Toyota's European Sales Enigma Solved: The Russians Did It
Last night, our U.K. correspondent Cammy Corrigan reported that Toyota is seriously in trouble in Europe. The findings were based on a report in j ust-auto.com that carried the news that in Europe, sales of Toyota branded vehicles had dropped 20 percent in 2009, while Lexus branded vehicles dropped 40 percent.
Alarming news.
Just a few days ago, Bloomberg reported: “Bayerische Motoren Werke AG and Daimler AG, the world’s top luxury-car makers, fell behind Toyota Motor Corp. in European deliveries in 2009 as government incentives failed to boost demand for their vehicles. BMW and Daimler, the maker of Mercedes-Benz, dropped to eighth and ninth place in Europe, while Toyota, including the Lexus brand, rose to seventh, according to figures released today by the Brussels-based European Automobile Manufacturers’ Association.” Eh? Or more polite: Mou ichido ossyatte kudasai. Excuse me? Say what?
The ACEA data were published by TTAC. At the bottom of the post is a link to the official ACEA spreadsheet. Go to the “By Manufacturer (1)” tab. It shows sales for all of Europe. According to these data, Toyota Group (incl Lexus) sold 730,831 units in Europe in 2009, down 4.7 percent from 766,884 units in the prior year. Market share 5.0, down 0.2 from 5.2 in 2008. BMW’s and Daimler’s sales dropped 13.6 and 13 percent respectively. BMW’s market share fell to 4.9 from 5.6 percent, Daimler’s share dropped from 5.4 to 4.8 percent, allowing Toyota to overtake them. 20 percent drop in sales? Not that ACEA would know, and ACEA is the official European score keeper.
Worried that just-auto.com may have had a pint to many, I obtained the original Toyota release: “Toyota Motor Europe (TME) today reported year-end sales of 882,351 vehicles. From January to December 2009, TME sold 855,294 Toyota vehicles (-20% vs. 2008) and 27,057 Lexus vehicles (-40% vs. 2008), achieving a market share of 4.9%.“
Just-auto wasn’t drinking. Who was?
There are many possibilities for the disparity of more than 150,000 units. Right now, they are only speculation. Just as many of the “why Europeans don’t buy Toyota” comments are speculation. When I worked for VW (until 2005,) the good folks in Wolfsburg were absolutely horrified when J.D. Power customer satisfaction studies came out, with Toyota on top and VW in the dumps. Heads rolled. I was on the task force to improve VW’s horrendous customer satisfaction, a thankless job. VW was absolutely fixated on Toyota as the enemy, which explains their “Strategy 2018” in which they want to topple Toyota. (Lately, Toyota fell back a bit on the German CSI ranking, with, OMG, supposedly equally unloved Honda taking the top spot for two years. In the 2009 study, horrors or horrors, Daihatsu ranks first. )
Until the numerical enigma is solved, the headline could also read “Europeans love Toyota more than BMW and Benz.” Or not.
PS: One possibility: Deep in the Toyota press release is the sentence “On the other hand, Toyota and Lexus sales were negatively affected by the recession in markets such as Russia or Ireland, where the company has a strong market share.” Ireland is reflected in the ACEA numbers, Russia is not. Toyota’s sales dropped 64 percent in Russia in 2009. Would that explain a 150,000 unit and 16 percent disparity? Who knows. I sent an email to Toyota and asked for an explanation.
Update: Toyota Europe answered back.
“The difference in figures between ACEA and TME mainly results from the different underlying geographical definition of “Europe”. As you suggest, the difference comes from the fact that e.g. Russia and some more Eastern European countries are included in TME’s results, but not in ACEA’s results. In 2009, when the development of the Eastern European car market (-43% vs. 2008) was so different from the one in Western Europe (+1% vs. 2008), this difference became more striking than ever. The Russian market alone decreased by around 60%, which clearly had an impact on Toyota and Lexus sales in this region.”
So there you have it. Toyota is doing just fine in “Europe” (as defined as EU + EFTA.) TME’s numbers were dragged down by the Russian market that tanked by 49 percent and by some more very Eastern countries.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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A friend's parents live in Berlin and they are quite elderly. Herr used to own a business and was prosperous. My friend, who grew up in Berlin, remembers her father having a Citroen DS Pallas when she was a little girl, when most people were lucky to have a Volkswagen Beetle or maybe an Opel Kadette. Herr drives a used Toyota because they are reliable and he can't be bothered to have the hassles of taking a car in for continual problems. He doesn't waste money on expensive German or French cars any more. He'd rather spend money and come visit his daughter and grandchildren in America. I myself am a car-guy and have been for decades. I have had two Toyotas, both bought new, and both were for all intents and purposes - perfect. I just got a Subaru - new - because my needs changed. I expect it to be for all intents and purposes, perfect. Does this not make me a car guy any more? What nonsense. Besides, I HAVE an older BMW luxury car as a "toy". It breaks down fairly regularly and costs me time, money and hassle (of course, it's put up for the winter right now). I don't look to the BMW (V8 or not) to be reliable, or to get me where I abolutely must get to. But when it runs, it runs fast! (Well, okay, as fast as the traffic allows). Put another way, it's a one-trick pony. I can accelerate like crazy when the road is clear! But no, I don't drive it in the USA at autobahn speeds for many reasons. So, now am I a car guy? My Subaru and my wife's Hyundai are just as much "cars" as that big BMW which cost as much as a modest house when it was new (and yeah, I'm not wealthy - I picked it up as the bottom of the depreciation level simply because I wanted a toy, and I don't have boats, snowmobiles, don't drink, don't smoke.... and only chase fender skirts, unless my wife happens to be wearing a real skirt). A real car guy (or gal) accepts others for what they are. Co-enthusiasts. I enjoy talking with hot rodders, people who enjoy Checkers, people with kit cars, Asian cars, American cars (BTW what is one of those any more? Both our daily drivers could be construed as American - one from Alabama and the other from Indiana - yet they say "Hyundai" and "Subaru" on the titles - even so, how many cars with "Chevrolet" sold in this country hail from Canada, Mexico, South Korea?)
My uncle from Eastern Europe used to drive 1998 Audi A4 and had nothing but problems (same as my friends here, in Canada with VW Passats' of the same vintage). So, he asked me what would I recommend? I told him to get a Toyota. He has had Auris or Avensis (not sure) for a number of years w/o single problem. Last year he upgraded to a 'fancy Camry' aka ES350, brought new from the US. I did recommend him Ford Fusion or a 'fancy Fusion' aka MKZ, but getting consumables and parts are easier over there for Lexus then for North American Ford and Lincoln .