IBJNews

Analyst: Recalled Toyotas likely won't face long-term resale hit

Back to TopCommentsE-mailPrintBookmark and Share

The recall of several Toyota models for sticking accelerator pedals raises the question of whether customers who bought them due to a perception of quality, prior to the recall, now will be burned when they go to sell them.

Probably not, “as long as it continues to be handled very transparently” by Toyota, said Tom Kontos, executive vice president of customer strategy and analytics at Carmel-based Adesa Auction Services, the nation’s second-largest used-vehicle auction chain

One reason is that Adesa and some of its competitors have pulled the affected Toyota vehicles from auction until the problem is resolved.

If not, buyers likely would expect to buy them at auction at a lower price.

“To the extent you halt the transactions you don’t run the risk of damaging a vehicle’s value,” said Kontos.

That Toyota plans to reimburse dealers for eventual repairs also will help to hold vehicle values, he added.

For now, not only has Adesa temporarily pulled the affected Toyota vehicles from auction but is having them transported by flatbed truck rather than driven to auction sites as a safety precaution for its employees.

Kontos said he hasn’t seen anything like the Toyota situation since the firestorm nearly a decade ago involving Firestone tires that were blamed for causing a rash of Ford Explorer rollovers. In that case, the tire tread separated.

Ford agreed to replace the tires free of charge. Values of Explorers at auction fell, although it may have had as much to do at that time with a glut of used sport utility vehicles coming off lease, Kontos said.

Toyota is suffering from a stream of recalls, however. In addition to the recall announced this week of 2.3 million U.S. vehicles, last September it announced a 3.8-million vehicle recall to secure floor mats that could jam the accelerator pedal.

In the last several years the Japanese automaker has announced recalls involving its Tundra full-sized pickup for problems including frame rust, a defective camshaft on V-8 engines, and separating rear propeller shafts.

The recall announced this week on some of its most popular vehicles involves gas pedals manufactured for Toyota by Elkhart-based CTS Corp.

Affected are certain Avalon, Camry, Corolla, Matrix, Highlander, Tundra and Sequoia models.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Aaron is my fav!

  2. Let's see... $25M construction cost, they get $7.5M back from federal taxpayers, they're exempt from business property tax and use tax so that's about $2.5M PER YEAR they don't have to pay, permitting fees are cut in half for such projects, IPL will give them $4K under an incentive program, and under IPL's VFIT they'll be selling the power to IPL at 20 cents / kwh, nearly triple what a gas plant gets, about $6M / year for the 150-acre combined farms, and all of which is passed on to IPL customers. No jobs will be created either other than an handful of installers for a few weeks. Now here's the fun part...the panels (from CHINA) only cost about $5M on Alibaba, so where's the rest of the $25M going? Are they marking up the price to drive up the federal rebate? Indy Airport Solar Partners II LLC is owned by local firms Johnson-Melloh Solutions and Telemon Corp. They'll gross $6M / year in triple-rate power revenue, get another $12M next year from taxpayers for this new farm, on top of the $12M they got from taxpayers this year for the first farm, and have only laid out about $10-12M in materials plus installation labor for both farms combined, and $500K / year in annual land lease for both farms (est.). Over 15 years, that's over $70M net profit on a $12M investment, all from our wallets. What a boondoggle. It's time to wise up and give Thorium Energy your serious consideration. See http://energyfromthorium.com to learn more.

  3. Markus, I don't think a $2 Billion dollar surplus qualifies as saying we are out of money. Privatization does work. The government should only do what private industry can't or won't. What is proven is that any time the government tries to do something it costs more, comes in late and usually is lower quality.

  4. Some of the licenses that were added during Daniels' administration, such as requiring waiter/waitresses to be licensed to serve alcohol, are simply a way to generate revenue. At $35/server every 3 years, the state is generating millions of dollars on the backs of people who really need/want to work.

  5. I always giggle when I read comments from people complaining that a market is "too saturated" with one thing or another. What does that even mean? If someone is able to open and sustain a new business, whether you think there is room enough for them or not, more power to them. Personally, I love visiting as many of the new local breweries as possible. You do realize that most of these establishments include a dining component and therefore are pretty similar to restaurants, right? When was the last time I heard someone say "You know, I think we have too many locally owned restaurants"? Um, never...

ADVERTISEMENT