Struggling to regain sales and market share momentum after months of production shortages, Toyota is lifting a few plays from its Detroit competitors – notably bumping up incentives and dumping the new Camry and other products into low-profit fleets.
The strategy may generate strong year-over-year sales numbers after the sharp downturn the maker suffered in 2011, but it suggests Toyota may be finding it harder to lure back once-loyal buyers in today’s hotly competitive market. The shift could also make it difficult for the maker to reverse its recent earnings downturn as it trades sales gains for lower margins.
(Toyota earnings slide 14% during latest quarter. Click Here for that story.)
January’s numbers initially seemed strong, Toyota posting an overall 7.5% increase, year-over-year, the maker giving much of the credit to the redesigned 2012 Camry. “This month’s results show that the all-new Camry is a hit, attracting both new and loyal customers with its class-leading performance and value,” said Bob Carter, Toyota Division group vice president and general manager at Toyota Motor Sales, U.S.A.
But a closer inspection reveals that fully half of the Camry sedans were dumped into daily rental fleets. Excluding those vehicles, Toyota sales would be up a far more modest 1% for January.