Motor Company (TYO:7203) is moving
aggressively to stay on top of the hybrid market even as fellow veterans like
Ford Motor Company (F) and plucky new players like
Hyundai Motor Company (SEO:005380) look to
I. The New Camry
i. Built in America with Non-Union Labor
Tuesday was a big day for the Japanese automaker as it unveiled its latest and
greatest Toyota Camry, a vehicle which has been on top of American sales for
mid-size vehicles for thirteen of the last fourteen years. Alongside the
traditional gas engine models, the Camry family has grown, with the addition of
a second hybrid model.
To date Toyota has sold 15 million Camry vehicles since the platform's 1983 launch, with 9.7 million of those sales coming in North America. Most of the Camry vehicles will be built at Toyota's Georgetown Kentucky plant, one of Toyota's 13 North American plants. Thus far the Georgetown plant has built 6.7 million Camry vehicles. The plant employs 7,000 non-union employees and has won more JD Power Quality awards than any other North American assembly plant, beating out all of the UAW plants.
The first production 2012 Camry rolled off the line at Georgetown today, driven
by Akio Toyoda, President of Toyota and great grandson of company founder
Sakichi Toyoda. Mr. Toyoda bragged, "This car has become a symbol of
Toyota's success all over the Earth, so you might say this is an opportunity to
show the world yet again, what Toyoda is all about.
Mr. Toyoda says he is all about "product, product, product" and
reports taking a very hands on approach with the new Camry, which would make
even infamous corporate perfectionists like Steven P. Jobs proud. He
comments, "I personally tested the new Camry until I was satisfied it
outperformed its competitors. And I can tell there's no comparison."
Perhaps alluding to Toyota's uncharacteristic
wave of recent recalls, he comments that he looks forward to "continue
earning the trust and respect of the American community."
ii. Tech Specs on New Camry
However, you feel about the looks of the new Camry, it's easy to respect the
price. While the entry level Camry L is getting bumped $750 to $21,950
USD MSRP, otherwise prices have dropped on the general lineup -- in some cases
by a lot. The LE model has dropped $200 (for the base inline-4) to $22,500
MSRP, the SE has dropped $1,000 to $23,000 MSRP and the XLE has dropped a
whopping $2,000 to $24,725 MSRP.
The new vehicles stick with the 2.5L inline-4 engine (dual VVT-i) that was
rolled out in the previous 2009 refresh as a replacement to the older 2.4 L
inline-4. The 178hp engine is now standard for all models, a perk which
was before only granted to the pricier LE model. City/highway gas mileage has been bumped from
22/32 mpg in the previous generation to 25/35 mpg, this time around -- a modest
Speaking of looks, while the Camry maintains the same 2006 platform (XV40), the
exterior has been subject to a drastic makeover, with 100 percent of the sheet
metal remodeled. The internals have also been worked on -- Toyota says 90
percent of the parts have been re-engineered. In total 80 percent of the
parts are sourced from American suppliers, with Toyota claiming the Camry to be
the "most American" mid-size car.
iii. Sales and Marketing
The new models (sans the hybrid launch October 3). Toyota says its
average Camry buyer is 60 years old, but that it wants to attract a more
youthful crowd this time around.
Toyota has cause for concern. Rocked by parts
shortages due the Fukushima tsunami and earthquake, the company briefly
lost its top spot in monthly sales to General Motors Comp.'s (GM)
2011 Chevy Cruze, which caused some to speculate that Toyota could lose its
sales crown to an American car company for the first time since the
1996 Ford Taurus' one year reign atop sales charts.
But Toyota is now back ahead of the Cruze, and insists it will be at full
production capacity, by the time the Oct. 3 launch rolls around.
Toyota is looking to cap its comeback by having the Camry serve as the pace car
at the Daytona 500 NASCAR event. It also plans to market the vehicle with
pricey Super Bowl ad placements.
II. Twins Are Born
i. The Hybrid Specs
The hybrid Camry launch will be delayed "approximately 30 days" from
the other models, but when it launches, Toyota will have twin hybrids in the
brand for the first time.
The new entry level LE hybrid drastically improves fuel economy, bumping it
from 31/35 mpg city/highway to 43/39 mpg -- an increase of approximately
30 percent in city gas mileage. The XLE hybrid offers a respectable 41/38
mpg. Horsepower has jumped to 200hp from 187hp combined horsepower in the
Much of improved gas mileage comes thanks to weight reductions. Toyota
has shaved over 200 lb off the weight of the vehicle. The 2011 hybrid
weighed 3,680 lb. The new SE hybrid weighs 3,417 lb, while the XLE weighs
Still Toyota manages to squeeze an industry-leading 10 airbags into the
ii. Sizing Up The Competition
Toyota looks to double its hybrid take rate from approximately 5 to 6 percent
of sales to be between 11 and 12 percent, according to Toyota officials we
And with its new low price and drastically improved mileage Toyota just may be
able to meet those goals.
The LE hybrid shaves $1,150 off the MSRP of the previous model, placing the
cost of ownership at a modest $25,900. An XLE costs $27,400 -- just
slightly more than the previous Camry Hybrid -- but contains many luxury perks
that the former model didn't, most significantly the Entune infotainment system
(more on this in a separate, upcoming piece).
The hybrid squares off against the Ford Fusion hybrid, which starts at $29,935,
and worse yet features a slightly inferior 41/36 mpg. Another significant
challenger is the 2012 Hyundai Sonata Hybrid, which is roughly comparable in
price at $26,545 but only gets 35/40
mpg highway/city. Likewise, the 2012
Optima Hybrid from Kia Motors Corp. (SEO:000270)
starts at $27,250 but only gets 36/40 mpg city and highway.
Thus the market logic goes something like this -- Toyota and Hyundai/Kia are
close in terms of the cheapest hybrid entry price, but Toyota is a ways ahead
of Hyundai, Kia, and Ford in mpg.
Toyota is still sticking it out
with nickel-metal hydride (NiMH) batteries, when competitors Hyundai
and Honda have switched to lithium-ion batteries. But for now, near the head of the pack in
price and the top in mpg in this hybrid segment, it's hard not to argue that
the new Camry Hybrid is an appealing proposition.