Why I believe the 4Runner line will die in 2023.

Now I want a rear view mirror on my fender. When I’m done, I’ll do a write-up for you fellas.

 

I think the OP is giving us a prime real world case of “correlation does not equal causation”

It my very well be that his dealership sells 10 corollas for every 4Runner. But what he is missing is that the one 4R may generate more profit margin than all those Corolla’s combined.

Corrolas sit on lots. Pre-pandemic you could get one below invoice, with zero % financing, and if you wanted silver they probably had 5 silver ones you could hand pick from. 4Runners had waiting lists even back then, and Pros sold over MSRP even before things got nutty.

This is true in most retail industries. The cheap models trade on sales volume and the small number of premium options carry the biggest per unit margins.

 

I wonder how this works with Toyota and the dealerships......because Toyota is not selling you a car, they are selling the dealership a car. And the price that the dealership sells those cars for may or may not always reflect the price that they bought the car for.

Fun fact: a lot of dealerships sell new cars at a loss because it supports the rest of the business that makes money (used cars, parts, and service departments). The last couple of years have been the exception though with chip shortages, supply chain issues, and inflation. This has allowed dealers to be in the black with new car sales compared to previous years.

So is a 4Runner (or Corolla) always the same price to the dealer or does Toyota sell them at "sale" prices at times?

 

I’ve been trying since late 2019 to get a T4R OR. Very difficult to find. Monitoring 5 dealership in 300 mile radius of me and most are already sold before even arrive to dealership and the ones that end up being available have ridiculous markup’s but still get sold within a few weeks.

Used ones in my area sell fast and are being bought for almost new prices.

The dealership in my town says 6-9 month wait and non-refundable deposit must be put down.

only now in 2023 do I finally have a 4Runner for me. An ORP with added options I don’t want and a mandatory dealership add on Package. It’s sitting at port in Long Beach waiting to clear customs. maybe in 2 week’s I’ll have it in hand.

Hard to believe people aren’t wanting 4Runners.

 

Not sure which dealerships you’re referring to, but I haven’t seen that after working in the industry. Front end (car sales) is expected to make money, either high volume low margin, or high margin low volume. Plus hit sales target volumes to get brand bonus incentives and allocation. True that the back end makes more profit, but a good running front end makes margin per unit and then more money in the box / F&I, and parts for accessory add on at full pop … also driving more dollars to the shop for PDI and accessory installs.

 

Those Yaris sales #'s are US market....Think globally....

Yaris sold 211K units in Europe alone in 2019. And if you go to Asia, trust me they are like locusts. Toyota killing it.

Edit: I think the title to this entire thread should be renamed to "Why I believe in 2023 Cocaine is a hell of a drug"

 

Good questions. I’m not an expert but from what I’ve read when reasearching car buying I have some guesses:

- We know that dealer allocations are based on sales volume, so they may want to move a lot of low margin “popular” models for that reason alone

- We know that dealers don’t loose money even selling at invoice due to holdbacks, Doc fees, Toyota finance percentages, etc

- I suspect Toyota builds more profit margin into the invoice price of higher trims

 

All manufactures have built in margin as a ratio of sales price as a general rule for dealers (delta for invoice and MSRP). Where they may start to shrink margins is when the car sits on the lot, as they make payments on the car since most inventory is bought on leverage.

The manufacturers themselves may not have that same delta as a ratio of COGs vs dealer invoice. It could be very similar as a dollar amount across all base vehicles. Where they will start have a bit more profit dollars is on the higher trim levels. Big business in parts for service, repairs (including accident repairs), and extended warranties (at time of vehicle purchase). Manufacturers also increase profits by becoming more efficient in the factory and increasing volume. They separate variable costs to help hold unit margins. That’s why we see freight as extra, PDI extra, etc.

 

It's something that Jerry Reynolds (Car Pro Show) mentions occasionally on his radio show.

Perhaps he's exaggerating a bit on this point.

 

I think that might be referring to massive dealership groups, maybe. Not sure how the sales reps get paid in US, but pre-pandemic most reps in Canada were on full commission, but that commission is only what is left after the dealership takes out “their costs”. As an example, if a Civic has about $2,700 delta between MSRP and dealer invoice. Then the dealership may note it costs them $600 to have the car, so the new sales margin is $2,100. The sales rep would typically get 24% of that. But as customers negotiate down that margin shrinks. Nothing worse then going back and forth with a customer over several days, and hours on finale negotiation to 24% of $300 margin. Then spend another hour with them on a Saturday delivery while missing all the “ups” walking in the showroom. I don’t miss that sh*t, especially in Jan/Feb where volume could be as low as 1 sale per rep for the month.

My point is with dealerships that have full commission sales staff for them to sell at a loss, or very low margin sales reps would starve or just quit. For fleet sales, where margins are low and volumes are high as multiple vehicles purchased at a time (businesses), so that is managed by a single sales manager so he/she makes up low dollars per unit on volume. Plus the fleet manager may share some of the dealership bonus that the manufacturer has a volume target. Sell 50 cars this month and get $$ kick back bonus.

 

Yes selling that one vehicle may generate more profit for the dealership, but selling for more than MSRP doesn’t mean more money for Corporate.

 

Good to know.

Thanks for the inside info

 

Chevy's execs should be tarred and feathered for that atrocity. I still have an 06 Trailblazer on the road. Dude at work said 'yeah I have a trailblazer too and pointed to his '21 model. I just laughed and said 'no, you don't..." .

 

RIP Burt Reynolds

 

Are they going to use my Corolla 4cylinder with a turbo? Cause that would be awesone!

 

I think it's going to be the GR Corolla turbo 3 cylinder.

 

That’s Diahatsu?

 

The Toyota version of the 1970's Trans-Am.

 

We just bought a 2019 SR5 4x4 from a dealership in Pensacola FL. They had 3 used 4Rs on the lot. While looking, test driving, and negotiating, my wife and I tool a look at the new Sequoia. I was very disappointed to learn it was a turbo 6-cyl Hybrid. The dealer also said the 2024 4Rs will all have turbo 4-cyl engines with a hybrid option. I'm not happy about it because IMNSHO Toyota is NOT responding to the market, but a political agenda in which fossil fuels are bad and green energy is not only good, but the only future option period.

I hope Toyota loses so much money that they come back from the woke"edge". Of course it won't happen because all the car companies are doing the same thing. There will soon be no competition for a vehicle like the 4Rs and Sequoias. They will be neutered just like all the other manufacturers have done. Yeah, I disagree too with the thread starter because I see 5th gen 4Rs all over the place.

 

Or, maybe they're responding to government regulations that require vehicles to get better fuel economy.

Or, maybe they're responding to the people on these forums who complain about shitty gas mileage and not enough torque, both of which will be way better with the incoming turbo 4.

Did you drive the Sequoia?

 

I have a 2005 TB on the road, 4.2L straight six (another engine Chevy discontinued after good success) that just keeps going. I am really hoping Toyota will give the option to pick an engine from a new(6th Gen) 4Runner. It would be fine if they want to offer up a turbo 4 or 6cyl. or a naturally aspirated v-6, like now, but give us a choice, then they would be able to plan accordingly for future sales.... let the masses speak!

 

I've heard from a very reliable source that the new Tacoma (2024 model year) will offer a naturally aspirated V6 along with a turbo 4 and hybrid option.

It sounds like the 2025 6th gen 4Runner will only have 2 options........a turbo 4 and hybrid.

But this is all speculation at the moment.

 

How's the power of the 4.2 compared to the 4.0 in the 4R? The TB is kind of in my radar as a beater vehicle.

 

I'm very doubtful that we're getting a N/A V6 option. But, keep in mind, it's mostly CAFE regulations that are putting an end to big displacement motors.

Aside from that, if the turbo 4 ends up being decently reliable, nobody is going to miss the 1GR even a little bit.

 

I'm probably alone on this one, but, the old 22RE did a fantastic job in my old '86 pickup. It was underpowered, mine was hooked to an automatic trans., now if Toyota did some revamping on the 22RE with a turbo, it might do a good job. Thinking out loud again!

 

Mine fits the "beater" category, I mean it has rusty spots and such, recently put struts/springs, rear shocks, trailing arms, Coopers(tires), air pump & check valve, and a tune up in it. The radio doesn't work. The 4.2 has really good torque, being an in-line engine the torque is better than a V style engine. Mine has auto-4wd which is great when I'm trying to get to work. The 4.0 probably has more top end power. It has about 175k on the odometer, and I believe it has another 75-80k left! Picked up 3 used doors from a donor, I'll put them on..... sometime. Back to the original post, offering a couple of engine choices may keep 4Runners being very sought after, while I'm not a fan of hybrids yet, if something is dependable.. it's dependable, but to many variables yet.

 

I'd miss the 1GR. It's a big part of why I love the 5th Gen.

 

What if the turbo 4 ended up being just as reliable?

 

I think the 22R/22R-E has a lot of fans here. I had one in an '85 Celica. It sounded like an old tractor, but you couldn't kill it.

I'm hoping that they nail it with this incoming turbo engine. I think that, if it's designed and built for the abuse, it will be a great engine. I haven't looked to see if there's any issues with it in the Lexus models yet.