Nikkei: Toyota Recall Ruins Reputation

by Bertel Schmitt

Published: January 23rd, 2010

Today’s Nikkei [sub] says that the latest Toyota recall “is seen as a major dent in the side of the leading Japanese automaker’s reputation as a builder of reliable automobiles.”

Financially, the recall “is not expected to have a major impact on Toyota’s earnings for the current year through March 31 because the company had more than 400 billion yen in reserves for dealing with recall costs at the end of the previous fiscal year.”

However, the matter will most likely snowball: “The company is still investigating whether similar problems exist for models sold in other countries. But because the same accelerator pedal mechanism has been used in some European models, the recall may be expanded.”

That’s the Nikkei in Tokyo. Not a bunch of posters on message boards. Note: Audi’s “unintended acceleration” set the brand back by nearly a decade in the USA, never mind that the NHTSA concluded that the majority of unintended acceleration cases were caused by driver error. A truly sticky accelerator can have more serious consequences, especially in the current environment, in which everybody fights for his own survival.

#BertelSchmitt #Japan #Recall #Toyota

Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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9 of 136 comments

Psarhjinian on Jan 24, 2010
IMHO, the pinnacle of Toyota quality lies with the 1992 Camry. From the 1995-96 refresh onward, things just took a turn for the cheap. Compare a 92 with a 02 and a 09 and you’ll see how far down the drain the subjective quality has gone. And yet the actual problems per vehicle rate has gone down since then. Objective quality wins again. Tactile quality really is overrated, especially among the older edge of Gen-X and older. What older generations call "cheap" is what the current generation finds appealing, and I think that we really ought to realize that the soft plastic dash is going the way of the whitewalls, wire wheels and landau tops.

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- Len_A on Jan 24, 2010
  
  Objective quality wins again? May I suggest you go back and read Bertel Schmitt's comments above: It's the Nikkei in Tokyo suggesting that Toyota's quality reputation is taking a hit. Not a bunch of posters on message boards. It's amusing to watch the Toyota car fans react to any criticism of the car maker.
  
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- Stingray on Jan 25, 2010
  
  So we should resign to having a craptastic hard dashboard, in ever increasing price cars, because younger generations are more conformist than older ones? I have one answer to you... NO. I'm 31 years old and will try as far as I can to not purchase a C-D segment car with a hard touch dash. For the cheap cars in A-B is ok, for the more expensive ones is not. Or you're are willing to pay for a hard touch dash in an S-Class Benz just because is "fashionable". Valid also for some very BIG SUVs
  
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- Psarhjinian on Jan 25, 2010
  It’s amusing to watch the Toyota car fans react to any criticism of the car maker. I'm not a Toyota fan as much as I'm a media critic. It's true I do own one (a base-trim Sienna) but it really could have gone either way (Sienna, Oddy, Mazda5) and it was the price that got me. What I do have is an inherent distrust of the same media machine that made hay faking the Audi 5000 acceleration claims, as well as rigging GM half-tons with explosives to demonstrate their inherent tendency to explode. According to the NHTSA, the bulk of "unintended acceleration" claims are bogus, and generally the result of people confused about which pedal they're currently pushing. I can vouch for this: my wife put our (manual transmission equipped, for you MT snobs) into a heavy iron pole because she didn't know which was which; my mother in law has managed the same trick, and my old boss (a two-foot driver) rear-ended so many people he actually lost his license. You'll forgive me if I don't have a little more respect for engineers who design fault-tolerant systems for a living, and a little less for media parasites and the general public. The hard dash thing is something I've been harping on this site for months. To whit: I had a Saab 9-3 for a few years, and it had a nice, soft dash and stylish interior appointments, and I watched as the engine sludged, the HVAC system broke, the transmission started to chew parts and it ate brake discs yearly. None of this was subject to a recall (the sludging issue was convered under a secret warranty). But boy, was the dash nice and soft. People walk into a high-end A/V stores and cheerfully drop a few grand on a stereo looks very much like the IP of a modern car. Older appliances, trimmed with wood and leather, are a kind of retrograde joke. We're seeing the same design cues in cars: dashboards and controls that look more like a high-end piece of AV equipment, both of which are "hard plastic". It's at it's most striking in a modern Honda, but it's not isolate to them, not by a longshot, and this is despite auto reviewers bemoaning how each new model is cheaper and harder. What is actually happening is that those same reviewers are getting more and more out of touch. The proof is in the sales numbers: people want cars that don't cost them a lot of money to own and operate. Hard plastic dashes aren't going to turn people off**, nor are large-scale recalls. The reaction, or lack thereof, among the public is more telling about how divorced from reality enthusiasts really are. As if the sales of Pontiac G8 and the constant clamouring for manual diesel wagons wasn't proof enough. ** when GM was being lambasted for this, the problem wasn't that the car was cheap inside, it's that it broke down and cost money to fix. A Corolla of the same vintage as most Cavaliers was just as dour inside, but the Corolla didn't cost you nearly as much to keep, nor be as likely to leave you stranded, nor come from a company that treated warranty obligations like a leper's underpants.
  
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BuzzDog on Jan 25, 2010
And one owner having problems with six out of ten cars suggests the problems are not exaggerated. It may suggest that he drives like a bat out of hell. Or his kids may abuse his cars without him knowing it. Or he has a crappy dealer. Not saying any of this is the case, but it's why it's foolish to base any manufacturer's reputation on the experiences of one owner. That's not my opinion; it's something that's taught in any freshman-level statistics class. And no, I'm not a Toyota loyalist...

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Psarhjinian on Jan 25, 2010
Your smug observations about sales numbers, the media, and the general public don’t change that. No, they don't, nor was that my intent. That would be why Toyota issued a recall and/or why the NHTSA will mandate recalls, and why a lot of money is spent on both sides of the fence (government and industry) investigating this kind of thing. Where I get "smug" is about the media hysteria, partly in the autoblogosphere but in the MSM as well, especially around whether or not this will "destroy Toyota's reputation" and how Toyotas are supposedly "falling in quality". On one hand, we have objective reports that put Honda and Toyota models at or near the top of just about any quality ranking you can name. On the other hand, we have blogosphere wankery about how both manufacturers products are supposedly terrible, have gone downhill over the past ten years, indeed if they were ever that good at all. Again, on one hand: objective evidence. On the other: hearsay and, quite frankly, wishful thinking. I'm sorry that accepting the former over the latter is "smug", but I guess that's the nature of image politics: facts are "smug" but gut feelings based on anecdotes are indisputable. This recall episode is immaterial to their quality rankings because, as past experience tells us, consumers just don't care about recall notices as a measure of quality. They honestly don't. The companies that make cribs, carseats for children, toys and foodstuffs and such have seen recalls (and bodycounts) that would make executives in automobilia pale and yet, somehow, they're still in business. The reason is that they're not costing consumers, en masse, serious money for their mistakes. That's what costs reputation: cost, not recalls. I'm sorry you find this condescending and smug. Guess what? It's how the world actually works. Asking questions like "Will this destroy Toyota?" or blogging on it incessantly in search of page hits through the discussions it engenders**, I'd hazard, is far more self-serving than myself and others pointing out the reality of the market. ** hi, Autoblog!

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- Toasty on Jan 25, 2010
  
  Fair enough. I think we came at this from different angles more than anything else. I really don't care about Toyota's reputation, except that their response to this problem might be affected by the pressure they feel to get it right. I wasn't involved in the discussion of Toyota's decline in "quality", as I find that to be a separate level of concern from safety issues like this. Market forces can deal with non-safety issues just fine, as GM is finally learning.
  
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- Toasty on Jan 27, 2010
  
  I thought of a variety of snarky, I-told-you-so posts, but decided against going that route. Whether self-initiated or government imposed, I'm glad Toyota halted sales and production of the affected vehicles and appears to be fixing the problem. It'll hurt sales for a bit, and their rep has definitely taken a hit, but neither problems are unrecoverable. Toyota makes good vehicles, and this latest recall might provide exactly the motivation they need to reorganize before GM-itis reaches a terminal phase.
  
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Rnc on Jan 25, 2010

Well damn, don't think there's much to add to this one.

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