Toyota: GM Redux?

There comes a time in many a life when an individual must prove to the world they are no longer the student, they have become the master. The transition usually arrives on the field of battle, whether it’s a real battlefield, competitive sports, academia, entertainment or business. In the case of Toyota, their moment of ascension arrived when their products outsold General Motors’ in the first quarter of 2007. Toyota bested The General by a score of 2,348,000 to 2,260,000. Toyota is the new numero uno. But it still has much to learn, if it is to avoid following its old, corpulent mentor's footsteps off the high tower of greatness.

Before Toyota became the heavy weight sumo champion of the world, their corporate samurai wanted to be just like Ford, and then GM. After all, the Americans in general, and General Motors in specific, were the automotive industry. The General dominated the world’s largest automotive market– to the point where the U.S. federal government tried to break up the behemoth by hiving-off Chevrolet. Its products were spread throughout the world, capturing customers in every corner of the globe.

Toyota came to America as representing (for many) a former military aggressor, the enemy. Starting with the Toyopet, they peddled funny little cars that were the subject of scorn, derision and dismissal. Undaunted, Toyota refined its products and process (which allowed for faster model changes). Toyota’s tighter panel gaps, better engines and conservative design helped it establish a beachhead. But it was reliability that set them apart and secured their success.

Enthusiasts may label Toyota’s products “soulless appliances,” but the automaker’s mass appeal lies in this anodyne dependability. While GM, Ford and Chrysler concentrated on style and power, Toyota focused its energies on quality and, thus, reliability. The focus catapulted them to the top.

Flash forward to 2006. Toyota was ranked fourth in JD Power and Associates’ Initial Quality Study (IQS), with only 106 problems per 100 vehicles. Lexus has historically been the number one brand according to JD and the gang. In 2007, just as Toyota sold more cars than everybody else, the company initial quality ranking dropped from fourth to seventh, behind such historically horrid brands as Jaguar and Lincoln. Lexus was knocked from its perch at the top of the IQS mountain by Porsche.

What of the newest addition to the ToMoCo household? Scion has never cracked the IQS top 10. In fact, in 2004, a year after the brand was introduced into the U.S., Scion was ranked thirty-fourth, one slot above Porsche. As stated, Porsche turned it around. So why hasn’t Toyota taken care of the newest addition to his family?

Scion is a spooky echo of GM’s Saturn. Both brands birthed when their corporate motherships were flush with cash. Both brands were heralded as changing how consumers would buy vehicles, with fresh vehicle design, friendly dealers and no haggle pricing.

Saturn has lost is its way, but what about Scion? For a few years, all seemed to be going well, much like Satrun's early days. Scion released cool, unconventional, entry-level vehicles that were highly customizable. Then came the first redesigns.

Gone are the cheeky, interesting shapes of the first-generation xA and xB. In their place: blander, fatter vehicles that seem tailored to an older generation. As TTAC’s Paul Niedermeyer reported, Toyota seems to have learned some not-so-good tricks from GM, managing to ignore and dilute a successful brand’s direction with lazy, “bigger is better” design.

In Scion, ToMoCo also seems to have unlearned one of its better tricks: maintaining model names. Toyota has one of the most loyal consumer bases in the automotive industry (again, due to its rep for build quality). Keeping the same core model names has played a large part in generating and directing this brand loyalty, as most Toyotaphiles simply trade in their old Camrys or Corollas for completely new ones.

Scion has dropped the xA moniker in favor of its all new replacement, the xD. Ignoring the fact that the American psyche is all about getting an "A" (when was the last time you were rewarded for bringing home a D?), Toyota has hampered consumer loyalty to the xA and Scion by dumping a decent model and its moniker for an inferior bloatmobile.

Toyota says its taken dramatic steps to sort out its quality issues. As it’s what they do best, we should see some movement soon. But the company is just beginning to learn that doing just one thing better than anyone else puts you in a vulnerable position. The competition can catch up. Unless they learn the lessons of their vanquished enemies, they will be condemned to repeat them. It looks as if that process is already in motion.