Recall, Smecall. Toyota’s headed to Number Three.
If you are paying attention to what is being written about Toyota, you might think that they are in serious doo-doo. Afterall, eight million recalled cars, plus or minus a half million or so is a big number. But the actual repair cost is peanuts, estimated between $55-$65 million. And surprisingly, if you take a look at purchase intent for Toyota since the recall, it is actually going up. In a recent article in Edmunds.com, they found that purchase intent has risen dramatically since the initial recall.
“Toyota purchase intent fell from 13.9% of Edmunds.com car shoppers to 9.7% during the height of the recall frenzy,” David Tompkins, an Edmunds analyst, says in a report released on Feb. 2. “Toyota purchase intent is back to 11.8% and seems to be climbing steadily.”
Edmunds CEO Jeremy Anwyl attributes this mainly to bargain hunters looking for a great deal. I think he’s right.
When the dust settles, there will be a long slow erosion of Toyota brand loyalty despite consumer’s willingness to forgive and forget. This erosion will take place mainly because US car manufacturer’s, especially Ford, are now finally making a product as good, or is some cases better than their Asian competitors. Japanese car manufacturer’s success was made possible because US auto makers made crappy products like the K-car, the Fairmont and the Aztek. When cars like the Corolla hit our shores, they were inexpensive and relatively well made. It was an easy decision. But with Toyota’s slip up, car buyers will take a look at American iron, and they will not look back. Ford’s SYNC system alone is enough reason to buy one, never mind that they are well made and attractively styled both inside and out. And while I have never had a kind thought about most of what GM has made, you can’t ignore the fact that as of late, leading auto pubs are praising their products. Jean Jennings, the Editor of Automobile and someone who is probably fairly protective of her credibility went so far as to call the Chevy Malibu more fun than a Camry and better looking than an Accord.
As a whole new generation of car buyers enter the market, they will do so with no pre-conceived notions of how bad Detroit cars once were. Ford and GM (I am leaving out Chrysler for now) will be at the top of their consideration set. Their friends will recommend one, and they will buy it, and, as the old shampoo ad goes, “they’ll tell two friends, and so on and so on and so on”.
Toyota will recover from the recall in the short term, but in the long term, the recall will only hasten a nascent trend already gaining momentum that will position Ford winning gold, GM holding silver, and Toyota clinging to bronze.
