By on August 27, 2013

toyota-incentives

Toyota, which faces increased competition for its midsize Camry in the heart of the U.S. car market, says that it will try to hold the line on prices and incentives while still trying to keep bragging rights as the best selling car in America. At the same time, Ford is ramping up production of the Fusion, which is in short supply, and will be trying to keep transaction prices high as it increases supply.

The Camry was outsold by the Honda Accord and the Nissan Altima in March. Both of them are newer models than the Camry.Camry sales only rebounded when Toyota started offering incentives that were four time those offered by Honda on the Accord. Toyota insists that those incentives are not inordinate. “For incentives, we don’t think that our current level is necessarily high, but traditionally, we try not to be too dependent on them,” Nobuyori Kodaira, Toyota executive VP, told Bloomberg. “I can’t really comment on our future plans, but our plan for now is to stick to that as much as possible.” Besides incentives, to boost short term results Toyota can add content, like new technology features. Long term, Toyota has the option of speeding up the development cycle for the next generation Camry

In addition to competition from other Japanese brands, Toyota has watched all three U.S. based car companies gain market share in those companies’ home market. As other manufacturers offer truly competitive products and have significantly narrowed quality differences, Toyota can no longer rely on reflexive customer loyalty.

“It is true that rival carmakers have come out with very competitive models in the segment, and that competition in the U.S. midsize sedan segment is becoming fiercer,” said Kodaira. “What we need to do is to come out with even more competitive models.” In June, Camry inventories exceeded their usual levels by about half a month.

Kodaira declined to say whether Toyota will come out with a redesigned Camry to compete with refreshed products from Honda, Nissan and Ford.

Toyota expects to sell at least 400,000 Camrys in the U.S. this year. In July, incentives on the Camry averaged $2,581 per car compared to $627 for the Accord. Bill Fay, Toyota group VP for U.S. sales, echoed Kodaira’s remarks about incentives not being too high.

Ford+Makes+Announcement+Flat+Rock+Assembly+O2GNdmcItFAl

Meanwhile, Ford is adding a shift of 1,400 workers at their Flat Rock Michigan plant so that facility can join Hermosillo, Mexico in building the Fusion. Flat Rock currently builds the Ford Mustang. That shift at Flat Rock will add about 100,000 Fusions to Ford’s annual capacity for their well-received midsizer. Ford now has the capacity to build about 450,000 Fusions a year, about equal to Honda’s capacity for building Accords in the U.S. and about 25,000 units shy of to Toyota’s U.S. capacity for the Camry. Without the additional capacity, there was no way Ford could hope to challenge Toyota or Honda for the best selling sedan in the States but Ford seems more focused on selling more of the profitable Fusion than winning bragging rights.

Another challenge Ford faces is trying to keep its transaction prices high as it increases supply, something that normally creates downward pressure on prices. Currently Fusions are selling for about $2,400 more than Camrys.

Analysts say that popularity of the Fusion means that Ford will not have to lower prices by much. “Ford has managed to be a volume player competitive with the Toyota Camry and the Honda Accord while still maintaining a far more competitive price point,” Kelley Blue Book’s Alec Gutierrez told Bloomberg. “You might see prices come down a few hundred dollars, but I don’t think they face any significant risk of serious price degradation. They’re going to hold their premium spot in the segment.”

Fusion sales are up 13% this year and the midsize Ford has taken about 25% out of Camry’s sales lead.

The average price that the Fusion has sold for this year through July went up 5.8 percent to $26,343, led only by Volkswagen’s Passat in the mid-size car segment, according to Kelley Blue Book. Fusions are selling at $1,176 more than the segment average and $2,378 more than Camrys.

Analysts attribute the Fusion’s success to a variety of factors including distinctive styling, fuel economy and a wide selection of conventional, hybrid and plug in hybrid drivetrains. Ford is even seeing sales growth in California, a market that hasn’t been very receptive to domestic brands for years, with strong sales of the C-Max and Fusion hybrid. Ford car and light truck sales in the Golden State are up 18% for the first half of the year, compared to 2012, putting Ford in a virtual tie with Honda for market share there.

While Ford has a 40 day supply of Fusions nationally (a 60 day supply is considered normal), in the Los Angeles and San Francisco markets the supply is down to 30 days.

It isn’t just the law of supply and demand that will mean lower prices on Fusions as production grows. When Ford launched the Fusion, many of the early production models were highly optioned, with corresponding sticker prices. Now that lower content cars are a greater percentage of the mix, transaction prices should drop a bit.

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56 Comments on “Toyota To Keep Camry Prices Steady In Face Of Ford’s Increased Fusion Production...”


  • avatar
    ash78

    The Fusion is in short supply? Not a big surprise. I’ve never seen an all-new model sell so quickly.

    The first couple I saw, I was like “Stunning!”

    Then a few dozen later, “Lots of people with good taste in cars.”

    Now it’s “Time for a facelift yet?”

    I guess that’s a big part of why I’ve always chosen low market share models/brands. Ubiquity quickly destroys even an objective sense of good taste.

    • 0 avatar
      thornmark

      Ford is trying really, really hard to create the idea that the Fusion is hot, it is not. It’s part of their marketing campaign.

      All the Fusions around here, CT, have bar codes.

      Deja vu all over again:

      “Is Ford’s Alleged 2010 Fusion Shortage Guerilla Marketing or Legitimate?”
      http://www.autosavant.com/2009/06/08/is-fords-alleged-2010-fusion-shortage-guerilla-marketing-or-legitimate/

      Do transaction prices reflect fleet sales, given Fusion’s continuing status as the mid-size fleet queen?

      • 0 avatar
        sketch447

        thornmark: you are absolutely correct. The Fusion is in high demand; but it is NOT hard to find or buy. I see plenty of unsold Fusions on dealers’ lots here in the Northeast. (What people are really buying up here in huge amounts is the Focus sedan.) But honestly, I see many more new Camrys than Fusions on the road. It’s all marketing spin.

        It’s downright silly to wait for, or to pay over sticker for, any mass-produced mass-market sedan. Excessive demand eventually cools or levels off. And even if it doesn’t, there are plenty of alternatives to the Fusion.

        Hyundai has been under pressure to build another factory for its Elantra and Sonata. Thus far, it has resisted the temptation. Better to run the existing plan full-out than spend half-a-billion on another plant.

        I have a Fusion similar to the 2010 Fusion in the article you cite. My Fusion is nice enough, but if I paid $5000 over sticker for one, I’d feel like a darned fool. Point of fact, the Accord of the same year seems a much nicer car in many ways. The Accord’s seats are far superior to my Fusions and in general, the Accord seems a far more opulent vehicle.

      • 0 avatar
        bd2

        In terms of total nos. to rental fleet, the rental Queen would be the Camry as the vast majority of Camry fleet sales is to fleet whereas the over 40% of Fusion fleet sales is to govt. and commercial.

        • 0 avatar
          Pch101

          “In terms of total nos. to rental fleet, the rental Queen would be the Camry as the vast majority of Camry fleet sales is to fleet whereas the over 40% of Fusion fleet sales is to govt. and commercial.”

          According to Fleet Central/ Automotive Fleet:

          During 2012, 20.0% of Fusions and 14.8% of Camrys went into rental fleets.

          During 2011, 20.5% of Fusions and 13.5% of Camrys went into rental fleets.

          I know that you absolutely love Hyundai and view Toyota as your nemesis, but it would be preferable if you didn’t allow your affections to get in the way of the facts.

          • 0 avatar
            sunridge place

            The 2012CY numbers contain a lot of the previous generation Fusion numbers. They didn’t really start building this generation until late spring/early summer 2012.

            It was nice to see the new Automotive Fleet #’s out for 2012CY. Last time I looked, it was only through 2011.

          • 0 avatar
            bd2

            Um, no.

            In 2012…

            Fusion – 46,197 went to rental fleet
            Camry – 52,768 went to rental fleet

            And the Camry was an all-NEW model while the Fusion was on its last legs.

            The disparity probably has gotten worse for 2013.

            And oh, Toyota sent more of the Yaris (16,268) and the Corolla (59,578) to the rental lots than did Ford with the Fiesta (9,745) and Focus (48,069).

            So, those are the FACTS…

            And I don’t see Toyota as being Hyundai’s toughest competitor (not that I care), that would be Honda, Ford and Kia.

            Nothing competitive about the Camry except for its heavy discounting and fleet sales.

        • 0 avatar
          84Cressida

          I love you how you try to spin absolute numbers of units in fleet as a way to try to trash Toyota. The problem is that anyone sane enough sees right through and knows that it’s the % of fleet that is the number used to analyze this stuff. Toyota sold more fleet cars last year than Mazda did, but guess which one of those had a higher % of their overall sales going to fleet and was therefore more dependant on them to boost their sales numbers? It wasn’t Toyota.

      • 0 avatar
        Aquineas

        You’re citing a 4 year-old article about the last generation Fusion as a means of downplaying the new model’s demand? Ford wouldn’t be running three shifts, 6 days a week and ramping up manufacturing in Flat Rock, sitting at a 40 day inventory supply, if those cars weren’t selling. Now that’s not to say I would be paying over MSRP for one, but to argue they’re not selling I don’t believe is an accurate representation.

    • 0 avatar
      Marko

      I would say that they’re a “regular” sight in RI, but not quite “on every corner” popular. For the first six or so months they were available, I didn’t see a single one around. On the other hand, swarms of the 2014 Toyota RAV4 appeared as soon as they were launched around March.

      (Anecdotal, I know.)

  • avatar
    Jeff S

    The midsize and compact segment of the car market is where the action is. The new Impala is nice, but the full size segment is shrinking and rapidly being replaced by the midsize. Toyota is in a race to keep Camry’s number 1 Sales ranking. The Fusion is one of the best looking midsize cars on the market along with the Sonota and Optima. Camry is a good car but it is dated and frumpy.

    • 0 avatar
      highdesertcat

      As a Toyota convert since 2008, I have to agree that “Camry is a good car but it is dated and frumpy.” Not only that, the entire Toyota line up is dated and frumpy.

      And as several people have already found out, the renown Toyota reliability and durability has been brought into question over the last several years.

      So, a discerning shopper would certainly have to consider Accord and Altima among their “must see” sedans when shopping for a new midsizer.

      IMO, the current Camry is overpriced when compared to an Accord or even the Altima, both which can be routinely bought for less than the Camry of similar options and trim.

      Toyota keeping the Camry prices steady doesn’t have a hoot to do with the Fusion sales, but more to do with increased sales of Accord, Altima, and Sonata. Each of those give the buyer a lot more for their money than Camry does.

      Former Camry owners have told me that they would not willingly give up their old, Japan-built Camry sedans of yore, but they also wouldn’t buy one of the new ones to replace it.

      Which begs the question, “Who’s buying these supposedly ‘hot’ Fusions?”

  • avatar
    suspekt

    The Fusion looks bloated and ungainly. It is very nice in the details, but on the whole, it looks overwrought and ungainly. I just can’t believe I am in the minority on this but I guess the sales speak for themselves.

    If I were to categorize the major mid-size sedans for styling in terms of how well they will age:

    Will Age Well:
    - Accord
    - Passat
    - Optima
    - Malibu (that’s right, I put the Malibu here)
    - Camry

    Won’t Age Well:
    - Sonata
    - Altima (nausea on wheels, seriously…. the styling is nauseating)
    - Fusion
    - 200

    ***Not sure of the Mazda 6. Haven’t seen enough to properly critique it

    • 0 avatar
      Tinn-Can

      Yes to all this… Pigfat disgusting…
      I love the Mazda6, the motor is just too small though…

    • 0 avatar
      zach

      Totally agreed, I think the Camry looks more cohesive and confident looking, the Fusion is nice , but they already look dated to me, can’t quite put my thumb on it.

    • 0 avatar
      gtemnykh

      Yep. The fusion looks ‘fat’ from just about any angle to me. Couple that with quality issues, and middling ecoboost fuel economy, and I just don’t see the appeal of these cars. The styling strikes me as one of those ‘flash in the pan’ things as well, like the Sonata in 2011. Those sonatas look hopelessly outdated now. The ‘boring’ Passat is looking better and better to my eye, and the 2013 Accords will still look sharp in 5,10, 15 years.

    • 0 avatar
      bd2

      Make it the emergency-refreshed Malibu and take off the Camry which either looks awkward (base/hybrid trims) and/or is already outdated-looking.

    • 0 avatar
      84Cressida

      I think it and a lot of American cars look bloated. The Impala and Lacrosse are one of the worst, so is the Taurus. Backing up a Taurus at night time surrounded by other cars is the best challenge any driver can hope for.

    • 0 avatar
      sgeffe

      The 6 looks like it will age fine, as well! (This coming from a happy 2013 Accord owner!) Might be a little down on power compared to my V6, but even the four-cylinder Accords are more than adequate, and I’m sure that the SkyActiv Mazda is similar, not to mention a little better handling.

      Only the interior looks a little dated, a little last-gen-Camry-esque, IMHO.

  • avatar
    ronald

    I am seeing a lot of new Fusions in this midwestern town/small city. Not rentals.

  • avatar
    jimmyy

    Heavy numbers of bar coded rentals on the east and west coasts. This article is a lot of hype for a vehicle holding the 4th place spot. Last I checked, Fusion incentives were higher than the top 3 ( Camry, Accord, Altima ). This article fails to point any of this out. Just a Bloomberg article attempting to pump Ford stock. Ignore.

    • 0 avatar

      The stock manupulation comment is quite astute, actually. The same people attacked Toyota with the bogus “sudden acceleration” case previously as well, and made more money than trial lawers on the case.

    • 0 avatar
      wsn

      Totally agree.

      The only numbers provided are the rebates for Accord vs. Camry. I mean, even if the author has proved that Toyota spent more to move Camry than Honda to move Accord, what does that have anything to do with Ford Fusion? What’s Fusion’s rebate? For the past year? For the model cycle? For the entire life of the name?

    • 0 avatar
      bd2

      Incentives on the Fusion were on par with the Camry for July and that’s with having an ATP that is $2,400 higher (for previous months, the Fusion had lower incentives than the Camry).

      For the month, the Camry had the lowest ATP out of the top NINE selling cars in the segment.

      The Camry had a lower ATP than the Chrysler 200 – now, that’s saying something.

      • 0 avatar
        jimmyy

        Ford tends to load dealer lots with higher end versions of the Fusion while Camry loads with un-optioned LEs. The ATP argument is a red herring. Last earnings reports showed Toyota’s net income was massively larger than Ford. Looks like Toyota is turning much larger profit margins than Ford. In fact, Toyota had a much larger net income than all Detroit automakers combined. Now, that is something.

      • 0 avatar
        golden2husky

        Yes, but Jimmyy and his ilk won’t see it. I live on the east coast and Fusions are spreading pretty fast in an area that has far more people who think like Jimmy that buy Toyota out of habit than an open minded consumer. Short supply? Not so sure about that as the local dealer has a good selection available, or at least their web site shows that. Thing is that a decade or 15 years ago, buying Toyota by rote could be supported as a logical thing to do. Today, the data really does not make that pattern so smart. Toyotas are not what they once were. I’m not so sure it is because they are locally made, as what the factory produces is directly related to the design and materials used. Toyota loosened their grip on the highest standards and that was not due to who was putting the cars together; that is the choice made by a manufacturer who leveraged an excellent reputation for market share and profit. And now an educated buyer realizes that why a Toyota may still be the right choice, it may well not be. While I really like the Fusion, I am disappointed by the casual assembly quality. I expected more from Ford.

  • avatar
    mars3941

    I just completed a 1600 mile trip and on Interstate 75 through Florida and Georgia. The number of new Fusions I saw were 10 to 1 over any other make. The Camery might have been second, but nowhere close to the number of Fusions I encountered.

  • avatar
    suspekt

    I really wonder how many Fusion’s (loaded Titanium models and the like) are conquest sales from models people wouldn’t think are competing with the Fusion.

    I suspekt:
    - 5 series
    - E Class
    - Jaguar XF
    - Acura TL
    - Infiniti M
    - Cadillac CTS
    - Chrysler 300

    My point is, I am not sure high-spec Fusion buyers are even looking at Camry’s, Accord’s, and Altima’s…. I think they are luxury car shoppers looking in the $35-$55 segment when viewed that way, the Fusion is a bargain…. I still think it looks ungainly and awkward, but there is no doubting it looks right at home parked next to a Land Rover or X5….

    • 0 avatar
      golden2husky

      Except that buyers of snot brands don’t shop Ford, or Toyota branded either. I feel that there still exists a substantial group that refuses to step into a domestic dealer, and a group that wants an American car, even if it is made in Mexico. That stupidity is shrinking but it is still there. My friend just bought a Camry Hybrid and did not even consider cross shopping with a Fusion. As nice as his Camry is, he did himself a disservice in my opinion.

      • 0 avatar
        Ion

        While I understand that 30g used to be 3series turf I agree with golden2husky that your aspirations are a little too high. However I do think they might be grabbing former Passat and Jetta owners now that VW has moved down market and cheapened their models. It certainly scores brownie points with the euro snobs that the Fusion is identical to a Mondeo now.

  • avatar
    zach

    Call me crazy , but I more attracted to the Camry, it’s seems like it will age better, less gimmicky, the Aston grille on the Fusion seems dated already, but the market likes the Fusion , so go Ford!

  • avatar
    sketch447

    I think what will come back to bite the new Fusion is its tiny turbo engine. I just have serious doubts about its long-term reliability over a conventional non-turbo four. The turbo engine runs hotter, and harder, with no fuel economy benefit.

    I think in 3-4 years, we’ll be seeing plenty of Fusions on used car lots.

    • 0 avatar
      raph

      Ford has plenty of experience with forced induction gasoline engines almost continuously since the early 80′s in both turbo and supercharged form. More so than any other domestic passenger car manufacturer.

      • 0 avatar
        ajla

        “More so than any other domestic passenger car manufacturer.”

        How do you figure that?

        Between Ford, GM, and Chrysler I bet Ford had built the fewest forced induction vehicles up until 2009.

    • 0 avatar
      sgeffe

      IMHO, “no replacement for displacement.”

      186-mile road-trip today, 2013 Accord Touring (V6 with adaptive cruise-control–set to 80 most of the time–59mph average speed), 34.6mpg with ACC at aforementioned speed, two pax, A/C blasting away!

      On a shorter drive this spring, 4-lane 55mph state route, ACC at 62mph, no traffic to pace, I hit a high of ** 39mpg ** on the trip computer, which is usually optimistic by 1mpg.

      Close enough to that magic 40mpg number for this government worker!

      And I read the entire thread today on one of the F-150 forums about a guy who had no less than THREE of the EcoBust engines grenade on him, and Ford of Canada took several months to finally fix the thing (which he traded for a Roush-s’charged Raptor).

      Couple that with memories of hearing of ka-blammoed turbochargers while growing up in the ’80s, when those were allegedly the mpg savior of the world, and I think you can see where I might be a little squeamish about turbos!

  • avatar
    mars3941

    Ford doesn’t offer either the 3.5 or the 3.7 V6′s in a Fusion and I’am sure it has to do with CAFE requirements that are only going to get stricter. I personally don’t care for 4 cylinder cars, must be a carry over from my Iron Duke selling days.

  • avatar
    Kyree S. Williams

    I’d rather Toyota didn’t rush the next Camry. The current one may not be a thing of pride, but it isn’t dismal or even undesirable. It still has the same features that competitors do, and it still has hundreds of thousands of loyal buyers. Those involved should take their time and release something that is truly exceptional…

    • 0 avatar
      84Cressida

      Pretty much how I feel about it. It could be better, but it’s a good car and it has high sales for a number of reasons. Apparently at their dealer convention last week in Georgia (they used to be in Vegas, talk about downgrade!) Toyota dealers saw the 2015 Camry which they said is much more than just a typical mid model refresh. Toyota obviously knows the competition is strong, they aren’t going to let their bread and butter car wither, much to chagrin of those who wish otherwise.

  • avatar
    84Cressida

    I think it’s funny how anyone who bought a Ford, Hyundai, or someone’s favorite “exciting” brand is a smart, open-minded consumer. But that the person who bought a Camry (and Corolla) is labeled a sheep, idiot, close-minded, ignorant, or anything else derogatory for not shopping around ” better alternatives”.

    Hilariously, I read ALL THE TIME on ToyotaNation’s Camry sections about people who buy a Camry and list all the cars they looked at before making their choice. It’s hard for some people to fathom having different choices than they do.

    • 0 avatar
      zach

      Top seller, easy target. I personally find the Camry attractive esp in darker colors, more akin to the 97_01 version.

    • 0 avatar
      Kyree S. Williams

      Right…as if the fact that you did your research and still deliberately chose the Toyota makes you a tunnel-visioned lemming.

      But seriously, there’s always going to be that category of cars that enthusiasts find it easy and fulfilling to pick on. It used to be that these cars were rust-buckets that didn’t have a hope of making it past the warranty stage, but now these cars simply have the misfortune of being the least-”interesting” entries in their respective classes.

      What I find most interesting is that the Japanese automakers are by-and-large ignoring the turbo-craze in favor of traditional V6 engines. Maybe they know something that everyone else doesn’t…

      • 0 avatar
        sgeffe

        Honda at least intimated that may not be the case much longer! I hope to hell they’re wrong!

        Of course, the way CAFE is going, we all may be forced into 4-stroke Trabants before long anyways, so that’s one of the reasons I bought my Accord V6 Touring, in order to have one last “fun” car if it comes to that!

        (80+mph, 2 pax, A/C blasting, and mid-30s mpg, and will haul-a$$ like an F-18 off the deck cat on full A/B!)

        As said up the thread, “no replacement for displacement!”

  • avatar
    zach

    I just can’t help but think ford focus when i pull up behind a Fusion, not a bad thing, but i still fail to see what the fuss is all about, The camry just looks more angular , then again we have a cherokee xj, the Fusion is way to marshmallow for me. I am 30 and and between the camry and fusion, I would take the Camry.

  • avatar
    zach

    On that note, what has Nissan done to its once hot Altima? This coming from a 90s Nissan lover. We have a 98 Maxima that will not die,.


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