Toyota sales sink in January; Ford and GM post gains
Toyota Motor Corp., reeling from two recalls and suspension of sales of many popular models, sold 18,500 fewer vehicles in the U.S. in January than it did a year earlier, a stark contrast to other automakers that posted gains amid signs the industry was entering a slow but steady recovery.
With the dramatic shift, some industry experts believe that a new round of incentives and price cuts could erupt when Toyota moves to regain lost market share.
“Other automakers, as desperate as they are for customers, will take advantage of Toyota’s misery and be more aggressive with their incentives,” said Jesse Toprak, an analyst at TrueCar Inc. of Santa Monica, which analyzes new car pricing.
Toyota sold 98,796 vehicles in January, down 15.8%. It was its lowest for the month since 1999. The Japanese automaker suffered broad declines for many of its bestselling nameplates caught up in the recall.
Sales of Toyota’s Camry, its most popular model, fell 24%. The Corolla fared a bit better, dropping 11%. Tundra, the company’s full-size pickup, plunged 45%.
Meanwhile, General Motors Co. saw its sales rise 14.6% to 145,804, a total that includes several brands the company has discontinued or is selling off. Sales of its core Chevrolet, Buick, GMC and Cadillac nameplates rose 30%, GM said.
“In the U.S., we are seeing a strong rebound in manufacturing and stabilization of consumer confidence, which will support a slow but steady improvement in the vehicle market,” said Mike DiGiovanni, GM’s chief sales analyst.
Ford Motor Co. sales jumped 24.4% in January to 112,149 vehicles compared with last year, according to Autodata Corp., which compiles the numbers.
The gains by its rivals occurred as Toyota came under intense scrutiny over unintended acceleration. The company has blamed sticky gas pedals and floor mats. Last week it stopped selling eight of its most popular vehicles, amounting to 60% of its dealer inventory.
On Monday, Toyota said it had isolated the problem with its gas pedals to a “friction device” within the pedals. It has sent parts to dealers and plans to start repairs later this week.
The unintended acceleration issue, which has prompted a congressional probe, is testing the loyalty of some Toyota customers.
Mike Kennerknecht, the owner of a 2004 Camry and self-described Toyota fan, says he is so “utterly disappointed” with the company that he is considering trading his car for a Ford as early as this weekend, especially with a slew of attractive incentives being offered.
“We’re definitely in the market for something new,” Kennerknecht said. “And a lot is going to be in the hands of other manufacturers as to where we go.”
Toyota continued to apologize to customers and said it was concerned about lasting damage to its market position. “We are aware that we have quite a bit to do to regain the confidence of our customers,” spokesman Mike Michels said.
Analysts said it was unlikely that Toyota would allow rivals to poach its business. “We expect Toyota to use its formidable resources to fight back,” said Efraim Levy, a Standard & Poor’s equity analyst.
Ford has launched a program aimed directly at Toyota owners, offering a $1,000 trade-in bonus to buyers who bring in a Toyota vehicle. GM is offering special financing and deals to Toyota owners. Mazda Motor Corp. and Hyundai Motor Co. also rushed deals into the marketplace.
In Southern California, Toyota is defending its turf by offering $500 to $3,000 “customer cash,” depending on the model, and an extra $100 to each salesperson who seals a deal.
Although the expected price reductions are great for consumers, the bump in discounts comes just as the auto industry is starting to regain some measure of control over pricing. Automakers have been trying to reduce discounts and raise their sale prices.
Some analysts believe any price war will be contained because automakers are not as willing to trade profits for market share.
GM’s incentives are designed to coax Toyota loyalists into its showrooms, but the automaker has no intention of engaging in a larger incentive battle, said Susan Docherty, GM’s vice president for U.S. sales.
“We feel that the health of our brands speaks for themselves,” Docherty said. “There is no need for an incentive war out there.”
Times writer Tiffany Hsu contributed to this report.
