LOS ANGELES -- For 11 straight years, the Toyota Camry has carried the powerful marketing message of being America's best-selling car. But with the competition nipping at the Camry's heels, Toyota officials must contemplate how far they're willing to go to retain the title.
For now, the directive is to do whatever it takes. The Camry is less than two years into its model cycle, and already Toyota is piling on incentives and cutting fleet deals to stay ahead in the race.
"We will do what is necessary to get the vehicle into the hands of new and loyal customers," Toyota Division General Manager Bill Fay wrote in an e-mail. "Incentives on Camry will remain as competitive as they need to be."
The Camry is the only one of the four top-selling mid-sized sedans to receive increased incentive spending this year, although the other three were in sell-down mode at this time last year. Except for February, Toyota has dialed up incentive spending per unit on the Camry each month this year, up from $2,300 in January to $2,750 in May, according to TrueCar.
Meanwhile, Toyota's fleet deals are running ahead of the pace set last year, when Toyota made massive "make good" sales to fleet customers who had to wait out 2011's tsunami-related shortages.
That has some Toyota insiders concerned about the impact on the Camry nameplate's long-term value. The Camry's 36-month residual value is near the top of the segment, at 54.4 percent for the 2013 model year, compared with the segment average of 50.9 percent, according to ALG. Only the Honda Accord is higher, at 55.6 percent.
But some Toyota insiders worry that continued incentives and fleet deals could put the Camry's values into a downward spiral. They say sales meetings often revolve around the potential trade-offs of the Camry ceding its lead in order to preserve its residual values. If incentives and fleet sales are already this high, some insiders ask, what will happen in two years, when the Camry is closer to the end of its life cycle?
A similar debate is playing out broadly across the competitive mid-sized sedan segment, with Toyota's chief competitors taking different paths in search of sales. The Nissan Altima, Ford Fusion and Chevrolet Malibu all generated more than 30 percent of sales from fleets in the first four months of the year, according to R.L. Polk & Co. data analyzed by Edmunds.com. Honda, meanwhile, has held the line, with fleet sales of the Accord running at 1 percent of the total, according to Polk.