Even Toyota is feeling the pain from a lousy US auto-industry downturn.
Leasing problems have contributed to some pretty painful profit (or lack of it) numbers in Tokyo, where Toyota Motor Corp. reported a 38.9 percent drop in operating profit. How would you like to take a 39% cut in your pay? Not a good thing for anyone.
Toyota was rising to take over the number one spot from GM for motor vehicle sales and now has been hit by falling vehicle values as it takes back thousands of off-lease cars and trucks that it can't resell for what was the projected lease-end value back in the glory days of leasing. That's a lesson Chrysler already learned the hard way when it announced it was getting out of the leasing business altogether, much to the loudly-voiced dismay of its dealer network, some of whom are reported to have pushed more than 80% of their sales through leasing arrangements. Moody's Investors Service downgraded its ratings of Chrysler LLC further into "junk" status and warned that it might cut it even lower. It's now 7 levels below what Moody's calls "investment" grade. I don't know what that means, but it doesn't sound good.
But it's not just leasing numbers that is hurting Toyota. Even the normally hot-selling and gas-sipping Prius sales are slipping (3.9% through July compared with the same period of 2007). That's a sign that the dismal economy in general is hurting Toyota sales beyond the luxury and low-mpg vehicle lines.
Still, the numbers aren't as bad as GM, where they took a $2 billion painful hit in the first quarter at the same time Ford was writing $2.1 billion off its books.
But don't fret for Toyota. Their profit was still at a hefty $3.93 billion, according to Automotive News reports released Aug. 7, on a revenue of $59.2 billion. To help cope with the fallilng numbers, Toyota cut its sales target by 200,000 units while the Toyota corporate suits said the North American market was in a "challenging situation" right now. Yeah, right. No kidding, guys.
If you can avoid buying a new car, you might be better off keeping that money in your pocket for now. And if your dealer is giving you the run around on repairs, now's the time to be careful.
Got a lemon and can't get satisfaction? Call or email us right now. The economy may be tough but we can help you out.
ABOUT THE AUTHOR
Known nationwide as a leading Lemon Law attorney, Ronald L. Burdge has represented literally thousands of consumers in "lemon" lawsuits and actively co-counsels and coaches other Consumer Law attorneys. From 2005 through 2018, attorney Ronald L. Burdge has been named as the only Lemon Law Ohio Super Lawyer by Law and Politics magazine and Thomson Reuters Corp., Professional Division. Burdge restricts his practice to Lemon Law and Consumer Law cases. The Ohio Super Lawyer results are published annually in the January issue of Cincinnati Magazine. Ronald L. Burdge was named Consumer Law Trial Lawyer of the Year 2004 by the National Association of Consumer Advocates, the nation's largest organization of consumer law private and government attorneys. "Your impact on the auto industry has been magnified many times over because of the trail you blazed for others," stated NACA's Executive Director, Will Ogburn. Burdge has represented thousands of consumers in Ohio, Kentucky and elsewhere since 1978 and is a frequent lecturer to national, state and local Bar Associations and Judicial organizations. Burdge is admitted to Ohio's state and federal courts, Kentucky's state courts, and Indiana's federal courts. Other court admissions are on a "pro hac" temporary, case by cases basis.