KBB: Models in Direct Competition with Toyota Could See Used-Value Lift
IRVINE, Calif. — According to Kelley Blue Book's director of vehicle valuation, vehicles that directly compete with the models impacted by Toyota's recall and sales stoppage could benefit from the automaker's troubles.
Juan Flores said that some consumers who previously considered buying a Toyota may instead look to competitors. If this occurs, these competing vehicles could actually show an appreciation in used values.
More specifically, he explained, "Toyota's much-publicized recall may have far reaching effects in the used-vehicle marketplace. As Toyota's perceived quality continues to take a hit, there may be a substitution effect as in-market consumers that had been considering a vehicle from Toyota begin to look for alternatives.
"This shift in demand could potentially lead to appreciation in the vehicles that directly compete with the vehicles affected by Toyota's recall. Additionally, as rental car companies adjust their fleets to account for their loss of Toyota inventory, they have been putting vehicles that were intended to be sold at auction back into service. Potentially, Kelley Blue Book expects that a reduction in the supply of available vehicles at auction could push used-car values upward, most noticeably on models that directly compete with recalled Toyota vehicles," he continued.
On another note, James Bell, executive market analyst with Kelley Blue Book, said that one of the reasons Toyota may be coming under more scrutiny of late is due to the automaker's strong sales success. He said Toyota is making the right move helping dealers make repairs to the eight affected models first.
"News that Toyota dealers will begin throttle pedal repair first tells us that Toyota does understand one important rule of automotive success — without the support of the dealer network, their perilous situation could take a further turn for the worst (if that is even possible)," Bell indicated.
"When Toyota passed GM as number one in 2008, I warned them — America loves underdogs, but often loses respect for the new champs. The incredible amount of scrutiny that Toyota has endured since the ‘Throttle Summer of '09' caught them off-guard, and no doubt was fueled by the ‘kick number one around' attitude," he added.