How Toyota protected Camry's crown

DALLAS — The word in dealer showrooms in 2017 was that cars are a dying breed, taking up valuable floor space from cute-utes, crossovers and SUVs whose size, stance and utility represent an evolutionary leap of the species.

But not so much at Toyota and Honda dealerships, where overlapping generations of the venerable midsize Camry and multiple iterations of the compact Civic battled for superiority among consumers who still like to sit low to the ground.

Combined, the cars moved just over 764,000 units last year in a sales race that pitted the 15-year champion Camry against the 10th-generation Civic, which has been on a sales super-cycle since its 2016 launch.

Going into December, the Honda was outselling the Toyota by around 2,000 units, but the finish wasn't even close. The Camry had its best December ever — even compared with the good old days — moving more than 43,000 units, a 30 percent gain from a year earlier. That gave it a nearly 10,000-unit advantage for the year over the Civic, whose sales stagnated in December, and extended its reign as the nation's best-selling car. (Toyota also snagged the crown for the year's best-selling nonpickup vehicle, the RAV4, which outsold the Camry by more than 20,000 units and edged out the Nissan Rogue.)

The redesigned 2018 Camry "has reignited the car segment," said Jack Hollis, general manager of Toyota Division, on a conference call last week. "You look at our investments in great products, and great products sell, so we still feel confident in the car market."

Defending the Camry's crown may have been especially important for Toyota given the launch of a redesigned model that it has touted as a substantially different direction for the staid family sedan. It rides on a new global platform that Toyota says allows for more spirited driving.

"I think they want to get as much visibility for the car as possible, and this is one way to do it," said Matt DeLorenzo, managing editor at Kelley Blue Book.

Besides the fresh product, Toyota had a few marketing tricks that got it over the finish line first, according to analysts.

Toyota was discounting the outgoing seventh-generation Camry while bringing in the more boldly styled eighth generation beginning in September. One Texas dealer said that for buyers who couldn't swing the 2018 model, he was able to shift many into a 2017 with thousands of dollars off the sticker. In some cases, Toyota was offering $3,000 cash back or zero-percent financing for 72 months on 2017 models.

And while both Toyota and Honda tend to be among the most restrained in the industry on sales incentives and fleet sales, Honda is the more disciplined of the two, keeping tight reins on production and forswearing bulk sales to rental-car agencies.

One industry insider who crunched the numbers said Toyota definitely used fleet sales and incentives to drive its 2017 Camry sell-down toward the end of the year. But he said Toyota's incentive levels for December weren't out of the ordinary or out of line with segment averages.

Record Camry sales in December represented almost entirely 2018 models, said Toyota spokesman Scott Vazin.

The redesigned model was "exceptionally well-received by consumers," backed by broadcast advertising and highlighted in the year-end "Toyotathon" sales promotion.

The 2018 Camry sport grades — the SE and XSE — exceeded expectations, and helped attract "a younger and slightly more male buyer" than for the 2017 model, Vazin told Automotive News.

Still, the Civic offered tough competition and ended the year with a 2.8 percent sales gain over 2016, whereas Camry sales actually slipped by 0.4 percent.

The Civic can be had as a two-door coupe, a sedan, a hatchback and a track-ready Type-R edition that is new to the U.S. It's technically one class below the Camry, but it nearly bridges the gap in terms of size, while also providing some cost savings to buyers who are downsizing in response to higher average new-vehicle prices, DeLorenzo said.

The Camry's direct segment competitor is the Honda Accord, whose redesigned version came later in the year. Accord sales sank 35 percent in December as inventories of the outgoing model thinned.

With the 10th-generation Accord now generating accolades for its fresh styling and driving dynamics, the 2018 car race may be even more hotly contested.