Despite Recalls, Here's Why Toyota Holds Onto Customers

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Tustin Toyota dealership in Tustin, California.

Another January, another massive recall by Toyota.

This makes three straight years where Toyota announces it is recalling more than a million vehicles in the month January.

The latest one impacts 1.7 vehicles worldwide, including 245,000 here in the U.S. for faulty and defective fuel systems.

There have been no injuries or deaths linked with this latest recall, but that doesn't diminish the importance of Toyota once again having a quality problem.

Given the long and growing record of recalls and bad press, you'd expect Toyota to lose millions of customers. And yes, while its sales have not grown as fast as the industry in the last year, Toyota is still the world's largest automaker. It's been that way for three years straight. This baffles a friend of mine who recently said to me, "Are these people who keep driving their Toyota cars nuts?"

No, they aren't nuts.

They're loyal.

The vast majority of them have never had a major problem with their car or truck, and they've been comfortable with their Toyota dealer. You may think that sounds ridiculous, but the way Toyota customers stand by the brand is no different than the way GM and Ford customers kept buying GM and Ford models when those companies were recalling millions in the 90's and early 2000's. Remember those days? I do.

For years I would hear people say to me, "Geez, Ford just recalled a bunch of cars. Why do people keeping buying those cars?" The answer is loyalty. Most of the people who stuck with GM and Ford in the 90's were longtime owners who did not have a reason to switch to a different brand. So they stayed loyal, despite recall after recall after recall.

Now, the same thing is happening with Toyota. Just as GM and Ford lost some customers when they were going through years of declining quality, Toyota is now feeling an impact as it announces problem after problem after problem. It's a significant impact, but sales are not falling off a cliff. And I don't expect that scenario to change. Car buyers who have been treated well by their dealer and have had no reason to complain about what they're driving will generally stick with that brand. At the end of the day, this is the reason why Toyota continues to hold on to the bulk of its customers.

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