Camry 2018 - Toyota's effort in the SUV era

The 2018 Camry is a factor that helps Toyota rebalance the market, in the context of customer demand shifting rapidly to SUVs.

Thirty years ago, Toyota used high fuel prices and strict emissions regulations to its advantage when it entered the U.S. Along with other Japanese manufacturers, including Honda and Nissan, Toyota gained the upper hand over local automakers with cheap, fuel-efficient sedans.

But now the US market is changing, with demand for SUVs surpassing sedans for the first time in decades. And SUVs are, of course, an American strength, with the trio of Ford, GM and Fiat Chrysler. Last year (2016), Toyota lost 0.3% of its market share to 14%, as customers here turned away from traditional sedans.

In early 2017, Toyota officially introduced the new generation Camry to overcome the difficulties. And a new question arises, where will the future of Camry go in a market that favors SUVs, along with low fuel prices.

Despite the challenges, Toyota executives and auto industry analysts believe Toyota and other Japanese automakers are well-positioned to make a change. They are not small companies. Over the past four decades, Toyota has not only defined American tastes in sedans, but has also done business in every segment, from SUVs to pickup trucks.

Toyota's product mix in the US is 60% SUVs and 40% sedans, said Jack Hollis, vice president of North America. "Nobody could have predicted what's going on in the market today. American tastes are changing so quickly."

Hollis predicts that the Toyota RAV4 crossover will outsell the Camry this year for the first time in its history. Camry sales fell 9 percent in 2016. Meanwhile, the Toyota Highlander is the third-best-selling midsize SUV (behind the Ford Explorer and Jeep Grand Cherokee), and the Tacoma leads the midsize pickup truck sales charts.

Toyota's rise in the SUV and pickup segment contrasts with Toyota's previous focus on small cars. In the 1980s, the Corolla was one of the best-selling cars in the US market, followed by the Camry.

As Toyota keeps up with the market, American automakers have learned from the past, when Japanese automakers captured 10% of the market share in the 1980s.

"Government regulations hurt Detroit manufacturers because big cars like GM, Pontiac, or Buick can't meet fuel economy standards," said Joe Philippi, a former Wall Street auto analyst.

Worse, American automakers also neglected customer loyalty. “Customer loyalty to Japanese automakers is strong,” concluded the Brookings Institution in 1991.
"The Japanese were smart about the timing of the Americans' need for cheap, fuel-efficient cars in the 1970s, and then they focused on improving the quality of their cars. That was a real leap forward," Philippi said.

American automakers have shifted gears, expanding into affordable small cars, preparing for rising gas prices and targeting younger buyers. General Motors' Buick, for example, has pioneered the small crossover segment. Chevrolet has redesigned the Cruze and Malibu, earning rave reviews from automotive journalists.

The change has attracted attention from Toyota. Although the Japanese automaker is still the leader in mid-size sedan sales, it has fallen behind in terms of design and engine performance. The new generation Camry has just been launched as a "weapon" for Toyota to maintain its long-standing throne.

“A lot of customers are choosing SUVs over sedans,” said Jack Hollis, Toyota’s vice president of North America. “We’re pushing sedans to create balance in the car market.”

According to Zing