April 3 (Bloomberg) -- Toyota Motor Corp.’s Camry ceded its rank as America’s best-selling mid-size car for the first time in 17 months, slipping behind Nissan Motor Co.’s Altima and losing share to Honda Motor Co. and Ford Motor Co. models.
Camry sales in the U.S. declined 12 percent to 37,663 units last month, or 100 fewer than the Altima, whose deliveries declined 8 percent, according to company figures released yesterday. The two mid-size sedans lost market share to Honda’s Accord and Ford’s Fusion, which saw sales climb 36 percent and 6 percent, respectively.
The monthly results are a blow to Toyota, whose flagship sedan has been the country’s best seller every year since 2002 as U.S. automakers field their most competitive cars in decades. At stake is supremacy in the biggest segment of the U.S. auto market at a time when demand is pushing light-vehicle sales to their highest levels in more than five years.
“Toyota may not have realized just how competitive the segment would get,” Alec Gutierrez, industry analyst for auto-market researcher Kelley Blue Book, said in a telephone interview. “This is the best-selling segment in the U.S., and the surge will continue for the rest of the year.”
Demand for mid-size cars, along with pickup trucks from U.S.-based Ford, General Motors Co. and Chrysler Group LLC, drove up U.S. auto sales 3.4 percent to the highest since August 2007.
Toyota’s American depositary receipts rose 0.9 percent to $100.88 at the close in New York. Honda’s ADRs gained 1.6 percent to $37.20.
Given the size of the segment, “maintaining a leadership position in the space is very difficult if not impossible,” said Kevin Tynan, an analyst for Bloomberg Industries research. “As a high volume segment leader saturates the market, it is natural for buyers to look elsewhere, regardless of how good the vehicle value, quality, content is for the ownership experience.”
The willingness of drivers to consider Camry alternatives is benefiting all automakers, said Al Castignetti, Nissan’s vice president of U.S. sales.
“Long gone are the days when you saw Camry as the perennial winner by a big margin,” Castignetti said in a phone interview yesterday. “We’ll all fight for that pie, and it will be more of an equal pie now that we’ll all share in.”
While Altima topped Camry’s U.S. sales last month, the Nissan model ranks only third in the segment this year. For the first quarter, Toyota’s Camry is more than 12,000 units ahead of its nearest competitor, Honda’s restyled Accord. The Fusion, redesigned in late 2012, ranks fourth this year.
“We have Camry right on plan, and we feel really good about our position,” Bob Carter, Toyota’s senior vice president of U.S. sales, said in a conference call yesterday. “We’re absolutely confident we’ll continue to be the number one vehicle in the market in 2013.”
Toyota, the world’s largest automaker, saw its total deliveries of Toyota, Lexus and Scion models increase 1 percent in March, missing the 1.6 percent increase that was the average estimate of analysts surveyed by Bloomberg News.
Prius hybrid sales dropped 23 percent, Toyota said. The decline resulted from a combination of less aggressive marketing last month and a drop in fuel prices, Carter said.
The Prius dip, like that of Camry, is a result of the hybrid’s past success, Tynan said.
“It’s been the standard in the hybrid segment for so long, the introduction of similar technology into basically every competing model gives consumers choice and the freedom to present their taste and individuality,” he said.
“Toyota ends up in a tough spot since the volume is still meaningful yet there is even greater risk if you make the redesigns revolutionary and lose buyers instead of evolutionary and bore them.”
Jim Lentz, Toyota’s North American chief executive officer, said last week in New York the company aims to sell at least 250,000 Prius models this year, a record for the line. Through March, Prius sales totaled 55,724, down 8.4 percent from a year ago.
Toyota will continue its current non-interest loan offers and discounted leases for Camry and other models for another month to sustain sales, Carter said.
Nissan, Japan’s second-biggest automaker, reported a 1 percent sales gain, beating the average estimate for a 2.1 percent decline. Deliveries of Nissan and Infiniti brand vehicles totaled 137,726, the most ever for the month of March, the company said.
Honda, Japan’s third-largest automaker, said it sold 136,038 Honda and Acura brand autos, up 7.1 percent. While that was the biggest increase among major automakers in the U.S., it trailed an expected 8.5 percent gain for the Tokyo-based company.
Unlike major competitors, Honda doesn’t have a program to sell its vehicles directly to rental or business fleet customers. On that basis, the company estimates it outsells rivals to the Accord, Civic, CR-V sport-utility vehicle and Odyssey minivan, John Mendel, Honda’s executive vice president, said.
“It’s particularly rewarding to see Accord and Civic winning new customers against a headwind of competitor incentives and value-reducing fleet sales,” Mendel said in a statement yesterday.
Honda’s incentives averaged $1,569 per vehicle last month, down 29 percent from a year earlier, and the lowest among the six biggest automakers in the U.S. by sales volume, according to Autodata Corp. By comparison, Toyota’s average spending fell 6.9 percent to $1,604, while Nissan’s declined 7.5 percent to $2,756, Woodcliff Lake, New Jersey-based Autodata said.
U.S.-based automakers increased incentives. Ford’s spending rose 5.5 percent to $2,944, and GM and Chrysler each spent more than $3,300 per vehicle, according to the Autodata report.
Volkswagen AG, based in Wolfsburg, Germany, posted a 5.8 percent gain in combined sales for its Volkswagen and Audi brands in March, trailing the 11 percent gain that was the average of four estimates.
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