Toyota cuts prices in China

"Price can be discussed, and now you do not have to queue up, there are cars available now," a FAW Toyota sales consultant in Shanghai told First Financial Daily reporter on March 7, 2010.

On the same day a FAW Toyota dealer in Beijing claimed that they can reduce the price by 8,000 yuan if you buy RAV4 from their store.

Consumers can still clearly remember that, just over two months ago, if you wanted to get a RAV4 in time, you must pay an additional 6,000 to 10,000 yuan otherwise you must wait two months before you get the car.

After experiencing Toyota's aggressive global recall, consumers clearly perceive Toyota dealers' change from arrogant to humble. The sudden price cuts show the amazing destructive power of the 8.5 million car recall.

Beijing FAW Toyota sales consultant told the reporter that the "new Crown (2.5 liters) has cut its price by 20,000 yuan".

"Price cuts of new cars on the market in less than 3 months are very rare. There is no dealer who will take the initiative to cut prices," a joint venture brand 4S store deputy general manager in Wuhan said. When new cars hit the market, if prices drop too much, its brand image will be greatly affected. The price fluctuations will affect high-end car customers who pay attention to quality and brand.

In fact, although the Crown is Toyota's best-selling model in the world, in China it has been suppressed by Audi and BMW, and its monthly sales remain at around 3,000 cars.

In addition to RAV4, Toyota's new Crown, Yaris, Vios, Corolla are also experiencing price cuts to varying degrees. A variety of Toyota models including Camry, Reiz, Corolla, and Vios suffered price cuts from 10,000 to 16,000 yuan.

All these things are results of Toyota's large-scale recall worldwide since January this year. Shanghai FAW Toyota dealers in particular, feel the downturn. There is a sharp drop in the number of customers coming to look for cars and turnover rates have greatly reduced.

Another possibility of dealers cutting the price may be that Toyota is selling more cars to dealers to shift its own pressure. National Passenger Cars Association data in February shows, in February FAW Toyota ranked 6 on the list of wholesale amount with 40,215 cars, but it did not enter top ten of the national sales ranking. This means that the actual sales of FAW Toyota are far less than its wholesale.