The massive scale of recalls hurt auto sales of Toyota Motor (TM). Sales figures for August show how sluggish the market is, the company reported its overall sales dropped by more than a third as compared to a year ago.
A year ago, the government’s ”cash-for-clunkers” program boosted up sales of motors, which benefited the industry. The Japanese carmakers benefited with growing sales.
It is no longer the case this year.
More than dozens of recalls in the first nine months this year, the sales of motors are seriously harmed.
The company sold 148,388 units in August. The sales decreased by 36 per cent within its Toyota division, while those under Lexus luxury division has dropped 15 per cent.
The models Camry and Corolla were especially popular during the ”cash-for-clunkers” program in August 2009. Comparing the sales figure a year ago, the sales of Camry fell by 43 per cent, while those of Corolla dropped by more than half to about 20,000 units.
Suffering from the painful after-effect of the massive recalls, the carmarker is spending more than a year ago, in order to regain consumers’ loyalty and confidence. It extends an offer of two years free maintenance. Also, it has offered discounted leases and interest-free loans on many models in order to boost up sales.
The harmful recalls include the latest one in August, with a recall of over a million Matrix and Corolla models with engine control problem. Earlier in January, the company recalled over 2 million motors for gas pedal problems. Consumers has shown their lost in confidence of the brand by turning to other carmarkers. A decrease in motor sales is a serious blow to the company.
