February 28, 2014 at 11:04 pm

Ford narrows sales gap with Toyota

Auto leader loses ground to natural disasters, recalls and rise of Fusion, Escape, analysts say

Ford Motor Company (Stan Honda / Getty Images)

The Ford brand is closing in on Toyota as the favorite of retail auto buyers, a sign of rising popularity of the Fusion midsize car and Escape sport utility vehicle, and of growing dismay with the Japanese manufacturer.

Toyota Motor Corp.’s namesake brand, a default choice of a generation of car buyers who admired its high quality, lost ground during the past six years amid recalls, natural disasters and stiffer competition.

Its share of the U.S. retail market fell to 13.5 percent last year from 16.3 percent in 2008, according to data provided to Bloomberg News by IHS Automotive using Polk vehicle registration records. Toyota’s 2.8 percentage point loss matched the gain of Ford Motor Co.’s main brand, to a 13.2 percent share, over the same period.

Retail registrations are the best measure of the tastes of individual car buyers because they exclude bulk fleet sales to corporate and government customers. Toyota dominated the retail market before the recession, with top sellers such as the Camry sedan and Corolla compact. Those models now face tougher competition as car shoppers favor Ford models including the Fusion, which draws frequent comparisons to an Aston Martin, and a restyled, fuel-efficient Escape. Hyundai Motor Co. and Subaru, the auto unit of Fuji Heavy Industries Ltd., are also gaining ground.

“Before 2010, Toyota’s image was bulletproof, and while it is still strong, it’s not rock solid and as perfect as it was before,” Tom Libby, auto analyst for IHS Automotive, said in an interview. “It now appears their march forward has been slowed.”

The leader in total U.S. sales is General Motor Co., which has four brands, including Chevrolet and Cadillac. Ford, including its fleet sales and Lincoln brand, is No. 2, followed by Toyota, which overtook Ford in sales by company from 2007 to 2009 before falling back to the third position.

Those rankings will hold again when February’s U.S. sales results are announced Monday, according to analysts surveyed by Bloomberg. Toyota, GM and Ford may all report declines, while Chrysler Group LLC and Nissan Motor Co. post gains, according to analysts surveyed.

Light-vehicle sales in the U.S. may rise 0.4 percent in February to almost 1.2 million, the average of six analyst estimates. The annualized rate, adjusted for seasonal trends, will probably remain at 15.3 million, the average of 10 analyst estimates, the same as in February 2013.

Toyota’s once-pristine image was tarnished, Libby said, when it recalled more than 10 million vehicles for problems related to unintended acceleration in 2009 and 2010, involving defective floor mats and accelerator pedals. The world’s largest automaker lost sales in 2011 after an earthquake and tsunami rocked Japan and shut down factories.

Toyota’s U.S. retail market share fell to 12.4 percent in 2011, recovered to 13.7 percent in 2012 and declined again last year, the IHS data show.

“A fair number of people — I was among them — thought that after the recall situation and after the tsunami that Toyota would just resume where they were,” Libby said. “Lo and behold, they have not.”

As total U.S. auto sales rose, Toyota has increased sales by more than a half-million vehicles in the last two years. That is more important than its retail market share, said Mike Michels, a Toyota spokesman.

“Share doesn’t pay the bills, sales do — that was and is our focus,” Michels said. “Toyota recovered an enormous amount of volume after the recession and tsunami/Thailand floods impacted periods.”

Toyota will probably maintain its slight retail lead over Ford this year thanks to redesigns of its Corolla, RAV4 small SUV and Highlander SUV, said Jeff Schuster, an analyst with researcher LMC Automotive in Troy. The Camry, Toyota’s top seller, will also receive minor design changes late this year, he said.

“Ford’s going to give them a run for their money over the next couple years, but at this point we don’t see them overtaking Toyota,” Schuster said.