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Toyota sales plunge

By Chris Isidore, CNNMoney.com senior writer

NEW YORK (CNNMoney.com) -- Toyota Motor's U.S. sales in January tumbled 16% from a year ago, hit by the recall of its most popular models due to its widely-publicized problem with sticking gas pedals.

Sales tracker Edmunds.com had forecast a year-over-year drop of 12%. Sales plummeted 47% from December.

Industrywide auto sales increased from year-ago levels, although sales were disappointing for many manufacturers, as few apparently benefited from Toyota's problems.

Even some who posted improved sales did so due to fleet sales to businesses, such as rental car companies, rather than more profitable sales to consumers.

But Toyota suffered the worst decline of the major automakers. The company sold the fewest amount of cars in a month since 1999. Its market share of 14.1% was down nearly 3 percentage points from its full-year share last year and was its thinnest slice of the U.S. auto market pie since 2006.

Ford Motor (F, Fortune 500) posted a 24% rise in sales compared to a year ago, enough to pass Toyota at least temporarily as the No. 2 automaker in terms of U.S. sales, behind only General Motors.

Last month, Toyota (TM) recalled more than 3 million vehicles due to gas pedal problems which caused sudden, uncontrolled acceleration.

On Jan. 26, Toyota suspended sales of the eight recalled models, losing much of the final week's worth of sales. Affected models include the Camry sedan, the Corolla compact and the Rav4 SUV, which are the company's three best-selling vehicles in the U.S.

While the company announced Monday it found a way to fix the problem, it will only slowly start selling those models again as it performs the fix on each vehicle on dealer lots.

Sales of numerous Toyota models not covered by the recall, such as the Sienna minivan and the Tacoma pickup, also tumbled. Overall the sales of recalled models plunged 21%, while sales of other Toyota models slipped 13%.

But the company was helped by a 5% increase in sales of its luxury Lexus brand, although sales fell 23% at its entry-level Scion brand. Neither of the models of those two brands were included by the recall.

Bob Carter, general manager of the company's Toyota division, said the company had been on pace for a narrow sales gain for January before the sales halt. He said the company's final sales came in roughly 20,000 less than expected earlier in the month.

But he said that sales of models not included in the recall came in at or slightly above internal forecasts, suggesting that there was little if any collateral damage.

"I'm not underestimating any impact and confusion in the mind of the consumers," he said. "But it appears to be very minimal."

Carter said the company hasn't yet made any plans for incentive offers or other marketing efforts to attract buyers back to the brand. Toyota will not be an advertiser during the Super Bowl, although that was a decision made well before the recall.

"We are fortunate to have a very strong brand," he said on a call with reporters. "We are focused on first taking care of the customers and then we'll get back into the sales business."

Many experts believe the damage caused to Toyota's reputation for quality vehicles will have a lingering effect on its sales, possibly causing its first drop in U.S. market share since 1994.

A survey by Kelley Blue Book of people planning to purchase a car found that 21% of those who were considering Toyota before the recall no longer are looking at the brand, although 43% of those who have soured on the brand said they'll reconsider once they see how the solution to the recall plays out.

But experts at Edmunds.com said their figures show consumers are already starting to regain interest in Toyota.

Clients at its Web site who intended to buy Toyotas fell to 9.7% during the height of the recall frenzy from 13.9% before the problem was announced. But since then it has recovered to 11.8%.

"We expect that Toyota will make a full recovery fairly quickly," said Ray Zhou, senior analyst for Edmunds.com.  To top of page

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Data as of 6:45pm ET
Company Price Change % Change
General Electric Co 16.26 -0.51 -3.04%
Bank of America Corp... 31.72 0.24 0.76%
Ford Motor Co 12.00 -0.07 -0.58%
Advanced Micro Devic... 12.59 0.12 0.96%
Micron Technology In... 42.75 -1.24 -2.82%
Data as of 4:15pm ET


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