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the U.S. in August 2006, Toyota Sales Soar Again, Honda's Dip, as do Chrysler's,
Ford's Plunge, and GM's Fall a Bit of a Bit and Its Market Share Drops a Notch
Auto on Info September 2006
In the U.S. in August 2006, Toyota Sales Soar Again, Honda's Dip, as do Chrysler's, Ford's Plunge, and GM's Fall a Bit of a Bit and Its Market Share Drops a Notch
By James B. Bleeker
Toyota Motor Corporation, with a 1997-2001 Reliability Percentrank average of .90, saw its U.S. auto sales rise by 13% in August 2006, over those of August 2005, to set a new August sales record. Its U.S. car sales rose 15%, and its U.S. truck - SUV, minivan, and pickup - sales rose 9%. Year to date, Toyota's U.S. cars sales are up 13% and its truck sales are up 8%.
The following table provides detailed information regarding Toyota Motor Corporation's U.S. sales in the month of August 2006, together with 1997-2001 model, line, and manufacturer Reliability Percentrank averages. Those models that were among July 2006's Hottest Ten, per WSJ's lot-stay time, for all manufacturers, are in bold blue. That model that received CAA's most recent Pyramid Award for ownership satisfaction is italicized.
Table I: August 2006 Toyota Sales, Percentage Changes, and 1997-2001 Reliability Percentrank Averages, by Line, Type, and Model Manufacturer Division Type of Vehicle Model Sales Volume Percentage Change for August 2006 from August 2005 1997-2001 Reliability Percentrank Average Toyota Motor Corporation 240,178 12.6% .90 Scion Division 19,252 21.7% N/A xA 3,111 6.8% N/A xB 6,956 35.1% N/A tC 9,185 18.5% N/A Toyota Division 189,852 12.8% .90 Passenger Car 106,516 13.5% N/A Avalon 6,747 -28.0% .86 Camry1v,1r,1f,R6 42,2277 1.9% .90 Corolla1r,R6,2006A 34,971 7.4% .93 Prius*^,1r,1s,R6 11,177 9.3% .851 Yaris 11,392 N/A N/A Light Truck 83,336 12.0% N/A RAV41,1r (SUV) 14,363 87.4% .93 Sienna*,1s,1f,2006A (minivan) 12,807 -14.8% .80 Highlander1v,1r,1s,R6,2006A (mid-size SUV) 11,6458 -14.0% .981 FJ Cruiser (SUV) 6,259 N/A N/A 4Runner1v,1s,R6 (SUV) 8,302 -8.6% .96 Land Cruiser1r,1s,R6 (large SUV) 286 -40.3% .91 Tundra1r,1s,R6 (pickup truck) 11,173 30.3% .921 Tacoma1f (pickup truck) 16,022 -4.4% .94 Lexus Division 31,074 6.4% .92 Passenger Car 18,376 21.0% N/A ES 3501 7,973 4.5% .952 LS 430*^,1r,1s,R6 1,386 -47.6% .972 GS 300R6 2,609 -10.6% .933 GS 430 / 450h 3626 -33.5% .932,3 SC 430R6 (hardtop convertible) 493 -35.7% N/A IS 250 / 350 5,5534 710.2% .901,2 Light Truck 12,698 -9.4% N/A RX 350*^,1,1s,2006A and 400hR6,2006A (SUV) 9,8055 -2.1% .922 GX 4701s (SUV) 2,458 -20.2% N/A LX 470 (large SUV) 435 -52.9% .852 Note: Percentage changes are daily selling rate percentage changes from previous year's version of the model, and Corolla sales total includes Matrix wagon. 1Based on data for 2 or fewer model years 2Includes data for preceding model number 3The GS 300 and the GS 430 have pooled reliability data and consequently a common Reliability Percentrank. 4The IS 250 had August sales of 3,890 and IS 350 - 1,663. 5The RX 350 had August sales of 8,291 and RX 400h - 1,514. 6The GS 430 had August sales of 170 and GS 450h - 192. Note that more hybrids of the GS 400+ Series were sold than non-hybrids. 7The non-hybrid Camry had August sales of 37,250 and the Camry hybrid - 4,977. 8The non-hybrid Highlander had August sales of 9,064 and the Highlander hybrid - 2,581. Bold blue script indicates that the model was in July 2006's Hottest Ten, for all models of all manufacturers. Italicized script indicates that the model received CAA's most recent Pyramid Award for ownership satisfaction. Underscored script indicates that the model is a Consumer Reports 2004 Quick Pick. A gold asterisk (*)indicates that the model is a CR 2004 Top Pick. A gold caret (^)indicates that the model is a CR 2005 Top Pick. A gold one (1)indicates that the model is a CR 2005 overall Quick Pick, a Quick Pick with very good or excellent ratings in five categories - road performance, predicted reliability, safety (accident avoidance and crash protection), owner satisfaction, and fuel economy. A gold 1v (1v)indicates that a version of the model is a CR 2005 overall Quick Pick. A gold 1r (1r)indicates that the model is a CR 2005 reliability Quick Pick. A gold 1s (1s)indicates that the model is a CR 2005 owner satisfaction Quick Pick. A gold 1f (1f)indicates that the model is an IIHS 2005 Best Pick Frontal. A gold R6 (R6)indicates that the 2006 model has received a Consumer Reports predicted short-term reliability rating of "Most Reliable." Additional 2006 models by Toyota Motor Corporation that are on CR's Most Reliable list are the Toyota Echo, the Toyota Matrix wagon, the Lexus IS300, and the Toyota RAV4 small sport utility vehicle. A gold 2006A (2006A) indicates that the 2006 edition is a CR top-of-vehicle-category Quick Pick. In particular, the 2006 Toyota Corolla is a CR 2006 All-Around Competence and Safety Quick Pick, the 2006 Toyota V6 and Hybrid Highlander and the 2006 Lexus RX400h/RX350 are CR 2006 Comfort, Versatility, and Snow Traction Quick Picks, and the 2006 Toyota Sienna is a CR 2006 Minivan Quick Pick. The Toyota Motor Corporation models showing the largest sales gains in August 2006 over August 2005 were the Lexus IS 250 / 350, up 710.2% to 5,553, the Toyota RAV4 small sport-utility vehicle, up 87.4% to 14,363, the Scion xB, up 35.1% to 6,956, the Toyota Tundra pickup truck, up 30.3% to 11,173, the Scion tC, up 18.5% to 9,185, the Toyota Prius, up 9.3% to 11,177, the legendary Toyota Corolla, up 7.4% to 34,971, and the Scion xA, up 6.8% to 3,111.
Toyota's Hottest Sellers in August 2006 2006 Lexus IS 350 2006 Toyota RAV4 2006 Scion xB 2006 Toyota Tundra 2006 Scion tC 2006 Toyota Prius 2006 Toyota Corolla 2006 Scion xA The above links are to onsite review pages for the 2006 models. Toyota's Scion line, up 21.7% for the month, is a new line. It is intended to meet the tastes and needs of young adults; however, it has, as well, proven popular with Baby Boomers - older folks who are generally young at heart.
The Toyota Prius, up 9.3% for the month, is Toyota's gas-electric hybrid. The extraordinary popularity of the post-2004 editions is likely a consequence of a combination of factors. First, the post-2004 Prius is a midsize sedan. Second, it employs new gas-electric power-train technology that delivers more power and performs greater work per unit of energy source. This gives it an acceleration comparable to that of the Camry midsize sedan and increases its estimated EPA rating for in-city driving from 55 miles per gallon to 60 miles per gallon.1 In short, the post-2004 editions of the Prius are a bigger car with better gas mileage than its pre-2004 editions. Third, the Prius is a Consumer Reports 2004 Quick Pick, a CR 2004 Top Pick, a CR 2005 reliability Quick Pick, a CR 2005 owner satisfaction Quick Pick, a CR 2005 fuel efficiency Quick Pick, a CR 2005 Top Pick, and a recipient of a Consumer Reports 2006 "Most Reliable" rating.
The Toyota Corolla, up 7.4% in August, is an internationally renowned 40-year legend of reliability, durability, and pleasing performance and appearance. As a buyer from Africa at Dubai's mid-eastern auto mart Ducamz put it: Everyone wants one. Indeed, life may not be complete without having owned a Corolla, and life may be appreciably less interesting without having owned the same one for at least 20 years and 400,000 miles.
U.S. sales of the Lexus LX 470 through August 2006 exceeded those of the Toyota Land Cruiser, a more Spartan cousin, by 69.6%.
The likelihood of finding a 2006 made-in-Japan Toyota Corolla or Camry on a U.S. dealer lot is not good; Toyota Motor Corporation reports that 85.3% of the Corollas sold in the U.S. through August 2006 were made in North America and 82.7% of the Camrys sold in the U.S. through August 2006 were made in North America. If made-in-Japan is an uncompromisable criterion, most likely the U.S. consumer will have to buy used, if a Toyota Corolla or Toyota Camry is his/her desire. (However, the consumer may try telling the dealership, "Look for it. If you can't find it, there's no sale.") U.S. consumers seeking a made-in-Japan 2006 Lexus RX are more fortunate, as it appears that North American produced RXs account for only about two-thirds of the U.S. sold RXs. U.S. consumers looking for a made-in-Japan 2006 Toyota Avalon are without any hope, as all of the Toyota Avalons sold in the U.S. are made in North America; this may account for their modest predicted short-term reliability.
Honda Motor Company, with a 1997-2001 RPA of .84, saw its August 2006 U.S. auto sales fall 7% to 151,253. Honda Motor Company's models showing the largest sales gains in August 2006 over August 2005 were - excluding the Honda Insight and Acura NSX, which have nominal sales - the Honda Pilot sport utility vehicle (too recent to have a 1996-2000 RPA, but with a CR 2005 and 2006 predicted short-term reliability in the second highest category and a CR 2005 owner satisfaction Quick Pick, a CR 2004 and 2005 Top Pick, and a CR 2006 Comfort, Versatility, and Snow Traction Quick Pick, and with the Pilot EX-L edition a CR 2005 overall Quick Pick), up 31.6% to 19,100, the Honda Odyssey minivan (1997-2001 RPA of .81 and with a CR 2005 predicted short-term reliability in the second highest category, but with a CR 2006 predicted short-term reliability only in the middle category, also a CR 2005 and 2006 Top Pick and an IIHS 2005 Best Pick Frontal), up 11.6% to 18,773, the Honda CR-V small sport-utility vehicle (a CR 2006 comfort-versatility-and-snow-traction Quick Pick, with the 2006 EX edition accorded a CR short-term predicted reliability in the highest category and a CR crash protection rating in the highest category), up 6.8% to 16,321, and the Acura RSX, up 5.5% to 1,801.
Honda's Hottest Sellers in August 2006 2006 Honda Pilot 2006 Honda Odyssey 2006 Honda CR-V 2006 Acura RSX The above links are to onsite review pages for the 2006 models. Through August 2006, the Honda Odyssey minivan outsold the Toyota Sienna by 18,162 vehicles, or 16.9%, and the Toyota RAV4 sport utility vehicle outsold the Honda CR-V by 294 vehicles, or 0.3%. Both of the latter two have solid reliability histories; the Honda CR-V has a 1997-2001 RPA of .99 and a CR 2006 predicted short-term reliability in the highest category and the Toyota RAV4 has a 1997-2001 RPA of .93 and a CR 2006 predicted short-term reliability in the highest category. With regard to the reliability of the minivans, the Honda Odyssey has not fared well of late. Its 1999-2001 Reliability Percentrank average is only .70 (in contrast to its 1995-1998 RPA of .975) and Consumer Reports accords its 2006 model year a predicted short-term reliability of only average (rather matching its early 2002 Reliability Percentrank of .53), something of a disaster for a Honda-engineered product. However, as with the North-American-made Toyota Avalon, only time will tell what the Odyssey's actual short-term (1-to-3-year) reliability, mid-term (4-to-6-year) reliability, and longer term (7-to-8-year) reliability will be.
Subaru division of Fuji Heavy Industries, Ltd., with a 1997-2001 RPA of .82, saw its August 2006 U.S. auto sales fall 2%. Its car sales rose 10%, but its truck sales fell 19%.
Nissan Motor Company, with a 1997-2001 Reliability Percentrank average of .81, saw its U.S. auto sales fall 6% in August 2006. Its U.S. car sales rose a very small fraction of 1%, but its U.S. truck sales fell 14%.
Mazda Motor Corporation, with a 1997-2001 RPA of .70, saw its August 2006 U.S. auto sales fall 3%. Its car sales fell 13%, but its truck sales rose 23%.
In summary, the August 2006 sales by the auto manufacturers of quality products were solid, but only Toyota showed an overall gain. U.S. sales by Toyota rose 13%.
At the other end of the quality spectrum, General Motors Corporation, with a 1997-2001 RPA of .30, saw its August 2006 sales fall 0.02% and its U.S. market share drop a notch. This leaves General Motors with a year-to-date U.S. market share loss of two notches, that is, two percentage points, from its final 2005 U.S. market share. An annual market share loss of only two percentage points is almost certainly sustainable for several years without multiple bankruptcy filings.
The prospect of multiple GM bankruptcy filings seems remote, in part because GM marketing people, auto analysts, and nearly all of the news media have provided almost every imaginable explanation for rising Toyota sales and declining GM sales other than the great, decades-old, and irreducible quality gap between the two. (For reference, see Milestones in Automotive Quality, The Bottom Line on Auto Reliability, Extrapolation of the Great Gaps, Summary of the Best and Worst, Auto on Info, May 2002: "Another Data Analysis Pointing to Preeminent Toyota Durability," Auto on Info, February 2003: "Toyota Dominates the 2003 Pyramid Awards," Auto on Info, August 2005: "Speediest Dilapidations: General Motors Accounts for 16 of the 20 Worst," Auto on Info, January 2006: "Toyota Overwhelmingly Dominates Another Measure of Durability," Auto on Info, March 2006: "Toyota Reliability Takes Another Leap Up; Honda's Too; Toyota-GM Reliability Gap Sets Another Record: Will GM Bottom?") As an example, the Detroit News quotes Jesse Toprak, an auto analyst at Edmunds, as saying, "Toyota continues to plow through. They have the right mix, the right image, the right momentum."1 Not a word about the right quality. This suggests that GM marketing people, auto analysts, and most of the news media hold an unmitigated, deep and abiding contempt for the limited information-acquisition-and-assimilation skills of the sector of the U.S. population who currently own or have an interest in GM vehicles. Although only time will tell whether such contempt is warranted, from the persistence of the quality-gap omission, it seems safe to assume that little information trickles into the population sector owning GM vehicles and that the little information that trickles in is likely, in the main, not understood or easily understood. In short, if things get a little rough and sales become a tad tougher, GM likely need not convince its customer base of anything, it likely need only confuse them. Such should provide GM with a valuable constraint on annual U.S. market share losses.
However, it should be noted that there appears to be at least one company, other legal entity, or organized group that is quite concerned that information may be gathered and understood by existing Big Three owners. Site manager estimates that at least 99.99% of the search phrases that yielded a page of Auto on Info in Google's top ten results 2 1/2 years ago no longer do. Although such a curtailment of information access is quite a compliment to Auto on Info's organization and presentation, reality is that as access has fallen so have Big Three sales, hardly a result that one would anticipate if Auto on Info played anything more than an inconsequential role in information dissemination among prospective Big Three consumers. (However, it may be that curtailing access to information may have increased Reliable Two Sales and decreased Big Three sales some, as such curtailment makes information more valuable, confers power and authority on those who have it, and prompts many to share it. As a tactical matter, it would seem wiser for a Big Three or affiliated group to seek quickly to exploit the immediate defensive response that information may generate among its prospective customers and to campaign proactively to confuse its customer base than to seek to curtail information access, but wisdom may not be the hallmark of those employed by, or associated with, the Big Three.)
Chrysler Group of DaimlerChrysler, AG, with a 1997-2001 RPA of .40, saw its August 2006 U.S. auto sales fall 8%.
Ford Motor Company, with a 1997-2001 RPA of .51, saw its August 2006 U.S. auto sales plunge 15%.
The rotation by Big Three consumers, in their endless quest for a better Big Three product, appears to presently favor GM (with a sales drop of only 0.02%) at the expense of Chrysler and Ford (with respective sales drops of 8% and 15%).
General Motors' year-to-date U.S. auto market share fell a notch from last month; those by the remaining manufacturers that are tracked held steady.
Table II: Fractional Shares of the U.S. New Passenger Vehicle Market for the Reliable Two, Nissan, Hyundai, and the Big Three for Years 1993, 1995, 1997, 1999, 2001, 2003, 2005, and Year-to-Date 2006, Estimates of Natural Market Shares, Distances to Natural Market Shares, and Distances Traversed from 1993
Manu- facturer 1993
1995 1997 1999 2001 2003 2005 YTD 2006 Estimate of Natural Market Share* Remaining Distance to Natural Market Share Distance Traversed from 1993 Toyota .07 .07 .08 .09 .10 .11 .13 .15 .23 .08 .08 Honda .05 .05 .06 .06 .07 .08 .09 .09 .14 .05 .04 Nissan N/A N/A N/A N/A .04 .05 .06 .06 .16 .10 N/A Hyundai N/A N/A N/A N/A .02 .02 .03 .03 .05 .02 N/A GM .34 .33 .31 .29 .28 .28 .26 .24 .04 -.20 -.10 Ford .26 .26 .25 .24 .23 .19 .17 .17 .07 -.10 -.09 Chrysler .15 .15 .15 .16 .16 .13 .14 .13 .00 -.13 -.02 *The Estimate of Natural Market Share for each manufacturer, save Hyundai, is the fractional share of new registrations of passenger vehicles in New Zealand in 1996. New Zealand was chosen in order to remove from the decision-making process, or at least reduce the influence of, such factors as old name recognition, repetitive buying patterns, and normatively motivated attitudes. The intent was to obtain an estimate as to what share each manufacturer would be able to attain in an environment of rational decision-making, as best each individual is able. The year 1996 was chosen as it is the most recent year in American Automobile Manufacturers Association's 1998 edition of World Motor Vehicle Facts. Hyundai's Natural Market Share Estimate is based on (1) its 1996-2000 Reliability Percentrank average relative to GM's and (2) its product prices relative to those of GM. A different method of estimating the Natural Market Share of Hyundai is used as its reliability has notably improved since the late 1980s, but still does not significantly differ from GM's.
In the Hyundai vs. General Motors war, GM got some respite as it took a relatively mild clobbering in August 2006; Hyundai's sales advanced 2% as GM's fell only 0.02%.
U.S. August 2006 auto sales by Saab, a European subsidiary of General Motors with a 1997-2001 RPA of .43, rose 12%, and sales by Volvo, a European subsidiary of Ford with a 1997-2001 RPA of .29, fell 6%.
In the niche markets, Porsche August 2006 U.S. auto sales plunged 16%, BMW sales plunged 14%, and Mercedes-Benz sales rose 3%. In August 2006, old line European nobility's grip on U.S. fealty weakened a tad.
Note: Big Three sales and market shares do not include sales of European lines - Mercedes-Benz, Saab, Volvo, Jaguar, and Land Rover. Percentage unit sales changes for August 2006 over August 2005 are daily selling rate percentage changes and consequently take account of the fact that there were 27 selling days in July 2006 and 26 in July 2005.
1 "Cars Bright Spot in Aug.," Detroit News, Christine Tierney, September 2, 2006, at http://www.de
