Ford is forecast to take over Toyota’s No. 2 ranking in sales
Ford Motor Co. could replace Toyota Motor Corp. as the second-biggest seller of autos in the United States this year as the string of massive recalls for acceleration and braking problems starts to take its toll on the Japanese automaker.
Edmunds.com, the Santa Monica automotive information company, predicted Thursday that Toyota would lose a full percentage point of U.S. market share this year.
Before the recent recalls of about 6 million cars in the U.S., Edmunds estimated that Toyota would capture about 17.6% of the American car market in 2010. Automakers are expected to sell about 11.5 million vehicles this year.
Edmunds now estimates that Toyota’s share will fall below 16.5% as buyers look to other manufacturers.
Toyota’s “whole existence is based on the perception in the eyes of the consumer of high quality, high reliability and safe vehicles. If that goes away, they are like everyone else,” said B. Craig Hutson of Gimme Credit, a corporate credit research firm.
General Motors Co., Ford and Honda will pick up most of Toyota’s lost sales, the Edmunds report said. Nissan and Hyundai should also see extra sales. Ford is now expected to nose out Toyota by winning 16.6% of the U.S. market. GM will remain the top seller at 18.1%, Edmunds said.
One Edmunds analyst believes that Toyota and other automakers underestimate how quickly negative news spreads in today’s wired society and how deeply that hurts brand image.
“Car companies, including Toyota, don’t really understand the cacophony of noise out there will affect them,” said Jeremy Anwyl, chief executive of Edmunds.
He said the Toyota recall episode could mark a change in how the auto industry builds cars. One result will be higher prices.
“Automakers may have no choice but to devote more resources to safety in the future. Cars may be equipped with more on-board diagnostic sensors, be subject to more testing and be built with higher-quality parts,” Anwyl said.
Meanwhile, less demand is translating into lower sales prices for Toyota products. On average, the prices of new Toyota models that are part of the recall have dipped 0.5%, or $150, this year, according to Edmunds. Dealers are selling used vehicles subject to the Toyota recall for 3% less. And owners trading in their recalled models are collecting 6% less than before the recalls.
