Toyota to Scale Back Incentives by Late This Year
By Michelle Krebs May 11, 2010Toyota intends to ease off the gas on incentives by fall or at least by the end of the year, a top company executive said Tuesday.
Takahiko Ijichi, Toyota Motor Corp. senior managing director, acknowledged Toyota's unprecedented incentives were instituted in the automaker's effort to boost sales in the U.S., where sales had been hurt by recalls, stop-sales orders on popular models and ensuing negative publicity.
"We so not expect to continue this level of incentives," he told analysts and media during a conference call on Toyota earnings Monday. "By fall or the end of this year, we're planning to get incentive levels to historical levels."
In March, Toyota set new heights for its incentives as it offered zero-percent financing and discounted leases, according to Edmunds.com's analysis. Toyota has continued many those incentives.
Indeed, Toyota's zero-percent financing was still a popular option for consumers in April. Of Toyota vehicles sold, 58-percent of the buyers took the finance deals, according to Edmunds.com's calculations. That was down from March's all-time high of 71 percent, but still the second highest percentage of portion of zero percent finance deals for Toyota.
The biggest chunk of Toyota's incentive spending, however, was on discounted leases.
Toyota's April 2010 incentive spending Source: Edmunds.com
Incentives have helped buoy Toyota's sales, which nosedived in January and February, but have been losing their effectiveness since March. Toyota sold 157,439 vehicles in April, up 10.7 percent from April 2009 and down 15.7 percent from March 2010. -- Michelle Krebs, Senior Analyst and Editor at Large
TCI - Total Cost of Incentives Source: Edmunds.com
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