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Tuesday, 8 January, 2002, 00:29 GMT
Toyota targets youth with new cars
Toyota Matrix
Toyota says the Matrix will have broad customer appeal
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David Schepp
BBC News Online's North America Business Reporter
line

In unveiling its latest rendition of the Corolla small saloon, Toyota Motor Corporation has conceded that one vehicle can no longer appeal to all the buyers it hopes to attract - especially younger ones.

2003 Toyota Corolla
Toyota's new Corolla is the first in five years
That is why Toyota debuted two new versions of the venerable Corolla at the North American International Auto Show being held in Detroit.

The new addition, called Matrix, is yet another auto industry offering termed a crossover vehicle, in what is an increasingly compartmentalised market.

Revealed to rousing music and a puff of smoke inside Detroit's massive Cobo Centre, the Matrix, Toyota said, was designed to attract younger buyers.

Attracting youth

Despite being a small car, the traditional Corolla saloon attracts buyers with an average age of 44, according to Toyota. The Japanese car maker hopes to reach thirty-somethings with its new Corolla - and an even younger market for the Matrix.

Toyota CCX
The CCX concept car provides a window into Toyota's future
Youthful buyers are also the reason Toyota unveiled its Concept Coup Crossover (CCX) vehicle at the Detroit show.

In developing the CCX, Toyota has acknowledged younger car buyers are not just in search of unique vehicles but a novel way to buy them as well.

The lucrative youth market is one every car maker strives to capture and is a reason the US car market is constantly in flux.

Younger buyers are thought to have more disposable income than older ones, whose finances are weighed down by mortgages and children.

Get 'em while they're young

But a more substantial reason also exists, says Stephen Polk, chief executive at R L Polk, an automobile research firm. Auto firms hope to benefit from brand loyalty by reeling in young buyers.

Toyota senior vice president and general manager Don Esmond
Toyota exec Don Esmond says competition among small cars is greater than ever
In recent years, Mr Polk says, around 60% of car buyers stay with the brand of car they first purchased while in their twenties.

That is why even though Toyota expects the Matrix to attract buyers with an average age in the low 30s, its advertising campaign targets a much younger audience.

Toyota also hopes to attract younger buyers by waging a price war with its new Corolla and Matrix models. Toyota does so in the hopes of ebbing the tide of the record number of Korean built cars flowing to America.

Combating the Koreans

Korean manufacturers Hyundai and Kia both saw healthy sales increases last year. Analysts credit both firms with designing and building desirable cars at prices that are sometimes thousands of dollars less than comparable American and Japanese cars and are bought mainly by younger drivers.

With its bullet-proof reputation for reliability and quality, Toyota hopes to persuade those buyers who might opt for Korean cars to instead buy redesigned - and nearly as inexpensive - Corollas.

For example, the entry-level 2003 Corolla CE will sell for $13,370 (9,380), more than the 2002 model, although the new version, Toyota says, comes with much more standard equipment.

That makes it more competitive with the likes of the Hyundai Elantra, which sells in the US for about $12,500 and comes with a high level of standard equipment

By comparison, a 2002 Corolla sells for about $15,000 when outfitted similarly to the Elantra or 2003 Corolla.

Detroit auto makers have long bellyached that there is little money to be made in building and selling small cars. Toyota, however, is not just looking for short-term profit.

Toyota feels assured that once it attracts first-time buyers to its fold, they will come back again and again to buy larger - and more profitable - models.



Background
See also:

08 Nov 01 | Business
Toyota boosts profits as yen slides
16 Mar 01 | Business
Toyota 'in talks' with Peugeot
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