Truth be told, there’s not a damn thing automakers can do to revive the U.S. auto market to 2007 levels. All they can do is ride out the economic shitstorm that was, in no small part, created by the lax lending standards in which they were active not to say maniacally enthusiastic participants (I’m looking at you GMAC). Who would have thought the fact that all automakers are suffering would provide the basis for an excuse for GM to extort $17.4b from Uncle Sugar? Ahem. Anyway, yes, Toyota’s going to take it in the shorts. One TTAC’s front line contacts runs a store in the DC area for the Japanese brand [NB: not the one shown], and checks in on your behalf. “We sold 428 vehicles for December. 148 Used, 380 New Toyota. We sold 625 new and used vehicles last year in Dec. Prius is selling at or below invoice, Camry Hybrid below invoice, Highlander Hybrid below invoice. Just thought you’d like to know.” Uh-oh. I make that a 32 percent drop.
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I do wonder how much of this is Toyota’s own dealers. The impression I got, while trying to buy a Sienna, is that they really don’t understand exactly how bad things are. The word I would use to describe the attitude is “begrudging”: they know it’s bad, but they’ve been flying so high for so long that it hasn’t really sunk in.
Now, this is Canada, and maybe things are different (better?), but the Ford, Mazda and Kia dealers I’ve spoken to are much more reasonable.
It could also be some of the poor quality catching up with them like the cam snapping Tundras whos tailgates fall apart or the Camry 6 speed automatic that likes to only use 4 speeds or stalling Prius’s or Tacomas with snapping rotting frames etc. There is a local Toyota dealer that is still trying to get rid of 08 Tundras and Camrys.
They all do it Psarhjinian. They all act like nothing has changed. Maybe we can finally change how cars are sold in this country?
It would be nice to be able to buy a car like every other manufactured item rather than going to some middle easter bazaar
“We sold 428 vehicles for December. 148 Used, 380 New …
Sweet Jesus! Do you have any idea how many domestic-label dealers would kill to reach a third of those numbers each month?
I know sales are down everywhere, but those are still VERY respectable sales numbers.
Edited to add: The numbers are even more impressive in view of the fact that they likely represent straight retail sales to real people, not bulk discounted fleet sales.
Local dealer sales are off about 50%. Biggest complaint I hear from them is lack of front end gross on the new vehicles. Like most new car dealers they operate on razor thin margins on the new cars and try to concentrate on making money in other areas. Service and used cars are the main focus.
@ ponchoman49:
Toyota still has a teflon reputation… they need about another 20 years of making bad products before they can even begin to scratch that. But in Toyota’s favour, at least they DO something about the problems. Instead of trying to blame the drivers. Like some other bailout candidates…
It would be nice to be able to buy a car like every other manufactured item rather than going to some middle easter bazaar
About as close as you’ll get is Saturn’s model, where the price is fixed but the salesperson is still given incentives. They’re still aggressive, but they’re not actively encourages to screw you. The problem is commissions and spiffs: until you remove incentives from the sales process, this is going to continue. And unincentivized sales staff are almost always going to be lower-performing, because the reward just isn’t there.
Try to imagine what reproductive rates would be like without orgasms; it’s about the same idea.
One positive aspect in all this is that actual pricing and market-value data is much more available now, and it’s easier to bargain from a fair price point, and to compare dealers’ offers, than it once was. Some dealers haven’t figured this out (Toyota, Honda, ahem) and really don’t like it when you walk in with a pricing report. Their real, best tool is obfuscation, and the internet has effectively disarmed them.
I’m not above paying a fair price, I just dislike the “Let me talk to my manager” game, supplemented with all the reasons to buy now instead of later, or the cajoling to come into the showroom. If your manager makes the call, then let me deal with him/her from the get-go. I know you’re not on my side, you know you want the sale, let’s just be quick about this, put a bag on our heads, and think of England.
lol do you mean “take it in the shorts”
that’s a good one
Those prices sound right – they’re in line with Fitzmall in suburban Maryland’s online numbers.
It would be nice to be able to buy a car like every other manufactured item rather than going to some middle easter bazaar
It would be nice to walk into a car dealer and buy a new (or used) vehicle just like I were buying a stick of deodrant at Target. I see the auto salesman much like the real estate agent. In these days of internet they are only effective agents for the old and disconnected, but still are hanging on to their overly inflated salaries or “spiffs.” I’m sure the next generation will show disbelief that someone could make a career out of “selling” cars.
lack of front end gross on the new vehicles
I think a local VW dealer is feeling the pinch and making it up in their service dept. A friend’s Passat (terrible unreliable car for him, just terrible car) just got new rear brake rotors & pads and an ignition coil to the tune of $2500. That is robbery, and I’m not talking about crappy engineering that caused the ignition coil problem in the 1st place. Ouch! But since it’s a “German” car he thinks nobody can maintain it out of a garage or independant mechanic. Oh well, it’s only his money.
Many got worked up over Toyota’s -32% last month-but the market was down 37%.
They beat the average, gained share.
In this market that’s a win, a show of relative strength with the remaining customers.
And these halucinations about Toyota’s reliability dropping are just sad. Much has been made of the low CR scores that the Tundra V8 and Camry V6 got last year.
Yet the people still swauking about this are ignoring that they improved in this years survey.
Yes Toyota makes mistakes-but they fix them quickly.
There are some companies “on the teat” these days, at least in part, because they let problems run for a decade or more.
Toyota bores me to tears but I would not hesitate to recommend one to a friend.
They will be around and strong for a long time.
Bunter
psharjinian: The word I would use to describe the attitude is “begrudging”: they know it’s bad, but they’ve been flying so high for so long that it hasn’t really sunk in.
If you think that the Toyota dealers are being unrealistic about the new economic picture, try talking to someone who is selling a house (especially if they bought it within the last five or so years).
ponchoman49,
The Toyota model of customer service:
Problem: Some Tundra engines may have bad camshafts.
Solution: Replace all engines with camshafts from that lot, right away, to save the customer possible inconvenience and retain his loyalty by providing satisfaction and value.
The GM model of customer service:
Problem: Plastic intake manifolds, certain kinds of gaskets and DexCool all cause early engine failures.
Solution: What problem? We already sold that car, right? Somebody with big political clout in the executive suites made this decision, which saved $.10 per car, so we’ll just keep building them this way for a long, long time. Hey, we saved a dime, didn’t we?
You people need to get a grip. If you want to buy a car “just like you were buying a stick of deodorant at Target” – that’s easy.
When you walk into Target, you pay the price that’s marked (on the price tag) with no expectation of a reduction when you get to the register.
Now, walk into a Toyota dealer, tell the sales manager you are ready to pay the price that’s marked (on the window sticker) with no expectation of a reduction when you get to the finance office.
Guarantee you’ll be out of there with a new car in record time.
I looked over my mother’s recent service bill at a Toyota dealer. Spark plugs at $18 each caught my eye, as did the $1200 brake job.
Even a Toyota dealership makes most of its profit from service, parts and used cars.
200k-min….2500 for a rear brake and ignition coil job???? Ridiculous. Has he checked his service records (or seen the parts)? I can’t count the number of times I’ve been offered a rear brake job because my brakes were reportedly “completely shot.” Last time I heard that I was in for tires and an alignment and I had just replaced the rear rotors and pads myself the weekend before. Angry dosen’t even begin to describe my reaction.
Hey, at least in a bazaar the crowd knows how to deal with theives.
148 + 380 = 528.
Why doesn’t anyone remark that an industry where a dealer sells 15 cars (that $300k gross!) every single day of the month he is open and calls it a disaster is totally out of whack with reality? In what imaginary world are there supposed to be enough people around to buy 20 or 30 cars PER DAY from every dealer in America?
This is just a major, long overdue adjustment to capacity and price. If we get each to about 50% of where it was we’ll be about right….
@ tedward
Yeah, this isn’t a “car guy” friend. He asked them the check the brakes and they came back saying they were shot. Go figure. I told him for a couple beers I’d come over, pull off the wheel and check it myself and save him a lot of $$$.
I don’t think this is exclusive of VW dealers, but this car has been far from reliable, leaving him stranded several times. That alone is unacceptable to me for a car with under 75k on the odo, but said friend is now a bit gun shy about declining service.
My Honda had some bad wheel bearings a couple years back. Knew they were going but didn’t want to tear apart everything and press in new ones. Had it in the dealer for a routine tranny service and asked what the bearings would cost. Immediately called a trusted independant shop to get their quote. Told the dealer no since “my guy” was $200 less. They matched his price + 10%. My jaw almost hit the floor, but they did retain a customer.
Richard Chen :
January 5th, 2009 at 12:12 pm
Those prices sound right – they’re in line with Fitzmall in suburban Maryland’s online numbers.
This is a little off topic but..
Thanks to the internet advertised prices at Fitzmall on the ’09 RAV4’s in MD I was able to get a dealership in southern NH to match the price. If anyone is looking to buy a Toyota I would recommend doing the same.
I feel sorry for all those dealers in other places who are having trouble moving the metal. Toyota and Honda sales here are through the roof; it wouldn’t surprise me if there are six-month waiting lists for a Camry or Accord. In fact, they may be sold out through 2009. Or even 2010.
I base this solely on the fact that the local outlets are still adding their own window stickers for $500 to $1000 of protect-o-wax, nitrogen in tires, window etching, etc. Toyota itself is the most egregious, however. It’s “distributor” adds their own unnecessary junk to the MSRP before the cars are sent on to the dealer. You can’t avoid it.
At least when that despicable Toyota dealer charged a lady $18 for a spark plug, he didn’t claim the price included insulator polish.
Fitzmall may be 1200 miles away, but I think it’d be well worth the drive. One of my neighbors went to Memphis for his Odyssey and saved a ton of money.
200k-min
Yeah, couldn’t imagine getting serviced at a VW dealer…and I drive an old passat myself. I have a very seriously obsessed VW-nut friend who helps me work on mine (taking apart a late 90’s passat requires help, one engine mount can take hours) and he’s admitted to parking cars out back to add billable hours when he used to work at a dealer. Not his decision either, orders were from management. The way he tells it, this is common dealer behaviour, but I haven’t heard another first hand account of this. Personally, I believe it, especially after I went to a VW dealer for an estimate on installing some Bilstein HD’s (already bought) and they quoted me almost twice what the job was worth.
For what it’s worth I’ve had great interactions with Honda before…my mother bought an element for a winter car and I was just blown away by the lack of pushiness and general honesty of the experience. Best part is, they haven’t backpedaled after the sale, she still deals directly with the salesman when she goes in for service. On the flip side, I’ve been in several Toyota dealers and each time I was surrounded by snake-oil salesmen who were willing to blatantly lie to move metal. People claim good experiences with that company but they are 0 for 3 with me, so I don’t get it. Plus their cars fail a test drive comparison in a huge way.
The way he tells it, this is common dealer behaviour, but I haven’t heard another first hand account of this
That has a lot to do with how VW treats is own dealers. It doesn’t excuse it, but at least it makes it understandable: they’re getting screwed out of warranty work and parts prices all the time, so why not pass it down to make a buck?
For the record, all the European marques do this. Screwing the dealership is pretty much par for the course.
GMAC’s auto loan unit took advantage of cheap credit, along with everyone who refinanced their homes, sold a home, took home equity loans or invested in rental properties. While GMAC has a bigger role in the financial/credit meltdown than the average real estate broker I don’t think anyone was selling securities based on subprime auto loans. Perhaps it was done, but I haven’t heard of it.
In GMAC’s case, their real estate unit obviously had a greater role because those of mortgage based securities. The automotive loan unit was more like the banks that were giving out high risk credit cards.
The upside of captive auto financing companies like GMAC and Ford Credit is that they help sell cars, the downside is that by making money from money it takes away from focus on product.