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Toyota Incentives Slow, But Don’t Halt U.S. Slide

Japanese Leader is not growing as share declines in May.

by on Jun.03, 2010

Eight years of Camry sales leadership is now threatened.

Toyota Motor Sales (TMS), U.S.A. reported May sales of 162,813 Toyota, Lexus and Scion vehicles, an increase of 7% compared with the year-ago month. Last May, Toyota was clearly benefiting from the collapse of Chrysler and General Motors.

However, that was also well before Toyota’s subsequent recall of millions of vehicles for unintended acceleration problems, which are now implicated in the deaths of 89 people and subject to hundred of lawsuits. (See NHTSA Ups Toyota Death Tally ) The weakness appears in the Toyota brand since it only grew at roughly one-third the industry average. The Lexus luxury division fared better.

All told, Toyota’s U.S. market share fell almost two percentage points to 14.8%, according to Autodata Corporation. And its growth lagged the industry’s for the month, which increased by 19%, more twice TMC’s rate.

The beleaguered company established no-interest loans and discounted leases on most of its top-selling U.S. models in April and May, in an only partially successful attempt to stem a sales slide. Toyota is now continuing no-interest loans on 2011 Camry sedans, Corolla and Matrix cars, as well as the RAV4 sport-utility vehicle and Tundra pickup. The automaker will continue to provide two years of no-cost maintenance on all new Toyotas, according to Bob Carter, U.S. vice president of Toyota-brand sales. Toyota will also start advertising the “Star Safety System” that’s being added to all 2011 models.

Executives downplayed the ongoing troubles at Toyota in spite of the sales numbers, and a trend that will likely see the Honda Accord displace the Camry as the number one selling car in the U.S. this year, threatening Camry’s, eight-year best-selling streak. Year to date Camry is at 125,000 compared to 134,000 for Accord. Honda, said its sales rose to 117,173 Honda and Acura vehicles, from 98,344 as it managed to hold, but not increase, share at 11% in May. (See Driving the 2010 Honda Accord) Nissan’s share is hovering at about 8%.

“Memorial Day weekend kicked off the summer selling season with a bang, resulting in our best-selling weekend of the year,” said Don Esmond, senior vice president of automotive operations for Toyota Motor Sales, U.S.A.,  “As Toyota maintains its leadership position as the number one retail brand in the industry for the third consecutive month, we look forward to building this momentum as we work hard to exceed our customers’ expectations for quality, safety, reliability and service.”