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Toyota May Fall in Sales Ranks, Honda and Ford Predicted to Benefit Most

February 13, 2010
2 min to read


Analysts predict Toyota Motor Corp.'s big recalls could cost the Japanese automaker a point of market share or more this year, with Ford Motor Co. and Honda Motor Co. benefiting the most from Toyota's troubles, reported The Detroit News.

"It now seems clear that Ford will overtake Toyota to reclaim its position as the second biggest automaker in the U.S. market," said Jessica Caldwell, senior analyst at automotive research firm Edmunds.com.

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Ford lost its longtime U.S. second-place ranking in 2008.

Edmunds expects Toyota's U.S. market share to fall this year to 16.45 percent from 17 percent in 2009. Prior to the Jan. 21 recall of 2.3 million Toyota vehicles to fix accelerator pedals that could stick, Edmunds forecast its share would rise to 17.6 percent.

Nissan Motor Co., South Korea's fast-growing Hyundai Motor Co. and General Motors Co. also are likely to take some of Toyota's lost sales, analysts said.

"This recall crisis will probably cost Toyota at least one percentage point of market share in the U.S.," said Jesse Toprak, an analyst at pricing firm TrueCar.com. He estimates Toyota's share this year will fall to 16 percent.

Based on 2009 sales, a point of market share represents just over 100,000 light vehicles.

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Toyota officials say the recalls are affecting sales but it's too early for the company to assess the full-year impact.

Deutsche Bank analyst Kurt Sanger said the loss of one point of share would cost the company between $900 million and $1 billion in annual pre-tax earnings.

Sanger's estimate did not include the effects of declining pricing power resulting from damage to the Toyota brand and higher discounts this year.

Most analysts estimate Toyota's incentives will rise to $2,000 per vehicle, on average, from about $1,400 last year.

Toyota dealers are offering cash, loyalty coupons of around $500, and low financing rates to retain customers. But analysts say Detroit rivals have increased incentives even more to capture prospective Toyota customers.

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Toyota's market share is expected to drop dramatically in February because the company can't sell recalled models until pedals have been checked and repaired.

Depending on how fast its U.S. dealers can make the repairs, Toyota could lose anywhere from three to nine points of market share this month, Toprak said.

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