Everyone not dead from the neck up over these past 18 months will know Toyota’s been in the news lately.
A year or so ago, it was all good – a predictably ‘Toyota’ outcome. GM fell flat on its face and became, essentially, a US Government department (okay, that’s taking it a bit far) and the Big T leapfrogged it to become the world’s number one car maker, with a production capacity of about 10 million vehicles.
Volkswagen, with its sights set on world domination, issued bold statements about overtaking Toyota to become the world number one by 2018 (VW was in a position to do that after it threw Porsche on the mat for a three-count after the bespoke sports car manufacturer’s failed attempt to do the David vs Goliath bid there).
About the same time, the new Prius, which is built in a factory with grass on the roof, in production lines capable of spitting out a Prius in under a minute, 24/7, nudged Honda’s Insight aside to become Japan’s top-selling car – a position it has enjoyed basically every month since. It even topped out 2009 with the Prius as Japan’s top seller.
And then the bad news kicked in. A former top in-house lawyer for Toyota named Dimitrios Biller alleged that the company covered up, or failed to produce, evidence in dozens of litigation claims. The lawsuit made quite a splash, but appears to have fizzled out.
A US family in a Lexus borrowed from a dealership found themselves on the freeway with the accelerator jammed to the floor at high speed. Despite having the presence of mind to dial 911, they lacked the smarts to simply nudge the transmission into neutral or just shut the engine down. They died in a harrowing high-speed crash, with the audio recorded like all 911 calls, and then released to the media.
Defective floor mats were allegedly to blame. At least at first, when similar reports of uncommanded acceleration started to filter through. An incredible two-point-something million cars were slated for recall. And then more and more. The problem metastasised around the world, and the total now stands at more than eight million cars.
You look up in the night sky, and some smart-ass says there’s 20 trillion stars up there. You go: “Yeah.” Someone says eight million cars, you go: “Yeah.” Like, it’s a lot, but how do you quantify eight million cars?
Like this. If you need a five-metre-long space to park a car, then eight million cars stretches 40 million metres, which is 40,000km – the approximate circumference of planet Earth. It’s also a traffic jam stretching from Sydney to Perth – 10 lanes wide.
It transpires that the problem’s no longer just floor mats, either. It’s accelerator pedals that are too long, and a lack of ‘deconfliction’ software in the ECU (lines of code that say if the brakes are on, best throttle off the engine). Both of those fixes are now under way as well.
So, happy days … except for the Tacoma, which has a recall about its driveshafts, which are potential failures looking for a place to happen.
And then there’s the Prius, which appears to have defective code in the braking software – at least on some models.
There’s also the allegations brought to bear that the company didn’t act quickly enough on the sticky accelerator front, and those matters are still in the pending tray.
It’d be fair to say that it is not a happy time to be in a board meeting at Toyota HQ. Reputation-rebuilding will be high on the agenda over coming months, and billions will be spent cleverly re-establishing the Big T’s position as the grand high poobah of quality and reliability.
The media has certainly smelled blood – I mean, we are talking about the biggest recall in automotive history. That’s newsworthy. But is it good policy to give a company a kick for doing the right thing? It’s easy to forget recalls are an ethical way for a car company to conduct business.
Much better on the moral front than, say, keeping quiet and settling liability claims out of court, with watertight confidentiality agreements ensuring the problem never gets the oxygen of publicity.
Toyota is spending millions on recalls – and not all of the vehicles fixed would ever have become defective. The company is overwhelmingly fixing potential problems only. And they’re doing it out in the open, in the public domain, with their reputation taking a beating.
I’m not an apologist for Toyota, but the company really seems to be pulling out all the stops to rectify the problems. I haven’t always agreed with the way the do business. For example, leaving ESP off the current Corolla for months after it was first introduced was, literally, a crime against humanity, in my view.
The big winners out of all of this have been companies like Ford, GM and Honda. In the US, GM and Ford sales surged in January by the same amount Toyota’s fell – a ballpark figure of about 20 per cent in each case. And Honda? Well, Honda’s had its own highly ethical recall underway – hundreds of thousands of vehicles with a potentially (note that word) defective airbag inflator module, a part Honda does not even manufacture itself. Luckily, the Honda recall is dwarfed by Toyota’s recall woes by more than an order of magnitude, and it has hardly blipped on the media radar.
Finally, recalls are a standard way of doing business in the car industry (and other industries). It’s understandable, perhaps, why customers expect perfection – just look at the way cars are marketed. But it’s also unreasonable, because cars are complex machines and problems are unavoidable.
The big question is: How much damage will the recall and the attendant media coverage do Toyota? Some commentators are smelling blood, but I reckon the damage is all short-term. It might come as something of a shock, but most of the world is not made up of car nuts like us. Most people don’t even bother to hear news about cars – until they’re in the market for their next car. That’s the only time their ears are to the ground, automotively. And that’s the majority of people Toyota sells cars to.
So, people in the market now might have some reservations. They might even buy a Honda or a Mazda, or even a Hyundai or a Kia instead of a Toyota – right now.
But in six months’ time, when Jethro and Cletus Kettle take the long drive down off Walton Mountain and trade in their seventh Camry at the local dealer, one guess what they’ll end up driving home? That’s the kind of brand and customer loyalty Toyota is banking on.