Toyota faces more trouble as they might have to recall their Corolla
2010 has not been a good year for the world's leading automaker. The prospect of the Corolla having a recall as well could kill sales this year, and the company will have to do a lot to regain the consumer's trust. Here's the problem with the Corolla:
U.S. safety regulators will launch a formal investigation of steering complaints in certain newer model Toyota Motor Corp (7203.T) Corolla vehicles, a government official familiar with the plan said on Wednesday.
The National Highway Traffic Safety Administration has received more than 150 complaints about possible steering problems in 2009 and 2010 Corolla models, the official said, speaking anonymously because the plan has not been announced.
It will be interesting to see how Toyota responds to these problems. They initially reacted pretty poorly, and it doesn't look like there will be significant improvement. I expect Honda, Federal Motors, or Ford to capitalize on Toyota's mishaps.
Toyota has touted its trucks as being tough. Apparently, they are not so tough:
Toyota Motor Corp (7203.T) will recall 8,000 pickups due to possible cracks in a common drive shaft component that Ford Motor Co (F.N) and Nissan Motor Co Ltd (7201.T) said posed no safety risk to their vehicles.
Toyota is getting torn apart right now. This is tremendous to watch.
Toyota is facing more recalls, now including the Prius:
To fix the problem, Toyota is responding with a media blitz:
“We believe we are close to announcing an effective remedy,” the Toyota City, Japan-based automaker said in an advertisement in more than 20 U.S. newspapers yesterday.
“I am deeply sorry that we’re giving cause for concern to customers,” Toyoda said in an unscheduled interview on Jan. 29 with Japan’s NHK television network in Davos, posted to U.S. broadcaster ABC News’ Web site. “We’re preparing to explain the facts to our customers as soon as we can so that we can remove that anxiety.”
Critics aren't impressed with Toyota's response:
“They have wasted too much time without doing anything,” said Tatsuya Mizuno, director of Mizuno Credit Advisory. “Toyota used to be a company with foresight, always ready to take action, but now they have fallen very far behind the curve.”
While I may not like the company, they were one of the best run companies in the world. This is a very surprising blunder by the company. I guess part of this is because they aren't used to this kind of disaster.
Toyota Motor Corp suffered a sharp drop in U.S. sales last month as its massive recall and unprecedented sales halt allowed rivals to grab market share from the world's largest automaker.
Here's what PR Consultant, Ong Huac Chuan, had to say:
"In moments of a business crisis, people want to see a company take full responsibility, be empathic to the victims and their families and be in control by outlining the problem and how they intend to solve it. They also expect the CEO doing all this," said Ong Hock Chuan, technical adviser of Jakarta-based PR consultancy Maverick who specializes in crisis management.
"Toyota seems to have failed in all counts. It's admission of the problem has been half hearted and almost reluctant, it has failed to apologize unequivocally to victims and their families, and its failed to articulate and communicate what it intends to do to regain control of the situation."
For a business, hellbent on being the market leader, Toyota seems to have failed miserably to show its customers that it cares about them.
On the other side of the docket, Honda raised its profit forecast:
Honda Motor Co (7267.T) lifted its annual guidance far beyond market expectations on Wednesday after cost cuts drove quarterly profit to the strongest in a year and a half, and said it anticipates further growth next financial year.
Executive Vice President Koichi Kondo:
"Under these sales conditions, I see a fundamental ability to make 100 billion yen in operating profit every quarter," Executive Vice President Koichi Kondo told a news conference.
He worries though that the recent Toyota recalls will have a negative effect on Japanese brands, including Honda:
"Toyota is the front-runner representing Japanese cars," Honda's Kondo said. "In that sense, we're somewhat worried that there may be a knock-on effect on other Japanese brands, but we'll need a little more time to gauge any impact."
I would hope people see through that and recognize Honda's long history of building excellent reliable cars.
