In response to its biggest sales drop in four decades, Toyota announced its offering of zero-percent financing on eleven models in its lineup. Last month, the world's most profitable automaker posted a 32% drop in U.S. sales compared to the same time last year and according to their estimations, the U.S. market will be down 7% overall to 2.44 million units sold by the end of the year.
Included in the latest incentive plan are the Corolla, Matrix, Tundra, Camry, RAV4, Highlander, FJ Cruiser, 4Runner, Sequoia, Sienna, Tacoma and Tundra. The offers runs through November 3rd and covers loans ranging from 36 to 60 months, depending on model. Surprising many industry insiders is Toyota's inclusion of its Corolla and Matrix small car -- a clear indication the economic situation is really hitting hard on all fronts.
"Needless to say, it's quite obvious dealer traffic is decreasing," Toyota spokesman Hideki Homma said today to Automotive News. "We needed to promptly do something."
Many analysts believe Toyota's latest marketing scheme to bring in dealer traffic is risky but doable, as the automaker has pockets deep enough to finance plenty of potential buyers. According to Christopher Richter, an analyst with CLSA Asia-Pacific Markets, the loans will likely prompt elevated qualification standards that many buyers will not qualify for.
Although the incentives are projected to slow ailing sales figures, they're not expected to reverse them. Last month, General Motors' market share increased slightly as a result of it not suffering as much in sales as its chief rivals had. Helping its cause was its "GM Employee Pricing" plan rolled out on August 20. Analysts are confident this is only the beginning of an impending incentive war amongst automakers.
Source: Automotive News (Subscription required)