Toyota’s decision to cease sales of affected new and used vehicles is a brilliant and responsible action. It shouldn’t be lost on anyone that Audi set itself back two decades by mishandling a similar issue. Although the initial reports about Toyota’s decision are shocking the airwaves and reflect negatively on the product, I believe that this will be short-term. I predict that consumers and consumer advocates will praise Toyota for its rapid and responsible move. In fact, in time I think that this temporary cessation will become the standard of response for future problems affecting other manufacturers.
I’ve already received many questions from dealers about what to do with their Toyota used car inventory in light of the problem. I think that this is truly a rare exception when the clock should stop on aging. This is simply a condition that can not be resolved without some time. For those dealers that age their inventory on systems like vAuto and others, I recommend that the clock be reset on affected vehicles as soon as the problem on that particular vehicle is resolved. This could be done by changing the lot date in the dealership DMS. Simply add the number of days that it took to repair the problem to the DMS “in-stock lot” date.
In the short term, I think it’s possible that values on these vehicles will fall. I would not panic, nor would I hesitate to purchase such vehicles. Again, I don’t think that this problem will be a long-term game changer for Toyota. In fact, it may ultimately prove to be beneficial. In other words, there may be a good opportunity for savvy wholesale buying. I realize that this goes against my general advice for dealers not to be speculators, but rather retailers. I think that there is a rare opportunity to turn lemons into lemonade.
I would appreciate the thoughts and responses of others on this most interesting issue.
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Dale,
Thank you for the positive outlook. I agree that panic will get us nowhere. At Acton Toyota we will remain successful by selling vehicles and providing great customer experiences…. granted we will have to do so with a temporarily reduced inventory, but hey Toyota’s got plenty of great vehicles not affected by this recall. I’ll be refocusing on the Prius (best vehicle I ever owned) we’ve got a great inventory of them and it’s an amazing technology and value story.
Although having to deal with this adversity isn’t my first choice, it’s always these experiences that help us grow as leaders. Toyota’s commitment to safety is evident in the fact that this is a voluntary action, I wonder what kind of press the other manufacturers who use these same components will get when it comes to light that they have no such course of action.
Just to keep this comment on topic…. We will remain active Toyota Certified Used Vehicle players as well, continuing to buy and sell in today’s market.
I'd ask for a “good luck” but we've got a good plan,
Craig
Dale, I couldn't agree more, this action should be the industry standard. Stop production, Stop selling, and Stop creating bigger problems. Toyota has been making the right decisions for many years now.
You may remember in the mid 60's, Toyota Americanized the Japanese Tiara & renamed it the Corona. The Corona was test-marketed in Southern California, and in 1965, Toyota finally branched out to the sleepy little town in Kentucky where I still live. (Pop 1,400) (not 140,000 or 14,000, yes 1,400) Following is a story told to me many years ago by one of the original Kentucky Toyota salesmen, Harry Johns, and is retold here as accurately as I rememeber.
Toyota approached the local Chrysler Plymouth Dodge dealership with a plan; allow us to park 2 Coronas on your lot, no floor plan, no interest, you try to sell them, and if you do, pay us our cost. The dealer agreed, (it was hard not to, even though the local Chevrolet & Ford dealerships passed on the same deal) and for about 6 months, the vehicles sat there until a nice blustery winter's day when a young lady stopped in & wanted to test drive one. It wouldn't turn-over, and after the salesperson explained to the customer that this is normal, someone must have left the door ajar, and hooked up the old jumper cables, it still wouldn't turn over. A call was made to Toyota about the problem & the next day, someone from Toyota showed up with new batteries, starters, & alternators. He crawled under the 2 cars in 3 inches of snow, replaced the equipment, and hence the famous option known simply as CK in the Toyota World was born. “The Cold Weather Package.” To this day, every car built for the U.S. market has the CK option, and even though it's listed as an option, (standard on some models) you can't get one in the U.S. without it. The Tiara was created for the milder Japanese climate, and test-marketed as the Corona in the milder California climate. The battery, starter, & alternator were just not strong enough to crank the engine in colder climates. Toyota acted quickly & made a change that is still reflected on the Monroney label 45 years later.
I spoke to a friend of mine, Gary McDaniel of Kerry Toyota today & he tells me it's business as usual. Gary tells me that they can still sell the 8 affected models as long as they don't have the defective part, and that the defective part is on about 60% to 70% of those models, meaning 30% to 40% are still available for retail sale. If the vehicle is one of the 8 affected, and the VIN starts with JT, meaning it is made in Japan, everything is fine & it can be sold. If the VIN begins with any of the North American numbers, such as 1, 2, 4, or 5, and it's not a Camry, it has the defective part & cannot be sold. If it is a Camry, and the VIN begins with 4T4, it has the defective part. If the Camry's VIN begins with 4T1, the pedal assembly needs to be inspected. A simple inspection if the accelerator pedal with a flashlight will tell you if the vehicle can be sold or not. There's a small metal tag that will either say “Denso” or “CTS,”, and if it's Denso, all is good, but if it's CTS, the vehicle must not be sold.
I spoke to another friend, Mark Howard who works at the Georgetown KY plant, TMMK, and he tells me they are shutting down Line 1 the week of Feb. 1st, but Line 2 is still producing with non CTS pedal assemblies. I heard from another source that the employees on Line 1 are given the choice of taking the week off without pay, taking the week off with vacation pay, or reporting for work as usual, where they will be temporarily assigned to other jobs & tasks.
I believe Toyota will get through this just fine, with the biggest issue being public opinion stemming from how the media reports on this recall.
Paul,
Thanks for the background and critical information.
Dale
Dale,
I couldn't agree with you more. Although business has been disrupted, the negative effects will be short-lived, and the way that this issue has been responded to by Toyota can very well reap long-term dividends to the stores that react swiftly, and with the Customer in mind. I applaud Toyota for what they've done, and how they've handled it. The message here to the stores is clearly “DO NOT PANIC”, and think outside the box to insure that the Customers' concerns are addressed quickly, therefore exceeding their expectations … turn the challenge into an opportunity!
George,
Thanks for your comments. I completely agree.
Dale
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