The effect of Toyota recalls on the used car market

February 5, 2010
DALY CITY, CA - FEBRUARY 03:  The Toyota logo ...
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I’ve asked members of our data department to analyze the effect of Toyota’s recent troubles on the used vehicle market.  I expect to have the results posted shortly.

The preliminary analysis, however, definitely shows that Toyota’s market day’s supply began decreasing in November and December, and that rate has really picked up in January.  Unfortunately the decrease in day’s supply, however, does not represent faster retail movement, but rather vehicles being removed from the market for sale.  I’ll have more detail on this matter soon.

I think it’s worthy to note that Toyota’s recent problems support the general premise that dealers should diversify their inventory.  This strategy is analogist to diversification in an investment portfolio.  No matter how solid a given brand or investment vehicle may be, it is unwise to have too much concentration in any single sector.

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