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ALG Reports Residual Value Impact of Toyota Recall

March 17, 2010

As a result of massive recalls and ensuing media coverage, Automotive Lease Guide reports that future Toyota resale values face risk from its recent incentive spending program and a drop in ALG’s Perceived Quality Scores (PQS).

As a result, Toyota may have lost 13 percent of its potential customers because of the recall. The majority of consumers, though, seem resistant to changing their long-standing beliefs about Toyota’s quality, ALG reports.

“The lack of a severe decline in retention data and new market sales supports this fact,” the company writes in a recent research report. “The downside risk is that if this story stays in the media for an extended period, loyalty to the Toyota brand is likely to decline further. So far, of Toyota’s potential consumers, 70 percent are willing to disregard these recalls completely and maintain their brand loyalty. This could improve if the recalls are dealt with effectively, by up to a further 17 percent.”

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