Is AN Picking On Toyota?

The mainstream media has finally discovered that America’s Motown-based automakers are in dire straits. (Was it the bailouts?) The Detroit-based automotive media are in full counter-insurgency mode, scouring the autoblogosphere for stories that say “SEE! They’re in trouble, too!” When Toyota recently secured bank financing, cries of “Bailout! Bailout!” echoed throughout the Motor City. And now Automotive News [sub] seizes on the Automotive Lease Guide’s [ALG] revised depreciation stats for proof that GM and ChryCo are not alone. “Toyota’s residuals take a dive” AN’s headline proclaims. “Not only are Toyota Division’s new-vehicle sales plunging, but so are residual values on its used cars and trucks. That is depriving Toyota of one of its best marketing tools: the healthy residuals the brand long has been able to brag about.” Uh-oh. Hang on. Context?

Of course, it is an industry-wide trend. According to the guide, 2006 model vehicles with leases that ended in January and February retained an average value of 40 percent of their sticker prices. That is 6 percentage points lower than the original projection.

So . . . let’s bash Toyota! The above illustration illustrates the bias. While the difference between ALG’s forecast for the Toyota Tundra’s residual value and its actual 2009 value is greater than the same discrepancy for the Silverado and F-150, the bottom line clearly puts the Tundra at the top. Actual value vs. actual value, it’s Toyota (40.1 percent), Silverado (39.8 percent) and F-150 (32.2 percent). In fact, doesn’t the “value decline” illustrate nothing more than ALG’s lack of forecasting ability?

Hopping over to ALG’s website, an entirely different picture emerges. Toyota’s Camry, Prius, RAV4 and Tacoma all get a five-star depreciation rating. GM has no five-star vehicles. Nor does Chrysler. Nor Ford. The only American vehicles that make the grade are the Jeep Wrangler and the Dodge Viper; the latter of which which Chrysler is deep-sixing. On the downside, domestics account for 15 of the 25 one-star rated cars.