Recently, Toyota’s enormous scale in the number of recalls since late 2009 has been one of the greatest issues throughout the world. This situation is far more shocking because Toyota has been the No.1 car maker which has guaranteed the safety and high quality of its products since 2008.
They have surpassed General Motors (GM), which has also been one of the world’s greatest companies in the past. Presently, Honda, another famous car company from Japan, is also having recalls due to a defect in their window switches. Needless to say, the recall policies among Japanese car companies mentioned above would have an effect on the overall confidence and positive image of these Japanese manufacturers.
The Toyota Motor Corporation has been famous for its safety and quality, and that was one of the key elements to their success. However, a car accident occurred in California, U.S on August 2009 which was caused from the unintended acceleration of the 2009 Lexus ES350. The car went out of control and crashed into a ravine, killing four people. This incident resulted in the National Highway Traffic Safety Administration (NHTSA) of the U.S. asserting the possibility of a problem in the gas pedal, but Toyota claimed that there were no defects in their products.
There had been reports that the floor mat could have caused the accident by pressing on the gas pedal. Toyota announced it would recall 3,800,000 Lexus’s to fix the design flaw that could cause the gas pedal to become trapped under the floor mat. Nevertheless, Toyota had to expand recalls as there were continuing reports of unintended acceleration and gas pedals that were sticking, even, even for some products where the floor mats had been removed. The reputation of Toyota has decreased as it announced that it would recall more than 8 million cars worldwide to shorten the gas pedals, and remove the padding in order to prevent the pedals from getting stuck on the floor mat.
In January 2010, the automaker said that it would stop producing and selling 8 designated models: - the 2009-2010 RAV4 Crossover, the 2009-2010 Corolla, the 2009-2010 Matrix, the 2005-2010 Avalon, the 2007-2010 Camry, the 2010 Highlander, the 2007-2010 Tundra, and the 2008-2010 Sequoia - until the middle of February in the North American market. It also said it would recall 437,000 cars of the 2010 Prius hybrid and other gas-electric models worldwide to fix the glitch.
The Cause of Toyota’s Defects
This crisis caused an extensive investigation into finding out what the problems were created from. Toyota had to respond to the question, “What is the reason the cars made by Toyota are not able to slow down and go out of control?” Toyota asserts that the causes of defects are the faulty parts of gas pedals manufactured by CTS.
Some indications suggest that this crisis was caused by the supply system of machine parts which Toyota has constructed for a long time, meaning that Toyota has failed to apply both reduction of costs and quality control into CTS as the scale of business expanded. On the other side, some say an electronic interference could be a cause of the runaway cars. Some defects of Toyota vehicles have been reported since 1999, but Toyota only started to use the parts from CTS in 2005. It has been suggested that the fact there were more car accidents caused by unintended acceleration of Toyota’s products (19 accidents) than other cars also tells us that simple faults of machine components can’t be the only cause of the problem.
The Wallstreet Journal said that many car corporations seem to depend on electronic control devices where safety and quality control are not tested enough. When there is a problem with the devices, fuel and the amount of air would be regulated abnormally generating unintended acceleration or sudden speeding, even in cases where the gas pedals function properly. CTS, an American company which have been supplying automobile components to Toyota, denied that there were any faults in the parts they delivered saying that the gas pedals they made have no defects. CTS pointed out that Nissan had no problems and they also purchased components from CTS, although their gas pedals are different in the quality of the lumber and structure compared to Toyota’s.
Safety of Toyota Products Sold in South Korea
As the crisis of Toyota’s recall has expanded, people in Korea are paying much more attention to the safety of the Toyota cars sold in Korea. Toyota Korea said Camry and RAV4 sold in Korea are made in Japan and their components, shape, and quality are different from the cars sold in the United States. Therefore, they can be restored properly and there are no defects relating to the unintended acceleration.
However on February 2nd, Toyota Korea announced that it will recall some parts of the Toyota cars in Korea. This is because there are plenty of American made cars which owners bought directly from an import enterprise or a resident and brought them into Korea. The SK Network which imported and sold the Camry and the Avalon from the United States in 2007~2008 announced that it would also recall their products.
The Ministry of Land, Transport, and Maritime Affairs (MLTMA) is taking ‘a fresh look’ at the capacity of Toyota models being marketed in Korea. It is inquiring into the facts of the case based on the explanation of Toyota Korea by requesting an Automotive Test & Research Center. The MLTMA said it will directly investigate about any defects when there is a problem in the automotive test results.
Toyota is also recalling in France and India, and aggressively examining whether to recall cars made in the United States and being exported to the Middle East or to South America.
Toyota’s Struggle to Solve the Case
Toyota is struggling to restore its confidence and the safety of its products by announcing a counter plan about the recalls. The plan is about reinitiating the production of eight designated models of the recalls and examining whether to restart selling those cars or not. It is also about when to start repairs of the gas pedals of all the cars that are being recalled, as well as reducing the friction by attaching a strengthened board to the gas pedals.
Toyota said that the reason for announcing a huge recall policy without any plans was to ensure consumers of their decision that safety of car owners was their first priority. The president of Toyota Motor Sales U.S.A., James Lentz, appeared in a two-minute video on Toyota’s website and apologized to customers for three times. He also appeared on the NBC network in the U.S. and said, “I hope you give us a chance to earn back your trust.”
In spite of the efforts and plans that Toyota is suggesting, many car enterprises are surmising that there will be a limit to shortening the amount of shock and loss due to the recalls. In particular, plans for preventing relapses or detailed explanations about the cause of this crisis, if not disclosed, would be fatal to regaining confidence from consumers. The defects of gas pedals being reported for a few decades could also be a fatal shortcoming for Toyota.
Toyota’s recall crisis could be the initial point of falling brand confidence of the Japanese car companies. There is evidence that there has been a decline in the cost of Japanese vehicles in the used car markets. To get over its crucial moment Toyota is planning to explain that the defects of the cars are limited to the automobile parts made by CTS, and show that no safety problems have occurred in cars produced in any other countries, including Japan.
How Will the Toyota Recall Crisis Effect Korean Car Companies?
According to some experts, Hyundai or Kia’s brand popularities will potentially be increased as the confidence of the Japanese car company’s is decreased, subsequently increasing the market share of the Korean cars. Korean car manufacturers compete with the Japanese mainly in the marketing of compact and midsize cars in the North American market. Specialists in the stock market say the amount of benefit that Hyundai would get in a short time depends on how long Toyota has to stop its production.
Hyundai also announced to give a $1,000 incentive to Toyota owners who change their cars to Hyundai in the United States. The models are the Sonata, the Elantra (Avante in Korea), and the Elantra Touring. The automaker said Hyundai wasn’t going to use Toyota’s crisis as a marketing plan. However, it initiated the marketing plan for a few days after GM and Ford started marketing to Toyota car owners to switch to their vehicles. In addition, Hundai and Kia Automotive announced that the auto parts maker Sejong Industrial Co. was awarded the Grand Quality Five Star rating, a quality standard that has been reinforced since last year.
However, Hyundai and Kia are also in danger of facing similar crisis like Toyota as they have tried to benchmark Toyota which has built plants worldwide, contrived to expand, and concentrated on reducing unit costs of auto parts. In order not to repeat the same failure as Toyota, the Korean automobile companies must analyze this crisis carefully and use it as a valuable lesson.