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Toyota sees chance as sedan rivals drop out

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Toyota sees chance as sedan rivals drop out
June 30, 2018 @ 12:01 am

http://www.autonews.com/article/20180630/RETAIL01/180709980/toyota-camry-sales-sedan-rivals

 

DALLAS — Toyota is treating plummeting U.S. car sales as an opportunity, not as a worrisome trend

threatening one of its biggest strengths.

As light-truck sales began to surge several years ago, Toyota executives scrambled to meet crossover

demand even as they suggested that car sales were stabilizing.

The same thing happened last year as the mix tilted even further. But even with the market approaching

a 70-30 split in favor of crossovers, SUVs and pickups, Toyota still sees cars as core to its identity. It has

spent billions of dollars overhauling its sedans and hatches — and making sure its franchise player,

the Camry, remains No. 1.

 

Car bias

“We’re always going to have a little bit of a bias relative to industry numbers towards passenger cars,

whether it’s Prius, whether it’s Corolla, whether it’s [Lexus] ES,” said Jim Lentz, CEO of Toyota Motor

North America.

“We think we have a competitive advantage in things like hybrids. So we think we’re always going to be

able to provide a value proposition to the customer in passenger cars, and as a result hopefully get a

big share,” Lentz told Automotive News.

 

 

Regardless of what Ford and GM do, Toyota looks like it will be hanging in there offering more cars to buyers

and no doubt contnuing strong sales as those two exit certain segments. So I wonder whether there will be a

"face saving" move from Ford to double back on cars with an "Active" Fusion/Mondeo....in Hatch or S/Wagon.

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Well, since their big foray into F-150 territory went bust...they have their fall-back position of putting more cars out there...

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Each company’s position is unique. Ford has trucks and vans and crossovers. For Honda and Toyota their cash cows have always been cars.

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Each company’s position is unique. Ford has trucks and vans and crossovers. For Honda and Toyota their cash cows have always been cars.

.

Yes, and that market is shrinking while trucks and SUV/CUV sales are growing...

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Yes, and that market is shrinking while trucks and SUV/CUV sales are growing...

 

A wise man once said....Don't under estimate a company (Toyota) with a massive cash war chest.......

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Each company’s position is unique. Ford has trucks and vans and crossovers. For Honda and Toyota their cash cows have always been cars.

 

How are they able to make money on cars? :headscratch:

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Yes, and that market is shrinking while trucks and SUV/CUV sales are growing...

 

Toyota has more models in the truck and SUV/CUV segments than any other brand in the U.S. market.

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How are they able to make money on cars? :headscratch:

No unions!

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Ah the old blame the union bit

 

A classic

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Unions are only a small factor. They sell cars globally. Their profit margins in the US have typically been lower than Ford and GM, but they make it up in exchange rates. They also don’t seem to invest as much as Ford and GM in new vehicles, new drive trains and new platforms.

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The Camry's share has risen 5 percentage points this year vs. the first five months of 2017, Lentz said. "We actually have people waiting in line to get two-tone XSE [trims]. When was the last time somebody waited in line for a midsize passenger car? It's been a while."

 

Camry sales rose 2 percent in the first five months of this year. It’s the only one of the 10 top-selling midsize cars to post an increase in 2018.

 

 

2018 Camry Hybrid also has waiting lists right now. Don't know if Toyota cut back on fleet sales of Camry recently. They increased fleet sales more than usual in late 2017 but said they would pare back afterward. Toyota has kept rebates and other incentives to retail customers on Camry among the lowest in the segment however.

 

Standard rebates on midsize cars, ZIP code 76133.

  • 2018 Camry, $500 if financed through Toyota Financial Services, $0 otherwise
  • 2018 Accord, $0
  • 2018 Altima, $4,000
  • 2018 Fusion, $3,750
  • 2018 Sonata, $3,500
  • 2018 Optima, $4,000
  • 2018 Malibu, $2,000
  • 2018 Passat, $0
  • 2018 Legacy, $0
  • 2018 Mazda 6, $1,500

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While Toyota doesn't have a big gun like F Series (Tundra is modest sales per month)

they do have quite a few Cars and Utilities for buyers to choose from and of course

their hybrids Prius especially accounts for quite a few car sales...

 

Camry is popular but I remember Toyota's head mentioning profitability of US based plants

was much less than if Toyota exported Camry from Asia - pressure on nth America like

has been done in other countries (Australia) where Camry production was stopped and

changed to imports from Asia.

 

Shoot, Toyota is already planning to have two RAV4 plants in the next few years time,

that tells me Camry will become less important sales wise as I bet Toyota makes

way more profit on its Utilities.

Edited by jpd80

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Unions are only a small factor. They sell cars globally. Their profit margins in the US have typically been lower than Ford and GM, but they make it up in exchange rates. They also don’t seem to invest as much as Ford and GM in new vehicles, new drive trains and new platforms.

 

And volume.

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No unions!

.

Yes!! Thats the answer...make sure American workers earn less and live like they are in a third world country so that Corporate fat-cats and their Wall Street doppelgangers can keep raking it in.....

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Yes!! Thats the answer...make sure American workers earn less and live like they are in a third world country so that Corporate fat-cats and their Wall Street doppelgangers can keep raking it in.....

It was the answer to this question......."How are they able to make money on cars? :headscratch:"

Maybe you should read first then say something!

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It was the answer to this question......."How are they able to make money on cars? :headscratch:"

Maybe you should read first then say something!

.

Dude...I was agreeing with you.....

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No unions!

What many dont realize is the volume of Toyota workforce that are temps that make far less than the quoted hourly rates.

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.

Yes, and that market is shrinking while trucks and SUV/CUV sales are growing...

 

The best-selling Honda is now the CR-V. It shares a platform with the current Civic and Accord. I also believe that the RAV-4 has recently pulled ahead of the Corolla and Camry in total sales.

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What many dont realize is the volume of Toyota workforce that are temps that make far less than the quoted hourly rates.

So does Ford, GM and FCA, you just dont hear about that either.

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What many dont realize is the volume of Toyota workforce that are temps that make far less than the quoted hourly rates.

 

That's true but Ford also has a two tier workforce with tier 1 starting at $15 (I think). So on that front I think the total labor costs are pretty close now. Last time I checked Toyota's margins in the US were around 4%. Ford has a target of 8% and GM has been around 8% or more for a couple of years now.

 

It's not that Ford can't make money on sedans - they just can't make nearly as much as they can make on other things.

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It's not that Ford can't make money on sedans - they just can't make nearly as much as they can make on other things.

 

So, if you spend $1B on trucks/SUVs, you earn $80M in profit, but if you spend $1B on cars you only earn $40M.

 

Let's say you only have $1B to spend, where are you going to spend it?

 

Yup, on trucks/SUVs.

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So, if you spend $1B on trucks/SUVs, you earn $80M in profit, but if you spend $1B on cars you only earn $40M.

 

Let's say you only have $1B to spend, where are you going to spend it?

 

Yup, on trucks/SUVs.

 

Yes, and people don't realize that every company has a finite amount they can invest each year in both cash and people and other resources so doing a new Fusion means not doing some other project.

 

So you can do these 2 projects or those 2 projects - one set has the potential for 8% - 10% ROI and the other set may only be 2% or less. And one of those projects isn't affected by the volume of car sales or direct competition (Autonomous car management platform).

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Dude...I was agreeing with you.....

Sorry I didn't see it that way. My apologies.

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What's going on in the midsize sedan market is the same thing that played out with 2 door sedans, minivans and fullsize sedans... Ford bails out because it doesn't think it can be competitive in those shrinking segments. And the competitors get stronger and more entrenched in those segments. Eventually, some of these segments disappear completely (e.g. 2 door sedan), some limp alone (e.g. fullsize sedan), and some comes roaring back (e.g. midsize pickup).

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Yes, and people don't realize that every company has a finite amount they can invest each year in both cash and people and other resources so doing a new Fusion means not doing some other project.

 

So you can do these 2 projects or those 2 projects - one set has the potential for 8% - 10% ROI and the other set may only be 2% or less. And one of those projects isn't affected by the volume of car sales or direct competition (Autonomous car management platform).

 

This goes back to Alan Mulally's position years ago that Ford needed to concentrate on its core business and concentrate on strengthening the Ford Division while building a cash nest egg to weather a potential economic downturn and have the funds necessary to fund future product development.

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