Special Coverage

Toyota's Safety Crisis

Coming as no surprise, Toyota Motor Sales U.S.A. Inc.’s January sales fell 8.7% on a daily sales basis, compared with year-ago, to 98,796.

It was the first January since 1999 that Toyota’s deliveries have dropped below 100,000 units. The auto maker’s sales also fell 19.7% below Ward’s January 2010 forecast of 123,000.

An examination of the January numbers shows many of the Toyota models taking the biggest hits were not among the eight whose sales were halted last week due to a recall for sticking accelerator pedals. Nor were they part of an earlier recall for floor-mat entrapment.

Bob Carter, group vice president and general manager, Toyota Div., tells the media in a conference call Toyota’s January sales fell 23%, or 20,000 units, below its expectations. But there is no way of knowing how much the recall affected deliveries.

“The seasonality is significantly down in January vs. what the industry sells in December,” he says of the traditionally slow sales month.

Carter reiterates during the sales call Toyota’s first priority is fixing customers’ cars that are implicated in the recall, and the company has no projection to offer on when it will lift the ban on sales and begin moving inventory on dealer lots.

“Once we get customers taken care of, then we’ll begin to evaluate plans at that point,” Carter says.

The Toyota model suffering the biggest decline in January was the low-volume Lexus LS 600h hybrid-electric sedan, plummeting 70%, Ward’s data shows. The low-volume Lexus SC convertible followed, losing 64.4% of its year-ago volume.

Toyota’s Sienna minivan, the next generation of which goes on sale this month, was the No.3 volume loser in January, with deliveries plummeting 57.1% from like-2009.

Among the recalled models, the Sequoia SUV, Avalon large sedan and Matrix compact 5-door were Toyota’s fourth, fifth and sixth biggest volume losers in January. Sequoia sales tumbled 56.2%, Avalon’s declined 51.7% and Matrix deliveries slid 47.8% from year-ago.

Sequoia sales fell sharply below prior-year in December as well. However, year-ago volume was strong, as the current Sequoia was all-new in late 2008.

The Avalon is due to be replaced soon, and a redesigned model will make its debut next week at the Chicago auto show. Declining sales in recent months have been fairly modest, suggesting the car has suffered some fallout from the recall and ensuing negative publicity about Toyota. Deliveries were down a mere 1.9% in December and 15.5% in November.

Toyota’s best-selling models were most robust in January. The Corolla compact sedan, Toyota’s second best-selling vehicle in the U.S. and also involved in both recalls, saw a 1.9% uptick in deliveries last month, Ward’s data shows. Other gainers included the Lexus ES, up 6.6%, and the Toyota RAV4, up 6.5%.

Toyota’s best-selling car in the U.S., the Camry midsize sedan, had some units that were not on sale last week due to the recall. The Camry lost 17.7% of year-ago volume, ending January with 14,925 deliveries. Rival cars from competitors American Honda Motor Co. Inc. and Nissan North America Inc. saw a considerable sales’ rise, with the Accord up 35.6% and the Altima up 31.8%.

Toyota’s standard Highlander cross/utility vehicle, whose sales were halted last week, experienced a 10.3% dip in January, while deliveries of the Highlander Hybrid, not part of the stop-sale, fell 42.1%.

Hybrid and Lexus models for the most part did well in January. Sales of hybrids, including both Toyota and Lexus brands, rose 11.2%, with the Prius up 13.2%. The Prius was implicated in Toyota’s floor-mat recall but is not part of the 8-model sales ban.

Lexus deliveries rose 19.9% in January, with the RX CUV once again the brand’s best-seller, with 5,688 sales. However, the HS 250h dedicated Lexus hybrid continued to underperform, selling only 1,247 units. Lexus officials have pegged HS annual sales at 20,000-22,000 units.

No matter the reason for Toyota’s poor January performance, the auto maker lost the No.2 sales spot in the U.S. to Ford Motor Co. for the first time since May 2009, Ward’s data shows. Toyota’s market share also is expected to fall.

More bad news came when U.S. Transportation Secretary Ray LaHood earlier today told the Associated Press Toyota was “a little safety deaf” in its decision to recall vehicles. “While Toyota is taking responsible action now, it unfortunately took an enormous effort to get to this point,” he is quoted as saying.

Toyota responded in a statement, saying it “understood that the soonest possible action would be in the best interests of our customers.

“We are very grateful for the advice of all the government agencies involved and feel that through our handling of the recall we have a chance to regain our the trust of our customers. We will continue to cooperate fully with (the National Highway Traffic Safety Admin.) on all vehicle safety issues.”

cschweinsberg@wardsauto.com