It’s starting to look like there may be at least a subcompact-sized light at the end of the tunnel for what was once one of America’s top brands, as sales of the all-new 2012 Toyota Yaris jumped up by 150.9 percent in October. This was an impressive debut, since the Yaris has long lagged the rest of Toyota’s core car lineup in terms of volume, but earned enough sales last month—6,792—to top all other entries in the segment except the Nissan Versa. As a further measure of the Yaris’ strength, consider that the subcompact class has garnered a fair amount of attention in the past year or so, along with a fair number of all-new models, including the Ford Fiesta, Kia Rio and Hyundai Accent—all of which, obviously, finished behind the Yaris in October.
Of course, the Yaris’ initial success may seem like small potatoes compared to the rest of Toyota’s problems—especially when you realize exactly where those problems now reside.
Perception is Everything
The first thing to note is that, even with Toyota having to recall yet another +400,000 vehicles just last week, the company’s reputation for quality is doing just fine. In ALG’s recently released “Fall 2011 Perceived Quality Study,” Toyota finished in second place among mainstream brands, trailing only Honda, while Lexus once again topped the luxury makes. It’s the third consecutive study in which Toyota has increased its perceived quality score, and what’s especially notable this time around is that the brand improved its performance between the Spring 2011 and Fall 2011 studies even though it had to recall more than 2.4 million vehicles during the same time.
It’s as if the initial shock of the Toyota Recallathon has worn off to the point where big recalls like this are just an accepted part of the business.
ALG also notes that if these current trends continue, Toyota will likely return to the top spot in the study sooner rather than later. And that’s a stronger gauge of Toyota’s recovery than its sales numbers.
Turning Down the Volume
As I’ve mentioned in the past, it’s exceedingly hard for entries like the Toyota Camry and Toyota Corolla to show much in the way of positive growth in the current sales environment no matter how great they are. The problem is that nearly all the mainstream automakers are now offering credible competitors in nearly all of the high-volume car segments.
Take the Camry, another all-new model from Toyota. A glance at last month’s numbers shows Camry sales plunged almost 12 percent in October, a time when the industry as a whole increased deliveries by 7.5 percent. But the end result still left the Camry nestled between the Honda Accord and Nissan Altima on the best-seller list, boasting 22,043 deliveries. That mark made the Camry the fourth-best-selling vehicle in all of the U.S. last month, trailing the leading Honda Accord by about 550 units.
The numbers for the Toyota Corolla tell a similar tale: Its deliveries in October were down 12.8 percent, but it was still the best-selling car in its class, earning 16,244 sales.
If you didn’t look at these vehicles’ growth rates, you’d certainly say they had very successful performances in October. It’s just that we’re entering a new stage in the industry in which automakers are going to have to reset their expectations—and not expect to score double-digit sales increases merely because they’ve introduced an all-new model. It’s simple: No car in recent times has ever sold more than 25,000 vehicles on a regular basis, and there’s no reason to expect that to change with the increased level of competition in the industry.
It’s possible to look at the way the ALG data has stabilized over the course of the past couple of surveys and extrapolate from that the idea that the industry as a whole has, in fact, reached some sort of equilibrium as regards each automaker’s relative place in it. Since ALG’s 2008 studies, only three companies have made “large jumps” in the perceived quality standings: Hyundai, Kia and Ford. And while Hyundai and Kia have been able to leverage that into higher sales volume, Ford’s momentum does seem to be stalling lately.
It’s easy to then complete the leap and say that, for now, and for most automakers, there’s not likely to be much relative change in the sales standings at all going forward.
The Trucks Stop Here
One further little factoid about Toyota puts the company’s current situation in even sharper focus: Even though Toyota’s overall car sales slipped by 4.1 percent in October, the automaker happened to sell more of them by far than any other company in the industry. Toyota had 72,653 deliveries on the car side, while the next closest rival, GM, tallied 60,390 car sales.
It should come as no surprise that, when you look for what’s really holding Toyota back in the U.S., you find out that it has to do with trucks. As far ahead as Toyota is in U.S. car sales, it’s even further behind the Detroit Three in truck sales. And since that’s not likely to change much in the near future either, neither is Toyota’s sales performance in this country.