Business & Real Estate

California’s new car sales resurgence led by Japanese makes

Kiyotaka Ise, Senior Managing Officer for Toyota Motor Corporation, speaks at a news conference in East Palo Alto Friday. Toyota is the top-selling manufacturer brand in California so far this year.
Kiyotaka Ise, Senior Managing Officer for Toyota Motor Corporation, speaks at a news conference in East Palo Alto Friday. Toyota is the top-selling manufacturer brand in California so far this year. AP

California’s new car marketplace has surged back to pre-recession form, with domestic and foreign automakers enjoying a string of robust sales months in the state.

But statistics show that in many respects the Golden State remains the Land of the Rising Sun.

According to the latest figures released by the Sacramento-based California New Car Dealers Association, Japanese automakers maintain a dominant position in the state’s new vehicle sales market – the nation’s largest, historically accounting for 10 percent to 12 percent of all new car sales nationwide.

Through the first six months of 2015, Toyota was the top-selling manufacturer brand in the state, by far, with 20.9 percent of the new car market. Honda is a distant second at 12.4 percent.

(Japanese) automakers pour a lot of resources into California, and they concentrate on California as its own, distinct market. They’ve been very successful doing that over many years.

Auto industry expert Jesse Toprak, head of Toprak Consulting Group in Encino

Ford and General Motors are in a tight battle for third, at 10.5 percent and 10 percent, respectively.

But consider this: throw in Nissan’s 9.1 percent market share and the top three Japanese manufacturers have a combined 42.4 percent slice of the pie – twice the 20.5 percent share of Ford and GM combined.

And there’s this: Through six months this year, the five top-selling passenger cars in California are Japanese models. New-vehicle registrations compiled by CNCDA show the order as the Honda Civic (36,861 unit sales), Toyota Prius (34,008), Toyota Corolla (32,383), Toyota Camry (31,913) and Honda Accord (31,900). The top-selling sport-utility vehicle in California is the Honda CR-V (17,612). The best-selling minivan is the Toyota Sienna (11,386).

Not surprisingly, American manufacturing pride is preserved in the state’s full-size pickup truck segment. Through six months, Ford’s popular F-Series leads with 20,195 registrations from January 1 through June 30 this year, followed by the Chevrolet Silverado with 18,087.

Japanese manufacturers have long said their success in the Golden State can be attributed to basic, customer-pleasing factors. Toyota touts the long-term reliability of its vehicles and their relatively high resale values. Honda boasts a lineup of vehicles with high fuel-mileage ratings.

Auto industry experts agree with those assessments, but say that’s only part of the story.

“(Japanese) cars have been known to produce better gas mileage in an environmentally conscious state in general and consumers also desire to get vehicles that have no repair costs and high resale value, but there are other reasons beyond that,” said auto industry expert Jesse Toprak, head of Toprak Consulting Group in Encino.

Toprak said there is strong “Asian influence” throughout California, not only from a comparatively large Asian population but from the state’s significant influence in the business sphere that is the Pacific Rim.

“Beyond that,” he added, “(Japanese) automakers pour a lot of resources into California, and they concentrate on California as its own, distinct market. They’ve been very successful doing that over many years.”

Brian Maas, president of CNCDA agreed, saying Japanese auto manufacturers “have put a lot of resources into appealing to California customers, on top of a strong product mix, good fuel mileage and reliability. You combine all that, it has given them a bit of an advantage.”

Among American manufacturers, Toprak said Ford “has probably approached most closely” what Japanese automakers have been doing in California. He said “Ford has a grass-roots effort, with driving events in California. They’ve been working to change the brand’s image, but that can be a very long and difficult process.”

As an example, Toprak cited the American luxury brand, Cadillac.

“Cadillac has made some of the best cars in their history, but they haven’t made a dent in market share,” he said.

On the other hand, Toprak noted, an automaker’s image can be turned around over time. He cited South Korean manufacturer Hyundai, known in the 1980s as a manufacturer of cheap, marginal-quality cars. In the 1990s, Hyundai launched a campaign to position itself as a world-class producer of quality cars.

Today, combined with its Kia subsidiary, Hyundai is the fourth-largest vehicle producer in the world, and the Hyundai/Kia midsize and luxury brands are regarded as legitimate contenders against long-established, popular models made by other automakers.

“But,” Toprak added, “Hyundai took a decade to turn things around.”

Through six months this year, CNCDA said Hyundai/Kia had a 7.8 percent market share of new-vehicle registrations in California, good for sixth behind Nissan.

Like Toprak, Maas believes automakers “have to look at California as its own market ... We’re different from the rest of the country.”

At a glance

The five top-selling passenger cars from January to June 2015 and the number of vehicles sold:

  • Honda Civic – 36,861
  • Toyota Prius – 34,008
  • Toyota Corolla – 32,383
  • Toyota Camry – 31,913
  • Honda Accord – 31,900

New-vehicle registrations compiled by CNCDA

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