Toyota Deals Get Customers Back To Showrooms
A mechanic works on a Toyota in a repair bay at the Expressway Toyota dealership. - A mechanic works on a Toyota in a repair bay at the Expressway Toyota dealership in Boston. Expressway Toyota has enjoyed a boost in sales that the carmaker has experienced nationwide. (Chris Arnold / NPR)
Toyota's recent, aggressive efforts to offer incentives and special deals to get customers into showrooms and buying cars seem to be working. The latest data show that Toyota sales are rising sharply.
Sales had been down with all the gas-pedal recall news. Cars were piling up at dealerships. And now, as they say in the car business, Toyota wants to "move the metal" — meaning it wants to sell a lot of those cars.
"Right now that pendulum of, 'Can I get a good deal or not get a good deal?' is way over on the customer's side of 'I can get a good deal,' " says Robert Boch. He and his brother run the Expressway Toyota dealership in Boston.
(Chris Arnold / NPR)
In the front of the showroom, all the specials are written out in purple marker on a whiteboard. It used to cost $299 a month to lease a new Prius. That's now been cut nearly in half to $179 a month. And there's zero percent financing on just about all the most popular Toyota cars.
According to Boch, a customer got zero percent financing on a Tundra and saved a lot of money. "The gentleman financed about $40,000 on that truck. He saved $5,775 just on the interest," he says. And he got another $4,000 off the sticker price.
Deals like that are definitely getting people into the dealership again.
"We're on pace this month to sell 125 new Toyotas," says Boch.
That's nearly a 70 percent increase in sales over last month. Edmunds.com, which tracks the auto industry, just came out with its latest dealer survey that shows that nationally, Toyota has seen a sharp rebound in sales. According to the survey, so far in March, Toyota has regained the same market share of sales that it had before the gas pedal recall.
Lingering Concerns
But that doesn't mean that things are back to normal. Toyota's throwing a lot of money at people to get them to buy cars. And some Toyota customers are still worried about whether their cars will go speeding out of control, even though the odds of that happening on any given car are extremely low.
Christine George, who's at the dealership to get the oil changed in her 2008 Highlander, says all the Toyota news makes her nervous.
"I bought it because I have three kids. I needed the third-row seat. I almost bought the Honda, and I was like, 'Jeez, maybe I should have bought that Honda,' but I didn't," George says.
Some Toyota owners around the country have gotten so worried that they've traded in their cars and bought one from a different carmaker.
But a lot of the people here at this dealership really aren't that concerned.
Elaine Choi and her husband own a Chinese restaurant in Quincy, Mass. They drive a Toyota 4Runner and brought it in for an oil change. She's not worried about the acceleration issues that have been in the news.
"It's not a big deal, I think," Choi says.
"I just have two co-workers in my restaurant, they just bought a Toyota Camry. It's a beautiful car and very comfortable," she says.
It turns out that her co-workers had heard about the zero percent financing and bought new Toyotas for around $20,000 each.
Across the showroom, Carol Brown has come in to shop for a Toyota. Brown says she's also looking at Nissans, but she's not worried, either, about the acceleration problems.
"If Toyota is so bad, why are all these people still coming in to shop, you know?" Brown says.
Every other car has problems, not just Toyota, she says. And she's skeptical about the recent case of a runaway Prius in California. Toyota investigators are disputing the driver's claims in that case that his Prius accelerated out of control on a San Diego freeway.
Brown dismisses the incident as "just a hoax to get money. I hope they lock him up."
Weathering The Storm
Of course, there is always the chance that investigators will find some major new problem with, say, Toyota's electronics. But dealership owner Boch says he thinks Toyota could deal with whatever else comes its way.
"If something does emerge, they're going to fix it. They're going to stand behind their products. They've demonstrated that," Boch says.
And in fact, with sales up and customers coming back in, Boch seems to be getting a little of his car dealer swagger back. Standing in his repair shop, he says Toyota has been very profitable in recent years. It's still sitting on a mountain of cash that it could spend on incentives, and it's making good cars.
"You take $5 billion out of Toyota's war chest, well guess what? They got another $28 billion and can say, 'Let's go back to the marketplace and play.' So you want to take on Goliath? You gotta remember what made him a Goliath in the first place."
Analysts do warn, though, that Toyota is not out of the woods here. They say promotions tend to work well at first. But the company still has plenty of work to do to reassure many potential car buyers that it has really figured out and fixed its problems with unintended acceleration.
9(MDAyNzUwMDI2MDEyNTA3MTU5NzcyNTQyNA004))
LINDA WERTHEIMER, host:
This is MORNING EDITION from NPR News. I'm Linda Wertheimer.
RENEE MONTAGNE, host:
And Im Renee Montagne. It's a tough time to be a Toyota executive, what with congressional testimony and class action suits. It's a surprisingly good time to be a Toyota dealer. Sales jumped this month and market share is back up to what it was before the gas pedal recall.
NPR's Chris Arnold has been following a Toyota dealership in Boston.
CHRIS ARNOLD: Over the past two weeks, Toyota's gotten more aggressive with its incentives and special deals. Sales had been down with all the gas pedal recall news. Cars were piling up at dealerships. And now, as they say in the car business, Toyota wants to move the metal - meaning they want to sell a lot of those cars.
Mr. ROBERT BOCH (Owner, Expressway Toyota): Right now, that pendulum of can I get a good deal or not get a good deal is way over on the customer's side, saying I can get a good deal.
ARNOLD: Robert Boch runs Expressway Toyota with his brother. In the front of the showroom, theyve got all the specials written out in purple marker on a whiteboard. The price for leasing a Prius has now been cut nearly in half to $179 a month. And there's zero percent financing on just about all the most popular Toyota cars.
Mr. BOCH: And trucks as well too. The best incentive we have, we made a deal with a customer the other day, zero percent financing on a Tundra. The gentleman financed approximately $40,000 on that truck. He saved $5,775 just on the interest.
ARNOLD: And he got another $4,000 off the sticker price. Deals like that are definitely getting people into the dealership again.
Mr. BOCH: We're on pace this month to sell about 125 new Toyotas.
ARNOLD: That's nearly a 70 percent increase in sales over last month. Edmunds.com, which tracks the auto industry, just came out with its latest nationwide dealer survey that shows a sharp rebound in Toyota sales so far in March, back up to the same market share Toyota had before the gas pedal recall.
But that's not to say that things are back to normal. Toyota's throwing a lot of money at people to get them to buy cars. And some Toyota customers are still worried about their cars speeding out of control, even though the odds of that happening on any given car are extremely low.
Ms. CHRISTINE GEORGE: It makes me a little nervous. I've been following it.
ARNOLD: Christine George is pushing her toddler around the showroom in a stroller. She's come in to get the oil changed in her '08 Highlander.
Ms. GEORGE: I bought it because I have three kids. I needed a third-row seat. I almost bought the Honda and I was like, jeez, you know, maybe I should have bought that Honda.
ARNOLD: Some Toyota owners around the country have actually gotten so worried that they've rushed out and traded in their cars and bought one from a different carmaker. But a lot of the people here at this dealership actually dont really seem too concerned.
Ms. ELAINE CHOI (Restaurant Owner): I said my husband has Toyota Foreigner.
ARNOLD: Elaine Choi and her husband own a Chinese restaurant, the Imperial Terrace in Quincy, Massachusetts. She's also brought in her car for an oil change.
And does it scare you at all, any of the Toyota stuff?
Ms. CHOI: It's not a big deal, I think. I just have two co-workers in my restaurant; they just bought a Toyota Camry. It's a beautiful car, you know, and very comfortable.
ARNOLD: It turns out two cooks at her restaurant heard about the zero percent financing and they each came in and bought new Toyotas for around $20,000.
And were they excited and happy, you know, when they...
Ms. CHOI: Oh, they were excited because one of them is a new immigrant so he bought a first car, it's Toyota Camry.
(Soundbite of laughter)
Ms. CHOI: Yeah, he's happy over that.
ARNOLD: Across the showroom, Carol Brown has come in to shop for a Toyota.
Ms. CAROL BROWN: If Toyota was all that bad, why are all these people still coming in to shop, you know?
ARNOLD: Of course, there's always a chance that investigators will find some major new problems with, say, Toyota's electronics. But for now, with sales up again, the dealership owner here Robert Boch, is getting some of his car dealer swagger back. He says Toyota has been very profitable in recent years. It's still sitting on a mountain of cash that it could spend on incentives, and he says it's making good cars.
Mr. BOCH: You take five billion out of Toyota's war chest. Well, guess what? They got another $28 billion and say, come on, let's go back to the marketplace and play.
ARNOLD: Analysts do say, though, that Toyota is not out of the woods here. It still has plenty of work to do to reassure many potential car buyers that it really has figured out and fixed its problems with unintended acceleration.
Chris Arnold, NPR News, Boston. Transcript provided by NPR, Copyright National Public Radio.
