Is the Camry set to get old and stuffy?

Roland Jones Business news editor • Profile • E-mail

For several years in the late 1970s and early 1980s, the Oldsmobile Cutlass was the best-selling car in America, boosted by popular designs, positive reviews and the perception of quality and reliability.

How times have changed. Today, the once-venerable General Motors brand lies defunct, phased out in 2004 after steadily declining sales. The Olds was killed by its image as old and stuffy, despite an attempt to revive it with a public relations campaign in the late 1980s that promised the new models were “not your father’s Oldsmobile.”

It’s a cautionary tale worth noting, especially for the Toyota Camry, the best-selling car in the United States for eight of the past nine years. Statistics compiled by consulting company Global Insight show that, up to the 2002 model year, the average age of U.S. buyers of Toyota’s popular sedan rose by one year for every year that passed. The brand is in danger of becoming outdated.

“This is the price you pay for making a connection with a generation,” said John Wolkonowicz, senior auto analyst for North America at Global Insight. Wolkonowicz notes that Toyota’s bread-and butter sedan, known for dependability and comfort, has made a solid connection with baby boomers, typically born between the mid-1940s and mid-1960s.

“Camry buyers are on average in their low to mid-50s, and if Toyota doesn’t change the trajectory ... the Camry will become the Oldsmobile or the Buick of 20 years from now,” he said. “Their customers will be the oldest Americans, who are dying out of the market every day. Toyota is adamant that they are not going to let this happen, but they may be powerless to change it.”

Brand changes aren’t always successful, despite the best marketing makeovers. But Toyota shouldn’t be underestimated, Wolkonowicz added.

Since the 1990s, the Camry sedan has transitioned from its boxy beginnings to a more athletic exterior, while retaining a reputation for reliability, affordability and good fuel economy. Toyota sold 450,000 Camrys in 2006, up nearly 4 percent from 2005, according to Autodata, and well ahead of the No. 2 Accord, which sold 354,000 units, a decline of about 4 percent.

Still, before the Camry came the Ford Taurus, which held the position as the nation’s best-selling car between 1992 and 1996, only to lose its perch at the top of the automotive tree to the Camry in 1997. Ford produced its last Taurus last year.

Jack Nerad, executive market analyst for Kelley Blue Book, which tracks the automotive industry, says there does seem to be a natural arc for a successful car brand. Older nameplates like Buick, Pontiac and Mercury are all struggling, he said, although none of them are showing signs of going away.

“But it’s interesting because a few years ago you would have added the Cadillac brand to the list of struggling brands, and now it is resurgent,” he said. “It has shown that a brand that is on its last legs can find a new market given the right product and the right marketing strategy. Thanks to the CTS, Cadillac has a younger market; it has become youthful and edgy.”

Capturing the Generation X and Y demographics — generally speaking, those born after 1965 — is the aim of most carmakers, said Wolkonowicz. These consumers are more interested in BMWs than Camrys, he said, and many of them are buying premium models on the used market.

Toyota is working to capture this demographic with its lower-cost Scion brand. The initial Scions — the xA subcompact, the xB wagon, and to a lesser extent the tC sport coupe — received middling reviews. The next generation xB and the new xD, the successor to the xA, will be unveiled next month at the Chicago auto show.

“My guess is these new models will yet again be steps along the way,” Wolkonowicz said. “In typical fashion, Toyota is taking it slow and easy and getting better and better with every step. Scion will not be an overnight success. Ultimately, they will be a success, given Toyota’s might and money — it will just take time.”

Scion certainly seems to be holding its own. In a year of declining vehicle sales, Scion’s sales were up 10.6 percent in 2006 over 2005, and its share of the light vehicle market rose to 1.04 percent from 0.92 percent a year earlier.

The second part of the Japanese carmaker’s plan to capture younger consumers is to make the flagship Toyota brand more exciting by designing more expressive vehicles, adding emotion and horsepower, Wolkonowicz said.

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