Toyota Still Draws New Customers

2011avalon
Despite months of turmoil surrounding Toyota's recalls, unintended-acceleration complaints and congressional hearings, sales data suggest that the brand's appeal remains, and not just among loyalists.

In March, 40 percent of the cars traded in for new Toyota models  were other brands. "They were about 60 percent our own owners and 40 percent conquest, which historically is about where we are," said Don Esmond, senior vice president of automotive operations for Toyota Motor Sales USA. The results are surprising because many within the auto industry, including Toyota itself, expected the fiasco to deter non-owners at a rate higher than Toyota's famously loyal owner base. "It was a bit of a surprise," Esmond said.

While zero-percent financing and other incentives drove Toyota's 41 percent sales increase last month, they don't account for the consistency of Toyota's conquest rate. "I think it's a sign that the strength of the brand is still there, that people still have good confidence in Toyota," Esmond said. "We did have some unprecedented deals, so from a competitive situation, if [consumers] were out shopping, they may have figured now's the time to get a Toyota into the family."

Esmond doesn't believe the incentives are pulling buyers forward — building sales now only to create a lull later on — which is always a risk with incentives. "A lot of it may be pent-up demand, where people had some concern about 'Where's Toyota going? Is it really as safe as I think?' " he said. "And I think several things have happened since then. Some of these incidents that we've been out investigating — I think people see the results that apparently, in many of these cases, it's not the car [that was at fault]."

One Toyota dealer believes the company's strong conquest showing was influenced, ironically, by competing brands' own conquest attempts. "People are upset with GM, Chrysler and Ford coming out with that $1,000 rebate to trade in your Toyota," said Jim Tessmer, vice president and co-owner of Jack Safro Toyota in Milwaukee. "They were insulted by it. Customers told us they'd never buy a car from them because of that reason. They said, 'You guys didn't do anything like that when they went through bankruptcy and their sales were down. You've been very classy. It's like kicking somebody when they're down.' I heard that from a number of people, and it surprised me."

Comments 

Paul

Car buyers find the stupidest reasons to buy a certain brand.
Mad at the others for having rebates for current Toyota owners to buy a competitive brand? C'mon....how about a $10,000 rebate from Toyota for covering up all these dangerous flaws? Get mad at who is devious and sly,not those looking for a competitive edge.

Darren

Toyota is quality, reliable, high resale, good design, and durable. Smart people will continue to buy Toyota's because they know Toyota still makes great cars and trucks.

Tony

Darren,

Toyota quality is questionable because it is sometimes good, sometimes bad. It used to be unquestionable while ago, when you could buy a Toyota and you knew that there will be nothing wrong with it.
Good design? - sometimes.
Mostly not overly good design.
Toyota is an average person's car. Car without ambitions. It is , as they say, appliance. It gives you comfort and function, but there will be little inspiration.
Anyway, whatever Toyota is today, it is still better then Chrysler, Ford and GM, better then Mazda too, better then Nissan, better then... Seriously. Honda has good cars but boy, they are not as good as people think.
Every manufacturer has a successful model here and there and not all Toyotas are good but generally, as sum of all models, Toyota is as good as it gets.
Ok, when I am 60 years old and I want a nice, big plush, comfy, and modern average car can I buy? No such Hondas, Mazdas, Nissans but Toyota will give me that Avalon. This is where Toyota is winning.

DL

There is a niche for an AWD minivan (e.g. my family). The dealers were pretty desperate to do business with us, that's for sure.

Ziggy

Cars should have ambitions and provide you with inspiration. Well I guess I learned something today. What ever happened to the whole "point A to point B" thing? It's just a car folks! Well...if your above average then don't buy toyota.

dee

Toyota is your average brand and simple thats what sell not all these gadgets and confusing center stacks other automakers are leaning toward today, my first new car was an 2007 Toyota Camry LE traded it in a little over 2 yrs for 2009 Acura Tsx and traded that in 8 months later for an 2010 Toyota Camry XLE that should say alot about Toyota.

DL

I agree with the the article that it's a good time to get a Toyota if you want one. If you look at even the 2011 Sienna, for which there is only a Military cash bonus, I was able to get below that famous invoice price by more than $1k. I also got a 3.49% APR for 60 mos, which is not bad.

The wife wanted something big for the carseat etc., we like AWD (it's like a status thing in NE), and I don't like SUV's. That narrowed it down very easily for us. So Tony, some of us are quite limited when it comes to our choices and don't get to always drive exciting cars. :)

f

DL:
I believe kickingtires had a write-up on magnetic flames for your minivan. Get those and you can have your excitement AND your practicality.

sheth

if you offer 0% financing across the board for the first time in history sales will skyrocket. I'm not sure why anyone is acting surprise. If Mercedes or Porsche or any other brand that rarely offered impressive brand wide discounts did the same their sales would jump as well. The question is what happens after the huge incentives disappear. On a $30k car 0% financing is probably worth $6k or more. Is there any wonder Toyota is selling tons of cars considering that?

Symon

So why aren't the 0% offers working for GM?

Belly

"if you offer 0% financing across the board for the first time in history sales will skyrocket."
-Yeah it really works for Chrysler.

"Is there any wonder Toyota is selling tons of cars considering that?"
-Consider that they are getting fined by the feds and many people see those cars as deathtraps yeah I would say it is a wonder.

It just goes to show what Toyota did a long time ago to build brand equity. Things that other auto manufacturers ignored.

Amuro Ray

@ Symon,

BIG "OUCH!"

3xhehe

Tony

Do you guys actually consider that part of Toyota success is a factor of population diversity? Look around yourself. These people are no longer Americans as we know. Chinese, Indians, Hispanics from South and Central America. They are familiar with Toyota from their world just like old-style Americans were familiar with Chevys and Pontiacs. I rarely see one Indian driving American make. I have about 20 neighbors here from India and China. All of their cars but one are Hondas and Toyotas. Mostly Hondas. And one guy has Saab.
My Russian friends are more familiar with European makes and they all drive MB, Volvo, BMW. And when that is too much, they get Nissan, then Toyota, then Honda.
American population is different then it was once.

SFO

The American population is smarter today then it was ten years ago hence more Americans buying Toyota's instead of General Motors. As GM says 'May the better car win'. It is and it's called Toyota.

sheth

"The American population is smarter today then it was ten years ago hence more Americans buying Toyota's instead of General Motors. As GM says 'May the better car win'. It is and it's called Toyota."

Toyota passed Ford 1 of 3 months this year and passed GM 0 of 3 months this year. ford's share increased in 2009 for the first time in 15 years or so. Not sure how that validates your claim that Americans are flocking away from American cars like never before.

"-Yeah it really works for Chrysler."

Reading is fundamental Belly. I said "first time". Toyota has NEVER offered such and extensive program before. chrsyler has been offering huge discounts for at least 3-4 years. When you do something for the FIRST time it has a huge impact. GM experienced a similar jump when they did employee pricing a few years back. Their sales declined in later months because of so many pull ahead sales. Toyota is now doing the same thing.

"So why aren't the 0% offers working for GM?"

Is GM offering 0% across its lineup? No. You really don't know much I see. GM's hottest products have virtually no incentives. Find out how many free financing deals are on camaro, Equinox, Lacrosse, Terrain and SRX. let me know what you find and if you prove me wrong I will be the first to admit it. GM decreased incentive spending last month- Toyota increased to record levels. BAsed on Honda's lackluster results in March it appears Toyota took a lot of potential Honda customers. Nissan and Ford did really well and GM did pretty well.

"-Consider that they are getting fined by the feds and many people see those cars as deathtraps yeah I would say it is a wonder."

What person with common sense thought that all Toyota's were deathtraps? The media has come out in full force to assure people Toyota's are safe. Combine that with the fact that many of the recalled cars have been repaired and record incentives and you get predictable results. Stop trying to make the problem seem more serious than it was in order to glorify the incentive based results from last month. If GM, Hyundai, Honda and Ford offered the exact same deals last months Toyota wouldn't have been able to pull off a 40% jump. Its that simple.

DL

@ f,

You can have the magnetic flames. I get in our G37 for a little excitement, sans poseur cosmetic gaudiness.

Belly

"Reading is fundamental Belly. I said "first time".
-I know Motor Tre- sorry Shet. Like I said how did it work for Chrysler - the "first" time they did it?

"Is GM offering 0% across its lineup? No. You really don't know much I see."
-I believe the statement was, "why aren't the 0% offers working for GM" - no one said anything about "across the lineup." You are constantly adding words to what people say. Who has the comprehension problem?

http://www.nytimes.com/2010/04/02/business/02auto.html

"Ford and G.M. were each offering zero-percent loans..."
-They did appear to work for both GM and Ford, as both also saw gains of 40% over March sales in the previous year. That "first time" correlation just doesn't seem to be there though... not surprising.

But as for GM incentive spending:

"Susan Docherty, GM's marketing chief, said the automaker's incentive spending dropped in March...Citing data from the research firm J.D. Power and Associates, she said GM's March incentive spending was $2,800, down $200 from February and $2,000 less than March of last year.

But the industry analysis firms TrueCar and Edmunds.com predicted that GM's March incentive spending would lead major automakers at more than $3,500 per vehicle, well above the industry average of roughly $2,800."
-Hah!! So now you and GM's brass are lying about incentives! What a joke.

http://www.cbsnews.com/stories/2010/04/01/business/main6353737.shtml

sheth

"-I believe the statement was, "why aren't the 0% offers working for GM" - no one said anything about "across the lineup." You are constantly adding words to what people say. Who has the comprehension problem?"

No comprehension issues. If someone asks "how are the offers working for GM?" that infers they are discounting their entire lineup like Toyota. They are not. In fact, none of their newer products have any appreciable incentives. So in summary, the offers arent working for GM partially because they dont have as many offers.

""Ford and G.M. were each offering zero-percent loans..."

Never said they weren't I said show me the incentives for Lacrosse, Equinox, Camaro, etc. LEt me know where I can get any of them for 0%. Meanwhile virtually every Toyota is now available with free financing for 5 years. The point I made was that the FIRST time you make these offers the response is impressive. After the public gets used to them you cannot generate the same level of buzz with free financing. Its a nonevent for GM/Ford simply because they started this years ago.

"-Hah!! So now you and GM's brass are lying about incentives! What a joke."


Look up the word "prediction" in the dictionary and get back to me. All incentive numbers from edmunds are estimates, they dont have access to any automaker's internal data. This is why they say they ESTIMATE the true cost of incentives. Look up "estimate" when you get your dictionary.

Thanks.

Belly

"how are the offers working for GM?" that infers they are discounting their entire lineup like Toyota."
-No, they actually mean just what they said. How are the zero percent offers working for GM. Well how are they?

"In fact, none of their newer products have any appreciable incentives."
-What exactly is an "appreciable" incentive? Is that one that GM doesn't count, or just you? Or is it that GM doesn't count dealer incentives as well as national ones... Look up the definition of "psychobabble" when you get your dictionary.

"I said show me the incentives for Lacrosse"
-3.9% for 60 months according to GM website. That must not be appreciable though because it doesn't match Toyota's right?

"The point I made was that the FIRST time you make these offers the response is impressive."
-Yet you backed up with, let's see, nothing. You can say it but that doesn't make it true... unless you say so. FACT!! Yeah, you got it!

"Its a nonevent for GM/Ford simply because they started this years ago."
-You bet it is.

Katie

I think the American public is absolutely foolish for buying Toyota. It makes no sense at all!

EUGENE

I have 2007 Lexus ES350 that got recalled for a problem I never had. I never had even ONE little problem with this Lexus. I owned a 2006 BMW 330 prior to this vehicle and I've had problems with it from DAY ONE, and I'm not exaggerating. Every month or so I would get some kind of electric problem with my brand new BMW which takes a day or two to fix. For example, my BMW seat weight sensor malfunctioned, and the seat belt chime will go off constantly. It doesn't matter if someone's sitting there or not, the chime cannot be turned off. It took 7 days for BMW to get a new part for it from Germany. So I got a new X5 as a loaner. Guess what. After an hour in to drive, X5's seat belt chime also started going off constantly! For 7 days I had to hear the damn seat belt alarm constantly. What a bummer a bimmer is. I would buy another Lexus in a heart beat. Okay, wow, so Toyota/Lexus isn't perfect, huh? Other brands/competitors are far worse.

mike

any car is good if u trade it in every few years, if you go for the long haul Ford is your best bet. I have six fords with over 200 thousand miles on each and only have ever had to deal with regular maintenance. My friends continue to have brand loyalty to toyota despite the fact they trade in their toyota brand cars every year to 2 years because they are having problems with their current toyota car/or pickup.

E

Yea no doubt I have had and seen TONS and TONS of late 80's early 90's Fords, GMs, and Chryslers with well beyond 200k with nothing major. No smoke, starts right up, even AC stills works, then you see a 150k-180k mazda/nissan/toyota/honda there smoking like crazy, your about to pass out from all the blue smoke billowing behind it and its on its 10th muffler in 5 years. Just look around, you see 10x the ammount of GM/Fords/Chryslers from the 80's still rollin around than you do decent clean running hondas and toyotas.....

mike

check the record. The highest quality rating goes to Ford,over 90 percent. Toyota and GM have a quality rating below 50% and no surprise Chrysler is even less than that. Fact out truth Ford is making better cars than toyota.

mike

u stupid toyota buyers (retards) dont be deceived get smart, learn how cars and trucks are made. ford pickups and semi-trucks (deisel rigs) have the same type frame,thats tough. dodge,Gm and toyota pickups use the same type frame that a uni-body frame strightner can bend, not tough. In 2008 Gm is trying to up grade their to frames, to match ford. get down under look at every part u will see that toyota is not better. its just in ur mind or what other retards are telling u.(get smart.) every car toyota sells in the usa $10,000 of our tax money goes to japan, is that smart?

Belly

You tell em Mike!

Sheth1487

If Americans weren't so stupid buying foriegn pieces of garbage, GM and Ford would be the only vehicles on the road which is the way things should be.

Send all the japcrap and other imports back to Japan where they belong and take their import buying fools with them.

Neither of them belong in this Country.

Native

Let's move back where our ancesters came from and give this land to native american indians who are legit owner of this country.

mike

Native what does this have to do with cars? Do u want to go back to no cars,no electric,no easy chair,no going to store to get food. have to ride for miles to get food. I just dont think u have looked that far down the road .it was a hard life for the indians not so hard now. alot of my indians friends are getting checks from the white man and food for they can set in their easy chair and hate the white man. I am part indian and i am glad to be here today not on a horse and arrows to eat think about it its a no brainer

I can't drive for two freaking seconds without seeing a camry.

I can't drive for two freaking seconds without seeing a camry.

droid

Google "overall most dependable vehicles." I did and I have found over snd over that only a couple of ford and GM models fit that, meaning people are using those stats for information to argue. Over 85% of ALL Toyota vehicles are still recommended. All the rest are below 50%. And saying that imported vehicles with less than 200k are smoking? My Toyota has 215k and doesn't smoke like that. One previously had 298k when I sold it. It wasn't smoking either. Funny how some people talk about how long the big 3 lasts, and say that WE are going on Toyota's past for reliability, when in fact, Toyota still is. My uncles work in a large garage, and have for many years. They told me after the number of imported vehicles on the road increased, they soon realized who keeps their doors open. The big 3. I go out there all the time and talk to them. They tell me that they KNOW without a doubt that Toyota, Honda and Nissan are better than the big 3, and they have fewer toyotas coming in for work, other than oil changes. High mileage Toyotas, low mileage big 3. I have watched the big 3 roll in there time and time over, wondering, what now?

So don't give your fake percentage of two or three models of the big 3 being great compared to imports. Our sheriffs office claims over the years that in the end, GM proves itself over Ford and dodge. And they want to buy Toyota and Honda for cop cars, but, we only get new cop cars with federal grant money, and they won't let us buy anything but the big 3. And the impalas V6 is honestly slower and underpowered compared to Toyota and Honda. Look it up. Garages can show you the autos worked on the most, just ask them. If they say just as many imports, ask them how many are simple fixes. Brakes, wipers, fuel filters, etc...if they say its mechanical, chances are, they are partial to one of the big3, or all.

Two of the big3, NOT as many dodges, have been in my whole family for years, and imports too. We know from experience that imports ARE better. End of story!

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