AutoGuide News Blog
The AutoGuide News Blog is your source for breaking stories from the auto industry. Delivering news immediately, the AutoGuide Blog is constantly updated with the latest information, photos and video from manufacturers, auto shows, the aftermarket and professional racing.
Toyota’s recent recall issues may cost the company an estimated $2 billion.
Along with the company’s third quarter report, Toyota estimated the costs of the global recall at 180 billion yen (US$2 billion), including 100 billion yen (US$1.1 billion) for repair costs and another 70-80 billion yen ($787-899 million) in lost sales. Toyota predicts a reduction of 100,000 vehicle sales as its recent troubles erode public confidence in the brand.
To make matters worse, these figures don’t include the costs of the just-announced Prius recall.
See more Toyota recall news at the AutoGuide.com Toyota Recall News Hub.
[Source: The Associated Press via Wheels.ca]
Toyota has offered to test Apple co-founder Steve Wozniak’s Prius after he claimed the vehicle’s electronics can cause it accelerate unintentionally.
Wozniak’s claims made headlines when he claimed his 2010 Prius’ accelerator “goes wild” under certain conditions. He says he can repeat the acceleration issue and suspected the Prius’ software as the culprit.
Toyota has long maintained is the acceleration problem is not a electronics-related issue. The Prius is not included in the company’s recent recall, however, so if Wozniak’s suspicions prove true, Toyota’s problems can only get worse.
Toyota, already under a storm for its trouble with unintended acceleration, is trying to contain the PR damage by offering to have a dealer borrow and test Wozniak’s Prius for a week. Toyota is trying to get Wozniak in touch with U.S. sales president Jim Lentz to help make arrangements.
Remember back when Honda announced pricing for its Insight hybrid would start at under $20,000 and Toyota, in a bid to compete, said it would offer the Prius for just $21,000? Several months later, and the launch of the Prius II, III, IV and V and Toyota is now saying the Prius I isn’t likely to ever see production – not for average consumers anyway.
According to a report on AllAboutPrius, Toyota spokesman Greg Thome said a test of the market with the Prius I resulted in just 177 units sold – all of which were to fleets. As a result, Toyota has no immediate or future plans to offer the entry-level Prius I to consumers.
The move isn’t surprising as it turned out that Honda’s Insight, with its smaller passenger space and less efficient engine, wasn’t much of a competitor to the Prius after all.
Thome did say that the Prius I would have been an incredibly stripped-down version, without items like cruise control, the Touch Tracer Display, Smart Key, EV mode, a rear wiper, heated mirrors, a heat vent for the rear seat, foldable rear headrests or underbody spoilers. And considering the Prius II starts at $22,400, the extra $1,400 seems like a small price to pay.
Several reports of price gouging on the new 2010 Prius have been reported at Toyota dealerships across the country.
While the $4,500 rebate offered with the (now completed) cash-for-clunkers program made the Prius an attractive buy, many dealerships were apparently engaging in a little creative market value adjustment of their own, to capitalize on the in-demand hybrid.
According to DailyTech, several dealerships have reportedly been asking for thousands more than the sticker price. One Lake Placid, Florida, resident posted on PriusChat that his local Toyota dealer was asking for $4,000 over the sticker price, while a New Jersey resident claimed they were told they’d have to pay $6,500 over MSRP.
Not being the lazy sort, the folks at DailyTech called their local Toyota dealership, Suburban Toyota in Troy, Michigan and were told they’d have to pay $4,000 to $5,000 over MSRP to get into the last Prius that dealer had on its lot. They were even pressured to make a deal quickly before the car was sold to someone else.
DailyTech has since contacted Toyota but has not had a reply.
Currently the Prius is in short supply in the U.S. for two main reason. The first is that overall production has been slowed as a result of Toyota’s battery supplier’s inability to keep up with demand. In addition, the high demand for the car in Japan has Toyota filling orders in its home market first, as the unfavorable exchange rate with the U.S. dollar makes sales in Japan significantly more profitable.
The 2010 Prius has been a popular car for Toyota since it first went on sale several months ago, but the pace of sales will slow considerably over the next few months. The reason for the lull is that the Prius’s battery supplier, Panasonic EV, can’t keep up with the demand.
The third-generation of Toyota’s revolutionary hybrid has been even more popular than the Japanese automaker expected, especially in its home market where the Prius out-sold all other cars in the county in the month of May. Toyota currently has the capacity to build 500,000 Prius models a year, but Panasonic can’t keep up with that pace. No doubt the electronics company never thought it would have to as sales of the new Prius have exceeded forecasts.
“The new Prius model has been excessively popular, inconveniencing some of our customers, and the factories are working overtime at full capacity,” said Takahiko Ijichi, Toyota senior managing director to told Automotive News. “Unfortunately, the batteries are not catching up with demand. Production of the batteries needs to be increased in order for our production to go up.”
Panasonic’s supply issues come at an unfortunate time for Toyota as the automaker continues to suffer through the recession. The Prius is one of the few good news stories at Toyota with better than expected sales helping to prop up Toyota’s diminished sales with other models.
Demand outstripping supply might be viewed as good problem to have, but in the mean time Toyota has been forced to slow down production until additional battery supply becomes available, something which will no doubt mean long waiting lists for those looking to buy a Prius. The shortage could also hurt Toyota in the long run as some customers will look to oher hybrids (like the Honda Insight) which have no such supply issues.
With hybrid popularity seemingly on the rise, Toyota is currently re-thinking its production of the car and hopes to double it’s output capacity to one million units next year.
[Source: Automotive News via LeftLaneNews]
Japanese automaker is now running plants 24 hours a day
While Toyota’s sales may be suffering as a whole, sales of the all-new 2010 Prius are well above expectations. In fact, the Japanese automaker is having trouble keeping up with demand – something which may result in lengthy waiting lists for the third-generation of Toyota’s successful hybrid.
At the two facilities where the Prius is built in Japan, the plants are running 24 hours a day. To help staff the plants, Toyota has recruited workers from some of its other facilities and has restricted holidays for the summer.
And yet that still might not be enough.
Toyota says it can build as many as 50,000 units a month and it expected that with the dismal economy it could easily handle a forecasted volume of 400,000 units for the year. But before the Prius even when on sale Toyota had taken 80,000 orders for the car and sales in Japan last month topped 110,000 units.
This mini economic boom is having a positive effect on Toyota’s many suppliers, like Panasonic EV Energy, which makes the batteries for the 2010 Prius.
The popularity of the Prius is even prompting Toyota executives to reconsider moving Prius production to the United States, at a facility to be built in Blue Springs, Miss. – a project that was put on hold due to the high overhead costs (and, therefore, economic risk) of building a hybrid assembly plant.
If the 2010 Prius continues to sell well above the expected volume it could help Toyota surpass its sales goal this year of 6.5 million units.
[Source: The New York Times]
New Toyota hybrid beats Honda's Insight, which took the top spot in April
The all-new Toyota Prius was the most popular selling car in Japan for the month of May, according to numbers just released by the Japan Automobile Dealers Association.
In total, Toyota sold 10,915 Prius models to take the top sales spot, which was held last month by rival Honda Motor Co. and its new Insight hybrid. For May the Insight dropped to third with 8,183 units sold. Honda did manage to grab the second spot as well, however, selling 8,859 Fits in May.
This marks the second straight month in a row that a hybrid has been the top seller in Japan. Hybrid sales have become increasingly popular in Japan due to government incentives as well as significantly reduced prices.
After Honda priced its Insight at $19,700 in Japan, Toyota responded by dropping the MSRP on the Prius to $20,900 – almost $3,100 less than the past model.
“I am very relieved about the sales, and I am excited to find out more about the customers’ response,” said top Prius engineer Akihiko Otsuka.
Despite the success of the Toyota Prius in the past, this is the first time it has ever clinched a monthly top-seller spot in Japan.
[Source: The Associated Press]
The new 2010 Toyota Prius isn’t about to let the Honda Insight take over in the hybrid segment and strong initial sales show the Toyota model will be another big success for Japan’s largest automaker. Japanese business magazine Nikkei is reporting that Toyota has already accepted 75,000 orders for the new Prius. This news comes just a few months after Honda announced demand for it’s Insight hybrid in Japan was triple what was expected.
Toyota recently responded to Honda’s challenge in the hybrid marketplace by slashing the MSRP of the new Prius significantly.
Toyota has high hopes for the new Prius as the company recently posted a $6.9 billion loss for its fourth quarter and said it expects an annual loss of $8.6 billion.
A recently management shakeup is also part of the plan with the founder’s grandson (Akio Toyoda) taking the top position, 40 percent of managers being replaced last month and former executive Yoshimi Inaba returning to the company to lead U.S. operations.
Toyota is expected to release pricing for the new 2010 Prius tomorrow and the cost of ownership will be 21,000. This is $1,000 less than the current model.
Bloomberg is reporting the drop and citing an unnamed source.
This news comes several weeks after Japan’s Nikkei newspaper reported Toyota made a similar move in it’s home market of Japan. At that point, doing just the basic Yen to dollar comparison showed a Prius priced at $20,750 – so the $21,000 price expected to be released tomorrow isn’t far off.
The cost is still above the Insight, which starts at just $19,800, but the Prius does offer superior fuel-economy with 51/48 mpg (city/highway) compared to the Insight at 40/43 mpg. The Prius is also roomier as it is technically classified as a mid-sized vehicle as compared to the Insight, which is a compact.