Toyota Dealers Want More Cheap Models

It’s no secret that cars aren’t as affordable as they used to be. It’s easy to point to average prices, which are approaching $50,000, but there are other contributing factors. Incomes haven’t been keeping up with inflation for quite some time. More recently, supply shortages and rising interest rates have compounded the situation. So it’s no surprise that when Automotive News talked to a member of the Toyota National Dealer Advisory Council, he expressed quite a bit of interest in getting additional inventory and new models that are on the affordable end of the scale, maybe even a new Yaris. We like the idea of more cheap cars, but we’re also not sure just how much room there is at the bottom of Toyota’s range.

Cheap Cars Are Selling

In the interview, the dealer council member, Russ Humberston Jr., mentions a couple of times that he really wants to see more supply of entry-level Toyota models, specifically Corolla Cross, Corolla and Prius. According to Toyota’s sales data, the Corolla Cross had an excellent 2024, with sales increasing by more than 20,000 units, a 30% increase over 2023. But generally, he has concerns about affordability, and for reasons like interest rates. And when the Automotive News reporter asked if a new Yaris would be welcomed, Humberston Jr. said that he knows dealers that want something below Corolla, even a hatchback like Yaris, to fill customer demand.

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There’s evidence across the industry that car buyers are looking for cheaper vehicles. Nissan saw excellent sales of the Versa and Kicks, its two smallest models, as well as the Sentra, which is the next size up. Over at GM, the Buick Envista ended up being the second-best seller for the brand, just barely behind the similarly small Encore GX, and the Chevy Trax became Chevy’s third-best seller, nearly doubling last-year’s sales. It nearly matched the Equinox, and both of those models would’ve topped Chevy’s charts if it weren’t for Silverado sales.

We’re Not Sure Toyota Can Sell Something Cheaper

The problem with this desire for something even cheaper in the Toyota line-up is that, well, the Corolla and Corolla Cross are already quite cheap. You can pick up a new, base Corolla for an MSRP of $22,325, or $23,460 with destination charge. The Corolla Cross The aforementioned Nissan Kicks and Sentra are only a few hundred dollars cheaper, and the Chevy Trax a few hundred below the Nissans. Toyota even offers a hybrid Corolla or a hatchback version for only around $1,500 more than the base combustion Corolla sedan. The Corolla Cross is pricier, starting at an MSRP of $24,035, or $25,385 with destination.

To really illustrate that the Corolla is pretty much at the bottom of the market now, we should look at the cheapest car you can buy in America right now: the Nissan Versa. It starts at an MSRP of $17,190, and hits $18,330 with destination. That’s with the base model with a five-speed manual transmission. Most buyers are going to opt for the CVT, which adds $1,800, and brings the base price with destination to just over $20,000. That nudges it mighty close to the bigger Sentra, not to mention other larger competitors like the new Kia K4, which has a base MSRP of $19,990, and price with destination of $21,145. There just isn’t much room under the Corolla. This is also assuming that the costs of ensuring safety and emissions for something like the Yaris, which is still available in Europe and Asia, wouldn’t push it right up against Corolla, or past it. With that said, the higher price of Corolla Cross leaves a bit more space. Toyota does sell a Yaris Cross in Europe and Asia. But again, homologation costs could make it a no-go, plus the fact that it could poach sales from the Corolla. Another cheap Toyota sounds great, but it would be tough to do.

Source: Automotive News