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Reputation takes hit, but signs of life emerge

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Reputation takes hit, but signs of life emerge

Mark Rechtin

Automotive News -- March 1, 2010 - 12:01 am ET

LOS ANGELES -- While Toyota's leaders were being grilled in Congress last week, market researchers were seeing further decline in the company's reputation among consumers.

Some say the damage is severe and may be long-lasting.

The consumer pricing site True Car.com predicted that American Honda Motor Co. would outsell Toyota Motor Sales U.S.A. for the first time ever in February.

BrandIndex, which tracks consumer sentiment, calculated that Toyota's image -- in free fall since the end of January -- has continued to worsen since Toyota executives' appearances on Capitol Hill.

But other industry trackers think the damage, while painful now, will fade by the end of the year. And there also are signs that some consumers are putting Toyota and Lexus back on their shopping lists.

Honda outsells Toyota?

TrueCar forecast that Honda and Acura would sell 82,981 vehicles in February, compared with 80,543 sales for Toyota, Lexus and Scion.

Other gainers at Toyota's expense would be Ford, Hyundai and Mazda.

Much of the Toyota slide followed the interruption in sales of eight models, or about 60 percent of the company's lineup, in late January and early February. But consumer skepticism has played a part as well, said Jesse Toprak, TrueCar vice president of trends and insights.

Toprak does not see Toyota's sales swoon continuing, especially if the Japanese automaker cranks up incentive spending in March, as expected.

For the year, he estimates Toyota will lose 1.5 to 2 points of market share, compared with about 5 percentage points for February.

A Toyota spokesman declined to comment on the automaker's sales pace. Last year, Toyota Motor Sales held 17.0 percent of the U.S. market.

The company has taken a major hit in consumer sentiment. At the beginning of the year, Toyota was the highest-ranked brand in the BrandIndex automotive sector, with an index score in the 40s.

On Feb. 23, Toyota's score was zero, translating into an equal number of positive and negative reactions, according to the research group's consumer polling. Only Chrysler and Hummer rank lower.

After two days of testimony in Washington, Toyota's BrandIndex score dropped to minus 1.8

“The drop in score implies a serious problem for Toyota,” said Ted Marzilli, BrandIndex global managing director.

“When we have seen drops of this magnitude, the recovery period has been a minimum of six months. In this case, with the prolonged news cycle that the brand has gone through, we expect the impact to last closer to a full year.”

Despite tough questioning aimed at Toyota by Congress and critics, the automaker is large enough to ride out a yearlong media storm, some analysts speculate. But they also say that a spate of class-action lawsuits or more deaths linked to unintended accelerations would keep the controversy alive.

Blowing over?

“Right now, it's a firestorm, hot and negative,” said Efraim Levy, an equity analyst with Standard & Poor's. “But once it blows past, Toyota has the wherewithal to sustain such a hit and move forward. This is a company that is a leader in quality, that is integrated into the economy. They have consumer good will.”

Some consumers already are starting to forgive the automaker. Both TrueCar and Edmunds.com are seeing a recovery in consumer consideration for Toyota products.

Edmunds.com's measurement of “purchase intent” -- when a shopper on its site configures a vehicle online -- found that intent for Toyota, Lexus and Scion vehicles stood at 18.2 percent during mid-January. While the rate dropped to 13.6 percent soon after the late January recalls, it had rebounded to 15.4 percent on Feb 22, and held steady the rest of the week.

And while Honda and Acura purchase intentions showed a quick spike, they have since subsided nearly to pre-recall levels, according to Edmunds data.

Compete Automotive, which tracks consumer shopping intentions, says Ford has regained its lead over Toyota as the brand with the most inmarket shoppers.

Lincoln Merrihew, an analyst with Compete's automotive consultancy in Boston, said Toyota's February statistics showed “some softness but nothing catastrophic.”

He thinks a sizable number of Toyota intenders are not shopping other brands but are pausing to see how the recall situation plays out before making their purchases.

Said Merrihew: “If consumers reach a Toyota showroom, a good salesman can say whatever he needs to say to close the sale.”

Read more: http://www.autonews.com/article/20100301/RETAIL03/100229883/1018#ixzz0gw9bWZN0

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Another in-depth look at toyota company image, yet again missing the major factor of the company recalling SO MANY vehicles over the last 10 years.

>>" This is a company that is a leader in quality,"<<

Not with 30 million recalled vehicles, it isn't, and hasn't been for some time.

6 months to a year to 'ride out'?? How about more like 10 years?

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Yet Toyota Motor Co. sales were up 45% in August. The sheep don't seem to care how many recalls Toyota makes, they keep buying them.

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That's because, per usual, the media falls flat on it's face WRT doing it's job.

If anyone bothered to do any math, it would go viral.

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In August, the Camry outsold Chrysler and Fiat put together. The new Camry is a sales hit, I'm not sure what the competition has to do to unseat it.

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A real reporter which America seems to be lacking these days would do a report on this and blast it across the wire to everyone.

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But...but...American cars suck. Everybody knows that.

Yea that is why my 94 suburban has 300,000 miles and still pulls strong. I wonder if it is because people do not want to deal with Maintenance every 30K miles and tune ups, they just want to treat an auto as if it is an appliance and drive it to 100K, trade it in for someone else to have to deal with and get a new appliance.

We have become such lazy ass people in America. But then our quality has gotten better. :P

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