Toyota’s perceived quality is bouncing back, report says

Article by Christian Andrei, on November 12, 2010

Last spring, Toyota’s perceived quality had a setback amid news of massive recalls but, according to a study that gauges consumers’ perception of brand quality, the brand is bouncing back. Such advancement is boosting Toyota’s residual values.

ALS (formerly known as Automotive Lease Guide, which determines residual values for the auto industry) says that the company’s 70.7 score in its fall 2010 Perceived Quality Study is a 4.5 percent improvement over its 67.6 score in the spring 2010 study.

But Toyota is still below its 83.0 score in the fall of 2008. Its spring 2010 score fell 20 percent from its score in fall 2009. Eric Lyman, ALG’s director of original equipment manufacturer practice says, “It was the biggest drop we'd ever seen in back-to-back surveys.”

This semi-annual study is based on a scale from 1 to a maximum of 100. This perceived quality influences shoppers’ concern for a brand’s model line and is a determining factor in how much they are willing to pay for a car.

Lyman says that ALG expected Toyota to rebound but at a slower pace. ALG had anticipated Toyota’s score would recoup around half of its loss by the spring 2013 survey and all of its loss by the fall 2014 survey.

Lyman adds that the fall score “was ahead of our initial assumption.” He also says that the sharp drop in Toyota’s perceived quality last spring prodded ALG to lower Toyota’s 36-month residual value forecast by around 1 percentage point.

ALG, for example, slashed $175 off the expected resale price in May-June 2010 for a 2010 Toyota Corolla LE sedan, which has an original price of $18,000, including shipping, to a price tag of $9,825. [via autonews - sub. required]

Topics: toyota, sales

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