Toyota Wants You To Come Back: Mulling Incentives, 10 Year Warranty

Bertel Schmitt
by Bertel Schmitt

Here’s something positive you may get out of the Toyota recall debacle: Cash on the hood and a Hyundai-like warranty. Reuters says that Toyota is discussing a range of options with its U.S. dealers to support sales.

Toyota already gives a $1,000 “loyalty bonus” to match monies offered by GM, Ford, Chrysler and Hyundai to Toyota customers who want to abandon their brand. Toyota is now thinking to pay a total of $2000 to returning Toyota customers, an anonymous source told Reuters. If this turns into a bidding war …

Other options Toyota under debate are a free maintenance programs and/or a new warranty program that at least matches Hyundai’s 10-year, 100,000-mile powertrain warranty.

Toyota spokeswoman Celeste Migliore said the company reviews many options to remain competitive for each month, but declined to comment. However, Don Esmond, senior vice president of Toyota Motor Sales, told Reuters that Toyota will consider “competitive incentives.”

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  • Namstrap Namstrap on Feb 14, 2010

    Thanks for the song. It was an important thing to me a long time ago. I'd totally forgotten about it. Didn't even know the name of the band!

  • 50merc 50merc on Feb 15, 2010

    A great "incentive" would be to stop their distributors and dealers from padding the MSRP with crazily overpriced mandatory add-on. Oh, and some paint colors other than silver, dark gray, real dark gray and black.

  • Crash sled Crash sled on Feb 15, 2010

    Once Government Motors cuts out excess production capacity, and stops rolling out iron indiscriminately, with accompanying sales incentives, you'll likely see their residual values stabilize, and begin to approach Toyota's. Incentives can then be used when appropriate, and not continuously. Forget all the goofiness the marketeers blather on about, as the customer is sophisticated enough to see through that smoke, and the most important factor in customer choice is 5-year cost of ownership. While I'd agree that "quality" factors into this cost, sales price and resale value will always weigh heaviest, and this has hurt the Detroit 3 these couple decades. Close some plants... sell Hertz or equal... decouple from your finance arm... these have been moves in the right direction.

  • Maverick Maverick on Feb 15, 2010

    Extending the warranty to a 5/100,000 doesn't really alter the landscape. It's carpet bombing a solution where Toyota really needs to target any incentives selectively to current Toyota owners. Let's say owners who purchased 2005+ MY vehicles. Customers that are likely to make a purchase in the next 6 - 24 months. What you want to do is get customers back in the dealership and forming (or re-forming) a relationship with the dealership. This might include a offering select in-channel benefits such as free oil changes, next major service (i.e. 15/30/45 mile service), car washes, etc that would make it hard for GM, Ford, Honda and Nissan to duplicate. Plus when the car is in for service: car wash and gas fill. If Toyota were to just extend warranties, the competition can match it in a second. Loyalty cash from Toyota could become conquest cash from GM, Ford, Honda, Nissan and Hyundai. So Toyota needs to come up with some creative ideas, rather than the same-old, same-old. Toyota needs to tell current owners that we screwed up, current owners are important to us, and we are going to make it right.