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Toyota's sales surged 40 percent in March, a top company executive said Wednesday, as the automaker offered its biggest incentives ever to cope with the fallout of millions of recalls.
Toyota is making the same mistakes GM and Ford made circa 2005-2007 when they piled on the incentives to drive up sales and reduce inventory, which led to significant declines in the following months once the incentives were gone. To prop up sagging sales, they bring back the incentives under some other gimmick, and the cycle continues. Resale values are hurt, profit evaporates, and your customers get hooked on the incentives game.
Toyota's self-destruction parallels the old GM playbook on so many levels, yet no one within the company seems to acknowledge it.
From what I have seen its not just toyota that has those incentives. People have to rememeber that incentives are just part of a ever growing competitive auto market with more and more competition for sales.GM;Ford and chrysler are just dreaming if they think that the japanese are the only competitors for future sales.With legacy cost and debt so high the big three are still at severe disadvantages in this type market.
Toyota is making the same mistakes GM and Ford made circa 2005-2007 when they piled on the incentives to drive up sales and reduce inventory, which led to significant declines in the following months once the incentives were gone. To prop up sagging sales, they bring back the incentives under some other gimmick, and the cycle continues. Resale values are hurt, profit evaporates, and your customers get hooked on the incentives game.
Toyota's self-destruction parallels the old GM playbook on so many levels, yet no one within the company seems to acknowledge it.
I think a key difference is, GM put incentives on crap cars, Toyota is putting incentives on decent cars to stem the sales decline because it doesn't know how to handle recalls very well. Toyotas are at least class competitive vehicles, unlike the 80s-90s-early 00s GM product. Also, this is pretty short term - 2 months so far of big money discounts and 0% financing, vs decades with GM.
From what I have seen its not just toyota that has those incentives. People have to rememeber that incentives are just part of a ever growing competitive auto market with more and more competition for sales.GM;Ford and chrysler are just dreaming if they think that the japanese are the only competitors for future sales.With legacy cost and debt so high the big three are still at severe disadvantages in this type market.
I think the last article I read on the matter stated that Honda and Toyota actually have the largest incentives right now. Not surprising given Toyota's woes and the fact that Honda product is both old and not popular. Most competing automakers are releasing a ton of new product right now that is simply more attractive to buyers - such is the cycle of cars.
Location: Still in Portland, Oregon, for some reason
890 posts, read 3,702,274 times
Reputation: 743
Quote:
Originally Posted by mustang84
Toyota is making the same mistakes GM and Ford made circa 2005-2007 when they piled on the incentives to drive up sales and reduce inventory, which led to significant declines in the following months once the incentives were gone. To prop up sagging sales, they bring back the incentives under some other gimmick, and the cycle continues. Resale values are hurt, profit evaporates, and your customers get hooked on the incentives game.
Toyota's self-destruction parallels the old GM playbook on so many levels, yet no one within the company seems to acknowledge it.
Location: Still in Portland, Oregon, for some reason
890 posts, read 3,702,274 times
Reputation: 743
Quote:
Originally Posted by Lux Hauler
Its always good to have a positive outlook on things.
True...but wishing and hoping doesn't necessarily make it so.
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