The costs of recall | Advantage O'nomics
One important one facing them in the eye is the insurance companies. Allstate is one of the most frequent insurer of Toyota vehicles and is already processing investigations to support subrogation action on behalf of its insurer pool against quality stricken Toyota, firstly for the accelerator pedal issues and thn the new ones on the Prius as well. The insurance companies’ actionswill be likely supported by consumer associations fighting Toyota negligence.
In addition Toyota is paying its 1200 dealers upto $75000 to support actions to prvileged customers who walk in to process a recall. These have not included replacement costs for such a large case of recalls. That should be a cause for concern as well, when Toyota returns (most likely) in March to start selling these 8 models.
Some obvious ones were earlier covered in an article i read from the boston globe:
Toyota dealers already know the first and most critical step of rebuilding the confidence and trust of Toyota owners is the interaction and service they receive in your dealership,” Carter said.
Toyota is sending checks this week based on the number of cars each dealer sold last year. Dealers who sold fewer than 500 cars will get $7,500. Dealers who sold more than 4,000 will get $75,000. Toyota has around 1,200 U.S. dealers.
Carter said Toyota is considering other marketing efforts to win back customers’ confidence, but he didn’t elaborate.
Toyota has halted sales of the eight models involved in the pedal recall. When sales resume, Toyota may have to offer incentives like low-interest financing and rebates to lure customers, said Paul Ballew, a senior vice president at Nationwide Insurance Co. and a former General Motors Corp. sales analyst.
The missed Sales opportunity
The first six models that were recalled were about 20000 cars a week in sales, the new Prius recalls will easily add another 10,000 cars a week. When Toyota comes back into play it would be looking at selling 32000 cars a week or 139,000 cars a month in front of 25,000 cars this month from ‘the blue oval’ Ford in retail for a total of 116,000 cars sold in January . Fleet sales at Toyota have not likely suffere much from the 95,000 odd in October 2009 though.
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