Toyota Incentives To Follow Recalls On Toyota Warranty and Cash Back

By: Andy Hodges
02/16/2010 07:09 AM ET

Toyota Motor Corp. might be offering huge incentives that include better warranty and cash back rebate on vehicles as it tries to recover from its latest string of recalls. The automaker wants to repair its relationship with customers. Toyota might extend warranties on several cars.

“We’ll be very confident that we will give our dealers a very good competitive program,” Don Esmond, Toyota’s senior vice president for automotive operations in the U.S., said in a statement.

Incentives are one way to rebuild customer confidence. The latest recalls have caused a drop in sales and people are thinking twice about buying a new Toyota vehicle. Especially since the recalls are safety-related.

However, the company has not decided exactly what it will do after it addresses the recalls. More than 8 million vehicles worldwide have sticky gas pedals and floor mats that snag the accelerator. There is also a glitch in the brakes of its 2010 Prius gas-electric hybrid.

Toyota might be extending its zero percent financing for 60 months. The car marker is also looking at ways to provide cash to dealers to help sweeten deals. Additional cash back programs on new automobiles are one thing the company might do after the recalls.

Toyota has already fixed more than 500,000 cars and trucks due to the sticky gas pedal recall. The company is repairing about 50,000 cars each day. There were only 13 reports of sticky gas pedals, but the automaker has already said that 13 is too many.

U.S. Factories Shut Down and Suspended

Toyota will temporarily halt production at two factories located in the United States. The decision is part of Toyota’s effort to cut extra inventory of its vehicles after a large drop in sales. The automaker wants to focus only on fixing the accelerator and brake systems that have tarnished the company’s reputation.

The factories include its Kentucky plant that produces the Camry and Avalon sedans. It will close the plant for 4 days. It will also suspend production of Tundra pickup trucks at its Texas plant for a total of 10 days in March and April. Toyota’s president Akio Toyoda is due to provide an update on the progress of the massive recalls at a news conference on Wednesday.

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