Cash on the hood gets customers back into Toyota showrooms for products like this 2010 RAV4.
You may have to take a number and wait if you walk into Continental Toyota, in Hodgkins, Illinois. After suffering a huge slump, last month, in the midst of the maker’s ongoing recall crisis, sales have taken off like a shot since Toyota rolled out some of its best-ever incentives.
Across the country, sales have jumped by as much as 50%, so far this month, Toyota Senior Vice President Don Esmond told partsmakers supplying the maker’s North American plants.
That’s a significant turnaround from February, when problems with Toyota products grabbed nearly daily headlines and the company’s senior management was grilled aggressively by lawmakers on Capitol Hill. For the month, Toyota sales were down about 10%, in sharp contrast to key competitors such as Honda, General Motors and Ford, most of whom posted solid, double-digit gains for February.
“Business has been very good” for the first third of March, said Dennis Pecho, general manager of Continental Toyota. “Compared to last month, it’s more than doubled.”
Pecho says the situation in February was probably made all the worse by Toyota’s failure to let the public know that it had lifted the so-called “stop sale” put in place in January, when the maker announced the recall of 2.3 million vehicles to repair potentially sticky accelerator pedals. Toyota shut down production at five U.S. plants and told dealers to halt sales of eight models impacted by the recall until they could be repaired.
But Pecho notes it only took his service shop about 10 days to make the fixes and then those products, including the popular Toyota Camry, went back on the block. Unfortunately, many customers simply didn’t know that.
The new marketing campaign is designed to not only overcome consumer concerns about Toyota producs but to also counter aggressive efforts by key competitors, such as GM and Hyundai, which have been targeting Toyota owners with their own cash givebacks.
Though the maker has often had to sweeten the pot a bit, Toyota has traditionally avoided big-buck giveaways, often opting for so-called “dealer cash,” in which retailers could draw from a pot of money to help close a sale. But the latest incentives come a lot closer to what has been the norm for makers like General Motors, which has long considered incentives a necessary part of doing business.
Toyota’s current offer runs from $500 to as much as $3,000 on the 2010 Avalon sedan, and a number of vehicles, including the Tundra pickup and Corolla and Camry sedans, also qualify for zero-interest loans.
The automotive site Edmunds is forecasting that, for the month as a whole, Toyota sales will jump 30%, year-over-year. The jump would be even more significant when comparing March with dismal February.
For his part, Continental Toyota’s Pecho says he’s just hoping that the automaker will keep the cash flowing for as long as necessary.
“Toyota wants to recover,” he suggests. “I think they understand the situation and the more people we get into our cars the sooner we’ll recover.”