The upshot: Toyota gained market share -- and outsold Ford in the U.S. last month.
That's not unprecedented. In fact, it seems to happen once or twice a year. But what's interesting -- and potentially disturbing for Ford shareholders -- is how Toyota did it.
A tiny sales advantage, but a significant difference
Toyota's U.S. arm sold a total of 180,467 vehicles in the U.S. last month, including sales from Toyota's Lexus and Scion brands, while Ford sold 180,383, including its Lincoln brand.
It's a tiny margin and a tiny victory, and it comes while supplies of Ford's best-seller, the F-Series pickup, are constrained while the company converts a factory to produce its all-new 2015 F-150 model.
But it's still significant, because Toyota is successfully doing something Ford isn't: selling cars.
Ford's compact Focus and midsize Fusion have been big winners for the Blue Oval in the past. Both models showed that a Detroit automaker could create well-built, fuel-efficient cars that consumers would rush to buy. Ford has done very well with both models over the last few years, but lately, sales have slipped: Sales of the Focus fell 12% last month, while the Fusion was down 5%.
Sales of General Motors' (NYSE:GM) small and midsize cars also declined in February. It would be easy for U.S. automakers to blame the weather. A lot of snow fell in parts of the country last month, and both Ford and GM posted gains in big SUV sales. Clearly, buyers weren't interested in cars in February, right?
However, Toyota's experience suggests there's a little more to the story.
Does Ford still have a problem with its cars?
Toyota's SUVs also posted good sales gains in February. In addition, though, the Japanese automaker gained ground in the hotly contested compact and midsize car markets. Toyota's increased year-over-year sales of its midsize Camry by 13.6% last month, while its compact Corolla gained 10%. Sales of Toyota's big Avalon were up nearly 34% even while other big sedans have struggled recently.
In fact, of Toyota's major car models, only sales of the hybrid Prius declined, and that was no surprise given the recent direction of gasoline prices.
Both the Corolla and Camry are fresh models. The Corolla was all new for 2014, while the 2015 Camry has been refreshed. Ford is rolling out an updated version of the Focus, but the Fusion is essentially unchanged for 2015. That could be having a small effect.
Pricing also likely has a lot to do with it. Favorable exchange-rate shifts over the last couple years have given Toyota a big pricing advantage: It gets more yen for every dollar it earns, so it can afford to earn fewer dollars.
So far, Toyota has booked the extra profits rather than cut its U.S. prices. But that might be changing. Right now, Toyota is offering aggressive 24-month lease deals on both cars: $129 per month for a Corolla or $139 for a Camry -- or 0.9% financing for 60 months if you'd prefer to buy.
A situation to watch closely as the weather improves
As I said, Toyota outsells Ford every now and then (it happened last July), and it's nothing for the Blue Oval's shareholders to get too worried about.
But we saw last decade what could happen when Ford (and GM) grow too reliant on truck sales: They got burned in a big way when the market shifted back toward cars.
Both automakers put big efforts into improving their cars to ensure that wouldn't happen again. Cars such as Ford's Fusion and GM's Chevy Cruze are far more competitive than the models they offered a decade ago.
But Toyota still seems to have an advantage, albeit one enhanced by favorable exchange-rate shifts. That's something for Ford shareholders to keep an eye on going forward.