But troubled car maker faces £11m penalty in US
7 April 2010

Toyota bounced back strongly from its recent recall related woes to record dramatic sales increases in the US and Japan last month.

US sales rose 41 per cent year-on-year from 132,802 to 186,863, while Japanese sales rose 51 per cent.

Toyota attributed this rise to new schemes and incentives introduced in the wake of the recall crisis. These include interest-free loans and discount leases.

Don Esmond, senior vice president of automotive operations for Toyota Motor Sales, USA, said: “Toyota’s strong sales performance in March reflects our customers’ continued confidence in the safety and reliability of our vehicles and their trust in the brand.”

However, the US Department of Transportation has announced it is fining the Japanese car company $16.3m (£11m) for failing to notify regulators about the accelerator problems sooner. It alleges a delay of up to three months between discovering the problem and acting on it.

Toyota has yet to say whether it will pay the fine - the maximum allowable for a recall offence - or contest it.

Andrew Papworth

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7 April 2010

[quote Autocar]Toyota attributed this rise to new schemes and incentives introduced in the wake of the recall crisis. These include interest-free loans and discount leases.[/quote] Amazing what 0% financing over 5 years will do to car sales. Doesn't cost that much for manufacturers at the moment either with the base rate being so low.

7 April 2010

[quote theonlydt]Doesn't cost that much for manufacturers at the moment either with the base rate being so low.[/quote]

Although the base rate has some influence over corporate rates, they are not perfectly correlated to them. Corporate bonds and loans are charged at significantly higher rates (due to risk), add to that the after effects of the credit crunch leading to more risk averse institutional investors and banks, so rates are higher.

Take Ford for instance; This week sold $1.75 billion of bonds with a coupon of 7% pa. Toyota's financing is probably slightly cheaper than Ford, due to their financial position, but still not anywhere near the base rate.

Toyota is just cutting its profit to build up sales again.

7 April 2010

[quote Focus ST]Although the base rate has some influence over corporate rates, they are not perfectly correlated to them[/quote] Sorry, I was having a grey moment. It depends on the country (and the banking market within that country), but in some places the corporate lending rate is much more directly correlated to the base rate. An example is that where I live I just locked my mortgage in to a fixed rate for 5 years as the base rate of 2.5% is due to change soon - I am now locked in at 3.75% (UK bank would be charging me at least 5.99%) because the banking sector has strict rules and is propped up by the central bank - this allows lower rates (if central bank rates are low), but lending rules are stricter. Not a single bank here collapsed, nor had any runs on it. The corporate lending is still slightly different to the personal mortgage/finance market, but a rough figure that I saw recently stated that by offering 4-5 years at 0% finance is costing a manufacturer $3500US on average. Now this is not only a lower figure than a lot of cash deals floating around, but also assumes the car company was not already supporting a lower interest rate (Toyota generally charged 2.9-3.9% APR interest on their new cars), thus costing them even less than the $3500US figure when taken in to the big picture. However, yes, part of this is just Toyota taking a bigger hit on its profits to claw back market share much in the way Ford in the US market did. In the UK Volkswagen offered incredible scrappage deals (as did Fiat, Kia, Hyundai) that served to increase their market share despite lower profit margins.

7 April 2010

And we in the UK get?

Your Choice Our Promise

http://www.toyota.co.uk/cgi-bin/toyota/bv/generic_editorial.jsp?navRoot=toyota_1024_root&noLeftMenu=true&fullwidth=TRUE&nodiv=TRUE&edname=YouChoiceOurPromise&id=Unveiled_Homepage&catname=%2ftoyota_1024_root%2fmain_nav&zone=Zone+Offers&menuid=318669&sr=Mall

I guess all the old blue rinse heads don't need 0% finance. They have long since paid off the mortgage.

I wish they would promise to make a bloody interesting car for the UK market.

Where has all Japanese design went to?

7 April 2010

Agree that Toyota need to make an interesting car for the masses, but being honest is this news really a suprise? Although not perfect I feel Toyota's honesty and handling of this situation has been better than I would imagine many others could achieve.

7 April 2010

[quote Zeddy]I wish they would promise to make a bloody interesting car for the UK market. [/quote] The forthcoming (hopefully named Celica) coupe that's a bit like that FT concept should take care of that. And I think the iQ's interesting, if not particularly amazing in practice. Urban Cruiser would've been interesting five years ago. But all in all, I think it's positive that they've seen a sales increase, because everyone (mostly the media) was very quick to bash them down, and call the whole thing a "lasting disaster for Toyota". It obviously isn't a 'lasting disaster'. I can't say I've heard of anyone who's said "I'm never buying a Toyota" just because of the recall. Their latest deal here in the UK of 3 years free servicing or a 5 year warranty are pretty good too in comparison with some manufacturers...

"The creative adult is the child who survived."

8 April 2010

[quote Mini1]Their latest deal here in the UK of 3 years free servicing or a 5 year warranty are pretty good too in comparison with some manufacturers...[/quote]

Maybe but is it any better than a "boring" Kia with a 7 year warranty and slightly keener prices?

Where has all Japanese design went to?

8 April 2010

Toyotas sales are up, but so are almost everyone elses, in some cases by alot more.

In the UK, March sales for the following few brands were:

BMW: Up 5.26%

Toyota: Up 15.42%

Audi: Up 17.76%

Ford: Up 18.72%

Citroen: Up 21.11%

Alfa Romeo: Up 22.44%

Fiat: Up 33.85%

Mitsubishi: Up 42.95%

Nissan: Up 68.18%

Land Rover: Up 74.45%

Jeep: Up 100.72%

So really, are Toyotas figures that impressive??

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