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Toyota, Chrysler see better days

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Toyota, Chrysler see better days

Top officials upbeat at dealers meeting



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NEW YORK -- Toyota and Chrysler, two automakers who've had a rough start to 2010, said Tuesday the tide was turning.

Chrysler CEO Sergio Marchionne said the company ended 2009 with just under $5 billion in cash, and while sales to start 2010 were weak, he sounded more upbeat about the company's prospects.

Worries about whether Chrysler could meet its plan "was a song we had heard before and we were not fazed," Marchionne said.

At the same forum sponsored by the National Automobile Dealers Association and IHS Global Insight ahead of the New York auto show, Toyota U.S. sales chief Jim Lentz said the company had repaired 1.7 million vehicles under recall. He also said the automaker might have boosted March incentives too high.

"Our loyal customers are staying with us," he said.

Marchionne also offered some tempered praise for dealers, pledging that Chrysler would spend $500 million on its network this year and noted it had reinstated about 25% of the dealers it cut following last year's bankruptcy.

Actually, Chrysler has invited 86 rejected dealers to begin a process that may lead to them reopening. That is 11% of the 789 dealers whose franchises Chrysler terminated last June.

But he also said the arbitration for cut dealers pushed through Congress by NADA had created uncertainty that was blocking progress in other areas. "All the time taken up with this is unhelpful," he said. "There's an inequitable impact on Chrysler."

Lentz said the recalls had drawn Toyota closer to its dealers, and while saying the company made some mistakes in communication, reiterated that only mechanical flaws had led to sudden acceleration in its vehicles.

"We have 40 million cars with electronic throttle controls, and not one case of failure of ETCs that has resulted in unintended acceleration," Lentz said.

Lentz said 1.2 million of the 1.7 million recalled vehicles repaired so far were covered by the recall for sticking pedals. The earlier recall for floor mats will take longer, as some models need more modifications.

Toyota had boosted incentives at the beginning of March following the recall of 5.6 million vehicles. The deals were strong enough that Honda was forced to follow with its own cheap loan and lease offers.

One analyst has speculated that Toyota could outsell all other automakers in the U.S. this month.

Although Toyota has said its two recalls cover all known issues that can trigger sudden acceleration, roughly half of the complaints to NHTSA this year involve Toyota models not covered by either recall. Lentz said those could be a combination of driver error, publicity or other issues.



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