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In almost perfect contrast to Ford’s rapidly rising average transaction prices (previous post), Toyota is having to keep incentives and dealer discounts high in order to keep moving the metal. Automotive News reports that Toyota dealers, once money printing machines, are having to accept lower gross profits. Transaction prices on new 2011 models are the lowest, as a percentage of sticker prices, of all mainstream brands, according to TrueCar and Edmunds.com. And Toyota dealers aren’t denying it:
“We’re seeing it; the pressure is definitely on the bottom line, the gross line,” said Jack Wilson, president of Toyota of Vallejo, north of San Francisco. “I see no reason other than we’re still recovering from the recall situation. It’s a factor, and we can’t sit and not talk about it.”
Despite the discounting at both the manufacturer and dealer level, Toyota has seen sales rise a meager 1% so far this year, while most of the rest of the industry is posting double digit increases. The discounts on the top-selling Camry have been particularly strong, in part due to its early introduction in the model year cycle.
What’s more, Toyota sales are weighted heavily in two markets still rooted in recession, California and Florida. That could skew nationwide transaction price figures as dealers in those states become more desperate to sell cars.
Toyota is determined to return to 2 million annual sales (1.5 currently) within three years. But Toyota’s factory incentives are still on the low side, industry-wide, putting more pressure on dealers to cut margins, in order to stay competitive. The result is the lowest transaction price as a percentage of sticker price on new 2011 cars.
26 Comments on “The Other Side Of The See-Saw: Toyota Transaction Prices Lowest As Percentage Of Sticker Prices...”
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Gee, I wish I could muster up even a tiny bit of sympathy for those poor Toyota dealers who for the past gazillion years have raked in all those huge profits.
No duh. With the exception of the Prius, and everybody who cares enough for fuel economy to tolerate the numb floatiness of that car (like me) has already gotten one, every car in their lineup looks 5 years old, because that’s how old the designs are! Just to save millions of fellow Americans from future embarrassment, I hope Toyota gets rid of the fat-nose bulgy-sides design theme in their future releases.
Toyota needs higher gas prices and an overhaul for many of their cars.
Wow and normally we crucify GM for slapping a stupid high sticker on the car and then discounting like crazy. So how many more signs do we need to start printing the “Toyota is the new GM” bumper stickers?
What? you haven’t sent your order to China to print them yet? tsk tsk tsk
When a product loses it’s raison d’être, in Toyota’s case bulletproof quality, the price structure is unsupportable.
Boring cars + cheap interiors – reputation for quality = lower prices. Who would have though that Toyota would follow the Chrysler roadmap?
With Toyota’s bullet proof reputation in tatters, the sheeple are starting to realize how really dull Toyotas are. They are actually having to think about their automotive purchase now, and are apparently finding many appealing alternatives to the dull appliances Toyota has been cranking out.
One of our neighbors owns a Pontiac Grand Prix (can’t remember the year (and a 2003 Chevy Monte Carlo SS. He just bought his wife a new Camry V6.
Chevy Monte Carlo SS – bulletproof
Pontiac Grand Prix – bulletproof
2009 Camry – two transmissions, runs lousy and Toyota can’t figure out the problem.
What’s wrong with this picture?
Say what you want about the W bodies (2nd gen), of which I also own one, people bought tons of them for some reason.
The “edit” isn’t working. The Camry is a new 2010 model.
A question about sales growth: Honda and Toyota did very well (or at least, the last badly) through the recession and C4C. Their sales growth would be lower, wouldn’t it?
Not surprising with the record number of recalls and defects, delays at reporting defects to the authorities, oddball styling in numerous models, several car lines running on 5-6 year old designs with little to no change, arrogance at becoming number one at the expense of everything else and the generally uninspired driving experience of there main selling Camry, Corolla and Matrix models. Lower quality interiors aren’t helping either. Even my 76 year old father noticed several gaps, mis-aligned interior pieces and some general flimsy bits in a 2008 used Camry with only 24K miles that he test drove before settling on a 2008 Impala LS.
Jeez.
Not interested in a Camry because of the aforementioned issues.. (yet there are a dozen you don’t mention at all)
Toyota hasn’ gone through bankruptcy, but the only company in the 30yrs Ive been following the auto industry to ever have the govt stop the sale of a car.. 4 in fact.
I sure as hell wouldn’t be buying a GM car and definitely not the stripper Impala. Settling isnt what Id want to hear about buying a car. There are others out there he could have test driven… 3-4yr old Taurus / Ford 500 for one, a 300 for two.
Hmm..
Company with shitty reputation… or a company been through bankruptcy.
Tough choice…
That’s where Ford comes in.. for few people who know Ford is in best position — not completely because of the bailout.
@Paul, How about posting those 2010 model numbers as well?
Toyota’s quality peaked 10 years ago – but I’d bet dollars to donuts that their dealers are still making good money.
Toyota’s quality actually hit a trough, not a peak, ten years ago. The product they (and Honda) were offering ~2000 was the result of significant cost-cutting. It’s improved a fair bit since then.
Now what exactly is mechanically wrong with a shim for the accelerator pedal, and rubber mats which of course are accessories, not even OEM standard equipment.
Even with everyone saying that Toyota’s quality is down, Ford is pounding its chest (like many others saying that their quality is “Equal to or better” than Toyotas? which one is it guys? If Toyotas quality is so bad, why is everyone still trying to compare themselves with them?
Maybe we need a review on the 2010 Fusion 6speed auto (6F35) or the the Escape 6 speed (same one)? see exactly how good Fords Motortrend car of the year really is? FUN!!!!
http://forums.automobilemag.com/70/7761889/ford/2010-ford-fusion-transmission/index.html
Toyota’s just another car company. Now. 3 years ago, Toyota prices were rock-solid; no discounts at all. Now, my local Toyota dealers will sell you a $25,000 RAV4 for <$21,000. Free service for 2 years from Toyota. + a GPS! You can lease the same car for $1K down and $200/mo. Now, if only I wanted one…..
Three years ago we weren’t hip-deep in a recession and/or a “jobless recovery”.
Free service = two free oil changes. Big whoop. As to the hard times Toyota dealers are facing, I say, good for those c*cksuckers. Toyota dealers are officially on the same sleaze level as Chevy and Dodge dealers, except Toyota salespeople are a lot more arrogant (“That’s the price. You don’t like it, go buy something else”).
Well, at least they used to be arrogant.
No, no, it can’t, it can’t be true. Toyota has bullet proof quality. They don’t depreciate. My Corolla S is plenty sporty for me, whee! Lots of fun to drive. Lies. Vicious lies from the media out to destroy Toyota and pump up Detroit. It is all savage lies I tell ‘ya!
Toyota’s quality is at least as good as, oh, I don’t know….GM’s? And they still depreciate real slow, like, say, …..a Ford? Still as sporty as ever, too.
The last 2 posts were funny – thanks holden and ixim
Yeah cause Toyota uses chassis for 30+ years and drivetrains that were obsolete for 20 years too! I love the spin you guys put on it. Fords still using a 10 year old platform and the old Mazda6 platform to build Fusions, GM used an Aisin (Toyota part owned) sourced manual transmission which Toyota hadn’t used since 1992 (R154). Ford even sourced out an Aisin 6sp auto for the Fusion. The Escape hasn’t changed in 10 years and they still use the same 3.0 V6, Ford releases a re-design of the Mustang in 2010 but didn’t add drivetrain changes until a year after the “New” design? F150 has had a 5.4 forever (keep working on that!) The Ranger is as crude a vehicle that any manufacturer STILL has in production. But lets put 22″ chromes and ugly fascia on everything, then the John Q public will know we’re back. Ya, D3…you’re the same ugly girl you were in high school.
Supra, tell how us REALLY feel about the auto makers’ products, especially the D3’s. There’s a genuine swing back to D3 vehicles – call it “buy American”; “Toyota let us down”; whatever, they’re NOT the same ugly girl from 4th period lunch. It’s real, IMO.
IXIM
The bottom line is Toyota is held to different standards amongst the auto industry. Could you imagine keeping the same vehicle around for 10 years while changing nothing more than content (sync) and headlights? Even in the heralded F150, it sells almost half of what it did 10 years ago? And Eco boost and turbo chargers? There just getting this now? Toyota was doing this 25 years ago, I laugh at the EPA numbers on cars with Turbos, they’re no where close to being real and are done without any load?
Again what is mechanically wrong with Toyota rubber floor mats? It was a witch hunt from the beginning with the government adding their spin on things. Toyota has already been cleared of any wrong doing but the damage has already been done.
And yes the D3 are just as UGLY, but with far more make-up, and Daddy bought her some jewelry to boot!