Toyota dealers could lose $2.47B
By Mike Ramsey and Doron Levin
Bloomberg News Service
Dealers who sell Toyota Motor Corp.'s namesake brand could 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 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 www.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, its lowest since March 2006.
At the same time, dealers are preparing to replace pedals in 2.3 million recalled vehicles that have a part that may be defective. 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.
The estimated loss of revenue per dealership assumes the vehicles affected account for 56 percent of the new-car volume and 30 percent of the used-car sales at an average dealer with a transaction price of around $30,000, McEleney said. The loss of revenue from new cars would be $1.25 million to $1.5 million with the rest coming from lost used-car sales.
"We're still selling cars," said Billy Rinker, general manager of Toyota of Santa Monica in California. Many customers are asking about the recall and focusing on the information in the media, he said.
"We've been explaining to customers that it's something happening in a small percent of high-mileage vehicles," Rinker said.