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Toyota Camry: No. 1 But for How Long?

The '09 version of the best-selling Camry is a near-flawless car but it could lose its crown to the surging Honda Accord

by Thane Peterson of Businessweek

I hear more and more people claiming that Toyota's (TM) Camry has seen its better days. The Camry's fit and finish aren't as good as they once were, the critics say, and some of the materials used in the cabin are a bit chintzy. The editor of Car and Driver claims General Motors' (GM) new Chevy Malibu is just as good, and Consumer Reports dropped the six-cylinder version of the '07 and '08 Camry from its recommended list. Among the critics are many BusinessWeek.com readers (check out the comments about my review of the Malibu (BusinessWeek.com, 12/10/07)

I think the critics are all wet about the Camry declining in quality, especially as concerns the fuel-efficient four-cylinder version, which is what most shoppers want these days. I recently test-drove the four-cylinder '09 Camry LE under all kinds of conditions, and I can find very little to criticize about the car. The Camry was completely redesigned for the '07 model year and has remained largely unchanged since then. It certainly isn't exciting to look at. But for what it is—an affordable family sedan designed to appeal to Middle American tastes—the Camry is still a flawlessly executed vehicle.

Of course, you can't tell much about a car's long-term reliability from a one-week test drive. But if the Camry were really in trouble, its resale value would be plunging, something J.D. Power & Associates sees no sign of. In fact, the Camry continues to hold its value at least as well as Honda's (HMC) Accord (BusinessWeek.com, 11/19/07). For instance, in the first quarter of 2006, the '05 Camry had a resale value of $17,864, vs. $20,539 for the '05 Accord, J.D Power says. The '05 Accord was more valuable because its original average price was higher. But since then, the '05 Accord's resale value has fallen faster than the Camry's, dropping 24.2%, to $15,571, compared with only a 17.5% drop, to $14,739, for the '05 Camry, J.D. Power figures. (Like BusinessWeek.com, J.D. Power & Associates is a division of The McGraw-Hill Companies (MHP).)

There are early signs that the redesigned '07 Camry and Accord are reversing roles, with the Camry costing more initially and losing value a bit more quickly. Since the third quarter of 2006, the value of the '07 Camry has fallen by 18.2%, from $23,036 to $19,070, while the '07 Accord's resale price dropped 17.2%, from $22,750 to $18,839. But J.D. Power says the numbers may be skewed because the '07 Camry came out earlier than the '07 Accord. The Accord also was redesigned the following year. My take: Even if the Camry only matches the Accord on resale value, that's still terrific.

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