Why Did Toyota Discontinue The MR2?

The MR2 is one of Toyota’s most celebrated sports cars of all time.

Across three distinct generations, Toyota devised a winning formula of mid-engined, rear wheel drive fun.

The MR2 was well-received in its day (with each specific generation having its relative strengths and weaknesses) – all of them are great cars, and for the purpose of this article I won’t be drawn into which generation is the best.

However, production of the last generation of the MR2 ended in 2007 – with the car being discontinued for the American market after the 2005 model year – and Toyota never made a fourth generation.

There are occasional rumours about Toyota bringing back the MR2, but there is nothing concrete yet. Hopefully they will bring the car back, but in the meantime you’ll have to settle for buying one of the original models.

But why did Toyota stop making the MR2? Why would a company choose to cancel what was such a well-regarded car?

In this edition of Car Facts, we are looking at the reasons for Toyota canceling the MR2.

Declining Sales Led To The Demise Of The MR2

Credit: GreenGhost

The primary reason why Toyota stopped making the MR2 was declining sales.

With some cars, it can be challenging to find a clear reason for their cancellation. However, Toyota was actually rather unequivocal at the time that the primary reason for discontinuing the MR2 was due to poor sales volumes.

Although it was well-regarded in terms of reviewer praise, sales figures simply didn’t match the hype to justify continued production.

For example, in 2000 there were just under 8000 MR2s sold in the United States. By 2004, that figure had dropped to less than 3000.

You don’t grow a car company as big and as successful as Toyota without having strong commercial acumen – Toyota made the data-driven decision to cut the MR2 as it just wasn’t profitable any more. 

A quote from Don Esmond, who was Senior Vice President at Toyota at the time the MR2 was discontinued said:

“The past few years, however, have been very challenging for both Celica and MR2 as competition in a segment where ‘what’s new’ dominates and we continue to add more exciting and youthful products to the lineup such as the Matrix and Corolla XRS, Solara sports coupe and recently the Scion xA, xB and tC.”

Source: https://money.cnn.com/2004/07/18/pf/autos/celica_mr2/index.htm 

As mentioned in the introduction to this article, Toyota kept the third-generation MR2 going elsewhere for a couple of additional years, but by 2007 it was “lights out” on the legendary two seater.

Changing Preferences For Younger Buyers Were A Factor

Credit: Toyota

Toyota discontinued the MR2 due to declining sales volumes. We could just leave the story at that.

However, it’s interesting to dig a bit deeper and explore why sales volumes decreased for the MR2.

According to Toyota’s own information from the time, one of the primary factors here was changing buyer preferences in the younger car buying demographic.

The MR2 had typically performed well with younger buyers, who by the early 2000s had shown shifting preferences away from performance cars and towards what was new at the time, e.g. trendy eco-friendly cars like the Prius and other youthful products like the Scion lineup (in the American market).

Basically, sales to the MR2’s biggest market segment declined because younger buyers wanted something new and different.

The MR2 Struggled In A Crowded Market (Relative To Sales Volumes)

Credit: Mr.choppers

If you think about the market for affordable, two seater convertibles – at the time of the final MR2 generation – the clear market leader was (and remains) the Mazda Miata/MX-5.

Although the MR2 actually had superior performance credentials (and many agree it is the better car to drive) the sales data makes it clear that the average buyer preferred Mazda’s offering – by a significant reason. I guess there is a reason why “Miata is always the answer”. 

At the same time, Honda was trying to make inroads with the S2000 – read our S2000 model history & buyer’s guide here for more information, and European manufacturers like BMW with the Z3 and Porsche with the Boxster were trying to provide a more affordable “pathway to premium”. 

In effect, relative to the size/total sales volume of the “affordable two seat convertible sports car” market, it was a crowded one in the early 2000s, and the MR2 just didn’t do enough to stand out and win market share. 

Perhaps part of the poor sales performance of the third generation MR2/MR-S (JDM version) was due to the shift to a soft top roof. The first two MR2 generations hard been targa/hard top, more akin to two seater sports coupes – and not necessarily something you would cross shop with convertible offerings from the time due to the fundamental difference in body styles. However, with the third generation, the MR2 was suddenly up against numerous excellent soft-topped competitors. 

What do YOU think? Leave a comment below, as it would be great to hear from you.

Recap – Why Did Toyota Discontinue The MR2?

Credit: TeEmKah

Toyota discontinued the MR2 in 2007 due to declining sales. Buyer preferences had changed – particularly among the younger demographic where the MR2 had traditionally been successful at winning sales – and there simply wasn’t enough demand to justify continued production.

The demise of the MR2 also came around the time that Toyota started cutting back on most of its sports/performance cars, focusing instead on economical vehicles such as the Prius, and growing demand for crossovers like the RAV4. Think back to Toyota’s 1990s lineup (during the “peak” era of the SW20 MR2). Toyota had cars like the Celica – particularly the bonkers Celica GT-4 – the MR2, the venerable Supra MK4 … the list of performance cars went on.

By the time the last MR2 rolled off the production line, most of Toyota’s performance models had gone the way of the dodo, driven by tightening environmental restrictions and shifting consumer preferences that were moving towards eco-friendly and frugal cars like the Prius, or to SUVs/crossovers. 

It’s only been in the last couple of years that Toyota has really made much of a move back towards performance motoring, with the MK5 Supra, Yaris GR and new Corolla GR (the Toyota 86 being the primary exception in the interim period). 

Will Toyota bring back the MR2 now that they are starting to make performance cars once again? Possibly – rumours have swirled for some time. However, for the time being you’ll have to satisfy your cravings by buying one of the original MR2s … you could be waiting a long time for a new one.

As luck would have it, we have a buyer’s guide for each generation of the MR2. Click on the links below to learn more. 

Toyota MR2 AW11 buyer’s guide (first generation) 

Toyota MR2 SW20 buyer’s guide (second generation) 

Toyota MR2 W30 buyer’s guide (third generation) – also known as the Toyota MR-S in the Japanese domestic market

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