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Toyota Dealers Unite Against Storm of Quality Scrutiny

Dealers say they expect a more polished meeting between Toyota’s executives and Congress than the disaster the Detroit Three experienced a little over a year ago.

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NADA Convention & Exposition

ORLANDO, FL – Toyota Motor Sales U.S.A. Inc. dealers show a united front at the National Automobile Dealers Assn. meeting here, expressing confidence in the Japanese auto maker’s strategy to fix sticky pedals and reassure customers their previously bulletproof quality remains intact.

“There’s no way you can compare the way Toyota has handled this with any other manufacturer,” says Tammy Darvish, vice president of DARCARS Automotive Group, a top 20 multi-brand dealer in Silver Springs, MD.

Darvish met with journalists here alongside a number of fellow Toyota dealers, as well as Bob Carter, Toyota Div. group vice president and general manager, and Don Esmond, senior vice president-auto operations, TMUSA.

Carter says the auto maker is considering a number of actions to repair Toyota’s dented reputation, including an advertising campaign and perhaps extending its current powertrain warranty from five years and 60,000 miles (97,000 km) to at least 10 years and 100,000 miles (161,000 km).

“We’ are studying everything,” Carter says. “But we are focused on what we can do for our customers. We have all that under evaluation, (but) no decisions at this time.”

Outside the confab, dealers confirm to Ward’s no warranty action is imminent.

“They talked about it, but nothing is locked in,” says Otto Belovich, owner of the multi-line Traverse Motors and Cherry Capital Cadillac Subaru in Traverse City, MI. “They’re working on some stuff.”

Bob Loquercio, owner of Bob Loquercio Auto Group in Chicago and Elgin, IL, says quick action from Toyota helped stem a sales decline at his sites.

“We had a lull in business for a couple of days,” he says, “but there has been unprecedented media (coverage).”

Carter reports 400,000 of the 2.3 million vehicles recalled for sticky accelerator pedals have been fixed, with dealers averaging about 50,000 per day – many working 24 hours and up to six days a week. The dealers have completed repairs to about 60% of the 112,000 units in inventory.

Paul Atkinson, owner of Gulf State Toyota in Houston, says 100% of his inventory has been repaired and the dealer is “back in business.”

Darvish says her dealerships have moved through roughly 80% of its inventory. “The slowness in (repairing) our stock is because we want to take care of our customers first,” she says.

Meanwhile, Carter tells Ward’s Toyota Motor Corp. has begun scrutiny of its product development and validation processes in Japan, despite perennial leadership in third-party quality studies in the U.S.

“Absolutely,” says Carter, who admits Toyota made some mistakes by not uncovering the problem sooner but says its record remains impeccable. “Frankly, no other manufacturer is close to (us). That doesn’t happen by accident.

“But nevertheless, the CEO of Toyota, Akio Toyoda, says we’re going top to bottom on every single system. And we will, take it to the bank, push the quality benchmark even further.”

The auto maker also believes it has nailed down the problem to the accelerators’ sensor and disputes claims a snafu in Toyota’s electrical systems may be the cause. Toyota has discovered just 13 bad sensors so far out the 2.3 million recalls.

“There is no problem with the electronic throttle systems in Toyotas,” he says, citing internal and third-party research on the auto maker’s cars and trucks. “We have exhaustively tested every scenario.

“Everyone comes to the same conclusion – not only is there nothing wrong with the system, there is nothing that can remotely lead you in that direction.”

Next week, Toyota executives will head to Washington to testify before Congress about the auto maker’s recent quality problems, which have been linked to some deaths.

In fact, word around the NADA show floor says a number of TMUSA executives, including President and COO Jim Lentz, have been called from Orlando to Toyota City to prepare for the summit.

Dealers say they expect a more polished meeting between Toyota’s executives and Congress than the disaster the Detroit Three experienced two years ago appealing for federal aid. Consumer perception of the Detroit auto makers wilted after the meeting.

“I’m sure Toyota will have their stuff together,” Belovich says. “I’m optimistic about it.”

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