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Toyota Dealers Say GM Incentives Misuse Taxpayer Money

Posted: Mar 10, 2010 10:43 a.m.

If you're a current Toyota owner, GM would like to offer you some cash to switch brands.

Not surprisingly, some people have a problem with that.

The U.K.'s Financial Times reports, "Toyota's US dealers launched a broadside against General Motors on Tuesday, accusing the Detroit carmaker of using taxpayers' money to counter generous incentives that Toyota has offered to win back buyers."

General Motors, along with other car brands like Ford and Hyundai, began offering incentives to Toyota owners soon after Toyota's sticking accelerator recall began. While this type of incentive isn't unheard of, the federal government using incentives to persuade car owners to change brands is. And since the federal government currently owns 60 percent of GM, that's exactly what the Toyota dealers say is happening.

Autoblog explains: "The Toyota National Dealer Council, which represents approximately 1,250 Toyota dealers across the United States, claims that using taxpayer dollars for this purpose is 'reckless, unfair and detrimental to the entire auto industry.'"

Paul Atkinson, the head of the council, told USA Today, "It is outrageous that GM is using our taxpayer dollars against us."

Autoblog comments, "While we believe it's a potentially rational argument for the TNDC to make, we must remember that no specific evidence has been presented to completely prove their point. GM may be mostly owned by the U.S. government, but it's still an autonomous company, and no one can say for sure if its marketing decisions are, in any way, influenced by the officials in Washington, D.C."

The Financial Times points out that this complaint may be just one in a series of tit-for-tat arguments between Japanese and U.S. car makers. The Times says that American car makers have "long accused Japan of favouring Toyota by, for instance, helping to fund Toyota's financing arm, keeping foreign vehicles out of the Japanese market and manipulating the exchange rate of the yen."

Check out the latest Toyota recall news and information, including how the company's recent troubles affect our rankings. If you're in the market for a new car, check out the U.S. News rankings of this year's best cars as well as this month's best car deals.