Consumer Fraud

Toyota apology falls short with angry dealers

Toyota Motor Sales, USA, has a lot of sucking up to do to the dealers that have made the company tops in automotive sales in the United States. First, dealers had to reassure their customers after Toyota issued two separate recalls over the past few months for issues involving sudden and unintended acceleration. Then last week, the company announced that it was recalling hundreds of thousands of its hybrids, the prized Prius and the luxury Lexus, due to problems with the automobile’s anti-lock braking system.

In an effort to pacify angered dealers, Toyota apologized and says it plans to launch a flashy new ad campaign and possibly offer discounts or longer warranties to make the vehicles more appealing to reluctant buyers. The details of such programs have yet to be announced, but some say buyer incentives could be available as early as next month. “We’ll get back in the business with a very good competitive program,” said Don Esmond, senior vice president of Toyota’s U.S. sales.

Once praised for their reliability and customer satisfaction, Toyota vehicles are now losing favor with consumers. The company faces numerous lawsuits from individuals injured by the defective vehicles. The ripple effect of the recalls has driven down the Kelly Blue Book New Car transaction value of the Toyota Prius by $1,000 to $1,500. Used-car values of the 2009 and older models of the Prius are down by 1.5 percent. Other Toyota models affected by the previous recalls have dropped 1 to 3 percent in value, and are expected to drop another 1.5 percent in the near future.

Beasley Allen Law Firm
USA Today