FARMINGTON, PA – The Toyota Camry continues to hold onto its title of best-selling midsize sedan in the U.S., delivering 207,626 units in the year’s first half, despite falling 2% from year-ago.

While executives are not worried, they are taking notice of the increased competition attracting midsize-sedan buyers.

Bill Fay, general manager-Toyota Div. in the U.S., is not concerned by the Camry's mild decline and the higher-than-usual incentives needed to sell the car.

"We've increased incentives over the last year, but it's not out of line with where the segment is,” Fay tells WardsAuto at a Tundra pickup media event here. “We're still below where the industry is” on incentive spending.

Fay notes the much-lauded, redesigned ’13 Ford Fusion that debuted in third-quarter 2012 is offering higher incentives than the current Camry, which hit the market a year earlier. However, Edmunds.com reports Camry incentives through June averaged the same as the Fusion's: $2,064.

However, the Camry’s first-half spiffs were 254.5% higher than those of its biggest rival, the Honda Accord. The average Accord incentive was $583 in the year's first six months.

But the Camry’s average spend was 41.0% less than that of the Chevrolet Malibu, 11.8% lower than the Hyundai Sonata and 4.1% below the industry’s average of $2,153 for midsize sedans, Edmunds reports.

Fay says Toyota will continue to use incentives tactically and believes the auto maker has a good lifecycle plan for the Camry.

“We're comfortable where it's at,” he says of the Camry’s status. “Obviously, there's some better competition, as everybody has launched their newer products. I think (that’s) good for the customer, good for the segment."

Fay says a big part of the reason the market is seeing increased incentives on some midsize sedans is the dominance of light-trucks sales. "I think we're all pushing these great new midsize cars, in a segment that's still the biggest in the industry. (But while) it has a lot of activity, it doesn't have the growth it had last year."

WardsAuto data shows Upper Middle car sales rose just 15.3% through June from year-ago, compared with the imported Luxury Small cross/utility vehicles segment, which surged 126.5%. Large CUVs climbed 40.4% and Small CUVs grew 32.4%.

When asked if the Camry will be refreshed soon, Fay says Toyota will detail such an effort at its annual dealer meeting in Atlanta in a few weeks.

Through June, Toyota Div. sales, including the Scion brand, rose 5.6% from year-ago. With the addition of the Lexus luxury brand, full first-half results grew 6.0% to 1.1 million units.

Fay says deliveries so far are tracking Toyota's plan for 2013, which predicts a 15.3 million-unit seasonal annually adjusted rate for the industry, although 15.5 million is not out of the question.

"Right now, it feels like it might be a little bit better than (15.3 million) by the end of the year,” he says. “It wouldn't surprise us if it was the mid-15s. I think we're pleased with the first half."

Toyota's Avalon large sedan and RAV4 midsize CUV, which debuted late last year and early this year, respectively, drove much of the brand's growth.

For the remainder of the year and heading into 2014, the auto maker is counting on several key redesigned products to increase sales. These include the Corolla compact car, due in the fall, and the Highlander large CUV, due early next year.

But keeping the Camry No.1, as well as seeing the Prius family gain a bit more traction, also is in the cards, Fay says.

cschweinsberg@wardsauto.com