Toyotas to Hold Value in Long Term



Source: http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20100205005823&newsLang=en

BusinessWire - February 5, 2010

Situation
Toyota throttle fix currently underway; recalled models available for sale again
Prius brake problem making headline news
New incentives will likely cover all models; advertised w/ corporate message
Message intended to re-instill trust in brand
Significant Points
Analysts expect Toyota to offer buyers goodwill incentives to rebuild relationships
Anticipate Prius values will fall only slightly in short term
Transaction prices of the Toyota recall models might be affected even less
Toyota purchase intent currently holding steady at about 11.8% of new car shoppers
Affected Toyota trade-ins have taken as much as 10% hit in value
Says
"As Toyota's image slides under a shadow, a shopper might get a great deal on a new car. When foot traffic on dealership lots is down, the prices also go down. In negotiations, one can create leverage to get a lower price by expressing concern over the safety issue in the recall." -- Philip Reed, Senior Consumer Advice Editor, Edmunds.com

"It's counterintuitive, but one of the unintended consequences of the production stoppage is that there is a significant reduction of supply, and we have only seen about a 15 percent reduction in purchase intent for new Toyotas." -- Jeremy Anwyl, CEO, Edmunds.com

"Forecasts of residual values are unaffected at this time - remaining higher than most Toyota competitors. We anticipate that any backlash will be short-lived." -- Joe Spina, analyst, Edmunds.com

Toyotas to Hold Value in Long Term