Toyota expects to fix more than 70% of recalled cars

BY TIM HIGGINS

ORLANDO, FL – February 15, 2010 – (Motor Sports Newswire) – While Toyota remains mired in embarrassing recalls, dealers gathered here say they are excited about a major marketing push the Japanese automaker has slated for March and noted that the company’s payments to fix recalled cars and trucks will help offset lost sales.

“When we roll out on March 1 … you’re going to see a lot of good programs for the customers to reassure them. I think it’s going to be great,” Kent Newbold, who owns a Toyota dealership near St. Louis, said on the floor of the National Automobile Dealers Association’s annual convention in Orlando.

He added: “I think these are sales that are delayed, not sales that are denied.”

Toyota sales fell 16% in January, as the company stopped production of millions of cars because those models are being recalled for possible unintended acceleration.

The Japanese automaker already boosted rebates on some models, such as its popular Camry and Corolla, but an aggressive new incentive program is in the offing.

Toyota has a news conference scheduled later today, after a scheduled meeting with many of its 1,460 dealers at the convention.

Meanwhile, dealers don’t seem overly concerned about the sales they lost in January.

“In the near term, we take a hit from the disruption of sales but in the mid- to long-term we … recover it on repairing all of the cars,” said Mike Jackson, CEO of AutoNation Inc., the nation’s largest chain of auto dealerships. “At the end of the day, it is a wash.”

Toyota anticipates fixing vehicles

Toyota expects more than 70% of the vehicles being recalled because of a problem that could lead to unintended acceleration to get fixed, a top company executive told the Free Press.

In an interview Saturday, Don Esmond, Toyota Motor Sales’ senior vice president of automotive operations, said that already, 400,000 vehicles had been repaired in eight days. He noted that most recalls result in a repair rate of about 60% or 70%.

“I think this will probably be higher,” he said.

He also said the Japanese automaker intends to make a major marketing push in the weeks ahead.

“We’ll get back into selling cars in March … and make sure that dealers have competitive incentives,” Esmond said from the sidelines of the National Automobile Dealers Association convention, which ends today in Orlando.

He also seemed to hint unhappiness with attempts by General Motors and other automakers to lure away Toyota and Lexus customers with incentives targeting Toyota customers, following Toyota’s decision to shut down production in order to fix issues with unintended acceleration.

“I have a long memory,” Esmond said.

He questioned the success of such programs, saying: “I don’t know that we have seen any great results coming from that.”

Loyal customers

Toyota dealers, meanwhile, say their customers are remaining loyal to the brand and that they expect the money they will make fixing accelerator pedals will help offset lost sales.

Toyota, whose 1,460 dealers are repairing gas pedals on as many as 2.3 million vehicles, saw sales fall 16% in January. Dealers are reimbursed for the parts and service being done.

“That’s not the way we want to make our money, but we’re getting to see some people that we wouldn’t normally get to see in our service drive,” said Kent Newbold, who owns a Toyota dealership near St. Louis.

“And at the same time we can say, ‘We in suburban Washington, D.C., echoed those comments, saying that over time the recall repairs will help her dealerships.

“Forty percent of our customers don’t come to us for service, they go to aftermarket places. … This is an opportunity. We’re getting them back in our dealership to have the recalls performed,” Darvish said. “I want those customers to walk out and say, ‘Damn, why don’t I always come here?’ ”

She said her Toyota dealerships have appointments scheduled all the way through March to do recall repair work.

Loyal dealers, too

Paul Walser, a Minnesota Toyota dealer, said he had confidence in Toyota.

“I tend to think they’re going to come back from this. It’s going to hurt for a little while but they’re an awful good company,” he said.

Toyota is slated to meet with its dealers today in a closed-door session at the National Automobile Dealers Association meeting, after which executives from the automaker are expected to hold a news conference.

SOURCE: Detroit Free Press

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