Recalls to hurt Toyota sales, help GM, Ford
Automotive industry analysts expect Toyota’s accelerator-related recalls to damage its US sales at least in the short term, and believe General Motors, Ford, Hyundai and Honda are likely to be the biggest winners over the next few months.
Vice president of industry trends for TrueCar.com, Jesse Toprak, said the timing of the 2.3 million vehicle recall in the US was not ideal.
"This is particularly a bad time for Toyota because the industry will be picking up and now a lot of that benefit is going to go to the other competitors.
"If you look at the quality gap today compared to ten years ago, it isn't there anymore. It's more of a perception gap,” he said.
IHS Global Insight analyst, Aaron Bragman, said he expected the after-effects to last for some time.
“Frankly, I think this is going to impact their entire quarter. It means opportunity for the rest of the industry. Toyota is wounded and rivals are going to go after it as much as they can.”
Vice president of automotive research at J.D.Power & Associates, David Sargeant, expects the sales suspension will have a "significant" impact in the short term. He said it would most likely lead to Toyota slipping a few percentage points in February from its 2009 US market share of 17 percent.
"The bigger issue is what's the longer term impact on their reputation and how that will affect sales going forward. What we know is that Toyota's sales are very heavily dependent on reputation for quality and safety," Sargeant said.
Analysts are forecasting five to 10 percent industry-wide sales increases for the US in February compared to January, with GM and Ford both expected to break double figures.
Toyota is trying its hardest to limit the damage, earlier releasing a video featuring President and COO, Jim Lentz, explaining the recall and apologising for the whole issue.
The conclusion to Lentz’s apology is much better than Toyota CEO Akio Toyoda’s last week. After delivering an apology in Switzerland, Mr Toyoda reportedly left in a black Audi, despite Toyota having a fleet stationed in Zurich.
More negative press flowed from The Detroit News today, which reported that Toyota knew about the sticking accelerator issue as far back as 2007. It reported that a number of complaints were made by Tundra owners but the problem was passed off as floor mat related and was not relayed to the National Highway Traffic Safety Administration.
The Detroit News said similar sticky accelerator complaints surfaced from Europe in 2008 but no investigation was undertaken by Toyota until March 2009.
(with Reuters, CNNMoney)
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