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 One Year After Thai Coup, No End in Sight for Military Rule

Since carrying out the May 22, 2014 coup, the general has retired from the military but is still firmly in charge More

Goodbye, New York

This is what the fastest-growing big cities in America have in common More

Job-Seeking Bangladeshis Risk Lives to Find Work

The number of Bangladeshi migrants on smugglers’ boats bound for Southeast Asian countries has soared in the past two years 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.
Turkey's Main Opposition Party Hopes for Election Breakthroughi
X
May 22, 2015 10:23 AM
Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Turkey's Main Opposition Party Hopes for Election Breakthrough

Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Europe Follows US Lead in Tackling ‘Conflict Minerals’

Metals mined from conflict zones in places like the Democratic Republic of Congo are often sold by warlords to buy weapons. This week European lawmakers voted to force manufacturers to prove that their supply chains are not inadvertently fueling conflicts and human rights abuses. Henry Ridgwell reports from London.
Video

Video Class Tackles Questions of Race, Discrimination

Unrest in some U.S. cities is more than just a trending news item at Ladue Middle School in St. Louis, Missouri. As VOA’s Kane Farabaugh reports, it’s a focus of a multicultural studies class engaging students in wide-ranging discussions about racial tensions and police aggression.
Video

Video Mind-Controlled Prosthetics Are Getting Closer

Scientists and engineers are making substantial advances towards the ultimate goal in prosthetics – creation of limbs that can be controlled by the wearer’s mind. Thanks to sophisticated sensors capable of picking up the brain’s signals, an amputee in Iceland is literally bringing us one step closer to that goal. VOA’s George Putic reports.
Video

Video Afghan Economy Sinks As Foreign Troops Depart

As international troops prepare to leave Afghanistan, and many foreign aid groups follow, Afghans are grappling with how the exodus will affect the country's fragile economy. Ayesha Tanzeem reports from the Afghan capital, Kabul.
Video

Video Poverty, Ignorance Force Underage Girls Into Marriage

The recent marriage of a 17-year old Chechen girl to a local police chief who was 30 years older and already had a wife caused an outcry in Russia and beyond. The bride was reportedly forced to marry and her parents were intimidated into giving their consent. The union spotlighted yet again the plight of many underage girls in developing countries. Zlatica Hoke reports poverty, ignorance and fear are behind the practice, especially in Asia and Africa.
Video

Video South Korea Marks Gwangju Uprising Anniversary

South Korea this week marked the 35th anniversary of a protest that turned deadly. The Gwangju Uprising is credited with starting the country’s democratic revolution after it was violently quelled by South Korea’s former military rulers. But as Jason Strother reports, some observers worry that democracy has recently been eroded.
Video

Video California’s Water System Not Created To Handle Current Drought

The drought in California is moving into its fourth year. While the state's governor is mandating a reduction in urban water use, most of the water used in California is for agriculture. But both city dwellers and farmers are feeling the impact of the drought. Some experts say the state’s water system was not created to handle long periods of drought. Elizabeth Lee reports from Ventura County, an agricultural region just northwest of Los Angeles.
Video

Video How to Clone a Mammoth: The Science of De-Extinction

An international team of scientists has sequenced the complete genome of the woolly mammoth. Led by the Swedish Museum of Natural History in Stockholm, the work opens the door to recreate the huge herbivore, which last roamed the Earth 4,000 years ago. VOA’s Rosanne Skirble considers the science of de-extinction and its place on the planet
Video

Video Blind Boy Defines His Life with Music

Cole Moran was born blind. He also has cognitive delays and other birth defects. He has to learn everything by ear. Nevertheless, the 12-year-old has had an insatiable love for music since he was born. VOA’s June Soh introduces us to the young phenomenal harmonica player.

VOA Blogs

World Currencies

EUR
USD
0.8957
JPY
USD
120.93
GBP
USD
0.6393
CAD
USD
1.2199
INR
USD
63.470

Rates may not be current.