The Toyota Motor Co. is likely to have lost some portion of its market share as a result of the sales freeze on eight of its best-selling models, industry analysts believe. Sales results for January will not be announced until tomorrow, but there is reason to believe that the massive recall will have caused the auto giant’s numbers to falter in the first month of the year. It’s expected that sales numbers from competitors Chrysler, General Motors, and Ford will all show increases in the first sales numbers released for 2010, reflective of an industry-wide trend towards increased demand. The Bloomberg economics firm assigned five analysts to making guesses on the sales results of the biggest carmakers in America.
One of the factors that will probably have affected Toyota negatively is the fact that the company’s deliveries fell by almost five percent in January. That makes its share of domestic car deliveries a record low since March 2006. Toyota decided to recall over two million cars and suspend all sales on affected models (Avalon, Camry, Corolla, Highlander, Matrix, RAV4, Sequoia, and Tundra) in light of a defect with a common gas pedal that was getting stuck in a depressed position and leading to possible uncontrolled acceleration. Over the weekend, Toyota received approval on the shim that it concocted to fix the problem in affected vehicles. But the problem kept some of the highest-selling cars in the country off lots for the last five days of the month, a not-insignificant loss for Toyota. The eight cars recalled represent between sixty and seventy percent of the automaker’s lineup.
The year 2009 was a poor one for the whole auto industry in terms of vehicles delivered for sale – less than any year since 1982. Despite that, things must have improved to some degree in January. Both GM and Ford – the first and second-largest domestic auto manufacturers – said that industry sales rose by at least ten percent in January. It is believed that the worst for the auto industry may finally be behind it, and that the market is entering a period of expansion. Nobody expects that the regrowth of the auto industry is going to be speedy or linear – even the most optimistic of expectations for results would still only put the U.S. market at two-thirds of its 2000-2007 size – but I think that given the depths to which things plummeted during the past few years of recession, any improvement is cause for celebration!
January has also been a historically slow month for car sales. Sales improved more or less continuously throughout the month, which was very positive to many experts watching the sales results. That’s in spite of the fact that this January had only twenty-four sale days, as opposed to the twenty-six that the calendar allowed in 2006. That already skewed sales numbers by an estimated eight percent.
Some of Toyota’s competitors almost immediately began making ads in the wake of the recall notification, disclosing their intent to prey on Toyota while the giant was still on its knees. Television ad spots touting the safety and reliability of Ford cars were some of the first to appear on the scene a mere three days after the announcement was made.
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