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In
November 2005, U.S. Consumer Shift to Quality Undeterred by Big 3 Discounts:
Reliable 2 Set New November Sales Records, GM and Ford Sales Plunge
Auto on Info December 2005
In November 2005, U.S. Consumer Shift to Quality Undeterred by Big 3 Discounts: Reliable 2 Set New November Sales Records, GM and Ford Sales Plunge
By James B. Bleeker
Toyota Motor Corporation, with a 1997-2001 Reliability Percentrank average of .90, saw its U.S. auto sales rise by 6% in November 2005, over those of November 2004, to set a new November sales record. Its U.S. car sales rose 9%, and its U.S. truck - SUV, minivan, and pickup - sales rose 1%.
The following table provides detailed information regarding Toyota Motor Corporation's U.S. sales in the month of November 2005, together with 1997-2001 model, line, and manufacturer Reliability Percentrank averages. Those models that were among July 2005's Hottest Ten (actually dozen, by tie), per WSJ's lot-stay time, for all manufacturers, are in bold blue. (The Wall Street Journal publishes the Hottest Ten list rather irregularly, likely because it changes so little over time.) That model that received CAA's most recent Pyramid Award for ownership satisfaction is italicized.
Table I: November 2005 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 November 2005 from November 2004 1997-2001 Reliability Percentrank Average Toyota Motor Corporation 169,665 5.6% .90 Scion Division 11,763 23.4% N/A xA 1,977 1.0% N/A xB 4,244 9.1% N/A tC 5,542 50.5% N/A Toyota Division 132,253 3.8% .90 Passenger Car 69,552 3.9% N/A Avalon 8,225 248.0% .86 Camry1v,1r,1f,R6 29,707 -7.2% .90 Corolla1r,R6 23,718 -7.9% .93 Prius*^,1r,1s,R6 7,889 29.1% .851 Light Truck 62,701 3.8% N/A Sienna*,1s,1f (minivan) 11,769 3.0% .80 Highlander1v,1r,1s,R6 (SUV) 9,676 -4.2% .981 4Runner1v,1s,R6 (SUV) 7,762 -2.1% .96 Land Cruiser1r,1s,R6 (SUV) 366 -37.7% .91 Tundra1r,1s,R6 (pickup truck) 10,892 20.3% .921 Tacoma1f (pickup truck) 13,878 19.4% .94 Lexus Division 25,649 7.7% .92 Passenger Car 14,001 31.6% N/A ES 3301 4,637 -24.8% .952 LS 430*^,1r,1s,R6 1,670 -36.6% .972 GS 300R6 2,223 424.3% .933 GS 430 396 317.8% .932,3 SC 430R6 (hardtop convertible) 628 -12.1% N/A IS 300 4,447 633.5% .901 Light Truck 11,648 -11.6% N/A RX 330*^,1,1s and 400hR6 (SUV) 8,060 -8.5% .922 GX 4701s (SUV) 2,856 -14.3% N/A LX 470 732 -28.5% .852 Note: 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. Bold blue script indicates that the model was in July 2005'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. The Toyota Motor Corporation models showing the largest sales gains in November 2005 over November 2004 were the Lexus IS 300 sedan and hatchback, up 633.5% to 4,447, the Lexus GS 300 sedan, up 424.3% to 2,223, the Lexus GS 430 sedan, up 317.8% to 396, the Toyota Avalon large sedan, up 248.0% to 8,225, the Toyota Scion tC, up 50.5% to 5,542, the Toyota Prius gas-electric hatchback, up 29.1% to 7,889, the Toyota Tundra pickup truck, up 20.3% to 10,892, the Toyota Tacoma pickup truck, up 19.4% to 13,878, and the Scion xB, up 9.1% to 4,244.
Toyota's Hottest Sellers in November 2005 2006 Lexus IS 300 2006 Lexus GS 300 2006 Lexus GS 430 (No Icon Available) 2006 Toyota Avalon 2006 Scion tC 2006 Toyota Prius 2006 Toyota Tundra 2006 Toyota Tacoma 2006 Scion xB The above links are to onsite review pages for the 2005 models. Toyota's Scion line, up 23.4% 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 29.1% 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. (In October, Toyota announced a Special Service Campaign to recall some 2004-2005 Priuses for repair of a software glitch and expressed confidence that the repair will solve the Prius' stalling problem. See "Prius Has Stalling Glitch, NHTSA Commences Investigation," Auto on Info, June 2005 and "Toyota Recalls a Batch of Priuses in the U.S., Japan, and Here and There, a Batch of Scion tCs in the U.S., and a Bunch of Various Models in Southeast Asia and Australia," Auto on Info, November 2005.)
The reliability of the North American made Toyota Avalon has improved in recent years (a 2000-2001 RPA of .94 vs. a 1995-1999 RPA of .82); however, for model year 2006 Consumer Reports accords the Avalon a predicted short-term reliability of only average, something of a disaster for a Toyota. Only time will tell what its 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.
U.S. sales of the Lexus LX 470 through November 2005 exceeded those of the Toyota Land Cruiser, a more Spartan cousin, by 72.7%.
The likelihood of finding a 2006 made-in-Japan Toyota Corolla or Camry on a U.S. dealer lot is small; Toyota Motor Corporation reports that 96.9% of the Corollas sold in the U.S. so far in 2005 have been made in North America and 93.7% of the Camrys sold in the U.S. so far in 2005 have been 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. U.S. consumers seeking a made-in-Japan 2006 Lexus RX 330 are more fortunate; only about 2/3 of the RX 330s sold in the U.S. in 2005 were made in North America. All of the Toyota Avalons sold in the U.S. were 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 November 2005 U.S. auto sales rise 6%. Honda Motor Company's models showing the largest sales gains in November 2005 over November 2004 were - excluding the Honda Insight and Acura NSX, which have nominal sales - the gas-propelled Honda Civic (1997-2001 RPA of .91 and with a CR 2005 predicted short-term reliability in the highest category and a CR 2005 reliability Quick Pick and with the Honda Civic EX also being a CR 2005 fuel economy Quick Pick and a CR 2005 overall Quick Pick), up 19.2% to 21,612, 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 and a CR 2004 and 2005 Top Pick, and with the Pilot EX-L edition a CR 2005 overall Quick Pick), up 9.8% to 12,040, the Acura RSX (a CR 2005 reliability Quick Pick with a CR 2006 predicted short-term reliability in the second-highest category and with the RSX Type-S a CR 2005 fuel economy Quick Pick), up 9.1% to 1,521, the hybrid Honda Civic (CR 2005 reliability, owner satisfaction, fuel economy, and overall Quick Picks), up 7.1% to 2,083, and the Honda Element (with a CR 2006 predicted short-term reliability in the highest category), up 7.0% to 3,940.
Honda's Hottest Sellers in November 2005 2006 Honda Civic coupe and sedan 2006 Honda Pilot 2006 Acura RSX 2006 Honda Civic Hybrid 2006 Honda Element The above links are to onsite review pages for the 2005 models. Through November 2005, the Honda Odyssey minivan outsold the Toyota Sienna by 11,782 vehicles, or 8.1%, and the Honda CR-V sport utility vehicle outsold the Toyota RAV4 by 71,017 vehicles, or 108.7%. Both of the latter two have solid reliability histories; the Honda CR-V has a 1997-2001 RPA of .99 and the Toyota RAV4 has a 1997-2001 RPA of .93. However, 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.
Nissan Motor Company, with a 1997-2001 Reliability Percentrank average of .81, saw its U.S. auto sales fall by 8% in November 2005. Its U.S. car sales fell 5% and its U.S. truck sales fell 10%. Nissan Motor Company's models showing the largest gains in U.S. sales in November 2005 over November 2004 were the Infiniti M45 sedan (too recent for a 1997-2001 RPA, but with a CR 2006 predicted short-term reliability in the highest category), up 1446.9% to 1,982, the Nissan Xterra sport utility vehicle (1997-2001 RPA of .74), up 36.2% to 7,231, and the Nissan Sentra sedan (1997-2001 RPA of only .66, but with a CR 2006 predicted short-term reliability in the second-highest category), up 9.3% to 8,450.
Nissan's Hottest Sellers in November 2005 2006 Infiniti M45 2006 Nissan Xterra 2006 Nissan Sentra Subaru, with a 1997-2001 RPA of .82, saw its November 2005 U.S. auto sales rise 1%. Its car sales rose 7% but its truck sales fell 12%.
Mazda, with a 1997-2001 RPA of .70, saw its November 2005 U.S. auto sales fall 3%. Its car sales rose 6%, but its truck sales fell 26%.
In summary, the November 2005 sales by the auto manufacturers of quality products were solid; sales by Toyota and Honda were very good, both with increases of 6%.
At the other end of the quality spectrum, General Motors Corporation, with a 1997-2001 RPA of .30, saw its November sales plunge 11%.
Chrysler, with a 1997-2001 RPA of .40, saw its November 2005 U.S. auto sales fall 7%.
Ford, with a 1997-2001 RPA of .51, saw its November 2005 U.S. auto sales plunge 18%.
Even with hefty incentives, the Big Three faired poorly in November. However, more optimistically, even if the "Big Three bottom falls out" in the next two years, the U.S. market shares for GM, Ford, and Chrysler should not fall below 16%, 11%, and 9%, respectively, if for no other reason than it seems unlikely that good use of the little information that trickles into the bottom third or so of the U.S. population can be made.
Market shares through November were unchanged from those through October.
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, 2004, and Year-to-Date 2005, Estimates of Natural Market Shares, Distances to Natural Market Shares, and Distances Traversed from 1993
Manu- facturer 1993
1995 1997 1999 2001 2003 2004 YTD 2005 Estimate of Natural Market Share* Remaining Distance to Natural Market Share Distance Traversed from 1993 Toyota .07 .07 .08 .09 .10 .11 .12 .13 .23 .10 .06 Honda .05 .05 .06 .06 .07 .08 .08 .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 .02 .03 .05 .02 N/A GM .34 .33 .31 .29 .28 .28 .27 .26 .04 -.22 -.08 Ford .26 .26 .25 .24 .23 .19 .18 .18 .07 -.11 -.08 Chrysler .15 .15 .15 .16 .16 .13 .13 .14 .00 -.14 -.01 *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 took quite a battering; Hyundai's November sales rose 8% versus GM's drop of 11%.
U.S. November 2005 auto sales by Saab, a European subsidiary of General Motors with a 1997-2001 RPA of .43, fell 18%, and sales by Volvo, a European subsidiary of Ford with a 1997-2001 RPA of .29, fell 31%.
In the niche markets, Porsche November U.S. auto sales rose 6%, BMW sales rose 7%, and Mercedes-Benz sales fell 7%. Old line European nobility had not a bad month.
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 November 2005 over November 2004 are daily selling rate percentage changes and consequently take account of the fact that there were 25 selling days in November 2005 and 24 in November 2004.
Source for November 2005 auto manufacturer sales data: "U.S. Auto Sales Table for November 2005," the Associated Press, December 1, 2005, available at Yahoo! News
Source for detailed Toyota sales data: "Toyota Reports November Sales," December 1, 2005, at http://pressroom.toyota.com/Releases/View?id=TYT2005120168110
Source for Nissan sales data: "Nissan North America Announces November Sales," December 1, 2005, available at http://www.nissannews.com
Source for Honda sales data: "American Honda Reports Best-Ever November Sales," December 1, 2005, http://www.hondanews.com/CatID1000?mid=2005120148639&mime=asc
Source for Reliability Percentranks and Percentrank averages: Auto on Info's Table I-MVRP
Source for July 2005's Hottest Ten: "Hot Off the Lot," Wall Street Journal, August 11, 2005, p. D3 (See "By WSJ's Lot Stay Time, Toyota Has 8 of Hottest 12," Auto on Info, August 2005.)
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 Brands' Reliability Uneven," Christine Tierney, Detroit News, October 27, 2005, at http://www.detnews.com/2005/autosinsider/0510/27/C01-362825.htm and "Asian Vehicles Rank Low in Survey," Sharon Silke Carty, USA Today at Detroit Free Press, October 27, 2005, at http://www.freep.com/money/autonews/reliable27e_20051027.htm (The list in the Detroit Free Press omits the Toyota Echo in its list of small car recipients of CR's 2006 "Most Reliable" rating. To see a breakdown by manufacturer and line, go to "Toyota, Honda, Subaru, and Nissan's Infiniti Overwhelm CR's 2006 Most Reliable List," Auto on Info, November 2005.)
Source for Consumer Reports' 2006 predicted short-term reliability when expressed as "highest," "second-highest," "average," "second-lowest," or "lowest": "Reviews of the 2006 Models," Consumer Reports Best Buys for 2006 Buying Guide, pp. 154-176
1 "Toyota Announces 50-Percent Boost in 2005 Prius Hybrid Production To Meet Unprecedented Demand," at http://pressroom.toyota.com/photo_library/display_print.html?id=20040803b
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