Toyota dealers complain about lower gross profits

Article by Christian A., on October 27, 2010

Because of the recall crisis, Toyota went through a long and difficult process for its conquest rates to return to pre-recall levels but to continue to sell cars, its dealers are having to accept lower gross profits.

TrueCar and Edmunds.com said that Toyota's transaction prices on new 2011 models are the lowest, as a percentage of sticker prices, of all mainstream brands.

A portion of the discounting is covered by higher factory incentives, but Toyota still spends considerably less on spiffs than other brands. This means that dealers would have to spend more to sell the cars.

Jack Wilson, president of Toyota of Vallejo, north of San Francisco, said that the pressure is “definitely on the bottom line, the gross line.” He pointed out that it’s a result of the recall situation but that the issue has to be discussed nevertheless.

Double-digit percentage sales gains through September were posted by Ford, Chevrolet, Nissan, Hyundai and Dodge. Meanwhile, Toyota brand sales increased by 1%.

According to Jesse Toprak, TrueCar vice president of industry trends and insights, Toyota's transaction prices traditionally start the model year much stronger.

He explained that each Toyota brand model sees weak dealer gross margins. Lexus discounting has also increased but not at the same levels as the Toyota brand. [via autonews - sub. required]

If you liked the article, share on:

Comments

Recommended

Earlier this month, we learned that France has made moves to ban diesel and gasoline fueled cars by stopping them from entering the city. More than that, they plan to...
by - July 19, 2017
The new 2018 Rolls-Royce Phantom VIII is on the way, but still, all we had been seeing are camouflaged prototypes of the eight generation of this iconic nameplate. Fortunately though,...
by - July 19, 2017
Would you have ever imagined a Mercedes-Benz developing an upscale pickup? We first saw this last October as a concept car and now, the production model of the Mercedes-Benz X-Class...
by - July 19, 2017
Haven’t you ever wondered how Ferrari’s names and numbers were actually derived? As it is Ferrari’s 70th year in the industry, we believe that it’s only fair that we shed...
by - July 18, 2017
Earlier this month, we were getting hints that Hyundai, along with its sister company Genesis, isn’t doing so well in the United States as well as in Europe. So this...
by - July 18, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries