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Toyota On the Road to Rehabilitation

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author photo by Autotrader October 2010

Toyota Motor Sales USA is improving after a series of recalls and high-profile congressional hearings that dented the company’s seemingly bullet-proof reputation for quality and durability.

That proclamation was made by Don Esmond, senior vice president of the company that sells Toyota, Lexus and Scion vehicles, at an Automotive Press Association meeting in Detroit. “Obviously, it’s been a very difficult year for Toyota and, although we still have a lot of work to do, things are improving and we are moving forward.”

Esmond credits Toyota and Lexus dealers with finishing nearly 5,000,000 fixes on recalled models in the United States in nine months on more than 80 percent of vehicles with possible sticking accelerator pedals and more than 85 percent of the Prius/Lexus HS anti-lock brake recall. “That’s a remarkable achievement when you consider that, industry-wide, the average completion rate for recalls is 72 percent and takes twice as long,” he said.

Research found that Toyota owners who have had the recall work done are more loyal than owners not impacted by the recalls, he said. Toyota’s loyalty rate on new-vehicle buys in July, August and September were similar to 2009 and competitive trade-ins of 57 percent for the past two months were comparable to the end of last year, said Esmond. “Our customers are coming back and things are starting to return to the way they were before the recalls.”

Although Toyota’s three brands did see sales rise in the first nine months of 2010 compared to a year ago, the increase was only one percent to 1.31 million units, according to Automotive News. The automaker’s market share fell to 15 percent from 16.6 percent in the same period of 2009.

And although Esmond praised his dealers, the Toyota brand again ranked below average in customer satisfaction this year, according to researcher and consultant J.D. Power & Co. Lexus retained its top spot for the third year straight among luxury makes in J.D. Power’s 2010 study. Esmond predicts the Toyota brand will improve its standing in next year’s study, having already opened offices focused on quality, and to better detect and respond to customer issues.

Toyota is readying a new advertising blitz that will add safety to its traditional messages of quality, durability and reliability. Esmond said the campaign will help address any questions about safety, especially to first-time Toyota buyers.

Toyota has continued to invest in new products, with the new Scion iQ microcar arriving early 2011. Also next year, Lexus will begin offering the LFA supercar and sporty new CT 200h hybrid. Toyota will unveil the electric version of the RAV4, co-developed in a partnership with Tesla, at the Los Angeles Auto Show in November. It goes on sale in the U.S. in 2012, when more Toyota hybrids are coming, including a plug-in Prius. Esmond also promised a “battery-electric vehicle or two and a few other surprises.”

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Toyota On the Road to Rehabilitation - Autotrader