In the last few months, Toyota offered zero-percent financing and other attractive incentives in efforts to counteract the impact of the recent recalls. But eventually, potential buyers are expected to tire of these incentives and Toyota will have to try to bring back customers who don't trust the brand anymore.
Last week, Toyota extended its incentives until June 1. Analysts predict that Toyota will continue to offer deals through the summer but it's inevitable that it will have to cut the incentives and deal with the true extent of the damage from the recalls of over 8 million vehicles due to defective gas pedals and brake problems in the Prius.
James Bell, an analyst with Kelley Blue Book, said that the "deck has been reshuffled." He explained that permanent damage has been done, making Toyota compete "in a way they haven't in 25 years."
Toyota's sales plunged soon after it halted the sale of eight models in late January, but it again drew in the buyers with its incentives in March.
Toyota had been quite successful at attracting local buyers and those who are up for a bargain despite getting a $16.4 million federal fine and the filing of more than 300 state and federal lawsuits against it.