DETROIT – Despite six months of recalls, congressional inquiries and serving as the butt of late-night jokes, Toyota is recovering so well that it is situated to overtake General Motors as the No. 1 automaker in the U.S. in April.

While GM remains the leader for the first three months of the year, Toyota’s offer of no-interest loans and discounted leases is overshadowing consumers’ worries about quality issues — and it’s forcing other automakers to discount heavily, too.

“Toyota is making life difficult for everyone, and if you don’t respond, you’re going to get run over,” said John Wolkonowicz, an analyst with IHS Global Insight.

In March, when Toyota launched its aggressive incentives and saw its sales surge 41 percent, the Japanese automaker came within 1,148 vehicles of outselling GM.

But nearly three of every four of those sales was financed with the expensive no-interest loans that erode profits, according to the consumer automotive Web site Edmunds.com. As other automakers tried to keep pace, a record 22 percent of all U.S. vehicle sales last month were transacted with no-interest financing.

The deals have continued into April, and Toyota, armed with about $23 billion in cash, could offer them indefinitely.

Advertisement

While expensive, the big deals could be a winning strategy for Toyota. Studies show that Toyota’s image is already beginning to bounce back.

Toyota’s good news: The automaker’s score on the BrandIndex daily consumer perception survey rose 12.7 points from early March to the end of the month.

The bad news: Toyota’s latest BrandIndex score is still -42, which means it is getting less love than either Goldman Sachs (-19.8) or Bank of America (-11.6) — two primary architects of the nation’s financial implosion.

“They have hit a bottom and they are starting to recover,” said Ted Marzilli, global managing director of the daily tracking poll.

“I still think they are six to 12 months away from regaining the trust they had before the recalls.”

Toyota also appears to be managing its crisis better than it did initially. Dealers have completed gas pedal repairs on 1.3 million of 2.3 million vehicles, said Toyota spokesman Brian Lyons. Toyota also defused two incidents last month in which drivers reported losing control of their Priuses.

 


Only subscribers are eligible to post comments. Please subscribe or login first for digital access. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.