Toyota again proves it’s the cover-up that hurts most

February 13th, 2010 / Author: admin

The massive Toyota vehicle recall has been described as both a savage hit to the company’s reputation and bottom line.  It has also pointed out the fact that not all context is the same.

In the normal course of a product problem, the kind of release issued by well-respected online automobile advisor, Edmunds.com, would have had real effect.  Here is the lead of the release:

“Edmunds.com, the premier online resource for automotive information has obtained and reviewed the National Highway Traffic Safety Administration (NHTSA) complaint database.  A key finding: despite being the subject of intense scrutiny of the company, Toyota ranks 17th among automakers in the overall number of complaints per vehicle sold.”

Based on market share, consumer complaints put Toyota ahead of Honda and BMW.  The problem is that the Toyota story — a high-quality, low-defect, long-lasting automobile manufacturer — has been tarnished not because of the sudden acceleration and slow-braking, but because of the company’s response.

It is thought to have delayed its decision to recall and then did it in a piecemeal fashion.  Toyota’s is not an engineering problem, but one of its image.  NHTSA data is no match for having jilted its consumers.

Here is how one blogger deflated the Edmunds.com trial balloon:

“So, what does all of this mean? That’s debatable. Consider that these issues, which were reported to NHTSA by consumers themselves and entered into an database that’s not checked for accuracy, are not weighted for severity. So, a seemingly trivial issue counts just the same as one that could lead to a serious accident or death.”

The real damage was described well in The Washington Post:

“One thing that has probably changed forever is the idea that the Japanese have superior quality,” said David E. Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich. “Toyota is a great company and they’ll go on, but that historic concept of superior quality is probably gone forever.”

Mr. Cole may have some hometown interest, but his point is well-made (no pun intended).  If Toyota is to regain its standing (Edmunds.com projects a one percent drop in U.S. market share as a result of this mess), it will have to deliver on its original promise, one customer at a time.