By on March 6, 2010

When Toyota stumbled there were (muted) shouts of glee around the car producing world. “Yay! They fell flat on their face! Let’s pick up the pieces.” Well, nobody said it openly, but action speaks louder than words: Ford and Hyundai revved up their “quality” aspects (wink, wink) GM and Chrysler fired up their incentives (it’s all on the taxpayers, so who cares?) Ford and  Hyundai said “to hell with subliminal messages” and followed with the money. Even Nissan couldn’t help themselves and offered a bounty to deserting Toyotaphiles. February came and went and Toyota only registered a 9 percent drop (year on year after the carpocalypse). This was quite confusing. Especially given the fact that production had been halted and dealer stock was quarantined until fixed. Analysts had predicted double digit drops and were surprised themselves. Everyone had expected something out of a George Romero film to happen to Toyota. So, suddenly, this turns into an Agatha Christie story. “Who benefited from Toyota’s stumble”?

From Korea, The Chosun reports: “It wasn’t us!” They say they expected Hyundai-Kia to snap up absconding Toyota customers, but as they put it: “Hyundai and Kia, which were initially expected to be the greatest beneficiaries of Toyota’s woes, saw their sales in the U.S. rise 10 percent in February on-year, less than the 13 percent overall market growth seen that month. The sales results show that the Korean carmakers still need to do more to win over U.S. consumers. Declines in sales at Toyota translated directly into rising sales of similar car models at Ford, Nissan and Chrysler, but not at Hyundai and Kia.”

The Chosun posits that it must be Ford and GM who benefited from Toyota as Ford’s figures shot up 43 percent and GM’s rose 32 percent. But this doesn’t sit well either. As our Lord Niedermeyer reported, Ford’s fleet sale rose 74 percent and GM’s grew 114 percent. This accounts for the majority (but not all) of Ford and GM’s growth. Not to mention GM loaded up on leasing, too. So, now things are extremely hazy. If Hyundai-Kia and Ford didn’t win retail customers over with their quality and GM and Chrysler didn’t woo customers with their incentives, then who did? The most likely candidate would have to be Toyota’s cross town rival, Honda. With the Accord shooting up 41 percent, its close image to Toyota and even Acura growing through its CUV’s, it would seem that they are the main beneficiaries of Toyota’s woes. But until they break out those fleet sales, we can never be sure.

While Toyota has their feet dragged across hot coals in the United States, elsewhere around the world, Toyota’s problems aren’t as bad as they seem. In Australia and Canada, Toyota’s sales have reached record highs. In the UK, Toyota’ sales fell only 5 percent. Which isn’t bad, when you consider that Toyota doesn’t really have a loyal fanbase here, and what is here is fickle and prone to abandon their prior purchase in a heartbeat. Couple this with the facts that Toyota’s incentives were low (in comparison to the competition) for February 2010 and that they plan to ratchet them up for the following months, and you have an interesting next few months ahead. Is it time to start up a “Toyota Deathwatch”? Not yet, let’s see how the next few months go.

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18 Comments on “Who Benefited From Toyota’s Woes?...”

  • avatar

    Honda seems like the natural and logical choice for Toyota defectors.

    I did think Hyundai would do a bit better, but it’s not surprising when you think about it – their quality rep is good, but not as good as Honda’s.

    That Ford may have picked up some Toyota customers really puzzles me – and frankly I’m doubtful.

    • 0 avatar

      Why would you find it hard to believe customers would jump ship from Toyota to Ford? Both Ford’s advertisements and the third party media such as Consumer Reports have been harking on and on about how Ford’s reliability is shooting up rapidly, and is in many cases equal or better than that of Toyota, while at the same time the media is all over how Toyotas aren’t as good as they once were. It doesn’t take a genius to know it’s a good idea to jump off of a sinking ship onto one that is just beginning to unfurl its sails.

      At the same time a lot of current Toyota customers were previously Ford (or GM, or Chrysler, or Nissan, or whoever else’s) customers. People who jumped to Toyota after a bad tranny in a Taurus are now seeing Toyota isn’t infallible and are making the jump back.

  • avatar

    A consumer base as blindly loyal educated as Toyota’s does not typically turn face and run at the first sensational headline. A more likely reaction is to stick to what they believe, and dismiss the scandal as a buying opportunity. But nothing lasts forever. If the bad news continues some of it will eventually start to sink in, and Toyota’s juggernaut days will be over.

  • avatar

    It’s the marketing machine that’s important. Data is ultimately irrelevant. This is America after all.

    Toyota needs to continue to repeat over and over again that they are safe and reliable. Their base will continue to purchase their vehicles regardless of what happens with a few exceptions…those folks that actually crashed and burned.

    Even those folks who don’t buy Toyotas will admire Toyota for staying the course and not flip-flopping.

  • avatar

    With all the dialog about Chrysler’s nasty fleet sale numbers for Feb and how Ford and GM also had high fleet numbers, I am amazed (no I’m not) that I haven’t seen anything about Toyota’s fleet sales.

    Jan and Feb are big months for fleet sales, and Toyota is a part of that.
    Does anyone know what Toyota’s fleet numbers were for February and what their retail decline was?

    I would not be the least bit surprised that fleets were more loyal to Toyota in February then were the retail buyers.

  • avatar
    Steven Lang

    You are missing one vital ingredient for the North American market.

    The tax refunds out here have grown to an absolutely insane degree and they appear to be heavily concentrated in the February thru March timeframe.

    As a result, most of my dealer friends have very few vehicles left in their lot. Folks who had fifty to sixty vehicles just acouple months ago now only have about ten or so. I actually have emptied my lot to the point where only the front side has my vehicles. The entire backside which covers an acre is completely empty.

    This current debacle with Toyota will be felt for years. It won’t be fatal by any means. The only times these things can be fatal is if you’re dealing with a fringe player in the marketplace, which Toyota is not. It will greatly effect their ability to convert non-Toyota loyalists and you will likely see greater mention of the ‘cheapness’ built into Toyota products.

    Who benefits? Everyone who isn’t Toyota.

  • avatar
    John Horner

    I agree, the most obvious beneficiary is Honda. The Accord and Camry are probably two of the models most often considered by one and the same buyer.

    Also, I would argue that today’s Accord is a better car than today’s Camry is. The cheapness of the Camry interior (especially the center dash area) really lets that product down.

  • avatar
    crash sled

    I doubt that any OEM benefits from this recent Toyota hysteria, certainly not in the long term.

    However, in the short term, I expect Government Motors will continue to use Toyota as a foil for its own failings. We’ll see how long this lasts.

    • 0 avatar

      How could GM possibly spin this to their advantage?

      “Look! Now Toyotas are as crappy as we are!”

      Now that’s a value proposition I could buy into… not.

      I think we’re too early in this situation to accurately assess what people will think in the future. I believe there may be more developments and revelations (and just not Toyota alone) to come. I think every company has a skeleton or two in the closet. I think we’re seeing the opening of the door to more disclosure about safety issues. I’m hoping that after this situation is over, that we will see some more transparency from industry AND government concerning these issues.

      But I’m afraid I will be disappointed.

  • avatar

    There’s also the “wolf” situation. Too many cries, too much hype over everything, everywhere. Media fatigue has set in. A very small number of criers, strident and loud, does not affect the market like they would like to think. It’s one reason word of mouth is so powerful.

    It’s all a matter of trust.

  • avatar

    I don’t think anyone could factually claim that anybody benefited. Who is to say Toyota’s reduced numbers aren’t simply a result of the days they didn’t sell most of their models including all of the popular ones?

    This needs to play out for another couple of months before we will know even if Toyota has an actual sales drop let alone who benefited from it. Because Toyota didn’t sell vehicles for however many days last month I don’t think you can compare their numbers to the manufacturers that did sell all month.

    I would agree that Honda is most likely to benefit and I think Ford to a lesser extent.

  • avatar
    Rick Korallus

    Since this mess started, we’ve only had one person in our showroom say they were here to buy a Honda instead of their other consideration, a Toyota. Accord sales appear to be up due to attractive lease specials, and since Honda does not do fleet sales, it cannot be attributed to that either. The service customers that I’ve informally polled about Toyotagate all had one comment in common: after all the wrongs they’ve suffered at the hands of the Detroit 3, they’ll never ever go back. Most see this as a Government Motors conflict of interest and do not buy in to the MSM b.s., lunch break is over, gotta go!!!

  • avatar

    As long as we’re trying to connect the dots let’s turn to the bigger picture of Toyota’s woes. Who benefited? So far, the UAW:

    This “generosity” was not created by public displeasure manifested as declining car lot sales. It was created by Washington and its friends, who just happen to own Toyota’s competitors and have a vested interest in extorting concessions from Toyota by any means necessary:

    Cui Bono, indeed.

    The declining car sales will be welcomed by Washington & Co. because it helps pressure and frighten Toyota, thus encouraging “flexibility”. Even if Toyota only knows there’s something happening here and what it is ain’t exactly clear, the company is already absolutely certain there’s a man with a gun over there telling them they’ve got to beware.

  • avatar

    While this entire fiasco will grind some of the luster from Toyota’s reputation, I’d say that it’s too early to write off Toyota.

    GM had the massive motor mount recall with 1965-69 Chevrolets, followed by the Vega, along with real declines in build quality in the early 1970s. But sales remained strong through the early 1980s.

    If Toyota keeps messing up, as GM did, THEN it will be in real trouble.

  • avatar

    How long until we see a renewed attempt by the UAW to organize Toyota’s factories in the US? I’m sure that unionized workers, being (of course) more safety concious, would help Toyota to address its problems with the NHTSA.

  • avatar

    Toyota – The 1985 Camry was twenty years ahead of Detroit. Now, Toyota has lost their way. The world does not need Toyota. Certainly if it is fair to bash the Detroit 3, it is fair to bash Toyota. Toyota has to provide reasons for customers to buy their cars. The burden is on the manufacturer. More and more, I can’t think of any reason to buy a Toyota. I find more appealing products elsewhere, including the other Japanese car manufacturers.

  • avatar

    I like to think of myself as a reasonably prudent investor, two weeks ago I took a pass on the new toyota and joined the subaru club instead. For me it’s all about the resale and ease of moving on to the next new car when the time comes. If people actually call you when you place your ad for the used whip this can be a good thing.

  • avatar

    I own a 2004 Honda Accord, I really love this car(V6 6SPD coupe) but I cannot honestly say that it is reliable or particularly well built. Honda is coasting on their Rep just like Toyota was, got the Accord out after the winter snow and surprise none of my dash lights work anymore, Brakes are made of mush and the front rotors warp so quickly it’s insane. Interior is cheap, ABS/TCS control module failed and I’m not forking out $1400 to replace it. Third gear syncros for the 6spd transmission were uh subject of a “Technical Bulletin” which is like a recall that you get to pay for? Anyway(disclaimer: I am not really sure how the process works since I have had no problem with mine, but that is the impression I got from others). Now part of the “Honda Factory Performance” bodykit is falling off(cold broke down the adhesive I think, probably not entirely their fault). Had 76k When I bought it and it is now at 110k. My experience has not been one of reliability, gorgeous looks: yes, decent gas mileage: yes, performance that’s fun yet not stupid enough to get in trouble with: yes, Reliable and well built: that’s a negative.

    I expect much better reliability will come from companies like(IMHO) Hyundai, Subaru, or Ford who are still in the process of building a reputation for reliability and have not reached the point of critical mass where actual reliability is subjugated by clever marketing and a reputation that is no longer deserved.

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