This year’s sales race in the mid-size segment is one of the most competitive in recent memory. 5 of the top 10 best-selling cars in America are mid-sizers, and automakers are pulling out all the stops in an effort to unseat the Toyota Camry from its standing as America’s best-selling car. But Toyota isn’t going down without a fight.
Sales figures as of May show the Camry in a decent lead over the #2 Honda Accord, ahead by nearly 16,000 units. But the Camry, which is down by 5.5 percent year-to-date, and incentive spending is nearly double that of the Accord, according to figures from TrueCar compiled by Automotive News.
At $2,750 per unit, Camry incentives are up by 38 percent, while the Accord’s $1400 incentive is down by 40 percent. The new model changeover explains the big drop in Accord spending, but the Camry’s incentives (like 0 percent financing for 60 months) is part of a broader plan that includes a big fleet sales program (current making up 20 percent of sales, and expected to level off to 15 percent, versus the Accord’s 1 percent figure) to help move metal. Toyota is gunning for 400,000 units in 2013 if necessary, a figure that may be hard to match production wise for other auto makers. Then again, one has to wonder how profitable the Camry will end up being when there’s such a relentless drive for volume at all costs.
Other challengers, like the Nissan Altima, Ford Fusion, Chevrolet Malibu and Hyundai Sonata, seem to be relying on high fleet sales, heavy incentives or a combination of both, to keep their numbers up. The Fusion’s numbers are particularly interesting. Despite sales being up nearly 22 percent year-to-date and Ford making noise about capacity issues, fleet numbers and incentive spending remains relatively high. Ford is spending about $2,300 per car, while fleet mix runs at 34 percent.
Even the Chevrolet Malibu, regarded as the dog of the segment, has a 39 percent fleet mix, despite conventional wisdom holding that GM is merely dumping these cars on daily rental fleets as a means of moving them off the lot. Still, Malibu sales are down 18.9 percent so far, and it will be interesting to see how things progress as sales of the refreshed model loom ever closer.
I took a coworker shopping recently. She had a loaded Camry (last gen) on lease and wanted to upgrade to an Avalon. Toyota’s car interiors are bland and boring.
I took her over to Hyundai and she walked out with a LOADED Azera for a considerably lower price and was so much happier.
I used to like Camry for it’s interior space, but now it’s my least favorite car and least favorite auto maker.
Beauty is in the eye, but what exactly makes the Azera interior more exciting than the new Avalon? Is it the fad of “I’m pulling the center pixel of a normal dash downward and calling it modern” style?
#1 Toyota’s interior colors seemed to be limited to BORING. The touch panels suck.
#2 The interior headroom is INFERIOR to the Azera.
#3 The seats in the Azera are much richer.
#4 Warranty is better.
#5 Price is more enticing.
I like my seats to be billionaires too
The Azera’s use of technology is fairly high compared to a lot of it’s competitors. It has a more pleasing, classy looking dashboard, the materials look and feel better, the cabin color schemes look great (the Azera’s seats in saddlebag leather are absolutely beautiful).
By comparison, the Avalon’s interior feels more at place in a $25,000 car than one that can easily break $40k. It has some of the most unsupportive, collapsable seats I’ve ever sat in, and the dash looks and feels pretty cheap.
I found the Avalon’s exterior very attractive, like a toned down Azera, which I had previously test drive, but after having a bad experience with my 2010 Kia Forte a few years back, didn’t want to buy Korean. Turns out the Avalon is by far the worse buy, and it can be much more expensive, for less stuff, to boot.
Nice to see you Tuff Juff.
I fell out of love with Car and Driver when they ranked Avalon above the Azera, Cadenza, 300, Charger, and Impala2014.
I might have put the Cadenza at #1 for FWD and the 300 at #1 for RWD.
Hey!
I don’t know how but I almost missed the Cadenza’s existance somehow. Then, when I saw it at a local Kia dealership, and saw the sticker, I felt it probably had to relate more to the Genesis sedan than the Azera, so I’m surprised to hear it’s relation. The Azera was realllllly nice. Probably the best new car you can get for $30-33k, for the featureset.
Kia’s sedan styling has me jealous though… a neighbor has an Optima, and even after my Forte fiasco I can’t help but wonder what it’s been like for her to own such a beautiful car.
Also, RE: Toyota… I am really just shocked and saddened by their quality. I admit to only having sat in a handful of currently on sale Toyotas, but the Avalon and Venza I sat in, two of big T’s most expensive offerings, both disappointed, big-time. I know the Venza has had some complaints with interior quality since it went on sale, but man it was bad.
I feel like Kia really missed the bar with the Cadenza. It looks so much like a 5-Series knockoff that I’d rather have the Optima than a Cadenza.
As far as the Azera, it was indeed the nicest car in the class when the Avalon was still the AARP ride of choice and when the Impala was still the reigning fleet queen. But I do think the Azera has been decidedly outclassed by the 2013 Avalon…
The interior material quality on the new Avalon and RAV4 is absolutely dismal, IMHO, and the Camry ain’t much better!
Even my 2013 Accord isn’t perfect (though it’s better than its predecessor, for the most part); 3,100 miles and still tight as a drum. Have to give credit where credit is due to GM and Fiatsler, though some of the stuff in the GM interiors is a little over the top, e.g., the dash top in the Impala; I suspect that with so many plastic bits coming together, rattles will overtake a typical Ford interior in short order.
Ford and others (but mainly Ford, for reasons to follow) who adopt widespread use of turbocharging in their mass market commuter cars and light duty trucks are going to get a massive spanking in the form of lost market share/conquest defectors to competitors in 2-3 years.
There’s a GREAT article I will link here that merely states the obvious and massive reliability/durability issues associated involved with turbocharging gasoline engines.
This will become even MORE of an issue now that lower viscosity oils (present 5W-20 and soon to be required 0W-20) will be mandated and in long terms use in such turbocharged gasoline engines.
Bearing seizures and catastrophic turbocharger failures will become increasingly common in the years to come now that small displacement, turbocharged petrol motors have been introduced in relatively heavy passenger cars and light duty trucks, especially given the regulatory mandates forcing the use of increasingly lower viscosity oils.
I often emphasize the fact that Honda, Toyota and Mazda, for the most part, have stayed as far away as possible from turbocharging the gasoline engines in their volume selling vehicles, and will continue to do so for as long as they can.
http://viewer.zmags.com/publication/35ca7263#/35ca7263/20
I sat in the Azera at a Hyundai dealer, and was amazed at how cheap the interior was. The sales drone also tried to tell me it won the Ward’s interior award, which it didn’t, the Avalon did. The dash in the Azera was hard rubber and there was more use of hard plastics on the door panel and the cheap switch gear. It’s no surprise how this thing is a sales dud.
The Avalon has by far the best interior in this class, materials wise. You may not like the design (I do), but the fit n’ finish is superb, and that’s been validated in every single review, and the Ward’s Auto interior award. What does the Azera have going for it?
As for the 300, that’s easily the worst. The dashboard is made out of an old tire.
Surely the old tire was soft, which is all that matters is you read reviews (including those at TTAC).
I agree. The Avalon is very nice, and I think it says “stylish professional” the best. But the 300’s dash does not feel like an old tire.
I happen to be a fan of the 300’s interior, but to each his own I guess. Chrysler makes one of the best nav/infotainment systems out there, much more responsive than on MFT or my….. second gen? MyLink in my 13 Equinox.
The new Impala has a pretty awesome interior and overall is a very compelling car,albeit one that you can price into lux territory quickly if you’re not careful.
As a 2ND time Chrysler 300 buyer – soon to buy a 3rd (392 with 8 speed), I AGREE that Chrysler’s interior isn’t all that. The Azera and Cadenza make the 300’s interior look amateurish because their tailoring is so damn high in quality.
The Imapala only looks nice in a high-end trim with bright colors and the Avalon’s is as boring as watching flies have sex.
But I don’t go to a Chrysler dealership looking at the interiors. My concern is the power and technology package’s practicality.
@Cressida, we get it, Toyota = good, everything else = not as good.
In reality, the new Chrysler 300 has one of the nicest interiors available under 100k. I actually prefer it over the Bently GT which has much of the same quality materials, but is too gaudy.
BTS,
I agree 100% on the Impala. Anything below a 2LT (which is $34-35kish, if I’m not mistaken, with the 3.6) or a 1LT with some options, is slightly disappointing.
Also, putting those cool LED fog lamps on just the top model or two is slightly disappointing. They look pretty good, and the lower front fascia looks rather odd without them, IMO.
One thing’s for sure: the seats in a higher specced Impala or Azera make all kinds of “leather” seats look plain silly. I recently test drove a $40k Edge Limited whose “leather” seats made me want to cry.
The Cadenza’s interior embarrasses the Avalon’s (but then again, so the does the Optima’s in comparison to the Camry’s).
As for the Azera, limited supply for the US market as it is neck in neck with the Sonata as the best selling Hyundai in Korea.
But overall, Kia did a better job with the Cadenza than Hyundai did with the Azera and the Cadenza went into production in 2009.
While the interior design is a bit overly busy, GM did a really good job on the Impala.
Easy.
Toyota Camry Prius
Toyota Camry Prius C
Toyota Camry Corolla
Toyota Camry RAV4
Toyota Camry Highlander
Toyota Camry Tundra
May hurt their other sales figures, but Camry’s will be flying off the lots.
That would be the 1980s Oldsmobile model. Cutlass everything FTL
Cutlass everything is still better than the Lumina minivan.
True, The Lumina APV (APV must stand for, “used during part of the production run”) was a miserable branding effort. It was definitely no “Cadillac of minivans,” as the film adaptation of “Get Shorty” dubbed its Silhouette cousin.
Since they already do that with the Prius to get the huge sales increase ( and have in the past with the Camry Solara, and the Corolla Matrix, I wouldn’t put it past them, but to make it right I thinly you have to have all three top model manes in there, something like the Toyota Camry Corolla Prius, that way it would count toward all three nameplate’s sales depending on which one they want to brag about being the top seller that month.
Solara is nothing more than a two door Camry and the Matrix is a Corolla wagon. The Matrix I think should be separated, but there is no reason the Solara had to be. I don’t see Honda and Nissan splitting their coupe sales up.
no mention of resale value, H/K products lag behind still in resale value, despite their warranty.
I agree, but it seems for many in the market for a new ride, resale is not high on the list of concerns.
I think you’re right but I still find that completely inexplicable. If I was of a mind to trade in every 3-5 years, resale value would be one of my highest priorities, otherwise it’s just extra money flushed down the tubes.
I am in a similar mindset. Some unique stuff (Vette, Mustang/Camaro, Hemi Charger, AMG Benzes) you might have a “screw resale” attitude toward because you want it. But if your shopping new beige sedan, they’re all pretty much the same and for me the numbers/resale argument becomes tantamount.
The other part of it is if you must have [insert beige car] get it CPO and save 1/3, buy the dip so to speak.
“get it CPO and save 1/3, buy the dip so to speak.”
A 3 year old Avalon/Camry is going to be 1/3 of invoice minus incentives price new vs. a CPO Avalon? I don’t think that’s the case.
I agree with you on that, ES350 (and I assume Avalon) depreciate about 25% in the first two years/25Kish. However its competitors in the beige arena do depreciate closer to 35% in the same period. In the case of Hyundai, 2011 Azera Limiteds are doing mostly mid 17s on the block regardless of mileage, trade most likely will be below this figure. In 2011 invoice was 27,900 and MSRP was 30K according to AOL autos.
17500/27900=0.627 or rounded up 63% for a 37% decline in the period. Figure trade will be less than 17500, so when you go to buy it CPO it retails around $20K (around here according to autotrader), and you talk them down to 18ish close to the 1/3rd invoice figure, still giving them a nice 1K-2K cushion depending on how they acquired it.
But you do have to consider the fact that the 2011 Azera was a relatively undesirable car from the years of Anonymous Hyundai, and one that was followed by a drastic redesign. I believe I read somewhere that first-gen-Azera production actually stopped in mid or early 2010, and that all of the MY2011 Azeras were produced by or before that time.
I think it is irrelevant. Resale is figured on MSRP. You are more likely to have gotten a better price in the first place on the cars with “lower” resale value. It all comes out in the wash. And even then the difference between the best and the worst in resale value is <10%.
Resale value only matters if you are constantly trading cars for new models. Many people have credit so bad, they are lucky just to get into a new car. Others can’t front the payments. Many people buying cars end up keeping them well beyond the finance period – ESPECIALLY JAPANESE/KOREAN CARS.
I’m still seeing Honda’s and Toyotas from the 90’s out there.
Actually, for 2013 models, ALG ranks Hyundai 2nd (after Honda).
Which do you think is going to retain its value better?
The 2013 Elantra or the 2013 Corolla which Toyota has been pricing really aggressively as well as being a rental fleet queen.
Someone needs to educate me here, but were I part of an executive team I would be pushing for the Honda model all day, every day, over the volume-at-all-costs approach.
Okay, so let’s say Honda sells 16,000 fewer units for the year than does Toyota. Let’s call it 32,000 units fewer. If Honda’s incentives are roughly half those of Toyota, it seems to be that Honda is coming out on the better end of the deal.
I don’t get the drive for the sales crown if it means sacrificing your brand value and profitability.
But Honda won’t get a nice headline of #1 mid sized car!
Yup – you’re right. This “volume at all cost” mentality is what, historically, got the domestic makes into some trouble. Like anything, there’s a balance here. I believe Toyota knows they’re playing with fire a bit here. Until it becomes normal course of business, probably not a huge deal. But pushing for an extra 10-20K to keep the #1 lead is probably worthwhile. Once they start pumping out more than 20K units that require significant incentives just for bragging rights, they’re in too deep.
When Camry is all new (and very much improved, like the latest Accord), while Accord is getting longer in the tooth, the incentive “requirements” may turn a bit.
Also, when you are number one sales wise, by definition retaining existing customers make up a larger share of total concern that acquiring new ones. You cannot do that if you don’t put up a solid effort to prevent them from defecting every time a competitor has a new model out. Next time the customer comes back to buy, Camry may be the fresh model, hence more profitable.
Except the Camry isn’t that much older than the Accord, Altima and Fusion.
Toyota just went thru the motions with the latest Camry – not really updating it significantly (basically same powertrain and sheetmetal).
The previous Camry already wasn’t holding up well to the competition (especially it’s chinzy interior) so the “new” but not really new Camry is lagging even further behind (Toyota didn’t even do a good job improving the interior which had gotten tons of criticism for being overly cheap).
Toyota doesn’t want to give up the mid size OVERALL sales crown – but that is not what the prize they should really covet. Instead Honda’s Accord has held the most important sale crown – mid size RETAIL. The latter is more indicative of profitability as the higher the % of retail customers (in this case 99% for Accord versus 70-80% for Camry) – the greater the strength of the brand. Though Honda now peddles toasted white bread with Nutella spread as excitement with its point A to B 4 wheeled appliances – retail customers vote with their wallet to choose the Accord over the Camry. The Prius OTOH whups up on Honda’s lame hybrid lineup.
Fleet sales are not all bad as if you need extra production volume to make economies of scale it does make sense – however if you rely on it (as Toyota now does with its Camry and Corolla) too much it tarnishes the brand which reduces resale value. Another killer factor is financing for deadbeats which hurt the D3 and Mitsubishi very badly in profitability as the in house financing arms took major losses doing repossession and resale of said vehicles.
Summarizing it up – Toyota is bragging they are king of the mountain but Honda has greater rights to the gold mine inside it.
Malibu had to be one of the most underrated, under promoted vehicles Chevy had. I had a 2012 LTZ rental a couple of times last year and I was blown away at how fast and nimble it was, I would have bought one had it been offered in an AWD, I liked it that much… Then they changed it. *sigh*
Why do they do that?
Great question.
The Camry, I’ve said for years, you had to be ignorant to buy. Until the last refresh, when they re-did the Camry in 2006 it came out of the gate as one of the worst mid-sized cars available (compared to it’s competitors).
Now the new Malibu… you have to just be stubborn to buy one. “Her der I like muh Che-vuh Peek-Up Tree-uck, I gots ta get me uh Che-vuh caaaah-er, tew!”
When it came out in 2006, it was one of the best there was. Show me a car back then that came with a 268 HP V6 with a 6AT, a 40 MPG REAL WORLD Hybrid, reclining rear seats at a non-luxury badge price. None of the competitors had those at the time.
And the dull as dishwater 4-cyl automatic biegemobile Camry that made up 90%+ of the cars they actually sold? Fabulous, that one.
Just as competitive as the rest of the lineup. Or are you trying to argue with me that the 2006 Altima with its cheap interior, 2006 Malibu, 2006 Accord with hard plastic dash, or 2006 Fusion with bland body and hideous Gilltte Razor blades was somehow better?
I would’ve taken a first gen Fusion or Pontiac G6/Saturn Aura over the last gen Camry any day. I actually did – I have fond memories of my old 07 G6 GT. Decently fast performance marred by a somewhat confusing 115 MPH governor, quiet interior and decent for it’s time soft touch dash. Much better place to be than the gross light green colored Camry interior.
If you want a really good, fun to drive car, cheap, it’s an excellent buy
Toyota has been buying the number one spot for a few years now with their high incentive spending. They obviously set a number of cars they are going to produce for the US market and then do what ever it takes to move them. Though they still have trouble selling all of them. Cars.com still shows 6 new 2011 models and 18 new 2012 Camrys in the Seattle area. Compare that with 11 2012 Altimas, 2 2012 Accords, 1 2012 Fusion, and 0 new 2012 Malibus and Sonatas.
Your evidence is contradicting your conclusion. Toyota may spend more on incentive than Honda, but not more than Nissan and GM. If there are 18 leftover Camries and 0 Malibus, the only explanations would be:
1) GM piled much more cash on the hood to move the metal, OR
2) cars.com is not a proper place to do your research. Maybe Toyota dealers prefer to use car.com and GM dealers use other means.
The only explanation would be there can be nothing bad about toyota or honda.
Now that this sight has turned from a celebration of two dying companies and is beginning to give a realistic take on the entire automotive landscape, its funny how some of the biggest cheerleaders are starting to find lots and lots of negatives.
I don’t get the attraction to the Camry, or to a lesser extent the Accord. When shopping for a mid size sedan a couple months ago, I looked (briefly) at both. They had about as much style and personality as a corn dog. After driving the new Fusion (nice) and the Sonata SE turbo and Optima SX turbo, I chose the Kia easily. Simply much more style, power, features and overall just a better package than any of the others. Love it after 2 months and 12k miles driven!
That is a ton of miles for the first 2 months, did you christen it with a really long road trip or do you just commute hundreds of miles per day every day?
I cover 6 states for my job, about 1200-1500 every week…
It’s called “attention span”.
People who judge cars based on 2 months operation typically don’t like Camry that much. People who judge cars based on 10 years of operation do.
See, this is the problem when an automaker has in mind not being a successful business, but some sort of Pinky-and-the-Brain-ish plot to take over the world.
I think I’ll stick with Mazda and Kia.
I await Bertel’s latest you-Americans-are-morons explanation of why this can’t possibly have anything to do with the devaluation of the yen.
Since most (99%) Camrys are built here and the yen isn’t really involved, it will probably be a fairly short explanation.
Not 99%, 100%.
Toyota hasn’t done anything to upgrade the Camry to the level of the Sonata, Accord and Altima.
And they won’t, as long as the Camry maintains its sales levels.
Toyota will make sure that the Camry maintains its sales levels. Whatever upgrades or updates Toyota makes to their vehicles are directly linked to a reduction in sales.
Been that way since the end of WWII.
I would sure like to know what’s special about the Sonata and how the Camry “isn’t up to its level”.
For starters GDI and TGDI, and lots of advanced electronics, not to mention the warranty on Hyundai products, and of course…. price!
Don’t misunderstand. I am a Toyota convert. Own a 2008 Japan-built Highlander Limited 4X4 and a San Antonio-built 2011 Tundra 5.7 SR5, but even I can see that Toyota is lacking behind the rest of the industry when it comes to innovations and upgrades.
But as long as people keep buying Camry and other Toyota products, why put more money into updating and upgrading them?
Those Gas Direct Injection engines and turbos still lag the Camry’s NA engines in every way. The Camry Hybrid had better acceleration and fuel economy numbers than the 274 HP Sonata turbo in a MT test last year.
What advanced electronics does the Sonata have that the Camry doesn’t? Comparing a Camry LE to the comparable Sonata, you don’t get Bluetooth streaming audio or display audio with a touch screen, which is standard on the base Camry. The Camry Hybrid and Camry V6 get better fuel economy and power and acceleration than the comparable Sonatas.
Hyundai has done an amazing job getting to people to perceive the Sonata as something it isn’t thanks to their new styling theme. But it doesn’t drive any better than the Camry and is a lesser car in many ways. The Altima and Accord also have some things that are inferior that are overlooked.
“I await Bertel’s latest you-Americans-are-morons explanation of why this can’t possibly have anything to do with the devaluation of the yen.”
LOL.
Toyota started selling Camry from 1982. The yearly sales grew from 0 to about 400k. The Yen went from 1/240 USD to 1/100 USD.
The Altima looks so much more premium than the Camry (assuming matching trim levels) that I’d most likely go with it instead.
Just leased a Altima S for my wife, I picked it up in the AM and drove it for my 60 mile r/t commute. Color me impressed, it looks nice, interior is not bad (This is a S model remember) handling is decent and it has a fair amount of pickup if you floor it and let the CVT pin the tach at 6100, rubber banding was much improved compared to my Cube. MPG for my highway drive averaged 36 according to the computer probably not accurate but pretty impressive given that this thing is a huge sedan in my opinion.
If you think about it scale wise, the new Altima has to be VERY close to a 2011 STS. And that was considered full-size, right?
A friend bought a ’13 Altima and took me for spin, its about the size of my Grand Prix give or take a few inches of additional rear leg room. In the past those size cars were considered mid-size, although the definition of “mid size” may have changed.
I’m only comparing these two because I’ve owned them both and they were both considered “midsize” at the time of production.
2002 Volvo S60 – 180.2″
2013 Nissan Altima – 191.5″
*2011 STS – 196.7″
Those 11.3in really made a difference IMO, I’ve driven the first gen S60s not very big cars. So if anything based on what you posted the definition of mid-size has grown.
Ok so the STS still wins, but considering the growth of all models – wow!
When comparing an old S60 to a new Altima it gets even more interesting.
2002 S60 = 3,146 Curb weight and it’s making 168HP in base trim.
2013 Altima = 3,114 Curb weight and it’s making 182HP with the 4-banger.
Plus it’s 11.3″ larger. As I’ve not had a chance to push the Altima yet I cannot comment how the two compare handling wise.
Reason I am curious about all of this is my wife is a badge whore and while I’ve had an all European stable since 1995 newer vehicles are getting so good for every day use I fail to see the point in paying the premium. It’s a point of contention with my wife and I, I pretty much pushed into the Altima lease – “Don’t worry honey, it’s only for 3 years” or until she get’s back to work then she can buy whatever the hell she wants.
That said I could see any of these “budget” midsize cars keeping me pretty happy loaded up to taste. Unless I want to bust blow past 40K I don’t see the point in stepping up to any of the Euro/Japanese luxo brands.
In another year I’ll trade in the Cube.
I have had my 2013 Altima SV for two months now, and am very impressed. The ride and noise levels are much improved over the previous model, and it is even roomier than before. I test drove the Camry and Accord, and it wasn’t even close.
The only Fusions I’ve seen in CT have rental bar codes. I believe almost 1/3 of Fords are fleet sales.
No matter what Toyota does, the Accord will outsell the Camry, retail. As for the Optima and Sonata, they’re acceptable rental cars, but strictly second tier. Their turbos are slower are less efficient than the larger sixes of the first tier competition and their normal fours are crude in comparison.
With the Koreans you formerly got more than what you paid for, now, not so much, if at all.
H/K stopped being “strictly second tier” long time ago. Don’t blame you for liking Japanese cars, but they are not as good as they used to be(I know it’s a shock to you, but it is what it is). Like it or not, Korean cars are doing better than Japanese cars all over the world(India, much of Europe, Brazil, China,,,etc).
According to Consumer Reports, the Sonata/Optima with the T4 aren’t materially slower than the V6 Camry (6.6s to 60 MPH vs. 6.4s) and the Camry only has an advantage of 1 MPG on fuel economy according to CR’s observed fuel economy.
As for being 2nd tier and rental cars, that would more accurately describe the Camry than the Optima or Sonata (esp. the Optima).
The Camry is the king of import fleet sales for the midsize market and has been soundly beaten by the OLDER Optima in every comparison test.
Furthermore, the Optima has an ATP that is a good bit higher than for the Camry.
The Camry’s ATP is $23,800 whereas the Optima’s ATP is $25,500.
Guess you get what you pay for (such as that nasty, cheap interior in the Camry).
Well good luck Toyota, because the volume at any cost, stack ’em deep, sell ’em cheap, we’ll make it up on volume, cash on the hood, and, “hello Avis,” has worked out soooooooooooo well for Detroit. Never mind that Toyota will write paper down to FICO 520 (which basically means you have a pulse)
“Never mind that Toyota will write paper down to FICO 520 (which basically means you have a pulse)”
The elephant in the room.
If volume at any cost, stack ‘em deep, sell ‘em cheap, we’ll make it up on volume, cash on the hood, and, “hello Avis,” hasn’t worked out soooooooooooo well for Detroit, why is Ford putting so much cash on their media-blitzed Fusion and still sending a third of them to the rental lots? Or GM with 39% of Malibus? Any guesses on the numbers for the also-rans from Fiat?
Ford tried to create buzz that Fusions were selling beyond expectations and had scarce inventory.
Didn’t work. The Fusion must be a huge disappointment for Ford considering all the hype. CR really did a job on them, noting their poor assembly and the failure of the Ecoboost engines to perform as advertised.
Fleet sales aren’t discount specials.
Thornmark: you are right with respect to capacity issues with the front fascia supplier at the beginning. You never want to strangle your production during a media launch.
As for the rest of your post, you’re smoking crack or you don’t know what you’re talking about. Hermosillo has been running at maximum capacity.
I don’t see the disconnect. They’re building lots of Fusions, spending lots on incentives, and sending a third to rental fleets. Surely, they’d prefer to be in a position to sell 99% of them retail with half the incentives like Honda.
The take rate of packages with MFT is higher. Transaction prices are higher than competition. Ford doesn’t turn down buyers, fleet or retail.
I’m failing to see your point. Demand isn’t decreasing and a 2nd plant is about to come online to produce Fusions. Retail and fleet all depend on what sales structure you prefer. The plant makes the same money when the product is gate released. So… again, what is your point?
I would bet Ford wishes they were in Toyota’s spot where 20% of the production goes to fleet. If I were in Ford’s position, I would not open an additional Fusion plant until the fleet market share was in line with Camry.
This is a point that seems to get lost these days. This is NOT the ’90s when the Detroit 3 actually OWNED the rental Big 3. Then, rental literally was a dumping ground for crap. These days, the rental companies do get preferred pricing just based on the volumes involved, but I doubt it is anything like what people on here imagine it is. It certainly isn’t dumping – they are buying all those cars. And they are not stupid, they buy reliable cars with decent resale value! A rental car in the shop doesn’t make any money (and po’s your customer), and when you are talking thousands of cars a few percent of resale add up to real money. Heck, if I was in the rental biz I would buy NOTHING but Corollas and Camrys – they are literally the perfect rental car!
High fleet sales percentages don’t hurt Ford – at least not right away – they hurt resale value for buyers because the market floods with used rental vehicles about the time some of the original private purchasers want to sell their cars.
I agree with your statements except to say I do not believe rental agencies necessarily buy cars with good resale, they seem to buy cars to fit their categories whatever they may be. Examples of this include the W-Impala, Buick Century, Ford Taurus, PT Cruiser, Chevy HHR, Dodge Stratus etc. I’m sure those Ws or the old Tauri were cheaper on invoice vs Camcord and thus they were bought to fill the midsize category, resale be damned. Depreciation is tax deductible in their business and for their limited periods of ownership it probably doesn’t matter as much vs a consumer who might keep a car 4+ years and care about his resale or reliability beyond the 36k warranty.
@Kix
That’s also a good point.
Some other things to remember…
Not all fleet is Rental. Not all Rental business is bad.
Ford is usually around 14% Commercial Sales/14% Daily Rental/4% Govt in making up their 32% fleet #’s overall.
These days, its not so much the ‘resale’ value 3 years later to a consumer purchasing the vehicle as it is the residual value that drives the monthly lease payment that matters.
Yes, fleets are the ultimate connoisseurs of mid-sized cars. They care not for price and are repulsed by depreciation, which is why they buy 52% of Chrysler 200s.
You’re such an industry insider, CJinSD. I believe everything you say.
I got all my inside information right on this very page by reading the article at the top and Derek’s comment right below this one with the AN/Polk data on the Chrysler 200’s 52% fleet rate. Sorry if the fleet rates for the Fusion and 200 prove the absurdity of your assertions so comprehensively that you feel compelled to call me a liar.
Then your inference to fleets drawing down the price from retail was my mistake. And your quote “stack ‘em deep, sell ‘em cheap, we’ll make it up on volume” was just my lack of comprehension of the English language.
The only thing absurd is your crazed bias. I am not defending Ford as I’m not really a fan. If you choose to ignore info that I hand out for free, at least minimize your usual bitching. Edit: if you really want to attack fleet sales, at least be intelligent enough to attack the true downsides to it. There are plenty. You just are saving face at this point and it’s uncharacteristically weak of you.
The Fusion has an ATP that is whopping $2,772 more than Camry.
Also, only 59% of Fusion fleet sales is to rental fleet whereas 92% of the Camry’s fleet sales is to rental.
Take into account the massive nos. of Camry sales and Toyota is pumping a lot of Camrys into the rental business.
Well I am rather shocked that somebody did not mention Chrysler as the fleet king/queen.
I think that’s because everybody knows Chrysler is the fleet admiral. What’s surprising is the numbers from these other companies that we normally think of as less fleet dependent.
Chrysler 200 is the winner with 52% fleet per AN/Polk data.
Toyota got to where they are by producing conservative vehicles.
Toyota’s are overpriced for the technology you get on average.
They target the people who know little about cars and want to know that when they sit in the car put the key into the ignition it starts every time (supposed to start).
That has been their marketing platform for decades.
But, mindsets and cultures change, like the young kids who rather have the latest and greatest smart phone that cost 1/4 the price of a second hand car.
I think Toyota has a bit of a catch up to match its rivals. The Camry, Corolla, Hilux, Tacoma are really uninspiring at times. Even look at a standard base model Toyota, 5 speed manual or 5 speed auto, few options inside etc.
But they are reliable. There will some Toyota fans who will not like what I wrote, but its my opinion.
“But, mindsets and cultures change, like the young kids who rather have the latest and greatest smart phone that cost 1/4 the price of a second hand car.”
Those young kids are known as people that don’t know anything about cars. People that know about cars buy ones that work, which is why people gradually shift to Toyota ownership as they learn from experience. Not everyone can learn from experience, but there are words for them too.
It does not always work towards reliability with age and experience. In my short ownership career I owned 2 Chrysler products, let’s tag them C1 and C2, and 2 Toyota products T1 and T2. As expected, Toyotas were more reliable. Nonetheless, I traded T1 for C2 because I was bored (and wanted more capability). What’s a little t-case exit seal leak between friends, they fixed it in 1 day. Heck I know a 70-year-old guy who drives a Corvette, bought new of course.
“What’s a little t-case exit seal leak between friends”
I am laughing. Hard.
“But they are reliable”
That’s the key. Toyotas may be dragging up the rear end in every vehicle category with engineering advances at least a couple years behind the rest of the industry, but so long as they always lead in reliability, they have nothing to worry about.
@rudiger
I’m not a Toyota fan because I think you are paying a premium for nothing.
Yes, as I did point out they are reliable. But I wouldn’t buy one.
My brother drove Toyota Camrys for years. He works as an attorney and puts on about 50K miles a year driving primarily for business, getting reimbursed 56.5 cents a mile. He typically got 250K out a Camry with a minimum of repairs. The last Camry was in an accident and got totalled out 3 years ago. He took the insurance money and got a BMW X3, he’s never owned a luxury vehicle before, to keep up with his fellow attorneys. I’d be curious if he replaces the X3 with another German vehicle, or if he goes back to driving Toyotas.
Only Toyota has Jan.
This story is nothing but a hit piece on Toyota written by a Detroit operative. Notice that you don’t see hit pieces written on Detroit products by Japan operatives. It is clear the Japanese automakers have more moral integrity than Detroit automakers. Detroit automakers should spend more time fixing their reliability problems than relying on hit pieces.
I don’t see Derek as a Detroit operative, if you study his body of work I think you’d agree.
This story, which is nothing but a negative ad against Toyota, appears to have originated in autonews.com. The beneficiaries from this hit piece is Detroit automakers. I see quite a few auto blogs are spreading this trash.
BS – did you read Derek’s fleet sales rates for the Altima, Fusion and Malibu? The Camry is even half even half-way there yet.
Your seeing ghosts where there are none.
I thought I was an anti-Detroit shill for Tokyo/Wolfsburg/Seoul.
If Toyota puts enough money on the hood folks will tend to forget about the IIHS small overlap test fail.
If Ford puts enough money on the hood folks will tend to forget about the poor brand ranking in Consumer Reports, as well as the cramped rear seat. Usually, a poor Consumer Report ranking is a resale value killer.
The test that the others besides Honda, who had prior knowledge of it, flunked too?
Numerous older models did better than the Camry – which isn’t yet 2 years old.
So many Toyota haters focus on so much sizzle and not enough on steak. Who cares about soft touch plastics, automated manual transmissions, small displacement turbocharged engines replacing V6 engines, DLO and other trivialities or disappointments that in reality don’t make a car any better. When it comes to durability and reliability, no mainstream car beats a Toyota.
Considering that Toyota has led in recalls 3 out of the last 4 years (the other year finishing 2nd to Honda), Toyotas aren’t like what they once were during the 1990s (before Toyota started drastically cost cutting).
And as for “reliability” – kinda easy when Toyota has been basically using the same engines and transmissions for years (Buick was once at the top of the reliability rankings when GM let their lineup get really stale, but at that point, had long worked out all the kinks).
Toyota should either cut prices or increase incentives further to take advantage of Yen depreciation vs. the Dollar. But, they appear to be hesitant to take such action. Such hesitation is warranted after the Obama administration sanctioned Toyota via the recall attacks several years ago. Another factor in the hesitation is Ford’s constant grandstanding on Yen depreciation, even though the current value of the Yen is stronger than before the financial crisis. Toyota should have some courage and put the petal to the metal.
Where I live (sw louisiana) the Camry is being offered at 0% for 72 months.
“Other challengers, like the Nissan Altima, Ford Fusion, Chevrolet Malibu and Hyundai Sonata, seem to be relying on high fleet sales, heavy incentives or a combination of both, to keep their numbers up. The Fusion’s numbers are particularly interesting. Despite sales being up nearly 22 percent year-to-date and Ford making noise about capacity issues, fleet numbers and incentive spending remains relatively high. Ford is spending about $2,300 per car, while fleet mix runs at 34 percent.”
— Don’t know why DK included the Sonata in the remark on “high fleet sales” when the Sonata’s fleet % (17%) is well below the others, much less below that for the Camry.
As for the Fusion’s fleet %, 41% of that is to govt./corporate fleet while 92% of Camry fleet sales is to rental.
Take into account the total no. of Camry sales and that’s a lot of Camrys being pumped into rental fleet (pretty much close to the total no. of Malibus that go into rental fleet).
Also, the Fusion’s ATP is nearly $2,800 higher than for the Camry (the Camry’s ATP is not only a good but lower than for the Fusion, but the Accord, Altima, Optima, etc. as well).