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Car Sales Post Strong Gains, With Toyota as the Exception

December 1, 2010
4 min to read


DETROIT — New-vehicle sales in the United States rose nearly 17 percent in November, setting the stage for the industry to end the year on a high note and enter 2011 with considerable momentum.


But one carmaker, Toyota, has been left out of the strong gains, The New York Times reported. Toyota, still struggling to overcome the damage done to its image by numerous recalls, reported a 3.3 percent decrease in sales last month. Among the 10 largest manufacturers, all but Toyota reported increases of at least 12 percent.


All three Detroit companies posted sizable gains last month. Ford’s sales were up 20 percent, General Motors 12.2 percent, and Chrysler 16.7 percent.


Toyota is on pace to end the year with its lowest market share since 2005 and to sell the fewest passenger cars since 2003. Its share in November fell to 14.8 percent, from 17.9 percent a year earlier.


“They just don’t seem to be able to catch a break,” Jesse Toprak, vice president of industry trends and insight at TrueCar.com, which tracks vehicle sales, said. “Toyota has a tough road ahead. They have not been able to take advantage of the recovery this year.”


Mr. Toprak said he thinks Toyota’s slow reaction and inability to reassure many consumers after widespread complaints about its vehicles accelerating suddenly, “has hurt them permanently.”


Toyota officials attributed last month’s decline to a decision to sell fewer vehicles to businesses and governments that pay discounted rates — known as fleet sales — and a shift in demand toward trucks and away from smaller cars, Toyota’s forte.


Robert S. Carter, a Toyota group vice president, noted that the Toyota brand, which he heads, remained the industry’s most popular brand among individual buyers, even though its sales for the year were down. The Toyota Camry sedan is the top-selling car in the United States for the ninth consecutive year, despite a 24 percent decline in November.


“Over all, we believe our retail volume is right on track. We’re pleased with the month,” Mr. Carter said on a conference call with reporters. “We just chose not to participate in some of the fleet business that’s out there.”


But he conceded that the recalls, totaling more than 10 million vehicles globally this year, have taken a toll, hurting the company’s ability to attract new customers. On Tuesday, Toyota began a “limited service campaign” — short of a full-blown recall — to repair a coolant pump on 650,000 Prius hybrid cars.


“I won’t say that the opinion of our brand is where it was 18 months ago,” Mr. Carter said. “But we’re really pleased with the progress that we’re making. Our retention of our current owner body has not wavered one bit.”


Toyota has been offering some of its best-ever deals this year in the hopes of drawing in shoppers. Meanwhile, the Detroit automakers have been largely successful in ending their dependence on big discounts, a tactic that helped cause many of their financial troubles.


“Without new product to compete with and stripped of its bulletproof quality reputation, Toyota is forced to sell on the deal,” Jessica Caldwell, a senior analyst with Edmunds.com, which provides car-buying advice to consumers, said. “This lack of profitability is a growing concern for dealers.”


Ford is on track to outsell Toyota for the first time since 2006 with its sales in 2010 up 16.6 percent. The Ford brand sold 31.3 percent more passenger cars in November than a year ago, compared to an 18 percent decline for the Toyota brand.


Ford said it planned to build 11 percent more vehicles in the first quarter of 2011 — 635,000 — than it did a year earlier. Ford’s 20 percent overall increase accounts for sales last year by the Volvo brand, which Ford no longer owns, while sales of its remaining brands were up 24.3 percent.


Excluding the brands G.M. closed, Pontiac, Saturn and Hummer, and the one it sold, Saab, sales of the brands it still operates were up 21 percent.


“Consumers are still cautious,” said Jim Bunnell, a G.M. executive who oversees the company’s dealer network and sales, “but we’re starting to see people show an inclination to come back into dealerships and go back into malls. As we go into 2011, we’re going to continue to see a nice improvement.”


Among imports, sales were up 48.2 percent for Kia, 45.2 percent for Hyundai, 26.8 percent for Nissan and 21.1 percent at Honda.


The Detroit automakers, all of which have operating profits for three straight quarters, are being helped financially by higher truck sales in recent months. Sales of light trucks, which generally sell at higher prices and generate more profits than cars, were up 24 percent at Ford and Chrysler and 21 percent at G.M.


November was the second straight month in which the industry’s seasonally adjusted annualized selling rate was more than 12 million. The rate was below 10 million in parts of 2009 but still far below the 17 million rate in the early 2000s.


Analysts expect the industry to sell about 11.5 million vehicles in 2010 and project that 2011 sales could reach 13 million.

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