Toyota and Ford wage battle for market share
April 8, 2014
Ford continues to close the gap on Toyota in terms of sales and popularity. With its trendy mid-size sedan in the Fusion and its well-liked Escape SUV, Ford is becoming one of the leading choices for retail automobile shoppers, according to Bloomberg. Retail car buyers are a better measure of consumer popularity than overall sales because they don't take into account large fleet orders from corporations and the government.
Bloomberg noted that Toyota has had an incredibly strong brand image for decades, and consumers didn't hesitate to buy their vehicles based on their well-known reliability and overall quality of construction. Unfortunately for Toyota, that positive consumer mind frame is starting to fade away as consumers shy away from the brand.
Ford is starting to close the gap on Toyota.
“Before 2010, Toyota's image was bulletproof, and while it is still strong, it's not rock solid and as perfect as it was before,” Tom Libby, auto analyst for IHS Automotive, told Bloomberg. “It now appears their march forward has been slowed.”?
Reasons for new trends
Toyota is missing out on a portion of its previous market due to vehicle recalls, natural disasters and more intense competition, according to Bloomberg.
The Japanese auto manufacturer recalled 10 million vehicles due to complications related to unintended acceleration involving defective floor mats and accelerator pedals in 2009 and 2010. It then lost sales in 2011 after an earthquake and tsunami pummeled Japan, closing Toyota's car factories for a period of time.
“A fair number of people—I was among them—thought that after the recall situation and after the tsunami that Toyota would just resume where they were,” Libby said. “Lo and behold, they have not.”
In the U.S. retail market, Toyota's market share fell to 13.5 percent in 2013 after being as high 16.3 percent in 2008, according to data from IHS Automotive that used Polk vehicle-registration records. Toyota's 2.8 percentage-point drop during that time equaled Ford's gain over that span, which now sits at a 13.2 percent market share.
It should be noted that Toyota has been able to increase sales throughout the country as auto sales have risen over the past two years. The automaker saw its sales climb more than half a million over that span.
“Share doesn't pay the bills, sales do—that was and is our focus,” Toyota spokesman Mike Michels said in an email to Bloomberg. “Toyota recovered an enormous amount of volume after the recession and Tsunami/Thailand floods impacted periods.”
One reason Toyota and Ford have large market shares is that many of their cars are relatively inexpensive. Forbes recently reported that the Toyota Sienna LE minivan is one of the cheapest automobiles to insure at an average of $1,111 per year.
“Mini vans have always had a strong showing in our 'least expensive' rankings,” Amy Danise, editorial director of Insure.com, told Forbes. “They regularly prove to be safe, economical vehicles. And, notably, we're seeing pickup trucks back on the 'least expensive' list after an absence last year.”
Forbes said Ford's popular Escape SUV is among the cheapest small-size SUVs to insure, as are the Kia Sportage and Hyundai Tuscon.
The big three in sales?
General Motors was the top vehicle seller in February, Ford was second and Toyota third, according to Bloomberg. Still, those three vehicle manufacturers reported slight dips in February sales, while Nissan and Chrysler reported gains last month.
Bloomberg reported the numbers are not finalized, but some industry experts believe there will be a jump in sales for February, which is surprising after many dealerships in the Midwest and Northeast reported slow sales due to frigid conditions.