Declining Demand: Over time, the demand for the Toyota Tercel and vehicles in its segment declined. Buyers shifted their preferences towards more modern and feature-rich compact vehicles, SUVs, and crossovers.
Changing Consumer Preferences: Consumer tastes and preferences evolved, leading to a higher demand for vehicles offering better performance, fuel efficiency, and a range of features and technology. The Tercel, which was considered a basic, no-frills economy car, no longer aligned well with these evolving preferences.
Competition: The automotive market became increasingly competitive, with manufacturers introducing new and improved compact car models. The Tercel faced stiff competition from rivals such as the Honda Civic, Toyota Corolla, Nissan Sentra, and others, which offered a more comprehensive package in terms of design, features, and overall performance.
Profitability: With declining demand and intense competition, the production and sales of the Tercel became less profitable for Toyota. The company had to reallocate its resources towards models that were more popular and had higher profit margins.
Focus on Other Models: Toyota chose to focus on other models within its lineup that had stronger demand and profitability, such as the Corolla, Camry, and RAV4. The company needed to prioritize its production and marketing efforts on vehicles that would generate more revenue and align better with changing market trends.
Transition to Hybrid and Electric Vehicles: In recent years, Toyota has been shifting its focus towards developing and promoting hybrid and electric vehicles as part of its long-term sustainability strategy. The Tercel, being a gasoline-powered vehicle, did not fit into this strategic direction, and the company decided to discontinue its production in favor of more eco-friendly models.
By discontinuing the Tercel, Toyota aimed to allocate its resources more efficiently, respond to changing market demands, and align with its long-term electrification strategy.
