Industry News
Geneva: Toyota expects huge drop in sales
2nd March 2010
Toyota is braced for a huge drop in official sales figures as the beleaguered Japanese motor group insisted that it would not cut prices to lure back passengers put off by the manufacturer's multiple car recalls.
The sales fall last month — after an already sharp drop in January, when Toyota sales were down more than 12 per cent in a rising market buoyed by the scrappage scheme — looks likely to exceed 25 per cent.
Fresh industry figures for Toyota sales in the UK are not scheduled to be published until later in the week.
But Didier Leroy, the group's European sales head, speaking at a briefing in Geneva before the Geneva Motor Show this week, conceded that the company had experienced a poor February.
"We lost a whole week because we stopped delivering cars [because of the recall in the UK]," Mr Leroy said.
"That will come on top of the impact that the recall has had because [potential] customers have said: 'I will wait, I need to understand better whether I should consider buying a Toyota'."
He continued: "I cannot say how long this will go on. March, April, May? It depends on how the story continues.
"The key now is whether the customer comes back to the showroom."
However, Mr Leroy ruled out Toyota offering price cuts to get drivers back into its dealerships.
"That would be the wrong message," he said. "I do not believe such incentives would work. We cannot regain the trust of the customer with discounts."
Toyota is launching a new British-built hybrid in May, a petrol-electric version of its Auris model to go alongside its flagship Prius hybrid, but Mr Leroy sharply rebutted suggestions that sales of the new model would be affected by disgruntled customers.
"We say let the customer come and test the car, we say let them evaluate for themselves rather than listen to the rumour and the noise."
Toyota executives acknowledged for the first time that the sticking accelerator problem that has led to the recall of 1.7 million Toyotas around Europe was initially a British problem.
Kazuo Okamoto, global vice-president for Toyota Motor Corporation, said: "It was in the right-hand drive models, those that are sold in Britain and in Ireland, where we first saw the phenomenon.
"Around 90 per cent of the incidents reported were on right-hand drives."
The Times revealed last month that Toyota was aware of sticking accelerator faults in cars in the UK a year ago, when it first started getting reports of the incidents.
The company, however, did not issue a recall of 280,000 cars across seven models until the end of January this year.
The company is claiming that its recall of cars is going more quickly in the UK than in the rest of Europe.
It says up to 30 per cent of cars called in across the UK have been fixed. The figure for the rest of Europe is only 15 per cent.
The recall of cars in Europe also includes the next Prius, the third generation hybrid of which 8,800 cars in the UK have been affected.
The sales slump is hitting production at the group's factory in Burnaston, Derbyshire.
Toyota is laying off 750 of its 3,500 workers, is closing down for two weeks at Easter, and is cutting back to one assembly line this summer.
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