kbb - one year later

7/31/2019 KBB - One Year Later

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Toyota: One Year Later

BLUE BOOKSpecial Report

www.kbb.com

Robyn Eagles | Director, Public Relations

949.268.3049 | [email protected]

Joanna Pinkham | Senior Public Relations Mgr


Brenna Robinson | Public Relations Mgr


Rebekah King | Consumer Communications Mgr


Kelley Blue Book Public Relations Contacts:

In This Report:INDUSTRY ANALYSIS - Commentary rom Ja

R. Nerad, executive editorial director and

executive market analyst, Kelley Blue Books

kbb.com

VALUATION ANALYSIS - The Recalls Eect o

Toyotas New and Used-Car Values

MARKET INTELLIGENCE ANALYSIS - Curren

Shopper Opinions, Consideration, Saety

Perceptions; New-Car Trafc

INDUSTRY ANALYSIS - Commentary rom

James Bell, executive market analyst or

Kelley Blue Books kbb.com

Jack R. Nerad, executive editorial director and executive market analyst, Kelley Blue Books kbb.com

January 2011

On January 1, 2010, oyota was King o the World. Just like Jack Dawson on the bow o the itanic in the top-grossing movie o the1990s, thecarmaker had everything going its way. On a global basis it had recently ascended into the top spot on the light-vehicle sales and production charater assuming the generally acknowledged position as the worlds leading automaker

ven earlier in the decade as General Motors ortunes declined. In the United States itsverall market share was up, and even though its sales, like the industry as a whole, had takenbattering by the Great Recession, oyota remained in a strong position to become an even

more dominant orce, both globally and in the United States.

Ten, just as Jack Dawsons passenger liner hit an iceberg, oyota crashed into an iceberg its own in the orm o an unintended acceleration and saety recall problem that, or a time at least, threatened to spin out o control. But unlike th

itanic, we dont believe that the recent rip in its hull in the orm o the 2010 crisis will send it to the bottom. Instead, oyota got the watertight doors sn time to allow it to repair its image and return as robust as ever.

But there can be no doubt that, one year ater oyotas debacle began, the bad publicity, negative prreports and dreary word-o-mouth has taken its toll on the brand. Our Kelley Blue Book MarketIntelligence group reports that even today, a year ater the crisis descended on oyota, the brandsshopper activity has not returned to last years level. Our continuing Kelley Blue Book Brand Watcstudy notes that consumer consideration o the oyota brand is down as well. Many oyota ownerercely loyal in act, many put no credibility in the negative press reports and regarded the whole as a uke yet oyotas overall loyalty rate has declined slightly, as well.

Te negative publicity also stung oyota in another area in which it has traditionally shown strengthused-vehicle values. In the used-car market, oyota didnt depreciate much more than the overall min 2010, but since its models normally robustly outperorm the market, this represents a decline. Athe decline could have been worse, except or the act that the weakness o the new-vehicle market tresulted in ewer used-vehicle trade-ins boosted the value o used-vehicles in general. Accompanyinthe news on used-vehicle values, oyotas new-vehicle residuals are down on a year-over-year basis, bthe drop is not completely attributable to the saety-recall issues, as demonstrated by the act that itsresiduals were not down across the board. Instead, some oyota models show continued strength wothers are suering on a residual basis.

O course, the most obvious indicator that oyota still continues to suer woes rom the negative publicity is its sales perormance in recent months,ncluding December. Over the course o last years nal month, oyota was down six percent in an overall market that was up 11 percent. General Motnd Chrysler Group, two companies with publicity issues o their own, were among those that signicantly out-did oyota in sales last month.

o, is there a silver lining in the black cloud or oyota? I have to credit my Kelley Blue Book colleague Juan Flores, a talented analyst, or this thinking; espite the grave problems it caused oyota, i the company were going to have a crisis o this type, it couldnt have come at a better time. With the over

ndustry down in 2010, oyota likely did not lose nearly as many sales as it would have i the market had been strong. Additionally, its competitors, somwith their own baggage, werent in a position to really exploit oyotas overall weakness during its months in the barrel o media criticism. Finally, by sheappenstance, oyota was in a relatively allow year anyway with ew important new-model introductions occurring. Happily or the corporation, it wa

n the midst o an all-new Camry or Corolla launch when the spate o bad publicity hit.

With a mammoth war chest o revenues gathered during its solid days, oyota has been able to maintain reasonable sell-through volumes, and we expecthat this year, as memories o its problems ade and new models roll into showrooms, it will regain much o its lost mojo. Te best news or oyota is th

ad built up a huge amount o goodwill over the course o ve decades in the U.S. market, so one bad year was ar rom sending it, like the itanic, to thottom o the ocean.

WITH THE OVERALL INDUSTRY DOWN

N 2010, TOYOTA LIKELY DID NOT LOSENEARLY AS MANY SALES AS IT WOULD

HAVE IF THE MARKET HAD BEEN STRONG.

ADDITIONALLY, ITS COMPETITORS, SOME WITH

THEIR OWN BAGGAGE, WERENT IN A POSITION TO

REALLY EXPLOIT TOYOTAS OVERALL

WEAKNESS...- JACK R. NERAD

NDUSTRY ANALYSIS - Toyota: One Year Later


2/162 BLUE BOOKSpecial Report TOYOTA: ONE YEAR LATER

Despite Recall Crisis, Used Toyota Values Hold Strong in 2010Juan Flores, director o vehicle valuation, Kelley Blue Book

Alec Gutierrez, manager o vehicle valuation, Kelley Blue Book

VALUATION ANALYSIS - Toyota: One Year Later

Even with oyotas turbulent year, the brand generally perormed in line with the rest o the used-car market. Immediately ollowing the recallannouncement, values dropped slightly, but by year-end they stabilized and in some cases ully recovered. Retained values ell only 3 percent or thyear as the overall market increased 1 percent.

Model Years 2007 - 2009

-3.57%

-3.55%

-3.08%

-2.04%

0.96%

2.76%

10.60%

-9% -6% -3% 0% 3% 6% 9% 12% 15%

Hyundai

Honda

Toyota

Nissan

Industry

Ford

Chevrolet

2010 YTD Retention % Change

2010 Annual Percentage Change

VariSienna 4.94% -4.27% Minivan 9.2

4Runner 0.50% -4.33% Mid-Size SUV 4.8

Highlander -3.21% -7.56% Mid-Size Crossover 4.3

Tacoma -3.31% -6.47% Mid-Size Pickup 3.1

RAV4 -3.75% -6.15% Compact Crossover 2.4

Camry -0.32% -2.07% Mid-Size Car 1.7

Yaris -5.20% -5.68% Subcompact Car 0.4

Prius -11.42% -10.74% Hybrid Car -0.6

Corolla -2.19% -1.17% Compact Car -1.0

FJ Cruiser -5.85% -4.33% Mid-Size SUV -1.5

Avalon -5.53% -2.91% Full-Size Car -2.6

xD -8.78% -5.68% Subcompact Car -3.0Venza -11.14% -7.56% Mid-Size Crossover -3.5

Sequoia -6.92% -3.07% Full-Size SUV -3.8

tC -5.12% -1.17% Compact Car -3.9

Matrix -7.81% -1.17% Compact Car -6.6

Tundra -1.55% 6.30% Full-Size Pickup -7.8

xB -11.08% -1.17% Compact Car -9.9

Toyota Total -3.08% 0.96% Overall Industry -4.0

Scion Total -6.77% 0.96% Overall Industry -7.7*Model Years 2007 - 2009

SegmentToyota/Scion Model

Tis small descent shows how little last years recall impacted oyotas valuations, especially considering that Honda and Hyundai each depreciated moreoyota in 2010 and neither brand was impacted by a high-prole recall. Among the best perorming oyota models were the RAV4, Camry, Highlandeienna and Yaris. Each o these vehicles benetted rom the respective segments in which they compete by oering comparable or better than average uconomy in an aordable package. In todays economy, value is more important than ever and these vehicles have remained in high demand or this rea

While oyotas aordable models were able to perorm well throughout 2010, the Matrix, Avalon, undra, Sequoia and Venza underperormed the overmarket and their respective segments.

Lexus Underperorms, Along with All Luxury Brands

Toyota Motor Corporations luxury brand, Lexus, underperormed in2010 with an 8 percent drop in used-car values. However, it shouldbe noted that the overall luxury segment did not are well in 2010

dropping between 6.7 and 12.5 percent), as consumers looked or ways toave given the state o the economy. Lexus best-perorming models includeS, RX and LX, while ES, GS, LS, SC and GX experienced heavy drops in thisegment. Lexus perormance in the market is related to the luxury segmentsecline, more-so than recall woes.

2010 Annual Percentage Change

Vari

LX -0.30% -9.05% Luxury SUV 8.75

RX -4.90% -12.51% Luxury Crossover 7.61

IS -5.83% -6.74% Luxury Car 0.91

GX -10.15% -9.05% Luxury SUV -1.1

ES -8.75% -6.74% Luxury Car -2.0

SC -10.23% -6.74% Luxury Car -3.4

LS -12.67% -6.74% Luxury Car -5.9

GS -15.58% -6.74% Luxury Car -8.8

Lexus Total -8.06% 0.96% Overall Industry -9.0*Model Years 2007 - 2009

Lexus Model Segment


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VALUATION ANALYSIS - Toyota: One Year Laterontinued

Toyota Tundra Underperorms Amidst Top-Perorming Truck Segment

In 2010, the truck segment was among the top perormers with a 6.3 percent increase throughout the year. However, oyotas undra was the only usize pickup to depreciate, dropping 1.5 percent. undra aced many challenges penetrating the U.S. market or many years prior to the recall. Te redid not help this model overcome these obstacles.


-1.55%

2.63%

4.23%

6.30%

12.78%

13.27%

-10% -5% 0% 5% 10% 15% 20%

Tundra

F-Series

Titan

Full-Size Pickup

Ram Pickup

Silverado


High Sticker Price Leads to Sequoia Decline

T

oyota Sequoia depreciated 7 percent relative to the 3 percent drop or all ull-size SUVs; however, it still beat the Chevrolet ahoe, which droppednearly 11 percent. Te Sequoias decline is more related to its high sticker price than the recall. With unemployment currently at 9.4 percent,

consumers are looking or the most cost-eective options.


-10.69%

-6.92%

-3.84%

-3.07%

11.49%

-18% -12% -6% 0% 6% 12% 18%

Tahoe

Sequoia

Expedition

Full-Size SUV

Suburban



5/16TOYOTA: ONE YEAR LATER BLUE BOOKSpecial Repo

2010 Toyota Sales Flat as Industry Improves; Incentive Spending In Line with Competitors


Toyota sales appear to trend well through much o 2010, with a large jump in March largely driven by incentives. Many brands increased at this timhowever, oyota clearly surpassed the competition that month.

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

Dec -0 9 Jan -1 0 F eb -1 0 Mar -10 Apr -1 0 Ma y-1 0 J un- 10 J ul -1 0 Aug- 10 Se p- 10 Oc t-1 0 N ov- 10 Dec -1 0

New-Car Sales

Chevrolet Ford Honda Hyundai Nissan Toyota

Source: Automotive News

By year-end, oyotas sales were down 0.5 percent overall, while the rest o the market improved 15 percent. It also is important to remember that 2009 dismal year or the entire auto industry. In 2010, oyota relied on heavy incentives to spur new-car demand and keep consumers interested.

2010 Total 2010 vs. 2009 Dec 10 vs. Dec 09 Dec 10 vs. Nov 10

Ford 1,752,511 21.60% 9.80% 30.47%

Chevrolet 1,563,881 16.80% 9.50% 25.85%

Toyota 1,488,588 -0.50% -6.10% 36.11%

Honda 1,096,874 5.00% 18.20% 44.65%

Nissan 805,159 16.90% 26.30% 28.56%

Hyundai 538,228 23.70% 32.60% 10.02%

Lexus 229,329 6.20% -3.50% 51.10%

Scion 45,678 -21.20% 4.90% 3.18%

Total/Averages 11,590,274 15.04% 13.96% 30.11%*MOM Average does not include Hummer, Pontiac, Saab, or Saturn*YOY and YTDYOY Averages do not include Hummer, Pontiac, Ram, Saab, or Saturn

*Source: Automotive News

2010 NEW-CAR SALES


6/16


7/16




YoY % Change

Sales Share Sales Share Share

Corolla/Matrix 296,874 16.35% 266,082 14.96% -8.51%

tC 17,998 0.99% 15,204 0.85% -13.77%

xB 25,461 1.40% 20,364 1.15% -18.36%

Compact Car 1,815,261 1,778,397

RAV4 149,088 15.08% 170,877 14.51% -3.82%

Compact Crossover 988,528 1,178,009Avalon 26,935 7.20% 28,390 8.09% 12.31%

Full-Size Car 374,117 351,107

Tundra 79,385 6.98% 93,309 6.82% -2.28%

Full-Size Pickup 1,136,708 1,367,252

Sequoia 16,387 7.12% 13,848 5.63% -20.85%

Full-Size SUV 230,315 245,891

Camry 356,824 18.31% 327,804 15.26% -16.65%

Mid-Size Car 1,948,385 2,147,431

Highlander 83,118 14.02% 92,121 13.29% -5.20%

Venza 54,410 9.18% 47,321 6.83% -25.61%

Mid-Size Crossover 592,999 693,251

Tacoma 111,824 41.38% 106,198 40.04% -3.24%

Mid-Size Truck 270,251 265,259

4Runner 19,675 5.21% 46,531 10.38% 99.19%

FJ Cruiser 11,941 3.16% 14,959 3.34% 5.51%

Mid-Size SUV 377,620 448,356

Sienna 84,064 24.51% 98,337 26.40% 7.72%

Minivan 342,950 372,438

Yaris 63,743 13.01% 40,076 7.53% -42.15%

xD 14,499 2.96% 10,110 1.90% -35.84%

Subcompact Car 489,850 532,381

Toyota Total 1,496,211 14.34% 1,488,588 12.84% -10.46%

Scion Total 57,961 0.56% 45,678 0.39% -29.07%

Industry Total 10,431,509 11,590,274

YoY % Change

Sales Share Sales Share Share

ES 48,485 6.91% 48,652 6.25% -9.46%

IS 38,077 5.42% 34,129 4.39% -19.12%

GS 7,430 1.06% 7,059 0.91% -14.27%

LS 11,334 1.61% 12,275 1.58% -2.28%

SC 720 0.10% 328 0.04% -58.89%

Luxury Car 701,978 777,981

RX 93,379 29.34% 95,790 22.21% -24.32%

Luxury Crossover 318,248 431,375

GX 6,235 8.06% 16,450 14.84% 84.05%

LX 3,616 4.68% 3,983 3.59% -23.16%

Luxury SUV 77,321 110,841

Lexus Total 215,975 2.07% 229,329 1.98% -4.43%

Industry Total 10,431,509 11,590,274

2009 2010

2009 2010

Lexus

Toyota



Toyota Residual Values


For the 2010 model-year, oyota and Lexus were projected to have the best ve-year residual values o any brand. However, both brands were subjeto a very difcult 2010, with recall troubles, declines in the strength o smaller cars and an aging eet. 2010 oyota vehicles were expected to main38.8 percent o their MSRP ater ve years. Even ater the rough year the brand endured, the 2011 oyota brand average experienced only a mino

.3 percent drop to 38.5 percent. Lexus took an even bigger hit, alling to a 36.4 percent average in 2011 rom 39.3 percent in 2010, primarily due to aesigns rather than stigma let behind rom saety issues or recalls.

Kelley Blue Book analysts point to sotness in the compact segment due to stable gas prices or pushing specic oyota models like the Prius, Yaris and

Corolla down 5.0, 3.0 and 3.0 percentage points, respectively.

Te Prius was redesigned or 2010 and now will expand the brand into more hybrid oerings, bringing improved uel economy and a reduced sticker prowever, it also had new competition in the segment with the addition o the Honda Insight and the Lexus HS. Both the Insight and the HS have strugo nd mass-market avor and thus are expected to experience declines in their 2011 residual values, dropping by 3.0 and 8.0 percentage points, respectiv

Additionally, the Prius has declined by 5.0 percentage points rom 2010 to 2011.

Tis year will bring additional competition to the Prius in the orm o the plug-in Chevrolet Volt and ull-electric Nissan LEAF, both o which are expecto sell in low volumes. However, they stand as potential image-changers or both manuacturers and garner much in the way o perceived technologicaleadership.

Residual values in the compact and uel-efcient segments dropped across the board, severely impacting oyota, which has some o the most uel-efcienehicles currently on the market, said Eric Ibara, director o residual consulting, Kelley Blue Book. While residuals among the smaller cars in oyotas

table are down rom 2010, the brand mitigated these drops with increases in residual values among the 2011 model-year Sienna, FJ Cruiser, and Sequo which are up more than 3.0 percentage points year-over-year. Tis helped oyota to maintain its second-place brand residual standing behind top braubaru or 2011.

or the 2011 model-year, oyota and Lexus recently took home a number o model-specic Kelley Blue Book Best Resale Value Awards (annual awardsased on 60-month Kelley Blue Book Residual Values):

2011ToyotaTacoma

Best Resale Value: Mid-Size PickupBest Resale Value: op 10

2011ToyotaFJCruiser

Best Resale Value: Mid-Size Utility VehicleBest Resale Value: op 10

2011ToyotaSienna

Best Resale Value: Van

2011LexusIS

Best Resale Value: Near Luxury

2011LexusRX

Best Resale Value: op 10

2011LexusGX

Best Resale Value: op 10

Overall, oyotas values navigated the gauntlet o the recall well, with little lasting eects on its residual values, said Ibara. Kelley Blue Book analystselieve the mild residual value declines oyota experienced in the last year were caused by actors unrelated to the recalls, including its aging lineup, declialues among the uel-efcient car segment, heavy incentive spending, and more. While we witnessed drops in used-car values immediately ater the recast year, we do not expect the oyota recall crisis o 2010 to aect the long-term outlook or brands residual values over time.



Q1 Q2 Q3 Q4

2007 30% 29% 29% 29%

2008 30% 34% 32% 30%

2009 30% 30% 29% 25%

2010 23% 22% 25% 22%

30%

29% 29%

29%

30%

34%

32%

30%

30%30%

29%

25%

23%

22%

25%

22%

Year-Over-Year Toyota Purchase Consideration

MARKET INTELLIGENCE ANALYSIS - Toyota: One Year Later

Car Shoppers Opinions o Toyota Since Recall Crisis Beganccording to a Kelley Blue Book Market Intel ligence survey o car shoppers on Kelley Blue Books kbb.com. Wave One o the study was conducted

mong 406 respondents rom January 29 February 1, 2010. Wave Two o the study was conducted among 306 respondents rom December 30, 20

anuary 3, 2011.

Awareness o the oyota recall situation was high among recently surveyed car shoppers, with nearly three-quarters (72 percent) saying they were awthat oyota had recalls in 2010. More than hal o survey respondents (53 percent) said they believe oyotas brand reputation has been tarnishedthe recalls.

However, deection (among those who said they were previously considering a oyota prior to the recall and now are no longer considering a oyota) hasropped 6 percentage points in the past year, rom 20 percent during Wave One o the study in January 2010 to 14 percent in Wave wo o the study inanuary 2011.

Forty percent o survey respondents believe that oyota hasadequately resolved its problems related to the recalls, and nearone-quarter (23 percent) said they believe that oyota vehiclesimproved since the recalls.

However, while many agree that oyota has resolved its problemost car shoppers are evenly split when it comes to whether onot oyota continues to have problems, but many said they wconsider oyota vehicles in the uture. Overall, most car shop

are not concerned about the longevity o the oyota brand.

Survey respondents considered the most helpul action oyotain resolving issues related to recalls was extending ree schedulemaintenance or up to two years or 24,000 miles, ollowed byoering zero-percent nancing or up to ve years on most pooyota models. Car shoppers rated the $10 million settlemen

with a amily o our people killed in a 2009 crash as the thirdmost-helpul action oyota took in resolving issues related to trecalls.

Toyotas Overall Purchase Consideration Depressed Throughout 2010ccording to data rom the Brand Watch study by Kelley Blue Book Market Intelligence

Toyotas purchase consideration peaked in Q2 2008 due to recordlevel gas prices. oward the end o 2009, the companys gas pedaland oor mat issues were beginning to emerge, and consideration

tarted to decline. However, when oyota launched an aggressivencentive campaign in mid-2010, consideration or the brand began toise.

Feb. 1, 2010:

Toyota announces fix for

accelerator pedal issue.



MARKET INTELLIGENCE ANALYSIS - Toyota: One Year Laterontinued

Toyota Consideration & Saety Perception by Segmentccording to data rom the Brand Watch study by Kelley Blue Book Market Intelligence

Since the sticky pedal and oor mat issues suraced in Q4 2009, oyotas consideration within the non-luxury sedan/coupe/hatchback segment dro4 percentage points and remained depressed throughout 2010.

Q1 Q2 Q3 Q4

2007 54 % 5 5% 52% 51 %

2008 52 % 5 8% 56% 52 %

2009 53 % 5 3% 53% 49 %

2010 45 % 4 2% 47% 44 %

54% 55%

52% 51%52%

58%

56%

52%53%53%

53%

49%

45%

42%

47%

44%

Year-Over-Year Toyota New-Car Consideration

Among Non-Luxury Sedan/Coupe/Hatchback

Shoppers

n addition to lowered consideration or the brand, saety perceptions or oyota among non-luxury sedan/coupe/hatchback shoppers also droppedramatically during the height o the recall. In the latest quarter (Q4 2010), saety perceptions have recovered to Q4 2009 levels.

Q1 Q2 Q3 Q4

2007 8.15 7.76 7.93 8.06

2008 8.31 8.25 7.94 8.23

2009 7.92 8.17 8.07 7.71

2010 6.90 6.79 6.83 7.75

8.15

7.767.93

8.06

8.31 8.25

7.94

8.23

7.928.17

8.07

7.71

6.906.79

6.83

7.75

Year-Over-Year Toyota Safety Ratings

Among Non-Luxury Sedan/Coupe/HatchbackShoppers



Q1 Q2 Q3 Q4

2007 44 % 4 1% 40% 42 %

200 8 38 % 4 2% 37% 43 %

2009 46 % 4 4% 47% 40 %

2010 32 % 3 5% 37% 36 %

44%

41%40%

42%

38%

42%

37%

43%46%

44%

47%

40%

32%

35%

37%

36%


Among Non-Luxury SUV/CUV Shoppers

aety perceptions or oyota among SUV/CUV shoppers have improved in the latest quarter (Q4 2010); however, ratings remain below all prior years.

Q1 Q2 Q3 Q4

2007 7.69 7.71 7.68 8.21

2008 7.97 8.48 7.31 7.50

2009 8.29 7.91 8.30 7.26

2010 6.97 6.58 6.35 7.16

7.697.71 7.68

8.21

7.97

8.48

7.31

7.50

8.29

7.91

8.30

7.26

6.97

6.586.35

7.16


Among Non-Luxury SUV/CUV Shoppers

Consideration or oyota SUVs/CUVs peaked in Q3 2009 right beore the recall, primarily due to increased interest in the Highlander. Consideration 010 has been the lowest on record; however, consideration has increased slowly throughout the year.




Q1 Q2 Q3 Q4

2007 45% 47% 51 % 4 2%

2008 49% 49% 53 % 4 9%

2009 52% 54% 55 % 5 5%

2010 47% 53% 52 % 4 5%

45%

47%

51%

42%

49%49%

53%

49%

52%

54% 55% 55%

47%

53% 52%

45%


Among Minivan Shoppers

aety perceptions or oyota among minivan shoppers have improved in the latest quarter (Q4 2010); however, ratings remain below all prior years.

Q1 Q2 Q3 Q4

2007 8.31 7.81 8.07 8.69

2008 8.12 8.18 7.86 7.60

2009 8.45 7.98 8.15 7.95

2010 7.27 6.93 7.07 7.36

8.31

7.81

8.07

8.69

8.12

8.18

7.86 7.60

8.45

7.98

8.15

7.95

7.27

6.937.07

7.36


Among Minivan Shoppers

oyota consideration in the minivan segment in 2010 surpassed other years. Even with the recalls o 2010, the 2011 Sienna Swagger Wagon campaignenerated additional interest in oyotas minivan.




Q1 Q2 Q3 Q4

2007 31% 35% 36 % 3 9%

2008 36% 34% 36 % 3 2%

2009 33% 31% 34 % 3 1%

2010 30% 27% 35 % 2 6%

31%

35%36%

39%36%

34%

36%

32%33%

31%34%

31%30%

27%

35%

26%


Among Truck Shoppers

oyota saety perceptions in the truck segment also suered and did not recover like other segments in the latest quarter (Q4 2010).

Q1 Q2 Q3 Q4

2007 7.46 7.24 7.57 7.63

2008 6.83 7.10 7.20 7.51

2009 7.60 7.11 7.10 7.33

2010 6.61 6.40 6.00 6.21

7.467.24

7.57 7.63

6.837.10

7.20

7.517.60

7.11

7.10

7.33

6.61

6.40

6.006.21

5.50

6.00

6.50

7.00

7.50

8.00


Among Truck Shoppers

oyota consideration in the truck segment or 2010 peaked or the year in Q3 2010, but then plummeted in Q4 2010 to its lowest level on record.




Toyotas Overall New-Car Trafc Down Six Percent; Model Perormance Mixed

ccording to analysis o new-car trac on Kelley Blue Books kbb.com, year-over-year rom December 2009 to December 2010

When examining new-car shopper activity on Kelley Blue Books kbb.com, oyotas overall trafc is down 6 percent year-over-year. Te perormo various popular models year-over-year is mixed, with the Corolla, Camry and RAV4 being down in trafc, while the Sienna, Prius, Highlandand acoma are up.

hoppers generally moved away rom oyotas recall-laden sedan/small-car segments in 2010, while trafc increased or many o the brands larger vehiclencluding the new Sienna (made popular by the V and Internet sensation Swagger Wagon campaign), the successully redesigned Highlander, and theacoma (which benetted rom increased interest across the pickup truck segment throughout 2010).

Vehicle YoY Change

Camry -15.2%

Corolla -18.4%

Highlander 7.1%

Prius 10.7%

RAV4 -14.4%

Sienna 20.2%

Tacoma Double Cab 4.2%

Toyota -5.9%



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About Kelley Blue Book (www.kbb.com)

ounded in 1926, Kelley Blue Book, The Trusted Resource, is the only vehicle valuation and inormation source trusted and relied upon by both con

rs and the industry. Each week the company provides the most market-refective values in the industry on its top-rated website www.kbb.com, incl

s amous Blue Book Trade-In and Retail Values, and Fair Purchase Price, which reports what others are paying or new cars this week. The compa

lso provides vehicle pricing and values through various products and services available to car dealers, auto manuacturers, nance and insurance co

anies, as well as governmental agencies. Kbb.com is a leading provider o new car prices, used car values, car reviews, new cars or sale, used car

ale and car dealer locations. Kelley Blue Book Co., Inc., is a wholly owned subsidiary o AutoTrader.com.

Te statements set forth in this publication are the opinions of the authors and are subject to change without notice. Tis publication has been prepared fornformational purposes only. Kelley Blue Book assumes no responsibility for errors or omissions.

NDUSTRY ANALYSIS - Toyota: One Year Later

Starting OverJames Bell, executive market analyst, Kelley Blue Books kbb.com

The media assembled or oyotas 2011 press conerence during the Detroit Auto Show sat anxiously waiting or a renewed message o hope or oyo

Advance notice allowed us to know that they would be presenting two new vehicles, seen at the show or the very rst time, that would transorm popular Prius model rom a single shining star in oyotas line-up to a amily o uel-efcient hybrids set to capitalize on its incredibly high market

quity, and possibly help the brand ater its tumultuous year laden with recalls and saety issues.

Underlining the signicance o oyotas rst moment o the New Year back in ront o the

media, no one less than the grandson o the ounder o the company and current PresidentAkio oyoda, took the stage and the spotlight. Rather than beginning with extolling the vio oyotas Hybrid Synergy Drive and its global success since introduction more than a decago, he oered the verbal equivalent o a deep Japanese bow. With phrases such as work tregain your trust, reestablish consumer condence and total corporate commitment, ita unique cross-cultural moment that was inspiring, yet a painul reminder o the uncomoryear oyota had just endured. Trough the last several years, we all had become accustomehearing oyota tout new sales records and market share achievements. Now, with the resho a new year, a new decade, and a new view o the consumer, it is as i oyota also is anew.

oyotas core segment strengths have been under attack by U.S. and Korean manuacturerswith the Chevrolet Equinox totaling almost 150,000 sales in 2010, a 74 percent increaseover the prior year, compared to 170,000 sales or the RAV-4 and a much smaller 15 perce

increase. In an even bigger development, Hyundais all-new Sonata challenged Camrys misize sedan market share and achieved more than 196,000 sales in its rst year, a 64 percentincrease, while the Camry dropped 8 percent. At the same time, the Ford Fusion and FusiHybrid continue to oer compelling alternatives to the Camry and Camry Hybrid, while tSonata Hybrid and Chevrolet Volt are just around the corner.

or oyota to overcome these erce competitors, the company will need to ocus on product design and development in addition to saety to reach the saevels o 2008 and 2009. In many ways, 2010 was a clear year o reckoning or oyota, as assumed notions o quality and overall appeal were called intouestion. However, oyotas challenge is much more than just reestablishing lost consumer condence and trust, as proven by the success o these previo

weak segment competitors. Rather, oyota must use its incredibly deep pool o talent and resources to redevelop its vehicles into objects o desire, in addo regaining the companys reputation as a consumers sae and economic choice.

012 will bring us rereshed versions o oyotas agship Camry and CUV RAV-4, with a new Corolla set to debut in the 2013 model year. It is Kelley BBooks expectation that 2010s year o recalls will reocus oyota on the importance o these key vehicles and use their redesigns as stepping stones towardedemption. All three models should endeavor to deliver what oyota once was known or on a global basis the ability to equal on the segment leadernd then surpass it with sophisticated engineering and efciency. In order to support oyotas reputation or high resale value and economic strength, thompany should consider revisiting production levels and potential demand or the coming year to avoid the damaging impact incentives and rebates canave on residual values. As we drit toward 2016s 35 miles-per-gallon CAFE standards, oyota also has a unique opportunity to use its recognized leade

n hybrid technology and the companys overall experience to exceed expectations. Hyundai has stated that this 35 miles-per-gallon standard is easily wieach, so perhaps it is time or oyota to call its hand and raise the stakes.

n addition, Akio oyoda has a well-publicized passion or speed and exotic cars, and this spirit could help reset oyotas course toward a line-up o excitinnd energizing vehicles that also deliver on the companys long-held reputation or durability and efciency. At the 2006 Detroit auto show, oyotaresented a sports-hybrid concept car named the F-HS that the company may want to revisit. It oten was reerred to in the press as a Prius on sterond given the continued strength o the Prius brand in 2011 and the latest Detroit auto shows announced additions to the Prius amily, this could be a

ossible eye-catching addition. A car like the F-HS could go a long way toward reestablishing oyotas spirit o delivering saety, unexpected value andnthusiasm.

TOYOTAS CHALLENGE IS MUCH

MORE THAN REESTABLISHING

LOST CONSUMER CONFIDENCE

AND TRUST... RATHER, TOYOTA

MUST...REDEVELOP ITS VEHICLES

INTO OBJECTS OF DESIRE...- JAMES BELL

kbb - one year later

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