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the U.S. in May 2006, Reliable Two and Legendary Corolla Sales Soar Past
Previous Records; Big Three Sales Take a Step into Friction-Free Free Fall;
Accelerated Consumer Shift to Quality and Out of GM Products Puts Prospect of
Multiple Bankruptcy Filings on GM's Horizon
Auto on Info June 2006
In the U.S. in May 2006, Reliable Two and Legendary Corolla Sales Soar Past Previous Records; Big Three Sales Take a Step into Friction-Free Free Fall; Accelerated Consumer Shift to Quality and Out of GM Products Puts Prospect of Multiple Bankruptcy Filings on GM's Horizon
By James B. Bleeker
Toyota Motor Corporation, with a 1997-2001 Reliability Percentrank average of .90, saw its U.S. auto sales rise by 12% in May 2006, over those of May 2005, to set a new monthly sales record. Its U.S. car sales soared 20%, and its U.S. truck - SUV, minivan, and pickup - sales rose 2%. Year to date, Toyota's U.S. cars sales are up 8% and its truck sales are up 10%.
The following table provides detailed information regarding Toyota Motor Corporation's U.S. sales in the month of May 2006, together with 1997-2001 model, line, and manufacturer Reliability Percentrank averages. Those models that were among December 2005's Hottest Ten, per WSJ's lot-stay time, for all manufacturers, are in bold blue. That model that received CAA's most recent Pyramid Award for ownership satisfaction is italicized.
Table I: May 2006 Toyota Sales, Percentage Changes, and 1997-2001 Reliability Percentrank Averages, by Line, Type, and Model Manufacturer Division Type of Vehicle Model Sales Volume Percentage Change for May 2006 from May 2005 1997-2001 Reliability Percentrank Average Toyota Motor Corporation 235,708 12.3% .90 Scion Division 18,103 31.4% N/A xA 3,927 71.3% N/A xB 6,763 41.4% N/A tC 7,413 10.6% N/A Toyota Division 187,606 11.3% .90 Passenger Car 108,479 15.2% N/A Avalon 7,646 -19.9% .86 Camry1v,1r,1f,R6 43,112 3.6% .90 Corolla1r,R6,2006A 41,550 28.0% .93 Prius*^,1r,1s,R6 8,103 -17.8% .851 Yari 8,065 N/A N/A Light Truck 79,127 6.4% N/A RAV41,1r (SUV) 14,013 97.0% .93 Sienna*,1s,1f,2006A (minivan) 13,102 -15.1% .80 Highlander1v,1r,1s,R6,2006A (SUV) 10,806 -12.7% .981 FJ Cruiser (SUV) 6,670 N/A N/A 4Runner1v,1s,R6 (SUV) 8,888 -0.3% .96 Land Cruiser1r,1s,R6 (SUV) 257 -37.5% .91 Tundra1r,1s,R6 (pickup truck) 7,974 -27.5% .921 Tacoma1f (pickup truck) 14,842 -0.8% .94 Lexus Division 29,999 8.9% .92 Passenger Car 18,293 38.9% N/A ES 3501 9,554 52.2% .952 LS 430*^,1r,1s,R6 1,085 -53.7% .972 GS 300R6 1,940 -25.6% .933 GS 430 / 450h 516 -22.4% .932,3 SC 430R6 (hardtop convertible) 593 -28.1% N/A IS 250 / 350 4,605 928.1% .901,2 Light Truck 11,706 -18.6% N/A RX 350*^,1,1s,2006A and 400hR6,2006A (SUV) 9,334 -16.3% .922 GX 4701s (SUV) 1,901 -30.3% N/A LX 470 471 -7.5% .852 Note: Corolla sales total includes Matrix wagon. 1Based on data for 2 or fewer model years 2Includes data for preceding model number 3The GS 300 and the GS 430 have pooled reliability data and consequently a common Reliability Percentrank. Bold blue script indicates that the model was in December 2005's Hottest Ten, for all models of all manufacturers. Italicized script indicates that the model received CAA's most recent Pyramid Award for ownership satisfaction. Underscored script indicates that the model is a Consumer Reports 2004 Quick Pick. A gold asterisk (*)indicates that the model is a CR 2004 Top Pick. A gold caret (^)indicates that the model is a CR 2005 Top Pick. A gold one (1)indicates that the model is a CR 2005 overall Quick Pick, a Quick Pick with very good or excellent ratings in five categories - road performance, predicted reliability, safety (accident avoidance and crash protection), owner satisfaction, and fuel economy. A gold 1v (1v)indicates that a version of the model is a CR 2005 overall Quick Pick. A gold 1r (1r)indicates that the model is a CR 2005 reliability Quick Pick. A gold 1s (1s)indicates that the model is a CR 2005 owner satisfaction Quick Pick. A gold 1f (1f)indicates that the model is an IIHS 2005 Best Pick Frontal. A gold R6 (R6)indicates that the 2006 model has received a Consumer Reports predicted short-term reliability rating of "Most Reliable." Additional 2006 models by Toyota Motor Corporation that are on CR's Most Reliable list are the Toyota Echo, the Toyota Matrix wagon, the Lexus IS300, and the Toyota RAV4 small sport utility vehicle. A gold 2006A (2006A) indicates that the 2006 edition is a CR top-of-vehicle-category Quick Pick. In particular, the 2006 Toyota Corolla is a CR 2006 All-Around Competence and Safety Quick Pick, the 2006 Toyota V6 and Hybrid Highlander and the 2006 Lexus RX400h/RX350 are CR 2006 Comfort, Versatility, and Snow Traction Quick Picks, and the 2006 Toyota Sienna is a CR 2006 Quick Pick. The Toyota Motor Corporation models showing the largest sales gains in May 2006 over May 2005 were the Lexus IS 250 / 350, up 928.1% to 4,605, the Toyota RAV4 small sport utility vehicle, up 97.0% to 14,013, the Scion xA, up 71.3% to 3,927, the Lexus ES 350, up 52.2% to 9,554, the Scion xB, up 41.4% to 6,763, the legendary Toyota Corolla, up 28.0% to 41,550, and the Scion tC, up 10.6% to 7,413.
Toyota's Hottest Sellers in May 2006 2006 Lexus IS 350 2006 Toyota RAV4 2006 Scion xA (No Icon Available) 2006 Lexus ES 350 2006 Scion xB 2006 Toyota Corolla (No Icon Available) 2006 Scion tC The above links are to onsite review pages for the 2006 models. Toyota's Scion line, up 31.4% for the month, is a new line. It is intended to meet the tastes and needs of young adults; however, it has, as well, proven popular with Baby Boomers - older folks who are generally young at heart.
The Toyota Corolla, up 28.0% in May to set a new monthly sales record, is an internationally renowned 40-year legend of reliability, durability, and pleasing performance and appearance. As a buyer from Africa at Dubai's mid-eastern auto mart Ducamz put it: Everyone wants one. Indeed, life may not be complete without having owned a Corolla, and life may be appreciably less interesting without having owned the same one for at least 20 years and 400,000 miles.
U.S. sales of the Lexus LX 470 through May 2006 exceeded those of the Toyota Land Cruiser, a more Spartan cousin, by 76.3%.
The likelihood of finding a 2006 made-in-Japan Toyota Corolla or Camry on a U.S. dealer lot is small; Toyota Motor Corporation reports that 82.9% of the Corollas sold in the U.S. through May 2006 were made in North America and 85.2% of the Camrys sold in the U.S. through May 2006 were made in North America. If made-in-Japan is an uncompromisable criterion, most likely the U.S. consumer will have to buy used, if a Toyota Corolla or Toyota Camry is his/her desire. (However, the consumer may try telling the dealership, "Look for it. If you can't find it, there's no sale.") U.S. consumers seeking a made-in-Japan 2006 Lexus RX 350 are more fortunate, as it appears from the sales numbers that North American production of this most recent model has not yet commenced. U.S. consumers looking for a made-in-Japan 2006 Toyota Avalon are without any hope, as all of the Toyota Avalons sold in the U.S. are made in North America; this may account for their modest predicted short-term reliability.
Honda Motor Company, with a 1997-2001 RPA of .84, saw its May 2006 U.S. auto sales rise 11% to 141,810 to set a new May sales record for its Honda division. Its U.S. car sales rose 16% and its U.S. truck sales rose 5%. Honda Motor Company's models showing the largest sales gains in May 2006 over May 2005 were - excluding the Honda Insight and Acura NSX, which have nominal sales - the Honda Civic Hybrid (a CR 2006 Top Pick, a CR 2006 All-Around-Competence-and-Safety Quick Pick, with a CR 2006 predicted short-term reliability in the highest category, a CR 2006 predicted owner satisfaction in the highest category, a CR 2006 accident avoidance rating in the second-highest category, and a CR 2006 crash protection rating in the highest category, also CR 2005 reliability, owner satisfaction, fuel economy, and overall Quick Picks), up 46.4% to 2,890, the Honda Ridgeline pickup truck (a CR 2006 Top Pick, a CR 2006 All-Around-Use Pickup-Truck Quick Pick, with a CR 2006 predicted short-term reliability in the highest category and a CR 2006 predicted owner satisfaction in the highest category and with perfect scores on NHTSA's crashworthiness tests), up 35.5% to 4,655, the Honda S2000 sports car (a CR 2006 Fun-for-Two Convertible Quick Pick, with a CR 2006 predicted short-term reliability in the highest category, a CR 2006 predicted owner satisfaction in the highest category, and a CR 2006 accident avoidance rating in the highest category), up 25.1% to 908, the Honda Pilot midsized sport utility vehicle (a runner-up to CR's 2006 Top Pick, a CR 2006 Comfort-Versatility-and-Snow-Traction SUV Quick Pick, with a CR 2006 predicted short-term reliability in the second-highest category and with a CR 2006 predicted owner satisfaction in the highest category, also a CR 2005 owner satisfaction Quick Pick, a CR 2004 and 2005 Top Pick, with a CR 2005 predicted short-term reliability in the second-highest category and with the Pilot EX-L edition a CR 2005 overall Quick Pick), up 22.1% to 12,856, the gas-propelled Honda Accord (a CR 2006 Top Pick, with the EX 4-cylinder and 6-cylinder editions All-Around Quick Picks, and with quite a number of additional distinctions), up 19.1% to 36,447, and the gas-propelled Honda Civic (a CR 2006 Top Pick and with quite a number of additional distinctions), up 9.6% to 26,116.
Honda's Hottest Sellers in May 2006 2006 Honda Civic Hybrid 2006 Honda Ridgeline 2006 Honda S2000 2006 Honda Pilot 2006 Honda Accord 2006 Honda Civic coupe and sedan The above links are to onsite review pages for the 2006 models. It should also be noted that Honda's new 4-door hatchback, the Fit, was well received, with May sales totaling 5,248.
Through May 2006, the Honda Odyssey minivan outsold the Toyota Sienna by 5,537 vehicles, or 8.2%, and the Toyota RAV4 sport utility vehicle outsold the Honda CR-V by 2,151 vehicles, or 3.6%. Both of the latter two have solid reliability histories; the Honda CR-V has a 1997-2001 RPA of .99 and a CR 2006 predicted short-term reliability in the highest category and the Toyota RAV4 has a 1997-2001 RPA of .93 and a CR 2006 predicted short-term reliability in the highest category. With regard to the reliability of the minivans, the Honda Odyssey has not fared well of late. Its 1999-2001 Reliability Percentrank average is only .70 (in contrast to its 1995-1998 RPA of .975) and Consumer Reports accords its 2006 model year a predicted short-term reliability of only average (rather matching its early 2002 Reliability Percentrank of .53), something of a disaster for a Honda-engineered product. However, as with the North-American-made Toyota Avalon, only time will tell what the Odyssey's actual short-term (1-to-3-year) reliability, mid-term (4-to-6-year) reliability, and longer term (7-to-8-year) reliability will be.
Nissan Motor Company, with a 1997-2001 Reliability Percentrank average of .81, saw its U.S. auto sales fall 11% in May 2006. Its U.S. car sales fell 11%, but its U.S. truck sales fell 11%. Nissan Motor Company's models showing the largest gains in U.S. sales in May 2006 over May 2005 were the Nissan Frontier pickup truck (1997-2001 RPA of .81 and a CR 2006 All-Around Use Quick Pick, but with a CR 2006 predicted short-term reliability of only average), up 39.4% to 7,409, the Nissan Sentra sedan (1997-2001 RPA of .66, but with a CR 2006 predicted short-term reliability in the second highest category), up 7.2% to 10,907, the Infiniti QX56 sport-utility vehicle (too recent for a 1997-2001 RPA, but with a CR 2006 predicted short-term reliability in the lowest category), up 5.6% to 1,265,and the Nissan 350Z roadster (with a CR 2006 predicted short-term reliability of only average), up 4.9% to 2,809.
Nissan's Hottest Sellers in May 2006 2005 Nissan Frontier 2006 Nissan Sentra 2006 Infiniti QX56 2006 Nissan 350Z Subaru division of Fuji Heavy Industries, Ltd., with a 1997-2001 RPA of .82, saw its May 2006 U.S. auto sales rise 9%. Its car sales rose 1%, but its truck sales rose 25%.
Mazda Motor Corporation, with a 1997-2001 RPA of .70, saw its May 2006 U.S. auto sales fall 2%. Its car sales fell 2%, but its truck sales rose 1%.
In summary, the May 2006 sales by the auto manufacturers of quality products were solid; U.S. sales by Honda's Honda division set a May record, U.S. sales by Toyota set a company record for all months, and U.S. sales by Subaru rose 9%.
At the other end of the quality spectrum, General Motors Corporation, with a 1997-2001 RPA of .30, saw its May 2006 sales plunge 16%. May's consumer shift to quality and out of GM products left GM with a year-to-date U.S. market share of .23. Such a drop in market share - from .26 for all of 2005 - more firmly plants a Chapter 11 bankruptcy filing in GM's horizon, independently of what action Delphi finds necessary or expedient. And if the consumer shift to quality that has occurred in 2006 becomes the norm for the next 3 years, GM may find it necessary to avail itself of multiple Chapter 11 filings. With three such, General Motors will likely be gone from the automotive industry for good. However, if General Motors' demise occurs within the next 7 years, there may be enough extra demand for the products of the remaining two of the Big Three to permit them to improve quality without a catastrophic effect on earnings.
Chrysler Group of DaimlerChrysler, AG, with a 1997-2001 RPA of .40, saw its May 2006 U.S. auto sales fall 14%.
Ford Motor Company, with a 1997-2001 RPA of .51, saw its May 2006 U.S. auto sales fall a more modest 6%.
General Motors' and Nissan's year-to-date U.S. market share fell a notch; Toyota's rose a notch. The following table provides the summary.
Table II: Fractional Shares of the U.S. New Passenger Vehicle Market for the Reliable Two, Nissan, Hyundai, and the Big Three for Years 1993, 1995, 1997, 1999, 2001, 2003, 2005, and Year-to-Date 2006, Estimates of Natural Market Shares, Distances to Natural Market Shares, and Distances Traversed from 1993
Manu- facturer 1993
1995 1997 1999 2001 2003 2005 YTD 2006 Estimate of Natural Market Share* Remaining Distance to Natural Market Share Distance Traversed from 1993 Toyota .07 .07 .08 .09 .10 .11 .13 .15 .23 .08 .08 Honda .05 .05 .06 .06 .07 .08 .09 .09 .14 .05 .04 Nissan N/A N/A N/A N/A .04 .05 .06 .06 .16 .10 N/A Hyundai N/A N/A N/A N/A .02 .02 .03 .03 .05 .02 N/A GM .34 .33 .31 .29 .28 .28 .26 .23 .04 -.19 -.11 Ford .26 .26 .25 .24 .23 .19 .17 .17 .07 -.10 -.09 Chrysler .15 .15 .15 .16 .16 .13 .14 .14 .00 -.14 -.01 *The Estimate of Natural Market Share for each manufacturer, save Hyundai, is the fractional share of new registrations of passenger vehicles in New Zealand in 1996. New Zealand was chosen in order to remove from the decision-making process, or at least reduce the influence of, such factors as old name recognition, repetitive buying patterns, and normatively motivated attitudes. The intent was to obtain an estimate as to what share each manufacturer would be able to attain in an environment of rational decision-making, as best each individual is able. The year 1996 was chosen as it is the most recent year in American Automobile Manufacturers Association's 1998 edition of World Motor Vehicle Facts. Hyundai's Natural Market Share Estimate is based on (1) its 1996-2000 Reliability Percentrank average relative to GM's and (2) its product prices relative to those of GM. A different method of estimating the Natural Market Share of Hyundai is used as its reliability has notably improved since the late 1980s, but still does not significantly differ from GM's.
In the Hyundai vs. General Motors war, GM took another clobbering in May 2006; Hyundai's sales advanced 1% as GM's fell 16%.
U.S. May 2006 auto sales by Saab, a European subsidiary of General Motors with a 1997-2001 RPA of .43, fell 24%, and sales by Volvo, a European subsidiary of Ford with a 1997-2001 RPA of .29, fell 10%.
In the niche markets, Porsche May 2006 U.S. auto sales fell 5%, BMW sales rose 1%, and Mercedes-Benz sales rose 17%. Old line European nobility continues to hang onto U.S. fealty.
Note: Big Three sales and market shares do not include sales of European lines - Mercedes-Benz, Saab, Volvo, Jaguar, and Land Rover. Percentage unit sales changes for May 2006 over May 2005 are daily selling rate percentage changes and consequently take account of the fact that there were 25 selling days in May 2006 and 24 in May 2005.
Source for May 2006 auto manufacturer sales data: "May 2006 U.S. Auto Sales," the Associated Press, June 1, 2006, available at mlive.com's News Flash section (Note that in this table percentage changes are not adjusted for the differing number of selling days in May of 2006 and May of 2005. This is the second time that the Associated Press table failed to make this adjustment.)
Source for detailed Toyota sales data: "Toyota Reports May Sales," June 1, 2006, at http://pressroom.toyota.com/Releases/View?id=TYT2006060141005
Source for Nissan sales data: "Nissan Announces May Sales," June 1, 2006, available at http://www.nissannews.com/corporate/news/current/20060601094745.shtml
Source for Honda sales data: "Honda Division Posts Best May Ever" June 1, 2006, http://www.hondanews.com/CatID1000?mid=2006060149166&mime=asc
Source for Reliability Percentranks and Percentrank averages: Auto on Info's Table I-MVRP
Source for December 2005's Hottest Ten: "Hot Off the Lot," Wall Street Journal, January 12, 2006, p. D4 (See "By WSJ's Lot-Stay Time, Made-in-Japan TMC Models Are Top 5 of Hottest 10," Auto on Info, January 2006.)
Sources for Consumer Reports 2004 Quick Picks: Consumer Reports, February 2004, p. 49 and Consumer Reports, May 2004, p. 53, Consumer Reports, August 2004, p. 51, Consumer Reports, December 2004, p. 59
Source for CR 2004 Top Picks: Consumer Reports, April 2004, pp. 8,9
Source for CR 2005 Top Picks: Consumer Reports, April 2005, pp. 6,7
Sources for CR 2005 Quick Picks: Consumer Reports, April 2005, p. 31 and Consumer Reports, August 2005, p. 51, the latter providing the "best all-around Quick Picks"
Source for CR 2005 predicted short-term reliability ratings (save for the Infiniti M45): "Vehicle Profiles: A User's Guide," Consumer Reports, April 2005, pp. 40-73
Source for CR 2005 predicted short-term reliability rating for the Infiniti M45: Consumer Reports, September 2005, p. 51
Sources for IIHS Best Pick Frontals: "Toyota Camry and Honda Accord Dominate Results of IIHS' Frontal Offset Crash and Side Impact Tests," Auto on Info, April 2005, "Toyota Sienna and Honda Odyssey Minivans Score Best on IIHS 2005 Crash Tests, Receive "Best Pick Frontal" Designation; GM's Chevrolet Astro, GMC Safari, Pontiac TransSport / Montana, and Chevrolet Venture Score Worst," Auto on Info, April 2005, and "Toyota Tacoma Pickup Truck Scores Best on IIHS 2005 Crash Tests, Receives "Best Pick Frontal" Designation," Auto on Info, April 2005
Sources for Consumer Reports' 2006 predicted short-term reliability ratings of "most reliable": "Asian Auto Brands' Reliability Uneven," Christine Tierney, Detroit News, October 27, 2005, at http://www.detnews.com/2005/autosinsider/0510/27/C01-362825.htm and "Asian Vehicles Rank Low in Survey," Sharon Silke Carty, USA Today at Detroit Free Press, October 27, 2005, at http://www.freep.com/money/autonews/reliable27e_20051027.htm (The list in the Detroit Free Press omits the Toyota Echo in its list of small car recipients of CR's 2006 "Most Reliable" rating. To see a breakdown by manufacturer and line, go to "Toyota, Honda, Subaru, and Nissan's Infiniti Overwhelm CR's 2006 Most Reliable List," Auto on Info, November 2005.)
Source for Consumer Reports' 2006 predicted short-term reliability when expressed as "highest," "second-highest," "average," "second-lowest," or "lowest": "Reviews of the 2006 Models," Consumer Reports Best Buys for 2006 Buying Guide, pp. 154-176
Source for Consumer Reports' 2006 top-of-vehicle-category Quick Picks: "CR Quick Pick Recommendations," Consumer Reports, April 2006, p. 23
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