Toyota Customer Retention: Breaking Up Is Hard To Do. Or Not

To the victor go the spoils. Who will be the victors, and how much spoilage will be there in the protracted Toyota battle? Of course, this is all in the name of safety and the children, and any sales dislocations will be unfortunate collateral damage. Really.

As optimistic as Toyota might want to be, over the next few months, their sales will decrease. They already do decrease. “Toyota’s US sales tumbled 16 per cent in January from a year earlier and are set to record another hefty fall this month,” reports Financial Times. Stoppage of deliveries and production, topped by a media onslaught, can have that effect.

Maybe Toyota’s ideas of an increased warranty and more incentives will work, long term, but in the short term, they’d better prepare themselves for negative numbers at the end of each month ahead.

As the first law of thermodynamics infers, energy cannot be created or destroyed, merely transposed. If customers are leaving Toyota, they don’t just disappear like Toyota‘s reputation for reliability China’s interest in US debt, they have to go somewhere. So where will they?

The price research site TrueCar.com (via FoxNews) says that the searches for the recalled Toyota models had dropped off by almost half. 25 percent of the lost traffic absconded to Ford, another 25 percent made off to Honda, whilst 20 percent hopped over to Hyundai.

The virtual spoils of war went – not surprisingly – to three marques with reputations for quality and reliability (let’s not get sidetracked by the fact that Ford announced a recall recently, as did Honda.)

TrueCar thinks their numbers are significant, because TrueCar usually gets a lot of traffic from shoppers looking to get a final run-down of the numbers as they close in on closing the deal on a new vehicle.

Competing site CarGurus.com came up with a report that found something slightly different. Like TrueCar, the Gurus found less clicking on Toyota and more on Ford. But CarGuru’s visitors did nor flirt with Honda or Hyundai. They pulled up the pages of that other pinnacle of quality and reliability, Chevrolet. Yes, CarGurus found that GM’s products were seeing increases in traffic to their brands.

Back to Financial Times. The pink sheet finds “little sign so far of a stampede to embrace” Toyota’s rivals. They cite Art Spinella, president of CNW, an Oregon-based market research group, who said: “The long-time Toyota owner considers this a pretty major issue, but the faith in the brand is still strong.”

CNW research shows that the proportion of prospective Toyota buyers who have decided to opt for another brand had fallen to 7 per cent, from 18 per cent immediately after last month’s recall of eight models with potentially faulty accelerators. Customers are a fickle bunch and prone to changing their minds for on a dime.

Weighs in Dave Cole, chairman of the Center for Automotive Research (CAR, get it?) that UAW and Detroit industry-funded mouthpiece think-tank. Cole hopes cautions that any flight from Toyota is likely to start slowly but could easily snowball. Drawing from extensive Detroit experience, Cole says: “Car owners are notoriously disloyal.”

While some armchair generals see massive desertions amongst the Toyota ranks, and some are not so sure, other analysts predict that Toyota could regain most if not all of its lost market share with a vigorous marketing campaign and reassurances on quality.

Time and most of all hard sales numbers will tell. Until then, it’s reading of green tea leaves.