Toyota is bringing out a redesigned Corolla next month with improved looks and performance intended to broaden its appeal. The world’s largest automaker also plans to keep prices steady on Camry as it defends the model’s bragging rights as the top-selling car in the U.S.
The company has been losing share this year in the U.S., posting the smallest sales gains among the six top automakers. The Honda Accord, Nissan Altima and Ford Fusion have gained ground on Camry, the top-selling car in the U.S. for 11 years, while the Honda (7267) Civic is outpacing Corolla among subcompacts.
“The standards for modern cars keep rising, which puts pressure on established models like the Corolla,” said Karl Brauer, an analyst for Kelley Blue Book, an automotive pricing and data company in Irvine, California. “Being safe, reliable and refined isn’t enough anymore.”
With Corolla, Toyota has produced a new look with knife-edge creases, a gaping, trapezoidal grille and a sport-sedan slant. The redesigned model was shown off at a lavish party in Santa Monica, California, in June. This week, Toyota is letting reviewers get a taste of the car’s ride and handling that Bill Fay, U.S. group vice president for the Toyota brand, said is now better than Corolla’s reputation.
“If we can add it in as one of those ‘wows,’ as one of those things people are not expecting in the car, then I think that’s only going to help us,” Fay said in an interview in San Diego Aug. 20 at the drive event. For Corolla buyers, performance is “not a top purchase consideration” such as price, quality, reliability and fuel economy, he said.
Corolla is the subject of a dispute between Toyota and Ford. The Dearborn, Michigan-based automaker says Focus is the world’s best-selling model by nameplate. Toyota, which sells the Corolla under different names in some markets, rejects that definition. The Toyota City, Japan-based company said it has sold more than 40 million Corollas over 47 years.
In the U.S., Honda’s Civic, after a rushed refreshing, was the top-selling compact in 2013’s first seven months with 191,120 deliveries to Corolla’s 183,435 and 151,549 for the Focus. Toyota plans to sell about 300,000 Corollas in the U.S. this year and 330,000 in 2014, with a full supply of the revamped model, Fay told reporters in San Diego.
Toyota engineers stiffened Corolla’s frame and reworked the model’s transmission and underpinnings to wring more responsiveness and handling out of the unchanged 132 horsepower of the main LE and sporty S grades.
“We developed the dynamic driving performance of the new Corolla with the European market in mind, whose drivers have a strong handling requirement,” Shinichi Yasui, Corolla’s chief engineer, told reporters Aug. 20.
Corolla’s fuel economy rises to 32 miles (51 kilometers) per gallon in combined city and highway driving for the LE version with Toyota’s new continuously variable transmission, up from 29 mpg for the current LE with a four-speed automatic transmission. That matches the combined-driving ratings of the Civic and Hyundai Motor Co.’s Elantra. A new LE ECO version gets 42 mpg on the highway and a combined 35 mpg, Toyota said.
With Camry, U.S. sales rose 16 percent last month to 34,780 only after Toyota offered incentives of $2,581 per Camry compared with $627 for each Accord, according to Edmunds.com.
“For incentives, we don’t think that our current level is necessarily high, but traditionally, we try not to be too dependent on them,” Nobuyori Kodaira, executive vice president at Toyota, said yesterday during a briefing in Tokyo. “I can’t really comment on our future plans, but our plan for now is to stick to that as much as possible.”
Ford, General Motors Co. (GM) and Chrysler Group LLC, with the strongest car lineups in decades, all gained market share in their home market during the first half for the first time in 20 years.
“It is true that rival carmakers have come out with very competitive models in the segment, and that competition in the U.S. mid-size sedan segment is becoming fiercer,” Kodaira said. “What we need to do is to come out with even more competitive models.”
Kodaira declined to say whether Toyota will accelerate a redesign for Camry.
“The Camry is a very important model for Toyota, and it must mean a lot for the model to maintain its market share and position as the best-selling mid-size sedan,” said Kentaro Hayashi, an analyst at Tachibana Securities Co. in Tokyo. “Unless Toyota’s policy to not add too much incentives is something that’s firmly secured, their incentives could still be expanded, in order for them to maintain that top spot.”
Toyota may add safety features to make the Camry more attractive, or bring forward a mid-cycle refresh, like Honda did with its 2012 Civic sedan when it didn’t receive the coveted recommended status from Consumer Reports, Hayashi said.
Toyota has said it expects to sell at least 400,000 of the model this year. Camry sales fell 0.6 percent to 242,406 this year through July. Toyota has forecast total U.S. vehicle sales this year of more than 2.25 million. That would be the automaker’s best year since 2007, when it sold 2.62 million vehicles.