Drivers in China are no longer in a hurry to own Toyota Motor Corp.â€™s cars.
Neil Hu, a sales manager at a Toyota dealership in Beijing, said he has stopped charging a 5,000 yuan ($732) premium to customers who want to skip the waiting list for RAV4 sport- utility vehicles. He took the initiative after the Japanese carmaker recalled 75,552 of the SUVs in China last month to fix gas pedals that may stick.
â€œI heard the situation in the U.S. is pretty bad for Toyota,â€ Hu said. â€œThe recall has impacted us as well.â€
Toyota, which grew more slowly than competitors in China in 2009, will likely lose more market share and see a decline in local profit margin this year, analysts say. The carmaker has relied on a reputation for quality and safety to sell high margin, mid- to large-size models even as the worldâ€™s biggest auto market shifts to cheaper, smaller cars, encouraged by government incentives.
With Toyotaâ€™s brand damaged by global recalls of millions of vehicles, profit margins for its SUVs and Camry and Crown sedans may shrink, said Ashvin Chotai, London-based managing director of Intelligence Automotive Asia Ltd., an industry consultant.
However, its not all bad for Toyota, they did see a 30% rise in sales:
The companyâ€™s February China sales rose 30 percent to 45,400 vehicles, underperforming the overall passenger-car marketâ€™s 55 percent surge.
The bad news is that China is about to begin an investigation into Toyota’s recall in China. The recall was announced in late January but cars did not repaired until the end of February, leaving many Toyota drivers rather unhappy.