Japanese Bet on Sedans Goes Bad -- WSJ
2018年5月3日 - 04:02PM
Dow Jones News
Toyota, Nissan, Honda feel sting as drivers in the U.S. shift to
SUVs; discounting takes hold
By Sean McLain
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (May 3, 2018).
TOKYO -- A bet by Japanese auto makers that Americans still want
sedans is turning out to be expensive.
April sales in the U.S. from Japan's big three auto makers --
Toyota Motor Corp., Nissan Motor Co. and Honda Motor Co. -- were
down, with Nissan suffering a double-digit drop.
The big culprit was the sedan, the bread-and-butter car for the
Japanese car makers since they entered the U.S. decades ago. As
Americans' taste shifts toward sport-utility vehicles, Nissan's
U.S. sedan sales fell almost 35% in April from a year earlier,
driving an overall decline of 28%. Honda's overall sales fell 9.2%,
while Toyota's dropped 4.7%.
It isn't that the Japanese companies have ignored the U.S.
trend. They all make pickups, SUVs and crossover SUVs, and they
have been ramping up production as quickly as they can, sometimes
by exporting from Japanese plants that have more capacity. Toyota's
best-selling vehicle last year was the RAV4 crossover SUV.
Yet the tug of past success remains. Toyota and Honda both put
engineering and marketing muscle last year into complete redesigns
of their flagship sedans, the Camry for Toyota and the Accord for
Honda. Nissan is set to do the same later this year with its Altima
sedan. The companies are slashing weight and increasing horsepower
in an effort to highlight the vehicles' performance edge over more
top-heavy SUVs.
Toyota President Akio Toyoda personally unveiled the new Camry
at the Detroit auto show in January 2017. "We view this as an
opportunity to reignite the midsize sedan market," Mr. Toyoda said
then. "I mean, why should SUVs get all the glory?"
Better performance, fresh design and long-trusted brand names
haven't done the trick, however. Toyota has resorted to deep
discounting, managing to increase sales of the Camry slightly this
year. It sold nearly 30,000 Camrys in the U.S. last month with an
average incentive of $2,483, according to analysis by Jefferies.
That is a big bite for a car whose manufacturer's suggested retail
price starts at $23,495.
Nissan's experience shows what happens when manufacturers get
stingier -- a punishing decline in sales. It reduced Altima
incentives to $3,445 in April from $3,804 in March, according to
Jefferies. Sales of the vehicle fell 49%, partly because some
customers were likely waiting for the new model.
Nissan's sales decline, which also hit its trucks and SUVs, in
part stemmed from a reduction in fleet sales, such as to rental-car
agencies that buy many vehicles at a discount.
Honda maintains that its Accord, which was named North American
Car of the Year in January, still can recover although sales fell
by nearly a fifth in April.
Henio Arcangeli, the company's U.S. sales chief, said "growth
opportunities still exist within the passenger car side of our
business" because "not all customers in the market want a truck or
SUV."
Even if they aren't selling well, sedans are still valuable as a
hedge against higher gasoline prices, as Japanese executives see
it. Trucks and SUVs accounted for a majority of the U.S. market in
the early 2000s, but the pendulum swung the other way after the
2008 global financial crisis and an increase in fuel prices.
Gas prices are now rising again, averaging more than $2.80 a
gallon. If they continue to climb, Americans might show renewed
interest in sedans -- in particular fuel-sipping models such as
Toyota's hybrid Prius.
However, today's oversize people haulers aren't the gas guzzlers
they once were.
Crossovers, in particular, are nearly as fuel-efficient as
sedans, and offer more space for only a slight premium in price.
That means gasoline prices may need to rise significantly higher
before Americans are willing to compromise on space for a slight
edge in fuel efficiency.
U.S. car makers are betting that isn't going to happen any time
soon. Ford Motor Co., General Motors Co. and Fiat Chrysler
Automobiles NV have all pulled back from the sedan business, with
Ford saying it will stop selling the cars in the U.S. almost
entirely.
Write to Sean McLain at sean.mclain@wsj.com
(END) Dow Jones Newswires
May 03, 2018 02:47 ET (06:47 GMT)
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