The Ford (NYSE: F) brand outsold the Toyota (NYSE: TM) brand in 2010. That crown has to be worth something. Ford makes popular, well-designed cars. Toyota’s image has been hurt by millions of recalls and charges that it knew about defects long before those recalls.
Another piece of news about 2010 car sales is that Lexus, the luxury car division of Toyota, beat BMW and Mercedes in unit sales at the high end of the market. US luxury cars did not do terribly well. Lexus has now been the top-selling luxury brand in the US for eleven years in a row. Lost in the celebration is that fact that the average price for a Lexus is $42,794. The average price of a BMW sold in the US last year was $52,255. BMW almost certainly has a better profit margin on the cars it sells.
The car sales research firm Edmund’s reports that “the average automotive manufacturer incentive in the U.S. was $2,528 per vehicle sold in December 2010, up $64, or 2.6 percent, from November 2010.” The average true cost of incentives for a Chrysler-built vehicle was $3,349. That number has been rising steadily. Toyota may be in trouble, but its had the lowest true cost of sales incentives of the major car companies in December–$1,983. Toyota sells fewer cars now. It probably makes more per car than Chrysler does.
The race for the top of the car sales ladder caused Toyota to increase its production so that it could pass GM as the No.1 car company in the world. VW says it plans to take that top spot. The Germany car company may reach its goal. But, it could cost a lot of money.
Douglas A. McIntyre
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