As competition in the mid-size sedan segment continues to heat from a simmer to a boil, Toyota (NYSE:TM) is determined to keep its contender — the ubiquitous Toyota Camry — at the head of the pack. To do so, it’s dropping the prices on the units to make them more appealing for buyers.
The Camry has enjoyed the number one slot for more than ten years, but as companies like Honda (NYSE:HMC) and Ford (NYSE:F) make continuous improvements to their vehicles, the Camry is facing mounting challenges to stay where it is, and Toyota is pulling out all the stops – price cuts, rebates and lease deals — to keep it above the rest.
Since January, Ford’s Fusion, Honda’s Accord, and Nissan’s Altima sedans have seen impressive sales gains. During the same period, Toyota’s Camry sales have slid two percent, a sharp warning signal that in order to better compete in the booming sedan market, Toyota might have to revisit the drawing board, in addition to offering the added financial perks.
At the end of June last year, the Accord fell 59,000 units shy of the Camry’s sales figure. This past June, that number had slimmed to just 21,000, Detroit News reports. Earlier this month, the Camry’s average sale price was the lowest of the nine top-selling midsize cars, according to data from J.D. Power and Associates, the publication noted, adding that the discounts on the Camry were among the highest in the segment.
“Although the Camry is not that old, it certainly seems older than the rest,” said Jessica Caldwell, senior analyst for the Edmunds.com. Caldwell is addressing the styling of the Camry, which unlike its competition has not made the leap into a sportier format, and instead still maintains a basic, conservative appearance.
And it could be hurting sales. Caldwell also points out that Toyota needs to hold onto Camry’s market share because it’s the mainstay for the brand in the U.S., Toyota’s largest market.
John McEleney, who operates Toyota and General Motors dealerships in Clinton, Iowa, said his Toyota sales have held steady this year, but Camry sales are down. However, he maintains that the Camry is still a great car. “I just love the car,” he said. “But,” he admitted, “it doesn’t have a lot of flash.” McEleney also noted that vehicles like the Rav4 and the newly redesigned Avalon might be eating up sales of the Camry.
The Camry sold for an average price of just over $20,900 in early July, about $1,400 below the price from a year ago, according to the J.D. Power data. Toyota has sold 207,626 Camrys through June, though sales of the rose 21 percent during the same period to 186,860, despite the Accord’s $2,600 or so premium over the Camry. Ford’s Fusion has also made significant sales gains, of 19 percent.