Incentive Plans Take Aim at Vulnerable Toyota with Mixed Reviews

Incentive Plans Take Aim at Vulnerable Toyota with Mixed Reviews

Smelling "blood in the water" as NBC Today's show host Matt Lauer noted in a Monday morning interview with Toyota's top executive, Toyota's competitors have launched a host of incentives aimed at luring into their folds once-loyal, but now-shaken Toyota owners and shoppers who are concerned about Toyota's latest recalls, stop-sales and halt of production of its eight best-selling models. Toyota announced a fix to the problem on Monday.

Sales results posted by all automakers in the U.S. Tuesday will reveal if these shark-like maneuvers are working. Meantime, the promotions themselves have been earnings mixed reviews by visitors to Edmunds.com's sites.

General Motors was first to pounce. As explained to Edmunds' Inside Line last Wednesday, GM's new offer -- including zero-percent financing or $1,000 cash for anyone who can show proof they own or lease a Toyota -- is simply a response "to what consumers are telling our dealers" and is "aimed at bringing people back to the GM family."  Sounds innocent enough.  But Inside Line readers as well as members of Edmunds' CarSpace Forums have been quick to question the move.
 
"I hope to hell Toyota gets its act together, comes back with an absolute vengeance and stuffs these goons into the ground once and for all," responds one reader, who also notes for the record that "I am not a Toyota fan nor have I ever owned or desired to own their product."   

Others describe the plan as "pathetic," "shady" and "desperate," saying it projects the notion that "the only way for (GM) to go up is when somebody else messed up" and in turn undermines GM's current "May the Best Car Win" marketing theme.
 
While GM supporters counter that "Toyota and others have been taking advantage of the Big Three's misfortunes for decades" and also point out that "Volvo did the same thing end of last month -- extended their owner loyalty rebate to cover SAAB owners, too," the majority of posts seem to agree that "G.M. has gone over to the dark side" with this offer.
 
Morality aside, a few question the basic financial wisdom of a program designed to "take in vehicles that are unsellable."  But others point out that "dealers are going to be waiting for suckers... desperate to give up their Toyotas," buying them for cheap and then later "fixing them per the recall on Toyota's nickel."
 
Indeed, the cheap trade-in theory is backed up by another member who reports walking away from a dealer after being offered $1500 below the Edmunds' True Market Value price for his Toyota Yaris.  "I sure hope my trade-in value will go up when Toyota fixes this," he says.
Some doubt whether G.M. will even see much of the disgruntled Toyota crowd, wondering, "with so many other brands to choose from... why would G.M. be the first on the list?"  They conclude that instead "the winners would probably be Honda, Hyundai and Ford (not necessarily in that order)" and predict that Subaru and Kia are also more likely to see bumps in sales.

"All this does is make GM mangers look a slimy as their dealers," suggests one member.  Another sums up, "This whole fiasco reminds me when a lion (Toyota) leaves an antelope carcass (the buyers) and all the vultures (other car makes) feast on the sloppy seconds." 
As unpleasant as that image is, it doesn't appear to be dissuading other automakers from joining in.  Since GM launched the plan on Wednesday, both Ford and Hyundai have announced similar incentives.

And that's the word on the street. -- Mark Holthoff, Edmunds.com manager, customer support

Michelle Krebs:  is Editor-in-Chief of AutoObserver.com. Follow @AutoObserver on Twitter.