One Year Later, Lingering Safety Concerns Not All that Ails ToyotaBy Michelle Krebs January 25, 2011
One year after Toyota's highly publicized recalls, some car buyers are still avoiding the brand, according to shopping metrics provided by Edmunds.com.
In December, 17.9 percent of car shoppers considered Toyota vehicles -- 2.3 percentage points below levels seen in December 2009, before the 2.3 million-vehicle recall for potentially sticky accelerator pedals. Overall, Edmunds finds that 2010 consideration for Toyota vehicles was down about 3.8 percentage points year over year.
In 2010, Toyota was the only major automaker to see a drop in overall sales (-0.3%), causing it to lose its No. 2 spot in sales and market share to Ford. The decline came even as Toyota offered the highest year-over-year jump in dealer incentives, which were up 33 percent in 2010 from 2009, according to Edmunds.com.
"Toyota needs to overcome not just the PR damage sustained by last year's recalls, but also the reality that its models are stale," said Jessica Caldwell, Edmunds.com director of pricing and industry analysis.
"In the last few years," added Caldwell, "Toyota's lineup has remained relatively untouched compared to the changes its top competitors have made to their fleets. In today's competitive marketplace, updating the product line is more important than ever, especially as most new car shoppers cross-shop online without much product loyalty, and many dismiss the cars that are lacking desirable new technology features."
Evolving cross-shopping patterns on Edmunds.com also demonstrate the diminished power of Toyota's brand. Consumers interested in traditional competitors like Nissan and Honda considered Toyota vehicles less often in 2010. Meanwhile, Suzuki shoppers - who qualify for higher interest rates, accept longer loan terms and make lower down payments, suggesting a lower economic status -- increased their Toyota shopping considerably in the last year.
In recent months, though, some specific Toyota models are elbowing back in on traditional competitors. The rate of Edmunds visitors cross-shopping the Nissan Altima with the Toyota Camry, for example, has approached levels seen before the reports of unintended acceleration captivated the media and its audience last year.
Earlier this month, AutoObserver.com reported that Toyota plans to release 11 new or redesigned vehicles (including Lexus and Scion) in 2011. Updates to the Camry and RAV4 - two of Toyota's traditional top sellers - are expected to be included in the 2011 Toyota redesigns.
"In the end, new products and new designs attract car buyers," said Caldwell. "Incentives work too, but new products are a far better investment for car companies long term."