Toyota aims to maintain its lead in the midsize segment but faces tough competition.
In the automotive answer to a sumo title match, two Japanese automotive heavyweights are about to square off, Nissan declaring a throwdown against long-time rival Toyota for dominance in the crucial midsize car market.
The smaller of the two makers is betting its newly redesigned Altima can topple the long-time segment leader, the Toyota Camry. But its rival is clearly not ready to cede dominance anytime soon, a senior Toyota official told TheDetroitBureau.com.
“It simply won’t happen,” said Toyota brand boss Bob Carter when asked if Altima has a chance of winning the perennial midsize grudge match. At the end of 2012, he declared during an interview, “Camry will be the best-selling car in America for the 12th consecutive year.”
Not if Nissan has its say. “We are expecting to compete at the top level, and we are going to take a shot at being number one in the segment,” said Nissan CEO Carlos Ghosn, during the debut of the new Altima at the New York Auto Show in April.
The first Nissan Altima rolls off the automaker's Canton, Miss. assembly line.
Nissan is ramping up production capacity at two U.S. plants to meet projected demand, with a third shift scheduled for the big facility in Smyrna, Tennessee. And it is buoyed by the fact that even in its final months on the market sales of the outgoing Altima continued to build. The sedan, in fact, has overtaken the traditional midsize runner-up, the Honda Accord.
But Toyota’s Carter insisted that’s still not enough to trip up Camry, which was itself redesigned for the 2012 model-year and which has been benefitting from one of the most expansive marketing campaigns in the Japanese maker’s history.
The sales numbers are clearly impressive, Camry generating more than 40,000 sales a month from January 1 through the end of May – with June on track to generate similar numbers. Toyota currently holds a roughly 40,000-unit lead over the Nissan Altima.
Analysts like Joe Phillippi, of AutoTrends Consulting, caution that Toyota has gone to great lengths to prop up the Camry, especially after a slow launch – hurt by production shortages in the wake of the March 2012 Japanese earthquake and tsunami – and less-than-stellar reviews for the new sedan.
For one thing, as much as 15% of Camry sales has been generated by fleet buyers, traditionally a low-profit segment makers have used as a dumping ground for excess capacity. Toyota has routinely scoffed at slower-selling rivals who’ve depended on fleet to prop up their numbers.
Carter didn’t deny the unusual dependence upon fleet this year, though he contends Toyota was simply making up for lost commercial market sales. In 2012, with inventories low as a result of production cuts, the maker slashed fleet sales. It made up for that between January and May.
The real test will come when June and subsequent months’ sales are released. Carter contended Toyota will now cut back to more traditional Camry fleet patterns in the 7 to 9% range.
Meanwhile, he contradicted those who argue that Toyota has been ramping up incentives to buoy Camry demand. The primary deal on the sedan comes in the form of 2.9% financing, he pointed out. How much of a deal-maker that is can be debated.
One way Camry has clearly succeeded, the executive said, is in driving down the average age of its buyers – a target for most makers but especially for Toyota, which has struggled to expand its reach beyond traditionally loyal Baby Boomers. The previous-generation Camry had an average buyer age of 60; that’s now down to 52, according to Carter, and for the sporty SE model it’s dipped to just 45.
The new Altima is aiming for a similar shift as Nissan targets Gen-X and Gen-Y motorists with a sedan that has put the emphasis on styling, performance, mileage and high-tech features.
“I’m more confident than I have been in years,” asserted Toyota’s Carter. But Nissan executives have been equally upbeat.
Meanwhile, analysts caution that the midsize competition won’t be a two-man battle anymore, as it long was between Toyota and Honda. The latter maker has its own new offering coming, a still-secret remake of the Accord.
(Honda dealer leaks details of 2013 Accord. Click Here for that story.)
Meanwhile, Ford is coming to market with an all-new version of its Ford Fusion that has already won raves for its dramatic styling. And among other wannabes, Chevrolet has already gained traction with the updated version of its Malibu. In an unusual strategy, Chevy launched just the high-mileage Malibu Eco model earlier this year, with the rest of the midsize line to follow for 2013.
If anything seems likely, the flood of new products are expected to punch more life into the segment than it has seen in decades, boosting overall sales for all the players, projected Toyota’s Carter.