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Toyota Incentives Good Through May, But Starting To Go Flat?

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2010 Toyota Sequoia

2010 Toyota Sequoia

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It's still a little too early to assess the aftermath of Toyota's monumental recalls, but there are mounting indications that the brand's long-term reputation has been tarnished a bit.

Over the past couple of months, Toyota has gotten its sales back on track—and then some—with the help of the company's strongest U.S. incentives programs ever. Through March and April, the automaker has been offering zero-percent financing and other deals including, in April, two years of free maintenance for most buyers.

Toyota sales slumped in January and February due to all the recall issues, then after a very strong March due to the new incentives, sales were still up markedly in April but in raw numbers fell 16 percent from March to April.

The incentive programs are now extended through June 1, but eventually the company will need to taper them off and, analysts are predicting, sales might not return to their pre-recall levels.

MSNBC reports that data from Edmunds.com is showing that fewer consumers overall might be considering Toyota. Near the end of December, before the highly publicized recalls, 20 percent of shoppers were considering Toyota vehicles; but by mid-February, when the recalls were in the headlines daily and Congressional hearings were looming, consideration went down to 15 percent, with purchase intent for the Toyota Corolla dropping near the five-percent mark in February.

After a quick bump with the initial incentives announcement Toyota's overall purchase intent has only gone up to 16 percent—a potential indicator that a lot of shoppers have simply taken Toyota off their list.

There's also the concern that incentives will eat away at Toyota's strong resale values. Many of the federal civil suits against Toyota, concerning the recalls, attempt to hold Toyota responsible for its vehicles' loss in resale value.

This past winter, several leading pricing authorities—including Automotive Leasing Guide and Kelley Blue Bookadjusted most Toyota products slightly downward in anticipated resale value.

[MSNBC]

 
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