• Bloomberg


Toyota Motor Corp. was already counting on the revamped Camry to spark a U.S. sales rally. The carmaker’s flagship model is now under additional pressure as a stronger currency and Thailand’s floods cut into profit.

The company reduced its earnings forecast last week by more than 50 percent for the year ending in March, blaming a slump in production after Thailand’s worst floods in almost 70 years. The 2012 Camry was released in October with a goal of boosting sales hurt by the March earthquake and tsunami and retaining its title as the top-selling U.S. car.

“There’s a lot of pressure on that car,” said Maryann Keller, an auto analyst and president at Maryann Keller & Associates. “It’s been reviewed as being competitive within the midsize sedan segment, but not that much better or worse than competitors. Right now, the perceived design leader is Hyundai’s Sonata, and Kia’s Optima is also doing well.”

While Toyota is set to lose its ranking as the world’s largest automaker this year to General Motors Co., the carmaker has said it’s determined to keep the Camry the best-selling car in the U.S., a spot held for 13 of the past 14 years. Rebounding from parts shortages and assembly disruptions may prove easier than overcoming rivals.

“Camry bears the lion’s share of whether they succeed in recovering both market share and profitability” in the U.S., said Larry Dominique, executive vice president of TrueCar.com and former head of Nissan Motor Co.’s North American product planning. “The reality is the best way to gain market share and profitability is new product, and Camry is their biggest.”

The success of Hyundai Motor Co.’s Sonata and Kia Motors Corp.’s Optima as well as Ford Motor Co.’s Fusion means Toyota no longer has the ability to price Camry above segment competitors, Keller said.

“The problem isn’t so much how many units of Camry they sell, but the margin of each vehicle,” she said. “They don’t have the kind of pricing power they once enjoyed.”

U.S. drivers bought 23,440 Camrys in November, 15,668 Sonatas and 9,533 Optimas. While Camry remains the best-selling car in 2011, even after production delays helped cut sales 7.3 percent so far this year, Sonata volume is up 15 percent and Optima deliveries more than tripled from last year.

Toyota doesn’t disclose its profit for the Camry. Neither Keller nor Efraim Levy, a New York-based equity analyst for S&P Capital IQ, who rates Toyota’s American depositary receipts “hold,” had estimates for how much Toyota earns from the car.

“The success of the Camry is very important to Toyota,” Levy said. “It’s similar to Ford’s F-150 pickup, since in each case it’s the single biggest source of sales volume.”

Toyota has set a goal of selling at least 360,000 Camrys in the U.S. in 2012. The company has sold 275,004 in the first 11 months of 2011, leading Nissan’s Altima’s 243,005, which has surpassed Honda Motor Co.’s Accord, at 217,958, for the No. 2 selling car.

The best-selling midsize sedans of U.S. automakers are Ford’s Fusion at 226,445 and GM’s Chevrolet Chevrolet Malibu at 191,774. GM’s top-selling car is the Cruze compact at 215,057.

“We have been increasing the volume of shipments to our dealers since we began production in September,” said Steve Curtis, a spokesman for the company’s U.S. sales unit. “We’ll get as many to customers as possible.”

Camrys for sale in North America are built at Toyota’s plant in Georgetown, Kentucky, and under contract at affiliate Fuji Heavy Industries Ltd.’s Subaru plant in Lafayette, Indiana.

After the quake- and tsunami-related production slowdown in North America that lasted more than five months, Toyota has said it’s now working to build up inventory of Camry and other models as quickly as possible.

“We are running full production on Camry lines as we continue to replenish inventory and meet market demand,” said Mike Goss, a spokesman for the company’s manufacturing unit, without elaborating.

Toyota’s best year for Camry was 473,108 sold in 2007. Between its Kentucky plant and the Subaru factory, the company has said it can produce about 500,000 of the cars.

The automaker estimates that more than 6.8 million Camry models are on the road in the U.S., the largest owner base of any midsize sedan.

Toyota touts the latest version of the Camry as more fuel-efficient than the previous version, with a better ride and handling.

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