Millennial Magnet

Now in its third year, the stylish C-HR is attracting new customers to Toyota while also helping to retain those already in the fold

April 09, 2019
Urban Dweller -- Since its debut in 2017, the dramatically styled C-HR has attracted customers who tend to be young female singles without children who are making the move up from Corolla or another small passenger car.

Pop quiz: Which Toyota vehicle posted the biggest increase in unit sales between 2017 and 2018, RAV4 or C-HR? Hint: This is a trick question.
 
That’s because, while RAV4 is Toyota’s best-selling vehicle and the auto industry’s top-selling non-pickup truck, the upstart C-HR actually outpaced the venerable RAV4 in terms of sales growth.
 
The numbers don’t lie. Toyota sold 23,887 more C-HRs last year than it did the year before while RAV4 was up 19,576 units during the same time period. The daily sales rate growth is even more striking: RAV4 was up 4.5 percent in 2018, while C-HR jumped by a whopping 92 percent.
 
Now, all of the above does come with an asterisk. C-HR made its debut in April of 2017. So it was only on sale for nine months in its first “year” compared with the full 12 months of 2018.
 
Still, through March this year, C-HR had its best first quarter ever. So something’s going on here that deserves a deeper dive.
 
Can You Handle It? -- These rear door handles are just one of many creative design elements that set C-HR apart in the hotly contested entry-level CUV segment.

The Right Vehicle at the Right Time
 
Enter TMNA’s Compact Utility Vehicle marketing experts: Product Marketing and Strategy Analyst Erin Doughty and Vehicle Marketing and Communications Manager Kathi Jenkins.
 
“Part of C-HR’s success has to do with the fact that the entry-level CUV segment is the fastest growing in the market, and it’s unlikely to slow down any time soon,” says Doughty. “Less than a year after we introduced C-HR, Nissan followed with the Kicks and Hyundai with the Kona. The Honda HR-V, our strongest competitor, was already on the market. And there are several new and updated models coming through 2022, including hybrid and plug-in versions. It’s important we do everything we can to maintain our share.”
 
The results to date suggest C-HR (which stands for Coupe-High Rider) has what it takes to more than hold its own. Here are five specific reasons why:
 
  • Unique and distinctive styling — Jenkins says that when C-HR was little more than an idea, TMC President Akio Toyoda challenged his designers to “push the boundaries.” And they kind of did. Eye-catching styling elements such as a coupe-like profile, hidden rear door handles and dual-color paint schemes set C-HR apart from every other vehicle in Toyota’s lineup, not to mention the competition’s. In many ways, it’s the company’s first product to be developed with Millennials primarily in mind. And it shows.
  • Complimentary Entune 3.0 subscription — With Toyota’s infotainment system displayed on an in-dash eight-inch screen, C-HR owners can talk to Siri, stream music, make phone calls, check the weather and traffic, make dinner reservations, find and compare fuel prices and more.
  • Standard Apple CarPlay integration — With this feature, added with the launch of the 2019 model year C-HR last summer, iPhone users can access their favorite apps via the touchscreen. That helps make such activities easier and safer.
  • Standard Toyota Safety Sense P — Toyota’s bundle of innovative active safety features helps protect the C-HR’s driver and passengers from harm. The 2019 model takes this one step further with the addition of a backup camera that transmits its image to the in-dash screen.
  • A surprisingly high level of comfort — Many customers gravitate to a CUV for its combination of SUV ride height and passenger car handling. The current C-HR delivers on both fronts and adds dual zone climate control, available heated seats and available driver’s seat power lumbar support.
Smart Phone Enabled -- iPhone users can access their favorite apps via the C-HR's eight-inch touchscreen.

An All-Digital Ad Campaign
 
Compared with the more off-road-minded RAV4, C-HR’s unique package of styling and features is appealing to a customer base that’s younger, less likely to be married, more likely to be a woman and less likely to have children. It’s also attracting an ethnically diverse population of buyers. Fun fact: Some 31 percent of its owners are Hispanic.
 
Marketing is honing in on this segment, spending much of its advertising dollars on an all-digital campaign that plays up C-HR’s fun infotainment features. Take, for example, this YouTube ad with versions in English and Spanish. Two other spots can be found here and here.
 
The sales results suggest it’s working. Beyond the numbers, C-HR is attracting new customers to Toyota while also helping to retain those who are already part of the brand family.
 
One Color Doesn't Fit All -- C-HR customers can opt for a distinctive two-tone exterior paint treatment, such as this Blue Eclipse version offered during the 2018 model year.

“C-HR gives us a compelling offering to Corolla owners who are looking to transition to a CUV without stealing sales from RAV4,” says Jenkins. “In fact, 60 percent of C-HR buyers were already Toyota owners. It’s very important that we hold on to those people as they progress to different stages in their lives.”
 
As such, in the spirit of kaizen, look for Toyota to continue to find new ways to keep C-HR fresh and relevant to its more urban and wired customer base. Stay still in this segment and you risk falling behind.
 
“C-HR is off to a great start, but it has a long way to go to realize its full potential,” says Doughty. “We’re excited to see the impact it will have on our business in the months and years ahead.”
 
By Dan Miller

 

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