Toyota's ‘automatic' status is slip-sliding away

Drip. Drip. Drip.

Every day seems to bring fresh bad news for Toyota. Tuesday, it came from Consumer Reports, which urged consumers not to buy the Lexus GX 460 because of a potential roll-over danger.

It's yet another blow to Toyota's engineering and quality reputation. The tally of safety recalls, Congressional probes, fines and other woes keeps mounting.

How far has Toyota's reputation fallen?

Only last year, Consumer Reports was slapping “Recommended” labels on new Toyota models -- before compiling reliability data like other brands had to -- because past Toyotas had been so reliable. At the bible of the rational buyer, slipping from automatic “recommended” to “don't buy” so quickly pretty much makes it official:

Toyota has lost its “automatic” status.

The distinction is subtle.

Rivals start to advertise “better than” instead of “as good as.” The next new-car time, fewer loyal owners simply buy the latest Toyota. More at least consider other brands. Toyota's still “on the shopping list,” but no longer “is the shopping list.”

But the impact is real.

One immediate implication for Toyota and its dealers: Prepare for thinner margins. That price premium for superior quality is melting.

Toyota will rebound. It has too many strengths, too many reserves and too many strong dealers not to. But the longer a rebound takes, the smaller the bounce.

And there are longer-term implications for Toyota and its U.S. dealers.

With its core loyalists aging, Toyota needs more first-time buyers. Those buyers, coveted because they are forming often-lifelong brand preferences, have the shortest memories of past performance and the greatest exposure to current news. They're harder to corral.

Next, President Akio Toyoda's urgent quest to inject some styling and performance passion into his brands better hurry. Without that bulletproof quality reputation, what exactly is the reason to buy a Toyota?

And those strong Toyota dealers will need to polish selling skills when fewer shoppers walk through the showroom door firmly pre-sold.

So hard to achieve, so quick to disappear, Toyota has to wonder if it can get back to “automatic.”

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