Kelley Assesses Honda, Toyota Sales in 2011

By Justin Stoltzfus
Tuesday, Oct 04 2011 14:42

In recent months, news from many auto industry analysts was that the Japanese auto makers providing popular cars in the American market were recovering, but although that may be true, a new October report from Kelley Blue Book is contending that the same brands are still “losing ground” because of supply issues. This most likely illustrates how disruptions to the supply chain can affect sales for a vehicle manufacturer long after inventory reinforcements arrive on dealer’s lots.

In an October assessment of the overall car market in the U.S., Kelley Blue Book starts out by saying that September inventory figures for brands like Honda and Toyota recovered quite a bit in August, with increases in the range of 15,000 new units. But KBB also points out that high demand for many Honda and Toyota models means that these cars are still getting snapped up as soon as they appear, and that even with additional inventory, the Japanese auto makers are still giving up market share.

In real terms, Kelley Blue Book cites a four-point decline in Japanese market shares from last year. Analysts claim that these sales were instead given to domestic auto makers like Ford and Chevrolet, as well as the South Korean company Hyundai/Kia, which has been devouring an ever greater piece of the pie in the U.S. auto market. Kelley’s report seems to indicate that, as Toyotas and Hondas continue to be scarce on some lots, the style, modernity and class of vehicles like the Hyundai Elantra and Sonata, along with the small-car appeal of models like the Kia Rio and Kia Soul, are filling in the gap and taking over in American streets, driveways and garages.

Looking at where supply issues are worst for the Japanese, Kelley points to compact cars, mid-size sedans and compact SUVs and crossovers. With customers looking to get their hands on these types of models, it seems that a robust supply is not just a good thing, but a necessity. Toyota and Honda executives have to keep scratching their heads over how to get more and more cars onto American lots across the country. The Honda Civic continues to be a much sought after vehicle in both new and used car markets, while the Toyota Camry and RAV4 are some of the most in demand 2012 products from this popular brand.

It’s Kelley’s point of view that getting back up to speed after events like the earthquake and tsunami that rocked Japanese society early this year is more than the work of a few months. Kelley executives remarked in the October report that Japanese car makers are likely to feel the negative impact of their supply loss for years to come, with huge revenue shortfalls looming on the books as Japanese companies work through a very competitive market from year to year. Meanwhile, say Kelly staffers, on Hyundai/Kia is throwing out massive amounts of vehicles, many of them fresh redesigns, that will continue to capture the imagination of American customers. We’ll see how this plays out in 2012, with auto makers continuing to offer impressive incentives for capturing more market share. Use this competition to your advantage and always get the best sale, rebate and financing offers if you are on the fence about your next vehicle purchase.


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