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Toyota hoping to regain U.S. market share

LOS ANGELES — Toyota still faces major hurdles in rebuilding its image and market share even though a federal study found no evidence that electronic defects accounted for sudden acceleration in its vehicles.

The results of a study conducted by NASA engineers were welcome news for Toyota Motors Corp., but it doesn't change the biggest problem the world's largest automaker faces — the lack of dynamic products at a time when competitors are coming out with greatly improved cars, analysts say.

"Customers are walking away with the perception that even though a Toyota is well built, they don't see it as the next step in design, styling and innovative features," said Alexander Edwards of Strategic Vision Inc., an automotive research and marketing consulting firm.

For the first time in years, Fords and Chevrolets are outselling Toyotas. The Japanese automaker is losing market share and has had to offer incentive after incentive on its vehicles.

Toyota's share of the U.S. auto market fell to 15.2 percent last year from 17 percent in 2009, hampered by the recall of millions of vehicles and the record payment of nearly $50 million in federal fines for failing to promptly inform regulators of defects and delaying recalls. It was the only major automaker to log a sales decrease from 2009.

Toyota plans to introduce seven new or refreshed vehicles in 2011, including the new Prius V station wagon. Many analysts expect Toyota to also unveil a new Camry.

Toyota's Corolla and Camry models accounted for more than a third of the company's U.S. sales last year. Although they remain among the bestselling vehicles in America, analysts say new rivals are eating away at their market share.

The Corolla is not expected to get a full redesign until the 2014 model year, and although it still gets top fuel economy, its styling and features have fallen behind entrants such as the Hyundai Elantra, the Ford Focus and the Chevrolet Cruze, said Dave Sargent, vice president of vehicle research at J.D. Power & Associates. A new version of the Honda Civic comes out later this year.

Toyota also has fallen behind in the family sedan segment, said David Champion, director of Consumer Reports' auto test center.

"Toyota used to be way out in front in terms of reliability, but now you have to pick and choose," he said. The Camry with a V-6 engine "has only average reliability, and while the four cylinder is above average, the most reliable family sedan is now the Ford Fusion," he said.

Toyota hoping to regain U.S. market share 02/22/11 [Last modified: Tuesday, February 22, 2011 3:30am]
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