How Recall Affects Toyota's Largest U.S. Market: Calif.

fromKQED

Toyota's recall of millions of vehicles plus its decision to halt sales of eight popular car models will have a big impact in California — the company's largest American market. Toyota's bad news may be a boon for sales at other dealerships.

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STEVE INSKEEP, host:

And next, lets ask how this affects Toyota dealers. We are going to go to California, where one of every five new cars is a Toyota. Now, some rival dealerships are hoping to capture a lot of that business. Mina Kim, of member station KQED, visited dealerships in the San Francisco Bay area.

MINA KIM: At the Toyota dealership Downtown Toyota in Oakland, salesman Fredune Samin(ph) sits at his desk, looking out at a showroom thats empty of customers. Samin says the recall and sales halt of eight popular models affects 50 percent of his inventory, and business has slowed.

Mr. FREDUNE SAMIN (Downtown Toyota, Oakland): Right now, we cant even sell nothing. More than half of the stuff that we have here, we cant.

KIM: His manager, Mohammad Khan, interrupts us and sounds a brighter note.

Mr. MOHAMMAD KHAN (Manager, Downtown Toyota, Oakland): Its not bad. We still have the Prius. We are selling Prius. We have small cars. We are selling small cars.

KIM: Khan says he has been getting a lots of phone calls from worried customers, and some have come in to get their cars checked. But he says once he's able to explain the situation, they leave feeling reassured. Still, some industry analysts predict Toyotas problems will get worse as customers turn from the brand. According to published reports, the National Automobile Dealers Association estimates U.S. dealerships could lose a combined $2.5 billion a month in revenue. Down the street at Volkswagen of Oakland, general sales manager Brady Gibson says he expects plenty of new business.

Mr. BRADY GIBSON (General Sales Manager, Volkswagen of Oakland): It should be a huge increase with the Corolla, you know, Jetta comparison, and the Camry and the Passat comparison.

KIM: Gibson says his team has been meeting daily to figure out how to capitalize on Toyota's misfortune.

Mr. GIBSON: They've built their reputation on reliability. It's been the toughest thing for us, as a Volkswagen dealer, to compete with. Well, now that might be changing.

KIM: Over at the Ford Store in San Leandro, general sales manager Phil Baltazar says he's already had two customers come in since the recall, saying they'll never buy a Toyota again.

Mr. PHIL BALTAZAR (General Sales Manager, Ford Store, San Leandro, California): They're coming back to American, especially Ford.

KIM: The Ford Motor Company is now offering incentives to Toyota owners who want to get rid of their vehicles: $1,000 towards the purchase of a Ford for anyone who trades in a Toyota, Honda, Lexus, Scion or Acura. Ironically, it's Ford employee Tito Talampas(ph) who's first in line.

(Soundbite of automobile engine)

KIM: Talampas points to his shiny, white, 2009 Toyota Camry parked in the Ford lot with a look of disgust. He says he bought it for his wife, but now she's refusing to drive it, even once it's fixed.

Mr. TITO TALAMPAS (Ford Employee): So I've been driving it now.

KIM: Do you feel safe driving it?

Mr. TALAMPAS: Not really. Well, how would you feel having that kind of a recall, you know?

KIM: Also browsing the Ford lot is Carol Doyle, who's been looking to replace her Honda. She says Toyota's problems with sudden, unintended acceleration knock the carmaker off her list immediately.

Mr. CAROL DOYLE: It's deadly, and I have a teenage daughter who is in the car with me and God forbid, you know, something like that were to happen.

KIM: But loyalty to Toyota is still strong among some Californians. Malka Healthman(ph), the lone customer at Berkley Toyota, says it will take more than an acceleration problem to shake her confidence in the company.

Ms. MALKA HEALTHMAN (Toyota Customer): I already own Toyota Prius, and I love it. So I don't - I'm not scared.

(Soundbite of laughter)

KIM: Healthman is even nudging her son to consider a Corolla once its problems are fixed.

For NPR News, I'm Mina Kim.

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