV in UAE, China, Australia, Japan and Russia. In just Australia 42,300 units were sold last year. Land Cruiser is in such high demand in many parts of the world that multiple versions of it are being offered which aren’t even available in U.S. For example, in some countries Toyota still sells 70 series which was initially released in 1984, while in the US people only have one choice of latest model.

Land Cruiser dune bashing in Dubai, UAE

Conclusion

Toyota still has very strong presence in US when it comes to sports utility market. The top seller in midsize SUV is Toyota Tacoma, while its smaller cousin 4Runner sold 139,694 units in 2018. Land Cruiser might go away but Toyota SUVs are here to stay.

Contact the author: gabrielfleming@wheelsjoint.com


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