The Camry, the best-selling car in the U.S., has lost ground to the Sonata, with Hyundai raising its U.S. output and surpassing the Camry in May for the first time.
"Sonata became a very honorable contender in the market," Yoshimi Inaba, Toyota's North American chairman, said in a July 12 interview. "We do have good respect for the model, and the sales figures show it's increasing quite a bit."
U.S. sales of Camry last year dropped 31 percent to 327,804 compared with deliveries in 2007, Toyota's best-ever year, while Honda Motor Corp.'s Accord sales also dropped 28 percent to 282,530 in the period.
Both models are approaching the end of their current product cycles.
Sales of the Sonata, revamped in January 2010, surged 35 percent to 196,623 last year. The 2011 Sonata's overall design quality is rated "among the best" by J.D. Power & Associates and earned a "Top Safety Pick" award from the Insurance Institute for Highway Safety.
'Paying attention'
Until a few years ago, Toyota's Camry and Honda's Accord "defined" the midsize segment in the U.S. for at least a decade, said Jeremy Anwyl, CEO of auto researcher Edmunds.com in Santa Monica, Calif.
"But Hyundai has really stepped up their game, and Toyota's been paying attention."
The next version of the Camry will have a more contemporary design and improved performance and handling, President Akio Toyoda told U.S. dealers last month in Las Vegas.
The new model will go on sale in the latter part of the year. Toyota's current Camry, last refreshed in March 2006, gets up to 32 miles per gallon in highway driving in the U.S., compared with the Sonata's 35 mpg and Honda's 34 mpg.
With Hyundai's improvements in design and fuel efficiency, sales of the Sonata have jumped 29 percent to 115,014 units this year through June, while the Camry has dropped 4.4 percent to 147,469 in the U.S.
Restricted output after the March 11 earthquake in Japan has also contributed to the decline in Camry sales.
Camry vs Sonata
Hyundai didn't have to slow production after the quake because its Japan-based suppliers' plants aren't located in the affected areas, according to the company.
As a result, Sonata outsold Camry in May for the first time, according to Edmunds.com.
While both the Sonata and Camry sold in the U.S. are built locally, the weak Korean currency relative to the dollar benefits Hyundai when it repatriates profits.
The yen, on the other hand, has hurt Toyota by gaining about 10 percent over the past year. The Japanese currency this week climbed to as high as 78.50 yen per dollar, the strongest since March 17.
The 2011 Camry is currently priced from $20,195, compared with the Sonata's $19,395 starting price tag.
Camry -- which is the Anglicized spelling of "kanmuri," meaning "crown" in Japanese -- accounted for about a fifth of U.S. sales at Toyota last year.
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