By on January 4, 2011

Toyota’s December sales [PDF here]dropped 5.5 percent compared to last December, capping a rough year for the largest foreign automaker in the US market. Toyota ended 2010 with a total sales volume of 1,763,595 units, down 6,552 from last year’s pre-recall performance. But despite holding volume basically flat and suffering the industry’s second-worst retail market share loss (at -1.2%), Toyota still finished the year with the highest retail market share of any automaker in the US market, at 17.3 percent according to our anonymous industry informant. Dig this: after the nastiest recall scandal since Ford’s Firestone debacle the Camry is still the best-selling car in the country, Lexus is still the top luxury brand, and Toyota still attracts more retail buyers than any other maker or brand. Would you have predicted that last February?

The Toyota brand’s retail market share dropped some .9% last year, ending the year at 14.6%, beating the next-closest competitor (Ford) by a margin of 1.4% (a difference equivalent to Buick or Acura’s retail market share). And that achievement comes despite losing more retail share than any other non-discontinued brand on the market last year. For the Toyota brand, that made 2010 the best of times and the worst of times, a fact that was not lost on Toyota’s Don Esmond, who says

Thanks to our customers’ enduring confidence in the quality and reliability of our vehicles, Toyota remained the best-selling retail brand for the third consecutive year… We are truly grateful for the strong loyalty our customers showed the Toyota brand in 2010, and we look forward to a successful year in 2011

But that sense of gratitude seems strange when you look at the pure volume numbers. Only two Toyota cars beat their 2009 volume numbers last year, the Prius (+1.6%, 140,928 units) and Avalon (+6.1%, 28,390 units).  Otherwise, the bread-and-butter Camry (-7.5%, 327,805) and Corolla (-9.8%, 266,082) had decidedly mediocre years, and Yaris crashed by 36.7% to 40,076 units. Even the relatively new Venza (-12.5, 47,321 units) was down by double-digit percentages.

Luckily for Toyota, light trucks saved the day last year. The new Sienna bumped sales by 17.7 percent to 98,337 units, while RAV4 rode a hot compact crossover segment up 15.4% to 170,877 units. After a miserable 2009, even the 4Runner and FJ Cruiser came back by 138% and 26.1% respectively, combining for 61,490 units. Land Cruiser and Sequoia, on the other hand, received no such boost, falling 19.6% and 14.9% respectively, combining for fewer than 16k units. Tacoma slid 4.4%, as the compact pickup market continued to erode, ending the year with 106,198 units. Tundra was up 18.3% though, on annual volume of 93,309 units.

Esmond’s expressions of gratitude were conspicuous in their lack of reference to the Scion brand, which is no surprise considering that, at 45,678 units, the sub-brand sold fewer models than the Venza. Last year Scion saw xB volume drop by 19.5 percent, tC fell by 15 percent and xD crashed by 29.8 percent. Even with a new tC on dealer lots, the model sold a mere 1,594 units in December. Unless the forthcoming iQ perks up some serious interest in the brand, Scion is a dead experiment walking.

Lexus, meanwhile was the major bright spot in Toyota’s portfolio, holding off a major challenge for US-market luxury supremacy from Mercedes and BMW. ES edged up by one percent, and LS enjoyed a nine percent rally, but HS’s 60% jump covers the fact that a mere 10k units of the “dedicated luxury hybrid” were old last year. It’s definitely not too early to call the HS250h a dud, but it may just limp along for a while, following in the footsteps of the GS, which slid 4.4% to 7,059 units. Meanwhile, the IS-line is starting to lose its appeal on the market, as it fell 9.8% to 34,129 units.

Lexus’s SUVs and Crossovers were a big help last year, with GX staging a dramatic comeback after an “unintended enthusiasm” scare earlier this year. The midsized SUV sold 16,450 units last year, a 10k unit improvement over 2009’s gas price-limited volume. LX increased slightly to 3,983 units and RX was up by only 3.3 percent to 95,790 units.

All told, Toyota had an undeniably rough year. Losing over one percentage point of retail market share between all brands is never a good sign, but in this case it can be directly tied a major publicity scandal in the midst of a weakly-recovering market. Though there are problems on the margins with Scion and other specific models like Yaris, Venza and Lexus HS/GS, the fundamentals of Toyota’s big-volume business seem to have survived the recall scandal in fairly good shape. Moreover, with 162,931 Toyota-branded hybrids sold last year along with 26,219 Lexus-branded hybrids, Toyota’s long-term investment in hybrid technology continues to pay big dividends.   Certainly those who predicted a “free-fall” in Toyota sales over the course of 2010 need to readjust their expectations.

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17 Comments on “Year-End Sales Report: Toyota...”

  • avatar

    In the financial industry, many question how accurate sales are.  When it comes to revenue and earnings, strict accounting laws rule.  However, when it comes to car sales, not many rules exist, and a car maker can under or over report for quite a range before hitting problems.

    Makes me wonder … Is it possible Toyota underreports sales in order to get NHTSA to back off? 

    • 0 avatar

      A sale is a sale is a sale. The number Toyota reported is almost certainly how many cars they sold in 2010.
      It is amusing though that when the numbers look bad for Toyota, you assume there’s been a mistake, yet for Ford, the only other car brand you seem to know of, not only are the numbers accepted without question, they’re misinterpreted to make things look worse. If that’s not bias I don’t know what is.

    • 0 avatar

      Not the case.  There is no rule on reporting number of sales.  Do you count a sale when the dealer takes the vehicle?  Or do you count a sale when a retail owner takes delivery?  Is the sale counted when the purchase is signed or is it when the funds are paid?  Lots of room for questionable practices.  GAAP has little to say about any of this.

      However, if I was a Toyota executive, I would under report sales as much as possible. Why upset the Obama administration? They will do the UAW a favor and send NHTSA after Toyota.

    • 0 avatar

      Or they overreported sales so things didn’t look so bad. Your quite the Toyota apologist/sycophant.

  • avatar

    Well duuuh. We know a witchhunt when we see one. Pity for Yaris though. And Scion is just a scandal.

    • 0 avatar

      The Yaris competes in a smallish segment in the US and its interior is too decontented for this market.  The Versa leads the pack on the value end of the segment and the Fit which can reach $19K is more appealing to affluent buyers.
      I have no worries about Toyota.  Their war chest is huge. Also, in the next couple of years, they will be revamping their car line up.
      The witch hunt may have woke them from their stasis of the past few years.

  • avatar
    SVX pearlie

    Losing ground in a gaining market is bad, no matter how you try to spin it.

    • 0 avatar

      No doubt… but the question this year wasn’t “will Toyota lose sales” but “how many sales will Toyota lose?” Given the hysteria Toyota’s been subjected to over the last year, a flat year (in terms of volume) is pretty impressive. Especially considering it held onto the top retail market share position, had the best-selling D-seg sedan, had the best-selling luxe brand, etcetera.
      That having been said, the Firestone scandal precipitated years of volume declines for the Ford brand… so we likely won’t know the true extent of the damage to Toyota from the recall scandal for years.

    • 0 avatar

      Financial analysts point to other factors.

      1) Toyota does better when gas prices high, Detroit does better when gas prices are low.  This is because many consider Detroit’s SUV their best card.

      2) Toyota does better when retail sales are strong, Detroit does better when fleet sales are strong. US government agencies nearly always buy Detroit because of public union pressure.

      2010 saw lower gas prices, and stronger fleet sales relative to retail sales.  These factors were stronger than the NHTSA witch hunt.

    • 0 avatar

      @Edward I think you nailed it well.  It isn’t a “bad” year but the longterm trend if you read the tea leaves aren’t good.  I think it is important to point out that Toyota is having to reduce sticker price at the dealer level more than any other manufacturer (TTAC ran – I believe 9.2%), has grown incentives 36.5% in 2010 (again TTAC sourced), grown fleet sales to about 11% of total sales, seen inventory swell to 75 to 94 days (depending on who’s math you use).  Lexus sales are still down about 30% from 2007, where as BMW and Mercedes have staged a much faster recovery (ahhh, and BMW in particular is doing their own dealer cost cutting, I seem to remember they were in second place behind Toyota in that TTAC story).  BMW is down about 13% from 2007.

      The problem in trying to evaluate how much of a torpedo was slammed into the side of the SS Toyota is 2010 was a recovery year for all, and when comparing to 2009 data, just about anyone can be made to look good.  Lets also not forget, in defense of Toyota, their 2009 sales numbers were goosed heavily by Cash for Clunkers; setting the bar a bit higher in 2010 to begin with – so there are silver linings.

      The real long term question I think you also nailed; is this flat year “the end of the problem” or does Toyota have another flat year in 2011 and beyond.  There are also other dynamics at play including a very weak US dollar, rising oil prices and the end of government handouts, wait, sorry, “incentives,” in mother Japan throttling back car sales.

      I think the key 2011 questions specifcally for Toyota are how do they get off the incentive treadmill, because they are going the wrong direction.  Will some of those FICO 540/560/580 car loans they wrote come back to haunt the balance sheet?  With BMW and Mercedes clocking much faster growth rates do they run over Lexus in 2011?  And what about Scion, is it about time to pull the plug; especially considering that weak dollar versus Yen and where Scion products are built?  How does Toyota fight Hyundai, when Hyundai is playing right from Toyota’s playbook and doing it a lot better?

    • 0 avatar
      SVX pearlie

      I suppose if you want to spin things that way, you’re entitled to do so. Nevertheless, to me, if Toyota “succeeds” at staying flat when everybody else grows 10+%, 15+% or more year over year, that’s not really success.

  • avatar

    Not a great year for Toyota, but not as bad as it could have been, honestly. I’m starting to wonder if they should just kill off Scion, though; it’s becoming Toyota’s Geo (or Saturn?).
    I expect the Camry unintended acceleration debacle to be pretty much blown over by the time the redesign hits sometime this year. Hopefully the new Camry won’t fall victim to Toyota’s recent cost-cutting; the 2007 was already a bit of a step back from the ’02-’06 model, IMO.

    • 0 avatar

      I just saw the new Camry today, better looking, IMO, than the current model, didn’t see any less quailty to the interior ( in fact it looked really good (except for the top of the dash, but its still pre-production, could still change)) the new Entune system looked really cool, can’t wait to try it out!)
      front end is a bit more aggressive looking with a more squared off nose, rear has a LF-A look to the taillights. i think i’ll be a better seller than the current model.

  • avatar

    There is the issue of Toyota (and all the Japanese manufacturers) have stockpiled a massive chest of goodwill from past practices. Even the annus horriblis that they experienced can’t drain it that quick.

    Moving forward, executing well will allow them to recover. Bugger it up, poor designs, bad engineering or ridiculous price points will create cracks in the facade. Time will tell. It took GM 40 years of stupidity to sink the ship. This isn’t an overnight deal.

  • avatar

    I was at the good ole’ Toyota dealership today for an oil change and noticed already a decline in component quality (Rubbermaid plastics), poor designs (2011 Highlander upper glove compartment, for example), and high cost ($28,000 for a Rav4 with leather). Auto companies are constantly rising and falling it seems.

  • avatar

    They sold 140k Prius’s last year?  That is a surprise, given how cheap gasoline seemed.

  • avatar

    The bottom line for Toyota is will they make a profit.  If it’s a choice between selling 1.7M units and making a decent profit vs selling 2M units and losing money or breaking even, they are going to go with the 1.7M.  If you look at past history, Toyota’s most profitable years weren’t necessarily the years they sold the most cars.  I believe Toyota’s days of aiming to be the number one auto maker at the expense of profits are over.

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