The message: In a credit-crunched America, Toyota Financial Services has plenty of cash to lend. Executives say they're trying to do what General Motors' "Keep America Rolling" campaign did after 9/11 — get the country rolling again.
The "Saved by Zero" ad campaign began Oct. 2. It promotes a 0 percent financing program on 11 vehicles. Dealers say Toyota will shell out at least $250 million this month to cover the cost of the subsidized loans and to fill the airwaves with commercials.
Calling it "mind-boggling," one dealer who asked not to be named said he doesn't believe Toyota has ever spent so much in a single month on incentives and advertising.
"We thought they had dried up on us," said Dave Conant, a large-volume Toyota dealer in Los Angeles. "But they said they have plenty of money and would still be strong and aggressive on deals that make sense."
To get regional dealer ad associations to deliver the same message — that Toyota Financial is doing deals — the automaker will pay out 50 cents for every dollar that associations spend in October. That's up from the 32.5-cent rate ad groups normally get.
"This is big, really big," said Fritz Hitchcock, another large-volume L.A. dealer.
Toyota Division dealers need the help. Sales plunged 31.2 percent in September. "Traffic is bad," said Conant. "We hope this messaging will help."
Big difference: AdvertisingToyota has offered low-interest deals before, but executives say this time things are different.
"The big difference in this program is really the advertising behind it, not necessarily the incentive," said Jim Lentz, president of Toyota Motor Sales U.S.A. Inc. He said Toyota will "let consumers know that there is credit available in this industry and to come buy a vehicle."
"In our case, credit is not the biggest challenge," Lentz said. "The challenge is consumer confidence."
Last week, Toyota Financial CEO George Borst discussed the campaign at Toyota Division's annual dealer meeting in Las Vegas. Commercials already are running in some markets and are due to be everywhere by today, Oct. 13.
Borst told dealers that Toyota Financial is one of only two AAA-rated auto lenders. The other is GE Capital. "We tell our dealers we are their partners in good times and in tough times," said Borst. "This market certainly gives us the opportunity to practice what we preach."
Said Hitchcock: "Borst told us they're loaning tighter, but at least they have the money."
The money comes from the parent company's deep pockets in Japan, said Mark Oline, an analyst at Fitch Ratings. "They are extraordinarily well-capitalized and liquid," Oline said. "They have extremely strong ratings, and that allows them to borrow just about anywhere in the world."
But Toyota Motor Corp. hasn't been immune to the collapsing stock market. At the end of last week, the company's shares on the New York Stock Exchange had fallen to about $62, down a 52-week high of $117.
Toyota won't confirm or deny the $250 million figure. But spokesman Mike Michels says the scope of the program is unusual for the company.
"It's a significant commitment and investment to build showroom traffic for our dealers," Michels says. "The only other comparable period was post-9/11. It was time to take dramatic steps to restore consumer confidence."
Michels said the 0 percent deal is restricted to qualifying customers. "But we have other alternatives, and we still do leasing," he said. "If you're having trouble, we may be able to help you."
Ads can be tailoredToyota's 30-second "Saved by Zero" commercial promotes the 11 vehicles eligible for 0 percent. The qualifying nameplates are the Matrix, Corolla, Camry, RAV4, Highlander, FJ Cruiser, 4Runner, Sequoia, Sienna, Tacoma and Tundra. The commercials will run in all 50 states through the month. Dealers can tailor other commercials, including those for radio, to tout the strength of Toyota Financial and offer incentives to help customers qualify for loans.
Jesse Toprak, executive director for industry analysis at Edmunds.com, said the 0 percent program may be working. Through Thursday, Oct. 9, he said industrywide showroom traffic this month was down 12 percent from the same period last year. But he said Toyota traffic was off only 4 percent.
"But I'm still not sure the program will attract a lot of consumers," Toprak said. "One big problem is that consumers who have good credit are being cautious. They want more stability in the marketplace."
"Saved by Zero" does not include Lexus, Scion or hybrid models.
"If we get shoppers shopping one brand, then they will go to other brands," said Michels. "At least it begins to build traffic. Traffic for one helps everyone. The one difference for us is there is no credit crunch here."
Chrissie Thompson and Jim Henry contributed to this report