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Posts Tagged ‘toyota incentives’

Toyota Turns to Fleets to Inflate Sales

Japanese maker borrows tricks from Detroit playbook.

by on Feb.20, 2012

Toyota has been ramping up incentives and fleet sales to prop up the new Camry.

Struggling to regain sales and market share momentum after months of production shortages, Toyota is lifting a few plays from its Detroit competitors – notably bumping up incentives and dumping the new Camry and other products into low-profit fleets.

The strategy may generate strong year-over-year sales numbers after the sharp downturn the maker suffered in 2011, but it suggests Toyota may be finding it harder to lure back once-loyal buyers in today’s hotly competitive market. The shift could also make it difficult for the maker to reverse its recent earnings downturn as it trades sales gains for lower margins.

(Toyota earnings slide 14% during latest quarter. Click Here for that story.)

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January’s numbers initially seemed strong, Toyota posting an overall 7.5% increase, year-over-year, the maker giving much of the credit to the redesigned 2012 Camry.  “This month’s results show that the all-new Camry is a hit, attracting both new and loyal customers with its class-leading performance and value,” said Bob Carter, Toyota Division group vice president and general manager at Toyota Motor Sales, U.S.A.

But a closer inspection reveals that fully half of the Camry sedans were dumped into daily rental fleets.  Excluding those vehicles, Toyota sales would be up a far more modest 1% for January.

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Sales Up but Transaction Prices Slip

But customers continue moving up-market.

by on Feb.03, 2012

With products like the Elantra flying out the door, Hyundai (and sibling Kia) had the lowest industry incentives last month - but also the lowest average transaction prices.

Trend or just a temporary setback?  In recent months, buyers have been steadily moving up-market while also adding significantly more content to the vehicles they buy.  Along with cutbacks in the typical industry incentive package that has rapidly driven up the price motorists pay – the average transaction price, or ATP, in industry lingo.

But while January saw a surge in sales, preliminary data suggest they may also be reining in their spending by focusing on lower-priced, less lavishly-equipped models.

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Including cars, light trucks and crossovers, the typical motorist spent $30,512 in January, according to car pricing information tracked by TrueCar.com, a 0.6% decline from December.  But while that’s a notably reversal of recent trends, it doesn’t appear to signal an end to the industry’s current upward momentum, analysts stress.

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Toyota Raising Prices – Cutting Incentives

Will others follow – or could it backfire?

by on Apr.01, 2011

Dealers have been tacking on as much as $3,000 extra for the Toyota Prius, lately. Now the maker will raise its prices, as well, by more than 2%.

Toyota plans to raise prices on almost its entire line-up on May 1st, a move many observers had anticipated in light of the Japanese auto meltdown that has cost the maker hundreds of thousands of units in lost production.

Dealers have already begun raising prices, according to various reports, hoping to take advantage of the supply shortage, which is expected to grow worse in the coming weeks, and analysts say the giant Japanese maker is hoping to get its share of the potential bonanza.

But in light of the maker’s worse-than-expected 5.7% decline in sales during March, some observers warn that Toyota may be setting itself up for further setbacks.

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The increases average about 2.2%, though they vary by model and brand, with some slower selling models, like the Scion xD, seeing prices rise by as little as 0.4%.

“It’s Business 101,” says analyst Jim Hall, of 2953 Analytics.  “It’s supply-and-demand and they’re trying to make up the revenue they’re losing with the rolling blackouts in Japan cutting production.”

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Has Toyota Kicked Off New Incentives War?

Givebacks could position Japanese maker as #1 in market.

by on Apr.22, 2010

Toyota's big incentive campaign could make it #1 in the U.S. market for April - and touch off an industry-wide incentive war.

After suffering huge sales declines during the first two months of 2010, Toyota could be positioned to pull off a miraculous recovery for April, possibly even pushing past General Motors to become the nation’s top-selling automotive manufacturer for the month.

If that happens, the still-troubled Japanese maker will owe credit to some of the most lucrative incentives it has ever offered in the U.S. market, something the maker had sworn to avoid until its safety scandal sent sales tumbling.

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The question is whether Toyota’s new-found fascination with rebates and other givebacks will wind up touching off the sort of profit-killing incentive war that the industry had hoped to avoid as it emerged from the most devastating downturn since the Great Depression.

“Clearly, when a major competitor pulls out all the stops (we) can’t sit idly by and watch that happen,” warns Bob Lutz, General Motors’ soon-to-retire vice chairman.

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Toyota Retains Large Incentive Advantage

Only Honda spends less attracting shoppers; others far more.

by on Apr.02, 2010

Pedals, smeddles, Toyota moves metal as well as any automaker and at far less cost.

For every $500 that Toyota offers in incentives, other automakers have to counter with incentives ranging from $420 to more than $3,000 to generate the same consideration levels among new car shoppers, according to a report from CNW Research.

The data are for equivalent cars among brands.

The study was conducted during the first quarter of 2010 when Toyota unintended acceleration woes dominated national news coverage, shows that with the exception of Honda, major automakers still lack the innate advantage that Toyota’s reputation has among new car buyers.

During March, Toyota, helped be record level incentives, saw sales rebound to pre-recall levels. About 40% of Toyota buyers came from other makers last month.

Among the big six makers in U.S. sales, Honda retained its consideration advantage, since it only has to spend $425 to Toyota’s $500, continuing a Honda edge, varying from $325 to $475,  that has existed for a decade, according to CNW.

Chrysler was at the other end of the scale, needing $3,100, an all time high for the decade.

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Incentive Equivalent Big Six

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Toyota 500 500 500 500 500 500 500 500 500 500 500
GM 1,950 2,100 2,075 2,150 1,975 1,850 1,125 1,175 1,500 2,000 1,750
Ford 1,550 1,475 1,550 1,575 1,525 1,375 1,525 1,575 1,500 1,250 950
Chrysler 1,750 1,975 1,650 1,525 1,075 1,525 1,775 2,050 2,275 2,675 3,100
Nissan 1,275 1,350 1,150 1,025 875 900 1,025 1,050 1,050 1,075 800
Honda 350 325 325 375 350 425 475 450 425 450 425
Source: CNW Research. Calendar Years, in U.S. dollars. The ratio is Toyota $500 : Other Brand. 2010 data are Q1

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U.S. Auto Sales “Tracking Very Strongly”

Incentives help key makers, notably Toyota.

by on Mar.15, 2010

Auto sales are trending up an incentives, like those on the 2010 Toyota Corolla, get much of the credit.

Spurred by some of the heftiest incentives in some time, industry observers report seeing significant signs of growth in the U.S. auto industry during the first part of March.

At least one well-regarded analyst is forecasting that demand could reach an annualized rate of 13 million for the month overall should the pace continue.  That would be one of the best months the American market has experienced since the recession began, in late 2008, excluding the impact of last year’s Cash for Clunkers program.

“U.S. auto sales ar tracking strongly,” said Deutsche Bank analyst Rod Lache, in a new report, adding that “several factors appear to be contributing to the uptick.”

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Among the most significant forces in the market: an increase in incentives spending by makers like General Motors and Toyota.  The Japanese makers has traditionally been reluctant to put much money on the hood, but heeded dealer calls for an incentive campaign after the disastrous, double-digit decline in sales, last month.

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Q&A: Toyota’s Don Esmond

"We stumbled," admits vet, but incentives are helping sales.

by on Mar.11, 2010

"Our owners deserve an answer," says Toyota's Senior Vice President Don Esmond.

“Sometimes I feel like it’s back in 1969 and I’m flying medevacs, taking fire and occasionally getting hit,” says Don Esmond, a slight grimace showing through his smile.

A decorated helicopter pilot during the Vietnam War, Toyota’s senior vice president of automotive operations is once again maneuvering through a battleground, but this time it’s the company taking flak for an ongoing series of safety issues that have led to the recall of more than 8 million vehicles – and which have been tentatively linked to a rising number of accidents, injuries and fatalities.

In typical fashion, Esmond has been focused on his mission, or more precisely, missions.  The first challege, he says, is to make sure Toyota’s products are safe, even if that meant briefly shutting down five U.S. assembly lines.  With the plants going, the next step is getting all products involved in the recalls repaired.

But longer-term, Toyota has to rebuild a seriously tarnished image and regain its once daunting momentum – something Esmond admits will be “a little more difficult under the circumstances.”  But a new incentive campaign, putting as much as $3,000 on the hood of some Toyota models may be doing its job, early sale numbers suggest.

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To get a better sense of what’s happening and what’s ahead for Toyota, TheDetroitBureau.com caught up with the veteran Esmond in the midst of a series of “fireside chats” with the company’s dealers.

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Incentives Paying Off Big for Toyota

Dealers reporting huge gains in sales as cash deals overcome buyer concerns about recalls.

by on Mar.11, 2010

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.

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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.”

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Toyota Throws Record Incentives at U.S. Market

After a 9% sales slump, Toyota goes on marketing offensive.

by on Mar.02, 2010

Under pressure to turn around a share and sales slump, Toyota is spending big.

Toyota Motor Sales, U.S.A. today announced plans to launch what it called its “most far-reaching sales program in its history.”

This latest development followed the  announcement that Toyota sales had declined 9% in February, moving far behind number two General Motors in the U.S. market.

Particularly worrisome was a drop in “first time buyers” during the month.

A “stop sale” of its most popular models  because of safety recalls at the beginning of the month cost Toyota an estimated 18,000 vehicle sales, according to Bob Carter, group vice president and general manager of Toyota Division for Toyota Motor Sales.

Starting today, through April 5, 2010, the national marketing program includes financing, leasing and customer loyalty offers. Highlights of the program include:

  • 0% APR financing for up to 60 months on 2010 Avalon, Camry, Corolla, Highlander, Matrix, RAV4, Tundra and Yaris, for qualifying buyers.
  • Low lease rates on 2010 Avalon, Camry, Corolla, Highlander, Matrix, Prius, RAV4, Tundra and Venza, for qualifying buyers. Examples include a Corolla lease for $179 a month and a Camry lease for $199 a month, although offers may vary regionally.
  • Complimentary two-year premium maintenance program for customers who purchase or lease a new vehicle and provide proof of a Toyota, Lexus or Scion vehicle already registered in household, with applicable conditions.

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Toyota Readying Big Discounts, Longer Warranties

Struggling maker will pitch deals to win back buyers.

by on Feb.15, 2010

Struggling to overcome the damage done by a series of safety problems and an expanding list of recalls, Toyota is expected to try to win back skeptical consumers with a bevy of new discounts, as well as extended warranties.

While final details have yet to be determined, the maker is running a variety of ideas past its American dealers, who have been gathered in Orlando, this weekend, for the annual convention of the National Automobile Dealers Association.

Traditionally, Toyota has shied away from big rebates and other incentives, but the maker has ramped up givebacks, in recent months, hoping to counter the impact of the ongoing American recession.  Now it could add$1,000 or more to its offerings, according to sources, in an effort to overcome growing concern about the safety, quality and reliability of its products.

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The maker also is reportedly considering longer warranties, perhaps matching the 10-year program offered by fast-rising rival Hyundai, of South Korea.  The programs would be launched by the beginning of March. And the new package could add free maintenance, as well.

“Toyota has got to be aggressive on this,” the Bloomberg news service quotes Mike Maroone, chief operating officer of AutoNation, the largest American automotive retailer. “Toyota has to put a wall around its customers.”

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