Dealer group punishes ABC affiliates via ad removal

The Toyota Motor Corporation is in a world of hurt, feeling the effects of a massive recall, the halt in sale of eight models, and uncustomary criticism from some of its most loyal fans. Still trying to get ahead of the news curve, the company recently killed off its “Portfolio” ad campaign where Toyota stressed in TV ads its safety, reliability, and quality.

Social Disaster

Toyota gets a big “F” in the area of social media and networking as Twitter and other sites have been flooded with updates from critics and concerned owners while the company comes across defensive, off message, or simply out of touch. Unlike rivals GM and Ford who are accustomed to taking the heat, Toyota’s online representatives have built their collective presence on the back of good news.

But Toyota hasn’t lost touch with what is going in major media outlets including ABC News who has been running successive and some would argue excessive stories about runaway Toyotas and other issues. According to ABC News, that fact has upset a group of 173 Toyota dealers in the southeast who have decided to punish ABC News for their focus on Toyota.

Regain Trust

Instead of showing its new campaign designed to “regain the trust” of customers on ABC affiliates, the dealer group shifted those ads to competing stations in the same market. 22Squared, the Atlanta advertising firm responsible for managing the dealer account, was told to make the change despite their opinion that the move was not a wise one.

ABC News has come under fire for their coverage of problems with Toyotas dating back to at least last August when the runaway Lexus ES350 story made headlines. In that incident, a California Highway Patrol officer and his family were in a loaner Lexus when it suddenly surged out of control. Unable to stop the car, calls were made to 9-1-1 shortly before the Lexus hit the back of another car, crashed, and tumbled down an embankment. All four people in the Lexus died as a result of a fiery crash.

Pressing In

Follow up reports by ABC News were led by Brian Ross whose team interviewed Toyota and Lexus owners, spoke with government officials, contacted consumer advocates, and pressed hard on Toyota to respond. Even when the issue appeared as if the federal government would allow it to fade away, ABC News, the Los Angeles Times, and a handful of other media outlets pressed on. Likely, their collective efforts resulted in the massive recall and subsequent shut down of sales for eight affected models.

The move by the Toyota dealer group has been designed to hurt ABC at least in the short run, but it does underscore the anxiety the company is feeling in light of the massive media attention and customer fall out. Don’t count on ABC News or anyone else for that matter backing away from one of the top news stories of our day. Instead, the focus is on Toyota who finds itself under one spotlight it desperately wants to have turned off.

Yesterday marked the fourth anniversary for The Auto Writer, a site I founded to coincide with most things automotive. Okay, I humbly leave the highly technical repair stuff to the pros, knowing that they have the interest and skills to articulate the finer points of automotive maintenance and repair. Instead, I focus on what I am most familiar with: news pertaining to the auto industry, particularly from a US perspective.

All but a few of my top visited articles from the first two years of this blog can no longer be found here. That is because I encountered some problems from having updated WordPress over the years. Earlier versions of this content management system haven’t always updated posts cleanly, leaving strange symbols and characters in the place of some of the lettering.

Modified 404

Being the nick picky guy that I am, I manually went back in to clean up a number of posts but with 700 to review, that project was a real time killer. Thus, I decided to leave behind a few of my popular articles from the first two years while continuing with everything from 2008 on. If you happen to click on a link, you’ll be taken to a modified 404 error page which includes links for you to help find your way around this site.

Going forward, I plan to continue writing about the topics you like to read, but I also will dig a little deeper with some in order to draw out certain ancillary, but relevant information. For example, everyone is writing about Toyota, but wouldn’t you really like to know what goes on behind closed boardroom doors?

Many Thanks!

Last but certainly not least, I want to thank each of you who stops by here. Without your readership and participation, there would be no reason for me to press on. Please subscribe to this site’s feed and also take note of the little box at the end of each article that allows you to subscribe to individual posts. By checking the ones of interest you can follow the conversation for as long as you want.

Photo Credit: Michael Lorenzo

Good news seems to have been avoiding the Chrysler Group for some time now. GM is flourishing post bankruptcy while Chrysler continues to struggle, casting doubt that the smallest of America’s Big Three automakers can survive for the long term, despite a government bail out and subsequent partnering with the Fiat Group.

New Products

While GM’s problems have been mostly administrative, the company has continued with its aggressive restructuring, ditching unneeded brands while pressing forward with new products.

Chrysler, who has been through several owners over the past three years just does not have the resources available to update new products though the 2011 Jeep Gran Cherokee will prove to be one notable exception.

Perhaps the healthiest part of Chrysler’s portfolio is its Ram line of pickup trucks. Those trucks continue to finish a strong third in a very competitive as well as lucrative segment. Indeed, Chrysler recognizes this having recently spun off the Ram brand to market it separately from Dodge.

Diesel Agreement

The Jeep Gran Cherokee will make its global debut next week at the Chicago Auto Show and go on sale in May. But that news follows something announced earlier this week: the diesel engine supplier for select Ram pick up trucks, Cummins Inc., has extended its multi-year agreement with the Chrysler Group to continue to supply its 6.7L liter turbo diesel engine for Ram heavy duty models.

Cummins first began to supply diesel engines for Dodge back in 1989 and has delivered 1.7 million since. They claim that 80 percent of heavy duty Ram truck buyers choose the engine, enjoying excellent torque and decent fuel economy as a result.

Clean Burning

Today’s 6.7L turbo diesel replaces the earlier 5.9L diesel, delivering 350 hp and a whopping 650 lb-ft of torque. Compared to the earlier engine, this one enjoys a 118 percent increase in horsepower and 86 percent increase in torque while achieving a reduction in exhaust emissions by 90 percent. Cummins met the fed’s 2010 emission level requirements in 2007 and continues to produce the cleanest diesel engine in its class.

The Cummins decision had been expected for some time, but it is a welcome announcement nonetheless. In a press release announcing that decision Dave Crompton, VP and General Manager, Midrange Engine Business for Cummins said, “Cummins is proud to supply engines for the award-winning Ram Heavy Duty and to continue working with Chrysler to develop best-in-class products that customers can trust and depend on now and in the future.”

A much needed display of support from one the Chrysler Group’s top suppliers.

Source: Cummins Inc.

The next major leg in the auto show circuit will step out next week when the Chicago Auto Show launches. The Chicago exhibit along with events held in Los Angeles (December), Detroit (January), and New York (April) are where many car manufacturers choose to roll out their concept cars and new models.

The 2010 Chicago Auto Show will feature a number of debuts including the following:

2011 Ford Edge – This popular midsize crossover will benefit from significant mid-cycle changes including a new nose, hood, and windshield. But the five-passenger crossover will also be the first Ford product to get an I4 EcoBoost engine, with a 2.0L EcoBoost replacing the previous standard 3.0L V6.

2011 Honda Odyssey – Honda’s popular minivan is at the end of its current life-cycle which means that the 2011 model will be all new. The minivan segment has been shrinking in recent years as crossovers take over. However, the Odyssey is managing to hold its own, one of top vehicles in its segment.

Electric Ford Transit Connect – A pure electric version of the Ford Transit Connect will be on display, a vehicle being custom fitted for this technology by Smith Electric Vehicles in the United Kingdom. Ford will be making the EV available to commercial customers this summer.

2011 Jeep Gran Cherokee – Chrysler, which has had a dearth of new products to offer over the past year is finally set to break that streak when the next generation Gran Cherokee is introduced. Powered by the company’s all new Phoenix 3.6L V6 which will become the dominant large engine sold by Chrysler in coming years, the Jeep will go into production in May.

Kia Ray Concept – Not much is known about Kia’s plug-in hybrid concept, but it may be underpinned by the same gas and electric engines powering the Hyundai Blue-Will concept. Hyundai and Kia are joined at the hip which means Hyundai green technology may be used to power this concept Kia.

2011 Chevy Silverado Heavy Duty – A 6.6L DURAMAX diesel engine and new platform are among the changes being offered as heavy duty versions of Chevrolet’s full size pick up truck are introduced. Expect that the Silverado’s twin, the GMC Sierra heavy duty to also be on display.

2011 Ford Explorer – Going from a truck based chassis to a car based chassis is a big deal for the Ford Explorer, one of the most popular SUVs of the 1990s. Explorer sales have dipped in recent years, but Ford is keeping the model alive by placing it on the same platform girding the Ford Taurus.

2011 BMW X5 – The third generation of BMW’s popular X5 crossover or sport activity vehicle is expected to debut in Chicago. Don’t expect many styling changes and the engines will be carried over. However, the X5 will welcome a hybrid model to the mix.

These vehicles represent the confirmed models for Chicago although at least one Asian and one European manufacturer is likely to slip in something new, a surprise introduction for one of the most popular car shows in North America.

The Chicago Auto Show will host its media preview days on February 10 and 11 and be open to the public from February 12-21.

It wasn't a huge increase, but January 2010 continued a month over month sales car sales trend.

Ford replaces Toyota as #2 auto retailer

January 2009 was one of the worst selling months for the (US) auto industry with just 657,000 units sold. That month’s sales were the lowest recorded during the recession which began in December 2007 and gradually began to ease late last year.

Sales Gain Expected

Because January 2009 was so rotten, sales were expected to improve for the month and they did: by 6.3 percent. But there were two notable exceptions and for varying reasons: Toyota and Chrysler.

Toyota, which pulled eight of its models from the market toward the end of the month saw its sales drop by 16%. Chrysler, which remains on life support, fell by 11%. Toyota is likely to recover from its engineering and PR debacle at some point while Chrysler can only hope that they’ll get new product from its Fiat partner real soon.

GM, Ford Set Pace

GM and Ford set the pace for the month, finishing up 14 and 25 percent respectively. Ford replaced Toyota in the number two spot on the strength of a strong increase in fleet sales.

Other big gainers included Hyundai (+24.4), Volkswagen (+39.6), Daimler (+22.9), Nissan (+16.1), and Subaru (+28). Kia eeked out a 0.1 percent gain on the back of a strong showing last January. Indeed, any gains by Hyundai, Subaru, and Kia going forward this year will be up against a positive 2009: these three manufacturers were the only ones to sell more cars last year than they did in 2008.

R.I.P. Suzuki?

Along with Toyota and Chrysler falling off for the month, Mitsubishi fell by 12 percent while Suzuki sales crumbled, dropping by 44 percent.

Suzuki, despite the introduction of an attractive but difficult to pronounce Kizashi midsize sedan, is barely registering a blip in the US these days.

In 2007, this Japanese automaker sold nearly 102,000 units before slipping to just under 85,000 cars sold in 2008. In 2009, sales tumbled with just 38,695 cars sold. With only 2040 vehicles sold last month, Suzuki may be hard pressed to crack the 25,000 unit level this year, certainly not the mark of a viable retailer.

Overall, 698,346 passenger vehicles were sold, a weak month but one that followed an incentive -aden December 2009 when everyone sought to move old inventory off of dealer lots. The forecast for 2010 is brighter than 2009, but for Toyota, Chrysler, Mitsubishi, and Suzuki, the year certainly began on an inauspicious note.

Source: Autodata Corp.

See Also: Sales Turning Point Evident In December

2011 Hyundai Sonata

Hyundai Motor America announced yesterday the pricing for its next generation Sonata, a midsize sedan incorporating numerous styling, engineering, and technological changes for the 2011 model year. The price for the base GLS has been set at $19,195, with the top of the line Limited priced from $25,295.

Hyundai introduced the Sonata in December at the 2009 Los Angeles Auto Show, immediately seeking to change the public’s perception of sedans in this segment. Besides offering improved exterior styling, the interior of the Sonata is larger, rivaling the cabin space found in some larger cars, while under the hood Hyundai has completely done away with the optional V6 engine, choosing to offer just a 2.4L I4 paired with a six-speed automatic transmission on most models. The standard GLS is paired with a six-speed manual transmission.

Class Leading Fuel Economy

Hyundai says that its engine will produce 200 horsepower while yielding 24 mpg city/35 mpg highway or 22/35 with the automatic. That 35 mpg number will allow the Hyundai Sonata to claim the highest fuel economy in this ultra-competitive segment, moving it ahead of the Ford Fusion (34 mpg) and the Chevrolet Malibu and Toyota Camry (33 mpg).

In announcing the Sonata’s pricing John Krafcik, Hyundai Motor America president and CEO remarked. “With the 2011 Sonata, our focus was a no-compromise engineering approach that would allow Sonata owners to have their cake, and eat it too. That focus led to a set of attributes that have not been seen in the midsize car category – attributes such as 35 mpg and 200 horsepower, bold design and an EPA Large Car interior, world-class quality and a class-leading value position.”

Well Appointed Midsize Sedan

The 2011 Sonata represents the sixth generation of Hyundai’s midsize sedan, a model that has been sold in North America since the 1980s. Built in Alabama, the Hyundai Sonata offers numerous standard features including an anti-brake system with traction control; electronic brakeforce distribution; front seat and side impact curtain airbags; Bluetooth connectivity; HD radio technology; and heated front and rear seats.

Offered in eight trim levels, higher end versions of the 2011 Hyundai Sonata include leather and wood touches; navigation package with rear back up camera; dual zone temperature control; power sliding and tilting sunroof; and a premium sound system.

Additional Package Offerings Planned

The 2011 Hyundai Sonata will begin to arrive in Hyundai dealerships this week for immediate sale. Hyundai is not done with the Sonata, promising to follow up with a turbo-charged I4 engine and the company’s first hybrid model in the near future.

Source: Hyundai Motor America

A portion of a Toyota ad which ran this past Sunday. Toyota attempts to do some damage control but will customers be convinced?

Battered, bruised, and chastened, the Toyota Motor Corporation finds itself in an uncomfortable position. Once considered to be an impenetrable fortress, team Toyota looks vulnerable, weak, and confused as they absorb one blow after another following a pair of safety recalls.

Digging Deeper

The onslaught against the world’s top automaker comes even as the reasons for these attacks are not being accurately reported. Dig a little deeper and you will discover that there is a darker side to the accelerator problem that needs to be brought to the light and exposed:

• Toyota may have known about this problem as far back as 2004. The runaway Lexus ES350 which killed four people in California last summer heightened an issue that had been simmering below the surface for several years. Unintended acceleration has dogged other manufacturers including Audi, but the National Highway Transportation Safety Administration (NHTSA) had been investigating Toyota made models beginning with those made in the 2002 model year.

• This was not a voluntary recall. Toyota faithful, many getting as defensive as team Toyota itself, point out that Toyota did the right thing by pulling the eight affected models from the market, claiming that this was something that neither GM or Ford would ever do. Rubbish. Toyota was REQUIRED by the NHTSA to pull these models. In fact, Toyota continued selling the effected models five days after the NHTSA ordered that these sales be halted.

Lashing Out

Toyota has been lashing out against critics ever since the first of the recalls was announced last September. The automaker has been responding to investigations launched by the Los Angeles Times, ABC News, and other reports which may have forced the government to finally push Toyota for a resolution.

But Toyota has been largely ineffectual in other areas including in social media and networking where information is being circulated by people who want answers. Instead of tackling these issues straight on, Toyota has allowed everyone else to shape perception—the damage has already been done.

Striking Back

Yesterday, Toyota began to fight back by taking out full page ads in major newspapers across the country. Bold letters proclaiming: A temporary pause. To put you first. Sounds caring, right?

But that ad is misleading because it makes no mention of the NHTSA stop sale order. Instead, it paints Toyota as doing the right thing. Baloney.

The Fix

Today, Toyota is sending information out detailing how it will fix accelerator pedals involving more than 2 million vehicles. That will likely be only the first step in what Toyota will need to take to remedy its problems with class action lawsuits and additional government investigations to follow.

All told, The Wall Street Journal expects that Toyota will take a $1 billion hit from the recalls and fixes which involve cars built in the United States, Canada, Europe and elsewhere and extend to several partner models including the now defunct Pontiac Vibe and a pair of Citroen models.

Runaway Toyota Marketing Disaster

Toyota PR needs to quit clowning around.

Has someone in Tokyo gone mad?

The company’s handling of its unprecedented recall is a PR nightmare, sending spoken and unspoken messages to current and prospective Toyota owners that their cars are not safe.

Dealerships are being flooded with phone calls from customers who want answers, but no one has prepared them to give customers guidance.

According to ABC News, customers are contacting Toyota dealers who seem ill prepared to handle their concerns with most telling them to wait it out or to call a toll free number for support. But as many people discovered the automated message had yet to be updated to include those models added to the recall overnight. And, when customers did get through to a live person, they were told to expect information to arrive “soon” in the mail.

Huh?! Is that how you go about assuring your customers?

Worst. PR. Blunder. Ever.

Imagine this scenario being played out over the coming days: a customer visits a Toyota dealership and sees a 2010 Toyota Camry SE on the lot. But there is a problem: certain Camrys are part of the recall and this one, painted in aloe green metallic, is part of that recall. The salesman tries to persuade the customer to look at other Camrys, but none offer the right color and trim level that he wants.

Meanwhile that same customer is hearing Toyota explain how to stop a car that might surge out of control. And you want people to buy something that might kill them?!

Step on the brake. Shift the transmission into neutral. Pray to God that this works or kiss your arse good-bye.

Instead of waiting to see what Toyota will do and now scared that he might end up with a runaway Toyota, the customer leaves the dealership in his 2004 Toyota Camry and stops by the local Chevy lot. While there he sees first hand just how much improved the Malibu is and likes the car. The salesman offers him an extra $1000 from GM to switch to Chevrolet and the sale is made.

That kind of scenario is likely to be played out in the days and weeks ahead because Toyota has effectively told car shoppers that their cars are not safe. After all people are thinking, “for what other reason won’t you sell me that Camry?”

Toyota’s competitors are circling the carcass looking for fresh pickings as you read this.

The Chevy Malibu is not the only car Camry drivers will look at. The Ford Fusion, Honda Accord, the all new 2011 Hyundai Sonata, even the Suzuki Kizashi are now in play. This calamity makes for a never before seen opportunity for Toyota rivals who not only can snag a customer, but do so for generations.

Industrialist John D. Rockefeller, who was well acquainted with success said, “I always tried to turn every disaster into an opportunity.”

In this case Toyota’s disaster is everyone else’s opportunity. Are you shopping for a Toyota Tundra? Take a look at a Ram 1500. Want a Corolla? Let’s see what Hyundai or Kia has to offer.

Even Lexus and Scion owners have to be wondering, especially Lexus: that was an ES350 that zoomed out of control last summer killing four people.

My college marketing professor is probably dead, but I can imagine he would be shocked at the way Toyota has mishandled their crisis. If your product is good, you stand with it. If your product has a problem, then you provide a solution immediately.

Telling customers to wait sends out the wrong message, one that will certainly damage the Toyota brand. Maybe that is what Mr. Toyoda wants who took over the company last year and discovered that there is a price to pay for growing too fast, sacrificing quality, reputation, and customer’s lives in the process.

I cannot believe what I see unfolding before me. But neither can millions of other people around the world who once trusted Toyota as their rock solid brand, but wonder if a runaway Toyota might do them in.

See Also: Toyota Halts Sales and Expands Recall

Ritual disembowelment is an ancient Japanese rite once practiced by samurai warriors.

You may not hear anyone make the audacious claim that the Toyota Motor Corporation is in its twilight years despite recording a multi-billion dollar loss at the end of its last fiscal year, or because the automaker is currently embroiled in an engineering and publicity nightmare involving faulty accelerator pedals. That latter problem has led to Toyota pulling eight of its top-selling models from the market until a fix can be found.

Ritual Sacrifice

But you have to wonder what is really going on behind closed boardroom doors in Tokyo as well as in the company’s Torrance, California sales headquarters. My wild imagination sometimes gets the best of me when I observe desperate scenes like the one now unfolding.

To wit, I can envision a Tokyo to Torrance teleconference call taking place with a deeply remorseful Japanese engineer sitting cross-legged nearby ready to participate in a ritual disembowelment (obligatory seppuku) in a bid to atone for his part in the fatal engineering flaw.

As horrified American executives look on from the other side of the Pacific, a stone-faced Japanese manager gives his nod and the bloody deed is quickly carried out. The screen soon fades as the second part–the customary follow up beheading by a skilled swordsmen–completes the ritual, sweeping away Toyota’s shame and the engineer’s head.

Like I said, I do have a vivid imagination.

Dagger Prepared

Even so, a certain dagger is now being prepared by Toyota’s chief rival, GM, who sees a window of opportunity in the midst of someone else’s misfortune. That dagger comes in the form of its move to poach scared Toyota and Lexus owners by offering them a $1000 cash incentive and low interest rate financing to switch to a GM brand.

“We decided to make this offer after receiving many e-mails and calls from our dealers, who have been approached by Toyota customers asking for help,” GM said in a statement. GM’s offer will run through February 28.

Customers can apply the incentive to pay off their Toyota or Lexus leases while enjoying zero percent financing on most 2009 and 2010 models. While it may seem that GM is delivering a fresh kick to Toyota, conquest incentives are routinely practiced in the ultra-competitive American marketplace particularly when it comes to the sale of new cars.

Ford Follows

Following GM’s announcement early Wednesday afternoon, the Ford Motor Company matched GM’s incentive and extended it to include all Toyota, Lexus, and Scion owners. Further, Ford included Honda and Acura owners with their strategy.

Do not think for a moment that other automakers are not lining up to take their own jabs at Toyota. According to The New York Times, one Honda dealership near Dallas changed their electrical sign to read, “Our gas pedals don’t stick!” in a bid to siphon off worried Lexus and Toyota owners.

Break out the paring knives!

Photo Credit: Wikipedia file photo

Runaway Toyota issue dogs automaker

The Toyota Motor Corporation, faced with an unprecedented recall involving eight models, has decided to halt sales of the affected vehicle lines in a bid to address a nagging and potentially deadly quality issue involving accelerator pedals.

Fiery Crash

Since last summer Toyota has been under increasingly intense scrutiny following the deaths of a California Highway Patrol (ChiP) officer and his family. That car–a loaner Lexus–had a stuck accelerator pedal which quickly pushed the car to speeds well above 100 mph before the driver lost control and crashed. (see SayEducate: ABC News Spotlights Toyota Runaway Problem).

Originally, Toyota voluntarily recalled 4.2 million models in September 2009, blaming floor mats for having the potential to push up underneath accelerator pedals, thereby causing them to get stuck. Toyota’s solution was to temporarily hold the floor mats in place with zip ties.

Runaway Toyota

That recall and Toyota’s “fix” was criticized by consumer advocates as the “Runaway Toyota” outrage soon became one of the top investigative stories for at least two media giants, the Los Angeles Times and ABC News. Toyota did not help its case as company officials appeared defensive in several follow press conferences and comments posted to its website.

Under the latest recall only Toyota division vehicles are included. No Lexus or Scion models are affected. The recalled vehicle lines are as follows:

• 2009-2010 RAV4
• 2009-2010 Corolla
• 2009-2010 Matrix
• 2005-2010 Avalon
• Certain 2007-2010 Camry
• 2010 Highlander
• 2007-2010 Tundra
• 2008-2010 Sequoia

Unaffected Models

Toyota stressed that all of its remaining models are not being recalled including the remaining Camrys as well as the Sienna, Venza, Tacoma, Solara, Yaris, FJ Cruiser, 4Runner, and Land Cruiser.

Five North American plants will be temporarily shut down during the first week of February as the automaker assesses what direction the company will take and coordinate that response among each of its manufacturing plants.

Moving Forward

Despite the obvious setbacks for Toyota, the company is determined to move forward in 2010. According to Treehugger, Toyota plans to build more than one million hybrid models annually by 2011, which would double what the company sold in 2009.

The Toyota Prius, its dedicated hybrid model, has been a hot seller and with gas prices starting to inch up toward $3 per gallon, demand is expected to rise accordingly.

The Prius was introduced in Japan in 1997. The third generation Prius was released for the 2009 model year and has since been joined by a Lexus model, the 250h.

Source: Toyota Motor Corporation