NEW YORK – Generous incentives are at least luring existingcustomers back to the brand as the auto maker tries to rebuild its image, tarnished by a sweeping sudden-acceleration controversy.
“Our loyal customers are coming back, but the challenge will be in attracting conquest customers,” says Jim Lentz, president ofMotor Sales USA Inc., referring to efforts to draw customers from other automotive brands.
In March, Toyota poured on the customer incentives, which helped boost sales 35% compared with year-ago.
“Toyota incentives have been great for us,” Southern California dealer Fritz Hitchcock tells Ward’s. “Sales at my three Toyota stores are inching up.”
More incentives are coming, Lentz says during a panel discussion at the National Automobile Dealers Assn./IHS Global Insight conference held here in conjunction with the auto show. “We need to let the market and our dealers know we are back in business.”
But Toyota, even before it became an embattled auto maker, used incentives as “a tactic, not a strategy,” he says.
Panel moderator Michael Jackson, CEO ofInc., calls Toyota’s sudden-acceleration woes “the elephant in the room” and asks Lentz what Toyota might have done differently.
“We built the brand on dependability and reliability and over time layered on safety,” Lentz says. “You’re biggest strength can be your biggest challenge. We were so convinced reliability was set in stone that we lost our focus.”
As the crisis grew, the auto maker could have done a better job in communications, he says. “Things happened so rapidly that we were mobbed by customers; our dealers were mobbed by customers. We didn’t have all the answers, and it put our dealers in a tough situation.”
But Lentz vows, “We’ll come back,” pointing out that dealers, in particular, are repairing relationships as well as recalled vehicles.
U.S. dealers, many of them staying open around the clock, have repaired about 1.7 million recalled Toyotas, 1.2 million of those involving potentially sticking gas pedals.