This Ford Motor Company Vehicle Has Toyota Worried

THE MOTLEY FOOL

Posted By Daniel Miller 

 

 

 

 

   

Toyota's 2015 Camry XSE will help keep competition at bay. Image source: Toyota Motors.

 

If the U.S. midsize sedan segment were a giant game of king of the hill, every competitor probably would have headed home by now, tail tucked between their legs, and given up trying to dethrone Toyota Motor Corp.'s (NYSE: TM  ) Camry. The Camry has been the best-selling midsize sedan for over a decade now, and could probably continue its reign without doing much in the way of design changes.

However, Toyota's decision to get more aggressive with its design likely stems from a new challenger: Ford Motor Company's (NYSE: F  ) Fusion. Here's one graph that shows why Toyota is a bit scared, and what the Japanese automaker is doing about it.

Fusion sales accelerate

 Over the last couple of decades Ford has been known for many things, but making high-quality and popular midsize sedans wasn't one of them. Former CEO Alan Mulally knew that had to change when he took over the helm of the troubled automaker in 2006. With a renewed focus on smaller, more fuel-efficient and aesthetically pleasing vehicles, the Fusion soon hit the streets -- and it quickly became a hit.

Chart by author. Information source: Ford and Toyota sales releases.

 

"My design brief to the team was to do an absolute drop-dead gorgeous head-turner," said J. Mays, Ford's head of global design, according to the Detroit Free Press. "And it was to look $10,000-$15,000 more expensive than it is."

Ford's 2014 Fusion. Source: Ford Motor Company.

 

After collecting a lengthy list of awards, it was clear Ford had a winner in an automotive segment the Blue Oval was long left for dead in. This year, the Fusion's sales are 6.1% ahead of last year's pace, and if that holds for the last portion of the calendar year, it will break 300,000 sales in 2014 -- something only the F-Series has done for Ford in the last nine years.

With a new challenger in the mix to be king of the hill atop the midsize segment, Toyota plans to crank up the aggressiveness with its mid-cycle refresh of the Camry -- a vehicle that is well known for being dependable, yet dull.

Challenge accepted

 It's clear Toyota's not going to give up its top passenger car sales position in the United States without a fight, and the 2015 Camry has a couple of tricks up its sleeve.

 The Japanese automaker invested substantially to change the entire 2015 Camry's sheet metal exterior, with only the roof remaining identical to the prior year's model.

The re-engineered 2015 Camry went into production on Sept. 17 and is just now arriving at dealerships.

Toyota's 2015 Camry. Source: Toyota Motors.

 

In addition to the newer, more aggressive exterior, Toyota made the decision last year to discontinue the Camry's base L trim in favor of a more premium and performance styled XSE trim.

 

 It's a solid move, as the XSE is intended to take the success of its popular SE, which has a 45% take rate according to Automotive News, and pile on some premium options such as 18-inch wheels, a standard backup camera and a 4.2-inch infotainment system display that isn't available on the base LE trim.

 

 The 2015 Camry will also boast a wireless phone-charging pad, becoming the first midsize sedan to have such technology.

Overall, the aggressive exterior change and eliminating a cheaper and duller trim package in favor of a sportier version are sound moves and will enable the Camry to better fight off growing competition in the segment.
 Although the 2015 Camry will remain much the same vehicle under the hood, you can expect those major changes to be upgraded during the full redesign in a few years.

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Daniel Miller owns shares of Apple and Ford. The Motley Fool recommends and owns shares of Apple and Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.