In a few short weeks, Toyota has done what General Motors, Ford and other automakers have failed to accomplish for decades: Erase the perception that the Japanese automaker's cars are of much higher quality than those of its rivals.
A series of recent safety recalls — now totaling more than 8.5 million vehicles worldwide — has cracked Toyota's bulletproof reputation and given rivals an opportunity to capture some of its customers.
Toyota stumbled as industry sales are just starting to climb after the worst slump in 30 years. It's not yet clear which automakers will benefit most, but several stand to benefit and are wooing Toyota drivers with new ads and incentives.
"The perception game has changed," said James Bell, an executive market analyst for the vehicle information company Kelley Blue Book.
According to Kelley, 27 percent of new car shoppers who were considering a Toyota before the recall are no longer contemplating the brand. Nearly half of the buyers who have defected from Toyota say they may never consider the brand again. Kelley questioned 406 people before the recall and 285 after it. All were U.S. buyers who said they planned to buy a car in the next 12 months.
Ford, Chevrolet, Hyundai and Honda have made the biggest gains with those customers, Kelley Blue Book said. Sixteen percent of new-car buyers said they weren't considering Ford before the recall, but are now.
David Tompkins, vice president of analytics with Edmunds.com, said the crisis also is starting to affect Lexus, Toyota's luxury brand, which has seen the number of buyers intending to purchase the brand drop by 25 percent in the last two weeks. Those customers are now looking at Audi, Acura and Volvo. His data is based on 3.5 million Web site visits per week.
Publicly, rivals insist they're not gloating.
"There may be an opportunity for us to get some consideration from folks that we didn't get before. We'd like to sell them our vehicles based on the merits," GM's North American President Mark Reuss said Wednesday at the Chicago Auto Show.
At Ford, chief U.S. sales analyst George Pipas noted that CEO Alan Mulally has long admired Toyota and implemented its global production system at Ford.
But Bell said that at a recent executive-level meeting at one of Toyota's rivals, participants were grinning from ear to ear.
"GM and Ford in particular are really rubbing their hands together and saying, 'Here's our chance,'" he said.
Shortly after Toyota announced the recall of 2.3 million U.S. vehicles to address sticking accelerators, General Motors, Ford, Hyundai and some Honda dealers began offering incentives of $1,000 or more to drivers who traded in Toyotas. New TV ads from Ford say, in bold letters, "Ford quality can't be beat by Honda or Toyota." GM isn't running ads that mention Toyota, but continues its "May the Best Car Win" campaign, which has taken on new meaning after the recall.
"If someone loses, someone wins," said Natsuno Asanuma, manager of public relations at Honda Motor Co.
Homer Benavides, 37, a civil engineer and father of three from Waukegan, Ill., had agreed to buy a Toyota Sequoia sport utility vehicle before the recall. He canceled the sale after the recall and is now considering the Chevrolet Tahoe.
"Toyota has made millions of vehicles, and millions of people are driving them, but if you are the fraction of one percent to have a problem, you don't want to be that one person," he said. "I do like Toyota, but safety is first and foremost."
Dave Sargent, vice president of vehicle research at J.D. Power and Associates, said it's unclear how long buyers will stay away from Toyota. Recalls don't necessarily kill sales. The Ford Explorer, which was recalled in 2000 and 2001 because of tire tread separation, saw one of its best sales years ever — with 433,837 sold — in 2002.
"Clearly, there will be some long-term impact, but the magnitude is a little hard to predict right now," he said.
Some analysts say South Korea's Hyundai is particularly well positioned to benefit, with a new Sonata sedan going on sale in the U.S. in a few weeks. The Sonata is already 10 percent cheaper than the Toyota Camry, said Michael Sohn, an analyst at Woori Investment & Securities in Seoul.
"Hyundai is very aggressively trying to attack the U.S. market," he said, noting that the company just ran ads during the Super Bowl, including a spot that touted its 10-year, 100,000-mile warranty. The ad was created prior to the recalls.
Sargent said his firm is seeing Toyota buyers defect to well established brands like Honda, Ford and Chevrolet.
"Toyota owners want high quality and high resale values. When they don't buy Toyota, they look for those things in other brands," he said.
But Tompkins said GM may have some trouble luring buyers because the automaker still owes billions to the federal government and buyers are unsure of its cars long-term values. He predicts Hyundai, Honda and Ford will win Toyota's business, with Mazda, Subaru and Volkswagen right behind.
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