The mainstream media has finally discovered that America’s Motown-based automakers are in dire straits. (Was it the bailouts?) The Detroit-based automotive media are in full counter-insurgency mode, scouring the autoblogosphere for stories that say “SEE! They’re in trouble, too!” When Toyota recently secured bank financing, cries of “Bailout! Bailout!” echoed throughout the Motor City. And now Automotive News [sub] seizes on the Automotive Lease Guide’s [ALG] revised depreciation stats for proof that GM and ChryCo are not alone. “Toyota’s residuals take a dive” AN’s headline proclaims. “Not only are Toyota Division’s new-vehicle sales plunging, but so are residual values on its used cars and trucks. That is depriving Toyota of one of its best marketing tools: the healthy residuals the brand long has been able to brag about.” Uh-oh. Hang on. Context?
Of course, it is an industry-wide trend. According to the guide, 2006 model vehicles with leases that ended in January and February retained an average value of 40 percent of their sticker prices. That is 6 percentage points lower than the original projection.
So . . . let’s bash Toyota! The above illustration illustrates the bias. While the difference between ALG’s forecast for the Toyota Tundra’s residual value and its actual 2009 value is greater than the same discrepancy for the Silverado and F-150, the bottom line clearly puts the Tundra at the top. Actual value vs. actual value, it’s Toyota (40.1 percent), Silverado (39.8 percent) and F-150 (32.2 percent). In fact, doesn’t the “value decline” illustrate nothing more than ALG’s lack of forecasting ability?
Hopping over to ALG’s website, an entirely different picture emerges. Toyota’s Camry, Prius, RAV4 and Tacoma all get a five-star depreciation rating. GM has no five-star vehicles. Nor does Chrysler. Nor Ford. The only American vehicles that make the grade are the Jeep Wrangler and the Dodge Viper; the latter of which which Chrysler is deep-sixing. On the downside, domestics account for 15 of the 25 one-star rated cars.
So today’s lesson is to always start with crap. That way you have less to loose. and won’t get slammed for it. A win for mediocrity.
Pure schadenfreude. Detroiters (especially Det 3 supporters) raise this to a new level. Sometimes I think they would rather have “proof” that other carmakers are just as bad as the Det 3, rather than actually succeed for themselves.
IIRC, the Tundra and the Silverado were both redesigned in 2007. This may account for part of the lower-than-expected residuals of the 2006 models (ALG should account for this, but may not have).
The industry (or what’s left of it) should be thankful that Toyota have played nice to this point in time…..
Of the dozens of 5-star cars, the only Detroiters are the Wrangler and the Viper. The 5-Star rating denotes their desirability (and perhaps their reliability). In any case, people want ’em.
However, in a move of questionable wisdom, the only 5-star vehicles being made in Detroit are being discontinued. This seems stupid. Sort of like eating the seed corn of the only drought resistant crops you’ve got, in middle of a drought.
Gentlemen,
I simply missed the Wrangler in the list when I wrote this post. I have amended the text to include it.
I have advised those of you who caught this mistake of the change via email. Please remember that any discussions of TTAC editorial stance or style must go beneath a post on that topic, or sent to me at robertfarago@thetruthaboutcars.com.
Thanks you.
@ Lokki :
Forgive me if I misunderstood your post, but are you suggesting the Wrangler is being discontinued? I can assure you it is not. Of course, it’s build in Toledo and not Detroit.
Picking on Toyota is practically a sport and certainly the lowest form of page-hit gaming. Nothing, but nothing, will generate pages worth of troglodyte vitriol than taking a poke at Toyota. It brings out the worst of the low-confidence domestic fanbase.
It’s actually one of the reasons I gave up on Autoblog: you could more or less guarantee that when the page views started to drop, there would be a story about the Tundra or Prius to drum up some views.
Toyota’s not perfect, and they do deserve the same scrutiny afforded any marque, but mob journalism is just sad.
x
“Troglodyte vitriol.” Now, in how many forums out there will you find a gem like that? I love it!
I have a somewhat differing take on this, though. While, no doubt, one can attribute much of this Toyota bashing to patriotism, domestic pride, etc, I think it attests to something more, something more reflective of simple human nature. Whoever is at the top provides the most inviting target. Admit it or not, GM takes a lot of hits for that very reason. The more successful you become (and no automaker will ever, at least in the forseeable future, equal GM’s success in market share over the last 50 years) the more opportunities arise to get lazy, make mistakes, take advantage of customers, what have you.
If Toyota comes to dominate the industry as GM did in the 50s, 60s, and 70s, look for it to make stupid mistakes too. Especially if many of its competitors fall by the wayside.
And schadenfreude? I think the GM bashers pretty much have the market cornered there.
I don’t think AN is picking on Toyota. Toyota has been very public in pursuing its goal of global sales domination, while simultaneously cutting costs. It is only natural that residuals would fall, and fair game to report on the fact.
Residual value was one reason we chose a 2008 Santa Fe over a 2008 Highlander or RAV… Hyundai gave us 42% on a five-year lease, whereas Toyota wouldn’t even touch that number on a four-year lease. The Toyotas also felt cheap by comparison. You heard me… the Toyotas felt cheap compared to Hyundai.
I do believe that Toyota is rapidly becoming the new GM, while Hyundai is becoming the new Toyota. It’s a strange new world.
br549: “And schadenfreude? I think the GM bashers pretty much have the market cornered there.”
I think GM bashing (and there’s not as much of it as some would believe, reality is just not GM’s friend, lately) is much more understandable, for two reasons:
1. It’s unquestionably the case that MANY former GM owners are angry about their experience and treatment and are going to vent in public forums. Toyota hasn’t abused its customers nearly as badly. Much anti-Japanese automaker sentiment comes from people who “have never owned a ricer and never will” to recall a phrase I saw in another forum. Frankly, these people don’t know what they’re missing (and is a Camry built in the US a “ricer?”).
2. GM’s now vacuuming cash out of the national wallet. This is going to lead to a lot of hard feelings. In other TTAC news, today, Ford seems to be getting a bounce from the reaction go the bailouts (I don’t have Flash on this PC, so I’m going by the headline). Certainly, I’ve seen that sentiment in this and other forums.
ALong with desirability you have availability affecting resale. Vehicles sold in limited numbers are harder to find used so that tends to lift their boats. Styling and functionality affect resale too, especially with vehicles designed for work versus play.
Of course vehicles with the hoods up a lot are not going to score well. Some of that perception is fact while other times it is fiction. Honda, Nissan and Toyota have had their share of chronic problems over the years but how they dealt with it was different.
At the end of the day a car is only worth what the market will pay for it.
Wait. When did they decide to deep six the wrangler? I thought the Patriot and Commander were gone leaving only the Wrangler?
What?
How the hell can they kill the Wrangler?
The Wrangler IS Jeep!
While, no doubt, one can attribute much of this Toyota bashing to patriotism, domestic pride, etc, I think it attests to something more, something more reflective of simple human nature.
I agree. Unfortunately, racism is an ugly thing, and shouldn’t be encouraged.
I posted this previously, but in a JD Power/ Detroit News survey of car buyers who specifically avoid buying Asian cars, the primary reason cited was because of the nationality of the companies that make them. That result differs notably from car buyers who avoid domestics, who are most motivated by reliability, quality and depreciation. http://detnews.com/graphics/2007/0102jdpower.pdf
A lot of the Toyota bashing comes down to racial bigotry, pure and simple. A lot of good ol’ boys simply can’t stand the thought of a bunch of non-Anglo-Saxon furriners making better cars than they can. Since they can’t compete on their own merits, they try to tear down the opposition, instead.
Shocking News! Resale values of large pickup trucks have declined more than forecast since 2006! Toyota’s unloved prior generation smaller Tundra isn’t immune from the effects of a gas price shock, housing collapse and credit constipation! 2006 Tundras only held their value 8% points better than the #1 selling F150s! Hold the presses (what, we already shut down the presses?), Toyota is on the verge of collapse!
Freaking idiots.
The Wrangler is not being killed. But my obtuse sentence implying so is. Being killed. Well, modified.
I don’t think AN is picking on Toyota; quite the contrary in fact.
Clearly, they’ve pictured the Tundra much bigger than the Silverado and the tiny F150 in this picture. And, the Tundra is more far away at that, so in reality, it is just huge.
We all know that to the people who buy these things, sheer size is a big selling point…
So really, instead of picking on Toyota, this is a cleverly disguised Toyota ad.
Pch101:
“I posted this previously, but in a JD Power/ Detroit News survey of car buyers who specifically avoid buying Asian cars, the primary reason cited was because of the nationality of the companies that make them.”
I understand the point you’re making about racial issues underlying this, but it hasn’t always been that way. I’m Korean American, and my mother especially took decades of living in this country before she became comfortable with the idea of buying Japanese. I’m sure you can guess why, historically (and my folks lived that history up to 1945). It WAS nationality, but not race per se.
bill h. :
March 16th, 2009 at 11:12 am
I understand the point you’re making about racial issues underlying this, but it hasn’t always been that way. I’m Korean American, and my mother especially took decades of living in this country before she became comfortable with the idea of buying Japanese. I’m sure you can guess why, historically (and my folks lived that history up to 1945). It WAS nationality, but not race per se.
It is nationality, and it is racism.
I am of Chinese origin. And guess which people (of significant population size) are the most racist in the world. Not Americans, not Germans, they are Chinese! Caucasians receive far better treatment than Chinese in China, even if both of them hold American passports.
Chinese buy more VWs and Buicks than they buy Toyota/Honda, because they are Caucasian brands (even though built by local Chinese labors).
OK, you say, since there are 1.4 billion Chinese, it’s natural that they care more about foreigners. Then look at their attitudes toward foreign black people.
A Chinese women may just have committed the crime of the century, if she is married to a black guy. On the other hand, it’s OK or even enviable if she is married to a white guy. The list goes on…
I like the graphic. Can I actually get a Tundra that size in relation to the F-150*?
* Yes, I know the vehicle pictured is not actually a 2006 F-150. No corrections necessary.
So how does simply stating numbers “picking” on Toyota? Sure, they used a provacative title and all, but I know someone else who does this…
bill h. / wsn:
Comfort women or the Rape of Nanking are reasons not to buy a Japanese car, but the study refers to Asian cars, not Japanese cars.
http://detnews.com/graphics/2007/0102jdpower.pdf
Hyundai has become quite a player in the US market.
Hyundai is actually in a really good position because, I would guess, many Chinese and Korean Americans know that it is Korean, while many white Americans think it is Japanese.
Asian cars are the only category of cars for which the most popular reason for avoidance was location of origin.
However, as the survey shows, those who avoid Asian cars, primarily for the stated reason of continent of origin, are older, less educated and poorer than both those who avoid American and European cars (p. 31).
And yes, Autoblog has picked up the story. Without so much as a whit of criticism but certainly with a fair helping of flamebait.
“…some critics suggest that the fact that Toyota’s residuals are falling faster than other companies could point to growing awareness of quality issues.”
What critics? Anyone have access to the AN article and care to comment?
no_slushbox :
March 16th, 2009 at 1:51 pm
Comfort women or the Rape of Nanking are reasons not to buy a Japanese car, but the study refers to Asian cars, not Japanese cars.
Just more proof that racism, not WWII, is at work here.
If it’s just for the “Rape of Nanking” thing, Chinese would have loved Korean cars. Korea was China’s ally in fighting Japan. And Chinese would have hated German cars, since Germany was Japan’s ally.
However, Chinese like Korean cars even less, because Korea is more “Asian”, while Japan is more Western (as compared to Korea).
Uh, the worst truck out their what?
Sounds painful.
And if it has the highest deprication rate, what is it deprecating?
I agree. Unfortunately, racism is an ugly thing, and shouldn’t be encouraged.
I posted this previously, but in a JD Power/ Detroit News survey of car buyers who specifically avoid buying Asian cars, the primary reason cited was because of the nationality of the companies that make them. That result differs notably from car buyers who avoid domestics, who are most motivated by reliability, quality and depreciation.…
How about the “import only” people who dismiss a well rated domestic car without even looking at it because their 1983 Citation sucked? Why is that not as stupid/bad as purchasing a car just because it has a domestic badge? Either way, you are not making a very informed decision.
Buzzdog, my father’s Avalon has been known to depricate without warning…happenend last week and it ruined my mother’s shoes…
golden2husky: “How about the “import only” people who dismiss a well rated domestic car without even looking at it because their 1983 Citation sucked?”
1. Go look at the survey… there’s far fewer of those than there are people who simply won’t consider an Asian car “because they don’t want an Asian car.”
2. And I guess this means GM shouldn’t have built ’83 Citations that sucked. Business 101… it’s easier to keep a customer than win him back. Think GM has learned that lesson? If so, did you read about “defender’s” travails with his Tahoe hybrid’s brakes (earlier TTAC article)? And how a GM buyback is just another opportunity to screw the customer?