Accord Closing In on Camry

The market battle between Toyota Motor Corp.’s Camry and Honda Motor Co. Ltd.’s Accord midsize passenger cars has taken a turn in Honda’s favor, as the Accord has gained ground on its rival, the No.1 car sold in the U.S.

Just 19,199 units separate the two for the first six months of 2009, Ward’s data show, with 150,242 units of the Camry delivered through June vs. Accord’s 131,043.

The first-half margin is the smallest since 2003. The Camry finished that year with a 15,546-unit advantage.

But Honda has been closing the gap for the past two years. In 2008, Camry bested Accord by 63,828 units, down from 80,877 in 2007 and 94,004 in 2006.

In the 1980s, and for much of the 1990s, the Accord was the king of the midsize-car segment, regularly outselling its rival by as much as 106,875 units in 1992.

But the Camry slowly gained ground, and by 1997 it ended Accord’s reign, with total sales of 397,156 units to the Honda’s 384,609. In an anomaly for this decade, Accord outsold Camry by 24,269 units in 2001.

Although somewhat panned by reviewers when it debuted as an ʼ08 model, mainly because of its increased dimensions, the current-generation Accord is picking up steam – or rather, it has been less negatively affected by the recessionary market.

In the first six months of 2009, Accord demand has slipped 36.3% from like-2008, while sales of the higher-volume Camry have slid 37.4%, Ward’s data show.

Accord, redesigned for ʼ08, has weathered market downturn slightly better than Camry.

Toyota officials point to more aggressive Accord incentives as the reason for Honda’s gain, but both auto makers have been relying more heavily on spiffs in recent months.

In April, “we had Honda Accord (sales)…spike over 50%, and we chose not to chase that because we're staying on our overall plan (of not increasing incentives),” Bob Carter, group vice president and general manager-Toyota Motor Sales U.S.A. Inc.’s Toyota Div., said in May.

The Accord series had an average $1,617 incentive in April, according to Edmunds’ True Cost of Incentives, four times the $403 in subvented interest rates, lease programs, and dealer/consumer cash, all factored into the TCI figure, in April 2008.

In recent months, Accord incentives have increased to 18-month records, with $1,884 offered off the model in May and $2,183 in June, Edmunds says. In 2008, Accord spiffs were well below $1,000 most months.

Meanwhile, Toyota’s has had more than $1,000 on the hood of every Camry many of the past 18 months, with incentives hitting a high of $1,901 last December. Camry’s June spiff of $1,538 is down from May’s $1,942 and the lowest since October 2008, Edmunds says.

“While we don’t publicly disclose incentives, we can say that as one of our core products it’s important for Honda and its dealers to engage in marketing programs that keep Accord moving given the current market conditions,” says American Honda Motor Co. Inc. spokesman Sage Marie. “We’re careful to avoid the sort of customer cash incentives and rebates often employed by our competitors that can have the tendency to erode residual values and impact overall cost of ownership.”

Marie states the majority of Accord sales are retail, as Honda has a longstanding policy of not selling Accord to rental fleet companies, as does Toyota with Camry.

According to Kelley Blue Book, the Accord was the most researched vehicle on its website, KBB.com, in the first half of the year. The Camry placed third, with Honda’s compact Civic sedan/coupe slotted in between.

Kelley Blue Book spokeswoman Robyn Eckard says the Camry was June’s most researched vehicle on KKB.com, however.

“Facelifts and redesigns and new introductions (more) than anything else” drive search inquiries on the site, Eckard says, with sales promotions a second factor.

The Accord is the newer of the two vehicles. The Camry last was revised as an ’07 model.

While Toyota is putting the Camry’s coupe variant, the Solara, out to pasture, Honda last week announced it would introduce a cross/utility vehicle variant of the Accord, the Accord Crosstour, this fall in the U.S., joining the Accord coupe and sedan.

The Crosstour is expected to compete with Toyota’s Camry-based Venza CUV, which if included in Camry’s sales would increase the gap with the Accord by 20,463 units this year.

Honda earlier killed the hybrid-electric version of the Accord but Toyota maintains its Camry Hybrid.

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