What Cash for Clunkers Told Us About Toyota
The Cash for Clunkers program was an unmitigated success when it came to giving the auto industry a shot of adrenaline. That being said, there is no doubt most people were buying only because the discounts were so massive. In this new frugal age, the sales results also tell us something very interesting about Toyota.
Toyota has long been known for reliability. When you bought a 'yota', you new it would run for a few hundred thousand miles without any big problems. The truth of the matter, however, was the company has turned out some very poor quality work this decade. The situation became so dire at one point that the CEO of the company actually flew in and made a public apology at an auto show in the United States. The apology came with a pledge to get reliability levels back to the point most people expected.
The Great Recession reset spending habits in the United States. Frugality is in and people pay close attention to value. This showed up in an interesting way when the Cash for Clunkers program kicked off. The two brands with the biggest sales were Ford and'Toyota. As the last standing American car company that didn't take a bailout, Ford rightly received a bump from a public sick of companies asking for government handouts. The results for Toyota, however, suggest something different.
The high sales for Toyota in the Cash for Clunkers period suggests that people still associate quality and reliability with Toyota despite its problems in these areas. When people made the decision to make a purchase, new consumer trends suggest they looked for the most value per car. In making that determination, Toyota was clearly a big winner.
A reputation is a hard thing to shake. In this case, that's good news for Toyota. The company may have hit some rough spots this decade, but the public still clearly associates the brand with reliability and quality. That is definitely good news for Toyota.
