UPDATED: 10/3/08 3:20 pm EDTTOKYO -- Toyota Motor Corp., reeling from its steepest drop in U.S. sales in at least four decades, is offering no-interest loans on 11 models. The “unprecedented” move is designed to relieve consumers’ worries about tight credit, Toyota said in a statement late Thursday, Oct. 2. It follows General Motors’ decision to provide interest-free deals after industry sales last month fell below 1 million for the first time since 1993.
“Dealer traffic is decreasing,” Toyota spokesman Hideki Homma said today. “We needed to promptly do something.”
The move may help Toyota stem its 10.4 percent slide in U.S. sales this year and preserve its August forecast of a 7 percent drop for the entire year -- its first decline since 1995. Japan’s biggest automaker posted a 32 percent drop in U.S. sales last month.
Analysts said Toyota is in a better position to pay for the incentives than its money-losing Detroit rivals.
“This is a great marketing ploy when people think there’s no credit out there,” said Christopher Richter, an auto analyst with CLSA Asia-Pacific Markets. “I don’t think the costs to Toyota will be that great.”
Toyota’s offer runs through Nov. 3 and will cover loans of 36 to 60 months, depending on the model. The qualifying nameplates are the Matrix, Corolla, Camry, RAV4, Highlander, FJ Cruiser, 4Runner, Sequoia, Sienna, Tacoma and Tundra.
“We gotta try something,’’ said China Arbuckle, general sales manager of Bill Page Toyota in Falls Church, Va. She said consumers are wary because lenders are offering loans only to the most creditworthy customers. “We can’t just sit here and do nothing,” Arbuckle said.
September’s 27 percent tumble in U.S. sales pushed the industrywide decline to 12.8 percent for the first nine months of the year.
GM’s Aug. 20 employee-pricing offer to all customers helped limit its September sales decline to 16 percent. The incentives boosted GM’s September U.S. market share by almost 4 points compared with last year, to 29.3 percent. GM switched to 0 percent financing on Wednesday.
Toyota’s inclusion of small cars such as the Corolla and Matrix in its 0 percent plan is a sign of industry stress, said Junichi Yamaki, senior vice president for auto analysis at Moody’s Japan.
Combined U.S. sales of the two small cars fell 28 percent in September despite high gasoline prices that continue to drive consumers away from trucks.
Said Bob Carter, Toyota Division general manager: “Not only do we have the inventory of today’s sought-after fuel-efficient models, but we have the capacity through Toyota Financial Services to finance or lease them.”
Philip Nussel and Patricia Scott contributed to this report
PRESS RELEASE: Toyota Announces Zero-Percent OfferTORRANCE, Calif., Oct. 2 /PRNewswire/ -- Toyota Motor Sales (TMS), U.S.A., Inc., today announced a zero-percent interest rate offer on eleven Toyota models for qualified buyers. Expiring November 3, 2008, the loan offer varies by model, with terms ranging from 36 to 60 months.
Taking aim at the credit squeeze which has sidelined many of today's
new-car buyers, the attractive offer is unprecedented for Toyota.
"Not only do we have the inventory of today's sought after fuel-efficient models, but we have the capacity through Toyota Financial Services to finance or lease them," said Toyota Division General Manager Bob Carter.
The Toyota models qualifying for this offer are: Matrix, Corolla, Camry, RAV4, Highlander, FJ Cruiser, 4Runner, Sequoia, Sienna, Tacoma and Tundra.
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