While on the surface it may seem like Toyota is surviving its sudden and unintended acceleration recall crisis, buyer interest in the Japanese automaker’s vehicles have drastically declined.
Toyota’s sales declined slightly in February and early signs are pointing to another strong performance in March but that’s only because of one of the most aggressive financing and cash incentives in history. Also, sales promotions haven’t really cut into the value of Toyota’s used vehicles. Kelley Blue Book reported Monday that the average year-over-year change in the 36-month residual values for Toyota vehicles is expected to increase 4.2 percent points in May-June. That’s only a little bit less than the industry average of 6.2 percent.
However, according to a market research study reviewed by Fortune, the recall issues for Toyota vehicles have battered the company’s reputation, including brand consideration.
In a research conducted by Hall and Partners USA, the company surveyed consumers who are currently considering buying a new car in the next two years and who would consider a foreign model.
The survey found that there is a 89 percent awareness of Toyota recalls and the impact of that number on those considering buying a Toyota was significant. Only more than half of those who were aware of recalls said they are “much less likely” or “somewhat less likely” to buy a Toyota in the future.
Toyota’s brand consideration fell 49 percent in February from 75 percent in January. That’s below Nissan’s 54 percent and on par with Ford, which scored 49 percent. GM’s Chevrolet brand came in with 46 percent.
– By: Stephen Calogera