Personal Log #744
May 4, 2016 - May 7, 2016
Last Updated: Sun. 7/24/2016
page #743 page #745 BOOK INDEX
Setting Expectations. I did: We'll see the building of a foundation (awareness, education, reputation) within the first 2 years, then a big ramp up for the 3rd along with announcements of what comes next. That's the precedent already set. Prime should be no different. The timing works out especially well when the market as a whole is taken into consideration. Like you said, there is fear of the unknown. That's more of a problem than ever with ordinary consumers. We're past the early adopter stage now. That chapter in history is over. Gen-2 plug-in offerings (both PHEV & EV) are what will bridge the gap to mainstream acceptance, when plugging in is a consideration when making purchase decisions. Think about how there is rarely any mention of battery concern now. When it comes to hybrids, the belief of needing to replace the pack at some point is pretty much gone. These gen-2 vehicles will demonstrate the batteries are up to the chore. We'll get to some tipping point with consumer confidence. That takes awhile. In the meantime, there must be a scramble to figure out how to reduce cost enough to make the design capable of high-volume profitable sales without tax-credit help. It must be able to compete with traditional vehicles directly. That is absolutely vital... and still not being taken seriously by some. We can help with the awareness, education, and reputation. Lots of real-world data and focusing on the true competition is what it will take.
Anti-EV. I reposted the "hesitancy to promote EVs" comment again, requesting a response. In other words, I provided a polite advanced warning that I'm about to turn on him... quite hard, if he doesn't speak up. All that impatience we had to deal with... for what? He absolutely refuse to acknowledge the possibility that Toyota's indifference was really smart marketing. Why in the world would Toyota undermine itself by revealing intentions well in advance, knowing that it will cause trouble as a result? My guess is he's old school, where the belief is no harm can come from promoting well in advance. Trouble is, with the market evolving so fast, it is now more important than ever to remain flexible. What still leaves me wondering is how he fell into the trap of not seeing it as necessary. He's not alone. Like many of the others I have butted heads with, they understand the engineering well. It's just when it comes to the business aspect, that comes up short. Perhaps more of the big picture will sink in over time. I'm hoping to accelerate that progress. Having been able to become friends with other foes of the past, there is a reasonable hope that could happen with him too. His anti-EV belief sure will be a problem going forward otherwise.
Test Drive. Sometimes, it's easy. All I had to do was agree and suggest a new thought: Yes, there are a large number who don't have the need for transporting more than 4 people. There is also the group of people who shop based on the test-drive experience. Think about how little the salesperson has to do if they are smart enough to keep the battery-pack topped off.
Some. What other response can you give to this other than, ugh: "Do you honestly expect truck/SUV drivers to convert to the Prime??" It was from another of those who likes to stir the pot. He asks the same questions over and over again. That's annoying, since he clearly doesn't like the answers and hopes for something different. He also enjoys the discussions. He's polite and doesn't try to provoke. He just won't accept what you say either. I did anyway: Your perspective of absolutes continues to make discussion challenging. I'll give it a try though. Yes, I expect *SOME* will. It's human nature to seek out something different eventually. Financial, Family, and Work circumstances change over time. Having something new to choose from is what Toyota will be offering. Don't forget, not everyone has truck/luxury money to use indefinitely. We've already heard Prime being referred to as the "common man's Tesla". Think about how Toyota will adapt packages based upon how buyer preference patterns emerge.
Ironically. You gotta love reading this: "Given Toyota's hesitancy to promote EVs, I don't have high hopes they will put much effort into this." It came from an EV owner who's been really, really hard on Toyota under the belief they are only in favor of hybrids & hydrogen. No matter how much evidence I'd provide to the contrary, he just plain didn't see anything beyond a polarized outlook. One extreme or the other was his stance, no in between. That was annoying. I attempted many times to point out the middle target, Toyota's quest for balance. He just plain wouldn't acknowledge it. In his mind, unless Toyota delivers something to compete with Tesla, the automaker wasn't interested in anything offering a plug. So, when the end of PHV production happened, his anger blinded any sense of reason remaining. It was unfortunate. Now, there's the reveal of Prime to deal with. That confirms what I've been saying all along... which obviously wasn't enough. So, I conveyed the message yet again... but this time with a little attitude: Ironically, the reason for being hesitant to promote was due to Prime. Why promote EV when you are busy developing a PHEV with the hope that will stir mainstream consumer interest?
Average Consumer. What do you say when a friend posts this: "Prime has no shot at being successful. But it depends on how you define success. It might be a player in the PHEV market, but will never capture the average consumer." Obviously, I wanted clarification and insight. What brought about that opinion? So, I gave this a try: Let's discuss who the "average consumer" is. I would suspect pretty much everyone assumes the same thing, a person looking to purchase a Toyota car... like Camry or Corolla. We keep ignoring the truck market, the pickups and SUVs. Do you really think Toyota will never do anything to attempt to draw those who went from a car to a truck back to a car? Saying they will "never capture" is a bit of a stretch. Why did they switch to a truck in the first place. With Prius Prime, there's a chance of coming back. It's a vehicle that doesn't represent what they tried to get a way from years ago. Think about it. Offering something completely unique has potential. These are customers who would be paying more for their new vehicle purchase anyway. Prime provides a means to switch back to a more efficient means of transport. It's also a heck of an effective way to lower impact to the environment, without requiring a paradigm shift. Addressing the fleet as a whole can't just be with the expectation of people purchase a plug-in version of the vehicle they currently drive. The hope is it will be a relatively easy jump from Camry or Corolla, but how do you get people to take the bigger step away from the big guzzlers?
Quick Sale. I couldn't resist added more to
this post: "Just pointing out that the Prime will be successful
because of brand loyalty is not something to count on with it comes to
plug-in shoppers." This had to be said: It will be
successful, but not for the reason you presume. For that matter, it won't be
who you presume either. Plug-In shoppers are not the focus of Prime. True,
the configuration will be appealing, but they aren't who it was
designed for. Those shoppers will carefully weigh a variety of traits &
specs of the vehicle, researching in great detail and calculating
performance expectations. Since they are determined to purchase a plug-in
vehicle one way or another, they are far more willing to accept greater
expense & tradeoff. That's an elite group. In no way do they represent the
majority. Ordinary consumers don't participate in online discussions,
download resource material, or even read automotive publications. They go to
the dealer and look around. They succumb to the "endearment effect" from the
salesperson convincing them to touch & drive, often resulting in an impulse
purchase. That's the way mainstream buyers do business. No matter how
much an enthusiast praises a vehicle, it means nothing loyal customer simply
shopping the showroom floor. Salespeople want a quick sale, without having
to answer many questions or convince... For example, the ability for
Prime to completely recharge in 5.5 hours using just an ordinary 120-volt
household outlet is easy to understand & embrace. Think about how much of a
challenge the sale will be for Volt in comparison. It takes 13 hours. If you
have to leave for work at 7:30 in the morning, charging must start at 6:30
the evening before. If you have any night life whatsoever, you're screwed.
Explaining to the customer what it takes and how much it will cost to get a
level-2 charger won't be simple. That lack of intimidation is quite
powerful. It's enough to get the customer walking around at the dealer to
take a closer look. That's where those 'upscale', 'luxurious', and
'distinctive' features come in. No amount of enthusiast scoff at the
supposed limited range will change that. In fact, those customers won't even
be aware of any of that rhetoric. The salesperson will offer a
test-drive opportunity. They'll take a spin around the block in EV,
then ask where to sign. Quick sale achieved. Put another way, Toyota's target
audience for Prime is not plug-in shoppers.
Potential. It's refreshing to read this for a change: "The Prime has a potential market for folks who want a Toyota class reliable car and a PHEV. Toyota may not be wowing folks with EV range, but quite a few buyers want reliability first, whether it is EV or ICE providing the assurance of getting there." Too bad ordinary consumers don't participant in online discussions. Yes, I realize that's a direct conflict. You cannot be ordinary, yet do out of the ordinary stuff. Think about the over 14 million new vehicle purchases here alone each year. How many of those buyers ever post even a single message in an online forum or blog about their intended purchase? We're clearly not representative of the mainstream. I suspect many of the Prime buyers will come from in-person shopping, based upon a few mentions they came across prior to going to the dealer. Some will stumble across an article. Some will search online for reviews. Some will make the discovery at a dealer. Some will hear about it via word of mouth. Some will encounter one on the road or in a parking lot. There is potential for Prime. Prius is already known enough to have a reputation of being a good buy. It's reputation and practical nature tends to sell itself. Just imagine what the test-drive experience will do. This is the common person's plug-in hybrid we've been waiting and waiting and waiting for. Yes. I know. All good things...
Only Hearing. It's the old problem of only hearing what you want: "I think you have missed Toyota's claims that the four seats in the Mirai and Prime are to take the cars more 'upscale', 'luxurious', and 'distinctive', not about them being the next family car." I'm tired of dealing with this one particular individual on the big Prius forum. His perspective is that of absolutes & extremes. There's no sense of balance. That contributes to lots of conflict. Others feed his desire to discuss. After all, he is well informed. But then again, he choose to only respond to what brings about more posts. Allowing the means to find an end simply doesn't happen. Combine that with some newbies, the threads can go on forever. I dealt with today's problem this way: No, I heard & understood the rest of what was said. You can't just refer to part of it. When a family grows up (no more car-seats or juice-boxes), that's what they'll purchase. Why not transport the kids to soccer practice in a nicer vehicle?
Misguided. Understanding change isn't coming easy for some: "Targeting mainstream buyers with a less-mainstream configuration (four seat), however, seems rather misguided, even if it will work fine for many." True, it is challenging to alter perspective. But why wouldn't you believe that things won't be the same over time? We've witnessed the popularity of vehicle styles come and go. Why is it so difficult to accept that the middle seat isn't practical? Heck, even I eventually accepted the arguments of Volt supporters claiming the middle wasn't necessary. Of course, I get labeled as a hypocrite for doing that. But then again, I'd get labeled as a Toyota fanboi for not. It's a no-win situation. To make matters worse, quotes are taken out of context. They don't care that you also included the need for increased leg & head room. They don't care that endorsed the technology for a second model either. All the antagonists care about is winning an argument. That sacrifice the war for the sake of a battle is preposterous. Yet, it happens on a regular basis. All I can say is: Prius taught us that following the status quo can be misguided. It was literally the only midsize hatchback available back in 2003. Look at how many followed suit as a result of not following traditional expectations.
Shoppers. I wonder how long this will have to be dealt with: "Just pointing out that the Prime will be successful because of brand loyalty is not something to count on with it comes to plug-in shoppers." The thought is we'll be at the mercy of spin for several months still. The craziness with Model 3 will die down at some point. For now, we're getting a lot of hype from Bolt as a result. That's to be expected. I find it odd that 2 such profoundly different vehicles are considered to be competitors anyway. The only thing they really have in common is the 200-mile range; otherwise, each EV is quite unique. Whatever the case, it's a distraction. Toyota will wait it out. Patience is a requirement anyway. Prime will offer only a little more than one-tenth that range, but it will come with an engine that will deliver remarkable efficiency for when you use up the plug-supplied electricity. It's a great bridge away from traditional vehicles, offering a step beyond just getting a hybrid, but not requiring a full commitment. You'd think those online now would understand that. Unfortunately, many either don't understand or refuse to accept the fact that audience won't be the same. This gen-2 will target a new market. These buyers won't be the same... regardless of how convinced they are that goals this time have changes. Whatever. All I can do is try to point that out: Plug-In shoppers aren't the target market of Prime. That stage is over. Those early adopters have made their purchases already. The chapter in history just starting is the reach out to mainstream consumers. That's why Prime is configured differently, not following the gen-1 approach.
Competitive Sales. The pattern is repeating. Those same old excuses for flat sales are emerging again. There's no sense addressing them. That didn't work in the past, why would it now? Sales of Volt continue to struggle. That's a fact. Heck, it's a fact with Prius too. Those sales are flat as well; however, they are considerably higher. 8,923 is clearly more than 1,983. The interesting peek into the bigger picture is looking at RAV4 hybrid sales. 3,807 for the first month of full availability is a strong showing. Anywho, I needed a new way to present some perspective. This is what I used: "The Leaf (and the new longer range BMW i3) are in trouble with the Bolt EV and Model 3 out in the public eye now. When you can get a 200 mile range BEV for $30-something, who is going to spend it on a 100 mile BEV instead?" His arbitrary dismissal of BMW's offering is what got my attention. Eliminating i3 but not Volt simply doesn't make sense. I wondered why... and really wanted to know what kind of response I'd get with this new way of looking at sales. So, I asked: What will happen to Volt? Remember, it's not just the other automaker offerings attempting to attract buyers. There is also the reality of showroom floors diverting GM customers elsewhere. That's how so many opportunities for Volt have been lost to Malibu, Cruze, and Equinox. Also, don't forget that the phase-out of tax-credits will have an impact a year or two later, putting a lot of pressure on dealing with high-cost quickly to remain competitive.
The Point. I asked this: Wasn't the point of gen-2 Volt to overcome that barrier? You don't even need to know what I was referring to when you read the response: "No. The point of the Gen II Volt was (in addition to turning in sales at least commensurate with the previous Gen), to showcase the new drive system which could be adapted to many other models as Plug In, EREV and Hybrid; the Volt representing it's ultimate expression." It was a question of sales. The slow growth is becoming a disappointing reality. That's why so many have shifted focus over to Bolt instead. That's also why I push for answers... like, who? It's maddening to think so much time was wasted and so much damage to the market occurred as a result of the floundering. Oh well. At least it's over now.