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In the U.S. in January 2007, Consumer Trot to Quality Becomes a Gallop: Reliable Two Sales Set January Records as GM and Ford Sales Return to Friction-Free Free Fall
Auto on Info February 2007
In the U.S. in January 2007, Consumer Trot to Quality Becomes a Gallop: Reliable Two Sales Set January Records as GM and Ford Sales Return to Friction-Free Free Fall
By James B. Bleeker
Toyota Motor Corporation, with a 1998-2002 Reliability Percentrank average of .90, saw its U.S. auto sales rise by 5% in January 2007, over those of January 2006, to set a new January sales record. Its U.S. car sales rose 9%, and its U.S. light 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 January 2007, 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: January 2007 Toyota Sales, Daily-Selling-Rate Percentage Changes, and 1998-2002 Reliability Percentrank Averages, by Line, Type, and Model Manufacturer Division Type of Vehicle Model Sales Volume Percentage Change for January 2007 from January 2006 1998-2002 Reliability Percentrank Average Toyota Motor Corporation 175,850 5.1% .90 Scion Division 9,004 -19.2% N/A xA 1,758 -18.0% N/A xB 2,833 -29.1% N/A tC 4,413 -11.9% N/A Toyota Division 144,728 6.7% .90 Passenger Car 77,678 11.4% N/A Avalon 6,529 -9.8% .89 Camry1v,1r,1f,R6 31,4617 10.1% .889 Corolla1r,R6,2006A 25,519 -1.6% .91 Prius*^,1r,1s,R6 8,299 4.1% .861 Yaris 5,870 N/A N/A Light Truck 67,050 1.6% N/A RAV41,1r,R6 (SUV) 11,925 22.0% .94 Sienna*,1s,1f,2006A (minivan) 10,849 -11.5% .81 Highlander1v,1r,1s,R6,2006A (mid-size SUV) 10,3228 13.3% .991,10 FJ Cruiser (SUV) 4,948 N/A N/A 4Runner1v,1s,R6 (SUV) 7,330 -17.3% .9411 Land Cruiser1r,1s,R6 (large SUV) 234 -22.5% .92 Tundra1r,1s,R6 (pickup truck) 6,321 -35.8% .9412 Tacoma1f (pickup truck) 13,063 1.1% .9413 Lexus Division 22,118 8.0% .92 Passenger Car 13,574 18.7% N/A ES 3501 5,320 53.2% .962 LS 430/460*^,1r,1s,R6 3,006 142.5% .982 GS 300R6 1,368 -22.7% .962,3 GS 430 / 450h 1836 -37.0% .962,3 SC 430R6 (hardtop convertible) 302 -28.4% .851,2 IS 250 / 350 3,3954 -20.0% .911,2 Light Truck 8,544 -5.5% N/A RX 350*^,1,1s,2006A and 400hR6,2006A (SUV) 6,5445 1.5% .932 GX 4701s (SUV) 1,713 -15.5% N/A LX 470 (large SUV) 287 -49.4% .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 January sales breakdown of the IS series was unstated. 5The RX 350 had January sales of 5,299 and RX 400h - 1,245. 6The January sales breakdown of the GS 430 and the GS 450h was unstated. 7The non-hybrid Camry had January sales of 28,660 and the Camry hybrid - 2,801. 8The non-hybrid Highlander had January sales of 8,512 and the Highlander hybrid - 1,810. 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, and the Lexus IS300. 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. To view a table providing Toyota's models on Consumer Reports' list of 2007 models having the highest predicted short-term reliability, go to "By CR's Predicted Short-Term Reliability for Model Year 2007, Toyota and Honda Dominate Best and GM, Ford and DaimlerChrysler Dominate Worst, per Detroit News Table," Auto on Info, November 2006. The Toyota Motor Corporation models showing the largest sales gains in January 2007 over January 2006 were the Lexus LS 430 / 460, up 142.5% to 3,006, the Lexus ES 350, up 53.2% to 5,320, the Toyota RAV4 small sport-utility vehicle, up 22.0% to 11,925, the Toyota Highlander sport-utility vehicle, up 13.3% to 10,322, and the Toyota Camry, up 10.1% to 31,461.
Toyota's Hottest Sellers in January 2007 Lexus LS 430/460 Lexus ES 350 Toyota RAV4 Toyota Highlander Toyota Highlander Hybrid Toyota Camry Solara Toyota Camry XLE Toyota Camry hybrid The above photos are of the 2007 models and the above links are to onsite review pages of the 2006 models. The likelihood of finding a 2007 made-in-Japan Toyota Corolla, Toyota Camry, or Lexus RX350 on a U.S. dealer lot is not good; Toyota Motor Corporation reports that 89.2% of the Corollas sold in the U.S. in January 2007 were made in North America, 72.6% of the Camrys sold in the U.S. in January 2007 were made in North America, and 71.5% of the RX350s sold in the U.S. in January 2007 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, Toyota Camry, or Lexus RX350 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 looking for a made-in-Japan 2007 Toyota Avalon are without any hope, as all of the Toyota Avalons sold in the U.S. are made in North America. 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 January 2007 U.S. auto sales decline 2% (on a daily-selling-rate basis) to 100,790; however, on a monthly volume basis sales rose to set a new January sales record. Honda Motor Company's models showing the largest sales gains in January 2007 over January 2006 were the non-hybrid 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 12.7% to 25,466 and 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 48.1% to 14,390.
Honda's Hottest Sellers in January 2007 Honda Accord Honda CR-V The above photos are of the 2007 models and the above links are to onsite review pages of the 2006 models. In January 2007, the Honda Odyssey minivan outsold the Toyota Sienna by 316 vehicles, or 2.9%, and the Honda CR-V small sport-utility vehicle outsold the Toyota RAV4 by 2,465 vehicles, or 20.7%. Both of the latter two have solid reliability histories; the Honda CR-V has a 1998-2002 RPA of .97 and a CR 2007 predicted short-term reliability in the highest category and the Toyota RAV4 has a 1998-2002 RPA of .94 and a CR 2007 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 1999-2002 Reliability Percentrank average is only .70 (in contrast to its 1995-1998 RPA of .965 and in contrast to the Toyota Sienna's 1999-2002 Reliability Percentrank average of .825) and Consumer Reports accords its 2007 model year a predicted short-term reliability of only average (in contrast to Sienna's above average), something of a disaster for a Honda-engineered product. However, 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 1998-2002 RPA of .75, saw its January 2007 U.S. auto sales fall 6%.
Nissan Motor Company, with a 1998-2002 Reliability Percentrank average of .73, saw its January 2007 U.S. auto sales rise 5%. Its car sales rose 20%, but its light truck sales fell 12%.
Mazda Motor Corporation, with a 1998-2002 RPA of .65, saw its January 2007 U.S. auto sales rise 2%.
Overall, the January 2007 U.S. sales by the auto manufacturers of higher quality products were solid. Toyota and Honda set January sales records, and Nissan and Mazda sales rose 5% and 2%, respectively.
At the other end of the quality spectrum, General Motors Corporation, with a 1998-2002 RPA of .32, saw its January 2007 sales plunge 20% from those of January 2006. Its car sales plunged 26% and its light truck sales plunged 15%.
The following table provides a breakdown of the percentage changes in GM's auto sales for January 2007 by vehicle line.
General Motors' Auto Sales Changes for January 2007, by Vehicle Line Line Percentage Change for January 2007 from January 2006 Buick -32.8% Cadillac -10.5% Chevrolet -17.9% GMC -2.3% Hummer -26.7% Pontiac -38.5% Saturn -22.2% Chrysler Group of DaimlerChrysler, AG, with a 1998-2002 RPA of .40, saw its January 2007 U.S. auto sales fall 3%. David Healy, auto analyst for Burnham Financial Group, attributes Chrysler's relative success (it beats GM's 20% plunge and Ford's 23% plunge) to "heavy incentivizing."1 The Detroit News quotes Mr. Healy as saying, "They were extremely aggressive, particularly on older models like the Durango SUV and the RAM pickup truck."1
Ford Motor Company, with a 1998-2002 RPA of .48, saw its January 2007 U.S. auto sales plunge 23% from those of last January.
GM and Ford attributed a sizable portion of their sales declines to reduced rental fleet sales. This likely bares at least a modicum of truth, as both surely want to reduce rental fleet sales, and their resulting year-later used car sales, to match the dwindling consumer demand for their used vehicles, lest GM and Ford used vehicle prices go to zero. However, to the extent that rental fleet companies will replace GM and Ford vehicles with Toyota and Honda vehicles, more consumers will be exposed to the quality that is the hallmark of the Reliable Two, with the result that the consumer sprint to quality may be greatly accentuated two or three years from now. Consequently, GM and Ford may be averting a near-term disaster for a far greater disaster 2-to-3 years hence.
In any event, General Motors' and Ford's sales plunges in January 2007 cannot be sustained over a several year period without multiple recourses to Chapter 11 bankruptcy proceedings. Also, they raise the spectre of corporate extinction, something likely quite unpleasant to those who use the ownership of a GM vehicle as an index of diminutive cognitive function, as their convenient index would go kaputt.
The January 2007 U.S. market shares of the Reliable Two, the Big Three, Nissan, and Hyundai, as well as those for prior years and an estimate of natural market shares, appear in the following table.
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, 2006, and Year-to-Date 2007, Estimates of Natural Market Shares, Distances to Natural Market Shares, and Distances Traversed from 1993
Manu- facturer 1993
1995 1997 1999 2001 2003 2005 2006 YTD 2007 Estimate of Natural Market Share* Remaining Distance to Natural Market Share Distance Traversed from 1993 Toyota .07 .07 .08 .09 .10 .11 .13 .15 .16 .23 .07 .09 Honda .05 .05 .06 .06 .07 .08 .09 .09 .09 .14 .05 .04 Nissan N/A N/A N/A N/A .04 .05 .06 .06 .08 .16 .08 N/A Hyundai N/A N/A N/A N/A .02 .02 .03 .03 .03 .05 .02 N/A GM .34 .33 .31 .29 .28 .28 .26 .24 .22 .04 -.18 -.12 Ford .26 .26 .25 .24 .23 .19 .17 .16 .14
