LOS ANGELES – With some vehicle inventories becoming sparse as supply lines thin, Toyota Motor Sales U.S.A. is shelving some of its incentives and marketing programs.
Toyota's "No. 1 For A Reason" marketing campaign was dialed back once the extent of the damage from the March 11 earthquake near Sendai, Japan, was known.
A Toyota dealer, who declined to be named, said the program was estimated to be a $1 billion marketing spend.
The company declined to comment on how much it spending on the advertising campaign.
"Toyota consistently assesses market conditions and measures the impact of specific factors when evaluating current and near future sales programs," a company spokesperson said.
"In consideration of recent fuel price increases and demand for high fuel efficient vehicles as well as individual model sales strength, Toyota will take necessary steps toward adjusting programs accordingly. We also acknowledge the current Japan circumstances and are assessing any potential impact to supply."
Toyota's U.S. sales fell 6 percent in March, making it the only major automaker to post a decline for the month.
The automaker blamed the results in part on lower sales of SUVs and trucks,. A year ago, the automaker's sales benefited from higher incentive spending as the company moved to lure buyers in the wake of a massive recall.
For April, Toyota has shelved any national promotions for the brand, and discontinued a 2.9 percent APR program on the Prius hybrid. However, Toyota traditionally holds a sales event in May, and no plans have been made yet to cancel it, said Bob Carter, Toyota Division general manager.
Toyota has about 12,250 Priuses in its U.S. inventory, which comes to about 20 days' supply. Toyota has sold 42,779 Prius units through the first quarter of 2010, up 50 percent. Overall, the Toyota brand has about 352,000 units on the ground, or about a 55-days supply, Carter said.
However, while nearly all of Toyota's Japanese factories remain offline, the automaker is continuing sporadic Prius production, along with two Lexus hybrids.
"There are Priuses in the pipeline. We don't see a scenario of running out of Prius," said Randy Pflughaupt, Toyota group vice president of sales administration.
Carter said that some of the incentive money has been shifted over to other vehicle lines with larger inventories, such as pickup trucks and the Camry. However, because Toyota largely allocates its incentive spend on a regional basis, different areas of the country will have different programs.
"Our dealers are used to working with tight supply," Carter said. "We are hoping any impact on Prius supply will be minimal."