Toyota consideration and interest has dropped even further in the past week as the company continues to issue massive recall announcements, according to the latest Kelley Blue Book (KBB) Market Intelligence data.
The latest KBB study conducted on kbb.com shows that 27% of those who said they were considering a Toyota prior to the recall now say they no longer are considering the brand for their next vehicle purchase, an increase of 6% from the 21% who indicated they had defected from Toyota the prior week (immediately following the initial recall announcement).
In addition, now 28% of those who said they were considering a Scion and 23% of those who said they were considering a Lexus prior to the Toyota recalls, now say they are no longer considering those brands.
Now nearly half (49%) of the car shoppers who have defected from Toyota say they are not sure if they will consider the brand again, even once Toyota’s problems are resolved.
KBB updates its famous Blue Book Values on a weekly basis, and the values continue to fall for Toyota models affected by the recall announcements. On February 5, 2010, company analysts initially decreased the used-car values of recalled Toyotas by 1-3% in response to the slowing demand for Toyota models in the marketplace following the consumer recall. This coming Friday, February 12, KBB will once again adjust values for these vehicles downward by an additional 1.5% on concerns around the growing supply of unsold Toyotas on both dealer lots and at auctions. The latest announcements about new 2010 Priuses and late-model 2009-2010 Corollas also have affected not just used-car values, but also new-car (transaction) values. After the latest Prius recall news, consumers can pick up a brand-new 2010 Prius closer to dealer invoice price than its suggested retail price, a difference of $1,000-1,500.
“We are seeing a softening of both used Toyota values and the New Car Blue Book values of new Toyotas this week,” said Juan Flores, director of vehicle valuation, Kelley Blue Book. “The softening of values is a product of weakened consumer demand, and the realization that Toyota is going to have to offer lower prices to get some consumers to consider Toyota vehicles again,” he added.
Kelley Blue Book Values Summary for Toyota:
— All Used Recalled Toyota Models: Used-car values declined 1-3% (depending on the model) on February 5, 2010, and will drop an additional 1.5% on Friday, February 12, 2010
— New 2010 Prius: New Car Blue Book Value (transaction price) will drop by $1,000-1,500 on February 12, 2010
— Used Prius, 2009 and older models: Used-car value dropped 1.5% on February 5, 2010, and will drop an additional 1.5% on February 12, 2010
— Used Corolla, 2009 and older models: Used-car values dropped 1.5% on February 5, 2010, and will drop an additional 1.5% on February 12, 2010
In addition to the values decline, site traffic from Kelley Blue Book’s kbb.com detailed in the company’s Market Watch report also shows a continued decline in Toyota interest in the wake of the recall announcements. Toyota models have seen an overall 25% decline in page views since the recall news initially broke. Even Toyota models not specifically involved in the recall continue to see a decline in page views, demonstrating the negative impact the recall is having on current interest in all Toyota vehicles, not just the models named in the recall.
“It seems the longer Toyota is the subject of daily headlines with the continuing recall news, the more consumers are reacting negatively by defecting from Toyota, Lexus and Scion. We are seeing shoppers on kbb.com lean more toward competitors, especially the domestics like Ford and Chevy who are offering enticing conquest incentives,” said James Bell, executive market analyst for Kelley Blue Book’s kbb.com. “Toyota is going to have to work extra hard for quite some time to overcome the ‘double-whammy’ it is seeing with the continuing drop in values and consumer brand consideration,” he said.
RBR-TVBR observation: Ouch! As reported this week, Toyota and its dealers have been advertising heavily to try to counter this bad PR. The brand, however, is not going to be repaired quickly. Toyota will have to work hard to rebuild its previous image of quality and then convince consumers through advertising. Meanwhile, other brands should be taking advantage of the moment to pitch their own wares. It’s all beneficial to broadcasters.