Toyota Dealers May Lose $2.47 Billion in Monthly Revenue as Sales Halted

[Purveyor]

By Mike Ramsey and Doron Levin

Jan. 29 (Bloomberg) -- U.S. dealers who sell Toyota Motor Corp.’s namesake brand may lose as much as $2.47 billion in combined monthly revenue because of the halt of sales of eight models, including the popular Camry and Corolla sedans.

The 1,234 Toyota brand dealers would each miss out on $1.75 million to $2 million a month in revenue from new and used versions of the models that aren’t allowed to be sold, said John McEleney, the chairman of the National Automobile Dealers Association and owner of McEleney Toyota in Clinton, Iowa.

“We’ve never really dealt with anything like this with any manufacturer,” said McEleney, who also owns a Chevrolet dealership in Clinton.

Hyundai Motor Co. yesterday joined Ford Motor Co. and General Motors Co. in offering discounts to lure Toyota owners, while consumer Web site Edmunds.com said fewer shoppers are aiming to buy Toyotas. The company’s U.S. market share may fall to 14.7 percent in January, the lowest since March 2006.

At the same time, dealers are preparing to replace accelerator pedals in 2.3 million recalled vehicles that have a part that may be defective. The pedal flaw also triggered recalls of models in Europe and China.

Toyota’s American depositary receipts fell 57 cents to $77.10 at 8:42 a.m. before New York Stock Exchange composite trading. They rose 19 percent in the 12 months through yesterday.

Service Work

Profit from that service work may blunt the damage from lost new and used car revenue, said dealers. Toyota remained the top-selling brand in the U.S. last year, while the parent company was again the world’s largest automaker.

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http://www.bloomberg.com/apps/news?pid=20601109&sid=a1tVU.Dmb8pk&pos=11

[Romulox]

1. Those Toyota dealers need to quit whining and GET OUT THERE AND COMPETE!

It's not enough to want to be successful, Toyota dealers--you gotta work for it! :hi:

[DainBramaged]

3. You bet, sell those trade ins sell sell

:hi:

[DainBramaged]

2. It's not just Toyota, it's the HUNDREDS of THOUSANDS who work in the network

who will suffer. Toyota will get loans from the Japanese government, they'll be alright, but their worldwide employees will suffer. And they will give a shit about them as much as they gave about this problem when it first surfaced last year.

[MindPilot]

11. Can you imagine the horror show THAT sales meeting is?

"Guys, quit selling cars."

Heads explode.

[DainBramaged]

19. My friend just laid off 14 of his 20 sales people.

It's better for them to collect unemployment than make $135 a week without commissions. They only have a couple of models to sell and used cars.

[thereismore]

4. 19 dead. That's a problem. nt

[Skink]

5. Not to mention replaceing all the accelerators on hundreds of thousand unsold Toyotas.

who pays for all that labor? And who pays for the rentals? This could take a month.

[DainBramaged]

6. It's going to take MONTHS maybe a year or longer

The largest rental companies and auction houses pulled the Toyotas too. MILLIONS of used cars involved. Who goes to fix those?

[MindPilot]

12. Just like every other recall -- the local dealer

At least the dealer techs will be busy for a while. And something tells me there is not going to be much problem getting the vehicles in for this one.

[tammywammy]

17. Unless there's a shortage of replacement parts. n/t

[tammywammy]

7. It'll be charged out as warranty work

Toyota will pay the labor and rental charges. That's how it works with recalls.

[Skink]

8. I've never had rentals covered by my warranty.

[MindPilot]

10. that's because a recall is not warranty.

A recall is simply administered through the same process that dealers use to get paid by the manufacturer for their warranty work.

And every manufacturer has provisions in their warranty to pay for things like towing and rental, but they are usually reserved for particularly nasty situations and require approval from the car company.

I've even seen warranty pick up the tab for a motel.

[tammywammy]

15. I've seen them pick up monthly payments

If you're car was in the shop for so many days, mine personally was in the shop for over 60 days in less than 18 months. The dealer made my car payment and was reimbursed by the manufacturer. I saw that happen a few times.

[tammywammy]

14. Strange

The previous dealer I worked for, if they were out of loaners and it was warranty work you'd get put into a Budget rental car. We paid Budget each month, but was reimbured by the manufacturer for the rental since it was work done under warranty.

[LiberalFighter]

9. Japan should bail out the Toyota dealers.

[anigbrowl]

13. Toyota HQ will eat a lot of the cost over the next year or two

They'll have to give dealers a bigger margin, but they're a big enough company o be able to spread the cost out over several years. I'm glad to see them doing the right thing by consumers, although it's their own fault for not addressing the problem earlier.

[JCMach1]

16. Toyota doing their best to make Ford look good!

[DainBramaged]

18. Bump for GM.......

:applause:

[Yurovsky]

20. Yep, timing was good too...

a lot of folks will be getting refund checks in the coming weeks/months, and a down payment on a new GM car or truck would go a long way to bringing the General back to health as a carmaker.