Toyota Already Recovering from Recall, Edmunds.com Data Shows

Toyota Already Recovering from Recall, Edmunds.com Data Shows

By Michelle Krebs February 2, 2010

Since announcing the fix for its sticky pedals Monday, Toyota already is experiencing a dramatic rise in purchase intent among shoppers on Edmunds.com's Web site. 

"Toyota purchase intent fell from 13.9 percent of Edmunds.com car shoppers to 9.7 percent during the height of the recall frenzy," said Edmunds.com Senior Analyst David Tompkins, PhD. "Toyota purchase intent is back to 11.8 percent and seems to be climbing steadily."

 

 

"The Toyota recall stopped sales for about 55 percent of the company's models, causing its monthly sales to drop below 100,000 for the first time since January 1999," said Edmunds.com Senior Analyst Ray Zhou, PhD.

"However, we expect that Toyota will make a full recovery fairly quickly," Zhou added. "And Toyota dealers may enjoy higher profit margins as they will have less inventory to offer because of the production stoppage while the company will likely boost demand through brand-building goodwill incentives."

Toyota Competitors

Meantime, some of Toyota's competitors - notably General Motors, Ford and Hyundai -- tried to capitalize on Toyota while it was done. Here's what Edmunds.com's analysis of purchase intent fared for Toyota's competitors:

- Honda, which did not launch special incentives aimed at would-be Toyota buyers, gained the most purchase intent at Toyota's expense, increasing by 1.1 percentage points;

- Ford purchase intent rose .8 percentage points;

- Hyundai and Mazda purchase intent each rose .7 percentage points;

- Nissan purchase intent rose .4 percentage points;

- Volkswagen purchase intent rose .3 percentage points;

-Chevrolet and Subaru purchase intent each rose .2 percentage points

Toyota Prices

Though purchase intent for Toyota is rising, value of trade-ins is falling, prices on models with direct competitors are decreasing but Toyotas with no direct competition remain unchanged.

 "Affected Toyotas trade-ins have taken about a 10-percent hit in value," said Joe Spina, Edmunds.com's analyst for remarketing. "Dealers will take them at a lower price because of the uncertainty even though many of them will end up enjoying a higher profit margin when they sell them in a few weeks after the recall issue is resolved.

"For unaffected vehicles, if there is an equal competitor in the marketplace - like the Honda Odyssey competes with the Toyota Sienna - there is as much as a three percent decrease in value for the Toyota today," said Spina. "For vehicles without a direct competitor like the Toyota Tacoma, we aren't seeing any change in value."

 Once the recall is resolved, Edmunds.com anticipates Toyota prices will rebound quickly."

About the Analysis

Purchase intent measures actual buyer interest reflected by pricing research, vehicle configuration and other focused steps. Purchase intent has a strong correlation to sales. The data reflects share of total Edmunds.com traffic engaged in purchase intent activity.

 

Edmunds.com has created a free resource to keep consumers informed about the 2010 Toyota recall. The page features the Toyota recall list, guidance for driving a vehicle that suddenly accelerates and other critical information, all of which will be updated as new material becomes available.

 

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