Buyers go big, but Toyota stays small
Demand for SUVs, pickups slowing automaker’s sales
As American consumers flock to big vehicles, Toyota is suddenly flat- footed with its lineup full of historically stalwart compact cars, midsize sedans and hybrids.
The Japanese automaker lost U. S. market share in 2016 for the second straight year as low gasoline prices led buyers to snap up crossovers, pickups and sport- utility vehicles.
Toyota’s quandary will be on display Monday at the North American International Auto Show in Detroit, where it will reveal a redesigned version of the Camry midsize sedan. On one hand, it remains the nation’s best- selling car, the fourth best- selling vehicle of any kind. On the other, Camry sales fell 9.5%, to 388,616, in 2016 as truck and SUV sales rose overall, according to Autodata.
Toyota’s SUVs, such as the RAV4 and Highlander SUV, are hot sellers, and its lineup continues to fetch strong prices. And the brand certainly isn’t alone in feeling the effects of a car- heavy lineup. Volkswagen and Hyundai have some of the same issues.
But with too many struggling cars in the lineup, including the slumping Prius hybrid and Camry, Toyota is entering the auto show with insufficient firepower to capitalize on low gas prices.
Consequently, the company’s U. S. market share fell from 14.3% in 2015 to 14% in 2016, according to Autodata.
That’s its lowest full- year mark since 2005, according to Ward’s Auto — not including 2011, when sales temporarily tanked because of a controversy over largely unfounded reports of unintended acceleration.
“There’s no question that they’ve been slow to market with some of the hottest products and segments,” said Joe Wiesenfelder, Cars. com executive editor. “It’s especially disappointing because this is the company that arguably created the car- based SUV with the RAV4 and then came out with Lexus RX 300, which was just a revelation.”
In 2016, about 52% of Toyota’s sales were crossovers, pickups and SUVs, up from 48% in 2015 and marking the first time that cars represented less than half of its sales, according to the company. But that trails the industry average of more than 60%.
As a snapshot of Toyota’s struggles, consider the Prius. U. S. sales of the world’s best- selling hybrid vehicle tumbled 26% to 136,632 in 2016. Meanwhile, the red- hot Tacoma mid- size pickup has increased 36% from 2012, to 191,631 vehicles in 2016. Extra production capacity for 60,000 Tacomas annually won’t come online until at least late 2017.
With President- elect Donald Trump threatening a tax on vehicles made in Mexico and sold to U. S. consumers, Toyota and other manufacturers that have bet heavily on Mexican manufacturing could suffer the consequences of amovement against free trade. With the North American International Auto Show set to cast a spotlight on the industry’s clash with Trump, expect Toyota to continue highlighting the $ 22 billion it has invested in 10 American factories, and what Cars. com says is the most made- in- America vehicle: the Camry.