Money
Wheels come off for Toyota sellers
By Wang Chao (China Daily)
Updated: 2010-03-03 10:29
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Toyota sellers in Beijing are suffering a slump in business.
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 A worker from a 4 S store in Chaoyang district repairs a RAV4 car. The recall of Toyota cars has dismayed many prospective customers. Inset: A small gasket provided by Toyota which is said to increase safety. Cheng Gong / for China Daily |
On Feb 28, Tianjin FAW-Toyota Motor Sales Co Ltd, a joint venture company that sells the Toyota RAV4 sports utility vehicle (SUVs) in China, announced a recall in Beijing of RAV4s produced between March 19 last year and Jan 25 this year, over gas pedal problems. This was the third Toyota recall in China in recent months.
A sales manager surnamed Zhang from a Toyota store on Anding Road, in Chaoyang, told METRO that previously the store sold more than 10 cars a month, but this month there have been hardly any customers.
Since the end of last year 40 to 50 Toyotas have been recalled through his store.
Currently, Toyota has 33 stores in Beijing and many independent dealers in the city sell Toyotas as well.
According to the Beijing News, the parts that need to be replaced on RAV4s have reached Toyota stores in Beijing, and customers can have the gas pedal problems resolved.
The sales drop has hit car dealers in the Yayuncun automobile exchange market, the biggest car market in Beijing.
"Last year, the sales of Toyota SUVs and German SUVs enjoyed similar market share; but now German cars sales are 20 to 30 percent higher," said Yan Jinhui, vice-general manager of marketing.
Chinese car buyers said they were concerned about the quality of the brand.
A woman surnamed Shen is planning to buy a car, but she said she is not considering Toyota.
"Toyota cars seem quite delicate compared with cars made in the US and Germany," Shen said. "I'm concerned about the safety issues of Toyota, especially after the recalls all over the world."
At the Yayuncun market, a couple passed a Toyota store and asked a salesman; "Why are you still selling vehicles? Aren't they all recalled?"
Zhang Yang, the salesman, said comments such as these have him worried.
"Most consumers don't know much about the details of the recalls, they only know Toyota cars have problems," said Zhang.
Toyota issued a recall on Dec 24, of 43,000 Lexus ES350s, Lexus RX350s, Highlanders and Previas; and another on Jan 28, on 75,000 RAV4s made in Tianjin.
Both the recalls were limited to vehicles produced during a certain time period. Only Highlanders made between May 31, 2007 and April 18, 2008, for example, were recalled.
"But customers will not think about that much," said Zhang. "The Toyota brand is damaged."
In the last two months, only two people showed any interest in buying a Toyota car at the store, Zhang said.
"They were both in their 40s, and really knowledgeable about cars. But even for them, buying a Toyota car is not easy because they have to convince their terrified family members."
Although both Toyota stores and independent dealers are having a difficult time selling vehicles, Niu Yu, director of Toyota's public relations department in China, said the company doesn't intend to reduce vehicle prices and doesn't have a plan to make up the losses of its stores in Beijing.
Toyota's problems mean it is missing opportunities to stake out a share in a rapidly growing market.
In January, 63,000 cars were sold in Beijing, a 20 percent increase compared with January 2009, according to Guo, a worker from Beijing Automobiles Manufacturers Association who refused to give his full name.
Guo said the growth of the car market in Beijing was a result of favorable tax policies for low-emission cars, as well as the license plate-number-based traffic control plan, which encourages some families to buy another car.
However, some experts are still optimistic about Toyota's future.
"It is an old brand which enjoyed a good reputation for decades. Although there is a trust crisis, I believe they will get through it," said Jia Xinguang, an auto expert.
The recall will not fundamentally shift the car market in China, added Jia.
"Since Toyota only has a market share of 2 percent in China, the recall really won't make a huge difference," he added.
