Toyota's No. 1 -- but Ford's on the muscle
'09 race is a done deal, but momentum has shifted to Dearborn
December 14, 2009 - 12:01 am ET
LOS ANGELES -- Toyota is spending a ton of money to nail down this
year's U.S. brand sales race, but No. 2 Ford has seized the momentum.
So while Toyota is a sure thing in 2009, there's no guarantee about
which brand will be on top in 2010.
Toyota is putting the finishing touches on a triumphant decade --
nearly doubling market share to 14.3 percent since 1999 and rising
from fourth place to first. But a resurgent Ford is applying pressure,
both in sales volume and all-important purchase consideration by
probable buyers as measured by independent market research firms.
Compete Inc., a Massachusetts research firm that studies online car
shopping, says Ford has surpassed Toyota in customer consideration for
the first time since it began tracking such data in 2002.
"That's huge," says Lincoln Merrihew, Compete's automotive director.
"Toyota is still strong, but Ford is breaking away, gradually gaining
more share of market and getting more shoppers."
Ford was the top-selling U.S. brand for 19 out of 20 years -- until
2007, when Chevrolet grabbed the No. 1 spot, and Ford slipped to
third. Toyota won for the first time in 2008 as Chevy dropped to
As part of its push to finish No. 1, Toyota launched its annual
Toyotathon winter sale on Nov. 16, about two weeks earlier than usual.
The estimated $500 to $600 million campaign, which includes national
and regional advertising and incentives, all but assures Toyota will
be No. 1 for the second straight year. But Ford is making up ground in
more ways than one.
Although Toyota has outsold its rival this year by 58,249 units
through November, Ford has cut sharply into the lead. After the first
11 months of 2008, Toyota led Ford, which then was in third place, by
Also important for the future: Ford is closing the gap on quality.
"Ford has pretty much caught Toyota in quality, but it hasn't
translated into customer perception yet," says Dave Sargent, vice
president of automotive research for J.D. Power and Associates. "The
big challenge for Toyota is that as quality gets closer, what is their
differentiator? Toyota can't rely on that quality gap anymore to see
Closing the gap
The Toyota Camry rules the mid-sized car segment, but purchase
consideration is falling. Here are the percentages of Edmunds.com
shoppers for mid-sized sedans who configured the Camry and the Ford
Oct. 2009 Oct. 2008
Camry 13.20% 15.70%
Fusion 6.70% 3.50%
Toyota is digging into its deep pockets. Not only did Toyotathon start
early; dealers say it is the biggest winter sales event they have
"Toyota is spending money like crazy to get the message out," says
Mark Mason, who owns Ford and Toyota stores in Lugoff, S.C.
Deals range from 0 percent financing to cut-rate lease offers that
include the brand's two best-sellers, the Camry and Corolla. And
Toyota Financial Services is buying deep, extending the deals down to
the Tier 3 credit level scores of 650.
"Being No. 1 is so overblown," shrugs Toyota General Manager Bob
Carter. "Do I want to sell a lot of cars? Absolutely. I have a lot of
respect for Ford, but we're focused on what we do best, and that's the
retail side of the market.
"We have terrific leases," he added. "That's a huge opportunity for us
because just about everyone but Honda and Toyota has abandoned
But analysts and dealers say Ford is benefiting from better quality,
an improved lineup and a halo effect because it did not take
government bailout money.
Edmunds.com says that for the Ford Fusion, "purchase intent" -- when a
shopper on its site takes time to configure a vehicle online -- rose
from 3.5 percent of mid-sized car shoppers to 6.7 percent from October
2008 to October 2009. Purchase intent for the segment-leading Camry
slipped from 15.7 percent to 13.2 percent over the same period.
The Fusion is catching up in raw sales numbers, too. The Camry outsold
the Fusion by about 275,000 units in 2008 but will win by only about
160,000 units this year.
"Intent is the best measure we have of the likelihood of purchase,"
says Stephen Berkov, director of client strategy at Edmunds.com.
He says fewer customers are automatically turning to Toyota than in
"More people are considering what the brands mean to them," Berkov
says. "Now you just can't say your brand name and expect people to
Compete, which tracks all major online car-shopping sites, says the
Ford brand pulled even with No. 1 Toyota in customer consideration in
January, each with 20 percent consideration. Ford fell back a bit,
then caught up with Toyota again in May and pulled ahead in August,
with its highest consideration rate ever: 22.4 percent compared to
22.3 percent for Toyota.
Compete has not compiled industrywide consideration numbers for
September and October. But Merrihew said Ford had 8 percent more
shoppers than Toyota in September and 14 percent more in October.
Compete likewise defines consideration as shoppers who take the
trouble to configure vehicles online.
Share of all online new-vehicle shoppers who configured vehicles for
each brand in August
Source: Compete Inc.
One example of the inroads Ford has made on Toyota: Toyota's Camry,
shown, outsold Ford's Fusion by about 275,000 units last year. This
year, that margin will be about 160,000.
A string of messy recalls this year adds to the pressure on Toyota.
Going forward, Merrihew says, "no way can the bad press help Toyota.
Nothing can be positive about that."
Toyota received a black eye this fall when it announced it would
recall 3.8 million of its Toyota and Lexus models to fix pedals and
replace floor mats that could cause unintended acceleration in the
It also is recalling Tundra pickups for rusted frames, and the
National Highway Traffic Safety Administration is investigating
complaints of engine stalls in 2006 Corolla and Matrix models.
"Does it affect business? That's hard to tell," Carter says. "We had a
very good November, our highest market share ever for a November" (15
He says the pedal fix will begin in January.
"We're working 24/7 on it," Carter says. "There is a lot of confusion
out there. I'm confident we will turn this into an opportunity that
shows we stand behind the customer."
A consumer study by Automotive Lease Guide conducted before the recent
Toyota recalls, shows Toyota and Honda continue to top the list when
it comes to perceived quality.
On a scale of 1 to 100, consumers rated Toyota at 85, while Ford
trucks got 65 and Ford cars a little more than 60. But both Ford cars
and trucks were up 10 points from the previous year, the biggest gains
among the brands studied.
"A lot of it has to do with Ford being the only domestic that didn't
get the bailout money," says Matt Traylen, the guide's chief
economist. "It also has a lot of good new product."