Toyota and Honda, Japan’s top two brands, have seen a drop in sales during the first 10 days of May as U.S. dealers are starting to feel the full effects of the March 11 earthquake that hit Japan, according to industry sources. A lack of incentives and limited inventory are among the identified factors that contributed to the drop in sales for the 10-day period.
Specifically, Toyota Division saw its sales plunging about 50 percent from the same period in 2010, while Honda Division saw a 33 percent drop.
The percentages are adjusted to show a rate on a daily basis because there was one fewer selling day in the period this year. However, automobile dealers last week felt a tinge of excitement when executives at Toyota in Japan disclosed a faster-than-expected production ramp-up. Its U.S.-based sales bosses responded by revving up incentives.
Larry Kull, chairman of Toyota's dealer council and who has Toyota stores in Florida and New Jersey, said that they have gone from their “darkest hour to great expectations.”
Meanwhile, Nissan has announced a big Memorial Day tent sale as well as aggressive leases on its Maxima and Altima models. While Honda and Toyota were in the dark during the first 10 days of May, Hyundai continues to expand its market share with sales increasing 56 percent, industry sources revealed.
The companies have not released official statements about the poor 10-day sales. Vehicle manufacturers in Japan and their U.S. dealers have been cautious due to the fear that the big plunge in production could cut inventory to risky low levels. Automakers cut back on incentives while dealers trimmed advertising expenses.