Nice New Toyotas

The problems first arrived with a single, car crash that took place in southern California last August. Toyota has this week called two separate recalls covering over 7.5 million cars! Now they are forced to stop all sales of eight of Toyota’s best selling models which will cost the company and its dealers a minimum of $54 million a day in lost sales. Toyota is known for its great quality, and wonderful reputation. How did the worlds largest and most profitable automaker find itself at the center of the biggest recall since the Firestone Tire recall in 2000.

The first recall, covers 4.2 million Toyota and Lexus models, owners are to remove the floor mats from their cars and place them in the trunk, or to have the floor mats zip-tied in place by a Toyota dealer. The recall covers many models and year including:

* 2005 to 2010 Avalon
* 2007 to 2010 Camry (not including Camry Hybrid)
* 2008 to 2010 Highlander
* 2009 to 2010 Matrix
* 2004 to 2009 Prius
* 2005 to 2010 Tacoma
* 2007 to 2010 Tundra
* 2009 to 2010 Venza
* 2007 to 2010 Lexus ES350
* 2006 to 2010 Lexus IS250
* 2005 to 2010 Lexus IS350
* 2009 to 2010 Pontiac Vibe

The second recall covers 2.3 million cars which together account for over 50% of Toyota’s sales. Affected models include:

* 2005 to 2010 Avalon
* 2007 to 2010 Camry
* 2009 to 2010 Corolla
* 2010 Highlander
* 2009 to 2010 Matrix
* 2009 to 2010 Rav4
* 2008 to 2010 Sequoia
* 2008 to 2010 Tundra

In addition, all 2009 and 2010 Pontiac Vibes, which are mechanically identical to the Matrix and built in the same plant, are also affected.

Toyota is among the leading automobile brands in the world today. It is based out of Japan and is a huge manufacturer of cars. The company Toyota was originally set up as a textile firm, known as Toyota Industries. Two decades later, Toyota Motors grew out of this textile firm by Kiichiro Toyoda in the year 1937 as a subsidiary car manufacturing company.

Toyota cars are considered to be among the best and most successful automobiles. It is the brand that embodies the Japanese auto makers’ success story in the global market. It has remained a perennial leader in the market when it comes to customer satisfaction. The company has something called the Toyota Manufacturing System. It credits this system and process with its reduction in production cost, while improving its vehicle quality by removing defects. It is also the pioneer in the development of hybrid electric and petrol technology. This has helped the car maker reap the benefits as petroleum prices continue to increase worldwide.

Toyota’s main line business today remains design, production and sales of passenger cars. It even manufactures passenger trucks. The makers sell their car under the name of Toyota and Lexus, and in the US under the name of Scion Marques. Toyota continues to be among the most profitable car makers in the world and a record holder in terms of profitability among Japanese companies.

Toyota’s top management aims to make the company the largest automotive company in the world. It wants to ensure that it continues to gain market share and also remain as the largest investor in the automotive industry.

Being a market leader and visionary, Toyota is now developing a car that will be powered only by solar energy. Though, it will take a few years for the planned vehicle to hit the market, the company is working on it so as to ensure that it does not lag behind in the field of technology in the coming years.

Toyota auto makers realise that the competition is only going to get tough in the coming years. Every auto maker in the industry is working to become the market leader in this field. Thus, it is developing various new generation cars to maintain its leader’s position in the near future.

Toyota is doing everything it can to clean up its public image due to the recent recalls and no-sale announcement. Toyota has launched new ads featuring customers saying, “Their next car will be a Toyota” plus offering huge incentives to customers such as 0% for 60 months on 8 models, incredible 36 month lease programs on 10 models. The offers don’t stop there, Toyota announced a 2 year maintenance program for Owner Loyalty. That simply means that if you own a Toyota, Lexus or Scion – you don’t need to trade it in – and purchase a new Toyota, you get 2 years of free maintenance. Is this enough to lure customers back into Toyota showrooms?

I asked some local dealers throughout the Tampa area to find out how February was and if they noticed any difference with the new programs in March.

David Bertoncini, Sales Manager, Autoway Toyota, Pinellas Park, FL had this to say about the recall, “Our store was up from February 2009 vs. February 2010. We were up 25% in new, 35% in used, it maybe bad publicity, but it was publicity. Toyota is looking for a 100 car increase for us in March 2010 vs. February 2010. We still gotta keep going.” David continued, “60% of the people that buy Toyota, will keep buying Toyota, no matter what. 30% of the people need to be resold on Toyota, the quality, the safety, the reliability and the other 10% we might lose to the competition.”

When I asked David what his thoughts were on the incentive programs and if he had noticed an uptick in business he quickly responded, “Yes, business and traffic have improved and we are on pace to exceed our objective, we are looking for 300 new cars in March.” Autoway Toyota sold 179 new cars in February 2010, finishing in the top 10 in Southeast Toyota.

Mike Chaparro, Sales Manager, Sun Toyota, New Port Richey, FL told me, “The business was starting to rebound and we were on a roll, then the recalls hit. Overall that made the month tough, customers were leery, customers felt they were being neglected because they weren’t notified about their recalls soon enough, if their car was in the recall or not. It was tough trying to sell someone a new car while in the same showroom we had someone who was screaming mad at Toyota about the recall. However, when the month started to wind down, the loyal customers showed up and said they wanted to buy new Toyotas despite what was going on in the media. Customers said, ‘We have been driving these cars for 30 years, we won’t buy anything but Toyota.”

Hearing that instantly reminded me of what David had said about the 60%. Mike had this to say about the programs, “The new programs are stronger than death. We have been selling 7 or 8 new cars every day since the first day of the month. It is a buyer’s market right now and these incentives are gravy for them.” Sun Toyota finished February 2010 with 150 new cars, finishing 11th in Southeast Toyota. They are looking to sell 200 new cars in March.

Several other stores had asked that their employees not discuss the recall and its effect on sales. However, off the record I was told that service is of course slammed and most stores despite the recalls had business equal to or better than 2009.

Lee Johansen

You may be asking yourself this question lately especially in light of the news that several Toyota models have been recalled while a Lexus model failed an important Consumer Reports safety test. These are some of the worst days in the history of Toyota, challenging times for the world’s largest auto maker.

But should you avoid Toyota altogether? As editor for Auto Trends and The Auto Writer and as a columnist for a pair of regional print publications, your concern is something I hear of occasionally. Editors are always concerned about covering a potentially unsafe vehicle while some readers wonder if they should avoid Toyota completely.

It can be easy to make your decision based solely on what you’re hearing in the news. Some of what has come out about Toyota is valid, but opportunists have gotten in their bashes too. You need facts and an objective voice, something I will try to provide as someone who doesn’t have any “skin in this game.”

Fact #1 – Toyota is not as reliable as they once were. This apparently is true as the company grew so fast that they put aside some of the warning signs indicating certain problems were surfacing. Reports at this time are unclear, but we think Toyota may have known that their accelerator pedals were a problem as far back as 2006. While all manufacturers have to deal with quality issues at some level, how they handle problems is telling: are they coming clean or burying the truth?

Fact #2 – Toyota quality remains high overall. Yes, absolutely. Many consumer surveys and most automotive analysts agree that when it comes to the quality and value of Toyota vehicles, Toyota is at or near the top. Honda, Ford, Hyundai and Buick are among the brands which have fared well in recent years, while Toyota continues to score well across its Toyota, Lexus and Scion lines.

Fact #3 – Some of the criticism appears exaggerated. Unfortunately, this appears to be so. Much has happened over the past few months to cause worry for current owners and for those shopping for a new Toyota. Stories of a runaway Lexus flying off the road and killing all four occupants in California and news that a certain Toyota Prius had trouble stopping on the expressway is national news. The first story is valid, the second is doubtful. And, some members of the press are smelling blood and seem to be looking for a Pulitzer Prize. In any case, reading up on these stories can tell you much including whether claims are valid or are being trumped up.

Fact #4 – Customer sales remain strong, so Toyota will still be around. Toyota’s bad news is good news for buyers who aren’t worried that their accelerator pedal is going to get stuck, their SUV flip over or some other problem surface. To win back customers while assuring current, but nervous owners that they’re here for the long haul, the automaker is offering unprecedented discounts and financing to win your business. In March 2010 that translated to some of the strongest sales for Toyota as customers saw a bargain and decided to make their purchase.

My personal disappointment with Toyota parallels that of what some other people in this industry are experiencing: we long believed Toyota represented some of the best cars in the industry, even buying their products. But we’ve also discovered an insular culture, one that has greedily jumped to the top of the industry while stupidly ignoring problems, some quite serious.

Perhaps the one question to ask yourself is this one: Can I trust Toyota to provide me with a safe and reliable vehicle, one whose value has not been compromised by the latest recall or rumor? If you feel satisfied with your answer, then you’ll know what direction to take.

Matthew C. Keegan