-- Toyotatm announced Thursday what is calls its most sweeping credit incentive-discount program ever. It came a day after the Japanese auto giant, which so far had escaped much of the auto industry's woes this year, reported a 32.3% sales falloff for September compared with the month a year ago.
In a bid to revive traffic in showrooms, Toyota will offer 0% financing on 11 models through Nov. 3. The deal covers most of the Toyota brand except hybrids and the Yaris subcompact. The company's Scion and Lexus brands are not included.
While Detroit automakers have used such incentives widely in recent years, it is an unusual step for Toyota, which has prided itself on its ability to rack up sales without big discounts on sticker prices.
"It's an indication that nobody is immune," says Rebecca Lindland, a consultant for Global Insight. "This also eliminates the perception that 'Detroit should have known better' or 'This is all their fault.' "
Toyota officials say they saw the need for a bold step to drive customers back to quiet showrooms. Many are staying away in fear that they can't get financing, or it will cost a lot, amid the credit crunch.
"People are sidelined by the idea there is no credit," says spokesman Xavier Dominicis. The deal applies to those with at least good, but not necessarily perfect, credit who seek loans through Toyota's own financing arm. Terms vary depending on model, from 36 to 60 months, for the 0% offer.
The announcement followed September sales that Toyota said were its worst single-month decline in a decade. It exceeded the 26.6% industrywide slide that marked the worst month for automakers collectively since February 2003, Autodata said.
"This was probably a shock, and they were going to respond," says Jim Hossack, consultant for AutoPacific. After years of some of the industry's healthiest financial results, Toyota is in an enviable position to "be the quickest responder" in trying to boost sales.
Other automakers are sure to follow with campaigns of their own, Hossack adds.
Vehicles covered under the campaign include Camry, Corolla, Matrix, Tundra, FJ Cruiser, 4Runner, Highlander, Sequoia, Sienna, RAV4 and Tacoma.