• Automotive News, Monday, March 22, 2010 10:55 AM

Traffic and sales are way up at Toyota dealerships, thanks to aggressive incentives, Kathy Jackson and Arlena Sawyers report, but the spiffs could damage the traditionally high resale value of the brand.

"Incentives fuel sales from bargain shoppers," says Kelley Blue Book analyst James Bell. "But once that audience is satisfied, it remains to be seen how much buyer interest they will see -- no matter how much cash they put on the hood."

Some analysts believe that Toyota will find it difficult to return to the high ground through the rest of the year. "The lessons learned are that once you offer a certain amount of incentives for a model year and take them away," says Jesse Toprak, vp of industry trends at TrueCar Inc., "you see a big slip in sales." As a result, he predicts that Toyota's incentives will continue to rise through the summer.

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