Over the past month, I have been watching with interest as announcement after announcement has been coming out of Toyota, with regards their line up in 2024. Specifically I have been reading between the lines to try work work out the fate of the Toyota Camry.
NAGOYA, Japan -- Toyota Motor plans to discontinue sales of the Camry sedan in the Japanese market, focusing on countries where the automaker's 43-year-old flagship model remains popular.
Toyota has notified Japanese dealerships that it will cease production of the Camry for domestic customers at the end of the year. Production will continue for exports.
Domestic sales will end in phases, and Toyota already has halted taking most new orders. New Camry models under development will be sold exclusively to foreign markets.
- Nikkei Asia, 23rd Mar 2023
The announcement that Toyota plans to discontinue sales of the Camry sedan in the Japanese market, leads me to believe that Australia will also see the Camry discontinued almost simultaneously. Australia and New Zealand are among the very few Right Hand Drive markets where Camry is sold, and seeing that Australia has little power in the decision making process and that New Zealand actually has none, ending production for Japan means that the supply of stock for the antipodean countries would be halted immediately. I see no conceivable way that Toyota would contract the building of Camrys to its North American plants for Right Hand Drive markets because there is zero business case for it.
If you look at the VFACTS data for March 2023, then you'll see that the future is very grim for Camry. March 2023 marked the very first time in Australian automotive history that no sedans, no wagons, and no hatchbacks, appeared in the Top 10 of car sales for the month. In every previous month on record, at least one "car" has finished in the Top 10.
March 2023 was headed by the Toyota HiLux, Ford Ranger, and Isuzu D-Max; with the next seven cars on the list being SUVs. The Camry was so far down the list, that it doesn't even lead its own segment any more; and just 548 units were sold in March 2023. This is a far far cry from the days when the likes of Falcon and Commodore sold more than 10,000 units in a month. This is a whole magnitude of order smaller and then half again.
Where did it all go wrong? The entire market for kids under the age of 25 buying new cars, is practically non-existent now. We don't pay kids proper wages anymore and what little wages we do pay them, we now scrape back in accelerated rental payments. The Ford Mustang was famously able to sell more than 83000 units per month every month in 1964, making it the only car to shift more than a million units in a calendar year. Why? Because wages were still rising and not quite 2/5ths of all sales were to people under the of of 25.
Related to this is the fact that cars are being bought by slightly older people, they are also bought by fatter people¹. Fatter people demand bigger cars that are easier to get in and out of. They also demand taller cars to get in and out of. You can also massage people's ego by selling them a bigger thing. If people believe that they are doing better by their family in terms of safety then just the perception is enough to get people to shift their buying intentions.
The second reason why trucks have eaten the top part of what used to be sedan and ute sales is that we don't pay kids proper wages anymore and what little wages we do pay them, we now scrape back in accelerated rental payments. This has meant that the people who are more likely to buy a new vehicle, are tradies because they can write off the purchase price of that vehicle on tax. A family who would have bought a sedan or wagon, can not. What happened in this respect, is that trucks suddenly acquired four doors, not because people want to transport people to the worksite but because tradies want to cart around their families at the weekend. I have a sneaking suspicion that the amount of actual tradie's vehicles being sold, that is two-door trucks, remained pretty constant.
Car makers are not charities. They purely chase profits. Why bother selling a $40,000 motor car when you can sell a $60,000. If a similar thing sells for $60,000 and you shift 2/3rds of the units, then the total revenue collected is identical². The thing is that there is practically no difference in input costs between a $40,000 and a $60,000 but the difference is how many units that you can shift to the general public. Sedans became trucks; wagons became SUVs.
Where does that leave Camry?
Camry sales are almost entirely dominated now by taxi companies who want to buy them because of the hybrid drivetrain. Hybrid Camrys survived the SUVification and basically now occupy the same place in the market as LPG Falcons did. VFACTS data handily tells us that of the 548 Camrys sold in March 2023, 544 of them went to ABN holders. This means that just 4 Camrys in Australia were sold to private persons in March 2023.
I think that the final nail in the coffin for Camry in Australia was hammered in by Toyota with this announcement:
https://global.toyota/en/newsroom/toyota/39070994.html
TOYOTA is releasing details on three new Crown models―the Sport, Sedan, and Estate―today, following the Crown (Crossover type) which was launched last year. The existing Crown website will be updated with information on features such as powertrain and design.
- Toyota, 12th Apr 2023
Taxi Companies can cope perfectly well with the hybrid RAV-4. However, if they want something a bit posh then there is a very solid market case to discontinue Camry and just sell Japanese Domestic Market Crowns in Australia. If cars are built to meet the Australian Design Regulations with regards side-impact intrusion bars, then they will already meet the rest of the world's safety regulations. I can see Japan tooling up to meet this from the outset, axing Camry, and giving us Crown instead, at a slightly higher price than Camry was. Probably taxi companies will be able to order a spew-spec Toyota Crown directly from the factory, which already has wipe down seats and driver's shields as standard. Crown will be that similar thing pitched a higher price. If a spew-spec Toyota Crown retails for $50,000 and they can sell just 80% of the units, then Toyota is money ahead on the deal.
As for the statement that new Camry models under development will be sold exclusively to foreign markets, as suggested by Nikkei Publications, I think that that likely includes the United States and Canada as the primary destination, possibly China, but not Europe. It certainly makes zero business sense to develop anything for Australia when you can only shift 500 units a month.
I can't really lament the passing of Camry the way I did for Commodore or Falcon because as a motorsport fan, Camry had no pedigree that I cared about. Camry was always meaning to be an unexciting appliance for people who did not care, and who would ditch their cars within the 7 year warranty window. Buying a second-hand Camry is a lottery because the amount of maintenance on a Camry will either be immaculate or nil and there's no way of knowing.
What the ending of Camry does represent, is the ending of hope that there is going to very many cool cars for the masses any more. Hatchbacks are being given the axe left, right, and centre, and as the sedans also die off, that only leaves sports cars for the privileged and increasingly belligerent few. The end of Camry is a very significant dying of the light. I rage against the dying of the light³.
¹ No really, this was predicted some time ago:
https://www.drive.com.au/caradvice/its-because-youre-fat/
It’s because you’re fat. - Wheels magazine, 17th May 2018
² This same principle is the reason why the 3-point in basketball has improved/ruined the sport. The 3-point line was introduced to encourage long range shots because basketball became a game purely about shoving people out of the way and dunking on them. Again, risk/reward analysis says that you only need to sink 2/3rds of the shots to get the same number of points; so provided your shot accuracy is above 67% as compared with sinking 2-point shots, then always got for 3s.
³ Do not go gentle into that good night,
Old age should burn and rave at close of day;
Rage, rage against the dying of the light.
- Dylan Thomas
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