Toyota Camry incentives and fleet sales cranked to keep sales crown, insiders worried

Mon, 01 Jul 2013

We've been watching for some time now as Toyota has piled more incentives on the hood of its Camry sedan, and Automotive News reports that the we're not the only ones with raised eyebrows. The current Camry hasn't even been on the market for two years, but the family sedan segment is more hotly contested than it has been in years. It's that high level of competition that has led the automaker to uncharacteristically add more money on the hood in order to assure it maintains its long-held title of America's Best-Selling Car, a mantle it has owned for a dozen years. It's ramping up fleet sales, too.

According to the analysts at TrueCar, Toyota has bumped incentives per unit every month this year, now totaling some $2,750 as of May, a 38-percent hike over this time last year. That's more spiff money than the segment's other best sellers, the Nissan Altima ($2,400), Ford Fusion ($2,300) and Honda Accord ($1,400), all of whom have actually decreased their incentive spend by 20- to 40-percent over the same period.

The ramp up in incentive spending and fleet sales has analysts concerned that Toyota will tarnish the Camry's historically sterling resale value. ALG pegs the 2013 Camry's current 36-month residual value at 54.4 percent, well ahead of the segment average's 50.9 percent (but shy of the Accord's 55.6 percent). However, analysts are concerned that as the current generation ages, their resale values will eventually plummet if incentives continue to increase as Toyota looks to keep the Camry's best-selling car crown going forward.

Automotive News cites R.L. Polk data in noting that many of the family sedan segment's heavyweights are running above 30-percent fleet sales, including the Altima, Fusion and Chevrolet Malibu, while the Camry is expected to finish the year under 15 percent. Even so, Camry sales to fleets are ahead of this time last year (despite 2012's numbers having sizable catch-up sales after 2011's tsunami-tightened supplies). Honda has long touted its low fleet sale percentage, and the new Accord is no different – its fleet sales sit at 1 percent.

By Chris Paukert