Like most car owners, I've been amazed to see how many problems Toyota is experiencing with its cars. I'm also surprised to see how poorly they've handled it (The New York Times reports that Toyota issued the recall only after U.S. Transportation Department officials had to fly to Japan to 'remind Toyota about its legal obligations.' Apparently, the car maker knew about the pedal acceleration issues as long ago as April, but did nothing to alert consumers about it). I've heard about differences within the ‘auto culture’ before, but didn't think they extended to not doing the right thing.
In the midst of the Toyota chaos (and the latest report that the legendary Prius is also experiencing problems), I have to believe the shell-shocked, erstwhile Big Three are gleefully rubbing their hands. For once, Detroit's egregious mistakes and missteps are out of the spotlight. For once, Detroit can focus on regaining the monumental market share losses of the past three decades.
But, will they? Ford is beautifully positioned to do so (and, apparently saw a 25 percent sales increase in January). Chrysler, though, is a mere shell of its former self and actually dropped eight percent in January sales. If they can't take advantage of Toyota's weakness now, will they ever? And GM, which changes CEOs more often than Chipotle churns ad agencies (see yesterday's blog), posted a healthy 14 percent January sales gain.
Despite the Ford and GM successes, I think Toyota will be just fine. They've built tremendous brand loyalty over the past 30 years by owning dependability and affordability. And, I for one, still have a classic Pavlovian response whenever I even consider purchasing an American car (I shudder in horror just thinking about the shoddy workmanship of years past).
Toyota has to come clean in a hurry (which can be a tough thing for an auto company that is used to holding its cards close to its corporate chest).
The carmaker can easily regain its image and reputation mojo if it stops stalling, starts repairing and goes beyond a few 'mea culpas' from its U.S. executives on CNBC, MSNBC and Fox Business.
Tell us why the problem happened, Toyota. Tell us why it took so long for you to respond and why U.S. officials had to force you to do so. And, while you're at it, tell us what's up with the Prius.
Tell us you've fixed all the problems. And , most importantly, tell us why it won't happen again.
Detroit is still way too weak to capitalize on Toyota's missteps. That said, time's a wasting. And, I'm not liking the lack of transparency.
Both then and now, it’s corporate arrogance.
VW/Audi’s unintended acceleration problem was never proven, but many of their PR wounds were self-inflicted. At one point, Audi blamed the customer, saying the brake and accelerator pedals were close together and people were hitting the wrong one. That largely turned out to be true, but the “60 Minutes” piece and disasterous PR ruined Audi for the next 10 years.
When I worked with a lesser Japanese manufacturer, we dealt simultaneously with an SUV rollover problem, embarrased Tokyo employees hiding safety problems in company lockers, a lingering sex harrasment suit, a Ponzi-scheme sales program, and Ecstasy-using kids buying their supplies with the corporate logo on top. Our client said “man, could they pour it on us any more?”
RepMan’s probably right — Toyota will be fine. But it’s been another 4 days and Toyota doesn’t seem to be turning the tide. In fact, they’re getting deeper into the mire. The damage on this one is gonna be HEAVY.
Nice insight, Lunch. Didn’t know you possessed auto sector experience. Toyota’s in a heap of trouble because they weren’t open and honest about these problems from the get go. Never ceases to amaze me how many executives think the problems will just go away if they bury them.
Years ago, I believe, Audi had a problem with its fuel injector which caused it to accelerate and crash. I think this black eye lasted a while…and Audi has only been a popular ride (after this problem) for the past 15 years or so, max.
If anything the boys at Toyota should see how Audi handled a very similar problem (in the factories and with the public) and take what good from it they can find.