(NECN: Peter Howe, Warwick, R.I.) Recalls, runaway Priuses, now a Cape Cod crash the driver blames on a sticky Rav 4 accelerator: Toyota's under siege over safety concerns these days. But Toyota still has millions and millions of loyal customers -- and is suddenly beginning to offer the kids of deals and discounts shoppers got only from Detroit carmakers.
Toyota Corolla owner Sandra Cohen of Cranston, R.I., speaks for lots of Toyota owners when she says, "I definitely would get another Toyota" when the time comes to get a new car. "I had five cars prior to the Toyota, and this one has lasted longer than any of the other cars I've had -- and four of them were brand-new cars.'' She had her 2005 Corolla in at the dealership to get a broken mirror fixed.
Sarah Basu of Providence, who began leasing a Rav-4 in April after years of shopping for an affordable Toyota, is among those who don't dismiss conspiracy theories about a disproportionate response to Toyota problems by the same federal government that owns big stakes in General Motors and Chrysler trying to do "whatever they can do to make American cars number one again So many years everything has been right with Toyota. Suddenly, they're finding problems. I guarantee you if you were to nitpick every American company out there -- Ford, G.M., Chrysler -- you would for sure find some small problems.''
Now while Toyota can count on a loyal base of millions and millions of satisfied repeat customers, it's not taking any chances. This month it's offering some of its most aggressive incentives and discounts in history, trying to make sure buyers keep flocking into dealerships. Among them: no-interest car financing for five years; leases that have been cut to $169 a month for Rav 4's ($50 less than last month) and as low as $139 a month for a new Corolla.
"Where are you going to get a car for $139 dollars a month? You're not. So that's a good way of getting new customers in,'' says Peter Fitzpatrick, general sales manager of Balise Toyota in Warwick. Another new offer: up to two years of free scheduled maintenance on a new purchased Toyota for current Toyota owners, including all the oil and fluid changes and other owner's-manual-schedule checkups, through the first 25,000 miles of driving.
"Toyota has never done this before,'' said Fitzpatrick, a two-decade auto-industry veteran who's been selling Toyotas for seven years. "Toyota's going all-out to hold onto their customer base and win back" lost business.
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Ernie Boch Jr. of Boch Toyota in Norwood, New England's highest-volume Toyota dealership, said Tuesday in an NECN interview, "Sales are getting better. Remember, we couldn't sell 60 percent of our inventory" in January and February when it was under a federal do-not-sell order until Toyota came up with mechanical fixes to prevent accelerator sticking. "That's all set now,'' Boch said. "People are coming back. They're buying the cars. Toyota is doing great incentives on the vehicles, so it's a good time to buy.''
Boch, who also owns a Honda dealership, noted that Honda's "Accord is ahead of Camry'' -- the comparable higher-end four-door sedan -- "in sales right now, and Toyota will not lose, so big big incentives are on and coming for the Camry and Corolla,'' Boch said.
I H S Global Insight automotive expert John Wolkonowicz in Lexington, Mass., has strong criticism of how Toyota has managed the recalls and sudden-acceleration crisis, saying in his view the company has repeatedly stonewalled and prematurely declared problems fixed, only to have new problems appear. But he added, "The marketing that they're doing now is outstanding -- an incentive plan that's unbelievable. What a lot of people are missing is: Toyota is waging a price war on the industry.''
Wolkonowicz said, "Toyota has committed $2 billion of extra marketing and incentive money for the second quarter of this year. That's an incredible amount of money on top of what they would normally spend They're advertising Camry leases at $169 a month. We've never seen anything like that. Now that puts the pressure on all the other auto manufacturers.'' Wolkonowicz added, "You could write a scenario that even with all the problems Toyota is facing they're gonna come out with increased market share. You could see a double-digit share increase year over year in March.''
He added that the question of whether a given car shopper will still consider Toyota one one front "depends on how old you are and how long you've owned Toyotas. If you're a baby boomer ... and you've owned Toyotas for years, you've had good luck with those Toyotas. Those people right now are taking advantage of some really good deals right now to take advantage of a car they wanted anyway.''
For Toyota, Wolkonowicz said, "Probably at this point 75 percent of the business is secure. The other 25 percent can be regained with the right type of marketing -- and that's what they're embarking on right now.''
Indeed, that's why for many prospective Toyota buyers, like the 2005 Corolla owner Sandra Cohen of Cranston, their top questions right now aren't about safety. As she expresses it: "Financing? Any good deals coming up in the near future?"
