subject: Toyota Makes Merry In March; Sales Up 41% [print this page] All along the Toyota fiasco or the recalls involving gas pedal issue, analysts were rushing against time to predict the end of the brand Toyota and the decay of Asian brands. Little over 2 months after the recall was announced, we have seen a turnaround that could possibly be considered a fairy-tale homecoming for the brand Toyota.
In case you are wondering about the change of fate for Toyota, then the March figures will clearly vindicate the Toyota's strategy post-recall. The sales volume in March suggests that Toyota has had an increase of 41% over corresponding period in 2009. The automotive industry has clocked an increase of 24% in sales over the corresponding period in 2009.
Reading between those 2 sales figures, we are clear that Toyota has surpassed the growth witnessed by the automotive industry in the month of March. And, it also amplifies the fact that Toyota has used very ambitious pricing to stem the tide in its favour. There is a strong undercurrent in favour of Toyota cars ever since it offered huge inducements. From reducing lease charges to increasing the resale value of the cars, Toyota has done everything it could to redeem its sales and customer confidence.
As per Edmunds.com, Toyota offered higher incentives than any other auto manufacturer and this is understandable given the credibility loss that it was working against.
However, one thing that is apparent is that Toyota seems to be focusing on price strategy as a ploy to improve sales and reduce idle production capacity. Now that it has achieved a positive growth, it is likely that Toyota will have a re-look at its pricing once again. And this should be expected to happen sooner than later.
Discounting the price is something that Toyota was never keen on. Pushed against recalls and imminent loss of face in the consumer mind, there was no doubt that it would have to be aggressive to wrest the advantage from companies like Ford and General Motors. Infact, in the month of February, it was Ford that made the most of Toyota's misery. Any prolonged absence from the market would have added to Toyota's misery and Ford was all set to make long term gains, given the fact that spotlight was firmly on Ford for being the local US brand.
So, we have a situation that has been chiefly remedied and we may soon see the next part of strategy for Toyota. It is likely that Toyota will keep the pricing discounts active for some more time before it is really comfortable with the way production lines are coming back up. Once it is able to reach a critical threshold in terms of available stocks and the production capacity alongside rising sales, there is every chance that it will start withdrawing the discounts. I would expect this to happen in phases rather than in a one step phase.
Toyota will make sure that it starts on price restores once it is reasonably sure that the pricing changes will not impact the overall revenues of the company. It is a tough balancing act, but then Toyota has been successful in handling bigger situations than this one. And that too, very deftly.
