Toyota's No. 1 -- but Ford's on the muscle

Toyota's No. 1 -- but Ford's on the muscle '09 race is a done deal, but momentum has shifted to Dearborn
Kathy Jackson Automotive News 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 second.
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 164,334 units.
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 them through."
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 Fusion.
Oct. 2009 Oct. 2008 Camry 13.20% 15.70% Fusion 6.70% 3.50% Source: Edmunds.com
Big sale
Toyota is digging into its deep pockets. Not only did Toyotathon start early; dealers say it is the biggest winter sales event they have seen.
"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 leasing."
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 the past.
"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 want you."
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.
Considering Ford
Share of all online new-vehicle shoppers who configured vehicles for each brand in August Ford22.40% Toyota22.30% Source: Compete Inc.
Bad press
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 cars.
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 percent).
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."
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Ford has done an amazing job of improving styling, quality, and profits. Mullaly has apparently done an excellent job while others have slept.
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From where I sit, it certainly does look like that. And they avoided the leg-hold trap of government involvement. Who'd 'a thunk it?
Time will tell, though. Check again in another ten years. Things can change in a eye-blink...
--
Tegger


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Howie Long and those GM commercials. LOL. Would you buy from a car company that used DexCool yet won't warranty countless a number a cars it's passed onto the repair shop?? Never again. I will stick with my Taurus.

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Read a lot of good things about the Ford Fusion and your post. So, I drove one today. The seats leave a lot to be desired. But it's still a nice car. Some cheap areas like the prop rod under the hood and cheap plastic on the grill that won't last long. Nice smooth ride. They've come a long way. But I think they'll exhaust themselves trying to keep up. The Kia Forte was a better value IMO, especially when the warranty is taken into account.
The Tarus looks like the overloaded the dash and center console, almost to the point where 2 people can't fit in the front, kinda odd looking interior.They may be trying too hard?
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What that article neglects to tell you is Toyota has been dumping Tundras a the Manheim Auto Auctions for over a year for as low as $25,000 and Solaria on the rental cars companies for $3,000 UNDER NET-NET dealer invoice, as well, to try to stay on top.
wrote:

Read a lot of good things about the Ford Fusion and your post. So, I drove one today. The seats leave a lot to be desired. But it's still a nice car. Some cheap areas like the prop rod under the hood and cheap plastic on the grill that won't last long. Nice smooth ride. They've come a long way. But I think they'll exhaust themselves trying to keep up. The Kia Forte was a better value IMO, especially when the warranty is taken into account.
The Tarus looks like the overloaded the dash and center console, almost to the point where 2 people can't fit in the front, kinda odd looking interior.They may be trying too hard?
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Most of the car companies pump up their numbers with Fleet sales on the cheap. What's your point..?
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True, however the fleet discount to rental car companies averages only around $600 to $800 off dealer invoice, not $3,000 UNDER NET-NET dealer invoice.
In addition the rental car companies are required to kept the vehicle in service for six months or the next model year intro date, WOF.
The Toyota sales to the rental car companies deal has no restrictions and the cars are sold by the Toyota distributer, not by its franchised dealerships, as in the case with all other manufactures.
It is a violation of US franchise law for manufactures to sell to ANYONE except their franchised dealerships. Toyota is the exception, because when they first came to the US as was the case with VW at one point, they sold cars to a distributer not franchised dealerships and they still do today.
wrote:

Most of the car companies pump up their numbers with Fleet sales on the cheap. What's your point..?
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I have a 2007 Fusion with about 60,000 miles. Zero problems. Many mid-sized cars in the Fusion's class use prop rods to hold the hood open. Nice thing about prop rods is that they don't fail after 4 or 5 years and need to be replaced. Most cars use "cheap plastic" in the grilles. My Fusion is three years old and the cheap plastic looks as good as it did in 2006. While the seats may look plain they are much much more comforatbale that the seats in my SO's RAV4, particularly on a long trip. I'd rather have a reliable vehicle than one that has a long warranty and needs to use.

I agree on the Taurus dash area. I really like a lot of things about the new Taurus, but that oversized console has to go. Despite being much wider, the front seat hip room is about the same as the Fusion. Maybe when they build a cop version of the Taurus, they will offer a better front seat arrangement.
Ed
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Look to Ford next certified police vehicle to be a AWD twin blown V6 version of the Flex. IF and when, Ford decides to actually close the Canadian plant.
Every time Ford has set a date to close the plant, CV sales to Police Departments and taxi companies go UP. Currently annual sales are approaching 300,000. The GM and particularly the Chrysler certified police vehicles are a poor alternative to the much more useful, cost effective and safer full size CV.

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Why do you think it will be the Flex and not the Taurus?
Derek
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The Flex has the interior room needed by the departments. Like of the interior room needed by the departments is the main reason they do not like the GM and Chrysler certified police vehicles

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The Taurus would seem to have plenty of room if they ditch that oversized console. They should probably modify the back window so the visibility is better as well.
Derek
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CVs Interceptors do not have a council. The room where GM and Chryslers certified police cars have a problem is in rear, not the front.

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Mike Hunter wrote:

However, NYC city has a council. And a lot of other cities. So perhaps if all the members of the council wanted to sit in a car without a console, they can borrow a cop car.

Don't you mean chamber? I mean, is the place where the council meets called the chamber?

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Thank you for taking the time ounce again to proof read my post for me. Personally I have better things to do with my time, but I think you are wasting your time, since the average NG reader already knew I was referring to the console.

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Mike Hunter wrote:

Ounce? Are you calling me fat? Saying I am weighing too much?

Oh, is that what you meant?

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I've been told that the GM's & Chryslers have problems with both front and rear. Ask some policemen who actually use them. They're typically large guys and the front needs to be large enough to accomodate them as well as computers and video cameras etc. The back needs to be able to hold prisoners, and the trunk needs to be large enough to hold equipment and guns. The Ford CV's ace all those requirements.
Derek
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That precisely the problem with GM's & Chryslers certified police vehicles, Chryslers are the worse of the two.

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