For the last few months, new car shoppers were willing to overlook Toyota’s safety troubles thanks to the company’s 0 percent financing and lease deals. However, those incentives are slowly losing their appeal and Toyota has a tough job ahead of winning over customers who no longer trust the Japanese brand.
Last week, Toyota said it will extend its incentives through June 1 and many analysts expect the company to keep the deals going through the summer. But after that, Toyota will need to face the true extent of the damage of its recall of more than 8 million vehicles over gas pedal and brake problems.
“The deck has been reshuffled,” said James Bell, an analyst with Kelley Blue Book. “There’s permanent damage there. It’s not fatal, but it changes the game. This makes Toyota compete in a way they haven’t in 25 years.”
Toyota’s sales fell 16 percent from March to April and there have been studies that show that new car shoppers are no longer considering the brand.
Toyota Group Vice President Bob Carter said that the automaker is focusing on incentives in the short term because it wants to remain competitive. “In the long term we’ve got to rebuild the brand to remove any questions or cautions consumers have on the street,” he said.
– By: Omar Rana