Camry: Toyota’s “bread-and-butter”
DALLAS — The end of Camry production at Subaru’s plant in Lafayette, Ind., will give Toyota more flexibility over inventory amid a sales slump for the nameplate and the entire car segment.
But Toyota has no plans to significantly curb production of the nation’s top-selling sedan. Indeed, it intends to vigorously defend that title, even as SUVs and crossovers begin to eclipse the sedan market.
“It’s still the bread-and-butter of the Toyota Division,” Bill Fay, Toyota Division general manager, told Automotive News. “The overall car market is down 8.1 percent through July while the light-truck segment is up 9 percent, so clearly all of the industry growth and strength for this year has been on the light-truck side. Within that dynamic, the Camry continues to do very well.”
The agreement with Subaru goes back to the mid-2000s, a time when Subaru was a middling niche brand and Toyota was feasting on the Detroit 3.
Eager to add more local production capacity to meet surging U.S. demand, Toyota found a tempting opportunity in Subaru’s Lafayette plant, built in the late 1980s as a joint venture with Japanese truckmaker Isuzu. Isuzu production had ended there in 2004, and in 2005 Toyota acquired a large stake in Subaru parent Fuji Heavy Industries from a struggling General Motors. Production of the Camry began in Lafayette in 2007 and amounted to 97,000 vehicles a year.
Since that time, Subaru has seen breakneck growth and has recently been straining to meet record U.S. demand for its lineup of all-wheel-drive wagons and crossovers. In 2014, Subaru and Toyota confirmed plans to end Camry production by the fall of 2016. Subaru announced last year that it will build a seven-seat utility vehicle at Lafayette after 2017, using capacity that’s separate from the Camry line.
“I think the relationship with Subaru worked out really well,” Fay said. “It’s nice to bring it back into our own plant, and I think we’ve got a little more flexibility going forward.”
|Toyota has been committed to continuing the Camry’s run as the best-selling car in the U.S. This year’s sales mirror a broader downturn in car sales.|
|Despite declines this year, the Camry remains well ahead of its midsize competitors.|
|Model||U.S. sales Jan.-July||Change|
|Source: Automotive News Data Center|
U.S. Camry production is now consolidated at Toyota’s massive car plant in Georgetown, Ky. That factory also added a line last year to build the Lexus ES sedan, the first U.S.-built Lexus vehicle.
Fay said Subaru’s production of the Camry ended in May and the changeover had been planned for at least a year, giving the Georgetown plant time to prepare. The discontinuation of the Venza wagon freed up capacity.
“We were already building in the capabilities to take that production and convert it over to Kentucky,” Fay said. “We had a pretty seamless change.”
|As Toyota seeks to defend the Camry’s title as top-selling car in the U.S., the company’s average incentive spending per Camry is rising. Incentive spending includes consumer rebates, discount financing, lease rate subsidies and other forms of promotion.|
|Avg. Incentive spending per Camry||Avg. Incentive spending per Camry|
|n 2015 average through July: $2,775|
|n 2016 average through July: $3,528|
Despite an 8 percent drop in Camry sales this year, Toyota isn’t using the move to trim production, as it remains committed to continuing its streak as the best-selling car 14 years running. The Camry is well ahead of its competitors among midsize cars this year, but the compact Honda Civic, recently redesigned, and Toyota’s own Corolla aren’t far behind.
Bill Fay, Toyota: “We were already building in the capabilities to take that production and convert it over to Kentucky. We had a pretty seamless change.”
Toyota is supporting the Camry with incentives to keep it competitive. “Yes, we are using incentives, but we do it tactically and we do it with the idea of keeping our dealers competitive in the marketplace with the Camry,” Fay said.
Also, the sedan’s price will remain unchanged for the 2017 model year despite some interior equipment upgrades.
Meanwhile, Toyota has stepped up its availability of light trucks such as the RAV4 and Highlander to capture the broad shift in the marketplace.
Fay noted that a redesigned Camry is coming soon. Toyota executives have said it will be the first U.S.-built model to switch over to the Toyota New Global Architecture platform with a lower center of gravity and revised suspension.
Spy photos of what appears to be the 2018 Camry suggest a more rakish body with a noticeable lip on the rear deck and new side mirrors. Analysts say the redesign is a golden opportunity to inject more verve into a key Toyota product as the brand tweaks its conservative image.
“Consumers do want something that looks a little more exciting,” said Stephanie Brinley, senior analyst at IHS Automotive, “and I think Toyota will respond.”