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In
the U.S. in July 2006, Toyota Sales Surge to New Monthly Record and
Past Ford's; Legendary
Corolla Sales Soar Again; Honda Sales Jump Past Previous July Record; Big Three
Sales Remain In or Near Friction-Free Free Fall, But GM's Prospect of Multiple
Bankruptcy Filings Dims Again
Auto on Info August 2006
In the U.S. in July 2006, Toyota Sales Surge to New Monthly Record and Past Ford's; Legendary Corolla Sales Soar Again; Honda Sales Jump Past Previous July Record; Big Three Sales Remain In or Near Friction-Free Free Fall, But GM's Prospect of Multiple Bankruptcy Filings Dims Again
By James B. Bleeker
Toyota Motor Corporation, with a 1997-2001 Reliability Percentrank average of .90, saw its U.S. auto sales rise by 16% in July 2006, over those of July 2005, to set a new monthly sales record (a new record for all previous months of the current and prior years). Its U.S. car sales soared 25%, and its U.S. truck - SUV, minivan, and pickup - sales rose 5%. Year to date, Toyota's U.S. cars sales are up 12% and its truck sales are up 8%.
In July 2006, U.S. sales by Toyota Motor Corporation (241,826 vehicles) exceeded those by Ford Motor Company (239,989 vehicles including sales of European lines, 224,130 vehicles excluding sales of European lines) for the first time; it was July 2004 when Toyota's U.S. sales exceeded those of the Chrysler Group for the second time (see In the U.S. in July 2004, Toyota and Nissan Sales Soar, General Motors and Ford Sales Drop, Ford's Market Share Falls to .18, and Once Again Toyota Displaces Chrysler as Number 3, August 2004, Auto on Info).
The following table provides detailed information regarding Toyota Motor Corporation's U.S. sales in the month of July 2006, together with 1997-2001 model, line, and manufacturer Reliability Percentrank averages. Those models that were among December 2005'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: July 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 July 2006 from July 2005 1997-2001 Reliability Percentrank Average Toyota Motor Corporation 241,826 16.2% .90 Scion Division 18,408 25.2% N/A xA 2,962 21.9% N/A xB 6,666 43.5% N/A tC 8,780 15.2% N/A Toyota Division 196,459 17.0% .90 Passenger Car 111,701 24.9% N/A Avalon 6,757 -25.5% .86 Camry1v,1r,1f,R6 41,8927 1.3% .90 Corolla1r,R6,2006A 41,800 42.3% .93 Prius*^,1r,1s,R6 11,114 19.3% .851 Yari 10,137 N/A N/A Light Truck 84,758 8.1% N/A RAV41,1r (SUV) 14,755 107.5% .93 Sienna*,1s,1f,2006A (minivan) 13,834 -21.4% .80 Highlander1v,1r,1s,R6,2006A (mid-size SUV) 11,9998 -12.3% .981 FJ Cruiser (SUV) 6,309 N/A N/A 4Runner1v,1s,R6 (SUV) 9,346 4.4% .96 Land Cruiser1r,1s,R6 (large SUV) 238 -45.1% .91 Tundra1r,1s,R6 (pickup truck) 10,285 -4.1% .921 Tacoma1f (pickup truck) 15,339 -2.8% .94 Lexus Division 26,959 5.6% .92 Passenger Car 16,157 22.1% N/A ES 3501 7,803 19.2% .952 LS 430*^,1r,1s,R6 971 -57.0% .972 GS 300R6 1,776 -33.7% .933 GS 430 / 450h 2996 -47.2% .932,3 SC 430R6 (hardtop convertible) 460 -32.3% N/A IS 250 / 350 4,8484 877.1% .901,2 Light Truck 10,802 -12.3% N/A RX 350*^,1,1s,2006A and 400hR6,2006A (SUV) 8,4925 -2.6% .922 GX 4701s (SUV) 1,969 -28.1% N/A LX 470 (large SUV) 341 -60.3% .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 July sales of 3,352 and IS 350 - 1,496. 5The RX 350 had July sales of 7,272 and RX 400h - 1,220. 6The GS 430 had July sales of 142 and GS 450h - 157. 7The Camry hybrid had July sales of 5,023. 8The Highlander hybrid had July sales of 2,784. Bold blue script indicates that the model was in December 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. 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 July 2006 over July 2005 were the Lexus IS 250 / 350, up 877.1% to 4,848, the Toyota RAV4 small sport utility vehicle, up 107.5% to 14,755, the Scion xB, up 43.5% to 6,666, the legendary Toyota Corolla, up 42.3% to 41,800, the Scion xA, up 21.9% to 2,962, the Toyota Prius, up 19.3% to 11,114, the Lexus ES 350, up 19.2% to 7,830, and the Scion tC, up 15.2% to 8,780.
Toyota's Hottest Sellers in July 2006 2006 Lexus IS 350 2006 Toyota RAV4 2006 Scion xB (No Icon Available) 2006 Toyota Corolla 2006 Scion xA 2006 Toyota Prius 2006 Lexus ES 350 2006 Scion tC (No Icon Available) The above links are to onsite review pages for the 2006 models. Toyota's Scion line, up 25.2% 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 Corolla, up 42.3% in July, 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 July 2006 exceeded those of the Toyota Land Cruiser, a more Spartan cousin, by 72.3%.
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 85.6% of the Corollas sold in the U.S. through July 2006 were made in North America and 84.1% of the Camrys sold in the U.S. through July 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 July 2006 U.S. auto sales rise 10% to 151,804 to set a new July sales record. Its Honda division set a seventh consecutive new monthly record. Its U.S. car sales rose 10% and its U.S. truck sales rose 11%. Honda Motor Company's models showing the largest sales gains in July 2006 over July 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 37.6% to 19,490, the Honda Civic Hybrid (a CR 2006 Top Pick, a CR 2006 All-Around-Competence-and-Safety Quick Pick, with a CR 2006 predicted short-term reliability in the highest category, a CR 2006 predicted owner satisfaction in the highest category, a CR 2006 accident avoidance rating in the second-highest category, and a CR 2006 crash protection rating in the highest category, also CR 2005 reliability, owner satisfaction, fuel economy, and overall Quick Picks), up 19.4% to 2,673, the Honda Ridgeline pickup truck (a CR 2006 Top Pick, a CR 2006 All-Around-Use Pickup-Truck Quick Pick, with a CR 2006 predicted short-term reliability in the highest category and a CR 2006 predicted owner satisfaction in the highest category and with perfect scores on NHTSA's crashworthiness tests), up 15.5% to 4,345, 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 10.7% to 18,322, and Honda Accord (a CR 2006 Top Pick, with the EX 4-cylinder and 6-cylinder editions All-Around Quick Picks, and with quite a number of additional distinctions), up 9.5% to 38,043.
Honda's Hottest Sellers in July 2006 2006 Honda Pilot 2006 Honda Civic Hybrid 2006 Honda Ridgeline 2006 Honda Odyssey 2006 Honda Accord The above links are to onsite review pages for the 2006 models. It should also be noted that Honda's new 4-door hatchback, the Fit, continued to be well received, with July sales totaling 3,135.
Through July 2006, the Honda Odyssey minivan outsold the Toyota Sienna by 12,196 vehicles, or 12.9%, and the Toyota RAV4 sport utility vehicle outsold the Honda CR-V by 2,252 vehicles, or 2.6%. 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 July 2006 U.S. auto sales rise 10%. Its car sales rose 19%, but its truck sales fell 4%.
Nissan Motor Company, with a 1997-2001 Reliability Percentrank average of .81, saw its U.S. auto sales fall 16% in July 2006. Its U.S. car sales fell 11% and its U.S. truck sales fell 22%.
Mazda Motor Corporation, with a 1997-2001 RPA of .70, saw its July 2006 U.S. auto sales rise 9%. Its car sales rose a very small fraction of 1%, but its truck sales rose 34%.
In summary, the July 2006 sales by the auto manufacturers of quality products were solid. U.S. sales by Toyota rose 16%, those by Honda and Subaru rose 10%, and those by Mazda rose 9%.
At the other end of the quality spectrum, General Motors Corporation, with a 1997-2001 RPA of .30, saw its July 2006 sales plunge 19%; however, its U.S. year-to-date market share went up a notch, as Chrysler Group and Ford Motor sales plunged even deeper. This leaves General Motors with a year-to-date U.S. market share loss of only one notch, that is, one percentage point, from its final 2005 U.S. market share. An annual market share loss of only one percentage point is almost certainly sustainable indefinitely, or for at least a quarter of a century, without a U.S. bankruptcy filing. And should GM market share loss rise to two percentage points by the end of the year and continue at an annual loss of two percentage points for the next half-decade, the prospect of multiple bankruptcy filings seems remote.
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?") 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 to leave access unchanged and seek quickly to exploit the immediate defensive response, 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 July 2006 U.S. auto sales fall 35%.
Ford Motor Company, with a 1997-2001 RPA of .51, saw its July 2006 U.S. auto sales fall a more modest 33%.
The rotation by Big Three consumers, in their endless quest for a better Big Three product, appears to presently favor GM (with a sales plunge of 19%) at the expense of Chrysler and Ford (with respective sales plunges of 35% and 33%).
General Motors' year-to-date U.S. auto market share rose 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 .25 .04 -.21 -.09 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
