
While the damage to Toyota’s reputation has certainly taken a hit of late due to the widely publicized problems with stuck accelerator pedals on many models, a case could have been made that it was insular event. At the time, it was fortunate for Toyota that the ‘image flagship,’ the Prius, was not involved in the recall. It would seem the other shoe has now dropped as well.
Several hundred drivers have filed complaints that they have experienced delays before the brakes fully activate in the Prius, or that the brakes sometimes became ‘confused’ in certain situations, leading to accidents.
The problems at the company have gotten to the point where Toyota President and professional hermit, Akio Toyoda (who is also the founder’s grandson) left his bunker and made a rare public appearance at a hastily called press conference Friday. Of interest, when Akio tookover the position at Toyota he promised to be the President “closest to the frontliness,” but instead has earned the nickname of “No-show Akio.”
Shockingly, he offer no apology and blamed the previous president and his management team for any and all problems, claiming that everything was perfectly fine now at the ‘new’ Toyota…and the public was just being ridiculous about the whole thing and should move on with it and start buying cars from them again.
Alright, none of that last paragraph is at all true. Mr. Toyoda did exactly what was expected of him; he apologized half a dozen times and promised to fix the problems plaguing the automaker and once regain the trust of the car buying public…while not actually offering anything of real substance.
“We are facing a crisis,” he said. “I offer my apologies for the worries. Many customers are wondering whether their cars are OK.” Mr. Toyoda then promised to strengthen the quality control, and announced a special committee would be formed to ensure Toyota’s return to former glory, and that it would be headed up by himself personally.
However, his rare televised news conference was not without incident. In Japan, it is customary for executives to bow at the start of such a conference, and also when giving a apology. Mr. Toyoda’s bow during the apology portion of the program was received by the local media as being half-hearted and ‘not deep enough’. /the horror
The Toyota president also failed to address the Prius situation directly, and offered no immediate solution or direction to current Prius owners, just that he “has ordered swift action.”
Officially, Toyota has stated that the situation has already been rectified at the factory. Apparently, they retooled the brake mechanism in January and also did a software update to ensure the problem is not a issue going forward. Which is great if you want to buy a new Prius I guess…but not so good if you already own one of the 270,000 odd copies on the road and have been zipping around on bad brakes the last few months (while Toyota has known about the problem) and are still looking for a fix. (The NHTSA has not yet weighed in on the repair procedure, and announced Thursday it was opening a official investigation)
These situations have lead to Toyota taking a lot of heat, both at home and in the US, for acting too slowly. There is also a growing perception that Toyota is only reacting to safety concerns after being taken to task by US and Japanese transportation authorities.
In the US, Toyota has taken blow after blow by the NHSTA Transportation Secretary Ray Lahood, who recently gave Toyota’s share price a 7% haircut by uttering the statement, “my advice is, if anybody owns one of these vehicles, stop driving it.” That statement was later ‘taken back’ by Mr. Lahood, but retractions are nothing like headlines…and the damage was done.
A few days ago, I wrote a piece entitled, Is Toyota’s Pain GM’s Gain? and although this crisis is badly hurting Toyota’s sales now and for the foreseeable future (they posted a 8.7% loss in January with only a few of the days at the end of the month being affected by these recalls) it is still unclear if GM will directly benefit.
Will a customer looking for a Toyota Camry make the jump to a Malibu? Or will they look to another manufacturer? Honda would seem to benefit the most from that scenario. Or will they simply insist on still buying that Camry, but look to postpone that purchase until well after the US Transportation Secretary gives Toyota the rubber stamp of approval and stops saying things like Toyota is “a little safety deaf”? I wager many will fall into that last camp. People don’t need a excuse to not buy a car right now, and many of Toyota’s customers in the end are probably still fairly loyal. (JD Power surveys puts the retention rate at over 60%) I expect the bulk of Toyota’s lost sales to be mostly customers deciding to just not buy. A no win situation for the industry as a whole.
However, coupling Toyota’s damaged brand name with the tarnish that has been put on the Prius’ halo, it will definitely help one car in particular at GM, our own Chevy Volt.
The Prius is purchased for not only how it performs and how much fuel it saves, but also for how it makes you feel, and how you are perceived by your peers. (The ‘smugness’ factor if you will) Many cars have come and gone attempting to compete with, and dethrone the Prius…all have failed. In the end, it may be this convergence of events that opens the door enough for another car to someday take over its halo, and the mantle of the car of the future.
/I don’t see why that car can’t be the Volt