As American consumers flock to big vehicles, Toyota is suddenly flat-footed with its lineup full of historically stalwart compact cars, mid-size sedans and hybrids.
After years of resilience, the Japanese automaker lost U.S. market share in 2016 for the second straight year, as low gasoline prices led buyers to snap up crossovers, pickup trucks and sport-utility vehicles.
Toyota's dilemma will be display Monday at the North American International Auto Show in Detroit where it will reveal a redesigned version of the Camry midsize sedan. On one hand, it remains the nation's best-selling car, the fourth best-selling vehicle of any kind. On the other, Camry sales fell 9.5% to 388,616 in 2016 as truck and SUV sales rose overall, according to Autodata
Toyota’s SUVs are hot-sellers, such as the RAV4 and Highlander SUVs, and its lineup continues to fetch strong prices. And the brand certainly isn't alone in feeling the affects of a car-heavy lineup. Volkswagen and Hyundai have some of the same issues.
But with too many struggling cars in the lineup, including the slumping Prius hybrid and Camry, Toyota is entering the auto show with insufficient firepower to capitalize on low gas prices.
Consequently, the company’s U.S. market share fell from 14.3% in 2015 to 14% in 2016, according to Autodata.
That’s its lowest full-year mark since 2005, according to Ward’s Auto — not including 2011, when sales temporarily tanked because of a controversy over largely unfounded reports of unintended acceleration. And it’s the first time since 1994 that the company has lost market share for two consecutive years.
“There’s no question that they’ve been slow to market with some of the hottest products and segments,” said Joe Wiesenfelder, executive editor of Cars.com. “It’s especially disappointing because this is the company that arguably created the car-based SUV with the RAV4 and then came out with Lexus RX 300, which was just a revelation.”
In 2016, about 52% of Toyota’s sales were crossovers, pickups and SUVs, up from 48% in 2015 and marking the first time that cars represented less than half of its sales, according to the company. But that trails the industry average of more than 60%.
“There’s still a pretty significant gap,” Toyota U.S. sales chief Bill Fay said. But “we’re very optimistic because we’re closing that gap.”
As a snapshot of Toyota’s struggles, consider the fate of the Prius. U.S. sales of the world’s best-selling hybrid vehicle tumbled 26% to 136,632 in 2016. That’s almost 100,000 cars fewer than Toyota sold in 2012.
Meanwhile, the red-hot Tacoma mid-size pickup truck has surpassed the Prius in sales, increasing 36% to 191,631 vehicles from 2012 to 2016.
Extra production capacity for 60,000 Tacoma pickups annually is on the way, but won’t come online until at least late 2017, Fay said.
“I’m a little excited to be able to get my hands on those Tacomas with my dealers,” Fay said.
Now there’s a fresh wrinkle in that plan: the president-elect of the U.S.
With Donald Trump threatening to pursue an import tax on vehicles made in Mexico and sold to U.S. consumers, Toyota and other manufacturers that have bet heavily on Mexican manufacturing could suffer the consequences of a movement against free trade.
Trump
attacked Toyota on Thursday for increasing production at a plant in Baja California, Mexico, where the Tacoma expansion is taking place. The automaker is also building a new $1 billion plant in central Mexico to make the Corolla compact sedan.
"NO WAY!" Trump said in a tweet. "Build plant in U.S. or pay big border tax."
Toyota said it is ready to work with Trump in pursuit of fair trade policies, but emphasized its massive U.S. manufacturing footprint.
With the North American International Auto Show set to cast a spotlight on the auto industry’s clash with Trump, expect Toyota to continue highlighting the $22 billion it has invested in 10 American factories, including what Cars.com concluded is the most made-in-America vehicle: the Toyota Camry.
Toyota is hoping the new version will capture attention.
“Everybody will see what we’ve done with America’s favorite car, which is sure to turn some heads and bring some real excitement to the mid-size segment,” Fay said.
