The Other Side Of The See-Saw: Toyota Transaction Prices Lowest As Percentage Of Sticker Prices

by Paul Niedermeyer

Published: October 25th, 2010

the other side of the see saw toyota transaction prices lowest as percentage of

In almost perfect contrast to Ford’s rapidly rising average transaction prices ( previous post), Toyota is having to keep incentives and dealer discounts high in order to keep moving the metal. Automotive News reports that Toyota dealers, once money printing machines, are having to accept lower gross profits. Transaction prices on new 2011 models are the lowest, as a percentage of sticker prices, of all mainstream brands, according to TrueCar and Edmunds.com. And Toyota dealers aren’t denying it:

“We’re seeing it; the pressure is definitely on the bottom line, the gross line,” said Jack Wilson, president of Toyota of Vallejo, north of San Francisco. “I see no reason other than we’re still recovering from the recall situation. It’s a factor, and we can’t sit and not talk about it.”Despite the discounting at both the manufacturer and dealer level, Toyota has seen sales rise a meager 1% so far this year, while most of the rest of the industry is posting double digit increases. The discounts on the top-selling Camry have been particularly strong, in part due to its early introduction in the model year cycle.Dealers have long complained about their inability to get good margins on the Camry, America’s best-selling car for eight years. Through September, the Camry held a narrow sales lead of about 15,000 units over the Honda Accord.What’s more, Toyota sales are weighted heavily in two markets still rooted in recession, California and Florida. That could skew nationwide transaction price figures as dealers in those states become more desperate to sell cars.Toyota is determined to return to 2 million annual sales (1.5 currently) within three years. But Toyota’s factory incentives are still on the low side, industry-wide, putting more pressure on dealers to cut margins, in order to stay competitive. The result is the lowest transaction price as a percentage of sticker price on new 2011 cars.

Paul Niedermeyer

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6 of 26 comments

APaGttH on Oct 25, 2010

No, no, it can't, it can't be true. Toyota has bullet proof quality. They don't depreciate. My Corolla S is plenty sporty for me, whee! Lots of fun to drive. Lies. Vicious lies from the media out to destroy Toyota and pump up Detroit. It is all savage lies I tell 'ya!

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- Ixim on Oct 25, 2010
  
  Toyota's quality is at least as good as, oh, I don't know....GM's? And they still depreciate real slow, like, say, .....a Ford? Still as sporty as ever, too.
  
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- Johnxyz on Oct 26, 2010
  
  The last 2 posts were funny - thanks holden and ixim
  
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- Suprarush on Oct 26, 2010
  
  Yeah cause Toyota uses chassis for 30+ years and drivetrains that were obsolete for 20 years too! I love the spin you guys put on it. Fords still using a 10 year old platform and the old Mazda6 platform to build Fusions, GM used an Aisin (Toyota part owned) sourced manual transmission which Toyota hadn't used since 1992 (R154). Ford even sourced out an Aisin 6sp auto for the Fusion. The Escape hasn't changed in 10 years and they still use the same 3.0 V6, Ford releases a re-design of the Mustang in 2010 but didn't add drivetrain changes until a year after the "New" design? F150 has had a 5.4 forever (keep working on that!) The Ranger is as crude a vehicle that any manufacturer STILL has in production. But lets put 22" chromes and ugly fascia on everything, then the John Q public will know we're back. Ya, D3...you're the same ugly girl you were in high school.
  
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Ixim on Oct 26, 2010

Supra, tell how us REALLY feel about the auto makers' products, especially the D3's. There's a genuine swing back to D3 vehicles - call it "buy American"; "Toyota let us down"; whatever, they're NOT the same ugly girl from 4th period lunch. It's real, IMO.

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- Suprarush on Oct 26, 2010
  
  IXIM The bottom line is Toyota is held to different standards amongst the auto industry. Could you imagine keeping the same vehicle around for 10 years while changing nothing more than content (sync) and headlights? Even in the heralded F150, it sells almost half of what it did 10 years ago? And Eco boost and turbo chargers? There just getting this now? Toyota was doing this 25 years ago, I laugh at the EPA numbers on cars with Turbos, they're no where close to being real and are done without any load? Again what is mechanically wrong with Toyota rubber floor mats? It was a witch hunt from the beginning with the government adding their spin on things. Toyota has already been cleared of any wrong doing but the damage has already been done. And yes the D3 are just as UGLY, but with far more make-up, and Daddy bought her some jewelry to boot!
  
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