Toyota Becomes No. 2 in U.S. Sales

By Sholnn Freeman
Washington Post Staff Writer
Friday, January 4, 2008

Ford was knocked from the No. 2 position in the U.S. auto market, outmaneuvered by Toyota's surging sales of small cars and gas-electric hybrids, according to year-end figures released yesterday.

U.S. new car sales last year slid to 16.1 million in 2007, the lowest level in a decade. The figure fell short of the total for the previous year by about 400,000.

Industry officials said they expected even slower sales in the coming months because of the high price of oil and anxiety over falling home prices and increases in mortgage foreclosures.

At Ford, U.S. sales fell 12 percent from the year before, and December sales were down 9.5 percent from the previous year, according to research firm Autodata. Ford's lock on the No. 2 spot behind industry leader General Motors dated back75 years.

Ford blamed its sales decline on decisions to discontinue the Taurus and terminate a line of slow-selling minivans. Jim Farley, Ford's new marketing chief, said the automaker would continue to be less dependent on truck sales, keeping its inventories balanced and decentralizing its marketing.

Farley said Ford would accelerate plans for bringing out new models, particularly passenger cars developed in Europe, and continue to try to reconnect with customers who have stopped shopping for Ford-brand models.

U.S. automakers are under stiff pressure as the market shifts to more-fuel-efficient vehicles. Japanese companies gained market share in 2007 with improved sales of subcompacts like the Honda Fit and Toyota Yaris and gas-electric hybrids such as the Toyota Prius, which had sales growth of 69 percent.

For the year, Toyota's sales climbed 3.1 percent compared with 2006. Honda's sales grew 2.8 percent.

"The domestics over the past year have been late to the party -- all of the domestics -- with fuel-efficient vehicles," said Mark Rikess, chief executive of the Rikess Group, an automotive consulting firm in Burbank, Calif. "You see market share improving for Toyota and Honda, and it's primarily among the fuel-efficient vehicles that they have marketed for years and are therefore at the top of the consideration list."

At GM, sales were down 6 percent for the year and 4.2 percent in December. Though GM still ranks first in the U.S. market, it is in a heated battle with Toyota for the top spot in worldwide auto production.

Jesse Toprak, an analyst at, said GM and Ford showed improvements in certain models, including the Ford Escape and Ford Edge sport-utility vehicles, and GM's Cadillac CTS, Chevrolet Malibu and Buick Enclave.

Chrysler's annual sales dropped 3.1 percent in 2007, but rose 0.5 percent in December. James Press, Chrysler's president and vice chairman, said the automaker is planning for a weaker market in 2008.

"It's still contracting," Press said. "You have to plan for the worst and hope for the best. We are going to have to work hard to earn the customers' business."

Rikess said the deck remained stacked against U.S. automakers, noting that Japanese companies sell many more models that consumers consider superior to what comes out of Detroit. He said automakers need to cut back the number of vehicles they make to better focus their marketing dollars.

Detroit's one right move in 2007 was to raid Toyota's management bench, he said.

Chrysler hired two former high-ranking Toyota executives, including Press, to lead marketing and product planning. Ford tapped Farley, an up-and-coming marketing executive at Toyota.

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