The Ford brand is closing in on Toyota as the favorite of retail auto buyers, a sign of rising popularity of the Fusion mid-size car and Escape sport-utility vehicle, and of growing dismay with the Japanese manufacturer.
Toyota Motor Corp.’s namesake brand, a default choice of a generation of car buyers who admired its high quality, lost ground during the past six years amid recalls, natural disasters and stiffer competition.
Its share of the U.S. retail market fell to 13.5 percent last year from 16.3 percent in 2008, according to data provided to Bloomberg by IHS Automotive using Polk vehicle-registration records. Toyota’s 2.8 percentage point loss matched the gain of Ford Motor Co. (F:US)’s main brand, to a 13.2 percent share, over the same period.
Retail registrations are the best measure of the tastes of individual car buyers because they exclude bulk fleet sales to corporate and government customers. Toyota dominated the retail market before the recession, with top sellers such as the Camry sedan and Corolla compact. Those models now face tougher competition as car shoppers favor Ford models including the Fusion, which draws frequent comparisons to an Aston Martin, and a restyled, fuel-efficient Escape. Hyundai Motor Co. and Subaru, the auto unit of Fuji Heavy Industries Ltd., also gained ground.
“Before 2010, Toyota’s image was bulletproof, and while it is still strong, it’s not rock solid and as perfect as it was before,” Tom Libby, auto analyst for IHS Automotive, said in an interview. “It now appears their march forward has been slowed.”
The leader in total U.S. sales is General Motors Co. (GM:US), which has four brands including Chevrolet and Cadillac. Ford including its fleet sales and Lincoln brand is No. 2, followed by Toyota, which overtook Ford in sales by company from 2007 to 2009 before falling back to the third position.
Those rankings will hold again when February’s U.S. sales results are announced March 3, according to analysts surveyed by Bloomberg. Toyota, GM and Ford may all report declines, while Chrysler Group LLC (CGC:US) and Nissan Motor Co. post gains, according to analysts surveyed.
Light-vehicle sales in the U.S. may rise 0.3 percent in February to almost 1.2 million, the average of seven analyst estimates. The annualized rate, adjusted for seasonal trends, will probably tick up to 15.4 million, the average of 13 analyst estimates, from 15.3 million in February 2013.
Industrywide sales may even slip, Fred Diaz, Nissan’s U.S. senior vice president, said yesterday in Detroit, adding that he was “confident” Nissan would post a gain.
Toyota’s once-pristine image was tarnished, Libby said, when it recalled more than 10 million vehicles for problems related to unintended acceleration in 2009 and 2010, involving defective floor mats and accelerator pedals. The world’s largest automaker lost sales in 2011 after an earthquake and tsunami rocked Japan and shut down Toyota’s car factories.
Toyota’s U.S. retail market share fell to 12.4 percent in 2011, recovered to 13.7 percent in 2012 and declined again last year, the IHS data show.
“A fair number of people -- I was among them -- thought that after the recall situation and after the tsunami that Toyota would just resume where they were,” Libby said. “Lo and behold, they have not.”
As total U.S. auto sales rose, Toyota has increased sales by more than a half-million vehicles in the last two years. That is more important than its retail market share, said Mike Michels, a Toyota spokesman.
“Share doesn’t pay the bills, sales do -- that was and is our focus,” Michels said in an e-mail. “Toyota recovered an enormous amount of volume after the recession and Tsunami/Thailand floods impacted periods.”
Toyota will probably maintain its slight retail lead over Ford this year thanks to redesigns of its Corolla, RAV4 small SUV and Highlander SUV, said Jeff Schuster, an analyst with researcher LMC Automotive in Troy, Michigan. The Camry, Toyota’s top seller, will also receive minor design changes late this year, he said.
“Ford’s going to give them a run for their money over the next couple years, but at this point we don’t see them overtaking Toyota,” Schuster said.
Toyota Chief Executive Officer Akio Toyoda has pushed his designers to create more exciting cars after critics have dismissed the company’s products as “blandmobiles.” At the Detroit auto show in January, Toyota generated buzz and floor traffic with its red FT-1 concept that drew inspiration from the automaker’s Supra sports car.
“We’ve seen some indication that Toyota is going to refocus on design and basically bring sexy back or maybe get it for the first time,” Schuster said.
The looks of Hyundai’s swoopy Sonata sedan, Kia’s angular Optima sedan and Ford’s Fusion have attracted family-car buyers, Schuster said. Korea’s Hyundai and its corporate sibling Kia combined to control 8.2 percent of the U.S. retail market last year, up from 5 percent in 2008, though down from 2012, according to the IHS data.
“Vehicles like the Fusion, Escape and our hybrids have provided us with a tremendous amount of retail sales and share gain, particularly in the coastal regions in the west and southeast, areas that typically have been dominated by Japanese automakers,” said Erich Merkle, Ford’s sales analyst. The Ford brand’s overall retail sales rose 14 percent in 2013, he said, powered by a 21 percent rise in the west and a 17 percent increase in the southeast.
The closing quality gap among automakers has removed a onetime Toyota advantage, Libby said. The Toyota brand ranked seventh in J.D. Power & Associates’ Initial Quality Study last year, below GM’s GMC truck brand, which ranked second, and its Chevrolet line, which ranked fifth.
“In core car segments, where Toyota really had their strength and still has strength, there’s more legitimate competition,” Libby said.
Despite quality gains and praise from critics, GM’s Chevrolet brand also lost ground among individual retail buyers. Chevy’s U.S. retail share fell to 10.7 percent last year, from 11.4 percent in 2008. GM last year introduced a redesigned Silverado pickup truck, its top seller, as well as updating the design of its Malibu family car.
“Chevrolet is pretty disappointing. They’ve had a significant product revival over the last two years and they’ve not been able to gain share,” Libby said.
Since 2008, Chevrolet has exited the minivan and small pickup categories, which cost it retail sales, said Jim Cain, a company spokesman. GM will begin offering a smaller pickup later this year with the Colorado model. The Detroit-based automaker also is putting a greater emphasis on profits, selling fewer cars on deep discount, he said.
“The quality of our market share is light years ahead of where it was in 2008,” Cain said. “We are much more profitable and the resale of our products has risen sharply thanks to what is now an essentially all-new showroom of vehicles.”
Chrysler, the U.S. automaker owned by Fiat SpA, saw its Jeep line of SUVs climb to 3.4 percent from 2.7 percent in 2008, the IHS data show.
The next top brands will find a way to lead in innovation, as Toyota did in the last two decades with the Prius hybrid-electric car and the RAV4 that helped pioneer the car-like SUV category, Libby said.
Honda Motor Co., which was second to Toyota in retail share in 2008, has slipped to fourth. It had 10.4 percent of the retail market last year, down from 11.9 percent in 2008, according to the IHS data. Honda also has suffered from lackluster looks, Libby said, as the competition has become more appealing. Like Toyota, it also had to contend with natural disasters in Asia that disrupted production in 2011.
While its retail share slid, Honda said its top-selling models were retail leaders in their segments: the Civic compact, Accord mid-size car, CR-V compact utility and Odyssey minivan. The company doesn’t have a fleet-sales operation and few Honda dealers handle such sales.
“Our focus on retail sales to individual buyers has a direct correlation to the high resale value of Honda products, which is a key factor in the value proposition for our customers,” John Mendel, executive vice president of automobile sales for Honda’s U.S. unit, said in a statement last week.
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