News / Economy

Toyota Facing Sales Challenges in US

Expert says the auto giant will emerge from its current recall problems with a strong product, advises aggressive consumer campaign

Multimedia

Audio
Dave DeForest

The question on the minds of auto industry experts is how much damage will be done to Toyota because of its recent spate of recalls.

A number of problems such as suspected sticky gas pedals and possible power steering flaws  in certain Toyota models have left the automaker facing action by consumers, the U.S. National Highway Safety Administration and the U.S Congress - an avalanche of bad publicity.

Sales of Toyota cars in the U.S. fell 16 percent in January 2010 compared to January 2009, while sales of most other brands increased during the same month. 

Besides the recalls, the "stop-sale" on a number of Toyota's models in January will undoubtedly depress sales figures even more.

Jesse Toprak, the Vice President for Industry Trends with the auto industry analysis group TrueCar.com, says the longterm impact of the problems will depend on how aggressively Toyota deals with the issues now.  “The best way to handle this is to listen to consumers, answer their problems directly.” he said.  

Toprak also says Toyota should not give in to every consumer demand. “What happens when you have massive recalls is that it actually has a snowball effect,” he said.

Toprak explained that the recalls encourage consumers with minor problems, some having nothing to do with manufacturing flaws, to demand a return or a free fix.  “Everybody and their cousins - they are going to come out of the woodwork to complain that their car doesn’t work and they had an accident because of this issue,” he said.

Toyota cut back on factory production in several U.S. plants because of the fall in retail sales.

Toyota president Akio Toyoda, the grandson of the company’s founder, went before a congressional panel and offered an apology for the problems.

Toprak says getting the "bugs" out of its cars now will likely result in a better product in the long run. “The better news for Toyota is that once they go through this problem and fix issues, Toyotas are still going to be some of the best vehicles money can buy, simply because they will not be able to afford to go through this situation once again,” he said.

Toprak advises a large incentive program to increase Toyota car sales. “Any new marketing campaign Toyota comes up with, the effectiveness of this campaign is going to depend on how aggressive it is,” he explained  “They have to spend at least $1,000 if not more [per car] to get people in,” he said.

“I think it is not only the deal that they offer but it is also the confidence they put on their vehicles and this could be done by offering longer term warranties,” Toprak said.  He suggests the factory bumper-to-bumper warranty on a Toyota, which is now 3 years or 36,000 miles [in the U.S.], should be increased to 4 years or 50,000 miles with a power train warranty of 10 years and 100,000 miles.

The Wall Street Journal reports that Toyota will offer strong incentives such as price and financing breaks.  The report says the automaker is also planning to sweeten deals for people leasing their vehicles.

Based on TrueCar’s web traffic, Toprak said Ford is the U.S. manufacturer that has benefited most from Toyota’s problems.  “Since the recall began, the biggest beneficiary of all the brands in the U.S. was Hyundai, followed by Kia and then Ford. Honda actually came in fourth,” he said.

You May Like

Video Obama to Send 3,000 Troops to Liberia in Ebola Fight

At Centers for Disease Control and Prevention, President says US will take leadership role for a global response to deadly Ebola virus that is ravaging West Africa More

Video China Muslims Work to Change Perceptions After Knife Attacks

Muslims in Kunming say that they condemn the violence, it is not a reflection of the true beliefs of their faith More

Humanitarian Aid, Equipment Blocked in Cameroon

Move is seen as a developing supply crisis in West Africa More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Enviropreneur Seeks to Save the Environment, Empower the Communityi
X
September 16, 2014 2:06 PM
Lorna Rutto, a former banker, is now an ‘enviropreneur’ - turning plastic waste into furniture and fences discusses the challenges she faces in Africa with raw materials and the environment.
Video

Video Enviropreneur Seeks to Save the Environment, Empower the Community

Lorna Rutto, a former banker, is now an ‘enviropreneur’ - turning plastic waste into furniture and fences discusses the challenges she faces in Africa with raw materials and the environment.
Video

Video West Trades Accusations Over Ransoms

As world leaders try to forge a common response to the threat posed by Islamic State militants in Iraq and Syria, there is simmering tension over differing policies on paying ransoms. In the past month, the jihadist group has beheaded two Americans and one Briton. Both countries refuse to pay ransom money. As Henry Ridgwell reports for VOA from London, there is uncertainty in the approach of some other European nations.
Video

Video Scotland Independence Bid Stokes Global Interest

The people of Scotland are preparing to vote on whether to become independent and break away from the rest of Britain, in a referendum being watched carefully in many other countries. Some see it as a risky experiment; while others hope a successful vote for independence might energize their own separatist demands. Foreign immigrants to Scotland have a front row seat for the vote. VOA’s Henry Ridgwell spoke to some of them in Edinburgh.
Video

Video Washington DC Mural Artists Help Beautify City

Like many cities, Washington has a graffiti problem. Buildings and homes, especially in low-income neighborhoods, are often targets of illegal artwork. But as we hear from VOA’s Julie Taboh, officials in the nation's capital have come up with an innovative program that uses the talents of local artists to beautify the city.
Video

Video US Muslim Leaders Condemn Islamic State

Leaders of America's Muslim community are condemning the violent extremism of the Islamic State group in Iraq and Syria. The U.S. Muslim leaders say militants are exploiting their faith in a failed effort to justify violent extremism. VOA correspondent Meredith Buel reports.
Video

Video Americans' Reaction Mixed on Obama Strategy for Islamic State Militants

President Barack Obama’s televised speech on how the United States plans to “degrade and destroy” the group known as the Islamic State reached a prime-time audience of millions. And it came as Americans appear more willing to embrace a bolder, tougher approach to foreign policy. VOA producer Katherine Gypson and reporter Jeff Seldin have this report from Washington.
Video

Video Authorities Allege LA Fashion Industry-Cartel Ties

U.S. officials say they have broken up crime rings that funneled tens of millions of dollars from Mexican drug cartels through fashion businesses in Los Angeles. Mike O'Sullivan reports that authorities announced nine arrests, as 1,000 law enforcement agents fanned out through the city on Wednesday.
Video

Video Bedouin Woman Runs Successful Business in Palestinian City

A Bedouin woman is breaking social taboos by running a successful vacation resort in the Palestinian town of Jericho. Bedouins are a sub-group of Arabs known for their semi-nomadic lifestyle. Zlatica Hoke says the resort in the West Bank's Jordan Valley is a model of success for women in the region.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid

World Currencies

EUR
USD
0.7722
JPY
USD
107.08
GBP
USD
0.6171
CAD
USD
1.1041
INR
USD
61.075

Rates may not be current.