Toyota Deals Get Customers Back To Showrooms
Toyota's recent, aggressive efforts to offer incentives and special deals to get customers into showrooms and buying cars seem to be working. The latest data show that Toyota sales are rising sharply.
Sales had been down with all the gas-pedal recall news. Cars were piling up at dealerships. And now, as they say in the car business, Toyota wants to "move the metal" — meaning it wants to sell a lot of those cars.
"Right now that pendulum of, 'Can I get a good deal or not get a good deal?' is way over on the customer's side of 'I can get a good deal,' " says Robert Boch. He and his brother run the Expressway Toyota dealership in Boston.
In the front of the showroom, all the specials are written out in purple marker on a whiteboard. It used to cost $299 a month to lease a new Prius. That's now been cut nearly in half to $179 a month. And there's zero percent financing on just about all the most popular Toyota cars.
According to Boch, a customer got zero percent financing on a Tundra and saved a lot of money. "The gentleman financed about $40,000 on that truck. He saved $5,775 just on the interest," he says. And he got another $4,000 off the sticker price.
Deals like that are definitely getting people into the dealership again.
"We're on pace this month to sell 125 new Toyotas," says Boch.
That's nearly a 70 percent increase in sales over last month. Edmunds.com, which tracks the auto industry, just came out with its latest dealer survey that shows that nationally, Toyota has seen a sharp rebound in sales. According to the survey, so far in March, Toyota has regained the same market share of sales that it had before the gas pedal recall.
But that doesn't mean that things are back to normal. Toyota's throwing a lot of money at people to get them to buy cars. And some Toyota customers are still worried about whether their cars will go speeding out of control, even though the odds of that happening on any given car are extremely low.
Christine George, who's at the dealership to get the oil changed in her 2008 Highlander, says all the Toyota news makes her nervous.
"I bought it because I have three kids. I needed the third-row seat. I almost bought the Honda, and I was like, 'Jeez, maybe I should have bought that Honda,' but I didn't," George says.
Some Toyota owners around the country have gotten so worried that they've traded in their cars and bought one from a different carmaker.
But a lot of the people here at this dealership really aren't that concerned.
Elaine Choi and her husband own a Chinese restaurant in Quincy, Mass. They drive a Toyota 4Runner and brought it in for an oil change. She's not worried about the acceleration issues that have been in the news.
"It's not a big deal, I think," Choi says.
"I just have two co-workers in my restaurant, they just bought a Toyota Camry. It's a beautiful car and very comfortable," she says.
It turns out that her co-workers had heard about the zero percent financing and bought new Toyotas for around $20,000 each.
Across the showroom, Carol Brown has come in to shop for a Toyota. Brown says she's also looking at Nissans, but she's not worried, either, about the acceleration problems.
"If Toyota is so bad, why are all these people still coming in to shop, you know?" Brown says.
Every other car has problems, not just Toyota, she says. And she's skeptical about the recent case of a runaway Prius in California. Toyota investigators are disputing the driver's claims in that case that his Prius accelerated out of control on a San Diego freeway.
Brown dismisses the incident as "just a hoax to get money. I hope they lock him up."
Weathering The Storm
Of course, there is always the chance that investigators will find some major new problem with, say, Toyota's electronics. But dealership owner Boch says he thinks Toyota could deal with whatever else comes its way.
"If something does emerge, they're going to fix it. They're going to stand behind their products. They've demonstrated that," Boch says.
And in fact, with sales up and customers coming back in, Boch seems to be getting a little of his car dealer swagger back. Standing in his repair shop, he says Toyota has been very profitable in recent years. It's still sitting on a mountain of cash that it could spend on incentives, and it's making good cars.
"You take $5 billion out of Toyota's war chest, well guess what? They got another $28 billion and can say, 'Let's go back to the marketplace and play.' So you want to take on Goliath? You gotta remember what made him a Goliath in the first place."
Analysts do warn, though, that Toyota is not out of the woods here. They say promotions tend to work well at first. But the company still has plenty of work to do to reassure many potential car buyers that it has really figured out and fixed its problems with unintended acceleration.
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