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Toyota rebounds from recall-induced sales slump, as does its Prius

Tainted by recalls, Toyota addressed its sales slump by introducing cut-rate financing and special lease offers. It regained its footing in March, helped along by robust Prius sales.

By Staff writer / April 1, 2010

A row of Toyota Prius cars sat on the lot at Toyota of El Cajon in El Cajon, Calif., last month. Despite a well-publicized recall involving the hybrid, sales of the Prius roared back to life in March, thanks in part to big sales incentives.

Denis Poroy/AP/File

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Recall-tainted Toyota regained its footing in March, with a 41 percent sales gain as the company's Prius model retained its spot as a the industry's hybrid best-seller.

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For customers, the offer of big bargains outweighed concerns about "unintended acceleration" in a range of Toyota models and a Prius recall for brake problems.

The Prius has long been the top-selling gas-electric car made by any manufacturer. It is also a hybrid that has recently ranked among the auto industry's 10 best-selling cars. For much of 2009, it enjoyed the No. 10 spot on Ward's Automotive list.

As recall concerns rose to a crescendo early this year, however, Toyota saw a sharp drop-off in sales traffic. In February, the company's sales were down 9 percent from year-before levels, and Prius sales sagged below 8,000 (at least 20 percent below the typical level).

By comparison, the incentive-fueled March sales roared like a lion. Prius sales reached 11,786 units, up 27 percent over March 2009. Overall, Toyota sold nearly 187,000 vehicles, up 41 percent from the same period a year earlier.

"Toyota’s strong sales performance in March reflects our customers’ continued confidence in the safety and reliability of our vehicles and their trust in the brand,” Don Esmond, a senior vice president at Toyota Motor Sales, U.S.A., said in a statement Thursday.

It was also a testament to promotions that included cut-rate financing and special lease offers spanning a lineup of cars that generally don't need a heavy sales job. Still, with rival firms also boosting incentives, the March numbers provide fresh hope for Toyota that the recall woes can be overcome.

The rebound for the Prius comes at an important time, with new all-electric vehicles from General Motors and Nissan starting to grab attention. The Chevrolet Volt is scheduled to begin production late this year, and Nissan Leaf is expected to arrive in showrooms about the same time. This week, Nissan announced a competitive price tag that may put the Leaf in a consumer's garage for not much more than $20,000.

Even in February, the Prius was America's top-selling hybrid car, with four times the sales of the runner-up Honda Insight, according to the website HybridCar.com. And for 2009, the car's success explains why Toyota alone accounted for more than half the industry's sales of 292,528 hybrid cars in the US.

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