Automotive reporters check out the Daytona pace car and hybrid versions… (Luis Sinco, Los Angeles…)
Can a revamped Camry help Toyota Motor Corp. get its groove back?
After dominating the U.S. sedan market for more than a decade, Toyota's top-selling Camry has been losing ground to resurgent domestic automakers and upstart Korean manufacturers.
Now, Toyota is fighting back with a lower-priced and fully redesigned 2012 Camry — unveiled with much fanfare Tuesday at Paramount Studios in Hollywood.
Toyota said it was dropping the base price of its core LE Camry model by $200 to $22,500. The more luxurious XLE model will fall by $2,000 to $24,725. They go on sale in October.
"This is an opportunity to show the world what Toyota is all about," Akio Toyoda, the automaker's president, said during a separate event at a Toyota factory in Georgetown, Ky., where the first of the new Camry's rolled off the assembly line.
The Camry has been a hallmark vehicle for Toyota. For nearly a decade, it has been the top-selling sedan in the United States. And it must do well in the marketplace if Toyota wants to reverse several years of declining market share because of a series of massive recalls, production disruptions caused by the Japanese earthquake and aging customers.
Toyoda acknowledged as much, saying, "This car has become a symbol of Toyota's success over the years."
"Toyota is very hungry to win back consumer confidence and regain the leadership in that car segment," said Michelle Krebs, an analyst with auto information company Edmunds.com. "They have to be aggressive in pricing because they are no longer in a position where they can charge a big premium."
The new model is the seventh iteration of the Camry and the first redesign of the sedan since the 2007 model year. IHS Automotive expects it to do well, forecasting that the new version will sell 350,000 to 380,000 vehicles during its first year.
The new Camry features a 2.5-liter, four-cylinder engine that produces 178 horsepower, a 5% increase from the current model. The fuel economy is rated at 28 miles per gallon combined city and highway driving, up from 26 mpg for the 2011 model. Toyota also will offer a six-cylinder version that's expected to make up around 15% of sales.
The new Camry hybrid is rated at 41 miles per gallon, giving it the best fuel economy of any mid-sized sedan on the market. Toyota has cut the price of the hybrid to $25,900, a $1,150 reduction.
Toyota said the new models will offer a sportier drive with tighter suspension and handling. The car also will include 10 air bags to protect the driver and passengers.
Although Toyota has taken an "aggressive" pricing stance, the company isn't about to set hearts fluttering with Camry's new styling. The 2012 model looks a lot like the car it replaces, Krebs said.
"It is very typical of Toyota to not go out on a limb when it comes to styling. Styling is not the reason why people buy the car," she said.
For Toyota to rebound from its sales slide, "it is extremely important for them to get this car right," said Rebecca Lindland, an analyst with IHS Automotive.
Sales of the company's flagship Toyota brand in the U.S. have fallen almost 6% this year through July, a period during which auto sales overall have climbed almost 11% from a year earlier, according to Autodata Corp. The brand's market share has fallen to 11.4% from 13.4%, the biggest drop of any major nameplate. And that follows a big dip in 2010.
The Camry's market share in the mid-size car segment so far this year is 13.8%. That's down from a share of 16.5% in 2010 and a peak within the last decade of 18.8% in 2009, according to Edmunds.com.
Until recently, Toyota and Honda, the two biggest Japanese brands in America, were considered the default choices for sedan buyers. But that's changed as U.S. automakers restructured their businesses and put a renewed emphasis on designing fuel-efficient passenger cars.
General Motors' Chevrolet Cruze now outsells Toyota's Corolla and Honda's Civic in the compact car segment, and the Ford Fusion sedan cracked the top 10 list of vehicle sales last year. At the same time, Korean manufacturers Hyundai and Kia unveiled new versions of their respective Sonata and Optima mid-sized sedans that are selling briskly. The Nissan Altima also is gaining share, and has narrowed its sales gap with the Camry.
One reason brands other than Toyota and Honda are gaining ground is the willingness of younger buyers to consider manufacturers that their baby boomer parents avoided.
"We are really seeing the market starting to change," Lindland said. "Consumers are really looking around, and they aren't just going in and buying a white Toyota Camry with a beige interior."