American consumers returned to showrooms in force during March, driving overall sales to their best levels since last summer’s peak around Cash for Clunkers. The spring surge brought especially good news for Toyota, whose sales rose 41 percent during the month even after its brand was badly battered earlier in the first quarter.
Automakers sold a total of 1.07 million vehicles in the United States last month, the highest absolute number of sales since the federal government’s massive buyback of late-model used cars sent sales skyrocketing last August. Last month’s number also was 25 percent ahead of March, 2009.
Toyota’s revival came on the back of its unprecedentedly large incentive program featuring zero-percent-interest loans on a wide variety of models in a bid to get consumers back into showrooms after all the bad publicity about its safety recalls in January and February.
US sales for Toyota increased by 87 percent over sales in February. “Consumers responded to the industry offers in March and came out in droves,” said Don Esmond, senior vice president of Toyota Motor Sales USA. “Our incentives clearly had an impact."
Jessica Caldwell, senior industry analyst for Edmunds.com, agreed. “People were lured by the money thrown out on the hood,” she said. “It shows that [incentives] remain a big driver and also that people were waiting for a reason to buy Toyota. They saw the opportunity and thought they might be once-in-a-lifetime kinds of deals, and jumped on them."
And overall, Caldwell said, March results “showed that people were not as unwilling to buy a Toyota now as we’d heard in the media. Some people thought it might be years before Toyota could recover” from the recall mess, “but these sales numbers are encouraging, so maybe it won’t be years. Recovery for Toyota may be faster than we had thought."
About 60 percent of Toyota’s March sales, Esmond said, were to current Toyota owners, while about 40 percent of customers traded in a competitive make. Esmond said that ratio was about typical for Toyota for any given month. So he was making the argument that the company already has recovered from the worst of its publicity nightmare.
“It was a tribute to Toyota dealers and products,” he said. “We were able to outperform much of the industry in March despite the level of scrutiny we had.” He credited improving weather, “growing pent-up demand” in the market and “continued confidence in the safety and quality of Toyota vehicles."
But was Toyota’s March performance a true rebound – or a blip? Coming months will tell whether Esmond was right.