The quality-related problems faced by Toyota Motor Sales USA (TMS) have been well publicised, but way before the media began to trumpet the recalls that led to production stoppage announcements in late January, TMS’ sales were already crashing.
The evidence of a general shift away from Toyota brands’ US market products has been growing since the start of last winter. Explaining what appears to be happening involves taking a deep dive into the overall market sales numbers and intention to purchase metrics for the last two quarters.
Simply put, people are looking for a change; with many now considering brands and vehicles they either previously rejected or knew too little about. This began happening just as the economy ceased contracting and consumer-lending restrictions were eased. Many consumers, suddenly able to find financing again, turned away from small cars and returned to the big pick-up segment.
Toyota’s number one light truck only just scraped into tenth place in the overall sales chart
SUV sales too have been on the rise and Ford is the big winner. With a combined 25,909 registrations for January and February, the Escape is now America’s number one SUV, leading the second placed Honda CR-V by some 4,500 units.
The Escape might be having a great 2010, but it’s an old vehicle and may falter later in the year. What’s more, a major threat for Ford, Honda and Toyota has appeared from a slightly larger new SUV, the previous generation of which was hardly a serious contender: the Kia Sorento.
The first vehicle to be built at Kia’s new US plant found 8,366 buyers in February, enough to make it America’s fifth best selling light truck for the year to date. Incredibly, that means the Sorento is even outselling the Dodge Ram.
What then of Toyota? The Sorento, with 15,605 sales in the first two months, is not only ahead of the RAV4 (by 912 units) but the 2010/2011 Sorento even beat the Tacoma pick-up last month. There were only 41 vehicles in it, but Toyota’s number one light truck only just scraping into tenth place in the overall sales chart (partly due to a Kia) was a shock.
In the big-volume car segments too, major shifts are taking place. Non-rental fleet purchasers have been returning to the market, with the Honda Accord, Nissan Altima, Ford Fusion and Chevrolet Malibu sedan rivals the major beneficiaries.
Toyota lost its place as US number one to Ford in February.
Alarmingly for Toyota, the Camry, America’s longtime number one car, fell to fourth place for the year to date behind the Accord, Altima and Corolla/Matrix. Nissan (Altima) and Ford (Fusion) are showing the highest growth in the family sedan segment.
Just how badly Toyota has been hit by segmentation trends and now, recall-related image problems, is perfectly illustrated by the sales numbers for the last three months in the major car segments. December’s 34,946 Camry registrations plunged to 15,792 in January, recovering slightly to 16,552 in February. Equivalent numbers for the Corolla/Matrix came in at 34,220 for the last month of 2009, with 17,121 sold in January and 16,552 in February. Taking all this into account, it’s little wonder that Toyota lost its place as US number one to Ford in February.
And the problems continue for TMS. Shuttering a Corolla factory in California at the end of this month will cost it US$250m, while a scheduled doubling of RAV4 production capacity at a Canadian plant is about to commence just as US market sales of the vehicle are falling. Would it also be too unkind to mention the recently completed but redundant plant in Mississippi? 2010 is shaping up to be an historic year for TMS, but not in the way it might have hoped.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
