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It's no secret that Detroit's Big Three automakers have been taking back market share in segments that have long been dominated by Toyota and Honda . Ford has especially gained much ground in fuel-efficient sedan segments with its popular Fusion and Focus models. This is great news for domestic auto investors like myself, but of course the No. 1 global sales leader isn't going to sit by idle. With the weakened yen, it gives Toyota and Honda an advantage that enables them to load up features without raising the price per vehicle, or simply take more of each revenue dollar to the bank.
It's unclear how the weak yen advantage will be used, but as Toyota's Corolla has felt pressure from the Ford Focus, its 2014 model looks to be much more aggressive to take back lost market share -- Corolla remains on top of the Focus, but the gap has narrowed quickly.
Information from Automotive News Data Center.
I'm an honest person, and I always call it as I see it. I'm a Ford guy and have been very pleased with how its new vehicles have grabbed market share aggressively in the U.S. as well as globally. But I also have to give Toyota credit for its Corolla, which has sold more than 40 million units in its 47-year life span and sells in 154 countries, making it a true global icon.
This 11th generation of the Corolla needed to be a little bit different, because its segments have been known for bland style and it has rarely seen creative designs. Ford brought a splash to the market with its recent designs that take style cues of the futuristic Evos concept vehicle -- which has been a hit with the market. Toyota's response is the more aggressive styling that goes beyond its typical comfort zone, and it will attempt to attract the same youthful consumers that Ford is striking it rich with.
Speaking of youthful consumers, one of the biggest factors to attract this consumer is a tech-savvy and stylish interior.
The Corolla's interior steps up the game from its outgoing predecessor and creates a stylish and functional space with a more spacious interior to boot. Its use of interior color schemes and trims gives a premium feel and sporty look -- all useful elements when attracting a younger consumer. It also is said to have a very quiet cabin during drives, mitigating engine and environment noise through improved acoustic glass and insulation.
One drawback for the Corolla could be its engine, but it just depends on what you're looking for. The 2014 base model will come with an efficient 1.8-liter engine that's aimed at getting about 40 mpg -- though it hasn't been officially tested yet. It will fall short of horsepower output compared with the Ford Focus, which boasts a very popular turbocharged EcoBoost engine.
As a Ford investor, I know very well how much these fuel-efficient segments mean to automakers. The biggest growth trend has been called the "Super Segment" by Ford. Those four segments are represented by Ford's Focus, Fiesta, Fusion, and Escape -- no coincidence that those are four of Ford's most popular vehicles.
These high-volume sedans, the Corolla and Focus, represent a quick way to win market share and brand awareness in the U.S. and global markets. For the first time in more than two decades, all three Detroit automakers gained market share in the U.S. in the first quarter. Toyota is taking notice that Ford and GM are competing in segments where they had once been left for dead. It will take years to battle past stereotypes of poor-quality vehicles, but things are clearly changing, and that is confirmed by Toyota's radical image change with its 2014 Corolla -- it's feeling the pressure.
Toyota is still the No. 1 global automaker by sales, but Ford and General Motors seem very undervalued as they continue to impress consumers and critics in their rebound from the financial collapse and great recession. A savvy investor would be wise to forget the companies that they used to be, and acknowledge drastically improved companies before others do -- I believe great profits await early investors who recognize this.
As Detroit automakers continue to win back market share in the U.S. and produce popular models in growing segments, look for revenues, profits, and margins to all increase -- a big win for Ford and GM investors.
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The article Toyota Unleashes an Aggressive 2014 Corolla originally appeared on Fool.com.Fool contributor Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors and owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.
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