Sonata, Camry sales battle rages

Toyota’s earnings hang in balance

July 15, 2011|By Makiko Kitamura and Masatsugu Horie, Bloomberg News

TOKYO - Toyota Motor Corp., to make its earnings target this year, needs the new Camry to wrest back market share from Hyundai Motor Co.’s Sonata sedan.

The Camry, the best-selling car in the United States, has lost ground to the Sonata, with Seoul-based Hyundai raising its US output and surpassing the Camry in May for the first time.

“Sonata became a very honorable contender in the market,’’ said Yoshimi Inaba, Toyota’s North American chairman, in an interview this week. “We do have good respect for the model, and the sales figures show it’s increasing quite a bit.’’

US sales of Camry last year dropped 31 percent to 327,804 compared with deliveries in 2007, Toyota’s best-ever year, while Honda Motor Corp.’s Accord sales also dropped 28 percent to 282,530 in the period, as both models approached the end of their product cycles. Sales of the Sonata, revamped in January 2010, surged 35 percent to 196,623.

The 2011 Sonata’s overall design quality is rated “among the best’’ by J.D. Power & Associates and earned a “Top Safety Pick’’ award from the Insurance Institute for Highway Safety.

Until a few years ago, Toyota’s Camry and Honda’s Accord “defined’’ the midsize segment in the nation for at least a decade, said Jeremy Anwyl, chief executive of auto researcher Edmunds.com in Santa Monica, Calif. “But Hyundai has really stepped up their game, and Toyota’s been paying attention.’’

The next version of the Camry will have a more contemporary design and improved performance and handling, president Akio Toyoda told US dealers on June 29 in Las Vegas. The new model will go on sale later this year.

Toyota’s current Camry, last refreshed in March 2006, gets up to 32 miles per gallon in highway driving in the United States, compared with the Sonata’s 35 mpg and Honda’s 34 mpg. With Hyundai’s improvements in design and fuel efficiency, sales of the Sonata have jumped 29 percent to 115,014 units this year through June, while the Camry has dropped 4.4 percent to 147,469 in the United States. Restricted production after the March 11 earthquake in Japan has also contributed to the decline.

Hyundai didn’t have to slow production after the quake as its Japan-based suppliers’ plants are not located in the affected areas, according to the company. As a result, Sonata outsold Camry in May for the first time, according to Edmunds.com.

While both the Sonata and Camry sold in the United States are built locally, the weak Korean currency relative to the dollar benefits Hyundai when it repatriates profit. The yen, on the other hand, has hurt Toyota by gaining about 10 percent during the past year. On July 13, the Japanese currency climbed to as high as 78.50 yen per dollar, the strongest since March 17.

The 2011 Camry is currently priced from $20,195, compared with the Sonata’s $19,395.

Camry accounted for about a fifth of US sales at Toyota last year.

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