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


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, 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

Nearly Every Job in America Mapped in Detail

A nifty map pinpoints practically every job in the United States, revealing the economic character of America’s metropolitan areas, which also helps to inform the local culture

Corruption Busting Is Her Game

South African activist is building 'international online community of thousands of corruption fighters'

Former SAF Businessman Gives Books, Love of Reading to Students

Steve Tsakaris now involved in nonprofit Read to Rise, which distributes books in Soweto, encourages lower-grade primary school students to read

This forum has been closed.
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.
With HIV, Can We Get to Zero?i
Carol Pearson
November 29, 2015 1:23 PM
The theme of this year's World AIDS Day is "Getting to Zero." The U.N. says new HIV infections have been reduced by 35 percent since 2000 and AIDS-related deaths are down by 42 percent since the peak in 2004. VOA's Carol Pearson takes a look at what it might take to actually have an AIDS-free generation.

Video With HIV, Can We Get to Zero?

The theme of this year's World AIDS Day is "Getting to Zero." The U.N. says new HIV infections have been reduced by 35 percent since 2000 and AIDS-related deaths are down by 42 percent since the peak in 2004. VOA's Carol Pearson takes a look at what it might take to actually have an AIDS-free generation.

Video In Cambodian Capital, Political Motives Seen Behind Canceled Water Festival

For the fourth time in the five years since more than 350 people were killed in a stampede at Cambodia’s annual water festival, authorities canceled the event this year. Officials blamed environmental reasons as the cause, but many see it as fallout from rising political tensions with a fresh wave of ruling party intimidation against the opposition. David Boyle reports from Phnom Penh.

Video African Circus Gives At-Risk Youth a 2nd Chance

Ethiopia hosted the first African Circus Arts Festival this past weekend with performers from seven different African countries. Most of the performers are youngsters coming form challenging backgrounds who say the circus gave them a second chance.

Video US Lawmakers Brace for End-of-Year Battles

U.S. lawmakers are returning to Washington for Congress’ final working weeks of the year. And, as VOA's Michael Bowman reports, a full slate of legislative business awaits them, from keeping the federal government open to resolving a battle with the White House over the admittance of Syrian refugees.

Video Taiwan Looks for Role in South China Sea Dispute

The Taiwanese government is one of several that claims territory in the hotly contested South China Sea, but Taipei has long been sidelined in the dispute, overshadowed by China. Now, as the Philippines challenges Beijing’s claims in an international court at The Hague, Taipei is looking to publicly assert its claims. VOA’s Bill Ide has more from Beijing.

Video After Terrorist Attacks, Support for Refugees Fades

The terrorists who killed and injured almost 500 people around Paris this month are mostly French or Belgian nationals. But at least two apparently took advantage of Europe’s migrant crisis to sneak into the region. The discovery has hardened views about legitimate refugees, including those fleeing the same extremist violence that hit the French capital. Lisa Bryant has this report for VOA from the Paris suburb of Cergy-Pontoise

Video Syrian Refugees in US Express Concern for Those Left Behind

Syrian immigrants in the United States are concerned about the negative tide of public opinion and the politicians who want to block a U.S. plan to accept 10,000 Syrian refugees. Zlatica Hoke reports many Americans are fighting to dispel suspicions linking refugees to terrorists.

Video Thais Send Security Concerns Down the River

As Thailand takes in the annual Loy Krathong festival, many ponder the country’s future and security. Steve Sandford reports from Chiang Mai.

Video Islamic State Unfazed by Losses in Iraq, Syria

Progress in the U.S.-led effort to beat Islamic State on its home turf in Iraq and Syria has led some to speculate the terror group may be growing desperate. But counterterror officials say that is not the case, and warn the recent spate of terror attacks is merely part of the group’s evolution. VOA National Security correspondent Jeff Seldin has more.

Video Belgium-Germany Border Remains Porous, Even As Manhunt For Paris Attacker Continues

One of the suspected gunmen in the Nov. 13 Paris attacks, Salah Abdeslam, evaded law enforcement, made his way to Belgium, and is now believed to have fled to Germany. VOA correspondent Ayesha Tanzeem makes the journey across the border from Belgium into Germany to see how porous the borders really are.

Video US, Cambodian Navies Pair Up in Gulf of Thailand

The U.S. Navy has deployed one of its newest and most advanced ships to Cambodia to conduct joint training drills in the Gulf of Thailand. Riding hull-to-hull with Cambodian ships, the seamen of the USS Fort Worth are executing joint-training drills that will help build relations in Southeast Asia. David Boyle reports for VOA from Preah Sihanouk province.

Video Uncertain Future for Syrian Refugee Resettlement in Illinois

For the trickle of Syrian refugees finding new homes in the Midwest city of Chicago, the call to end resettlement in many U.S. states is adding another dimension to their long journey fleeing war. Organizations working to help them integrate say the backlash since the Paris attacks is both harming and helping their efforts to provide refugees sanctuary. VOA's Kane Farabaugh reports.

VOA Blogs

World Currencies


Rates may not be current.