Death, taxes, and discontinuing niche vehicles.
It's a tale as old as time: An automotive manufacturer makes a great vehicle that serves a niche market of enthusiasts who worship it. The manufacturer loses more money than they make on the vehicle and elects to discontinue production to invest in larger market segments that are taking off. Toyota is not immune to this, and in December of 2020, announced it would be axing the iconic Land Cruiser in the US market after the 2021 model year.
Now, according to Car And Driver, Toyota sold more LC's in January 2021 than in any other month in the last decade, 689 to be exact. That's more than a 200% increase YoY when they sold 215 last January, and a 68% increase compared to December 2020 when they sold 606. Is this some valiant resurgence of new Land Cruiser buyers that will turn the tide and show those corporate suits they've made a mistake? No.
Most likely it's a combination of people who currently own an older Land Cruiser with some miles, and want an upgrade while they can. It's also probably a crowd of collectors and enthusiasts who will park these for the next 20-25 years and we'll see them roll across the auction block on Bring A Trailer, Cars and Bids, or Mecum. That being said, Toyota is still making a mistake.
We are in the middle of yet another SUV craze in America. At the core of this craze is a 4x4 obsession driven by dudes in flannels equipping their rigs to hit what's left of the American Frontier to grow their Instagram following; stupid millennials. Not to mention, gas prices have been unreasonably cheap for the last few years now; stupid frackers. There has never been a more fertile market to sell an $85,000 SUV, so what is Toyota doing? I think Doug DeMuro nailed it: they don't know.
The suits in Plano think volume. They've sold around 3,000 Land Cruisers per year for about the last 10 years. For reference, they've sold around 130,000 4Runners per year over the last 4 years, a somewhat comparable mid-size SUV with trim levels for off-roading and also luxury. Toyota is for the masses—they think in terms of tens of thousands—so axing a measly 3,000 units a year is a no-brainer to them. The real kicker: Toyota has the Lexus branch that will continue to offer the LX which is a slightly fancier, less off-road capable variant of the Land Cruiser. So in Toyota's mind, the majority of the Land Cruiser market will simply just go buy an LX.
But just how many will actually do this? Land Cruiser people aren't dumb. If you can afford a sticker price that high, you've probably done something right in life. They know they can get a "nicer" variant of a Land Cruiser in the LX and have a more sophisticated and luxurious vehicle, but they don't. They want the unassuming, reliable, and capable Toyota variant, and they will walk right into a dealer and write a check for one. Toyota has overlooked that person, and a lot of businesses across many industries do. They neglect to get to know their best customer. The one who remains consistent, orders the same thing and off they go until you see them next time ... when they'll order the same thing.
So what happens now? If history repeats itself, which it always does, we have not seen the last of the Land Cruiser. My personal two options:
- It returns as a shell of its former self to meet a larger market segment
- Toyota restructures their SUV lineup as a whole, and offers a 2-door, 4-door mid-size, and 4-door full-size, all underneath the Land Cruiser nomenclature. Similar to what Ford has done with the Bronco.
I, personally, hope it's the latter, but time will tell. I love these vehicles, and we recently featured an in-depth look at one on our YouTube Channel with a local vehicle outfit called Nomad Outfitters. Check it out below, and follow us on Instagram for all things 4x4.