Toyota Enters / Exits Boat Building Industry

Toyota Enters / Exits Boat Building Industry

This page is operated by RBBI and is NOT an official Toyota page.

  Toyota Exits Marine Industry in the U.S.

27 Feb 2002
Per an IBI report, Toyota announced it was leaving the marine industry today. Even with the new boatbuilding facility, the Epic brand is being dropped. Bill Nichtern, Toyota's national sales manager announced they were closing down Florida, but will maintain parts availability for 10 years and retain technical managers for 5 years.

The division was opened in 1997 and launched its first boat in the fall of 1998. It currently has 20 dealers and 5 models. Nichtern said the boat molds would be destroyed, and no engines would be sold to other boat manufacturers.

The project started as a diversification to explore marine opportunities. He feels they have accomplished that. Poor sales and a flat economy helped made long-term prospects for the brand "untenable". They decided to exit the industry and have no immediate plans to return "in any other capacities".

He reports the dealers are behind them in their decision and will support the existing warranty obligations.

Tokyo's Nihon Keizai Shimbun newspaper reported Monday 25 February 2002 that Toyota Motor in Japan has teamed with Yamaha Motor and Yanmar to cut costs and co-operate in the development of diesel engines for recreational craft. They will market the new engines independently to European boat assemblers.

Coverage Below is of Toyota's earlier entry into the U.S. marine industry

RBBI Coverage of Toyota Exhibit at 1998 IMTEC show

Its finally happened, we heard rumors it was to break at the 97 Tokyo International Boat Show and it did. Toyota has entered the Recreational Boat Building Industry. We feel this is a momentous event in the industry as it has not seen a super power with the immense financial, production, marketing, engineering, and R&D capabilities of Toyota. As they "test the waters" things could massively change. We will be reporting on their efforts here and speculating on their future impact on the industry.

You may not be aware of it, but they also own a number of marine resorts and have a presence in the Marina Industry in Japan. We will be covering that aspect of Toyota as well.

In addition to the direct presence in the boat building, marine drive, and their Marina efforts, they have many other projects that have potential application in the boating industry. They range from a new low cost engine with fewer parts and hybrid propulsion systems to new ways to melt aluminum more efficiently (for casting operations). The weekend prior to their Tokyo Boat Show introduction, a major fire at an automotive parts supplier in Japan shut down their auto production lines. A Wall Street Journal article in the Miscellaneous Section below tells the details of their extraordinary speedy recovery from this parts outage. This is an indication of their competitiveness.

Entry Into Boating Industry

Marina Presence

Potentially Related Efforts



Entry Into the Boating Industry - A Quick Synopsis

Their 1996 Annual Report page 1 says "And we are making an unprecedented commitment to developing new and expanded business in nonautomotive products and services.

The report stresses this point repeatedly. In the section titled, "Look Beyond Cars", they describe a program they began in 1989 to solicit employee ideas for new business. In 1995 they "upped the ante" and offered employees the chance to become presidents of their own companies. This resulted in 155 proposals, 10 of which have been approved.

The report also repeated stresses their efforts in safety, the environment, and energy conservation. These 3 areas are also of major importance to the Boating Industry.

Toyota announced its entry into the business December 18 , 1996 with a press release. Details include a 28 foot cabin cruiser with a "highly rigid" aluminum hull, a new drive system. The boats are designed by Toyota and built by KIWI of New Zealand. They will be marketed by Toyota.

Toyota also plans to sell two marine engines: a diesel engine based on the 1KZ used in the Hilux Surf, and a gasoline engine based on the Celsior's 1UZ.

Toyota plans to eventually develop a wide range of boat sizes and a full marine engine lineup, as well as establish a consultancy business to provide the information needed for individuals to better enjoy marine sports. Toyota also plans to actively participate in the development and operation of marine infrastructure facilities.

All the current product efforts are limited to Japan at this time, however the U.S. Press Release says they have established a U.S. Marine Division headquarted in Torrance, California with the Toyota Motor Sales group and plan to enter the U.S. Recreational Boat Industry.

The Reuters 18 Dec 1996 article says they only intend to sell 15 boats in 1997 but hope to have 438 million $ of engine and boat business by the end on the century (hello General Motors!). It also says they intend to announce engine sales to a U.S. builder soon.

The Lexus engine is an aluminum V-8. Many have looked forward to a light weight big block. It will be interesting to see their cooling system.

December 18, 1996

Toyota to Enter Marine Business

- Domestic Motorboat and Marine Engine Sales to Start Next Spring -

Tokyo - TOYOTA MOTOR CORPORATION (TMC) announced today that it will begin domestic motorboat and marine engine sales in spring 1997.

In order to continue being an active and vital company in the 21st century, TMC has defined the remainder of this century as its Second Foundation Era, and is aggressively developing and fostering new business areas. TMC currently manages about 30 new firms with combined sales exceeding 400 billion yen and a total of about 5,000 employees.

As one way of promoting these new areas, TMC has been using engines and other technologies developed in its automobile business in the research and development of marine products that are clean, safe, and friendly to the environment.

TMC's motorboat product is a 28-foot cabin cruiser -- the largest multipurpose cruiser operated with a "class four" license (under 5 tons). The automobile engine-derived marine engine, a new drive system, and a high-rigidity aluminum hull provide smooth and stable cruising and nimble responsiveness. TMC was in charge of the design and development of the vessel, which will be produced under consignment in New Zealand. Toyota will handle sales, which are not expected to reach high numbers in the initial stage.

TMC also plans to sell two marine engines: a diesel engine based on the 1KZ used in the Hilux Surf, and a gasoline engine based on the Celsior's 1UZ.

With its entry into the marine business, Toyota will set up an in-house marine business division in January 1997. TMC plans to eventually develop a wide range of boat sizes and a full marine engine lineup, as well as establish a consultancy business to provide the information needed for individuals to better enjoy marine sports. Toyota also plans to actively participate in the development and operation of marine infrastructure facilities, such as the Nagasaki Sunset Marina Co., Ltd. and Gamagori Marine Development Co., Ltd.

Before sales start, TMC will display its motorboat and marine engines at the 1997 Boat Show, opening in Tokyo on February 7, in Osaka on March 6, and in Nagoya on March 14.

Reuters Business Report 12-18-1996.
by Mitsuo Suzuki
Copyright 1996 Reuters Ltd. All rights reserved

Toyota to expand into motorboat business

TOKYO (Reuter) - Soon you will be able to sail a Toyota as well as drive one.
Toyota Motor Corp., Japan's biggest carmaker, said Wednesday it plans to enter the marine business and will start selling motorboats and boat engines next year.
The first Toyota boat to go on sale will be a 28-foot cabin-cruiser. The company will also launch two marine engines -- one diesel and the other gasoline.
The motorboat will be designed by Toyota but produced by specialist boatbuilders in New Zealand and sold in Japan under the Toyota brand, the carmaker said. There are no plans to sell the boats in other markets yet, but the marine engines will be sold outside Japan.
Toyota said it plans to develop a range of boats of varying sizes and a full line-up of marine engines, as well as establish a consultancy business to provide information on marine sports.
The move would be Toyota's first foray into the marine business.
The cabin-cruisers will be made by two New Zealand boat makers -- Circa Engineering & Marine Ltd and Mcdell Marine Ltd -- and will go on sale after Japanese boat shows in Osaka and Nagoya in March next year.
"We want to sell the best boats -- so in the first year, we plan to sell a limited number of 15 boats," Kosuke Yamamoto, a Toyota executive vice-president, told Reuters.
Toyota did not say how much its boat would cost but boat industry experts said a 28-foot cabin-cruiser would sell for between 15 million yen ($131,000) and 20 million yen ($175,000) in Japan.
A Toyota spokesman said the company was targeting annual boat and marine engine sales of about 50 billion yen ($438 million) by early in the next century.
Yamamoto also said Toyota would soon announce plans to supply boat engines to an American boatmaker.
Toyota has branched out into a number of business outside its core car manufacturing, including telecommunications, autoparts retailing and housing.
Toyota said it planned to continue to promote its non-automobile business and was aiming for sales in the non-automobile sector of around one trillion yen ($8.7 billion) by 2000, which would be 10 percent of its overall targetted parent sales.

Los Angeles Times, Thursday December 19, 1996
Home Edition - Business Section pp D-2.
by Kimberly Sanchez, Times Staff Writer

CALIFORNIA - Toyota Is Exploring Revving Its Engines in the Ocean Recreation: Auto maker forms a marine unit to weigh whether to offer vessels featuring its V-8 Lexus engines.

Toyota Motor Sales U.S.A. Inc. of Torrance said Wednesday that it has formed a marine division to explore the possibility of offering high-performance boats that would feature its V-8 Lexus engines.

"We're a successful auto marketer, and one of the challenges is to diversify operations," said Doug Plescia, a Toyota vice president and general manager of the new division, also in Torrance. "Certainly, engines and recreation . . . [are] something that we know. It's a pretty natural segment to go after."

General Motors Corp. and Ford Motor Co. have manufactured engines for boat companies for at least 30 years, company representatives said. Boat engine sales, though, account for a small part of their overall revenue. For example, GM sells only about 180,000 engines a year for boats, the company said.

"The kinds of volumes that you're talking about are pretty small relative to the volumes that they can move in automobiles," said Gary Lapidus, an auto analyst with Sanford C. Bernstein in New York. "I don't think it will have great material impact on their business. Few people own boats, and fewer own high-end boats with V-8s."

Plescia declined to speculate as to how much a Lexus-engine boat would cost, but he said company studies show that potential customers would have annual incomes of more than $35,000.

"Basically, they are people who are recreationally oriented and are generally not first-time boat owners," he said. "The water skiers, the barefooters, the wake boarders--people who are fairly serious into water sport recreation."

Performance speedboats are a hard sell, said Greg Proteau, spokesman for the National Marine Manufacturers Assn. in Chicago. Sales of powerful-performance boats average 5,500 a year, compared with 215,000 for family and fishing boats, he said.

"They're not targeting the huge part of the market," Proteau said. "The market is at the low end. People are price-conscious. That's why they sell more Camrys than Lexuses."

The 1UZ 4.0-liter V-8 engine, used in the Lexus LS400 and SC400, is made of aluminum, which would make it lighter than a typical motorboat engine, Plescia said. The engine's electronic fuel-injection system makes it cleaner-burning, he said, a consideration for boat owners who are often subject to the same clean-air rules as car owners.

The company said it could offer the engines or a boat-engine combination as early as the summer of 1998.

Copyright, The Times Mirror Company; Los Angeles Times, 1996.

"Toyota to Launch Leisure Motorboat in April"

- Japan Economic Newswire - February 6, 1997
NAGOYA, Feb. 6 -- Toyota Motor Corp. said Thursday it will launch a leisure motorboat in late April to branch out into the marine business.

The PONAM-28 boat is a multipurpose cruiser in the under-5 ton class, the largest that can be operated with a Class 4 license.

It will be showcased at the Tokyo International Boat Show, opening Saturday, the top automaker said.

It also features an aluminum hull, a diesel engine, and a top speed of 54 kilometers per hour, it said.

Toyota will also market two models of marine engines, the 3000 cc diesel and 4000 cc gasoline engines, both based on passenger car engines, it said.

It plans to supply the engines to shipping companies, it said.

172,532 come to '97 Tokyo boat show

by Hal Offutt of Darien, Conn.
This nice review of the Tokyo Boat Show was published on the Boatbiz website. The portion of it dealing with Toyota's presence is reproduced below.

The big news of the 1997 Tokyo Boat Show was clearly Toyota Motor Corp.'s marine debut. Occupying the second-largest exhibit space at the event, Toyota unveiled several new products: a new aluminum-hull Ponam-28, a multipurpose flybridge cruiser designed for the Japanese market but made for Toyota in New Zealand by McDell Marine; two marine versions of its gasoline engines; and a counter-rotating, dual-propeller sterndrive. There was no mention of the 19-foot ski boat that Toyota Marine recently said it planned to launch in the U.S. in the 1998 model year.

Toyota's plans for the marine industry have been no secret in Japan. The auto colossus has been openly discussing its plans since 1992 and, according to Japanese press reports, in 1992 actually began supplying to Yamaha a six-cylinder marine diesel engine based on the engine used in its Land Cruiser. Toyota initially established a marine business planning office in January 1990, and in addition to its engine and boat activities has been active in several large marina development projects in Japan.

The Ponam-28 on display at the show was actually the ninth such boat Toyota has built, the first prototype having been produced in 1992, according to Katsuji Yamazaki, one of the two principal development engineers on the Ponam-28. The boat was designed specifically for the Japanese market and is as large as a boat can be and still be operable by a Fourth Class boat licensee, the basic operator's license.

It features twin helms, a reinforced flybridge which can accommodate five passengers, a wraparound glass windshield and a large 7.5-square-meter aftdeck. The Japanese typically use boats in this size range for day trips, with overnighting being uncommon, so the cabin is spacious and built without inside bulkheads. Toyota has given the boat over 1,500 hours of on-the-water testing, according to Yamazaki.

The hull is welded aluminum sheet and uses about 1 ton of aluminum. It is quite labor-intensive to construct but Toyota felt that the recyclability of aluminum made it environmentally preferable to fiberglass as well as stiffer and therefore more capable of riding Japan's rough seas.

Aluminum is a common building material in boats smaller and larger than the Ponam-28, but is unique in a boat of this length, says Yamazaki. Flotation material is built into the hull. Should sales volume warrant, Toyota is clearly capable of automating the construction of such a boat, although it seems unlikely that the Japanese market alone could provide such demand.

The model on display at the show was equipped with twin diesel 160-hp M1KZ engines but will also be available with twin 4-liter 260-hp M1UZ gasoline engines. The diesel engine-equipped boat was priced at Yen22 million, around US$183,000 at current exchange rates.

Toyota Boats Will Be Built by Maritec

Soundings Trade Only
January 1998  page 3
Article summary below provided by RBBI
In December Toyota Marine selected Maritec Industries to build the new line of ski boats to be introduced in August 1998 for the 1999 model year.

Maritec currently makes the Gambler bass boats. Doug Plescia vp and gm of Toyota Marine Sports said, "We chose Gambler because of their proven commitment to building quality boats, its diverse boatbuilding experience and the dedication and attitude of its people to be the best."

Bob Ackerbloom started Maritec 15 years ago, before then he built ski boats for Spectra Marine in Burbank CA.

Toyota said Maritec will double employment by July. Manufacturing will move to a new Groveland FL plant where Gambler and Toyota boats will be built on separate production lines.

Toyota's two boat models (open and closed bow) are being designed in the US and both will be powered by Toyota's 1UZ, 300-hp, 4.0 liter V8.

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