To properly understand the Camry, one needs to put it in perspective and context. Quite simply, it’s a money making machine, for Toyota. Since 2001, Toyota has been building essentially the same Camry. And it will be for several more years, before the evergreen K-Platform gets finally retired after the latest generation that hasn’t even gone on sale yet. Yes, there’s been a few cosmetic and other changes along the way, like a new four cylinder engine (undoubtedly cheaper to build) and six-speed automatic. But who else is building essentially the same car for almost 15 years?
By keeping development costs low, and constantly reducing component costs and production efficiencies, the Camry is a substantial contributor to Toyota’s projected $20 billion profit this year. That’s head and shoulders above VW and GM. As Toyota has repeatedly said, it’s not about who is Number One in global sales, but who makes the most money. And Toyota does that by a huge margin, with profits about triple or more of those of GM, and double of VW.
Undoubtedly, the Camry is the lowest-cost car to build in its class, which is actually shrinking due to the relentless growth of the CUV segment. Toyota seems quite content to play it safe, and let others like the Accord and Mazda 6 be the segment leaders in terms of dynamic qualities. The competition in this segment, now that VW has entered it too with its US-specific Passat, means that margins will inevitably shrink to the extent incentives are required to keep volumes up.
Toyota’s strategy seems to almost be defensive, keeping the Camry “just good enough” while relentlessly reducing its costs so as to be prepared for a market segment shake-out, especially if/when the economy has the next case of the jitters. Just how that will all shake out, especially with the resurgence of the Accord, remains to be seen.
