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the U.S. in October 2006, Consumer March to Quality Keeps Its Pace: Toyota Sales Soar,
Honda Sales Rise, and GM and Ford Sales Jump with the Duo's October 2005
Post-Fire-Sale Distortion, But Drop Without
Auto on Info November 2006
In the U.S. in October 2006, Consumer March to Quality Keeps Its Pace: Toyota Sales Soar, Honda Sales Rise, and GM and Ford Sales Jump with the Duo's October 2005 Post-Fire-Sale Distortion, But Drop Without
By James B. Bleeker
Toyota Motor Corporation, with a 1998-2002 Reliability Percentrank average of .90, saw its U.S. auto sales rise by 14% in October 2006, over those of October 2005, to set a new October sales record. Its U.S. car sales rose 9%, and its U.S. truck - SUV, minivan, and pickup - sales rose 21%. Year to date, Toyota's U.S. cars sales are up 13% and its truck sales are up 12%.
The following table provides detailed information regarding Toyota Motor Corporation's U.S. sales in the month of October 2006, together with 1998-2002 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: October 2006 Toyota Sales, Percentage Changes, and 1998-2002 Reliability Percentrank Averages, by Line, Type, and Model Manufacturer Division Type of Vehicle Model Sales Volume Percentage Change for October 2006 from October 2005 1998-2002 Reliability Percentrank Average Toyota Motor Corporation 189,011 13.6% .90 Scion Division 12,344 -4.1% N/A xA 2,593 2.1% N/A xB 3,963 1.3% N/A tC 5,788 -9.9% N/A Toyota Division 152,661 16.4% .90 Passenger Car 80,611 8.4% N/A Avalon 7,024 -10.9% .89 Camry1v,1r,1f,R6 33,8127 8.8% .889 Corolla1r,R6,2006A 24,642 -4.6% .91 Prius*^,1r,1s,R6 8,733 -8.6% .861 Yaris 6,398 N/A N/A Light Truck 72,050 27.0% N/A RAV41,1r (SUV) 11,154 163.1% .94 Sienna*,1s,1f,2006A (minivan) 11,870 11.4% .81 Highlander1v,1r,1s,R6,2006A (mid-size SUV) 10,2968 18.1% .991,10 FJ Cruiser (SUV) 5,334 N/A N/A 4Runner1v,1s,R6 (SUV) 6,242 -19.4% .9411 Land Cruiser1r,1s,R6 (large SUV) 282 -8.1% .92 Tundra1r,1s,R6 (pickup truck) 10,046 17.1% .9412 Tacoma1f (pickup truck) 14,121 1.4% .9413 Lexus Division 24,006 7.0% .92 Passenger Car 14,373 23.4% N/A ES 3501 6,357 46.7% .962 LS 430/460*^,1r,1s,R6 2,097 33.2% .982 GS 300R6 1,793 -18.2% .962,3 GS 430 / 450h 2046 -42.0% .962,3 SC 430R6 (hardtop convertible) 458 -37.4% .851,2 IS 250 / 350 3,4644 40.6% .911,2 Light Truck 9,633 -10.7% N/A RX 350*^,1,1s,2006A and 400hR6,2006A (SUV) 7,2505 -5.9% .932 GX 4701s (SUV) 1,871 -23.7% N/A LX 470 (large SUV) 512 -19.0% .872 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 October sales breakdown of the IS series was unstated. 5The RX 350 had October sales of 6,011 and RX 400h - 1,239. 6The October sales breakdown of the GS 430 and the GS 450h was unstated. 7The non-hybrid Camry had October sales of 31,006 and the Camry hybrid - 2,806. 8The October sales breakdown of the non-hybrid Highlander and the Highlander hybrid was unstated. 9The 1998-2002 Reliability Percentrank for the 4-cylinder Camry is .88, that for the Camry Solara is .90, and that for the V6 Camry is unavailable. 10The 1998-2002 Reliability Percentrank for the V8 Highlander is .98. 11This 1998-2002 Reliability Percentrank is for the V6 4Runner. 12The 1998-2002 Reliability Percentrank for the V8 Tundra is .86. 13This 1998-2002 Reliability Percentrank for the V6 Tacoma is .93. 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 October 2006 over October 2005 were the Toyota RAV4 small sport-utility vehicle, up 163.1% to 11,154, the Lexus ES 350, up 46.7% to 6,357, the Lexus IS 250 / 350, up 40.6% to 3,464, the Lexus LS 430 / 460, up 33.2% to 2,097, the Toyota Highlander sport-utility vehicle, up 18.1% to 10,296, the Toyota Tundra pickup truck, up 17.1% to 10,046, the Toyota Sienna minivan, up 11.4% to 11,870, the Toyota Camry, up 8.8% to 33,812, and the Toyota Sequoia large sport-utility vehicle, up 5.6% to 2,705.
Toyota's Hottest Sellers in October 2006 2006 Toyota RAV4 2007 Lexus ES 350 2006 Lexus IS 350 2006 Lexus LS 430 2006 Toyota Highlander 2006 Toyota Highlander Hybrid 2006 Toyota Tundra 2006 Toyota Sienna 2006 Toyota Camry Solara 2007 Toyota Camry XLE Toyota Sequoia All of the above links are to onsite review pages for the 2006 models. The fact that sales of the Scion line, Toyota's new youth-oriented line, and the Prius, the globally popular hybrid, are down suggests that Toyota's October U.S. sales were constrained by high global demand and limited production capacity. This proposition is supported by Toyota's double-digit September 2006 European sales growth1 and Edmunds.com's estimate of the average lot-stay time of Toyota vehicles sold in the U.S. in September 2006 (26 days). The following chart helps put this lot-stay time into perspective.
U.S. sales of the Lexus LX 470 through October 2006 exceeded those of the Toyota Land Cruiser, a more Spartan cousin, by 69.4%.
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 85.9% of the Corollas sold in the U.S. through October 2006 were made in North America and 82.1% of the Camrys sold in the U.S. through October 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. Currently, all Yaris sold in the U.S. are made abroad; however, Toyota plans North American production of this model, so it may behoove U.S. consumers eyeing the Yaris to buy it within the next two years.
Honda Motor Company, with a 1998-2002 RPA of .88, saw its October 2006 U.S. auto sales rise 4% to 110,624. Two of Honda Motor Company's models showing good-to-excellent gains in October 2006 over October 2005 were the Honda CR-V small sport-utility vehicle (with a 1998-2002 RPA of .97 and 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 95.7% to 20,413 and the Acura MDX sport utility vehicle (with a 1998-2002 RPA of .79 and a CR 2006 predicted short-term reliability in the second-highest category), up 6.4% to 4,429.
Two of Honda's Hottest Sellers in October 2006 2007 Honda CR-V 2006 Acura MDX The above links are to onsite review pages for the 2006 models. Subaru division of Fuji Heavy Industries, Ltd., with a 1998-2002 RPA of .75, saw its October 2006 U.S. auto sales fall 4%.
Nissan Motor Company, with a 1998-2002 Reliability Percentrank average of .73, saw its October 2006 U.S. auto sales rise 8%.
Mazda Motor Corporation, with a 1998-2002 RPA of .65, saw its October 2006 U.S. auto sales rise a fraction of 1%.
Overall, the October 2006 U.S. sales by the auto manufacturers of higher quality products were solid. Toyota, Honda, Nissan and Mazda all showed gains and Toyota sales soared 13.6%.
At the other end of the quality spectrum, General Motors Corporation, with a 1998-2002 RPA of .32, saw its October 2006 sales soar 21.5% over October 2005's post-fire-sale abysmal sales. A better comparison would be against GM's October 2004's sales, from which GM suffered a 3% compounded decline in sales. The following charts compare its current inventory glut against those of Ford and Chrysler and its 2004 pre-fire-sale glut.
Nonetheless, GM's October 2006 sales are solid enough to suggest that it may successfully deal with its declining U.S. market share with periodic downsizing and without multiple recourse to Chapter 11 bankruptcy filings, barring some peculiarly idiotic management or engineering decision (something less than peculiarly idiotic should be weatherable).
Chrysler Group of DaimlerChrysler, AG, with a 1998-2002 RPA of .40, saw its October 2006 U.S. auto sales rise 0.7%.
Ford Motor Company, with a 1998-2002 RPA of .48, saw its October 2006 U.S. auto sales soar 13.2% from last October's post-fire-sale abysmal sales, but plunge 7%, compounded annually, from those of October 2004.
The year-to-date U.S. auto market shares through October, that are tracked, were unchanged from those through September.
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 (1998-2002 RPA of .32) clobbered Hyundai (1998-2002 RPA of .41) in October 2006; Hyundai's sales rose 8% as GM's rose 21.5%, although GM's October 2006 sales change is inflated by its October 2005 post-fire-sale sales dive.
U.S. October 2006 auto sales by Saab, a European subsidiary of General Motors with a 1998-2002 RPA of .32, rose 112%, while sales by Volvo, a European subsidiary of Ford with a 1998-2002 RPA of .32, rose a fraction of a percent. If comparison is made with October 2004 sales, both suffered declines - 6% and 12%, respectively, compounded annually.
In the niche markets, Porsche October 2006 U.S. auto sales fell 5%, BMW sales fell 1%, and Mercedes-Benz sales rose 17%. In October 2006, old line European nobility's grip on U.S. fealty held rather steady.
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 October 2006 over October 2005 are daily-selling-rate percentage changes and consequently take account of the fact that there were 25 selling days in October 2006 and 26 in October 2005.
1 "GM Loses Ground as European Sales Fall 2.6 Percent in Sept." Aoife White, the Associated Press, Detroit News, October 13, 2006, http://www.detnews.com/apps/pbcs.dll/article?AID=/20061013/UPDATE/610130445/1148/AUTO01
Source for October 2006 auto manufacturer sales data: "Automobile Sales Statistics," The Wall Street Journal, November 2, 2006, p. A7 (Note that in the Journal's table, percentage changes are not daily-selling-rate percentage changes and that sales totals for the Big Three include sales of their European lines.)
Source for October 2004 auto manufacturer sales: "U.S. Auto Sales Table for October 2005," the Associated Press, once available at Yahoo! News (This table also provides the 2004 sales data for comparison.)
Source for detailed Toyota sales data: "Toyota Reports Best-Ever October Sales," November 1, 2006, at http://pressroom.toyota.com/Releases/View?id=TYT2006110108952
Source for Honda sales data: "American Honda October Sales Increase 3.7 Percent; All-New CR-V Sets All-Time Sales Record," November 1, 2006, http://www.hondanews.com/CatID1000?mid=2006110161798&mime=asc
Source for Toyota's plans for North American production of the Yaris: "Toyota to Build Two Plants in North America: Report," Reuters, October 28, 2006, available at Yahoo! News
Source for Reliability Percentranks and Percentrank averages: Auto on Info's Table I-MVRP
Source for July 2006's hottest ten: "Hot Off the Lot," Wall Street Journal, August 10, 2006, p. D2 (See "By WSJ's Lot-Stay Time, Made-in-Japan TMC Models Account for 7 of July's Hottest 10," Auto on Info, August 2006.)
Sources for Consumer Reports 2004 Quick Picks: Consumer Reports, February 2004, p. 49 and Consumer Reports, May 2004, p. 53, Consumer Reports, August 2004, p. 51, Consumer Reports, December 2004, p. 59
Source for CR 2004 Top Picks: Consumer Reports, April 2004, pp. 8,9
Source for CR 2005 Top Picks: Consumer Reports, April 2005, pp. 6,7
Sources for CR 2005 Quick Picks: Consumer Reports, April 2005, p. 31 and Consumer Reports, August 2005, p. 51, the latter providing the "best all-around Quick Picks"
Source for CR 2005 predicted short-term reliability ratings (save for the Infiniti M45): "Vehicle Profiles: A User's Guide," Consumer Reports, April 2005, pp. 40-73
Source for CR 2005 predicted short-term reliability rating for the Infiniti M45: Consumer Reports, September 2005, p. 51
Sources for IIHS Best Pick Frontals: "Toyota Camry and Honda Accord Dominate Results of IIHS' Frontal Offset Crash and Side Impact Tests," Auto on Info, April 2005, "Toyota Sienna and Honda Odyssey Minivans Score Best on IIHS 2005 Crash Tests, Receive "Best Pick Frontal" Designation; GM's Chevrolet Astro, GMC Safari, Pontiac TransSport / Montana, and Chevrolet Venture Score Worst," Auto on Info, April 2005, and "Toyota Tacoma Pickup Truck Scores Best on IIHS 2005 Crash Tests, Receives "Best Pick Frontal" Designation," Auto on Info, April 2005
Sources for Consumer Reports' 2006 predicted short-term reliability ratings of "most reliable": "Asian Auto
