Toyota Customer Loyalty Slips as Recall Troubles Persist

Consumer Reports on Friday reported that the number of current owners who would consider buying another Toyota vehicle has fallen sharply in the wake of the company’s recent recalls and ensuing public relations troubles.

The report states, “The intense publicity surrounding Toyota’s recent recalls seems to be having a pronounced effect on the company’s image among its current customers.”

Toyota, whose customers have long been among the most loyal in the industry, now finds itself behind rival Japanese automaker, Honda, in the number of customers who would first consider their current brand when shopping for a new vehicle.

According to the report, 60% of Toyota owners surveyed over a four-day period, from February 4 through 8, said they would shop Toyota first. That’s down 10% from last December.

Although Toyota has been supplanted by Honda as the automaker with the highest customer loyalty, it still leads domestic automakers Chevrolet, which came in third with 52% and Ford, which ranked fourth with 51% customer loyalty.

The survey was conducted prior to last week’s House committee on Oversight and Government Reform hearings which dominated headlines and further called into question Toyota’s reputation for safety and quality.

The report found that Toyota customers aged 45 and over expressed a higher degree of loyalty to the brand, while owners aged 18 to 44 indicated they were more disposed to switching brands.

In addition to negative reporting by the media, Toyota’s troubles have provided daily fodder for comedians, bloggers and late-night talk show hosts.

Toyota’s public relations troubles began last October when it announced the recall of 4.2 million vehicles to replace driver side floor mats the automaker claimed were to blame for unintentional acceleration problems.

Since then, Toyota has recalled additional vehicles to repair faulty accelerator pedals, upgrade braking system software and replace defective drive shafts. On January 26, Toyota halted production and suspended sales of eight of its best-selling models including the Camry, Corolla and Prius hybrid.

In the U.S., about 6.5 million Toyota vehicles have been recalled since last fall.

Although customer intent does not necessarily translate into actual action, Toyota’s ongoing troubles could greatly benefit rival automakers. Consumer Reports said, “Among the top brands, purchase intent among all consumers changed by a notable amount between the two surveys for only one brand; Toyota registered a decline of nearly 4 percentage points.”

Toyota is reportedly considering offering generous incentives aimed at retaining its current customers and attracting defectors away from competing brands. The company may begin offering these incentives as early as next month.

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