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Toyota may have to extend deep discounts through summer

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Toyota may have to extend deep discounts through summer

04/16/2010, 9:20 AMBY DREW JOHNSON

Toyota’s runaway vehicle problem has suddenly transformed into a problem with runaway incentives. After launching a massive sales incentives program in March to lure customers back to showrooms, Toyota may have to continue its sales blitz through late summer.

Toyota began offering 0 percent financing and free maintenance in March to smooth things over with U.S. buyers, causing a dramatic jump in the company’s per vehicle incentives average. Toyota’s average vehicle incentives totaled $1,003 in March 2009, but ballooned to $2,568 last month. Moreover, Toyota may have to continue its incentives push well into the summer months.

“With what we can gather today, they’re going to have to continue this level of spending until 2011 models start to come in a meaningful way,” Jesse Toprak, vice president of industry trends at forecaster TrueCar.com, told Bloomberg. “That could mean until about August.”

The incentives rallied Toyota’s sales 41 percent in March, but April hasn’t been kind to the Japanese automaker. U.S. regulators announced earlier this month that Toyota “knowingly hid a dangerous defect” and the Japanese automaker was forced to stop global sales of its Lexus GX 460 SUV following a “do not buy” recommendation by Consumer Reports.



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