Toyota Sales Surge despite Bad Press
Safety concerns over Toyota’s sudden acceleration and malfunctioning brakes system caused Toyota to offer the lowest auto loan rates in its history at 0 percent, which in turn spurred auto buying activity for the entire industry.
Toyota automotive sales saw a record 41 percent surge while General Motors saw a 21 percent increase compared to the previous year. Overall, U.S. vehicle sales increased by a huge 24 percent overall thanks to special manufacturer financing deals and other attractive incentives from all car manufacturers.
In light of a worldwide recall on most of its vehicle models which now includes Lexus, Toyota tackled the problem head on with its attractive financing and generous rebates all the while doubling its global vehicle production to 773,297 cars. The Japanese auto manufacturer raised domestic production numbers to 347,281 vehicles.
In total, over 8.5 million vehicles were recalled worldwide, costing the company about $2 billion. Its image is now tainted where the company was once lauded for its quality manufacturing process.
As a result, Toyota’s stock has slipped and its long term debt was downgraded by Moody’s Investors Service. The company was also hit by the largest ever fine for an automotive manufacturer to the tune of $16.4 million dollars for failing to notify the United States government of the accelerator problems it knew about before accidents ever occurred.
Low car loan rates are being offered by many other auto manufacturers in response to Toyota’s aggressive financing deals, further contributing to an uptick in car buying. Overall however, auto sales have been lagging compared to the five years leading up to 2008 when an average of 16 million cars were sold each year.