Toyota's reputation has taken a beating, cutting into its sales The company can't blame all of its problems on recalls.A year ago, Toyota Motor (TM) had just begun its massive recall of millions of vehicles to fix problems related to sudden unintended acceleration. At the time, many thought the Japanese automaker's stellar image for quality and safety would allow it to shrug off any fallout from the recalls, but it hasn't worked out quite that way.

Today, Toyota is defending itself on several fronts, not the least of which are lawsuits -- from both customers and investors -- alleging that the company hid what it knew about the problems. Beyond its legal woes, the manufacturer has also seen its once-unassailable image for building well-designed, durable cars called into question and its U.S. sales fall.

Last year, Toyota was the only major automaker in the U.S. to report a drop in sales. While it saw a seemingly small decline of only 0.3%, the drop followed several years of extraordinary growth that saw Toyota surpass Ford Motor (F) as the No. 2 supplier of vehicles to the American market -- and eclipse General Motors (GM) as the world's largest auto manufacturer.

In fact, Toyota's momentum stalled so completely last year that -- while it maintained a slim lead as the top auto seller worldwide -- it lost the No. 2 spot in U.S. sales to Ford and could remain No. 3 again this year, if online searches and comparisons are an indication of consumer interest in Toyota vehicles.

Fewer Shoppers Consider Toyota

According to analysis from online car-buying site Edmunds.com, fewer car shoppers considered Toyota models in December compared to same month a year ago. The firm reports that 17.9% of its website visitors researched Toyota vehicles last month, a 2.3 percentage-point drop from December 2009. For the full year, Edmunds says, shoppers' interest in Toyota vehicles was down about 3.8 percentage points compared to 2009.

The lingering effect of its numerous recalls isn't the only thing keeping consumers at bay, says Jessica Caldwell, a senior analyst for Edmunds. "Toyota needs to overcome not just the [public relations] damage sustained by last year's recalls, but also the reality that its models are stale," she says in a blog post.

As competitors have been introducing new or upgraded models, Toyota's lineup has remained largely unchanged during the last few years, she says. That has led some consumers to exclude Toyota from consideration all together, instead focusing on competing models from Honda Motor (HMC) and Nissan Motors (NSANY), according to Edmunds.

Fresh Designs Needed

In today's competitive marketplace, it has become more important than ever to keep product lines updated, Caldwell says. "Most new car shoppers cross-shop online without much product loyalty, and many dismiss the cars that are lacking desirable new technology features."

That hasn't gone unnoticed by Toyota, which plans to introduce 11 new or revised vehicles this year. They include some bread-and-butter Toyota models, such as the popular Camry sedan and RAV4 compact SUV, as well as niche models from Toyota's Scion and Lexus divisions.

Ultimately, it's fresh models and new technology that bring new-car buyers into dealer showrooms. Incentives, such as rebates and low-rate financing work, too, Caldwell says. "But new products are a far better investment for car companies long-term."

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jim

The Toyota Tundra I had beat the Dodge 1500 I previously owned hands down. Beat the Outback as well, for quality and satisfaction. If I wasn't presently driving a BMW, the ONLY other car I'd consider would be a Toyota. Anyone with any life experience realizes that the Toyota "news" articles of a year ago were nothing more than a media driven event, and nothing more. This remains, and never was, objective reporting. Turned out that most accelerator "problems" were either driver error, scams or no different than any other manufacturer. GM ? Not in this lifetime.

January 26 2011 at 2:55 AM Report abuse rate up rate down Reply
ldamien

As for ME, I like My 4 Runner and hope they keep the Model around I need a new one comming up soon.. Or just want a newer one as my 6 year old is getting little scratchy on the Paint....90000 miles and only changed the Oil...Last Pickup I had 225000 miles just changed Oil, and Tires Once, 22 years later body rusted out and engine and tranny was still solid

January 26 2011 at 1:32 AM Report abuse rate up rate down Reply
markcyress1

Poor article. More Toyota bashing. Let's review the facts...

Toyota #1 in retail sales for 2010 (that's cars sold to average Joe's like you and me). Beat Ford by over 300,000 vehicles. Toyota had 140,000 vehicles sold to government or Fleet sales (low profit). Ford and GM had over 600,000 vehicles sold to government or fleet sales. Honda sold less than 100k to fleet. Toyota accomplished this while not even selling cars in February due to the witch hunt. You know how Toyota did it? Huge incentives? Oh wait....less $$ incentives per car than any of the Detroit 3.

Toyota Camry #1 selling car in 2010. Lexus #1 Luxury brand in the US in 2010.

The Detroit 3 churned out so much junk over the years that even in the midst of the fabricated crisis Toyota still came out on top both nationally and globally. GM sold more cars in China than it did in the U.S. It will be interesting to see what happens when the Chinese government targets them with blown out of proportion allegations.

Don't forget that Camry was deemed "most american built car".

Yeah...Toyota's woes continue. Maybe the media should try to print the real story for a change.

January 26 2011 at 12:25 AM Report abuse +2 rate up rate down Reply
marine1942

Yeh, they are in trouble. Just read on AOL where they sold more cars then GM.
Oh yeh, they are in trouble. They are Number One.

January 25 2011 at 10:05 PM Report abuse +3 rate up rate down Reply